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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
CHRISTOPHE KULLMANN, CHAIRMAN OF THE BOARD, FONCIERE DES REGIONS: (Interpreted) Thank you from coming in such a fine turnout to the start this afternoon. I know it's a very busy period because, I mean, the companies reporting their results at the same time, but that's the way annual financial results are. So first of all, Fonciere des Regions activities for the year, financial elements, outlooks, after which we will take your questions.
Fonciere des Regions. Today, primarily for office spaces, it's a long-term positioning because it's in France, Italy and Germany. At the end of December 2007, EUR11.2 billion in group share, some 78% in offices. These offices were raised to 60% in France and 40% in Italy. Fonciere des Regions is also an integrated company with platforms and professionals managing our portfolio in France, Germany and Italy. In all three companies we have integrated platforms managing our assets. Primarily office assets, but major stakes in the tertiary sector as well as in residential sector, logistics and residential area. So here you have the group and its assets as of the end of 2007.
2007 we saw Fonciere des Regions continuing its progress with its assets almost doubling in 2007, primarily with offices since offices increased by EUR4.2 billion. Most of this because we acquired 6% to 8% of capital in Beni Stabili, the number one Italian real estate company. It was also because of the Gan Tower in La Defense, and the buyout of minority interest in Technical. We hold the remaining assets of this company, owning assets, leased entirely to France Telecom, EUR800 million in acquisitions made by our dedicated portfolios. This is why our assets doubled in group share.
So this strong growth was accompanied by a strong consolidation in our organization as we bolstered our management teams with Denis Moscovici who is here with us today. He's in charge of all administrative and financial activities and also, in the near future, we'll be having [Pascal Combre], who will be in charge of all major projects for the group.
Furthermore, this year we continue to implement our business lines, so one team for dedicated major projects was set up, with in the future a company in charge of major projects, managing all of the group's major projects. We have also spun off property management operations in France. And we continue to structure dedicated pure play subsidiaries, in particular, by setting up a dedicated structure for logistics, Fonciere Europe Logistique, and by transferring all residual housing assets to our subsidiary, Fonciere Developpement Logements.
Now the key figures for 2007 group share -- okay, well, they're quite good, very good overall. Recurring cash flow, EUR271 billion. Net income, EUR793 million. NAV, including Transfert Dutty per share, EUR123.6. We also reported end of the year a triple net NAV per share at EUR109. Recurring cash flow, EUR7.50. And we're proposing to the next general meeting a dividend of EUR5.30 based on rates. Beforehand, we were talking about 5.79% in terms of share yield price -- share price yield.
Now liquidity at Fonciere des Regions has increased significantly since three years now, but especially since the past year. And quite simply, we looked at average daily volumes traded since mid-2006. And as you can see, the improvement is quite significant between the middle of 2006 and 2007. And the average daily volume traded -- 84 million traded, accelerating significantly after the end of the year. 84,000 traded and increasing significantly after Beni Stabili.
So the shareholding at Fonciere des Regions, we have seen the two main shareholders increasing their stake -- Batipart, Charles Ruggieri holding, taking over some portion of capital end of 2007 and Delfin with Leonardo Del Vecchio, the main shareholders in Beni Stabili.
So their increased stake took place as a part of the shareholder agreement with General Electric, selling to Batipart their [31%] of shares. We also set up a treasury stock buyback program, end of last year, the start of 2008. We acquired for EUR25 million at an average price of EUR88 and EUR21 million of shares in January at an average price of EUR78. The -- we're talking about 560,000 sahres and they have now been cancelled, of course. They have a very positive impact on our cash flow and our NAV.
Regarding activities for the year, might I point out first of all, that Fonciere des Regions, we have two main areas of development, dynamic management of existing assets based on two items, first of all. More partnerships with our major tenants who are leaders in their sector -- France Telecom, EDF, Accor, Telecom Italia, Eiffage, Banca Intesa, for example, the others.
Secondly, in dynamic management, the disposal of assets on maturity. We have always been accustomed to and we're determined to having a regular rotation of our real estate portfolio and we have continued with this strategy in 2007. Leading to a very high occupancy rate, as you shall see later on and long-term leases on our real estate assets, leading us to have a very secure cash flow over long periods.
The second area of development is with the implementation of major projects. We have a pipeline amounting to EUR1.7 billion of group share, representing 15% of the group share, EUR1.2 billion in France and EUR500 million in Italy. So, I'll now give the floor to [Olivier] to telling us about offices in France.
OLIVIER ESTEVE, GENERAL MANAGER REAL ESTATE DEVELOPMENT, FONCIERE DES REGIONS: Thank you, Christophe. I'm going to make a presentation on the office business in France. First of all, the rental income, a very good year for Fonciere des Regions since the rents grew by 6.7% on a like-for-like basis. This is of the indexation and thanks to the work of the team. We re-rent [75,000] square meters in 2007, over 50% within the framework of firm -- six firm leases. 12,000 square meters in Lyons pre-let at 100%, 8,500 square meter in Lille re-let in under two months. The teamwork allowed us to have an occupancy rate at 99.7%, so we did not maintain it, we increased it to 99.7% and the residual duration of leases is 3.6 years, identical to what was in 2006.
If we look at the assets, EUR4.4 billion plus 13% on a like-for-like basis, due half to increased rents and attributable to rate tightening during the first quarter mainly. In the table, you...
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