Paris Realty Fund : PAREF annual results 2022

PAREF reports another year of operational success
in all its business lines

PAREF Group's total turnover reached €41m in 2022, up by 40% compared to FY 2021

• Assets under Management exceeded €3.0 bn as at Dec 31, 2022, +12% vs. Dec 31, 2021 
• EPRA Net recurring results up by 20% reached €4.9m (vs. €4.1m in 2021)
• EPRA Net Asset value (Net Reinstatement Value/NRV) per share is €128.0 per share, down by -1,5% vs. €130.0 per share as at Dec 31, 2022
• Loan to Value ratio (LTV)[1] maintained at low level of 22% (equal to Dec 31, 2021)
• Substantial liquidity of nearly €50m (including an undrawn committed credit line)

The REIT activity continues to evolve towards assets undergoing major transformation for higher environmental quality

• €192m of owned asset (+10% on a like-for-like basis vs. Dec 31, 2021)
• Financial occupancy rate[2] achieved 99.1%, improved by +3.8 bps vs. Dec 31, 2021
• The redevelopment project The Go located in Levallois-Perret was delivered in Q4 2022 and entirely let six months before the delivery
• The redevelopment project of the Léon Front asset was launched after the construction permit was obtained and purged in 2022, with the objective of “HQE Very good”, “BREEAM Very good” and “WiredScore Gold” certificates

The management activity on behalf of third parties remains dynamic, with double-digit growth in assets under management

• €2.8 bn managed on behalf of institutional or individual third parties, +13% vs Dec 31, 2021

• Revenues on commissions reached €34.3m, increasing substantially by 61% vs. €21.3m in 2021
• Gross subscription amounted to €194m, up by 92% vs. 2021
• «The Medelan» witnessed significant progress in leasing activity, with 71% of the space leased or under binding offer

The Management Board of PAREF proposes a distribution of dividend at €3 per share to be paid in cash for the fiscal year of 2022, to be approved by the Annual General Meeting scheduled on May 17, 2023.

The Management Board of PAREF, during the meeting held on February 16, 2023, approved the closing of the annual statutory and consolidated accounts as of Dec 31, 2022. The review of the results by auditors is in progress.

“Throughout 2022, we continued our strategy of strengthening our portfolio with assets corresponding to our ESG strategy. Our underlying annual results are improving from both operational and financial standpoints. Supported by PAREF's entrepreneurial DNA, we will continue to offer best-in-class services to our clients and deploy the «Create More» ESG plan with our stakeholders.

I wish to express my gratitude to all the colleagues of PAREF Group, for their commitment throughout the year in a complex environment. It is the commitment of each colleague that enables us to achieve such promising results.”

Antoine Castro - Chairman & CEO PAREF Group

1 - Operating activities

1.1 Real Estate activity for direct investment (PAREF REIT)

As at Dec 31, 2022, PAREF holds:

• 7 assets directly, mainly office assets in Greater Paris area;
• financial participations in SCPI and OPPCI.

Dynamic leasing activity in 2022

Leasing activities remained dynamic in 2022 with 2 new leases and a lease renewal for more than 9,000 sqm, representing 12% of real estate assets, of which notably:

• a new lease for nearly 6,000 sqm with a firm 9-years term for The Go asset located in Levallois-Perret, signed 6 months before the delivery, and
• a new lease and a lease renewal signed for floors in the Franklin Tower in La Défense, for more than 3,000 sqm, achieving 100% occupancy rate[3].

Thanks to these transactions, the financial occupancy rate of the portfolio reached 99.1%[4] as at Dec 31, 2022, vs. 95.3% as at Dec 31, 2021.

The weighted average lease break (WALB) stands at 4.2 years by the end of December 2022, vs. 4.4 years end 2021.

The expiry schedule of rents of owned assets is as follows:

Decrease in rental revenue due to disposals and the continuation of portfolio upgrading

Net rental income of PAREF reached €6.7m in 2022, down by 16% vs. €8.0m in 2021. This decline is principally explained by:

• the disposals made in 2021 (full year impact) and 2022;
• the vacating of premises as a result of the redevelopment project of the Léon Frot asset in Paris;
• an one-off revenue in 2021.

Rental income on owned assets (in K€)	2021	2022	Evolution in %
Gross rental income	8,839	7,088	-20%
Re-invoiced Rental expenses	2,586	2,555	-1%
Rental service charges	-3,454	-2,915	-16%
Non-recoverable rental expenses	-868	-360	-59%
Other income	2	0	-97%
Net rental income	7,974	6,728	-16%

The gross rental income slightly decreased by 0.9% on a like-for-like basis vs. 2021 and the average gross initial yield on owned assets is 6.5%, compared to 6.6% as at Dec 31, 2021[5].

Disposals in line with the repositioning strategy

PAREF continued the assets rotation strategy that has been implemented in 2018, aiming to sell non-strategic and mature assets and to gradually upgrade the portfolio towards assets of more significant size and mainly located in Greater Paris Area.

Thus, the disposal of the office asset located in Juvisy-sur-Orge generated a premium of 60% compared to the latest valuation as at Dec 31, 2021.

Le Gaïa[6], an office asset of nearly 11,000 sqm let to high quality tenants, was sold at a net selling price in line with the latest valuation.

Value of real estate assets is up by 10% on a like-for-like basis, supported by redevelopment works

PAREF's owned assets amounted to €192m as at Dec 31, 2022[7], composed of real estate assets of €179m and financial participation of €13m in funds managed by the Group.

Key indicators on owned assets[8]	Dec 31, 2021	Dec 31, 2022
Number of assets	9	7
Lettable area (in operation)	82,363 sqm	74,191 sqm
Valuation	€184m	€179m

On a like-for-like basis, the owned assets amounted to €179m, up by 10% vs. Dec 31, 2021. The evolution of portfolio is primarily explained by:

• capitalized expenses of redevelopment projects for €18.7m in 2022;
• an asset disposal for €2.8m (valuation as at Dec 31, 2021); and
• a negative variation in fair value of investment properties for around €2.0m: mainly due to the decrease in valuation for the floors in the Franklin Tower in La Défense, partially compensated by the value creation of the restructuring project on The Go asset.

1.2 Management activity on behalf of third parties (PAREF Gestion and PAREF Investment Management

The Group's two subsidiaries, PAREF Gestion and PAREF Investment Management, bring their know-how and expertise to institutional and retail investors.

PAREF Gestion: strong increase in fundraising and dynamic investment pipeline

Annual gross subscription of SCPI amounted to €194m in 2022, up by 92% vs. 2021. This growth is mainly explained by increased interests in SCPI Novapierre Allemagne 2 (+€98m vs. 2021), showing investors' confidence on the strategy deployed and on the capacity to deliver good performance.

Breakdown of the gross subscription of SCPI in 2022:

Type	Funds	2021 Gross subscriptions (€ M)	2021 Gross subscriptions (€ M)	Evolution in %
SCPI	Novapierre Allemagne 2	29	127	337%
	Interpierre France	18	22	25%
	Novapierre Résidentiel	32	22	-32%
	Interpierre Europe Centrale	17	15	-9%
	Novapierre Allemagne	5	6	30%
	Novapierre 1	0.4	1.2	200%
Total		101	194	92%

The ratio of net subscriptions over gross subscriptions is 89.10%, revealing retail investors' confidence in the Group's products.

In terms of investment, the Group has mad nearly €275m in acquisitions for all the SCPI under management and reinforced its footprint in Europe, in particular:

• €170m for Novapierre Allemagne 2;
• €63m for Interpierre France ;
• €22m for Novapierre Résidentiel ; and
• €20m for Interpierre Europe Centrale.

The Group has also continued to proactively manage the portfolio under management by concluding disposals for approximately € 57m in 2022, of which namely:

• €46m for the portfolio of Cifocoma and Cifocoma 2[9] ;
• €5m for Novapierre Résidentiel ;
• €3m for Interpierre France ; and
• €2m for Novapierre 1.

As result of the quality of the Group's management, the performance of the SCPI under management improved with dividend distribution rates in line with or above forecasts.

It is also worth mentioning the significant increases in subscription price for three SCPI, which demonstrated the capacity of the Group to create value for investors in the long term and the relevance of the investment strategies in place.

Funds	Dividend distribution rate[10]	Increase in subscription price	Total performance[11]
Interpierre Europe Centrale	5.37%		5.37%
Novapierre Allemagne 2	4.50%	4.00%	8.50%
Novapierre Allemagne	4.80%	7.69%	12.49%
Novapierre 1	4.51%		4.51%
Interpierre France	5.40%		5.40%
Novapierre Résidentiel	2.28%[12]	4.31%	6.59%

Assets under management by PAREF Gestion on behalf of third parties totaled €2.1bn; increased by 13% vs. €1.8bn as at Dec 31, 2021.

Type	Funds	Strategy	Assets under Management (€ M) 31/12/21	Assets under Management (€ M) 31/12/22	Evolution in %
SCPI	Novapierre Allemagne[13]	Retail	672	662	-2%
	Novapierre Allemagne 213	Retail	185	380	105%
	Novapierre Résidentiel13	Residential	351	364	4%
	Interpierre France13	Office/Logistics	208	275	32%
	Novapierre 113	Retail	247	240	-3%
	Interpierre Europe Centrale13	Office/Logistics	16	43	168%
	Cifocoma 14	Retail	26	4	-84%
	Cifocoma 2[14]	Retail	25	4	-84%
Sub-total SCPI			1,732	1,974	14%
OPPCI	Vivapierre	Hotel resorts	87	83	-5%
Total OPPCI			87	83	-5%
Other AIF			26	26	2%
Total			1,845	2,082	13%

PAREF Investment Management: a European presence supported by its expertise in asset restructuring

PAREF Investment Management operates in France, Italy, Switzerland and Germany. Its mission is to provide institutional investors with the skills and services already provided within the Group, notably in investment, asset management, property management, project management, legal and financial services.

Since 2021, PAREF Investment Management has been managing an office redevelopment project on The Trade asset in Frankfurt and another office asset BC 140 in Budapest, both on behalf of institutional investors.

The redevelopment of The Medelan asset, located in Milan's historical city center, managed by the Italian subsidiary, has seen significant progress in leasing activities during 2022: 91% of office space and 43% of retail spaces are let or under binding offer. This mixed-use asset covers ca. 55,000 sqm and will offer the best market standards, particularly from an environmental standpoint, with an expected Leed Platinium certificate. The project was delivered in Q1 2022.

Commission revenues in strong increase by 61% in 2022

C ommissions (in K€)	2021	2022	Evolution in %
Revenues on commissions
- of which management commissions	11,884	15,508	30%
- of which subscription commissions	9,435	18,759	99%
Total Revenues on commissions	21,320	34,266	61%

Management commissions up by 30% vs. 2021, amounting to €15.5m in 2022. This increase is mainly explained by the synergies and the development of activities:

• +€1.3m: commissions related to the delivery of The Medelan;

• +€1.1m: commissions received from the mandates on BC 140 in Budapest and The Trade in Frankfurt;

• +€0.6m: commissions linked to the new investments in the SCPIs; and
• +€0.6m: commissions generated by asset disposals for SCPIs Cifocoma and Cifocoma 2.

Gross subscription commissions reached €18.8m in 2022, almost doubled vs. 2021, and is directly related to the robust increase of fundraising in 2022.

1.3 Assets under management at Group level

The value of assets under management exceeds €3.0bn, up by 12% vs. Dec 31, 2021.

In € M	Dec 31, 2021	Dec 31, 2022	Evolution in %
1. Management for owned assets
PAREF owned assets	165	179	8%
PAREF participations[15]	31	13	-59%
Total PAREF portfolio	196	192	-2%
2. Management for retail and institutional third parties
Novapierre Allemagne	672	662	-2%
Novapierre Allemagne 2	185	380	105%
Novapierre Résidentiel	351	364	4%
Interpierre France	208	275	32%
Novapierre 1	248	240	-3%
Interpierre Europe Centrale	16	43	168%
Cifocoma	26	4	-84%
Cifocoma 2	25	4	-84%
Vivapierre	87	83	-5%
Other AIF [16]	26	26	2%
Assets under Management by PAREF Gestion	1,845	2,082	13%
Assets under Management by PAREF Investment Management[17]	656	739	13%
Total 3rd-party Assets under Management	2,501	2,821	13%
Adjustments[18]	-12	-13	7%
3. Total Assets under Management	2,686	3,001	12%

2 - Consolidated P&L 2022

Detailed consolidated P&L (in K€)	2021	2022	Evolution in %
Gross rental income	8,839	7,088	-20%
Reinvoiced service charges, taxes and insurance	2,586	2,555	-1%
Rental service charges, taxes and insurance	-3,454	-2,915	-16%
Non-recoverable rental expenses	-868	-360	-59%
Other income	2	0	-96%
Net rental income	7,974	6,728	-16%
Revenues on commissions	21,320	34,266	61%
- of which management commissions	11,884	15,508	30%
- of which subscription commissions	9,435	18,759	99%
Revenues on commissions	21,320	34,266	61%
Total Turnover	29,293	40,994	40%
Remunerations for intermediates	-9,960	-16,804	69%
of which fees paid to partners	-3,935	-4,908	25%
of which retro-commissions of subscription	-6,025	-11,895	97%
General expenses	-14,474	-18,382	27%
Depreciation and amortization	-1,051	-1,098	4%
Current operating result	3,807	4,710	24%
Result on disposals of investment properties	2,910	1,647	-43%
Variation of fair value on investment properties	3,134	-2,011	n.a.
Operating result	9,852	4,346	-56%
Financial incomes	-	166	n.a
Financial expenses	-1,086	-1,184	9%
Net financial expenses	-1,086	-1,018	-6%
Other expenses and incomes on financial assets	307	2,339	661%
Fair-value adjustments of financial instruments	-	356	n.a.
Results of companies consolidated under the equity-method [19]	2,078	-1,551	n.a.
Result before tax	11,151	4,471	-60%
Income tax	-117	-436	272%
Consolidated net result	11,034	4,036	-63%
Non-controlling interests	-	-	n.a.
Consolidate net result (owners of the parent)	11,034	4,036	-63%
Average number of shares (non-diluted)	1,508,131	1,508,911
Consolidated net result / share (owners of the parent)	7.32	2.67	-63%
Average number of shares (diluted)	1,511,418	1,508,911
Consolidate net result / share (owners of the parent diluted)	7.30	2.67	-63%

Current operating result came to €4.7m, increasing by 24% vs. 2021. This is mainly explained by:

• net rental income of €6.7m (-16% compared to 2021), mostly due to asset disposals concluded in 2021 and 2022 and to the redevelopment project of the Léon Frot asset which decreased the rental income in the short term;

• revenues on commissions of €34.3m, rising up by 61%, essentially reflected by the increase of gross subscription, the commissions following the delivery of The Medelan, new mandates signed in 2021 and the investments and disposals in 2022 ( mainly asset disposals of Cifocoma and Cifocoma 2);

• remuneration of intermediates reaching €16.8m, vs. €10.0m in 2021 (+69%). It is composed of 1) commissions paid to distributors of €11.9m (+97% vs. 2021), directly related to the solid increase in subscription, and 2) commissions paid to partners of €4.9m (+ 27%), driven by investment volume of Novapierre Allemagne 2;

• general expenses of €18,4m, +27% vs. 2021, as result of the reinforcement of the teams, as well as investment for business development.

Besides the elements above, the following points have also contributed to the net result:

• negative variation of fair value on investment properties of €2.0m in 2022, owing to the rise in market capitalization rate that generated a negative impact on the valuation on investment properties, regardless of CAPEX investments;

• financial expenses of €1.0m, down by 6% vs. 2021, related to the financial income from hedging instruments (SWAP) signed before the increase of interest rate in 2022;

• other expenses and incomes on financial assets of €2.5m in 2022 vs. €0.3m in 2021 thanks to the distribution of dividend following the disposal of Le Gaïa asset, 50% owned via the company Wep Watford ;

• results of companies consolidated under the equity-method of -€1.6m compared to €2.1m in 2021. This negative result is essentially explained by the works for the disposal of Le Gaïa asset.

3 - Financial resources

Gross drawn financial debt of PAREF amounts to €60m as at December 31^st 2022, stable as at December 31, 2021.

Average drawn cost of debt is 1.60% as at December 31^st 2022, vs. 1.67% as at December 31^st 2021.

The evolution of financing cost starting since 2018 is as follows:

The average debt maturity is 1.1 year as at December 31^st 2021 (vs 2.1 years end of 2021).

The drawn debt is fully hedged, limiting its sensitivity to interest rate fluctuations.

Financial covenants of the Group are solid:

	Dec 31,2021	Dec 31, 2022	Covenant
LTV[20]	22%	22%	<50%
ICR[21]	4.6x	4.7x	>2.5x
DSF[22]	13%	13%	<30%
Consolidated asset value[23]	€232 m	€230 m	>€125 m

Debt repayment schedule:

The Group has €50m available cash as of December 31^st 2022, of which cash and cash equivalent of €10m and €40m available via an undrawn committed credit line.

4 - EPRA Net Asset Value

EPRA Net Reinstatement Value (NRV) came to €128.0 per share as of Dec 31, 2022, down by 1.5% compared to €130.0 per share as of Dec 31, 2021.

This evolution is mainly driven by 1) dividend distribution in 2022 of -€4.7 per share, and 2) variation of fair value on investment proprieties on like-for-like basis of -€1.3 per share, partially offset by net recurring +€3.3 per share and a slight rise of valuation on other non-current asset of €+0.9 per share.

Regards to the recommendations of EPRA (« Best Practices Recommendations »), the indicators NRV is defined by the IFRS-consolidated value of equity (fair value accounting), the mark-to-market value of debt and financial instruments.

EPRA Net Reinstatement Value (NRV) - in K€	Dec 31, 2021	Dec 31, 2022	Evolution n %
IFRS Equity attributable to shareholders	146,082	144,437	-1%
Including / Excluding :
Hybrid instruments	-	-	-
Diluted NAV	146, 082	144,437	-1%
Including :
Revaluation of investment properties (if IAS 40 cost option is used)	-	-	-
Revaluation of investment property under construction (IPUC) (if IAS 40 cost option is used)	-	-	-
Revaluation of other non-current investments (PAREF GESTION[24] )	37,105	38,476	4%
Revaluation of tenant leases held as finance leases	-	-	-
Revaluation of trading properties	-	-	-
Diluted NAV at Fair Value	183,187	182,913	0%
Excluding :
Differed tax in relation to fair value gains of IP	-	-	-
Fair value of financial instruments	477	-1,967	n.a.
Goodwill as a result of deferred tax	-	-
Goodwill as per the IFRS balance sheet	n.a.	n.a.
Intangibles as per the IFRS balance sheet	n.a.	n.a.
Including :
Fair value of debt	n.a.	n.a.
Revaluation of intangible to fair value	-	-	-
Real estate transfer tax	12,354	12,130	-2%
NAV	196,018	193,076	-%
Fully diluted number of shares	1,508,356	1,508,911
NAV per share (in €)	130.0	128.0	-2%

5- « Create More », a committed and concrete ESG strategy

Creation of an ESG committee

An ESG committee, within the PAREF Board of Directors, was created in June 2022. This supervisory body is composed of five members, including three members are from the Board of Directors: Dietrich Heidtmann, who chairs the committee together with Antoine Castro and Yufei Jin, and with an additional two external experts: Sander Paul van Tongeren, founder and former CEO of GRESB, and Ella Etienne-Denoy, President and Managing Director of GreenSoluce from CBRE.

They bring their expertise in sustainable real estate and finance, ESG data management and clean technologies.

The committee met twice in 2022 in order to supervise the implementation of the Group's ESG strategy.

Socially Responsible Investment (SRI) Policy

As a signatory of the UNPRI[25], the Group has implemented a responsible investment charter to integrate ESG criteria in the investment process from the acquisition or portfolio entry phase, and throughout the asset management period. The implementation of an agile ESG tool based on 16 detailed criteria allows a complete evaluation of the owned portfolio. This evaluation will drive the definition of an action plan to improve ESG performance of each asset.

The Group has also taken actions on the assets managed on behalf of third parties. Two SCPI received the French ISR[26] labeIling: Interpierre France in June 2022 and Interpierre Europe Centrale at the beginning of 2023. In addition, these two funds are now classified as Article 8 under SFDR[27].

Environmental impact

With purpose to fight against global warming, energy audits have been initiated in 2022 for the assets under management in France. In accordance with the “Décret Tertiaire”, the result of the audit will be used to improve the energy efficiency and reduce the energy consumption by 40% by 2023.

Moreover, the Group is committed to limit its environmental impact on daily operations through an eco-responsible business trip policy and the integration of ESG objectives into performance indicators for each team.

Social and Societal commitment

PAREF is also involved with charitable associations. In 2022, the teams were mobilized in collaboration with Surfrider Foundation Europe to fight plastic pollution on World Ocean Day. Furthermore, PAREF supported the association « Vision du Monde » aiming to create the access to drinkable water for schools in Cambodia.

6 - Post-closing events

None

7 - Perspectives and priorities in 2023

By capitalizing on its robust business model, the Group is confident in its capacity to face an uncertain macro environment and the challenge of higher ESG requirements.

In 2023, PAREF will especially focus on:

Activities of direct investment

As a result of ongoing asset upgrading, rental income will be most likely to increase in 2023 compared to 2022, with the delivery and full leasing of The Go asset. The indexation will also have a favorable impact in this regard. In line with the ESG strategy “Create More”, PAREF will pursue value creation through asset restructuring and proactive asset management. The Group maintains its selective approach for direct investments or co-investment as a sponsor.

Activities of Management for third parties

For the retail market, the Group is striving to broaden its current funds and product range so that they can be distributed via unit-link in life insurance contract. For institutional capital, the Group is ready to offer customized thematic investment strategies, such as Value-Add oriented opportunities in the context of the current ESG transformation of the real estate sector. 

Relying on its “One-Stop-Shop” expertise across real estate management, PAREF will also shed light on its asset and property management capacities to win new management mandates and to diversify its commission revenues.

ESG “Create More” in 2023

PAREF aims to pursue the initiatives launched in 2022 to achieve carbon neutrality by 2030 for owned assets via the action plans based on energy audits, ESG performance evaluation and a dedicated CAPEX plan. The Group also sets as an objective to be recognized as a “reference employer” and to promote diversity and inclusion.

8 - Financial agenda

April 27, 2023: Financial information as of March 31, 2023

May 17, 2023: Annual General Meeting of shareholder

About PAREF Group

PAREF is a leading European player in real estate management, with over 30 years of experience and the aim of being one of the market leaders in real estate management based on its proven expertise.

Today, the Group operates in France, Germany, Italy, and Switzerland and provides services across the entire value chain of real estate investment: investment, fund management, renovation and development project management, asset management, and property management. This 360° approach enables it to offer integrated and tailor-made services to institutional and retail investors.

The Group is committed to creating more value and sustainable growth and has put CSR concerns at the heart of its strategy.

As at December 31, 2022, PAREF Group manages €3bn assets under management.

PAREF is a company listed on Euronext Paris, Compartment C, under ISIN FR0010263202 - Ticker PAR.

More information on www.paref.com

Press contacts

PAREF Raphaëlle Chevignard [phone] [e-mail]

Citigate Dewe Rogerson Yoann Besse / Marlène Brisset 06 63 03 84 91 / 06 59 42 29 35 [e-mail]

 

APPENDIX

CONSOLIDATED BALANCE SHEET

Balance Sheet (in K€)	Dec 31, 2021	Dec 31, 2022
Non-current assets
Investment properties	165,420	179,430
Intangible assets	882	883
Other property, plant and equipment	1,524	983
Financial assets	13,886	275
Shares and investments in companies under the equity method	16,183	13,613
Financial assets held for sale	1,126	1,099
Financial instruments	-	2,323
Differed tax	-	-
Total non-current assets	199,020	198,606
Current assets
Stocks	-	-
Trade receivables and related	12,093	16,713
Other receivables	909	2,568
Cash and cash equivalents	8,845	10,279
Total current assets	21,847	29,560
Properties and shares held for sale	-	-
TOTAL ASSETS	220,867	228,166
Balance Sheet (in K€)	Dec 31, 2021	Dec 31, 2022
Equity
Share capital	37,755	37,755
Additional paid-in capital	42,193	42,193
Fair-value through equity	31	64
Fair-value evolution of financial instruments	-477	1,967
Consolidated reserved	55,546	58,423
Consolidated net result	11,034	4,036
Shareholder equity	146,082	144,437
Minority interest	-	-
Total Equity	146,082	144 ,37
Liability
Non-current liabilities
Non-current financial debt	60,507	60,186
Non-current financial instruments	477	-
Non-current taxes due & other employee-related liabilities	10	25
Non-current provisions	283	496
Total non-current liabilities	61,277	60,707
Current liabilities
Current financial debt 559	559	487
Trade payables and related	4,218	10,489
Current taxes due & other employee-related liabilities	5,734	8,793
Other current liabilities	2,997	3,253
Total current liabilities	13,509	23,022
TOTAL LIABILITIES	220,867	228,166

CASHFLOW STATEMENT

Cashflow statement (in K€)	Dec 31,2021	Dec 31,2022
Operating cash-flow
Net result	11,034	4,036
Depreciation and amortization	1,048	1,098
Valuation movements on assets	-3,134	2,011
Valuation movements on financial instruments	-	-356
Valuation on financial assets held for sale	-	-
Tax	117	436
Plus ou moins-values de cession d'immobilisations net d'impôt	-2,910	-1,647
Results of companies consolidated under the equity method	-2,078	1,551
Cash-flow from operating activities after net financial items and taxes	4,077	7,129
Net financial expenses	1,086	1,184
Tax paid	-116	488
Cash-flow from operating activities before net financial items and taxes	5,046	8,801
Other variations in working capital	-476	-1,343
Net cash-flow from operating activities	4,571	7,458
Investment cash-flow
Acquisition of tangible assets	-6,447	-15,229
Acquisition of other assets	-436	-242
Assets disposal	14,965	4,427
Acquisition of financial assets	-1,426	13,640
Financial assets disposal	-	-
Financial products received	-	-
Change in perimeter	-	-
Cash-flow from investments	6,657	2,596
Financing cash-flow
Variation in capital	-	-
Self-detention shares	55	10
Variation in bank loans	24,000	35,000
Variation in other financial debt	-	-
Repayment of financial lease	-530	-585
Repayment of bank loan	-29,000	-35,000
Costs of loan issuance	-	-
Variation on bank overdraft	15	-15
Financial expenses paid	-778	-942
Dividend paid to shareholders and minorities	-3,468	-7,089
Cash-flow from financial activities	-9,706	-8,621
Increase/ Decrease in cash	1,521	1,433
Cash & cash equivalent at opening	7,325	8,845
Cash & cash equivalent at closing	8,845	10,279

EPRA Earnings per share as of Dec 31,2022

In K€	Dec 31, 2021	Dec 31, 2022	Evolution in %
Earnings per IFRS income statement	11,034	4,036	-63%
Adjustments
(i) Change in fair-value of investment properties	-3,134	2,011	n.a.
(ii) Profits or losses on disposal of investment properties and other interests	-2,910	-1,647	-43%
(iii) Profits or losses on disposal of financial assets available for sale	-	-
(iv) Tax on profits or losses on disposals	-	-
(v) Negative goodwill / goodwill impairment	-	-
(vi) Changes in fair value of financial instruments and associated close-out costs	-	-356	n.a.
(vii) Acquisition costs on share deals and non-controlling joint-venture	-	-
(viii) Deferred tax in respect of the adjustments above	-	-
(ix) Adjustments (i) to (viii) above in respect of companies consolidated under equity method	-859	915	n.a.
(x) Non-controlling interests in respect of the above	-	-
EPRA Earnings	4,131	4,960	20%
Average number of shares (diluted	1,508,131	1.508.911
EPRA Earnings per share (diluted)	2.74€	3.29 €	20%

EPRA Net Tangible Assets (NTA) as of Dec 31, 2022

EPRA Net Tangible Assets (NTA) - in K€	31/12/2021	31/12/2022	Evolution in %
IFRS Equity attributable to shareholders	146,082	144,437	-1%
Including / Excluding :
Hybrid instruments	-	-
Diluted NAV	146,082	144,437	-1%
Including :
Revaluation of investment properties (if IAS 40 cost option is used)	-	-
Revaluation of investment property under construction (IPUC) (if IAS 40 cost option is used)	-	-
Revaluation of other non-current investments (PAREF GESTION[28])	37,105	38,476	4%
Revaluation of tenant leases held as finance leases	-	-
Revaluation of trading properties	-	-
Diluted NAV at Fair Value	183,187	182,913	0%
Excluding :
Differed tax in relation to fair value gains of IP	-	-
Fair value of financial instruments	477	-1,967	-587%
Goodwill as a result of deferred tax	-	-
Goodwill as per the IFRS balance sheet	-	-
Intangibles as per the IFRS balance sheet	-882	-883	0%
Including :
Fair value of debt	n.a.	n.a.
Revaluation of intangible to fair value	-	-
Real estate transfer tax	12,354	12,130	-2%
NAV	195,135	191,340	-2%
Fully diluted number of shares	1,508,356	1,508,911
NAV per share (in €)	129.4	127.4	-2%

EPRA Net Disposal Value (NDV) as of Dec 31, 2022

EPRA Net Disposal Value (NDV) - in K€	31/12/2021	31/12/2022	Evolution in %
IFRS Equity attributable to shareholders	146,082	144,437	-1%
Including / Excluding :
Hybrid instruments	-
Diluted NAV	146,082	144,437	-1%
Including :
Revaluation of investment properties (if IAS 40 cost option is used)	-	-
Revaluation of investment property under construction (IPUC) (if IAS 40 cost option is used)	-	-
Revaluation of other non-current investments (PAREF GESTION[29])	37,105	38,476	4%
Revaluation of tenant leases held as finance leases	-	-
Revaluation of trading properties	-	-
Diluted NAV at Fair Value	183,187	182,913	0%
Excluding :
Differed tax in relation to fair value gains of IP	n.a.	n.a.
Fair value of financial instruments	n.a.	n.a.
Goodwill as a result of deferred tax	-	-
Goodwill as per the IFRS balance sheet	-	-
Intangibles as per the IFRS balance sheet	n.a	n.a
Including :
Fair value of debt	194	-1,328	n.a.
Revaluation of intangible to fair value	n.a.	n.a.
Real estate transfer tax	n.a.	n.a.
NAV	183,381	181,584	-1%
Fully diluted number of shares	1,508,356	1,508,911
NAV per share (in €)	121.6	120.3	-1%

Other EPRA indicators

• EPRA Vacancy rate

In K€	Dec 31,2021	Dec 31,2022	Evolution in bps
Estimated rental value of vacant space[30]	727	95
Estimated rental value of the whole portfolio	9,819	10,474
EPRA Vacancy Rate	7.4%	0.91%	-6.49 bps

• EPRA Net Initial Yield (NIY) and ‘topped-up' NIY

In %	Dec 31,2021	Dec 31,2022	Evolution in bps
PAREF Net yield	6.84%	5.52%	-1.32 bps
Impact of estimated duties and costs	-0.46%	-0.36%	+0.10 bps
Impact of changes in scope	-0.12%	-0.10%	+0.02 bps
EPRA Net initial yield[31]	6.26%	5.07%	-1.19 bps
Excluding lease incentives	0.43%	1.59%	+1.16 bps
EPRA “Topped-Up” Net initial yield [32]	6.69%	6.66%	-0.03 bps

• Capital expenditure

In K€	Dec 31, 2021	Dec 31, 2022
Acquisition	-	-
Development[33]	6,658	13,445
Portfolio on a like-for-like basis[34]	697	625
Other[35]	851	3,800
Total	8,206	17,871

• EPRA cost ratios

The ratio below is computed based on PAREF Group owned assets perimeter (including companies consolidated under the equity method).

In K€	Dec 31, 2021	Dec 31, 2022	Evolution in %
Include :
(i) General expenses	- 1,811	-1,793	-1%
(ii) Costs related to properties	-	-
(iii) Net service charge costs/fees	- 3,405	-2,752	-19%
(iv) Management fees less actual/estimated profit element (v) Other operating income/recharges intended to cover overhead expenses	-	-
(vi) Share of general expenses of companies consolidated under equity method	-412	-352	-14%
Exclude :
(vii) Depreciation and amortization	-	-
(viii) Ground rent costs	1,447	1,641	13%
(ix) Service charge costs recovered through rents but not separately invoiced	1,193	1,272	7%
EPRA Costs (including direct vacancy costs) (A)	- 2,989	-1,985	-34 %
(x) Less: Direct vacancy costs (unrecoverable rent costs)	782	196	-75%
EPRA Costs (excluding direct vacancy costs) (B)	-2,206	-1,789	-19 %
(xi) Gross Rental Income less ground rent costs	9,553	8,002	-16%
(xii) Less: service charge costs included in Gross Rental Income	-1,582	-1,272	-20%
(xiii) Add: share of Gross Rental Income less ground rent costs of companies consolidated under equity method	1,957	397	-80%
Gross Rental Income (C)	9,928	7,126	-28%
EPRA Cost Ratio (including direct vacancy costs) (A/C)	30.1%	27.9%	-2.20 bps
EPRA Cost Ratio (excluding direct vacancy costs) (B/C)	22.2%	25.1%	+2.90 bps

 

[1] Loan-to-value (LTV) : consolidated withdrawn net debt divided by the consolidated asset value excluding transfer taxes

[2] Excluding the le Gaïa asset sold end of March 2022 and the Léon Frot asset under restructuring

[3] Excluding the parking spaces in Franklin Tower

[4] Excluding the Léon Frot asset under restructuring

[5] Excluding the asset Léon Frot under restructuring

[6] 50% ownership through the company Wep Watford

[7] Including interests in companies consolidated under the equity method (27.24% in Vivapierre OPPCI) and excluding the value of PAREF Gestion shares.

[8] Excluding shares in SCPI/OPPCI. In 2021, 50% of WEP Watford (company which holds the asset Gaïa located in Nanterre) was included but it is excluded in 2022 following the disposal realized in Q1 2022 

[9] Following the anticipated dissolution voted by Extraordinary General Meeting, Cifocoma and Cifocoma 2 sold 107 assets in 2022 at higher price compared to the last independent valuations dated December 31^st 2020

[10] Distribution rate: it is the division of the gross dividend, before withholding tax and other taxes paid by the und on behalf of the associate, paid in respect of year n (including exceptional interim dividends and the share of distributed capital gains) by the subscription price on 1^st January of year N

[11] The indicator « Total performance » is not a regulated indicator according to ASPIM. It refers to the sum of annual dividend distribution rate and the evolution of the subscription price of a SCPI

[12] Concerning Novapierre Résidentiel, the distribution rate is 2.28% corresponding to the payment of realized capital gains from disposals

[13] Open-ended funds

[14] Close-ended funds

[15] Including participations in the companies consolidated in equity method OPPCI Vivapierre at 27.24% and Wep Watford (the company holding the asset Le Gaïa in Nanterre, La Défense) at 50% until December 31^st 2021, of which the asset was sold in Q1 2022

[16] Foncière Sélection Régions

[17] Including the asset The Medelan in Italy, the asset The Trade in Germany and office asset in Hungary

[18] The participation in OPPCI Vivapierre

[19] Including participations in the companies consolidated in equity method OPPCI Vivapierre at 27.24% and Wep Watford (the company holding the Le Gaïa asset in Nanterre, La Défense) at 50% until Dec 31, 2021, of which the asset was sold in Q1 2022

[20] LTV (Loan to Value) : consolidated withdrawn net debt divided by the consolidated asset value excluding transfer taxes

[21] ICR (Interest Coverage Ratio): EBITDA divided by consolidated financial expenses excluding penalties on debt early repayment.

[22] DSF : secured financial debt divided by the consolidated asset value (including the value of PAREF Gestion's share).

[23] Including the value of PAREF Gestion as at Dec 31^st 2022

[24] The valuation of PAREF Gestion was made by a qualified external expert Dec 31, 2022

[25] UNPRI : United Nations Principles for Responsible Investment

[26] French ISR: French label in Socially Responsible Investment

[27] SFDR : Sustainable Finance Disclosure Regulation - Article 8 : related to the products and investments which realize a combination between the environmental/societal characteristics and other qualities

[28] The valuation of PAREF Gestion was performed by a qualified external expert Dec 31, 2022

[29] The valuation of PAREF Gestion was performed by a qualified external expert Dec 31, 2022

[30] Excluding the participation in OPPCI Vivapierre and including the participation in asset Le Gaïa until Dec 31, 2021, which was sold in the first quarter in 2022. Excluding the Léon-Frot asset under restructuring

[31] The EPRA Net Initial Yield rate is defined as the annualized rental income, net of property operation expenses, after deducting rent adjustments, divided by the value of the portfolio, including duties

[32] The EPRA ‘topped-up' Net Initial Yield rate is defined as the annualized rental income, net of property operating expenses, excluding lease incentives, divided by the value of the portfolio, including taxes.

[33] Including the investment related to the project « The Go » located in Levallois-Perret and modernization project of Léon Frot asset

[34] Mainly including the investment related to Croissy Beaubourg asset, Aubergenville asset and 6 floors in Franklin Tower

[35] Including eviction indemnities, rent adjustments and capitalized financial costs relating to "The Go" project as well as the eviction indemnities and financial compensation of development project for the restructuring project of Leon Frot asset

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