Covivio has just unveiled its results for the first half of 2024, revealing significant growth for the group thanks to major strategic advances.
The first half of the year was particularly dynamic for the Group, which signed a memorandum of understanding with AccorInvest concerning the reorganisation of the ownership of jointly-owned hotel properties. Under the agreement, Covivio Hotels will acquire 24 businesses in exchange for transferring to AccorInvest the properties of 10 other hotels, which will then be owned by AccorInvest.
This transaction will enable Covivio to further strengthen its position in the hotel segment. The Group is focusing on this strategy by acquiring the equivalent of 500 million euros‘ worth of hotels in exchange for Covivio shares, thereby boosting shareholders’ equity by 280 million euros and increasing its exposure to hotels to 20% of its assets.
Covivio has also entered into a strategic partnership in German residential property with CDC Investissement Immbilier through the acquisition of a 49% stake in a Berlin portfolio worth €274 million.
At the same time as strengthening its hotel business, the Group has seen the success of its premium office offering. A total of 74,100 m² of new lettings and renewals were signed in the first six months of the year. As a result, the occupancy rate has risen sharply, by +3 points since the first quarter of 2023 and +0.6 points over the first half, to 95.1%.
In terms of rates, office properties benefited from a sustained +8.8% rise in rents, while hotel revenues grew by +5.2%. Covivio thus posted consolidated revenues of €500 million for the first half of the year, up 1.8% on a reported basis and up 6.5% on a like-for-like basis.
Recurring net profit came to 231 million euros, an increase of +3%. Growth in the scope of consolidation was +2%, with values beginning to stabilise (-1.3%) thanks to a slight increase in hotels and stability in offices (in Paris and Milan) and German residential property.
The Group recorded 311 million euros in new sales agreements over the period, at a 3% premium to appraised values. The success of the stock dividend enabled Covivio to strengthen its equity by 256 million euros. Furthermore, the increase in liquidity to €2.5 million means that debt maturities up to the end of 2026 can be covered.
The first half of the year also saw further progress on the CSR front, with 96% of the portfolio certified, including 69% of offices certified HQE/BREEAM Very Good or higher. The proportion of debt linked to ESG objectives has also risen, from 57% to 61% by the end of 2023.
Overall, the first half of the year was more than positive, prompting Covivio to raise its outlook for the whole of 2024, with a target for recurring net income of €460 million compared with an initial target of €440 million.
The first half of 2024 marks a turning point for Covivio. While strengthening its financial structure, the Group has demonstrated its ability to seize opportunities, with the strengthening of its exposure to hotels, the signing of a memorandum of understanding with AccorInvest and a new partnership in German residential property. At the same time, the successful roll-out of the premium office offering has led to a sharp rebound in occupancy rates. This strong momentum has enabled Covivio to raise its recurring net profit guidance for 2024.
Christophe Kullmann, Chief Executive Officer, Covivio
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