PAREF : Quaterly business report : 1st quarter 2013

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Paris, 14 May 2013, 8am

First Quarter 2012 Revenue: ¤ 5.7 million

§ Stability of rent and cost recovered on a constant group structure basis
§ Increase in management fees on property assets after assuming management of SCPI
Capiforce Pierre, but decline in SCPI subscription fees.

SIIC PAREF, a property company specialised in property investment and management on behalf of third parties, announces quarterly revenue of ¤ 5.7 million, compared to ¤ 6.7 million in the first quarter of 2012.

Revenue (¤ millions) Q1 2013 Q1 2012 % change FY 2012
Rent and cost recovered 4.3 4.8 (10.8%) 18.1
residential 0.5 0.8 (40.3%) 2.5
commercial 3.9 4.1 (5.0%) 15.7
Management fees 1.4 1.8 (25.3%) 6.1
Consolidated IFRS revenue 5.7 6.7 (14.8%) 24.2

Decline in rent revenue due to selective disposals carried out in 2012
 

Rent and costs recovered during the first quarter of 2013 were ¤ 4.3 million, compared to ¤ 4.8 million in the first quarter of 2012, a decline of ¤ 0.5 million, of which ¤ 0.3 million was due to certain temporary usufructs maturing in 2012 (residential property) and ¤ 0.2 million to rent from the Berger property that was sold at the end of the first quarter of 2012.

On a constant group structure basis (excluding the 2012 sale and the end of usufructs), rental income was stable.

The occupancy rate was 88% at the end of March, compared to 91% at the end of December. The change in this rate was primarily due to the official receivership of the Vault-Le Pénil building's tenant and the departure of the Saint Maurice tenant, which to date, has not been replaced.

Decrease in SCPI subscription fees
 

During the first quarter of 2013, management fees totalled ¤ 1.38 million compared to ¤ 1.85 million for the same period of 2012, although it should be noted that on a comparable consolidation method, restated 2012 fees would have been ¤ 2.0 million. This decline was attributable to subscription fees of ¤ 0.64 million, compared to ¤ 1.16 million in the first quarter of 2012, or ¤ 1.3 million after restatement. SCPI fundraising had recorded exceptional subscriptions from institutional investors in first quarter of 2012.

Management fees on managed assets represented ¤ 0.74 million, compared to ¤ 0.69 million in the first quarter of 2012, an increase of 8%. During the quarter, the favourable effect of the increase in managed assets and of assuming the management of SCPI Capiforce Pierre (which represents full-year management fees of ¤ 0.3 million) was nevertheless offset by various exceptional fees (fees on asset disposals) of ¤ 0.1 million collected in the first quarter of 2012 for Pierre 48.

More detailed information on Group operations and financial position during the period is provided in the quarterly financial report included as an appendix to this press release.
 

***

Shareholders' agenda

Annual General Meeting: 15 May 2013

Dividend payment: 23 May 2013

First half-year revenue: 30 July 2013

About PAREF
PAREF Group operates in two major complementary areas:

§ Commercial and residential investments: Paref owns various commercial buildings in and out of the Paris region. The Group also owns the temporary usufruct of residential property in Paris.

§ Management on behalf of third parties: PAREF Gestion, an AMF-certified subsidiary of PAREF manages 4 SCPIs and 2 OPCIs.

At 31 March 2013, PAREF Group owned ¤ 163 million in property assets, and managed assets worth ¤ 645 million on behalf of third parties

PAREF shares have been listed on Eurolist Compartment C of the Euronext Paris Stock Exchange since December 2005
ISIN code: FR0010263202 - Ticker: PAR

   
 
Alain PERROLLAZ
Chairman of the Management Board

Olivier DELISLE
Member of the Management Board

Tel.: +33 1 40 29 86 86
 
Agnès VILLERET
Analyst/Investor Relations

Lucie LARGUIER
Financial Press Relations

Tel.: +33 1 53 32 78 95 / 84 75

agnes.villeret@citigate.fr / lucie.larguier@citigate.fr

For further information, please visit www.paref.com


Quarterly business report ([1])

First quarter 2013

14 May 2013

SIIC PAREF, a property company specialised in property investment and management on behalf of third parties, announces quarterly revenue of ¤ 5.7 million, compared to ¤ 6.7 million in the first quarter of 2012.

1 - Property assets and Group debt
 

1.1 Property portfolio
 

The following changes have affected the consolidated property portfolio since 1 January:

· On 7 March 2013, SCPI Interpierre signed a ¤ 3.5 million undertaking to purchase relating to a business facility built in 2006 and located in the South of the Paris region. This building is subject to a 9-year firm lease maturing in 8 years. The title deed should be signed during June at the latest.

· The planning permission application filed by the beneficiary of the undertaking to sell for the former Gentilly private hospital was appealed on 22 January 2013. Negotiations are ongoing. The disposal process should therefore be postponed until the 3rd quarter of 2013.

· The main tenant of La Courneuve had a call option on the whole site, valued at ¤ 14 million and exercisable between 1 October 2012 and 31 March 2013. The option provides that the price is partly indexed on the ICC (French Construction Cost Index) and that it is to be increased by the cost of major repair work incurred since the lease was signed. The tenant submitted an offer dated 19 March. The undertaking to sell should be signed shortly.

Excluding the continued construction of the "Le Gaia" building located in Nanterre (¤ 2.5 million during the first quarter of 2013 in relation to Paref's share), no acquisition or disposal was carried out during the period on the Group's property portfolio, whose value totalled ¤ 163 million at 31 December 2012, based on appraised values at 31 December 2012, increased by capital expenditure on Le Gaïa, less the amortisation of temporary usufructs.

1.2 Financial debt
 

Total Group financial debt was ¤ 81.6 million at 31 March 2013, compared to ¤ 83.6 million at 31 December 2012. The ¤ 2.0 million change was due to debt amortisation.

Including escrow accounts of ¤ 3.1 million and cash and cash equivalents of ¤ 8.4 million, the consolidated net financial debt was ¤ 70.1 million.

The LTV ratio (net financial debt to property portfolio value), including the share of the Le Gaïa building owned by Wep Watford, an equity-accounted company, was 40%, compared to 42% at the end of December.

2. - First quarter 2013 revenue: ¤5.7 million (down 15%)

Revenue (¤ millions) Q1 2013 Q1 2012 % change FY 2012
Rent and cost recovered 4.3 4.8 (10.8%) 18.1
residential 0.5 0.8 (40.3%) 2.5
commercial 3.9 4.1 (5.0%) 15.7
Management fees 1.4 1.8 (25.3%) 6.1
Consolidated IFRS revenue 5.7 6.7 (14.8%) 24.2

2.1 - Decline in rent revenue due to selective disposals carried out in 2012
 

Rent and costs recovered during the first quarter of 2013 were ¤ 4.3 million, compared to ¤ 4.8 million in the first quarter of 2012, a decline of ¤ 0.5 million, of which ¤ 0.3 million was due to certain temporary usufructs maturing in 2012 (residential property) and ¤ 0.2 million to rent from the Berger property that was sold at the end of the first quarter of 2012.

On a constant group structure basis (excluding 2012 sale and end of usufructs), rental income was stable.

The occupancy rate was 88% at the end of March, compared to 91% at the end of December.

The change in this rate was primarily due to the previously announced departure of the Saint Maurice tenant and to the termination of business activities of the Vaux-Le Pénil building's tenant. The Evry commercial Court, in a ruling dated 14 January 2013, wound up the Atryos company, which rented the Vaux le Pénil building. A company has already approached Paref to lease the premises. Provisions have been established for all Atryos receivables.

Furthermore, the tenant of La Houssaye Tem IdF, which had signed a temporary lease in 2011, followed by a firm 6-year lease in September 2012, has been placed in court-ordered administration.

2.2 - Decrease in SCPI subscription fees
 

During the first quarter of 2013, management fees, including management fees on managed assets and subscription fees) totalled ¤ 1.38 million compared to ¤ 1.85 million for the same period of 2012, although it should be noted that on a comparable consolidation method (1), restated first quarter 2012 fees would have been ¤ 2.0 million.

Out of this total, SCPI subscription fees were ¤ 0.64 million compared to ¤ 1.16 million in the first quarter of 2012 (or ¤ 1.3 million after restatement). This was related to the decline in subscriptions compared to a favourable first quarter 2012 (exceptional subscriptions originating from institutional investors).

Management fees on managed assets represented ¤ 0.74 million, compared to ¤ 0.69 million in the first quarter of 2012, an increase of 8%. During the quarter, the favourable effect of the increase in managed assets and of assuming the management of SCPI Capiforce Pierre (which represents full-year management fees of ¤ 0.3 million) was nevertheless offset by various exceptional fees (fees on asset disposals) of ¤ 0.1 million collected in the first quarter of 2012 in respect of Pierre 48 and the already announced transfer out of the OPCI Naos (which represented full-year management fees of ¤ 0.1 million).

Since 1 January 2013, Paref Gestion is SCPI Capiforce Pierre's management company, with managed assets of ¤ 41.4 million.


(1) : Interpierre's subscription fees were previously eliminated on consolidation.

The assets managed or owned by the Group at 31 March 2013 may be analysed as follows:

ASSETS MANAGED BY PAREF GROUP
   
Capital under management 31-March-13 31-Dec.-12
m2  ¤ thousands m2  ¤ thousands
Paref Group (1) 230,373 163,427 230,373 161,296
Capiforce 29,913 41,373    
Interpierre 47,779 24,031 47,779 23,743
Novapierre 1 37,796 147,928 35,859 145,874
Pierre 48 52,660 287,929 52,660 281,728
Total SCPIs (2) 168,148 501,261 136,298 451,345
Vivapierre (3) 53,833 118,500 53,833 118,500
Total OPCIs 53,833 118,500 53,833 118,500
Tiers 11,069 25,359 11,069 22,904
Usufructs (4) & Watford (5) counted twice (14,391) (11,923) (14,391) (9,468)
Interpierre (5) (47,779) (24,031) (47,779) (23,743)
Grand total 401,253 772,592 369,403 720,834
Of which management on behalf of third parties: 233,050 645,120 201,200 592,749
(1) appraised value of assets at 31 December 2012 restated for Le Gaïa capital expenditure and amortisation of temporary usufructs
(2) capitalisation at 31 March based on share issue prices at that date
(3) appraised value of assets at 31 March 2013
(4) floor area counted both by Pierre 48 (bare owner) and Paref or third party under management (usufruct).
(5) value counted both by Paref Group (consolidated data) and Interpierre or Watford

3 - Outlook
 

The PAREF Group, bolstered by the improvement of its financial position and debt reduction achieved over the last two years, now focuses on 3 main objectives:

· Resumption of investments, particularly due to funds raised during the latest capital increase of ¤ 7.4 million and liquidities freed up by the selective disposal policy, which is set to continue.

· Asset portfolio trade up, seeking to invest in high environmental quality buildings, as is the case with the "Le Gaïa" transaction in Nanterre.

· Development of the management on behalf of third parties business, particularly Paref Gestion's range of SCPIs. Since 1 January, Capiforce Pierre (mixed SCPI) has been added to the existing range, which includes Novapierre (retail stores), Pierre 48 (residential property in Paris and the Paris region) and Interpierre (offices and business premises).

The Group will also seek opportunities to create OPCI with simplified operating rules, aimed at institutional investors, both as part of its indirect investment policy or simply as a provider within the framework of partnerships.


[1] Unaudited data

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