French REIT Icade reported a tripling of 2017 net attributable profit to €170.3m, and will propose a rise in its dividend to €4.30 per share. Net current cash-flow rose by 8.3% to €4.77, and it forecast an increase in this measure of another 5% in the current year.
Active in commercial property investment, health care and development projects - and still controlled by French public sector financial institution Caisse des Depots and banking group Credit Agricole - Icade said portfolio value rose last year by 11%yy to €10.8bn. EPRA earnings from property investment rose by 7.5% to €319.1m, including €223.2m for commercial (8.5%) and €96.0m for healthcare segment (5.2%). Net current cash-flow of its development arm Icade Promotion surged by 36.5% to €30.4m, adding into group net current cash-flow, up 8.5% to €353.2m.
This growth, plus property development revenues, boosted EPRA triple net asset value to €6.3bn, up 7.8% from 2016, Icade said in a release. This translated into EPRA NAV per share of €84.8 at year end, up nearly 8% from 2016. As of 2017 year-end, group share of the whole property portfolio amounted to €10.8bn, up 11.1% from end-2016: 3.0% on a like-for-like basis. Net group attributable profit jumped to €170.3m from €58.0m in 2016. Icade said it should be noted that income arising from the future refund of the 3% tax on dividends was recognised in 2017.
As of last December, the financial occupancy rate of commercial property investment stood at 92.5%, up 1.4pp - including 95.3% for offices and 89.3% for business parks - and Icade said it already achieved its target occupancy rates in 2017. In addition the year was marked by its takeover of smaller listed firm ANF Immobilier from Paris private equity group Eurazeo. This represented an addition of 169,773 sqm of leased space. It also renewed 57 leases for a combined floor area of 152,175 sqm and an annualised headline rental income of €31m with a weighted average unexpired lease term of 6.6 years. New leases were signed for 211,600 sqm and an annualised headline rental income of €56.9m
In 2017 Icade cut its average cost of debt to 1.59% from 2.18% in 2016, while the average maturity remained stable on at 6.5 years. However the LTV ratio stood at 41.0% as of December, up from 37.9% a year earlier, due to an accelerated acquisition plan.
BIE COMMENT: Icade is currently owned 39% by CdC while the giant banking group Credit Agricole holds another 18.5% - together easily controlling the company. However, this is, if anything, a 'blast from the past' and is looking ever more out of step with the present. Therefore the major question for this year is whether the government of President Macron will cut its stake in Icade. This is a move that may well fit with his aims of raising revenues for other budgetary purposes, and generally cutting state intervention in the economy.