COMMUNIQUÉ RÉGLEMENTÉ

par COVIVIO (EPA:COV)

Covivio - 2024 Half-year financial report

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1.          2024 FIRST-HALF FINANCIAL REPORT ......................................................................................................................................................... 3

1.1.                Business analysis .................................................................................................................................................................................... 3

1.2.                Business analysis by segment ......................................................................................................................................................... 12

1.3.                Financial information and comments ........................................................................................................................................... 27

1.4.                Financial resources ............................................................................................................................................................................. 34

1.5.                EPRA Reporting .................................................................................................................................................................................... 38

1.6.                Financial indicators of main activities ......................................................................................................................................... 47

2.          RISKS AND UNCERTAINTIES .......................................................................................................................................................................... 49

2.1.                Risks relating to the environment in which Covivio operates ............................................................................................. 49

2.2.                Financial risks ........................................................................................................................................................................................ 50

3.          CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2024 ............................................................................... 52

3.1.               

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Condensed consolidated financial statements at 30 June 2024 .................................................................................... 52

3.2.                Notes to the condensed consolidated financial statements ............................................................................................ 58

4.          STATUTORY AUDITORS’ REPORT ON THE HALF-YEARLY FINANCIAL INFORMATION .............................................................. 116

5.          CERTIFICATION OF THE PREPARER ............................................................................................................................................................ 118

6.          GLOSSARY ......................................................................................................................................................................................................... 120

      

imageimageimage2024 first-half financial report

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1. 2024 FIRST-HALF FINANCIAL REPORT

       1.1.        Business analysis

       1.1.1.          Revenues: €500 million and €327 million Group share in H1 2024

(€ million)

100%

Group share

H1 2023

H1 2024

Change (%)

H1 2023

H1 2024

Change (%)

Change (%)

LfL 1

% of revenue

Offices 

193.6

189.2

-2.2%

162.6

155.2

-4.5%

             +8.8%                    47%

Paris / Levallois / Neuilly 

33.2

37.4

+12.5%

31.3

35.1

+12.2%

+17.5%

11%

Greater Paris (excl. Paris) 

50.8

43.7

-13.9%

41.1

32.1

-21.9%

+10.7%

10%

Milan 

34.0

34.2

+0.5%

34.0

34.2

+0.5%

+4.6%

10%

Telecom portfolio  

28.7

29.6

+3.3%

14.6

15.1

+3.3%

+5.8%

5%

Top 7 German cities 

27.2

28.5

+4.9%

24.2

25.4

+5.0%

+2.8%

8%

French Major Regional Cities 

14.5

11.3

-22.3%

12.1

8.8

-27.6%

+6.9%

3%

Other cities (France & Italy) 

5.2

4.5

-13.3%

5.2

4.5

-13.3%

+7.8%

1%

Germany Residential 

141.8

146.6

+3.3%

91.8

94.8

+3.3%

             +3.9%                    29%

Berlin 

73.3

75.4

+2.8%

48.1

49.5

+2.8%

+4.5%

15%

Dresden & Leipzig 

11.6

11.9

+2.7%

7.5

7.7

+2.7%

+2.7%

2%

Hamburg 

9.1

9.6

+5.4%

6.0

6.3

+5.4%

+5.4%

2%

North Rhine-Westphalia 

47.9

49.8

+3.8%

30.2

31.4

+3.9%

+3.2%

10%

Hotels 

157.4

162.3

+3.1%

65.9

75.9

+15.1%

             +5.2%                    23%

Lease Properties  

125.8

131.8

+4.8%

52.5

60.9

+15.9%

+5.8%

19%

France 

44.7

45.4

+1.6%

17.0

19.0

+12.0%

+0.6%

6%

Germany 

17.0

17.6

+3.9%

7.3

8.3

+14.7%

+5.5%

3%

UK 

18.2

18.4

+0.6%

8.0

8.8

+10.6%

+0.5%

3%

Spain 

18.3

21.1

+15.3%

8.0

10.4

+28.9%

+20.5%

3%

Belgium 

7.5

7.7

+3.2%

3.3

3.8

+14.5%

+4.5%

1%

Others 

20.1

21.6

+7.1%

8.8

10.4

+18.1%

+8.3%

3%

Operating Properties2

31.6

30.5

-3.4%

13.5

15.1

+11.9%

+2.9%

5%

Total strategic activities 

492.8

498.1

+1.1%

320.3

326.0

+1.8%

+6.6%

100%

Non-strategic 

1.9

1.7

-9.5%

0.8

0.8

-0.4%

-9.3%

0%

Total Revenues 

494.7

499.8

+1.0%

321.2

326.8

+1.8%

             +6.5%                  100%

 (1) Like-for-like change || (2) Operating Properties (EBITDA)

Group share revenues, up +1.8% at current scope, stand at €326.8 million vs. €321.2 million in H1 2023, due to:


•       The reinforcement of the stake in Covivio Hotels

(+€8 million)

•       The +6.5% increase on like-for-like basis, split between

•       Offices: +8.8% like-for-like, driven by indexation and letting activity;

•       Hotels: a sustained like-for-like revenue increased by +5.2%, due to the continued rebound in variable revenues (EBITDA + variable leases) of +6.1% and a +4.4% like-forlike growth for fixed lease properties;

•       German Residential: a continued robust growth of +3.9% like-for-like.

•       Reduction in office exposure through disposals (-

€14 million);

•       Deliveries of new assets (+€2 million), in Greater Paris and Berlin; 

•       Vacated assets for redevelopment (-€5 million), mostly in Paris Western Crescent and first ring, for conversion into residential or hotel.

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       1.1.2.         Lease expiries and occupancy rates

       1.1.2.1.                   Lease expiries: average firm residual duration of 6.8 years

       1.1.2.1.1.              Average lease duration by activity

                                                                                                       By lease end date (1st break)                                                 By lease end date

Group share, in Years

2023

H1 2024

2023

H1 2024

Offices 

5.4

5.0

5.9

5.6

Hotels 

12.2

11.8

13.9

13.5

Non-strategic 

7.4

6.9

7.4

6.9

Total 

7.0

6.8

7.8

7.7

       1.1.2.1.2.            Lease expiries schedule

(In € million, Group share)

By lease end date (1st break)

% of total

By lease        (end date)

% of total

2024

25

3%

16

2%

2025

66

9%

44

6%

2026

29

4%

14

2%

2027

43

6%

25

3%

2028

41

6%

43

6%

2029

36

5%

39

5%

2030

58

8%

55

7%

2031

24

3%

41

6%

2032

32

4%

54

7%

2033

33

4%

45

6%

Beyond

121

16%

133

18%

Offices and Hotels leases

508

69%

508

69%

German Residential

190

26%

190

26%

Hotel operating properties

41

6%

41

6%

   TOTAL                                                                                                             739

100%

739

100%

In 2024, lease expiries with first break options represent €25 million, of which €18.0 million are already managed (€3.6 million of hotels, €11.7 million of offices for which tenant has no intention to vacate the property and €2.7 million of offices to be converted into hotels). Only €7.0 million (1.0% of Annualized revenue) are still to be managed in offices, mostly on core assets for which tenant decision is not known yet.

       1.1.2.2.                 Occupancy rate : 97.1% secured, +0.4pt vs. 2023

                                                                                                                Occupancy rate (%)

Group share

2023

H1 2024

Offices

94.5%

95.1%

German Residential

99.1%

99.0%

Hotels

100.0%

100.0%

Total strategic activities

96.7%

97.1%

Non-strategic

100.0%

100.0%

TOTAL

96.7%

97.1%

The occupancy rate continued to increase, by +40bps over six months, to 97.1% for the whole portfolio. This is linked with the rebound in offices by +60bps to 95.1%, thanks to several lettings in Greater Paris.

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       1.1.3.         Breakdown of annualized revenues

                                           By major tenants                                                                                                     By activity

(€ million, Group share)

Annualised  revenues 2024

%

AccorInvest

41

6%

NH

29

4%

Telecom portfolio

29

4%

Orange

26

3%

B&B

23

3%

IHG

23

3%

Suez

19

3%

Dassault Systèmes

18

2%

Tecnimont

16

2%

Thalès

13

2%

Edvance (EDF)

9

1%

LVMH

9

1%

Fastweb

6

1%

NTT Data Italia

5

1%

Chloé

5

1%

EDF / Enedis

5

1%

Crédit Agricole

5

1%

Other hotels lease properties

13

2%

Other office tenants <€5M

255

35%

German Residential

190

26%

Total

739

100%

imageOffices 7%

       1.1.4.        Stable cost to revenue ratio

(€ million, Group share)

  

Offices in Europe

German

Residential

Hotels in Europe

(incl. retail)

OtherS (mainly France resi.)

Total([1])

H1 2024

H1 2023

H1 2024

Rental Income

152.6

97.5

61.7

307.7

311.8

Unrec. property oper. costs

-16.4

-2.2

-1.0

- 0.1

-17.4

-19.6

Expenses on properties

-3.0

-6.6

-0.2

-0.1

-10.6

-10.0

Net losses on unrec. receivable

0.3

-1.0

0.4

-0.7

-0.3

Net rental income

133.5

87.6

60.9

-0.2

279.0

281.9

COST TO REVENUE RATIO

10.8%

10.1%

0.7%

n.a.

8.6%

8.6%

       1.1.5.        Disposals: €311m of new agreements in H1 2024 

(€ million)

Disposals

<2024 closed

Agreements

<2024 to close

New  disposals 2024

New  agreements  2024

Total

Margin vs

2023 value

Yield

Total

Realised Disposals

  

  

1

2

3

= 2 + 3

  

  

= 1 + 2

Offices

Conversion

Residential

& to

100 % 

115

107

37

146

183

-1.1%

6.8%

152

GS 1

109

107

28

114

142

-1.6%

6.8%

137

Germany

Residential

100 % 

10

5

166

23

189

5.9%

3.6%

176

GS 

7

4

114

15

129

5.6%

3.6%

121

Hotels

100 % 

-

84

21

63

83

10.4%

5.9%

21

GS 

-

44

11

30

40

10.7%

5.9%

11

TOTAL GROUP

100 % 

125

196

223

232

455

3.7%

5.1%

349

GS

116

154

152

159

311

2.8%

5.0%

268

1 GS : Group share


New disposals and agreements totalled €311 million Group share (€455 million at 100%) at the end of the semester. 

These disposals agreements were made of offices for the largest part, for a total of €142 million Group share, with an average margin of -1.6%. It dealt with 12 offices in France and 9 offices in Italy (mostly from the Telecom portfolio, in regions). 

In German residential, €129 million Group share (€189 million at 100%) of disposal agreements were achieved over H1, with an average premium of +5.6% vs. 2023 book values. Major achievements were the creation of a joint venture with CDC Investment on a portfolio in Berlin, in line with the values at the end of 2023, contributing €93m (Group share) to the disposal program, and, at the same time, the Group continued with its privatisation program, selling €25m Group share (€38m at 100%), at an average premium of 40%. 

       1.1.6.         Investments: €214m Group share realized in H1 2024

€214 million Group share (€263 million at 100%) of capex were realized during the first 6 months of the year to improve the quality of our portfolio and create value:  

Capex in the development pipeline totalled €110 million Group share (€125 million at 100%),

€71 million Group share (€100 million at 100%) relate to works on the operating portfolio (including 2/3 of valorisation work), of which €35 million in German

residential (54% for modernization capex, generating additional revenue),

€33 million capex on office to residential conversion projects (built to sell).

       1.1.7.        Development projects

       1.1.7.1.                    Committed office pipeline: €93m of revenues in Group share, 85% in city centers

In hotels, disposal agreements totalled €40m Group share (€83m at 100%), at an average premium of +10.7% to appraised values. These mainly concerned nonstrategic hotels in Germany and Spain, as well as joint disposals (opco and propco) in France with AccorInvest.


Covivio has an office pipeline of 10 buildings which will generate €93m of revenues in France, Germany, and Italy, the bulk of it (85%) in the city centers of Paris, Milan and Berlin, where demand for prime assets is high. Capex still to be spent on the committed development pipeline reach €584 million (€167 million per year by 2027 on average).

This pipeline is highly pre-let (55%, +2 pts compared to end-2023) and will participate to the continued improvement of the portfolio quality towards centrality & grade A buildings (100% of the projects certified “Excellent” or above).  

Expected deliveries before year-end 2024: 2 projects in Milan (The Sign D, Rozzano).

Deliveries from 2025 refer to 8 projects in Paris CBD (Grands Boulevards, Monceau), Paris 1st ring (turnkey development for Thalès), Milan (Corte Italia, Symbiosis G+H), Berlin (Loft), Düsseldorf (Icon) and Berlin (Alexanderplatz). 

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Committed projects

Location

Project type

Surface (m²)  1

Delivery year

Pre-leased

(%)

Total Budget 2

(€M, 100%)

Total Budget 2

(€M, GS)

Target Yield 3

Monceau 

Paris 

Regeneration 

11,200 m²

2025

0%

249

249

4.4%

Thalès 2 

Meudon 

Construction 

38,000 m²

2026

100%

213

213

7.9%

Grands Boulevards 

Paris 

Regeneration 

7,500 m²

2027

0%

153

153

4.5%

Total France committed pipeline 

  

  

56,700 m²

  

49%

615

615

5.6%

The Sign D 

Milan 

Construction 

13,200 m²

2024

92%

76

76

6.1%

Rozzano - Strada 8 

Milan 

Regeneration 

25,700 m²

2024

58%

44

44

7.9%

To be delivered in 2024 

  

  

38,900 m²

  

77%

120

120

6.7%

Corte Italia 

Milan 

Regeneration 

12,100 m²

2025

100%

125

125

5.9%

Symbiosis G+H 

Milan 

Construction 

38,000 m²

2025

100%

198

198

6.4%

To be delivered in 2025 and beyond 

  

50,100 m²

  

100%

323

323

6.2%

Total Italy committed pipeline 

  

  

89,000 m²

  

93%

443

443

6.3%

Loft (65% share) 

Berlin  

Regeneration 

7,600 m²

2025

0%

40

26

5.4%

Icon (94% share) 

Düsseldorf 

Regeneration 

55,700 m²

2025

60%

249

235

5.5%

Alexanderplatz (55% share) 

Berlin  

Construction 

60,000 m²

2027

0%

624

343

4.5%

Total Germany committed pipeline 

  

  

115,700 m²

  

26%

913

604

4.9%

Total committed pipeline 

  

  

261,400 m²

  

55%

1,970

1,661

5.6%

(1) Surface at 100%

(2) Including land and financial costs

(3) Yield on total rents over total budget

9


       1.1.7.2.               Build-to-sell pipeline

                                                                                                                                             Total                                           Total 

                                                                                                                                                   1                                                                                                      1                                                                            Pre-sold

Committed projects                                                                                                                          Units                                    Budget                                       Budget 

(%)

                                                                                                                                      (€m, 100%)                 (€m, Group share)

image

Berlin (1 project)                                                                                                                                     92                                                                                                                                                                

Bordeaux Lac 

203

Antony 

68

Saint-Germain-en-Laye

24                                                                                      

2024 Delivery

387                                              103                         93

74%

Berlin (2 projects)                                                                                                                                  117                                                                                                                                                               

Fontenay-sous-Bois

249

Bordeaux Lac 

102

Bobigny 

158

Zabarella

47

2025 & beyond Delivery

673

237

154

55%

TOTAL RESIDENTIAL BUILD-TO-SELL

1,060

340

247

62%

1 Including land and financial costs

At the end of June 2024, the German build-to-sell pipeline deals with 3 projects located in Berlin, where housing shortage is the highest in Germany, totalling 209 residential units and a total cost of €73 million Group share.

located mainly in the Greater Paris and Bordeaux, representing 804 residential units, a total cost of €152 million Group Share. 94% of the projects are already pre-sold. 

The total margin of the committed pipeline reaches 8%. The current French pipeline is composed of 6 projects

       1.1.7.3.              Managed pipeline

In the long-term, Covivio also owns more than 293,000 m² of landbanks that could welcome new development projects:

•       in Paris, Greater Paris and Major French Cities (180,000 m²) mainly for turnkey developments;

•       in Milan with Symbiosis (23,000 m²) and Porta Romana (76,000 m²);

•       and approximately 14,000 m² in Germany, mostly in Berlin.

10

       1.1.8.      Portfolio

Portfolio value: +2.0% at current scope, -1.3% like-for-like change

(€ million,  excluding duties)

Value 

2023 Group Share

Value  H1 2024

100% 

Value 

H1 2024 Group share

Change 

(%)

LfL 1

6 months change

Yield 2023

 Yield  H1 2024

% of strategic portfolio

Offices

7,847

9,308

7,749

-1.3%

-2.6%

5.5%

5.7%

50%

German residential 

4,672

7,161

4,542

-2.8%

-0.1%

4.1%

4.2%

30%

Hotels

2,535

6,432

3,061

+20.7%

+0.5%

5.9%

6.0%

20%

Non-strategic

26

49

27

+5.5%

-10.7%

n.a.

n.a.

n.a.

TOTAL

15,080

22,951

15,378

+2.0%

-1.3%

5.1%

5.3%

100%

1 LfL: Like-for-Like

The portfolio increased by +2% at current scope, to reach €15.4 billion Group share (€23.0 billion at 100%). This is mostly explained by the reinforcement in hotels, offsetting the impact of disposals in offices.

On a like-for-like basis, the portfolio value changed by -1.3% mostly due to: 

Overall in offices, asset values were down -2.6% on a like-for-like basis, with substantial disparities linked to centrality and geography. France and Italy (85% of office portfolio value) displayed almost stable values (of which +2% in Paris CBD), while Germany values (15% of office portfolio value) continued to adjust (-10% over H1);

Germany Residential values stabilized in H1 (-0.1%) on a like-for-like basis. A stronger performance was achieved in Berlin (57% of German residential

portfolio), at +2.3% like-for-like. Average value per m² for residential part of the portfolio is €2,435/m², of which €3,081/m² in Berlin. Assets are valued at their block value. 49% of the portfolio, worth €2.3 billion, is already divided into condominium, particularly in Berlin (68%; €1.9 billion), where the unit sale value is 50% above the block value.

In Hotels, portfolio values increased slightly (+0.5%), of which +0.6% for fixed leases and stable values for operating properties.

Geographical breakdown of the portfolio at end-June 2024

                               Others

imageItaly

          Germany

42%

       1.1.9.       List of main assets

The value of the ten main assets (excl. Dassault Systèmes Campus & Thalès Campus) represents 14% of the portfolio Group share, stable vs end 2023.

Top 10 Assets

Location

Tenants

Surface (m²)

Covivio share

Garibaldi Complex

Milan

Multi let

44,700

100%

CB21 Tower

La Défense

Multi let

68,100

75%

Jean Goujon

Paris

LVMH

8,600

100%

Mäslo

Levallois Perret

Multi let

20,800

100%

Zeughaus

Hamburg

Multi let

43,700

94%

Icon

Dusseldorf

Multi let, Devpmt.

55,700

94%

Art & Co

Paris

Multi let

13,500

100%

Percier

Paris

Multi let

8,600

100%

Monceau

Paris

Devpmt.

11,200

100%

Frankfurt Airport Center

Frankfurt

Multi let

48,100

90%

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        1.2.          Business analysis by segment

       1.2.1.        Offices : 50% of Covivio’s portfolio

Covivio has implemented an overall offices strategy based on centrality, hospitality, and sustainability. This strategy has been executed by increasing investments on best-in-class assets in central locations, improving the quality of the existing portfolio and exiting from non-core areas.

Today, quality has become a much more important driver of future growth for Covivio, which owns offices with high levels of centrality and accessibility, A-quality buildings, and top-level service offering. These offices buildings are located in France (27% of Covivio’s portfolio), Italy (16%), and Germany (7%) totalling €9.3 billion (€7.7 billion Group share) as of end-June 2024.

This offices strategy is bearing fruit, as illustrated by the increase in occupancy rate in 2024, by +60bps to 95.1%.  

Covivio's portfolio is split as follows:

•       Core assets in city centers (69% of Covivio’s office portfolio, +10pts vs. 2020): located in city centers of main European cities (Paris/Levallois/Neuilly, Milan, Berlin, Düsseldorf, Hamburg, and French major regional cities), with high occupancy (97.4%) and 4.8 years WALB.

•       Core assets in major business hubs (25%): includes assets in well-connected business hubs (Greater Paris, Periphery of German cities), with high occupancy (94%) and long WALB (5.6 years), mostly let to long-term partners such as Thalès and Dassault Systèmes. 

1.2.1.1.    European office market: confirmed polarization, slowdown in investments[2] 1.2.1.1.1.       French offices: stabilizing take-up and yields

•       Non-Core assets (6%): gathers secondary offices assets outside city centers for which the occupancy rate (83%) and the WALB (3.8 years) are lower, with a disposal or conversion into residential strategy. 


Take-up in Greater Paris office market reached 853,400 m² in H1 2024, down -5.1% year-on-year. At the same time, customer demand continues to polarize, as the preference for best places continues to increase: 

•       Paris inner city outperformed, with take-up up +12.2% year-on-year to 428,900m²

•       Paris inner city counted for 47% of the total take-up in Greater Paris (vs. 40% on average over the last 5 years).

The immediate offer increased by +5% over the last six months to 4.98 million m² and the vacancy rate now stands at 9.0%, up by +30bps year-to-date, but with strong disparities: below 3% in Paris CBD and close to 15% in the first ring and La Défense. 

Scarcity of best assets in city centers continues to impact positively prime rents, reaching all-time levels in

Paris at €1,070/m²/year (+7% yoy), and with transactions currently under marketing at

€1,200/m²/year. Incentives in Greater Paris increased slightly to 26.0% in H1 2024, up +50bps vs. end-2023, with maintained disparities across sub-markets, from 13.1% in Paris North-East to 42.8% in La Défense. 

Office investments in Greater Paris totaled €985 million over H1 2024, down –65% YoY. Prime yields remained stable over the first semester, at 4.25% in Paris CBD. Mood in the investment market seems improving over the last weeks, looking at the increased number of transactions under negotiations (of which > €500m at yields around 4%).


       1.2.1.1.2.                 Milan offices: dynamic letting market and better investment market

Milan office market recorded a total take-up of 185,000 6.7% and the periphery. m² in H1 2024, -9% year-on-year. Demand is still

The intense demand for high-quality spaces, combined

focused on buildings in prime locations, offering good with the scarcity of grade A assets, contributed to a

level of services, as demonstrated by the level of grade new increase of prime rents in Milan, at €750/m²/year

A/A+ assets, which count for 80% of the total take-up in

(+7% year-on-year), according to DILS. Milan.

With a total amount of €830 million invested in H1 2024,

The average vacancy rate in Milan was up by +10bps in the Italian office investment market rebounded strongly

Q1 2024, to +11.3%, with strong disparity between the compared to last year (€400 million). Prime yields

centre (where most of Covivio’s portfolio is located), at stabilized, at 4.25% according to BNP Real Estate.

image 

       1.2.1.1.3.                 Germany offices: +4.5% in take-up, prime rents up +5% yoy on average

Take-up in Germany top six markets in H1 2024 7.8%.  increased by +4.5% year-on-year to 1,164,000 m²,

Prime rents grew on average by +5.1% vs. H1 2023, with

boosted by Dusseldorf (+33%), Munich (+17.5%) and Berlin varying performances: strong growth in Düsseldorf and

(+11%). 

Munich (+11%), +2% in Frankfurt and stable in Berlin.

Vacancy rates reached 5.9% on average, up +30 bps

Investment volumes in German Offices declined by -22%

over six months. Hamburg (4.2%) and Berlin (5.2%)

YoY in H1 2024 to €1.6 billion. Prime yields stabilized since

recorded among the lowest vacancy rates, followed by end-2023, at 4.4% on average for the top 6 cities in

Munich at 5.8%, while in Frankfurt and Dusseldorf

Germany (of which 4.25% in Berlin and Hamburg, 4.5% in

vacancy levels remained higher, respectively at 10% and

Frankfurt and Dusseldorf).

       1.2.1.2.                  Accounted revenues: +8.8% on a Like-for-Like basis

                                                                                                                              100%                                                                                                             Group share

(€ million)

H1 2023

H1 2024

Change (%)

H1 2023

H1 2024

Change (%)

Change (%) LfL1

Offices

193.6

189.2

- 2.2%

162.6

155.2

- 4.5%

+8.8%

France

101.1

94.2

- 6.8%

87.1

77.8

- 10.7%

+13.1%

Paris / Neuilly / Levallois

Western Crescent and La 

Defense

33.2

24.3

37.4 17.7

+12.5%

-27.2%

31.3

35.1 13.9

+12.2%

-33.6%

+17.5%

+18.0%

20.9

First ring

26.5

26.0

-1.6%

20.2

18.2

-9.8%

+6.5%

Major Regional Cities

14.5

11.3

-22.3%

12.1

8.8

-27.6%

+6.9%

Others France

2.6

1.8

-29.9%

2.6

1.8

-29.9%

+9.4%

Italy

65.3

66.5

+1.8%

51.3

52.0

+1.4%

+5.1%

Milan

Telecom portfolio 

(51% ownership)

34.0 28.7

34.2 29.6

+0.5% +3.3%

34.0

34.2 15.1

+0.5% +3.3%

+4.6% +5.8%

14.6

Others Italy

2.6

2.7

+3.1%

2.6

2.7

+3.1%

+7.1%

Germany

27.2

28.5

+4.9%

24.2

25.4

+5.0%

+2.8%

Berlin

Frankfurt

3.7

10.9

4.6

11.0

+22.6% +0.7%

2.6

3.3

10.1

+28.3% +0.8%

+8.5%

+0.8%

10.1

Düsseldorf

5.0

5.1

+2.4%

4.7

4.8

+2.4%

+2.4%

Other (Hamburg & Munich)

7.5

7.8

+4.0%

6.9

7.2

+3.7%

+3.7%

Compared to last year, rental income decreased by -€7.4 million, mainly due to:  

•       Strong like-for-Like rental growth (+€12.1 million) of • Impact of vacated assets to be converted into +8.8%, a very good performance mostly driven by hotel or residential (-€5.1 million) partially offset by the impact of strong indexation (+4.4pts deliveries of new assets (+€2.2 million), contribution) and letting activity,

•       Some base effects with 2023 indemnities (-€3.3 • Disposals (-€13.2 million) realized in 2023 (-€7.2 million compared to 2023).

million) and in 2024 (-€6.0 million),

                 

13

       1.2.1.3.              Annualized revenue

(€ million)

Surface  (m²)

Number  of assets

H1 2024 (100%)

H1 2024

(Group share)

% of  rental  income

Offices

2,095,093 

180 

459.6

369.0

100%

France

1,135,979

92

261.0

204.3

55%

Paris / Neuilly / Levallois

     273,736 

24

98.3

90.8

25%

Western Crescent and La Defense

     100,924 

6

41.7

32.9

9%

First ring

     410,303 

19

86.0

55.0

15%

Major Regional Cities

     295,607 

28

32.1

22.8

6%

Others France

       55,409 

15

2.8

2.8

1%

Italy

594,470

69

140.9

113.2

31%

Milan

     213,571 

26

78.9

78.9

21%

Telecom portfolio (51% ownership)

     337,760 

41

56.5

28.8

8%

Others Italy

       43,139 

2

5.6

5.6

2%

Germany

364,644

19

57.7

51.5

14%

Berlin

       58,119 

7

9.1

6.6

2%

Frankfurt

     118,649 

4

22.9

21.1

6%

Düsseldorf

       68,786 

2

10.2

9.6

3%

Other (Hamburg & Munich)

     119,090 

6

15.4

14.1

4%

       1.2.1.4.              Indexation

Fixed-indexed leases are indexed to benchmark indices the Consumer Price Index (CPI) on each (ILC and ICC in France and the consumer price index for anniversary of the signing of the agreement.  foreign assets) :

•       Rents are indexed on the German consumer

•       For current leases in France, 93% of rental price index for 42% of leases, 10% have a fixed income is indexed to ILAT, 5% to ICC and 2% to uplift and 32% have an indexation clause (if CPI

                 ILC.                                                                                                                              goes above an annual increase between 5%

and 10%). The remainder (16%) is not indexed

•       In Italy, the indexation of rental income is and mainly let to public administration. usually calculated by applying the increase in


       1.2.1.5.                 Busy rental activity: 74,079 m² renewed or let during

(€ million - H1 2024)

Surface (m²)

Annualized Top up rents

Group Share (€m)

Annualised rents  (100%, €/m²)

Vacating 

29,297

4.7

179

Letting 

27,225

9.1

357

Renewals 

46,854

8.0

203

2024 was a dynamic semester for letting activity, with 74,079 m² let or renewed, with the main lettings shown below:

•       27,225 m² have been let or pre-let in 2024, of which:          •              1,270 m² on Chatillon, IRO, now 69% let.

•       3,661 m² on Paris, The Line,   •              46,854 m² have been renewed, of which:

•       3,085 m² on Sun in Munich,   •              30,234 m² on Milan, Lorenteggio,

•       3,009 m² of pre-lettings on the development • 7,870 m² on Orly, CDO Askia, part of Dusseldorf, Icon,

•       4,320 m² on Dusseldorf, Icon, 

•       2,664 m² on Levallois, Maslo, now 100% let,

•       1,270 m² on Hamburg, Zeughaus.

•       2,817 m² of pre-lettings on the development • 29,297 m2 were vacated, mostly in France (21,705 portfolio (Rozzano), m²) and Germany (6,361 m²)

•       2,184 m² on Orly, CDO Belaïa,

•       13,612 m² for redevelopment (€1.5 million of top

•       1,766 m² on Issy les Moulineaux, Urban Garden up rents, Group share), mostly for new offices in now 84% let,              Chalon-sur-Saone and Melun.

•       1,502 m² on Frankfurt, FAC,   •              15,685 m² on assets to be relet, of which 4,554

m² have already been relet.

•       1,438 m² on Fischerinsel in Berlin, 

       1.2.1.6.                 Lease expiries and occupancy rate

       1.2.1.6.1.               Lease expiries: firm residual lease term of 5.0 years

(€ million Group share)

By lease end date (1st break)

% of total

By lease end date

% of total

2024

21.5

5.8%

14.7

4.0%

2025

62.5

16.9%

41.4

11.2%

2026

23.1

6.3%

14.0

3.8%

2027

41.8

11.3%

24.2

6.6%

2028

41.3

11.2%

42.6

11.5%

2029

19.0

5.1%

24.3

6.6%

2030

47.4

12.8%

44.5

12.0%

2031

20.6

5.6%

34.9

9.5%

2032

27.1

7.4%

49.0

13.3%

2033

27.0

7.3%

36.8

10.0%

Beyond

37.8

10.2%

42.8

11.6%

TOTAL

                         369.0                                 100%                                               369.0

100%

In 2024, €21.5 million of leases will expire, of which €14.4 million already managed (€11.7 million for which tenant has no intention to vacate the property and €2.7m on assets going to be transformed into hotels). €7.0 million are still to be managed (1.0% of Covivio annualized revenues), mostly on core assets for which tenant decision is not known yet. 

        1.2.1.6.2.                 Occupancy rate: 95.1% at end June-2024, +60 bps vs end-2023

(%)

2023

H1 2024

Offices

94.5%

95.1%

France

94.1%

95.0%

Paris / Neuilly / Levallois

95.8%

96.8%

Western Crescent and La Defense

95.8%

97.6%

First ring

89.9%

91.1%

Major Regional Cities

97.9%

96.6%

Others France

84.0%

79.3%

Italy

98.7%

98.6%

Milan

98.3%

98.2%

Telecom portfolio (51% ownership)

100.0%

100.0%

Others Italy

97.3%

97.3%

Germany

86.4%

87.7%

Berlin

85.0%

84.5%

Frankfurt

90.3%

90.0%

Düsseldorf

93.8%

90.1%

Other (Hamburg & Munich)

81.4%

85.9%

•       In France, the occupancy rate increased by +90bps (Telecom portfolio), almost fully offset by letting to 95.0%, compared to 94.1% at end-2023, mostly activity. due to the dynamic letting activity in H1 2024.

•       In Germany, the occupancy rate increased by +130

•       In Italy, the occupancy rate level decreased by - bps to 87.7% vs. end-2023. This is mainly linked to 10bps to 98.6%, compared to 98.7% at end-2023, lettings, especially on Sun in Munich.

mainly due to disposals of fully occupied assets

       1.2.1.7.              Portfolio values

       1.2.1.7.1.              Change in portfolio values: -1.3% on offices

(€ million - incl. duties,

Group share)

Value  2023

Invest.

Disp.

Change in value

Other  effects

Value  H1 2024

Assets in operation

6,623

23

-64

-166

164

6,581

Assets under development

1,224

115

0

-42

-129

1,168

Total Offices 

7,847

138

-64

-207

35

7,749

The portfolio value decreased by - €98 million since year-end-2023 (-1.3%), mainly driven by:

•       €207 million from changes in values,

•       + €138 million invested in development projects and upgrading works on assets in operation,

•       €64 million from disposals.

       1.2.1.7.2.              Change on a like-for-like basis: -2.6%

(€ million, Excluding Duties)

Value 

2023 

100%

Value 

2023 

Group share

Value 

H1 2024 

100%

Value 

H1 2024 

Group share

LfL (%) change 1

6 months 

Yield ²  Dec. 2023

Yield ²  H1 2024

% of total

Offices

9,446 

7,847 

9,308

7,749

-2.6%

5.5%

5.7%

100%

France

5,010 

4,117 

5,025 

4,147 

-1.4%

5.5%

5.7%

54%

Paris / Neuilly / Levallois

Western Crescent and La 

Defense

2,476 

604 

2,293 

2,536 582

2,358 479

+0.1%

-4.8%

4.5% 7.1%

4.6% 7.7%

30% 6%

496 

First ring

Major Regional Cities

Others France

1,283 

601 

46 

864 

1,290

576 41

869

400

41

-1.6%

-4.1%

-9.3%

6.3%

6.0%

9.3%

6.7%

6.3%

9.4%

11%

5%

1%

417 

46 

Italy

2,963 

2,491 

2,916 

2,462 

-1.0%

5.6%

5.6%

32%

Milan

Telecom portfolio (51%  ownership)

1,932  963 

1,932 

1,931 926

1,931 472

-0.9% -0.7%

5.3% 6.2%

5.3% 6.1%

25% 6%

491 

Others Italy

68 

68 

59

59

-4.9%

9.2%

9.5%

1%

Germany

1,473 

1,239 

1,368 

1,140 

-10.0%

5.2%

5.9%

15%

Berlin

Frankfurt

467  411 

306 

462 369

300 340

-7.4%

-10.4%

4.6% 5.7%

5.4% 6.3%

4%

4%

378 

Düsseldorf

251 

237 

223

210

-13.1%

5.8%

6.3%

3%

Other (Hamburg & Munich)

344 

319 

314

290

-9.6%

4.9%

5.6%

4%

1 LfL : Like-for-Like || 2  Yield excluding assets under development

The -2.6% change in Like-for-Like value is driven by were needed outside city centers, several effects: 

• -10% value decline in Germany, in line with a more • Strong resilience of France (-1.4%) and Italy (-1.0%) muted investment market in H1. assets, especially in city centers with values back to

The average yield increased by +20bps to 5.7%. stability, while some further limited adjustments

       1.2.1.8.               Assets partially owned

Partially owned assets are the following:

• CB 21 Tower (75% owned) in La Défense.

• The Silex 1 and 2 assets in Lyon (50.1% owned and fully consolidated).

• So Pop project in Paris Saint-Ouen (50.1% owned and fully consolidated).

• Streambuilding project in Paris 17th (50% owned and fully consolidated).

• The Dassault campuses in Vélizy (50.1% owned and fully consolidated).

• The New Vélizy campus for Thales (50.1% owned and accounted for under the equity method).

• Euromed Centre in Marseille (50% owned and accounted for under the equity method).

• Coeur d’Orly in Greater Paris (50% owned and accounted for under the equity method).

        1.2.2.        German residential: 30% of covivio portfolio

Covivio operates in the German residential segment through its 61.7% held subsidiary Covivio Immobilien. The figures presented are expressed as 100% and as Covivio Group share.

Covivio owns around ~41,100 units in Berlin, Hamburg, Dresden,        Leipzig,    and          North       Rhine-Westphalia, representing €7.2 billion (€4.5 billion Group share) of assets. 

100% exposure to metropolitan areas above 1 million inhabitants and 90% in cities above 500,000 inhabitants. Covivio targets the high-end of the housing market. 

Covivio is mostly exposed to A-cities in Germany, with a

       1.2.2.1.                   Continued rise in markets rents and rebounding investment market

Exposure to Berlin, where housing shortage is the highest in Germany, represents 57% at end-June 2024. Covivio’s portfolio in Berlin is of high quality, with 68% of buildings built before 1950 and 68% of the surface already divided into condominiums.


•       In Germany, the demand for housing continued to rise since the start of the year, in a context of increasing number of inhabitants (population in Germany reached a record high level of 84.7 million inhabitants according to Destatis), while building completions, at 294 000 units in 2023, remained far from the Government target (> 400 000 units / year). 

•       This shortage continues to support rents in Germany and especially in Berlin. According to Immoscout24, in H1 2024, average asking rents for existing buildings were by +4.2% to €8.56/m²/month in Germany and by +7.2% to €13.8/m²/month in Berlin. For new buildings, rents were up up by +8.7% year-on-year in Germany to €12.2/m²/month and by +8.6% in Berlin to €19.5/m².

•       After several low quarters for the German residential investment market (for multi-family buildings above 30 units), volumes rebounded in H1 2024, by +25% to €3.3 billion according to BNP Real Estate. The private market also shows signs of stronger appetite since the beginning of 2024, as shown by private real estate loans recorded by the Bundesbank, up +15% year-on-year to €76.5 billion over the first 5 months of 2024.

•       Average asking prices were also trending upwards in Q1 2024. According to Immoscout24, prices for existing buildings increased by +2% over H1 in Berlin to €4,641/m² (-0.1% over one year), still well above the current valuation of Covivio’s residential portfolio (€3,081/m² in Berlin). The average square meter price for new buildings also increased to €6,471/m² in H1 2024 (+3.1% over H1 and +5.1% over one year). 


In H1 2024, Covivio's activities were marked by:

•       Continued high rental growth: +3.9% on a like-forlife basis, now well above inflation; 

•       Creation of a joint-venture on a €274 million Berlin portfolio, through a partnership with CDC Investissement Immobilier; 

•       Stability in values: -0.1% on a 6-months like-for-like basis, of which +2.3% in Berlin.


        1.2.2.2.                 Accounted rental income: +3.9% like-for-like 

(In € million)

Rental income H1 2023 (100%)

Rental 

income H1 2023 Group share

Rental  income H1 2024 (100%)

Rental 

income H1 2024 Group share

Change  (%) 

Group share

Change 

(%) LfL [3]

Group share

% of  rental  income

Berlin

73.3

48.1

75.4

49.5

+  2.8%

+4.5% 

52%

Dresden & Leipzig

11.6

7.5

11.9

7.7

+  2.7%

+2.7% 

8%

Hamburg

9.1

6.0

9.6

6.3

+  5.4%

+5.4% 

7%

North Rhine-Westphalia

47.9

30.2

49.8

31.4

+  3.9%

+3.2% 

33%

  Essen

17.8

11.0

18.3

11.3

+  2.9%

+2.9% 

12%

  Duisburg

8.2

5.1

8.5

5.3

+  3.1%

+3.2% 

6%

  Mulheim

5.5

3.5

5.9

3.7

+  7.3%

+3.3% 

4%

  Oberhausen

5.0

3.3

5.2

3.4

+  4.3%

+4.4% 

4%

  Other

11.4

7.3

11.9

7.6

+  4.2%

+3.2% 

8%

Total 

141.8

91.8

146.6

94.8

+  3.3%

+3.9% 

100%

of which Residential  121.4 78.4 125.5 81.0 +  3.4% +4.0%  85% of which Other commercial2  20.5 13.4 21.1 13.8 +  3.0% +3.8%  15%

Rental income amounted to €94.8 million Group share in H1 2024, up +3.3% (+€3.0 million) thanks to:

• In Berlin, like-for-like rental growth is +4.5% (+€ 2.8 million), driven by the indexation (+1.7 pts) and relettings (+1.4 pts) with high uplift (+35% in H1 2024).

strong in all areas (+3.4% on average, +€2.2 million) due to the reletting impact (including modernizations) and the indexation.

• These effects were partly offset by disposals closed in 2023/2024 (-€0.8 million).

•       Outside Berlin, like-for-like rental growth was

o/w Residential

2,592,367

39,560

256.2

163.1

8.2 €/m²

86%

o/w Other com. [4][5]

233,628

1,532

43.8

27.2

15.6 €/m²

14%


        1.2.2.4.1.            Rents for re-leased properties: 

In principle, rents may be increased freely, provided the property is not financed through governmental subsidies. 

As an exception to the unrestricted rent setting principle,    cities                 like           Berlin,      Hamburg,                Cologne, Düsseldorf, Dresden and Leipzig have introduced rent caps (Mietpreisbremse) for re-leased properties. In these cities, rents for re-leased properties cannot exceed the public rent reference (Mietspiegel) by more than 10%, except in the following conditions: 

•       If the property has been modernised in the past three years, the rent for the re-let property may exceed the +10% limit by a maximum of 8% of the costs to modernise it.

•       In the event the property is completely modernised (work amounting to more than one-third of new construction costs excl. Maintenance), the rent may be increased freely.

•       If the rent received from the previous tenant is higher than the +10% limit, then the previous rent will be the limit in the case of re-letting.

Properties built after 1 October 2014 are not included in the rent cap.

        1.2.2.4.2.          For current leases: 

For residential tenants, the rent can generally be adjusted based on the local comparative rent

(Mietspiegel), which is usually determined based on the rent index. In addition to this adjustment method, an index-linked or graduated rent agreement can also be concluded. A successive combination of adjustment methods can also be contractually agreed (e.g. graduated rent for the first 5 years of the contract, followed by adjustment to the local comparative rent).

Adjustment to the local comparative rent: The current rent can be increased by 15% to 20% within three years, depending on the region, without exceeding the local comparative rent (Mietspiegel). This type of contract represents c. 90% of our rental income.

        1.2.2.4.3.               For current leases with work carried out: 

If works have been carried out, rents may be increased by up to 8% of the cost of work excl. maintenance, in addition to the possible increase according to the rent index. This increase is subject to three conditions:

The works aim to save energy, increase the utility value, or improve the living conditions in the long run.

The rent increase takes effect 3 months after the declaration of rent increase.

The rent may not be increased by more than €3/m² for work to modernise the property within a six-year period (€2/m² if the initial rent is below €7/m²).

        1.2.2.5.                Occupancy rate: a high level of 99.0%

(%)

2023

H1 2024

Berlin

98.6%

98.4%

Dresden & Leipzig

99.8%

99.7%

Hamburg

100.0%

99.9%

North Rhine-Westphalia

99.6%

99.5%

Total

99.1%

99.0%

The occupancy rate stands at 99.0% It has remained above 98% since the end of 2015 and reflects the Group's very highquality portfolio and low rental risk.

20

        1.2.2.6.                Portfolio values: €7.2 billion (€4.5 billion Group share)

        1.2.2.6.1.            Change in portfolio value: -2.8%

(In € million, Group share, excluding duties)

Value

2023

Invest.

Disposals 

Change in value

Other

Value H1 2024

Berlin

2,674

18

-105

43

-22

2,608

Dresden & Leipzig

379

3

0

-27

0

355

Hamburg

350

5

0

-13

0

343

North Rhine-Westphalia

1,269

14

0

-44

-3

1,236

Total 

4,672

40

-105

-41

-25

4,542

In the first half of 2024, the portfolio decreased by -2.8% at current scope, to €4.5 billion Group share, mostly driven by the creation of a joint venture, contributing to €93 million of disposals Group share.

        1.2.2.6.2.              Stable values on a like-for-like basis: -0.1%

(In € million, excluding duties)

Value

2023 100%

Value 2023  Group share

Surface (m²) 100%

Value H1

2024 100%

Value H1

2024  in €/m²

Value H1 2024

Group share

LfL 1

change 

Yield  2023

Yield  H1 2024

% of total value 

Berlin

4,078

2,674

1,286,549

4,127

3,208

2,608

2.3%

3.7%

3.7%

57%

Dresden & Leipzig

584

379

266,474

547

2,052

355

-6.4%

4.1%

4.5%

8%

Hamburg

536

350

149,000

523

3,513

343

-2.3%

3.6%

3.7%

8%

NRW 3

2,014

1,269

1,105,321

1,963

1,776

1,236

-2.5%

4.9%

5.2%

27%

  Essen

782

485

393,924

790

2,005

490

0.8%

4.7%

4.7%

11%

  Duisburg

328

203

198,664

311

1,568

193

-5.0%

5.2%

5.5%

4%

  Mulheim

223

140

131,296

222

1,692

140

-0.3%

5.2%

5.4%

3%

  Oberhausen

182

119

124,984

175

1,398

114

-4.2%

5.7%

6.1%

3%

  Others

499

320

256,453

465

1,815

298

-6.3%

4.8%

5.3%

7%

TOTAL

7,212

4,672

2,807,344

7,161

2,551

4,542

-0.1%

4.1%

4.2%

100%

o/w Residential

6,356

4,113

2,575,334

6,270

2,435

3,994

-0.6%

4.0%

4.1%

88%

o/w Other com. 2

855

559

232,009

891

3,840

548

3.9%

5.0%

5.0%

12%

1 LfL: Like-for-Like 6 months || 2 Other commercial: Ground-floor retail, car parks, etc || 3 NRW: North Rhine-Westphalia


The average value of residential assets is €2,551/m², with €3,208/m² in Berlin (€3,081 on pure residential) and €1,776/m² in North Rhine-Westphalia. The average yield increased by +10 bps vs. end of 2023 to 4.2%. Assets are valued at their block value. 49% of the portfolio is already divided into condominiums, particularly in Berlin (68%), where the unit sale value is 50% above the block value.

In H1 2024, values decreased –0.1% on a like-for-like basis versus end-2023, reflecting a renewed appetite for large portfolios in German residential.


        1.2.2.7.                 Maintenance and modernization CAPEX

In H1 2024, CAPEX totalled €54.7 million (€19.4 /m²; €34.7 million in Group share) and OPEX came to €9.8 million (€3.5 /m²; €6.2 million in Group share).

On average, modernization projects, which totalled €29.4 million in H1 2024 (€18.8 million in Group share), have an immediate yield around 5%, going up to 10% post relettings.

€ 26.9 / m² modernization

                                       € 23.1 / m² maintenance  

Dresden & Leipzig 

€4.8m (€ 17.9 / m ²)                                              

€ 9.6 / m ² modernization                                      

€ 8.3 / m² maintenance

image                                   North Rhine   -Westphalia                                                                                                                         

                                                                                                                                                        Berlin - €23.3m (€ 17.8 / m  ²)

 €19.2m (€ 17.4 / m  ²)  € 9.6 / m ² modernization  € 9.3 / m ² modernization   € 8.2 / m ² maintenance  

Hamburg - €7.5 m (€ 50.0 / m²)


        1.2.3.       Hotels: 20% of Covivio’s portfolio

Covivio Hotels, a 52.5%-owned subsidiary of Covivio as of 30 June 2024 (vs. 43.9% at end-2023), is a listed property investment company (SIIC) and leading hotel real-estate player in Europe. It invests both in hotels under lease (fixed or variable) and in hotel operating companies.

The figures presented are expressed at 100% and in Covivio Group share (GS).

Covivio owns a high-quality hotel portfolio (311 hotels, 43,402 rooms) worth €6.4 billion (€3.1 billion in Group share), focused on major European cities and let or operated by major hotel operators such as Accor, B&B, Mariott, IHG, NH Hotels, etc. This portfolio offers geographic and tenant diversification (across 12 European countries) as well as several asset management opportunities via different ownership methods (hotel lease and hotel operating properties).


       1.2.3.1.                  Hotels market: continued increasing performances

European hotels performance in the first half of the year is increasing compared to 2023. The average RevPAR (revenue Per Available Room) in Europe shows an average increase of +4% year-on-year at end-May 2024, as the market continues its positive momentum, supported by the rise in occupancy rates and average prices. 

image 

•       Southern European countries, particularly Spain impacted by travel delays during the pre-Olympic and Italy, are showing very strong performances, period.  increasing respectively by +15% and +8%.

•       On the investment side, volumes remained strong, • Germany is continuing to catch up with a RevPAR reaching €4.5 billion in Q1 2024, +45% vs. Q1 2023. growth of +4%.  France, Spain, and the United Kingdom account for

the majority of transactions (60%). 

•       In France, RevPAR growth is more modest at +1%,

Assets partially owned by Covivio Hotels include mostly: 

•       91 B&B assets in France, including 89 held at 50.2% and 2 held at 31.2%

•       25 AccorInvest assets in France (23 assets) and Belgium (2 assets), between 31.2% and 33.3% owned.

        1.2.3.2.                 Accounted revenues: +5.2% on a like-for-like basis

(In € million)

Revenues 

H1 2023 100%

Revenues

H1 2023 Group share

Revenues 

H1 2024 100%

Revenues

H1 2024 Group share

Change

Group share

(%)

Change

Group share

(%) LfL 1

Lease properties - Variable 

32.3

14.2

35.6

17.5

+  23.3%

+9.3% 

Lease properties - Fixed

93.5

38.2

96.2

43.3

+  13.2%

+4.4% 

Operating properties - EBITDA

31.6

13.5

30.5

15.1

+  11.9%

+2.9% 

Total revenues Hotels

157.4

65.9

162.3

75.9

+  15.1%

+5.2% 

1 LfL: Like-for-Like                                                                                                                                                                                                                                                                                                        

Hotel revenues increased by +5.2% like-for-like (+€10.0million Group share) compared to H1 2023, due to:

Lease properties:

like-for-like,     mostly     through   positive indexation.

Operating properties (20% of hotels revenue): mainly located in Germany and in the north of France. The +2.9% like-for-like increase in EBITDA is mostly explained by improved performances in Germany (+10%). 

Variable leases (23% of hotels revenue), up +9.3% on a like-for-like basis, mostly linked with the steep increase of variable rents in the south of Europe, compensating a slowdown in Paris area impacted by the pre-Olympic period.

        •           Fixed leases (57% of hotels revenue), up +4.4%

        1.2.3.3.              Annualized revenue

Breakdown by operators and by country (based on 2024 revenues), totalling €178.8 million in Group share:

image

Revenues are split using the following breakdown: fixed (55%), variable (22%) and EBITDA on management contracts (23%).

        1.2.3.4.             Indexation

Fixed leases are indexed to benchmark indices (ILC and ICC in France and consumer price index for foreign assets).

        1.2.3.5.                Lease expiries: 11.8 years hotels residual lease term

(In € million, Group share)

By lease end date 

(1st break)

% of total

By lease end date

% of total

2024

3.6

3%

0.8

1%

2025

3.1

2%

2.7

2%

2026

5.7

4%

0.0

0%

2027

1.1

1%

1.1

1%

2028

0.0

0%

0.0

0%

2029

16.9

12%

14.5

11%

2030

10.3

7%

10.3

7%

2031

2.8

2%

5.2

4%

2032

4.6

3%

4.6

3%

2033

6.2

5%

8.0

6%

Beyond

83.5

61%

90.5

66%

Total Hotels in lease

138.0

100%

138.0

100%

        1.2.3.6.                Portfolio values: +21% at current scope

        1.2.3.6.1.            Change in portfolio values 

(In € million, Group share,  

Excluding Duties)

Value

2023

Invest.

Disposals 

Change in value

Other (currency)

Change of scope

Value H1 2024

Hotels - Lease properties

1,948

2

-9

12

7

387

2,348

Hotels - Operating properties

587

9

-

0

1

116

713

Total Hotels

2,535

11

-9

13

8

503

3,061

At the end of June 2024, the portfolio reached €3.1 billion (Group share), reflecting a €527 million increase (+21%) compared to year-end 2023. This growth can be attributed primarily to the increased stake in Covivio Hotels (from 43.9% to 52.5%), a significant step for Covivio in enhancing its presence in the hotel industry, along with a positive change in value amounting to €13 million.

        1.2.3.6.2.              Change on a like-for-like basis: +0.5% growth

(In € million, Excluding Duties)

Value  2023 100%

Value 2023  Group share

Value H1 2024 100%

Value H1 2024

Group share

LfL 1

change 

Yield 2023

Yield  H1 2024

% of total value 

France

2,117

701

2,134

845

+0.8%

5.6%

5.5%

28%

  Paris

833

309

842

374

12%

  Greater Paris (excl. Paris)

461

127

462

153

5%

  Major regional cities

511

164

517

199

6%

  Other cities

312

101

312

120

4%

Germany

619

267

617

319

-0.3%

5.6%

5.8%

10%

  Frankfurt

70

30

69

35

1%

  Munich

45

20

45

24

1%

  Berlin

70

30

71

37

1%

  Other cities

434

188

432

223

7%

Belgium

244

96

248

116

+0.9%

7.2%

7.7%

4%

  Brussels

96

34

102

43

1%

  Other cities

148

61

146

72

2%

Spain

636

279

629

330

+0.5%

6.2%

6.7%

11%

  Madrid

282

124

275

144

5%

  Barcelona

222

97

221

116

4%

  Other cities

132

58

133

70

2%

UK

662

290

683

359

+0.4%

5.6%

5.3%

12%

Italy

266

117

273

143

+2.5%

5.5%

6.0%

5%

Other countries

451

198

450

236

+0.6%

5.7%

6.3%

8%

Total Lease properties

4,996

1,948

5,033

2,348

+0.6%

5.8%

5.9%

77%

France

311

136

326

171

+2.8%

6.5%

6.3%

6%

  Lille

103

45

106

56

2%

  Other cities

208

91

220

115

4%

Germany

842

350

836

417

-1.0%

6.1%

6.0%

14%

  Berlin

592

246

587

293

10%

  Dresden & Leipzig

193

80

192

96

3%

  Other cities

57

24

57

29

1%

Other countries

228

100

237

125

-0.2%

6.8%

7.5%

4%

Total Operating properties

1,380

587

1,400

713

+0.0%

6.2%

6.3%

23%

Total Hotels

6,376

2,535

6,432

3,061

+0.5%

5.9%

6.0%

100%


1 LfL : Like-for-Like on a 6-months basis 

At the end of June 2024, Covivio held a unique hotel portfolio (311 hotels / 43,402 rooms) of €3.1 billion group share (€6.4 billion at 100%) in Europe. This strategic portfolio is characterised by:

•       High-quality locations: average Booking.com location grade of 8.9/10 and 90% in major European city destinations.

•       Diversified portfolio: in terms of countries (12 countries, none representing more than 33% of the total portfolio), and segment (68% economic/midscale and 32% upscale).

•       Major hotel operators with long-term leases: 16 hotel operators with an average lease duration of

11.8 years.

The portfolio value increase by +0.5% like-for-like:

•       On a like-for-like basis, the hotel portfolio increased by +0.5% over 6 months. This variation is mainly explained by the stabilization of capitalization rates and continued revenue growth, driven by the strong performance of variable revenue hotels and the indexation of fixed rents. 

•       The hotel portfolio has an average yield excluding duties of 6.0%.


                           Portfolio breakdown by value and                                                      90% in major European destinations

                                              geography

imageimage                               Others

        1.3.          Financial information and comments

Covivio’s activity involves the acquisition or development, ownership, management, and leasing of properties, particularly Offices in France, Italy and Germany, Residential in Germany, and Hotels in Europe. 

Registered in France, Covivio is a public limited company with a Board of Directors.

The German Residential information in the following sections include some Office assets owned by the subsidiary Covivio Immobilien.

Consolidated accounts

       1.3.1.        Scope of consolidation

On 30 June 2024, Covivio’s scope of consolidation includes companies located in France and several European countries. The main equity interests fully consolidated but not wholly owned companies are as follows:

Subsidiaries

31 Dec. 2023

30 Jun. 2024

Covivio Hotels

43.9%

52.5%

Covivio Immobilien (German Resi.)

61.7%

61.7%

Covivio Berlin Prime (German Resi.)

65.6%

31.5%

Sicaf (Telecom portfolio)

51.0%

51.0%

OPCI CB 21 (CB 21 Tower)

75.0%

75.0%

Covivio Alexanderplatz (mixed used dev.)

55.0%

55.0%

SCI Latécoëre (DS Campus)

50.1%

50.1%

SCI Latécoëre 2 (DS Campus extension)

50.1%

50.1%

SCI 15 rue des Cuirassiers (Silex 1)

50.1%

50.1%

SCI 9 rue des Cuirassiers (Silex 2)

50.1%

50.1%

Sas 6 Rue Fructidor (So Pop)

50.1%

50.1%

SCCV Fontenay sous bois (France Residential)

50.0%

50.0%

SCCV Bobigny (France Residential)

60.0%

60.0%

SNC N2 Batignolles promo (Streambuilding)

50.0%

50.0%

SCI N2 Batignolles (Streambuilding)

50.0%

50.0%

Hôtel N2 (Streambuilding - Zoku)

50.1%

50.1%

        1.3.2.       Accounting principles 

The consolidated financial statements have been prepared in accordance with the international accounting standards issued by the IASB (International Accounting Standards Board) and adopted by the European Union on the date of preparation. These standards include the IFRS (International Financial Reporting Standards), as well as their interpretations. The financial statements were approved by the Board of Directors on 19 July 2024. 

        1.3.3.         Simplified income statement – Group share

(In € million, Group share)

H1 2023

H1 2024

Change

%

Net rental income

279.0

281.9

+2.8

+1%

EBITDA from hotel operating activity & flex-office

21.3

23.2

+2.0

+9%

Income from other activities (incl. Property dev.)

11.3

9.0

-2.4

-21%

Net revenue

311.6

314.1

+2.4

+1%

Net operating costs

-39.5

-38.6

+0.9

-2%

Amort. of oper. assets & net change in provisions

-13.4

-18.4

-4.9

+37%

Current operating income

258.7

257.1

-1.6

-1%

Change in value of properties

-928.3

-246.7

+681.7

n.a.

Result from asset disposals

-2.4

1.8

+4.2

n.a.

Result from disposal of securities

-0.3

-0.4

-0.1

+47%

Result from changes in scope & other

-0.8

-0.3

+0.5

-60%

Operating income

-673.1

11.5

+684.7

n.a.

Cost of net financial debt

-50.5

-47.3

+3.2

-6%

Interest charges linked to financial lease liability

-3.6

-4.1

-0.5

+13%

Value adjustment on derivatives

-29.4

15.5

+44.9

n.a.

Discounting of liabilities-receivables & Result of chge

0.2

0.2

-0.0

-0%

Early amortisation of borrowings' cost

-0.3

-0.8

-0.5

+150%

Share in earnings of affiliates

-15.9

12.5

+28.4

n.a.

Income before tax

-772.7

-12.6

+760.2

n.a.

Deferred tax

87.7

10.3

-77.3

-88%

Corporate income tax

-4.7

-6.1

-1.5

+32%

Net income for the period

-689.7

-8.4

+681.3

-99%

       1.3.3.1.             €314.1 million net revenue (+1%)

Net revenue in Group share increased especially thanks to both dynamic rental activity and strong operating activity in hotels, the reinforcement in Covivio Hotels, despite the impact of disposals in offices. Also refer to 1. Business Analysis

(In € million, Group share)

H1 2023

H1 2024

Change

 %

   France Offices

78.2

68.5

-9.7

-12%

   Italy Offices (incl. retail)

44.4

44.7

+0.3

+1%

   German Offices

18.9

20.1

+1.3

+7%

Offices

141.4

133.3

-8.1

-6%

German Residential

85.4

87.6

+2.2

+3%

Hotels

52.1

60.9

+8.8

+17%

Total Net rental income

279.0

281.9

+2.8

+1%

EBITDA from hotel operating activity & flex-office

21.3

23.2

+2.0

+9%

Income from other activities

11.3

9.0

-2.4

-21%

Net revenue

311.6

314.1

+2.4

+1%


        1.3.3.2.          Amortizations & net change in provisions

Note that this item includes the amortisation linked to the right of use according to IFRS 16. This amortization of right of use is mainly related to owner-occupied buildings and headquarters.

        1.3.3.3.          Change in the fair value of assets

The income statement recognises changes in the fair value (-€246.7 million) of assets based on appraisals carried out on the portfolio. This line item does not include the change in fair value of assets recognised at amortised cost under IFRS but is taken into account in the EPRA NAV calculation (hotel operating properties, flex-office assets and other own occupied buildings). For more details on changes in the portfolio by activity, see sections 1.2.1.6.1, 1.2.2.6.1. and 1.2.3.6.1 of this document.

1.3.3.4. Income from asset disposals & disposals of securities

Income from asset disposals contributed +€1.8 million

        1.3.3.8.                Share of income of equity affiliates 

during the period.

        1.3.3.5.         Cost of net financial debt

Restated of the other financial products and the capitalization of interests on projects under development, the cost of net financial debt increases due to the rise in interest rates partially offset by a decrease of the average net debt.

        1.3.3.6.                   Interest charges linked to finance lease

liability

The Group rents some land under long term leasehold. According to IFRS 16, such rental costs are stated as interest charges. The slight increase refers to the hotel activity linked to the reinforcement in Covivio Hotels and the evolution of the exchange rate GBP.

        1.3.3.7.         Value adjustment on derivatives

The fair value of financial instruments (hedging instruments) is impacted by changes in interest rates. The P&L impact is a revenue of +€15.5 million.


Group Share

% interest

Contribution  to earnings (€million)

Value

Change in equity value (%)

OPCI Covivio Hotels

10.5%

2.5

51.9

+53%

Lénovilla (New Vélizy)

50.1%

4.7

62.2

-15%

Euromed Marseille

50.0%

-0.1

28.5

-8%

Cœur d'Orly (Orly Paris Airport)

50.0%

2.9

31.4

-13%

Phoenix (Hotels)

17.5%

2.0

56.9

+15%

Zabarella 2023 Srl (Build to sell office to resi.)

64.7%

0.0

13.6

+0%

Fondo Porta di Romana (Milan land bank)

24.5%

0.4

41.3

+17%

Total

  

12.5

285.7

+10%

The equity affiliates include Hotels in Europe and the France / Italy Offices sectors:

OPCI Covivio Hotels: three hotel portfolios, B&B (16 hotels), Campanile (19 hotels) and AccorHotels (35 hotels) 80%-owned by Crédit Agricole Assurances. Lenovilla: the New Vélizy campus (47,000 m²), let to Thalès and co-owned with Crédit Agricole Assurances.

Euromed in Marseille: one office building (Calypso) and a hotel (Golden Tulip) in partnership with Crédit Agricole Assurances. 

Coeur d’Orly in Greater Paris: two buildings in the Orly airport business district in partnership with ADP. Phoenix hotel portfolio: 32% stake held by Covivio

Hotels (52.5% subsidiary of Covivio) in a portfolio of 25 Accor Invest hotels in France & Belgium and 2 B&B in France.

Fondo Porta di Romana in Milan is a joint venture between Covivio (24.52%), Coima and Prada to participate to the acquisition of a plot of land in South Milan (future Olympic game village).

Zabarella in Padua is a joint venture between Covivio (64.74%) and Carron Cav. Angelo SpA (35.26%) to participate to the project in development Pauda Zabarella (transformation office to residential).

        1.3.3.9.             Taxes

The corporate income tax amounted to -€6.1 million driven by:

Foreign companies that are not or are only partially subject to a tax transparency regime (Italy, Germany, Belgium, the Netherlands, and Portugal).

French subsidiaries with a taxable activity.                                                                           

29

        1.3.3.10.              Adjusted EPRA Earnings at €230.8 million

(In € million, Group share)

Net income  Group share

Restatement

Adjusted  EPRA E.

H1 2024

Adjusted  EPRA E.

H1 2023

Net rental income

281.9

3.0

284.9

281.4

EBITDA from the hotel operating activity & flex-office

23.2

0.7

23.9

22.0

Income from other activities (incl. Property dev.)

9.0

0.0

9.0

11.3

Net revenue

314.1

3.7

317.8

314.8

Management and administration revenues

12.9

0.0

12.9

12.3

Operating costs

-51.5

0.0

-51.5

-51.8

Amort. of operating assets & net change in provisions

-18.4

15.4

-3.0

-5.6

Operating income

257.1

19.1

276.2

269.6

Change in value of properties

-246.7

246.7

0.0

0.0

Result from asset disposals

1.8

-1.8

0.0

0.0

Result from disposal of securities 

-0.4

0.4

0.0

0.0

Result from changes in scope & other

-0.3

0.3

0.0

0.0

Operating result

11.5

264.7

276.2

269.6

Cost of net financial debt

-47.3

0.0

-47.3

-50.5

Interest charges linked to finance lease liability

-4.1

2.6

-1.4

-1.3

Value adjustment on derivatives

15.5

-15.5

0.0

0.0

Foreign Exchge. result & Early amort. of borrowings' costs

-0.6

0.8

0.2

0.1

Share in earnings of affiliates

12.5

-2.9

9.6

9.6

Pre-tax net income

-12.6

249.7

237.2

227.4

Deferred tax

10.3

-10.3

0.0

0.0

Corporate income tax

-6.1

-0.2

-6.3

-4.0

Net income for the period

-8.4

239.2

230.8

223.4

Average number of shares

102,962,700

94,838,980

Net income per share

  

  

2.24

2.36


The restatement of the amortisation of operating assets (+€17.1 million) offsets the real estate amortisation of the flex-office and hotel operating activities.

The restatement of the net change in provisions (-€1.7 million) consists of the ground lease expenses linked to the UK leasehold.

Concerning the interest charges linked to finance lease liabilities relating to the UK leasehold, as per IAS 40 §25, €2.6 million was cancelled and replaced by the lease expenses paid (see the amount of -€1.7 million under the line item “Net change in provisions and other”).

The restatement of the share in earnings of affiliates allows for the EPRA earnings contribution to be displayed.

The restatement of the corporate income tax (-€0.2 million) is linked to the tax on disposals.

(In € million, Group share)

Offices

Germany

Residential

Hotels in lease

Hotel operating properties

Corporate or non-attrib.

sector 

H1 2024

Net rental income

136.1

87.6

61.1

0.2

-0.2

284.9

EBITDA from Hotel operating activity & flex-office

8.5

0.0

0.0

15.4

0.0

23.9

Income from other activities (incl. Property dev.)

6.2

2.5

0.0

0.0

0.3

9.0

Net revenue

150.8

90.1

61.2

15.6

0.2

317.8

Net operating costs

-19.9

-15.6

-1.3

-0.5

-1.4

-38.6

Amortisation of operating assets

-3.6

-1.0

0.0

-1.1

-0.6

-6.3

Net change in provisions and other

3.1

-0.4

-0.7

-0.4

1.7

3.3

Operating result

130.4

73.1

59.2

13.5

0.0

276.2

Cost of net financial debt

-17.3

-16.9

-9.7

-3.8

0.3

-47.3

Other financial charges

-0.2

0.0

-0.7

-0.4

0.0

-1.3

Share in earnings of affiliates

6.3

0.0

3.2

0.0

0.0

9.6

Corporate income tax

-1.2

-2.0

-2.0

-0.7

-0.4

-6.3

Adjusted EPRA Earnings

118.0

54.2

50.1

8.7

-0.1

230.8

Development margin 

-6.3

-2.3

0.0

0.0

0.0

-8.6

EPRA Earnings

111.7

51.9

50.1

8.7

-0.1

222.3

       1.3.3.11.                   Adjusted EPRA Earnings by activity

(In € million, Group share)

Offices

Hotels (in lease)

H1 2024

Net rental income

6.9

4.4

11.2

Net operating costs

-0.4

-0.4

-0.8

Amortisation of operating properties

0.0

0.3

0.3

Operating result

6.5

4.3

10.8

Cost of net financial debt

-0.2

-0.9

-1.1

Share in earnings of affiliates

0.0

-0.1

-0.1

Share in EPRA Earnings of affiliates

6.3

3.2

9.6

       1.3.3.12.             EPRA Earnings of affiliates


1.3.4.             Simplified consolidated income statement (at 100%)

(In € million, 100%)

H1 2023

H1 2024

var.

%

Net rental income

426.2

431.3

+5.1

+1%

EBITDA from hotel operating activity & flex-office

39.6

38.7

-0.9

-2%

Income from other activities (incl. Property dev.)

3.1

11.4

+8.3

+264%

Net revenue

469.0

481.4

+12.4

+3%

Net operating costs

-55.9

-54.9

+1.0

-2%

Amort. of operating assets & net change in provisions

-19.1

-25.8

-6.8

+35%

Current operating income

394.0

400.6

+6.6

+2%

Result from asset disposals

-3.7

3.0

+6.7

n.a.

Change in value of properties 

-1,277.7

-302.5

+975.2

n.a.

Result from disposal of securities 

-0.3

-0.6

-0.3

+102%

Result from changes in scope

-1.9

-0.6

+1.3

-66%

Operating income

-889.5

100.0

+989.5

n.a.

Cost of net financial debt

-85.7

-81.9

+3.9

-4%

Interest charge related to finance lease liability

-7.8

-8.1

-0.3

+4%

Value adjustment on derivatives

-29.2

36.5

+65.8

n.a.

Foreign Exchange result & Early amortization of borrowings' costs

0.0

-1.1

-1.1

n.a.

Share in earnings of affiliates

-13.3

16.6

+29.9

n.a.

Income before tax

-1,025.6

62.0

+1,087.6

n.a.

Deferred tax

128.9

8.8

-120.0

-93%

Corporate income tax

-7.9

-10.0

-2.1

+27%

Net income for the period 

-904.6

60.8

+965.4

n.a.

Non-controlling interests 

214.9

69.1

-145.8

-68%

Net income for the period - Group share

-689.7

-8.4

+681.3

n.a.


The +€681.3 million increase in net income for the period compared with H1 2023 is related to the change in fair value of properties reflecting the beginning of a stabilisation of the real estate market (-€302.5 million compared with a -€1,277.7 million in H1 2023), the impact by changes in interest rates on the fair value of financial instruments (+€36.5 million compared with a -€29.2 in H1

(In € million, 100%)

H1 2023

H1 2024

Change

%

France Offices

91.3

83.9

-7.4

-8%

Italy Offices

57.2

58.2

+1.0

+2%

German Offices

20.3

21.6

+1.3

+7%

Offices

168.8

163.7

-5.1

-3%

German Residential

132.4

135.7

+3.3

+2%

Hotels

125.0

131.9

+6.9

+6%

Total Net rental income

426.2

431.3

+5.1

+1%

EBITDA from the hotel operating activity & flex-office

39.6

38.7

-0.9

-2%

Income from other activities

3.1

11.4

+8.3

+264%

Net revenue

469.0

481.4

+12.4

+3%

2023), partly offset by the change in deferred taxes

mainly related to the effects described above (-€120 million) and strong operating performances. 

As a result, these effects are also presents in noncontrolling interests and in net income Group share. The decrease in non-controlling interests is also linked to the reinforcement in Covivio Hotels.

        1.3.5.          Simplified consolidated balance sheet (Group share)

(In € million, Group share)

31 Dec. 23

30 Jun. 24

Liabilities

31 Dec. 23

30 Jun. 24

Investment properties

12,596

12,569

Shareholders' equity

7,957

Investment properties under development

1,007

1,072

Other fixed assets

993

1,063

Equity affiliates

260

286

Financial assets

251

315

Deferred tax assets

57

58

Financial instruments

366

418

8,143

Assets held for sale

227

318

Borrowings

7,703

8,025

Cash

778

1,018

Financial instruments

142

154

Inventory (Trading & Construction activities)

257

229

Deferred tax liabilities

650

648

Other

420

542

Other liabilities

760

928

Total

17,211

17,899

Total

17,211

17,899

1.3.5.1.           Investment properties, Properties under development and Other fixed assets The portfolio (including assets held for sale) by operating segment is as follows:

(In € million, Group share)

31 Dec. 23

30 Jun. 24

Change

France Offices

3,932

3,899

-32

Italy Offices

2,403

2,364

-38

German Offices

1,145

1,047

-98

Offices

7,479

7,311

-168

German Residential

4,811

4,675

-137

Hotels

2,530

3,035

505

Other

3

3

0

Total Fixed Assets

14,823

15,023

200

The decrease in Offices (-€168 million) was mainly due to the disposals (-€116 million), the change in fair value (€211 million) partly offset by (+€128 million) of CAPEX.

The decrease in German Residential (-€137 million) was mainly due to CAPEX (+€43 million), partly offset by disposals for the half year (-€11 million), the change in fair value (-€45 million), the reclassification in inventories 

(-26 M€) and the impact of the rate following the partnership with CDC of a 49% stake in a Berlin portfolio of Covivio Berlin Prime (-€98 million).

The increase in the Hotels portfolio (+€505 million) was mainly driven by the reinforcement in Covivio Hotels (+505 M€), the increase in fair value (+€10 million), foreign currency exchange gain (+€10 million). Acquisition and Capex (+€12 million), offset by disposals (-€9 million), amortization of operating properties and other tangible assets (-€15 million).

1.3.5.2.Assets held for sale (included in the total fixed assets above), €318.4 million at the end of June 2024

Assets held for sale consist of assets for which a preliminary sales agreement has been signed.

        1.3.5.3.         Total Group shareholders’ equity

Shareholders’ equity increased from €7,957 million at the end of 2023 to €8,143 million at the end of June 2024, i.e. +€186 million, mainly due to:

Income for the period: -€8 million.

The dividend distribution: -€330.8 million, partially offset by option for payment in shares (+€255 million) and the the strengthening of Covivio Hotels (+€280 million).

The change in fair value of derivative instruments in OCI (Italy) -€3 million.

        1.3.5.4.        Net deferred tax liabilities

Deferred tax liabilities represent €648 million in liabilities at the end of June versus €650 million in 2023, Deferred tax assets represent €58 million in assets at the end of June versus €57 million in 2023. This €3 million variation is mainly due to the drop in appraisal values in Office

        1.3.6.         Simplified consolidated balance sheet (at 100%)

(In € million, 100%)

Assets

31 Dec. 23

30 Jun. 24

Liabilities

31 Dec. 23

30 Jun. 24

Investment properties

19,046

18,577

Investment properties under dev.

1,140

1,208

Other fixed assets

1,730

1,700

Equity affiliates

375

384

Financial assets

118

158

Shareholders' equity  

7,957

8,143

Deferred tax assets

72

67

Non-controlling interests 

4,006

3,726

Financial instruments

522

576

Shareholders' equity

11,963

11,869

Assets held for sale

327

521

Borrowings

10,707

11,056

Cash

901

1,336

Financial instruments

185

195

Inventory (Trading & Constr. activities)

308

290

Deferred tax liabilities

1,054

1,040

Other

488

644

Other liabilities

1,117

1,300

Total

25,026

25,460

Total

25,026

25,460

Germany (+€14.8 million), in Residential Germany (+€1.4 million), the changes in fair values and the sales in Italy Offices (-€2.6 million) and the increase in fair values of derivatives (-€1.4 million) and the rate variation following the increase in stake of Covivio Hotels (€-6.6 million). 


        1.4.        Financial resources

Summary of the financial activity

Covivio is rated BBB+ with a stable outlook by S&P, confirmed on May 7th, 2024.

Covivio’s Loan-to-Value (LTV) ratio was reduced to 40.3% (LTV policy < 40%), thanks to active portfolio rotation and despite value adjustments. Average rate of debt is at to 1.68%, thanks to a highly hedged debt. Maturity of debt remained stable to 4.9 years.

       1.4.1.        Main debt characteristics

Group share

31 Dec. 2023

30 Jun. 2024

Net debt, Group share (€ million)

6,925

7,007

Average annual rate of debt 

1.50%

1.68%

Average maturity of debt (in years)

4.9

4.9

Debt active average hedging rate

97.0%

95.0%

Average maturity of hedging (in years)

5.9

6.1

LTV including duties

40.8%

40.3%

ICR 

6.4x

6.1x

Net debt / EBITDA

12.3x

12.1x

The net available liquidity position increased to €2.5 billion on a Group share basis at end-June 2024, including €1.7 billion of undrawn credit lines and €1.0 billion of cash minor by €0.2 billion of Commercial Paper. This strong liquidity position enables to cover debt expiries until end of 2026.

        1.4.2.      Debt by type

Covivio's net debt stands at €7.0 billion in Group share at end-June 2024 (€9.8 billion on a consolidated basis), up by +€0.1 billion compared to end-2023. This is entirely due to the increased exposure to Covivio Hotels and the consolidation, on a Group share basis, of a higher part of Covivio Hotels’ debt.  

As regards commitments attributable to the Group, the share of corporate debt (bonds and loans) grows up to 62% on a Group share basis, at end-June 2024. Additionally, Covivio had €0.2 billion in commercial paper outstanding at 30 June 2024.


Debt by type

                  Consolidated commitments                                                                          Group share commitments

image

Debt by company

                   Consolidated commitments                                                                          Group share commitments

image 

        1.4.3.      Debt maturity

The average maturity of Covivio's debt stands at 4.9 years at end-June 2024. Until end of 2024, all major maturity has already been covered.

Debt maturity by type (in € million, Group share)

€2.5 bn net liquidity covers debt

1,720        expiries until end of 2026 

image

        1.4.4.      Hedging profile  

In H1 2024, debt was hedged at 97% on average (95% end of June), and 82% on average over the next three years, all of which with maturities equivalent to or exceeding the debt maturity.

The average term of the hedges is 6.1 years Group share.

Hedging maturities (in € billion, Group share)

image 

        1.4.5.      Debt ratios 

       1.4.5.1.        Financial structure

Excluding debts raised without recourse to the Group’s property companies, the debts of Covivio and its subsidiaries generally include bank covenants (ICR and LTV) applying to the borrower’s consolidated financial statements. If these covenants are breached, early debt repayment may be triggered. These covenants are established on a Group share basis for Covivio and Covivio Hotels. 

The most restrictive consolidated LTV covenants amounted, at 30 June 2024, to 60% for Covivio and Covivio Hotels.

The most restrictive ICR consolidated covenants applicable to the REITs, at 30 June 2024, are of 200% for Covivio and Covivio Hotels.

With       respect       to      Covivio      Immobilien        (German

Residential), for which almost all of the debt raised is "non-recourse" debt, portfolio financings do not contain LTV or ICR consolidated financial covenants.

Lastly, with respect to Covivio, some corporate credit facilities are subject to the following ratios:

Ratio

Covenant

30 June 2024

LTV

60.0%

 43.4%¹

ICR

2.00

6.06

Secured debt ratio

25.0%

4.2%  

1 Excluding duties and sales agreements

All covenants were fully complied with at end-June 2024. No loan has an accelerated payment clause contingent on Covivio’s rating.

        1.4.5.2.                 Detail of Loan-to-Value (LTV) calculation

(In € million Group share)

31 Dec. 2023

30 Jun. 2024

Net book debt

6,925

7,007

Receivables linked to associates (full consolidated)

-187

-193

Receivables on disposals

15

-45

Preliminary sale agreements

-224

-268

Purchase debt

33

42

Net debt 

6,562

6,544

Appraised value of real estate assets (Including Duties)

15,948  

16,129

Preliminary sale agreements

-224

-268

Financial assets

15

14

Receivables linked to associates (equity method)

68

72

Share of equity affiliates

260

286

Value of assets 

16,067

16,233

LTV Excluding Duties

43.0%

42.4%

LTV Including Duties

40.8%

40.3%

        1.4.6.         Reconciliation with consolidated accounts

       1.4.6.1.              Net debt

(In € million)

Consolidated accounts

Minority interests

Group share

Bank debt

11,056

-3,031

8,025

Cash and cash equivalents

1,336

-318

1,018

Net debt

9,720

-2,713

7,007

        1.4.6.2.             Portfolio

(In € million)

Consolidated accounts

Portfolio of companies under

the equity method 

Fair value of operating properties

Right of use

Other assets of investment

held for sale  properties

Minority interests

Group share

Investment & dev. properties

19,785

1,075

1,936

-23

-268

-7,440

15,065

Assets held for sale

521

-74

-133

314

Total portfolio

20,306

1,075

1,936

-97

-268

-7,572

15,380

(+) Duties

805

Portfolio group share including duties

16,184

(-) portfolio of companies consolidated under the equity method

-429

(+) Fair value of trading activities

+229

(+) Other operating properties

+146

Portfolio for LTV calculation

16,129

        1.4.6.3.                Interest Coverage Ratio (ICR)

(In € million)

Consolidated accounts

Minority interests

Group share

EBITDA (net rents (-) operating expenses (+) results of other activities)

442

155

287

Cost of debt

82

35

47

ICR

  

  

6.1x

        1.4.6.4.              Net debt / EBITDA

(In € million)

Group share

Net debt, Group share (€ million)

7,007

Adj. on borrowings from associates (on JVs)1

-155

Net debt

6,852

EBITDA (net rents (-) operating expenses (+) results of other activities) 2

287

Other adjustments3

-3

Prorata on a 12 months basis (half year only)

284

EBITDA

568

Net debt / EBITDA 

12.1x

Borrowings from associates are shareholder loans for which the Covivio Group could not be asked to repay. 

It includes dividends received from Equity method companies

Mainly IFRIC 21 adjustment related to Property Tax (in half year accounts only) 

        1.5.        EPRA Reporting

The following reporting was prepared in accordance with EPRA (European Public Real Estate Association) Best Practices Recommendations, available on EPRA website (www.epra.com). 

The German Residential information in the following sections includes some Office assets owned by the German Residential subsidiary Covivio Immobilien.

       1.5.1.         Change in net rental income (Group share)

€ million

H1 2023

Acquis.

Disposals

Development. (1)

Indexation, AM & occupancy

Others

H1 2024

   France Offices

78

0

-10

-3

8

-4

69

   Italy Offices (incl. retail)

44

0

-2

0

2

0

45

   German Offices

19

0

0

0

1

0

20

Offices

142

0

-12

-3

11

-4

134

German Residential

85

0

-1

0

2

1

88

Hotels (2)

52

0

0

0

2

7

61

Other (France Residential)

0

0

0

0

0

0

0

Total

279

0

-13

-3

15

3

282

(1) Deliveries & vacating for redevelopment || (2) Including Retail but excluding EBITDA from operating properties

The revenues LFL growth (including EBITDA from Hotels) is +6.5% in H1 2024.

€ million                                                                                                                      

H1 2024

Total from the table of changes in Net rental Income (GS)

282

Adjustments                                                                                                               

0

Total net rental income (Financial data § 1.3.3)                                               

282

Minority interests                                                                                                     

149

Total net rental income (Financial data § 1.3.4)                                               

431

        1.5.2.            Investment assets – Information on leases 

Annualized rental income corresponds to the gross amount of guaranteed rent for the full year based on existing assets at the period end, excluding any incentives.

                                                                                                              Market rental value on vacant assets

          Vacancy rate at end of period =                      image

                                                                                                   Contractual annualized rents on occupied assets

                                                                                                          + Market rental value on vacant assets

Market rental value on vacant assets

image

 EPRA vacancy rate at end of period = 

Market rental value on occupied and vacant assets

(€ million, Group share)

Gross  rental income (€m)

Net  rental  income (€m)

Annualised 

rents (€m)

Surface (m²)

Average  rent (€/m²)

Vacancy  rate (%)

ERV of spot vacant space (€m)

ERV of the whole portfolio (€m)

EPRA vacancy  rate (%)

  France Offices

78

69

204

1,135,979

230

5.0%

16

222

7.1%

  Italy Offices (incl. retail)

52

45

113

594,470

237

1.4%

2

119

1.4%

  German Offices

23

20

51

364,644

158

12.3%

9

63

14.3%

Offices

153

134

369

2,095,093

219

4.9%

26

403

6.5%

German Residential

97

88

190

2,825,995

106

1.0%

2

193

1.0%

Hotels in Europe (2)

62

61

139

n.c 

n.c 

138

Total (1)

312

282

698

4,921,088

215

2.9%

28

734

3.9%

(1) Including French residential and others || (2) incl. Retail & excl. EBITDA from operating properties

The vacancy rate (2.9%) is including secured areas for which lease will start soon, while the EPRA vacancy rate (3.9%) is spot, at 30 June 2024.

Average metric rents are computed on total surfaces, including land banks and vacancy on development projects.

        1.5.3.        Investment assets – Asset values

(€ million, Group share)

Market value

Change in fair value over the year

Duties

EPRA NIY

   France Offices

4,147

- 60

194

4.5%

   Italy Offices (incl. Retail)

2,462

- 29

84

4.3%

   German Offices

1,140

- 122

61

4.3%

Offices

7,749

- 211

339

4.4%

German Residential

4,542

- 45

325

3.5%

Hotels (incl. Retail)

3,084

10

103

5.7%

Other (France Resi. and car parks)

3

n.a. 

Total H1 2024

15,378

- 247

767

4.4%

The change in fair value over the year presented above excludes change in value of operating properties, hotel operating properties, and assets under the equity method. 

The EPRA net initial yield is the ratio of:

Annualized rental income

after deduction of outstanding benefits granted to tenants (rent-free periods, rent ceilings) 

                 EPRA NIY = 

image- unrecovered property charges for the year

                                                                                                    Value of the portfolio including duties

Reconciliation with financial data

€ million

H1 2024

Total portfolio value (Group share, market value)

15,378

Fair value of the operating properties

- 1,222

Fair value of companies under equity method

- 429

Other assets held for sale

4

Right of use on investment assets

149

Fair value of car parks facilities

- 3

Tangible fixed assets

83

Investment assets Group share 1 (Financial data§ 1.3.5)

13,960

Minority interests

6,345

Investment assets 100% 1  (Financial data§ 1.3.5)

20,306

1 Fixed assets + Developments assets + asset held for sale

Reconciliation with IFRS

€ million

H1 2024

Change in fair value over the year (Group share)

- 247

Others

Income from fair value adjustments Group share (Financial data § 1.3.3)

- 247

Minority interests

- 56

Income from fair value adjustments 100% (Financial data § 1.3.3)

- 302

                 


      1.5.4.          Assets under development

% Own.       Fair                 Capitalised Own.

                                                                  (Group   value              fin. exp. type

                                                           share)        H1’24                     (H1’24)

Total cost 1                                                                                                                                                                                                                                                                                           2

                                %         Delivery              Surface at                                               Yield

(€m, Group                                                                                                Pre-letting

                      progress                 date              100% (m²)                                                 (%)

share)


image

Meudon Thalès 2

FC 3

100%

31

0

213

18%

2026

38,000 m²

100%

7.9%

Paris Grands Boulevards

FC 

100%

99

0

153

11%

2027

7,500 m²

0%

4.5%

Paris Monceau

FC 

100%

170

1

249

17%

2025

11,200 m²

0%

4.4%

Total France Offices

299

2

615

16%

56,700 m²

49%

5.6%

The Sign D

FC 

100%

44

0

76

75%

2024

13,200 m²

92%

6.1%

Corte Italia

FC 

100%

125

1

125

58%

2025

25,700 m²

100%

5.9%

Rozzano - Strada 8

FC 

100%

33

0

44

87%

2024

12,100 m²

58%

7.9%

Symbiosis G+H

FC 

100%

111

1

198

51%

2025

38,000 m²

100%

6.4%

Total Italy Offices

313

3

443

61%

89,000 m²

93%

6.3%

Düsseldorf Icon

FC 

94%

176

1

235

14%

2025

55,700 m²

60%

5.5%

Berlin Alexanderplatz

FC 

55%

130

3

343

34%

2027

60,000 m²

0%

4.5%

Total German Offices

305

4

578

26%

115,700 m²

27%

4.9%

Total

918

9

1,635

32%

261,400 m²

56%

5.6%

1 Total cost including land and financial cost || 2 Yield on total cost || 3 FC: Full consolidation¨

Reconciliation with total committed pipeline

(€M, Group share)

Capitalised fin. expenses over the year

Total cost incl. fin. cost (Group share)

Projects fully consolidated

9

1,635

Others (Loft)

0

26

Offices Committed pipeline (Business Analysis § 1.1)

9

1,661

Reconciliation with financial data

                          

H1 2024

Total fair value of assets under development                                                                                                              

918

Project under technical review and non-committed projects

155

Assets under development (Financial data § 1.3.5)

1,072

        1.5.5.       Information on leases

                                                                                                      Lease            expiration by date                 of 1st exit option

Annualised rental income of leases expiring

  

Firm residual lease term (years)

Residual lease term (years)

N+1

N+2

N+3 to 5

Beyond

Total (€m)

Section

France Offices

4.7

5.5

6%

20%

28%

46%

204

Italy Offices (incl. retail)

5.9

6.3

2%

6%

31%

60%

113

Germany Offices

3.9

4.3

13%

26%

26%

34%

51

Offices

5.0

5.6

6%

17%

29%

48%

369

1.2 

Hotels (incl. retail)

11.7

13.5

3%

2%

5%

90%

139

1.2 

Others 2

n.a 

n.a 

n.a

n.a

n.a

n.a

231

Total [6]

6.8

7.7

3%

9%

15%

72%

739

  

        1.5.6.        EPRA net initial yield

The data below shows detailed yield rates for the Group and the transition from the EPRA topped-up yield rate to Covivio’s yield rate. 

•       EPRA topped-up net initial yield is the ratio of:

                                                                                                                                      Annualized rental income

after expiration of outstanding benefits granted to tenants (rent-free periods, rent ceilings) - unrecovered property

                                                                                                                                         charges for the year

EPRA Topped-up NIY =           image     Value of the portfolio including duties

•       EPRA net initial yield is the ratio of:

Annualized rental income

                                                                                      after deduction of outstanding benefits granted to tenants (rent-free periods, rent ceilings) - unrecovered

property charges for the year

imageEPRA NIY =            -                 

Value of the portfolio including duties

(€ million, Group share)

Excluding French Residential and car parks

Total 2023

France Offices

Italy Offices

German

Offices

German

Resid.

Hotels

(incl. retail)

Total H1 2024

Investment, disposable and operating  properties

15,076

4,147

2,462

1,140

4,542

3,084

15,375

Restatement of assets under development

- 1,007

- 358

- 352

- 333

- 18

- 1,061

Restatement of undeveloped land and other  assets under development

- 295

- 209

- 115

- 39

- 38

- 402

Duties

773

194

84

61

325

103

767

Value of assets including duties (1)

14,547

3,773

2,079

829

4,849

3,149

14,679

Gross annualised IFRS revenues

668

185

104

40

189

182

701

Irrecoverable property charge

- 54

- 17

- 14

- 5

- 17

- 2

- 55

Annualised net revenues (2)

614

168

90

36

172

180

646

Rent charges upon expiration of rent free  periods or other reductions in rental rates

32

19

8

5

- 0

32

Annualised topped-up net revenues (3)

645

187

98

41

172

180

678

EPRA Net Initial Yield (2)/(1)

4.2%

4.5%

4.3%

4.3%

3.5%

5.7%

4.4%

EPRA "Topped-up" Net Initial Yield (3)/(1)

4.4%

5.0%

4.7%

5.0%

3.5%

5.7%

4.6%

Transition from EPRA topped-up NIY to Covivio yield

Impact of adjustments of EPRA rents                                                                                  0.4%

0.5%

0.7%

0.2%

0.4%

0.1%

0.4%

Impact of restatement of duties                                                                                           0.3%

0.3%

0.2%

0.4%

0.3%

0.2%

0.3%

Covivio reported yield rate                                                                                                     5.1%

5.7%

5.6%

6.0%

4.2%

6.0%

5.3%

        1.5.7.         EPRA cost ratio

(€million, Group share)

H1 2023

H1 2024

Unrecovered Rental Cost

-15.0

- 16.6

Expenses on properties

- 10.6

- 10.0

Net losses on unrecoverable receivables

-0.7

- 0.3

Other expenses

- 1.9

- 1.3

Overhead

- 49.9

- 50.0

Amortisation, impairment, and net provisions

2.1

3.2

Income covering overheads

12.3

12.9

Cost of other activities and fair value

-2.5

- 2.7

Property expenses

- 0.3

- 0.5

EPRA costs (including vacancy costs) (A)

- 66.5

- 65.2

Vacancy cost

10.9

9.7

EPRA costs (excluding vacancy costs) (B)

- 55.6

- 55.5

Gross rental income less property expenses

308.0

312.2

EBITDA from hotel operating properties & coworking,  income from other activities 

36.4

35.2

Gross rental income (C)

344.4

347.5

EPRA costs ratio (including vacancy costs) (A/C)

-19.3%

-18.8%

EPRA costs ratio (excluding vacancy costs) (B/C)

-16.2%

-16.0%

        1.5.8.         Adjusted EPRA Earnings: growing to €230.8 million 

(€million)

H1 2023

H1 2024

Net income Group share (Financial data §3.3)

- 689.7

- 8.4

Change in asset values

928.3

246.7

Income from disposal

2.7

- 1.4

Acquisition costs for shares of consolidated companies

0.8

0.3

Changes in the value of financial instruments

29.4

- 15.5

Interest charges related to finance lease liabilities (leasehold > 100 years)

2.3

2.4

Rental costs (leasehold > 100 years)

- 1.6

- 1.5

Deferred tax liabilities

- 87.7

- 10.3

Taxes on disposals

0.7

- 0.2

Adjustment to amortisation & provisions

12.6

17.1

Adjustment to write-off of null and void provision

- 3.2

Adjustments from early repayments of financial instruments

0.2

0.8

Adjustment IFRIC 21

3.1

3.7

EPRA Earnings adjustments for associates

25.5

- 2.9

Adjusted EPRA Earnings (B)

223.4

230.8

Adjusted EPRA Earnings in €/share (B)/(C)

2.36

2.24

Promotion margin 

- 2.0

- 8.6

EPRA Earnings (A)

221.4

222.3

EPRA Earnings in €/share (A)/(C)

2.33

2.16

Average number of shares (C)

94,838,980

102,962,700

        1.5.9.          EPRA NRV, EPRA NTA and EPRA NDV 

  

2023

H1 2024

Change

Change (%)

EPRA NRV (€ m)

9,327

9,511

183

+2.0%

EPRA NRV / share (€)

92.6

85.4

- 7.2

-7.8%

EPRA NTA (€ m)  

8,470

8,662

191

+2.3%

EPRA NTA / share (€)

84.1

77.7

- 6.3

-7.5%

EPRA NDV (€ m)  

8,401

8,668

267

+3.2%

EPRA NDV / share (€)

83.4

77.8

- 5.6

-6.7%

Number of shares

100,758,774

111,407,445

10,648,671

+10.6%

       1.5.9.1.                  Reconciliation between shareholder’s equity and EPRA NAV

  

2023 (€m)

€ per share

H1 2024 (€m)

€ per share

Shareholders’ equity

7,957

79.0

8,143

73.1

Fair value assessment of operating properties

175

210

Duties

807

805

Financial instruments and ORNANE

- 235

- 275

Deferred tax liabilities

623

628

EPRA NRV

9,327

92.6

9,511

85.4

Restatement of value Excluding Duties on some assets

- 773

- 767

Goodwill and intangible assets

- 68

- 69

Deferred tax liabilities  

- 16

- 13

EPRA NTA

8,470

84.1

8,662

77.7

Optimization of duties

- 34

- 38

Intangible assets

18

18

Fixed-rate debts1

318

366

Financial instruments and ORNANE   

235

275

Deferred tax liabilities   

- 607

- 615

EPRA NDV

8,401

83.4

8,668

77.8


1 Excluding credit spread impact of +7M€

Valuations are carried out in accordance with the Code of conduct applicable to SIICs and the Charter of property valuation expertise, the recommendations of the COB/CNCC working group chaired by Mr Barthès de Ruyter and the international plan in accordance with the standards of the International Valuation Standards Council (IVSC) and those of the Red Book of the Royal Institution of Chartered Surveyors (RICS).

The real estate portfolio held directly by the Group was valued on 30 June 2024 by independent real estate experts such as Cushman, REAG, CBRE, HVS, JLL, Savills, BNPP Real Estate, MKG and CFE. This did not include:

•       assets on which the sale has been agreed, which are valued at their agreed sale price;

•       assets owned for less than 75 days, for which the acquisition value is deemed to be the market value.

Assets were estimated at values excluding and/or including duties, and rents at market value. Estimates were made using the comparative method, the rent capitalisation method and the discounted future cash flow method.

Other assets and liabilities were valued using the principles of the IFRS standards on consolidated financial statements. The application of fair value essentially concerns the valuation of debt coverages.

For companies co-owned with other investors, only the Group share was considered.

1.5.9.2.    Fair value assessment of operating properties

In accordance with IFRS, operating properties are valued at historical cost. To take into account the appraisal value, a €210 million value adjustment was recognised in EPRA NRV, NDV, NTA related to: 


•       co-working and operating hotel properties for

€160 million

•       own-occupied buildings for €47milli on

•       car parks for €3 million

1.5.9.3.    Fair value adjustment for fixed-rate debts

The Group has taken out fixed-rate loans (secured bond and private placement). In accordance with EPRA principles, EPRA NDV was adjusted for the fair value of fixed-rate debt. The impact is +€366 million at 30 June 2024.

1.5.9.4.Recalculation of the base cost excluding duties of certain assets

When a company, rather than the asset that it holds, can be sold, transfer duties are re-calculated based on the company’s net asset values (NAV). The difference between these re-calculated duties and the transfer

1.5.10. Capex by type 

duties already deducted from the value had an impact of €38 million at 30 June 2024.

        1.5.9.5.        Deferred tax liabilities

The EPRA NTA assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax.

For this purpose, the Group uses the following method:

•       Offices: takes into account 50% of deferred tax considering the regular asset rotation policy,

•       Hotels: takes into account deferred tax on the non-core part of the portfolio, expected to be sold within the next few years,

•       Residential: includes the deferred tax linked to the building classified as Assets available held for sale, considering the low level of asset rotation in this activity.


€ million

H1 2023

H1 2024

  

100%

Group share

100%

Group share

Acquisitions 1

Developments

113

83

101

89

Investment Properties

82

58

101

71

Capitalized               expenses        on         development

(except under equity method)  

portfolio

2

23

20

16

14

Total

218

160

219

174

1                     Acquisitions including duties

2                     Financial expenses capitalized, commercialization fees and other capitalized expenses

The €89 million group share of Development Capex green capex to enhance the value on strategic relates to renovation expenses on development offices; 

projects (excluding properties under equity method and

•         €3 million of modernisation Capex on hotels, with assets under operation but including Capex on assets the aim to improve the quality of assets and benefit delivered over the year until delivery date).  from increased revenues and performance,

The €71 million group share of CAPEX on Investment

Properties is mainly composed of:                                                               •                €40 million of modernization & maintenance Capex

on German Residential of which 54% modernization,

•         €26 million on offices including tenant improvement,                 generating revenues.

       1.5.11.     EPRA LTV 

The following table is published in line with EPRA recommendations.

EPRA LTV 

30 June. 2024

  

Group as reported

Proportionate Consolidation

  

Combined

  

Share of Joint 

Ventures

          Share of Material                  Non-controlling

                   Associates                                Interests

(€ million, Group share)

Include: 

Borrowings from Financial Institutions 

5,473

182

                                                                   -2,162

3,493

Commercial paper

359

                                                                      -147

212

Hybrids (including Convertibles,  preference shares, debt, options,  perpetuals)

-

-

Bond Loans

4,944

                                                                      -688

4,256

Foreign Currency Derivatives (futures,  swaps, options and forwards)

0

Net Payables

82

                                                                         -70

12

Owner-occupied property (debt)

0

Current accounts (Equity characteristic)

0

Exclude: 

Cash and cash equivalents

1,336

34

                                                                      -335

1,035

Net Debt (a) 

9,522

148

                                                                   -2,733

6,938

Include: 

Owner-occupied property

1,988

10

                                                                        733

1,265

Investment properties at fair value 

18,309

460

                                                                    6,118

12,651

Properties held for sale

507

-

                                                                        193

314

Properties under development 

1,208

-

                                                                        136

1,072

Intangibles 

-

-

                                                                              -

-

Net Receivables

-

9

                                                                             4

5

Financial assets

420

-

                                                                        127

293

Total Property Value (b)

22,432

479

                               0                                   7,311

15,600

Real Estate Transfer Taxes

1,152

                                                                        347

805

Total Property Value (incl. RETTs) (c)

23,584

479

                               0                                  -7,657

16,406

  

LTV (a/b)                                                                                                                              42.4%                                                                                                   

  

44.5%

LTV (incl. RETTs) (a/c) (optional)                                                                                    40.4%                                                                                                   

  

42.3%

Including preliminary agreements still to be cashed in, EPRA LTV (excluding transfer taxes) would go down to 43.4%. 

EPRA LTV

44.5%

Duties

-2.1%

Preliminary Agreements

-1.0%

Other effects (including conso. restatements)

-1.1%

LTV including duties

40.3%

       1.5.12.        EPRA performance indicator reference table

EPRA information

Section

in %

Amount in €

Amount in €/share

EPRA Earnings

1.3.3.

-

€222.3 m

€2.16 /share

Adjusted EPRA Earnings

1.3.3.

-

€230.8 m

€2.24 /share

EPRA NRV

1.5.9.

-

€9,511 m

€85.4 /share

EPRA NTA

1.5.9.

-

€8,662 m

€77.7 /share

EPRA NDV

1.5.9.

-

€8,668 m

€77.8 /share

EPRA net initial yield

1.5.6

4.4%

-

-

EPRA topped-up net initial yield

1.5.6

4.6%

-

-

EPRA vacancy rate at year-end

1.5.2

3.9%

-

-

EPRA costs ratio (including vacancy costs)

1.5.7

-18.8%

-

-

EPRA costs ratio (excluding vacancy costs)

1.5.7

-16.0%

-

-

EPRA LTV

1.5.11

44.5%

EPRA indicators of main subsidiaries

1.6.

-

-

-

        1.6.          Financial indicators of main activities 

                                                                                         Covivio Hotels                                                                                                Covivio Immobilien

  

31 Dec. 23

30 Jun. 24

Change (%)

31 Dec. 23

30 Jun. 24

Change (%)

EPRA Earnings in M€  (half year)

112.1

119.5

+6.6%

78.2

76.0

-2.9%

EPRA NRV

3,915

3,852

-1.6%

4,756

4,649

-2.2%

EPRA NTA

3,550

3,505

-1.3%

4,262

4,156

-2.5%

EPRA NDV

3,512

3,472

-1.1%

3,682

3,582

-2.7%

% of capital held by Covivio

43.9%

52.5%

+8.7 pts

61.7%

61.7%

-

LTV including duties

34.4%

36.1%

+1.7 pt

35.2%

35.1%

-0.1 pt

ICR

5.4x

5.9x

+0.6x

4.5x

4.1x

- 0.4x

image
image 

imageRisks 

and uncertainties


2. RISKS AND UNCERTAINTIES

As part of its risk management, Covivio carries out a detailed annual review of the risks to which it is exposed. Its results and the action plans defined to improve risk management are shared with the Audit Committee and the Board of Directors. Covivio invites its readers to refer to chapter 2 of its Universal Registration Document (URD) 2023, which presents the main risks and control measures in place.

Risks are rated on the basis of a combined analysis of their potential negative impact (on the Group's valuation, results, image and/or business continuity) and the likelihood of their occurrence. Once quantified, the gross impact and probability are adjusted for the control measures in place to determine the net risk.

Following this risk review, the following risks were significantly impacted in the first half of the year and could continue to do so in the second half of the year, via an increase/decrease in their net impact and/or their net probability. The mechanisms for managing these risks (unchanged) are described in the URD 2023 available on the Covivio website. To date, the other risks have not changed significantly. 

2.1.            Risks relating to the environment in which Covivio operates

In addition, Covivio's investment in Covivio Hotels in the first half of the year increased its exposure to the hotel sector, whose more specific risks are included in the 2023 URD and were reviewed in mid-2024, as were the other risks.


Unfavourable trend in the property market:   

slower decline in values 

Values

Covivio's total assets at end-June 2024 (€25.5 billion in consolidated figures) consisted mainly of the appraised value of its properties, which amounted to €23.0 billion (almost 90%). Covivio recognises its investment properties at fair value, in accordance with the option offered by IAS 40. This means that any change in the value of the properties has a direct impact on the balance sheet total.

The value of Covivio's assets depends on developments in the property markets in which the company operates. Both rental levels and market prices (and consequently the capitalisation rates used by the experts) may be subject to fluctuations linked to the economic and financial environment.

A reduction in appraised values is likely to affect the value of Covivio's Net Asset Value and, possibly, the valuation of its share price.

For information purposes, the table below shows the sensitivity of asset valuation to rates of return on assets in operation:

                                                                                                                                                                                                            Rates

1                                               Yield[7]              Yield1 In € million                Yield

                                                                                                                                                          - 25 bps                                             + 25 bps

France Offices

5.7%

185.0

- 168.3

Italy Offices

5.6%

105.4

- 96.3

Offices Germany

5.9%

32.7

- 30.0

Hotels in Europe

6.0%

203.2

- 186.6

Residential Germany

4.2%

462.6

- 410.5

TOTAL

5.3%

989.0

- 891,8

Over the first half of 2024, the value of the portfolio fell by 1.3% on a like-for-like basis. This decline was particularly marked in the office portfolio (-2.6%), while the hotel portfolio increased in value by 0.5% in the first half, and the residential portfolio in Germany remained stable over the same period on a like-for-like basis. It should be noted that compared with last year (-5.5% in the first half of 2023 and -10.2% over the full year 2023), this fall is significantly lower and could mark a slowdown or even a halt over the coming months, subject to an otherwise unchanged environment.    

        2.2.       Financial risks

Unfavourable rate movements  

Borrowings

Annual inflation in the Eurozone stood at 2.5% in June 2024. A year earlier, it was 5.5%. This significant change enabled the European Central Bank (ECB) to cut its key rate for the first time since the end of 2019. It has stood at 4.25% since 12 June 2024 and had previously been 4.50% since 20 September 2023.

When new debt is issued or renewed, Covivio is directly impacted by these key rates. The average rate on Covivio's debt at 30 June 2024 was 1.68%, compared with 1.50% at the end of 2023. This increase is expected to continue due to the financing maturities of recent years and those to come, as well as higher interest charges on its share of unhedged debt. The average hedging rate is 95%, with a hedging maturity of 6.1 years, which is longer than the debt maturity of 4.9 years at 30 June 2024. More generally, Covivio could be limited in its ability to implement its short/medium-term investment strategy.

A 50bps increase in interest rates would have a negative impact of €1.786m on the cost of net debt at 30 June 2024.

A 50-bps reduction in interest rates would have an impact of €1.911m on the cost of net debt at 30 June 2024.

An increase in interest rates of 100bps at 30 June 2024 would have a negative impact of €3.524m on the cost of net debt at 30 June 2024.


imageimage
 

imageCondensed  consolidated financial statements at 30 June 2024

3. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2024

       3.1.           Condensed consolidated financial statements at 30 June 2024

3.1.1.

Assets

Statement of Financial position

30 June 24

116,527

19,043

  

1,470,904

38,738

54,780

19,784,838

158,500

384,075

66,602

415,976

22,509,982

520,713

41,712

289,813

159,839

457,894

25,159

102,741

16,266 1,335,818

2,949,955

25,459,937

imageimageimageimageNote

(In € thousand) 31 June 23

3.2.5.

INTANGIBLE ASSETS                                                                                                                                                       1.2                                                                           

Goodwill                                                                                                                                                                                                                                                                                                  117,356 

Other intangible fixed assets                                                                                                                                                                                                                                                               19,249 

TANGIBLE ASSETS                                                                                                                                                           1.2                                                                           

Operating properties     1,468,098  Other tangible fixed assets     39,978 

Fixed assets in progress                                                                                                                                                                                                                                                                         85,363 

Investment properties  1.3   20,186,471  Non-current financial assets  2.2   117,782 

Investments in companies accounted for under the equity method                                                              3.2                                                                                                                  374,918 

Deferred tax assets                                                                                                                                                           4                                                                                                                     72,315 

Long-term derivative instruments                                                                                                                           11.4                                                                                                                360,430 

image                                                                     image

Assets held for sale                                                                                                                                                        1.3                                                                                                                326,649 

Loans and receivables                                                                                                                                                      5                                                                                                                    40,589 

Inventories and work-in-progress  6.2   307,526  Short-term derivative instruments  11.4   161,652 

Trade receivables                                                                                                                                                              7                                                                                                                322,956 

Tax receivables                                                                                                                                                                                                                                                                                         29,476 

Other receivables                                                                                                                                                              8                                                                                                                    88,395 

Prepaid expenses                                                                                                                                                                                                                                                                                       6,337 

Cash and cash equivalents                                                                                                                                              9                                                                                                                900,619 

Liabilities

image

        3.1.2.          Statement of net income

30 June 24

469,326 

-23,457 

-14,017  -544 

431,308

38,688

11,394

9,388 

-1,877  -62,450 

-54,940

-35,081  9,258 

400,628

-1

3,021

-302,451

-581

-632

99,984

-81,881 

-8,122 

36,526 

408 

-1,521 

16,594 

61,988

7,187 

-8,395 

60,781

69,144 

-8,364

-0.08 

-0.08 

imageimageimageimageimageimageimageimageNote 

(In € thousand) 30 June 23

3.2.

 Rental income                                                                                                                                                                                            6.2.1                                                                                   463,144 

 Unrecovered property operating costs                                                                                                                                              6.2.2                                                                                   -20,432 

 Expenses on properties                                                                                                                                                                          6.2.2                                                                                    -14,849 

 Net losses on unrecoverable receivables                                                                                                                                           6.2.2                                                                                       -1,635 

 Management and administration income                                                                                                                                                                                                                                           9,930 

 Business expenses                                                                                                                                                                                                                                                                                    -2,646 

 Overheads                                                                                                                                                                                                                                                                                                -63,195 

image                                                   image

 Depreciation of operating assets                                                                                                                                                         6.2.5                                                                                     -34,787 

 Net change in provisions and other                                                                                                                                                    6.2.5                                                                                        15,716 

  Cost of the net financial debt                                       6.7                                          -85,736    Interest cost for rental liabilities                                          5.11.5                                    -7,831 

  Value adjustment on derivatives                                                                                                                                                            6.8                                                                                     -29,229 

  Discounting and foreign exchange gains or losses                         6.8                                          366    Exceptional amortisation of loan issue costs                         6.8                                          -351 

  Share of income from companies accounted for under the equity method                                                                           5.3.2                                                                                     -13,304 

image                                                    image

  Deferred taxes                                                                                                                                                                                          6.9.2                                                                                    137,554 

  Corporate taxes                                                                                                                                                                                        6.9.2                                                                                     -16,579 

Group net earnings per share (in €)                                                                                                                                                         7.2                                                                                          -7.27

Group diluted net earnings per share (in €)                                                                                                                                          7.2                                                                                          -7.23

        3.1.3.           Statement of comprehensive income

         30 June 24

60,781

-5,658 

-7,334 

748 

-12,244 

-12,244 

48,537 

-15,747  64,283 

imageimage(In € thousand)                                                                                                                                                                                                                                                                                               30 June 23

image                                                  image

Currency translation differences                                                                                                                                                                                                                                                                      10,193 

Of which effective portion of gains or losses on hedging instruments                                                                                                                                                                                                   -2,330 

Deferred tax on recyclable items                                                                                                                                                                                                                                                                           237 

Other comprehensive income that can be reclassified to profit or loss 8,100 

Actuarial differences on employee benefits                                                                                                                                                                                                                                                           

Deferred tax on non-recyclable items                                                                                                                                                                                                                                                                  -408 

Other comprehensive income that cannot be reclassified to profit or loss -408 

OTHER ITEMS OF COMPREHENSIVE INCOME                                                                                                                                                                                                                                                 7,692 

image                                                  image

of which attributable to owners of the parent company      -686,441  of which attributable to non-controlling interests      -210,475 

                 

        3.1.4.            Statement of changes in shareholders’ equity

image

        3.1.5.          Statement of cash flows

image

        3.2.             Notes to the condensed consolidated financial statements


        3.2.1.       General principles

       3.2.1.1.               Accounting standards

The condensed consolidated financial statements of the Covivio group at 30 June 2024 were prepared in accordance with IAS 34 “Interim Financial Reporting”.

They do not include all of the information required under IFRS guidelines and must be read in conjunction with the annual financial statements of the Covivio group for the fiscal year ending 31 December 2023.

The financial statements were approved by the Board of Directors on 19 July 2024.

Accounting principles and methods used

The accounting principles applied for the condensed consolidated financial statements as at 30 June 2024 are identical to those used for the consolidated financial statements as at 31 December 2023, except for new standards and amendments whose application was mandatory on or after 1 January 2024 and which were not applied early by the Group.

The following amendments, which are mandatory as of 1 January 2024, did not have any impact on the Group’s consolidated financial statements:

•       Amendments to IAS 1 “Presentation of financial statements - Classification of liabilities as current or non-current”. Non-current liabilities with covenants. These amendments specify how a company must classify, in the statement of financial position, debts and other liabilities whose settlement date is uncertain. According to these amendments, these debts or other liabilities must be classified as either current or non-current liabilities. The application of these amendments did not lead to significant changes in the presentation of the half-year financial statements.

•       Amendments to IFRS 16 “Sale and leaseback transactions”. The IFRS-IC has published a decision illustrating the application of IFRS requirements to the initial recognition of a sale-leaseback with variable rents. This amendment complements the previous IFRIC decision. The application of these amendments did not lead to significant changes in the presentation of the half-year financial statements.

•       Amendment to IAS 7 & IFRS 7 "Supplier Financing Arrangements". These changes introduced requirements for disclosures by a company about its supplier financing arrangements. These new requirements require the company to provide users with financial statements to assess the impact of its supplier financing arrangements on its liabilities and cash flows and to understand the effects of such arrangements on its exposure to liquidity risk and the manner in which it could be affected if it were no longer able to use these agreements. The application of these amendments did not lead to significant changes in the presentation of the halfyear financial statements.

        3.2.1.2.               Estimates and judgments

The financial statements have been prepared in accordance with the historic cost convention, with the exception of investment properties and certain financial instruments, which were recognised in accordance with the fair value convention. In accordance with the conceptual framework for IFRS, preparation of the financial statements requires making estimates and using assumptions that affect the amounts shown in these financial statements. 

The significant estimates made by the Covivio group in preparing the financial statements mainly relate to:

•       The valuations used for testing impairment, in particular assessing the recoverable value of goodwill and intangible fixed assets;

•       measurement of the fair value of investment properties;

•       assessment of the fair value of derivative financial instruments;

•       measurement of provisions.

Due to the uncertainties inherent in any valuation process, the Covivio group reviews its estimates based on regularly updated information. These estimates take into account, where applicable, the financial impacts of commitments made by the Group on the effects of climate change (note 3.2.1.3 to the consolidated financial statements). The future results of the transactions in question may differ from these estimates.

In addition to the use of estimates, Group management makes use of judgements to define the appropriate accounting treatment of certain business activities and transactions when the IFRS standards and interpretations in effect do not precisely address the accounting issues involved.

3.2.1.3.Taking into account the effects of climate change

In 2021, Covivio announced a new carbon trajectory and raised its ambitions to achieve a 40% reduction in greenhouse gas emissions from 2010 to 2030. This objective, which concerns all Scopes 1, 2 and 3, covers all activities in Europe and the entire life cycle of assets: materials, construction, restructuring and operation. In addition, Covivio is aiming for Net Zero Carbon from 2030 on its Scopes 1 and 2. To better report the financial effects of implementing its climate strategy, Covivio assessed in 2022 the amount necessary to invest in its assets by 2030, which amounts to €254 million.  

Covivio continued its momentum in terms of environmental certification: the proportion of the portfolio with HQE, BREEAM, LEED or equivalent certification, operating and/or under construction, reached 95.9% at 30 June 2024, in line with the objective of 100% by the end of 2025. 

It has been accompanied for more than ten years by a strengthened commitment to the construction and renovation of buildings. This strategy actively contributes to achieving the new carbon trajectory in Europe. In addition, in accordance with European Regulations, Covivio published its eligibility and alignment rates for the second year of application of the Taxonomy Regulation (Chapter 3 “Statement of Non-Financial Performance” of the Universal Registration Document), including this year the Biodiversity objective for the hotel operating activity

(eligibility only).

Covivio has strengthened its commitment to incorporating ESG criteria into its operations and

        3.2.1.4.               IFRS7 – Reference table

development by putting a “Say On Climate” resolution to its shareholders. This resolution, which takes into account the current climate plan for 2030 approved by the Board of Directors in 2021 and 2022, was approved by more than 94% of shareholders at the 2023 General Meeting. In 2024, Covivio submitted to the vote of its shareholders the inclusion of its purpose in its bylaws. In this way, Covivio is giving fresh impetus to its ambitions for more sustainable and responsible real estate. 

In addition, for its financing, Covivio has requalified 100% of its bonds as green bonds following the publication of its new Sustainable Bond Framework in 2022. This document specifies the environmental criteria used to select eligible assets, including the European taxonomy criteria. Continuing along these lines, Covivio Hotels, a 52.5%-owned listed subsidiary, has adopted a Green Financing Framework and has reclassified all its bond issues as green bonds. At the end of 2023, Covivio and Covivio Hotels had respectively an eligible portfolio of €6 billion and €3.9 billion (€5.3 billion and €2.9 billion net of debt), thus covering the €4.4 billion of bonds of the two entities.

Finally, in order to better understand the risks and opportunities related to climate change, Covivio publishes each year a report incorporating the recommendations of the TCFD (Taskforce on Climate Financial related Disclosures) and regularly conducts climate resilience analyses of its portfolio. In June 2023, the Group published its second Climate Report, available on its website. 

The inclusion of the effects of climate change had no material impact on the judgements made and the main estimates required to prepare the financial statements.


Liquidity risk

§ 3.2.2.2.

Sensitivity of financial expenses

§ 3.2.2.3.

Credit risk

§ 3.2.2.4.

Market risk

§ 3.2.2.6.

Foreign exchange risk

§ 3.2.2.7.

Sensitivity of the fair value of investment properties

§ 3.2.5.1.5.

Covenants

§ 3.2.5.11.6.

        3.2.2.        Financial risk management

The operating and financial activities of the company are exposed to the following risks:

3.2.2.1.            Marketing risk for properties under development

The Group is involved in property development. As such, it is exposed to a number of different risks, particularly risks associated with construction costs, completion delays and the marketing of properties. These risks can be assessed in light of the development portfolio (see Section 4.2.5.1.4).

        3.2.2.2.             Liquidity risk

Liquidity risk is managed in the medium and long term with multi-year cash management plans and, in the short term, by using confirmed and undrawn lines of credit. At 30 June 2024, the Covivio group’s available cash and cash equivalents amounted to €3,370 million, including €1,931 million in confirmed unused credit lines (€1,767 million in Group Share), €1,336 million in cash and cash equivalents and €103 million in unused overdraft facilities.

The graph below summarises the maturities of borrowings (in € million) existing as at 30 June 2024:

                                                                                 image Emprunts     image NEU CP     image Intérêts

image

         2024              2025              2026              2027              2028              2029              2030              2031              2032         2033 et plus


The maturities at less than one year in the graph above include €359 million NEU Commercial Paper.

The amount of interest payable until the maturity of the debt, estimated on the basis of the outstanding amount at 30 June 2024 and the average interest rate on debt, totalled €884 million.

Details of the debt maturities are provided in note 3.2.5.11.3, and a description of the banking covenants and accelerated payment clauses included in the loan agreements is presented in note 3.2.5.11.6.

During the first half of 2024, Covivio secured €1.1 billion in refinancing or new financing. 

In its international office segment, Covivio refinanced the mortgage debt of its portfolio in Italy for €290 million with a pool of French and Italian banks. In Germany, the Group also negotiated the extension for two years of the mortgage financing of an office building in Hamburg.

Covivio Hotels has been active in managing its longterm liquidity with the issuance of a 9-year bond for

€500 million to secure the refinancing of its 2025 bond and the partial repayment of medium-term debt maturities. The refinancing of its Spanish portfolio was also secured for €229 million with a maturity of seven years.

In German Residential, two portfolios were refinanced for a total amount of €164 million with an average maturity of 10 years. 

During the first half of 2024, Covivio significantly increased its share of debt anchored to ESG criteria to 61% at June 2024.

        3.2.2.3.             Interest rate risk

The Group’s exposure to the risk of changes in market interest rates is linked to its floating rate and long-term financial debt.

To the extent possible, bank debt is primarily hedged via financial instruments (see note 4.2.5.11.4). At 30 June 2024, after taking interest rate swaps into account, approximately 97% of the Group’s debt was hedged, and the bulk of the remainder was covered by interest rate caps. 

The impact in the annual financial statements of the sensitivity of interest rates would be as follows: 

Interest rate                      Interest rate                         Interest rate  In € thousand - Group Share                 +100bps at 30 June            +50bps at 30 June              -50bps at 30 June

image2024                                                                                                                                                                                                                                                       2024                                                   2024

        3.2.2.4.              Financial counterparty risk

Given the Covivio group’s contractual relationships with its financial partners, the company is exposed to counterparty risk. If any of its counterparties is not in a position to honour its commitments, the Group’s income could suffer an adverse effect.

This risk primarily involves the hedging instruments subscribed by the Group and which would have to be replaced by a hedging transaction at the current market rate in the event of a default by the counterparty.

The counterparty risk is limited by the fact that Covivio group is a borrower from a structural standpoint. The risk is therefore mainly restricted to the investments made by the Group and to its counterparties in derivative product transactions. The company continually monitors its exposure to financial counterparty risk. The company’s policy is to deal only with top-tier counterparties, while diversifying its financial partners and its sources of funding.

The counterparty risk in terms of hedging is included in the valuation of IFTs and amounted to -€11.3 million at 30 June 2024. 

        3.2.2.5.              Leasing counterparty risk

Covivio group’s rental income is subject to a certain degree of concentration, insofar as the top 10 tenants (AccorHotels, Telecom portfolio, Orange, NH, Suez, IHG, B&B, Dassault, Tecnimont, Thalès) generate approximately 32% of annual revenues. 

Covivio group is not significantly exposed to the risk of insolvency, since its tenants are selected based on their creditworthiness and the economic prospects of their business segments. The operating and financial performance of the main tenants is regularly reviewed. In addition, tenants grant the Group financial guarantees when leases are signed.

The cumulative amount of write-downs of trade receivables was €34.1 million at 30 June 2024, a decrease of €1 million compared with 31 December 2023. 

3.2.2.6.Risk related to changes in the value of the portfolio

Changes in the fair value of investment properties are recognised in the income statement. Changes in property values can thus have a material impact on the operating performance of the Group.

In addition, part of the company’s operating income is generated by the sales plan, the income of which is equally dependent on property values and on the volume of possible transactions.

Rentals and property values are cyclical in nature, the duration of the cycles being variable but generally long-term. Different domestic markets have differing cycles that vary from each other in relation to specific economic and market conditions. Within each national market, prices also follow the cycle in different ways and with varying degrees of intensity, depending on the location and category of the assets.

The macroeconomic factors that have the greatest influence on property values and determine the various cyclical trends include the following:

•       interest rates;

•       the market liquidity and the availability of other profitable alternative investments;

•       economic growth;

•       the outlook for revenue growth.

Low interest rates, abundant liquidity on the market and a lack of profitable alternative investments generally lead to an increase in the value of real estate properties.

Economic growth generally increases demand for leased space and paves the way for rent levels to rise, particularly in offices. These two consequences lead to an increase in the price of real estate assets. Nevertheless, in the medium term, economic growth generally leads to a rise in inflation and then a rise in interest rates. 

The investment policy of Covivio group is to minimise the impact of the various stages of the cycle by choosing investments that:

•       have long-term leases and high-quality tenants, which soften the impact of a reduction in market rental income and the resulting decline in realestate prices;

•       are located in major city centres;

•       have low vacancy rates, in order to avoid the risk of having to re-let vacant space in an environment where demand may be limited.

The holding of real estate assets intended for leasing exposes the Covivio group to the risk of fluctuation in the value of real-estate assets and lease payments.

Despite the uncertainty created by the economic downturn, this exposure is limited to the extent that the rentals invoiced are derived from rental agreements, the term and diversification of which mitigate the effects of fluctuations in the rental market. 

The sensitivity of the fair value of investment properties to changes in capitalisation rates is analysed in Section 4.2.5.1.5.

        3.2.2.7.              Exchange rate risk

The Group operates both in and outside the euro zone (following acquisition of the hotel properties in the United Kingdom, Poland, Hungary, and the Czech Republic). The Group wanted to hedge against certain currency fluctuations (GBP) by financing part of the acquisitions through a foreign currency loan and a currency swap.


30 June 2024       

(M£)

Actual increase of                       5% decrease in

+2.4% in exchange                                     exchange rate rate GBP/EUR     GBP/EUR (M€)

10% decrease in exchange rate GBP/EUR (M€)

image 


  -31.0   -61.8  Asset value  652  +14.9 

                                                                                                                                                                                                              +6.6                                              +13.3 

Debt                                                                                                                                                           270                                                -3.2 

                                                                                                                                                                                                             +11.8                                             +23.7 

Cross currency swap                                                                                                                             250                                                -5.7 

Impact on shareholders' equity

                          

                      5.9      

-12.5

-24.9 


(-) corresponds to a loss; (+) corresponds to a gain

3.2.2.8. Risk related to changes in the value of shares and bonds

The Group is exposed to risks for two categories of shares:

•       non-consolidated shares (note 3.2.5.2);

•       shares consolidated according to the equity method (note 3.2.5.3).

This risk primarily involves listed securities in companies consolidated according to the equity method, which are valued according to their value in use. Value in use is determined based on independent assessments of the real-estate assets and financial instruments.

        3.2.2.9.              Tax environment

        3.2.2.9.1.            Change by country

The Group has not observed any major changes in the tax environment in France and in other countries that impact net income in the 2024 fiscal year.

Stemming from a project by the OECD and the European Commission, the “PILLAR 2” international tax reform seeks to impose a minimum effective tax rate of 15% on all groups with revenues of at least €750 million, and will be applicable from the 2024 fiscal year. 

To date, there are still some uncertainties about the implementation of rules relating, in particular, to the scope of application (in particular for companies applying the SIIC regime or equivalent) and the calculation methods.

As of 30 June 2024, clarifications are still expected from the bodies representing the reform. No provisions for tax relating to the PILLAR 2 rules were recognised in the SIIC scope.

      1.1.1.1.1.           Tax risks

Due to the complexity and bureaucracy characteristic of the environment in which the Covivio group operates, the Group is exposed to tax risks. If our counsel believes that an adjustment presents a risk of reassessment, a provision is made. 

At 30 June 2024, there was no new tax risk recognised whose effects would have a material impact on the Group’s net income or financial position.

       1.1.1.1.2.            Deferred Taxation

A significant percentage of the Group’s real-estate companies have opted for the SIIC regime in France. The impact of deferred tax liabilities is therefore essentially present in German Residential, Germany Offices and Italy Offices. It is also linked to investments in Hotels in Europe (Germany, Spain, Belgium, Ireland, Netherlands, Portugal, the United Kingdom, Poland, Hungary and Czech Republic). In the case of Spain, all Spanish companies have opted for the SOCIMI regime exemption. 

Deferred tax is mainly due to the recognition of the fair value of the portfolio. The tax rates are detailed in note 3.2.6.9.2 “Taxes and theoretical tax rate by geographical area”.

However, there are deferred tax liabilities related to assets held by the companies prior to opting for SOCIMI treatment.

For the United Kingdom, 9 of the 12 companies have applied the UK REIT exemption from 1 January 2024. There is therefore no longer any deferred tax on this part of the portfolio.


        3.2.3.       Scope of consolidation

3.2.3.1.Accounting principles applicable to the scope of consolidation

Consolidated subsidiaries and structured entities – IFRS 10

These financial statements include the financial statements of Covivio and the financial statements of the entities (including structured entities) that it controls and its subsidiaries.

Covivio Group has control when it:

•       has power over the issuing entity;

•       is exposed or is entitled to variable returns due to its ties with the issuing entity;

•       has the ability to exercise its power in such a manner as to affect the amount of returns that it receives; 

•       the potential voting rights held by the Group, other holders of voting rights or other parties;

•       the rights under other contractual agreements (shareholders’ agreements);

•       the other facts and circumstances, where applicable, which indicate that the Group has or does not have the actual ability to manage relevant business activities at the moment when decisions must be made, including voting patterns during previous Shareholders’ Meetings.

Subsidiaries             and          structured               entities    are           fully consolidated.

Equity affiliates – IAS 28

An equity affiliate is an entity in which the Group has significant control. Significant control is the power to participate in decisions relating to the financial and operational policy of an issuing entity without, however, exercising control or joint control on these policies.

The results and the assets and liabilities of equity affiliates are recognised in these consolidated financial statements according to the equity method.

Partnerships (joint control) – IFRS 11

Joint control means the contractual agreement to share the control exercised over a company, which only exists in the event where the decisions concerning relevant business activities require the unanimous consent of the parties sharing the control.

Joint ventures

A joint venture is a partnership in which the parties which exercise joint control over the entity have rights to its net assets. 

The results and the assets and liabilities of joint ventures are              recognised              in             these       consolidated           financial statements according to the equity method.

Joint operations

A joint operation is a partnership in which the parties exercising joint control over the operation have rights to the assets, and obligations for the liabilities relating to it. Those parties are called joint operators.

A joint operator must recognise the following items relating to its interest in the joint operation:

•       its assets, including its proportionate share of assets held jointly, where applicable;

•       its liabilities, including its proportionate share of liabilities undertaken jointly, where applicable;

•       the income that it derived from the sale of its proportionate share in the yield generated by the joint operation;

•       its proportionate share of income from the sale of the yield generated by the joint operation;

•       the expenses that it has committed, including its proportionate share of expenses committed jointly, where applicable.

The joint operator accounts for the assets, liabilities, income and expenses pertaining to its interests in a joint operation in accordance with the IFRS that apply to these assets, liabilities, income and expenses.

No Group company is considered to constitute a joint operation.

3.2.3.2.Change in shareholding rate and/or change in consolidation method

On 19 April 2024, Covivio acquired 8.3% of the share capital of Covivio Hotels held by the Generali Group, in exchange for new Covivio shares. The launch of the subsequent public exchange offer resulted in the additional acquisition of 0.35% of the share capital of Covivio Hotels. This transaction resulted in a strengthening of Group share of equity of €280 million. As of 30 June 2024, Covivio held 52.53% of its consolidated subsidiary Covivio Hotels. 

On 28 June 2024, Covivio and CDC Investissement Immobilier signed a strategic partnership in Germany for a predominantly residential portfolio located in the centre of Berlin. This partnership resulted in the acquisition by CDC Investissement Immobilier, on behalf of Caisse des Dépôts, of a 49% stake in a portfolio representative of Covivio’s residential portfolio in Berlin, which includes eight assets, located in several of the most attractive neighbourhoods in Berlin, owned by Covivio Berlin Prime. Covivio now holds 51% of the share capital via its German subsidiary and still controls the company. Covivio Berlin Prime was consolidated at 31.51% at 30 June.

Lastly, the Group reduced its shareholding in Fondo Porta di Romana from 32.02% to 24.52% following successive capital increases. 


        3.2.3.3.               List of consolidated companies

Entries and exits from the scope are presented in the table below at the beginning (entry) or end (exit) of each business segment.

Consolidation               Method in 2024

% interest in 2024

Parent company             

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

75.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                      FC       

100.00 

                 EM/JV       

50.00 

                 EM/JV       

50.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

FC   

50.10 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

50.10 

                      FC       

50.10 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

75.00 

                 EM/JV       

50.09 

                      FC       

50.10 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

                      FC       

100.00 

imageimage75 companies in the France Offices segment             Country                                 % interest in 2023

Covivio                                                                                                                                                                                                       France                                                                                                                     

SNC Anjou Promo                                                                                                                                                                                   France                                                                                                       100.00 

Covivio Ravinelle                                                                                                                                                                                     France                                                                                                       100.00 

SARL Foncière Margaux                                                                                                                                                                        France                                                                                                       100.00 

Covivio 2     France   100.00  Covivio 4                        France   75.00 

Euromarseille 1                                                                                                                                                                                       France                                                                                                          50.00 

Euromarseille 2                                                                                                                                                                                       France                                                                                                          50.00 

Euromarseille BI                                                                                                                                                                                      France                                                                                                          50.00 

Euromarseille PK                                                                                                                                                                                     France                                                                                                          50.00 

Euromarseille Invest                                                                                                                                                                              France                                                                                                          50.00 

Euromarseille H                France   50.00  Covivio 7 France   100.00 

SCI bureaux Coeur d'Orly                                                                                                                                                                     France                                                                                                          50.00 

SAS Coeur d'Orly Promotion                                                                                                                                                                France                                                                                                          50.00 

Technical                                                                                                                                                                                                   France                                                                                                       100.00 

SCI Atlantis                                                                                                                                                                                                France                                                                                                       100.00 

Iméfa 127   France   100.00  SNC Latécoëre              France   50.10 

SCI du 32 avenue P Grenier                                                                                                                                                                 France                                                                                                       100.00 

SCI du 40 rue JJ Rousseau                                                                                                                                                                    France                                                                                                       100.00 

SCI du 3 place A Chaussy                                                                                                                                                                      France                                                                                                       100.00 

SARL BGA Transactions France   100.00  SCI du 9 rue des Cuirassiers France   50.10 

SCI du 15 rue des Cuirassiers                                                                                                                                                               France                                                                                                          50.10 

SCI du 10B et 11 A 13 allée des Tanneurs                                                                                                                                        France                                                                                                       100.00 

SCI du 125 avenue du Brancolar                                                                                                                                                         France                                                                                                       100.00 

SARL du 106-110 rue des Troënes                                                                                                                                                     France                                                                                                       100.00 

SCI du 20 avenue Victor Hugo                                                                                                                                                             France                                                                                                       100.00 

Palmer Plage SNC                                                                                                                                                                                   France                                                                                                       100.00 

Dual Center                                                                                                                                                                                              France                                                                                                       100.00 

SNC Télimob Paris                                                                                                                                                                                   France                                                                                                       100.00 

SNC Télimob Nord                                                                                                                                                                                  France                                                                                                       100.00 

SNC Télimob Rhone Alpes                                                                                                                                                                    France                                                                                                       100.00 

SNC Télimob Sud Ouest                                                                                                                                                                         France                                                                                                       100.00 

SNC Télimob Paca France   100.00  OPCI Office CB21                    France   75.00 

Lenovilla                                                                                                                                                                                                    France                                                                                                          50.09 

SCI Latécoère 2                 France   50.10  Meudon Saulnier           France   100.00 

Latepromo                                                                                                                                                                                                France                                                                                                       100.00 

FDR Participation                                                                                                                                                                                    France                                                                                                       100.00 

SCI Avenue de la Marne                                                                                                                                                                        France                                                                                                       100.00 

Consolidation

Method in 2024

% interest in 2024

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

50.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

50.00 

FC

50.10 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

60.00 

FC

50.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

50.10 

FC

100.00 

FC

100.00 

Merger

0.00 

Merger

0.00 

% interest

Companies in the France Offices segment                                                                                                                                    Country        

in 2023

Omega B                                                                                                                                                                                                    France                                                                                                       100.00 

SCI Rueil B2                                                                                                                                                                                              France                                                                                                       100.00 

Wellio                                                                                                                                                                                                         France                                                                                                       100.00 

Bordeaux Lac                                                                                                                                                                                           France                                                                                                       100.00 

Sucy Parc                                                                                                                                                                                                   France                                                                                                       100.00 

Gambetta Le Raincy                                                                                                                                                                               France                                                                                                       100.00 

21 Rue Jean Goujon                                                                                                                                                                               France                                                                                                       100.00 

Villouvette Saint-Germain                                                                                                                                                                    France                                                                                                       100.00 

Normandie Niemen Bobigny                                                                                                                                                               France                                                                                                       100.00 

Cité Numérique                                                                                                                                                                                       France                                                                                                       100.00 

Danton Malakoff                                                                                                                                                                                     France                                                                                                       100.00 

Meudon Bellevue             France   100.00  N2 Batignolles              France   50.00  Valence Victor Hugo France   100.00 

Nantes Talensac                                                                                                                                                                                      France                                                                                                       100.00 

Marignane Saint Pierre France   100.00  N2 Batignolles Promo France   50.00 

6 rue Fructidor                  France   50.10  Fructipromo                    France   100.00 

Jean Jacques Bosc                                                                                                                                                                                  France                                                                                                       100.00 

Terres neuves                                                                                                                                                                                           France                                                                                                       100.00 

André Lavignolle                                                                                                                                                                                     France                                                                                                       100.00 

SCCV Chartres avenue de Sully                                                                                                                                                           France                                                                                                       100.00 

SCI de la Louisiane                                                                                                                                                                                  France                                                                                                       100.00 

SCCV Bobigny Le 9ème Art France   60.00  SCCV Fontenay sous Bois Rabelais France   50.00  Saint-Germain Hennemont France   100.00 

Antony Avenue de Gaulle                                                                                                                                                                     France                                                                                                       100.00 

Aix en Provence Cézanne                                                                                                                                                                     France                                                                                                       100.00 

Hotel N2                                                                                                                                                                                                    France                                                                                                          50.10 

SCI Meudon Juin                                                                                                                                                                                     France                                                                                                       100.00 

SNC Boulogne Jean Bouveri                                                                                                                                                                 France                                                                                                       100.00 

Charenton                                                                                                                                                                                                 France                                                                                                       100.00 

SARL Télimob Paris                                                                                                                                                                                 France                                                                                                       100.00 

The registered office of the parent company Covivio is located at 18, avenue François Mitterrand – 57000 Metz. The other fully consolidated subsidiaries in the France Offices segment have their registered office located at 10, rue de Madrid – 75008 Paris.

Consolidation

Method in 2024

% interest in 2024

                   FC       

100.00 

                   FC       

51.00 

                   FC       

100.00 

                   FC       

100.00 

                   FC       

100.00 

                   FC       

100.00 

                   FC       

100.00 

                   FC       

100.00 

                  EM      

64.74 

                   FC       

100.00 

                   FC       

100.00 

                   FC       

100.00 

                  EM      

24.52 

             Merger      

0.00 

% interest

13 companies in the Italy Offices segment                                                                                                                                          Country

in 2023 image                     image

Covivio 7 S.p.A.                                                                                                                                                                                                    Italy                                                                                                100.00 

Central Società di Investimento per Azioni a capitalo fisso                                                                                                                                                                                                                               51.00 

Italy Central SICAF S.p.A.

Covivio Immobiliare 9 S.p.A. SINQ                                                                                                                                                                  Italy                                                                                                100.00 

Covivio Projects & Innovation                                                                                                                                                                          Italy                                                                                                100.00 

Wellio Italy                                                                                                                                                                                                            Italy                                                                                                100.00 

Imser Securitisation S.r.L..                                                                                                                                                                                 Italy                                                                                                100.00 

Imser Securitisation 2 S.r.L..                                                                                                                                                                             Italy                                                                                                100.00 

Covivio Development Trading S.r.L.                                                                                                                                                                Italy                                                                                                100.00 

Zabarella 2023 S.r.L.                                                                                                                                                                                           Italy                                                                                                  64.74 

Covivio Development Italy S.p.A.                                                                                                                                                                    Italy                                                                                                100.00 

Covivio Attività Immobiliari 4 S.r.L.                                                                                                                                                                 Italy                                                                                                100.00 

Covivio Attività Immobiliari 5 S.r.L.                                                                                                                                                                 Italy                                                                                                100.00 

Fondo Porta Di Romana                                                                                                                                                                                    Italy                                                                                                  32.02 

RESolution Tech                                                                                                                                                                                                   Italy                                                                                                  30.00 

The registered office of the companies in the Italy Offices segment is located at 10, Carlo Ottavio Cornaggia, 20123 Milan.

                 

Consolidation

Method in 2024

% interest in 2024

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

FC

52.53 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.42 

EM/EA

10.42 

EM/EA

10.42 

EM/EA

10.42 

EM/EA

10.42 

EM/EA

5.23 

EM/EA

9.92 

FC

52.53 

FC

52.53 

FC

52.53 

imageimage% interest in

185 companies in the Hotels segment                                                                                                                        Country

                                                                                                                                                                                                                                                                     2023

SCA Covivio Hotels (parent company) 100% controlled                                                                                            France                                                                                                                             43.86 

Holdco IRIS Phoenix                                   France                                    0.00  Holdco IRIS Dahlia                           France                                    0.00 

Rocky I                                   France                                    43.86  Rocky II                                             France                                    43.86  Rocky III                                            France                                    43.86  Rocky IV                                France                                    43.86  Rocky V                                             France                                    43.86  Rocky VI                                           France                                    43.86  Rocky VII                               France                                    43.86  Rocky VIII                                         France                                    43.86  Rocky IX                                            France                                    43.86  Rocky X                                 France                                    43.86  Rocky XI                                            France                                    43.86 

Rocky Covivio Limited                               UK                                           43.86  SARL Loire                                        France                                    43.86  Ruhl Cote D'Azur                           France                                      43.86  Foncière Otello                               France                                    43.86  Hôtel René Clair                             France                                    43.86 

Ulysse Belgique                                                                                                                                                                  Belgium                                                                                                                             43.86 

Ulysse Trefonds                                                                                                                                                                  Belgium                                                                                                                             43.86 

Foncière No Bruxelles Grand Place   Belgium   43.86  Foncière No Bruxelles  Aéroport  Belgium   43.86  Foncière No Bruges Centre  Belgium   43.86  Foncière Gand Centre  Belgium   43.86 

Foncière IB Bruxelles Grand-Place   Belgium   43.86  Foncière IB Bruxelles Aéroport  Belgium   43.86  Foncière IB Bruges Centre  Belgium   43.86  Foncière Antwerp Centre  Belgium   43.86  Foncière Gand Opéra  Belgium   43.86 

Foncière Bruxelles Expo Atomium                                                                                                                                Belgium                                                                                                                             43.86 

Murdelux                                                                                                                                                                    Luxembourg                                                                                                                             43.86 

Portmurs                                                                                                                                                                             Portugal                                                                                                                             43.86 

Sunparks Oostduinkerke  Belgium   43.86  Foncière Vielsam  Belgium   43.86  Sunparks Trefonds  Belgium   43.86  Foncière Kempense Meren  Belgium   43.86  Iris Holding France  France   8.73  Foncière Iris SAS  France   8.73  Sables d'Olonne SAS  France   8.73  OPCI Iris Invest 2010  France   8.73 

Covivio Hotels Gestion Immobilière  France   43.86  Tulipe Holding Belgique  Belgium   8.73  Narcisse Holding Belgique  Belgium   8.73  Foncière Bruxelles Tour Noire  Belgium   8.73 

Foncière Louvain                                                                                                                                                               Belgium                                                                                                                                8.73 

Foncière Bruxelles Centre Gare                                                                                                                                     Belgium                                                                                                                                8.73 

Iris Tréfonds                                                                                                                                                                        Belgium                                                                                                                                8.73 

Foncière Louvain Centre                         Belgium                                 8.73  Foncière Liège                                   Belgium                                 8.73 

Foncière Bruxelles Aéroport                                           Belgium                                 8.73  Foncière Bruxelles Sud                                           Belgium                                 8.73 

Foncière Bruge Station                                                                                                                                                    Belgium                                                                                                                                8.73 

Iris investor Holding Gmbh  Germany   8.73  Iris Berlin Gmbh  Germany   8.70  Iris Bochum & Essen   Germany   8.70  Iris Frankfurt Gmbh  Germany   8.70  Iris Nurnberg Gmbh  Germany   8.70  Iris Stuttgart Gmbh  Germany   8.70  Iris General partner Gmbh  Germany   4.36  Iris Verwaltungs Gmbh & co KG  Germany   8.28 

B&B Invest Lux 1                                                                                                                                                              Germany                                                                                                                             43.86 

B&B Invest Lux 2                                                                                                                                                              Germany                                                                                                                             43.86 

Consolidation

Method in 2024

% interest in 2024

EM/EA

10.45 

EM/EA

10.45 

EM/EA

10.51 

FC

26.37 

FC

26.37 

FC

26.37 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

53.44 

FC

52.53 

FC

49.37 

FC

49.37 

FC

50.24 

FC

52.53 

FC

48.85 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

26.37 

FC

52.53 

FC

52.53 

FC

52.53 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

49.85 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

B&B Invest Lux 3                                       Germany                                                                               43.86  % interest

Companies in the Hotels segment                                                                                                                                                    Country

in 2023 image     image

Campeli                                                                                                                                                                                                       France                                                                                                    8.73 

OPCI Camp Invest                                                                                                                                                                                     France                                                                                                    8.73 

Dahlia                                                                                                                                                                                                           France                                                                                                    8.77 

Foncière B2 Hôtel Invest                                                                                                                                                                         France                                                                                                 22.02 

OPCI B2 Hôtel Invest                                                                                                                                                                                France                                                                                                 22.02 

Foncière B3 Hôtel Invest  France   22.02  B&B Invest Lux 4  Germany   43.86 

NH Amsterdam Center Hotel HLD                                                                                                                                             Netherlands                                                                                                 43.86 

Hôtel Amsterdam Centre Propco                                                                                                                                              Netherlands                                                                                                 43.86 

Mo Lux 1                                                                                                                                                                                         Luxembourg                                                                                                  43.86 

LHM Holding Lux SARL  Luxembourg   43.86  LHM PropCo Lux SARL  Luxembourg   45.65 

SCI Rosace                                                                                                                                                                                                   France                                                                                                 43.86 

Mo Drelinden, Niederrad, Düsseldorf                                                                                                                                            Germany                                                                                                 41.23 

Mo Berlin                                                                                                                                                                                               Germany                                                                                                 41.23 

Mo First Five                                                                                                                                                                                         Germany                                                                                                 42.91 

Ringer                                                                                                                                                                                                     Germany                                                                                                 43.86 

B&B Invest Lux 5                                                                                                                                                                                  Germany                                                                                                 40.79 

SCI Hôtel Porte Dorée                                                                                                                                                                              France                                                                                                 43.86 

FDM M Lux                                                                                                                                                                                     Luxembourg                                                                                                  43.86 

OPCO Rosace                                                                                                                                                                                             France                                                                                                 43.86 

Exco Hôtel                                                                                                                                                                                               Belgique                                                                                                 43.86 

Invest Hôtel                                                                                                                                                                                            Belgique                                                                                                 43.86 

H Invest Lux                                                                                                                                                                                    Luxembourg                                                                                                  43.86 

Hermitage Holdco  France   43.86  Foncière B4 Hôtel Invest  France   22.02  B&B Invest Espagne SLU  Spain   43.86 

Rock-Lux                                                                                                                                                                                          Luxembourg                                                                                                  43.86 

Société Lilloise Investissement Immobilier Hôtelier SA                                                                                                                  France                                                                                                 43.86 

Berlin I                                                                                                                                                                                                    Germany                                                                                                 41.63 

Opco Grand Hôtel Berlin Betriebs                                                                                                                                                   Germany                                                                                                 41.63 

Berlin II                                                                                                                                                                                                   Germany                                                                                                 41.63 

Opco Hôtel Stadt Berlin Betriebs                                                                                                                                                    Germany                                                                                                 41.63 

Berlin III                                                                                                                                                                                                  Germany                                                                                                 41.63 

Opco Hôtel Potsdam Betriebs                                                                                                                                                          Germany                                                                                                 41.63 

Dresden II                                                                                                                                                                                              Germany                                                                                                 41.63 

Dresden III                                                                                                                                                                                             Germany                                                                                                 41.63 

Dresden IV                                                                                                                                                                                             Germany                                                                                                 41.63 

Opco BKL Hotelbetriebsgesellschaft (Dresden II à IV)                                                                                                               Germany                                                                                                 41.63 

Dresden V (propco Pullman Newa Dresden)                                                                                                                                Germany                                                                                                 41.63 

Opco Hôtel Newa Dresden Betriebs (Pullman)                                                                                                                           Germany                                                                                                 41.63 

Leipzig I (propco Westin Leipzig)                                                                                                                                                     Germany                                                                                                 41.63 

Opco HotelgesellschaftGeberst, Betriebs (Westin Leipzig)                                                                                                      Germany                                                                                                 41.63 

Leipzig II (propco Radisson Blu Leipzig)                                                                                                                                         Germany                                                                                                 41.63 

Opco Hôtel Deutschland Leipzig Betriebs (Radisson Blu)                                                                                                         Germany                                                                                                 41.63 

Erfurt I (propco Radisson Blu Erfurt)                                                                                                                                              Germany                                                                                                 41.63 

Opco Hôtel Kosmos Erfurt (Radisson Blu)                                                                                                                                     Germany                                                                                                 41.63 

Airport Garden Hotel NV                                                                                                                                                                    Belgique                                                                                                 43.86 

Investment FDM Rocatiera                                                                                                                                                                       Spain                                                                                                 43.86 

Bardiomar                                                                                                                                                                                                     Spain                                                                                                 43.86 

Trade Center Hôtel                                                                                                                                                                                     Spain                                                                                                 43.86 

H Invest Lux 2                                                                                                                                                                                Luxembourg                                                                                                  43.86 

Constance                                                                                                                                                                                                   France                                                                                                 43.86 

Hôtel Amsterdam Noord FDM                                                                                                                                                   Netherlands                                                                                                 43.86 

Hôtel Amersfoort FDM                                                                                                                                                                 Netherlands                                                                                                 43.86 

Constance Lux 1                                                                                                                                                                            Luxembourg                                                                                                  43.86 

Constance Lux 2                                                                                                                                                                            Luxembourg                                                                                                  43.86 

Nice-M                                                                                                                                                                                                         France                                                                                                 43.86 

Consolidation Method in 2024

% interest in 2024

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

49.85 

FC

52.53 

EM/EA

16.36 

EM/EA

16.36 

EM/EA

16.36 

EM/EA

17.51 

EM/EA

17.51 

EM/EA

17.51 

EM/EA

17.51 

EM/EA

17.51 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

FC

52.53 

imageimageRock-Lux OPCO                                         Luxembourg                                                                                                 43.86  % interest in

Companies in the Hotels segment                                                                                                           Country

                                                                                                                                                                                                                                                                   2023

Blythswood Square Hotel Holdco                                                                                             United Kingdom                                                                                                                                        43.86 

George Hotel Investments Holdco                                                                                           United Kingdom                                                                                                                                        43.86 

Grand Central Hotel Company Holdco                                                                                    United Kingdom                                                                                                                                        43.86 

Lagonda Leeds Holdco                                                                                                                 United Kingdom                                                                                                                                        43.86 

Lagonda Palace Holdco                                                                                                                United Kingdom                                                                                                                                        43.86 

Lagonda Russell Holdco                                                                                                               United Kingdom                                                                                                                                        43.86 

Lagonda York Holdco                                                                                                                    United Kingdom                                                                                                                                        43.86 

Oxford Spires Hotel Holdco                                                                                                        United Kingdom                                                                                                                                        43.86 

Oxford Thames Holdco                                                                                                                United Kingdom                                                                                                                                        43.86 

Roxburghe Investments Holdco                                                                                                United Kingdom                                                                                                                                        43.86 

The St David’s Hotel Cardiff Holdco                                                                                          United Kingdom                                                                                                                                        43.86 

Wotton House Properties Holdco                                                                                             United Kingdom                                                                                                                                        43.86 

Blythswood Square Hotel Glasgow                                                                                          United Kingdom                                                                                                                                        43.86 

George Hotel Investments                                                                                                          United Kingdom                                                                                                                                        43.86 

Grand Central Hotel Company                                                                                                   United Kingdom                                                                                                                                        43.86 

Lagonda Leeds PropCo                                                                                                                United Kingdom                                                                                                                                        43.86 

Lagonda Palace PropCo                                                                                                               United Kingdom                                                                                                                                        43.86 

Lagonda Russell PropCo                                                                                                              United Kingdom                                                                                                                                        43.86 

Lagonda York PropCo                                                                                                                   United Kingdom                                                                                                                                        43.86 

Oxford Spires Ltd (Propco)                                                                                                          United Kingdom                                                                                                                                        43.86 

Oxford Thames Hotel Ltd (Propco)                                                                                           United Kingdom                                                                                                                                        43.86 

Roxburghe Investments PropCo                                                                                                United Kingdom                                                                                                                                        43.86 

The St David’s Hotel Cardiff                                                                                                        United Kingdom                                                                                                                                        43.86 

Wotton House Properties                                                                                                           United Kingdom                                                                                                                                        43.86 

HEM Diesterlkade Amsterdam BV                                                                                                   Netherlands                                                                                                                                        43.86 

Dresden Dev                                                                                                                                          Luxembourg                                                                                                                                         41.63 

Delta Hotel Amersfoort                                                                                                                      Netherlands                                                                                                                                        43.86 

Opci Oteli                                                                                                                                                          France                                                                                                                                         13.66 

CBI Orient SAS  France   13.66  CBI Express SAS  France   13.66 

Kombon                                                                                                                                                             France                                                                                                                                         14.62 

Jouron                                                                                                                                                              Belgium                                                                                                                                        14.62 

Foncière Gand Cathédrale                                                                                                                          Belgium                                                                                                                                        14.62 

Foncière Bruxelles Sainte Catherine                                                                                                        Belgium                                                                                                                                        14.62 

Foncière IGK                                                                                                                                                   Belgium                                                                                                                                        14.62 

Forsmint Investments                                                                                                                                    Poland                                                                                                                                       43.86 

Cerstook Investments                                                                                                                                    Poland                                                                                                                                       43.86 

Noxwood Investments                                                                                                                                   Poland                                                                                                                                       43.86 

Redwen Investments                                                                                                                                      Poland                                                                                                                                       43.86 

Sardobal Investments                                                                                                                                    Poland                                                                                                                                       43.86 

Kilmainham Property Holding                                                                                                                     Ireland                                                                                                                                       43.86 

Thormont Ltd                                                                                                                                                   Ireland                                                                                                                                       43.86 

Honeypool                                                                                                                                                        Ireland                                                                                                                                       43.86 

SC CZECH AAD                                                                                                                                 Czech Republic                                                                                                                                         43.86 

New-York Palace Propco                                                                                                                             Hungary                                                                                                                                       43.86 

Hotel Plaza SAS                                                                                                                                                France                                                                                                                                        43.86 

Palazzo Naiadi Rome Propco   Italy   43.86  Palazzo Gaddi Florence Propco   Italy   43.86 

Bellini Venice Propco   Italy   43.86  Dei Dogi Venice Propco   Italy   43.86 

SLIH AD                                                                                                                                                              France                                                                                                                                        43.86 

SLIH CP                                                                                                                                                               France                                                                                                                                        43.86 

SLIH GHB                                                                                                                                                            France                                                                                                                                        43.86 

SLIH HDB                                                                                                                                                            France                                                                                                                                        43.86 

SLIH HG                                                                                                                                                              France                                                                                                                                        43.86 

SLIH HIR                                                                                                                                                             France                                                                                                                                        43.86 

SOHO 2 SAS                                                                                                                                                       France                                                                                                                                        43.86 

Roco Italy Hodco S.r.l                                                                                                                                            Italy                                                                                                                                       43.86 

OPCO 2 Bruges NV                                                                                                                                        Belgium                                                                                                                                       43.86 

Wotton House Properties Opco Limited                                                                                 United Kingdom                                                                                                                                        43.86 

Lagonda York Opco Limited                                                                                                        United Kingdom                                                                                                                                        43.86 

Lagonda Leeds Opco Limited                                                                                                     United Kingdom                                                                                                                                        43.86 

The registered office of the parent company Covivio Hotels and its main fully consolidated French subsidiaries is located at 10, rue de Madrid – 75008 Paris. The registered office of its main Luxembourg subsidiaries is located at 21 avenue de la Gare, L-1611 Luxembourg.

Consolidation

Method in 2024

% interest in 2024

FC

61.70 

FC

61.70 

FC

65.57 

FC

65.57 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

100.00 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

61.70 

FC

65.57 

FC

31.51 

FC

65.57 

FC

100.00 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

61.70 

FC

65.57 

FC

67.33 

FC

65.57 

FC

61.70 

FC

69.05 

FC

69.05 

FC

69.05 

FC

69.05 

FC

69.05 

FC

69.05 

FC

69.05 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.53 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

imageimage140 Companies in the German residential segment                                                                                                            Country                                                                                         % interest

in 2023

Covivio  Immobilien SE (parent company) 100% controlled                                                                                             Germany                                                                                                  61.70 

Covivio Immobilien  Germany   61.70  Covivio Lux Residential  Germany   65.57 

Covivio Valore 4                                                                                                                                                                            Germany                                                                                                  65.57 

Covivio Wohnen Verwaltungs                                                                                                                                                   Germany                                                                                                  61.70 

Covivio Grundstücks   Germany   61.70  Covivio Grundvermögen   Germany   61.70 

Covivio Wohnen Service                                                                                                                                                            Germany                                                                                                  61.70 

Covivio Wohnen                                                                                                                                                                           Germany                                                                                                  61.70 

Covivio Gesellschaft für Wohnen Datteln                                                                                                                              Germany                                                                                                  65.57 

Covivio Stadthaus   Germany   65.57  Covivio Wohnbau   Germany   65.57 

Covivio Wohnungsgesellechaft GMBH Dümpten                                                                                                                Germany                                                                                                  65.57 

Covivio Berolinum 2                                                                                                                                                                    Germany                                                                                                  65.57 

Covivio Berolinum 3                                                                                                                                                                    Germany                                                                                                  65.57 

Covivio Berolinum 1  Germany   65.57  Covivio Remscheid  Germany   65.57 

Covivio Valore 6  Germany   65.57  Covivio Holding   Germany   100.00 

Covivio Berlin 67 GmbH                                                                                                                                                             Germany                                                                                                  65.57 

Covivio Berlin 78 GmbH                                                                                                                                                             Germany                                                                                                  65.57 

Covivio Berlin 79 GmbH                                                                                                                                                             Germany                                                                                                  65.57 

Covivio Dresden GmbH                                                                                                                                                              Germany                                                                                                  65.57 

Covivio Berlin I SARL                                                                                                                                                                    Germany                                                                                                  65.57 

Covivio Berlin V SARL                                                                                                                                                                  Germany                                                                                                  65.57 

Covivio Berlin C GMBH  Germany   65.57  Covivio Dansk Holding Aps  Denmark   61.70  Covivio Dasnk L Aps  Germany   65.57  Covivio Berlin Prime   Germany   65.57 

Berlin Prime Commercial                                                                                                                                                           Germany                                                                                                  65.57 

Acopio                                                                                                                                                                                             Germany                                                                                               100.00 

Covivio Hambourg Holding ApS                                                                                                                                               Denmark                                                                                                  65.57 

Covivio Hambourg 1 ApS                                                                                                                                                            Germany                                                                                                  65.57 

Covivio Hambourg 2 ApS                                                                                                                                                            Germany                                                                                                  65.57 

Covivio Hambourg 3 ApS                                                                                                                                                            Germany                                                                                                  65.57 

Covivio Hambourg 4 ApS                                                                                                                                                            Germany                                                                                                  65.57 

Covivio Arian                                                                                                                                                                                 Germany                                                                                                  65.57 

Covivio Bennet   Germany   65.57  Covivio Marien-Carré   Germany   65.57  Covivio Berlin IV ApS  Denmark   61.70 

Covivio Berolina Verwaltungs GmbH  Germany   65.57  Residenz Berolina GmbH & Co KG  Germany   67.33  Covivio Quadrigua IV GmbH  Germany   65.57  Real Property Versicherungsmakler   Germany   61.70 

Covivio Quadrigua 15   Germany   69.05  Covivio Quadrigua 45  Germany   69.05 

Covivio Quadrigua 36  Germany   69.05  Covivio Quadrigua 46   Germany   69.05 

Covivio Quadrigua 40                                                                                                                                                                  Germany                                                                                                 69.05 

Covivio Quadrigua 47                                                                                                                                                                  Germany                                                                                                 69.05 

Covivio Quadrigua 48  Germany   69.05  Covivio Fischerinsel   Germany   65.57  Covivio Berlin Home   Germany   65.57 

Amber Properties Sarl  Germany   65.57  Covivio Gettmore   Luxembourg   65.57 

Saturn Properties Sarl                                                                                                                                                                 Germany                                                                                                  65.57 

Venus Properties Sarl  Germany   65.57  Covivio Vinetree   Luxembourg   65.57 

Acopio Facility  Germany   65.53  Covivio Rehbergen  Germany   65.57 

Covivio Handlesliegenschaften                                                                                                                                                Germany                                                                                                  65.57 

Covivio Alexandrinenstrasse                                                                                                                                                     Germany                                                                                                  65.57 

Consolidation Method in 2024

% interest in 2024

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

31.47 

FC

65.57 

FC

65.57 

FC

65.57 

FC

61.70 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

61.70 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

65.57 

FC

69.05 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

FC

61.70 

Merged

0.00 

imageimage

Covivio Spree Wohnen 1                                                Germany                               65.57  Companies in the German residential segment                                           Country                                 % interest in 2023

Covivio Spree Wohnen 6                                                                                                                                      Germany                                                                                                                               65.57 

Covivio Spree Wohnen 7                                                                                                                                      Germany                                                                                                                               65.57 


Covivio Spree Wohnen 8                                                                                                                                         Germany                                                                                                                              65.57 

Nordens Immobilien III                                                                                                                                            Germany                                                                                                                              65.57 

Montana-Portfolio                                                                                                                                                    Germany                                                                                                                              65.57 

Covivio Cantianstrasse 18 Grundbesitz                                                                                                               Germany                                                                                                                              65.57 

Covivio Konstanzer Str.54/ Zahringerstr.28, 28a Grundbesitz.                                                                      Germany                                                                                                                              65.57 

Covivio Mariend.Damm 28                                                                                                                                     Germany                                                                                                                              65.57 

Covivio Markstrasse 3 Grundbesitz                                                                                                                      Germany                                                                                                                              65.57 

Covivio Schnellerstrasse 44 Grundbesitz                                                                                                            Germany                                                                                                                              65.57 

Covivio Schnönwalder Str.69 Grundbesitz                                                                                                         Germany                                                                                                                              65.57 

Covivio Schulstrasse 16/17.Grundbesitz                                                                                                             Germany                                                                                                                              65.57 

Covivio Sophie-Charlotten Strasse31,32 Grundbesitz                                                                                     Germany                                                                                                                              65.57 

Covivio Zelterstrasse 3 Grundbesitz                                                                                                                     Germany                                                                                                                              65.57 

Covivio Zinshäuser Alpha                                                                                                                                        Germany                                                                                                                              65.57 

Covivio Zinshäuser Gamma                                                                                                                                    Germany                                                                                                                              65.57 

Second Ragland                                                                                                                                                         Germany                                                                                                                              65.57 

Seed Portfollio 2                                                                                                                                                        Germany                                                                                                                              65.57 

Erz 1                                                                                                                                                                              Germany                                                                                                                              65.57 

Covivio Berlin 9                                                                                                                                                          Germany                                                                                                                              65.57 

Erz 2                                                                                                                                                                              Germany                                                                                                                              65.57 

Best Place Living  Germany   31.47  Covivio Berlin 8  Germany   65.57 

Covivio Selectimmo.de                                                                                                                                            Germany                                                                                                                              65.57 

Covivio Prenzlauer Promenade 49 Besitzgesellschaft                                                                                     Germany                                                                                                                              65.57 

Meco Bau                                                                                                                                                                    Germany                                                                                                                              61.70 

Covivio Blankenburger Str.                                                                                                                                     Germany                                                                                                                              65.57 

Covivio Immobilien Financing                                                                                                                                Germany                                                                                                                              65.57 

Covivio Treskowallee 202 Entwicklungsgesel                                                                                                    Germany                                                                                                                              65.57 

Covivio Hathor Berlin                                                                                                                                               Germany                                                                                                                              65.57 

Covivio Rhenania 1  Germany   65.57  Covivio Prime Financing  Germany   61.70 

Covivio Grundbesitz NRW  Germany   65.57 

Covivio Eiger II                                                                                                                                                           Germany                                                                                                                              65.57 

Covivio Southern Living Grundbesitz                                                                                                                   Germany                                                                                                                              65.57 

Covivio Grundbesitz NRW 2                                                                                                                                   Germany                                                                                                                              65.57 

Covivio Buchstrasse 6 Fehmarner Str. 14                                                                                                            Germany                                                                                                                              65.57 

Covivio Erkstrasse 20                                                                                                                                                Germany                                                                                                                              65.57 

Covivio Martin Opitz Strasse 5                                                                                                                              Germany                                                                                                                              65.57 

Covivio Kurstrasse 23                                                                                                                                               Germany                                                                                                                              65.57 

Covivio Pankstrasse 55 Verwaltungs                                                                                                                    Germany                                                                                                                              65.57 

Covivio Grospiusstrasse 4                                                                                                                                       Germany                                                                                                                              65.57 

Covivio Grundbesitz Schillerstrasse 10                                                                                                                Germany                                                                                                                              65.57 

Covivio Grundbesitz Firstrasse 22                                                                                                                         Germany                                                                                                                              65.57 

Covivio Lindauer Alee 20 GmbH                                                                                                                           Germany                                                                                                                              65.57 

Covivio Berlin 19 Holding GmbH                                                                                                                           Germany                                                                                                                              65.57 

Covivio Berlin Alpha GmbH                                                                                                                                    Germany                                                                                                                              65.57 

Covivio Berlin Beta GmbH                                                                                                                                       Germany                                                                                                                              65.57 

Covivio Berlin Gamma GmbH                                                                                                                                Germany                                                                                                                              65.57 

Covivio Berlin Delta GmbH                                                                                                                                     Germany                                                                                                                              65.57 

Covivio Berlin Epsilon GmbH                                                                                                                                  Germany                                                                                                                              65.57 

Covivio Berlin Zeta GmbH                                                                                                                                       Germany                                                                                                                              65.57 

Covivio Berlin Eta GmbH                                                                                                                                         Germany                                                                                                                              65.57 

Covivio Berlin Theta GmbH                                                                                                                                    Germany                                                                                                                              65.57 

Covivio Berlin Iota GmbH                                                                                                                                        Germany                                                                                                                              65.57 

Covivio Berlin Kappa GmbH                                                                                                                                   Germany                                                                                                                              65.57 

Covivio Berlin Lambda GmbH                                                                                                                                Germany                                                                                                                              65.57 

Covivio Berlin My GmbH                                                                                                                                         Germany                                                                                                                              65.57 

Covivio Berlin Xi GmbH                                                                                                                                            Germany                                                                                                                              65.57 

Covivio Berlin Omicron GmbH                                                                                                                               Germany                                                                                                                              65.57 

Covivio Berlin Rho GmbH                                                                                                                                        Germany                                                                                                                              65.57 

Covivio Berlin Sigma GmbH                                                                                                                                    Germany                                                                                                                              65.57 

Covivio Berlin Tau GmbH                                                                                                                                         Germany                                                                                                                              65.57 

Covivio Berlin Ypsilon GmbH  Germany   65.57  Covivio Akragas Immobilien GmbH  Germany   69.05 

Covivio Gustav-Müller-Straße 34 GmbH                                                                                                             Germany                                                                                                                              61.70 

Covivio Alemannenstraße 18 GmbH                                                                                                                    Germany                                                                                                                              61.70 

Covivio Graefestraße 37 GmbH                                                                                                                             Germany                                                                                                                              61.70 

Covivio Detmolder Straße 47 GmbH                                                                                                                    Germany                                                                                                                              61.70 

Covivo Brandenburgische Straße 71 GmbH                                                                                                       Germany                                                                                                                              61.70 

Covivio Dominicusstraße 34 GmbH                                                                                                                      Germany                                                                                                                              61.70 

Covivo Richard-Wagner-Straße 5 GmbH                                                                                                             Germany                                                                                                                              61.70 

Covivio Elbestraße 19 GmbH                                                                                                                                 Germany                                                                                                                              61.70 

Covivio Kulmer Straße 11 GmbH                                                                                                                           Germany                                                                                                                              61.70 

Covivio Klixstraße 31 GmbH                                                                                                                                   Germany                                                                                                                              61.70 

Covivio Leinestraße 21 GmbH                                                                                                                               Germany                                                                                                                              61.70 

Covivio Kiehlufer 39 GmbH                                                                                                                                    Germany                                                                                                                              61.70 

Covivio Development                                                                                                                                               Germany                                                                                                                              61.70 

The registered office of the parent company Covivio Immobilien SE is at Essener Strasse 66, 46047 Oberhausen.

Consolidation

Method in 2024

% interest in 2024

FC

100.00 

FC

55.00 

FC

100.00 

FC

100.00 

FC

94.22 

FC

100.00 

FC

100.00 

FC

94.22 

FC

94.22 

FC

94.22 

FC

94.22 

FC

94.22 

FC

94.22 

FC

94.22 

FC

89.90 

FC

100.00 

FC

94.22 

FC

94.22 

FC

94.22 

FC

94.22 

FC

100.00 

FC

100.00 

% interest

22 Companies in the German offices segment                                                                                                                                Country

in 2023

image                                                                               image

Covivio Office Holding   Germany   100.00  Covivio Alexanderplatz  Luxembourg   55.00 

Covivio Alexanderplatz                                                                                                                                                                          Germany                                                                                               100.00 

Covivio Office Berlin                                                                                                                                                                               Germany                                                                                               100.00 

Covivio Tino Schwierzina Strasse 32 Grundbezitz                                                                                                                          Germany                                                                                                  94.22 

Covivio Gross-Berliner-Damm                                                                                                                                                             Germany                                                                                               100.00 

Covivio Office (ex-Godewind Immobilien)                                                                                                                                       Germany                                                                                               100.00 

Covivio Office 1                                                                                                                                                                                       Germany                                                                                                  94.22 

Covivio Beteilingungs                                                                                                                                                                            Germany                                                                                                  94.22 

Covivio Office 2                                                                                                                                                                                       Germany                                                                                                  94.22 

Covivio Office 3                                                                                                                                                                                       Germany                                                                                                  94.22 

Covivio Office 4                                                                                                                                                                                       Germany                                                                                                  94.22 

Covivio Office 5                                                                                                                                                                                       Germany                                                                                                  94.22 

Covivio Office 7  Germany   94.22  Covivio Office 6  Germany   89.90 

Covivio Technical Services 1                                                                                                                                                                Germany                                                                                               100.00 

Covivio Technical Services 2                                                                                                                                                                Germany                                                                                                  94.22 

Covivio Technical Services 3                                                                                                                                                                 Germany                                                                                                  94.22 

Covivio Technical Services 4                                                                                                                                                                 Germany                                                                                                  94.22 

Covivio Verwaltungs 4                                                                                                                                                                           Germany                                                                                                  94.22 

Covivio Construction                                                                                                                                                                              Germany                                                                                               100.00 

Acopio Office Energie GmbH                                                                                                                                                               Germany                                                                                               100.00 

The registered office of the parent company Covivio Office Holding is at Knesebeckstrasse 3, 10623 Berlin.

Consolidation

Method in 2024

% interest in 2024

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

100.00 

FC

85.00 

Merged

0.00 

% interest

6 companies in the Other segment (France Residential, Car Parks, Services)                                                                       Country

in 2023

image                                                                               image

1 car parks company:                                                                                                                                                                                                                                                                                                       

Trinité  France   100.00 5 services companies:     

Covivio Hôtels Gestion                                                                                                                                                                             France                                                                                            100.00

Covivio Property SNC                                                                                                                                                                               France                                                                                            100.00

Covivio Développement                                                                                                                                                                          France                                                                                            100.00

Covivio SGP                                                                                                                                                                                                 France                                                                                            100.00

Fédération des Assurances Covivio                                                                                                                                                      France                                                                                                 0.00

Covivio Proptech                                                                                                                                                                                       France                                                                                            100.00

FC : Full consolidation

EM/EA: Equity Method – Affiliates

EM/JV: Equity Method – Joint ventures

NC : Non Consolidated 

PC : Proportionate Consolidation

There are 441 companies in the Group, including 396 fully consolidated companies and 45 equity affiliates.


        3.2.3.4.              Evaluation of control

Considering the rules of governance that grant Covivio powers giving it the ability to affect asset yields, the following companies are fully consolidated.

SNC        Latécoère      and      Latécoère      2      (consolidated

structured entities)

As at 30 June 2024, SCI Latécoère and Latécoère 2 were 50.1% held by Covivio and fully consolidated. The partnership with the Crédit Agricole Assurances Group (49.9%) was established in 2012 and 2015 as part of the Dassault Systems Campus project and its extension, in Vélizy. Covivio signed a draft agreement to extend the Dassault Systèmes campus through the construction of a new 27,600 m2 building and the signing of new leases. 

These leases started to run in May 2023 following delivery of the extension. 

SCIs of 9 and 15 rue des Cuirassiers (consolidated structured entities)

As at 30 June 2024, the SCIs of 9 and 15 rue des Cuirassiers were 50.1% held by Covivio and fully consolidated. The partnership with Assurances du Crédit Mutuel (49.9%) was created in early December 2017 as part of the Silex 1 and Silex 2 office projects in Lyon Part-Dieu. Delivery of the Silex 2 project took place in early July 2021.

SAS 6 rue Fructidor (consolidated structured entities)

As at 30 June 2024, the company 6 rue Fructidor was 50.1% held by Covivio and fully consolidated. 

The partnership with Crédit Agricole Assurances was set up in October 2019 as part of the Paris Saint Ouen So Pop project, located on the border between Paris and Saint-Ouen.

Construction work was completed on a building as part of a CPI signed on 29 October 2019 by Fructidor and Fructipromo. The project was delivered on 16 September 2022.

SCI N2 Batignolles, Hôtel N2 and SNC Batignolles Promo (consolidated structured entities)

As at 30 June 2024, SCI N2 Batignolles and SNC Batignolles Promo were 50% owned by Covivio and fully consolidated. 

As at 30 June 2024, Hôtel N2 was 50.1% held by Covivio and fully consolidated.

The partnership with Assurances du Crédit Mutuel (50%) was set up in 2018 as part of the Paris N2 StreamBuilding development project located in the Clichy Batignolles ZAC (development zone) in the 17th district of Paris. The delivery took place on 27 September 2022.

SNC Batignolles Promo is 50% owned by Hines. 

Covivio Alexanderplatz SARL (consolidated structured

entity) 

As at 30 June 2024, Covivio Alexanderplatz SARL was 55% held by Covivio and fully consolidated. The partnership with Covéa (25%) and Generali Vie (20%) was set up in June 2021 as part of the Alexanderplatz project in Berlin. Delivery of this project is scheduled for February 2027. The construction of the building is carried out as part of a CPI between Covivio Alexanderplatz and Covivio Construction GmbH, wholly owned by

Covivio.

Covivio Berlin Prime SAS (consolidated structured entity) 

Covivio Berlin Prime SAS is 51% held by Covivio Immobilien, a controlled subsidiary of Covivio at 30 June 2024, and is fully consolidated. The partnership with CDC (49%) was set up as of June 2024. Covivio Immobilien is responsible for property management, asset management, the asset rotation policy and the day-to-day management of the company. 

The following companies are consolidated by the equity method:

SCI Lenovilla (joint venture)

As at 30 June 2024, Lenovilla was 50.09% held by Covivio and consolidated according to the equity method. The partnership with the Crédit Agricole Assurances Group (49.91%) was established in January 2013 as part of the New Vélizy (Thalès Campus) project. The shareholder agreement stipulates that decisions be made unanimously. 

SCI Cœur d’Orly Bureaux (joint-venture)

As at 30 June 2024, SCI Cœur d’Orly Bureaux was 50% held by Covivio and 50% by Aéroports de Paris and was consolidated by the equity method. On 10 March 2008, the shareholders signed a memorandum of understanding, subsequently amended by a succession of deeds and by partnership agreements which set out the partners’ rights and obligations with respect to SCI Cœur d’Orly Bureaux.

Fondo Porta di Romana

Fondo Porta di Romana is 24.52% owned by Covivio, 72.23% by COIMA and 3.25% by Prada as at 30 June 2024 and is consolidated using the equity method. Shareholders are bound by a memorandum of understanding specifying the fund’s governance rules:



73


no single shareholder can make a key management decision (implementation of an Advisory Committee ruling by a majority of five out of six members) or modify the rules of the fund (implementation of a qualified majority).


        3.2.4.             Significant events during the fiscal year

Significant events during the period were as follows:

        3.2.4.1.               Macroeconomic environment

Since        2023,       several     factors     impacted                 the macroeconomic environment in which Covivio operates. Slowdown in investment market and development

The investment market has been slowed down significantly since 2023 by the rise in interest rates pending their stabilisation. Some fund managers are facing withdrawal requests. The property development business was also strongly impacted, resulting in a decrease in construction starts and reservations.

Inflation

The beginning of 2024 was marked by a deceleration in inflation, which fell below 3%. The effect of the increase in energy costs is limited for Covivio due to rent revision clauses (or indexation) or the re-invoicing of these costs to tenants. The increase in the cost of construction materials is included in Covivio’s investment policy and in the monitoring of the budget for real estate development operations.

Rising interest rates

After a historic increase in interest rates over the last two years, interest rates are expected to stabilise in 2024. The interest-rate risk management policy (note 3.2.2.3) enables Covivio to hedge against the risk of an increase in the interest rates of its variable-rate debt.

        3.2.4.2.             France Offices

Disposals of assets (€55 million – profit on disposals net of fees: -€1 million) and assets under preliminary sale agreement (€91 million)

During the half-year, the Group mainly sold an office asset in the Paris region for €49 million, generating a breakeven net income from disposal.

At 30 June 2024, the amount of assets under promise amounted to €91 million and included an asset in the Paris region and five assets outside Paris.

Assets under development

The asset development programme is presented in note

3.2.5.1.4.

The first half of 2024 was marked by the delivery of L'Atelier, Covivio’s new European headquarters operated by Wellio. The main developments underway are the refurbishment of Parisian buildings (Grands Boulevards and Monceau) and the construction of Thalès 2 in Meudon. 

Financing 

During the first half of the year, Covivio and its France Offices subsidiaries did not carry out any significant refinancing operations. 

        3.2.4.3.             Italy Offices

Disposals (€77 million – profit on disposal net of fees: +€0.9 million) and assets under preliminary sale agreements (€50 million)

Over the first half, 8 assets were disposed for a total sale price of €77 million.  

As at 30 June 2024, assets under preliminary agreement amounted to €50 million on four assets.  

Development portfolio

The asset development programme is presented in note 3.2.5.1.4. The main projects are Corso Italia and Symbiosis. 

Refinancing of Central Bank debt (Telecom portfolio)

The Central debt was refinanced during the first half of the year, accompanied by a reduction in the nominal amount which now stands at €250 million, compared to €300 million at 31 December 2023.  

        3.2.4.4.             Hotels in Europe

Major reinforcement in the hotel sector

On 19 April 2024, Covivio and Generali finalised the contribution of 8.3% of the share capital of Covivio Hotels held by Generali in exchange for new Covivio shares. The subsequent takeover bid provided an additional 0.35% of the share capital of Covivio Hotels. Covivio now holds 52.53% of the share capital and voting rights of Covivio Hotels. This transaction is part of a strategic move to rebalance the portfolio, increasing exposure to hotels (to 20% of Covivio's portfolio vs 17% at the end of 2023), a sector that has proved its ability to outperform inflation and GDP growth over a long period, and which offers promising growth prospects. 

Continued dynamism of activity The first half of the year was marked by:

•       an increase in rental income at variable rent for €3 million and the effect of indexation on fixed rents;

•       the €1 million decrease in the EBITDA of hotels under management, related to the end of the guaranteed minimum for a hotel in Roissy, the closure of a hotel for renovation in Brugge, offset by the full-year effect of the opening of Zoku Paris. 

Disposals of assets (€20 million – profit on disposals net of fees: €3.5 million) and assets under preliminary sale agreement (€354 million)

During the first half of 2024, Covivio Hotels sold two assets for €20 million.

As of 30 June 2024, the sale agreements relate to two hotels in Spain amounting to €94 million (including €74.6 million related to the preliminary sale agreement on shares), 12 hotels in France for €225 million including 10 as part of an asset exchange memorandum of understanding with AccorInvest, four hotels in Germany for €30 million and commitments on retail assets for a total of €6 million.

Signature of an undertaking to sell shares 

During 2023, Covivio signed, through its subsidiary Covivio Hotels, a commitment to sell shares in a company that owns a hotel in Spain for €74.6 million. In accordance with IFRS 5, the company derecognised other assets and liabilities held for sale by €6.5 million and €6.6 million on the assets and liabilities side, respectively. The sale of the company is scheduled for the beginning of the second half of 2024.

Refinancing and redemption 

On 15 May 2024, Covivio Hotels issued a green bond of

€500 million with a maturity of 9 years. Over the period, Covivio Hotels partially repaid its GBP debt for £130 million (approximately €150 million), reducing the nominal value of the group’s GBP debt to £270 million. 

        3.2.4.5.             German Residential

Refinancing and redemption 

Covivio Immobilien secured more than €250 million in mortgage refinancing. 

3.2.5.               Notes related to the statement of financial position

Disposals of assets (€20 million – loss on disposals net of fees: €0.4 million) and assets under preliminary sale agreement (€18 million)


        3.2.5.1.              Asset value 

3.2.5.1.1. Accounting principles applicable to intangible and tangible fixed assets

Intangible fixed assets

Identifiable intangible fixed assets are amortised on a straight-line basis over their expected useful lives. Intangible fixed assets acquired are recorded on the balance sheet at acquisition cost. They mainly include computer software.

Intangible fixed assets are amortised on a straight-line basis, as follows:

•          Software: over a period of 1 to 10 years.

Business combinations (IFRS 3) and goodwill from acquisitions

An entity must determine whether a transaction or other event constitutes a business combination within the meaning of the definition of IFRS 3, which states that a company is an integrated set of activities and assets that can be operated and managed for the purpose of providing goods or services to clients, generating investment income (such as dividends or interest) or generating other income from ordinary activities.

In this case, the acquisition cost is set at the fair value on the date of the exchange of the assets and liabilities and equity instruments issued for the purpose of acquiring the entity. Goodwill is recognised as an asset for the surplus of the acquisition cost on the portion of the buyer’s interest in the fair value of the assets and liabilities acquired, net of any deferred taxes. Negative goodwill is recorded in the income statement.

To determine whether a transaction is a business combination, the Group considers in particular whether an integrated set of activities and assets is acquired in addition to real estate and whether this set comprises at least one input and a substantial process which, together, contribute significantly to the capacity to generate outputs.

The prospective additional costs are appraised at fair value at the acquisition date. They are definitely appraised in the 12 months following the acquisition. The subsequent change of these additional costs is recorded in the income statement.

After its initial recognition, the goodwill is subject to an impairment test at least once a year. The impairment test consists in comparing the net book value of the intangible and tangible fixed assets and goodwill related to the valuation of the Hotel Operating properties made by the real estate appraisers. These tests led to the recognition of a €0.8 million impairment charge on the operating properties for the fiscal year.

If the Group concludes that the transaction is not a business combination, then it recognises the transaction as an acquisition of assets and applies the standards appropriate to acquired assets.

Costs related to the acquisition categorised under business combinations are recognised as expenses in accordance with IFRS 3 under “Income from changes in consolidation scope” in the income statement. The costs associated with an acquisition that does not qualify as a business combination are an integral part of the acquired assets. 

Investment properties (IAS 40)

Investment properties are real-estate properties held for purposes of leasing within the context of operating leases or long-term capital appreciation (or both).

Investment properties represent the majority of the Group’s portfolio. The buildings occupied or operated by Covivio group employees – owner-occupied buildings – are recognised under tangible fixed assets (office properties occupied by employees, spaces used for own Flex Office, hotel real estate managed by the operating properties business).

Under the option offered by IAS 40, investment properties are assessed at their fair value. Changes in fair value are recorded in the income statement. Investment property is not amortised. 

Valuation missions are carried out in accordance with the Code of Ethics for SIICs, the Real Estate Valuation Charter and the recommendations of the COB/CNCC working group chaired by Mr Barthès de Ruyter and the international plan in accordance with the standards set by the International Valuation Standards Council (IVSC) and those of the 2014 Red Book of the Royal Institution of Chartered Surveyors (RICS). 

The real-estate portfolio directly held by the Group was appraised in full at 30 June 2024 by independent realestate experts including BNP Real Estate, JLL, CBRE, Cushman, CFE, MKG, REAG, Savills and HVS.

Investment properties were estimated at fair value excluding and/or including duties, and rents at market value. Estimates were made using the comparative method, the rent capitalisation method and the discounted future cash flows method.

Investment properties are recorded in the financial statements at their fair value excluding transfer taxes.

•       For France, Italy and Germany Offices, the valuations are primarily performed according to two methods: 

•       The yield (or income capitalisation) method:

This approach consists of capitalising an annual income, which, in general, is rental income from occupied assets, with the possible impact of a reversion potential, and market rent for vacant assets, taking into account the time needed to find new tenants, any renovation work and other costs;

•       The discounted cash flow (DCF) method:

This method consists of determining the useful value of an asset by discounting the forecast cash flows that it is likely to generate over a given time frame. The discount rate is determined on the basis of the risk-free rate plus a risk premium associated with the asset and defined by comparison with the discount rates applied to cash flows generated by similar assets.

•       For Hotels in Europe, the methodology changes according to the type of assets:

•       the rent capitalisation method is used for restaurants and Club Med holiday villages;

•       the DCF method is used for hotels (including the revenue forecasts determined by the appraiser) and Sunparks holiday villages.

•       For German Residential, the fair value determined corresponds to:

•       a block value for assets for which no sales strategy has been developed or which have not been marketed;

•       an occupied retail value for assets on which at least one preliminary sale agreement has been made before the reporting date.

The valuation method used was the discounted cash flow method. The resulting values are also compared with the initial yield rate, the monetary values per square metre of comparable transactions and transactions carried out by the Group.

IFRS 13 “fair value measurement” establishes a fair value hierarchy that categorises the inputs used in valuation techniques into three levels: 

•       level 1: the valuation refers to quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

•       level 2: the valuation refers to valuation methods using inputs that are observable for the asset or liability, either directly or indirectly, in an active market;

•       level 3: the valuation refers to valuation methods using inputs that are unobservable in an active market. 

The fair value measurement of investment properties requires the use of different valuation methods using unobservable or observable inputs to which some adjustments have been applied. Accordingly, the Group’s portfolio is mainly categorised as level 3 according to the IFRS 13 fair value hierarchy.

The appraisals of real estate assets recognised as investment properties were carried out taking into account the inflationary macroeconomic environment, a source of uncertainty on cost forecasts, and climate risk based on current practices and Covivio’s carbon trajectory. 

The context of the crisis has created uncertainty about the estimates used for appraisal values. These estimates include assumptions about resumption of activity (reopening of hotels and gradual return of visitors, use of office buildings, etc.) which may not be realised.

Investment properties under development (IAS 40)

Assets under construction are recognised according to the general fair-value principle, except where it is not possible to determine this fair value on a reliable and ongoing basis. In such cases, the asset is carried at cost. 

As a result, development programmes and extensions or remodelling of existing assets that are not yet commissioned are recognised at their fair value and are treated as investment properties whenever the administrative and technical fair-value reliability criteria – i.e. administrative, technical and commercial criteria – are met. 

In accordance with revised IAS 23, the borrowing cost during a period of construction and renovation is included in the cost of the assets. The capitalised amount is determined on the basis of fees paid for specific borrowings and, where applicable, for financing from general borrowings based on the weighted average rate of the particular debt.

Right-of-use (IFRS 16)

In application of IFRS 16, when a movable or immovable asset is held under a lease, the lessee is required to recognise a right-of-use asset and a rental liability, at amortised cost.

Right-of-use assets are included in the items under which the corresponding underlying assets are presented, if they belonged thereto, namely the items operating properties, other tangible fixed assets and investment properties.

The lessee depreciates the right-of-use on a straightline basis over the term of the lease, except for rights relating to investment properties, which are measured at fair value.

Tangible fixed assets (IAS 16)

Operating properties are depreciated according to their useful life:

Buildings

50 to 60 years

General installations and layout of the buildings

10 to 30 years

Equipment and furniture

3 to 20 years

Pursuant to the preferred method proposed by IAS 16, operating properties (head offices and Flex Office business) and managed hotels under the operating properties business line (occupied or operated by Group employees) are carried at historical cost less accumulated depreciation and any potential impairment. They are amortised over their expected useful life according to a component-based approach.


If the appraisal value of the operating properties is lower than the net book value, an impairment loss is recognised. For hotels under management, impairment is recognised first on the value of the fund, then on the value of the tangible fixed assets.

Non-current assets held for sale (IFRS 5)

In accordance with IFRS 5, when Covivio decides to dispose of an asset or group of assets, it classifies them as assets held for sale if:

•       the asset or group of assets is available for immediate sale in its current condition, subject only

to normal and customary conditions for the sale of such assets;

•       its sale is likely within one year and marketing for the property has been initiated.

For the Covivio group, only assets corresponding to the above criteria or for which a sale commitment has been signed are classified as assets held for sale. 

If a sale commitment exists on the account closing date, the price of the commitment net of expenses constitutes the fair value of the asset held for sale.


        3.2.5.1.2.             Table of changes in fixed assets 

(In € thousand)

31 Dec. 23

Scope change

Increase/ Charges

Disposal 

/ Reversals of provisions

Change in fair value

Transfers 

Change in exchange rate

30 June 24

Goodwill

117,356

0

-823 (1)

-6

0

0

0

116,527 

Intangible fixed assets

19,249

0

-205

0

0

0

-1

19,043

Gross amounts

39,418 

1,214 

-8 

-1 

40,623 

Depreciation

-20,169 

-1,419 

-21,580 

Tangible fixed assets

1,593,439

0

-16,689 (2)

9,366

0

-24,070

2,375

1,564,421

Operating properties

1,468,098 

-31,863 

9,408 

22,891 

2,370 

1,470,904 

    Gross amounts

1,940,097 

2,730 

-26 

3,980 

2,556 

1,949,337 

    Depreciation

-471,999 

-34,593 

9,434

18,911 

-186 

-478,433 

Other tangible fixed assets

39,978 

-2,498 

-42 

1,300 

-0 

38,738 

    Gross amounts

188,572 

2,515 

-1,254 

-1,822 

-1 

188,009 

    Depreciation

-148,593 

-5,013 

1,212 

3,122 

-149,272 

Fixed assets in progress

85,363 

17,673 

-48,261 

54,780 

    Gross amounts

88,769 

17,673 

-48,261 

58,186 

    Depreciation

-3,406 

-3,406 

Investment properties

20,186,471

0

218,262 (3)

-62,130 (4)

-307,028 (5)

-266,369 (6)

15,632

19,784,838

Operating properties

19,046,433 

100,741 

-59,330 

-254,176 

-272,295 

15,632 

18,577,005 

Development portfolio 

1,140,038 

117,521 

-2,800 

-52,852 

5,926 

1,207,833 

Assets held for sale

326,649

0

470

-102,322 (4)

4,577 (5)

291,339 (6)

0

520,713

Assets held for sale

326,649 

470 

-102,322 

4,577 

291,339 

520,713 

  - of which other assets held for sale

6,465 

1,282 

7,747 

TOTAL

22,243,165

0

201,015

-155,092

-302,451

900

18,007

22,005,543 

(1)  The goodwill of hotels run as Operating properties decreased by €0.8 million following the decrease in appraisal values leading to the impairment of two assets, in France and Germany.

(2)  Depreciation for the period offset CAPEX for the period on operating assets (mainly hotel properties, co-working assets and other real estate assets used by the Group)

(3)  CAPEX for the period mainly concerns buildings under development in Italy Offices (€54 million), Germany Offices (€32 million) and France Offices (€27 million), and operating properties in German Residential (€64 million), in France Offices (€27 million) and Hotels in Europe (€5 million). 

(4)  See 3.2.4, disposals of investment properties mainly concern Italy Offices (-€35 million) and Hotels in Europe (-€16 million)

(5)  The change in fair value concerns Offices in Germany (-€140 million), in France (-€80 million), residential activity in Germany (-€72 million) and Offices in Italy (-€32 million) offset by the Hotels activity (+€21 million)

(6)  Transfers of investment properties to assets held for sale mainly include Hotels in Europe for €197 million, Italy Offices for €48 million, France Offices for €26 million and residential activity in Germany for €18 million

The portfolio of hotels valued at cost held as operating properties totalled €1,119.2 million at 30 June 2024. In accordance with IAS 16, they are mainly recognised in the “operating properties” line.

The line “acquisitions of tangible and intangible fixed assets” in the statement of cash flows (-€228.1 million) corresponds mainly to investments excluding the impact of depreciation, amortisation and indexation of leases (-€242.7 million) restated for advances and advanced payments for work on investment properties under development already paid (-€0.3 million),

corrected for the change in trade payables on fixed assets (+€7.0 million) and the restatement of step rentals and rent-free periods for +€9.0 million. 

The “Disposals of tangible and intangible fixed assets” line in the Statement of cash flows (+€101.3 million) primarily corresponds to income from disposals as presented in Section 3.2.6.3 “Income from asset disposals” (+€167.8 million), restated for the change in receivables on asset disposals (+€49.7 million) and to down payments on disposals (+€16.1 million).

78

        3.2.5.1.3.              Investment properties and assets held for sale

Consolidated portfolio at 30 June 2024, in € million:

                                      Germany offices

                                        €1,215m - 6%

image

The Hotels portfolio above does not include hotel operating properties, presented in operating properties (see  3.2.5.1.2.).

(In € thousand)

31 Dec 23

Scope change

Increase

Disposal 

Change in

fair value 

Transfers

Change in exchange rate

30 June 2024

Investment properties

20,186,471

0

218,262

-62,130

-307,028

-266,369

15,632

19,784,838

Operating properties

19,046,433

0

100,741

-59,330

-254,176

-272,295

15,632

18,577,005

   France offices

3,843,604

0

26,598

-2,190

-83,165

9,383

0

3,794,230

   Italy offices

2,381,640

0

1,239

-35,200

-28,096

-48,180

0

2,271,403

   Hotels

4,655,245

0

5,132

-16,280

19,548

-194,710

15,632

4,484,567

   German residential

7,321,634

0

63,841

-5,660

-74,755

-42,830

0

7,262,230

   German offices

844,310

0

3,931

0

-87,708

4,042

0

764,575

Development portfolio

1,140,038

0

117,521

-2,800

-52,852

5,926

0

1,207,833

   France offices

331,876

0

26,918

-2,800

4,856

0

0

360,850

   Italy offices

299,447

0

54,039

0

-5,695

4,522

0

352,313

   Hotels

0

0

0

0

0

0

0

0

   German residential

39,029

0

4,153

0

0

1,404

0

44,586

   German offices

469,686

0

32,411

0

-52,013

0

0

450,084

Assets held for sale

326,649

0

470

-102,322

4,577

291,339

0

520,713

   France offices

114,950

0

162

-49,000

-1,845

26,312

0

90,579

   Italy offices

41,986

0

0

-41,986

1,910

48,180

0

50,090

   Hotels

161,915

0

308

0

1,359

198,449

0

362,031

   German residential

7,586

0

0

-11,336

3,153

18,398

0

17,801

   German offices

0

0

0

0

0

0

0

0

   France offices

212

0

0

0

0

0

0

212

TOTAL

20,513,120

0

218,732

-164,452

-302,451

24,970

15,632

20,305,551

The increase in investment properties under development column includes capitalised works and operating expenses for €108 million and financial interest for €10 million (note 3.2.5.1.4).

The amounts in the “disposal” column correspond to the appraisal values published on 31 December 2023 or values of preliminary sales agreements signed in 2024.

        3.2.5.1.4.           Development portfolio

Investment properties under development relate to construction or refurbishment programmes that fall within the application of IAS 40 (revised).

(In € thousand)

31 Dec. 23

Acquisitions and works

Capitalised interest

Change in fair value

Transfers and disposals 

Change of scope

30 June 2024

France Offices

331,876

24,979

1,939

4,856

-2,800

0

360,850

Italy Offices

299,447

50,756

3,283

-5,695

4,521

0

352,313

Germany Offices

469,686

28,279

4,132

-52,013

0

0

450,084

German Residential

39,029

3,584

569

0

1,404

0

44,586

TOTAL CONSOLIDATED

1,140,038

107,598

9,923

-52,852

3,125

0

1,207,833

Acquisitions and works are mainly concentrated on five office assets in Italy, three construction and redevelopment projects of office assets in France and two projects in Germany.

        3.2.5.1.5.           Appraisal parameter

The Group has not identified the best use of an asset as being different from its current use. Consequently, the application of IFRS 13 did not lead to a modification of the assumptions used for the valuation of assets.

In accordance with IFRS 13, the tables below provide details by operating sector of the ranges of unobservable inputs by business segment (level 3) used by the real-estate appraisers:

France, Italy and Germany Offices:

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield

(weighted average)

  

Discounted cash flow rate

  

Discounted cash flow rate

(weighted average)

image

Paris Centre West

Level 3

816   

4,0% - 4,7%

4.3%

5,0% - 5,8%

5.3%

North Eastern Paris

Level 3

604   

4,5% - 8,0%

6.1%

6,0% - 8,3%

6.9%

Southern Paris

Level 3

172   

3,6% - 4,3%

4.0%

5,0% - 5,5%

5.4%

Western Crescent

Level 3

857   

4,9% - 5,8%

5.4%

5,5% - 7,0%

6.4%

Inner rim

Level 3

883   

5,8% - 7,9%

6.3%

6,5% - 9,0%

7.3%

Outer rim

Level 3

27   

7,7% - 11,0%

8.6%

8,5% - 13,5%

9.0%

Total France Offices

  

4,246 

imageimageTotal Paris Regions                                                                                                                                                   3,6% - 11,0%                                                           5,0% - 13,5%                                                 

Major Regional Cities                                                                   Level 3                                                                5,4% - 8,5%                                5.8%                     6,5% - 9,8%                                       6.9%

                                                                              Level 3                                                             8,5% - 24,3%                               11.6%               10,4% - 12,5%                                      11.6%

                                                                                                                                                       5,4% - 24,3%                                                             6,5% - 12,5%                                                 

Total in operation                                                                                                                      3,794                                                                                                                                        

Development portfolio                                                                           361                                                                                                                  Other assets held for sale                                                                                              91                                                                    

Milan

Level 3

1,674 

3,0% - 15,9%

5.5%

5,4% - 9,3%

6.7%

Rome

Level 3

167 

3,9% - 8,3%

6.5%

6,7% - 7,6%

7.2%

Others

Level 3

481 

5,8% - 12,3%

8.6%

7,7% - 9,9%

8.3%

Total Italy Offices

  

2,674 

imageimageTotal in operation                                                                                                                      2,321                                                                                                                                                                                 

Development portfolio                                                                 Level 3                                   353                                                                                                                                       

Berlin

Level 3

43   

5,3% - 5,6%

5.4%

5,0% - 6,8%

6.0%

Düsseldorf

Level 3

37   

6,3% - 6,3%

6.3%

5,3% - 5,3%

5.3%

Frankfurt

Level 3

369   

5,1% - 6,8%

6.2%

5,3% - 7,0%

5.7%

Hamburg

Level 3

232   

4,2% - 8,2%

5.0%

5,0% - 7,0%

5.4%

Munich

Level 3

64   

3,9% - 4,8%

4.2%

6,0% - 7,0%

5.6%

Total Germany Offices

  

1,215 

TOTAL OFFICES 

  

8,135 

imageimageTotal in operation                                                                                                                         745                                                                                                                                                                                  

Development portfolio                                                                 Level 3                                   450                                                                                                                                                                                 

Use rights                                                                                         Level 3                                     20                                                                                                                                       

At 31 December 2023, the data was as follows:

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield

(weighted average)

  

Discounted cash flow rate

  

Discounted cash flow rate

(weighted average)

image

Paris Centre West

Level 3

799 

3,4 % - 4,8 %

3.9%

4,8 % - 5,5 %

5.3%

North Eastern Paris

Level 3

612 

4,3 % - 8,0 %

5.7%

5,8 % - 8,3 %

6.6%

Southern Paris

Level 3

173 

3,5 % - 4,1 %

3.9%

5,3 % - 5,5 %

5.4%

Western Crescent

Level 3

848 

4,7 % - 5,8 %

5.2%

5,3 % - 7,0 %

6.2%

Inner rim

Level 3

898 

5,5 % - 7,5 %

6.1%

6,3 % - 9,0 %

7.1%

Outer rim

Level 3

30 

7,8 % - 11,0 %

8.4%

8,5 % - 10,3 %

9.0%

Total France Offices

  

imageimageTotal Paris Regions                                                                                                                                                 3,4 % - 11,0 %                                                         4,8 % - 10,3 %                                                 

Major Regional Cities                                                                   Level 3                                                               5,0% - 8,0 %                                 5.6%                   6.3 % - 8,5 %                                       6.6%

                                                                              Level 3                                                              6,0 % - 6,0 %                                 6.0%                   4,5 % - 6,3 %                                       6.5%

                                                                                                                                                        5,0 % - 8,0 %                                                             4,5 % - 8,5 %                                                 

Total in operation                                                                                                                                                                                                                                                                        

Development portfolio                                                                                                                                                                                                                                                                

Other assets held for sale                                                                                                       4,290                                                                                                                                        

Milan

Level 3

1,705 

2,1 % - 14,0 %

5.9%

5,4 % - 9,3 %

6.9%

Rome

Level 3

174 

3,5 % - 12,0 %

6.1%

6,8 % - 8,3 %

7.4%

Others

Level 3

544 

5,5 % - 11,4 %

7.8%

7,8 % - 9,9 %

8.3%

Total Italy Offices

  

2,723

imageimageTotal in operation                                                                                                                         299                                                                                                                                                                                 

Development portfolio                                                                 Level 3                                                                                                                                                                                  

Berlin

Level 3

49 

4,4% - 4,4%

4.4%

6,8% - 6,8%

6.8%

Düsseldorf

Level 3

41 

5,3% - 5,3%

5.3%

5,5% - 5,5%

5.5%

Frankfurt

Level 3

411 

4,3% - 5,5%

5.1%

5,6% - 7,2%

6.2%

Hamburg

Level 3

251 

4,7% - 6,1%

5.0%

5,5% - 5,9%

5.6%

Munich

Level 3

77 

1,9% - 3,7%

2.9%

5,7% - 7,2%

5.8%

Total Germany Offices

  

1,314

TOTAL OFFICES 

  

8,328

imageimageTotal in operation                                                                                                                         828                                                                                                                                                                                  

Development portfolio                                                                 Level 3                                   470                                                                                                                                                                                 

Use rights                                                                                         Level 3                                      16                                                                                                                                      

                 

Hotels

Discounted cash

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield 

(weighted average)

  

Discounted cash flow rate

  

flow rate

(weighted average)

image

Germany

Level 3

624 

4,6% - 6%

5.3%

5,1% - 7,6%

6.5%

Belgium

Level 3

206 

6,1% - 9%

7.6%

8,4% - 11,3%

9.9%

Spain

Level 3

629 

4,2% - 7,4%

5.1%

6,1% - 9,3%

7.0%

France

Level 3

1,681 

4,4% - 7,3%

5.2%

6% - 10%

7.1%

Netherlands

Level 3

159 

0% - 0%

0.0%

7,3% - 10,3%

7.9%

United Kingdom

Level 3

683 

4,5% - 6,5%

5.1%

6,5% - 8,5%

7.1%

Others

Level 3

564 

5,7% - 7,6%

6.1%

8% - 9,5%

8.3%

image                                                                             Level 3                                                                  4,2% - 9%                                       5.5%                         5,1% - 11,3%                                       7.3%

imageimage                                                                             Level 3                                                                6,5% - 10%                                       7.1%                        8,6% - 12,1%                                       9.1%

Total in investment properties,

excluding development portfolio and right-of-use assets

  

         4,591                                                                                                                                                                                               

image

Use rights                                                                           

Level 3         

248                                                                                                                                                                                                   

Other assets held for sale                                                   

      8                                                                                                                                                                                               

TOTAL HOTELS                                                                  

            

4,847                                                                                                                                                                                               

At 31 December 2023, the data was as follows: 

Discounted cash

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield 

(weighted average)

  

Discounted cash flow rate

  

flow rate

(weighted average)

image

Germany

Level 3

627 

4,6 %-6,0 %

5.3%

5,1 % - 7,5 %

6.5%

Belgium

Level 3

205 

6,1 %-8,8 %

7.5%

8,4 %-10,7 %

9.6%

Spain

Level 3

636 

4,2 %-7,4 %

5.3%

6,1 %-9,3 %

7.3%

France

Level 3

1,668 

4,4 %-8,3 %

5.2%

6,0 %-8,8%

7.0%

Netherlands

Level 3

159 

5,0 %-6,3%

5.6%

7,0 %-8,3 %

7.6%

United Kingdom

Level 3

662 

4,5 %-6,5 %

5.1%

6,5 %-8,5 %

7.1%

Others

Level 3

559 

5,6 %-7,5 %

6.1%

8,0 %-9,4 %

8.3%

imageimageimage Level 3  4,516  4,2 %-8,8 %  5.5%  5,1 %-10,7 %  7.3%  Level 3  51  7,6 % - 8,0 %  7.7%  9,5% - 10,4 %  9.7%

Total in investment properties,

excluding development portfolio and right-of-use assets

  

         4,567                                                                                                                                                                                               

image

German residential

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield 

(weighted average)

  

Discounted cash flow rate

  

Average value (€/m²)

image

Duisburg

Level 3

311 

4,5% - 6,0%

5.2%

6,5% - 8,0%

1,568 

Essen

Level 3

790 

4,6% - 6,0%

5.2%

6,6% - 8,0%

2,005 

Mülheim

Level 3

222 

4,9% - 6,0%

5.2%

6,9% - 8,0%

1,692 

Oberhausen

Level 3

193 

5,1% - 6,3%

5.5%

6,3% - 8,1%

1,396 

Datteln

Level 3

142 

4,2% - 6,2%

5.1%

6,2% - 8,2%

1,227 

Berlin

Level 3

4,283 

3,0% - 6,4%

4.0%

5,0% - 8,4%

3,211 

Düsseldorf

Level 3

193 

3,6% - 6,2%

4.3%

5,6% - 8,2%

2,744 

Dresden

Level 3

408 

4,1% - 7,2%

4.7%

6,1% - 9,2%

2,071 

Leipzig

Level 3

139 

3,7% - 5,4%

4.4%

5,7% - 7,4%

2,000 

Hamburg

Level 3

523 

3,3% - 24,6%

4.1%

5,3% - 26,6%

3,513 

Others

Level 3

130 

4,5% - 6,3%

5.2%

6,5% - 8,3%

1,852 

TOTAL GERMAN RESIDENTIAL

  

7,335

3,0% - 24,6%

4.3%

       5,0% - 26,6%        

2,558

* Including an operating property in Oberhausen and Berlin at market value.

** Potential yield assumed excluding duties (actual rents/appraisal values excluding duties).

The “Berlin” line is detailed below:

Yield 

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

(weighted average)

  

Discounted cash flow rate

  

Average value (€/m²)

image

Mitte

Level 3

781 

3,0% - 5,8%

3.8%

5,0% - 7,8%

3,342 

Neukölln

Level 3

640 

3,3% - 4,8%

3.9%

5,3% - 6,8%

3,110 

Pankow

Level 3

554 

3,2% - 6,0%

4.1%

5,2% - 7,7%

3,337 

Tempelhof-Schöneberg

Level 3

543 

3,1% - 6,4%

4.2%

5,1% - 8,4%

3,295 

Steglitz-Zehlendorf

Level 3

378 

3,1% - 5,9%

4.0%

5,1% - 7,9%

3,262 

Friedrichshain-Kreuzberg

Level 3

346 

3,2% - 5,3%

3.8%

5,2% - 7,3%

3,292 

Charlottenburg-Wilmersdorf

Level 3

323 

3,1% - 5,6%

3.9%

5,0% - 7,6%

3,893 

Spandau

Level 3

178 

3,5% - 5,9%

4.2%

5,5% - 7,9%

2,611 

Treptow-Köpenick

Level 3

163 

3,4% - 4,7%

4.0%

5,4% - 6,7%

3,066 

Reinickendorf

Level 3

134 

3,1% - 5,0%

4.0%

5,1% - 7,0%

2,583 

Berlin outer region

Level 3

121 

4,0% - 5,7%

4.0%

5,3% - 7,7%

2,691 

Lichtenberg

Level 3

68 

3,5% - 6,1%

3.8%

5,5% - 8,1%

2,948 

Marzahn-Hellersdorf

Level 3

49 

3,8% - 4,1%

3.8%

5,8% - 6,1%

2,749 

Non-capitalised dev costs                                               

Level 3         

 

           n/a        

n/a           

            n/a       

n/a

TOTAL BERLIN                                                                    

            

4,283        

3,0% - 6,4%         

4.0%        

5,0% - 8,4%         

3,211

Duisburg

Level 3

328 

3,3% - 5,4%

3.9%

4,8% - 6,9%

1,651 

Essen

Level 3

782 

3,2% - 6,3%

3.7%

4,6% - 7,8%

1,985 

Mülheim

Level 3

223 

3,4% - 5,7%

4.0%

4,7% - 6,9%

1,710 

Oberhausen

Level 3

198 

3,8% - 5,6%

4.1%

4,9% - 6,9%

1,435 

Datteln

Level 3

158 

2,3% - 5%

3.5%

3,8% - 6,5%

1,376 

Berlin

Level 3

4,237 

2,2% - 6,3%

3.2%

4,2% - 8,3%

3,146 

Düsseldorf

Level 3

200 

2,8% - 5,5%

3.4%

4,6% - 7,2%

2,844 

Dresden

Level 3

452 

2,5% - 4,8%

2.9%

3,8% - 6,3%

2,291 

Leipzig

Level 3

132 

2,6% - 4,8%

3.1%

4,1% - 6,3%

1,894 

Hamburg

Level 3

536 

2,4% - 4,4%

3.0%

4,2% - 6,2%

3,592 

Others

Level 3

142 

3,1% - 4,5%

3.8%

4,8% - 5,8%

2,014 

  

7,387

image2,2% - 6,3%

image

image3,8% - 8,3%

image

* Including an operating property in Oberhausen and Berlin at market value.

Asset value

Grouping of similar assets                                                                Level   

(in €m)

  

Yield 

  

(min-max)

Yield 

(weighted   average)

Discounted

  cash flow rate

Average value (€/m²)

Mitte

Level 3

762 

2,2% - 5,1%

3.3%

4,2% - 7,1%

3,265 

Neukölln

Level 3

620 

2,6% - 4,3%

3.0%

4,6% - 6,2%

3,002 

Tempelhof-Schöneberg

Level 3

545 

2,4% - 6,3%

3.1%

4,4% - 8,3%

3,242 

Pankow

Level 3

536 

2,6% - 4,4%

3.3%

4,6% - 6,4%

3,199 

Steglitz-Zehlendorf

Level 3

381 

2,6% - 4,7%

3.0%

4,4% - 6,7%

3,213 

Friedrichshain-Kreuzberg

Level 3

359 

2,4% - 4,2%

3.0%

4,3% - 6,2%

3,293 

Charlottenburg-Wilmersdorf

Level 3

305 

2,5% - 4,4%

3.2%

4,4% - 6,4%

3,662 

Reinickendorf

Level 3

142 

2,4% - 4,2%

3.1%

4,4% - 6,2%

2,722 

Spandau

Level 3

176 

3% - 4,4%

3.4%

5% - 6,4%

2,574 

Treptow-Köpenick

Level 3

167 

2,7% - 4,7%

3.1%

4,7% - 6,7%

3,115 

Berlin outer region

Level 3

124 

3% - 4,9%

3.9%

4,4% - 6,5%

2,720 

Lichtenberg

Level 3

68 

2,8% - 4,4%

3.1%

4,7% - 6,4%

2,919 

Marzahn-Hellersdorf

Level 3

47 

2,8% - 3,8%

3.1%

5% - 5,8%

2,643 

Non-capitalized development costs

Level 3

n/a

n/a

n/a

n/a

image

image

image

image

imageimageAt 31 December 2023, the data was as follows:

Grouping of similar assets

  

Level

  

Asset value (in €m)

  

Yield 

  

(min-max)

Yield 

(weighted average)

  

Discounted cash flow rate

Average value

  

(€/m²)

image

image

Impact of changes in the yield rate on changes in the fair value of real estate assets, by operating segment

(in € million)                                                                                            Yield*                                            Yield                                            Yield

                                                                                                                                                              -25 bps                                        +25 bps

image                                                                                                                                                                                  

France Offices 

Italy Offices

Hotels in Europe 

German Residential

5.7%

5.6%

6.0%

4.2%

185.0   

105.4   

203.2   

462.6   

-168.3 

-96.3 

-186.6 

-410.5 

Germany Offices                                                                                         5.9%                                             32.7                                           -30.0 

image 

*   Yield on operating portfolio – excl. duties.

** Including assets held by equity affiliates, excl. operating property assets.

•       If the yield rate excluding duties drops 25 bps (-0.25 point), the market value excluding duties of the real estate assets will increase by €989 million.

•       If the yield rate excluding duties increases 25 bps (+0.25 point), the market value excluding duties of the real-estate assets will decrease by €891.8 million.

                 

Impact of changes in the discount rate on changes in the fair value of real estate assets, by operating segment

€m  Discount rate  Discount rate -25bps                                                                               +25bps

image                                                                                                                                                                    

France Offices 

74.4

- 76.0

Italy Offices

52.2

- 50.6

Hotels in Europe 

84.9

- 81.5

German Residential

149.2

- 150.0

Germany Offices

14.3

- 12.2

image 

** Including assets held by equity affiliates, excl. operating property assets.

Based on a significant sample, the sensitivity of the value of the assets to changes in the discount rate can be assessed as follows: 

•       If the discount rate falls by 25 bps (-0.25 point), the market value of the real estate assets excluding duties will increase by around +2.0%, or +€375 million;

•       If the discount rate increases by 25 bps (+0.25 point), the market value of the property assets excluding duties will fall by around -2.0%, or €370 million.

        3.2.5.2.              Financial assets

        3.2.5.2.1.           Accounting principles

Other financial assets

Other financial assets consist of investment-fund holdings, which cannot be classified as cash or cash equivalents.

These securities are recognised upon acquisition at cost plus transaction costs. They are then recognised at fair value in the income statement on the reporting date.

The fair value is arrived at on the basis of recognised valuation techniques (reference to recent transactions, discounted cash flows, etc.). Some securities that cannot be reliably measured at fair value are recognised at acquisition cost.

Non-consolidated securities are valued at their fair value, and changes in value are recorded either in equity or in the income statement, depending on the option chosen by the Group for each of these securities in accordance with IFRS 9. Dividends received are recognised when they have been approved by vote.

Loans

At each reporting date, loans are recorded at their amortised cost. Moreover, impairment is recognised and recorded on the income statement when there is an objective indication of impairment as a result of an event occurring after the initial recognition of the asset.

        3.2.5.2.2.           Table of financial assets

(In € thousand)

31/12/2023

Increase

Decrease

Fair value

Scope change

Transfers

Change in exchange rate

30 June 2024

Ordinary loans

99,425 

91 

-2,034 

-777 

781 

97,486 

Total loans 

99,425

91

-2,034

0

0

-777

781

97,486

Advanced payments and deposits on acquisition of securities

2,530 

2,538 

Non-consolidated securities

15,521 

30 

-2,376 

-0 

-0 

13,175 

Receivables on financial assets

306 

44,241 

754 

45,301 

NET TOTAL

117,782

44,370

-3,656

0

0

-777

781

158,500

Ordinary loans include subordinated loans to equity affiliates (+€92.2 million) and guarantee deposits (+€5.3 million) and loans to employees.  

Other financial assets break down as follows:

a deposit to acquire the shares of a company that will hold a B&B Hotel asset in Portugal;

non-consolidated             securities       in        German

Residential and Italy Offices;

receivables on disposals.

•       advanced        payments                and          deposits on acquisitions of securities: these correspond to


        3.2.5.3.                 Investments in associates and joint ventures

3.2.5.3.1. Accounting principles venture is included in the book value of the investment, if it is not impaired. The share in the earnings for the

Investments in equity affiliates and joint ventures are period is shown in the line item “share in income of equity

recognised by the equity method. 

affiliates”.  

According to this method, the Group’s investment in the

The financial statements of associates and joint

equity affiliate or the joint venture is initially recognised ventures are prepared for the same accounting period

at cost, increased or reduced by the changes, as for the parent company, and adjustments are made,

subsequent to the acquisition, in the share of the net where relevant, to adapt the accounting methods to

assets of the affiliate.  those of the Covivio Group.

The goodwill related to an equity affiliate or joint

        3.2.5.3.2.               Table of investments in associates and joint ventures

(In € thousand)

% ownership

Operating segment

Country

31 Dec 23

30 June 24

Changes

Of which share of net income

Of which distribution and change in scope

Lenovilla (New Velizy)

50.10%

France Offices

France

61,709 

62,182 

472 

4,701 

-4,229 

Euromarseille (Euromed)

50.00%

France Offices

France

28,618 

28,549 

-70 

-70 

Cœur d'Orly (Askia et Belaïa)

50.00%

France Offices

France

28,420 

31,352 

2,933 

2,933 

Fondo Porta di Romana et autres

24.52%

Italy Offices

Italy

37,996 

41,320 

3,324 

415 

2,910 

Zabarella 2023 Srl

64.74%

Italy Offices

Italy

13,584 

13,557 

-28 

-28 

-0 

Iris Holding France

19.90%

Hotels in Europe

Belgium, Germany

21,446 

22,442 

997 

997 

-0 

OPCI IRIS Invest 2010

19.90%

Hotels in Europe

France

32,309 

33,113 

804 

1,439 

-635 

OPCI Camp Invest

19.90%

Hotels in Europe

France

21,013 

21,004 

-9 

1,304 

-1,313 

Dahlia

20.00%

Hotels in Europe

France

21,162 

22,264 

1,102 

1,102 

OPCI Otelli, Jouron, Kombon

31,15%  et 33,33%

Hotels in Europe

France,

Belgium 

108,660 

108,292 

-369 

3,802 

-4,171 

TOTAL

  

  

  

374,918

384,075

9,157

16,594

-7,438

The investments in equity affiliates at 30 June 2024 amounted to €384 million, compared with €375 million as at 31 December 2023, i.e. an increase of €9 million.

The change for the period is mainly due to the profit for the period (+€16.6 million), the distribution of dividends (-€10.3 million), offset by the capital increase of Porta di Romana (+€3.0 million).

86

        3.2.5.3.3.                 Breakdown of shareholder structure in the main associates and joint ventures

Direct ownership                                                                                                                                      Cœur              Groupe          SCI Lenovilla                         Fondo Porta di                    Zabarella 2023 d'Orly               Euromed       (New velizy)  Romana

imageNon-Group third parties                                                                                                                                                                                                                     

Crédit Agricole Assurances                                                                      50.0%             49.91%           Carron Cav. Angelo SpA                                                                                                   35.26%

COIMA                                                                                                                                                                                                                                                                                 72.23%                                         

image                                                                                                                                                                                                                                                        3.25%                                         

                                                                                                                                                                                                                                                         100%

                                                                              Iris Holding OPCI Iris Invest                             OPCI                                                OPCI Oteli                    Kombon                    Jouron

Direct ownership                                                                                                                                                                                              SCI Dahlia

                                                                                  France                          2010             Campinvest                                                   (Phoenix)                 (Phoenix)               (Phoenix)

image 

 

 

 

 

 

Sogecap

31.2%

33.3%

33.3%

Caisse de dépôt et consignation

37.7%

33.3%

33.3%

Prédica

80.1%

80.1%

68.8%

80.0%

Pacifica

11.3%

imageTOTAL                                                                                                                                                                                                                                                                                                                                              100%

        3.2.5.3.4.              Main financial information of associates and joint ventures

(In € thousand)

Asset name

Total balance sheet

Total noncurrent assets

Cash and cash and equivalents  

Total non-current liabilities excl. financial debt

Total current liabilities excl. financial debt

Financial liabilities

Rental income

Cost of the net financial debt

Consolidat ed

net income

Cœur d'Orly (Askia et Belaïa)

Cœur d'Orly

159,926

138,322

10,281

1,851

9,802

85,569

4,651

-461

5,865

Lenovilla (New Velizy)

New Velizy et extension

260,577

244,064

11,375

0

863

135,578

7,244

-699

9,385

Euromarseille (Euromed)

Euromed Center

119,150

103,807

12,366

604

3,177

58,271

2,945

20

-139

Fondo Porta di

Romana

Milan, Italy

95,697

85,976

2,647

0

10,003

44,362

0

416

415

Zabarella 2023 Srl

Padoue,

Italy

18,384

3,782

3,292

0

4,827

0

0

1

-28

Iris Holding France

Hôtels  AccorHotels

244,779

179,880

46,512

24,498

2,995

104,361

6,482

-1,017

5,011

OPCI IRIS Invest 2010

Hôtels  AccorHotels

278,303

157,460

30,916

0

5,256

106,650

8,395

-737

7,231

OPCI Camp Invest

Hôtels Campanile

161,396

131,289

21,492

0

1,971

53,877

5,279

25

6,552

Dahlia

Hôtels  AccorHotels

188,467

160,042

17,064

0

1,528

75,619

4,597

-1,055

5,509

OPCI Otelli, Jouron,

Kombon

  

Hôtels 

AccorHotels

  

523,217

  

438,731

  

26,315

  

19,369

  

5,441

  

158,362

  

14,834

  

-3,829

  

12,071

  

87

        3.2.5.4.               Deferred taxes at closing

Balance sheet at 31/12/2023

P&L change

Transfer

Currency translation differences

Change in shareholders’ equity

Exit from the scope

Balance sheet at 30/06/2024

DTA on temporary differences

19,326 

-251 

-18,305 

-217 

553 

DTA other activities

-2,879 

-436 

3,315 

DTA on JV of buildings

10,844 

-2,897 

-564 

7,383 

DTA on JV IFT

12 

-427 

537 

122 

DTA on tax loss carryforwards

43,005 

1,595 

13,910 

33 

58,544 

70,307 

-2,416 

-1,107 

-183 

66,602 

DTA/DTL offset

2,008 

-2,008 

TOTAL DTA

72,315

-2,416

-3,115

-183

0

0

66,602

Balance sheet at 31/12/2023

P&L change

Transfer

Currency translation differences

Change in shareholders’ equity

Exit from the scope

Balance sheet at 30/06/2024

DTL on temporary differences

82,326 

1,035 

-84,769 

-219 

-748 

-2,375 

DTL other activities

3,997 

1,126 

6,796 

11,919 

DTL on JV of buildings

949,170 

-14,100 

79,422 

1,014,494 

DTL on JV IFT

17,582 

1,828 

15 

19,425 

DTL on tax loss carryforwards

-1,543 

508 

-2,572 

-3,607 

1,051,532 

-9,603 

-1,108 

-217 

-748 

1,039,856 

DTA/DTL offset

2,008 

-2,008 

Total DTL

1,053,540

-9,603

-3,115

-217

-748

0

1,039,856

NET TOTAL

-981,225

7,187

0

34

748

0

-973,254


image  

At 30 June 2024, the consolidated deferred tax position showed a deferred tax asset of €66.6 million (versus €72 million as at 31 December 2023) and a deferred tax liability of €1,040 million (versus €1,054 million as at 31 December 2023). 

The primary contributors to the net balance of deferred tax liabilities are:

•       German Residential: -€796 million;

•       Hotels in Europe: -€192 million;  

        3.2.5.5.                Short-term loans and receivables

(In € thousand)                                           31 Dec 23                             Change of scope

34,497 

-33,379 

0

34,497 

-33,379 

image

•       Germany Offices: +€16 million.

The decrease in net deferred tax liabilities (-€8 million) is mainly due to the decline in appraisal values, particularly in Germany Offices (-€140 million), mitigated by the rise in the value of derivatives in Germany (+€15 million) and Hotels in Europe (+€21 million).  

The impact on net income is detailed in Section 3.2.6.9.2.

In accordance with IAS 12, deferred tax assets and liabilities are offset for each tax entity when they involve taxes paid to the same tax authority.

image                                                 Var. fair                                         

Increase                    Decrease                                                    Transfers

value


The balance at 30 June 2024 includes €34 million in accrued interest on derivatives, €6.8 million in loans to shareholders outside the Group and €0.9 million in accrued interest on loans.

88

        3.2.5.6.                Inventories and work-in-progress

3.2.5.6.1.         Accounting              principles                related                 to inventories

Inventories are composed of two classification types: property trading (mainly in Italy, purchase/sale) and real-estate development (housing units and offices).

        3.2.5.6.2.            Inventories and work-in-progress

They are assessed at cost. 

Inventories are intended to be sold during the normal course of business. They are recorded at acquisition price and, as applicable, are depreciated in relation to the sale value (independent appraisal value). 

30 June 24 NET

1,815

2,474

120,135

165,389

285,524

289,813

image(In € thousand)                                                                                                                                           31 Dec 23                              Change      

                                                                                                                                                                        NET 

Real-estate company trading properties                                                                                                              1,016     

imageMiscellaneous inventories (raw materials, goods)                                                                                               2,548      

France offices                                                                                                                                               176,314                             -56,179

German Residential                                                                                                                                      127,648                               37,741

Real estate trading properties                                                                                                                       303,962                              -18,438

imageimageTotal inventories and work-in-progress                                                                                                          307,526                               -17,713   

The balance sheet item “Inventories and work-in- charge through profit or loss. progress” groups together inventories from the real-

Receivables from operating simple lease transactions estate development business (€286 million) and from the

Italy Offices trading business (€2 million).  For receivables from simple lease transactions, from three months of unpaid rent, an impairment is

In France, real-estate development inventories consist recognised. The impairment rates applied by Covivio

exclusively of projects to transform office buildings into group are as follows: residential units, or land reserves. When a development

margin can be generated (depending on the • no impairment provision is recorded for existing or percentage of completion and marketing) the stock vacated tenants whose receivables are less than decreases accordingly. As part of the sale of the fully three months overdue; pre-let property under redevelopment in the 8th arrondissement of Paris, the Group signed a real estate • 50% of the total amount of receivables for existing development contract (€11.1 million in works invoices tenants whose receivables are between three and sold). The decrease in inventory in France is explained six months overdue; by the change in strategy of an asset (-€36 million) and • 100% of the total amount of receivables for existing net sales of CAPEX for the period (-€17 million). tenants whose receivables are more than six

The increase in inventories in German Residential (+€38 months overdue; million) is linked to the entry into inventory of new 100% of the total amount of receivables for projects for €40 million and net sales of CAPEX (-€2 vacated tenants whose receivables are more than million).                 three months overdue.

        3.2.5.7.              Trade receivables                                                                The receivables and theoretical impairments arising

3.2.5.7.1. Accounting principles related to trade from the rules above are reviewed on a case-by-case receivables and receivables from basis in order to factor in any specific situations.

                                   hotels under operation                                                  Receivables of hotels under operation 

The trade receivables are mainly comprised of Receivables of hotels under operation are impaired receivables from simple lease transactions and according to payment deadlines. The receivables and receivables of hotels under operation. These items are theoretical impairments arising from the rules above are measured at amortised cost. In the event that the reviewed on a case-by-case basis in order to factor in recoverable value is lower than the net book value, the any specific situations.

Group may be required to account for an impairment

89

        3.2.5.7.2.           Trade receivables

30 June 24

208,956 

3,883 

75,809 

203,307 

491,955 

-34,061 

457,894

(In € thousand)                                                                                                                                                                                                            31 Dec. 23                                               Change

image                                                                     image                                                                                                                                                              

Expenses to be reinvoiced to tenants                                                                                                                                                                         151,779                                                 57,177 

Rent-free periods                                                                                                                                                                                                                  5,778                                                 -1,895 

Trade receivables not yet billed   67,455   8,354  Trade receivables and related accounts   133,013   70,295  Total trade receivables   358,025   133,930 

Impairment of receivables                                                                                                                                                                                            -35,069                                                    1,007 

image                                                                  image322,956     

The change in total gross receivables (+€134 million) is mainly related to unmatured receivables and the reissuing of pending expenses (+€57 million) including €9.7 million of the IFRIC 21 impact corresponding to the rebilling over the full year of the property tax. Impairment of trade receivables decreased by €1 million.

Breakdown of trade receivables due:

                                                                                                                                                                                                                                                         Past due receivables

image

Trade receivables and related                                                   203,307                          115,155                     88,152                     48,407                        4,687                        3,832                       31,227 

accounts

Impairment of receivables                                                          -34,061                                  -91                    -33,967                          -335                          -793                       -2,201                      -30,637 

The line “Change in working capital requirements on continuing operations” in the Statement of cash flows consists of:

30 June 24

19,176

-153,559

192,552

58,169

imageimage(In € thousand)                                                                                                                                                                                                                                                                                                 31 Dec 23

image                                                    image 

Impact of changes in inventories and work in progress                                                                                                                                                                                                                              38,654

Impact of changes in trade & other receivables                                                                                                                                                                                                                                           60,861

Impact of changes in trade & other payables                                  93,945                                    

Change in working capital requirements on continuing operations (including employee benefits liabilities)                                                                                                  image

        3.2.5.8.              Others receivables

30 June 24

57,211 

28,471 

15,781 

1,277 

102,741

imageimage(In € thousand)                                                                                                                                                                                                                                 31 Dec 23                                             Change

Tax receivables                                                                                                                                                                                                                                       48,668                                                 8,543 

Other receivables                                                                                                                                                                                                                                  32,991                                              -4,520 

Security deposits received (short-term)                                                                                                                                                                                            5,313                                              10,468 

Current accounts                                                                                                                                                                                                                                     1,423                                                  -146 

image                                                                    image 

€57.2 million in government receivables comprise mainly VAT receivables (€44.3 million).

        3.2.5.9.                Cash and cash equivalents

        3.2.5.9.1.                Accounting principles related to cash and cash equivalents

Cash and cash equivalents include cash, short-term deposits and money-market funds. These are short-term, highly

90


liquid assets that are easily convertible into a known cash amount, and for which the risk of a change in value is negligible.

        3.2.5.9.2.             Table of cash and cash equivalents

image

At 30 June 2024, the cash equivalents consist mainly of Level 1 standard money-market collective investment vehicles (SICAV) and Level 2 term deposits in accordance with IFRS 13. 

• Level 1 of the portfolio corresponds to instruments whose price is listed on an active market for an

        3.2.5.10.            Shareholders’ equity

identical instrument.

• Level 2 corresponds to instruments whose fair value is determined using data other than the prices mentioned for Level 1 and observable directly or indirectly (i.e. price-related data). 

3.2.5.10.1.       Accounting              principles                related                 to shareholders' equity

If the Group buys back its own equity instruments (treasury                 shares),   these       are           deducted                 from shareholders’ equity. No profit or loss is recognised in the income statement when Group equity capital instruments are purchased, sold, issued or cancelled. Changes in the number of shares during the period

         3.2.5.10.2.          Change in shareholders' equity

The statement of changes in shareholders’ equity and movements in the share capital are presented in note

3.1.4.

The Covivio equity consisted of 111,623,468 shares issued and fully paid up each with a par value of €3.00, totalling €335 million at 30 June 2024. Covivio holds 818,131 treasury shares.

Transaction

Shares issued                                               Treasury shares                                            Shares outstanding

image

image

Capital increase – dividend in shares 

               6,638,915                                                                                                         

Capital increase – reinforcement in hotels 

               3,978,164                                                                                                         

Treasury shares – liquidity agreement                                                                                                           

-5,628  

Treasury shares – employee award                                                                                                           

30,880   

Treasury shares – pending allocation                                                                                                       

-51,630   

NUMBER OF SHARES AT 30 JUNE 2024                                                                                                    

111,623,468     

818,131       

110,805,337


Of the €330.8 million dividend, €256 million was paid as a scrip dividend, taken from premiums, reserves and retained earnings.

Reserves correspond to the parent company retained earnings and reserves, together with reserves from consolidation.

The line "Other" mainly includes movements in treasury shares for the period.

The change in non-controlling interests (-€280 million) is mainly due to: 

•       the hotel expansion with the acquisition of 8.7% of the share capital of Covivio Hotels from noncontrolling interests, reclassifying minority reserves to reserves attributable to owners of the parent (-

€280 million),  

•       offset by the disposal of 49% of Berlin Prime transferring reserves to non-controlling interests (+€82 million),

•       total comprehensive income for the period (+€69 million) 

•       less payouts for the period (-€153 million).

       3.2.5.11.             Statement of debt

3.2.5.11.1.       Accounting principles applicable to debt

Financial liabilities include borrowings and other interest-bearing debt. 

At initial recognition, financial liabilities are measured at fair value, minus the transaction costs directly attributable to the issue of the liability. They are then recognised at amortised cost based on the effective interest rate. The effective rate includes the nominal rate and actuarial amortisation of issue expenses and issue and redemption premiums.

Financial liabilities of less than one year are posted under “Current financial liabilities”.

The Group companies hold real estate and equipment assets through leases (construction leases and longterm leases, premises, company vehicles, car parks). At the lease commencement date, the lessee measures the rental liability as the present value of rents owing not yet paid, using the implied interest rate for the lease, if this rate can be easily determined, or otherwise using the incremental borrowing rate. This debt is amortised as the contracts expire and gives rise to the recognition of a financial expense.

Rental liabilities are shown on the long-term or short3.2.5.11.2. Table of debts and net financial debt  term rental liabilities line in the balance sheet and financial expenses in the "Interest costs for rental liabilities" line item.

Derivatives and hedging instruments

The Covivio group uses derivatives to hedge its floating-rate debt against interest-rate risk (hedging of future cash flows).

Derivative financial instruments are recorded on the balance sheet at fair value. The fair value is calculated using valuation techniques that use mathematical calculations based on recognised financial theories and parameters that incorporate the prices of markettraded instruments. This valuation is carried out by an external service provider. 

Certain financial instruments in Italy Offices are eligible for hedge accounting within the meaning of IFRS 9. 

In this case, changes in the fair value of the effective portion of the hedge are recognised net of tax in shareholders’ equity until the hedged transaction occurs. The ineffective portion is recorded in the income statement.

All derivative instruments in the other segments are therefore recognised at their fair value, and changes are reflected in the income statement.


New financing taken out during the fiscal year is presented in 3.2.2.2 “Liquidity risk” and in 3.2.5.11.3 “Bank borrowings”.

Debt by type at 30 June 2024 (in € million):

(In € thousand)

31 Dec 23

Increase

Decrease

Change of scope 

Change in exchange rate

Other changes

30 June 24

Bank borrowings 

5,738,835 

672,882 

-1,001,334 

-0 

5,410,388 

Finance lease borrowing

Other borrowings

282,951 

2,708 

-5,826 

-1 

279,833 

Treasury bills

260,000 

126,000 

-27,000 

359,000 

Securitised loans

2,104 

2,104 

Non-convertible bonds   

4,442,001 

500,000 

4,942,001 

Subtotal Interest-bearing loans

10,725,891

1,301,590

-1,034,160

0

1

5

10,993,326

Accrued interest

71,603 

72,506 

-78,135 

-0 

-2 

65,972 

Deferral of loan expenses

-91,353 

10,850 

-11,370 

88 

-2 

-91,787 

Creditor banks

1,026 

87,559 

88,585 

Total LT and ST loans 

10,707,167

1,384,946

-1,123,665

0

89

87,560

11,056,096

of which Long-term

9,324,322 

9,792,159 

of which Short-term

1,382,845 

1,263,937 

Valuation of financial instruments

-336,977 

-43,785 

-380,762 

Total derivatives

-336,977

0

0

0

0

-43,785

-380,762

of which Assets

-522,082 

-575,815 

of which Liabilities

185,105 

195,053 

Total borrowings and derivatives

10,370,190

1,384,946

-1,123,665

0

89

43,775

10,675,335

                                             Others        Financial lease securisations

imageBank borrowings

5,410

Net financial debt at 30 June 2024 (in € thousand):

30 June 24

1,335,818  -88,585 

1,247,233

1,244,563 

2,670 

  

10,993,326 

65,972 

11,059,298

-91,787 

9,720,278

imageimageimage                                                                                                                                                                                                                                                                                                                         31 Dec 23

Gross cash (a)                                                                                                                                                                                                                               

Bank overdrafts and current bank borrowings (b)                                                                                                                                                             

imageNet cash and cash equivalents (c) = (a) - (b)                                                                                                                                                                        

Of which available net cash and cash equivalents                                                                                                                                                       

Of which unavailable net cash and cash equivalents                                                                                                                                                  

        Total short-term interest-bearing loans                                                                                                                                            3.2.5.11.2     

      Accrued interest                                                                                                                                                                                         3.2.5.11.2     

The line “Proceeds related to new borrowings” of the statement of cash                 flows (€1,292 million)             mainly corresponds to:

• increases in interest-bearing loans (+€1,302 million) restated for the impact of net investments abroad and rental liabilities;

million).

The “Loan repayments” line of the statement of cash flows (-€1,045 million) mainly corresponds to the decrease in interest-bearing loans (-€1,034 million) restated for the impact of net investments abroad and

rental liabilities (-€10.5 million).

•               less amortisation of new loan issue costs (-€11

        3.2.5.11.3.         Bank borrowings

The table below outlines the characteristics of the borrowings taken out by Covivio group and the amount of the associated guarantees (principal amount over €100 million)

(In € thousand)

Outstanding debt (> or < €100 M)

Debt

Appraisal value at 30/06/2024(1)

Outstanding debt at 30/06/2024

Date of signature

Initial nominal amount

Maturity

France offices                              

€280 M – CB21 Tower 

246,500

29/07/15

    280,000 

29/07/25

€300 M – Orange

212,189

18/02/16

    300,000 

30/06/28

€165 M – DS Campus

146,138

25/02/21

    165,000 

23/02/29

€130 M – DS Extension

117,571

08/07/21

    130,000 

08/07/29

€115 M – Silex 2

115,000

12/07/22

    115,000 

12/07/30

> 100 M€

€280 M – CB21 Tower 

1,821,880

837,397

< 100 M€

59,210

33,000

Total France Offices

1,881,090

870,397

Italy offices

€290 M – Central

250,350

14/05/24

    290,000 

14/05/29

  

Hotels                                            

> 100 M€

Total Italy Offices

925,790

250,350

  

  

  

REFI 150M€ (2023) - OPCI B2 HI (B&B)

149,000

20/10/23

    150,000 

20/10/30

400 M£ - Rocky

318,535

24/07/18

    475,145 

24/07/26

178 M€ - ParkInn Alexanderplatz Berlin

173,461

30/12/19

    178,000 

30/12/29

> 100 M€

1,557,400

640,996

< 100 M€

1,696,321

442,798

Total Hotels Europe

3,253,721

1,083,794

German Residential

Cornerstone acquisition

141,379

16/06/15

    136,737 

30/06/25

Quadriga acquisition

136,878

16/06/15

    197,983 

31/03/26

Refinancing Indigo, Prime

218,292

09/07/19

    260,000 

30/09/29

Refinancing KG1

134,357

20/09/19

    141,400 

30/09/29

Refinancing KG4

231,658

30/03/20

    248,130 

29/03/30

Refinancing KG Residential

120,900

20/11/20

    130,000 

15/11/30

Refinancing Arielle/Dresden/Maria

143,418

21/05/21

    149,004 

15/05/31

Amadeus I financing

136,010

27/07/22

    145,500 

15/07/32

Lego acquisition

135,000

20/03/24

    135,000 

31/03/34

Financing Dümpten

120,000

25/06/24

    120,000 

30/06/34

> 100 M€

3,904,781

1,517,892

< 100 M€

3,144,579

1,369,273

  

  

Total German Residential

7,049,360

2,887,165

  

  

  

German offices

> 100 M€

Godewind–Frankfurt Airport Centre 

130,000

17/12/19

    130,000 

30/12/25

< 100 M€

155,150

Total Germany Offices

502,900

285,150

TOTAL COLLATERAL

  

                                                               13,612,861

     5,376,857                                    

  

  

France offices                              

€500 M – Green Bond

500,000

20/05/16

    500,000 

20/05/26

€500 M – Green Bond

595,000

21/06/17

    500,000 

21/06/27

€500 M – Green Bond

599,000

17/09/19

    500,000 

17/09/31

€500 M – Green Bond

599,000

23/06/20

    500,000 

23/06/30

€100 M – Green PP

100,000

15/01/21

    100,000 

20/01/33

€500 M – Green Bond

500,000

05/12/23

    500,000 

05/06/32

> 100 M€

2,893,000

 < 100 M€  

Treasury bills 

50,000

Total France Offices

2,740,105

2,943,000

Italy offices                                  

  

 €300 M – Green Bond King 

300,000

17/10/17

    300,000 

17/10/24

 €300 M – Green Bond Queen 

300,000

20/02/18

    300,000 

20/02/28

 > 100 M€  

600,000

 < 100 M€  

2,105

  

Total Italy Offices

1,878,366

602,105

  

  

  

Hotels

€350 M – Green Bond

350,000

24/09/18

    350,000 

24/09/25

€599 M – Green Bond

599,000

27/07/21

    599,000 

27/07/29

€500 M – Green Bond

500,000

23/05/24

    500,000 

23/05/33

NEU CP

309,000

 > 100 M€  

1,758,000

 < 100 M€  

33,571

Total Hotels Europe

2,729,714

1,791,571

German Residential

German offices

Others                                           

 < 100 M€  

 < 100 M€  

 < 100 M€  

Total German Residential

285,296

0

  

  

  

Total Germany Offices

691,688

0

France Residential

212

0

  

  

  

Car parks

3,160

0

  

Total Other

3,372

0

  

  

  

TOTAL UNENCUMBERED

  

                                                                 8,328,541

     5,336,677                                    

  

  

Other payables

279,793

TOTAL 

  

                                                              21,941,402

    10,993,326                                    

  

  

(1) The portfolio includes the fair value of assets operated directly by the company (head office, Flex Office). It does not include assets consolidated under the equity method or real estate inventories (trading, development).

The borrowings are valued after their initial recognition at cost, amortised based on the effective interest rate.

Breakdown of borrowings at their nominal value according to the time left to maturity and by interest-rate type:

(In € thousand)

  

Outstanding at 30/06/2024

  

Delivery date

Less than 1 year

  

Outstanding at 30/06/2025

  

Maturity from 1 to 5 years

  

30/06/2029

(more than 5 years)

Fixed-rate financial liabilities

6,663,255

435,959

6,227,296

2,907,850

France Offices – Bank borrowings

124,287

1,004

123,283

123,283

0

France Offices – Other

276,108

0

276,108

276,108

0

Germany Offices – Bank borrowings

186,000

0

186,000

186,000

0

Hotels in Europe – Bank borrowings

79,889

0

79,889

79,889

0

Hotels in Europe – Other

3,685

0

3,685

3,685

0

German Residential – Bank borrowings

1,049,140

134,953

914,187

491,771

422,416

German Residential – Other

41

2

39

9

30

imageOutstanding at

image

Total borrowings and convertible bonds 

1,719,149

135,959

1,583,191

1,160,745

422,446

France Offices – Bonds

2,893,000

0

2,893,000

1,095,000

1,798,000

Italy Offices – Bonds

600,000

300,000

300,000

300,000

0

imageFloating-rate financial liabilities                                                                                           4,330,071                                                                 3,642,082                       1,824,074                          1,818,008

France Offices – Bank borrowings                                                                                           746,110                                                                    742,664                          510,093                               232,571

Hotels in Europe – Bank borrowings

1,037,477

101,883

935,594

627,473

308,121

German Residential – Bank borrowings

1,837,984

223,311

1,614,674

436,508

1,178,166

image

Total borrowings and convertible bonds                                                                            3,971,071                         328,990                        3,642,082                       1,824,074                          1,818,008

France Offices – Commercial paper                                                                                         50,000                             50,000                                         0                                        0                                           0

Hotels in Europe – Commercial paper                                                                                  309,000                           309,000                                         0                                        0                                           0

image

Total debts represented by securities                                                               

359,000             

359,000         

           0       

           0       

0

TOTAL                                                                                                                         

10,993,326       

1,123,949      

9,869,377       

4,731,924       

5,137,454

Debt by operating segment at 30 June 2024 (in € million):

image

                                                                                                            285                                                                         

        3.2.5.11.4.        Derivatives

Derivative instruments consist mainly of rate hedging instruments put in place as part of the Group’s interest rate hedging policy.

Fair value of net derivative instruments:

Premiums –

Restructuring balances

P&L  impact

Impact on  shareholders’ equity

30-juin-24 Net

20,525

-2,560

140,832 

1,085

3,090

-7,334

4,175 

3,058

12,461 

20,687

-8,217

117,577 

1,200

12,252

105,716 

22,810

36,526

-15,551

380,762 

Of which

Cash instruments –

Liabilities

-195,053

Cash instruments – Assets

575,815

image(In € thousand)                                                                                        31 Dec 23       

Net

France Offices                                                                                              122,868       

Italy Offices                                                                                                        7,334       

Germany Offices                                                                                              9,404        

Hotels in Europe                                                                                          105,108       

German Residential                                                                                       92,264       

image  336,977             

The total impact of the value adjustments of derivatives on the income statement was +€36.5 million. In accordance with IFRS 13, the fair values include the counterparty default risk (-€11.3 million).

For Offices in Italy, the refinancing of the SICAF debt led to the cancellation of existing financial instruments (qualified as cash flow hedges) and the implementation of new derivatives (fair value impact of +€3 million).

The impact on equity of -€8.2 million on the Hotels in Europe line corresponds to the change in the exchange

rate of Cross Currency Swaps used to hedge the net investments in the United Kingdom (Net Investment Hedge).

The “Unrealised gains and losses relating to changes in fair value” line item in the Statement of Cash Flows (+€265.9 million), which makes it possible to calculate cash flows from operating activities, mainly incorporates the impact on net income of changes in the value of cash instruments (-€36.5 million), and changes in the value of the portfolio (+€302.5 million).

Breakdown of hedging instruments by maturity of notional values:

(In € thousand)                                                                                                   

At 30 June 2024

At less than 

                       

one year

From 

  

1 to 5 years

At more than 5 years

Fixed hedge                                                                                                       

Fixed rate payer swap                                                                                     

  

5,863,279 

                                 176,035        

1,645,900             

4,041,344 

Fixed rate receiver swap                                                                                

2,614,289 

                              -450,000          

1,554,289             

1,510,000 

Total SWAP                                                                                                          

3,248,990 

                                626,035    

91,611    

2,531,344 

Optional hedge                                                                                                 

Fixed borrower swaption sale                                                                      

  

500,000 

                                              0        

              0        

500,000 

Cap purchase                                                                                                     

317,325 

                               -101,066        

     369,091        

49,300 

Floor purchase                                                                                                  

28,000 

                                              0        

       28,000         

Floor sale                                                                                                             

82,300 

                                              0    

33,000    

49,300 

Hedge balance as at 30 June 2024:

(In € thousand)                                                                                                                                                                                                       Fixed rate                                                     Floating rate

image

Borrowings and financial debt (including creditor banks)                                                                                                                          6,663,255                                                          4,418,656

Net financial liabilities before hedging

6,663,255

4,418,656

Fixed hedge – Swaps                                                                                                                                                                                                                                                                         -3,248,990

Optional hedge – Caps                                                                                                                                                                                                                                                                          -317,325

imageTotal hedges                                                                                                                                                                                                                                                                                                                 -3,566,315

        3.2.5.11.5.        Rental liabilities

The balance of rental liabilities as at 30 June 2024 stood at €323 million, compared to €320 million at 31 December 2023, an increase of €3 million. This change is mainly due to the indexation of leases (+€2 million).

At 30 June 2024, the interest expense relating to these rental liabilities was €8.1 million.

Breakdown of rental liabilities by maturity

(In € thousand)                                                                                                       

At 30 June 2024

At less

          than one year

From 1 to 5

  years

From 5 to 25

  years

At more than 25 years

Lease liabilities on the balance sheet                                                             

317,850 

                             8,453        

      22,069       

         56,842       

230,485

Rental liabilities in liabilities held for sale                                                     

5,727 

                                  119      

          429       

          4,204        

975

Rental liabilities                                                                                                      

323,577 

                             8,572       

      22,499       

         61,046       

231,460

Excluding debts raised without recourse to the Group’s real estate companies, the debts of Covivio and its subsidiaries generally include bank covenants (ICR and LTV) applying to the borrower’s consolidated financial statements. If these covenants are breached, early debt repayment may be triggered. These covenants are established in Group Share for Covivio and for Covivio Hotels.

With       respect       to      Covivio      Immobilien       (German

Residential), for which almost all of the debt raised is “non-recourse” debt at subsidiaries, portfolio financings do not contain any covenants related to LTV and ICR. 

The most restrictive consolidated LTV covenants amounted to 60% for Covivio and Covivio Hotels at 30 June 2024.

The most restrictive consolidated ICR covenants

amounted to 200% for Covivio and Covivio Hotels at 30 June 2024. 

Concerning Covivio, corporate credit facilities usually include an asset-secured debt covenant (100% scope), the cap on which is set at 25% and which measures the ratio of secured debt (or debt with guarantees of any kind) to asset value.

Covivio group’s banking covenants were fully complied with at 30 June 2024, as they stood at 43.4% for Group Share LTV, 606% for Group Share ICR, and 4.2% for the asset-secured debt ratio. 

No financing has an accelerated payment clause contingent on Covivio or Covivio Hotels’ rating, which is currently BBB+, stable outlook (Standard & Poor’s rating).

Consolidated LTV                                                                                                            Company

                                                                           Scope                                     Covenant        Ratio threshold

€300 M (2016) – Orange                                                                                                Covivio

                                France Offices                                   ≤ 60%                            in compliance

€279 M (2017) – Roca                                                                                             Covivio Hotels

                             Hotels in Europe                                 < 60%                            in compliance

£400 M (2018) – Rocky                                                                                           Covivio Hotels

                             Hotels in Europe                                 ≤ 60%                            in compliance

€130 M (2019) – REF I                                                                                             Covivio Hotels

                             Hotels in Europe                                 ≤ 60%                            in compliance

Consolidated ICR                                                                                                            Company

                                                                           Scope                                     Covenant        Ratio threshold

€300 M (2016) – Orange                                                                                                Covivio

                                France Offices                                  ≥ 200%                           in compliance

€279 M (2017) – Roca                                                                                              Covivio Hotels

                             Hotels in Europe                                > 200%                           in compliance

£400 M (2018) – Rocky                                                                                            Covivio Hotels

                             Hotels in Europe                                ≥ 200%                           in compliance

€130 M (2019) – REF I                                                                                              Covivio Hotels

                             Hotels in Europe                                > 200%                           in compliance

Also, most of the covenants on mortgage financing are specific to the scopes financed. The main purpose of these covenants, normally LTV Scope and sometimes

ICR or DSCR Scope, is to frame the use of financing lines

by correlating it with the value of the underlying assets provided as collateral or the level of debt service coverage of net rental income.

imageimage        3.2.5.11.6.         Bank covenants 


        3.2.5.12.                     Provisions for contingencies and expenses

3.2.5.12.1.       Accounting              principles                related     to provisions for risks and charges

Retirement commitments

The retirement commitments are recognised in accordance with revised IAS 19. Provisions are recorded on the balance sheet for the liabilities arising from defined benefits pension schemes for existing staff at the reporting date. They are calculated according to the projected credit units method based on valuations made at each reporting date. The past service cost corresponds to the benefits granted, either when the company adopts a new defined-benefits scheme, or when it changes the level of benefits of an existing scheme. When new benefits are granted upon adoption of a new scheme or change in an existing scheme, the past service cost is immediately recognised in the income statement. 

Conversely, when the adoption of a new scheme or change in an existing scheme gives rise to the vesting

        3.2.5.12.2.         Table of provisions 

of benefits after its implementation date, the past service costs are recognised as an expense on a straight-line basis over the average remaining period until the benefits become fully vested. Actuarial gains and losses result from the effects of changes in actuarial assumptions and experience adjustments (differences between actuarial assumptions and what has actually occurred). The change in these actuarial gains and losses is recognised in “Other items” of comprehensive income. 

The expense recognised in operating income includes the cost of the services rendered during the year, amortisation of past service costs and the effects of any reduction or liquidation of the scheme; the cost of discounting is recognised in net financial income. The valuations are made taking into account the Collective Agreements applicable in each country and in keeping with the various local regulations. For each employee, the retirement age is the social security eligibility age.


(in € thousand)  

                   31 Dec 23                     Charges                  Transfer                Reversal of provision                

image                            3,762                               107                                                                                                       

30 June 24

Other provisions for litigation

3,497

Other provisions

                            7,273                                 68                                                        -444                       -266       

6,631

Provisions subtotal – current liabilities

                          11,035                              175                                                        -444                       -638       

10,128

Provisions for retirement benefit

                         34,444                               885                                                         -808                             -1      

34,520

Provisions for long-service awards

                                998                                20                                                                                              -2      

1,016

Provisions sub-total – non-current liabilities

                         35,442                               905                                                         -808                            -3      

35,536

TOTAL PROVISIONS

                          46,477                          1,080                               0                     -1,252                      -641       

45,664

The provisions for litigation break down as €2.6 million for France Offices, €0.6 million for Hotels in Europe and €0.2 million for Italy Offices.

The provision for retirement indemnities totalled €34.5 million at 30 June 2024 (including €31.2 million for German Residential). The pension reform of IAS 19 commitments is not material to the financial

statements. 

The main actuarial assumptions used to estimate the commitments in France were as follows:

•       rate of pay increase: managers 2%, non-managers 2%;

•       discount rate: 3.55% (TEC 10 n +50 bps).

98

The main actuarial assumptions used to estimate the commitments in Germany were as follows

                                                                                                                                                                                                                       German residential                            German offices

30 June 24

31 Dec 23

30 June 24

31 Dec 23

4.30%

4.30%

3.85%

3.85%

2.50%

2.50%

2.00%

2.00%

1% / 2%

1% / 2%

-146

-320

0

0

-672

-1,332

0

-6

0

0

0

0

-818

-1,652

0

-6

imageAssumptions used in calculating provisions for retirement benefit obligations in Germany

image 

Discount rate                                                                                                                                                                               

Annual wage growth                                                                                                                                                                 

Rate of social security charges                                                                                                                                               

IMPACT OF PROVISIONS FOR RETIREMENT BENEFITS ON THE INCOME STATEMENT (in €k)                                

Cost of services rendered during the fiscal year                                                                                                               

Financial cost                                                                                                                                                                               

Effects of plan reductions/settlements                                                                                                                                

imageTOTAL IMPACT ON THE INCOME STATEMENT

        3.2.5.13.            Other short-term liabilities

30 June 24

46,875 

68,781 

8,510 

26 

34,719 

158,911

(in € thousand)                                                                                                                                                                                                            31 Dec 23                                                  Change

image                                                                        image                                                                                                                                                     

Social debt   39,132   7,743  Tax payables   31,233   37,548 

Current accounts – liabilities                                                                                                                                                                                           4,386                                                      4,124 

Dividends to be paid                                                                                                                                                                                                              126                                                       -100 

Other payables                                         43,125                                   -8,406                                                             

image                                                                      image

        3.2.5.14.               Recognition of financial assets and liabilities

Amount appearing in the valued statement of financial position:

Categories according to IFRS 9

Item concerned in the statement of                      30

financial position (in €k)

June 2024

          Net                                                                   At fair value

At amortised At fair value through the cost through equity income statement

Financial assets

Non-current financial assets

15,713

2,538

8,883

4,292

Loans and receivables

Non-current financial assets

142,787

142,787

Total non-current financial assets

158,500

145,325

Loans and receivables

Trade receivables(1)

454,011

454,011

Assets at fair value

Derivatives at fair value(2)

575,815

575,815

Assets at fair value through profit or loss

Cash and cash equivalents

985,415

985,415

Total Financial Assets

  

2,173,741

599,336

8,883

1,565,522

Liabilities at amortised cost

Financial liabilities

10,993,326

10,993,326

Liabilities at fair value through P&L

Financial instruments 

195,053

195,053

Liabilities at amortised cost

Guarantee Deposits (Long-term and Short-term)

37,295

37,295

Liabilities at amortised cost

Trade payables(4)

310,807

310,807

Total Financial liabilities

  

11,536,481

11,341,428

0

195,053

imageFair value

15,713 142,787

158,500

454,011

                                                                                                                                                                                                                        575,815

                                                                                                                                                                                                                       985,415

2,173,741

10,526,918(3)

                                                                                                                                                                                                                       195,053

37,295

310,807

11,070,073

(1)  Excluding deductible for €3,883 thousand.  

(2)  In Note 3.2.5.11.4 "Derivative instruments", the hedging instruments for Italy Offices set up in 2024 are measured at fair value through profit or loss. 

(3)  The difference between the net book value and fair value of fixed-rate debt (valued at the risk-free rate, excluding credit spreads) is €466,408 thousand. 

     The impact of the credit spread would be +€10,424 thousand.

(4)  €264.6 million in trade payables and €46.2 million in fixed asset trade payables.         

Breakdown of financial assets and liabilities at fair value:

The table below presents the financial instruments at fair value broken down by level:

•       Level 1: financial instruments listed in an active market;

•       Level 2: financial instruments whose fair value is evaluated through comparisons with observable

market transactions on similar instruments or based on an evaluation method whose variables include only observable market data;

Level 3: financial instruments whose fair value is determined entirely or partly by using an evaluation method using an estimate that is not based on market transaction prices on similar instruments.

K€

                    Level 1                         Level 2                         Level 3                               Total

image

Non-current financial assets at fair value through shareholders’ equity

8,883          

8,883

Non-current financial assets at fair value through the income statement

 4,292         

4,292

Derivatives at fair value through shareholders’ equity

           0      

0

Derivatives at fair value through the income statement

575,815         

575,815

Cash equivalents through the income statement

985,415         

985,415

TOTAL FINANCIAL ASSETS

0

1,561,230

13,175

1,574,405

Derivatives at fair value through the income statement                                                                                                                                            195,053                                                            195,053

TOTAL FINANCIAL LIABILITIES

0

195,053

0

195,053

3.2.6.           Notes related to the statement of income 3.2.6.1.         Accounting principles

Rental income

According to the presentation of the income statement, rental income is treated as revenues. Net income from hotels under management and Flex Office, car park receipts, net income from property development and services are now shown in specific lines of the statement of net income, after net rental income.

As a general rule, the invoicing is quarterly except for the German Residential activity where the invoicing is monthly. The rental income of investment properties is recognised on a straight-line basis over the term of the ongoing leases. Any benefits granted to tenants (rentfree periods, step rental leases) are amortised on a straight-line basis over the duration of the lease agreement, in compliance with IFRS 16, and offset against investment properties.

Share-based payments (IFRS 2)

The application of IFRS 2 has resulted in the recognition of an expense for benefits granted to employees as share-based payments. This expense is recorded in income for the year under overheads. 

Free shares are valued by Covivio at the date of their award according to a binomial valuation model. This model takes into account the features of the plan (price and exercise period), market data upon award (risk-free rate, share price, volatility and expected dividends) and assumptions of beneficiary behaviour. The benefits thus granted are recognised as expenses over the vesting period, and offset by an increase in the consolidated reserves.

        3.2.6.2.              Operating income

        3.2.6.2.1.       Rental income

(in € thousand)                                                              

30 June 24

                           30 June 23                               Change in K€

  

Change in %

France offices

94,219 

                                 101,105                                          -6,886 

-6.8%

Italy offices

66,497 

                                   65,305                                            1,192 

1.8%

Germany offices

24,381 

                                   23,395                                                986 

4.2%

Total Offices rental income                                       

185,097 

                                189,805                                           -4,708 

-2.5%

Hotels

133,531 

                                 127,726                                            5,805 

4.5%

German residential

150,698 

                                 145,613                                            5,085 

image

                                463,144                                            6,182

3.5%

TOTAL RENTAL INCOME                                              

469,326

1.3%

The rental income consists of rental and similar income (e.g. occupancy fees and entry rights)

invoiced for investment properties during the period. Rent exemptions, step rental schemes and


entry rights are spread out over the fixed term of the lease.

The changes in rents by asset-type break down as • follows:

•       a decrease in rents for France Offices (-€6.9 million, i.e. -6.8%), mainly due to and the effect

of vacancies (-€14.5 million) to feed the • development pipeline, and by asset disposals (-€6 million). This decrease was partially offset by the effect of leases (+€6.1 million), the delivery of assets (+€3.1 million), and the

•       indexation of rents (+€4.1 million);

•       an increase in rents for Italy Offices (+€1.2 million, i.e. +1.8%), mainly due to the indexation

of rents (+€2.5 million) and new leases and re-

Rental income in 2024 by operating segment (in € million):

image

Europe

                                                        134 - 28%

30 June 24

469,326 

-94,167 

94,167 

-23,457 

-14,017  -544 

431,308

-8.1%

        3.2.6.2.2.           Real estate expenses

(in € thousand)                                                                                                                      

image

Rental income                                                                                                                       

Rebillable expenses                                                                                                            

Income from rebilling of expenses                                                                                 

Unrecovered property operating costs                                                                          

Expenses on properties                                                                                                     

Net losses on unrecoverable receivables                                                                      

imageNET RENTAL INCOME                                                                                                          

RATE FOR PROPERTY EXPENSES                                                                                       

Unrecovered           rental       costs:       these       expenses correspond to charges on vacant premises. Unrecovered rental expenses are presented net of re-invoicing to the income statement. 

In accordance with IFRS 15, income from reinvoicing of rental expenses is presented separately above when the company acts as principal. 

leasing contracts, (+€1 million), partially offset by disposals (-€2.5 million);

an increase in rents for Germany Offices (+€1 million, +4.2%), mainly due to the delivery of the Beagle asset in 2023 (+€0.5 million), and the indexation of rents;

an increase in rents of Hotels in Europe (+€5.8 million, i.e. +4.5%), mainly due to the increase in variable rents in Spain (+€2.8 million), and by the impact of rent indexation (+€2.7 million);

an increase in rents in German Residential (+€5 million, or +3.5%) mainly related to rent indexation (+€6 million) offset by the effect of disposals (-€1.4 million).  

                       30 June 23                     Change in K€                              Change in %

image

                             463,144                                     6,182                                         1.3%

                              -97,813                                    3,645                                         -3.7%

                                97,813                                  -3,645                                         -3.7%

                             -20,432                                   -3,024                                        14.8%

 -14,849   832   -5.6%  -1,635   1,091   n.a.

image                             426,227                                     5,081                                          1.2%

                                 -8.0%       

Expenses on properties: these consist of rental expenses that are borne by the owner, expenses related to works and expenses related to property management. 

Net losses on unrecoverable receivables: these consist of losses on unrecoverable receivables and net provisions on doubtful receivables. The change is mainly due to reversals of deferred payments in Spain for +€1 million.


        3.2.6.2.3.                 EBITDA from hotel operating and Flex Office and Net Income from other activities

(in € thousand)                                                                                                                     

30 June 24

                       30 June 23                  Change in K€  

Change in %

Revenues from hotel operating activity and Flex Office                                          

155,932

                             149,428                                 6,504  

4.4%

Operating expenses of hotel operating activity and Flex Office                            

-117,244

                            -109,815                                -7,429  

 image 

                                  2,246                                 8,557  

6.8%

EBITDA from hotel operating activity and Flex Office                                               

38,688

-2.3%

Net income from development                                                                                      

10,803

381.0%

Income from other activities                                                                                           

1,578

                                  2,410                                   -832  

-34.5%

Expenses of other activities                                                                                             

-987

                                 -1,528                                     541  

image

                                42,741                                  7,341

-35.4%

Income from other activities                                                                                           

11,394

264.3%

                         

  

TOTAL INCOME FROM OTHER ACTIVITIES                                                                    

50,082

17.2%

EBITDA from Hotel Operating activity and Flex Office consists of the EBITDA of the hotels under operation (+€30.5 million at 30 June 2024 versus +€31.9 million at 30 June 2023) and the income from Flex Office (+€8.2 million as at 30 June 2024 versus +€7.7 million as at 30 June 2023).

The decrease in the EBITDA of hotels under management of -€1.4 million is linked to the end of the guaranteed minimum on a hotel in Roissy (-€1 million), the closure for works on a hotel in Brugge, offset by the full-year effect of the opening of a hotel in Paris.

Flex Office’s results increased by +€0.5 million, mainly in Wellio Italy.

Net income from other activities includes income from property development in Germany (€3.7 million), France (€6.2 million) and Italy (€0.9 million) and the car parks business (€0.6 million). The increase in real estate development activity compared to last year is mainly due to the progress of residential projects in France, as well as the gradual recovery in Germany in a market that was at a standstill in the first half of 2023.

        3.2.6.2.4.           Net operating costs

These consist of head office expenses and operating costs net of revenues from management and administration activities.

(in € thousand)                                                                                                                      

30 June 24

                       30 June 23                     Change in K€         

Change in %

Management and administration income                                                                    

  

9,388 

                                  9,930                                     -542   

-5.5%

Business expenses                                                                                                               

-1,877 

                                -2,646                                        769       

-29.1%

Overheads                                                                                                                             

-62,450 

                              -63,195                                        745   

      image    

                              -55,912                                        972       

-1.2%

                         

  

  

TOTAL NET OPERATING COSTS                                                                                         

-54,940

-1.7%

Overheads include personnel expenses, which are specifically analysed in note 3.2.7.1.1.

        3.2.6.2.5.                 Depreciation of operating assets and net change in provisions and other

(in € thousand)                                                                                                

30 June 24

                               30 June 23

  

Change in K€

Depreciation of operating assets                                                              

-35,081 

                                     -34,787 

-293 

Net change in provisions and other                                                         

9,258 

                                        15,716 

-6,458 


The item "Depreciation of operating assets" amounted to -€35 million at 30 June 2024, compared with -€34.8 million at 30 June 2023. This item mainly includes: 

•       depreciation of hotels in operation for -€24 million;

•       net reversals of exceptional impairments in Germany on hotels in operation for a total of €3.6 million. 

The change in the "Net change in provisions and other" item is mainly due to the +€7.7 million reversal of the provision for taxes on the operating properties Hotels scope in Germany in 2023, and the reduction in provisions for pension commitments of -€0.9 million.

This item mainly consists of the rebilling of long-term leases conferring in rem rights to tenants (€6.6 million as at 30 June 2024 versus €6.7 million as at 30 June 2023) when the rental expense is restated. Indeed, in order not to distort the real-estate expense ratio and following the cancellation of the rental expense in accordance with IFRS 16, the income from rebilling tenants is presented as a net change in provisions and others. 

        3.2.6.3.               Income from asset disposals

(in € thousand)                                                                                                                      

30 June 24

                       30 June 23                   Change in K€  

Change in %

Income from asset disposals(1)

 

167,816

                             206,276                             -38,460  

-18.6%

Disposal values of assets sold(2)

-164,795

                           -209,941                                45,146  

image

                                -3,665                                  6,686

-21.5%

NET INCOME FROM ASSET DISPOSALS                                                                         

3,021

 

(1) Sale price net of disposal costs.

(2) Corresponds to the appraisal values published at 31 December 2023. 

Income from asset disposals by business segment is shown in note 3.2.8.9.

         3.2.6.4.               Change in the fair value of buildings

(in € thousand)                                                                                                                                          

                              30 June 24

                             30 June 23  

Change in K€

France Offices                                                                                                                                            

-80,154

                                 -391,236  

311,082

Italy Offices                                                                                                                                                 

-31,881

                                   -39,460  

7,579

Hotels in Europe                                                                                                                                       

20,907

                                   -44,043  

64,950

German Residential                                                                                                                                 

-71,602

                                 -650,233  

578,631

Germany Offices                                                                                                                                       

-139,721

                                  -152,710  

12,989

TOTAL CHANGE IN THE VALUE OF PROPERTIES                                                                                

-302,451

                              -1,277,682  

975,231

The line “Net depreciation, amortisation and provisions” of the cash flow statement of €35.3 million mainly consists of the €35 million in depreciation and amortisation of operating assets.


The -€302.5 million fall in the fair value of properties reflects valuation decreases of -€71.6 million in the German Residential portfolio (mainly Berlin assets), and -€252 million in the entire Offices in Europe portfolio, of which -€139.7 million related to Germany Offices. This was due to the increase in capitalisation and discount rates after the rise in interest rates, which was only partly offset by the increase in prime rents and indexation.

        3.2.6.5.            Net      income      from       disposals        of

securities

The result of the disposal of securities mainly consists of the impact of the sale to CDC of a 49% stake in the asset portfolio of a German Residential subsidiary (-

€0.6 million).  

        3.2.6.6.                Net income from changes in scope

They mainly record the acquisition costs of consolidated equity investments, which, in accordance with IFRS 3 “Business Combinations”, must be recognised as expenses for the fiscal year. 

The line “Impact of changes in the scope of consolidation related to investing activities” (§39 of IAS 7) of €83 million in the cash flow statement mainly

corresponds to the sale price of a 49% stake in the asset by the impact of the change in the stake in an Italian portfolio of a German subsidiary (+€86 million) reduced subsidiary (-€2.6 million).

        3.2.6.7.               Cost of the net financial debt 

(in € thousand)

  

30 June 24

                   30 June 23        

Change in K€           

Change in %

Interest income on cash transactions

Interest expense on financing operations

  

20,366 

-160,675 

2,243    

-121,056    

18,123    

-39,619    

808.0% 32.7%

  

Regular amortisation of loan issue costs

  

-9,330 

-6,332    

-2,998    

47.4%

Net expenses on hedges

  

67,759 

  

  

39,409    

28,350    

71.9%

Cost of net debt

  

-81,881

             -85,736        

            3,856        

-4.5%

Average annual rate of debt

  

1.53%

                1.46%      

                      

  

The change in the cost of net financial debt of +€3.9 million is mainly due to:

•       the +€18 million increase in financial income on cash transactions; 

•       the increase in interest expenses on bank loans (€40 million) due to the increase in the average

(in € thousand)

  

30 June 24

                  30 June 23        

Change in K€   

Change in %

Cost of the net financial debt

  

Interest cost for rental liabilities

  

-81,881 

  

-8,122 

  

  

-85,736    

       -7,831    

3,856    

    -291    

-4.5%

  

3.7%

  

  

  

Valuation of financial instruments

  

  

36,526 

                          

-29,229    

    

65,754    

  

Changes in the fair value of financial instruments

  

36,526 

  

-29,229    

65,754    

  

  

Financial expenses net of discounting

  

  

  

                          

0    

    

2    

  

Foreign exchange gains and losses

406 

366    

39    

Discounting and foreign exchange gains or losses

  

408 

  

366    

41    

  

Exceptional amortisation of loan issue costs

-1,520 

-272    

-1,248    

Others

Exceptional amortisation of loan issue costs

-1 

-1,521 

  

-79    

-351                 

78    

-1,170        

  

TOTAL FINANCIAL INCOME

  

-54,590

  

           -122,780       

68,190   

N/P

        3.2.6.8.              Net financial income

interest rate on debt, partially offset by financial interest on hedges (+€28 million), due to the increase in interest rates;

•       the increase in capitalised financial expenses of

+€1.5 million.


Rising interest rates impacted the change in the fair value of financial instruments by +€65.7 million. Thus, net financial income amounted to a net expense of -€54.6 million at 30 June 2024 versus a net expense of -€122.8 million at 30 June 2023.

The line “Cost of net financial debt and interest expenses on rental liabilities” of the cash flow statement of €80.2 million corresponds to the cost of net financial debt for -€81.9 million restated for the amortization of loan issue expenses for +€9.3 million, interest expense on rental liabilities for -€8.1 million and foreign exchange gains and losses for -€0.4 million.

        3.2.6.9.               Current and deferred tax liabilities

3.2.6.9.1.         Accounting              principles                related     to current and deferred taxes

SIIC tax regime (French companies) 

Opting for the SIIC tax regime involves the immediate liability for an exit tax at the reduced rate of 19% on unrealised capital gains relating to assets and securities of entities not subject to corporation tax.

The exit tax is payable over four years, in four instalments, starting with the year the option is taken up. In return, the company is exempted from income tax on the SIIC business and is subject to distribution obligations. 

(1)      Exemption of SIIC revenues

The revenues of the SIIC are exempt from taxes concerning:

•       income from the leasing of buildings;

•       capital gains realised on asset disposals, investments in companies having opted for the tax treatment or companies not subject to corporation tax in the same business, as well as the rights under a lease contract and real-estate rights under certain conditions;

•       dividends of SIIC subsidiaries.

(2) Distribution obligations

The distribution obligations associated with exemption profits are the following:

•       95% of the earnings derived from asset leasing;

•       70% of the capital gains from disposals of assets and shares in subsidiaries having opted for the tax treatment or subsidiaries not subject to corporation tax with a SIIC corporate purpose for two years;

•       100% of dividends from subsidiaries that have opted for the tax treatment.

The exit tax liability is discounted on the basis of the initial payment schedule determined from the first day the relevant entities adopted SIIC status. 

The liability initially recognised is discounted and an interest charge is applied at each closing, allowing the liability to reflect the net discounted value as at the closing date. The discount rate used is based on the yield curve, given the deferred payment.

As at 30 June 2024, there are no exit tax liabilities on the balance sheet.

Ordinary law regime and deferred taxes

Deferred taxes result from temporary differences in taxation or deduction and are calculated using the liability method, and on all temporary differences in the company financial statements, or resulting from consolidation adjustments. The valuation of the deferred tax assets and liabilities must reflect the tax consequences that would result from the method by which the company seeks to recover or settle the book value of its assets and liabilities at the end of the fiscal year. Deferred taxes are applicable to Covivio group entities that are not eligible for the SIIC tax regime.

A deferred tax asset is recognised in the case of deferrable tax losses in the likely event that the entity in question, not eligible for the SIIC regime, will have taxable future profits against which the tax losses may be offset.

In the case where a French company intends to opt directly or indirectly for SIIC tax treatment in the near future, an exception under the ordinary law regime is applied by anticipating the application of the reduced rate (exit tax) in the valuation of deferred taxes. SIIQ tax regime (Italian companies)

Following Beni Stabili’s merger with Covivio, the tax arrangements for Covivio’s permanent establishment in Italy changed after it left the SIIQ tax regime. It is now subject to the 20% tax on real-estate companies.

In Italy, following the adoption of the law on the revaluation of properties, the Group opted in 2021 for the tax revaluation of certain Italian assets.

SOCIMI tax regime (Spanish companies) 

The Spanish companies held by Covivio Hotels opted for the SOCIMI tax regime, effective on 1 January 2017. Opting for SOCIMI does not trigger an exit tax upon making the option. However, the capital gains on the period outside of the SOCIMI regime during which assets were held are taxable when disposing of said assets. 

The rental income from the leasing of assets and proceeds from disposals of assets held under the SOCIMI regime are tax exempt, provided 80% of rental profits and 50% of asset disposal profits are distributed. These capital gains are determined by allocating the taxable gains to the period outside the SOCIMI regime in a linear basis, over the total holding period. REIT regime (English companies)

Nine companies in the United Kingdom have opted for the REIT exemption regime from 1 January 2024. Opting for the REIT regime does not trigger an exit tax when the option is chosen.

The rental income from the leasing of assets held under the REIT regime are tax exempt, provided 90% of rental profits are distributed.

Capital gains on disposals are also exempt from tax.

         3.2.6.9.2.               Taxes and rates used by geographical area

(in € thousand)

              Taxes payable          

Deferred taxes 

  

Total

  

Deferred tax rate

France

Italy

                                 -398    

                                  -516    

-2,900  -3,763 

-3,298 

-4,279 

25.83%

20% - 24%

Germany

                               -3,611    

+14,489 

+10,878 

15,83%-30,18%

Belgium

                              -1,242    

-741 

-1,983 

25.00%

Luxembourg

                                 -457    

+2,640 

+2,183 

24.94%

United Kingdom

                                  -415    

-1,716 

-2,132 

25.00%

Netherlands

                                  -777    

+7 

-770 

25.80%

Portugal

                                 -380    

-972 

-1,352 

22.50%

Spain

                                        0    

+54 

+54 

25.00%

Ireland

                                    -98    

+89 

-9 

33.00%

Poland

                                    -86    

-2 

-88 

9.00%

Hungary

Czech Republic

                                    -91    

                                 -323    

image

                              -8,395    

+2 

-91 

-321 

9.00%

21.00%

TOTAL

7,187

  

-1,207

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(-) corresponds to a tax expense; (+) corresponds to a tax income

(1)                 In France, the tax rate for the 2024 fiscal year is 25.83%.

(2)                 Since the merger with Covivio and its exit from the SIIQ regime, Covivio in Italy has been subject to a 20% tax rate. For hotel companies in Italy, a rate of 24% is used, plus a regional tax rate of 3.9% on resident and non-resident companies.

(3)                 In Germany, the tax rate on property goodwill is 15.83%; however, for companies in the hotel operations activity, tax rates vary between 30.18% and 32.28%

(4)                 In Belgium, the tax rate for the 2024 fiscal year is 25%.

(5)                 In the United Kingdom, the tax rate applied from 1 April 2023 is 25%.

(6)                 In the Netherlands, the rate for the 2024 fiscal year is 25.8%.

(7)                 In Portugal, the tax rate used for the 2024 fiscal year is 21%, plus a regional tax rate of 1.5%.

(8)                 In Ireland, the tax rate for the 2024 fiscal year is 12.5% for operating activities, 25% for holding companies and 33% for gains on disposals.

(9)                 In Poland, the tax rate applied for the 2024 fiscal year is 9% for companies with revenues of less than €2 million per year, and 19% above that.

(10)              In the Czech Republic, the tax rate is 21% as of 1 January 2024.

Impact of deferred taxes on income  

(in € thousand)

  

30 June 24

                         30 June 23       

Variation

  

France Offices

  

  

-746 

  

                                           

-303    

  

-443

Italy Offices

-2,557 

2,145    

-4,702

Germany Offices

19,529 

21,122    

-1,593

Hotels

-6,064 

2,029    

-8,093

German Residential

-3,104 

112,551    

-115,655

Others

129 

10    

119

TOTAL

  

7,187

                             137,554   

-130,367

•       In Italy Offices, the deferred tax expense is mainly due to the increase in asset values.

•       Concerning Hotels in Europe, the -€8.1 million change is mainly due to the increase in the values of operating properties and the reversal of deferred

tax assets following the increase in results in Italy and the United Kingdom.

•       The deferred tax income of Germany Offices mainly relates to a decrease in the value of assets.

•       In German Residential the variation is mainly related to the large fall in asset values in 2023 and the reversal of deferred tax on a real estate

        3.2.7.      Other information

        3.2.7.1.                      Personnel remuneration and benefits

       3.2.7.1.1.           Staff costs

At 30 June 2024, personnel expenses presented in the statement of net income amounted to €80.1 million (compared with €81.4 million at 30 June 2023), mainly made up of €41.6 million under structural expenses and €36.7 million under EBITDA from Hotel Operating activity and Flex Office.

In the Overheads item, personnel expenses are €41.6 million at 30 June 2024. They include €2.7 million for free

Headcount by country in number of employees:

image

development project following its delivery in 2023 (+€13.9 million impact).

shares and a related social charge expense of €0.5 million. 

Headcount

At 30 June 2024, the headcount of fully consolidated companies, excluding companies in the Operating Properties business line, was 960 compared with 997 at 31 December 2023.

image


The average headcount in the first half-year of 2024 was 966 people.

The average headcount of the operating companies was 1,322 people at 30 June 2024, which was stable compared to 30 June 2023 (1,325 people).

        3.2.7.1.2.              Description of share-based payments

Covivio awarded free shares in the first half of 2024. The following assumptions were made for the free shares: 

image

Corporate Corporate   Corporate     Corporate     officers and/or

Plan of 15 February 2024                                                                                                                       officers – with                                             officers – with                                             officers – with                               employees – performance                       performance                        performance       without condition plan 1 condition plan 2                 condition plan 3                 performance condition plan 4

image                                                                                                   image                                                                                                                                        image   image 

Date awarded                                                                                                                                                     15-févr.-24                           15-févr.-24                           15-févr.-24                              15-févr.-24

Number of shares awarded                                                                                                                                     21,493                                 14,329                                  35,821                                     9,000 

Share price on the date awarded                                                                                                                          €41.60                                 €41.60                                  €41.60                                   €41.60

Exercise period for rights                                                                                                                                        3 years                                 3 years                                 3 years                                     3 years

Cost of forfeiture of dividends                                                                                                                              (€9.94)                                 (€9.94)                                  (€9.94)                                   (€9.94)

Actuarial value of the share net of dividends not collected during the  €31.66   €31.66   €31.66   €31.66  vesting period

Revenue-related discount:                                                                                                                                                                                                                                                                                                 

In number of shares                                                                                                                                                    3,200                                    2,134                                   5,334                                      1,340 

As percentage of share price on the date awarded                                                                                               15%                                      15%                                        15%                                         15%

Value of the benefit per share                                                                                                                                 €7.56                                   €6.81                                  €20.37                                   €25.47  

image


During the first half of 2024, the total number of free shares allocated was 80,643. As stated elsewhere, the corresponding expense is recognised in income over the entire vesting period.

Following the final allocation of the February 2020 and February 2021 plans, the expense calculated for previous fiscal years was revised downwards following the departure of employees for -€0.7 million (income).

The expense on free shares recognised at 30 June 2024 was €2.7 million (compared to €3.9 million at 30 June 2023). The associated URSSAF contribution was estimated at €0.5 million (expense). In addition, the URSSAF expenses paid in 2024 for the shares vested from the February 2020 and February 2021 plans were reclassified as free share expenses in the amount of €0.4 million. These expenses are presented in the income statement on the “Overheads” line.

The €2.7 million expense under free shares includes the impact of the 2020 plan for -€0.5 million, the 2021 plan for €1.4 million, the 2022 plan for €0.9 million, the 2023 plan for €0.7 million and the 2024 plan for €0.2 million.

        3.2.7.2.            Earnings      per      share      and       diluted

earnings per share

Earnings per share (IAS 33)

Basic earnings per share are calculated by dividing the income attributable to holders of ordinary Covivio shares (the numerator) by the average weighted number of ordinary shares outstanding (the denominator) over the period.

To calculate the diluted earnings per share, the average number of shares outstanding is adjusted to take into account the conversion of all potentially dilutive ordinary shares, in particular free shares being vested.

The impact of the dilution is only taken into account if it is dilutive.

The dilutive effect is calculated using the treasury stock method. The number calculated using this method is added to the average number of shares outstanding and becomes the denominator. To calculate the diluted earnings, the income attributable to the holders of ordinary Covivio shares is adjusted by:

•       all dividends or other items under potentially dilutive ordinary shares that were deducted to arrive at the income attributable to the holders of ordinary shares;

•       interest recognised during the fiscal year to the potentially dilutive ordinary shares;

•       any change in the income and expenses resulting from the conversion of the dilutive potential ordinary shares.


                                                                                                                                                                                                               Net income                                                        Net income 

from continuing operations 

Group Share (in €k)                                                                                                                                               

-8 364    

-8 364 

                        

Average number of undiluted shares                                                                                                              

                          

102 962 700    

  

102 962 700 

Total dilution impact                                                                                                                                            

602 108    

602 108 

Number of free shares (1)                                                                                                                                  

602 108    

602 108

                          

Average number of diluted shares                                                                                                                   

    

103 564 808                           

  

103 564 808 

Undiluted earnings per share (in €)                                                                                                                 

-0,08    

-0,08 

                        

                          

  

Impact of dilution – free shares (in €)                                                                                                            

0,00    

0,00 

                                                                                                

image  

(1) The number of shares being vested is broken down according to the following plans:

2020    plan       12 500

2021    plan     205 500

2022    plan       138 018

2023    plan      165 447

2024    plan      80 643

Total                602 108

        3.2.7.3.                Related-party transactions

The information mentioned below concerns the main related parties, namely equity affiliates. Transactions between related parties were carried out in accordance with the same terms and conditions as those applicable to arm’s length transactions.

Details of related-party transactions (in € thousand)

                                                                  Operating          Net financial            Balance

Cœur d'Orly

Equity affiliates

342 

7,688 

Monitoring of projects and investments, Loans, Asset and property fees

Euromed

Equity affiliates

138 

24,096 

Loans, Asset and property fees

Lénovilla

Equity affiliates

205 

9,937 

Loans, Asset and property fees

imagePartner Type of partner                                                         Comments income result sheet

image

        3.2.8.       Segment reporting

3.2.8.1.    Accounting              principles                relating    to             •              Hotels in Europe: commercial buildings largely in the operating segments – IFRS 8 hotel segment and Hotel Operating properties held

The Covivio group holds a wide range of real-estate by Covivio Hotels; assets to collect rental income and benefit from  German Residential: real estate housing assets in

appreciation in the assets held. Segment reporting is

Germany held by the Covivio group through its

organised by asset type. subsidiary Covivio Immobilien SE.

The operating segments are as follows: 

These segments are reported on and analysed regularly

• France Offices: office real-estate assets located in by Group management in order to make decisions on France; what resources to allocate to the segment and to

evaluate their performance. • Italy Offices: office real-estate and retail assets

          located in Italy;                                                                                              Following the sale of three car park management

companies and the transfer of all assets of FDL (France • Germany Offices: office real-estate assets located Residential) in 2022, the "Other" segment includes nonin Germany held by the Covivio group via its material activities. subsidiary Covivio Office Holding;

        3.2.8.2.              Intangible fixed assets

Others (incl.

                                                                                   France                    Italy                                                                German             Germany

31 December 2023 - (In € thousand)                                                                                                                      Hotels                                                                                             France                           Total

                                                                                   Offices              Offices                                                           Residential                  offices

Residential)

image                                                                                                                                                                                                                                                                                                                                                        

 Net                                                                                                                      11,848                5,136                   117,578                                   1,812                         16                       215                   136,605

30 June 2024 - (In € thousand)                                                

France Offices

Italy Offices

Hotels

German

Residential

Germany offices

Others (incl. France                         Residential)

Total

Intangible fixed assets and goodwill

11,418 

4,883 

116,789 

2,297 

175                       

135,570 

 Net                                                                                                

11,418 

4,883 

116,789 

2,297 

              175       

135,570 

        3.2.8.3.              Tangible fixed assets

Others (incl.

31 December 2023 - (In € thousand)                                                        France                     Italy                      Hotels                               German             Germany                  France                          Total

                                                                                  Offices               Offices                                                            Residential                  offices

 Operating properties 

230,213 

116,059 

1,069,262 

46,119 

3,640 

2,805   

1,468,098 

 Other fixed assets

8,541 

2,594 

16,138 

12,374 

285 

              46       

39,978 

 Fixed assets in progress 

47,461 

27,751 

10,151 

                0       

85,363 

imageResidential)

image

 Net                                                                                                                  286,215            146,404                 1,095,551                                 58,493                    3,925                     2,851              1,593,439

France Offices

Italy Offices

Hotels

German

Residential

Germany offices

Others (incl. France            Residential)

Total

267,548 

113,827 

1,057,917 

29,137 

2,475   

1,470,904 

8,464 

2,365 

15,003 

12,603 

264 

              39       

38,738 

8,041 

23,229 

23,510 

0                                                

54,780 

284,053

139,421

1,096,429

41,740

264

          2,514       

1,564,421

image30 June 2024 - (In € thousand)                                               

image  

 Operating properties                                                               

 Other fixed assets                                                                     

 Fixed assets in progress                                                           

 Net                                                                                                

In German Residential, the change of (-€17 million) is mainly related to the reclassification of land as buildings under development (-€9.5 million) and real estate development inventory (-€7.6 million).


In Italy Offices, the change of (-€7 million) includes depreciation and amortisation of operating properties and tangible fixed assets (-€2.2 million) and the transfer of advances and down payments to properties under development (-€4.5 million).

In France Offices, the change in property, plant and equipment (+€2 million) mainly corresponds to the work carried out on the future L'Atelier head office located in Paris for €2.7 million and to depreciation (-€0.7 million).

        3.2.8.4.                Investment properties/Assets held for sale

31 December 2023 - (In € thousand)

France Offices

Italy Offices

Hotels

German

Residential

Germany offices

Others

(incl. France   

Residential)

Total

image

image

image 

 

 

 

  

 Investment properties

3,843,604

2,381,640

4,655,245

7,321,634

844,310

0  

19,046,433

 Assets held for sale

114,950

41,986

161,915

7,586

0

212  

326,649

 Development portfolio 

331,876

299,447

0

39,029

469,686

0  

1,140,038

image

 TOTAL                                                                                                          4,290,430         2,723,073                4,817,160                         7,368,249            1,313,996                           0           20,513,120

France Offices

Italy Offices

Hotels

German

Residential

Germany offices

Others

(incl. France   

Residential)

Total

3,794,230

 

2,271,403

 

4,484,567

 

7,262,230

 

764,575

 

0  

18,577,005

90,579

50,090

362,031

17,801

0

212  

520,713

360,850

352,313

0

44,586

450,084

0  

1,207,833

4,245,659

2,673,806

4,846,598

7,324,617

1,214,659

212  

20,305,551

30  imageJune 2024 - (In € thousand)             

image                                                                                                                                                                                                                                           

 Investment properties                                                             

 Assets held for sale                                                                    

 Development portfolio                                                            

                          

 TOTAL                                                                                            

The -€208 million change is mainly due to the negative change in fair value (-€302 million), disposals during the period (€164 million), offset by works including fees, brokers' fees and financial interest (+€219 million), by the reclassification (+€1 million) of other assets belonging to a Hotels in Europe company and the change in exchange rates (+€16 million), see

3.2.5.1.3.

        3.2.8.5.              Financial assets

image

Others 

31  December 2023 - (In € thousand)                                                 France            Italy                Hotels            German         Germany       (incl. France                         Total

                                                                                 Offices              Offices                                                           Residential                  offices

Residential)

image                                                                                                                                                                                                                                                                                                                                                      

France Offices

Italy Offices

Hotels

German

Residential

Germany offices

Others  (incl. France Residential)

  

Total

41,872 

55,587 

19 

97,486 

652 

4,078 

2,739 

8,244 

15,713 

39,200 

5,822 

-0 

248 

31 

45,301 

81,724

9,900

58,326

8,500

31

19

  

158,500

122,083 

54,877 

207,115 

384,075 

203,807

64,777

265,441

8,500

31

19

542,574

image 0  27  -0  248  31  0   306   59,453 11,016 31 117,782

image  

Loans                                                                                            

Other financial assets                                                              

Receivables on financial assets                                             

imageSub-total non-current financial assets                                

Investments in equity affiliates                                             

Total financial assets                                                                

        3.2.8.6.              Contribution to equity

31 December 2023 - (In € thousand)

image

France & Italy offices

Hotels in Europe

German

Residential

 

Germany offices

 

Others

(incl. France Residential)

                      TOTAL

                         

 

 

Shareholders’ equity Group Share before elimination of securities

6,520,406

1,483,618

3,549,326

476,145

8,024

 12,037,520

Elimination of securities

0

-1,314,157

-2,046,831

-678,759

-40,756

 -4,080,503

Shareholders’ equity Group Share

6,520,406

169,461

1,502,495

-202,614

-32,732

              7,957,017

Minority interests

478,143

2,059,548

1,362,043

106,417

0

              4,006,151

  

  

 

                          

image 

30 June 2024 - (In € thousand)

France & Italy

offices

Hotels in Europe

German

Residential

Germany offices

Others

(incl. France   Residential)

TOTAL

Shareholders’ equity Group Share before elimination of securities

6,812,942

1,740,037

3,564,559

386,491

7,049

12,511,079

Elimination of securities

0

-1,601,613

-2,046,831

-678,759

-40,784 

-4,367,987

Shareholders’ equity Group Share

6,812,942

138,424

1,517,728

-292,268

-33,735 

8,143,092

Minority interests

  

Shareholders’ equity

472,727

  

1,746,249

  

1,413,127

 

94,052

  

26 

    

3,726,180

 

7,285,669

1,884,673

2,930,855

-198,217

-33,709  

11,869,272

        3.2.8.7.             Financial liabilities

31 December 2023 - (In € thousand)

France Offices

Italy  Offices

Hotels in Europe

German

Residential

Germany offices

Others 

(incl.

France Residential)

TOTAL

image

Total long-term interest-bearing loans                                 3,999,591            298,297              2,198,304                             2,532,872                         295,258                            0          9,324,322 

Total short-term interest-bearing loans                                      76,439            609,746                 255,828                                 278,823                         162,006                            3          1,382,845 

                                                                                                                                                                                                

image

Total LT and ST loans                                                                 4,076,030            908,043               2,454,132                              2,811,695                        457,264                            3        10,707,167

France Offices

Italy Offices

Hotels in Europe

German

Residential

Germany offices

Others 

(incl.

France Residential)

TOTAL

3,985,943 

544,543 

2,457,208 

2,519,557 

284,908 

0

9,792,159 

117,377 

309,828 

470,988 

363,553 

888 

1,303

1,263,937 

4,103,320

854,371

2,928,196

2,883,110

285,796

1,303

11,056,096

30  imageimageJune 2024 - (In € thousand)            

Total long-term interest-bearing loans                         

Total short-term interest-bearing loans                        

Total LT and ST loans                                                          

        3.2.8.8.             Derivatives

Others 

31  December 2023 - (In € thousand)                                                 France            Italy                Hotels            German         Germany offices                 (incl. France TOTAL

                                                                         Offices               Offices              in Europe                           Residential

Residential)

image

Net financial instruments                                                          -122,868               -7,334                -105,108                                 -92,264                            -9,404                                0                -336,977

30 June 2024 - (In € thousand)                                       

France Offices

Italy Offices

Hotels in Europe

German

Residential

Germany offices

Others  (incl. France Residential)

TOTAL

Financial instruments – Assets                                       

250,981 

4,175 

200,805 

107,306 

12,547 

575,815 

Financial instruments – Liabilities                                 

110,149 

83,228 

1,590 

86 

195,053 

Net financial instruments                                                

-140,832

-4,175

-117,577

-105,716

-12,461

0

-380,762

        3.2.8.9.                 Income statement by operating segment

In accordance with IFRS 12, §B11, inter-segment transactions, in particular management fees, are indicated separately in this presentation. 

                                                                                                                                                                                  Other         Intercos

( In € thousand) - 2023                                                                               OfficesFrance  OfficesItaly  Germany Offices in EuropeHotels                 ResidentialGerman  (France                      Inter-                                                                                                         30 June 2023

                                                                                                                                                                          Residential)              sector

101,141 

65,305 

23,514 

128,627 

145,702 

-1,145 

463,144 

-9,890 

-5,469 

-2,028 

-1,485 

-1,568 

-209 

217 

-20,432 

-3,819 

-2,220 

-729 

-2,103 

-10,036 

-179 

4,237 

-14,849 

1,437 

-393 

-387 

-716 

-1,576 

-1,635 

88,869

57,223

20,370

124,322

132,522

-388

3,309

426,227

5,004

2,763

0

31,930

0

0

-84

39,613

2,476

-1,009

43

47

1,054

517

0

3,128

7,452 

219 

1,613 

8,528 

4,020 

4,644 

-16,546 

9,930 

-965 

-154 

-182 

-6,404 

-701 

-4 

5,764 

-2,646 

-16,402 

-7,550 

-2,859 

-11,122 

-26,764 

-6,001 

7,503 

-63,195 

-9,915

-7,485

-1,428

-8,999

-23,445

-1,361

-3,279

-55,912

-6,258 

-2,346 

-435 

-23,429 

-1,674 

-645 

-34,787 

-253 

185 

480 

14,231 

172 

847 

54 

15,716 

79,923

49,331

19,030

138,102

108,629

-1,030

0

393,985

34

52

0

-8

-45

0

0

33

imageRental income                                                                                           

Unrecovered property operating costs                                              

Expenses on properties                                                                          

Net losses on unrecoverable receivables                                          

imageNET RENTAL INCOME                                                                              

EBITDA from hotel operating activity & Flex Office                        

Income from other activities                                                                

Management and administration income                                         

Business expenses                                                                                   

 Overheads                                                                                                 

NET OPERATING COSTS                                                                          

Depreciation of operating assets                                                         

imageNet change in provisions and other                                                    

OPERATING INCOME                                                                               

  Net income from inventory properties                                            

imageimageimage  Net income from asset disposals                                                                                           -5                                                     -269                 -2,659                            0                       0                      -3,665

  Income from value adjustments                                                                                     -152,710                                       -44,043            -650,233                             0                       0             -1,277,682

-288

0

0

0

0

0

0

-288

image

0

0

-1,884

0

0

0

-1,884

9,876

-133,685

91,898

-544,308

-1,030

0

-889,501

-19,810 

-7,104 

-1,718 

-30,628 

-26,674 

198 

-85,736 

-12 

-6 

-263 

-7,517 

-33 

-7,831 

-28,232 

1,102 

7,839 

-9,938 

-29,229 

-1 

367 

366 

-210 

-84 

-57 

-351 

-18,338 

479 

4,555 

-13,304 

image

3,161

-134,564

66,458

-580,920

-865

0

-1,025,583

2,145 

21,122 

2,029 

112,551 

10 

137,554 

image

-2,329 

-269 

-6,133 

-7,579 

-269 

-16,579 

2,977

-113,711

62,355

-475,948

-1,124

0

-904,608

image

-8,137

-19,442

-35,146

-167,910

0

0

-214,897

-5,160

-94,269

27,209

-308,038

-1,124

0

-689,711

image  Income from disposal of securities                                                   

  Net income from changes in scope                                                   

OPERATING INCOME                                                                               

Cost of the net financial debt                                                               

Interest cost for rental liabilities                                                          

Value adjustment on derivatives                                                         

Discounting and foreign exchange gains or losses                          

Exceptional amortisation of loan issue costs                                    

image

        3.2.9.        Events after the balance sheet

None.

           


imageimageimage
Statutory Auditor’s report

    

4. STATUTORY AUDITORS’ REPORT ON THE HALF-YEARLY FINANCIAL INFORMATION 

Statutory auditors’ review report on the half-yearly financial information

This is a free translation into English of the statutory auditors' review report on the half-yearly financial information issued in French and is provided solely for the convenience of English-speaking users. This report includes information relating to the specific verification of information given in the Group’s half-yearly management report. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.

Period from 1 January to 30 June 2024 

To the Shareholders,

In compliance with the assignment entrusted to us by your Annual General Meetings and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on :

•       the review of the accompanying condensed half-year consolidated financial statements of Covivio, for the period from 1 January to 30 June 2024;

•       the verification of information contained in the interim management report.

These condensed half-year consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to express a conclusion on these financial statements based on our review.

        1.         Conclusion on financial statements

We conducted our review in accordance with professional standards applicable in France. 

A review of interim financial information consists principally of making inquiries of persons responsible for financial and accounting matters and applying analytical and other review procedures. A limited review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France. Consequently, the assurance that the financial statements, taken as a whole, are free from material misstatement obtained in the context of a limited review is a moderate assurance, lower than that obtained in the context of an audit.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - Interim Financial Reporting, as adopted by the European Union.

         2.       Specific verification

We have also verified the information given in the half-year management report commenting on the condensed halfyear consolidated financial statements subject to our review.

We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements.

Paris-La Défense, August 01st, 2024

The Statutory Auditors

French original signed by 

                                  KPMG S.A.                                                                                               ERNST & YOUNG et Autres

                             Sandie Tzinmann                                                                                                  Jean-Roch Varon

Pierre Lejeune

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Certification of the preparer

    

5. CERTIFICATION OF THE PREPARER

I hereby declare that, to the best of my knowledge, the condensed interim financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets and liabilities, financial position and results of the company and all the companies included in the consolidation, and that the attached interim management report presents a true and fair view of the significant events that occurred during the first six months of the financial year, their impact on the financial statements and the main related party transactions, and that it describes the main risks and uncertainties for the remaining six months of the financial year.

01st August 2024, 

Christophe Kullmann 

Chief Executive Officer

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imageGlossary


6. GLOSSARY

Net asset value per share (NRV/share), NTA and NDV per share

NRV per share (NTA and NDV per share) is calculated pursuant to the EPRA recommendations, based on the shares outstanding as at year-end (excluding treasury shares) and adjusted for the effect of dilution.

Operating assets

Properties leased or available for rent and actively marketed.

Rental activity

Rental activity includes mention of the total surface areas and the annualized rental income for renewed leases, vacated premises and new lettings during the period under review.

For renewed leases and new lettings, the figures provided take into account all contracts signed in the period so as to reflect the transactions completed, even if the start of the leases is subsequent to the period.

Lettings relating to assets under development (becoming effective at the delivery of the project) are identified under the heading “Pre-lets”.

Cost of development projects

This indicator is calculated including interest costs. It includes the costs of the property and costs of construction.

Definition of the acronyms and abbreviations used

•     MRC : Métropoles Régionales, soit Lyon, Bordeaux, Lille, Aix-Marseille, Montpellier, Nantes et Toulouse

•     ED: Excluding Duties

•     ID: Including Duties

•     IDF: Paris region (Île-de-France)

•     ILAT: French office rental index

•     CCI: Construction Cost Index

•     CPI: Consumer Price Index

•     RRI: Rental Reference Index

•     PACA: Provence-Alpes-Côte-d’Azur

•     LFL: Like-for-Like

•     GS: Group Share

•     CBD: Central Business District

•     Rtn: Yield

•     Chg: Change

•     MRV: Market Rental Value


Firm residual term of leases

Average outstanding period remaining of a lease calculated from the date a tenant first takes up an exit option.

Green Assets

“Green” buildings, according to IPD, are those where the building and/or its operating status are certified as HQE, BREEAM, LEED, etc. and/or which have a recognised level of energy performance such as the BBC-effinergieR, HPE, THPE or RT Global certifications.

Unpaid rent (%)

Unpaid rent corresponds to the net difference between charges, reversals and irrecoverable loss of income divided by rent invoiced. These appear directly in the income statement under net cost of irrecoverable income.

Loan To Value (LTV)

The LTV calculation is detailed in Part 4 “Financial Resources”

Rental income

Recorded rent corresponds to gross rental income accounted for over the year by considering deferment of any relief granted to tenants, in accordance with IFRS standards.

The          like-for-like              rental       income    posted     allows comparisons to be made between rental income from one year to the next, before taking changes to the portfolio (e.g. acquisitions, disposals, building works and development deliveries) into account. This indicator is based on assets in operation, i.e. properties leased or available for rent and actively marketed.

Annualized “topped-up” rental income corresponds to the gross amount of guaranteed rent for the full year based on existing assets at the period end, excluding any relief.

Portfolio

The portfolio presented includes investment properties, properties under development, as well as operating properties and properties in inventory for each of the entities, stated at their fair value. For the Hotel Operating properties it includes the valuation of the portfolio consolidated under the equity method. For offices in France, the portfolio includes asset valuations of Euromed and New Vélizy, which are consolidated under the equity method.

Projects

• Committed projects: these are projects for which

promotion or construction contracts have been signed and/or work has begun and has not yet been completed at the closing date. The delivery date for the relevant asset has already been scheduled. They might pertain to VEFA (pre-construction) projects or to the repositioning of existing assets.

• Managed projects: These are projects that might be undertaken and that have no scheduled delivery date. In other words, projects for which the decision to launch operations has not been finalised.

Yields / return

The portfolio returns are calculated according to the following formula:

Gross annualized rent (not corrected for vacancy)

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Value excl. duties for the relevant scope (operating or development)

The returns on asset disposals or acquisitions are calculated according to the following formula:

 Gross annualized rent (not corrected for vacancy) 

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Acquisition value including duties or disposal value excluding duties

EPRA Earnings

EPRA Earnings is defined as “the recurring result from operating activities”. It is the indicator for measuring the company’s performance, calculated according to EPRA’s Best Practices Recommendations. The EPRA Earnings per share is calculated using the average number of shares (excluding treasury shares) over the period under review.

• Calculation:

(+) Net Rental Income

(+) EBITDA of hotels operating activities and Coworking

(+) Income from other activities

(-) Net Operating Costs (including costs of structure, costs on development projects, revenues from administration and management)

(-) Depreciation of operating assets

(-) Net change in provisions and other (-) Cost of the net financial debt

(-) Interest charges linked to finance lease liability (-) Net change in financial provisions

(+) EPRA Earnings of companies consolidated under the equity method

(-) Corporate taxes

(=) EPRA Earnings

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Surface

SHON: Gross surface 

SUB: Gross used surface

Debt interest rate

•     Average cost :

Financial Cost of Bank Debt for the period + Financial Cost of Hedges for the period

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Average cost of debt outstanding in the year

•     Spot rate : Definition equivalent to average interest rate over a period of time restricted to the last day of the period.

Occupancy rate

The occupancy rate corresponds to the spot financial occupancy rate at the end of the period and is calculated using the following formula:

1 – Loss of rental income through vacancies (calculated at MRV) 

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Rental income of occupied assets + loss of rental income

This indicator is calculated solely for properties on which asset management work has been done and therefore does not include assets available under pre-leasing agreements. Occupancy rate are calculated using annualized data solely on the strategic activities portfolio. Future leases secured on vacant spaces are accounted for as occupied.

The “Occupancy rate” indicator includes all portfolio assets except assets under development.

Like-for-like change in rent

This indicator compares rents recognised from one financial year to another without accounting for changes                 in             scope:                 acquisitions,            disposals, developments including the vacating and delivery of properties. The change is calculated using rental income under IFRS for strategic activities. This change is restated for certain severance pay and income associated with the Italian real estate (IMU) tax. Given specificities and common practices in German residential, the Lile-for-Like change is computed based on the rent in €/m2 spot N versus N-1 (without vacancy impact) on the basis of accounted rents.

For operating hotels (owned by FDMM), like-for-like

change is calculated on an EBITDA basis

Restatement done:

•       Deconsolidation of acquisitions and disposals realized on the N and N-1 periods

•       Restatements of assets under works, i.e.:

•       Restatement of released assets for work

(realized on N and N-1 years)

•       Restatement of deliveries of assets under works (realized on N and N-1 years).

Like-for-like change in value

This indicator is used to compare asset values from one financial year to the next without accounting for changes in scope: acquisitions, disposals, developments including the vacating and delivery of properties.

The like-for-like change presented in portfolio tables is a variation taking into account Capex works done on the existing portfolio. The restated like-for-like change in value of this work is cited in the comments section. The current scope includes all portfolio assets.

Restatement done:

•    Deconsolidation of acquisitions and disposals realised over the period

•    restatement of work realised on assets under development during period N.

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 covivio.eu

Office : 10, rue de Madrid, 75008 Paris – Tel. : 01 58 97 50 00

Headquarter : 18, avenue François Mitterrand – CS 10449 – 57017 Metz Cedex 01 – Tel. : 03 87 39 55 00

Public limited company with a Board of Directors with capital of € 334 390 164  – RCS Metz 364 800 060



[1] Ratio restated of IFRIC21 impact (property tax), spread over the year

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[2] Sources : Immostat, JLL, Cushman & Wakefield, Savills, BNP Real Estate, DILS

[3] 1.2.2.3.                     Annualized rents: €190.4 million Group share

(In € million)

Surface (m²)

Number of units

Annual. rents H1 2024 (100%)

Annual. rents H1 2024

(Group share)

Average rent per month

% of  rental income

Berlin

1,305,200

17,819

154.6

97.8

9.9 €/m²

51%

Dresden & Leipzig

266,474

4,350

24.3

15.8

7.6 €/m²

8%

Hamburg

149,000

2,415

19.5

12.8

10.9 €/m²

7%

NRW 2

1,105,321

16,508

101.5

64.0

7.7 €/m²

34%

Essen

393,924

5,757

37.3

23.1

7.9 €/m²

12%

Duisburg

198,664

3,033

17.2

10.7

7.2 €/m²

6%

Mulheim

131,296

2,194

12.1

7.6

7.7 €/m²

4%

Oberhausen

124,984

1,830

10.6

7.0

7.1 €/m²

4%

Others

256,453

3,694

24.4

15.6

7.9 €/m²

8%

Total

2,825,995

41,092

300.0

190.4

8.8 €/m²

100%

[4] Other commercial: Ground-floor retail, car parks, etc || 2 North Rhine-Westphalia

Rental income (€8.8/m²/month on average) offers solid growth potential through reversion vs. our achieved reletting rents in all our markets including Berlin (30%-35%), Hamburg (10%-15%), Dresden and Leipzig (10%-15%) and in North RhineWestphalia (15%-20%).

[5] 1.2.2.4.                   Indexation

Rental income from residential property in Germany changes depending on multiple mechanisms.

[6] . Percentage of lease expiries on total revenues || 2: (German Residential, Hotels EBITDA, others)

In 2024, 3.4% of total leases are expiring: 2.1% have no intention to vacate the property and 0.4% are going to be

redeveloped. That leads the unsecured part to 1.0%, for which tenant decision is not yet known.                                                                                 

[7] Yield on assets in operation - excluding duties 

The company's covenants are presented in the section 3.2.5.11.6  "Covenants".

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