Covivio Hotels (COVH) CMD 2024 summary

Strategic achievements and portfolio transformation

• Achieved €1.5 billion disposal plan since 2022, reducing LTV below 40%, doubling liquidity to €2.5 billion, and strengthening the balance sheet.

• Shifted portfolio mix: hotels now 20% (up from 15%), offices down to 50% (from 60%), targeting a long-term one-third split among offices, hotels, and residential by 2030, with increased centrality and hospitality approach.

• Strong operational results: 14% like-for-like rental growth, high occupancy rates (97% average over 10 years), and +13.6% like-for-like rental growth since end-2022.

• Reinforced hotel sector exposure through strategic acquisitions, asset swaps (notably with AccorInvest), and increased stake in Covivio Hotels, boosting earnings and value creation.

• Positioned to capitalize on market recovery, focusing on city-center assets and development opportunities in Paris, Milan, and Berlin.

ESG performance and sustainability

• ESG leadership: 96% of portfolio certified, 40% carbon reduction target by 2030, 26% CO2 intensity reduction since 2010, and a biodiversity action plan.

• High taxonomy alignment: 73% of capex and 33% of revenues aligned, exceeding market averages.

• Outstanding ESG ratings, including top sector positions in GRESB, MSCI, and Sustainalytics.

• 77% of employees trained in 2023, with 83% job satisfaction and strong governance standards.

• Biodiversity strategy based on avoiding habitat loss, reducing resource consumption, and transforming urban biodiversity.

Market outlook and sector trends

• European real estate markets show early signs of recovery, with hotel and German real estate transactions up 50%+ year-on-year.

• Office sector remains weak but is stabilizing, with prime rents rising in city centers and demand for high-quality, sustainable buildings.

• Hospitality sector is resilient, with undersupply and strong demand driving RevPAR growth; regulatory trends may limit alternative supply.

• German residential market benefits from urbanization, supply shortages, and strong rental growth, especially in Berlin.

• Portfolio strategy targets a long-term balance: one-third each in offices, hotels, and residential, with continued asset rotation and selective acquisitions.