Covivio Hotels (COVH) CMD 2024 summary

Strategic priorities and portfolio transformation

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

• Portfolio rebalancing targets a 1/3 split among offices, hotels, and residential by 2030, with increased centrality and hospitality approach.

• Focus on city-center assets, hospitality, and sustainability, with 69% of office assets now in city centers and a long-term target of 80% by 2028.

• Continued asset rotation, selective acquisitions in hotels and offices, and office-to-hotel conversions planned, especially in Paris, Milan, and Berlin.

• ESG remains a core pillar, with a 40% carbon reduction target by 2030, a new biodiversity action plan, and a net zero target.

ESG performance: Delivering sustainability

• 96% of portfolio certified, with a 26% reduction in CO2 intensity since 2010 and a net zero target by 2030.

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

• 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.

Financial performance and guidance

• Achieved 14% cumulative like-for-like rental growth over two years, outpacing inflation.

• Earnings guidance for 2024 set at €460m, up from €430m in 2022.

• Cost of debt remains below 2.5% until 2028, with a BBB+ S&P rating and stable outlook.

• Committed pipeline to deliver €70m in future rents with €450m CapEx; managed pipeline could add €55m in rents with €700m CapEx.

• German residential privatization margin exceeds €1bn, with €50m+ rent reversion potential.