Covivio (COV) CMD 2024 summary

Strategic achievements and portfolio transformation

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

• Like-for-like rental growth reached +13.6% since end-2022, with recurring net income expected to rise from €430m (2022) to €460m (2024).

• Portfolio rebalanced toward a long-term goal of 1/3 offices, 1/3 hotels, 1/3 residential by 2030, with increased focus on central locations and hospitality-driven services.

• Reinforced hotel sector exposure through major transactions with AccorInvest and Generali, and continued focus on Berlin residential.

• Maintained high operational performance: 97%+ occupancy over 10 years and strong asset rotation with €8bn disposals in 10 years.

Market context and investment trends

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

• Office sector remains weak but is seeing the return of large transactions, especially in central locations.

• Prime rents in Paris and Milan have risen, driven by demand for central, high-quality, sustainable buildings.

• Asset values stabilized in H2 2024, with hotel and German residential values up ~1% and office value declines slowing to -1%.

• Investment focus is shifting toward Southern Europe, especially for hotels, leveraging local expertise and partnerships.

Growth drivers and future plans

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

• Targeting €1bn+ in privatization margin from Berlin residential, with ongoing asset rotation and block sales.

• Office strategy centers on increasing city center exposure to 80% by 2028, with continued disposals of non-core assets and focus on reversionary potential.

• Hospitality strategy aims to grow hotel exposure to one-third of the portfolio, emphasizing operational control, value extraction, and expansion in Southern Europe.

• Residential strategy focuses on Berlin, with high reversionary potential, strong privatization margins, and a pilot for operated residential services.