Covivio (COV) H1 2024 earnings summary

Executive summary

• H1 2024 marked by strategic transformation, with increased hotel exposure to 20% of the portfolio, a new AccorInvest partnership, and a Berlin residential JV.

• Balance sheet reinforced through €311m in new disposal agreements, reduced LTV to 40.3%, and S&P BBB+ rating confirmed.

• Recurring net result grew 3.3% year-over-year to €231m, with 2024 guidance raised to €460m.

• Portfolio rebalancing advanced with major hotel and residential deals, including a €274m Berlin JV and hotel asset swap with AccorInvest.

• Positive signals in the investment market, with renewed investor appetite for prime city center offices and hotels.

Financial highlights

• Recurring earnings for H1 2024 reached €231m, up 3.3% year-over-year; adjusted EPS at €2.24, down due to scrip dividend.

• Like-for-like revenue growth of 6.5%, driven by indexation, occupancy gains, and hotel variable revenues.

• Occupancy rate increased to 97.1% (+1.3pt YoY); average firm lease term at 6.8 years.

• EPRA NTA at €8.7bn (€77.7/share), down 7.5% per share due to scrip dividend dilution.

• Portfolio value at €15.4bn, diversified across Germany (42%), France (34%), and Italy.

Outlook and guidance

• 2024 recurring net result guidance raised to €460m (up 5% vs. initial), with focus on hotel sector reinforcement and extracting growth from core assets.

• High single-digit like-for-like rental growth expected for offices in 2024, with continued occupancy gains.

• Full cash dividend targeted for 2024, payout ratio above 80%.

• Long-term goal to rebalance portfolio equally among residential, hotels, and offices.

• Medium-term focus on value extraction in Paris, Milan, and Berlin.