Cegereal, the French Core Office REIT - First-half 2015: EPRA NAV UP +8.5%

Paris, July 24, 2015 - 8:00 a.m.
Regulated information

Cegereal - First-half 2015

EPRA NAV UP +8.5%

" We are at the beginning of a very promising cycle for creating value for our shareholders. Our NAV is growing steadily, lifted by the trend toward investment in the office property market and our recent realizations on assets. We anticipate an increase in market rents over the coming year and, in the meantime, a further compression in cap rates." said Raphaël Tréguier, Cegereal Chief Executive Officer.

• Vibrant rental activity: 10,000 sq.m. leased

                                                 
While the rental market for large properties was sluggish in the first six months of 2015, Cegereal made the most of its ability to provide flexible solutions for tenants and continued to turn in a strong letting performance for the Arcs de Seine and Europlaza buildings. In all, seven new leases were signed for a total of 10,000 sq.m. These new leases brought the occupancy rate for the Company's assets to 92%.

Work was completed on the lobby, landscaping and services at the Garden Tower in the spring of 2015. Renovation of Europlaza's new "garden floors" is under way, in preparation for marketing starting in September.

• Operating income tripled

       
IFRS revenue stood at €30.1 million, declining by 5.3% from the prior-year period, due primarily to Cap Gemini's departure from 7,300 sq.m. at the Europlaza site in October 2014.

IFRS operating income tripled to €40.4 million versus €13.8 million as of June 30, 2014, thanks in particular to an increase in the value of the real estate portfolio, which rose to €902 million excluding transfer costs as of end-June 2015 (€961 million including transfer costs) from €844 million a year earlier (excluding transfer costs), and €871 million excluding transfer costs as of December 31, 2014.

The three properties' appraisal values June 30, 2015, excluding transfer costs, are as follows:

• Europlaza:             €354 million
• Arcs de Seine:       €353 million
• Rives de Bercy:     €195 million

Cegereal has a healthy balance sheet, with a stable loan-to-value (LTV) ratio of 44.9%.

EPRA NNNAV excluding transfer costs stood at €35.8 per share, compared with €34.8 per share as of December 31, 2014. The increase over the period reflected dividend distributions (negative impact of €1.65 per share), consolidated earnings growth (positive impact of €0.1 per share), rent-free periods granted to new tenants (positive impact of €0.1 per share), changes in the properties' appraisal values (positive impact of €2.3 per share) and changes in the fair value of bank debt (positive impact of €0.1 per share).

       
In accordance with IFRIC 21 "Levies", an interpretation providing guidance on IAS 37, rental expenses incurred by the lessor on behalf of lessees and expenses chargeable to the lessees under the terms of the lease (including property tax and tax on office premises) are recorded in the statement of comprehensive income under "Building-related costs". These expenses are recognized at January 1 and not spread over the fiscal year. The impact is reflected in the financial statements for 2015, including the interim financial statements. The pro forma accounts for the six months ended June 30, 2014 have been restated to reflect the impact of IFRIC 21 "Levies" had it been applied at that date. 

Investor Calendar

• October 7 & 8, 2015            Large and Midcap Event (Paris)
• October 22, 2015                Third-quarter 2015 financial information

For more information, please contact:

About Cegereal
Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated by independent valuers DTZ Eurexi at €961 million as of June 30, 2015 (replacement value).
To date, Cegereal is the first French property company with a fully certified portfolio from an environmental point of view (HQE and BREEAM "Very Good") and benefits from the Green Star rating in the international benchmark GRESB.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €385 million on July 21, 2015.
www.cegereal.com.

Interim Financial Statements

(IFRS)

Six-month period ended June 30, 2015

Excerpts from the interim financial report

approved by the Board of Directors on July 23, 2015

The Statutory Auditors have performed a limited review

of the interim financial statements

Consolidated Statement of Comprehensive Income (IFRS) for the six months ended    June 30, 2015

(1): Pro forma figures at June 30, 2014 have been restated to reflect the retrospective application of IFRIC 21 "Levies"

Consolidated Balance Sheet (IFRS) at June 30, 2015

 (1): Pro forma figures at June 30, 2014 have been restated to reflect the retrospective application of IFRIC 21 "Levies"

Consolidated Statement of Cash Flows for the six months ended June 30, 2015

* There were no cash liabilities for any of the periods presented above.