2020 HALF-YEAR RESULTS
A strategy that demonstrates its resilience in the context of a global health crisis

A portfolio under management growing by 7% reaching more than 2.3 billion euros

• 197[1] € m in assets in own account (+ 3% at constant scope vs. December 31, 2019);
• € 2,143 million managed on behalf of third parties (+ 8% vs. December 31, 2019) in the form of SCPI[2] and d & #39; OPCI[3].

Solid financial indicators

• Recurring EPRA net income per share up by 9% to € 3.65 (€ 3.35 at June 30, 2019);
• Continuing EPRA ANR (NTA) up by 15% over one year to € 128.2 per share (€ 111.1 as of June 30, 2019);
• Debt (LTV) kept at a low level at 26% (vs. 28% at 12/31/2019);
• Substantial liquidity of nearly € 40 million (including a confirmed undrawn credit line).

“The period we are going through is unprecedented and decisive for testing the resilience of the PAREF Group's strategy. Thanks to the in-depth transformations that have taken place over the last few years, the acceleration of the Group's digitalization and the unfailing mobilization of the teams, operational activity has not been interrupted and has enabled us to continue to create value for our shareholders and customers. Despite a slowdown in SCPI fund inflows, the model based on the 3 pillars (own ownership with PAREF, management for institutional and individual investors with PAREF IM and PAREF Gestion) confirms its resilience and allows us to generate solid financial results for this first half of 2020. With a healthy balance sheet, liquidity, tools and competent teams, we will continue during the second half of 2020 to invest in assets held directly, to ramp up SCPI funds both historical and newly created and will develop management on behalf of institutional third parties. »

Antoine Onfray - Deputy CEO

“Our transformation of activities around 3 pillars ensured stability during this period of severe crisis. The model was tested in the second quarter of 2020 with robust financial results for this first half. This relies on the implementation of new IT systems, demonstrating the continued operational resilience of our platform through remote work. We remain focused on supporting our employees, communities and customers, while proactively managing our assets and development in Europe. "

Antoine Castro - Managing Director

PAREF's board of directors, which met on July 31, 2020, closed the accounts on June 30, 2020.

I - Real estate activity (PAREF SA)

PAREF continued its strategy of active management of its assets during the 1^er semester 2020 in particular through:

• The signing of a new lease on the Gaïa building in February 2020 on an area of 1,751m² and with a firm period of 9 years. The occupancy rate of this asset is now increased to 64%;
• The final sale of 4 assets held by PAREF located in Meythet, Saint-Etienne, Thyez and Trappes for a total net seller amount of nearly € 5 million, i.e. in line with the last appraised value. The Group is thus continuing its strategy of rotating its portfolio with a gradual repositioning on assets of more significant size and mainly located in Greater Paris.

The Group's financial occupancy rate increased to 87.5 % compared to 86.3 % at December 31, 2019[4]. 

The weighted average maturity of the leases is 4.6 years at the end of June 2020 and the schedule profile of the leases on the owned assets is as follows:

The value of the PAREF Group's real estate assets thus amounted to € 184 million as of June 30, 2020, + 2.36% at constant scope compared to December 31, 2019.

Overall, the net rental income on the assets held directly by PAREF amounted to € 4.4 million at 1^er half of 2020, up compared to the same period in 2019 (+42 %). This increase is mainly explained by the acquisition of 6 floors of the Franklin Tower in La Défense offset by the disposals of assets in 2019 and during the 1^er half-year 2020. The average gross rate of return on its own assets is 6.7 1TP1Q (excluding Gaïa).

II - Management activity on behalf of third parties (PAREF Gestion)

• Collection and managed heritage

The Group collected during the 1^er half-year 2020, a total amount of € 86m in gross subscriptions to SCPI fund investors, representing a decrease of 40% compared to the same period in 2019 (€ 144m at 1^er semester 2019). This performance is mainly linked to the COVID19 health crisis which significantly slowed the appetite of individual investors to invest in SCPI products and to an operation in 2019 to acquire & #39; a portfolio of nearly 100 M € on Novapierre 1 which s & #39; was accompanied by subscriptions of nearly € 40 million.

PAREF Gestion has made more than € 120m in investments for all SCPIs under management, including € 54m for Novapierre Germany 2 following the fund's launch last September, € 44m for Novapierre Germany as part of a & #39; acquisition of a retail portfolio, € 17 million for Interpierre France and € 7 million for Capiforce.

Thus, PAREF Gestion manages assets for third parties of € 1,758 million, up 9 % compared to December 31, 2019 (€ 1,611 million as of December 31, 2019).

Breakdown of funds managed by PAREF Gestion as of June 30, 2020:

CF: Fixed capital

CV: Variable capital

Breakdown of gross collection carried out in 1^er semester 2020:

• Commissions

Management fees were stable at € 4.6m in H1 2020, due to the increase in assets under management and revenues from the platform in Italy. This effect is offset by a decrease in commissions on disposals and investments (- € 0.4 M), the impact of rents not collected in the context of the Covid-19 (- € 0.3 M) and the end of the & #39 ; OPCI 54 Boétie and the OPPCI of hotel walls (- € 0.2 million).

Subscription fees amounted to € 8.4 million in H1 2020, down compared to the same period in 2019, notably explained by the COVID19 health crisis which significantly slowed the appetite of individual investors to invest in SCPI products .

Retro-commissions decreased in line with the drop in inflows to reach € 6.8 million and included fees paid to service providers on acquisitions made on behalf of Novapierre Germany and Novapierre Germany 2.

III - Results of 1^er semester 2020

Consolidated income statement:

The Group generated consolidated net income Group share of € 7.2 million at 1^er half of 2020, down 9% compared to the same period in 2019, explained in particular by:

• net rental income of € 4.4 million, up thanks to the acquisition of 6 floors of the Franklin Tower;

• net commission income which came to € 6.2 million, a decrease of 20 % mainly explained by the slowdown in collection linked to COVID19;

• the cost of financial debt, which came to € 0.8 million at 1^er half-year 2020 compared to € 1.2 million in 1^er half of 2019, benefiting from the full effect of the refinancing of the Group's debt in February 2019;

• the result of the share of companies accounted for by the equity method, which came to € 1.3 million at 1^er half-year compared to € 0.9 million in the 1st^er half of 2019, including € 0.6M for Vivapierre and € 0.7M for Gaïa mainly due to the increase in the fair value of the asset following the new signings.

IV - Financial resources

The nominal amount of the PAREF Group's gross financial debt stood at € 70 million as of June 30, 2020, vs. € 78 million at the end of 2019.

The average debt rate stood at 1.7 % as of June 30, 2020, down compared to the end of 2019 (2.2 % as of December 31, 2019). This change is explained by the full-year effect of the Group's refinancing which took place in February 2019.

The average residual maturity of the debt is 3.6 years, as of June 30, 2020 (4.4 years at the end of 2019).

All of the drawn debt is hedged by hedging instruments, thus limiting its sensitivity to changes in interest rates.

The PAREF Group's financial ratios are solid with a debt ratio (LTV[6]) to 26 % and financial interest coverage (ICR[7]) at 9.5 x, against 28 % and 7.8 x respectively at the end of 2019.

The Group thus respects its covenants on its bank debts, mainly:

• A debt ratio (LTV) <50%;
• An ICR> 2.5x.

Debt schedule:

The PAREF Group also has cash of € 9 million as of June 30, 2020 including PAREF Gestion's regulatory equity and € 30 million available on a confirmed line of credit.

V - Assets under management

(1) Including investments in Vivapierre and Le Gaia

(2) Includes Foncière Sélection Régions and the asset of “The Medelan” managed by the platform in Italy

(3) Part of the assets of PAREF (OPPCI Vivapierre) is included in the management of PAREF Gestion

The portfolio of real estate assets owned by PAREF (excluding Gaïa) amounted to € 166 million, a decrease of 1% compared to the end of 2019, mainly explained by:

• disposals for € 4.8 million (values at 12/31/2019);
• costs and improvement works carried out on the 1^er half-year 2020 for € 2.1 million; and
• a positive revaluation of the value of assets for around € 1.5 million.

Thus, at constant scope, the change in fair value amounts to € 3.6 million over the 1^er half-year 2020, an increase of 2.2 % compared to the end of 2019 (excluding consolidated assets under the equity method).

The average gross rate of return on assets held directly and consolidated by PAREF was 6.7 % excluding Gaia (7.0 % at the end of 2019).

VI - Revalued EPRA net assets

L & #39; Revalued EPRA reconstitution (NRV) and continuation (NTA) net assets increased by 15% over 1 year and 9% over 6 months to reach € 128.2 / share at June 30, 2020 (vs. € 117.9 / share at December 31, 2019 and € 111.1 / share as of June 30, 2019).

This increase is mainly explained by the results for the first half of 2020 and the positive change in fair value of the PAREF Gestion business (+ 73% vs. December 31, 2019) which has benefited since this accounting closure from a valuation carried out by an external expert. , partially offset by the payment of the dividend for the 2019 financial year.

The ANR EPRA ratios are determined in particular on the basis of consolidated shareholders' equity under IFRS (including the fair value method) and the market value of debt and financial instruments, in accordance with EPRA Best Practices Recommendations.

New ANR EPRA indicators at the end of June 2020:

(1) On June 30, for the first time the valuation of PAREF Gestion's business was carried out by an external expert qualified in valuation.

As an indication, the EPRA ANRs of the old format are recalled below:

(1) On June 30, for the first time the valuation of PAREF Gestion's business was carried out by an external expert qualified in valuation.

Transition table of ANR EPRA from the old format to the new indicators:

VII - Post-closing events

None

VIII - Other EPRA indicator

• EPRA Recurring Net Income

• EPRA vacancy rate

1. Including the Gaïa building as a share, excluding investments in OPPCI Vivapierre. Excluding Gaia, the EPRA vacancy rate stood at 7.2% as of June 30, 2020 compared to 7.7% as of December 31, 2019.

• EPRA rate of return

1. The EPRA net initial rate of return is defined as the annualized contractual rent, net of charges, after deduction of rental arrangements, divided by the value of the portfolio including transfer duties.
2. The EPRA “topped-up” net initial rate of return is defined as the annualized contractual rent, net of charges, excluding rental adjustments, divided by the value of the assets including transfer duties.

• EPRA cost ratios

The ratios below are calculated on the scope of assets held directly by the PAREF Group (including equity method).

• Real estate investments made

1. Includes investments relating to the "The Go" project of the asset located in Levallois-Perret
2. Mainly includes investments relating to the Dax asset
3. Includes eviction indemnities and rental adjustments, capitalized financial costs relating to "The Go" projects

The statutory auditors issued their report on the half-yearly financial information on July 31, 2020 after carrying out the limited review of the condensed half-year consolidated financial statements relating to the period from January 1 to June 30, 2020.

Financial Agenda

October 29, 2020: Financial information as of September 30, 2020

About the PAREF Group

PAREF is developing in two complementary activity sectors: (i) investment through the real estate company SIIC PAREF mainly in real estate for companies in the Paris region (€ 0.2 billion in assets as of June 30, 2020) and (ii ) management on behalf of third parties through PAREF Gestion (€ 1.8 billion of funds managed as of June 30, 2020), a management company approved by the & #39; AMF and PAREF Investment Management (€ 0.4 billion as of June 30, 2020)

PAREF is a SIIC real estate company, listed on compartment C of Euronext Paris - FR0010263202 - PAR

More information on www.paref.fr

Contacts

[1] Including shareholdings held by PAREF

[2] Civil companies of real estate investments

[3] Collective Real Estate Investment Organization

[4] Including the Gaïa building. Excluding the Gaïa building, the financial occupancy rate was 91.0% as of June 30, 2020, compared to 91.7% at the end of 2019.

[5] Including the Gaïa building in quota. Excluding holdings in Vivapierre and shares in PAREF Gestion.

[6] LTV: consolidated net debt divided by the value of the consolidated assets excluding duties.

[7] ICR: consolidated financial charges excluding early repayment charges divided by current operating income.