Covivio

Covivio, formerly Foncière des Régions,[1] is a European investment and development company with business activities encompassing office real estate (46%), hotels (26%) and residential accommodation (26%). Europe's fourth-largest real estate investment trust (REIT),[2] its portfolio is worth an estimated €23 billion.[3] Two thirds of the portfolio is divided between Paris, Berlin and Milan, with an occupancy rate of 98.1%.[4]

Covivio
TypeReal estate investment trust
Euronext: COV
CAC Mid 60 Component
IndustryCommercial Real Estate
Residential Real Estate
Founded2000
HeadquartersMetz, France
Key people
Christophe Kullmann (CEO)
Jean Laurent (Chairman)
Olivier Estève (Deputy CEO)
Dominique Ozanne (Deputy CEO)
Revenue€1 billion
Number of employees
922
DivisionsCovivio Hotels / Covivio Immobilien / Covivio SGP
Websitewww.covivio.eu/en/

Covivio's strategy is to develop partnerships with cities and corporations, such as Suez, Thales, Dassault Systèmes, Orange S.A., EDF, Accor Hotels, Telecom Italia, IHG and B&B Hotels. The group invests and develops both up and down the real estate value chain and can draw on a European development pipeline of €6 billion (€1.6 billion of committed pipeline at end 2018) to support its growth plans.[5] Sixteen percent of this pipeline consists of mixed projects that involve several real estate products.

History

Foncière des Régions (pronounced [fɔ̃.sjɛʁ dɛ ʁe.ʒjɔ̃]) is a holding company of real estate investment (REIT) companies that own residential and commercial properties in 8 countries (mostly in Europe). Its business comes from the rental and leasing of properties (including hotels and car lots), over 70% of which is office space in France and Italy (in 2009 vacancy rates were at 5.3% in France, in other major markets like Rome, Italy rental income was lower because office space use was halved). Its biggest clients are major companies, the largest of which is France Telecom, which rented half of Fonciere's office space in France (about 1 million m2 (though its share of rental income was 51% in 2009 compared to 60% in 2008). Other major customers are Telecom Italia and Electricite de France and IBM.[6] The company has a 15% interest in France's biggest business park developer, Altarea SCA.[7] Most properties are under its control; however, there are also about 60 properties that it has a minor stake in (interests in them range from 25 to 38 percent).[8] Widely recognized properties include one of France's tallest skyscrapers Tour Gan (also known as CB21) and Carré Suffren in Paris.[9][10]

Other assets include parking lots (Parcs GFR), retirement homes, warehouses (Fonciere Europe Logistique SCA, Fonciere Developpement Logements SA) hotels, medical facilities, and business parks (15% of France's largest developer Altarea SA).

  • In August 2010 in a joint venture with France's largest bank Credit Agricole, it acquired 48 European hotels from hospitality company Accor. The deal was worth 367 million euro.[11]
  • After acquiring 35% of Italian real estate company Beni Stabili (public on the Milan stock exchange since 1999) from Italian company Delfin (Delfin and Batipart are Fonciere's largest shareholders) it purchased the rest of it in 2007. It was Fonciere's single largest investment in Italy bringing its asset portfolio there to €4 billion.[12][13][14]

Altogether the company had a market value of between €3.5 and €3.9 billion in 2010.[7][15]

Tour Gan also known as CB21
Paris, France

Fonciere des Regions was created in 1963 as Garages Souterrains de Metz an operator of underground garages/parking lots. Most growth happened in the 21st century beginning with key acquisitions and leaseback agreements with EDF, AXA, AGF between 2000 and 2004. In 2000 it acquired housing developer Sovakle.[16][17] In 2004 the division dealing with hotels, Foncière des Murs was formed.

Fonciere des Regions's largest shareholder is currently Italian Delfin (the holding company of Italian billionaire Leonardo Del Vecchio) with a nearly 30% stake.[18]

In 2018, Foncière des Régions became Covivio.

Operations

Through subsidiaries Fonciere operates in France, Italy, UK, Luxembourg (Batisica, FDR Luxand and 67% ownership of CCP Duisberg and GSS III Partners), Germany (EM), Belgium (NC), USA (73% of Red Sail Real Estate Holding USA Inc. which is based in LA, NYC, and Chicago) and Portugal.

In 2010 rental income (€789.6 million consolidated up on the year due to French office acquisitions, of which €521.3 million represented the group share which was down slightly because of a lowered interest in Beni Stabili) came mostly from the offices business segment (totalled 79% 54% in France and 25% in Italy) but also from logistics operations (11%) and the service sector (10%). Total revenues increased only in the service sector (4.4% due to 7% higher Accor income) and Italian offices sector (up 4.3%). Vancancies affected results from the offices business in France.[19]

Divisions (these three are separate publicly traded companies) in order of size are

Foncière Développement Logements controls all of the company's French (in Ile-de-France) and German (Bavaria, North Rhine-Westphalia, Lower Saxony) residential properties which include apartments and condominiums. SCI Marceau and Triname and Garonor France III are among numerous subsidiaries managed through the division.

Foncière des Murs (25% interest) is a SIIC that provides hospitality services in addition to its function as landlord of hotels and restaurants.[20]

Foncière Europe Logistique is the subsidiary that controls assets relating to Logistics in France and Germany.

Activities in Europe

Covivio came into being in 2018 as the new name for Foncière des Régions, a French company set up in the early 2000s. The Covivio identity encompasses all the group's operations in Europe.[1]

  • Offices in France and Italy following the merger in December 2018 with its Italian subsidiary Beni Stabili [21]
  • Residential accommodation in Germany via its subsidiary Covivio Immobilien (the new name for Immeo Wohnen), a real estate investment company specialised in the ownership and development of residential assets.
  • Hotels in Europe via its subsidiary Covivio Hotels (the new name for Foncière des Murs). Specialised in investing in hotel properties, Covivio Hotels was established in 2004 and is now Europe's leading hotel property investor.[22] Lastly, in 2018, Covivio founded Welli,[23] a dedicated flexible offices and co-working offering.

Positioning

Covivio invests in, develops and manages office buildings, hotels and housing in Europe and also creates services specifically for these spaces, tailored to its customers. These include concierge services, co-living and co-working.

In the Alexanderplatz district [24] of Berlin, Covivio is developing a mixed-use urban complex of offices, co-working spaces, housing, services and shops.

All of Covivio's new developments are certified (HQE, LEED, BREEAM, etc.) and the whole portfolio has embarked on a process of ecodesign.[25] In the area of CSR, Covivio, which has 922 staff in Europe, has also taken steps to promote gender equality within the group through the Ex-aequo programme, and to support young students from disadvantaged backgrounds in their schooling and their career, in partnership with the young people's charity Article 1.

Covivio features in the EPRA and GPR 250 benchmark indices of European property companies and has received the EPRA BPR Gold Award for its financial and sustainable development reporting, a Carbon Disclosure Project rating of A and a Green Star in the GRESB (Global Real Estate Sustainability Benchmark) rankings. It also appears in the FTSE4 Good, DJSI World and Europe, Euronext Vigeo (World 120, Eurozone 120, Europe 120 and France 20), Euronext® CDP Environment France EW, Oekom, Ethibel and Gaïa ethical and ESG indices.

Activities and areas of expertise

Office property and co-working with Wellio

Covivio has an office portfolio worth €10.6 billion in France and Italy, amounting to a floor area of 3.6 million m211. These assets achieve an occupancy rate of more than 97%.

In France, Covivio designs projects for new and refurbished offices in the Greater Paris region and in major regional cities such as Lyon, Bordeaux, Marseille, Toulouse and Montpellier. Covivio's investments in Italy are focused on the office market in Milan, which accounts for more than 70% of its Italian portfolio. In Milan, Covivio is developing the Symbiosis project, designed jointly with the city authority, which may eventually house 125,000 m2 of offices and services.[26] In 2019, Covivio will deliver six office buildings in France and Italy and will continue work on several other projects.

Covivio is developing co-working spaces with its Wellio subsidiary, established in 2018. Four sites were open at the start of 2019 (three in Paris and one in Marseille), comprising a total floor area of more than 12,000 m2. Another Wellio site will open its doors in Bordeaux in 2019, along with a further space on Milan's Via Dante.[27]

Hotel infrastructure with Covivio Hotels

The hotel business makes up 26% of Covivio's portfolio. Covivio has formed partnerships with major European hotel groups and provides them with assistance in their leasing, real estate and operations projects, and with development initiatives. The group's hotel portfolio is worth €5.8 billion and it works with 18 hotel operators and 30 brands, including Accor Hotels, B&B, IHG, Marriott, Radisson, NH, Motel One and Meininger.[28] It has some 45,000 rooms in France, Germany, the United Kingdom, Spain, Belgium and the Netherlands.

In 2018, Covivio paid €895 million to acquire 12 high-end hotels in major cities in the United Kingdom, including London, Glasgow, Edinburgh and Manchester.[29]

As another example, Covivio is providing support to the Meininger hotel brand in its European development, with projects in Paris, Lyon, Munich and Milan.[30] The group is also a partner of the Motel One brand, which opened its first hotel in France in Paris in 2018 [31]

Residential accommodation in Germany

Covivio has a residential portfolio of €5.8 billion in Germany via Covivio Immobilien. This equates to more than 41,600 housing units, mainly in Berlin. The group has set up a development activity and is planning new projects worth €700 million.

In the German residential sector, Covivio provides furnished apartments, serviced housing and co-living accommodation [32] in Berlin. A further 3,000 rooms will be added by 2022 in vibrant districts of the city.

Sites in Europe

Covivio is a European group based predominantly in France, Germany, Italy, the United Kingdom and Spain.[33] At the end of 2018, the group had invested €1.9 billion in the major European cities. The group employs 922 staff in Europe.

Management
  • Christophe Kullmann, Chief Executive Officer of Covivio
  • Olivier Estève, Deputy CEO
  • Dominique Ozanne, Deputy CEO
  • Jean Laurent, Chairman of the Board of Directors

References
  1. "Covivio, the new name for Foncière des Régions".
  2. "Total size of portfolio — Registration document 2017" (PDF).
  3. "Article in Il Sole 24 Ore, interview with Alexei Dal Pastro".
  4. "2018 Annual Results" (PDF).
  5. "2018 Annual Results" (PDF).
  6. "Gecina". 2010-05-12.
  7. "Fonciere Des Regions Reports Profit". Bloomberg. 2010-07-27.
  8. "Fonciere de Regions 2009 Annual Report" (PDF). 2010-04-16.
  9. "The Land of the Regions will renovate the tower CB21 La Defense". 2009-01-16.
  10. "Fonciere des Regions Metz France". emporis. Retrieved 2010-09-22.
  11. "Accor Operating Profit Growth Forecast". Bloomberg. 2010-08-26.
  12. "Beni Stabili to join Foncière des Regions group (IT/FR)". 2007-02-20.
  13. "Fonciere des Regions to buy 35% of Beni Stabili". 2007-03-05.
  14. "Delfin, Batipart dissolve shareholder pact in France's FdR". 2010-04-07. Archived from the original on 2011-08-18. Retrieved 2019-07-11.
  15. "Fonciere des Regions Rental Income". Reuters. 2010-02-22.
  16. 2005 Global Reports LLC Fonciere history
  17. "Google Translate". translate.google.ca.
  18. "Archived copy". Archived from the original on 2011-10-03. Retrieved 2011-03-31.CS1 maint: archived copy as title (link)
  19. "2010 Annual Results" (PDF). 2011-02-22.
  20. "Fonciere des Regions Hoovers".
  21. "Article on Capital.fr on the merger with Beni Stabili".
  22. "Article on Hospitality ON, interview with Dominique Ozanne, CEO of Covivio Hotels".
  23. "Article in Le Moniteur on the launch of Wellio".
  24. "Article in Chroniques-architecture on Covivio's Alexanderplatz project".
  25. "Article on environnement-magazine on recognition of Covivio for its CSR strategy [in French]".
  26. "Article on Business Immo on the Green Week with Symbiosis in Milan".
  27. "Article on Business Immo, Wellio 1 year after the opening of its first site".
  28. "Article on Hospitality ON, interview with Dominique Ozanne, CEO of Covivio Hotels".
  29. "Article on zonebourse.com on the acquisition of a portfolio of 14 hotels in the UK".
  30. "Article on Hospitality ON the partnership between Covivio and Meininger".
  31. "Article on Hospital ON the inauguration of the first Motel One hotel in Paris".
  32. "Article in La Tribune on co-living".
  33. "Article in Le Revenu on Covivio's European foothold".
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