2024 FULL-YEAR RESULTS
A CONTRASTED BUSINESS IN A COMPLEX MARKET ENVIRONMENT
A REBALANCED FINANCIAL STRUCTURE ENABLING THE COMPANY TO FOLLOW ITS SUSTAINABILITY GOALS
The Board of Directors of Société de la Tour Eiffel met on 6 March 2025 and approved the annual and consolidated financial statements for the year ended 31 December 2024. The audit procedures for these financial statements have been completed and the corresponding reports are in the process of being issued.
"The capital increase carried out at the beginning of 2025 marks a step forward, essential for rebalancing our balance sheet and continuing to transform our portfolio. In a property market that is still under pressure, our teams are fully mobilised to meet the rental challenges that remain. We are continuing our efforts to adapt by making the necessary trade-offs and investing in ambitious, innovative projects. Our actions in terms of management and sustainable development remain at the heart of our commitment to return to sustainable growth. Thanks to the participation of our majority shareholder and the dedication of our teams, we look forward to 2025 with determination, ready to seize market opportunities, pursue our objectives and build a sustainable future for the Company", said Christel Zordan, Chief Executive Officer of Société de la Tour Eiffel.
The Company continues to implement its roadmap
- Capital increase of €598.8m in January 2025
- Asset value down 5.8% on a like-for-like basis to €1.6bn
- €85m in disposals to help transform the portfolio
- €83m in developments of assets with sound fundamentals
- Loan-to-value ratio (LTV) at 44.5% (covenant < 50%) and EPRA LTV at 63.1%
(post-capital increase: LTV at 18.7% and EPRA LTV at 26.2%)
- ICR (EBITDA/Financial costs) at 3.9x (covenant > 2x)
- €380m in drawdown capacity
- EPRA NTA of €35.0/share
(post-capital increase: NTA at €8.9/share) - EPRA Topped-up Net Initial Yield: 4.7%
… essential to the sustainable transformation of its assets in response to the challenges of the property market
- Gross rental income of €79.0m, down 0.5% on a like-for-like basis
- 95% of rents collected by the end of February 2025
- EPRA occupancy rate down to 76.3% (vs. 78.0%) due to disposals
- Cost of debt still low at 1.63%, benefiting from interest rate hedging until the end of 2024
- Consolidated net profit of -€59.2m (vs. -€47.2m)
- EPRA earnings (new method) of €21.9m, or €1.32/share (vs. €1.95)
- Recurring cash flow per share of €1.45 (vs. €2.03)
Continued disposal of buildings unsuited to the Group's challenges
Against the backdrop of a still very tight investment market, the Group was able to sell 5 properties (rue du Général de Gaulle in Kremlin-Bicêtre, Fontenay in Lyon Gerland, rue Auber in Paris, Diagonale Ouest in Montigny-le- Bretonneux and Parc des Aygalades in Marseille) in 2024 for €84.5m excluding transfer duties.
Since we began implementing the roadmap, disposals have been carried out at valuations broadly in line with appraisals. The latest transactions, however, include adjustments of between 20% and 28% imposed by market trends and the need for the Company to continue streamlining its portfolio at a time when the balance sheet is under pressure.
Evolution of developments
EvasYon is a mixed-use project in Lyon, comprising a 5,200 sqm office building and a 5,400 sqm co-living building. Launched in summer 2023, this redevelopment (formerly Lyon Dauphiné) was delivered in 2 phases: end 2024 for the co-living part and early 2025 for the office part. The co-living part has been fully secured by the signature of a 12-year off-plan lease agreement (BEFA) with Bikube, a specialist operator.
At the Parc du Golf in Aix-en-Provence, construction of Jade, a 4,130 sqm office building (including terrace), is nearing completion, with handover scheduled for mid-March 2025. The building was 33% pre-let by the end of 2024. Discussions are underway for the entire surface area.
In Puteaux, on the banks of the river Seine, just outside the La Défense district, the Group is continuing the redevelopment Rivage, a 9,700 sqm wood-concrete office building (not a high-rise building) (HQE BD Excellent, BREEAM Excellent). Work began in September 2023. Demolition of the existing superstructure was completed in the 2nd quarter of 2024. Work on the superstructure is under way, with delivery scheduled for late 2025/early 2026.
In the Eiffel Nanterre Seine park, on available land, the Company delivered the Nanturra in the 4th quarter of 2024, a 5,400 sqm multi-storey, divisible business hotel under its LILK (Light Industrial Last Kilometer) brand. This multi- purpose building concept is designed to meet the need for last-mile business and logistics space close to urban centres. The asset is 35% pre-let. A second project, the 8,000 sqm Syrah building, which is also divisible, has been launched in Bobigny in the ZAC des Vignes urban development zone. Delivery is scheduled for the 2nd quarter of 2025. The Syrah stands out for its environmental performance (geothermal probes, low-carbon materials, urban agriculture, etc.). The Nanturra was also built using low-carbon materials such as biosourced paint and low-carbon asphalt. These 2 projects, at the cutting edge of innovation, are also aiming for BREEAM Excellent certification.
These six projects, which are representative of the property company's value creation strategy, will be added to the development plan as and when administrative approvals are obtained. In total, the five projects launched (EvasYon, Puteaux, Nanturra, Syrah and Jade) represent €10.8m in potential rental income.
Update on off-paln projects
The "Millésime" off-plan (VEFA,) 4,500 sqm of office space (HQE Excellent, BREEAM Excellent, Well silver) located in Issy les Moulineaux, has been pre-let for 10 years, including 9 firm years to Les Nouveaux Constructeurs. The shell has been completed, with delivery scheduled for the 3rd quarter of 2025.
In addition, the Manufacture off-plan project in Lyon has reached the "out of water" stage. This mixed-use, reversible 4,000 sqm development comprises offices (HQE Excellent, BREEAM Very Good), homes (BBC Effinergie) and retail units. Delivery is scheduled for Q3 2025 for the offices and retail units and Q4 2025 for the residential units.
These investments are part of our strategy to transform our portfolio: quality locations, secure rental income and environmentally efficient buildings.
A portfolio being transformed
As of 31 December 2024, the value of the portfolio stood at €1,617m, 75% in offices (€1,219m), 12% in business/logistics premises (€188m), 11% in mixed use (€177m) and only a small amount managed residential property. All these properties are located in France, 75% of them in Greater Paris (€1,209m). As part of our ongoing efforts to improve the quality of our portfolio, 83% of it is certified for its environmental performance at end-2024.
Contrasted rental activity
Nearly €12.5m in annualised rental income was agreed with tenants in 2024, including €4.2m in new leases and €8.0m in renewals. Including the announced departures, the net balance of rental activity is €3.5m in annualized rents. This includes renegotiations with the Versailles education authority (7,760 sqm) in Guyancourt, SDEL in Puteaux (3,070 sqm) and Absys Cyborg in Issy-les-Moulineaux (2,230 sqm), as well as agreements with CACIB (5,380 sqm) in Montrouge and EFI (2,930 sqm) in Vélizy, Greenbig (1,140 sqm) in Puteaux and Ondura (830 sqm) in Suresnes, as well as the announced departures of Air Liquide (9,470 sqm) in Champigny, TeamTo (2,720 sqm) in Paris Bastille, DGFIP (3,960 sqm) in Nantes, Enedis (1,250 sqm) and Tereos (1,250 sqm) in Lille.
In addition to the above, the main departures already announced, effective from early 2025, concern the Hauts-de- France Region (3,750 sqm) and the SNCF (1,250 sqm) in Lille.
At 31 December 2024, the financial occupancy rate (EPRA) was down to 76.3% (vs. 78.0% at end 2023), in line with the estimates announced by the Company in its communication of 5 December 2024. This decline is mainly due to disposals, for which the average occupancy rate was 96% at end-2023, and to Nanturra (a 5,400 sqm multi-storey business hotel located in the Parc Eiffel Nanterre Seine), for which the occupancy rate on delivery at end-November 2024 was still limited. Adjusted for provoked vacancy (redevelopment projects), the occupancy rate is 81.8% (vs. 83.4%). In addition, the average length of leases and their firm periods came to 5.1 years and 3.1 years respectively (vs. 5.5 and 3.1 years at end 2023).
95% of 2024 rents collected
At end-February, 95.2% of the €80.2m of total rents invoiced in 2024 had been collected (vs. 97.5% last year).
This performance is the result of the in-house property and rental management model, which combines rigorous selection and proximity to tenants to build a high-quality rental base. In a fragile economy, the Company remains particularly vigilant in maintaining close ties and dialogue with its customers. The decline to 95.2% reflects the difficulties encountered mainly by two tenants of Paris assets, for which the Company remains confident of their rapid reletting.
Tenant risk monitoring, based on Coface and Credit Safe ratings, continues to show that over 80% of the rental base consists of tenants in the top two categories (low or very low risk), demonstrating its resilience.
EPRA earnings down to €1.3 per share
On a like-for-like basis, gross rental income fell by 0.5%, with the impact of vacancies and negotiations (-€4.6m) largely absorbed by that of indexation (+€4.2m, +5.3%). Overall, rental income fell by 4.9% to €79.0m, with the impact of disposals (-€4.6m) only partially offset by acquisitions (+€0.5m). Rental income net of expenses fell by 8.7%, as 2023 benefited from a €2.0m catch-up of service charges, creating an unfavourable base effect for 2024.
Current EBIT came to €48.0m (vs. €52.8m), reflecting a marked reduction in operating expenses (€2.1m), in line with the adjustments made to the Group's structure. Customer risk increased by €1.5m.
Financial expenses rose to €13.0m (vs. €9.6m), with an average rate of 1.6% (vs. 1.2%), as 2023 benefited from a €4.0m product on derivatives (caps). Most of these caps matured at the end of 2023. At the same time, the -0.50% swaps used to maintain a relatively low interest rate were effective until the end of 2024. The Company is continuing its interest rate hedging policy, which at this stage guarantees an average rate of less than 2.50% on a nominal amount of €405m until the end of 2026.
Following the update of the EPRA performance measurement guide (EPRA BPR) in September 2024, the EPRA Earnings now includes other costs related to the funding structure (such as perpetual subordinated loans) as well as adjustments related to non-operating and exceptional items. The cost of the perpetual subordinated loans (PSL) is €13.8m in 2024 compared with €13.4m in 2023, reflecting the rise in interest rates on the €75m 2007 PSL, indexed to 3-month Euribor.
After considering this change of method, other income and expenses, tax and income from associates, EPRA earnings (net recurring profit adjusted for other costs related to the funding structure) stood at €21.9m, compared with €32.4m in 2023, i.e. per share of €1.32€ and €1.95 respectively. For information, the old method EPRA result would have been €35.7m in 2024 compared with €45.8m in 2023.
After incorporating all EPRA adjustments (allowances, reversals, income from disposals, other costs related to the funding structure, changes in the value of financial instruments), consolidated net income was -€59.2m, compared with -€47.2m in 2023.
Recurring cash flow for the period was €24.1m, or €1.45 per share, compared with €2.03€ in 2023, reflecting the change in EPRA earnings calculated using this new method.
Net Asset Value down sharply, reflecting the value adjustment to the portfolio
The valuation of the Company's assets at 31 December 2024 was 5.8% lower than at end-2023 on a like-for-like basis. This decrease is due to the continued rise in the average capitalisation rate used in the appraisals, which stands at 6.01% (+20 bp vs. end 2023). This decline is slightly offset by the effect of rising rents. After taking into account changes in the scope of consolidation, assets totaled €1,616.9m (Disposals: -€84.5m, net capital gain: -€24.0m, change in fair value: -€93.4m, Capex: +€18.3m, developments: +€83.1m and acquisitions: €0).
Continuation EPRA Net Asset Value (NTA) per share falls from €40.8 to €35.0 at end-2024, mainly due to the adjustment in the value of the portfolio (€5.6 per share). Liquidation EPRA Net Asset Value (NDV) per share, which includes the increase in the value of hedging instruments, fell from €41.9 to €36.8
Taking into account the effect of the capital increase carried out on 17 January 2025, EPRA NTA and EPRA NDV are €8.9 and €9.1 per share respectively.
The property company's sustainable commitments, with innovation at the heart of its strategy
Already strongly committed and proactive on all ESG issues, the Société de la Tour Eiffel is pursuing its initiatives in line with the third pillar of its roadmap and is fully involved in the increasing demands for transparency with the taxonomy and the CSRD.
The Company has maintained its efforts to reduce the carbon footprint of its property business, as illustrated by the 14% fall in energy consumption in the scope of its activities and the improved coverage of audits to adapt its portfolio to climate change. It is also concentrating its efforts on preserving resources and biodiversity, in particular by introducing innovative circular economy solutions on its building sites and 'integrated management' contracts for green spaces.
For several years now, the Société de la Tour Eiffel has also been fully committed to innovation in its activities. Through a dedicated division, it is working on the management of construction, renovation and operating waste and on reuse, in line with the Reuse Booster initiative, and is putting in place circular economy practices on assets under renovation or construction, actively participating in the decarbonisation of the property business.
...strengthened in 2024 with the introduction of a SLL
In line with this approach, last April the Company set up a €90m, 7-year Sustainability Link Loan (5 years with 2 options to extend by a further year), linked to the achievement of targets for 2030, including a 15% reduction in energy consumption compared with 2022, environmental certification of developments to at least "very efficient" level, and 700 hours of ESG training for employees. This line is not drawn down to date, following the repayment of the amount outstanding using part of the proceeds of the capital increase in January 2025.
Proposal to maintain dividend suspension
In line with the announcements made in connection with the capital increase, the Board of Directors will propose to the Annual General Meeting that the dividend suspension be continued this year. The Board of Directors will study the possibility of returning, in the long term, to a dividend policy in line with that of its peers, based on its distributive capacity and in line with its operating cash flow per share. The long-term objective is to re-establish and then steadily increase the dividend, while respecting the Company's strategy and taking account of the economic environment.
A capital increase necessary to ensure the continuity of the Company's activities
On 17 January 2025, the Company raised €598.8m through a capital increase with preferential subscription rights. Approved by the Board of Directors and the General Meeting of Shareholders, this operation was mainly financially supported by the majority shareholder, the SMABTP group, increasing its stake from 52.3% to 93.8%. This capital raising will enable the company to rebalance its balance sheet, a prerequisite for the continued deployment of its roadmap and the sustainable transformation of its assets in response to the challenges of the property market.
The proceeds will be used first and foremost to reduce interest expense and ensure an ICR (EBITDA/Financial costs) ratio of more than 2x. Once this key banking covenant has been secured, the funds will be used to redeem the €180m PSL 2020 in June 2025, thereby avoiding an increase in the cost of the coupon from 4.5% to 9.5%. To this end, the Company has already reduced the drawdown on its RCF and SLL facilities from €160m to €0 and invested the remaining €440m, which will be used to repay the €200m EuroPP 2015 in July and the €180m PSL in June.
Suspension of the SIIC regime
The crossing ot the thresholds of 60% of the share capital and voting rights of the Company by the SMABTP group results in the suspension of the French SIIC (Sociétés d'Investissement Immobilier Cotées or Listed Real Estate Investment Companies) status (“SIIC status”) in 2025. In accordance with the provisions of Article 208 C I and IV of the French General Tax Code, the Company will exit the status if this threshold is not met again by the end of 2025.
Based on the analysis carried out by the Company's tax lawyers, the financial impact of this change of status should be limited (exit cost contained with regards to the expected unrealised capital gains and taxation that should be minimal in subsequent years - the Company does not anticipate any tax charge in excess of €2m in 2025 and€4-6m in subsequent years), and more particularly in comparison to the issues related to the need to strengthen the Company's equity.
An exit from SIIC status would also have consequences for the Company's shareholders. As a reminder, the SIIC status requires the payout of 95% of profits deriving from the rental of properties and 70% of capital gains on the disposal of properties and 100% of dividend distributions received by the Company from other companies subject to the SIIC regime. If the Company exits the SIIC status, it will no longer be subject to these obligations. However, the Company has not generated any distributable profits since 2021 so it is not required to make any distribution (its distribution obligations being deferred until the Company has the legal and accounting capacity to make distributions), and the amount paid to shareholders comes entirely from the share premium account. In these circumstances, the SIIC status is not currently a determining factor in our shareholder return policy.
This change in status does not call into question the Company's corporate purpose, nor its desire to maintain its listing on the Euronext Paris regulated market. Lastly, should an exit from SIIC status occur, the Company's shares would be eligible again to the PEA (the French tax-advantaged Plan d'Epargne en Actions) at the beginning of 2026. Lastly, the Company could opt for the SIIC status again in the future, provided that it once again meets the conditions for access to the status.
Financial position
At 31 December 2024, the gross financial debt stood at €798.2m and the cash position at €79.0m, giving a net financial debt of €719.1m.
The increase in the LTV ratio (covenant < 50%) from 43.3% at end-2023 to 44.5% at end-2024, reflects the decline in asset value. Including the €420m capital increase to repay debt, LTV at end-2024 was 18.7% and EPRA LTV 26.2%.
The 2024 ICR ratio (covenant > 2x) stood at 3.9x, down on 2023 (5.7x), which had benefited from the €4m Caps effect and had a maturity date of December 31, 2023.
Strengthened fundamentals to continue deploying the roadmap
With a rebalanced financial structure, Société de la Tour Eiffel is in a position to continue implementing its roadmap announced in 2022. It aims to adapt its portfolio in a sustainable way by reducing the proportion of office property to two-thirds, and by developing a greater diversity of uses. It also aims to strengthen its territorial coverage by targeting a third of its assets in major French cities. Finally, across the board, the teams are working to improve the environmental performance of its property portfolio, with a target of certifying at least 80% of buildings
Since 2022, this dynamic portfolio management has resulted in more than €210m being invested in properties (13% of the portfolio) that are no longer suitable for the Group's needs. At the same time, it has invested nearly €200m in assets that are more in line with their market and committed €134m to developments and redevelopments, with €90m spent by the end of 2024.
Despite a market context that has slowed its initial growth, it has reduced the proportion of office space to 75% (vs. 81% in 2021) in favour of greater diversification and mixed use. While Greater Paris still accounts for 75% of the portfolio, the Company is actively pursuing a regional rebalancing. Finally, its commitment to the environment is reflected in the fact that 83% of its assets are certified, illustrating its ambition to combine economic performance with sustainable responsibility.
With the support of the Board of Directors, Société de la Tour Eiffel remains determined to pursue this virtuous path, overcoming challenges and seizing market opportunities.
Calendar
- 29 April 2025: General Meeting of Shareholders
- 23 July 2025: 2025 Half-Year results (after market close)
- February-March 2026: 2025 Full-Year results (after market close)
The presentation of the results will be available on the Group's website on the morning of Friday 07 March: Financial information – Société Tour Eiffel (societetoureiffel.com).
Contacts
Media relations
Laetitia Baudon
+ 33 6 16 39 76 88
Investor relations
Alié nor Kuentz
+33 6 28 81 30 83
About Société de la Tour Eiffel
With a property portfolio amounting to €1.6bn, Société de la Tour Eiffel is an integrated property company with a strong culture of services. This agile company operates in various asset classes, including offices, urban logistics, managed residential and retail, in Greater Paris and other major French metropolitan areas. An active player throughout the property cycle, it assists its tenants – companies of all sizes and sectors – through high-standard direct management of its properties. Société de la Tour Eiffel conducts a pro-active and transversal CSR policy that is an integral part of its strategic orientations.
Société de la Tour Eiffel is listed on Euronext Paris (B board) – ISIN code: FR0000036816 – Reuters: TEIF.PA – Bloomberg: EIFF.FP – Member of the IEIF Foncières and IEIF Immobilier France indices