Business

ICADE Santé strengthens in Nantes

(AOF) – Icade Santé has concluded with the private hospital group Vivalto Santé, the acquisition of the group Confluent (Nouvelles Cliniques Nantaises), holding the Confluent private hospital located in Nantes. At the end of the transaction, Icade Santé becomes owner of the real estate of the Private Hospital Confluent worth 194 million euros. Developing almost 58,000 square meters for 509 beds and places of hospitalization and 28 operating rooms, the Confluent Private Hospital is one of the largest private clinics.

The operation of the site is taken over at the same time by the Vivalto Santé Group, the leading national operator of private hospitalization. A firm 12-year lease was concluded between the operator and Icade Santé.

This acquisition, which is part of Icade Santé's growth plan, with a target of investing 1 billion euros in France by 2022, consolidates the partnership between Icade Santé and Vivalto Santé, with a third establishment rented to this operator.

Icade Santé has a total portfolio of 128 assets, for a total value of 4.9 billion euros (HD).

AOF – LEARN MORE

Icade – Things to remember

– Fifth French real estate company and first in Europe for offices and business parks, with a real estate portfolio of € 11.3 billion;

– Dynamism of real estate development in France, the office market in Ile-de-France and growing needs for healthcare homes in Europe;

– Integrated real estate group organized into 3 divisions: commercial real estate (71% of assets, divided between offices for 3/4 and commercial parks), Foncière santé (19%) and Promotion;

– Economic model based on synergies between the clusters: resilience of the property health sector leading to the development of commercial real estate, valuation of expenses of the latter through the promotion, especially for Greater Paris and TGV metropolises;

– 95% office and business park in Ile-de-France, of which nearly 20% in Paris and 25% in La Défense;

– Reinforcement in offices since the merger with ANF Immobilier;

– Strong dynamic of profitability for 3 years, brought to endure;

– Sound financial situation, the highest rated of the sector with Gecina;

– Distribution rate close to 90%, ie a dividend of € 4.60 for 2018, paid in two installments.

Icade – The points to watch

– Raising rates detrimental to the sector.

– In the short term, weak growth or stagnation of revenues due to disposals of mature assets;

– Declining housing permits in housing accentuating the fragility of the residential promotion market (4.5% market share for Icade);

– Strong market correlation with the level of interest rates, the business climate and the regulatory environment;

– Change in revalued net assets or NAV, € 89.8, key figure of the land sector on the stock market, compared to the stock market price;

– Change in the occupancy rate of buildings (94.6%), indicator of the real estate market, the speed of commercialization of housing and stocks;

– Shifted effect of several quarters of order reversals in the accounts (sales model in the Future State of Completion – VEFA);

– Development of 65 hectares held in the north of Paris, as part of the 2024 Olympic Games and integration of the 12 health facilities in France acquired in April 2019;

– Achievement of the objective 2019, confirmed, stability of the current net cash flow per share and a 4.5% increase in the dividend;

– Rumors of merger with Foncière des Régions after transfer by the Caisse des dépôts;

– Capital controlled at 39% by Caisse des Dépôts, ahead of Crédit Agricole with 18.4%.

Business services

Interim actors diversify their activities to remain competitive. They are turning more to human resources consulting, training or recruitment. This development was favored in France by the Borloo law, adopted in 2005. This law opened the recruitment market to temporary employment companies. For large groups the training of people is a strong strategic focus because it allows them to meet the needs of corporate customers, who are finding it increasingly difficult to recruit. The groups are also turning to digital service companies (formerly SSII), which operate in a sector with a higher margin than the interim. One of the world's leading temporary workers, Randstad, owns Ausy, which has 2,500 engineers. Adecco Group now owns the digital services company, Modis.

Immovable

In a sector of commercial real estate that is performing well, Covivio (formerly Foncière de Régions), Foncière Inea, Gecina, Icade, Société Foncière Lyonnaise, and Unibail-Rodamco-Westfieldd posted good results in 2018. However these landlords face a set of challenges. Faced with the risk of obsolescence, some assets require investment, and real estate companies such as Gecina and Icade have made arbitrations. These major disposals will reduce their rental income and Gecina has already forecast a slowdown in its performance in 2019. Another challenge: the decline in real estate development. After three years of strong growth, the residential market is slowing down. And the situation should not improve this year because, in anticipation of the municipal elections of 2020, mayors issue fewer building permits.

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