Financial information

We provide solutions adapted to changing lifestyles

In an uncertain environment, Altarea Cogedim continued its development. What were the highlights of 2011?

In contrast to global economic and financial trends, the growth momentum and strategy implementation for our Group’s businesses accelerated further in 2011. We are clearly establishing the strength of our business model, which combines recurring revenue with the ability to capture value according to market opportunities.

For retail, Altarea Cogedim has continued to shift the weighting of its asset allocation to regional shopping centers and large-format retail parks with the Family Village® concept. With a significant presence in markets with stronger demographic growth, i.e., the Paris Region, south-eastern France and northern Italy, these two formats now account for 70% of our portfolio. At the end of 2011 this portfolio included 49 properties with a total value of €2.6 billion. At the same time, the Group sold long-term holdings for €121 million and reinvested in property developments. We also obtained administrative authorizations for the construction of 1,184,000 sq. ft. (110,000 m²) of new retail space. Our strategy is to build a portfolio of 30 to 35 core assets with an average value of more than €100 million. In priority, we are targeting regional shopping centers and Family Village® retail parks as formats ideally adapted to evolving consumer trends.

The recent acquisition of RueduCommerce, a leading online retailer, is a perfect example of this approach of adapting our offer to evolving consumer trends. We are thus the first property company to have integrated online retail into our business model. Operational synergies have already been identified and several “pilot” brick-andmortar retail sites have been selected for an experimental phase prior to potential largerscale deployment. Moreover, RueduCommerce is setting an ambitious development goal, ultimately targeting business volume of €1 billion. In the end, this development will involve making transformational changes at every level of the Group’s organization, to become the first multi-channel property company.

For the residential business, what is your assessment of the past year?

In 2011, Cogedim pursued growth in its domestic market share, which has now risen to 5.5% in value. Building on the very strong commercial gains of the last three years in segments ranging from entry-level products to serviced residences for seniors, Cogedim’s revenue on a percentage-of-completion basis rose 42% to reach a backlog of twenty four months’ sales. Cogedim also expanded its geographical coverage with the creation of two new entities in Aix-en-Provence and Montpellier. As a “preferred” real estate brand, today Cogedim is France’s fourth-largest developer.

And for office properties, you changed your business model?

Office development is particularly affected by technological transformations, which in this case are being driven by new environmental requirements. To benefit from this new cycle, we are strengthening our capacity to invest in assets with high environmental added value. After raising €600 million from major French and international institutional investors, we are in a position to take advantage of opportunities.

This strategy provides a perfect fit with our existing expertise as an office real estate developer. Accordingly, in 2011 we delivered 1,830,000 sq. ft. (170,000 m²) of offices, all HQE®-certified. This includes the First Tower, a complex refurbishment project awarded the THPE® “Very High” energy efficiency label in La Défense, France’s largest office development district.

We have developed strong positions in each of our three markets by focusing on innovation, product quality and a customer-centered approach.

Beyond this year’s business performances, you speak of the role of your activity for end-users and its contributions to different categories of stakeholders. How does Altarea Cogedim stand out in this field?

Our products are the result of analysis of both developments in society and customer needs. Our focus is on understanding and anticipating changing lifestyles, work practices and consumer behavior. We are able to implement specifically adapted property solutions that are useful for everyone, while providing solutions to address a structural demand for housing, high environmental value-added offices and shopping centers adapted to consumer trends. We thus contribute to making responsible and sustainable improvements to the quality of urban life.