Covivio - Press release - 2024 full-year results

Paris, February 19, 2025, 6:00 PM

2024 Annual results

Recurring earnings up +10%, balance sheet strengthened, favorable outlook 

"In a changing real estate world, Covivio has taken advantage of its diversified real estate operator model by adapting its portfolio and enhancing its quality. With over €1 billion invested over the year, the Group seized new growth opportunities, particularly in the hotel sector, while finalizing its €1.5 billion disposal plan. The Group's excellent operating performance implied a +10% growth in recurring earnings in 2024. Covivio intends to pursue this growth momentum in 2025 and will propose a dividend increase of +6% at the next General Meeting.”

Christophe Kullmann, CEO of Covivio  

Qualitative asset rotation 

Strong growth in operating performance: revenues up +6.7% on a like-for-like basis

+10% growth in recurring earnings, back to a leverage ratio below 40%

►       Recurring net income (adjusted EPRA Earnings) up +10% to €477.4 million (stable per share, at €4.47) 

►       Lower leverage ratios: LTV of 38.9% (vs. 40.8% at end-2023) and Net Debt/EBITDA of 11.4x (vs. 12.3x)

► Net asset value (EPRA NTA): €79.8/share, up +2.7% over the 2^nd half-year (-5% year-on-year following payment of the 2023 scrip dividend, at €38.61/share)

Further improvement in ESG indicators 

►       98.5% of assets with green certification, including 71.2% of offices certified HQE/BREEAM Very Good or higher

►       Covivio awarded Fairest Landlord in German residential property for 7^th year in a row  

►      L'Atelier, Covivio's European headquarters, honored at SIMI and winner of the ULI Europe Awards

2025 priorities and 2024 dividend 

► Implementing the strategic priorities announced at the end of 2024: strengthening hotel operations, rolling out the integrated operator model and extracting growth potential

►            2025 recurring net result (adjusted EPRA Earnings) guidance of around €495 million, i.e. +4% compared to 2024 ►           Proposed cash dividend of €3.50/share for 2024, up +6% year-on-year

Adjusted EPRA Earnings and EPRA NTA, NDV and NRV are Alternative Performance Indicators as defined by the AMF and are detailed in sections 3. Financial information, 5. EPRA Reporting and 7. Glossary of this document. The audit procedures on the financial statements have been completed. The certification report will be issued after the specific verifications. 

Key operating and financial indicators 

  * Adjusted EPRA Earnings

Covivio: a diversified and constantly improving portfolio

Covivio holds €23.1 billion (€15.6 billion Group share) of assets in Europe, managed according to three strategic pillars:

1.     Location in the heart of European capitals and major business and leisure hubs, particularly in Paris, Berlin and Milan. 94% of our assets are located in central areas^[1] and 99% is less than 5 minutes' walk from public transport.

2.     An innovative and integrated real estate operator approach, inspired by the hotel industry. Covivio has an integrated hotel platform, WiZiU. This know-how is also deployed through Wellio, our operated office spaces, or in our ability to propose tailor-made offers. This approach has been recognized by customers using Covivio buildings: the Kingsley 2024 survey of 270 office users in France, Italy and Germany once again revealing an overall satisfaction rating of 3.9/5 (vs. benchmark of 3.6). 

3.     Sustainable development: Covivio is committed to the climate transition, for a positive and lasting impact on the city. This objective is illustrated by an ambitious carbon trajectory (40% reduction in emissions from 2010 to 2030) and is praised by the main rating agencies (5-star by GRESB and AAA by MSCI). 

The portfolio consists of 51% of offices, mainly in Paris, Milan and major German cities, of which 70% in city centers (vs. 59% in 2020) and 24% in major business hubs; 29% of residential, mainly in Berlin (57% of the residential portfolio); and 20% of hotels in major European destinations (Paris, Berlin, Rome, Madrid, Barcelona, London, etc.), leased or managed by leading operators: Accor, IHG, Marriott, B&B, NH Hotels, etc.

Qualitative asset rotation 

€1.1 billion invested in 2024, mainly in hotels, at a yield above 6.5% 

In 2024, Covivio invested €1.1 billion (including €507 million by way of asset contributions), at an average yield above 6.5%, to strengthen its leadership in hotels and the quality of its portfolio. 67% of investments were concentrated on hotels (€733 million Group share). The year 2024 thus marked a major strengthening of this asset class, which now accounts for 20% of Covivio's portfolio, up by +3 points year-on-year. 

Increased stake in Covivio Hotels subsidiary 

During the first half of the year, Covivio acquired 8.7% of the capital of its subsidiary Covivio Hotels, in exchange for new Covivio shares, mainly from Generali, and now holds 52.5% of the capital of Covivio Hotels. With this contribution, equivalent to the acquisition of €507 million in assets, Covivio has strengthened its position in one of the highest-quality portfolios on the market, comprising 283 prime hotels, 90% of which are located in major European destinations, such as Paris, Berlin, Rome, London, Barcelona and Madrid. 

Value-creating asset swap with AccorInvest 

At the same time, Covivio has taken a significant step towards unlocking the value-creation potential of its hotel assets. In November 2024, Covivio Hotels finalized the ownership consolidation of operating and property companies held jointly with AccorInvest. The agreed value of the property companies sold to AccorInvest represents €130 million in Covivio

Group share, and the agreed value of the operating companies purchased by Covivio Hotels represents €157 million. Based on 2023 figures, the difference between net rental income (100% variable) from assets sold and EBITDA from goodwill acquired represents more than €11 million. Beyond the immediate accretion to earnings, this rebalanced portfolio has significant potential for creating income and value, with €52 million Group share of capex identified with a marginal yield above 20%. Operating properties now account for 38% of the hotel portfolio, compared to 62% held with mainly fixed leases.

Acquisition of a leisure hotel in Southern Europe 

On December 19, 2024, Covivio announced the acquisition of the 4* Iberostar Las Dalias hotel in Tenerife, for €81 million including transfer taxes (€43 million Group share) and a stabilized yield of 6.75%. This 429-room property is leased under a firm triple-net lease until 2041 to Iberostar, Spain's 5^th largest hotel operator. Renovated in 2021 and compliant with CRREM objectives^[2], it shows excellent environmental performance.

With this transaction, Covivio continues to strengthen its exposure to the hotel business, particularly in the leisure segment in Southern Europe.  

Continued investment in the portfolio to enhance centrality and quality

In 2024, Covivio delivered 3 hotel operating properties in Lille and Bruges, as well as a Melia leased hotel in Malaga. These projects represent 458 keys, for capex of €15 million Group share (€28.5 million at 100%) and a marginal return on capex of over 15%. In Bruges, Covivio has introduced the new Novotel concept, after building 10 additional rooms and renovating the lobby and service areas. In Lille, two deliveries took place during the year: the Hilton Lille (replacing Crowne Plaza) after a complete renovation of the rooms, and the Grand Hotel Bellevue located in the heart of Lille's Grand Place, after the creation of 5 rooms and a rooftop bar.

In offices (25% of investments), the Group focused on its pipeline of projects, mainly located in the city centers of major European capitals, for a total investment of €279 million, Group share. In Q4 Covivio delivered L'Oréal Italia's new headquarters, part of The Sign urban regeneration project developed by the Group in Milan, which is already home to major multinationals such as AON and NTT Data. The new building, totalling 13,000 m² over 9 floors, has been designed

to the highest standards of sustainability and technological innovation, and features a facade alternating glazed surfaces and opaque metal elements. Certified WiredScore Platinum, the building is now aiming for LEED Platinum, WELL and Biodivercity certification. It represents a total investment of €76 million, with a return on investment of 6.1%.

The remaining part of investments (8%, or €88 million) mainly concerns capex for modernizing and improving the energy performance of the German residential portfolio.

€766 million of new disposal agreements signed in 2024

In a still quiet investment market, Covivio has signed disposal agreements worth €766 million Group share (€1.3 billion at 100%), with an average margin of +3% on appraised values at the end of 2023 and an average yield of 5.1%. With

€1.6 billion in disposals and agreements signed, Covivio has finalized its €1.5 billion disposal plan between the end of 2022 and the end of 2024.

In offices, the Group secured €361 million in disposal agreements (€428 million at 100%), close to appraised values  (-0.5%) at a yield of 5.6%. These disposals involved both mature assets and buildings to be converted to residential use. At the end of 2024, Covivio signed an agreement with Valesco for the future headquarters of a luxury brand in Milan, for almost €200 million.

In German residential, €166 million Group share (€244 million at 100%) was sold, at an average premium of +11% on appraised values, with in particular: the creation of a joint venture in Berlin with CDC Investissement Immobilier, in line with end-2023 values, contributing €93 million Group share to the disposal program; and continued unit sales, for €58 million Group share (€89 million at 100%), at an average premium of +40% to end-2023 appraised values. 

In hotels, disposal agreements totalled €239 million Group share (€606 million at 100%), at an average premium of +4% on appraised values. They mainly concerned properties sold as part of the asset swap with AccorInvest, non-strategic hotels in Germany and Spain, and joint disposals of operating and property companies alongside AccorInvest. 

Portfolio growth of +3% at current scope and stabilization like-for-like

The real estate investment market remained muted in the first quarter of 2024 across most asset classes, with the exception of hotels. Since the second quarter, there have been more positive signs. Transactions have increased in the hotel sector, while large transactions have made a comeback in German residential property, and the most sought-after offices are trading at yields of around 4%. 

Against this backdrop, Covivio's portfolio grew by +3% at current scope, to €15.6 billion Group share (€23.1 bn at 100%), thanks to the strengthening of its hotel business. On a like-for-like basis, asset values stabilized in the second half, at +0.2%, thus -1.1% for the year as a whole. The second half of the year saw a return to growth in hotel and in residential values in Berlin.

Hotel assets, boosted by revenue growth, rose by +1.5% on a like-for-like basis, both on leased assets (+1.4%) and on hotel operating properties (+1.7%). Growth was particularly strong in hotels in France (+2%) and southern Europe (+4.8% in Italy, +3.4% in Spain), driven by revenue growth and asset management initiatives. The average yield on assets was 6.4% (+50bps year-on-year).

In offices (-0.5% on a like-for-like basis in H2 2024 and -3.1% over the year), values in France rose in the second half (+0.7%, and -0.6% over the year), thanks to the performance of Paris CBD (+3.2%), while Milan was stable (0%, -0.9% over the year). In Germany, values continued to adjust, down -15% over the year, due to a still sluggish investment market. The average yield on office assets rose by +30bps to 5.8%.

Lastly, German residential property values rose by +1% (including +1.1% in the second half). Berlin, which accounts for 57% of the portfolio, outperformed, with an annual increase of +3.6%. The average value of residential properties is

€2,465/m², of which €3,125/m² in Berlin and €1,796/m² in North Rhine-Westphalia, and the average yield is up +20bps year-on-year to 4.3%. The portfolio is valued on a block basis. However, 50% of the portfolio, i.e. €2.3 billion, is already divided, particularly in Berlin (71% / €1.9 billion), where the gap between block value and market price for condominium is +49%.

Revenues up +5% at current scope and +6.7% like-for-like                           

In 2024, revenues amounted to €1,038.4 million and €679.8 million Group share, an annual increase of +5% at current scope. The strengthening of the hotel business and strong operating performance more than offset the impact of divestments. On a like-for-like basis, revenues rose by +6.7%, boosted by indexation (3 pts), higher occupancy rates and rents on relettings and renewals (2.9 pts), as well as variable hotel revenues (0.8 pt).

Hotels: revenues up +23% at current scope and +7.2% like-for-like

Structural growth in the hotel segment continued in 2024, with RevPAR up +4% on average in Europe, driven by price increases (+3%) but also by an improvement in occupancy rates (+0.5 pt). The best performances were achieved in Southern Europe, with Spain posting strong RevPAR growth of +13%. Germany, which had been lagging behind, rebounded to +7%. France ended the year up +2%, with the Olympic Games period more than offsetting the wait-andsee effect of tourists preceding the event. The return of leisure customers has been confirmed since the ^4th quarter, with RevPAR growth of +6% in France in December.

This favorable environment enabled Covivio's hotel revenues to grow by +7.2% on a like-for-like basis. This performance is attributable to both fixed rents, up +4.3%, and variable revenues, up +11.9%. At current scope, revenues were up +23%, benefiting since the 2^nd quarter from the increased stake in Covivio Hotels.

Offices: up +8.1% on a like-for-like basis and occupancy rate up +100bps to 95.5%.

In offices, the polarization of the market was confirmed in 2024, with demand still concentrated on central, serviced assets with high energy standards. Prime rents continued to rise, by +12% year-on-year in Paris (to €1,200/m²) and +4% in Milan (to €775/m²). 

In this context, Covivio's upmarket positioning (centrality, high environmental performance, premium services) is bearing fruit. In 2024, Covivio let and renewed nearly 176,200 m², up +35% on 2023. The office portfolio is mainly made up of city-center assets (70% of the total, 97.6% occupied), where the reversion captured on relettings and renewals is +12% on average (including +19% on 4,500 m² in the Gobelins building in Paris 5^e and +14% in the Percier building in Paris CBD). At the same time, the Group continued to increase the occupancy rate of its portfolio. The core portfolio in the major business hubs (24% of the total) saw its occupancy rate rise by +1.9pt over the year, to 94.9%, thanks in particular to lettings of Urban Garden in Issy-les-Moulineaux (1,800 m²) and So Pop in Paris-Saint-Ouen (6,700 m², now almost 90% let). The non-core portfolio (6% of the total) was also filled, notably by the letting of 7,900 m² at the Xylo building in Fontenay, bringing the occupancy rate to 84.5% (vs. 82.3% at end 2023). Overall, the office occupancy rate improved by +100bps over one year, to 95.5%.

Rents were down -1%, due to asset disposals in 2023 and 2024, but up strongly on a like-for-like basis, by +8.1%, mainly driven by indexation (4 pts), the rebound in occupancy rate (+3.6 pts) and positive reversion (+0.5 pt).  

German residential: growth accelerates to +4.3% on a like-for-like basis

The housing shortage continues to grow in Germany. According to the IFO Institute, around 250,000 housing units will be delivered in 2024, an annual decline of -15% and far from the government's target of 400,000 units per year. These figures are likely to remain low again in 2025, given the 215,000 building permits authorized over the year to the end of November 2024 (-21% vs. 2023). This imbalance is all the more pronounced in Berlin, which is reflected in rising rents, according to Immoscout24, of +3% year-on-year for new homes and +6% for existing ones. Prices are also on the rise again, by +5% for new and +2% for existing, at €4,643/m², which is +49% higher than the appraised values of Covivio's assets in the area. 

Against this backdrop, like-for-like rental growth accelerated to +4.3% vs. +3.9% in 2023, benefiting from indexation (for 1.8 pt), property modernization programs (for 1.3 pt) and relettings (for 1.2 pt) with high reversion (+24%, of which +36% in Berlin). Occupancy rate remained high at 99.2%. 

Overall, the Group’s average occupancy rate continues to rise, to 97.2% (vs. 96.7% at end 2023), while the average firm lease term is 6.2 years.

Balance sheet quality further enhanced in 2024 

€1.9 billion refinanced in 2024, on favorable terms 

In 2024, the Group has secured almost €1.9 billion (at 100%) in financing or refinancing (€1.2 billion Group share), with an average maturity of 7 years. 

In May 2024, Covivio Hotels issued €500 million in green bonds, maturing in 2033, with a margin of 148 bps. On the mortgage market, €1 billion of financing was secured, mainly on hotel portfolios in Spain and German residential properties.

The Group's net available liquidity continued to rise to €2.5 bn (vs. €2.4 bn at end 2023). It now covers debt maturities up to June 2027.

Equity strengthened by €536 million over the year

Shareholders' equity was strengthened by €536 million in the first half: €280 million from the reinforcement in Covivio

Hotels through an exchange in shares, and €256 million from the option to pay the dividend in shares, subscribed to by

77.5% of the share capital at €38.61/share, reflecting shareholder support

Significantly improved debt indicators 

Rated BBB+, stable outlook by S&P, Covivio strengthened the quality of its balance sheet in 2024. The completion of the disposal plan, the payment of the 2023 dividend in shares and the stabilization of asset values enabled the loan-tovalue (LTV) to fall by -190 bps year-on-year, to 38.9%, in line with the Group's policy of an LTV ratio below 40%. The net debt/EBITDA ratio is also evolving favorably, down nearly 1 point to 11.4x (vs. 12.3x at end 2023).

Debt has an average maturity of 4.8 years (stable) and remains strongly protected against rising interest rates: on average, 94% of debt is hedged against changes in interest rates in 2025, and the average maturity of hedging instruments is 5.8 years. The average interest rate on Covivio's debt is 1.71% (vs. 1.50% at the end of 2023) and is expected to remain below 2.5% until the end of 2028.  

Growth in recurring net result and proposed dividend up +6% 

Recurring net result of €477 million, up +10% year-on-year 

Buoyed by strong rental momentum, net revenues rose by +5.6% year-on-year to €686.4 million. At the same time, tight control of operating costs enabled operating income to grow by +7.9% to €571.8 million. The net financing expenses remained almost stable over the year (+0.7% to -€98.1 million), with the reduction in debt offsetting the rise in the average interest rate. 

Recurring net income (adjusted EPRA Earnings) rose by 10% year-on-year to €477.4 million, exceeding the €460 million target. Earnings per share came to €4.47, stable due to the increase in the average number of shares

Covivio's net result came to +€68 million (vs -€1,419 million in 2023), with the slight drop in values more than offset by recurring result.

EPRA NTA net asset value of €79.8/share

Continuation net asset value (EPRA NTA) came to €8,896 million, up +5% year-on-year, with the increase in Covivio Hotels' share capital (in exchange for new Covivio shares) more than offsetting the slight decline in asset values on a like-for-like basis. On a per share basis, EPRA NTA was €79.8, down -5%, due to the increase in the number of shares, notably following subscription by 77.5% of shareholders to the payment of the dividend in shares. In the second half, NTA per share nevertheless rose by +2.7%.

Liquidation net asset value (EPRA NDV) stood at €8,686 million (€78.0/share) and replacement net asset value (EPRA NRV) at €9,705 million (€87.1/share).

Proposed dividend of €3.50 per share, up +6% 

At the Annual General Meeting on April 17, 2025, Covivio will propose a cash dividend of €3.50 per share, up +6% vs. 2023. 

Ex-date will take place on April 30, 2025, for a payment on May 5, 2025.

ESG: further improvement in indicators 

Continued increase in certified assets, now at 98.5% 

Covivio has continued to increase the rate of certification of its properties: the proportion benefiting from HQE, BREEAM, LEED or equivalent certification, in operation and/or under construction, now stands at 98.5% (+3.2 points vs. 2023).

In addition, the proportion of office buildings benefiting from the highest levels of certification (Very Good and above) standsat 71.2%, up +4.0 pt compared with the end of 2023.

This policy improving the environmental performance of property assets actively contributes to the Group's ESG ambitions, in particular that of reducing its greenhouse gas emissions by 40% between 2010 and 2030 (across all scopes 1, 2 and 3 and the entire asset lifecycle: materials, construction, restructuring and operation). 

Increase in the proportion of debt linked to ESG criteria 

A pioneer in the issuance of green bonds since 2016, Covivio has continued to increase the weight of its green debt (associated with ESG objectives) to 64% at the end of 2024 (compared with 57% at the end of 2023 and 38% at the end of 2022), and 100% of Covivio's bond debt is composed of green bonds.

Covivio once again awarded by its German residential tenants 

On the German residential market, Covivio was awarded the title of "Fairest landlord" in 2025 for the 7^th consecutive year, receiving a "Very Good" rating, the highest possible. Conducted by the German business magazine Focus-Money, the study evaluates Germany's leading landlords on the basis of 32 criteria divided into 6 categories (ethics, tenant support, tenant service, rental costs, design of housing and surroundings, sustainability). 

L'Atelier wins SIMI and ULI Europe Awards 

L'Atelier, Covivio's new European headquarters in Paris' 8^th district, was awarded the Europe Awards for Excellence by the Urban Land Institute (ULI) on October 16, from a shortlist of 8 projects. The award, which was presented at the C Change Summit, the real estate industry's meeting place for tackling the challenges of climate transition, recognizes the best practices and most outstanding projects in urban development.

At SIMI 2024, Covivio also received two awards for its emblematic projects: L'Atelier, winner in the "Restructured office building" category, and Grands Boulevards, located in the 9^th district of Paris, which won a special "Heritage and Renaissance" prize. These two awards recognize the Group's vision, expertise and ability to design unique, serviceoriented, high-performance projects.

2025 outlook

Over the last few years, and in particular in 2024, Covivio has extensively transformed its portfolio by reinforcing its centrality and quality, but also by adding a strong operated real estate dimension, a source of additional income and value creation. At the same time, after two years focused on financial discipline, the Group's balance sheet has been strengthened. Covivio has thus emerged stronger from the real estate crisis, as the investment market is starting to recover and the rental market is well oriented, for central offices as well as hotels and residential properties.

Covivio intends to continue its growth momentum in 2025, with the following priorities: 

(i)            Continuing to rebalance its portfolio between its three asset classes 

(ii)           Extracting growth potential from existing assets 

(iii)          Deploying its integrated real estate operated offer across all asset classes

With a portfolio that has proven its attractiveness to users and a solid financial structure, the Group intends to pursue the qualitative rotation of its portfolio towards more hotels. In this context, Covivio Hotels will propose^[3] a scrip option for its 2024 dividend, to which Covivio, 52.5% shareholder, intends to subscribe. This investment, corresponding to €117m for Covivio, will enable the Group to pursue the strengthening of its hotel exposure. 

2025 will also mark the integration of the operating companies acquired from AccorInvest and the launch of the associated asset management initiatives. After signing new management contracts (direct management via the Group's WiZiU management platform, or with third-party operators Accor, Sohoma or Atypio), calls for tender are underway to select the brands and concepts best suited to each hotel. The expected return on investment is in excess of 20%.

In offices, the Group intends to continue meeting users' aspirations through its pipeline of committed projects, deliveries of which will accelerate until 2027. With 85% of projects located in city centers, including emblematic projects such as Corso Italia in Milan, Monceau in Paris and Alexanderplatz (a mixed-use project) in Berlin, this pipeline is expected to generate €66 million in additional revenues.

At the same time, Covivio is working on the launch of two office-to-hotel conversions in eastern Paris (11^th and 13^th districts): Voltaire (10,400 m²), located near Place de la République, and Bobillot (3,400 m²), in the Butte-aux-Cailles district. The total budget for these projects (including land) is close to €150 million, with a yield of around 6%. 

Finally, in German residential, Covivio will continue to extract growth potential (i) from rents, with an average reversion of over 30% (including over 45% in Berlin), and (ii) from values, through continued privatizations. In Berlin in particular, the gap between appraised values (€3,125/m²) and market values (€4,643/m²) has now reached +49%.

2025 Guidance: growth in recurring net result 

The qualitative repositioning of the portfolio in recent years has enabled Covivio to post solid rental prospects which, as in 2024, should more than offset the full-year impact on earnings of the 2024 debt reduction. Covivio is therefore targeting 2025 recurring net result (adjusted EPRA Earnings) of around €495 million, an increase of around +4%.

  AGENDA

 CONTACTS

                                  Press Relations                                                 Investor Relations

                                Géraldine Lemoine                                                   Vladimir Minot

Tel: + 33 (0)1 58 97 51 00   Tel: + 33 (0)1 58 97 51 94 geraldine.lemoine@covivio.fr             vladimir.minot@covivio.fr            

Louise-Marie Guinet

Tel: + 33 (0)1 43 26 73 56 covivio@wellcom.fr

 ABOUT COVIVIO

Thanks to its partnering history, its real estate expertise and its European culture, Covivio is inventing today’s user experience and designing tomorrow’s city.

A preferred real estate player at the European level, Covivio is close to its end users, capturing their aspirations, combining work, travel, living, and co-inventing vibrant spaces.

A benchmark in the European real estate market with €23.1 billion in assets, Covivio offers support to companies, hotel brands and territories in their pursuit for attractiveness, transformation and responsible performance.

Build sustainable relationships and well-being, is the Covivio’s Purpose who expresses its role as a responsible real estate operator to all its stakeholders: customers, shareholders and financial partners, internal teams, local authorities but also to future generations and the planet. Furthermore, its living, dynamic approach opens up exciting project and career prospects for its teams.

Covivio’s shares are listed in the Euronext Paris A compartment (FR0000064578 - COV), are admitted to trading on the

SRD, and are included in the composition of the MSCI, SBF 120, Euronext IEIF “SIIC France” and CAC Mid100 indices, in the “EPRA” and “GPR 250” benchmark European real estate indices, and in the ESG FTSE4 Good, CAC SBT 1.5°C, DJSI World & Europe, Euronext Vigeo (World 120, Eurozone 120, Europe 120 and France 20), Euronext® CDP Environment France EW, ISS ESG, Ethibel and Gaïa ethical indices and also holds the following awards and ratings: CDP (A-), GRESB (88/100, 5-Star, 100% public disclosure), ISS-ESG (B-) and MSCI (AAA).

Solicited ratings :

Financials:                    BBB+ / Stable outlook from S&P

1.  BUSINESS ANALYSIS                13

2.  BUSINESS ANALYSIS BY SEGMENT         22

A. OFFICES                  22 B. GERMAN RESIDENTIAL                31 C. HOTELS              37

3.  FINANCIAL INFORMATION                 42

4.  FINANCIAL RESOURCES                   51

5.  EPRA REPORTING          56

6.  FINANCIAL INDICATORS                    67

7.  GLOSSARY              68

1. BUSINESS ANALYSIS

A. REVENUES: €1.0 BILLION AND €680 MILLION GROUP SHARE IN 2024

                                                                                100%                                                                  Group share

1: Like-for-like change || 2: Operating Properties (EBITDA)

Group share revenues, up +4.9% at current scope, stand at €679.8 million vs. €648.0 million in FY 2023, due to: „ The reinforcement of the stake in Covivio Hotels (+€22.9 million);

„  The +6.7% increase on like-for-like basis, split between:

o    Offices: +8.1% like-for-like, driven by indexation and letting activity;

o    Hotels: a sustained like-for-like revenue increased by +7.2%, due to the continued rebound in variable revenues (EBITDA + variable leases) of +11.9% and a +4.3% like-for-like growth for fixed lease properties;

o    German Residential: a robust and accelerated growth of +4.3% like-for-like.

„  Reduction in office exposure through disposals (-€19.5 million);

„  Deliveries of new assets (+€2.6million), in Greater Paris and Milan; 

„  Vacated assets for redevelopment (-€9.4 million), mostly in Paris, Western Crescent and first ring for conversion into residential or hotel.   

B. LEASE EXPIRIES AND OCCUPANCY RATES 

1. Lease expiries: average firm residual duration of 6.2 years 

                                                      By lease end date                                By lease end date

(1st break)

Lease expiries schedule

In 2025, lease expiries with first break options represent €57.7 million: 

•       €21.8 million are already managed (€1.3 million of hotels, €20.5 million of offices for which tenant has no intention to vacate the property),

•       €5.2 million vacating for redevelopment,

•       €20.3 million refer to Suez departure in CB 21 tower, in La Défense, where take-up in 2024 was 14% above 10year average. Part of the asset is expected to be relet with limited capex, with already first advanced discussions, and a capex program is being defined to upgrade upper floors.

Then, €10.4 million (1.3% of Annualized revenue) are still to be managed in offices, mostly on core assets for which tenant decision is not known yet. 

2. Occupancy rate: 97.2% secured, +0.5pt vs. 2023

                                                                      Occupancy rate (%)

⁽¹⁾ On leased assets

The occupancy rate continued to increase, by +50bps vs 2023, to 97.2% for the whole portfolio. This is linked with the good performance in offices with occupancy up by +100bps to 95.5%, mostly thanks to several lettings in Greater Paris. 

C. BREAKDOWN OF ANNUALIZED REVENUES

                                         By major tenants                                                      By activity

D. IMPROVED COST TO REVENUE RATIO

Cost to revenue ratio is down by -110bps year-on-year, mostly thanks to the increase of occupancy rate, generating a better recovery rate on property expenses. 

E. DISPOSALS: €766M OF NEW AGREEMENTS 

1: GS: Group share

New disposals and agreements totalled €766 million Group share (€1,278million at 100%) in 2024. 

These disposal agreements were made of offices for the largest part, for a total of €361 million Group share, with an average margin of -0.5%. It dealt with 12 offices in France and 13 offices in Italy (mostly from the Telecom portfolio, in regions), as well as several conversions to residential projects.

In German residential, €166 million Group share (€244 million at 100%) of disposal agreements were achieved over the year, with an average premium of +11.1% vs. 2023 book values. Major achievements were the creation of a joint venture with CDC Investment on a portfolio in Berlin, in line with the values at the end of 2023, contributing €93m (Group share) to the disposal program, and, at the same time, the Group continued with its privatisation program, selling €58m Group share (€89m at 100%), at an average premium of 40%. 

In the hotels business, disposal agreements totalled €239m Group share (€606m at 100%), at an average premium of +3.8% to appraised values. These mainly include the disposals to AccorInvest in the context of the asset swap, as well as non-strategic hotels in Germany and Poland and joint disposals (OpCo and PropCo) in France alongside AccorInvest.

F. INVESTMENTS: €1.1BN GROUP SHARE REALIZED 

€1.1 billion Group share (€1.5 billion at 100%) of investments were realized in 2024, with an average yield above 6.5%, to improve the quality of our portfolio and create value:    

„  €507 million were invested to increase exposure to hotels, through the acquisition of 8.7% stake in Covivio Hotels in exchange for Covivio shares,

„  €187 million Group share (€400 million at 100%) were invested to further optimize our hotel performance, including €157 million Group Share (€389 million at 100%) of hotel operating companies in the context of the asset swap with Accorinvest, and the acquisition of an hotel in Tenerife for €43 million Group Share (€81 million at 100%). 

„  Capex in the development pipeline totalled €237 million Group share (€267 million at 100%),

„  €153 million Group share (€232 million at 100%) relate to works on the operating portfolio (including 2/3 of valorisation work), of which €79 million in German residential (63% for modernization capex, generating additional revenue).

G. DEVELOPMENT PROJECTS:

1. Deliveries: 38,900 m² of offices delivered in 2024

Two offices projects were delivered or sold in 2024 in Milan: 

„  The Sign D (13,200m² and €76 million total cost), 92% let

„  Rozzano (25,700m² and €44 million total cost), 58% let (vs 47% in 2023).

2. Committed office pipeline: €66m Group Share of additional revenue, 85% in citycenters 

Covivio has an office pipeline of 7 buildings with €66m of additional revenue potential in France, Germany, and Italy, the bulk of it (85%) in the city centers of Paris, Milan and Berlin, where demand for prime assets is high. Capex still to be spent on the committed development pipeline amount to €400 million (€133 million per year by 2027 on average).

This pipeline is 47% pre-let and will participate to the continued improvement of the portfolio quality towards centrality & grade A buildings (100% of the projects certified “Excellent” or above).  

„  Expected deliveries before year-end 2025: 2 projects in Germany (Icon and Loft), 1 project in Milan (Corte Italia).

„  Deliveries from 2026 refer to 4 projects in Paris CBD (Grands Boulevards, Monceau), Paris 1st ring (turnkey development for Thalès), Berlin (Alexanderplatz). 

1. Business analysis - Group share 

2024 results

¹  Surface at 100%

²  Including land and financial costs

³  Yield on total rents over total budget 

18

3. Build-to-sell pipeline 

„  Five projects were delivered in 2024, including 4 projects in France and 1 project in Germany, for a total budget €114 million Group Share (€151 million at 100%) & 10% margin. These projects are 89% sold.

Total 

                Committed projects - end                                          Total            Budget ₁            Pre-sold      

                                                                             Unit            Budget 1                                            FY'24

                              of 2024                                                                           (€m, Group

                                                                                           (€m, 100%)                share)                    (%)  

¹ Including land and financial costs

„  At the end of December 2024, the German build-to-sell pipeline deals with 4 projects located in Berlin, where housing shortage is the highest in Germany, totalling 374 residential units and a total cost of €108 million Group share.

„  The current French pipeline is composed of 2 projects located in Greater Paris and Bordeaux, representing 260 residential units, a total cost of €45 million Group Share. 

„  The total margin of the committed pipeline reaches 6%.

4. Managed Pipeline

In the long-term, Covivio also owns more than 303,000 m² of landbanks that could welcome new development projects:

► in Paris, Greater Paris and Major French Cities (180,000 m²) mainly for turnkey developments;

► in Milan with Symbiosis area (33,000 m²) and Porta Romana (76,000 m²); ► and approximately 14,000 m² in Berlin.

H. PORTFOLIO

Portfolio value: +3.2% at current scope, -1.1% like-for-like change over the year

¹ LfL: Like-for-Like                                                                                                                                                                            

The portfolio increased by +3.2% at current scope, to reach €15.6 billion Group share (€23.1 billion at 100%). This is mostly explained by the reinforcement in hotels, offsetting the impact of disposals in offices.

On a like-for-like basis, the portfolio value changed by -1.1% mostly due to: 

„  Overall in offices, asset values were down -3.1% on a like-for-like basis but almost stable over the H2: - 0.5% (+0.3% on core city center portfolio). Substantial disparities were linked to centrality and geography. France is up by +0.7% over the H2 and Italy is stable while Germany values (14% of office portfolio values) continued to adjust (-5.9% over 2024).

„  Germany Residential values increased on a like-for-like basis in 2024: +1.0% A stronger performance was achieved in Berlin (57% of German residential portfolio), at +3.6% like-for-like. Average value per m² for residential part of the portfolio is €2,585m², of which €3,125/m² in Berlin. Assets are valued at their block value. 50% of the portfolio worth €2.3 billion, is already divided into condominiums, particularly in Berlin (71%; €1.9 billion), where the unit sale value is 49% above the block value.

„  In Hotels, portfolio values increased slightly (+1.5%), both on fixed leases: +1.4% and operating properties: +1.7%. Accelerating over the H2 + 1.0% after the +0.5% increase of the H1 2024.

Over the year, the portfolio transformation was achieved with an increase of the certification rates, from 95.3% to 98.5%.

Geographical breakdown of the portfolio at end of 2024

I. LIST OF MAIN OFFICE & HOTEL ASSETS

The value of the ten main assets represents 15% of the portfolio Group share.

2. BUSINESS ANALYSIS BY SEGMENT 

A. OFFICES: 51% OF COVIVIO’S PORTFOLIO

Covivio has implemented an overall offices strategy based on centrality, operated real estate, and sustainability. This strategy has been executed by increasing investments on best-in-class assets in central locations, improving the quality of the existing portfolio and exiting from non-core areas.

Today, quality has become a much more important driver of future growth for Covivio, which owns offices with high levels of centrality and accessibility, A-quality buildings, and top-level service offering. These offices buildings are located in France (27% of Covivio’s portfolio), Italy (16%), and Germany (7%) totaling €9.4 billion (€7.9 billion Group share) as of end December 2024.

This offices strategy is bearing fruit, as illustrated by the increase in occupancy rate in 2024, by +100bps to 95.5%.  

Covivio's portfolio is split as follows:

(84.5%) and the WALB (3.6 years) are lower, with a disposal or conversion into residential strategy. 

1. European office market: confirmed polarization, positive signals for investments 

        1.1.      French offices: confirmed polarization, yield compression for prime in H2

Take-up in Greater Paris office market reached 1,750,400 m² in 2024, down -11% year-on-year. At the same time, customer demand continues to polarize, as the preference for best places continues to increase, but also for the best located assets at the right price: 

► Paris inner city outperformed, with take-up down -9% year-on-year to 822,700m², 

► Paris inner city counted for 47% of the total take-up in Greater Paris (vs. 42% on average over the last 5 years),

► La Défense also proved to be better oriented in 2024, with take-up up by +60% yoy to 211,200m², and +14% above last 10-year average.

The immediate offer increased by +19% over the last six months to 5.46million m² and the vacancy rate now stands at 10.2% according to BNP Real Estate, up by +150bps year-on-year, but with strong disparities: below 3% in Paris CBD and close to 14% in the first ring and La Défense. 

Scarcity of the best assets in city centers continues to impact positively prime rents, reaching all-time levels in Paris at €1,200/m²/year (+12% yoy). Incentives in Greater Paris increased slightly to 26.3% in 2024, up +90bps vs. end-2023, with maintained disparities across sub-markets, from 14.3% in Paris Center West to 39.3% in La Défense. 

Office investments in France totaled €4.9 billion in 2024, down –27% YoY (of which -28% in Greater Paris at €3.3bn). Q4 showed better signs and prime yields even started to decline according to BNP Real Estate, at 4.0% in Paris CBD, -25bps vs H1 2024. 

        1.2.      Milan offices: still dynamic letting market and better investment market 

Milan office market recorded a total take-up of 372,000 m² in 2024, -11% year-on-year, with CBD highly demanded (+44% at 138,000m²). Demand is still focused on buildings in prime locations, offering good level of services, as demonstrated by the level of grade A/A+ properties, which count for 71% of the total take-up in Milan.

The average vacancy rate in Milan was down -100bps in 2024, bringing it down to +10.1%, of which -80bps at 5.1% in CBD (where most of Covivio’s portfolio is located).

The intense demand for high-quality spaces, combined with the scarcity of grade A assets, contributed to a new increase of prime rents in Milan, at €775/m²/year (+3% year-on-year), according to DILS.

With a total amount of €786 million invested in 2024, the Milan office investment market increased by +8% compared to last year. Prime yields stabilized, at 4.25% according to Cushman & Wakefield.

        1.3.      Germany offices: +5% in take-up, prime rents up +5% yoy on average

2024 take-up in top six German office markets increased by +5% year-on-year to 2,342,400 m² (but still 17% below 5year average), boosted by Münich (+34%), Cologne (+9%) and Berlin (+5%). 

Vacancy rates reached 6.5% on average, up +90 bps over one year. Hamburg (4.4%) and Cologne (4.0%) recorded among the lowest vacancy rates, followed by Munich at 6.0% and Berlin (6.5%), while in Düsseldorf and Frankfurt, vacancy levels remained higher, respectively at 7.7% and 11.1%. 

Prime rents grew on average by +5% vs. 2023, with varying performances: strong growth in Munich (+9%), +4% in Frankfurt and Hamburg.

According to Savills, investment volumes in German Offices increased by +10% YoY in 2024 to €5.3 billion. Prime yields stabilized since end-2023, at 4.4% on average for the top 6 cities in Germany, stable year-on-year. 

2. Accounted revenues: +8.1% on a Like-for-like basis

                                                             100%                                                     Group share 

1 LfL: Like-for-Like

Compared to last year, rental income decreased by -€3.2 million, mainly due to: 

„  Strong Like-for-like rental growth (+€23 million) of +8.1%, mostly driven by the impact of indexation (+4.0pts contribution) and increase in occupancy rate,

„  Disposals (-€19.5 million) realized in 2023 (-€9.9 million) and in 2024 (-€9.5 million),

„  Impact of vacated assets to be converted into hotel or residential (-€9.4 million) partially offset by deliveries of new assets (+€2.6 million).

3. Annualized revenue

4. Indexation

Fixed-indexed leases are indexed to benchmark indices (ILC and ICC in France and the consumer price index for foreign assets):

„  For current leases in France, 93% of rental income is indexed to ILAT, 5% to ICC and 2% to ILC.

„  In Italy, the indexation of rental income is usually calculated by applying the increase in the Consumer Price Index (CPI) on each anniversary of the signing of the agreement. 

„  Rents are indexed on the German consumer price index for 42% of leases, 10% have a fixed uplift and 32% have an indexation clause (if CPI goes above an annual increase between 5% and 10%). The remainder (16%) is not indexed and mainly let to public administration.

5. Busy rental activity: 176,214 m² let or renewed during 2024

2024  a dynamic year for letting activity, with 176,214 m² let or renewed, up by +35% vs 2023.

„  59,067 m² (€15.8 million) have been let or pre-let in 2024. New lettings totaled 45,090m², with an average uplift of +12%, the majority of which located in France (32,547 m²). All sub-categories benefitted from this continued appetite. In city-centers, The Line, 4,550m² in Paris 8^th was relet with a +22% uplift. In the first ring, 6,719 m² were let on So Pop in Paris Saint-Ouen, now 89% let and 1,766m² were let on Urban Garden in Issyles-Moulineaux, now 85% let. Positive news on non-core assets too, with the letting of 7,893m² on Xylo in Fontenay. Pre-lettings were signed in Germany (3,009 m² on Icon in Düsseldorf and 8,051 m² signed with on a large part of retail areas in the Alexanderplatz project in Berlin) and Italy (2,817m² on Rozzano in the outskirts of Milan). 

„  117,147 m² (€32.3 million) have been renewed, with a +4% uplift on average. A large part of renewals was achieved in Germany (50,862 m² / 43%), notably 24,990 m² in Hamburg, 9 375m² in Frankfurt and 7,814m² on Icon in Düsseldorf. 34,584 m² (30%) were renewed in France, the major ones in Paris: 8,000 m² on Percier in Paris CBD with +14% uplift and 4,600 m² on Gobelins in Paris 5^th with 19% uplift. Renewals in Italy (31,753 m² / 27%) mostly dealt with a 30,234 m² non-core asset in the periphery of Milan. 

„  44,894 m² (€6.0 million) were vacated, mostly in France (33,873 m²), for redevelopments into office, hotel or residential, and Germany (9,531 m²), mostly relet. 

6. Lease expiries and occupancy rate

6.1. Lease expiries: firm residual lease term of 4.8 years

In 2025, €56.4 million of leases will expire, of which €46.0 million already managed:

•       €20.5 million for which tenant has no intention to vacate the property, 

•       €5.2 million vacating for redevelopment, 

•       €20.3 million refer to Suez departure in CB 21 tower, in La Défense, where take-up in 2024 was 14% above 10-year average. Part of the asset is expected to be relet with limited capex, with already first advanced discussions, and a capex program is being defined to upgrade upper floors. 

Then, €10.4 million are still to be managed in offices, mostly on core assets for which tenant decision is not known yet. 

6.2. Occupancy rate: 95.5% at end December 2024, +100bps vs end-2023

„  In France, the occupancy rate increased by +220bps to 96.3%, compared to 94.1% at end-2023, mostly due to the dynamic letting activity, especially on Maslö in Levallois and So Pop in Paris Saint-Ouen. 

„  In Italy, the occupancy rate level decreased by -130bps to 97.4%, compared to 98.7% at end-2023, mainly due to the delivery of a partially let asset (Rozzano).

„  In Germany, the occupancy rate increased by +140bps to 87.9% vs. end-2023. This is mainly linked to lettings, especially in Munich, while occupancy in Düsseldorf decreased due to a departure in ABC building.

7. Portfolio values

7.1. Change in portfolio values: +0.5% on offices 

7.2. Portfolio value change on a like-for-like basis: -3.1% over the year, -0.5% in H2

¹ LfL : Like-for-Like || ²  Yield excluding assets under development

The -3.1% change in Like-for-Like (-0.5% in H2) value is driven by several effects: 

„  Strong resilience of France (-0.6%) and Italy (-1.1%) assets, especially in city centers with values increase in Paris / Neuilly / Levallois by +1.7%, while some further limited adjustments were needed outside city centers.

„  -15% value decline in Germany, in line with a more muted investment market in 2024.

The average yield increased by +30bps to 5.8%.

8. Assets partially owned

Partially owned assets are the following:

-    CB 21 Tower (75% owned) in La Défense.

-    The Silex 1 and 2 assets in Lyon (50.1% owned and fully consolidated).

-    So Pop project in Paris Saint-Ouen (50.1% owned and fully consolidated).

-    Streambuilding project in Paris 17^th (50% owned and fully consolidated).

-    The Dassault campuses in Vélizy (50.1% owned and fully consolidated).

-    The New Vélizy campus for Thales (50.1% owned and accounted for under the equity method).

-    Euromed Centre in Marseille (50% owned and accounted for under the equity method).

-    Coeur d’Orly in Greater Paris (50% owned and accounted for under the equity method).

B. GERMAN RESIDENTIAL: 29% OF COVIVIO PORTFOLIO 

Covivio operates in the German residential segment through its 61.7% held subsidiary Covivio Immobilien. The figures presented are expressed as 100% and as Covivio Group share.

Covivio owns around ~41,000 units in Berlin, Hamburg, Dresden, Leipzig, and North Rhine-Westphalia, representing €7.2 billion (€4.6 billion Group share) of assets. 

Covivio is mostly exposed to A-cities in Germany, with a 100% exposure to metropolitan areas above 1 million inhabitants and 90% in cities above 500,000 inhabitants. Covivio targets the high-end of the housing market. 

Exposure to Berlin, where housing shortage is the highest in Germany, represents 57% at end-December 2024. Covivio’s portfolio in Berlin is of high quality, with 68% of buildings built before 1950 and over 71% is already divided into condominiums.

1. Continued rise in markets rents and rebounding investment market 

„  In Germany, the demand for housing continued to rise since the start of the year, in a context of increasing number of inhabitants (population in Germany reached a record high level of 85.4 million inhabitants according to Destatis), while building permits (215 000 units over one year at end-November 2024) remained far from the Government target (> 400 000 units / year).  

„  This shortage continues to support rents in Germany and especially in Berlin. According to Immoscout24, in 2024, average asking rents for existing buildings were by +1.8% to €8.57/m²/month in Germany and by +6.4% to €14.1/m²/month in Berlin. For new buildings, rents were up up by +7.8% year-on-year in Germany to €12.6/m²/month and by +3.4% in Berlin to €20.1/m².

„  After several low quarters for the German residential investment market (for multi-family buildings above 30 units), volumes rebounded since Q2 2024, bringing total volumes up by +109% to €10.7 billion in 2024 according to BNP Real Estate. The private market also shows signs of stronger appetite since the beginning of 2024, as shown by private real estate loans recorded by the Bundesbank, up +23% year-on-year to €198 billion in 2024.

„  Average asking prices were also trending upwards in 2024. According to Immoscout24, prices for existing buildings increased by +2% in 2024 in Berlin to €4,643/m², still well above the current valuation of Covivio’s residential portfolio (€3,125/m² in Berlin). The average price/m² for new buildings also increased to €6,575/m² in 2024 (+4.7% over one year). 

In 2024, Covivio's activities were marked by:

„  Continued high rental growth: +4.3% on a like-for-life basis, now well above inflation;  

„  Creation of a joint-venture on a €274 million Berlin portfolio, through a partnership with CDC Investissement Immobilier;  

„  Stability in values: +1.0% on a 12-months like-for-like basis, of which +3.6% in Berlin.

2. Accounted rental income: +4.3% like-for-like  

of which Residential  245.1 158.2 254.1 163.2 +  3.2% +4.1%  86% of which Other commercial ²  41.1 26.9 43.1 27.3 +  1.5% +5.2%  14%

1 LfL: Like-for-Like || 2 Other commercial: Ground-floor retail, car parks, etc

Rental income amounted to €190 million Group share in FY 2024, up +2.9% (+€5.4 million) thanks to:

„  In Berlin, like-for-like rental growth is +4.9% (+€ 4.5 million), driven by the indexation (+2.3 pts) and relettings (+1.9 pts) with high uplift (+36% in FY 2024).

„  Outside Berlin, like-for-like rental growth was strong in all areas (+3.7% on average, +€3.3 million) due to the reletting impact (including modernizations) and the indexation.

„  These effects were partly offset by disposals closed in 2024 (-€1.0 million).

3. Annualized rents: €195.5 million Group share

¹ Other commercial: Ground-floor retail, car parks, etc || 2 North Rhine-Westphalia

Rental income (€9.1/m²/month on average) offers solid growth potential through reversion vs. our achieved reletting rents in all our markets including Berlin (45%), Hamburg (15%-20%), Dresden and Leipzig (10%-15%) and in North Rhine-Westphalia (15%-20%).

4. Indexation 

Rental income from residential property in Germany changes depending on multiple mechanisms.

4.1. Rents for re-leased properties:

In principle, rents may be increased freely, provided the property is not financed through governmental subsidies. 

As an exception to the unrestricted rent setting principle, cities like Berlin, Hamburg, Cologne, Düsseldorf, Dresden and Leipzig have introduced rent caps (Mietpreisbremse) for re-leased properties. In these cities, rents for re-leased properties cannot exceed the public rent reference (Mietspiegel) by more than 10%, except in the following conditions: 

„  If the property has been modernised in the past three years, the rent for the re-let property may exceed the +10% limit by a maximum of 8% of the costs to modernise it.

„  In the event the property is completely modernised (work amounting to more than one-third of new construction costs excl. Maintenance), the rent may be increased freely.

„  If the rent received from the previous tenant is higher than the +10% limit, then the previous rent will be the limit in the case of re-letting.

Properties built after 1 October 2014 are not included in the rent cap.

4.2.  For current leases:

For residential tenants, the rent can generally be adjusted based on the local comparative rent (Mietspiegel), which is usually determined based on the rent index. In addition to this adjustment method, an index-linked or graduated rent agreement can also be concluded. A successive combination of adjustment methods can also be contractually agreed (e.g. graduated rent for the first 5 years of the contract, followed by adjustment to the local comparative rent).

Adjustment to the local comparative rent: The current rent can be increased by 15% to 20% within three years, depending on the region, without exceeding the local comparative rent (Mietspiegel). This type of contract represents c. 90% of our rental income.

4.3.  For current leases with work carried out:

If works have been carried out, rents may be increased by up to 8% of the cost of work excl. maintenance, in addition to the possible increase according to the rent index. This increase is subject to three conditions:

„  The works aim to save energy, increase the utility value, or improve the living conditions in the long run.

„  The rent increase takes effect 3 months after the declaration of rent increase.

„  The rent may not be increased by more than €3/m² for work to modernise the property within a six-year period (€2/m² if the initial rent is below €7/m²).

5. Occupancy rate: a high level of 99.2%

The occupancy rate stands at 99.2% It has remained above 98% since the end of 2015 and reflects the Group's very high-quality portfolio and low rental risk.

6. Portfolio values: €7.2 billion (€4.6 billion Group share)

6.1. Change in portfolio value: +1.0%

In 2024, the portfolio decreased by -1.8% at current scope, to €4.6 billion Group share, mostly driven by the creation of a joint-venture, contributing to €93 million of disposals Group share.

6.2. Maintenance and modernization CAPEX

In full-year 2024, CAPEX totalled €124 million (€44 /m²; €79 million in Group share) and OPEX came to €20 million  (€7 /m²; €13 million in Group share).

On average, modernization projects, which totalled €77 million in FY 2024 (€49 million in Group share), have an immediate yield around 5%, going up to 10% post relettings. 

The bulk of investments in Hamburg relate to 3 settlement areas (22 buildings, 242 apartments, 10% of units in the city) that have undergone energy-efficiency renovations.

                                                                                        North Rhine -Westphalia                                                                    Berlin - €53m (€ 4 1 / m²)       

                             €45 m (€ 41 / m²)                                                                                    € 23 / m² modernization                       

                             € 28  / m² modernization                                                                       € 18 / m² maintenance                         

                             € 1³  / m² maintenance                                                                                                                               

Hamburg - €15 m (€ 101 / m²)

           € 74 / m² modernization€ 26 / m² maintenance                      Dresden & Leipzig - €11m (€ 41 / m²)

€ 18 / m² modernization

                                                                                        € 23 / m² maintenance

6.3. Stable values on a like-for-like basis

1 LfL: Like-for-Like || 2 Other commercial: Ground-floor retail, car parks, etc || 3 NRW: North Rhine-Westphalia

The average value of residential assets is €2,465/m², with €3,263/m² in Berlin (€3,125/m² on pure residential) and €1,796/m² in North Rhine-Westphalia. The average yield increased by +18 bps vs. end of 2023 to 4.3%. Assets are valued at their block value. 50% of the portfolio is already divided into condominiums, particularly in Berlin (71%), where the unit sale value is 49% above the block value.

In 2024, values increased by +1.0% on a like-for-like basis versus end-2023, reflecting a renewed investors’ appetite.

C. HOTELS: 20% OF COVIVIO’S PORTFOLIO 

Covivio Hotels, a 52.5%-owned subsidiary of Covivio as of 31 December 2024 (vs. 43.9% at end-2023), is a listed property investment company (SIIC) and leading hotel real-estate player in Europe. It invests both in hotels under lease (fixed or variable) and in hotel operating companies (owning OpCos and PropCos).

The figures presented are expressed at 100% and in Covivio Group share (GS).

Covivio owns a high-quality hotel portfolio (283 hotels / 39,477 rooms) worth €6.4 billion (€3.1 billion in Group share), focused on major European cities and let to or operated by major hotel operators such as Accor, B&B, Mariott, IHG, NH Hotels, etc. This portfolio offers geographic and tenant diversification (across 12 European countries) as well as several asset management opportunities via different investment methods (hotel lease and hotel operating properties). The reinforcement of Covivio in Covivio Hotels is effective from end-March 2024 in the P&L. 

The asset swap with AccorInvest is effective from 1 December 2024, so the hotels for which Operating companies were bought (and gathered with property companies already owned) generated rents for 11 months and EBITDA for 1 month.

Assets partially owned by Covivio Hotels include mostly: 

•       91 B&B assets in France, including 89 held at 50.2% and 2 held at 31.2%

•       22 AccorInvest assets in France (21 assets) and Belgium (1 asset), between 31.2% and 33.3% owned.

1. Hotels market: continued growth  

European hotels performance was robust again in 2024. The average RevPAR (revenue Per Available Room) in Europe shows an average increase of +4% year-on-year in 2024, as the market continues its positive momentum, supported by the rise average prices but also in occupancy. 

„  Southern European countries are showing very strong performances, particularly Spain up by +13%.

„  Germany is continuing to catch up with a RevPAR growth of +7% over the year. 

„  In France, RevPAR growth is more modest at +2%, impacted by travel delays during the pre-Olympic period. 

„  On the investment side, volumes displayed one of the highest growths for a single asset class in Europe, reaching €19.5 billion 2024, +34% vs. 2023, according to CBRE. France, Spain, and the United Kingdom account for the majority of transactions (63%). 

2. Accounted revenues: +7.2% on a like-for-like basis 

¹ LfL: Like-for-Like                                                                                                                                                             

Hotel revenues increased by +7.2% like-for-like (+€8.4 million Group share) compared to 2023, due to:

„  Lease properties:

•       Variable leases (22.2% of hotels revenue), up +31.2% on a like-for-like basis, mostly linked with the steep increase of variable rents in the south of Europe

•       Fixed leases (53.4% of hotels revenue), up +4.3% like-for-like, mostly through positive indexation.

„  Operating properties (24.7% of hotels revenue): mainly located in Germany and in the north of France. The +4.9% like-for-like increase in EBITDA is mostly explained by improved performances in Germany (+6.7%). 

At current scope, revenue increased by +21.6% to €170 million, mostly linked with the reinforcement in Covivio Hotels (+€18m), on top of like-for-like growth.  

3. Annualized revenue

Breakdown by tenant/operator and by country (based on 2024 revenues), totalling €193.9 million in Group share:

Revenues are split using the following breakdown: fixed (50%), variable (8%) and EBITDA on management contracts (42%).

4. Indexation

Fixed leases are indexed to benchmark indices (ILC and ICC in France and consumer price index for foreign assets).

5. Lease expiries: 11.0 years hotels residual lease term

6. Portfolio values: +21% at current scope

6.1. Change in portfolio values 

(1) The transfer consists of hotel property companies for which operating companies were bought. Both operating and property companies of these hotels are now classified under Hotels – Operating properties

The portfolio changed by +€524.6 million (+21%) vs. 2023 and is attributed to the increased stake in Covivio Hotels (from 43.9% to 52.5%), enhancing Covivio’s exposure to the hotel industry, along with the asset swap finalized with AccorInvest, the acquisition of an hotel in Tenerife and a positive change in value amounting to €35 million.

6.2. Change on a like-for-like basis: +1.5%

At the end of December 2024, Covivio owned a unique hotel portfolio (283 hotels / 39,477 rooms) of €3.1 billion Group share (€6.4 billion at 100%) across Europe. This strategic portfolio is characterised by:

•       High-quality locations: average Booking.com location grade of 8.9/10 and 90% of the portfolio located in major European tourists’ destinations.

•       Diversified portfolio: in terms of geography (12 countries), and segment (32% upscale, 42% midscale and 26% economy.

•       Major hotel operators with long-term leases: 17 hotel operators with an average lease duration of 11.0 years.

The portfolio value increase by +1.5% like-for-like:

•       On a like-for-like basis, the hotel portfolio increased by +1.5% over the year. This variation is mainly explained by the stabilization of capitalization rates and continued revenue growth, driven by the strong performance of variable revenue hotels and the indexation of fixed rents.  

•       Positive changes were thus reflected both for leased assets (+1.4%) and operating properties (+1.7%). Growth particularly dealt with Southern Europe (+4.8% in Italy and +3.4% in Spain), and France (+2.2%), boosted by revenue growth and asset management works.  

•       The hotel portfolio has an average yield excluding duties of 6.4% (+50bps year-on-year).

                Portfolio breakdown by value and geography

90% in major European destinations

3. FINANCIAL INFORMATION AND COMMENTS

Covivio’s activity involves the acquisition or development, ownership, management, and leasing of properties, particularly Offices in France, Italy and Germany, Residential in Germany, and Hotels in Europe. 

Registered in France, Covivio is a public limited company with a Board of Directors.

The German Residential information in the following sections include some Office assets owned by the subsidiary Covivio Immobilien.

CONSOLIDATED ACCOUNTS

3.1. Scope of consolidation 

On 31 December 2024, Covivio’s scope of consolidation includes companies located in France and several European countries. The main equity interests fully consolidated but not wholly owned companies are as follows:

3.2. Accounting principles

The consolidated financial statements have been prepared in accordance with the international accounting standards issued by the IASB (International Accounting Standards Board) and adopted by the European Union on the date of preparation. These standards include the IFRS (International Financial Reporting Standards), as well as their interpretations. The financial statements were approved by the Board of Directors on 19 February 2025. 

3.3. Simplified income statement - Group share

„ €656.2 million net revenue (+5%)

Net revenue in Group share increased especially thanks to both dynamic rental activity and strong operating activity in hotels. This strong organic growth is amplified by the reinforcement of the stake in Covivio Hotels and the acquisition of operating companies from AccorInvest that offset the impact of disposals, mostly in offices. Also refer to 1. Business Analysis

Offices rents: stable revenues, driven by indexation, letting activity and renewals that offsets the disposals of assets.

German Residential: continued rental growth driven by mainly indexation, modernisation works and relocations. 

Hotels in Europe: strong organic growth driven by variable rents increase and increase in ownership in Covivio Hotels and acquisition of operating companies.  

EBITDA from hotel operating activity: increase due to recovery in Germany, strong performance in Nice and the full year offect of the Zoku Paris opened in H1 2023. The growth in hotels is reinforced by the increase in ownership in Covivio Hotels and the acquisition of operating companies.

Income from other activities: Note that this item includes the income of development projects, EBITDA from flex offices and the income of car parks. The activity flex office increases mainly in Milan. In the property development projects, there were the delivery of 4 projects in France and a gradual recovery in Germany. The decrease is mostly due to a lower number of ongoing projects. 

„  €-65.6 million Amort. & net change in provisions and other:

Note that this item includes the amortisation linked to the right of use according to IFRS 16. This amortization of right of use is mainly related to owner-occupied buildings. Following the acquisition of additional operating hotels in November, the impact of amortisation is -€2.9 million. 

„  €-277.3 million Change in the fair value of assets:

The income statement recognises changes in the fair value (-€277.3 million) of assets based on appraisals carried out on the portfolio. This line item does not include the change in fair value of assets recognised at amortised cost under IFRS but is taken into account in the EPRA NAV calculation (hotel operating properties, flex-office assets and other own occupied buildings). For more details on changes in the portfolio by activity, see section 1 of this document. 

„  Income from asset disposals & disposals of securities:

Income from asset and share deals disposals contributed +€3.1 million during the period. 

„  Cost of net financial debt:

The cost of net financial debt decreases due to the reduction in the average net debt and increase in financial income (effects of cash investments following the 2023 year-end bond issuance Covivio and Covivio Hotels in May 2024) minored by the increase 20 bps in the rate. Note that the average rate of the debt increased from 1.50% on December 31, 2023, to 1.71% on December 31, 2024

„  Interest charges linked to finance lease liability:

The Group rents some land under long term leasehold. According to IFRS 16, such rental costs are stated as interest charges. The slight increase refers to the hotel activity linked to the reinforcement in Covivio Hotels and the evolution of the GBP exchange rate.

„  Value adjustment on derivatives:

The fair value of financial instruments (hedging instruments) is impacted by changes in interest rates. The P&L impact is a charge of -€69.2 million. The decrease in interest rates compared to the end of 2023 coupled with the time effect explain the decline in the fair value of hedging instruments.

This year, long-term rates are slightly reduced (10-year swap) by 10 bps after fluctuating between 2.5% and 2.8% during the period. Short-term rates decreased (-120 bps for the 3- month Euribor) following the ECB's rate cuts since the beginning of June.

„  Share of income of equity affiliates 

The equity affiliates include Hotels in Europe and the France / Italy Offices sectors:

•       OPCI Covivio Hotels: three hotel portfolios, B&B (18 hotels), Campanile (19 hotels) and AccorHotels (27 hotels) 80%-owned by Crédit Agricole Assurances.

•       Lenovilla: the New Vélizy campus (47,000 m²), let to Thalès and co-owned with Crédit Agricole Assurances.

•       Euromed in Marseille: one office building (Calypso) and a hotel (Golden Tulip) in partnership with Crédit Agricole Assurances. 

•       Coeur d’Orly in Greater Paris: two buildings in the Orly airport business district in partnership with ADP.

•       Phoenix hotel portfolio: 32% stake held by Covivio Hotels (52.5% subsidiary of Covivio) in a portfolio of 22 AccorInvest hotels in France & Belgium and 2 B&B in France.

•       Fondo Porta di Romana in Milan is a joint venture between Covivio (43.80%), Coima and Prada to participate to the acquisition of a plot of land in South Milan (future Olympic game village).

•       Zabarella in Padua is a joint venture between Covivio (64.74%) and Carron Group (35.26%) to participate to the project in development Pauda Zabarella (transformation office to residential).

„  Taxes

Taxes include differed taxes for +€15 million and corporate income tax for -€22.2 million.

Adjusted EPRA Earnings at €477.4 million