{"id":57998,"date":"2024-08-01T12:22:01","date_gmt":"2024-08-01T10:22:01","guid":{"rendered":"https:\/\/www.gruppoigd.it\/?p=57998"},"modified":"2024-08-01T12:27:03","modified_gmt":"2024-08-01T10:27:03","slug":"results-first-half-2024","status":"publish","type":"post","link":"https:\/\/www.gruppoigd.it\/en\/results-first-half-2024\/","title":{"rendered":"Results first half 2024"},"content":{"rendered":"

NET RENTAL INCOME <\/strong>GROWS ON A <\/strong>LIKE-FOR-LIKE <\/strong>BASIS<\/strong><\/p>\n

Net Rental Income: \u20ac59 million; +4.5% like-for-like<\/strong><\/p>\n

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GOOD RESULTS FROM THE \u2018SERVICES FOR THIRD PARTIES\u2019 BUSINESS UNIT <\/strong><\/p>\n

Two medium-sized stores in Clodi Shopping Center remarketed for Prelios (Food Fund)<\/strong><\/p>\n

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VALUATIONS LARGELY STABLE <\/strong><\/p>\n

Market Value \u00a0of \u00a0Freehold Assets: \u20ac1,697.2 mn; -0.5% versus 31 December 2023 like-for-like <\/strong><\/p>\n

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FINANCIAL STRUCTURE CONSOLIDATED <\/strong><\/p>\n

Loan-to-value down to 44.9% (from 48.1% at year-end 2023)<\/strong><\/p>\n

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2024 FFO GUIDANCE CONFIRMED<\/strong><\/p>\n

FFO expected to reach approximately \u20ac34 million<\/strong><\/p>\n

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Bologna, 1 August 2024.<\/strong> Today, in a meeting chaired by Antonio Rizzi, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.<\/strong> (\u201cIGD<\/strong>\u201d or the \u201cCompany<\/strong>\u201d) examined and approved the consolidated half-year financial report at 30 June 2024.<\/p>\n

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Message from the Chief Executive Officer, Roberto Zoia <\/strong><\/p>\n

We welcome the results achieved in the first six months of 2024. Firstly, net the one-off write-down of the Food Fund stake, the fair value of IGD\u2019s portfolio finally came in largely stable.\u00a0 The slight decline recorded is mainly related to lower inflation growth than estimated in December 2023.\u00a0 More in detail, the valuations of Officine Storiche, our redevelopment project in Livorno, were positive, supported by both the latest and future openings, like Primark which will open on September 3rd<\/sup>.\u00a0 In the second quarter, we also recorded an increase in rents for both renewals and new lets, which offset the downside posted in the last three months of the year.\u00a0 The results we present today form the basis we will use to define the 2025-2027 Business Plan whose guidelines we have already provided and that will be disclosed in full by year end. <\/em><\/p>\n

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OPERATING PERFORMANCE – ITALY<\/u><\/strong><\/p>\n

In the first half of 2024, footfalls in malls were 0.4% higher than in H1 2023, while tenant sales fell slightly\u00a0 by 0.5% as a result, specifically, of the general\u00a0 trend \u00a0witnessed in the last couple of months and the negative performance of Electronics following the strong increases recorded as of 2019.<\/p>\n

Looking at sales by product category, Electronics recorded the biggest drop (-9.6%) vs the same period last year, while Personal Care and Wellbeing recorded the strongest growth (+10.3% vs 2023); a positive trend was also recorded in Clothing, Restaurants and Services.<\/p>\n

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LEASING ACTIVITIES<\/em><\/strong><\/p>\n

During the first half of the year, IGD continued its marketing activities achieving effective results: mall occupancy at June 30th<\/sup> stood at 94.38%<\/strong>, an increase of 22bps vs March 31st<\/sup>; average occupancy at malls + hypermarkets <\/strong>also rose by 20 bps to 94.96%<\/strong>. The ability of IGD\u2019s shopping centers to attract international anchor tenants<\/em> was also confirmed: in February, Rituals opened a boutique at Puntadiferro, while the first Sinsay store in an Italian IGD center was opened on July 28th<\/sup> at Officine Storiche where, in September, Primark will also inaugurate a 2,400 square meter medium-sized store. In the same month, the newly renovated Notorious Cinemas multiplex will open its doors at the Nuova Darsena Shopping Center in Ferrara.<\/p>\n

The 103 contracts signed during the first half-year (51 renewals and 52 turnover) led to an overall downside of -0.6%. However, after a first quarter in which the downside reached -3.5%, upside on the leases signed in the second quarter reached +3.6%. \u00a0The leases signed account for 4.3% of the Group\u2019s rental income.\u00a0 Between the first and second quarters of 2024 the WALB or Weighted Average Lease Break was also extended going from 1.78 to 1.82 years for malls and from 11.77 to 12.22 years for hypermarkets.<\/p>\n

Positive results were also achieved in total collections,<\/strong> which stood at 95% <\/strong>at 31 July 2024.<\/p>\n

\u00a0<\/strong><\/p>\n

DIGITAL ACTIVITIES<\/em><\/strong><\/p>\n

Digital initiatives continued in the half with the launch of the first IGD App for shoppers and tenants in 7 shopping centers. This is an important customer engagement and loyalty tool which can be used by shoppers to, among other things, participate in prize winning competitions or other ad hoc initiatives while, at the same time, providing tenants with the opportunity to reach a select audience through customized offers available only to registered users.<\/p>\n

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SERVICES FOR THIRD PARTIES<\/em><\/strong><\/p>\n

The first positive results were also reported for the business unit \u2018Services for Third Parties\u2019: in addition to property and facility management activities \u2013 highly valued by clients – \u00a0in the second quarter, two medium-sized stores were successfully re-let at the Clod\u00ec Retail Park in Chioggia, i.e. one of the assets sold in April and transferred to Food Fund which is still managed by IGD.<\/p>\n

The client will pay a commission for this activity, in addition to the fixed compensation established in the contract.<\/p>\n

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OPERATING PERFORMANCES ROMANIA<\/u><\/strong><\/p>\n

Consistent with what was described above for Italy, the Winmarkt shopping malls also recorded a good operating performance: at 30 June 2024 occupancy landed at 95.52%,<\/strong> basically unchanged with respect to the high levels recorded at 31 March 2024; in the first half, 177 leases were signed between renewals (114) and turnover (63), with a net upside on renewals of around<\/strong> +4.94%.<\/strong>, thus confirming Romania\u2019s retail sector vitality.\u00a0 The soundness of our tenant portfolio is also confirmed by a rent collection rate at around 96% in the first six months of 2024.<\/p>\n

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ASSET MANAGEMENT <\/u><\/strong><\/p>\n

In the first half of 2024 IGD\u2019s investments and capex were approximately \u20ac7 million.<\/strong><\/p>\n

The fit-out<\/strong> work <\/strong>at Officine Storiche in Livorno continued in preparation for the opening of the Sinsay and Primark stores, as did the restyling of Centro Leonardo in Imola<\/strong>.<\/p>\n

The assets\u2019 decarbonization path continued with the installation of a new solar energy system<\/strong> on the roof of the parking lot at La Favorita Shopping Center in Mantua<\/strong>, which will be operational as of September 2024. Energy efficiency work was also completed at the ESP and Maioliche<\/strong> Shopping Centers where the gas boilers were substituted with highly efficient components.<\/p>\n

As to the Porta a Mare Project in Livorno, the sale of another residential unit at Officine Storiche – closed in July \u2013 will be \u00a0added to the 30 apartments already sold; 4 more sales are expected to close in the coming months, leaving only 7 out of a total 42 residential units to be sold.<\/p>\n

The reporting period\u2019s main event was the divestment transaction completed by IGD on 23<\/strong> April 2024 <\/strong>with Sixth Street and Starwood Capital. The disposal involved a real estate portfolio including 8 hypermarkets, 3 supermarkets and 2 shopping malls for a total of \u20ac258 million. The transaction was carried out by contributing the entire real estate portfolio \u2018Food Fund\u2019 – a closed-end real estate investment fund (an Italian REIF), of which IGD maintained 40% ownership, while the remaining 60% was sold to a Luxembourg vehicle (50% Sixth Street and 50% Starwood Capital) for \u20ac155 million<\/strong>.[1]<\/a><\/p>\n

The positive outcomes seen in Italy and Romania are the first operating results achieved as a result of IGD\u2019s renewed strategy which, among other things, aims to fully exploit the potential of the Group\u2019s shopping centers and to provide tenants\u00a0 with a true \u2018IGD Shopping Center Ecosystem\u2019, making not only sales areas available to tenants, but also providing high value-added property services, digital and communication tools, partnerships and collaborative marketing initiatives, all with a long-term and ESG-compliant vision.<\/p>\n

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PORTFOLIO: VALUATIONS STABILIZED<\/u><\/strong><\/p>\n

The market value of Gruppo IGD\u2019s freehold real estate portfolio<\/strong> reached \u20ac1,697.2 million, down -0.5% like-for-like <\/strong>compared to December 2023. After two years characterized by strong writedowns, valuations have largely stabilized<\/strong>; the slight drop recorded is explained, above all, by an increase in inflation which was below the December 2023 estimates.<\/p>\n

More in detail, the main asset classes comprising the Group\u2019s real estate portfolio recorded the following changes:<\/p>\n