European real estate company Covivio signed 101,000 m2 of new office leases in H1 2022, a new half-year record, in addition to 90,000 m2 of renewed leases.
Over 70,000 m2 lettings were for properties under development, for firm term 11 years on average, increasing the pre-let ratio of the development pipeline by 14% to 61%.
Covivio is developing a third building in Vélizy-Meudon, for Thalès by 2026, totalling 38,000 m2 with a 12-year lease, in addition to renewing leases for two buildings in operation until 2034 and 2037, respectively and €11.5 mln in yearly rent.
In LevalloisPerret, Covivio signed a first rental commitment for 2,030 m2 on the Maslö building under development.
In Paris, two major groups in the luxury goods and digital industries have chosen Covivio to set up their teams in the Anjou (9,300 m2) and Streambuilding (9,160 m2) office buildings.
In central Milan, the 11,600 m2 Corso Italia development project has been entirely pre-let to a leading Italian company, for a significantly higher rent level than initially expected.
The pre-lettings during H1 improved the occupancy rate of the operating portfolio, which stood at 94.3% at end-June.
Christophe Kullmann, Covivio CEO commented: ‘Covivio posted strong growth of financial results and confirmed its 2022 outlook. Despite an uncertain economic and financial environment, the rental dynamic of our markets, the relevance of our strategy focused on centrality, prime assets and customer culture, and the solidity of our governance, are long-term foundations to continue to generate value upon.’
In the German residential market, where rental income is up 3% LFL, the group is developing €176 mln in projects to be delivered by 2025.
The €76 mln build-to-let portfolio recorded significant pre-lettings and rent levels above initial budgets, while the €99 mln build-to-sell portfolio should generate average margins of 35%.
Hotel revenues were up 100% LFL to €53.4 mln, boosted by a stronger than expected recovery and asset management work.
New lease agreements were signed with IHG in the UK for €7.2 mln in rent and with B&B Hotels for the 12-year lease of 30 hotels in France, operated under Accor Group brands.
Covivio disposes of a €26.6 bn portfolio (€17.8 bn Group share) in Europe, comprising 55% of offices in France, Italy and Germany; 30% of residential assets in Germany; and 15% of hotels in major European tourist destinations.
