FdR predicts 'slight' increase in profits for 2012

French office landlord Fonciere des Regions (FdR) posted higher-than-expected earnings of EUR 5.23 a share in 2011, partially attributable to a tax reduction in its Italian real estate arm and lower borrowing costs.

Full-year earnings before items, known as recurring net income, rose 3.7% to EUR 288 mln, or EUR 5.23 a share in 2011, versus EUR 278 mln, or EUR 5.33 a share a year earlier. The company is predicting a 'slight' increase in net recurring income for 2012.

'We have exceeded our 2011 objectives,' CEO Christophe Kullmann said. In 2012, the company will continue its strategy of refocusing on offices and key clients, while targeting growth in its results and continuing to control its debt level, he added.

The company's EUR 9 bn real estate portfolio posted a 1.3% like-for-like growth last year with occupancy rising slightly to 95.8%. In 2011, the company carried out EUR 611 mln of disposals, exceeding its full-year target of EUR 500 mln.

Divestments helped reduce the group's loan to value ratio below the 50% threshold, to 49.3%. Metz-based FdR is targeting a 45% LTV by year-end. The cost of debt fell sharply to 4.2% from 4.39% in 2010, helped by the placement of a EUR 1.1 bn convertible bond at a coupon of 3.34%.

The company's development pipeline represents a total investment of EUR 1 bn, EUR 272 mln of which is already committed and 80% pre-let.

The company said it will pay a dividend of EUR 4.2 a share, which investors may receive in stock.