Nexity's revenue falls 7% in Q1 2009

French property giant Nexity saw its revenue fall by 7% to EUR 566 mln in the first quarter of 2009 compared with the year-earlier period. The revenue decline (22%) for the Residential division was driven by the lower level of reservations in 2008. Revenue for the Commercial division was twice that of the first quarter of 2008 (EUR 124 mln), due to progress made on major construction projects.

The group recorded a total of 2,980 reservations for new homes and subdivisions in the first quarter, an increase of 8%. In the Commercial property division, the market was at a virtual standstill, resulting in an absence of new orders for the group in the first quarter, following a record year in 2008 (order intake of EUR 579 mln).

Alain Dinin, Chairman and CEO of Nexity, said : 'The commercial investment market in France had a lacklustre first quarter: lower take-up, downward oriented valuations, and downward pressure on rents explain the wait-and-see attitude on the part of investors and make it difficult to predict at what point a clear recovery will be seen in this market. In this contrasting and changing environment, our balanced business model, the recurring revenue provided by our services activities, the high visibility offered by our order backlog, and our sound financial position mean that we can look forward to the future with determination and serenity.'

French commercial property investment amounted to only EUR 670 mln in Q1 2009 - the worst quarterly performance in the last 10 years, according to recent figures from consultant CBRE. No transaction in excess of EUR 80 mln was concluded, and more than 80% of investments were under EUR 15 mln. There was a massive exodus of international investors from the French market during the period, with French investors representing 78% of the total investment. Prime yields continued to rise, ranging from 6.25% to 6.50% for Paris CBD.