SFL ups first-half profit and rental income

Societe Fonciere Lyonnaise (SFL) saw rental income rise 5.9% to EUR 83.3 mln in the first half of 2007 compared with the year-earlier period, the French company reported on Tuesday. Operating profit before fair value adjstments increased by 8.7% to EUR 72.3 mln from EUR 66.5 mln in the first half of 2006.

Cashflow attributable to shareholders amounted to EUR 48.2 mln, up 28.1% from EUR 37.6 mln in the first six months of 2006. The occupancy rate at end-June was 97.7%. SFL said it expects its EUR 198.7 mln acquisition in March of the remaining 50% stake in SCI Paul Cezanne to bring in around EUR 8 mln in extra rental income per year.

SFL, a subsidiary of Spain's Inmocaral, said it would continue to focus on office properties in the prime business districts of Paris. Parent company Inmocaral said earlier this year that it is in talks with two potential merger partners for SFL. In an interview with Spanish daily La Gaceta, Inmocaral's ceo Luis Portillo said he was considering the possibility of expanding its French business prior to selling a 15% to 20% stake in SFL.

SFL is a SIIC, the French equivalent to a real estate investment trust (REIT). Inmocaral currently owns almost 90% of SFL, but has to sell part of its stake to abide by new French regulations that ban the core shareholder of any SIIC from controlling more that 60% of the shares.