Fonciere Des Regions Reports Profit as Values Gain

Fonciere des Regions SA, the French office landlord with stakes in five other real estate investment trusts, reported a first-half profit after the value of its properties gained.

Net income totaled 100.7 million euros ($131 million), compared with a loss of 325.6 million euros a year earlier, the Metz-based company today said in a statement.

The value of properties owned by FDR, mostly offices in France and Italy, increased by 1.7 percent to 8.6 billion euros in the period. The company raised 331.2 million euros selling buildings to cut debt to 53.4 percent of the value of its real estate. It forecast a further decline to 50 percent in the coming months.

Profit excluding changes in the value of properties and interest-rate derivatives rose 1.1 percent to 153.4 million euros, as the company lifted rental income for the buildings it owned throughout the period.

FDR (FDR) reiterated a forecast that “recurring profit” will rise this year, without being more specific.

Net asset value fell 7.6 percent to 73.2 euros a share as the company paid dividends in shares, allowing it to keep cash to reduce debt and pay for its pipeline of development projects.

FDR declined 3.7 percent in the past three months in Paris trading, compared with a 3.1 percent gain for the French REITs index compiled by Amsterdam-based Global Property Research. That gives the company a market value of 3.9 billion euros.

FDR controls real estate in France, Italy and Germany through its holdings in other real estate investment trusts.

The company’s assets include Beni Stabili (BNS); Fonciere des Murs SA, a REIT specialized in sale and leasebacks; warehouse owner Fonciere Europe Logistique SCA; and Fonciere Developpement Logements SA (FDLT), a residential investment trust. FDR also has a 15 percent holding in Altarea SA (ALTA), France’s biggest retail-park developer, and controls parking lot owner Parcs GFR.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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