French banking group BNP Paribas reported pre-tax earnings of €155 million on its real estate business which drew in revenues of €704 million last year, a positive outcome for 2016 said Thierry Laroue-Pont, CEO of BNP Paribas Real Estate.
“For BNP Paribas Real Estate, 2016 was a year of earnings growth, with € 704m revenues and € 155m net profit before tax. Despite the difficult geopolitical environment in 2016, real estate markets have generally held up well. All our business lines are progressing as a whole. In 2017 we are to start implementing our 2020 development plan that structures and crystallises our ambitions for each of our business lines and uses digital to develop new service offers. With respect to our central functions, early-2017 has seen the creation of two new departments: an Innovation department and a Data department. Lastly, our commitment to CSR, which has become increasingly important in our clients’ investment choices, also features among our priorities for 2017 and the coming years,” he said.
More than 40% of that revenue came from outside of France, predominantly Germany, the UK and Italy, with 72% coming from real estate services, such as transactions, consulting, valuation, etc., and the rest from commercial and residential real estate development.
The group has €24.1 billion worth of assets under management in Europe, up €2.1 billion on 2015, of which almost three-quarters are managed on behalf of institutional investors. This business line saw inflows of €1.6 billion in new cash funds in 2016, and revenues of €98 million. A record-high transaction volume of about €3.9 billion was recorded.
Meanwhile, property management revenues came to €94 million in 2016 on the back of of 38 million m² under management in 58 cities across 14 different countries, an increase of 4.5%. 56% of that space is offices and 26% logistics.
Advisory activities generated revenues of €314 million, of which 3,850 commercial property transactions covered 6.2 million m² of commercial property leased or sold in Europe, 1.9 million m² of which was in France.
A greater proportion of the valuation business was located in France, where 46% of revenues were generated, followed by the UK, which brought in 24% of valuation revenues. The value of assets in twelve countries overall totalled €289 billion, representing about 130 million m².
Office property development accounted for a business volume of €692 million, with 154,000 m² of completions. Among the major schemes completed in 2016 were Tiburtina in Rome, 43,800 m², Luxembourg Kirchberg for 50,000 m², and Unicity, in Levallois-Perret, for 36,000 m². As of January 1, 2017, 178,500 m² of offices were under construction in Europe.
In 2016, residential development generated a business volume of more than €1 billion including €699 million on its own account, representing growth of 28% against 2015, and 1,847 housing units delivered, an increase of 44.5% on 2015. Another 1,593 housing units were initiated. 6,734 units in serviced residences are under management across 50 student residences and 5 Hi-park residences for business travellers
Mr Laroue-Pont said he expects to see the growth demonstrated to continue growing.
“Our 2017 ambitions for our business lines are clear. We notably expect growth in Investment Management, mainly due to a robust level of activity in France and Germany, as well as the forthcoming launch of the NEIF 3 fund. Recent pan-European mandates for Property Management, such as that signed with Logicor for over 1 million m², should contribute to the growth that we expect for this business line. We also have major ambitions for our Advisory businesses for which we expect to at least match 2016 revenue. In Office Property Development, we plan to launch 10 or so schemes in France and Continental Europe. Our development strategy on this business line is based partly on researching substantial mixed schemes involving commercial/residential/hotel real estate in Ile-de-France and the regions and partly on our expansion in Europe. Lastly, we plan to start 2,300 homes in Residential,” he said.