Good morning, everybody. Thanks for attending this call of the result of Covivio 2020. I'm here today with Tugdual Millet, our CFO, and also with Dominique Ozanne and Olivier Estève, our Deputy Chief Executive Officers. Let's start at page four. 2020 was a year of great achievement in the context of crisis. The first one is a reinforcement of our exposure in Germany. Today, Germany represents 37% of the total portfolio of Covivio, and in the year, the total portfolio increased by EUR 1.4 billion in group share to EUR 17.1 billion and EUR 25.7 billion in total. One of the big achievements of 2020 is the success of our disposal plan. We achieve at the end, roughly EUR 900 million of disposal, strongly above the target of more than EUR 600 million. That we communicate in the market one year ago, before the crisis.
What is also interesting to notice is the level of the margins that we were able to attract on this disposal to more than 8% compared to the appraisal value for the end of 2019. 80% of the disposal plan was done on mature office building. To say just one example or two example of what we have been able to achieve at the end of last year. We achieved two disposal of two mature office asset, one in Issy-les-Moulineaux, close to Paris. It's the headquarter of Transdev today, and another one in Marseille in the Euroméditerranée Center Complex. These two transaction is really the result of the strategy of Covivio. It was two in-house development that was fully let at delivery, and that we will deliver between 2015 and 2017.
At the end, we are able to achieve 73% value creation since delivery on these two asset that was disposed by year-end above appraisal value. At the end, when I'm looking to the result of Covivio, Tugdual will comment all these figures more later on. We have published this once in July. EPRA NAV is slightly above guidance that we give at EUR 285 million. LTV is doing slightly down at 40.9%, despite the acquisition of the hotel portfolio that was achieved last September. The EPRA NTA increased by roughly 2% compared the level that we reach at the end of June. The same time, we also continue to make progress in our ESG strategy in the main three aspect of this strategy, and that was award by the best rating agencies. Moving to the portfolio, and first to the office one. I'm now page 11.
We have clearly a new environment in the office portfolio with the polarization of the take-up with first a conjuncture and crisis, which is the economic crisis, which is there, and also the structural impact on the working from home adoption for most of the corporate now. What we consider is that this situation will increase competition, and that will benefit with the best asset in connected location. What is the Covivio roadmap to outperform in this new environment? First, is to concentrate new our development now in central location. Second, is to accelerate deployment to service to client. Third point is to transform and to accelerate transformation of obsolete office into residential. Four, is to continue to sell mature assets. First, reinforcing our portfolio in prime location.
When I'm looking to the evolution of our portfolio during the last years, we completely transformed the portfolio of Covivio in the office sector. Now, 63% of our office portfolio is located in top European cities, and 20% in top business district in the Greater Paris best districts and in the top five French cities. We keep 9% of our office portfolio, which are in non-core location, mostly in Italy with the Telecom Italia portfolio, but with a very long role. The pipeline. We want to continue to work on the pipeline, but we have decided to adapt it in this new environment. First, we will this year commit 5 new projects, but only in the CBD of Paris, Milan, and Berlin. Second, we will continue to follow the needs of the client.
That's the example of the extension of the headquarter of Dassault Systèmes in Vélizy that will be launched this year. Third, we will push on conversion from office to residential. The new development project that will be committed this year, who are them? First, in Italy, we will totally redevelop Corso Italia asset, which is an asset that in our portfolio, that will be launched this year. It's 11,000 sq m asset. We'll also launch the large Alexanderplatz project in Berlin, in the heart of Berlin. On this project, we will share this project with two long-term partners of Covivio that we own 45% of this project and the development, the asset management, and the property management in the future for this building will be done by Covivio team.
In Paris, three very interesting locations will be vacated, asset will be vacated by Orange and will be redeveloped in fully, completely new buildings. Two in the 8th arrondissement, in the heart of the CBD, and the third one is also in the heart of the CBD close to Monceau Park. At the end of 2021, our development pipeline will be at EUR 1.7 billion, mainly in the city center of main cities, and with a target million cost of roughly close to 5%, that will allow us to have a strong target value creation above 30%. Another big aspect of our strategy is to continue to work to transform obsolete office into residential. Today, we identify 150,000 sq m of future flats that could be developed by Covivio. The first committed project will be delivered this year and next year. They are today fully sold.
I have to say, one example of the strategy of Covivio in this area is what we are currently doing in Bordeaux. In the north of Bordeaux, we bought, through the sale and leaseback we made in 2004 with IBM, an office building that was let to IBM until 2018. During this period, the area changed, and it was more and more a residential area. That's why we're working with the municipality before the end of the lease with IBM to obtain a new planning permission to develop residential in this area. Now, we have the capacity to develop 46,000 sq m in this area, and we just obtained, at the beginning of this year, the first building permit for the first phase for 15,000 sq m. Back, page 21. Owning the best asset in the best location is not enough now in the office sector.
You need also to put and to have the right service to the client. That's what we have done in Covivio. Since 2017, we have developed our own flex office offer with Wellio, which is now a success, with five Wellio opening in France and one in Italy. During the last year, we also increased services to the client to more flexibility, and we are now also doing advisory. That's the example of what we'll be able to deliver in the fifth arrondissement of Paris with Paris Gobelins, which is an asset that will be delivered this year to the fully pre-let with a dedicated operation with a specific tenant. That's what we call now the capacity to have all-in-one concept. That's the idea also to offer for some asset from the full flex office offer to a normal lease contract.
What are the operational results of offices in 2020 for us in our different country? At the end, positive figures in a not so easy environment. When I'm looking to Italy, which are slightly down in term of figures, just these figures are only linked to the retail part of our portfolio in Italy. When I'm just looking to the office sector, the office sector performed very well also in Italy. Now moving to the RESI portfolio. Situation is, I have to say, continue to be very strong. Fundamental are very good. Population growth in attractive cities, and the offer is going down. When you are looking to the pricing for flats increased a lot last year, also in Berlin, despite the Mietendeckel regulation. When I'm looking to the exposure in the German RESI sector, it's increasing a lot during the last years.
In 2012, it was 9% of our portfolio, EUR 700 million of asset. Today, it's EUR 4.3 billion of asset that we own, and it represents 25% of the part of our portfolio. We want to continue to increase in the future this exposure. What we have done in 2020 in this sector in Germany, we continue to invest in new buildings. We acquire for EUR 120 million asset at a decent 3.7% yield on the passing ones. It was asset in Berlin, but also in the North Rhine-Westphalia area. At the same time, we continue to accelerate on development pipeline with the first deliveries, but also with new committed project. On those projects, the target margin is above 40%.
Also, in term of ESG, we continue to work in this sector, and we obtain, and we are happy to obtain, the Fairest Landlord Award for the Focus Money Survey that was delivered just a few weeks ago. In term of performance, I have to say the figures, page 230 has enough, don't need a lot of comment. The growth on the rental growth continue also in Berlin, despite the first step of the regulation that was put in place last year. In term of value creation, +8.2% was really strong also last year, and the occupancy remained very solid at 99%. Now moving to the hotel sector. The hotel sector faced last year a very challenged year with a incredible reducing RevPAR for 67% in Europe. I have to say, in these bad figures, France and Germany have little better figures. For us, what are the impact?
Strong decreases like-for-like review, despite the fact that on the fixed lease, we are able to reach with 95% of our client agreement with a very limited impact on the like-for-like. On the other part of the portfolio, really, the fact that the RevPAR was going down had a strong impact on the reviews. What is for the future of this activity? We continue to consider hotel activity as a good activity in the long term. The question is when the recovery will start. What we know is that what are the main driver for recovery is domestic client, where that will be first, for leisure also, or for individual travel. When we are looking to Covivio portfolio, we are really well-positioned in these three area for all of portfolio.
That I to say for the main point I want to stress. Now I let the floor to Tugdual to comment the financial result.
Thanks, Christophe, and good morning everyone. I would like to start the comments on those financial results by giving a bit more color on the letting activity on offices for 2020. First, we've experienced an important drop in the take-up in our different markets. Despite that, we've been able to sign new contract for more than 72,000 sq m in France, Germany, and Italy. We have renewed 180,000 sq m with a 1% uplift versus prior rent. If we go more into detail, countries by countries, first in France, we can see that the most important part of the new letting has been concentrated on new or restructured buildings in Paris, Châtillon, and Bordeaux specifically, which gives evidence that our clients are focusing more and more on a new and efficient offer.
Second, in Italy, the letting activity has been concentrated on Milan and Turin, and specifically on Milan, we have achieved 8% uplift on the reletting, which is a good evidence of the good health of the Milan market. Last, in Germany, we've been active on the top 5 German cities. We have seen an increase in the occupancy rate starting in Q4, following leases that we've signed in Berlin and Munich. Page 37 provide interesting detail on the work that we achieved with Orange in 2020. As you know, Orange is our first client. We have worked with them for the last 20 years trying to adapt our offer and to offer them tailor-made solution. This is what we've done in 2020, first by securing new leases on 20 buildings in mid-size cities around France.
This enables us to sell just after those assets with a significant premium versus book value. The second thing is flexibility that we are offering to Orange together with reaching significant uplift on the rent. With the solution that we provide to them, we unlock significant reversion potential on Paris Porte Maillot, +90% on the rent in exchange for flexibility on early departure in an asset that they lease in Levallois. Finally, in this year, in 2021, we will develop for them, and we will deliver a turnkey development project in Montpellier with a 6.7% yield on cost. All those good news and achievement obviously are positively participating to the overall good performance of our French office portfolio. Moving to our detailed revenue, page 38. First, on office and RESI revenue, we have seen a slight growth from EUR 535 million to EUR 541 million.
The EUR 40 million decrease in France and Italian office has been more than offset by the strong increase in German offices revenue, and the German RESI portfolio continued to regularly increase year after year. The overall decrease is mostly concentrated on hotels and also on non-strategic part where we continue to regularly dispose assets. On a like-for-like basis, office and RESI again are posting a decent +1% increase in 2020, and Italian office being affected mostly by the high street retail part of the Milan portfolio. Hotel were mostly affected by the variable part of the revenue and the U.K. On occupancy rate, which stands at 94.8% overall, the decrease in office is mostly explained by France and Germany, because on the Italian side, the Milan portfolio is resisting quite well.
If we go even more into detail, for France office, the decrease mostly explained by the delivery of two assets that are currently let below 50%. In Germany, the occupancy rate is penalized by the cancellation of the lease of WeWork that we realize during first half. Finally, a word on collection rate for the full year 2020 stands at 97%. It gives evidence of the solidity of our tenant base. Page 39, a few words on 2021 and our main challenges for offices. First, on the existing vacancy, you can see that the existing vacancy on offices is concentrated on six assets. Six assets that account for two-thirds of the existing vacancy, four in France and two in Germany.
What we can say is that all those assets have benefited from a recent CapEx program and are well-positioned in some business districts, which makes them attractive as an offer. The only asset where, I would say, the sub-market vacancy is above 10%, is the one that we have in La Défense. On the lease expiry for 2021. It's a bit less than 10% of our total Covivio revenue. 40% of this lease expiry will fill the development pipeline for 2021, as it has been largely described by Christophe. On 25%, we know that the break option will not be exercised, so the tenant will stay. We are focusing our efforts on the remaining 35% of those lease expiry, where discussion can move from either a departure or renegotiation of the existing lease.
On EPRA earnings, page 40, the evolution illustrates the trends that we have commented so far, which means strong office and RESI activity with a shift of revenue from France and Italian office to German office and a continuous performance on German RESI. The impact, again, is concentrated on hotels for this year. Finally, some positive news also coming from the improved cost of debt. EPRA earnings amount to EUR 385 million. It is a decrease of 15% versus last year and 21% on a EUR per share, taking into account the scrip dividend. Moving to the portfolio, page 41. Portfolio like-for-like value increase amount to 1.3%, which demonstrates the good positioning of our asset and also it is a good reward of our investment choices.
Starting with offices, +0.8%, the performance is driven by our development pipeline, which is boosting the performance together with the good dynamic of what we experience in the Paris and Milan market. A small part of the portfolio is suffering from negative outlook in terms of rental dynamic, and particularly outside Milan and in La Défense and La Défense market. German RESI is among the important winner of this crisis, thanks to two unique characteristic, resiliency and rental growth prospect that are untouched. On hotel valuation, the evolution shows two messages. The first one is that the appraiser consider that the long-term fundamental of this asset class is not challenged.
The second one is that they factor in also a longer recovery phase and the cost of carry of this recovery phase that can start from 2 to 4 years, explain the most important part of the adjustment of the values. Our balance sheet, page 42, continue to offer solid characteristic with an LTV that stands at 40.9%. We continue to lower our cost of debt down to 1.29%, and we have very limited debt coming to maturity in the next three years. On our NAV, we have changed following the evolution of the EPRA guidelines. Now we communicate on EPRA NTA, which is very close to EPRA NAV. Our EPRA NTA has increased by 4% to EUR 9.5 billion this year, following the value increase and also the scrip dividend.
Per share, our NTA amount to EUR 100, an increase by 2% over the second half of the year. On dividends, following the evolution of the EPRA earnings in 2020, we will propose to the general assembly a dividend of EUR 3.6 per share, which represent 86% payout on the EPRA earnings.
Just one word on the outlook and guidance on our three sectors and the results. In the office sector, we want to pursue the strategy on active asset rotation and client-oriented strategy. Just to remind, we have today, and to recall, is EUR 500 million of future value creation that need to be captured on the project that will be committed by the end of this year. We will also, in the RESI national, German RESI, continue to work and to invest in this area. On the hotels, the question is when the recovery will take place. We really consider that the long-term fundamentals of this sector, this activity are unchanged, and we want to stay in this activity in the future.
On the EPRA on this guidance, due to the pace of the hotel recovery, which is uncertain, this year we gave a bracket between EUR 380 million-EUR 395 million. In term of amount of disposal for 2021, we keep the same target that we have last year, that need to dispose more than EUR 600 million of asset, mostly, I have to say, on the mature office sector as we have done in 2020. Now, with Tugdual, Dominique, and Olivier, we are available to answer your questions.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, press star one to ask a question. We will pause for just a moment to allow everyone an opportunity to signal for a question. We will now take our first question from Florent Laroche-Joubert from ODDO BHF. Please go ahead. The line is open.
Yes. Thank you very much for this presentation, and congratulations for your very strong performance. I would have maybe three questions. My first question would be on your guidance for 2021. What we can see is that your guidance not in 2021, not totally different from your performance in 2020. Maybe could you please give us some more color on how you have based this guidance, in particular for the hotel recovery? This would be my first question. Maybe second question, would it be possible to have an update on the pre-letting process of assets that are not fully let on your pipeline? Maybe the third question would be on the valuation of offices in less attractive locations. How do you think that the new appraisal value can be resilient in 2021? For example, in La Défense. Thank you.
Okay, Florent. Could you answer on the guidance, I will take the two other.
On the first question about the guidance, as it has been mentioned, the difficult part was to factor in the evolution of the recovery of the hotel. The lower end of the guidance is taking into consideration the fact that 2021 could be comparable to 2020 in terms of revenue. On top of that, what you need to take into account also is the fact that the most important part of the disposal program that has been achieved in 2020 has been done at the end of the year or is, let's say, done during first quarter. That explain the reason one, on a full year basis, the impact of the disposal plan is a bit stronger and decrease the revenue on the office part. That's the two main message that we factor in the guidance that we provide.
On the pre-letting situation, what we can say is that 2020 was not an easy year for letting market in all of the market. What we see at the starting point of 2021, after month of January, what I have to say, it was very quiet. We see since the beginning of this month, a lot of new discussions starting, I have to say, both on the pipeline, but also on what we have today in the portfolio. We imagine that we will be able to achieve interesting letting in the coming months, but as of today, there is only talks, discussions, nothing is signed. In term of valuation for offices, what is sure is that we, in 2020, you see that there was ups and downs, that will, I imagine, continue in the future with this new polarization of the market.
We consider that centrality is really key. We see that in center, in the CBD of Paris, Milan and Berlin, valuation was really strong and continue to go up. In other areas, that really depends on the tenant situation, especially in La Défense. We see in La Défense, CB21 down by 9% in 2020. Also, assets that we have in La Défense, we will see the evolution of these values this year that will really depends on the evolution also of the tenant market. Next question.
Thank you. We will now take our next question from Christopher Fremantle, Morgan Stanley. Please go ahead.
Hi. I've got three small questions. The first two are just accounting questions. The first is just on the cost to revenue. I think you recognize about EUR 15 million of additional cost between your gross and net rental income, looking at your release. On page 16 of your full year release, which is about EUR 10 million or EUR 11 million higher than last year. My question is that figure, that additional cost, is that a one-off figure or is it part of a recurring smoothing of rent that has not been paid that will recur through the remainder of the lease term? That's my first question. My second question is on the hotels, the U.K. hotels where you've not recognized any rent, and apologies if I missed it. Can you just explain how your guidance or what your guidance assumes for that item?
Again, apologies if I missed that. Thirdly, I'd just like to ask
Comment on your hotel valuations. I appreciate there's very limited transactional evidence, but I'm just interested what your valuers are assuming for the speed of recovery. Any comments that you can make there so that we can assess the risk of further valuation decline if those assumptions are not met?
Okay. Tugdual will take the first one, and after that.
Yeah. On the first question, the evolution, the increase in the difference between gross to net is mostly due to provision on unpaid rents that we book in 2020. We had a very conservative approach on this year, considering that most of the rents that were unpaid, which are then at very limited, because as I said, the collection rate was 97%. We fully depreciate the rent, and that was mostly focused first on hotels and second on the retail part of the portfolio in our Italian portfolio.
Thanks. On the U.K., yes, there is a MAC clause. We know that now, and it is really clear. What we imagine for 2021, it is not easy to make assumption of the speed of the recovery in the U.K. and elsewhere in Europe. At this stage, what is in our figures, and with those two valuation, is we imagine on total, that means for 100% of the hotel sector and not on group share, we imagine between EUR 10 million results on this asset class to zero, if really the situation will remain very difficult in 2021. For us, that means between EUR 4 million to zero contribution for this hotel U.K. activity in our guidance. I hope it could be better if the situation will improve sooner. Dominique, perhaps for the speed of recovery in the hotels and the risk of valuation.
The speed of recovery in the hotel, of course, will depend on the vaccination process. The appraiser take into account the recovery at the level of 2019 in 2023, in terms of revenue. They consider we are going to come back at the same level of revenue in 2003. After, they do not change any cap rate, because at that time we have, I think, in all the sale and leaseback we see on the market, such a good appetite from investors. I think the recovery for the fixed rent will be very quick. We have only minus 3% this year on fixed rent. On the other portfolio, as U.K., for example, we have a decrease of 14%, and on the EBITDA portfolio with variable rents, we have to take into account a recovery in 2023.
Thank you, Dominique. Next questions.
We will now take our next question from Céline Huynh from Barclays. Please go ahead.
Hi, everyone. Just one question, please, on dividend per share. Can you confirm if you have paid some premium on disposal into your 2020 DPS? If not, if this is going through into the 2021 dividend.
Sorry, could you repeat your question? I don't take it.
Yeah. Can you confirm that if you have paid some premium on disposals into your 2020 dividend per share, and if not, if this is going into next year's dividend.
I don't, to go into [inaudible].
Sorry, Céline, I'm not sure to understood. Yes, we had some premium on the disposal that we've made. Dividend is based on recurring earnings. It's not taking into account the capital gain that we could have. Capital gain is reinvested in the development pipeline.
I'm just wondering, according to this description- [crosstalk]
Okay. It's taking into account, let's say on the EUR 3.6 per share, EUR 2.9 per share is coming from the SIIC dividend. The most important part is revenue. There is a bit of capital gain, around EUR 50 million, I expect, but it's fairly limited.
Some of the disposal will be completed in 2021, we don't have in the accounts the capital gain on this disposal. We distribute the full SIIC obligation in 2021.
Okay, thank you.
Thank you. We'll now take our next question from Alvaro Soriano from Bank of America. Please go ahead.
Yes. Thank you. Good morning. Two questions, if I may. The first one, in terms of disposals, which regions and which other classes are you targeting in 2021 for your EUR 600 million target of disposals, please?
What I said during the presentation, we want to continue to dispose mostly mature office asset. That will be the most important part of this disposal plan, as it was in 2020. We will also continue to have some disposal in flats in Germany. The most important part will really be on the office part. We have also, I have to say, some hotels that are under disposals. We expect to have some disposal also in this area.
The second question is, if you can help me try to reconcile, your EPRA net initial yield has declined 50 basis points to 3.6% over this 2020. This is consistent with around 12% capital value growth if rents have remained the same. Your rents have declined 9% like-for-like. Your portfolio is up 1.3% over the year. How all these moves can be reconciled? More importantly, assuming that your EPS won't grow in 2021, which is in line with your guidance, should we assume that next year your EPRA net initial yield will continue at 3.6%, 50 basis points below of the 2019 net initial yield?
Okay. This is a fairly detailed question. What I can say is that, obviously, when you compare 2019 and 2020, it's not the same parameter, because it's taking into account some disposal, also some acquisition. It's fair to say that, for instance, one of the impact is the Godewind acquisition, where the net initial yield is lower than the average of the office part. It has an impact. It's also taking into account a decrease overall in the yield of the hotel portfolio. If I may, I think we could develop this detailed analysis just after, if it's possible for you.
Okay. Thank you.
Thank you. We will now take our next question from Pierre Clouard from Kepler Cheuvreux. Please go ahead.
Good morning. I have three questions. The first one on offices and on French offices. Maybe can you share with us your view on the evolution of France that you are expecting in 2021? I probably missed that, but I didn't see the reversion achieved in 2020 for French offices, maybe this information would be useful. On German resi, can you confirm that the like-for-like growth has been negative in H2? What is your main assumption, given what is currently happening in Berlin as of 2021? The last one, sorry. On the strategy, in terms of acquisition, are you staying opportunistic today, as in the past, or you are now probably more focused on disposals in 2021? Maybe sharing with us your strategy in terms of acquisition would be useful as well.
Perhaps on the French office, I will ask Olivier to give a more view on what's the market and evolution of 2021 market in the office sector.
As Tugdual mentioned, we suffer a drop. Sorry. I take off the mask, better. We suffer a drop in the take-up, everybody was impacted in the market. The view on the rents, as far as today, what we have, it's a polarization in the market. We see increase of the incentives a slight decrease of the rents depending on the location, especially if you consider La Défense, we see that probably rent will land in the next year. On the other market, for example, Paris CBD, where we have a lot of projects in our development pipeline, we don't see that type of evolution. Maybe a slight increase of the incentive, still a huge appetite for that type of location. As soon as you are able to provide the market the best-in-class asset, it's what we are doing with our development pipeline.
About the reversion, if we look what we did in 2020, as was mentioned by Tugdual, we consider an uplift of 1% on all the renewal we have done in 2020.
Thank you, Olivier. On the German RESI, yes, there is an impact of the Mietendeckel that took place in mid-year in 2021. We have the first impact of the Mietendeckel on the second half, now we are at a lot of landlord in Berlin, waiting for the decision of the Supreme Court, we hope that the solution will really be positive in 2021 after, we hope, the consideration of this law, which we imagine could arrive before the end of June. In terms of strategy, yes, we'll continue to look at opportunities as we have done in the past. That's not the main topic of this year. Main topic of this year is what we explained.
We want to continue to invest in the pipeline, we want to continue to dispose mature assets, and we want to keep and to have the strategy to reduce the LTV, because the target is to have LTV below 40%. Next question.
Maybe on the main assumption that you took on your like-for-like growth in German RESI.
At this time, in the German RESI , we took into account the fact that the Mietendeckel is not canceled.
Okay. Thank you.
Thank you. We will now take our next question from Thomas Martin from HSBC. Please go ahead.
Yes. Morning all. Just to follow up on German RESI, could you remind me to what extent the rent freeze law impacted your 2020-
cash flow, more specifically, since November, I think from November onwards, you had to reduce, I think, rents to the new ceiling levels and running contracts as well. You just said that you don't take into account the court decision, to what extent would that impact your guidance, probably for 2021, assuming we get the decision in June or July and you can collect again the former rent levels, you had to reduce from November onwards. Would that impact your guidance?
Okay.
What would be the potential on that, maybe? That would be interesting.
Tugdual with that as well.
To be very precise on that, on the impact on the Mietendeckel, we have commented a lot, last year. For 2020, we estimated the first phase of the law has impacted our result around EUR 2 million-EUR 2.5 million. For 2021, we expect the impact, which is reflected in our guidance, as has been said by Christophe, by EUR 5 million-EUR 6 million.
If it's canceled, that means that we can imagine that it will be this, between EUR 5 million-EUR 7 million of more EPRA income for next year. For this year, as we don't know what will be the new law that could replace also, the Mietendeckel, at this stage, we keep the Mietendeckel in our assumption. Okay. Next question.
We will now take our next question from Marie Dormeuil from Green Street. Please go ahead.
Hi. Good morning.
Morning.
I had one question on your hotel portfolio, and maybe it's something you've discussed before, but would you be able to tell us how much of your overnight stay is actually leisure and individual and domestic in order to understand how much of this recovery you'd be able to capture?
I think it was in the slide that we have. I don't remember the slide, but it was a slide that we present. We will have that. You have all this information there in terms of activity, because it was the part of 34.
34.
34 and going to 34. It's a long road. We will succeed to that. Okay, sorry for that. 34. Yes, that's the exposure of Covivio portfolio. You have that in France, Germany, and in the U.K., so mostly it's really a regional clientele, that means domestic and your clientele. On leisure, it's more than 50% exposure in your activity and mostly individual travelers. That's why we consider that our hotels will benefit quickly of the recovery when recovery will start, and we'd expect in summer. Okay, other point, other question?
Thank you.
Thank you. Other questions?
We will now take our next question from Jonathan Kownator from Goldman Sachs. Please go ahead.
Good morning. Jonathan Kownator.
Morning.
One quick question on German residential. There's been a new scheme voted, actually, it can also impact German offices, for energetic modernization of German real estate. It hasn't made much noise, can you please give us your first read on how this scheme could impact your renovation program in Germany and whether it's something that you should see as important or will be difficult to be implemented? Thank you.
Tugdual, I will try to answer this one.
Can you rephrase it? Sorry, Jonathan, just to be sure to understand the question.
I'm referring to the scheme that has been introduced for energetic modernization in Germany towards the end of last year. I wanted to get your interpretation on that scheme to see if this is something that will help your modernization program and your investment in modernizing your stock in Germany, or if you don't think this is something that will have a great impact.
As you say, we don't take that really into account, I have to say. What we see that we are working, we are continuing to do CapEx on our portfolio, creating value that you see in the valuation. We will continue. Last year, we invest roughly EUR 98 million of CapEx in the German RESI portfolio, and that create value, that also what you see in the I don't have the split exactly on this impact on this new specific deal.
Okay. Last one more question. On Düsseldorf specifically, can you help us understand demand for the assets and how you're going in terms of letting? This is obviously a very important point for the German office portfolio.
Okay. Today, as Tugdual presented before, in the German office portfolio, we have two main assets with vacancy, the one in Hamburg and the other one in Düsseldorf. Today, we have, I have to say, advanced discussion for 15,000 sq m in Düsseldorf in two separate negotiation, one for 10,000, one is for 5,000 sq m. We hope to be able to finalize one of them or both of them before the end of June.
Okay. Very clear. Thank you.
Okay, we have one question which was written. If I may, could you please elaborate further on the evolution of rent incentives you are observing in French office market? Olivier will take this one.
Yes. Thank you. Again, it's a question of polarization, what we see on average, it's I would say, an increase by 5% of the incentive. It means that coming from 10% to 12% to 15% to 17% in Paris, CBD, for example, and in peripheral area, it's something moving from 15% to 20%. In certain markets, such as La Défense, for example, probably it will be a little bit more, as soon as you are dealing with a large demand with a long-term lease.
Okay. I don't know if there are any other questions. If that's the case, we will be happy now to meet some of you and some investors during the roadshow, and see you soon. Bye-bye.