Hello, everyone, and welcome to this presentation of Mercialys' half year results. You've heard us talk a lot about change and transition in recent years. This half year is important in this sense, as it truly turns the page on the company's significant rental exposure to the Casino Group. Our property portfolio is now completely multi-anchored with major French food retailers. The improvement in our rental profile is therefore now a fact. What remains unchanged, however, as you will see, is that the sequence of operation, operating and financial results is in line with Mercialys' long-term upward trajectory, in keeping with its role as a French REIT, as a leader in affordable retail.
To start with my presentation, I suggest we start with slide 5 directly, and here, I'd like to go back to the fundamentals of our business, in so doing, especially in the uncertain economic climate that has prevailed for several years now. So that's why I'd like to highlight some of the key factors driving the French shopping center market here, starting with the influence of regional demographics on our business. As you'll see on the left-hand side with this chart, 28% of the French population live in large, densely populated cities, 7% in rural areas, and with the remaining 65% living in the outskirt areas of towns and cities of all sizes, and that's where 88% of Mercialys' properties are located. We therefore benefit from very attractive catchment areas in terms of potential consumers.
Now, beyond such geographic considerations, the key feature shared by the vast majority of consumers that we've access to, lies in their attention paid to price, as you can see in the graph on the right-hand side. This pivotal element has become increasingly important over the last few years since the inflation uptick. There are three drivers that enter into play here. On the one hand, you have the appetite for choice and the advantages of physical retailing. Secondly, people want to buy more responsibly and spend better. And finally, hypermarkets are the leading food retailing model. Slide 6 illustrates the first aspect of this paradigm that I just described for you, with the notion of shopping for personal enjoyment.
This need to accumulate is illustrated by the fact that over 70% of people surveyed in France, as you can see in this survey, will say that they feel they enjoy the act of shopping. Interestingly, this includes their day-to-day grocery run, and this appeal has not been affected by the inflation uptick. However, 85% of consumers say they have changed the way they buy due to inflation, for example, by buying less or by opting for private labels or discounts. And so, the visitors of our shopping centers are caught between this desire to shop and the need to control their spending, and so they're adapting, in particular, by placing brands with a clearly identified price positioning in their preferred stores. In order to be at the heart of these concerns, Mercialys' merchandising mix is constantly adapting to offer affordable brands.
This is illustrated here with Action, France's favorite brand, whose opening contributed to a 29% increase in footfall at our shopping center in Aix-en-Provence. Same with Normal. The opening of a Normal store in our shopping center of Annecy contributed to a 26% increase in footfall. The same happens with casual leasing, with our affordable plant sales operations, which generate high footfall in the shopping centers where they are held. You can see in slide 7 that while 95% of French people want to buy more responsibly, only 13% have actually changed their habits in this sense, mainly because of financial constraints, as I just said. This is the second defining aspect of purchasing patterns. French people aspire to buy better, and this trend is also largely impacted by the attention paid to prices.
Among these changes in habits are secondhand purchases, with 72% of French people buying a secondhand product in the last 12 months. And here again, 60% of them said that they buy, they bought secondhand due to price considerations. Here again, Mercialys is taking into account this change in behavior into its merchandising mix by bringing on board brands at the crossroads of price and sustainability. Here are a few examples, with Besançon and The Second Life for secondhand clothing, Grama for vintage clothing in Grenoble, La Ressourcerie in Marseille, and Oh My Frip! in Toulouse. All of these were highly successful operations. The final key area of consumption is the food segment.
As you can see from slide 8, the hypermarket remains the ultra-dominant retail model in France, particularly in the inflationary context that we're experiencing, with 76% of the French running their weekly errands there. Hypermarkets thus play a key role in limiting the share of food in household budgets, thanks in particular to private labels. The chart on the left shows a sharp rise in the private label market share to 28% in 2023, close to its highest level of 30% that was reached during the 2008 crisis.
This momentum is also illustrated on the right by the, with the major food retailers, Leclerc, Intermarché, Super U, Carrefour, Lidl, Auchan, Aldi, and Monoprix, being among the top 15 retailers in France in terms of sales, along with Leroy Merlin, Action, and Decathlon, with Amazon as the only retailer. And as such, 89% of Mercialys shopping centers are now anchored by one or various of these leading retailers, except for Amazon, of course. Let me now move on to slide 9, again, on the food sector, and here I'd like to show you the very sharp improvement in Mercialys' risk profile. Up until last year, Casino hypermarkets were Mercialys' main tenant, and they represented its main anchor. But now our rental bases is diversified considerably with the sale of Casino's retail assets to Intermarché, Auchan, and Carrefour. These are now almost complete.
The trend is set to continue with the Auchan and Rocca groups acquiring the Casino subsidiary that operates Mercialys' own stores in Corsica. This transaction has yet to be finalized, and here you have a pro forma projection on the map. In anticipation of this move in Corsica, and to contribute to the balance of the rental mix, at the beginning of July 2024, four hypermarkets have joined the run, as Elisabeth will go on to explain. This slide therefore shows Mercialys' pro forma rental exposure to both changes at the end of June 2024, with excellent dispersion among tenants that are both operationally and financially strong. Now, in addition to food, on slide 10, you will find details of Mercialys' rental exposure by segment.
Our letting strategy has always been driven by a desire to pivot our retail mix towards recognized, affordable brands that are essential to consumers, as I have just described. And now, we have largely deleveraged ourselves away from ready-to-wear, which only accounts for 28% of rents, compared with 31% at the end of 2018. But we have increased, at the same time, the share of three particularly high-performing sectors within retail: the culture, gifts, leisure sector, restaurants, and beauty health. And this is exactly what I'll focus on in the next three slides. First of all, slide 11 on health and beauty. Mercialys' rental exposure rent rose from 10.6% at the end of 2018 to 13.6% at the end of June 2024.
Over the half year, sales by the company's tenants in this sector outperformed the market trend at +9.3%. On the right-hand side of the slide, you can see examples of developments with the opening of 6 Rituals stores since 2018, since 2019, actually. These are brands that are clearly positioned on affordable prices. These health and beauty brands have notably replaced a number of clothing brands, such as Camaïeu, which, as you know, went through a challenging period, as we explained in past presentations. In slide 12, you will see the solid performance achieved by the culture, gifts, and sports sector, with Mercialys' rental exposure rising from 13.4% at end of 2018 to 17.7% at end of June 2024.
This sector is notably underpinned by a very positive trend in sneakers, which now account for 60% of the footwear market in France, and whose brands are enjoying strong sales growth on Mercialys' assets, +12.6% for Foot Locker and +4.7% for Courir at the end of May 2024. This slide shows examples of leases recently signed in Lanester, Toulouse, Marseille, and La Réunion. Here again, these popular consumer brands are replacing ready-to-wear brands with significant increases in sales for the shopping centers concerned. For example, Cultura and Darty in Angers achieved twice the sales of H&M and Calliope, which they have replaced. Lastly, again, on the same topic, with restaurants in slide thirteen.
Well, Mercialys' rental exposure in the restaurant sector has risen from 7.4% in 2018 to 8.7% in June 2024. Here again, Mercialys' rate retailers sales in this sector have significantly outperformed the market, with an increase of 6.6% to the end of May 2024. Here are a few examples of recent operations in Annecy, with the deployment of several outdoor restaurants, which complete the leisure offer, which includes a movie theater. And in Toulouse as well, we opened 2 new restaurants in the dedicated court. New developments are also underway at the Sacré Cœur shopping center in Le Port, La Réunion.
Developing a retail offer that's affordable, adapted, and attractive across comfortable and convenient sites is all very well and good, but you also want people to know about it at a time when both physical and digital retail offers compete for consumers' attention. Mercialys has a loyalty program for this purpose, which has been developed for almost 10 years, which also contributes to adapting the marketing strategy locally, as you can see in slide 14. While traditional means of communication, such as signs and posters, remain effective, Mercialys is adapting to changing visitor habits. That's why, in May of 2024, 80% of Meta users in Mercialys' catchment areas, so basically 6 million people, were able to receive messages from our loyalty program.
Now, to fully take advantage of this digital channel, Mercialys has widely developed its video marketing communications via video, so to share our retailers' offers and vouchers. The results have been conclusive, with 43% of merchants associated with a video created by Mercialys noting a positive impact on their sales, with more than 20 million views of these videos in the first half of 2024, and this momentum is growing. Similarly, the EUR 700,000 in customer vouchers generated EUR 3.5 million in sales for merchants over the period, and the discount vouchers promoted on social platforms resulted in a 51 conversion rate in store, and so our marketing is very profitable. Let us now turn to the operational performance generated by this very solid asset base.
Firstly, in slide 15, you can see that footfall at Mercialys shopping centers is up by a cumulative 2% at the end of June 2024, thereby outperforming the national Quantaflow index by 70 basis points , which is up by 1.3%. This trend is all the more satisfying given the multiple disruptions that have impacted footfall over the period. A few examples spring to mind here. The attrition of supplies to hypermarkets operated by Casino ahead of the sale of goodwill, the organization of clearance sales, and the hypermarket closures, which lasted 2-3 weeks. At the same time, cumulative sales for Mercialys shopping centers, as of the end of May 2024, were up by 3.4%. So that was 170 basis points above the national FACT index, which was up by 1.7%.
Also, for your information, I'd like to remind you that the sales of our merchants exclude the sales of the hypermarkets that we own. Otherwise, the growth would have been much higher than that if we were to take into account the excellent performance of these hypermarkets in our calculations. As you'll see in slide 16 and 17, there are a number of examples on our rebranded hypermarkets in Quimper and Marseille, for example. Here again, there was a significant increase in footfall, and clearly, the takeover of the goodwill of a large number of hypermarkets has contributed to an improvement in the perception of shopping centers by visitors and retailers alike, and this has been extremely positive for the brands across these sites.
As you can see in slide 16, there's been an increase in footfall by 36% since these have been opened with Intermarché in Quimper. In slide 17, you'll see plus 37% with Auchan, Narbonne, and plus 50% with Auchan, again, opening in Annecy this time.
Now, if we look at slide 18, we can see the current financial vacancy rate across our portfolio. You can see that the current financial vacancy rate, excluding strategy vacancy, stands at 3%, 30th of June 2024. This is an almost stable level compared to the end of 2023, and it represents a significant improvement on the high of 3.3% at the end of June 2023. This stability in the current financial vacancy rate is particularly satisfying, given the large number of brands, mainly in the ready-to-wear sector, which filed for receivership or liquidation in 2023. So our reversion rate associated with rental activity in the first half of 2024 was, again, virtually stable at -0.2%, in line with the sustained indexation applied to rents.
We should note that this reversion rate does not take into account the impact of the remarketing of a medium-sized store previously leased to H&M in Marseille by Intersport, and this meant that we had to reorganize the plot and also reposition this towards the sports sector. This is a very buoyant sector, which contains various brands, Foot Locker, Intersport. So, lots of sporting brands in Marseille then. Now, turning to slide 19, which shows that accessibility is a decisive factor in Mercialys' proposition, particularly with regard to its tenants.
Through their local leadership, charges, reasonable rents, compared with the ability to generate, sustained sales, have resulted in an OCR which is sustainable at 10.9%, end of June 2024. So that represents 20 basis points above the December 2023 level, reflecting the effect of rent indexation. And so, unlike some of our peers, the OCR excludes from its calculations the large food retailers, which of course would significantly bring down the OCR if they were included. You can also see on the right-hand slide, recovery rates in the first half year of 2024 are very satisfactory. Now, I will hand over to Elisabeth Blaise. Good morning, everybody. Let's move to the changes in results at the end of June 2024.
So in slide 21, you can see Mercialys' ability to generate a steady organic growth over the long term, whether indexation is high or nonexistent. Average organic growth over the period 2015 to June 30, 2024, excluding the 2020 financial year marked by the health crisis, stands at +3.6%. This long trajectory is achieved by the positive trend in retailer sales at Mercialys properties, generated by the attractiveness of the sites, which in turn leads to the concentration of rent increases, either through reversion or indexation, while maintaining the sustainability of these rents for the retailers, as Vincent has just said.
Slide 22 details rental trends for the first half of 2024, with organic growth in invoiced rents of +4.1 points, driven particularly by indexation, +4.4 points, and variable rents, +0.2 points, a sign of the buoyant activity of the tenant brands in our property portfolio. At the same time, organic growth has been tempered by actions and the customer base with a drop of 0.2%, a contribution from casual leasing, which is slightly down 0.2 points. This activity has not yet benefited from the increase in footfall generated by hypermarket rebranding. There were no significant changes in the scope of consolidation during the period.
Overall, invoice rents amounted to EUR 91.4 million, 30 June 2024, up 4% on the first half year of 2023. Due to entry fees of EUR 0.2 million, rental income rose by +3.9% to EUR 91.6 million. Now, if we turn to the analysis of net recurring earnings, and the trends there in slide 23, we find a rise in rental income that I've just commented on, and an increase in rents net of expenses of 5.99% to EUR 87.4 million. EBITDA stood at EUR 76.1 million, up 5.2% on the first half year of 2023. EBITDA benefited from the rental growth and was supported by stringent controls of our structural costs.
The EBITDA margin thus rose to 83.1%, versus 82.0% in the first half of 2023 at a high level. This is a strong indicator of the efficiency of Mercialys' operational management. Financial expenses included in the recurring income amount to EUR 14.4 million, compared with EUR 13.7 million at the end of June 2023. This limited increase was due to the disappearance of variabilization products, while the higher cost of commercial papers was more than offset by investment income. Other operating income and expenses and reversals of, or charges to provisions varied by -EUR 0.8 million. As a reminder, on June 30th, 2023, a provision of EUR 2.1 million relative to a dispute over a site in La Réunion had been reversed.
Finally, income from companies accounted for by the equity method, which rose from EUR 1.8 million in the first half of 2024 to EUR 1.7 million in the first half of 2024, and minority interests, which increased by EUR 0.3 million, reflect the growth in rental income from the corresponding companies. Overall, recurring net earnings came to EUR 59.3 million, up 3.3% on H1 2023, with recurring earnings per share of EUR 0.63, up 3.0%, outperforming the annual target of at least +2%. Now, turning to the change in the value of the portfolio, excluding transfer duties for the first half of 2025, you can see this in slide 24.
You can see that this has bounced back on a like-for-like basis by 0.4% over six months. With regard to this variation, we note that the triple combination of our moderate average rent of EUR 251 per sq m, the low vacancy in our portfolio, and positive indexation have supported the rental values highlighted by the appraisers, with a positive trend of +2.3% over the year. Appraisers continue to factor in rate rises, which had a -2.0% impact on asset values. In slide 25, the various factors I've just mentioned lead to a very slight increase of seven basis points in the average yield on appraisals over the half year, i.e., 6.68% at the end of June 2024.
You have to go back to the very beginning of Mercialys' stock market history, i.e., 2005, 2006, to find a similar appraisal rate of 6.99%, and 6.30%, respectively. However, over this period of more than 15 years, it's important to remember that we have significantly altered the structure of our asset portfolio through massive and, above all, selective refocusing and reducing the number of our sites from 157 to 47, and increasing their average unit value from EUR 8.1 million in 2006 to EUR 61 million at the end of June 2024. As a result, and being more refocused and stronger, our assets now offer a yield at their highest level ever, with a spread of 340 basis points over the risk-free rate.
That brings us to slide 26, to the change in liquidation NAV, which stands at EUR 16.53 per share, compared to EUR 17.1 per share at the end of 2023. This variation of EUR 0.57 over six months results mainly from the following impacts: a dividend payment of EUR 0.99, and EUR 0.63 change in recurring net earnings, per share variation of late unrealized capital gains of EUR 0.04 per share, and this is made up of the rate effect of EUR 0.57 per share, and then a rent effect of EUR 0.67, and also other effects for EUR -0.14 .
And the last effect, the change in fair value of the fixed rate debt for EUR 0.13 per share, and for EUR 0.04 for derivatives. As I said a moment ago, Mercialys' assets are refocused and commercially strong, but they are also liquid. This characteristic, which is decisive, for the valuation of real estate assets, and of which you have had ample proof over the last decade, including during the Covid years, is once again demonstrated, as you can see in slide 27. In July 2024, Mercialys sold 4 hypermarkets, of which it owned 51%, the balance being held by a fund managed by BNP Paribas REIM. This sale was made at a price in line with the latest appraisal values. As part of this transaction, Mercialys also sold 2 fully owned ancillary lots.
The total value of this transaction was EUR 117.5 million. As mentioned before, the decision concerning these hypermarkets operated by Auchan is in line with the company's policies of regular rotation of its portfolio and are constantly balancing its rental exposure. Ahead of the forthcoming transfer of the Auchan banner, the five Casino stores owned by Mercialys in Corsica. Lastly, this sale contributes to an improvement of the debt-to-equity ratio, strengthening an already solid financial position and providing Mercialys with increased resources for its growth strategy. Mercialys development ambitions are based on solid fundamentals, combined with a prudent financial policy. Mercialys has thus built up a development portfolio, which could be deployed over the medium term, amounting to EUR 432 million, as detailed in slide 28.
Mercialys Development will remain focused on the retail sector, but its expertise will also enable it to expand into sites with concomitant activities, including health centers, leisure, and catering. This potential for reorganizing its sites will enable us to maintain their attractiveness, so through densification and a profitable mix of uses adapted to the requirements of zero net artificialization. A highly selective approach will be applied to these investments, both in terms of property fundamentals, i.e., location, rental exposure, potential for optimization in terms of energy consumption, and financial criteria, with a minimum yield of 7%. The opportunity to implement these projects will be systematically balanced against opportunities to acquire existing assets. The synergies to be developed with the new food operators...
You can see this in slide 29. These synergies will concern both the operational and real estate aspects of the sites. They will be created by optimizing the physical visibility of the brands, but also by boosting communication campaigns for both the hypermarket and the shopping mall. Communication vectors allowing us to stand out in the catchment areas. Better cooperation between hypermarkets and the malls is also needed to highlight the offers of the retailers. Product promotion, for example, price information for visitors, coordinated events, capitalizing on the shopping malls already powerful loyalty program, pooling promotional offers, these are the areas for optimization.
Lastly, Mercialys will be able to apply its expertise in terms of the reconfiguration of food superstores, adapting hypermarket floor space to operator needs, while at the same time, further strengthening shopping arcades through the creation of medium-sized stores and focusing reversion on rents. To conclude on development aspects, slide 30 shows examples of progress on four pre-marketing projects, currently being carried out by Mercialys. First, in Saint-André, La Réunion, for example, a retail park of almost 13,000 square meters, to be developed on Mercialys land reserves, is 63% pre-sold. Similarly, in Sainte-Marie, still in La Réunion, pre-marketing of the 11,000 square meter extension to the shopping center has barely begun and already stands at 12%, to which must be added advanced expressions of interest represented, representing 35% of anticipated rents.
The project of restructuring a Valence 2 mall is 47% pre-sold. And lastly, the project to restructure the historic part of the Toulouse shopping center has also been launched. I'll end with a detailed look at the group's financial structure. First, the debt structure on slide 31. Firstly, drawn debt, which stood at EUR 1,192 million at the end of June 2024, comprises three bond issues and one private investment for a residual nominal amount of EUR 1,150 million and EUR 42 million in commercial papers. The average maturity of debt drawn was 3.3 years on 30th of June 2024. With the exception of EUR 42 million in commercial papers, Mercialys has no drawn debt maturing before February 2026.
Mercialys also has undrawn financing resources of EUR 385 million, stable compared to the end of December 2023. 57% of these lines have been extended by a half year at the half year 2024. It should be noted that at the end of 2023, 100% of undrawn bank lines included ESG criteria. At the same time, our cash position stood at EUR 88.2 million at the end of June, after the payment of dividends and before the receipt of the proceeds from the sale of four hypermarkets.
In slide 32, we can see that Mercialys financial structure remains solid, with a loan-to-value ratio, excluding transfer duties, of 40% up to June 30, 2024, and a 39.4% pro forma for the sale of the four hypermarkets completed in July. This level is well below the bank covenant of 55%, impacting 92% of our undrawn lines. The ICR ratio stood at 5.5 times at June 30, 2024. Again, well above the minimum level of at least 2 times as set by the banking covenants. In its latest review, October 2023, Standard & Poor's reiterated the company's BBB rating and maintained a stable outlook. I'm going to now hand over to Vincent Ravat to end this presentation.
I conclude the presentation on slide 34 by reiterating the objectives set for 2024, i.e., recurring earnings per share growth of at least 2% compared to 2023. A dividend ranging from 75%-95% of 2024 recurring net income, and a continuation of our CSR strategy, 2020 to 2030, in terms of its four dimensions around which it was structured. I'd like to thank you for your attention, and we'll be happy to take any questions you may have.
Thank you very much. So just to remind you, if you'd like to ask a question, you have to press star and then one. So star and one. So first question comes from Stéphane Abizera from Invest Securities. Over to you.
Good morning, and thank you for that presentation. I have two questions. First of all, on the balance sheet, have the appraisers taken into account the transfer of Casino, and to what extent? And moreover, in terms of the solid balance sheet and stabilization of values, will there be an acceleration of the investment strategy over the next half year, particularly in terms of what's already been identified?
Good morning. In order to answer your first question, the rebound in terms of the asset value at constant scope, that I mentioned before, 0.4%, excluding duties, doesn't take into account the evolutions calculated by appraisals. So, hypermarkets, for example, and transfer of stores, as Vincent recently described. Those are very recent.
Most of our stores reopened in April and in May, and we think that the appraisers are waiting for more information, extra information, especially in terms of footfall and performance of these stores, in order to be able to define the valuation. This is something that we are waiting to receive over the next half year. We don't have any specific date. The appraisals... The appraisers do their own valuation.
So there's a risk premium for Casino of 34 basis points. So can you tell us a bit more about that?
So once again, we have detailed this, and included that discount that was established by the appraisers. This was the first half of 2023, when Casino expressed its need to go under a transformation, and before an agreement was reached with the food retailers, first of all, Intermarché. So once again, it would be logical to see this discount over the coming half year. So in terms of investment, as I've just said, and as you've noted as well, we have a financial structure which remains extremely robust. We have ambitions in terms of investment, and once again, as I described, either through the pipeline, that's the development pipeline, or through acquisitions, by buying existing assets on the markets, which are quite attractive. We have already started investing last year via, through the acquisition of Imocom Partners.
So today, Mercialys' investment and ambition does exist, but we have to make sure that we maintain a solid financial structure. That's one of our main characteristics.
And perhaps a last question, then, concerning Casino. And what about the performance of the hypermarkets? How does this reflect in your turnover? Is it possible to calculate the impact of that?
And in terms of the operational effects on your shopping malls, there isn't a direct effect. As we said previously, in previous years, when the anchor, our anchoring was quite different. The hypermarket, based on the size of the mall, has an influence which can be strong or not on the footfall.
So, the hypermarkets, for example, the reduction in footfall there have been very slight. The positive effect basically concerns the morale, the atmosphere, and the general proposal made by the shopping malls to consumers, to their tenants and their sales forces. When you have a hypermarket which is slightly down, which is lacking products, lacking footfall. Of course, this you know creates a certain type of dynamic which is negative on others. So currently what we've seen is that there's a kind of effervescence which is filtering down to all the different stores. Perspectives of renewing these same hypermarkets which encourages the tenants themselves to envisage renovation of their own stores.
And in terms of the consumers, we've seen a return in terms of food shopping. So we've seen the effect of this on casual leases, where we have a stronger relationship, more immediate relationship there. So we can see an improvement of the ecosystem in general terms, but we're expecting to see performance from other tenants, which will improve regularly over time, as so. And it's the experience from these transformations that we had in La Réunion over the last four years, which allow us to believe that the profit will remain stable. So there is a mathematical correlation, but we can't actually do that at the moment.
Thank you. Next question by Florent Laroche-Joubert from ODDO BHF. Over to you, sir.
Hello, Vincent. Hello, Elisabeth, and thank you for this presentation. I have various questions. Number one, on your guidance, you've insisted on the fact that the FFO per share has grown by 3%, above the expected growth of -2% over the year. But when you look into and compare between what you could have done over the year and H1, are we to expect any specific costs across H2, which would bring us in line with your initial guidance in 2023? Number two, hypermarkets and the change in operators. Have you already had any discussions with any operators? And if so, by when?
Third, on the schedule, page 30 and the timeline, can you share more details on the criteria that you will be using to take your upcoming decisions?
First question on guidance. Well, for H2, no. You would want to take into account the impact of asset disposals, as launched at the start of the second half of the year, and also, investments will have to be taken into consideration. Then there's the refinancing with the Imocom company, which will take its full effect across H2 of 2024. So all of this will enable us to land on an annual guidance, which will be fully in line with our initial forecasts in February. With regards to the reletting of hypermarkets, that's something that we had anticipated. We had already addressed the topic in 2023.
We've had a few preliminary discussions that we initiated, as a matter of fact, to look into potential outlooks, especially given the current situation, where we have a rather large number of medium-sized stores which might be released. The operators that have taken over these sites, mainly Auchan, Intermarché, have been very busy with the restocking of these new stores. Also, they've been very busy getting ready for the potential transformation that will be incurred by these projects. Also, they'll be very busy with their salespeople, with the performance as well. You know, they've performed rather well above their expectations, so they'll want to recruit more. All of this will accelerate across H2.
One could have thought that perhaps they could have been a little quicker about this, but maybe they wanted to have a more detailed view of their actual performance before they took any decisions in this respect. Now, with regards to the criteria that we use to launch our operations, well, we base ourselves on two key thresholds. First of all, having an average operational yield that's relative, with a target of at least 7%. So the closer we get to the actual launch of these operations, the more we can fine-tune the potential yields. And second, we do not want to take any risk, any major risk when it comes to launching such operations. So we will not be committing to any cost at all before we have any preletting levels that are considered as substantial.
And for us, the 65% threshold of solid preletting is a minimum required level. And as Elisabeth describes, we're actually going above these thresholds, so we'll be in the, we'll be good to go for these projects very, very soon.
That's great. Thank you so much.
Thank you, sir. Ladies and gentlemen, again, if you want to ask any question, please press one followed by one. Please press star, sorry, followed by one. Stephanie Dossmann from Jefferies, over to you.
Hello, Vincent and Elisabeth. Two questions: could you please remind us the share of hypermarkets following the disposal of the four hypermarkets that you did over the first half? And second, on acquisitions, what kind of assets would you be looking into for potential acquisitions? Potentially abroad, actually, because I know that you were interested in potential JVs with Immochan, for example. I know that you've also looked into other options in Paris Nord. So what's your approach when it comes to acquisitions?
Okay. So first of all, on appraisal, on the residual appraisal of hypermarkets, we do not have specific figures here with us. Well, actually, we do not make any difference between the asset values according to their type. However, one thing that I can share with you, as you can see on slide 9, hypermarkets in economic values account for 18.4% of rental revenues before the actual disposal of the hypermarkets that we own to the tune of 51%, 16% in disposal pro forma.
When it comes to your question about investment, here's what I can say. The investments that we might be looking into abroad, we've always said that we would not opt for individual assets. In order for these operations to be successful, to properly manage a country, you want to have a certain shopping center platform, so we would not be looking into acquiring any standalone assets outside of France. Now, as far as France is concerned, of course, we would be mainly focusing on the revitalization aspects, and also, we'd also be looking into focusing on locations in the outskirts of towns and cities, in sites that are anchored by well-performing hypermarkets and food retailers. We also believe in the strength of retail parks.
Our interest in Imocom Partners, for example, was based on this belief in the strength of these accessible outskirts. So that's what we'll stick to. As a matter of fact, we're at a bit of a crossroads now. Our pipeline is becoming interesting in terms of yield, again, compared with external growth operations. So there will be a bit of a decision here for us. We'll have to either accelerate our pipeline on the basis of the criteria we described to Florent earlier, or on the basis of acquisitions, out of our regular pipeline, but we'll have to be very mindful about this and not diversify too much.
And I thank you. Valérie Jacob is calling up from Bernstein. The floor is yours. Yes, hello.
I missed out on the first questions, but can you please share further details on the Marseille La Valentine renegotiations? Why did it all turn out this way? Is this due to the specificities of this asset and this tenant, or is there anything else that came into play that might be due to the significant increases of the past few years?
Well, actually, this operation was quite specific in the sense that we wanted, as I said, to zoom to make sure that this site would go all out on sports. H&M is actually undergoing a number of challenges right now, so we seized on that opportunity.
And Intersport is a leading sports retailer in France, along with Decathlon, and they really wanted to be part of that story, but they wanted to have the right conditions to do so, i.e., they wanted to offer a window within that shopping center that would be on a par with our ambitions for this site. So it meant that they would be taking over neighboring plots-
So around H&M, but for these plots, usually the rental levels are much higher than those for medium-sized stores. So if you add all of this up, medium-sized store, plus, batches of stores that were very attractive for Intersport, well, we had to made a number of efforts. So that's why we have this negative reversion rate, and that's why we decided to process it on a standalone basis. Thank you so much.
Thank you, madam. We do not have any further question on the French channel. We'll now take the questions from our English-speaking channel.
Thank you. We take a question from Alex Kolsteren from Kempen . Please go ahead. Your line is open.
Hi. Yes, good morning, team. Thanks for the presentation, and thank you for taking my question. I have two. First one on the tubes and footfall report. It's a solid number, and of course, the Casino rebranding to other banners will play a role in it. Are all the former Casino-operated assets now rebranded and reopened under the new banners, excluding the ones in Corsica and the three on the mainland? Thank you.
Um, [Foreign language] .
Thank you so much for this question. Actually, no, all of the ex-Casino stores have not changed banners just yet. As we said, for Corsica, indeed, an agreement was signed between Auchan and the local group, Rocca, and Auchan have taken over the company in charge of all of the operations of the stores in Corsica. So that actual operation should happen during the second half of the year. Now, with regards to our property portfolio on the French continent, as you can see on the map, slide 9, are still a couple of stores in Carrefour, and these stores in Carrefour are Casino stores that have not quite changed banners yet. So here there are ongoing discussions between Casino and other operators that we do not participate in.
Here again, we believe that all of this should be agreed on by the end of the second half of the year.
[Foreign language]
Are there any other questions?
Yes, I do have-
We don't have a-
Another one. On balancing developments and standing acquisitions. Can you hear me?
Yeah, yes. [Foreign language] .
All right. Sorry.
Mm.
It's a bit tricky with the English and French languages to each other, but I'll go ahead. Thank you. You commented on balancing developments with standing asset acquisitions, and with the buy and build disposal and the stable valuations, there is indeed some firepower it looks like in the business. Can you comment on the investment market for asset acquisitions currently in France?
It's-
So it is a market. I'm sorry, I'm getting confused between French and English. So it's a rather paradoxical market. We get the impression that there are quite a lot of assets which could come onto the market, and which could represent opportunities with vendors who are non-constrained. So they'd be quite demanding in terms of the value. So that demand in terms of values gives the yields, which are lower than what we have in our own pipeline. So that's not very interesting to us, and so they wouldn't strengthen our asset portfolio very much. So we're having discussions. This has been ongoing.
We have a level of demand in terms of the use of our capital, which remains very high, and we don't want to move away from that. So we've spent an awful lot of time strengthening the quality of our assets and our portfolio and doing our refocusing. So we're not going to rush into something that if it's not of the right quality. So it's a market which is rather strange, let's say. It's quite, we're hesitating. There's a hesitation between sales and purchasing, and so we're continuing on our path, cruising along without any particular constraint.
All right. Thank you for that, and maybe one final one then on the, on the rental levels. You commented quite positively on the, the renegotiation in Marseille. Overall, it's, it was a slight negative on the, on reversion. How do you see that going forward, if perhaps you get another year of, of some indexation in advance?
Well, indexation will, I'm sure, will calm down somewhat, gradually appease over time, and we are expecting the levels to fall. As you know, we said this, we've always been extremely attentive at Mercialys in terms of the affordability rate of our tenants, and in a context where we have strong indexation, then we have to remain measured in terms of relets. We think that this is the thing to do so that we have a stable trajectory with no obstacles. So we see other companies who are showing very high indexation levels and also high reversion levels. So we think that this may destabilize things.
What you can see in terms of the slide on organic growth, slide 21, when the levels of indexation are more modest, then we go back to strong reversion levels. This was the case between 2015 and 2018, and we think that we will go back to that particular trend, that historic trend, so reversion that will take over, from indexation.
All right. Thank you very much. Those were my questions.
Thank you. As there are no further questions now, I'd like to hand the call back over to you, Mr. Ravat, for any additional or closing remarks.
I'd like to thank you for all those questions, and thank you for your attention, and I would like to wish you a wonderful summer and a wonderful Olympic summer. Have a good day.