Good evening. Welcome to the half year result announcement for Nexity. Please press star if you have questions after the press conference is finished. I will give the floor now to Madame Véronique Bédague, who is the CEO of Nexity. Over to you, madam. In the months ahead, this means that we have to navigate tightly and think long term. You're well aware of the context. Sharp interest rates rise over the last 18 months. This has, in effect, reduced the affordability of some households. Individuals have lost almost 20% of their real estate purchasing power. Mortgages are more expensive.
Our figures show that at end of June, rates on average, excluding insurance costs, stood at 3.45% and probably soon to rise to 4% by the end of the year, whereas they were at around 1% in early 2022. They are also much rarer. The production of real estate loans fell by almost 40% in the first half of the year, compared with the same period last year, with an acceleration in the second half compared to the Q2 of last year. There's also the fact that this has diverted institutional investors, who are now achieving much higher returns in other secure asset classes. This includes government bonds or investment-grade corporate bonds. Further to this rise, there has been a change in the paradigm of our market.
Therefore, the new home market is slowing sharply. Forecasts are for less than 100,000 orders for 2023, versus 124,000 last year, and more than 162,000 in 2021. In the commercial real estate market, investments has ground to a halt, mainly in the Paris region, and we will be going back to that a bit later. We have to keep in mind, in this market, which is down sharply, the profitability of completed projects is under greater pressure. Selling prices to individuals are falling. The proportion of bulk sales is rising. You will recollect that in July of last year, we decided to step up bulk sales, which is much bigger, and on average, it's less profitable than retail sales.
I know you're going to be asking about this, so what I can say is that we are no longer. Although they're no longer rising, neither land prices nor construction costs are falling significantly. We may find, we're not seeing this. We're not seeing any clear move on land prices or construction costs, which have significantly risen over the past two years. We're no longer able to pass on this increase in prices to our customers. We have therefore entered a period of transition that is very clearly going to weigh on our profitability. Our revised outlook for 2023 is that we expect revenue at EUR 4.3 billion, excluding international business, with operating profit of EUR 250 million.
You will recollect that in February, when we last met, the consensus was that the sharp increase in rates by central banks meant that inflation would be contained fairly quickly, and some were even forecasting interest rates that could decline slightly at the end of the year. Well, this no longer applies, market consensus is that interest rate increases are to be expected after the summer break, at least one, and we no longer expect a decline in interest rates before the second half of 2024. Against this backdrop, we are emphasizing control over the debt load and cash flow generation. We need to preserve the agility and flexibility of Nexity, we have a paradigm change to which we have to adapt.
As far as the dividend is concerned for 2024, this will reflect our net income for 2023. Nevertheless, I've said this on several occasions, Nexity is accelerating the implementation of its strategic plan, which enables us to respond to the paradigm change. We are focusing on services which enables us to manage more effectively, manage products. The prolonged deterioration in the economic situation will lead us to revise in 2024, the financial targets announced in September 2022, which were based on our initial 2023 outlook and on a new home market of approximately 130,000 reservations per year. Our non-financial targets remain unchanged, of course. Given this paradigm change, first of all, we are steering tightly. That's the first absolute must, which we're doing across the whole of the company. We are containing our overheads.
We are freezing job creation, not replacing staff, reorganizing. We have started... We're continuing with this plan. We are actively managing our development risks, so we have increased our sales costs, sales commissions before purchase of land, and we are keeping tight control over our WCR and therefore our debt, and we are implementing as fast as possible, the land that is currently under management. We are implementing our international divestment plan, as announced. We have just sold our Nexity Poland to a Polish developer. This has been achieved in Poland with a sale price of EUR 100 million, which will contribute to reducing Nexity's debt, and we are continuing with what we had committed to, which includes the sale of the Nexity Portugal, expected by the end of the year. At the same time, we are thinking long term.
We gave details of this in September. We are confirming and stepping up the implementation of our strategic plan with managed products, enabling long-term income. We're working with the services teams and our sales to investors, so we are rolling out our entire managed product offering, which appeals to both users and investors. Of course, our Studéa student residences, and we will be. The occupancy here is 97%, which is very good. Of course, our senior residences, Domitys and Edenéa, and we have re designed them. These are much easier to integrate in city centers. Our co-living offering with Urban Campus, our intergenerational residency with Complicity, and other offers will be released by the end of the year.
In the medium to long term, we have optimized our cost price, we need to further lower our production price because the purchasing power of our clients is going to increase very gradually, and we have a role to play here. With Stéphane, as you have seen, we have announced in June, a partnership with a U.K. company. This is a tech company, which sells a software which enables the design and offering of products, where an architecture steps in, and this means that we can customize the product for our projects. We hope through this modular construction, we hope to achieve 15% of our production with this product, and we think we can reduce the production costs of modular homes by...
This is being developed at the 2031 level of the RE2020, we are coming up with a very appealing project for municipalities. We're also positioning ourselves as a major driver for urban regeneration in association with Carrefour, we have this product in city centers and in suburban areas. This is focusing on 76 sites, which will enable us to roll out our whole offering, hotels, office space, et cetera. We're going to set up at the beginning of 2024, a joint venture, 80% owned by Carrefour and 20% by us. Now, we are seeking to come out of this transition period in the best possible condition.
Now, looking at our business activity, we had a Q2 in line with Q1 2023 and Q4 2022, we are continuing to outperform a new home market downturn bar of nearly 40%. Residential real estate is down 20% in volume and 28% in value. We have sold extensively to subsidized housing authorities. We will. Our services activities show that the occupancy rate is at a record high. Nexity's ability to constantly fill up its pipeline is unchanged, the visibility remains important since the pipeline stands at 6 years of activity, with a backlog representing 2 years of activity.
Business potential represents revenue to completion and purchase agreements, and we can say furthermore, that we're not yet taking into account our partnership with Carrefour. That'll be further business potential in 2024, as each of us moves forward in that operation. Thank you, Véronique. Now, let's talk again about Q1 housing market. There was a deterioration of 34%, compared to Q1 2022. There's quite a difference between bulk sales down 8% and then, retail sales down very significantly, down 39%.
We don't have the official figures yet, but it's very likely that Q2 will be a very similar trend or even a further deteriorated trend due to interest rates and difficulties for banks to grant loans, as long as the rates have not stabilized and a very strong wait-and-see attitude amongst individuals. In this deteriorated context, Nexity is outperforming in H1, posing resistance at -20% compared to H1 2022, with retail sales reservations, which pretty much follow the market trend at -41%. Very good performance on bulk sales, which once again demonstrates our ability to redirect part of our offering, and most importantly, the solidity of our partnerships with institutional investors.
To delve into the greater detail about our client mix, we see an illustration of the points I just made, namely, an increase in promotion, proportion of bulk sales, 53% versus 37% in 2022, and more particularly, an increase in sales to social housing operators. That explains our increase of 5% in value, while we've increased by 16% in volume. With regard to sales to individuals, very good resistance from main residences, but a marked decrease in individual investors. Now, the volumes have changed since 2022. Most importantly, we've seen a market decrease in individual investors. We're suffering both from the increase in interest rates and also the granting conditions for mortgages that have been toughened, having to do with the rate of effort, and no longer take into account some considerations that were previously.
All these difficulties have created a wait-and-see attitude among this category of investors. Concerning our supply for sale, the control of our commercial launches has allowed us to reduce our supply for sale. Our prudential and cautious policy concerning our pre-sales rate, as Véronique has said, before acquisition of the land, also allows us to limit our offer in project phase to 35%. That means 65% of our offer, we allow ourselves the possibility of reconfiguring the operation and changing our product mix as need be. We remain extremely vigilant, looking at operation by operation, a careful eye on time to market, which has always allowed us to limit our stock of completed homes to less than 100 units. Housing that is now available for sale in all of our Nexity agencies.
Lastly, to talk about the iconic operation that really shows our ability to do major urban regeneration deals. The first one you heard about, of course, some time ago, the Athletes' Village for the 2024 Olympic Village in Saint-Ouen. 19 buildings that are going to be used for the athletes' accommodation. After that, these will be housing units. They'll also be a nursery and stores and a very, there's very low-carbon concrete being used here. This inauguration of the Fives Cail Eco-District in Lille, 124 housing units, mixed using project. There is a wood pellet boiler room to heat this, and the architecture is very beautiful.
Now, to talk about commercial real estate development, we can say that the market is in a trough, in a low part of the cycle. In the first half of the year, investments were down by 51% in commercial real estate. H1, 2022, minus 51%. H1, 2023, minus 40%. In this context, intake, order intake is low, but we've signed some good references out of Paris, and in particular, this operation in Bordeaux. In terms of revenue, 2023, driven by iconic operations that we have in Greater Paris, and in other regions. In Greater Paris, we've got the La Garenne-Colombes, LGC, which will be half of the revenue for the year in this sector. Regional activities, the Belvédère deal in Bordeaux, represent a big proportion of our regional activities.
These two operations are truly remarkable in terms of their low carbon footprint, particularly the La Garenne-Colombes, the biggest geothermal operation in Europe. To talk about services activities, here, what we've observed is a slight dip, drop in revenue. This can be explained by a drop in distribution, which has to do with the low property development momentum, down some 30%. This is offset to some degree by service properties and operations. If we look at this services activity alone, it goes up 9%, taking into account a scope which includes operations and management, and that's remarkable. Operations activities see strong momentum, which we've already alluded to previously. Strong growth in co-working and student residents, where we can say that occupancy rates are above 97% as of end of June 2023.
Property management, offsetting a drop in deals, activities, and rental letting businesses, but that just represents 20% of management activities, so the slowdown is offset by stability in core businesses. Therefore, we can be pleased if we're looking at the scope of services activities, we can say that things have really stabilized. Performance actually stabilized during this half year period. Thank you. To talk about the half yearly results, 2023. We see this shows the robustness of Nexity in a deteriorated market. Over EUR 2 billion, EUR 2.04 billion in revenue, up 4%, which is an increase excluding international business, demonstrating like-for-like stability. We acquired something toward the end of the year. EUR 82 million in operating profit.
The margin rate is improving by around 2 points, thanks to some development business in the first half. Our debt is under control, EUR 900 million after the disposal of Polish subsidiary. WCR looking good after taxes. We'll talk about this later. Up 4%, reaching EUR 1.385 billion, and that's the figure for the first half. Change in revenue. Here we can see there are differences in the various business lines. Development, which is 80% of the group's total revenue. Residential revenue is slightly down by 1% due to a fall in number of deeds signed and postponement of some operations.
Commercial real estate revenue, on the other hand, was up, boosted, specifically by progress made on the La Garenne-Colombes program, representing around EUR 100 million in revenue in the first half. Services, representing 20% of total group revenue in the first half, posted a limited decline of 3%, but there are major differences between the various services activities. On the one hand, the distribution business, which is cyclical and exposed to the new homes market. On the other hand, recurring property management and service properties activities, which were driving growth. These are recurring. Excluding distribution, services revenue was up 9%. Operating profit from residential real estate in H1 stands at EUR 46 million.
The drop is due to decrease in revenues, as mentioned, and an increase in construction costs, weighing on a few projects under construction, as well as the slowdown in business and the dropout of projects. Commercial real estate operating profit rose very slightly, thanks to the contribution of La Garenne-Colombes, which is around 65% complete. Margin rates are back to more normal levels and include contingencies on LGC. Services accounted for more than 25% of the group's H1 pro-profit. This is recurring, and stable, and countercyclical. WCR pre-tax rose EUR 50 million in June. This is contained to 4% compared with historical figures, which normally put an increase in WCR in the neighborhood of 20% in the first half due to the seasonal nature of real estate development.
This clearly demonstrates our ability to control our supply for sale that we talked about previously. The following analysis can be made at June 30. No completed homes. WCR secured. Particularly, regarding receivables and the land bank is down due to all new commitments since the beginning of the year, and this will continue being improved by the end of the year. This means the group's net debt is contained as the end of June. Net debt reaching EUR 900 million, up some EUR 4 million. WCR being contained makes this possible to contain this, keep debt under control. The ratio is 2.5 x EBITDA, substantially below bank covenant limits. Gross debt contains mainly a fixed rate, debt 49%, limiting the group's exposure to rising interest rates.
At June 30, the average maturity of debt remained high at 2 years and 9 months, with an average cost of debt of 2.8%, given the weight, weighting of fixed rate debt taken out prior to the 2022 rate rises. In February 2023, the group renewed its corporate credit line for a period of 5 years with an enlarged banking pool and for an increase to amount EUR 800 million. Group's financial position, therefore, is very solid. Total cash and cash equivalents over EUR 1 billion, plus EUR 520 million in confirmed undrawn credit lines. To date, I'd also specify we have no significant maturities before March 2024.
By way of conclusion of what we heard, this was a good summary, I believe, of what we're doing, precisely, moving forward and preparing the medium and long term. Henceforth, we're a property operator that's a recognized, responsible operator. We at long last, got the green light from the SBTi on our carbon trajectory, 1.5 degrees. We're very pleased. If we look at the various competitions where we're active, it's very well seen that we're clearly committed to sustainable development, that enables us to be top ranking and often win out. In if we look at the first half, the building permits, we have an average are 25% higher than what's called for by the RE2020 regulatory requirements.
We're very determined to move in this direction, rolling all of this out, making sure that this helps boost revenue and the services help us sell the products that we are producing. We're very much committed to urban renewal, because definitely this is a buoyant future, promising market. We've reached a great deal here. We'll continue working in this area. It's a very important market. As I've said to you, we're not giving letting go of any production. A part of this will make it possible for us to once again, see a more flexible market. We're moving forward with various programs. Thank you one and all for listening to this presentation. Ladies and gentlemen, if you have any questions, please press star one.
If you have a question, please press star one. We have a first question.
Which is going to be asked now? Yes, good evening. If you can hear me, I'll ask my question, several brief questions. First, one on, when deals are abandoned, given up, could you give us some numbers here and tell us some of the costs involved when you have to give up some deals? Another question on the Carrefour deal. Could we get an order of magnitude, the potential revenue, possibly a range here and the timeline? A third question I have, I saw that you sold studio to AXA in Blaise-Romain , apparently significant figures. We didn't see it in the presentation. Could you possibly comment on this?
Lastly, could you talk to us about a net debt on EBITDA end of 2023, we can get an idea as to what the landing should be in our projections. Thank you. Pierre Henri will be fielding these. Hello, Emmanuel. Regarding the discontinued operations, I won't give you the exact number of projects that were halted in 2023. According to financial estimates, we felt the number discontinued would be similar to 2022. If you look at the new estimates that Véronique alluded to, we've had to increase these possibilities. They're possibilities. These are estimates, possible further discontinued operations in the second half. We're looking at this line by line, if any of the teams carefully look at this, that'll be for H2, and possible discontinuations, depending on the parameters of the various operations.
Carrefour, no, we can't give you revenue figures or margin or what have you. As you've seen, it's a significant deal, around 802,000 housing units, 800,000 square meters. It's quite significant, and it means a real step up in our urban renewal. In what Véronique talked to us about, we didn't have all these figures yet, of course, because we're working with Carrefour within a vehicle. Each of us will have our programs, and we'll be developing our various things and getting our permits and so forth. There'll be a recognition of potential backlog. We can consider, it'll start in 2024, and we'll start seeing some operations. Billy, we didn't talk about the divestment. We haven't given any figures on that, no specifics. There's land and operations.
We sold the land. We're not in any way involved in operations. To net debt, last point, no, we don't give guidance on net debt. You'll have understood tightening things up means we're working very hard on containing debt and ensuring liquidity. EUR 230 million, there's a reduction, continued reduction. We're keeping WCR in check. Tight management, tight navigation means we're sticking on track and keeping things in line. Our dividend policy, as Véronique said, it also goes in the same direction.
Okay, très clear.
Thank you. That was crystal clear. Thank you very much. We have another question from the Société Générale . You have the floor. Yes, hello, good evening. On the dividend point, I'd like to know what's the payout rate going to be? When you say the dividend will reflect the level of profits, can we assume that the payout rate might be fairly good, or might it be token payout? Next, for Edouard Denis. I'm wondering, for Edouard Denis, what's business activity looking like? Might there be an impairment of goodwill on that acquisition, which is fairly recent? Last question, regarding your guidance on current operating income, EUR 250 million, as I understand, this includes discontinued projects, more discontinuations than you expected originally. Are you also making any margin corrections in this? Last question, on commercial real estate, could you...
Tell us specifically, can we still think of EUR 400 million in revenue for fiscal 2023? What will the level be in 2024? I suspect you've already got a good visibility now, particularly with La Garenne Colombes. Thank you. Very answers. Regarding the dividend, we'll see. Nexity's dividend policy has always been to give a good return to shareholders to the utmost of our ability. We will see toward the end of the year. That's all I can say at this juncture. On Edouard Denis, we've got a new president there. Top quality in various areas, including distribution. There's a shared area there. Broadly, they adhere to the same reservation trends that we do. No concerns.
We need to have no concerns whatsoever with Edouard Denis. We're counting on the multi-brand strategy to continue winning market shares in cities and to continue developing our various operations.
Maryline, bonjour. Now, on operating income, EUR 250 million, initial forecast was EUR 300 million. We took into account the change in the client mix. At present, these new forecasts include the, take into account the decline in sales from EUR 4.5 billion to EUR 4.3 billion, due to a slow conversion of reservations of bookings or postponements of operations. We have a one-off decline in the budget on works cost, project costs. This is due to market conditions and lower development commitment. In our operations, we have emphasized, we have planned for possible discontinuation of operations in the second half. For commercial real estate, we can confirm the forecast for sales.
La Garenne Colombes will contribute EUR 200 million in 2023 and EUR 200 million in 2024. We can confirm that. Thank you very much.
Thank you.
If you have a question, ladies and gentlemen, please press Star, followed by 1. Next question from Laurent Guilbert from BNP Exane. Good evening, everybody. Laurent Guilbert. Several questions. First of all, on the market, do we have an idea of the level of purchases to which the various subsidized housing operators have committed? Do we have an indication on the time span to which they have committed? We can't hear you well at all. Very poor sound. First question was, what is the volume commitment of subsidized housing operators and over what time span? On the cost-cutting plan, that's the second question, can you give some figures on this, the impact this year? What will it be on a full year basis?
Next, what is the leverage of that you can tolerate over EBITDA? Can you tell us a little bit more about Carrefour? One of the problems is purchasing power. We understand that, and very high land costs. Are the prices for the Carrefour project commensurate with the potential selling price? On subsidized housing, subsidized They are going to buy up to EUR 50,000, and we have EUR 17,000 on the other hand. I think that part of what's going to happen there will be very much dependent. When we came out of CNR, we had some cities which would be the institutional investors could buy as an intermediate housing project. We're talking about maybe EUR 200,000.
We're just waiting for the decree to be published. I think it's going to depend on the purchasing capacity of these investors in those cities where we have a presence. Regarding cost cutting, to give you some idea, to date, this stands at EUR 30 million. How much cost cutting overall, the total? This is half year. We've made good progress, it's about half of... further EUR 13 million next year. On the maximum leverage that we allow for, we're going to be very clear here. It's the banking covenants, stand at 3.5. The calculation method for the debt ratio over bank covenants is done under IFRS standards, that means lower debt than operating income reported.
The ratio, 30th of June, stands at 2.1, so we're very far from the limit set by our lenders. We set a limit that's less than the maximum, and we're far removed from it. Navigating tightly means that we stick to that. I would add to what Pierre-Henri has said, for the time being, the issue of control of our debt load and control of our cash flow is an absolute priority. We have a maximum limit, and we are seeking to contain as best we can our debt load. I think that we've proved that we are in control of the situation. We've said last year, we're selling our international business. As you can see, this is what we're doing.
Last year, we said we'll close the land bank. We've done that. It takes time. It's not immediate, but we're in the process of doing so. All of the company's efforts are aimed at reducing the debt load, and opportunities are going to emerge, and we want to be in a position to be able to exploit these opportunities which will occur in the recovery. On Carrefour, we've looking at the results of this transaction, I disagree very slightly because indeed, I continue to believe that we are going to have to look for an improvement in the production costs of housing units in modular units.
We're going to look for lower cost of 4%, and we're going to have to respond across the whole spectrum on all the parameters that are part of the cost of building a housing unit. Including our cutting our own costs and overheads in order to be able to secure a good price for the cost of housing. Last question on the market. Do you think this is a floor? We're reaching a floor here? How do you see 2024 in terms of the number of units? Well, it's still a bit early to say. Many things can change in the intervening time.
I'm not able, nor is anybody else, by the way, to give you any idea on the number of reservations. Quite frankly, I don't think 2024 is going to be much better. It depends on how on the trend in interest rates, on whether the government fulfills its commitments. I'm not in a position yet to give you any specific indication on the level, expected level of bookings in 2024, quite frankly. Okay. Thank you. No further questions. Over to you. Well, thank you all very much. Thank you for bearing this with us, because I think that we've had some pro technical problems with the webcast, and thanks for bearing with us and staying with us until the end. Feel free to ask any questions.
Come back, if you have questions, if anything appears unclear. All of us, each and every one of us, around the table is ready to answer your questions. Enjoy the evening. Thank you very much. Thank you very much. You may now, hang up. Thank you all very much.