Welcome to the presentation of Nexity's annual results for 2021. My name is Nicole, and I'm your coordinator today. During your call, you are in audio mode only. You'll have an opportunity to ask questions at the end of the call. Please press star one on your keyboard to record your question. If you need assistance, please press star zero and you will talk to an operator. Now, I would like to hand over to Véronique Bédague, who will start today's conference. Thank you.
Good evening, everyone. Thank you for being with us. My name is Véronique Bédague, CEO of Nexity. Around the table with me to comment on our figures, we have Jean-Claude Bassien, Hélène Romano. Jean-Claude Bassien is Deputy CEO. Hélène Romano is Vice President of Nexity's Residential Real Estate division. Nadia Ben Salem-Nicolas is Deputy CEO in charge of finance.
Not forgetting Géraldine and others. If it's all right with you, we would like to offer our comments on the deck of slides, which we will display. If it's okay, we will take your questions at the end of this presentation. You received the press release. The company's performance in 2021 is hitting an all-time high. Excellent commercial performance. 21,000 units have been reserved up from 2020. The order intake in commercial real estate comes to EUR 421 million. Our development pipeline represents five years of revenue over the next few years, but I'll get back to that. In terms of our financial performance, our revenue is up by 5% relative to 2020 and comes to EUR 4.6 billion. Our current operating profit stands at EUR 371 million.
The margin rate is 8%. As you can see, we are gradually increasing our margin rate. Our net profit group share is EUR 325 million. I'll get back to that in a minute. How do we interpret those figures? The first belief that we have is that at the end of the day, those figures prove how strong Nexity is. Our model as an integrated real estate operator model is very, very strong. What is our main feature? Over the past three years, we have weathered the crisis while maintaining a relatively stable level of reservations in 2019, 2020, and 2021, around 21,000 reservations or bookings.
Despite COVID, as you can see, the curve underneath the market figures came to 167,000 in 2019, dropped down to 134,000 in 2020, and gradually went back up, reaching 145,000 units. We have remained extremely stable in terms of our level of reservations, and this proves how powerful our model is in terms of marketing our distribution efforts. Secondly, another second aspect, our pipeline is very high. In terms of revenue, this gives us a security blanket. Let me say a few words about that. Our pipeline is structured in a way that by and large, we are pretty resilient vis-à-vis inflation, obviously, assuming inflation remains moderate. There are upsides. Let's first talk about our backlog. It's worth four years of revenue.
At the end of the day, this includes all of the revenues that come from operations that we started. For those operations that we did start, obviously these sales prices have been set because the housing units have been either reserved or the deeds of property have been signed. By and large, when it comes to the backlog, we're talking two years worth of revenue. We have proper control over our operating margin and as well as our current operating profit. Our potential is worth 4-4.5 years of revenue. We have the promises in hand. Out of 30% or 40% of the total sales price, we have a price that is set. We're still careful when it comes to our balance sheet and how we anticipate future increases in housing unit prices.
There are obviously, contingencies, things we can't predict. If there's inflation, we may have an upside, regarding the potential business. The last point that is really interesting, and this is the result of our services platform. Because of this platform, we are able to capture new demand that rose post-COVID. + 11% in services, of course, we've been able to capture the increase in transactions and, rentals last year post-COVID. As Jean-Claude will explain later, we've also been able to capture that demand that's coming in, on the coworking side. Now Morning's performance is very good. Now, the graph shows how robust our model is as a real estate operator. Second, way in which we can interpret the figures, and this truly reflects the, completion of our strategic review.
I'm sure that you're familiar with this. We divested an activity that wasn't part of our core business. As far as CENTURY 21, for example, there were no synergies with the rest of the group, so we decided to refocus our efforts in France. I firmly believe that there's a lot of movement we can anticipate in France, and this is a country that we know in and out. By definition, it's better to focus our development efforts in France, and we stopped our development efforts in Germany, for example. The bottom line is, well, you can see it on the right-hand side. Net debt has been brought down to EUR 598 million, so 1.5x EBITDA versus 2.3x at the end of 2019, and 1.9x at the end of 2020.
Net debt is down strongly, and we are coming out of the crisis stronger. 2021 has been a year during which we worked on a number of different issues. Obviously, Nexity is a benchmark partner, a preferred partner for our local and regional authorities. The main challenge for property developers is to obtain building permits, and we stand as their partner, as a partner of local and regional authorities. But there are other feathers in our cap. Now, we have a comprehensive national coverage. I know it's a small map, but it does show you where we operate, both in terms of services, in terms of property development, over 400 locations. Nexity also includes agencies in downtown areas and also in more urban areas. We cover the entire country. There's always a Nexity representative wherever you look.
It's really important in terms of our dialogue with local and regional authorities. We are ahead of the pack when it comes to low carbon cities. Building is something that needs to be rehabilitated. The fact that we have that leadership, let's remind you that once again this year, we are the leading low carbon property developer. Via our services, we have a strong footprint. Nexity Property Management is in the lead. We also focus on our 60 or so different completed projects for energy efficiency refurbishment. Thanks to our team, we have 300 projects in hand. We have a very strong presence in terms of low carbon building developments. We also have a unique commitment when it comes to inclusive cities. It's really important in terms of my dialogue with mayors.
It doesn't matter what their political persuasion is. We have a strong presence vis-à-vis social housing operators. We're working with foundations on youth aspects, and this is something that mayors like very much. This is something that Nexity introduced. I'm sure you remember that. We are building in cities where there is such demand. The housing projects include 20 housing units, and usually we have large agreements with organizations such as Emmaüs. Fourteen such projects will start this year, so 1,200 housing units, nonprofit style by 2024, 2025. Mayors love it. It shows our ability to stand alongside them and support them as they build the cities of the future.
This is an important priority for us, for me specifically, and this is an entry point for us when it comes to obtaining building permits. The second aspect that we worked on really hard last year, customer relationship quality thereof. See, in the Les Echos financial newspaper, we were ranked 99th in 2019, and now it is a remontada. We are number 7th in that ranking, which rates the customer relationship quality. Here's another example. Customers feel very frustrated when they have to choose these services related to the apartment. They like to go back, they like to enjoy it longer, but it's not always possible. We set up a tool last year called Inside. It's not Zuckerberg's Metaverse, but almost.
It's a 3-D recreation of the apartment, and you get to walk around, and you can change the surfaces, the linoleum or the tiling and whatnot, and your estimate will be adjusted as a result. We came up with this project last year, and clients love it. We're increasing activation of synergies across businesses over the past three years. As soon as we discontinue property development efforts, obviously, we promote our work as a condominium manager and also land synergies. That's something I discussed last year. It is very important for the entire company, including services, which have a high local and regional presence, and they know this job inside and out. It's important for them to share tips with property development. We signed agreements for 26 different land plots in 2021.
This is really important because we expand our land bank. Also, our corporate culture is designed to maintain stability despite the fluctuations on the market. An important aspect is that our staff, our employees are shareholders within the company. Let me say that it really impacts the level of commitment and engagement around our strategy. Also, AG2R La Mondiale is now a shareholder to the tune of 5%.
Last year, we were also the best place to work, which represents how fun it is and how nice it is to work with Nexity and shows the level of engagement we have from our employees. Also we're an ever-learning company. We're a company that works in a world that evolves and changes extremely quickly, and it means that we need to be able to keep up with that rate of change, sometimes even surpass it. The company needs to learn as we move forward, and we opened two centers to train young people in our businesses, either for property development or sales, which are the two training mechanisms that we created. I'd now like to give the floor to Hélène Romano to tell us about business activity for real estate, for residential homes.
Thank you very much, and good evening, everyone. The new home market is still underserved. 145,000 roughly units in 2021, which is up 8% over the previous year, 2020. 2020 being a more than 20% drop-off in turn versus the previous year. We're not yet back to the high in 2017, 18 and 19, which is about 168,000 units. Market is still buoyant thanks to strong demand, demographic factors, an increase in the number of home buyers in each region around France. I'd like to give you an idea. The size of each family has gone from 2.6 to 2.2 on average in 2020 versus a couple of decades ago, and single-parent homes is up from the 1990s and 27% to more than 30% today.
Institutional investors, social housing players and non-social housing players, and also individuals has increased. There will be further tax advantages up until 2024, people wanting to use the low interest rates and seen as a solid investment as well. However, the increase in the rate of building permits has been slow. Family's ability to fund themselves has gone down, and also the tax burden has remained high. The market has shown its ability to adapt. The market is not yet up to where it was, down 2.3% year-on-year.
Despite the slow bounce back of the building permit rate, this graph shows you that the bottom of the trough at 227,000 authorizations for new homes in December 2021 was back to 259,200 authorized new builds, which is still down 3% versus the same month in 2019, which was already a drop because of local elections occurring in France. We have put in a number of requests in 2020, which means that in 2021 we were able to obtain more than 9% more building permits than we did in 2019, and we're currently preparing 2x as many requests for building permits. Our sales offering has increased 7,655 lots. In the very near months, we should push into the 2019 levels.
Nexity has proven its ability to adapt to demand as well. Demand has remained robust for block sales and also individual sales. Retail sales accounted for 55% of our 20,838 reservations in 2021. Up 11% in volume. Thanks to the favorable credit conditions, the rates are still low, which means that people have a better ability to save money, and also those tax advantages have been extended. Bulk sales account for 45% of our reservations. That is down 13% in value because of base effects due to last year with the CDC Habitat sales. I'd like to remind you that we had about 5,000 reservations in 2020, which were freely financed. Social housing operators account for 29% of the overall mix, which is a little bit higher than 2020.
This is because of delays in the reservations that should have been signed in 2020. The social operators pushed those back into 2021 in many cases. Solid business activity overall. This is something that we've seen over the last three years, about 21,000 reservations each year, an increase of 1% in the new scope without Ægide, and a drop of 3% in value. This is due to a change in the mix, EUR 4.315 billion. This is due to the change in mix on the geographical side with a strong increase in the outside of Paris regions, which is up 3%. The number of bulk sales share in the mix has changed, coming back stronger in 2021.
With the increased presence of the social operators, our prices have also gone up. The average price per sq m in Greater Paris region is up 2%, and in the regions up 3%. Our residential pipeline provides us with good visibility moving forward. A backlog at EUR 5.6 billion. Our backlog is our reservations. What is signed, the contracts that are signed, which are then booked in our accounts. This accounts for about 2% of revenue overall in our backlog. Our pipeline also has EUR 12.3 billion, about four years worth of revenue, which is what we call business potential, so all of the non-signed contracts and the current offering. We have products that match new usages and expectations. It's something that's very important for us with two major trends visible here.
We're building a city on the city, what we know as rehabilitation transformation. We have an example for you right here, where a public parking lot right in the center of Paris, in the fourth arrondissement, has been turned into a residential building and also a Cinéspire, which is a sporting venue. We've included nature in all of our builds through green roofing, which are shared gardens. We also have some floor level garden spaces, especially when we have underground car parking spaces, which can be about 60% in the center of the city. We also have greater capacity to respect and conserve nature as we build new buildings, as we've been able to do in Châtillon, where we were able to build around some large trees. Giving the floor now to Jean-Claude Bassien.
Thank you very much. First of all, I'd like to tell you about commercial real estate. As you know, we've experienced a significant shock because of COVID over the last years. We're currently at the lowest point of the cycle. Investment from institutional investors is down 11% year-on-year. This begs the question, what might trigger further investment in that market? Investors seem to be holding back, waiting for two things. First of all, they're waiting to see how the dynamic for demand for new office space is going to occur once remote working has been sorted out. Then they're waiting to see what changes happen in the supply on the market because they're interested in investing in assets that are compliant with any low carbon requirements.
That being said, on demand side, we are seeing a slight uptick in 2021 with a base effect which is very low because remember, 2020 was the lowest point for demand at 1.4 million sq m. In 2021, we're at 1.8 million sq m of demand, which is up 38%. However, if you compare this over a long-term average over 10 years, we're still down about 20%. The strong takeaway from this is that the market is highly fragmented. It's a two-tier market. There's a premium on centrality, which means that in the Greater Paris region, the contracts that are being won are for La Défense and QCA, and it's the big city municipalities. The rest of France seems to be losing out. Basically, the segments that I just underlined are either back to their pre-COVID levels.
For the La Défense region, which is the Paris business district. Development for companies, as you can see in the picture in the middle on slide 19, we have sales performance, which has been highly satisfactory. If you exclude La Garenne-Colombes, which was an exceptional item, we have no reason to be ashamed. Given that there's a lot of expectations for our investors, they're holding back, waiting, and not opening the taps. That means that we're convinced that our new orders will be down versus 2021, and we're waiting for better days. We're ready for those better days. This is because with our service platform approach, we've been able to implement two things.
First of all, we've been able to rework the way we do office buildings by integrating and preparing for low carbon requirements and also, being able to provide flexibility of use to the users. In the same setup, we also have the property developers working with the service teams who also have the expertise in usage of buildings and also in the way they do interior design. If you take a look at slide 20, you can see an illustration of exactly what we can do. I'm only gonna comment two of these pictures, the one on the left and the one on the right. On the left, you can see Nice Meridia. This was delivered two years ago, and this goes to show that for a number of years now, we've been part of the low carbon trend.
For this building, we basically got any award under the sun for low carbon buildings. On the right, you can see what we just delivered. This was the former RTL building in Paris that you may or may not know if you live here. 22 Rue Bayard. This is an emblematic building because this is in the true center of Paris, and this is a renovation with a wood frame build. This is preparing for the investment that's gonna come in the near future. If I may, I'd now like to move on to our services business line. When it comes to services, as Véronique said as part of her introduction, we have indeed seen a bounce back at +11%. On management, distribution, and service properties, they're all up.
The one that's lagging behind for growth rate is property management, and that means that we need to look closely at property management and also understand it in the context of the base effect. The ADB, Administration de Biens, showed a strong resilience for homeowner associations and also rental management associations. We're number two in that market. These areas were not particularly impacted by the lockdown measures, so were highly resilient, as I said. This should be understood as not having had a particular drop-off during COVID. Secondly, in this scope, the high performance were rentals and transactions up 11%. However, these business lines only account for 25% of the overall ADB business. On property management, I'd also like to tell you that we have shifted ADB in property management. ADB is where we're second.
Property management, we have 20,000 sq m under management. The ADB, this should be understood as a customer-facing, service-oriented, customer-oriented approach. For property management, operational efficiency, so that we can be more effective in the way we handle the assets that we have under management, be more efficient at all levels. We're starting to see the reorganization bear fruit with some new contracts. Property management was able to renew this year with their major client for a further 5.5 years, and this is thanks to progress that has been shown in the way they manage things. We also have Accessite, which is an e-commerce player, which was renewed for the same reasons. Two out of the three major clients had their contracts renewed. Clearly, what we've been doing has been noticed by the clients.
Now in terms of service properties. Here, these are activities under Studéa for student residences and Morning for coworking spaces. The main takeaway here is that we are back to pre-COVID business levels. At Studéa, we're seeing its revenue increased by 6%. The average occupancy rate over the year is 93%, nine-three. We opened up four new residences at the end of the year. It went back to a spot occupancy rate that is very close to what it used to be. Morning is increasing revenue by 60%. Morning is a coworking market champion. We're capturing the attention of customers, and I'll explain to you how. The average occupancy rate over the full year is 83%. At the end of December, now for mature spaces, over one year, we had gone back to 99% occupancy rate.
Clearly, we're seeing a strong ramp-up. We're seeing this in the customer mix of Morning. They used to cater to start-up companies, and now they account for 1/3 of the mix, scale ups 1/3, and key accounts the remaining third. The key accounts such as L'Oréal, Altran, et cetera account for 33% of the customer mix. A very attractive business. The third business is distribution with iSelection and PERL. Excellent sales performance. Obviously, this ties in with the market momentum and investor appetite, individual investors and their appetite for our business. I do think that we're capturing a little more than our share because of our ability to generate volumes with key accounts and key players such as banks, et cetera.
Also, we have successfully revived our PERL offering, and I think that very soon we will regain our leadership on the market. I would like to wrap up with two different slides that you can see on the screen. First of all, individual customers and then companies. I'm not going to comment every single line on this slide, but just an example of how our service platform is active. Now, activating this platform isn't just about delivering our different services in terms of rental management or condominium management, one after the other. No, what we are trying to do is monetize our customer base. There's 1 million customers that we can potentially reach. What we're trying to do is generate repeat business with those customers. In order to do that, we follow a traditional pattern.
Many other players have experimented with that in retail and even in the luxury sector. You need to know your customer. Know your customer and then customer segmentation. You need to provide specific offers for each customer profile. You need to create a digital journey per customer. You need to monetize, create, repeat business through suitable service-oriented offerings. The process is well underway, and the figures you can see on the screen exemplify our ability to get the job done. For example, the penetration rate is 75% when it comes to insurance coverage, particularly for comprehensive insurance for buildings. 50% when it comes to insurance coverage for rent default coverage.
As far as commercial clients is all concerned, as far as Morning is concerned, clearly the key aspect is the mixture of property development on the one hand and services on the other. That way, we're able to promote. We have the only integrated services platform on the market. It's ours, and we combine consulting, development, space planning, property management, service properties. You name it's all there in our one-stop-shop. This begs the question, that's all well and good, but is there an impact? Here are a few concrete examples of what we're already doing and the results we are garnering. First example, as you know, we recently won the bid for Confluence in Lyon. 35,000 sq m.
We never would've gotten the contract if we hadn't been able to combine all those skills: advisory, development, space planning, co-working, property management. That's what made the difference. That's why the jury picked us. We had the right platform, and we were better than the competition, and we prevailed. Secondly, the new building that we recently delivered in Asnières, this is a wood-frame building, and the interior design follows the look and feel of co-working spaces. Because of that, this building is seen as a success story and serves as an example for future buildings. NPM is in charge of property management. Cherry on top. As you can see, we're pretty busy.
Thank you very much. Jean-Claude. Let's now welcome Nadia Ben Salem-Nicolas, Deputy CEO in charge of finance.
Now, financial results. Let me say a few words, by way of introduction.
In 2021, the financial performance in Nexity was very good, higher than 2020, obviously, but also higher than 2019. We, in 2021, exceeded, reached or exceeded all of our objectives in terms of revenue, operating margin, leverage ratio, et cetera. Revenue, excluding divested companies, came to EUR 4.6 billion, which is 5% over the annual guidance, which is the EUR 4.4 billion. The recurring operating income is EUR 371 million on a like-for-like scope basis, also higher than the guidance, EUR 360 million. The recurring operating margin is in line with our objectives. Again, we are exemplifying our ability to deliver on our commitments. Now I'd like to review the financials. Let me start with the income statement. Revenue on reported basis, EUR 4.3 billion. Whether or not we...
You need to bear in mind the EUR 211 million. The divested businesses have to be factored out. Now, the recurring operating income comes to EUR 528 million. This is pretty much double the level in 2019. It breaks down as follows. First, the new scope recurring operating profit, which is 32% higher than in 2020. This is a margin of 8%. Up several basis points relative to last year. The non-current operating profit of EUR 157 million, this is due to the refocus. Two main aspects, capital gains from disposals. We need to factor in CENTURY 21 and also the goodwill from Pantera AG, EUR 65 million. Bearing in mind the decision that was made to stop property work in Germany.
We decided to focus on France solely, as Véronique said. Financial result is stable, EUR 87 million. Tax is up because our tax base is higher, and this means an effective tax rate of 31%. Lastly, the net income group share is EUR 325 million, which is 3x the 2020 level and double the 2019 level. When we restate for non-recurring aspects, it's EUR 188 million, so up 40% relative to 2020, and 5% relative to 2019. This means EPS of EUR 5.9 per share, EUR 3.4 per share on the new scope, which is an historical high, as the press release says. Now, in terms of revenue, slide 28.
On a published basis, our revenue, as you can see on the left-hand side, is EUR 4.8 billion, which is stable relative to 2020 because organic growth of the new scope, which accounts for 5% growth, is offset by the deconsolidation of the revenue of the divested businesses. On the right-hand side, you have the new scope revenue, so EUR 4.6 billion, a 5% increase over last year, and 15% increase over 2019. Things are very different between the different business lines. 2020 was an unusual year. First of all, we have to factor in COVID, and housing starts shut down completely for two months. Then the exceptional order intake with La Garenne-Colombes, which is about EUR 1 billion, and that happened in H2.
A growth of EUR 200 million, and this is mostly driven by strong growth in residential property, up 19%, so up EUR 520 million and a EUR 300 million catch-up effect due to COVID, and EUR 220 million in embedded growth. We're also seeing very strong growth in services, up 11%. Jean-Claude mentioned that a good momentum in our three different business lines. Conversely, revenue for commercial business is down 45% relative to 2020, - EUR 400 million, because in 2020 there was a contribution of EUR 370 million. I'd like to remind you of that project, La Garenne-Colombes. Except for that exceptional item, we would have ended up with 7%. Good growth in revenue in 2021.
However, it's not a rebound exactly, because as Véronique rightly said, Nexity did not experience a dip in 2020, contrary to the rest of the market. Now, slide 21, operating profit. Current operating profit is reaching a historic high, EUR 371 million, which is mostly driven by residential property development, as well as services. The operating margin is 8% on the right-hand side of the slide. Going back to pre-COVID levels pretty much. We're seeing improvement across the board. Now, in terms of residential, the operating margin rate is up 100 basis points. It's getting back to the 2019 level, and this shows how able we are to preserve profitability in residential.
Now, there's inflation, and there's been COVID, but neither factors had a major impact on our margins in 2021 because we've been able to secure margin as soon as the projects enter the backlog. Order intake this year will serve as inventory for the next three years. The conditions are close to what we used to experience. We have proper visibility, and we will see. This helps us secure future margins for future residential projects. Now, international accounts for less than 2% of property development, but this will have no negative impact on our financials in 2022. Now, in terms of commercial real estate, you can see the margin rate, which is close to our normative rate in considering the short-term prospects. This, we're hitting the low points of the cycle.
This operating margin rate is expected to get back to less than 10%, and revenue is also expected to go down. Services show a 440 basis point increase thanks to a conjunction of factors. As Jean-Claude Bassien was saying, there's a better pooling of resources, increased digitization of our business, better occupancy rates, strong sales activities in distribution. This improvement is expected to continue in 2022. Now, the balance sheet. This is an overview. Slide 30. Our balance sheet is strong. Equity has been strengthened, up by EUR 200 million relative to 2020, coming to almost EUR 2 billion. Total net debt is EUR 1.224 billion, with a 50-50 split between lease liabilities, IFRS 16 lease liabilities and net financial debt, which accounts for 30% of equity.
Lastly, WCR is under control at EUR 1 billion. When it comes to the working capital requirements, slide 31, please. WCR is increasing by EUR 437 million relative to 2020. It is important to look at the momentum of the past three years segment by segment. You need to understand that this increase actually reflects, and this is something that we already mentioned when we presented the results in June. The commercial property WCR is actually negative, less than EUR 167 million at the end of 2020, because investors made advance payments for certain projects. When you restate it, you see that WCR has been stable for three years, and this is mostly due to our residential property management.
WCR is EUR 1 billion, accounting for 18% of the backlog, and this is in line with our historical levels for those business lines.
Looking at WCR, this includes our commitments to the land bank at EUR 280 million there at the end of December, up EUR 100 million versus 2020 and up EUR 160 million versus 2019. It's fair to say that WCR is fully under control, and over the last three years, this has enabled us to increase our land bank holdings without overhauling our financial structure and maintaining the Nexity asset light model. Regarding net debt, you can find this on slide 32. It went down in 2021 in absolute value and also as a leverage ratio, and this is due to the effects that we're explaining on this slide. This is, of course, financial debt before rental outstandings. Starting at net debt, EUR 655 million, 1.9 x EBITDA.
The strategic review enabled us to draw that down by about EUR 400 million, as we explained on the 30th of June. You can see this in the green with EUR 105 million, which is the reclassification according to IFRS 16. The dividend share buyout programs for about EUR 130 million. Organic growth for the rest of Nexity in this purple block that you can see on the slide contributed paradoxically to increase the net debt by EUR 180 million, and this was due to the exceptionally high operating WCR requirement for the year that I just mentioned. EUR 131 million, excuse me, that was the share buybacks paid out as part of dividend.
The share buyback program, sorry, and the dividend program, and our ESG impact program from December last year, which cost us EUR 20 million. This brings the debt to just under EUR 600 million in a leverage ratio of 1.5 x EBITDA. Three main factors, finishing the strategic review, an increase in operating revenue and EBITDA, and proper control of WCR beyond the mechanical effect of payments. As you can see, it's good to have certainty in a world full of uncertainties. Moving on to slide 33, this is our financial structure with a solid liquidity at the end of the year. Well, more than EUR 1 billion of cash with undrawn credit lines for EUR 600 million. The cost of financing was further strengthened this year with an OCEANE for EUR 240 million in late April.
This has enabled us to push out to 2028, a EUR 140 million debt, and therefore to increase the average maturity for the debt to more than three years with low repayments in the coming three years, as you can see on the bar chart. To wrap up on this, just a quick point on the cash flow statement. This is self-financing before tax. This is the first line, EUR 541 million. This is before interest and tax expenses. After rent, this is EUR 358 million, up 12% versus the previous year. Despite this increase, the cash flow for the year is - EUR 109 million. This is due to WCR effects between 2021 and 2020. 2020 was extremely low and had the opposite effect last year.
The two-year average for free cash flow is EUR 170 million. This is a figure that's probably more representative of our cash free cash flow generation capacity at Nexity. At the end, you can see free cash flow due to financial investment, EUR 191 million there. This mainly includes what we got from the divestment of Ægide and CENTURY 21, offset by dividend payments, share buybacks, and financing throughout the financial year for EUR 172 million during the financial year. I'd now like to give the floor back to Véronique to wrap up on the outlook.
Just to quickly wrap up, the good news for 2022, if we look forward, is that we are starting to see the light at the end of the tunnel after COVID. Putting aside the Ukraine tensions right now, we're expecting to be back to business more as usual, with the main challenges being construction costs and inflation.
Assets moving forward is the strength of demand on the property market in 2022. As you know, for a long time now, we've been building less than what's needed. There are 2 million people who are going to be buying homes in the next years. There are 4 million people who don't have proper homes, 1.7 million people who are looking for social housing. The trend for cohabitation is increasing. Very strong underlying demand. Last year, demand was also strong due to individual families. There's still a question mark over their ability to access loans in the coming year, given the financial stability situation and the financial market changes, but that demand is still there right now. We are seeing institutional investors that have a high appetite and that are not actually finding the supply to meet their demand.
We firmly believe that no matter what happens, housing is now part of the presidential campaign and therefore will be a political issue for the next president who will help express demand. Another reason for optimism, although measured, we are seeing supply starting to go up with building permits that are starting to come out of the door. It seems to me that the observable trends right now are going to continue and accelerate, such as the service industry. Everyone who owns service office space is gonna have to reduce their carbon emissions and reduce their energy consumption. There's also the Climate and Resilience Law in France, which prohibits by 2025 renting out apartments that have poor energy performance. I think we're going to see shifts that we have a good position to leverage thanks to our service business.
As you already heard, demand from the commercial side is going to stabilize at a level that remains to be determined, but we're definitely going to see things shifting in the future. What we've been saying since earlier is that our results for 2021 enable us to set the dividend to +25%, which is a significant uptick, EUR 2.5 per share after two years of public health crisis, where the dividend was down at EUR 2 per share. When it comes to guidance, the targets that we've set ourselves is to try to get above 14% market share. We're continuing to increase our market share. This is in a business environment that we believe is still growing slowly, 140,000 to 150,000 lots, and it's difficult to get contracts.
It's a long process right now. Operating margin should be around 8% and recurring operating profit at least EUR 380 million. Of course, we'll be seeing you all potentially at the end of April, 28th of April, for an investor day. As I'm sure you've gathered, we are coming strong out of this crisis. We've been able to show our resilience. We have increased our agility. We'll be getting back to you with a strategic plan that will enable us to lockstep with the upcoming growth cycle. We're still hashing out the details. The technical nature of low carbon, the technical nature of the cost of labor and the advantages related to size means that the size of Nexity will be a significant asset as we move into that coming growth cycle.
The strategy that we're going to be pitching to you will not be revolutionary. It won't be reinventing the wheel. It will be the next step in what we've already done. We've already explained how it's working well. We're going to go further along that line, and we're going to try and get ever closer to what our customers need and want as we move into, once again, that growth cycle that's upcoming. That's what we had to share with you this evening, and I think that now we can give the floor back over to you for any questions that you may have to ask us.
If you wish to ask a question or to say something, please press star one on your handset. I will warn you when you can ask your question. Pierre Cuiral from Kepler. Good evening.
Thank you very much for taking my question. I have three of them, in fact. I'll ask them one by one. The first question is on guidance. On that 8% operating margin that you're expecting to see in 2022, can you give us an idea of the main hypotheses underlying that guidance, including the construction cost increases and inflation? Is it going to be offset by anything? And if so, what?
This is Nadia Ben Salem-Nicolas. On to you. I believe your question is what is the underlying logic related to cost of construction behind that 8% figure.
Given the current state of the market, we are expecting overall an increase in construction costs for 2022, which should be at around 4%, between 3%-5%. I would like to remind you that build costs at Nexity in our property development segment account for about 50% of the overall cost of a project. 50% of that comes from building materials, then 50% for the cost of labor. We believe that the overall impact on Nexity in 2022 should be relatively low, the impact of the construction cost that is. We are confident in being able to keep our current operating margin as we've said in our guidance, because for ongoing projects, and I would remind you of this once again, the costs are already set.
The lot cost, the sale cost, and also the work cost is already set in stone, which means that's not going to be impacted by a change in build costs. Then for the future contract, we have some things that we haven't yet brought to market, which means that we'll be able to tweak the sale price. As Hélène said, there have been increases in prices, + 3% per sq m in Greater Paris and + 2% outside of Paris. In some cases, we're even able to renegotiate the price of real estate and the terrain. These are the observations in our model that means that we're confident in giving the 8% guidance.
Thank you very much. My second question is on working capital and expected debt moving into 2022. Could you give us some more information, maybe drill down into the increase in working capital requirements and the debt changes? Are we expecting a big increase in debt?
Well, if we take a step back, without getting into 2022 just yet, as we've always said in the medium term, so beyond 2022, and in line with what we said in the past and with our banking covenants, we are happy with 2.523x EBITDA for the leverage ratio. As you observed, we are now at a historically low level, 1.5x EBITDA, which is a very comfortable level for us, which means that we can look forward to being adaptable in the future. But we still want to keep the leverage ratio below 2% in 2022, unless some huge opportunity were to present itself, which might have us push above that 2%.
I think that in 2022, our debt is going to stay below that 2.5, that 2x EBITDA, sorry.
Okay.
EUR 350 million increase in debt. Well, much less. In any case, what I can tell you, however, is that, the current consensus, the figures that I have seen in terms of debt for 2022, which came as high as EUR 1 billion at times, we think this is the maximum level. That's assuming there are amazing property opportunities out there. Now, the traditional WCR is deteriorating. We're familiar with that. The land bank is at EUR 280 million, which is pretty good already. There's rotation. I don't think that we need to fear a deterioration in our debt situation.
Thank you. That's very clear.
By and large, between the 2021 level and the maximum level of EUR 1 billion, we should be close enough to home.
Okay. Now, in terms of your strategic review, you're pulling out of Germany altogether? No more property development projects in Germany?
I'll tell you what. Let me try and explain further. We're not announcing a shutdown of our business internationally, no. We are managing things differently.
Mm-hmm.
We are limiting our equity investments so we can develop further projects internationally. You got to understand that these are countries where property development rather burns more cash, uses more capital than in France. That's what I can tell you. We are pulling out of the development business in Germany. There's gonna be no new business, no new projects. We're not expecting any losses from that discontinuation in future fiscal years.
Thank you. That's clear. Now, sorry, the question is unpleasant, but this is the second roundabout we're seeing over the past two years. This is second time you've changed course. Is this a test and learn strategy? See if it works and then continue, or what's the situation?
Sorry for getting back to Germany. I can't say whether or not this is a strategic roundabout. I mean, are we changing course? We took over Pantera just before COVID hit. The lockdown began on March fifteenth, which made it difficult to bring in this company. Then the health crisis lasted a long time, and this caused a deterioration in the German economic circumstances, which became less buoyant when it comes to serviced residences and short-term leases, which was the core business of Pantera, and this meant a lower occupancy rate. It's not a strategic course change. No, we made an acquisition in a market that was hit hard by COVID.
Number two, as Véronique correctly said, we firmly believe that we need to shift our business stance in France because competition is fierce over land, and also we need to refocus on our core business and providing assistance to local and regional authorities, building the city on top of the city instead of urban sprawl. This is a mother lode that we want to tap, and our approach in terms of capital is that market depth and right to play when it comes to Nexity's position is much more important in France. Much more significant in France than in the rest of the world. It's a combination of factors, economic circumstances in Germany and also our structural belief when it comes to the potential of the French market.
Thank you. That's clear. Basically, we're getting back to Nexity from 2018, if I understand correctly.
In any case, I don't know whether that's what we were like in 2018, but in the meantime, we have a strong services platform. Nexity has shored up its market share in real estate, particularly residential real estate. We are the leading property developer on our market. I'm not sure we can say that we're exactly the same as we were in 2018. In any case, as I said before, international business accounted for less than 2% of our revenue.
Thank you very much.
Next question. Christophe Chaput, Oddo.
Hi, Christ ophe.
Good evening. Please clarify. Now, getting back to your services business and profitability thereof. 8.7% versus 10% in 2019. My question is, over the medium term, what will the profitability potential look like for services? Are you targeting 10% or more?
Let me start. Véronique, and of course, Jean-Claude will add to my answer if he sees fit. You're absolutely right, Christophe. As I said before, profitability in services improved significantly in 2021. Over the next few years, the idea is to reach and even exceed 10% profitability. We expect that in 2022, the profit margin for services will continue to increase. Now, the pricing potential, the potential in terms of the quality of our offering and also our cost base, we can work on our processes, on resource pooling. The potential for improvement, for improving margin is very high, and our trajectory is going up.
Of course, I agree with Nadia. Allow me to add that this is not a standalone rationale. The idea behind this service platform doesn't pit property development and services against each other. No. The real upside for Nexity is that we are able to provide combined offers. This is an opportunity to develop both property development and services, and that's what we're trying to achieve via the service platform. It's an iterative process. We work together with customers, and at the end of the day, we will be able to combine both offers. I use as an example, the call for tender for Confluence in Lyon. That's one example of our ability to combine our different sets of skills, and we are more relevant, more efficient, and we prevail over the competition.
Inversely, in terms of residential property, a margin is down slightly relative to 2019 by 60 basis points.
I did the math quickly, so I hope I'm not wrong. Could you please remind us what the rationale was behind that drop in profitability? Is it because of the customer mix, or are there other factors?
The customer mix and the desired contribution from social housing operators. Yes, 60%. They account for 60% in H2. There's a catch-up effect over the previous year. I think that a number of agreements with social housing operators did not take place in 2020 and were actually pushed out until 2021. Now, the share of social housing was 29% because signings on social housing project were postponed because of COVID, and they couldn't take place in 2020, and so the agreements or the contracts were signed in 2021. The ANRU regulations do have constraints that we had to bear in mind, but mostly it's COVID. In terms of commercial real estate, you talked about getting back to a normal operating margin.
Was it less than 8%? Is that what you said?
Less than 10%.
Okay, one last question. In 2020, in actual fact, for Ageas, over the 9-month period, can you remind us what the situation was in terms of Ageas, so I can calculate the market share?
Excluding Ageas.
Okay. My financial priestesses here will correct me if I'm wrong, but excluding Ageas, the reservations in 2021 would've come to 21,101. In 2019?
19,199.
Thank you.
This stuff, you can find those figures on page 13 of the press release.
Next question. It's Marie Faure from Société Générale.
Good evening. First question, about Meridiam, could you please offer comments on what you expect from this partnership in terms of the business potential and also value sharing? My second question is on Germany. Sorry about that. You had a 65% stake. Just so I can understand, you're selling. Has it been sold already? Or the market cap, has it gone down because of the stock price? That was my first question. Secondly, I'd also like to know whether there may be a positive impact. I assume that the business had a dilutive effect on your margins. What's the upside for 2022? Third question, international expansion. It's not the first time that Nexity tries to go abroad.
Remember developmental ventures in Italy, and at the time, this led to significant provisions. Are you going to stop trying to expand internationally? At the end of the day, your business model is difficult to export because profitability on capital is very high in France, but not necessarily in other countries. Could you please explain what your strategy is internationally? Thank yo u.
I'll start with the last question, and then we will go back to Meridiam. Thank you, Marilyn. Good evening, by the way. Let me shine the spotlight on our business internationally so we can all be on the same page. As I said, international accounts for only 2% of our revenue. Outside Germany in 2020, we made the Pantera acquisition. There are four countries in which we operate, and they are at different stages of maturity.
Poland is mature and sustainable, profitable. It's part of the top 10 of property developers in Warsaw. Plus Portugal, Italy, Belgium, which are less mature and less core. Without any kind of significant commitments, I'd like to remind you that, we're not making the decision because of any kind of emergency. It's not like we're making a loss. No, we're not in the situation of Italy that you're referring to, Marilyn. We are in no hurry. It's a simple refocus, but it's not gonna happen overnight. It's going to take time. It's a capital allocation strategy. We bear in mind the return on capital employed. We bear in mind ROCE and how much capital must be employed in order to generate ROI.
It's all about trade-offs between the potential of the French market, and development potential in France is very high when you compare it with other countries, which uses a lot of capital. Such efforts is highly capital-intensive in other countries, and critical size is much lower. That's what I can tell you. As far as Germany is concerned, we're not planning to sell. We're planning to discontinue our development efforts. Now, margins on the current business should cover the structural costs and the shutdown costs. How should I put this? We're not anticipating any losses from that shutdown of our international operations. When it comes to Meridiam, okay, I'll start on Meridiam, and then Véronique will throw in her two cents.
In mid-January, we announced a partnership to support local and regional authorities in terms of urban renewal of downtown centers. Cooperation between Meridiam and Nexity is based on a joint commitment to the ecological transition and social inclusion. There are two main priorities.
We've got a renovation project for damaged buildings, depolluting infrastructure and also the ecological transition, so clean transport, low carbon technologies, et cetera. We have the urban renovation programs which tie into the national strategy for re-dynamization of centers of cities, which is known as the Action Cœur de Ville. This is a never-before-seen push which would enable local authorities to leverage Meridiam and Nexity's expertise with the financial and technical know-how and capacity to support them as they renovate their city centers. This truly is in the spirit of the partnership. This is an agreement which will enable us to together reach out to work with large landowners, and that will then have an impact on Nexity's revenue, but that will come through in three to four years, without the issue of net debt increase, which is the point of the partnership.
Some mayors have contacted us. They're interested in renovating their city centers. The idea is that this is a significant investment for them, which then turns into revenue in three to four years. We don't want to have it on our balance sheet, of course. That's why we have the partnership with Meridiam. Talking to the mayors who reached out to us, this is something that we're doing together, Meridiam plus Nexity. Our agreements will be on a case-by-case basis, depending on what needs to be done in the given city or town.
Thank you.
Thank you, Marie. The next question is from Nicolas Tabor.
Good evening. Thank you for answering my question. My first question is about the increase in your residential market share.
Given the uptick in the number of building permits and the fact that you purchased land lots ahead of time, why is guidance so low for residential, and why do you believe that overperformance is not likely to continue? Furthermore, can you give us an update on the amount you want to invest in land banks where you don't yet own land? And thirdly, on services, what are you expecting for the coming year? What is the outlook looking like there?
Hélène, do you want to field that one?
I can talk about the market. When it comes to the market, with the number of applications that are in for building permits, and there are a lot of them, you might expect the market share to be higher.
However, it is not reliable today to expect that this trend is going to continue upwards in any reliable way. The uptick is there, but the lag is still there as well. Cities take a long time to get back to us with their own requirements. Then we have to rework the permit once, twice, and sometimes a third time. This leads to a lot of lag time and can lead to things overspilling from one year to the next. It makes sense that we've established our guidance for market share at +14%. Controlling the delay time for receiving a build permit is certainly foundational. Regarding your question on land banks.
The ramp-up in investment, we believe, matches something that's simply required for the business line, given the competitive nature of the land market and given the recentering of business onto cities, so stacking buildings and existing infrastructure, EUR 100 million in investment in 2021, EUR 280 million at the end of December total. We had set the initial framework of this investment to EUR 300 million, as we announced. There's no real desire to go beyond the limit that we set. We need to make sure that our assets are properly rotated, however, and that we're at a roughly two-year cycle. Because a land bank isn't this immobile stock. Things go in, things come out.
Nicolas, to conclude, I think we're trying to have a reasonable policy and to remain opportunistic when it comes to land banks, with only taking position on land that has high-quality locations with very clear upsides and in controlled conditions. That's what I have on land bank. I forgot any other question? Sorry. It was on the growth outlook for services in 2022. Beyond. Okay, this brings us back to our guidance. EUR 380 million roughly with a margin rate at give or take 8%. That means an increase in revenue of about 3% with different trends observable in the different sectors.
Commercial real estate is likely to continue to suffer in 2022, still at the bottom of the trough. Despite that, the backlog is still high at about EUR 1 billion, which gives us leeway to simply wait for the end of the cycle. The backlog should lead to revenue of about EUR 400 million in 2022, so a significant drop-off versus revenue in 2021. However, for residential and services, we are likely to see a solid growth trend in the top line. Services, the Anglo-Saxons will call this a high single-digit growth and same for services in 2022. Answer the question, it's important to distinguish, property management which has a different structure. We should see 5%-7% growth there. But for office space delivered to clients for use, we're expecting growth to be, more than 10%.
Thank you very much. On the dividend policy, are you expecting any changes on the payout ratio or is it gonna stay the same?
It may be a little bit early to talk about that. The dividend for 2021 is up 25%. Nexity's priority has always been to have a solid distribution policy. As we've been able to demonstrate this year, again, we've got solid track record. We've always been very careful with the dividend policy. We're going to continue to look very closely at it. Our aim is to maintain a good payout ratio for our shareholders.
Thank you very much.
Maybe we can stop there. It's coming up to 8:00 P.M. Paris time. Thank you everyone for joining us this evening. Thank you for your questions. Of course, our investor relations points of contact are available to address any questions that you may not have been able to ask during the call. Thank you very much and have a good evening.