Annual report 2008 - Altarea Cogedim

Employees in both UES ALTAREA and UES Cogedim receive
health, disability, and life insurance benefits.
6.6. Training
ALTAREA complies with the French law passed in 2005 on
the employees’ right to training.
Employees were offered 6,073.5 hours of training, or an
average of 8 hours per employee.
In 2008, ALTAREA invested the equivalent of 2.27% of its
payroll expense in training programmes for UES ALTAREA
employees and 1.6% for UES Cogedim employees.
7. Information that
can affect ALTAREA’s
businesses
or profitability
The ten largest tenants in the shopping centres managed
by ALTAREA accounted for 21.01% of total rental income
(excl. tax) in 2008. No single tenant accounted for more
than 5% of the rental income.
The ten largest customers in ALTAREA’s residential and
office property business accounted for 27.7% of total
revenue (excl. tax) in 2008. No single customer accounted
for more than 10%.
8. Competitive
environment
The sections of this registration document containing the
company description and management report (Parts I and
III) provide detailed, quantitative information on ALTAREA’s
businesses and services, along with their trends, competitive
landscape, and earnings. The management report also discusses
the macroeconomic factors and business cycles affecting the
shopping centre and residential property markets.
9. Risk
factors
ALTAREA is exposed to the following risk factors as a result
of its business activities. However, the company feels
it has the resources to limit these risks and manage the
consequences should they materialise.
Risks related to trends in the property market
ALTAREA operates in several sectors of the property market,
mainly commercial property (mostly shopping centres) and
residential property. The company is exposed to systemic
risks and uncertainties specific to the property market, most
notably its cyclical nature, as well as the risks inherent
to each property asset. The company’s risk management
strategy and measures taken aim to limit the negative
consequences should one of these risks materialise.
However, as demonstrated by the current banking and
financial crisis, abrupt changes in the economic, financial,
monetary, regulatory, political, geopolitical, social, health,
or environmental climate may have a negative impact on
ALTAREA’s businesses, asset values, earnings, development
projects, and investments.
Risk of tenant insolvency
ALTAREA’s ability to collect rental income depends on the
solvency of its tenants. The company carefully reviews
potential tenants before granting any leases, although it may
occur that a tenant does not pay its rent on time or defaults
on its rental payments, which would impact ALTAREA’s
operating income. This could be the case if the current
banking crisis were to escalate into full-blown recession as
this would have a significant impact on consumer behaviour
and create difficulties for tenant stores and retailers.
However, rents are relatively unscathed as tenants fear
eviction and accordingly the loss of their business.
Legal, regulatory, environmental, insurance,
and tax risks
Legal and regulatory risks
ALTAREA must comply with regulations in a variety of areas,
including urban planning, construction, leases, operating
permits, health and safety, the environment, and taxes
(most notably the tax rules governing SIICs). Changes to
any of these regulations could require ALTAREA to adjust its
operations, assets, or business strategy accordingly, which
may have negative consequences on its earnings, asset
values, and expenses, and may slow or halt progress on
some of the company’s property development or marketing
activities.
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