February 22, 2010 / 11:08 AM / 9 years ago

UPDATE 1-Fonciere des Regions sees stable 2010 rental income

* Like-for-like rental income to stabilise in 2010

* Targeting asset sales, purchases of 500 million euros

* Shares up 3.5 percent as property sector trades flat

PARIS, Feb 22 (Reuters) - French property group Fonciere des Regions (FDR.PA) expects 2010 rental income to be stable on a like-for-like basis after reporting a slight rise in 2009, the company’s head of investor relations told Reuters on Monday.

The group, which is landlord of firms such as France Telecom FTE.PA and Electricite de France (EDF.PA), also aims to sell and buy 500 million euros’ ($681.2 million) worth of assets this year to revamp its mostly office-focused portfolio against a backdrop of fragile economic recovery.

“In an economic environment that remains uncertain, we expect stability for our rental income in 2010 on a like-for-like basis,” Philippe Le Trung said.

Shares of Fonciere des Regions were up 3.5 percent, at 73.45 euros, after the group reported a narrower net loss for 2009 than the year before and said it would cut its stake in Italy’s Beni Stabili BNSI.MI to 52.5 percent, from 68 percent.

The DJ STOXX real estate index .SX86P was up 0.3 percent.

Fonciere des Regions, which has a market capitalisation of 3.5 billion euros, said it would distribute 6 Beni Stabili shares and a cash dividend of 3.3 euros per share to its shareholders, making a total estimated dividend of 6.90 euros per share.

This should pave the way for the Italian subsidiary to become a real estate investment trust (REIT), it said.

Although Fonciere des Regions’ rental income rose 3 percent in 2009 on a like-for-like basis, this was largely due to positive rental benchmark indexes linked to the wider economy.

Property companies across the sector such as Unibail-Rodamco UNBP.PA and Klepierre (LOIM.PA) have warned that weakness in benchmark indexes will hurt rental income growth in 2010.

(Reporting by Juliette Rouillon, writing by Lionel Laurent, editing by Marcel Michelson)

((lionel.laurent@thomsonreuters.com; +33 1 49 49 56 85))

($1=.7340 Euro) Keywords: FONCIERE DES REGIONS/

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