Business at March 31, 2020
Solid first-quarter performance
Gross rental income up to €168.1m
(+2.4% on a current basis and +3.7% like-for-like)
Strong resilience thanks to the centrality strategy
High level of operational mobilization facing the outbreak crisis
Fundamentals further strengthened
- Office portfolio located in very low vacancy rates areas, generating like-for-like gross rental income growth of +4.0% (+3.7% for the entire portfolio)
- Diversified rental base
- Robust and flexible balance sheet (end-2019: LTV of 34% including duties, €4.5bn of undrawn credit lines covering all debt maturities up to the end-2023)
- €347m of sales completed or under preliminary agreements in Q1 2020 (4% premium versus the latest appraisals)
Subsidiarization of the residential portfolio
- Creation of a dedicated subsidiary with a portfolio of over €3bn and 107 staff
- Contribution approved by the General Meetings of the shareholders and note holders
- Gecina is putting in place a vehicle to help drive the development of its residential rental portfolio
Mobilization to support customers
- Gecina is cancelling the second quarter’s rent excluding general expenses and taxes for its very small business tenants whose activities have been shut down following the Government Decree, particularly in retail
- Very small businesses and SMEs from “shut down” sectors represent less than 2% of the commercial rental base
- Gecina has made commitments to support the most vulnerable companies in its portfolio by responding quickly and deferring rent or setting up monthly instalments on a case-by-case basis, covering nearly 13% of its office rental base to date
Mobilization to support the national solidarity effort
- Student accommodations made available to women victims of domestic violence and healthcare workers
- Payments for all its contractors, and service providers in line with the regular timetable
- The Group is not using so far the business support measures, such as the furlough arrangements, the government-backed loans or the deferral of costs
- Gecina has responded to the French Government’s appeals to moderate dividend policies by reducing its 2019 dividend to €5.30 per share, covering its distribution requirements under the SIIC system
- The Board of Directors has decided, as proposed by the Chief Executive Officer, to reduce her fixed compensation for 2020 by two months’ salary as a solidarity measure during this period. An equivalent amount will be donated to the Gecina Foundation to support charities working to fight against Covid-19 consequences. The same approach has been adopted for Directors’ compensation for Board meetings focused specifically on Covid-19.
Mobilization to support employees
- Widespread home-working measures rolled out since the start of the lockdown, without using the furlough arrangements
- €1,000 bonus for building staff and superintendents and student residence managers who are working on the ground
- Payment of profit sharing and company performance bonuses
Caution needed for the current year
- The current uncertainty does not make it possible at this stage to accurately determine the consequences of this crisis
- On March 31, 2020, Gecina suspended its guidance for the year
Méka Brunel, Chief Executive Officer: “In an exceptional context with the global outbreak crisis, I am particularly proud of the dedication shown by Gecina’s teams to keep the Group’s business at the heart of their concerns. Facing this unprecedented turbulence, Gecina’s employees are continuing to consider their most vulnerable customers concerns, these very small businesses, particularly in the retail sector, whose reduced financial capacities are making hard to weather the crisis and for which we are granting the cancelation of one quarter’s rent.
However, in a very uncertain environment, Gecina is demonstrating its resilience, thanks to the strategic choices made in the last few years to realign operations around the Paris Region’s most central sectors, as well as the affirmation of our ambition in the residential sector and the proactive and cautious management of our balance sheet.
I would also like to pay tribute to the work accomplished by Bernard Carayon, whose term of office as Chairman ended following today’s General Meeting. His dedication and his risk management expertise have been valuable. We are delighted that he will be able to continue sharing his expertise with us as a Board Director”.
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Consolidate, Transform, Perform Total return of +12.2% over 12 months supported by a strong operational performance Dividend up +1.8% to €5.60 per share
Paris, France, February 19, 2020
Deputy CEO in charge of Finance
A Dauphine and Sorbonne graduate, with a postgraduate DESS in banking and finance, as well as a postgraduate DESCF in accounting and finance, Nicolas Dutreuil began...