Paris, France, July 17, 2017

Earnings at June 30, 2017

Historically active first half of the year: operational performances and amicable business combination with Eurosic

Total return of +17.0% in six months and +22.2% over one year

  • Triple net NAV per share up +15.0% over six months to €152 per share
  • Portfolio value up +10.4% over six months, reflecting the upturn on the rental markets, combined with a further compression of capitalization rates, as well as ongoing work to extract value on the assets under development
  • Strong increase in value for the residential portfolio (+23.0% over six months) reflecting the growing appetite for this asset class among institutional operators.


Recurrent net income in line with the Group's expectations and 2017 targets confirmed

  • Contraction in recurrent net income over the first half of 2017, resulting from the significant changes in scope (€1.7 bn of non-strategic or mature buildings sold and work launched to redevelop five buildings in 2016)
  • These scope effects will no longer have an impact in the second half of 2017, with recurrent net income expected to be at least equal to the level recorded in the second half of 2016[1] (excluding impacts linked to Eurosic’s integration)
  • Confirmation of the target for recurrent net income, restated for the impact of the healthcare sale and before taking into account Eurosic's integration, to contract by nearly -5% to -6%[2] in 2017.


Pace of project deliveries and lettings accelerated in a buoyant market

  • Buoyant market, supporting Gecina's portfolio and strategy
  • Rental income for offices up +2.1% like-for-like
  • Major letting successes since the start of 2017, with nearly 95,000 sq.m let, pre-let, relet or renegotiated for €36.1m economic rents
  • Close to 33,000 sq.m delivered during the first half of the year in Paris (55 Amsterdam) and Lyon (Gerland/Septen), with nearly 80% let
  • Pipeline pre-letting rate increased to 35% (pre-letting in 2017 so far of Octant-Sextant and 20 Ville-l’Evêque)


2017 already a historic year for Gecina with its proposed acquisition of Eurosic

Acceleration of Gecina's total return strategy

  • Acceleration of the portfolio's rotation, with a planned sales program for over €1.2 bn
  • Combined project pipeline increased to nearly €2.5 bn (for the scope from end-2016), with deliveries scheduled from 2017 to 2019
  • Immediate accretive impact representing +10% for the full year on recurrent net income per share

Strengthening of the Group's strategic positioning on real estate markets

  • Growing specialization on offices (>80% of the total portfolio after the disposal program)
  • Strengthening of the office portfolio's focus on central sectors (>60% in Paris City following the disposal program)
  • Building of unrivalled coverage of the Paris market (strengthening and access to new office markets at the heart of Paris)

Operation secured and balance sheet safeguarded

  • Operation secured and fully financed, particularly through a €1.5 bn bond issue with an average coupon of 1.3%
  • €1 bn capital increase with preferential subscription rights issue planned to refinance part of the debt


New organization rolled out on July 3 to support operational performance

  • Creation of two business units for Offices and the Residential portfolio, and recruitment of two executive directors to head up these units, making it possible to better monitor the operational and financial performances of the portfolios concerned.
  • Setting up a dedicated business unit for the residential portfolio reflects Gecina's ambition to focus in priority on extracting value and optimizing the management of this division.


Key figures



In million euros

   Jun 30, 16   

   Jun 30, 17   

Change (%)

Gross rents




(+1.6% like-for-like)





Recurrent net income (Group share)*




(-11% excl. impact of healthcare sale)

per share (€)




Net income – Group share




Diluted EPRA triple net NAV (block)**




* EBITDA less net financial expenses and recurrent tax, as defined in the accounts appended to this press release

** Table presenting the transition between Group shareholders' equity from the financial statements and EPRA triple net NAV available in section 3.7 of the half-year financial report


Historically intense first half of the year on positive real estate markets


Earnings for the first half of 2017 reflect the solid trends for the rental and investment markets in Paris, with EPRA triple net NAV up +15% over six months and +2.1% like-for-like growth in office rental income.


Alongside this, the positive trends on the Paris markets have supported the major letting successes finalized since the beginning of 2017, with nearly 95,000 sq.m already let, pre-let or renegotiated, including the pre-lettings of Octant-Sextant (Levallois-Perret) and 20 Ville-l’Evêque (Paris CBD). These lettings have further strengthened Gecina's confidence in the outlook for growth over the coming years, particularly with its pipeline of projects that are under development.


These results also reflect a transition phase between the impact of the major volumes of sales and redevelopments carried out in 2016, which, as expected, explain the temporary contraction in recurrent net income for the first half of this year, and the future impacts that will be generated by Eurosic’s acquisition and the deliveries of buildings that are currently under development. These significant scope effects, with a full impact over the first six months of this year, will have a relatively limited impact on the second six months. As a result, Gecina is able to confirm with confidence its 2017 target for recurrent net income, excluding the impact of both the healthcare sale and Eurosic's acquisition, to contract by -5% to -6%.


The first half of the year was also marked primarily by the proposed amicable business combination with Eurosic, which Gecina will gain control of by end of August. This is a strategically structuring operation for the Group, enabling it to ramp up and accelerate the deployment of its strategy, in line with the ambitions announced at the start of the year. In addition to accelerating the portfolio rotation program, particularly through the sales programs for which processes are already underway, this operation will further strengthen the Group's exposure to the office real estate market's most central sectors, especially in Paris City. The combined structure will have a pipeline that is unrivalled in Europe, focused principally on the market's most buoyant sectors, offering increased visibility in terms of cash flow growth and value extraction. In the short term, this operation will have an accretive impact representing +10% per share on a fully year basis.


In connection with the financing for this operation, Gecina has already refinanced part of the €2.5 bn bridge, which made it possible to finance the operation, through a bond issue in three tranches for a total of €1.5 bn, with an average maturity of 10 years and an average coupon of 1.3%. A €1 bn capital increase with preferential subscription rights issue is also planned.


Alongside this operation, Gecina has remained active on the markets with a share buyback program that has now been closed, making it possible to buy back €224.5 M of securities at an average price of €121.8 per share. The Group has also finalized its acquisition of two office buildings in Paris' central business district and La Défense for a total of €141.5 M. In addition, Gecina has finalized sales of residential assets for €83 M, while a further €142 M of sales were subject to preliminary agreements at end-June 2017.


Since July 3, 2017, Gecina's teams have been working based on a new organizational framework. Two business units have been created for the office portfolio and the residential portfolio, with two executive directors recruited (Valérie Britay and Franck Lirzin respectively). This new organization will help build understanding of and improve the operational and financial performances of the portfolios concerned. Over the coming quarters, this new organization will also facilitate Eurosic's integration. The creation of a dedicated business unit for the residential division reflects Gecina's ambition to focus in priority on optimizing this portfolio's operational management and identifying opportunities for optimizing value.



Méka Brunel, Chief Executive Officer: “Over one year, the strategy rolled out by Gecina has made it possible to generate a total return of more than +22%, which reflects not only the Paris office market’s positive trends, but also the relevance of the Group’s positioning on the Paris Region's key sectors, as well as the potential for growth and value creation with the project pipeline. Through its proposed amicable business combination with Eurosic, Gecina achieved a historic first half of the year, establishing itself as Europe’s fourth-largest real estate group and the market leader for offices”.

[1] All other things being equal

[2] This target may be revised up or down depending on opportunities for investments and sales during the year. 


For more details, please find attached the press release


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