Earnings at June 30, 2019

Executing our strategy: particularly dynamic first half of 2019

• • 85,000 sq.m let during the first half of the year, with headline reversion of +5% in Paris CBD & 5-6-7
  • Seven projects delivered or to be delivered in 2019 in the most central sectors, largely pre-let, including six over the second half of the year
  • Net value creation in H1 of around €256m on the assets under development or delivered in 2018
  • Ongoing portfolio rationalization: €423m of sales completed or covered by preliminary agreements, with a premium of nearly +6%

Consolidating results: financial aggregates driven by operational performance

• • EPRA NAV of €169.8 per share, up +8.0% year-on-year…
  • …generating a total return of 11.4% over 12 months (and 6.8% over six months)
  • Recurrent net income per share up +2.5% excluding the impact of non-strategic assets sold in 2018 from the Eurosic scope
  • LTV down to 35.3% including duties (vs. 36.2% at end-2018 and 39.0% mid-2018)
  • Average maturity of debt extended by +0.4 years to 7.7 years at end-June, with the cost of drawn debt unchanged at 1.1%

Anticipating and preparing future performance

• • Headline reversion potential of around +9% identified for Gecina’s office portfolio, linked to its centrality, which will gradually be reflected in rental trends over the coming years
  • €3.0bn pipeline committed or “to be committed” in the short term, with an expected yield of around 5.8%

Eight projects from the “to be committed” pipeline could start up during the second half of the year, representing over 80,000 sq.m, contributing to the robust trends for growth and value creation over the medium term

• • Gecina’s continued transformation around YouFirst: electronic signatures introduced for leases, new CRM launched, partnership set up with GarantMe to facilitate access to housing for students, investment in a Fifth Wall fund focused on urban innovation
  • 2019 guidance revised following a solid first half: 2019 recurrent net income per share now expected to increase by over +3% (excluding impact of sales of non-strategic assets from the Eurosic scope in 2018), with €5.80 to €5.85 (versus €5.70 to €5.75 previously)
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Highlights and key figures at June 30, 2019

Total return of 11.4% over 12 months, reflecting Gecina’s excellent performance in buoyant markets

• Appraisal values up +3.9% like-for-like over six months, driven primarily by the increase in rental values for the most central sectors
• EPRA NAV up +8.0% to €169.8 per share…
• …generating a total return of 11.4% over 12 months (and 6.8% over six months)

2019 guidance revised upwards following a solid first half

• Rental income up +2.0% like-for-like (+1.9% for offices, +2.5% for traditional residential)
• Like-for-like office rental income growth now expected to come in at over +2% (excluding vacancy effect), compared with +1.7% to +2.0% previously
• Recurrent net income per share of €2.96, up +2.5% excluding the impact of non-strategic assets sold in 2018 from the Eurosic scope
• 2019 recurrent net income per share growth now expected to reach +3% (excluding impact of sales of non-strategic assets from the Eurosic scope in 2018), with €5.80 to €5.85 (versus €5.70 to €5.75 previously)

Buoyant market, with positive trends for the Group’s outlook

• Available supply is still close to an all-time low, with market rents up over 12 months: +3.8% for the region, +7.9% for Paris’ extended CBD and +10.4% for the rest of Paris City
• Headline reversion potential of around +8.6% identified for Gecina’s office portfolio, which will gradually be reflected in like-for-like rental trends over the coming year

Dynamic management of the Group’s portfolio

• €423m of assets sold or under preliminary sales agreements at end-June, with a premium of 5.7% versus the latest appraisals from end-2018
• €3.0bn committed or controlled and certain pipeline, following the Ibox building’s delivery during the first half of the year
• €256m value creation recorded over the first half of this year on the buildings under development or delivered in 2018
• Six projects scheduled to be delivered in the second half of the year, representing almost 70,000 sq.m
• Eight projects from the “to be committed” pipeline, including two major projects in Paris’ CBD, could start up during the second half of the year, representing over 80,000 sq.m, contributing to the robust trends for growth and value creation over the medium term
• The projects from the “committed” and “to be committed” pipeline (controlled and certain) are expected to generate a significant rental gain. Net of the impact of the sales carried out in 2018 and the loss of rent involved with freeing up assets with strong value creation potential, gross rents could see growth of €130m to €140m between 2018 and 2024, thanks exclusively to these internal dynamics developed by the Group

Increasingly flexible and agile balance sheet

• LTV down to 35.3% including duties (vs. 36.2% at end-2018 and 39.0% mid-2018)
• Average maturity of debt extended from 7.3 years at end-2018 to 7.7 years at end-June, with the cost of debt remaining unchanged (1.1% for drawn debt)

Read the full press release here