Earnings at June 30, 2023

First-half Recurrent Net Income (Group share) up +7.5% (€2.93 per share)

• Like-for-like rental income growth of +6.9% (+7.5% for offices) driven by:
  • Improvement in occupancy (+1.6%), with the average occupancy rate up +80bp over six months
  • Indexation that is ramping up (+4.2%)
  • Rental uplifts (+1.1%)
• Pipeline’s positive net contribution (+€7m over six months)
• Average cost of debt under control at 1.4% (1.1% for drawn debt)

Operational performances and market trends that confirm Gecina’s positioning

• Leaing trends confirmed in central areas
  • Reversion captured on offices, with +33% for Paris and +15% overall
  • Residential reversion of +13% captured
• Market vacancy rate in Paris’ Central Business District at an all-time low (c.2% source JLL)
• Pipeline deliveries scheduled over the next 12 months, 82% already pre-let

Significant improvement in all debt indicators in an uncertain financial context

• €1bn of disposals with an average premium of +10% versus the latest appraisals and a loss of rental income of 2.5%, executed in a quiet investment market, resulting in: 
  • LTV down -150bp in six months to 32.2% (including duties) despite the -4% drop in valuations like-for-like (with the NTA down by -6%)
  • Liquidity further strengthened, now covering bond maturities until 2028
  • Debt now 95% hedged on average through to 2027

Strong reduction in energy consumption with the efficiency plan launched in 2022

• Average energy consumption reduced by around -17% over six months for the office buildings managed by Gecina following the efficiency action plan rolled out
• Roadmap to reduce carbon emissions per sq.m by -75% since 2008, in line with the carbon ambition “CAN0P-2030”

Recurrent net income per share growth of +6% to +8% now expected for 2023

• Operational performances exceeding expectations (positive trends on central markets)
• Disposals carried out with an accretive impact on recurrent net income
• Strong control over operating expenses in an inflationary environment

2023 recurrent net income growth guidance upwards, with €5.9 to €6.0 per share now expected (vs. €5.8 to €5.9 initially), up +6% to +8% compared with 2022 (vs. +4% to +6% initially)

Beñat Ortega, Chief Executive Officer: “The first half of this year confirms the performance achieved in 2022, reflecting Gecina’s strong operational successes in central areas and our proactive long-term debt management, giving us visibility over our financial expenses. The confirmation of these trends further strengthens our confidence, enabling us to raise our guidance in recurrent income per share for 2023. 

In an uncertain context, with a disrupted macroeconomic environment, but favorable leasing trends for Paris City, we have decided to optimize and accelerate the Group’s dynamic capital allocation strategy.

During the first half of 2023, we sold €1bn of mature real estate assets, above their appraisal values and with a loss of rental income of only 2.5%, enabling us to further strengthen the quality of our balance sheet, which was already particularly robust, in addition to financing our pipeline, concentrated primarily in Paris and driving strong value creation, and offering us an opportunistic financial headroom.

In the context of a new reality on the real estate markets, today we are building the foundations for a Group that will be better positioned to deliver sustainable outperformance”.  

See the full press release here