Paris, France, July 19, 2018

Earnings at June 30, 2018

Recurrent net income per share growth of over +8% for 2018
vs. +3% to +6% expected initially

Targets set at the time of Eurosic’s acquisition exceeded

  • 2018 expectations revised: recurrent net income per share now expected to increase by over +8%
  • LTV proforma for sales under preliminary agreements already below 40% (at 38.4%), with €1.6bn of asset
  • sales1 completed or secured since Eurosic’s acquisition
  • €1.9bn of debt raised or renegotiated over the first half of 2018

Robust commercial trends confirmed in a buoyant market

  • 108,000 sq.m let or relet, representing €49.3m of annualized rental income
  • Like-for-like office rental income growth now expected to be around +2% in 2018

Confidence further strengthened for the medium and long term

  • €145m of additional potential annualized rents as projects from the development portfolio are delivered

  • 14 operations delivered in 2018-2019, with a potential rental volume of €116m and 65% let

  • Average maturity of debt extended to 7.4 years, with hedging up to 7.6 years

Méka Brunel, Chief Executive Officer: “Eurosic’s integration has been completed in less than a year, across all areas, thanks to the work accomplished by all the teams from both companies. Alongside this, robust market trends have enabled us to achieve outstanding operational (sales, developments, pre-lettings, etc.), financial and sustainability performances. We are looking ahead to the future with confidence and we are raising our guidance for 2018”.

2018 first-half highlights and key figures

First half of 2018 reflecting Eurosic’s successful integration

  • Recurrent net income up +50.8% to €230.3m, with +31.2% per share2, factoring in the accretive impact of Eurosic’s acquisition, coming in higher than Gecina’s initial expectations

  • Triple net NAV up +5.8%(2) year-on-year to €156.6 per share

  • Reduction in the average cost of debt by -30bp in six months to 1.4% (including cost of undrawn credit lines) and average maturity up to 7.4 years

€1.3bn of sales secured since the start of the year, taking the proforma LTV down to less than 40%

  • Further €1.2bn of sales of commercial assets completed or secured since the start of the year, taking the total volume of sales secured since Eurosic’s acquisition up to €1.6bn, higher than the minimum target set when the operation was announced (€1.2bn to €2.2bn)

  • €69m of residential sales secured

  • LTV proforma for sales underway of 38.4%, reduced to less than 40% in line with the commitments made by Gecina when Eurosic was acquired

  • Portfolio realigned around the Paris Region’s most central sectors

Robust lettings performance, with 108,000 sq.m let or pre-let since the start of the year

  • Representing an annualized rental volume of around €49.3m
  • Vacancy rate of less than 2.3% for Gecina’s Paris portfolio
  • Major lettings successes with assets under development, upstream from their deliveries, based on rents exceeding the Group’s initial expectations

Growth and value creation prospects, generated through projects under development, with deliveries concentrated primarily over the next 12 to 18 months

€2.6bn of operations already committed to, representing almost €145m of potential rental income

  • Two assets delivered during the first half of the year in Paris City (Ville l’Evêque and Le Jade), representing nearly €13m of potential rental income

  • 12 deliveries of assets expected between 2018 and 2019, representing over €103m of potential rental income, with nearly two thirds of their space already pre-let

€2.4bn of additional potential operations over the medium and long term, taking the total pipeline up to €4.9bn, with 70% located in Paris, delivering an expected yield on cost of 6%

First effects of the residential portfolio’s repositioning at the heart of Gecina’s strategy

  • Gecina has set out its intention to keep its residential assets at the heart of its portfolio, aiming to extract their value creation and organic growth potential

  • The new processes put in place, particularly for looking into reversion potential, as well as improvements in reletting and value extraction procedures, are already reflected in the improvement in like-for-like rental income growth (+1.8%) and the end-June 2018 appraisal values (+3.2% over six months)

Expectations raised for 2018 and solid prospects for the medium term

  • Thanks to the positive trends on Gecina’s core markets and the success of Eurosic’s rapid integration, exceeding the Group’s initial expectations, the Group is revising its forecasts upwards for 2018 in terms of recurrent net income, with growth of over +8% now expected (versus +3% to +6% previously)

  • The Group’s confidence for the medium and long term has also been further strengthened, with a committed pipeline of €2.6bn, representing €145m of additional potential annualized rental income. 14 operations are scheduled to be delivered between 2018 and 2019, with potential rental income of almost €116m. Alongside this, the Group has extended the average maturity of its debt to 7.4 years and its hedging to 7.6 years.

Read the full press release here


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