Earnings Release • Jul 21, 2022
Earnings Release
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Including duties
| Current | ||||
|---|---|---|---|---|
| In million euros | Jun-21 | Jun-22 | basis | Like-for-like |
| Offices | 250.7 | 245.0 | -2.3% | +2.7% |
| Traditional residential | 52.7 | 53.1 | +0.8% | +1.6% |
| Student residences | 8.0 | 10.1 | +25.2% | +19.0% |
| Gross rental income | 311.4 | 308.2 | -1.0% | +3.0% |
| Recurrent net income (Group share)2 | 202.4 | 201.2 | -0.6% | |
| Per share (€) | 2.75 | 2.73 | -0.7% | |
| LTV (excluding duties) | 35.4% | 33.8% | ||
| LTV (including duties) | 33.4% | 31.9% | ||
| In euros per share | ||||
| EPRA Net Reinstatement Value (NRV) per share | 189.6 | 198.9 | +4.9% | |
| EPRA Net Tangible Assets (NTA) per share | 172.6 | 181.2 | +5.0% | |
| EPRA Net Disposal Value (NDV) per share | 167.5 | 187.9 | +12.1% |
2 EBITDA excluding IFRIC 21 after deducting net financial expenses, recurrent tax, minority interests, including income from associates and restated for certain non-recurring items.
Like-for-like rental income growth reflecting the improvement in occupancy rates across all the asset classes and the gradual return of indexation
Improvement in the average financial occupancy rate by +110bp and positive reversion of +13%
Since the start of the year, Gecina let, relet or renegotiated more than 57,000 sq.m, representing almost €41m of headline rent. This strong upturn is in line with the trend observed since the second quarter of 2021 in most of the markets that Gecina operates on where the vacancy rate has dropped significantly (notably to 2.8% in the CBD according to BNP RE).
Iconic transactions confirming the good level of rental markets
Among the latest rental transactions secured since the start of 2022, some major operations confirm the very good performance by high-quality buildings in the most central markets.
For instance, the Group secured the pre-letting of around 80% of the "Boétie" building to the Eight Advisory Group in February 2022, for 7,800 sq.m.
More recently, at the start of July, Gecina signed a firm 10-year lease, also based on current prime rents, with a tenant from the luxury industry, for all of the "64 Lisbonne" building (7,850 sq.m), anticipating the departure of the tenant currently in place and making it possible to capture significant reversion.
In Paris' Central Business District, other negotiations are currently underway based on rents of over €950/sq.m.
In Neuilly-sur-Seine, 85% of the 157 CDG building, delivered during the first half of this year, has been let to the SPIE group and to a pharmaceutical group. These transactions confirm that the prime rental values in Neuilly-sur-Seine are now up to nearly €650 to €700/sq.m/year.
Lastly, in Boulogne-Billancourt, Gecina has let nearly 5,000 sq.m to the Michelin and Futurmaster groups in the Horizons – Maison Haute building, which was subject to a renovation program. The rents secured on this building, which was delivered in 2011, are in line with market rents for new / redeveloped buildings in this area.
91% of Gecina's letting challenges for spaces that are vacant or under development concern buildings located in Paris City, Neuilly-sur-Seine and Boulogne-Billancourt. These challenges are concentrated in the sectors with the most positive trends, benefiting from the polarization of the markets supporting areas of centrality and scarcity. As a result, in these three sectors, the theoretical timeframe to clear the stock of vacant space is less than one year.
| Gross rental income - Offices | Jun 30, 2021 | Jun 30, 2022 | Change (%) | |
|---|---|---|---|---|
| In million euros | Current basis | Like-for-like | ||
| Offices | 250.7 | 245.0 | -2.3% | +2.7% |
| Central areas (Paris, Neuilly, Southern Loop) | 179.6 | 179.6 | +0.0% | +2.5% |
| Paris City | 143.5 | 143.6 | +0.1% | +2.3% |
| - Paris CBD & 5-6-7 - Offices | 71.0 | 71.7 | +1.0% | +0.5% |
| - Paris CBD & 5-6-7– Retail | 19.0 | 16.7 | -12.2% | +5.3% |
| - Paris - Other | 53.4 | 55.2 | +3.3% | +3.7% |
| Core Western Crescent (Neuilly/Levallois, Southern Loop) | 36.1 | 36.0 | -0.3% | +3.6% |
| La Défense | 27.8 | 30.7 | +10.7% | +9.1% |
| Other locations (Peri-Défense, Inner / Outer Rims and Other | 43.4 | 34.7 | -20.0% | -1.6% |
| regions) | ||||
| Western Crescent - La Défense (as reported previously) | 80.8 | 83.8 | +3.7% | +5.2% |
Like-for-like office rental income growth came to +2.7% year-on-year, benefiting for +1.8% from an improvement in the occupancy rate across our buildings, reflecting the robust commercial performance levels achieved since the second quarter of 2021, as well as a positive indexation effect, which is modest to date (+0.8%) and will ramp up over the coming quarters, passing on - with a delayed effect - the return of an inflationary context.
The -2.3% contraction on a current basis is linked primarily to the asset disposals completed in 2021, including the sales of the Les Portes d'Arcueil (Arcueil), Louise Michel (Levallois) and Orion (Montreuil) buildings in the third quarter of 2021. For reference, these buildings were sold at prices that were +9% higher than their latest appraisals.
In 2021, Gecina had signed a lease on the 101 Champs-Elysées building, extending the rental commitment with the tenant in place. This transaction was subject to various conditions precedent, which were not satisfied before the agreement's deadline. As a result, the rental conditions that apply today are identical to those that were in place before this pre-agreement was signed.
Lastly, note that the pipeline's contribution to rental income growth (contribution from deliveries net of transfers to the pipeline) is now positive, with around €2.4m for the first half of the year, benefiting from the leases signed recently for the Anthos (Boulogne), 157 Charles de Gaulle (Neuilly) and Sunside (La Défense) buildings.
Residential: strong upturn in rental activity, with reversion potential confirmed and a start to the 2022 academic year that looks set to be significantly higher than the start of the 2019 academic year (before the impact of the Covid-19 pandemic)
YouFirst Residence (traditional residential): acceleration in operational performance levels confirmed
Like-for-like, rental income from traditional residential properties is up +1.6%. This performance takes into account a level of indexation that is starting to be passed on (+1.1%) and the impact of positive reversion (+0.6%) on the apartments relet, with the rent for new tenants around +8% higher than levels for the previous tenants on average since the start of the year.
On a current basis, rental income is up +0.8%, reflecting the impact of the small number of sales completed during the first half of the year.
Rental income from student residences shows strong growth, with +19% like-for-like and +25% on a current basis, reflecting the improving environment since the third quarter of 2021.
This performance is linked primarily to the rebound of the occupancy rate for residences (contributing +13.2%), as well as the significant reversion captured (contributing +4.7%), while the indexation effect represents +1.1%.
| Average financial occupancy rate |
Jun 30, 2021 | Sep 30, 2021 | Dec 31, 2021 | Mar 31, 2022 | Jun 30, 2022 |
|---|---|---|---|---|---|
| Offices | 91.4% | 91.0% | 90.7% | 91.1% | 91.8% |
| Traditional residential | 96.7% | 96.6% | 96.8% | 96.9% | 96.8% |
| Student residences | 74.4% | 72.8% | 79.0% | 92.6% | 86.3% |
| Group total | 91.6% | 91.2% | 91.2% | 92.0% | 92.3% |
The Group's average financial occupancy rate is at a high level, with 92.3%, up +110bp over six months, reflecting the benefits of the strong upturn in rental transactions since the second quarter of 2021. The spot rate at end-June is higher than the average rate (92.8%), indicating a trend that continued to improve during the first half of the year.
For the office scope, the average financial occupancy rate is up +110bp to 91.8%. The spot rate at end-June 2022 was 93.1%, up from just 90.8% at end-December 2021, illustrating the robust trend for lettings during the first half of 2022.
This rate does not take into account recent lettings on which the leases have not yet come into effect. These spaces are therefore considered to be vacant even though they are covered by a signed lease that is due to take effect during the second half of the year. If these spaces that have already been let are included as occupied units (notably Carré Michelet in La Défense), the normative occupancy rate represents 94.4%, once again highlighting the positive market trends.
For traditional residential, the average financial occupancy rate for the first half of 2022 is stable over six months and year-on-year, highlighting this portfolio's rental resilience.
For the student residences scope, the average financial occupancy rate shows a significant increase over six months (+7.3pts), illustrating the strong upturn in activity following a 2020-21 academic year that was greatly disrupted by the consequences of the pandemic.
| In millions of euros | Jun 30, 2021 | Jun 30, 2022 | Change (%) |
|---|---|---|---|
| Gross rental income | 311.4 | 308.2 | -1.0% |
| Net rental income | 281.0 | 277.8 | -1.1% |
| Operating margin for other business | 0.6 | 1.4 | +148.7% |
| Services and other income (net) | 3.1 | 1.3 | -59.6% |
| Overheads | (37.7) | (39.1) | +3.5% |
| EBITDA - recurrent | 246.9 | 241.4 | -2.2% |
| Net financial expenses | (43.3) | (38.5) | -11.0% |
| Recurrent gross income | 203.7 | 202.9 | -0.4% |
| Recurrent net income from associates | 0.6 | 0.7 | +14.7% |
| Recurrent minority interests | (0.6) | (0.9) | +39.3% |
| Recurrent tax | (1.3) | (1.6) | +25.1% |
| Recurrent net income (Group share) (1) | 202.4 | 201.2 | -0.6% |
| Recurrent net income (Group share) per share | 2.75 | 2.73 | -0.7% |
(1) EBITDA excluding IFRIC 21 after deducting net financial expenses, recurrent tax and minority interests, including income from associates and restated for certain non-recurring items.
Recurrent net income (Group share) came to €2.73 per share (-0.7%), with an increase of +3.9% excluding the impact of the sales carried out in 2021 and the non-recurring income received during the first quarter of 2021.
This change takes into account the increase in the occupancy rate, the first effects of the acceleration in indexation and the positive rental reversion secured.
This change reflects the impact of the portfolio rotation carried out in 2021 for almost €512m, focused on various office buildings located outside of Paris (Arcueil, Levallois, Montreuil, Boulogne and Antony). For reference, these buildings were sold with a premium of around +9% versus the latest appraisal values.
Operations relating to the pipeline (deliveries and redevelopments): +€2.4m net change in rental income The change in recurrent net income (Group share) benefited from a positive net effect for operations relating to the pipeline, with the impact of building deliveries now higher than the temporary effects of the assets made unavailable for rent with a view to being redeveloped.
It is important to note that during the second half of the year this positive effect is expected to be confirmed:
| Group | Offices | Residential | Student | |
|---|---|---|---|---|
| Rental margin at Jun 30, 2021 | 90.2% | 92.5% | 82.5% | 69.4% |
| Rental margin at Jun 30, 2022 | 90.1% | 92.1% | 82.6% | 82.1% |
Financial expenses are down -€4.8m, linked mainly to a volume effect following the disposal of the Les Portes d'Arcueil building during the second half of 2021, with the average cost of debt stable at 1.2%.
| Ratios | Covenant | Jun 30, 2022 |
|---|---|---|
| Loan to value (block, excl. duties) | < 55% - 60% | 33.8% |
| EBITDA / net financial expenses | > 2.0x | 5.5x |
| Outstanding secured debt / net asset value of portfolio (block, excl. duties) | < 25% | 0.0% |
| Net asset value of portfolio (block, excl. duties) in billion euros | > 6.0 - 8.0 | 20.6 |
In the last few years, Gecina has continued to optimize, further strengthen and extend its financial structure. Alongside this, the Group has ramped up the alignment of its financing with its strong CSR convictions and strategy, setting up new responsible credit lines and requalifying all of its outstanding bonds as Green Bonds.
The Group's financial structure is now particularly adapted for a context that calls for a cautious approach.
In terms of liquidity, Gecina has €4.7bn of liquidity, including €4.6bn of undrawn credit lines. After deducting short-term financing from this amount, net liquidity represents €3.3bn, significantly higher than our financial policy for a minimum of €2.0bn, making it possible to cover the bond maturities through to 20273 .
Specifically, all of the bond maturities for the next two years have already been refinanced through longterm bond issues carried out mid-2021 and early 2022, with an average coupon of 0.875% and an average maturity of 13 years.
In terms of the sensitivity of the Group's average cost of debt, Gecina's rate hedging policy stands out through the long maturity of its hedging instruments (7.2 years), making it possible to sustainably protect the average cost of debt.
In 2022-2024, rates are therefore hedged for nearly 90%. The Group's hedging policy is also aligned with a longer timeframe, with 75% of debt hedged on average through to the end of 2028.
With the yield curve forecast for the second half of 2022, the total average cost of debt is expected to be 1.2% for the full year in 2022.
The Group has confirmed its sound balance sheet positions, while maintaining a historically low cost of debt, with 0.9% for drawn debt and 1.2% for the total cost of debt, similar to the levels reported at end-2021.
At end-June 2022, Gecina had a loan to value ratio (LTV) of 31.9% including duties (33.8% excluding duties), down -1.5pts year-on-year, benefiting primarily from the disposals completed in the last 12 months, the increase in the portfolio's value like-for-like and the value created on the assets under development.
The ICR represents 5.5x (vs. 5.4x one year ago), with a secured debt ratio of 0.0%, giving Gecina significant headroom in relation to its bank covenants.
Gecina – 2022 half-year earnings – Paris, July 21, 2022 8 3 Taking into account the standard renewal of undrawn credit lines 12-18 months before they are due to mature (next maturities in 2024)
With a committed pipeline of around €1.9bn and a controlled and certain pipeline that could be launched over the coming years, the Group is expected to benefit from a strong leverage effect on rental income growth between 2022 and 2026.
The vast majority of the projects under development are concentrated in the most central sectors, with 94% of the committed pipeline for offices located in Paris City.
Nearly 28% of the committed pipeline is now made up of residential assets.
During the second half of 2022, Gecina is notably launching a very ambitious new redevelopment project: "32 Marbeuf" in Paris' Golden Triangle, which is scheduled for delivery in early 2025 and will offer 13,000 sq.m, in line with the best environmental certifications, and a number of outdoor spaces.
With an expected yield on cost of 5.2% for offices and 4.8% overall, this committed pipeline represents a potential additional rental income volume of around €91m, which will be achieved gradually between 2022 and 2025 as the various assets are delivered.
Based on the committed scope at end-2021, the pre-letting rate for the committed pipeline is up +18pts from 67% to 85% for the buildings scheduled for delivery in 2022-2023, with the letting of 85% of the 157 CDG building in Neuilly (delivered during the first half of the year), based on rents in line with or even above leading prime market levels. Nearly 80% of the space in the Boétie building was also pre-let during the first half of the year.
At end-June, €584m were still to be invested on committed projects, with €165m by end-2022, €261m in 2023, and €158m in 2024-2025.
The pipeline of operations "to be committed", i.e. "controlled and certain", groups together the assets held by Gecina that are currently being vacated and for which a redevelopment project aligned with Gecina's investment criteria has been identified.
This pipeline includes eight projects, with five offices, nearly 90% of which are located in Paris or Neuilly, that will be able to be committed to once the administrative authorizations have been obtained and they have been vacated by their current tenants.
All of these projects are subject to regular reviews in line with market developments, and the final launch decision can be taken by Gecina up until the effective redevelopment start date.
The "likely" controlled pipeline covers the projects identified and owned by Gecina for which tenant departures are not yet certain. The identification of these projects upstream is making it possible to achieve a potential yield on cost of around 5.2% with a portfolio of potential projects concentrated primarily in Paris City (c.90%). These projects will be launched as decided by Gecina in line with real estate market developments.
Portfolio value: +1.3% like-for-like over six months, driven by the most central sectors
| Breakdown by segment | Appraised values |
Net capitalization rates | Like-for-like change | Average values in €/sq.m |
||
|---|---|---|---|---|---|---|
| In millions of euros | Jun 30, 2022 | Jun 30, 2022 | Dec 31, 2021 | Jun 2022 vs. Jun 2021 |
Jun 2022 vs. Dec 2021 |
Jun 30, 2022 |
| Offices | 16,491 | 4.0% | 4.0% | +3.3% | +1.4% | 11,807 |
| Central areas | 13,915 | 3.5% | 3.5% | +4.8% | +2.2% | 15,809 |
| Paris City | 11,411 | 3.3% | 3.3% | +5.2% | +2.3% | 17,740 |
| - Paris CBD - Offices | 6,649 | 3.2% | 3.2% | +7.1% | +3.6% | 21,646 |
| - Paris CBD - Retail | 1,688 | 2.6% | 2.6% | +0.3% | -0.6% | 52,617 |
| Paris - Other | 3,073 | 3.9% | 4.0% | +4.6% | +1.7% | 11,353 |
| Core Western Crescent (Neuilly/Levallois, Southern Loop) |
2,504 | 4.5% | 4.5% | +3.1% | +2.0% | 10,321 |
| La Défense | 1,289 | 5.5% | 5.4% | -2.4% | -1.3% | 8,826 |
| Other locations (Peri-Défense, Inner / Outer Rims and Other regions) |
1,287 | 7.0% | 6.6% | -4.2% | -3.3% | 3,713 |
| Residential | 3,999 | 3.0% | 3.0% | +2.9% | +0.8% | 7,565 |
| Hotels & finance leases | 67 | |||||
| Group total | 20,557 | 3.8% | 3.8% | +3.2% | +1.3% | 10,623 |
The portfolio value (block) came to €20.6bn, up +1.3% like-for-like since the start of the year. This increase benefited from good trends for both offices and residential.
The like-for-like portfolio value growth for the first half of the year is linked exclusively to a positive "rent" effect on Offices. In the residential sector, this effect accounts for two thirds of the increase in value for the first half of the year.
On a like-for-like basis, for the office portfolio, the dominance of the most central sectors can be clearly seen once again. The value of the total office portfolio is up +1.4% over six months overall, with +3.6% for the Central Business District. In total, for the central sectors, i.e. Paris and the Core Western Crescent, the office portfolio shows a like-for-like increase of +2.2% compared with December 2021, significantly outperforming the peripheral areas.
For the traditional residential portfolio, the valuation retained is up +0.5% like-for-like. This increase has been driven by trends on the market for vacant properties, as well as the rollout of Gecina's new strategy on this asset class, with its first value creation effects (more ambitious investment plans and rental reversion).
For the YouFirst Campus student residences, value growth came to +3.3% like-for-like. The positive trend for the value of the student portfolio over the first half of 2022 reflects the ramping up of residence occupancy levels.
EPRA Net Tangible Assets (NTA) represent €181.2 per share (+3% over six months, +5% year-on-year) and €188.6 per share based on unit values for residential.
The EPRA Net Reinstatement Value (NRV) came to €198.9 per share (+3% over six months, +5% year-onyear).
The EPRA Net Disposal Value (NDV) was €187.9 per share (+9% over six months, +12% year-on-year).
This change benefited from like-for-like portfolio value growth, as well as the impacts of Gecina's total return strategy, particularly through the growth in value achieved for the portfolio under development, which came to +€204m for the first half of the year.
The change in EPRA Net Tangible Assets (NTA) per share came to +€4.8 over six months, with the following breakdown:
| - | Dividend paid in H1 2022: | -€2.7 |
|---|---|---|
| - | Recurrent net income: | +€2.7 |
| - | Like-for-like value adjustment on assets: | +€2.5 |
| - | Net value increase for pipeline and recent deliveries: | +€2.7 |
| - | Net capital gains from sales completed or under preliminary agreements: | +€0.1 |
| - | Other (including IFRS 16): | -€0.5 |
€139m of sales completed / under preliminary agreements / €134m of investments
€106m of sales completed during the year, achieving a premium of around +8.0% versus the end-2021 values, and €33m of additional sales covered by preliminary agreements
This sales volume mainly includes the sale of the Being building in La Défense, two small buildings in Paris during the first half of the year, and nearly €6m of vacant unit-based residential sales, achieving a premium of around +18% compared with the latest values from end-2021.
At end-June 2022, €33m of sales were also covered by preliminary agreements, concerning residential properties.
These sales aim to further strengthen the centrality of Gecina's portfolio, while maintaining an LTV at levels giving the Group financial flexibility.
70% of the €134m of investments were paid out during the first half of 2022 for the development pipeline or projects delivered during the year.
The balance corresponds to investments to improve the residential and commercial portfolio, helping capture the reversion potential identified.
On May 20, 2022, Gecina acquired 20.1% of the OPCI fund Euler, making it possible to increase our interest from 19.9% to 40% for €55m. This structure holds the asset located at 1-3 rue Euler in Paris' Central Business District.
The results published for the first half of 2022 reflect the good level of rental markets, the increase in both rental values and occupancy rates for assets, and the gradual upturn in indexation. Moreover, the pipeline's positive contribution, with major building deliveries scheduled over the year, further strengthens Gecina's confidence for the coming years.
For the first half of this year, Gecina's operational performance levels exceeded the Group's initial expectations on markets that once again show positive trends. However, these encouraging signs stand out in a context of rising interest rates, confirming Gecina's precautionary management of its balance sheet.
In a context that therefore requires a cautious approach, Gecina is raising its recurrent net income (Group share) target to €5.55 per share4 for 2022 (vs. €5.50 previously), with this growth now expected to reach +4.3%, or +7% excluding the contribution in 2021 of the buildings sold and a non-recurring effect received during the first half of 2021.
As a specialist for centrality and uses, Gecina operates innovative and sustainable living spaces. The Group owns, manages and develops Europe's leading office portfolio, with over 97% located in the Paris Region, and a portfolio of residential assets and student residences, with over 9,000 apartments. These portfolios are valued at 20.6 billion euros at end-June 2022.
Gecina has firmly established its focus on innovation and its human approach at the heart of its strategy to create value and deliver on its purpose: "Empowering shared human experiences at the heart of our sustainable spaces". For our 100,000 clients, this ambition is supported by our client-centric brand YouFirst. It is also positioned at the heart of UtilesEnsemble, our program setting out our solidarity-based commitments to the environment, to people and to the quality of life in cities.
Gecina is a French real estate investment trust (SIIC) listed on Euronext Paris, and is part of the SBF 120, CAC Next 20, CAC Large 60 and Euronext 100 indices. Gecina is also recognized as one of the top-performing companies in its industry by leading sustainability benchmarks and rankings (GRESB, Sustainalytics, MSCI, ISS ESG and CDP). www.gecina.fr
Financial communications Press relations Samuel Henry-Diesbach Tel: +33 (0)1 40 40 52 22 [email protected]
Sofiane El Amri Tel: +33 (0)1 40 40 52 74 [email protected] Julien Landfried Tel: +33 (0)1 40 40 65 74 [email protected]
Armelle Miclo Tel: +33 (0)1 40 40 51 98 [email protected]
4 This target excludes potential acquisitions or sales that have not been secured to date, and could be revised up or down depending on changes in the scope that could be seen during the year.
At the Board meeting on July 21, 2022, chaired by Jérôme Brunel, Gecina's Directors approved the financial statements at June 30, 2022. The audit procedures have been completed on these accounts, and the certification reports have been issued.
| In millions of euros | Jun 30, 2021 | Jun 30, 2022 | Change (%) |
|---|---|---|---|
| Gross rental income | 311.4 | 308.2 | -1.0% |
| Net rental income | 281.0 | 277.8 | -1.1% |
| Operating margin for other business | 0.6 | 1.4 | +148.7% |
| Services and other income (net) | 3.1 | 1.3 | -59.6% |
| Overheads | (37.7) | (39.1) | +3.5% |
| EBITDA - recurrent | 246.9 | 241.4 | -2.2% |
| Net financial expenses | (43.3) | (38.5) | -11.0% |
| Recurrent gross income | 203.7 | 202.9 | -0.4% |
| Recurrent net income from associates | 0.6 | 0.7 | +14.7% |
| Recurrent minority interests | (0.6) | (0.9) | +39.3% |
| Recurrent tax | (1.3) | (1.6) | +25.1% |
| Recurrent net income (Group share)(1) | 202.4 | 201.2 | -0.6% |
| Recurrent net income (Group share) per share | 2.75 | 2.73 | -0.7% |
| Gains from disposals | 0.5 | 4.9 | +907.1% |
| Change in fair value of properties | 187.5 | 362.9 | +93.5% |
| Real estate margin | (0.1) | 0.0 | -100.0% |
| Amortization | (5.1) | (4.8) | -4.9% |
| Net provisions and depreciation | (1.9) | (0.9) | -55.8% |
| Financial depreciation | 0.0 | 0.3 | na |
| Other non-recurring items | 0.0 | (3.5) | na |
| Change in value of financial instruments and debt | 7.6 | 12.1 | +59.4% |
| Share in non-recurrent net income from associates | 2.4 | (0.9) | -135.4% |
| Non-recurring tax | 0.9 | 0.0 | -95.2% |
| Non-recurrent minority interests | 0.1 | 1.6 | +1628.3% |
| Consolidated net income attributable to owners of the parent (2) | 394.4 | 573.1 | +45.3% |
(1) EBITDA excluding IFRIC 21 after deducting net financial expenses, recurrent tax, minority interests, including income from associates and restated for certain non-recurring items.
(2) Excluding impact of IFRIC 21
| ASSETS | Dec 31, 2021 |
Jun 30, 2022 |
LIABILITIES | Dec 31, 2021 |
Jun 30, 2022 |
|---|---|---|---|---|---|
| In millions of euros | In millions of euros | ||||
| Non-current assets | 20,039.8 | 20,612.6 | Shareholders' equity | 12,983.2 | 13,161.1 |
| Investment properties | 17,983.5 | 18,289.1 | Share capital | 574.3 | 574.3 |
| Buildings under redevelopment | 1,545.0 | 1,644.1 | Additional paid-in capital | 3,300.0 | 3,300.0 |
| Operating properties | 78.9 | 78.5 | Consolidated reserves | 8,232.7 | 8,698.9 |
| Other property, plant and | |||||
| equipment | 10.4 | 9.2 | Consolidated net income | 849.3 | 562.8 |
| Goodwill | 184.7 | 183.2 | |||
| Shareholders' equity attributable to | |||||
| Intangible assets | 10.6 | 11.1 | owners of the parent | 12,956.3 | 13,136.0 |
| Financial receivables on finance | |||||
| leases | 68.1 | 57.9 | Non-controlling interests | 26.9 | 25.1 |
| Financial fixed assets | 47.8 | 52.1 | |||
| Investments in associates | 57.7 | 114.5 | Non-current liabilities | 5,324.7 | 5,552.6 |
| Non-current financial instruments | 51.5 | 171.2 | Non-current financial debt | 5,169.2 | 5,288.8 |
| Deferred tax assets | 1.7 | 1.7 | Non-current lease obligations | 50.6 | 50.3 |
| Non-current financial instruments | 4.7 | 113.8 | |||
| Current assets | 399.2 | 514.9 | Non-current provisions | 100.3 | 99.7 |
| Properties for sale | 209.8 | 208.2 | |||
| Trade receivables and related | 44.0 | 61.0 | Current liabilities | 2,131.1 | 2,413.9 |
| Other receivables | 113.0 | 100.0 | Current financial debt | 1,743.8 | 1,798.6 |
| Prepaid expenses | 17.3 | 20.0 | Security deposits | 78.4 | 84.9 |
| Current financial instruments | 0.0 | 1.7 | Trade payables and related | 188.4 | 172.3 |
| Current tax and employee-related | |||||
| Cash and cash equivalents | 15.1 | 124.2 | liabilities | 48.6 | 89.4 |
| Other current liabilities | 71.8 | 268.6 | |||
| TOTAL ASSETS | 20,439.0 | 21,127.5 | TOTAL LIABILITIES | 20,439.0 | 21,127.5 |
| Group | ||||
|---|---|---|---|---|
| Like-for-like change | Indexes | Business effect | Vacancy | Other |
| +3.0% | +0.9% | 0.0% | +1.8% | +0.2% |
| Offices | ||||
| Like-for-like change | Indexes | Business effect | Vacancy | Other |
| +2.7% | +0.8% | -0.2% | +1.8% | +0.3% |
| Total residential |
Gecina's tenants operate across a very wide range of sectors responding to various macroeconomic factors.
+3.9% +1.1% +1.1% +1.9% -0.1%
| GROUP | |
|---|---|
| Public sector | 8% |
| Consulting / services | 15% |
| Industry | 36% |
| Finance | 7% |
| Media – television | 7% |
| Retail | 10% |
| Hospitality | 5% |
| Technology | 12% |
| Total | 100% |
| Tenant | Group |
|---|---|
| ENGIE | 7% |
| LAGARDERE | 3% |
| LVMH | 3% |
| WEWORK | 3% |
| SOLOCAL GROUP | 2% |
| EDF | 2% |
| YVES SAINT LAURENT | 2% |
| FRENCH SOCIAL MINISTRIES | 2% |
| ORANGE | 1% |
| GRAS SAVOYE | 1% |
| BOSTON CONSULTING GROUP & CIE | 1% |
| ARKEMA | 1% |
| EDENRED | 1% |
| RENAULT | 1% |
| IPSEN | 1% |
| LACOSTE OPERATIONS COURT 37 | 1% |
| SALESFORCE COM.FRANCE | 1% |
| MSD | 1% |
| LATHAM & WATKINS | 1% |
| ESMA | 1% |
| TOP 10 | 26% |
| TOP 20 | 37% |
| Volume of rental income by three-year break and end of leases (in €m): | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Commercial lease schedule | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | > 2028 | Total |
| Break-up options | 40 | 71 | 96 | 68 | 47 | 81 | 34 | 74 | 513 |
| End of leases | 39 | 22 | 48 | 25 | 42 | 95 | 47 | 195 | 513 |
Annualized rental income corresponds to the effective rental position on the reporting date. As such, it does not take into consideration lettings or properties vacated, or sales or acquisitions of buildings that would not have an impact by the reporting date.
Annualized rental income is stable for the first half of 2022 (+€2m) versus December 31, 2021, with the good like-for-like performance offset primarily by the departure of tenants from buildings transferred to the pipeline (mainly 32 rue Marbeuf).
€16m of this annualized rental income came from assets intended to be vacated over the coming years for redevelopment, including €4m for the buildings to be freed up and transferred to the pipeline in 2022.
This rental income also includes €3.4m for a building that will be subject to long-term renovation work (nearly one year) and was vacated by its tenant at the start of July.
| Annualized rental income (IFRS) | ||
|---|---|---|
| In million euros | Dec-21 | Jun-22 |
| Offices | 479 | 480 |
| Traditional residential | 105 | 106 |
| Student residences (Campus) | 22 | 22 |
| Total | 606 | 608 |
Gecina's gross financial debt(1) totaled €7,075m at end-June 2022, compared with €6,896m at end-2021, while net financial debt(2) came to €6,951m at end-June 2022.
The main characteristics of the debt are as follows:
| Dec 31, 2021 | Jun 30, 022 | |
|---|---|---|
| Gross financial debt (in million euros) (1) | 6,896 | 7,075 |
| Net financial debt (in million euros) (2) | 6,881 | 6,951 |
| Gross nominal debt (in million euros) (1) | 6,851 | 7,073 |
| Unused credit lines (in million euros) | 4,455 | 4,585 |
| Average maturity of debt (in years, restated for available credit lines) | 7.4 | 7.7 |
| LTV (excluding duties) | 34.2% | 33.8% |
| LTV (including duties) | 32.3% | 31.9% |
| ICR | 5.8x | 5.5x |
| Secured debt / portfolio value | 0.2% | 0.0% |
(1) Gross financial debt (excluding fair value items linked to Eurosic's debt) = Gross nominal debt + impact of the recognition of bonds at amortized cost + accrued interest not due + other items
(2) Excluding fair value items linked to Eurosic's debt, with €6,963m including these items.
The following table presents the schedule for Gecina's debt at June 30, 2022 (in billion euros):
| €bn | H2 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | 2036 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross debt | 1.4 | 0.4 | - | 0.5 | 0.1 | 0.7 | 0.7 | 0.5 | 0.5 | - | 0.5 | 0.5 | 0.7 | - | 0.5 |
| Financing (incl. unused credit lines) |
0.1 | 0.5 | 0.7 | 1.0 | 1.4 | 1.3 | 1.3 | 1.5 | 0.5 | - | 0.5 | 0.5 | 0.7 | - | 0.5 |
| Net debt (after allocation of undrawn credit lines) |
- | - | - | - | 0.2 | 1.3 | 1.3 | 1.5 | 0.5 | - | 0.5 | 0.5 | 0.7 | - | 0.5 |
Gecina's financial position at June 30, 2022 is compliant with the various limits likely to affect the conditions for repayment or early repayment clauses in the various credit agreements.
The following table presents the position for the main financial ratios covered under the agreements:
| Ratios | Covenant | Jun 30, 2022 |
|---|---|---|
| Loan to value (block, excl. duties) | < 55% - 60% | 33.8% |
| EBITDA / net financial expenses | > 2.0x | 5.5x |
| Outstanding secured debt / net asset value of portfolio (block, excl. duties) | < 25% | 0.0% |
| Net asset value of portfolio (block, excl. duties) in billion euros | > 6.0 - 8.0 | 20.6 |
The Gecina Group is rated by Standard & Poor's and Moody's. At June 30, 2022:
Standard & Poor's maintained its A- / outlook stable rating;
Moody's maintained its A3 / outlook stable rating.
The following chart presents the profile of the hedging portfolio:
Gecina's expected net nominal debt for the second half of 2022 is hedged for up to 90% against an increase in interest rates (based on observed Euribor rate levels, due to caps).
Based on the existing hedging portfolio, the contractual conditions and the existing debt at June 30, 2022, a 50 basis point increase in the interest rate yield curve compared with June 30, 2022 would generate an additional financial expense of €2m in 2022. A 50 basis point decrease in the interest rate yield curve would reduce financial expenses by €3m in 2022.
| Project | Location | Delivery date |
Total space (sq.m) |
Total investme nt (€m) |
Already investe d (€m) |
Still to invest (€m) |
Yield on cost (est.) |
Weighted average prime yield (BNPPRE/CBRE) |
Pre-let |
|---|---|---|---|---|---|---|---|---|---|
| Paris - L1ve | Paris CBD | Q3-22 | 33,200 | 513 | 87% | ||||
| Paris - Boétie | Paris CBD | Q1-23 | 10,200 | 176 | 78% | ||||
| Montrouge - Porte Sud Paris - Mondo (formerly |
Inner Rim | Q2-24 | 12,600 | 83 | 100% | ||||
| Bancelles) | Paris CBD | Q3-24 | 30,100 | 388 | 0% | ||||
| Paris - Marbeuf | Paris CBD | Q1-25 | 13,000 | 213 | 0% | ||||
| Total offices | 99,100 | 1,374 | 1,121 | 253 | 5.2% | 2.8% | 50% | ||
| Paris - Glacière | Paris | Q3-22 | 300 | 2 | |||||
| Ville d'Avray | Inner Rim | Q1-23 | 10,000 | 78 | |||||
| Paris - Wood'up | Paris | Q4-23 | 8,000 | 97 | |||||
| Paris - Dareau | Paris | Q1-24 | 5,500 | 51 | |||||
| Rueil - Arsenal | Rueil | Q1-24 | 6,000 | 47 | |||||
| Rueil - Doumer | Rueil | Q2-24 | 5,500 | 46 | |||||
| Bordeaux - Belvédère | Bordeaux | Q3-24 | 8,000 | 39 | |||||
| Garenne Colombes - Madera | Inner Rim | Q4-24 | 4,900 | 43 | |||||
| Bordeaux - Oasis | Bordeaux | Q2-25 | 7,700 | 39 | |||||
| Bordeaux - Brienne | Bordeaux | Q2-25 | 5,500 | 26 | |||||
| Paris - Vouillé | Paris | Q3-24 | 2,400 | 24 | |||||
| Paris - Lourmel | Paris | Q3-24 | 1,600 | 16 | |||||
| Paris - Porte Brancion | Paris | Q3-24 | 2,100 | 16 | |||||
| Residential densification | na | 1,900 | 8 | ||||||
| Total residential | 69,400 | 531 | 200 | 331 | 3.6% | 2.7% | |||
| Total committed pipeline | 168,500 | 1,905 | 1,321 | 584 | 4.8% | 2.7% | |||
| Controlled and certain: | |||||||||
| Offices | 85,800 | 921 | 617 | 304 | 4.8% | 3.2% | |||
| Controlled and certain: Residential | 15,900 | 100 | 33 | 67 | 4.4% | 2.7% | |||
| Total controlled and certain | 101,700 | 1,021 | 650 | 371 | 4.8% | 3.1% | |||
| Total committed + controlled and certain | 270,200 | 2,926 | 1,971 | 955 | 4.8% | 2.9% | |||
| Total controlled and likely | 79,700 | 809 | 619 | 190 | 5.2% | 2.9% | |||
| TOTAL PIPELINE | 349,900 | 3,735 | 2,590 | 1,145 | 4.9% | 2.9% |
| EPRA NRV (Net Reinstatement Value) |
EPRA NTA (Net Tangible Assets) |
EPRA NDV (Net Disposal Value) |
|
|---|---|---|---|
| H1 2022 NAV per share (€ per share) | 198.9 | 181.2 | 187.9 |
| 2021 NAV per share (€ per share) | 193.5 | 176.3 | 173.0 |
| Change over 6 months | +3% | +3% | +9% |
| Change over 12 months | +5% | +5% | +12% |
| At June 30, 2022 (In million euros) |
EPRA NRV (Net Reinstatement Value) |
EPRA NTA (Net Tangible Asset Value) |
EPRA NDV (Net Disposal Value) |
|---|---|---|---|
| IFRS equity attributable to shareholders Receivable from shareholders |
13,136.0 195.5 |
13,136.0 195.5 |
13,136.0 195.5 |
| Includes / Excludes Impact of exercising stock options |
|||
| Diluted NAV | 13,331.5 | 13,331.5 | 13,331.5 |
| Includes | |||
| Revaluation of investment property | 180.0 | 180.0 | 180.0 |
| Revaluation of tenant leases held as finance leases | 1.9 | 1.9 | 1.9 |
| Diluted NAV at fair value | 13,513.3 | 13,513.3 | 13,513.3 |
| Excludes | |||
| Deferred tax | - | - | na |
| Fair value of financial instruments | (59.0) | (59.0) | na |
| Goodwill as a result of deferred tax | - | - | - |
| Goodwill as per the IFRS balance sheet | na | (183.2) | (183.2) |
| Intangibles as per the IFRS balance sheet | na | (11.1) | na |
| Includes | |||
| Fair value of debt (1) | na | na | 556.9 |
| Revaluation of intangibles to fair value | - | na | na |
| Transfer duties | 1,247.7 | 134.8 | na |
| NAV | 14,702.0 | 13,394.7 | 13,887.0 |
| Fully diluted number of shares | 73,916,964 | 73,916,964 | 73,916,964 |
| NAV per share | €198.9 | €181.2 | €187.9 |
(1) Fixed-rate debt has been measured at fair value based on the yield curve at June 30, 2022
Gecina applies the EPRA best practices recommendations regarding the indicators listed below. Gecina has been a member of EPRA, the European Public Real Estate Association, since it was created in 1999. The EPRA best practices recommendations include performance indicators to make the financial statements of real estate companies listed in Europe more transparent and comparable.
Gecina reports on all the EPRA indicators defined by the Best Practices Recommendations available on the EPRA website.
The following table presents the transition between the recurrent net income reported by Gecina and EPRA earnings:
| In thousand euros | Jun 30, 2022 | June 30, 2021 |
|---|---|---|
| Recurrent net income (Group share) (1) | 201,195 | 202,422 |
| - IFRIC 21 | (10,219) | (11,257) |
| - Amortization, net provisions and depreciation | (5,135) | (6,238) |
| EPRA recurrent net income (A) | 185,841 | 184,928 |
| Weighted average number of shares before dilution (B) | 73,752,206 | 73,667,786 |
| EPRA recurrent net income per share (A/B) | €2.52 | €2.51 |
(1) EBITDA excluding IFRIC 21 after deducting net financial expenses, recurrent tax, minority interests, including income from associates and restated for certain non-recurring items.
| In euros / share | Jun 30, 2022 | Jun 30, 2021 |
|---|---|---|
| EPRA NRV | €198.9 | €189.6 |
| EPRA NTA | €181.2 | €172.6 |
| EPRA NDV | €187.9 | €167.5 |
| Diluted EPRA NAV | €183.8 | €175.3 |
| Diluted EPRA NNNAV | €192.2 | €171.9 |
The following table presents the transition between the yield rate reported by Gecina and the yield rates defined by EPRA:
| (%) | Jun 30, 2022 | Dec 31, 2021 |
|---|---|---|
| Gecina net capitalization rate (1) | 3.8% | 3.8% |
| Impact of estimated costs and duties | -0.2% | -0.2% |
| Impact of changes in scope | 0.0% | 0.0% |
| Impact of rent adjustments | -0.6% | -0.6% |
| EPRA net initial yield (2) | 3.0% | 2.9% |
| Exclusion of lease incentives | 0.2% | 0.3% |
| EPRA topped-up net initial yield (3) | 3.2% | 3.2% |
(1) Like-for-like June 2022
(2) The EPRA net initial yield rate is defined as the annualized contractual rent, net of property operating expenses, after deducting lease incentives, divided by the portfolio value including duties.
(3) The EPRA topped-up net initial yield rate is defined as the annualized contractual rent, net of property operating expenses, excluding lease incentives, divided by the portfolio value including duties.
| EPRA net initial yield and EPRA topped-up net initial yield | Offices | Traditional residential |
Student residences |
H1 2022 total |
|
|---|---|---|---|---|---|
| Investment properties (4) | 16,499 | 3,608 | 391 | 20,498 | |
| Adjustment of assets under development and land reserves Value of the property portfolio in operation excluding |
2,128 | 214 | 19 | 2,361 | |
| duties | 14,372 | 3,394 | 371 | 18,137 | |
| Transfer duties | 915 | 235 | 20 | 1,170 | |
| Value of the property portfolio in operation | |||||
| including duties | B | 15,287 | 3,629 | 391 | 19,307 |
| Gross annualized rents | 489 | 106 | 20 | 616 | |
| Non-recoverable property charges | 15 | 18 | 4 | 36 | |
| Annualized net rents | A | 475 | 88 | 17 | 580 |
| Rents at the expiry of the lease incentives or other rent discount |
39 | 0 | 1 | 40 | |
| Topped-up annualized net rents (3) | C | 514 | 89 | 18 | 620 |
| EPRA net initial yield | A/B | 3.1% | 2.4% | 4.2% | 3.0% |
| EPRA topped-up net initial yield | C/B | 3.4% | 2.4% | 4.5% | 3.2% |
(3) The EPRA topped-up net initial yield rate is defined as the annualized contractual rent, net of property operating expenses, excluding lease incentives, divided by the portfolio value including duties. (4) Excluding finance leases and hotel
| (%) | Jun 30, 2022 | Jun 30, 2021 |
|---|---|---|
| Offices | 6.8% | 9.5% |
| Traditional residential | 4.6% | 4.0% |
| Student residences | 30.4% | 39.4% |
| EPRA vacancy rate | 7.4% | 9.6% |
The EPRA vacancy rate corresponds to the spot vacancy rate at the reporting date. It is calculated as the ratio between the market rental value of vacant premises and potential rental income on the portfolio in operation.
The financial occupancy rate reported elsewhere corresponds to the average financial occupancy rate of the portfolio in operation.
The EPRA vacancy rate does not include the leases signed with a future commencement date.
| (%) | Market rental value of vacant space (€m) |
Potential rental income (€m) |
EPRA vacancy rate at end-June 2022 (%) |
|---|---|---|---|
| Offices | 35 | 521 | 6.8% |
| Traditional residential | 5 | 107 | 4.6% |
| Student residences | 8 | 25 | 30.4% |
| EPRA vacancy rate | 48 | 653 | 7.4% |
| In thousand euros / As a % | Jun 30, 2022 | Jun 30, 2021 |
|---|---|---|
| Property expenses (1) (2) | (114,733) | (113,248) |
| Overheads (1) (2) | (39,065) | (37,749) |
| Amortization, net provisions and depreciation (3) | (5,135) | (6,238) |
| Expenses billed to tenants | 84,351 | 82,775 |
| Rental expenses charged to tenants in gross rent | 0 | 0 |
| Other income / income covering overheads | 1,271 | 3,148 |
| Share in costs of associates | (136) | (143) |
| Ground rent | 0 | 0 |
| EPRA costs (including vacancy costs) (A) | (73,446) | (71,455) |
| Vacancy costs | 7,124 | 6,196 |
| EPRA costs (excluding vacancy costs) (B) | (66,322) | (65,259) |
| Gross rental income less ground rent | 308,193 | 311,447 |
| Rental expenses charged to tenants in gross rent | 0 | 0 |
| Share in rental income from associates | 906 | 780 |
| Gross rental income (C) | 309,099 | 312,227 |
| EPRA cost ratio (including vacancy costs) (A/C) | 23.8% | 22.9% |
| EPRA cost ratio (excluding vacancy costs) (B/C) | 21.5% | 20.9% |
(1) The letting costs, the compensation for eviction and the time spent by the operational teams directly attributable to the lettings, developments or sales are capitalized or reclassified in gains or losses on disposals for €5.7m in 2022 and €5.1m in 2021. (2) Excluding IFRIC 21
(3) Excluding depreciation of assets recognized at their historical cost.
| Jun 30, 2022 | Jun 30, 2021 | |||||
|---|---|---|---|---|---|---|
| In millions of euros | Group | Joint ventures |
Total | Group | Joint ventures |
Total |
| Acquisitions | 0 | na | 0 | 0 | na | 0 |
| Development | 92 | na | 92 | 88 | na | 88 |
| - Capitalized interest | 3 | na | 3 | 2 | na | 2 |
| Maintenance capex (1) | 42 | na | 42 | 38 | na | 38 |
| - Incremental lettable space | 0 | na | 0 | 0 | na | 0 |
| - No incremental lettable space | 37 | na | 37 | 34 | na | 34 |
| - Tenant incentives | 5 | na | 5 | 4 | na | 4 |
| - Other material non-allocated types of expenditure |
0 | na | 0 | 0 | na | 0 |
| - Capitalized interest | 0 | na | 0 | 0 | na | 0 |
| Total capex | 134 | na | 134 | 126 | na | 126 |
| Conversion from accrual to cash basis | -11 | na | -11 | 0 | na | 0 |
| Total capex on cash basis | 123 | na | 123 | 125 | na | 125 |
(1) Capex corresponding to: (i) renovation work on apartments or private spaces making it possible to capture reversion rental income, (ii) work on communal areas, (iii) tenant work
This document does not constitute an offer to sell or a solicitation of an offer to buy Gecina securities and has not been independently verified.
If you would like to obtain further information concerning Gecina, please refer to the public documents filed with the French Financial Markets Authority (Autorité des marchés financiers, AMF), which are also available on our internet site. This document may contain certain forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions on the date on which this document was published, they are by their very nature subject to various risks and uncertainties which may result in differences. However, Gecina assumes no obligation and makes no commitment to update or revise such statements.
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