In This Article:
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Gross Rental Income: Up by 6.7% like for like, driven by indexation (+5.4%) and reversion on new leases (+1%).
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Office Rental Reversion: Overall increase of 14%, with Paris experiencing a 28% increase.
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Residential Rental Reversion: Increased by 16.5%.
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Occupancy: Slightly up year over year.
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Development Programs: Delivered three large-scale programs on time and on budget, including Mondo (30,000 sqm), 35 Capucines (6,000 sqm), and Dareau residential conversion.
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GRESB Score: Achieved a score of 95%, ranking as the first REIT on offices.
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Green Debt: 100% of drawn and undrawn debt is fully green.
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Recurring Net Cash Flow: Expected to be around EUR 6.4 per share.
Release Date: October 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Gecina Nom (GECFF) reported a 6.7% increase in gross rental income like-for-like, driven by a 5.4% contribution from indexation and 1% from reversion on new leases.
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The company achieved significant rental reversion in its office and residential portfolios, with a 14% increase overall and 28% in Paris for offices, and a 16.5% increase in residential.
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Gecina Nom (GECFF) successfully delivered three large-scale development projects on time and on budget, including the Mondo office asset in Paris CBD, which was fully pre-let a year in advance.
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The company received an excellent GRESB score of 95%, ranking as the top REIT for offices, and achieved 100% green status for its drawn and undrawn debt.
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Gecina Nom (GECFF) expects its recurring net cash flow to reach EUR 6.4 per share, supported by successful leasing activities and development project completions.
Negative Points
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The investment market remains quiet, with limited deals and reduced liquidity, particularly outside central Paris locations.
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Leasing activity was impacted by the Olympics and political uncertainties in Paris, leading to a deceleration in Q3.
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The company faces expiries in the outskirts of Paris, such as Boulogne and La Defense, which could result in negative reversion and potential vacancy.
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Inflation is decreasing, which may reduce the contribution of indexation to rental income growth in future quarters.
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There is a notable imbalance in the market, with strong demand in central Paris but limited demand and increased supply in the outskirts, affecting rental rates and incentives.
Q & A Highlights
Q: Can you provide more color on the investment market, particularly in terms of liquidity and opportunities? Also, do you see any changes in leasing activity with corporates wanting employees back in the office? A: The investment market remains quiet, but there are still decent deals in central Paris. Corporates are reassessing office space needs, with some reevaluating the extent of space reduction. Leasing activity was impacted by the Olympics and political uncertainties, but demand remains for quality office assets in central locations. Benat Ortega, CEO