Gecina Sa · EURONEXT:GFC
Gecina Sa — H1 2022 Earnings Presentation
60 slides from Gecina Sa's earnings presentation, Jul 22, 2022
Slide 1: H1-2022 Earnings
H1-2022 Earnings Right place, right time - JulyTitre 22, 2022 Presentation 32 Marbeuf, Paris CBD
Slide 2: Contents
Contents 1 In a nutshell 2 Recurring Cash Flow and operating performance 3 Capital return / Net Asset Value 4 ESG return 5 Balance sheet structure 6 Perspectives and Guidance 2022 7 Appendix 2 - July 22, 2022 H1 - 2022
Slide 3: Gecina's DNA, well adapted to current environment
Gecina’s DNA, well adapted to current environment A relevant & unique set up to focus on operational excellence so to deliver cash flow growth Solid H1 performance boosting confidence 1 2 3 4 Robust Balance Accessibility Sustainable Grade Accretive pipeline Sheet & strong / Centrality A portfolio an
Slide 4: H1 2022 in a nutshell
H1 2022 in a nutshell Letting activity Gross rents RNR > 57,000 sq.m in H1 +3% LfL 12 months €2.73 per share Rental uplift +13% + 3.9% Occupancy rate +110bp excl. disposals and one off Valuation NTA Guidance +1.3% lfl vs. end 2021 €181.2 RNR / share guidance +2.8% in 6 months raised to €5.55 Fully d
Slide 5: H1 2022 marked by a solid operational performance
H1 2022 marked by a solid operational performance Offices Central areas (Paris City +Neuilly +Southern Loop) outperforming peripheral areas on all aggregates (80% of GAV) Positive ERVs dynamic for the best locations Uplift captured in H1 on relettings of c. +13% overall (+26% in Paris city) Ce
Slide 6: LfL rental growth in H1 2022 up +3%
LfL rental growth in H1 2022 up +3% A dynamic set to continue ahead with indexation starting to impact rents with a delay and on going vacancy reduction Average Financial Gross rents Change (%) Rental margin occupancy rate 93,1% June 30, June 30, June 30, Dec 31, June 30, Spot occupancy June 30, 202
Slide 7: Recurring Cash Flow & Operating Performance
RECURRING CASH FLOW & OPERATING PERFORMANCE SOLID TRENDS CONFIRMED IN H1 7 - July 22, 2022 H1 - 2022 55 Amsterdam – Paris
Slide 8: Polarized office markets supporting Gecina's operational performance
1.1 Polarized office markets supporting Gecina’s operational performance 8 - July 22, 2022 H1 - 2022
Slide 9: Polarisation is accelerating in favor of central locations
Polarisation is accelerating in favor of central locations Paris City : c.50% of total take up, and 17% of immediate supply Strong Take up recovery in Paris … ERVs moving further upwards (H1-2022 vs H1-2021) (New/ restructuring Q2-2022 vs Q2-2021) +53% +5.7% +24% +2.2% Paris City Paris Region Paris
Slide 10: Office portfolio: Centrality & Scarcity
Office portfolio: Centrality & Scarcity Grade A assets in Prime locations driven by Scarcity & Centrality 37 Louvre - Paris CBD 7 Madrid - Paris CBD Central Office portfolio: 84% in Paris City + Neuilly/Levallois + Boulogne/Issy (southern Loop) €16.5bn of offices Neuilly- Levallois La Défense 101 ch
Slide 11: Emblematic new transactions signed since H1 2022 at prime rents
Emblematic new transactions signed since H1 2022 at prime rents 157 CDG – NEUILLY SUR SEINE BOÉTIE – PARIS CBD May-22 Delivered in H1-22 February-22 8,000 sq.m, 7,800 sq.m, 9 years firm lease Tenant’s arrival Q1-2023 Tenant’s arrival Nov-22 (Eight Advisory) Prime rents in Neuilly Full renovation (€6
Slide 12: Strong leasing activity with landmark transactions
Strong leasing activity with 3 landmark transactions Setting new benchmark for prime rents Paris CBD c.950€/sq.m/year >€950/sq./year under discussion 930 € • Boétie - Paris CBD • c.80% pre-let 810 € 650 € • 64 Lisbonne – Paris CBD 550 € • Relet 100% Neuilly 650-700€/sq.m/year Prime CBD Prime Neuilly
Slide 13: Strong leasing activity in polarized markets
Strong leasing activity for Gecina in these polarized markets YTD Leading to an increase in occupancy rate by +110bp in 6 months c. 57,000 sq.m let in H1-22 c. 8y average firm maturity 70% 17% 13% related to renewals on vacant on assets under or relettings premises redevelopment With a +13% rental u
Slide 14: Ongoing leasing activity concentrated in the most supportive areas
Ongoing leasing activity concentrated in the most supportive areas Theoretical timeframe to clear vacant stock (in years)* Inner rim North La Défense Peridéfense Inner rim South Levallois Neuilly Centrality Southern Loop… Strong pricing & scarcity Other Paris power Paris CBD extended y 1y 2y 3y 4y 5
Slide 15: Residential portfolios proving resilient
1.2 Residential portfolios proving resilient 15 - July 22, 2022 H1 - 2022
Slide 16: Traditional residential
Traditional residential Strong resilience in occupancy, acceleration in reversion Traditional Residential : Average occupancy highly resilient and predictable 97.7% 97.6% 97.6% 96.9% 96.7% 96.8% 96.8% Resilience in occupancy (97,2% in average over the period) 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1
Slide 17: A unique residential portfolio
A unique residential portfolio Location & Quality Traditional Residential: very concentrated in Paris Student Housing Courbevoie Paris Lille Lyon 18’ Bordeaux 17’ 19’ Marseille 10’ 9’ Saint-Denis Lille 8’ Grande Arche La Défense 18’ 17’ 19’ 20’ 9’ 10’ 3’ Lyon 8’ 11’ 16’ 3’ 20’ Bagnolet 11’ 4’ 16’ 4’
Slide 18: Student housings
Student housings Strong rebound, back to pre-pandemic levels in occupancy, +15% in rents Occupancy expected back to pre covid levels in sept-22 vs. Sept-19 (at c.97.5%) → 95% already secured considering pre-booking at this stage Average Price up +16% vs. Sept-2019 Higher rents due to the optimizatio
Slide 19: All rental growth drivers positively oriented in H1
1.3 All rental growth drivers positively oriented in H1 (Occupancy rate / Rental uplift / indexation / Pipeline contribution) 19 - July 22, 2022 H1 - 2022
Slide 20: LfL rental growth outperformance in central locations
LfL rental growth outperformance in central locations Organic performance driven by central areas & residential portfolio LfL rental growth +3.0% Residential Student Offices portfolio Housing +2.7% lfl +1.6% lfl +19% lfl Vacancy reduction : +1.8% Reversionary potential & others : +0.2% Indexation :
Slide 21: Vacancy reduction
Vacancy reduction Started to feed lfl rental growth in H1 2022 Average occupancy rate up +110bp in 6 months 96.9% 96.8% 96.8% 94.2% 94.5% 93.3% Carré Michelet, La Défense 93.4% 93.1% 92.3% 91.8% 91.2% 90.7% Group Office Residential (incl. Student housings) Residential Horizons, Boulogne 2020 2021 S1
Slide 22: Reversionary potential captured in H1 (offices)
Reversionary potential captured in H1 Uplift captured on office relettings and renewals in H1 2022 +13% Mostly driven by Paris City + 25% in Paris CBD & 5th, 6th, 7th +38% other Paris 64 Lisbonne, Paris CBD 22 - July 22, 2022 H1 - 2022
Slide 23: Reversionary potential captured in H1 (residential)
Reversionary potential captured in H1 A positive momentum Residence Paris Nation Uplift captured along tenants’ rotation in H1 +10,2% +8,1% +8% in average in H1 +5,4% Jan-Feb March-April May-June 23 - July 22, 2022 H1 - 2022
Slide 24: Indexation contribution to LfL to accelerate further
Indexation contribution to LfL to accelerate further As following ILAT trends for offices with a lag effect 6% +5,1% Q1-22 5% +3,5% 4% Q2-22 3% +2,5% 2% 1% 0% -1% +0.9% in H1-22 -2% Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 IRL ILAT Effet i
Slide 25: Pipeline generated a net contribution to RNR of +€2.4m
Pipeline generated a net contribution to RNR of +€2.4m vs. H1 21 Net contribution from the +6 assets in 2021 & 2022 pipeline turned positive in H1-22 +€2.4m in H1-22 Paris Ivry Anthos Student Housing Boulogne 73% let Multi-tenants Deliveries Rental contribution largely from assets 2021 delivered in
Slide 26: H1-2022 recurring net results: operational performance and changing scope
H1-2022 recurring net results: operational performance and changing scope Optimization of financial expenses, net positive contribution from the pipeline, and impacts from disposals achieved in 2021 Positive contribution Cost of debt roughly In €m Organic performance to RNR in 2022 & 2023 stable at
Slide 27: Capital Return
CAPITAL RETURN SUPPORTIVE LEASING MARKETS & VALUE CREATION 27 - July 22, 2022 H1 - 2022 View from Boétie, Paris
Slide 28: Prime office yields stabilized in H1-22 amid rising inflation and rates
Prime office yields stabilized in H1-22 in the context of rising inflation and interest rates Prime CBD yield / Gecina’s portfolio yield vs French OAT & OATi (with coupon indexed) 5,5% 3,6% 2,7% 1,9% 2,0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 June 2022 -1,2% Pari
Slide 29: Investment markets dynamic where Gecina operates
In this context, investment markets have been dynamic in markets where Gecina operates March 2022 March 2022 Society Lorette Paris CBD 17 Beaujolais Paris CBD Dynamic investment markets c. €260m c. €26,000/sq.m c. €40m c. €27,000/sq.m for core assets & prime locations… March 2022 May 2022 Prime mark
Slide 30: Portfolio value up +1.3% LfL in H1
Portfolio value up +1.3% LfL in H1, benefiting from improving rental markets and embedded indexation Change on Average value per sq. Breakdown by segment Appraised values Net capitalisation rates comparable basis m June 2022 In million euros June 30, 2022 June 30, 2022 Dec 31, 2021 June 30, 2022 vs.
Slide 31: Office pipeline contributing to NTA growth with €171m net value creation
Office pipeline strongly contributing to NTA growth with €171m net value creation in H1 1 c.87% pre let c.85% let in H1-22 Opening letting process Delivery Delivered Delivery H2-22 H1-22 H2-24 L1ve 157 CDG Mondo Paris CBD Neuilly Paris CBD c.80% pre-let in H1-22 c.100% pre-let c.+€171m +€2.3/share N
Slide 32: Residential pipeline contributing to NTA growth with €34m net value creation
Residential pipeline strongly contributing to NTA growth with €34m net value creation in H1 1 Delivery Q1-23 c.+€34m +€0.5/share Les Terrasses Net value creation booked in H1-22 from Ville d’Avray assets under development Mostly driven by: Gecina’s project in “Ville d’Avray” closering deliveries One
Slide 33: NTA EPRA NAV supported by LfL valuation changes and pipeline value creation
NTA EPRA NAV supported by LfL valuation changes, and value creation from the pipeline Pre-leasing “Boetie” (CBD) Delivery and leasing of “157-CDG” (Neuilly) 184,0 € +2.2% in 6 months on central locations (Paris City/ Neuilly/ Boulogne), +1.3% in total 182,0 € + 0.1 € - 0,5 € + 2.8 € 180,0 € 178,0 €
Slide 34: ESG Return
ESG RETURN THE ROAD TOWARDS CARBON NEUTRALITY AND ENERGY SOBRIETY FY - 2021 34 - July 22, 2022 H1 - 2022 View from 7 Madrid, Paris
Slide 35: A new project launched to go further on CANOP-2030
A new project launched to go further on CANOP-2030 Contributing to governmental requirements for energy soberness for winter 22-23 GECINA’S PLAN ACHIEVEMENTS (ALREADY DONE) Task force created to go further c.30(1) on energy soberness and Office & Residential buildings have been contribute to governm
Slide 36: Balance Sheet Structure
BALANCE SHEET SOUND & HEALTHY BALANCE SHEET STRUCTURE FLEXIBILITY AND VISIBILITY FY - 2021 36 - July 22, 2022 H1 - 2022 View from YouFirst Campus – Paris La Défense
Slide 37: A proactive and robust liquidity management giving us time
A proactive and robust liquidity management giving us time ➢ Liquidity improved in H1 with a €500m opportunistic new bond issue in Jan-22 with a 0.875% coupon for a 11 years maturity LIQUIDITY POSITION (END JUNE 2022) BOND FINANCING SCHEDULE (END JUNE 2022, IN €BN) Net long-term liquidity (Undrawn C
Slide 38: Sound maturity and hedging profile
Sound maturity and hedging profile Feeding confidence and visibility for the coming years cost of debt 90% hedged against interest rate increase in 2022-2024 1 6,95 In €bn 6.4 6.2 6.2 5.4 5.1 75% hedged in average until 2028 Total debt H2 2022 2023 2024 2025 2026 Fixed rate debt and swaps Caps Long
Slide 39: Non Replicable Pipeline
NON REPLICABLE PIPELINE EMBEDDED GROWTH & VALUE CREATION FY - 2021 39 - July 22, 2022 H1 - 2022 Boétie, Paris
Slide 40: Project delivered in Neuilly in H1: 157 CDG
1 Project delivered in Neuilly in H1: « 157 CDG » 157 CDG 11,400 sq.m TIC €116m Delivered H1-2022 85% let at this stage Rents [€650-€700/sq.m] Yield on Cost c.6% Main tenants Pharmaceutical sector +Spie 40 - July - 22, 2022 H1 - 2022
Slide 41: Project in Paris CBD to be delivered in H2: L1ve
1 Project in Paris CBD to be delivered in H2 : « L1ve » L1ve Paris CBD 33,200 sq.m TIC €513m Delivery H2-2022 87% Pre-let at this stage Rents €800-€900/sq.m Yield on Cost c.5% Main tenants 41 - July - 22, 2022 H1 - 2022
Slide 42: New emblematic project in Paris-CBD: 32 Marbeuf
1 new emblematic project in Paris-CBD « Triangle d’or »: 32 Marbeuf 32 Marbeuf Paris CBD 13,000 sq.m 1,900 sq.m Paris CBD Gardens & rooftops Uplift in rents expected > +60% vs. Pre restructuring TIC €213m Delivery expected Q1 2025 Expected YoC > 5% Certifications Wiredscore, Well, Leed, HQE, BBCA, B
Slide 43: Embedded growth along deliveries in the years ahead
Embeeded growth along deliveries in the years ahead +€91m Committed pipeline Potential rents €584m 85% pre-let (headline, fully let, on office projects to be 72% offices (94% in Paris CBD) annualized) Remaining delivered in 2022-2023 28% residential Capex Deliveries 2022 - 2025 (- 6m€ annualized to
Slide 44: Guidance 2022
GUIDANCE 2022 44 - July 22, 2022 H1 - 2022 l1ve, Paris
Slide 45: Guidance 2022 reviewed upward
Guidance 2022 reviewed upward ➢ LfL progressive recovery driven by Rental indexation, Occupancy rates to gradually increase, positive reversionary potential to be captured c.€5.55 Per share +4.3% c.€5.50 (+7.0% €5.32/share Per share excl. Disposals and one off €5.19/share effect 2021) RRN 2021 RRN 2
Slide 46: Q&A
Q&A FY - 2021 46 - July 22, 2022 H1 - 2022 View from IBOX, Paris
Slide 47: H1-2022 P&L and Recurrent Net Income
H1-2022 P&L and Recurrent Net Income in million euros June 30, 21 June 30, 22 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% Salaries and management costs (37.7) (
Slide 48: H1-2022 Balance Sheet
H1-2022 Balance Sheet ASSETS Dec. 31, June 30, LIABILITIES Dec. 31, June 30, In million euros 2021 2022 In million euros 2021 2022 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 redevelopme
Slide 49: EPRA NAV indicators at end of June 2022
EPRA NAV indicators at end of June 2022 EPRA NRV EPRA NTA EPRA NDV Net Net Net Reinstatement Tangible Asset Dissolution Value Value Value IFRS Equity attributable to shareholders 13,136.0 13,136.0 13,136.0 Due dividends 195.5 195.5 195.5 Include / Exclude i) Hybrid instruments - - - Diluted NAV 13,3
Slide 50: Pipeline at H1-2022 in detail
Pipeline at H1-2022 in detail Total Total Allready Still to Prime Investment Invest Delivery space (1) (2) Invest Est. Yield yields % on cost Project Location date (sq.m) (€m) (€m) (€m) (4) (BNPPRE / CBRE) Pre-let Paris - L1ve Offices Paris CBD Q3-22 33,200 513 87% Paris - Boétie Offices Paris CBD Q
Slide 51: Development pipeline: embedded growth & capital value creation
Development pipeline: embedded Growth & Capital Value Creation PIPELINE EVOLUTION 2021 – H1 2022 CHANGE IN PIPELINE PERIMETER H2 2022 +€213m -€116m a new 1 office project start 87% pre-let + 1 more project Delivery Q3-22 transfered in H2 157 CDG Marbeuf €1.9 €1.8 Neuilly Paris CBD bn bn 85% let Deli
Slide 52: Annualized rent at end of June 2022
Annualized rent at end of June 2022 in €m June 30, 2022 Dec 31, 2021 June 30, 2021 Offices 480 479 494 Traditional resdiential 106 105 105 Student residences 22 22 18 Total 608 606 617 Annualized rental income is stable for the first half of 2022 (+€2m) versus December 31, 2021, with the good like-f
Slide 53: Rental Challenges in detail
Rental Challenges in detail ANALYSIS OF OFFICE BREAK-UP OPTIONS IN PARIS CITY ANALYSIS OF OFFICE BREAK-UP OPTIONS OUTSIDE OF 102 801 PARIS CITY sq m 92 831 sq m 103 043 sq m 73 814 74 038 85 381 sq m sq m sq m 60 465 73 605 sq m 64 785 sq m 61 258 sq m sq m 37 058 34 238 42 652 sq m sq m sq m 25 800
Slide 54: Proactive & sustainable management of debt
Proactive & sustainable management to enhance Gecina’s capacity to operate its strategy Average cost and maturity A3 / A- 1.2% of drawn debt Moody’s / S&P Average cost 0,1 Rating confirmed by Moody’s of total debt 7.7 (stable vs. 2021) the 01/07/2022 3.9% 7.5 0,0 3.7% 7.3 7.4 3.5% 7.1 €5.7bn 6.9 3.0
Slide 55: Financial ratios & covenants
Financial ratios & covenants 31/12/2021 30/06/2022 Gross financial debt (€ billion) (1) 6.9 7.1 Net financial debt (€ billion) (2) 6.9 7.0 Gross nominal debt (€ billion) (1) 6.9 7.1 Unused credit lines (€ billion) 4.5 4.6 Average maturity of debt (in years, adjusted for unused credit lines) 7.4 7.7
Slide 56: Hybrid letting approach to provide optimized returns
Hybrid letting approach to provide optimized returns A proactive letting approach combining flex « Plug & Play » and traditional office supply on same location “Plug & Play” Traditional offices A flexible office solution, targeting Ambitious restructuration process SMEs & large groups’ subsidiaries
Slide 57: Offices LfL rental growth up +3%
Offices LfL rental growth up +3% driven by indexation, vacancy reduction and rental reversion in central locations Offices LfL rental growth 2015-2017 by contribution 2,0% 3,5% 3,0% 3,0% 1,5% 2,7% +2,7% 2,5% 2,5% 2,5% 1,0% 1,9% In H1 2022 1,9% 1,7% 1,8% 2,0% 1,2% 0,5% 0,9% 0,9% 1,5% ➢ Strong recover
Slide 58: A leadership largely recognized by key extra-financial ratings
A leadership largely recognized by key extra-financial ratings Score ESG topics analyzed Ranking 2021 Environmental targets, action 2nd in the French 93/100 plans and performance office category 1 Governance Social responsibility of products Low risk Within the top 30% Human resources Governance AAA
Slide 59: Number of shares and shareholding structure at end of June 2022
Number of shares and shareholding structure at end of June 2022 Treasury stocks 3.7% Ivanhoé Cambridge 15.1% Crédit Agricole Assurances - Predica 13.7% Other shareholders 58.1% Norges Bank 9.4% June 30, 21 Dec 31, 21 June 30, 22 Number of shares issued 76,526,604 76,572,850 76,572,850 Stock options
Slide 60: Photo credit / Disclaimer
Photo credit FARSHID MOMAYEZ JAVIER CALLEJAS PCA JACQUES PINAULT JEAN-LIONEL DIAS SANDRINE MULAS VINCENT FILLON AGENCE SCAU GAMMA IMAGE VIGUIER MYPHOTOAGENCY / FLORIAN BEAUPÈRE GAMMA IMAGE JLL FRANCE CHARLY BROYEZ ALEXIS PAOLI SOXH FACTORY L'AUTRE IMAGE KREACTION PORTAIL PROSPECT AGENCE SCAU DUMEZ S