Q3 2024 Gecina SA Earnings Call Transcript
Key Points
- 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.
- 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.
- 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.
- 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.
- 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.
- The investment market remains quiet, with limited deals and reduced liquidity, particularly outside central Paris locations.
- Leasing activity was impacted by the Olympics and political uncertainties in Paris, leading to a deceleration in Q3.
- The company faces expiries in the outskirts of Paris, such as Boulogne and La Defense, which could result in negative reversion and potential vacancy.
- Inflation is decreasing, which may reduce the contribution of indexation to rental income growth in future quarters.
- 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.
Hello, and welcome to the Gecina Business at September 30, 2024. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. (Operator Instructions)
Today, we have the CEO, Benat Ortega; joined by Deputy CEO in Charge of Finance, Nicolas Dutreuil as our presenters. I will now hand you over to your host, Benat Ortega, to begin today's conference. Thank you.
Good morning. Thank you for being with us today. Very happy to have the opportunity to present those -- this business update for Q3 2024 and answer your questions, obviously.
During this first nine months, gross rental income is up by 6.7% like for like, mainly driven by indexation, the effect of indexation, plus 5.4%, but also the contribution of reversion captured on new leases, a contribution of 1%.
Obviously, we have continued to get a significant rental reversion from our office business, plus 14% overall and even better in Paris at 28% during those three
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