Hello, and welcome to Gecina Business of September 30th, 2026. Today, we have Beñat Ortega, CEO, and Nicolas Dutreuil, Deputy CEO in charge of finance, as our presenters. I will now hand you over to your host, Beñat Ortega, to begin today's conference. Thank you.
Good morning, everyone. We are pleased to update you on our activity over the first nine months of 2026. We have all seen our market conditions have evolved this year, and we have worked hard to deal positively with the situation on three fronts: our future revenues, our cost of capital, and energy. I would like to use my time to highlight where Gecina sits within this evolving environment. On the revenue side, we have achieved a record Q3 leasing activity in our office portfolio, with 92,000 sq m of renewal and reletting, representing now 140,000 sq m since the beginning of the year. It's one of the strongest performances in a decade. It also shows that our portfolio is not following market averages, which we then subdue. We have talked a lot about polarization recently, and it's only getting stronger.
It plays on two levels, where tenants decide to relocate on the best transportation hubs and on the highest quality buildings. This is the lens through which I would read our figures. I would like to draw four points from it. First, the quality of the mix of our leading achievements. More than half of the volume comes from new tenants choosing our platform because they better fit their needs, and the rest from existing tenants that agreed to stay longer in our buildings. We work both on attracting new consumers, customers and on securing our tenant base. Second, visibility. This lead secures around EUR 91 million of annual rent with an average maturity of six years. Third, La Défense. As you saw on Monday, we signed two long-term leases on Building B and Adamas, ensuring full occupancy for both buildings.
The best assets attract the best tenants in a selective market. This is the dynamic we want to build on for Shape, the former T1 tower occupied by ENGIE in the near future. Fourth, we have a further 40,000 sq m in advanced discussions, including assets from our development pipeline, for the next phase of growth to come from. Our housing portfolio has even been more successful. We signed 1,050 leases over the period, driven by the new offerings you are now familiar with, furnished serviced apartments with 250 units deployed and shared apartments. Let me turn now to our revenues. Like-for-like growth of 1.7% comes from both offices and residential, and it is well above indexation. Occupancy is high and sustained at 94%, with a record 97.4% in central Paris and Neuilly.
Over the years, we have deliberately refocused the portfolio on central areas where reversion is strongly positive at 11% on renewals and relettings. In other areas where market trends are not following the indexation, we have accelerated resetting rents to market levels in 2026 and 2027 in exchange of long-term commitments and better occupancy like we have just done in La Défense. On indexation, the slowdown continued as expected before the recent pickup in inflation starts to feed through to the rent at the end of 2027 or in early 2028. Regarding our cost of capital, our cost to operate. Before the summer, we secured EUR 1.5 billion funding. First, EUR 700 million bonds at pre-summer market conditions, a EUR 500 million benchmark in May, and EUR 200 million of taps of existing bonds.
Second, half a billion euros new or extended undrawn credit facility. Together, this refinanced nearly all our 2027 maturities and strengthened our liquidity. Third, more than EUR 330 million disposals at an average net dilutive impact of 2.9%. We have done this while focusing on our high-yielding accretive developments, which we are delivering on time and on budget. In a higher rate environment, this anticipation and discipline prepares growth from 2028 onwards. Last measure for this call is a word on sustainability. Gecina ranks first in its peer group in GRESB. This result reflects the same intensity and execution that we are applying everywhere else in the business on three fronts. First, energy consumption, where we pay close attention to detail. Building by building, we work on operations, equipment setting, and the daily performance of our assets to produce lasting savings.
Second, the energy mix. We are steadily shifting towards greener sources of energy across the portfolio and less carbonized. Third, transformation. Where it makes sense, we don't just optimize the building, we transform it. So that it meets tomorrow's standards in terms of performance and carbon. At a time where energy bills become critical, occupying a Gecina building means lower energy consumption and more future-proof buildings for our tenants. For our investors, it means lower obsolescence risk and protection of asset value. To conclude this first introduction, our 2026 guidance is confirmed with a recurrent net income group share between EUR 6.7 and EUR 6.75 per share. Thank you, and we are now to take your questions.
The next question comes from Florent Laroche-Joubert from Oddo BHF. Please go ahead.
Hi, Beñat. Thank you for this introduction. I would have two questions, and I can ask one by one. My first question is to come back to your leasing activity. It has been strong as we have been able to see it on the press release. When we look at your occupancy rate for your offices, it is well oriented on the last six months, maybe, but not yet on a year-to-year basis. What can we expect maybe for the period to come with regard to your occupancy rate in offices?
Well, I think, ideally, we are between 93% and 95% average occupancy for our office portfolio, which is a good target for the company. It might fluctuate from the departure on arrival. Obviously, we have worked a lot during this quarter and obviously since many months. In fact, also to secure occupancy in events. Part of the leasing activity there, like you saw in the reports, was anticipating the departure of ENGIE from B tower in 2027, mid-2027, and to release that in 2028 to new tenants. We have extended leases, renewed some stuff. The way to cope with this average occupancy is also always to anticipate, engage with our clients, and at the same time catch the tenants which are looking for better space, but also retain our clients.
Okay. Thank you. My second question, it would be more on your investment activity. I do not know if you can say a word on that, and maybe linked to this question. How do you anticipate the exercise by our partners to value your assets at the end of the year, given that we have been able to see some increase of interest rates?
Well, I think the rise in interest rates has rather dampened the investment market, let us say, which was not super active anyway. We see a pretty quiet investment market since the beginning of September, and we will have to see how it plays out. I think what comes with the rise in interest rates is also more inflation. That is not yet in our cash flow, obviously, as you know, because it takes time before the index, applicable to leases, capture that inflation and then the full-year impact. I think what comes with interest rates rise is also inflation. We have to see how all that plays out, and that will be for the next months.
Okay. Have you already had some discussion with your partners on this?
Not yet.
Okay. Thank you very much.
Thank you.
The next question comes from Valérie Jacob from Bernstein. Please go ahead.
Hi, good morning. I have a couple of questions. My first question is on your leasing. If you could share, what is the impact of all the renewal and releasing you have done since the beginning of the year? What will be the impact on the rent rolls overall for next year? Also, if there is any asset that was added to the pipeline where we are going to do with rent that we should know about? That is my first question.
Like I said, I think what we try to cover is obviously keeping the occupancy high. Part of those has been to retain tenants. We might have some departures. Some of them were already known. It is in Colombes. We lose Oracle in Colombes that has moved to Parisian assets early this year. I think, yeah, we will have some departures. We have a secured new. Obviously, ENGIE will depart. We lose the rent of ENGIE mid-June of next year. We lose also rents on that one, and we capture the rent from the new tenants more in 2028 than in 2027. It will be a year, like we said during the different calls earlier, a year of transition before we can kick our revenues up through the development pipeline and the average occupancy of the portfolio.
Okay. I just want to follow up on ENGIE, because I saw the termination fee was amortized over 2026, and you said you will receive rent in 2027 as well. Is it correct?
Yeah, it's a series of different indemnities that we have amortized through the P&L. So let's say that the deal with ENGIE is the fact that we can take back the premises on the tower, earlier, so from April 2026. But let's say in accounting and the cash collection, is equivalent, to the situation prior to the deal with ENGIE. So we have collected, basically, in 2026, the amounts that they were supposed to pay us for 2026, and we will collect in 2027, the amounts that they were supposed to pay us in 2027. It's through indemnities and not rents, but it's the same P&L and cash impact like if the lease would have continued until the end.
Okay, that's clear. My second question is, you've done a lot of lettings, but can you give us an update on lettings on your development pipeline? What can we expect? How your talks are progressing, and what are your expectations? Thank you.
Obviously, the general market is not super active these days in Paris. I think the country is in a wait-and-see mode before elections. What I would say and that you have seen in our results, we have leased almost 75,000 sq m of new space to new clients. That's in line with our annual average of the last year, while the market has gone down. So we have probably doubled our market share in terms of lettings, against what was happening in the previous years. We are working hard. I think our products, especially on the pipeline, are relevant. We have good discussions. Similar to what I said late July, because obviously, between late July and early October, there is September in France. August is rather quiet. So we are progressing well. Like we said, we have some discussions quite relevant. Hopefully, we'll have good news, but it takes time.
We are working hard on it and hope to satisfy all our investors as soon as possible.
Thank you very much. Thank you.
You are welcome, Valérie.
The next question comes from Thomas Rothaeusler from Deutsche Bank. Please go ahead.
Hi, good morning. I have got two questions. The first one is on the higher interest rate environment general. Just wondering if you could elaborate a bit more on the potential impacts on your business, like on financing costs, property values, disposals, maybe also on your CapEx plan. The second question actually is on pre-lets. Maybe you could provide some more color on the pre-letting progress and where you stand with regards to leasing negotiations.
On the pre-lets, Thomas, I just refer to where we stand to Valérie. I think, we have advanced discussions, and are progressing correctly. We have good visits with interest for the projects. Regarding the interest rates evolution, I think that you listed a bit all the potential outcomes of an interest rate increase into a risk. Obviously, it impacts our future financing costs. I think one should not take the immediate interest rates to calibrate what is the future of our funding costs. We try to anticipate those situations. Typically, when we issued a bond in May, in fact, we were refinancing a year and a half almost, the bond expiring in 2027.
We saw a good tension on our bonds late July, early August, so that we have even that summer for bonds for EUR 200 million in preparation for the 2028 expiry, so that not to take the full impact of the current interest rate increase. I think obviously, markets look day to day, but our business is a long-term business and each time we try to anticipate those elements. On that, some are not in our control. Typically, you were referring to appraisals. That is independent appraisals. What we have in our control, we try to anticipate, and that is typically what we have done on our funding activity early this year. The last element on CapEx, I think we have, like we referred to in our press release, we have a pipeline which is ongoing. We are close to the end of those projects.
We have roughly EUR 400 million to finance short-term. We have started this year by selling assets, and we will probably continue. It does not mean to vary, but we will probably continue to do so. That is a bit of view we have on that. Obviously, new CapEx for the future, we will be very careful based on the current circumstances.
Okay. Thank you.
You are welcome.
The next question comes from Stéphanie Dossmann from Jefferies. Please go ahead.
Hello, Beñat. I have a question regarding your reversionary potential. You give pretty different figures than previous periods. I would like to understand how they compare to previous periods. I appreciate the geographical mix and the, let's say, product mix matters. But I would like to gauge the evolution of central reversion on a like-for-like basis. Could you please provide us with one or two figures which could be comparable to previous periods?
Yeah. Two elements. You are referring to the uplift that we generate through our leasing activity. Maybe two-.
Correct.
Or three comments or color behind it. The first one is, when we look at Paris, for example, we have achieved around EUR 1,000 per square meter rent in average for a CBD portfolio. It's rather in line with what was there. We are keeping a quite high pace and high rent activity in the CBD. That's the first element. Second, I think the La Défense deal was a success. Signing 30,000 sq m of new clients in such a market was, I think, exceptional. Obviously, market rents in La Défense are not following inflation. I remind that the WALT was 12 years. It was 12 years from the inflation to where to mark down the rents. But I think it was a play, like I said, quite rational and anticipated by the market to get duration, occupancy, and get the rents we can get on those premises.
That plays a rather classic reversion, but with what you said, which is a geographic mix, which was different from the previous quarters. Yes.
Yeah, but for the 11% rental uplift you have achieved in what you call central locations, how does it compare to central location rental uplift in previous periods? I mean, is it increasing? How do you feel the market in terms of rental uplift on the same kind of product and location?
Again, the first half and last year, I think we are in the same range of rents. It depends on the maturity and which lease expires, but I would say it's rather similar. For the benchmarks, we are still significantly increasing the rents. I was reviewing the list of leases we have achieved this year, and we can achieve for some deals, smaller or service offices, 100%, 120%, 140% rental uplift for some locations. It's really depending on the mix of assets, mix of situations, but we are still delivering excellent results even on the CBD. In average, I would say similar in terms of uplift to previous quarters. In terms of rents, it's a bit similar, but very variable from the lease to another.
Okay, understood. My second question is correlated to that. I mean, regarding the demand and the structure of leases, you said that the average duration signed on leases was six years, if I am correct. Can you explain what are the current lease structure? I mean, what does the six years mean? Is it the firm lease period? Because usually you sign nine, 10 years lease duration, and with maybe six years firm period. Can you elaborate on that, please?
For the large, I would say A office, large scale deals, we are more in the range of nine years. You saw that our La Défense deal was more close to 12 years, and we are always, when we talk about duration, in terms of firm duration. In France anyway, you cannot sign leases below nine years, so most of the deals are between nine to 12 years in terms of lease duration, but we communicate on firm. Yeah, long-term leases for the large deals, and obviously, we have, for small surfaces inside the city, found better deals to go for more flexibly, more service offices, where the average duration is more in the range of three years. The mix of that is where you stand at six years. Firm.
Okay. Got it clear. Thank you so much.
You are welcome.
The next question comes from Alexandre Xerri from Invest Securities. Please go ahead.
Hi, Beñat. Thank you for taking my question. Just one on my side about the dividend guidance that you confirmed during the half year results when the ROE was under 4%, that you target to increase the dividend gradually, until the mid-20s. But nowadays, with ROE around 5%, can you confirm this guidance?
I didn't really get it. So what we have done this quarter is to confirm the guidance for 2026, in the range that we gave earlier this year. Obviously, like I said on previous questions, we will keep monitor what is the outcome of the interest rates and so on. But so far, we are in line with the plan. I think like some of your colleagues asked, leading on the pipeline sounds positive, and that would be the way for us to overcome the rising interest rates and generate sufficient revenue growth, to sustain the dividend. So, so far, nothing specifically different from what we said in the previous quarters.
Especially on the dividend, you do not plan to proactively stay at 5% to decrease it less in order to-.
You know, just to
To lower the impact on the net income.
We have talked a lot about our hedging portfolio. With the taps we have done and the new bonds and so on, we still have bonds expiring in 2035, 2036. Obviously the rising interest rates will be progressive. It doesn't mean it's good news, but we try to cope with the situation, and one of the ways to cope with the situation is to work on our hedging portfolio and manage the situation. That's the environment in which we are. But again, the pipeline should generate EUR 80 million- EUR 90 million rents, which is significant. That's why over the next year, I'm not saying until eternity, but at least we have the ability over the next year to own our funding costs, thanks to that long-term hedging profile. Hopefully, the ability is also on the rents on the pipeline.
I am not sure you remember, but we disclosed the mark to market of our fixed bond portfolio during our H1 results publication, which is something that you can look at for the NDV calculation, so third NAV, and it was EUR 450 million . Again, as Beñat said, we are thanks to this bond mark to market portfolio. It gives an idea of the savings we will be doing in the future in terms of cost of financing compared to today's market conditions. We have not made the calculation for today, but because of the interest rate increase, it should be much higher than the EUR 450 million.
Okay. Thanks.
The next question comes from Neeraj Kumar from Barclays. Please go ahead.
Morning, everyone. I was looking at your recent S&P report. It looks like you're super close to the downgrade threshold when it comes to debt to debt plus equity. You're at 39.9% as of H1 compared to the downgrade threshold of 40%. I wanted to check how well prepared you are to take down any valuations on the back of higher interest rates. Do you think your rating might be under pressure here, or you are open for other measures such as reducing equity remuneration or accelerating disposals to preserve the rating if the values were to drop?
Thank you for your question. We have multiple layers of capacity to manage LTV at a company like us. Good news, we have already experienced that situation in 2020, 2023. Yes, we are close to the threshold. That's why on previous conversation we had with all of you, we talked a lot about share buyback that says we need to be careful. The situation is volatile. That plays out now. We will manage the situation. I think there is a value creation embedded in our development pipeline. That's the support. We can work on inflation, obviously, and capture inflation through our rents. Obviously, interest rates will have an impact on valuation. We will see how all that plays out. It's quite early, to be fair. It's complex, but we have already managed that situation two or three years ago. The rate increase was even higher.
We will try to manage the situation.
Yeah, thanks for that. I think the bandwidth back then was much higher because you had much more headroom given you are close to the downgrade threshold now. Just wanted to check what kind of actions you are willing to take. No, thanks for that, Beñat.
You are welcome.
The next question comes from Michael Finn from Green Street. Please go ahead.
Yes, thank you very much. I just wanted to touch on your discussion earlier about the cost of capital, which, if I missed it, I think it was mainly focused on the cost of debt, which obviously overlooks the share price. I was just curious if you could shed a bit more light on how you consider the change in the share price over the year and what that actually means for your business, and how are you tailoring what you are doing to the change in your price effectively?
I think there are many ways which are in our control, some a bit less, typically market sentiment. That is why we first focused on our cost of debt, which is a good layer of our total capital, anticipating the market moves, issuing bonds, securing our debt financing and banking debt financing has been our focus in the past. Then it is how to sustain the share price, which is rather depressed these days. That comes to all what we have been discussing, which is the future of funding costs, which is the future of our income. How can we reassure the market on the fact that our offices are way more appealing than the average of the portfolio? I think there are many stuff that we need to work. That is why I said we work hard in fact to generate what can be reassuring for the market.
Okay. Yeah. Then, I think in the past then-.
In terms of capital allocation, obviously using our CapEx for disposals at low yields. Yeah, we try to play on all levels in fact to generate the growth our investors are expecting.
Yeah. On the triangle that you've discussed in the past, I think you mentioned the balance sheet disposals and the use of proceeds. What's your, actually, just a view on those three things?
I didn't really catch your question. Do you want to repeat what said? Yeah. Sorry.
In the past, you've referred to a triangle of different options. The three options that you've always discussed have been the balance sheet disposals, and then the use of the cash that you get from selling assets. I'm just curious if you could update me on how you currently see that, because in the past you're pretty adamant on how you saw those things, and obviously a lot has changed over the course of the year. I'm just curious if you could update me on how you currently see those things today, how you see those three different factors in your current plan, in your current business plan for the rest of the year and over the next five.
I think the pipeline we have three projects inside the city of Paris, one in a year. We will have T1 tower, so we have six CapEx to fund. Those projects are allowed. At the same time, the investment market is not super efficient, to be fair. We see more traction on the residential side than on the office side. That's what you have seen in the figures since the beginning of the year. That will be probably the case until the end of the year. I think we try to follow our path, which is obviously not easy to get. I think we have the right teams and the right engagement with investors and quite a diverse investor base to continue that path.
Okay. Yeah. I guess that it is obviously clear that the cost of debt is something that is obviously key, but I think there's a reason it probably would be better if you focus more on what's happening to your share price, not really what's going on with the cost of debt. That can obviously be totally wrong, but that's my view. That would be our view. But I think in general, cost of debt is obviously key. Rating is key, of course. But I think if you focus more on the cost of your, sorry, not the cost, on your share price and the year that we can trade, make calls based on that would be a better framing of those things rather than just talking about the cost of debt.
Yeah. Thank you for that, Michael.
The next question comes from Ebrahim Homani from CIC. Please go ahead.
Hello, Beñat. Hello, Nicolas. Thank you for taking my questions. I have two, if I may. The first one is about the CapEx on Shape. Is the project cost secured by the contractor? Are you signing with rig or is there any risk of higher costs? My second question is on your ability to outperform the market index. Do you consider that you will continue to outperform this index during the next quarter, even in an inflationary environment?
On the cost of Shape, we are finalizing studies. We took back the tower in April, dismantling a bit the firm facilities, making the full audit. We are not fully secured on the cost, but we have great visibility. I have a meeting in two weeks on that. The first time from my team is that we will be along the budget, ideally a bit lower. I would say it's a message also for my teams who are listening. I think we will be very careful on the fact that we want to have that tower priced because that's the best way to visit faster, and at the same time, not spend a fortune in it if it's not needed. So far, the audits are progressing well, and we should finalize the discussion and fix the price of the contract probably in the next weeks.
And outperforming the market. I think that's what we try to do. We are not a typical player in the market because we are an integrated platform. We are both entities, internal asset manager, internal works managers, internal energy experts. I think that's, that will be the way. We have less than 2% of the Paris region market, and we sign 7% or 7.5% of the market. So we have a significantly higher market share than what we own. For those reasons, one, the location of our assets, second, the quality of the building we do, and also the intensity the teams can put all together to achieve those deals. Just to give you the magnitude of the energy we can put in. For the La Défense deals, we communicated on two leads.
But behind those two leads, I think there are more than 10 agreements to make it happen. With the municipality to reassure the tenants on the quality of the common space around the tower. With some existing tenants to move them from a building to another. We achieved to cancel the lease of ENGIE for T1 tower, but that was not done for Building B, so we have to engage with [Suez] to do that. We have also agreement to make works. So it's a lot of work. And obviously, having integrated teams play the role. The two companies, you might have understood who it was, it's people that have huge cybersecurity, security, privacy, complex works because it's quite complex industries.
And obviously, having a landlord like us with the internal teams capable to answer their questions and reassure them is a key driver for the decision-making process on the tenant side. So hopefully we continue. At least we are very engaged for that.
Thank you very much, Dutreuil.
As a reminder.
You are welcome.
There are no more questions at this time, so I hand the conference back to Beñat Ortega for any closing comments.
Thank you all for listening, for your questions. As you can see, we are very active in this complex environment and hope to see you soon in the future. Bye-bye.