Good day, and welcome to the Icade results, as of September 30th, 2022 conference call. Today's conference is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I now hand you over to Olivier Wigniolle, CEO, and Victoire Aubry, CFO. Please go ahead.
Thank you. Good morning, everyone, Olivier Wigniolle speaking. Thanks for joining this call tomorrow, today. I'm going to present our Q3 2022 figures for Icade's revenues and the key facts of the third quarter of the year. I will make this presentation with Victoire Aubry, our CFO. As said, this presentation will be followed by a Q&A session. Maybe to start, just a few words regarding the overall macroeconomic environment. As you know, the macroeconomy, the geopolitical, and the financial environment has been very volatile over the last nine months, leading for sure to complexity and making our business a little bit more challenging as we have to take into account this new environment.
In this context, we do think that Icade continue to maneuver in a way that is, let's say like this, agile and reactive. Let's go now directly to slide five to start the presentation with the key figures of our revenues. I'm now on slide five of the presentation. As you could see, the total revenues on a hundred percent basis amounted to EUR 1,249 million, which is an increase of +2% compared with the same figure last year. In group share, revenue increased by +3.4%. We do think that those figures are quite resilient.
If you look now more into the detail, if you look at the revenues from our investment portfolio on a group share basis, they increased by +3.2% up to EUR 425 million. On a like-for-like basis, we have a difference between the office portfolio and the healthcare division. With Victoire and I, we'll come back to the specific item that are behind those figures. For the property development division, the good momentum continued during the third quarters with a +3.6% increase in revenues over the nine months at EUR 734 million. Overall, as I said, the group share revenues amount to EUR 1,249 million at 3.4% increase.
Let's go now to slide six, and let me now comment the key highlights of the period. I'm on slide six of the presentation. The figures that we are presenting this morning reflects, in our view, a solid business performance and across the three different business lines. Victoire will elaborate more into the detail, but few numbers. For the office portfolio, the leasing activity remained very dynamic with more than sq m signed and renewed over the first nine months of 2022. The gross rental revenues amount to EUR 268 million.
I think it's a quite interesting level in our view, particularly in the context of a significant disposal, as you probably have in mind over the last two years in 2021 and 2022. Let me remind you that we managed to dispose this year close to EUR 600 million, after EUR 500 million in 2021. Clearly, asset rotation within the portfolio is an ongoing topic for Icade. Victoire will also comment the like-for-like evolution. These figures is in line with our budget and expectation.
Just to remind you that the like-for-like evolution improved compared to the same figure at the end of June this year. Regarding the healthcare division, the revenues are up 12%. It's a strong increase, and for sure, mainly driven by the investment recorded in 2021 and in the beginning of this year in 2022. For Icade Promotion, as I said, our development subsidiary, the sales momentum remains solid, still driven by a very strong demand for residential. Economic revenues of Icade Promotion stood close to EUR 800 million, up 2% with the same period last year. We probably give you more detail shortly.
The second, I think, takeaway of this figure is the asset rotation within the office portfolio that continued in Q3 with the disposal of a building called AXE 13 in Nanterre, a building let to AXA. Bringing the total amount of disposal for 2022 close to EUR 600 million. I think that is interesting to notice that all transactions were achieved in line with our last valuation. Our disposal plan for 2022 is now completed. We will continue in 2023, as we do think that the market appetite for the kind of office building, the kind of yield that we have on our building, that Icade has within its portfolio.
Maybe some word about our investment policy. As I said in the introduction, as you know, the financial environment has significantly changed since the beginning of the year. At Icade, we do think that we and we try to be financially disciplined. Therefore, we have to include in our acquisition model the new financial parameters. This means that we have to be even more selective than in the past. As a result, the volume of investment is lower compared to our budget, compared to last year. It's true for our two investment division, offices and healthcare.
We are still confident in the fact that this complex environment, this more volatile market, will also generate some appealing opportunities in the near future. On the liability side, and again, Victoire will come back to that and maybe will answer some of your questions. Important to highlight that we have what we do think is a very solid financial structure at the end of September. We have continued to improve our aging and maturity structure during the last three months. S&P has confirmed in July our BBB+ rating with a stable outlook both for Icade and Icade Santé.
On our low carbon goals, which is part of our DNA, to just remind you that we have increased our ambition at the beginning of 2022, and we are now aligning our three business line on the +1.5 degree pathway. Recently, the SBTI has approved our pathway, which is a good news for us. I will come back to the outlook and guidance in my conclusion, and I'm now leaving the floor to Victoire. Victoire, the floor is yours.
Thank you, Olivier, and good morning, everybody. Let me share with you the operational performance of each of our business line, starting with the office property division. I'm on slide eight. Let me elaborate first on leasing activity. It remained solid with more than 110,000 sq m newly signed or renewed over the first nine months, out of which 50%, 50,000 sq m are made in only Q3, nearly 50%, reflecting the very good dynamic in Q3 alone. Another KPI I wanted to highlight is that two-thirds of the total is related to new signatures, new tenants coming in. In total, the volume of signatures represents an additional income of more than EUR 23 million and a weighted average lease term above 6, at 6.5.
Among those figures, we remind on the slide the signature of 5,000 sq m, which is solid public tenants, the ANS, Agence du Numérique en Santé on Fresk in July, bringing the occupancy of the building to 92%, one of our key leasing issue for 2022. Interesting also to highlight the very dynamic leasing activity in our business park, Rungis. We sign in Rungis 40,000 sq m year to date, out of which 26,000 sq m in Q3 alone, reflecting attractiveness of this territory, combining offices, small lab facilities, services, and living spaces. Notice also that 60% is renewable and 40% represent new tenants in this area. Another great signing with 5,000 sq m in Pont de Flandre, another key and attractive territory for Icade, located in the north of Paris.
The occupancy rate of this business park located in the 19th district of Paris is above 90%. The gross rental income group share amounted, up to September, to EUR 268 million, a decrease by 1.6% compared to the same period last year in the context of sustained asset rotation, as Olivier said previously.
I remind you the combined disposal volume in 2021 and 2022 is almost EUR 1.1 billion, representing an annual rental income of approximately EUR 55 million, which means we were able to compensate nearly 100% of those disposals, in particular thanks to active leasing transactions. The rental income also benefited from the positive impact of 2021 acquisitions, namely Equinove and Prairial, as well as the 2021 completion of Fresk and Origine, representing in total an annual rental income of EUR 46 million. On a like-for-like basis, rental income was down 1.8%, an improvement of 1.7 points compared with June, fully in line with our expectation and also reflecting the dynamic leasing activity.
This improvement was driven in particular by the good momentum of the business park with Rungis, up 8.2%, as well as activity continuing in regions, +3.2%. We also had the inflation topics and its positive impact through indexation. As a reminder, 100% of our office leases are indexed on indices integrating an inflation component. 80% of the revenues are based on ILAT, 20% on ICC and ILC indices with no cap. ILAT end of Q2 represented +4.3%, ICC +8%, and ILC +4.4%. Progressively taken into account based on the path of the anniversary date of each lease contract, the average indexation that is reflected in Q3 for office rental income is +2.5%.
The impact for the whole year is still estimated at +3%. A word now on the financial occupancy rate. It stood at 87.2 % end of September, slightly higher compared to June. I said previously, the recent signature on Fresk, which will take effect in Q4 2022, will increase the Fresk occupancy rate, of course, to 92%, and also will therefore contribute, sorry, to the improvement of the group occupancy rate on a like-for-like basis, with an impact estimated around +0.6 points at the group level. All in all, in a market under normalization and in a context of dynamic asset rotation and significant disposals, those figures clearly reflect a very resilient operational activity. Last topic I want to share with you on the office division is continued asset rotation.
After the finalization in the first half of the disposal of two core assets, namely Millénaire 4 and Gambetta, for an amount exceeding EUR 400 million, Icade signed in July an agreement for the sale of AXE 13, a building in Nanterre. This new transaction, together with smaller ones, as mentioned in a footnote of the core press release, brings the total volume of disposal year-to-date to EUR 600 million. All those transactions have been carried out slightly above gross asset value end of 2021, an average of +2%. Our 2022 disposal plan is already achieved end of September. However, we remain, of course, as Olivier said, open to additional sale opportunity in the coming months, of course.
In the meantime, taking into account, in particular, the current financial environment, we reduce the volume of our investment on a year-to-date basis, with only EUR 164 million invested, mainly focused on our committed development pipeline. Compared to EUR 389 million end of September 2021, it represents a slowdown of 58%. Let's now move to the healthcare division on this slide. As Olivier Wigniolle said, commented before, our rental income is strongly up with an increase of +12% to EUR 157 million group share. This growth is mainly driven by the acquisition completed in the second part of 2021, mainly abroad. I remind you in Portugal with the acquisition of four private clinics, but also in Italy and Germany.
As I remember too, acute care and post-acute care sector remain by far the largest contributor to our rental base with 85% of the total healthcare rental income. Another interesting KPI, the collection rate is still 100%. As for the healthcare division, nearly 100% of the healthcare leases are indexed on indices integrating a significant component of inflation, mainly ELC, 55% of the healthcare revenue, and EPC, 21% of the total revenue of this division. As such, the indexation impact included in the nine-month rental income is +2%. We still expect the effects to be roughly +3% for the entire year. As for offices, I remind you that the indices are taken into account on the anniversary date of each lease contract. Two other very strong figures for the healthcare portfolio.
Financial occupancy rate is unchanged at 100%, and the average lease break is stable at roughly eight years. Let's review now what we achieved in terms of investment during the first nine months, including preliminary agreements, the volume of investment carried out by Icade Santé amounts to EUR 196 million year to date. This volume represent less than 40% of the investment made in the same period in 2021. As for offices, it represent a significant slowdown. On the back of the new financial environment, sharply rising interest rates, while transaction value remains stable, the healthcare property division adapted, clearly slowed its investment pace and increased selectivity, as Olivier highlighted. As a result, the annual volume of investment in 2022 should be lower than initially targeted, average of EUR 600 million.
Now on slide 10 for our third business line, property development with Icade Promotion. As Olivier previously said, sales momentum remains solid in Q3 2022, still supported by strong demand from individuals, with total orders for housing units up 5% in value, 6% in volume. This is, however, fair to say, the macroeconomic and financial environment led to a more wait-and-see attitude from some institutional investors and so longer period of negotiation. All in all, total housing orders amount to EUR 850 million, roughly stable compared to the same period last year. Economic revenues grew by 3% to EUR 800 million, helped for both residential and commercial segments. Looking at leading indicators, the midterm future for Icade Promotion is also well-oriented, with the medium-term revenues potential estimated at EUR 8.4 billion.
It includes the backlog at EUR 1.7 billion. It also includes the potential revenue of EUR 2.9 billion deriving from the residential portfolio that we do control through options or preliminary agreements. The indicator also includes, in Q3, a major project won in Roquebrune in the south of France. You have the pictures on the slide. Icade will jointly develop a large and mixed project representing a total of 400 housing units, representing EUR 200 million of revenues on a 100% basis. Just before handing over to Olivier for the outlook, I would like to say a word about the liabilities. Let me just remind you, Icade issued an eight-year maturity, EUR 500 million bond in January at a coupon of 1%.
Combined with an early redemption of a bond maturing in 2023, the group managed to optimize its cost of debt at 1.20 as of June 2022, and in the meantime, push back the due date of the next debt to 2024. Icade also continues optimization in Q3, with notably a EUR 100 million bond financing for Icade Santé on favorable terms, seven-year maturity with a coupon of 2.4. It's today very attractive, and a swap extension to continue to improve its solidity and age policy, both on Icade Santé and Icade side.
On the back of a solid cash position at almost EUR 3 billion, EUR 1.9 billion credit facilities and EUR 1 billion credit, cash position, which cover four years of maturity, and also a robust hedging policy with an average coverage around 94% for 2022, and above 85% for the next three years. No maturity before 2024, and an increased selectivity in the investment policy, where we can confirm the robustness of our balance sheet, and we are comfortable to face a new financial environment. I remind you, by the way, Standard & Poor's confirmed in July the BBB+ rating with stable outlook for Icade and Icade Santé. Olivier, I leave you the floor.
Thank you. Thank you, Victoire. Let's go now to slide 12 to conclude this presentation of our Q3 2022 revenues and to give you some outlook. As we state several times during this speech, for sure the macroeconomic and financial environment remains very volatile, not to say complex. In this new environment, we are not saying that the different crises have no impact on Icade, but we have good reason to be confident on our capacity to manage those impacts. Icade, I think, is adapting very fast to include the new financial parameters in our investment policy, but also in the way we do manage our businesses.
Finally, as Victoire just highlighted, we have the robustness of our balance sheet to support the growth of the company. In this context, we are very confident to confirm our guidance for 2022. The net current cash flow per share is expected up +4%, excluding the impact of 2022 disposal. The net current cash flow for the healthcare division will be up +5% to +6%. Finally, the board has confirmed the 2022 dividend policy, for sure subject to general meeting approval. That should be up +3% to +4%. Our next event will be our Investor Day.
This Investor Day that will be held on November 28th will provide an opportunity to go more into the detail of operational activities and to give you a more detailed vision on different markets in which we're active, and for sure to give you outlook for 2023. You have the agenda of the ID at the end of the press release. We will plan to hold this meeting in one of our appealing and very large asset, the Pont de Flandre campus in Paris, to make you discover or rediscover this territory and this asset that is so important for Icade. I hope we'll have the pleasure to welcome many of you for the Investor Day.
Thank you for your attention, and now Victoire and I are ready to answer your question.
Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question from the queue, please press star two. Again, please press star one to ask a question. We will take the first question from Stéphane Afonso from Invest Securities.
Yes. Good morning, and thank you for taking my question. The first one on the office division, could we have the reversion rate on renewals? Also, do you still target an occupancy rate of 90% by the end of the year? For the healthcare division, how confident are you with your current level of rent, in particular regarding the fact that some nursing home operators are facing operational issues. Finally, during your last Investor Day, you gave us a midterm guidance of your FFO. You expected an average annual growth of 4.5% by the end of 2025. My question is, do you still think that this guidance is achievable regarding the current climate of rising interest rates? Thank you.
I will answer the second and the third question, and Victoire will answer the first one. On the level of rent, for nursing home operators and also acute care asset operators, we are really confident. Just to remind you that the level of rent for the healthcare sector is not a question of supply and demand. It's really based on the cost of the property, and then you apply a cap rate.
Frankly, I don't think in the new financial environment that we have, I don't see how you could apply, you know, a lower cap rate, you know, to the cost of the building, you know, when in a world where the financial interest rates are increasing. If your question is about, you know, inflation, for sure inflation is a difficult topic for everyone. You know, it's true for us, but it's also for the operating company.
It's fair to say that if you look at the different ratio that we are following, you know, a fourth ratio, you know, EBITDA compared to rent compared to EBITDA, for sure you could have a slight decrease, you know, of this ratio in 2022, and even in 2023. It will depend on the level of inflation and therefore of indexation. For the time being, we have, you know, a collection rate of our rents in the healthcare division, which is at 100%. A significant topic. After that, you know, it's always a question of discussion and negotiation.
It is fair to say that some operating tenant could ask for cap on indexation for 2022 or for 2023. Maybe we will accept in some cases, you know, to negotiate that, but we will ask for sure for counterparts a bit like during the COVID-19 crisis, where we were asked deferred payment. We have granted some of them, but with the counterpart. We don't see any major topic in the level of rent for the healthcare division.
Having said, just to remind you that we are mainly exposed to acute care assets, and we are very few exposed to operators in the nursing home segment that could be, you know, in a difficult situation. We have a very close relationship with our tenant. As you probably have in mind, we have the strongest operators in our portfolio, and it's true for the acute care segment and for, you know, the nursing home segment, apart from well-known operators that have some difficulties. You know, the other leading players of the sector. We don't see any major issue.
Again, as of today, collection rate is at the level of 100%. Your last question was about the guidance. If I may, our midterm plan was covering, you know, the period 2019-2022, for the guidance that you were reminding will end, if I may, at the end of 2022. We'll have, for sure, at the beginning of 2023 to give indication of what are the midterm perspective. If you look at the agenda of the Investor Day, it's more about short-term topics, because fair to say that to have a clear view on the midterm perspective, it's a bit too soon. You know, what will be the final level of interest rate?
What will be the final of the growth of GDP in France? What will be the average level of office transaction? We are again we has confirmed the guidance, you know, for 2022. If you look backward at what was delivered in 2019, 2021 and 2022, apart from 2020 for COVID-19 crisis reason, I think we have delivered, you know, the guidance that we have announced for our midterm plan. For the next one, again, it's a bit too soon. As you know, the visibility on the midterm perspective, I think it's fair to say, but I think it's true for all the all the sectors, you know. It's limited visibility.
Let's see when we will present our results 2022 in February, what will be, you know, the forecast for the midterm perspective. On the reversion for the office renewal, Victoire, could you answer the question?
Yes, of course. In fact, when you are speaking about reversion, it's a case by case situation, to be clear. You know, it's also depending, and it's a central point, the age of the leases. Of course, back to AXA example, AXA renewal, for example, it's interesting to have in mind that AXA was an old lease with an age coming from 2007 , meaning that a long time ago. Of course we had some negative reversion on that rent. As I said, it's depending case by case. Clearly what is important to highlight is that each renewal is done in line with the current ERV, and it's also an important thing.
Having said that, for the first part of the year, the first six months, we estimate the reversion we have negotiated approximately -2% on average. One more time, you can even have positive reversion in some specific case, sorry, and also more significant negative reversion because it's very old leases. Clearly it's not. It's a case by case situation. Back to your question regarding the occupancy rate end of 2022. As you have seen at end of September, we were able to disclose slight improvement in this KPI. With the Fresk impact, we could expect another additional significant improvement.
In the meantime, have in mind that we have sold these new buildings, AXE 13, which is fully let. It will have also a negative impact on the occupancy rate at the end of the year. Perhaps not 90%, but I hope we will be above 87%, 87.2%, which is the figure end of September.
Okay, thank you.
The next question comes from Véronique Meertens from Kempen. Please go ahead.
Good morning, all. Thank you for the presentation and taking my questions. Perhaps first on disposals, you say you are open for potential new disposals. Obviously there have been only very few transactions lately. Can you tell, are there any discussions ongoing, and how do you see the appetite in the market? Secondly, could you perhaps elaborate on your talks currently with appraisers, also tying in with very few transactions in the market, how are they actually gonna incorporate, on the one hand, the higher indexation, but also the expectation of yields having to move up?
Yes, for sure. Thanks for the question. About disposal, it is fair to say probably that the volume that the market will deliver in the second part of 2020 will be lower than the first part. Having said that, as I said in my introduction, we really do think that the kind of building that we cap rate, just to remind you that our average cap rate for office service is 5%. On business park it's 7.2%. Disposal is not for healthcare, but it's an average cap rate of 5% on acute care.
This kind of, you know, I would say, core office building cap rate, between around 4 % or 5%, you know, good location, good tenant. I think the appetite of the market is really there. For sure, the money is now coming more from asset manager, especially sometimes retail, asset manager. We have, as I said, Victoire said, we have completed our disposal plan for 2022, but let's say like this, we have started to work on the 2023 disposal plan and we have tested the market, you know, on some assets.
We'll make the link with the second part of your question. It's also to have a clear view on what is you know the level of values of valuation you know in this new environment. Because you know appraisers and I will come back to that in a second but appraisal it's interesting but at the end of the day you know real transaction is much better. Let's say like this. Always you know a good evidence or proof for you know of the evaluation.
I think it's interesting to go a little bit more into the detail of the transaction that we have achieved on AXE 13, a building in Nanterre, where we have a significant part of our portfolio just behind La Défense. The transaction was signed at the beginning of August, you know, for the pre-agreement. The new environment was fully integrated by the buyer. We have a cap rate which is a little bit below 4.5%. I think it's a good interesting transaction that probably will be used by the appraisers, you know, for the valuation for the part of the portfolio that we have in the vicinity.
The discussion that we have with the appraisers, for sure we have started in advance this year, you know, the valuation campaign in order to understand what they will do in their appraisal. What we do understand that, as you said, you know, the volume of transaction will be probably more limited. In some geographical sector, maybe they will have no comparable. What we do understand, because it is fair also to say that in the market, you have some transaction or have been postponed. You know, it's fair, and it's true for Paris, it's true for the suburbs of Paris.
I think that it is some kind of an argument that appraisers will take into account. Also, you know, the increasing level of the risk-free interest rate to probably increase the kind of discount rate that they are using in their valuation. What we do understand also, I think it's difficult to give more accurate figures, but I think depending on the location, you know, the kind of the building, depending on the tenant profile, but I think they will increase their cap rate by probably, you know, +15 to + 30/+35 basis points at the end of last year.
A little bit too soon to have a more precise, you know, range of figures, but that's what we do understand. We will check for sure if we have some, you know, preliminary contacts for additional disposal. We will check that it is consistent with the kind of discussion that we have on the market. That's the kind of, let's say, like this, flavor that we have from appraiser at the end of the year. If you look and that's I think a key point for Icade, again, if you look at the kind of cap rate that we have on our office portfolio, let's see.
We really do think that the impact of increasing interest rates will be probably more limited on assets that have cap rate around 4.5%-5.5%, compared to asset with lower cap rates. Let's see what the market will do, and let's see also what the appraiser will announce. That's what they have in mind. I'm not saying that we are expecting no impact of the increasing interest rate that we have to face. I think that based on transaction and appraisal, the impact at the end of the year should be. It should be for sure negative, but limited.
Okay, thank you. That's very, very helpful. Perhaps one follow-up question. Given your LTV, probably some yield expansion and still the ongoing or the expected CapEx, isn't this the time to accelerate disposals, or are you very comfortable with your current LTV levels still?
No, I think, you know, the point is to manage the transition. For sure, the level of interest rate that we have now to face for Icade on 10 years, it's about 5%, was not the scenario that we had in our budget at the beginning of the year. I think the good news for Icade is that we have time to manage the transition. As I said, we have more than two years to adapt the portfolio, to adapt the financial strategy due to the structure of our liabilities and the way we could even improve the structure of our liabilities. For the time being, we do not plan to increase disposal.
For sure, we have in mind to keep the same level of disposal in 2023. Market permitting, because we'll see how the market will react. For the time being, and as Victoire said, we do reduce, for financial reason, you know, the volume of the investment for the healthcare division. But we do not plan to dispose of assets, you know, within the healthcare portfolio. What we do think is that probably the market will lead to some appealing opportunities. Because it is fair to say that some private real estate equity firms will have some, let's say, pressure to refinance their assets and so on. Probably we could have some interesting and appealing opportunities on the market.
If you want to be able to size them, it means that we will need to have more rotation within the portfolio. The way we do think at the near future is the following. Same volume of disposal again and again, to show what our valuation and so on and so on. If we see interesting and appealing opportunities in the market, we will have to dispose more in order to be in a position to size them. That's the way we look at 2023.
Okay, that's very useful. Thank you.
We will now take the next question from Florent Laroche-Joubert from Oddo BHF. Please go ahead.
Yes, good morning, Olivier. Good morning, Victoire . Florent Laroche-Joubert from Oddo BHF. Thank you for the presentation. Maybe I would have maybe one additional or follow-up question on healthcare, maybe to clarify. At this stage, you will be more selective on your investment. What we understand is that you can look at a very strong opportunity. In this case, you think that you will be in a position to dispose more offices. Is it correct?
No, it's not. It's not exactly that. On the investment side of the healthcare division, you have good news and bad news. The good news is that valuations in the market, and let's see, right, because there are several significant portfolios in the market for the time being. What we do see is that valuations are remaining stable, but I'd say increasing. Because the asset class is seen by some and maybe by a lot of investors as very defensive with the risk-return profile, which is attractive. So it means that you have, again, stable valuations compared to the end of last year, I'd say increasing valuations. You know, there are a lot of transactions showing that.
When we put in our acquisition model, the cost of financing that has been multiplied by 3 or 3.5 since the beginning of the year for Icade Santé, we could not or it's difficult to match the you know the market pricing. Because we have to increase the cost of financing. We had to increase the cost of capital. And therefore, sometimes we are not competitive. In some other cases, when you have special situation or more complex transaction, we could be, especially on Greenfield. Difficult for us to be for the time being.
Let's see again how the situation will evolve in 2023 with the new financial parameters for the significant volume of acquisition in the healthcare division. When I was talking through opportunities, I was more thinking on the office in the office portfolio. Because we do think that some players could have, you know, difficulties, you know, to refinance their portfolio. Maybe we look for a partner or maybe we try to dispose. My view was that we will see probably in the near future some opportunities on the office market.
For the healthcare division, I think we need to wait a bit to see what will be you know the outlook for the valuation in the healthcare segment. Fair to say that when you have cap rate for nursing home at 4.5% or 4.25%, not to say 4% for prime you know nursing home in Germany or in France, difficult for Icade Santé to increase the portfolio with the cost of financing yeah at 5%+ you know. The cost of capital around 7%-8%. That was my point. On the office division, probably more opportunities in the near future for Icade.
I don't know if my answer is clear for you, Florent.
Yes. No, very clear. Thank you very much.
We will now take the next question from Ben Richford from Société Générale . Please go ahead.
Good morning. Can you hear me?
Good morning.
Hi, can you hear me? Hi there.
Yeah, yeah, sure.
Thanks for taking my question. A couple of questions, just on Icade Promotion. You're seeing, it seems like no slowdown in demand for residential from individuals, but you also highlight the disposal on potential block sales. How does that change things for yourselves? Were the sort of block sales institutions significant for you in the past? Are you able to scale them back and still achieve the good pricing from individuals? Do you expect that market to change given the higher mortgage costs today? That'll be my first question, more around residential sales and promotion. Secondly, your shares are effectively pricing in an equity offering. You said in the past or indicated that you might issue equity for healthcare. I suspect the two maybe have some relation.
Are you kind of ruling out acquisition growth in healthcare funded from new equity? That's the question. Two questions.
The first one on Icade Promotion, our development subsidiary. For the time being, you know, residential demand from individual is still quite strong. Even with, you know, increasing cost for mortgages in France, and maybe there is a direct link between the two point, you know. I think that our individual clients, they have in mind that maybe mortgages will continue to increase, and therefore some of them, they try to speed up their acquisition project. For the time being, you know, the demand from individual clients is really satisfying. The available stock, you know, on the market, and it's true for Icade Promotion, but also for other developers is really limited.
The point is, with, you know, as you know, during the last two to four years, that institutional investors were, which was good news, which was something quite new for the French market over the last 10 years. I think that now, with the current, you know, cap rate at which we are buying, you know, residential project, you know, 3.25%. With the new financial environment, fair to say there are probably less appetite for residential, you know, bulk acquisition. Maybe in the near future, we will be able to present, you know, a new project at higher cap rate, and therefore to continue to attract institutional investor.
For the time being, the immediate consequence of that is that we will have to do more individual sale and probably less bulk sale to institutional investors. Really the market in our view is still quite well-oriented. If you look at the new orders this year from individual clients, it's really well-oriented. We have no major concern about that. The question is always, you know, at the end of the day, the level of mortgages. Today they are around 2.5%-3%, and it's really manageable. For sure it's higher compared to one year or one year and a half ago.
If you look on the midterm, long-term perspective, it's still quite low. For your second question, you know, it's always a question of for sure, like we could raise some new equity for acquisition now. There are a lot of liquidity around the asset class. The point for us is, what is the cost of capital for us? What is the cost of capital for large insurance company? What is the cost of capital for retail asset manager? And what is the cost of financing? At Icade Santé for the time being, we work, you know, on the acquisition model that we have. We use financial parameters that are coming from Icade.
We have a cost of capital, we have a cost of financing. If you look at our partners, life insurance company, they are probably a lower cost of capital than the one that we have at Icade, and they are probably less appetite for leverage compared to our appetite. If you look at retail asset manager, they are probably a cost of capital, which is even lower compared to life insurance company, and they are more or less very limited user of leverage. Maybe we could raise some equity if we want to do some deal. For sure, we don't want to lower our cost of capital just to make an acquisition. It is what it is.
They are benchmarks. They are listed healthcare-related companies, and the kind of figure that we are using to make acquisitions. If you look at, you know, what our colleagues, our Asian colleagues are doing, I think they will probably have the same, you know, moves as the ones that we have. They will probably reduce their volume of acquisitions. If we do think that there are appealing or interesting, you know, portfolios in the market, which is the case for the time being, we could seek to set up some JV, you know, where we could raise equity coming from other partners.
For us, we try, and I think it's fair to say that we have been, we will remain financially disciplined, especially in a period where everything is volatile, and where visibility is a little bit low. We don't want to take any financial risk just to close acquisition.
Great. Thank you.
The next que-
I think we could, yeah, we could take a last question because we have a meeting at ten, so, and if you have additional questions, do not hesitate to send them to Anne-Sophie , Victoire or myself. Let's go ahead for the last question. Yes. Thank you.
Thank you. We'll take the last question from Marc Mozzi from Bank of America. Please go ahead.
Yeah. Thank you, Olivier . Just a very quick one for me. Number one, what was your leasing spread? Probably, I joined the call later, too late, but do you have any indication of what was the leasing spread for your office segment? Number two, I am right to say that-
Sorry. Sorry, Mark, I didn't catch your question. Could you repeat?
The leasing spread of your new renewal for your renewals you've done in offices.
Slightly negative.
Okay. The other one is about making sure I understand correctly your numbers. Is your like-for-like now proportionate, and in H1 it was group share? Does it mean the same thing, or I am right to understand the group share is not the same as proportionate. We're not comparing apples and apples between nine months and H1 here.
Victoire, could you answer the second question?
Of course, when we compare figures, it is done on the same calculation, you know. Of course, when we are speaking about group share, we compare figures on group share basis. If we are speaking about a 100% basis, it's also on the same type of calculation. I'm not sure to fully catch your question, Marc, but..
In one case, it's written group share in H1. In the other case, it's written proportionate in nine months for the like-for-like rental growth. That's it. I just wanted to make sure it was the same number or the same basis.
It is, Marc.
Okay. Superb. That's it for me. Thank you very much.
Well, thank you very much.
Thank you.
All of you who have joined this call. As I said, I hope we will have the pleasure to welcome you during our Investor Day at the end of November. Again, if you have additional questions, do not hesitate to send them to Victoire, Anne-Sophie or myself. We will revert very quickly. Thank you very much.
Thank you very much. Have a good day.
Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.