Welcome to Nexity's Conference Call on Revenue and Business Activity for the First Quarter of 2026. For the first part of the call, participants will be in listen-only mode. During the Q&A session, you can ask a question by pressing pound, then five on your telephone keypad. I will now hand over to Pierre-Henry Pouchelon, Group Deputy Managing Director in charge of finance and the development division's performance. The floor is yours.
Good evening, everyone, and thank you for joining us tonight for this webcast on Q1 business activity. I'm joined today by the investor relations team, and as always, there'll be a Q&A period at the end of the presentation. Let's start with our key highlights. First point on our business activity, a quick word on the housing market. Q1 2026 is very much in line with 2025. The residential market is still at a cyclical low with no real signs of recovery. Yet, the support measures announced at the start of 2026 have so far had very limited impact at the beginning of the year. The first quarter was also marked by a high level of uncertainty for our customers, given the highly downbeat geopolitical environment over the time period. In this context, 1,449 reservations have been registered, up 1% versus Q1 2025. I'll come back to this in a bit more detail in a moment. As every year, and this is important to keep in mind, first quarter activity isn't representative of the full financial year. That's a structural feature of the sector, with Q1 traditionally being the weakest quarter. Both sales, which accounted for 50% of volume signed in Q4 2025 alone, are very seasonal, as you can see. Second point, high-quality supply for sale.
We're well-positioned, 93% of our supply is now in high-demand a bis and B1 areas. As a result, the pre-selling rate for projects launched during the quarter reached 82%, and our sales cycle stands at five months, well below the market average, which reflects the strong appeal and quality of our available inventory. Third point on the group revenue for Q1 2026, EUR 518 million, excluding international operations and divested businesses, that is revenue for New Nexity is EUR 513 million, down 13% year-over-year. This was expected, and this is simply a mechanical effect of revenue being recognized on a percentage of completion basis. It is a reflection on the slowdown in business activity. You will understand, of course, that the macroeconomic environment will have an impact, but the outlook remains unchanged. Now, in terms of our Carrefour partnership, the first building permit has been obtained.
It's a key development. It was built in Lomme, north of France. It's a brownfield site repurposing and re-naturing project. It is an 8,300 sq m so-called brownfield site. It will become a mixed-use residential area with more than 120 family homes, more than 80% sold in bulk, and student residences, 300 units, 2,500 sq m of open ground. Very tangible expertise. Very tangible example of our expertise. This partnership represents at completion on 100% basis, an estimated EUR 2 billion in revenue and EUR 140 million in operating profit for Nexity. Now I would like to talk about the Permac risis. We have a slide that highlights the group's strength and our buffers. Our first buffer and asset is our low exposure to interest rate risks. With 100 BP increase, that would represent an additional cost of around €25 per month, a very real buffer then.
We've got a second asset, our quality supply lined with purchasing power, a loan equal rent offer through the combination of PTZ interest-free loan and reduced VAT rate 5.5%. Our clients can become homeowners with monthly payments comparable to rent. It is a very strong selling point in the current environment. Third asset, energy performance, which is a key factor differentiating new homes. New building housing allows occupants to make significant savings on energy bills. It is a lasting competitive advantage compared to existing housing. In the Paris region, for example, we've launched our first development as part of the geothermal joint venture with Accenta, who've also signed with Engie, the first Essentiel building in the Paris region in La Garenne-Colombes. It's a building with no heating or air conditioning needs, meeting, of course, the highest RE2020 standard.
Fourth asset, our financial discipline, strict compliance with commitment margins, 9.5% for retail, 8% for intermediate, and 6.5% for social housing. More specifically on construction, our land acquisition committees are held with the vast majority of construction contracts already signed. They all have a fixed price, non-adjustable clauses, and in practice, well, non-adjustable clauses can still be subject to case-by-case discussions with smaller suppliers in the event of significant raw material cost increases. We've always systematically factored in contingencies in our project appraisals, typically ranging from 3%-5% depending on the types of development. We've also massified our purchases, and we have these many levers to work on depending on the macroeconomic environment. Now let's move on to slide nine, which is about our business activity, our main indicators. I'd like to say a word about commercial real estate. It doesn't have a dedicated slide.
The market remained at a cyclical low in Q1, with investment down by nearly 50% nationwide and take-up in the Paris region down 15%. These market trends validated decisions we made in 2025. As a reminder, following summer 2025, we acknowledged a lasting freeze in office demands, something that is already reflected in our 2025 accounts. Against this backdrop, Nexity recorded a limited level of new orders in commercial real estate, EUR 10 million, mainly in the regions. The group is continuing its strategy of diversifying its commercial asset base, and our backlog currently being rebuilt stood at EUR 66 million at the end of March 2026. Now, as I told you in my introduction, 1,449 reservations in Q1 in this residential domain were observed up slightly, so 1% year-on-year. In retail sales, we had 1,000 reservations.
Again, these figures are not representative of the full year, and they need to be considered against the market still at a cyclical low. The Jeanbrun scheme did not have a significant impact during the quarter. It has to be noted that all of our sales teams have been trained on this scheme, and we very quickly incorporated it into our commercial strategy. Home buyers, the decline over the quarter, which represents only around 100 units, should also be viewed against an 11% year-on-year decrease in available supplies. We mainly targeted individual investment and development aimed at home buyers will be launched from Q2 onwards, especially in the Paris regions, with important and significant schemes. We have seen a slight increase, especially through the Jeanbrun scheme for individual investors. About 50 units sold as part of this scheme.
In bulk sales, here again, it's difficult to draw conclusions given the strong seasonality. 50% of total bulk volumes in 2025 were signed in Q4 alone. Now, supply for sale, 5,125 units, down 6% versus the end of 2025. A deliberate and controlled decrease with the sales cycle remaining stable at five months. Supply for sale ideally positioned, 93% of supply for sale now in the high demand areas, a bis B1 areas, up 17 points versus 2022. As of the 1st of April, 100% of supply is eligible for the PTZ interest-free loan scheme and the Jeanbrun scheme. It improves affordability for home buyers and supports the return of individual investors. The pre-selling rate for Q1 launches reaches 82%, which is a good indicator of the incoming pipeline. The amount of unsold completed homes remains negligible at around 100 units.
It's a reflection of our ongoing operational discipline. Slide 12, about our attractive and diversified supply for sale. Launches of attractive selective developments adapted to demand have been made. It is reflected in selling rates, proportion sold 30 days after launch, 3 x higher than in 2023. Another factor, our positioning in high demand areas eligible for the 5.5% VAT rate and our ability to offer home buyer-attractive financing solution leveraging schemes like the PTZ. As of the end of March, 40% of units is eligible for the loan and equal rent scheme to make home ownership more accessible. We're well-positioned to attract individual investors. The Jeanbrun scheme is now up and running, and it's a lever we expect to ramp up progressively, especially with the big networks that are being deployed, and that will be deployed by the summer. Services now.
It is also an instrumental sector during this cycle. When it comes to service properties, today I manage 138 residencies as of the end of March, representing around 70,000 units. Occupancy rate 98%. It is a record that speaks for itself. Our co-working business at 88 sites as of March, totaling around 170,000 sq m. Stable occupancy rate of 83%, and distribution recorded more than 600 reservations in Q1 2026. Let's move on to our revenue. Q1 2026, EUR 518 million for the group, of which EUR 513 million for New Nexity, down 13% year-over-year. Residential real estate development stands for 17% of revenue, EUR 405 million, down 14%. As I told you during my introduction, this was expected and is simply a mechanical effect of revenue being recognized on a percentage of completion basis. It reflects the decrease in reservations observed since 2022.
Commercial real estate stands for 1% of total revenue, with EUR 6 million due to the fact that the market is at a cyclical low. Services stand for 20% of New Nexity revenue, EUR 101 million, stable versus Q1 2025. Service properties up 5%, driven by higher occupancy rates. Distribution down 14%, down EUR 4 million. It's a decline that reflects an unfavorable base effect linked to the end of the Pinel scheme in late 2024, which had led to more signatures in Q1 2025.
Before discussing our guidance, I want to emphasize that our positioning for 2026 is resolutely offensive across our three client segments. Bulk sales, we are partnered with nearly 100 regional and national social housing operators. We have adapted our offer towards more compact housing with a stronger focus on climate adaptation, meeting the new specification of public procurement. For home buyers and our second market, our primary targets are first-time buyers, young families, and young professionals aged 20-35 without children, representing approximately 13.5 million people. This profile benefits fully from the PTZ and is structurally less sensitive to interest rate fluctuations. Our rent equals mortgage offer remains our central lever for attractiveness. For individual investors, the Jeanbrun scheme is our primary recovery lever. It reduces the monthly saving efforts from approximately EUR 600 to around EUR 350, a significant saving.
Our entire sales force is trained and deployed on this product, and we anticipate a growing contribution starting in Q2. To provide some medium-term perspective, our pipeline represents approximately five years of activity currently on hand. First, it consists of a backlog of EUR 3.7 billion, equivalent to 1.5 years of activity, which remains unchanged compared to December 31st. 45% of sales have reached their notarized deed stage, which secures our visibility. In addition, our potential business, standing at EUR 8.8 billion, equivalent to 42,000 units, representing additional 3.5 years. Obviously, this is linked to our selective investment committee, strictly adhering to our target commitment margins that I mentioned in my introduction. The pipeline serves as a robust leading indicator. The backlog fuels revenue for the next 18 months, while the business potential forms the foundation for future value creation.
Finally, our 2026 outlook remains unchanged, subject as prudence dictates, to no further deterioration in the macroeconomic environment. Our leverage trajectory remains a top priority. We demonstrated this in 2025, and we stick to our financial discipline regarding net debt, combined with a gradual increase in EBITDA despite the top-line dynamic that will remain constrained in 2026. We are targeting an improvement in operational profitability with an increase in New Nexity current operating profit, as well as a continued reduction in the leverage ratio. Our goal is to return to a level below our 3.5x target as quickly as possible, and by the end of 2027 at the latest. Before we move on to your questions, as a reminder, our upcoming events.
We have our annual general meeting on the 21st of May 2026, and the publication of our 2026 half-year results scheduled for the 23rd of July after market close. Thank you for your attention, and the team and I are now available to answer any questions you may have. If you wish to have a question, please press hash five on your telephone keypad to enter the queue. If you wish to withdraw your question, it's pound plus six on your telephone keypad. As a reminder, if you wish to have a question, please press hash plus five on your telephone keypad to join the queue. If you wish to remove your question, please press hash six on your telephone keypad.
If there are no questions, we would like to thank you for your attention, and we will see you for the half-year result on the 23rd of July after the market closes. Thank you very much.