Gecina S.A.

Hello and welcome to Justina Q1 2026 Activity Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Today we have Beniette Ortega, CEO, and Nicola Dutroy, Deputy CEO in Charge of Finance, as our presenters. I will now hand you over to your host, Beniette Ortega, to begin today's conference Thank you.

Good morning, everyone. It's a pleasure to share an update of the execution of our strategy today. One word to begin with on rental income. Our rental income increased in Q1 on a like-for-like basis of 2.3% to 176 million euros. This again shows our ability to outperform indexation supported by rental uplift and a consistently high level of occupancy. As expected, indexation is decelerating, reflecting the slowdown in inflation and construction costs in France last year, with the usual lag effect embedded in our leases. On a current basis, rental income reflects the impact of the significant disposals executed last year, as we recycled mature capital from residential assets into higher-yielding opportunities in the office segment. Occupancy remains high and broad is stable year-on-year, with more than solid activity in Paris and an acceleration of our residential occupancy. The temporary increase in vacancy in Boulogne reflects the time required to release surfaces vacated following lease maturities last year. But we have signed several leases in Boulogne during Q1, and public transport will improve significantly with the upcoming arrival of a new metro ring line next year after some delays. Turning now to leasing activity, we started 2026 with a solid leasing momentum. It's been 23,000 square meters signed between January and March, securing 18 million euros of annual rent, on an average lease maturity of around seven years. Around one-third of this performance relates to renewals, illustrating our ability to anticipate lease maturities and secure occupancy ahead of time, while the remaining two-thirds come from new clients, reflecting continued business development. The development of our fully managed offices is also progressing very well. These represent more than 16,000 square meters and 16 million euros of annual rent, marking a 33% increase compared to the figures we shared at the end of 2025. We are convinced there is a strong demand for high-quality, well-designed spaces, offering more services and greater visibility. and we will continue the rollout of our food service business in the next quarter. On the residential side, leasing dynamics are also positive, with 335 leasing signs up 12% on a life-for-life basis. This confirms both the strength of our operating housing platform and the relevance of our diversified offering. Let me now spend the time on the pipeline, We continue to see a lengthy activity and interest across all our departments, and that includes also C1 Tower, now named Shape. Discussions are active and well-qualified, involving a diversified mix of large corporates as well as mid-sized or small teams. On several assets, we are running parallel expression of interest and discussions, which is a positive sign for demand depth. 60% of signature, the first asset to be delivered end of 26 is now secured, including a landmark deal with the global real estate expert, GLM, on almost 7,000 square meters, and ongoing negotiations are occurring on several other floors. As you would expect, discussions are at different stages of maturity. For assets with later delivery dates, conversations are naturally at early stage, while visibility and conversion tend to improve as construction progresses and projects become more tangible for tenants. Lastly, portfolio rotation continued in 2026. The €200 million disposals at a 3.5% yield allowance at the full year are now fully completed. And in addition, we have secured a further €50 million of disposals at a 2.2% yield, reflecting the quality and maturity of the asset sold. This process will fund the €265 million of development capex currently being invested in the four large flagship projects we are familiar with, targeting double-digit yields on capex. It clearly illustrates the value creation embedded in our capital recycling strategy. The repositioning of T1 is also progressing as planned. The tenant has moved, allowing us to start work early May, around 15 months ahead of lease expiry, while securing rental income until June 2027, and therefore meaningfully reducing the expected void period during renovation. Overall, these actions are fully aligned with our core objective of improving returns for shareholders, while preserving a resilient and future-proof leverage profile. We remain disciplined and pragmatic in our capital allocation, continuously assessing all options with no taboo. One last word before turning to your questions. Based on the performance we have seen so far and our current visibility, we confirm with confidence the guidance we have already shared with recurring net income expected in the range of 6.7 to 6.75 euros per share. Thank you.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. If you wish to withdraw your question, please dial pound key 6. The next question comes from Florent LaRoche-Hubert from AutoBHF. Please go ahead.

Florent LaRoche- Yes, good morning, Bernard. So, thanks for this presentation. I would have maybe two questions. So, the first one on the leading side. I understand that you have a civil discussion in progress and you are confident about the leasing of your development project and time assets. But what about Boulogne? So we have seen that the vacancy has increased this quarter. So do you think that now we have touched a low point? And when do you think that Boulogne can be positive in terms of leasing activity and in terms of occupancy for projects in Africa?

Yeah, on Boulogne, I think we are close to the low point, obviously. We are releasing progressively the square meters we have available. We have three buildings there. We have signed, as I said, several leads already in Q1. I think, you know, leading is not a progress. So we should improve progressively the situation. And as I mentioned, you know, the metro line, we are expecting the metro line for now three years. the trend station is finalized and should open, you know, probably late this year or early next year, and I think it could improve significantly the attractivity of that area.

Okay, so now, meaning that, okay, maybe we can expect more positive to come from Boulogne, or neutral positive?

Yeah, if the product ramps up, yeah.

Okay, okay, that's good. And maybe there's a second question on share buyback. So we understand that maybe you are today more open for share buyback. So how would you like to include it in your allocation policy? And maybe at what share price could be interesting for you to look at share buyback according to the current market condition on the tonnage data?

I wouldn't say we are more open or less open. Like we mentioned in the earlier calls, we have a triangle approach on cafeteria location. Obviously, it starts from disposals. It needs to be in line with the objectives we have for the balance sheet. And then once we have the cash, we need to assess which is the best option. So obviously, and the best options depend on opportunities on the market and the share price, and therefore always linked to the cost of capital and the best use of the capital. So that's why we said, you know, with no taboos, we'll find the best options based on those three elements, which is balance sheets, disposals, and then use of profits.

Okay, okay. Thank you very much.

The next question comes from Valerie Jacob from Bernstein. Please go ahead.

Hi, good morning. I just have some follow-up questions from the question that I just asked. Maybe on the vacancy, how do you see your vacancy rates evolving during the new year? Do you think that in those markets, do you think you would – go back up to where it was, or do you think it will stay here or deteriorate? If you could give us some guidance on how do you see this evolving, that would be helpful. Thank you.

Yes, thank you, Valérie, for your question. You know, as I always say, you know, vacancy can from a quarter to another around the figures we post in average. So this quarter, it was like design on the office. At the same time, you might have seen that it was significantly up on the resi. So the, you know, I will not read across one quarter figure to determine what should be for the full year. That's a bit, you know, the situation. Like you saw, you know, office CBD, which was a big question, on the market following Immostat news, we grew a lot our rent in Paris. We grew occupancy. You know, reversionary was significantly higher than last year. So I think, you know, but again, you know, 18% reversion, or at least in average for Q1, I will not draw a line saying that it's an annual figure. So I think it was excellent in Paris. a bit tougher in Boulogne, but deep picture, we grew more than 1% our, you know, life for life about inflation. So deep picture, I think it was a positive quarter, and on long-term vacancy, I think it will improve over time, fluctuating, obviously, from a quarter to another.

Okay, thank you. And maybe also a follow-up on the share buyback. So, I mean, I understand that you said, you know, if you dispose of some assets, you have, like, all options. But maybe, did you have any sort of, you know, financial metrics to share with us on this? you know, you want to invest at sort of, you know, 7%, and if you don't, then, you know, below this level, you think that share buyback would be more accurate? Maybe just, like, if you can share, you know, some numbers on how you think about it.

Sure. I think the metric which is important is keeping an LTV where it is. So that's really our DNA. I think we don't want to buy growth with debt these days. I think the market is uncertain. Rates are pretty high this time. So I think keeping our A- rating is clearly a clear line for us in terms of strategy. That being said, then we calculate our cost of capital based on the current share price. we look at potential acquisition and what they can deliver and assess which is the best option, like I said. So based on the stable LTV at 70 or 80 euros per share, the equilibrium is around the 6.57% acquisition. So that's a bit you know, basically the matrix with the same LTV. You know, I have in mind that, you know, one, you know, the equivalent to buy 100 million euro facet is 70 million euro share buyback to keep the same LTV. So that makes a bit of matrix flying on both cases.

Okay. That's clear. Thank you very much.

You're welcome.

The next question comes from Benjamin Legrand from Kepler. Please go ahead.

Yes, can you hear me?

Yes. Good morning. Thanks for the presentation. I just had one more time a question about Boulogne. More for 2027. If you do expect some big talent to be leaving at that time or not?

No, in 2027, no major expiring in Boulogne. You know, have in mind that, you know, over the last three or four years, all of our five assets have been vacated, and we have been capable, in fact, to release almost full horizon tower, you know, 70% of sources, and and and probably we have released or renewed the half of the city light so obviously it's a challenging area but you know we see a decent you know living activity um on the ground in boulogne so that's why i was commenting about the ramp up after those departures from 22 to 25. okay thank you in fact if i may ask the second question you are

mentioning 6.5 to 7% acquisition would be interesting for you instead of share buybacks. I was just wondering if you could add more colors about the investment market today, if you see that kind of potential acquisition coming onto your table at the moment, or if the market is pretty muted or not. If you could add some colors.

Yeah, sure. The The investment market is pretty complex to read, especially after the rate increase after the Iran war. It plays two roles. Obviously, more complex to sell at tight yields, and at the same time, it gives more room for maneuver to buy assets. So I would say as long as we can continue to dispose at distant prices, more opportunity to buy on the right location, the right assets to generate growth in the future. But the investment market is pretty quiet since now a month and a half.

But are sellers willing to be selling at 6.5% at the moment, or do they prefer to just keep this for now?

No, no, no. The best assets, when they're structured, trade at a significant lower yield. Some deals were even appearing during Q1 below 4% yield. But this is not the type of assets we try to buy. We try to buy complex situations where our integrated platform can generate better growth than other players. So typically where there is development risk or a leading risk or the capacity generate better rent through our fully serviced office business. So we tend to be an operator instead of just an investor. And that's where there might be a gap between what can generate a passive investor and what we can generate. And that's typically what we did on Signature on the Roche Vivian acquisition. There was clearly a difference in the writing assumptions between what we did and what basically we are delivering, and we are delivering over budget, especially in terms of rent, and what a passive investor can generate. So that's, you know, those fractions where we play our role.

Thank you very much.

The next question comes from Veronique Nertens from Van Lanship Kempen. Please go ahead.

Hey, good morning. Thank you for taking my questions. I want to focus a bit on the resi bit. Obviously, very strong performance, plus 7.5%. Could you give some additional color on the exact drivers? Is that mainly coming from those transformations and the service product, or do you see a strong performance in the resi segment in general? And also, again, some disposals in that market. How are those discussions going? Do you see more potential there, and who are the buyers there at the moment?

Two questions in one. You know, we commented on last year on the fact that we were significantly transforming the way to operate our Rezi platform. You know, coming from really traditional Rezi where it was just flat by flat, no furniture, no service, and so on, where we have, you know, transformed our business model towards a different kind of offerings in the same in the same building with services on top so that each square meter has the best profitability. So each time a flat is vacated, we try to find the best way to maximize shareholder value. Therefore, sometimes it can be co-living, so we split into several rooms. We provide services to students and then lift up the rent. Sometimes it's just furnishing the flat. Sometimes it's B2B gifts with I don't know, expats or embassies. So each time, for one flat, we try to find the best solution. Obviously, it's more management intensive, so we have to change our processes, our teams, our concierge, and so on, to be capable to address this more premium and valuable client base. But that's starting to pay off. So with an improved occupancy and also uplift, and more regular uplifts because those tenants tend to rotate faster, and we can, you know, capture better growth. More generally speaking in terms of, you know, resi in terms of leasing, we are not really a free proxy of the market. You know, our portfolio is 80% in Paris. Everything is, you know, next to Paris, so obviously we have a high-end clientele, international clientele with affluent people, And therefore, the role we have is to try to offer them services that they can't find elsewhere. Fitnesses, co-working places, laundries, you know, experience homes that they can't find in that super fragmented living space in Paris. You know, Paris is mainly owned by individuals, only one flat, and we can provide something really different. And that's a different situation against other capacities where you find more institutional investors which are delivering those projects. So we make the difference with the fact that we own large buildings and we can offer services that can find in the, let's say, general market. In terms of disposals, the disposal activity, a bit like in offices, is pretty quiet. But, you know, we have found different types of investors willing to buy some residential assets last year and when we continue this year. It can be pension funds. It can be insurance companies. It can be state-owned entities which are willing to expand their living platform. So we see a decent appetite on the living as a whole. So bed and shade looks attractive these days. And then we need to find the guys which are willing for the most prime willing to pay for the decent price.

Okay, that's helpful. Thank you. And maybe one additional question on the resi. Looking at your credit rating, does S&P take into account that you have sort of like a diversified portfolio? In other words, could it have an impact on selling more resi towards your credit rating, or is that not an issue at all?

The credit rating is obviously a series of combining objectives between liquidity on the bond market, additional credit lines that we are providing future liquidity. It's also LTV. It's also ITR, which is excellent for us. It's also the quality of the portfolio we own, both. that plays a role, but also the fragmentedness of our portfolio, and the liquidity of the assets that shows that we have capacity, in fact, to manage those credit objectives. So it's really the combination of all that, ready with the stability and growth that you can see, all these things play a role, but it's in a general equilibrium that we try to keep. So everybody has in mind the 40% MCV, but it's more than that. It's also liquidity on the debt side, liquidity on the asset side, and asset quality.

Okay, so, but you don't per se foresee an issue if you were to sell more REZI that SAP could look at you differently?

No, specifically if we do it well on all the other Ethereum.

Okay, that's good. Thank you.

The next question comes from Anna Escalante from Morgan Stanley. Please go ahead.

Hi. Good morning. I have a question regarding your target deals for acquisitions and marginal capex. I have wondered whether you are thinking about headline rents or you are thinking about cash returns, because as we have seen, incentives in Paris are quite high, particularly you know, in the peripheral areas, but in central Paris, about 15%. So my question is, how do you look at these returns, right, and how do they look on a cash perspective rather than on headline rents?

When you look at a signature acquisition, the incentives are pretty low, and rents are probably 20% higher than what we expected, so... that we are careful in underwriting and we can generate different returns on what we write. Return on capex are higher than double digits, so they are significantly above 10% return on capex.

But in terms of cash returns, both on acquisitions and capex, what are your hurdle rates, more or less?

You know, I will rephrase what I said earlier. I just said that, you know, because, you know, one of your colleagues asked me the question, at between 70 and 80 euro per share, the equivalent to 6.57% return, cash flow return. So that's what this was trying to achieve.

Yeah. Okay. Yeah, thank you.

Yeah, you're welcome.

The next question comes from Francesca Faragina from Ing. Please go ahead.

Yes, good morning, everybody. Many thanks for taking my question. Still another little question on the investment. There is a pretty sizable portfolio coming to the market in Brussels, the one related from Edifica Kofimov. What's your view on the metal market, and do you have a knowledge of this portfolio? Thank you.

You were referring about the office portfolio of Coop Unimog? Yeah, yeah. we are many capital city large capital city operators so what we like is diversified leasing base strong and profound leasing market which is probably the pure definition of the Brussels market so very happy to be in Paris like you saw that's the way for us to generate growth especially the diversity of the talent base we have and the performance of our early market.

Okay.

There are no more questions at this time, so I hand the conference back to Beniette Ortega for any closing comments.

Thank you for listening to the call, for your questions, and see you during the next workshop. Bye-bye.