Gecina N (EPA:GFC)

SeekingAlpha  Jul 19  Comment 
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The Economic Times  Jun 9  Comment 
Euro zone peripheral markets have strongly rallied since the start of the year, with the MIB and IBEX up 18 % and 12 % respectively.
Reuters  Jun 7  Comment 
Spanish builder Metrovacesa said it agreed to sell its 27 percent stake in French peer Gecina to a group of investors as it unwinds a costly acquisition made during...


Gecina SA (EPA:GFC FRA:GI6A PINK:GECFF) is a French real estate investment company (with REIT trust eligibility) that recieves most of its cash flow from the renting out of a wide range of asset types. There are hotels, hospitals, apartments, warehouses and logistic centers (although the company plans to divest some of those property types including warehouses due to their lack of market exposure outside of France, a market base the company lacks as most of its property is in and around Paris).[1]

Clients are mostly companies and retailers small and large spanning many segments of the economy (from industrial companies that use warehouses and offices to service centers and banks). Even though most of its properties are in Paris it is still one of the largest REIT's in Europe (5 billion dollar market cap), a testament to the size of the Paris market (second biggest in Europe after London).[2] Metrovacesa (the biggest publicly traded Eurozone real estate company (REIT's are referred to as SIIC's in France)) acquired a controlling stake of the company in 2005 for 3.8 billion euro but eventually lost the majority of that interest in 2008-2009 following debt problems/restructuring of the Spanish bank.[3] By 2010 Metrovacesa owned only 27% of Gecina which means it is still the largest shareholder. The insurance division of Credit Agricole owns 8.2% of Gecina.[1]

Oracle, PepsiCo, Royal Dutch Shell are a few of Gecina's tenants.

In March 2010 it was announced that Gecina would abandon the Spanish market. A big reason for the withdrawal was a conflict of interest the company's former CEO was under suspicion of having. One of the largest moves the company made in Spain was purchasing about half of Spanish real estate company Bami; the problem was that it was Rivero, Gecina's CEO that it bought the interest from. Other reasons include a desire by shareholders to refocus on the French market.

Company Overview

Portfolio includes 162 office buildings in and around Paris (asset value of those is around 12 billion euro) many of them with low vacancy rates due to competitive rates, the result of increased focus on the low rent property market on city borders. The company is divided into 5 segments, in order of size (2009); offices (revenue rent €374 million, €5.736 billion asset value), residential (rent €195 million, €3.385 billion euro portfolio), gecimed healthcare (rent €21.6 million, portfolio €693 million), gecilog logistics (rent €36.5 million, portfolio €555 million) and hotels (rent €20 million, portfolio €269 million).

  • Subsidiary Gecilog manages logistics much of it having to do with business parks (and their traffic lanes, railways, distance to highways). Though the number of assets was down to 55 in 2009 from 61 in 2008 their size rose slightly to 1,132,000 square meters while rents fell 11.9%. The value of the portfolio held by Gecilog barely changed (2 million euro higher to 557 million euro).
  • Offices most of the property is in SW France (43%). Occupancy rate for offices has risen steadily since 2007 (92.7% in 2007, 94.2% in 2008, 94.6% in 2009) which is promising considering office space use in France and Italy fell.[4] Portfolio was dominated by relatively large assets (properties with more than 10,000 square meters of space accounted 58% of portfolio compared to 3% for ones smaller than 2,000 square meters in mid 2010)

Business & Financials

In February 2010 €540 million in bonds issued were redeemed, the last significant maturity before 2012, funding raised recently from contracts with banks rose to €1150 million the maturities of those happen in 2014 and 2015. 1hfy10 debt, €4838 million was steady as compared to 2009 but the maturity of it (86% hedged) was 4.08 years compared to 3.45 years six months before.

Compiled Operational Data, € million 2007[5] 2008[5] 2009[5] 1hfy09[6] 1hfy10[6] change %
Gross Revenue (rents) 591.835 637.04647.196321.6309.6(-)3.8%
Net Rent 532.11573.761584.955292.9282.33.6%
Other Income 4.57 4.7295.2732.71.8(-)33.3%
ebitda 463.552489.735501.773256.1246.2(-)3.8%
Net Income 1292.924(-)875.352(-)773.723(-)510201139.4%
Total Net Assets 12,892.698 11,763.12210,897.2611,695.110,948.55.2%
Equity (Group) 7718.6076259.1035371.765628.15265.3(-)6.4%
Net Debt 461047864819483852834%
2009 debt, 98% of which was hedged though slightly higher when compared to 2008, represented only 45.7% of asset value down from 47.1% six months before. Portfolio value down about €1 billion on the year was helped by a 39.1% increase in assets related to hotels, logistics and healthcare. The 2 largest divisions (office and residential space which make up 84% of the portfolio down from 89% in 2008) lost €1.392 billion in value, some of that coming as a result of company divestments (though the company has said it wants to focus away from residential to office and other commercial assets, the office space portfolio declined 15% versus 11.1% for residential, could be due to weaker rent prices).

1hfy10 average occupancy rate was down to 94.6% from 95.8% in the first half of 2009. The fall was entirely due to a fall in business in the logistics center (312,000 sq meters of vacant space) which was down to 75% from 84.7% (the average occupancy rate for every other business line was stable except for residential down to 97.6% from 98.7%, hotels/healthcare continued its strong showing at 100%). Though every other financial metric showed slight negative growth, net income rebounded from a 510 million euro deficit in 2009 to a 200.9 million euro profit in 2010 (recurring result per share was down 5.8% to €2.90). The fall in rental income was due to €756 million in asset divestments, 52.4% of which was office space (rental income from the office sector was down 3%), 44% residential space. Rental margin for the company as a whole was up to 91.3% from 91.0% the year before due mostly to strong performance by residential revenue generating assets (84% compared to 82.5% the year before, office real estate was stable at around 94.7%, logistics fell 8.8% to 81.7%, hotels and healthcare were both over 99%). Reccurent income was down 4.1% while ebitda and gross rental income were both down 3.8%. During the six month period Gecina disposed of assets worth €300 million (as a result of a shift in business focus) while investing €200.7 million in other real estate (36.7% of the investments were projects under development, 39.4% went to the Anthos Office building, a multi purpose structure that includes a restaurant and 208 parking spaces).[7] Each segment of its asset portfolio, part of either the Economic (61%) or Demographic (39%) division represented the following fraction of total assets :

  • Economic division : Offices (54%), Logistics (5%), Hotels (2%)
  • Demographic division : Residential (32%), Healthcare (7%)

Investments (SCI Beaugrenelle interest was raised to 75%) - 56% was office buildings related (Anthos, Origami), 29% residential (Marseille - 80 unit building, Champs-sur-Marne - student residence), 14% logistics and 1% healthcare.

Divestments - 33,000 m sq of office space, 460 apartments (one 80 unit complex in Ville d'Avray), two hotels in Paris for €7.7 million)


Other large real estate investment companies with a high percentage of their assets in and around Paris are Fonciere des Regions (owns one of Paris's tallest skyscapers Tour Ban) and Icade (has the largest international presence between the three with major assets in Germany, Spain and Benelux). All three about the same size interms of market value; September 2010 Gecina $5.1 billion Icade $4.1 billion Fonciere des Regions $4.1 billion.


  1. 1.0 1.1 Gecina Set to Exit Spain After Purchase Sparks Revolt (2010-03-03).
  2. Gecina Chief Says Paris Office Market May Hit Rock Bottom This Year (2009-01-26).
  3. Spain's Metrovacesa insists on Gecina spin-off
  4. Fonciere des Regions says Property Values Fell 5% in the First Half (2009-07-03).
  5. 5.0 5.1 5.2 2009 Gecina Annual Report
  6. 6.0 6.1 2010 Gecina Half Year Report (2010-07-28).
  7. Gecina Establishes Carrefour's management headquarters in the Anthos'building in Boulogne-Billancourt (92) (2010-07-06).
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