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Hello, and welcome to Gecina Q1 2026 Activity Conference Call. [Operator Instructions]

Today, we have Benat Ortega, CEO; and Nicolas Dutreuil, Deputy CEO in charge of Finance as our presenters. I will now hand you over to your host, Benat 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, up 2.3% to EUR 176 million. 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 broadly 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 EUR 18 million of annual rents on an average lease maturity of around 7 years. Around 1/3 of this performance relates to renewals, illustrating our ability to anticipate lease maturities and secure occupancy ahead of time, while the remaining 2/3 comes 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 EUR 16 million of annual rents, 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 quarters.

On the residential side, leasing dynamics are also positive with 335 leases signed, up 12% on a like-for-like 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 developments, and that includes also T1 Tower now named Shape. Discussions are active and well qualified, involving a diversified mix of large corporates as well as midsized or small tenants. 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, JLL 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 EUR 200 million disposals at 3.5% yield all at the full year are now fully completed. And in addition, we have secured a further EUR 50 million of disposals at a 2.2% yield, reflecting the quality and maturity of the assets sold. These proceeds will fund the EUR 265 million of development CapEx currently being invested in the four large flagship projects we are -- you 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 works 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 EUR 6.7 to EUR 6.75 per share.

[Operator Instructions] The next question comes from Florent Laroche-Joubert from ODDO BHF.

I would have maybe two questions. So the first one on the leasing side. We understand that you have discussion in progress and you are confident about the leasing of your development project and prime assets. But what about Boulogne? So we have seen that 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 Gecina?

Yes. On Boulogne, I think we are close to the low point, obviously. We are releasing progressively the square meters we have available. We have 3 buildings there. We have signed, as I said, several leases already in Q1. I think leasing is under progress. So we should improve progressively the situation. And as I mentioned, the metro line, we are expecting the metro line for now three years. The train station is finalized and it should open probably late this year or early next year, and I think it will improve significantly the attractivity of that area.

Okay. So now meaning that we can expect more positive to come from Boulogne or neutral...

Yes, it will progressively ramp up. Yes.

Okay. That's good. And maybe a second question on share buyback. So we understand that maybe you are today more open for share buyback. So how do you -- 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 from the recent 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 capital allocation. 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.

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 with no taboos, we will find the best options based on those 3 elements, which is balance sheet, disposals and then use of proceeds.

The next question comes from Valerie Jacob from Bernstein.

I just have some follow-up questions from the question that was just asked. Maybe on the vacancy, how do you see your vacancy rate evolving during the year? Do you think that it will -- in the office market, do you think you will go back up to where it was? Or do you think you will stay here or deteriorate? If you could give us some guidance on how do you see this evolving, that would be helpful.

Yes. Thank you, Valerie for your question. As I always said, vacancy can fluctuate from a quarter to another around the figures we post in average. So this quarter, it was slightly down on the office. At the same time, you might have seen that it was significantly up on the resi.

So I will not read across one quarter figure to determine what should be for the full year. That's a bit the situation. Like you saw office CBD, which was a big question on the market following ImmoStat news. We grew a lot our rents in Paris. We grew occupancy. Reversionary was significantly higher than last year.

So I think -- but again, 18% reversion or uplift in average for Q1. I will not draw a line saying that it's annual figure. So I think it was excellent in Paris, a bit tougher in Boulogne, but big picture, we grew more than 1% our like-for-like above inflation. So big picture, I think it was a positive quarter and on long-term vacancy, I think it will improve over time, fluctuating obviously, from quarter to another.

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

Sure. I think the metric which is important is keeping our 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 a stable LTV at EUR 70 or EUR 80 per share, the equilibrium is around 6.57% acquisition. So that's a bit -- basically the metrics with the same LTV. I have in mind that the equivalent to buy EUR 100 million of assets is EUR 70 million share buyback to keep the same LTV. So that makes a bit the metrics flying on both cases.

The next question comes from Benjamin Legrand from Kepler.

Can you hear me?

Yes.

I just had one more time, a question about Boulogne, more for 2027. If you do expect some big tenant to be leaving at that time or not?

No, in 2027, no major expiring in Boulogne. Have in mind that, over the last 3 or 4 years, 4 of our 5 assets have been vacated, and we have been capable, in fact, to release almost full Horizons Tower to 70% of Sources and probably we have released or renewed half of the Citylights. So obviously, it's a challenging area, but we see a decent leasing activity on the ground in Boulogne. So that's why I was commenting about the ramp-up after those departures from '22 to '25.`

Okay. And if I may ask a 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 on to your table at the moment or if the market is really muted or not? If you could add some colors.

Yes, sure. It's -- 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 the -- as long as we can continue to dispose at decent prices, obviously, it gives more opportunities to buy on the right locations, the right assets to generate growth in the future. But the investment market is pretty quiet since now more than that.

But are sellers willing to be selling at 6.5% at the moment? Or do they prefer to just keep...

No. The best assets, well-restructured, trade at significant lower yields. Some deals were even occurring during Q1, below 4% yields. 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 leasing risk or the capacity to generate better rents 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 Rocher-Vienne acquisition.

There was clearly a difference in the underwriting assumptions between what we did and what basically we are delivering, and we are delivering over budget, especially in terms of rents and what a passive investor can generate. So that's those fractions where we play our role.

The next question comes from Veronique Meertens from Van Lanschot Kempen.

I wanted to focus a bit on the resi bit. Obviously, a 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. We commented on last year, on the fact that we were significantly transforming the way to operate our resi platform. Coming from really traditional resi where it was just flat by flat pre-leasing, no furniture, no service and so on, where we have transformed our business model towards different kind of offerings 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 we lease up the rent. Sometimes it's just furnishing the flat. Sometimes it's B2B deals 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 clientele. But that's starting to pay off with an improved occupancy and also uplift -- more regular uplifts because those tenants tend to rotate faster and we can capture better growth.

More generally speaking, in terms of resi, in terms of leasing, we are not really a fREIT proxy of the market. Our portfolio is 80% in Paris. Everything is next to Paris. So obviously, we have a high-end clientele, international clientele, with affluent people. And therefore, we -- the role we have is try to offer them services that they can't find elsewhere, fitnesses, co-working places, laundries, experience homes that they can't find in that super fragmented living space in Paris.

Paris is mainly owned by individuals owning one flat, and we can provide something really different. And that's a different situation against other cities 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 they can't find in the, let's say, general market.

In terms of disposals, the disposal activity, a bit like in offices is pretty quiet, but we have found different type 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 decent appetite on the living as a whole. So bed and shed looks attractive these days. And then we need to find the guys which are willing for the most prime location, willing to pay for the decent price.

Okay. That's helpful. 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 undrawn credit lines that we are providing future liquidity. It's also LTV. It's also ICR, which is excellent for us. It's also the quality of the portfolio we own, both resi, that plays a role, but also the primness of our office 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. Resi with its stability and growth that you can see obviously plays a role, but it's in a general equilibrium that we try to keep. So everybody has in mind the 40% LTV, 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 resi, that S&P could look at you differently?

Not specifically if we do it well on all the other criteria.

The next question comes from Ana Escalante from Morgan Stanley.

I have a question regarding your target yields for acquisitions and marginal CapEx. I just wondered whether you are thinking about the headline rents or you are thinking about cash returns? Because as we have seen incentives in Paris are quite high, particularly in the peripheral areas but in Central Paris above 15%. So my question is how you look at these returns, right? And how do they look on a cash perspective right on headline rents?

When you look at our Signature acquisition, the incentives are pretty low and rents are probably 20% higher than what we expected. So I think we have shown through that acquisition that we are careful in our underwriting, and we can generate decent returns on what we buy.

But what's your guidance...

Return on CapEx are higher than double digit. 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?

I will rephrase what I said earlier. I just said that because one of your colleagues asked me the question, at between EUR 70, EUR 80 per share, the equivalent to 6.57% return, cash flow return. So that's a bit what we try to achieve.

The next question comes from Francesca Ferragina from ING.

Still another little question on the investment. There is a pretty sizable portfolio coming to the market in Brussels, the one related from Aedifica Cofinimmo. What's your view on the merger market? And do you have a knowledge of this portfolio?

You are referring from -- about the office portfolio of Cofinimmo.

Yes.

We are mainly a capital city -- large capital city operator. So what we like is diversified leasing base, strong and profound leasing market, which is probably not 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 is, especially the diversity of the tenant base we have and the performance of our leasing market.

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

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

Hello, and welcome to Gecina 2025 Full Year Earnings Conference Call. [Operator Instructions] Today, we have Benat Ortega, CEO; and Nicolas Dutreuil, Deputy CEO in charge of Finance as our presenters. I will now hand you over to your host, Benat Ortega, to begin today's conference. Thank you.

Good morning, everyone. It's a pleasure to be with you to share our results for 2025 with a clear outperformance in terms of operational excellence and agile and proactive investment activity. I won't dive into the details just now, but the message behind these highlights is simple. In a long-term industry like real estate, we've been demonstrating our ability to grow steadily, constantly and meaningfully over time. As we may see through our results, Gecina is not a pure proxy for the Paris region office market. Our differentiation lies in the products we deliver designed for today's needs and built to anticipate tomorrow's. This is how we keep our portfolio, firmly positioned in a segment where true quality is scarce and demand remains solid. The situation regarding office attendance was stronger in Paris than other cities following COVID and current trends shows that the return to the office is even more real now.

Over the past year, many more corporates have taken firm positions well beyond the early movers from 2023 and 2024. We are now converging towards a standard of roughly 4 days a week in the office. This has a positive consequence on corporate decisions. The number of companies taking the same surface of more are now a vast majority, 2/3, while it used to be only 1/3 3 years ago. And when the objective is to attract and retain talent, the equation is simple, reduce committing time by being located in the central areas and on major transportation hubs and offer a workplace experience that generally feels better than home. With insights from more than 500 companies using our spaces every day, we design products that mirror how corporates truly operate. Large organizations want destination assets for their head office. Yet supply is far more limited than people think. Offices above 3,000 square meters represented only 15% of deliveries over the past decade within Paris City.

That's why we put such emphasis on delivering these large-scale projects in Paris and Neuilly on their design and adaptability also. Workforces evolve and our spaces have to evolve with them. We complement this with a full suite of services, some shared other privatized. And we bring real intensity to energy performance, building highly efficient assets and working closely with clients to ensure consumption reductions last over time. Smaller businesses often lack dedicated real estate teams internally. They want to stay focused on their core business, work in a space that feels like their own, especially protect confidentiality, better than shared offices in co-working buildings and deal with a single point of contact and a single invoice. We created a fully managed office, offer precisely to meet these needs. What sets us apart is that we own our assets, ensuring them the right quality and services on the long run.

Let's now turn to our 2025 performance in figures. Hundreds of leases offers negotiation, delivering nearly 120 leases doubling 2024 pace in square meters let. It gives us real visibility on our future cash flow with EUR 86 million in annual rents secured on firm terms of over 6 years. A positive factor also is that we've been securing 75,000 square meters of leases that were due to mature in '25, '26 or '27. Yourplace, our fully managed office offering, captures exactly how the market is changing on small and mid surfaces. We are achieving rents around 40% above market levels because we deliver a truly distinctive product. The market is clearly willing to pay more for better design, better services and more flexibility. And the momentum on the residential side is also strong.

Over 1,700 leases were signed, 3x what we did last year with an acceleration throughout the year, a clear signal that our diversified service-enhanced furnished housing offer meets a real and growing need. All this is driving solid rental growth, plus 3.8% like-for-like with 2.6 points from indexation and more than 1 point from pure business performance, either rental uplifts or better occupancy, particularly in CBD offices and our residential portfolio. And let me pause on the 2.6% growth on current basis, our organic growth more than offsets the impact of portfolio rotation where we have been very active to improve medium-term cash flows. On top of our leasing velocity, we have continuously activated all drivers to grow our cash flow. Revenues have grown consistently, more than EUR 100 million added since 2021. And we've kept costs tight. Lower property costs lifted rental margins and G&A is down 4% year-on-year.

Since 2021, our cost ratio has improved by 270 bps, and I'll come to financial cost management later. The results, EBITDA and recurring net income are up again this year with earnings and earnings per share rising by more than 4%. Since 2021, those metrics are up nearly 25%. On valuation, our portfolio is up 2.3% since year-end 2024 on the like-for-like basis. Here again, we see market bifurcation at play. In central areas, values are rising, supported by a reopening of the investment market with transaction volumes up 54% and a stronger rental dynamics in Paris and Neuilly. As outside Paris, values continue to adjust in line with softer investment activity, while rent adjustments help secure occupancy.

Let's turn to CSR. We are clearly early leaders in energy efficiency and carbon reduction, setting our first trajectory back in 2008. For us, this isn't a list of targets. It's a mindset. It's a conviction about how we run the business. Our strategy is simple, effective. First, before spending a euro of CapEx, our engineering teams and carbon managers work with clients to monitor and optimize on-site consumption. Then we switch to decarbonize energy whenever possible. And finally, we invest where it creates the most impact. This approach delivers. Since 2019, we've cut energy consumption by 33% and carbon emission by 63%. Our monitoring is fully data-driven. We track temperatures in real time and continuously fine-tune cooling and heating. And it matters. Every 1-degree adjustment delivers roughly 7% energy savings.

Thanks to this unique data set on more than 100 assets, we are currently deploying new AI initiatives in dozens of buildings to sustain our targets. One example at 144 Haussmann, a classic Haussmannian building typically harder to optimize than new generation assets, this approach cuts energy consumption by 25% in just 1 year. Now let's just take a step back and look at how active we've been in capital allocation, not just in 2025, but consistently over the past 5 years. We have been disciplined and deliberate in capital allocation. Over 5 years, nearly EUR 3 billion of assets have been disposed, first to support our 2022 and 2024 deleveraging. It secured a strong loan-to-value to reopen our investment capacities. We then recycled more capital into higher-yielding acquisition and a development pipeline delivering double-digit return on invested CapEx. On disposals, our timing has been highly tactical.

We've consistently crystallized value by reading market momentum early, creating competition and selling under the best conditions. Over 5 years, it's roughly again EUR 3 billion of disposals. We first benefited from a strong appetite for figuring the assets to divest properties outside Paris a few years ago. Later in the cycle, peak year compression on core assets enabled us to lock in full value on some mature office and retail assets. And then we accelerated residential disposals, capturing strong appetite demand for operated housing and living platforms with EUR 800 million of mature residential assets sold in 2025 alone, including the student housing portfolio. And we continue in that journey as I'm pleased to inform you that we have already secured EUR 200 million of additional disposals at end 2025, expected to close early 2026.

In '25, part of these proceeds was swiftly reinvested in acquisitions that were very appealing, both in terms of location and return on equity. This year, we deployed EUR 600 million that should deliver double-digit IRRs above our cost of capital even at current share price and more than 2/3 of these assets are already let or under term sheet. The rent secured or potential represents the equivalent of 10% of the group's office rental income in Paris and Neuilly. And none of this happens by accident, execution is everything. And we've proven that we are credible committed buyers, leveraging in-house expertise, deal enabling solutions such as past asset swaps and our capacity to pay cash, limiting competition to get appealing deals.

Over the years, we've been also very active in recycling disposal proceeds into complex redevelopment operations, nearly EUR 1.3 billion since 2021. This has allowed us to reposition 25% of our office portfolio and more than half of it over the past decade. It's been a major driver for both revenue growth and value creation. We now have 4 flagship projects underway to fund with EUR 430 million still to invest at double-digit yields on CapEx. Once fully let, these projects are expected to generate between EUR 80 million to EUR 90 million of annual rent. 2025 has also been a pivotal year in preparing the future of T1 Tower in La D�fense. Building on the tower's strong fundamentals, including high-quality, efficient floor place, high ceiling heights, our goal is to reposition T1 at the upper end of that market.

That means creating a true prime asset, enhancing services, redesigning signature spaces such as the main lobby and converting it into a multi-let tower to capture today's most dynamic demand, the mid-segment. The market at La D�fense is constructive. La D�fense has shown real dynamism in recent years. Demand for prime office remains strong. And with new supply expected to tighten once the current available space are absorbed by mid-'27, the project should benefit from favorable supply-demand conditions. On the financing side, the strength of our credit profile was once again confirmed by a best-in-class A- rating. It's been the eighth consecutive year. This translates directly into better financing conditions than others. Our July 2025 bond showed it clearly, oversubscribed 7x with a tight 85 bps spread.

Preparing the future is a core commitment for us and hedging is a critical part of it. A clear indicator of how strong our position is, is the mark-to-market of our fixed rate debt, simply put the gap between what we pay actually today and what we have to pay without hedging. At the end of 2025, as an equivalent, this figure stood at EUR 485 million. As an equivalent to net debt, this is more than 2x better than the average of our Continental Europe peers. It reflects both the volume of debt we hedge and the attractive levels at which it is hedged. We believe it's a significant competitive advantage against our peers and should give us visibility on future financial expenses and ensure a smoother, more manageable normalization. Let's turn now to the future. Based on the solid performance of 2025, we will propose to the General Shareholders Meeting a dividend of EUR 5.5 per share. This is exactly why we focus on rent growth and cost efficiency.

On the second -- for the second year in a row, we will propose to the next general assembly to increase the dividend. I'll come back to this in a moment. This reflects a strong 7% yield on the current share price with a sustainable 82% payout ratio. In 2026, we expect indexation to be very low, no surprise there. We also expect the market bifurcation to continue, supporting rental uplifts in central locations and requiring further rent adjustment elsewhere to retain tenants. Paris CBD and Paris City, La D�fense, Boulogne will maintain the same focus in every submarket. Rents from our 2025 deliveries and acquisition will also contribute to growth and we will maintain a strict cost discipline.

Consequently, we plan to continue to grow recurring net income to between EUR 6.7 and EUR 6.75 per share. Looking ahead to our next cycle of growth, I see 3 key moments. 2027, we will prepare for what comes next. The key building blocks are coming together as we work today to deliver and lease our 4 major pipeline projects. This will progressively offset the rent impact from ENGIE's departure from T1 Tower. In 2028, we will unlock growth. The pipeline will reach full speed. T1 will be progressively relet. Both indexation and occupancy are expected to normalize around that horizon. And in 2029, we accelerate. Across the entire period, future rental income provides clear visibility on medium-term growth in terms of recurring net income per share. And in this context, obviously, everything being equal, we expect the company's dividend to gradually increase over the coming years from 2026 to 2030.

And finally, this growth must be sustainable, and we are raising the bar for our 2030 targets. The bar is high, but we've learned a lot in the past years, and we want to challenge ourselves while staying realistic, pragmatic and contribute to the energy transition in the city where we operate. We'll go further on carbon reduction below 5.5 kilograms of CO2 per square meter with a plan to offset residual emissions on the operating portfolio. And obviously, we'll deliver net zero assets across the development pipeline. We also aim to reduce energy consumption and meet stricter performance targets on the new developments. And we want all of this to be independently certified with continuous improvement of our certification levels over time. Thank you for your attention, and now we are happy to take your questions.

[Operator Instructions] The next question comes from Veronique Meertens from Van Lanschot Kempen.

Three questions from my side, and I'll ask them one by one. Maybe can you elaborate a bit what's your view towards the breaks in the non-Paris office portfolio that you're seeing in '26 and '27? Are there already discussions ongoing? And what is the negative reversion that you now take into account for these sort of leases?

To be fair, no major breaks in '27, except the ENGIE that we have talked about a lot. And therefore, no significant reversion, negative reversion in those locations. We have -- like I said, we have been renewing a lot of leases from those years in '25. So nothing specific to say there.

Okay. And maybe one question on CapEx, maintenance CapEx. So I see on your Slide 46 that the maintenance CapEx has increased every year. And I think in '25, you're even reaching almost EUR 150 million, but still you mentioned that you expect a run rate of EUR 85 million to EUR 95 million. So I was wondering, it's obviously one of the key worries for investors for offices that maintenance CapEx is going up. What's your view is towards that and why you expect it to actually come down again?

Yes. We have a specific situation on the residential side where, in fact, we have some aging buildings that we need to -- especially on energy efficiency to reshape a bit the facade. So we have like since last year, but we still have probably 2 years or 3 years of refurbishing a bit those assets. So that's why it's somehow a bit temporary to catch up with those residential assets.

So in terms of offices, do you not foresee a trend that offices -- the maintenance CapEx is going up?

No. Specifically no, it's really a catch-up on the resi side.

Okay. That's clear. And then maybe my last question is, so despite execution on, I think, some interesting capital recycling transactions, your share price, I guess, reveals that shareholders might not fully agree with either the strategy or the capital allocation decisions. And I appreciate that, obviously, it's a topic that's been discussed a lot, a share buyback. And historically, you've always said that as long as you can find more interesting opportunities in the market from a yield perspective, you should go for that. But taking also now your dividend yield of 7% into account, when I do the numbers, you can still sell even your higher-yielding assets, make it leverage neutral and still do a very accretive share buyback. So can you maybe take us along your line of thinking of that capital allocation decisions and how you're going to view that towards the future?

I think -- like I said, I think capital allocation is trying to make a triangle between portfolio quality, future cash flow and return on equity. And therefore, we -- like I showed on this slide, we've been quite active on disposals. If we think there is no growth and the return on equity is lower than our cost of capital, we dispose. So we have been, I think, among the only one to dispose EUR 3 billion of assets over a short period of time. And the second is us to use those proceeds. And that's where we look always at the cost of capital. And if we find alternatives and opportunities in the markets where we are, where investment money is scarce, then if we get more than 10% IRRs unlevered, then we go for them. And like I said earlier, share buybacks are a tool to allocate capital. It's one of the tools for the -- in 2025, we have been very happy to find opportunities where we could generate a lot of value and at the same time, improving the average quality of our portfolio. So that's what we have done in 2025.

The next question comes from Florent Laroche-Joubert from ODDO BHF.

So I would have 3 questions, if I may, so -- and I can ask one by one. My first question would be on your dividend policy, your new dividend policy. So what could be the reasonable assumption that we can take into account in terms of gradual growth and maybe in terms of payout ratio for the dividend for the next years?

In fact, 2 questions within one. The first one is payout Obviously, medium term, and I've been quite clear on that, we want to be in the range of 80% to 85% medium term. That's a way to sustain through our recurring cash flow, the dividend and the maintenance CapEx, which are supposed to decline over time. So that's one. And second, obviously, the growth will depend upon the speed of leasing both our pipeline and T1. So that's why we have been shy on the rhythm of growing the dividend, but it was to show that we are pretty confident in the medium term to lease those properties and that should drive the future dividend policy.

Maybe my second question, so in terms of capital and investment opportunities. So how do you think you are able still in 2026? And what is your appetite to find some new investment opportunities at least above your cost of equity or with the IRR very significant?

Listen, our team's investment -- we are very focused on the Parisian market. So we track and follow all transactions. For 100 transactions we look at, we strike one. So like you saw last year. So our duty is to look for those opportunities to create value. And obviously, it has to be accretive both in terms of earnings, but also in terms of capital. So that's what we do on a daily basis. That's our duty, and that's the business of anticipating what might come, it's not easy. But obviously, we are very dedicated to try to create value for our shareholders.

Okay. And maybe my last question maybe on artificial intelligence. So have you discussed about the impact that we can have potentially on your different tenants? And have you discussed with them on how they could change the strategy for the future offices?

Sure. It's a topic we discuss with our clients. I think we have said in 2 ways to look at it. First, we saw a significant tech demand in Paris. We are lucky to train a lot of excellent engineers. France is specifically very good at math. So we have seen most of the big tech taking more square meters than hiring people inside the city of Paris. And that's obviously companies which are looking for centrality. You saw that Mistral just took a big -- it was not in our building, but just took a big building in Paris, but we have seen also Google last year and most of the big tech, Datadog has just signed a big lease next to Madeleine. So we see quite a decent appetite from tech companies growing their footprint in Paris because of the pool of talent. And the second, obviously, we might see, but it will be probably gradual an optimization of some jobs. Clearly, if you look at the newspapers and that's obvious, the view for us is that it will concentrate the demand for the best because the ones that will sustain, in fact, their growth through the AI transformation will seek for centrality.

The next question comes from Jonathan Kownator from GS.

Three questions, if I may, maybe one by one. Can you highlight how you expect the occupancy to change going forward? You said you've done a lot of leasing already in 2025 on some of these outside areas. And if you can focus actually specifically also on office versus residential with spot numbers? And the second question, but related is what's happening with T1B in terms of leasing at this stage, please? And I've got one more after that.

Okay. In terms of occupancy, obviously, it fluctuates depending on who leaves and who comes. We see, like you saw quite an increase in occupancy in CBD, the whole Paris, by the way. We have progressive leasing in Boulogne. So it should go up and down, but we see we have signed already 2 leases during the first weeks of 2026. So progressively, we should see a gradual improvement in Boulogne, but it's a long journey. And on the residential side, I think the average occupancy this year was like 94% and we -- and because of the active leasing during H2, the spot vacancy in '25 is like 96.4%. So we should see an improvement in the average occupancy in '26 against '25 on the residential segment. Regarding T1, ENGIE is leaving in April. We will start renovation. We already have some leads because, in fact, if you try to find 20,000 square meters, good quality brand new, there is not so many offers in La D�fense. But obviously, it's a -- the tower will be delivered probably mid-'28. So we still have time. But yes, we still have -- we already start to have some leads on T1.

Sorry, just to clarify, you have already some leases signed?

No, leads. Early conversations.

Okay. Early conversations. Okay. Okay. And the spot occupancy in office, are you able to give us that? I think you've given a meter in resi, but not in office.

Spot occupancy a bit more than 94%, I think it's pretty flattish.

Okay. And the next question is really on EPS growth. And ultimately, I mean, obviously, you talk about IRR, some of the projects that you're investing have a longer lead time. Do you see acquisition opportunities like one that you did last year more immediately accretive? Or are you looking at your IRR on a long-term basis, i.e., I think one of the questions around investors has been on the growth path of EPS. Ultimately, how are you expecting to drive that going forward? And do you have a target?

We try to do both, which is being accretive and short term and medium term. So like I said, we are looking at IRRs, so the cost of capital and the contribution to our cash flow. And that's what drives our investment decisions. So like you saw what we did in '25. In fact, we have bought Solstice now named Signature, which had 1 year and a bit of renovation, so pretty short in terms of delivering rents potentially. And we bought Bloom, which was immediately accretive. So yes, we try to balance both to generate long-term and value creation, but also short-term accretion.

Okay. And do you see more opportunities like that in the market? Or are there more long-term redevelopment that you're looking at this stage?

We are looking at a lot of situations. I won't comment on it. So far, nothing specific.

The next question comes from St�phanie Dossmann from Jefferies.

I will have, yes, maybe 3 questions from my side. I will ask them one by one. To follow up on the acquisition opportunities, would you contemplate opportunities abroad, for instance? The London office market looks more attractive currently. So I was wondering a bit of what is your appetite of growing the platform abroad?

So far, not really. I think buying -- we are an operating company. So buying one asset would need to be the full team to generate, in fact, what we are capable to generate in Paris. We need the local knowledge. So we are not really looking at a single acquisition of growth.

And what about not single, I mean platform?

Well, I never like to comment on M&A. I think the best way to never do M&A is to comment M&A. Same on acquisition. Our duty is to monitor situation and to see if we can find an accretive deal for our shareholders. Nothing more to comment on it.

Fair enough. Second question is related to your guidance, and I was wondering what is included on top of your annualized rent roll of EUR 78 million in terms of either relettings, acquisitions and especially net financial expenses and including capitalized interest, how do you see those going forward?

We have not -- we never budget any acquisitions because it's the best way to burn the cash and not being financially savvy. So we don't budget any acquisitions in our budget nor this year, but neither the year before. And in terms of financial costs, as you might have seen, we are pretty well hedged for 2026 and capitalized interest go with the CapEx. So when we spend EUR 1 of CapEx, we capitalize the cost of debt attached to that CapEx. So it's pretty homogeneous against we did last year and the year before. There's no change there. It's really along the CapEx spending program.

All right. And what -- in other words, what is the difference between the low end and the high end of the range?

It's really a series of small assumptions, but mainly, in fact, if we can deliver, like I said, a better occupancy on the resi, some leases on the office side and ideally, an even better performance and a better speed of execution on the operated offices. You know that the operated offices are delivering significant uplifts in rents, but it depends upon tenants leaving our space before we can re-lease them. So most of them is small surface. So we get the notices 3 or 6 months in advance. So if we receive a bit more, then we will have better uplifts and therefore, a better cash flow next year. So -- but it's a lot of small moving pieces.

All right. And the last one, as you touched upon reversion. I was wondering why it's not declining, while the market rents are decreasing on average, let's say, something like minus 5% in the effective rents in the CBD currently. So why your reversion is still so sound, I would say?

I will do a self-promotion. I referred to it at the early stage of our presentation. Our duty as a company is to deliver distinctive products, which differentiates from the overall market. So that's why we have taken the view that we had basically in Paris 2 kind of clients that had different needs. One, which is for the large head office, they need efficient buildings with large floor plates. So that was typically the rationale for Mondo. That's typically the rationale for Signature, the former Solstice we bought in July, which is offering them efficient way to work together. Obviously, if you are large tenants, you don't want to be split in 10 floors if you can be in only floor. So delivering those large-scale programs is a way for us to address what the head office needs. And on the other side, we see a more need for flexibility, but keeping the premiumness.

So we have lawyers. We have some executive teams from large corporates, which are on the outskirts. We see new tech companies, but those guys don't have any real estate teams. So we deliver them, in fact, a product where they just come with their desk, with their laptop, and they can use the space while keeping confidentiality. So they are in their own space, but they don't have the hassle to manage all the real estate expertise, taking a maintenance contract and managing coffee and taking the cleaning contract and having to buy the logo at the entrance of the office and hiring the reception needs and so on. So we take care of all that so that they can dedicate the energy on their own business and not on real estate. And by addressing those 2, we create difference against the general market. And that's a bit the way we have been capable, in fact, to generate this. But it's a lot of work, but that's our DNA.

The next question comes from Neil Green from JPMorgan.

Just one question, please, and a follow-up, I think, to Florent's earlier on. On the dividend growth guidance from 2026 to 2030, are you underwriting a higher payout ratio as a driver of that, please? If so, to what? And is it back to 85%, please? Just interested on any assumption around the dividend payout ratio over that period, please?

It could be 1 year or 2 if we can't sustain an increase of cash flow. But that's why we gave a medium-term guidance, which is over the long run, in fact, those assets pipeline, T1 will be let, and we will be capable, in fact, to stay in our preferred range. Also once the CapEx on the residential side are behind us. So that's a bit why, in fact, we have been providing that vision.

The next question comes from Callum Marley from Kolytics.

Just 2 quick ones. First one, there seems to be quite a bit of office space coming online in Paris this year. And obviously, CBD vacancy continues to trend higher. Is it fair to assume your record high occupancy could come under pressure in 2026 and '27? And then secondly, how do you weigh up future development opportunities versus acquisitions when your current office development yields are 5.8%, but you're acquiring assets at 6.1%?

Those are 2 questions. I think on the first one, I will come back to what I said earlier, which is what we try to deliver to our clients products which are different. I referred to one thing, which was on the other stuff. Only 15% of the new deliveries in Paris have been above 3,000 square meters. So our major projects are significantly bigger with significantly more bigger floor plates and significantly more services, fitness, gym, food offer, meeting rooms, auditoriums. That's what we deliver to those people that they can't find on a small building, which is one like the other. And on the other segment, because we are an integrated company we have our own asset management team, our own design team, our own property management team, in fact, we can generate without a big pain, those operated offices that they can't really find on the market.

It's only 5% of the offer in Paris, while it's more than 20% of the take-up. So -- and that's because, in fact, we are an interesting company. And like you saw, we have been capable, in fact, to generate that offer that needs a lot of work for our teams while keeping the G&A down by 4%. And that's because we were already taking care about the maintenance of the building. So why shouldn't we take care about the aircon of the tenants. If we -- anyway, we have a cleaning contract for the whole building, for the lobby, for the lift, why shouldn't we be capable, in fact, to extend that contract into the private areas. So that's -- we've been doing both, in fact, try to optimize our cost structure, but at the same time, increase the quantity of services we deliver to our clients.

And that's the way we make difference. Regarding your question around acquisition development, I think we have a pretty visible development pipeline, which is underway. Those 4 projects plus T1 that will come next. So that's already a significant development pipeline. And that's why we looked at opportunities with Solstice or with Bloom that were a bit different with a different risk profile. And you're right, it was done in quite appealing conditions to generate a good IRR.

I will now just take one written question. What is the difference between the announced plus 2.3% increase in asset value on a like-for-like basis and the EUR 23 million negative fair value change recorded in the income statement?

Yes. Thank you for this technical question. I think it's technical items that can explain the difference between the 2. Some are one-off. For example, in '25, we had an increase in the stamp duties in most of the cities in France and specifically in Paris. So it has an impact on our valuation of more than EUR 60 million. So it explains partly the difference. Other items are a little bit more technical, that's IFRS 16. You know that we are accounting leases, which are IFRS 1, meaning that we are spreading the tenant incentives over the duration of the lease. And so the difference between the cash we are getting from the tenant and the amount we are accounting is going through this IFRS 16 adjustment. Depending when we are on the lease, it could be positive or negative. But for this year, it's a negative impact.

The next question comes from Michael Finn from Green Street.

Yes. I just wanted to ask, please, if you could confirm that you do not plan to add any more buildings to the pipeline. I believe it was on Page 11 of the press release yesterday that you plan to refuel the pipeline in 2029, but I just want to double check that, please.

Against the quantum we have currently, no, there is not pipeline projects which are similar to those which we are doing currently.

Okay. And one more, if I may. Just on capital more generally, I'm just curious, in general, should 2026 be viewed as quite similar to '25 and that you will sell some assets and you will redeploy it into offices? And maybe linked to a question earlier, I'm just curious, in your view, at what share price or implied yield does it make more sense to just buy back the shares? I assume you probably have some kind of view on that since you said that you're going to -- that you'll be looking at every option that you have.

Yes. If you do simple math, based on our dividend, it's a 7% return. Based on our cash flow, it's 8-point-something percent return. So pure cash to cash. Our weighted cost of capital is around 7-point something because our cost of debt is low, but even at a marginal cost of debt, you are between 6.5% and 7%. So if we can find decent and with the same quality or even better than what we own, obviously, all those deals are accretive in terms of return on capital and accretion. So that was the rationale for us, in fact, to go on those 2 deals that seems appealing for us, both in terms of accretion, one immediate and the other one a year later and in terms of return on capital. So we -- obviously, the share price increased our cost of capital, the way we look at it because it's pretty low.

But as long as we can find those deals that improve our portfolio, improve our cash flow medium term, improve our future, obviously, we will look at them. And if it flies, we go, and we will monitor it over the next year. I think we are somehow -- I'm quite happy with what we have done this year. Somehow in this quiet investment market, and the teams will not be happy that I say it, but it's somehow easier to buy at 6.5% net initial yield than to sell at 3%. And probably, we are not insisting enough about the quality of our investment team to have been capable to source like more than 10 buyers to buy almost EUR 1 billion around 3% cap rates. And I think it's a tribute to the teams and our dedication and our footprint where we are to have been capable, in fact, to secure EUR 1 billion below 3% or around 3%.

So that's why I said before talking about acquisition, you talked about acquisition. I talked about, first, the pleasure to have been capable to secure those disposals because that's the first step before being capable to make capital moves. And I think we have shown and probably way better than most of the industry that we are an agile divestor. We sold one luxury retail building at the peak of valuation of luxury companies. We sold secondary assets at the peak of SCPI fundraising. We've been disposing office assets in '23 below 3% cap rates. So we are pragmatic, but I think we have been probably and I'm looking around the best seller of assets. And I hope that we will be happy with the returns we generate on acquisition and development pipeline. You are, welcome. But again 3% is not easy.

The next question comes from Celine Soo-Huynh from Barclays.

Benat, I've got 3 questions, please. The first one is about capitalized interest. Can you confirm the policy that you have for them? What cost of debt you're using? Is it average? Is it marginal? And also by how much is meant to increase this year? What's inside the guidance? And then my second question will be about your firepower. What's your firepower without a credit downgrade? And last question on share buyback again, sorry. Do you actually have the approval to potentially do a share buyback? Or is that something that could be included in the next AGM? Because like you said, it's a tool to allocate capital.

Welcome. On capitalized interest, we have the same way to do it. The existing value of the asset is capitalized at LTV at the current average cost of debt and the CapEx are capitalized 100% at marginal cost of debt. So that's the way we capitalize interest. So that's why...

And can you confirm it hasn't changed or it's not supposed to change this year?

No, no. No, it hasn't changed. And that's why the more we spend CapEx, the more capitalized interest we have because if we have spent EUR 1 million in a building, then we capitalize 3%. But when we start construction, we only capitalize based on EUR 10 million or EUR 20 million in our books. On SBB, you asked a technical question, which is do we have the approval? Yes, I think we have since the several years, an approval from the general assembly to make a share buyback. So it's really a Board decision to execute one.

Okay. And your firepower?

And firepower, a polite way to do it is to say that if we want to keep our A- rating, we need to be medium term below 40%. So that in terms of LTV metric. But obviously, if we sell, we have more firepower. So it's not a fixed barrier.

Okay. I have roughly like EUR 500 million in mind without new selling. I just don't know if you can confirm that.

The LTV, excluding stamp duties, is slightly above 38%. So it's probably less than that. But again, it's more medium-term objectives that we have with the rating agency. So we can marginally go above and through either our cash flow or asset valuation, be back to that threshold. So it's not a strict rule year-by-year.

Okay. And sorry, last question, a bit open this one, I'm sorry. The market is not reacting super well to your last set of results. We know the market is not great at the moment. What can you tell the market to reassure it that things are going okay?

I think the -- it's 2 things. The first one is when you invest in a REIT, because of our distribution obligations, we are there first to generate the dividend. And that's why we conveyed confidence in the future to be capable and in fact, to sustainably pay and grow our dividend over time. It's second, I think we still have a lot to do, in fact, to have great future years, especially in leasing our pipeline in T1. Just have in mind that we have been having those questions in the last 5 or 10 years, each time we had large-scale redevelopments happening. It happened when we leased to BCG Live. It happened when we leased Publicis in Mondo. It happened when we had to release the full building in La D�fense Carr� Michelet in 2020 and '21, and all those operations have been fully let pretty quickly.

So I think the history of the company, the knowledge of the market, the product we build should give confidence in our capacity, in fact, to generate that growth that we all expect. And probably the last one is discipline. So we keep our balance sheet, you refer about LTV. We try to keep our balance sheet ready for the future, both in terms of LTV, also in terms of hedging long-term liquidity. I mean have in mind that we have EUR 4 billion of available credit line. So we have visibility on both liquidity and cost and same discipline on acquisitions and disposals. So we are there to, in fact, to sustainably grow our company, and we are very dedicated to it.

The next question comes from Paul Reuge from R&Co.

I mean, sorry, just a last question on your capital allocation. If I understood correctly, you say that until you have opportunities to invest or deploy capital in developing assets at a 10% IRR, you won't necessarily look at buying back shares, which basically, if you lever that, you go something between 10% and 15%. And regarding your cash flow yield today around 8%. I mean, I would suggest that you don't buy -- that you won't buy shares before another drop of something like 30% on your share price. I mean, is it something you -- can you give some color on that? Because you didn't really answer on the previous question on at which price you will buy back shares?

I think it's not the right question, if I may. Our duty is to offer the best return on capital. So it depends on how cash do we have and how can we deploy it with the best return on capital for our shareholders. So it's a combination between the cash generated and the way to allocate them. So it's a triangle. It's one, securing disposals. Like I said, we have been very active on it. Second, the share price and at the same time, the opportunities at the same time. So...

I mean, yes, you've been very active on disposal, and that's clearly, I mean, quite nice and effectively, you have a great track record on that. Frankly, at one point this money could be used to buy back shares. And I think the market is seeing that too. So that's why I'm trying to understand a bit.

So as long as it's the best capital allocation in terms of return on equity.

Okay. But so my hypothesis are correct regarding at which level you would be ready to buy back shares regarding the IRR?

Right. It has to be better than our acquisition potential and better than the disposal we make. Again, I can't opine on future acquisition. I don't have them in mind because they are not yet there. If there are none, we will look at the best way to allocate capital. I have not said no on share buybacks. I've just said it's a disciplined analysis each time quarter-by-quarter, deal-by-deal.

The next question comes from Marc Mozzi from BofA.

I just have a follow-up question on your capitalized interest. Can you give us a guidance of what we should expect for 2026 because it's a pretty hard number for an analyst to forecast. And actually, the question behind is, if we were to remove that growth in capitalized interest, what would have been the growth in EPS?

I don't have the figures now. We will provide you a bit more color on it outside the call if you want to allow it.

Yes. That would be great.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you all for attending this meeting. Thank you for all your questions that were very insightful and see you soon. Bye-bye.

Hello, and welcome to Gecina's business at September 30, 2025. [Operator Instructions] Today, we have Benat Ortega, CEO; and Nicolas Dutreuil, Deputy CEO in charge of Finance as our presenters.

I will now hand you over to your host, Benat Ortega to begin today's conference. Thank you.

Good morning, everyone, and thank you for joining the call this morning to review our activity for the first 3 quarters of 2025. Some key highlights we'd like to emphasize. Regarding office leasing, even during this complex French political context, we secured 114,000 square meters year-to-date, already more than 1/3 of last year's total. Leasing activity spans on all our geographies generating EUR 60 million in annual rents.

Regarding residential leasing, nearly 1,300 leases have been signed year-to-date, confirming the relevance of our portfolio transformation towards service apartments to deliver efficient, collaborative and modern track. This clearly meets the growing demand from students, young professionals, families and corporates. We are proud to continue to capture strong rental uplift and outperform indexation, plus 9% across the office portfolio, including plus 28% in the extended CBD and an impressive 14% on Parisian residential portfolio.

Over the first 9 months, we recorded a plus 4% increase in rental income on recurrent basis. This growth was driven by a solid 3.7% like-for-like performance and supported by the positive contribution from our 2024 and 2025 deliveries like Mondo, 35 Capucines, Icône. We are already seeing the effect of indexation moderation as reflected in the third quarter figures. The performance is still very strong in the Paris/Neuilly portfolio, 78% of our portfolio across all drivers, rental uplift, occupancy gains and that's where we are very proactive and innovative to retain tenants, we find the right products, implement specific leasing initiatives.

A few other key highlights for the quarter. First, we tactically strengthened our financial structure with the successful issuance of a EUR 500 million 10-year green bond at very attractive conditions in late July. We achieved a record low 85 bps spread for a 10-year bond, thanks to our A- rating and excellent timing of execution, along with the early redemption of nearly EUR 530 million of 2027 and 2028 maturities, we now benefit from longer debt maturity, greater visibility and lower costs secured over the long term.

Second, we finalized the payment agreement with ENGIE, that was presented in July. Fundamentally, we will support our tenant's transition while actively monitoring the period to secure today's rental income until June 2027, the nominal end of the lease and minimize vacancy during the repositioning. So that, T1 Tower should be available for leasing after renovation during H1 2028, only 7 months after ENGIE lease expiry.

Lastly, we are proud to have maintained our 5-star rating and now rank first in our peer group in the GRESB Index, confirming our position as a European leader in future of real estate. And as you can see, we continue to execute our strategy with productivity, discipline and consistency. We can confirm our guidance with a net recurring income expected between EUR 6.65 to EUR 6.70 per share.

And thank you for your attention, and we are very happy to answer your question now.

[Operator Instructions] The next question comes from Valerie Jacob from Bernstein.

I just had a question on your occupancy in -- outside of Paris. I just wanted to understand what you expect going forward? Do you think it's going to continue to improve? Or shall we expect more departure? That's my question.

Thank you, Valerie, for your question. Listen, like we were quite open on that front, we have seen a series of departures, especially in Boulogne, basically 20 years after delivery of those assets. We have already re-leased probably 2/3 of what was vacated in the last 2 years, and we are still on leasing on that. So obviously, we can't comment this before signing them, but we are clearly on it. And elsewhere, like I said, big chunk will be a T1 Tower, but that will be more for '27/'28. So, it should fluctuate. But medium term, we are quite confident to cope with the situation.

Okay. Sorry. But so you're relating the currently vacant space, but you're not expecting any more meaningful departure within the next 2 years, in Boulogne?

No, those are the biggest ones. Obviously, we have a wide portfolio, so we're going to have departures, but I think those two are the most critical ones.

Okay. And I've just got a second question on the ENGIE Tower in La Defense. In terms of the rent, that you will be targeting, how is it compared to the current trends that ENGIE is paying, because I think it is quite high?

Yes. We -- obviously, we are still defining in fact, both the product and the targets. We will have a negative downlift compared to the existing lease. Space rent for prime towers in La Defense are pretty sticky. So, obviously, ENGIE is paying a high rent after a year of indexation, but we don't see a huge drop, but obviously, a double-digit decrease, yes.

The next question comes from Florent Laroche-Joubert of ODDO BHF.

Hi Benat. Hi, Nicolas. I would have two questions. The first question. So, we've seen on your leasing activities that has been quite -- you have been quite active in leasing for the first 9 months of the year. At the same time, so today, in France, we have some political instability, if we can say like that. So, could you maybe tell us, say, a word on how it could impact today your interactions with your tenants? And maybe I will ask after that my second question.

Yes, listen, obviously, like I said, the context is complex to read. It might delay a bit decision-making processes on the corporate side. But as you saw, in fact, we have been capable to sign a lot of leases during those 9 months. I think, if you think on the client side, real estate decision or long-term decision, they commit for 6, 9, 10 years, most of the time and at the same time, they have corporate strategies regarding return to the office, optimization sometimes of their footprint, changing their organization, AI, digital and so on and so.

So, I think they are still delivering their strategy and their related strategy in line with their global strategy. So, at some point, it might delay some time but in the end, they commit on those new services. So, yes, it's more complex. It will be easier to have a more stable situation. But so far, having prime, efficient, centrally located buildings has played a role to sustain our activity.

Okay. I guess, maybe my second question, so would be on the investment side. So, in that context, what -- how do you see this activity on the investment side? And what is your appetite? And maybe other consequence of that, how do you anticipate the evolution of the valuation of assets in Paris for offices?

On the valuation, it's too early to say. I think, we'll have the first right by valuers in some weeks from now. So, I will not opine on future valuation. What we see on the market is clearly a strong appetite for prime Paris/Neuilly assets. You saw Blackstone confirming the acquisition on prime Paris Trocadero, and we have seen a series of buildings well located and quite well priced. So, the market is progressively regaining liquidity, but it's not as fluid as 5 years ago. And in that context, obviously, we as an operator in that market, we try to be agile to taking profits out of that situation.

The next question comes from Amal Aboulkhouatem from Degroof Petercam.

Perhaps just to follow-up on Florent's question on the letting market. So, I understand the activity remained, let's say, decent given the current context in France. But do you see more discussion on the level of rent or the level of incentives that you have to give to sustain the level of activity?

Thank you for your question. No, we don't see a major shift in negotiation, both on what you saw on our uplift numbers for the first 3 quarters, but also what we see on the market. So, obviously, there is a premium for prime and efficient and centrally-located buildings. So those, even on the competition, we have seen record high transactions in Paris CBD and in the rest of Paris, large head office like EssilorLuxottica, moving its head office from the Eastern Paris region into downtown Paris. We have seen JPMorgan. So, a series of these pretty high and low incentives. And obviously, on the rest of the portfolio, when vacancy is pretty high, economic rents are still facing challenges. So, I would say the trend is a bit the same, while a lower activity.

Okay. So, I can understand that the situation is even more difficult out of CBD and centrally located areas.

I would say it's quite variable from a location to another. Typically, what we saw in La Defense was pretty active leasing in La Defense and Boulogne. So, the market is pretty free there, even if rents are not increasing, but we -- there is a take-up and strong demand, maybe a bit better than like 2 or 3 years ago. AXA just took -- AXA, BNP just took a big portion of the lease in La Defense. So, the market is quite fragmented, I think. Some locations are still facing high difficulties. And some others when they are well located on top of transportation are still performing okay. I think, this is where looking at the averages might not be the most efficient way to understand the situation. I think, it's quite variable from a location to another. So overall, the market is clearly decelerating, but in some locations, it's accelerating.

Okay. Okay. Okay. If I may just have...

[indiscernible] Yes.

Okay. On the ENGIE deal that we -- you have, just to make sure I understand correctly. So now contractually, they are committed to pay the rent until June 2027, but they could vacate the building a bit earlier to allow you to start the renovation and modernization work a bit earlier. How would that impact the level of, let's say, rent and cash you are expecting? Would that be half a year you could sacrifice to get the, let's say, an early delivery of the project? How do you see it happening?

Obviously, it's a confidential agreement. So, I will just give the principles of them. We have, through that deal, secure the rent until the end of the current lease. So, there is no rental income change on our side through that transaction. On -- they will vacate the building earlier, so we'll be able to start the renovation work earlier. It depends on when their employees are leaving definitively the building. So, that's why, we have been saying that it will depend when the last employees are leaving the Tower.

And on the ENGIE side, obviously, having the tower under works, we will save a significant amount of service charges because the assets will not be under operations. And that's what has been the driver on their side to make that deal. So, on our side, we secured the rents, and we anticipate works. And on their side, they do savings on the operations from the day their employees are leaving and the end of lease. That's basically the principles of the deal.

The next question comes from Stephanie Dossmann from Jefferies.

Just to clarify on the T1 Tower. If I'm correct, there are sub-letters of 20% of the space. So, I was wondering about the reposition work you will do on the Tower? Are you able to split the works? How does it work, I mean, in fact? And what is currently your discussions with the company subletting the 20% of the space? Will they stay? Will they leave? How does it work, please?

So, I will not comment on the conversation we have currently on the subletting. But the principle, in fact, ENGIE is leasing two buildings, T1 that we have talked a lot and B buildings, but they don't occupy the B buildings. It's a sublet. So, the deal we've made was on T1, which is where ENGIE employees are, and then they leave and we will restructure. On the B building, which is an independent building next to T1, we are obviously discussing with the existing subletting to see if they want to stay or not and on the whole building or on a portion of it. So, that's what we are positively engaging with the subletting.

Okay. My second question will be relating -- yes, can you hear me?

Yes, sure.

Okay. My second question will be related to the rent level, I would say, oin the market. So currently, how do you see the market evolving in the CBD. We have seen market data showing increasing vacancy in the CBD? So, how do you see the market level, I would say, for the rent evolving going forward? Do you see toppish or not? And maybe on Boulogne, what would be the reversion on your portfolio currently?

On rent levels in the CBD, I've been -- since I came at Gecina, I'm quite positively surprised quarter-after-quarter on the rent. And obviously, typically, the acquisition we made on Solstys, in our name signature, we have not bet on future increase of ERVs on that zone. But what we see on the ground is that for the prime, most efficient, better-located buildings, rents have been increased during these first 3 quarters of 2025. So, the last deal by JPMorgan and Datadog on two prime assets have been north of EUR 1,200, so probably EUR 1,250, EUR 1,300. So, that's for the best assets. There is still scarcity and there is still increase in ERVs.

And on the rest, I think we have seen and we have been looking at the averages. We have more than 50% of the leases that have been signed during 2025, which are north of EUR 1,000 per square meter. So, the whole market on top of super prime, the average of CBD has increased also in terms of market trends during 2025. There is an increase in vacancy, obviously, but still decent takeup. So, we will monitor the situation during the next month. But it doesn't look to be -- somehow as negative as what I have shown when reading our some reports.

And on Boulogne, please?

And in Boulogne, like I said, a good portion of the buildings have been vacated in the last 2 years, and we have re-leased, let's say, 2/3 of our current market conditions. So, I would say one, there is no specific reversionary potential or downlift because most of the leases are pretty recent. And on the rest, but then we need to lease them and they will be let at market conditions. So, no specific disclosure on reversion in Boulogne basically, because most of the current leases are at current market conditions.

The next question comes from Thierry Cherel from Natixis CIB.

Hello, can you hear me?

Yes.

I wonder if you think about diversifying your portfolio exposure out of the office and maybe out also of the residential.

Not specifically. I think, if you think about the REIT, I think we need to be fully expert of what we do. I think the -- all the conversation we had shows that you need to have a high professionalism, understanding perfectly the markets where we are, and that's what we try to do on our two businesses. And second, I think we -- like we saw on the Solstys acquisition on our development pipeline, we still have room -- strategic room to grow and improve our company in the two asset classes where we are and the locations where we are. So, for the time being, no specific willingness to do something that will less master than what we do today.

And my second question is, do you intend to increase your development pipeline going forward?

Not specifically. We -- as you saw, we already launched like four big projects on top of T1 Tower that will come. So, I think, we are pretty loaded there. On the existing portfolio, we don't see a major refer to come in the next 2 or 3 years on top of what we have launched. And then, it will depend on our investment activity. So, if -- we are always monitoring the market to buy assets on which we can create value and create alpha, but specifically on the current portfolio, not much.

Have you bid on Trocadero assets?

No. Like you saw, it was the Blackstone buying it.

Yes. Okay. And maybe last point. Looking at the negative net absorption on the Paris office, even inner Paris office market. I wonder when the bottom will be reached? What's your perspective about that?

I think, we are pretty close to the lowest level of take-up historically on the whole Paris region, by the way. I think, probably we are at the bottom of that leasing market. We are interacting a lot with leasing agents. So, yes, I think we are close to the bottom. But as I said, it very depends on location. The market is free in a series of location and more quiet on some others. So, if you escalate a bit on the understanding of the market, what has decreased a lot in the global take-up of the Paris region is last transaction on the outskirts. And probably we'll have maybe 50 transactions above 5,000 square meters on the whole market, very concentrated on Paris and La Defense.

And probably, that's a low point. So, it should increase again following the return to the office announcement by the large corporates. And the fact that we will have lease expiries from '15, '17, '18 that has been quite active leasing years in the past, and will probably lead to some more moves from those large corporates on the outcomes. But -- so, yes, I think we are pretty close to the low point.

Okay. So, and I could conclude that it's also your point of view about the optimization of office footprint from large corporates.

Yes. We are following one data, which is when you divide the take-up, how many companies are increasing footprint or flatting footprint or declining footprint. Two or three years ago, the majority of tenants were decreasing footprint when signing a new lease. Now we have companies declining footprint, it's probably 15% to 20% still. And that's sometimes because they have less employees. Most of them are flat and 30% are increasing footprint. So, if there is one inflection point in the market, is the fact that we are -- the decreasing face more behind us than in front of us, based on the recent data from Walker.

[Operator Instructions] The next question comes from Jonathan Kownator of Goldman Sachs.

Just one more question on new supply, please. Can you help us understand if there's still some new supply coming through and whether there is a new supply that is competing with your product in the CBD or you don't think that supply is actually competing? And how do you think that that's going to be absorbed? And when do you see new supply tailing off?

Thank you, Jonathan. On new supply, I think we -- like I commented previously, we have, let's say, two main leasing strategies on the CBD, one which is for small services being at the highest point of the quality by giving operated offices. So, fully furnished, fully equipped, fully serviced offices. And on that, performances are excellent because you don't see so much qualitative offer facing our offer. So, the average small surface quality in the CBD is pretty poor. So, that's why we are reaching pretty high level of services and quick relocations and re-leasings.

On the large services, most of the portfolio have been secured over the last 2 or 3 years, like the Mondo, the Icône, that we have done also renewals recently. So, our next challenge is signature of Solstys acquisition. And on that, we don't see much competition with large corporate service and efficient building. So, not so much competition either on that front. So, most of the competition in small buildings, let's say, average quality, that will be less, obviously, but not perfectly competing with what we have. At least, that's a bit our intention and our play on that one.

So, okay. So, if I understand correctly, the new supply in Paris is mostly in small building. That's what you're saying is mostly refurb of small buildings. Is that, what I understand?

Yes, not 25,000, 30,000 square meter building that we have with Signature, yes. You're going to find some, but take-up is pretty wide in Paris and Paris CBD. But yes, we don't see so many buildings in capacity with competing with Signature. Signature being the new name of Solstys after reform.

The next question comes from Mary Pollock from CreditSights.

Good morning. I have, I guess, a somewhat technical question on valuations. How will the move in French government bond yields impact valuations? How should we think about that filtering through for year-end?

Well, it's both technical and psychological. I think, the French bond is now ranging between 3.3% to 3.5%, which is pretty in line with our current bond level. So here, clearly, through Gecina, you can see a decorrelation between prime real estate and the French sovereign bond. So, that's why I was talking about general psychology.

On the -- and the question is around risk premium on top of French sovereign bond or 10-year swaps. So, that will be a technical discussion with the operators. How do we factor is the fact that we have a gap between sovereign bonds and 10-year swaps. So, that will be a question for the next quarters on regarding the risk premium on which rates.

Okay. So that's a decision that will be taken by the valuers?

Obviously.

Valuers, of course, are considering what they are seeing on the market. And what Benat said earlier on the fact that clearly, we can contemplate a couple of transactions. So, there are data points, at least inside Paris, in CBD market, where you have a couple of investors, could be a local or international investors, which are giving a good hint of where should valuer see cap rates at year-end.

The next question comes from Sheetal Jaimalani from Deutsche Bank.

Just one question from my end. Just wondering about the pre-lets' status of the new developments? And when can we hear any news on that?

Thank you for your questions. So far, nothing to announce. Otherwise, we would have included that into the press release. But we are actively working on it. We have active discussions on those buildings. But so far, nothing signed yet.

The next question comes from Céline Soo from Barclays.

I just want a clarification on the EUR 140 million CapEx that you're planning on Q1. Are you going to treat this as maintenance or investment yielding CapEx? And a sub-question to that. If that's maintenance CapEx, of course, that's going to decrease your cash. And we understand your EPS will be quite flattish next year. So, I was wondering if that makes you want to change your dividend policy going forward to base it more on an AFFO basis rather like some of your peers rather than FFO?

Thank you for your questions. So, decision is not made there. But anyway, it's CapEx, so it's capitalized. So, the accounting treatment will be the same. I think, on what we are intending to do on T1 is to have, let's say, a Tower ready for multi-tenant. So, it will be a transformation of the Tower. So that, in fact, we don't have in the future, ideally to face those huge vacancy from a day to another. So clearly, we want to improve the Tower services, but also creating different lobbies, having a fully prepared Tower for multi-tenant, so that it can last longer and have a stickier cash flow than what we have today. So clearly, the Tower will be improved significantly.

Regarding dividend policy, we have a complete business model where I think our dividend coverage is pretty good now. And we will be capable, in fact, to follow on that track. We have been conservative, not raising our dividend in the last years, while cash flow was increasing almost by EUR 100 million. That was in the view also to be capable to sustain it. So, no specific change in our policy.

Sorry, can I rephrase my first question to make it simple, key one. Are you planning to make any returns on the EUR 140 million CapEx?

Yes, it depends the way you look at returns. The Tower is empty by mid-'27. Can we re-lease as is? Yes, probably. And we look at two options. One, re-leasing as is probably with a lower ERV and trying to be more prime, more in line with the market and re-lease it faster and with a higher rent per square meter compared to if we don't do anything. So, if you look at those two options, obviously, there is a return. Otherwise, we will never do it.

[Operator Instructions] There are no more questions at this time. So, I hand the conference back to the speakers for any closing comments.

Thank you all for listening today. Thank you for your questions, very insightful and see you soon. Bye-bye.

Hello, and welcome to the Gecina 2025 Half Year Earnings. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded.

[Operator Instructions] Today, we have Benat Ortega, CEO; and Nicolas Dutreuil, Deputy CEO in charge of Finance, as our presenters. I will now hand you over to your host, Benat Ortega, to begin today's conference. Thank you.

Good morning, everyone, and thank you for joining us today. The past 6 months have been both intense and exciting, and we are proud to be delivering a strong performance. Let me begin a bit differently today, taking a step back and looking at the bigger picture. Hybrid working and now the return to the office are more than a trend. It's a structural shift that is reshaping workspaces and redefining demand.

Many companies in France, Europe and beyond are placing renewed emphasis on in-office collaboration. Paris is definitely standing out as a leader. People here spend 3.5 days a week in the office, that is 70% of their working time, well ahead of other global cities like Singapore, New York, London or Toronto. And recent data shows that the situation is even improving.

In this context, our clients are clear. In order to encourage the employees to be more at the office, they look for better space, more central, more premium and more sustainable. And these better square meters are, by definition, scarce, creating a clear premium for those already well positioned and capable to meet this demand.

Our office leadership is based on these client expectations. Our long-standing strategy is built around these needs to align our portfolio with what matters most to them. It's been plus 16 points shift towards central locations since 2010, with nearly 80% now in Paris and Neuilly, plus 30 points increase in office exposure over the same period.

More than half of the portfolio has been refurbished in the last decade. Fully serviced real estate now covers 9,000 square meters of offices and 70% of our Parisian residential assets.

On the CSR front, Gecina has been ahead of the curve, minus 60% in carbon emissions and minus 31% in energy consumption since 2019. And at the same time, we've delivered financially. Plus 25% in earnings per share growth over 5 years, strong profit on cost from redevelopments while keeping a solid LTV that gives us room to accelerate.

Our footprint lies in markets with the most solid fundamentals. Paris and Neuilly, for example, represent less than 20% of total office supply, yet they capture nearly half of the demand. Vacancy remains low, especially for new and refurbished assets where it drops to just 0.6%.

Prime rents in the CBD have risen by 34% over the past 5 years. And recently, we were proud to set a new benchmark with an headline deal on Icone at EUR 1,200 per square meter for the whole building. The upward momentum is such that even in our best-let assets, we have significant reversionary potential as leases will be mark-to-market.

One more perspective to understand the market and our positioning. As you can see on the left side on the slide, major deals above 5,000 square meters in Paris region signed or expected in 2024 and 2025 are concentrated around the best business locations in the very central areas where our portfolio is focused, obviously, Paris but also Boulogne-Issy and La Defense. Our assets are, therefore, located where clients now want to be.

As a consequence, we can share today our strong leasing performance during H1. Nearly 95,000 square meters let, prelet or renewed across all geographies, of which two stand out preleasing.

27 Canal, 74% prelet to the digital division of French -- of a leading French sports retailer ahead of its delivery later this year in a submarket where preleasing is rare. And the 162 Faubourg Saint-Honore, 3,300 square meters fully pre-let at prime CBD rents with an 87% uplift to a consulting company.

In Paris CBD, we achieved a 29% rental uplift. And in just 6 months, that's EUR 48 million of annual rents secured on 7 years in average. While market data often focused on Paris region averages, this leasing performance illustrates how the right asset in the right location with the right teams can make a difference.

Rental income remains robust at 3.8% like-for-like, driven by indexation, though we are now seeing it decelerate as inflation normalizes in Europe. Beyond indexation, two key drivers support rental growth income, strong rental uplift on new leases, plus 9% on office in average, plus 14% on housing in Paris, and occupancy improvement, plus 60 bps since year-end 2024.

On a current basis, rental income growth is even stronger, plus 4.9%, thanks to the large 2024 pipeline fully pre-let assets. The strong operational performance continued to drive robust cash flow growth, a key metric for us. We apply daily discipline across the P&L from rental income, property charges optimization to G&A and financing structure.

Notably, G&A as a percentage of rental income has improved by 170 bps over 3 years. At the same time, digital initiatives helped to streamline back-office operations and refocus teams on client services, engineering and development expertise to offer better service to our clients. As a result, we are delivering another solid plus 6.4% EPS growth.

On the valuation front, we are seeing encouraging signs in the investment market with renewed liquidity for large transactions and the return of international capital. Values are up 1.6% over the last 6 months on a like-for-like basis, and the portfolio reached EUR 17 billion before factoring in the Rocher-Vienne acquisition closed yesterday.

Taking a broader view, values have already rebounded plus 2.3% since end '23 trough, confirming a clear trend of recovery. This reflects the ongoing market bifurcation with consistent gains in Paris and Neuilly, supported by solid rental growth, more than offsetting adjustments as well. What's also striking is that the inflection point in the direct market is now clear, yet still not fully priced in by listed equity markets.

Looking ahead on the investment front, let me come back to the key decision we made in H1 2025, totaling EUR 1.3 billion. First, we completed over EUR 750 million of disposals of mature residential assets, including our student housing portfolio. Second, we acquired a large prime office complex in Paris CBD for EUR 435 million, reinforcing our central positioning.

Third, we've reinvested close to EUR 100 million in our flagship office pipeline. I'll return to that in a moment. Another step toward prime office leadership after heavy disposals and investment in our accretive pipeline those last 3 years. It also showcases Gecina's inhouse expertise from sourcing and executing transactions, reinvesting to create future value.

Importantly, even during those challenging years, we maintained a disciplined focus on asset quality and location, and we keep a strong balance sheet. One illustration of this strategy is our recent acquisition of Solstys in Paris CBD.

So what's the plan? This acquisition involves two buildings adjacent to our existing 7 Madrid property right in the heart of Paris CBD. We want to transform this site into a 45,000 square meter premier office destination, benefiting from a unique location 50 meters from the bus transportation hub [indiscernible]. We plan a EUR 40 million CapEx program to unlock the full potential of the asset.

The real estate fundamentals are strong, like unique large floor plates in central location since the asset was fully refurbished or rebuilt in 2013. And we will leverage those strengths to create a rare set of amenities only possible with such a size from rooftops with amazing views, wide range of food offer, fitness, auditorium, meeting rooms, large bike park, jetlag rooms, et cetera, available in the future for the three assets connected to this business hub.

Delivery is scheduled for end '26 and we are already actively working on the leasing so that it contributes to rental growth starting in 2027. Once again, this is a value-driven initiative with a projected yield on cost of 6.3% and an expected profit on cost in the range of 35% to 40%.

Taking a step back to look at the broader development pipeline, four projects are key drivers of future rental growth beyond 2027 with EUR 80 million to EUR 90 million of annual rent. We are currently advancing on those four major flagship projects, the Rocher-Vienne, just mentioned, Quarter, Les Arches du Carreau and Mirabeau, all located in highly visible areas with magnificent architecture, strong service offering and excellent connectivity.

With EUR 500 million to be invested by '27, targeting a 5.7% yield on cost, these projects reflects a deliberate strategy to make our portfolio more central, more prime and more sustainable.

Always anticipating what's next, we are working at the same time closely with our client, ENGIE, to prepare the future of the assets. The current lease runs until June 2027, but should the clients seek early flexibility, an exit would be possible, subject obviously to a termination fee based on the remaining lease term.

In parallel, we are advancing plans to reposition the Tower as a prime office asset, leveraging on its strong fundamentals, large floor place, excellent CSR performance, no asbestos and a central location near the transportation hub of La Defense. In a context where no major new or refurbished large prime office space is expected in La Defense before '27 or '28, we anticipate a more favorable supply-demand dynamics than now.

While average vacancy is still high at La Defense, take-up has been strong in the recent period. La Defense is attracting a growing mix of corporates with a take-up up 60% in 2024 versus the previous year. And vacancy on new and refurbished services represent 4% of La Defense stock, confirming tenant preference for upgraded space. Once repositioned, even if it's a challenging task, we are confident the Tower will be let at the right price to value.

Meanwhile, and it's important, our ESG strategy continues to deliver solid and measurable results. Here again, our envisage is clear, to pursue CSR excellence on a daily basis, working closely with our clients to maximize impact. Since 2019, we achieved 31% reduction in energy and 60% cut in carbon emissions. This momentum is ongoing with an estimated additional 3.7% reduction in the first half of 2025, in line with our midterm goals.

Maybe a standout example of this is 37 Boetie that we recently delivered and now backed by 18 months of operational data. What makes this asset truly exemplary is that the ambition set during the design phase, particularly around energy efficiency and CSR, have been fully materialized in real life.

The teams have achieved a 63% reduction in energy consumption against the old assets, significantly outperforming market benchmarks. It's a clear demonstration that what we design, we deliver.

Now moving to the balance sheet. All of this is obviously possible because we manage debt with the same discipline as the asset side.

Our strong and agile financial structure provides control with a well-managed loan-to-value at 33.6%, visibility backed by best-in-class A- and A3 credit ratings, a long-term debt maturity of 6.4 years, one of the lowest cost of debt at 1.2% and a robust hedging strategy, controlled visibility, but also flexibility, thanks to our 100% corporate debt structure, high liquidity and access to a wide range of financing instruments. And 100% of our financing include the CSR components.

Based on all these strong fundamentals, we raised the guidance to the upper half of the initial range. Earnings per share are now projected between EUR 6.65 to EUR 6.70. I would like to thank all our teams and partners for their efforts to align our strategy with client expectations for central prime and sustainable real estate.

And during H1, as a summary, we achieved a record high leasing performance, strong rental uplift and improved occupancy. We delivered consistent cash flow growth. We unlocked future value creation in our NAV through our investment decisions and maintain a strong balance sheet that is ready to operate and face growth opportunities.

Thank you for your attention, and we are now ready to answer your questions.

[Operator Instructions] We'll now take our first question from Stephanie Dossmann of Jefferies.

I would have three questions, please. The first one on the top line, The -- we calculated that the highlight should lend to something like 0.8% by year-end. And I was wondering what is your assumption for indexation for '26.

The second one would be on the CapEx for the ENGIE Tower. It looks a bit higher than for the Rocher building per square meter, I would say. So could you please give us a bit more color on the what kind of works, the difference in the works compared to Rocher, for instance? And what kind of yield on cost you expect to achieve?

And maybe the last one on the announcement earlier today. What is the rationale of launching a tender on your '26, '27 bonds and issue a new one now? I mean I feel it's a bit early. And so do you expect interest rates to increase or maybe your spread to increase due to the situation in politics in France, economy and so on? Or what is the rationale there, please?

Stephanie, thank you for your questions. Obviously, yes, inflation is decreasing over time. There is always a lag effect on the impact of indexation in our cash flow. So yes, the last index for that was 1.6%. So we should progressively converge on that target during the year 2026.

On CapEx T1, obviously, we -- there is a bit -- we are a bit early in the process. So we wanted to give you a bit of view on what we were planning, but we are still working on the CapEx program. What we see, like I said, is that there might be a significantly lower supply for prime space in La Defense.

Most of the tower delivered between 2021 and 2022 are now fully let. And we have not seen any new major redevelopment or new sites for La Defense. So that's what we are assessing right now, how deep we need to go for renovation to be considered as the best tower in La Defense, and therefore, leading to a smoother re-leasing process.

Have in mind that works in a tower in France are more expensive. Fire safety regulation is a bit tougher. Lifts, obviously, you cover 35 meters of height, so -- 35 floors of heights, so lifts typically are more expensive than in a classical building inside the city. So yes, there is a CapEx.

The good news, like I said last time is that the facade is highly performing. So we don't need to change the facade. So it would be mainly decoration, improving the amenities and making an upgrade on technical installations.

Maybe the last point on the rationale of the tender, Nicolas?

Yes, sure. You're right. In fact, when you look at our financing maturities and our level of liquidity we had, of course, no need to issue a new bond. But we thought that, as always, anticipating things is the best way to get the best conditions.

So it's much more has to be seen as an opportunistic approach, considering that today, the yields and the spreads on the Gecina bonds is quite attractive for us. For a 10-year maturity, we should be below 100 bps, which is somewhere, I think, a good signal for the market in terms of adaptivity and risk attached to the Gecina's nature and so we wanted just to take a chance to secure this level of spread.

The deal with the tender offers on the '27 and '28, which were quite high level of issuance because you remember that the '27 is a EUR 700 million bond and the '28 is EUR 800 million. So it's also a way for us to start to repay and decrease these maturities. So always with the same mood, which is anticipated things.

We will now take our next question from Veronique Meertens of Van Lanschot Kempen.

Two questions from my side. Maybe first on capital recycling. Obviously, you've already been very active in the student housing and also deploying the capital. But given that the first signals of the investment market in Paris opening up for larger transactions, are you actively looking to dispose some lower-yielding assets in the portfolio as well?

And then secondly, I think usually, you split your like-for-like rental growth always between indexation and reversion. I think I couldn't find it this time. And I was just wondering you mentioned a 9%, I think, reversion on your relettings, but looking at the actual like-for-like, it doesn't really show, I believe. So if you could give some more color on that split in like-for-like rental growth.

Yes, capital recycling, you're right, the market is progressively reopening for Central Paris. I was referring in one slide also on the embedded reversionary potential for some assets that -- which are recent and where we still have reversion.

So I think we are assessing as always, the future return on capital, IRR of all of our assets, and we are deriving our investment and disposal strategy based on the future growth and future value creation of our assets. So yes, like always, you've seen that we have been one of the most active REITs to deploy and redeploy capital. So we will continue, but no specific update on that, on top of what we have already done.

On your question on like-for-like, yes, I think we have a bit the same split like previous years. Indexation is decreasing, obviously, and we are still above indexation based on the two aspects. Have in mind that most of the evolution of a quarter or a semester is based more on the previous year than on the actual. Typically, occupancy should play a role, but more later than previously, but yes, it's a bit the same split like last year.

And we'll now move on to our next question from Florent Laroche-Joubert of ODDO BHF.

I would have maybe one question on your leasing activity. So you have been very active in H1. So what shall we expect in H2? Have you any view on that? And maybe could you make maybe a more -- give us more color on the situation in Boulogne? So how shall we expect the occupancy to evolve in the coming months there?

Yes. Thank you. It's always tough to project our leasing activity. We depend on client decisions somehow. For the timing, the pipeline of leasing is not bad, but I don't want to give you more color on that. At least H1 was excellent.

On Boulogne, I think Boulogne played a part in our leasing activity. This first half, we signed a lease with a large car manufacturing company in -- on Horizons. We have already re-let 2/3 of our Solstys project, so it's progressing well.

Solstys, typically, we had two tenants pharmaceutical companies leaving the assets. They are leaving by year-end, and we have already pre-let 2/3 of it. So when we have the right assets and the right strategy and the teams are super active, we can deliver. So first half was not bad in Boulogne.

[Operator Instructions] And we'll now take our next question from Michael Finn of Green Street.

I'm actually just curious if you could comment on the size of the assets that you possibly have that you could acquire in the Eight, similarly to the one that you just bought, that would meet your -- that would meet the cost of capital that you currently have.

You were referring about cost of capital?

Yes, yes, yes. So I'm just curious if you could comment on the opportunity set of similar assets to the one that you just bought in the Eight.

Yes. In Paris, there is a reasonable number of assets which are eligible in terms of quality and location. The challenge, and that's what we have done with that Rocher-Vienne acquisition with Deka is to find the right spot between a seller willing to sell, maybe some work that maybe our teams can do better than others, and our return on capital that we expect to be accretive for NAV, for return on capital and for cash flow growth.

So there are, but we are selective. So there is no rush on that, but we are -- like you saw, we are active on screening the market, discussing, finding. In the past, we did some swaps when people didn't really want to sell, but wanted to swap between core assets and to be redeveloped assets. I think we have a range of ways, in fact, to try to get market shares in the best part of Paris.

We currently have no questions coming through. [Operator Instructions] And we'll now move on to our next question from Amal Aboulkhouatem from Degroof Petercam.

Just a follow-up on the investment strategy and especially the development pipeline size. You have a development pipeline that looks quite sizable at this stage. How do you look at it going forward?

When you look at new investment opportunities, do you think that you should go for perhaps more cash-yielding assets going forward? Or do you think there is still room for perhaps noncash yielding assets that have to be refurbished immediately? How do you look at the risk profile and the cash generation -- cash flow generation, that the investment target should you have?

So managing the REIT is looking at several different aspects of the company. So like you said, we try to manage both the balance sheet, the cash flow production, value creation and NAV and so on. We -- when we looked at the Rocher-Vienne acquisition, we also tried to not to have too many assets to be leased at the same time, exactly on the right same spot and the right asset quality.

So typically, what we like there was -- in fact, we decreased significantly our pipeline in Paris CBD after leasing Mondo, after leasing 35 Capucines, after leasing Icone. So we felt that we have room, in fact, to accept some risk on Paris CBD. So it's all those criteria that play a role. So yes, we could -- it's a significant leasing challenge for us that pipeline, but should deliver over time, we are confident because there are -- assets are excellent and location are excellent also.

So we look at more the returns then for the time being, more than at returns against what we said, against our marginal cost of debt and marginal cost of capital, more than really just is it cash flow yielding or noncash flow leasing short term. We have demonstrated over the last 3, 4, 5 years that we were capable, one, to sell prime opportunities, invest in prime location at the same time keeping cash flow growing and not leveraging the company additionally. So that's what we will try to continue to do.

Okay. That means that we shouldn't be surprised perhaps if you go into more value-add investment going forward?

You should not. Like you saw, we are opportunistic in what we buy, opportunistic in what we sell, because we don't need that much, but we won't.

And we'll now move on to our next question from Jonathan Kownator of Goldman Sachs.

Just wanted to get a bit more color on the leasing and reversion and how it's evolving? Obviously, still strong in Paris, still a little bit weaker in areas. You mentioned leases in Boulogne as well. So it would be good to get a bit of color on the reversion that you were able to capture or the negative reversion on this pre-letting. And also, how do you see it evolving, given, I think, good conditions that you're outlining in terms of demand?

Leasing reversion, I will say the same, like you said, obviously, it's highly positive inside the city, and negative and sometimes double-digit negative elsewhere. And it's a bit still the same. I think pragmatically, we mark-to-market the rents. Good stuff is that in average is still positive at 9%. And have in mind that in the resi portfolio, we are at 14% reversion uplift in rents this quarter.

Yes, there are conditions. I think tenant demand is very focused on quality these days with a different base on pricing depending on the location. But clearly, they are trying to focus on the best spots, access to transportation hubs and qualitative buildings. So we try to continue what we do and having our clients satisfied by what we do.

And can you be maybe a bit more specific, like in Paris CBD, you obviously had a record leasing, but are you able to maintain that strong reversion? Or is it coming down a bit? And in the outskirts areas, a similar question?

The Paris CBD, I think, in average, it was 29% this first half uplift. And in the rest, it was minus 10%, I would say. For the whole Paris, I think it's in the range of 20% uplift in average. So it's quite different from a place to another.

What we see for the best prime offices, like we did for both Carreau de Neuilly assets, we earn significantly north of EUR 1,000 per square meter. So we -- when we compare the underwriting that we did for that smaller renovation 1.5 years ago, we have raised our target by 25%, 30% in terms of base rents. So for the time being, we still see a good market momentum on rents for the best spots and the best assets.

And we'll now take our next question from Nadir Rahman of UBS.

The question I had was on a comment you made on Slide 10, which is that the inflection is not yet priced in by the equity markets. So what's -- I guess, which metrics are you looking at to have made that statement? Is it the price to NAV discount? And also what level of equity metrics would you look at to, in your view, see the equity markets, therefore, pricing in that inflection? And how long do you think that will take?

I think how long it will take, it's more on your side to assess. We were mentioning, in fact, that point on two elements. One is we disposed more than EUR 2 billion of assets above NAV. So we see the discount to NAV while -- and we could have seen our previous disposal based on our own capacity to dispose while the market was quiet. But obviously, now that it's not only Gecina capable to sell at excellent prices, but the whole market that sustains a bit the NAV even more than in the past.

And the second aspect is on cash flow and dividend yield, where, in fact, we continue to post significant cash flow growth. And obviously, the multiples applied to those very solid and growing cash flow and dividend seems a bit under-priced against what we see on the direct market where when investors are getting -- are buying assets at pretty tight yields now. So again, so it's on both aspects of the way to evaluate a company like us.

That's well understood. And just a quick follow-up. What catalysts do you think you'll need to achieve or what the market generally need to achieve in order to draw investors to prescribe what you think is a sensible -- like a justified value for these -- for your share price?

Can you just rephrase your question? I'm not sure to have understood.

Of course, yes, sorry. So if you're saying that the inflection has not been yet priced in by the equity markets, what catalyst do you think investors need to see in order to see that valuation reach what you think is a justified level?

I'm a steady CEO, so I think we need to continue to prove. Like you saw typically for shopping center revaluation in the last 18 months, I think we need to continue to deliver. So it's back on us. I never like to comment market somehow. I'm just saying that we will try to continue to deliver, buying right, selling expensive and growing our rents and our cash flow. So I think it's back on us to consistently delivering our strategy and reassuring the market.

And we will now take our next question from Valerie of Bernstein.

Just a quick one from me. If I look at your disposals and acquisitions over H1, you've -- most of your disposals were in residential. And as a result, the share of offices has increased quite significantly. And I was wondering if we should read anything into that in terms of your future strategy in exiting residential or nonoffice segment, let's say.

Thank you, Valerie, for your question. Now what we wanted to say there is that we are now based on the market we see and the opportunities we have, we are more focused on investing in prime office than investing in housing assets based on yields and what we see on the disposal side, having disposals which are as low dilution as possible, and on the other side, where we can find the best yields and best IRRs.

So that's what we have done this quarter. We did a bit of that also in the past. So we are now trying to, in fact, focus on prime office because this is where we see better growth.

Have in mind that in 2023, we sold some office assets, small ones at super tight yields. So again, in fact, we try to deliver growth, deliver capital growth for our shareholders, and we adjust to market situations. For the time being, we keep both activities. We are, like you saw, transforming both with the same DNA, more services, more leasing -- dynamic leasing.

We signed 700 leases this first half against 800 in a normal year. So we should have a more dynamic leasing on the resi side. So we apply the same DNA for both activities, and we are very proud of that. And then we try to be -- to navigate to deliver better shareholder return.

There are no further questions in queue. I will now hand it back to Benat Ortega for closing remarks.

Thank you for your questions and listening this call today, and we should see you soon in different meetings. Thank you, all.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.