Gecina Reports First-Half Profit as French Company's Properties Gain Value

Gecina SA, France’s second-largest publicly traded property company, reported a first-half profit after its apartment blocks and offices in Paris gained value.

Net income was 200.9 million euros ($261 million), or 3.27 euros a share, compared with a loss of 510 million euros, or 8.33 euros, a year earlier, the Paris-based company said today in a statement. Net asset value fell 2.1 percent to 98.6 euros a share after the company sold properties.

Paris offices appreciated in the first half as investors including German funds and French insurers stepped up their purchases amid signs that prime rents are bottoming out. Gecina’s real estate appreciated by 186.1 million euros in the first half. The company booked 1.86 billion euros in writedowns in the two years through 2009.

Gecina forecast an increase of 4 percent to 5 percent in the value of its assets this year, with rents falling by as much as 6 percent.

Net cash flow excluding changes in assets values fell 6 percent to 2.90 euros a share, in line with Gecina’s forecast of a decline this year, as disposals cut revenue. Net rental income dropped 3.6 percent from a year earlier to 282.3 million euros.

Asset Sales

Gecina raised 300 million euros from property disposals in the first half. The transactions enabled the company to reduce net debt to 4.84 billion euros, or 45.7 percent of the value of its properties, at the end of the first half.

Chief Executive Officer Christophe Clamageran has targeted 430 million euros of asset sales in 2010 after the company raised 756 million euros last year.

Clamageran, who joined Gecina in November, is focusing the company on offices, apartment buildings and health care buildings in France. He plans to sell the company’s Spanish properties and Gecina’s French warehouse assets.

His goal is to reinvest the proceeds mainly in Paris region office projects and developments, increasing these assets by 80 percent to 9 billion euros by 2014.

Gecina has advanced about 15 percent in Paris trading in the past six months, more than double the gain for the French REITs index compiled by Amsterdam-based Global Property Research.

To contact the reporter on this story: Simon Packard in London at

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