Hello and welcome to the Conference Call Icade Results as of March 31st, 2025. Please note this conference is being recorded and for the duration of the call, your lines will be on listen-only. However, you'll have the opportunity to ask questions. [Operator Instructions] I will now hand you over to your hosts, Nicolas Joly, CEO; and Bruno Valentin, CFO to begin today's conference. Thank you.

Good morning. Nicolas Joly speaking. Well, thanks to everyone for being on the call today. Well, I'm happy to be here today with Icade's new CFO, Bruno Valentin, who's just joined the Group last week. Delighted to welcome him to the team and I'm sure he will make a great contribution to the financial team and to Icade. So this morning we are pleased to present Icade's results as of March 31st, 2025. This presentation will be of course followed by a Q&A session. So let's move to Slide 5 for an overview of the main messages of the first quarter of the year. The Investment division reported a good rental activity with circa 50,000 square meters signed or renewed during the quarter. This volume was boosted in particular by the signing of Pulse building with the Seine-Saint-Denis Departmental Council for 29,000 square meters. The resilience of the financial occupancy rate for well-positioned assets was confirmed at 88.4%, excluding the positive impact of Pulse. Revenues were pretty stable with like-for-like growth of 0.5%. Icade's Property Development business grew in volume and value, supported by good momentum in the residential segment. However, we remain cautious about the pace of recovery given the still uncertain environment and French political agenda. On balance sheet aspects, Icade confirmed its very strong liquidity position at EUR2.3 billion at the end of March. Additionally, in April, the Group signed EUR190 million of revolving credit facilities in attractive conditions in line with existing financing. Lastly, we reaffirm today our 2025 Group net current cash flow guidance presented last February. Let's look now at performance by business divisions starting with Commercial Investment. The leasing market got off to a slow start in Q1 2025 with a take up of 420,000 square meter down minus 6% compared to the same period last year. Activity was driven by medium sized transaction of between 1,000 and 5,000 square meters and by positive momentum on the outskirts of Paris. During the first quarter, Icade's team posted a very good performance with circa 50,000 square meters signed or renewed. These signatures and renewals represent an annual rental income of EUR12 million and a WALB of 9.1 years. In particular, Icade signed the largest deal of the quarter with the Seine-Saint-Denis Departmental Council for the entire Pulse building in Saint-Denis for a 12-year term with no break option. The teams also managed to sign a lease on an extra 4,200 square meters in the Jump building in Aubervilliers with the same tenant. These leases on these assets are due to start in late 2025 early 2026. Icade also signed or renewed nine leases covering a total of more than 5,000 square meters in La Defense and Peri-Defense area in Q1 2025. The financial occupancy rate stood at 83.1% as of March 31st, 2025, minus 1.6 points compared with December 31st, 2024. The decline in the occupancy rate mainly concerns office to be repositioned as expected. In the well-positioned office segment, the financial occupancy rate remained resilient at 88.4%, thanks to leases signing the next building in Lyon and the Tour Eqho building in La Defense. Taking in account the lease signed in February 2025 for Pulse, the financial occupancy rate of well-positioned offices stood at 91.1%. Let's now move on to the operational performance of the development business line. Continuing the trend observed in H2 2024, we've seen a good sales momentum in the residential sector. At the end of March 2025, the Property Development Division recorded 697 orders totaling EUR209 million, up by plus 16% in volume and plus 22% in value driven by both individual and bulk orders. Individual orders represented 432 units for EUR148 million. The growth in value was due to a different product mix with an acceleration in the sale of upscale development projects such as 58 Victor Hugo in Neuilly and 6eme Art Lafayette in Lyon. Institutional sales were also up, but this is also due to base effect given a low volume in Q1 2024. The institutional investors accounted for 38% of orders in volume terms, which is, as you know, generally less than the final share on a full-year basis. Let's move to Slide 10 in which we present the trend in consolidated revenue as of March 31st, 2025. Icade's total IFRS revenue saw an increase of plus 1.2% coming from a slight growth in revenues in the two business lines. Let's jump directly to next slide for details on Property Investment division. As of March 31st, 2025, gross rental income from Property Investment remains stable at circa EUR94 million. On a like-for-like basis, the change was plus 0.5% year-on-year. Gross rental income was adversely affected as expected by tenant departures in 2024 and negative reversion on renewals. Indexation had a positive impact of plus 3.3%, but at a slower pace than last year. It should be noted that rental income was also boosted this quarter by the positive effect of early termination fees received on offices to be repositioned. Economic revenue from Property Development amounted to EUR254 million as of March 31st, 2025, down minus 2.2% compared to the same period last year. The changes in revenue reflect differences in performance between market segments. Revenue from the Residential segment totaled EUR205 million up by plus EUR16 million compared to the end of March 2024. In Q1, this increase continued to be fueled by the good sales momentum seen in H2 2024 among individual investors and first time buyers for homes sold individually. Revenue from the commercial segment was down by minus EUR32 million compared with the same period in 2024. This due to the completion of major project Envergure in Romainville at the end of 2024 and the absence of new commercial contracts signed in 2025. To be noted also that the economic revenue includes the proceeds from the sale of the Tolbiac building for EUR19.5 million completed in Q1 2025. Let's move on Slide 14 for the 2025 guidance. Based on the Group results as of March 31st, 2025, and year-end forecast, the Group net current cash flow 2025 guidance is unchanged. We expect indeed Group net current cash flow of between EUR3.40 per share and EUR3.60 per share in 2025. To be noted that the Group net current cash flow includes EUR0.67 per share coming from non-strategic operations. For the sake of clarity, this amount as already explained, has been estimated without the impact of disposal of these activities or the repayment of Icade's loan granted to IHE. The guidance will be adjusted in due course as and when disposals are met during the year. Well, to wrap up, I would say that the limited growth in sales in the first quarter 2025 reflects in particular some departures in 2024 and the slowdown in Commercial Property Development activity. Nevertheless, Icade's team achieved a number of very good operational successes at the start of the year, including robust leading activity with the full re-letting of the showcase Pulse building and growth in housing orders in the Property Development division. The teams are fully mobilized to continue in this direction and in the deployment of ReShapE strategic plan. With that, let's start the question-and-answer session.

Thank you, sir. [Operator Instructions] The first question comes from the line of Veronique Meertens from Kempen. Please go ahead.

Good morning, all. Thank you very much for your presentation. For me some questions around your rental income and the like-for-like of that. So I noticed that the well-positioned offices are minus 4.3%. Is that purely driven by the Pulse building that's vacated where on the other side, you see offices to be repositioned at plus 24%. So what's exactly in there? And then lastly, on the Light Industrial again, there was also a slight drop in vacancy and like-for-like below indexation. So I was wondering if you could give an update what you're seeing in that segment and how leasing activity and discussions are going there. Thank you.

Yes. Hello, Veronique. Thanks for your question. Well, starting with the first question regarding the like-for-like more especially on the well-positioned offices, this indeed comes from two main effects. The first one, as you highlighted, is mostly the departure of the Olympic Committee on the Pulse building. This is for the first one. And second effect is a base effect as we received EUR2 million of indemnities on the well-positioned asset last year in Q1 2024. Regarding this like-for-like on well-positioned, we do not expect any further deterioration in 2025 regarding also the financial occupancy rate and the rents growth. And about the occupancy rate regarding Light Industrial where there's a slight decline indeed in line with our expectation given the announced departures that are now taking effect. On the Light Industrial, nevertheless, there was some good news to be expected with a signature done in April which represents more than one point in the occupancy rate. We've talked about that in the annual results. We had just delivered roughly 5,000 square meter building that has now has been let through the signature of a new lease in April.

Okay. That's very clear. Thank you. And on rent levels in the Light Industrial segment. Is there still some positive reversion left or what's your expectation there?

Well, clearly the Light Industrial asset class is in our view a business that could be impacted by the macroeconomic context. But nevertheless, that is the reason why we are focusing on the Primus location. And regarding that, fortunately, Icade offers unique location selective on prime lettings. We are able to crystallize some positive reversion in the new leases we are signing. But once again, this should, in our view, stabilize given the macro in the coming months and years.

Okay. Very clear. Thank you.

Thank you, Veronique.

The next question comes from the line of Stephane Afonso from Jefferies. Please go ahead.

Yes, good morning, and thank you for taking my questions. Two questions, if I may. The first one on offices.Would it be possible to provide an update on the Eqho Tower, particularly in terms of lease expiries? As I mentioned that the lease with KPMG is set to expire by the end of the year. Also on offices, are there currently any advanced negotiation in asset disposals? And finally, on Icade Promotion, orders increased in volume, in value terms and suggests that prices have increased high-single-digits. And I was wondering to what extent has the mix effect contributed to this growth? Thank you.

Okay. Thank you, Stephane, for the questions. Starting with offices on the Eqho Tower, indeed, we saw that this clearly benefits from the improvement in the macro dynamics of La Defense district, as you saw. And we've signed some new leases last year and this year on the Eqho Tower. Indeed, the tenant of the Eqho Tower is KPMG, as you know, with an end of the lease, which is in 2027, likely. As you know, we have close relationship with all our tenants and especially with our major tenants. So, of course, we are in close discussion with KPMG regarding what they intend to do in 2027. But discussions are great with them. And the Eqho Tower is honestly attractive in our view, as an asset benefiting from the strong fundamentals of La Defense and the fact that it offers affordable rent, which, given the outlook on the macro, could be attractive for some tenants in our view. As for asset disposal, well, no major announcement to be made since February. But once again we stick to our strategy, focusing on the one end on disposal of non-strategic assets and also some mature assets when we are able to find some liquidity, such as what we've done last year [Technical Difficulty] And that's exactly what we intend to do this year. So maybe more to come for the half year results. But we see that there are still some money when the assets are mature on strong fundamental markets. And as for Icade Promotion, as I said, sharing the results on Q1, indeed, there was some good news, positive figures, especially on the individual. On the value in Q1, as I said, the main reason comes from the fact that there is a mix. And especially this was driven by some sales made on our Neuilly development, which is the refurbishment of a former hotel asset into some more premium housing lots, which are doing quite well, actually. So this is one of the reasons expecting the difference between value and volume evolution regarding individuals.

Okay. Thank you. Very clear.

Okay. Thanks, Stephane.

[Operator Instructions] The next question comes from the line of Sam King from BNP Paribas. Please go ahead.

Yes, hi. Morning guys. Just one question please on the Paris occupational market, you mentioned that it's been a slow start to Q1 with take-up down 6% year-on-year. But also one of your peers reported this morning that La Defense take-up is up 15% year-on-year. So would just be interested what you're seeing on a regional specific basis within Greater Paris as it seems like there's quite a wide divergence of performance. Thanks.

Yes. Thank you, Sam, for your question. Well, exactly, that's what we saw. There was a slight decrease minus 6% indeed in the take-up of the office space in the Paris region. And this was quite heterogeneous performance by zone. And indeed the Western Crescent, including La Defense has done quite well with plus 16% at roughly 130,000 square meters. It was driven by mostly the first ring. This is exactly what we see in the discussion we have with some prospects where you are able to offer, I mean, the well-positioned asset with the good criterias and when you are located on the major transport hub where you are able to re-let. So that's exactly what we see on a daily basis through the discussion the operational teams have with some existing tenants on site and new potential tenants with whom we are discussing. And that supported, as you saw, the strong figures on our operational performance this quarter because signing 50,000 square meter for first quarter of the year is definitely a very good performance.

Sure. That's helpful. Thank you.

Thanks, Sam.

The next question comes from the line of Eleanor Frew from Barclays. Please go ahead.

Hi, team. Thank you for the presentation. Just one from me. On the to-be repositioned offices, I think you flagged you expect to lose rent there this year. But maybe how does that 50% occupancy compare to your expectations? And where do you expect your occupancy in that segment to end up at the end of the year?

Okay. Hello, Eleanor, thanks for your question. Yes, indeed it's in line with our expectation as we are -- we've shared transparently with you. We expect most of the to-be-repositioned assets to be vacated and emptied out at one point. That's exactly what we see. Even if from time to time we are able to secure some pragmatic discussion with some tenants such as SNCF on Le Millenaire with 15,000 square meters that what we shared on the full year results. But nevertheless, at one point, we expect those buildings to be emptied out. So clearly in a way, the occupancy rate on those assets at one point does not have a full relevancy, I would say, because at one point they'd be emptying out fully. So this is in line with what we expect. Have in mind that as shared during the full year result, there are still a bunch of to-be repositioned assets contributing to the expiry schedule for 2025, roughly EUR13 million. But that's the reason why we expect this occupancy rate to keep on lowering down while in the same time the operational teams are fully committed to re-develop those assets successfully, because for example, I've talked about the 6eme Art Lafayette redevelopment in Lyon and clearly this one supporting the good figures on housing lots in the property development division for this quarter. While those hundred housing lots redevelopment comes from a former office building to reposition. So while those buildings are emptying out, the operational team is fully committed to work on the redevelopment scenarios.

Thanks very much.

Thanks, Eleanor.

The next question comes from the line of Neeraj Kumar also from Barclays. Please go ahead.

Good morning, everyone. Just a quick one from my side. How are you thinking about the refinancing of 2025 and 2026 debt maturities? Do you think the bond market is attractive for a potential refinancing?

Hello, Neeraj, thanks for your question. Well, as for the financing, clearly the financing costs are impacted by the volatility on credit and equity markets clearly. But we had been cautious in our guidance with the target cost of funding to maintain that between 4.5% and 5%. So that we expect, we are looking at the opportunity in order to manage, as we've done in the past, closely our balance sheet and the lines that will mature in 2026 and 2027.

Got it. Thank you.

Thanks, Neeraj.

[Operator Instructions] The next question comes from the line of Florent Laroche-Joubert from ODDO BHF. Please go ahead.

Hi, Nicolas. Thanks for this presentation. I would have one question actually on the guidance. So we understand that you remain cautious at this stage for the rest of the year, your guidance can be considered as conservative. So how can we consider today's guidance as a flow? And what could drive, so based on these figures at the end of Q1, what could drive now or later in the year to an upgrade of the guidance?

Okay. Hello, Florent, thanks for your question. Well, once again, if we look back at the guidance, so 2025 guidance, so between EUR3.40 per share and EUR3.60 per share. We took indeed a cautious approach on business lines, given the current environment. As for the Investment division, we plan a decrease in rental income due to decline of positive effect of indexation and the full year effect of 2024 tenant departures, which is already, as you saw in the figures, quite crystallized in the Q1 figures. And as for the Property Development business, we expect improvements in profitability after the strong impairment losses in 2024, expecting return to break even in '25, but even if there are some positive signs, well, I mean, good news can always wait. So that's the reason why we remain cautious. There are still some uncertain political and tax environments in France and there's the global macro. And as for the healthcare activities, we try to figure out dedicated assumption of EUR0.67, you know how that this is based to be easier for you to model. And of course update this figure when and how the disposal will be made regarding the healthcare.

Okay. Thank you very much.

Thanks, Florent.

There are no further questions. So I'll hand back over to you to take questions from webcast if it's the case.

Okay.

There are no further questions coming from phone lines. So handing over back to you.

Okay, great. Thank you very much. Well, we were happy with Bruno to have you around the call today. Looking forward to seeing you soon and share, of course, the half year in July, but looking forward to seeing you before that. Have a nice day and enjoy the rest of the week. Bye-bye.

Thank you for joining today's call. You may now disconnect your lines.