Earnings call transcript: Jasima’s Q1 2025 growth driven by rental income boost

In its Q1 2025 earnings call, Jasima reported a solid increase in gross rental income, rising by 3.6% compared to the previous year. The company highlighted a strong rental uplift, particularly in Paris City and the Central Business District (CBD), which contributed to its positive financial performance. With an impressive InvestingPro Financial Health Score of 2.7 (rated as GOOD) and a 46-year track record of consistent dividend payments, Jasima’s strategic execution, including the on-time delivery of the ICON project, underscores its robust market position.

Key Takeaways

• Gross rental income increased by 3.6% in Q1 2025.
• Rental uplift was notable, with 17% growth in Paris City and 27% in Paris CBD.
• The ICON project was delivered on time and on budget.
• The company confirmed its guidance for 2025.
• Jasima is focusing on prime locations and top-quality assets.

Company Performance

Jasima showed resilience in Q1 2025, with a gross rental income increase of 3.6%. The company reported a like-for-like growth of 3.3%, driven by an indexation contribution of 4.2%. Jasima’s strategic focus on prime locations and top-quality assets, particularly in Paris, has enabled it to achieve a rental uplift of 9% overall. The company’s leasing activity was robust, with 41,000 square meters leased in the first quarter, indicating strong demand across its portfolio.

Financial Highlights

• Gross rental income: Increased by 3.6% year-over-year.
• Like-for-like growth: 3.3% in Q1 2025.
• Indexation contribution: 4.2%.
• Rental uplift: 9% overall, with 17% in Paris City and 27% in Paris CBD.

Outlook & Guidance

Jasima confirmed its guidance for 2025, anticipating indexation to stabilize around 2%. With analyst consensus recommendations leaning positive and price targets suggesting up to 40% potential upside from current levels, the company is closely monitoring market conditions for potential acquisitions, expecting a more normalized inflation environment. Jasima’s focus remains on optimizing asset allocation through strategic buying and selling. For comprehensive analysis of Jasima’s market position and future prospects, InvestingPro subscribers can access the detailed Pro Research Report, part of our coverage of 1,400+ top stocks.

Executive Commentary

Benoit Ortega, CEO of Jasima, emphasized the company’s solid start to the year, stating, "The first set of figures for the year lay a solid foundation to secure our guidance that is confirmed for 2025." He also highlighted the company’s strategic approach, saying, "We are monitoring the market on both sides, buying and selling, trying to optimize our asset allocation."

Risks and Challenges

• Competitive market for small, well-located assets could impact future acquisitions.
• Challenges in the student housing disposal project may affect financial outcomes.
• Market uncertainty, particularly in leasing activities in specific locations like Boulogne.
• Potential fluctuations in the construction cost index, despite a recent decrease of 2.5%.
• Broader macroeconomic pressures, including inflation and interest rate changes.

Q&A

During the Q&A session, analysts raised concerns about leasing activities in the Boulogne location, to which the company provided assurances of ongoing efforts to address these challenges. Questions also focused on the investment market’s appetite, with Jasima explaining its strategic approach to indexation and interest rate expectations. The company offered insights into potential asset disposals as part of its asset optimization strategy.

Full transcript - Gecina SA (GFC) Q1 2025:

Laura, Call Coordinator: Hello, and welcome to the Jasima Q1 twenty twenty five Business Activity. My name is Laura, and I will be your coordinator for today’s event. Please note, this call is being recorded. And for the duration of the call, your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call.

This can be done by pressing star one on your telephone keypad Today, we have Penelopega, CEO and Nicolas Duttrell, Deputy CEO in charge of Finance as our presenters. I will now hand you over to your host, Beniot Ortega, to begin today’s conference. Thank you.

Benoit Ortega, CEO, Jasima: Hi, everyone. Thank you all for being here. Very happy to have the opportunity to present the business for Q1 twenty twenty five and answer the questions you may have. During the first quarter, our gross rental income was up by 3.6 on a current basis, mainly driven by the like for like, I’ll get back to it in a minute, and the contribution of the newly delivered assets that offset the impact of assets transferred to the pipeline, Mirabeau, Arjugao and the disposal of mature assets on the residential side. The like for like growth of 3.3%, fueled by the continued effect of indexation, plus 4.2%, and the contribution of reversion capital on new leases, particularly on central locations, including the impact of service and operated real estate offering across both asset classes.

The solid leasing activity achieved across all geographies once again highlights the dual polarization trends that favor both top quality assets and prime locations. In three months, it’s been 41,000 square meters or renewed 33 deals, almost EUR 19,000,000 of annualized headline rents. Last year, overall, we let 83,000 square meters, so we’ve already done on three months the equivalent half of the annual performance of twenty twenty four. The overall rental uplift is plus 9% with 17% in Paris City and 27% in Paris CBD, highlighting the continued reinforcement of polarization. And we also see acceleration of the leasing on the residential side as well, with more leases signed on average in January, February and March than the monthly average last year.

Occupancy is expected to improve gradually over the coming quarters. On the pipeline, ICON was delivered in Q1 twenty twenty five on time and on budget to be made available to the client over the coming weeks. The student housing disposal project is on track and expected to close in H1 twenty twenty five as scheduled. The first set of figures for the year laid a solid foundation to secure our guidance that is confirmed for 2025. We look forward to the upcoming quarters with confidence as this Q1 demonstrates the robustness of our business model.

Thank you for your attention, Ana, and we will be very happy to answer your questions now.

Laura, Call Coordinator: Thank you. We’ll now take our first question from Florent Laroche Gebet of ODDO BHF. Line is open. Please go ahead.

Florent Laroche Gebet, Analyst, ODDO BHF: Benazos. Thanks for this introduction. I would have questions. My first question would be to know if you could give more colors on the visibility that you can have today to increase your occupancy in Boulay and maybe in other areas that cannot be considered as first central areas? And my second question, so would be on the investment side.

So maybe the global environment has maybe a little bit changed since the beginning of the year. So what how do you see today the investment appetite on your different markets? And in this context, how do you feel comfortable maybe to do some acquisition maybe in Central IWAS? Thank you.

Benoit Ortega, CEO, Jasima: Thank you for both of your questions. Listen, as we’ve been quite clear about the leasing to be done in Boulogne, we are progressing well. In fact, when you look at since half last year, H2, we have signed several leases in Aurizon with excellent companies, companies especially. We already signed a new lease on sources above 5,000 square meter with another great company, FMCG company. So it’s progressing well.

Obviously, it’s less easy than Paris CBD, but it’s progressing according to plan, let’s say. Regarding the investment market, we still see quite a decent appetite even in the last weeks on central locations. So the market is, I would say, a bit more fluid than in the last year, still competitive on small assets, well located, well designed, maybe a bit less liquid on outside Paris, obviously, and larger scheme. So we are monitoring the market on both sides, buying and selling, trying to optimize our asset allocation. Nothing more to comment at this stage.

Laura, Call Coordinator: Thank you. We will now take our next question from Stephanie Duffman of Jefferies. Your line is open. Please go ahead.

Stephanie Duffman, Analyst, Jefferies: Hello, Benyat. Hello, Nicolas. Thank you for the presentation. I would have a couple of questions then. I saw that your like for like rental growth in other location was down 25%, if I’m correct.

So I was wondering what kind of reversion do you have on Peri des France renewals relating rejecting? You talked about Cologne. So what kind of negative reversion, I suspect? And the second one would be on acquisitions. So I was wondering if you could talk about Solstice building, if you can confirm ongoing discussions or not and the cost CapEx needed to refurbish it?

And maybe the last one, the last construction cost index was down 2.5%. GDP will be slowing. So what kind of indexation are you forecasting going forward? Thank you.

Benoit Ortega, CEO, Jasima: Yes, you’re welcome. Regarding other locations, obviously, it’s a small portion of what we own, but still, we face some departures of tenants. We have typically, I have in mind one in Mont Rouge, where Orange left our assets, and we have already re let it. So it’s a good news from the first quarter. We have some also departure in Pluto in one of our assets, Phil, the former Francois Savoy left release, sorry, the new name, and we have released already half of the building.

So yes, we are suffering some departures. We are active on the releasing. And as you speak, it has a negative impact on our cash flow. But again, it’s a small portion of what we own. Regarding acquisition, never like to comment on acquisition before they occur.

So I will not comment on that potentially. But as I said, we are monitoring the market both to sell and to buy, like usual. Remember, we’ve been selling EUR 8,000,000,000 of assets, investing similar amounts in the last ten, fifteen years. So we are active on both sides. That’s the rationale of our company, but nothing specific to comment on one specific asset.

And the third is, you’ve been following precisely the statistics of the indexes. So yes, the indexation is decreasing month after month. So we think it should land progressively around 2%. That’s a bit what we have in mind, potentially a bit lower. We will monitor it along the month phase in 2025.

It has a limited impact on ’twenty five, obviously, because as you remember, the impact on inflation go through our P and L in the cash flow twelve, eighteen months after it occurs. So that’s why we are pretty confident on and that’s the beauty of our business model. We have quite an excellent visibility on cash flows even on indexation. But yes, it will go down progressively. But that goes also along with the interest rates that have also an impact on long term cash flows.

Obviously, there is less inflation. Interest rates should be lower than the peak of the last year. So I think all in all, we will monitor the situation, but we are entering into a more normalized inflation area probably.

Stephanie Duffman, Analyst, Jefferies: Thank you very much.

Benoit Ortega, CEO, Jasima: You’re welcome.

Laura, Call Coordinator: Thank you. We will now move on to our next question from Christian Azenio of AlphaValue.

Christian Azenio, Analyst, AlphaValue: Two questions, if I may. The first is about disposals. Do you intend or still sold around €700,000,000 of residential? Two sub questions about this. You have something like a target of 1,000,000,000, 1 billion and a half.

Why? I don’t know what in ’25 or around ’26? That’s the first sub question. And the second sub question is the target of leverage, net debt to EBITDA, which will will you you could find yourself comfortable. And the second question is about rising concerns in Paris CBD.

As far as we are concerned, we are trying to analyze the changes the the underlying changes there, and we detect some a couple of negative things on top of increasing vacancy. That’s why it’s highlighted by it was starting q one twenty five. What is your own feeling about this? Nothing critical in my question, but do you find something resembling to another crisis? Because just like I said, now close to 500,000 square meters there?

Thank

Benoit Ortega, CEO, Jasima: you for your question, Christian. Regarding disposal, no specific targets for the year. We try to manage our balance sheet on the safe side. We have no specific on top of the development pipeline that we’ve been talking about, no specific issues regarding that. So we will monitor mean monitor it.

Really, disposal sheets, we try to look at it as an opportunistic buyer and seller, like I said earlier. So obviously, if we see a good traction on some asset classes or some assets, we will execute, but no specific target on it. So net debt to EBITDA, obviously, it’s a company we look at it. The rating agencies look more at LTV because thanks to the high liquidity of what we own, as you see now, proving both NAV, but specifically the V of the NAV and the V of the LTV. And have in mind that, again, it’s a fourth year in a row that we grow EBITDA and we decrease the net debt.

We’ll continue to do like we have done in the past. Regarding Paris CBD, you were asking about our own ceiling. Obviously, the macroeconomics and the geopolitical tensions are not helping the leasing activity, but we are still facing a situation where there is a very low vacancy. Even if the vacancy have grown, we are still below historical average. And with like you saw during Q1 in our results, still significant conversion, still significant appetite.

And as you may have seen during this quarter, occupancy in our portfolio grew in Paris, So we still see a good leading tension based on that low vacancy rate in the CBD. Thank you. You’re welcome.

Laura, Call Coordinator: Thank you. There are no further questions coming through. I will now hand it back to Daniel Ortega for closing remarks. Thank you.

Benoit Ortega, CEO, Jasima: Thank you for your attendance today, for your questions. Obviously, we are fully ready to answer any other questions you might have in the next week. So have a nice day, and see you soon. Bye bye.

Laura, Call Coordinator: Thank you. This concludes today’s call. Thank you for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.