(News Bulletin 247) – The real estate company expects its reference profitability indicator to settle at the upper limit of its initial forecast, after revealing its nine-month revenues. Icade says it foresees a recovery in reservations in new real estate.

In a real estate development market still reeling from an unprecedented crisis, the publications of players exposed to this sector are closely monitored. That of Nexity, for example, is on the agenda for this busy week of company publications.

And it is Icade which has the first to announce its financial performance this Monday. The group, which is both a developer and an office property owner, managed to limit the decline in its activity over the first nine months of the 2024 financial year, in a context of a degraded new property market.

Between January and September, Icade revealed consolidated revenues of 1.015 billion euros, down slightly by 0.2% year-on-year in published data.

“This development notably includes dynamic rental activity in tertiary real estate and a clear improvement in reservations for real estate development in a still uncertain context,” notes Oddo BHF.

Better oriented indicators in promotion

In detail, the gross rental income of the tertiary sector – which represents a little less than 28% of overall turnover – stood at 280 million euros at the end of September, i.e. year-on-year growth of 3.1 % in published data and 3.6% at constant scope.

Oddo BHF notes that performances are contrasted depending on the segments, with growth greater than the indexation effect in so-called “well positioned” offices (i.e. which, according to Icade, correspond to new client expectations) as well as than in business premises, at +6.3% and +6.5% respectively at constant scope while it reached -10.9% in offices called “to be repositioned”. These offices to be “repositioned” account for 4% of Icade’s office portfolio.

The property company identifies signals of recovery in residential development with a slightly increasing amount of reservations, notes Invest Securities.

Between January and September, real estate development, which represents more than 71% of Icade’s revenues, generated an economic turnover of 829.2 million euros, a decline of 1.7% over one year.

The group says it has recorded 2,818 reservations over nine months for an amount of 761.5 million euros, an increase of 9.6% in volume and 2.3% in value. “This increase is supported by block reservations with institutional investors even if these benefit from less favorable conditions than in 2023,” notes Oddo BHF. Icade explains that it had to agree to price reductions of between -10% and -15%.

“On the promotion side, the start of a drop in rates has fueled the resumption of reservations with individuals, in a context which still encourages caution and selectivity,” says Icade.

In summary, the figures published by Icade this morning do not seem, according to Invest Securities, to “conceal any major surprise at first reading”.

A CFNC expected in the upper limit

For the rest of the financial year, Icade is refining its objectives for its profitability reference indicator. The group expects to deliver a “net current cash flow” (CFNC) per share “within the upper limit of its guidance (its objective, Editor’s note)” of 3.55 euros and 3.70 euros. Which is in line with the consensus expectations cited by Oddo BHF (3.69 euros) and those of Invest Securities (3.64 euros).

This objective includes a CFNC of strategic activities at the top of a range between 2.75 euros and 2.90 euros per share. Here too, Icade’s new target is in line with the expectations of Invest Securities, which is counting on 2.84 euros per share.

Icade is also counting on a CFNC for discontinued activities of 0.80 euros per share, this product coming from the sale of 63% of its stake in Icade Santé to the property management company Primonial REIM.

However, Oddo BHF is not optimistic for the year to come. “The nine-month publication confirms that we should expect a drop in revenues in 2025 before the effect of the implementation of the growth initiatives of the multi-annual strategic plan due to lower indexation, drop in the financial occupancy rate (loss of 25 million euros in annualized revenue expected in the fourth quarter), a probable reduction in financial products due to the drop in interest rates and a 32% decline in marketing launches in residential promotion over nine months due to the current French context”, fears the design office.

This publication reflects “good elements in offices and the first signals of recovery in residential development but [le dossier souffre] of a lack of visibility in the medium term”, concludes Oddo BHF which maintains its recommendation at “neutral” and its price target of 30.5 euros.

On the Paris Stock Exchange, a certain volatility surrounds the real estate company after this publication. Icade shares are down 1.3% after gaining up to 3% in the morning.