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Analysis before buying or selling Gecina shares

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If you are considering investing in the Gecina stock market, we suggest you start by reading up on the stock and the company in this comprehensive article, which contains a lot of useful information. You will learn in particular the details of the activities of this company, its partners and competitors but also its strengths and weaknesses and some data to follow closely to succeed in your fundamental analysis. This will allow you to make more accurate forecasts of the future price of this stock on the market.

Elements to consider before selling or buying Gecina shares

Analysis N°1

First of all, we know that there is a significant correlation between the share price and some general data such as interest rates, the business climate and French regulations. So we need to keep a close eye on these different elements.

Analysis N°2

You can also closely follow the group's net asset value, which is one of the most important data in the real estate sector. You can then compare this evolution with that of Gecina's share price.

Analysis N°3

Another important element to follow here is the occupancy rate of the buildings and its evolution, which is an excellent indicator of the market, as is the speed of sale of the group's housing and stocks.

Analysis N°4

The company's financial results will of course be closely monitored, taking into account the time lag of several quarters in the accounts for orders taken under the "Sale in Future State of Completion" model. The evolution of the dividend should also be followed every quarter and not annually. The evolution of net income is one of the most important data from a financial point of view.

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General presentation of Gecina

The French group Gecina is a real estate company that owns and manages a very large real estate portfolio, mainly located in the Ile-de-France region, which is estimated to be worth nearly 20 billion euros. More specifically, this company, which is listed on the Euronext Paris stock market, is a Société D'Investissement Immobilier Cotée or SIIC. In total, nearly 500 employees work for this group, which is none other than the leading office property company in France and which also has a diversification division with residential assets and student residences. Gecina is thus one of the largest real estate companies in France.

The Gecina Group's activities can be divided into several divisions according to the rental income generated by each of them and in this way:

  • Offices and shops represent more than 77.9% of the group's rental income.
  • Housing accounts for nearly 19.4% of this income.
  • Finally, residences for students and other working people represent 2.7% of rental income.

The total amount of the Gecina Group's real estate assets at the beginning of 2018 was 19.6 billion euros in market value. 80.2% of this portfolio is made up of offices and shops, 16.1% of which is residential, with the remaining 3.7% mainly made up of student residences.

Analysis before buying or selling Gecina shares
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The major competitors of Gecina

The listed real estate group Gecina operates solely in France. As such, its main competitors are of course the other listed real estate companies in France, many of which are vying for market share in this highly prized sector. It is particularly important to follow closely the evolution of these different companies which are in direct competition with the Gecina Group if you wish to set up a conclusive analysis of this share. As part of your fundamental analysis, you should therefore check the market share of each of these groups as well as their financial news and recent results, which will help you to better understand how Gecina is faring. Here, to help you see more clearly, is the list of the major players in this field in France and therefore Gecina's main adversaries.

Unibail Rodamco 

This is a European real estate player that is also one of the most powerful and therefore competes directly with Gecina on its territory with a very large office portfolio.

Klépierre 

This French real estate company was first listed in 2015 on the national CAC 40 index and has recently been controlled by a U.S. company specializing in the sector.

Icade

Thanks to its long experience in this field, the French group Icade is of course one of the leading players in this field in France with more than 1.2 million square meters in the Ile-de-France alone.

Foncière des Régions

Although this company considers itself more of a real estate company than a property company, it remains a direct competitor to Gecina.


The major partners of Gecina

The real estate company Gecina has managed to establish itself as a leader in the real estate sector thanks to a progressive strategy of acquisition and development of real estate assets, but also thanks to the regular establishment of partnerships and alliances of all kinds likely to help it gain new market shares. To better understand the interest of this type of rapprochement, here are some examples of the most recent partnerships set up by this company.

Paris & Co

First and foremost and in 2015, the Gecina Group signed an experimental partnership with the company Paris & Co, a group of start-ups. This partnership aims to provide these start-ups with business premises located in the Gamma towers on the banks of the Seine and close to the Gare de Lyon in Paris.

WiredScore

More recently, in 2018, Gecina approached the company WiredScore with the aim of maximizing the connectivity of its buildings. Indeed, the group thus aims to move ahead of the competition by highlighting this feature of its buildings and offering businesses the opportunity to boost their productivity thanks to this technology. The first objective of this partnership is to enable Gecina to learn more about the connectivity potential of its existing real estate network.

ING France

Finally, also in 2018, Gecina has set up a partnership with the ING France Group in the context of a responsible credit agreement for up to €150 million with a margin that will be based on its CSR or Corporate Social Responsibility performance. This is the first responsible financing of this kind in the real estate sector.

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Positive factors for Gecina shares
The factors in favour of a rise in the Gecina share price:
  • First of all, it should be remembered that the Gecina group has a real advantage in terms of its positioning in its main sector of activity. Indeed, it is currently the leading French real estate company for offices. This objective has been achieved by strategically concentrating its real estate assets in Paris and its inner suburbs.
  • The total amount of this real estate portfolio, which reaches 10.6 billion euros for this branch alone, is also a reassuring asset for investors. Among the properties owned by the group, there are some very prestigious addresses in Paris, since almost 14% of the offices rented by this company are rented to the luxury industry, which is currently the group's second largest client after service providers.
  • Analysts also greatly appreciate the quality of the strategy implemented by Gecina, which aims to refocus activities on offices. The company thus exited the residential sector in 2016 and sold off its healthcare assets to make the proportion of the portfolio held by offices larger. As this sector is currently the most profitable, this strategy has of course paid off and has increased the group's rental income since 2016.
  • The Gecina Group also stands out from the competition thanks to its great ability to renegotiate leases and its office occupancy rates. The latter is over 95%, which is a real record in this sector.
  • Finally, and in particular thanks to strategic disposals such as the sale of healthcare assets in 2016, Gecina has managed to completely clean up its balance sheet since 2017.
Negative factors for Gecina shares
The factors in favour of a drop in the Gecina share price:
  • First of all, it should be remembered that the indexation of the rents of this group remains relatively weak with a somewhat negative reversion which can weigh on the overall profitability of the company.
  • Recently, the group also made a bid for its competitor Foncière de Paris, which unfortunately did not succeed as the deal was won by Eurosic, undermining investor sentiment.
  • Finally, we also note that Gecina's share performance is slightly below the average for the sector, with a higher valuation than its main competitors. As a result, write-downs are common whenever investors are disappointed.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What is the origin of the company Gecina?

Gecina was created in January 1959 under the name of Groupement pour le financement de la construction or GFC and by draining the funds of about sixty insurance companies in order to finance the development of residential buildings. It took the name Gecina in 1998 after the acquisition of the real estate company Foncina. The group then continued its development by acquiring several other companies in the real estate sector over the years.

How has the Gecina share performed in recent years?

It is interesting to know the evolution and performance of the Gecina Group share over the last few years in order to understand its potential in the medium or long term. The share's performance over one year was -19.01%. Over two years, this performance was -24.95% and over three years -14.18%. Finally, over a longer period of 5 years, the performance of the Gecina share is -6.13%.

What recent financial information is there about this stock?

The Gecina Group published its results for the 2019 financial year recently. It can be seen that the company has thus achieved a net income of €1,517 million over this period. Its 2019 PER stands at 18.59 with a dividend paid to shareholders of around €5.60 per share. The yield on this stock for 2019 is thus 5.95. It should also be noted that the group currently holds €12,727 million in equity.

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