Gecina to launch new residential unit, eyes deleveraging

French REIT Gecina has announced plans to transfer its residential property portfolio into a new unit, which will eventually be open for investment by third parties.

The move is in line with the company's strategy to manage its portfolio through dedicated business units, the company said in a statement. Gecina plans to retain a majority interest in the subsidiary.

The transaction, whose financial details have not been disclosed, is conditional upon final approval by the company and its shareholders.

Separately, the company said that its board has approved its new financial policy aimed at 'ensuring effective control over debt'. Gecina will seek to limit its loan-to-value to a maximum of 45% while trying to diversify its sources of financing, which currently consist of a majority (78%) of bank debt and 22% of bond debt.

'Gecina is now looking to reach a ratio of 40% bond debt over the medium term,' the company said.

Gecina also intends to implement a policy to actively manage hedging on its debt in order to extend their maturity. By the end of 2010, the group will have put in place EUR 1.35 bn of hedging lines with an average maturity of between four and nine years. On this basis, the average cost of debt is expected to come in at around 4.1% in 2011.