Gecina to set up logistics, residential subsidiaries

Gecina, the largest player in France's office market, has ploughed more than EUR 1 bn into logistics and healthcare property in 2006 as part of its strategic diversification. Logistics, healthcare and hotels now represent 7% of Gecina's overall business and this is expected to grow to 16% in 2007, Gecina, a French subsidiary of Spanish property group Metrovacesa, said on Friday during the presentation of its 2006 annual results.

The company revealed is setting up special subsidiaries for its new business sectors. Sofco, the healthcare specialist, has teamed up with Generale de Sante for the purchase of 28 clinics and started a new partnership with another key player Orpea. Gecina is also in advanced negotiations to launch a logistics-focused group in a joint venture with one or two undisclosed institutional investors 'with experience in the sector'.

In the first part of 2007, Gecina is to consolidate its residential holdings - consisting mainly of 17,000 apartments in the Paris region - within a dedicated company called RESICO. The new unit will be floated on the stock market as a SIIC, the French equivalent of a real estate investment trust (REIT). Gecina said RESICO will become 'a benchmark in the residential sector in Europe and not just France, and one of the top SICC companies'. Gecina will retain more than 50% in the new residential unit.

Gecina's net profit for 2006 climbed 173% to EUR 1.78 bn, mostly due to a rise in the valuations of its buildings. At year-end, Gecina's portfolio was valued at about EUR 12 bn, which represents an increase by 26.6% year-on-year. Rental income rose 10.4% to EUR 568 mln and it is expected to come in at around 6% for 2007. Some EUR 652 mln of assets were sold off in 2006, with a 10% average margin. Gecina is proposing an increase in dividend by 7.7% year-on-year to EUR 4.20, which will be discussed at the meeting to be hold in March 29, 2007.

The firm said the dividend will be not influenced by the new SIIC 4 regime, expected to come into force in July. The influence of the new legislation both dividend and tax-wise on Gecina is still not clear, but more clarity from the tax authorities is expected in April, the company said.