Icade has a high-quality office portfolio (1), 86% of which meets customer expectations in terms of centrality, flexibility, services and amenities, and environmental performance. Icade has confidence in the long-term relevance of these well-positioned offices.
The Company also provides a wide range of services to improve how buildings are used and reduce their carbon footprint while making the needs of its customers its primary concern. Despite cyclical pressure on rent prices (difference between estimated rental values and current rents assessed at -8.7% (2)), the resilience of the well-positioned office portfolio is reflected in:
- The historically high financial occupancy rate of over 90%;
- High and rising levels of customer satisfaction, as shown by the improved Net Promoter Score (+14 points in 2023 vs. +6 points in 2022); and
- Long-term relationships forged with customers who have been tenants on average for almost 9 years.
Icade believes that only 14% of its office assets are no longer in line with current expectations and as such need to be converted. The conversion of these assets is presently under consideration, with projects identified for about half of them. Among the most advanced projects:
- The Helsinki and Iéna buildings will be converted into a hotel and an apartment hotel designed to provide the Paris Orly-Rungis business park with additional services and amenities;
- Nearly 24,000 sq.m of office space in the Inner Ring of Paris in Le Plessis-Robinson will be converted into 649 housing units by the Property Development Division.
Icade has significantly reduced its office pipeline and is highly selective when it comes to its new investments (location, target YoC (3), percentage pre-let). In H2 2023, only the flagship 29-33 Champs-Élysées project representing 12,000 sq.m of office and retail space was added to the pipeline after the building permit was obtained.
(1)Office properties were worth a total of €5.3bn on a proportionate consolidation basis, i.e. 82% of the Group’s total portfolio as of December 31, 2023
(2)As of December 31, 2023 for the well-positioned office portfolio
(3)Yield on Cost