Gecina S.A.

Thank you very much. Good morning, ladies and gentlemen, those who take the time to come here in our main auditorium to listen to our presentation of our full year results for 2021.

And those who are online, wherever you are in the world, I wish you a healthy 2022. And I hope that everything is fine with everybody.

And of course, after this presentation, we'll be very pleased with my colleague, Nicolas Dutreuil, Deputy CFO in charge of finance of the company and Samuel Henry-Diesbach, everybody knows very well to answer to your questions. I would like to, after a very short introduction to talk to you about the key trends we are observing in our market as we consider that we are now reaching the right place at the right time and take a few minutes to share with you our targets and goals for the future especially on ESG questions because I think that these questions which have been part of our DNA for the last period of time are becoming more and more specific and especially regarding climate change issues.

If we move forward, what we are observing, although uncertainties didn't disappear yet. We now have a better view what had actually changed these last past years and maybe it would be more accurate to say that we have seen the acceleration of the pre-existing trends we have talked about that we have mentioned in the past and a real complete and transformational changes.

In other words, this crisis, this COVID crisis confirmed and accelerated fundamental trends that appears prior to the crisis. The obvious conclusion we came at by seeing this is that office matters, not only discussion with our tenants, but also our operational achievements in terms of leasing in 2021 and since the beginning of this year, show that centrality, sustainability, efficiency, digitization and well-being are much more impactful on our business than working from home.

We thus show 3 fundamental trends being reinforced these past 2 years amongst tenants requirements, which are accessibility and centrality in mixed-use areas around hubs of public transportation. The second one is flexibility and agility.

Real Estate as a service plus as a consequence of digitization and sustainability and well living together. If we move forward, we can see that the Gecina's offer in terms of assets is increasingly aligned with emerging trends on tenants' requirements.

Regarding accessibility and centrality, our portfolio's exposure to central areas have largely increased during these past years along disposals, acquisitions and redevelopment projects. Gecina's office portfolio is today, 68% located inside Paris City, while it was 56%, only 58%, maybe end up 2016.

And regarding flexibility and agility, so considering real estate as a service, Gecina deployed its client-centric approach with its brand YouFirst since 2018. The group also deployed digitalized tools, broker portal, web app, CRM, et cetera, aiming to optimize operational and financial performance.

Last, but not least, we have deployed on sustainability and well living, a systematic approach -- a systemic approach on each field of our businesses. 26 Best-in-class assets have been delivered since 2018, 30 more malls are yet to come by 2026.

All these projects are fully certified. We are targeting ambitious road map defining a net zero carbon trajectory by 2030, CAN0P-2030, everybody knows about including milestones at 2025 on CO2 emission, circular economy, well living and biodiversity.

2021 has been marked by an accelerated polarization in favor of Gecina's preferred locations. The first evidence of polarization when looking at the recovery in the take-up, plus 32%, largely driven by the most central locations, plus 58% in Paris CBD.

But also in terms of market rents changes, plus 11% since end of 2019 in the CBD by flattening in the suburbs. This is fair to underline the fact that vacancy rates already started to decline the heart of Paris by 140 bps in the last 6 months in the CBD, once again showing the outperformance of central locations.

2021 is also marked by a record years for Gecina in terms of leasing activity already above 2019 with 180,000 square meters of leasing achieved in 2021. Gecina reached a volume of transaction already plus 9% above the pre-COVID 2019 year, which was a tremendous and outstanding year.

This is an evidence of the ongoing normalization of our markets, especially in the most central areas. This solid trend on the commercialization side is still ongoing yield today with already more than 18,000 square meters already signed as of today.

This is 3x more than on the same period in the early 2021. Amongst the key transactions, please note the pre-leasing of around 80% of VOC secured this week, a pure prime level of rents, pure prime level of rent underlying the appetite from tenants for prime assets in prime locations.

2021 has also been marked by the outperformance of central locations. And evidence regarding takeup, ERVs, immediate supply, vacancy reduction on every single market indicators, centrality outperformed.

Interestingly, the record high leasing volumes achieved by Gecina in 2021 has been achieved with higher rents with reversion achieved of plus 5% in average and longer-term duration of lease close to 9 years, Whilst incentives have remained in average stable this year. 2021 has been marked by the embedded growth potential on residential business, now secured, thanks to the acquisition of 7 new residential projects to be delivered by 2025.

Considering the benefits of these new projects secured in 2021, 700 units, plus already existing one, 300 units, plus a potential uplift on our own portfolio plus the normalization expected of vacancy rate on resi, we can expect the potential rental growth to be seen ahead of plus 30% to 40% depending on assumptions on indexation side that would be taken during this period. 2021 has also been marked by the normalization trends for student housing, with spot occupancy back almost in line with pre-COVID-19 levels and the progressive but significant return of foreign students.

These solid operational performances drive upwards our confidence for the years ahead. After the first signs of market recovery since 2020, our business in '21 have shown evidence of normalization that should positively impact 2022 and 2023.

2021 earnings publication still partly muted by relative weakness from 2020 leasing and a low indexation contribution as a consequence of poor inflation and GDP in 2020, showing a lag effect between underlying property markets, trends and consequences into our P&L. Acceleration of inflation and GDP seen in 2021 will thus contribute to Gecina RNR growth progressively along '22 and '23.

The combination of indexation recovery, reversionary potential materialization, ongoing normalization of vacancy rates and the positive contribution from the pipeline drives nicely our expectations for recurring net results growth for '22 and '23. We thus expect the 2022 RNR to be up by 3% around EUR 5.5 a share, an equivalent of 5% restated from 2021 disposals effect and our confidence for 2023 is increasing.

Now going to the transformation, which has been led during this last period of time and the results here harnessing. It is worth taking a few minutes to give you some colors about our commitments and targets on ESG matters.

As detailed in this slide, real estate is a key part of the solution or maybe the problems if they does not address properly to address environmental challenges, 40% of energy consumption, 25% of CO2 emissions are for instance linked to real estate industry. Note as well that we are spending 80% of our lifetimes indoors.

It is fair to say that our industry is having the tools in hand to make some of the things better. Our stakeholders are having increasingly demanding expectations.

That's true for our tenants, but also for our investors, for the local regulations and providing answers to these expectations is a way to capture value creation opportunities for the future. These expectations generate indeed opportunities for players like Gecina, which are able to offer relevant solutions.

Your strong believers that sustainability will provide financial and operating outperformance for the best-in-class players over the coming years. Our commitment goes now along with ambitious targets, including a net zero carbon emission by 2030, CAN0P-2030 plan, which we launched last year.

I won't go too much in details on all these targets, trajectories and milestones. But you should keep in mind that we have defined milestones on the road towards this strategy with strong ambitions for 2025 already.

Obviously, we have defined targets on CO2 emission, but also on circular economy, well living, biodiversity, which are the 4 key pillars of our ESG strategy. Going along with these targets, we also want to systematize the labelization of all our assets targeting high score HQE and/or BREAM for the whole portfolio.

A quick focus on our net zero carbon plan for 2030 so-called CAN0P-2030. Here is the trajectory we expect to follow for the years ahead.

Our performance will rely on the optimization of our energy mix towards renewable energy, our tenants behaviors this requires to closely collaborate with them as partners willing to share ambitions. We have already defined 79 key tenants as priority targets, like I must say, connecting with them, they are all willing to collaborate to improve their own ESG targets.

Then it's about investing in our assets to lower energy consumption is also 1 of the drivers, but not only the only one. Some works to be, for instance, cover thermal insulation, relamping, connection to urban heating system, on-site renewable energy production, photovoltaic, geothermy et cetera, greening roofs, terraces and gardens, heat recovery systems, et cetera.

I would like to note that the first approach we have on almost EUR 2 billion portfolio suggest that additional cost could be around or even below 0.2% of NTA per year from 2022 to 2030, a moderate investment volume when considering sustainable assets outperformed both in terms of capital value and rental value. Gecina thanks to the hard work of the team for decades and in the last 5 years, of course is ahead of its sector on ESG topics.

In terms of carbon, Gecina lowered its emission at a pace which is 3x quicker than its sector benchmark these past years, in terms of certification as well. Gecina's portfolio is also 3x more certified than market average.

These are again 2 more evidences of Gecina's leadership on that matters. Interesting to illustrate how we do so by taking our own headquarters as an example.

No need to go too much in details on this slide, but you'll find here the key achievements on our own headquarters bringing to lower these past 5 years by 74% the carbon emission of the headquarters. An example showing that ambitious goals can be reached on occupied site as well.

Another pillars that CO2 as well, circular economy, biodiversity, well living. The fine [indiscernible] illustration of how we can expect the operation of the building, how -- can expect the operation of a building, which can contribute to our goals.

We could have decided to show you here an example of achievement on an asset under development on restructuring today. Live or Mondo assets for instance, in Paris CBD, but we thought that it's more relevant to show you that transformation -- transforming an asset in operation is also obviously real estate and feasible and it gives us hope and energy for the future.

Probably all these extra financial ratings by heart, and agencies, which are rating our ESG performance. Fair to say that these ratings largely recognize Gecina's leadership on ESG topics and I would like to thank the whole teams and their contribution and global and a collaborative contribution on these matters.

As a conclusion, one can say that our commitments meet more and more expectations from our tenants and we now start to consider our ESG action is contributing to Gecina's operating performance. I now will hand the floor to Samuel, which will give you some views on Gecina's operational performance achieved in 2021, before Nicolas will come back on financial achievements and perspective.

Thank you.

Thank you, Méka. Good morning to all of you.

I would like to share with you some few things now about the operational performance and the market key trends that we have in this past months and in 2021. You remember that office market in 2020 have proven a kind of resilience in the context of COVID-19.

It has been relatively muted in terms of take-up mostly. And since Q2 2021, office markets have recovered significantly in central locations mostly that were most of the portfolio we do have is located.

Such market, you will see are supportive to our business model and the strategy that we have implemented, which is feeding clearly our confidence for the coming years. If we have a look on the rental market, here, we see a clear polarization of the market in favor of the more central areas.

That's when you look at the take-up changes, if year-on-year that's plus 32% but that's largely driven by the most central location since CBD is plus 60% in the same period of time almost. That's also an evidence when you look at immediate supply.

Immediate supply is globally plus 1% for the whole Paris Region, but that's minus 17%, 17% for Paris City. We see the same thing looking at these changes with Parity City largely outperforming.

And of course, on the vacancy, just keep in mind that Paris CBD is the place where the vacancy is back significantly below minus 140 basis points in 6 months. And that's already below significantly 4%.

So we are back into a market of scarcity and shortfall of available products on the office market. The consequence of that is that the reversionary potential that we have kept along 2021 has been positive and especially driven by the more central areas, that's plus 13% in Paris City and that's plus 6% in total.

But the potential to be captured along the coming years along the tenant rotation is still extremely attractive and should feed our expectation and our forecast for like-for-like growth ahead. Once again, thanks to the more central area you see that plus 16% uplift potential that we can expect in CBD plus 12% in the rest of Paris City.

Some few things and some few achievements from Gecina side on the market. 2021 was a record year clearly for transaction, beating even 2019 so before COVID-19 by plus 9%.

And in detail, we have achieved a significant rental uplift on this sign in 2021, mostly in the CBD. We have increased lease firm maturity in some secondary locations and we have significantly increased the lettings of assets, which are under development or recently delivered.

As a consequence, we can say that average firm maturity and lease signed in 2021 has increased slightly and is now close to 9 years. Incentives roughly have been stable.

Average uplift captured is around plus 6% as I was telling you, and a percentage of asset pre-let on the pipeline has improved by 36 points in 1 year if we compare some stores, so the pipeline as it was published by the end of 2020. So such supportive market trends and proportional achievements are positively driving our expectation for 2022 and 2023 especially in terms of vacancy rate that we do expect to normalize progressively along the coming half year.

Now having some few words about the investment market. I think it's fair to -- it's interesting to have a look on the risk premium, which remains today extremely attractive especially if you compare it to a kind of long-term average that we have seen in the market, you've seen 2 figures, you can see 2 figures on the bottom chart here.

The one is the average risk premium over 30 past years and the other one is what we can calculate is stopping the historical period and they [indiscernible] started on the market. I think it's fair to have these 2 figures to have an idea where the risk premium could potentially be and where the risk premium is today and how attractive it is still for investors.

Some evidence here again in the investment market of polarization of the market in favor of the more central areas. That's clearly an evidence when you look at the historical chart showing the outperformance.

That's not something that started recently. That's not something which is ending today, central location or clearly outperforming.

And central location or actually extremely attractive for investors in the market today as it provides some visibility, thanks to the constrained supply in the most central locations, the sustainable appetite from tenants the inflation hedge, which works pretty well in central locations and the appealing office location for employees, users globally. That's something that we do see through the valuation of our portfolio with the more central locations largely outperforming the suburbs, for instance.

On the market, plenty of evidence of transaction, probably you've seen that already, but you see that there is a potential room for further increase of the fair value of our assets considering some of the transactions, which have occurred recently and that we have seen recently in the market. Use that maybe, but to say because maybe you know that already, but the implicit value of our portfolio is largely discounted at current stock price in disconnection with the natural trend we're seeing in physical market.

The supportive investment market, allow Gecina to achieve almost EUR 0.5 billion of disposals in 2021, capturing plus 9% premium above last appraisal value. A few words now about residential portfolio.

I think that's 1 of the key thing about this publication. We have secured a significant potential for cash flow growth in the coming years.

As you can see, we believe that over the midterm a potential increase in rental income is embedded and could represent up to 30% to 40%. It comes from not only the current perimeter of our residential portfolio, so the 1 in operation today, but also the external growth, which have been secured in terms of project under development, which have been achieved quite along 2021 mostly.

Focusing on the current perimeter, there is a potential reversionary that we can expect to capture along coming years, along tenant rotation, that should be grabbed, thanks to kind of volume of investment that could be between EUR 200 million, EUR 250 million, along tenant rotation. So to increase the quality of our portfolio through the renovation of common parts and private parts through biodiversity and revegetation, YouFirst standards, the implement innovative approach and the environmental efficiency that will contribute to our capacity to capture this reversionary potential and to normalize the occupancy rates, we believe that's 1.5% potentially better off that we can expect ahead.

On the external growth and development, the total pipeline that we have on the residential side is around EUR 700 million and it has been grown this year, thanks to 7 new projects, which have been secured in 2021, it's a total amount of 700 new projects in total in the pipeline that's around 1,000 new units, sorry, which have been secured and to be delivered in the coming years. The committed pipeline has more than doubled on the residential side in 1 year.

And as of today, if you take the committed pipeline and the one to be committed in the coming quarters, that's a potential increase of around EUR 25 million of funds that we can expect to be captured in the coming years and the potential value creation that could represent between 25% and 35% of the total investment cost. On the student housing, I think it's interesting to look at the spot occupancy rates that clearly shows the normalization that we are seeing in that segment after a tough period of time when the university and schools were closed.

We are now back to 93% in terms of occupancy rate. That's kind of in line with the pre-COVID-19 level.

That's something which is extremely positive, especially because foreign students are currently coming back and we can expect these figures to be even better ahead. The consequence in terms of figures, key figures that we can share with you is that residential portfolio and total outperformance that's plus 3.5% in terms of like-for-like valuation change in 2021.

That's an uplift materialized on the traditional residential portfolio, which is almost 6% and occupancy, which is today closing 97%, showing not only the resilience but the performance of our portfolio. And I hand the floor to Nicolas Dutreuil for giving you some colors about the pipeline and the financial perspective.

Thank you, Samuel. Good morning, everyone.

I will not come back of course on the deliveries we've made during these last years. But more interesting is to focus on what's ahead and what's interesting is that we have 16 deliveries to come in the next 3 years.

And of course, as you know, these deliveries will be as a driver of the growth of our FFO in the coming years. It's even truer when you look at the pre-leasing level considering that on the offices for the deliveries in the next 2 years, we are not pre-let more than 66%.

And we have, of course, ongoing discussions on the remaining assets. That's important because as I say that what's going to drive or partly 1 of the element which is going to drive the growth of FFO in the coming years.

When you look at the contribution of the pipeline to our rent and that's the right part of this chart, you can see that what we are expecting for the deliveries in the next 2 years more than EUR 30 million of headline rents. And as I say, a large part of that will -- is already pre-let and the rents that we are going to lose due to assets, which are going to be transferred to the pipeline or on a full year basis, much lower.

It's only EUR 13 million, knowing that a part of this transfer for 2022 will be of course spread all over the year, meaning that it's a full year basis number, but the impact for 2022 will be much smaller. And what's interesting in fact is that of course and that's something that we have already said, the contribution -- the net contribution of the pipeline in the coming years for the rent will be clearly positive.

That's true on the short term, but that's also the case of course in the longer term, you have on this page 37, the detail of the contribution of the pipeline, the net contribution of the pipeline in the coming years. You know that EUR 120 million to EUR 130 million of additional rents we will get from our pipeline, which is quite a huge number compared to the rents globally speaking at Gecina.

And you have the breakdown part, of course, is coming from the committed pipeline. And as these assets are already under redevelopment, no rent lost in front of that, that's the impact that we had in 2020 and 2021.

Of course, a part of these rents will come also from the control and certain pipeline, meaning assets which are not yet under refurbishment and to come under refurbishment in the coming years. It's a potential rent of headline rents of EUR 83 million.

And today, these assets are generating less than EUR 30 million of rent. So here again, a positive impact.

And of course, we still have a couple of assets or spaces to lease -- to let on what we have delivered this year. Even part of them are already let, but tenants will arrive during 2022, and that's representing EUR 11 million of funds.

So globally speaking, as I say, it's positive impact over the next year of EUR 120 million to EUR 130 million. The pipeline is also contributing to NAV growth.

You know that our yield on cost for projects is around 5%. If you compare this 5% to the market yield today clearly we have value to extract from this development pipeline.

When you look at statistically what we've done in the past and when you compare a yield on cost to prime yield, it's depending on the operation, depending on the rents we will achieve on operation, but between 30% to 60% value creation. What we used to say on our office portfolio is that for EUR 1, we are investing in the pipeline, we are generating usually EUR 2 of value creation.

So it's plus EUR 1. And we have, of course, a part of this value creation, which is already booked in our accounts.

It's around EUR 300 million, but we still have, of course, a lot of value -- additional value to extract from this pipeline. If you move now to the financial performance in 2021.

Of course, these numbers are the illustration of all what we have said during this presentation. We have a like-for-like growth of rent, which is slightly negative.

That's of course, the results of first very low indexation we had during the last month. And the decrease in occupancy rate, which can both explained by the COVID crisis because of indexation of course, but also because as Samuel say, the 2020 remote year in terms of leasing, which has impacted our pre-leasing process and some of the leasing we had on commercial properties spaces and which is impacting the occupancy rate.

I will come back on that in 1 second. Globally speaking, of course, our rents are decreasing.

It was expected that the result of first the disposal we've made and of course, the assets which have been transferred to the pipeline. We have more or less the same decrease in the FFO per share.

Here again, we are in line with what which was expected. We are even a little bit above because you remember of EUR 5.3 per share target beginning of the year was excluding any disposals, additional disposals.

And as you know, we have sold for more than EUR 500 million of assets during this year, meaning that, clearly, we have been able to compensate, thanks to the operational performance of the leasing teams during the year and all the works which have been done on the liability side of our balance sheet to compensate the impact of the disposals. LTV is down below 35%, excluding duties, and I will come back to the NTA NAV in 1 second.

So if we look at the bridge of our FFO per share, how we've moved to the 572 we had last year to 532 we have this year, as I'd say, very low like-for-like. Usually, on a, I would say, a normal year where with a like-for-like between EUR 10 million to EUR 15 million.

So you can see here the impact of the crisis on our account. And of course, the impact of the portfolio rotation, the disposals partly coming from the disposals of 2021, but also the full year impact of the disposals of 2020.

Pipeline, as we said, is almost for the last year,having a negative impact contribution to our FFO per share. What's also important is that in the losses front we had this year, we had also assets which were under renovation.

So of course, that's more or less like the pipeline. The only difference is that the works will be shorter in terms of duration, meaning that building that will be back on the market even already this year and so it should contribute positively to our rents even in 2022.

And you can see also the impact of the optimization of the financial structure and management cost, which has also contributed to this FFO. Regarding the rent, as I say, we are at minus 0.4% this year in terms of like-for-like.

More important, I think it's to look what's going to happen next year. And what's very interesting is that I would say that all the stars are aligned, meaning that the 3 driver of the like-for-like growth will be a positive contributor for Gecina next year.

We have already talked about indexation. When you look at the last publication, it was for Q3 2021 , a plus 3% index for ILAT.

So we will benefit from this indexation in our P&L in 2022. Of course, we will continue to extract rents from our revisionary potential.

As we say, we are plus 6% globally speaking, but much better in central location, plus 16% for Paris CBD. And of course, vacancy should come back at more normal level, if you already take into consideration all what has been already let or pre-let by the team it's already 170 bps additional occupancy rate that we will benefit during the year.

And of course, our teams continue to work on a letting activity. Regarding NTA, as I say, we are at EUR 176.3 per share, plus 4%, mainly driven by the like-for-like growth valuation.

We'll come back to that in 1 second, EUR 4 per share, sorry, coming from the office portfolio, EUR 1 per share coming from the res portfolio. But more interesting is that we have more than EUR 2 per share, which is coming both from capital gains on disposals and value creation on the pipeline.

So clearly, this pipeline is contributing, as I said, also to value creation and to our NAV growth. In terms of valuation, as Samuel said, of course, we are very conservative approach on our portfolio with a net cap rate of 4% globally speaking on the office portfolio.

And as you can say and see, sorry, in the table and we have even helped you to see it even better with this red and green color that the differentiation between location where central location values are going up and in secondary areas, it's much more challenging. If we move now to the liability side of the balance sheet.

It has been a very active year with more than EUR 1.6 billion of loans, which has been renegotiated or renewed, helping us to continue to decrease the maturity -- increase the maturity of our debt and decrease the cost of the debt. What's also very interesting is now we are not signing any more one single line, which is not a sustainable one in terms of [indiscernible].

So we've reached today a percentage of more than 80% of green loans, where we were at 30% last year. So thank you to all our banks to helping us to go in this right direction.

And as you remember, we've done the same of bond structure which is now 100% green and which is one of the main achievements we had this year. Thanks to all of this and thanks to the new issuance we've made during the year, we've been able to decrease by 10 bps of cost of debt.

What's interesting also, I would say is that for us, of course, decreasing the cost of debt is very important because it's a driver of the FFO growth, but it's also to increase the quality of the debt, both in terms of, of course, greening it. In terms of maturity, but also in securing the cost of the debt.

As you can see, we have always kept at a fixed rate, most of the issuance we've done in the past, bond insurance, benefiting from a natural hedging for our debt. Meaning that we have increased in average the hedging of our portfolio by 10 bps over the 2 last years.

And today, our debt is hedged by more than 70% for the next 7 years, meaning that clearly we are also in a situation to face an increase in interest rates in terms of cost of debt. And to conclude 1 word on our guidance, I would say we are targeting for 2022 an FFO per share of EUR 5.5 per share.

That's the result of all what we said in terms of pipeline contribution in supportive underlying market and of course, in terms of like-for-like, it's an increase of more than 3% compared to EUR 5.32 per share we've just disclosed today or yesterday night. And if we adjust this number from the impact of the disposal, I would say, like-for-like growth of more than 5% for 2022.

Thank you for your attention and we are now ready to answer to your questions.

Thank you. Thank you, Nicolas.

So thank you very much for this presentation. Florent Laroche-Joubert from ODDO BHF.

I would have 2 questions, if I may. So first question is on capital allocation.

So we can see that you have a quite low rationale since you have been able to dispose successfully nonstrategic assets. So how do you think that you will reinvest this capital and what will be the timing for this investment?

And my second question is more on your operational performance. So you have told us that you have a strong embedded growth in your portfolio.

But when do you think that you will be able to recover a net recurring result per share that will be at least at the same level than in 2019, for example?

Yes. Thank you very much.

I will, of course, let my colleagues to answer more in detail 2 very interesting question. Just in terms of capital allocation, I think that the -- and this is the way we have done the work during the last couple of years.

The question is have the capacity to face all kind of situations and to seize opportunities. And I think that the opportunities might be ahead of us.

But at the same time, we invested heavily in our own assets to make them much more sustainable and attractive and digitized and bring in services in order to capture good clients and good tenants. And this is the result you are seeing on a day-to-day basis.

And also, we are doing that with the multi-res portfolio, which is also going to get to the same point at some level. So I think that -- and maybe in the coming periods, by money becoming more rare for a couple of investors, we're going to see more opportunities.

And if we can help, we're going to be around. I'm sure that my colleagues and my eminent successor will keep an eye on all the opportunities we can have and capture that at due time.

And I think that having a very solid balance sheet, not only a low LTV, but at the same time, long-term loans with a low level of interest rates will give us a possibility to seize those opportunities. Maybe you go back on the operational side and then you add something Nicolas.

Maybe just to come back one second and one Méka said. I think that what's also important and that's a discussion we have with the Board on a regular basis is that I think that we all clearly -- we have all clearly in mind that, of course, this FFO per share is a driver, which is very important and maybe more important than it used to be for investors and of course the potential impact of disposals will have to be much more taken into consideration in the future.

So of course, that's something which we have clearly in mind and maybe even if in the past, because of, I think, capital allocation and I think that all what we have done was the right decision in terms of disposals, when you look at how the market were allocated the buildings we have sold are performing today. That's also something that we have to keep in mind just to make sure that we are not offsetting the potential growth of our portfolio with disposal.

And to come back to your question regarding the future growth of the FFO per share, of course, we will not give any guidance on the longer term. But when we look at what's going to happen in 2022 for sure, we can consider that most of the drivers which are contributing to the growth of 2022 FFO per share will still be here in 2023.

So I think that the trend of the growth of the FFO is embedded now in the portfolio both in terms of like-for-like and pipeline.

Yes. And you have another question from Florent Laroche-Joubert.

Yes. Maybe if I can add a follow-up question.

So for the growth of FFO per share. So -- could you please tell us what is your intention in terms of disposal for the next coming years?

So can we -- should we expect a significant volume of disposal or maybe a small one.

I think that we -- as you know, this is a good question, too, of course. We have a total return approach in terms of strategy.

I think we have done a lot in the past years. I don't want to say that no disposal is going to happen, especially if somebody comes with a huge number, maybe my successors, even myself, if it comes in between.

I'm pretty sure that I will be able to convince the Board to move forward. But today, we are much more on, I would say, a regular way of doing the business.

So we are not on a rush to improve the quality of our assets. Remember that we bought Eurosic, which by the way, the year before, has made an M&A approach with Foncière de Paris.

And there was a lot of lines to be cleaned up. There are still a couple of lines from that period, which we are working on, but it's much more -- it's no more on a rush and we don't need to do that much.

Still a couple of assets to dispose maybe in the coming period, but not under any significant pressure. So it's time to see the growth of FFO.

It's time to see to harness all the -- what we have done in the past in all areas in terms of refurbishing, repositioning our assets in terms of increasing the quality of our portfolio and in terms of sustainability. And I think that this is much more of the time of growth today.

And it took time longer than expected and probably it has been prelaunched because of the COVID crisis. But today, at least, we are in a better position to come up with good news.

And again, it could be strategic, could be opportunistic in the coming period, but there is no more obligations of any kind. Our LTV is comfortable and we can live with most of these assets.

We have -- if you are done, Florent, we have a question. -- thank you -- online from Christopher Fremantle, Morgan Stanley.

Good morning Chris?

Can you hear me?

Yes.

I had a couple of technical questions, please. I just want to understand the valuation change in residential.

So can you just give us a figure for how much CapEx you have spent in residential, please, in 2021, so we can understand the cost of the value creation you've seen there, please? That's the first question.

And then the second question, you've given already quite a lot of detail on the like-for-like expectation. Can you just help us with the contribution that you expect from indexation in 2022, please?

Sometimes that's difficult to model the timing of when the indexation comes through? And if you could split between indexation and capturing reversion that would be very helpful, please.

Yes. Thank you, Chris.

I'll start with the like-for-like expectation and the contribution from indexation. Maybe you can -- if you have the slides, you can go to the appendix on page, let me find a relevant page.

That should be on Page 57. The thing is that you have lag effect between the day you observed on the market the drivers of indexation to move in one direction or another one.

And the time you see the consequence into the like-for-like performance in our P&L. And that's one of the reason why in 2021 the like-for-like is only the contribution from the indexation is only open 3% in 2021.

And that's the consequence of the falling GDP and the very weak inflation that we've seen along 2020. You know that the contributor -- the drivers of ILAT, which is indexed on offices, that's mostly, GDP, CPI.

And that's clearly the construction cost index. And this driver were relatively poor in 2020, having a consequence that the contribution to like-for-like, 2021 is relatively moderate.

Saying exactly the same thing is that considering what we are today seeing on the macro side, so for inflation, and for GDP rebounds, that was -- we have seen in 2021, we can expect the positive trends coming from the ILAT indexation to be progressively transferred into our P&L along 2022 and full speed in 2023 saying that differently, if you consider that the ILAT level should be around 3%, 3.5% today. It means that this is the kind of impact that we should have fully in our figures by the end of 2022.

So it means that the average effect to impact the figures to be published by the end of 2022 would be progressive something from 0% today to 3%, 3.5% in 2020 and 2022. So it means that potentially you can expect saying that, that the contribution to like-for-like indexation could be half of the around 1.5%, 1.6%, potentially better if the inflation continues to go up.

And then we should have the full impact for 2023. So it means that this is a real contribution that's automatic indexation is something that pass on the rent every year.

But you have this lag effect that is something that supports the growth we can expect for 2022 and 2023.

And regarding CapEx in the resi portfolio. So as we said, the value creation coming from it's almost EUR 100 million of value which is coming from the resi portfolio in terms of valuation and including EUR 13 million -- sorry, EUR 30 million of CapEx.

Okay. So the -- when I look at your valuation breakdown, you've gone from EUR 3.64 billion in 2020 to EUR 3.8 billion in 2021.

Within that figure, there is EUR 30 million of CapEx that you're sending? .

That's exactly EUR 30 million, 3-0.

Thank you, Chris. As you saw your questions are technical, so my colleagues were better than me to answer.

Have a good day.

We have a question, if I'm correct, from the webcast. So I read it and then we will answer.

In the meantime, you can we still have some time to answer the other question you could have. So we have a question for [indiscernible].

What are the brands incentives offered on new leasing in 2022 in Paris and other regions? Well, 2022, it's unusual part of time so far.

In other regions, how has it changed in the last 12 months? So one of the things that we can say interestingly and this is something that we give you some few elements on during the presentation.

But interestingly, the maturity of our lease signed in 2021 hasn't decreased compared to what we had before. Incentives were stable as well.

So that's something which is probably helped by the location of our portfolio. But what we can say is that we haven't seen a significant increase globally in average in our portfolio in terms of incentives.

But you have, of course, maybe some [indiscernible] trends. But in average for us given the specifics and breakdown of our portfolio, we've been relatively stable in that segment.

Thank you, Samuel. And I would like to add to that as the rents, the headline rents are increasing in the best areas in Paris, Paris CBD and in the best areas.

So as the incentives are almost stable compared to what it was pre COVID, precrisis, we are seeing the net rents moving up in the coming period, which is very interesting. And we wouldn't expect that when we entered the crisis period.

Next question from Charles Boissier.

Yes. I have 2 questions.

The first 1 on your short-term profit pipeline, the yield on cost at [indiscernible] was 5.2%. And now it's more like 4.9%.

And I just was wondering if it's due to higher cost, maybe lower rent expectations? Or is it just due to the recent completion and it's just a slightly different type of assets in the pipeline?

And then maybe a second question. Nicolas, you have devoted many years to Gecina.

I just was wondering if you would be considering playing a role maybe at the Supervisory Board another form going forward.

Thank you for this question. I will let Samuel to answer your first one.

An interesting one would [indiscernible], has the answer.

I'm not sure to fully understand what you're saying actually because you -- I'm not sure you compare really apple to apple. So the perimeter that you have last year, for instance, where the unit cost was a bit higher including some assets which have been delivered since then.

And probably that's mostly a question of perimeter not so much about change in construction costs. You know that on these assets construction cost is totally frozen.

So it means that it's [indiscernible]. So we don't have any impact of change in construction costs that could impact these things.

On the other hand, if you look at the trends that we are seeing in the rental markets, it's rather supportive so to the expectation we can have. So I believe that really if there is an explanation to the change you suggest in terms of hidden costs that largely due to the perimeter of the portfolio you're talking about, not so much about assumptions.

Thank you, Samuel. For your question about what could be my future role on Gecina, I'm a very small individual shareholder of Gecina, so I will keep an eye on them.

But more seriously, I think that it won't be a good idea to be the advisory board. I think that by the way, neither the shareholders nor myself would like to do it so.

I think that it is time to turn the page, 65. And it's time for person of my age to take some retirement and maybe some vacations.

So -- but I will just keep an eye on them. Believe me.

Any other question? I don't see, maybe a written one.

Just a couple of minutes. Okay.

I'm trying to read the instructions. Okay.

Next question. No.

If there are no other questions, I would like to thank you for your attention for those who are in the room to attend this presentation. Thanks, my colleague, and wish you a very pleasant weekend.

Thank you. Bye-bye.

Thank you, everybody.