Icade S.A.

S&P Global Ratings' outlook on French real estate investment company Icade is stable. We believe the company's growing revenue share in office and healthcare and cautious development strategy should offset the weaker performance in business park properties and subdued property development market. Moreover, we believe Icade's cash flow generation will benefit from the delivery of office development projects, although some of them may be partly vacant at completion. As a result, we expect Icade will be able to maintain an EBITDA interest coverage ratio higher than 4x, with more than 85% of its EBITDA generated by income-producing assets, and a debt to debt and equity (fair-value adjusted) ratio consistently at or below 45%. We would consider lowering the ratings should

...Icade's asset mix is progressively improving toward more revenue predictability and a lower share of business parks, which we view as more volatile than the Paris office and healthcare segments. Business parks represented 15% of Icade's portfolio value as of June 30, 2019, down from 39% in 2015. This is mostly the result of assets disposals, some asset reconfigurations, and growth in the office and healthcare property segments (representing 60% and 22% respectively versus 40% and 19% in 2015). The company has ambitions to grow its healthcare portfolio to 30% by 2022, mainly through acquisitions but also pre-let developments in France and also in neighboring European countries such as Italy, Germany, or Spain. The company is on track to deleverage its capital structure, in line with its strategic plan to maintain its LTV ratio around 40%, which corresponds to a debt-to-debt plus equity ratio of 42%.Icade has accelerated its disposal plan in the second half of 2019, following the 691 million...

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