Icade S.A.

However, the slump in revenues could be offset by steady income from the resilient healthcare property division (see "Icade Sante SAS," published Dec. 1, 2020) and rising development sales. After a relatively resilient 2020, notably due to large bulk sales to institutions (which should offset weaker sales to individuals) revenue from development should remain solid in 2021. It will be supported by an encouraging backlog and pent-up demand. More specifically, we understand the company will cut its capital expenditure (capex) pipeline to €1.5 billion, from €2.2 billion previously, and earmark its landbank for residential sales rather than for speculative office developments. We think this is pertinent given the current uncertainty around offices. The use of scrip dividend and the strong

...Icade SA's revenue should grow moderately in 2021-2022, as higher development sales and steady healthcare rental income should offset potential income losses from the office portfolio. We think Icade's revenue from offices (51% EBITDA) could be down by about 5% next year. This is because upcoming lease maturities will become difficult to renew at current rental levels next year given that tenants' office space requirements have been affected by the pandemic, especially now that more people are likely to work from home. For Icade, vacancies and falling rents could affect office leases that are maturing in 2021. This could apply to up to 8.4% of its office rents (about 4% total group EBITDA) as we understand about 60% of 2021 maturities (estimated at 21% as of June 30, 2020) have already been secured or extended. However, the slump in revenues could be offset by steady income from the resilient healthcare property division (see "Icade Sante SAS," published Dec. 1, 2020) and rising development...

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