Icade S.A.

The debt-to-debt-plus-equity ratio should remain contained at 44%-45% in the next two years (from 44.1% as of Dec. 31, 2020), pressured by our negative valuation assumptions (about 2% down, mostly due to office), but well below our 50% threshold for a downgrade. The EBITDA-to-interest ratio (5.2x as of June 30, 2020) should strengthen in the 5.0x-5.5x range in 2021-2023, from 4.6x at Dec. 31, 2020, boosted by rising EBITDA and an all-time-low cost of debt (1.35% as of June 30, 2021, versus 1.48% as of Dec. 31, 2020). Our outlook on French real estate investment company Icade is stable. We believe the company's growing revenue share in health care and cautious development strategy should offset the structural challenges office assets

...Icade S.A.'s 2021 revenue should reach 2019's level and exceed it more pronouncedly in 2022-2023, as higher development sales, office asset deliveries, and a growing health care revenue base should more than offset potential vacancy in the office portfolio. For Icade's office assets, we think upcoming office lease maturities (13% of total group EBITDA in 2022, as of Sept. 30, 2021) will continue to be difficult to renew at current rental levels in 2022. Leasing activity in the Paris region office market has rebounded in 2021, but remains below pre-pandemic levels, with nine-month take-up in 2021 being 27% lower than 2019, according to Immostat. Although we think demand should continue to bounce back, thanks to job creations in France in the next 24 months, Icade could still experience some vacancy, especially in the most decentralized areas. However, the revenue slump should be more than offset by steadily growing income from the resilient health care property division (comprising 480 million...

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