Eurocommercial Properties First look: 1H25 results confirm guidance at higher end of range

Eurocommercial reports 1H25 EPRA EPS -1.6% below our estimates at EUR 1.22 vs EUR 1.24 exp. The result is flat YoY despite +2.8% increase in rental income. Both rental income, financial costs and taxes came in slightly higher than expected. There is also EUR 1.5m other income coming from advisory fees to JV's which offsets the higher investment expenses. On rent reversion, the Italian portfolio continues to outperform (+8.2%) while existing tenants give pushback in Sweden (-0.4%) and discounts are given in France (-1.2%) to new tenants in order to decrease vacancy. Woluwe has strong indexation but rent reversion decelerates to 1.9% (vs. 6.6% in FY24). Footfall for the whole portfolio increased by only +0.5% in 1H25 (+1.7% FY24) at a higher conversion rate (+2.6% retail sales vs +2.7% FY24). Similar to peers (i.e. Klepière) retail sales accelerated over Q2. The negative OCR trend continued upwards but it remains the lowest in the sector. There is no mention of an SBB to offset the optional dividend. The guidance is confirmed at the higher end of the initial range of EUR 2.40-2.45 direct investment result per share.