Cofinimmo confirms 2025 guidance after in-line first half results

Belgian REIT Cofinimmo reported H1 2025 EPRA earnings up 2.4% to €122 million, but confirmed a lowered full-year 2025 EPRA EPS guidance of "at least" €6.20, representing a 4.6% decrease from the prior year. Despite this, the company achieved strong operational metrics, including 2.8% like-for-like rental growth and a high 98.6% overall occupancy, particularly in its healthcare and distribution segments. However, EPRA Net Tangible Asset value per share declined 3% since December 2024 to €90.30, and the EPRA Net Initial Yield increased by 10 basis points to 5.5%.

Analysis

Belgian REIT Cofinimmo presented a mixed financial report for the first half of 2025, with EPRA earnings increasing 2.4% year-over-year to €122 million, while confirming a weaker outlook. The company's reiterated full-year 2025 guidance for EPRA earnings per share of "at least" €6.20 represents a 4.6% decrease from the previous year, a key headwind for investor sentiment. Operationally, the portfolio remains robust, evidenced by a high 98.6% overall occupancy rate and solid like-for-like rental growth of 2.8%, predominantly driven by indexation (+3.0%). The core healthcare and distribution network segments continue to outperform, with LFL rental growth of 2.9% and 3.4% respectively, and near-full occupancy. The office segment showed modest improvement, with occupancy rising 30 basis points to 94.1%, although its property values experienced a slight 0.2% decline. Despite stable like-for-like property valuations, key valuation metrics have softened; the EPRA Net Tangible Asset (NTA) value per share fell 3% since December 2024 to €90.30, and the EPRA Net Initial Yield expanded by 10 basis points to 5.5%, suggesting potential market repricing or balance sheet pressures.

Key Decisions for Investors

• Investors should weigh the company's resilient operational metrics, such as high occupancy and inflation-linked rent growth, against the negative signal of a confirmed 4.6% decline in full-year EPS guidance.
• Consider the defensive characteristics of the core healthcare and distribution portfolios, which continue to perform strongly, while remaining cautious about the office segment's slower recovery and negative value trend.
• Monitor the declining EPRA NTA per share and widening initial yield, as these trends may indicate ongoing pressure on the stock's valuation relative to its underlying assets.
• Scrutinize the capital allocation strategy, given the first-half saw net disposals of €20 million from €56 million in disposals versus €36 million in investments, which appears inconsistent with the full-year target of €70 million in net investments.