Eiffel Tower Company: EPRA Result Doubled, but Occupancy Declines to 71%
The Eiffel Tower Company has released its half-year results marked by the delivery of Syrah and the upcoming completion of Rivage, concluding a first development cycle initiated in 2022. However, this progress comes in a tense rental market, with a declining financial occupancy rate and a financial charge coverage ratio approaching its contractual threshold. Concurrently, the company continues its asset disposals and adapts its financing to preserve financial flexibility.
Rental Income Up, Occupancy Down, and Negative Rental Balance
Gross rental income increased by 4.3% to reach €38.0 million in the first half of 2026, supported by the contribution of recent deliveries amounting to €2.0 million. However, on a like-for-like basis, rents contracted by 1.1%, with the effects of departures and renegotiations, amounting to -€0.7 million, only partially offset by indexing at €0.3 million. The EPRA financial occupancy rate stood at 71.0% at the end of June 2026, compared to 73.1% at the end of 2025, a decline of 210 basis points. Adjusted for the vacancy caused by redevelopment operations, which represents 6.9%, it stands at 78.0%. Nevertheless, the net balance of rental activity shows a negative at -€2.1 million in annualized rents. During the period, €3.8 million of annualized rents were agreed upon, including €1.3 million for new leases and €2.5 million for renewals. The fewer leases with exit options in the next twelve months partly explain a less sustained security activity. The company also emphasizes that the rental market remains selective. The quality of the tenant base is preserved: over 85% of tenants belong to the two best risk categories according to Coface and Credit Safe, while 96.2% of the rents invoiced in the first half were collected by early July.
Adjusted EPRA Result, Particularly Due to Lower TSDI Costs
The EPRA result reached €8.7 million in the first half of 2026, compared to €4.3 million a year earlier. This evolution should be viewed in light of the EPRA methodology change and the significant reduction in the cost of indefinitely subordinated securities. In the standard presentation used for calculating the EPRA result, the current operating result amounts to €18.0 million, compared to €16.8 million a year earlier. Operating expenses increased by €1.1 million to reach €8.4 million, half due to the evolution of business tools and the deployment of electronic invoicing, and half due to the accounting reclassification of the headquarters' rent. This latter is neutral on the EPRA result and on the net result. Financial expenses are set at €7.6 million, compared to €6.4 million in the first half of 2025, while the average cost of debt rose to 3.6%, from 1.9%. The first half of 2025 had benefited from €5.9 million in non-recurring financial income from the placement of part of the capital increase proceeds, including €1.8 million related to the placement of €180 million intended for the repayment of the 2020 TSDI. Concurrently, the use of the residual proceeds from this capital increase reduced the average debt and generated an interest saving of €4.7 million. The cost of TSDI decreased to €2.2 million, from €6.2 million a year earlier, following the repayment of the 2020 TSDI of €180 million in June 2025 and thanks to the lower rates on the 2007 TSDI indexed to the three-month Euribor. The current cash flow increased to €10.1 million, from €5.1 million, supported particularly by the increase in collected rents and the reduction in financial interest paid. The consolidated net result remains in deficit at -€23.0 million, from -€46.0 million a year earlier, particularly under the effect of depreciations and amortizations of assets.
Financial Leverage Tightens and ICR Approaches Covenant
The EPRA Net Reinstated Asset, or NTA, fell from €8.16 to €7.72 per share in six months. This decline is mainly due to the adjustment of the value of the assets, for -€0.34 per share, and the recognition of 50% of deferred taxes related to latent gains since exiting the SIIC regime, for -€0.16 per share. The value of the assets decreased by 2.9% on a like-for-like basis, due to the rise in capitalization rates, the decline in rents, and the increase in adjustments retained by the experts. Gross debt is set at €424.0 million, compared to €422.5 million at the end of 2025, while net debt increased from €372.5 million to €381.9 million. This evolution mainly results from development expenses and the decrease in fair value of the assets. The LTV ratio thus rises to 24.4%, from 23.4% at the end of 2025, while the EPRA LTV reaches 31.9%. The financial charge coverage ratio is established at 2.5 times, compared to 3.0 times at the end of 2025, with a contractual covenant set at a minimum of 2.0 times. The company anticipates that this indicator could end the year very close to, or even below, this threshold, particularly due to the delay in several delivery, marketing, and disposal schedules. It indicates having obtained a modification of the financing contracts concerned for December 31, 2026. The deadlines for the year include the refinancing of a €330 million line in October and the extension of the SMABTP line of €350 million in November. The company has obtained a principle agreement covering the entire €330 million to be refinanced as part of its 100% acquisition by the SMABTP group. It continues its arbitrations concurrently to finance the transformation of its assets and to control its financial leverage.
