H1 2017 Results: Solid performances and pursuit of the growth story 20 July 2017
CONTENTS > 1. STRATEGIC POSITIONING > 2. REAL ESTATE ACTIVITY > 3. FINANCIAL RESULTS > 4. OUTLOOK > APPENDIX FONCIÈRE DES RÉGIONS H1 2017 RESULTS 2
1 Strategic positioning H1 2017 RESULTS 3
A UNIQUE BUSINESS MODEL We are a European operator working across the entire real estate value chain Develop Focus on the major Client centric tomorrow’s buildings European cities Enhanced services for our clients Smart and efficient buildings Business & tourism centers Create a productive and Mixed-use projects Transportation hubs well-being environment € 1.2 billion 1 acquisitions Launch of a flexible and 14 deliveries in 2017 H1 2017 co-working workspace in Berlin, Milan, 100,000 m² of offices achievements offer Barcelona & Madrid 830 hotel rooms FONCIÈRE DES RÉGIONS H1 2017 RESULTS 4 1 € 614 million Group Share
BE CUSTOMER ORIENTED: DEVELOP TOMORROW’S BUILDINGS Development pipeline: A € 4.1 billion 1 development pipeline the best strategy New trends in workspace environments & accelerated obsolescence of the buildings A demand focused on New/refurbished buildings € 3.4 bn in Offices Paris, Milan, Lyon, Marseille Higher returns than buying assets 30% value creation already realized on the 2017 deliveries € 400 million in Residential Low risk Berlin 92% average occupancy rate the year of their delivery of the French offices since 2011 € 280 million in Hotels Paris, Lyon, Berlin, Munich, Milan Better quality 100% Green FONCIÈRE DES RÉGIONS H1 2017 RESULTS 5 1 € 3.2 billion Group Share
OFFERING GROWTH AND PROFITABILITY A growing portfolio: A strong profitability € 21 billion ( € 13 billion Group Share) at end-June +28% growth since 2014 € 21.0 bn French offices pipeline +41% € 19.3 bn H1 2017 like-for-like value growth since 2014 € 17.8 bn 2016 € 16.4 bn +37% Residential in Berlin 2015 like-for-like value growth since 2014 2014 € 4.9 bn investments € 2.7 bn One of the strongest ROE of its sector since 2014 disposals since 2014 6.8% Mostly in Paris, Berlin & Milan Non core assets (Recurring net Income 2016/EPRA NNNAV 2016) FONCIÈRE DES RÉGIONS H1 2017 RESULTS 6
H1 2017 RESULTS: STRONG GROWTH RECURRING RENTS OCCUPANCY NET INCOME RATE +3% +12% 96.6% +2% LFL € 198.3 MILLION 6.6-YEAR € 2.7/SHARE € 295 MILLION LEASE NAV LTV PORTFOLIO +10% +5% 42.9% +3% LFL EPRA NAV vs 44.6% € 6.6 BN; in 2016 € 13 BILLION € 88.4/SHARE Group share data FONCIÈRE DES RÉGIONS H1 2017 RESULTS 7
2 Real Estate Activity > France Offices > Italy Offices > Germany Residential > Hotels in Europe H1 2017 RESULTS 8
POSITIVE RENTAL TRENDS IN ALL OUR MARKETS Milan office market Greater Paris office market Average economic rent Average economic rent for new/refurbished for prime offices offices in Paris, La Défense, Western Crescent 480 € 320 € 460 € 315 € 440 € 310 € +8.0% +4.0% 420 € 305 € 300 € 400 € Office - Milan 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Source: CBRE Source: JLL Hotels in Europe Residential Berlin RevPar 1 evolution in Europe Mietspiegel index evolution since 2013 (Base 100 end-2013) (in € /m²/month) 120 6,6 € 6,4 € 115 6,2 € 110 +8.1% +9.4% 6,0 € 105 5,8 € 5,6 € 100 5,4 € 95 5,2 € 5,0 € 90 2013 2015 2017 2013 2014 2015 2016 May 2017 Source: MKG FONCIÈRE DES RÉGIONS H1 2017 RESULTS 9 1 Revenue Per Room
France Offices
SIGNIFICANT LETTING SUCCESSES IN A SUPPORTIVE MARKET Greater Paris office market A good letting activity positively oriented in our portfolio Take-up H1 2017 Rental growth +4% YoY like-for-like For offices > 5,000m²: +9% Western Crescent: +50% +0.9% Vacancy rate 6.5% Historically high occupancy rates Obsolescence issue No short-term oversupply risk 95.3% Economic rents 95.8% 96.0% 95.8% 94.7% +4% vs 2015 95.7% 96.8% 95.6% 94.3% 2009 H1 2017 Thaïs, Greater Paris FONCIÈRE DES RÉGIONS H1 2017 RESULTS 11
2017: A RECORD YEAR OF DELIVERIES OF PROJECTS, FAVORED BY THE TENANTS H1 2017: 4 deliveries for € 137 million 1 and 33,000 m² Already 86% let with a 9-year average firm maturity +50% average total value creation 100% 66% 91% 100% secured let let let Silex 1 - Lyon O’rigin - Nancy Hermione - Euromed Thaïs Thaïs – Paris Office - Milan 10,700 m² 6,300 m² Marseille Levallois-Perret 10,400 m² 5,500 m² New in H1 2017 New in H1 2017 3,530 m² let to Under final negotiation MCI & Gekko FONCIÈRE DES RÉGIONS H1 2017 RESULTS 12 1 € 123 million Group Share
2017: A RECORD YEAR OF DELIVERIES OF PROJECTS, FAVORED BY THE TENANTS H2 2017: 4 deliveries for € 268 million 1 and 48,000 m² +20% average value creation to date Advanced 100% 100% 100% negotiations let secured let ongoing New S t Charles Edo – Floréal - Euromed Art & Co - Paris Issy-les-Moulineaux Marseille Reims 13,500 m² 13,400 m² 10,800 m² 10,300 m² New co-working New in H1 2017 activity Under final negotiation for 5,000 m² FONCIÈRE DES RÉGIONS H1 2017 RESULTS 13 1 € 250 million Group Share
CLIENT CENTRIC: A NEW FLEXIBLE & CO-WORKING ACTIVITY 1 st openings coming soon Launch of a new third-places offer Create a territorial network in the major French cities Meet a new and fast growing demand GARE DE LYON DELCASSE PARIS 12 th PARIS CBD January 2018 October 2017 Stay close to the tenants 5,000 m² 3,300 m² Keep value creation in-house Silex² LYON GARE ST JEAN LGV BORDEAUX 2020 Q2 2018 5,000 m² 10 sites already identified 3,000 m² EUROMED CENTER Target return : c. 30% margin vs rents MARSEILLE October 2017 COMPANS CAFFARELLI 2,300 m² TOULOUSE Q2 2018 3,300 m² FONCIÈRE DES RÉGIONS H1 2017 RESULTS 14
WE WANT OUR BUILDINGS TO BE BUSINESS DRIVERS FOR OUR CLIENTS TERRACES Flexible VIP ROOM RESTAURANT Connected TERRACES AUDITORIUM TERRACES URBAN AGRICULTURE CLASSICAL LEASES FITNESS TERRACES ROOM Full of services CAFETERIA CONCIERGE RECEPTION DESK RESTAURANT CO-WORKING CONVENIENCE PATIO STORE FLEX-OFFICE Mixed and LOUNGE diverse CAR PARKS Silex 2 - Lyon FONCIÈRE DES RÉGIONS H1 2017 RESULTS 15
Italy Offices
H1 2017: A SOUND OPERATING PERFORMANCE Milan office market First impacts of the operating successes of 2016 positively oriented Recovery in like-for-like rent 1.5% Take-up H1 2017: +0.2% +29% YoY H1 2017 2016 -1.5% Grade A: 65% of the take-up 2014 -4.1% 92.1% 2015 91.6% Prime economic rent: Portfolio +8% vs 2015 Occupancy rate ex-Telecom Italia: 87.4% +2.9% ex-TI 84.7% FONCIÈRE DES RÉGIONS H1 2017 RESULTS 17 Source: Cushman & Wakefield
H1 2017: GOOD LETTING ACTIVITY ON THE DEVELOPMENT PIPELINE Via Cernaia, Milan Fully pre-let to Amundi for 9.5 years 8,300 m², delivery Q4 2017 € 57 million cost; € 3.1 million of rent € 792 million 1 development pipeline 224,000 m²; c.90% in Milan € 332 million 2 committed projects 58% pre-let New HQ FONCIÈRE DES RÉGIONS H1 2017 RESULTS 18 1 € 412 million Group Share; ² € 174 million Group Share
H1 2017: REINFORCEMENT IN MILAN CITY-CENTER Acquisition of a € 118 million 1 portfolio 17 properties 2 ; 21,700 m² 82% in Milan Milan, Corso Magenta A high-quality portfolio with prime locations Let to the Credito Valtellinese Group Double net leases; 10.8-year firm lease terms Attractive initial yield of 6.0% Milan, Piazza San Fedele FONCIÈRE DES RÉGIONS H1 2017 RESULTS 19 1 € 62 million Group Share; ² including 2 long-term leasehold rights
H1 2017: QUALITATIVE ASSET ROTATION Disposal of a core mature asset Diversification of the tenant base 11,705 m² of offices in Milan via San Nicolao Closing of the partnership on TI portfolio with two major international investors > € 114.6 million 2 , 4.2% exit net yield > 40% share of the portfolio to Crédit Agricole Assurances & EDF Invest > Equivalent of € 618 million 1 of underlying assets > Redevelopped in 2014 and let to Luxottica Naples, Via de Pretis Milan, San Nicolao FONCIÈRE DES RÉGIONS H1 2017 RESULTS 20 1 € 323 million Group Share; ; 2 € 60 million Group Share
Germany Residential
H1 2017: SUCCESS OF OUR BUSINESS MODEL Continuation of the strong growth, in all our markets Mainly through reletting Like-for-like rents +4.0% +3.6% 9% H1 2017 58% Modernization +2.4% Reletting 2016 +1.8% Like-for- 2015 like rents 2014 +4.0% Hamburg 33% +5.3% Indexation Berlin +4.8% NRW Dresden +3.2% & Leipzig +3.8% FONCIÈRE DES RÉGIONS H1 2017 RESULTS 22
H1 2017: PURSUIT OF ACQUISITIONS IN BERLIN AT ATTRACTIVE CONDITIONS FdR : A € 2.4 billion 2 Berlin portfolio focused on the best locations € 376 million Prime 73% location of acquisitions 1 Good Berlin (86%), Leipzig & Düsseldorf location 22% Average Quality portfolios with high growth potential location € 1,860/m² ( € 2,170/m² in Berlin) 4.5% yield after reletting of 11% vacant units (4.3% in Berlin) Basic 5% +35% reversionary potential location Green area Source: Engel & Völkers Residential New acquisitions FONCIÈRE DES RÉGIONS H1 2017 RESULTS 23 1 € 241 million Group Share; 2 € 1.5 million Group Share
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