09 Mar Application and acceleration of ANF Immobilier's strategy: Recurring Cash Flow (Group share) up by 24% and expansion into Toulouse

Paris, March 9, 2017

Annual Results 2016

• Consolidated rents up 4% to €51.2 million, Group share stable.

• Consolidated recurring cash flow up 15% to €23.6 million in 2016 with Group share up 24% to €18.5 million, or €1.02/share.

• EPRA Earnings (adjusted Group share) up 12% to €16.3 million, or

  €0.90/share, higher than the initial target.

• Net loss (Group share) of €3.7 million.

• Gross asset value of €1068 million further to €152 million asset rotation, split between €91 million from the disposal of mature assets with low yields and

  €61 million of investment in new commercial properties.

• Negative change in assets' fair value, Group share, reaching €13 million: a decline of €27 million in the fair value of the Marseille heritage portfolio offset by an increase of €11 million related to new projects, and a disposal gain of

€3 million.

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Annual Results 2016

In 2016, ANF Immobilier's gross rental income was €51.2 million measured according to IFRS. This represents a growth of 4%, mainly attributable to new projects delivered (+6% over the entire portfolio) and offset by a decline in the performance of existing shopping malls in Marseille (-2% at constant scope for the portfolio as a whole). Portfolio income mainly stemmed from office leases (54%), commercial leases (17%) and hotels (13%). Commercial real estate now accounts for 84% of gross rental income, and housing, including accessories, now accounts for only 16% of rents. Since implementing the new strategy established in 2013, consolidated gross rental income has increased by 67%. The Group share of rental income was €41.2 million, stable compared with 2015 (-1%).

Some numbers:

• recurring EBITDA was up 15%, mainly due to a reduction in structural costs. Meanwhile EBITDA margin, measured according to IFRS, rose from 66% to 74%;

• current cash flow, measured according to IFRS, rose by 15% to stand at €23.6 million. Current cash flow Group share rose by 24% to €18.5 million, or €1.02 per share, mainly attributable to new projects delivered;

• adjusted EPRA Earnings, was €16.3 million, an increase of 12% from 2015. ANF Immobilier is well above its initial target of an 8% increase raised to 10% during the year;

• net loss after minority interests, measured according to IFRS, was €3.7 million, largely due to a negative change of €4.1 million in consolidated fair value and the negative impact of minority interests of €13.5 million;

• the value of the portfolio amounted to €1,068 million following: €61 million investments,

  €91 million disposals of non-strategic assets. At the end of 2016, the "Core" portfolio accounted for 57% of the total portfolio;

• the LTV ratio was down slightly at 42% and the cost of debt remained at 2.7%;

• at December 31, 2016, NNNAV amounted to €27.3/share, based on the EPRA method, which is stable when the dividend of €1.24/share paid in 2016 is excluded.

  Three strategic pillars illustrated in 2016
• Targeting the most dynamic regional cities

  Lyon, Bordeaux, Marseille: supporting the metropolises of the future

  Since drawing up its new strategy in 2013, ANF Immobilier has confirmed its attachment to Lyon, Bordeaux and Marseille, which are among France's most dynamic regional cities. These cities pay special attention to infrastructure development and the creation of innovative new neighborhoods.

  The Company invested €369 million in new, mainly commercial, projects with high potential in these cities, in other words a Group share of €254 million between 2013 and 2016. After adding

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  Annual Results 2016

  the future flow of real estate transactions in the pipeline, this represents a total transaction value of €567 million for a Group share of €392 million. These investments are distributed geographically as follows: 59% in Lyon, 26% in Bordeaux, 7% in Marseille and 10% in regional hotels with the remainder made up of the new investment in Toulouse.

  Toulouse, a promising new metropolitan hunting ground

  Toulouse is one of the most dynamic cities in France demographically and economically. With Airbus acting as the driver, together with other industries such as energy, the regional capital is undertaking a major development of its infrastructure and its office resources. In market terms, the city is the third-largest office market in France (about 4.2 million m² of offices) with a take-up of almost 130,000 m² on average over the past ten years, and nearly 170,000 m² in 2016, proving its runaway development.

  In December 2016, it was a logical step for ANF Immobilier to confirm its presence in Toulouse, signing a promise to purchase a first building called Centreda located in the Blagnac area. This first complex consists of two buildings totaling 16,150 m² of offices (multitenant) and represents an investment of nearly €19 million (including earn-outs). It will generate additional annual gross income of €2 million due to run from the completion date in March 2017.

• Commercial target - A continuous flow of strategic transactions

  Consistently high rate of hotel assets delivered

  In 2016 ANF Immobilier took ownership of three new hotels: the first in Marseille-Velodrome with 126 rooms under the AC By Marriott name, delivered in January 2016, the second in Marseille-Euromed 2 with 88 rooms under the B&B name, delivered in May 2016, and the third in Bobigny with 117 rooms under the B&B name, delivered in June 2016. These three assets were acquired through the subsidiary ANF Immobilier Hôtels and will generate additional income of

  €1.9 million, bringing the number of hotel rooms delivered by this specialist subsidiary to nearly 1,100.

  ANF Immobilier's expertise illustrated by its investment in the Quai 8.2 real estate complex in Bordeaux with 31,500 m² of offices, shops and a 3-star 126 room hotel

  ANF Immobilier is affirming its regional credentials with an investment in the complex located 200 meters from the HST (LGV) station that will cut travel times between Bordeaux and Paris to just over two hours from July 2. 2017. The Company is a joint investor with Foncière des Régions (65%/35%) in 29,500 m² of offices and 2,000 m² of shops. The deal, signed in September 2016, represents a total sum of €90 million, with delivery in the third quarter of 2018. The office areas are currently 33% leased to Orange and Allianz through nine-year fixed-term leases. On the same site, in partnership with Caisse d'Epargne Provence Alpes-Corse, the Company also acquired a three-star hotel with 126 rooms rented to B&B under a lease for a fixed term of 12 years. The investment represents a total amount of €7 million.

  Delivery of Adecco France's new headquarters, 13,100 m² of new office space in the Carré de Soie in Lyon

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  Annual Results 2016

  In September 2016, ANF Immobilier (50%), in partnership with Crédit Agricole Assurances (45%) and DCB International, delivered 13,100 m² of office space leased to the Adecco France Group for a fixed term of nine years. The deal represents an investment of around €34 million in Lyon's Carré de Soie district and will generate additional rental income of €2.5 million. The building has obtained a BREEAM "Very good" certification.

  Opening of the Maxi-Bazar shopping mall, part of the Banque de France deal, in the Lyon Presqu'île, and delivery of 400 m² of additional preleased offices

  After it won the 2013 bid to purchase the old Banque de France building on rue de la République, ANF Immobilier met its target of completing the conversion of the historic building in barely three years: Nike opened its 500 m² outlet in March while Maxibazar opened at the end of September in premises of 2,000 m². Early this year, 400 m² of offices were delivered.

• Creating value on all fronts

Optimizing value creation with the Quai 8.2 in Bordeaux, an important mixed-use development of 46,000 m²

As a joint developer with Vinci Immobilier (50%/50%) of the mixed-use 43,000 m² complex comprising 29,500 m² of office space, 2,000 m² of shops, a three-star hotel with 126 rooms, a four-star hotel with 111 rooms, and a student residence with 123 rooms, ANF Immobilier plans to achieve a Group share margin of around €6 million and earn close to €2 million in management fees. This margin is secured by actual sales through partnerships with Foncière des Régions for commercial space, ANF Immobilier-CEPAC for the three-star hotel, and a private investor for the four-star hotel. One third of the student residence is already preleased. Furthermore, ANF Immobilier receives fees in its capacity as the asset manager.

A proactive asset manager, ANF Immobilier anticipates and meets the needs of its users

ANF Immobilier signed a MoU with Areva for its base in the Part-Dieu in Lyon. This agreement perpetuates the collection of the majority of the rental income, i.e. €5.5 million, until December 31, 2021 and will enable the Company to consider a value-creating redevelopment of part of the site.

Value-creating disposal of two hotels and increase in ANF Immobilier's holding in its hotel subsidiary

Lyon's Carlton Hotel is located in Place de la République. Trading under the MGallery name, it has 80 rooms which were fully renovated in 2012. Marseille's Adagio Hotel is located in rue Trinquet. Trading under the Adagio Aparthotel name, delivered in 2009, it has 142 rooms. Both establishments were sold by ANF Immobilier Hôtels, leading to a premium of €0.20/share in ANF Immobilier's EPRA Net Asset Value.

The proceeds from the disposals were reinvested. ANF Immobilier increased its stake in ANF Immobilier Hôtels from 51% to 77%. This is perfectly in line with the strategy to sell mature or valued assets to invest in new commercial property delivering higher returns.

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