Q3 2017 Revenues: A robust European dynamic 26 October 2017 - - PowerPoint PPT Presentation

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Q3 2017 Revenues: A robust European dynamic 26 October 2017 - - PowerPoint PPT Presentation

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Q3 2017 Revenues: A robust European dynamic 26 October 2017 CONTENTS > RENTAL ACTIVITY: PURSUIT OF THE POSITIVE TREND > INVESTMENT ACTIVITY: REINFORCEMENT IN THE STRATEGIC LOCATIONS > NEW STEPS IN THE SIMPLIFICATION OF THE GROUP

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Q3 2017 Revenues: A robust European dynamic

26 October 2017

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CONTENTS

FONCIÈRE DES RÉGIONS 2

> RENTAL ACTIVITY: PURSUIT OF THE POSITIVE TREND > INVESTMENT ACTIVITY: REINFORCEMENT IN THE STRATEGIC LOCATIONS > NEW STEPS IN THE SIMPLIFICATION OF THE GROUP STRUCTURE > KEY TAKEAWAYS > APPENDIX

Q3 2017 REVENUES

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Q3 2017 REVENUES 3

Rental activity: pursuit of the positive trend

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FONCIÈRE DES RÉGIONS 4 Q3 2017 REVENUES

RENTAL ACTIVITY: PURSUIT OF THE POSITIVE TREND IN ALL OUR MARKETS

France Offices Sound performance 95.9%

Occupancy rate

+1.0%

Like-for-like rents vs 2016 (95.6%) vs 2016 (-0.5%)

Italy Offices Increased occupancy 93.1%

Occupancy rate on portfolio ex-Telecom Italia

1.5%

Like-for-like rents on portfolio ex-Telecom Italia vs 2016 (91.6%) vs 2016 (0.2%)

Major renewal in Via Montebello, Milan CBD

18,426 m², let to Intesa Sanpaolo Renewal at passing rent; 9 years €500/m² office rent

60,623 m² of new leases1

8-year average firm maturity

1 Including 24,108 m² of new offices disposed to an end-user

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FONCIÈRE DES RÉGIONS 5 Q3 2017 REVENUES

RENTAL ACTIVITY: PURSUIT OF THE POSITIVE TREND IN ALL OUR MARKETS

Germany Residential Acceleration of the growth 98.3%

Occupancy rate

+4.5%

Like-for-like rents vs 2016 (98.2%) vs 2016 (+3.6%)

Hotels in Europe In a growing European market 100%

Occupancy rate

+2.1%

Like-for-like rents vs 2016 vs 2016 (-2.9%)

Berlin Hamburg NRW Dresden & Leipzig 41% Indexation 51% Reletting 8% Modernization

…Mainly coming from relettings Widespread growth acceleration…

(vs 2016) (vs +4.6%) (vs +3.7%) (vs +2.8%) (vs +3.8%)

Variable rents (AccorHotels)

+4.8%

+5.7% +3.5% +3.4% +5.0%

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FONCIÈRE DES RÉGIONS 6 Q3 2017 REVENUES

RENTAL ACTIVITY: SUCCESSES OF THE DEVELOPMENT PIPELINE

Occupancy rate of the 2017 deliveries

98%

Rental levels > expectations Target value creation

>30% Via Cernaia, Milan

8,300 m², delivery Q4 2017 100% pre-let Amundi

Art&Co, Paris

13,400 m², delivery Q4 2017 100% pre-let Of which 5,000 m² of flex-offices by FdR 13 deliveries in 2017; 10 offices, 3 hotels 98,400 m² of offices; 683 hotel rooms The 2 largest deliveries of the year fully pre-let:

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FONCIÈRE DES RÉGIONS 7

Group Share; €million Rental income (100%) Rental income (Group Share) Change Change like-for- like Occupancy rate Residual firm terms

  • f leases

Offices - France 204.1 185.2

  • 1.5%

+1.0% 95.9% 5.1 years Offices - Italy 152.4 74.3

  • 1.9%

+0.9% 95.5% 7.4 years

Of which Telecom Italia

  • ffices

73.6 33.1

  • 14.7%

+0.2% 100% 13.1 years

Of which portfolio ex-Telecom Italia

78.8 41.1 +4.8% +1.5% 93.1% 4.4 years Residential - Germany 171.9 106.5 +8.2% +4.5% 98.3% n.a. Hotels/Service Sector 155.6 70.2 +13.6% +2.1% 100% 10.6 years Other (French Resi.) 8.8 5.4

  • 25.5%

n.a. n.a. n.a. Total 692.8 441.6 +2.4% +2.0% 97.0% 6.7 years

Q3 2017 REVENUES

REVENUES: A SOUND FIRST 9 MONTHS

+0.2%

  • 0.1%

+0.2%

+2.0%

2014 2015 2016 Q3 2017

Accelerated rental growth

Like-for-like evolution of the rents

1

  • Renewals: +0%; Indexation: +0.3%; Occupancy rate: +0.7%

2 5

  • Increase in occupancy rate (91.6% end-2016)
  • Renewals: +0.6%; Indexation:+0.9%; Occupancy rate: +0.5%

3

  • Acquisitions in Berlin

4

  • Acquisitions in Madrid & Barcelona

1 3 4 6 2 5 6

  • Longstanding high occupancy rate: 97% (vs 96.7% end-2016)
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Q3 2017 REVENUES 8

Investment activity: reinforcement in the strategic locations

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FONCIÈRE DES RÉGIONS 9 Q3 2017 REVENUES

SILEX2: A NEW DEVELOPMENT FOLLOWING THE SUCCESS OF SILEX1

Participate in the renewal of the 2nd French business district Work the portfolio to extract value and growth Mitigate the development risk and crystallise the value creation Launch of Silex2 new development > New tower of 30,900 m² (+15,600 m² extension) > Total cost: €166 million; ~6% yield on cost Share Silex 1 and 2 with ACM > Disposal of 49.9% of Silex1 and Silex2 to ACM > At an average yield of 4.7% 2001: Sale-and-leaseback with EDF > 2 buildings of 7,200 m² and 15,300 m² > Price: €22.1 million; 11% yield 2013-2017: Departure of EDF and development of Silex1 > Development-extension of 10,700 m² (+3,500 m²) > 100% let to BNP Paribas and Nextdoor

A longstanding partnership and development story in a prime location in Lyon Part-Dieu… …reaching a new step today: launch of Silex2 & financial partnership agreement

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FONCIÈRE DES RÉGIONS 10 Q3 2017 REVENUES

GERMANY RESIDENTIAL: CONTINUE TO SOURCE NEW ACQUISITIONS

€525 million1 of acquisitions

  • f which €149 million1 in Q3

In Berlin (84%), Dresden & Leipzig

High quality portfolio mostly in inner-city Berlin Significant rent reversion potential (+35%) Opportunities to develop new units

Acquisitions YTD - Key figures Strong growth potential: 3,550 units at €1,960/m² 4.4% yield post reletting of 9% average vacancy ~35% rent reversion potential +16,000 m² of potential new developments

1 €338 million & €97 million Group Share

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FONCIÈRE DES RÉGIONS 11 Q3 2017 REVENUES

HOTELS: ACQUISITION OF A NH PORTFOLIO IN GERMANY AND THE NETHERLANDS

4 NH hotels in Berlin, Hamburg, Amsterdam & Amersfoort

2017: acquisition of call options to buy the hotels 2018: exercise of the call options 4* city center hotels; 630 rooms Variable leases for 20 years with minimum guarantee

Key figures €111 million (€47 m Group Share) - €177 k/room 5.7% rental yield (5.1% on minimum guarantee) Strong profitability and growth potential: ~50% average Ebitdar Margin Average Daily Rate < €100

Berlin (99 rooms) Hamburg (127 rooms) Amsterdam (290 rooms) Amersfoort (114 rooms)

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FONCIÈRE DES RÉGIONS 12 Q3 2017 REVENUES

€949 MILLION DISPOSALS YTD (€601 MILLION GROUP SHARE)

Hermione & Floreal in Euromed Center – Marseille 23,800 m²; €92 million (€46 million Group Share) Germany Residential in NRW €200 million (€122 million Group Share) Victor Hugo - Issy-Les-Moulineaux 5,600 m²; €38 million 5.15% exit yield

Non-core & mature assets 8.4%

average margin vs last appraisal value

+36% value creation +17% margin +18% margin

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Q3 2017 REVENUES 13

New steps in the simplification of the group

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FONCIÈRE DES RÉGIONS 14 Q3 2017 REVENUES

HOTELS: MOVE PORTFOLIO UPMARKET & STRENGTHEN GROWTH PROSPECTS

> Portfolio: €3.0 bn1 (€1.5 bn Group Share) > 403 hotels; 37,950 rooms > 17 operator partners / 24 hotel brands

Foncière des Murs

1 Hotels only, excluding stake in FDM Management

Figures at end-June 2017 post acquisitions secured in June and realized since then (for €150 million and €75 m Group Share)

48% 15% 16% 12% 2% 2%

1st shareholder: FdR (50%, limited partner) > Portfolio: €1.3 bn (€0.3 bn Group Share) > 30 hotels; 6,282 rooms > 4 operator partners / 11 hotel brands

FDM Management

1st shareholder: Foncière des Murs (40.7%) Lease properties Operating properties (franchise/management contracts)

17% 77% 6%

Foncière des Régions: a leader in hotels in Europe through two major investment vehicles

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FONCIÈRE DES RÉGIONS 15 Q3 2017 REVENUES

HOTELS: MOVE PORTFOLIO UPMARKET & STRENGTHEN GROWTH PROSPECTS

A combined hotel portfolio of €4.3 bn1 (€1.8 bn Group Share)

> At June 2017 EPRA NNNAV > Early 2018 > Maintained control over FDM by Foncière des Régions (42%, limited partner) > 433 hotels; 44,232 rooms > 18 operators partners / 28 hotel brands > Increase exposure to hotels: 13.8% of total portfolio vs 13.4% at end-June 2017

68%

Portfolio upscaling

(% of upscale & midscale hotels)

25% Increased exposure to Germany, especially Berlin (% of the portfolio value)

34%

8% Reinforced value creation capacity

Merger of FDM with FDM Management

Asset management optimization Increased property development capacities

Germany 34% Belgium 10% Spain 14% France 39% Netherlands 2% Portugal 1%

Geographic breakdown post merger (by value)

Fixed leases 45% Variable leases 24% Management contracts (Ebitda) 31%

Hotels revenue breakdown post merger

1 Hotels only, excluding stake in FDM Management

Figures at end-June 2017 post acquisitions secured in June and realized since then (for €150 million and €75 m Group Share)

63%

Germany Before Berlin

15%

Before vs 16% before vs 29% vs 55%

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FONCIÈRE DES RÉGIONS 16 Q3 2017 REVENUES

SIMPLIFY THE GROUP STRUCTURE: DE-LISTING OF FDL

France Residential: a non strategic activity

Portfolio end-June: €371 million; 1.8% of FdR total portfolio Through FDL, listed subsidiary of FdR (at 61%) October 19th: transfer agreement on 38.6% of FDL share capital > With Cardif, Crédit Agricole Assurances & Generali Vie

Streamlining of the Group structure

> 70% in exchange of Foncière de Régions shares (1 FdR for 20 FDL) > 30% in cash (€4.65/share) Implied valuation: €4.21/share 9.5% discount on NAV1 November 2017: buyout offer followed by a squeeze out in January 2018 > On the 0.2% remaining free float (~100,000 shares) > Price to be proposed at €8.06 per share (3-month VWAP)

1 Valuation based on Foncière des Régions’ EPRA NNNAV at the end of June 2017 standing at €80.5 per share

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Q3 2017 REVENUES 17

Key takeaways

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FONCIÈRE DES RÉGIONS 18 Q3 2017 REVENUES

KEY TAKEAWAYS: A GOOD STEP TOWARDS FULL-YEAR TARGETS

Acceleration of the rental growth Success of the strategic positioning favouring key locations and developments Strong investment activity for a better quality portfolio Offices: focus on the development pipeline Residential & Hotels: reinforcement in Germany New major steps in the simplification of the group structure Unleash the growth potential

Silex2, Lyon 4* Park Inn Hotel, Alexanderplatz, Berlin Thaïs, Greater Paris

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FONCIÈRE DES RÉGIONS

FINANCIAL AGENDA

Q3 2017 REVENUES 19

Full-year 2017 results: 15 February 2018

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Q3 2017 REVENUES 20

Appendix

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FONCIÈRE DES RÉGIONS

Q3 2017 REVENUES: +2% LIKE-FOR-LIKE

Q3 2017 REVENUES 21

(€ million)

100% Group share

9-month 2016 9-month 2017 Change 9-month 2016 9-month 2017 Change Change % of (%) (%) (%) rent Like-for-like Offices - France 206.9 204.1

  • 1.4%

188.0 185.2

  • 1.5%

+1.0% 42% Offices - Italy 149.0 152.4 +2.3% 75.8 74.3

  • 1.9%

+0.9% 17% Residential - Germany 159.3 171.9 +7.9% 98.4 106.5 +8.2% +4.5% 24% Hotels in Europe 146.4 155.6 +6.3% 61.8 70.2 +13.6% +2.1% 16% Others (French Residential) 11.9 8.8 n.a. 7.3 5.4 n.a. n.a. 1% Total rent 673.5 692.8 +2.9% 431.3 441.6 +2.4% +2.0% 100%

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FONCIÈRE DES RÉGIONS

Q3 2017 INVESTMENTS: €1.5 BILLION IN STRATEGIC LOCATIONS

Q3 2017 REVENUES 22

Strengthening positions in major European cities

Investments 9-month 2017 already realized Investments 9-month 2017 secured, to be realized (€ million, including duties) Capex Capex Acquisitions Acquisitions Yield Acquisitions Acquisitions Yield 100% Group Share 100% Group Share 100% Group Share Offices - France 83 68 3 3 6.7% n/a Offices - Italy 40 21 165 86 5.5% 19 10 9.9% Residential - Germany 3 525 338 4.0% 28 18 5.1% Hotels in Europe 44 11 613 307 5.4% 71 36 5.7% Total 170 100 1 307 734 4.8% * 118 63 6.2%

* Potential yield on acquisition after delivery of Principe Amedeo, under development *

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FONCIÈRE DES RÉGIONS

Q3 2017 DISPOSALS: €949 MILLION WITH A 8.2% MARGIN

Q3 2017 REVENUES 23

Reduce exposure in non-core assets and non-strategic locations Crystallise value creation in mature assets

9-month 2017 (€ million) Disposals New New Yield Total Realized Disposals

(agreements as

disposals agreements Total Margin vs

  • f end of 2016

closed)

2017 2017 2017 2016 value 1 2 3 2 + 3 = 1 + 2 Offices - France 100% 78 135 124 259 7,7% 4,3% 214 Group Share 78 89 124 213 8,4% 5,3% 168 Offices - Italy 100% 77 115 26 140 2,4% 3,8% 192 Group Share 363 60 11 71 2,4% 3,8% 423 Residential - Germany 100% 22 165 96 262 19,4% 5,7% 187 Group Share 13 99 57 156 19,4% 5,7% 112 Hotels in Europe 100% 2 60 108 167 4,1% 6,2% 61 Group Share 1 26 49 75 4,2% 6,3% 27 Others 100% 36 80 41 121 1,2% 2,7% 116 Group Share 22 62 25 87

  • 0,1%

3,2% 84 Total asset disposals 100% 215 555 394 949 8,2% 4,8% 770 Group Share 478 336 266 601 8,4% 5,0% 813

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FONCIÈRE DES RÉGIONS

Paris 30, avenue Kléber 75116 Paris Tel.: +33 1 58 97 50 00 Contact Paul Arkwright Tel.: +33 1 58 97 51 85 Mobile: +33 6 77 33 93 58 paul.arkwright@fdr.fr

Q3 2017 REVENUES