AFFINE : 1H15 - Back to profit

Paris, 29 July 2015, 6:00 p.m.

2015 consolidated half-year results

BACK TO PROFIT

RETURN OF NET PROFIT

·(+)€1.3mdropincorporateexpenses

·(+)Costofdebtdownto2.7%

·(+)Significantreductioninfairvaluedeclines

·(-)8.2%dropingrossrentalincome

EPRAEARNINGS ALMOST UNCHANGED

SIGNIFICANT IMPROVEMENT IN OPERATING CASH FLOW

CHANGE IN PORTFOLIO

·Increaseinaverageleasetermto5.7years

·€13.4m in acquisitions, improvements and developments

·€13.1m from disposals

EPRA NAV PERSHARE: €22.2

The Board of Directors of Affine, meeting on 28 July 2015, approved the summarised half-yearly consolidated financial statements for the period ending 30 June 2015. Limited review procedures are in the process of finalisation.

1) EARNINGS

Consolidated net profit for H1 2015 totalled €5.6m, compared with a loss of €6.4m in H1 2014.

This change is due to:

·An 8.2% drop in gross rental income, mainly explained by tenant departures from the Tremblay-en-France and Mer sites, renegotiated leases for which the company preferred to extend the fixed term of the leases, and disposals. Last year, service charges included a delay in expense rebilling, which led to a 12.1% drop in net rents. Adjusted for this factor, net rents would have dropped by 6.0%.

·Amajorcontractionofcorporateexpenses(-25.8%),mostlyduetothedisposalofConcerto,andfinancialcosts(-12.5%),

·Clear improvement in fair value changes: +€1.9m versus -€2.3m for financial instruments; -€7.0m (specifically on logistics assets) versus -€9.4m for properties, partially offset by the capital gain from the disposal of office properties in Lyon.

·UpturninthecontributionofBanimmo(49.5%

owned by Affine) which rose from -€4.1m in H1

2014 to -€0.3m in H1 2015.

EPRA earnings excluding Banimmo, which measures the recurring consolidated earnings (Group share) of Affine without Banimmo, remain flat at €9.7m. After including Banimmo, it stands at €7.4m versus €7.9m in 2014 (-5.8%).

Cash flow dipped from €11.9m to €11.2m due to the change in rental income. WCR showed sharp improvement (€1.8m vs -€11.2m) thanks mainly to the payment in H1 2014 of the VAT on an acquisition and the disposal of Concerto at the end of 2014; operating cash-flow rose from €5.7m in H1 2014 to

€17.1m in H1 2015.

2) ACTIVITY

The EPRA occupancy rate fell to 88.5% versus 90.2% at the end of 2014, due to the departure of one tenant from Tremblay-en-France.

2015 Half-Year Results 1

During the half-year, Affine signed 29 new leases covering a total surface area of 14,400 m2and total annual rent of €2.1m. In addition, 27 tenants cancelled their leases or left their premises, representing a total surface area of 23,400 m2and annual rent of €3.0m. Lastly, 22 tenants renegotiated their rents for an amount of €3.1m. Overall, the impact should represent a loss of approximately €0.5m in rental income for H1 2015, or €0.9m for the full year 2015.

During the period, the company implemented the announced strategy of resuming investments through balanced development between Paris/Paris region and the major regional cities. A total investment of

€13.4m was made through acquisitions,

developments and works to enhance the quality of investment properties, while €13.1m was gained from the disposal of mature or very small assets.

3) NETASSETVALUE

At the end of June 2015, the fair value of investment properties was €570m (excluding transfer taxes), down 1.2% on a like-for-like basis compared with the end of 2014.

By reincorporating Banimmo properties into the scope of consolidation, the fair value (including transfer taxes) of the Group's total portfolio at the end of June 2015 totalled €988m (excluding underlying capital gains on properties under development).

EPRA Net Asset Value (excluding transfer taxes), after deducting quasi-equity (PSL: perpetual subordinated loan notes) and after adjustments to the fair value of derivatives and deferred taxes, was down 3.4% to

€228.1m due in particular to distributions in 2015 (dividends and remuneration of BRS [bonds redeemable in shares] and PSL bonds). NAV per share (excluding treasury shares and after deduction of PSL and conversion of BRS bonds) went from

€23.0 at year-end 2014 to €22.2.

Finally, EPRA triple net NAV (excluding transfer taxes), which includes the fair value of hedging instruments, deferred tax and the difference between accounting

values and the fair value of the debt (excluding

Banimmo), amounted to €25.0 per share versus

€25.4 at year-end 2014.

4) FINANCING

€25.6m in new loans were set up during the period and the company paid off a total of €35.8m.

At 30 June 2015, the financial debt, net of cash, increased slightly to €347m (+0.7%). The LTV ratio (net bank debt/market value of buildings including transfer taxes, plus property inventories and net position of associates) was 50.8% versus 49.3% at the end of 2014.

The average cost of debt fell to 2.7% hedge included (1.6% hedge excluded), compared with 3.0% in 2014. The average term of debt was 5.5 years and there are no significant debts maturing within the next few years.

5) OUTLOOK

Barring a major external event, the trends recorded in the first-half are expected to be confirmed for the full year. Affine will continue its non-strategic assets disposal policy while resuming selective investments in the Paris region and in six major regional cities to preserve the potential of rental income and improve the portfolio quality.

6) CALENDAR

·21 October 2015: Third quarter revenues

·February-March 2016: 2015 annual revenues and earnings

·April 2016: First-quarter revenues

·April 2016: Annual General Meeting

·May 2016: Dividend payment

2015 Half-Year Results 2

(1) Based on IFRS standards and EPRA recommendations.

(2) Current EBITDA represents the current operating profit excluding current depreciation and amortisation costs. As at H1 2014, 2014 and H1 2015, this amount did not include the impairment of buildings in inventory of the property development business of €0.4m, -€1.0m and -€0.1 respectively, which is recognised under

other income and expenses.

(3) Net profit from activities that have been discontinued or are being sold, other financial income and expenses.

EPRA EARNINGS

(€m) H1 2014 2014 H1 2015

Net profit - group share (6.4) (11.0) 5.6

Value adjustments for investment and development properties

9.8 24.3 6.9

Net profit or loss on disposal (0.2) (3.2) (1.4)Goodwill adjustment - - -Fair value adjustments of hedging instr. 2.3 2.3 (1.9)Non-current tax, deferred and exit tax 0.4 0.6 0.0

Adjustments for associate 1.9 3.4 (1.8)

Minorityinterestsinrespectoftheabove---EPRAearnings(4)7.916.57.4(4) The European Public Real Estate Association (EPRA) issued a guide on performance measures in September 2011, supplemented in January 2014 by

additional recommendations. Additional guidances were released in January 2014. As detailed in the EPRA adjustments note, EPRA earnings essentially exclude

the effects of fair value changes and gains or losses on sales.

2015 Half-Year Results 3

EPRAEARNINGS (CURRENT/NON-CURRENT PRESENTATION -DIRECT METHOD)

(5) pro forma

ABOUTAFFINEGROUP

Affine is a real estate company specialised in commercial property. At the end of June 2015, it directly owned 55 buildings with a total value of €570m (excluding taxes) at the end of June 2015, for a total floor area of 528,500 m2. The firm owns office properties (53%), retail properties (22%) and warehouses and industrial premises (25%). Its activity is distributed more or less equally between Ile-de France and the other French regions.

Affine is also the major shareholder (49.5%) of Banimmo, a Belgian property repositioning company with operations in Belgium and France. At the end of June 2015, Banimmo had total assets of 21 office and commercial buildings, with a value of €384m (including transfer taxes).

Total Group assets are €988m (including transfer taxes).

In 2003, Affine opted for French real estate investment trust (SIIC) status. The Affine share is listed on NYSE Euronext Paris (Ticker: IML FP/BTTP.PA; ISIN code: FR0000036105) and admitted to the deferred settlement system (long only). It is included in the CAC Mid&Small, SIIC IEIF and EPRA indexes. Banimmo is also listed on NYSE Euronext.

To find out more:www.affine.fr.Follow our news thread on: https://twitter.com/Groupe_Affine

CONTACT

INVESTORRELATIONS

Frank Lutz

+33 (0)1 44 90 43 53 -frank.lutz@affine.fr

PRESSRELATIONS

RPpublics - Alexandra Richert

+33 (0)1 45 23 55 01 -alexandra.richert@rppublics.com

2015 Half-Year Results 4

Appendice to the press release H1

H1 2015 IN BRIEF

Key figures 6

Key events 7

STRATEGY

Strategy focus on 4 areas 8

PROPERTY

Breakdown 8

Fair value 8

ACTIVITY FOR THE PERIOD

Affine 10

Banimmo 12

FINANCIAL SUMMARY

Consolidated earnings 14

Consolidated cash flow 15

Consolidated balance sheet 15

Detailed consolidated statements 18

EPRA Best Practice Recommendations 20

Glossary 23

The financial statements have been subjected to a limited audit review.

Affine - 2015 Half-Year results 5

H1 2015 IN BRIEF ]

Key figures

NB: The Banimmo sub-group is consolidated under the equity method. Banimmo's accounts are currently under limited audit review.

(1) In H1 2014, 2014 and H1 2015, this amount does not include the depreciation of buildings in inventory of the property development business of €0.4m, -€1.0m and -€0.1m respectively, which is recognised under other income and expenses.

(2) At historic cost, with full ownership or under a finance lease agreement.

(3) Fair value of investment properties, including property held for sale, including or excluding transfer taxes. The transfer tax rate used for buildings is 1.8%, 6.2% or 6.9% depending on their status.

(4) Including BRS (bonds redeemable in shares) and after deducting Perpetual Subordinated Loan notes (PSL). (5) Including hedging costs.

(6) After dilution due to BRS.

Affine - 2015 Half-Year results 6

Key events

January

Getting by Banimmo and McArthurGlen of the planning permission for the first phase of the construction of an outlet center in Ghent (Belgium).

Signed a 12-year fixed lease on a 2,750 sqm office building in Lyon (69).

February

Private placement of bonds by Banimmo for a total amount of €44m with a term of 5 years.

March

Signature by Concerto Buchères 3 (40% owned by Affine) of a lease with Petit Bateau for a 43,500 sqm logistics platform near Troyes (10).

April

Disposal of 3,828 sqm of industrial premises in
Palaiseau (91).
Disposal by Banimmo of 7,300 sqm of offices under construction for Deloitte in Ghent (Belgium).

June

Disposal of 3,472 sqm of offices in Lyon (69). Completion of 2,862 sqm of offices in Toulouse (31). Kaufman & Broad enters the capital of Urbismart to
support the development of the company specialized in
urban logistics, and founded in 2014 by Affine.

July

Signature of the acquisition of 1,535 sqm of offices in
Clichy- la-Garenne (92).

STRATEGY ]

Strategy focus on 4 areas

It is defined as:

·asustainedeffortaimedatupgradingthepropertiesdirectlyownedbyAffine:improvingtheirqualityintermsofsustainabledevelopment,payingattentiontothecomfortofitstenantstherebygeneratingimprovedrentstabilityandoccupancylevels,andoptimizingmanagementthroughanefficientinformationsystem;

·investmentsfocusingonneworrecent,accreditedbuildingswhicharemedium-sizedcomparedtotheirmarket(forexample,€10mto€20mforoffices),orensuringhighrentalincomewhilealso

containing a potential for value creation due to their location or their rental situation;

·balanceddevelopmentbetweentheParisregion,representingabouthalfoftheproperties,andmajorregionaltargetcitiesbenefittingfromgoodnationalandinternationaltransportservices(TGVhigh

speed train or aeroplane) and a strong economic dynamic: Bordeaux, Nantes, Lille, Lyon, Marseille, Toulouse;

·ItsBanimmosubsiduarycontinuesitsrepositioningonmorebuoyantsegments(specificallyresidential)intheBelgianmarketandthedevelopmentofitsshoppingcentresinFrance.

Affine - 2015 Half-Year results 7

PROPERTY ]

Breakdown

Affine owns 55 properties with a total value of €604m, with a total surface area of 528,500 sqm.

Breakdown of value by region Breakdown of value by type

1.4%

0.0%

24.9%

57.5%

Métropole du Grand Paris Other Ile-de-France French Regions

Euro zone excl. France

Métropole du Grand Paris: Paris + Hauts-de-Seine + Val d'Oise + Val-de-Marne

Offices

Office premises represent property of €323m including transfer taxes. In particular, it contains assets such as the 7,800 sqm Traversière tower, close to Gare de Lyon and occupied by SNCF (the French national railway company), the Lille Europe tower (19,000 sqm) over the Euralille train station and the Les Amarantes buildings in Toulouse (5,800 sqm).

Retail

The commercial properties consist chiefly of city-centre retail areas such as Les Jardins des Quais in Bordeaux (25,000 sqm) and Les 7 Collines shopping centre in

Fair value

Fair value of directly owned properties

The fair value (including transfer taxes) of the 55 properties stood on 30 June 2015 at €604m compared with €610m at the end of 2014.
Excluding transfer taxes, the value of the properties went from €575m at the end of 2014 to €570m at the end of 2015. This change resulted from:

Offices

Retail

Warehouses and industrials

Other

Nîmes (14,000 sqm) giving a total of 66,900 sqm. The fair value of this sector is €131m including transfer tax.

Warehouses and Industrials

The logistics properties of the Affine group include several types of platform, most of these being bi-modal (rail/road), offering surface areas of up to almost
39,000 sqm for the warehouse in Saint-Cyr-en-Val.
These properties are appraised at about €150m including transfer tax and represent a total surface area of 320,400 sqm.

·disposalstotalling€13.1m,withanetcapitalgainof€1.1m;

·a€7.0mdecreaseinfairvalueofbuildingsintheportfolioonalike-for-likebasisattheendoftheperiod;

·€6.0mofinvestmentsforimprovementofexistingproperties;

·€7.5mofacquisitions.

Affine - 2015 Half-Year results 8

Change in the value of buildings, excluding transfer taxes (€m)

575 (13)

+1 (7) +6

+7 570

31/12/2014 Disposals Net capital gain FV change Capex Dev. Acquisitions 30/06/2015

The drop of €7.0m on a like-for-like basis in the portfolio's fair value (that is 1.2%) is the result of:

·a0.8%decreaseduetothefallinmarketrents

(ERV).

·a1.3%increaseduetoloweryieldratesusedbysomeappraisers,

·aresidual1.7%decrease(workstobecarriedout,reversion,etc.).

The average yield resulting from appraisals is 7.3%. A downward or upward change of 25 basis points in this rate would lead to an increase or a decrease respectively of the portfolio's value of €19.2m.

Fair value of total property

By including the buildings owned by the associates, i.e. Banimmo, the fair value (including transfer taxes) of total property stood at the end of June 2015 at €988m compared with €945m at the end of 2014.

Breakdown of value by region Breakdown of value by type

26.6%

15.2%

6.9%

36.3%

Métropole du Grand Paris Other Ile-de-France French Regions

Euro zone excl. France

Offices

Retail

Warehouses and industrials

Other

Affine - 2015 Half-Year results 9

ACTIVITY FOR THE PERIOD ]

Affine

Headline rents

Rents of leases in effect at 30 June 2015 accounted for €41.1m on an annual basis, a decrease of 4.0% on a like-for-like basis compared with 31 December 2014,
resulting essentially from the departure of a tenant on the site of Tremblay-en-France.
After taking into account acquisitions and disposals, it went down 5.2%.

Change in headline rents (€m)

43.3 (0.0) (1.0)

(1.7)

0.4 41.1

31/12/2014 Refurbishment Disposal Like-for-like Acquisition 30/06/2015

Over the six-month period, Affine signed 29 new leases concerning a total surface area of 14,400 sqm and total annual rents of €2.1m (of which 1 lease related to the acquisition in Toulouse). Furthermore, 27 tenants cancelled their leases or quit their premises, representing in total a surface area of 23,400 sqm and annual rents of €3.0m (of which €1.3m for Tremblay- en-France and €0.2m related to a disposal). Finally, 22 leases were renegotiated for an amount of €3.1m, for
which priority has been given to extending the minimum period of the leases (impact on an annual basis: -€0.4m). Overall, the impact should come to a loss in rent of about €0.9m in 2015 or €0.5m in the second half of 2015.
The average term of leases and their fixed term are 5.7 and 3.2 years respectively (compared to 5.1 and 2.8 years in 2014).

Schedule of leases (€m)

45

40

35

30

25

20

15

10

5

0

31/12/14 31/12/15 31/12/16 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21 31/12/22 31/12/23 31/12/24

End of lease Fixed term

Among the top thirty tenants, who account for 61% of total rents, none reaches 10%, thus avoiding any concentration of risk on rental income. The largest
tenants are: SNCF, TDF, the Corbeil-Essonnes municipal authority, and the French army.

Affine - 2015 Half-Year results 10

By business sector of rents Lease breakdown

Services

5%Retail

Transportation

5%

Elec. Télécom

8%

Industry and construction

Agro-food, textiles

100%

80%

60%

40%

20%

Others

Next 20

Top 10 tenants

Other 0%

Occupancy rate

As many buildings are occupied by multiple tenants, the target occupancy rate ranges between 93% and 95%. Affine's strategy of focusing on investments in high added-value buildings may lead the company to acquire properties with occupancy rates temporarily below this average.
At 30 June 2015, Affine's EPRA (financial) occupancy rate (excluding buildings currently being renovated: one
building in Gennevilliers, one in Lyon and three buildings in the selling closing process in Paris, Troyes and Bron) decreased to 88.5%, compared with 90.2% at the end of 2014 as a result of the departure of one tenant from the Tremblay-en-France site.
56% of the Group's financial vacancy is due to 4 properties: offices in Trappes, warehouses in Tremblay- en-France, and a shopping centre in Nevers which is currently being marketed.

EPRA Occupancy rate* Occupancy rate by type and regions

95.4% 94.0% 94.5% 94.0% 92.2%

87.7% 89.0% 87.8% 90.9% 90.2% 88.5%

Total

88.5%

Offices

86.8%

Retail

85.0%

Warehouses and industrials

93.5%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H1

2015

* Financial occupancy rate excluding buildings being refurbished.

Investments & Disposals

Refurbishment

The renovation of the Tangram building, a 5,700 sqm office building located at boulevard des Tchécoslovaques in Lyon, is about to be completed by Q3. In this context, the Group obtained the DEFFIBAT grant issued by the ADEME energy and environment agency. The purpose of this plan is to bring out the best initiatives in the Rhône-Alpes region both in terms of low energy consumption and in terms of environmental and health issues (quality of life and use, water, waste, etc.). The Group is aiming for a BBC Renovation Effinergie endorsement. Half of the building has already been let to ISCOM, an educational institution, since the beginning of this year, with the rest under marketing.
Furthermore, Affine undertakes important works on the air conditioning and renovation of the common area on an office building of more than 20,000 sqm located in EuraLille.

Acquisitions

After the signing of the contract in November, Affine finalized the acquisition in June of a 2,900 sqm office building in Toulouse, from the GA Group, for the sum of
€7.5m (including transfer taxes).
This four-level building (basement to ground floor + 2) with 19 outdoor parking spaces and 73 parking spaces in the basement was completed in June.
The building is 81% leased by Dalkia, a leading provider of energy services in France. It receives Dalkia teams from its regional department in south-western France

Affine - 2015 Half-Year results 11

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