Affine R E : FY16 - 2016 full-year results

Paris, 3 March 2017, 07:00 a.m.

2016 consolidated annual results

NET PROFIT UP TO €5.5M

• (+) Like-for-like rents increase (+1.0%)

• (-) Impact of disposals (rents: -11.2%)

• (+) Improvement of occupancy rate (+1.7 point)

• (+) Cost of debt down to 2.3%

• (=) Stability of fair value

• (-) Impact of Banimmo (€-7.6 m)

  EPRAEARNINGS (EXCLUDING BANIMMO)DOWN TO €11.7M LTVSTABLE AT 46.4%(-0.2POINT)

  CHANGE IN PORTFOLIO

• €22.6m acquisitions and refurbishments (potential rent: €2.5m)

• €17.9m disposals

• €54m pipeline of committed investments and controlled projects (annual potential rent: €4.1m)

EPRA NAV PERSHARE: €21.0 EPRA NNNAV PERSHARE: €24.0

DIVIDEND OF €1.0PER SHARE (*)

(*) Will be submitted to the vote of the General Meeting of 27 April 2017

The Board of Directors of Affine, held on 28 February 2017, approved the individual and consolidated financial statements as at 31 December 2016. The audit procedures are in the process of finalisation.

1. EARNINGS

   The 2016 results reflect the strategy implemented to provide the company with a high-quality property portfolio: disposals of non-strategic assets, which were significantly increased in 2015 to take the opportunity of good market conditions, are entailing a significant decrease in gross rental income, whilst buildings acquired on a turnkey basis (VEFA) will yield rents gradually.

   Consolidated net profit for the year amounts to

   €5.5m versus €0.4m in 2015:

   • Rents increased on a like-for-like basis by 1.0%, but disposals made in 2015 and 2016 totalling

     €113m dragged down the gross rental income of 11.2% compared to 2015.

   • The contribution of capital gains from disposals and fair value variations in buildings is nil, while the previous year was affected by capital losses

     from disposals of a significant proportion of logistics assets (€7.2m).

   • Financial costs continue to improve (€7.0m versus €9.1m) resulting from both reduction of debt and drop in financing costs.

   • A negative contribution of Banimmo participation (which is 49.5% owned by Affine), has gone from -

     €16.4m to -€7.6m. (see Banimmo's press release).

   • Finally, a few items have negatively impacted the earnings: a decrease of €1.2m in operating profit in extinguishing financial lease, €0.6m in operating expenses and an increase of €1.7m in income tax.

     The change in EPRA earnings, a measurement of Affine's consolidated recurring earnings (group share), follows the decrease of the gross rental

     income, with a fall from €17.4m to €11.7m excluding Banimmo, and from €13.3m to €7.1m, including Banimmo.

     For the same reasons, funds from operations dropped from €21.9m to €14.3m. Given the stability of WCR (compared with a €3.2m decrease in 2015), the operating cash flow declined from €26.3m to

     €22.4m.

     The Board of Directors decided to recommend that the Annual General Meeting set the amount of the dividend per share payable for the financial year at

     €1.0.

2. ACTIVITY

   Rental activity was buoyant and the EPRA occupancy rate improved from 85.8% at year-end 2015 to 87.5%.

   Over the course of the year, Affine signed €2.3m of new leases, versus €1.1m of expired leases. Renegotiations concerned a total of €2.9m of annual rent (impact for the full year: -€0.1m). These changes should lead to an increase in rents of €0.7m in 2017. Furthermore, tenants giving notice of their departure will have an impact of €0.8m in 2017. Finally, two tenants may leave in 2017 and generate a drop of

   €0.5m for the year.

   For the period, the renewal of the portfolio and its refocusing towards office and retail properties have been pursued by:

   • a total of €22.6m of investments through acquisitions and refurbishments to upgrade the quality of assets. Of this total, an amount of

     €17.9m was deployed in acquiring two new buildings in Clichy and Meudon, as well as four additional floors in the Lilleurope tower. In addition, Affine signed turnkey projects (VEFA) and managed projects for a total pipeline of investments worth €54m.

   • the disposal of mature, small assets located outside target areas or building dedicated to logistics amounted to €17.9m.

3. NETASSETVALUE

   At the end of December 2016, the fair value of investment properties was €519m (excluding transfer taxes), down 1.0% on a like-for-like basis versus the end of 2015.

   Including the properties of Banimmo (transfer taxes included), the Group's total assets amount to

   €791m.

   EPRA Net Asset Value (excluding transfer taxes, after deducting PSLs and after adjustments to the fair value of derivatives and deferred taxes), fell 2.8% to

   €215.6m due to the distributions in 2016 (dividends

   and payment of the BSR bonds and PSL) and losses of Banimmo (-€7.6m). NAV per share (excluding treasury shares and after conversion of BSR bonds), dropped from €21.6 at year-end 2015 to €21.0 (-2.7%).

   Lastly, EPRA NNNAV (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, amounted to

   €24.0 per share versus €24.4.

4. FINANCING

   €50.2m of new loans were taken out during the period and the company paid off a total of €56.8m.

   At 31 December 2016, the financial debt, net of cash, remained stable at €280m (-1.4%). The LTV ratio (net bank debt/market value of buildings including transfer taxes, plus property inventories, plus net position of associates) was 46.4% versus 46.6% at the end of 2015.

   The average cost of debt fell from 2.5% to 2.3%. The average term of debt was 5.3 years. There are no significant amount of debt maturing in the next few years.

5. OUTLOOK

   Over the last 18 months, the volume of investments deployed or committed is already over €100m. Said investments should ultimately generate an annual rent of €8.5m, €2.4m of which is already recorded in the 2016 accounts (corresponding to an annual potential rent of €4.4m).

   Affine is continuing its strategy to renew and streamline the portfolio (essentially office buildings) through a balanced development between Paris Métropole and the six main regional urban areas (Bordeaux, Lille, Lyon, Marseilles, Nantes and Toulouse), in a highly-competitive context.

   As for Banimmo, it must revitalise its activities in Belgium by relying on land bank, thereby enabling the development of 290,000 sqm and pursuing the development of city centre shopping centres in France.

   Finally, Affine will endeavour to integrate technological developments into the property sector in services for its clients/tenants (renting, new methods for utilising workplaces, etc.).

6. CALENDAR

• 19 April 2017: First-quarter revenues (after market)

• 27 April 2017: Annual General Meeting

• May 2017: Dividend payment (€1.0*)

• July 2017: 2017 half-year revenues and earnings (after market)

• 18 October 2017: Third quarter revenues (after market)

CONSOLIDATED EARNINGS

1. Based on IFRS standards and EPRA recommendations.

2. Recurring EBITDA represents the profit from recurring operations excluding current depreciation and amortisation costs. In 2014, 2015 and 2016, this amount does not include the impairment of buildings in inventory of the property development business of -€1.0 m, -€0.1 m and -€0.2 m 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(INDIRECTMETHOD)

   (€m)	2014	2015	2016
   Net profit - Group share	(11.0)	0.4	5.5
   Value adjustments for investment and	24.3	(3.8)	(0.1)
   development properties
   Net profit or loss on disposals	(3.2)	7.2	0.6
   Goodwill adjustment	-	-	-
   Fair value adjustment of hedging instruments	2.3	(2.1)	(1.1)
   Non-current tax, deferred and exit tax	0.6	0.1	0.6
   Adjustments for associates	3.4	11.4	1.7
   Minority interests in respect of the above	-	-	-
   EPRA earnings (4)	16.5	13.3	7.1
   EPRA earnings (4)(excluding Banimmo)	18.3	17.4	11.7

4. EPRA is a trade association of listed European real estate companies, listed on the stock market. In November 2016, this association updated a guide on

performance measurement guide. As detailed in the EPRA adjustments note, EPRA earnings essentially exclude the effects of fair value changes and gains or losses on sales.

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

ABOUTAFFINE

Affine is a real estate company specialising in commercial property. At the end of 2016, it directly owned 43 buildings with a total value of €519m, excluding taxes, for a total floor area of 358,200 sqm. The firm owns office properties (66%), retail properties (23%) and warehouses and business premises (11%). Its assets are distributed more or less equally between Ile-de France and other regions in France.

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 December 2016, Banimmo had total assets of 18 office and commercial buildings, with a value of €238 m (transfer taxes included).

Total Group assets are €791m (including transfer taxes).

In 2003, Affine opted for French real estate investment trust (SIIC) status. Affine's shares are listed on NYSE Euronext Paris (ticker: IML FP/BTTP.PA; ISIN code: FR0000036105) and eligible for the Deferred Settlement Service (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/en/. 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

Dentsuaegis - Alexandra Richert

+33 (0)1 41 16 42 67 - alexandra.richert@dentsuaegis.com