BEFIMMO : Press releases

4ead66fa-bd04-4c19-aa97-dc029e976644.pdf Press release

Regulated information Embargo | 4 May 2016 | 5.40 PM

Interim statement of the Board of Directors for the period from 1 January 2016 to 31 March 2016

• Change in fair value of the portfolio of -0.33%

• EPRA earnings of €0.90 per share, in line with the outlook

• Net result of -€0.31 per share

• Net asset value of €54.65 per share

• Unchanged EPRA earnings and dividend outlook of the fiscal year

Table of contents

1. Property portfolio as at 31 March 2016 2

2. Financial report as at 31 March 2016 5

3. Befimmo share 7

4. Dividend forecast 8

5. Forthcoming publications 8

The Board of Directors of Befimmo SA met on 3 May 2016 to establish the consolidated

quarterly financial statements as at 31 March 2016.

1. Property portfolio as at 31 March 2016 Key figures of the property portfolio

   31.03.2016	31.12.2015
   Fair value of portfolio (in € million)	2 398.8	2 388.3
   Portfolio space	889 800 m²	889 800 m²
   Gross initial yield on properties available for lease	6.18%	6.19%
   Gross potential yield on properties available for lease	6.61%	6.58%
   Occupancy rate of properties available for lease	93.54%	94.15%
   Weighted average duration of leases	8.47 years	8.60 years
   Reversion rate on properties available for lease	-8.56%	-8.41%
   EPRA vacancy rate	7.01%	6.35%

   Construction, redevelopment and renovation projects

   Over the first quarter of the 2016 fiscal year, Befimmo invested €18.4 million in its portfolio. The main renovation and construction projects1 in progress are:

   • Gateway | 34,000 m² | Brussels airport: The construction works of the Gateway building, let for 18 years to Deloitte, are ongoing. Befimmo becomes owner of the building according to its development. The transaction (for a total amount of about €140 million) will be completed upon the handover of the building, expected for the fourth quarter of the fiscal year. As at 31 March 2016, €87 million have already been invested.

   • Brederode 9 - Namur 48 | 8,200 m² | Brussels CBD | Centre: The Brederode 9 - Namur 48 building is undergoing a major renovation for a total amount of around €15 million. This building will once again be available for rent around mid-2016. It is already attracting serious interest for take-up. Brederode 9 was rated "Very Good" for the BREEAM certification in the Design phase.

   • Guimard | 5,400 m² | Brussels CBD | Leopold district: The full renovation works of the Guimard building for a total amount of around €12 million are ongoing. This building benefits from a strategic location in the heart of the Leopold district in Brussels, and will be ready to welcome new occupants as from the second quarter of the 2017 fiscal year. Befimmo is aiming for a BREEAM "Excellent" certification in the Design and Post Construction phases for this project.

1 For more information, please consult Befimmo's Annual Financial Report 2015 (www.befimmo.be).

Change in fair values2 of the property portfolio

Offices	Change over the quarter(a)	Proportion of portfolio(b) (31.03.2016)	Fair value (31.03.2016)	Fair value (31.12.2015)
	(in %)	(in %)	(in € million)	(in € million)
Brussels centre (CBD)	-0.27	51.0	1 223.9	1 226.0
Brussels decentralised	-0.53	3.8	91.4	91.8
Brussels periphery	-0.52	6.1	145.2	144.7
Flanders	-0.65	20.4	490.1	493.2
Wallonia	-0.63	7.8	187.1	187.9
Luxembourg city	1.11	3.7	87.8	86.8
Properties available for lease	-0.35	92.8	2 225.4	2 230.4
Properties that are being constructed or developed for own account in order to be leased	0.04	7.2	173.0	157.4
Investment properties	-0.33	100.0	2 398.4	2 387.8
Property held for sale(c)	-9.94	0.0	0.4	0.5
Total	-0.33	100.0	2 398.8	2 388.3

(a) The change over the quarter is the change in fair value between 1 January 2016 and 31 March 2016 (excluding the amount of investments).

(b) The proportion of portfolio is calculated on the basis of the fair value of the portfolio as at 31 March 2016.

(c) The building was sold after closing of the first quarter at a price which was in line with its fair value.

As at 31 March 2016, the fair value of Befimmo's consolidated portfolio was €2,398.8 million, as against €2,388.3 million as at 31 December 2015. This change in value incorporates the investments carried out in the portfolio over the past quarter, and the changes in fair value booked to the income statement.

Excluding the amount of the investments, the change in fair value of the portfolio amounted to

-€7.9 million (-0.33 %) over this first quarter of the fiscal year.

This change in the fair value of the portfolio is due mainly to the declining value of properties approaching the end of their leases, while the fair value of buildings that still have secure income over the long term remained stable during the quarter.

2 These values are established in application of the IAS 40 standard which requires investment properties to be booked at "fair value". Fair value is obtained by deducting the average costs for transactions established by independent real-estate experts, from the "investment value". These costs amount to (i) 2.5% for property worth more than €2.5 million and (ii) 10% (Flanders) or 12.5% (Wallonia and Brussels) for property worth less than €2.5 million.

Occupancy rate3, weighted average duration of leases and signed lease agreements

The occupancy rate of the properties available for lease is 93.54% as at 31 March 2016 (compared with 94.15% as at 31 December 2015). For all the investment properties4, the occupancy rate as at 31 March 2016 was 91.93% (compared with 92.64% as at 31 December 2015).

As at 31 March 2016, the weighted average duration of current leases amounts to 8.47 years compared with 8.60 years as at 31 December 2015.

During the first quarter of the fiscal year, Befimmo signed new leases and lease renewals for space measuring some 15,600 m², which is a solid improvement compared with 5,400 m² signed during the first quarter of the 2015 fiscal year.

Befimmo has concluded a nine-year extension (until 2027) of the lease with VDAB in the Empereur building (6,000 m²) on equivalent financial terms. In the Schuman 3 building, located in the heart of the Brussels Léopold district, Befimmo signed two new leases for a total space of 2,500 m². The building is now approximately 85% occupied. In the Grand Duchy of Luxembourg, in the Axento building, more than half of the space vacated in January 2016 has already been re-let.

Overall rental yield

Properties available for lease Investment properties(c)

31.03.2016	31.12.2015	31.03.2016	31.12.2015
Gross initial yield(a)	6.18%	6.19%	5.88%	5.90%
Gross potential yield(b)	6.61%	6.58%	6.35%	6.32%

(a) Gross initial yield = current rents (including the rent for space let but for which the lease has yet to begin)/deed-in-hands value.

(b) Gross potential yield = current rents (including the rent for space let but for which the lease has yet to begin), plus the estimated rental value of vacant space/deed-in-hands value.

(c) Taking into account the properties that are being constructed or developed for own account in order to be leased.

3 Occupancy rate = current rents (including the rate for space let but for which the lease has yet to begin)/(current rents + estimated rental value for vacant space).

4 This includes properties that are being constructed or developed for own account in order to be leased.