Befimmo : Interim statement as at 31 March 2015

Press release

Regulated information

Embargo | 13 May 2015 | 5.40 PM CREATING VALUE IN

REAL ESTATE

Interim statement of the

Board of Directors for the period from 1 January 2015 to 31 March 2015

 Acquisition of the Gateway project (34.000 m² off-plan)

 EPRA earnings of €1.01 per share, in line with the outlook

 Net asset value of €55.04 per share

 Stable fair value of portfolio (+0.08%)

Table of contents

1. Key event of the quarter ..................................................................................................... 2

2. Major renovation and construction projects...................................................................... 2

3. Property portfolio as at 31 March 2015 ............................................................................. 3

4. Financial report as at 31 March 2015 ................................................................................. 6

5. Befimmo share .................................................................................................................... 9

6. Dividend forecast ................................................................................................................ 9

7. Forthcoming publications ................................................................................................. 10

 The Board of Directors met on 11 May 2015 to establish the consolidated quarterly financial statements as at 31 March 2015.

1. Key event of the quarter

Acquisition of the Gateway project (Brussels Airport District)

On 10 March 2015, Befimmo concluded an agreement with the developers Codic and Immobel for the acquisition of the Gateway project (34,000 m² off-plan).
This project represents an investment of about €140 million, in line with the fair value determined by an independent real-estate expert and with market yields (initial yield of 4.65%). The transaction will be completed upon the handover of the building, expected before the end of 2016, when the fixed- term lease of 18 years concluded with Deloitte will start.
As of the start of the lease the EPRA earnings per share should increase by approximately €0.18 on
an annualised basis, according to the outlook published in the Annual Financial Report 2014.
The acquisition was completed on 27 April 2015 after the close of the first quarter of the fiscal year. For more information, please see the press releases of 10 March 2015 and 27 April 2015 on the Befimmo website (www.befimmo.be).

2. Major renovation and construction projects

Befimmo continually invests in its portfolio to meet the needs of its tenants and to keep its properties at a high level of quality and attractiveness, for the purpose of ensuring the highest possible occupancy rate in its portfolio.
Over the first quarter of the 2015 fiscal year, Befimmo invested €2.54 million in its portfolio. The main renovation and construction projects in progress are:

 Guimard | Brussels CBD | Leopold district: After the end of the current lease, in late 2015, Befimmo will begin major renovation work in the Guimard building for a total amount of around €12 million. The permit is being applied for. Befimmo is aiming for a BREEAM "Excellent" certification in the Design and Post Construction phases.

1 For more information on this renovation project, please see the Annual Financial Report 2014, published on the

Befimmo website (www.befimmo.be).

2 For more information on this construction project, please see the press release of 16 April 2015, published on the

Befimmo website (www.befimmo.be).

3. Property portfolio as at 31 March 2015

Property key figures

Change in fair values3 of the property portfolio

(a) The change over the quarter is the change in fair value between 1 January 2015 and 31 March 2015 (excluding the amount of the investments).

(b) The proportion of portfolio is calculated on the basis of the fair value of the portfolio as at 31 March 2015.

3 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.

As at 31 March 2015, the fair value of Befimmo's consolidated portfolio was €2,289.5 million, as against €2,285.2 million as at 31 December 2014. This change in value incorporates the renovation works 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 fair value of the portfolio rose by €1.7 million (+0.08%)
over this first quarter of the fiscal year.

Rotation of real-estate experts

Pursuant to the Royal Decree of 13 July 2014 on B-REITs, since the mandates of the experts, JLL, DTZ- Winssinger & Associés and PricewaterhouseCoopers, expired on 31 December 2014, new three-year valuation mandates were given from 1 January 2015 to JLL and CBRE, distributed as follows:

 JLL values the part of the Befimmo and Fedimmo property portfolio on long or potentially long leases (i.e. let for > 9 years in Brussels and its hinterland and > 6 years in the regions);

 CBRE values the part of the Befimmo and Fedimmo property portfolio mostly let under conventional 3/6/9-year leases.

JLL has the task of coordinating these valuations.

Comment on changes in values over the quarter

This rotation of experts within the Befimmo consolidated portfolio broadly confirmed the valuation of the portfolio.
There are two main trends:

 The buildings in the portfolio with good locations and with income secured through long ongoing leases have benefited from the recent acceleration in yield compression for such properties;

 Meanwhile, the buildings in the portfolio with leases approaching expiry have seen further declines in value.

Occupancy rate4 and weighted average duration of leases

The occupancy rate of the properties available for lease is 93.66% as at 31 March 2015 compared with 94.07% as at 31 December 2014. For all the investment properties5, the occupancy rate as at
31 March 2015 was 92.25% (compared with 92.31% at 31 December 2014).
As at 31 March 2015, the weighted average duration of current leases amounts to 8.52 years compared with 8.64 years as at 31 December 2014.
Since the acquisition was completed after close of the first quarter of the year, these portfolio parameters do not yet include the Gateway project.

4 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).

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

The inclusion of the project in the Befimmo portfolio would have had the following impact at
31 March 2015:

 Occupancy rate of properties available for lease: 93.93%

 Occupancy rate of investment properties: 92.57%

 Weighted average duration of leases: 8.95 years

During the first quarter of the fiscal year, Befimmo signed new leases and lease renewals for space measuring some 5,400 m², compared with 3,000 m² signed during the first quarter of the 2014 fiscal year.

Overall rental yield

Properties available for lease Investment properties(c)

(a) The initial yield is the overall rental yield on current rents.

(b) The potential yield is the overall rental yield on current rent plus the estimated rental value of vacant space.

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

4. Financial report as at 31 March 2015

Financial key figures

(a) Including margin and hedging costs.

(b) Calculated over a 12-month period ending at the closing of the quarter.

(c) Loan-to-value ("LTV"): [(nominal financial debts - cash)/fair value of portfolio].

(d) Calculated over a 12-month period ending at the closing of the quarter, taking into account the gross dividend reinvestment and the participation in the optional dividend.

Net asset value6 as at 31 March 2015

As at 31 March 2015, Befimmo's total net asset value amounts to €1,218.43 million.
The net asset value is therefore €55.04 per share, as against €54.00 per share as at 31 December 2014.

Change in net asset value

EPRA NAV and NNNAV

The calculation methods of the EPRA NAV and NNNAV are detailed on page 66 of Befimmo's Annual Financial Report 2014 (www.befimmo.be).

6 Audit of the accounts: the quarterly accounts are not audited. The half-yearly accounts are subject to a limited review, while the annual accounts are audited.

Trend of results7

Analysis

The net rental result and property operating result are up year-on-year. This improvement is explained mainly by:

 a one-time effect related to the commencement of the 27.5 year lease in the new Paradis

Tower while the lease on the old building, due to be demolished, was still running until
31 March 2015;

 the payment of a severance grant in early 2015.

All other components of the net rental result (the arrival of new tenants, the departure of tenants, indexing, change of floor area, etc.) cancel one another out overall.

The other components of EPRA earnings, i.e. overheads and financial charges, are generally stable in relation to last year, despite the increase in the average financial debt of 4.7%.
EPRA earnings amounted to €22.32 million, up 3.0% in relation to the first three months of the 2014 fiscal year.
The EPRA earnings per share of €1.01 is unchanged in relation to the same period last year. Note that the average number of shares increased slightly following the creation of shares related to the contribution in kind of the Rue aux Choux 35 building and the distribution of the optional dividend at the end of 2014.
The net result per share of €1.04 is impacted by the net effect of the positive changes in the fair value of the investment properties (+€1.7 million) and the negative changes in the financial assets and liabilities (-€1.0 million).

7 Audit of the accounts: the quarterly accounts are not audited. The half-yearly accounts are subject to a limited review, while the annual accounts are audited.

Financial structure and hedging policy

As part of its overall financing programme, after the end of the quarter Befimmo issued two bonds with a maturity of 7 years and a total amount of €55 million, €45 million of which was at a floating rate and €10 million at a fixed rate.
Within the framework of its hedging policy, during the quarter and to date, Befimmo arranged a series of IRS, with a deferred start on 1 January 2016, for a total notional amount of €150 million, with maturities between 8 and 9.25 years. The Company also acquired a cap of €30 million with a maturity of 5.25 years. Befimmo also carried out several restructurings of its IRS and CCS.
As at 31 March 2015, Befimmo's financial structure had the following main characteristics:

 confirmed credit facilities for a total sum of €1,239.8 million, €1,014.0 million of which was in use. The volume of unused lines is determined on the basis of the Company's liquidity criteria, taking account of the maturities of the financing agreements and the renovation/acquisition commitments planned for the coming years;

 a debt ratio of 48.05%8 (compared with 47.48% as at 31 December 2014);
 an LTV ratio of 44.28%9 (compared with 45.21% as at 31 December 2014);

 a weighted average duration of debts of 3.61 years;

 56.0% of total debt at fixed rates (including IRS);

 an average financing cost (including hedging margin and costs) of 3.10% over the past

12 months.

5. Befimmo share

Share key figures

(a) Calculated over a 12-month period ending at the closing of the quarter, taking into account the gross dividend reinvestment and the participation in the optional dividend.

6. Dividend forecast

All other things being equal, the Board of Directors confirms the dividend forecast of €3.4510 gross per share for the current fiscal year.

8 The debt ratio is calculated in accordance with the Royal Decree of 13 July 2014.

9 Loan-to-value ("LTV"): [(nominal financial debts - cash)/fair value of portfolio].

10 The gross dividend of €3.45 per share could be paid as an interim dividend of €2.59 in December 2015 and a final dividend of €0.86 in May 2016.

7. Forthcoming publications

(a) Publication before opening of the stock market.

(b) Publication after closing of the stock market.

***

Befimmo SA

Caroline Kerremans | IR & External Communication Manager

Chaussée de Wavre 1945 - 1160 Brussels

Tel.: 02/679.38.13 +| Fax: 02/679.38.66

Email: c.kerremans@befimmo.be | www.befimmo.be

distributed by