ICADE : Positive dynamic across all business lines in Q1 2017

PRESS RELEASE

• Commercial Property Investment:

  • Continued increase in the financial occupancy rate of Commercial Property Investment assets to 91.7%, i.e. +0.6 pp compared to the end of 2016, including +0.8 pp like-for-like in business parks;

  • Strong leasing activity during the quarter: new leases signed for a total of 37,400 sq.m;

  • Lease renewals totalling 51,300 sq.m (including 2 office buildings located in Villejuif), average term of over 8 years;

  • Preliminary agreements signed to sell three office assets totalling 43,000 sq.m in Villejuif for €225m.

• Healthcare Property Investment:

  • Acquisition of 2 private hospitals at the beginning of April 2017 for nearly €53m (including duties);

  • On March 31, 2017, sale of the Les Chênes polyclinic in Aire-sur-l'Adour for €5.6m (net price received by the seller);

  • Higher investments in projects under development (€37.5m invested over the quarter).

• Property Development:

  • Significant rise in economic revenue1 to €217.3m (+12.8%2), boosted by the Residential Property Development business (+24.8%);

  • Housing orders up 10.3% for the Residential Property Development business2;

  • Continued growth in backlog to €1,574m as of March 31, 2017 (+1.8%2);

  • Partnership with Poste Immo, with the objective of creating Arkadea, a full-fledged property development company.

• Projects generating synergies between Commercial Property Investment and Property Development in region: 70,000 sq.m development project on the Latécoère site in Toulouse

• 2017 net current cash flow outlook confirmed: up at least 4% compared to 2016

1 Economic revenue = IFRS revenue adjusted from IFRS 11

2 vs. March 2016

1. REVENUE AS OF MARCH 31, 2017

   As of March 31, 2017, Icade's consolidated revenue showed a 3.9% increase compared to March 31, 2016, driven by Property Development (+6.4%) and Healthcare Property Investment (+2.9%).

   (in millions of euros)	03/31/2017	03/31/2016	Change (%)
   Gross rental income from Commercial Property Investment	93.6	93.8	(0.3)%
   Gross rental income from Healthcare Property Investment	52.7	51.2	2.9%
   Property Development revenue	189.1	177.7	6.4%
   Other revenue	(1.4)	(1.2)	15.7%
   CONSOLIDATED REVENUE	333.9	321.5	3.9%

2. PROPERTY INVESTMENT DIVISION
3. Commercial Property Investment

Rental income:

(in millions of euros)	03/31/2016 restated*	Acquisitions / completions	Disposals / redevelopments	Leasing activity/escalation	03/31/2017	Change (%)	Like-for- like change (%)
Offices	42.3	5.8	(5.1)	(0.3)	42.7	0.9%	(0.8)%
Business parks	48.5	6.1	(6.0)	(0.3)	48.2	(0.7)%	(0.8)%
TOTAL OFFICE AND BUSINESS PARK ASSETS	90.8	11.8	(11.1)	(0.6)	90.9	0.0%	(0.8)%
Other assets	4.4	-	(0.2)	(0.0)	4.2	(5.7)%	(0.4)%
Intra-group transactions from Commercial Property Investment	(1.4)	-	-	(0.0)	(1.5)	1.7%
GROSS RENTAL INCOME	93.8	11.8	(11.4)	(0.6)	93.6	(0.3)%	(0.7)%
(*) Reclassification of the Axe Seine asset from the business park segment to the office segment, formerly classified within the Nanterre Seine business park (sold in 2016).

In the office and business park segment, rental income added up to €90.9 million, stable compared to March 31, 2016 (€90.8 million).

Including residual assets (housing, warehouses), Q1 2017 performance was slightly down, with total rental income standing at €93.6 million. A decrease of - €0.7 million (-0.7%) was recorded on a like-for-like basis.

Changes in scope of consolidation affected the year-on-year trend in rental income as of the end of Q1 2017, including:

 + €5.3 million positive impacts from the three acquisitions made in H2 2016 in the office segment (Parissy, Arc Ouest and Orsud);

 + €6.6 million positive impacts from completions in the Millénaire business park (Véolia headquarters and Millénaire 4) and in the office segment (first phase of the Go Spring off-plan sale project completed in March 2017 and lease signed in Défense 4/5/6 on February 1, 2017);

• - €10.9 million negative impacts from the disposal of the 5 non-core business parks in 2016 (-€5.8 million) and the sale of office buildings (-€5.1 million), mainly the Levallois and Haussmann buildings;
• - €0.3 million due to the rental income shortfall from assets made available for redevelopment. Rental income generated by acquisitions and asset completions from 2016 offset the impact of disposals carried out as part of the strategic plan.

  Analysis of leasing activity:

  12/31/2016

  restated* Q1 2017 changes 03/31/2017 New leases in Q1 2017

  Total new leases in Q1 2017

  Leased

  floor area Additions Exits

  Leased floor area

  Impact in Q1 2017

  Impact after

  Q1 2017

  Asset class (sq.m) (sq.m) (sq.m) (sq.m) (sq.m) (sq.m)

  Offices	516,637	6,181	(1,575)	521,243	1,298	1,029	2,327
  Business parks	1,023,774	20,598	(17,138)	1,027,234	8,993	14,704	23,697
  Warehouses	64,039	285	-	64,324	285	-	285
  LIKE-FOR-LIKE SCOPE (A)	1,604,450	27,064	(18,713)	1,612,801	10,576	15,733	26,309
  Offices	-	14,299	-	14,299	11,088	11,088
  Business parks	-	-	-	-	-	-	-
  Warehouses	-	-	-	-	-	-	-
  ACQUISITIONS / COMPLETIONS (B)	14,299	-	14,299	-	11,088	11,088
  SUBTOTAL	1,604,450	41,363	(18,713)	1,627,100	10,576	26,820	37,397
  DISPOSALS (C)	-	-	-	-	-	-	-
  COMMERCIAL PROPERTY INVESTMENT (A)+(B)+(C)	1,604,450	41,363	(18,713)	1,627,100	10,576	26,821	37,397

  (*) Reclassification of leased floor area in the Axe Seine building (11,614 sq.m) from the business park segment to the office segment

  Additions to the portfolio of leased space represented 41,363 sq.m.

• On a like-for-like basis, the main additions to the portfolio of leased space represented 27,064 sq.m.

• In the portfolio of leased space, new leases taking effect added up to 14,299 sq.m and related exclusively to the Go Spring building (rent guarantee period), whose first phase was completed in March 2017.

On a like-for-like basis, the exits from the portfolio of leased space during the period totalled 18,713 sq.m.

Fifteen leases were renewed for a total floor area of 51,337 sq.m and an annualised headline rental income of

€14.0 million, implying a 7.1% decline compared to previous leases. The average remaining term to first break (or expiry) of these renewed leases stood at 8.3 years.

Taking these changes into account, the weighted average unexpired lease term for the Commercial Property Investment Division was 4.9 years, a minor increase compared to the end of 2016 (4.8 years).