Klepierre : 2016 Half-Year Earnings

Press release

Paris - July 26, 2016

Shopping center net rental income growth of +2.8% like-for-like1 for the first half of 2016, outperforming index-linked adjustments by 250 bps;

Retailer sales: +2.6% like-for-like2 over 6 months;

Sustained leasing activity with close to 900 leases signed over the period, translating into an average reversion rate in line with last year at 11.2%;

Cost synergies materializing into the EPRA cost ratio, down 260 bps3 vs 2015; Cost of debt reduced to 2.2% (-30 bps vs. last year).

Portfolio valuation of 22.6 billion euros, 4 up 4.8% like-for-like vs. June 30, 2015;

Loan-to-Value of 39.1%, stable compared to year-end 2015 and down by 280 bps vs June 30, 2015; EPRA NAV per share: 34.8 euros, +8.7% vs. June 30, 2015;

Development pipeline of 3.3 billion euros, half of which committed or controlled; 156.5 million euros worth of disposals completed year-to-date.

Net current cash flow per share: 1.16 euros (+8.6%);

Now targeting net current cash flow per share of at least 2.25 euros for 2016, above the 2.23-2.25 euros per share range guidance announced in February 2016

1 Change excludes the contribution from acquisitions, new centers and extensions, spaces under restructuring, disposals completed since January 2015, and foreign exchange impacts.

2 Change excludes the contribution of acquisitions, new centers opened and disposals completed since January 1, 2015. Retailer sales from the Dutch portfolio are not included in these numbers as retailers do not report sales to Klépierre.

3 EPRA cost ratio including vacancy costs. Excluding vacancy costs, the decrease is 210 bps.

4 Total share excluding duties

1

"Throughout the first half of the year, Klépierre has once again proven its ability to deliver solid operational performance, particularly in highly dynamic areas at the heart of our development strategy, in countries such as Italy, Spain, Sweden, and Denmark. Elsewhere, our centers have demonstrated remarkable operating resilience in the face of a rather challenging market environment. Since last year's merger with Corio, we have significantly reduced our operating costs and improved our portfolio, both through asset rotation and advances on our major projects in Val d'Europe, Prado, and Hoog Catharijne, which demonstrates our ability to value major sites and identify unique development opportunities.

Lastly, while capitalizing on a favorable financing environment, we have continued to optimize our financing and reduce leverage to further sharpen our balance sheet. The combination of these operational and financial performances allows us to raise our net current cash flow guidance for the whole of 2016 above the previously announced range."

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Revenues, total share, amounted to 647.7 million euros, down 6.7 million euros year-over-year due to the significant asset rotation completed last year. 2015 disposals were partly offset by acquisitions. Shopping center gross rents amounted to 594.3 million euros in the first half. The average index-linked impact remains limited this half year (+0.3% for the Group).

Shopping center net rental income amounted to 520 million euros, up 2.4% compared to the first half of 2015. This 12 million euro increase includes the 23.1 million euro contribution of both Plenilunio (Madrid) and Oslo City (Norway) acquired in March 2015 and December 2015 respectively, a 12.8 million euro positive impact attributable to the rise in rental income growth on a like-for-like basis, partly offset by a 22.2 million euro decrease due to asset disposals − in particular the portfolio of nine shopping centers sold to Wereldhave in August 2015 − and a 1.8 million euro negative impact linked to foreign exchange rate impacts.

On a like-for-like basis, shopping center net rental income was up by 2.8%, a 250 bp outperformance over index-linked rental adjustments. The Group posted solid net rental performances in an overall context that was challenging for retail this first half in Europe. Italy, Sweden, Denmark, Iberia, and Central Europe operated in favorable business and private consumption environments, while other countries of operation were affected by more challenging socio-economic environment.

For France-Belgium (35.5% of net rental income), net rental income growth reached 2.5% on a like-for-like basis. Net rental income5 in France was up by 2.3%, outperforming by 240 bps negative index-linked rental adjustments, reflecting the positive impact of reversion captured through leasing actions implemented in 2015. Net rental income in Belgium was up 8.0% for the first six months of the year, as L'esplanade

(Louvain-La-Neuve) also benefited from the strong contribution of new retailers introduced in the center during the relet and renewal campaigns of 2014 and 2015.

The Italian portfolio (17.1%) recorded a solid 220 bp outperformance in net rental income like-for-like of 2.4% versus index-linked rental adjustments. Rental growth was driven by an overall increase in variable rents in most centers, as a number of recently added retailers posted very high growth. This trend also

5 In this section, net rental income growth comments by country are on a like-for-like basis.

reflected a decrease in late payments to a low 2.2% - down 70 bps versus June 2015 - and in vacancy. GrandEmilia (Modena), Le Gru (Turin), Campania (Naples), and Nave de Vero (Venice) posted strong rental increases for the six month period.

In CEE and Turkey (10.2%), Hungary (+10.6%), Czech Republic (+8.5%) and, to a lesser extent, Poland (+2.1%) are enjoying a strong momentum with sound net rental income growth like-for-like posted over the first half of the year, linked to a sharp improvement in macroeconomic indicators, the positive outcome of re-tenanting campaigns, and portfolio streamlining. In Turkey, the 4.1% decrease in net rental income is attributable to the depreciation of the Turkish Lira.

In the Netherlands (4.1%), net rental income like-for-like was down by 6.7% due to an increase in vacancies and late payment rates in relation to bankruptcies of a few domestic retailers. However, new contracts are under negotiation with new operators.

Like-for-like6 retailer sales in Klépierre shopping centers rose by 2.6% during the first half of 2016 compared to 2015. 2015 extensions had a limited impact on this reported figure as retailer sales increased 2.4% like-for-like excluding extensions. In a mixed economic environment in Europe in the first half, retailer sales outperformed national indices in most countries.

March and May retailer sales were impacted by negative calendar effects in almost all countries, notably due to the timing of the Eastern break and one less Saturday than last year. France, Italy and, to a lesser extent, Iberia had rainy and cold weather in the second quarter, which weighed on fashion sales. In June, retailer sales were well oriented in most countries, with fashion partly recovering.

In France-Belgium, retailer sales grew by 0.8% over the first half of the year, with French malls outperforming the national sales index (CNCC) by 60 bps over the first 5 months. In Italy, the more favorable economic environment and the unique platform of prime shopping centers led to retailer sales increasing by 3.1%, with Porta di Roma (Rome), Le Gru (Turin), and Campania (Naples) confirming their leadership once again. In Scandinavia, retailer sales were up 3.1%, driven by Sweden (+4.0%) and Denmark (+4.2%), two countries benefiting from continued solid economic and business momentum. Sales in Norway recorded a 2.0% increase. In Iberia, retailer sales in Klépierre malls reported a 2.4% increase, with Spain trending a relative slowdown compared to last year mainly due to poor weather conditions. In

6 Like-for-like change excludes the impact of asset sales, acquisitions, and new centers opened since January 1, 2015. Retailer sales from the Dutch portfolio are not included in these numbers, as retailers do not report sales to Klépierre.

In this context, a total of 893 leases were signed during the first half of the year, representing 12.5 million euros in additional annualized minimum guaranteed rents. Leases that were renewed or relet represented

6.6 million euros worth of additional annual minimum guaranteed rents, i.e., an 11.2% average reversion rate, to be compared with 10.4% for the first half of 2015.

The shopping center vacancy rate (EPRA format) stands at 3.8%, stable compared to December 31, 2015. The late payment rate remains very low at 1.8% for the Group.

Among the main transactions with international fashion retailers this first half, some key openings or signatures can be highlighted: Zara unveiled a brand new 3,330 sq.m. expanded flagship store in Porta di Roma (Rome, Italy) in June. H&M inaugurated its first store in the Canary Islands, over 2,150 sq.m. at Meridiano (Spain), and signed to open its first store in Bursa (Turkey) at Anatolium. Uniqlo chose Blagnac (Toulouse) to implement its first store in Southwest France. Leasing teams were particularly active in fostering beauty operator development in Klépierre malls. Five leases were signed with Nyx - one in Plenilunio (Madrid, Spain) and one in Nový Smìchov (Prague, Czech Republic) - which will be the first shopping centers to welcome the brand in their respective countries. Three leases with Yves Rocher, two with Rituals, two with The Body Shop, and two with Sephora. Innovative concepts also chose Klépierre malls to expand: Kusmi Tea opened its new digital store concept in Val d'Europe (France), Nespresso turned its pop-up store into a permanent store in Field's - making the leading shopping center in Copenhagen the first to welcome a Nespresso store in the country. In the food segment, which is being globally upgraded, Starbucks signed two leases in the Czech Republic. Burger King also signed for a new restaurant at Königsgalerie (Germany).

Operating cash flow reached 501.8 million euros, a 3.5% increase versus June 30, 2015. In addition to the reported net rental income growth, a significant 13 million euros decrease compared to June 2015 was recorded on payroll and general expenses, mainly driven by the synergy plan in connection with the Corio acquisition. The cost base reduction is notably reflected in the EPRA cost ratio, which stood at 18.1% as of June 30, 2016 versus 20.7% as of same date last year.

Net interest expense was 84.5 million euros, down 24.5% year-on-year, due to both a c. 350 million euro decrease in average debt in the first half of 2016 versus same period last year and a strong decrease in cost of debt (2.2% at June 30, 2016). Group share, net current cash flow amounted to 361.6 million euros, up 9.7%. On a per share basis, net current cash flow grew by 8.6% to reach 1.16 euro.