UNIBAIL-RODAMCO SE : FULL-YEAR RESULTS 2017

Paris, Amsterdam, January 31, 2018

Press release

FULL-YEAR RESULTS 2017

A year of exceptional achievements for Unibail-Rodamco
Recurring Earnings per Share (recurring EPS) of €12.05 exceeds guidance of €11.80 - €12.00 announced in February 2017.

• Recurring EPS grew +7.2% to €12.05 from €11.24 in 2016
• Net Rental Income (NRI) like-for-like growth in Shopping Centres: +4.3%, +360 bps above indexation
• Cost of debt at an all-time low of 1.4%, average debt maturity of 7.2 years
• Total portfolio value of €43.1 Bn, up +6.3%
• Net asset values per share:

• Going Concern NAV: €219.20, up +8.8%
• EPRA NNNAV: €200.50, up +9.1%
• EPRA NAV: €211.00, up +7.9%

• Development pipeline (€7.9 Bn) refuelled with new projects, after €0.9 Bn of deliveries in 2017
• Cash dividend of €10.80 per share⁽¹⁾
• Announcement of the Westfield acquisition

Figures may not add up due to rounding

"Thanks to the exceptional performance of the teams, 2017 was an outstanding year for Unibail-Rodamco, with very strong operating results, the successful delivery of five major retail developments and the agreement to acquire Westfield Corporation. Recurring earnings per share were up by +7.2%. Like-for-like NRI growth of +4.2% was strong, driven by continued solid leasing activity in retail and a record leasing year in offices. One year after the launch of Better Places 2030, the Group made excellent progress in its CSR strategy. Unibail-Rodamco is very well positioned to deliver on its proven growth strategy in 2018 and in the medium and long term, with its best in class portfolio and development pipeline, the secured low cost of debt, its talented professionals and clear strategic focus. We also look forward to closing the Westfield acquisition and creating the world's premier developer and operator of flagship shopping destinations." Christophe Cuvillier, CEO and Chairman of the Management Board

 2017 RECURRING EPS OF €12.05, UP +7.2%

Recurring EPS came to €12.05, an increase of +7.2% from 2016. The Group exceeded its recurring EPS guidance of €11.80 - €12.00 announced in February 2017.

STRONG OPERATING PERFORMANCE

Shopping Centres
Tenant sales⁽²⁾ increased by +3.7% compared to 2016. Through November 2017, tenant sales outperformed the national sales indices⁽³⁾ by +180 bps. France (+410 bps), the Nordics (+300 bps) and Central Europe (+160 bps) performed particularly well.
In 2017, Shopping Centre like-for-like NRI grew by +4.3%, +360 bps above indexation, equalling its best performance since 2008. The Group signed 1,350 leases on consolidated standing assets with a Minimum Guaranteed Rent uplift of +14.7%, of which +16.8% for flagship assets⁽⁴⁾. The tenant rotation rate was 11.0% and the EPRA vacancy rate was 2.4% (including 0.2% of strategic vacancy). The Group accelerated its push to directly connect with visitors. Unibail-Rodamco signed up +1.8 million new customers to its loyalty program in 2017, of which 85% through its digital channels, to reach a total of 4.2 million members.

Offices
With 2.6 million m² of office space let, the 2017 take-up in the Paris region was at the highest level of the last 10 years. 67% of transactions were in new or refurbished-as-new buildings.
The Group leased more than 72,000 m² in standing assets in the Paris region. Like-for-like NRI increased by +13.5%. In addition, the Group has entered into exclusive negotiations with Nestlé to prelet the entire 44,566 m² Shift building, to be concluded during Q1 2018, more than one year prior to delivery. The Group also disposed of So Ouest Plaza for a Net Disposal Price of €473.8 Mn⁽⁵⁾.

Convention & Exhibition
On November 22, 2017, the Group inaugurated the new Paris Convention Centre, concluding the first phase of the Paris Expo Porte de Versailles refurbishment project. With a total capacity of 35,000 participants, it can now host world-class congresses: 15 large scale congresses have already booked the venue for the coming years. Recurring NOI decreased by -2.1% compared to FY-2015⁽⁶⁾, the last comparable period, which was favourably impacted by COP 21 held in Paris Le Bourget.

BETTER PLACES 2030

In 2017, the Group made significant progress in its ambitious CSR strategy: as at December 31, 2017, 146 partnerships were signed with tenants (15.6% of total retail GLA⁽⁷⁾) to use LED lighting. Following the contracts signed in 2017 for France and Central Europe, all the Group's regions are now supplied with Green Electricity⁽⁸⁾. 719 employees volunteered in the Group's annual Solidarity Days and the UR for Jobs programme, which fosters employment of disadvantaged youth by tenants and suppliers in the Group's shopping centres.
  
VALUE CREATION OF €27.14 PER SHARE

The Gross Market Value (GMV) of the Group's assets as at December 31, 2017, amounted to
€43.1 Bn, up +6.3% in total, and +3.9% on a like-for-like basis, from December 31, 2016.
The Shopping Centre division GMV grew by 7.0% in total and by +3.9% on a like-for-like basis, driven by the rent effect. The average net initial yield of the retail portfolio stood at 4.3% (vs. 4.4% as at year-end 2016).
The GMV of the Office division reached €4.2 Bn, representing a +10.1% increase on a like-for-like basis. The valuation of the office portfolio benefitted primarily from a yield effect of +6.5% driven by reference transactions in Paris CBD and La Défense.
The GMV of the Convention & Exhibition division decreased -2.4% on a like-for-like basis.
Going Concern NAV per share stood at €219.20 as at December 31, 2017, an increase of +€17.70 (+8.8%) compared to December 31, 2016. This increase was the sum of (i) the value creation of €27.14 per share, (ii) the impact of the dividend paid in March and July 2017 of -€10.20, and (iii) the impact of the +€0.76 mark-to-market of the fixed-rate debt and derivatives.

€7.9 Bn PIPELINE REFUELLED AFTER SUCCESSFUL DELIVERIES

The Group delivered five major retail projects for a total GLA of 172,395 m² and a Total Investment Cost (TIC) of €0.9 Bn: the new shopping centre Wroclavia in Poland, the extensions and renovations of Centrum Chodov, Carré Sénart and Parly 2, and the full redevelopment of Glòries. 99% let at opening, these projects generated an aggregate yield on cost of 7.7%.
The pipeline was refuelled with the Vitam project, a 69,621 m² leisure and retail redevelopment in France, near Geneva, and the extension of Fisketorvet.
As at December 31, 2017, the aggregate TIC of the development pipeline amounted to €7.9 Bn.

AVERAGE COST OF DEBT AT 1.4% AND A 7.2-YEAR AVERAGE MATURITY

The financial structure of the Group is strong with a Loan-to-Value ratio of 33% and an interest coverage ratio of 6.7x (5.9x in 2016). The average cost of debt of the Group in 2017 was 1.4%, an all-time low, while the average debt maturity as at December 31, 2017, was 7.2 years.

ASSET ROTATION DISCIPLINE

In 2017, the Group divested €710 Mn of assets for an aggregate NIY of 4.6% and a 15% premium to the last unaffected appraisal values.
The proceeds of the divestments were partly reinvested in asset acquisitions (€364 Mn), including the remaining 50% stake in Polygone Riviera⁽⁹⁾ and a 50% stake in the Metropole Zlicín shopping centre in Prague.

WESTFIELD ACQUISITION

On December 12, 2017, the Group announced that it had entered into an agreement to acquire Westfield Corporation, to create the world's premier developer and operator of flagship shopping destinations. Since announcement, Unibail-Rodamco has obtained the unanimous positive opinions of its works councils regarding the proposed acquisition. The Transaction Documentation is expected to be published in March / April 2018. The closing is expected to take place in Q2-2018 upon approval of shareholders of both companies and satisfaction of the conditions precedent.

OUTLOOK

The Group expects to grow its recurring EPS in 2018 to between €12.75 and €12.90 on a standalone basis.

For the medium term and on a standalone basis, Unibail-Rodamco expects to grow its recurring EPS at a compound annual growth rate of between +6% and +8%. This medium-term outlook is derived from the annual business plan exercise for Unibail-Rodamco. This results in annual growth rates which vary from year to year. The key inputs in the Group's business plan, which is built on an asset by asset basis and based on economic conditions as at year-end 2017, are estimates and assumptions relating to indexation, rental uplifts, disposals of approximately €3 Bn over the next several years, timely delivery of pipeline projects, cost of debt and taxation. Variations in these assumptions will also cause growth rates to vary from one plan to the next. The Group's current business plan does not assume any acquisitions, nor the Westfield transaction.

DIVIDEND

For the fiscal year 2017, the Group will propose a cash dividend of €10.80 per share for approval by its Annual General Meeting (AGM). Further to the announcement of the agreement to acquire Westfield Corporation, the Group will reschedule this AGM, originally planned on April 18, 2018, to a date expected to be in May 2018.
The dividend payment schedule will be as follows:

• an interim dividend of €5.40 per share on March 29, 2018 (ex-dividend date March 27, 2018); and
• a final dividend of €5.40 per share⁽¹⁾. The final dividend will be paid to Unibail-Rodamco shareholders of record prior to the closing of the Westfield acquisition.

 FINANCIAL SCHEDULE

The next financial events on the Group's calendar will be:
April 23, 2018: 2018 1^st Quarter Revenues (after market close)
July 25, 2018: 2018 Half-year results (after market close)⁽¹⁰⁾

For further information, please contact:

Investor Relations
Paul Douay
Marine Huet
Maarten Otte                                       
+33 1 76 77 58 02                                
maarten.otte@unibail-rodamco.com

Media Relations
Caroline Bruel
+33 1 76 77 57 94
caroline.bruel@unibail-rodamco.com
  

1. Subject to approval by the AGM
2. Tenant sales data include shopping centres accounted for using the equity method (Rosny 2, CentrO and Paunsdorf) but not Jumbo, Zlote Tarasy and Metropole Zlicín as they are not managed by the Group. Tenant sales performance in Unibail-Rodamco's shopping centres (excluding The Netherlands) in portfolio of shopping centres in operation, including extensions of existing assets, but excluding deliveries of new brownfield projects, newly acquired assets and assets under heavy refurbishment. For 2017, shopping centres excluded due to delivery or ongoing works were Carré Sénart and Carré Sénart Shopping Park, Galerie Gaité, Les Boutiques du Palais, La Part-Dieu, Parly 2, Glòries, Bonaire, Centrum Chodov, Wroclavia, CH Ursynow and Gropius Passagen. Primark sales are based on estimates.
3. Based on latest national indices available (year-on-year evolution) as at November 2017: France: Institut Français du Libre Service (IFLS) - excluding food; Spain: Instituto Nacional de Estadistica; Central Europe: Cesky statisticky urad (Czech Republic), Polska Rada Centrow Handlowych (Poland) (as at October 2017), Eurostat (Slovakia); Austria: Eurostat; the Nordics: HUI Research (Sweden), Danmarks Statistik (Denmark); Germany: Destatis-Genesis, excluding online only operators and fuel sales (Federal Statistical Office). Including online only sales for France, Spain, Austria, the Czech Republic and Slovakia and excluding online only sales for Germany, the Nordics and Poland.
4. Flagship assets: Les Quatre Temps, Aéroville, Parly 2, Vélizy 2, Carré Sénart, Rosny 2, Le Forum des Halles, Carrousel du Louvre, CNIT, Confluence, La Part-Dieu, Villeneuve 2, Euralille, Polygone Riviera, La Vaguada, Parquesur, Bonaire, Splau, La Maquinista, Glòries, Donau Zentrum, Shopping City Süd, Centrum Cerny Most, Centrum Chodov, Wroclavia, Galeria Mokotow, Zlote Tarasy, Arkadia, Aupark, Jumbo, Fisketorvet, Mall of Scandinavia, Täby Centrum, Stadshart Amstelveen, Leidsenhage, Ruhr Park, Gropius Passagen, CentrO, Pasing Arcaden.
5. Including the cinema.
6. Restated for the Intermat triennial show.
7. Total owned and managed retail GLA.
8. Common parts of owned and managed shopping centres.
9. On December 29, 2017, the Group acquired a 45% stake in the companies holding the shopping centre Polygone Riviera from its joint-venture partner. As at December 31, 2017, the Group owned a 95% interest in this asset. On January 4, 2018, the Group acquired the remaining 5% stake in the asset.
10. Subject to the date of Westfield acquisition completion.

About Unibail-Rodamco
Created in 1968, Unibail-Rodamco SE is Europe's largest listed commercial property company, with a presence in 11 Continental European countries, and a portfolio of assets valued at €43.1 billion as of December 31, 2017. As an integrated operator, investor and developer, the Group aims to cover the whole of the real estate value creation chain. With the support of its 2,011 professionals, Unibail-Rodamco applies those skills to highly specialised market segments such as large shopping centres in major European cities and large offices and convention & exhibition centres in the Paris region.
The Group distinguishes itself through its focus on the highest architectural, city planning and environmental standards. Its long term approach and sustainable vision focuses on the development or redevelopment of outstanding places to shop, work and relax. Its commitment to environmental, economic and social sustainability has been recognised by inclusion in the FTSE4Good and STOXX Global ESG Leaders indexes.
The Group is a member of the CAC 40, AEX 25 and EuroSTOXX 50 indices. It benefits from an A rating from Standard & Poor's and Fitch Ratings.
For more information, please visit our website: www.unibail-rodamco.com