Beni Stabili: first half 2017 results

Milan: July 18th, 2017

1. Beni Stabili Siiq defines the net recurring consolidated income (previously called recurring cash result for the Group) as an alternative performance indicator by adjusting the net consolidated results, excluding: i) disposals margin (capital gain and related costs) and the related financial expenses deriving from the early repayment of loans and financial instruments; ii) non-cash items (changes in values of properties and financial instruments, amortizations, etc.) and iii) relevant extraordinary and non-recurring items.

2. Group share.

3. The like-for-like rental growth is calculated on the stabilized portfolio as the growth rate coming from i) the effect of indexation to inflation; ii) the effect of an increase or reduction in the vacancy rate of the stabilized portfolio and iii) the effect of renegotiating expiring rents or of new rents. The stabilized portfolio is the portfolio adjusted by sales, acquisitions and development.

4. Includes 5,100 sqm relative to new contracts, 31,900 sqm related to renewals and 12,100 sqm of prelettings related to assets under development.

   H1 2017 FINANCIAL HIGHLIGHTS

   • Recurring net income 5: €55.7 millioncompared to €51.3 million in 1H 2016 (+8.4%)

   • Net result: €40.7 millioncompared to €131.0 million in 1H 2016

   • Gross rental income: €101.9 million(compared to €98.9 million in 1H 2016), significant increase of

     +2.9% on a like-for-like 6basis excluding the Telecom Italia perimeter (total portfolio: +1.5%)

   • Real Estate Portfolio (market value): €4,304 million(compared to €4,094 million at the end of 2016) and

     €3,683 million in group share.+1.2% on a like-for-like basis

   • EPRA NAV per share: €0.832(compared with €0.838 at 1H 2016 - €0.848 at the end of 2016)

   • EPRA NNNAV per share: €0.807(compared with €0.777 at 1H 2016 - €0.809 at the end of 2016)

   • Net Financial Position:-€2,196 million (compared to -€2,230 million at the end of 2016) and-€1,896 million

     in group share

   • Average cost of debt and maturity:significantly decreased to 2.14% (vs. 2.44% at the end of 2016) with an overall unchangedaverage maturity of debt of 4.5 years7(vs. 5.0 years at the end of 2016)

   • Loan to value (LTV) 8: 46.1% on a group share basis.LTV at 47.2% consolidated (compared to 51.6% at the end of 2016)

     OPERATING HIGHLIGHTS FOR THE FIRST HALF OF 2017

     Successful rental activity resulting in an increased occupancy rate

   • 20 new contracts for€1.5 million annualized rents;12 renewals for€9.6 million annualized rents;5 prelettings for€4.0 million annualized rents including (i) the major prelet to Amundi of the entire building located in Milan Via Cernaia for a total surface of 8,300 sqm and (ii) a new prelet on Symbiosis for 1,015 sqm to CIR Food;
   • Occupancy rate is 94.8% group share on total portfolio and 92.1% excluding TI portfolio (+4.7 points vs. Dec. 2015);
   • Weightedaverage maturity of lease agreements to first break-option of7.2 years in group share9;
   • Committed development pipeline is 58% pre-let bringing around €11 million annualized rents.Investment and capex funded through targeted disposals of mature and non strategic assets

   • Total disposals agreements of around €817million with 5.9% gross exit yield:

     • Disposal of a 40% stake in the SICAF (Central SICAF) completed in 2Q 2017, equivalent to approx.

       €618 million of assets sale

     • €199 million of additional disposals agreements, of which €39 million cashed-in in the semester and

       €114.6 million (Milan-via San Nicolao) cashed-in in July

5. Beni Stabili Siiq defines the net recurring consolidated income (previously called recurring cash result for the Group) as an alternative performance indicator by adjusting the net consolidated results, excluding: i) disposals margin (capital gain and related costs) and the related financial expenses deriving from the early repayment of loans and financial instruments; ii) non-cash items (changes in values of properties and financial instruments, amortizations, etc.) and iii) relevant extraordinary and non-recurring items. Consolidated as at 30/06/2017.

6. The like-for-like rental growth is calculated on the stabilized portfolio as the growth rate coming from i) the effect of indexation to inflation; ii) the effect of an increase or reduction in the vacancy rate of the stabilized portfolio and iii) the effect of renegotiating expiring rents or of new rents. The stabilized portfolio is the portfolio adjusted by sales, acquisitions and development.

7. Based on medium-long term debt only.

8. LTV is calculated by considering the hypothetical value of the assets transfer taxes (4%) and the current preliminary sales contracts.

9. Including leases renewed after 30 June 2017. WALB as at 30 June 2017 is 6.9 yrs (8.1 total share).

   • €194 million acquisitions mainly in Milan with 6% gross potential yield, including the announced €118 million acquisition of Credito Valtellinese Group's portfolio in the context of a sale and leaseback transaction
   • €38 million of capex accrued in the semester OUTLOOK

     Confirmed strategic guidelines and improved 2017 RNI target

   • All strategic guidance are confirmed with 2020 objectives well to-track to be timely achieved

   • 2017 recurring net income target around €0.042/share (+5% vs. previous guidance)

   * * * * *

   IMPORTANT FACTS OCCURRED IN THE FIRST SEMESTER 2017

   Completion of the strategic agreement between Beni Stabili, Crédit Agricole Assurances and EDF Invest on the Telecom Italia portfolio

   On June 21st, 2017, Beni Stabili completed the disposal of a 40% stake in Central SICAF, the largest Italian Real Estate SICAF formed earlier this year via the contribution of all its Telecom Italia portfolio (for a value of approx. €1.5bn), along with the associated debt (approx. €0.8bn).

   Crédit Agricole Assurances and EDF Invest, the investment division of the EDF Group, have each acquired a 20% stake in the SICAF from Beni Stabili. Beni Stabili maintains control over the SICAF through its 60% stake and will also provide real estate services to the SICAF.

   This landmark transaction confirms the appeal of Italian real estate for long-term international investors and constitutes a key stage in the strategy initiated by Beni Stabili at end-2015 in order to further diversifying its tenant base, strengthening capital structure and increasing its exposure to Milan.

   Major disposal of a mature asset

   On June 27th, 2017, Beni Stabili announced the signing of a binding agreement to sell to Luxottica Group S.p.A. an asset of 11,705 sqm of offices located in Milan via San Nicolao for approx. €114.6 million. The price for the asset is above book value at 31 December 2016 and implies a net exit yield of 4.2% based on a residual lease maturity of approx. 4 years. The building was acquired in 2002 in the context of a sale and lease back with a leading Italian bank. It was then vacated in 2011 and completely refurbished to highest market standard by Beni Stabili and promptly let to Luxottica. The disposal completes the asset management cycle for the property allowing to fully benefit of the positive momentum of Milan's real estate market. The closing of the

   transaction took place on July 3rd, 2017.

   Reinforcement in Milan through a €118 million portfolio acquisition

   On June 29th, 2017, Beni Stabili acquired a portfolio of core banking offices worth €117.8 million10from the Credito Valtellinese Group through a sale and leaseback transaction. The portfolio consists of 17 properties (including 2 long-term leasehold rights) that will be leased-back to entities belonging to the Credito Valtellinese Group by virtue of double-net lease agreements with minimum durations varying between 9 and

10. Of which two properties (representing €19.2 million) subject to a pre-emption right in favor of the Italian Cultural Heritage authorities and for which a deferred closing will take place during the third quarter of 2017

12 years (besides a 6-year extension option at the hand of the tenant) 11and a gross yield of around 6% (around €7 million of rents).

The property portfolio, which includes some central and iconic assets in Milan as Piazza San Fedele 4 (next to Piazza San Fedele 2 building already owned by Beni Stabili) and Milan Corso Magenta 59-63, totals a GLA of approx. 21,700 sqm and it is mostly focused in Milan which represents more than 82% of portfolio value. The remaining 18% is composed of well-located bank branches (retail and offices) with expected good level of market liquidity.

This transaction is perfectly in line with the investment strategy of Beni Stabili, increasing the exposure to Milan, diversifying further the tenant base, enhancing cash flow visibility thanks to new value-accretive rental partnerships and confirming a proactive capital rotation strategy.

The closing of the transaction took place by June 29th, 2017 with the exception of two properties (representing

€19.2 million) subject to a pre-emption right in favor of the Italian Cultural Heritage authorities and for which a deferred closing will potentially take place during the third quarter of 2017.

Major prelet of Milan via Cernaia 8/10 and significant new prelet on Symbiosis

On July 14th, 2017 Beni Stabili signed a new lease contract with Amundi (leading international Asset management firm) for the entire building located in Milan via Cernaia 8/10 for a total gross surface of 8,300 sqm, with a 9.5 years firm lease and topped-up rent equal to €3.1 million. The property is part of Beni Stabili's committed development pipeline, it is currently subject to complete refurbishment to highest quality standard targeting Leed Platinum certification and will be delivered by end of 2017.

On June 1stBeni Stabili signed a new lease contract with CIR Food (leading player in Italian food service industry) on building B of Symbiosis for a total weighted area of 1,015 sqm with a 12.5 years firm lease with topped-up rent equal to €0.55 million. With this additional lease contract the building hosting the future Fastweb's headquarter reaches 85% prelet.

Buy-back of €270 million convertible bond due in April 2019

On February 28th, 2017, Beni Stabili launched a transaction to repurchase in cash the "€270,000,000 2.625 per cent Convertible Bonds" due 17 April 2019. The Company succeeded to repurchase 98.78% of the outstanding nominal amount (€266.7 million). The purchase price has been set at 111 thousand of euro per each 100 thousand of euro of nominal amount of the repurchased bonds, plus accrued interests.

The bonds purchased have been cancelled whereas for the bonds which have not been repurchased (for a nominal amount equal to €3.3 million) the Company has exercised the clean up call according to the relevant terms and conditions (completed in May 2017).

The repurchase has been financed through a new corporate loan for a nominal amount of €250 million, and with available short term lines and cash for the residual amount.

This successful transaction is part of the Beni Stabili's liability management strategy aimed at optimizing its financing sources in order to reduce its average cost of financing while mitigating the potential dilution risk.

Securing 2018 debt maturities

In July 2017, Beni Stabili secured almost entirely 2018 debt maturities through a 10-year €87million new bank financing already signed (drawdown later in the year), and around €150 million 8-year bank loans committed and currently under finalization.