FDL : Foncière des Régions acquires 19 hotels in Spain for €542 million...

PRESS RELEASE

Paris, 2 January 2017

Foncière des Régions, via its 49.9%-owned subsidiary Foncière des Murs, has completed the acquisition of a portfolio of 19 hotels from Merlin Properties, located primarily in Barcelona and Madrid. With this transaction, which represents an investment of €542 million including-stamp duties (€270 million group share), Foncière des Régions is pursuing its European development and partnership policy with leading operators in this sector.

Fast-growing market, Spain is the 3rd most popular tourist destination worldwide. The strong growth of the tourist and business clientele, particularly in Barcelona, which is now continental Europe's foremost destination for business seminars, makes it possible to envisage a further increase in RevPar of + 8% in 20171.

The portfolio acquired by Foncière des Régions consists for the most part of centrally located 4- star hotels at the heart of Spain's major cities, essentially Barcelona and Madrid. With a total of 3,800 guest-rooms, these hotels, that include in particular the Barcelo Torre de Madrid and the NH Collection Colon in Madrid plus the Eurostars Gran Marina and AC Forum in Barcelona, are leased under fixed- or guaranteed-rental leases to reference names in the Spanish hotel industry such as Melia, Hotusa, Barcelo or NH.

Backed by acknowledged expertise, market insights and dedicated teams, Foncière des Régions intends to carry out an active policy of asset management with this portfolio, which harbours significant potential for the creation of value and a net target yield of 6%.

A long-standing partner with major hotel names operating in France, Foncière des Régions in 2010 committed to a partnership-based growth dynamic in the European hotel sector, specifically in Germany, where it has seen rapid development. Today, the Group has crossed a strategic milestone and reached a significant critical size in the Spanish market with this acquisition of

€542 million including-stamp duties.

1 source: MKG

Foncière des Régions is cushioning this way its positioning as leading player in the European hotel investment market, holding an asset portfolio of €3.9 billion. In the space of 2 years and for the whole of the hotel portfolio held by Foncière des Régions, the number of partner brands has risen from 5 to 17, with its Europe share (excluding France) increasing from 24% to 56%.

As part of this transaction, Foncière des Murs, a branch of Foncière des Régions, is planning a capital increase of around €200 million over the 1st half year with preferential right of subscription being maintained2. The principal shareholders, accounting for 94% of capital, have already stated their intention to subscribe for a total amount covering the full proposed capital increase. Furthermore, the acquisition is being financed in cash and by a new debt over 8 years at a cost of around 1.85%.

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As a key player in real estate, Foncière des Régions has built its growth and its portfolio on the key and characteristic value of partnership. With a total portfolio valued at €18Bn (€12Bn in group share), located in the high-growth markets of France, Germany and Italy, Foncière des Régions is now the recognised partner of companies and territories which it supports with its two-fold real estate strategy: adding value to existing urban property and designing buildings for the future.

Foncière des Régions mainly works alongside Key Accounts (Orange, Suez Environnement, EDF, Dassault Systèmes, Thales, Eiffage, etc) in the Offices market as well as being a pioneering and astute operator in the two other profitable sectors of the Residential market in Germany and Hotels in Europe.

Foncière des Régions shares are listed in the Euronext Paris A compartment (FR0000064578 - FDR), are admitted to trading on the SRD, and are included in the composition of the MSCI, SBF 120, Euronext IEIF "SIIC France" and CAC Mid100 indices, in the "EPRA" and "GPR 250" benchmark European real estate indices, and in the FTSE4 Good, DJSI World, Euronext Vigeo (World 120, Eurozone 120, Europe 120 et France 20), Oekom, Ethibel and Gaïa ethical indices.

Foncière des Régions is rated BBB/Stable by Standard and Poor's. www.en.foncieredesregions.fr

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2 Subject to obtaining the prospectus approved by the AMF