Retail Estates : Half-year report 2023-2024

Table of contents Half-yearlyfinancial report 2023-2024

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18 31

"We strive to create the right worklife

balance for our compact and dynamic team with attention to everyone's personal needs."

Fair value

1 930 244 €

Retail Estates nv has concentrated on continuously improving the quality of its properties and the expansion of its real estate portfolio.

Retail area

1 208 564m²

Retail Estates expands its real estate portfolio through acquisitions, project developments and investments in the optimisation of its real estate portfolio.

REAL ESTATE PORTFOLIO

Number of properties

Total lettable area in m²

Estimated fair value (in EUR)

Estimated investment value (in EUR)

Average rent prices per m²

Occupancy rate

BALANCE SHEET INFORMATION

30.09.2023

1 008

1 208 564

1 930 244 000

2 025 624 000

117.04

98.12%

30.09.2023

31.03.2023

1 013

1 211 004

1 888 562 000

1 983 204 000

114.89

98.08%

31.03.2023

Shareholders' equity

Shareholders' equity attributable to the shareholders of the parent company

Debt ratio (RREC legislation, max. 65%)1

RESULTS

Net rental income

Property result

Property costs

Operating corporate costs and other current operating income and expenses

Operating result before result on portfolio

Result on portfolio

Operating result

Financial result

Net result

EPRA earnings

67 712 000

66 467 000

-7 977 000

-3 946 000

54 543 000

39 416 000

93 960 000

-7 199 000

86 985 000

44 515 000

60 622 000

59 646 000

-5 622 000

-3 792 000

50 232 000

22 697 000

72 929 000

34 911 000

106 013 000

39 060 000

INFORMATION PER SHARE

30.09.202331.03.2023

Number of shares

Number of dividend bearing shares

Net asset value (NAV) per share IFRS

EPRA NTA

Net asset value per share (investment value) excl. dividend excl. the fair value of authorised hedging instruments

Share price on closing date

Over-/undervaluation compared to net asset value IFRS

EPRA earnings per share

1. INTRODUCTION

General

Retail Estates nv is a leading Belgian retail estate company specialised in out-of-town retail real estate. The real estate portfolio of Retail Estates nv consists of 1,008 properties located in Belgium and the Netherlands, accounting for a total retail area of 1,208,564 m² and a fair value of € 1,930.24 million.

Retail Estates nv is a listed company (Euronext Brussels and Amsterdam). The company's stock market capitalisation amounted to € 815.1 million on 30 September 2023.

Risk management

While management tries to minimise the risk factors, a number of risks must be carefully taken into account. For an overview of the risks, we refer to the chapter "Risk management" of the 2022-2023 annual report.

Rental income and occupancy rate

The net rental income amounted to € 67.71 million in the first six months of the financial year, an increase by 11.7% with respect to the comparable six months in the 2022- 2023 financial year. The net rental income in that period amounted to € 60.62 million. The occupancy rate on 30 September 2023 was 98.12%, compared to 98.08% on 31 March 2023.

Fair value1 of the real estate portfolio

The fair value of the real estate portfolio (including investment properties under construction) on 30 September 2023 amounted to € 1,930.24 million, which represents an increase by € 41.68 million (2.21%) compared to the fair value on 31 March 2023 (€ 1,888.56 million). This is attributable to the investments and divestments in the first six months and the variations in the fair value of investment properties.

The variation in the fair value of the real estate portfolio can mainly be explained by an increase in the value amounting to € 40.16 million. Based on the contractually owed rent, rent return (versus investment value) on the portfolio as determined by the real estate experts amounts to 6.94%.

As of 30 September 2023, the real estate portfolio consists of 1,008 properties with a lettable surface of 1,208,564 m².

Investments2 - retail parks

Retail Estates has acquired the retail park Alexandrium II Megastores in Rotterdam for an amount of € 81.5 million (including transfer tax, due diligence and transaction costs). The investment was financed partly with the proceeds of the successful issue of new shares in the context of the optional dividend for the amount of € 16.89 million, and with bank financing for the remainder. All retail units are currently leased out with a total rent of € 5,763,262.

The retail park Alexandrium II Megastores represents 26,500 m² of large-scale retail area subdivided into 18 units

with a large number of first-rate tenants like Mediamarkt, Decathlon, Pets Place, Sportsworld and Coolblue. It is one of the few out-of-town retail parks where the town planning regulations allow for large retail units that can also be used for non-bulky goods, such as clothing, shoes and sporting goods. The roof is fully covered with solar panels operated by a third party.

Alexandrium II Megastores is part of the largest out-of-town retail area in the Randstad region. The structural connection between Woonmall Alexandrium, the regional Shopping Center Alexandrium (Alexandrium I - owned by Klépierre) and the retail park Alexandrium II Megastores creates a very complementary mix and a retail offer that is exceptional for the Netherlands, with a total of 200 retail units over a surface area of 110,000 m². All shops are open 7 days a week and attract 15 million visitors each year.

We refer to the press release of 5 October 2023 for more information.

Investment properties under construction

On 30 September 2023 the total amount of the investment properties under construction is € 17.21 million. Retail Estates distinguishes five types of investment properties under construction: speculative land positions (the so- called "land bank", i.e. residual lands of existing portfolios that are intended for possible development or will be sold at a later stage if no redevelopment is possible); prospective projects, projects under predevelopment, projects under development and projects specifically linked to sustainability.

On 30 September 2023, the speculative land positions represented € 0.93 million, the prospective projects represented € 8.76 million, the projects under predevelopment represented € 2.11 million, the projects under development represented € 3.45 million and the projects specifically linked to sustainability represented € 1.95 million.

Management report Half-yearlyfinancial report 2023-2024

A. Investment properties under construction - prospection - overview of the main prospective projects

• In 2014, Retail Estates acquired the retail park at Wetteren with 14 retail units and a gross retail area of 10,423 m². The retail park, which opened in 2008, is known as Frunpark Wetteren. It is very successful and attracts consumers from far and wide. In 2016, Retail Estates acquired, by way of speculation, an adjacent plot of land with two SME properties (investment of approx. € 9 million), which are currently let. According to the Spatial Implementation Plan, a permit can in principle be obtained for retail properties destined for large-scale retail as well as for SME properties.

The completion of the mixed-use project with retail units and SME properties is expected in the course of 2024. The costs of the procedures already completed and the preparation of the request for an environmental permit currently amount to € 0.05 million. The investment in this extension is estimated at € 4.75 million.

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• In Verviers, a planning permission has been applied for to redevelop five existing retail properties into two retail properties, a covered parking lot and multipurpose spaces for local socio-cultural initiatives on the upper floors. Retail Estates expects to begin work at the earliest in spring 2024. The expected investment is € 2.95 million, of which € 0.15 million has been spent.

B. Investment properties under construction - predevelopment - overview of the main own developments

• In Eupen an existing retail property will be demolished and replaced by a new, smaller retail property. On the vacant, sold land, a partner will build 5 SME units. The expected additional investment amounts to € 1.4 million of which € 0.14 million has been spent. The completion is expected in the summer of 2024.
• In Denderleeuw, Retail Estates has applied for a planning permission to replace two older retail properties by a new building, which will again house two retail properties. If there is an agreement with the tenant, works will start in May 2024. The expected additional investment amounts to € 3.14 million, of which € 0.06 million has already been spent.