GECINA - REFERENCE DOCUMENT 2017

COMMENTS ON THE FISCAL YEAR Appraisal of property holdings

(iv)

(v)

€125 million in apartments and car parks (€92 million in book value as of December 31, 2016) were sold unit-by-unit in 2017;

€131 million of assets are in the process of being sold

in a block.

The breakdown of balance sheet valuation by segment as at December 31, 2017 was as follows:

Segments

2017 (In € million)

2017 (%)

Offices

15,752

80% 16%

02

Residential

3,160

Hotels & financial lease

482 254

2% 1%

Other activities TOTAL GECINA

19,648

100%

In accordance with the EPRA guidelines, the table below presents the reconciliation between the book value of buildings on the balance sheet and the total appraisal value of the property holdings:

12/31/2017

In € million

BOOK VALUE

19,462

Operating buildings (Hotels) Operating buildings (head office)

+74

+113

Other

(1)

PROPERTY PORTFOLIO VALUE

19,648

Company fair value accounted for under the equity method

+3

APPRAISAL VALUE

19,651

2.3.1

BUILDINGS IN THE OFFICE PROPERTY HOLDINGS

Valuation of the buildings in the office properties portfolio

12/31/2016*

Change

12/31/2017

In € million

Valuation of office properties

15,752

9,526 7,596

+65.4% +7.7%

Valuation of office properties on a like-for-like basis

8,179

*

including the head office at fair value.

Given the Eurosic acquisition in 2017 and the decline in interest rates, the value of the buildings in the office properties portfolio increased by 65% to €15,752 million compared with the value as at December 31, 2016 ( i.e. +€6,226 million). In 2017, the office properties investment market remained dynamic in an environment featuring abundant liquidity and low interest rates. Investors sought out secured commercial assets located in desirable areas. As such, the value of the Group’s office portfolio located in the Paris Central Business District appreciated by 10.3%, mainly in the first half. On a like-for-like basis, in 2017 the block value of the office assets was up by €583 million, representing a 7.7%

increase, reaching a total of €8,179 million (of which €191 million in the second half). The appreciation of office property assets can be explained by: a positive rate effect (+6.0%); ■ a positive business plan effect (+1.9%); ■ the slightly negative impact of the tax increase (-0.2%). ■ After recognition of capex (€17 million), the change in valuation was +€566 million (+7.5%). Capitalization rates fell overall by 31 bp to 4.34%). Potential rents per square meter remained mostly stable at €451/sq.m. Average valuation per square meter was €8,179.

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GECINA - REFERENCE DOCUMENT 2017