Altarea — Investor Presentation 2014

Mar 7, 2014

Disclaimer

• This presentation is not an offer to sell, a solicitation of an offer to sell or exchange securities, nor does it represent a recommendation to buy or to sell Altarea Cogedim securities.
• The distribution of this document in some countries may be restricted by law or regulation. As such, persons into whose possession this presentation may come are obliged to inform themselves of and to observe any such restrictions. To the extent permitted by applicable law, Altarea Cogedim disclaims any responsibility or liability for the violation of any such restrictions by any person.

INTRODUCTION	P. 4
2013 ACHIEVEMENTS	P. 5
FINANCE		P. 14
STRATEGY & OUTLOOK		P. 22
CONCLUSION		P. 34
APPENDICES		P. 35

INTRODUCTION

2013 ACHIEVEMENTS

A STRATEGIC PARTNERSHIP	Long-term partnership with Allianz € 395 million in equity raised Consolidated LTV reduced at 41.7% (vs 49.3% in 2012)
MOMENTUM FOR GROWTH IN ALL BUSINESSES	Solid operational performance in France Growth in the pipeline New product launches Strong upturn in volumes driven by sales to institutional investors Record year for new projects under development
A STRUCTURE IN LINE WITH AMBITIONS	Affirmation of the Group's development firepower Reallocation of equity to higher-value-added activities A durable structure to embody a new dimension

• Partnership over five "core" assets owned by the Group

• A partnership for each asset together with a framework agreement to allow Altarea Cogedim to maintain control of assets following the transaction(1)

• Term: 10 years + renewable 5-year terms

• Portfolio value: €806 million(2)
• Allianz investment: €395 million
• Initial rate of return: > 4%
• Final rate of return: ~5.5%(3)
• Service contracts: 100% Altarea Cogedim Group

(1) Operational, financial and accounting control (IFRS 10 and 11).

(2) At 100% including cost price of development of Toulon-La Valette.

(3) Including development of Toulon-La Valette.

• Excellent operational performance of French assets (84% of the portfolio)
• A portfolio made up mainly of large assets (44 assets, average value of €75 million)
• International (16% of the portfolio): decline in rental values, particularly in Italy

(controlled assets)

Tenant revenue(4) CNCC	+0.7% -2.1%
Visitor numbers CNCC	+0.1% -1.7%
Like-for like change in net rental income France	+5.0%
Occupancy cost ratio (5)	10.2%
(6) Bad debt	1.5%
rate(7) Financial vacancy	3.4%

(1) Assets in which Altarea holds shares and for which Altarea exercises operational control. Fully consolidated in the consolidated financial statements.

• (2) Assets in which Altarea is not the majority shareholder, but for which Altarea exercises joint operational control. Consolidated using the equity method in the consolidated financial statements.
• (3) Assets held entirely by third parties who entrusted Altarea with a management mandate for an initial period of three to five years, renewable.
• (4) Revenue development for shopping center tenants in 2013, l-f-l at 100%.

(5) Calculated as rent and expenses charges to tenants (incl. taxes) over the past 12 months (including rent reductions), in proportion to sales over the same period (incl. taxes).

• (6) Net amount of allocations to and reversals of provisions for bad debt plus any write-offs during the period as a percentage of total rent and expenses charged to tenants.
• (7) Estimated rental value (ERV) of vacant lots as a percentage of total estimated rental value. Excluding property being redeveloped.

SHOPPING CENTERS PIPELINE

• New projects under development, for €430 million in investment
• The pipeline potentially represents 70% of the standing portfolio (rents) (1)
• Back to pre crisis levels in growth dynamic

NEXT-GENERATION PROJECTS HIGH RETURN & STRICT COMMITMENT POLICY

Surface area GLA	5,005,218 ft² (465,000 m²)
o/w refurbishments/ extensions	2,152,780 ft² (200,000 m²)
o/w creations	2,852,436 ft² (265,000 m²)
Net investments(2) o/w Group share	€1.653 bil. €1.190 bil.
Provisional gross rental income	€153 mil.
Yield	9.3%

(1) Share of pipeline rents in proportion to share of rents of existing assets. (2) Net budget including interest expenses and internal costs.

E-COMMERCE IMPLEMENTING A DIGITAL & MULTICHANNEL OFFERING

• Redesign of the website and higher quality positioning
• Implementation of the multi-channel strategy

« THE MULTI-CHANNEL REIT	» : WORK IN PROGRESS		OPERATIONAL INDICATORS
MARKET PLACE	STORE TO WEB	WEB TO STORE	numbers(1) Visitor	188 million
	E-commerce Campus		Business volume o/w High-tech O/w Galerie Galerie Marchande Commissions	€429 million €319 million €110 million €9.6 million
	Travel retail	st in-store product 1 search engine	Average rate % of retail sales New merchants in 2013 Retailers from shopping centers	8.8% 340 60

Visitor numbers(1)	188 million	+4.1%
Business volume	€429 million	+1%
o/w High-tech O/w Galerie	€319 million €110 million	+1% +2%
Galerie Marchande Commissions	€9.6 million	+ 1%
Average rate % of retail sales	8.8%	stable
New merchants in 2013	340
Retailers from shopping centers	60

(1) Total number of connections to the site in 2013 (source: Xiti)

• Reservations driven by sales to institutional investors and change in product mix
• A bang in line offer with demand (entry-level / mid-range, serviced residences, new neighborhoods)
• Decline in operating results: base effect and maintain in absorption rate

RESERVATIONS: €1.016 billion (+18%) OPERATIONAL KPI

Reservations (in value terms) o/w sales to institutional investors	€1.016 billion €366 million	+18% +70%
Reservations (no. of units)	3,732	+17%
Revenue	€883 m	-3%
Operating income % of revenue	€62.3 million 7.1%	-38%
Backlog(1)	€1.331 billion 17 months	-6% (18 months)
Offering and portfolio(2) Number of units	€4.430 billion 16,580	+9% +22%

(1) The backlog comprises revenues excluding tax from notarized sales to be recognized on a percentage-of-completion basis and individual and block reservations to be notarized.

(2) Properties for sale include units available for sale (expressed as revenue incl. tax), and the future offering is made up of programs at the development stage (through sales commitments, almost exclusively unilateral in nature) that have yet to be launched (expressed as revenue incl. tax)

• Enlargement of the portfolio of projects under development (110,000 m² + for €597 million(1) )
• A recovery leveraged by AltaFund (≈ half of new projects)
• Contribution to operating income up significantly

(1) Off-plan or under property development contracts: Amount signed. Delegated project management: capitalized fees. AltaFund investment: cost price.

SUSTAINABLE DEVELOPMENT AND CSR A RESPONSIBLE COMPANY

• Sustainable development: a key issue for the Group

• A major player in job creation

• No. 1 French developer (1) & 3rd among French property companies

• In the top three for the past 3 years

• 90%: level of transparency

• B for performance
• No. 1 French retail REIT

(2) Jobs supported in France.

(1) Tie.

• Score of 77%
• No. 1 French developer & no. 9 worldwide (out of 276)

MARKED PERFORMANCE MORE THAN 14,000 DIRECT AND INDIRECTS JOBS

Indicator verified by Ernst & Young

A STRENGTHENED BALANCE SHEET	Growth in equity Reduction of LTV ratio Robust liquidity	€1.833 billion +35% 41.7% -762 bps €338 million
RESULTS IN LINE WITH OBJECTIVES	Operating cash flow FFO (Group share) EPRA NNNAV	€218.6 million -3% €142.2 million -5% €1.4912 billion +5%
INDICATORS PER SHARE	FFO (Group share) /share EPRA NNNAV/share	€12.7/share -11% €128.7/share -2%

• Growth in consolidated equity: +64% in two years
• €125 million in script dividends
• €609 million in equity raised from third parties (minority interests)

MAIN TRANSACTIONS

In € millions	2012	2013	TOTAL
Subordinated perpetual notes (TSDI) taken up by APG	109		109
Full consolidation of Cap 3000	159		159
Partnership with Allianz		324	324
Acquisition of 15% of Bercy Village		17	17
(1) Script dividend	69	56	125
TOTAL	337	397	734

MAIN TRANSACTIONS 2011-2013 CONSOLIDATED EQUITY(2)

(1) Creation of 1.4 million shares in 2012 and 2013.

(2) €1.833 billion in 2013, o/w €1,151million Group share and €682 million minority share.

• LTV: 41.7%
• ICR: 4.5x

• Term: 4.1 years

• Decline in contributions from Residential and E-commerce segments

• Offset by sound performances in brick-and-mortar Retail and Office property

(1) Initial application of IFRS consolidation standards 10, 11 and 12 as of December 31, 2013 => 2012 data has been restated to facilitate comparison. Please refer to Business Review.

• Consolidated FFO
• FFO (Group share)
• Net consolidated income
• Net income (Group share)

€167.7 million (+6%)

• €12.7/share (-11%) €142.2 million (-5%)
• €220.0 million €146.2 million

€13.0/share (+146%)

(1) Group share and other. FFO (Group share): €142.2 million (-5%).

(2) Group share and other. Net Profit (Group Share): €146.2 million (+162%).

(3) Asset disposal, deferred taxes and estimated expenses.

• EPRA NNNAV up 4.6% to €1.491 billion
• On a per-share basis, a 1.6% decline to €128.7/share (dilutive effect of the 2012 dividend payout in shares)

(1) EPRA NNNAV (liquidation NAV): Market value of equity from the perspective of liquidation // EPRA NAV: €134.9 (-9.2%) // Going concern NAV: €134.2 (-3.1%). Diluted number of shares, recognizing all shares subscribed in the payment of dividends in shares and the capital increase associated with Bercy Village (681,634 shares).

• €10 dividend per share for FY 2013

proposed at the General Meeting of May 7, 2014

• €10.0 dividend, o/w

• €0.35/share as repayment of share premiums
• €2.58/share as distribution of tax-exempt income (SIIC)
• €7.07/share as distribution of taxable income
• An option to reinvest the dividend in shares will be proposed on the basis of payment in shares representing 90% of the average stock price over the 20 trading days preceding the General Meeting.

STRATEGY & OUTLOOK

• Multi-expertise team
• Comprehensive ability to design innovative and profitable projects
• Adaptability, creativity, efficient structure and strong motivation driven by entrepreneurial spirit

DEVELOPMENT PROJECTS UNDERWAY MANAGED BY THE GROUP TEAMS (Figures at 100%) MULTI-EXPERTISE TEAM

	Surface areas	Market value
Retail (1)	5,005,218 ft² 465,000 m²	€2.6 billion
Residential (2)	10,258,000 ft² 953,000 m²	€4.4 billion
(3) Offices	4,919,000 ft² 457,000 m²	€1.4 billion
Total	20,204,000 ft² 1,877,000 m²	€8.4 billion

• 1,300 employees
• Development firepower
• Marketing, Sales
• Development of new products R&D and design
• Digital expertise
• Financial / legal engineering
• Achievements, markets

(1) Pipeline of programs under development (.i.e., excluding identified projects currently under review), GLA, value: rents capitalized at 6%.

(2) Properties for sale + portfolio assets (i.e., excluding programs under construction).

(3) Off-plan / property development contracts: Share of amounts signed, delegated project management: Share of capitalized fees.

• A fundamentally "Retail REIT" risk profile
• Significant contribution from other businesses for limited allocation of equity
• Major investment partners at the center of the model

STRUCTURE EVOLUTION

CONSOLIDATION AND DURABILITY

• Supervisory Board: appointment of a new President
• Executive Board: enlargment
• Foncière des Régions exits and is replaced by Crédit Agricole Assurances

L'AVENUE 83 – TOULON LA VALETTE A CONTROLLED-RISK INVESTMENT

• The Group acts as: once developer, investor, garantor and asset manager.
• The Group sources the project (land management, authorizations, design).

• For Allianz: a secured investment in terms of investment (property development contract with group warranty) and return (partial rent guarantee at opening).

• 549,000-ft² (51,000-m²) shopping & entertainment center

• 16-screen Gaumont Pathé multiplex
• 2 specialized department stores + 14 MS stores + 60 shops
• 20 restaurants, 32,000 ft² (3,000 m²) of outdoor dining space
• Part of an urban mixed-use project (housing, offices, hotel)

BLOCK HOUSING SALES

A MIXED-USE PRODUCT FOR ENHANCED RETURN

• The Group acts as developer and manager of residential and retail property.
• For Crédit Agricole Assurances, the mixed-use nature of the product offers an attractive overall return.

• The program contributes to the development of a "New Neighborhood," which will ultimately be a source of value creation for the investor.

• The Group is at once developer, manager and investor (subletting).

• Crédit Agricole Assurances invested in:
• the residences (block sales)
• the management company (35% interest)
• Increased return and appreciating business assets

• For individual purchasers: advantageous tax environment + rental risk borne by the management company

• Downtown location and variety of à la carte services

• Seniors maintain their independence in an environment that promotes a dynamic social life and active lifestyle
• Residences are built and managed by the Group

• Investment per unit => wealth management approach

• The Group acts as developer, fund and asset manager and investor.

• AltaFund draws from the expertise of the Group: exclusive Cogedim developer, 100% discretionary investment
• Significant Group stake (17% of AltaFund) => ensure rigorous management for investors

E-COMMERCE CAMPUS // QWARTZ CROSSING THE BARRIERS BETWEEN CHANNELS

• A unique multichannel offer for retailers
• A large range of brick-and-mortar and/or digital channels

2014 A YEAR OF TRANSITION

ONGOING TRENDS	• Growth in rental income like-for-like • Impact of Allianz partnership (rental income sharing) • Digital investments • Increase in sales (new offer) • End of the contribution of « millésime 2010-2011 » programs • Temporary decrease in results • New projects under development • Rising contribution to results
IMPACTS ON FFO	• Sound drop in first semester 2014 • Strong upturn expected by the end of the year

	• Credit market: similar conditions
MACRO-ECONOMIC ASSUMPTIONS	• Real estate prices and rents under pressure
	• End of worsening in legal and fiscal environment
	• Pipeline roll-over funded by sharing/disposals of standing assets • E-commerce contribution back to equilibrium
OPERATIONAL ASSUMPTIONS	• Target: 7,500 units with adapted margin
	• Target: €300 to €500 million of yearly new projects

Lower risk profile (LTV < 45%)

Pursuit of the partnership policy

FFO 2017-2018: > €200 mil. in Group share

2015 dividend: €10.0 /share minimum with script dividend option in shares

In € millions	Funds from operations )	(FFO	12/31/2013 Changes in value , estimated expenses and transaction costs	TOTAL	Funds from operations (FF O)	12/31/2012 restated Changes in value, estimated expenses and transaction costs	TOTAL	12/31/2012 published Funds from operations (FFO)
Shopping centers	196.1	19%	-	196.1	164.9	0.9	165.8	190.9
Online retail	328.1	1%	-	328.1	325.2	(0.0)	325.1	325.1
Residential	883.3	(3)%	-	883.3	915.0	-	915.0	949.2
Offices	110.8	40%	-	110.8	79.4	-	79.4	118.8
REVENUE	1,518.4	2%	-	1,518.4	1,484.5	0.9	1,485.4	1584.0
Shopping centers	153.9	21%	68.5	222.4	127.1	13.6	140.7	135.0
Online retail	(12.5)	106%	(47.0)	(59.5)	(6.0)	(7.9)	(13.9)	(6.0)
Residential	62.3	(38)%	(5.2)	57.0	100.7	(4.7)	95.9	100.6
Offices	15.5	211%	(1.9)	13.6	5.0	(2.9)	2.1	5.1
Other	(0.6)	(76)%	(0.6)	(1.2)	(2.5)	(0.6)	(3.0)	(2.5)
OPERATING INCOME	218.6	(3)%	13.8	232.4	224.3	(2.5)	221.7	232.2
Net borrowing costs	(48.2)	(25)%	(6.6)	(54.8)	(63.9)	(3.3)	(67.2)	(71.7)
Discounting of debt and receivables	-		(0.2)	(0.2)	-	(0.0)	(0.0)	-
Changes in value and profit / (loss) from disposal of financial instruments	-		22.2	22.2	-	(73.9)	(73.9)	-
Proceeds from the disposal of investments	-		(0.0)	(0.0)	-	0.7	0.7	-
Corporate income tax	(2.7)		23.2	20.4	(1.7)	(19.3)	(21.0)	(1.9)
NET PROFIT	167.7	6%	52.3	220.0	158.6	(98.4)	60.2	158.6
Income attributable to equity holders of the parent	142.2	(5)%	4.1	146.2	149.7	(93.8)	55.9	149.7
Average diluted number of shares (in mil.)	11,232				10,548			10,547
FF0 (group share)/share	12.66	(11)%			14.19			14.19

	12/31/2013	12/31/2012	12/31//2012
In € millions		restated	published
NON-CURRENT ASSETS	3 600.7	3 558.7	3 617.5
Intangible assets	237.7	276.7	276.7
o/w goodwill	128.7	166.6	166.6
o/w brands	98.6	98.6	98.6
Other intangible assets	10.4	11.5	11.5
Property. plant and equipment	12.6	11.3	11.4
Investment properties	3 029.0	3 021.9	3 200.3
o/w investment properties in operation at fair value	2 917.9	2 869.6	3 037.3
o/w investment properties under development and under construction at cost	111.1	152.4	163.0
Securities and investments in equity affiliates and unconsolidated interests	278.6	210.6	84.7
Loans and receivables (non-current)	6.6	6.8	18.3
Deferred tax assets	36.2	31.4	26.0
CURRENT ASSETS	1 292.2	1 376.7	1 504.3
Non-current assets held for sale	1.7	4.8	4.8
Net inventories and work in progress	606.4	658.8	702.6
Trade and other receivables	428.2	402.9	456.7
Income tax credit	2.3	1.8	1.8
Loans and receivables (current)	18.1	15.3	16.3
Derivative financial instruments	0.8	0.1	0.3
Cash and cash equivalents	234.9	293.0	321.8
TOTAL ASSETS	4 892.9	4 935.4	5 121.8

BALANCE SHEET (2/2)

	12/31/2013	12/31/2012
In € millions		restated	published
EQUITY	1 832.9	1 362.0	1 362.0
Equity attributable to Altarea SCA shareholders	1 151.3	1 023.7	1 023.7
Share capital	177.1	131.7	131.7
Other paid-in capital	437.0	481.6	481.6
Reserves	391.0	354.6	354.6
Income associated with Altarea SCA shareholders	146.2	55.9	55.9
Equity attributable to minority shareholders of subsidiaries	681.6	338.2	338.2
Reserves associated with minority shareholders of subsidiaries	498.8	224.9	224.9
Other equity components, subordinated perpetual notes	109.0	109.0	109.0
Income associated with minority shareholders of subsidiaries	73.8	4.3	4.3
NON-CURRENT LIABILITIES	1 782.5	2 259.1	2 371.8
Non-current borrowings and financial liabilities	1 722.7	2 148.0	2 254.2
o/w participating loans	12.7	13.9	14.8
o/w non-current bond issues	248.5	250.0	250.0
o/w borrowings from credit institutions	1 432.3	1 867.4	1 972.7
o/w other borrowings and debt	29.2	16.7	16.7
Other non-current provisions	21.1	21.7	25.7
Deposits received	26.8 27.1		29.1
Deferred tax liability	11.9	62.3	62.9
CURRENT LIABILITIES	1 277.6	1 314.3	1 388.0
Current borrowings and financial liabilities	436.2	303.5	311.1
o/w borrowings from credit institutions (excluding overdrafts)	323.4	264.5	282.3
o/w treasury notes and accrued interest	28.0 -		2.7
o/w bank overdrafts	39.7 1.8		2.7
o/w other borrowings and debt	44.9 37.2		26.1
Derivative financial instruments	73.7	171.5	181.2
Accounts payable and other operating liabilities	739.5	836.4	892.9
Tax due	28.1	2.8	2.8
Amount due to shareholders	0.0	0.0	0.0
TOTAL LIABILITIES	4 892.9	4 935.4	5 121.8

GROUP NAV	12/31/2013				12/31/2012
	In € millions	Change	€/share	Change/s hare	In € millions	€/share
Consolidated equity, Group share	1,151.3		99.3		1,023.7	93.8
Other unrealized capital gains	317.6				381.9
Restatement of financial instruments	71.5				177.1
Deferred tax on the balance sheet for non-SIIC assets (international assets)	23.4				38.0
EPRA NAV	1,563.9	(3.5)%	134.9	(9.2)%	1,620.7	148.6
Market value of financial instruments	(71.5)				(177.1)
Fixed-rate market value of debt	(2.3)				–
Effective tax for unrealized capital gains on non-SIIC assets*	(32.1)				(50.3)
Optimization of transfer duties *	48.7				48.3
Partners' share**	(15.4)				(15.7)
EPRA NNNAV (liquidation NAV)	1,491.2	4.6%	128.7	(1.6)%	1,425.9	130.7
Estimated transfer duties and selling fees	63.6				86.2
Partners' share**	(0.7)				(0.9)
Diluted Going Concern NAV	1,554.1	2.8%	134.1	(3.2)%	1,511.2	138.5

* Varies according to the type of disposal, i.e. sale of asset or sale of securities.

** Maximum dilution of 120,000 shares.

*** Number of diluted shares. 11,590,807 10,909,159