2018 En million d'euros	Revenus 100%	Revenus Part du Groupe	Variation	Var. à périmètre constant	Taux d'occupation (%)	Maturité des baux
Bureaux - France	271	242	$-1,8%$	$+2,8%$	97,1%	$4,6$ ans
Bureaux - Italie	190	85	$-3.1%$	$+1,3%$	97,9%	$7.7$ ans
Résidentiel - Allemagne	241	154	$+6.7%$	$+4,4%$	98,7%	n.a.
Hôtels – Bail	208	77	$+0,8%$	$+4,2%$	100%	13,8 ans
Hôtels - Murs et fonds (EBITDA)	75	31	$+135.5%$	$+5,6%$	n.a.	n.a.
Total activités stratégiques	985	590	$+3,7%$	$+3,4%$	98,1%	$7,1$ ans
Non-stratégique (Résidentiel France, Commerce Fr & Ita)	45	26	$-21,9%$	$-2,8%$	93,5%	n.a.
Total	1030	616

		Variation des valeurs d'actifs à périmètre constant
PATRIMOINE 100% 22,8 Md€		BUREAUX FRANCE	$+2,2%$	PARIS +2,8% CROISSANT OUEST & LA DÉFENSE +1,8% GRANDES MÉTROPOLES RÉGIONALES +3,5%
PATRIMOINE PDG $15,3$ Mde	2018 Variation à périmètre constant	BUREAUX ITALIE	$+0,2%$	MILAN +1,8% ITALIE HORS MILAN -3,7%%
	$+4,4$	RESIDENTIEL	$+11,6%$	BERLIN +12,4% HAMBOURG +13,1%
RENDEMENT LOCATIF		ALLEMAGNE		DRESDE & LEIPZIG +13,2% RNW +9,2%
5,0.		HOTELS EN EUROPE	$+3,0%$	PARIS +2,9% BERLIN +3,4%
				MADRID +9,4%

1. OVERALL BUSINESS ANALYSIS	10
2. ANALYSIS BY ACTIVITY FRANCE OFFICES ITALY OFFICES GERMAN RESIDENTIAL HOTELS IN EUROPE	21 32 41 48
3. FINANCIAL INFORMATION	55
4. FINANCIAL RESOURCES	65
5. EPRA REPORTING	70
6. FINANCIAL INDICATORS	78
7. GLOSSARY	79

1. BUSINESS ANALYSIS

2018 showed excellent operating results on the four activities of Covivio, thanks to the strategic choices implemented and supportive markets. The Group reinforced its footprint in its strategic locations through a sustained asset rotation policy, thus strengthening the strong rental growth on strategic activities and the value creation on its portfolio.

Changes in scope:

Two major transactions were completed this year, with an impact on Covivio's percentage ownership of its subsidiaries:

The merger between Covivio and its Italian subsidiary Beni Stabili took effect as of 31 December 2018. Previously, in the second quarter 2018, Covivio had increased its stake in its subsidiary to 59.9% (vs 52.4% at end- 2017).
The merger of Covivio Hotels and its hotel operating activities subsidiary FDMM reduced Covivio's stake in Covivio Hotels from 50% at 31 December 2017 to 42.3% at 31 December 2018.

A. RECOGNISED REVENUES : +3.4% LFL GROWTH ON STRATEGIC ACTIVITIES

		100%				Group share
	2017	2018	Change (%)	2017	2018	Change (%)	Change (%) LfL 1	% of revenue
France Offices	272.1	271.1	- 0.4%	246.9	242.4	- 1.8%	+2.8%	39%
Paris	81.9	90.3	+10.3%	77.3	85.3	+10.3%	+2.4%	14%
Greater Paris (excl. Paris)	136.1	133.0	- 2.3%	115.3	109.6	- 5.0%	+3.0%	18%
Major regional cities	30.9	29.9	- 3.2%	30.9	29.7	- 4.0%	+4.6%	5%
Other French Regions	23.3	17.9	- 23.2%	23.3	17.9	- 23.2%	- 0.7%	3%
Italy Offices	187.0	190.0	+1.6%	87.3	84.6	- 3.1%	+1.3%	14%
Offices - excl. Telecom Italia	88.4	95.7	+8.2%	46.3	55.6	+19.9%	+1.5%	9%
Offices - Telecom Italia	98.6	94.3	- 4.4%	40.9	29.0	- 29.1%	+1.0%	5%
German Residential	230.1	241.2	+4.8%	144.2	153.9	+6.7%	+4.4%	25%
Berlin	103.4	116.6	+12.8%	70.6	74.8	+5.9%	+4.9%	12%
Dresden & Leipzig	21.3	23.3	+9.4%	14.0	14.8	+6.2%	+3.4%	2%
Hamburg	14.2	15.9	+12.0%	9.2	10.6	+15.6%	+3.1%	2%
North Rhine- Westphalia	91.3	85.3	- 6.5%	50.5	53.6	+6.3%	+4.6%	9%
Hotels in Europe	241.8	282.9	+17.0%	90.1	108.8	+20.7%	+4.7%	18%
Hotels - Lease Properties	174.1	208.4	+19.7%	76.8	77.4	+0.8%	+4.2%	13%
France	89.7	100.9	+12.5%	34.9	32.2	- 7.8%	+4.8%	5%
Germany	22.3	27.9	+25.0%	10.8	11.5	+6.4%	+1.7%	2%
Belgium	21.4	20.9	- 2.5%	10.7	8.8	- 17.6%	+5.4%	1%
Spain	33.3	34.3	+3.0%	16.6	14.5	- 12.9%	+4.8%	2%
Others	7.4	24.5	+230.7%	3.7	10.4	+179.7%	+2.4%	2%
Hotels - Operating Properties (EBITDA)	67.7	74.5	+10.0%	13.3	31.4	+135.5%	+5.6%	5%
Total strategic activities	931.1	985.1	+5.8%	568.5	589.7	+3.7%	+3.4%	96%
Non- strategic	64.1	45.2	- 29.5%	33.8	26.4	- 21.9%	- 2.8%	4%
Retail Italy	17.8	15.8	- 11.5%	9.3	9.4	+0.4%	- 5.2%	2%
Retail France	34.8	21.4	- 38.4%	17.4	9.1	- 47.9%	+1.6%	1%
Other (France Residential)	11.4	7.9	- 30.7%	7.0	7.9	+13.1%	n.a.	1%
Total	995.1	1,030.3	+3.5%	602.2	616.0	+2.3%	+3.2%	100%

1 LfL : Like- for- Like Group share revenues increased by 2.3% year- on- year (+ million) primarily due to:

acceleration of like- for- like revenue growth of 3.4% on strategic activities 16.6 million ) with:
o +2.8% in France Offices, thanks to the indexation (+0.9 pt) and good rental performance (+2.0 pts including +1.0 pt related to successful renewals)
o +1.3% in Italy Offices driven by Offices in Milan excluding Telecom Italia (+1.8%)
o +4.4% in German Residential, including 2.0 pts from indexation and 2.4 pts from renewals
o +4.7% in Hotels thanks to the good performance of variable rents in France and Belgium (+4.8% and +5.4% respectively) and EBITDA growth on management contracts (+5.6%)
acquisitions (+ .9 million) in particular in German Residential 2.7 million), with the acquisition of over 3,100 apartments primarily in Berlin upscal 7.0 million this year
deliveries of new assets in 2018 15.2 million), mainly in France Offices (+ ). In Italy, three 4 million), including the first phase of the Symbiosis project in Milan.
asset disposals: (- 58.1million), especially:
o in France Offices (- 2 million), mostly non- core assets in the 2nd ring and French regions.
o in Italy (- 6.6million), mostly through the syndication of 49% of the Telecom Italia portfolio of which 40% at the end of June 2017 and 9% in early 2018
o in German Residential (- .3 million) with the sale of over 2,500 apartments, including almost 60% of non- core assets in North Rhine- Westphalia
o in Hotels (- 1.2 million) with the disposal of non- core hotels (mostly Sunparks resorts)
o non- strategic assets (- million) mainly Retail in Italy and France (the Quick portfolio and Jardiland stores).
vacating for development (- France Offices
change in scope effects million) mainly due to the increase in Covivio's stake in Beni Stabili to 59.9% in the second quarter 2018 8.9 million).

B. LEASE EXPIRATIONS AND OCCUPANCY RATES

1. Annualised lease expirations:		7.1 years		of average lease term on strategic activities
(Years)		By lease end date (1st break)		By lease end date
Group share	2017	2018	2017	2018
France Offices	5.0	4.6	6.0	5.4
Italy Offices	7.6	7.7	8.1	8.1
Hotels in Europe	11.2	13.8	13.3	15.5
Total strategic activities	6.6	7.1	7.7	8.0
Non- strategic	6.4	4.8	7.0	5.8
Total	6.6	7.0	7.7	7.9

The average firm residual duration of leases increased by 0.5 years to 7.1 years at end- 2018, driven- up by the signing of 25- year firm leases with IHG on the hotel portfolio acquired in the United Kingdom.

In Italy, the average firm lease term increased thanks to successful renewals and despite the syndication of an additional 9% of the Telecom Italia portfolio.

In France, the firm lease duration fell by 0.4 point due to approaching maturities on assets in the managed pipeline which are under control (especially Cap18).

	By lease end date (1st break)	% of total	By lease end date	% of total
2019	63.4	9%	41.0	6%
2020	31.6	4%	31.4	4%
2021	46.8	7%	44.3	6%
2022	47.2	7%	42.1	6%
2023	48.6	7%	47.0	7%
2024	19.3	3%	22.4	3%
2025	45.0	6%	48.0	7%
2026	45.0	6%	45.6	6%
2027	25.9	4%	39.0	5%
2028	21.1	3%	19.5	3%
Beyond	125.3	18%	138.8	19%
German Residential	159.9	22%	159.9	22%
Hotel operating properties	28.0	4%	28.0	4%
Other (Incl. French Residential)	6.8	1%	6.8	1%
Total	713.9	100%	713.9	100%

The percentage of lease terms under three years stands at 20%, giving the Group excellent visibility over its cash flows.

T 63.4 million due to expire in 2019 include:

~10% on offices assets to be redeveloped in Paris and Milan (especially Gobelins in Paris, already committed)
~25% related to offices assets in France and Italy in the managed pipeline, for which renewals are under control (Vinci in Greater Paris and Cap18)
~30% to long- term partners of the Group (EDF, Orange, Telecom Italia)
~25% involve assets in highly sought locations (mostly offices in Paris CBD and Milan CBD, hotels in Madrid and Barcelona).
~5% of non- strategic retail assets in Italy that the Group aims to dispose

2. Occupancy rate: (%)	a high level of 98.1%	Occupancy rate
Group share	2017	2018
France Offices	97.4%	97.1%
Italy Offices	97.0%	97.9%
German Residential	98.4%	98.7%
Hotels in Europe	100%	100.0%
Total strategic activities	98.0%	98.1%
Non- strategic	96.2%	93.5%
Total	97.9%	98.0%

The occupancy rate increased to a record high at 98.1% for strategic activities. Covivio maintains an elevated level of occupancy in the long- term with more than 96% on average over 10 years.

France Offices remained stable above 97% and Italy Offices increased due to the successful letting activity and despite the syndication of the Telecom Italia portfolio.
Occupancy remained very high in German Residential and stayed at 100% in Hotels.

C. BREAKDOWN OF REVENUES GROUP SHARE

By major tenants

In 2018, Covivio continued its strategy of diversifying its tenant base. As a result, exposure to the three largest tenants continues to fall (20% compared to 21% at end- 2017 and 41% at end- 2014), notably thanks to the disposals of non- core assets in France (Orange and Eiffage assets in French regions) and Italy (syndication of the Telecom Italia portfolio and asset disposals outside Milan).

D. COST TO REVENUE RATIO BY BUSINESS

	France Offices	Italy Offices (incl. retail)	German Residential	Hotels in Europe (incl. retail)	Other (incl. France Residential)	Total
	2018	2018	2018	2018	2018	2017	2018
Rental Income	242.4	94.0	153.9	86.5	7.9	588.9	584.7
Unrecovered property operating costs	- 8.3	- 7.8	- 1.3	- 1.0	- 2.0	- 27.8	- 20.6
Expenses on properties	- 1.8	- 8.4	- 11.5	- 0.3	- 1.0	- 19.2	- 23.1
Net losses on unrecoverable receivable	- 0.0	- 0.8	- 1.2	- 0.0	- 0.0	- 2.5	- 2.0
Net rental income	232.3	76.9	139.8	85.1	4.9	539.4	539.0
Cost to revenue ratio	4.2%	18.2%	9.1%	1.5%	38.3%	8.4%	7.8%

The cost to revenue ratio (7.8%) decreased by 0.6 pt compared to 2017, mainly thanks to France Offices (- 1.7 pts following the disposal of the residual Logistics assets) and German Residential, (- 1.6 pts thanks to a stronger position in Berlin and costs optimisation).

GROUP SHARE REALISED AND SECURED IN 2018

		Disposals (agreements as of end of 2017 closed)	Agreements as of end of 2017 to close	New disposals 2018	New agreements 2018	Total 2018	Margin vs 2017 value	Yield	Total Realised Disposals
		1		2	3	= 2+3			= 1 + 2
France Offices	100 %	82	28	160	7	167	3.1%	4.6%	242
	Group share	82	28	160	7	167	3.1%	4.6%	242
Italy Offices	100 %	27	-	244	0	244	- 3.6%	6.8%	271
	Group share	13	-	172	0	172	- 2.4%	6.6%	185
German Residential	100%	122	16	148	13	162	18.7%	4.2%	270
	Group share	78	10	97	8	105	18.5%	4.2%	174
Hotels in Europe 1	100 %	3	18	132	272	404	1.5%	5.8%	135
	Group share	1	8	56	58	114	- 0.3%	6.1%	57
Non- strategic (France Resi.,	100 %	220	6	296	200	496	8.2%	3.1%	515
Logistics, Retail in France)	Group share	112	6	190	200	390	7.1%	2.6%	302
Total	100 %	453	69	980	493	1,472	4.6%	4.7%	1,433
	Group share	286	52	674	274	948	4.7%	4.3%	960

Disposals realised and secured in 2018 1.2 billion in Group s 1.9 billion at 100%). Covivio has pursued the reduction of its exposure to secondary locations, consolidated value- creation on mature assets and withdrawn from non- strategic activities:

non- core assets: 526 million Group share of which 54% in Offices (including the syndication of an additional 9% of the Telecom Italia portfolio), 24% in North Rhine-Westphalia residential assets and 22% in hotels.
mature assets: 206 million Group share 49 million Group share) including the 10 and 30 Avenue Kléber in Paris, and some privatizations of Residential assets Berlin .
non- strategic assets : 502 million Group share with the entire French Residential portfolio ( etail assets in France and Italy ( million for a shopping

Additionally, disposal agreements amounting to were signed in 2018, comprising 59 B&B hotels in France in secondary locations and. Including this latter agreement, non- strategic assets account for less than 2% of the portfolio vs 6% at end- 2017.

E. DISPOSALS:

REALISED IN GROUP SHARE

		Acquisitions 2018 realised		Development capex 2018
	Acquisitions 100%	Acquisitions Group share	Yield Group share	Capex 100%	Capex Group share
France Offices	137	151	n.a.	120	96
Italy Offices	106	63	6.2%¹	48	28
Acquisition of Beni Stabili shares	n.a.	263	5.4%	-	-
German Residential	468	324	4.5%²	81	53
Reinforcement Germany	n.a	51	4.9%	-	-
Hotels in Europe	916	387	5.1%	41	16
Total	1,626	1,239	5.0%	290	194

1 Potential yield on acquisitions.

2 Yield in 2 years after reletting of vacant spaces. Immediate yield is 3.6% on acquisitions realised.

4 billion Group share 9 billion at 100%) of investments were realised in 2018, Covivio continued to strengthen its position in its strategic markets, in particular in France and Italy Offices and in German Residential with:

Acquisitions billion at 100%)
o an asset with a large redevelopment potential in Paris CBD, rue Jean Goujon, This acquisition was realised in the context of an asset swap: Covivio sold two core mature assets, occupied by Covivio, located avenue Kléber in Paris CBD.
o three assets in Milan for 106 million at 100%) at a potential yield of 6.2%.
o the acquisition of residential assets worth 468 million at 100%) in Germany, including 67% in Berlin ². These assets will generate an attractive yield of 4.5% after re- letting of the vacant surface and have a 40% reversion potential
o the acquisition of a portfolio of twelve 4* and 5* hotels located in major cities in the United-Kingdom, amounting to 2,638 rooms for 95 million at 100%) with a 5.1% minimum guaranteed yield and a 6% target yield. Two of the assets will be transferred in 2019.
Capex in the development pipeline with 194 million Group share ( 290 million at 100%) of capex, mostly related to development projects in Paris and Milan and acquisitions of land banks in Berlin ².
The reinforcement in Beni Stabili realised in the second quarter 2018 from 52.4% ownership to

works on the operating portfolio were realised, German Residential (see page 47 for more details on German Residential capex).

G. DEVELOPMENT PROJECTS:

1. Deliveries: 35,000 m² of office spaces and 653 hotel rooms delivered in 2018

Seven projects were delivered in 2018 totalling 35,000 m² of office spaces in France and Italy and 653 hotel rooms, with an average occupancy rate of 97%. These were:

The first phase of Symbiosis in Milan (20,500 m² of offices), 100% let to Fastweb with a yield on cost of 7.6%, above the initial target (6.8%)

6 GROUP SHARE)

Colonna in Milan (3,500 m² of offices), 100% let
Riverside in Toulouse (11,000 m² of offices), 83% let. Negotiations are under way for the leasing of the remaining surfaces
A Meininger hotel in Milan (131 room) which involved the conversion of an office asset into a hotel
2 B&B hotels in Berlin and Greater Paris (Chatenay- Malabry) for 267 rooms in total
The first Motel One in France, in Paris 12th (255 rooms).

Covivio's value creation amounted to a 25% increase on assets delivered in 2018. In addition, the yield recognised upon delivery of these assets proved to be up to about 6.9%.

Committed project s: 3 bn in Group share) Bn

Covivio stepped- up its committed pipeline in 2018 with more of new projects, thus more than doubling it Currently, 31 projects are under way in three European countries at 80% in Paris, Berlin and Milan. They will be completed between 2019 and 2021. The new projects include:

Flow in Montrouge 23,600 m²: new urban campus in the Montrouge- Malakoff- Châtillon business district. The asset is fully pre- let 18 months ahead of the delivery (scheduled in 2020).
IRO in Châtillon 25,600 m²: new office building in the same strategic area of Montrouge-Malakoff- Châtillon. IRO is currently the only project to be delivered in the area until 2020.
Jean Goujon in Paris CBD 8,500 m²: full redevelopment into a flagship prime asset of an asset purchased in 2018. Covivio plans to regroup all its Paris team after completion scheduled for 2021.
Gobelins in Paris 5th 4,400 m²: former Orange building being redeveloped. Covivio will set- up its new flex- offices & coworking offer, Wellio, on the entire surface.
N2 in Paris 17th 15,900 m²: mixed- use project with offices, flex- offices & hotel in the attractive Batignolles area. The project is shared with ACM (50%) and the delivery is scheduled for 2021.
Via Dante in Milan 5,100 m²: renovation of a trophy building in the CBD near the Piazza Duomo. Covivio will host its Wellio co- working brand there for the opening of its first site in Milan.
The Sign in Milan 26,500 m²: new offices located on the Southwest edge of the centre of Milan. The first building (9,600 m²) is already pre- let to AON two years before delivery in 2020.
The Symbiosis School in Milan 9,200 m²: new building part of the Symbiosis area in a growing business district at the South East limit of Milan. This asset is pre- let to Ludum and delivery is scheduled for 2020.
Residential projects in Berlin 454 units: 111 million of new construction and extension projects ². Some units will be sold (with more than 40% margin) and some will be let (with a yield on cost of 4.8%).

	Committed projects	Location	Project	Surface 1 (m²)		Delivery Target rent ²/ year)	Pre leased (%)	Total Budget 2 100%)	Total Budget 2 Group share)	Target Yield 3	Progress	Capex to be invested
	Ilot Armagnac (35% share)	Bordeaux	Construction	31,700 m²	2019	190	61%	102	35	6.5%	97%	1
	Cité du numérique	Bordeaux	Construction	19,223 m²	2019	136	38%	39	39	>7%	70%	35
	Hélios	Lille	Construction	9,000 m²	2019	160	100%	22	22	>7%	87%	3
	Total deliveries 2019			59,923 m²		161	61%	163	96	6.9%	84%	39
	Belaïa (50% share)	Orly	Construction	22,600 m²	2020	198	50%	65	32	>7%	14%	27
	Meudon Ducasse	Greater Paris	Construction	5,100 m²	2020	260	100%	22	22	6.4%	9%	18
	Silex II (50% share)	Lyon	Restructuration extension	30,900 m²	2020	312	44%	166	83	6.0%	47%	50
France Offices	Flow	Montrouge - Greater Paris	Construction	23,581 m²	2020	327	100%	115	115	6.6%	25%	79
	Gobelins	Paris	Restructuration	4,360 m²	2020	510	100%	50	50	4.3%	4%	20
	IRO	Châtillon	Construction	25,600 m²	2020	325	0%	139	139	6.3%	25%	104
	Total deliveries 2020			112,141 m²			54%	557	442	6.2%	25%	297
	N2 (50% share)	Paris	Construction	15,909 m²	2021	575	0%	148	78	4.6%	2%	69
	Montpellier Orange	Montpellier	Construction	16,500 m²	2021	165	100%	49	49	6.7%	7%	44
	Jean Goujon	Paris	Restructuration	8,455 m²	2021	820	100%	182	182	n.a	1%	38
	Total deliveries 2021			40,864 m²		655	75%	379	309	5.4%	2%	151
	Total France Offices			212,928 m²			63%	1,099	847	6.2%	24%	486
	Principe Amedeo	Milan	Regeneration	7,100 m²	2019	490	74%	59	59	5.3%	85%	2
	Ferrucci	Turin	Regeneration	21,000 m²	2019	130	0%	50	50	5.5%	55%	8
	Dante	Milan	Regeneration	5,100 m²	2019	560	100%	54	54	4.8%	6%	8
Italy Offices	Total deliveries 2019			33,200 m²		403	60%	163	163	5.2%	50%	19
	The Sign	Milan	Construction	26,500 m²	2020	285	35%	105	105	>7%	15%	56
	Symbiosis School	Milan	Construction	9,200 m²	2020	225	99%	21	21	>7%	10%	18
	Total deliveries 2020			35,700 m²		275	46%	126	126	>7%	14%	74
	Total Italy Offices			68,900 m²			54%	289	289	6.1%	34%	93
German Resi.	German residential - deliveries in 2019			5,145 m²			n.a	16	10	5.0%	38%	6
	German residential - deliveries 2020 and beyond			25,154 m²			n.a	95	62	4.7%	4%	43
	Total German Residential			30,299 m²			n.a	111	72	4.8%	9%	48
	B&B Bagnolet (50% share)	Paris	Construction	108 rooms	2019	n.a	100%	8	2	6.2%	56%	1
	B&B Cergy (50% share)	Greater Paris	Construction	84 rooms	2019	n.a	100%	5	1	6.6%	85%	0
	Meininger Munich	Munich - Germany	Construction	173 rooms	2019	n.a	100%	32	14	6.4%	98%	0
Hotels in Europe	Meininger Porte de Vincennes	Paris	Construction	249 rooms	2019	n.a	100%	45	20	6.2%	88%	2
	Meininger Lyon Zimmermann	Lyon - France	Construction	176 rooms	2019	n.a	100%	18	8	6.1%	75%	2
	Total deliveries 2019			790 rooms			100%	108	44	6.4%	87%	6
	Total Hotels in Europe			790 rooms			100%	108	44	6.4%	87%	6
	Total						62%	1,606	1,252	6.1%	27%	633

¹Surface at 100%; ² Including land and financial costs ; ³ Yield on total rents including car parks, restaurants, etc.

Committed projects	Surface 1 (m²)	Pre- leased (%)	Total Budget 2	Total Budget 2	Target Yield 3	Progress	Capex to be invested share)
Total France Offices	212,928 m²	63%	1,099	847	6.2%	24%	486
Total Italy Offices	68,900 m²	54%	289	289	6.1%	34%	93
Total German Residential	30,299 m²	n.a	111	72	4.8%	9%	48
Total Hotels in Europe	790 rooms	100%	108	44	6.4%	87%	6
Total		62%	1,606	1,252	6.1%	27%	633

¹Surface at 100%; 2 Including land and financial cost s ; 3 Yield on total rent s including car parks, restaurant s, et c.

3. Managed project s:

0 Bn in Group share)

	Projects sorted by estimated total cost at 100%	Location	Project	Surface 1 (m²)	Delivery timeframe
	Cap 18	Paris	Construction	50,000 m²	>2022
	Rueil Lesseps	Rueil- Malmaison - Greater Paris	Regeneration - Extension	43,000 m²	>2022
	Paris St- Ouen	Paris	Regeneration	31,000 m²	2021
	Omega	Levallois - Greater Paris	Regeneration - Extension	20,500 m²	2021
	Canopée	Meudon - Greater Paris	Construction	50,000 m²	>2022
	Anjou	Paris	Regeneration	11,000 m²	>2022
	Opale	Meudon - Greater Paris	Construction	37,000 m²	>2022
France Offices	Montpellier Pompignane	Montpellier	Regeneration- Extension	6,000 m²	>2022
	Philippe Auguste	Paris	Regeneration	13,200 m²	>2022
	Campus New Vélizy Extension (50% share)	Vélizy - Greater Paris	Construction	14,000 m²	>2022
	DS Campus Extension 2 (50% share)	Vélizy - Greater Paris	Construction	11,000 m²	2022
	Total France Offices			286,700 m²
	Symbiosis (building D)	Milan	Construction	20,500 m²	2021
Italy	Symbiosis (other buildings)	Milan	Construction	74,500 m²	2020- 2022
	Duca d'Aosta	Milan	Regeneration	2,100 m²	2019
	Total Italy Offices			97,100 m²
use	Alexanderplatz - 1st tower	Berlin	Construction	60,000 m²	2024
	Alexanderplatz - 2nd tower	Berlin	Construction	70,000 m²	>2024
Mixed-	Additonal constructibilty (Hotels portfolio)	France, UK, Germany	Construction	100,000 m²	>2022
	Mixed- Use			230,000 m²	>2022
	German Residential	Berlin	Extensions & Constructions	183,000 m²	>2022
	Total			796,800 m²

1 Surfaces at 100%

Covivio plans to launch a certain number of projects in the short term, including:

Paris St- Ouen 31,000 m²: demolition- reconstruction project with a 70% enlargement of the building. The asset is located in a fast- developing business district north of Paris 17th (location of the new Paris Courthouse, new stations of metro line 14).
Omega in Levallois 20,500 m²: full redevelopment project into a prime asset in the wellestablished business district of Levallois.
Alexanderplatz in Berlin first tower of 60,000 m²: flagship mixed- use project for the construction of a new tower in the very centre of Berlin. The building will host offices, residential and groundfloor retail.

In total, around 800,000 m² of new developments and redevelopments will drive the Group s future growth, such as Vinci s headquarters in Rueil- Malmaison (43,000 m² of redevelopment- extension potential) or additional constructability identified in land banks adjacent to hotels (100,000m² ).

H. PORTFOLIO
+4.4% on a like- for- like basis Portfolio value:
Excluding Duties)	Value 2017 100%	Value 2018 100%	Value 2018 Group share	LfL 1 change	Yield 2 2017	Yield 2 2018	% of portfolio
France Offices	6,351	6,684	5,640	2.2%	5.2%	5.2%	37%
Italy Offices	3,937	3,880	3,188	0.2%	5.5%	5.4%	21%
Residential Germany	4,957	5,823	3,743	11.6%	4.7%	4.3%	24%
Hotels in Europe	4,807	5,836	2,250	3.0%	5.5%	5.2%	15%
Total strategic activities	20,052	22,223	14,820	4.4%	5.2%	5.0%	97%
Non- strategic	1,102	574	475	- 6.5%	5.0%	5.9%	3%
Retail Italy	297	144	144	- 24.6%	6.1%	9.0%	1%
Retail France	447	173	73	- 1.5%	6.7%	7.3%	0%
Others (France Resi., Car parks)	358	258	258	- 2.3%	3.1%	3.3% ³	2%
Total Portfolio	21,154	22,797	15,295	4.0%	5.2%	5.0%	100%

¹LfL: Like- for- Like

²Yield excluding development projects

³ Yield excluding car parks and logistics

The portfolio grew .3 billion Group share 22.8 billion in 100%) mostly due to the merger with Beni Stabili and the hotel acquisition in the UK.

Like- for- Like value growth remained strong in 2018 with +4.4% on the strategic activities:

+2.2% in France Offices driven by the rise in value of property assets located in Paris and in major regional cities as well as the result of strong commercialisation efforts on assets under development
+1.8% in Milan
+11.6% in German Residential (including +12.4% in Berlin and +13.1% in Hamburg) due to increases in rents and values
+3.0% in Hotels, driven by asset management on the Spanish portfolio (+5.9%) and the German operating properties (+3.4% in Berlin driven by the Park Inn hotel).

Geographic breakdown of the portfolio at the end of 2018

I. LIST OF MAJOR ASSETS

The value of the ten main assets represents almost 14% of the portfolio Group share (down from 16% at end- 2017).

Top 10 Assets	Location	Tenants	Surface (m²)	Covivio share
CB 21 Tower	La Défense (Greater Paris)	Suez Environnement, AIG Europe, Nokia, Groupon	68,400	75%
Garibaldi Towers	Milan	Maire Tecnimont, LinkedIn, etc.	44,700	100%
Carré Suffren	Paris 15th	AON, Institut Français, Ministère Education	25,200	60%
Art&Co	Paris 12th	Wellio, Adova, Bentley, AFD	13,500	100%
Montebello	Milan	Intesa San Paolo	18,500	100%
Dassault Campus	Vélizy Villacoublay (Greater Paris)	Dassault Systèmes	56,600	50.1%
Green Corner	St- Denis (Greater Paris)	HAS et Systra	20,800	100%
Liberté	Charenton (Greater Paris)	Natixis	26,600	100%
Paris Carnot	Paris 17th	Orange	11,200	100%
Anjou	Paris 8th	Orange	10,100	100%

2. BUSINESS ANALYSIS BY SEGMENT

The France Offices indicators are presented at 100% and as Group share (GS).

A. FRANCE OFFICES

1. Sustained demand for new space, limited offer, increasing rents 1

Covivio's France Offices portfolio of billion Group share) is located in strategic locations in Paris, in the major business districts of the Greater Paris area and the major regional cities. The full year 2018 showed a dynamic performance by the French Offices market in a favourable economic context:

High level of take- up at 2.5 million m² (- 5% vs 2017 and +4% vs five- year average)
o More than 1 million m² on new or refurbished spaces (+9% vs 2017)
o Attractiveness of Western Crescent and 1st ring: 470,000 m² take- up combined on new spaces (+20%)
o Expansion of co- working operators, who took- up 130,000 m² .
Record low immediate supply (2.6 million m², 8% vs end- 2017) and vacancy rate (5.1%, 0.8 pts):
o Historic all- time low in all sectors
o Only 500,000 m² of new space available (19% of immediate offer)
o 1 st ring especially lacks new offer with only 71,000 m² available (13% of immediate offer)
Future supply is fairly stable with 1.1 million m² available on deliveries until 2021 (+1.4% vs 2017)
o 44% of the surfaces are already pre- let
o 370,000 m² per year available on deliveries on average, less than 1% of the existing stock and only one third of the annual take- up on new space.
Average economic rents on new or restructured spaces rose by 6% in one year in Greater Paris:
o Headline rents increased by 3%
o Incentives decreased by 1.8 pts vs 2017 and stand at 19.9% on average
o All areas benefitted: +8% in the 1st ring, +7% in Paris CBD, +3% in the Western Crescent.
In Lyon, the vacancy rate in the CBD Part- Dieu, where Covivio is exposed, remains at its historically low levels (less than 3%) and only 20,000 m² of new space are available until 2021. Prime rents therefore rose again by 3% ².
Investments in 23 billion in 2018 (+15% rise vs end- 2017). There is still a significant gap between prime yields (3 to 3.15% in the CBD of Paris; 3.85% in Lyon), and the OAT 10 years (close to 0.6% in February 2019).

In 2018, the France Offices business was characterized by:

Rental income growth of 2.8% on a like- for- like basis, driven by renewals (up 1.0 pt), indexation (up 0.9 pt) and occupancy (up 0.9 pt)
Continued portfolio rotation hare) of new disposal commitments for non- core and mature assets, including an asset swap in Paris CBD: Covivio sold its two mature assets at avenue Kléber, which were occupied by the Group, in exchange for a 8,500 m² property with strong redevelopment potential in Paris 8th .
The 2.2% growth in values on a like- for- like basis over the year, reflecting the growth in rental values, the valuation of high- potential development projects and the strong performance of the Group's strategic markets, in particular Paris and the major regional cities.
The acceleration of the committed pipeline, more tha million Group share)
The continued development of our co- working brand Wellio with the opening of three new sites in Paris (9,800 m² ), ideally located opposite the Gare de Lyon, in Montmartre and Miromesnil.

Assets held partially are the following:

o CB 21 Tower (75% owned),
o Carré Suffren (60% owned),
o the Eiffage and Dassault campuses in Vélizy (50.1% owned and fully consolidated),
o the Silex 1 and 2 assets (50.1% owned and fully consolidated),
o the New Vélizy campus for Thales (50.1% owned and accounted for under the equity method),
o Euromed Centre (50% owned and accounted for under the equity method),
o Bordeaux Armagnac (34.7% owned and accounted for under the equity method),
o d and accounted for under the equity method).

2. Accounted rental income: +2.8% at a like- for- like scope

2.1. Geographic breakdown: success of asset management policy

	Surface (m²)	Number of assets	Rental income 2017 100%	Rental income 2017 Group share	Rental income 2018 100%	Rental income 2018 Group share	Change (%) Group share	Change (%) LfL 1 Group share	% of rental income
Paris Centre West	106,741	10	37.1	37.3	40.8	40.8	9.5%	2.1%	17%
Paris South	72,343	8	25.3	20.6	30.0	25.0	21.2%	5.0%	10%
Paris North- East	110,429	6	19.4	19.4	19.5	19.5	0.4%	0.3%	8%
Total Paris	289,513	24	81.9	77.3	90.3	85.3	10.3%	2.4%	35%
Western Crescent and La Défense	226,930	20	72.8	65.6	71.2	63.6	- 3.1%	3.6%	26%
Inner rim	466,571	23	52.8	39.3	55.9	40.1	2.0%	2.3%	17%
Outer rim	51,661	23	10.5	10.5	5.9	5.9	- 43.6%	3.6%	2%
Total Paris Region	1,034,675	90	217.9	192.6	223.3	194.8	1.1%	2.8%	80%
Major regional cities	430,646	52	30.9	30.9	29.9	29.7	- 4.0%	4.6%	12%
Other French Regions	215,862	84	23.3	23.3	17.9	17.9	- 23.2%	- 0.7%	7%
Total	1,681,182	226	272.1	246.9	271.1	242.4	- 1.8%	2.8%	100%

¹LfL : Like- for- Like

Rental income declined 242 million Group share (- million) as a result of:

improved rental performance with 2.8% grow .1 million) including:
o +0.9 pt from indexation
o +1.0 pt from renewals mostly on leases located in Southern Paris and Western Crescent
o +0.9 pt due to occupancy

The main growth areas are Southern Paris (asset management work performed on an Orange asset in 2017 and lease renewals), the Western Crescent and the major regional cities (mainly Euromed in Marseille and Majoria in Montpellier).

asset acquisitions and deliveries ( million):
o the acquisition of the Jean Goujon asset in Paris CBD
o 1.0 million from assets delivered in 2017 and 2018, which have been fully let
vacating for development (- million) in Paris St- Ouen
disposals and change of scope (- 2.3 million), mostly of non- core assets in the outer suburbs and the regions.

3. Annualised rents: 62 million Group share at end- 2018

3.1. Breakdown by major tenants

	Surface (m²)	Number of assets	Annualised rents 2017 100%	Annualised rents 2017 Group share	Annualised rents 2018 100%	Annualised rents 2018 Group share	Change (%)	% of rental income
Orange	297,474	97	74.2	74.2	67.4	67.4	- 9.1%	26%
Suez Environnement	60,350	3	27.8	21.8	28.3	22.1	1.8%	8%
EDF / Enedis	130,121	22	16.7	16.7	15.8	15.8	- 5.5%	6%
Vinci	55,352	5	14.8	14.8	15.0	15.0	1.5%	6%
Dassault	69,395	2	24.9	12.5	25.4	12.7	1.9%	5%
Thalès	88,274	2	17.6	10.8	18.1	11.1	2.6%	4%
Natixis	37,887	3	10.7	10.7	10.9	10.9	1.9%	4%
Eiffage	69,844	23	14.5	9.3	11.9	6.6	- 28.9%	3%
Aon	15,592	1	9.0	5.4	9.2	5.5	2.6%	2%
Cisco	11,461	1	4.9	4.9	5.0	5.0	2.1%	2%
Other tenants	845,433	67	107.2	97.4	103.9	89.3	- 8.3%	34%
Total	1,681,182	226	322.3	278.4	310.8	261.5	- 6.1%	100%

The 10 largest tenants accounted for 66% of annualised rental income, stable since end- 2017. The main changes affecting Key Accounts were the following:

Orange: decreased exposure thanks to the disposals of non- core assets in French regions. Almost 80% of the Orange portfolio is now made up of assets with strong va lue- creation potential in Paris ( currently valued 8,500/ m² with an average rent of ² ).
Eiffage: disposal of 31 non- core assets in other French regions in 2018.

	Surface (m²)	Number of assets	Annualised rents 2017 100%	Annualised rents 2017 Group share	Annualised rents 2018 100%	Annualised rents 2018 Group share	Change (%)	% of rental income
Paris Centre West	106,741	10	43.3	43.3	34.5	34.5	- 20.3%	13%
Paris South	72,343	8	34.0	28.1	34.6	28.5	1.6%	11%
Paris North- East	110,429	6	20.0	20.0	19.6	19.6	- 1.9%	7%
Total Paris	289,513	24	97.3	91.3	88.7	82.6	- 9.6%	32%
Western Crescent and La Défense	226,930	20	84.2	75.7	78.6	69.8	- 7.7%	27%
Inner rim	466,571	23	74.5	50.1	80.0	52.9	5.6%	20%
Outer rim	51,661	23	7.6	7.6	5.2	5.2	- 31.2%	2%
Total Paris Region	1,034,675	90	263.6	224.7	252.6	210.5	- 6.3%	81%
Major regional cities	430,646	52	37.8	32.8	42.8	35.6	8.4%	14%
Other French Regions	215,862	84	20.9	20.9	15.4	15.4	- 26.4%	6%
Total	1,681,182	226	322.3	278.4	310.8	261.5	- 6.1%	100.0%

3.2. Geographic breakdown: 92% of rental income generated in strategic locations

The weight of strategic locations has increased (+2 pts), thanks to disposals of non- core assets decreased exposure in the outer suburbs (- 1 pt) and in other French regions (- 2 pts).

4. Indexation

over twelve months. For current leases:

86% of rental income is indexed to the ILAT (Service Sector rental index),
12% to the ICC (French construction cost index),
the balance is indexed to the ILC or the RRI (rental reference index).

Rents benefiting from an indexation floor (1%) represent 26% of the annualised rental income and are indexed to the ILAT.

5. Rental activity: almost 182,000 m² renewed or let in 2018

	Surface (m²)	Annualised rents 2018	Annualised rents 2018 ², 100%)
Vacating	88,740	22.1	250
Letting	14,221	3.8	280
Pre- letting	64,594	13.8	268
Renewal	102,745	24.3	244

The re- negotiations and renewals took place essentially in Paris and the Western Crescent.

102,745 m² have been renegotiated or renewed, essentially in Paris and the Western Crescent. On average, the leases have been renewed with an increase of 6.5% on IFRS rents and 3.2 years of extension of the maturity.

78,815 m² have been let or pre- let 8 million in new rental income Group share, including:
o 23,600 m² in Montrouge Flow, 100% pre- let 18 months before delivery
o 14,200 m² to Solvay (9,000 m² ) and Wellio (5,000 m² ) in Lyon Silex 2, 44% pre- let two years ahead of delivery
o 5,900 m² in Paris Montmartre, including 1,400 m² dedicated to our coworking brand Wellio
o 10,300 m² in Toulouse Riverside, delivered this year and 83% let
o 10,100 m² in Bordeaux Armagnac to be delivered in 2019 and 61% let
o 7,000 m² in Cité du Numérique in Bordeaux now 38% pre- let.
88,740 m² were vacated, including 48,000 m² on assets vacated for a redevelopment in 2019 (Paris St- Ouen, Omega in Levallois, Paris rue Jean Goujon)

6. Lease expirations and occupancy rate

	By lease end date (1st break)	%of total	By lease end date	% of total
2019	37.9	14%	22.1	8%
2020	24.3	9%	22.5	9%
2021	36.6	14%	33.5	13%
2022	24.2	9%	18.6	7%
2023	32.8	13%	30.6	12%
2024	13.3	5%	10.5	4%
2025	37.0	14%	39.4	15%
2026	29.5	11%	29.1	11%
2027	15.0	6%	28.1	11%
2028	4.8	2%	15.3	6%
Beyond	6.1	2%	11.8	5%
Total	261.5	100%	261.5	100%

6.1. Lease expirations: firm residual lease term of 4.6 years

The firm residual duration of leases has dropped by 0.4 point to 4.6 years due to approaching maturities on significant assets in the managed pipeline.

On :

4% corresponds to a development launched early 2019 (Gobelins in Paris 5th)
38% related to assets in the managed pipeline for which renewals are under control (Vinci in Rueil and Cap18 in Paris 18th)
44% concern long- term partners of the Group (EDF and Orange)
13% on core assets very well situated in Paris and Lyon.

6.2. Occupancy rate: a high level of

(%)	2017	2108
Paris Centre West	99.6%	99.5%
Southern Paris	100.0%	100.0%
North Eastern Paris	97.3%	92.8%
Total Paris	99.2%	98.0%
Western Crescent and La Défense	97.9%	99.3%
Inner rim	97.7%	97.1%
Outer rim	94.5%	92.2%
Total Paris Region	98.3%	98.0%
Major regional cities	94.5%	94.9%
Other French Regions	92.8%	91.1%
Total	97.4%	97.1%

The occupancy rate remains high, at 97.1%. The slight decline observed this year is due to the vacating of exceptional leases on Cap 18 in Paris North East, where Covivio maintains short- term maturities in view of a development in the medium- term.

97.1%

The occupancy rate has remained above 95% since 2010, reflecting the Group's very good rental risk profile over the long term.

7. Reserves for unpaid rent

The level of unpaid rent remains immaterial, given the quality of the client base.

8. Disposals and disposal agreements: 242 Group share realised

	Disposals (agreements as of end of 2017 closed)	Agreements as of end of 2017 to close	New disposals 2018	New agreements 2018	Total 2018	Margin vs 2017 value	Yield	Total Realised Disposals
	1		2	3	= 2 +3			= 1 + 2
Paris Centre West	-	13	104	-	104	0.2%	3.3%	104
Southern Paris	-	6	-	-	-			-
North Eastern Paris	-	2	-	-	-			-
Total Paris	-	21	104	-	104	0.2%	3.3%	104
Western Crescent and La Défense	-	-	36	-	36	4.5%	4.4%	36
Inner rim	1	6	-	-	-			1
Outer rim	31	-	2	-	2	0.6%	13.0%	33
Total Paris Region	32	27	141	-	141	1.3%	3.7%	173
Major regional cities	8	1	-	4	4	16.8%	6.9%	8
Other French Regions	43	1	19	3	23	13.7%	9.8%	62
Total 100%	82	28	160	7	167	3.1%	4.6%	242
Total Group share	82	28	160	7	167	3.1%	4.6%	242

Covivio has realised 242 million of disposals in 2018, mostly on mature assets, enabling it to finance development and acquisition projects with strong value- creation potential.

Mature assets
o the two assets occupied and renovated by Covivio on Avenue Kléber in the Paris CBD for an asset swap in exchange for a property located at Rue Jean Goujon in Paris CBD
o and delivered in 2013, fully let to Eiffage.
103 million in non- core asset disposals have been signed, mainly in other French regions and the outer suburbs.

	Surface (m²)	Location	Acquisition Price	Yield
Jean Goujon	8,500	Paris	134.0	n.a.
	-	Orly	14.3	n.a.
Omega (bank branch)	231	Levallois	2.5	n.a.
Total	8,731		150.7	n.a.

Covivio has acquired three assets this year in order to fuel its development pipeline:

8,500 m² of offices ² ) located on rue Jean Goujon in Paris CBD. Covivio launched the redevelopment of this asset at end- 2018 and plans to regroup all its Paris teams there after completion.
ownership to 50%
A small surface leased to a bank branch (230 m² ) as part of the Omega project, which Covivio will fully redevelop into a prime asset.

Development projects are one of the growth drivers for profitability and the improvement in the quality of the portfolio, both in terms of location and the high standards of delivered assets.

In Greater Paris, Covivio targets strategic locations in established business districts with solid public transport links. In the major regional cities (with annual take- up of more than 50,000 m²), the Group is targeting prime locations such as the La Part- Dieu district in Lyon.

10.1. Delivered projects

One project was delivered in 2018: Riverside, 11,000 m² of office space in the centre of Toulouse. 83% of the surface is already let and negotiations are at an advanced stage to let the remaining surface area. Covivio realised 56% of value creation on this project.

10.2. Committed pipeline .1 billion of projects 847 million Group share),

38 million 35 million Group share) of new projects in France, thus more 7 million Group share).

For a breakdown of committed projects, see the table on page 17 of this document.

Several projects were committed in 2018, including:

Flow in Montrouge − 23,600 m²: Construction of an urban campus in the Montrouge- Malakoff- Châtillon business district. The asset is now 100% pre- let 18 months ahead of delivery, scheduled in 2020.
IRO in Châtillon 25,600 m²: construction project for a new office building in the attractive Montrouge- Malakoff- Châtillon business district. IRO constitutes the only new offer coming in the area until 2020, when the delivery is scheduled.
Jean Goujon in Paris 8th 8,500 m²: full redevelopment into a flagship prime asset of a building purchased in 2018. Covivio plans to regroup all its Paris team after completion. Delivery is scheduled for 2021
Gobelins in Paris 5th 4,400 m²: former Orange building being redeveloped. Covivio will set- up its new co- working offer, Wellio, on the entire surface. Gobelins is part of ² with an average rent of 380/ m²).
N2 in Paris 17th arrondissement 15,900 m²: construction project, in partnership with ACM, for an innovative mixed- use property (offices/ coworking/ hotel/ ground floor retail).

Delivery of this asset is scheduled for end of year 2021.

Cité Numérique in Bordeaux 19,200 m²: extension- regeneration program near the new high- speed train station in Bordeaux. Delivery is schedules for 2019.
Belaïa 22,600 m²: project to build a new , the business district of Paris- Orly airport, in partnership with the ADP Group. 50% of the asset has already been pre- let, and delivery is scheduled for 2020.

Furthermore, work continued on several projects, including:

Silex 2 in Lyon 30,900 m²: prime office project in Lyon Part- Dieu CBD. 44% is already pre- let two years ahead of delivery (scheduled for early 2021): 9,000 m² to Solvay and 5,000 m² dedicated to coworking through Wellio. The project is shared at 49.9% with ACM
Îlot Armagnac in Bordeaux 31,700 m²: construction project for three new offices purchased offplan near the future high speed (LGV) railway station. Covivio has a 35% stake in the project and will retain 100% ownership of one of the buildings, today 61% pre- let to Regus.
Montpellier Orange 16,500 m²: construction project for a turnkey building for Orange in the Parc de la Pompignane in Montpellier. Delivery is expected in 2021.
Hélios in Lille- Villeneuve 9,000 m²: construction project for two new buildings in one of the main office areas in Lille. The asset is already entirely pre- let Delivery is expected in early 2019.

10.3. Managed pipeline of projects hare)

For a breakdown of managed projects, see the table on page 18 of this document.

Covivio plans to launch a certain number of projects in the short term, including:

Paris St- Ouen 31,000 m²: demolition- reconstruction project with a 70% extension of the surface. The asset is located in a fast- developing business district north of Paris 17th (location of the new Paris Courthouse, new stations of metro line 14).
Omega in Levallois 20,500 m²: full redevelopment project into a prime asset in the wellestablished business district of Levallois.

In total, more than 285,000 m² of new developments and redevelopments will drive the Group s future growth, such as Vinci s headquarters in Rueil- Malmaison (43,000 m² of redevelopment- extension potential) and the Cap 18 project in Paris 18th arrondissement (50,000 m² of potential new constructions).

11. Portfolio values

11.1. Change in portfolio values million rise in Group Share in 2018

Group share)	Value 2017	Acquisitions	Invest.	Disposals	Value creation on Acquis./ Disposals	Change in value	Transfer	Value 2018
Assets in operation	5,233	134	46	- 242	33	104	- 180	5,127
Assets under development	180	2	117	0	8	26	180	513
Total	5,412	136	162	- 242	41	130	0	5,640

The value of the million since end- 2017 mostly due to the value creation on existing and newly acquired assets 71 million). Disposals (- allowed Covivio to finance investments in the committed pipeline, both through acquisition of buildings to be redeveloped and . Furthermore, upgrading work 46 million has been completed on assets in operation.

11.2. Like- for- like portfolio evolution:

+2.2% of growth

	Valeur 2017 100%	Value 2017 Group share	Value 2018 100%	Value 2018 Group share	LfL (%) change 1 12 months	Yield 2 2017	Yield 2 2018	% of total
Paris Centre West	1,021	1,021	1,094	1,094	3.8%	4.1%	3.9%	19%
Paris South	769	632	784	647	1.0%	3.4%	4.4%	11%
Paris North- East	374	374	390	390	2.4%	5.3%	5.0%	7%
Total Paris	2,164	2,028	2,269	2,131	2.6%	4.1%	4.3%	38%
Western Crescent and La Défense	1,571	1,410	1,579	1,419	1.8%	5.4%	5.4%	25%
Inner rim	1,438	1,000	1,586	1,112	2.2%	5.4%	5.5%	20%
Outer rim	94	94	63	63	0.1%	8.4%	8.9%	1%
Total Paris Region	5,267	4,532	5,497	4,725	2.2%	4.9%	4.8%	84%
Major regional cities	848	644	1,010	739	3.5%	6.0%	5.8%	13%
Other French Regions	236	236	177	177	- 2.8%	8.9%	8.8%	3%
Total	6,351	5,412	6,684	5,640	2.2%	5.2%	5.2%	100%

1 LfL : Like- for- Like

2 Yield excluding assets under development

Values rose by 2.2% on a like- for- like basis especially thanks to:

+35% on Toulouse Riverside delivered in May 2018 (and 56% since the launch of the project), today let at 83%
+6.3% on assets under development
+2.6% in Paris through increases in rental values and upgrading works (mainly The Line and Steel in Paris CBD and Art&Co in Gare de Lyon)
Major business districts in regional cities with 3.5% growth, particularly in Bordeaux.

The yield of the portfolio is stable at 5.2% thanks to the healthy increase in rental income (+2.8% like- forlike rental growth) accompanying the increase in value.

12. Strategic segmentation of the portfolio

The core portfolio is the strategic grouping of key assets, consisting of resilient properties providing long- term income. Mature assets may be disposed of on an opportunistic basis in managed proportions. This frees up resources that can be reinvested in value- creating transactions, such as development projects or making new investments.
The portfolio of consists of assets subject to a development project. Such assets will become core assets once delivered. They concern:
o (appraised);
o land banks that may be undergoing appraisal;
o vacated for short/ medium term development (undergoing internal valuation).
Non- core assets form a portfolio compartment with a higher average yield than that of the office portfolio, with smaller, liquid assets in local markets, allowing their possible progressive sale.

	Core Portfolio	Development portfolio	Non- core portfolio	Total
Number of assets	82	17	128	227
	4,869	513	259	5,640
Annualised rental income	236	2	24	262
Yield 1	4.9%	n.a	9.2%	5.2%
Residual firm duration of leases (years)	4.8	n.a	2.1	4.6
Occupancy rate	97.6%	n.a	92.4%	97.1%

1 Yield excluding development

Core assets represent 86% of the portfolio (Group share) at end- 2018.

The development portfolio has tripled since end- 2017 with the acceleration of the committed pipeline. It now represents 9% of the portfolio (+6 pts vs end- 2017).

Non- core assets now represent less than 5% of the portfolio (Group share) at 31 December 2018, due in particular to disposals in French regions and the outer suburbs. About a third of those assets correspond to assets identified for a residential development in the medium- term.

B. ITALY OFFICES

In December 2018, the merger between Covivio and Beni Stabili was completed, thus furthering the simplification of the Group structure realised in 2017 and 2018.

The ownership rate in the Italian portfolio is therefore 100% at end- 2018 (vs 59.9% at end- June 2018 and 52.4% at end- 2017). On the P&L, the ownership rate retained was 52.4% for the first quarter 2018 and 59.9% for the rest of the year.

The figures are disclosed at 100% and in Covivio Group share (GS).

1. Confirmed supportive environment in Milan Office Market 1

developments are concentrated. At yearbillion Group share). The Milan Office market set new records in 2018 after an already strong 2017.

The market showed record levels of take- up, reaching 381,800 m² (+10% vs end- 2017). The demand is driven by Grade A and quality offices since 2015, which represents on average 70%- 80% of the total volume.
The vacancy rate of Milan dropped again this year since 2017 at 7% in the CBD, Center and semi- center areas on average (- 0.4 pts vs 2017), with an especially low vacancy of Grade A offer at 2.3%.

Only 115,000 m² of Grade A space are available in these three areas combined (out of more than 9 million m² total stock).

On the future offer, the trend is still positive, the expected deliveries until 2021 will not exceed 150,000 m² per year (vs 165,000 m² per year forecasted in 2017).
Prime rents increased during the y / m² in the CBD, a 4% growth vs end- 2017). Rents are rising in all areas especially in the Centre +8% and in the Semi-Centre +7% since end- 2017
Investments in Milan Offices decreased this year but remain high at , well

The activities of Covivio in 2018 were marked by:

T acquisitions with a potential yield above 6%. Milan now accounts for 73% of the office portfolio in Group share at year- end 2018.
The success of the development pipeline, with 26,000 m² leased in 2018, including 11,600 m² on the Symbiosis project and 9,200 m² on the Sign project. The committed pipeline is now pre- let at 54%.
The diversification of the tenant base, with the syndication of an additional 9% of the Telecom Italia portfolio .
The disposals of non- core and non- strategic assets for 181 million Group share) with a 5.3% margin above end- 2017 appraisal value.

2. Accounted rental income:

+1.3% like- for- like growth on strategic activities

	Surface (m²)	Number of assets	Rental income 2017 100%	Rental income 2017 Group share	Rental income 2018 100%	Rental income 2018 Group share	Change (%)	Change (%) LfL 1	% of total
Offices - excl. Telecom Italia	526,032	74	88.0	46.1	93.4	54.2	17.5%	1.5%	64%
Offices - Telecom Italia	911,332	129	98.6	40.9	94.3	29.0	- 29.1%	1.0%	34%
Development portfolio	199,764	6	0.4	0.2	2.3	1.4	n.a	n.a	2%
Total strategic activities	1,637,128	209	187.0	87.3	190.0	84.6	- 3.1%	1.3%	100%
Non- strategic (retail)	91,787	27	17.8	9.3	15.8	9.4	0.4%	- 5.2%
Total	1,728,915	236	204.8	96.6	205.8	94.0	- 2.7%	0.6%

LfL: Like- for- Like

Between 2017 and 2018, rental income decreased by 3% (- million) due to:

the reinforcement in Beni Stabili at 59.9% (vs 52.4%) realised in the second quarter 2018
the acceleration of the rental growth at like- for- like scope of +1.3% on strategic activities , driven by Milan (+1.8%) with:
o +0.8% of indexation ( 0.6 million)
o +0.5% related to rental activity 3 million)
acquisitions in Milan realised in 2017 and
deliveries of development projects for .4 million, let at 100%,
the syndication of 49% of the Telecom Italia portfolio (- 13.9 million) of which 40% realised at end- June 2017 and 9% early 2018, and
Non- core and non- strategic asset disposals (-

3. Annualised rental income: 152 million Group share from offices

	Surface (m²)	Number of assets	Annualised rents 2017 100%	Annualised rents 2017 Group share	Annualised rents 2018 100%	Annualised rents 2018 Group share	Change (%)	% of total
Offices - excl. Telecom Italia	526,032	74	98.0	51.4	105.0	105.0	104.3%	69%
Offices - Telecom Italia	911,332	129	98.9	31.1	88.1	45.0	44.5%	30%
Development portfolio	199,764	6	1.4	0.7	1.9	1.9	n.a	1%
Total strategic activities	1,637,128	209.0	198.3	83.2	195.1	151.9	82.5%	100%
Non- strategic (retail)	91,787	27	18.0	9.5	13.0	13.0	37.5%
Total	1,728,915	236.0	216.3	92.7	208.1	164.9	77.9%

Annualised income increased by 82.5% following the merger with Beni Stabili.

The weight of Telecom Italia continued to decrease by 7 points to 30%.

	Surface (m²)	Number of assets	Annualised rents 2017 100%	Annualised rents 2017 Group share	Annualised rents 2018 100%	Annualised rents 2018 Group share	Change (%)	% of total
Milan	645,127	55	92.4	45.4	104.3	97.2	114.4%	64%
Rome	83,611	15	11.5	5.3	11.7	7.8	46.0%	5%
Turin	109,327	10	11.7	4.4	7.1	5.3	19.7%	4%
North of Italy (other cities)	483,582	76	48.8	17.2	43.5	26.5	54.1%	17%
Others	315,481	53	33.9	10.9	28.5	15.1	38.3%	10%
Total strategic activities	1,637,128	209.0	198.3	83.2	195.1	151.9	82.5%	100%
Non- strategic (retail)	91,787	27	18.0	9.5	13.0	13.0	37.5%

64% of rental income is now generated by offices in Milan (+9 pts vs end- 2017), thanks to the acquisitions realised, the syndication of the Telecom Italia portfolio and the new deliveries in Milan.

4. Indexation

The annual indexation in rental income is usually calculated by applying the increase in the Consumer Price Index (CPI) on each anniversary of the signing date of the agreement (for about 20% of the portfolio 75% of the CPI increase is applied).

In the year 2018, the average change in the IPC index has been +1.1% over 12 months.

5. Rental activity

	Surface (m²)	Annualised rental income 2018 Group share	Annualised rental income 2018 ²)
Vacating	17,332	4.5	262
Lettings on operating portfolio	21,428	9.8	457
Lettings on development portfolio	26,273	6.5	246
Renewals	22,953	8.0	351

The sustained rental activity in 2018 shows the improvement of the letting market in the areas where Covivio is exposed and the strong asset management work. In particular, the re- lettings have been realised with a 2.2% increase on IFRS rents and an extension of the maturity by 3.7 years.

22.953 m² have been renewed or renegotiated. Around 9,000m² are located in Milan and were renegotiated/ renewed with an average of 7% increase on annualised rents.
21,428 m² of new leases mainly in Milan, with 4,800 m² in Galleria del Corso (sold at the end of 2018) and 2,100 m² in Via Rombon with Total.
17,332 m² have been vacated, of which 4,150 m² on Via Dante in Milan, currently under full redevelopment.
26,273 m² have been leased on the development pipeline, mainly in Milan. The committed projects are now 54% pre- let :
o the full pre- letting of a school to Ludum in the Symbiosis project for 9,200 m².
o 9,500 m² on The Sign project (building A) pre- let to AON. After choosing Covivio for their French headquarters, AON will set up its Italian headquarters in the Sign.
o An added agreement with Fastweb for the remaining area of the first Symbiosis buildings (2,400 m²), now fully let.
o An added agreement with Gattai for 1,200 m² on Milan Principe Amedeo, now prelet at 74%.
o 5 new leases on the first phase of Turin Corso Ferrucci on 3,300 m² delivered this year, now let at 54% on the part delivered.

7.7 6.1. Lease expirations: of average firm lease term years
Group share)	By lease end date (1st break)	%of total	By lease end date	% of total
2019	19.8	12%	18.8	11%
2020	7.1	4%	8.5	5%
2021	7.6	5%	8.2	5%
2022	19.8	12%	22.4	14%
2023	12.3	7%	14.1	9%
2024	5.9	4%	10.2	6%
2025	5.6	3%	5.9	4%
2026	14.8	9%	15.6	9%
2027	9.8	6%	9.8	6%
2028	13.4	8%	1.3	1%
Beyond	48.9	30%	50.2	30%
Total	164.9	100%	164.9	100%

6. Lease expirations and occupancy rates

The firm residual lease term remains high at 7.7 years, despite the syndication of 9% additional of the Telecom Italia portfolio. The following are included in the 20 million of rental income coming to term in 2019:

assets to be redeveloped
.4 million on assets located in the highly- sought CBD or Porta Nuova, mostly Piazza San Fedele
on the Telecom Italia portfolio
for which the renewal is under way, and
strategic retail that the Group aims to dispose.

6.2. Occupancy rate: a high- level of 97.9%

(%)	2017	2018
Offices - excl. Telecom Italia	95.1%	97.1%
Offices - Telecom Italia	100.0%	100.0%
Total strategic activities	97.0%	97.9%
Non- strategic (retail)	93.6%	91.0%
Total	96.6%	97.4%

The occupancy rate of offices excluding Telecom Italia assets has improved and stands at 97.1% (+2 pts vs end- 2017) thanks to letting success in Milan. Overall, the occupancy rate on strategic activities has increased despite the impact of the diminishing weight of the Telecom Italia portfolio.

7. Reserves for unpaid rent

	2017	2018
As % of rental income	0.5%	0.8%
In value 1	0.4	0.8
1

net provision / reversals of provision

The level of unpaid rents remains very low (less than 1%).

	Disposals (agreements as of end of 2017 closed)	Agreements as of end of 2017 to close	New disposals 2018	New agreements 2018	Total 2018	Margin vs 2017 value	Yield	Total Realised Disposals
	1		2	3	= 2 + 3			= 1 + 2
Milan	11	-	141	-	141	25.6%	3.2%	152
Rome	-	-	-	-	-	-	-	-
Other	16	-	244	0	244	- 3.7%	6.8%	260
Total 100%	27	-	385	0	385	5.3%	5.5%	412
Telecom Italia portfolio syndication (Group share)		-	73	-	73	0.0%	6.4%	73
Total Group share	13	-	257	-	257	5.3%	5.5%	270

During 2018, Covivio realised 270 million of disposals of non- core and non- strategic assets:

			Acquisitions 2018 realised	Acquisitions 2018 secured
	Location	Acq. price 100%	Potential Gross Yield	Acq. price 100%	Potential Gross Yield
Piazza Duca d'Aosta	Milan	11	6.1%	-	-
Piazza San Pietro in Gessate	Milan	16	6.0%	-	-
Viale Dell' Innovazione	Milan	79	6.3%	-	-
Total		106	6.2%	-	-

A portfolio of two assets for a total of 6,000 m². One asset is located in Piazza Duca D Aosta, right in front of the Central Railway Station and next to Porta Nuova business district, the other one is located in Piazza San Pietro in Gessate, in front of the Milan Courthouse. Both assets offer a significant value creation with a potential yield of 6%.
An asset located in the increasingly attractive Bicocca Business District in Northern Milan, on the metro line 5. The building, representing 19,800 m² of Grade A office space, offers an attractive yield of 6.3% through reletting of the vacant space (~9%).

Covivio has around 700 million of pipeline in offices in Italy Facing high demand for new or restructured spaces, the Group has boosted its development capacity since 2015 year- end, with five committed projects at endyears.

10.1. Delivered projects

48,500 m² of projects were delivered during the year 2018, mainly in Milan and Turin. The 100% occupancy rate proves the success of the development pipeline strategy:

Symbiosis AB (20,500 m²) in Milan, the first two buildings of the Symbiosis area, 100% let mainly to Fastweb;
The Colonna project (3,500 m²), which involved redeveloping an asset, was also delivered during the second quarter of 2018. This asset is fully let.
The Titano project (6,000 m²), which involved redeveloping the Piazza Monte Titano asset into a hotel let to Meininger, was delivered during the second quarter of 2018.

10.2. Committed projects: 289 million, primarily in Milan

For detailed figures on the committed projects, see page 17 of this document.

The Sign 26,500 m²: redevelopment project on Via Schievano, on the South West fringes of the centre of Milan in the Navigli business district. The first building has already been pre- let to AON, which had already selected Covivio for its French headquarters. The project will be delivered in 2020.

During the last quarter, Covivio signed a preliminary agreement for the Following this acquisition, Covivio will be able to develop an additional 10,000 m² of offices.

Symbiosis School 9,200 m²: during the second half 2018 Covivio signed a preliminary contract with Ludum, part of NACE Schools, one of the six largest groups of private international schools in the world. The building is fully pre- let with delivery scheduled for 2020.
Via Dante 5,100 m²: renovation of a trophy building near the Piazza Duomo. Covivio will host its Wellio co- working brand there for the opening of its first site in Milan.
Principe Amedeo 7,100 m²: redevelopment of the Principe Amedeo building, acquired in 2017 and located in the Porta Nuova business district. Delivery is scheduled for early 2019. 74% of the building is pre- let mainly to the tenant Gattai.
Corso Ferrucci 21,000 m²: The remaining surface area is expected to be delivered by the end of 2019.

million of projects in Milan

2 projects are in the managed pipeline:

Other buildings in the Symbiosis project, representing a potential 70,000 m² of office space in a pipeline business district on the South East limit of Milan city- centre, opposite the Prada Foundation.

The building D (20,500 m² of offices) will be next one to be launched in the short- term.

m² hotel space located in front of Stazione Centrale railway station.

11. Portfolio values

11.1. Change in portfolio values

Excluding Duties)	Value 2017	Acquisitions	Invest.	Disposals	Change in value	Change in value on acq. & disposals	Transfer	Telecom Italia portfolio syndication	Merger effect with BS	Value 2018
Offices - excl. Telecom Italia	1,024	106	20	- 106	2	0	100	-	929	2,073
Offices - Telecom Italia	489	-	14	- 87	3	- 2	-	- 140	444	720
Development portfolio	225	-	63	-	1	-	- 98	-	204	395
Total strategic activities	1,738	106	96	- 193	5	- 3	1	- 140	1,577	3,188
Non- strategic (Retail)	155	-	1	- 133	- 40	21	- 1	-	141	144
Total	1,893	106	98	- 326	- 35	18	0	- 140	1,718	3,332

The portfolio in Group Share increased by billion at end- 2018 as a result of the merger with Beni Stabili (vs 52.4% ownership rate end- 2017).

Excluding the merger effects, the portfolio decreased under the effect of the disposals (- 26 million), which was partly offset by the investments realised during the year (+ 4 million).

11.2. Portfolio in Milan: 73%

	Value 2017 Group share	Value 2018 100%	Value 2018 Group share	LfL 1 change 12 months	Yield 2 2017	Yield 2018	% of total
Offices - excl. Telecom Italia	1,024	2,073	2,073	0.1%	5.0%	5.1%	65%
Offices - Telecom Italia	489	1,412	720	0.4%	6.4%	6.2%	23%
Development portfolio	225	395	395	0.3%	n.a	n.a.	12%
Total strategic activities	1,738	3,880	3,188	0.2%	5.5%	5.4%	100%
Non- strategic (retail)	155	144	144	- 24.6%	6.1%	9.0%
Total	1,893	4,024	3,332	- 1.1%	5.5%	5.5%

1 LfL: Like- for- Like

Following the additional 9% syndication of the Telecom Italia portfolio early in the year and the disposal of several assets during the second half of 2018, the weight of the Telecom Italia portfolio was reduced to 23% (vs 28% at end- 2017 and 38% at end- 2016).

	Value 2017 Group share	Value 2018 100%	Value 2018 Group share	LfL 1 change 12 months	Yield 2 2017	Yield 2 2018	% of total
Milan	1,117	2,468	2,322	1.8%	4.6%	4.2%	73%
Turin	116	156	130	- 0.4%	7.2%	4.1%	4%
Rome	85	225	143	- 6.3%	4.9%	5.4%	4%
North of Italy	261	630	383	- 4.7%	5.1%	6.9%	12%
Others	159	401	210	- 2.0%	6.3%	7.2%	7%
Total strategic activities	1,738	3,880	3,188	0.2%	5.5%	5.4%	100%
Non- strategic (retail)	155	144	144	- 24.6%	6.1%	9.0%

1 LfL: Like- for- Like

²Yield excluding development projects

The weight of Milan has increased in 2018 and now represents 73% of the office portfolio (+9 pts since end- cquisitions this year.
The weight of non- strategic assets have been reduced through to the disposals realised: half of the assets were sold
The outperformance of Milan portfolio validates the strategy to focus on this city with an objective of 90% of the portfolio in Milan by 2022.

C. GERMAN RESIDENTIAL

Covivio operates in the German Residential segment through its 61.7% held subsidiary Covivio Immobilien. The figures presented are expressed as 100% and as Covivio Group share.

1. Solid economic growth outlook based on positive demographic and macro economic trends 1

Covivio owns over 41,600 apartments located in Berlin, Hamburg, Dresden, Leipzig and North Rhine-Westphalia. The asset portfolio represents 3.7 billion Group share). The German Residential market has been booming for several years, particularly in Berlin where the Group initiated investments in 2011 and where it currently holds nearly 60% of its residential portfolio.

Germany's macro- economic indicators are robust, with a GDP growth forecast of over 2% in 2018 and 2019, and a drop in the unemployment rate to 3.3% at the end of 2018. In Berlin, the current demographic trend is continuing, with a forecast of 3.8 million people by 2020 mainly due to strong demographics (vs 3.7 million at end- 2018).
The housing supply and demand imbalance persists in the Berlin market. Due to the annual demographic growth of around 50,000 inhabitants per year, the Berlin city development office anticipates a need for around 20,000 new apartments per year by the end of 2030. In 2017, only 15,700 housing were delivered.
This trend has had a significant impact on market rents, up 5% in 2018 ² (at end- June 2018), and on apartment purchase prices, which stand at 4,400 per m² on average in Berlin (up 14% at end- September 2018).
end of Q3 2018 (+38% vs 2017) under the impact of external growth and the price increase (+23% ² on average).

In 2018, Covivio's activities were marked by:

a 4.4% increase in rental income on a like- for- like basis, after a +4.2% increase in 2017. The at around 35%;
ongoing acquisitions in Berlin, Dresden and Leipzig, at attractive prices. Acquisitions totalling million were secured in 2018, of which 67% in Berlin, at an average price of 2,442 / m² and a rent increase potentially exceeding 40%;
the acceleration of million Group share) out of a growing pi
the portfolio continued to increase in value, with a like- for- like jump of +11.6%, of which +12.4% in and
the development of the new co- living solution, which relies on the quality of the Group's portfolio in Berlin and will improve profitability and value creation.

2. Accounted rental income: +4.4% at a like- for like scope

2.1. Geographic breakdown

	Surface (m²)	Number of units	Rental income 2017 100%	Rental income 2017 Group share	Rental income 2018 100%	Rental income 2018 Group share	Change Group share (%)	Change Group share (%) LfL 1	% of rental income
Berlin	1,309,772	17,155	103.4	70.6	116.6	74.8	5.9%	4.9%	49%
Dresden & Leipzig	333,383	5,516	21.3	14.0	23.3	14.8	6.2%	3.4%	10%
Hamburg	143,150	2,366	14.2	9.2	15.9	10.6	15.6%	3.1%	7%
North Rhine- Westphalia	1,116,584	16,565	91.3	50.5	85.3	53.6	6.3%	4.6%	35%
Essen	377,486	5,492	28.5	16.3	28.4	17.7	8.6%	4.6%	12%
Duisburg	214,497	3,302	19.5	10.0	16.1	10.1	0.7%	6.4%	7%
Mulheim	131,887	2,203	10.8	6.1	10.1	6.4	5.7%	4.6%	4%
Oberhausen	146,178	1,966	10.4	6.2	10.5	6.5	4.5%	3.4%	4%
Other	246,535	3,602	22.1	11.8	20.2	12.9	9.0%	3.6%	8%
Total	2,902,888	41,602	230.1	144.2	241.2	153.9	6.7%	4.45%	100%

LfL: Like- for- Like

Recognised rental income (Group s 3.9 million in 2018, up 6.77% due to:

strong like- for- 5.1 million) with
o 44% due to indexation (+2.0 pts)
o 28% due to reletting (+1.2 pts)
o 22% due to reletting with modernization (+1.0 pts)
o 6% due to modernisation capex (+0.3 pt).

Berlin continues to generate very good performance (+4.9%), while growth has significantly accelerated in North Rhine- Westphalia (+4.6%), given the improved quality of the portfolio.

12.7 million) mainly in Berlin, with high rent increase potential;
disposals (- 10.3 million) mainly involving non- core assets in North Rhine- Westphalia and mature assets in Berlin; and
the increase of Covivio's stake in its German residential activity from 61.0% to 61.7% at end- 2017 2.2 million).

In Berlin, re- lettings took place at an average rent of m². Covivio is thus gradually realising the rent increase potential of the numerous acquisitions made over recent years.

3. Annualised rental income: 159.9 million in Group share

3.1. Geographic breakdown

	Surface (m²)	Number of units	Annualised rents 2017 100%	Annualised rents 2017 Group share	Annualised rents 2018 100%	Annualised rents 2018 Group share	Change Group share (%)	Average rent ²/ month	% of rental income
Berlin	1,309,772	17,155	111.7	70.0	125.6	81.2	16.0%	/m²	51%
Dresden & Leipzig	333,383	5,516	22.2	14.1	24.4	15.6	10.6%	/m²	10%
Hamburg	143,150	2,366	13.5	8.8	16.2	10.6	19.9%	/m²	7%
North Rhine- Westphalia	1,116,584	16,565	85.6	53.0	83.1	52.5	- 0.9%	/m²	33%
Essen	377,486	5,492	28.0	17.3	29.1	18.1	4.7%	/m²	11%
Duisburg	214,497	3,302	17.2	10.6	15.2	9.5	- 10.6%	/m²	6%
Mulheim	131,887	2,203	10.3	6.4	10.1	6.4	0.2%	/m²	4%
Oberhausen	146,178	1,966	10.6	6.5	10.3	6.9	5.4%	/m²	4%
Others	246,535	3,602	19.5	12.2	18.3	11.6	- 4.5%	/m²	7%
Total	2,902,888	41,602	232.9	146.0	249.3	159.9	9.5%	/m²	100%

The trend in annualised rental income, up 9.5%, reflects the reinforcement in high growth potential markets such as Berlin, Hamburg, Dresden and Leipzig while disposing of non- core assets.

o The weight of North Rhine- Westphalia has fallen by 3 pts since 2017. The stronger growth in rental income in this area reflects the better quality of the portfolio (+4.6% like- for- like).
o The strategic markets (Berlin, Hamburg, Dresden and Leipzig) generate 67% of rental income (+3 pts compared to 2017).

The rental income per m² ² / month on average) offers solid growth potential, thanks to the rent increase potential of around 35% in Berlin, 20- 25% in Hamburg and, and around 15- 20% in Dresden and Leipzig and in North Rhine- Westphalia.

4. Indexation

The rental income from residential property in Germany changes according to three mechanisms:

Rents for re- leased properties:

In principle, rents may be increased freely. As an exception to that unrestricted rent setting principle, certain cities like Berlin and Hamburg have introduced rent caps for re- leased properties. In these cities, rents for re- leased properties cannot exceed a rent reference by more than 10%.

If construction works result in an increase in the value of the property (work amounting to less than 30% of the residence), the rent for re- let property may be increased by a maximum of 8% of the cost of the work. In the event of complete modernisation (work amounting to more than 30% of the residence), the rent may be increased freely.

For current leases:

The current rent may be increased by 15% to 20% depending on the region, although without exceeding the Mietspiegel or another rent benchmark. This increase may only be applied every three years.

For current leases with work done:

In the event that work has been carried out, rent may also be increased by up to 8% of the amount of said work, and by the difference with the Mietspiegel rent index. This increase is subject to two conditions:

o the work must increase the value of the property
o the tenant must be notified of this rent increase within three months.

5. Occupancy rate: a high level of		98.7%
(%)	2017	2018
Berlin	97.8%	98.3%
Dresden & Leipzig	98.9%	99.2%
Hamburg	99.9%	99.8%
North Rhine- Westphalia	98.8%	98.9%
Total	98.4%	98.7%

The occupancy rate of assets under operation remains high, at 98.7%. It has remained above 98% since the end of 2015 and reflects the Group's very high portfolio quality and low rental risk.

6. Reserves for unpaid rent

	2017	2018
As % of rental income	0.8%	0.8%
In value 1	1.2	1.2

1 net provision / reversals of provison

The unpaid rent amount to 0.8% of rents unchanged versus 2017.

7. Disposals and disposals agreement s:

	Disposals 2017 (agreements as of end- 2017 closed)	Agreements as of end- 2017 to close	New disposals 2018	New agreements 2018	Total 2018	Margin vs end- 2017 value	Yield	Total Realised Disposals
	1		2	3	= 2 + 3			= 1 + 2
Berlin	44	4	33	11	44	51.3%	2.3%	77
Dresden & Leipzig	20	0	12	0	12	1.9%	5.2%	32
Hamburg	0	0	5	0	5	- 11.6%	5.5%	5
North Rhine- Westphalia	58	12	98	2	100	12.4%	4.8%	156
Total 100%	122	16	148	13	162	18.7%	4.2%	270
Total Group share	78	10	97	8	105	18.5%	4.2%	174

of new commitment s

5 million Group share), with a high gross margin of 19%. The commitments are mostly located in North Rhine- Westphalia (62% of commitments) and fit squarely with the portfolio.

1,014 units of non- core assets in North Rhine-
174 units disposed of in Berlin, at prices significantly higher than the latest appraisal values (>50% ,350/ m² ), crystallising the value creation achieved.
217 units latest appraisal values. The Hamburg asset is part of a portfolio sold with a margin of 8% over the latest appraisal value.

The disposals made in 2018 amounted to 74 million Group share) and involved 42% of mature assets and 58% of non- core assets in North Rhine- Westphalia.

				Acquisitions 2018 realised			Acquisitions 2018 secured
	Surface (m²)	Number of units	Acq. price 100%	Acq. price Group share	Gross yield 1	Acq. price 100%	Acq. price Group share	Gross yield 1
		(realised & secured)
Berlin	128,714	1,778	314	223	4.3%	10	6	4.8%
Dresden & Leipzig	44,228	655	44	29	6.8%	-	-	0.0%
Hamburg	23,420	380	65	42	4.0%	-	-	0.0%
North Rhine- Westphalia	22,752	302	44	29	4.5%	-	-	0.0%
Total	219,114	3,115	468	324	4.5%	10	6	4.8%
Reinforcement Group share	-	-	n.a	51	4.9%	0	0	0.0%

1 Yield in 2 years after reletting of vacant spaces. Immediate yield of 3.9% on acquisitions realised.

Covivio maintained a steady pace of investments at attractive prices in a highly competitive context, with secured acquisitions totalling 30 million Group share) in 2018:

67% of the assets acquired are in Berlin, 14% in Hamburg, 9% in Dresden and Leipzig and the rest in North Rhine- Westphalia;
2,135/ m² 442/ m² in Berlin;
a return on acquisition of 3.9%, due to the high average vacancy rate (6%). The 2- year potential yield stands at 4.5% (after re- letting of the vacant surfaces) and will continue to rise due to the high rent increase potential (over 40% on average).

Moreover, Covivio increased its stake in companies holding asset portfolios, mainly in Berlin. All in all, these acquisitions million in assets (Group share).

In response to the supply/ demand imbalance in new housing in Berlin, Covivio launched a residential redevelopment and new construction projects.

This pipeline will enable Covivio to maximise value creation on its portfolio. Almost half of the development projects will remain in the portfolio and are released with a 5.4% return on the total cost. The other half will be sold in order to unlock the value creation with a margin expected of 40%.

9.1 Committed projects in Group share)

For details on the committed projects, see page 17 of this document

Nine residential development projects are currently committed in 2018, of which 8 are in Berlin. These totalled 454 apartments over 30,300 m², located in attractive areas of Berlin:

Prenzlauer- Berg: construction project of four residential buildings totalling 273 units
Friedrichshain- Kreuzberg district: 3 construction projects for a total of 75 housing units
Steglitz: extension project involving 67 new housing units (13 units for the first phase of the project)
Neuköln district: construction of 52 residential units
Mitte district: construction of 19 residential units
Zehlendorf district: extension project involving 16 new housing units

Group share)

In all, 53 590 million in developments. They mainly consist of construction projects in the centre of Berlin for more than 2,300 new housing units spread across 183,000 m² .

66 million in land reserves were acquired and will enable the development of 60,000m² of housing.

10. Portfolio values

Excluding Duties)	Value 2017	Acquisitions	Invest.	Disposals	Value creation on Acquis./ Disposals	Change in value	Change of scope	Value 2018
Berlin	1,728	227	79	- 43	12	164	53	2,220
Dresden & Leipzig	282	29	6	- 20	- 2	31	- 0	324
Hamburg	198	44	4	- 4	0	22	-	263
North Rhine Westphalia	906	25	23	- 88	1	51	18	935
Essen	309	-	6	- 1	0	22	2	339
Duisburg	174	-	4	- 27	0	8	1	160
Mulheim	106	-	2	- 8	0	8	3	111
Oberhausen	99	-	3	- 9	0	1	7	102
Other	219	25	8	- 43	0	12	2	221
Total	3,114	324	112	- 155	10	267	70	3,743

10.1. Change in portfolio value: 19% growth

In 2018, the portfolio's value increased by 19% hare. The driver of this rapid growth was, above all, the like- for- like incre % of the growth), and second, the contribution of acquisitions net of disposals and the associated value creation (44% of the growth).

+11.6% of growth

10.2. Change on like- for- like basis:

¹LfL: Like- for- Like

At like- for- like scope, the values increased by +11.6% year- oninvestment policy:

+12.4% in Berlin after excellent performance in 2017 (+17.3%), mainly due to the substantial increase in rental income and values in highly sought- after locations
the Berlin portfolio retained ,400/ m²
Hamburg (+13.1%) and Dresden and Leipzig (+13.2%) also generated strong performance under the same effects
the increase in values was just as significant in North Rhine- Westphalia (+9.2%), demonstrating the improved quality of the portfolio, following the modernisation and non- core asset disposal programmes.

11. Maintenance and modernisation CAPEX

59 million Group share), i. / m² ²) were completed. CAPEX spending increased by 37% compared to 2017, due both to the increase of the portfolio (+19%) and the increase of spending i ²: spending per m² increased by 38% under the impact of the expansion in Berlin, where investment is more intense.
Modernisation CAPEX, which are used to improve asset quality and increase rental income, still account for 70% of the total. ² in 2018, with an acceleration of the modernisation works in the second semester 2018.

D. HOTELS IN EUROPE

Covivio Hotels, subsidiary of Covivio at 42.3% at end- 2018 (versus 50% at end- 2017), is a listed property investment company (SIIC) and leading real estate player in Europe. It invests both in hotels in lease and hotel operating properties.

The figures presented are expressed as 100% and as Covivio Group share (GS).

1. The European hotel market experiencing a long term growth cycle 1

Covivio owns a hotel portfolio worth billion Group share) focused on major European cities. Benefitting from its geographic diversification (across 7 Western European countries), its broad revenue base (18 hotel operators/ partners) and asset management possibilities via different ownership methods (hotel lease and hotel operating properties), Covivio holds major growth and value creation drivers. The Group is very well positioned to benefit from growth in the European hotel market.

The upturn in the European hotel market witnessed in 2017 continued in 2018:

Revenue per available room (RevPar) in Europe grew by +4.6% in 2018, boosted by the growth in Average Daily Rate (+3.5%) and the increase in occupancy rate (+0.7 pt).
The outlook of the sector is positive: growth in the number of tourists in Europe reached a record 713 million tourists in 2018 (+6% vs 2017), well ahead of the latest forecast. UNWTO is forecasted +3- 4% in 2019.
All markets where the Group is implanted showed positive RevPar growth in 2018:

RevPar evolution
Country	(%)	Main driver
France	+7.3%	Paris +12.1%
Belgium	+8.5%	Brussels + 11.2%
Germany	+2.7%	Berlin +7.1%
United Kingdom	+2.1%	London +2.6%
Spain	+1.5%	Madrid +4.7%
Netherlands	+6.5%	Amsterdam +5.1%

Investor appetite for hotels 22.9 billion in volume in 2018 (+3% vs 2017). The United Kingdom drew 30% of the transaction volume due to a favourable currency effect. Spain and Germany also stayed quite attractive, with 23% and 18% of transactions.

characterized by:

Two transactions that transformed the portfolio:
o The acquisition of a portfolio of twelve 4* and 5* hotels in the United Kingdom, in prime city- centre locations. Covivio signed 25- year firm leases with an attractive 5% minimum guaranteed yield (and 6% target yield) with IHG, a United Kingdom market leader.
o The merger of Covivio Hotels with FDMM, a vehicle specialising in the ownership of hotel operating properties (previously owned at 40.7%), holding mainly 4* and 5* hotels in Germany and Belgium.
The acceleration of like- for- like rental growth (+4.6%) driven by variable rents (+6.5%) and the good performance on EBITDA from management and franchise contracts (+5.6%)

The solid increase in hotel portfolio values (+3.0% on a like- for- like basis), in particular due to the upturn in business in Belgium (+9.8%) and the asset management realised on the Spanish portfolio (+5.9%).

Assets not wholly- owned by Covivio Hotels refer to:

182 B&B hotels in France (50.2% owned), of which 59 under disposal agreements
22 B&B assets in Germany (93.0%)
8 B&B assets in Germany, formerly operating properties converted into leased properties in 2018, 5 of them held at 84.6% and the other 3 at 90%
2 Motel One assets in Germany (94.0%) acquired in 2015
the Club Med Samoëns, delivered in 2017 and owned in partnership with CDC and ACM (25%)

2. Recognised revenues: +4.7% on a like for like basis

	Number of rooms	Number of assets	Revenues 2017 100%	Revenues 2017 Group share	Revenues 2018 100%	Revenues 2018 Group share	Change (%) Group share	Change Group share (%) LfL 1	% of revenues
Paris	3,725	15	23.8	11.1	27.3	10.9	- 1.8%	+9.4%	10%
Inner suburbs	678	5	2.8	1.4	3.8	1.5	+3.9%	+11.0%	1%
Outer suburbs	3,451	35	12.4	4.8	13.3	4.3	- 8.7%	+6.7%	4%
Total Paris Regions	7,854	55	39.0	17.2	44.4	16.7	- 3.3%	+8.8%	15%
Major regional cities	6,267	68	25.2	10.2	25.7	8.7	- 14.5%	+1.5%	8%
Other French Regions	9,172	126	25.5	7.5	30.7	6.8	- 9.3%	+0.5%	6%
Total France	23,293	249	89.7	34.9	100.9	32.2	- 7.8%	+4.8%	30%
Germany	7,133	65	22.3	10.8	27.9	11.5	+6.4%	+1.7%	11%
Belgium	2,242	12	21.4	10.7	20.9	8.8	- 17.6%	+5.4%	8%
Spain	3,699	20	33.3	16.6	34.3	14.5	- 12.9%	+4.8%	13%
Other	2,835	13	7.4	3.7	24.5	10.4	+179.7%	+2.4%	10%
Total Hotel - Lease properties	39,202	359	174.1	76.8	208.4	77.4	+0.8%	+4.2%	71%
Hotel Operating properties (EBITDA)	5,486	20	67.7	13.3	74.5	31.4	+135.5%	+5.6%	29%
Total revenues Hotels	44,688	379	241.8	90.1	282.9	108.8	+20.7%	+4.7%	100%
Non- strategic (retail)	-	76	34.8	17.4	21.4	9.1	- 47.9%	+1.6%	-
Total	44,688	455	276.6	107.5	304.3	117.8	+9.6%	+4.5%	-

Hotel revenue grew by 10 million Group share in 2018, thanks to:

+4.2% million) increase in revenues on a like- for- like basis including:
o +6.5% generated by AccorHotels variable rents,
o a 4.8% increase for the Spanish portfolio, partly due to the variable rental income;
EBITDA growth of 5.6% on management contracts on a like- for- like basis, mainly due to the business upturn in Germany (+5.1%) and Belgium (+23.1%);
acquisitions and deliveries 11.1million) , mainly:
o acquisition of a hotel portfolio in the United Kingdom leased to IHG
o acquisition of a portfolio of 2 NH hotels in Germany and 1 in Amsterdam.
disposal of non- strategic and non- core assets (- million): hotels in secondary locations in Belgium (Sunparks resorts) and Spain (Jerez de la Frontera), and retail assets in France (Quick restaurants and Jardiland stores).

3. Annualised revenue: million Group Share of revenues from Hotels

3.1. Breakdown by operators and by country

3.2. Structure of annualised revenues

Covivio Hotels' annualised revenues profile has improved significantly since end- 2017, due to the merger between Covivio Hotels and FDMM in early 2018 and the acquisition in the United Kingdom:

more balanced geographic exposure with the entry in the United Kingdom market and the reinforcement in Germany
broader revenue base through a new partnership with IHG, now second operator on the Covivio portfolio, and reinforcement of the partnership with NH in Netherlands & Germany
better exposure to EBITDA from hotel operating properties, offering an attractive yield with limited risk given the key locations of our city- centre hotels, such as the Park Inn hotel in Berlin.

4. Indexation

54% of rents are indexed to benchmark indices (ICC, ILC, and consumer price index for foreign assets). The 46% remaining revenues are variable.

5. Lease expirations: 13.8 of firm residual lease term years
	By lease end date (1st break)	% of total	By lease end date	% of total
2019	5.7	6%	0.1	0%
2020	0.3	0%	0.3	0%
2021	2.6	3%	2.6	3%
2022	3.2	4%	1.0	1%
2023	3.5	4%	2.4	3%
2024	0.1	0%	1.8	2%
2025	2.3	3%	2.7	3%
2026	0.7	1%	1.0	1%
2027	1.2	1%	1.2	1%
2028	2.9	3%	2.9	3%
Beyond	70.2	76%	76.8	83%
Total (incl. retail)	92.7	100%	92.7	100%

Thanks to the signing of a 25- years firm lease with IHG in the United Kingdom, the firm residual duration at end- 2018 (13.8 years) is at a record high.

The next expiries in 2019 are mainly related Spanish hotels acquired in 2016, located in highly sought locations in Madrid & Barcelona and holding a high rent increase potential.

The occupancy rate remained at 100%.

6. Reserves for unpaid rent

As in 2017, no additional amounts were set aside for unpaid rents in the portfolio in 2018.

7. Disposals and disposal agreements:

	Disposals (agreements as of end of 2017 closed)	Agreements as of end of 2017 to close	New disposals 2018	New agreements 2018	Total 2018	Margin vs 2017 value	Yield	Total Realised Disposals
	1		2	3	2+3			= 1 + 2
Hotel Lease properties	3	18	115	272	387	1.6%	5.8%	118
Hotel Operating properties	0	0	17	0	17	- 4.3%	5.7%	17
Total Hotels - 100%	3	18	132	272	404	1.5%	5.8%	135
Total Hotels - Group share	1	8	56	58	114	- 0.3%	6.1%	57
Non- strategic (retail) - 100%	187	0	85	0	85	0.8%	6.5%	272
Non- strategic (retail) - Group share	79	0	36	0	36	0.8%	6.5%	115
Total - 100%	189	18	217	272	489	1.4%	5.9%	407
Total - Group share	80	8	92	58	150	0.0%	6.2%	172

Covivio continued its policy of rotating assets with disposals & new agreements):

404 million (114 million Group Share) of non- core assets:
o 59 B&B hotels for 272 million with a 10% margin above end- 2017 appraisal value
o a Tryp a 23% margin on the appraisal value
o in secondary locations
o a Sunparks holiday village in , realised in line with appraisal value as part of a more global operation with Sunparks (disposal and lease extensions on other assets, thus enhancing the liquidity)
85 million ( 36 million Group Share) of non- strategic Jardiland assets.

In addition 7 million of non- strategic disposals signed in 2017 were realised this year, and mostly included the Quick portfolio which

8. Acquisitions:

realised at the end of 2018

				Acquisitions 2018 realised			Acquisitions 2018 secured
	Number of rooms	Location	Tenants	Acq. price 100%	Acq. price Group share	Gross Yield	Acq. price 100%	Acq. price Group share	Gross Yield
UK portfolio (12 assets)	2,638	United Kingdom	IHG	817	346	5.1%	78	33	5.5%
NH Hotels (4 assets)	637	Germany & Netherlands	NH	98	42	5.3%	12	5	6.5%
Total Acquisitions Lease properties	3,043			916	387	5.1%	90	38	5.6%
Total Acquisitions Operating properties	-	-	-	-	-	-	-	-	-

Covivio continued its diversification strategy in major European markets with the acquisition of a portfolio of twelve 4* and 5* hotels in the United Kingdom on, located in prime city- centre location of the United Kingdom (London, Edinburgh, Glasgow, Manchester, etc.). Two of them, located in Oxford, will be completed in 2019.

Furthermore, three NH hotels in Amsterdam, Berlin & Hamburg were acquired during the period, for a purchasing option, secured in 2017, will be exercised early 2019.

9. Development pipeline: 5 projects & 100,000 m² of additional constructability

In 2018, Covivio continued to support the expansion of its new and long term partners in their development in the major European cities.

9.1. Delivered projects

In 2018, Covivio delivered 653 hotel rooms via 4 projects, with a 33% value creation.

2 B&B hotels in Berlin and Chatenay- Malabry (Greater Paris), totalling 267 rooms
The Motel One Porte Dorée in the Paris 12th with 255 rooms, opened in April 2018
The Meininger hotel in Milan (Italy scope) of 131 rooms located piazza Monte Titano.

9.2. Committed projects: 08 4 million Group Share), 100% pre- let

For detailed figures on committed projects, see the table on page 17 of this document.

Covivio is supporting the development of Meininger in France, with two hotels under construction in Paris & Lyon which will be the operator's first opening in those cities. A third one is also being built in Munich.

The three hotels represent 600 rooms and

Covivio keeps on accompanying the development of B&B, with two hotels in construction in Greater Paris for a total of 192 rooms and total cost. The assets are scheduled to be delivered during 2019 and 2020.

9.3. Managed projects: 100,000 m² of additional constructability

Covivio has identified close to 100,000 m² to be developed on land banks adjacent to existing hotels. Located in the city- centre of key cities such as Paris, Lyon, Leipzig or Dresden, these projects offer a significant value creation potential through the development of Offices, Residential or Hotels and highlights the opportunities created by activities.

10. Portfolio values

10.1. Change in portfolio values

Group share)	Value 2017	Acquis.	Invest.		Disposals Value creation on Acquis./ Disposals	Change in value	Reclustering	Change of scope	Value 2018
Hotels - Lease properties	1,480	387	9	- 53	12	43	36	- 218	1,698
Hotels - Operating properties	250	-	4	- 7	-	9	- 19	270	506
Assets under development	54	-	15	-	-	3	- 17	- 8	46
Total Hotels	1,784	387	29	- 60	12	55	-	44	2,250
Non- strategic (Retail)	224	-	-	- 115	-	- 1	-	- 35	73
Total	2,008	387	29	- 175	12	53	-	9	2,323

T 2.3 billion Group Share at end- , mainly due to the impact of the acquisitions & investments realised and the value creation related to them 428 million), partly offset by the disposals of non- core hotels and non- strategic assets (- 175 million).

10.2. Change on like- for- like basis:

+3.0% of growth

	Value 2017 Group share	Value 2018 100%	Value 2018 Group share	LfL 1 change 12 months	Yield 2 2017	Yield 2 2018	% of total value
France	736	2,034	666	2.1%	5.0%	5.1%	30%
Paris	295	695	277	2.9%	4.1%	3.8%	12%
Greater Paris (excl. Paris)	124	330	109	1.7%	5.2%	5.2%	5%
Major regional cities	182	481	162	2.0%	5.6%	5.5%	7%
Other cities	135	528	117	1.2%	6.0%	7.9%	5%
Germany	254	634	260	2.4%	5.5%	5.5%	12%
Franckfurt	28	60	25	4.1%	5.4%	5.4%	1%
Munich	26	42	18	2.5%	n.a.	4.5%	1%
Berlin	20	61	25	3.8%	5.1%	5.0%	1%
Other cities	180	472	192	1.9%	5.5%	5.8%	9%
Belgium	169	247	104	9.8%	6.1%	5.6%	5%
Brussels	32	69	29	7.9%	5.6%	5.4%	1%
Other cities	137	177	75	10.7%	6.3%	5.7%	3%
Spain	306	636	269	5.9%	5.4%	5.3%	12%
Madrid	124	270	114	9.4%	4.8%	4.6%	5%
Barcelona	117	235	99	0.0%	5.4%	5.9%	4%
Other cities	65	131	56	9.9%	6.6%	5.9%	2%
UK	0	841	356	n.a.	n.a.	4.6%	16%
Other countries	69	208	88	2.0%	5.5%	5.4%	4%
Total Hotel lease properties	1,534	4,599	1,743	3.4%	5.3%	5.1%	77%
France	46	228	96	- 0.8%	6.1%	5.9%	4%
Lille	24	123	52	2.4%	5.5%	4.7%	2%
Other cities	22	104	44	- 4.4%	7.0%	7.5%	2%
Germany 3	188	935	379	2.2%	6.5%	6.6%	17%
Berlin	120	635	255	3.4%	5.7%	5.8%	11%
Dresden & Leipzig	48	250	100	- 0.2%	7.1%	7.4%	4%
Other cities	21	50	23	- 2.0%	7.9%	8.8%	1%
Belgium	16	74	31	4.5%	6.3%	7.4%	1%
Total Hotel Operating properties	250	1,237	506	1.8%	6.4%	6.5%	23%
Total Hotels	1,784	5,836	2,250	3.0%	5.5%	5.2%	100%
Non- strategic (Retail)	224	173	73	- 1.5%	6.7%	7.3%	-

LfL : Like- for- Like

²Yield excluding assets under development ; EBIDTA yield for hotel operating properties

³Yield excluding ground floor retail surfaces in the German hotels

The strong performance of the portfolio, both on lease properties and operating properties, validates the Group's strategy of strengthening its position in major European cities with:

+3.4% like- for- like growth on lease properties:

o +9.8% in Belgium with a strong performance on the Accor portfolio,
o +5.9% in Spain thanks to the asset management carried out (rebranding, renegotiations)
o +6.4% generated by developments
+1.8% like- for- like growth in value for hotel operating properties, with:
o +2.2% rise in values in Germany with the portfolio of 9 hotels under management contract, driven by the asset management performed on the Park Inn Alexanderplatz
o +4.5% in Belgium due to the strong performance of the Crowne Plaza in Brussels
3% value creation on the portfolio in the United Kingdom acquired at the beginning of the second semester 2018, due to rebranding of the portfolio with IHG.

3. FINANCIAL INFORMATION AND COMMENTS

The activity of Covivio involves the acquisition or development, ownership, administration and leasing of properties, particularly Offices in France and Italy, Residential in Germany and Hotels in Europe.

Registered in France, Covivio is a public limited company with a Board of Directors.

CONSOLIDATED ACCOUNTS

3.1. Scope of consolidation

scope of consolidation included companies located in France and several European countries (Offices in France and Italy; Residential in Germany, France, Austria, Denmark and Luxembourg; Hotels in Germany, Portugal, Belgium, the Netherlands, Spain and the United Kingdom). The main equity interests in the fully consolidated but not wholly- owned companies are the following:

Subsidiaries	2017	2018
Covivio Hotels	50.0%	42.3%
Covivio Immobilien	61.7%	61.7%
Beni Stabili	52.4%	100% *
Sicaf (portfolio Telecom Italia)	31.5%	51.0%
OPCI CB 21 (CB 21 Tower)	75.0%	75.0%
Fédérimmo (Carré Suffren)	60.0%	60.0%
SCI Latécoëre (DS Campus)	50.1%	50.1%
SCI Latécoëre 2 (extension DS Campus)	50.1%	50.1%
SCI 15 rue des Cuirassiers (Silex 1)	50.1%	50.1%
SCI 9 rue des Cuirassiers (Silex 2)	50.1%	50.1%
SCI 11, Place de l'Europe (Campus Eiffage)	50.1%	50.1%

* Merged with Covivio on December 31, 2018

Following the merger- absorption of the hotel operating activity (in January 2018), Covivio's stake in Covivio Hotels stood at 42%, compared to 50% on 31 December 2017.

Following Covivio's acquisition on the market of Beni Stabili shares, the stake in Beni Stabili was 59.9% from April to December, compared with 52.4% on 31 December 2017. On 31 December 2018, Beni Stabili merged with Covivio. On January 4 2019,the new Covivio shares were issued to Beni Stabili shareholders, based on an exchange ratio of 8,245 Covivio shares for every 1,000 Beni Stabili shares.

3.2. Accounting principles

The consolidated financial statements have been prepared in accordance with the international accounting standards issued by the IASB (International Accounting Standards Board) and adopted by the European Union on the date of preparation. These standards include the IFRS (International Financial Reporting Standards), as well as their interpretations. The financial statements were approved by the Board of Directors on 20 February 2019.

3.3. Simplified income statement - Group share

	2017	2018	var.	%

Net rental income	539.4	539.0	- 0.4	- 0.1%
EBITDA from hotel operating activity & coworking	0.0	30.5	+30.5	n.a
Income from other activities	7.3	5.1	- 2.2	- 29.8%
Net revenue	546.7	574.6	+27.9	+5.1%
Net operating costs	- 64.1	- 68.1	- 4.0	+6.2%
Depreciation of operating assets	- 7.2	- 33.0	- 25.8	n.a
Net change in provisions and other	- 2.9	1.8	+4.7	n.a
Current operating income	472.5	475.4	+2.9	+0.6%
Net income from inventory properties	- 2.2	- 0.6	+1.6	- 72.7%
Income from asset disposals	28.8	83.9	+55.1	+191.2%
Income from value adjustments	627.2	403.5	- 223.7	- 35.7%
Income from disposal of securities	- 2.2	50.4	+52.6	n.a
Income from changes in scope & other	- 2.2	- 70.8	- 68.6	n.a
Operating income	1,121.9	941.7	- 180.2	- 16.1%
Cost of net financial debt	- 152.2	- 106.8	+45.4	- 29.8%
Interest charges linked to financial lease liability	0.0	- 1.9	- 1.9	n.a
Value adjustment on derivatives	- 0.5	- 6.2	- 5.7	n.a
Discounting of liabilities and receivables	- 6.8	- 9.2	- 2.4	+35.3%
Net change in financial and other provisions	- 14.4	- 14.8	- 0.4	+2.8%
Share in earnings of affiliates	34.8	18.0	- 16.8	- 48.3%
Income from continuing operations	982.9	820.8	- 162.1	- 16.5%
Deferred tax	- 61.4	- 56.0	+5.4	- 8.8%
Corporate income tax	- 7.4	- 15.2	- 7.8	+105.4%
Net income for the period	914.1	749.6	- 164.5	- 18.0%

5% rise in net revenue - Group share

Net rental income varies under the combined effect of acquisitions, disposals, the impact of indexation in the German Residential segment and the reduced stake in Covivio Hotels.

The net rental income by operating segment is the following:

	2017	2018	var.	%
France Offices	232.4	232.3	- 0.1	- 0.0%
Italy Offices (incl. retail)	80.7	76.9	- 3.8	- 4.7%
German Residential	128.8	139.8	+11.0	+8.5%
Hotels in Europe (incl. retail)	93.1	85.1	- 8.0	- 8.6%
Other (incl. France Residential)	4.5	4.9	+0.4	+8.9%
Total Net rental income	539.4	539.0	- 0.4	- 0.1%
EBITDA from hotel operating activity & coworking	0.0	30.5	+30.5	n.a
Income from other activities	7.3	5.1	- 2.2	- 29.8%
Net revenue	546.7	574.6	+27.9	+5.1%

France Offices : stable rents mainly due to the combined effect of disposals (- million), deliveries of million), and the acquisition of the property rue Jean Goujon in Paris CBD million).

Italy Offices: 3.8 million drop in net rental income Group share, due to the syndication of the Telecom Italia portfolio (- - million), partly offset by asset acquisitions and deliveries million) and the incr million).

German Residential: net rental income Group share is 11.0 million, driven by acquisitions and rental growth 8 million), and offset by disposals (- million). Covivio also reinforced its direct ownership in its German Residential activity.

Hotels in Europe: - 8.0 million decrease in net rental income Group share. This net decrease is due to the reduced stake in Covivio Hotels (- of rental income), following the merger- absorption of the operating activity, whose result is included in the EBITDA from hotel operating activity & coworking (see below).

Other effects include the impact of retail disposals (- million), offset by acquisitions in United million), the rise in Accor and Spain rental income (+ million) and the

EBITDA from hotel operating activity and coworking: Since the merger- absorption of the hotel operating activity, the companies covered by this scope have been fully consolidated (vs. equity affiliates on 31 December 2017). The EBITDA from this activity

Income from other activities: Net in million) came from the income generated by car park companies and property development fees ( million).

Net operating costs

Net operating costs amounted to , compared to in 2017. They rose by +6% mostly as a result of the full consolidation of the hotel operating activity (+ ) and the leasing of Paris head office on avenue Kléber (+ , sold early 2018.

Depreciation of operating assets

Depreciation of operating assets (- in 2018 vs - in 2017) rose as a result of the full consolidation of the hotel operating activity. This line includes co- working buildings, depreciation of tangible and intangible fixed assets, and since 2018 fixtures and fittings relating to hotels under management. In accordance with IAS 40, the properties used for coworking and hotels under management do not meet the definition of investment properties and are recognised at amortised cost. The depreciation relatin million.

Income from asset disposals

Income from asset disposals saw capital million mainly from the disposal of the Paris head office located at 10 and 30 avenue Kléber . This property was not recognised at fair value in the consolidated accounts as it was occupied by the Group.

Change in the fair value of assets

The income statement recognises changes in the fair value of assets based on appraisals conducted on the portfolio. For 2018, the change in the fair value of investm million Group share (+4.4% on a like- for- like basis on strategic activities). For more details on the evolution of the portfolio by activity, see chapter 2 of this document.

Income from disposal of securities, changes to scope and other

These two items .4 million impact on the income statement. They include mostly the impact of the merger- absorption of the hotel operating activity, as well as costs relating to share deals in accordance with IFRS 3.

Interest charges linked to finance lease liability

Following the acquisition of a portfolio of 10 hotel assets in the United Kingdom, 6 of which in leasehold, the Group applies the IAS 40 §25 standard. This standard requires the rental cost to be replaced with an interest payment while recognising a usage fee and a debt on rental liabilities on the balance sheet.

Financial aggregates

The changes in the fair value of financial instruments were - million, due to the negative change in the value of hedging instruments (- million) and the positive change in the value of ORNANE bonds million).

Share in income of equity affiliates

Group share	% interest	Contribution to earnings
OPCI Covivio Hotels	8.41%	3.9
Lénovilla (New Vélizy)	50.10%	2.2
Euromed	50.00%	3.7
	50.00%	2.4
Bordeaux Armagnac (Orianz / Factor E)	34.69%	5.8
Total		18.0

The equity affiliates involve Hotels in Europe and the France Offices sectors:

OPCI Covivio Hotels involves two hotel portfolios, Campanile (32 hotels) and AccorHotels (39 hotels) owned at 80% by Crédit Agricole Assurances.
Lénovilla involves the New Vélizy campus (47,000 m² ), let to Thalès and shared with Crédit Agricole Assurances.
Euromed in Marseille relates to two office buildings in Marseille (Astrolabe and Calypso) and a hotel (Golden Tulip) in partnership with Crédit Agricole Assurances.
Orly airport in partnership with ADP.
Bordeaux Armagnac involves in development project in partnership with Icade of three buildings near the new high- speed train station in Bordeaux. Upon completion, Covivio will retain one building at 100%.

EPRA Earnings of affiliates

	France Offices	Hotels (in lease)	2018
Net rental income	10.4	4.0	14.4
Net operating costs	- 0.3	- 0.3	- 0.6
Operating result	10.1	3.7	13.7
Cost of net financial debt	- 1.8	- 0.7	- 2.5
Other financial depreciation	- 0.3	- 0.1	- 0.4
Corporate income tax	-	- 0.1	- 0.1
Share in EPRA Earnings of affiliates	7.9	2.8	10.7

Taxes

The corporate income tax corresponds to the tax on:

foreign companies that are not or are only partially subject to a tax transparency regime (Germany, Belgium, the Netherlands, United Kingdom and Portugal);
French or Italian subsidiaries with taxable activity.

Corporate income tax amounted to - million, including taxes on sales (- million).

EPRA Earnings increased by 6.4% 23.1 million vs 2017)

	Net income Group share	Restatements	EPRA E. 2018	EPRA E. 2017
Net rental income	539.0	-	539.0	539.4
EBITDA from hotel operating activity & coworking	30.5	-	30.5	-
Income from other activities	5.1	-	5.1	7.3
Net revenue	574.6	-	574.6	546.7
Operating costs	- 68.1	-	- 68.1	- 63.7
Depreciation of operating assets	- 33.0	22.8	- 10.2	- 7.2
Net change in provisions and other	1.8	0.4	2.3	- 2.9
Operating income	475.3	23.2	498.6	472.9
Net income from inventory properties	- 0.6	0.6	-	-
Income from asset disposals	83.9	- 83.9	-	-
Income from value adjustments	403.5	- 403.5	-	-
Income from disposal of securities	50.4	- 50.4	-	-
Income from changes in scope & other	- 70.8	70.8	-	-
Operating result	941.6	- 443.0	498.6	472.9
Cost of net financial debt	- 106.8	6.7	- 100.1	- 111.0
Interest charges linked to finance lease liability	- 1.9	1.9	0.0	-
Value adjustment on derivatives	- 6.2	6.2	0.0	-
Discounting of liabilities and receivables	- 9.2	-	- 9.2	- 6.8
Net change in financial provisions	- 14.8	6.7	- 8.1	- 11.2
Share in earnings of affiliates	18.0	- 7.3	10.7	18.1
Pre- tax net income	820.7	- 428.8	391.9	395.4
Deferred tax	- 56.0	56.0	0.0	0.0
Corporate income tax	- 15.2	4.6	- 10.6	- 3.7
Net income for the period	749.5	- 368.2	381.3	358.2

The restatement of depreciation of operating assets neutralised the real estate depreciation of coworking and hotel operating activities.
million impact on the cost of debt due to early debt restructuring costs. 11 million lower than in 2017.
The interest charges linked to finance lease liabilities, as per the IAS 40 §25 standard, ( million) was cancelled and replaced by the lease expenses paid. The lease expenses paid are included in the restatement of Net change in provisions and other for an amount equal to million while the remaining restatement of + 1 million corresponds to provisions linked to tax litigation due to sale of assets in Italy from 2006.

EPRA Earnings by activity

	France offices	Italy offices (incl. Retail)	German Residential	Hotels in lease (incl. retail)	Hotel operating properties	Corporate or non attributable sector (including French Resi.)	2018
Net rental income	232.3	76.9	139.8	85.1	0.0	4.9	539.0
EBITDA from Hotel operating activity & Coworking	- 0.9	-	-	-	31.4	-	30.5
Income from other activities	0.7	-	0.4	-	-	4	5.1
Net revenue	232.1	76.9	140.2	85.1	31.4	8.9	574.6
Net operating costs	- 20.4	- 11.5	- 24.3	- 3.6	- 1	- 7.3	- 68.1
Depreciation of operating assets	- 2.1	- 0.6	- 1.1	-	- 2.8	- 3.6	- 10.2
Net change in provisions and other	0.4	1.9	0.1	- 3.1	- 0.6	3.6	2.3
Operating result	210	66.7	114.9	78.4	27	1.6	498.6
Cost of net financial debt	- 21.3	- 12.8	- 24.6	- 11.2	- 7.8	- 22.4	- 100.1
Discounting of liabilities & receivables and financial provision	- 12.5	- 2.1	- 0.5	- 1.2	- 0.9	- 0.1	- 17.3
Share in earnings of affiliates	7.9	-	-	2.8	-	-	10.7
Corporate income tax	- 1.7	- 0.6	- 4.6	- 1.5	- 1.8	- 0.4	- 10.6
EPRA Earnings	182.4	51.2	85.2	67.3	16.5	- 21.3	381.3

3.4. Simplified consolidated income statement (at 100%)

	2017	2018	var.	%
Net rental income	850.0	883.8	+33.8	+4.0%
EBITDA from hotel operating activity & coworking	0.0	75.8	+75.8	n.a
Income from other activities	6.2	4.8	- 1.4	- 22.7%
Net revenue	856.2	964.4	+108.2	+12.6%
Net operating costs	- 101.4	- 106.3	- 4.9	+4.8%
Depreciation of operating assets	- 9.9	- 60.1	- 50.2	n.a
Net change in provisions and other	- 6.0	6.3	+12.3	n.a
Current operating income	739.0	804.3	+65.3	+8.8%
Net income from inventory properties	- 4.4	- 1.1	+3.3	- 75.0%
Income from asset disposals	43.7	97.4	+53.7	+122.9%
Income from value adjustments	915.9	620.7	- 295.2	- 32.2%
Income from disposal of securities	- 4.1	119.3	+123.4	n.a
Income from changes in scope	- 3.3	- 160.0	- 156.7	n.a
Operating income	1,686.7	1,480.6	- 206.1	- 12.2%
Income from non- consolidated companies	0.0	0.0		n.a
Cost of net financial debt	- 236.9	- 188.0	+48.9	- 20.6%
Interest charge related to finance lease liability	0.0	- 4.5		n.a
Value adjustment on derivatives	0.1	- 16.1	- 16.2	n.a
Discounting of liabilities and receivables	- 6.8	- 9.5	- 2.7	+39.7%
Net change in financial and other provisions	- 23.3	- 25.7	- 2.4	+10.3%
Share in earnings of affiliates	43.2	22.8	- 20.4	- 47.2%
Income before tax	1,463.0	1,259.6	- 203.4	- 13.9%
Deferred tax	- 98.4	- 90.0	+8.4	- 8.5%
Corporate income tax	- 12.0	- 26.1	- 14.1	+117.5%
Net income for the period	1,352.6	1,143.5	- 209.1	- 15.5%
Non- controlling interests	- 438.5	- 393.9	+44.6	- 10.2%
Net income for the period - Group share	914.1	749.6	- 164.5	- 18.0%

Since the merger- absorption of the hotel operating activity, the companies covered by this scope have been fully consolidated (vs. equity affiliates on 31 December 2017). The EBITDA from this activity is presented in the "EBITDA from hotel operating activity & coworking" aggregate, and amounts to million of this income.

108 million (+13%) rise in consolidated net revenue

Net revenue 108 million, mainly due to the full consolidation of the hotel operating activity, acquisitions, delivery of assets under development and the effect of indexation on the German Residential sector. This increase was offset by disposals.

The net revenue by operating segment is the following:

	2017	2018	var.	%
France Offices	257.4	260.6	+3.2	+1.2%
Italy Offices (incl. Retail)	172.8	172.2	- 0.6	- 0.3%
German Residential	205.8	219.4	+13.6	+6.6%
Hotels in Europe (incl. Retail)	206.6	226.7	+20.1	+9.7%
Other (mainly France Residential)	7.4	4.9	- 2.5	- 33.8%
Total Net rental income	850.0	883.8	+33.8	+4.0%
EBITDA from hotel operating activity & coworking	0.0	75.8	+75.8	n.a
Income from other activities	6.2	4.8	- 1.4	- 22.7%
Net revenue	856.2	964.4	+108.2	+12.6%

3.5. Simplified consolidated balance sheet (Group share)

Assets	2017	2018	Liabilities	2017	2018
Investment properties	11,171	13,140
Investment properties under development	409	748
Other fixed assets	211	699
Equity affiliates	244	201
Financial assets	298	175
Deferred tax assets	4	61	Shareholders' equity	6,363	7,561
Financial instruments	37	33	Borrowings	6,780	7,879
Assets held for sale	352	325	Financial instruments	285	192
Cash	1,089	901	Deferred tax liabilities	331	501
Other	365	474	Other liabilities	422	625
Total	14,181	16,759	Total	14,181	16,759

Fixed Assets

The portfolio (excluding assets held for sale) at the end- December by operating segment is as follows:

	2017	2018	var.
France Offices	4,989	5,253	263
Italy Offices (incl. Retail)	1,873	3,318	1,445
German Residential	3,024	3,691	667
Hotels in Europe (incl. Retail)	1,651	2,314	663
France Residential	240	0	- 240
Car parks	14	11	- 3
Total Fixed Assets	11,791	14,587	2,796

The change in fixed assets in France Offices million) is mainly due to the acquisition of the asset located rue Jean Goujon in Paris CBD 4 million), the increase of fair value of investment properties properties under development (+96 million), partly offset by the disposals of the properties located at 10 and 30 avenue Kléber in Paris (accounted for at a net book value of 43 million), the disposal of one building located in Clichy (- a remaining Logistics asset (-

1,445 million) is mainly due to the merger of Beni Stabili with Covivio. as a result of the reduced stake in the Telecom Italia portfolio from 60% to 51%, and disposals over the

The change in fixed assets for German Residential is mainly due to acquisitions over the 82 million via 114 million via assets transactions), and the works completed over the period ( ). This sector benefits from strong growth in appraisal values of (- 9 million), essentially non- core assets in North Rhine- Westphalia.

The positive changes in the Hotels portfolio ) were mainly due to the full consolidation of the hotel operating activity ( the acquisitions of a portfolio in the United Kingdom ( million including 55 million in usage fees on leaseholds), the acquisition of an NH Hotel in Amsterdam , increase in fair value. At the same time, the portfolio value in Group share fell due to the decreased stake of Covivio in Covivio Hotels (now 42% versus 50% at end- 2017) and asset disposals (- 58 millions).

Assets held for sale

Assets held for sale consists of assets for which a 7 million decrease between 2017 and December 2018 comes from completed sales and newly signed preliminary sale agreements. In 2018, the Hotels in Europe sector had 119 million relating to 23 Jardiland (- and 48 Quick restaurants (- 68 million), which were sold in the first half of 2018.

Other Assets

Other assets : change of ownership rate linked to hotel operating activity.

invoiced to tenants). Note that Other liabilities include calls for funds (provisions for losses) received from tenants

equity

Shareho ,363 7,561.4 million at 31 December 2018, i.e. an increase of 1,195 million, due mainly to:

o 745 million
o the capital increase net of costs following the Beni Sta conversion of the French Ornane 581 million
o the change of scope million) mainly due to the merger of Covivio Hotels and FDM Management and the merger between Covivio and Beni Stabili at a discount to NAV (the exchange rate was 8, 245 Covivio shares for 1,000 Beni Stabili shares)
o the impact of the cash dividend distribution: million.

The issuance of 8,073,934 new shares was related to the merger of Beni Stabili (7,499,887), the conversion of part of the Ornane maturing in 2019 (392,701) and the free share plan (181,346).

Other liabilities

The line item following the recognition of leasehold liabilities (hotel portfolio in This item increased also by 43 million due to the full consolidation of the hotel operating activity 0 million was due to the change in rate.

3.6. Simplified consolidated balance sheet (at 100%)

Assets	2017	2018	Liabilities	2017	2018

Investment properties	17,733	19,270
Investment properties under development	685	870
Other fixed assets	230	1,414
Equity affiliates	369	250	Shareholders' equity	6,363	7,561
Financial assets	355	153	Non- controlling interests	3,804	3,797
Deferred tax assets	6	68	Shareholders' equity	10,168	11,358
Financial instruments	48	47	Borrowings	10,121	11,060
Assets held for sale	520	559	Financial instruments	323	235
Cash	1,297	1,172	Deferred tax liabilities	551	844
Other	491	582	Other liabilities	571	887
Total	21,733	24,384	Total	21,733	24,384

Investment properties, properties under development and other fixed assets

These three 2,906 million, mainly as a result of value adjustments for 631 million, asset acquisitions and works for ,676 million (including developments), and reclassification as Assets held for sale for - 1,260 million.

3,676 million in asset acquisitions and works break down into operating segments as follows:

o France Offices: 313 million including the acquisition of the asset rue Jean Goujon in Paris 4 million), 6 million of works on operating assets.
o Hotels in Europe 2,509 million including the full consolidation of the hotel operating activities ( 1,263 million), the acquisition of a hotel million including in usage fees on leaseholds), 3 hotels in Netherlands and Germany ( million) and works for 71 million (
o German Residential: million including acquisitions wor million worth of works on buildings.
o Italy Offices: million including the acquisition of three ass million of works on properties and million of works on buildings under development.

Investments in equity affiliates

Investments in equity affiliates de million. This change is due to the full consolidation of the companies FDM Management (hotel operating activity) and SCI Porte Dorée (Motel One) i.e. million, million), less dividend distributions, allocations of shares of losses, change in scope and increases in share capital million).

Financial Assets

Fi million, mainly due to the use of down payments made ( million in German Residential) and the repayment of the bond loan granted by Covivio Hotels in the hotel operating activity in 2016 (- .

Deferred tax liabilities

N million increase is mainly due to the full consolidation of the hotel ope million) and the growth of appraisal values in Germany .

Other liabilities

The increase in Other liabilities is mainly due to the impact of usage fees on leaseholds ).

4. FINANCIAL RESOURCES

Recognising Covivio's sound financial profile (42% LTV, ICR of 5.08x) and the ongoing enhancement of the quality of its portfolio, Standard and Poor (S&P) raised Covivio's rating outlook to BBB, positive outlook.

In September 2018, Covivio Hotels also obtained the rating BBB, positive outlook from S&P, underwritten by the solid fundamentals and perspectives of the hotel industry and the well diversified and secured profile of Covivio Hotels.

Early 2019, the Group continued to strengthen its financial profile by tightening its LTV guidance from 40- 45% to around 40%.

4.1. Main debt characteristics

Group share	2017	2018
	5,691	6,978
Average annual rate of debt	1.87%	1.53%
Average maturity of debt (in years)	6.2	6.0
Debt active hedging spot rate	75%	76%
Average maturity of hedging	6.3	6.9
LTV Including Duties	40.4%	42.0%
ICR	4.36	5.08

4.2. Debt by t ype

Covivio's net debt stands at billion in Group share at end- 2018 9.9 billion on a consolidated basis), 1.3 billion compared with end- 2017, due essentially to the merger with Beni Stabili and the full consolidation of the hotel operating activity. The investment realis of acquisitions and capex) were 1.0 billion Group Share realis billion secured).

With regards to commitments attributable to the Group, the share of corporate debts (bonds and loans) was increased to around 52%.

In addition, at end- 2018, Covivio's available liquidity totalled nearly billion Group share .0 billion on a consolidated basis). 3 billion in commercial paper outstanding at 31 December 2018.

4.3. Debt maturit y

The average maturity of Covivio's debt remained relatively stable at 6.0 years at end- December 2018 (excluding commercial paper).

Debt amortization schedule by company (Group share)

Debt amortization schedule by company (on a consolidated basis)

Until 2023, there is no major maturity that has not been already covered or is already under renegotiation. The larger ones relate to bond maturities in 2022 (a bond and a convertible bond) representing less than 5% of the consolidated debt.

4.4. Main changes during the period

Sustained financing and refinancing 3.6 .9 billion Group share)

In 2.2 billion of financing, with an objective to lengthen its debt maturities in a supportive environment. in Italy.

Covivio Hotels raised or secured 955 million ( 404 million Group share) of new funding, essentially:
50 million of new corporate credits with long maturities close to 7 years
£400 million (approximately 55 million) of bank mortgage loan backed by the hotel portfolio acquired in the United Kingdom.
- year maturity and a 1.875% coupon, right after obtaining a BBB rating, positive outlook, from S&P. This bond issue allowed Covivio Hotels to lengthen is debt maturity and improve its financial costs. Early 2019, the bulk of the proceeds have been used to repay debt with shorter terms and higher margins.
In Germany (Coviv million million Group share) including:
286 million with an average maturity of 10 years to finance acquisitions mostly in Berlin, Dresden, Leipzig and Hamburg
197 million of new money through existing liabilities to optimise their maturity and conditions.

4.5. Hedging profile

In the year 2018, the hedge management policy remained unchanged, with debt hedged at 90% to 100% on average over the year, at least 75% of which through short term hedges, and all of which with maturities equivalent to or exceeding the debt maturity.

Based on net debt at 31 December 2018, Covivio is hedged at 85% over 5 years (Group share). The average term of the hedges is 6.9 years (in Group share).

4.6. Average interest rate on the debt and sensitivit y

debt continued to improve, standing at 1.53% in Group share, compared to 1.87% in 2017. This reduction was mainly due to the "full year" effect of the issue, by Covivio, in May 2017, of a 1.50%, 10- year bond, the refinancing (in Italy 4.125% bond with a new impact of hedge restructuring.

For information purposes, an increase of 25 basis points in the three- month Euribor rate would have a negative impact of 0.8%on the EPRA Earnings.

Financial structure

financial statements. If these covenants are breached, early debt repayment may be triggered. These covenants are established in Group share for Covivio and on a consolidated or Group share basis depending on the debt anteriority for Covivio Hotels and the other subsidiaries of Covivio (if their debt includes them).

The most restrictive consolidated LTV covenants amounted, at 31 December 2018, to 60% for Covivio and Covivio Hôtels.

The most restrictive ICR consolidated covenants applicable to the REITs are as follows:

for Covivio : 200%;
for Covivio Hotels : 200%;

With respect to Covivio Immobilien (German Residential), for which almost all of the debt raised is "nonrecourse" debt, portfolio financings do not contain any consolidated covenants.

Lastly, with respect to Covivio, some corporate credit facilities are subject to the following ratios:

Ratio	Covenant	2018
LTV	60.0%	45.4%
ICR	200%	508%
Secured debt ratio	25.0%	9.6%

All covenants were fully complied with at the end December 2018. No loan has an accelerated payment clause contingent on Covivio's rating, which is currently BBB, positive outlook (S&P rating).

Detail of Loan- to- Value calculation (LTV)

	2017	2018
Net book debt	5,691	6,978
Receivables linked to associates (full consolidated)	- 61	- 57
Receivables on disposals	- 352	- 325
Security deposits received	- 5	- 34
Purchase debt	59	59
Net debt	5,333	6,620
Appraised value of real estate assets (Including Duties)	12,958	15,775
Preliminary sale agreements	- 352	- 325
Financial assets	104	16
Receivables linked to associates (equity method)	137	92
Share of equity affiliates	270	201
Value of assets	13,118	15,759
LTV Excluding Duties	42.9%	44.2%
LTV Including Duties	40.7%	42.0%

4.7. Reconciliation with consolidated account s

Net debt

	Consolidated accounts	Minority interests	Group share
Bank debt	11,060	- 3,181	7,879
Cash and cash- equivalents	1,172	- 271	901
Net debt	9,887	- 2,910	6,978

Portfolio

	Consolidated accounts	Portfolio of companies under equity method	Fair value of investment properties	Fair value of trading activities	Right of use of Investment properties	Minority interests	Group share
Investment & development properties	20,139	668	1,502	93	- 164	- 7,269	14,970
Assets held for sale	559					- 234	325
Total portfolio	20,698	668	1,502	93	- 164	- 7,502	15,295

Duties	785
Portfolio group share including duties	16,080
(- ) share of companies consolidated under equity method	- 315
(+) Advances and deposits on fixed assets	10
Portfolio for LTV calculation	15,775

Interest Coverage Ratio

	Consolidated accounts	Minority interests	Group share
EBE (Net rents (- ) operating expenses (+) results of other activities)	862.1	- 353.9	508.2
Cost of debt	175.8	- 75.7	100.1
ICR			5.08

5. EPRA REPORTING

5.1. Change in net rental income (Group share)

	2017	Acquisitions	Disposals	Developments	Change in percentage held/ consolidation method	Indexation, asset management and others	2018
France Offices	232	4	- 19	8	- 2	9	232
Italy Offices (incl. retail)	81	3	- 3	2	- 4	- 2	77
German Residential	129	12	- 9	0	2	7	140
Hotels in Europe (incl. retail)	93	9	- 7	2	- 14	3	85
Other (France Residential)	5	0	- 2	0	3	0	5
TOTAL	539	27	- 40	12	- 15	16	539

Reconciliation with financial data

	2018
Total from the table of changes in Net rental Income (GS)	539
Adjustments	-
Total net rental income (Financial data § 3.3)	539
Minority interests	-
Total net rental income (Financial data § 3.4)	539

5.2. Investment asset s Informations on leases

Annualised rental income corresponds to the gross amount of guaranteed rent for the full year based on existing assets at the period end, excluding any relief.

	Market rental value on vacant assets
Vacancy rate at end of period =	Contractual annualised rents on occupied assets + Market rental value on vacant assets
	Market rental value on vacant assets
EPRA vacancy rate at end of period =	Market rental value on occupied and vacant assets

	Gross rental income	Net rental income	Annualised rents	Surface (m²)	Average ²)	Vacancy rate at year end	EPRA vacancy rate at year end
France Offices	242	232	262	1,681,182	185	2.9%	3.0%
Italy Offices (incl. retail)	94	77	165	1,728,915	120	2.6%	2.8%
German Residential	154	140	160	2,902,888	86	1.3%	1.3%
Hotels in Europe (incl. retail)	86	85	93	n.a.	n.a.	0.0%	0.0%
Other (France Residential)	8	5	7	56,523	121	n.a.	n.a.
Total	585	539	686	6,369,509	108	2.0%	2.1%

5.3. Investment asset s- Asset values

The EPRA net initial yield is the ratio of:

	Annualised rental income after deduction of outstanding benefits granted to tenants (rent- free periods, rent ceilings) - unrecovered property charges for the year
EPRA NIY =	- Value of the portfolio including duties

	Market value	Change in fair value over the year	Duties	EPRA NIY
France Offices	5,640	108	307	4.5%
Italy Offices (incl. Retail)	3,332	- 26	120	4.0%
German Residential	3,743	292	258	3.7%
Hotels in Europe (incl. Retail)	2,323	36	99	5.0%
Ohter (France Resi. and car parks)	258	- 6	0	n.a
Total 2018	15,295	403	785	4.2%

Reconciliation with financial data

	2018
Total portfolio value (Group share, market value)	15,295
Fair value of the operating properties	- 712
Fair value of companies under equity method	- 315
Inventories of real estate companies and others	- 74
Right of use on investment assets	69
Fair value of car parks facilities	- 51
Investment assets Group share 1 (Financial data§ 3.5)	14,213
Minority interests	6,485
Investment assets 100% 1 (Financial data§ 3.5)	20,698

¹Fixed assets + Developments assets + asset held for sale

	2018
Change in fair value over the year (Group share)	403
Others	-
Income from fair value adjustments Group share
(Financial data § 3.3)	403
Minority interests	217
Income from fair value adjustments 100%
(Financial data § 3.3)	621

5.4 Asset s under development

	Ownership type	% ownership (Group share)	Fair value December 2018	Capitalised financial expenses over the year	Total cost incl. financial cost 1 share)	% progress	Delivery date	Surface at 100% (m²)	Pre leasing	Yield (%)
Hélios	FC ²	100%	21	0.7	22	87%	2019	9,000 m²	100%	>7%
Silex 2	FC	50%	53	1.0	83	47%	2020	30,900 m²	44%	6.0%
Meudon Ducasse	FC	100%	4	0.1	22	9%	2020	5,100 m²	100%	6.4%
Flow	FC	100%	50	0.8	115	25%	2020	23,600 m²	100%	6.6%
Montpellier Orange	FC	100%	10	0.0	49	7%	2020	16,500 m²	100%	6.7%
Iro	FC	100%	35	0.1	139	25%	2020	25,600 m²	0%	6.3%
Cité Numérique	FC	100%	5	0.0	38	70%	2019	19,200 m²	38%	>7%
Total France Offices			178	2.6	468
Ferrucci	FC	100%	87	1.4	50	74%	2019	21,000 m²	0%	5.5%
Symbiosis	FC	100%	143	4.6	21	10%	2020	9,200 m²	99%	>7%
Principe Amedeo	FC	100%	62	1.0	59	85%	2019	7,100 m²	74%	5.3%
The Sign	FC	100%	46	0.9	105	15%	2020	26,500 m²	35%	>7%
Dante	FC	100%	43	0.2	54	6%	2019	5,100 m²	0%	4.8%
Total Italy Offices			381	8.1	289
Meininger Munich	FC	42%	18	0.4	14	98%	2019	173 rooms	100%	6.4%
B&B Cergy	FC	21%	1	0.0	1	85%	2019	84 rooms	100%	6.6%
Meininger Porte de Vincennes	FC	42%	20	0.4	20	88%	2019	249 rooms	100%	6.2%
Meininger Lyon Zimmermann	FC	42%	6	0.1	8	75%	2019	176 rooms	100%	6.1%
B&B Bagnolet	FC	21%	1	0.0	2	56%	2019	108 rooms	100%	6.2%
Total Hotels in Europe	FC		46	1.0	44
Total			604	11.8	801

¹, projects committed in 2019 (Paris Gobelins, Jean Goujon) and N2 in Paris. 2

FC : Full consolidation

Réconciliation with financial data	2018
Total fair value of assets under development	604
Project under technical review and non- committed projects	143
Assets under development (Financial data § 3.5)	748

5.5 Information on leases

	Firm residual lease term (years)	Residual lease term (years)	Lease expiration by date of 1st exit option Annualised rental income of leases expiring
			N+1	N+2	N+3 to 5	Beyond	Total %		Section
France Offices	4.6	5.4	14%	9%	36%	40%	100%	262	2.A.6
Italy Offices (incl. retail)	7.4	7.9	12%	4%	24%	60%	100%	165	2.B.6
Hotels in Europe (incl. retail)	13.4	14.9	6%	0%	10%	83%	100%	93	2.D.5
Total	7.0	7.9	12%	6%	27%	54%	100%	519	1.B.1

5.6 EPRA Net Initial Yield

The data below shows detailed yield rates for the Group and the transition from the EPRA topped - up yield rate to Covivio s yield rate.

EPRA topped- up net initial yield is the ratio of:

Annualised rental income after expiration of outstanding benefits granted to tenants (rent- free periods, rent ceilings) - unrecovered property charges for the year

EPRA Topped- up NIY =

Value of the portfolio including duties

EPRA net initial yield is the ratio of:

Annualised rental income after deduction of outstanding benefits granted to tenants (rent- free periods, rent ceilings) - unrecovered property charges for the year

Value of the portfolio including duties EPRA NIY =

	Total 2017	France Offices	Italy Offices (incl. Retail)	German Residential	Hotels in Europe (incl. retail)	France Residential	Total 2018
Investment, saleable and operating properties	12,707	5,640	3,332	3,743	2,323	206	15,244
Restatement of assets under development	- 331	- 344	- 381	-	- 46	-	- 771
Restatement of undeveloped land and other assets under development	- 127	- 287	- 14	-	0	-	- 302
Restatement of Trading assets	- 30	- 16	-	- 37	-	-	- 53
Restatement of operating hotel properties	- 250						-
Duties	690	307	120	258	99	-	785
Value of assets including duties (1)	12,659	5,301	3,058	3,964	2,376	206	14,904
Gross annualised IFRS revenues	593	248	148	160	121	7	683
Irrecoverable property charge	- 49	- 10	- 27	- 15	- 2	- 3	- 56
Annualised net revenues (2)	543	237	121	145	119	4	627
Rent charges upon expiration of rent free periods or other reductions in rental rates	27	12	15	-	-	-	27
Annualised topped- up net revenues (3)	570	250	136	145	119	4	654
EPRA Net Initial Yield (2)/ (1)	4.3%	4.5%	4.0%	3.7%	5.0%	2.0%	4.2%
EPRA "Topped- up" Net Initial Yield (3)/ (1)	4.5%	4.7%	4.4%	3.7%	5.0%	2.0%	4.4%
Transition from EPRA topped- up NIY to Covivio's yields
Impact of adjustments of EPRA rents	0.4%	0.2%	0.9%	0.4%	0.1%	1.3%	0.4%
Impact of restatement of duties	0.3%	0.3%	0.2%	0.3%	0.2%	0.0%	0.3%
Covivio yield rate	5.2%	5.2%	5.5%	4.3%	5.3%	3.3%	5.0%

5.7. EPRA cost ratio

	2017	2018

Cost of other activities and fair value	- 27.8	- 20.4
Expenses on properties	- 19.2	- 23.3
Net losses on unrecoverable receivables	- 2.5	- 2.0
Other expenses	- 5.0	- 4.3
Overhead	- 78.7	- 86.0
Amortisation, impairment and net provisions	- 3.7	2.3
Income covering overheads	23.1	22.6
Cost of other activities and fair value	- 5.3	- 9.7
Property expenses	1.2	0.6
EPRA costs (including vacancy costs) (A)	- 117.9	- 120.2
Vacancy cost	12.7	10.2
EPRA costs (excluding vacancy costs) (B)	- 105.3	- 110.0
Gross rental income less property expenses	587.7	584.1
EBITDA from hotel operating properties & coworking, income from other activities and fair value	27.0	56.0
Gross rental income (C)	614.7	640.0
EPRA costs ratio (including vacancy costs) (A/ C)	19.2%	18.8%
EPRA costs ratio (excluding vacancy costs) (B/ C)	17.1%	17.2%

The calculation of the EPRA cost ratio excludes car parks activities.

5.8. EPRA Earnings

	2017	2018

Net income Group share (Financial data §3.3)	914.1	749.6
Change in asset values	- 627.2	- 403.5
Income from disposal	- 24.4	- 133.7
Acquisition costs for shares of consolidated companies	2.2	70.8
Changes in the value of financial instruments	0.5	6.2
Interest charges related to finance lease liabilities	0.0	1.9
Interest charges	0.0	- 1.5
Deferred tax liabilities	61.4	56.0
Taxes on disposals	3.6	4.6
Adjustment to amortisation	0.0	24.7
Adjustments from early repayments of financial instruments	44.7	13.3
EPRA Earnings adjustments for associates	- 16.7	- 7.3
EPRA Earnings	358.2	381.3
	4.86	5.08

5.9. EPRA NAV and EPRA NNNAV

	2017	2018	Var.	Var. (%)
	7,112	8,293	1,181	16.6%
	94.5	99.7	5.2	5.5%
	6,492	7,625	1,132	17.4%
	86.3	91.7	5.4	6.2%
Number of shares	75,247,258	83,186,524	7,939,266	10.6%

Evolution of EPRA NAV

Reconciliation between

	7,561.4	90.9
Fair value assessment of operating properties	35.6
Fair value assessment of car parks facilities	25.9
Fair value assessment of hotel operating properties	16.5
Fair value assessment of fixed- rate debts	- 60.5
Restatement of value Excluding Duties on some assets	45.7
EPRA NNNAV	7,624.6	91.7
Financial instruments and fixed- rate debt	199.5
Deferred tax liabilities	447.4
ORNANE	21.4
EPRA NAV	8,292.9	99.7
IFRS NAV	7,561.4	90.9

Valuations are carried out in accordance with the Code of conduct applicable to SIICs and the Charter of property valuation expertise, the recommendations of the COB/ CNCC working group chaired by Mr Barthès de Ruyter and the international plan in accordance with European TEGoVA standards and those of the Red Book of the Royal Institution of Chartered Surveyors (RICS).

The real estate portfolio held directly by the Group was valued on 31 December 2018 by independent real estate experts such as REAG, DTZ, CBRE, JLL, BNP Real Estate, Yard Valtech, VIF, MKG and CFE. This did not include:

buildings that do not meet the criteria of the revised IAS 40 (certain buildings in development), which are valued at cost
assets on which the sale has been agreed, which are valued at their agreed sale price
assets owned for less than 75 days, for which the acquisition value is deemed to be the market value.

Assets were estimated at values excluding and/ or including duties, and rents at market value. Estimates were made using the comparative method, the rent capitalisation method and the discounted future cash flows method.

Car parks were valued by capitalising the gross operating surplus generated by the business.

Other assets and liabilities were valued using the principles of the IFRS standards on consolidated financial statements. The application of the fair value essentially concerns the valuation of the debt coverages and the ORNANES.

For companies shared with other investors, only the Group share was taken into account.

Fair value assessment of operating properties

In accordance with IFRS, operating properties are valued at historical cost. To take into account the appraisal value, a value adjustment is recognised in EPRA NNNAV for a total of 35.6 million.

Fair value adjustment for the car parks

Car parks are valued at historical cost in the consolidated financial statements. NAV is restated to take into account the appraisal value of these assets net of tax. The impact on 5. at 31 December 2018.

Fair value adjustment for own occupied buildings and operating hotel properties

The merger- absorption of the operating hotel properties activity realised in January 2018 implied the integration at fair value of operating hotel properties. As a consequence, the adjustment applied in 2017 is captured in th n accordance with IAS 40, these assets are not recognised at fair value in the consolidated financial statements. In line with EPRA principles, EPRA NNNAV is adjusted for the difference resulting from the fair value appraisal of the assets for 16.5 million. The market value of these assets is determined by independent experts.

Fair value adjustment for fixed- rate debts

The Group has taken out fixed- rate loans (secured bond and private placement). In accordance with EPRA principles, EPRA NNNAV is adjusted for the fair value of fixed- rate debt. The impact was - 60.5 million at 31 December 2018.

Recalculation of the base cost excluding duties of certain assets

When a company, rather than the asset that it holds, can be sold off, transfer duties are recalculated net asset value (NAV). The difference between these recalculated duties and the transfer duties already deducted from the value has an impact of 45.7 million at 31 December 2018.

5.10. CAPEX by t ype

	2017		2018
	100%	Group share	100%	Group share
Acquisitions 1	683	358	446	328
Renovation on portfolio excl. Developments 2	165	101	225	140
Developments 3	277	163	204	136
Capitalized expenses on development portfolio 4 (except under equity method)	29	17	22.5	14
Total	1,154	639	897	619

1 Acquisitions including duties

2 Renovation on portfolio excluding developments

3 Total renovation expenses (excl under equity method) on development projects

⁴Commercialization fees, financial expenses capitalized and other capitalized expenses

5.11. EPRA performance indicator reference table

EPRA information	Section	in %

EPRA Earnings	5.8
EPRA NAV	5.9
EPRA NNNAV	5.9
EPRA NAV/ IFRS NAV reconciliation	5.9
EPRA net initial yield	5.6	4.2%
EPRA topped- up net initial yield	5.6	4.4%
EPRA vacancy rate at year- end	5.2	2.1%
EPRA costs ratio (including vacancy costs)	5.7	18.8%
EPRA costs ratio (excluding vacancy costs)	5.7	17.2%
EPRA indicators of main subsidiaries	5.2 & 5.6

6. FINANCIAL INDICATORS OF THE MAIN ACTIVITIES

	Covivio Hôtels			Covivio Immobilien
	2017	2018	Var. (%)	2017	2018	Var. (%)
	155.5	198.4	+27.6%	118.6	129.6	+9.3%
	2,422	3,406	+40.6%	2,751	3,240	+17.8%
	2,226	3,109	+39.7%	2,306	2,691	+16.7%
% of capital held by Covivio	50.0%	42.3%	- 7.7 pts	61.7%	61.7%	+0.0 pts
LTV Including Duties	31.2%	36.3%	+5.1 pts	36.9%	36.0%	- 0.9 pts
ICR	5.46	5.82	+36 bps	4.5	5.3	+84 bps

7. GLOSSARY

Net asset value per share (NAV/ share), and Triple Net NAV per share

NAV per share (Triple Net NAV per share) is calculated pursuant to the EPRA recommendations, based on the shares outstanding as at year- end (excluding treasury shares) and adjusted for the effect of dilution.

Operating asset s

Properties leased or available for rent and actively marketed.

Rental activit y

Rental activity includes mention of the total surface areas and the annualised rental income for renewed leases, vacated premises and new lettings during the period under review.

For renewed leases and new lettings, the figures provided take into account all contracts signed in the period so as to reflect the transactions completed, even if the start of the leases is subsequent to the period.

Lettings relating to assets under development (becoming effective at the delivery of the - lets".

Cost of development project s

This indicator is calculated including interest costs. It includes the costs of the property and costs of construction.

Definition of the acronyms and abbreviations used:

MRC: Major regional cities, i.e. Lyon, Bordeaux, Lille, Aix- Marseille, Montpellier, Nantes and Toulouse ED: Excluding Duties ID: Including Duties IDF: Paris region (Île- de- France) ILAT: French office rental index CCI: Construction Cost Index CPI: Consumer Price Index RRI: Rental Reference Index PACA: Provence- Alpes- Côte-LFL: Like- for- Like GS: Group share CBD: Central Business District Rtn: Yield Chg: Change MRV: Market Rental Value

Firm residual term of leases

Average outstanding period remaining of a lease calculated from the date a tenant first takes up an exit option.

Green Asset s

are certified as HQE, BREEAM, LEED, etc. and/ or which have a recognised level of energy performance such as the BBC- effinergieR, HPE, THPE or RT Global certifications.

Unpaid rent (%)

Unpaid rent corresponds to the net difference between charges, reversals and unrecoverable loss of income divided by rent invoiced. These appear directly in the income statement under net cost of unrecoverable income (except in Italy where unpaid amounts not relating to rents were restated).

Loan To Value (LTV)

The LTV calculation is detailed in Part 4

Rental income

Recorded rent corresponds to gross rental income accounted for over the year by taking into account deferment of any relief granted to tenants, in accordance with IFRS standards.

The like- for- like rental income posted allows comparisons to be made between rental income from one year to the next, before taking changes to the portfolio (e.g. acquisitions, disposals, building works and development deliveries) into account. This indicator is based on assets in operation, i.e. properties leased or available for rent and actively marketed.

for the full year based on existing assets at the period end, excluding any relief.

Portfolio

The portfolio presented includes investment properties, properties under development, as well as operating properties and properties in inventory for each of the entities, stated at their fair value. For the hotel operating properties it includes the valuation of the portfolio consolidated under the quity method. For offices in France, the portfolio includes asset valuations of Euromed and New Vélizy, which are consolidated under the equity method.

Project s

o Committed projects: these are projects for which promotion or construction contracts have been signed and/ or work has begun and has not yet been completed at the closing date. The delivery date for the relevant asset has already been scheduled. They might pertain to VEFA (pre- construction) projects or to the repositioning of existing assets.
o Controlled projects: These are projects that might be undertaken and that have no scheduled delivery date. In other words, projects for which the decision to launch operations has not been finalised.

Yields/ return

The portfolio returns are calculated according to the following formula:

Gross annualised rent (not corrected for vacancy)

Value excl. duties for the relevant scope (operating or development)

The returns on asset disposals or acquisitions are calculated according to the following formula:

Gross annualised rent (not corrected for vacancy)

Acquisition value including duties or disposal value excluding duties

Recurring Net Income

The RNI is defined as the recurring result from operational activities and it is used as a measure of the company performance. The RNI per share is calculated on the diluted average number of shares over the period (excluding auto- control).

Calculation :

(+) Net Rental Income

(- ) Net Operating Costs (including costs of structure, costs on development projects, revenues from administration and management and costs related to business activity)

(+) Income from other activities
(+) Costs of the net financial debt
(+) RNI from non- consolidated affiliates
(- ) Recurrent Tax
(+) RNI from discontinued operations

(=) Recurring Net Income

Surface

SHON: Gross surface

SUB: Gross used surface

Debt interest rate

Average cost:

Financial Cost of Bank Debt for the period

+ Financial Cost of Hedges for the period

Average used bank debt outstanding in the year

Spot rate: Definition equivalent to average interest rate over a period of time restricted to the last day of the period.

Occupancy rate

The occupancy rate corresponds to the spot financial occupancy rate at the end of the period and is calculated using the following formula:

1 - Loss of rental income through vacancies (calculated at MRV)

rental income of occupied assets + loss of rental income

This indicator is calculated solely for properties on which asset management work has been done and therefore does not include assets available under pre- leasing agreements. Occupancy rate are calculated using annualised data solely on the strategic activities portfolio.

development.

Like- for- like change in rent

This indicator compares rents recognised from one financial year to another without accounting for changes in scope: acquisitions, disposals, developments including the vacating and delivery of properties. The change is calculated on the basis of rental income under IFRS for strategic activities.

This change is restated for certain severance pay and income associated with the Italian real estate (IMU) tax.

Given specificities and common practices in German residential, the Lile- for- Like change is computed ² spot N versus N- 1 (without vacancy impact) on the basis of accounted rents.

For operating hotels (owned by FDMM), like- for- like change is calculated on an EBITDA basis

Restatement done:

o Deconsolidation of acquisitions and disposals realized on the N and N- 1 periods
o Restatements of under work assets, ie. :
Restatement of released assets for work (realized on N and N- 1 years)
Restatement of deliveries of under- work assets (realized on N and N- 1 years).

Like- for- like change in value

This indicator is used to compare asset values from one financial year to another without accounting for changes in scope: acquisitions, disposals, developments including the vacating and delivery of properties.

The like- for- like change presented in portfolio tables is a variation taking into account CAPEX works done on the existing portfolio. The restated like- for- like change in value of this work is cited in the comments section. The current scope includes all portfolio assets.

Restatement done:

o Deconsolidation of acquisitions and disposals realized on the period
o Restatement of work realized on asset under development during the N period

AI assistant

Covivio — Annual Report 2018

1222_iss_2019-02-20_1e8a5508-dcf7-4fb8-bb4d-ca43167082c8.pdf

1. BUSINESS ANALYSIS

Changes in scope:

A. RECOGNISED REVENUES : +3.4% LFL GROWTH ON STRATEGIC ACTIVITIES

B. LEASE EXPIRATIONS AND OCCUPANCY RATES

C. BREAKDOWN OF REVENUES GROUP SHARE

By major tenants

D. COST TO REVENUE RATIO BY BUSINESS

GROUP SHARE REALISED AND SECURED IN 2018

REALISED IN GROUP SHARE

G. DEVELOPMENT PROJECTS:

1. Deliveries: 35,000 m² of office spaces and 653 hotel rooms delivered in 2018

Committed project s: 3 bn in Group share) Bn

3. Managed project s:

0 Bn in Group share)

Geographic breakdown of the portfolio at the end of 2018

I. LIST OF MAJOR ASSETS

2. BUSINESS ANALYSIS BY SEGMENT

A. FRANCE OFFICES

1. Sustained demand for new space, limited offer, increasing rents 1

In 2018, the France Offices business was characterized by:

2. Accounted rental income: +2.8% at a like- for- like scope

2.1. Geographic breakdown: success of asset management policy

3. Annualised rents: 62 million Group share at end- 2018

3.1. Breakdown by major tenants

3.2. Geographic breakdown: 92% of rental income generated in strategic locations

4. Indexation

5. Rental activity: almost 182,000 m² renewed or let in 2018

6. Lease expirations and occupancy rate

6.1. Lease expirations: firm residual lease term of 4.6 years

6.2. Occupancy rate: a high level of

7. Reserves for unpaid rent

8. Disposals and disposal agreements: 242 Group share realised

10.1. Delivered projects

10.2. Committed pipeline .1 billion of projects 847 million Group share),

For a breakdown of committed projects, see the table on page 17 of this document.

10.3. Managed pipeline of projects hare)

For a breakdown of managed projects, see the table on page 18 of this document.

11. Portfolio values

11.1. Change in portfolio values million rise in Group Share in 2018

11.2. Like- for- like portfolio evolution:

+2.2% of growth

12. Strategic segmentation of the portfolio

B. ITALY OFFICES

1. Confirmed supportive environment in Milan Office Market 1

2. Accounted rental income:

+1.3% like- for- like growth on strategic activities

3. Annualised rental income: 152 million Group share from offices

4. Indexation

5. Rental activity

6. Lease expirations and occupancy rates

6.2. Occupancy rate: a high- level of 97.9%

7. Reserves for unpaid rent

10.1. Delivered projects

10.2. Committed projects: 289 million, primarily in Milan

For detailed figures on the committed projects, see page 17 of this document.

million of projects in Milan

11. Portfolio values

11.1. Change in portfolio values

11.2. Portfolio in Milan: 73%

C. GERMAN RESIDENTIAL

1. Solid economic growth outlook based on positive demographic and macro economic trends 1

2. Accounted rental income: +4.4% at a like- for like scope

2.1. Geographic breakdown

3. Annualised rental income: 159.9 million in Group share

3.1. Geographic breakdown

4. Indexation

6. Reserves for unpaid rent

7. Disposals and disposals agreement s:

9.1 Committed projects in Group share)

For details on the committed projects, see page 17 of this document

Group share)

10. Portfolio values

10.1. Change in portfolio value: 19% growth

10.2. Change on like- for- like basis:

11. Maintenance and modernisation CAPEX

D. HOTELS IN EUROPE

1. The European hotel market experiencing a long term growth cycle 1

Covivio Annual Report 2018