Covivio — Interim / Quarterly Report 2013

Nov 7, 2013

9M 2013 Revenues

Strategic plan paying-off

7 November 2013

A partnership-based strategy – Sustainable rental revenue

• · Group share rental revenue is solid: +5.4% (+1.2% on a like-for-like basis)
• · High occupancy rate of 95.7%
• · Strengthening of partnerships with
• · Two new tenants in the CB 21 tower, which is now over 80% leased
• · 26% of Offices France leases extended by 5 years on average

Continued improvement of portfolio quality

• · €1.3 billion in investments YTD, with greater presence on the German residential market
• · €530 million in non-core disposals YTD
• · Three buildings delivered in 2013, all 100% leased
• · Four new projects started in Q3, bringing the number of projects started in 2013 to nine

Ongoing active management of financing

• · €1.5 billion in new financing YTD
• · a €0.4 billion capital increase through the public exchange offer on FDL

The partnership-based strategy – Sustainable rental revenue

Rental income increased by 5.4% (1.2% on a like for like basis) – Occupancy rate of 95.7%

Total rental activities from the beginning of the year contributed to extending 26% of leases in the Offices France portfolio, which registered an occupancy rate of 95.8%.

Notwithstanding the impact of disposals, group share rental income, which amounted to €381 million, was up by 5.4% on a current consolidation basis. On a like for like basis, it rose 1.2%, driven by good results with increases of +1.8% in the Offices sector, +2.3% in the Services sector, and +1.3% in the Residential sector, whereas income dropped by 3.8% in Logistics following a decrease in occupancy rates to 83.7% at the end of September.

	Rents $(\epsilon m)$	Change VS proforma*		Occupancy rate	Firm residual term of leases end of june
Offices - France	193.7	$+4.1%$	$+2.1%$	95.8%	5.8 years
Offices - Italy	88.7	$+2.2%$	$+1.2%$	97.7%	7.0 years
Offices	282.3	$+3.5%$	$+1.8%$	96.3%	6.2 years
Service Sector	39.9	$+6.7%$	$+2.3%$	100%	6.9 years
Residential	17.6	Na	$+1.3\%$ **	98.3%	Na
Logistics	41.2	$-19.6%$	$-3.8%$	83.7%	2.8 years
Total	381.0	$+5.4%$	$+1.2%$	95.7%	5.9 years
* Proforma: Restatment of the DS Campus rents contribution, asset consolidated under the equity method since October 2012 **Germany Indexation: $+2.2\%$ Following the public Renewals: -0.5% exchange offer on FDL Occupancy rate: -0.4%
€379 m	$+3$ Indexation Asset Mgt	$+14$ Invest.	$-36$ Disposals	$+20$ Scope effect	€381 m

Strengthening of Key Accounts partnerships

In the wake of the major agreements signed in the first half with Orange (lease extensions for 61 buildings up to 2019) and Dassault Systèmes (renewal of the lease on the DS Campus headquarters in Vélizy-Meudon until 2025), Foncière des Régions has strengthened its partnership with Vinci by completing a third agreement in less than one year. This 9,700 sq. m. office project in Lille-Roubaix will generate €1.2 million in annual rental revenues under a firm 12-year lease. This €23 million investment project will be delivered at the end of 2015.

At the same time, Foncière des Régions signed an agreement for a new 182-room hotel project with B&B in Paris' 13th arrondissement. This project, managed by FDM in partnership with Crédit Agricole Assurances and Crédit Mutuel Assurances, will be delivered at the end of 2015 and let under a firm 12 year lease.

These projects provide a clear demonstration of Foncière des Régions' partnership approach.

Two new tenants in the CB 21 tower, which is now over 80% leased

Nokia and Informatica signed firm 6-year leases during the third quarter, for 2,150 sq. m. on the 5th and 6th floors, and 1,380 sq. m. on the 14th floor in the CB 21 tower, respectively. These two lease agreements represent yearly rental revenues of €1.7 million. With these two new tenants, CB 21 is now over 80% leased.

Continued improvement of portfolio quality

Investments amounting to €1.3 billion and disposals of €530 million in non-core assets

Investments since the beginning of 2013 represented nearly €1.3 billion. These investments include primarily:

• An increase in capital for FDL via a successful Public Exchange Offer in August 2013, increasing Foncière des Régions' stake in FDL to 59,7% and augmenting the group's presence in Germany from 9% to 14% of assets in value.
• Acquisition of €351 million in German residential assets by FDL during September 2013. This investment represents over 4,000 residential units acquired on the basis of a 6.5% average gross yield, of which 78% in value are located in Berlin and 21% in Dresden. These properties are located in the best residential areas and have strong potential for value creation with an average reversion rate of greater than 20%. These housing units built prior to 1945 and recently renovated comprise an attractive rental offer in a market where demand is very strong.
• The purchase of Vinci subsidiary Sicra's headquarters in Chevilly-Larue, a 6,700 sq. m. building with a firm 12-year lease.

At the same time, volumes of disposals achieved and disposal agreements signed since the beginning of the year amount to €530 million. Of these transactions, €414 million concern real estate assets sold at 2.2% over their 2012 appraised values, resulting in an average yield of 6.9%. The balance concerns the sale of the group's entire 7.65% stake in Altarea for €115 million, i.e. €129.9 per share.

Four new projects started in Q3, bringing the number of projects started in 2013 to nine

Four new projects were begun in the third quarter of 2013, bringing the number of projects started since the beginning of the year to nine. These are:

• The Askia building in Orly: An 18,500 sq. m. office building that is part of Phase 1 of the Cœur d'Orly real estate project, in which Foncière des Régions holds a 25% stake. The total budget for this development is €62 million with a 2015 delivery date. The building is 50% pre-leased.
• The Silex building in Lyon: This project concerns demolition of a former EDF building and construction of a new building of 10,500 sqm located opposite the Part-Dieu TGV station, in the heart of the Lyon area prime. It has a budget of € 47 million and will be delivered in 2016. This project is in line with successfully developments as The Patio (24% of value creation), building delivered in early 2013
• Turnkey rental for Vinci: 72% pre-let, this Lille-Roubaix office property of 9,700 sq. m. will produce yearly rental revenues of €1.2 million under a firm 12-year lease. This €23 million investment project will be delivered at the end of 2015.
• The B&B 182-room hotel in Paris in the 13th arrondissement, which will be leased under a firm 12-year lease featuring fixed and indexed rents. Delivery is set for the end of 2015.

The investment amount for committed projects totals €610 million and represents annualised rental income of around €40 million, for a yield of over 7%.

Managed projects included, the total pipeline for developments currently in terms of investment volume is €1.6 billion. These projects mainly involve building redevelopments and turnkey rental projects such as offices, hotels, etc., and target an average yield of over 7%. They are contributing to ongoing gradual renewal of the portfolio and aim to adapt to changes in rental market demand.

Ongoing active management of financing

New Group share financing for 2013 amounts to €1.5 billion YTD

Since the beginning of the year, Foncière des Régions has signed new financing agreements in the amount of nearly €1.5 billion, Group share, and €2.4 billion in total share. Beni Stabili, Foncière des Régions' Italian subsidiary, issued a convertible bond issue in the amount of €270 million, with a 5-year maturity and a coupon of 2.625%.

This new financing was used to extend debt maturity to 4.3 years vs 4 years at the end 2012 and to pursue diversification of financing sources. The average cost of debt has improved to 3.95% from 4.04% at the end of 2012.

Outlook

This overall good performance is the manifestation of a strategy that is paying-off and is based on:

• · attractive real estate markets in Offices-Key Accounts and German Residential
• · a partnership strategy with major tenants providing high visibility of rents
• · an active policy of sustained improvement in asset quality that creates value over the long term

In view of this successful performance and the investments carried out in Germany in the 3rd quarter, Foncière des Régions aims to achieve a slight increase in EPRA Recurring Net Income for 2013.

Investor Relations Sébastien Bonneton Tel: + 33 (0)1 58 97 52 44 sebastien.bonneton@fdr.fr

Media relations Géraldine Lemoine Tel: + 33 (0)1 58 97 51 00 geraldine.lemoine@fdr.fr

Foncière des Régions, Real Estate Partner

As a partner to companies in their real estate strategy, Foncière des Régions designs simple and innovative solutions alongside them. The aim of these strategies is twofold: adding value to existing urban property and designing buildings for the future.

Foncière des Régions owns and manages real estate assets of €10 bn group share (€16 bn total share), which are primarily rented to key accounts who are the leading companies in their sector (Suez Environnement, Thales, Dassault Systèmes, Orange, EDF, IBM, and Eiffage, etc.). This responsible partnership approach is based on key values and know-how: vision and expertise.

Foncière des Régions shares are listed in the Euronext Paris A compartment (FR0000064578 - FDR), are admitted for trading on the SRD, and are included in the composition of the MSCI, SBF120, Euronext IEIF "SIIC France" and CAC Mid100 indices, in the "EPRA" and "GPR 250" benchmark European real estate indices, and in the "FTSE4 Good", ASPI Eurozone® and DJSI World ethics indices.

Foncière des Régions is rated BBB- / Stable by Standard and Poor's.

www.foncieredesregions.fr

Apendix:

		100%				Group Share
$(\epsilon$ million)	9m 2012	9m 2012 Proforma*	9m 2013	Change (%)	9m 2012	9m 3012 Proforma*	9m 2013	Change (%)	Change (%) LFL
Offices France	206.2	198.9	201.3	$+1.2%$	198.9	186.1	193.7	$+4.1%$	$+2.1%$
Offices Italy	170.5	170.5	174.2	$+2.2%$	86.8	86.8	88.7	$+2.2%$	$+1.2%$
Total Offices	376.7	369.4	375.6	$+1.7%$	285.7	272.9	282.3	$+3.5%$	$+1.8%$
Service sector	135.7	135.7	153.3	$+13.0%$	37.4	37.4	39.9	$+6.7%$	$+2.3%$
Residential			29.6				17.6		$+1.3%$ **
Logistics	60.7	55.3	41.2	$-25.5%$	56.3	51.2	41.2	$-19.6%$	$-3.8%$
Total rent	573.1	560.4	599.6	$+7.0%$	379.3	361.5	381.0	$+5.4%$	$+1.2%$
* Restatment of the DS Campus rents contribution: asset consolidated under the equity method since October 2012

ר שמושות השפט ואו ביו שיום ואו השפט ואיז הייטי ה- השפט ואו הייטי ה-
htegration loyers FDL année pleine et transfert Cap 18
** Germany