Mercialys — Earnings Release 2015

Apr 16, 2015

PRESS RELEASE

Paris, April 16, 2015

2015 first-quarter activity

Robust organic growth of +2.6% in invoiced rents excluding indexation

Positive trends for retailers' sales and footfall levels, reflecting the appeal of Mercialys centers

Rental revenues up +6.7% at end-March

Eric Le Gentil, Chairman and CEO of Mercialys, commented: "Mercialys offers retailers sites that are modern, constantly being adapted, market leaders in their areas or located in dynamic cities, in terms of both demographics and purchasing power. These strong underlyings are reflected in an acceleration in footfall growth for Mercialys' shopping centers and retailers' sales, which once again came in significantly higher than national comparables.

During the first quarter of 2015, Mercialys also benefited from the positive impacts of the investments made in 2014. At the end of March 2015, organic growth in invoiced rents represented +2.6% excluding the impact of indexation, in line with the objective for full-year growth of over +2%".

I. Change in rental revenues

At end-March 2015, organic growth in invoiced rents is in line with the full-year objective for growth of over +2% excluding indexation

Mercialys achieved good operational performances during the first quarter of 2015, reflected in a +2.5% increase in invoiced rents like-for-like, with +2.6% excluding the impact of a slightly negative level of indexation.

Rental revenues came to Euro 39.6 million at March 31, 2015, up +6.7% from the end of March 2014.

In thousands of euros	Cumulative to end-March 2014	Cumulative to end-March 2015	Change (%)	Like-for-like change (%)
Invoiced rents	36,031	38,713	+7.4%	+2.5%
Lease rights	1,073	880
Rental revenues	37,104	39,593	+6.7%

The change in invoiced rents primarily reflects the following factors:

• Continued robust organic growth in invoiced rents: +2.5 points,
• Acquisitions in 2014: +17.4 points,
• Impact of assets sold in 2014: -11.3 points,
• Other effects, primarily including strategic vacancies on current redevelopment programs: -1.1 point.

Like-for-like, invoiced rents are up +2.5%, including:

+1.8% for actions carried out on the portfolio, particularly renewals and relettings,

+0.8% for the development of the Casual Leasing business, in line with expectations for the full year, taking into account the seasonality effect,

-0.06% for indexation.

Lease rights and despecialization indemnities received over the period¹ came to Euro 0.1 million, compared with Euro 0.3 million for the first quarter of 2014. After factoring in the deferrals required under IFRS, lease rights for the first quarter of 2015 totaled Euro 0.9 million, compared with Euro 1.1 million at end-March 2014.

II. Good performances by Mercialys centers compared with the benchmark and dynamic commercial strategy

Mercialys' shopping centers have continued to outperform the sector in France in terms of both footfall and retailer sales growth.

• 12 months rolling, the sales figures for retailers in Mercialys shopping centers² were up +1.4% at end-February 2015, while the CNCC shopping center market index was down -0.8%.
• Following +1.4% growth in 2014, footfall in Mercialys' shopping centers showed a further +1.6% increase at the end of February 2015 12 months rolling, compared with a -0.2% decline for the market overall based on the CNCC shopping center index for this period. However, the sector in France benefited from a slight improvement in its trends, as footfall dropped -0.7% over the full year in 2014.

Alongside this, Mercialys has successfully continued moving forward with its dynamic letting strategy, with retailers benefiting from sites in its portfolio located in dynamic cities with additional potential for commercial growth, as well as modern assets that can be tailored to different brand concepts.

• In this way, various new retailers joined Mercialys' shopping centers for the first time, including Meubles Gautier, Quick Burger Bar, Lucien & La Cocotte, Pascal Coste, Lolë, MS Mode, Flormar and Star Game.
• In addition, various retailers signed up for their first presence in France with Mercialys (e.g. Cuple in the Saint-Didier mall in Paris) or a new concept in France (e.g. McDo Original in Brest).

¹ Lease rights received as cash before the impact of deferrals required under IFRS (deferring of lease rights over the firm period of leases).

²Mercialys' large centers and main leading neighbourhood centers on a like-for-like GLA basis

III.Payout of Euro 0.88 per share on May 11, 2015

On February 11, 2015, Mercialys' Board of Directors proposed, subject to approval by the general shareholders' meeting on May 5, 2015, to set the dividend for 2014 at Euro 1.24 per share (including the interim dividend of Euro 0.36 per share already paid in October 2014).

This represents a yield of 6.6% in relation to Mercialys' triple net asset value (EPRA format) at the end of 2014 (Euro 18.85 per share).

After deducting the interim dividend already paid out, the balance on this dividend represents Euro 0.88 per share. It will be paid in full in cash on May 11, 2015.

The ex-dividend date is May 7, 2015.

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The press release is available on www.mercialys.com

Analysts / investors: Press contact: Elizabeth Blaise Communications Tel: + 33(0)1 53 65 64 44 Tel: + 33(0)1 53 65 24 78

About Mercialys

Mercialys is one of France's leading real estate companies, focused exclusively on retail property. At December 31, 2014, Mercialys had a portfolio of 2,218 leases, representing a rental value of Euro 151.6 million on an annualized basis.

At December 31, 2014, it owned properties with an estimated value of Euro 2.9 billion (including transfer taxes). Mercialys has had "SIIC" real estate investment trust (REIT) tax status since November 1, 2005 and has been listed on Euronext Paris Compartment A (ticker: MERY) since its initial public offering on October 12, 2005. At December 31, 2014, there were 92,049,169 shares outstanding.

IMPORTANT INFORMATION

This press release contains certain forward-looking statements about future events, trends, projects or targets. These forward-looking statements are subject to identified and unidentified risks and uncertainties that could cause actual results to differ materially from the results anticipated in the forward-looking statements. Please refer to the Mercialys shelf registration document available at www.mercialys.com for the year to December 31, 2014 for more details regarding certain factors, risks and uncertainties that could affect Mercialys' business.

Mercialys makes no undertaking in any form to publish updates or adjustments to these forward-looking statements, nor to report new information, new future events or any other circumstances that might cause these statements to be revised.

MERCIALYS RENTAL REVENUES (pro forma³

)

Adjusted data 31/03/2011 30/06/2011 30/09/2011 31/12/2011 Q1 Q2 Q3 Q4 36,817 75,284 113,240 152,670 36,887 38,467 37,956 39,429 Invoiced rents 1,581 3,515 5,229 7,508 1,581 1,934 1,714 2,279 Lease rights 38,398 78,799 118,470 160,177 38,468 40,401 39,671 41,708 Rental revenues Adjusted data 31/03/2012 30/06/2012 30/09/2012 31/12/2012 Q1 Q2 Q3 Q4 38,378 76,554 114,100 151,866 38,378 38,176 37,546 37,766 Invoiced rents 1,860 3,793 5,793 7,816 1,860 1,932 2,001 2,022 Lease rights 40,238 80,347 119,894 159,682 40,238 40,109 39,547 39,788 Rental revenues 4.2% 1.7% 0.8% -0.5% 4.0% -0.8% -1.1% -4.2% Change in invoiced rents 4.8% 2.0% 1.2% -0.3% 4.6% -0.7% -0.3% -4.6% Change in rental revenues Adjusted data 31/03/2013 30/06/2013 30/09/2013 31/12/2013 Q1 Q2 Q3 Q4 37,764 73,187 107,937 142,951 37,764 35,423 34,750 35,013 Invoiced rents		YEAR TO DATE			PER QUARTER
	Lease rights	1,778	3,493	4,778	6,008	1,778	1,714	1,285	1,230
39,543 76,680 112,715 148,959 39,543 37,137 36,035 36,244 Rental revenues
-1.6% -4.4% -5.4% -5.9% -1.6% -7.2% -7.4% -7.3%
Change in invoiced rents -1.7% -4.6% -6.0% -6.7% -1.7% -7.4% -8.9% -8.9%
Change in rental revenues
31/03/2014 30/06/2014 30/09/2014 31/12/2014 Q1 Q2 Q3 Q4
36,031 76,005 111,469 148,755 36,031 39,975 35,464 37,286 Invoiced rents
1,073 2,125 2,991 4,031 1,073 1,053 866 1,040 Lease rights
37,104 78,131 114,460 152,787 37,104 41,027 36,329 38,236 Rental revenues
-4.6% 3.9% 3.3% 4.1% -4.6% 12.8% 2.1% 6.5% Change in invoiced rents
-6.2% 1.9% 1.5% 2.6% -6.2% 10.5% 0.8% 5.7% Change in rental revenues
31/03/2015 30/06/2015 30/09/2015 31/12/2015 Q1 Q2 Q3 Q4
38,713 38,713 Invoiced rents
880 880 Lease rights
39,593 39,593 Rental revenues
7.4% 7.4% Change in invoiced rents
6.7% 6.7% Change in rental revenues

³ Mercialys opted for the early application of IFRS 11 at December 31, 2013. The subsidiaries that were previously proportionately consolidated have been consolidated under the equity method since December 31, 2013. As a result, rental revenues for SCI Geispolsheim, proportionately consolidated for 2011, 2012 and the first quarter of 2013, have been restated for 2011, 2012 and 2013.