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Montea N.V.

Interim / Quarterly Report Aug 18, 2016

3978_ir_2016-08-18_c69adb76-0703-42ed-a6ae-b3b2c18c072c.pdf

Interim / Quarterly Report

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REGULATED INFORMATION UNDER EMBARGO UNTIL 18/08/2016 – 08:45 AM

HALF-YEARLY FINANCIAL REPORT FROM 01/01/2016 TO 30/06/2016

  • NET CURRENT RESULT OF € 13.7 MILLION (€ 1.38 PER SHARE) COMPARED TO € 9,4 MILLION (€ 1.02 PER SHARE) IN Q2 2015
  • € 11.9 MILLION ON RECURRENT BASIS (GROWTH OF 27% COMPARED WITH Q2 2015)
  • € 1.80 MILLION ONCE-OFF SEVERANCE, ALREADY RECEIVED IN Q1 2016
  • INCREASE OF THE FAIR VALUE OF THE PROPERTY PORTFOLIO BY 12% TO € 579 MILLION COMPARED TO € 517 MILLION AT THE END OF 2015
  • INCREASE OF THE NET RENTAL RESULT BY 29% TO € 20.9 MILLION COMPARED TO € 16,2 MILLION INQ2 2015
  • OPERATING MARGIN AMOUNTS TO 89.4% COMPARED TO 82.3% IN THE SAME PERIOD THE PREVIOUS YEAR
  • OCCUPANCY RATE OF 97.0% COMPARED TO 96.8% IN Q1 2016
  • DEBT RATIO OF 56.22% COMPARED TO 54.8% INQ1 2016
  • AVERAGE TERM OF LEASES ON FIRST EXPIRY DATE OF 7 YEARS
  • OUTLOOK 2016
  • PROPERTY PORTFOLIO WILL GROW TO € 600 MILLION
  • OCCUPANCY RATE WILL REMAIN AT LEAST 95%- TERM OF LEASE CONTRACTS AMOUNTS TO MORE THAN 7 YEARS ON AVERAGE
  • OPERATING MARGIN OF 88% ON ANNUAL BASIS
  • NET CURRENT RESULT PER SHARE WILL GROW BY 5% (FROM € 2.29 PER SHARE IN 2015 TO € 2.40 PER SHARE IN 2016)

Summary

  • Montea's net current result was € 13.71 million (€1.38 per share), i.e. 45% growth compared to the net current result for Q2 2015. This strong growth is explained by:
    1. the € 2.5 million increase in the recurrent result (up 26.6% compared to Q2 2015)
    1. the once-off income of € 1.80 million as a result of the termination of the contract with Neovia Logistics in Q1 2016.
  • The fair value of the property portfolio rose by 12% from € 516.7 million at the end of 2015 to € 578.7 million1 on 30 June 2016, of which € 283.9 million in Belgium, € 135.6 million in France and € 159.2 million in the Netherlands.

The fair value growth in Belgium (14.42% or € 36 million) is due mainly to the delivery of 3 build-to-suit projects in the first half of 2016 (CdS in Vorst, Moviante in Erembodegem and DSV Solutions in Ghent), the acquisition of the site in Willebroek – Park De Hulst (leased to Federal Mogul) and the acquisition of 46,000 m² of land for the development of a build-to-suit project in Bornem.

The fair value in the Netherlands rose by 18.88% (€ 25 million) compared to Q4 2015. This is due to the acquisition of the site in Eindhoven, De Keten (leased to Jan De Rijk) in the first quarter 2016, for one. Secondly, Montea developed the largest European bakery for Bakkersland in Aalsmeer.

  • The occupancy rate2 remains stable at a stable high level of 97% compared to 96.8% at the end of March 2016, inclusive of the severance compensation which was received in 2016 in connection with the discontinuance of the Neovia Logistics lease. If this is not taken into account, the occupancy rate amounts to 94.4% and the ambition is to maintain the occupancy rate above 95% at year's end.
  • The average term of the leases until notice can first be given is 7 years compared to 7.1 years at the end of Q1 2016.
  • The operating margin is 89.4% compared to 82.3% for the same period last year. This increase is a result of increased rental income (€ 2.83 million), the one off severance compensation of Neovia (€ 1.80 million) and a drop of the property costs and overheads due to a shift of the property taxes in 2015. In addition, the financial charges increased due to a rise in loan capital and the additional hedging.
  • The debt ratio amounted to 56.22% at 30/06/2016 compared with 54.8% on 31/03/2016.

Taking account of the results of the first half of 2016 Montea has the following prospects for this year:

  • Property portfolio will grow to over € 600 million.
  • Occupancy rate will stay over 95%, and the average term of leases until the first possible notice over 7 years.
  • Operating margin on an annual basis will maintained above 88%.
  • Growth of the net current result per share of 5 %, from € 2.29 per share in 2015 to € 2.40 per share in 2016.

1 The fair value consists of the Property investments exclusive of those for own use, the Other tangible fixed assets, exclusive of own use and the Assets intended for sale.

2 This occupancy rate is calculated according to the occupied floor space with respect to the total floor space. No account of the floor space is taken in the numerator and denominator.

Table of contents

1. Management report

  • 1.1. Key figures
  • 1.2. Significant events and transactions during the first half of 2016 in Belgium, the Netherlands and France
  • 1.3. Value and composition of the property portfolio at 30/06/2016
  • 1.4. Summary of the abbreviated financial statements for the first half of the year ending 30/06/2016
  • 1.5. Stock market performance of Montea shares
  • 1.6. Important events occurring after 30/06/2016
  • 1.7. Transactions with related parties
  • 1.8. Principal risks and uncertainties
  • 1.9. Outlook
  • 1.10. Corporate responsibility and sustainable enterprise
  • 1.11. Declaration relating to compliance regarding certain convenants in relation to the bond issues
  • 2. Forward looking statements
  • 3. Statement in compliance with article 13 of the Royal decree of 14th November 2007
  • 4. Financial calendar

Annexes

    1. Consolidated summary of the profit-and-loss account at 30/06/2016
    1. Consolidated summary of the balance sheet at 30/06/2016
    1. Consolidated summary of changes to equity capital
    1. Summary of the consolidated overall result
    1. Summary of the consolidated cashflow statement
    1. Hierarchy fair value
    1. Consolidated summary of the profit-and-loss account at 30/06/2016 by geographic region
    1. Consolidated summary of the balance sheet at 30/06/2016 by geographic region
    1. Report from the independent property expert at 30/06/2016
    1. Summary of the property portfolio at 30/06/2016
    1. Report from the Auditor

1. Management report

1.1 Key figures

1.1
Key figures
B
E
FR NL 30/06/2016 31/12/2015 30/06/2015
6 months 12 months 6 months
Real estate portfolio
Real estate portfolio - Buildings
Number of sites 24 16 9 49 45 44
Surface of the real estate portfolio
Logistics and semi-industrial warehouses M
²
407.476 216.837 158.580 782.893 682.503 681.661
Offices M
²
37.231 16.008 16.106 69.345 66.506 65.242
Total surface 444.707 232.845 174.686 852.238 749.009 746.903
Development potential M
²
136.385 75.904 18.055 230.344 119.569 180.955
Value of the real estate portfolio
Fair value (1) K€ 273.723 135.617 140.200 549.540 480.721 452.719
Investment value (2) K€ 280.449 145.215 150.014 575.678 503.980 474.303
Occupancy rate
Occupancy rate (3) % 95,9% 96,8% 100,0% 97,0% 96,0% 95,8%
Real estate portfolio - Solar panels
Fair value (1) K€ 10.210 0 0 10.210 10.369 8.278
Real estate portfolio - Solar panels
Fair value (1) K€ 0 0 18.969 18.969 25.640 4.694
Consolidated results
Net current result
Net rental result K€ 20.871 34.290 16.239
Operating result before the porfolio result (4) K€ 18.661 29.437 13.370
Operating margin (5) % 89,41% 85,85% 82,33%
Financial result (excl. IAS 39) (6) K€ -4.833 -8.016 -3.731
Net current result (7) K€ 13.711 21.097 9.436
Number of shares entitled to the result of the period 9.951.884 9.211.701 9.211.701
Net current result / share 1,38 2,29 1,02
Non-current result
Result on the real estate portfolio (8) K€ 2.318 2.475 -1.598
Result on financial derivatives (9) K€ -6.087 438 2.996
Net result K€ 9.942 24.010 10.834
Number of shares entitled to the result of the period
Net result / share
9.951.884
1,00
9.211.701
2,61
9.211.701
1,18
Consolidated balance sheet
Equity (excl. minority participations) K€ 225.629 208.157 194.221
Debts and liabilities for calculation of debt ratio K€ 342.570 306.564 270.555
Balance sheet total K€ 609.297 549.685 497.247
Debt ratio (10) % 56,2% 55,77% 54,41%
Net asset value / share (11) 22,67 22,60 21,08
Net asset value / share (excl. IAS 39) (11) 25,71 25,22 23,43
Share price (12) 44,40 39,20 34,14
Premium / (discount) % 72,7% 55,42% 45,70%

(1) Accounting value according to the IAS / IFRS rules, exclusive of real estate intended for own use. The fair value of the developed projects is booked under Belgium. Here, it is moved to the Netherlands, since it pertains to a project in that country, Bakkersland.

(2) Portfolio value without deduction of the transaction costs.

(3) Occupancy rate, based on the floor space. When calculating the occupancy rate, no account was taken in the numerator or the denominator of floor space intended for redevelopment, or of the land bank.

(4) Operating result before the result on the property portfolio.

(5) Operating result before the result on the property portfolio, divided by the net rental result.

(6) Concerns the financial result without the result on the financial instruments. (7) Net result without taking into account the result on the portfolio (codes XVI, XVII, XVIII, and XIX of the income statement) and without taking into account of the variation of the valuation of the hedging instruments (code XXIII of the income statement).

(8) Negative and/or positive variations in the fair value of the property portfolio + any loss or gain from the realisation of the property. (9) Negative and/or positive variations in the fair value of the interest hedging instruments according to IAS 39.

(10) Debt ratio according to the Royal Decree of 13 July 2014 concerning regulated property companies.

(11) Calculated on the basis of the total number of shares on 30 June 2016. Calculation as follows:

Equity capital attributable to the shareholders / total number of shares at the end of the financial year.

(12) Share price at the end of the period.

1.2 Significant events and transactions during the first half of 2016 in Belgium, the Netherlands and France

1.2.1 Net current result3 was € 13.71 million (€ 1.38 per share), i.e. 45.2% up from the same period last year

The net current result amounted to € 13.71 million (€1.38 per share) during the first half of 2016, up 45.2% or € 4.27 million compared to € 9.44 million during the same period last year (€ 1.02 per share).

This growth of € 4.27 million is largely due to:

  • The increase of the operational result before the result on the portfolio of € 5.3 million, owing to:
    1. The once-off income of € 1.80 million received in Q1 2016 as a result of the termination of the contract with Neovia Logistics.
    1. The increase of the net rent result, exclusive of the Neovia severance compensation, of € 2.83 million (from € 16.24 million in Q2 to € 19.07 million in Q2 2016). This new rent income is a direct consequence of the investment in and the delivery of Build-to-Suit projects in the previous financial year and the new investments in and delivery of projects in the first half of 2016.
    1. The recovery of rental charges and "other income related to rent" has a positive impact of € 0.23 million. This is chiefly due to an increase in the occupancy rate and the extra solar panels in Ghent since the second half of 2015.
    1. A drop in the property costs and general costs of the company of € 0.43 million due to a drop in marketing and communication, human resources and legal expenses.
  • Partly offset by a rise in the net negative financial result4 of € 1.10 million due to an increase in the average financial tax burden5 of € 62.7 million for investments, particularly in Vorst (rented to CdS) and Erembodegem (rented to Movianto). The purchases in Eindhoven (rented to Jan De Rijk) and Bornem were financed with loan capital. The average financial debt burden rose 24.2%, while the net negative financial result rose by 29.6%. As a result, the average financial cost rose to 3.00% for the first semester (compared to 2.88% in the first half of the previous year). The financial cost calculated on the total financial debt burden exclusive of the negative value of the hedging instruments amounted to 2.92% on 30 June 2016.
  • The drop in taxes of € 0.08 million.

3 Net result excluding the result on the property portfolio (codes XVI, XVII, XVIII and XIX of the profit-and-loss account) and excluding the variation in the fair value of the rate hedging instruments (code XXIII of the profit-and-loss account).

4 Financial result exclusive of variations in the fair value of the financial assets and liabilities (code XXIII).

5 The average financial burden is determined by the average of all financial debts of Montea, inclusive of credit lines, the debenture loans and leasing payables. No account is taken of the negative value of the hedging instruments in the average financial burden. The average cost is the complete financial cash cost (without taking variations in the hedging instruments into account) compared to said average financial debt.

1.2.2 Investment activity during the first half of 2016

18/02/2016 – Acquisition of a 17,135 m² logistics building in Eindhoven (NL)

Montea has completed the acquisition of a distribution on land of 36,200 m² at Eindhoven - Acht. The building comprises 16,700 m² of warehouse space and 435 m² of offices. Given its good location and the flexible layout of the building in 4 units, this distribution centre is extremely well suited for other tight-knit distribution and e-commerce purposes.

The building is leased with a triple net lease for a fixed term of 15 years. This transaction represents an investment of approximately € 18 million at a net initial yield of 6.6% and is in line with the valuation of the property assessor.

18/02/2016 - Acquisition of 46,000 m² of land for the development of a build-to-suit project in Bornem (BE)

Montea has acquired approximately 4.6 hectares of land from Beherman Invest NV (part of the Beherman Group) in Bornem. The site is strategically located in the "golden triangle" of Brussels/Antwerp/Ghent, in the immediate vicinity of the A12/E17 motorways. The existing building will be demolished and the site will be totally redeveloped. Montea has already begun marketing the land for the development of a build-to-suit

logistics building of +/- 26,000 m². The acquisition was financed with bank debt. This transaction represents an investment value of € 4.6 million.

Montea "Space for Growth" – Bornem site – Build-to-suit (BE)

18/02/2016 – Handover of build-to-suit building for Movianto in Erembodegem (BE)6

In June 2015 Montea began the development of a distribution centre for Movianto at Industriezone Zuid IV in Erembodegem. The state-of-the-art logistics distribution centre of 15,900 m², featuring two GDP-compliant

(2,900 m²) cross-docking spaces (+2+8°C and +15°C+25°C) and attached offices, was handed over on schedule in January 2016. The building is leased for a fixed term of 9 year, with the initial rent approximately € 1 million per year. This acquisition was financed with bank debt. The transaction represents an investment value of € 14 million.

Montea «Space for Growth» - Site Erembodegem, Waterkeringsstraat (BE)

6 For more information, please see our press release of 26/06/2015 or visit www.montea.com.

18/02/2016 – Handover of build-to-suit building for CdS in Vorst (BE)7

As part of the redevelopment plan for the site in Vorst, Montea began the development of a second sustainable build-to-suit project for CdS in Vorst in April 2015. The 10,500 m² distribution centre is leased for a fixed term of 15 years, with the initial rent approximately € 0.5 million per year. This acquisition was financed with bank debt. The transaction represents an investment value of € 6.8 million.

Montea "Space for Growth" - Vorst site - CdS (BE)

23/03/2016 – Handover of build-to-suit building for Federal Mogul at MG Park De Hulst in Willebroek8

This logistics complex was developed by MG Real Estate on land of approximately 48,000 m². The building comprises 27,100 m² of warehouse space, 800 m² of office space and a mezzanine area of approximately

Montea "Space for Growth" - Federal Mogul site at Park De Hulst

1,100 m². The building can be extended by 6,800 m² in a second phase. It is owned by Nyssa NV and Robinia One NV.

The parties have signed a long-term lease for a fixed term of 10 years. This acquisition was conducted through the contribution of 100% of the shares in the two companies mentioned above. The contribution in kind was for a mixed payment, namely in cash (14%) and new shares (86%). The transaction represents an investment value of € 20.4 million.

7 For more information, please see our press release of 03/04/2015 or visit www.montea.com.

8 For more information, please see our press release of 17/09/2015 or visit www.montea.com.

28 June 2016 - Delivery of 21,000 m² for DSV Solutions in Ghent (BE) – Building floor space now totals 45,500 m²9

In 2013 Montea acquired a new logistics platform for DSV Solutions, specialised in the handling and preparation of goods for specific customers for national, European and worldwide distribution. This site is strategically located along the Ghent-Terneuzen canal area, in the immediate vicinity of the R4, and provides a connection to important motorways (E34, E17 and E40).

The current 24,500 m² distribution centre has now been expanded by an additional 21,000 m² and comprises an investment value of approximately € 21 million.

"We are convinced of the growing importance of water-related logistics for our economy," said Jo De Wolf, Montea CEO. "We therefore believe that this expansion means absolute added value for our portfolio."

1.2.3 Development activity during the first half of 2016

18/02/2016 - Montea develops innovative logistics zone at Blue Gate, Antwerp

The City of Antwerp, ParticipatieMaatschappij Vlaanderen (PMV) and Waterwegen en Zeekanaal (W&Z) have selected Blue O'pen as their partner for the decontamination and redevelopment of Petroleum Zuid in Antwerp (approx. 63 hectares). Blue O'pen is a consortium between DEME and Bopro. For the development of and investment in the logistics zone of approx. 6.5 hectares within Blue Gate, the consortium opted to work exclusively with Montea.

Peter Demuynck, CCO Montea: We are always looking for innovative solutions for the logistics sector. Starting

in the second half of 2017 we will be developing this unique location on the edge of the city and by the water to create a CO2-neutral logistics park, with particular focus on innovative logistics trends and urban distribution. When completed, the total development will represent an estimated investment value of € 26 million.

Montea "Space for Growth" – Artist's Impression Blue Gate, Antwerp

9 For more information, please see our press release of 28/06/2016 or www.montea.com.

10 June 2016 - Montea develops a new sustainable logistics project for Carglass on multimodal site in Bilzen (BE)10

Montea and Carglass Distribution have signed a partnership agreement for the development and the lease of a new sustainable logistics build-to-suit project of 50,000 m² in Bilzen.

Carglass Distribution, the division responsible for the distribution of all windscreens and accessories in Belgium and 8 Western-European countries, will centralize its activities, currently spread across 4 sites in Belgium, as of 2018 on a new site in Bilzen, at the industrial site Bilzen-Noord. The new site benefits from an ideal geographical localisation, at the centre of Europe.

This decision should enable more efficient activities, better and faster service to customers and a further activity development in the future. International real estate investor Montea will develop and finance the entire project with a potential of over 50,000m².

Montea «Space for Growth» - Artist Impression site Carglass, Bilzen (BE)

For over 20 years Carglass Distribution is active in Belgium, the last couple of years at 4 different locations in Hasselt and Genk. Currently, 1.2M windscreens and 1.7M accessories are, on an annual basis, delivered from these locations to all Belgan Carglass Service Centers, but also to all subsidiaries in Germany, the Netherlands, Luxembourg, Denmark, Switzerland, Norway, Sweden and Greece.

These logistics and distribution activities are crucial to the entire company strategy. An efficient, fast and performing delivery of windscreens is the basis for a unique client service model, representing the Carglass brand. Montea will develop and finance the entire project of 50,000 m². The total development will represent an estimated investment value of € 25 million.

14 June 2016 – MONTEA and Built to Build Planontwikkeling (BTB) develop a new building for NSK EUROPEAN DISTRIBUTION CENTRE in Tilburg – Vossenberg (NL) 11

Montea and Built to Build signed a lease agreement with NSK European Distribution Centre. The partners will develop a new build-to-suit distribution centre comprising approximately 17,300 m² of warehousing, 1,900 m² of offices and mezzanine of 1,900 m² at the Vossenberg West logistics zone in Tilburg

10 For more information, please see our press release of 10/06/2016 or www.montea.com.

11 For more information, please see our press release of 14/06/2016 or www.montea.com.

Montea «Space for Growth» - Artist Impression site NSK European Distribution Centre, Tilburg (NL)

NSK is one of the world's leading producers of bearings, linear bearings and guidance systems. For the past 15 years NSK has been operating at the Kraaiven industrial zone in Tilburg. In view of the steady growth in the company's business, it was decided to search for a larger location within the logistics hotspot of Tilburg. The new EDC will be constructed in conjunction with Montea and Built to Build (BTB) at Industrieterrein Vossenberg. On handover, NSK will lease the building for a minimum period of 10 years.

BTB will again be working with Bouwbedrijf Van der Heijden on this project. On handover of the building, Montea will acquire the development, subject to the usual conditional terms, for an estimate investment value of € 15.4 million, representing an initial yield of 6.50%.

Construction works will begin once the environmental permit has been issued and the new build-to-suit project is expected to be operational by the third quarter of 2017.

28 juni 2016 - Custom development of a ca. 12,400 m² logistics building for Edialux (Pelsis Group) in Bornem (BE) 12

Headquartered in the UK, the Pelsis Group is the leader in ecological solutions for crop protection and pest control in Europe. The group employs some 270 workers in 10 sites worldwide.

In Belgium, Pelsis operates under the name of Edialux, which is also a market leading brand in the Belgian retail sector. Pelsis was in search of a state-of-the-art distribution centre in order to provide even better logistical service to its customers at home and abroad. Montea will undertake a build-to-suit project for that purpose in exchange for a 15-year lease contract. The contract will comprise ca. 11,400 m² operational space and 960 m² offices and will employ ca. 70 people.

The construction works for this project are expected to commence in the course of 2018. The investment will amount to ca. € 11 million and represent a yield of 6.65%. Edialux was guided and supported by Ceusters Immobiliën in this transaction.

12 For more information, please see our press release of 28/06/2016 or www.montea.com.

Montea «Space for Growth» - nieuw logistiek gebouw voor Edialux (Groep Pelsis) te Bornem (BE)

28 June 2016 - Development of new state-of-the-art air cargo building (ca. 5,000 m²) for SACO Groupair at Brucargo (BE) 13

SACO Groupair, a well-known neutral forwarder headquartered in Hamburg and active for years at Brucargo (www.sacogroupair.com), has signed a cooperation agreement with Montea for the construction and rental of a new state-of-the-art air cargo building plus offices at Brucargo. This development will be implemented in cooperation with the Cordeel group.

The complex will consist of ca 4,200 m² storage space and ca. 800 m² office space. The site will employ some 35 people in all and enable the group to register accelerated growth.

SACO Groupair has signed a rental agreement for a fixed term of nine years. Montea will acquire this property in Q2 2017 on the basis of an initial yield of ca.7.8%, i.e. an investment value of € 3.6 million.

Montea «Space for Growth» - Nieuw luchtvrachtgebouw voor SACO Groupair - Brucargo (BE)

13 For more information, please see our press release of 28/06/2016 or www.montea.com.

1.2.4 Lease activity during the first half of 2016

The following new lease agreements were signed in the first half of 2016.

18/02/2016 – Signing of two new lease agreements (BE)

The site in Bornem (Industrielaan 2-24), which has a total area of 14,343 m², is now fully leased. Montea and the Regie der Gebouwen have signed a lease agreement for a term of 9 years. The lease is for 8,760 m² of warehouse space, 590 m² of office space and 37 parking spaces. The Regie der Gebouwen will use the site as a warehouse facility for goods seized. This transaction was brokered by Ceusters NV.

Montea «Space for Growth» - Site Bornem (BE)

The remaining available space of 1,206 m² is leased to Beherman Motors NV (part of the Beherman Group) for a term of 9 years with a first break option after 3 years. Beherman Group (www.behermangroup.com) is the official importer of Mitsubishi for Belgium and Luxembourg and will use the site as workshop and storage space.

These two transactions together represent an annual rental income of approximately € 0.45 million.

04/03/2016 – Long-term lease agreement signed with Roltex Belgium in Erembodegem (BE)

Montea and Roltex Belgium have signed a long-term lease agreement for a fixed term of 9 years at the site in Erembodegem. The lease includes 1,454 m² of warehouse space, 403 m² of office space and 201 m² of mezzanine.

Roltex Belgium already has a location in Erembodegem and was looking for additional space in the same region. Roltex is a producer of trays and other plastic catering/hospitality equipment for professional catering (www.roltex.be).

Montea "Space for Growth" - Erembodegem Site - Unit 8 (BE)

31st March 2016 – Signing of a lease agreement and a purchase-and-sell option with Kemin Europe NV in Herentals (BE)

Montea has leased the Herentals site at 33 Toekomstlaan to Kemin Europe NV. The parties also have a mutual purchase-and-sell option in the second half of 2016. The site comprises land of approx. 20,253 m², 11,068 m² of warehouse space, 1,782 m² of offices and a 1,800 m² mezzanine area.

1.2.5 Further reinforcement of the financing structure

23 March 2016 – Issue of 447,231 new shares as compensation for contribution in kind14

In its press release of 17 September 2015, Montea announced a partnership agreement with MG Real Estate (De Paepe Group) to develop a logistics complex for Federal Mogul at MG Park De Hulst in Willebroek. This project is to be developed on ca. 48,000 m² of land, and will consist of 27,100 m² of storage floor space, 800 m² of office floor space and a mezzanine of 1,100 m²15. It is the property of the real estate companies Nyssa NV and Robinia One NV.

Through the contribution in kind of all (100% of) the shares of these two aforementioned companies, Montea has acquired the aforementioned land and logistics building.

The contribution in kind was carried out against mixed compensation, namely compensation in cash, and compensation in new Montea shares.

The new Montea shares were issued as a result of an increase of capital in line with the authorised capital,16 by a decision of the Statutory Manager of Montea on 23 March 2016. The transaction led to a reinforcement of the equity capital of €16,212,123.75, of which an amount of €9,114,605 was allocated to the capital and an amount of €7,097,518.75 to issue premiums.

14 For more information, cf. the press release of 23 March 2016 or go to www.montea.com.

15 For more information, cf. the press release of 17 September 2016 or go to www.montea.com.

16 Through the contribution of all (100% of) the shares of Nyssa NV and Robinia One NV in Montea.

The contributor was compensated with 447,231 new Montea shares for a total amount of € 16,212,123.75, and also with compensation in cash of €2,600,000. The 447,231 new Montea shares were ordinary shares, and have the same rights as the existing shares. They will share in the results of the complete financial year 2016.

In this way, the portfolio grows through a healthy combination of different financial sources and the debt burden is kept under control.

10/06/2016 – Realisation of the optional dividend17

To support the further growth of Montea, the statutory manager has offered shareholders an optional dividend. 76.33% of coupon no. 15 (which represents the dividend for financial year 2015) was surrendered for new shares.

In this way, 292,952 new shares were issued on 10 June 2016, for a total issue sum of €10,419,013.65 (€5,970,386.14 in capital and €4,448,627.51 in issue premium) in line with the authorised capital.

As a result, as of 10 June 2016, the share capital of Montea is represented by 9,951,884 shares. The dividend rights that were not contributed, were paid out in cash. The net total paid out amounted to €3,231,860.

1.2.6 Other events during the first half of 2016

01 March 2016 – Appointment of Els Vervaecke as Chief Financial Officer

On 1 March 2016, Els Vervaecke was appointed as the new CFO. The change in the management board in no way alters the objectives and strategic course of Montea.

Els Vervaecke used to work at EY as senior auditor. In the beginning of 2010, she started at Pylos (property developer) as Finance Manager for the Pylos Group, and became CFO for Pylos Benelux in 2014.

17 For more information, cf. the press release of 10 June 2016 or go to www.montea.com.

1.3 Value and composition of the property portfolio on 30 June 2016

The total property assets of Montea was € 578,7 million, consisting of the valuation of the property portfolio - buildings (€ 549,5 million), the ongoing project developments (€ 19 million) and the value of the solar panels (€ 10,2 million)

Total
30/06/2016
Belgium France The Netherlands Total
31/12/2015
Total
30/06/2015
Real estate portfolio - Buildings
Number of sites 49 24 16 9 45 44
Warehouse space (m²) 782.893 407.476 216.837 158.580 682.503 681.661
Office space (m²) 69.345 37.231 16.008 16.106 66.506 65.242
Total space (m²) 852.238 444.707 232.845 174.686 749.009 746.903
Development potential (m²) 230.344 136.385 75.904 18.055 119.569 180.955
Fair value (K EUR) 549.540 273.723 135.617 140.200 480.721 452.719
Investment value (K EUR) 575.678 280.449 145.215 150.014 503.980 474.303
Annual contractual rents (K EUR) 40.942 19.862 11.113 9.967 36.448 35.422
Gross yield (%) 7,45% 7,26% 8,19% 7,11% 7,58% 7,82%
Gross yield on 100% occupancy (%) 7,95% 8,16% 8,40% 7,11% 7,82% 8,09%
Un-let property (m²) 20.983 18.438 2.546 0 26.719 29.642
Rental value of un-let property (K EUR) 2.744 2.469 276 0 1.150 1.209
Occupancy rate (% of m²) 97,0% 95,9% 96,8% 100,0% 96,00% 95,80%
Real estate portfolio - Solar panels
Fair value (K EUR) 10.210 10.210 0 0 10.369 8.278
Real estate portfolio - Developments
Fair value (K EUR) 18.969 0 0 18.969 25.640 4.694

(1) The fair value of the investment in solar panels is shown in section "D" of the fixed assets in the balance sheet.

(2) The fair value of the developments is shown in section "C" of the fixed assets in the balance sheet.

Increase in the fair value of property investments – buildings to € 549.5 million, up by €8.9 million (1.64% compared to 31 March 2016), due to:

  • Belgium: Increase of € 8.8 million, consisting mainly of:
  • o The delivery of the extension project in Ghent on 28 June 2016, rented to DSV (phase 2);
  • France: Increase of € 0.6 million, consisting mainly of:
  • o The rental of the partially unoccupied site in Le Mesnil Amelot to SAS Autoclick since June 2016, which had a positive impact on the valuation;
  • The Netherlands: Decrease of € 0.5 million, caused mainly by:
  • o A correction of the valuation of the Oss site, rented to Vos Logistics.
  • On the basis of the valuation by the independent property assessor, the fair value of the property portfolio at constant composition (without taking into account the new investments and divestments as described above), increased by 0.19% (€ 1.04 million) in the first half of 2016, mainly as a result of the decreasing return on investments from new rentals.

  • The total floor space of the property investments in buildings amounted to 852,238 m², spread over 24 sites in Belgium, 16 sites in France and 9 sites in the Netherlands. The increase of 3% (compared to 827,168 m² on 31 March 2016), is primarily attributable to the delivery of the extension project in Ghent for DSV phase II.

  • Montea also has a total land bank of 230,344 m² in development potential on existing sites.
  • The gross property yield on the total of the property investments in buildings amounted to 7.95% on the basis of the complete leased portfolio, compared to 7.7% on 31 March 2016.
  • The contractual annual rental income (exclusive of rent guarantees) amounted to €40.9 million, an increase of 1% compared to €40.6 million on 31 March 2016, attributable primarily to the extra rental to DSV in Ghent (phase II).
  • The occupancy rate18 amounts to 97%, inclusive of the severance compensation received in 2016 for the discontinuance of the Neovia Logistics lease. If this is not taken into account, the occupancy rate amounts to 94.4% and the aspiration to keep the occupancy rate above the 95% at year's end remains. The lack of occupancy is primarily at the Milmort site (10,088 m²) in Belgium, and at Savingy-le-Temple (7,446 m²) in France.
  • Ongoing development projects worth € 19 million
  • Montea has ongoing development projects worth € 19 million, consisting of the development for Bakkersland in Aalsmeer (Netherlands) where Europe's biggest bakery is built.
  • Fair value of the solar panels of € 10.2 million

Montea has 8 solar panel projects: 1 in Brussels (Vorst), 2 in Wallonia (Heppignies and Milmort) and 5 in Flanders (Bornem, Herentals, Grimbergen, Ghent and Puurs).

18 This occupancy rate is calculated according to the occupied floor space with respect to the total floor space. No account is taken of projects in (re)development in the numerator or the denominator.

  • 1.4 Summary of the abbreviated consolidated financial statements for the first half of the year ending 30/06/2016 19
  • 1.4.1 Summary of the condensed consolidated income statement (analytical) for the first half ending 30/06/2016
ABBREVIATED CONSOLIDATED
PROFIT & LOSS ACCOUNT (K EUR)
Analytical
30/06/2016
3 months
31/12/2015
12 months
30/06/2015
6 months
CURRENT RESULT
NET RENTAL RESULT 20.871 34.290 16.239
PROPERTY RESULT 21.008 34.864 16.145
% compared to net rental result 100,7% 101,7% 99,4%
TOTAL PROPERTY CHARGES -459 -1.332 -554
PROPERTY OPERATING RESULT 20.549 33.532 15.590
General corporate expenses -1.881 -4.037 -2.197
Other operating income and expenses -6 -58 -23
OPERATING RESULT BEFORE THE PORTFOLIO RESULT 18.661 29.437 13.370
% compared to net rental result 89,4% 85,8% 82,3%
FINANCIAL RESULT -4.833 -8.016 -3.731
PRE-TAX NET CURRENT RESULT (*) 13.828 21.421 9.639
Taxes -117 -324 -203
NET CURRENT RESULT 13.711 21.097 9.436
per share 1,38 2,29 1,02
NON-CURRENT RESULT
Result on disposals of investment properties 0 5 5
Result on disposals of other non-financial assets 0 0 0
Changes in fair value of investment properties 2.318 2.470 -1.603
Other portfolio result 0 0 0
PORTFOLIO RESULT 2.318 2.475 -1.598
Changes in fair value of financial assets and liabilities -6.087 438 2.996
RESULT IN FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES -6.087 438 2.996
NET RESULT 9.942 24.010 10.834
per share 1,00 2,61 1,18

1.4.2 Explanatory notes on the condensed consolidated income statement on 30 June 2016

The operational property result before the result on the property portfolio amounts to € 18.7 million, an increase of 39.6%

The operational property result before the result on the property portfolio amounts to € 18.7 million, an increase of € 5.3 million, or 39.6% compared to the same period the previous year.

19 The abbreviated financial statement have been the subject of a limited audit by the company auditors.

This increase is due to:

  • The once-off income of € 1.80 million received in Q1 2016 for the termination of the contract with Neovia Logistics.
  • The increase of the net rent result, exclusive of the Neovia severance compensation of € 2.83 million (from € 16.24 million in Q2 2015 to €19.07 million Q2 2016). This new rental income is a direct consequence of the investments in and the delivery of Build-to-Suit projects in the previous financial year and the new investments in and delivery of projects in the first half of 2016.
  • The recovery of rental charges and "other income related to rent" has a positive impact of € 0.23 million. This is chiefly due to an increase in the occupancy rate and the extra solar panels in Ghent since the second half of 2015.
  • A drop in the property costs and general costs of the company of € 0.43 million due to a drop in marketing and communication, human resources and legal expenses.

The operating margin20 thus amounted to 89.4% for the first half of 2016 compared to 82.3% for the same period the previous year.

The net negative financial result (exclusive of the valuation of the hedging instruments) amounted to € 4.8 million, an increase of € 1.1 million (29.5%) compared to the same period the previous year, as a result of the increased average debt burden

The net negative financial result (exclusive of the valuation of the hedging instruments) amounted to € 4.8 million, an increase of 29.5% compared to the same period the previous year, as a result of the increased average debt burden21 with € 62.7 million for investments, inter alia in Vorst (rented to CdS) and Erembodegem (rented to Movianto). The purchases in Eindhoven (rented to Jan De Rijk) and Bornem were financed with loan capital.

The average financial debt burden rose by 24.2%, while the net negative financial result rose by 29.6%. As a result, the average financial cost rose to 3.00% for the first semester (compared to 2.88% in the first half of the previous year). The financial cost calculated on the total financial debt burden exclusive of the negative value of the hedging instruments amounted to 2.92% on 30 June 2016.

20 The operational result before the result on the property portfolio compared to the net rent result.

21 The average financial debt burden is determined by the average of all financial debts of Montea, inclusive of credit lines, debenture loans and leasing payables. No account of the negative value of the hedging instruments is taken in the average financial debt burden. The average cost is the complete financial cash cost (without taking variations in the hedging instruments into account) compared to the average financial debt.

The result of the property portfolio amounts to € 3.3 million

The result of the property portfolio amounted to € 2.3 million on 30 June 2016. This positive result is attributable to the positive variation in the fair value of the property portfolio of € 2.3 million, primarily as a result of the declining return on investment on a number of sites.

The net result amounts to € 9.9 million and is determined also by the negative variation in the fair value of the hedging instruments (€ 6.1 million) and the positive variation in the fair value of the property portfolio of € 2.3 million.

The net result on 30 June 2016 amounted to € 9.9 million (€ 1 per share) compared to € 10.8 million for the same period in 2015 (€1.18 per share). The result is strongly influenced by the negative development in the fair value of the hedging instruments (€6.1 million) as a result of the dropping long-term interest rates, partially offset by the positive variation in the fair value of the property portfolio.

Neither the positive result of the property portfolio nor the negative trend in the fair value of the hedging instruments are cash elements, so they have no impact on the net current result.

Net current result of € 13.7 million (€ 1.38 per share).

The net current result on 30 June 2016 amounted to € 13.7 million, which is an increase of 45.3% compared to the same period the previous year. The net current result per share amounted to € 1.38, an increase of 34.5% compared to the same period the previous year.

1.4.3 Condensed consolidated balance sheet on 30 June 2016

CONSOLIDATED
BALANCE SHEET (EUR)
30/06/2016
Conso
31/12/2015
Conso
30/06/2015
Conso
NON-CURRENT ASSETS 572.527.481 517.685.997 466.631.357
CURRENT ASSETS 36.769.402 31.999.167 30.615.557
TOTAL ASSETS 609.296.884 549.685.164 497.246.914
SHAREHOLDERS' EQUITY 225.747.706 208.256.437 194.321.202
Shareholders' equity attributable to shareholders of the parent company 225.629.223 208.156.528 194.221.293
Minority interests 118.483 99.909 99.909
LIABILITIES 383.549.178 341.428.727 302.925.712
Non-current liabilities 350.576.176 291.353.554 270.108.606
Current liabilities 32.973.002 50.075.173 32.817.106
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 609.296.884 549.685.164 497.246.914

1.4.4 Notes to the consolidated balance sheet at 30/06/2016

On 30 June 2016, the total assets (€ 609.3 million) consisted mainly of investment property (€89% of the total), assets intended for sale (1% of the total), solar panels (2% of the total), and developments (3% of the total). The remaining assets (5% of the total) consisted of the other tangible and financial fixed assets, including assets for own use and circulating assets, comprising cash investment, trade and tax receivables. The total liabilities consisted of the equity capital of € 225.75 million and a total debt of € 383.55 million.

This total debt consists of:

  • A total amount of € 219.5 million in credit facilities with 5 Belgian financial institutions. Montea has on this day € 228.34 million in contracted credit facilities with 6 Belgian financial institutions and an unused facility of € 4.83 million. An amount of €4 million was therefore raised after the balance sheet date. All the credit facilities to be refinanced in 2016 were extended in July 2016;
  • A total amount of € 109.2 million relating to the four debenture loans that Montea took out in 2013, 2014 and 2015;
  • A total leasing debt of € 1.06 million for the further financing of the site in Milmort;
  • The negative value of the current hedging instruments of € 30.28 million;
  • Other debts and accrued charges and deferred income for an amount of € 22.71 million. The accrued charges and deferred income comprise in large measure rent for the following quarter invoiced already in advance.

Montea's debt ratio22 amounts to 56.22%. The increase of the debt ratio compared to 31 March 2016 (54.79%) is due mainly to ongoing investments (chiefly Bakkersland in Aalsmeer) which are financed by borrowing. Furthermore, in spite of the possibility of an optional dividend and of the great success of the optional dividend, the amount of withholding tax must be paid in cash, which has a negative impact on the debt ratio. The great success of the optional dividend (73% opted to have the dividend paid in shares) had a positive impact on the debt ratio.

Montea meets all the debt ratio covenants it has concluded with its financial institutions, under the terms of which its debt ratio may not exceed 60%.

Article 24 of the Royal Decree of 13 July 2014

If the consolidated debt ratio of the Regulated Property Company (RPC) and its subsidiaries exceeds 50% of the consolidated assets, minus the authorised financial hedging instruments, the RPC shall draw up a financial plan with an implementing programme, in which it shall describe the measures that have to be taken to prevent the consolidation ratio from exceeding 65%.

A special report shall be drawn up on the financial plan by the auditor, attesting that the latter has verified the way in which the plan was drawn up, particularly as regards the economic fundamentals thereof, and that the figures contained in this plan tally with those in the RPC's accounts. The financial plan and the auditor's special report shall be submitted to the FSMA for information.

The general guidelines of the financial plan shall be described in detail in the annual and semi-annual financial reports, where justification shall also be provided as to (a) how the financial plan was carried out in the course of the relevant period, and (b) how the RPC will carry out the plan in the future.

22 Calculated according to the Royal Decree of 13 July 2014 concerning regulated property companies.

Development of the debt ratio at Montea

The consolidated debt ratio amounted to 56.22% on 30 June 2016. The debt ratio has been above 50% since 2008, reaching its highest percentage of 57.62% in mid-2010. An increase of capital was carried out on 2 July 2010, as a result of which the debt ratio was brought below 50%.

The debt ratio then rose to 55.29% in September 2012. An increase of capital of € 21.1 million was carried out on 20 December 2012 to finance the project for DHL Global Forwarding at Brucargo, as a result of which the debt ratio was again reduced to 50.80% in the first quarter of 2013.

Owing to the dividend payment, the acquisition of the shares of Evenstuck NV (for the property rented to DSV Solutions) and the acquisition of the shares of Acer Parc NV (for the property developed to measure and rented to St. Jude Medical), the debt ratio rose again to 52.82% on 31 December 2013.

A capital increase was carried out in the first half of 2014 to anticipate the planned acquisitions and investments in the second half of that year. These concern redevelopments at the Grimbergen and Vorst sites, 3 build-to-suit projects in Belgium (2 at De Hulst in Willebroek and 1 at Brucargo) and 1 build-to-suit project in the Netherlands (Oss), and 2 sale-and-lease back transactions (Beunigen and Waddinxveen).

In the first half of 2015, it was decided to proceed to a contribution in kind (for the acquisition in Apeldoorn) and to an optional dividend to lower the debt ratio in mid-2015 after the acquisitions in Heerenberg (NL) and Cofriset (FR) and the finalisation of the build-to-suit project in Heerlen (NL).

The second half of 2015 saw the acquisition of the property in Tilburg (rented to the Versteijnen group), which was financed fully by borrowing. A number of build-to-suit projects were also launched (Movianto in Erembodegem, CdS in Vorst and Bakkersland in Schiphol) where the ongoing works were fully financed by borrowing. As a result of the foregoing, on 31 December 2015 the debt ratio amounted to 55.77%.

The build-to-suit projects Movianto in Erembodegem and CdS in Vorst were delivered in the first half of 2016. A new build-to-suit project, Bakkersland in Aalsmeer, has been launched. The works of these 3 projects were financed by borrowing. Furthermore, the acquisition of the project in Eindhoven (Jan de Rijk) and the acquisition of the land in Bornem (Bornem Vastgoed) were also financed by borrowing. To keep the debt ratio within the limits, in March 2016 the project in Willebroek (Federal Mogul) was acquired through a contribution in kind, and an optional dividend was realised successfully in June. The debt ratio rose to 56.22% on 30 June 2016.

The debt ratio has at no time reached alarming levels, not even in the period of financial crises which emerged as of the end of 2008.

Future investment potential

On the basis of the current debt ratio, the investment potential would amount to ca. € 152 million23 without exceeding the maximum debt ratio of 65%.

Montea has concluded covenants with certain banking institutions, under the terms of which the debt ratio may not exceed 60%. On the basis of the same calculation, the investment potential would not exceed €57 million.

The variations in the fair value of the property portfolio can also have an important impact on the debt ratio. Based on the current equity capital, the maximum admissible ratio of 65% would be exceeded only in the event of a negative variation in the fair value of property investments of more than 82%. This corresponds to a drop of 15% in the existing portfolio.

On the basis of the current statement and the valuation of the portfolio by the independent assessor, Montea sees no substantial possible negative variations in the fair value. Montea is consequently of the opinion that the current debt ratio of 56.22% provides a sufficient buffer against possible further negative variations in the existing portfolio.

Conclusion

Montea is of the opinion that the debt ratio will not exceed 65% and that no additional measures have to be taken on the basis of the planned changes in the composition of the property portfolio and the expected development of the equity capital.

The aim remains for Montea to finance itself with debt ratio of ca. 55%. Montea will see to it that its debt ratio never exceeds 60%.

A debt ratio of 55% is perfectly justifiable, given the nature of the real estate in which Montea invests, namely logistics and semi-industrial real estate with an average return of ca. 7%.

Should a situation arise where certain events require an adjustment in the strategy of the RPC, the latter will proceed thereto at once, and the shareholders will be informed accordingly through the semi-annual and annual financial reporting.

The net asset value on 30 June 2016 amounted to € 22.67 per share. If the net negative variation of the hedging instruments (IAS 39) is not taken into account, the net asset value amounts to € 25.71 per share.

On the basis of the closing price on 30 June 2016 (€ 44.4), the Montea share was 72.7% above the value of the net asset per share (excl. IAS39).

23 This calculation does not take account of the net current result of the future periods, the variations in the fair value of the property investments, nor any variations in the accrued charges and deferred income, provisions for risks and deferred taxes of the liabilities.

1.4.5 Valuation rules

  • The valuation rules of the RPC were not changed in the first half of 2016.
  • On 30 June 2016, the solar panels were valued on the basis of the revaluation model, in accordance with IAS 16 – Tangible fixed assets. After the initial recognition, the asset whose fair value can be reliably determined must be booked at the revalued amount of the asset, i.e. the fair value at the time of the revaluation, less any subsequent accumulated write-downs and subsequent accumulated special writedowns/impairment. The fair value is determined on the basis of the discounting method of future earnings.

The useful life of the solar panels is estimated at 20 years.

All IFRS and IAS standards pertaining to the preparation of this half-yearly financial report are analysed when said report is drawn up, and Montea confirms that said standards are duly taken into account in that report.

1.5 Performance of the Montea share on the stock exchange

The closing price on 30 June 2016 (€ 44.4) was 30% stronger than the closing price a year earlier (€ 34.14).

STOCK MARKET PERFORMANCE 30/06/2016 31/12/2015 30/06/2015
Share price (€)
At closing 44,40 39,20 34,14
Highest 44,81 40,00 38,50
Lowest 35,10 33,08 33,08
Average 39,66 36,75 36,88
Net asset value / share (€)
Incl. IAS 39 22,67 22,60 21,08
Excl. IAS 39 25,71 25,22 23,43
Premium / (discount) (%) 72,7% 55,4% 45,7%
Dividend return (%) 4,6% 5,2% 5,8%
Dividend (€)
Gross 2,03 2,03 1,97
Net 1,48 1,48 1,48
Volume (number of securities)
Average daily volume 10.202 4.156 5.143
Volume of the period 1.321.435 1.059.158 643.215
Number of shares 9.951.884 9.211.701 9.211.701
Market capitalisation ('000 euro)
Market capitalisation at closing 441.864 361.099 314.487
Ratios (%)
Velocity 13,3% 11,8% 8,4%

Dividend yield (%): Gross dividend divided by the average share price.

Gross Return (%): Movement in share prices since Montea was established + dividends) divided by the average share price.

"Velocity": Volume for the period divided by the number of shares.

1.6 Events after 30/06/2016

07 July 2016 - The municipality Oss and Montea conclude an agreement for the future development of a logistics plot at Vorstengrafdonk (NL)24

On Wednesday 29 June the alderman Frank den Brok has concluded with Hylcke Okkinga, director of Montea Nederland, an agreement for a plot of 5 ha at Vorstengrafdonk. At this plot, Montea – after letting - will develop a tailor-made distribution center. Montea Nederland will develop this project together with construction company van der Maazen.

Montea «Space for Growth» - Artist impression distribution centre Vorstengrafdonk - Oss (NL)

Montea Nederland and construction company Van der Maazen develop a building plan at the parcel, they check the plan with the municipality as to the desired image quality and the possibility to obtain an environmental permit. The construction plan meets the latest requirements of the logistics sector and is ready for the end-user. The building can consequently be developed in a very short period of time.

Meanwhile, the commercialization process was started. Montea and van der Maazen are granted a purchase option on the plot, they will search for users and will consequently develop a tailor-made distribution center.

18 July 2016 – Montea sells site in Herentals to Kemin Europe NV (BE)

June 30 Kemin Europe NV exercised its purchase option for an amount of € 6.1 million . The actual sale took place on July 18 2016 . The site comprises ca 20,253 m² of land, 11,068 m² of warehouses, 1,782 m² of offices and 1,800 m² of mezzanine.

1.7 Transactions between affiliated parties

There were no transactions between affiliated parties in the first half of 2016.

24 For more information, please see our press release of 07/07/2016 or www.montea.com.

1.8 Main risks an uncertainties

1.8.1. Main risks an uncertainties 25

The board of directors of Montea's statutory manager and the management are fully aware of the importance of developing and maintaining sound management and consequently preserving a quality portfolio. Montea applies clear and strict standards for (i) optimising and improving the existing buildings, (ii) the commercial management, (iii) the technical management of the buildings, and (iv) any investments in the existing buildings. The purpose of these criteria is to limit vacancies as well as to have the value of the property assets increase sustainably to the maximum.

The main risks and uncertainties for the coming financial year pertain to:

Rental risks

a) Risk description

The largest part of Montea's turnover consists of income generated from rental to third parties. Failure of tenants to pay the rent and a drop in the occupancy rate can consequently have a negative impact on the results.

b) Risk management

Montea manages and supports actively its current and future customers to minimise vacancies and the tenant turnover in its property portfolio.

Most leases provide for the annual indexing of the rent (based on the health index in Belgium, on the construction cost index in France26 and the consumer price index in the Netherlands). All current leases in Belgium, France and the Netherlands are subject to the aforementioned indices. Only 3% of the current rents are contractually exposed to a reduction of the initial rent due to a possible drop of the index.

A new customer's solvency is looked into before he is accepted. An unconditional bank guarantee is required for the signing of every lease, the amount of which corresponds to 3 to 6 months of rent. The rent is paid in advance, on a monthly, bimonthly or quarterly basis.

Montea moreover stands out as an active partner in property development through alliances with third parties (project developers, land owners, etc.). To that end, Montea has already signed a lease with the tenant concerned before work on the new development project commences. Montea has no plans to engage in speculative development projects (the so-called "blank" projects where there are no tenants beforehand).

25 For more information concerning the Montea strategy, cf. the Annual Report 2015. Montea's policy will be adjusted according to the described risk factors as and when necessary.

26 ICC – indice de coût de construction [construction cost index].

Property portfolio management

a) Risk description

The Montea team, assisted by external consultants as and where necessary, sees to the daily management of the buildings and the technical management of the property portfolio27 and provides efficient and flexible solutions to improve the quality and sustainability of the portfolio. Furthermore, the team makes an utmost proactive effort to minimise any vacancies.

The operational technical management and maintenance of the buildings, as well as the coordination of the ongoing construction and renovation work are monitored by Montea's own staff. The team presents a maintenance and renovation programme to the investment committee and the board of directors to ensure optimal profitability of the portfolio in the long term.

b) Risk management

Montea pursues a policy where the largest portion for the management of buildings is billed to the tenants.

Liquidity and financing risk

a) Risk description

The liquidity risk entails that, at a certain moment, Montea does not have the cash needed and can no longer obtain the required financing to honour its short-term debts.

On 30 June 2016, Montea had an accumulated overdraft of € 228.34 million, of which € 219.5 million were already entered at the end of the 2nd quarter of 2016. All the credit facilities to be refinanced in 2016 were extended in July 2016.

b) Risk management

The liquidity and financing risk is limited by:

  • The diversification of the financing sources: the total financial debt exclusive of the valuation of IRS (to the tune of € 330.9 million) consists of 66.6% of credit facilities, 33.1% of debenture loans, and 0.3% of leasing payables;
  • The diversification of the credit facilities with six leading European financial institutions (ING, Belfius, BNP Paribas Fortis, KBC, Petercam Degroof and Banca Monte Paschi Belgium); this diversification stands guarantee for attractive financial market conditions;
  • The term of the financial debt: during 2015, the total outstanding debt due was refinanced by the issue of two debenture loans of € 50 million with an average term of 11 years (for more information, cf. the press release of 26 June 2016). Montea analysed its debt position in June and July 2016, prior to the maturity dates of certain credit facilities -- debts refinanced at market conditions.

27 Montea is assisted by external partners for certain tasks. Montea retains responsibility and sees to the coordination.

To prevent a future liquidity problem, Montea always takes actions to ensure the necessary financing for the further growth of the portfolio. The Company foresees no problem at this time in finding other financing sources. A balance between the cost and term of financing and the diversification of financing sources are always prime concerns.

Interest rate risks

a) Risk description

The short and/or long-term interest on the (international) financial markets may fluctuate widely.

Apart from the leasing agreement28 and 3 of the 4 debenture loans,29 Montea borrows at a variable interest rate (bilateral credit facilities at 3-month EURIBOR). In this way, Montea can benefit from any low interest rates.

b) Risk management

To hedge the risk of rising interest rates Montea pursues a policy where part of the financial debt is hedged by interest rate hedging instruments. This prudent policy prevents a rise in the nominal interest rate without concurrent growth of inflation, which leads to an increase of the real interest rates. The increase of the real interest rates cannot be offset by an increase of rents through indexing. Furthermore, there is always a difference in time between the increase in the nominal interest rates and the indexing of rents.

Taking into account the credit facilities with variable interest rates, the hedging instruments, the fixed and variable interest rate on the debenture loans, the fixed interest rate on leases and the financial earnings, the average interest rate burden amounted to 3.00% on 30 June 2016.

On the basis of the current debt position on 30 June 2016 and the short-term interest rates in force at that time, a rise in the short-term interest rate of 100 basis points would entail an increase of the total annual financial cost (€ 0.89 million).

28 Montea has a financial debt concerning the current lease of €1 million (0.3% of the total financial debt). The lease for Milmort will expire in 2017. This lease was concluded at the time with a fixed quarterly instalment (inclusive of the interest burden).

29 Montea issued a debenture loan in 2014 with a fixed interest rate of 3.355% and in 2013 with a fixed interest rate of 4.107%. For more information, cf. the press releases of 24 June 2013 and 20 May 2014. In 2015, Montea issued a debenture loan with a fixed interest rate of 3.42%. The 2nd debenture loan issued by Montea in 2015 was at a variable interest rate (3M Euribor + 2.05%).

1.9 Outlook

Economic situation

Montea's activities are impacted in part by the overall economic situation. Lower economic growth can have an indirect impact on the occupancy rate and on rental income. This may also enhance the risk that certain tenants cannot honour their obligations.

This risk is addressed at Montea in part through the diversification of earnings (e.g. solar panels) and geographic location (Belgium, France and the Netherlands), and by entering leases for a longer term with high quality tenants from different sectors.

Specific prospects for Montea

Investment pipeline

In the current climate of yield compression and in view of the sophisticated investment policy pursued by Montea, it is more difficult to acquire quality, class A buildings on the basis of reasonable returns. As a result, build-to-suit projects have acquired increasing importance in our investment portfolio. Such projects have a longer cycle time than pure acquisitions.

We nonetheless manage to maintain growth through our knowledge of the market. We expect that the property portfolio will grow above € 600 million by the end of 2016.

Occupancy rate and term of leases

On 30 June 2016, the occupancy rate stood at 97%, mainly as a result of the current vacancies at the Mechelen and Savigny-le-Temple sites. Montea is still keen to maintain the occupancy rate above 95% at the end of the year. The average term of the leases until notice can first be given is 7 years. On the basis of the afore-announced growth, Montea expects to maintain the average term of its contracts above 7 years at the end of the financial year.

Financing strategy

Taking account of the 60% debt ratio limit, Montea still has an investment capacity of € 57 million. Montea is endeavouring to pursue a diversified financial policy, whereby the aim is to bring the term of our loans (now 5.6 years on average) in line with the term of our leases (now 7 years on average). Montea analysed its debt position again in June and July 2016, prior to the expiry dates of some credit facilities -- debts refinanced at lower market conditions.

Operating margin

The operating margin stood at 89.4% on 30 June 2016. Based on the afore-announced growth, Montea expects to maintain the operating margin above 88% over the entire year 2016.

Financial cost

Based on the debt burden on 30 June 2016, the financial cost amounted to 2.92%, which is in line with the stated objective to maintain the financial cost recurrently below 3.5%. The cost of the hedging instruments is included in this percentage (Montea wishes to hedge 80% of its debt burden).

Net current result

On the basis of the result of the first half of €13.7 million, the coming earnings from projects sold, and taking account of an estimate of the extension of certain contracts and the letting of current vacancies, Montea is on course to attain a net current result of €2.40 per share, which entails a 5% increase compared to 2015 (€2.29).

1.10 Corporate responsibility and sustainable entrepreneurship

Montea reports that all developments, renovations and new construction projects are subject to a thorough study intended to help Montea minimise the impact on the surroundings and the environment.

1.11 Statement on compliance with certain covenants concerning bond issues

Pursuant to Article 5.11 of the terms and conditions of issue of bonds, issued on 28 June 2013 (for a total of €30 million), on 28 May 2014 (for a total of €30 million), and on 30 June 2015 (for a total of €50 million), Montea will include a statement in its consolidated annual and semi-annual figures on compliance with certain covenants as stipulated in Article 5.10 of said terms and conditions of issue.

Montea declares that:

  • The consolidated ratio amounts to 56.22%, and as such is below 65%, as required in Article 5.10, section (d) of the information memoranda of debenture loans issued in 2013 and 2014, and Article 5.10 section (c) of the information memoranda of the debenture loans issued in 2015;
  • The "Interest Cover" amounts to 3.58 and is therefore higher than 1.5 as request by Article 5.10 section (e) of the information memoranda of debenture loans issued in 2013 and 2014, and Article 5.10 section (d) of the information memoranda of the debenture loans issued in 2015.

2. Forward looking statements

This press release comprises a number of future-oriented statements. Said statements are subject to risks and uncertainties owing to which the actual results may different substantially from the results that can be assumed by such future-oriented statements in this press release. Important factors that can impact such results include in particular changes in the economic situation, commercial and competitive circumstances due to future judicial decisions or changes in the relevant legislation.

Pursuant to Article 13, paragraph 2 of the Royal Decree of 14 November 2007, the statutory manager of Montea, Montea Management NV, represented by its permanent representative, Jo De Wolf, declares that, to the best of its knowledge:

  • The condensed financial statements, which are drawn up pursuant to the applicable standards for the annual accounts, provide a true and fair view of the assets, financial situation and results of Montea and the companies included in the consolidation;
  • The interim annual report gives a true and fair view of the information required by Articles 13, §5 and §6 of the Royal Decree of 14 November 2007 concerning the obligations of issuers of financial instruments authorised for trading on a regulated market.

4. Financial calendar

10/11/2016 Quarterly figures – results at 30/09/2016

ABOUT MONTEA "SPACE FOR GROWTH"

Montea Comm. VA is a regulated public property company (RPPC) under Belgian law, that specialises in logistical property in the Benelux and France. The company is a leading player in this market. Montea literally offers its clients the room to grow through versatile, innovative property solutions. This enables Montea to create value for its shareholders. On 8/05/2015 Montea was the first Belgian real estate investor to receive the Lean & Green Star in recognition for showing that CO2 emissions have been effectively reduced by 26% in the Belgian portfolio. As of 30/06/2016 Montea's portfolio of property represented total floor space of 852,238 m², spread across 49 locations. Montea Comm. VA has been listed on NYSE Euronext Brussels (MONT) and Paris (MONTP) since 2006.

MEDIA CONTACT MORE INFORMATION

Jo De Wolf www.montea.com +32 53 82 62 62 [email protected]

Annex 1: Consolidated summary of the profit-and-loss account 30/06/2016 30

CONSOLIDATED 30/06/2016 31/12/2015 30/06/2015
PROFIT & LOSS ACCOUNT (EUR x 1.000) 6 months 12 months 6 months
I. Rental income 21.514 11.611 16.869
II. Write-back of lease payments sold and discounted 0 0 0
III. Rental-related expenses -643 -313 -630
NET RENTAL RESULT 20.871 11.297 16.239
IV. Recovery of property charges 0 0 0
V Recovery of charges and taxes normally payable by tenants on let properties 2.704 2.182 2.270
VI. Costs payable by tenants and borne by the landlord for rental damage and refurbishment 0 0 0
at end of lease
VII. Charges and taxes normally payable by tenants on let properties -3.273 -2.756 -3.125
VIII. Other rental-related income and expenses 705 226 761
PROPERTY RESULT 21.008 10.949 16.145
IX.
X.
Technical costs
Commercial costs
-66
-76
-27
-65
-27
-15
XI. Charges and taxes of un-let properties -3 -2 -155
XII. Property management costs -294 -148 -338
XIII. Other property charges -20 -8 -20
PROPERTY CHARGES -459 -249 -554
PROPERTY OPERATING RESULT 20.549 10.700 15.590
XIV. General corporate expenses -1.881 -1.109 -2.197
XV. Other operating income and expenses -6 15 -23
OPERATING RESULT BEFORE PORTFOLIO RESULT 18.661 9.606 13.370
XVI. Result on disposal of investment properties 0 0 5
XVII. Result on disposal of other non-financial assets 0 0 0
XVIII. Changes in fair value of investment properties 2.318 2.089 -1.603
XIX. Other portfolio result 0 0 0
OPERATING RESULT 20.979 11.695 11.772
XX. Financial income 338 185 294
XXI. Net interest charges -5.143 -2.574 -4.001
XXII. Other financial charges -28 -16 -24
XXIII. Change in fair value of financial assets & liabilities -6.087 -4.606 2.996
FINANCIAL RESULT -10.920 -7.012 -735
XXIV. Share in the result of associates and joint ventures 0 0 0
PRE-TAX RESULT 10.059 4.684 11.037
XXV. Corporation tax -117 -85 -203
XXVI. Exit tax 0 0 0
TAXES -117 -85 -203
NET RESULT 9.942 4.598 10.834
Attributable to:
Shareholders of the parent company 9.942 4.598 10.832
Minority interests 0 0 2
NET CURRENT RESULT 7.624 2.509 12.432
NET CURRENT RESULT (excl. IAS 39) 13.711 7.116 9.436
Number of shares in circulation entitled to the result of the period (SHARES) 9.951.884 9.211.701 9.211.701
Number of weighted number average of shares before the period 9.951.884 9.000.882 9.211.701
Number of shares at the end of the period (SHARES)
NET RESULT PER SHARE (EUR)
9.951.884
1,00
9.211.701
0,50
9.211.701
1,18
NET CURRENT RESULT PER SHARE (excl. IAS39) / number of shares, participating in
the result (EUR) 1,38 0,77 1,02
NET RESULT PER SHARE / weighted number average of shares (EUR) 1,00 0,51 1,18
NET CURRENT RESULT PER SHARE (excl. IAS 39) (EUR) / weighted number average of 1,38 0,79 1,02
shares (EUR)

30 The condensed financial statements have been subjected to limited review by the auditor.

Annex 2: Consolidated view of the balance sheet at 30/06/2016 31

CONSOLIDATED
BALANCE SHEET (EUR x 1.000)
30/06/2016
Conso
31/12/2015
Conso
30/06/2015
Conso
I. NON-CURRENT ASSETS 572.527 569.913 466.631
B. Intangible assets 214 217 231
C. Investment properties 561.947 559.238 457.963
D. Other tangible assets 10.328 10.420 8.400
G. Trade receivables and other non-current assets 38 38 37
II. CURRENT ASSETS 36.769 28.527 30.616
A. Assets held for sale 7.094 0 0
D. Trade receivables 11.362 10.217 11.697
E. Tax receivables and other current assets 1.885 2.383 2.167
F. Cash and cash equivalents 2.985 2.919 5.896
G. Deferred charges and accrued income 13.443 13.007 10.856
TOTAL ASSETS 609.297 598.440 497.247
TOTAL SHAREHOLDERS' EQUITY 225.748 228.807 194.321
I. Shareholders' equity attributable to shareholders of the parent company 225.629 228.689 194.221
A. Share capital 200.330 194.403 185.288
B. Share premiums 32.439 27.991 20.893
C. Reserves -17.082 1.697 -22.794
D. Net result of the financial year 9.942 4.598 10.834
II. Minority interests 118 118 100
LIABILITIES 383.549 369.633 302.926
I. Non-current liabilities 350.576 324.805 270.109
B. Non-current financial debts 320.301 296.010 248.478
a. Credit institutions 209.500 185.333 0
b. Financial leasings 484 630 0
c. Other 110.317 110.047 0
C. Other non-current financial liabilities 30.275 28.795 21.630
E. Other non-current liabilities 0 0 0
II. Current liabilities 32.973 44.828 32.817
B. Current financial debts 10.572 17.230 11.513
a. Credit institutions 10.000 16.667 0
b. Financial leasings 572 563 0
c. Other 0 0 0
C. Other current financial liabilities 0 0 0
D. Trade debts and other current debts 7.677 10.654 10.550
a. Exit taks 3.369 3.586 0
b. Other 4.307 7.067 0
E. Other current liabilities 4.020 3.995 14
F. Accrued charges and deferred income 10.704 12.950 10.740
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 609.297 598.440 497.247

31 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 3: Consolidated view of the changes in the equity capital 32

CHANGES IN SHAREHOLDERS' EQUITY
(EUR x 1.000)
Share capital Share premiums Reserves Result Deduction of
transfer rights and
costs
Minority interests Shareholders'
equity
ON 31/12/2014 185.288 20.893 1.222 24.010 -23.256 100 208.256
Elements directly recognized as equity 9.227 6.243 6.044 0 -5.443 0 16.071
Capital increase 9.227 6.243 15.470
Impact on fair value of estimated transfer rights and costs resulting from 5.443 -5.443 0
hypothetical disposal of investment properties
Positive change in value of solar panels (IAS 16) 213 213
Own shares 388 388
Own shares held for employee option plan 0
Minority interests 0
Corrections 0
Subtotal 185.288 20.893 10.377 6.107 -23.256 100 199.508
Dividends -15.262 -15.262
Result carried forward 6.107 -6.107 0
Result for the financial year 24.010 24.010
ON 31/12/2015 185.288 20.893 1.222 24.010 -23.256 100 208.256
Elements directly recognized as equity 15.042 11.546 2.526 0 -2.884 18 26.248
Capital increase 15.042 11.546 0 0 0 0 26.588
Impact on fair value of estimated transfer rights and costs resulting from 0 0 2.884 0 -2.884 0 0
hypothetical disposal of investment properties
Positive change in value of solar panels (IAS 16) 0 0 -480 0 0 0 -480
Own shares 0 0 122 0 0 0 122
Own shares held for employee option plan 0 0 0 0 0 0 0
Minority interests 0 0 0 0 0 18 18
Corrections 0 0 0 0 0 0 0
Subtotal 200.330 32.440 3.747 24.010 -26.140 118 234.504
Dividends 0 0 -18.700 0 0 0 -18.700
Result carried forward 0 0 24.010 -24.010 0 0 0
Result for the financial year 0 0 0 9.942 0 0 9.942
ON 30/06/2016 200.330 32.439 9.057 9.942 -26.140 118 225.748

32 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 4: View of the consolidated overall result 33

ABBREVIATED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME (EUR x 1.000)
30/06/2016
6 months
31/12/2015
12 months
30/06/2015
6 months
Net result 9.942 4.598 10.834
Other items of the comprehensive income -3.364 -5.230 -3.633
Items taken in the result -2884 -5443 -3871
Impact on fair value of estimated transfer rights and costs resulting from
hypothetical disposal of investments properties
-2.884 -5.443 -3.871
Changes in the effective part of the fair value of authorized cash flow hedges 0 0 0
Items not taken in the result -480 213 238
Impact of changes in fair value of solar panels -480 213 238
Comprehensive income 6.578 -632 7.201
Attributable to:
Shareholders of the parent company 6.578 -632 7.201
Minority interests 0 0 0

33 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 5: View of the consolidated cash flow34

CONSOLIDATED
CASH FLOW STATEMENT (EUR x 1.000)
30/06/2016
6 months
31/12/2015
12 months
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 4.930 4.250
Net result 9.942 24.010
Financial cash elements (not dedectable of the net profit) to become the operating result 4.833 8.016
Received interests -338 -581
Payed interests on finances 5.171 8.597
Received dividends
Taxes (dedected from the net result) to become the operating result
0
117
0
324
Non-cash elements to be added to / deducted from the result 3.752 -2.774
Depreciations and write-downs 100 139
Depreciations/write-downs (or write-back) on intangible and tangible assets (+/-) 100 196
Write-downs on current assets (+) 0 2
Write-back of write-downs on current assets (-) 0 -59
Other non-cash elements 3.652 -2.913
Changes in fair value of investment properties (+/-) -2.318 -2.470
IAS 39 impact (+/-)
Other elements
6.087
0
-438
0
Realized gain on disposal of investment properties 0 -5
Provisions 0 0
Taxes -117 0
NET CASH FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING
CAPITAL REQUIREMENTS
18.644 29.576
Change in working capital requirements 195 1.880
Movements in asset items 379 -3.047
Trade receivables 0 -1
Other long-term non-current assets -3.671 4.762
Other current assets 2.184 -2.483
Deferred charges and accrued income 1.866 -5.327
Movements in liability items -184 4.927
Trade debts
Taxes, social charges and salary debts
-2.906
2.668
-2.487
2.861
Other current liabilities 27 3.205
Accrued charges and deferred income 27 1.347
NET CASH FLOW FROM OPERATING ACTIVITIES (A) 23.769 31.456
Investment activities -60.197 -85.177
Acquisition of intangible assets -49 -180
Investment properties and development projects -59.808 -85.843
Other tangible assets
Solar panels
-18 -93
Disposal of investment properties -322
0
-2.841
3.780
Disposal of superficy 0 0
NET CASH FLOW FROM INVESTMENT ACTIVITIES (B) -60.197 -85.177
FREE CASH FLOW (A+B) -36.428 -53.721
Change in financial liabilities and financial debts 36.217 66.073
Increase (+)/Decrease (-) in financial debts 36.217 66.511
Increase (+)/Decrease (-) in other financial liabilities
Increase (+)/Decrease (-) in trade debts and other non-current liabilities
0
0
-438
0
Change in other liabilities 0 0
Increase (+)/Decrease (-) in other liabilities 0 0
Increase (+)/Decrease (-) in other debts 0 0
Change in shareholders' equity 8.029 595
Increase (+)/Decrease (-) in share capital 15.042 9.227
Increase (+)/Decrease (-) in share premium 11.546 6.243
Increase (+)/Decrease (-) in consolidation differences
Increase (+)/Decrease (-) in minority interests
0
19
0
0
Dividends paid -18.700 -15.262
Increase (+)/Decrease (-) in reserves 122 387
Increase (+)/Decrease (-) in changes in fair value of financial assets/liabilities 0 0
Disposal of treasury shares 0 0
Dividend paid (+ profit-sharing scheme) 0 0
Interim dividends paid (-) 0 0
Financial cash elements
NET FINANCIAL CASH FLOW (C)
-4.833
39.413
-8.016
58.651
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR (A+B+C) 2.985 4.930

34 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 6: Fair value hierarchy 35

Fair value hierarchy
(EUR x 1.000)
30/06/2016
Booking value
30/06/2016
Level 1 (1)
30/06/2016
Level 2 (2)
30/06/2016
Level 3 (3)
I NON-CURRENT ASSETS 572.527 0 252 572.275
A.
B.
Goodwill
Intangible assets
0
214
0
0
0
214
0
0
C. Investment properties 561.947 0 0 561.947
D. Other tangible assets 10.328 0 0 10.328
E. Non-current financial assets 0 0 0 0
F. Finance lease receivables 0 0 0 0
G. Trade receivables and other non-current assets 38 0 38 0
H Deferred taxes (assets) 0 0 0 0
I. Participations in associates and joint ventures according to the equity 0 0 0 0
II. CURRENT ASSETS 36.769 2.985 26.690 7.094
A. Assets held for sale 7.094 0 0 7.094
B. Current financial assets 0 0 0 0
C. Finance lease receivables 0 0 0 0
D. Trade receivables 11.362 0 11.362 0
E. Tax receivables and other current assets 1.885 0 1.885 0
F. Cash and cash equivalents 2.985 2.985 0 0
G. Deferred charges and accrued income 13.443 0 13.443 0
TOTAL ASSETS 609.297 2.985 26.942 579.370
LIABILITIES 383.549 0 383.549 0
I. Non-current liabilities 350.576 0 350.576 0
A. Provisions 0 0 0 0
B. Non-current financial debts 320.301 0 320.301 0
C. Other non-current financial liabilities 30.275 0 30.275 0
D. Trade debts and other non-current debts 0 0 0 0
E. Other non-current liabilities 0 0 0 0
F. Deferred taxes - liabilities 0 0 0 0
II. Current liabilities 32.973 0 32.973 0
A. Provisions 0 0 0 0
B. Current financial debts 10.572 0 10.572 0
C. Other current financial liabilities 0 0 0 0
D. Trade debts and other current debts 7.677 0 7.677 0
E. Other current liabilities 4.020 0 4.020 0
F. Accrued charges and deferred income 10.704 0 10.704 0
TOTAL LIABILITIES 383.549 0 383.549 0

35 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 7: Segment reporting: Consolidated view of the income statement on 30/06/2016 per geographic region36

(EUR x 1.000) 30/06/2016 30/06/2016 30/06/2016 30/06/2016 30/06/2016
BE FR NL Elim. 12 months
I. Rental income 11.301 5.448 4.764 0 21.514
II. Write-back of lease payments sold and discounted 0 0 0 0 0
III. Rental-related charges -643 0 0 0 -643
NET RENTAL INCOME 10.658 5.448 4.764 0 20.871
IV. Recovery of property charges 0 0 0 0 0
V Recovery of charges and taxes normally borne by tenants on let properties 703 1.828 174 0 2.704
VI. Costs payable by tenants and borne by the landlord for rental damage and 0 0 0 0 0
refurbishment at end of lease
VII. Charges and taxes normally borne by tenants on let properties -1.074 -1.978 -221 0 -3.273
VIII. Other rental-related income and expenses 575 54 77 0 705
PROPERTY RESULT 10.863 5.351 4.794 0 21.008
IX. Technical costs -32 -33 0 0 -66
X. Commercial costs -36 -40 0 0 -76
XI. Charges and taxes of un-let properties -3 0 0 0 -3
XII. Property management costs -222 -72 0 0 -294
XIII. Other property charges -20 0 0 0 -20
PROPERTY CHARGES -314 -145 0 0 -459
PROPERTY OPERATING RESULT 10.549 5.206 4.794 0 20.549
XIV. General costs of the company -1.422 -375 -85 0 -1.881
XV. Other operating income and expenses 18 -24 0 0 -6
OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO 9.145 4.807 4.709 0 18.661
XVI. Result on disposal of investment properties 0 0 0 0 0
XVII. Result on disposal of other non-financial assets 0 0 0 0 0
XVIII. Changes in fair value of investment properties 855 260 1.203 0 2.318
XIX. Other portfolio result 0 0 0 0 0
OPERATING RESULT 10.000 5.067 5.912 0 20.979
XX. Financial income 338 0 0 0 338
XXI. Net interest charges -5.137 -1 -5 0 -5.143
XXII. Other financial charges -20 -7 -1 0 -28
XXIII. Changes in fair value of financial assets and liabilites -6.087 0 0 0 -6.087
FINANCIAL RESULT -10.906 -8 -6 0 -10.920
XXIV. Share in the result of associates and joint ventures 0 0 0 0 0
PRE-TAX RESULT -906 5.059 5.906 0 10.059
XXV. Corporate taxes -48 -69 0 0 -117
XXVI. Exit tax 0 0 0 0 0
TAXES -48 -69 0 0 -117
NET RESULT -954 4.990 5.906 0 9.942
NET CURRENT RESULT (excl. IAS 39) 4.278 4.730 4.703 0 13.711
Number of shares in circulation entitled to the result of the period 9.952 9.952 9.952 9.952 9.952
NET RESULT PER SHARE -0,10 0,50 0,59 0,00 1,00
NET CURRENT RESULT PER SHARE (excl. IAS 39) 0,43 0,48 0,47 0,00 1,38

36 The condensed financial statements have been subjected to limited review by the auditor.

geographic region 37
(EUR x 1.000) 30/06/2016 30/06/2016 30/06/2016 30/06/2016 30/06/2016
BE FR NL Elim. Conso
I NON-CURRENT ASSETS 360.797 135.684 139.521 -63.475 572.527
A. Goodwill 0 0 0 0 0
B. Intangible assets 214 0 0 0 214
C. Investment properties 286.792 135.635 139.521 0 561.947
D. Other tangible assets 10.315 13 0 0 10.328
E. Non-current financial assets 63.475 0 0 -63.475 0
F. Finance lease receivables 0 0 0 0 0
G. Trade receivables and other non-current assets 2 36 0 0 38
H Deffered taxes (assets) 0 0 0 0 0
I. Participations in associates and joint ventures according to the equity 0 0 0 0 0
method
II. CURRENT ASSETS 232.474 16.890 9.105 -221.700 36.769
A. Assets held for sale 6.415 0 680 0 7.094
B. Current financial assets 0 0 0 0 0
C. Finance lease receivables 0 0 0 0 0
D. Trade receivables 5.015 4.920 1.870 -442 11.362
E. Tax receivables and other current assets 187.782 11.045 5.198 -202.140 1.885
F. Cash and cash equivalents 975 711 1.299 0 2.985
G. Deffered charges and accrued income 32.287 214 59 -19.117 13.443
TOTAL ASSETS 593.271 152.575 148.626 -285.175 609.297
TOTAL SHAREHOLDERS' EQUITY 177.648 31.067 78.570 -61.538 225.748
I. Shareholders' equity attributable to the shareholders of the parent 177.630 30.968 78.570 -61.538 225.629
company
A. Share capital 200.330 0 45 -45 200.330
B. Share premiums 32.439 0 0 0 32.439
C. Reserves -54.186 25.978 72.619 -61.493 -17.082
D. Net result of the financial year -954 4.990 5.906 0 9.942
II. Minority interests 19 100 0 0 118
LIABILITIES 415.623 121.507 70.056 -223.637 383.549
I. Non-current liabilities 349.522 1.054 0 0 350.576
A. Provisions 0 0 0 0 0
B.
C.
Non-current financial debts
Other non-current financial liabilities
319.247
30.275
1.054
0
0
0
0
0
320.301
30.275
D. Trade debts and other non-current debts 0 0 0 0 0
E. Other non-current liabilities 0 0 0 0 0
F. Deferred taxes - liabilities 0 0 0 0 0
II. Current liabilities 66.101 120.453 70.056 -223.637 32.973
A. Provisions 0 0 0 0 0
B. Current financial debts 10.572 0 0 0 10.572
C. Other current financial liabilities 0 0 0 0 0
D. Trade debts and other current debts 1.989 2.902 3.229 -442 7.677
E. Other current liabilities 47.360 114.751 64.600 -222.690 4.020
F. Accrued charges and deferred income 6.180 2.801 2.228 -505 10.704
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 593.271 152.575 148.626 -285.175 609.297

37 The condensed financial statements have been subjected to limited review by the auditor.

Attachment 9: Report from the independent property expert on 30/06/2016

Valuation The valuation of the different investment objects of the portfolio was supported by
the following methods: the rent capitalisation method and the income approach
according to a Discount Cash Flow (DCF) model, with a verification of the unit prices
obtained.
Evolution of value The Fair Value of the projects (exclusive of developments and solar panels) in
accordance with IAS 40 has gone from €481 million on 31 December 2015 to €550
million on 30 June 2016. This Fair Value of €550 million corresponds to an
investment value of €576 million, value deed in hand.
The initial return (the rental income in respect of the investment value) of the
complete portfolio amounts to 7.04%.
Patrimony The patrimony today comprises ± 782,893 m² storage space and ± 69,345 m² floor
space, on a total area of ± 852,238 m².
Apart from 16 sites in France and 9 sites in the Netherlands, the current properties
are situated mainly in Flanders.
Rental income The actual rental income is calculated after deduction of the advance levy on income
derived from real estate when the latter is payable by the owner and in certain rare
cases, when it is calculated as an average rental income up to the next expiry date,
if there are rent discounts or if the rent is not contractually constant.
This annual rental income amounted to €40.9 million per year on 30 June 2016.
The aforementioned rental amounts pertain to net rental income, without any
additional payments for common charges or any insurance premiums.

The occupancy rate for the entire portfolio, calculated on the basis of floor space, amounts to ± 97%.

Attachment 10: Summary of the property portfolio at 30/06/2016

Construction year / Year most Offices m² Warehouses m² Total m² Contracted Rent Estimated Rental Occupancy rate (as
important renovations Income Value (*) % of total m²)
Belgium
AALST (ABDEFG), TRAGEL 48-58 1975 - 2002 - 2009 2.098 16.606 18.704 601.978 594.140 100,0%
AALST (CHIJ), TRAGEL 48-58 2002 - 2009 540 19.017 19.557 1.188.443 858.762 100,0%
AALST (KLM), TRAGEL 48-58 1985 - 2009 1.397 4.591 5.988 268.356 255.615 100,0%
BORNEM, INDUSTRIEWEG 4-24 1977 - 2016 1.437 13.163 14.600 595.516 573.855 100,0%
GRIMBERGEN, EPPEGEMSESTWG 31-33 1980 - 1995 - 1996 - 2003 -2014 2.033 31.136 33.169 1.198.311 1.392.784 98,4%
HOBOKEN SMALLANDLAAN 7 2001 402 3.836 4.238 125.000 85.980 100,0%
HERENTALS, TOEKOMSTLAAN 33 2004 1.642 12.920 14.562 360.000 576.094 100,0%
NIJVEL, RUE DE L'INDUSTRIE
PUURS, SCHOONMANSVELD 18
2000
1998
1.385
1.334
12.649
11.907
14.034
13.241
555.343
783.166
552.325
583.000
100,0%
100,0%
EREMBODEGEM, INDUSTRIELAAN 27 1973 - 2007 3.479 13.440 16.919 760.984 849.030 78,1%
MECHELEN, ZANDVOORTSTRAAT 16 1984 - 1990 - 1998 - 2013 1.409 26.396 27.805 912.252 888.180 100,0%
VORST, HUMANITEITSln 292, SITE LIPTON 1984 - 2007 778 4.819 5.597 351.226 254.220 100,0%
VORST, HUMANITEITSln 292, SITE CM 1966 - 2007 - 2014 0 7.150 7.150 363.938 286.000 100,0%
VORST, HUMANITEITSln 292, SITE RESTAURANT (STATION) 1971 - 1995 2.110 0 2.110 0 168.800 0,0%
VORST, HUMANITEITSln 292, SITE METRO 2015 0 3.850 3.850 538.782 269.500 100,0%
VORST, HUMANITEITSln 292, SITE CdS 2016 0 10.505 10.505 500.730 457.900 100,0%
MILMORT, AVENUE DU PARC INDUSTRIEL 2000 1.225 29.112 30.337 566.359 1.090.095 53,6%
HEPPIGNIES, RUE BRIGADE PIRON 2011 730 13.381 14.111 770.033 564.830 100,0%
ZAVENTEM, BRUCARGO 830 2012 4.328 23.951 28.279 2.156.811 1.999.390 100,0%
ZAVENTEM, BRUCARGO 831 2013 1.896 7.891 9.787 629.257 677.685 100,0%
GENT, EVENSTUK
ZAVENTEM, BRUCARGO 763
2013 - 2016
1995 -1999 / 2007 / 2009
755
1.198
48.154
4.875
48.909
6.073
1.795.519
298.737
1.862.778
333.215
100,0%
100,0%
GENT, KORTE MATE 2011 1.012 12.024 13.036 653.296 608.620 100,0%
ZAVENTEM, BRUCARGO 738-1 2014 1.574 4.471 6.045 474.762 488.775 100,0%
WILLEBROEK, DE HULST SITE NEOVIA 2014 512 21.500 22.012 0 953.940 100,0%
WILLEBROEK, DE HULST SITE DACHSER 2014 1.652 7.381 9.033 999.852 844.155 100,0%
WILLEBROEK, DE HULST SITE FEDERAL MOGUL 2016 789 28.328 29.117 1.416.422 1.334.490 100,0%
EREMBODEGEM, WATERKERINGSTRAAT 1 2016 1.516 14.423 15.939 996.573 951.851 100,0%
Total Belgium 37.231 407.476 444.707 19.861.646 20.356.009 95,9%
France
SAVIGNY LE TEMPLE, RUE DU CHROME 1992 / 2007 646 15.650 16.296 345.150 602.952 54,3%
FEUQUIERES, ZI DU MOULIN 80 1995 - 1998 - 2000 763 8.230 8.993 358.955 247.308 100,0%
CAMBRAI, P. d' A. ACTIPOLE 2008 682 10.588 11.270 486.231 469.990 100,0%
ROISSY, RUE DE LA BELLE ETOILE 280 1990 - 2001 737 3.285 4.022 312.885 281.540 100,0%
BONDOUFLE, RUE HENRI DUNANT 9-11
DECINES-CHARPIEU, RUE ARTHUR RIMBAUD 1
1990
1996
1.307
1.108
2.678
2.713
3.985
3.821
236.353
374.396
239.100
293.080
100,0%
100,0%
LE MESNIL AMELOT, RUE DU GUE 4 1992 - 2015 1.375 7.241 8.616 831.372 775.422 100,0%
ALFORTVILLE, LE TECHNIPARC 2001 0 1.995 1.995 219.450 219.450 100,0%
ROISSY, RUE DE LA BELLE ETOILE 383 2001 1.965 4.492 6.457 640.211 615.885 100,0%
LE MESNIL AMELOT, RUE DU GUE 1-3 1998 1.211 4.043 5.254 491.818 472.860 100,0%
SAINT PRIEST, RUE NICEPHORE NIEPCE 2008 1.000 15.803 16.803 600.000 662.544 100,0%
SAINT-CYR-EN-VAL, RUE DES GENETS 660 1996 - 2006 1.655 73.797 75.452 3.301.549 2.868.799 100,0%
MARENNES, LA DONNIERE 1998 - 2000 / 2001 524 19.965 20.489 860.538 860.538 100,0%
SAINT-LAURENT-BLANGY, ACTIPARK 2006 747 18.828 19.575 635.558 604.856 100,0%
SAINT-MARTIN-DE-CRAU 2002 1.300 18.445 19.745 825.274 776.000 100,0%
SAINT PRIEST, PARC DES LUMIERES 2006 988 9.084 10.072 591.259 503.600 100,0%
Total France 16.008 216.837 232.845 11.110.999 10.493.924 96,8%
Netherlands
ALMERE, STICHTSE KANT 2008 510 25.338 25.848 1.195.410 1.291.901 100,0%
WADDINXVEEN, EXPORTWEG 2009 2.069 17.380 19.449 1.005.490 1.033.745 100,0%
OSS, VOLLENHOVERMEER 2014 680 26.825 27.505 1.043.892 1.218.225 100,0%
BEUNINGEN, ZILVERWERF 2009 2.987 14.908 17.895 1.035.436 909.753 100,0%
S HEERENBERG, DISTRIBUTIEWEG 2009 2.376 20.593 22.969 1.472.447 1.391.685 100,0%
HEERLEN, BUSINESS PARK AVENTIS 2015 4.787 9.273 14.060 1.460.804 1.176.973 100,0%
APELDOORN, IJSELDIJK 2011 701 8.308 9.009 553.538 617.128 100,0%
TILBURG, GESWORENHOEKSEWEG 2004 1.546 19.150 20.696 1.000.000 1.078.210 100,0%
EINDHOVEN, DE KETEN
Total Netherlands
2006 450
16.106
16.805
158.580
17.255
174.686
1.200.000
9.967.016
1.068.100
9.785.719
100,0%
100,0%

Attachment 11: Report from the Auditor

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