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France Offices CAPITAL MARKETS DAY FRANCE OFFICES PARIS 7 NOVEMBER 2019 AGENDA OF THE DAY MORNING – 10:00 am to 12:00 pm Presentation on Covivio France Offices strategy Lunch - 12:00 pm to 1:00 pm AFTERNOON – 1:00 pm to ~3:30 pm Asset tour in Paris CBD, Paris 17th North & Levallois End of the asset tour in Porte Maillot (metro line 1, RER A, taxi) CMD 2019 2 SUMMARY OF THE PRESENTATION I. INTRODUCTION 05 Christophe KULLMANN, CEO II. GREATER PARIS OFFICE MARKET 19 Charles BOUDET, CEO JLL France & Virginie HOUZE, Head of Research JLL France III. COVIVIO FRANCE OFFICES STRATEGY 21 Olivier ESTEVE, Deputy CEO ; Marielle SEEGMULLER, Operations Director ; Laurie GOUDALLIER, Chief Digital Officer III-A. DEVELOPMENT PIPELINE 21 III-B. CLIENT-ORIENTED STRATEGY 55 IV. KEY TAKEWAYS 87 V. ASSET TOUR 89 VI. APPENDIX 108 CMD 2019 3 TODAY’S PRESENTATION OBJECTIVES FOCUS ON FRANCE OFFICES & DEVELOPMENT PIPELINE 1 Our portfolio has a significant growth potential 2 Our development pipeline will deliver solid revenue & value growth 3 Our portfolio will fuel this pipeline in the short & medium term, especially in Paris We are broadening our client-focused approach with new services & digital transformation… 4 … which will deliver strong & resilient operating results CMD 2019 4 I. INTRODUCTION THE SUCCESS OF OUR BUSINESS MODEL INTRODUCTION TO THE OFFICES STRATEGY COVIVIO, A DIVERSIFIED SPECIALIST A €23 BN1 INTEGRATED PORTFOLIO BUILT ON 3 STRATEGIC PILLARS DIVERSIFIED BY ACTIVITY2 FOCUS ON MAJOR 1 EUROPEAN CITIES OFFICES RESIDENTIAL HOTELS €10.9 bn €6.1 bn €5.4 bn % % % DEVELOPMENT 57 26 15 2 PIPELINE And <2% non-strategic DIVERSIFIED BY GEOGRAPHY2 CLIENT 3 FOCUSED 43% 30% 21% 6% 1 €16 bn Group share CMD 2019 2 Breakdown in Group share 6 A SUCCESSFUL BUSINESS MODEL / SUSTAINABLE HIGH OCCUPANCY AND LONG LEASES 7.3 7.2 7.1 7.0 6.6 6.4 6.1 6.0 5.8 5.8 years on 5.5 average 97.1% 98.0% 98.1% 97.9% 94.8% 95.8% 95.5% 96.0% 96.3% 96.7% 96.6% on average 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019 Occupancy rate Firm average lease length CMD 2019 7 A SUCCESSFUL BUSINESS MODEL / EXCELLENT TRACK RECORD ON THE DEVELOPMENT PIPELINE 2010-2019 10 YEARS OF SUCCESSFUL DEVELOPMENT PROJECTS 61 €2.4 BN 96% PROJECTS DEVELOPMENT COST1 OCCUPANCY IN THE YEAR OF THE DELIVERY 480,000 m² OF OFFICES % 2,870 HOTEL ROOMS 7 30% YIELD ON COST VALUE CREATION AT DELIVERY 1 CMD 2019 €1.6 bn Group share 8 I. INTRODUCTION THE SUCCESS OF THE BUSINESS MODEL INTRODUCTION ON THE OFFICES STRATEGY COVIVIO OFFICES STRATEGY 1 2 3 HIGH-QUALITY STRONG ENHANCING PORTFOLIO DEVELOPMENT OUR CLIENT-FOCUS PIPELINE CMD 2019 10 1 - A HIGH-QUALITY, WELL LOCATED OFFICES PORTFOLIO €10.9 bn €9.0 bn Group share Attractive locations in France, Italy & Germany… …focused on dynamic markets % LOCATED IN1 95 Rent increase for new space in Greater Paris, Milan & Berlin PARIS €2.2 bn Group share % GREATER PARIS +6 2 €2.6 bn MILAN BERLIN per year on average since 2015 & €2.2 bn & €0.2 bn MAJOR FRENCH CITIES €0.7 bn Lyon, Bordeaux, Marseille, Lille 1 Excluding Telecom Italia portfolio, leased for 11 years CMD 2019 2 Economic rent on new space in Greater Paris & prime rent in Milan and Berlin 11 Sources: CBRE, JLL FRANCE OFFICES PORTFOLIO / DYNAMIC LOCATIONS WITH POTENTIAL Portfolio 96% in strategic locations Strong development pipeline Paris (38%) 1.6 million m² 750,000 m² Major business districts in Greater Paris (45%) of offices of redevelopments & new constructions €6.8 bn €4.7 bn €5.7 bn of projects Group share & major French cities (13%) (Lyon, Marseille, Bordeaux, Lille) CMD 2019 12 ITALY OFFICES PORTFOLIO / FOCUS ON MILAN Portfolio 90% in Milan1 Strong development pipeline 1.6 million m² M3 170,000 m² of offices of redevelopments & new constructions Bicocca M2 M1 Certosa Maciachini Porta Nuova City Life M5 Semi-centre Lambrate / Forlanini CBD €3.9 bn M4 €0.8 bn Lorenteggio Centre Linate €3.2 bn Airport of projects Group share Navigli Ripamonti Periphery 24% 56% Center & CBD & Porta Milanofiori Semi-Center Nuova Rental portfolio 20% Periphery Developments 1 CMD 2019 Excluding Telecom Italia portfolio, leased for 11 years 13 ACCELERATING IN OFFICES IN GERMANY (1/2) Increasing take-up: +7% per year on average over last 5 years SUPPORTIVE MARKET IN THE MAJOR GERMAN CITIES1 Low vacancy rate: 4.1% 1 Lack of supply : space under construction2 = 40% of yearly take-up Existing teams for Asset Management & Property management ESTABLISHED LOCAL Established partnership with local administrations PRESENCE SINCE 2006 2 Knowledge of Office markets EXISTING DEVELOPMENT Development team in Berlin since 2017 3 TEAM Strong track-record in France & Italy to be duplicated in Germany 1 Berlin, Munich, Frankfurt, Hamburg, Cologne, Düsseldorf, Essen, Leipzig CMD 2019 2 Available space under construction 14 Source: BNP RE ACCELERATING IN OFFICES IN GERMANY (2/2) A flagship development … already €200 million …and ~€90 million project… of offices in our portfolio… of investments secured in 2019 BERLIN ALEXANDERPLATZ IN BERLIN IN BERLIN EBERSWALDER BERLIN 60,000 m² mixed-use project 67,000 m² over 15 assets Acquisition of an existing asset Offices / Residential / Retail Currently valued €3,000/m² 10,200 m² for €30 million with a 4% yield 4.5% yield and >50% reversion potential +35% rent increase potential & a land bank for development 12,600 m² to be developed for €57 million at 6% yield on cost CMD 2019 15 2 - SECOND PILLAR OF THE STRATEGY / DEVELOPMENT PIPELINE A SIGNIFICANT & GROWING POTENTIAL IDENTIFIED IN OUR PORTFOLIO €8.0 bn €6.8 bn group share +1/3 TOTAL EUROPEAN €6.0 bn PIPELINE €4.4 bn group share €2.0 bn €1.3 bn German residential, hotels & mixed-use €2.0 bn Offices in Italy & Germany €1.2 bn €4.7 bn +70% €1.4 bn Offices in France €2.7 bn End-June 2019 Today Focus on France Offices pipeline in section III-A CMD 2019 16 3 – CLIENT-FOCUSED APPROACH SINCE THE BEGINING 2001 - 2007 2008 - 2018 TODAY MAIN Location | Cost Location | Well-being | Flexibility Location | Cost CLIENT Energy performance Cost | Sustainability NEEDS • Property development • Acceleration of developments • Building long-term • Sale & leaseback • Provide services in our buildings partnerships with large corporates • Offer flexible workspace COVIVIO’S STRATEGY CMD 2019 17 DEPLOY OUR SOLUTIONS THROUGHOUT OUR PORTFOLIO BE CLOSE TO IMPROVE LIFE OFFER FLEXIBLE IMPROVE OUR EFFICIENCY OUR END-USERS IN OUR BUILDINGS SOLUTIONS THROUGH DIGITALIZATION Survey of Implement new services Deploy our flexible Digital roadmap 1,300 end-users to respond to their workspace offer, for the next 3 years wishes Wellio Focus in section III-B of the presentation CMD 2019 18 II. GREATER PARIS OFFICE MARKET JLL FRANCE PRESENTATION ON THE GREATER PARIS OFFICE MARKET BY JLL 1 / Office top trends: Human Experience, Digital & Flex Charles BOUDET, CEO of JLL France 2 / The Office market in Greater Paris Virginie HOUZÉ, Head of Research at JLL France CMD 2019 20 III. COVIVIO FRANCE OFFICES STRATEGY III-A. DEVELOPMENT PIPELINE - SUCCESSFUL COMMITTED PROJECTS - POTENTIAL IN OUR PORTFOLIO III-B. CLIENT-ORIENTED STRATEGY - MORE SERVICES IN OUR PORTFOLIO - FLEX-WORKSPACE OFFER - DIGITALIZATION Total France offices pipeline €4.7 bn Committed projects €1.4 bn Managed projects €3.3 bn A SIGNIFICANT PIPELINE LOCATED MAINLY IN PARIS €4.7 bn development pipeline in France offices €1.4 bn committed projects €4.3 bn Group share €3.3 bn managed projects ~50% in Paris ~35% in Greater Paris business districts ~15% in Major cities HIGH-QUALITY Lyon LOCATIONS Bordeaux Lille A MIX OF 760,000 m² OPERATIONS 60% redevelopments / 40% new constructions LARGE GROWTH % POTENTIAL >35 value creation CMD 2019 22 CAPACITY TO RENEW OUR DEVELOPMENT PROJECTS ACCELERATING THE PACE OF COMMITMENTS & FUELLING THE PIPELINE WITH FUTURE PROJECTS €4.7 bn TOTAL FRANCE €2.8 bn €2.7 bn OFFICES PIPELINE €2.6 bn at 100% X2.5 €1.3 bn €3.3 bn €1.7 bn €1.4 bn €1.4 bn +30% MANAGED PROJECTS €2.2 bn €1.1 bn x3 COMMITTED PROJECTS €0.4 bn End-2017 End-2018 End-June 2019 Today CMD 2019 23 Total France offices pipeline €4.7 bn Committed projects €1.4 bn Managed projects €3.3 bn €1.4 BN OF COMMITTED PROJECTS IN ATTRACTIVE LOCATIONS (€1.1 BN GS) 86% 8% Paris and Greater Paris Lyon Silex 2 Lyon Part-Dieu Paris 17 So Pop 210,000 m² Levallois ALIS Paris 17 N2 5.8% yield on cost Paris 8 Jean Goujon Paris 5 Gobelins 46% pre-let Montrouge FLOW of which 57% pre-let for 2020 deliveries Chatillon IRO And Meudon Ducasse 6% >35% target value creation Montpellier with only ¼ of it already in the NAV Cœur d’Orly CMD 2019 24 Total France offices pipeline €4.7 bn Committed projects €1.4 bn Managed projects €3.3 bn LEVALLOIS / A HISTORIC BUSINESS DISTRICT OFFICE STOCK ~950,000 M² Thais Delivered in 2016 ASSET TOUR - SEPTEMBER CMD 20192019 25 Total France offices pipeline €4.7 bn Committed projects €1.4 bn Managed projects €3.3 bn LEVALLOIS ALIS / A PRIME REDEVELOPMENT An attractive investment … … for redevelopment into a prime asset … … with limited risks 2000 €215 m 5.0% ► SCARCITY OF NEW SPACE ACQUISITION OF BLOCKS A & C TOTAL YIELD AT A 12% YIELD COST ON COST ► ALIS IS THE ONLY PROJECT TO BE DELIVERED IN 2022 IN LEVALLOIS 2015 +60% ~40% ACQUISITION OF BLOCK B TARGET RENT TARGET VALUE AT A 6.4% YIELD INCREASE CREATION VS PREVIOUS TENANT 84,000 m² Annual take-up 1 Jan.
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