Goodman European Partnership Goodman European Logistics Fund, FCP-FIS Annual Report 2017

1,018,717 sqm leasing achievements

5.2 years weighted average lease expiry to first break

GEP continued its proven track record of delivering strong portfolio performance and stable income driven returns

Delivering quality+

97.3%stabilised portfolio occupancy

120 properties in 10 countries Manager’s report+ 2

Goodman European Partnership (GEP) is one of the leading European logistics real estate investment vehicles with a €3.2 billion pan-European portfolio of modern, prime logistics assets and stabilised portfolio occupancy rate of 97.3%. Contents+

02 Manager’s report

08 Consolidated financial statements for the year ended 31 December 2017 (audited)

40 Glossary

41 Corporate directory

Consolidated financial statements for the year ended 31 December 2017 (audited) 8

GEP ANNUAL REPORT 2017 | 1 Manager’s report Emmanuel Van der Stichele Director – Investment Management Manager of the AIFM

Manager’s report

I am pleased to present the Goodman European the strength of Goodman’s in‑house property Partnership (GEP or “the Partnership”) Annual Report management team. The stabilised portfolio’s for the financial year ended 31 December 2017. weighted average lease expiry (WALE) to first break Management believes that GEP has successfully was largely stable over the year, with a WALE of delivered on its 2017 objectives by focusing on the 5.2 years as at 31 December 2017 (5.2 years as continued generation of long-term sustainable per 31 December 2016). income and portfolio evaluation. GEP furthermore deployed the remaining proceeds of the 2013 equity The robust portfolio performance resulted in stable commitments and successfully concluded a cash flows for the Partnership and generated a high €277.5 million equity raise, positioning GEP for distribution yield of 7.7% for the financial year further growth by strategically investing the proceeds. (2016: 7.5%). Total distributable income for the Further net growth will not only provide increased year amounted to €125.2 million or €4.17 on a per economies of scale in terms of cost but also in terms Unit basis (€3.92 in 2016). of customer relations, while further diminish risk through diversification in terms of asset granularity External appraisals and disposals resulted in a net and customer exposure. capital gain on investments in property and joint ventures of €162.4 million for the year (€78.8 million Performance in 2016). This result was mainly driven by yield GEP has continued to produce a consistently compression across GEP’s core markets, strong portfolio performance. Leasing activity in particularly in Germany and France. The weighted 2017 exceeded 1 million square metres for the first average equivalent yield for GEP’s stabilised time (1,018,717 sqm), which represents 21.2% of portfolio compressed throughout the year from the total portfolio income for the year. The 6.2% to 5.8%. stabilised portfolio’s occupancy slightly decreased over the year to 97.3% (97.6% excluding Project In combination with other value movements, this Azurite, 31 December 2016: 98.3%), predominantly has resulted in strong growth of the CUV(ex) over as a result of acquiring and developing some the year from €54.02 to €58.76. speculative space in the portfolio. When looking back on the eleven years since GEP’s inception, The income return together with capital movements portfolio occupancy has never fallen below 95%. resulted in GEP’s best performance since inception, with a Unitholder total return of 16.8% This notable performance is a direct result of the for the year (2016: 7.3%). quality of the real estate portfolio, combined with

2 | GEP ANNUAL REPORT 2017 The income return together with capital movements resulted in GEP’s best performance since inception, with a Unitholder total return of 16.8% for the year (2016: 7.3%).

Lauwin-Planque, France Manager’s report continued highlights

€58.76 current unit value (ex)

€125.2 million distributable income (annual)

7.7% distribution yield (annual)

97.3% stabilised portfolio occupancy

32.9% gearing

1,018,717 sqm leasing achievements

257,759 sqm committed acquisitions and developments

5.2 years WALE to first break of stabilised portfolio

4 | GEP ANNUAL REPORT 2017 Hamburg, Germany

GEP ANNUAL REPORT 2017 | 5 On 7 July 2017, S&P upgraded GEP’s credit rating Management intends to continue its focus on to BBB+ (from BBB), noting the Partnership’s costs, and to initiate tenders on a regular basis for quality real estate portfolio, lowered gearing target its main service providers, similar to 2017, where and solid e-commerce fundamentals in the logistics the valuation services, audit service, depositary and market. Post the year end, on 10 January 2018, central administration services were all retendered. Moody’s confirmed GEP’s Baa1 status. Looking forward, Management is focused on the The Board of the AIFM is managing the financial long‑term success of the Partnership. The portfolio risks that GEP is exposed to as described in note performance has been and will continue to be the 18 of the consolidated financial statements. key driver behind the operational performance of the Partnership. Goodman’s experienced Under the AIFM Directive, GEP is considered an pan‑European property management team remains “alternative investment fund” (an “AIF”), as defined committed to the active management of the in the 2013 Law. portfolio, including the existing vacant space and pending lease expiries. Pursuant to the Management Regulations, GEP has appointed the AIFM as its “alternative I would like to thank all GEP’s investors for their investment fund manager” (the “AIFM”), as defined continued support of the Partnership. Management in the 2013 Law, to provide hedging, portfolio will also continue to engage with Unitholders and management, marketing and other ancillary the Investment Committee in order to achieve its services (including the valuation of its assets as set 2018 goals. Management remains determined to out in the Management Regulations). The AIFM is continue delivering attractive risk adjusted returns. authorised and regulated by the CSSF in respect of The following pages provide further analysis of the its AIFM activities. GEP is the sole undertaking for financial results for the full year ended collective investment managed by the AIFM. 31 December 2017.

The AIFM maintains own funds in accordance with the requirements under the AIFM Directive, including additional own funds to cover potential liability risks arising from professional negligence.

Outlook 2017 was another year of strong achievements, as the Partnership performed well across multiple key Emmanuel Van der Stichele metrics. As Management continues to focus on Director – Investment Management portfolio quality, the stabilised portfolio’s Manager of the AIFM occupancy (97.3%), as well as the average portfolio age (6.9 years), can be considered industry leading in continental Europe.

6 | GEP ANNUAL REPORT 2017 Halle, Germany

GEP ANNUAL REPORT 2017 | 7 Audit report

8 | GEP ANNUAL REPORT 2017 GEP ANNUAL REPORT 2017 | 9 Audit report

10 | GEP ANNUAL REPORT 2017 GEP ANNUAL REPORT 2017 | 11 Consolidated statement of comprehensive income For the year ended 31 December 2017

Notes FY 2017 FY 2016 €m €m Net property income 3 176.7 160.9 Net gains/(losses) from fair value adjustments on investments in property 10 160.1 73.5 Net gains/(losses) from disposals of investments in property 10 1.4 5.7 Net gains/(losses) from fair value adjustments on joint ventures 9 0.9 0.3 Net gains/(losses) from fair value adjustments and disposals of investments in property and joint ventures 162.4 79.6 Base management fees 20 (14.1) (12.5) Other expenses12 (5.1) (4.7) Total expenses13 (19.3) (17.2) Result before finance result and income tax 319.8 223.3 Finance costs (18.0) (25.1) Other finance costs 0.0 (24.9) Net gains/(losses) from fair value adjustments on derivative financial instruments (0.2) (0.1) Finance income 0.4 0.8 Finance result 4 (17.8) (49.3) Result before income tax 302.0 174.0 Current income tax (5.3) (5.9) Deferred income tax (40.8) (21.7) Income tax 5 (46.2) (27.5) Result for the year 255.8 146.4 Other comprehensive income for the year 0.0 0.0 Total comprehensive income for the year 255.8 146.4

Non IFRS measures Net (gains)/losses from fair value adjustments on investments in property (160.1) (73.5) Net (gains)/losses from disposals of investments in property, adjusted for capital gain taxes (1.4) (4.9) Net (gains)/losses from fair value adjustments on joint ventures (0.9) (0.3) Net (gains)/losses from fair value adjustments on derivative financial instruments 0.2 0.1 Amortisation of interest rate caps (0.4) (0.9) Other finance costs 0.0 24.9 Deferred income tax 40.8 21.7 Capital expenditure allowance (8.9) (6.1) Distributable income 16 125.2 107.4

12 Depositary/Custody fees are included in Other expenses for €0.3 million (2016: €0.3 million). 13 Management Expense Ratio (MER): 0.64% (2016: 0.66%). The consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes.

12 | GEP ANNUAL REPORT 2017 Consolidated statement of financial position As at 31 December 2017

Notes 31 Dec 2017 31 Dec 2016 €m €m Current assets Cash and cash equivalents 6 33.8 73.6 Receivables 7 21.3 33.8 Other current assets 8 6.2 9.3 Assets held for sale 10 539.5 0.0 Total current assets 600.7 116.6 Non-current assets Completed investments in property 2,570.1 2,584.7 Properties under construction 35.5 104.1 Total investments in property 10 2,605.6 2,688.8 Joint ventures 9 20.8 17.1 Derivative financial instruments 11 0.0 0.2 Deferred tax assets 12 5.3 7.8 Total non-current assets 2,631.8 2,713.8 Total assets 3,232.5 2,830.5 Current liabilities Payables 13 93.6 96.6 Interest bearing liabilities 14 1.3 1.3 Liabilities held for sale 10 29.2 0.0 Total current liabilities 124.1 97.9 Non-current liabilities Customer deposits 7.4 7.6 Interest bearing liabilities 14 1,084.4 1,053.7 Deferred tax liabilities 12 88.7 73.4 Total non-current liabilities 1,180.5 1,134.6 Total liabilities 1,304.6 1,232.5 Net assets 1,927.9 1,597.9 Equity attributable to Unitholders Issued capital 15 2,116.9 1,922.6 Equity raising costs 15 (8.2) (8.1) Distributions 16 (776.2) (656.3) Result brought forward 339.6 193.2 Result for the year 255.8 146.4 Total equity attributable to Unitholders 17 1,927.9 1,597.9

Non IFRS measures Current Unit Value (cum) (€m) 17 1,953.5 1,605.5 Current Unit Value (cum) (€/Unit) 17 59.76 54.96 Current Unit Value (ex) (€m) 17 1,920.8 1,578.0 Current Unit Value (ex) (€/Unit) 17 58.76 54.02

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

GEP ANNUAL REPORT 2017 | 13 Consolidated statement of changes in equity For the year ended 31 December 2017

Issued capital Equity raising Distributions Result Total equity costs brought forward/for the year €m €m €m €m €m Balance at 1 January 2016 1,823.6 (7.6) (550.4) 193.2 1,458.9 Comprehensive income Result for the year — — — 146.4 146.4 Other comprehensive income for the year — — — — — Total comprehensive income for the year — — — 146.4 146.4 Transactions with Unitholders Contributions by way of cash payment - Units14 99.0 — — — 99.0 Equity raising costs — (0.5) — — (0.5) Distributions declared to Unitholders — — (105.9) — (105.9) Balance at 31 December 2016 1,922.6 (8.1) (656.3) 339.6 1,597.9

Balance at 1 January 2017 1,922.6 (8.1) (656.3) 339.6 1,597.9 Comprehensive income Result for the year — — — 255.8 255.8 Other comprehensive income for the year — — — — — Total comprehensive income for the year — — — 255.8 255.8 Transactions with Unitholders Contributions by way of cash payment - Units14 194.3 — — — 194.3 Equity raising costs — (0.2) — — (0.2) Distributions declared to Unitholders — — (120.0) — (120.0) Balance at 31 December 2017 2,116.9 (8.2) (776.2) 595.5 1,927.9

14 Net of participation fees.

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

14 | GEP ANNUAL REPORT 2017 Consolidated cash flow statement For the year ended 31 December 2017

FY 2017 FY 2016 €m €m Cash flows from operating activities Result before income tax 302.0 174.0 Adjusted for: Net (gains)/losses from fair value adjustments and disposals of investments in property/joint ventures (162.4) (79.6) Net (gains)/losses from fair value adjustments on derivative financial instruments 0.2 0.1 Finance income (0.4) (0.8) Finance costs (including other finance costs) 18.0 50.0 (Increase)/decrease in current assets 20.3 (17.6) Increase/(decrease) in current liabilities (5.0) 1.1 Increase/(decrease) in other non-current liabilities (0.2) 1.4 Cash generated from operations 172.6 128.5 Net interest paid (including other finance costs) (17.4) (59.4) Income tax paid (7.2) (11.8) Net cash generated from operating activities 148.0 57.3 Cash flows from investing activities Payments for investments in property (389.4) (331.2) Net proceeds from disposals of investments in property 104.6 268.5 Payments/receipts for investments in/loans to joint ventures (6.0) (5.1) Net cash used in investing activities (290.8) (67.8) Cash flows from financing activities Proceeds from issue of Units 194.3 99.0 Equity raising costs 0.0 (0.4) Proceeds from borrowings 30.0 640.5 Repayments of borrowings (1.3) (575.9) Distributions paid (120.0) (105.9) Net cash generated from/used in financing activities 103.0 57.2 Net increase/(decrease) in cash and cash equivalents (39.8) 46.8 Cash and cash equivalents at the beginning of the period 73.6 26.8 Cash and cash equivalents at the end of the period 33.8 73.6

The consolidated cash flow statement is to be read in conjunction with the accompanying notes.

GEP ANNUAL REPORT 2017 | 15 Notes to the consolidated financial statements For the year ended 31 December 2017

General information Goodman European Partnership15 or GEP (legal entity: GEP is an Alternative Investment Fund (AIF) in scope of the Goodman European Logistics Fund, FCP‑FIS) is a Fonds Alternative Investment Fund Managers (AIFM) Directive, and has Commun de Placement – Fonds d’Investissement Specialisé appointed the Management Company as its AIFM. The (FCP‑FIS) registered and domiciled in Luxembourg and Management Company is authorised and regulated as an AIFM established on 19 December 2006. GEP is subject to the law by the Luxembourg Commission de Surveillance du Secteur on undertakings for collective investments of 13 February 2007 Financier (CSSF), having obtained such authorisation in 2014. and to its latest updated Management Regulations dated March 2017, as amended from time to time. GEP is managed by GEP’s strategy is to invest in high quality pan‑European GELF Management (Lux) S.à r.l. (Management Company), a logistics and industrial properties in recognised and emerging limited liability company organised under the laws of warehouse, distribution and logistics locations with access to Luxembourg (registration number: B 121702) having its major transport and infrastructure. These properties should be registered office at 28, Boulevard d’Avranches, L‑1160 located in the European Union (excluding the UK and Greece), Luxembourg. Norway, Switzerland or Turkey.

The Management Company is ultimately owned by Goodman The significant accounting policies which have been adopted in Group. The Management Company has the exclusive right to the preparation of the consolidated financial statements are set manage GEP and is vested with broad powers to administer out below. and manage GEP in the name of and on behalf of the Unitholders, subject to rules and regulations set out in the Management Regulations.

15 As per 1 November 2015, the Goodman European Logistics Fund, FCP‑FIS has been rebranded to Goodman European Partnership (GEP or Partnership) although it has not changed its legal name or legal form.

Willebroek, Belgium

16 | GEP ANNUAL REPORT 2017 Note 1 eliminated in the same way as unrealised gains, unless they Statement of significant accounting policies evidence a recoverable amount impairment. Basis of preparation of the consolidated financial statements Business combinations The consolidated financial statements of GEP comprise GEP Accounting for business combinations under IFRS 3 only and its controlled entities (together the Consolidated Entity) applies if it is considered that a business has been acquired. and the Consolidated Entity’s interest in joint ventures (JVs). Under IFRS 3 (business combinations), a business is defined These consolidated financial statements have been prepared as an integrated set of activities and assets conducted and on a going concern basis, applying a historic cost convention, managed for the purpose of providing a return to investors or except for the investments in property, the investments in joint lower costs or other economic benefits directly and ventures and derivative financial instruments that have been proportionately to policyholders or participants. A business measured at fair value. These consolidated financial generally consists of inputs, processes applied to those statements have been prepared in accordance with inputs, and resulting outputs that are, or will be, used to International Financial Reporting Standards as adopted by the generate revenues. In the absence of such criteria, a group of European Union (IFRS). assets is deemed to have been acquired. If goodwill is present in a transferred set of activities and assets, the transferred set The accounting policies adopted are consistently applied by is presumed to be a business. the Consolidated Entity. The consolidated financial statements are presented in Euro and were authorised for issue by the Revenue recognition Management Company on 1 March 2018. Rental income Rental income entitlements under operating leases are The information presented in the consolidated financial recognised on a straight‑line basis over the term of the lease statements is subject to rounding (to the closest €0.1 million). contract. The cost of lease incentives provided to customers is recognised on a straight‑line basis over the life of the lease Principles of consolidation as a reduction of gross property income. Controlled entities The consolidated financial statements incorporate the assets Service charges and liabilities of all entities controlled by GEP and the results of Recovery of certain outgoings is accrued on an estimated all such entities. GEP controls an entity when GEP is exposed basis and adjusted when the actual amounts are invoiced. to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its Asset sales power over the entity. Where an entity began or ceased to be The net gain or loss on disposal of investments in property is controlled during the year, the results for that entity are recognised when contracts for the sale have been included only from/to the date control commenced or ceased. unconditionally exchanged and the risks and rewards of ownership have been transferred. Joint ventures A joint venture is an entity that is jointly controlled by the Value added tax (VAT) Consolidated Entity and its joint venture partner. In the Revenues, expenses and assets are recognised net of the consolidated financial statements, investments in JVs are amount of VAT except where the amounts of VAT are not accounted for at fair value. recoverable. In these circumstances, the VAT is recognised as part of the cost of acquisition of the asset or as part of the The Consolidated Entity’s share of the JVs’ net profit or loss is expense. Receivables and payables are stated with the recognised in the consolidated statement of comprehensive amount of VAT included. The net amount recoverable from, or income from the date joint control commences to the date payable to, the tax authorities is included as a current asset or joint control ceases. as a current liability in the consolidated statement of financial position. Transactions eliminated on consolidation Unrealised gains and losses and inter‑company balances Finance facility costs resulting from transactions with or between controlled entities Expenditure incurred in obtaining debt facilities is capitalised are eliminated in full on consolidation. Unrealised gains against the principal amount of the interest bearing liabilities resulting from transactions with joint ventures are eliminated to and amortised using the effective interest method over the the extent of the Consolidated Entity’s interest. Unrealised period of the finance facility. All other finance costs are gains relating to joint ventures are eliminated against the expensed as incurred. carrying amount of the investment. Unrealised losses are

GEP ANNUAL REPORT 2017 | 17 Notes to the consolidated financial statements For the year ended 31 December 2017

Income tax 3 GEP’s entities For GEP controlled entities, income tax on the profit or loss for The result and financial position of all of the entities being part any year comprises current and deferred tax. of the Consolidated Entity (none of which have the currency of a hyperinflationary economy) that have a functional currency Current income tax is the forecast tax payable on the taxable different from the presentation currency are translated into the income for the period, using tax rates enacted or substantially presentation currency as follows: enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. ++ Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance Deferred tax liabilities (DTL) are recognised in respect of sheet; and temporary differences between the carrying amounts of ++ Income and expenses for each income statement are investments in property for financial reporting purposes and translated at average exchange rates (unless this average is the amounts used for taxation purposes. However, deferred not a reasonable approximation of the cumulative effect on tax liabilities are not accounted for if arising from initial the rates prevailing on the transaction dates of the recognition in a transaction other than a business transactions). combination. Deferred tax liabilities are determined using tax rates enacted or substantially enacted at the date of the Investments in property statement of financial position. GEP recognises deferred tax Investments in property consist of completed investments in liabilities arising from revaluation differences to the extent that property and of properties under construction. these changes in value are recognised in the consolidated statement of comprehensive income. Deferred tax assets Completed investments in property (DTA) are recognised only to the extent that it is probable that Completed investments in property comprise investment future taxable profits will be available against which the interests in land held for development and in land and temporary differences can be utilised. DTA and DTL are offset, buildings held for the purpose of leasing to produce rental if a legally enforceable right exists to offset current tax asset income. Completed investments in property also comprise against current tax liabilities and when the deferred taxes green energy project investments related to the land and relate to the same taxable entity and the same taxation buildings listed above (i.e. solar panels). Completed authority. investments in property are carried at their fair value. Land and buildings comprising investments in property are regarded as Derivative financial instruments composite assets and are disclosed as such in the In accordance with its Financial Risk Management Policy, GEP consolidated financial statements. uses a number of derivative financial instruments to provide hedges against future movements in both interest rates and Completed investments in property carrying values include the foreign currency exchange rates. Movements in the fair values costs of acquiring the properties. Where a contract of of derivative financial instruments are reported through the purchase includes a deferred payment arrangement, the consolidated statement of comprehensive income. acquisition value is determined as the cash consideration payable in the future, discounted to present value at the date Foreign currency translation of acquisition. 1 Functional and presentation currency Items included in the consolidated financial statements of Revaluations of completed investments in property. An each of the GEP’s subsidiaries are measured using the independent valuation of completed investments in property is currency of the primary economic environment in which the obtained at least annually to use as a basis for measuring the entity operates (functional currency). The consolidated fair value of the properties. An independent registered valuer financial statements are presented in Euro, which is GEP’s determines the market value based on a willing, but not functional and presentation currency. anxious, buyer and seller, a reasonable period to sell the property and that the property is reasonably exposed to 2 Transactions and balances the market. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of At each reporting date occurring between obtaining the transactions. Foreign exchange gains and losses resulting independent valuations, the Management Company reviews in the settlement of such transactions and from the translation the completed investments in property to be satisfied that, in at year end exchanges rates of monetary assets and liabilities its opinion, the carrying value of the investments in property denominated in foreign currencies are recognised in the reflects the fair value of the investments in property at consolidated statement of comprehensive income. that date.

18 | GEP ANNUAL REPORT 2017 Changes in fair value are recognised directly in the Payables consolidated statement of comprehensive income. Payables are initially recognised at fair value and subsequently measured at amortised cost using the effective Disposal of completed investments in property interest method. The gain or loss on disposal of property is calculated as the difference between the carrying amount of the property and Interest bearing liabilities the net proceeds on disposal and is included in the Interest bearing liabilities are recognised on inception at their consolidated statement of comprehensive income in the year fair value less attributable transaction costs. Subsequent to of disposal. initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest rate method. Properties under construction Properties under construction include the costs of all materials Interest expense is accrued at the contracted rate and used in construction, costs of managing the project, holding included in the consolidated statement of financial position costs and borrowing costs incurred during construction under current payables. (based on percentage of completion). Provisions Finance Leases A provision is recognised when there is a legal, equitable or Investments in property held under finance leases are constructive obligation as a result of a past event and it is capitalised and stated under fair value. The related liability is probable that an outflow of resources will be required to settle included in interest bearing liabilities and the implied interest the obligation, and the amount can be reliably estimated. charge is allocated to the consolidated statement of comprehensive income over the lease term. If the effect is material, a provision is determined by discounting the expected future cash flows (adjusted for Deferred tenancy costs and leasing incentives expected future risks) required to settle the obligation at a Expenditure on direct leasing and tenancy costs is included pre‑tax rate that reflects current market assessments of the within investment property values and amortised over the time value of money and the risks specific to the liability most lease term in proportion to the rental income recognised in closely matching the expected future payments. The each financial year. Amounts provided to customers as lease unwinding of the discount is treated as part of the expense incentives and assets relating to fixed increases in operating related to the particular provision. lease contracts are included within investment property values and amortised over the lease term. Distributions Provisions for distributions payable are recognised in the Cash and cash equivalents reporting period in which the distributions are declared, for the Cash and cash equivalents are carried in the consolidated entire undistributed amount, regardless of the extent to which statement of financial position at face value. For the purpose they will be paid in cash. of the consolidated cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with Equity raise costs banks and bank overdrafts. Equity raise costs are reflected as a separate component of the equity. They are recognised pro‑rata on the commitments Receivables called from time to time. Receivables are carried at amortised cost less any impairment losses. The ability to collect receivables is assessed at the Acquisition of assets balance date. Receivables which are known to be The cost of the purchase of an ownership interest in assets uncollectable are written off through the consolidated acquired is measured as the fair value of the assets given up, statement of comprehensive income. securities issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the Where receipt of any part of a receivable is deferred beyond acquisition. Where settlement of any part of cash the Consolidated Entity’s normal terms of trade, the amount consideration is deferred, the amounts payable in the future receivable in the future is discounted to its present value at the are discounted to their present value at the date of acquisition. date of recognition of the receivable. Recoverable amount of non-current assets valued on cost basis The carrying amounts of non‑current assets valued on the cost basis are reviewed to determine whether they are in

GEP ANNUAL REPORT 2017 | 19 Notes to the consolidated financial statements For the year ended 31 December 2017

excess of their recoverable amount at the reporting date. If the IFRS 15, Revenue from contracts with customers carrying amount of a non‑current asset exceeds its IFRS 15 provides a provides a single revenue recognition recoverable amount, the asset is written down to the lower model based on the transfer of goods and services and the amount. The write‑down is expensed in the reporting year in consideration expected to be received in return for that which it occurs. transfer. The new standard will become mandatory for the Consolidated Entity’s 31 December 2019 financial statements. New standards GEP’s principal revenue streams have been reviewed and the The following relevant amended standard has been adopted new standard is not expected to impact gross by GEP for the first time for the financial year beginning on or property income. after 1 January 2017 and has no material impact for GEP: Disclosure Initiative (Amendments to IAS 7). IFRS 16, Leases For lessees, IFRS 16 will result in almost all leases being Other standards, amendments and interpretations which are recognised on the consolidated statement of financial position, effective for the financial year beginning on 1 January 2017 are as the distinction between operating and finance leases will be not applicable for GEP. removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are As at 31 December 2017, the following relevant new recognised. The only exceptions are short term and low‑value accounting standards with mandatory application dates after leases. The accounting for lessors will not significantly change. the end of the current reporting period have not been early The standard is effective for annual periods beginning on or adopted by GEP. after 1 January 2019 and earlier application is permitted. GEP expects IFRS 16 to have an impact in relation to its land IFRS 9, Financial instruments leases. GEP has 11 land leases as at 31 December 2017. IFRS 9 addresses the classification, measurement and Management is still assessing the impact of IFRS 16 on GEP’s recognition of financial assets and financial liabilities. The consolidated financial statements. complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the There are no other IFRSs or IFRIC interpretations that are not classification and measurement of financial instruments. IFRS yet effective and would be expected to have a material impact 9 retains but simplifies the mixed measurement model and for GEP. establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value Non IFRS measures through P&L. The basis of classification depends on the Current Unit Value calculation entity’s business model and the contractual cash flow For the purposes of calculating the Current Unit Value (CUV), characteristics of the financial asset. Investments in equity the assets and liabilities of GEP (as accounted for under IFRS) instruments are required to be measured at fair value through are adjusted as follows (if applicable) in accordance with the profit or loss with the irrevocable option at inception to present Management Regulations: changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss (i) Set‑up costs and liquidity review costs are capitalised and impairment model used in IAS 39. For financial liabilities there amortised over the first five years from the incurrence of were no changes to classification and measurement except the relevant costs; for the recognition of changes in own credit risk in other (ii) Acquisition costs in relation to investments in property are comprehensive income, for liabilities designated at fair value capitalised and amortised over the first five years after the through profit or loss. IFRS 9 relaxes the requirements for acquisition of the investments in property; hedge effectiveness by replacing the bright line hedge (iii) With respect to transaction costs in relation to effectiveness tests. It requires an economic relationship investments in property, the most likely exit scenario for between the hedged item and hedging instrument and for the transfer taxes and purchaser’s costs in relation to ‘hedged ratio’ to be the same as the one management investments in property is applied; and actually use for risk management purposes. The standard is (iv) With respect to deferred taxes, the difference between the effective for accounting periods beginning on or after amount determined in accordance with IFRS and the 1 January 2018, with early adoption permitted. GEP expects estimate of deferred tax which takes into account the IFRS 9 to have an immaterial impact on the accounting for expected manner of settlement is reflected. available for sale financial assets and derivatives.

20 | GEP ANNUAL REPORT 2017 The CUV (cum), in respect of any period, includes the value of Critical accounting estimates and assumptions any distributions undeclared and unpaid until the end of that Estimates and assumptions concerning the future are made period. The CUV (ex), in respect of any period, excludes the by the Management Company. The resulting accounting value of any distributions undeclared and unpaid until the end estimates will, by definition, seldom equal the related actual of that period. results. No estimates and assumptions are deemed to have a significant risk of causing a material adjustment to the carrying The CUV (cum) per Unit and the CUV (ex) per Unit are amounts of assets and liabilities within the next financial year. determined by dividing respectively the CUV (cum) and the CUV (ex) by the number of Units on issue at the end of each Investments in property period and rounded down to the nearest Euro cent. Investments in property are carried at their fair value. Valuations are determined based on assessments and Distribution yield and distributions per Unit estimates of uncertain future events, including: The distribution yield is based on the GEP’s net income, which is calculated taking into account the expenses, provisions, (i) Upturns and downturns in European property markets; reservations and any other adjustments, such as amortisation, (ii) Development and availability of similar properties; realised and unrealised gains or losses, increments or (iii) Vacancy rates; and decrements of assets or the effect of realising mark to market (iv) Capital expenditure. values of derivative contracts considered as appropriate by the Management Company expressed as a percentage of the Investment entity assessment weighted average Unitholder capital during that financial year. The Consolidated Entity considers it does not meet the The distributions per Unit are based on the above mentioned definition of investment entity under IFRS 10 essentially due to net income calculation divided by the weighted average the active management of the Consolidated Entity’s portfolio. number of Units over the relevant financial year. Fair value estimation Unitholder return IFRS 13 requires, for assets and liabilities that are measured at This return is being calculated based on the distributions for fair value, disclosure of fair value measurements by level of the the financial year and plus or minus any capital appreciation or following fair value movement hierarchy: depreciation over the relevant financial year expressed as a percentage of the weighted average Unitholder capital. ++ Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); Gearing ++ Inputs other than quoted prices included within level 1 that The gearing is being calculated taking into account interest are observable for the asset or liability, either directly (that bearing liabilities less cash and cash equivalents divided by is, as prices) or indirectly (that is, derived from prices) (Level total assets, less cash and cash equivalents. It is calculated in 2) ; and accordance with the Management Regulations. The called ++ Inputs for the asset or liability that are not based on unpaid capital is assimilated to cash and cash equivalents for observable market data (that is, unobservable inputs) the gearing calculation purposes. (Level 3).

Management expense ratio (MER) The level in the fair value hierarchy, within which the fair value The MER is being calculated taking into account base measurement is categorised in its entirety, is determined on management fees and other expenses as included in the the basis of the lowest level input that is significant to the fair consolidated statement of comprehensive income expressed value measurement in its entirety. For this purpose, the as a percentage of the average gross assets. significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses Note 2 observable inputs that require significant adjustment based on Critical accounting estimates and judgements used in unobservable inputs, that measurement is a Level 3 the preparation of the financial statements measurement. Assessing the significance of a particular input Estimates and judgments are continually evaluated and are to the fair value measurement in its entirety requires based on historical experience and other factors, including judgement, considering factors specific to the asset or liability. expectations of future events that are believed to be The determination of what constitutes ‘observable’ requires reasonable under the circumstances. significant judgement by the Consolidated Entity. The

GEP ANNUAL REPORT 2017 | 21 Notes to the consolidated financial statements For the year ended 31 December 2017

Consolidated Entity considers observable data to be that Acquisitions market data that is readily available, regularly distributed or Significant judgment is required when determining the updated, reliable and verifiable, not proprietary, and provided appropriate method of accounting for acquisitions of shares of by independent sources that are actively involved in the a company owning property. In the opinion of the relevant market. Management Company, the special purpose vehicles which themselves own the investment property do not qualify as Segment reporting business under the definition of IFRS 3 as they do not The Consolidated Entity reports one segment, being represent “an integrated set of activities and assets”. pan‑European logistics and industrial properties. Therefore, the contributions of these properties to the Current income and deferred income taxes Consolidated Entity do not represent a business combination The Consolidated Entity is subject to corporate income and under the definition of IFRS 3. The costs of the assets and capital gains taxes in numerous jurisdictions. A significant liabilities acquired by the way of individual sale and purchase judgment is required in determining the total provision for agreements are allocated based on their relative fair values, current income and deferred income taxes. There are many and no goodwill is recognised. transactions and calculations for which the ultimate tax determination and timing of payment is uncertain during the In the case of acquisitions of investments in property from a ordinary course of business. third party, the Consolidated Entity will only recognise a business combination, where an integrated set of activities is Where the final tax outcome of these matters is different from acquired in addition to the investments in property. the amounts that were initially recorded, such differences will impact the tax payable, deferred tax liabilities and deferred tax assets in the period in which the determination is made.

Duisburg, Germany

22 | GEP ANNUAL REPORT 2017 Note 3 Net property income Net property income is comprised of the following:

FY 2017 FY 2016 €m €m Net property income Gross rental income16 183.8 167.7 Service charges 34.3 33.0 Gross property income 218.1 200.7 Property expenses (non recoverable) (7.2) (6.8) Property expenses (recoverable) (34.3) (33.0) Property expenses (41.5) (39.9) Total 176.7 160.9

16 Net of doubtful debt provisions (2017: nil; 2016: nil). The committed gross rental income (including assets held for sale) for the coming five years and beyond is:

31 Dec 2017 31 Dec 2017 31 Dec 2016 31 Dec 2016 €m % €m % Within one year 205.5 18.1 189.8 17.6 Two to five years 593.0 52.4 561.6 52.1 After five years 334.1 29.5 326.0 30.3 Total 1,132.5 100.0 1,077.5 100.0

As at 31 December 2017, GEP has investments in 10 European countries (2016: 10). The geographical distribution of the completed investments in property (net property income and carrying value) is shown in the following table:

Net property income Carrying value of completed investments in property FY 2017 FY 2016 31 Dec 2017 31 Dec 2016 €m €m €m €m Austria — 0.5 — — Belgium 7.4 8.4 120.0 128.8 Czech Republic 2.4 2.4 33.5 30.8 France 38.2 31.2 549.8 552.1 Germany 68.6 64.7 1,024.5 1,032.7 Hungary 4.3 3.8 38.9 45.2 Italy 1.8 1.9 33.6 35.1 Netherlands 16.9 15.0 274.8 218.3 Poland 29.6 27.6 374.5 451.9 Slovakia 4.9 3.6 64.9 49.3 Spain 2.5 1.8 55.6 40.4 Total 176.7 160.9 2,570.1 2,584.7

GEP ANNUAL REPORT 2017 | 23 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 4 Finance result

FY 2017 FY 2016 €m €m Bank loans interest and bank charges (2.2) (1.9) Euro Medium Term Notes (EMTN) interest (15.1) (22.6) Amortisation of transaction costs (2.0) (1.9) Capitalised borrowing costs 1.4 1.2 Finance costs (18.0) (25.1) Other finance costs 0.0 (24.9) Net gains/(losses) from fair value adjustments on derivative financial instruments (0.2) (0.1) Finance income 0.4 0.8 Finance result (17.8) (49.3) In Q4 2016, GEP completed a successful refinancing of €500 million of bonds outstanding under its EMTN Programme which were due to mature in April 2018 (EMTN 13/18). The refinancing included the issuance of two new bonds (EMTN 16/22 and EMTN 16/26) and an increase and extension of GEP’s Revolving Credit Facility (RCF). The two new bonds issued under the EMTN Programme were a €325 million six‑year bond with a coupon of 0.875% and a €325 million ten‑year bond with a coupon of 1.625%. In relation to the prepayment of the EMTN 13/18, GEP incurred one‑off other finance costs of €24.9 million.

As a result of the refinancing above, the WACD decreased from 2.7% for the year ended 31 December 2016 to 1.8% for the year ending 31 December 2017.

Borrowing costs were capitalised to investments in property at the time these properties were under construction.

Finance income of €0.4 million for the year 2017 (2016: €0.8 million) is mainly composed of interest on loans to joint ventures.

Note 5 Income tax GEP’s tax burden consists of the below mentioned current income tax and movements in deferred income tax.

Current Deferred Income tax Income tax income tax income tax FY 2017 FY 2016 FY 2017 FY 2017 €m €m €m €m Austria — — — (0.1) Belgium (0.9) 0.5 (0.4) (1.9) Czech Republic (0.2) (0.7) (0.9) 0.1 France (1.2) (7.0) (8.1) (4.0) Germany (1.3) (15.6) (16.9) (17.6) Hungary (0.2) 0.2 0.1 (0.1) Italy (0.2) (0.2) (0.4) (0.2) Luxembourg (0.6) 0.0 (0.6) (0.4) Netherlands (0.0) (4.2) (4.2) (1.4) Poland (0.8) (13.0) (13.8) 0.2 Slovakia (0.1) (0.3) (0.3) (0.9) Spain (0.0) (0.5) (0.6) (1.2) Total (5.3) (40.8) (46.2) (27.5)

In relation to disposals which occurred during the year, current income tax of €0.0 million (2016: €0.9 million) has been incurred and deferred income tax of €4.0 million (2016: €3.0 million) has been reversed. Non‑operational tax items have been reversed in the distribution calculation.

24 | GEP ANNUAL REPORT 2017 The tax on the Consolidated Entity’s result before income tax differs from the theoretical amount that would arise using the weighted average domestic tax rate of the applicable profits of the consolidated entities as follows:

FY 2017 FY 2016 €m €m Result before income tax 302.0 174.0 Adjustments for material items: Net (gains)/losses from fair value adjustments on joint ventures (0.9) (0.3) Net (gains)/losses from fair value adjustments on derivative financial instruments 0.2 0.1 Other finance costs — 24.9 Adjusted result before income tax 301.2 198.6 Tax calculated at domestic tax rates (69.1) (45.3) Other items17 23.0 17.8 Income tax (46.2) (27.5)

17 Other items include: (i) deductible expenses not included in consolidated statement of comprehensive income (2017: €16.2 million; 2016: €15.7 million) and (ii) other items not subject to tax or non‑deductible for tax (2017: €6.8 million; 2016: €2.1 million) The weighted average applicable tax rate was 23.0% (2016: 22.8%) during the year ended 31 December 2017.

Note 6 Cash and cash equivalents Of the cash balance at 31 December 2017 of €33.8 million (2016: €73.6 million), an amount of €3.6 million (2016: €0.7 million) is restricted.

Note 7 Current receivables

31 Dec 2017 31 Dec 2016 €m €m Trade receivables, net of doubtful debt provisions 6.7 2.5 VAT receivables, net of VAT payables 8.8 24.4 Other receivables 5.8 6.8 Total 21.3 33.8

As at 31 December 2017, trade receivables (net of doubtful debt provisions) include: (i) not yet due trade receivables for

€2.7 million (2016: €1.8 million) and (ii) overdue trade receivables of €3.0 million (2016: €0.8 million). The ageing analysis of overdue trade receivables is as follows: less than 30 days for €2.4 million; more than 30 days, €0.6 million. Development related receivables are also accounted for under trade receivables for €0.9 million. Trade receivables (net of doubtful debt provisions) are expected to be recovered.

Other receivables are mainly composed of the expected recoverable amount from contractors related to the litigation case which occurred in 2010 for the property located in Waldlaubersheim (Germany).

Note 8 Other current assets

31 Dec 2017 31 Dec 2016 €m €m Prepayments 6.2 9.3 Total 6.2 9.3

Prepayments are mainly composed of service charges and insurance accruals.

GEP ANNUAL REPORT 2017 | 25 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 9 Joint ventures

€m Carrying value as at 1 January 2017 17.1 Cash movements / Accruals 4.8 Transfers (2.4) Interest accrued 0.4 Fair value adjustments 0.9 Carrying value as at 31 December 2017 20.8

The total carrying value of the investments in property (100% share) which are included in the statements of financial position of the joint ventures, disclosed in note 22, is €41.6 million (2016: €34.3 million).

During the year, GEP acquired a 50% joint venture share of the legal entities dedicated to the development of Grossbeeren (Germany), Berlin II (Germany), Hamburg III (Germany) and Janki, Warsaw (Poland).

According to IFRS, the Consolidated Entity classifies its investments in joint ventures in Level 3 due to the significant unobservable inputs. During the year, there have been no transfers in or out of Level 3.

Note 10 Investments in property

Completed Properties Total investments under investments in property construction in property €m €m €m Carrying value as at 1 January 2017 2,584.7 104.1 2,688.8 Acquisitions/construction costs, capital expenditure and other related costs 208.8 186.2 395.1 Capitalised borrowing costs — 1.4 1.4 Disposals (103.3) — (103.3) Transfers to completed investments in property 278.4 (278.4) — Transfers to assets held for sale (536.5) — (536.5) Changes in fair value 137.9 22.2 160.1 Carrying value as at 31 December 2017 2,570.1 35.5 2,605.6

All completed investments in property, with a carrying value of Slovakia (Senec B4 Phase 1) and one asset in Spain €2,570.1 million (2016: €2,584.7 million), have been valued at (Barcelona III). least once during the year ended 31 December 2017 by an independent external valuer. During the year, the Consolidated The forward funded acquisitions in Amiens (France), Entity used independent external valuers being JLL, CBRE and Lauwin‑Planque III (France), Nijmegen II (Netherlands), Gdańsk Cushman and Wakefield. B2 Phase 1 (Poland) and Senec B3 Phase 2 (Slovakia) reached practical completion during the year. The forward funded For the year ended 31 December 2017, a €137.9 million (2016: acquisition in Saint-Mard III is still under construction as at €68.2 million) uplift for the year was recorded on the completed 31 December 2017, with handover projected early 2018. investments in property and a €22.2 million (2016: €5.3 million) uplift was recognised on the properties under construction. The enhanced return developments in Mönchengladbach I Phase 2, Hamburg I Phase 3, Hamburg II Phase 2 (Germany), During the year ended 31 December 2017, GEP closed on the Gdańsk B2 Phase 2, Gliwice B2 Phase 1 and Grodzisk following acquisitions: one asset in France (Saint-Priest, Lyon), Phase 1 (Poland) have been completed during the year for a five assets in Germany (Freienbrink Berlin, Cologne, net profit of €22.2 million. As at 31 December 2017, the Grossbeeren Berlin I, Nürnberg II, Pforzheim III), three assets in (partially) enhanced return developments in Saint‑Mard I Phase Poland (Kraków II Phase 1, Łódź, Sosnowiec II), one asset in 2 (France), Boom (Belgium), Kraków II Phase 2 (Poland) and

26 | GEP ANNUAL REPORT 2017 Üllő B2 Phase 2 + B3 (Hungary) are still under construction as Property Damage and Business Interruption Insurance provide at 31 December 2017. a limit of up to €150.0 million (2016: €110.0 million) for each occurrence subject to industry standard sub‑limits, During the year, GEP sold three assets in Erfurt (Germany), deductibles, definitions, exclusions and limitations. The assets Belgioioso (Italy) and Kecksemet B1-B3 (Hungary) for a net are insured on a replacement cost basis. The Management profit of €1.4 million18. In December 2017, GEP committed to Company regularly evaluates the types and amounts of sell a portfolio consisting of six properties in Poland, nine insurance coverage in conjunction with Goodman Operator properties in Germany and eight properties in France (Project (UK) Limited (as one of the Investment Advisers) and Aon Azurite) subject to satisfaction of conditions precedent. The Limited to ensure that the coverage and limits are appropriate portfolio and its related assets and liabilities have been for the Consolidated Entity. classified as current assets or liabilities held for sale as at 31 December 2017. The fair value measurement approach for the investments in property has been categorized as a Level 3 fair value based on The Management Company secures liability and property the inputs to the valuation technique used. The valuation insurance for the benefit of the Consolidated Entity. The technique used in measuring the fair value, as well as the insurance coverage includes Public Liability Insurance and values assumed for the significant unobservable inputs are Broadform Property Damage Insurance (including cover for summarised in the table below: Terrorist Acts) and Business Interruption Insurance. The

Valuation technique Significant 31 Dec 2017 31 Dec 2016 unobservable input Range of net market rents (per €28 to €126 €24 to €132 square metre per annum) Income capitalisation Capitalisation rate (weighted 5.8% 6.2% average)

The estimated fair value would increase if net market rents were higher and/or if the capitalisation rates were lower. The estimated fair value would decrease if net market rents were lower and/or if the capitalisation rates were higher.

During the year, there have been no transfers in or out of Level 3.

At 31 December 2017, should net market rents have lowered by 5 per cent with all other variables remaining constant, the decrease in net assets would amount to approximately €118.1 million (2016: €94.9 million), arising substantially from the decrease in market value of properties. If net market rents had risen by 5 per cent, the increase in net assets for the year would amount to approximately €118.0 million (2016: €94.9 million).

At 31 December 2017, should net initial yields have lowered by 25 basis points with all other variables remaining constant, the increase in net assets would amount to approximately €128.7 million (2016: €99.1 million), arising substantially from the increase in market value of properties. If net initial yields had risen by 25 basis points the decrease in net assets for the year would amount to approximately €118.5 million (2016: €91.7 million).

Note 11 Derivative financial instruments As at 31 December 2017, the fair value of derivative financial instruments was €0.03 million (2016: €0.18 million). According to IFRS, the fair value measurement hierarchy of the derivative financial instruments is classified as Level 2.

18. Combined profit of €1.2 million from share sales and €0.2 million from property sales.

GEP ANNUAL REPORT 2017 | 27 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 12 Deferred tax

Assets Liabilities €m €m Carrying value as at 1 January 2017 7.8 73.4 Movement due to revaluation and tax depreciation of properties n/a 44.5 Movement due to tax losses (0.3) n/a Movement due to disposals — (3.9) Reclassification to assets/liabilities held for sale (2.2) (25.3) Carrying value as at 31 December 2017 5.3 88.7

The deferred tax assets are expected to be recovered within a period up to five years. An amount of €16.6 million has not been recognised as a deferred tax asset as at 31 December 2017 (2016: €14.4 million).

An amount of €81.9 million has not been recognised as a deferred tax liability as at 31 December 2017 (2016: €71.8 million) due to the exemption on the initial recognition as described in Note 1 on significant accounting policies, section Income tax.

Note 13 Payables

Current payables 31 Dec 2017 31 Dec 2016 €m €m Trade payables 2.4 3.7 Tax payables 8.3 10.2 Deferred income 29.6 26.6 Related party payables 8.4 11.8 Property accruals 33.3 31.3 Other payables and accruals 11.5 13.0 Total 93.6 96.6

Deferred income corresponds to rental income in relation to upcoming periods. Tax payables include taxes related to the contribution of a set of French assets to a wholly owned OPCI for €1.8 million (2016: €3.7million). Other payables and accruals include accrued interest on interest bearing liabilities for €2.5 million (2016: €2.5 million).

Note 14 Interest bearing liabilities

Maturity date 31 Dec 2017 Net cash Non-cash 31 Dec 2016 €m flows changes €m Current Crédit-bail May 2027 1.3 (1.3) 1.3 1.3 Total 1.3 (1.3) 1.3 1.3 Non-current EMTN 14/21 Nov 2021 400.0 — — 400.0 EMTN 16/22 Oct 2022 325.0 — — 325.0 EMTN 16/26 Oct 2026 325.0 — — 325.0 RCF Dec 2021 30.0 30.0 — — Crédit-bail May 2027 15.0 — (1.3) 16.3 Unamortised transaction costs n/a (10.7) — 2.0 (12.7) Total 1,084.4 30.0 0.7 1,053.7

28 | GEP ANNUAL REPORT 2017 EMTN (Euro Medium Term Notes) GELF Bond Issuer I S.A., a Consolidated Entity’s controlled entity, has on issue €1,050 million of notes under an EMTN Programme. All EMTN covenants were in compliance during the year.

The key covenants to the EMTN are as follows:

Covenants 31 December 2017 Test Pass / Fail % % EMTNs Interest Cover 906.1 > 150.0 Pass Secured debt Cover 0.5 < 30.0 Pass Gearing19 33.2 < 60.0 Pass

19 Gearing for the purpose of the covenants is calculated as (Total Debt - Cash) / (Total Assets - Cash - positive M2M on hedges).

EMTN 14/21 The €400 million EMTN issued on 21 November 2014 at a price of €99.67 bears a fixed coupon of 1.75% payable annually in arrears. The notes mature on 22 November 2021. The notes listed on the Luxembourg Stock Exchange are quoted at a price of €104.62 (Bloomberg) as at 31 December 2017 (2016: €104.01).

EMTN 16/22 The €325 million EMTN issued on 20 October 2016 at a price of €99.39 bears a fixed coupon of 0.875% payable annually in arrears. The notes mature on 20 October 2022. The notes listed on the Luxembourg Stock Exchange are quoted at a price of €100.67 (Bloomberg) as at 31 December 2017 (2016: €98.76).

EMTN 16/26 The €325 million EMTN issued on 20 October 2016 at a price of €99.27 bears a fixed coupon of 1.625% payable annually in arrears. The notes mature on 20 October 2026. The notes listed on the Luxembourg Stock Exchange are quoted at a price of €101.15 (Bloomberg) as at 31 December 2017 (2016: €97.47).

RCF (Revolving Credit Facility) The Consolidated Entity has a €200 million (variable interest bearing) Revolving Credit Facility (RCF) with BNP Paribas, ING Bank and Royal Bank of Scotland. The RCF matures in December 2021. As at 31 December 2017, the RCF was €30 million drawn (2016: undrawn). All RCF covenants were in compliance during the year.

The key covenants to the RCF are as follows:

Covenants 31 December 2017 Test Pass / Fail % % Revolving Credit Facility Interest Cover 906.1 > 200.0 Pass Secured debt Cover 0.5 < 30.0 Pass Gearing20 33.2 < 60.0 Pass

20 Gearing for the purpose of the covenants is calculated as (Total Debt - Cash) / (Total Assets - Cash - positive M2M on hedges).

Crédit-bail immobilier The Consolidated Entity has a financial lease (variable interest bearing) related to an asset in Isle d’Abeau (France). As at 31 December 2017, the value of the financial lease amounts to €16.3 million (2016: €17.6 million). The Crédit‑bail matures in May 2027.

Unamortised transaction costs The unamortised transaction costs as at 31 December 2017 amount to €10.7 million (2016: €12.7 million) and are deducted from the interest bearing liabilities in the consolidated statement of financial position. During the year, €2.0 million of transaction costs have been amortised.

GEP ANNUAL REPORT 2017 | 29 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 15 Issued capital and equity raise costs

Number of Total issued Equity raising Units capital costs m €m €m Opening balance 29.2 1,922.6 (8.1) Movements during the year 3.5 194.3 (0.2) Equity call (21 Jun 2017) 1.4 75.0 (0.1) Equity call (19 Dec 2017) 2.1 121.2 (0.1) Less participation fees n/a (1.9) n/a Closing balance 32.7 2,116.9 (8.2)

During the year, GEP made two capital calls for a gross amount of €196.2 million (2016: €100.0 million). As a result, participation fees for a total amount of €1.9 million (2016: €1.0 million) were paid to Unitholders who participated in the 2013 equity raise under certain conditions and equity raise costs of €0.2 million (2016: €0.1 million) were recognised pro‑rata on the commitments called during the year. These costs have been supported only by those Unitholders who participated in the equity raise (through an adjustment to the issue price).

During Q2 2017, GEP closed a new equity raising set out in the Information Memorandum dated March 2017 for a total subscribed amount of c. €280 million (to be drawn within 3 years). The 2017 equity raising costs amounted to €0.5 million and will be supported only by those investors who participated in the equity raising (through a pro-rata adjustment to the issue price at each capital call).

The weighted average number of Units for the year was 30.0 million (2016: 27.4 million).

As at 31 December 2017, GEP has uncalled equity commitments for an amount of c. €280 million (2016: €196.2 million).

Note 16 Distributions

Distributions Distributions Date per Unit (declared / paid) €m €m Distributions 2016 Q1 2016 0.9721 26.6 May 2016 Q2 2016 0.9621 26.4 Aug 2016 Q3 2016 0.98 26.8 Nov 2016 Q4 2016 1.00 27.5 Feb/Mar 2017 Total for the year ended 31 December 2016 3.92 107.4 Distributions 2017 Q1 2017 1.04 30.3 May 2017 Q2 2017 1.04 30.7 Aug 2017 Q3 2017 1.03 31.5 Nov 2017 Q4 2017 1.06 32.7 Mar 2018 Total for the year ended 31 December 2017 4.17 125.2

21 Pro-forma distribution per Unit assuming conversion of Units at start of the year.

30 | GEP ANNUAL REPORT 2017 Note 17 Unit price For the purposes of calculating the Current Unit Value (CUV), the assets and liabilities of GEP (as accounted for under IFRS) are adjusted as follows:

31 Dec 2017 31 Dec 2016 €m €m Net assets (IFRS) 1,927.9 1,597.9 Adjusted for: Reversal of IFRS deferred taxes 106.5 65.6 Fair value of deferred taxes22 (90.1) (66.7) Unamortised acquisition costs of investments in property23 8.9 8.2 Unamortised set-up / liquidity review costs23 0.3 0.4 CUV (cum) 1,953.5 1,605.5 CUV (ex) 1,920.8 1,578.0 Number of issued Units, period-end (m) 32.7 29.2 CUV (cum) per Unit (€ per Unit) 59.76 54.96 CUV (ex) per Unit (€ per Unit) 58.76 54.02

22 50% of deferred tax liabilities (ignoring initial recognition exemption) net of off-settable deferred tax assets. 23 Capitalised and amortised over 5 years.

Augsburg, Germany

GEP ANNUAL REPORT 2017 | 31 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 18 interest rates on borrowings had been 25 bps higher, with all Financial risk management other variables held constant (2016: €0.03 million higher). In terms of risk exposure, GEP is primarily exposed to interest rate risk, foreign exchange risk on non‑Euro denominated Foreign exchange risk cash flows, refinancing risk, counterparty credit risk and Foreign exchange risk results from adverse movements in liquidity risk. These risks are managed in accordance with exchange rates which may add volatility to cash flows. For GEP’s Financial Risk Management (FRM) Policy. GEP, this is not expected to be material but should any significant income or expenses be receivable or payable in a The FRM Policy outlines the controls that must be adhered to, currency other than Euro, the exchange rate movement will be minimising the likelihood that financial risks will result in an hedged using the following: unacceptable adverse impact on GEP’s performance. Management is constantly reviewing these risks with a view to ++ Foreign exchange forward contracts; the appropriateness of financing and hedging strategies ++ Foreign exchange swaps; and through the cycle. The adherence to this Policy also intends to ++ Purchased options. mitigate potential mismanagement, error or fraud in relation to financial risk management resulting in financial loss to GEP. For the year ended 31 December 2017, GEP entered into a Management seeks to ensure that suitably experienced and limited number of foreign exchange forward contracts, qualified staff implements this policy (through annual capability primarily for the purpose of hedging cash flows in Polish Złoty. statements of the Investment Advisors), systems are in place The aggregate outstanding balance of foreign exchange to measure these risks, appropriate contractual arrangements contracts as at 31 December 2017 is €1.2 million (2016: are in place with counterparties and compliance with the FRM €1.4 million). Policy is maintained. Refinancing risk Interest rate risk This refers to the risk that unfavourable credit market Interest rate risk refers to the risk that interest payments and conditions result in either an unacceptable increase in GEP profitability will fluctuate due to changes in market interest credit margins or an inability to repay debt facilities on their rates. In order to cover this risk, GEP utilises interest rate due date. The approval process for new debt obligations is derivative financial instruments to manage its exposure to therefore addressed by the Policy, whereby GEP’s FRM Policy movement in market interest rates by substituting a variable identifies key considerations to manage refinancing risk. with a fixed or capped interest rate. GEP’s FRM Policy dictates both the term and scale (maximum between 80% and As at 31 December 2017, GEP has no debt maturities until 110% of debt) of GEP’s hedging positions. 2021 (aside from a crédit‑bail) and a weighted average drawn debt maturity of 5.6 years (2016: 6.7 years). The following instruments can be utilised to create the desired hedging profile: Credit risk Credit risk is the risk that a contracting entity will not complete ++ Interest rate caps; its obligations under a financial instrument and this will result in ++ Interest rate swaps; and a financial loss. This risk is managed by only entering into long ++ Fixed rate debt. term financial contracts with financial counterparties having a long‑term credit rating no lower than A‑/A3. GEP also will seek GEP currently manages its interest exposure primarily through to spread its credit exposures, where practical and the use of fixed rate debt. commercially appropriate, by using multiple financial counterparties for its hedging transactions. The comprehensive income for the year would have been €0.02 million higher (2016: €0.03 million higher), if market GEP’s increased use of fixed rate debt in recent years has interest rates on borrowings had been 25 bps higher and reduced the use of financial derivatives and the associated €0.02 million lower (2016: €0.03 million lower), if market counterparty credit risk. interest rates on borrowings had been 25 bps lower, with all other variables held constant. In relation to existing and potential customers, GEP is assessing their creditworthiness. Given that the movement of the mark‑to‑market of the derivative financial instruments is reversed in the distribution For the year ended 31 December 2017, GEP has complied calculation, the equity attributable to Unitholders would have with the requirements of this Policy. been €0.02 million higher as at 31 December 2017, if market

32 | GEP ANNUAL REPORT 2017 Liquidity risk Liquidity risk is the risk that GEP will not be able to meet its financial obligations as they fall due. The Partnership’s objective is to maintain sufficient liquidity resources to maintain operations, meet its financial obligations and liabilities, pay distributions and provide funds for capital expenditure and investment opportunities. Management seeks to achieve these objectives through:

++ Preparation of regular forecast cash flows to understand the application and use of funds; ++ Identification of future funding, including new debt facilities, or new equity raises; and ++ Close monitoring of the covenants under GEP’s EMTN Programme and RCF. The maturity analysis of financial instruments is set out below:

Total Less than 1-5 years More than Total 31 Dec 2017 1 year 5 years 31 Dec 2016 €m €m €m €m €m Cash and cash equivalents 33.8 33.8 0.0 0.0 73.6 Receivables and other current assets 27.5 27.4 0.0 0.0 43.0 Derivative financial instruments 0.0 (0.0) 0.1 0.0 0.2 Total financial assets 61.3 61.2 0.1 0.0 116.8 Payables 63.9 63.3 0.6 0.0 70.0 Customer deposits 7.4 0.7 3.3 3.4 7.6 Interest bearing liabilities 1,096.3 1.3 760.6 334.4 1,067.6 Interest payables 91.9 15.5 54.7 21.8 107.4 Total financial liabilities 1,259.6 80.8 819.2 359.6 1,252.6

Note 19 Commitments and contingencies Acquisition and/or development of investments in property and/or joint ventures contracted but not provided for and payable:

31 Dec 2017 31 Dec 2016 €m €m Within one year 103.4 361.2 More than one year 58.9 42.2 Total 162.3 403.4

As at 31 December 2017, GEP has uncalled equity commitments for an amount of c. €280 million available until May 2020 (2016: €196.2 million) and GEP committed to sell Project Azurite in December 2017 subject to satisfaction of conditions precedent, as mentioned in note 10 (2016: nil).

GEP ANNUAL REPORT 2017 | 33 Notes to the consolidated financial statements For the year ended 31 December 2017

Note 20 Related party disclosures Managers The names of the persons holding the position of Manager of GELF Management (Lux) S.à r.l., GEP’s Management Company, during the year ended 31 December 2017 were Henry Kelly (independent), Daniel Peeters, Dominique Prince and Emmanuel Van der Stichele. None of the Managers were Unitholders as at 31 December 2017 and as at 31 December 2016.

None of the Managers received remuneration from GEP with the exception of the independent Manager who received a gross remuneration of €25,000 for the year ended 31 December 2017 in accordance with the terms of his appointment (2016: €25,000).

Goodman Group Management Company’s remuneration In accordance with GEP’s Management Regulations, the Management Company is entitled to receive base management fees, performance fees23 and expense reimbursements where expenses have been incurred on behalf of GEP. During the year, GEP has made the following payments and/or accruals to the Management Company.

FY 2017 FY 2016 €m €m Base management fees 14.1 12.5 Expense reimbursements 1.2 1.1

Management Company’s interests The Management Company holds no securities directly in GEP. A related entity of the Management Company, Goodman Europe Development Trust, owns 6,656,653 Units (representing 20.4% of the issued Units as at 31 December 2017) and has uncalled equity commitments in relation to the 2017 equity raise for an amount of €40.0 million.

Other related parties All dealings between the Consolidated Entity and Goodman Group (including joint ventures entities as disclosed under note 9) are on normal commercial terms and conditions at arm’s length basis. All material dealings are, where appropriate, appraised by qualified external parties to ensure they are at commercial market rates. The following transactions have taken place with related entities during the year:

FY 2017 FY 2016 €m €m Property management fees (partially recoverable from customers24) 3.7 3.3 Leasing fees 4.0 5.3 Transaction fees 1.8 3.1 Project management fees 0.7 0.7 Property services fees 10.2 12.2 Development fees 3.3 1.4 Financial administration fees 1.1 1.2 Fees to joint ventures (50% share) 0.4 0.4 Other fees 0.3 0.3 Acquisition of investments in property 291.0 320.0 Guaranteed rental income (0.5) (1.2) Total 305.8 334.3

23 As at 31 December 2017, a performance fee deficit of €91.4 million (2016: deficit of €277.0million) is carried forward to include in the calculation to determine whether a performance fee is payablein future periods. 24 Recoverable from customers for €2.7 million (FY2016: €2.3 million).

34 | GEP ANNUAL REPORT 2017 Note 21 Auditor remuneration During the year ended 31 December 2017, fees to GEP’s external auditor regarding audit services amounted to €0.3 million (2016: €0.3 million); fees regarding non‑audit services provided by GEP’s external auditor amounted to €0.1 million (2016: €0.0 million).

Note 22 Consolidated entities

Controlled entities Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % GELF AT Warnecke GmbH Feb 2008 Austria 100 100 Bel Astre NV Jul 2007 Belgium 100 100 C€LOGIX Belgium Properties NV Jul 2007 Belgium 100 100 Canal Logistic Center NV Jul 2007 Belgium 100 100 GELF Arbo Logistics (Belgium) NV Sep 2015 Belgium 100 100 Jupiter Logistic Holding NV Dec 2006 Belgium 100 100 Mars Logistic Holding NV Dec 2006 Belgium 100 100 Mechelen Zuid Estate NV Jul 2007 Belgium 100 100 Mechelen Zuid Investments NV Jul 2007 Belgium 100 100 Mechelen Zuid Logistics NV Jul 2007 Belgium 100 100 Mechelen Zuid Projects NV Jul 2007 Belgium 100 100 Goodman Lilac Logistics (Czech Republic) s.r.o. Jan 2013 Czech Republic 100 100 KCI Czech s.r.o. May 2007 Czech Republic 100 100 Amiens Logistique SARL Dec 2008 France 100 100 C€LOGIX Immobilier EURL Jul 2007 France 100 100 GELF Douai 1 Logistics (France) SCI May 2014 France 100 100 GELF France SPPPICAV Nov 2015 France 100 100 GELF Gennevilliers Logistics (France) SCI Jun 2014 France 100 100 GELF Givors (France) SARL Jan 2008 France 100 100 GELF Longvic (France) SARL Jan 2008 France 100 100 GELF Mitry (France) SARL Jan 2008 France 100 100 GELF Roissy Logistics (France) SCI Nov 2013 France 100 100 GELF Satolas Logistics (France) SCI Dec 2015 France 100 100 GELF Strasbourg Logistics (France) SCI Oct 2013 France 100 100 GEP Saint-Priest Logistics (France) SCI Jan 2017 France 100 — Goodman Berre Logistics (France) SCI Dec 2012 France 100 100 Goodman Carvin Logistics (France) SCI Dec 2015 France 100 100 Goodman Gidy Logistics (France) SCI Dec 2016 France 100 100 Goodman Jules Verne Logistics (France) SCI Dec 2016 France 100 100 Goodman Lauwin 3 Logistics (France) SCI Dec 2016 France 100 100 Goodman Lauwin 4 Logistics (France) SCI Dec 2015 France 100 100 Goodman Lyon Logistics (France) SARL Dec 2008 France 100 100 Goodman Montelimar (France) SAS Dec 2006 France 100 100 Goodman Rosny (France) SARL Dec 2006 France 100 100 Goodman Saint Mard 1 Logistics (France) SARL Jul 2011 France 100 100 Goodman Saint Mard 2 Logistics (France) SCI Dec 2015 France 100 100

GEP ANNUAL REPORT 2017 | 35 Notes to the consolidated financial statements For the year ended 31 December 2017

Controlled entities Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % Goodman Saint Mard 3 Logistics (France) SCI Apr 2017 France 100 — Goodman Saint-Gilles Logistics (France) SCI Dec 2015 France 100 100 International Développement Management SARL Jun 2007 France 100 100 Saran Logistique SARL May 2007 France 100 100 A.L.L. Altenwerder Logistikvermietung GmbH May 2014 Germany 100 100 Alsdorf GmbH & Co KG Dec 2006 Germany 100 100 Celogix GmbH & Co KG Sep 2007 Germany 100 100 GELF White GmbH & Co KG Dec 2011 Germany 100 100 Gemini Prometheus Verwaltungs GmbH & Co KG Dec 2006 Germany 100 100 Maple Logistics GmbH Dec 2006 Germany 100 100 Pine Silver Verwaltungs GmbH & Co KG Dec 2006 Germany 100 100 Prometheus Logistics GmbH Dec 2006 Germany 100 100 Silver Maple Logistics GmbH Dec 2006 Germany 100 100 Tulip Maple Verwaltungs GmbH & Co KG Dec 2006 Germany 100 100 Almandine Real Estate Ingatlanbefektetesi Kft. Jun 2007 Hungary 100 100 Goodman Aragonite Logisztikai Kft. Dec 2007 Hungary 100 100 Goodman Üllő Logistics (Hungary) Kft. Jun 2009 Hungary 100 100 Gyal Logistics Ingatlankezelo Kft. Oct 2007 Hungary 100 100 Belgioioso Tecno Park S.R.L. Jul 2008 Italy 100 100 Lemon Tree Logistics S.R.L. Aug 2007 Italy 100 100 TCL International S.R.L. Dec 2006 Italy 100 100 GELF Alpha (Lux) S.C.Sp. Dec 2014 Luxembourg 100 100 GELF Bond Issuer I S.A. Nov 2012 Luxembourg 100 100 GELF Emerald (Lux) S.à r.l. Sep 2008 Luxembourg 100 100 GELF European Holdings (Lux) S.à r.l. Dec 2006 Luxembourg 100 100 GELF Finance One (Lux) S.à r.l. Oct 2011 Luxembourg 100 100 GELF Fizinvest (Lux) S.à r.l. Jul 2014 Luxembourg 100 100 GELF FizPartner (Lux) S.à r.l. Oct 2014 Luxembourg 100 100 GELF Investments (Lux) S.à r.l. Dec 2006 Luxembourg 100 100 GELF Langenbach (Lux) S.à r.l. Jan 2008 Luxembourg 100 100 GELF Ludwigsfelde (Lux) S.à r.l. Jan 2008 Luxembourg 100 100 Gemini Logistics S.à r.l. Dec 2006 Luxembourg 100 100 Goodman Alizarin Logistics (Lux) S.à r.l. Jun 2013 Luxembourg 100 100 Goodman Amethyst Logistics (Lux) S.à r.l. Dec 2010 Luxembourg 100 100 Goodman Arcadia Logistics (Lux) S.à r.l. Dec 2015 Luxembourg 100 100 Goodman Azure Logistics (Lux) S.C.Sp. Dec 2014 Luxembourg 100 100 Goodman Bacchus Logistics (Lux) S.C.Sp. Jun 2015 Luxembourg 100 100 Goodman Blush Logistics (Lux) S.à r.l. Jul 2015 Luxembourg 100 100 Goodman Byzantium Logistics (Lux) S.à r.l. Jan 2017 Luxembourg 100 — Goodman Boysenberry Logistics (Lux) S.à r.l.25 Apr 2012 Luxembourg — 100 Goodman Candy Logistics (Lux) S.C.Sp. Apr 2014 Luxembourg 100 100

25 Entity sold during 2017.

36 | GEP ANNUAL REPORT 2017 Controlled entities Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % Goodman Carpo Logistics (Lux) S.à r.l. Sep 2015 Luxembourg 100 100 Goodman Cerulean Logistics (Lux) S.à r.l. Jun 2013 Luxembourg 100 100 Goodman Cevic Logistics (Lux) S.à r.l. Jul 2015 Luxembourg 100 100 Goodman Cinnamon Logistics (Lux) S.à r.l.25 Dec 2011 Luxembourg — 100 Goodman Coquelicot Logistics (Lux) S.à r.l. Jul 2013 Luxembourg 100 100 Goodman Cordovan Logistics (Lux) S.C.Sp. Dec 2014 Luxembourg 100 100 Goodman Cotton Logistics (Lux) S.C.Sp. Apr 2014 Luxembourg 100 100 Goodman Edelweis Logistics (Lux) S.à r.l. Dec 2011 Luxembourg 100 100 Goodman Flame Logistics (Lux) S.à r.l. Apr 2014 Luxembourg 100 100 Goodman Ginger Logistics (Lux) S.à r.l. Oct 2015 Luxembourg 100 100 Goodman Gold Logistics (Lux) S.à r.l. Jun 2008 Luxembourg 100 100 Goodman Harvest Logistics (Lux) S.à r.l. Mar 2014 Luxembourg 100 100 Goodman Hermes Logistics (Lux) S.C.Sp. Jun 2015 Luxembourg 100 100 Goodman Jade Logistics (Lux) S.à r.l. Jun 2008 Luxembourg 100 100 Goodman Leipzig Logistics (Lux) S.à r.l. Apr 2011 Luxembourg 100 100 Goodman Lemon Logistics (Lux) S.à r.l. Sep 2016 Luxembourg 100 100 Goodman Linsengericht Logistics (Lux) S.à r.l. Feb 2012 Luxembourg 100 100 Goodman Maya Logistics (Lux) S.à r.l. Apr 2016 Luxembourg 100 100 Goodman Mercure Logistics (Lux) S.à r.l. Jun 2013 Luxembourg 100 100 Goodman Mikado Logistics (Lux) S.à r.l. Jul 2015 Luxembourg 100 100 Goodman Moss Logistics (Lux) S.à r.l. Dec 2015 Luxembourg 100 100 Goodman Navy Logistics (Lux) S.à r.l. May 2015 Luxembourg 100 100 Goodman Obsidian Logistics (Lux) S.à r.l. Dec 2012 Luxembourg 100 100 Goodman Ocean Logistics (Lux) S.à r.l. Dec 2016 Luxembourg 100 100 Goodman Olivine Logistics (Lux) S.à r.l. Jun 2008 Luxembourg 100 100 Goodman Onyx Logistics (Lux) S.à r.l. Nov 2017 Luxembourg 100 — Goodman Orcades Logistics (Lux) S.à r.l. Jan 2017 Luxembourg 100 — Goodman Orsova Logistics (Lux) S.à r.l. Aug 2017 Luxembourg 100 — Goodman Peppermint Logistics (Lux) S.à r.l. Sep 2013 Luxembourg 100 100 Goodman Pyrite Logistics (Lux) S.C.Sp. Dec 2008 Luxembourg 100 100 Goodman Redwood Logistics (Lux) S.à r.l. Jun 2013 Luxembourg 100 100 Goodman Rheinberg I Logistics (Lux) S.à r.l. Apr 2011 Luxembourg 100 100 Goodman Rheinberg II Logistics (Lux) S.à r.l. Sep 2015 Luxembourg 100 100 Goodman Sapphire Logistics (Lux) S.C.Sp. Dec 2007 Luxembourg 100 100 Goodman Silver Logistics (Lux) S.C.Sp. Dec 2011 Luxembourg 100 100 Goodman Sinopia Logistics (Lux) S.à r.l. Jul 2017 Luxembourg 100 — Goodman Tangelo Logistics (Lux) S.à r.l. Dec 2016 Luxembourg 100 100 Goodman Tanzanite Logistics (Lux) S.à r.l. Jan 2010 Luxembourg 100 100 Goodman Teal Logistics (Lux) S.à r.l. Apr 2014 Luxembourg 100 100 Goodman Thalia Logistics (Lux) S.à r.l. Oct 2014 Luxembourg 100 100 Lubna (Lux) S.C.Sp. Jun 2007 Luxembourg 100 100

25 Entity sold during 2017.

GEP ANNUAL REPORT 2017 | 37 Notes to the consolidated financial statements For the year ended 31 December 2017

Controlled entities Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % Pine Logistics S.à r.l. Dec 2006 Luxembourg 100 100 Torun S.C.Sp. May 2007 Luxembourg 100 100 Tourmaline Logistics (Lux) S.à r.l. Dec 2010 Luxembourg 100 100 Tulip Logistics S.à r.l. Dec 2006 Luxembourg 100 100 Waldlaubersheim Logistics S.à r.l. Jul 2007 Luxembourg 100 100 C€LOGIX N.V. Jul 2007 Netherlands 100 100 C€LOGIX Participation B.V. Jul 2007 Netherlands 100 100 C€LOGIX Properties France B.V. Jul 2007 Netherlands 100 100 C€LOGIX Properties Germany B.V. Jul 2007 Netherlands 100 100 C€LOGIX Properties Holding B.V. Jul 2007 Netherlands 100 100 C€LOGIX Properties Spain B.V. Jul 2007 Netherlands 100 100 C€LOGIX SPF Jul 2007 Netherlands 100 100 Eris Logistics B.V. Jun 2008 Netherlands 100 100 GELF Madrid (Netherlands) B.V. Jan 2008 Netherlands 100 100 Goodman Amber Logistics (Netherlands) B.V. Dec 2007 Netherlands 100 100 Goodman Azurite Logistics (Netherlands) B.V. Dec 2007 Netherlands 100 100 Goodman Beryl Logistics (Netherlands) B.V. Jun 2008 Netherlands 100 100 Goodman Tiel Logistics (Netherlands) B.V. Sep 2007 Netherlands 100 100 Goodman Venlo Logistics (Netherlands) B.V. Jun 2008 Netherlands 100 100 Venray Logistics (Netherlands) B.V. Feb 2007 Netherlands 100 100 GELF Finance Three (Poland) Sp. z o.o. Apr 2015 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Dec 2014 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Bone Logistics SpK Nov 2015 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Coral Logistics SpK Dec 2008 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Crystal Logistics SpK May 2007 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Elatine SpK Dec 2007 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Adonia Logistics SpK Jun 2015 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Albertic Logistics SpK Jun 2015 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Alpha Logistics SpK Apr 2011 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Isabelline Logistics SpK Apr 2014 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Jasmine Logistics SpK May 2014 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Jazzberry Logistics SpK Dec 2014 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Moonstone Logistics SpK Feb 2014 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Goodman Osmerus Logistics SpK Dec 2011 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Grodzisk Logistics 2 SpK Dec 2007 Poland 100 100 GELF FizPartner (Poland) Sp. z o.o. Vacaria SpK Dec 2007 Poland 100 100 Goodman Andromeda Logistics (Poland) Sp. z o.o. Mar 2016 Poland 100 100 Goodman Blossom Logistics (Poland) Sp. z o.o. Dec 2017 Poland 100 — Goodman Calcite Logistics (Poland) Sp. z o.o. Aug 2016 Poland 100 100 Goodman Felis Logistics (Poland) Sp. z o.o. Aug 2017 Poland 100 — Goodman Hemera Logistics (Poland) Sp. zo.o. Oct 2017 Poland 100 —

38 | GEP ANNUAL REPORT 2017 Controlled entities Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % Goodman Morganite Logistics (Poland) Sp. z o.o. Oct 2016 Poland 100 100 Goodman Omega Logistics (Poland) Sp. z o.o. Dec 2017 Poland 100 — Goodman Poseidon Logistics (Poland) Sp. z o.o. Dec 2016 Poland 100 100 IPOPEMA 103 FIZAN Nov 2014 Poland 100 100 Goodman Kosice Logistics (Slovakia) s.r.o. Jan 2012 Slovakia 100 100 Goodman Senec 2 Logistics (Slovakia) s.r.o. Jun 2008 Slovakia 100 100 Goodman Senec 3 Logistics (Slovakia) s.r.o. Apr 2015 Slovakia 100 100 Goodman Senec 4 Logistics (Slovakia) s.r.o. Nov 2015 Slovakia 100 100 Goodman Senec 5 Logistics (Slovakia) s.r.o. Dec 2016 Slovakia 100 100 Goodman Senec 6 Logistics (Slovakia) s.r.o. Apr 2017 Slovakia 100 — CELOGIX Espana S.L. Jul 2007 Spain 100 100 GELF Madrid (Spain) S.L. Feb 2008 Spain 100 100 GEP CM Segundo Logistics (Spain), S.L. Nov 2017 Spain 100 — Goodman Can Margarit Logistics (Spain) S.L. Oct 2016 Spain 100 100

Joint ventures Acquisition / Country of Interest Interest set-up date establishment held 2017 held 2016 % % GEP Bonneuil Logistics (France) SCI Jun 2017 France 50 — Agate Ingatlanforgalmazó Kft. Dec 2008 Hungary 50 50 Goodman Ceramic Logistics (Lux) S.à r.l. May 2017 Luxembourg 50 — Goodman Lazulite Logistics (Lux) S.à r.l. Dec 2008 Luxembourg 50 50 Goodman Odysse Logistics (Lux) S.à r.l. May 2017 Luxembourg 50 — Goodman Persiphone Logistics (Poland) Sp. z o.o. Jun 2017 Poland 50 —

Note 23 Subsequent events There were no material events after the statement of financial position that have a bearing on the understanding of these consolidated financial statements.

Senec, Slovakia

GEP ANNUAL REPORT 2017 | 39 Glossary

The following definitions apply throughout the Annual Report, unless the context requires otherwise and reference to the singular shall be deemed to include reference to the plural and vice versa. Terms not defined herein have the meaning ascribed to them in the Management Regulations or in the Information Memorandum. In case of a conflict between the Management Regulations and the Information Memorandum, the Management Regulations shall prevail.

AIFM GELF Management (Lux) S.à r.l., having its registered office in 28, boulevard d’Avranches, L-1160 Luxembourg, Grand Duchy of Luxembourg or a successor AIFM as the context requires Board the board of managers of the AIFM CEE central and eastern Europe Commitment with respect of each Investor, the maximum amount (denominated in Euro) agreed to be contributed to GEP pursuant to its Subscription Form(s) (including any existing and additional Commitment(s) made by such Investor) Contributed Capital in respect of each Investor, the aggregate amount of its Commitments that has been contributed and paid to GEP pursuant to one or more Call Notice(s) CSSF Commission de Surveillance du Secteur Financier CUV (cum) Current Unit Value (cum) CUV (ex) Current Unit Value (ex) EMTN Programme the €5,000,000,000 Euro Medium Term Note Programme of GELF Bond Issuer I S.A. ERV Estimated Rental Value Financial Administration the current version of the financial administration services agreement between the AIFM, Services Agreement Goodman Europe (Lux) S.à r.l. and other Goodman subsidiaries GEP or Partnership Goodman European Partnership (legal entity: Goodman European Logistics Fund, FCP-FIS) GLA gross lettable area Goodman Group or Goodman Goodman Limited, Goodman Industrial Trust and Goodman Logistics (HK) Limited, trading as Goodman Group, and where the context requires, their controlled entities (which for the purpose of clarity includes trusts) INREV association for investors in non-listed real estate vehicles Investment Committee the investment committee established in accordance with article 4 of the Management Regulations IFRS international financial reporting standards, as adopted by the European Union Information Memorandum the current version of the information memorandum of GEP, as approved by the CSSF Investment Advisory Agreement the current version of the investment advisory agreement between the AIFM and the Investment Advisor(s) ICR interest coverage ratio LTV loan to value Management Regulations the current version of the duly signed management regulations between the AIFM and the Depositary Manager a member of the Board M2M mark to market Net initial yield net operating income divided by gross property value (including notional acquisition costs) Occupancy the economic occupancy of the GEP portfolio which is calculated based on income Property Services Agreement the amended and restated services agreement between the AIFM, Goodman Europe (Lux) S.à r.l. and other Goodman subsidiaries originally dated 6 December 2006 and as most recently amended on 13 July 2016 RCF the €200,000,000 amended and restated revolving credit facility between, among others, GEP, BNP Paribas, ING Bank N.V. and The Royal Bank of Scotland PLC, originally dated 23 February 2015 and as most recently amended on 20 December 2016 Sqm square metres Uncalled Commitments in respect of a Unitholder, its Commitment less its Contributed Capital for the time being Unit a basic measurement of co-ownership participation in GEP issued by the AIFM pursuant to the Management Regulations Unitholders the registered holder of a Unit (for the avoidance of doubt, this term includes, where appropriate, the Investors) VAT value added tax WALE weighted average lease expiry, weighted by income

40 | GEP ANNUAL REPORT 2017 Corporate directory

AIFM Investment Advisers GELF Management (Lux) S.à r.l. Goodman Operator (UK) Limited 28, Boulevard d’Avranches Nelson House L-1160 Luxembourg Central Boulevard Grand Duchy of Luxembourg Blythe Valley Park Solihull West Midlands England Board of Managers B90 8BG Henry Kelly Daniel Peeters Goodman Real Estate Adviser (UK) Limited Dominique Prince Nelson House Emmanuel Van der Stichele Central Boulevard Blythe Valley Park Solihull West Midlands England B90 8BG

Goodman Management Services (Belgium) NV Medialaan 50 B-1800 Vilvoorde Belgium

Goodman Europe (Lux) S.à r.l. 28, Boulevard d’Avranches L-1160 Luxembourg Grand Duchy of Luxembourg

Important – for Well Informed investors only. This Annual Report has been prepared by GELF Management (Lux) S.à r.l. as the AIFM of the Goodman European Logistics Fund, FCP‑FIS. The Annual Report does not constitute an offer or solicitation to deal, whether directly or indirectly, in the Goodman European Logistics Fund, FCP‑FIS. Past performance is not necessarily a guide to future performance. The value of investments and any income derived from them can go down as well as up. Nothing in the Annual Report should be taken as an expressed or implied indication of performance nor warranty or guarantee as to future performance. No warranty or representation is given as to the accuracy or completeness of the Annual Report and no liability is accepted for any errors or omissions that it may contain. ©2018 GELF Management (Lux) S.à r.l.. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without the prior written permission of GELF Management (Lux) S.à r.l. GELF Management (Lux) S.à r.l., registered office 28, Boulevard d’Avranches, L‑1160 Luxembourg, Grand Duchy of Luxembourg. Registered in Luxembourg with share capital of €125,000 and registration number B121702. ce.goodman.com gep.eu