HALF-YEAR FINANCIAL REPORT 30 JUNE 2019 CONTENTS 1. Person responsible for the Half-year Financial Report ................................................. 4 1.1. Person responsible for the Half-year Financial Report ................................................................................ 4 1.2. Certification by the person responsible for the Half-year Financial Report ................................................ 4 2. Assets and valuation ....................................................................................................... 5 2.1. Asset valuation............................................................................................................................................ 5 2.1.1. Appraisals and methodology ............................................................................................................................... 5 2.1.2. Geographical segmentation of the portfolio ....................................................................................................... 6 2.1.3. Evolution of asset valuation ................................................................................................................................ 6 2.1.4. Changes in capitalisation rates ............................................................................................................................ 7 2.1.5. Reconciliation of the valuation assessment with the value of investment properties on the balance sheet ..... 7 2.2. Extension pipeline at 30 June 2019 ............................................................................................................. 7 2.2.1. Developments ..................................................................................................................................................... 7 2.2.2. Development pipeline ......................................................................................................................................... 8 2.2.3. 2019 Projects ...................................................................................................................................................... 9 2.2.4. Major building project in progress .................................................................................................................... 10 2.2.5. Administrative authorisations ........................................................................................................................... 10 3. Activity during the first half of the year ........................................................................ 11 3.1. Financial statements ................................................................................................................................. 11 3.1.1. Consolidated statement of comprehensive income ......................................................................................... 11 3.1.2. Consolidated balance sheet .............................................................................................................................. 12 3.1.3. Consolidated Cash Flow statement ................................................................................................................... 13 3.1.4. Statement of changes in consolidated equity ................................................................................................... 14 3.2. Activity analysis ........................................................................................................................................ 15 3.2.1. Economic environment ..................................................................................................................................... 15 3.2.2. Retailer activity ................................................................................................................................................. 15 3.2.3. Letting activity ................................................................................................................................................... 15 3.2.4. Structure of leases ............................................................................................................................................ 18 3.2.5. Financial Occupancy Rate.................................................................................................................................. 19 3.3. Corporate Social Responsibility ................................................................................................................. 20 3.4. Digital marketing ...................................................................................................................................... 20 3.5. Business development ............................................................................................................................... 21 3.6. Comments on the half year income .......................................................................................................... 22 3.6.1. Gross rental income (GRI) and Net Rental Income (NRI)................................................................................... 22 3.6.2. Operating expenses .......................................................................................................................................... 23 3.6.3. EBITDA ............................................................................................................................................................... 24 3.6.4. Net financial income/expense .......................................................................................................................... 24 3.7. EPRA performance indicators ................................................................................................................... 25 3.7.1. EPRA earnings and recurring earnings .............................................................................................................. 25 3.7.2. EPRA Cost Ratio ................................................................................................................................................. 26 3.7.3. Going concern NAV, EPRA NAV and EPRA NNNAV ............................................................................................ 26 3.7.4. EPRA vacancy rate ............................................................................................................................................. 27 3.7.5. EPRA yield: EPRA NIY and EPRA "Topped-Up" NIY ............................................................................................ 28 3.7.6. EPRA investments ............................................................................................................................................. 28 4. Financial policy ............................................................................................................. 29 4.1. Financial resources.................................................................................................................................... 29 CarmilaCarmila Group Group - –Half Half-yearfinancial yearly financial report30 reports junE 30 2019June 2019 2 4.2. Hedging instruments ................................................................................................................................. 30 4.3. Cash .......................................................................................................................................................... 31 4.4. Rating ........................................................................................................................................................ 31 4.5. Carmila’s dividend policy .......................................................................................................................... 31 4.6. Post closure events ................................................................................................................................... 31 5. Equity and shareholding ............................................................................................... 32 6. Additional information .................................................................................................. 33 6.1. Main risks and uncertainties for the period .............................................................................................. 33 6.2. Transactions with related parties ............................................................................................................. 33 6.3. Changes in governance ............................................................................................................................. 33 CarmilaCarmila Group Group - –Half Half-yearfinancial yearly financial report30 reports junE 30 2019June 2019 3 1. PERSON RESPONSIBLE FOR THE HALF-YEAR FINANCIAL REPORT 1.1. Person responsible for the Half-year Financial Report Alexandre de Palmas, Chairman and CEO of Carmila. 1.2. Certification by the person responsible for the Half-year Financial Report “I hereby declare that, to the best of my knowledge, the half-year financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, financial position and results of the Company and of all the companies included in the scope of consolidation. I further declare that the information contained in this Half-year Financial Report is in accordance with the facts that have occurred during the first half-year, with their impact on the financial statements,