Reference. document. Reference. document. Reference. 30, avenue Kléber Paris Cedex 16 Tél. : (0) Fax : (0)

Transcription

1 2009 Reference document 30, avenue Kléber Paris Cedex 16 Tél. : (0) Fax : (0) , avenue Foch Metz Tél. : (0) Fax : (0) Design-production Photo credit: O. Ouadah. Reference document Reference document 2009 F O N C I È R E PA RT E N A I R E COUV_DOC_REF_440x297_GB.indd 1 26/04/10 15:19

2 This reference document was filed with the French securities regulator (Autorité des marchés financiers, AMF) on 16/04/10, in accordance with Article of the AMF s general regulations. It may only be used in support of a financial transaction if supplemented with a transaction memorandum that has been approved by the AMF. This document has been drawn up by the issuer and is the responsibility of its signatories. This document is a free translation of the French language registered document (document de référence) and produced solely for the convenience of English speaking readers. However, only the French text has any legal value. Consequently, the translation may not be relied upon to sustain any legal claim, nor should it be used as the basis of any legal opinion.

3 REFERENCE DOCUMENT MANAGEMENT REPORT SUSTAINABLE DEVELOPMENT FINANCIAL INFORMATION CONTROL OF THE COMPANY INFORMATION AND MANAGEMENT

4

5 MANAGEMENT REPORT 1.1 MAJOR EVENTS IN BUSINESS ANALYSIS ANALYSIS OF OPERATIONS BY BUSINESS SEGMENT FINANCIAL RESULTS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND GROUP SHARE CORPORATE FINANCIAL STATEMENTS ADJUSTED NET ASSET VALUE FINANCIAL RESOURCES RISK MANAGEMENT SHAREHOLDER STRUCTURE STOCK MARKET AND DIVIDEND CORPORATE OFFICERS INFORMATION ON THE COMPANY AND ITS HOLDINGS POST-BALANCE SHEET EVENTS OUTLOOK FURTHER REPORT BY THE MANAGEMENT BOARD Reference Document1

6 MANAGEMENT REPORT Ladies and Gentlemen, We have convened an Ordinary and Extraordinary Shareholders Meeting in accordance with the bylaws and the provisions of the French Commercial Code in order to report to you on the Company's business during the year ended 31 December 2009, the results of this business and its subsidiaries, and the outlook for the future, and to submit for your approval the Corporate and Consolidated Financial Statements for said year. These accounts are appended to this report. The notices to attend, as provided under French law, were duly sent out to you, and all the documents and items required under the current regulations were made available to you within the stipulated timeframes. 1.1 MAJOR EVENTS IN : Lease agreement signed with Suez Environnement for 42,000 sq.m in the CB 21 Tower at La Défense On February 6, Foncière des Régions and Suez Environnement signed an agreement for the lease of 42,000 sq.m in the CB 21 Tower at La Défense, Europe s leading business district. The lease is for a period of 10 years and three months from The space will be delivered in two stages: 25% at the end of 2009 and 75% in mid The agreement was extended to 44,500 sq.m after the lease of an additional two floors : 4% of Foncière des Murs sold for 28m On 11 May 2009, 4% of the share capital of Foncière des Murs was sold for a total of 28m. Foncière des Régions shareholding in Foncière des Murs now stands at 25.1% : The equity of Foncière des Régions was boosted by 187m after 87% of shareholders choose to receive their dividend in shares Foncière des Régions announced that its equity had increased by 187m after 87% shareholders agreed to receive their dividend in shares. The issue price for shares reissued as payment for the dividend was set by the shareholders meeting of 24 April at 34 at 95% of the average closing price for the 20 trading days prior to this meeting, less the net dividend of This measure led to the creation of 5,489,897 new shares, which began trading on 29 May Upon completion of the operation, the company s share capital consisted of 46,578,028 shares and the cash dividend was limited to 28m : The shareholding of Foncière des Régions in Foncière Europe Logistique rose after a 50m increase in capital carried out by Foncière Europe Logistique in June 2009 Having invested 47m, the shareholding of Foncière des Régions rose from 60% to 67% after a 50m increase in capital carried out in June by Foncière Europe Logistique. The total increase in capital of 51,112,884 meant 25,556,442 new Foncière Europe Logistique shares were issued at a unit price of : New strategic agreement between Foncière des Régions and France Telecom Foncière des Régions and France Telecom signed an agreement to consolidate their real estate partnership that involves 173 buildings (appraisal value of 887m at the end of 2008) owned by Foncière des Régions and tenanted by France Telecom. Following on from the original 2008 agreement which related to 155 buildings and provided for lease extensions and sales of buildings, the new agreement provides for the continued adaptation of the buildings tenanted by France Telecom to the company s present and future needs. This arrangement is evidence of a long-standing real estate partnership with France Telecom and demonstrates the ability of Foncière des Régions to provide property solutions that add value for owners and tenants alike. 2 FONCIÈRE DES RÉGIONS

7 2009 Management Report 1 The agreement can be divided into three parts: Š New leases: During the second half of the year, Foncière des Régions and France Telecom signed new lease agreements for 108 buildings in Paris and other cities across France. These assets had an appraisal value of 754m at the end of 2008 and annualised rental income of 65m. The average duration of the new lease agreements is seven years, whereas the previous agreements were two years from maturity Š Sale of buildings: France Telecom elected to buy 65 buildings mainly outside Paris for 133m Š More flexibility: When the new leases expire, France Telecom will be able to re-equip technical and service areas as it sees fit : Offices acquired at Vélizy During the third quarter of 2009, Foncière des Régions acquired the remaining 50% shareholding in the Vélizy Campus business park from Morgan Stanley for 46m (price includes subordinated loans). Foncière des Régions now controls 100% of the park, which was valued at 388 million as at 31 December The site comprises the headquarters of Dassault Systèmes (56,000 m², lease fixed until 2020, HQE building), buildings leased to Thalès and Alstom (83,000 m²) and medium-term development potential of more than 100,000 m². This acquisition was carried out based on a net yield of 7.7%. The average remaining duration of the leases is 8.5 years : Changes at Foncière Développement Logements The General Shareholders Meeting of Foncière Développement Logements on 10 November 2009 approved bylaw changes to transform the firm from an SCA (limited partnership) to an SA (limited company) with a Board of Directors. Foncière Développement Logements also launched a bid for the remainder of its own shares at a unit price of Finally, Foncière Développement Logements generated 112 million from real estate asset transfers at the end of December. Following these transactions, Foncière des Régions has a 35% stake in Foncière Développement Logements and the latter company is no longer fully consolidated by Foncière des Régions. 15 December 2009: Operation growth and strengthening of shareholders equity On 14 October, Foncière des Régions announced the acquisition of five office buildings for 267 million (paid for by issuing 3.9 million new shares) and proposed a free allocation of equity warrants to shareholders on 16 December This free allocation of equity warrants enabled shareholders in Foncière des Régions to purchase new shares in the company for a total of 200 million, at the same price as the shares issued to acquire the assets. The acquired portfolio comprises five high-quality office buildings covering 41,600 m², 27,420 sq.m of which is in Paris (three buildings constituting 74% of the value of the portfolio), 11,290 sq.m in Issy-les-Moulineaux (one building 24%) and 2,890 sq.m in Lyons (one building 2%). The portfolio has a net yield of 7%, an average remaining lease of 3.2 years and a vacancy rate of 3%. The rental income of the portfolio is 459 per sq.m per year, in line with market values. The transaction was approved by the Extraordinary General Shareholders Meeting of 15 December Italy Office: Buyback of IMSER bonds During 2009, Beni Stabili bought back several tranches of its IMSER debt (securitised debt) at significant discounts. These buybacks resulted in a net financial gain of 30.7 million. This can be broken down into financial income ( 41 million) and fair value adjustment of hedging instruments attached to the tranches bought back ( 10.3 million). Italy Office: Comit Fund dispute On 17 July 2009, Beni Stabili received notification from the Italian tax authorities regarding a reappraisal of registration fees in the amount of million, plus late interest of 8.7 million, in connection with its 2006 acquisition of Immobilière Fortezza Srl from the employee pension fund of Banca Commerciale Italiana (Comit Fund). The Comit Fund received the same notification Reference Document3

8 On December 31, 2009, Beni Stabili made a provision of 42 million in its accounts and set up a guarantee by depositing the sum of 59.6 million in its bank account. Beni Stabili and the Comit Fund, which are considered jointly and severally in this dispute, contested this notification before the Italian courts, which upheld the position of the Italian tax authorities on 10 February Following this judgment, Beni Stabili appealed the decision and a payment of 58 million was made. The appeal is ongoing and does not stay the order. Service sector: New added-value agreement signed with Accor The strong performance of hotel industry share prices in the second half of 2009 was due largely to the agreement between Accor and Foncière des Murs regarding a revision of hotel portfolio rental income in 2017 and 2018 after the first lease period. As part of the agreement, Foncière des Murs will finance 41 million of renovation work over the next five years to improve the Accor hotels owned by Foncière des Murs. 4 FONCIÈRE DES RÉGIONS

9 2009 Management Report BUSINESS ANALYSIS Unless otherwise specified, all valuation items in this section are shown at fair value. A. TURNOVER Consolidated ( millions) Change (%) Group share Change (%) Change (%) on a like-for-like basis % of rental income France Office France Telecom % % 4.5% 29.8% EDF % % 0.4% 5.6% Others % % 2.6% 13.9% France Office subtotal % % 5.8% 49.3% Italy Office Long-term portfolio % % 4.1% 24.1% Dynamic portfolio % % 1.0% 5.3% Development portfolio % % 27.2% 0.1% Italy Office subtotal % % 3.6% 29.6% Office total % % 5.0% 78.9% Service sector Hotel % % 7.7% 5.7% Health % % 2.1% 1.3% Restaurants % % 2.5% 1.3% Leisure % % 6.4% 1.5% Service sector subtotal % % 3.4% 9.9% Logistics and business premises France Logistics % % 5.2% 6.0% Germany Logistics % % 7.3% 1.0% Light industrial premises % % 1.1% 2.2% Garonor % % 1.4% 1.9% Logistics subtotal % % 3.5% 11.2% Total rental income % % 3.3% 100.0% Foncière Développement Logements % % Service and other income % % Total turnover 1, % % 3.1% Consolidated rental income increased by 3.3% on a like-for-like basis, due largely to indexation on the EDF and France Telecom portfolios. Office rental income increased slightly and represented more than two thirds of the group share of rental income. The 3.7% reduction in rental income was due largely to disposals and changes to structure (FdM 4%) Reference Document5

10 B. SCHEDULE OF GROUP SHARE RENTAL INCOME ( millions) Maturity of leases * By end of lease In % of total % % % % % % % % % Beyond % millions % * Based on annualised rental income at 31/12/09 The average remaining lease duration was 6.1 years at 31 December 2009, unchanged from a year earlier. The renegotiation of France Telecom leases in the second half of the year helped to stabilise the remaining duration. C. BREAKDOWN OF GROUP SHARE RENTAL INCOME Breakdown by main tenants Annualised rental income Group share Surface area (m²) Number of properties ( millions) 2009 % 2009 % 2009 % France Telecom % 1,015, % % Telecom Italia % 1,279, % % Accor % 929, % % EDF % 292, % % Banca Intesa % 100, % 7 0.5% Dassault Systèmes % 56, % 1 0.1% Others % 3,916, % % Total rental income % 7,590, % 1, % 6 FONCIÈRE DES RÉGIONS

11 2009 Management Report 1 Geographical breakdown Annualised rental income Group share Surface area (m²) Number of properties ( millions) 2009 % 2009 % 2009 % Paris % 443, % % Ile-de-France % 1,932, % % Rest of France % 2,661, % % Milan % 347, % % Rome % 176, % % Others % 2,028, % % Total rental income % 7,590, % 1, % D. DISPOSALS IN 2009 ( millions) Disposals Disposal agreements Total Profit vs. appraisal values at 31/12/08 Yield France Office 100% % 8.1% Italy Office 100% % 2.5% Group share % 2.5% Office total 100% % 5.9% Group share % 6.3% Service sector 100% % 6.9% Group share % 6.9% Logistics and light industrial premises 100% % 7.5% Group share % 7.5% Total 100% % 6.0% Group share % 6.3% FDL France 100% % 3.8% FDL Germany 100% % 6.0% Residential total 100% % 4.6% Group share % 4.6% Total inc. Foncière Développement Logements 100% ,046,7 0.8% 5.7% Group share % 6.2% 2009 Reference Document7

12 E. PORTFOLIO Portfolio valuation and change ( millions) Value 31/12/08 Value 31/12/09 Value 2009 Group share Change 6 months Change in portfolio on a like-for-like basis Change 12 months Rate effect 12 months Rate effect 12 months Yield excl. TD 31/12/08 Yield excl. TD 31/12/09 France Office 3,814 4,076 4, % 3.1% 2.9% 6.0% 8.1% 8.3% Operational portfolio 3,178 3,432 3, % 0.6% 2.9% 2.4% 8.1% 8.3% Development portfolio % 21.1% Italy Office 4,430 4,220 3, % 3.5% 0.6% 4.1% 5.2% 5.4% Operational portfolio 4,152 3,915 2, % 3.2% 0.6% 3.8% 5.2% 5.4% Development portfolio % 7.6% Office total 8,245 8,296 7, % 3.3% 1.9% 5.2% 6.5% 6.8% Service sector 3,230 2, % 5.6% 2.5% 3.0% 6.4% 6.6% Logistics 1,341 1, % 11.7% 1.5% 10.1% 8.1% 9.0% Car parks % 5.7% N/A N/A N/A N/A Tertiary portfolio 13,067 12,669 8, % 3.6% 1.2% 4.8% 6.6% 6.9% Companies consolidated using the equity method * Total 13,258 13,210 9,286 Residential 3,477 0 Consolidated total 16,735 13,210 Group share total 10,375 9,286 * Foncière Développement Logements was consolidated using the equity method in 2009 The value of Foncière des Régions portfolio at 31 December 2009 was 9,286m, compared with 10,375m a year earlier. The change was -3.6% on a like-for-like basis over the whole year and stabilised in the second half. This stabilisation was due essentially to the France Office segment, which increased by 1.8%, underlining the importance of the asset management work carried out during the period (agreement with France Telecom, negotiations with EDF). F. BREAKDOWN OF GROUP SHARE PORTFOLIO AND OTHER FEATURES Breakdown by location and by main tenants ( millions) 2009 % Paris 1, % Ile-de-France 2, % Rest of France 1, % Milan 1, % Rome % Others 1, % Group share portfolio total * 8, % * Net of car parks 8 FONCIÈRE DES RÉGIONS

13 2009 Management Report 1 ( millions) 2009 % France Telecom 1, % Telecom Italia 1, % Accor % EDF % Banca Intesa % Dassault Systèmes % Others 4, % Group share portfolio total * 8, % * Net of car parks Other portfolio features Vacancy rate * (%) Remaining lease duration (years) Rental income in 2009 (avg./m2) Value in 2009 (avg./m2) ( ) ( ) France Office 0.9% 5.3% ,928 Italy Office 2.4% 2.0% ,935 Logistics and light industrial premises 8.5% 12.3% Service sector 0.0% 0.0% ,878 Total (group share) N/A N/A ,609 * Financial vacancy at year-end 2009 Reference Document9

14 1.3. ANALYSIS OF OPERATIONS BY BUSINESS SEGMENT A. OFFICE MARKET IN FRANCE AND ITALY Office market in France 1. The office market in Ile-de-France Despite a better-than-expected final quarter, 2009 was a disappointing year for office property in Ile-de-France. 1.8 million sq.m were marketed, down by 24% compared with The mid-sized market between 1,000 sq.m and 5,000 sq.m resisted well, dropping by just 11%, while the large spaces saw their take-up slump by 35%. Boosted by the delivery of projects started before the crisis and by a negative net absorption, immediate supply was up 32% on 2008 at 3.6 million m². The vacancy rate of Ile-de-France offices remained reasonable, though, at 6.8%. The almost total cessation of speculative new project launches since 2008 caused a significant drop in certain future supply and pointed to a lack of supply above 5,000 sq.m as well as a deterioration in supply quality from Rent continued the slide that began mid The average rental income in Ile-de-France was 303/m²/year excluding taxes and charges for new, restructured or renovated spaces ( 6%) and 226/m²/year excluding taxes and charges ( 5%) for second-hand spaces. This fall in rent began in the central and western parts of Paris at the end of 2008, and started to spread to the suburbs in Some landlords chose to keep their rent high and offer major incentives such as a 1.5- or 2-month exemption per year of commitment. For small and mid-sized spaces, however, headline and market rents began to converge at the end of As it was first to experience a drop in rental income, the market in Paris was able to market 550,000 sq.m in 2009 and limit the reduction in take-up to just 6% compared with At 5.8%, the vacancy rate in Paris remained relatively low despite major deliveries in the 13th and 15th arrondissements in the fourth quarter of It was a tough year for the La Défense district. The 174,100 sq.m marketed in 2009 was down 35% compared with the previous year. There were only six transactions for spaces above 5,000 sq.m in Immediate supply rose by 22% to 150,900 m², but this increase caused the vacancy rate to climb to 4.6% in a difficult market. The scale of the certain future supply should provide La Défense with the high-quality spaces it currently lacks, but it is not guaranteed that this supply will continue to grow after Following years of uninterrupted growth, the average rental income for new, restructured or renovated spaces fell by 2% to 470/m²/year excluding taxes and charges. The average prime rent dropped by 16% to 401/m²/year because of the lack of deals involving high-quality spaces. 2. The office market in the rest of France Take-up in the rest of France was 1.1 million m², which was down by 11% on 2008 but remained around the level seen in 2002 and The resistance to the crisis of the markets in the rest of France remained varied according to their structure and the state of their inventory. In 2009, business was sustained essentially by the public and semi-public sectors. The markets driven largely by international and private companies were hit harder by the crisis. Take-up was down by 17% in Sophia-Antipolis, 34% in Aix-en-Provence, and 36% in Lyons. Despite the economic climate, clients remained keen on new offices, which represented 40% of take-up. Immediate supply rose to 1.9 million sq.m at the end of 2009, with new offices constituting 31%. Inventory quality is falling, and this trend is likely to continue in 2010 owing to more office vacancies and a reduction in certain future supply. The certain future supply deliverable in 2010 is down to an estimated 400,000 m². This downward trend is likely to steepen because it is the result of an almost total and sudden cessation of new projects in the rest of France that has now lasted more than a year. Unlike in Paris, rent has not really fallen away in the rest of France. In fact, the increase in economic benefits meant that headline rents could be left unchanged, or even slightly increased, while market rents were reduced. The average rental income for new and restructured spaces therefore rose by 0.6% in 2009 to 165/m²/year excluding taxes and charges. 10 FONCIÈRE DES RÉGIONS

15 2009 Management Report 1 3. The office investment market in France The 5.1bn that changed hands on the French office investment market in 2009 was the lowest amount since The investment market seems to have suffered most from the financial crisis, which came to a head in autumn 2008 and resulted in credit being almost totally switched off, reducing in turn the capital available for investing in real estate. Moreover, market values were trapped between big yield rises and falling rents, resulting in fewer commitments. The investment market was therefore very stagnant at the start of Faced with big price drops, many sellers came off the market, causing supply to dry up. At the same time, buyers were watchful, anticipating that property prices would continue to fall following a reversal in the rental market. Industry operators then altered the market by reintroducing a significant risk premium to restore investors appetite for office property. Trading volumes therefore gradually picked up ( 2.5bn in the fourth quarter alone). Faced with an uncertain economic climate, investors favoured high-quality securitised assets. This brought back an element of competitiveness and squeezed yield for the best buildings in the business districts of Paris and Lyons. The need for security logically favoured the established tertiary sectors. Paris was therefore first to benefit from renewed investment, representing 53% of the year s trading volumes. However, La Défense remained stagnant owing to the illiquidity of its assets. Having put up slightly more resistance at the start of the year to the market collapse, the rest of France generally benefited very little from renewed investment activity. With debt not readily available, the market was dominated by equity investors (largely insurers, openended funds, private individuals and REITs). Listed real estate investment companies (SIICs) continued to reduce their debts, even though they were more involved in acquisitions towards the end of the year. In terms of investment funds, only Germany s Spezial Funds were active. As a result, French and German operators, who have a significant presence in Paris, were dominant. Office market in Italy The Italian economy was hit by the financial crisis and shrank by 4.7% in It was a similar story for the property market. Real estate investment fell by 36% to 5.1bn in Most of the trading took place in the second half of the year, when the Italian market performed respectably. The demand for offices proved that businesses were looking to cut costs by finding cheaper premises, renegotiating leases or reducing the size of their current premises. 1. The rental market in Milan With 212,600 sq.m of office space marketed in 2009, Milan s annual trading volume fell by around a third. Economic uncertainty continued to restrict the needs of clients. The number of properties put on the market fell as a result of more lease renegotiations. The modern, practical offices located outside the centre of Milan but with good transport links were particularly appealing to clients, especially from a cost perspective. 605,000 sq.m of office space was vacant in Milan, up 14% year on year. The vacancy rate at 1 January 2010 remained respectable at 6.2%, compared with 5.5% a year earlier. The inventory suffered from a lack of highquality spaces, particularly in the centre of the city. Rent resisted fairly well: prime rent in Milan fell by 5.5% to 520 over the whole of 2009, but was unchanged from the third to the fourth quarter. 2. The rental market in Rome The amount of office space marketed in Rome halved in 2009 to 125,000 m². It was a good year for office tenants in the capital, who were able to negotiate or renegotiate favourable terms for their leases. The public sector remained a key player and helped to reduce the impact of fewer properties being put on the market. Demand centred mainly on the centre of Rome and the EUR district. Immediate supply remained high with 565,000 sq.m of space available a vacancy rate of 8.2%. The vacancy rate in the centre of Rome, however, remained very low. Prime rent fell by 4.5% in 2009 to 420. The lack of highquality space in the centre of Rome and the desire of some landlords to maintain their headline rents should help to stabilise rental income Reference Document11

16 B. FRANCE OFFICE The France Office assets of Foncière des Régions primarily derive from sale and lease back, including those of France Telecom, EDF, Eiffage, but also from development transactions, such as CB 21, Carré Suffren or Dassault Campus. Change in rental income 1. Rents billed ( millions) Surface area (m²) Number of properties 2008 rental income 2009 rental income Change (%) Change (%) on a like-for-like basis France Telecom 1,015,848 m² million million 9.5% 4.6% EDF 292,248 m² million 29.6 million 6.0% 2.4% Other offices 767,324 m² million 73.3 million 6.6% 11.7% Total 2,075,420 m² million million 5.0% 5.8% * Including 2.8 million FdR Hotels rents The change in rental income of million between 2008 and 2008 was primarily due to: Š the change in rental income on a like-for-like basis: million including 13.6 million tied to the indexing and 1.9 million of new leases/vacancies Š the vacancy by GAN of the CB 21 Tower and by EDF of Boulogne enabling their redevelopments: 6 million Š the 50% acquisition of Vélizy Campus in July 2009 having a 13 million impact on the 2009 rental income Š the 2008/2009 disposals: 37 million Š miscellaneous: million The change in rental income on a like-for-like basis of 5.8% is mainly due to: Š indexing Š significant re-rental work in 2009 in particular: O the lease signed with Média Régie in Issy-les Moulineaux for 1.1 million/year and 6 years firm O the lease signed with Europe 1 in Levallois for 2.4 million/year and 4.3 years firm O the lease signed with The Post Office in Lille for 1.1 million/year and 6 years firm Š significant vacancies: O vacancies of France Telecom buildings for 1 million/year O departure of Alstom of Meudon for 1 million/year 2. Annualised rental income ( millions) Surfaces Surface area (m²) Number of asset 2009 annualised rental income 2008 annualised rent Potential reversion France Telecom 1,015,848 m² million million 11.9% EDF 292,248 m² million 36.4 million 3.6% Other offices 767,324 m² million 62.3 million 1.,7% Total 2,075,420 m² million million 7.2% * Annualised rental income at year-end 12 FONCIÈRE DES RÉGIONS

17 2009 Management Report 1 Approximately 75% of the rental income is paid by major companies, such as France Telecom, EDF and Dassault. ( millions) Surface area (m²) Number of properties 2009 annualised rental income 2008 annualised rent Potential reversion Paris 239,950 m² million 62.5 million 5.7% Ile-de-France (outside Paris) 661,824 m² million 72.0 million 15.6% Region 1,173,646 m² million million 0.3% Total 2,075,420 m² million million 7.2% * Annualised rental income at year-end 3. Indexation The indexing effect is million. This is mainly the result of the indexing in the second quarter of 2008 (+8.9%) and third quarter 2008 (+ 10.5%). The office rental income was slightly sensitive to the negative indexing in the second quarter of 2009 ( 4.1%) and the third quarter of 2009 ( 5.8%). In fact, a large part of the leases signed with major users have an indexing ceiling protecting Foncière des Régions from negative indexing (between 0% and 1%). Rental income with floors represents more than 65% of annualised rental income. Moreover, following renegotiations with France Telecom, the rents are indexed at 35% based on a combination ICC/CPI and 65% to ICC. 4. Rental business Despite a difficult scenario, the rental business experienced significant successes in 2009, including: Š a 10-year, 3-month lease signed with Suez Environnement for 44,500 m², in which 12 floors were delivered in the fourth quarter of 2009 for a total rental income of 21.7 million, the balance being deliverable in June The residual surface areas are currently being placed on the market Š the leasing of 10,770 sq.m of offices at an average rental income of 175 million/sq.m on 14 sites for a total rental income of 1.9 million over a full year Under the asset management work and partnership with our major tenants, rents were secured and subject to lease renewals. This work made it possible to stabilise rental situations that may present risks of differences compared to market conditions. a. Partnership with France Telecom After signing in March 2008 an original agreement with France Telecom aimed at increasing the visibility on the portfolio (signing new 6- to 12-year leases on 31 million in rental income), Foncière des Régions signed on 22 June 2009 an agreement including in particular entering into new leases with France Telecom on 107 sites ( 65 million rental income). This agreement includes 3 aspects: Š the disposal of 133 million in properties to France Telecom Š the extension of leases granted by France Telecom for firm terms from 3 to 12 years ( 55 million of rental income), combined in certain cases with sales to France Telecom of parts of assets Š the real estate redevelopment of 15 properties for which France Telecom will have specific flexibility ( 10 million rental income) This win-win agreement enables Foncière des Régions to: Š defend the values of the portfolio while securing leases via their extension (confirmation of the longevity of France Telecom) Š contribute to the sales plan for the France Offices Š secure the cash-flow via the extension of the residual terms of the leases of the portfolio (+ 2.2 years of residual term on the France Telecom portfolio, for a residual term of 5.2 years at year-end 2009) Š optimise the real property value of the portfolio, which includes certain high-quality properties, while promoting a harmonious coexistence with the technical systems dedicated to telecommunications Thanks to the successive agreements signed with France Telecom between 2007 and 2009, 80% of the leases were renegotiated (in % of rental income) Reference Document13

18 b. Partnership with EDF The leases signed with EDF upon outsourcing their portfolio expire at the end of October Correspondingly, for several months, Foncière des Régions has undertaken negotiations with EDF (and ERDF, tenant occupying a certain number of sites) global or individual negotiations in order to anticipate this expiration and optimise the real estate strategy property by property, on the 32 properties remaining in the portfolio. As of this date, a certain number of agreements have been reached, making it possible to reconcile the objectives of asset valuation and the tenant s needs: lease extensions (between 3 and 6 years) have been negotiated on 17 properties, representing close to half of the rental income of the EDF portfolio, bringing the average residual maturity of the leases to 3.4 years at year-end The extensions were granted against granting counselling, in particular work aiming to improve the energy performance of the buildings. The year 2010 should make it possible to finalise agreements with EDF and ERDF on the second part of the assets, and anticipate specific redevelopment strategies for properties with a buyer potential and that EDF may be required to vacate. 5. Schedule and vacancy a. Leases schedule France Office rental income by the expiry date of firm leases in progress is broken down as follows: Maturity of leases * By end of lease In % of total % % % % % % % % % Beyond % millions % * Based on 2009 annualised rental income The average residual term of the leases is 4.8 years, compared to 3.7 years at year-end The EDF leases that were not renegotiated and signed on 31 December 2009 will expire in Concerning the France Telecom properties, following the agreement signed in June, the lease expiries are spread out between 2012 and This increase is explained mainly by the renegotiation of the leases with these two partners offset by the loss of 12 months firm term of the leases not renegotiated. b. Vacancy rate and type (%) France Telecom 0.1% 0.4% EDF 0.0% 0.0% Other offices 3.5% 6.3% Total 0.9% 2.5% Note: financial vacancy at year-end excluding works The financial vacancy at 31 December 2009 amounted to 2.5% and 5.3% including Carré Suffren. The change is explained mainly by the vacating of: Š 6,000 sq.m in Diors, near Châteauroux Š 3,122 sq.m of offices by France Telecom on sites at Montpellier and Sète (properties with preliminary sales agreements) At 31 December 2009, the main vacant surface areas are: Š 25,000 sq.m of vacancy in Carré Suffren Š 9,100 sq.m of vacancy in Meudon Š 17,480 sq.m vacancy in Diors, near Châteauroux 6. Unpaid amounts ( millions) At year-end 2008 At year-end 2009 In % of the annualised rental income 0.50% 0.69% By value 1.2M 1.9M Unpaid receivables have increased slightly since 30 June 2009 to 0.69% of the annualised rental income, due in particular to two main rental disputes in the process of being paid ( 0.7 million). 14 FONCIÈRE DES RÉGIONS

19 2009 Management Report 1 Portfolio 1. Disposals ( millions) Disposals Disposal agreements Total Profit vs. appraisal values at 31/12/08 HD Yield France Telecom million 31.2 million million EDF 0.0 million 0.0 million 0.0 million Other offices 76.6 million 21.7 million 98.3 million Total million 52.9 million million 4.3% 8.1% During financial year 2009, Foncière des Régions entered into agreements for the sale of 4.4 million in office properties, including 133 million under the agreement with France Telecom. The sales and preliminary agreements record overall capital losses of 18.6 million or -4.3% compared to the appraisal value at 31 December This margin is in line with the adjustment of values seen over financial year They were realised with an average yield of 8.1%, yield close to the average rate of the France Offices assets. Three significant transactions are to be noted: Š a building leased to France Telecom in Paris Bonne Nouvelle for 87 million Š a building leased to France Telecom in Paris Diderot for 44 million Š a real estate complex in Lyon for 30.1 million 2. Acquisitions During the third quarter of 2009, Foncière des Régions bought from Morgan Stanley the remaining 50% shareholding in the Vélizy Campus business park. Foncière des Régions now controls 100% of the park, which was valued at 388 million as at 31 December The site comprises the headquarters of Dassault Systèmes (lease fixed until 2020, HQE building), buildings leased to Thalès and Alstom and medium-term development potential of more than 100,000 m². This acquisition was carried out on the basis of a net yield of 7.7 %, or rental income of 30 million. The average residual duration of the leases to be financed was 8.5 years. During the fourth quarter, Foncière des Régions purchased from Groupama and Predica the 5 office buildings in the amount of 267 million, totalling close to 42,000 sq.m at a rate of 7% or a rental income of 18 million. These assets are located 74% in Paris, 24% in Issy-les-Moulineaux, the balance being located in Lyons. These buildings are leased to large tenants like the SNCF, Cisco or Chloé and the residual terms of the leases are 3.5 years. 3. Development plans a. Deliveries of assets Carré Suffren this 25,000 sq.m building located close to the Eiffel Tower was delivered during the second quarter. It is in the process of being marketed. b. Assets under development CB 21: A 10-year 3-month lease effective 1 July 2010 was signed in February 2009 with Suez Environnement for about 42,000 m², extended to 44,500 sq.m (2 additional floors) by a lease addendum signed in January 2010 (i.e. 65% of the surface areas). The total rental income amounts to 21.7 million for the first three years of the lease, 22.5 million subsequently. The works started during January The delivery of 12 floors to Suez Environnement took place in the fourth quarter of 2009, and the delivery of the balance shall be carried out at the end of June Reference Document15

20 4. Asset valuation a. Change In assets ( millions) 2008 Value excl. TD Change in value Acquisitions Disposals Invest Value excl. TD Total 3,814 million 157 million 653 million 378 million 144 million 4,076 million b. Geographical breakdown ( millions) Geographical breakdown 2009 Value excl. TD % Paris 1,335 33% Ile de France 1,667 41% Regions 1,075 26% Total 4, % c. Change in Assets on a like-for-like changes: Over the second quarter, the value of the Bureaux France assets in operation is increasing 2.2% on a like-for-like basis: the compression of the capitalisation rates, tied to the lease negotiations over the period (mainly agreement with France Telecom), explains the major part of this change. ( millions) Consolidated 2008 value excl. TD Consolidated 2009 value excl. TD 2009 Group share value excl. TD Var. 6 months Change in portfolio on a like-for-like basis Var. 12 months Rental income effect, 12 months Rental income effect, 12 months Yield excl. TD Yield excl. TD 31/12/09 France Telecom 1,925 1,666 1, % 4.0% 7.6% 3.5% 8.2% 8.5% EDF % 2.6% 0.0% 2.5% 9.1% 9.3% Other offices 861 1,594 1, % 8.6% 2.7% 5.9% 7.5% 7.4% Total in operation 3,188 3,618 3, % 0.6% 2.9% 2.4% 8.1% 8.3% Assets under development * % 18.4% Total 3,814 4,076 4, % 3.1% 2.9% 2.4% 8.1% 8.3% * CB 21, Boulogne and Bagnolet The deterioration of market conditions was partially offset by: Š a master agreement signed with France Telecom and current negotiations with EDF, which demonstrate the strong longevity of our large tenants and the quality of our large account partner relations (renegotiation of leases, re-rental, etc.) Š already high yield rates on all of the portfolios Š the low average size of Foncière des Régions properties, which confer upon them certain liquidity in a market in financial crisis, which was confirmed by the strong performance of our assignment prices for the year Š a strong lease effect for the year in particular tied to ICC (mainly France Telecom and Eiffage) 16 FONCIÈRE DES RÉGIONS

21 2009 Management Report 1 C. ITALY OFFICE Founded in 1904 and listed on the Milan Stock Exchange since 1999, Beni Stabili is among the top Italian listed real estate companies. The portfolio of Beni Stabili is comprised primarily of offices located in cities in North and Central Italy, in particular Milan and Rome. Change in rental income 1. Rents billed ( millions) Surface area (m²) Number of properties 2008 rental income 2009 rental income Change (%) Change (%) on a like-for-like basis Long-term portfolio 1,476, % 4.1% Dynamic portfolio 616, % 1.0% Subtotal 2,092, % 3.5% Development plans 87, % 27.2% Total 2,180, % 3,6% The change in rental income between 2008 and 2009 of million is primarily due to: Š Indexing (CPI) Š Rentals and re-rentals +4.9 Š Acquisitions +0.6 Š Disposals 5.7 Š Vacant properties for sale or in renovation 2.1 Š Renegotiations Annualised rental income ( millions) Surface area (m²) Number of properties 2009 annualised rental income Change (%) Potential reversion Long-term portfolio 1,476, % Dynamic portfolio 616, % Subtotal 2,092, % 10.5% Development plans 87, ,8 31.0% n/a Total 2,180, % n/a * Annualised rental income at year-end ( millions) Surface area (m²) Number of properties 2009 annualised rental income Change (%) Potential reversion Milan 347, % Rome 176, % Others 1,569, % Total 2,092, % 10.5% * Annualised rental income at year-end excluding developments 2009 Reference Document17

22 ( millions) Surface area (m²) Number of properties 2009 annualised rental income Change (%) Potential reversion Telecom Italia 1,279, % Others 813, % Total 2,092, % 10.5% * Annualised rental income at year-end excluding developments Telecom Italia, the main tenant, represents 56% of the rental income from operating properties. 3. Indexation The annual adjustment of rents due to indexing is calculated by taking 75% of the increase in the Consumer Price Index (CPI) applied on each anniversary of the contract signing date. The following table presents the change in CPI in Italy during 2009: % Jan. 09 Feb. 09 March 09 Apr. 09 May 09 June 09 July 09 Aug. 09 Sep. 09 Oct. 09 Nov. 09 Dec. 09 Average CPI 1.5 % 1.5 % 1.0 % 1.0 % 0.7 % 0.4 % 0.1 % 0.2 % 0.1 % 0.2 % 0.7 % 1.0 % 0.7% 4. Rental business In 2009, the following asset management activities were carried out: ( millions) Number of leases Surface area (m²) Annualised rental income New leases and re-rentals 45 31, Schedule and vacancy a. Leases schedule Italy Office rental income by the expiry date of the firm leases in progress is broken down as follows: Maturity of leases * By end of lease In % of total % % % % % % % % % % Beyond % millions % * Based on 2009 annualised rental income 18 FONCIÈRE DES RÉGIONS

23 2009 Management Report 1 The leases expiring beyond 2019 are basically tied to Telecom Italia. The residual term of the leases reached 8.5 years at 31 December b. Vacancy rate and type Spot financial vacancy at 31 December 2009 reached 2.1% for the Long-Term portfolio, while it was 2.4% at 31 December This contraction is explained by the improvement in the financial vacancy of the properties operating and in the process of light renovation. 6. Unpaid amounts ( millions) At year-end 2008 At year-end 2009 In % of the annualised rental income n.a. 3.0% By value n.a. 6.4 Portfolio 1. Disposals On 31 December 2009, Beni Stabili disposed of 29 properties at a sale price of million and signed 4 preliminary agreements for million, the total amounting to millions (including the Corso Mateotti property). The sales margin compared to the 31/12/08 appraisal value reached + 4.6%. The average yield rate from the sales is 2.5%. 2. Acquisitions In November 2009, Beni Stabili acquired a property located at Via Messina in Milan, part of the Procaccini business centre. This office property, with a surface area of 7,100 sq.m (including the car parks) was subject to a sell and leaseback transaction to BTicino, the seller, through a lease signed for years, at a yield close to 7%. The purchase price was 23 million. This acquisition is financed by the raising of debt of approximately 14.7 million, the balance being financed by equity invested by Beni Stabili. For information, Beni Stabili was already the owner of one of the 4 towers comprising this business centre. In December 2009, a purchase commitment was entered into to purchase the Il Ducale shopping centre, located in Pavia, offering a surface area of about 16,000 m². This purchase will be made before end of June 2011 via the LGD joint venture, held 50% by Beni Stabili and 50% by the company LGD for a price of 46 million excluding transfer fees. 3. Development projects a. Deliveries of asset Two significant development plans were delivered during the financial year: Š Rozzano Strada 7: completion of the renovation of this office building on the periphery of Milan, for a surface area of 11,628 sq.m and a total cost of 30.8 million Š Milan Tower B: Heavy restructuring of the Garibaldi Tower near one of the main Milan train stations. The works were completed beginning of 2010 for a surface area of 16,181 sq.m and a net cost of 90 million 4. Assets under development Delivery Budget ( millions) Surface area (m²) Milan Rozzano BOOK ,628 Milan Garibaldi Tower B 31/01/ ,181 Milan Galleria del Corso 01/04/ ,750 Milan via Ripamonti 30/06/ ,914 Milan via Schievano 30/06/ ,292 Padua via Zabarella 30/09/ ,513 Total Development portfolio , Reference Document19

24 5. Asset valuation a. Asset valuation ( millions) 2008 Value excl. TD at 31/12/2008 Yield Change in value Acquisitions Disposals Investments Reclassification 2008 Value excl. TD at Yield 31/12/2009 Long-term portfolio 3, % , % Dynamic portfolio 1, % % Total excluding developments 4, % , % Development plans % % Total 4, % , % * In appraisal value ( millions) Geographical breakdown 2009 Value excl. TD % Milan 1,752,3 41.5% Rome 409,5 9.7% Others 2,058,1 48.8% Total 4,220, % ( millions) Breakdown by tenant 2009 Value excl. TD % Telecom Italia 1,888,7 44.8% Others 2,331,2 55.2% Total 4,220, % b. Change in Assets on a like-for-like changes: The value of Beni Stabili s portfolio contracted by 3.5% on a like-for-like basis. While the Long-Term and Dynamic portfolio experienced similar changes with a decrease of 3.2%, the Development portfolio experienced the biggest change (- 7.5%), tied to the more significant uncertainties on this type of project. ( millions) Consolidated 2008 value excl. TD Consolidated 2009 value excl. TD Change 6 months Change in portfolio on a like-for-like basis Change 12 months Rental income effect, 12 months Rate effect 12 months Yield excl. TD Yield excl. TD 31/12/09 Long-term portfolio 3, % 3.1% 1.2% 4.3% 5.7% 6.0% Dynamic portfolio 1, % 3.4% 2.5% 1.0% 3.8% 3.7% Total excluding developments 4, , % 3.2% 0.6% 3.8% 5.2% 5.4% Development plans % 7.6% Total 4, , % 3.5% 20 FONCIÈRE DES RÉGIONS

25 2009 Management Report 1 D. SERVICE SECTOR Foncière des Murs, 25.1%-owned by Foncière des Régions, is a Listed Real Estate Investment Company (SIIC) specialised in business premises especially in the hotel, restaurant, health and leisure sectors. The company s investment policy gives preference to partnerships with leading partners in their business sector, in order to offer shareholders recurring yields. Change in rental income 1. Rents billed ( millions) Surface area (m²) Number of properties 2008 rental income 2009 rental income Change (%) Change (%) on a like-for-like basis Hotel 929, % 6.9% Health 216, % 3.2% Restaurants 72, % 2.6% Leisure 372, % 6.1% Total 1,591, % 2.5% The consolidated rental income of Foncière des Murs amounted to million for 2009, a decrease of 1.7 % compared to This decrease (- 3.5 million) is explained by: Š the impact of the purchases realized in 2008 and 2009 that generate a rental income of million and in particular: o in the leisure sector, the purchase of the Sunparks de Kempense Meren village, of 3 Jardiland garden centres, and the extension of a Sunparks de Schorrepolder village for a total of 2.7 million o in the restaurants sector, the purchase of 4 Quick for 0.4 million o the impact of the increases in rental income tied to the works realised on the Sunparks and Club Med portfolios, which generate rental income of million Š the impact of the indexing of rent on the health, restaurants and leisure portfolios for million Š the drop in rental income on the hotel sector tied to the decrease in turnover recorded by the Accor hotels ( 6.9 million) Š the impact of the disposals, in May 2009, of four nursing homes and hotels held by the Italian fund, for 2.4 million 2. Annualised rental income a. Breakdown by business segment ( millions) Surface area (m²) Number of properties 2009 annualised rental income (%) Hotel 929, % Health 216, % Restaurants 72, % Leisure 372, % Total 1,591, % * Annualised rental income at year-end 2009 Reference Document21