2008 ACTIVITY REPORT FONCIÈRE PARTENAIRE

Transcription

1 2008 ACTIVITY REPORT FONCIÈRE PARTENAIRE

2 CONTENTS LONG-TERM 02_09 A STRATEGY BUILT ON SOLID FOUNDATIONS Message from Charles Ruggieri, Chairman of the Supervisory Board 04_05 Discussion with Christophe Kullmann, Chief Executive Officer 06_07 Key figures & events of _09 COLLABORATIVE 10_17 LONG-TERM PROPERTY PARTNERSHIPS WITH LEADING COMPANIES Assisting the property strategies of major companies 12_13 Developing innovative solutions to the benefit of our partners 14_15 Planning today for the property of tomorrow 16_17 COMPLEMENTARY 18_25 A DIVERSE RANGE OF PROPERTIES A targeted European strategy 20_21 Foncière des Murs: a leader in the service-sector property market 22 Foncière Europe Logistique: a key player in logistics property 23 Foncière Développement Logements: a European residential property company 24 Parcs GFR and Urbis Park: dynamic challengers 25 RESPONSIBLE 26_31 A PROGRESSIVE AND LONG-TERM APPROACH Human resources: investing in human capital 29 Environmental performance: continual assessment and improvement 30 Patronage: being involved in community life 31 LEGAL AND FINANCIAL INFORMATION 32_39 Corporate governance 34_35 Shareholder information 36_37 Financial results 38_39

3 PROFILE Property partner A property company specialising in offices Foncière des Régions is a key player in the office real-estate sector and has major companies as tenants: France Télécom, EDF, Accor, Suez Environnement, Dassault Systèmes, Thales, Telecom Italia, IBM, etc. European property company Foncière des Régions is a real-estate player at a European level. Foncière des Régions is present in France and Italy and also operates in Germany and Belgium. Diverse property company Foncière des Régions also owns investments in specialised real-estate sectors: logistics, service-sector and residential property and car parks. Expert property company The growth of Foncière des Régions is built on values which underpin its strength and its reputation: diverse investments, its teams knowledge, long-term rental and financial partnerships, creating portfolio value, advice and assistance to tenants. Independent property company Listed on the stock exchange, Foncière des Régions is one of the leading property companies on a European level. With a solid and structured shareholder base including Batipart, Delfin and institutional shareholders. Foncière des Régions is listed on Euronext Paris compartment A and is eligible for SRD. Foncière des Régions shares are included in the SBF 120, Euronext IEIF SIIC France, Eurolist Euronext Mid 100 and EPRA indices. _01

4 LONG-TERM A STRATEGY BUILT ON SOLID FOUNDATIONS A culture of rental and financial partnerships, a solid shareholder base, employees expertise and creating portfolio value. The values and fundamentals on which Foncière des Régions has built its growth guarantee its reputation and long-term survival.

5 LES ACURIALES OFFICE BUILDING_LILLE (Nord-Pas-de-Calais). A property company specialising in offices, Foncière des Régions tenants include the major French and international companies. Its portfolio comprises buildings whose location and quality make them valuable rental assets. 02 _03

6 LONG-TERM MESSAGE FROM CHARLES RUGGIERI CHAIRMAN OF THE SUPERVISORY BOARD The financial crisis had led to a widespread economic crisis whose effects will be felt over the coming years. The Lehman Brothers collapse was a major influence on the development of the credit crunch. It caused both a loss of confidence among market players and widespread adoption of recovery packages around the world, whose positive effects should be fully felt on the real economy over the coming two to three years. Stock markets responded with a further fall in stock prices which did not spare the listed real-estate sector. This drop was more or less standard across the board, whatever the values, and was closely linked to developments in the financial sector. This was a symptom of an overstretched, disorientated market. Charles Ruggieri, Chairman of the Foncière des Régions Supervisory Board Alarmist messages emphasized the risks property companies could face: a rise in vacancy and non-payment rates, difficulties retaining tenants exceeded, bank covenants, inability to refinance transactions or raise debt and falling values. These risks must be viewed in the perspective of the very nature of property investment and of our company in particular. They did not occur in August 2007 or in September They are a normal part

7 of property investment and are governed by cycles. That is precisely why property investment companies implement policies of management through diversification, rotation of assets, securing of flows and adaptation of the pace of development policies. It is obviously appropriate to adapt the pace of growth to the current environment, but also to stay on course, since Foncière des Régions activities are producing positive results which demonstrate the resilience of its model. Real estate is a highly asset-focused industry with long cycles, presenting significant inertia, especially in France and Italy, due to the current lease systems. When I look at the foundations of Foncière des Régions operations, I can see that they are very sound and that expected cash flows offer a high level of security. This is because Foncière des Régions chose to favour sale and leaseback for its main tenants, whose operating flows are themselves largely secure, for instance the supply of electricity and power, telecoms and mid-range hotels. Its financial policy also favoured security and visibility, establishing long-term links with top-level banking partners in the context of medium-term investments, largely covered against currency exchange risk. Foncière des Régions also has a solid and diverse shareholder base which is fully committed to the Company s long-term value-creation strategy. All these advantages should enable Foncière des Régions to come out of this crisis ready to play its part in the next market phase which will accompany the recovery of financial flows and then the broader economy. Foncière des Régions is a European property company specialising in offices. This strategic position meets a long-term need in the European economy. Foncière des Régions is maintaining its strategic course with vigilance in the current economic climate. Foncière des Régions is a European property company specialising in offices. This strategic position meets a long-term need in the European economy. Foncière des Régions is maintaining its strategic course with vigilance in the current economic climate. 04 _05

8 LONG-TERM DISCUSSION WITH CHRISTOPHE KULLMANN CHIEF EXECUTIVE OFFICER Increase in per-share cash flow, rental revenues up and a high occupancy rate: Foncière des Régions achieved good results for In 2009, the Company will reinforce its property partnerships with tenants was marked by a serious financial crisis. How has this affected your results? Our 2008 results are good and confirm the long-term, solid nature of our strategy. In 2008, Foncière des Régions achieved an increase of 2.3% in recurrent cash flow per share, and a 17% increase in rental revenues. These good results, combined with the high occupancy rate of our buildings, are a sign of the quality of our portfolio and our management. How have your asset values been affected? The fall in the value of our assets represents, on average, less than 5% of their total value. The strong resilience of these valuations is the result of significant asset management work as well as the intrinsic nature of our portfolio: long leases, low vacancy, quality tenants, highreturns, geographic diversity around France, etc. Christophe Kullmann, CEO of the Foncière des Régions What impact has the crisis had on Foncière des Régions? At a financial level, we are seeing a revival in rates of return and a reduction in availability of bank loans. Nevertheless, the refinancing obtained for the CB 21 Tower is a good example: this successful loan demonstrates that the use of bank

9 financing works well provided the underlying properties are good. Finally, I believe the crisis will also have consequences for our sector, particularly in terms of associations between property investment companies and the creation of new investment vehicles. Your share price fell sharply during What conclusions can be drawn from this? It should be remembered that there has been a significant decline over the past year in the stock market generally. Real estate was identified as an at risk sector and investors have shown significant defiance in relation to property investment values. Foncière des Régions share price has performed better overall than the SIIC/IEIF index (- 52%) and the CAC 40 index (- 40%). While the share price is, of course, an important element, it is only part of the long-term, secure strategy we are pursuing. What were the key events of 2008 for Foncière des Régions? From a property perspective, I could mention the completion of the Dassault Systèmes Campus transaction, 60,000 sqm of HQE (High Environmental Quality) offices. We also acquired two office portfolios from Eiffage and Etde for nearly 110 million. In terms of rentals, a 10-year lease was signed at the start of 2009 with Suez Environnement, for 42,000 sqm in the CB 21 Tower at La Défense. Meanwhile sales achieved an average of 8% above appraisal values Foncière des Régions is a property company specialising in offices. Our advantage comes from being a property partner to major companies. from the end of December 2007, bringing in an overall total of 1.3 billion. Foncière des Régions is undoubtedly one of the few property investment companies to have successfully completed such an ambitious trade-off plan. How did the business of Beni Stabili, your Italian subsidiary, perform in 2008? For Beni Stabili, in which we have a 68% stake, the financial year 2008 produced a financial result marked by strong rental activity, an occupancy rate of 98%, an asset-rotation policy which created value and an increase in rents on a constant structure basis. This first result following our takeover of Beni Stabili is very encouraging and demonstrates the quality of our teams. What is your level of debt like? In terms of financing, we have always favoured long-term partnerships with financial establishments that we know and have been working with us for many years. Our debt is secured and long and we have no significant repayment to make until Our Loan To Value (LTV) ratio was 58.8% at the end of What do you foresee for the sector in 2009? In terms of property, the main trends seen in 2008 are likely to continue: a reduction in the number of transactions and, a fairly new phenomenon, an increase in rental risk due to the increased fragility of tenants and downward pressure on rents. Thanks to our position as a property partner to major companies and the quality of our tenants, with whom we are in constant and constructive dialogue, we enjoy undeniable advantages and a high level of visibility. 06 _07

10 LONG-TERM KEY FIGURES FOR 2008 PORTFOLIO BREAKDOWN (GROUP SHARE) Car parks 1% Logistics 8% Service sector 10% Housing 13% Basis* 10.4bn group share (gs) ( 16.7bn consolidated) * Including equity-accounted affiliates. 68% Offices: 36% in France 32% in Italy PROPERTY INDICATORS + 17% 1,308 1, consolidated 869 France Italy 1,090 disposals gs gs gs Rental income: +17% group share + 3.8% on a constant structure basis (in million) Very high office occupancy rates (as %) Average residual lease-duration of more than six years fixed (group share data in years) 1.3bn of consolidated disposals + 8% on valuations at the end of 2007 (in million) FINANCIAL INDICATORS +2.31% -13.4% Constantly increasing cash flow (in /share) NAV impacted by fall in values (in /share) S S S A constant LTV* level (as %) * Loan To Value: ratio between debt net and property value.

11 KEY EVENTS IN 2008 January/Foncière des Régions Acquisition from Eiffage of a 190,000 sqm portfolio valued at 102 million. Office and business premises let to Eiffage for 9-year fixed-term leases account for 75% of this portfolio. Cœur d Orly project: Aéroports de Paris chose the joint venture between Altarea/Foncière des Régions to design and construct the first phase of the Cœur d Orly project which includes 160,000 sqm of offices, shops and a hotel. March/Foncière des Régions Foncière des Régions joins the SBF 120. This move underlines the increase in liquidity of the stock and the amount of securities traded each day. The SBF 120 is an index including the top 120 stocks listed on Euronext in terms of liquidity and stock market capitalization. March/Foncière des Murs Acquisition, through the partnership with Korian, of a 140-bed residence for the elderly in Sardinia for 8.9 million, including fees and duties, and a 51-bed psychiatric clinic near Dax for 4.2 million. June/Foncière des Murs Acquisition of a hotel in Florence operated by the Metha group under the Holiday Inn brand. July/Foncière des Régions Foncière des Régions and Morgan Stanley Real Estate Funds deliver the DS Campus, the global head office of Dassault Systèmes, 60,000 sqm of HQE offices in Vélizy. July/Foncière des Murs Acquisition of a new SunParks village, located in Belgium, for 41.9 million, as part of the partnership with Pierre & Vacances. September/Foncière Développement Logements Off-plan delivery of 63 housing units in Villenave-d Ornon (Gironde). October/Foncière des Régions Foncière des Régions completed its first sale ( 95.1 million) to an OPCI (property-investment mutual fund) and met its disposal target for October/Foncière des Murs Acquisition of four Quick restaurants as part of a partnership agreed in October/Foncière Europe Logistique Foncière Europe Logistique lets 44,100 sqm of logistics space at the Garonor, Chalon-sur-Saône and Saint-Witz sites. November/Foncière des Régions Refinancing of 240 million in relation to the CB 21 project (formerly the Gan tower) at La Défense. December/Foncière Europe Logistique Delivery of three new logistics hubs: Corbas (Rhône): a building designed to house courier services, with a surface area of 14,943 sqm entirely let to GEODIS for a period of 12 years. Bollène (Vaucluse): Paneuroparc multimodal business park: 29,910 sqm logistics hub. Dunkirk (Nord-Pas-de-Calais): The Quais de l Atlantique, a 23,000 sqm multimodal hub. December The DS Campus operations in Vélizy and the Quais de l Atlantique in Dunkirk have been nominated for the Grand Prix SIMI award. December/Foncière des Murs Acquisition of three Jardiland garden centres for 12 million, including duties. 08 _09

12 MERCURE HOTEL_PORTE DE SAINT-CLOUD, BOULOGNE-BILLANCOURT (Hauts-de-Seine). Foncière des Régions has developed a close partnership with the Accor group, covering more than 200 hotels. An exemplary long-term partnership, built on communication and collaboration between two stakeholders.

13 COLLABORATIVE LONG-TERM PROPERTY PARTNERSHIPS WITH LEADING COMPANIES Foncière des Régions is the property partner of the largest French and European companies. This recognized specialism has been built on human values and the expertise of the professionals who create its reputation and develop a unique and long-lasting commercial relationship with its main tenants. 10 _11

14 COLLABORATIVE ASSISTING THE PROPERTY STRATEGIES OF MAJOR COMPANIES In France, Foncière des Régions owns a portfolio of offices valued at 3.7 billion with a total surface area of 2.2 million sqm. These assets are characterized by their diversity, geographical complementarity, rental security and high level of profitability. More and more companies are opting to sell and leaseback their property portfolio. This then becomes a new vehicle for value creation. As a result of beneficial taxation measures (the French tax status of quoted propertyinvestment company or SIIC) and incorporation of new management issues, major sale and leaseback operations have been completed in recent years. Foncière des Régions has been involved in most of them, following acquisitions from the main industrial and service groups: Accor, France Télécom, EDF, Eiffage, Quick, Korian, Courtepaille, etc. France Télécom: a property partner since 2002 With nearly 500 buildings, representing 1.7 million sqm, Foncière des Régions is France Télécom s largest landlord. Olivier Esteve, Office Real Estate Managing Director Foncière des Régions Long-term partnerships are part of our corporate culture. At Foncière des Régions, partnerships are part of our corporate culture. By having an understanding of the whole value chain, thanks to the skill of our teams, Foncière des Régions offers comprehensive solutions to companies wishing to sell and leaseback their portfolio. For all our clients France Télécom, Accor, IBM, EDF and Eiffage our property management makes us the natural choice. Our partnership commitment to each of our tenants is real, long-lasting and constantly evolving. The property expertise developed by Foncière des Régions and the range of its knowledge have proven to be a winning combination, given the variety and types of properties. EDF: a first-class regional portfolio The partnership relationship between Foncière des Régions and EDF began in 2001 through the acquisition of 55 regional head offices. This portfolio is mainly composed of head offices and technical services centres based in city centres or on the outskirts of large cities. Eiffage: a long-term rental partnership At the start of 2008, Foncière des Régions acquired a portfolio of offices and business premises from Eiffage with a total surface area of 190,000 sqm spread across France. For this large public construction group, property sale and leaseback of its offices and tertiary buildings met its aim of associating itself with a recognized property group.

15 EDF BUILDING_SAINT-AVERTIN (Indre-et-Loire). OFFICE BULDING_ ISSY-LES-MOULINEAUX (Hauts-de-Seine). FRANCE TÉLÉCOM BUILDING_ PARIS (Île-de-France). IBM: a value-creating partner Since 2005, Morgan Stanley Real Estate Funds and Foncière des Régions have acquired a portfolio of seven buildings totalling 125,000 sqm from IBM France. Foncière des Régions carries out the property management and asset management for the buildings, which are occupied by IBM. At the end of 2008, as part of a new development, Foncière des Régions delivered a new 3,000 sqm building in Montpellier to IBM, designed to house a cutting-edge IT centre. OMEGA BUILDING_LEVALLOIS-PERRET (Hauts-de-Seine). Occupancy rate of office portfolio in France 99.1% 273M in annual rent from offices in France Return from the office portfolio in France 8.1% 12 _13

16 COLLABORATIVE DEVELOPING INNOVATIVE SOLUTIONS TOTHEBENEFITOFOURPARTNERS Based on the strength of these successful partnerships and its own sound foundations, Foncière des Régions has been able to develop innovative property and financial solutions with several other partners who have expertise in their sector. A business model serving a long-term strategy Foncière des Régions has diversified its areas of operations and its portfolio, while retaining the same business model, which it has been able to adapt to the various countries and products. Thanks to its dedicated and professional teams located as close as possible to the portfolio and the tenants, Foncière des Régions, a recognized services partner, deploys the same strategy in other business sectors. One example is Accor, a hotel group which is a world leader in its business sector. Accor: adaptability and flexibility Accor decided to sell and leaseback part of its portfolio in This strategy was part of a new portfolio management policy designed to give up ownership of hotels, while continuing to manage them. Foncière des Régions, through its subsidiary Foncière des Murs, developed a long-term partnership with Accor covering more than 200 hotels from chains including Sofitel, Mercure, Pullman, All Seasons, Novotel, Ibis, Etap Hotel, etc. Alice Lombard, Vice-President Asset Management & Real Estate Partnerships Department, Accor group A dynamic partnership focused on performance and value creation. Accor has carried out some refinancing as part of its Asset Right strategy, exchanging its hotel real estate for variable-rent leases and entering into partnerships with major players in the real-estate sector. The first was Foncière des Murs, which owns nearly 200 hotels operated by Accor. We have built a dynamic partnership together, focused on performance and value creation. Based on this partnership and as a result of listening and working together, we have been able to establish a relationship of trust allowing us to face the current crisis calmly and be confident of future development potential. MERCURE HOTEL_PORTE DE SAINT-CLOUD, BOULOGNE-BILLANCOURT (Hauts-de-Seine).

17 CŒUR D ORLY_ ORLY (Val-de-Marne). CARRÉ SUFFREN_ PARIS (Île-de-France). Confidence of financial partners In addition to its property partnerships, Foncière des Régions pursues its growth model through financial partnerships with investors who share real-estate vision and the ambition to grow. This year, for instance, Foncière des Régions has collaborated with Predica (Crédit Agricole group) on the Carré Suffren project in Paris and the Euromed Center in Marseilles. In 2008, the DS Campus, the new head office of Dassault Systèmes, was completed in partnership with Morgan Stanley, FSA Property and Foncière des Régions, which was also chosen by Aéroports de Paris as co-investor in the Cœur d Orly project. 202 hotels owned by Foncière des Murs Budget for the DS Campus project 210 M in partnership with Morgan Stanley and FSA Property HEALTHCARE RESIDENCE, OWNED BY FONCIÈRE DES MURS_MEUDON (Hauts-de-Seine). 14 _15

18 COLLABORATIVE PLANNING TODAY FOR THE PROPERTY OF TOMORROW Foncière des Régions works alongside companies and public bodies to plan urban development and restructuring projects, both combined and solely tertiary, with the aim of combining architectural and environmental quality with urban integration. Dassault Systèmes Campus: a benchmark property and partnership project Dassault Systèmes, a world leader in software packages, selected Foncière des Régions to design and build its new global head office in Vélizy-Villacoublay. The Campus s four buildings, 60,000 sqm of HQE -certified offices which Dassault Systèmes will occupy under a 12-year lease, sit in a landscaped park covering two-thirds of the site which is directly linked to the forest of Meudon. We have designed a cutting-edge living area with Foncière des Régions. Foncière des Régions and Suez Environnement contribute to renewal of La Défense Suez Environnement has become a new partner-tenant of Foncière des Régions by leasing 42,000 sqm of offices in the CB 21 Tower in La Défense, Europe s number one business district. The complete renovation plan drawn up by Foncière des Régions for this 75,000 sqm office building won over Suez Environnement which will be moving its new corporate head office Laurence Dors, Senior Executive Vice-President, Global Development & Resources, Dassault Systèmes We have reflected on and designed our global head office in close collaboration with Foncière des Régions to reflect the culture of Dassault Systèmes, always pushing the boundaries of innovation further. Foncière des Régions worked with us throughout the project to match this brief as closely as possible, as part of a partnership in which its ability to listen, capacity to adapt and responsiveness allowed us to produce a campus tailored to our needs. there from mid In due course, 2,000 Suez Environnement group employees will work in this tower, which is a landmark on the Parisian skyline. Euromed Center in Marseilles: a new seafront The Euroméditerranée urban development project will bring a new district to life by 2012 through the creation of new offices, shops, public areas and housing. In partnership with Predica, Foncière des Régions is contributing to this urban transformation by taking part in the Euromed Center project. This complex, whose main architect is Massimiliano Fuksas, includes a 71,500 sqm-area of major structural facilities offices, shops, hotel and multiplex cinema which will make Marseilles the maininterface between Europe and the Mediterranean region. DASSAULT SYSTÈMES CAMPUS_ VÉLIZY-VILLACOUBLAY (Yvelines).

19 42,000 SQM in the CB 21 Tower let to Suez Environnement for a 10-year term CB 21 TOWER_ LA DÉFENSE (Hauts-de-Seine). Cœur d Orly: a lively business hub Aéroports de Paris chose the joint venture of Foncière des Régions and Altarea to complete this development project and participate as joint investors based on a project designed by architect Jean-Michel Wilmotte and landscape designer Philippe Thébaud. In a strategic position and benefiting from a dynamic environment, the first phase of Cœur d Orly developed by Foncière des Régions and Altarea (160,000 sqm) was designed as a living area, comprising offices forming part of a network of shops and local services. Cœur d Orly will also be truly green business district, with its HQE -certified buildings and the aim of BBC (low consumption) certification for the office buildings. Pascal Crambes, Managing Director of Foncière des Régions Développement We are planning today for the city of tomorrow. Made up of around 15 professionals, Foncière des Régions Développement plans, coordinates and manages development operations for which Foncière des Régions acts as investor or joint investor. Foncière des Régions Développement also takes part in major renovation work on the group s portfolio in the Île-de-France and elsewhere in France. Building the city of tomorrow means working closely with public authorities, investors, architects and the various technical contractors, and Foncière des Régions Développement possesses all the expertise required to tackle these property challenges. CŒUR D ORLY_ORLY (Val-de-Marne). 16 _17

20 OFFICE BUILDING_MILAN, ITALY. Foncière des Régions is the main shareholder in Beni Stabili, the leading Italian property investment company which owns a portfolio of offices in the major Italian cities.

21 COMPLEMENTARY A DIVERSE RANGE OF PROPERTIES Successful European diversification within Italy and Germany, a key player in the service-sector and residential property in France and Germany, a leading property investment company in logistics and growth in the car park sector: Foncière des Régions and its subsidiaries are demonstrating the wisdom of their diverse but specialised property strategy. 18 _19

22 COMPLEMENTARY A TARGETED EUROPEAN STRATEGY With half of its property assets located outside France, Foncière des Régions is a key player in European real-estate, with diversity in terms of products and countries. Its portfolio amounts to 10.4 billion (group share) and is managed by teams of professionals based in each country, representing more than 800 employees. Foncière des Régions began targeted European growth in 2006 in accordance with its strategy of geographical diversity firstly in Germany, in the residential sector, and then in 2007 in Italy, with Beni Stabili, the largest property investment company for offices. IN ITALY Foncière des Régions is the main shareholder in Beni Stabili with a 68% stake. Beni Stabili is listed on the Milan stock exchange and is the biggest property investment company for offices in Italy, with a 4.4 billion portfolio located in the largest Italian cities: Rome, Milan, Turin, etc. A leading property investment company Beni Stabili has its own management centre dedicated to assets and property management, development of major projects and the management of funds. Like Foncière des Régions, the company has built itself up on the sale and leaseback of offices by major industrial and services companies, such as Telecom Italia, Fiat, Prada, Banca Intesa Sanpaolo and Ferrovie dello Stato, Italy s national rail company. Segmentation of the property portfolio Beni Stabili implemented a new asset management policy in 2008, based on segmentation of its property portfolio into three categories: Long-term portfolio, including properties let to leading tenants, mainly Telecom Italia; Dynamic portfolio, including properties that have reached maturity and are marked for disposal; Development portfolio, relating to management of new construction and urban renovation projects. OFFICE BUILDING_MILAN, ITALY. TELECOM ITALIA BUILDING_VICENZA, ITALY. Offices portfolio value 4.4bn 218 M in annual rent from offices Occupancy rate of office portfolio 97.6%

23 Strong management indicators Beni Stabili s rental indicators are very well positioned: average occupancy rate of 97.6% for a total let amount of 218 million (up 3% on a constant structure basis), long-term leases and buildings let to key players with secure cash flows. In 2008, new leases signed over the entire financial year amounted to 44,200 sqm, generating more than 7 million in annualized rents. IN GERMANY Foncière des Régions has a presence in Germany through its subsidiaries Foncière Développement Logements and Foncière Europe Logistique. Immeo Wohnen is in charge for property and asset management of 45,249 houses owned in the Düsseldorf area. This management centre, with 390 employees, also manages logistics properties owned by Foncière Europe Logistique. RIPAMONTI ZONE PROJECT_MILAN, ITALY. Housing portfolio value 2.4bn 165M of annual housing rent 45,249 housing units RESIDENTIAL BUILDING HÖLDERLINSTRASSE_DUISBURG, GERMANY. 20 _21

24 COMPLEMENTARY FONCIERE DES MURS: A LEADER IN THE SERVICE- SECTOR PROPERTY MARKET By developing targeted partnerships with tenants who are key players in their sector, Foncière des Murs has fully justified its economic model. It is now a major company, recognized for its expertise. A specialist in the ownership of service-sector property in the hotel, restaurant, health and entertainment sectors, Foncière des Murs has a portfolio valued at 3.2 billion in 2008, with buildings located in France and in Europe. The composition of the portfolio at the end of 2008 is as follows: hotels (59%), entertainment (15%), restaurants (13%), healthcare and healthcare clinics (13%). Partnerships with leading companies in their sectors Foncière des Murs strategy favours long-term partnerships with tenants who are leaders in their business sectors: Accor for hotels, Quick and Courtepaille for restaurants, Korian and Générale de Santé for health, Pierre & Vacances, Club Méditerranée and Jardiland for entertainment. In 2008, Foncière des Murs continued its property development with more than 86 million invested in France, Belgium and Portugal. Further acquisitions in 2008 Foncière des Murs continued its growth in 2008 by acquiring: two establishments operated by Korian; three garden centres under the Jardiland brand; a 140-bed residence for the elderly operated by Segesta (the Italian subsidiary of Korian); a hotel currently being renovated which will be operated by the Metha group under the Holiday Inn brand in Florence (Italy); a SunParks holiday village in Belgium, as part of an agreement signed in 2007 with Pierre & Vacances. As part of the partnership with Accor, Foncière des Murs has completed 89% of the works planned for the period (totalling 117 million). These works are part of the renovation programme for Accor-branded hotel. SUNPARKS VILLAGE_KEMPENSE MEREN, BELGIUM. COURTEPAILLE_ ROSNY-SOUS-BOIS (Seine-Saint-Denis). Portfolio value 3.2bn 200M in annual rents Occupancy rate of portfolio 100% Foncière des Régions stake 29%

25 FONCIERE EUROPE LOGISTIQUE: A KEY PLAYER IN LOGISTICS PROPERTY Foncière Europe Logistique owns and manages a first-class logistics portfolio in France and Germany. With a portfolio valued at more than 1 billion, Foncière Europe Logistique has confirmed its position as a key player in its sector. Logistique France: a key player Foncière Europe Logistique is now the second largest investor in logistics property in France and the main owner of business premises in Paris and the Paris region. The company took the decision to operate in the logistics, courier and business premises markets and to invest in the entire logistics chain to act as a consolidator in the sector. In France, Foncière Europe Logistique s portfolio at 31 December 2008 included 41 logistics sites with a total surface area of 1.7 million sqm, valued at 1.3 billion. This generates annualized rent of 97.6 million. Foncière Europe Logistique s portfolio, 90% of which is Class A, covers a north-south strip of France stretching from Dunkirk to Marseilles, taking in the Île-de-France and the region around Lyons. Business premises: a leadership position in the Paris region Foncière Europe Logistique has positioned itself as the biggest owner of business premises in Paris and the inner suburbs. At 31 December 2008, the company owned four sites (CAP 18, CAP 19, Le Dorian and Pantin) representing 245,000 sqm, valued at 229 million. The portfolio s occupancy rate is 97%. A dynamic year in 2008 This year, Foncière Europe Logistique signed new leases for almost 156,000 sqm. In addition, 137,000 sqm of renewals were signed. At the Dunkirk, Bollène and Corbas sites, three development projects were delivered for nearly 79,000 sqm. Finally, the Metz-Trémery property (23,240 sqm) was sold. European rental partnerships The company s investment policy favours building partnerships with its tenants, institutional investors and property developers. The company enjoys sound advantages to significantly assist the growth of its clients in France and other European countries. Logistics in Germany: logistics buildings in major cities In terms of value, 14% of Foncière Europe Logistique s portfolio is located in Germany. With 99% occupancy rate, these buildings are located in the main logistics hubs, close to the country s major cities: Stuttgart, Düsseldorf, Hamburg, etc. These hubs are valued at nearly 121 million. Portfolio value 1.3bn 97.6 M in annual rent 90% Class A sites Foncière des Régions stake 60% CORBAS SITE_ (Rhône). SALON-DE-PROVENCE SITE_ (Bouches-du-Rhône). 22 _23

26 COMPLEMENTARY FONCIERE DEVELOPPEMENT LOGEMENTS: A EUROPEAN RESIDENTIAL PROPERTY COMPANY With a presence in Germany and France, Foncière Développement Logements is a key player in the residential property sector. With 45,249 houses in Germany and 3,915 in France, the company owns a diversified portfolio in terms of both type and geographical location. Its strong performance in 2008 demonstrates its ability to adapt. Foncière Développement Logements directly manages and develops the value of 49,164 houses spread across France and Germany. Property management is carried out by two internal centres: GFR Property in France and Immeo Wohnen in Germany, providing significant property expertise. Foncière Développement Logements recorded good operating results in 2008: sales and agreements up 42%, a 3.4% increase in rents in France and 3% in Germany on a constant structure basis and a 6% reduction in operating costs. Performance and profitability of the portfolio France Foncière Développement Logements posted good results due to a policy of calculated trade-offs and cost control. At 31 December 2008, the 3,915 houses owned by Foncière Développement Logements in France were valued at 1.02 billion (excluding duties). Germany With 45,249 houses, the majority of Foncière Développement Logements German portfolio is located in the North Rhine-Westphalia region near Düsseldorf. This portfolio, comprising small buildings and individual houses, is valued at 2.43 billion (excluding duties). In 2008, Foncière Développement Logements continued the disposal programme it began in 2007: 70 million of sales were completed, generating gross margins of 27% compared with the purchase price in In terms of its maintenance policy, Foncière Développement Logements carries out major work on its portfolio, through Immeo Wohnen, especially in relation to sustainable development and renewable energy. RESIDENTIAL BUILDING_PARIS (Île-de-France). Value of the portfolio in France and Germany 3.45bn 49,164 houses spread across France and Germany 210.8M in annualized rent in 2008 (France and Germany) RESIDENTIAL BUILDING_LE CHESNAY (Yvelines). Foncière des Régions stake 38.2%

27 PARCS GFR AND URBIS PARK: DYNAMIC CHALLENGERS Urbis Park, the commercial arm of Parcs GFR, operates a portfolio of car parks with 17,500 spaces in the centre of Paris, Lyons, Bordeaux and Metz. Urbis Park, a company which is committed to working alongside local players who want to combine urban mobility with economic dynamism, designs parking solutions linked to the various forms of mobility which contribute to the dynamism of urban life. Partnerships with public and private operators are a deliberate effort by the company to contribute to sustainable mobility. At the end of 2008, Urbis Park managed 17,500 spaces and was the fourth largest car park operator in the French market. Developing and renovating the portfolio In 2008, the company began operating new car parks in Lyon-Vaise (857 spaces), Gare-Amphithéâtre (702 spaces) in Metz and Saint-Nazaire Ruban Bleu (shopping centre, 564 spaces). In Bordeaux, where Urbis Park manages the majority of public car parks, the Tourny car park (990 spaces) was entirely renovated. Urban development and parking Urbis Park continues to grow in various directions: the acquisition of private car parks, along with new construction, refurbishment or urban planning projects, the acquisition of existing car parks as well as public contracts. A variety of investment projects are underway or were successfully completed over the year: Marseilles: Euromed Center car park (870 spaces) and Terrasses du port (2,800 spaces); Bourges: Avaricum car park (850 spaces); Versailles: 400 spaces and the management of 2,000 spaces along the roadside. URBIS PARK CAR PARK_ BORDEAUX (Gironde). A new partnership Parcs GFR and Apsys, a global player in commercial property, have formed a partnership to work upstream on all car parks for future shopping centres developed by Apsys, which are operated under the Urbis Park brand. Two car parks are already covered by this development agreement: Ruban Bleu in Saint-Nazaire and Beaugrenelle in Paris. Customer reception and service quality Urbis Park has opened Maisons Urbis Park in Metz and Bordeaux. These shops, designed to present all products and services which are for sale Urbisshop, Urbisshow, Urbisman, etc. are open to the public and allow subscribers and other customers to carry out all transactions in-store. Portfolio value 253M 15 car parks managed, representing nearly 17,500 spaces URBIS PARK CAR PARK_LYON-VAISE (Rhône). Foncière des Régions stake 59% 24 _25

28 RESPONSIBLE A PROGRESSIVE AND LONG-TERM APPROACH For Foncière des Régions, a local player with a long-term property vision, sustainable development is a crucial aspect of strategy. Whether through dynamic management of its portfolio, implementation of its patronage policy or the internal involvement of its staff, Foncière des Régions is a committed company.

29 DASSAULT SYSTÈMES CAMPUS_VÉLIZY-VILLACOUBLAY (Yvelines). Dassault Systèmes new global head office was delivered in With 60,000 sqm of offices, it is one of the largest private operation to be HQE -certified. 26_27

30 RESPONSIBLE Sustainable development is something positive uniting all of Foncière des Régions staff, tenants and stakeholders who have made a commitment, like the group, to take practical steps to improve the quality of buildings and local community. Sustainable development, in its economic, real-estate as well as environmental, social and corporate dimensions, is deeply though-provoking and relates to corporate governance, the design and operation of buildings, as well as relations with the various stakeholders (tenants, suppliers, local authorities). Reducing the group s environmental footprint has become a priority for Foncière des Régions. This involves reducing energy consumption and managing risk, for users and third parties. This approach aims to satisfy the expectations of tenants, as well as managing the risk of the portfolio becoming obsolete in terms of environmental performance and the possible impact of this on the buildings value. The success of this strategy, which has been developed within all group companies, also requires a proactive and unifying human resources policy to be pursued, based on openness and experience sharing, as well as a concerted social commitment to promoting architectural patronage and skills. SOLAR PANELS, DASSAULT SYSTÈMES CAMPUS_ VÉLIZY-VILLACOUBLAY (Yvelines). EDF BUILDING_TALENCE (Gironde). FONCIÈRE DES RÉGIONS AGREEMENT.

31 HUMAN RESOURCES: INVESTING IN HUMAN CAPITAL With 892 employees throughout France, Italy and Germany, Foncière des Régions relies on the skill and dedication of its teams to promote its growth and ensure its long-term performance. The human resources policy is crucial to the success of Foncière des Régions growth strategy. It is in turn based on several fundamentals: sharing of best practice, training, the transmission of values and information within the group. Supporting the group s growth All existing tools and processes for managing human resources were strengthened in This work particularly included the first application of the profit sharing agreement introduced in 2007, internationalization of divisions and continuation of work to harmonize the statuses of group employees. Training to improve performance Foncière des Régions draws its strength from the development of its employees, the diversity of its teams and constant sharing of experience. The training policy in 2008 therefore involved nearly 4% of all staff. In order to train for the future and prepare the management of tomorrow, the continuation of two training programmes aimed at managers occupying or likely to occupy positions of responsibility FDR Université and FDR Découverte demonstrate the dynamism and ambition of Foncière des Régions in relation to skills development. Sharing information and group values In 2007, Foncière des Régions values openness, business sense and professionalism were formalized in a brochure distributed to all staff in Europe. The purpose of this document is to unite managers and staff around shared values and rules of conduct. In 2008, this desire to share values was highlighted through workshops in France and Italy attended by around 100 employees, who then worked on implementing these values within each unit. The sharing of information is also a key factor for success in any organization. As well as traditional internal communication tools (intranet, magazines, newsletters, staff meetings, etc.), in 2008 Foncière des Régions set up a number of tools designed to inform employees about various themes, in particular issues surrounding sustainable development. Monica Massi, Financial and Accountancy Manager, Beni Stabili An original, interactive and enriching programme. I was very lucky to take part in the FDR Université s programme. As well as discovering the group from the inside via personal accounts and case studies, FDR Université also meant meeting people and forming a very solid internal network between French, Italians and Germans. The huge benefits and originality of the programme lie in the participants experience, the high level of interactivity during our working sessions and the fantastic atmosphere between us. To sum up, after one and a half years of attending, I would say that FDR Université is openmindedness, a new professional attribute and meeting new colleagues and friends. 892 employees 41% in France (362 employees) 43% in Germany (390 employees) 16% in Italy (140 employees) 28 _29

32 RESPONSIBLE ENVIRONMENTAL PERFORMANCE: CONTINUAL ASSESSMENT AND IMPROVEMENT Foncière des Régions has a policy of environmental performance and risk control based on continual assessment and improvement of its portfolio, energy savings and the inclusion of new energies in its new construction and restructuring projects. Prevention and security Foncière des Régions makes prevention and control of risk a priority in order to ensure personal and environmental safety. Systematic control and monitoring of the risks identified within the portfolio (natural, technological, construction- or sectorrelated) have therefore been implemented at a group level, under the supervision of the Sustainable Development Department and the Environment Department. Sustainable portfolio management The main objective of Foncière des Régions teams is to ensure the sustainability and long-term future of the existing portfolio. In 2008, for instance, a lot of work was carried out to improve the portfolio s energy performance and reduce CO 2 emissions. Environmental quality is also a focus of development projects. In 2008, Foncière des Régions successfully completed the construction of the new global head office of Dassault Systèmes in Vélizy-Villacoublay 60,000 sqm of HQE -certified offices. This year also saw the continuation of the Carré Suffren project, which involves the restructuring of 25,000 sqm of offices in Paris. This is a carefully thought-out programme to ensure the building s long-term future and its ease of maintenance, with the least environmental impact. Other projects were conceived or developed in 2008, in particular the Cœur d Orly programme which will create a truly green business district, with its HQE -certified buildings and the aim of BBC (low consumption) certification for the office buildings. Similarly, the CB 21 Tower in La Défense, which is currently being entirely renovated, will boast energy consumption at 30% less than its current level. DASSAULT SYSTÈMES CAMPUS_ VÉLIZY-VILLACOUBLAY (Yvelines). LÉGENDE_PHOTO. Légende. Jérôme Le Gall, associated architect, and Nathalie Leroy, associated landscape architect, Arte Charpentier Architectes Dassault Systèmes Campus is the result of environmental targets. At a very early stage of the project, ambitious architectural and environmental targets were set by its investors led by Foncière des Régions and Dassault Systèmes. The challenge was to design a different type of working environment to encourage meeting and exchange. Every aspect of Dassault Systèmes Campus took into account and incorporated environmental criteria landscaped gardens linked to the forest of Meudon covering two-thirds of the site, an HQE -certified campus, an energy consumption level of 78 kwh/sqm, the installation of solar panels and 2,000 sqm of green roofs All these characteristics make Dassault Systèmes Campus a benchmark project.

33 PATRONAGE: BEING INVOLVED IN COMMUNITY LIFE Preserving and promoting architectural heritage on the one hand and developing the relationship between the company and its environment on the other that is the dual challenge set by Foncière des Régions through its patronage policy. Architectural patronage: protecting and promoting heritage As a property operator and long-term investor, architecture is at the heart of Foncière des Régions work. In 2008 the group developed two cultural patronage initiatives as a firm demonstration of its commitment: one focused on the Cité de l architecture et du patrimoine through support for two exhibitions: the Mies van der Rohe prize, the most prestigious contemporary architecture award in Europe, presented from October 2007 to February 2008, and the Nouveaux Albums des Jeunes Architectes et Paysagistes (NAJAP) exhibition, held from October 2008 to January 2009; the other aiming to restore the Collège des Bernardins, a magnificent example of 13th-century Cistercian architecture in the heart of Paris. CITÉ DE L ARCHITECTURE, NAJAP EXHIBITION_ PARIS (Île-de-France). Restoration of this building, which was a real technical challenge, will take more than four years and notably involve architect Jean-Michel Wilmotte. Skills patronage: a social approach In 2008, Foncière des Régions decided to join the Lycée Expérimental system developed by Paris Institute of Political Science, which supports interaction between companies and their environment. In order to give secondary school students the desire and means to succeed, Foncière des Régions wanted to become involved in this effective and recognized initiative by working with two French secondary schools: one in Bobigny (Seine-Saint-Denis) and one in Forbach (Moselle). More than 30 employees are now participating in the programme, which encourages motivation as well as boosting skills internally. COLLÈGE DES BERNARDINS_ PARIS (Île-de-France). Supporting creativity and excellence. François de Mazières, President of the Cité de l architecture et du patrimoine Foncière des Régions chose to support two landmark exhibitions in the Cité s programme in 2008, recognizing key players in European architectural: the Mies van der Rohe prize exhibition, awarded to an experienced architect, and the Nouveaux Albums des Jeunes Achitectes et Paysagistes awards, given to emerging talents. I would like to thank Foncière des Régions for its support for these two competitions which in a spirit of transference, and even interconnection between wellknown architects and the younger generation reward initiative, creativity and excellence. 30 _31

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35 LEGAL AND FINANCIAL INFORMATION 32 _33

36 INFORMATION CORPORATE GOVERNANCE Foncière des Régions corporate governance structure is based around a Supervisory Board, composed of the main shareholder representatives, and a Management Board The corporate governance structure also includes three specialised committees (Investment Committee, Audit Committee and Remunerations Committee). SUPERVISORY BOARD The Supervisory Board, which has 15 members, is the group s decisionmaking and inspection body. Its role is to direct and control the Management Board. It is made up of representatives of the main shareholders. The members of the Supervisory Board, whether individuals or legal entities, are appointed by the Annual General Meeting for terms of six years. Chairman: Charles Ruggieri Vice Chairman: Leonardo Del Vecchio, representing Delfin Members: ACM Vie, represented by Catherine Allonas Banque Populaire de Lorraine- Champagne (BPLC), represented by Jacques Hausler Batipart, represented by Hans-Joaquim Kay Delfin, represented by Romolo Bardin Sergio Erede Bertrand de Feydeau Generali Vie, represented by Anne-Marie de Chalembert GMF Vie, represented by Bruno Legros Monroe, represented by Julien Ruggieri Olivier Piani Predica, represented by Françoise Debrus Pierre Vaquier Philippe Vidal SPECIALISED COMMITTEES The Supervisory Board has established three specialised committees and defined the composition and powers and which operates under its responsibility. Investment Committee This Committee has nine members. Prior to any decision of the Management Board and/or Supervisory Board according to case, this body is in charge of examining and issuing recommendations on the following transactions: any investment performed directly by the company or through fully-consolidated subsidiaries of the company, except for companies limited by shares, when the value of the assets involved exceeds thirty million euros ( 30,000,000) group share; any investment performed directly by the company or through fully-consolidated subsidiaries of the company, except for companies limited by shares, when the amount of shareholder equity invested exceeds ten million euros ( 10,000,000). Chairman: Charles Ruggieri Members: Romolo Bardin Anne-Marie de Chalembert Françoise Debrus Bruno Legros Olivier Piani Julien Ruggieri Leonardo Del Vecchio Philippe Vidal Audit Committee This Committee, which has seven members, is responsible for: examining the accounting methods and means of evaluating the group s assets; examining drafts of consolidated and company accounts, prepared by the Management Board, before they are presented to the Board;

37 preparing the Supervisory Board s decisions for oversight of the internal audit; examining the agreements concluded between the company and people that have direct or indirect interests in the company; examining proposals for the appointment of the Registered Auditors, and; carrying out controls on management and checking and clarifying the information to be supplied to shareholders and the market. The Audit Committee reports to the Supervisory Board on its proceedings, gives all opinions or suggestions it feels appropriate and provides information on those points requiring a Board decision. Chairman: Bertrand de Feydeau Members: Catherine Allonas Louis Blanc Sergio Erede Jacques Hausler Julien Ruggieri Leonardo Del Vecchio Remunerations Committee This Committee, which has six members, is responsible for: making proposals to the Supervisory Board on the remuneration of official representatives and members of the Management Board; giving its opinion on the method of remuneration for the members of the executive committees; giving its opinion on the appointment of members of the Management Board and official representatives; making proposals to the Supervisory Board concerning the stock option plan, the attribution of free shares and the rules and attribution thereof. Chairman: Charles Ruggieri Members: Sergio Erede Olivier Piani Hervé Semin Pierre Vaquier Leonardo Del Vecchio CORPORATE GOVERNANCE The European Management Board is the body which decides on and implements Foncière des Régions strategy at a European level. Management Board At 31 December 2008, the Foncière des Régions Management Board had five members. It has had six members since 9 March Chairman: Christophe Kullmann Members: Olivier Esteve, Managing Director, Office Property Activity France Aldo Mazzocco, Managing Director, Beni Stabili Denis Moscovici, General Secretary Yan Perchet, CEO of Foncière des Murs and head of service sector investments Stefano Vittori*, Legal Director and head of dynamic portfolio management at Beni Stabili * On 9 March 2009, the Supervisory Board appointed Stefano Vittori as Board member, replacing Massimo de Meo. 34 _35

38 INFORMATION SHAREHOLDER INFORMATION Foncière des Régions has a coherent and proactive communications strategy in respect of its shareholders, analysts, investors and the financial press. In 2008, in addition to traditional communications tools such as the shareholder s newsletter, the annual report, roadshows (investor meetings) and the annual general meeting, there were numerous financial communication initiatives: participation in international institutional investor conferences; enlargement of the company s financial analyst coverage; visits to properties and new property transactions: Carré Suffren (Paris), the CB 21 Tower (La Défense), Dassault Systèmes Campus (Vélizy-Villacoublay), etc.; improvements to the Finance home page of the Foncière des Régions website; press publications and interviews with the main group directors. All these initiatives had a single objective: to provide information about the company s strategy for greater proximity and transparency. CHANGE IN DIVIDEND ( /SHARE) SHAREHOLDER BASE AT 31 DECEMBER 2008 Float 58.2% Delfin 24.49% Batipart 17.31% } Shareholders agreement 41.8%

39 CHANGES IN THE SHARE PRICE AND THE EPRA EUROPE INDEX (BASE 100) January February March April May June July August September Octobrer November December Foncière des Régions EPRA Europe STOCK MARKET INFORMATION ISIN codes: FR Share code: FDR Where listed: Euronext Paris Market: Local securities Compartment A (Blue Chips) SRD Area of activity: Real Estate Investment Trusts PEA/SRD: eligible Indices: SIIC France, SBF 80, CAC MID100, EPRA Europe, SBF 120 CONTACTS Financial Communication Department Philippe Le Trung Tel.: 00 (33) Fax: 00 (33) philippe.letrung@fdr.fr Financial Communication and Investor Relations Sébastien Bonneton Tel.: 00 (33) Fax: 00 (33) sebastien.bonneton@fdr.fr Corporate Communication and Media Relations Philippe Boyer Tel.: 00 (33) Fax: 00 (33) philippe.boyer@fdr.fr 36 _37

40 INFORMATION FINANCIAL RESULTS CONSOLIDATED SUMMARY BALANCE SHEET (IN MILLIONS) ASSETS 31 Dec 2008 Fixed assets 15,372 Current assets 537 Cash 199 Non recurring assets held for sale 1,339 TOTAL 17,447 LIABILITIES 31 Dec 2008 Shareholders equity 3,441 Minority interests 2,356 Borrowings 10,161 Other liabilitites 1,489 TOTAL 17,447 NET ASSET VALUE (NAV) CHANGE CHANGE (%) NAV net (in millions) 4,512 3, NAV net/share (in ) NAV net (in millions) excl. FI (Financial Instruments) 4,631 3, NAV NET/SHARE (in ) EXCL. FI

41 INCOME STATEMENT_GROUP SHARE (in millions) 31 Dec Dec 2008 RENTS Service provision and other operating income RENTS AND SERVICE PROVISION Operating expenses Financial profit Margin on house sales Intra-group service provision Cash-flow from equity-accounted affiliates CASH FLOW FROM OPERATIONS PER-SHARE CASH FLOW FROM OPERATIONS (IN ) Tax on operations RECURRING NET PROFIT RECURRING NET PROFIT PER SHARE (IN ) Change in value of real-estate assets Change in fair value of financial instruments Margins on sales (excluding houses) Other non recurring items NET PROFIT _39

42 Foncière des Murs Activity report Foncière Développement Logements Activity report Foncière des Régions Reference document Foncière des Murs Reference document Foncière Développement Logements Reference document Foncière Europe Logistique Reference document WEBSITES