Icade : Investor Presentation - November 2019

ORIGINE

(Paris La Défense - Nanterre, Hauts-de-Seine)

INVESTOR PRESENTATION

November 2019

ICADE AT A GLANCE

ICADE AT A GLANCE: ONE OF THE LEADING FRENCH LISTED REITS

OFFICE INVESTMENT:

Icade, the leading real estate player in Greater Paris

• Portfolio as of 06/30/2019: 9.3bn (100%)
• €2.3 bn development pipeline (389,000 sq.m)
• 900,000 sq.m land bank

HEALTHCARE INVESTMENT:

Icade: leading player in France, diversifying in Europe

€11.7bn property portfolio

(as of 06/30/2019, excluding duties, group share)

Office
Investment	Healthcare
78%
Investment
	22%

Cash-Flow by division

(as of 06/30/2019)

	Portfolio as of end of November: >5.0bn (100%)
 Dedicated subsidiary with minority shareholders -
	all French life insurance companies (43%)

Healthcare Investment

Development

7%

Office

 128 healthcare facilities in France (90% short, medium care)

 32 long-term care facilities in Europe (Italy, Germany)

DEVELOPMENT: Among the leaders in France

• Limited and profitable exposure (less than 10% of Group equity (1))
• A full-service developer (offices, homes, etc.) with extensive national coverage (21 regional offices)
• 2018 FY economic revenue: €1,251m; ROE : 15%

Notes: (1) Property Development equity attributable to the Group (before restatement of investments in subsidiaries / Consolidated equity attributable to the Group)

1. Economic revenue: revenue including entities accounted for using the equity method
2. Including 0.27% for Icade's "FCPE" employee-shareholding fund and 0.85% of treasury shares

33%Investment

60%

Icade shareholding structure

as of 06/30/2019 (in %)

Free float (3)
37.13%	Caisse des dépôts
	38.77%
ICAMAP	Crédit Agricole
GIC and Mutual Fund	Assurances Group
acting in concert	18.92%
5.18%

I 2

ICADE AT A GLANCE

ATTRACTIVE FUNDAMENTALS FOR THE ICADE SHARE

Market capitalisation:	Average daily
€6.0bn	(1)	trading volume (2):	Dividend yield:
	C.6%(1)
Free float: 37%	~ €11m

Strong financial structure:	Strong 2016/2018
LTV ratio of around 40%
performance and TSR
BBB+ S&P rating

Dividend history (in €)

4,30

4,00

3,73 3,73

2014

2015

2016

2017

NAV TSR (in %)

12,7% 12,8%

2,0% 2,2%

4,60

2018

11,0%

2014

2015

2016

2017

2018

(1)	As of June 30, 2019
(2)	6-month average daily trading volume as of June 30, 2019	I 3

ICADE AT A GLANCE

SHAREHOLDERS, BOARD OF DIRECTORS

& MANAGEMENT ALIGNED

Strategic Plan approved unanimously by the Board of Directors

Strengthened governance since April 2019

Icade's two leading shareholders are aligned

A committed Board of Directors, geared toward growth,

supporting management in implementing the plan

1. 4

ICADE AT A GLANCE

2019-2022 PLAN: A CLEAR AND AMBITIOUS PLAN

1.	2.	3.
Leader in the office
European leader	Key player in
market in the Greater
in healthcare	property
Paris area and major
real estate	development
cities outside Paris

 Sales of mature assets	 Diversification into	 Positive performance
	Reinvestment	the long-term care segment	in competitive processes
	 International expansion	 Replenishing
	in development
 Opportunistic acquisitions	 Investment target: €2.5bn	the office pipeline

4.

Best-in-classCSR

and innovation

• Priority: low carbon
• Target: a nearly 1.5°C pathway

A plan aimed at delivering attractive

recurring yields & value creation

I 5

ICADE AT A GLANCE

2019: IMPLEMENTATION WELL UNDERWAY

2019	2020	2021	2022
1st year of the plan

	Office	Acceleration and	Improved
Sales of	diversification within
investments
mature assets	the healthcare segment	ESG ratings
€380m	Icade Santé's inaugural
~€1.1bn	€735m
70% in the pipeline	Ranked as a	bond issue
+67% YoY		10 years, €500m,
	sector leader
			by GRESB	coupon of 0.875%
			(84/100)

Icade fully committed

to implementing its 2019-2022 plan…

I 6

ICADE AT A GLANCE

ICADE VS. PEERS SHARE PRICE EVOLUTION JAN. 2016  NOV. 2019

Icade +80.6%

EPRA

Europe +23.4%

Covivio +50.9%

Gecina +67.2%

CAC 40 +45.3%

(Basis 100 / share price of Icade as at Jan 12/31/15 - incl. reinvested dividend

I 7

Sources : Bloomberg, Rothschild

ICADE AT A GLANCE

ICADE VS. PEERS SHARE PRICE EVOLUTION JAN. 2019  NOV. 2019

Icade +42.4%

EPRA

Europe +29.2%

Covivio +26.9%

Gecina +43.6%

CAC 40 +29.2%

(Basis 100 / share price of Icade as at Jan 12/31/18 - incl. reinvested dividend	I 8

Sources : Bloomberg, Rothschild

ICADE AT A GLANCE

SOLID FINANCIAL RESULTS

REFLECTING STRONG ACTIVITY

Positive H1 2019 results (EPRA NAV: +2.7%; NCCF: +4.5%)

Good momentum confirmed in Q3 with notably a solid leasing activity:

• Office Rental income up 1.7% on a like-for-like basis
• Healthcare: Rental income soars by 10.5% on a reported basis
• Property development : business indicators in line with H1; Residential backlog up: +14.9%

NCCF guidance for FY 2019 raised at the occasion of the Investor Day (11/25/2019)

NCCF (in € per share) stable including the impact of 2019 disposals

(vs. initial guidance: stable excluding the impact of 2019 disposals)

…Good momentum since 2016

1. 9

PARK VIEW PROJECT - TÊTE D'OR AREA (Lyon, Rhône)

OFFICE PROPERTY INVESTMENT

of space under construction is already pre-let

OFFICE INVESTMENT

OFFICES: A RESILIENT MARKET

Paris region rental	Stabilised
market normalising	vacancy rate in
1.1 million sq.m in H1 2019	the Paris Region
5.3% at the end
(-19% vs. H1 2018 and
+1% vs. 10-year average)	of June 2019
after two record years	Only 2% in Paris
for large occupiers
Source: ImmoStat	Source: JLL

Strong absorption

of new supply

in the Paris region

only 15% of vacant space is new and 39%

Source: JLL

Strong activity in major cities

outside Paris

1.2 million sq.m taken up over a rolling 12-month period in Q1 2019 (+9% YoY, +18% vs. 5-year average)

Lyon stands out with an estimate of 350,000-sq.mtake-up in 2019

Source: BNPP RE, in Aix/Marseille, Bordeaux, Lille, Lyon, Nantes and Toulouse

Increased attractiveness of property investment

€13.7bn invested in H1 2019

(71% in offices with the return of acquisitions over €500m)

Persistent low interest rate environment

Strong presence of foreign investors

Source: BNPP RE

1. 11

OFFICE INVESTMENT

ICADE'S OFFICE PORTFOLIO AT THE HEART OF THE GREATER PARIS AREA

Paris region portfolio

1,568,207 sq.m (2)

€7,408m

(1)

17

TGV

PORTES DE PARIS

334,240 sq.m

SAINT-DENIS

Origine - Nanterre

GENEVILLIERS 62,330 sq.m

Go Spring - Nanterre

23,520 sq.m

LA DÉFENSE-

NANTERRE

279,180 sq.m

17 16

MAUVIN BUSINESS PARK

Pulse - Saint-Denis

21,980 sq.m

14 15

MILLÉNAIRE

PONT DE FLANDRE

90,690 sq.m

RUEIL-MALMAISON

144,670 sq.m

11

21,730 sq.m

PARIS, 8th DISTRICT

PARIS, 20th DISTRICT

20,030 sq.m

9,880 sq.m

NEUILLY-SUR-SEINE

3,600 sq.m

PARIS, 15th DISTRICT

11 16 Gambetta - Paris

33,400 sq.m

15

BOULOGNE-BILLANCOURT

15

4,980 sq.m

VILLEJUIF

ISSY-LES-MOULINEAUX

29,770 sq.m

18

18,270 sq.m

GENTILLY

13,710 sq.m

Fresk - Issy-les-Moulineaux

18 14

TGV

Monaco - Rungis business park

ORLY-RUNGIS BUSINESS PARK

388,380 sq.m

Notes: (1) Value of the property portfolio excl. duties, Group share,

ASSETS

CENTRAL BUSINESS

as of the end of September 2019 (excl. residential)

DISTRICT

based on appraised values as of June 30, 2019

GRAND PARIS

HIGH-SPEED

(2) Total floor area excl. housing units, hotels and PPPs

TGV

EXPRESS LINES

TRAIN STATION

Portfolio outside the Paris region 197,164 sq.m (2)

€754m (1)

BORDEAUX	LYON
96,886 sq.m
49,741 sq.m
	MARSEILLE
	34,388 sq.m	Le Castel - Marseille	Quai 8.2 - Bordeaux

TOULOUSE

16,150 sq.m

LAND BANK: 900,000 sq.m

PORTES DE PARIS BUSINESS PARK

277,000 sq.m

GRAND PARIS EXPRESS LINES		PORTE DE GENTILLY
	6,000 sq.m
				14
		15	ORLY-RUNGIS BUSINESS PARK
		16, 17
				18	18 Beyond 2030	610,000 sq.m
	HIGH-SPEED TRAIN STATIONS
				Existing high-speed train station
	TGV
			I 12
	TGV	Planned high-speed train station

OFFICE INVESTMENT

OFFICE INVESTMENT: KEY FIGURES

Like-for-like changes in rental income

PORTFOLIO VALUE (100% basis, excluding duties)

PORTFOLIO VALUE (Group share, excluding duties)

WEIGHTED AVERAGE UNEXPIRED LEASE TERM

FINANCIAL OCCUPANCY RATE

AVERAGE NET INITIAL YIELD

(Group share, excluding duties)

TOTAL FLOOR AREA (in millions of sq.m)

AVERAGE PRICE PER SQ.M (1)

PARIS REGION OFFICES

OFFICES OUTSIDE THE PARIS REGION

BUSINESS PARKS

12/31/2018 06/30/2019

€8.9bn €9.3bn

€8.7bn €9.1bn

4.7 years 5.0 years

93.4% 91.8%

5.9% 5.7%

1.8 1.8

4,500 4,700

7,500 8,000

3,150 3,200

2,100 2,300

(in %)

4.9%

Offices

					3.9%
					3.1%
					2.9%
0.4%
TOTAL
H1	2016	H12017		H1 2018		H1 2019

-3.1%

Business parks

• CONTINUED LFL GROWTH IN RENTAL INCOME
• STILL ATTRACTIVE YIELDS AND PRICES PER SQ.M IN A BULLISH MARKET

Note: 100% basis - (1) For buildings in operation

I 13

OFFICE INVESTMENT

DYNAMIC ASSET ROTATION IN THE OFFICE INVESTMENT PORTFOLIO SINCE 2015

€2.9bn in cumulative disposals since 2015, fully reinvested in the portfolio

4,0

Net cumulative investments and portfolio valuation

(in €bn, Group share)

			2.5
2,0		2.0	8.7
		8.5
1,0		0.9
	0.8	0.7
	0.2
	0.0

0,0 -0.2

9,5

2.9

9,0

8,5

8.3 (1)

0.0

8,0

Disposals completed on average 12.3% above appraised value

Difference between sale price and appraised value

(difference vs. appraised value as of 12/31 before the sale, in %)

2017

20.7%

20188.8%

+11.2%

	-0.4	-1.0
-1,0			7.7
			-1.2		7,5
-2,0	7.4			-1.8
		Disposals			Cumulative	7,0
		Investments (acquisitions, capex, etc.)
-3,0
	since 2015	-2.9
	Net investments since 2015

Valuation of the Office Investment portfolio (Group share, in €bn)

-4,0				6,5
2015	2016	2017	2018	Q1-Q3 2019

On a Group share basis

Notes: (1) Values as of 06/30/2019, after taking into account the sale of Crystal Park and 49% of the Eqho Tower and capex recorded in Q3 2019

1. Annualised IFRS rental income for the quarter preceding the disposal

2019 YTD

12.6%

2017-2019+12.3%

Further momentum gained in 2018-2019

• 2018-2019disposals: €1.6bn
• 11.2% above appraised value on average
• Rental income related to sold assets: €73.8m (2)

I 14

OFFICE INVESTMENT

PORTFOLIO REPOSITIONED,

VALUE CREATION DELIVERED

	December 2015	June 2019(1)
	Other large		Other large
	French cities		French cities
Paris region	1%	Paris 13%	9%
	Paris region	Paris 22%
excl. Paris
20%			excl. Paris
			12%
		La Défense /
		Peri-Défense
		27%		La Défense /
Inner Ring			Inner Ring
		Peri-Défense
27%			28%
		26%

Western Crescent	Western Crescent
12%
3%

• Continuous improvement in asset quality and portfolio positioning
• Increased exposure to

major cities outside Paris

(vs. reduced weight of the Outer Ring)

On a Group share basis

Note: (1) Includes disposals carried out since June 2019, i.e. Crystal Park and 49% of the Eqho Tower (€1,055m)

Total value creation of nearly €900m

In 4 years, achieved through

Dynamic asset management

I 15

OFFICE INVESTMENT

DEVELOPMENT: A KEY CONTRIBUTOR TO VALUE CREATION (60 %)

16 projects completed (5) since 2015

(~260,000 sq.m)

Investment amount on completion

Fair value on completion (1) (2)

YoC (3)

Yields (4) as of Sept. 30, 2019

ERV as of Sept. 30, 2019

€1.2bn	Value creation: €0.5bn
€1.7bn	(37% of the invested amount)

6.5%

Attractive YoC: 6.5%

4.8%

€80m	Additional rental income: €80m (6)

Financial occupancy rate as of Sept. 30, 2019

82%

On a 100% basis

Notes: (1) First appraised value after project completion, excluding properties sold since their completion

1. Including sales of properties which have been completed since 2015: €98.8m
2. Average estimated YoCs before project completion, excluding properties sold since their completion
3. Annualised net rental income from leased space plus potential net rental income from vacant space at estimated rental value, divided by the appraised value excluding duties of leasable space
4. Including 1 disposal
5. Potential rental income: headline for leased space + ERV for vacant space

A proven track record

Higher goals for development

I 16

OFFICE INVESTMENT

2019 COMPLETIONS: ~€180M (1) IN ADDITIONAL VALUE CREATION

Completed in Q1 2019

Completed in Q1 2019

Spring A

Nanterre

• Financial occupancy rate: 100%
• Floor area:
  18,540 sq.m

Pulse

Saint-Denis

•	Financial occupancy
	rate: 0%
•	Floor area:

Completed in Q1 2019

Completed in Q2 2019

Le Castel

Marseille

• Financial occupancy rate: 100%
• Floor area:
  5,960 sq.m

Factor E

Bordeaux

•	Financial occupancy
	rate: 79%
•	Floor area:

Completed

in Q4 2019

3 completions expected in Q4

• Eko Active (Marseille)

• Monaco

• B007 (Pont de Flandre)

• Total floor area: 16,040 sq.m

• Total pre-let space to date: 77%

Completed in Q1 2019

28,869 sq.m

Gambetta

Paris, 20th district

• Financial occupancy rate: 98%
• Floor area:
  20,033 sq.m

Completed in Q3 2019

10,922 sq.m

Lafayette B-C

Lyon

• Financial occupancy rate: 81% (3)
• Floor area:
  7,206 sq.m

 Value creation: 33% of total investment (€549m (2))

 Potential rental income (4) of €36m

2019 pipeline remains solid

Notes: (1) Calculation based on valuations as of June 30, 2019 - excl. Lafayette (valuation as of 06/30/19 + investments recognised in Q3 2019) and excl. Q4 completions (Icade estimates)

1. Initial value + investments recognised or estimated between the beginning of the project and its completion
2. Including leases signed but scheduled to start at a later date
3. Potential rental income: headline for leased space + ERV for vacant space

I 17

OFFICE INVESTMENT

1. GROWING 2019-2024 DEVELOPMENT PIPELINE

	Projects started	Projects not committed	Total pipeline
Number of projects	13	6	19
Investment amount (1)	€1.4bn	€0.9bn	€2.3bn
Floor area	244,000 sq.m	145,000 sq.m	389,000 sq.m
Expected rental income	€89m	€56m	€144m
(annualised)
Yield on Cost (2)	6.4%	6.2%	6.3%

€0.4bn added to the pipeline of non-committed projects

Average fair value-based YoC of 6.3% vs. an average capitalisation rate of 4.6%, i.e. a 170-bp difference

Estimated value creation increases to €0.7bn (vs. €0.5bn as of 06/30/2019)

On a 100% basis
Notes: (1)	Includes the fair value of the asset at project start, cost of works (incl. expenses, fees and tenant improvements) and carrying costs
(2)	Fair value-based YoC = headline rental income / cost of the project. This cost includes the fair value of the asset at project start, cost of works (incl. expenses, fees and tenant improvements) and carrying costs	I 18

OFFICE INVESTMENT

… GENERATING STRONG CASH FLOWS: €144M OF FUTURE RENTAL INCOME

Expected additional rental income

(headline, annualised, in €m)

Pre-let space for 2019-2020:70%

€37m€84m

				€18m
€7m	€25m			€44m in additional rental income
€5m				€7m
				expected in 2019-2020
2019	2020	2021	>2021
Total pre-let space represents 41%,
				pre-let		incl. 70% for projects to be completed by the end
						of 2020

Expected additional rental income, by geography, until 2024

(in %)

Other large French cities 8%	Paris 9%
Outer Ring <1%

La Défense / Peri-Défense

33%Paris Inner Ring

49%

I 19

OFFICE INVESTMENT

RECAP

OUR STRATEGY: ASSET ROTATION AND DEVELOPMENT PIPELINE

DELIVERING AN ATTRACTIVE TSR

€1.6bn	A €2.3bn development pipeline,
including €1.4m for started projects
of disposals	Yield-on-Cost for started projects stands at 6.4%
in 2018-2019
(+11.2% above
appraised value)	€0.7bn value creation	Pre-let space (1)
	represents 41%,
	potential in the pipeline	including 70% for
	projects to be
	(incl. €0.2bn captured
	completed by the
Additional rental income from	as of June 30, 2019)
the pipeline of €144m		end of 2020

Note: (1) Percentage of pre-let space relating to projects already started

I 20

SANTÉ ATLANTIQUE (Saint-Herblain, Nantes)

ELSAN

HEALTHCARE INVESTMENT

HEALTHCARE INVESTMENT

MARKET CONDITIONS CONTINUE TO BE

VERY FAVOURABLE BOTH IN FRANCE AND ABROAD

Fundamentals remain	The healthcare real estate market
attractive	remains active in France
	2019 expected investment volume:
Sustained growth in healthcare expenditure	€750m (€730m in 2018)
(including €385m in acquisitions by Icade Santé)
driven by medical standards and
an ageing population
Private acute care fees up in France
for the first time in 5 years	A deep European market
	Over 9M, investments totalled €5.2bn
Healthcare operators very active	with close to €6bn expected in 2019
both in France and internationally	(€6bn in investments in 2018)
	Source: RCA 2019
	Long-term care has become a major healthcare need...

1. 22

HEALTHCARE INVESTMENT

AN OUTSTANDING PORTFOLIO

CURRENTLY WORTH OVER €5bn

The Healthcare Investment Division currently owns 128 healthcare facilities in France

80 acute care facilities

incl. 1 under construction

19 post-acute care facilities

incl. 1 under construction

8 mental health facilities

21 nursing homes

Rapid portfolio growth

+13 facilities (+11% in 2019)

100% Occupancy rate

~5.8 Net initial yield

Extensive national coverage in France

Well-respected,high-quality facilities

Le Point's ranking of the best

public and private hospitals in France

Icade Santé's private hospitals

• 3 in the top 4
• 36% in the top 50 (out of the 352 private hospitals that were assessed)

		New opportunities
… and 32 facilities in Europe
	~20 years		Investments made
		> 5%
(excl. France)	32 long-term care facilities	Weighted average
	yield
	unexpired lease term
	incl. 7 off-plan projects
			Number of beds

3,800

1. 23

HEALTHCARE INVESTMENT

STRATEGY IMPLEMENTATION:

AHEAD OF SCHEDULE ON OUR ROADMAP

Very robust

leasing activity

Gross rental income: +10.5%

in Q3 2019

Very strong LFL growth

+2.6% LFL in Q3

Positive impact of completed

projects and acquisitions

2018 & 2019 projects: >€15m of rental income

Consolidation of Icade Santé's

market-leading position in acute care

Acquisition of the Confluent

private hospital for €194m

Continued implementation of the expansion strategy

YTD investments

~€735m

Further diversification into

long-term care facilities

Acquisition of 12 facilities

incl. 7 nursing homes for €191m

Increased international presence

Investments: >€300m

Germany added to the portfolio

1. 24

HEALTHCARE INVESTMENT

FURTHER STRENGTHENING OF RELATIONSHIPS WITH OPERATORS AND ONGOING DIVERSIFICATION

Atlantique polyclinic, Saint Herblain - Elsan

		Reflet de Loire nursing home,
Côte Normande PAC facility, Ifs (Caen) - Korian
	La Chapelle Saint-Mesmin (Orléans) - Korian

Confluent private hospital, Rezé (Nantes) - Vivalto Santé

New acquisitions of 6 healthcare facilities and 7 nursing homes for €385m

Strengthened relationships with our partners:

Ramsay Santé, Korian, Vivalto Santé

New operators: SGMR and Inicea

Completed projects which have consolidated our long-term relationships: Elsan and Ramsay Santé

• 9 projects under construction (with 1 completion scheduled for Q4)
• €48m in completed investments (incl. an estimated €8m in Q4)
• €3m in additional rental income (incl. an estimated €0.5m in Q4)

7 leases renewed with Elsan, SISIO and Clinipole: win-winpartnerships with >€12m in annual rental income

1. 25

HEALTHCARE INVESTMENT

LONG-TERM PARTNERSHIPS CREATE VALUE

A development pipeline of nearly €270m, representing close to €15m in additional rental income until 2022

Start of construction on the new Mornay post-acute care facility in Saintes

Investment: €10.2m excl. taxes

Operator: Korian

Start of construction on the future post-acute care facility in Lunel

Investment: €11.5m excl. taxes

Operator: Pôle Santé Lunellois (partnership between Clinipole and a public hospital)

Completion of the refurbishment of the Atlantique polyclinic in Saint Herblain (Loire-Atlantique)

Investment: €8.2m incl. taxes

Operator: Elsan

Planned construction of a new Joncs Marins post-acute care facility in Le Perreux-sur- Marne

Investment: €21.7m excl. taxes

Operator: Korian

Icade Santé has the skill and ability to develop new assets

I 26

HEALTHCARE INVESTMENT

INTERNATIONAL EXPANSION:

WELL ON THE WAY TO OUR 2022 TARGET

Off-plan acquisition	Acquisition of	Acquisition of 5 nursing
of 7 nursing homes	1 nursing home in Jesolo	homes in October 2019
in October 2018	in February 2019
Investment: €112m	Investment: €12m	Investment: €25m
excl. taxes	excl. taxes	incl. duties
Operator: Gheron	Operator: Universiis	Operator: Sereni Orizzonti

Acquisition of

20 long-term care facilities in November 2019

Investment: €266m excl. taxes

Operator: EMVIA Living

2022 target maintained:

€1.5bn

A strategy which was implemented less than 18 months ago...

~€420m in investments to date

I 27

HEALTHCARE INVESTMENT

VERY FAVOURABLE

FINANCING CONDITIONS

Icade Santé issues its first bond

"Investment Grade" rating

Benchmark size

Long-term

Pricing

BBB+,			Fixed rate:
€500m	10 years	0.94%
stable outlook	Annual coupon:

Standard & Poor's	0.875%

Very well received by the market

Attractiveness of Icade Santé's credit quality recognised...

making it easier to finance its expansion plan

Very positive leverage

I 28

HEALTHCARE INVESTMENT

RECAP

A 2019-2022 STRATEGIC PLAN REAFFIRMED

The Healthcare Investment Division is on track to meet its goals

Objective: to become the leading healthcare REIT in Europe

Leadership position in France further strengthened:

close to €430m invested in 2019, i.e. 40% of its 2022 investment plan

A buoyant and liquid international market:

close to €420m invested to date/a large number of projects

under study

Liquidity of Icade Santé: 2020/2022

1. 29

QUAI 8.2, BUILDING E (Bordeaux, Gironde)

DEVELOPMENT

PROPERTY DEVELOPMENT

UNDERLYING MEGATRENDS...

Increasing

importance of metropolitan

areas	Climate
	change

Digitalisation

Growing circular

economy

Demographic growth, migration flows and ageing population

... impacting our property development business

I 31

PROPERTY DEVELOPMENT

MARKET INSIGHT: STRONG DEMAND,

INCREASING CONSTRAINTS

A more challenging environment

• Intensified competition for land
• Sharp rise in construction costs
• Decrease in the number of building permits issued and still significant third-party objections relating to permits
• Uncertain outcome of the 2020 municipal elections

New expectation		Strong demand buoyed by:
from local authorities:		Demographic trends
comprehensive proposal
	Favourable home loan interest rates
(retail space, attractiveness,
	Advantageous government schemes
mix of uses)

1. 32

PROPERTY DEVELOPMENT

ICADE PROMOTION'S MARKET POSITIONING

1	Our strategic positioning

• A nationwide player across all 3 segments-Residential,
  Office and Medical-Social-with proven expertise in Healthcare
• Mass-marketplayer

(wide range of solutions from "standard" to "comfort")

• At the forefront of CSR

2	2018 revenue ranking (2)

3,5

3

2,5

2

1,5

1

0,5

0

1

2

3

4

5 Icade 7

8

9

3	Decline in revenue in 2019-2020,
expected to rise again by 2021
	Icade's Property Development revenue
		2,000
		1,500
		1,000
		500

-

2015

2017

2019

2021

2023

• Potential revenue (1) of €7.4bn to be generated in the medium term
• Growth strategy - Focus on the Office segment
• • Strengthened teams

Solid positioning and brand image A roadmap centred on growth

Significant revenue potential in the medium term

Notes: (1)	Revenue excl. taxes on a Group share basis incl. backlog, contracts won, stock of units currently for sale and land portfolio
(2)	Ranking based on data published in 2018, in €bn	I 33

PROPERTY DEVELOPMENT

OUTLOOK FOR 2024

	2 economic goals			4 business performance indicators
1	Growth in the residential development business	1	Economic revenue: €1.4bn in 2024,
	Target sales of c. 6,000 homes		including €1,000m for Residential, €350m for Office
				and €50m for Public Amenities and Healthcare
2	Growth in the office and medical-social segments	2	Residential and Office representing 25% of revenue
	Target of 30% of total sales volume		in 2021
			3	Return on equity (1) at 15% in 2024
			4	Current economic operating margin >7.0% in 2024

Note: (1) ROE (market guidance of 15%)

I 34

LA CARTOUCHERIE (Toulouse, Haute-Garonne)

CSR

CSR

5 HIGH-PRIORITY ISSUES TO ADDRESS THE PLANET'S

ENVIRONMENTAL AND SOCIAL CHALLENGES

Preserving

biodiversity

Territorial

cohesion and

inclusion

Impact on

climate change

Icade's

5 CSR priority

issues

2019 priority: low carbon

Scarcity of

resources and

circular economy

Employee

engagement,

agility and

collaboration

1. 36

CSR

STRENGTHENED LOW-CARBON COMMITMENTS

2025 OBJECTIVES

Office Investment

-45% in CO2 intensity between 2015 and 2025

Development

100% of new offices > 5,000 sq.m and

33% of new homes with the E+C- label by 2022

Healthcare Investment

Assisting at least 75% of

healthcare facility operators in optimising their energy performance starting in 2019

Reviewing the calculation method

meeting the highest standards

Defining new targets consistent with an ambitious pathway of "nearly 1.5°C"

Following up the actions taken through the development of new modelling tools made available to operational teams

1. 37

CSR

CONCRETE ACHIEVEMENTS IN 2019 ACROSS OUR THREE BUSINESS LINES

HQE certification

BREEAM certification

Labels

Development Healthcare Invest. Office Investment

Factor E - Bordeaux

Floor area: 10,922 sq.m

Gambetta - Paris, 20th district

Floor area: 20,033 sq.m

Greater Narbonne private hospital

Montredon-des-Corbières

Elsan group

Atlantique polyclinic

Saint-Herblain

Elsan group

Reinventing Paris 2 - Gobelins train station

Floor area: 19,800 sq.m

Wood Up - Montpellier

Floor area: 10,142 sq.m

Excellent	Very good
Excellent	Very good

Excellent

-

Very good

TBD TBD

Very efficient

-

-

E2C2 rating from the E+C- label for 12,300 sq.m of office space

BBCA label

biosourced building, level 2

1. 38

CSR

ICADE: INVOLVED IN REGULATORY DISCUSSIONS

Buildings' energy and carbon performance

• Property Investment Divisions: Decree relating to the energy renovation of office buildings by 2030, published in July 2019  Decree scheduled for Q1 2020
• Property Development Division: 2020 French Environmental Regulations (basis of the E+C- label)  Order scheduled for 2020

Law on circular economy

New legal framework for the analysis of the use of waste and reuse materials  Law scheduled before the end of 2019

Carbon neutrality

Methodological framework for the calculation of carbon sequestration by sector (forestry, agriculture, construction, etc.)

EU Sustainable Finance Initiative / Taxonomy

Establishment of a framework defining green assets and projects  Delegated acts scheduled for Q1 2020

Icade's involvement
in the discussions	Icade's position

• Icade involved in testing the E+C- label with Thémis (17th district of Paris), one of the first office developments to obtain the label with the highest rating (E2C2)
• Creation of Cycle Up, a digital platform dedicated to the reuse of building materials (50/50 JV with Egis)
• Around 30 tonnes of waste and 200 tonnes of CO2 emissions avoided, 85% costs savings
• Developing tools and methods implementing solutions such as renovation or reuse
• Active involvement, through the Corporate Forum and EPRA, in responding an EU public consultation
• Icade is the only French real estate company to be a member of the Corporate Forum on Sustainable Finance

1. 39

CSR

RECAP

Low carbon:

at the core of our CSR strategy

Achievements

that make us confident

in our ability to fulfil our commitments

Strong practical involvement in	Commitments and initiatives
discussions on new standards	on all of our CSR issues:
in order to promote	biodiversity, circular economy,
best practices	inclusion, air quality, ecomobility, etc.

1. 40

PORTES DE PARIS BUSINESS PARK (Saint-Denis, Aubervilliers, Seine-Saint-Denis)

7.

CONCLUSION

CONCLUSION

2019 PRIORITIES ARE BEING MET

1. Office development pipeline
   and "opportunistic" disposals of core offices
2. International expansion of the Healthcare Investment Division
3. Icade Promotion: launch of the large projects won in 2018
4. 2019 CSR priority: low carbon
5. Continued liability optimisation (LTV ratio, maturity)

Achieved as of 11/25/19

• €1.1bn in disposals
• 70% of the investments made dedicated to the pipeline

Further investments in Italy and

the first acquisition in Germany (€266m)

27 new projects in 2019 >€20m

Additional potential revenue: €1.5bn

KPIs aligned with a 1.5°C pathway; clear-cut operational implementation

Icade Santé issues its first bond (€500m, 10-yearmaturity, coupon of 0.875%)

Note: (1) Under a preliminary agreement

I 42

CONCLUSION

RIGOROUS FINANCIAL MANAGEMENT OF OUR STRATEGIC PLAN

On the asset side

Capital reallocated to higher-yielding assets

On the liability side

Financing

optimisation

Cash

Remain liquid

and opportunistic

Attractive disposals (~4.3% on average)

+

Proceeds reinvested in offices (>6%)… and healthcare assets (>5%)

=

Disciplined use of our capital

• Optimised timing of bond repurchases (not followed by a new issue) (€160m)
• Strong efforts to optimise Icade Santé's financing
• Conservative hedging policy (99% (1) of debt hedged at the end of 2019)
• Anticipated cash position as of December 31, 2019: > €600m
• €1.7bn of undrawn credit lines
• Financial capacity to invest intact

Notes: (1) Projected estimate at the end of the year

Financial policy in line
LTV ratio ~40%	I 43

CONCLUSION

AFTER THE PLAN'S SUCCESSFUL FIRST YEAR,

ICADE IS WELL POSITIONED TO ACHIEVE

ITS 2022 OBJECTIVES

Around €5bn

of investments over 4 years

€1.2 bn

with c. 25% invested to date

Healthcare Investment

€2.5bn in net investments

>30% of the objectives met to date

European presence (1)

2 of our 3 target countries already added to the portfolio

Active asset rotation:

volume of disposals doubled

€1.1bn i.e. c. 40% of the targets

2019-2022NCCF CAGR: c. +4.5%

Note: (1) Excluding France

I 44

CONCLUSION

2019 GUIDANCE RAISED

Initial guidance	New guidance

NCCF (in € per share)

As a reminder, impact of 2019 disposals: c. -4%

Stable	NCCF (in € per share)
excluding the impact
Stable including
of 2019 disposals
	the impact of 2019 disposals

2019 dividend: c. +4.5%

(payout ratio of 90% and distribution of part of the gains on disposals)

2019 Full Year Results: Monday, February 17, 2020

1. 45

APPENDICES

APPENDICES - THE FRENCH OFFICE MARKET

ATTRACTIVENESS OF THE PROPERTY INVESTMENT MARKET

A dynamic property investment market (excluding residential)

40																				34	35
35																		32		expected
			31
30		26														28			27
																			14,3
25
20														19
																				9,6
																				6,1
15
10								9												9,5			Estate
																			9,1
5																									Real
																				4,6	4,7			Paribas
0																									BNP
2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
				T1Q1			T2Q2			T3Q3		T4Q4			Forecast		2014-2018 average volume		Source:

Converging yields

8%

7%

6%

5%

4%

3%

2%

1%

0%

-1%

Avg. outside Paris region 4.6% Logistics 4.2%

Inner Ring 3.8% Lyon 3.7% Paris CBD 3%

10Y gov. bond: -0.3%

Highly attractive property yields against a background of low interest rates

A very active French market in 2019 as the supply of core products

meets international investors' demand for safer investments

1. 47

APPENDICES - THE OFFICE MARKET - MARKET UPDATE

GROWING METROPOLITAN AREAS OUTSIDE THE PARIS REGION

Leasing activity outside the Paris region

resilient to the slowdown

	3,0
of sq.m	2,5
millions	Paris region
2,0
in
12 months)	1,5
1,0
(rolling
6 largest cities outside Paris
0,5
Take-up	0,0

Dynamic

prime rents

	Prime rent	Change from
	in mid-2019	the end of 2016
Paris CBD	880	+7%
Inner Ring	390	+5%
Lyon	325	+10%
Marseille	310	+17%
Bordeaux	260	+13%
Toulouse	222	+11%
Lille	240	+9%

Deeper markets

thanks to high-quality supply

Leasing activity	vs. 5-year	% of vacant
(rolling 12M to end of Q3)	average	space that is new
454,000	+2%	20%
486,000	+50%	14%
414,000	+46%	30% (1)
127,000	-4%	8% (1)
160,000 (1)	+28%	28% (1)
157,000	+4%	12% (1)
304,000 (1)	+44%	23% (1)

Note: (1) In Q2

Sources: BNPPRE / JLL

Rents boosted by the increasing importance of business districts

such as Part-Dieu or Euro-Méditerranée

Diversification benefits the Office Investment business

I 48

APPENDICES - OFFICE INVESTMENT

MARKET OPPORTUNITIES OUTSIDE PARIS CBD

			Western
	Paris CBD	La Défense	Crescent	Inner Ring	Outer Ring	Icade's Office Investment portfolio
Physical vacancy rate	1.3% ▼	4.9% ≈	10.0% ▼	6.3% ▼	5.4% ≈	in the Paris region as of September 30, 2019
(end of Sept. 2019 and YoY change)
Take-up	314,000 sq.m	96,000 sq.m	336,000 sq.m	341,000 sq.m	168,000 sq.m
(9M 2019 and vs. same period in 2018)	(-3%)	(-21%)	(-28%)	(+31%)	(-37%)				SAINT-DENIS
							GENEVILLIERS		62,330 sq.m
Transactions > 5,000 sq.m	22%	29%	27%	56%	25%		23,520 sq.m		MAUVIN BUSINESS PARK
		PORTES DE PARIS
(% 9M 2019)	LA DÉFENSE-NANTERRE		21,980 sq.m
					BUSINESS PARK
Prime rent						279,180 sq.m	334,240 sq.m
								PONT DE FLANDRE
					La Défense
(€/sq.m/year excl. taxes and service charges,	€926/sq.m ▲	€550/sq.m ≈	€600/sq.m ▼	€430/sq.m ≈	€300/sq.m ≈	MILLÉNAIRE		90,690 sq.m
end of Sept. 2019 and YoY change)								144,670 sq.m
							Paris CBD
Average rent for new space							NEUILLY-SUR-SEINE
€737/sq.m ▲	€471/sq.m ≈	€392/sq.m ▲	€334/sq.m ▲	€215/sq.m ▲	RUEIL-MALMAISON	3,600 sq.m	PARIS, 8th DISTRICT	PARIS, 20th DISTRICT
(€/sq.m/year excl. taxes and service charges,		9,880 sq.m		20,030 sq.m
end of Sept. 2019 and YoY change)						21,730 sq.m
Price						Western Crescent	PARIS, 15th DISTRICT	Rest of
(€ incl. duties/sq.m, end of Sept. 2019	€16,996/sq.m ▲	€8,963/sq.m ▲	€5,517/sq.m ≈	€4,827/sq.m ▲	€2,913/sq.m▲			33,400 sq.m
and YoY change)										Paris
					BOULOGNE-BILLANCOURT
								Inner Ring
Supply under construction						4,980 sq.m
to be completed within 3 years	125,677 sq.m ▲	398,963 sq.m ▲	228,189 sq.m ▼	328,380 sq.m ▲	130,851 sq.m ▲			GENTILLY
	ISSY-LES-MOULINEAUX	13,710 sq.m
(in sq.m at the end of Sept. 2019							18,270 sq.m
and YoY change)										VILLEJUIF
Prime yields	3.0% ≈	4.0% ≈	3.25% ≈	3.80% ≈	5.15% ▼					29,770 sq.m
(end of Sept. 2019 and YoY change)		Outer Ring
Office investments	€1,588m	€2,458m	€2,043m	€1,998m	€1,040m			ORLY-RUNGIS BUSINESS PARK
(9M 2019 and vs. same period in 2018)	(-47%)	(x4.8)	(-26%)	(+48%)	(x1.2)				388,380 sq.m

	Very limited available supply in Paris
Sources: ImmoStat, JLL	 Demand from large occupiers shifting faster to other office markets

• Value creation opportunities in these markets

for large new or refurbished units

I 49

APPENDICES - THE OFFICE MARKET - MARKET UPDATE

NANTERRE AND LA DÉFENSE, THE FIRST AREAS

TO BENEFIT FROM MAJOR TRANSPORT INFRASTRUCTURE

Nanterre-a deep, highly segmented office market

Office stock in the Hauts-de-Seine department

(Q1 2019, millions of sq.m)

La Défense		3,3
		incl. 30% for
Nanterre	1,4
Les Terrasses de Nanterre
Boulogne-Billancourt	1,2

Issy-les-Moulineaux1,1

Levallois-Perret1,0

Rueil-Malmaison0,8

Neuilly-sur-Seine0,6

Already the best option in terms of accessibility

Number of people living less than 45 minutes away in 2018

The only area outside Paris accessible to a workforce numbering

• 3 million

Eole, the 1st large-scale public transport project

soon to be completed in the Paris region

3new stations	Extension of
to the west

Porte Maillot, La Défense and Nanterre la Folie

2022

1st major transport infrastructure project to be completed

after the northern section of Line 14 (2020/2021)

A workforce of over 250,000

Source: MBE Conseil according to CBRE and ORIE

Source: Price Hubble

will live less than 45 min away starting in 2024 thanks to the EOLE extension 55 km to the west

A well-developed area supported by the completion

of a large-scale infrastructure project

I 50

APPENDICES - THE OFFICE MARKET - MARKET UPDATE

LES TERRASSES DE NANTERRE: AN INCREASINGLY ATTRACTIVE AREA

RIGHT NEXT TO LA DÉFENSE

1. key market in the Peri-Défense area

Take-up in Nanterre since 2001

		< 5 000 sq.m			> 5 000 sq.m		Nanterre's % of Peri-Défense's leasing activity
			Largest occupiers in Nanterre (dark grey = Terrasses de Nanterre)	VINCI + TECHNIP
180				EDF+ SFR			BNP+ AXA						de-Hauts-Seine DepartmentCouncil				GROUPAMA FAURECIA+	60%
													56%
																						100%
160						SGTOTAL+															90%
140																				80%
	HSBC	AXA		MANPOWER			VEOLIA				FRANFINANCE				VINCI
40									61%	20%
120																						70%
100				41%			46%						44%		BNP						50%	≈ 70k
80																			34%	40%
60																							sq.m/year
											23%
														22%						30%
20																						10%
0																						0%

Attractive rents compared to Paris and La Défense

Average headline rent for transactions for new or refurbished space

750
700				Paris CBD
650
600				35%
				-
550
500				Rest of Paris
450	-22%			La Défense
-26%	20%-	Peri-Défense
26%-
400				Terrasses de Nanterre
350
300				Nanterre - other areas
250

200
Sources: ImmoStat and MBE Conseil for Nanterre
	Large corporate occupiers have steadily moved into the area
	Acceleration since 2017 as new transport links are scheduled	I 51

APPENDICES - THE OFFICE MARKET - MARKET UPDATE

LYON-ARECORD-BREAKING, FLUID MARKET

414k sq.m

taken up in the rolling 12 months to the end of Q3 2019

after a record 2018 with 310k sq.m and 280k sq.m on average over 5 years

Leasing activity in Lyon

Markets that complement each other

Gerland, Vaise and Carré de Soie: alternatives to tight supply

in Confluence and La Part-Dieu

Vacancy rate at 4%

in continuous decline since mid-2016 including second-hand supply

A fluid market

% of 1-year supply that is new

49%

Attractive market depth

6.6 million sq.m

Average annual take-up over the last 5 years

(thousands of sq.m)

€192

/sq.m

€195

/sq.m

€300	3.7%	€325
/sq.m
/sq.m

€220 /sq.m

No. 1 destination

for office investments outside the Paris region €760m/year over 2013-2018

13.7Prime rent

Prime yield

	Deep, self-sustaining occupier demand
	supporting speculative developments
Source: CBRE Research (Le grand pari des régions - October 2019)	I 52

APPENDICES - THE OFFICE MARKET - MARKET UPDATE

EUROMÉDITERRANÉE, IN THE HEART OF THE MARSEILLE OFFICE MARKET

Leasing activity in Marseille

€300

/sq.m

€180

/sq.m

€240

Extension

Initial area

4.6%

700,000 sq.m of offices

in Euroméditerranée, which is recent compared to Marseille's overall ageing property stock of 2.4 million sq.m

3rd largest business district

in France after La Défense and Part-Dieu

A key driver of the metropolitan

area's development

Rent of €310/sq.m in La Marseillaise, a high-rise building

≈126k sq.m taken up/year

on average over 2013-2018 in the metropolitan area

1. stable market for small- and medium-sized units, mainly driven by EuroMed

High % of pre-let space in EuroMed 1

/sq.m

Average annual take-up over the last 2 years

(thousands of sq.m)

13.5Prime rent

Prime yield

Sources: CBRE Research (Le grand pari des régions - Oct. 2019) |

C&W (Euroméditerranée study - Dec. 2018)

€212m

in office assets acquired

in Aix-Marseille, per year over 2013-2018>70% in Euroméditerranée

A renowned business district

with limited new supply in EuroMed 1

1-yearnew-build supply represents only 17%

of the vacant stock in Marseille

I 53

APPENDICES - DEVELOPMENT PIPELINE FOR THE OFFICE INVESTMENT DIVI SION

PROJECTS IN THE PIPELINE AS OF 09/30/2019

				Estimated
		Type	Property	date of
Project name	Location	of works	type	completion
B007	Flandre	Construction	Office	Q4 2019
EKO ACTIVE	Marseille	Construction	Office	Q4 2019
MONACO	Rungis	Refurbishment	Hotel	Q4 2019
19 QUAI RIVE NEUVE	Marseille	Redevelopment	Office	Q1 2020
LATÉCOÈRE	Toulouse	Construction	Office	Q2 2020
PARK VIEW	Lyon	Redevelopment	Office	Q3 2020
ORIGINE	Nanterre	Redevelopment	Office	Q4 2020
FONTANOT	Nanterre	Refurbishment	Office	Q4 2020
B034	Flandre	Refurbishment	Hotel	Q1 2021
FRESK	South Loop	Refurbishment	Office	Q1 2021
PÔLE NUMÉRIQUE	Portes de Paris	Construction	Office	Q3 2022
ÎLOT B32	Millénaire	Construction	Office	Q4 2023
ÎLOT B2	Millénaire	Construction	Office	Q4 2023

TOTAL PROJECTS STARTED

TOTAL PROJECTS NOT COMMITTED

TOTAL PIPELINE

				Remaining
	Rental		Cost (2)	to be invested
Floor area	income	YoC (1)	> Q3 2019	Pre-let
(sq.m)	(€m)	(€m)	(€m)
8,540			39	7	100%
8,300			30	4	34%
4,628			19	3	100%
3,112			15	4	100%	70%
12,717			41	17	100%
22,980			81	36	0%
65,000			447	156	78%
16,350			108	31	100%
4,519			30	19	100%
20,542			219	55.2	0%
9,400			45	40	0%
27,695			130	102	0%
40,582			190	150	0%
244,365	88.7	6.4%	1,395	624	40%
144,929	55.7	6.2%	901	728
389,294	144.5	6.3%	2,296	1,352

On a 100% basis

Notes: (1)	Fair value-based YoC = headline rental income / cost of the project. This cost includes the fair value of the asset at project start,
	cost of works (incl. expenses, fees and tenant improvements) and carrying costs
(2)	Includes the fair value of the asset at project start, cost of works (incl. expenses, fees and tenant improvements) and carrying costs	I 54

APPENDICES - HEALTHCARE INVESTMENT

SOLID FUNDAMENTALS FOR HEALTHCARE REAL ESTATE

Current health expenditure growing steadily in France

(consumption of care and medical goods (CSBM) + other costs)

Health expenditure rising constantly	7%	6%

factors				5%		4%	4%	4%	4%
Ageing population				3%
									3%			2%
										2%	2%	2%			2%
Explanatory												2%
Increase in long-term medical conditions	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2017
2016
	Improved technologies and increased requirements														1%

Current health expenditure (current €bn) Annual growth rate (%)

A highly regulated sector	Health expenditure as a % of GDP generally increasing
80% government-funded in France	17,2%
Efforts to reduce the national health insurance deficit	14,0%	11,5%	11,3%	10,1%	10,0%		2002		2007			2012			2017
							9,6%
		8,9%	8,8%
Reform to the funding of health facilities		10,0%	10,1%		8,3%
			8,0%		7,9%	6,8%			6,6%
		USA	France		Germany Netherlands		Belgium			Italy			Spain			United
	A less cyclical industry																	Kingdom
	growing faster than GDP

Source: DREES

Source: OECD

1. 55

APPENDICES - HEALTHCARE INVESTMENT

CONDITIONS ARE FAVOURABLE TO HALT THE DECLINE OF MEDICAL FEES

Social security in surplus for the 1st time since 2001 (€0.5bn) Average private medical fees since 2008 (private acute care)

Strong recovery of the "sickness" division (deficit of €0.8bn vs. €4.9bn in 2017)

+2.5%: sharper increase in the ONDAM healthcare spending limit (1)

Extra increase of +0.2 pp for 2019

2.3% until 2022 vs. 2.1% on average for 2014-2018 Marked rise for healthcare and medical-social facilities

Medical fees grew slower than expected

in 2018 with +1.4% vs. prediction of +2.6%, allowing for an additional, targeted allocation of €300m for 2018

0,8%				0.5% incl. 0.3 pp
0,5%				from quality incentive
		0,2%
0,0%	-0,1%
	-0,2%	-0,2%	-0,2%
Change in fees			-1,4%
Prudential coefficient fully applied		-2,0%
Actual change after redistribution
	-2,3%

+0.5% in private acute care fees in 2019

+0.2-pp increase, +0.3 pp relating to the distribution of €300m in IFAQ incentives (2)	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
1/3 of eligible facilities received the €50m in 2018 IFAQ

Prudential coefficient maintained at 0.7%

for all public and private facilities.

In 6 years, only 1 major deduction applied in 2016

PAC and mental health care fees published mid-April

PAC: +0.1% for a total funding allocation up +2%

Mental health: +0.7% for a total funding allocation up +2.7%

Sources: Hospimedia / Les Échos / French Official Journal

Notes: (1) National Healthcare Spending Limit (ONDAM)

(2) Quality incentive (IFAQ) - criteria currently being revised: indicators included for 2019 and calculation methods for the allocation to be published in May

I 56

APPENDICES - HEALTHCARE INVESTMENT

ATTRACTIVE YIELDS

An attractive risk premium in France

• Stable prime yields in H1 2019 in healthcare
• Attractive yield with a risk premium of over 125 bps compared to Paris CBD offices

Prime yields (at period end)

7%
6%
5%	Prime acute care 5%
PAC/mental health 4.50%
4%	Prime nursing homes 4.25%
3%	Paris CBD offices 3.0%
2%
1%
0%	10-year gov. bond 0.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018	H1
	2019

Prime yield compression stronger in Germany

• Compression of about 250 bps in 6 years
  with the German 10-year gov. bond well below its French counterpart
• Italy and Spain still have prime yields of at least 5.5%

Nursing home prime yields (at year end)

	Nursing home
2012	prime yield	2018

7.5 - 8%

7 - 7.5%

6.5 - 7%

6 - 6.5%

5.5 - 6%

5 - 5.5%

4.5 - 5%

4 - 4.5%

1. 57

APPENDICES - HEALTHCARE INVESTMENT

A STEADILY GROWING DEVELOPMENT PIPELINE

Type of works

PROJECTS STARTED

7 nursing homes	Development
Greater Narbonne	Development
private hospital
Joncs Marins	Development
PAC facility
Atlantique	Extension
polyclinic
Le Parc polyclinic	Extension
Saint-Charles	Extension /
private hospital	Renovation
Mornay PAC facility	Development
Saint-Herblain	Extension
polyclinic (Bromélia)

Operator

Gheron

Elsan

Korian

Ramsay Santé (formerly Capio)

Elsan

Sisio

Korian

Elsan

City

Italy (Piedmont,

Veneto,

Lombardy)

Montredon-des- Corbières

Le Perreux-sur- Marne

Puilboreau

Caen

La Roche-sur-Yon

Saintes

Saint-Herblain

Number of	Total	Remaining to
beds and	investment (1)	be invested	Yield on
places	(€m)	(€m)	cost (2) Completion	Pre-let
2,288	254.8	205.5	5.7%	100%
1,020	113.0	113.0	2020-2021	100%
283	47.8	28.0	2020	100%
136	21.9	21.9	2021	100%
100	20.0	2.1	2019	100%
288	19.6	17.4	2021	100%
210	14.1	13.5	2022	100%
82	10.2	7.6	2021	100%
169	8.2	2.1	2019	100%

Notes: (1) Cost of project as approved by Icade's governance bodies. This cost includes the fair value of land, cost of works and carrying costs

(2) YoC = headline rental income / cost of the project (as defined in (1))

I 58

APPENDICES - OFFICE INVESTMENT

PORTFOLIO MIX

Office Investment		Healthcare Investment
		Offices				France
		Business parks				Europe

Office and Healthcare Investment

(on a Group share basis)

(in €m)

Product mix as of

12/31/2018

Healthcare

Investment

23%

23%
3%		Office
	59%	Investment
15%	77%

Product mix as of

12/31/2019

Healthcare

Investment

26%

	2%
24%
3%	55%
16%

Other

	Product mix as of
	12/31/2022
	Healthcare
	Investment
	30%
	6%
	24%
Office	49%	Office
Investment	2%	Investment
74%	19%	70%

Healthcare to represent 30% of the portfolio by the end of 2022

International assets to represent 21% of the Healthcare portfolio by the end of 2022

1. 59

PROPERTY DEVELOPMENT

FURTHER DOWNTURN IN NEW HOUSING SUPPLY

New housing supply and new housing orders in the rolling 12 months to the end of Q3 2019

Stock of homes available for sale at quarter end

New housing supply (rolling 12 months)

Housing orders (rolling 12 months)

Average time on market for apartments

at quarter end (in number of quarters)

																			-0.3%
140 000																	130,283			129,330	6
120 000																	129,713			107,739	5
100 000																		4.1	-17.3%
																					3.6
																						4
80 000
																							3
60 000
																	118,085	-11.4%	104,576	2
40 000								Stock of homes available for sale
20 000																							1
0																							0
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
2014				2015				2016				2017				2018				2019

Source: ECLN

Following historical highs in 2017 and 2018, decline in new housing supply since December 2018 (-17.3%)and orders

But time on market still very short

I 60

PROPERTY DEVELOPMENT

SALE PRICES AND CONSTRUCTION COSTS: STRONG CORRELATION

Indices of construction costs and prices in Q1 2019

Index rebased to 100 in 2015

110,0
105,0
100,0
95,0
90,0
85,0
80,0
75,0
70,0

Apartment sale price (1)

	In €/sq.m
4 300	4,259
4 200	4,056
4 100
4 000
3 900
3 800
3 700
3 600
3 500

Producer Cost Index for Construction (ICP-F)

Construction Cost Index (ICC)

Housing Maintenance and Improvement Work Index (IPEA)

Volume peaks in 2017 and 2018 have resulted	Prices strongly up (+5.0% for multi-family housing
in significantly higher construction costs over the past 3 years: +8%	and +5.9% for single-family housing) vs. Q2 2018

Construction cost increase partly offset by rising prices

against a backdrop of strong demand

Source: ECLN
Note: (1) National quarterly data	I 61

PROPERTY DEVELOPMENT

MEASURES IMPLEMENTED AS PART OF THE ROADMAP

Operational		Evolving products
organisation		and services

Marketing

strategy

Brand policy,

Innovation and CSR

An evolving organisational structure to be closer to local needs and divisions

Creation of new management positions

• 1 Deputy CEO in charge of Offices in the Paris region
• 1 Deputy CEO in charge of Residential in the Paris region
• 2 Deputy CEOs outside the Paris region

Residential:

• Diversified sources of land/customers

Office:

• Capitalising on expertise, innovation and partnerships
• Extensive upgrading of existing properties

• in line with our need to remain competitive:

• Further implementation of the procurement policy and dedicated tools (BIM, etc.)

Increasingly digital and multi-channel

• Continuation of the "data driven" marketing policy
• Development of digital sales tools
• Increased internal sales through the opening of
  Icade Stores
• Development of a "digital marketplace" platform for property advisors

• BtoB & BtoC: increase in
  Icade's brand awareness through a dedicated innovation policy for our assets
• Distinctive CSR positioning:
  A key player in the development of low-carbon cities

1. 62

PROPERTY DEVELOPMENT

OFFICE DEVELOPMENT: BACKLOG (1)

Q3 2019	Q4 2019
Toulouse	Villejuif
PAC FACILITY	LEBON LAMARTINE
5,600 sq.m	18,000 sq.m

Vitrolles

BEEHIVE 4,980 sq.m

Q1 2020

Toulouse

DAURAT

7,034 sq.m

Chambéry St-Benoît5,286 sq.m

Q2 2020

Miramont de Guyenne

NURSING HOME 5,900 sq.m

Lyon

KAESER BIS 7,440 sq.m

	Q3 2020	Q1 2021	Q2 2021
	Toulouse		Saintes
		Livry-Gargan
	LATECOERE		PAC FACILITY
			PAC FACILITY
	12,505 sq.m		4,702 sq.m
			8,582 sq.m

Nîmes

PÔLE SPAP 5,729 sq.m

Canohes

NURSING HOME

5,803 sq.m

Note: (1) Transactions completed or currently under a preliminary sales agreement

I 63

PROPERTY DEVELOPMENT

POTENTIAL REVENUE OF €7.4BN IN THE MEDIUM TERM

€5.4bn for the residential segment:

20,000 homes (1)

Projects won	Backlog
or other options	€1.1bn
€1.6bn
> 6,500 units

Residential	Stock of
€5.4bn	units for sale
€0.7bn
	> 3,400 units

Land portfolio

€2.0bn

> 10,000 units

€2.0bn for the office segment

and 450,000 sq.m (1)

Backlog

€0.2bn

		Land portfolio
	Public, Office	€0.5bn
	167,000 sq.m,
	and Healthcare
	Group share
	Development
Projects won	€2.0bn
or other options

€1.3bn 283,000 sq.m

Data excluding taxes, Group share. As of September 30, 2019

Note : (1) Excl. backlog

I 64

CSR

OFFICE INVESTMENT DIVISION ALIGNED WITH A "NEARLY 1.5°C" PATHWAY

Target: -45% in CO2 intensity between 2015 and 2025

2016	Carbon neutrality target set in 2019

(in kg CO2/sq.m/year)

25

20

15		Icade
									2°C pathway, worldwide
											commercial real estate sector
		-45% vs. 2015
10								-50% by 2050 vs. 2015
5											2°C pathway, building sector, France
											-83% by 2050 vs. 2015
0											1.5°C pathway, building sector, France
										Target: 0 kg CO2e/sq.m in 2050
2015	2020	2025	2030	2035	2040	2045
2050

An attainable pathway

by means of a robust organisation, modelling tools and identified methods

1. 65

CSR

MAIN CARBON REDUCTION METHODS IDENTIFIED

Office Investment		Development

Methods

Objectives

Disposals

and

Renovation acquisitions Development pipeline

Energy	Changes
in national
switch
emission
by Icade
factors

Controlled carbon	Partially controlled or uncontrolled
reduction method	carbon reduction method

-45% in carbon intensity between 2015 and 2025

Low-carbon	Reuse	Parking	Major
materials	optimisation	renovation

Improved	Architecture	Improved	Energy
emission
performance	switch
factor
	Grey energy	Operational energy
Residential	Office
33% of new homes	100% of new offices > 5,000 sq.m
with the E+C- label by 2022	with the E+C- label by 2022

Example: €8.5m invested in LEDification and renewable energy
(financed by the Green Bond)	I 66

CSR

A POLICY RECOGNISED BY NON-FINANCIAL RATING AGENCIES

A- rating

In the top 18% of leading companies worldwide

In the top 5% of the

highest scoring companies. "Prime" status

Sector leader of listed
diversified companies	2 Gold Awards for the quality
in Western Europe
Score of 84/100	of financial and non-financial reporting

	In the top 6% of the highest scoring	Ranks 3rd out of 81
Score of AA	listed companies in the real estate
listed real estate companies in Europe
investment sector worldwide
(on a scale ranging from CCC to AAA)		and 4th out of 292 companies worldwide

3rd place in the ranking of women's representation in the governing bodies of SBF 120 companies

Score of 25/25

Atop the world's top 10 ranking

for the quality of Green Bond reporting

Score of 99/100

on the gender equality index

"Paris Climate Action" charter at the highest "Platinum" level

Score of b for the quality of the Green Bond

1. 67

APPENDICES - INVESTMENT

OFFICE AND HEALTHCARE PORTFOLIO:

GROWTH AND VALUE CREATION (GROUP SHARE)

(in €m)

	+3.7%	11,712
			on a reported basis
				220
11,291	61	162
	(22)

12/31/2018	Disposals (1)	Acquisitions (2)	Construction work (3)	Like-for-like change	06/30/2019
			and other (4)

• LIKE-FOR-LIKEINCREASE IN PORTFOLIO VALUE: + 2.0%
• ON A 100% BASIS, PORTFOLIO VALUE STOOD AT €13,844m (5) AS OF 06/30/2019 (VS. €13,397m AS OF 12/31/2018)

Notes: (1) Fair value as of 12/31/18 of assets sold during the period

1. Includes the payments made in H1 2019 (including duties and fees) as part of ongoing off-plan acquisitions
2. Includes, among others, maintenance works, tenant improvements, finance costs, pre-letting works and the change in Icade's stake in Icade Santé.
3. After restatement of transfer duties and fees, changes in the values of assets acquired during the financial year, works to properties sold and changes in the values of assets treated as financial receivables (PPP)

(5) Including assets consolidated using the equity method: Bellini tower (33%) and Bassin Nord - Millénaire shopping centre (50%)

I 68

APPENDICES - INVESTMENT

IMPLIED YIELDS (1) OF OPERATING ASSETS

			8.9%	8.6%	8,1%	7,8%
5.5%	5.3%	5,3%	5,0%			6.1%	6.0%	5,8%	5,8%	6.4%	6.1%	5,9%	5,7%

Offices	Business parks			Healthcare		TOTAL PROPERTY INVESTMENT
	12/31/2016		12/31/2017		12/31/2018		06/30/2019

Note: (1) Annualised net rental income from leased space plus potential net rental income from vacant space at estimated rental value, divided by the appraised value excluding duties of leasable space.	I 69
Historical data takes into account the transfer made in 2018 of the Millénaire and Pont de Flandre business parks to office assets

APPENDICES - INVESTMENT

LEASE EXPIRY SCHEDULE (1) FOR THE PROPERTY INVESTMENT DIVISIONS (IFRS RENTAL INCOME) (OFFICE AND HEALTHCARE)

80% of lease expiries are after 12/31/2021

			€101m
		€80m
€70m			€71m
		€61m	€63m
€53m		€52m
	€37m		€42m

€4m
T4 2019	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029	+
					Office	Business Park	Other	Healthcare

Note: (1) Expiry or first break

I 70

APPENDICES - KEY INDICATORS

FY 2018 KEY INDICATORS

INVESTMENTPROPERTY	+5.5%		DEVELOPMENTPROPERTY	+7.8%
€4.57 per share
		€1.3bn
	vs. €4.34 per share in 2017
	€338.9m			vs. €1.2bn in 2017
			PROPERTY DEVELOPMENT REVENUE
	EPRA EARNINGS
	FROM PROPERTY INVESTMENT
	+4.4%			+74.7%
	€11.3bn	(1)		€44.4m
			vs. €25.4m as of 12/31/2017
	(Group share)			NCCF (GROUP SHARE)
	vs. €10.8bn as of 12/31/2017
	PROPERTY INVESTMENT PORTFOLIO
	+120bps (like-for-like)		+690bps

LIABILITIES

-4bps	INDICATORS	+5.9%
	€89.8 per share
1.55%
	vs. €84.8 per share as of 12/31/2017
vs. 1.59% as of 12/31/2017	GROUP	€6.7bn
AVERAGE COST OF DEBT	EPRA TRIPLE NET ASSET VALUE
>6years		(Group share - fully diluted in euros)
	+8.9% (vs. restated)
6.4years
	€5.15 per share
vs. 6.5years as of 12/31/2017		vs. €4.73 per share in 2017
AVERAGE DEBT MATURITY		€381.7m
		GROUP NCCF

93.4%

vs. 92.5% as of 12/31/2017

17.4%

vs. 10.5% as of 12/31/2017

REFLECTING WELL-ORIENTED RESULTS

OFFICE PROPERTY INVESTMENT	PROPERTY DEVELOPMENT ROE
FINANCIAL OCCUPANCY RATE

FOR THE THIRD YEAR IN A ROW

Note: (1) Icade share, excluding duties. Portfolio value on a 100% basis: €13.4bn as of 12/31/2018 vs. €12.8bn as of 12/31/17

I 71