Befimmo SA: Annual results 2019 - Presentation

2

▪	Significant letting activity	131.000 m² of lettings (70.000 m² in ZIN project and 10.900 m² in Paradis Express project)
▪	Solid occupancy rate	Occupancy stable at 94.4%
▪	Developments on track	76% of office pipeline prelet
▪	Rental growth	EPRA like-for-like rental growth at 4.7%
▪	Rewarding asset rotation	1 acquisition (Loi 44, CBD Brussels)
		1 disposal (Pavilion, CBD Brussels)
		4 disposals of non-strategic assets (Eagle in periphery and 3 Fedimmo assets)
		Realised capital gain on disposals of €0.51 per share
▪	Coworking on track	93% occupancy for mature spaces, developments on track

• Fair value (inv. properties) Up 4.1% on a like-for-like basis to €2.8 billion

▪	NAV	€59.29 per share (consolidated, group share)
▪	EPRA earnings	In line with forecast, €3.29 per share (consolidated, group share)
▪	Dividend forecast 2020	Stable at €3.45 gross per share
▪ Return on share price	Strong performance of 18.7% over 2019

• Equity financing
• Debt ratio (LTV)
• Financing cost
• Debt maturity

Private placement of treasury shares (€69 M), optional dividend (€11 M) Decrease by -4.6% to 39.0%

1.9% (2% at 31.12.2018)

4.4 years (4.8 years at 31.12.2018)

4

Emergence of new technologies and digital revolution

Talent attraction

Work-life balance

and well-being

Metropolisation

Mobility

Environmental concerns

6

Between 0% and 50% of target Between 50% and 75% of target

	2019	2018
EPRA BPR	Gold	Gold
EPRA sBPR	Gold	Gold
CDP	Awareness C	A- Leadership
GRESB	83% Green Star	81% Green Star
MSCI	A	A
OEKOM*	-	Prime C+
VIGEO EIRIS	Not publicly	Not publicly
available	available
Standard Ethics*	-	EE-
Sustainalytics	56/100	64/100

*Befimmo hasn't received a OEKOM questionnaire in 2019. Befimmo wasn't contacted by Standard Ethics

in 2019. Other participation on voluntary basis.

7

Between 75% and 100% of target Continuous and set up of measures

1. 000

1. 000

400 000

300 000

200 000

100 000

-

2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Belgian administration			EU Institutions					Embassies & Representations
Corporate < 2,500 m²			Corporate > 2,500 m²

Sources: Cushman & Wakefield | JLL

20%
16%
12%
8%
4%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
14	14	14	14	15	15	15	15	16	16	16	16	17	17	17	17	18	18	18	18	19	19	19	19
	Central districts		Decentralised districts			Periphery		Brussels market
330
300
270
240
210
180
150
120

Prime Central		Prime Decentralised		Prime Periphery

9

1800													14%
1600													12%
1400													10%
1200
1000													8%
800													6%
600													4%
400
200													2%
0													0%
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
		Grade A	Grade B		Grade C		Vacancy rate
3
2
1
0
2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
				Brussels office	Regional office

Sources: Cushman & Wakefield

600
500	Project Without Building Permit
Project With Building Permit
	Under construction | Pre-let
400	Under construction | Available
	Completed
300
200
100
0

10

12

5% 18%

9%

17%19%

3%

4% 13%

4%7%

Brussels Leopold district

Brussels North area

Brussels Centre

Brussels airport

Brussels Louise district

Brussels periphery

Brussels decentralised

Flanders

Wallonia Luxembourg city

City centre assets

Coworking

Decentralised, peripheral and regional assets

13

100%

140 000		131.000 m²
		Renegociations

94.4%

95%

120 000

New lettings (single tenant > 5 000 m²)

Other new lettings

90%

85%

80%

75%

70%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

					ZIN
					70 000 m²
	100 000				Paradis Express
					10 900 m²
m²	80 000
In
					Brederode
			Quatuor		Corner
	60 000		22 000 m²		7 000 m²
		Eupen
			7 000 m²
	40 000
	20 000
	0
	2014	2015	2016	2017	2018	2019

14

• Loi 44 (6,290 m²) Brussels CBD
• Redevelopment in combination with Joseph II (delivery in 2023)

• 3 assets for 6,100 m² BE Provinces
• End of lease, up for reconversion
• Sold with realised capital gain of €0.02/share

	▪	Pavilion (18,000 m²) Brussels CBD		▪	Eagle Building (7,400 m²) Brussels periph.
	▪	Residual lease duration: 6 yrs		▪	Largely vacant asset
	▪	Sold with realised capital gain of €0.39/share		▪	Sold with realised capital gain of €0.11/share

15

16

• Brussels CBD, Centre
• Delivery 2020
• Total construction cost: €22 M
• Yield*: ±5.5%

• Liège Guillemins
• Delivery 2021
• Total construction cost: €51 M (offices)
• Yield*: >6%

• Wallonia
• Delivery H1 2020
• Total construction cost: €14 M
• Yield*: ±5.4%

• Brussels CBD, North
• Delivery 2023
• Total construction cost: €375 M
• Yield* on all functions: 4.5%

• Brussels CBD, North
• Delivery Q1 2021
• Total construction cost: €158 M
• Yield*: >5.3%

• Brussels decentralised
• Delivery in 2023
• Total construction cost to be committed: €50 M

* Based on committed ongoing projects. Yields calculated on total investment cost.

17

18

P 19

▪	Brussels CBD		▪	Brussels CBD		▪	Brussels CBD
▪	2,300 m²		▪	3,300 m²		▪	2,100 m²
▪	Open since Q1 2013		▪	Open since Q4 2014		▪	Open since Q4 2016

▪	GD of Luxembourg		▪	Brussels decentralized
		▪	Brussels periphery
▪	2,200 m²		▪	4,300 m²		▪	2,600 m²
▪	Open since Q2 2018		▪	Open since Q2 2018		▪	Open since Q4 2019

* A space is considered as mature after 3 years of existence (Europe, Louise and Stéphanie).	20

▪	Brussels CBD		▪	Brussels CBD		▪	Brussels CBD
▪	7,200 m²		▪	9,000 m²		▪	+ 1.700 m²
▪	Opening in 2020		▪	Opening in 2021		▪	Opening in 2020

▪	Liège		▪	Brussels CBD		▪	Brussels CBD
▪	4,300 m²		▪	10,000 m²		▪	+ 1.800 m²
▪	Opening in 2021		▪	Opening in 2021		▪	Opening in 2020

* The co-working spaces planned in the Befimmo buildings are generally fitted out by Befimmo (real-estate operator) and handed over to Silversquare as "turnkey" premises.	21
Silversquare (co-working operator) invests in the furniture and IT for these spaces. For the spaces provided in third-party buildings, Silversquare invests in the fitting-out as well as in furniture and IT.

(in € thousand)	31.12.2019	31.12.2018
Net rental result	134 786	143 566
Net property charges	-14 347	-13 588
Property operating result	120 440	129 978
Corporate overheads	-14 559	-14 282
Other operating income & charges	-1 177	- 447
Operating result before result on portfolio	104 703	115 249
Operating margin	77.7%	80.3%
Gains or losses on disposals of investment properties	12 961	343
Net property result	117 664	115 592
Financial result (excl. changes in fair value of financial assets and liabilities)	-22 801	-20 545
Corporate taxes	- 741	- 566
Deferred taxes	- 472	- 219
Net result before changes in fair value of investment properties and financial assets and	93 650	94 263
liabilities
Changes in fair value of investment properties	109 882	-5 514
Changes in fair value of financial assets and liabilities	-22 921	-5 901
Changes in fair value of investment properties & financial assets and liabilities	86 961	-11 415
Net result	180 611	82 628
EPRA earnings	83 605	94 139
Net result (in € per share)	7.03	3.24
EPRA earnings (in € per share)	3.26	3.68

• Net rental result -6.1% YoY: mainly expiry of lease in WTC 2
• Like-for-like+4.0% YoY:
  effect of new leases and indexation
• Mainly linked to expiry of gain on charges WTC 2
• Capital gain on disposals (mainly Pavilion)
• One off impact of restructuring of fixed rate sales of receivables of Pavilion to market rates
• Strong increase: thanks to capital gains and positive fair value change on investment properties (partially offset by negative fair value change of hedgings due to declining interest rates)
• In line with forecast

P 23

▪ Real-estate operator Net result:	€7.03 per share
▪	Coworking Net result:	€0.02 per share
▪ Consolidation of participation in Silversquare:	-€0.10 per share
▪	Consolidated Net result (group share):	€6.95 per share

▪ Real-estate operator EPRA earnings:	€3.26 per share
▪ Coworking contribution to EPRA earnings:	€0.03 per share
▪ Consolidated EPRA earnings (group share) :	€3.29 per share
▪ Net realized capital gain on disposal of Pavilion:	€0.30 per share
▪ Amount available for distribution* for 2019:	€3.59 per share

▪ Confirmation of the 2019 dividend:

€3.45 per share

* Consolidated EPRA earnings plus capital gain realized (net of the absence of income from the Pavilion building in 2019) of €0.30 per share.

P 24

Offices as at 31.12.2019	% of the	12 months	EPRA
	portfolio	like-for-like	NIY
		change

• Overall value: €2.8 billion
• All CBD locations: +5.4%
• All non CBD locations: -1.3%
• Quality of Befimmo's portfolio

Brussels CBD and similar(c)	48.3%	+1.0%	4.7%
Brussels decentralised	3.0%	+3.7%	4.6%
Brussels periphery	4.3%	-2.2%	5.8%
Flanders	17. 0%	+0.4%	6.0%
Wallonia	8.3%	+3.3%	4.4%
Luxembourg city	5.0%	+13.1%	3.9%
Properties available for lease	85.9%	+1.6%	4.9%

• Important letting activity (a. o. ZIN transaction)
• Value creation in developments
• Further compression of yields

Properties that are being
constructed or developed for own	14.1%	+22.1%
account in order to be leased
Investment properties	100.0%	+4.1%
Total	100.0%	+4.1%

25

1700

59.29 €/share

1600

1500

56.42 €/share

1400
Final dividend	Other elements	Net result	Private placement	Interim dividend of
2018		(group share)	of 1.266.300	the 2019 fiscal
			31 December 2019	treasury shares	year net of capital
1300					increase

1200

NAV	NAV
31.12.2018	31.12.2019

26

50%

4%

40%

30%

3%

39.0%

2%

2%

1%

20%														0%
2014	2015	2016	2017	2018	2019		2014	2015	2016	2017	2018	2019

27

Covered USPP/EUPP maturity		Covered banking debt maturity
Banking debt		USPP/EUPP

200

180

160

140

120

100

80

60

40

20

0

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Q2 2026

Q3 2026

Q4 2026

Q1 2027

Q2 2027

Q3 2027

Q4 2027

1800	USPP/EUPP	Sales of receivables
1600	Bilateral bank lines (used)	Commercial paper
Bilateral bank lines (back up CP)	Bilateral bank lines (reserve)
1400	Amortizing loans
1200			331
1000		CP with full		Financing
352	back-up bank	352
	reserve
800		lines

600	208	208
		53		53
400
	475		475		33%
200
0
	Debt		Financing

• Weighted average duration of financing:
  4.4 years
• Confirmed credit facilities:
  € 1,421 million (of which 77% in use)
• €69 M (private placement) and €11 M
  (optional dividend) in equity raised in December 2019
• Ffinancing needs covered until 31.12.2020 at constant perimeter
• Large remaining headroom to covenants
• BBB/Stable/A-2rating by S&P (Sept. '19)
• Extension of hedging policy up to 20 years
• Hedge ratio >70% until Q2 2022 and >50% until Q4 2025

28

• Portfolio in transition period
• Large redevelopments ➔ return of rental income expected between 2021 and 2023
• Development of BeLux network with Silversquare ➔ positive contribution expected by 2023
• Divided aligned on medium/long term objectives
• Dividend temporarily higher than EPRA earnings
• EPRA earnings back above dividend expected by 2024
• Portfolio rotation ➔ net realised capital gains should contribute to the amount available for distribution

			At constant perimeter
	2019	2020	2021	2022
EPRA earnings real-estate operator	3.26	2.89	2.78	2.83
(in € per share)
Contribution to the EPRA earnings of the coworking activity	0.03	-0.01
(in € per share - group share)
Consolidated EPRA earnings	3.29	2.88
(in € per share - group share)

* At constant perimeter.		30

• Belgian specialist in work environments
• High quality portfolio in Central Business District locations
• Network of a variety of workspace solutions - full flexibility in time, space and facilities
• Providing smart and sustainable places to work, meet, share and live
• Proactive asset management to maintain high occupancy

▪ Portfolio rotation:	disposals to maintain high quality portfolio and crystalize values
	value add investments with high redevelopment potential

• Strong office development pipeline: €492 million to be invested by 2023, 76% of office pipeline prelet, organic growth in a low yielding market environment
• Strong Silversquare coworking pipeline: ambition: network of 30 spaces by 2025
• Solid forecasts and dividend
• Ambition to be a front-runner and example in its business based on a client-centric approach
• Innovation: continuous tracking of business drivers
  (new technologies, digital revolution, talent attraction, work-life balance, well-being, metropolization, mobility and environmental concerns)
• CSR: fully integrated in 6 strategic axes, action plan with KPI's until 2030

▪ Future focused team

33

Thank you!

Happy to answer your questions!

34

BENOÎT DE BLIECK

• CEO of Befimmo since 1999
• Extensive experience (38 years) in various businesses across the real estate value chain (contracting, development, asset investment and management)
• Fellow member of the Royal Institution of Chartered Surveyors (RICS)
• Member of the board of the Belgian Professional Union of the Real-Estate Sector (UPSI)

LAURENT CARLIER

• CFO of Befimmo since 2006
• 20 years of experience as Finance Director
• President of the BE-REIT association (Belgian REITs)
• Member of the EPRA Reporting & Accounting Committee

CAROLINE KERREMANS

• Head of IR & Communication since 2013
• 11 years of experience in IR and communication (of which 9 years in real estate)
• Member of the EPRA IR Committee

35

37

				Investment realised in 2019	Total investment	Percentage of completion	Yield on total investment
				(in € million)	(in € million)	(land included)
	Committed ongoing projects
	Brederode Corner	12.5	22	77%	±5.3%
	Brussels CBD, Centre
	Eupen Courthouse(a)	3.1	14	100%	±5.4%
	Wallonie, Eupen
	Paradis Express (offices)	3.7	51	17%	> 6%
	Wallonia, Liège
	Quatuor	32.1	158	34%	> 5.3%
	Brussels CBD, North
	ZIN	23.1	375(b)	10%	±4.5% (all functions included)
	Brussels CBD, North
	Ongoing projects to be committed
	WTC 4	1.0	140	15%
	Brussels CBD, North
	PLXL
	(currently "La Plaine")	1.2	50	3%
	Brussels decentralised
	Other investments	17.7
	Total	94.4

P 38

• 70,000 m² of offices
• Offices 100% pre-let
• Multifunctional site (in addition to offices: 5,000 m² of coworking, 111 apartments, 240 hotel rooms, sports, leisure, restaurant, rooftop, etc.)
• Construction cost (all functions) of €375 million
• Yield on total investment of 4.5%
• Completion in 2023
• "be.exemplary award 2019" category "Big private projects"

39

• Almost energy neutral
• BREEAM
  "Excellent" targeted in the "design" phase

• Project fully integrated into the existing urban system
  and open to the city

• Fusion of functions
• Spacious office floors (>4,000 m²) with free heigt of 5m
• Circular philosophy
• Adaptable to the needs of tomorrow

40

• 60,000 m² of offices
• 50% to let
• Multifunctional site
• Construction cost (all functions) of €158 million
• Yield on total investment > 5.3%
• Completion in 2021
• Take a look =>

41

42

• 21,000 m² of offices
• 52% pre-let
• Multifunctional site
• Construction cost (offices) of €51 million
• Yield on total investment > 6%
• Completion in 2021

43

• One building sold in state of future completion to Gands: Yust coliving concept
• Rights in rem sold to a real- estate developper to build the other four residential buildings on the site

• 400 solar panels
• BREEAM "Excellent" targeted in Design phase

44

Opening

Silversquare

Silversquare	Silversquare
occupancy: 4%	occupancy: 80%

Opening food

« Les Compagnons »

45

Brussels office market	31.12.2019	31.12.18	31.12.2017	31.12.2016
Take-up (m²)	543 000	361 000	399 513	441 942
Vacancy rate (%)	7.57%	7.98%	8.78%	9.12%
Prime rent (€/m²/yr)	320	315	305	275
Investment volume offices (€)	2.1 billion	1.9 billion	1.4 billion	1.5 billion
Prime yield (%)	4.10%	4.25%	4.40%	4.50%

Liège

46

(in € million)	31.12.2019	31.12.2018
Investment and held for sale properties	2 814.8	2 655.3
Other assets	97.4	79.8
Total assets	2 912.3	2 735.1
Shareholders' equity	1 603.9	1 443.2
Financial debts	1 134.7	1 178.5
non current	637.6	735.5
current(a)	497.2	443.0
Other debts	173.6	113.4
Total equity & liabilities	2 912.3	2 735.1
LTV	39.0%	43.6%

(a) According to IAS 1, the commercial paper needs to be recorded as a current liability. It is important to note that the Company has confirmed bank lines in excess of one	47
year as a back-up for the commercial paper.

• Extension of hedging policy up to 20 years
• Hedge ratio >70% until Q2 2022 and >50% until Q4 2025

Annual average		2020	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030	2031	2039
	Notional	47	20	0	00		0	0	00		0	0	0	0
	(€ million)
CAP
Average rate (a)	0.9%	1.2%	1.2%	0.0%	0.0%	0.0%	0.0%	0.0%0.0%	0.0%	0.0%	0.0%	0.0%
	(in %)
	Notional	20	20	0	0	0	0	0	0	0	0	0	0	0
	(€ million)
FLOOR
Average rate (a)	0.5%	0.5%	0.5%	0.0%	0.0%	0.0%	0.0%	0.0%0.0%	0.0%	0.0%	0.0%	0.0%
	(in %)
Fixed-rating	Notional	1109	1072	1058	1000	933	856	716	520	227	125	100	100	37
(€ million)
financing
(incl. IRS)	Average rate (a)	0.8%	0.8%	0.8%	0.8%	0.8%	0.9%	0.8%	0.9%	0.8%	0.7%	0.8%	0.8%	0.7%
	(in %)

(a) Average fixed rate excluding credit margin and including options on swaps (SWAPTIONS) considered at the maximum rate.

48

		Rental space	Location	Type	Forecasts (in € million)
					2020	2021	2022
	Committed ongoing projects
	Brederode Corner	7 000 m²	Brussels CBD, Centre	Renovation	5.0	0.0	0.1
	Paradis Express(a)	35 000 m²	Liège, Wallonia	Construction	20.6	24.4	0.0
	Quatuor	60 000 m²	Brussels CBD,	Construction	74.5	29.6	0.0
			North
	ZIN	110 000 m²	Brussels CBD,	Construction	49.1	67.1	128.6
			North
	Ongoing projects to be committed
	WTC 4	53 500 m²	Brussels CBD,	Implementation of the permit	1.8	5.6	0.0
			North	According to commercialisation
	PLXL	15 000 m²	Brussels decentralised	Redeveloppement	0.8	6.0	29.2
	(currently "La Plaine")
	Pachéco	5 800 m²	Brussels CBD, Centre	Redeveloppement	0.2	0.4	23.3
	Other investments				57.5	31.3	32.3
	Total				209.5	164.4	213.5

(a) Construction cost of the office part

49

	(in € thousand)	Realised		Forecasts
		2018	2019	2020	2021
	Rental income	135 203	135 939	141 046	137 717
	Charges linked to letting	- 417	- 620	- 625	- 630
operator	Net rental result	134 786	135 318	140 421	137 088
Net property charges	-14 347	-16 313	-16 380	-14 115
Property operating result	120 440	119 005	124 041	122 972
Corporate overheads	-14 559	-15 932	-16 677	-17 115
estate	Other operating income and charges (excl. goodwill impairment)(a)	-1 177	-3 360	-9 305	-3 521
Operating result before result on portfolio	104 703	99 713	98 059	102 337
-	Financial result (excl. the changes in fair value of the financial assets and liabilities and close-out
Real
costs)	-20 358	-20 319	-21 111	-23 033
	Corporate taxes	- 741	-1 041	-1 239	-1 472
	EPRA earnings	83 605	78 353	75 710	77 831
	EPRA earnings (in € per share)	3.26	2.89	2.78	2.83

Contribution to the EPRA earnings of the coworking activity CW (in € per share) (group share)

TOTAL Total EPRA earnings (in € per share) (group share)

Average number of shares

0.03-0.01

3.292.88

25 676 219

27 061 683

27 273 429

27 498 001

50

140

130

120

110

100

90

12/18

01/19

02/19

03/19

04/19

05/19

06/19

07/19

08/19

09/19

10/19

11/19

12/19

01/20

Befimmo total return index

BEL20 total return index

EPRA Eurozone total return index (RPEU)

23.0%

32.6%

25.8%

P 51

• Specific regulation and high degree of transparency, accounts in IFRS
• Real-estateassets quarterly valued by independent real-estate experts
• Controlled by the Financial Services and Markets Authority (FSMA)
• Risk diversification: maximum 20% of portfolio invested in one property unit
• Listing on stock exchange, minimum free float of 30%
• Debt ratio <65% (Target internal Loan-To-Value ratio around 50%)
• Distribution of 80% of "cash flows" as dividend
• "Tax transparency": reduced base for corporation tax, taxation at investor level (withholding tax)
• Partnerships allowed

52

This presentation is made for the sole benefit of financial analysts and qualified institutional investors and is not to be considered as an incentive to invest or as an offer to acquire Befimmo shares under any laws of European countries or the USA or Canada.

The information provided herein is extracted from Befimmo annual reports, half-yearly reports and press releases but does not reproduce the whole content of these documents, which prevail and ought to be analyzed before any recommendation or operation regarding Befimmo shares is made.

This presentation contains statements and estimates about anticipated future performances. These statements and estimates are not to be construed as implying a commitment from Befimmo to achieve them. Whether or not they will actually be achieved depends on a number of factors which are beyond the reach of Befimmo's control, such as developments in the real estate and financial markets.

Such statements and estimates are based on various assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable when made but may or may not prove to be correct.

Actual events are difficult to predict and may depend upon factors that are beyond the Company's control. Therefore, actual results, financial condition, performances or achievements of Befimmo, or market results, may turn out to be materially different from any future results, performances or achievements expressed or implied by such statements and estimates.

Given these uncertainties, investors are invited not to unduly rely on these forward-looking statements and estimates. Furthermore, forward- looking statements and estimates only speak as of the date of this presentation.

Befimmo disclaims any obligation to update any such forward-looking statements or estimates to reflect any change in the Company's expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement or estimate is based , except to the extent required by the Belgian law and in particular the Royal Decree of November 14, 2007. In no event Befimmo may be held liable for obligations which are incumbent on financial analysts and disclaims any liability in that regard.

Any reference to the portfolio, assets, figures or activities of Befimmo should be understood on a consolidated basis, including those of its subsidiaries, unless it is clear from the context or expressly stated that the contrary is intended.

53

Befimmo SA

Chaussée de Wavre 1945, 1160 Brussels

[e-mail]

[e-mail]

[e-mail]

Tel.: [phone]

www.befimmo.be

54