Altareit : 2019 Revenue1 of 1 273 million, up +9.1% Decrease in net debt2 (-€87m)

Press release	2020 half-year results
	Paris, August 6th, 2020, 5:45 pm

2019 Revenue1 of 1 273 million, up +9.1%

Decrease in net debt2 (-€87m)

Residential: strong step-up in activity as the lockdown ends

• Resumption of work on building sites in early May, brisk pace in June
• New orders: €1,921 million incl. VAT (+30%) and 6,667 units (+25%)
• Notarised sales: €1,883 million (+94%)
• Revenue1: 1,074.2 million (+20%)
• Pipeline: €13.4 billion (+5%)

Business property: delays in delivery

• Delivery of Orange's future headquarters in Issy-les-Moulineaux postponed to 2021
• Delivery of Richelieu, Group's new headquarters

Half-year results
-	Revenue1:	€1,373.4 million (+9%)
-	Recurring operating income3:	€80.6 million (+8%)
- Net income, Group share4:	€57.0 million (+6.5%)
-	Gearing5:	0.26x (vs 0.36x at 31 December 2019)

Paris, August 6th 2020, 5:45 pm. Following review by the Supervisory Board, Management approved the half-year financial statements ended 30 June 2020. The Auditors' certification report is issued with no reservations.

ABOUT ALTAREIT - FR0000039216 - AREIT

A 99.85% subsidiary of the Altarea Group, Altareit is a pure player in property development in France. Thanks to its unique multi-product expertise, Altareit is a pioneer in mixed-use projects in French gateway cities. Altareit has the know-how in each sector required to design, develop, commercialise and manage made-to-measure real estate products. Altareit is listed in compartment B of Euronext Paris.

FINANCE CONTACTS

Eric Dumas, Chief Financial Officer	Catherine Leroy, Investor Relations
[e-mail], Tel: + 33 1 44 95 51 42	[e-mail], Tel: [phone]

DISCLAIMER

This press release does not constitute an offer to sell or solicitation of an offer to purchase Altareit shares. For more detailed information concerning Altareit, please refer to the documents available on our website www.altareit.com. This press release may contain some forward-looking statements. While the Company believes such declarations are based on reasonable assumptions at the date of publication of this document, they are by nature subject to risks and uncertainties, which may lead to differences between real figures and those indicated or inferred from such declarations.

1Consolidated net bank and bond debt: €247m (-€87m vs. €334m at December 31, 2019).

2 Revenue by % of completion and external services.

3 Corresponds to the operating income in the Funds From Operations (FFO) column of the analytical income statement.

4 Corresponds to the net income in the Current operating cash flow (FFO) column of the analytical income statement. Group share. 5 Net bank and bond debt / consolidated shareholders' equity.

ALTAREIT

2020 HALF-YEAR RESULTS

1

BUSINESS REVIEW

AT 30 JUNE 2020

2

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

	CO NT ENT S
1.1. A PURE PLAYER IN PROPERTY DEVELOPMENT IN FRANCE	........................................... 4
1.1.1	Residential ......................................................................................................................................................	5
1.1.2	Business property ...........................................................................................................................................	7
1.2. CONSOLIDATED RESULTS.................................................................................................	10
1.2.1.	Financial results at 30 June, 2020 ........................................................................	Erreur ! Signet non défini.
1.1. FINANCIAL RESOURCES ....................................................................................................	12

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

3

1.1 A pure player in property development in France

A resilient model

A 99.85% subsidiary of the Altarea Group, Altareit offers a skills platform covering all asset classes (residential, retail, offices, logistics, hotels, serviced residences, etc.), in order to respond effectively and comprehensively to the challenges of urban transformation6.

Residential: Altareit, as 2nd largest French residential developer, aims to sell 18,000 to 20,000 unit per year at term.

Business property: Altareit has developed a unique model that enables it to operate in a highly significant manner and with moderate risk on this market:

• as a property developer7 for external customers with a particularly strong position on the turnkey users market,
• as a medium-termdeveloper-investor in assets with a strong potential (prime location) to be redeveloped pending sale (via AltaFund8).

A unique positionning

Over the years, the Group has built up a unique platform of in order to respond effectively and comprehensively to the challenges of urban transformation :

• the concentration of populations, activities and wealth within major large gateway cities, which is now covering new territories, constituting new real estate markets;
• the inadequacy of real estate infrastructures, which must be rethought to meet the challenges of densification. This phenomenon is behind the boom in major mixed-use urban redevelopment projects, which constitute a particularly dynamic market segment. As of June 30, 2020, Altareit managed 10 major mixed-use projects (for nearly 761,000 m² and 8,000 residential units) with a potential value of €3.0 billion.

Added to these long-term trends is the ecological emergency, which is revolutionising expectations with regard to real estate (energy performance, mobility, reversibility, mixed- use, new consumer habits, etc.).

The very core of Altareit's know-how consists of developing mixed real estate products that factor these challenges into a complex economic equation, giving it access to the huge urban transformation market.

At the end of June 2020, Altareit has secured a huge portfolio of projects of more than 4.3 million m² with a potential value of more than 17.4 billion euros.

6 The Group focuses its development on 12 major French regions: Greater Paris, Métropole Nice Côte d'Azur, Marseille-Aix-Toulon, Toulouse Métropole, Bordeaux Métropole, Greater Lyon, Grenoble-Annecy, Eurométropole de Strasbourg, Nantes Métropole, Métropole Européenne de Lille, Montpellier Méditerranée Métropole, Métropole de Rennes.

7 This development activity does not present any commercial risk: Altareit carries only a measured amount of technical risk.

8 AltaFund is a discretionary investment fund, created in 2011, of which Altareit is one of the contributors alongside leading institutional investors.

4

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

1.1.1 Residential

STRATEGY

As France's 2nd biggest residential developer9, Altareit has a long-term target of 18,000 to 20,000 units sold per year.

An efficient geographical strategy

The Group's geographical strategy aims to hold strong positions in the most dynamic gateway cities10, where the need for residential units is the highest. As such, the entirely of the Group's property for sale and its land portfolio is located within high-demand areas.

A multi-brand and multi-product strategy

The various Group brands (Cogedim, Pitch Promotion, Histoire & Patrimoine, Woodeum, Severini and Cogedim Club) enjoy operational autonomy whilst benefiting from the power of the Group embodied by the Altareit umbrella brand (strategy, finance, support, etc.).

The Group thus provides a well-judged response in all market segments for all customer types:

• High-end:products defined by demanding requirements in terms of location, architecture and quality;
• Entry-leveland mid-range: programmes specifically designed to address:

• the need for affordable housing both for first-time buyers (secured prices), private investment and institutio;
• the challenges facing social landlords;

• Serviced Residences: in particular, under the Cogedim
  Club® brand, Altareit is currently developing a serviced residences concept for senior citizens, combining city-centre locations with a range of a la carte services;
• Renovation of historical sites: under the Histoire &
  Patrimoine brand, the Group has a range of products for Historical Monuments, Malraux Law properties and Real Estate Tax schemes;
• Sales in divided ownership: the Group is developing programmes under a French government policy known as social rental usufruct. This additional offering, while meeting the need for low-cost housing in high-demand areas and thereby helping out local communities, provides an alternative investment product for private investors;
• Timber housing development under the brand Woodeum, leader in carbon-free development in France and a 50%- owned subsidiary of the Group.

Customers are at the core of the process

Customer Service of the Year for the standard of service and quality of its customer relations.

BUSINESS IN THE PERIOD

Impact of lockdown on business in first half

Despite the decline in commercial contacts (closure of sales offices from 16 March) the commitment of teams has helped to keep commercial activity at around 30% of normal level for Individuals sales.

The Group made full use of its digital tools, and notably e- booking, which enables online sales to be contracted under secure conditions.

However, notarised sales came to a near standstill, despite the decree allowing deeds to be signed remotely, the impact of which has been relatively marginal. These recovered strongly from mid-Mayonwards.

Meanwhile, nearly all of the 300 construction sites were closed between late March and mid-May.

Agreements with major institutional investors

At the end of April, the Group and CDC Habitat11 signed an

initial agreement for the sale of around 3,500 units for €825

million excl. VAT12 at 100%. This agreement, which mainly concerns programmes at the "Building Permit Obtained" stage, was regularised13 by 70% at the end of June and nearly 80% at the end of July.

On top of that comes €72 million in sales by Woodeum, a

50%-owned subsidiary of the Group.

At the end of July, the Group signed a second agreement

with CDC Habitat for just over 1,070 units totalling €186.5

million excl. VAT, which will be regularised between late 2020 and early 2021.

New orders14: €1,921 million (+30%)

	New orders			H1 2020	H1 2019		Chan
				ge
	Individuals - Residential		347	€m	503	€m	(31)%
	buyers
	Individuals - Investment		345	€m	589	€m	(41)%
	Block sales		1,228	€m	390	€m		x3.1
	Total in value (incl. VAT)			1,921	€m	1,482		€m		+30%
	o/w equity-method (Group share)	92	€m	75	€m	+23%
	Individuals - Residential		946	unit	1,438	unit	(34)%
	buyers			s			s
	Individuals - Investment		1,238	unit	2,285	unit	(46)%
					s			s
	Block sales		4,483	unit	1,613	unit		x2.8
					s			s
	Total in units			6,667	unit	5,336		unit		+25%
					s			s

The Group sets itself apart by the close attention it pays to customers' expectations when developing its product ranges. As such, for three years running Cogedim has been awarded

1. Source: Developer Rankings produced by Innovapresse which analyses and compares business volumes, the number of residential units or square metres of offices produced, and the financial results of the principal private property developers. The 31st edition in June 2019 included 60 of the main players in the sector.
2. Grand Paris, Métropole Nice Côte d'Azur, Marseille-Aix-Toulon, Grand Lyon, Toulouse Métropole, Grenoble-Annecy, Nantes Métropole, Bordeaux Métropole, Métropole européenne de Lille, Eurométropole de Strasbourg, Montpellier Méditerranée Métropole, Rennes Métropole.
3. Acting on behalf of its own funds as well as those of other residential investors.

1. And €1.0 billion including VAT.
2. Of the €825m excluding VAT, €574m was regularized before the end of June, and €76m in July. The balance is made up of units that can be regularized by the end of the year.
3. New orders net of withdrawals, in euros, including VAT when expressed in value. New orders at 100%, with the exception of projects under joint control (including Woodeum).

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

5

Notarised sales: €1,883 million (+94%)

A client's definitive commitment is legally materialised upon the notarial signature, which regularizes a reservation contract.

A notarial sale campaign took place in June when clients and notary offices were barely out of lockdown and the notary offices had a still reduced capacity to record transactions.

Sales almost doubled over the first half of the year, and increased by 23% excluding the impact of the first CDC Habitat agreement.

	€m incl. VAT		H1		%		H1		%		Chan
		2020			2019			ge
Entry-level/mid-range	1,168	62%	637		34%	+83%
High-end	641	34%	242		13%	x2.6
Serviced Residences	40	2%	53		3%	(25)%
Renovation/Rehabilitation	34	2%	41		2%	(17)%
	Total		1,883				973				+94%

As such, the sale campaign was very strong:

• both individuals clients with €809 million in sales in the period, i.e. a similar level as in 2019 (€799 million);
• and institutional clients with €1,074 million in sales (versus €174 million in 2019), including, in particular, €689 million in sales under CDC Habitat agreement signed in April.

Project under construction

Work resumed on the 300 projects under construction from the beginning of May. By June, 100% of the construction sites had resumed at a steady pace.

In the first half, the Group delivered 54 operations (3,914 units) and 285 sites are under construction at the end of June.

Revenue by % of completion

Revenue by percentage of completion is calculated based on both percentage of sales realised (notarised sales) and the completion of the programmes (progress of construction sites).

The mobilization of the Group's working team on notarised sales largely offset delays to the technical work progress made at construction sites. This explains the sharp increase in revenue in this half-year, which amounted €1,070 million (+20%), despite the sanitary crisis.

	In €m (excl. VAT)		H1		%		H1		%		Change
		2020			2019
Entry-level/mid-range	729	68%	646		72%	+13%
High-end	303	28%	202		23%	+50%
Serviced Residences	16	1%	29	3%	(45)%
Renovation/Rehabilitation	21	2%	17	2%	+24%
	Total		1,070				894				+20%

15 Units available for sale (incl. VAT value, or number count).

Backlog: €4,205 million (+11%)

The backlog corresponds to the revenue excl. VAT not yet recognised in previous sales. It is divided in two:

• Backlog on notarised sales: revenue on a percentage-of- completion basis. There are no commercial risks related to this part of the backlog.
• Backlog on reserved (not yet sold): revenue from sales to be regularised. There is a commercial risk related to this part (customer withdrawal).

	In €m (excl. VAT)		30/06/2020	31/12/2019	Change
	Notarised revenue not		2,188	1,722	+27%
	recognised
	Revenues reserved but not		2,017	2,057	(2)%
	notarised
	Backlog		4,205	3,778	+11%
	o/w equity-method (Group share)		259	258	ns
	Number of months		21	20

Backlog grew by +11% in the first half to €4,205 million. It also improved in terms of quality, with a strong increase in "backlog on notarised sales" (+27% to €2,188 million).

Properties for sale15 and future offering:16

	€m incl. VAT of		30/06/2020		No. of		31/12/2019
			month			Change
	potential revenue
				s
	Properties for sale		1,784		6		2,104		(15)%
	Future offering		11,641		38		10,659		+9%
	Pipeline		13,425		43		12,764		+5%
	In no. of units		51,240				48,885		+5%
	In m²		2,870,000				2,737,600		+5%

In the first half of the year, the offer for sale was impacted by strong growth and reservations combined with the delay and commercial launches.

Despite selectivity on new operations, the future offering grew by +9%. It will help to increase the offer for sale in the coming months.

Overall, the Residential pipeline grew by +5%.

Risk management

As of 30 June 2020, the Group's properties for sale amounted to almost €1.8 billion incl. VAT (equi. six months of activity), with the following breakdown according to the stage of completion of the programmes:

			Project			Project		In
	in €m				under
		not yet					Total
				construct		stock
			started
					ion
	Amounts committed excl.	193		811		23	1,028
	VAT
	Of which already paid out (a)	193		380		23	597
	Properties for sale incl.	444		1,294		45	1,784
	VAT(b)
	In %	25%		73%		2%		100%
	o/w to be delivered	in 2020	50
			in 2021	164
			≥ 2022	1 088

1. Total amount already spent on operations in question, excl. VAT.
2. As revenue, including VAT.

16 Future offering consisting of secured projects (through an option on the land, mostly in unilateral form) whose launch has not yet occurred (value including tax of potential revenue when expressed in euros).

6

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

Management of real estate commitments

25% of sales related to programmes whose construction has not yet been launched and for which the amounts committed correspond essentially to studies, advertising, and reservation fees (or guarantees) paid within the purchase agreement on land, and most recently the cost of land.

73% of the offer is currently under construction, including a limited share (€50 million or less than 3% of total properties for sale) representing units to be delivered by the end of 2020.

The stock amount of finished products is not significant (2% of total offer).

This breakdown of operations by stage of completion reflects the criteria implemented by the Group:

• the choice to prioritise unilateral preliminary sale agreements rather than bilateral sale and purchase agreements;
• requiring the consent of the Commitments Committee at all stages of the transaction: signature of the purchase agreement, marketing, land acquisition and launch of construction;
• strong pre-commercialisation required when acquiring land;
• abandonment or renegotiation of projects having generated inadequate take-up rates.

17 This development activity does not present any commercial risk: Altarea carries only a measured amount of technical risk.

18 AltaFund is a discretionary investment fund, created in 2011, of which Altarea is one of the contributors alongside leading institutional investors.

19 Resold rented or not.

1.1.2 Business propertyStrategy

Business property must adapt to new uses and employees' expectations in the area of quality of life in the work place (collaborative work, attractive areas inspired by residential codes). It also needs to be the incarnation of the attractiveness of occupier's brand as an employer.

In the last decade, Altareit has developed buildings which have become genuinely emblematic of their users' corporate culture, both with regard to the architectural signature and to environmental performance, connectivity and flexibility (Tour First in La Défense, Kosmo in Neuilly-sur-Seine, Bridge in Issy-les-Moulineaux and also Richelieu, Altarea's new head office in Paris).

In order to guarantee the value of its projects over time, Altareit has decided to prioritise central locations which are hyperconnected and open towards the city. Its projects also include the office component of mixed-use programmes, thus meeting the expectations of local authorities.

The Group is anticipating the new expectations of users and investors with the help of the internal R&D unit:

• "better than at home" offices: high-speed connections for each workstation (fibre-optic networks), cybersecurity, optimal acoustic comfort and other advantages you cannot find at home;
• consideration of health factors: addition of outside spaces added (terraces), high-performance ventilation systems combined with secured window openings;
• flexibility and modularity of spaces;
• organisation to allow extended working hours;
• opening towards the city with the development of convinience stores on the ground floor, etc.

Altareit will be in position to support new user requests while taking advantage of its liquidity and strong balance sheet to seize opportunities for asset redevelpment in a completely new context.

An investor developer model

Altareit undertakes significant operations in the Business property market with a controlled risk:

• as a developer17 in off-plan sales, off-plan leases and property development contracts (PDC), with a particularly strong position on the turnkey users market, or as a service provider under delegated project management contracts;
• as an investor, either directly or through AltaFund18, for high-potential assets (prime location) in view of their sale once redevelopment has been completed19.

The Group is systematically the developer of projects in which it is also co-investor and Manager20.

Altareit can operate throughout the value chain, with a diversified revenue model: PDC margins, rent, capital gains, fees, etc.

20 Through marketing, sale, asset and fund management contracts.

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

7

A dual diversification strategy

In terms of organisation, the Group is structured to address two complementary markets:

• in Grand Paris: in a context of high prices and scarcity of land, Altareit works on capital-intensive projects (generally in partnership), or alternatively as a service provider to support large investors and users;
• in gateway cities: the Group acts in development programmes (off-plan sales or PDCs) generally sourced thanks to the local Residential network.

Product type and quality

1.1.2.1 BUSINESS IN THE PERIOD

Impact of the Covid pandemic on business

The main impact of the lockdown was the shutdown of the majority of building sites. Work was slowed down, but never stopped, for Bridge in Issy-les-Moulineaux (future headquarters of Orange) and Altarea's future headquarters on rue de Richelieu.

Since mid-April, work has gradually resumed at a slower pace and in compliance with the rules set out in the OPPBTP guidelines, the main consequence being the postponement of delivery dates and the deferral of results, notably from 2020 to 2021;

New orders

In the first half of 2020, the Group invested €88 million in Paris and in regional cities, including the off-plan sale of office space of the Bobigny-La Place mixed-use project (9,700 m²).

Pipeline

67 projects under development

				Potential
		Surface	Revenue	value at
At 30/06/2019	No.	area (m²)	excl VAT	100%
		at 100%	(€m)	(€m excl.
				VAT)
Investments (a)	4	112,600	428	963
Property developer(b)	61	1,319,200	3,008	3,008
o/w Offices	53	680,800	2,543	2,543
o/w Logistics	8	638,400	465	465
DPM (c)	2	5 200	39	39
Total	67	1 437 000	3 475	4 010

1. Potential value: market value excluding transfer duties at the date of sale, held directly or via AltaFund.
2. PDC & off-plan sales/leases - Projects intended for "100% external" customers only.
   Potential value: revenue (excl. VAT) from signed or estimated property development or off- plan sale contracts, at 100%.
3. Revenue excl. VAT = Potential value: capitalised fees for delegated projects.

Given lockdown, the pipeline slightly changed in the half-year under review, the biggest change being due to the delivery of the "Richelieu" building.

Deliveries

21 Backlog (Residential and Property offices) is composed of notarised sales, excl. VAT, not yet recorded per the percent of completion method, new orders excl. VAT,

The Group is developing a wide range of products: multiple occupancy office space, head offices, logistics hubs, hotels, hospitals, universities, etc.

The Logistics investment fund, created in late 2017 by Pitch Promotion, has enabled Altareit to become a major stakeholder in the logistics market in France, with nearly 640,000 m² under development at June 2020 (12% of the pipeline by potential value).

Whether for new office projects or complex redevelopment operations, all of the Group's operations combine high environmental quality with modularity and multiple uses.

The restructuring work at Altarea's new head office at 87 rue de Richelieu in Paris was completed during the first half despite the confinement, and the Group's 1,300 Paris Region employees gradually moved there in June 2020.

The Group also delivered a number of projects in the regions, including the hotel Okko 4* in Toulon and the headquarters of Enedis Limousin in Parc Ester Technopole in Limoges.

Supply

During the first half of 2020, the Group signed several projects in regional cities totalling 34,000 m², including a 11,000 m² building for Unedic in Marseille.

Focus on investments

At end-June 2020, the Group is developing 4 investment projects shared with leading institutional investors.

The cost price of these projects is €797 million at 100% (€174 million excl. VAT, Group share) with a potential value of over €963 million (estimated sale price), i.e. an expected gain of about €162 million, Group share.

Backlog21

	in €m			30/06/2020		31/12/2019		Chang
					e
	Off-plan, PDC		537		668		(20)%
	o/w equity-method (Group share)		58		73	-
	Fees (DPM)		9		9	-
	Total			546		677		(19)%

Commitments at 30 June 2020

For investmentment projects, the Group's commitments correspond to the obligations of equity contributions in operations.

As for new developments, commitments are limited to the amount of studies for projects being arranged. Regarding projects under construction, financial commitments are covered by calls for funds (except "blank" transactions).

At June 30, 2020, the Group's level of commitment in Business property, on projects that are not yet rented or sold amounts to less than €100 million, Group share.

not yet notarised (signed property development contracts), and fees to be received from third parties on signed contracts.

8

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

Details of the pipeline at 30 June 2020

Surface area

Revenue

Potential value

Type

excl. VAT

at 100% (€m

Progress (c)

(m²)

(€m) (a)

excl. VAT) (b)

Landscape (La Défense)

PDC

67,400

Under construction

Tour Eria (La Défense)

PDC

25,000

Under construction

Cocktail (La Défense)

PDC

18,100

Secured

Saussure (Paris)

DPM

2,100

Secured

Investment projects (4 developments)

112,600

428

963

Bridge (Issy-les-Moulineaux)

PDC

57,900

Under construction/leased

Bassins à Flot (Bordeaux)

Off-plan sales

49,500

Under construction

Convergence (Rueil Malmaison)

Off-plan sales

25,400

Under construction

Orange (Lyon)

PDC

25,900

Under construction

Coeur de Ville - Hugo Building (Issy-les-Mx)

PDC

25,700

Under construction

Coeur de Ville - Leclerc & Vernet buildings

PDC

15,200

Under construction

Other Office projects (11 transactions)

PDC/Off-plan

100,400

Under construction

Belvédère (Bordeaux)

Off-plan sales

50,000

Under construction

Amazing Amazones (Nantes)

Off-plan sales

19,700

Secured

EM Lyon Business School (Lyon)

PDC

29,400

Secured

Other Office projects (33 transactions)

PDC/Off-plan

225,500

Secured

Hexahub Atlantique (Nantes)

PDC

46,400

Under construction

Other Logistics projects (2 projects)

PDC/Off-plan

62,200

Under construction

Other Logistics projects (5 projects)

PDC/Off-plan

529,800

Secured

"100% external" projects (61 transactions)

1,319,200

3,008

3,008

Total investment / Off-plan sales / PDC (65 projects)

1,431,800

3,436

3,971

Delegated project management portfolio (2 projects)

5,200

39

39

Total Property Development Portfolio (67 projects)

1,437,000

3,472

5,073

1. PDC/Off-plansales: amount excl. VAT of signed or estimated contracts, at 100%. Delegated project management contracts: fees capitalised.
2. Investments potential market value excluding transfer duties on the date of disposal for investment projects (at 100%), amount (excl. VAT) of VEFA/CPI contracts signed or estimated for the other development programmes (at 100%, or Group share for jointly owned projects). Delegated project management contracts: fees capitalised.
3. Secured projects: projects either fully or partly authorised, where the land has been acquired or for which contracts have been exchanged, but on which construction has not yet begun.

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

9

1.2 Consolidated results

Altareit's consolidated revenue22 amounted to €1,273.4 million at 30 June, up +9.1% year-on-year, driven by strong growth in Residential (+19.5%).

The recurring operating income (FFO) increased to €80.6 million (+8.1%).

Net income (FFO), Group share, amounted to €57.0 million (+6.5%), i.e. €32.61 per share.

			Residential	Business	Diversification	Other
	In €m			property		Corporate
Revenue and ext. services.	1,074.2	199.2	-	-
Change vs 30/06/2019	+19.5%	(25.3)%	na	na
Net rental income	-	-	-	-
Net property income	88.6	10.5	-	-
External services	4.7	2.7	-	-
Net revenue	93.3	13.2	-	-
Change vs 30/06/2019	(0.1)%	(47.1)%	na	na
Production held in inventory	76.3	5.6	-	-
Operating expenses	(99.3)	(14.8)	(0.8)	(1.2)
Net overhead expenses	(23.0)	(9.3)	(0.8)	(1.2)
	Share of equity-method affiliates	7.6	0.7	-
Income/loss on sale of assets - Diversification
Income/loss in the value of investment property
Calculated expenses and transaction costs
	Résultat opérationnel		77.9	4.7	(0.8)	(1.2)
Change vs 30/06/2019	+39.4%	(72.4)%	na	na
Net borrowing costs	(4.1)	(3.2)	(0.0)	-
Other financial results	(1.1)	(0.2)	(0.1)	(0.9)
Gains/losses in the value of financial instruments	-	-	-	-
Results from the disposal of shareholdings	-	-	-	-
Corporate Income Tax	(3.9)	(0.2)	-	-
	Net income		68.7	1.1	(0.9)	(2.1)
Non-controlling interests	(10.2)	0.4	0.0	-
	Net income. Group share		58.6	1.5	(0.9)	(2.1)
Change vs 30/06/2019	+59.2%	(90.1)%	na	na
Diluted average number of shares

Net income. Group share per share

Change vs 30/06/2019

			Changes in
	Funds from		value, estimated
	operations (FFO)		expenses and
			transaction
			costs
1,273.4		-
+9.1%
	-		-
99.1	(0.3)
7.4		-
106.5	(0.3)
(10.5)%
81.9		-
(116.1)	(8.1)
(34.2)	(8.1)
8.3	(2.5)
		(0.1)
			-
-	(14.1)
	80.6		(25.0)
+8.1%
(7.3)
(1.2)
(2.3)
	-
	-
	0.6
	-	(0.2)
(4.1)	(8.5)
	66.8		(34.3)
(9.8)	(0.1)
	57.0		(34.4)
+6.5%
1 748 438
	32.61
+6.5%

TOTAL

1,273.4

+9.1%

-

98.8

7.4

106.2

(10.7)%

81.9

(124.2)

(42.3)

5.8

(0.1)

-

(14.1)

55.5

+7.0%

(8.5)

(2.3)

0.6

(0.2)

(12.6)

32.5

(9.9)

22.7

22 Revenue by % of completion and external services.

10

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

FFO23 Residential

in €m	H1 2020	H1 2019
Revenue by % of completion	1069.5	893.9	+19.6%
Cost of sales and other expenses	(980.9)	(805.8)
Net property income Residential	88.6	88.1	+0.6%
% of revenue	8.3%	9.8%
External services	4.7	5.3
Production held in inventory	76.3	58.2
Operating expenses	(99.3)	(105.1)
Contribution of EM associates	7.6	9.4
Operating income - Residential	77.9	55.9	+39.4%
% of revenue	7.3%	6.3%
Net borrowing costs	(4.1)	(8.3)
Other financial results	(1.1)	-
Corporate income tax	(3.9)	(1.9)
Non-controlling interests	(10.2)	(9.0)
FFO Residential	58.6	36.8	+59.2%

In terms of Residential, revenue by percentage of completion is up sharply (+19,6%): indeed the commercial percentage of completion related to regularisations has largely offset delayed technical work progresss resulting from construction site closures during lockdown.

The decrease in net property income margins is a result of changes to the product mix, with a larger proportion of block sales (lower margins).

The increase in operating income reflects both the Group's control of overheads and the significant contribution of fees from the regularisation of block sales (production held in inventory).

FFO Business Property

in €m	H1 2020	H1 2019
Revenue by % of completion	196.5	260.0	(24.4)%
Cost of sales and other expenses	(186.0)	(241.8)
Net property income Business	10.5	18.2	(42.2)%
% of revenue	5.4%	7.0%
External services	2.7	6.7
Production held in inventory	5.6	5.0
Operating expenses	(14.8)	(15.4)
Contribution of EM associates	0.7	2.4
Operating income - Business property		4.7	17.0	(72.4)%
% of revenue + ext. serv. prov.	2.3%	6.4%
Net borrowing costs	(3.2)	(1.4)
Other financial results	(0.2)
Corporate income tax	(0.2)	(0.7)
Non-controlling interests	0.4	0.0
FFO Business property	1.5	14.9	na

In terms of Business property, revenue from PDA and off- plan sales was significantly affected by the closure of construction sites during lockdown.

23 Funds From Operations (FFO): net profit excluding changes in value, calculated expenses, transaction fees and changes in differed tax. Group share.

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

11

1.3 Financial resources

€520 million in long-term financing

Since 1 January 2020, the Group put in place €520 million in new long-term financing.

	in €m			RCF		Loan		Total		Bond			Total
				term		banks		holder	(a)
New money	237	70		307	80			387
Expansion	83	50		133	-			133
	Total			320		120		440		80			520

(a) Tap in July 2020 on the Altareit 07/2025 bond, bearing a fixed coupon of 2.875%.

Liquidity: €2.3 billion

As of 30 June 2020, available cash and cash equivalents amounted to €2,347 million (compared with €1,772 million as of 31 December 2019), breaking down as follows:

	Available (in €m)			Cash			Unused credit		Total
					facilities
At Group level	554		490	1,044
At project level	609		694	1,303
	Total			1,163			1,184		2,347

Unused credit facilities amount to €490 million RCF24 the average maturity of which is 4.0 years, with no maturities within the coming 24 months.

Given the Group's liquidity and the continued access to the market in the short-term, as of 30 June 2020 no RCF was drawn. The Group has no plans to draw on them in the coming months.

Short and medium-term financing

At June 30, 2020, Altareit had a NEU CP programme25 of

€409.0 million (maturing within 1 year) and a NEU MTN programme26 of €85.0 million (maturing over 1 year).

24 Revolving credit facilities (confirmed credit authorisations).

25 NEU CP (Negotiable European Commercial Paper).

26 NEU MTN (Negotiable EUropean Medium Term Note).

Net debt down: - €87 million

in €m	30/06/2020	31/12/2019
Bank loan terms	200	148
RCF	-	-
Credit markets (a)	850	666
Debt on property development	189	205
Total gross debt	1,239	1,019
Cash and cash equivalents	(992)	(685)
Total net debt	247	334

As of 30 June 2020, the Group's net financial debt stood at €247 million, down €87 million compared with 31 December 2019.

BBB credit rating

S&P Global awarded the "BBB, negative outlook" financial rating for both Altarea and Altareit, the listed subsidiary operating the Group's development activities.

ICR ratio27

At 30 June 2020, the ICR ratio was 11x, compared with 10x at 31 December 2019.

Covenants

A 99.85% subsidiary of the Altarea Group, Altareit's corporate debt is subject to Altarea's consolidated covenants (LTV<60%. ICR>2). Altarea complies with these covenants with significant room (LTV at 33.4% and ICR at 8.0x).

In addition, property development debt, secured against development projects, is subject to project-specific covenants.

	Covenant	30/06/2020	31/12/2019	Delta
LTV (a)	≤ 60%	33.4%	33.2%	+0.2 pt
ICR (b)	≥ 2.0 x	8.0x	7.3x	(0.7x)

1. LTV (Loan to Value) = Net bond and bank debt/Restated value of assets including transfer duties.
2. ICR (Interest-Coverage-Ratio) = Operating income/Net borrowing costs (column "Funds from operations").

Altareit's gearing28 was at 0.26x at 31 June 2020 (compared to 0.36x at 31 December 2019).

Equity

Altareit's shareholders' equity stood at €947.5 million at 30 June, 2019, vs €918.0 million as of 31 December, 2019, making Altareit one of the most highly capitalised French developers.

27 ICR (Interest Coverage Ratio) = Operating income / Net borrowing costs 28 Net bond and bank debt / consolidated shareholders' equity.

12

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT

Consolidated P&L

		30/062020					31/12/2019 restated*
			Changes in						Changes in
			value.						value.
			estimated						estimated
			expenses						expenses
	Funds from		and					Funds from	and
	operations		transaction					operations	transaction
€millions	(FFO)		costs		Total			(FFO)	costs	Total
Revenue	1 069,5		-		1 069,5		893,9	-	893,9
Cost of sales and other expenses	(980,9)		(0,3)		(981,2)		(805,8)	-	(805,8)
Net property income	88,6		(0,3)		88,3		88,1	-	88,1
External services	4,7		-		4,7		5,3	-	5,3
Production held in inventory	76,3		-		76,3		58,2	-	58,2
Operating expenses	(99,3)		(6,6)		(105,9)		(105,1)	(7,0)		(112,1)
Net overhead expenses	(18,3)		(6,6)		(24,9)		(41,6)	(7,0)		(48,6)
Share of equity-method affiliates	7,6		(5,9)		1,6		9,4	(2,6)		6,8
Net allowances for depreciation and impairment	-		(10,8)		(10,8)			-	(8,6)		(8,6)
Transaction costs	-		-		-			-	(0,8)		(0,8)
NET RESIDENTIAL INCOME	1 069,5		-		1 069,5		893,9	-	893,9
Revenue	196,5		-		196,5		260,0	-	260,0
Cost of sales and other expenses	(186,0)		-		(186,0)		(241,8)	-	(241,8)
Net property income	10,5		-		10,5		18,2	-	18,2
External services	2,7		-		2,7		6,7	-	6,7
Production held in inventory	5,6		-		5,6		5,0	-	5,0
Operating expenses	(14,8)		(1,3)		(16,1)		(15,4)	(1,6)		(16,9)
Net overhead expenses	(6,6)		(1,3)		(7,9)		(3,6)	(1,6)		(5,2)
Share of equity-method affiliates	0,7		3,5		4,2		2,4	(0,4)		1,9
Net depreciation. amortization and provisions	-		(1,0)		(1,0)			-	(1,3)		(1,3)
Net allowances for depreciation and impairment	-		-		-			-	-	-
BUSINESS PROPERTY INCOME	4,7		1,2		5,9		17,0	(3,3)		13,7
Rental income	-		-		-		1,0	-	1,0
Other expenses	-		-		-		(0,5)	-	(0,5)
Net rental income	-		-		-		0,6	-	0,6
External services	-		-		-			-	-	-
Operating expenses	(0,8)		-		(0,8)		2,1	-	2,1
Net overhead expenses	(0,8)		-		(0,8)		2,1	-	2,1
Share of equity-method affiliates	-		-		-		(0,0)	0,0		(0,0)
Net allowances for depreciation and impairment	-		(2,3)		(2,3)			-	(2,2)		(2,2)
Gains / losses on disposals of assets	-		(0,1)		(0,1)			-	(0,0)		(0,0)
Income/loss in the value of investment property	-		-		-			-	2,0		2,0
NET DIVERSIFICATION INCOME	(0,8)		(2,4)		(3,2)		2,7	(0,2)		2,5
Other (Corporate)	(1,2)		(0,2)		(1,4)		(1,0)	(0,2)		(1,2)
OPERATING INCOME	80,6		(25,0)		55,5			74,5	(22,6)		51,9
Net borrowing costs	(7,3)		(1,2)		(8,5)		(8,3)	(0,7)		(9,0)
Others financial results	(2,3)		-		(2,3)		(1,1)	-	(1,1)
Discounting of debt and receivables	-		-		-			-	(0,1)		(0,1)
Change in value and income from disposal of financial	-		0,6		0,6			-	(0,0)		(0,0)
instruments
Proceeds from the disposal of investments	-		(0,2)		(0,2)			-	(1,6)		(1,6)
PROFIT BEFORE TAX	70,9		(25,8)		45,1			65,1	(25,0)		40,1
Corporate income tax	(4,1)		(8,5)		(12,6)		(2,5)	(6,7)		(9,2)
NET INCOME	66,8		(34,3)		32,5			62,6	(31,7)		30,9
Minority shares	(9,8)		(0,1)		(9,9)		(9,0)	0,1		(8,9)
NET INCOME, Group share	57,0		(34,4)		22,7			53,6	(31,6)		22,0
Diluted average number of shares	1 748 438						1 748 475
NET INCOME PER SHARE (€/share), Group share	32,61							30,6

* Restated on 30 June 2019 to take into account changes to the presentation of borrowing costs.

ALTAREIT

BUSINESS REVIEW AT 30 JUNE 2020

13

Balance sheet

€millions	30/06/2020	31/12/2019
				restated*
	Non-current assets		814,4	667.5
Intangible assets	304,3	303.1
	o/w Goodwill	192,1	192.1
	o/w Brands	105,4	105.4
	o/w Other intangible assets	0,3	5.0
Property plant and equipment	6,5	18.9
Right-of-use on tangible and intangible fixed assets	20,5	21.7
Investment properties	150,2	31.1
	o/w Investment properties in operation at fair value	31,1	4.1
	o/w Investment properties under development and under construction at cost	4,4	22.0
	o/w Right-of-use on Investment properties	22,0	5.0
Securities and investments in equity affiliates and unconsolidated interests	4,6	283.1
Loans and receivables (non-current)	261,5	8.4
Deferred tax assets	43,7	1.3
			3,2
	Current assets		3 130,7	3 016.0
Net inventories and work in progress	835,8	1 051.1
Contracts assets	606,6	564.9
Trade and other receivables	657,2	686.4
Income tax credit	2,8	6.4
Loans and receivables (current)	35,8	22.1
Cash and cash equivalents	992,4	685.0
	TOTAL ASSETS		3 945,1	3 683.5
	Equity		947,5	918.0
Equity attributable to Altareit SCA shareholders	901,5	881.0
Capital	2,6	2.6
Other paid-in capital	76,3	76.3
Reserves	799,9	721.1
Income associated with Altareit SCA shareholders	22,7	81.0
Equity attributable to minority shareholders of subsidiaries	46,1	37.1
Reserves associated with minority shareholders of subsidiaries	36,2	22.7
Other equity components. Subordinated Perpetual Notes	9,9	14.3
	Non-current liabilities		911.6	704.9
Non-current borrowings and financial liabilities	849.9	652.5
	o/w Bond issues	346.1	345.7
	o/w Borrowings from lending establishments	298.4	259.6
	o/w Negociable European Medium Term Note	55.0	30.0
	o/w Lease liabilities	3.3	2.8
	o/w Contractual fees on investment properties	147.1	14.3
Long-term provisions	18.0	19.2
Deposits and security interests received	1.8	2.1
Deferred tax liability	41.9	31.2
	Current liabilities		2,086.0	2 060.5
Current borrowings and financial liabilities	641.3	478.6
	o/w Bond issues	10.1	5.1
	o/w Borrowings from lending establishments	86.0	91.6
	o/w Negociable European Medium Term Note	439.0	285.0
	o/w Bank overdrafts	1.1	2.2
	o/w Advances from Group shareholders and partners	95.8	82.5
	o/w Lease liabilities	9.2	12.2
Contracts liabilities	198.2	168.8
Trade and other payables	1,242.8	1 407.8
Tax due	3.7	5.3
	TOTAL LIABILITIES		3,945.1	3.224.9

*Restated at December 31, 2019 for the change in presentation of current and non-current financial assets.

14

BUSINESS REVIEW AT 30 JUNE 2020

ALTAREIT