Altareit : HY 2022 results - Business review

BUSINESS REVIEW

30 JUNE 2023

	Agenda
1.1	A PURE PLAYER IN LOW CARBON PROPERTY DEVELOPMENT IN FRANCE	................. 2
1.2	OPERATIONAL PERFORMANCE	3
1.2.1	Residential	3
1.2.2	Business property	5
1.3	ENVIRONMENTAL PERFORMANCE	7
1.3.1	Taxonomy: new standard for environmental performance reporting	7
1.4	H1 2023 CONSOLIDATED RESULTS	8
1.5	FINANCIAL RESOURCES	10

ALTAREIT - 2023 HALF-YEAR RESULTS 1

1.1 A pure player in low carbon property development

in France

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 transformation.

Residential: Altareit is now the second-biggest developer in France1, thanks to its portfolio of brands with complementary positioning.

Business property (Offices & Logistics): 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 developer2 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.

A unique positionning

Over the years, the Group has built up a unique platform of real estate skills for low-carbon urban transformation

The successive crises of recent years (health, environmental, social) have highlighted the need to thoroughly rethink the organisation and functioning of our cities. A large number of real estate infrastructures have become obsolete and must be transformed to adapt to both the changes in use that now affect almost all real estate products and climate change (energy efficiency).

Altareit's know-how lies in developing low-carbon real estate products that integrate all these issues into a complex economic equation. The complementary nature of the Group's operating brands covers all the real estate portfolio solutions that enable cities to play a key role in their transformation, either through successive touches or on the scale of entire neighbourhoods.

Primonial

No major progress has been made in the on-going litigation during the first half. In agreement with its advisers, the Group did not record any provision.

1 Source: 35th Ranking of Developers carried out by Innovapresse in July 2023 which analyses and compares the volumes of activity, the number of housing units or square meters produced, or the equity and debt of the main property

developers. It provides detailed figures, developer by developer, and outlines their projects and strategies.

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

ALTAREIT - 2023 HALF-YEAR RESULTS 2

1.2 Operational performance

1.2.1 Residential

1.2.1.1 Strategy

Altareit is the second-largest residential developer in France3. Its strategy for building market share is based on the strength and complementarity of its brand portfolio, the breadth of its product range and its nationwide geographical coverage.

A multi-brand strategy

Complementary brands to cover the entire market

Cogedim is the Group's leading brand in terms of geographic coverage, product range and brand awareness (Cogedim was awarded "Best customer service of the year" for the sixth consecutive year in early 2023). Cogedim's offer is built around ten commitments that prioritise health, well-being and the environment, with particular attention paid to air quality, neutral materials, reducing CO2 emissions, energy savings, brightness, thermal and acoustic comfort. This offer is particularly in line with the new expectations of French people in terms of high-quality housing.

Histoire & Patrimoine specialises in real estate renovation and rehabilitation. Histoire & Patrimoine enjoys recognised know-how in giving a second life to historic buildings or exceptional urban and architectural heritage sites. It will now apply its expertise to renovate energy-leaking buildings known as 'heat sieves' under its Jouvence brand.

Woodeum is the French specialist in low-carbon real estate development thanks to its expertise in CLT (cross-laminated timber) technology. Following its 100% takeover in early 2023, the Group announced it would merge with Pitch Immo to create the French leader in low-carbon real estate development. The merged company will benefit from both Woodeum's technological lead and Pitch Immo's local footprint and network.

A multi-product strategy

The Group provides adequate answer to requirements from all market segments and all customer types:

• High-end:products defined by high requirements in terms of location, architecture and quality;
• Middle and entry-level: programmes designed to address the need of affordable housing for first-time buyers and investment, as well as meeting the needs of social landlords and institutional investors;
• Serviced Residences: Altarea designs residences for active seniors (without daily medical monitoring), tourist residences as well as student residences combining a central location and a range of à la carte services;
• Heritage renovation products: Historical Monuments, Malraux act and real-estate tax;
• Renovation of existing homes to upgrade Energy Performance
  Ratings to a minimum of D;
• Condominium sales: Social Rental Usufruct programmes that offer an alternative investment product for private investors, whilst meeting the needs of social housing in high-demand areas and thus providing alternative solutions to local authorities;

The Group has also developed Altarea Solutions & Services, an internal platform of value-added services to support its customers and partners throughout their real estate projects (commercial support, financing brokerage, rental management, property management, etc.).

1.2.1.2 2023 environment

Cogedim Club ("Family home spirit") is a brand specialising in the development of managed residences for active seniors, offering apartments for rent, with personalised services and activities, for the comfort and well-being of their residents.

The Group's various brands operate independently (own customers and products) while benefiting from the power of the Group embodied by the Altarea umbrella brand (strategy, commitments, finance, support).

3 Source: 35th Developers' Ranking of July 2023 by Innovapresse which analyses and compares the volumes of activity, the number of housing units or square meters produced and the equity and debt of the main property developers. It

The end of a real estate cycle

At the end of 2022, France entered a real estate crisis triggered by the sudden rise in interest rates marking the end of a 14-year cycle (2008-2022). The new residential market is undergoing an adjustment phase likely to last until at least 2024, when a new equilibrium should emerge.

New market conditions

Although the new housing market remains structurally under- supplied relative to need in most major cities, selling prices need to be adapted to the property purchasing power of individuals and institutional investors.

At the beginning of June, the French Government announced, through its National Council for the Refoundation of Housing, an initial series of measures to address the issues affecting the sector: promoting access to home ownership (interest-free loans, real solidarity lease, usury rate, etc.), promoting access to renting

provides detailed figures, developer by developer, and outlines their projects and strategies.

ALTAREIT - 2023 HALF-YEAR RESULTS 3

(intermediate housing, Visale guarantee), supporting the building and renovation of social housing (block investment plan of 47,000 units by CDC Habitat and Action Logement), reinvigorating home- building by lifting administrative blockages (building permits in high-pressure areas, national programme for the urban renewal of large brownfield sites in urban areas) and boosting energy-saving renovations in the private portfolio. These measures should only have a limited impact on the market and its development in 2023.

1.2.1.3 Activity in the half-year

New orders4

New orders for the half-year were down -7% in value (-12% in volume), in a French market that contracted by around -35%5.

Backlog

Backlog is an advanced indicator of potential revenue, which includes:

• notarised sales, not yet recognised: units sale that have been regularised at the notary's office, to be recognised as revenue according to technical progress;
• new orders (units sold) that are not yet regularised.

At 30 June, the backlog stands at €3,387 million, virtually unchanged from the end of 2022 (-3%), representing 18 months of activity.

Management of commitments

New orders

Individuals - Residential buyers

Individuals - Investment

Block sales

Total in value (€m incl.

Individuals - Residential buyers

Individuals - Investment

Block sales

Total in volume (units)

H1 2023	% H1 2022	%	Chge
359	27%	421	30%	-15%
391	30%	560	40%	-30%
562	43%	434	30%	+29%
1,311		1,414		-7%
1,060	24%	1,214	24%	-13%
1,439	33%	1,998	40%	-28%
1,916	43%	1,818	36%	+5%
4,415		5,030		-12%

Since end-2022, the Group has revised its commitment policy.

During the first half of the year, the Group focused its efforts on selling off the land it had already acquired, in return for a significant reduction in selling prices, both for retail and block sales.

At the same time, land acquisitions were drastically reduced, as most of the projects they related to no longer matched the new market conditions. Thus, only 20 sites (1,756 units) were acquired in H1 2023, compared to 49 sites (4,555 units) in the H1 2022.

This commitment policy resulted in a significant reduction in the

Block sales, particularly those made with CDC Habitat, partly offset the decline in sales to individuals, who nonetheless still make up most of Group sales (57%).

Notarised sales

€m incl. VAT	H1 2023	%	H1 2022	%	Chge
Individuals	590	64%	765	62%	-23%
Block sales	326	36%	468	38%	-30%
Total	915		1,233		-26%

Notarised sales to private individuals were down by -23% and should be seen in light of the squeeze on home loans in France (- 42%6 across all residential markets).

4 New orders net of withdrawals, in euros, including VAT when expressed in value. Data at 100%, with the exception of operations under joint control which are reported in Group share (including Woodeum).

corresponding commitments, thereby reducing the Residential division's working capital requirement by €143 million.

The sharp fall in the contribution from Residential over the first half of the year is directly linked to the Group's voluntary policy.

Design of a new generation offering

The Group also initiated an in-depth review of its land portfolio by significantly tightening all its commitment criteria (product design, commercial strategy, regional strategy, construction costs and land prices). This "new generation" offer, which is low carbon, affordable and profitable will gradually gain momentum over coming quarters.

5 REIT data: -34.3% in Q1 2023.

6 Compared to H1 2022; Banque de France estimate.

14 Decline of -43% in supply of land acquired to 1,941 units vs. end-2022.

ALTAREIT - 2023 HALF-YEAR RESULTS 4

1.2.2 Business property

1.2.2.1 Strategy

A developer/investor/asset manager model

Altareit has significant operations in the Business property market with limited capital risk:

• mainly as a developer7 in off-plan sales, off-plan leases and property development contracts (PDC), with a particularly strong position in the turnkey user market, or as a service provider under DPM contracts;
• as a co-investor for high-potential assets (prime location) in view of their sale once redevelopment has been completed8.

The Group is systematically the developer of projects in which it is also co-investor and manager9.

The Group can operate throughout the value creation chain, with a diversified revenue model: PDC margins, rent, capital gains and fees.

Regional strategy

The Group is structured to address two complementary markets:

• Grand Paris: in a context of land scarcity, Altarea works on capital-intensive projects (generally under partnership), or alternatively as a service provider to support large investors and users;
• Large regional cities: Altarea is involved in development projects (off-plan sales or PDCs), generally sourced via its regional Residential network.

A wide range of products

Altareit has an offer covering all commercial property products:

• offices: headquarters, multi-occupancy buildings, high-rise buildings, covering all sizes (from 1,500 m² to 70,000 m²), all ranges (from prime to opportunistic) and all regions;
• hotels: all categories (from 1 to 4 stars), up to 700 rooms, in city centres or near transport hubs, independently or as part of large mixed-use projects;
• campus and schools: on behalf of higher education institutions (Grandes Écoles) or vocational schools (private and public);
• logistics: XXL platforms for distributors or e-commerce players, urban logistics for the last mile.

All of the Group's operations incorporate the highest level of environmental requirements and low-carbon performance, as well as a modular approach that allows the conversion of use.

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

1.2.2.2 Pipeline

At the end of June 2023, Altareit was managing a portfolio of 59 projects, which was highly diversified both in terms of type (office/logistics) and location (Ile-de-France/Regions).

						Potential
			Surface		Revenue	value at
	At 30/06/2023	No.	area (m2)		excl. VAT	100%
			at 100%		(€m)	(€m excl.
						VAT)
	Investments(a)	5	113,000		492	1,177
	Off-plan sales /	53	1,227,000		2,822	2,822
	PDCs(b)
	DPM(c)	1	19,000		91	91
	Total	59	1,359,000		3,405	4,090
	o/w Offices	47	616,400	2,533	3,218
	o/w Logistics	12	742,600	872	872
	o/w Regions	44	1,028,700	2,118	2,118
	o/w Paris Region	15	330,300	1,287	1,972

1. Potential value: market value excluding transfer duties at the date of sale, held directly or via AltaFund, at 100%.
2. 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.

1.2.2.3 Activity in the half-year

Greater Paris

• Signature of a 99 years emphyteutic lease with the French state for the renovation of a complex at 185 rue Saint-Honoré (Paris 1st district) adjoining the Hôtel Regina;
• delivery of the François Dalle space, a new training centre for the
  L'Oréal group in its former headquarters at 14 rue Royale (Paris
  8th district).

Regional cities

• Signature of several off-plan sales (13,000 m²), including one with Midi 2i (subsidiary of Caisse d'Epargne de Midi-Pyrénées) on a 3,000 m² building in the Toulouse Guillaumet eco-district and one with Caisse Mutualité Sociale Agricole de la Gironde (MSA) for the Mokusaï office building in the Bordeaux Belvédère district;
• management of two new office projects (16,200 m²) in St Genis Laval near Lyon and in Vernon;
• launch of several projects (42,000 m² in total), including:
• • the new Alstom Sud development centre, in the Plan d'Aillane
    ZAC in Aix-en-Provence, sold to Groupama Immobilier.
  • two office blocks in the new Toulouse Guillaumet district;
  • Feel good near Nantes in Orvault, where a first building was sold to the SMABTP at the end of 2022.

8 Resold rented or not.

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

ALTAREIT - 2023 HALF-YEAR RESULTS 5