Retail Estates : 23/05/2022 - Announcement of the annual results of the 2021-2022 financial year

PRESS RELEASE

Periodic statement - regulated information

Ternat, 23 May 2022

ANNOUNCEMENT OF THE ANNUAL RESULTS OF THE 2021-2022 FINANCIAL YEAR

RETAIL ESTATES RESUMES ITS GROWTH PATH: RESULTS OF THE POST COVID-19 FINANCIAL YEAR 2021-2022 EXCEED THOSE OF THE PRE-COVID-19 FINANCIAL YEAR 2019-2020.

EPRA RESULT PER SHARE IS € 5.84, REPRESENTING AN INCREASE BY 4.27%. THE INCREASE COMPARED TO THE FINANCIAL YEAR 2019-2020, WHICH WAS AFFECTED BY COVID-19 AND WHEN THE EPRA RESULT PER SHARE WAS € 4.97, IS 17.41%.

MAJOR POSITIVE REVALUATION OF THE DUTCH REAL ESTATE PORTFOLIO AMOUNTING TO € 21.53 MIO, MAINLY DRIVEN BY YIELD COMPRESSION. VALUATIONS ARE DRIVEN BY THE INCREASED INTEREST OF INVESTORS IN RETAIL PARKS ACROSS EUROPE AS A RESULT OF THE RESILIENCE OF OUT-OF-TOWN RETAIL DURING THE COVID-19 PERIOD.

OCCUPANCY RATE BACK AT PRE-COVID-19 LEVEL (97.83%). DUTCH REAL ESTATE PORTFOLIO VIRTUALLY COMPLETELY LET (245 RETAIL PROPERTIES) : UNPRECEDENTED RECORD.

DEBT RATIO DECREASES BELOW THE TARGETED 50% ON 31 MARCH 2022.

STRONG HEDGING OF INTEREST RATE RISKS WITH HEDGING INSTRUMENTS.

INCREASE OF THE DIVIDEND FOR THE 17th CONSECUTIVE YEAR: THE PROPOSED DIVIDEND INCREASES FROM € 4.50 TO € 4.60.

EXPECTATIONS FORECAST FOR THE CURRENT FINANCIAL YEAR 2022-2023 RAISED TO € 4.70.

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ANNUAL RESULTS FOR THE PERIOD 01.04.2021 THROUGH 31.03.2022

1. FINANCIAL YEAR 2021-2022 IN A NUTSHELL

The past financial year was characterised by the swift recovery of the out-of-town shops after the lockdowns of 2020- 2021. Only the Dutch retail sector was affected by an unexpected new lockdown in December 2021 and January 2022, after which activities recovered quickly. Within the real estate portfolio, the home decoration sector again benefited from a so-called "corona bonus", which was granted on account of the frequent restrictions on leisure activities such as travel and visits to pubs and restaurants, and consumers' increased focus on their own homes.

The rental incomeincreased significantly to € 115.58 million as a result of investments made during the financial year 2020-2021 as well as the non-monetary contribution of 27 retail properties on 14 October 2021. The rent reductions for the lockdown in the Netherlands, for a total amount of € 0.46 million, were lower than initially feared thanks to the quick recovery of trade. The rental income was restored to the long-termpre-COVID-19 average, which is higher than 99%. We were also spared from major bankruptcies.

The arbitrage operations within the context of the management of the real estate portfolioconsisted of a series of sales and purchases improves the quality of the real estate portfolio. On balance, its value increased from € 1,717.25 million to € 1,759.88 million. This increase results in part from the considerable increase in value, especially in the Netherlands. In early 2021, it was still doubted whether the ongoing yield compression would compensate for the negative effects of the increase in the real estate transfer tax (from 6% to 8%), which gave rise to depreciations. Various transactions revealing that the yield expectations for retail parks in the Netherlands reach the European level gave rise to positive revaluations that largely exceed the depreciations of early 2021. The valuation of the Belgian portfolio increases slightly, with the rising inflation only playing a limited role. This positive evolution is fully in line with the increasing interest of investors in retail parks across Europe as a result of the resilience of out-of-town retail during the COVID-19 period.

In the new climate on the financial markets, Retail Estates is reaping the benefits of its long-time consistent interest hedging policy. Thanks to this policy, the average interest rate remains stable at around 2%, in spite of rising interest rates. The trust of the bankers was confirmed by the easy renewal of the credit facilities that reached their due date. Furthermore, the target of the decrease of the debt ratio to less than 50% by 31 March 2022 has been reached. Compared to 31 March 2021, the debt ratio decreased from 52.18% to 49.15%.

The occupancy rateincreased from 97.07% to 97.83% compared to 31 March 2021. The Dutch retail portfolio, consisting of 245 retail units, is almost entirely let, a record that reflects the strength of this market. In Belgium, the losses caused by the COVD-19 epidemic have almost been completely eliminated.

The EPRA RESULTfor the past financial year is € 75.26 million, a significant increase compared to the comparable result of the previous financial year, when it amounted to € 62.91 million. The EPRA result per share is € 5.84, which is not only an increase compared to the COVID-19 financial year (2020-2021: € 4.97 per share), but also compared to the pre-COVID-19 financial year (2019-2020 € 5.60 per share). The gross proposed dividend is € 4.60, an increase by 2.22% compared to the dividend of the previous financial year. Retail Estates pursues its policy in this respect, increasing the dividend for the 17th consecutive year.1

The payout ratio again decreased to 80%, which is in line with the policy in the pre-COVID-19 years. In the COVID-19 year, the payout ratio was exceptionally 87%.

1 EPRA earnings are calculated as follows: net result excluding changes in the fair value of investment properties, excluding the result on the disposal of investment properties and excluding changes in the fair value of financial assets and liabilities.

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2. OPERATIONAL ACTIVITIES

2.1. INVESTMENTS

Investments

Contribution of real estate company "De Vleterbeek"

On 5 October 2021, Retail Estates concluded a contribution agreement with NV De Vleterbeek, a 100% subsidiary of the family-owned investment group Shopinvest, which resulted in a non-monetary contribution amounting to

• 35,856,125.00. The contributed real estate portfolio consists of 27 retail properties located on 17 sites, the vast majority of which are connected to sites where Retail Estates has already developed a cluster. The annual rental income amounts to € 2.42 million, which comes down to an average rent of € 86.83 per square metre. The retail properties are mainly located in Flanders (23 out of a total of 27). Except for 1 shop, all retail properties are let to national retail chains. Real estate expert CBRE estimated the investment value at € 35,856,125.00 and the fair value at € 34,981,586.00. The rental income represents an initial yield of 6.44% on the investment value.

Acquisition of cluster locations

By deed of 4 October 2021, Retail Estates acquired six retail properties from a Dutch family-owned investment group. It concerns two retail properties in Lokeren, in a retail park where Retail Estates already has retail properties in its portfolio, one retail property in Tielt-Winge (retail park "Gouden Kruispunt") and three retail properties in Libramont.

The total acquisition price of these properties amounted to € 9.72 million. The investment value of these retail properties was estimated at € 9.77 million by the independent real estate expert. The properties account for a global annual rental income of € 0.55 million. With the exception of one vacant unit in Libramont, the properties have all been let to well-known retail companies, most of which are active in the home improvement sector.

Furthermore, an amount of € 1.2 million was invested in the acquisition of a vacant retail property in Doornik with an estimated rental value of € 0.08 million (out-of-town retail area Froyennes).

All these investments complement retail parks or retail clusters of the real estate portfolio of Retail Estates.

Kampenhout-Sas : Redevelopment of the site of the former chicory auction building: investment in a participating interest in nv Veilinghof 't Sas

Retail Estates initially purchased the building of the former chicory auction from BelOrta for a price of € 5.81 million via a new company (Veilinghof 't Sas nv). Subsequently, Retail Estates combined its participating interests with those of the neighbouring owner (TVK-BRAVA cv) by entering into a merger by which this company was absorbed by Veilinghof 't Sas nv. As a result, a site was created with a surface area of 37.708 m², including 16.341 m² of warehouses. These buildings will initially be let to logistics companies on the basis of short-term contracts. The purpose is to redevelop this site after the demolition of the existing buildings and to erect new buildings that will be let and that will serve a purpose in line with the current urbanistic purpose of the site (service sector). The investment was made by way of speculation, as no environmental permit has been applied for nor obtained to date. A joint venture agreement was entered into between the company's shareholders for the purpose of this redevelopment.

As a result of this transaction, Retail Estates owns a participating interest of 26.19% in Veilinghof 't Sas nv. Its investment in this participating interest amounts to € 1.75 million in the company's capital and a long-term loan of € 5.00 million.

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Non-current assets under construction

On 31 March 2022 the total amount of the non-current assets under construction is € 15.51 million. We distinguish five types of non-current assets under construction: speculative land positions (the so-called "land bank", i.e. residual lands of existing portfolios that are intended for possible development or will be sold at a later stage if no redevelopment is possible); prospective projects, projects under predevelopment, projects under development and projects specifically linked to sustainability.

On 31 March 2022, the speculative land positions represented € 1.57 million, the prospective projects represented

• 10.99 million, the projects under predevelopment represented € 1.58 million, the projects under development represented € 0.52 million and the projects specifically linked to sustainability represented € 0.86 million.

A. Non-current assets under construction - prospection

In 2014, Retail Estates acquired the retail park at Wetteren(BE) with 14 retail units and a gross retail area of 10,423 m². The retail park, which opened in 2008, is known as Frunpark Wetteren. It is very successful and attracts consumers from far and wide. In 2016, Retail Estates nv acquired, by way of speculation, an adjacent plot of land with two SME properties (investment of approx. € 9 million), which are currently let. According to the Spatial Implementation Plan, a permit can in principle be obtained for retail properties destined for large-scale retail as well as for SME properties. The permit is expected in the course of 2023, the completion of the mixed-use project with retail units and SME properties is expected in the course of 2024. The costs of the procedures already completed and the preparation of the request for an environmental permit currently amount to € 0.45 million. The investment in this extension will amount to € 9 million.

B. Non-current assets under construction - predevelopment - overview of the main projects

For the retail park in Heerlen(NL) the permit for the modernisation of the entire façade has been received. The additional investment is expected to amount to approximately € 4.60 million. Completion is expected within the year.

C. Non-current assets under construction - development - overview of the main own developments

In Halle(B) the existing retail area will be extended. The additional investment is expected to amount to approximately

• 1.1 million. The permits required for this development have been obtained. This project requires the construction of a number of apartment buildings. As this is a matter outside the scope of Retail Estates, a cooperation with a property developer was negotiated, who can develop this part of the project. Completion is expected in the course of 2024.

D. Non-current assets under construction linked to sustainability

Within the context of the ESG strategy, Retail Estates has a separate category for sustainable non-current assets under construction.

Retail Estates invested in the installation of photovoltaic panels on the roof of its retail park in Hasselt (BE) adjacent to the IKEA site. Photovoltaic panels are installed with a total capacity of 407 kWp, which are expected to generate more than 340 Mhh of green power each year. This € 0.31 million investment will also have a positive impact on the tenants' operational expenses. The provisional delivery of these photovoltaic panels took place in October 2021.

Photovoltaic panels were installed in Heerlen (NL) with a total capacity of 1,157 kWp, which are expected to generate more than 8,932 Mhh of green power each year. This € 0.80 million investment will also have a positive impact on the tenants' operational expenses. Retail Estates will receive an annual compensation of € 0.07 million. The provisional delivery of these photovoltaic panels took place in May 2022.

E. Completion of non-current assets under construction

The retail cluster in Jambes(Namen-Zuid) was completed in the first quarter of this financial year. The project was already valuated on 31 March 2021 and put at the disposal of the tenant in March 2021. More information is available in the annual Financial Report 2020- 2021.

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Optimisation of real estate portfolio

Retail Estates nv pays close attention to the changing needs of its tenants with respect to retail area. Several tenants systematically expand their product range and regularly request an extension of their retail area. This can be done by acquiring space from adjacent tenants who sometimes have too much space or by constructing a new addition to the retail unit. Sometimes a combination of both is opted for.

Renovations sometimes include more than just an expansion of the retail area. Retail Estates nv regularly seizes the opportunity to remove an existing shop façade and replace it with a contemporary version that better fits the tenant's image.

Such investments allow us to build "win-win" relations with the tenants. In the past financial year the reorganisation- renovation of the retail properties in Apeldoorn(NL) and Roosendaal(NL) was completed. The last retail properties were subsequently let. A positive revaluation of € 7.89 million took place compared to the situation before the redevelopment (2020-2021).

Divestments

In the past financial year some 15 solitary retail properties were sold: a retail park in Lommel(BE) and the part of a non-strategic retail park in Leiderdorp(NL) that was still owned by Retail Estates. The net sales revenue amounted to € 31.84 million. The fair value of these properties was € 31.51 million. The rental income of these properties amounted to € 2.35 million. These sales generated € 0.33 million in net added value.

These divestments are part of an annual recurring sales programme of individual retail properties that are not part of the core portfolio of Retail Estates nv due to their location, size and/or commercial activity.

Investments: conclusion

Acquisitions and own developments in the financial year 2021-2022, less divestments, resulted in an increase of the real estate portfolio by € 43.83 million. The total rental income increased by € 2.79 million in the financial year 2021- 2022 as a result of these investments, but decreased by € 1.36 million in the past financial year as a result of the divestments. If the acquisitions and sales had taken place on 1 April 2021, the rental income would have increased by € 2.34 million.

The investments are financed by a mix of shareholders' equity (issue of new shares by non-monetary or monetary contributions) and borrowed capital (financing of working capital by the banks, issue of a bond loan, …).

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