Cofinimmo : Financial results Q3 2018

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Third quarter 2018 activities and results

Cofinimmo accelerates its investments in healthcare real estate and consolidates its leadership in Europe

50 % of its global portfolio invested in healthcare real estate

(i.e. 1.9 billion EUR, or a 17 % increase compared to 31 December 2017),

and 131 million EUR of investments announced since 1 July 2018

Good results, in line with forecasts:

• ▪ Net result - Group share: 145 million EUR (96 million EUR at as 30.09.2017), i.e. +51 % compared to 2017

• ▪ Net result from core activities - Group share: 107 million EUR (105 million EUR as at 30.09.2017)

• ▪ Confirmation of the forecasted net result from core activities - Group share for the 2018 financial year:

  6.51 EUR per share

• ▪ Confirmation of the forecasted gross dividend for the 2018 financial year, payable in 2019: 5.50 EUR per ordinary share (distributed over two coupons)

Solid operational performance:

• ▪ Gross rental revenues up 1.3 % over the last 12 months (on a like-for-like basis)

• ▪ Portfolio value up by 5.2 % over the past nine months

• ▪ High and stable occupancy rate: 95 %

• ▪ Particularly long residual lease length: 11 years

Capital reinforcement and financial structure management:

• ▪ 155 million EUR capital increase successfully completed on 02.07.2018

• ▪ New eight-year 120 million EUR credit line signed during the 3rd quarter

• ▪ Debt ratio: 43 % (44 % as at 31.12.2017)

Jean-Pierre Hanin, CEO of Cofinimmo: "The past quarter ended on very good results. Since 1 July 2018 up until now, we have announced 131 million EUR of investments made exclusively in healthcare real estate. This is more in just a few months than the average yearly investment of around one hundred million EUR done by Cofinimmo in this sector over the past years. This acceleration reflects our will to consolidate our position as a European leader in healthcare real estate. At the same time, we are optimising the quality of our global portfolio."

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Cofinimmo relies on more than 35 years of real estate experience in the acquisition, development and management of investment properties. Attentive to societal changes, Cofinimmo's permanent objective is to offer high quality care, living and working spaces that meet new expectations ('Caring, Living and Working - Together in Real Estate'). In this framework, Cofinimmo consolidates its leadership in European healthcare real estate.

1. Summary of activity since 01.07.2018

The third quarter of the 2018 financial year started with the completion (on 2 July) of the 155 million EUR capital increase, which was initiated at the end of June, immediately after the acquisition of 17 German nursing and care homes. New investments made exclusively in healthcare followed shortly after, as of 9 July. These operations added five buildings, both in Germany and in the Netherlands and valued at nearly 60 million EUR, to the Group portfolio in the course of the quarter.

Healthcare real estate (1.9 billion EUR, i.e. a 17 % increase compared to 31.12.2017) now represents more than 50 % of the Group portfolio, which stands at 3.7 billion EUR.

During this quarter, the consortium of which Cofinimmo is part with CFE was also selected for the establishment of the NEO II Public-Private Partnership. This flagship project designed by architect Jean Nouvel consists of the construction, by 2023, of a convention centre that will enhance the international profile of Brussels.

After quarterly closing, two new investments in healthcare real estate were announced.

Following the capital increase and the above-mentioned investments, the Group's debt ratio amounts to 43 %, providing Cofinimmo with the investment capacity to pursue its growth ambitions.

The net result sharply increased compared to last year (+51 %) and amounts to 145 million EUR1 (i.e. 6.62 EUR per share) as at 30.09.2018, compared to 96 million EUR (i.e. 4.50 EUR per share) as at 30.09.2017. The net result from core activities - Group share is in line with the forecast and amounts to 107 million EUR (i.e. 4.89 EUR per share) as at 30.09.2018, compared to 105 million EUR (i.e. 4.91 EUR per share) as at 30.09.2017.

These positive results confirm the 2018 dividend forecast (5.50 EUR gross per ordinary share2).

• 1 Including the 27 million EUR capital gain realised on the Egmont transaction during the first quarter of 2018.

• 2 This dividend will be distributed over two coupons: coupon no. 33, estimated at 2.74 EUR, reached its ex date on 20.06.2018, and coupon no. 34, estimated at 2.76 EUR, has not yet reached its ex date. These two coupons will be paid concurrently in May/June 2019.

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2. Consolidated key figures 2.1. Comprehensive figures

(x 1,000,000 EUR)	30.09.2018	31.12.2017
Portfolio of investment properties (in fair value)	3,691	3,508
(x 1,000 EUR)	30.09.2018	30.09.2017
Property result	156,250	159,340
Operating result before result on the portfolio	128,583	128,809
Net result from core activities - Group share*	106,951	104,546
Result on financial instruments - Group share*	5,570	3,691
Result on the portfolio - Group share*	32,237	-12,354
Net result - Group share*	144,758	95,883
Operating margin*	83 %	82 %
30.09.2018	31.12.2017
Operating costs/average value of the portfolio under management*1	0.97 %	1.00 %
Weighted residual lease length2 (in years)	11	10
Occupancy rate3	94.9 %	94.6 %
Gross rental yield at 100 % occupancy4	6.6 %	6.7 %
Net rental yield at 100 % occupancy5	6.0 %	6.1 %
Debt ratio6	42.9 %	43.8 %
Average cost of debt*7	1.9 %	1.9 %
Average debt maturity (in years)	4	5

2.2. Data per share - Group share8

(in EUR)	30.09.2018	30.09.2017
Net result from core activities - Group share	4.89	4.91
Result on financial instruments - Group share	0.25	0.17
Result on the portfolio - Group share	1.47	-0.58
Net result - Group share	6.62	4.50

The Alternative Performance Measures (APM) defined by the European Securities and Markets Authority (ESMA) are identified with an asterisk (*) the first time they appear in the body of this press release. Their definition and calculation details are available on Cofinimmo's website(www.cofinimmo.com/investors/reports-and-presentations).

• 1 Average value of the portfolio to which are added the receivables transferred for the buildings for which maintenance costs payable by the owner are still met by the Group through total-cover insurance premiums.

• 2 Until the first break option date for the lessee.

• 3 Calculated based on real rents and, for vacant space, the rental value estimated by the independent real estate experts.

• 4 Passing rents increased by the estimated value of vacant space, divided by the investment value of the portfolio (transaction costs not deducted), excluding development projects.

• 5 Passing rents increased by the estimated value of vacant space, less direct costs, divided by the investment value of the portfolio, excluding development projects.

• 6 Legal ratio calculated in accordance with the legislation on RRECs, such as for financial and other debt divided by total assets.

• 7 Including bank margins.

• 8 Ordinary and preference shares.

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Intrinsic value per share (in EUR)	30.09.2018	31.12.2017
Revalued net asset value per share in fair value1 after dividend distribution for the 2017 financial year*	90.65	83.76
Revalued net asset value per share in investment value2 after dividend distribution for the 2017 financial year*	95.31	88.10

To compare the intrinsic value of the share as at 30.09.2018 to that day's stock exchange price, the ex date of coupon no. 33, which occurred on 20.06.2018 as part of the increase in capital initiated on the same day, should be taken into account. As a reminder, coupon no. 33 entitles the holder to receive the pro rata temporis 2018 dividend for the period from 01.01.2018 to 01.07.2018. Considering this last item, the intrinsic value of the share at 30.09.2018 ex coupon no. 333 can be estimated at 88.19 EUR in fair value and at 92.85 EUR in investment value.

Diluted Net Asset Value per share (in EUR)	30.09.2018	31.12.2017
Revalued diluted net asset value per share in fair value1 after dividend distribution for the 2017 financial year	90.51	83.61
Revalued diluted net asset value per share in investment value2 after dividend distribution for the 2017 financial year	95.16	87.94

In accordance with applicable IAS/IFRS standards, the Mandatory Convertible Bonds (MCB) issued in 2011 and the convertible bonds issued in 2016 were not taken into account in calculating the diluted net assets per share as at 31.12.2017 and as at 30.09.2018, because they would have had an accretive effect.

• 1 Fair value: after deduction of transaction costs (primarily transfer taxes) from the value of the investment properties.

• 2 Investment value: before deduction of transaction costs.

• 3 Although coupon no. 33 is estimated at 2.74 EUR per ordinary share, the effect of its ex-date on the intrinsic value (calculated on the basis of all the shares before the capital increase, whether ordinary or preference) is 2.46 EUR per share.

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2.3. Performance indicators based on the EPRA standard1

(in EUR per share)	30.09.2018	30.09.2017
EPRA Earnings*	4.89	4.91
EPRA Diluted earnings*	4.89	4.90
(in EUR per share)	30.09.2018	31.12.2017
EPRA Net Asset Value (NAV)*	94.47	93.26
EPRA Triple Net Asset Value (NNNAV)*	92.35	91.24
30.09.2018	31.12.2017
EPRA Net Initial Yield (NIY)*	.2017 5.6 %	5.6 %
EPRA 'Topped-up' NIY*	5.7 %	5.7 %
EPRA Vacancy Rate*	5.2 %	5.5 %
EPRA Cost ratio (direct vacancy costs included)*	22.2 %	23.3 %
EPRA cost ratio (direct vacancy costs excluded)*	18.0 %	19.8 %

In accordance with the 'EPRA Best Practice Recommendations', given that the MCBs issued in 2011 and the convertible bonds issued in 2016 were out-of-the-money as at 30.09.2017 and as at 30.09.2018, they were not taken into account for the EPRA Diluted Earnings, the EPRA NAV or the EPRA NNNAV calculation on those dates.

1 Data not required by RREC legislation and not subject to audit by the public authorities.

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