BENI STABILI SPA Beni Stabili: 9-month 2017 rents - Full go towards year end

Transparency directive : regulatory news

24/10/2017 17:38

Beni Stabili: 9-month 2017 rents
Full go towards year end
Milan: October 24th, 2017

Growth in operating metrics
1.5% L-f-L rental growth excl. TI assets
95.5% financial occupancy
93.1% excluding TI portfolio (+5.7 pts vs Dec 2015)

Remarkable letting activity
Overall, ~111,000 sqm of letting activity YTD for
approx. EUR22 m annualized rents

Strengthening of financial profile
July: Investment grade rating by S&P ("BBB-" long-term corporate credit rating
with a stable outlook)
October: 1st rated unsecured bond, EUR 300 million 1.625% 7 Years
Upcoming 2018 maturities already secured and 2019 debt due reduced by half

OPERATING HIGHLIGHTS FOR 9-MONTH 2017 ACTIVITY

Successful rental activity resulting in an increased occupancy rate

* 28 new contracts for EUR3.1 million annualized rents; 20 renewals for EUR15.0
  million annualized rents; 6 prelettings for EUR4.2 million annualized rents;
* Occupancy rate is 95.5% group share on total portfolio and 93.1% excluding TI
  portfolio (+5.7 points vs. Dec. 2015);
* Weighted average maturity of lease agreements to first break-option of 7.4
  years in group share;
* Committed development pipeline is 59% pre-let bringing around EUR11 million
  annualized rents.

Investment and capex funded through targeted disposals of mature and non
strategic assets

* Total disposals agreements of around EUR835(1) million with 5.8% gross exit
  yield:
  - Disposal of a 40% stake in the SICAF (Central SICAF) completed in 2Q 2017,
    equivalent to approx. EUR618 million of assets sale;
  - EUR217(2) million of additional disposals agreements, of which EUR 192
    million already cashed in;
* EUR194 million acquisitions mainly in Milan with 6% gross potential yield,
  including the announced EUR118 million acquisition of Credito Valtellinese
  Group's portfolio in the context of a sale and leaseback transaction
* EUR59 million of capex accrued in the 9 months group share.

Active financing activity for a stronger debt profile

* Achievement of an investment grade rating with S&P in July 2017 (BBB- with
  stable outlook)
* Successful liability management:
  > February 2017: Buy-back of EUR270m 2.625% convertible bond due in 2019
  > July-August 2017: EUR335m long-term secured financing with more than 8.5
    years of maturity
  > October 2017: Issue of EUR300m first unsecured rated bond with 7-year
    maturity and 1.625% coupon (115bps margin above swap rate)

9M2017 Rental Income: EUR141.7 million(3)

The gross rental income amounts to EUR141.7 million in 3Q 2017 (EUR149.0
million in 3Q 2016). This change is primarily due to the following main
events:
  +EUR5.6 million increase due to acquisition of properties;
  -EUR13.8 million reduction due to disposals (of which EUR10.6 million related
   to the 40% stake in the SICAF disposal)
  +EUR3.1 million net impact from rental activities;
  -EUR2.0 million impact from releases of properties;
  -EUR0.2 million other non-recurring impacts.

(1) Including a binding offer under condition precedent (EUR9.5 million)
(2) EUR223 million consolidated
(3) Group share: calculation includes rental income from Telecom Italia assets
at 60% (BS ownership in Central Sicaf) from June 2017- (consolidated data:
EUR152.4 million)

On the like-for-like basis, the gross accounting rents increase by +0.9%(4)
(+1.5% excluding Telecom Italia portfolio).

Group Share
                                                   Change (%)   Occupancy
(EUR million)              9M2016       9M2017   Like-for-Like   rate(5)

Office TI                   74.2         63.3        +0.2%        100.0%
Office Non - TI             59.8         64.6        +1.8%         92.8%
Total Office               134.0        127.9        +1.0%         95.6%
Retail&others               15.0         13.7        +0.0%         94.8%
Development                  0.1          0.2         n.a           n.a
Total portfolio            149.0        141.7        +0.9%         95.5%
Total portfolio (exc. TI)   74.8         78.5        +1.5%         93.1%

RENTAL ACTIVITY

Active rental activity and a stabilized occupancy rate

The financial occupancy rate on group share portfolio (excluding Development)
moved to 95.5% (stable from 95.5% at December 31, 2016). Total portfolio group
share occupancy is impacted by the sale in June 2017 of 40% of TI portfolio,
completely offset by the increase in occupancy on non-TI portfolio (96.3% total
portfolio occupancy on consolidated basis as at 30/09/2017).

The occupancy rate excluding Telecom Italia portfolio is 93.1% compared to
91.6% at the end of 2016 and to 87.4% at the end of 2015. This increase is
strictly linked to an active rental activity. In particular, in 3Q 2017 Beni
Stabili executed:

* 28 new contracts for 14,600 sqm and an annual rental value of EUR3.1 million;
* 20 renewals for 83,900 sqm and an annual rental value of EUR15.0 million.

Beni Stabili has also signed 6 preletting agreements on development projects
for a total of 12,800 sqm and EUR4.2 million annualized rent.

Main lease transactions can be summarized as follows:

* Via Cernaia, Milan: pre-let contract for the whole building with Amundi for
  EUR3.1 million and a ~9 years firm maturity (+6 yrs); 8,300 sqm
* Via Montebello, Milan: renewal of the lease contract at passing rent with
  Intesa for EUR7.6 million and a 9 year firm maturity (+6 yrs); 18,426 sqm
* Symbiosis, Milan: new contract for EUR0.55 million and a 12.5 years firm
  maturity (+6 yrs);
* Via Colonna, Milan: new contracts for EUR0.6 million and a 7 years firm
  maturity (+6 yrs);
* Via Scarsellini, Milan: new contract for EUR0.7 million and a 7 years firm
  maturity (+6 yrs).
* Via Lugaro, Turin: renewal of a lease contract for EUR 1.3 million and a 7
  years firm maturity (+6 yrs).

(4) The like-for-like rental growth is calculated on the stabilized portfolio
as the growth rate coming from i) the effect of indexation to inflation; ii)
the effect of an increase or reduction in the vacancy rate of the stabilized
portfolio and iii) the effect of renegotiating expiring rents or of new rents.
The stabilized portfolio is the portfolio adjusted by sales, acquisitions and
development.
(5) Occupancy as at 30/09/2017 includes already the effect of sale of assets
under preliminary agreements (+0.4% effect on portfolio excluding TI assets
already included, +0.3% effect on total portfolio).

The average maturity of lease agreements considering break options moved to 7.4
years group share(6).

REAL ESTATE PORTFOLIO

Value creation and improvement of portfolio quality through asset rotation

Following the communicated strategic targets to improve operating performance
and portfolio quality, Beni Stabili has launched a specific asset management
plan which is rapidly progressing to re-position its portfolio on "Milan green
offices".

Disposal agreements: EUR835 million of properties at a 5.8% gross exit yield

During the period Beni Stabili sold 40% stake in Central SICAF, equivalent to
approx. EUR618 million of assets (6.3% exit yield).
In addition, Beni Stabili completed the sale of 7 assets for a value of
EUR191.5 million, in line with book value. As of September 30th 2017 the
company has disposal preliminary agreements in place for approx. EUR25.7(7)
million, at a price in line with book value.

Acquisitions: EUR194 million at 6% potential gross yield

During the period Beni Stabili purchased:

* Credito Valtellinese Group Portfolio: 17 assets for a total amount of EUR
  117.8 million and 6% gross yield; the two properties (EUR19.2 million)
  subject to a pre-emption right in favor of the Italian Cultural Heritage
  authorities have been fully purchased by Beni Stabili on September 2017
  following the decision of the authorities not to exercise the option;
* Milan, via Principe Amedeo for a price of EUR41.9 million and a potential
  yield of 5.2%; the asset will be completely refurbished;
* Milan, via Marostica for a price of EUR24.7 million and a 6.9% yield.

Focus on development pipeline

Beni Stabili has significantly grown its development pipeline since end-2015
and can today leverage on a EUR792 million pipeline encompassing EUR68.8
million capex(8) to be spent on committed projects (approx. 75% related to
Milan properties) as well as circa EUR460 million managed projects in Milan.
The main committed project in the pipeline is Symbiosis (building A+B). In July
2016, Beni Stabili signed a preletting agreement with Fastweb, the largest
alternative fixed-line TLC provider in Italy part of the Swisscom Group,
covering 16,000 sqm of office areas (and 266 covered parkings). Furthermore,
during 1H 2017, Beni Stabili signed an additional pre-let contract with CIR
Food, an Italian leading food service company, for the lease of 1,015 sqm of
restaurant area on the ground floor. With this signing, Beni Stabili took the
asset occupancy to 85%. Works on the pre-let building started in summer 2016
and are well-advanced for a planned completion in 4Q 2018. This EUR92 million
project is expected to deliver a 7.1% yield on cost.

Alongside the Symbiosis project in Milan, the complete refurbishment/
repositioning projects in Beni Stabili's development pipeline as at September
2017 are:

(6) 7.2 years as at 30/06/2017, including leases renewed on July 2017. WALB as
at 30 June 2017 was 6.9 yrs.
(7) Including a binding offer under condition precedent
(8) Includes construction costs, technical costs, urbanization fees,
capitalised financial costs, home technical costs and various fees.

* Turin, Corso Ferrucci: this 45,600 sqm office building is under complete
  refurbishment. Works are ongoing and in a well advanced stage, (67.5% of
  completion). As of September 2017, Beni Stabili signed pre-let contracts for
  approximately 10,700 sqm. The delivery of the first block of refurbished
  areas (100% pre-let) has been made during 3Q17. The remaining portions of the
  building are expected to be delivered in the future according to
  commercialization.
* Milan, Via Monte Titano: this 6,000 sqm building, which will be fully renewed
  and converted into a 130- room hotel, has been entirely pre-let to Meininger
  Hotels, with a 20+5 year lease agreement. Works are currently in progress and
  assumed to be completed by early 2018.
* Milan, Via Cernaia: this 8,300 sqm office building located in a strategic
  position in Milan set between CBD and the new Porta Nuova business district
  is under complete refurbishment targeting a Leed Platinum certification. The
  project also includes the construction of an additional attic floor. The
  building is 100% pre- let to Amundi, which signed with Beni Stabili a ~9+6
  years lease contract. The delivery of the refurbished building is expected by
  end 2017.
* Milan, Via Colonna: this 3,500 sqm office building is being entirely
  refurbished. The project concerns the complete remake of the asset facade of
  the internal and external spaces and the construction of an additional attic
  floor. Completion is expected to be achieved by beginning 2018. During the
  first nine months of 2017, Beni Stabili signed pre-let contracts on
  approximately 70% of the areas.
* Milan, Via Principe Amedeo: this 7,000 sqm historical building, whose
  acquisition has been finalized during 1Q 2017, is currently under
  refurbishment. The project, which is at 18% completion, includes the complete
  renovation of the internal and external spaces, together with the
  construction of an additional attic floor. Marketing activities are as well
  ongoing, delivery of the asset is expected by 2Q 2018.

As previously announced, Beni Stabili, in light of recent legislative changes
in Italy, will no longer publish its third quarter interim management report.
The Company will publish rental revenues for the three-month periods ended
March 31, along with the continued publication of full year results for the
twelve-month periods ended December 31 and half year results for the six-month
periods ended June 30.

"The director responsible for preparing corporate accounting documents, Barbara
Pivetta declares, pursuant to paragraph 2 of Article 154-bis of the
Consolidated Law on Finance that the accounting information contained in this
statement corresponds to the documented results, books and accounting records."

                        PRESENTATION OF RESULTS Q3 2017
         Alexei Dal Pastro (General Manager) and Barbara Pivetta (CFO)
            will hold a conference call for investors and analysts
                  Tuesday 24th October 2017 at 6.00 pm (CET)
   Slide presentation will be available in advance on Beni Stabili website.
             To participate please dial in the following numbers:
       Italia: +39 02 8020911; UK: +44 121 2818004; USA: +1 718 7058796

For more information: Beni Stabili Siiq
Investor Relations -
Barbara Pivetta - +39.02.3666.4630 - barbara.pivetta@benistabili.it
Media Contact -
Barbara Ciocca - + 39.02.3666.4695 - barbara.ciocca@benistabili.it

SEC and partners Srl
Matteo Steinbach - +39.346.1063989 - steinbach@secrp.com
Michele Calcaterra - + 39. 335.461985 - calcaterra@secrp.com

Beni Stabili Siiq, a leading property company in the Italian real estate sector

Beni Stabili is the leading property player in the Italian real estate market
with total assets of over 4bn euro. Our assets portfolio is sited in key
locations of North and Central Italy's major cities and consist mainly of
offices. We pursue the appreciation of our assets to increase profitability and
create value for our clients, partners and shareholders.

As a major player in office investment and development, we foster pioneering
solutions to improve the environmental performance of our buildings for the
well-being of our clients' employees. With this is mind we are developing in
Milan a new business area dedicated to smart working: Symbiosis.

Beni Stabili is listed on the Milan and Paris Stock Exchanges and operates
through its main offices of Milan and Rome. Beni Stabili belongs to the
Foncière des Régions group, a leading real estate player in Europe who owns
and manage an 18bn euro portfolio located in the most attractive metropolitan
cities of France, Germany and Italy.

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21/12/2018 14:57

BENI STABILI SPA Beni Stabili: 9-month 2017 rents - Full go towards year end

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