BENI STABILI SPA Beni Stabili Siiq: 3-Month 2018 Rents - Acceleration of Development Pipeline

Transparency directive : regulatory news

12/04/2018 17:45

Beni Stabili Siiq: 3-Month 2018 Rents
Acceleration of Development Pipeline
Milan: 12 April, 2018

                         Acceleration of Development Pipeline
                                 "The Sign" - Milan
                            Pre-let to AON of Building A
              EUR 2.6 million annual rents - 9,500 sqm (98% pre-let)
                    Commitment of Building B - C ~16,800 sqm GLA
   Development pipeline committed increased to EUR384m (vs EUR317m Dec 2017)

Good operating performance supported by
             Milan's portfolio
2.2% L-f-L rental growth in Milan non-TI offices

             96.3% financial occupancy(1)

               95.3% offices non-TI(1)

        Reinforcement of financial profile

             New EUR300m 10 yrs 2.375%
            senior unsecured rated Bond
              Issued in February 2018

Redemption of EUR250 million Bond 3.50% due 2019
Exercise of early redemption option in March 2018

(1) Group share data

OPERATING HIGHLIGHTS FOR 3-MONTH 2018 ACTIVITY

Successful rental activity and significant pre-letting

* 5 new contracts for EUR0.5 million annualized rents (1,700 sqm); 6 renewals
  for EUR1.2 million annualized rents (5,200 sqm); 2 pre-lettings(2) for EUR2.8
  million annualized rents;
* Occupancy rate is 96.3% group share on total portfolio and 95.3% on office
  non-TI (+0.2 points on Dec 2017);
* Weighted average maturity of lease agreements to first break-option of 6.8
  years in group share;
* Committed development pipeline increased at EUR384m, 59% pre-let (approx.
  EUR14 million annualized rents);
* Full commitment of "The Sign" project in Milan.

Tenant diversification through the disposal of 9% of Central SICAF

* Disposal of a 9% stake in the SICAF (Central SICAF) completed in 1Q 2018,
  with 6.4% gross exit yield equivalent to approx. EUR140 million of assets
  sale.

Dynamic financial activity for a stronger debt profile

* Redemption of EUR350 million 4.125% senior unsecured bond due 22 January
  2018;
* Successful issue of a new EUR300 million unsecured rated bond with 10 years
  maturity and 2.375% coupon (133bps margin above swap rate) in February 2018;
* Exercise of early redemption option of EUR250 million 3.50% bond due 2019,
  duly repaid in March 2018.

3M2018 Rental Income: EUR52.0 million(3)

The gross rental income amounts to EUR52.0 million in 1Q 2018 (vs EUR50.9
million in 1Q 2017). This change is primarily due to the following main
events:

+EUR2.1 million increase due to acquisition of properties, mainly the Creval
portfolio;

-EUR2.1 million reduction due to 2017 assets sold or under preliminary
agreements;

+EUR0.7 million net impact from rental activities, where the positive impact
of new leases from development assets delivered and new contracts on the
stabilized portfolio has more than compensated the negative impact from few
specific releases, renegotiations or lease extension of non-core assets;

+EUR0.4 million from indexation.

On the like-for-like basis, the gross accounting rents on total portfolio
increase by +0.6%(4) (+1.8% LfL on Office Non-TI and +2.2% LfL considering
Milan Non-TI Offices only).

(2) Included Head of Terms with AON (EUR2.6m top up Rent ~ 9,500sqm on
Schievano The Sign - Building A).
(3) Group share: EUR42.2 million as at 31/03/2018. GS rents include the impact
of minority related to the disposal of TI SICAF stake (-EUR9.9m).
(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.

                                   Group share                    100%
                                    Change (%)   Occupancy
EUR m                    3M 2018  Like-for-Like    rate     3M 2017  3M 2018

Office TI                   14.8      +1.1%        100.0%      24.6     24.6
Office Non - TI             23.2      +1.8%         95.3%      21.5     23.2
Total Office                38.0      +1.5%         96.9%      46.1     47.8
Retail & Others              4.0      (7.0%)        91.7%       4.8      4.0
Development                  0.2      +0.0%          n.a        0.0      0.2
Total portfolio             42.2      +0.6%         96.3%      50.9     52.0

The financial occupancy rate on group share portfolio (excluding Development)
moved to 96.3% (from 96.6% at December 31, 2017). The occupancy rate of Non-TI
office portfolio stands at 95.3% compared to 95.1% at the end of 2017, 91.0% at
the end of 2016 and 87.5% at the end of 2015.

The average maturity of lease agreements considering break options moved to 6.8
years group share.

ACCELERATION OF DEVELOPMENT PIPELINE IN MILAN

Following the communicated strategic targets revised upwards for 2022, Beni
Stabili is focusing on the development of its Milan projects to improve its
operating performance, increase tenant diversification and focus on
high-quality Milan offices.

"The Sign" in Milan: first building pre-let to AON and commitment of the whole
project with two additional buildings
During the first quarter of 2018, Beni Stabili has successfully pre-let almost
the entire building A of The Sign (98% for 9,500 sqm) to AON, the leading
global provider of risk management, insurance and reinsurance brokerage, and
human resources solutions and outsourcing services. The lease agreement
provides for an annualized rent of EUR2.6 million (EUR285/sqm) with a firm
maturity of 12 years (+6 years at the option of the tenant). AON has also been
granted with the option to lease an additional 1,500 sqm in the other assets to
be built in the same The Sign project.

The Sign, building A, added to the development pipeline in Fall 2017, is the
new landmark development project in Milan, which envisages the construction of
a 9,700 sqm (GLA) office building for a total cost(5) of around EUR38 million,
first step of a bigger redevelopment of a strategically positioned area of
17,000 sqm that will allow the development approx. 26,500 sqm (GLA) of
innovative offices distributed in three buildings surrounding a green plaza.

(5) Total cost includes the cost of land plus all capitalized capex and other
capitalized costs.

Following the successful pre-let to AON, also the additional portion of the
project, Buildings B and C, have been committed (GLA of 16,800 sqm and total
cost5 of approx. EUR67 million). The target yield on cost is above 7%.

The assets, which are located in Milan, Via Schievano, south west of the city
center, target the highest green certification and will cover their energy
needs using both self-produced energy and external sources, 100% green
certified. The start of the works is expected in the second quarter of 2018,
together with urbanization works in the neighboring areas.

Beni Stabili can today leverage on a EUR779 million development pipeline, of
which 90% in Milan, encompassing EUR384 million of committed projects (vs
EUR317 million as at 31/12/2017), as well as circa EUR395 million managed
projects in Milan. EUR100.3 million capex(6) are going to be spent on committed
projects.

The committed development pipeline is 59% pre-let, includes 7 projects mainly
in Milan and targets a 6.4% yield.

Beni Stabili targets to increase its committed pipeline up to EUR400 million by
2018/2019.

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 1Q 2018 RESULTS
         Alexei Dal Pastro (General Manager) and Barbara Pivetta (CFO)
            will hold a conference call for investors and analysts
                   Thursday 12 April 2018 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;
                   toll-free number +1 855 2656958

(6) Includes construction costs, technical costs, urbanization fees,
capitalised financial costs, home technical costs and various fees.

                           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 21bn 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 Siiq: 3-Month 2018 Rents - Acceleration of Development Pipeline

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