BENI STABILI SPA Beni Stabili Siiq: 9-Month 2018 Rents - Pursuit of the good dynamic in Milan

Transparency directive : regulatory news

24/10/2018 18:16

Beni Stabili Siiq: 9-Month 2018 Rents
Pursuit of the good dynamic in Milan
Milan: 24 October, 2018

Good operating performance supported by Milan's portfolio
23 new contracts for EUR9.2 million annualized rents (17,900 sqm)
+2.2% L-f-L rental growth in Milan non-TI offices
97.1% financial occupancy(1) on office portfolio (95.6% offices non-TI)

Increasing development pipeline in Milan
Committed development pipeline increased at EUR424m
(50% pre-let -approx. EUR27 million annualized rents)
Commitment of Milan, Dante 7 (4,800 sqm for EUR55 million total cost)

Merger with Covivio approved
EGM on Sep. 5th approved the Merger with Covivio -
European Group with ca. EUR23bn real estate, listed in Paris and Milan
Strategy focused on Milan offices, client centricity and developments confirmed

Comit Fund litigation successfully closed
Rejection by the judges of the request for refund filed by the Comit Pension
Fund against Beni Stabili in April 2017

(1) Group share data

9M2018 RENTAL INCOME: EUR158.1 MILLION

The gross rental income amounts to EUR158.1 million in 3Q 2018 (vs EUR152.4
million in 3Q 2017). This change is primarily due to the following main events:

+EUR5.5 million increase due to acquisition of properties;
-EUR4.8 million reduction due to 2017 assets sold or under preliminary
  agreements;
+EUR2.8 million net impact from rental activities;
+EUR2.2 million from other impacts mainly referred to indexation.

On the like-for-like basis, the gross accounting rents on the office portfolio
increase by +1.5%(2) (+1.8% LfL on Office Non-TI). On Milan, the increase
reaches +2.2% LfL (Non-TI Offices).

                            Group share                  100%

EUR m      9M 2017   9M 2018    Change (%)     Occupancy   9M 2017   9M 2018
                              Like-for-Like      rate

Office TI     63,3      40,0      +1,1%         100,0%       73,9      74,1
Office Non
- TI          64,6      70,1      +1,8%          95,6%       64,6      70,1
Total
Office       127,9     110,1      +1,5%          97,1%      138,5     144,2
Retail &
Others        13,7      11,9      (6,0%)         91,4%       13,7      11,9
Developement   0,2       1,9      +0,0%           n.a         0,2       1,9
Total
portfolio    141,7     124,0      +0,7%          96,5%      152,3     158,1

23 new contracts for EUR9.2 million annualized rents (17,900 sqm), 19 renewals
for EUR6.5 million annualized rents (22,000 sqm) and 5 pre-lettings for EUR4.7
million annualized rents have been executed in the first 9 months 2018.

The financial occupancy rate on group share office portfolio (excluding
Development) is 97.1%. The occupancy rate of Non-TI office portfolio stands at
95.6% compared to 95.3% at the end of 2017 and 87.5% at the end of 2015.

The average maturity of lease agreements considering break options moved to
6.9 years group share on offices.

ACCELERATION OF DEVELOPMENT PIPELINE IN MILAN

Beni Stabili has committed as development project the office portion of the
asset in Milan, via Dante 7, a historical trophy building built at the end of
the 19th century positioned right in the city centre, between P.zza Cordusio
and P.zza Castello. The redevelopment on the office portion and extension of
the surface (+ ca. 400 sqm reaching 4,800 sqm of office spaces) will have a
total cost of EUR55 million (ca. EUR13 million of capex) and around 4.8% target
yield. Milan, via Dante, to be delivered end of 2019, could be the first site
in Italy for Wellio, Covivio's co-working brand. The refurbishment project
refers to the office portion only; the retail portion is currently fully let.

(2) 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.

On October 1st, Beni Stabili delivered the first building of the Symbiosis
business district. The asset of 20,500 sqm, situated in front of the Prada
Fundation, is let at 86% to Fastweb for 10.5 years and Cir Food for around 15
yrs and has been developed with a total cost of EUR94 million. Considering the
yield on cost of 7.2%, the expected value creation should exceed 20%.

Beni Stabili can today leverage on a EUR828 million development pipeline, of
which 90% in Milan, encompassing EUR424 million of committed projects (vs
EUR368 million as at 30/06/2018), as well as circa EUR404 million managed
projects in Milan. Circa EUR118 million capex(3) are going to be spent on
committed projects.

The committed development pipeline is 50% pre-let, includes 7 projects mainly
in Milan and targets a 6.3% yield.

LITIGATION WITH THE COMIT PENSION FUND IN LIQUIDATION
The arbitration commenced by the Comit Pension Fund against Beni Stabili in
April 2017 - by which the Fund claimed reimbursement of the amount (EUR55.2
million) it paid to the Agenzia delle Entrate as part of the settlement reached
in December 2016 - has been successfully closed with the rejection of all
reciprocal claims and the decision that nothing is due by either party to the
other.

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."

(3) 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 consists 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 in 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 Covivio
reference in the European real estate market with a portfolio of EUR 23bn in
office, hotel and residential assets, located in the most dynamic European
cities.

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21/12/2018 14:57

BENI STABILI SPA Beni Stabili Siiq: 9-Month 2018 Rents - Pursuit of the good dynamic in Milan

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