GECINA - REFERENCE DOCUMENT 2017

PRESENTATION OF THE GROUP Summary of the principal risks

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SUMMARY TABLE OF MAIN RISKS AND CONTROL PROCESSES Stability of the risk level

Risks

Change over the 2016-2017 period

CONTROL PROCESS

HIGH RISK LEVEL RISKS OF CHANGE IN THE REAL ESTATE MARKET regular monitoring of the real estate ■ market, which contributes qualitatively to the guidelines defined by the Strategic Committee; establishment of Asset Reviews ■ coordinated with the budget review; implementation of a five-year business ■ plan, including the Eurosic perimeter; qualitative review of the property assets; ■ management of asset rotation by the ■ Investment & Development Department; analyses conducted on the basis of ■ historical and forward-looking data on RMVs (rental market values); the mechanisms used to control the risks ■ of tenant insolvency and decline in the financial occupancy rate are explained in detail below. RISK OF A FALL IN THE FINANCIAL OCCUPANCY RATE

Risks linked to the cyclical nature of the real estate market, the principal components of which include fluctuating demand and supply, change in interest rates and the general macro-economic context. Impacts: non-completion of investment and sale ■ transactions; decline in rents; ■ impairment of the assessment of its ■ properties (See section 3.5.4.1 “Real estate market risk”).

These risks specific to the activity of a real estate company remained stable during the period in question. The change in these structurally-high risks is closely linked to exogenous factors such as fluctuations on the real estate market, interest rates and economic cycles.

Risk of not renewing the leases or not renting out the assets within the time frames and at prices consistent with the company’s expectations or under lease conditions as favorable as the current ones. This risk is particularly high for office and commercial assets. Impacts: increase in vacancy that generates an ■ absence of rental income and additional operating expenses; deterioration in the Group’s results. ■

constant monitoring of vacant premises ■ and upcoming expiration dates on leases, on the basis of statements obtained from the information system; establishment of an organization dealing ■ with tenant relations and a monitoring of the rental market in order to anticipate as soon as possible the actions to be taken to minimize the financial costs associated with vacancy: early renegotiations marketing, work programming, etc.; tracking the average financial occupancy ■ rate of the Group’s buildings. This rate was 95.4 at the end of December 2017 (see tables 6.1.3.1 “Rent volume by three-year commercial lease terms” and “Rent volume by commercial lease agreement expiry schedule”).

This risk is linked to the economic context and the acquisition and sale policy. The risk was stable over the period. Control of this risk is currently reinforced by the new organizational structure (which is more cross-functional), by the success of the Group’s rental activity and an improving economic climate.

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GECINA - REFERENCE DOCUMENT 2017