MRM - 2018 Registration document

1

Information on M.R.M.’s activities

Presentation of the Company

modern and better-structured competing sites. Market tension seen for the last several months is now being brought to the table during negotiations and is bringing down rental values, mainly for these secondary shopping centres.

Chasing “cosy” formats The levels of vacancy in the market are encouraging landlords to adapt to new market conditions by reaching out to retailers traditionally located out of town (ACTION, BUT). Some of these have seized the opportunity to test their concepts in smaller spaces. The “cosy” format (500m 2 ) is easy to create in a shopping centre and is particularly suited to household goods (decoration, furniture, electrical goods). Pressure on footfall… Despite a degree of turbulence from the ‘yellow-jacket’protests over Q3 2018, annual footfall figures only posted a moderate decrease and the CNCC index recorded a reduction of “just” -1.7% compared with 2018; this is better than in 2017 (-1.8%). However, when we look more closely, figures for the 8 last weekends appear to indicate a reduction in shopping centre turnover. According to analysis by QUANTAFLOW, even Black Friday weekend, which is supposed to increase sales over the 3-day period, posted a -6% reduction in footfall across the country with a -15% reduction for the Saturday. Over subsequent weekends, regional markets were subject to further disruption by shopping centre entrances being picketed (-2.8% in December), although there were considerable differences by region. Protests on some Saturdays, particularly at the beginning of the demonstrations, resulted in some shopping centres being fully closed and therefore had a direct impact on retailer performance. … turnovers… In terms of turnovers, monitoring by PROCOS revealed a -6.8% decrease in November, with out-of-town locations most affected (-7% for shopping centres). The additional impact of falling shopping-centre footfall, meant that additional Sunday opening and a relative return-to-order in the week were not enough to offset retailer losses, particularly in those areas that have already suffered from the economic climate. The CNCC announced a -2.1% downturn in sales in November which mainly hit regional shopping centres. Over the year as a whole, city-centre locations were the worst affected. … and rental values With a broad range of formats, shopping centres have responded differently to the decline in sales. Super-regional centres, which have mainly international retailers and sound finances, have been fairly resistant in terms of rental values. Secondary centres have been more affected by the combined impact of a low-value location and the development of more

Retail parks

First step back For the first time since 2014, the rate of openings for out- of- town retail parks slowed significantly compared with 2017. With almost 370,000m 2 of completions, 22% less new space came onto the market than in 2017 corresponding to almost 40% fewer projects. The prospect of increasingly restrictive measures under the Elan law and numerous rejections from the national committee have quelled developer enthusiasm for out-of-town projects and some have postponed openings until 2019 or 2020. The transformation rate therefore continued to fall and dipped below 50% (54% in 2017). However, given the classification of this format and particularly the scale of the pipeline announced at the beginning of the year (over 800,000m 2 ), these are respectable results. As in previous years, Q4 2018 was key in the out-of-town retail development cycle and accounted for 45% of the completions recorded in 2018. New creations remained in the majority (89%), the same as in previous years. These were distributed over 20 locations, around half of which were for sites over 10,000m 2 . The Greater Paris Region regained market share with the opening of 4 new centres over 20,000m 2 in Saint-Mard, Chambly, Brétigny-sur Orge (1 st stage of “Promenades de Brétigny”) and Cergy. Is the pipeline too ambitious? Yet again, the 2019 pipeline is full to the brim, particularly as it includes projects that were postponed from 2018. There are therefore over 900,000m 2 of out-of-town retail parks theoretically due for completion in 2019, around 70% of which has secured authorisations and has already been started. With increasing pressure due to rising vacancy and longer marketing lead times, a high proportion of this space will not be developed or will be postponed. Landlords will focus on “secure values” with a minimum fill- rate and on schemes that offer guarantees in terms of consumer footfall. The proportion of new space creations remains high at over 80% of the space under development, some of which are additions to existing shopping centres with a retained client base.

M.R.M. 2018 REGISTRATION DOCUMENT

19