MRM - 2019 Universal Registration Document

1

Information on M.R.M.’s activities

Presentation of the Company

Between 2013 and 2019, the Group will have thus sold a total of nine office buildings, for a cumulative amount of €132.3 million excluding transfer taxes, 9.8% more than the properties’ appraisal values at 30 June 2013 taking into account CAPEX invested over the period. The Group’s strategy notably involves enhancing the attractiveness of its assets and exploiting their potential for value-enhancement by refurbishing them and upgrading them to meet the best market standards, by bringing their rental

revenues back into line with market rates and undertaking extensions where possible. The Group has undertaken a major investment programme aimed at enhancing the value of its current retail asset portfolio. It represents a total projected investment of €35.5 million, of which €34.5 million was already committed as of 31 December 2019. The Group is also looking at opportunities to acquire or dispose of retail assets as part of a dynamic approach to portfolio management.

1.4.2 The Commercial real estate market in 2019

France Retail Investment Source: CBRE study, Market view – France Retail Investment, Q4 2019

High street takes the lead Highstreet retail in city centres remain the most sought after products. In 2019, high street retail investment totalled €2.7billion, i.e., nearly half of all retail investment for 2019. This market segment is disproportionately appealing to investors, particularly when it comes to luxury retail. UBS acquired 3 stores on the Avenue Montaigne for €250 million at a yield of 2.95% and AEW purchased 9 Rue du Faubourg Saint- Honoré for €130 million. Also, investor appetite for assets with potential can be seen in BNP’s acquisition from Thor Equities of 51-53 Boulevard Haussmann for €130 million. Renowned addresses remain highly sought after: Norges purchased the Nike flagship store at 79 Avenue des Champs Elysées for €613 million (yield < 3%). Due to the scarcity of prime assets, shopping centre investment has decreased proportionally, but remains stable on the whole: €1 billion in 2019. When market fundamentals are clear, shopping centres remain highly sought after, despite concerns raised by retail’s structural transformation: rise of e - commerce, retail space saturation, difficulties experienced by mass market brands and mass distribution, etc. French institutional investors with core strategies were exceptionally active in this market. AXA IM acquired 75% of Italie 2 for €433 million and 50% of the Passage du Havre for €203 million from Hammerson and Eurocommercial, with respective yields of 4.1% and 3.7%. Core + assets are also prized by investors interested in redevelopment. The Centre Batignolles was sold by the Duval Group to Primonial for €100 million at a yield of 4.5%. New investors also showed interest in opportunistic assets. The Société des Grands Magasins purchased the Okabé shopping centre for €44 million; Carlyle, in conjunction with Othrys AM, acquired the Canyon portfolio for €45 million, which Ceetrus sold in the context of its arbitrage strategy.

The cautious return of investors

2019: Finally a good year Despite retail’s still suffering reputation, 2019 retail investment totalled €5.7 billion compared with €4.7 billion in 2018 (+20%). Yet abundant capital has not fully stabilised the retail market: retail represents 16% of all corporate real estate investment, versus 22% on average from 2009 to 2016. Investors are cautiously returning to this asset category, favouring high street and prime assets located in shopping centres. Distributor transactions have also sustained the market. In 2019, French institutional investors were the main buyers of commercial assets (56% totalling €3.2 billion), followed by North Americans (€1.2 billion). With a single transaction (€613 million), Norway was the third largest investor in commercial assets in France. Although Paris remains a priority location for investors (58% at €3.3 billion), the Lyon region has surged ahead of other regional markets. An unprecedented €667 million were invested in the Lyon retail market in 2019. This included ADIA’s sale of city centre assets: €546million sale to Amundi Immobilier and Crédit Agricole Centre-Est (at 3.7%), and €69 million sale to Primonial. The sovereign fund, which had acquired the assets in 2013, realised a significant value-add.

M.R.M. 2019 UNIVERSAL REGISTRATION DOCUMENT

15