MRM - 2019 Universal Registration Document

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Risk factors

Main risk factors

2.2.1 Risks linked to the economic environment, consumer habits and buying behaviours

1 EXCESS RETAIL CAPACITY IN FRANCE Description of the risk and its impacts

Risk mitigation measures

In France, the huge number of shopping facility openings and extensions over the past 30 years has left some regions with excess retail capacity, while town and city centres in these regions have lost their vitality and local shops have disappeared. The excess retail capacity in France could also limit opportunities for new investments or retail projects both in city centres and retail parks. This situation could affect M.R.M.’s business activities, its rental revenues and the value of its asset portfolio, as well as limit future development projects and therefore impact its growth outlook.

All of M.R.M.’s assets are well-located, both in town and city centres and in retail parks, with a number of sites positioned as “local” containing resilient food outlets.

2.2.2 Financial risks

The procedures in place to monitor risks relating to the preparation and processing of accounting and financial information are detailed in Section 1.7 of the management report in Section 3.6 of this Universal Registration Document.

2 GROUP’S REFINANCING CAPACITY Description of the risk and its impacts

Risk mitigation measures

As property investment is a highly capital-intensive business, M.R.M. needs to raise long-term financial resources in the form of loans or equity, to finance its investments and acquisitions and also to refinance any debts reaching maturity. M.R.M. is therefore exposed to market fluctuation risks in the event of a liquidity crisis or wider economic shock. Moreover, M.R.M.’s property assets are diverse in nature and spread geographically over the northern half of France. In addition, most assets are relatively small and are held in a portfolio by a single SPV. This may make it difficult to refinance bank loans when they reach maturity.

The value-enhancement plan for retail assets will end when the €53.5 million loan reaches maturity in December 2021. On that date, M.R.M.’s asset portfolio will comprise stable assets only. M.R.M. also endeavours to keep its debt at an appropriate level (the net LTV ratio was 38.6% on 31 December 2019), and its interest coverage ratio at a satisfactory level.

M.R.M. 2019 UNIVERSAL REGISTRATION DOCUMENT

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