MRM - 2020 Universal Registration Document

7

2

Risks factors

Main risk factors

8

9

2.2.5 Environmental risks

10

HEALTH CRISIS LINKED TO THE COVID-19 PANDEMIC

Description of the risk and its impacts

Risk mitigation measures

A resilient brand mix M.R.M.’s portfolio includes a significant proportion of retail space dedicated to food products (supermarkets, food shops), and other products and services that were authorised to remain open during the crisis. In addition, M.R.M. benefts from a relatively favourable brand mix, with a signifcant share of its revenue generated by resilient stores dedicated to food, household goods and discounting as well as services (more than 50% in total, see details by sector in Section 1.4.1 of this Universal Registration Document). Initiatives to strengthen liquidity M.R.M. has enough cash to cushion the blow of a substantial decline in rents and charges for several months. The massive economic stimulus packages announced by the French government and the European Central Bank should limit the impact of the crisis. However, inMay 2020, given the uncertainties related to the duration of the health crisis and its impact on the business, the Board of directors of M.R.M. decided not to propose a dividend to the shareholders for the 2019 fnancial year. While M.R.M.’s fnancial situation is in good shape, with its debt frmly under control, the Board of directors took this decision for caution’s sake, considering that it was in the best interests of the Company and its stakeholders. In addition, M.R.M. reached agreement in June 2020 with its main banking partner to extend by six months until June 2022 and June 2023 the maturity of its two loans making up 80% of the Company’s total bank debt. The €1.2 million loan repayments due in the second and third quarters of 2020 were postponed until the two quarters preceding the new maturity date of the credit lines. Continuity plans M.R.M. and its main service providers have activated business continuity plans and are working well remotely. Digital solutions and health protocols have been deployed at the Company’s head offce, and work procedures have been adapted to enable employees to continue their work.

11 In 2020, M.R.M. had to deal with the diffculties that affected all retail players faced with the pandemic: • restriction of retail activity; • diffculties in collecting rents; and

• declines in appraisal values. Restriction of retail activity

In response to the pandemic, France experienced two periods of lockdown of its population: the frst from 17 March to 11 May and the second from 30 October to 15 December. During these two periods, M.R.M. had to contend with the signifcant restriction of commercial activity throughout France, with the administrative closure of so-called “non-essential” shops and strict restrictions on consumer visits to retail facilities. In total, depending on the sector, the tenants of M.R.M. may have had their businesses closed for up to fve months. On average, for the full year 2020, tenants remaining open accounted for 83% of M.R.M.’s gross annualised rents (see details by period in Section 1.4.1 of this Universal Registration Document). To date, the successive measures taken by the French government to fght against the various waves of the pandemic remain unpredictable with the application of fluctuating criteria: maximum authorised retail space, authorised sectors, geographical location, duration. Difficulty in collecting rents The commercial activity of M.R.M.’s tenants has therefore either been halted or severely disrupted, affecting their fnancial capacity to pay rents and expenses. For M.R.M., this situation weighs on the generation of rental income, the reimbursement of charges and taxes borne by tenants, and on the Group’s cash flow. In 2020, given the economic impact of the health measures on retailers, M.R.M. implemented support measures for its tenants who were administratively forced to close their stores or whose activity had been severely affected during lockdown periods. Rent waivers and negotiated compensation were discussed with tenants on a case-by-case basis. This resulted in a total of €1.4 million in rent waivers in 2020, of which €1.0 million granted for the frst period of lockdown (from mid-March to mid-May) and €0.4 million provisioned for the second (in November). This represents about 1.7 months of the rents received in 2020 across the portfolio. Having deferred the collection of rents and charges for the months of April and May 2020 for all tenants who were forced to temporarily close their businesses during the frst period of lockdown, M.R.M. resumed the normal collection process as of the third quarter. In total, after accounting for the rent waiver agreements already signed with the tenants, the rate of collection of rents due in 2020 reached 90% as of 31 December 2020. Declines in appraisal values The value of the portfolio amounted to €161.0 million as of 31 December 2020, down by 4.1% on a like-for-like basis compared to the end of December 2019, with contrasting trends depending on the asset. On average, the experts have chosen to use higher capitalisation rates, as well as longer letting periods for vacant space and rent-free periods for tenants. Implementation of teleworking From the beginning of the health crisis, M.R.M. had to organise itself to implement the teleworking measures recommended by the French government, thus giving priority to the safety and health of its employees.

36

M.R.M. 2020 UNIVERSAL REGISTRATION DOCUMENT