MRM_REGISTRATION_DOCUMENT_2017

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Information on M.R.M.’s activities

Business overview

Policy of enhancing asset value and refocusing on retail properties The M.R.M. Group has properties, both office and retail, in its portfolio with value-added opportunities. The Group’s strategy notably involves increasing the attractiveness of its assets and exploiting their potential for value-enhancement by refurbishing them and upgrading them to the best market standards, by bringing their rental revenues back into line with market rates, but also by undertaking extensions where possible. In 2013, the Group announced its intention to refocus its business on retail properties and to gradually dispose of its office properties. M.R.M.’s priority is to conclude the sale of its last two office property assets (currently underway) and thus complete its withdrawal from the office segment in 2018. The Group has undertaken a significant investment programme aimed at enhancing the value of its current retail property portfolio. It represents a total projected investment of €35 million, of which €13.6 million was already invested as of 31 December 2017. The Group is also looking at opportunities to acquire or dispose of retail assets as part of a dynamic approach to portfolio management.

With regard to rent regulations, the ICC, which has been very volatile over the last few years, will be gradually replaced by the commercial property rental index (ILAT), a new index that is more closely correlated with changes in gross domestic product (GDP). French environmental legislation is being revamped following the Grenelle Environmental Forum, in the guise of the Building Plan designed to improve the energy performance of buildings and help combat global warming, which notably resulted in the implementation of the Thermal Regulations in 2012. In parallel with the particular focus on personal safety (asbestos, construction materials, etc.), regulations are also evolving in relation to the protection of the environment (energy standards, greenhouse gas emissions, the integration of buildings into the environment, natural landscaped surroundings, etc.) as well as accessibility standards for people with reduced mobility. The competitive environment in which the Company operates is becoming fragmented, in regard to both the type of assets involved and the players, which include a number of listed French real estate companies (the bulk of which operate under the SIIC regime), French and foreign investment funds, and institutional investors (insurance companies, pension funds). No player among them controls a significant share of the different market segments. Certain property players can be considered as competitors as they operate entirely or in part on the same market segment and tertiary divisions as the Company, in particular a certain number of listed real estate companies, investment funds and dedicated investment vehicles, such as OPCIs and SPCIs.

1.4.2 The real estate market in 2017, office and retail segments

France Investment Source: CBRE Research, Q4 2017 “Market View-France Investment”.

of purchasors looking to diversify (Scandinavia, Central and Eastern Europe, Benelux...). Amongst the major countries, Spain was the only country whose performance at the end of the year slowed down, due to issues related to the independence of Catalonia. In this very positive environment, France seems to be slightly behind in 2017, with €25.4 billion of general CRE investments recorded so far. However, this performance will be revised upwards in the upcoming weeks. In the end, 2017 should at least renew the very high volume of 2016. Performance was excellent in light of the limited liquidity of the market in the intermediate segment, due to the limited supply of core assets. Although some transactions have been delayed on the beginning of 2018, the closing of the expected major deals clearly boosted the business. The closing of the second mega- deal of the year, Coeur Defense, was particularly important. The result is that the market structure was much more unbalanced than in 2016.

Diversification underway

A strong dynamic in Europe Strengthened growth perspectives, robust rental fundamentals, real estate spread rates that are very attractive from a global perspective: The context for real estate investment in Europe definitely continues to be positive, with a new record year in terms of volumes exchanged. Although the dynamic in Germany slowed down, it remained positive. Following the strong impact of Brexit on investment hopes in Great Britain, the market picked up again in 2017. New geographic areas have increasingly attracted the attention

M.R.M. 2017 REGISTRATION DOCUMENT

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