MRM_REGISTRATION_DOCUMENT_2017

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Risks Factors

Risks related to the business environment

must then be borne by the Company and this is liable to affect the Company’s revenue, operating income and profitability. In addition, at the end of a lease period there is always the possibility that the Company might have to deal with different market conditions, unfavourable for lessors.

In fact, the current economic climate could result in leases not being renewed or premises being vacated early due to tenants getting into difficulties, in addition to problems associated with re-letting certain premises.

Dependence on main tenants – counterparty risk

The top ten tenants in the retail property portfolio As of 1 January 2018, the top tenant in the retail property portfolio accounted for 5.3% of rents in the retail property portfolio. The top five tenants accounted for 18.9% of rents in the retail property portfolio. The top ten tenants accounted for 29.1% of rents in the retail property portfolio (compared with 30.5% as of 1 January 2017). Up to 2015, the Group provided information on its top ten office property tenants. Given the Group’s refocusing on retail property and the fact that since the end 2016 the office portfolio contained only two assets, of which only one is in operation, this information is no longer considered relevant.

All of the Group’s revenue is generated by letting out property assets to third parties. It follows from this that any default on rent payments can affect the Company’s earnings. Certain tenants account for a significant proportion of the Company’s annual invoiced rents. The contractually legitimate termination of one or several leases could have an impact on the level of rents received by the Company, and on its profitability. However, the main tenants are bound by firm leases that can run for three to twelve years with expiration dates stated in section 1.4.5 of this Registration Document. Clauses in such leases can provide for termination indemnities.

Risks related to the Company’s disposal of certain property assets

The Company, as part of the active management of its property assets, and more specifically as part of its plan to gradually sell off its office buildings, may end up selling certain assets, mainly in order to release new funds with which to carry out other projects.

In view of the continued economic downturn, or of financial and operational risks, particularly through potential problems linked to respect of planned asset disposal schedules, the Company may not be able to sell part of its property assets under satisfactory terms.

Risks related to late completion or non-completion of planned investments

In its strategy of enhancing the value of its property portfolio, and in making its properties more attractive and valuable, the Company must make the necessary investments for refurbishing and restructuring existing sites. In view of the sluggish nature of the current economic climate, the Company is focusing on its existing assets and is continuing its selective investment policy. Delays or non-

completion of certain planned investments, or completion at higher costs than planned – due not only to the expense of conducting prior studies, but also to administrative, technical or marketing hurdles – may slow down the pace of the Company’s development strategy, delay the letting out of the property and have a negative impact on its business and earnings.

M.R.M. 2017 REGISTRATION DOCUMENT

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