UNIBAIL-RODAMCO SE: 2016 HALF-YEAR RESULTS

Paris, Amsterdam, July 20, 2016

Press Release

2016 HALF-YEAR RESULTS

A strong first half of the year for the Group

Recurring Earnings per Share (recurring EPS) at €5.81, on track to reach the top end of the FY-2016 guidance (€11.00 - €11.20) provided in February 2016.

• Recurring EPS of €5.81, representing growth of +13.5% from the recurring EPS for H1-2015 adjusted for the disposals in 2015
• Solid operating performance: Like-for-like Group Net Rental Income (NRI) up +2.5%, of which +3.8% for the Shopping Centre division
• Further decrease in cost of debt to a record low 1.7% while average debt maturity is extended to 7.0 years
• Total portfolio value increased to €39.3 Bn, up +4.1% (+3.5% like-for-like)
• Net asset value per share:
  • Going Concern NAV: €191.80, up +2.7% vs. Dec. 31, 2015
  • EPRA NNNAV: €174.40, up +2.6% vs. Dec. 31, 2015
  • EPRA NAV: €189.00, up +5.7% vs. Dec. 31, 2015
• Pipeline of development projects increased to €7.9 Bn

Figures may not add up due to rounding.

"The first half of 2016 has seen Unibail-Rodamco's business perform strongly. In spite of the impact of the terrorist attacks in Paris in 2015 and Brussels in 2016 and the subdued economic environment, our retail activity in France has proven very resilient, with like-for-like NRI growth of +5.0% over the period. Our exceptional portfolio of shopping centres across Europe continues to attract the best retailers worldwide. The strong performance in most of the Group's regions and in the Offices division, as well as the successful projects delivered in 2015, drove robust net rental income growth of +10.6% in Shopping Centres and +7.7% for the Group as a whole.
The buoyant investment market in Paris enabled the Group to dispose of the 2-8 Ancelle and So Ouest office buildings at compelling prices.
Finally, the Group lowered its average cost of debt to an unprecedented level of 1.7%.
The recurring EPS of €5.81 represents growth of +13.5% from H1-2015 rebased for the disposals in 2015, on track to reach around €11.20 for 2016, the top end of our guidance of €11.00 - €11.20 announced in February 2016."
Christophe Cuvillier, CEO and Chairman of the Management Board

RECURRING EPS AT €5.81, UP +13.5% COMPARED TO ADJUSTED H1-2015

Recurring EPS came to €5.81 in H1-2016. This represents an increase of +13.5% from the recurring EPS for H1-2015 rebased for the disposals in 2015, of €5.12. Most were made in H2-2015 and thus had a significant impact in H1-2016.
This increase was primarily due to the robust rental growth of the Shopping Centres and the strong decrease in the average cost of debt. In addition, the Group benefited from the positive impact of the recognition of tax losses carried forward.
Compared to the €5.37 of recurring EPS reported for H1-2015, recurring EPS in H1-2016 increased by +8.2%.

PERSISTENT STRENGTH IN OPERATING RESULTS

Shopping Centres
Tenant sales in Unibail-Rodamco's shopping centres grew by +2.2% through June 2016. Through May 31, 2016, Group's tenant sales growth of +2.1% was slightly above that of the relevant national sales indices. Germany, Central Europe and Spain were the principal drivers with growth of +4.2%, +3.0% and +2.7%, respectively. In France, despite the adverse effect of the terrorist attacks and threats, social unrest and particularly unseasonal weather, tenant sales were up +1.4% through May 31, 2016. New or recently renovated shopping centres, such as Aéroville (+10.2%) and Toison d'Or (+6.2%), performed very well.
The Shopping Centre like-for-like NRI grew by +3.8%, 350 bps above exceptionally low indexation of +0.3%. The Group signed 795 new leases on consolidated standing assets with a Minimum Guaranteed Rent uplift of +20.6%. The rotation rate of 7.2% in H1-2016 is in line with the objective to rotate at least 10% of tenants every year. The EPRA vacancy rate remained stable at 2.5%, of which 0.2% is strategic vacancy.

Offices
Take-up in the Paris region office market was strong in H1-2016, up +20%, driven by the La Défense and CBD markets. The Group leased more than 51,000 m² in France in H1-2016, including the lease with Deloitte for 30,690 m² on Majunga Tower. Financial vacancy stood at 12.3%, down from 14.4% at Dec. 31, 2015. Like-for-like Offices NRI grew by +3.1% compared with the same period in 2015.
On March 24, 2016, the Group disposed of the 2-8 Ancelle office building (Neuilly-sur-Seine, Paris region) to a joint-venture between ACM Vie SA and funds managed by Amundi Immobilier, for a net disposal price² of €267.6 Mn. On July 12, 2016, the So Ouest Office building (Levallois, Paris region) was disposed of for a net disposal price² of €333.8 Mn, representing a net initial yield below 4.5%.

Convention & Exhibition
Convention & Exhibition's Net Rental Income declined by -9.5% vs. H1-2015, which included the triennial Intermat show, but was up +16.4% compared to H1-2014, the latest comparable period. Viparis hosted the first edition of the Viva Technology show at Porte de Versailles, which brought together 5,000 start-ups and more than 45,000 visitors.

VALUE CREATION of €15.87 per share

The Gross Market Value of the Group's assets as at June 30, 2016 amounted to €39.3 Bn, up +4.1% in total and up +3.5% on an like-for-like basis compared to December 31, 2015. The Shopping Centre division grew by +3.2% on a like-for-like basis, with rent and yield effects of +1.2% and +2.0%, respectively.
The average net initial yield of the retail portfolio stood at 4.4% as at June 30, 2016 (vs. 4.6% as at December 31, 2015), reflecting market yield contraction and the increased quality of the portfolio. Strong investor demand for office assets in Paris drove yield compression for the Group's office portfolio. On a like-for-like basis, the office portfolio value increased by +6.8% with a yield effect of +6.1% and a rent effect of +0.7%.

Going Concern NAV per share stood at €191.80 as at June 30, 2016, an increase of +€5.10 (+2.7%) compared to December 31, 2015. This increase was the sum of (i) the value creation of €15.87, (ii) the impact of the mark-to-market of the fixed-rate debt and derivatives for -€5.92, and (iii) the impact of the interim dividend of €4.85 paid in H1-2016.

NEW PROJECTS BRING DEVELOPMENT PIPELINE TO €7.9 BN

Following an exceptional pace of deliveries in 2015, with three new and three renovated and extended retail assets and one new office tower, 2016 will see one important delivery: on April 5, the Group inaugurated the extension and renovation project of Forum des Halles, which now features a Lego Store, a Sephora concept store and Superdry, Liu Jo, Nike and Rituals Parisian flagships, as well as two new restaurants. The Canopy offers a new face to this emblematic shopping centre located at the heart of Paris.

In H1-2016, the Group added two new extension projects to its pipeline, La Part Dieu (Lyon) and Garbera (San Sebastián), representing €0.4 Bn of TIC. As at June 30, 2016, the Group's consolidated development pipeline amounted to €7.9 Bn (€7.2 Bn in group share), up from €7.4 Bn as at December 31, 2015.

NEW RECORDS IN BOND MARKETS DRIVE cost of debt even lower

In H1-2016, the Group took advantage of the rally caused by the ECB's announcement of its corporate sector purchase program to extend its debt maturity profile at attractive conditions. The Group issued a €500 Mn bond with a 20-year maturity, the longest ever for a real-estate company in the Euro market, at a 2.0% coupon, and two €500 Mn bonds with 10- and 11-year maturities.
The average cost of debt decreased to a new record low of 1.7% (from 2.2% in 2015), while the average maturity of the debt increased to 7.0 years.
Financial ratios are strong: Loan-to-value decreased to 34% (vs. 35% as at December 2015) and the interest coverage ratio jumped to 5.9x, from 4.6x in 2015. The Group increased its liquidity further, with a record level of €5.5 Bn of undrawn credit lines at June 30, 2016.

outlook for 2016

Based on the strong H1-2016 results, which include some elements that are not expected to be repeated in the second half (e.g., the recognition of tax losses carried forward in France), the Group expects to generate recurring EPS for 2016 of around €11.20, the top end of the range of €11.00-11.20 for the full year provided in February 2016.

This outlook assumes no material adverse changes in the general economic or security conditions in Europe.

For further information, please contact:

Investor Relations
Zeineb Slimane
+33 1 76 77 57 22
zeineb.slimane@unibail-rodamco.com

Marine Huet
+33 1 76 77 58 02
marine.huet@unibail-rodamco.com

Media Relations
Pauline Duclos-Lenoir
+33 1 76 77 57 94
pauline.duclos-lenoir@unibail-rodamco.com

About Unibail-Rodamco
Created in 1968, Unibail-Rodamco SE is Europe's largest listed commercial property company, with a presence in 11 EU countries, and a portfolio of assets valued at €39.3 billion as of June 30, 2016. As an integrated operator, investor and developer, the Group aims to cover the whole of the real estate value creation chain. With the support of its 1,985 professionals, Unibail-Rodamco applies those skills to highly specialised market segments such as large shopping centres in major European cities and large offices and convention & exhibition centres in the Paris region.
The Group distinguishes itself through its focus on the highest architectural, city planning and environmental standards. Its long term approach and sustainable vision focuses on the development or redevelopment of outstanding places to shop, work and relax. Its commitment to environmental, economic and social sustainability has been recognised by inclusion in the DJSI (World and Europe), FTSE4Good and STOXX Global ESG Leaders indexes.
The Group is a member of the CAC 40, AEX 25 and Eurostoxx 50 indices. It benefits from an A rating from Standard & Poor's and Fitch Ratings.
For more information, please visit our website www.unibail-rodamco.com