Coima Res S p A : Half year report

August 03, 2020 at 05:06 pm

Real Estate SIIQ

COIMA RES Interim condensed consolidated financial statements as of June 30th, 2020

◼ INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020
INDEX
CORPORATE INFORMATION .....................................................................................................................................	3
BOARD OF DIRECTORS' REPORT.............................................................................................................................	6
SUBSEQUENT EVENTS .............................................................................................................................................	18
ITALY: ECONOMIC AND REAL ESTATE MARKET CONDITIONS ....................................................................	19
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT/LOSS ......................................................	21
EARNINGS PER SHARE .............................................................................................................................................	22
INTERIM CONDENSED CONSOLIDATED STATEMENT OF OTHER ITEMS IN THE COMPREHENSIVE
INCOME STATEMENTS .............................................................................................................................................	22
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................	23
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY .....	24
INTERIM CONDENSED CONSOLIDATED CASH FLOWS STATEMENT ...........................................................	25
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ................................	26
CERTIFICATION BY THE CEO AND BY THE MANAGING DIRECTOR RESPONSIBLE FOR THE
PREPARATION OF THE CORPORATE ACCOUNTING DOCUMENTS RELATING TO THE INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020.......................................	63
GLOSSARY ..................................................................................................................................................................	64
INDEPENDENT AUDITOR'S REPORT .....................................................................................................................	67
INDEPENDENT APPRAISERS' REPORTS ...............................................................................................................	68

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

CORPORATE INFORMATION

COIMA RES S.p.A. SIIQ (following also the "Company" or "COIMA RES"), with legal incorporation in Milan, Piazza Gae Aulenti 12, with Tax Code, Register of Company and VAT No. 09126500967 is a Real Estate Investment Trust (REIT) founded in 2015 and listed on the Italian Stock Exchange since 2016. COIMA RES' strategy is focussed on the development and active management of a high-quality real estate portfolio with a high sustainability content that is positioned to meet the current and future demand from tenants. At present, COIMA RES owns and manages a real estate portfolio mainly concentrated on the Milan office segment. COIMA RES aims to offer to its shareholders a balanced risk-return profile characterized by a stable and sustainable dividend and by the potential for appreciation of the real estate portfolio over time.

CORPORATE STRUCTURE

Established by Manfredi Catella in agreement with COIMA S.r.l., COIMA SGR S.p.A. and with Qatar Holding LLC, as primary sponsor of the venture, COIMA RES is listed on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A..

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

	GOVERNANCE
Board of Directors 1
Caio Massimo Capuano	Chairman, Non-Executive Director
Feras Abdulaziz Al-Naama	Vice Chairman, Independent Director
Manfredi Catella	Chief Executive Officer
Luciano Gabriel	Independent Director
Olivier Elamine	Independent Director
Alessandra Stabilini	Independent Director
Ariela Caglio	Independent Director
Antonella Centra	Independent Director
Paola Bruno	Independent Director
Board of Statutory Auditors 2
Massimo Laconca	Chairman
Milena Livio	Statutory Auditor
Marco Lori	Statutory Auditor
Emilio Aguzzi De Villeneuve	Alternate Auditor
Maria Stella Brena	Alternate Auditor
Maria Catalano	Alternate Auditor
Compensation Committee
Alessandra Stabilini	Chairwoman
Caio Massimo Capuano	Member
Olivier Elamine	Member
Investment Committee
Manfredi Catella	Chairman
Luciano Gabriel	Member
Gabriele Bonfiglioli	Member
Matteo Ravà	Member
Feras Abdulaziz Al-Naama	Member
Michel Vauclair	Member
Control and Risk Committee
Alessandra Stabilini	Chairwoman
Luciano Gabriel	Member
Paola Bruno	Member
Internal Audit and Compliance

The Internal Audit and Compliance functions are outsourced to a specialized company named Consilia Regulatory S.r.l., which has designated Mr. Gianmarco Maffioli as responsible for the Internal Audit function and Mr. Giacomo del Soldà for the Compliance function.

In charge from June 11th, 2020 until the approval of the financial statements as of December 31st, 2020.
In charge from April 12th, 2018 until the approval of the financial statements as of December 31st, 2020.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Risk Manager

Risk management is outsourced to a specialized company called Macfin Management Consultants S.r.l., which has designated Mr. Emerico Amari di Sant'Adriano as responsible for such function.

External Auditors

The shareholders' meeting held on February 1st, 2016 appointed EY S.p.A. as auditor of the Company for the period 2016-2024 in accordance with articles 14 and 16 of Legislative Decree n. 39/2010.

Executive responsible for the preparation of the company's accounting documents

Fulvio Di Gilio

Chief Financial Officer

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

BOARD OF DIRECTORS' REPORT

The financials as of June 30th, 2020 are summarized in the table below.

(in million Euro)	June 30th, 2020	per share	December 31st, 2019	per share	∆	∆%

Total property value	761.1		767.7		(6.6)	(0.9%)
EPRA Net Reinstatement Value	458.8	12.71	463.1	12.82	(4.3)	(0.9%)
EPRA Net Tangible Assets	440.1	12.19	443.7	12.29	(3.6)	(0.8%)
EPRA Net Disposal Value	434.2	12.03	437.8	12.12	(3.6)	(0.8%)
NAV IAS/IFRS	436.7	12.09	440.1	12.19	(3.4)	(0.8%)
Debt position	345.9		356.4		(10.5)	(2.9%)
Cash position	42.5		42.7		(0.2)	(0.4%)
Net Loan to Value	39.0%		38.8%		0.2 p.p.	n.m.
EPRA Net Initial Yield	5.1%		4.6%		0.5 p.p.	n.m.
EPRA "topped-up" NIY	5.3%		5.3%		0.0 p.p.	n.m.
EPRA vacancy rate	2.1%		2.0%		0.1 p.p.	n.m.

(in million Euro)	June 30th, 2020	per share	June 30th, 2019	per share	∆	∆%

Rents	22.2		17.8		4.4	24.8%
NOI	20.2		16.0		4.2	26.8%
EBITDA	15.5		11.2		4.3	39.4%
EBIT	7.6		17.2		(9.6)	(55.6%)
Recurring FFO	12.1	0.33	8.0	0.22	4.1	50.4%
Net profit	3.6	0.10	13.6	0.38	(10.0)	(73.7%)
EPRA Earnings	8.8	0.24	7.3	0.20	1.5	21.2%
EPRA costs (including direct vacancy	30.7%		37.8%		(7.1 p.p.)	n.m.
costs)

EPRA cost ratio (excluded direct	28.7%		36.8%		(8.1 p.p.)	n.m.
vacancy costs)

Like for like rental growth 3	3.4%		0.9%		2.5 p.p.	n.m
WALT (years)	4.9		5.7		(0.8)	n.m

The NAV IFRS at June 30th, 2020 is Euro 436.7 milion, with a decrease during the first half-year 2020 of 0.8%.

The key factors affecting the NAV increasing are:

EPRA Earnings for the period of Euro 8.8 million;
downward fair value adjustment related to the real estate portfolio, net of minorities of Euro 4.8 million;
dividend payment for Euro 7.2 million;

EPRA Cost Ratio decreases from 37.8% as of June 30th, 2019 to 30.7%, to June 30th, 2020, mainly due to the reduction of the asset management fee.

3 The like for like rental growth is calculated on rents accounted in line with the accounting principle IFRS 16.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The EPRA Earning Group at June 30th, 2020 is of Euro 8.8 million as summarized in table here below.

(in million Euro)	June 30th, 2020	June 30th, 2019		Δ%

Rents	22.2	17.8	4.4	24.8%
Net real estate operating expenses	(2.0)	(1.8)	(0.2)	7.2%
NOI	20.2	16.0	4.2	26.8%
Other revenues	(0.1)	0.0	(0.1)	100.0%
G&A	(4.2)	(4.4)	0.2	(5.1%)

Other expenses	(0.1)	(0.1)	(0.0)	51.6%
Non-recurring general expenses	(0.3)	(0.4)	0.1	(11.0%)
EBITDA	15.5	11.2	4.3	39.4%
Net depreciation	(0.2)	(0.1)	(0.1)	>100.0%

Net movement in fair value	(7.7)	6.1	(13.8)	-100.0%
EBIT	7.6	17.2	(9.6)	(55.6%)
Financial income	0.2	0.0	0.2	>100.0%

Income from investments	1.7	1.5	0.2	10.6%
Financial expenses	(4.0)	(3.5)	(0.5)	13.8%
Non-recurring Financial expenses	(0.3)	(2.5)	2.2	(87.6%)
Profit before taxation	5.3	12.7	(7.4)	(58.3%)
Income tax	0.0	0.0	0.0	0.0%
Profit	5.3	12.7	(7.4)	(58.3%)
Minorities	(1.7)	0.9	(2.6)	-100.0%
Profit attributable to COIMA RES	3.6	13.6	(10.0)	(73.7%)
EPRA Adjustments4	5.3	(6.3)	11.5	-100.0%
EPRA Earnings	8.8	7.3	1.5	21.2%
EPRA Earnings per share	0.24	0.20	0.04	20.8%
FFO	11.6	5.1	6.5	>100.0%
FFO Adjustments5	0.5	2.9	(2.4)	(83.3%)
Recurring FFO	12.1	8.0	4.1	50.4%
Recurring FFO per share	0.33	0.22	0.11	50.0%

The NOI margin includes rents generated by the assets in portfolio, net of direct real estate operating costs (such as property taxes, property management, utilities and maintenance expenses).

The NOI margin at June 30th, 2020 is 91.0% and the l'EPRA net initial yield is 5.1%.

The corporate expenses (G&A) include personnel expenses, asset management fees, governance and control function costs as well as costs related to consultants, auditors, IT, marketing and communication and others.

It should be noted that, on March 31st, 2020, the new Asset Management agreement was signed which resulted in a saving of approximately 30% on the fees to be paid to COIMA SGR S.p.A.. For more information, please refer to the Significant Events section.

Include the adjustment in fair value related to investment properties.
Include mainly non-recurring costs.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Net depreciation, amounting to Euro 0.2 million, mainly includes the write-downs of the other tangible and intangible assets for the period, the value adjustments of inventories, financial assets to the fair value and receivables.

The adjustment in fair value, amounting to Euro 7.7 million, is referred to the evaluations made on June 30th, 2020 by independents experts.

Income from investments, amounting to Euro 1.7 million, is related to the profit of the investments on Porta Nuova Bonnet e Co - Investment, recorded following the equity method, including the derivatives effects of the real estate evaluations in portfolio.

The financial incomes, amounting to 0.2 million, are mainly referred to dividends distributed from the Italian copper Fund, classified among the financial assets at fair value.

The financial expenses are mainly related to existing loans. The amount classified in the item "non-recurring financial expenses" is related to the economic results deriving from the financial reimbursement and the partial closure of the related derivatives agreements connected to the selling of Deutsche Bank branches ended in January 2020.

The Group profit for share amounts to Euro 0.10 and is calculated according to the international accounting standard IAS/IFRS, considering the average number of shares outstanding during the period.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The following table summarizes the Company's reclassified balance sheet including the reclassification of the investment in Porta Nuova Bonnet Fund on proportional consolidation basis, to obtain the total value of the property investments of the COIMA RES Group at June 30th, 2020.

						st			June 30	th	,	2020
					December 31
(in million Euro)	June 30	th	,	2020	,	∆	∆%	Look-Through

	2019
								adjusted

Investment properties	761.1		767.7		(6.6)	(0.9%)	827.0
Other assets	5.7			8.1		(2.4)	(29.6%)	5.7
Investments accounted for using the equity method	38.1		33.7		4.5	13.2%	1.6
Total LT assets	805.0		809.5		(4.6)	(0.6%)	834.3
T rade receivables	14.3		10.0		4.3	43.3%	14.7
Other assets	1.6			0.0		1.6	0.0%	1.6
Cash	42.5		42.7		(0.2)	(0.4%)	43.6
Total current assets	58.4		52.7		5.8	10.9%	59.9
Held for sale assets	10.4		23.5		(13.1)	(55.7%)	10.4
Total assets	873.8		885.7		(11.9)	(1.3%)	904.6
Debt	316.5		340.2		(23.8)	(7.0%)	344.0
Provisions	0.5			0.4		0.0	5.7%	0.5
Other liabilities	4.2			4.2		(0.0)	(0.5%)	4.2
T rade payables	14.7		13.4		1.3	9.7%	18.0
Current Financial Debt	29.4		16.1		13.3	82.2%	29.4
Total liabilities	365.2		374.4		(9.2)	(2.5%)	396.0
Minorities	71.9		71.2		0.7	1.0%	71.9
NAV	436.7		440.1		(3.4)	(0.8%)	436.7
NAV per share	12.09		12.19		(0.10)	(0.8%)	12.09
Net Loan to Value	39.0%		38.8%				39.1%

The column "look-throughadjusted" shows our 35.7% equity investment in the Porta Nuova Bonnet Fund on a proportionally consolidated basis, instead of accounting for using equity method, only for management purposes.

Investment properties, amounting to Euro 761.1 million, include Euro 211 million related to Vodafone, Euro 192.4 million related to Monte Rosa, Tocqueville and Pavilion, Euro 67.8 million related to Deutsche Bank portfolio, Euro 45.8 million related to Deruta, Euro 82.6 million related to Gioiaotto, Euro 62.5 million related to Philips and Euro 99.0 million related to Microsoft.

The other assets are mainly composed by the values of the investments in the ITALIAN COPPER FUND for Euro

3.9 million, acquired during the COIMA OPPORTUNITY FUND I transaction, from the derivatives amounting to Euro 0.1 million and from fixed assets for an amount of Euro 1.7 million.

In application of the IFRS 16 accounting standard, the Group has accounted in the tangible assets rights of use amounting to Euro 1.2 million, which mainly represent the right to use the activities covered by the rental contracts at the date.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The investments in subsidiaries are increasing for an amount of Euro 4.5 million compared to the previous financial statement, mainly thanks to the result of the period amounting to Euro 1.7 million and to the references made by the Bonnet fund amounting to Euro 2.8 million.

Trade receivables refer to the core-business of the Company. The item includes Euro 3.5 million related to anticipated invoicing of rents about the second half-year 2020. It should be noted that as of the date of this report, Euro 1.5 million has already been collected.

The other current assets are related to a financial payable for investments allowed from the participated MHREC Sarl to the connected company Co-Investment 2SCS, amounting to Euro 1.6 million, re-classified among the current assets ate June 30th, 2020.

Non-current assets held for sales, amounting to Euro 10.4 million, are related to the remaining Deutsche Bank branches to be sold. The sale of the branch located in Verona was completed on July 13rd, 2020, while the sale of the remaining two branches is expected in January 2021. It should be noted that the fair value is in line with the value recorded.

The net consolidated financial debt amounts to Euro 304.6 million as at June 30th, 2020, showing a decrease of Euro

10.8 million compared to December 31st, 2019 mainly due to the reduction of the debt deriving from the disposal of 8 Deutsche Bank branches, closed in January 2020.

(Euro million)	June 30th, 2020	December 31st, 2019

(A) Cash	42.5	42.7
(B) Cash equivalent	-	-

(C) Trading securities	-	-
(D) Liquidity (A)+(B)+ (C)	42.5	42.7

(E) Current financial receivables
(F) Current bank debt	(29.4)	(16.1)
(G) Current portion of non-current debt	-	-
(H) Other current financial debt	-	-
(I) Current financial debt (F)+(G)+(H)	(29.4)	(16.1)

(J) Net current liquidity (I)+(E)+(D)	13.1	26.1
(K) Non-current bank loans	(316.5)	(340.2)
(L) Bonds issued	-	-
(M) Other non-current loans	(1.2)	(1.3)
(N) Non-current financial indebtedness (K)+(L)+(M)	(317.7)	(341.5)

(O) Net liquidity (J)+(N)	(304.6)	(315.4)

At June 30th, 2020, the Net LTV is 39.0%.

The other liabilities include (i) the fair value of the financial instruments, mainly due to market rates changes, amounting to Euro 1.1 million, which have suffered a slightly increase compared to December 31st, 2019, (ii) the value of interest rate swap for Euro 1.9 million and (iii) the loan related to the right to use in application of the IFRS 16 accounting standard for Euro 1.2 million.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The trade payables mainly include liabilities and suppliers invoices to be received for a total amount of Euro 4.3 million (Euro 5.1 million ate December 31st, 2019), liabilities for possible future vendors for Euro 1.6 million, deferred incomes related to the anticipated invoicing of rents for a total amount of Euro 5.0 million (Euro 1.6 million at December 31st, 2019), guarantee deposits for an amount of Euro 0.9 million (Euro 0.8 million at December 31st, 2019), tax liabilities for Euro 0.2 million (Euro 0.1 million at December 31st, 2019).

The item current financial liabilities amounting to Euro 29.4 million is mainly related to the loan in place on the Microsoft property for Euro 22.6 million with maturity date December 2020 and to the amount of the debt allocated to the Deutsche Bank branches being sold, the repayment of which is expected to take place within 12 months, for Euro 6.5 million.

As of June 30th, 2020, the weighted average debt maturity is 2.9 years and the weighted average cost of debt is estimated for about 2.0% (about the 87% of the loans are hedged by derivative contracts).

Implications of the COVID-19 on the interim condensed consolidated financial statements

The sudden spread of the COVID-19 pandemic has plunged the entire world economy into a profound crisis, which is believed to be the worst in the last 100 years.

The restrictive measures imposed by national and international authorities have resulted in an interruption of real estate transactions as well as problems for tenants, in particular for some asset classes (hospitality, retail and leisure), for the payment of rents in consideration of the prolonged closure of activities economic. These problems contributed to uncertainty about the valuation of the properties by the Independent Experts, risks of bad debt of the tenants and possible requests for concessions from the tenants themselves.

As already highlighted, the Company's portfolio is mainly composed of offices, a more resilient asset class, with a limited percentage, around 5%, of the portfolio concentrated on hospitality and retail.

As of the date of this report, COIMA RES has collected 98% of the fees due in the first half of 2020 and the remaining amount to be collected is mainly attributable to some payment extensions granted to some of the most affected tenants and which, in almost all cases , will close in the current year.

It should be noted that, at present, the Company is not the beneficiary of any of the initiatives put in place by the national authorities in order to face the serious economic crisis. Some tenants of the Company are recipients of these measures which could allow them to have the necessary liquidity for their activities and to meet their obligations.

In evaluation terms, the Independent Experts express some uncertainties in formulating their opinions as they have faced an unprecedented series of circumstances, also as it is not possible to imagine the impact that COVID-19 could have on the real estate market in the future and therefore highlight the need to constantly monitor property values.

The correction of the real estate values (see paragraph 13 - Real estate investments) did not cause any problems regarding a possible non-compliance with financial covenants. It should be noted that the calculated values of the financial covenants at the date of the Half-Year Financial Report (please refer to paragraph 23 - Non-currentbank borrowings) have high margins compared to the levels provided for in the loan agreements and this would allow for the absorption of further critical situations that should occur during the second half of the year. Furthermore, almost all loans are provided with mechanisms for the treatment of possible overruns of the covenants that would allow the Company, in consideration of the significant cash position, to avoid the loss of the benefit of the term. For further information on financial covenants, please refer to paragraph 23 - Non-currentbank borrowings.

In terms of liquidity, the Group has a solid financial position with an overall liquidity of over Euro 40 million and with a single loan, for an amount equal to about Euro 22 million (equal to 7% of total debt), at maturity in December 2020 for which talks have already started to extend the deadline.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

As regards profitability, on the basis of the current situation, the Company is expected to be able to generate positive operating results for the next 12 months, even if new restrictive measures are implemented and therefore the assumption continues to exist business continuity in the preparation of the half-yearly financial report.

With regard to the financial impacts on the interim condensed consolidated financial statements, the amount recorded is equal to Euro 7,685 thousand, of which Euro 7,662 thousand for the adjustment of the fair value of the properties.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

PORTFOLIO AS OF JUNE 30th, 2020

At June 30th, 2020, the portfolio of COIMA RES amounting to approximately Euro 689.7 million (market value accounted on pro-rata basis).

The initial overall WALT of the portfolio is approximately 4.9 years and the EPRA net initial yield is 5.1%.

The acquisition plan executed to date is in line with our investment strategy focused on the development of a portfolio focused on:

office use;
Italy's most attractive markets (Milan ~90%);
primarily income-producing assets;
Grade A buildings or buildings to be converted to Grade A.

Portfolio breakdown as of June 30th, 2020

Evolution on annual gross initial rents

Gross rents increased by 24.8% to Euro 22.2 million, mainly due to the indirect acquisition of the Philips and Microsoft properties.

On a like for like basis, gross rents increased by 4.1% compared to the previous period.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Main figures of real estate portfolio as at June 30th, 2020.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

SIGNIFICANT EVENTS OF THE PERIOD

Contract with COIMA SGR and CEO remuneration

On March 19th, 2020, the Board of Directors approved a new asset management agreement between COIMA RES and COIMA SGR containing few modifications with respect to the previous agreement in place, amongst which an extension of the first period and an improvement of the economic conditions in favour of COIMA RES.

The end of the first period of the contract was postponed from May 13th, 2021, to January 1st, 2025, and the asset management fee was reduced by 30 bps from 1.10% of NAV to 0.80% of NAV (i.e. a 27% reduction) effective from January 1st, 2020.

In addition, Manfredi Catella, founder and CEO of COIMA RES, unless certain conditions are met, has expressed his will to forego the emoluments related to his role as Chief Executive Officer, for the first period, as extended until January the 1st, 2025, in line with the conduct held since IPO.

Dividend at Euro 0.30 per share for 2019

On June 11th, 2020 COIMA RES Shareholders' Meeting approved the distribution of a dividend for the fiscal year 2019 of Euro 10,831,967.40 (Euro 0.30 per share). An interim dividend of Euro 3,610,655.80 (Euro 0.10 per share) was paid on November 20th, 2019 and the final dividend of Euro 7,221,311.60 (Euro 0.20 per share) was paid on June 17th, 2020.

Renewal of the Board of Directors

On June 11th, 2020 the Shareholders' Meeting in its ordinary session confirmed in 9 the number of members of the Board of Directors and appointed, for the 2020 financial year and, therefore, until the approval of the financial statements for the year ended December 31st, 2020 the new Board of Directors in the persons of Feras Abdulaziz Al Naama, Manfredi Catella, Caio Massimo Capuano, Olivier Elamine, Luciano Gabriel, Alessandra Stabilini, Ariela Caglio, Antonella Centra and Paola Bruno. The Shareholders' Meeting in its ordinary session confirmed Caio Massimo Capuano as Chairman of the Board of Directors and the Board of Directors of June 11th, 2020 confirmed Manfredi Catella as Chief Executive Officer.

Real estate portfolio overview

As of June 30th, 2020, the COIMA RES portfolio consists of 9 real estate properties mainly for office use located in Milan and 58 bank branches located in the North and Centre of Italy. The portfolio is valued at Euro 689.7 million (on a pro-quota basis), 90% of which is in Milan, 50% in Milan Porta Nuova and 85% is for office use. COIMA RES' portfolio has a high sustainability profile: approximately 56% of the portfolio is currently LEED certified, increasing to 65% including the Corso Como Place project where the aim is to achieve a LEED Gold certification.

COIMA RES' portfolio of tenants is mostly made of mid to large sized multinational corporations: the list of the ten largest tenants (representing 85% of the current rent roll on a pro-quota basis) includes Vodafone, Deutsche Bank, Microsoft, BNP Paribas, IBM, Sisal, PwC, Techint, NH Hotels and Philips.

COIMA RES' lease agreements generally provide for fixed rents, not directly related to the underlying operational performance of the tenants. Office tenants represent more than 80% of rents, the hotel exposure (related to NH Hotels) represents 4% of rents, and the retail exposure is less than 2% of rents. The bank branches leased to Deutsche Bank represent 11% of rents.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Acquisitions

Gioia 22: On June 11th, 2020, COIMA RES signed a binding agreement for the acquisition of a 10-25% stake in the Porta Nuova Gioia real estate fund, which owns a property currently being developed called Gioia 22, situated in Via Melchiorre Gioia 22 in the Milan Porta Nuova district. The stake will be sold by UBI Banca, which recently acquired the property to use it as its own headquarter in Milan. UBI Banca plans to occupy 75% of the surfaces of the property under a leasing agreement which has a 15-years duration. The closing of the transaction is expected by the end of 2021 or the beginning of 2022. The stake that will be acquired by COIMA RES, in the Porta Nuova Gioia real estate fund, will be determined by COIMA RES, at its discretion within the aforementioned range, near to the closing. The purchase price of the units of the fund being purchased will be calculated attributing a conventional value of Euro 442.1 million to the property. The entire purchase price will be paid to UBI at the closing of the transaction which will be financed by COIMA RES through its own financial resources.

The Gioia 22 property is a 35,800 sqm building with 26 above ground floors and that has been realised on the back of the demolition of the ex-INPS property, which was built in 1961 and that has been vacant since 2012, after a clean-up process which saw the removal of 200 tons of asbestos. The building, designed by the Pelli Clarke Pelli Architects, is the largest in Italy to achieve the Nearly Zero Energy Building (NZEB) certification in addition of being a candidate for the LEED, WELL and Cradle to Cradle certifications. The Gioia 22 property will be equipped with more than 6,000 sqm of photovoltaic panels which, together with the deployment of ground water, will allow for a reduction in energy consumption of 75% compared to traditional buildings.

Disposals

Bank branches: On January 15th, 2020, COIMA RES completed the disposal of the first tranche of bank branches related to transaction announced on November 8th, 2019 (disposal of 11 bank branches for a total value of Euro

23.5 million). The first tranche concerns the disposal a portfolio of 8 bank branches located in Milan, Verona, Como, Trezzano sul Naviglio and in Liguria for a value of Euro 13.1 million (56% of the total value of the portfolio being sold).

Development

Corso Como Place: in light of the COVID-19 crisis, the construction site has been halted from March 13th, 2020, to May 3rd, 2020. Between May 4th, 2020, and May 18th, 2020, the construction site underwent an adaptation period where some of the features of the site have been rearranged to ensure the health and safety of people working on the site vis a vis the COVID-19 risk. After the adaptation period the works resumed, albeit at a marginally slower pace. Two shifts have been put in place (compared to one pre COVID-19) to de-densify the building site. Despite the delay, the project is still on track for completion in 2020 within the overall budgeted cost of approx. Euro 169 million (including the initial Euro 89 million acquisition price, capex and other capitalised costs of approx. Euro 71 million and other costs (including tenant incentives) of approx. Euro 9 million), a budget which might increase by approx. Euro 1 million in relation to the costs of the health and safety adaptation of the building site. As of June 30th, 2020, the project advancement rate was approx. 85%.

Outlook

The COVID-19 crisis has resulted in social and economic challenges on a global scale and it will most likely remain an aspect to consider for the remainder of 2020. The Italian economy will experience a sharp recession in 2020 and the pace of recovery will depend, amongst other things, on how the health crisis evolves on the back of the lifting of the lock-down restrictions.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

A possible slow-down in the real estate investment and leasing markets in the coming months can be anticipated although it can be expected that high-quality office assets in Milan will prove relatively resilient.

In addition, the potential increase in the adoption of the "working from home" practice will influence future tenant demand for office space from both a qualitative and quantitative point of view. COIMA RES is intensifying the dialogue with its tenants to be able to anticipate potential changes in demand for the office product and, at the same time, COIMA RES is accelerating on the product innovation front to be able to position its offering to best meet tenant demand.

As far as the current portfolio is concerned, COIMA RES will consider further disposals of mature, non-strategic and non-core assets as well as refurbishment and repositioning of selected assets in the medium term.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

RELATED PARTY TRANSACTIONS

The related party transactions that occurred during the first half year are disclosed in the financial statements and in the paragraph 32.

SUBSEQUENT EVENTS

On July 13rd, 2020 the closing of the bank branch located in Verona was completed for an amount of Euro 4.1 million.

The sale of the remaining part of the portfolio, consisting of 2 bank branches located in Milan, for a value of Euro 6,3 million, will be completed in January 2021.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

ITALY: ECONOMIC AND REAL ESTATE MARKET CONDITIONS

The first half of 2020 was characterized by the explosion of the COVID-19 pandemic in Italy and subsequently in other European and non-European countries.

Italy was the first European country to be affected by the pandemic, and the Italian government immediately took extraordinary measures to counter the spread of the virus.

The "lock-down" began in Italy as early as March 9th, 2020, and made it possible to progressively reduce the growth rate in the number of infected people. The Government announced the exit from lock-down through a gradual process which begun on May 4th, 2020, with the relaxation of few constraints and the subsequent reopening of the mobility across regions. The impact of the global COVID-19 pandemic will lead to a global recession in 2020 which is likely to be followed by a recovery in 2021. According to estimates published in June 2020 by the International Monetary Fund, Italian GDP will contract by 12.8% in 2020 and then return to growth at a rate of 6.3% in 2021. Faced with the crisis, both the European Central Bank, the various European governments and the European Union have announced strong measures to support the economic system, in order to limit the negative impacts of the "lock-down" on businesses and workers and ensure the flow of financing to businesses.

In the first half of 2020, the Italian real estate market saw investment volumes of Euro 3.9 billion, a decrease of 25% compared to the volumes recorded in the first half of 2019. In the first half of 2020 the office segment in Italy remained relatively resilient, with investment volumes equal to Euro 1.8 billion, a level substantially in line with the same period last year. The office segment in Milan in particular remained fairly active recording investment volumes of Euro 1.3 billion, up 7% compared to the first half of 2019. The prime yield for the office segment in Milan remains stable at 3.3% as well as the yield for offices in good secondary locations which remains stable at 4.8%. The level of take-up by the tenants for the office segment in Milan in the first half of 2020 stood at 161,000 sqm, down 32% compared to the first half of 2019. The vacancy level drops in the first half of 2020 to 9.9% compared to a value equal to 10.1% at the end of 2019. The vacancy level for Grade A properties remains very low (1.7%) due to the structural scarcity of this type of produced in the city of Milan. The prime rent for office buildings in Milan remains stable at Euro 600 / sqm. It should be noted that the effects of the COVID-19 pandemic are only partially reflected in the numbers reported in the first half of 2020 as a number of transactions closed during this period had been originated in 2019. The impact of the COVID-19 pandemic will likely be more evident in the second half of 2020, with a possible recovery in the level of activity towards the end of 2020 and the beginning of 2021.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT AS OF JUNE 30th,

2020

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT/LOSS

(in thousands Euro)	Notes	June 30th, 2020		of which related	June 30th, 2019		of which related
		parties	parties


Income statements

Rents	4	22,230		-	17,816	-

Net real estate operating expenses	5	(1,996)		(365)	(1,993)	(317)

Net rents		20,234		(365)	15,823		(317)

Income / (losses) from real estate disposal		(100)		-	10	-

Net revenues from disposal		(100)		-	10		-

G&A expenses	6	(4,303)		(2,711)	(4,569)	(2,961)

Other operating expenses	7	(285)		(66)	(113)	-

Gross operating income		15,546		(3,142)	11,151		(3,279)

Net depreciation	8	(286)		(41)	(152)	-

Net movement in fair value	9	(7,612)		-	6,210	-

Net operating income		7,648		(3,183)	17,209		(3,279)

Net income attributable to non-controlling interests	10	1,659		-	1,499	-

Financial income	11	241		-	-	-

Financial expenses	11	(4,271)		(4)	(6,046)	(3)

Profit before tax		5,277		(3,187)	12,662		(3,282)

Income tax		-		-	-	-

Profit after tax		5,277		(3,187)	12,662		(3,282)

Minorities		(1,711)		-	902	-

Profit for the Group		3,566		(3,187)	13,564		(3,282)

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

EARNINGS PER SHARE

(Euro)	Notes	June 30th, 2020	June 30th, 2019

Earnings per share

Basic, net income attributable to ordinary shareholders	12	0.10	0.38

Diluted, net income attributable to ordinary shareholders	12	0.10	0.38

INTERIM CONDENSED CONSOLIDATED STATEMENT OF OTHER ITEMS IN THE

COMPREHENSIVE INCOME STATEMENTS

(in thousands Euro)	Notes	June 30th, 2020		June 30th, 2019

Profit for the period			5,277		12,662

Other comprehensive income to be reclassified to profit or loss in subsequent	22		236		(1,085)
periods

Other comprehensive income not to be reclassified to profit or loss in			-		-
subsequent periods

Other comprehensive income			5,513		11,577

Referable to:

Group shareholders		3,788		12,479

Minorities		1,725		(902)

Total amount		5,513		11,577

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in thousands Euro)		Notes	June 30th,		of which related			December 31st,			of which related
		2020		parties		2019			parties


Assets

Real estate investments	13		758,363		-		764,924	-

Other tangible assets	14		1,482		731		1,582	771

Intangible assets	14		218		-		188	-

Investments accounted for using the equity	15		38,136		-		33,675	-
xmethod

Financial assets at fair value	16		3,933		-		4,593	-

Non-current deferred tax assets				14		-		10	-

Derivatives	17		98		-		158	-

Non-current financial receivables	19		-		-		1,620	1,620

Total non - current assets				802,244		731			806,750			2,391

Inventories	18		2,730		-		2,780	-

Current financial receivables	19		1,620		1,620		-	-

Trade and other current receivables	20		14,274		277		9,958	100

Cash and cash equivalents	21		42,509		-		42,693	-

Total current assets				61,133		1,897			55,431			100

Non-current assets held for sales	13		10,400				23,500	-

Total assets				873,777		2,628			885,681			2,491

Liabilities

Capital stock				14,482		-		14,482		-

Share premium reserve				336,273		-		336,273		-

Valuations reserve				(1,633)		-		(1,677)	-

Interim dividend				-		-		(3,611)	-

Other reserves				83,988		-		62,670		-

Profit / (loss) for the period				3,566		-		31,973	-

Group shareholders' equity		22		436,676		-			440,110			-

Minorities		22		71,900		-			71,175			-

Shareholders' equity				508,576		-			511,285			-

Non-current bank borrowings	23		316,476		-		340,233	-

Non-current financial liabilities	24		1,221		742		1,301	779

Payables for post-employment benefits				88		-		71		-

Provisions for risks and charges	25		381		381		373		373

Derivatives	26		1,878		-		1,888		-

Trade payables and other non-current liabilities	27		1,956		1,064		1,833		998

Total non-current liabilities				322,000		2,187			345,699			2,150

Current bank borrowings	23		29,399		-		16,140		-

Trade payables and other current liabilities	28		13,777		1,330		12,536		1,952

Current tax payables				25		-		21		-

Total current liabilities				43,201		1,330			28,697			1,952

Total liabilities				365,201		3,517			374,396			4,102

Total liabilities and shareholders' equity				873,777		3,517			885,681			4,102

													23

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

			Share premium		Valuation					Profit / (loss)		Profit for the		Group			Shareholders'
(in thousands Euro)	Capital stock					Other reserve		carried				shareholders'		Minorities
		reserve		reserve					period					equity
								forward				equity


Balance as of January 1st, 2019	14,451		335,549		(957)		20,395			3,043		46,267		418,748	13,492		432,240

Partial allocation of the profit of 2018	-		-		-		39,067			-		(39,067)		-	-		-

Dividend distribution on 2018 results 6	-		-		-		-			-		(7,200)		(7,200)	-		(7,200)

Derivatives valuation	-		-		(1,331)		246			-		-		(1,085)	-		(1,085)

Future share capital increase reserve	-		-		-		787			-		-		787	-		787

Changes in interests in subsidiaries	-		-		-		-			-		-		-	43,550		43,550

Profit for the period	-		-		-		-			-		13,564		13,564	(902)		12,662

Balance as of June 30th, 2019	14,451		335,549		(2,288)		60,495			3,043		13,564		424,813	56,140		480,953


			Share premium		Valuation					Profit / (loss)	Profit for the		Group			Shareholders'
(in thousands Euro)	Capital stock					Other reserve		carried				shareholders'		Minorities
		reserve		reserve				period					equity
								forward				equity


Balance as of January 1st, 2020	14,482		336,273		(1,677)		55,801			3,258		31,973		440,110	71,175		511,285

Partial allocation of the profit 2019	-		-		-		24,752			-		(24,752)		-	-		-

Dividend distribution on 2019 results 7	-		-		-		-			-		(7,221)		(7,221)	-		(7,221)

Derivatives valuation	-		-		44		160			-		-		204	14		218

Future share capital increase reserve	-		-		-		17			-		-		17	-		17

Partial reimbursement of equity	-		-		-		-			-		-		-	(1,000)		(1,000)

Profit for the period	-		-		-		-			-		3,566		3,566	1,711		5,277

Balance as of June 30th, 2020	14,482		336,273		(1,633)		80,730			3,258		3,566		436,676	71,900		508,576

Excluding the interim dividend on 2018 results amounting to Euro 3,601 thousand, paid in November 2018.
Excluding the interim dividend on 2019 results amounting to Euro 3,611 thousand, paid in November 2019.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

INTERIM CONDENSED CONSOLIDATED CASH FLOWS STATEMENT

(in thousands Euro)	June 30th, 2020	June 30th, 2019

Profit for the period	5,277	12,662

Adjustments to reconcile the profit to net cash flow:

Net depreciation	201	152

Severance pay	61	40

Net movement in fair value property	7,612	(6,210)

Net income attributable to non-controlling interests	(1,659)	(1,499)

Financial expenses	1,008	1,089

Net movement in fair value financial instruments	66	-

Taxes	-	-

Changes in working capital:

(Increase) / decrease in trade and other current receivables	(4,379)	374

(Increase) / decrease in deferred tax assets	-	-

Increase / (decrease) in trade payables and other current liabilities	1,195	(2,649)

Increase / (decrease) in current tax payables	-	-

Increase / (decrease) in trade payables and other current liabilities	57	(139)

Net cash flows generated (absorbed) from operating activities	9,439	3,820

Investment activities

(Acquisition) / disposal of real estate property	12,049	150

(Acquisition) / disposal of other tangible and intangible assets	(54)	(94)

(Acquisition) / disposal of other non-current receivables	612	-

Purchase of associated companies	(2,786)	(1,250)

Net cash flow generated (absorbed) from investment activities	9,821	(1,194)

Financing activities

Shareholders' contribution / (dividends paid)	(7,196)	(7,200)

Dividends paid to minorities	(1,000)	-

Change in interests in subsidiaries	-	43,550

(Acquisition) / closing of derivatives	(148)	70

Increase / (decrease) in bank borrowings and other non-current lenders	-	127,800

Repayment of borrowings	(11,100)	(132,080)

Net cash flows generated (absorbed) from financing activities	(19,444)	32,140

Net increase / (decrease) in cash and cash equivalents	(184)	34,766

Cash and cash equivalents at the beginning of the period	42,693	82,221

Cash and cash equivalents at the end of the period	42,509	116,987

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Company information

The publication of the interim condensed consolidated financial statements of the Company and its subsidiaries for the six months ended June 30th, 2020 was authorised by the Board of Directors on July 30th, 2020.

COIMA RES S.p.A. SIIQ is a public company listed on the Mercato Telematico Azionario organised and managed by Borsa Italiana, incorporated and registered in Italy, and has its registered office in Milan, piazza Gae Aulenti 12.

The interim condensed consolidated financial statements at June 30th, 2020 have been subject to a limited review by the audit firm EY S.p.A..

2. Principles of preparation and changes in accounting standards 2.1 Principles of preparation

The interim condensed consolidated financial statements at June 30th, 2020 have been prepared in accordance with the IAS/IFRS accounting standards set forth by the International Accounting Standards Board (IASB) and related interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and endorsed by the European Commission as established by Community Regulation no. 1606 of July 19th, 2002.

The interim condensed consolidated financial statements have been prepared under the historical cost principle, except for investment properties, financial instruments, derivative financial instruments and liabilities for non-cash distributions that are recognised at fair value. The carrying value of assets and liabilities that are subject to hedging transactions at fair value and would otherwise be carried at amortised cost, has been adjusted to take account of changes in fair value attributable to the hedged risks.

The interim condensed consolidated financial statements at June 30th, 2020 have been prepared in accordance with IAS 34 - Interim Financial Reporting, so it has not shown upon all the information required during preparation of the annual consolidated financial statements. For this reason, it is necessary to read the interim condensed consolidated financial statements with the consolidated financial statements as of December 31st, 2019.

The interim condensed consolidated financial statements include the balance sheet, the income statement, the comprehensive income statement, the statement of changes in equity, the cash flow statement and the notes.

In accordance with art. 5, paragraph 2, of Legislative Decree no. 38 of February 28th, 2005, the financial statements were prepared in Euro. All amounts of the interim condensed consolidated financial statements are stated in thousands of Euro. Rounding of the data in the notes to the interim condensed consolidated financial statements is intended to ensure consistency with the figures reported in the balance sheet and income statement.

The interim condensed consolidated financial statements have been prepared on a going concern basis, in accordance with the principle of accrual, principle of relevance and significance of information and the prevalence of substance over form.

Assets and liabilities and revenues and expenses are offset only if required or permitted by an accounting standard or its interpretation.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The accounts adopted are consistent with those established by IAS 1 - "Presentation of Financial Statements". In particular:

the statement of assets has been prepared by classifying assets and liabilities according to the "current/non- current" criterion;
the income statement and comprehensive income statement have been prepared by classifying operating expenses by nature;
the financial statements have been prepared using the "indirect method".

The formats used, as specified above, are those that best represent the economic standing and financial position of the Company.

2.2 Consolidation

Scope of consolidation

The interim condensed consolidated financial statements have been drawn up based on the financial statements as of June 30th, 2020, prepared by the consolidated companies and adjusted, where necessary, to align them with the IFRS-compliant accounting and classification policies.

The scope of consolidation includes COIMA RES S.p.A. SIIQ, as Parent Company, and the entities summarised in the table below.

	Entity			Direct participation		% owned	Consolidation method

COIMA CORE FUND IV		COIMA RES S.p.A. SIIQ		100.0%	Full consolidation

COIMA CORE FUND VI		COIMA RES S.p.A. SIIQ		88.2%	Full consolidation

MHREC REAL ESTATE SARL		COIMA CORE FUND VI		100.0%	Full consolidation

COIMA RES SIINQ I		COIMA RES S.p.A. SIIQ		100.0%	Full consolidation

COIMA CORE FUND VIII		COIMA RES S.p.A. SIIQ		50.0%	Full consolidation

LORENTEGGIO CONSORTIUM		COIMA CORE FUND VIII		69.2%	Full consolidation

COIMA OPPORTUNITY FUND I		COIMA CORE FUND VI		88.8%	Full consolidation

FELTRINELLI PORTA VOLTA		COIMA CORE FUND VI		52.9%	Full consolidation
	COIMA OPPORTUNITY FUND I		47.1%


CO-INVESTMENT 2 SCS		MHREC REAL ESTATE SARL		33.3%	Equity method

BONNET		COIMA RES S.p.A. SIIQ		35.7%	Equity method

P. N. GARIBALDI CONSORTIUM		COIMA RES S.p.A. SIIQ		4.0%		Equity method

IN. G. RE. SCRL		COIMA RES S.p.A. SIIQ		1.9%	Equity method

The Company consolidates the mentioned funds and companies in the consolidation financial statements because all the criteria provided by paragraphs 6 and 7 of IFRS 10 in relation to the consolidation of the investment entities are met.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Consolidation methods

The consolidated financial statements include the financial statements of the Company and its subsidiaries as at June 30th, 2020. The financial statements have been prepared using the same accounting principles as those used by the Company for each accounting period.

The main consolidation methods used to prepare the consolidated financial statements are the following:

subsidiaries are consolidated from the date control is effectively transferred to the Company. and cease to be consolidated from the date control is transferred outside the Company; control exists when the Company has the power, directly or indirectly, to influence a company's financial and managerial policies in such a way as to obtain benefits from its operations;
subsidiaries are consolidated on a line-by-line basis, aggregating all financial statement items in full. regardless of the interest held. Only for the determination of net equity and net profit (loss) is the minority interest, if any, shown separately in the statement of financial position and the income statement;
the consolidation of related companies is determined with pro rata adjustments of the participation of changes in equity of associated companies;
the carrying value of equity investments is eliminated against the assumption of their assets and liabilities;
all intercompany assets, liabilities, income and losses, including unrealized profits deriving from transactions between Group companies, are eliminated.

As for COIMA CORE FUND VIII, of which the Company holds 50% of units, the management has analysed in detail the fund management regulations, with reference to the operating methods, as well as the decision-making structure of the advisory committee and of the Shareholders' Meeting, considering the requisites envisaged by IFRS 10 in relation to the exercise of control to be satisfied.

Considering the above considerations, COIMA CORE FUND VIII was fully consolidated.

2.3 Main balance sheet items

Real estate investments

Investment property is represented by property held to earn rental income and/or for capital appreciation and not for use in the production or supply of goods or services or for administrative purposes.

Investment property is initially recognized at cost including incidental expenses and acquisition, consistent with IAS 40, and subsequently measured at fair value, recognizing in the income statement the effects of changes in fair value of investment property in the year such occur.

The costs incurred relating to subsequent interventions are capitalized on the carrying value of the investment property when it is probable that they will generate future economic benefits and their cost can be measured reliably. Other maintenance and repair costs are expensed as incurred.

The fair value of the investment property does not reflect future capital investments that will improve or enhance the properties and does not reflect future benefits from this expenditure.

Investment property is derecognized when sold (at the date on which the buyer obtains the control) or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of consideration to be considered for determining the profit or loss deriving from the cancellation of an investment property is determined in accordance with the requirements for determining the price of the transaction in IFRS 15.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

IFRS 13 defines the fair value as the price (exit price) that would be received for the sale of an asset, or that would be paid for transfer of a liability in a regular transaction between market participants at the valuation date.

In particular, in measuring the fair value of investment property, as required by IFRS 13, the company must ensure that the fair value reflects, among others, rental income from current leases, and other reasonable and supportable assumptions that market participants would use to price real estate properties under current conditions.

In accordance with IFRS 13, the fair value valuation of a non-financial asset considers the ability of a market operator to generate economic benefits from using the asset at its highest and best use, or selling it to another market participant that would employ such at its highest and best use.

According to IFRS 13, an entity must employ valuation techniques appropriate to the circumstances and for which sufficient data are available to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The fair value is measured based on observable transactions in an active market, adjusted if necessary, depending on the specific characteristics of each investment property. If such information is not available, to determine the fair value for measurement of the investment property, the company uses the discounted cash flow method (for a period that varies according to the duration of existing contracts) related to future net income from leasing of property, and it is assumed that the property is sold at the end of this period.

Investment property is valued with the support of an external independent valuation company, duly recognized in terms of professional qualification and recent experience in the leasing and characteristics of the property evaluated. The Company has adopted an internal procedure for the selection and appointment of independent experts as well as for the valuation of investment properties. On the selection and appointment of the independent experts, the procedure requires specific operational binding instructions to verify, through appropriate written statements or acquiring specific certifications. that independent experts respond to business needs and with local regulations.

Valuations are prepared every six months, in compliance with the standard "RICS Valuation - Professional Standards" and in compliance with applicable regulations and the recommendations provided by ESMA European Securities and Markets Authority.

The remuneration provided for assessments at June 30th, 2020 has been preliminarily defined as a fixed amount based on the size of the individual investment property. The process by which the Company determines the fair value of its real estate investments, however, falls within the estimation processes, which implies the forecast of costs and revenues related to each investment and the formulation of assumptions on variables of calculation models that depend on expectations the performance of real estate and financial markets as well as the general economic conditions that affect rent levels and the reliability of tenants, and that, in consideration of the uncertainty connected to the realization of any future event, are able to determine variations, even significant and in the short term, the conclusions of the experts and therefore of the results of the financial statements, albeit in constant evaluation models. As for the use of estimates regarding real estate investments, refer to paragraph 13 - Real estate investments.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Real estate initiatives in progress

The real estate initiatives in progress are measured at fair value according to the international accounting standard IAS 40 - Fair value option, if:

the destination to the lease or the appreciation of the invested capital is envisaged, and
the fair value of investments can be reliably determined.

In accordance with the provisions of Consob recommendation DIE/0061944, the estimate of fair value is considered reliable if the following main conditions are met:

the project is in an advanced state, or
the main building permits and authorizations have been obtained, the main tasks for the realization of the project have been assigned and there are no financing difficulties in the subsequent development phases.

If these conditions are not met, the property is accounted for in accordance with IAS 16.

Inventories

Inventories consist of lands - also to be built -, properties under construction and renovation, completed properties, for which the purpose is the sale to third parties and is not maintaining the property portfolio to perceive the rental income.

Land for development are valued at the lower of acquisition cost and estimated realizable value. Cost includes incremental expenses and borrowing costs eligible for capitalization, where the following conditions:

management has taken decision on the allocation of significant areas in its use, development, or direct sales;
being incurred costs to obtain the asset;
being incurred borrowing costs.

Properties under construction and / or being restructured, are valued at the lower of cost, including incremental expenses of their value and capitalizable financial charges, and estimated realizable value.

The properties for sale are valued at the lower of cost or market value based on transactions of similar properties by location and type. The acquisition cost is increased by any incremental expenses incurred up to the time of sale.

The Company's investment strategy is focused on the creation of stable cash flows deriving from the lease of the real estate portfolio, for this reason the management has deemed it appropriate to classify in this item the properties that do not meet the scope of the Company's core business, or vacant properties that do not generate rents.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and short-term deposits, in the latter case with a term of less than three months. Cash and cash equivalents are stated at their nominal value and the spot rate at year-end, if in foreign currency.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Non-current assets held for sale and discontinued operations

The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sale will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:

represents a separate major line of business or geographical area of operations
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or
is a subsidiary acquired exclusively with a view to dispose it.

Net Equity

Capital stock

The capital stock represents the nominal value of payments and contributions made in this regard by shareholders.

Valuation reserve

When derivatives hedge the risk of cash flow variations of covered instruments (cash flow hedge; e.g. hedging the cash flow variation of assets/liabilities due to exchange rates movements), the portion of fair value considered effective are initially recognized in OCI in the cash flow hedge reserve, and subsequently recognized in the statement of profit or loss, consistently with the economic effects of the hedged.

Cash dividend and interim dividend

The Company recognises a liability to pay a dividend when the distribution is authorised, and the distribution is no longer at the discretion of the Company. As for the corporate laws in Europe, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

Severance pay

Severance pay fund (TFR) is considered as a defined benefit plan. The benefits promised to employees are recognized monthly with the maturation and are paid upon termination of employment. The severance pay is accrued based on the seniority reached at the end of each individual employee in accordance with the laws and labor contracts in force at the reporting date. The provision reflects the liability towards employees, based on experience and seniority wages paid, recalculated based on its actuarial value. The adopted actuarial assessments are the best estimates of the variables that determine the final cost of the subsequent performance at the end of the employment relationship.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Provision for risks and charges

The provisions for risks and charges relate to costs and charges of a determined nature and of certain or probable existence which at the closing date of the period are undetermined in the amount or date of occurrence. Provisions are recognized when: (i) the existence of a current obligation, legal or implicit, deriving from a past event is probable; (ii) it is probable that the fulfilment of the obligation will be expensive; (iii) the amount of the obligation can be estimated reliably. The provisions are entered at the value representative of the best estimate of the amount that the Company would rationally pay to extinguish the obligation or to transfer it to third parties on the closing date of the period. When the financial effect of time is significant and the payment dates of the obligations can be estimated reliably, the provision is subject to discounting; the increase in the provision connected with the passage of time is charged to the income statement under "financial charges". When the liability relates to tangible assets (e.g. area reclamation), the provision is recognized as a contra-entry to the asset to which it refers; the income statement is entered through the amortization process. The provisions are periodically updated to reflect changes in cost estimates, implementation times and discount rates; the estimate revisions of the funds are recognized in the same income statement item that previously accepted the provision or, when the liability relates to tangible assets (e.g. area reclamation), as a contra-entry to the asset to which it refers .

The notes to the financial statements illustrate the potential liabilities represented by possible (but not probable) obligations, deriving from events the existence of which will be confirmed only if one or more assumptions are found that are not totally under the control of the Company. For more details, see the description in paragraph 6 - G&A expenses.

Financial instruments

Financial instruments are an incentive recognized to management in relation to their significant contribution during the start-up and development of the Company. These financial instruments will entitle the payment of a return linked to changes in the Net Asset Value (NAV) to be carried out also through the assignment of shares in the Company. Financial instruments are initially recognized at fair value, recording the effects deriving from the change in fair value in the period in which they occur in the income statement. The fair value at the end of the period is determined through estimates made by management, also through the support of independent experts. The process by which the Company determines the fair value of the instrument is part of the estimation process, which implies the forecast of cash flows based on variables that depend on expectations of the performance of the real estate and financial markets and the general market conditions, able to determine changes, even significant and in the short term, on the conclusions of the experts and therefore of the budget results.

Financial liabilities - Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

IFRS 9 - Derivatives financial instruments

The Group uses derivative financial instruments, such as interest rate caps and interest rate swaps to hedge the risk of cash flow of financial debts. Such derivative financial instruments are recognised at fair value according to international accounting standard IFRS 9 and they are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

there is "an economic relationship" between the hedged item and the hedging instrument.
the effect of credit risk does not 'dominate the value changes' that result from that economic relationship.
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

As for the cash flow hedge, the effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.

Impairment

IFRS 9 requires the Group to record expected credit losses on all items such as loans and trade receivables, regarding either a 12-month period or the entire duration of the instrument (e.g. lifetime expected loss). The Group applies the simplified approach and therefore record the expected losses on all trade receivables based on their residual contractual duration. The Group, in assessing the impacts deriving from its own receivables in the portfolio, both commercial and financial, considering the characteristics of the same and the counterparties, and the collection times, believes that even if not all loans present a guarantee, the impact deriving from the possible allocation is not significant, considering the risk profile of the tenants.

Hedge accounting

The Company resorts to the application of hedge accounting regarding the subscribed interest cap rate instruments. Considering the foregoing, the Company has established that all existing hedging relationships that are currently designated as effective hedges continue to qualify for hedge accounting in accordance with IFRS 9. However, the new standard concerning these instruments provides, the recognition of the effects deriving from the valuation, also for the portion of the extrinsic value, in the item "other reserves" of the shareholders' equity.

Recording of revenues, income and expenses in the income statement

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Revenues

Revenue is recognized to the extent in which it is likely that economic benefits will be obtained by the company and the revenue can be measured reliably. Revenue is measured at fair value of the amount received, excluding discounts, rebates and other sales taxes.

The following specific recognition criteria of revenues must always be considered before recognition in the income statement:

rental income: rental income from the investment property owned by the Company is recognised on a straight-line basis, in accordance with the international accounting standard IFRS 16 (paragraph 81), conforming the maturity lease agreements;
income from real estate disposals: income from the real estate disposals are recognized in the income statement when the contractual obligation performance is effectively executed and then transferred to the buyer of all the significant risks and rewards associated with ownership, which is normally transferred on the date of signing the deed notarial, when the transaction price is generally also settled.

IFRS 15 Revenue from contracts with customers

IFRS 15 replaces IAS 11 - Customs work, IAS 18 - Revenues and related interpretations and applies to all revenues from contracts with customers, unless these contracts fall within the scope of other principles such as for example leases, for which the reference principle is IFRS 16. The standard introduces a new five-phase model that will apply to revenues from contracts with customers. IFRS 15 provides for the recognition of revenues for an amount that reflects the consideration to which the entity believes it is entitled in exchange for the transfer of goods or services to the customer.

The principle involves the exercise of a judgment by the Company, which takes into consideration all the relevant facts and circumstances in the application of each phase of the model to the contracts with its customers. The standard also specifies the accounting of incremental costs associated with obtaining a contract and costs directly linked to the completion of a contract.

However, since the revenues of the group are mainly leased, adoption did not have any impact on the consolidated financial statements.

Leases

The Company is characterized by investments in high quality real estate portfolios, concentrated mainly in primary Italian cities, with high-profile tenants and long-term leases, including adequate safeguard clauses and clauses that provide for the tenant to pay the costs and ordinary and extraordinary maintenance works. Currently, the rental revenues deriving from property investments are recorded based on the international accounting standard IFRS 16 (paragraph 81), the criterion representative of the temporal competence, based on the existing lease agreements.

Considering the current contractual structure and the sector practices adopted by the main competitors, it can be concluded that with the adoption of IFRS 15 it did not have any impact on the Group's results with regard to property leases.

Real estate disposals

Regarding real estate disposals, it should be noted that these take place through the signing of a notary deed, during which the actual contractual obligations and the actual availability of the asset by the notary are also verified. In particular, these transactions include: (i) the transfer of the asset by the seller, (ii) the adjustment of the consideration by the buyer to the deed without further extensions and / or commitments for the seller, and (iii), if possible, the payment of deposits or advances together with the signing of preliminary sales agreements, the latter case taking into account the short time interval between preliminary and deed (generally less than one year) does

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

not provide for the inclusion in the price of significant implicit financial components. Although these operations fall within the scope of IFRS 15, they do not have significant effects deriving from the application of the new standard because the performance obligations were extinguished at the date of the deal.

IFRS 16 leases

As of 1st January 2019, the new accounting standard IFRS 16, which defines the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases in the financial statements on the basis of a single model similar to that used to account for finance leases in accordance with the previous IAS 17, became applicable. The standard provides two exemptions for recognition by lessees - leases relating to 'low-value' assets (e.g. personal computers) and short-term leases (e.g. contracts due within 12 months or less). At the start date of the lease contract, the lessee recognises a liability against lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset for the term of the contract (i.e. the right to use the asset). Lessees shall account separately for interest expense on the lease liability and depreciation of the right to use the asset. Lessees shall also remeasure the lease liability on the occurrence of certain events (for example, a change in the terms of the lease agreement, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee generally recognises the amount of the remeasurement of the lease liability as an adjustment to the right to use the asset.

The accounting for lessors in accordance with IFRS 16 is substantially unchanged from the previous accounting in accordance with IAS 17. Lessors continue to classify all leases using the same classification principle as in IAS 17 and distinguishing between two types of lease: operating leases and finance leases. IFRS 16 requires lessees and lessors to provide more extensive disclosures than IAS 17.

It should be noted that as of today the Company has leasing contracts in place for computer equipment, which do not fall within the scope of the principle, and three rental contracts, one of which relates to the registered office:

on July 21st, 2017 COIMA RES signed a lease agreement for the new registered office in Milan, Piazza Gae Aulenti n.12. The agreement provides for a duration of six years renewable twice with an annual rent of approximately Euro 94 thousand. In consideration of the fact that COIMA RES has invested a significant amount of money in the fitting out of the new headquarters, it is appropriate to consider the duration of the lease agreement in twelve years;
on January 26th, 2018 the Lorenteggio Village Consortium signed a lease contract for the control room of the Vodafone property complex located in Milan, Via Lorenteggio 240, expiring on January 31st, 2027 and with an annual rent of Euro 15 thousand;
on December 4th, 2015 COIMA OPPORTUNITY FUND I stipulated a lease contract for a garage belonging to a building located in Milan, Viale Fulvio Testi 282, expiring on June 30th, 2025 and tacitly renewable for a further nine years, at an annual rent of Euro 80 thousand. On April 11th, 2017 the fund subleased the area in question to the tenant Philips S.p.A. under the same contractual conditions stipulated with the lessor.

Costs

Costs and other operating expenses are recognized as components of the result for the period when they are incurred on an accruals basis and when they do not meet the requirements for accounting as assets in the balance sheet.

Financial income and expenses

Financial income and expenses are recognized on an accrual basis according to the interest accrued on the net value of the related financial assets and liabilities using the effective interest method.

Borrowing costs directly attributable to the acquisition and construction of investment property are capitalized in

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

the carrying amount of the pertinent property. Capitalization of interest is carried out on condition that the increase in the carrying value of the asset does not ascribe to the same value higher than its fair value.

Taxes

Current taxes

The Company as a SIIQ is subject to a special tax regime, under which, inter alia, the business income from real estate leasing is exempt from corporate income tax (IRES) and the regional tax on productive activities (IRAP) and the part of the corresponding statutory profit is subject to taxation by shareholders at the time of distribution of the same in the form of dividends. The taxes for the period are therefore calculated on the income produced by activities different from the real estate leases (not exempt activities).

Deferred tax

With regard to non-exempt operations, deferred tax assets and liabilities are recognized according to the global allocation method.

They are calculated on the temporary differences between the values of the assets and liabilities recorded in the financial statements and the corresponding values recognized for tax purposes. Deferred tax assets on taxable losses and deductible temporary differences are recognized to the extent that it is probable that future taxable income will be available, also taking into account the special regime envisaged for SIIQ, against which they can be recovered.

Earnings Per Share

Earnings Per Share - basic

Basic earnings per ordinary share is calculated by dividing the profit for the period attributable to ordinary shares and the weighted average number of ordinary shares outstanding during the year.

Earnings Per Share - diluted

Diluted earnings per ordinary share is calculated by dividing the profit for the period attributable to ordinary shares and the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued upon conversion into ordinary shares of all potential ordinary shares with dilution effects.

Use of estimates

The preparation of the financial statements and related notes requires that the management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the statements.

Actual results could differ from these estimates due to the uncertainty surrounding the assumptions and conditions on which the estimates are based. Therefore, changes in the conditions underlying the opinions, assumptions and estimates adopted may have a significant impact on future results.

Estimates are used to determine the fair value of investment properties, of financial instruments and derivatives. Estimates and assumptions are reviewed periodically by management and, when deemed necessary, are seconded by opinions and studies of independent external consultants of leading standing (for example, real estate appraisals), and the effects of any changes are reflected in the income statement.

The following are the most significant estimates related to the preparation of financial statements and annual accounting reports in that they entail many subjective opinions, assumptions and estimates:

investment property: is initially recognised at cost including incidental expenses and acquisition, in according

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

to IAS 40, and subsequently measured at fair value, recognising in the income statement the effects of changes in fair value of investment property in the year such occur. The fair value at the closing date of the period is determined by valuation of the real estate assets performed by independent experts; this valuation is subject to hypotheses. assumptions and estimates; therefore, a valuation by different experts might not result in an identical opinion;

financial instrument: financial instruments are initially valued at fair value, recording the effects deriving from the change in fair value in the period in which they occur in the income statement. Fair value is determined through estimates made by management, also through the support of independent experts; this valuation is subject to estimation processes, which implies the forecast of cash flows based on variables that depend on expectations of the performance of the real estate and financial markets as well as the general market conditions;
derivative financial instruments: derivative financial instruments are measured at fair value, recognizing the effects deriving from the change in fair value in the period in which they occur. The fair value is determined through estimates made by management based on market prices at the reference date;
taxes: income taxes, related to the non-exempt income, are estimated based on the prediction of the actual amount that will be paid to the Inland Revenue Office based on the income tax declaration; recognition of deferred tax assets is based on expectations of taxable income in future years, and pre-paid and deferred taxes are determined at the tax rates expected to be applied during the years in which temporary differences will be reversed.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

2.4 New accounting standards, interpretations and amendments adopted by the Company

The accounting standards adopted in the preparation of the consolidated financial statements are consistent with those in effect at the balance sheet date inclusive of new standards, amendments and interpretations effective from December 31st, 2019, except for the adoption of new standards effective as of January 1st, 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Several other amendments and interpretations apply for the first time in 2020, but do not have an impact on the consolidate financial statements of the Group.

Amendments to IFRS 3: Definition of a Business

The amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group, but may impact future periods should the Group enter into any business combinations.

Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform

The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments had no impact on the consolidated financial statements of the Group as it does not have any interest rate hedge relationships.

Amendments to IAS 1 and IAS 8: Definition of Material

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements.

A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Group.

Conceptual Framework for Financial Reporting issued on 29 March 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards.

The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts.

These amendments had no impact on the consolidated financial statements of the Group.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Public statement ESMA: Implications of Covid-19 outbreak on the half-yearly financial reports

As of May 20th, 2020 the ESMA European Security Market Authority published some suggestions for the report of the half-year financial statements and for the other interim financial reports related to COVID-19 disclosure effects. In particular ESMA ha underlined the importance of:

update the information of the last financial statements, in order to properly inform all the stakeholders about the impact of COVID-19 with a particular focus on the significant risks and uncertainties, on the Company continuity, on the write-down of non-financial assets and on the profit/ (loss) forecast;
ensure the publication of detailed information related to the impact of COVID-19, the strategies, the aims, the operations and performances on the report about management, as well as any possible mitigation action made to the deal with pandemic effects;
give right and clear information, which should be communicate without delay, following on time the deadlines of the current legislation.

With reference to the first point, please refer to the paragraph Implications of the COVID-19on the interim condensed consolidated financial statements in the directors' report and to what is described in the risks section.

With reference to the second point, please refer to the paragraph Overview on the real estate portfolio and Outlook in the section Significant events of the period.

With reference to the third point, it should be noted that the Company is roactive in communicating information to the market through appropriate periodic press releases.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

3. Operating Segments

In order to represent the Company's activity by sector, it was decided to represent it primarily based on the intended purpose of the buildings and secondarily, based on the geographic location.

Taking into consideration the investment strategy also outlined in the prospectus. the intended purpose of the buildings is divided into administrative buildings, bank branches and other real estate. Administrative buildings include all buildings intended for rental for office use, while other real estate includes all buildings intended for other tertiary type purposes such as, for example, commerce and logistics. The bank branches category is presented separately because it represents 15% of the total property.

An income statement showing information about the Company's income and results for the six months ended June

30th, 2020 is given below:

(in thousands Euro)	Offices	Bank branches	Others	Unallocated amounts	Sector results

Rents	19,319	2,109	802	-	22,230
Net income of non-controlling interests	1,629	-	-	30	1,659
Financial income	-	-	-	241	241
Total income	20,948	2,109	802	271	24,130
Net real estate operating expenses	(1,479)	(364)	(153)	-	(1,996)
Profit / (loss) from real estate disposals	-	(100)	-	-	(100)
G&A expenses	(3,513)	(465)	(313)	(12)	(4,303)
Other operating expenses	(223)	(33)	(24)	(5)	(285)
Net depreciation	-	(50)	-	(236)	(286)
Adjustment to fair value	(5,551)	(1,091)	(970)	-	(7,612)
Financial expenses	(3,440)	(586)	(233)	(12)	(4,271)
Income tax	-	-	-	-	-
Sector results	6,742	(580)	(891)	6	5,277

Segment income is divided into the most significant items under real estate or leasing instalments, operating expenses and other expenses recharged to the tenants.

The sector result is also represented, which also includes all other income such as, for example, financial income, operating expenses and other costs.

The column called unallocated amounts includes net income attributable to non-controlling interests, financial expenses on bank accounts, write-downs, exchange losses and income taxes.

A balance sheet showing the distribution of the assets and liabilities based on the intended use of the real estate is listed below.

(in thousands Euro)	Offices	Bank branches	Others	Unallocated amounts	Sector results

Non-current assets	698,172	65,132	37,368	1,572	802,244
Current assets	46,683	10,070	2,567	1,813	61,133
Non-current assets held for sales	-	10,400	-	-	10,400
Total assets	744,855	85,602	39,935	3,385	873,777
Non-current liabilities	276,657	26,972	18,371	-	322,000
Current liabilities	31,627	9,604	1,910	60	43,201
Total liabilities	308,284	36,576	20,281	60	365,201

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Assets and liabilities are divided based on the relationship with the real estate divided by the various categories.

The column called unallocated amounts mainly includes:

as for assets, financial asset and investments in CO - Investments 2;
as for liabilities, deferred and current tax liabilities.

The Company's year results are also represented based on the geographic location of the real estate:

(in thousands Euro)	Milan	Rome	Others	Unallocated amounts	Sector results

Rents	20,331	200	1,699	-	22,230
Net income of non-controlling interests	1,629	-	-	30	1,659

Financial income	-	-	-	241	241
Total income	21,960	200	1,699	271	24,130
Net real estate operating expenses	(1,687)	(42)	(267)	-	(1,996)
Profit / (loss) from real estate disposals	-		(100)	-	(100)
G&A expenses	(3,913)	(54)	(324)	(12)	(4,303)
Other operating expenses	(253)	(4)	(23)	(5)	(285)
Net depreciation	(151)	-	(50)	(85)	(286)
Adjustment to fair value	(6,581)	(100)	(931)	-	(7,612)
Financial expenses	(3,732)	(78)	(449)	(12)	(4,271)
Income tax	-	-	-	-	-
Sector results	5,643	(78)	(445)	157	5,277

The geographic breakdown has also been chosen regarding the Company's investment strategy which is aimed primarily at the market of Milan.

A balance sheet showing the distribution of the assets and liabilities based on the geographic location of the real estate is listed below.

(in thousands Euro)	Milan	Rome	Others	Unallocated amounts	Sector results

Non-current assets	738,215	9,017	53,440	1,572	802,244
Current assets	41,570	1,910	15,840	1,813	61,133
Non-current assets held for sales	6,300	-	4,100	-	10,400
Total assets	786,085	10,927	73,380	3,385	873,777
Non-current liabilities	297,693	3,578	20,729	-	322,000
Current liabilities	35,538	1,033	6,570	60	43,201
Total liabilities	333,231	4,611	27,299	60	365,201

The same methodology described for the division of assets and liabilities by intended use is also used for the breakdown by geographic location.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

4. Rents

The revenues amounting to Euro 22,230 thousand as of June 30th, 2020 and include rents accrued on the real estate portfolio.

(in thousands Euro)	Investments	June 30st, 2020	June 30st, 2019

	Vodafone	-	6,863

COIMA RES SIIQ	Monte Rosa	1,813	1,881


	Tocqueville	1,426	1,202

	Pavilion	1,633	1,344

COIMA CORE FUND IV	Deutsche Bank branches	2,109	2,643

COIMA CORE FUND VI	Gioiaotto	2,079	1,923

COIMA RES SIINQ I	Deruta	1,816	1,807

COIMA CORE FUND VIII	Vodafone	7,047	153

COIMA OPPORTUNITY FUND I	Philips	2,017	-

FELTRINELLI PORTA VOLTA	Microsoft	2,290	-

Rents		22,230	17,816

The increase of Euro 4,414 thousand compared to June 30th, 2019 is mainly due to acquisition of Philips and Microsoft properties, indirectly acquired through the purchase of units of the funds COIMA OPPORTUNITY FUND I and Feltrinelli Porta Volta, which were closed during the second half of 2019.

The increase related to Tocqueville rent of Euro 224 thousands is due to a change of the Sisal lease agreement, the main tenant of the property, who extended the expiry of the lease to December 31st, 2021 in exchange for an increase in the gross rent due in 2021.

The revenues related to the Pavilion show an increase of Euro 289 thousand because of the rent contract with IBM has generated rents only starting from February 2019.

Related to the lease agreements of COIMA CORE FUND IV, the reduction of Euro 534 thousand is mainly linked to disposal of 8 Deutsche Bank branches closed in January 2020.

5. Net real estate operating expenses

The net real estate operating expenses amount to Euro 1,996 thousand as of June 30th, 2020. The detail of the amount is:

		Vodafone		Tocqueville			Deutsche					June 30th,	June 30th,

(in thousands Euro)			Monte Rosa		Bank		Gioiaotto	Deruta
	Complex*								2020		2019
			Pavilion			branches


Recovery of costs from tenants		1,196		660			27	901		9		2,793	2,353

Property management fee		(155)		(59)			(21)	(99)		(18)		(352)	(290)

Maintenance charges		(433)		(380)			(23)	(409)		(1)		(1,246)	(1,387)

Utilities		(607)		(202)			(3)	(236)		-		(1,048)	(895)

Insurance		(49)		(32)			(24)	(54)		(13)		(172)	(111)

Property taxes		(370)		(422)			(295)	(467)		(123)		(1,677)	(1,428)

Stamp duties		(95)		(46)			(25)	(59)		(18)		(243)	(162)

Other real estate costs		(1)		(47)			-	(3)		-		(51)	(73)

Net real estate expenses		(514)		(528)			(364)	(426)		(164)		(1,996)	(1,993)

Includes the Consorzio Lorenteggio Village

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The item recovery of costs from tenants refers to the reversal of ordinary property management charges to tenants.

Property management fees mainly relate to ordinary activities of the administration and maintenance of the buildings.

Maintenance and service charges concern the expenses incurred for the maintenance of the buildings (lifts, systems, office cleaning) and for the upkeep of the green spaces of the properties.

The item utilities refers to the cost of providing electricity, water and gas for the buildings.

The item insurance costs refers to the all-risk policies signed by the Company to protect the asset value and ownership of the buildings.

Other real estate costs mainly include the fees for the occupation of public areas and other expenses related to the operation of the buildings.

6. General and administration expenses

G&A costs amounting to Euro 4,303 thousand as at June 30th, 2020, are listed below:

(in thousands Euro)					CORE IV		CORE VI			Others		June 30th,		June 30th,
	COIMA RES			COF I		CORE VIII
			SIINQ I						2020		2019
						FPV


Asset management fee		(448)			(163)		(973)	(521)				(2,105)	(2,331)

Personnel costs		(940)			-		-	-		-		(940)	(910)

Consulting costs		(238)			(44)		(137)	(10)		(16)		(445)	(509)

Control functions		(158)			(16)		(8)	-		-		(182)	(178)

Audit		(81)			(22)		(57)	(9)		(6)		(175)	(156)

Marketing		(137)			-		-	-		-		(137)	(152)

IT service		(85)			-		-	-		-		(85)	(89)

Independent appraisers		(14)			(17)		(19)	(7)		-		(57)	(68)

Other operating expenses		(169)			-		(2)	(1)		(5)		(177)	(176)

G&A expenses		(2,270)			(262)		(1,196)	(548)		(27)		(4,303)		(4,569)

Asset management fees relate to the agreement signed by the Company and COIMA SGR for the sourcing of investment transactions and the management of the real estate portfolio, as well as for other activities provided under the terms of the asset management agreement. These fees are calculated quarterly, based on the Net Asset Value (NAV) recorded by the Company in the previous three months.

It should be noted that the decrease of Euro 266 thousand compared to June 30th, 2019 is related to the Asset Management agreement approved during the Board of Directors of March 19th, 2020, which included a reduction of managements fee of 30 basis points (from 1.10% to 0.80% of NAV) effective from January 1st, 2020.

Based on the NAV as of March 31st, 2020 the reduction of the fee is equivalent to a saving for COIMA RES of Euro 331 thousand for the second quarter of 2020. Considering the first half-year 2020, the total saving is of Euro 659 thousand.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Personnel costs include:

wages, salaries and similar expenses, amounting to Euro 390 thousand, related to wages for the Company's employees;
social security contributions, amounting to Euro 182 thousand, paid by the Company to social security funds.
other personnel costs, amounting to Euro 368 thousand, include mainly the Board of Directors' remuneration.

It should be noted that on March 16th, 2020 the Chief Executive Officer, in order to limit the corporate costs of the Company in light of the current market capitalization and to be aligned with the interests of COIMA RES shareholders, has confirmed to accept the suspension of the recalculation of the fixed emolument and the payment of variable compensation, starting from 2020 financial year until January 1st, 2025.

The suspension of the recalculation of the annual fixed emolument and the variable compensation can be interrupted by Manfredi Catella only and exclusively if, by December 31st, 2030:

the existing Asset Management Agreement is modified and / or terminated for any reason; and / or
Manfredi Catella does stop hold the office of Chief Executive Officer (even in the event of death); and / or
the majority of the directors of the Company are not designated by Manfredi Catella as envisaged by the Shareholders Agreement currently in force.

As of today, none of the conditions has failed and it is considered remote that even one of them may occur within the approval of the interim condensed consolidated financial statements as at June 30th, 2020.

The best current estimate of this potential liability as of June 30th, 2020, considering the above, is approximately Euro 3.6 million.

The waiver of the fees for the years 2017, 2018 and 2019 remains subject to the terms and conditions set out in the communication of Manfredi Catella of February 19th, 2019.

The CEO has reserved the right to stop the suspension of the restatement of the annual fixed emolument and the variable compensation if the market capitalization of COIMA RES should reach a level higher than that recorded in the IPO (equal to Euro 360 million), only from this trigger event onwards would the relative remuneration be determined, without therefore impacting the previous periods.

Regarding the risk of death, considering the existing agreement with the Chief Executive Officer and the reports described above, the Company made a provision of approximately Euro 381 thousand based on the mortality tables prepared by ISTAT, according to IAS 19 provisions.

The existing agreement with the Chief Executive Officer also provides that, in the event of Manfredi Catella's termination from the position held in the Company for one of the reasons provided for by the agreement in force and described in the Remuneration Report ("Good Leaver"), the Company is obliged to pay Manfredi Catella by way of compensation for the damage or, in any case, by way of compensation for the termination of the administration relationship, the greater amount between: (a) Euro 5 million and, (b) three times the total annual remuneration (fixed and variable amount). As of today, the Company considers the realisation of one of the Good Leaver scenarios envisaged in the existing agreement as remote.

The item consulting costs mainly includes expenses for support activities carried out by professionals for the ordinary management of the Company; in particular:

legal, tax and notarial consulting for corporate services;
technical consulting on real estate properties.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

Governance and other control functions costs are mainly related to the Board of Statutory Auditors, amounting to Euro 62 thousand, Risk Management, amounting to Euro 41 thousand and other control functions, amount to Euro 78 thousand.

The audit costs also include the fees related to the audit firm KPMG S.p.A. in charge of the legal audit of the real estate funds held by COIMA RES.

Marketing costs are mainly related to digital and media relations expenses (Euro 46 thousand), related to website maintenance (Euro 75 thousand) and other marketing costs related to corporate events and conferences for Euro 16 thousand.

IT service costs include technical assistance, administrative software and IT management expenses.

The expenses related to the independent appraisers are due in respect of the agreement in place with the independent expert CBRE Valuation, Duff & Phelps REAG and PWC for the preparation of the evaluation reports.

Other expenses include mainly brokerage fee related to the HQ and other corporate costs (travel costs, membership fees, Borsa Italiana's services).

7. Other operating expenses

The other operating expenses, amounting to Euro 285 thousand (Euro 113 thousand as at June 30th, 2019), include the the fair value change of the financial instrument allowed to the Board of Directors and to the key managers of the Company, corporate taxes and fees, non-recurring liabilities and other operating costs.

At June 30th, 2020 this item includes all the donations made by the Company to the Luigi Sacco hospital, to the Fondo di Mutuo Soccorso of Comune di Milano and to Fondazione Buzzi in order to fight the helth crisis COVID- 19, spread out in Italy at the end of February 2020. Please note that all the financial resources related to the donations, amounting to Euro 236 thousand, result in part from the waived of Manfredi Catella's right as member of the Board of Directors, amounting to Euro 90 thousand, and the waived of some others directors and key managers' compensations, amounting to Euro 45 thousand.

8. Net depreciation

Net depreciation, amounting to Euro 286 thousand (Euro 152 thousand as at June 30th, 2019), mainly refer exclusively to the trade receivables write-downs amounting to Euro 65 thousand, for the period relating to tangible and intangible fixed assets for an amount of Euro 124 thousand and to the decrease in value of the Deutsche Bank branches, classified in the item inventories for an amount of Euro 50 thousand. This adjustment was made on the valuations prepared by the independent experts as at June 30th, 2020.

9. Net movement in fair value

This item, negative for Euro 7,612 thousand (positive for Euro 6,210 thousand as at June 30th, 2019) refers to the revaluation recorded on the value of real estate investments, based on the evaluation reports prepared by independent experts.

For more details, please refer to note 13 - Real estate investments.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

10. Net income attributable to non-controlling interests

Net income attributable to non-controlling interests, amounting to Euro 1,659 thousand (Euro 1,499 thousand as at June 30th, 2019), includes the adjustment of the value of the equity investments in Porta Nuova Bonnet Fund and in Co - Investment 2SCS calculated using the equity method.

For more details, please refer to paragraph 15 - Investments accounted for using the equity method.

11. Financial income and expenses

The item financial incomes, amounting to Euro 241 thousand (zero balance at June 30th, 2019), includes the dividends distributed from ITALIAN COPPER FUND.

Financial charges amount to Euro 4,271 thousand (Euros 6,046 thousand at June 30th, 2019) mainly include interest expense accrued on outstanding loans and the non-recurring financial expenses related to the prepayment of the loans made during the period.

The decrease of Euro 1,775 thousand compared to the previous period is partly due to the non-recurring costs incurred during the first half-year 2019 for the closure of loans and hedges, made during the Vodafone building contribution transaction.

Nevertheless, this decrease is partially offset by the increase of the interests expenses related to the rent contracts of Philips and Microsoft real estates, indirectly acquired by the Company during the selling operations of COIMA OPPORTUNITY FUND I and Feltrinelli Porta Nuova allowances, ended during the fourth quarter 2019.

12. Earnings per share

Basic earnings per share are calculated by dividing the net profit for the year attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

There is no difference between diluted earnings per share and basic earnings (loss) per share.

The profit and the information about the shares used for the calculation of the basic earnings per share are illustrated below:

Earnings per share	June 30th, 2020	June 30th, 2019

Profit attributable to ordinary shareholders (in thousands Euro)	3,566	13,564

Weighted average number of ordinary shares outstanding	36,106,558	36,007,000

Earnings per share (Euro)	0.10	0.38

Earnings per share diluted (Euro)	0.10	0.38

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

13. Real estate investments

The changes in property investments at June 30th, 2020, are listed below:

(in thousands Euro)	Investments		December 31st,	Capex	Revaluations	June 30th,
		2019		(write-downs)	2020


	Monte Rosa	61,100	9	(509)	60,600

COIMA RES SIIQ	Tocqueville	59,600	48	(548)	59,100

	Pavilion	73,200	-	(500)	72,700

COIMA CORE FUND IV	DB branches	66,204	-	(1,091)	65,113

COIMA CORE FUND VI	Gioiaotto	83,700	-	(1,100)	82,600

COIMA RES SIINQ I	Deruta	47,100	-	(1,300)	45,800

COIMA CORE FUND VIII	Vodafone	213,000	-	(2,000)	211,000

COIMA OPPORTUNITY FUND I	Philips	62,790	186	(476)	62,500

FELTRINELLI PORTA VOLTA	Microsoft	98,230	808	(88)	98,950

Real estate investments			764,924	1.051	(7,612)	758,363

The total amounts reported as of June 30th, 2020 match those of the last appraisals produced by independent appraisers. The appraisals were performed in accordance with RICS Valuation - Professional Standards, in compliance with applicable law and with recommendations given by ESMA - European Security and Market Authority. With reference to the effects deriving from the Covid-19 pandemic, please refer to the paragraph Implications of the COVID-19on the interim condensed consolidated financial statements in the directors' report.

The columns "capex" shows interventions and improvements made on the real estates in portfolio during the first half-year 2020, including the construction of public spaces next to the Microsoft building for Euro 808 thousand and improvements on Philips for Euro 186 thousand.

The item "revaluations / (write-downs)" includes changes in the fair value of the property because of the valuations issued by the independent experts appointed by the Company and Funds.

The decrease is mainly due to the impact deriving from the reduction of the inflation rate forecasted and the reduced growth of market rents related to the COVID-19 emergency.

The table below shows the parameters used by the independent experts to make their valuations, according to the discount cash flow method.

Independent	Property	Discounted rate		Discounted rate		Gross cap out		Expected	Year plan

experts			retraining		rate		inflation rate


	Monte Rosa	5.40%		7.10%		5.20%		1.20%	9.3

CBRE	Tocqueville	5.50%		7.45%		3.65%		1.20%	7.3

Valuation	Pavilion	4.50%		7.30%		3.40%		1.20%	15.6


	Deruta	5.50%		7.70%		5.40%		1.38%	5

	DB branches (let)	m.5.9%		m.5.9%		m.4.6%		1.5%	10-12

	DB branches	m.6.4%		m.6.5%		m.5.2%		1.5%	10
	(vacant)

Duff & Phelps	Gioiaotto (office)	5.75%		5.75%		4.19%		1.5%	16
REAG

	Gioiaotto (hotel)	6.30%		6.80%		4.73%		1.5%	18

	Vodafone	6.10%		6.10%		4.63%		1.50%	11

	Philips	6.72%		6.72%		5.03%		1.65%	15
Praxi

	Microsoft	5.22%		5.22%		3.88%		1.65%	15

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The following table shows the market values of investment property as at December 31st, 2019 gross and net of transaction costs respectively:

Independent expert	Investments		Gross market value at	Net market value at

	June 30th, 2020	June 30th, 2020


	Monte Rosa		62,721	60,600

	Tocqueville		61,169	59,100
CBRE Valuation

	Pavilion		75,245	72,700

	Deruta		47,461	45,800

	Deutsche Bank branches		69,539	67,843

	Gioiaotto (office)		54,940	53,600
Duff & Phelps REAG 8

	Gioiaotto (tur./ric.)		29,725	29,000

	Vodafone		216,275	211,000

	Philips		64,380	62,500
Praxi

	Microsoft		101,920	98,950

The item non-currentassets held for sale amounting to Euro 10,400 thousand (Euro 23,500 thousand at December 31st, 2019) includes the remaining 3 bank branches to be sold, two located in Milan and one in Verona. As for the latter, the sale was completed on July 13rd, 2020, while the remaining two are expected in January 2021.

14. Other tangible assets and intangible fixed assets

Other tangible fixed assets, equal to Euro 1,482 thousand (Euro 1,582 thousand as at December 31st, 2019), mainly include the right to use space located by the Group for the whole duration of the agreement (i.e. right of use), forniture and fixtures related to the HQ.

(in thousands Euro)	December 31st, 2019		Increases /	June 30th, 2020
		(write-downs)


Furniture and fixtures	72		-	72

Installations	284		-	284

Other tangible assets	7		-	7

Rights of use	1,405		1	1,406

Original costs	1,768		1	1,769

Furniture and fixtures	(15)		(3)	(18)

Installations	(55)		(11)	(66)

Other tangible assets	(4)		(1)	(5)

Rights of use	(112)		(86)	(198)

Depreciation fund	(186)		(101)	(287)

Net book value	1,582		(100)	1,482

Today, the Group has mainly 3 lease agreements, net of the amortizations, whose right of use amounts to Euro 1,208 thousand (Euro 1,293 thousand at December 31st, 2019).

Intangible assets, equal to Euro 218 thousand (Euro 188 thousand as of December 31st, 2019), include administrative and accounting software in implementation. The increase of Euro 30 thousand compared to the previous year is mainly due to the development of the implementation activities carried out during the period.

8 In the evaluation reports prepared by Duff & Phelps, the gross market value is not reported but only the percentage range relating to the transaction costs to be taken into consideration. The value shown in the table was calculated by applying 2.5% of transaction costs.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

15. Investments accounted for using the equity method

The item, amounting to Euro 38,136 thousand (Euro 33,675 thousand as of December 31st, 2019), includes Porta Nuova Bonnet investment, for an amount of Euro 36,578 thousand, and Co - Investment 2 SCS investment, for an amount of Euro 1,558 thousand, owned indirectly through MHREC Sarl.

The increase of Euro 4,461 thousand compared to the previous year is due to the recalls made by Porta Nuova Bonnet Fund during this half-year, amounted to Euro 2,786 thousand, and the profit for the period amounting to Euro 1,659 thousand.

16. Financial assets at fair value

The financial assets at fair value, amounting to Euro 3,933 thousand (Euro 4,539 thousand at December 31st, 2019) refer to the participation of about 13% in ITALIAN COPPER FUND, acquired during the operation of COIMA OPPORTUNITY FUND I acquisition allowances, ended during the fourth quarter of 2019. The decrease of Euros 660 thousand compared with the previous year is due by the adjustment to NAV of the period, as the fai value of the instrument.

17. Derivatives

Derivative financial instruments, amounting to Euro 98 thousand (Euro 158 thousand at December 31, 2019) have decreased by Euro 60 thousand compared to the previous year due to the negative change in the fair value of the period and to the partial closure of the interest rate cap agreement concerning the loan repaid.

In June 30th, 2020 the Company, after the reimbursement of the loans for an amount of Euro 11,100 thousand, has partially closed the related contract of interest rate cap in order to align the notional of the derivatives to the nominal value.

The Company has accounted for hedging transactions based on hedge accounting, according to IFRS 9, verifying the efficiency of the hedging relationship.

18. Inventories

Inventories, amounting to Euro 2,730 thousand (Euro 2,780 thousand as of December 31st, 2019), includes the remaining vacant Deutsche Bank branches.

The change of Euro 50 thousand compared to the previous year is due to the reclassification of the value made accordingly with the independent expert evaluation.

For more details on the benchmarks used during the evaluation, please refer to paragraph 13 - Real estate investments.

19. Financial receivables

The current financial receivables, amounting to Euro 1,620 thousand, are related to loans granted by MHREC Sàrl to Co-Investment 2 SCS.

This amount was originally classified in the item non-current financial receivables and it was re-classified in the current assets because they will be cash within 12 months.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

20. Trade and other current receivables

The breakdown of trade receivables and other current receivables is given below:

(in thousands Euro)	June 30th, 2020	December 31st, 2019

Receivables from tenants	11,323	5,387

Receivables from buyers	-	800

Trade receivables	11,323	6,187

Tax receivables	649	1,753

Other receivables	571	320

Accrued income and prepaid expenses	1,731	1,698

Other current receivables	2,951	3,771

Trade and other current receivables	14,274	9,958

The item "receivables from tenants", amounting to Euro 5,387 thousand at December 31st, 2019 has undergone an increase of Euro 5,936 thousand related to an anticipated invoicing of rents related to the second half-year of 2020, amounting to Euro 3,501 thousand.

The remaining part of the amount mainly refers to the normalization of rents, recorded in accordance with the IFRS 16, for Euro 4,040 thousand, amounts to be invoiced for Euro 1,257 thousand and receivables to be cash-in for Euro 2,525 thousand.

In June 30th, 2020 trade receivables are showed net of eventually write-downs related to uncollectible cash in.

Tax receivables consist mainly of the Group's VAT receivables. The decrease of Euro 1,104 thousand compared to the previous year is largely due to the offsetting with other taxes and duties.

Other receivables include advances to suppliers and other receivables from third parties.

Accrued income and prepaid expenses mainly refer to prepaid expenses relating to grants in favour of tenants for improvements and enhancement works which will be amortised over the contractual duration (landlord contribution).

21. Cash and cash equivalents

The Group's cash and cash equivalents amount to Euro 42,509 thousand.

(in thousands Euro)	June 30th, 2020	December 31st, 2019

BNP Paribas	11,885	15,051

UBI Banca	10,020	-

DepoBank	8,765	11,175

ING Bank N.V.	2,533	3,752

Unicredit	2,452	7,252

Intesa San Paolo	2,283	3,308

Banca Passadore	2,248	1,515

Banca Popolare di Milano	2,156	453

Société Générale Group	166	186

Cash	1	1

Cash and cash equivalents	42,509	42,693

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

For more details on the operation, please refer to the cash flow statements.

22. Shareholders' equity

Shareholders' equity as at June 30th, 2020 amounts to Euro 436,676 thousand (Euro 440,110 thousand as of December 31st, 2019).

The share capital, amounting to Euro 14,482 thousand, is represented by 36,106,558 shares with a nominal value.

Reserves, which amounted to Euro 418,628 thousand, include:

share premium reserve of Euro 336,273 thousand;
legal reserve of Euro 2,896 thousand;
cash flow reserve for hedging derivatives of Euro 1,633 thousand (negative);
fair value reserve related to investment property of Euro 36,405 thousand;
other reserves of Euro 44,687 thousand.

Minorities amounts to Euro 71,900 thousand (Euro 71,175 thousand as of December 31st, 2019), of which Euro 1,711 thousand is related to the minority interest for the period.

23. Non-current bank borrowings

As of June 30th, 2020, the item "non-currentbank borrowings" amounts to Euro 316,476 thousand and includes the financial loans of the contracted by the Company and by the controlled entities. The changes in loans are shown below.

(in thousands Euro)		December 31st,	Amortised costs	Reimbursement	June 30th,
	2019			2020


COIMA RES SIIQ		99,132	288	(1,610)	97,810

COIMA CORE FUND VI		47,640	94	-	47,734

COIMA RES SIINQ I		19,859	34	-	19,893

COIMA CORE FUND VIII		125,841	186	-	126,027

COIMA OPPORTUNITY FUND I		25,016	(4)	-	25,012

FELTRINELLI PORTA VOLTA		22,745	(169)	(22,576)	-

Non-current bank borrowings		340,233	429	(24,186)	316,476

Current bank borrowings, amounting to Euro 29,399 thousand (Euro 16,140 thousand at December 31st, 2019) mainly include:

the amount of the Deutsche Bank loan which will be reimbursed, reasonably within 12 months, after the cash in deriving from the disposal of the three bank branches, already object of preliminary sale, for Euro 6,537 thousand;
the amount of the loan related to Feltrinelli with maturity date December 21st, 2020 for Euro 22,576 thousand, which is being renegotiated.

On June 30th, 2020, the Company repaid part of the outstanding loan for a total amount of Euro 11,100 thousand (of which Euro 6,337 thousand related to Tocqueville and Monte Rosa financing and Euro 4,763 thousand related to the Vodafone financing). This repayment was partially made using the liquidity collected from the transfer of the related Deutsche Bank branches.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The table below summarises the financial details of the loans:

(in thousands Euro)	June 30th, 2020	Maturity date	Rate	% hedged

Deutsche Bank branches	33,278	July 16th, 2023	Eur 3M + 180	100%
		bps


Monte Rosa, Tocqueville	44,351	July 16th, 2023	Eur 3M + 160	100%
		bps


Pavilion	26,718	October 31st, 2023	Eur 6M + 150	93%
		bps


Gioiaotto	47,734	March 31st, 2022	Eur 3M + 150	80%
		bps


Deruta	19,893	January 16th, 2022	Eur 3M + 160	80%
		bps


Vodafone	126,027	June 27th, 2024	Eur 3M + 180	80%
		bps


Philips	25,012	November 1st, 2022	Eur 3M + 175	80%
		bps


Microsoft	22,576	December 21st, 2020	Eur 6M + 205	100%
		bps

To hedge the loans outstanding, the entities entered derivative hedging contracts in the form of an Interest Rate Cap and an Interest Rate Swap. These transactions are used to hedge cash flows of existing loans, falling within the scope of the so-called hedge accounting.

For more details on derivative financial instruments, refer to paragraphs 17 and 26 - Derivative financial instruments.

It should be noted that the verification of the financial covenants is held every quarter and/or half-year, as provided for in the contract. The following are the indicators for each entity as at June 30th, 2020.

Properties		Covenant		Threshold		Test result as of
				June 30th, 2020


Monte Rosa		LTV Consolidated		<60%		42.82%
Tocqueville		ICR Portfolio		>1.8x		4.6x
		ICR/DSCR Consolidated		>1.4x		4.0x
Pavilion		LTV		<65%		36.8%
	ICR		>1.75x		4.5x

		LTV		<65%		60.6%
Vodafone		ICR-BL		>2.25x		5.1x

		ICR-FL		>2.25x		4.3x

Gioiaotto		LTV		<65%		58.2%

	ICR		>1.75x		3.5x

Philips		LTV		<55%		40.0%
	ICR		>2x		5.3x


Microsoft		LTV		<60%		22.7%
		LTV		<55%		43.4%

Deruta		ICR-BL		>3.0x		9.8x

		ICR-FL		>3.0x		10.2x

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

24. Non-current financial liabilities

In accordance with the international accounting standard IFRS 16 in force on January 1st, 2019, the Company has recognized a liability in respect of the payment of lease rents relating to existing lease agreements. This liability, amounting to Euro 1,221 thousand (Euro 1,301 thousand at December 31st, 2019), is the current value of the expected future cash flows for the duration of the agreements. For more details please refer to paragraph 14 - Other tangible assets and intangible assets.

25. Provision risks and charges

The amount of Euro 381 thousand (Euro 373 thousand at December 31st, 2019) refers to the payment to cover the risks relating to the contracts in place with the CEO.

In addition, Manfredi Catella has expressed his will to forego until January 1st, 2025 the emoluments related to his role as CEO in line with the conduct held since IPO. Such renunciation is based on certain conditions, which are currently satisfied. For further information, please read the personnel costs details described in paragraph 6 - G&A expenses.

26. Derivatives

Derivative financial instruments classified as liabilities, amounting to Euro 1,878 thousand (Euro 1,888 thousand as at December 31st, 2019), refer to interest rate swap contracts entered to hedge the cash flows relating to the financing of the Monte Rosa, Tocqueville and Pavilion properties.

The Interest Rate Swap contracts are stipulated to cover the Euribor reference rate and its variations by paying a fixed rate representing the total cost of funding for the entire duration of the swap contract.

The Group accounted for the hedging transactions based on hedge accounting, verifying the effectiveness of the hedging relationship and recognizing the ineffective amount in the income statement.

It should be noted that the increase of Euro 10 thousand compared to the previous year is exclusively due to the change in the fair value of derivatives as at June 30th, 2020.

The valuation of derivatives at fair value considered some potential adjustments to be made as a result of the deterioration of the bank counterparties or of the Group itself, also taking into consideration any guarantees given by the Group to the Banks.

27. Trade and other non-current liabilities

Other non-current liabilities, amounting to Euro 1,956 thousand, (Euro 1,833 thousand as of December 31st, 2019), include the fair value of the financial instruments granted to the CEO and key managers and cash deposits received from tenants.

As at June 30th, 2020 the financial instrument amounts to Euro 1,064 thousand. The valuation was carried out in application of the financial criterion. It estimates the value of an asset as the sum of expected cash flows, discounted at a rate that expresses the systematic risk of the investment.

Due to the analysis made by the management, the instrument has suffered an increase for an amount of Euro 66 thousand compared with the value at December 31st, 2019.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

28. Trade and other current payables

The breakdown of trade payables and other current payables, amounting to Euro 13,777 thousand, is given below:

(in thousands Euro)	June 30th, 2020	December 31th, 2019

Accounts payables	2,033	2,128

Deposits paid by buyers	1,628	3,502

Invoices to be received	2,265	2,970

Trade payables	5,926	8,600

Personnel payables	200	261

Security provider payables	96	148

Tax payables	94	70

Other payables	2,476	1,812

Accruals and deferred income	4,985	1,645

Other liabilities	7,851	3,936

Trade payables and other current liabilities	13,777	12,536

The decrease amount to Euro 2,674 thousand compared to the previous financial year is mainly due to the item Account promised payables, which includes deposit paid to COIMA CORE FUND IV for the sale of 11 branches of Deutsche Bank, partially ended in January 2020.

The other payables increased of Euro 3,915 thousand compared to the previous financial year, mainly due to more deferred income for an amount of Euro 3,340 thousand connected to the anticipated invoicing of rents related to the second half-year of 2020.

29. Information on transfers of financial asset portfolio

The Company has not made any transfer between financial asset portfolios in the year.

30. Information on fair value

IFRS 13 provides that:

non-financialassets must be measured using the Highest and best use method i.e. considering the best use of the assets from the perspective of market participants;
liabilities (financial and non-financial) and equity instruments (i.e. shares issued as consideration in a business combination) must be transferred to a market participant as at the measurement date. In the process of measuring the fair value of a liability it is necessary to identify the risk of default of the counterparty, which also includes credit risk.

The general rules for preparing fair value measurement techniques should be adjusted based on the circumstances, configured to maximize observable inputs and established pursuant to the measurement method used (multiples method, income method and cost method):

adjusted based on the circumstances: measurement techniques must be applied consistently over time unless there are more representative alternative techniques for the measurement of fair value,
maximise the observable inputs: inputs are divided into observable and unobservable, providing various examples of markets from which fair values can be calculated,
measurement techniques of fair value are classified in three hierarchical levels according to the type of input used:

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020
- level 1: inputs are quoted prices in active markets for identical assets or liabilities. In this case, the prices are used without any adjustments.
- level 2: inputs are quoted prices or other information (interest rates, observable yield curves, credit spreads) for similar assets and liabilities in active and inactive markets. For this case price adjustments can be made based on specific factors of the assets and liabilities.
- level 3: in this case inputs are not observable. The standard provides that it is possible to use the latter technique only in this case. Inputs for this level include, for example, long-term currency swaps, interest rate swaps, decommissioning liabilities undertaken in a business combination, etc.

The arrangement of these levels follows a priority hierarchy: attributing the maximum importance to level 1 and minimum for level 3.

IFRS 13 provides that three different measurement methods can be used for the measurement of fair value:

the market approach method is based on prices and other important information for market transactions involving identical or comparable assets and liabilities. The models used are the multiples method and the matrix price method;
the income approach is achieved from the discounted sum of future amounts that will be generated by the asset. This method allows to obtain a fair value that reflects the current market expectation of such future amounts;
the cost method reflects the amount that would be required as at the measurement date to substitute the capability of the service of the asset subject to measurement, Fair value will be equal to the cost that a market participant would incur to acquire or build an asset of rectified comparable use (taking into consideration the level of obsolescence of the asset in question), This method can be used only when the other methods cannot be used.

Measurement techniques are applied consistently over time unless there are alternative techniques that allow a more representative measurement of fair value, In the selection of measurement techniques, the assumptions used for the determination of the assets or liabilities are particularly important.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The comparison between the book value and the fair value of the Company's assets and liabilities as at June 30th,

2020 is given below:

(in thousands Euro)	June 30th, 2020	December 31st, 2019


	Net book value	Fair Value	Net book value	Fair Value

Real estate investments	758,363	758,363	764,924	764,924

Other tangible assets	1,482	1,482	1,582	1,582

Intangible assets	218	218	188	188

Investments accounted for using the equity method	38,136	38,136	33,675	33,675

Financial asset at fair value	3,933	3,933	4,593	4,593

Non-current deferred tax assets	14	14	10	10

Derivatives	98	98	158	158

Long term financial assets	-	-	1,620	1,620

Inventories	2,730	2,730	2,780	2,780

Current financial receivables	1,620	1,620	-	-

Trade and other current receivables	14,274	14,274	9,958	9,958

Cash and cash equivalents	42,509	42,509	42,693	42,693

Non-current assets held for sale	10,400	10,400	23,500	23,500

Assets	873,777	873,777	885,681	885,681

Non-current bank borrowings	316,476	320,118	340,233	342,371

Other liabilities	16,384	16,384	15,137	15,137

Derivatives	1,878	1,878	1,888	1,888

Financial instruments	1,064	1,064	998	998

Bank borrowings and other current lenders	29,399	29,399	16,140	16,355

Liabilities	365,201	368,843	374,396	376,749

The Company does not own capital instruments valued at cost.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The summary table below shows the hierarchy in the measurement of the fair value as at June 30th, 2020 and December 31st, 2019.

					June 30th, 2020

(in thousands Euro)				Quoted prices in			Observable inputs			Unobservable inputs
			Total amount		active markets
						(Level 2)			(Level 3)
					(Level 1)

Real estate investments	758,363		-		-			758,363
Other tangible assets	1,482		-		-			1,482
Intangible assets	218		-		-			218
Investments accounted for using the equity method	38,136		-		-			38,136
Financial assets at fair value	3,933		-		-			3,933
Non-current deferred tax assets	14		-		-			14
Derivatives	98		-		98			-
Inventories	2,730		-		-			2,730
Current financial receivables	1,620		-		-			1,620
Trade and other current receivables	14,274		-		-			14,274
Cash and cash equivalents	42,509		-		-			42,509
Non-current assets held for sale	10,400		-		-			10,400
Assets		873,777		-			98			873,679
Non-current bank borrowings	320,118		-		320,118			-
Other liabilities	16,384		-		-			16,384
Derivatives	1,878		-		1,878			-
Financial instruments	1,064		-		-			1,064
Bank borrowings and other current lenders	29,399		-		29,113			286
Liabilities		368,843		-			351,109			17,734

					December 31st, 2019

(in thousands Euro)				Quoted prices in			Observable inputs			Unobservable inputs
			Total amount		active markets
						(Level 2)			(Level 3)
					(Level 1)

Real estate investments	764,924		-		-			764,924
Other tangible assets	1,582		-		-			1,582
Intangible assets	188		-		-			188
Investments accounted for using the equity method	33,675		-		-			33,675
Financial assets at fair value	4,593		-		-			4,593
Non-current deferred tax assets	10		-		-			10
Derivatives	158		-		158			-
Long term financial assets	1,620		-		-			1,620
Inventories	2,780		-		-			2,780
Trade and other current receivables	9,958		-		-			9,958
Cash and cash equivalents	42,693		-		-			42,693
Non-current assets held for sale	23,500		-		-			23,500
Assets		885,681		-			158			885,523
Non-current bank borrowings	342,371		-		342,371			-
Other liabilities	15,137		-		-			15,137
Derivatives	1,888		-		1,888			-
Financial instruments	998		-		-			998
Bank borrowings and other current lenders	16,355		-		16,242			113
Liabilities		376,749		-			360,501			16,248
											57

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

31. Risks, guarantees and commitments

Risks

The table below summarizes the main risks and the mitigating measures of the Company:

Risks

COIMA RES mitigation

The Company's investment strategy is focused on high-quality assets (real

estate or fund units) in large urban areas, specifically in Milan, which have

demonstrated high income capacities and good resilience during negative

market cycles, partly due to a less volatile level of demand compared with

Market risk - the risk of losses related to the fluctuation in

smaller assets located in secondary cities.

the prices of properties in the portfolio or in rental values

resulting from adverse changes of macroeconomic variables,

Regarding vacancy risk, the Company deals with long-term rental

the local and international political context, the property

agreements with adequate

protection

clauses.

Tenant-specific asset

market, the specific characteristics of the properties owned

management initiatives are designed in order to understand the situation and

by the Company and/or structural changes in tenant habits.

needs of each tenant, and

to identify

and address potential problems

proactively.

This risk also includes the effects resulting from properties in

the portfolio that are vacant (vacancy risk) and potential

Considering the health emergency resulting from the spread of the Covid-19,

losses associated with investment in "value-added" projects,

the Company carefully assesses and monitors the impacts on property values

in particular relating to restructuring or refurbishment works

by conducting targeted stress tests, with particular reference to the most

of certain real estate projects.

exposed tourist-accommodation and retail assets, which however, they

constitute a very limited portion of the Company's portfolio. Based on the

results of the analyses, the Company adjusts, where appropriate, the

management and enhancement strategies of the properties to contain the

impacts and mitigate the risk.

During the on-boarding phase, the Company analyses and continuously

monitors the risks of non-compliance of tenants and other significant

counterparties (e.g. solvency and creditworthiness analyses, analysis of the

financial situation, references, prejudicial and negative information, etc.),

Credit and counterparty risk - the risk of losses resulting

also resorting to external databases.

from the non-compliance of counterparties due to the

deterioration of their creditworthiness, with them defaulting

In this regard, the Company's investment strategy favours reputable and

in extreme cases with reference to:

well-capitalized counterparties and those

belonging

to large international

- tenants;

groups.

- counterparties in real estate development operations

(manufacturer, operator);

Considering the aforementioned high profile of tenants and the limited

- counterparties in real estate transactions.

volume of fees from tourist-accommodation and retail assets most exposed to

the impacts of the Covid-19 emergency (6% of the total), the credit risk is

contained and in any case subject to careful analysis and monitoring. This is

in order to prepare, where necessary, timely actions to protect and mitigate

the risk of default, taking into account existing contractual safeguards.

The Company analyses and monitors this risk regularly and has also defined

Concentration risk - the risk resulting from properties

the limits in its Articles of Association with regard to concentration of

leased to individual counterparties or groups of legally

individual properties/tenants.

connected counterparties, counterparties from the same

economic sector or which carry out the same activity or are

The Company's strategy involves increasing the number of tenants and the

located in the same geographical area.

number of industrial sectors in which our tenants are active, in order to

mitigate the risks associated with excessive concentration.

Interest rate risk - the risk related to adverse changes in the

rate curve that change the current value of assets, liabilities

The Company purchases hedging instruments or otherwise contractually

and their net value (ALM), and cash flows (assets and

fixes an adequate amount of its floating rate exposure in order to reduce the

liabilities) based on changes in interest expense (assets and

impact of adverse changes in interest rates.

liabilities).

The Company continuously monitors the level of its liquidity based on

detailed cash-flow analyses and projections as well as through cash flow and

ALM risk management activities, utilizing among other tools scenario

Liquidity risk - the risk of not being able to meet one's

analyses and stress tests.

payment obligations due to:

From the perspective of optimising the financial and capital structure, the

- the inability to obtain funds in the market and generate

Company's objective is to achieve a stabilized leverage of less than 40%

adequate operating cash flows (funding liquidity risk);

(LTV) in the medium term.

- the inability to monetise one's assets (market liquidity risk).

As part of the impact analyzes of the Covid-19 emergency, the Company

conducts stress tests to assess the full compliance with the financial

covenants, and the ability to meet current financial commitments and those

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

deriving from the expected capex plans. On the basis of the results of the

sensitivity analyzes, the Company prepares, where appropriate, interventions

to optimize and strengthen the financial structure.

The strategy currently adopted by the Company involves a limited

Other financial risks - other financial risks not associated

investment in assets other than real estate assets except for treasury bills and

instruments needed to hedge interest rate risk; this also takes into account

with real estate assets such

as, for example,

counterparty

statutory restrictions related to the SIIQ status to which we are subject.

risks and/or other market risks on any financial instruments

Exposure to any financial risks, not connected with real estate assets, is

in the portfolio.

subject to periodic monitoring and is also mitigated through our use of

reputable and well-capitalized banking counterparties.

Operating risks are addressed by adopting adequate internal procedures and

the structuring of the internal control system on three levels:

Level One: Scheduled checks carried out by the business units and

staff functions;

Level Two: Checks carried out by the Legal, Compliance and Risk

Management functions;

Level Three: Checks carried out by the internal audit function based on

Operating risk - the risk of suffering losses resulting from

the Audit Plan.

the inadequacy or

malfunction of procedures

and

internal

In order to contain the operational impacts of the Covid-19 emergency, the

systems

or external events. This

risk includes

the

risk

Company has prepared timely interventions to ensure the safety of personnel

outsourcing,

i.e.

the

operating

losses

arising

from

the

and work environments, and to prepare the carrying out of activities in smart

performance of the outsourced activities.

working mode. These interventions are aimed at limiting the risks of

contagion without compromising the efficiency and effectiveness of the

activities since the entry into force of the first restrictive containment

measures (Prime Ministerial Decree of March 8th, 2020). Furthermore,

protocols for the prevention of contagion risk have been introduced in the

buildings managed by the Company and in the work sites, and interventions

to implement the requests of the tenants and adapt, where appropriate and

permitted, the property insurance policies.

Legal and compliance

risk -

the risk of

changes

The

Company continuously monitors the risk of non-compliance with

current legislation and compliance requirements. Our compliance checks

performance due to changes in the legislative framework or

include asset and profit tests to ensure that legal requirements, necessary to

violations of

the

regulations to

which

the Company

maintain the SIIQ status are met now and, in the future, as indicated in the

subject.

Articles of Association.

Reputational risk, like operating risk, is mitigated by adopting an adequate

organizational and control structure, consistent with international best-

practices. We also mitigate reputational risk by putting in place stringent and

Reputational risk - the

current

or future risk

a fall

specific procedures such as supervising external communication, overseeing

interaction with stakeholders (e.g. governmental authorities) and monitoring

profits or capital, resulting from a negative perception of the

contact with investors (e.g. complaint management).

Company's

image

customers,

counterparties,

The Company pays particular attention to full and continuous compliance

shareholders, investors, internal resources or the Regulatory

with the ESG Standards and considers sustainability as an integral part of its

Authorities.

business by aiming to create a high quality real estate asset, with sustainable

These

risks

also

refer

potential

value

losses

for

long-term growth, preferring properties with potential for appreciation in the

shareholders

deriving

from inadequate

management and

time. In this context, during 2017, the Company contributed to the creation

control of environmental, social and governance standards

of a "Think Tank" in collaboration with 5 of the most important listed real

(so-called "ESG factors") connected to the activities carried

estate companies operating in Europe, whose activities are concentrated on

out by the Company.

the discussion of issues related to sustainability and innovation. The

environmental performance of the asset portfolio, and the social and

governance performance of the Company are subject to stable monitoring

and adequate disclosure to stakeholders.

Strategic risk - Pure risk and business risk; this consists of

the current or prospective risk of a fall in profits or capital,

In addition to a comprehensive strategic planning and evaluation process for

resulting from changes in the operating environment or from

analysis of investments, strategic risk is mitigated by the high level of

incorrect corporate decisions, inadequate implementation of

experience and professionalism of Company management, with regard to the

decisions, poor reaction

changes in the

competitive

real estate market, operational/financial management, and internal controls.

environment, customer behaviour or technological

developments.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

The Company adopts an advanced Risk Management Model that combines quantitative analysis of interest rates, credit, and markets and qualitative analysis for other risks (operational, reputational and strategic risks), and considers the use of scenario analysis and stress testing in order to assess the degree of exposure to the main risks under adverse conditions, and to determine the IRR @ Risk.

Guarantees and commitments

Regarding bank loans taken on by COIMA RES, the Company has agreed with the lending banks on the following security package.

As for the loan related to Deutsche Bank portfolio:

first mortgage of Euro 298,550 thousand.
pledge on the CCFIV units.
pledge on operating bank accounts linked to the loan agreement, excluding the account to which any

amounts distributed as dividends will be paid. As for the loan related to Monte Rosa and Tocqueville:

first mortgage of Euro 140,000 thousand.
pledge on the CCFIV units.
pledge on operating bank accounts linked to the loan agreement, excluding the account to which any amounts distributed as dividends will be paid.
disposal of receivables related to rents, insurance claims and any other receivables arising from disputes against consultants engaged for the due diligence on the property.

As for the loan related to Pavilion:

first mortgage of Euro 63,000 thousand.
pledge on operating bank accounts linked to the loan agreement, excluding the account to which any amounts distributed as dividends will be paid.
disposal of receivables related to rents, insurance claims and any other receivables arising from disputes against consultants engaged for the due diligence on the property.

Regarding the loan of our 100% owned subsidiary COIMA RES SIINQ I, the Company has agreed with the lending banks on the following security package:

first mortgage of Euro 40,000 thousand;
pledge on the subsidiary shares;
pledge on operating bank accounts linked to the loan agreement, excluding the ordinary account;
disposal of receivables related to Deruta rents, insurance claims and any other receivables arising from disputes against consultants engaged for the due diligence on the property.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

COIMA CORE FUND VI, has granted the following guarantees to banks in relation to the loan it has taken on:

pledge on bank accounts held at State Street Bank;
disposal of receivables, in favour of the bank, related to rents, insurance contracts and warranties issued to the fund, to guarantee the proper fulfilment of obligations of tenants.

Mortgage debt encumbering on Gioiaotto, after the selling of Eurcenter and the partial reimbursement made, is the following:

Date	Amount	Grade	Bank


June 24th, 2016	156,000,000	I	UBI Bank / Credit Agricole / ING

Furthermore, the Fund will contribute Euro 1,400 thousand for the modernisation and redevelopment works on Gioiaotto carried out by NH Hotel, of which Euro 1,260 thousand already paid.

For the loan relating to the Vodafone building held through COIMA CORE FUND VIII:

first degree mortgage for Euro 255,600 thousand;
ledge on operating current accounts linked to the loan agreement;
assignment of receivables deriving from the Vodafone lease agreement, insurance claims and any receivables deriving from disputes with consultants employed for due diligence on Vodafone.

As for COF I, the entity has agreed the following guarantees to the bank:

first mortgage of Euro 50,000 thousand.
pledge on operating bank accounts linked to the loan agreement.
disposal of receivables related to rents, insurance claims and guarantees issued in favour of the fund.

Finally, regarding the financing of Feltrinelli Porta Volta, the guarantees granted are as follows:

first mortgage for Euro 80,800 thousand.
pledge on operating current accounts linked to the loan agreement.
assignment of receivables arising from insurance and guarantees issued in favour of the fund

As for the lease agreement signed on July 21st, 2017 with COIMA RES and Porta Nuova Garibaldi, managed by COIMA SGR S.p.A., the Company has granted a guarantee to the landlord amounting to ca. Euro 25 thousand.

Regarding the VAT reimbursement, COIMA RES has granted a guarantee to the Italian Inland Revenue Agency amounting to Euro 41,187 thousand, with maturity date on August 7th, 2020.

The Company has a commitment of Euro 25,000 thousand to the Porta Nuova Bonnet Fund. Please note that as of June 30th, 2020 Porta Nuova Bonnet Fund drew Euro 22,304 thousand and therefore has a residual claim of Euro 2,696 thousand on the Company.

In June 11th, 2020, COIMA RES has signed a binding agreement for the acquisition of a stake in the real estate fund "Porta Nuova Gioia", manged by COIMA SGR, which owns the property currently being developed called Gioia 22 situated in Via Melchiorre Gioia 22 in Milan. In particular, on the back of the designation of COIMA SGR,

COIMA RES will enter into a preliminary co-investment contract with UBI Banca S.p.A. ("UBI") related to the purchase from the latter of a stake between 10% and 25% of the units of the Fund (the "Co-investment Contract").

The closing of the transaction related to the purchase of the units of the Fund is subject to the verification of certain transaction conditions, amongst which the acceptance of delivery of the Property by UBI and the payment

by UBI of the first lease instalment in line with the abovementioned contract, all taking place	on the	back of the
completion of	the	building works and of the fit-out of the Property, the completion of	which	is expected
by the end	of	2021. The purchase price of the units of the Fund being purchased as indicated in the Co-

investment Contract will be calculated on the basis of the value of the Fund resulting from the last report available

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

at the date of the transfer of the units being purchased. Today the estimate purchase price is between Euro 22 million and Euro 56 million.

32. Related parties

Related party transactions are listed below:

(in thousands Euro)	Receivables		Liabilities		Costs

COIMA SGR S.p.A.		232		954	2,115

COIMA S.r.l.		-		136	314

Porta Nuova Garibaldi Fund		731		807	61

Consorzio Porta Nuova Garibaldi		-		25	60

Co - Investment 2 SCS		1,620		-	-

Infrastrutture Garibaldi - Repubblica		-		1	2

Senior managers		-		45	133

Directors and key managers		45		1,473	440

Board of Statutory Auditors		-		76	62

Total amount		2,628		3,517	3,187

Also note that the Company has signed the following service agreements with related parties in line with market standards:

Asset Management Agreement with COIMA SGR S.p.A.;
agreement with COIMA S.r.l. for the supply, by the latter, of development and project management services, as well as property and facility management services;
lease agreement related to the new headquarter of the Company signed on July 21st, 2017, with Porta Nuova Garibaldi Fund, managed by COIMA SGR S.p.A..

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

CERTIFICATION BY THE CEO AND BY THE MANAGING DIRECTOR RESPONSIBLE

FOR THE PREPARATION OF THE CORPORATE ACCOUNTING DOCUMENTS

RELATING TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS AS OF JUNE 30th, 2020

pursuant to art. 154-bis, paragraph 5, of the Legislative Decree No. 58 of February 24th, 1998

and art. 81-ter of the CONSOB Regulation No. 11971 of May 14th, 1999

We, the undersigned, Manfredi Catella, as Chief Executive Officer, and Fulvio Di Gilio, as Manager responsible for preparing the interim condensed consolidated financial report of COIMA RES S.p.A. SIIQ, having also taken into account the provisions of art. 154-bis, paragraphs 3 and 4, of the Legislative Decree No.
58 of February 24th, 1998, hereby certify:
- the adequacy, with regard to the nature of the Company; and
- the effective application of the administrative and accounting procedures adopted in preparing the interim condensed consolidated financial statements.
In this regard, we also note that:
- the adequacy of the administrative and accounting procedures adopted in preparing the interim condensed consolidated financial statements has been verified by means of the evaluation of the internal control system on the financial information.
- no material aspects have been detected from the evaluation of the internal control system on the financial information.
We also certify that:
The interim condensed consolidated financial statements:
- have been prepared in accordance with the international financial reporting standards recognized in the European Union under the EC Regulation 1606/2002 of the European Parliament and of the Council of July 19th, 2002;
- are consistent with the entries in the accounting books and records;
- are capable of providing a true and fair representation of the assets and liabilities, profits and losses and financial position of the issuer and the group of companies included in the consolidation.

The interim condensed consolidated report on operations provides a reliable analysis of performance and results of operations, and the Company's situation, as well as a description of the main risks and uncertainties to which the Company is exposed.

The interim condensed consolidated report on operations also includes a reliable analysis on the information regarding the relevant transactions with related parties.

Milan, July 30th, 2020

Chief Executive Officer	Manager responsible for preparing the Company's
	financial reports
_______________________	_____________________________
Manfredi Catella	Fulvio Di Gilio

This certification has been translated from the original which was issued in accordance with Italian legislation

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30th, 2020

GLOSSARY

			Definition


Accounting Period		Accounting period means each successive period of 12 calendar months each of which starts on
	1 January and ends at midnight on December 31st in each year.

			Asset Liabilities Management is the practice of managing risks stemming from mismatches
ALM		between assets and liabilities. The process is a mix between risk management and strategic
			planning.

Asset Management Agreement		The agreement entered into on October 15th, 2015, by and between COIMA RES and COIMA
	SGR and modified on November 15th, 2015.

Bonnet or Corso Como Place		Bonnet is the property located in Milan, in via Bonnet, held through the Porta Nuova Bonnet
	investment (35.7%).


Break Option		The right of the tenant to withdraw from the lease agreement.

CBD		Central Business District, which is the area where the prime office market is mainly located.

CBRE		CBRE Valuation S.p.A., with registered office in Milan, Via del Lauro, 5/6.

CO - Investment 2SCS		A subsidiary owned indirectly via MHREC Real Estate S.à.r.l., which owns 33.33% of the
	units.


COIMA CORE FUND IV		Fund in which the Company owns 100% of the shares.

COIMA CORE FUND VI (ex "MHREC")		Fund of which the Company owns about 88.2% of the shares.

COIMA CORE FUND VIII		COIMA CORE FUND VIII, set up in May 29th, 2019, of which the company owns 50% of the
	capital stock.


COIMA OPPORTUNITY FUND I or COF I		Fund of which COIMA CORE FUND VI acquired 88.8% of the shares on September 30th,
2019.


COIMA RES SIINQ I		COIMA RES S.p.A. SIINQ I, of which COIMA RES owns 100% of the capital stock.

COIMA S.r.l.		COIMA S.r.l., with registered office in Milan, Piazza Gae Aulenti no.12.

COIMA SGR		COIMA SGR S.p.A., with registered office in Milan, Piazza Gae Aulenti no.12.

Company or COIMA RES		COIMA RES S.p.A. SIIQ, with registered office in Milan, Piazza Gae Aulenti no.12.

Consortium Lorenteggio Village		Consortium Lorenteggio Village, established on January 25th, 2018, of which COIMA RES
	owns 69.21% of the shares.


Consortium Porta Nuova Garibaldi		Consortium Porta Nuova Garibaldi, of which COIMA RES owns about 4%.

			The core assets are characterized mainly by high liquidity and low risk. This type of property is
Core		located in strategic areas and is intended to be held in the portfolio on a long-term basis so as to
			fortify the company's risk-return profile.
			The core plus assets are similar to the core category, except that some investments may exhibit
Core plus		enhancement potential (such as partially vacant areas or tenancies with short term expiries). For
			this type of risk, the profile is considered medium-low.

Coupon		The value accrued on the Financial Instrument.

Deruta 19 or Deruta		Deruta is the property complex located in Milan, Via Deruta 19, acquired on January 16th, 2017,
	by COIMA RES SIINQ I.


Deutsche Bank Portfolio		The bank branches of COIMA CORE FUND IV, leased to Deutsche Bank

			Earnings before Interest, Taxes, Depreciation & Amortisation, is the most widely used measure
EBITDA		of a company's operating performance as it isolates operating earnings, excluding the effects of
	capital structure, taxes or depreciation regime. EBITDA is a proxy for the operating cash flow

			that the company is able to generate.

EPRA Cost Ratio		Calculated as administrative & operating costs (including & excluding costs of direct vacancy)
	divided by gross rental income.


			Recurring earnings from core operational activities. EPRA Earnings is a key measure of a
EPRA Earnings		company's operational performance and represents the net income generated from the
			operational activities.

			The objective of this measure is to highlight the value of net assets on a long-term basis. Assets
			and liabilities that are not expected to crystallise in normal circumstances such as the fair value
EPRA Net Reinstatement Value		movements on financial derivatives and deferred taxes on property valuation surpluses are
			therefore excluded. Since the aim of the metric is to also reflect what would be needed to
			recreate the company through the investment markets based on its current capital and financing

				64

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		structure, related costs such as real estate transfer taxes should be included.

EPRA Net Tangible Asset	Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable
deferred tax.


		Represents the shareholders' value under a disposal scenario, where deferred tax, financial
EPRA Net Disposal Value	instruments and certain other adjustments are calculated to the full extent of their liability,
		including tax exposure not reflected in the balance sheet, net of any resulting tax.

EPRA Net Initial Yield	Calculated as Net Initial Rent divided by the gross market value of the property.

EPRA topped up Net Initial Yield	Calculated as Net Stabilised Rent divided by the gross market value of the property.

EPS	Earnings Per Share calculated as net income divided by the basic number of shares outstanding.

Expected Gross Stabilised Rent	Gross Stabilised Rent adjusted for selected active asset management initiatives.

Feltrinelli Porta Volta	Fund in which the Company indirectly owns about 83.5% of the shares.

FFO	Funds From Operations calculated as Core Business EBITDA less net interest expense.

Gioiaotto	Gioiaotto is the property located in Milan, in Melchiorre Gioia 6-8, held through the MHREC
Fund.


Good Secondary location	High quality properties located in central or peripheral areas of primary cities.

Gross Expected Stabilised Yield	Calculated as Expected Gross Stabilised Rent divided by the gross market value of the property.

Gross Initial Rent	Annualised rents being received as at a certain date considering lease incentives such as rent-
free periods, discounted rent periods and step rents.


Gross Initial Yield	Calculated as Gross Initial Rent divided by the gross market value of the property.

Gross Stabilised Rent	Annualised rents being received as at a certain date adjusted for unexpired lease incentives. The
adjustment includes the annualised cash rent that will apply at the expiry of the lease incentive.


Gross Stabilised Yield	Calculated as Gross Stabilised Rent divided by the gross market value of the property.

Infrastrutture Garibaldi - Repubblica	Infrastrutture Garibaldi - Repubblica, of which the Company owns about 2%.

Interest Coverage Ratios	Ratio between the NOI and interest expense.

Italian Copper Fund	Fund in which COF I owns about 17% of the shares.

Key managers	Manfredi Catella, Matteo Ravà and Gabriele Bonfiglioli

LEED Certification	Certification of building efficiency issued by the U.S. Green Building Council.

MHREC S.à.r.l.	MHREC Real Estate S.à.r.l., subsidiary of COIMA CORE FUND VI (ex "MHREC").

Microsoft	Microsoft is the building located in Milan, Viale Pasubio 21 owned by Feltrinelli Porta Volta.

Monte Rosa	Monte Rosa is the property complex located in Milan, Via Monte Rosa 93, acquired on October
24th, 2017 by COIMA RES.

		Corresponds to Expected Gross Stabilised Rent for the period less, service charge expenses and
Net Expected Stabilised Rent	other non-recoverable property operating expenses such as insurance, real estate taxes,
		marketing and other vacant property costs.

Net Expected Stabilised Yield	Calculated as Expected Net Stabilised Rent divided by the gross market value of the property.

		Corresponds to gross initial rent for the period less service charge expenses and other non-
Net Initial Rent	recoverable property operating expenses such as insurance, real estate taxes, marketing and
		other vacant property costs.

Net Liquidity	Net Liquidity or Net Financial Position is the effective Net Debt of the Company.

		Corresponds to Gross Stabilised Rent for the period less service charge expenses and other non-
Net Stabilised Rent	recoverable property operating expenses such as insurance, real estate taxes, marketing and
		other vacant property costs.

Pavilion	Pavilion is the property complex located in Milan, Piazza Gae Aulenti 10, acquired on
November 23rd, 2018 by COIMA RES.

Porta Nuova Bonnet	Fund established on October 20th, 2016, of which COIMA RES owns 35.7%.

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Promote Fee	Performance fee payable by COIMA RES to SGR, related to the Asset Management
Agreement.


Qatar Holding	Qatar Holding LLC, a company with principal offices in Doha, Qatar, Q-Tel Tower, PO Box
23224, wholly owned by Qatar Investment Authority, sovereign fund of the State of Qatar.


Recurring FFO	Calculated as FFO adjusted to exclude non-recurring income and expenses.

Sarca (o Philips)	Sarca is the building located in Milan, Viale Sarca 235 owned by COF I.

	Shareholder Return means, in respect of each Accounting Period, the sum of (a) the change in
Shareholder Return	the EPRA NAV of the Company during such year less the net proceeds of any issues of
ordinary shares during such year; and (b) the total dividends (or any other form of remuneration

	or distribution to the shareholders) that are paid in such year.

	Shareholder Return Outperformance means, in respect of each Accounting Period, the amount
Shareholder Return Outperformance	in Euro by which the Shareholder Return for the year exceeds the Shareholder Return that
	would have produced a determined Shareholder Return.

SIINQ	Unlisted real estate investment company regulated by article 1, paragraph 125 of the Finance
Act 2007.


SIIQ	Listed real estate investment company regulated by article 1, paragraphs 119-141-bis of the
Finance Act 2007.


Tocqueville	Tocqueville is the property located in Milan, Via A. Tocqueville, acquired on July 27th, 2018,
by COIMA RES.


Weighted Average Debt Maturity	It is the length of time the principal of a debt issue is expected to be outstanding. The average
life is an average period before a debt is repaid through amortisation or sinking fund payments.


	This type of assets includes properties undergoing redevelopment and refurbishment, usually
Value-add	vacant or with high rate of vacancy. Compared to the core category, value added real estate has
a medium-high risk profile and is expected to generate returns through real estate value

	appreciation over time.

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COIMA RES S.p.A. SIIQ published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 16:06:09 UTC

COIMA RES S.p.A. SIIQ(BIT:CRES) dropped from S&P Global BMI Index	02/08/22	CI
Evergreen S.p.A. completed the acquisition of a 97.8% stake in COIMA RES S.p.A. SIIQ from COIMA SGR, Coima Rem S.R.L., Manfredi Catella and other shareholders.	01/08/22	CI
An unknown buyer entered into a preliminary agreement to acquire 14,530 sqm real estate complex in Milan from COIMA RES S.p.A. SIIQ for €40 million.	28/07/22	CI
COIMA RES S.p.A. SIIQ Reports Earnings Results for the Half Year Ended June 30, 2022	27/07/22	CI
COIMA RES S.p.A. SIIQ Reports Earnings Results for the First Quarter Ended March 31, 2022	13/05/22	CI
Qatar Holding launches tender bid on Italy's Coima Res at 10 euros/shr	28/04/22	RE
Qatar Holding LLC and Coima Holding Di Coima Gp S.R.L. & C. S.A.P.A. made an offer to acquire remaining 60% of stake in COIMA RES S.p.A. SIIQ.	27/04/22	CI
Transcript : Coima Res S.p.A., 2021 Earnings Call, Feb 25, 2022	25/02/22
Coima Res S.p.A. Reports Earnings Results for the Full Year Ended December 31, 2021	24/02/22	CI
Coima Res Secures $170 Million in Financing to Support Real Estate Portfolio	30/12/21	MT
Coima Res S.p.A. Reports Earnings Results for the Nine Months Ended September 30, 2021	05/11/21	CI
Transcript : Coima Res S.p.A., Nine Months 2021 Earnings Call, Nov 05, 2021	05/11/21
COIMA RES S.p.A. SIIQ(BIT:CRES) added to S&P Global BMI Index	20/09/21	CI
Coima Res S.P.A. Reports Earnings Results for the Half Year Ended June 30, 2021	31/07/21	CI
Transcript : Coima Res S.p.A., Q2 2021 Earnings Call, Jul 30, 2021	30/07/21
Coima Res S.P.A. Reports Earnings Results for the First Quarter Ended March 31, 2021	07/05/21	CI
Transcript : Coima Res S.p.A., Q1 2021 Earnings Call, May 07, 2021	07/05/21
Coima Res S p A : Kering luxury brand Bottega Veneta leases central Milan palace	27/04/21	RE
Transcript : Coima Res S.p.A., 2020 Earnings Call, Feb 26, 2021	26/02/21
Coima Res S.p.A. Provides Earnings Guidance for the Year 2021	26/02/21	CI
Coima Res S.p.A. Anticipates Dividend Distribution	26/02/21	CI
Coima Res S.p.A. Reports Earnings Results for the Full Year Ended December 31, 2020	24/02/21	CI
APWireless acquired 13.7% of stake in Telecom Portfolio of COIMA RES in Italy.	14/12/20	CI
Transcript : Coima Res S.p.A., Nine Months 2020 Earnings Call, Nov 06, 2020	06/11/20
Coima Res S.P.A. Reports Earnings Results for the Nine Months Ended September 30, 2020	04/11/20	CI

	1st Jan change	Capi.
BOSTON PROPERTIES, INC.	-9.93%	10B
NIPPON BUILDING FUND INC.	-3.60%	6.55B
DEXUS	-7.94%	5.2B
KDX REALTY INVESTMENT CORPORATION	-3.23%	4.17B
KILROY REALTY CORPORATION	-13.60%	4.08B
EMBASSY OFFICE PARKS REIT	+4.54%	3.92B
INMOBILIARIA COLONIAL SOCIMI, S.A.	-5.34%	3.7B
SL GREEN REALTY CORP.	+17.31%	3.45B
SOCIÉTÉ FONCIÈRE LYONNAISE	+1.79%	3.19B

COIMA RES S.p.A. SIIQ

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