Icade : Very solid 2022 Full-Year Results

PRESS RELEASE

Paris, February 20, 2023, 7:00 a.m.

VERY SOLID 2022 FULL-YEAR RESULTS

IFRS REVENUE UP +9% TO €1.8BN

NCCF UP +7% TO €417M, ABOVE GUIDANCE

EPRA NDV PER SHARE UP +12%, RESILIENT ASSET VALUES

Growth in Group earnings driven by strong operating performance across our three business lines

• IFRS Revenue up +9% to €1.8bn
• Net current cash flow up +7% to c. €417m, +5.9% to €5.50 per share
• EPRA NDV up c. +12% to €101.4 per share (€7.7bn)
• 2022 dividend to be proposed at the April 21, 2023 General Meeting: €4.33 per share, +3.1% vs. 2021

Office and Healthcare Property Investment: solid financial and operational indicators, strong asset rotation and resilient asset values

• Higher rental income on a proportionate consolidation basis: +2.6% to €565m
• EPRA earnings from Property Investment: +5.7% to €382m
• Disposal plan: c. €680m, in line with the appraised values as of December 31, 2021
• Resilient portfolio value, down -2.5% like-for-like: Office Property Investment portfolio down -4.8%; Healthcare Property Investment portfolio up +2.2%

Property Development: Strong sales momentum, increased profitability

• Economic revenue stood at €1.26bn, a very strong increase of +17% vs. 2021
• Current economic operating margin improved by +120 bps vs. 2021 to 6.2%
• Orders at over 6,000 units, up +10% in value terms vs. 2021
• Backlog of €1.84bn, up +6.5% (including +12% for the residential segment)

A stronger financial structure at the end of 2022

• Over €700m in sustainable bank financing renewed, debt maturity schedule and liquidity enhanced
• Average debt maturity above 5 years; average cost of debt down to 1.25% on a YoY basis
• LTV ratio down 80 bps to 39.3%

Governance: Appointment of a new CEO to be announced by April 21, 2023 at the latest (on the occasion of the General Meeting)

FY 2023 guidance

• 2023 Group net current cash flow per share: stable to slightly up, excluding impact of 2023 disposals
• 2023 dividend policy: in line with net current cash flow evolution; payout ratio at c. 80% (subject to approval by the 2024 General Meeting)

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"In a particularly complex and volatile economic and financial environment in 2022, the Group recorded a better-than-expected increase of 7% in net current cash flow thanks to a solid operational and financial performance across its three business lines and rigorous financial management. With EPRA earnings up 5%, in a context of significant asset rotation, including over €600m in disposals in 2022, the Office Property Investment Division reaffirmed the strength of its fundamentals. The Healthcare Property Investment Division continued a strong upward trend in rental income and adjusted its investment strategy to the changing financial environment. The Property Development Division's sales indicators were particularly high in 2022, with economic revenue up 17% to €1.3bn, while it also made good progress on its roadmap with improved margins despite rising inflation. Thanks to the continued proactive and optimised management of its balance sheet, Icade had a solid and secure financial structure at the end of 2022. This allows it to look forward with confidence to the future operational and financial challenges it may face."

Olivier Wigniolle, CEO of Icade

"The two terms of Olivier Wigniolle as CEO were characterised by many successes as well as the implementation of two successive strategic plans. This allowed the Group to radically reinvent itself, strengthen its fundamentals and make its three Divisions leaders in their fields. We sincerely thank him for the eight years he spent at Icade and for the passion and professionalism that he has continuously demonstrated. The Board of Directors has begun looking for his replacement who will be responsible for defining and putting in place the new plan."

Frédéric Thomas, Chairman of the Board of Directors

At its meeting held on Friday, February 17, 2023, Icade's Board of Directors chaired by Mr Frédéric Thomas approved the financial statements for the year 2022:

	12/31/2022	12/31/2021	Change (%)
IFRS revenue (in €m)	1,815.6	1,660.9	+9.3%
Revenue on a proportionate consolidation basis (in €m)	1,736.0	1,557.6	+11.4%
EPRA earnings from Property Investment (in €m)	381.8	361.1	+5.7%
Net current cash flow from Property Investment (in €m)	394.7	373.6	+5.6%
Net current cash flow from Property Development (in €m)	37.0	24.2	+52.7%
Group net current cash flow (in €m)	416.8	389.7	+7.0%
Group net current cash flow (in € per share)*	5.50	5.19	+5.9%
Net profit/(loss) attributable to the Group (in €m)	54.1	400.1	-86.5%
	12/31/2022	12/31/2021	Change
EPRA NTA per share	€89.8	€94.5	-5.0%
EPRA NDV per share	€101.4	€90.6	+11.9%
Average cost of drawn debt	1.25%	1.29%	-4 bps
LTV ratio (including duties)	39.3%	40.1%	-80 bps

*The difference between the total change and the per-share change is due to share dilution as a result of i) the full-year impact of the 2021 scrip dividend and ii) the impact of bonus shares granted in 2020 and having vested in 2022.

1. 2022 performance by business line

1.1. Office Property Investment: strong leasing activity and asset rotation, resilient asset values

A solid tenant base and a robust asset management activity in 2022

Gross rental income from Office Property Investment amounted to €355m on a proportionate consolidation basis as of December 31, 2022, down -2.2% against a backdrop of significant asset disposals (more than €1.1bn in 2021 and 2022). The disposals in 2021 and 2022 represent annual rental income of around €50m.

Excluding the impact of these disposals, gross rental income would have risen by +4.7%.

On the other hand, gross rental income benefited from the full-year impact of acquisitions in 2021 (Equinove and Le Prairial), the acquisition of Défense Parc in 2022, and completions (including Fresk and Origine) in 2021, with a total effect of nearly €54m on an annual basis.

Asset management activity remained strong over the period, with leases covering nearly 200,000 sq.m signed or renewed (121 leases). These leases represent c. €50m in additional annualised headline rental income and a WAULT to break of 5.9 years.

It should be noted that there were no significant tenant departures in 2022.

• The 99 leases signed with new tenants cover more than 101,000 sq.m, with €23m in annualised headline rental income and a WAULT of 6.7 years. Noteworthy among them were:

1. The 15,000-sq.mNEXT project (Part-Dieu district, Lyon) pre-let to first-class tenant APRIL for a 12-year term with a break option after 9 years;

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1. Nearly 5,000 sq.m in the FRESK building signed with ANS1 for a 7-year term with no break option, bringing the occupancy rate of the building to 90%.

1. More than 6,000 sq.m in the M Factory building in Marseille, a construction project from our pipeline scheduled for completion in Q4 2023.

These leases were signed at rents in line with market levels.

• The 22 renewed leases cover almost 95,000 sq.m, with €28m in annualised headline rental income and a WAULT of 5.2 years: Following the renewal at the end of 2021 of the lease with our largest tenant, AXA, in Nanterre, covering more than 75,000 sq.m for a 9-year term, we have reinforced our tenant base by renewing the c. 45,000-sq.m lease with our third-largest tenant, Véolia, in the Millénaire area for a 9-year term, including 6 years with no break option, as well as the c. 12,500-sq.m lease with Club Med in the Pont de Flandre business park for a 3-year term.

All lease renewals were signed at rents slightly above market levels with lease incentives in line with the market average where the properties are located.

• Leasing activity at the Paris Orly-Rungis business park was particularly strong, with leases covering c. 48,000 sq.m signed or renewed over the year, representing annualised headline rental income of almost €7m, further demonstrating the site's appeal.

On a like-for-likebasis, gross rental income saw a slight decrease of -0.4% (on a proportionate consolidation basis), but improved significantly from June onwards, driven by leasing activity, particularly in business parks (+2.7%) such as the Paris Orly-Rungis business park (+8%) and those outside the Paris region (+3.6%).

With 100% of leases linked to indices (c. 80% to the ILAT index and c. 20% to the ICC and ILC indices), as expected, the impact of index-linked rent reviews accelerated in H2, resulting in a total impact of +3% over the year, thus partially offsetting the effects of a more sluggish leasing activity.

As of December 31, 2022, the financial occupancy rate stood at 87.7%, up 0.7 pp compared to June 30, 2022.

At the end of December, this indicator continued to be impacted by the robust disposals in 2021 and 2022, since disposals relate to core mature assets that are fully let.

On a like-for-like basis, the occupancy rate increased by 0.4 pp year-on-year.

The WAULT to first break stood at 3.8 years.

The average annual rent collection rate as of the end of December stood at over 99%, reflecting the strength of the Office Property Investment

Division's tenant base, more than 70% of which comprises CAC 40, SBF 120 and public sector companies.

Investments reflecting a dynamic pipeline and the resumption of opportunistic acquisitions

Total investments for the period amounted to €324m (c. €307m on a proportionate consolidation basis), down almost €130m compared to December 31, 2021, in line with the investment policy and increased selectivity due to the current economic environment. The breakdown is as follows:

• A value-addacquisition for €67m including duties: the Défense Parc complex in Nanterre (Hauts-de-Seine), comprising two buildings covering almost 20,000 sq.m. It is fully leased to two first-class tenants, namely the French Ministry of the Interior and SCC France.
• Investments in the development pipeline for €165m, mainly relating to the following projects:

1. Edenn in Nanterre-Préfecture for €36m, nearly 60% pre-let to Schneider Electric and scheduled for completion in Q3 2025;

1. Jump in the Portes de Paris business park for c. €34m, a project currently under development which has been pre-let on a 12-year lease;

1. Marignan, a project to refurbish a trophy asset on the Champs Elysées in Paris, for €30m;

1. Next in Lyon's Part-Dieu district for €9m, an office building project covering more than 15,000 sq.m, with 100% of its floor area pre-let2, including 85% to APRIL, and completion scheduled for Q2 2024;

• 1. Athletes Village in Saint-Ouen for €22m.
• "Other capex" for c. €90m related mainly to maintenance work and improvements in buildings' technical and environmental quality.

As of December 31, 2022, the pipeline of projects launched amounted to €751m, representing more than 115,000 sq.m, which have been 54% pre-let (+15 pps vs. June 30, 2022).

1. ANS: French National Health Agency
2. Including 15% subject to an exclusivity agreement

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Following the pre-let lease signed with Equinix, the project to convert office space into a data centre in the Portes de Paris business park was included in the pipeline of projects launched.

Of the four projects scheduled for completion in 2023, three have been fully pre-let.

In addition, Icade and Covivio exited their Quai 8.2 co-development project in Bordeaux on January 18, 2022 by exchanging two assets, namely Orianz and Factor E in Bordeaux-Euratlantique. This transaction resulted in Icade acquiring 100% of Orianz and selling 100% of Factor E to Covivio.

Including this transaction, investments for the period totalled €355m (on a full consolidation basis).

Asset disposals: 2022 targets achieved, excellent progress on 2023 disposal plan

With disposals totalling more than €600m3, Icade achieved its objectives in terms of disposal volume for 2022. This amount mainly includes the disposal of three core buildings:

• Sale of the c. 25,000-sq.m Millénaire 4 building in the Millénaire business park (Paris, 19th district) for €186m to Générale Continentale Investissements and BlackRock Real Assets;
• Sale of the 20,000-sq.m Gambetta building (Paris, 20th district) to funds managed by Primonial REIM France for €219m;
• Sale of the AXE 13 building in Nanterre-Préfecture(Hauts-de-Seine) for €127m. Covering over 16,000 sq.m, this office building

is fully leased to AXA with a remaining lease term of over 8 years.

These properties were sold to leading institutional investors at prices in line with the appraised values (average rate of return of 4.4%).

In addition, in H2 2022, Icade signed two preliminary agreements to sell core office buildings in Marseille for more than €100m (Grand Central for €53m and Eko Active for €48m), bringing the total disposals scheduled for 2023 to c. €150m, i.e. 30% of the annual target.

Slight decline in asset values as of December 31, 2022

As of December 31, 2022, the Office Property Investment portfolio was worth €7.7bn on a proportionate consolidation basis, down due to net disinvestment in this portfolio and lower values reflecting the new interest rate environment.

The value of the portfolio was down -4.8% on a like-for-like basis. Most of this drop took place in H2, with the average capitalisation rate for the Office Property Investment portfolio standing at 6% as of December 31, 2022, up 40 bps.

Of particular note were the like-for-like increases in the value of our assets located outside the Paris region (+7%) and the business premises in our business parks (+6.2%).

On a full consolidation basis, the portfolio was valued at €8.2bn.

1.2. Healthcare Property Investment: Continued upward trend in rental income and resilient asset values in a changing interest rate environment

Higher leasing activity, driven by acquisitions in 2021 and index-linked rent reviews

Gross rental income from Healthcare Property Investment amounted to €210.5m on a proportionate consolidation basis in 2022, up +11.7% on a reported basis (+€22.1m) compared to 2021, mainly driven by acquisitions in 2021 and 2022 both in France and internationally.

On a like-for-likebasis, gross rental income was up +2.5% (on a proportionate consolidation basis), driven mainly by the effect of index-linkedrent reviews over the period. Like those of the Office Property Investment Division, the Healthcare Property Investment Division's leases are linked to indices with a strong inflation component.

In 2022, the Healthcare Property Investment Division's gross rental income broke down as follows:

• Acute care (private hospitals and other healthcare facilities) accounts for 77%, medium-term care (post-acute care and mental health facilities) for 7% and long-term care (nursing homes) for 16%.
• France for 86%, outside France for 14%.

On a full consolidation basis, gross rental income totalled €360.0m, up +€37.5m on December 31, 2021.

As in previous years, at the end of December 2022, the rent collection rate stood at nearly 100%.

The financial occupancy rate of the portfolio as of December 31, 2022 remained unchanged at 100%.

The weighted average unexpired lease term to first break for the portfolio as a whole stood at 8.1 years, essentially stable compared to December 31, 2021, mainly as a result of renewals and extensions during the year, with nine leases renewed or extended for headline rental income of nearly €28.2m and an impact of +0.6 years on the WAULT to first break of the Healthcare Property Investment Division's portfolio as a whole.

3 This amount also includes the sale of Factor E for €49m on a full consolidation basis (€32m on a proportionate consolidation basis) and other disposals worth €25m.

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The WAULT to first break was 6.8 years for assets in France, down 0.3 years compared with December 31, 2021. For assets outside France, it was up by +0.2 years to 15.5 years on average.

Investments slow in 2022, greater selectivity

Against a macroeconomic and financial backdrop marked by a sharp rise in interest rates since the beginning of 2022, and following a very significant volume of investments in 2021 (€740m4 on a full consolidation basis), the Healthcare Property Investment Division slowed the pace of investment in 2022, showing greater investment selectivity.

Investment activity in 2022 totalled €242m on a full consolidation basis (€142m on a proportionate consolidation basis) and includes acquisitions, development projects and other capex spent during the year.

Investments outside France totalled €149m (€88m on a proportionate consolidation basis), including:

• Spain: continued growth with the acquisition of a portfolio of five long-term care facilities for people with disabilities5 operated by the Colisée Group for €56m (€33m on a proportionate consolidation basis) and an eye clinic in Madrid operated by the Miranza Group for €13m (€8m on a proportionate consolidation basis).
• Italy: further diversification into acute care facilities and completion of projects in the development pipeline for €62m (€37m on a proportionate consolidation basis):

1. Acquisition of two private hospitals in Rapallo and Montecatini Terme for €35m (€21m on a proportionate consolidation basis) pursuant to a preliminary agreement signed with Gruppo Villa Maria in 2021;

1. Acquisition of a new nursing home operated by Gheron in Vigonza for €15m (€9m on a proportionate consolidation basis), following on from the memorandum of understanding signed in December 2020 with a fund controlled and managed by Batipart;

1. Acquisition of a new nursing home operated by Gheron in San Martino di Lupari for €12m (€7m on a proportionate consolidation basis), following on from the memorandum of understanding signed in October 2018 with a fund managed by Numeria.

In France, investments totalled €93m in 2022 (€54m on a proportionate consolidation basis), including:

• Acquisitions worth €16m, including the property assets of the Les Jardins de Sophia facility in Castelnau-le-Lez (Hérault) for €11m (€7m on a proportionate consolidation basis);
• Investments in the development pipeline worth €58m, relating in particular to projects under development (construction of the Salon-de-Provence PAC facility under a property development contract, extension of the Saint-Augustin private hospital in Bordeaux, etc.) or completed in 2022 (extension of the Pic Saint Loup PAC facility, construction of a nursing home in Bellerive-sur-Allier under an off-plan sale contract);
• Other capex during the year worth €18m.

In addition, the preliminary agreements signed in 2022 but not yet paid for as of December 31, 2022 amounted to €74m (€44m on a proportionate consolidation basis), and mainly relate to projects to extend existing assets.

Development pipeline

As of December 31, 2022, the Healthcare Property Investment Division had a development pipeline worth €270m on a full consolidation basis (€158m on a proportionate consolidation basis), representing an estimated €13.4m in additional future rental income (€7.8m on a proportionate consolidation basis), approximately half of which relates to assets in France.

The average yield on cost expected is 5.0%.

It should be noted that in 2022, the Healthcare Property Investment Division completed several projects from its development pipeline:

• In France: five projects worth a total of €65m on a full consolidation basis (€38m on a proportionate consolidation basis) and more than €3m in annualised rental income were handed over to healthcare providers.
• Internationally: acquisition of new or refurbished nursing homes in Germany (Tangerhütte and Wathlingen) and Italy (Vigonza and San Martino di Lupari), and the acquisition of the property assets of two Italian hospitals operated by Gruppo Villa Maria (Rapallo and Montecatini Terme), assets previously subject to preliminary purchase agreements.

Disposals

During the financial year, disposals totalled €95m on a full consolidation basis, which included the disposal of land, as well as the disposal of the property assets of four healthcare facilities in France for a net selling price of €78m on a full consolidation basis (€45m on a proportionate consolidation basis). These disposals are part of the optimisation of the Healthcare Property Investment portfolio, with the assets sold at a price nearly 10% higher than their most recent appraised values.

Resilient healthcare property values: +2.2% like-for-like

As of December 31, 2022, the Healthcare Property Investment portfolio was worth €4.1bn excluding duties on a proportionate consolidation basis (€6.9bn on a full consolidation basis), up +4.1% on a reported basis and +2.2% like-for-like.

1. Amount of investments announced in 2021 including preliminary purchase agreements (€170m): €910m
2. A sixth facility is expected to be acquired by the end of 2023 once the required permits have been obtained.

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