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Tuesday 09 November, 2010

Altarea

NINE - MONTHS 2010 REVENUES AND BUSINESS ACTIVI...

PR Newswire/Les Echos/

Press release                                      Paris, November 8th 2010

                    9M 2010 REVENUES AND BUSINESS ACTIVITY

Shopping centres: increase in rental revenues and improvement in business
indicators 

* Rental revenues from shopping centres up + 5.3% at EUR121.6m, driven by
  deliveries
* Significant improvement in retailers' revenue growth: +3.3% since the start of
  the year. Strong performance by retail parks (+7.2%)
* Slight fall in rental revenues on a like-for-like basis
* Improvement in tenants' occupancy cost ratio, returning to pre-crisis level
  of 9.0% 

Residential property: Further growth in sales 

* New home reservations: EUR1.0bn incl. tax over 9 months, up +66% relative to
  2009 and +98% relative to 2007, the benchmark year before the financial
  crisis
* Backlog: EUR1.3bn excl. tax (30 months' revenues)
* Pipeline(1) worth EUR2.2bn incl. tax, equal to around 20 months' supply at the
  current disposal rate (+32% over 9 months despite the rapid rate of sales)

Office property: first encouraging signs in a still recovering market 
* Moderate improvement in take-up under continuing difficult market conditions
  at EUR210m incl. tax
* Decline in revenues reflecting the delayed effect of the slowdown in business
  since 2008
* Increase in backlog to EUR1 56m excl. tax

According to Alain Taravella, Chairman and Founder:

"The operating indicators are gradually turning positive across all of our
business lines, with an upturn in consumer spending at shopping centres, strong
positions obtained in residential property development and tangible signs of
recovery in office property. We have now laid the foundations for strong growth
(subject to constant economic conditions) in our earnings and cash flow for the
next two to three years. A more detailed outlook will be presented to the market
on the publication of our full-year financial statements on 7 March next year.
"

(1) Potential revenues incl. tax from development projects with land under
option + potential revenues incl. tax from properties for sale

1. Shopping centres: increase in rental revenues and improvement in business
   indicators 

Rental revenues rose by +5.3% over nine months as a result of:

                                            (EUR m)

Rental revenues as of Sept. 30, 2009       115,4

Deliveries                                  13,1  11,4%
Remodelling                                 (1,9) -1,7%
Disposals and acquisitions                  (2,0) -1,7%
Like-for-like change                        (3,1) -2,7%

* Deliveries

Since the start of the year, GLA of around 100,000 sqm(2) has been completed in
France (Okabe in Kremlin Bicetre, Family Village in Limoges) and Italy (Le Due
Torri in Lombardy), representing total full-year rental revenues of EUR23. 5
million(3). The occupancy rate for these properties was 9 5% on opening.

* Standing portfolio

In parallel with creating new shopping centres, the Group has pursued an intense
asset management policy across its entire portfolio, comprising the remodelling
and extension of existing properties (seven projects in progress) and asset
sales already carried out (Toulouse Saint-Georges, Paris Wagram) or under
discussion relating to properties that have reached maturity. This should enable
the Group to maintain its pace of growth in a business climate still in
recovery, as demonstrated by the -2.7% fall in like-for-like rental revenues as
a result of the combination of a number of factors (slightly negative indexation
effect(4), decline in variable rental revenues, bad debt loans and frictional
vacancy).

* Improvement in tenants' operating indicators

Retailers' revenues increased by 3.3%(5) relative to 2009. This relates to all
retail formats, with retail parks confirming the brisk momentum seen over the
last few quarters with growth of +7.2%. The performance of retail parks was
achieved in a climate in which competitive pricing has become the decisive
factor for consumers. Retail parks have therefore benefited fully from their
mass market positioning, while also offering a carefully thought-out environment
and pleasant shopping experience comparable to those offered by many shopping
centres (in particular for the latest-generation Family Villages developed by
the Group).

As a result of the combination of revenue growth and a slight drop in rental
values, tenants' occupancy cost ratio returned to close to the pre-crisis level
at 9.0% (compared with 9. 5% in 2009).

2. Residential property: very sharp increase in residential reservations: 

In a particularly buoyant market - with record low interest rates, support for
first-time buyers, buy-to-let incentives and a shortage of new homes - the
Group, via its subsidiary Cogedim, has achieved strong growth quarter after
quarter, with net reservations of EUR1.0 billion including tax to 30 September
2010, representing a year-on-year increase of +66%.

(2) On a 100% basis (78,500 sqm Group share)
(3) On a 100% basis (EUR18.2 million Group share)
(4) French retail rent index (ILC): +0.84%, CCI index: -4.10%
(5) Figures to end-August on a like-for-like basis (France)

Compared with 2007, which was the benchmark year before the financial crisis,
the level of sales has almost doubled, while in the meantime the French market
has not yet returned fully to its pre-crisis level(6). This growth was achieved
entirely on an organic basis.

Cogedim is the undisputed French leader in upscale residential development,
managing prestigious projects as Paris 7 Rive Gauche on the former Laennec
hospital site in the heart of Paris (7th arrondissement).

Individual investors have accounted for just 40% of sales since the start of the
year. The Paris Region remains the most dynamic region with 63% of total sales
since the beginning of the year.

                                 30/09/2010 30/09/2009 30/09/2008 30/09/2007
Net reservations (EURm, incl. tax)    1,000      601          455       504
% chg yoy                               +66%     +32%         -9%
% chg vs.2007                           +98%     +19%         -9%
Number of units sold(8)               3,646    2,905       1,701      2,194
Notarised revenues (EURm, incl. tax)    698      495         410        562
Revenues (EURm, incl. tax)            382.3    385.1       437.8      355.4
Backlog(9)(EURm, excl. tax)           1,334      778         684        679

In view of the sharp increase in residential reservations that began in 2009 and
the backlog already built up, very strong revenue growth can be expected
compared with current levels at the end of 2010 and for the next two to three
years.

(6) 100,000-110,000 homes expected to be sold in 2010 compared with 127,000 in
2007 (source: French Ministry of Ecology)
(8) On a 100% basis
(9) The backlog comprises revenues excluding tax from notarised sales to be
recognised according to the percentage-of-completion method and reservations to
be notarised.

Pipeline: 

(in EURm)                     30/09/2010   31/12/2009
Properties for sale             458          368
Properties in the portfolio   1,748        1,301
Pipeline(10)                  2,206(11)    1,669

Cogedim's commercial success relates above all to the quality of its products,
the dynamism of its staff and the attractiveness of its brand, as well as its
ability to offer properties that meet current market needs in terms of quality
and volume. Despite the very brisk rate of sales, the pipeline has grown
significantly since the start of the year (+32%), representing around 20 months'
supply at the current disposal rate. Cogedim has therefore benefited fully from
current market conditions while also maintaining rigorous management of its
risks and commitments.

3. Office property: relative upturn in commercial activity in a still
   weak market

To 30 September 2010, Altarea Cogedim recorded take-up of EUR210 million incl.
tax relating to various developments or delegated project management projects,
an increase of 23. 5% relative to the total in 2009. The backlog therefore grew
in a market that is still weak but showing the first signs of recovery.

                          30 Sept. 2010 31 Dec. 2009 31 Dec. 2008 31 Dec. 2007
Take-up (EURm, incl. tax)         210           170           409          448
Backlog (EURm, excl. tax)         156           103           162          255
Total revenues (EURm, excl. tax) 54.4         152.0         174.1         82.0

4. Financial position

Net bank debt amounted to EUR2,229. 5 million at 30 September 2010 compared with
EUR2,098.6 million at 30 June 2010. This increase relates primarily to the
dividend paid in July, investment in recently completed development projects and
financing of the working capital requirement, as well as cash flow generated
from operations.

Contacts

Analysts, investors: Eric Dumas, Chief Financial Officer +33 1 44 95 51 42
Press: Nathalie Bardin, Communications Director
+33 1 56 26 25 36 / + 33 6 85 26 15 29
Valerie Jardat, Cote Jardat +33 1 41 05 94 10 / +33 6 12 05 18 35

(10) Potential revenues incl. tax
(11) Number of units in the pipeline : 8,500

                                        2010
(EUR k)                  Q1 2010 Q2 2010   Q3 2010 Total YTD

Shopping centres
Rental revenues           40 585  40 283   40 700  121 567 
External fees              1 956   2 043    2 004    6 003 
    Shopping centres      42 540  42 325   42 705  127 570 

Third-party development
Revenues                 143 972 140 095  145 637  429 704 
External fees              2 343   4 443    3 089    9 874 
   Property development  146 315 144 538  148 725  439 578 

O/w residential property
Revenues                 122 644 126 144  133 502  382 290 
External fees                379   1 946      556    2 881 
   Residential property  123 023 128 089  134 058  385 170 

O/w office property
Revenues                  21 328  13 952   12 135   47 415 
External fees              1 964   2 497    2 532    6 993 
        Office property   23 292  16 449   14 667   54 408 

Recurring activities     188 856 186 863  191 430  567 149 
Revenues (1)              11 758   4 586    2 973   19 316 
External fees                901   1 108      256    2 265

Non-recurring activities  12 659   5 694    3 228   21 581

Total revenues           201 515 192 557  194 658  588 730

                2009                          Variation
Q1 2009     Q2 2009   Q3 2009   Total YTD        2010 YTD -
                                               2009 YTD
  35 543     41 040    38 866    115 448           5,3%
   1 917      1 903     1 964      5 784           3,8%
  37 460     42 942    40 830    121 231           5,2%
 166 297    177 775   155 813    499 885         -14,0%
   4 442      5 251     2 698     12 391         -20,3%
 170 739    183 026   158 511    512 276         -14,2%
 122 349    140 156   122 564    385 069          -0,7%
     751      1 422       555      2 728           5,6%
 123 100    141 577   123 119    387 796          -0,7%
  43 948     37 619    33 249    114 816         -58,7%
   3 692      3 829     2 143      9 664         -27,6%
  47 640     41 449    35 392    124 480         -56,3%
 208 199    225 968   199 341    633 509         -10,5%
   4 962     19 256    34 848     59 066         -67,3%
     314        467       647      1 428          58,6%
   5 276     19 723    35 495     60 493         -64,3%
 213 475    245 691   234 836    694 001         -15,2%

(1) Non-recurring activities revenues are mainly consisting of off-plan sale
agreements connected with shopping centres under development.

Altarea Cogedim Q3 2010 revenues and business performance - Press release
                      
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