Highlights
? A strategically important year for Eurocommercial, with major acquisitions and disposals
? Strong operational and financial performance generating a proposed dividend of €2.15
? Major refinancing programme completed to lengthen the loan book and secure favourable rates
? Important additions to Company Boards
Key results
? Net property income increased 5.4%
? Direct investment result increased 7.1%, and per depositary receipt increased 5.8% to €2.36
? Like-for-like rental growth was 1.4%
? Average uplift of 11.3% on renewals and relettings
? Retail sales increased 1.1%
? Adjusted net asset value per depositary receipt of €45.08

Chief Executive’s commentary
“This has been a year of considerable strategic importance for Eurocommercial. A new country, Belgium, has been added with the acquisition of Woluwe - the best-known shopping centre in Brussels in a prime location, with excellent transport links and significant development potential. We have also added Valbo, another well-located and dominant regional shopping centre, to our Swedish assets. The result is an improvement in the overall quality of our portfolio, and a focus on properties with potential for future growth.
“In addition to the sales of Rue de Rivoli, Mellby and 421 for almost €177 million in 2017, we have now sold centres in
Bologna, Imola, Mantova and Sarzana in Italy for a price of €187 million and we are in discussions regarding further disposals.
“Operational and financial performance for the year was strong, resulting in a significant year-on-year increase in earnings.
This was further enhanced by the timing of acquisitions and disposals, hence a moderate increase in the proposed dividend, rising 2.4% to €2.15 per depositary receipt (10 ordinary shares) this year.
“Our leasing teams have been working hard to secure an average uplift of over 11% in relettings and renewals and have negotiated over 200 new leases in the last twelve months. There was some softening of rental growth, particularly in France
where the positive impact of indexation has been affected by short-term vacancies in Passage du Havre and Les Atlantes, but
overall rental growth was steady at 1.4% on a like-for-like basis.
“The ability to develop and organically grow our portfolio is fundamental to Eurocommercial’s investment strategy and work
has continued apace with our major projects. Having completed the major phases of development at Hallarna in Sweden,
most recently with the opening of the 4,000m² XXL store, the remaining shorter northern mall and hotel are on track to be completed during 2019. At Kristianstad, the C4 development is on course to open officially in September 2018 and is already 96% pre-let to major Scandinavian, international and local retailers. In Belgium, we are progressing our planning application
for the 11,600m² retail extension and around 150 residential apartments which will be ideally located for those working at the
European Union headquarters a short distance away. In France, we have submitted a new application for a 20,000m² extension at Val Thoiry and, in Italy, we have received an initial positive response from the local municipality for our proposed extension at Collestrada. At Curno, the pre-leasing of the food court is proceeding very well with head of terms for the bigger units already agreed.
“Generally, in our markets the retail space supply and demand dynamics are in balance but retail chains are being more selective in the location of their physical stores, given their alternative internet-based sales channels. Physical and online sales are mutually supportive and fundamental to the profitability of many retailers but they are being constantly re-examined,
with secondary or surplus physical stores being closed and often larger stores being opened in more favoured locations.

“Demand from institutions for European property investments was extremely strong for the majority of 2017 with yields lower
than for many years. It seems that the European Central Bank, while slowing its bond purchasing programme, is not yet ready
to start raising interest rates per se but some investors are anticipating higher rates over the next year or so. Yields in the
retail property sector have stopped falling and, in the case of more mundane properties, even started to rise slightly, thus
reducing some prices. How much of this is directly related to official interest rates and how much to a reflection of concerns for
US and UK retail markets which are suffering from structural problems, oversupply, internet competition and Brexit fears, it is
impossible to say but the trend is evident in France, although not in Belgium, Italy or Sweden.
“We completed a busy year with our listing on Euronext Brussels, complementing our existing listing in Amsterdam. Brussels
is a core market for Eurocommercial’s investment strategy in the coming years and we welcomed the opportunity to signal our long-term commitment to the Belgian real estate market.”
Proposed additions to Company Boards
The Supervisory Board of Eurocommercial will propose the following appointments at the upcoming AGM, which takes place on Tuesday 6 November 2018:
Supervisory Board
The appointment of Ms E. Attout, of Belgian nationality and previously senior audit partner for PwC Brussels, as member of the Supervisory Board effective 6 November 2018 for a period of four years. In addition, the reappointments of Mrs Carrière and Mr Steins Bisschop as Supervisory Directors will be proposed. Mr Foulkes unfortunately cannot be available for re-election.

Board of Management
The appointment of Mr R. Fraticelli, Country Director Italy, and Mr J.P.C. Mills, Country Director Sweden, as members of the Board of Management effective 6 November 2018 for a period of four years.
Mr T.R. Newton, currently Country Director for France and having reached the age of 60, has decided to retire from fulltime employment with effect from January 2019 but will continue to offer his services to Eurocommercial as a consultant, primarily focussed on the Woluwe project and Belgium.
Jeremy Lewis said:
“Tom has been fundamental to the success of Eurocommercial over the past 26 years, particularly in France and more recently Belgium. Tom’s knowledge and understanding of the retail landscape and its impact on our tenants and the requirements for shopping centres has been invaluable over the years. As such, we are grateful that he will remain
involved with the Company through his role in one of Eurocommercial’s most important investment projects in the coming
years.”
Mr P. Le Goueff, currently Property Director France having joined Eurocommercial in 2000, will be appointed Country
Director for France. He will lead a team of 24 people, responsible for 12 shopping centres in France.

Jeremy Lewis said:
“Pascal has been a core member of the management team for several years and his knowledge of the French market made him a clear choice as Tom’s replacement. We are delighted he has chosen to accept the position and look forward
to working with him in his new role.”
Changes to Boards Stichting Administratiekantoor and Stichting Prioriteitsaandelen
The board of Stichting Administratiekantoor Eurocommercial Properties has proposed to appoint Mr C.A. Schwarz as a third independent member to the board. Mr Schwarz is a Dutch national with extensive experience as a professor of corporate law at the Erasmus School of Law. His appointment would take effect as per 6 November 2018.
Eurocommercial’s Board of Management intends to grant its approval for the proposed appointment of Mr C.A.Schwarz.
In addition, the board of Stichting Prioriteitsaandelen Eurocommercial Properties informed Eurocommercial that it had
resolved to increase the number of board members to three. Mr J. Willeumier will be appointed as an independent board
member effective 1 October 2018. Mr J. Willeumier is a Dutch national with extensive experience in financial and
corporate law and was previously a partner of law firm Stibbe.
Detailed biographies for Ms. Attout, Mr Schwarz and Mr Willeumier will be available with the agenda for the AGM, which
will be published on Eurocommercial’s website on 21 September 2018, found on the Company’s website.

2017/18 Operational and financial review
Rental growth
Over 200 leases were renewed or re-let in Eurocommercial’s centres during the twelve-month period, resulting in an average uplift in minimum guaranteed rent for those shops of 11.3%. The like-for-like (same floor area) rents of all Eurocommercial’s galleries increased by 1.4% overall at 30 June 2018, when compared with 30 June 2017, driven mainly by indexation and relettings/renewals.

Rental growth for the year in Italy and Sweden was strong at 1.5% and 3.8% respectively. In France, growth from indexation
was diminished by an increase in vacancies following the departure of H&M from Les Atlantes and Passage du Havre where we were unable to provide the larger units they required. Søstrene Grene has subsequently opened in one of the ex-H&M
units at Passage du Havre, terms agreed for another unit and the third, smaller store is currently under negotiation. At Les Atlantes, a significant reconfiguration of the centre is planned and Eurocommercial will be submitting a planning application for an adjoining 8,000m² retail park, contingent on pre-letting.
see & read more on
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tijd 09.14
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