FOR THE FIRST NINE MONTHS OF 2016
Paris - October 26, 2016
Retailer sales up 1.4% on a like-for-like basis  for the first 9 months of 2016, reflecting the resilience of Klépierre's portfolio
Solid growth registered in Scandinavia, Eastern Europe and Turkey.
Fashion sales down 1.3% across the portfolio, affected by adverse weather conditions, especially in France and Southern Europe.
Strong leasing activity with a reversion level of 11.2% year-to-date on renewals and relets
Excellent deal flow with retailers both in volume and in quality, with many leading international retailers choosing Klépierre shopping centers to open upsized stores.
Revenues for the first 9 months amounted to 972.3 million euros, broadly unchanged compared to the same period last year
Additional revenues from Plenilunio and Oslo City acquired last year, partially offset by disposals of shopping centers in 2015 and 2016.
231 million euros worth of disposals completed or under promissory agreement year-to-date
Proactive liability management leading to longer debt maturity as of quarter end
Lengthening maturity from 5.6 years to 6 years and cost of debt expected to fall below 2% in 2017.
Outstanding extra-financial ratings for 2016, rewarding Klépierre's long-standing efforts in corporate social responsibility
Best results ever achieved: rated 2 nd best European listed retail property company by the Global Real Estate Sustainability Benchmark (GRESB); reached 97 th percentile in the World Dow Jones Sustainability Index (DJSI); upgraded to 'A'-rating by the Carbon Disclosure Project.
Full-year guidance confirmed: net current cash flow per share above 2.25 euros for 2016
On a like-for-like portfolio basis,  retailer sales in Klépierre shopping malls rose by 1.4% during the first 9 months of 2016 compared to the same period last year. The Health & Beauty and Household Equipment segments performed well with sales growth above 2.0% through the 9 months. The fashion segment was down 1.3% for the period, as warm temperatures in September weighed on this segment - the main contributor to retailer sales - in France, Belgium, Italy and, to a lesser extent, Spain. Sales were down by 0.7% for the third quarter compared with the same period last year, primarily reflecting the strong sales performance recorded in the third quarter last year (+5.6%).
The sales' resilience also derives from the diversified geographical mix of the portfolio. In the first 9 months of 2016, significant growth in retailer sales was recorded in Denmark (+3.6%), Sweden (+3.5%), and CEE & Turkey (Poland +3.9%; Hungary +11.1%; Czech Republic +5.7%; Turkey +7.1%). In France, retailer sales were down by 0.4%, reflecting the unfavorable weather conditions that heavily impacted fashion sales in September. Retailer sales in Klépierre malls continued to outperform the CNCC index (+120 bps for the 8 months ending August 31, 2016). In Italy, retailer sales for the first 9 months grew by 1.2%, a slight slowdown compared with the first half of 2016. In addition to the aforementioned weather conditions, this figure reflects the high basis of comparison with the third quarter of last year, when sales were boosted by the Milan World's Fair.
For the 9 months ending September 30, Klépierre signed 1,356 leases that together represent 21.1 million euros in additional annual minimum guaranteed rents (compared to an additional 18.5 million euros during the same period last year). The reversion rate on renewals and relets reached 11.2% for the 9 months of 2016, in line with the level achieved in the first half of the year.
Major international retailers have expanded in Klépierre's platform, capitalising on Klépierre's presence in prime locations to deploy their latest concepts. In the third quarter, Klépierre signed a total of 13 new leases with Inditex and H&M (7 new stores and 6 expansions). Overall, the 5 Zara stores signed or opened this year have an average size of 2,600 sq.m. and the 10 H&M stores an average size of 2,700 sq.m., allowing these retailers to pursue their strategy in an optimal manner.
In particular, Klépierre signed deals with H&M for 3 malls in Sweden (Emporia, Marieberg Galleria and Kupolen) involving an increase in leased commercial floor space and refurbishment, as well as the establishment of H&M Home, which will strengthen the fundamentals of these well-established malls. Zara plans to open 2 new generation stores, one in Romagna Shopping Valley (4,000 sq.m., Italy) and one in Dresden (3,300 sq.m., Germany). Zara will also expand its space in Grand'Place (Grenoble) to 3,200 sq.m. and its unit in Ecully to 2,080 sq.m. (+500%). In Plenilunio (Madrid, Spain) and Romagna Shopping Valley (Italy), Pull&Bear and Stradivarius will further strengthen the merchandising mix.
In the third quarter, Klépierre also signed a number of leases with large brands going retail that are further expanding their European footprint. NYX (L'Oreal brand) opened 3 new stores in October (Val d'Europe and Grand Littoral in France, Parque Nascente in Portugal), in addition to the 6 stores signed and opened in the first half of 2016. Gemey Maybelline (another L'Oreal brand) signed a lease for its first store in the greater Paris area (and its second store in France), which will open at Belle-Epine (managed, not owned by Klépierre). Lastly, Lego is expanding in Klépierre's portfolio, with a new store opened in Campania (Naples, Italy) and renewals in the third quarter of its Italian presence in Porta di Roma and Le Gru.
Leasing activity was strong in Italy with 200 deals signed in the first 9 months of the year. In addition to the Inditex and Lego stores mentioned above, notable signatures in the third quarter include Levi's (in Grandemilia and Nave de Vero), Michael Kors (Porta Di Roma), Pandora (Le Gru) and Tommy Hilfiger (Nave de Vero) stores.
Gross rents, total share, amounted to 893.1 million euros for the first 9 months of 2016, compared with 902.2 million euros for the same period last year, as revenues from organic growth and acquisitions nearly offset disposals.
Shopping center gross rents, total share, amounted to 869.3 million euros for the first 9 months of 2016, down 6.7 million euros compared with the same period last year. The disposal of non-core shopping centers completed in 2015 and 2016 - in particular in the Netherlands - impacted total revenues by 36.4 million euros.
The index-linked impact to the increase in gross rents was 0.3%. On a like-for-like basis, the increase in gross rents was in line with the first half performance. The major contributors to growth by country were Denmark, Norway, Sweden, Iberia, and Eastern Europe.
Other rental income and fees
Rents from other activities continued to decrease, reflecting further disposals in the retail asset portfolio, reaching 14.7 million euros. Other rental income amounted to 64.4 million euros in fees.
Total revenues for the first nine months of 2016 reached 972.3 million euros.
Year-to-date, 163 million euros (excluding duties) in assets were sold and 68 million euros are the subject of promissory agreements. More than half of the disposals were shopping centers (essentially in Spain), while some retail assets and one office property were sold.
Total investments completed during the first 9 months amounted to 102.7 million euros, of which 29.2 million euros during the third quarter. This quarterly amount was primarily dedicated to the Group's committed development projects: Val d'Europe (France), Hoog Catharijne (the Netherlands), and Prado (France).
At Val d'Europe, extension work is progressing well and the opening should take place in the first half of 2017. The extension's major architectural feature - the "Grand Palais" style glass roof - has been completed. The handover of shells to tenants has begun and will continue until the end of year. On the leasing side, 85% is now pre-let and the extension should be fully occupied for the opening. Hoog Catharijne's development scheme is also progressing well and on schedule. The opening of the North mile section is expected to occur in the second half of 2017. The new 1,200 unit parking lot was delivered and has been operating since the end of August. Signed leases increased rapidly in the third quarter and now amount to 32%, while 37% are in advanced negotiations. Reinforced by the presence of leading retailers, this unique project in Europe should continue to fuel leasing activity in 2017.
As of September 30, 2016, consolidated net debt stood at 8,992 million euros, a 72 million euro reduction compared with June 30, 2016. In September, Klépierre successfully managed debt transactions to support the Group's strategy of reducing its financing costs while lengthening its average maturity schedule: Klépierre issued a 15-year, 600 million euro bond offering a 1.25% coupon, which is the lowest coupon ever for a long dated (more than 15-year) Euro bond issue by a REIT sector company. In parallel, Klépierre bought back 348.7 million euros worth of two outstanding euro bonds maturing in 2019 and 2021, which offered coupons of 2.75% and 3.25%, respectively.
Thanks to these transactions, the average debt duration was extended to 6.0 years at quarter end. The net cost of debt remained stable at 2.2% at the end of September 2016 and should decline to below 2.0% by 2017 (assuming current market conditions). The level of liquidity (available lines and net cash) remained high at 2.5 billion euros.
In September 2016, Klépierre obtained outstanding extra-financial ratings, recognizing the efficiency of its Good Choices® strategy initiated in 2013 and the effectiveness of the measures implemented in recent years.
Klépierre was ranked second among listed companies in the retail sector worldwide and 10th across all industries by the Global Real Estate Sustainability Benchmark (GRESB); it has once again been awarded a "Green Star" with a score of 93/100. Klépierre reached the 97 th percentile in the World Dow Jones Sustainability Index (DJSI) based on the review by RobecoSAM, which deemed the company the most efficient in the world out of 177 real estate companies for its environmental initiatives. In addition, the Carbon Disclosure Project upgraded Klépierre's rating from 'B' to 'A'.
Overall, Klépierre is considered best-in-class by both GRESB and RobecoSAM for its environmental strategy, the monitoring of its performance, and the disclosure of its results. The quality of the latter was also recognized by the European Public Real Estate Association (EPRA), which granted Klépierre a Sustainability "Gold Award" for the fifth consecutive year - an achievement that only five companies have attained.
FULL-YEAR CASH FLOW GUIDANCE
Supported by its solid performance in the third quarter, Klépierre confirms that, in line with its last announcement, the company expects net current cash flow per share to reach at least 2.25 euros for fiscal year 2016.
 Retailer sales performance for the first nine months of 2016 compared to the same period in 2015. Like-for-like excludes the impact of asset sales and acquisitions. Retailer sales from the Dutch portfolio are not included in these numbers as retailers do not report sales to Klépierre.
 Retailer sales performance for the first nine months of 2016 compared to the same period in 2015. Like-for-like excludes the impact of asset sales and acquisitions. Excluding extensions, this number is fairly unchanged at +1.3%. Retailer sales from the Dutch portfolio are not included in these numbers as retailers do not report sales to Klépierre.
REVENUES FOR THE FIRST NINE MONTHS OF 2016
|TOTAL SHARE||GROUP SHARE|
|in million euros||9 months 2016||9 months 2015||9 months 2016||9 months 2015|
|CEE and Turkey||89.0||89.3||86.7||86.3|
|TOTAL GROSS RENTS||893.1||902.2||768.8||777.2|
|Other rental income||14.7||9.0||12.4||7.0|
Revenues from Equity method Accounted Investments 
 Equity method accounted investments represent a shopping center portfolio with a fair value of 1.6 billion euros as of June 30, 2016. These revenues are not included in Klépierre's scope of consolidation.
QUARTERLY CHANGE IN REVENUES (TOTAL SHARE)
|in million euros (total share)||2016||2015|
|CEE and Turkey||30.0||29.3||29.7||29.8||29.7|
|Total Shopping centers||290.8||290.4||288.1||285.1||290.3|
|TOTAL GROSS RENTS||298.8||298.3||296.0||293.5||298.5|
|Other rental income||5.1||5.8||3.8||3.6||3.6|
Revenues from Equity Method Accounted Investments 
 Equity method accounted investments represent a shopping center portfolio with a fair value of 1.6 billion euros as of June 30, 2016. These revenues are not included in Klépierre's consolidation scope.
CHANGE IN RETAILER  SALES FOR THE FIRST NINE MONTHS OF 2016
|CEE and Turkey||6.2%|
 Retailer sales in Klepierre shopping centers. Like-for-like excludes the impact of asset sales and acquisitions. Retailer sales from the Dutch portfolio are not included in these numbers as retailers do not report sales to Klépierre.
A leading pure play shopping center property company in Europe, Klépierre combines development, rental, property and asset management skills. The company's portfolio is valued at EUR 22.6 billion at June 30, 2016 and comprises large shopping centers in 16 countries in Continental Europe which altogether welcome 1.2 billion visitors per year. Klépierre holds a controlling stake in Steen & Strøm (56.1%), Scandinavia's number one shopping center owner and manager. Klépierre is a French REIT (SIIC) listed on Euronext Paris and included in the CAC 40, EPRA Euro Zone and GPR 250 indexes. It is also included in ethical indexes, such as DJSI World and Europe, FTSE4Good, STOXX® Global ESG Leaders, Euronext Vigeo France 20 and World 120, and Euronext Low Carbon 100 Europe, and is ranked as a Green Star by GRESB (Global Real Estate Sustainability Benchmark). These distinctions underscore the Group's commitment to a proactive sustainable development policy.
For more information, visit our website: www.klepierre.com
February 6, 2017
Full year earnings
(press release after market close)
INVESTOR RELATIONS CONTACTS
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This press release is available on Klépierre's website: www.klepierre.com