Cofinimmo - Annual Financial Report 2015

Property and operational management

The management of all of Cofinimmo’s buildings is almost entirely

in-house in order to ensure a lasting relationship with clients. Asset

and Property Management of the insurance agencies let to the Covéa

Group in France (3.6% of rent received) are subcontracted to the prop-

erty company ATLAND REIM. In Germany, Property Management has

been entrusted to the company Treureal.

Across all of the investment segments, the strategy is implemented

thanks to the expertise of the Project and Property Management

teams, which work exclusively for the tenant clients.

Thanks to its rigorous management, Cofinimmo has been granted

the ISO 14001:2004

certification for the global self-managed office

portfolio.

The company also has in-house commercial, legal, accounting, finan-

cial, human resources and communication teams. All these activities

are based on an SAP-integrated IT system and a quality control and

internal audit division.

Responsible and sustainable

development portfolio

Cofinimmo makes sure to incorporate societal and environmental

aspects into its overall strategy. Beyond its mere legal obligations,

Cofinimmo endeavours to adopt a proactive approach to improve its

physical environment, particularly by reducing its carbon footprint and

favouring social and responsible projects. This approach is concretely

reflected in its relations with its clients, suppliers or partners.

In particular, Cofinimmo has set up a “Sustainability Committee” with

the role of proposing specific measures for improving the company’s

environmental performance.

In 2014, in order to improve its understanding of its stakeholders’ inter-

ests, Cofinimmo began a proactive dialogue with them, leading to the

creation of a materiality matrix. The objective was to identify the most

significant Corporate Social Responsibility (CSR) issues.

For more information, see the “Sustainable development” chapter in this

Annual Financial Report and the 2015 Sustainability Report, available at

www.cofinimmo.com

from 08.04.2016.

ISO 14001:2004 specifies the requirements of an environmental management system enabling an organisation to develop and implement a policy and objectives that take into account

legal requirements and other obligations to which the organisation has subscribed.

Financial and other debts divided by total assets of the consolidated balance sheet.

“THE STRATEGY IS BASED

ON A CONSISTENT FINANCIAL

PROFILE, HIGH PREDICTABILITY

OF CASH FLOWS AND A LOW

EXPOSURE TO MARKET RISKS.”

FINANCIAL STRATEGY

Financial result

The growth of the Group’s profitability and the stable, proactive rela-

tionship that it maintains with clients contribute to its financial result,

to the benefit of the stakeholders.

Maintaining a good occupancy rate, reducing the costs of having

vacant premises and investing in quality projects all allow the Group

to achieve reasonably foreseeable operational performances, which

in turn serve to boost its operational cash flow. In addition, Cofinimmo

guarantees close monitoring of its structural costs.

The economic depreciation on the buildings is not deducted in the

calculation of the current results. It is included implicitly in the result

on the portfolio since the independent real estate experts, taking into

account the age of the buildings and the date of their next renovations,

will incorporate their cost into their valuations. At a time when market

rents are stagnating, this economic depreciation has a greater impact

on the experts’ valuations and, consequently, on Cofinimmo’s result on

the portfolio.

In accordance with the principles governing its status as a “Real Estate

Investment Trust” and the RREC regime, Cofinimmo distributes most of

its current results to its shareholders in the form of dividends. In this

case, the company has no obligation to distribute a dividend for finan-

cial year 2015 (see the “Result Appropriation” chapter of this Annual

Financial Report).

Debt ratio

While its RREC status allows a debt ratio of up to 65% (debt to

total assets), Cofinimmo’s policy, although the banking agreement

authorises it to have a rate of 60%, is to keep its debt ratio

far below

50% (see the “Management of Financial Resources” chapter of this

Annual Financial Report). This choice was not made by chance: in

particular, it takes into account the long remaining term of the leases

in the portfolio and the high real estate returns from its buildings

and is accompanied by prudent interest rate hedging measures.