Half year financial report

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AEDIFICA

Public limited liability company

Public regulated real estate company under Belgian law

Registered office: Rue Belliard 40 (box 11), 1040 Brussels

Enterprise number: 0877.248.501 (RLE Brussels)

(the 'Company')

Half year financial report 2019/2020

  • Rental income increased to €72 million as of 31 December 2019 (+42% compared to 31 December 2018)

- EPRA Earnings* of €46.6 million as of 31 December 2019, (+47% compared to 31 December 2018

    • Confirmed dividend forecast for the current financial year (€3.00 gross per share, an increase of 7%)
    • Real estate portfolio* of €2.6 billion as of 31 December 2019, an increase of more than €315 million compared to 30 June 2019 (+14%)
    • 290 healthcare real estate sites for more than 21,000 residents in four countries:
      • €1,050 million in Belgium (79 sites)
      • €543 million in Germany (67 sites)
      • €402 million in the Netherlands (53 sites)
      • €571 million in the United Kingdom (91 sites)
    • Pipeline of €480 million in acquisitions, construction and renovation projects (excl. Hoivatilat)
    • Weighted average unexpired lease term of 21 years and occupancy rate of 100%
    • 43.8%debt-to-assets ratio as of 31 December 2019
    • In January 2020, Aedifica entered the Finnish and Swedish markets through the acquisition of Hoivatilat Oy, a Finnish healthcare real estate developer and investor; on 30 January 2020, Aedifica controls approx. 98% of Hoivatilat's shares
  • Alternative Performance Measure (APM) in accordance with ESMA (European Securities and Market Authority) guidelines published on
    5 October 2015. For many years, Aedifica has used Alternative Performance Measures according to the guidelines issued by the ESMA in its communication. Some of these APM are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of its results and performance. The APM used in this half year financial report are identified with an asterisk (*). The performance measures which are defined by IFRS standards or by Law are not considered as APM, nor are those which are not based on the consolidated income statement or the balance sheet. The APM are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements, in Note 15 of the Condensed Consolidated Financial Statements below.

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  1. Interim Management Report

1. Summary of the activities since 1 July 2019

Since 1 July 2019, Aedifica has further strengthened its position as a European market reference in listed healthcare real estate. The Group's international expansion continued unabated due to the numerous acquisitions and completions of recent months.

EUROPEAN EXPANSION

Less than a year after entering the UK market in February 2019, Aedifica again demonstrated its international ambitions in early November by launching a public tender offer on the shares of Hoivatilat, a Finnish healthcare real estate investor operating in Finland and Sweden. At the end of January 2020, upon completion of two successful offer periods, Aedifica has acquired more than 98% of the shares and initiated a squeeze-out procedure, which will complete Hoivatilat's integration into the Aedifica group in the coming months. Taking into account Aedifica's track record of international growth and Hoivatilat's successful build-and-hold strategy, this milestone transaction provides an excellent basis for the Group's future growth in Northern Europe and the further anchoring of Aedifica as a European market reference in listed healthcare real estate1.

Aedifica's international ambitions were not only evident in Northern Europe. During the first half of 2019/2020, the Group announced or completed over €380 million of investments in Germany, the Netherlands and the United Kingdom. A total of 30 new healthcare real estate sites were added to the portfolio. In addition, six development projects in the investment pipeline amounting to approx. €34 million were completed.

All the investments made during the first half year led Aedifica's real estate portfolio to grow to 290 sites with a capacity of more than 21,000 residents. The fair value of marketable investment properties (including assets classified as held for sale*) increased by approx. €297 million (+13%) to €2,567 million (compared to €2,270 million at the beginning of the financial year). Taking into account the acquisition of Hoivatilat, Aedifica reached the €3 billion mark in early January 2020. In addition, as at 31 December 2019, the Group has a total investment budget in development projects of approx. €480 million (excl. Hoivatilat; see section 1.2 of the property report below). All of these projects are already pre-let. Taking into account the fair value of the investment properties, the development projects to be carried out over a period of three years and the acquisitions realised and announced since 1 January 2020, Aedifica's total portfolio is expected to reach the €3.65 billion mark.

RECOGNITION ON THE STOCK MARKET

The fact that Aedifica's growth strategy continues to enjoy market confidence was reflected in the evolution of the share price, which rose from €83.90 (30 June 2019) to €113.20 (31 December 2019) during the first half of the year, and even reached a record high of €136.40 in February 2020. Based on the share price on 31 December 2019, the Aedifica share has a premium of 84.3% compared to the net asset value per share excluding changes in fair value of hedging instruments*, or a premium of 89.8% compared to the net asset value per share.

1See section 3.2 below for more information on the Hoivatilat takeover bid.

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The recognition of the investors on the stock market was marked with an award. Aedifica received the BEL Mid Company of the Year 2019 award in January 2020, after the Group recorded the highest relative increase in market capitalisation for the year 2019 among the companies included in the BEL Mid Index.

EXCELLENT RESULTS

Aedifica focuses not only on investments and growth but also on managing its existing real estate assets. The result of this effort is reflected in excellent rental incomes (+42%). The EPRA Earnings* increased by 47%, reaching €46.6 million (31 December 2018: €31.7 million), i.e. €1.89 per share (31 December 2018: €1.74 per share), an increase of 9%. Aedifica's total profit amounts to €69 million (compared to €39 million as at 31 December 2018).

FUTURE GROWTH

During the past six months, Aedifica has proven that it can achieve its growth ambitions, and the Group intends to continue along this path during the remaining months of the financial year. Various new investment opportunities are being analysed. Even without taking into account new investments, the Group's future growth is assured by the extensive pipeline of investment projects. Through the combination of new investments and existing agreements on the acquisition, renovation, expansion, redevelopment and construction of numerous sites, Aedifica can build up a portfolio of high-quality buildings that offer attractive net returns and further strengthen its position as a European market reference in listed healthcare real estate.

2. Introduction

Aedifica is a Belgian listed company that specialises in investments in European healthcare real estate, in particular housing for seniors with care needs.

Aedifica has established itself in recent years as a leader in the European listed real estate sector and has the ambition to further expand this position in the coming years.

By investing in quality buildings that generate recurring and indexed rental income and offer potential for capital gains, Aedifica aims to offer its shareholders a reliable and sustainable real estate investment with an attractive yield.

Aedifica has been quoted on Euronext Brussels since 2006. Since November 2019, Aedifica is also listed on Euronext Amsterdam via a secondary listing.

This interim Board of Directors' Report is an update of the Board of Directors' Report issued on 30 June 2019 as part of the 2018/2019 Annual Financial Report (which contains a glossary listing the definitions of the main technical terms used). Only the significant changes that have taken place since publication of the 2018/2019 Annual Financial Report are presented here.

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3. Important events

3.1. Investments and completions during the first half

During the first half of the 2019/2020 financial year, Aedifica carried out or announced the acquisition of 30 healthcare sites, representing a total capacity of more than 2,000 residents. The total volume of investments that were announced and carried out amounted to more than €380 million as of 31 December 2019.

Name

Type

Location

Date

Investment

Pipeline

Gross

Completion

Lease

Operator

(€ million) 1

(€ million) 2

rental

yield

(approx. %)

Germany

125

150

Zur alten Linde

Acquisition 5

Rabenau

8/07/2019

18

-

6%

-

30 years - NN

EMVIA Living

Seniorenwohnpark Hartha

Tharandt

Haus Steinbachhof

Acquisition 5

Chemnitz

9/07/2019

23

-

6%

-

19 years - NN

Casa Reha 6

Seniorenhaus Wiederitzsch

Leipzig

24 years - NN

Convivo

Seniorenhaus

Acquisition

Wurzen

21/08/2019

-

7

5.5%

Q3 2021

25 years - NN

Seniorhenhaus

Lessingstrasse

Lessingstrasse

Wohnstif am Weinberg

Acquisition &

Kassel

29/10/2019

-

20

5.5%

Over the next

30 years - NN

Cosiq

renovation

3 years

Haus Wellengrund

Acquisition &

Stemwede

1/11/2019

3

8

6%

Q3 2020

30 years - NN

Argentum

redevelopment

BAVARIA Senioren- und

Acquisition &

Sulzbach-

6/11/2019

-

6

6%

Over the next

30 years - NN

Auriscare

Pflegeheim

renovation

Rosenberg

4 years

Sonnenhaus Ramsloh

Acquisition &

Ramsloh

17/12/2019

19

16

5%

Q3 2021

30 years - NN

Sonnenhaus

Johanniter-Haus

construction

Lüdenscheid

(Quartier am

Saterland

Lüdenscheid

(Quartier am

Bremervörde

Rathausmarkt)

Die Johanniter

Quartier am Rathausmarkt

Rathausmarkt)

Specht Gruppe

Seniorenquartier Bremen

Acquisition &

Bremen

17/12/2019

5

58

>5%

Q3 2021

30 years -

EMVIA Living

Seniorenquartier Weyhe

development 3

Weyhe

NNN

Seniorenquartier

Langwedel

Langwedel

Sehnde

Seniorenquartier Sehnde

Vitanas portfolio

Acquisition &

Berlin

18/12/2019

57

35

>5%

2024

WAULT 23

Vitanas

(7 sites)

renovation

Plön

years - NN

Wankendorf

Ueckemünde

Netherlands

63

19

Rumah Saya

Acquisition

Appeldoorn

9/07/2019

10

-

6%

-

15 years -

Stichting

NNN

Nusantara Zorg

Residentie La Tour

Acquisition &

Roermond

9/07/2019

4

8

6%

2020

20 years -

Ontzorgd Wonen

Villa Casimir

redevelopment

NNN

Groep

Vinea Domini

Acquisition &

Witmarsum

7/08/2019

1

3

6%

2020

25 years -

Ontzorgd Wonen

redevelopment

NNN

Groep

Woonconcept portfolio

Acquisition

Hoogeveen

28/08/2019

44

-

6.5%

-

WAULT 26

NNCZ

(5 sites)

years - NN

Natatorium

Extension

Velp

28/11/2019

2

3

6.5%

Q4 2021

20 years -

Stepping Stones

NNN

Home & Care 6

Villa Nuova

Construction

Vorden

29/11/2019

2

5

5.5%

Q1 2021

20 years -

Stepping Stones

NNN

Home & Care 6

United Kingdom 4

15

12

Bessingby Hall, York

Extension of

United

18/09/2019

-

12

7%

2020

NNN

Burlington Care

House, The Sycamores,

9 sites

Kingdom

MMCG

Southands, The Elms &

Oakwood, Blenheim,

Coplands, Eltandia Hall and

Heritage

Hazel End Care home

Acquisition

Bishop's

19/12/2019

15

-

6%

-

35 years -

Halcyon Care

Stortford

NNN

Homes

Total

203

181

  1. The amounts in this column include the contractual value of the plots of land and the existing buildings. These investments generate rental income (sites under construction also generate limited rental income, in particular for the plots of land that have already been acquired).
  2. The amounts in this column are the budgets for development projects that Aedifica will finance. Development projects are alwayspre-let and are listed in the pipeline of projects and renovations (see section 1.2 of the property report on page 31).
  3. Specht Gruppe phase III.
  4. Amounts in £ were converted into € based on the exchange rate of the transaction date.
  5. These acquisitions have already been announced during the 2018/2019 financial year.
  6. Korian group.

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In the first half of the financial year, 6 development projects in the pipeline were delivered upon completion of the works. The total budget of all projects completed during the first half year amounts to approximately €34 million.

Name

Type

Location

Date

Investment

Gross rental

Lease

Operator

(€ million) 1

yield

(approx. %)

Belgium

3

't Hoge III

Extension

Kortrijk

28/11/2019

2

6%

27 years - NNN

Senior Living Group 2

Plantijn III

Renovation

Kapellen

17/12/2019

1

6%

27 years - NNN

Armonea 3

Germany

27

Seniorenquartier Schwerin

Development

Schwerin

15/08/2019

11

5.5%

30 years - NN

EMVIA Living

Seniorenzentrum Weimar

Acquisition

Weimar

1/10/2019

16

6%

25 years - NN

Azurit Rohr

United Kingdom

4

Cowdray Club

Renovation

Aberdeen

23/08/2019

3

7%

25 years - NNN

Renaissance

MMCG projects

Renovation of

United

31/12/2019

1

7.5%

WAULT 23 years -

Maria Mallaband Care

9 sites

Kingdom

NNN

Group

Total

34

  1. For completed development projects, this amount includes only the budget for the works that were carried out (excluding the contractual value of the plot of land).
  2. Korian group.
  3. Colisée group.

3.2. Investments and completions after 31 December 2019

  • Acquisitions in Germany and the United Kingdom

After 31 December 2019, Aedifica has completed the acquisition of 7 healthcare sites and the construction of a new care campus in Germany. In addition, Aedifica has completed the acquisition of two sites in Germany, which was already announced in the first half of the financial year. The total amount of investments that have been carried out amount to more than €100 million.

Name

Type

Location

Date

Investment

Pipeline

Gross

Completion

Lease

Operator

(€ million) 1

(€ million) 2

rental

yield

(approx. %)

Germany

36

17

BAVARIA Senioren-

Acquisition &

Sulzbach-

1/01/2020

5

1

6%

Over the next

30 years - NN

Auriscare

und Pflegeheim 4

renovation

Rosenberg

4 years

Seniorenquartier

Development

Kaltenkirchen

16/01/2020

15

-

5.5%

-

30 years - NN

EMVIA Living

Kaltenkirchen

Wohnstif am Weinberg 4

Acquisition &

Kassel

17/01/2020

10

10

5.5%

Over the next

30 years - NN

Cosiq

renovation

3 years

Am Parnassturm 5

Acquisition &

Plön

12/02/2020

6.5

5.5

>5%

2024

WAULT 23

Vitanas

Am Marktplatz 5

renovation

Wankendorf

years - NN

United Kingdom 3

71

-

The Grange

Acquisition

Southall

13/01/2020

71

-

6%

-

30 years -

Bondcare

Deepdene

Dorking

NNN

Maria Mallaband

Princess Lodge

Swindon

Maria Mallaband

The Hawthorns

Southampton

Bondcare

Minster Grange

York

Maria Mallaband

Total

107

17

  1. The amounts in this column include the contractual value of the plots of land and the existing buildings. These investments generate rental income (sites under construction also generate limited rental income, in particular for the plots of land that have already been acquired).
  2. The amounts in this column are the budgets for development projects that Aedifica will finance. Development projects are alwayspre-let and are listed in the pipeline of projects and renovations (see section 1.2 of the property report on page 31).
  3. Amounts in £ were converted into € based on the exchange rate of the transaction date.
  4. These acquisitions are included as acquisitions subject to outstanding conditions in the pipeline of projects and renovations as of 31 December 2019 (see section 1.2 of the property report on page 31).
  5. These sites are part of the Vitanas portfolio, of which the 5 other sites were already acquired on 18 December 2019.

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  • Aedifica and Hoivatilat are joining forces in Northern Europe2

In November 2019, Aedifica (through its Finnish subsidiary Aureit Holding Oy) launched a voluntary public tender offer on all shares of Hoivatilat Oy, a Finnish healthcare real estate investor operating in Finland and Sweden. At the end of January 2020, Aedifica completed its tender offer on Hoivatilat, bringing the Group into the Northern European market and adding the fifth and sixth countries to its portfolio. Aedifica controls approx. 98.2% of all issued and outstanding shares and voting rights in Hoivatilat. Aedifica has initiated a squeeze-out procedure to acquire the remaining Hoivatilat shares and to de-list the Hoivatilat shares on Nasdaq Helsinki. It is expected that this will be finalised in the course of the coming months.

Hoivatilat is an attractive partner to enter the Northern European healthcare real estate market with a high-quality,purpose-built portfolio, a substantial pipeline of development projects and a very experienced management team. The company has a build-and-hold strategy and thus itself develops the care buildings that are rented out. This transaction offers an excellent opportunity for Hoivatilat to continue its growth strategy, both in Finland and in the other countries of Northern Europe.

On 30 September 2019, Hoivatilat's completed portfolio included 148 care buildings (rest homes, specialised residential care centres and children day-care centres) in Finland, amounting to approx. €430 million. In addition, there is a pipeline of 40 development projects in Finland and Sweden amounting to approx. €147 million.

Aedifica has offered a price of €16.00 per Hoivatilat share, which implies an enterprise value of approx. €630 million on 30 September 2019. Aedifica financed this transaction through existing and new bank financing (see section 3.4 below).

Hoivatilat publishes its annual results on 21 February 2020.

3.3. Disposals

  • Disposal of De Statenhof Hoogbouw in Leiden (NL)

On 13 December 2019, the De Statenhof Hoogbouw building located in Leiden (Netherlands) was sold for approx. €6.5 million.

3.4. Management of financial resources

During the second quarter of the 2019/2020 financial year, Aedifica established new long-term financing arrangements for a total amount of €90 million that will mature between 2024 and 2026.

In addition, a bridge facility was concluded at the end of October 2019 to finance the acquisition of Hoivatilat Oy (see section 3.2 above) and to refinance the bridge facility that was concluded for the acquisition of the healthcare real estate portfolio in the United Kingdom. This bridge facility has a maturity of 12 months and comprises two tranches of €300 million and £150 million, respectively. The tranche in British pound was used at the end of November 2019 to repay the old bridge facility of the same amount. Following the successful tender offer on the shares of Hoivatilat, the tranche in euro was used on 9 January 2020 to purchase the shares offered during the initial offer period ending on 3 January 2020.

2See press releases of 4 November 2019, 27 November 2019, 5 December 2019 and 30 January 2020 for more information.

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As a result, almost €570 million in financing arrangements were established during the first half of the 2019/2020 financial year.

The short-term treasury notes programme, which was increased from €150 million to €225 million at the end of June 2019, is fully subscribed. The short-term treasury notes are fully hedged by the available funds on confirmed long-term credit lines.

Taking these elements into account, the maturity dates of the financial debts with Aedifica's seventeen credit providers as of 31 December 2019 are as follows:

Financial debt

Lines

Utilisation

of which

(in € million) 1

treasury

notes

2019/2020

206

206

206

2020/2021

554

254

20

2021/2022

171

76

2022/2023

205

75

2023/2024

225

155

2024/2025

400

224

>2025/2026

290

175

15

Total as of 31 December 2019

2,050

1,165

240

Weighted average maturity (in years) 2

4.5

4.6

  1. Amounts in £ were converted into € based on the exchange rate of 31 December 2019 (1.1754 £/€).
  2. Without regard toshort-term treasury notes and the bridge facility.

Without regard to short-term financing (short-term treasury notes and bridge facility), the weighted average maturity of the financial debts as of 31 December 2019 is 4.6 years.

3.5. Other events

  • Aedifica strengthens its teams in the Netherlands and Germany with a country manager

In order to sustain its growth in the Dutch and German markets, Aedifica strengthened its teams in both countries with country managers. In this role, Eric Scheijgrond supervises the management of the portfolio and the Group's growth in the Dutch market since 1 September 2019. Eric has more than 15 years of experience in healthcare real estate. Since 2014, he worked as Associate Director Healthcare at Cushman & Wakefield Netherlands (Amsterdam), where he was responsible for healthcare real estate investments while being in touch with various players within the Dutch healthcare real estate sector. Previously, he worked for more than 7 years as real estate manager for the Parnassia Group, a Dutch healthcare foundation

The German team will be strengthened by Heinz Beekmann as country manager. In this role, Heinz will supervise the management of the German portfolio and the Group's growth in the German market, and lead the German team in place as from 15 April 2020. Heinz has several years of experience in the healthcare sector: he worked within the Armonea Group as CEO of the German branch and, in May 2019, he also took on the position of CEO Armonea Belgium. He was also member of the non- executive board of Lebenshilfe Syke, a non-profit organisation for persons with disabilities that operates residential homes, family support services and schools.

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  • Aedifica included in the Stoxx Europe 600 Index

Since 23 September 2019, Aedifica is included in the Stoxx Europe 600 Index. Aedifica's inclusion in this index anchors the Group once again as a market reference in listed European healthcare real estate.

  • Aedifica receives awards for its financial communication

In September 2019, Aedifica received a 5thconsecutive 'EPRA BPR Gold Award' for its Annual Financial Report (financial year 2017/2018), keeping the Company at the top of the 175 real estate companies assessed by EPRA, the European association of listed real estate companies. In addition, Aedifica's first-ever sustainability report relating to its corporate social responsibility efforts (published in May 2019) received the 'EPRA sBPR Silver Award' and the 'EPRA sBPR Most Improved Award'. Finally, in October 2019, Aedifica received a special award for 'Best Communication on Specific Risk Factors' from the Belgian Association of Financial Analysts (BVFA/ABAF).

  • Aedifica starts trading on Euronext Amsterdam

On 7 November 2019, the Aedifica share started trading on Euronext Amsterdam via a secondary listing. Through this secondary listing, Aedifica aims to further increase its visibility in the Netherlands as pure play investor in European healthcare real estate. The listing will also provide Dutch investors with direct access to the Company's capital, giving Aedifica the opportunity to further expand and diversify its shareholder base. Aedifica has not issued any new shares as part of the secondary listing and will retain its primary listing on Euronext Brussels. Aedifica's shares are collected and administered in the central order book of the Euronext group.

  • Aedifica's CEO nominated for 'Trends Manager of the Year 2019'

For the third consecutive year, Stefaan Gielens (Aedifica's CEO) was one of the ten nominees to become 'Trends Manager of the Year 2019'. The nomination is an acknowledgement of Aedifica's international growth over the past year and its long-term strategy as a healthcare real estate investor.

  • Aedifica wins the BEL Mid Company of the Year 2019 award

On 23 January 2020, Aedifica won the BEL Mid Company of the Year 2019 award after the Group recorded the highest relative increase in market capitalisation for the year 2019 among the companies included in the BEL Mid Index.

  • Korian takes over the operation of 12 Dutch Aedifica sites

In early February 2020, the Korian group announced that it would take over the operation of 12 Aedifica sites in the Netherlands from Het Gouden Hart and Ontzorgd Wonen Groep. It concerns 3 existing Aedifica sites and 1 project that are operated by Het Gouden Hart3, and 5 existing Aedifica sites and 3 projects that are operated by Ontzorgd Wonen Groep4. Taking into account this acquisition, Korian's share in the Aedifica portfolio would amount to 17% as of 31 December 2019.

  1. Existing sites: HGH Driebergen, HGH Kampen and HGH Leersum; project: HGH Harderwijk.
  2. Existing sites: De Statenhof, Kening State, Residentie Boldershof, Zorghuis Smakt and Zorgresidentie Mariëndaal; projects: Sorghuys Tilburg, Villa Casimir and Vinea Domini.

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4. Portfolio as of 31 December 2019

During the first half of the current financial year, Aedifica increased its portfolio of marketable investment properties (including assets classified as held for sale*)by approx. €297 million, from

  1. fair value of €2,270 million to €2,567 million (€2,636 million for the investment properties including assets classified as held for sale* and development projects). This 13% growth comes mainly from net acquisitions (see section 3.1 above), completion of development projects (see section 3.1 above) and changes in the fair value of marketable investment properties recognised in income (+27.1 million, or +1.1% over the first half). The fair value of marketable investment properties, as assessed by independent valuation experts, is broken down as follows:
    • Belgium: +€17.9 million (+1.7%);
    • Germany: +€8.7 million (+1.6%);
    • Netherlands: +€1.9 million (+0.5%);
    • United Kingdom:-€1.4 million (-0.3%).

As of 31 December 2019, Aedifica's portfolio has 290 marketable investment properties (including assets classified as held for sale*), with a capacity of more than 21,000 residents and a total surface area of approx. 1,379,000 m2.

16%

Flanders

29%

Brussels

Wallonia

United Kingdom

21%

Germany

Netherlands

6%

6%

1%

Healthcare buildings for

care-dependent seniors

17%

Healthcare buildings for

7%

independent seniors with

on-demand services

Mixed-use healthcare

buildings

75%

22%

Healthcare buildings for target groups other than seniors

Geographical breakdown

Breakdown by healthcare segment

(in terms of fair value)

(in terms of fair value)

The overall occupancy rate5of the total portfolio reached 100% as of 31 December 2019.

The weighted average unexpired lease term(WAULT) for all buildings in the Company's portfolio is 21 years.

5Rate calculated according to the EPRA methodology.

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5. Gross yield by segment

The table below presents the portfolio's gross yield by country, compared to the fair value of the marketable investment properties. As the portfolio's gross yield was communicated by segment of activity until last year, a table is included below in which the gross yield is presented in accordance with the previous method, so that the gross yields can be compared in a historical way.

In general, the gross yield amounts to 5.9%, this is unchanged as compared to 30 June 2019.

(x1.000€)

Belgium

Germany

Netherlands

United

Marketable

Development

Investment

Kingdom

investment

projects

properties

properties incl.

incl. assets

assets classified

classified as

as held for sale*

held for sale*

Fair value

1.050.373

543.520

401.885

571.140

2.566.918

68.818

2.635.736

Annual contractual

57.200

31.404

22.930

39.497

151.032

-

-

rents

Gross yield (%) °°

5,4%

5,8%

5,7%

6,9%

5,9%

-

-

31 December 2019

(x €1,000)

Healthcare

Apartment

Hotels

Marketable investment

Development

Investment

real estate

buildings

properties incl. assets

projects

properties incl.

classified as held for sale*

assets classified

as held for sale*

Fair value

2.566.918

-

-

2.566.918

68.818

2.635.736

Annual contractual

151.032

-

-

151.032

-

-

rents

Gross yield (%) °°

5,9%

-

-

5,9%

-

-

30 June 2019

(x €1,000)

Healthcare

Apartment

Hotels

Marketable investment

Development

Investment

real estate

buildings

properties incl. assets

projects

properties incl.

classified as held for sale*

assets classified

as held for sale*

Fair value

2.269.744

0

0

2.269.744

51.205

2.320.949

Annual contractual

133.739

0

°

0

133.739

-

-

rents

Gross yield (%) °°

5,9%

0,0%

0,0%

5,9%

-

-

31 December 2018

(x €1,000)

Healthcare

Apartment

Hotels

Marketable investment

Development

Investment

real estate

buildings

properties incl. assets

projects

properties incl.

classified as held for sale*

assets classified

as held for sale*

Fair value

1.624.647

215.438

66.710

1.906.795

57.334

1.964.129

Annual contractual

91.640

10.535

°

4.214

106.389

-

-

rents

Gross yield (%) °°

5,6%

4,8%

6,3%

5,6%

-

-

° The amounts related to the furnished apartments correspond to the annualised rental income excl. VAT.

  • Based on the fair value(re-assessed every three months). For healthcare real estate, the gross yield and the net yield are generally equal
    ('triple net' contracts), with the operating charges, the maintenance costs and the rents on empty spaces related to the operations generally being supported by the operator in Belgium, the United Kingdom and (often) the Netherlands. In Germany (and the Netherlands, in some cases), the net yield is generally lower than the gross yield, with certain charges remaining at the responsibility of the owner, such as the repair and maintenance of the roof, structure and facades of the building ('double net' contacts).

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6. Analysis of the half year consolidated accounts

The Condensed Consolidated Financial Statements, prepared in accordance with IAS 34, are presented on page 44 of this half year financial report. The following sections of the interim Board of Directors' Report analyse the financial statements using an analytical framework that is aligned with the Company's internal reporting structure.

6.1. Consolidated results6

Consolidated income statement - analytical format

31 December 2019

31 December 2018

(x €1,000)

Rental income

71,970

50,798

Rental-related charges

-591

8

Net rental income

71,378

50,806

Operating charges*

-11,311

-8,671

Operating result before result on portfolio

60,068

42,135

EBIT margin* (%)

84%

83%

Financial result excl. changes in fair value*

-10,432

-8,634

Corporate tax

-3,827

-1,379

Share in the profit or loss of associates and joint ventures accounted for using

770

0

the equity method in respect of EPRA Earnings*

Non-controlling interests in respect of EPRA Earnings*

-29

-383

EPRA Earnings* (owners of the parent)

46,550

31,739

Denominator (IAS 33)

24,601,110

18,255,720

EPRA Earnings* (owners of the parent) per share (€/share)

1.89

1.74

EPRA Earnings*

46,550

31,739

Changes in fair value of financial assets and liabilities

3,418

-187

Changes in fair value of investment properties

19,980

13,095

Gains and losses on disposals of investment properties

1,268

-70

Negative goodwill / goodwill impairment

0

-132

Deferred taxes in respect of EPRA adjustments

-3,770

-1,845

Share in the profit or loss of associates and joint ventures accounted for using

1,827

0

the equity method in respect of EPRA adjustments

Non-controlling interests in respect of EPRA adjustments

-99

-3,833

Roundings

0

1

Profit (owners of the parent)

69,174

38,768

Denominator (IAS 33)

24,601,110

18,255,720

Earnings per share (owners of the parent - IAS 33 - €/share)

2.81

2.12

The consolidated turnover (consolidated rental income) for the first half of the current financial year amounts to €72.0 million, an increase of 42% as compared to the same period of the previous financial year.

6The consolidated income statement covers the 6-month period from 1 July 2019 to 31 December 2019. Acquisitions are accounted for on the date of the effective transfer of control. Therefore, these operations present different impacts on the income statement, depending on whether they took place at the beginning, during, or at the end of the period.

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The consolidated rental income by country is presented in the following table:

Consolidated rental income

31 December 2019

31 December 2018

Var. (%) on a

Var. (%)

(x €1,000)

like-for-like

basis*

Belgium

28,454

33,792

+1.7%

-15.8%

Germany

13,549

10,000

+0.9%

+35.5%

Netherlands

10,910

7,006

+2.0%

+55.7%

United Kingdom

19,057

0

-

+100%

Total

71,970

50,798

+1.6%

+41.7%

The increase in consolidated rental income demonstrates the relevance of Aedifica's investment strategy and can be explained by the large number of sites that Aedifica has added to its portfolio over the past year, through the completion of new acquisitions and the delivery of development projects from the pipeline.

The decrease of rental income in Belgium is explained by the divestment of the non-strategic parts of the portfolio (apartment buildings and hotels), which was completed at the end of the previous financial year. As all these non-strategic buildings are located in Belgium, their divestment only has an impact on Belgian rental income. On a like-for-like basis*, however, Belgian rental income has increased (+1.7%).

After deducting rental-relatedcharges(€0.5 million), in particular a write-down on bad debtors, the net rental incomeamounts to €71.4 million (+40% as compared to 31 December 2018).

The property resultis €71.4 million (31 December 2018: €50.3 million). This result, less other direct

costs, leads to a property operating resultof €69.1 million (31 December 2018: €48.2 million). This

implies an operating margin* of 97% (31 December 2018: 95%).

After deducting overheads of €9.0 million (31 December 2018: €6.1 million) and taking into account other operating income and charges, the operating result before result on the portfoliohas increased by 43% to reach €60.1 million (31 December 2018: €42.1 million). This result represents an EBIT margin*of 84% (31 December 2018: 83%).

The share of each segment in the operating result before result on the portfolio (segment result according to IFRS 8) is detailed in Note 3 of the Condensed Consolidated Financial Statements.

Taking into account the cash flows generated by hedging instruments, Aedifica's net interest chargesamount to €8.6 million (31 December 2018: €7.5 million). The average effective interest rate before capitalised interests* including commitment feesis 2.0%, lower than during the first half of the financial year 2018/2019 (2.2%). Taking into account other income and charges of a financial nature, and excluding the net impact of the revaluation of hedging instruments to their fair value (non-cash movements accounted for in accordance with IAS 39 are not included in the EPRA Earnings* as explained below), the financial result excluding changes in fair value*represents a net charge of €10.4 million (31 December 2018: €8.6 million).

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Corporate taxesare composed of current taxes, deferred taxes and exit tax. In conformity with the special tax system of RRECs, the taxes due (31 December 2019: €3.8 million; 31 December 2018: €1.4 million) consist primarily of Belgian tax on Aedifica's non-deductible expenditures, tax generated abroad by Aedifica and tax on the result of consolidated subsidiaries. In the Dutch subsidiary (Aedifica Nederland BV), for the sake of caution it was decided to opt for a common law tax burden in the result, notwithstanding the fact that the subsidiary still has a claim to the application of the fiscally transparent regime of a 'Fiscale Beleggingsinstelling' ('Tax Investment Institution'). Deferred taxes are described below.

Theshare in the result of associates and joint ventures includes the result of the participation in Immobe NV, which has been consolidated since 31 March 2019 using the equity method.

Theshare in the result of the associates and joint ventures and theminority interests are divided, as described below, into a portion of EPRA Earnings* (€0.8 million and €0.0 million, respectively) on the one hand, andnon-cashflow elements (€1.8 million and €0.1 million, respectively) on the other.

EPRA Earnings*(see Note 15.7.1.) reached €46.6 million for this half year (31 December 2018: €31.7 million), or €1.89 per share, based on the weighted average number of shares outstanding (31 December 2018: €1.74 per share).

The income statement also includes elements with no monetary impact (that is to say, non-cash) that vary as a function of external market parameters. These consist of changes in the fair value of investment properties (accounted for in accordance with IAS 40), changes in the fair value of financial assets and liabilities (accounted for in accordance with IAS 39), other results on portfolio, exit tax and deferred taxes (arising from IAS 40):

  • Over the first six months of the financial year,changes in the fair value of marketable

investment properties7taken into income amounted to +1.1%, or +€27.1 million (31 December 2018: +1.2% or +€23.2 million). A change in fair value of -€7.1 million was recorded on development projects (31 December 2018: -€10.1 million). The combined change in fair value for marketable investment properties and development projects represents an increase of €20.0 million for the half year (31 December 2018: €13.1 million).

  • In order to limit the interest rate risk stemming from the financing of its investments, Aedifica has put in placelong-term hedges8which allow for the conversion of variable-rate debt to fixed- rate debt, or to capped-rate debt. On 31 December 2019, 92% of the drawings in euros on these variable-rate credit facilities were covered by hedging instruments (swaps and caps). In addition, forward contracts were signed during the financial year to hedge the exchange rate risk of the portfolio in the United Kingdom. These financial instruments are detailed in Note 7 of the attached Condensed Consolidated Financial Statements. Moreover, the financial instruments also reflect put options granted to certain minority shareholders which are the subject of appraisal at fair value. Changes in the fair value of financial assets and liabilitiestaken into

the income statement as of

31 December 2019 represent an income of €3.4 million

(31 December 2018: income of

€0.2 million).

7That change corresponds to the sum of the positive and negative variations of the fair value of the buildings as of 30 June 2019

or the time of entry of new buildings in the portfolio, and the fair value estimated by the valuation experts as of 31 December 2019.

8Long term hedges permit a reduction in the interest rate risk on investment financing that generates revenues over the long term, such as long leases. The weighted average unexpired lease term of the leases is 21 years.

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  • Deferred taxes(charge of €3.7 million as of 31 December 2019 as compared to the charge of €1.3 million on 31 December 2018) arose from the recognition at fair value of buildings located abroad, in conformity with IAS 40. These deferred taxes (with no monetary impact, that is to say, non-cash) are excluded from the EPRA Earnings*.
  • Exit tax9(charge of €0.1 million as of 31 December 2018, compared to a charge of €0.5 million as of 31 December 2018) corresponds to the variation between the estimated exit tax at the moment of acquisition of companies and the estimated exit tax at their anticipated merger dates.

Taking into account the non-monetary elements described above, the profit (owners of the parent)amounts to €69.2 million (31 December 2018: €38.8 million). The basic earnings per share (as defined by IAS 33) is €2.81 (31 December 2018: €2.12).

9In 2017, exit tax was presented under changes in fair value of investment properties. This change of presentation had no impact on either net profit or EPRA Earnings*.

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6.2. Consolidated balance sheet

Consolidated balance sheet

31 December 2019

30 June 2019

(x €1,000)

Investment properties including assets classified as held for sale*

2,635,736

2,320,949

Other assets included in debt-to-assets ratio

92,063

65,061

Other assets

1,057

117

Total assets

2,728,856

2,386,127

Equity

Equity excl. changes in fair value of hedging instruments*

1,511,298

1,480,082

Effect of the changes in fair value of hedging instruments

-44,156

-50,533

Non-controlling interests

4,450

103

Equity

1,471,592

1,429,652

Liabilities included in debt-to-assets ratio

1,194,808

888,158

Other liabilities

62,456

68,317

Total equity and liabilities

2,728,856

2,386,127

Debt-to-assets ratio (%)

43.8%

37.2%

As of 31 December 2019,investment properties including assets classified as held for sale* represent 97% (30 June 2019: 97%) of the assets recognised on Aedifica's balance sheet, valued in accordance with IAS 4010at €2,636 million (30 June 2019: €2,321 million). This heading includes:

-Marketable investment properties including assets classified as held for sale*

(31 December 2019: €2,567 million; 30 June 2019: €2,270 million), increase in the amount of €297 million. The net growth in the fair value of marketable investment properties* is attributed primarily to €231 million from investment operations (see section 3.1 above), to -€5 million from divestment operations (see section 3.3 above), to €16 million from the completion of development projects (see section 3.1 above), to €28 million from exchange rate differences and to €27 million from the change in the fair value of marketable investment properties.

  • Development projects(31 December 2019: €68 million; 30 June 2019: €51 million), consist primarily of investment properties under construction or renovation. They are part of a multi- annual investment budget (see section 1.2 of the property report).

The item 'Other assets included in debt-to-assets ratio' includes the shares of Hoivatilat Oy held by Aureit Holding amounting to €19 million and holdings in associated companies and joint ventures. This includes the remaining stake of 25% in Immobe NV, which amounts to €35.9 million as of 31 December 2019 (30 June 2019: €33.9 million).

Theother assets included in the debt-to-assets ratio represent 3% of the total balance sheet (30 June 2019: 3%).

10The investment properties are represented at their fair value as determined by the valuation experts (Cushman & Wakefield Belgium NV/SA, Deloitte Consulting & Advisory CVBA/SCRL, CBRE GmbH, Jones Lang LaSalle SE, DTZ Zadelhoff VOF, Savills Consultancy BV and Cushman & Wakefield Debenham Tie Leung Ltd).

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Since Aedifica's incorporation, its capital has increased as a result of various real estate activities (contributions, mergers, etc.) and the capital increases in cash in October 2010, December 2012, June 2015, March 2017 and May 2019. As of 31 December 201911, the Company's capital amounts to €649 million (30 June 2019: €649 million). Equity(also called net assets), which represents Aedifica's intrinsic net value and takes into account the fair value of its investment portfolio, amounts to:

- €1,516 million excluding the effect of the changes in fair value of hedging instruments* (30 June 2019: €1,480 million, including the €54 million dividend distributed in October 2019);

  • or €1,472 million taking into account the effect of the changes in fair value of hedging instruments (30 June 2019: €1,430 million, including the €54 million dividend distributed in October 2019).

As of 31 December 2019, liabilities included in thedebt-to-assetsratio(as defined in the Royal Decree of 13 July 2014 on RRECs) reached €1,195 million (30 June 2019: €888 million). Of this amount, €1,164 million (30 June 2019: €859 million) is effectively drawn on the Company's credit lines. Aedifica's consolidated debt-to-assetsratioamounts to 43.8% (30 June 2019: 37.2%). As the maximum debt-to- assets ratio permitted for Belgian RRECs is set at 65% of total assets amounts, Aedifica currently still has a consolidated debt capacity of €578 million in constant assets (i.e., excluding growth in the real estate portfolio) and €1,652 million in variable assets (i.e., taking into account growth in the real estate portfolio). Conversely, if all other parameters remain the same, the current balance sheet structure can absorb a 34% reduction in the fair value of the properties before reaching the maximum debt-to-assets ratio. Given Aedifica's existing bank commitments, which further limit the maximum debt-to-assets ratio to 60%, the available headroom amounts to €442 million in constant assets, €1,105 million in variable assets, and -28% in the fair value of investment properties.

Other liabilitiesof €62 million (30 June 2019: €47 million) represent primarily the fair value of hedging

instruments (31 December 2019: €43 million; 30 June 2019: €48 million).

11IFRS requires that the costs incurred to raise capital are recognised as a decrease in the capital reserves.

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6.3. Net asset value per share

The table below details the change in the net asset value per share.

Excluding the non-monetary effects (that is to say, non-cash) of the changes in fair value of hedging instruments12and after accounting for the distribution of the 2018/2019 dividend in October 201913, the net asset value per share based on the fair value of investment properties is €61.43 as of 31 December 2019 (30 June 2019: €57.96 per share).

Net asset value per share (in €)

31 December 2019

30 June 2019

Net asset value after deduction of dividend 2018/2019, excl. changes in fair

61.43

57.96

value of hedging instruments*

Effect of the changes in fair value of hedging instruments

-1.79

-2.05

Net asset value after deduction of dividend 2018/2019

59.64

55.90

Number of share outstanding (excl. treasury shares)

24,601,158

24,601,158

Number of shares

31 December 2019

30 June 2019

Number of shares outstanding°

24,601,158

24,601,158

Total number of shares

24,601,158

24,601,158

Total number of shares on the stock market

24,601,158

24,601,158

Weighted average number of shares outstanding (IAS 33)

24,601,110

19,274,471

Number of dividend rights°°

24,601,158

19,365,386

° After deduction of the treasury shares.

°° Based on the rights to the dividend for the shares issued during the year.

  1. The effect of the changes in fair value of hedging instruments of-€1.79 per share as of 31 December 2019 is the impact in equity of the fair value of hedging instruments, which is negative for €44 million, mainly booked in the liabilities on the balance sheet.
  2. Recall that IFRS requires the presentation of the annual accounts before appropriation. The net asset value of €60.16 per share as of 30 June 2019 (as published in the 2018/2019 Annual Financial Report) thus included the dividend distributed in October 2019, and should now be adjusted by €2.20 per share in order to compare with the value as of 31 December 2019. This amount corresponds to the amount of the total dividend (approx. €54 million) divided by the total number of shares outstanding as of 30 June 2019 (24,601,158).

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7. Outlook

The Board of Directors continues to pay close attention to the shifting economic, financial and political context and the associated impact on the Group's activities.

In the current economic climate, Aedifica's key strengthsinclude the following:

  • Aedifica's strategic focus on healthcare real estate and its development in Europe allow the Group to adapt to market opportunities and the evolution of economic conditions in the context of an ageing population. The geographical spread of the portfolio over six countries (Belgium, Germany, the Netherlands, the United Kingdom, Finland and Sweden) leads to a better risk diversification.
  • Thanks to its investments in healthcare real estate, Aedifica benefits from indexedlong-term rental incomes, which generate high net yields. The weighted average unexpired lease term on the total of its leases of 21 years provides Aedifica with a very good view of the majority of its future income streams over the long term.
  • The confirmed credit lines ensure the financing of the real estate portfolio (including ongoing project developments) and the further growth of the portfolio. Drawings on these credit facilities are largely covered by hedging instruments. In addition, Aedifica has in the past repeatedly demonstrated that it has excellent access to the capital markets in order to support its growth.
  • The combined pipeline of Aedifica and Hoivatilat amount to more than €600 million, assuring the Group's future growth.

Taking into account the results as of 31 December 2019 and the investments that have already been carried out, in particular the integration of Hoivatilat as from 10 January 2020, Aedifica's Board of Directors has decided to adjust the outlook for the current financial year. Based on the anticipated real estate portfolio and without unforeseen developments, rental income for the financial year 2019/2020 is estimated at €163 million. This leads to an EPRA Earnings* of €97 million or €3.95 per share, and allows the payment of a gross dividend of €3.00 per share (an increase of 7% compared to the 2018/2019 dividend), notwithstanding the higher number of shares as a result of the capital increase of May 2019.

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8. Principal risks and uncertainties

The Board of Directors considers that the key risk factors and uncertainties summarised in pages 2 to 13 of the 2018/2019 Annual Financial Report are relevant for the remaining months of the 2019/2020 financial year.

9. Related party transactions

Related party transactions (as defined under IAS 24 and by the Belgian Companies Code) are discussed in Note 13 of the attached Condensed Consolidated Financial Statements. These transactions relate exclusively to the remuneration of the members of the Board of Directors and the Management Committee.

Moreover, certain types of transactions are covered by Article 37 of the Act of 12 May 2014 on RREC (with the exception of cases explicitly covered by Article 38 of the same Act). Over the course of the first half of the 2019/2020 financial year, no transactions covered by this Article and outside of normal business transactions were executed between Aedifica and its regular service providers.

10. Corporate governance

10.1. Renewal of term of office

The Annal General Meeting of 22 October 2019 renewed with immediate effect and for a period of three years (until the end of the Annual General Meeting of 2022) the office of Mr. Jean Franken as non- executive independent Director. Aedifica's Board of Directors welcomes this appointment.

Brussels, 18 February 2020.

The Board of Directors.

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II. EPRA14

The EPRA ('European Public Real Estate Association') is the voice of Europe's publicly traded real estate sector and the most widely used global benchmark for listed real estate. Aedifica's shares were added to the 'FTSE EPRA/NAREIT Developed Europe Index' on 18 March 2013.

As of 31 december 2019, Aedifica is included in the European EPRA Index with a weighting of approx. 1.0% and in the Belgian EPRA Index with a weighting of approx. 19.6%.

Aedifica supports this approach to reporting standardisation, which has been designed to improve the quality and comparability of information. The Company supplies its investors with most of the information recommended by EPRA. Some of the EPRA indicators are considered to be alternative performance measures (APM). They are described in Note 15 of this half year financial report's Condensed Consolidated Financial Statements.

Key performance indicators according to the EPRA principles

31 December 2019

31 December 2018

EPRA Earnings* (in €/share)

1.89

1.74

EPRA Cost Ratio (including direct vacancy costs)* (in %)

17%

17%

EPRA Cost Ratio (excluding direct vacancy costs)* (in %)

17%

17%

31 December 2019

30 June 2019

EPRA NAV* (in €/share)

62.07

58.44

EPRA NNNAV* (in €/share)

59.26

55.61

EPRA Net Initial Yield (NIY) (in %)

5.3%

5.5%

EPRA Topped-up NIY (in %)

5.6%

5.5%

EPRA Vacancy Rate (in %)

0%

0%

The above-mentioned EPRA NAV* and EPRA NNNAV* values as of 30 June 2019 were adjusted downward by €2.20 per share in comparison to the figures published in the 2018/2019 Annual Financial Report, so that they can be compared with the values as of 31 December 2019 (see footnote 13 in section I.6.3 above). This adjustment corresponds to the 2018/2019 gross dividend, which was distributed in October 2019 (see Note 15.6).

The calculation of the EPRA NIY and the EPRA Topped-up NIY was revised for the account closed on 31 December 2019. The ratios now take into account the investment value of the marketable investment properties and no longer the fair value. In comparison, the EPRA NIY and EPRA Topped-up NIY ratios based on the fair value of the marketable investment properties as of 31 December 2019 would be 5.6% and 5.9%.

In 2015, 2016, 2017, 2018 and 2019, Aedifica was presented with the 'EPRA BPR Gold Award' for its annual financial report five times in a row. Aedifica also won the 'EPRA sBPR Silver Award' and the 'EPRA sBPR Most Improved' for the 2018 Sustainability Report. In this way, Aedifica remains among the leading European companies being evaluated by EPRA.

14The data in this chapter are not compulsory according to the RREC regulation and are not subject to verification by public authorities. The data as of 31 December 2019 in this chapter have not been reviewed by the statutory auditor.

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  1. Aedifica in the stock market

1. Stock price and volume

Aedifica's shares (AED) have been quoted on Euronext Brussels since October 2006. Since November 2019, Aedifica has also been trading on Euronext Amsterdam via a secondary listing. Following its IPO, Aedifica has completed five capital increases, in cash and with preferential subscription rights or priority allocation rights:

  • 15 October 2010: issuance of 2,013,334 new shares at €33.45, for a gross amount of €67 million;
  • 7 December 2012: issuance of 2,697,777 new shares at € 37.00, for a gross amount of €100 million;
  • 29 June 2015: issuance of 3,121,318 new shares at € 49.00, for a gross amount of €153 million;
  • 28 March 2017: issuance of 3,595,164 new shares at € 61.00, for a gross amount of €219 million;
  • 7 May 2019: issuance of 6,147,142 new shares at € 68.00, for a gross amount of €418 million.

Aedifica is registered in the Bel Mid Index with a weighting of approximately 9.6% (31 December 2019). In addition, the Aedifica share is also included in the EPRA, MSCI and Stoxx Europe 600 indexes.

The Aedifica share price fluctuated between €85.50 and €116.80 over the first half of the year and closed the first half of the financial year at €113.20, an increase of approx. 35% compared to 30 June 2019 (€83.90).

Based on the stock price as at 31 December 2019, Aedifica shares have a premium of:

  • 84.3% as compared to the net asset value per share excluding changes in the fair value of hedging instruments*;
  • 89.8% as compared to the net asset value per share.

Compared to the net asset value, this premium is a vote of confidence in Aedifica's track record and reflects, among other things, Aedifica's pure play focus on healthcare real estate, the Group's future growth, the stable nature of the profits generated in the long term and the attractive dividend.

Between Aedifica's IPO (after deduction of the coupons which represented the preferential subscription rights or the priority allocation rights as part of the above-mentioned capital increases) and 31 December 2019, Aedifica's stock price increased by 211.2%, as compared to an increase of 65.3% for the Bel Mid index and a decrease of 6.9% for the EPRA Europe index over the same period.

During the first half year, the liquidity of the Aedifica share also increased. The average daily volume was approx. €4,024,000 or approximately 38,400 shares, which means that the turnover rate increased to 41.7%. Aedifica continues its efforts to broaden its investor base further by regularly participating in road shows and events for institutional and private investors alike.

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Aedifica share

31 December 2019

30 June 2019

Share price at closing (in €)

113.20

83.90

EPRA NAV* excl. changes in fair value of hedging insturments* (in €)

61.43

57.96

Premium (+) / Discount (-) excl. changes in fair value of hedging instruments*

84.3%

44.8%

EPRA NAV* (in €)

59.64

55.90

Premium (+) / Discount (-)

89.8%

50.1%

Market capitalisation

2,784,851,086

2,064,037,156

Free float 1

100.00%

100.00%

Total number of shares listed

24,601,158

24,601,158

Denominator for the calculation of the EPRA NAV* per share

24,601,158

24,601,158

Average daily volume

38,387

24,982

Velocity 2

41.7%

32.5%

Gross dividend per share (in €) 3

3.00

2.80

Dividend gross yield 4

2.7%

3.3%

  1. Percentage of the capital of a company held by the market, according to the definition of Euronext. See press release of 12 July 2019 and section 3 below.
  2. Annualised total volume of exchanged shares divided by the total number of shares listed on the market, according to the definition of Euronext.
  3. 2019/2020: according to section 7 of the Interim Management Report above.
  4. Gross dividend per share divided by the closing share price.

22/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

2. Graphic illustrations of Aedifica's stock price

The stock prices below cover the period between Aedifica's IPO and 31 December 2019. Aedifica's total return15compared to indices

550 525 500 475 450 425 400 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25

Total return

Var. (%)

Aedifica

195

437

EPRA Belgium

5,962

176

EPRA Europe

5,387

57

Epra Europe total return

Aedifica total return

Epra Belgium total return

Aedifica's stock price evolution compared to indices

325

300

Spot

Var. (%)

275

Aedifica

113.20

211.2

BEL MID

6,101.31

65.3

250

225

EPRA Belgium 1,792.85

26.6

200

EPRA Europe

2,485.94

-6.9

175

150

125

100

75

50

25

BEL.MID

EPRA Europe

EPRA.Belgium

Aedifica

15Taking into account the value of the subscription rights of the rights issues of 2010 (-€1.89), 2012 (-€1.93), 2015 (-€0.89), 2017 (-€1.60) and 2019 (-€2.76), the IPO price of €41 was adjusted to €31.93.

23/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

3. Shareholding structure

Aedifica shareholders holding more than 5% of the Company's capital are listed in the table below (as of 31 December 2019, based on the number of shares held by the shareholders concerned as of 5 July 2019)16.

SHAREHOLDERS

Voting rights

(in %)

BlackRock, Inc.

5.00

Others < 5%

95.00

Total

100.00

The total number of shares is 24,601,158.

4. Financial calendar17

Financial calendar

Interim statement 31.03.2020

20/05/2020

Annual press release 30.06.2020

2/09/2020

2019/2020 Annual Financial Report

September 2020

Annual General Meeting 2020

27/10/2020

Dividend - payment coupon relating to the 2019/2020 financial year

As from 4/11/2020

Interim statement 30.09.2020

13/11/2020

Half year results 31.12.2020

February 2021

  1. Declarations of transparency (including control strings) are available on Aedifica's website. The Company has not received any additional declarations of transparency since 5 July 2019. According to the definition of Euronext, Aedifica's free float amounts to 100%.
  2. These dates are subject to change.

24/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

IV. Property report

1. Consolidated property portfolio

1.1. Marketable investment properties18

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Investment properties

1,237,740

21,096

149,223,322

150,707,241

Belgium

460,095

7,929

57,046,380

58,462,089

Senior Living Group

156,981

2,690

18,934,628

19,574,555

Au Bon Vieux Temps

7,868

104

871,926

835,800

Beerzelhof

5,025

61

338,777

488,000

Coham

6,956

120

913,027

842,000

De Edelweis

6,914

122

794,389

943,000

De Witte Bergen

8,262

119

1,046,351

955,150

Ennea

1,848

34

204,023

154,700

Ezeldijk

7,101

105

745,114

882,000

Helianthus

4,799

67

492,564

500,000

Heydeveld

6,167

110

649,695

712,200

Kasteelhof

3,500

81

368,093

443,070

Les Jardins de la Mémoire

6,852

110

707,656

791,999

Oosterzonne

4,948

82

750,409

648,725

Op Haanven

6,587

111

706,238

783,000

Résidence Aux Deux Parcs

1,618

53

333,110

304,000

Residentie Boneput

2,993

78

477,350

457,900

Résidence du Plateau

8,069

143

1,336,263

1,263,000

Résidence Exclusiv

4,253

104

746,947

711,000

Résidence l'Air du Temps

7,197

137

918,109

1,004,000

Résidence Les Cheveux d'Argent

4,996

99

432,370

555,000

Residentie Sporenpark

9,261

127

1,116,251

1,103,000

Seniorenhof

3,116

52

328,059

224,941

De Maretak

5,684

122

556,452

797,000

Melopee

2,967

70

518,984

469,000

Sorgvliet

4,517

83

561,279

533,520

't Hoge

4,632

81

709,293

788,000

Uilenspiegel

6,863

97

757,880

683,550

Villa Vinkenbosch

9,153

114

988,687

1,057,000

Wielant

4,834

104

565,330

644,000

Armonea

123,762

2,054

15,820,075

16,038,540

De Notelaar

8,651

94

1,019,896

1,114,000

De Stichel

8,429

153

915,388

1,116,440

Eyckenborch

8,771

141

1,167,660

983,000

Gaerveld

6,994

115

832,855

874,000

Hestia

12,682

222

1,446,061

1,776,000

Huize Lieve Moenssens

4,597

78

582,743

561,600

Koning Albert I

7,775

110

968,346

977,000

Larenshof

6,988

117

1,079,527

1,011,000

Les Charmes en Famenne

3,165

96

314,516

417,600

Marie-Louise

1,959

30

389,087

199,500

Overbeke

6,917

113

840,716

881,400

Plantijn

7,310

110

1,047,986

825,000

Pont d'Amour

8,984

150

1,039,081

1,022,000

Residentie Gaerveld

1,504

20

177,780

170,000

Rietdijk

2,155

60

369,523

414,000

Salve

6,730

117

1,130,792

1,033,000

Senior Flandria

7,501

108

651,406

752,000

La Pairelle

6,016

118

803,462

840,000

Ter Venne

6,634

102

1,043,249

1,071,000

Vulpia

91,625

1,327

10,570,295

10,612,590

Blaret

9,578

107

1,110,881

934,650

Demerhof

10,657

120

993,625

1,020,000

Halmolen

9,200

140

1,077,444

1,082,000

La Ferme Blanche

4,240

90

568,991

605,200

Leopoldspark

10,888

153

1,272,968

1,277,460

Residentie Den Boomgaard

6,274

90

710,209

702,000

Residentie Kartuizerhof

10,845

128

986,632

1,016,480

Residentie Poortvelden

5,307

60

473,187

462,000

18It is not in the interest of the shareholder to publish the values by building. The addresses of the buildings are available in the 2018/2019 Annual Financial Report. Addresses of the acquisitions since 1 July 2019 are available in the related press releases.

25/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Residentie van de Vrede

3,793

107

730,000

880,000

't Spelthof

4,076

100

800,839

707,000

Twee poorten

8,413

129

1,032,521

1,057,800

Villa Temporis

8,354

103

812,998

868,000

Orpea

47,985

1,159

7,127,279

6,948,100

Bel-Air

5,350

161

761,172

755,000

Château Chenois

6,354

115

930,065

1,042,000

Jardins de Provence

2,280

72

418,645

370,000

New Philip

3,914

111

509,985

520,000

Residentie Augustin

4,832

94

566,349

672,100

Résidence du Golf

6,424

194

815,930

946,000

Résidence Grange des Champs

3,396

75

450,390

504,000

Résidence Parc Palace

6,719

162

1,318,536

1,046,000

Résidence Service

8,716

175

1,356,208

1,093,000

Hof van Schoten SPRL

8,313

101

840,000

1,075,000

Hof van Schoten

8,313

101

840,000

1,075,000

Time for Quality

5,824

58

446,800

667,000

Klein Veldeken

5,824

58

446,800

667,000

Buitenhof ASBL

4,386

80

576,882

739,000

Buitenhof

4,386

80

576,882

739,000

Résidence de La Houssière

4,484

94

613,258

545,200

Résidence La Houssière

4,484

94

613,258

545,200

Dorian groep

4,827

104

569,604

550,357

De Duinpieper

4,827

104

569,604

550,357

Vivalto

4,526

91

600,104

545,200

Prinsenhof (3)

4,526

91

600,104

545,200

Bremdael ASBL

3,500

66

350,000

518,862

Bremdael

(w)

3,500

66

350,000

518,862

Pierre Invest SA

2,272

65

466,596

476,000

Bois de la Pierre

2,272

65

466,596

476,000

Le Carrosse

1,290

36

98,884

138,000

La Boule de Cristal

1,290

36

98,884

138,000

Other

320

4

31,975

33,685

Villa Bois de la Pierre

320

4

31,975

33,685

Germany

281,478

5,304

30,459,374

30,260,605

Vitanas

73,532

1,451

7,042,917

6,708,739

Am Bäkepark

(i)

3,828

90

456,000

441,396

Am Kloster

(f)

5,895

136

752,007

689,764

Am Schäfersee

(j)

12,658

187

650,879

673,696

Am Stadtpark

(j)

7,297

135

501,192

491,128

Am Tierpark

(i)

13,549

217

1,093,050

1,095,936

Frohnau

(f)

4,101

107

590,817

516,745

Patricia

(g)

7,556

174

1,050,324

1,156,070

Rosengarten

(i)

6,538

165

550,000

498,980

Rosenpark

(g)

4,934

79

470,018

370,021

St. Anna

(g)

7,176

161

928,629

775,004

Residenz Management

24,564

442

3,412,411

3,345,118

Bremerhaven I

(k)

6,077

85

951,451

911,490

Bremerhaven II

(k)

2,129

42

310,181

293,806

Cuxhaven

(k)

810

9

108,239

102,127

Die Rose im Kalletal

(c)

4,027

96

682,962

685,892

Senioreneinrichtung Haus Elisabeth

(d)

3,380

80

585,587

577,980

Senioreneinrichtung Haus Matthäus

(d)

2,391

50

365,992

365,823

Sonnenhaus Ramsloh

(l)

5,750

80

408,000

408,000

Orpea

20,507

444

3,173,267

3,169,914

Bonifatius Seniorenzentrum

(d)

3,967

80

617,833

606,951

Seniorenresidenz Am Stübchenbach

(e)

5,874

130

807,926

828,234

Seniorenresidenz Kierspe

(e)

3,721

79

565,907

546,987

Seniorenresidenz Klosterbauerschaft

(c)

3,497

80

609,193

608,478

Seniorenresidenz Mathilde

(c)

3,448

75

572,408

579,264

EMVIA

28,703

608

2,923,076

2,831,737

Residenz Zehlendorf

(h)

4,540

180

600,000

554,920

Seniorenpflegezentrum Zur alten Linde

4,208

82

368,000

385,278

Seniorenquartier Lübbecke

(m)

4,240

80

576,276

572,400

Seniorenquartier Schwerin

(m)

5,000

87

646,800

630,000

Seniorenwohnpark Hartha

10,715

179

732,000

689,139

Azurit Rohr

29,862

465

2,366,742

2,601,640

Azurit Seniorenresidenz Cordula 1

4,970

75

312,051

357,824

Azurit Seniorenresidenz Cordula 2

1,204

39

162,267

176,954

Azurit Seniorenresidenz Sonneberg

4,876

101

583,416

614,402

Hansa Pflege-und Betreuungszentrum Dornum

11,203

106

426,000

436,917

Seniorenzentrum Weimar

7,609

144

883,008

1,015,542

26/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Alloheim

18,695

378

2,326,356

2,410,359

AGO Dresden

5,098

116

583,234

670,950

AGO Herkenrath

4,000

80

586,606

613,273

AGO Kreischa

3,670

84

416,516

414,896

Bonn

5,927

98

740,000

711,240

Argentum

16,086

294

1,623,000

1,479,982

Haus Alba

2,560

64

225,000

238,061

Haus Arche

531

13

75,000

31,832

Haus Concolor

5,715

74

510,000

411,480

Haus Nobilis

3,186

70

525,000

516,122

Seniorenheim J.J. Kaendler

4,094

73

288,000

282,486

Convivo

11,845

202

1,368,309

1,472,093

Haus am Jungfernstieg

2,457

60

363,309

361,179

Park Residenz

6,113

79

640,000

696,882

Seniorenhaus Wiederitzsch

3,275

63

365,000

414,032

Schloss Bensberg Management GmbH

8,215

87

1,009,336

1,159,496

Service-Residenz Schloss Bensberg

8,215

87

1,009,336

1,159,496

Casa Reha

7,618

151

901,228

960,549

Haus Steinbachhof

7,618

151

901,228

960,549

SARA

7,900

126

640,000

616,177

SARA Seniorenresidenz

7,900

126

640,000

616,177

Deutsche Pflege und Wohnstift GmbH

4,310

126

654,261

724,060

Seniorenheim am Dom

4,310

126

654,261

724,060

Cosiq GmbH

5,534

120

667,698

639,441

Pflegeteam Odenwald

1,202

32

222,218

223,563

Seniorenresidenz an den Kienfichten

4,332

88

445,480

415,879

Die Johanniter

3,950

74

509,312

427,164

Johanniter-Haus Lüdenscheid

(l)

3,950

74

509,312

427,164

Advita Pflegedienst

6,422

91

464,616

462,384

Advita Haus Zur Alten Berufsschule

6,422

91

464,616

462,384

Deutsches Rotes Kreuz Kreisverband Nordfriesland e. V.

4,088

83

522,000

490,560

DRK Käthe-Bernhardt-Haus

4,088

83

522,000

490,560

Seniorenresidenz Laurentiusplatz GmbH

5,506

79

452,605

363,661

Laurentiusplatz

5,506

79

452,605

363,661

Volkssolidarität

4,141

83

402,240

397,531

Goldene Au

4,141

83

402,240

397,531

Netherlands

255,049

2,084

22,220,697

24,650,316

Stichting Vitalis Residentiële Woonvormen

90,981

446

3,986,705

4,830,000

Genderstate

(a)

8,813

44

521,138

605,000

Parc Imstenrade

(a)

57,181

263

2,110,609

2,630,000

Petruspark

(a)

24,987

139

1,354,959

1,595,000

Ontzorgd Wonen Groep

44,612

358

3,232,495

3,483,784

De Statenhof

(a)

6,468

54

440,524

440,524

Kening State

(a)

10,750

70

630,000

738,900

Residentie Boldershof

(a)

2,261

33

330,393

330,393

Residentie Sibelius

(a)

14,294

96

833,967

833,967

Zorghuis Smakt

(a)

2,111

30

207,748

240,000

Zorgresidentie Mariëndaal

(a)

8,728

75

789,862

900,000

NNCZ

38,440

340

2,785,000

2,785,000

De Kaap

(a)

6,254

61

569,700

570,000

De Vecht

(a)

8,367

79

670,625

670,000

Krakeel

(a)

5,861

57

492,425

490,000

Wolfsbos

(a)

11,997

93

789,025

790,000

WZC Beatrix

(a)

5,961

50

263,225

265,000

Compartijn

15,606

173

2,706,929

2,955,000

Huize de Compagnie

(a)

3,471

42

580,000

635,000

Huize Eresloo

(a)

2,350

28

421,875

455,000

Huize Groot Waardijn

(a)

1,918

26

421,875

455,000

Huize Hoog Kerckebosch

(a)

2,934

32

547,627

595,000

Huize Roosdael

(a)

2,950

26

421,875

470,000

Huize Ter Beegden

(a)

1,983

19

313,677

345,000

Martha Flora

12,788

140

2,393,344

2,625,000

Martha Flora Bosch en Duin

(a)

2,241

27

466,087

505,000

Martha Flora Den Haag

(a)

2,259

28

573,212

620,000

Martha Flora Hilversum

(a)

4,055

31

567,231

630,000

Martha Flora Hoorn

(a)

780

12

81,683

95,000

Martha Flora Lochem

(a)

1,012

13

169,130

185,000

Martha Flora Rotterdam

(a)

2,441

29

536,000

590,000

Domus Magnus

8,072

99

2,091,297

2,280,000

Benvenuta

(a)

924

10

220,360

240,000

Holland

(a)

2,897

34

849,960

915,000

Molenenk

(a)

2,811

40

708,112

775,000

Villa Walgaerde

(a)

1,440

15

312,864

350,000

27/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Stepping Stones Home & Care

6,400

93

1,255,480

1,395,000

Saksen Weimar

(a)

2,291

42

531,448

600,000

Spes Nostra

(a)

2,454

30

473,332

520,000

Villa Nova

(a)

1,655

21

250,700

275,000

Het Gouden Hart

6,243

72

1,010,683

1,110,000

HGH Driebergen

(a)

353

9

79,493

85,000

HGH Kampen

(a)

3,610

37

510,370

570,000

HGH Leersum

(a)

2,280

26

420,820

455,000

Stichting Zorggroep Noorderboog

13,555

140

834,110

1,030,000

Oeverlanden

(a)

13,555

140

834,110

1,030,000

Stichting Nusantara

4,905

70

625,000

720,000

Rumah Saya

(b)

4,905

70

625,000

720,000

Stichting Leger des Heils Welzijns- en Gezondheidszorg

6,014

75

425,568

425,568

De Merenhoef

(a)

6,014

75

425,568

425,568

Stichting Oosterlengte

4,380

32

413,569

500,000

Het Dokhuis

(a)

4,380

32

413,569

500,000

Orpea

1,466

20

248,000

275,000

September Nijverdal

(a)

1,466

20

248,000

275,000

Omega

1,587

26

212,517

235,964

Meldestraat

(a)

1,587

26

212,517

235,964

United Kingdom

241,119

5,779

39,496,871

37,334,230

Maria Mallaband

38,302

908

7,107,366

7,117,047

Ashmead

(v)

4,557

110

925,281

852,165

Belvoir Vale

(q)

2,158

56

822,780

628,839

Blenheim

(v)

2,288

64

330,451

382,005

Coplands

(v)

3,445

79

694,745

740,502

Eltandia Hall

(v)

3,531

83

510,676

593,577

Glennie House

(r)

2,279

52

144,220

223,326

Heritage

(v)

2,972

72

842,816

916,812

Kings Court (MM)

(v)

2,329

60

299,984

329,112

Knights Court

(v)

3,100

80

409,536

499,545

Ottery

(s)

3,513

62

805,149

805,149

River View

(v)

5,798

137

922,211

910,935

The Windmill

(v)

2,332

53

399,518

235,080

Burlington

46,518

1,158

7,745,765

6,746,796

Bessingby Hall

(q)

2,471

65

547,369

499,545

Cherry Trees

(q)

3,178

81

283,491

276,219

Crystal Court

(r)

2,879

60

587,700

570,069

Figham House

(q)

2,131

63

602,681

511,299

Foresters Lodge

(q)

2,241

69

355,868

446,652

Highfield Care Centre

(q)

3,260

88

528,930

411,390

Maple Court

(p)

3,045

64

570,069

534,807

Maple Lodge

(q)

1,673

55

220,493

229,203

Priestley

(q)

1,520

40

293,850

293,850

Randolph House

(q)

2,433

60

251,992

211,572

Southlands

(q)

1,812

48

436,696

235,080

The Elms

(q)

1,280

37

338,980

176,310

The Elms & Oakwood

(q)

5,361

80

440,985

417,267

The Grange

(q)

2,919

73

313,186

311,481

The Hawthornes

(q)

1,512

40

293,850

264,465

The Lawns

(q)

2,459

62

233,626

246,834

The Limes

(q)

3,414

97

887,685

687,609

The Sycamores

(q)

1,627

40

293,850

276,219

York House

(q)

1,302

36

264,465

146,925

Care UK

32,368

740

4,303,110

4,061,007

Armstrong House

(u)

2,799

71

363,054

382,005

Cheviot Court

(u)

2,978

73

616,694

587,700

Church View

(u)

1,653

42

155,417

199,818

Collingwood Court

(u)

2,525

63

559,501

517,176

Elwick Grange

(u)

2,493

60

344,404

293,850

Grangewood Care Centre

(u)

2,317

50

360,567

287,973

Hadrian House

(u)

2,487

55

343,160

329,112

Hadrian Park

(u)

2,892

73

280,994

252,711

Ponteland Manor

(u)

2,160

52

198,934

193,941

Stanley Park

(u)

3,240

71

482,414

493,668

The Terrace

(u)

2,190

40

273,534

217,449

Ventress Hall

(u)

4,635

90

324,439

305,604

Bondcare Group

33,879

831

4,013,277

4,507,659

Alexander Court

(v)

3,347

82

520,705

528,930

Ashwood

(v)

2,722

70

329,112

352,620

Beech Court

(v)

2,135

51

308,812

317,358

Brook House

(v)

3,155

74

347,918

411,390

Chatsworth Grange

(v)

2,558

66

302,748

340,866

Clarendon

(v)

2,132

51

197,554

252,711

Coniston Lodge

(v)

3,733

92

432,547

470,160

Derwent Lodge

(v)

2,612

62

291,499

293,850

28/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Green Acres

(v)

2,352

62

293,850

293,850

Moorland Gardens

(v)

3,472

79

470,160

493,668

Springfield

(v)

3,153

80

228,312

329,112

The Fountains

(v)

2,510

62

290,059

423,144

Renaissance

19,936

452

2,668,485

2,909,115

Beech Manor

(q)

2,507

46

243,697

264,465

Jesmond

(q)

2,922

65

517,652

493,668

Letham Park

(q)

2,954

70

425,835

423,144

Meadowlark

(q)

2,005

57

193,987

246,834

Persley Castle

(q)

1,550

40

258,985

252,711

The Cowdray Club

(q)

2,581

35

404,207

399,636

Torry

(q)

3,028

81

251,121

434,898

Whitecraigs

(q)

2,389

58

373,000

393,759

Four Seasons

15,781

387

2,440,130

2,491,848

Beechcare

(q)

2,739

65

822,780

822,780

Grosvenor Park

(q)

2,312

61

352,620

340,866

Hilltop Manor

(q)

2,809

80

376,128

376,128

Meadowbrook

(q)

3,334

69

324,410

352,620

Riverside View

(q)

2,362

59

352,620

364,374

The Lodge

(q)

2,226

53

211,572

235,080

Lifeways

3,880

67

2,285,347

1,498,635

Heath Farm

(q)

2,832

47

1,442,964

899,181

Sharmers Fields House

(q)

1,048

20

842,383

599,454

Brighterkind

6,177

156

1,586,790

1,680,822

Ashurst Park

(q)

2,145

47

552,438

552,438

Highfields (Notts)

(q)

1,554

49

382,005

487,791

Kingsmills

(q)

2,478

60

652,347

640,593

Caring Homes

8,898

221

1,725,935

1,310,571

Brooklyn House

(q)

1,616

38

398,289

287,973

Guysfield

(q)

2,052

51

467,097

217,449

Hillside House and Mellish House

(q)

3,629

92

553,960

481,914

Sanford House

(q)

1,601

40

306,588

323,235

Harbour Healthcare

11,582

293

1,411,626

1,222,416

Bentley Rosedale Manor

(q)

2,896

78

447,726

376,128

Devonshire House & Lodge

(q)

3,167

77

281,090

264,465

Elburton Heights

(q)

3,076

69

291,995

287,973

Tree Tops Court

(q)

2,442

69

390,814

293,850

Halcyon Care Homes

3,210

66

846,288

937,969

Hazel End

(t)

3,210

66

846,288

937,969

Majesticare

4,669

126

1,157,449

1,104,876

Lashbrook House

(q)

1,741

46

411,390

405,513

Oak Lodge

(q)

1,699

45

394,101

311,481

The Mount

(q)

1,229

35

351,958

387,882

Select Healthcare

7,462

195

969,605

840,411

Cromwell Court

(q)

2,896

67

315,007

323,235

Delves Court

(q)

2,246

62

254,239

246,834

Plas Rhosnesni

(q)

2,320

66

400,359

270,342

Priory Group

3,755

77

646,559

411,390

Bentley Court

(q)

3,755

77

646,559

411,390

Conniston Care

4,702

102

589,138

493,668

Athorpe Lodge & The Glades

(q)

4,702

102

589,138

493,668

Projects under development (4)

141,056

1,809

1,808,306

0

Belgium

8,027

100

153,966

0

Armonea

8,027

100

153,966

0

Rembertus

8,027

100

153,966

0

Germany

93,445

1,239

944,955

0

EMVIA

75,408

948

697,604

0

Seniorenquartier Beverstedt

(n)

5,475

80

29,214

0

Seniorenquartier Bremen

(o)

7,057

75

48,690

0

Seniorenquartier Espelkamp

(n)

9,458

113

71,411

0

Seniorenquartier Heiligenhafen

(n)

7,391

104

59,130

0

Seniorenquartier Kaltenkirchen

(m)

6,650

123

117,180

0

Seniorenquartier Langwedel

(o)

8,250

113

72,881

0

Seniorenquartier Sehnde

(o)

6,012

90

45,117

0

Seniorenquartier Weyhe

(o)

7,373

109

97,380

0

Seniorenquartier Wolfsburg

(n)

17,742

141

156,600

0

Argentum

5,292

91

120,000

0

Haus Wellengrund

5,292

91

120,000

0

Aspida

5,095

120

74,624

0

Pflegecampus Plauen

5,095

120

74,624

0

Residenz Management

7,650

80

52,728

0

Quartier am Rathausmarkt

(l)

7,650

80

52,728

0

29/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Subsidiary(1)

Total surface

Residential

Contractual

Estimated rental

(m²)

units

rents (2)

value (ERV) (2)

Netherlands

39,584

470

709,385

0

Ontzorgd Wonen Groep

8,987

99

204,304

0

Residentie La Tour

(b)

4,250

30

89,726

0

Sorghuys Tilburg

(a)

1,289

22

43,513

0

Villa Casimir

(b)

1,273

20

33,564

0

Vinea Domini

(b)

2,175

27

37,500

0

Stepping Stones Home & Care

5,893

80

232,380

0

Natatorium

(b)

1,923

26

105,000

0

Stepping Stones Zwolle

(a)

1,770

24

50,880

0

Villa Nuova

(b)

2,200

30

76,500

0

Stichting Oosterlengte

7,360

120

110,250

0

LTS Winschoten

(a)

4,560

84

72,000

0

Verpleegcentrum Scheemda

(a)

2,800

36

38,250

0

Het Gouden Hart

4,202

45

109,737

0

HGH Harderwijk

(a)

4,202

45

109,737

0

Stichting Rendant

13,142

126

52,715

0

Nieuw Heerenhage

(a)

13,142

126

52,715

0

  1. The sites specified in the table are held by one of the following subsidiaries: (a) Aedifica Nederland BV; (b) Aedifica Nederland 2 BV; (c) Aedifica Luxemburg I SCS; (d) Aedifica Luxemburg II SCS; (e) Aedifica Luxemburg III SCS; (f) Aedifica Luxemburg IV SCS; (g) Aedifica Luxemburg V SCS; (h) Aedifica Luxemburg VI SCS; (i) German Healthcare Real Estate I Beta Sàrl; (j) German Healthcare Real Estate II Gamma Sàrl; (k) Aedifica Residenzen Nord GmbH; (l) Aedifica Residenzen West GmbH; (m) Aedifica Residenzen 1 GmbH; (n) Aedifica Residenzen 2 GmbH; (o) Aedifica Residenzen 3 GmbH; (p) AED Maple Holdings Ltd; (q) AED Oak 1 Ltd; (r) AED Oak Acquisitions (Jersey); (s) AED Oak Acquisitions (Ottery); (t) Aedifica UK Ltd; (u) Chapp Acquisition Ltd; (v) Patient Properties (Holdings) Ltd; (w) Hof Van Bremdael SA. All other sites are held by Aedifica SA.
  2. See glossary in the 2018/2019 Annual Financial Report.
  3. Recognised in the balance sheet as assets classified as held for sale.
  4. Although still under construction, these sites already generate limited rental incomes. This explains why they were included in this table and why the number of residential units and the estimated rental value are not mentionned.

1.2. Projects and renovations in progress

All of the projects in the table below are pre-let. €36 million of the investment budget has already been realised through the completion of the acquisition of the BAVARIA Senioren- und Pflegeheim care home in Germany on 1 January 2020 (€5 million), the Wohnstift am Weinberg care home in Germany on 17 January 2020 (€10 million), the Am Parnassturm care home in Germany on 12 February 2020 (€4.5 million) and the Am Marktplatz care home in Germany on 12 February 2020 (€2 million), and the completion of the construction works on the Seniorenquartier Kaltenkirchen care campus on 16 January 2020 (€15 million) (see Note 12 of the condensed consolidated financial statements).

30/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

Projects and renovations

Operator

Investment

Inv. as of

Future

Comment

(in € million) 1

31/12/2019

inv.

Projects in progress

320

69

250

Completion 2019/2020

75

48

27

BE

Kasteelhof

Senior Living Group

3

0

3

Extension of a care home

BE

SLG - energy saving project

Senior Living Group

2

0

2

Energy saving project

DE

Laurentiusplatz

Seniorenresidenz Laurentiusplatz

1

0

1

Renovation of a care home

DE

Seniorenquartier Kaltenkirchen 3

EMVIA

15

11

3

Construction of a care campus

DE

Residenz Zehlendorf

EMVIA

6

5

1

Renovation of a care home

DE

Seniorenquartier Beverstedt 3

EMVIA

10

5

5

Construction of a care campus

NL

Sorghuys Tilburg 2

Ontzorgd Wonen Groep

3

3

0

Construction of a care residence

NL

LTS Winschoten 2

Stichting Oosterlengte

13

12

0

Construction of a care residence

NL

De Merenhoef

Stichting Leger des Heils

0

0

0

Extension and renovation of a care home

Welzijns- en Gezondheidszorg

NL

De Statenhof

Ontzorgd Wonen Groep

2

1

1

Extension and renovation of a care home

NL

Residentie Boldershof

Ontzorgd Wonen Groep

1

0

1

Renovation of a care home

NL

Verpleegcentrum Scheemda 2

Stichting Oosterlengte

4

1

3

Construction of a care home

NL

Het Gouden Hart Harderwijk 2

Het Gouden Hart

7

5

1

Construction of a healthcare site

NL

Residentie La Tour 2

Ontzorgd Wonen Groep

6

2

4

Redevelopment of a healthcare site

NL

Villa Casimir 2

Ontzorgd Wonen Groep

2

0

2

Redevelopment of a care residence

Completion 2020/2021

176

20

155

BE

De Duinpieper

Dorian groep

3

2

1

Extension and renovation of a care home

BE

Sorgvliet

Senior Living Group

5

0

5

Extension of a care home

BE

Résidence Aux Deux Parcs

Senior Living Group

3

2

2

Extension of a care home

BE

Residentie 't Spelthof

Vulpia

6

0

5

Extension of a care home

NL

Nieuw Heerenhage 2

Stichting Rendant

20

2

18

Construction of a healthcare site

NL

Residentie Sibelius

Ontzorgd Wonen Groep

9

0

9

Renovation of a healthcare site

NL

Stepping Stones Zwolle 2

Stepping Stones Home & Care

5

0

5

Construction of a care residence

NL

Vinea Domini 2

Ontzorgd Wonen Groep

3

0

3

Redevelopment of a care residence

NL

Villa Nuova 2

Stepping Stones Home & Care

5

0

5

Construction of a care residence

DE

Pflegecampus Plauen 2

Aspida

11

4

7

Construction of a care home

DE

Seniorenquartier Espelkamp 3

EMVIA

15

2

13

Construction of a care campus

DE

Seniorenquartier Heiligenhafen 3

EMVIA

13

1

12

Construction of a care campus

DE

Seniorenquartier Bremen 3

EMVIA

15

1

14

Construction of a care campus

DE

Seniorenquartier Weyhe 3

EMVIA

15

0

15

Construction of a care campus

DE

Seniorenquartier Sehnde 3

EMVIA

12

0

12

Construction of a care campus

DE

Seniorenheim Haus Wellengrund 2

Argentum

8

1

7

Redevelopment of a care home

DE

Seniorenquartier Wolfsburg 3

EMVIA

28

4

24

Construction of a care campus

Completion 2021/2022

46

1

45

DE

Seniorenquartier Langwedel 3

EMVIA

16

0

15

Construction of a care campus

DE

Quartier am Rathausmarkt

Residenz Management

15

1

15

Construction of a care home

NL

Natatorium

Stepping Stones Home & Care

3

0

3

Extension of a care home

UK

Burlington projects

Burlington

4

0

4

Extension of care homes

UK

MMCG - extension projects

Maria Mallaband Care Group

8

0

8

Extension of care homes

Completion 2023/2024

23

0

23

DE

Am Schäfersee

Vitanas

10

0

10

Renovation of a care home

DE

Am Stadtpark

Vitanas

5

0

5

Renovation of a care home

DE

Rosengarten

Vitanas

8

0

8

Renovation of a care home

DE

Am Tierpark

Vitanas

1

0

1

Renovation of a care home

Land reserve

2

2

0

BE

Terrain Bois de la Pierre

-

2

2

0

-

Acquisitions subject to outstanding conditions

45

0

45

Completion 2019/2020

26

0

26

DE

Wohnstift am Weinberg

Cosiq

20

0

20

Acquisition and renovation of a care home

DE

BAVARIA Senioren- und Pflegeheim

Auriscare

6

0

6

Acquisition and renovation of a care home

Completion 2021/2022

7

0

7

DE

Seniorenhaus Lessingstrasse

Seniorenhaus Lessingstrasse

7

0

7

Construction of a care home

Completion 2023/2024

12

0

12

DE

Am Parnassturm

Vitanas

8

0

8

Acquisition and renovation of a care home

DE

Am Marktplatz

Vitanas

4

0

4

Acquisition and renovation of a care home

Projects subject to outstanding conditions

114

0

114

Completion 2020/2021

71

0

71

BE

Uilenspiegel

Senior Living Group

2

0

2

Extension of a care home

BE

Residentie van de Vrede

Vulpia

2

0

2

Extension of a care home

BE

Rembertus

Armonea

12

0

12

Construction of a care home

DE

Specht Gruppe (2020/2021) 3

EMVIA

36

0

36

Construction & acquisition of care campuses

NL

Rendant Aldlânstate

Stichting Rendant

20

0

20

Construction of a senior housing site

Completion 2021/2022

42

0

42

DE

Specht Gruppe (2021/2022) 3

EMVIA

42

0

42

Construction & acquisition of care campuses

TOTAL PIPELINE

480

71

409

Changes in fair value

-

-3

-

Roundings

-

1

-

On balance sheet

69

  1. Amounts in £ were converted into € based on the exchange rate of 31 December 2019 (1.1754 £/€).
  2. Although still under construction, the sites already generate limited rental incomes, in particular for the plots of land that have already been acquired. Their values are therefore no longer mentioned in the table above. This explains why the estimated investment values differ from those mentioned earlier.
  3. Part of the cooperation agreement with Specht Gruppe.

31/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

2. Portfolio analysis as of 31 December 2019

2.1. Key figures

16%

Flanders

29%

Brussels

Wallonia

United Kingdom

21%

Germany

Netherlands

6%

6%

22%

1%

Healthcare buildings for

care-dependent seniors

17%

Healthcare buildings for

7%

independent seniors with

on-demand services

Mixed-use healthcare

buildings

75%

Healthcare buildings for

target groups other than

seniors

Geographical breakdown

(in terms of fair value)

5% 6%

0-10 years

20%

10-20 years

>20 years

Project

69%

Breakdown by healthcare segment

(in terms of fair value)

13%

<15 years

87%

≥15 years

Age of buildings

Unexpired lease term

(in terms of fair value)

(in terms of fair value)

The weighted average unexpired lease term (WAULT) for all buildings in the Company's portfolio is 21 years.

The overall occupancy rate of the total portfolio reached 100%.

32/76

Half year financial report

Regulated information

19 February 2020 - before opening of markets

Under embargo until 07:30 CET

2.2. Breakdown of senior housing contractual rents by group controlling the legal entities in contractual relation with Aedifica

Country Group controlling the legal

Tenants

Number

31/12/2019

30/06/2019

entities in contractual

of sites

relation with Aedifica

HEALTHCARE REAL ESTATE

290

100%

100%

Belgium

79

38%

42%

Senior Living Group 1°

28

13%

14%

Ennea Rustoord VZW/ASBL

1

0%

0%

FDL Group GCV/SCS

1

1%

1%

Foyer De Lork VZW/ASBL

6

3%

3%

Helianthus VZW/ASBL

1

0%

0%

Heydeveld Woon- en Zorgcentrum VZW/ASBL

1

0%

0%

Home Residence du Plateau BVBA/SPRL

1

1%

1%

Les Jardins de la Mémoire VZW/ASBL

1

0%

1%

Prodinvest BVBA/SPRL

1

0%

0%

Résidence Au Bon Vieux Temps NV/SA

1

1%

1%

Résidence Les Cheveux d'Argent NV/SA

1

0%

0%

Residentie Kasteelhof GCV/SCS

1

0%

0%

Residentie Sporenpark BVBA/SPRL

1

1%

1%

Rustoord 't Hoge VZW/ASBL

1

0%

0%

Senior Living Group NV/SA

8

4%

4%

Seniorie de Maretak NV/SA

1

0%

0%

Wielant -Futuro GCV/SCS

1

0%

0%

Armonea 2

20

11%

12%

Armonea NV/SA

8

5%

5%

Citadelle Mosane BVBA/SPRL

1

1%

1%

Eyckenborgh VZW/ASBL

2

1%

2%

Gravenkasteel VZW/ASBL

1

0%

0%

Happy Old People BVBA/SPRL

1

0%

0%

Huize Lieve Moenssens VZW/ASBL

5

2%

3%

LDC De Wimilingen VZW/ASBL

1

0%

0%

Restel Flats BVBA/SPRL

1

1%

1%

Vulpia

12

7%

8%

Oase VZW/ASBL

3

2%

2%

Vulpia Brussel VZW/ASBL

1

0%

1%

Vulpia Vlaanderen VZW/ASBL

7

4%

5%

Vulpia Wallonie VZW/ASBL

1

0%

0%

Orpea

9

5%

5%

Château Chenois Gestion BVBA/SPRL

3

1%

2%

New Philip NV/SA

3

1%

1%

Parc Palace NV/SA

1

1%

1%

Progestimmob NV/SA

1

1%

1%

Résidence du Golf NV/SA

1

1%

1%

Other

8

2%

3%

Bremdael VZW/ASBL

1

0%

0%

Buitenhof VZW/ASBL

1

0%

0%

Hof van Schoten BVBA/SPRL

1

1%

1%

Le Château de Tintagel BVBA/SPRL

1

0%

0%

Other

1

0%

0%

Résidence Bois de la Pierre NV/SA

1

0%

0%

Résidence de la Houssière NV/SA

1

0%

0%

WZC Prinsenhof VZW/ASBL

1

0%

0%

Time for Quality

1

0%

0%

Service Flat Residenties VZW/ASBL

1

0%

0%

Dorian Groep

1

0%

0%

Fripomat BVBA/SPRL

1

0%

0%

  1. Korian Group.
  2. Colisée Group.

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Country

Group controlling the legal Tenants

Number

31/12/2019

30/06/2019

entities in contractual

of sites

relation with Aedifica

Germany

67

21%

17%

Vitanas

10

5%

3%

Vitanas GmbH & Co. KGaA

10

5%

3%

EMVIA

14

2%

1%

Aventium Seniorenpflege GmbH

1

0%

0%

Aventium Senioren-Wohnpark Hartha GmbH, GbR

1

0%

0%

EMVIA

11

1%

1%

Residenz Zehlendorf Kranken- und Pflegeheim GmbH

1

0%

0%

Residenz Management

8

2%

2%

Ambulanter Pflegedienst Weser GmbH

3

1%

1%

Katholische Hospitalgesellschaft Südwestfalen GmbH

Olpe

2

1%

1%

Medeor Senioren-Residenz GmbH

1

0%

1%

Sonnenhaus Saterland (Mevr. Henkel)

1

0%

0%

Specht & Tegler

1

0%

0%

Orpea

5

2%

2%

Bonifatius Seniorendienste GmbH

1

0%

0%

Senioren Wohnpark Weser GmbH

3

1%

1%

Seniorenresidenz Kierspe GmbH

1

0%

0%

Azurit Rohr

5

2%

1%

Azurit Rohr GmbH

5

2%

1%

Alloheim

4

2%

2%

AGO Dresden Betriebsgesellschaft für

Sozialeinrichtungen mbH

1

0%

0%

AGO Herkenrath Betriebsgesellschaft für

Sozialeinrichtungen mbH

1

0%

0%

AGO Weisseritz Betriebsgesellschaft für

Sozialeinrichtungen mbH

1

0%

0%

Senator Senioren- und Pflegeeinrichtungen gGmbH

1

0%

1%

Argentum

6

1%

1%

Seniorenheim J.J. Kaendler GmbH

1

0%

0%

Tannenhof Fachpflegeheime GmbH

4

1%

1%

Argentum Holding GmbH

1

0%

0%

Convivo

3

1%

1%

Parkresidenz Pflege & Betreuung GmbH

1

0%

0%

Seniorencentrum Haus am Jungfernstieg GmbH

1

0%

0%

Seniorenresidenz Wiederitzsch GmbH

1

0%

0%

Other

2

1%

1%

Schloss Bensberg Management GmbH

1

1%

1%

Seniorenresidenz Laurentiusplatz GmbH

1

0%

0%

Casa Reha 1

1

1%

0%

Casa Reha Altenpflegeheim GmbH

1

1%

0%

SARA

1

0%

0%

SARA Seniorenresidenzen GmbH

1

0%

0%

DPUW 2

1

0%

0%

Deutsche Pflege und Wohnstift GmbH

1

0%

0%

Cosiq

2

0%

0%

Cosiq GmbH

1

0%

0%

Pflegeteam Odenwald GmbH

1

0%

0%

Johanniter

1

0%

0%

Johanniter gGmbH

1

0%

0%

Advita

1

0%

0%

Zusammen Zuhause GmbH

1

0%

0%

DRK Kreisverband Nordfriesland e. V.

1

0%

0%

DRK Pflegedienste Nordfriesland gGmbH

1

0%

0%

Volkssolidarität

1

0%

0%

Volkssolidarität Südthüringen e. V.

1

0%

0%

Aspida

1

0%

0%

Aspida GmbH

1

0%

0%

  1. Korian Group.
  2. Colisée Group.

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Country

Group controlling the legal Tenants

Number

31/12/2019

30/06/2019

entities in contractual

of sites

relation with Aedifica

Netherlands

53

15%

14%

Vitalis

3

3%

3%

Stichting Vitalis Residentiële Woonvormen

3

3%

3%

Ontzorgd Wonen Groep 1

10

2%

3%

Boeijend Huys Ouderenzorg BV

1

0%

0%

European Care Residence Hotels and Resorts BV

4

1%

1%

Herstelzorg Nederland BV

1

0%

0%

Ontzorg Wonen Nederland BV

1

0%

0%

Residentie Mariëndaal Facilitair BV

1

1%

1%

Zorghuis Nederland Holding BV

1

0%

0%

Zorghuis Roermond BV

1

0%

0%

Zorghuis Smakt Facilitair BV

1

0%

0%

NNCZ

5

2%

0%

Noord Nederlandse Coöperatie van Zorgorganisaties

5

2%

2%

Compartijn

6

2%

2%

Compartijn Exploitatie BV

6

2%

2%

Martha Flora

6

2%

2%

Bronovo Martha Flora BV

1

0%

0%

Martha Flora BV

2

0%

0%

Martha Flora Bosch en Duin BV

1

0%

0%

Martha Flora Hilversum BV

1

0%

0%

Martha Flora Lochem BV

1

0%

0%

Domus Magnus

4

1%

2%

DM Benvenuta BV

1

0%

0%

DM Molenenk BV

1

0%

1%

DM Walgaerde BV

1

0%

0%

Panta Rhei V BV

1

1%

1%

Stepping Stones Home & Care 2

6

1%

1%

Poort van Sachsen Weimar BV

1

0%

0%

Stepping Stones Leusden BV

1

0%

0%

Stepping Stones Zwolle BV

1

0%

0%

Villa Spes Nostra BV

1

0%

0%

Stepping Stones Home & Care Holding BV

2

0%

0%

Het Gouden Hart 1

4

1%

1%

Het Gouden Hart Driebergen BV

1

0%

0%

Het Gouden Hart Kampen Holding BV

1

0%

0%

Het Gouden Hart van Leersum BV

1

0%

0%

HGH Wonen I BV

1

0%

0%

Other

1

1%

1%

Stichting Zorggroep Noorderboog

1

1%

1%

Stichting Nusantara

1

0%

0%

Stichting Nusantara

1

0%

0%

Stichting Oosterlengte

3

0%

0%

Multi tenant

2

0%

0%

Stichting Oosterlengte

1

0%

0%

Stichting Leger des Heils Welzijns- en Gezondheidszorg

1

0%

0%

Stichting Leger des Heils Welzijns- en Gezondheidszorg

1

0%

0%

Orpea

1

0%

0%

September Nijverdal BV

1

0%

0%

Omega

1

0%

0%

Omega

1

0%

0%

Stichting Rendant

1

0%

0%

Stichting Rendant

1

0%

0%

  1. In February 2020, Korian Group has taken over the operation of 12 sites of Aedifica's portfolio, which were initially operated by Het Gouden Hart and Ontzorgd Wonen Groep. See section 3.5 of the Interim Management Report above.
  2. Korian Group.

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Country

Group controlling the legal

Tenants

Number

31/12/2019

30/06/2019

entities in contractual

of sites

relation with Aedifica

United Kingdom

91

26%

27%

Maria Mallaband

12

5%

5%

Belvoir Vale Care Homes Ltd

1

1%

1%

Countrywide Care

1

0%

0%

MMCG (2) Ltd

9

4%

3%

MMCG (3) Ltd

1

1%

1%

Burlington

19

5%

5%

Burlington Care (Yorkshire) Ltd

7

2%

2%

Burlington Care Ltd

12

3%

3%

Care UK

12

3%

3%

Care UK Community Partnership Ltd

12

3%

3%

Bondcare Group

12

3%

3%

Bondcare (London) Ltd

9

2%

2%

Ultima Care Centres (No 1) Ltd

3

2%

2%

Other

4

2%

2%

Amore Elderly Care (Wednesfield) Ltd

1

0%

0%

Athorpe Health Care Ltd

1

0%

0%

Autism Care (UK) Ltd

1

1%

1%

Burgess Care Ltd

1

1%

1%

Renaissance

8

2%

2%

Renaissance Care (No 1) Ltd

8

2%

2%

Four Seasons

6

2%

2%

Four Seasons (Beechcare) Ltd

1

1%

0%

Four Seasons (DFK) Ltd

2

0%

1%

Four Seasons (FJBK) Ltd

1

0%

0%

Laurels Lodge Ltd

1

0%

0%

Tamaris Management Services Ltd

1

0%

0%

Brighterkind

3

1%

1%

Brighterkind (Quercus) Ltd

1

0%

0%

Highfields Care Home Ltd

1

0%

0%

Four Seasons (DKF) Ltd

1

0%

0%

Caring Homes

4

1%

1%

Brooklyn House Ltd

1

0%

0%

Guysfield House Ltd

1

0%

0%

Sanford House Ltd

1

0%

0%

Stour Sudbury Ltd

1

0%

0%

Harbour Healthcare

4

1%

1%

Harbour Healthcare 2 Ltd

4

1%

1%

Halcyon Care Homes

1

1%

0%

Halcyon Care Homes Ltd

1

1%

0%

Majesticare

3

1%

1%

Majesticare (Lashbook) Ltd

1

0%

0%

Majesticare (Oak Lodge) Ltd

1

0%

0%

Majesticare (The Mount) Ltd

1

0%

0%

Select Healthcare

3

1%

1%

DRB Healthcare Ltd

3

1%

1%

TOTAL

290

100%

100%

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3. The healthcare real estate market

3.1. Belgium19

In recent years, the number of rest home beds in Belgium has steadily increased to reach a capacity of approx. 150,000 units. According to demographic forecasts, and given the increased life expectancy, a deficit between this increased supply and demand seems to persist in the long term. The split of these beds between different types of operators remains relatively stable. In Flanders, public operators manage 30% of the beds, while not-for-profit operators and private operators manage 37% and 33%, respectively. In Wallonia, public operators manage 2% of the beds, not-for-profit operators manage 21% and private operators manage 50%. In Brussels, the number of beds managed by the private sector exceeds 60%. Given the increasing trend toward professionalisation, private operators are urged to consolidate and to improve their organisation. At present, the three main private operators (Colisée through Armonea, Orpea and Korian through Senior Living Group) manage more than 23,000 beds - approx. 17% of all beds in Belgium.

Considering the latest data, life expectancy in Belgium and Europe is increasing, reaching 78.2 years for men and 83.2 years for women. This trend will continue during the coming years, reaching 81 years for men, and 85.7 years for women, by 2030. Given the fact that the period during which elderly people suffer from health problems remains stable (about 15 years for men and 18 years for women), progress in terms of health care, home automation and home care will play an increasingly important role in limiting an early relocation to residential care facilities. As a result, people tend to transfer to a rest home around the age of 86 (in average); their average stay remains stable at 580 to 590 days. Nevertheless, the length of stay in residential care homes seems to be decreasing slightly. For newcomers, the average length of stay is currently around 370 days.

Moreover, the latest Eurostat demographic perspectives show that aging is continuing in both Europe and Belgium. The number of Belgians aged 80 and over is expected to grow from 610,000 to 790,000 by 2030, an increase of 180,000 people in 15 years or 12,000 per year. According to the OCDE, the need for care in rest homes increases with age: 25% of 75-year-olds, 30% to 40% of 80-year-olds, and more than 50% of those aged 85 and above. Based on this data, the need for new beds in residential care facilities is estimated at 3,000 to 4,000 per year. In Flanders, the need for new beds is significantly higher than in Brussels or Wallonia.

In this regard, it seems logical that health care real estate is becoming increasingly attractive to investors. The (very) long-term contracts with operators, indexed rents, and triple net leases are key factors for REITs, which were the first to enter this market, as well as for insurance companies and pension funds. The main elements for investors are the operator's solvency and the future sustainability of subsidies.

Since 2012, an average of more than €200 million has been invested annually in the Belgian healthcare real estate sector (approx. €300 million in 2015 and 2016). In 2019, the volume of investments in Belgian healthcare real estate reached a record high of more than €480 million, mainly due to the acquisition of large portfolios by various RRECs.This trend is increasing. Given the attractiveness of investments in healthcare real estate, the increased professionalisation of operators and historically low interest rates, gross rental yields are decreasing. While prime yields (based on long-term triple net leases) amounted to more than 6% in 2011-2012, they are, at the end of 2018, below the 5% threshold.The most recent

19Written in French on 3 February 2020 by Cushman & Wakefield Belgium NV/SA, and reproduced with permission.

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transactions in 2019 indicate that the initial net return has fallen even further to 4.5%, the lowest level to date. In this context, the quality, versatility and overall sustainability of investment properties are becoming even more important.

To increase the flexibility and complementarity of real estate properties, several initiatives have been undertaken in recent years to bring together residential sites so as to provide service to several types of dependent persons. (such as service-residences or accommodation for youth with disabilities).

Given the above-mentioned demographic perspectives and the specificity of the healthcare real estate sector, it seems clear that the investment market can be expected to continue to thrive in the years to come. It is possible new actors will be attracted to the market, but the presence of the existing actors is ensured, given the benefits arising from their profound knowledge of the sector. In the coming months, yields are not expected to experience further compression.

3.2. Germany20

The German healthcare market is a growth market. According to the German Statistical Office, more than three million people in Germany are currently in need of care given the terms of the German social security code. Within the next years, the share of people in need of care within the total population is estimated to grow significantly. According to the most recent data, as of the end of 2017, Germany had approx. 82.8 million inhabitants, of which around 17.7 million aged over 65 and a total of 3.4 million people in need of care. Of these 3.4 million, 2.59 million (76%) were cared for at home (68% by caregiving relatives and 32% by out-patient care services). 818,000 of the people in need of care were cared for in full-time care homes. By the year 2030, up to 3.5 million people in need of care are expected, but the number of caregiving relatives for informal care however, is set to decline. This is caused by the changes of the demographic structure within the population, altered family structures, greater distances between the homes of family members and the increased number of middle-age and older employed women. Population ageing will be further amplified by the generation of babyboomers, born between 1956 and 1965, who have already reached 60 years of age or who will turn 60 in the coming years. Consequently, the need for senior housing will increase over the next decades.

At the end of 2018, there are approx. 952,000 beds in more than 14,400 care homes in Germany, of which 94% cater to seniors and 6% cater to disabled persons or people who suffer from mental health disorders or terminal illness. These care homes are operated by not-for-profit operators (approx. 53%), private operators (approx. 42%) and public operators (approx. 5%).

According to various market studies, the capacity of care homes needs to increase by approx. 340,000 units by 2030. Thus, the ageing population offers significant growth potential and consolidation opportunities in the collective healthcare property sector in Germany.

In 2019, the investment volume in the German healthcare real estate market amounted to approx. €2.1 billion. This volume was mainly invested in rest homes (approx. €1.2 billion), followed by senior housing and assisted-living housing (€470 million), medical centres (€263 million) and hospitals (€135 million). With a transaction volume of €757 million, the fourth quarter of 2019 was the strongest last quarter ever in the German healthcare real estate market. The transactions were mainly realised by international investors, which accounted for 62% (approx. €1.3 million) of the total transaction volume.

20Written in English on 14 January 2020 by CBRE GmbH, and reproduced with permission.

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Investors from European countries were particularly active and accounted for 92% of the total volume of transactions (38% of the total came from investors from Germany, followed by investors from France (33%) and Belgium (10%)).

At the end of 2019, the 'prime' net yield for rest homes decreased by 0.25% to 4.50%. Healthcare properties are still seen as a sustainable and common asset class, where transactions with a yield below 5% have occasionally already been registered. Moreover, thanks to a higher quality of the buildings compared to the past, healthcare real estate sites are less quickly declared outdated, as a result of which the risk premium for care properties as an asset class continues to decrease.

In 2020, the great interest of investors in healthcare real estate will continue and will only be slowed down by the availability of real estate on the market. The possibilities for building and creating new rest home capacity are limited for all market players, whether they are operators, developers, investors or the company. One of the reasons for this is the lack of construction sites. Compared to other types of real estate, the high costs of construction sites and construction works are often not economically viable in the case of healthcare real estate. However, the lack of construction sites also has a positive effect: operators are once again investing more in existing sites and renovations. In 2019, approx. €400 million was invested in new construction projects or renovated buildings, which corresponds to approx. 19% of the total volume of healthcare real estate investments.

3.3. The Netherlands21

The Netherlands currently has a population of approx. 17.4 million inhabitants. The Central Bureau of Statistics predicts a slight growth in the population, to reach 18.3 million inhabitants by 2040. Population growth beyond 2040 remains uncertain. It is certain, however, that the number of elderly will increase sharply over this period, from 3.3 million persons over 65 years of age to 4.8 million in 2040 (i.e. 26% of the population), and from 0.8 million persons over 80 years of age to 1.6 million persons in 2040 (i.e. 9% of the population). About 20% of this group requires care, and over 5% need continuous assistance (as provided in traditional care facilities). This latter group often includes individuals suffering from dementia. According to 'Alzheimer Nederland', this number will double by 2040. Consequently, senior care constitutes a significant growth area in The Netherlands.

An increasing portion of these people do not opt for traditional care facilities, but prefer to obtain in- home care or care in private residential care facilities (such as the care residences offered by Domus Magnus, Martha Flora, Het Gouden Hart, Compartijn and Stepping Stones). This is due to a number of factors:

  • the increasing number of elderly persons with some wealth and higher than average education levels;
  • the policy of separating financing for housing and care, which offers more freedom of choice;
  • the high personal contribution required for occupancy in traditional care facilities;
  • the higher expectations of the current generation of seniors and their children;
  • the limited offerings available in traditional care facilities.

21Written in Dutch on 16 January 2020 by DTZ Zadelhoff VOF, and reproduced with permission.

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Dutch private care providers have anticipated these trends: there are already approx. 300 private residential care facilities in the country and it is foreseen that dozens more will open their doors by 2025. According to these trends, it appears that an increasing group of seniors seek - and are able to pay for

  • higher quality services.

On average, a private residential care facility in The Netherlands contains approx. 24 units. The limited number of units is what strengthens and distinguishes them from traditional care facilities and assisted- living apartment facilities, which house between 60 and 200 residents. More than half of the country's private residential care facilities are independently operated. It is expected that an increasing number of operators will manage multiple sites.

3.4. United Kingdom22

The United Kingdom is one of the largest markets in Europe with attractive fundamentals supporting healthcare real estate. The elderly population in the UK is expected to grow significantly. In particular, the number of people over 80 years old is expected to more than double by 2050. An increasingly ageing population requiring greater care and nursing needs is expected to continue to drive significant demand for healthcare real estate in the foreseeable future and support a positive outlook for occupancy levels. The UK care home market is still very fragmented and features approx. 5,500 operators, of which a very high portion are independent private players running operations in small and outdated assets. The top five largest care home operators account for 15% of the total bed capacity, while the top 10 represents 20.8%, highlighting the fragmentation of the sector outside of the top tier providers.

Care home operators in the UK are regulated and must be approved by the regulator before and during operations. Care homes in the UK are frequently inspected by the sector regulator, with reports made publicly available.

The funding of the senior housing market in the UK is based on a mixture of public financing (Local Authorities and National Health Services) and private financing (self-payers). The self-pay market has experienced the fastest growth of all funding sources and represents 45% of the overall market. Local Authorities provide social care after an assessment of a person's eligibility for care and their financial position. The portion of residents funded by Local Authorities in care homes represents on average 46%. The National Health Services fund residents who have been assessed as having a primary health need, representing 9% of the market.

Yield spread remains broad with prime assets falling below 4% whilst mid-market and beyond stock sees 7% and above. Despite the fragmented makeup of the market and prevalence of owner operators, by volume the most acquisitive buyer type remains REITS and quoted property companies.

22Written in English on 21 February 2020 by Tom Robinson BA MSc, and reproduced with permission.

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4. Valuation experts' report23

Gentlemen,

We are pleased to send you our estimate of the fair value of investment properties held by the Aedifica group as of 31 December 2019.

Aedifica assigned to each of the seven valuation experts the task of determining the fair value (from which the investment value is derived24) of one part of its portfolio of investment properties. Assessments are established taking into account the remarks and definitions contained in the reports and following the guidelines of the International Valuation Standards issued by the 'IVSC'.

We have acted individually as valuation experts and have a relevant and recognised qualification, as well as an ongoing experience for the location and the type of buildings assessed. The valuation expert's opinion of fair value was primarily derived using comparable recent market transactions on arm's length terms.

Properties are considered in the context of current leases and of all rights and obligations that these commitments entail. We have evaluated each entity individually. Assessments do not take into account a potential value that can be generated by offering the whole portfolio on the market. Assessments do not take into account selling costs applicable to a specific transaction, such as brokerage fees or advertising. Assessments are based on the inspection of real estate properties and information provided by Aedifica (i.e. rental status and surface area, sketches or plans, rental charges and property taxes related to the property, and compliance and pollution matters). The information provided was assumed to be accurate and complete. Assessments are made under the assumption that no non-communicated piece of information is likely to affect the value of the property.

Based on the seven assessments, the consolidated fair value of the portfolio amounted to €2,635,736,65525as of 31 December 2019, including €2,566,917,703 for marketable investment properties26. Contractual rents amounted to €151,031,628 which corresponds to an initial rental yield of 5.88% compared to the fair value of marketable investment properties.

The abovementioned amounts include the fair values and contractual rents of the UK based assets in pound sterling and converted into euro taking the exchange rate as per 31/12/2019 (1.1754 £/€; rate of the last business day of the quarter) into account.

  1. The expert report was reproduced with the agreement of Cushman & Wakefield Belgium NV/SA, Deloitte Consulting & Advisory CVBA/SCRL, CBRE GmbH, Jones Lang LaSalle SE, DTZ Zadelhoff VOF, Savills Consultancy BV and Cushman & Wakefield Debenham Tie Leung Limited. The sum of all elements of the portfolio individually assessed by the abovementioned valuation experts constitutes Aedifica's whole consolidated portfolio.
  2. 'Investment value' is defined by Aedifica as the value assessed by a valuation expert, of which transfer costs are not deducted
    (also known as 'gross capital value').
  3. The abovementioned portfolio is broken down in two lines on the balance sheet (lines 'I.C. Investment properties' and 'II.A. Assets classified as held for sale').
  4. 'Marketable investment properties' are defined by Aedifica as investment properties including assets classified as held for sale and excluding development projects. Marketable investment properties are hence completed properties that are let or lettable.

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As of 31 December 2019:

  • the consolidated fair value of the assets located in Belgium amounted to €1,056,936,866; including 1,050,400,914 for marketable investment properties. Contractual rents amounted to €57,200,346 which corresponds to an initial yield of 5.45% to the fair value of the marketable investment properties;
  • the consolidated fair value of the assets located in Germany amounted to €578,840,000; including €543,492,000 for marketable investment properties. Contractual rents amounted to €31,404,329 which corresponds to an initial yield of 5.78% to the fair value of the marketable investment properties;
  • the consolidated fair value of the assets located in The Netherlands amounted to €428,820,000; including €401,885,000 for marketable investment properties. Contractual rents amounted to €22,930,082 which corresponds to an initial yield of 5.71% to the fair value of the marketable investment properties;
  • the consolidated fair value of the assets located in The United Kingdom amounted to £485,911,000 (100% marketable investment properties). Contractual rents amounted to £33,602,919 which corresponds to an initial yield of 6.92% to the fair value of the marketable investment properties.

In the context of a reporting in compliance with the International Financial Reporting Standards, our evaluations reflect the fair value. The fair value is defined by IAS 40 and IFRS 13 as 'the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date'. The IVSC considers that the definition of fair value under IAS 40 and IFRS 13 is generally consistent with market value.

Cushman & Wakefield Belgium SA opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by Cushman & Wakefield Belgium SA is estimated at €536,791,500 and the investment value (before deduction of the transfer costs28) is estimated at €550,596,000.

Christophe Ackermans (SPRL)

22 January 2020

Deloitte Consulting & Advisory SCRL opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by Deloitte Consulting

  • Advisory SCRL is estimated at €520,145,366 and the investment value (before deduction of the transfer costs28) is estimated at €533,149,000.

Frédéric Sohet and Patricia Lannoije

22 January 2020

  1. The valuation expert values only a part of Aedifica's portfolio and does not take responsibility for the valuation of the portfolio as a whole. The valuation expert therefore signs only for the accuracy of the figures of the assets he values. No further liability for any other valuation expert will be accepted.
  2. In this context, the transfer costs require adaptation to the market conditions. Based on the analysis of a large number of transactions in Belgium, the Belgian experts acting at the request of publicly traded real estate companies, reunited in a working group, came to the following conclusion: given the various ways to transfer property in Belgium, the weighted average of the transfer costs was estimated at 2.5%, for investment properties with a value in excess of €2.5 million. The investment value corresponds therefore to the fair value plus 2.5% of transfer costs. The fair value is also calculated by dividing the investment value by 1.025. Properties in Belgium below the threshold of €2.5 million remain subject to usual transfer costs (10.0% or 12.5% depending on their location). Their fair value corresponds thus to the value excluding transfer costs. In this specific case, for residential units, the fair value reflects the potential capital gain per apartment, if sold.

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CBRE GmbH opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by CBRE GmbH is estimated at €494,480,000 and the investment value (before deduction of the transfer costs29) is estimated at €529,052,836.

Sandro Höselbarth and Tim Schulte

22 January 2020

Jones Lang LaSalle SE opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by Jones Lang LaSalle SE is estimated as of 31 December 2019 at €84,360,000 and the investment value (before deduction of the transfer costs29) is estimated at €91,186,000.

Peter Tölzel

22 January 2020

DTZ Zadelhoff VOF opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by DTZ Zadelhoff VOF is estimated at €368,140,000 and the investment value (before deduction of the transfer costs30) is estimated at €384,240,000.

Paul Smolenaers and Fabian Pouwelse

22 January 2020

Savills Consultancy BV opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by Savills Consultancy BV is estimated at €60,680,000 and the investment value (before deduction of the transfer costs30) is estimated at €63,080,000.

Martijn Onderstal and Jorn Damhuis

22 January 2020

Cushman & Wakefield Debenham Tie Leung Ltd opinion27:

As of 31 December 2019, the fair value of the part of Aedifica's portfolio valued by Cushman & Wakefield Debenham Tie Leung Limited is estimated at £485,911,000 (equivalent to €571,139,789 based on the exchange rate of 1.1754 £/€ as per 31/12/2019; rate of the last business day of the quarter) and the investment value (before deduction of the transfer costs31) is estimated at £518,003,475 (equivalent to €608,861,285 based on the exchange rate of 1.1754 £/€ as per 31/12/2019; rate of the last business day of the quarter.

Tom Robinson en Martin Robb 22 January 2020

  1. Assets located in Germany are not concerned by the comments in footnote28 above. In the assessment of their investment value, the usual German transfer costs and professional fees are taken into account.
  2. Assets located in the Netherlands are not concerned by the comments in footnote28 above. In the assessment of their investment value, the usual Dutch transfer costs and professional fees are taken into account.
  3. Assets located in the United Kingdom are not concerned by the comments in footnote28 above. In the assessment of their investment value, the usual UK transfer costs are taken into account. The investment value corresponds to the gross value before deduction of SDLT (Stamp Duty Land Tax) and professional fees.

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  1. Condensed consolidated financial statements

1. Consolidated income statement

(x €1,000)

Notes

31/12/2019

31/12/2018

I.

Rental income

71,970

50,798

II.

Writeback of lease payments sold and discounted

0

0

III.

Rental-related charges

-591

8

Net rental income

71,378

50,806

IV.

Recovery of property charges

0

50

V.

Recovery of rental charges and taxes normally paid by tenants on let properties

311

747

VI.

Costs payable by the tenant and borne by the landlord on rental damage and

0

0

repair at end of lease

VII.

Rental charges and taxes normally paid by tenants on let properties

-311

-747

VIII.

Other rental-related income and charges

63

-598

Property result

71,441

50,258

IX.

Technical costs

-136

-722

X.

Commercial costs

-29

-218

XI.

Charges and taxes on unlet properties

0

-81

XII.

Property management costs

-1,850

-846

XIII.

Other property charges

-351

-197

Property charges

-2,366

-2,064

Property operating result

69,075

48,194

XIV.

Overheads

-9,000

-6,083

XV.

Other operating income and charges

-7

24

Operating result before result on portfolio

60,068

42,135

XVI.

Gains and losses on disposals of investment properties

1,268

-70

XVII.

Gains and losses on disposals of other non-financial assets

0

0

XVIII.

Changes in fair value of investment properties

19,980

13,095

XIX.

Other result on portfolio

0

-132

Operating result

81,315

55,028

XX.

Financial income

-10

391

XXI.

Net interest charges

-8,553

-7,542

XXII.

Other financial charges

-1,869

-1,483

XXIII.

Changes in fair value of financial assets and liabilities

7

3,418

-187

Net finance costs

-7,014

-8,821

XXIV.

Share in the profit or loss of associates and joint ventures accounted for using

2,597

0

the equity method

Profit before tax (loss)

76,898

46,207

XXV.

Corporate tax

-7,545

-2,683

XXVI.

Exit tax

-52

-541

Tax expense

-7,597

-3,224

Profit (loss)

69,301

42,983

Attributable to:

Non-controlling interests

127

4,215

Owners of the parent

69,174

38,768

Basic earnings per share (€)

8

2.81

2.12

Diluted earnings per share (€)

8

2.81

2.12

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2. Consolidated statement of comprehensive income

(x €1,000)

31/12/2019

31/12/2018

I.

Profit (loss)

69,301

42,983

II.

Other comprehensive income recyclable under the income statement

A.

Impact on fair value of estimated transaction costs resulting from hypothetical

0

0

disposal of investment properties

B.

Changes in the effective part of the fair value of authorised cash flow hedge

2,390

-1,810

instruments as defined under IFRS

D.

Currency translation differences linked to conversion of foreign activities

19,700

0

H.

Other comprehensive income, net of taxes

554

7,472

Comprehensive income

91,945

48,645

Attributable to:

Non-controlling interests

127

4,215

Owners of the parent

91,818

44,430

3. Consolidated balance sheet

ASSETS

Notes

31/12/2019

30/06/2019

(x €1,000)

I.

Non-current assets

A.

Goodwill

0

0

B.

Intangible assets

474

407

C.

Investment properties

4

2,627,468

2,315,709

D.

Other tangible assets

3,305

1,326

E.

Non-current financial assets

25,068

307

F.

Finance lease receivables

0

0

G.

Trade receivables and other non-current assets

0

0

H.

Deferred tax assets

115

0

I.

Equity-accounted investments

35,853

33,931

Total non-current assets

2,692,283

2,351,680

II.

Current assets

A.

Assets classified as held for sale

4

8,268

5,240

B.

Current financial assets

0

0

C.

Finance lease receivables

0

0

D.

Trade receivables

9,206

11,216

E.

Tax receivables and other current assets

2,202

1,257

F.

Cash and cash equivalents

6

14,980

15,405

G.

Deferred charges and accrued income

1,916

1,329

Total current assets

36,572

34,447

TOTAL ASSETS

2,728,856

2,386,127

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EQUITY AND LIABILITIES

Notes

31/12/2019

30/06/2019

(x €1,000)

EQUITY

I.

Issued capital and reserves attributable to owners of the parent

A.

Capital

5

624,713

624,713

B.

Share premium account

565,068

565,068

C.

Reserves

208,187

116,271

a. Legal reserve

0

0

b. Reserve for the balance of changes in fair value of investment properties

286,852

171,274

c. Reserve for estimated transaction costs resulting from hypothetical disposal

-85,918

-40,977

of investment properties

d. Reserve for the balance of changes in fair value of authorised hedging

-22,020

-24,960

instruments qualifying for hedge accounting as defined under IFRS

e. Reserve for the balance of changes in fair value of authorised hedging

-25,901

-18,991

instruments not qualifying for hedge accounting as defined under IFRS

f. Reserve of exchange differences relating to foreign curency monetary items

8,225

-4,573

g. Foreign currency translation reserves

2,809

-4,093

h. Reserve for treasury shares

0

0

k. Reserve for deferred taxes on investment properties located abroad

-9,463

-3,824

m. Other reserves

4,350

796

n. Result brought forward from previous years

49,253

41,619

D.

Profit (loss) of the year

69,174

123,497

Equity attributable to owners of the parent

1,467,142

1,429,549

II.

Non-controlling interests

4,450

103

TOTAL EQUITY

1,471,592

1,429,652

LIABILITIES

I.

Non-current liabilities

A.

Provisions

0

0

B.

Non-current financial debts

6

756,250

584,193

a. Borrowings

741,281

569,226

c. Other

14,969

14,967

C.

Other non-current financial liabilities

49,185

52,774

a. Authorised hedges

7

42,705

48,170

b. Other

6,480

4,604

D.

Trade debts and other non-current debts

0

0

E.

Other non-current liabilities

0

0

F.

Deferred tax liabilities

15,696

11,848

Non-current liabilities

821,131

648,815

II.

Current liabilities

A.

Provisions

0

0

B.

Current financial debts

8

406,640

272,317

a. Borrowings

181,640

172,317

c. Other

225,000

100,000

C.

Other current financial liabilities

9

496

0

D.

Trade debts and other current debts

24,941

27,044

a. Exit tax

1,125

3,106

b. Other

23,816

23,938

E.

Other current liabilities

0

0

F.

Accrued charges and deferred income

4,055

8,299

Total current liabilities

436,132

307,660

TOTAL LIABILITIES

1,257,263

956,475

TOTAL EQUITY AND LIABILITIES

2,728,856

2,386,127

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4. Consolidated cash flow statement

(x €1,000)

31/12/2019

31/12/2018

CASH FLOW FROM OPERATING ACTIVITIES

Profit (loss)

69,174

38,768

Non-controlling interests

127

4,215

Tax expense

7,597

2,683

Amortisation and depreciation

626

156

Write-downs

590

-9

Change in fair value of investment properties (+/-)

-19,980

-13,095

Gains and losses on disposals of investment properties

-1,268

70

Net finance costs

8,222

9,375

Changes in fair of the derivatives°

-3,773

0

Goodwill impairment

0

0

Change in fair value of investments in entities consolidated through equity method

-1,922

0

Changes in trade receivables (+/-)

1,420

-3,065

Changes in tax receivables and other current assets (+/-)

-9,469

-151

Changes in deferred charges and accrued income (+/-)

-571

-62

Changes in trade payables and other current debts (excl. exit tax) (+/-)

-264

-4,227

Changes in accrued charges and deferred income (+/-)

-4,244

425

Cash generated from operations

46,265

35,083

Taxes paid

-5,703

-4,953

Net cash from operating activities

40,562

30,130

CASH FLOW RESULTING FROM INVESTING ACTIVITIES

Purchase of intangible assets

-67

-34

Purchase of real estate companies and marketable investment properties

-218,018

-164,316

Purchase of tangible assets

-461

235

Net variation of tangible assets in leasing (IFRS 16)°°

-2,144

0

Purchase of development projects

-1,583

-44,561

Disposals of investment properties

6,388

64,986

Net changes in non-current receivables

-23,753

-3

Net investments in other assets

-47,733

0

Net cash from investing activities

-287,371

-143,693

CASH FLOW FROM FINANCING ACTIVITIES

Capital increase, net of costs°°°

0

0

Disposals of treasury shares

0

0

Dividend for previous fiscal year

-54,388

-28,206

Net changes in borrowings

298,156

90,427

Net variation of leasing debts (IFRS 16)°°

2,194

0

Net changes in other non-current financial liabilities

191

99,696

Net financial items received (+) / paid (-)

231

-8,788

Repayment of financial debts of acquired or merged companies°°°°

0

-13,030

Repayment of working capital of acquired or merged companies°°°°

0

-29,941

Net cash from financing activities

246,384

110,158

TOTAL CASH FLOW FOR THE PERIOD

Total cash flow for the period

-425

-3,405

RECONCILIATION WITH BALANCE SHEET

Cash and cash equivalents at beginning of period

15,405

10,589

Total cash flow for the period

-425

-3,405

Cash and cash equivalents at end of period

14,980

7,184

° In comparative figures, the changes in fair value of the derivatives are presented on the line 'Net finance costs'.

  • The first time application of IFRS 16 generates a parallel increase of the tangible assets in leasing and of the leasing debts which do not constitute real cash flows.

°°° Some types of capital increases (contributions in kind, partial demergers) do not result in any cash flow.

  • On 31 December 2019, repayments of financial debts and of working capital of acquired or merged companies are included in the cash flow resulting from investing activities under the line 'Purchase of real estate companies and marketable investment properties'.

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5. Consolidated statement of changes in equity

(x €1,000)

1/07/2018

Capital

Capital

Acquisitions

Consolidated

Appropriation

Other

31/12/2018

increase

increase

/ disposals

comprehensive

of the result

transfers

in cash

in kind

of treasury

income

and

shares

roundings

Capital

465,126

0

6,262

0

0

0

0

471,388

Share premium account

297,569

0

11,034

0

0

0

1

308,604

Reserves

107,097

0

0

0

5,663

26,354

3

139,117

a. Legal reserve

0

0

0

0

0

0

0

0

b. Reserve for the balance

153,582

0

0

0

0

22,256

0

175,838

of changes in fair value of

investment properties

c. Reserve for estimated

-37,953

0

0

0

0

-6,792

-1

-44,746

transaction costs resulting

from hypothetical disposal

of investment properties

d. Reserve for the balance

-16,436

0

0

0

-1,256

-11

0

-17,703

of changes in fair value of

authorised hedging

instruments qualifying for

hedge accounting as

defined under IFRS

e. Reserve for the balance

-17,659

0

0

0

0

-1,332

0

-18,991

of changes in fair value of

authorised hedging

instruments not qualifying

for hedge accounting as

defined under IFRS

h. Reserve for treasury

0

0

0

0

0

0

0

0

shares

k. Reserve for deferred

-1,311

0

0

0

0

-2,513

0

-3,824

taxes on investment

properties located abroad

m. Other reserves

-1,957

0

0

0

6,919

1,957

-1

6,918

n. Result brought forward

28,831

0

0

0

0

12,789

-1

41,619

from previous years

Profit (loss)

71,855

0

0

0

38,768

-71,855

0

38,768

Equity attributable to

941,647

0

17,296

0

44,431

-45,501

-2

957,871

owners of the parent

Non-controlling interests

0

0

0

0

4,215

0

58,509

62,724

TOTAL EQUITY

941,647

0

17,296

0

48,646

-45,501

58,507

1,020,595

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(x €1,000)

1/07/2019

Capital

Capital

Acquisitions

Consolidated

Appropriation

Other

31/12/2019

increase

increase

/ disposals

comprehensive

of the result

transfers

in cash

in kind

of treasury

income

and

shares

roundings

Capital

624,713

0

0

0

0

0

0

624,713

Share premium account

565,068

0

0

0

0

0

0

565,068

Reserves

116,271

0

0

0

22,644

69,272

0

208,187

a. Legal reserve

0

0

0

0

0

0

0

0

b. Reserve for the balance of

171,274

0

0

0

0

115,578

0

286,852

changes in fair value of

investment properties

c. Reserve for estimated

-40,977

0

0

0

0

-44,941

0

-85,918

transaction costs resulting from

hypothetical disposal of

investment properties

d. Reserve for the balance of

-24,960

0

0

0

2,944

-4

0

-22,020

changes in fair value of

authorised hedging

instruments qualifying for

hedge accounting as defined

under IFRS

e. Reserve for the balance of

-18,991

0

0

0

0

-6,910

0

-25,901

changes in fair value of

authorised hedging

instruments not qualifying for

hedge accounting as defined

under IFRS

f. Reserve of exchange

-4,573

0

0

0

12,798

0

0

8,225

differences relating to foreign

curency monetary items

g. Foreign currency translation

-4,093

0

0

0

6,902

0

0

2,809

reserves

h. Reserve for treasury shares

0

0

0

0

0

0

0

0

k. Reserve for deferred taxes

-3,824

0

0

0

0

-5,639

0

-9,463

on investment properties

located abroad

m. Other reserves

796

0

0

0

0

3,554

0

4,350

n. Result brought forward from

41,619

0

0

0

0

7,634

0

49,253

previous years

Profit (loss)

123,497

0

0

0

69,174

-123,497

0

69,174

Equity attributable to owners of

1,429,549

0

0

0

91,818

-54,225

0

1,467,142

the parent

Non-controlling interests

103

0

0

0

127

0

4,220

4,450

TOTAL EQUITY

1,429,652

0

0

0

91,945

-54,225

4,220

1,471,592

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6. Notes

Note 1: General information

Aedifica NV/SA (referred to in the Condensed Consolidated Financial Statements as 'the Company' or 'the Parent') is a limited liability company that has opted for a Public Regulated Real Estate Company (RREC) status under Belgian law. The address of its registered office is:

Rue Belliard 40, B-1040 Brussels (telephone: +32 (0)2 626 07 70).

The Aedifica Group (referred to in the Condensed Consolidated Financial Statements as 'the Group') is composed of the parent-company and its subsidiaries.

Aedifica has been quoted on Euronext Brussels (since 2006) and Euronext Amsterdam (since 2019).

The Condensed Consolidated Financial Statements as of 31 December 2019 were approved by the Board of Directors on 18 February 2020.

Note 2: Accounting policies

The Condensed Consolidated Financial Statements cover the period from 1 July to 31 December 2019. They have been prepared in accordance with the International Financial Reporting Standards ('IFRS') and, in particular, the IAS 34 standard on Interim Financial Reporting. These standards comprise the associated standards and interpretations as published by the International Accounting Standards Board ('IASB') and the International Financial Reporting Interpretations Committee ('IFRIC'), to the extent to which they are applicable to the Group's activities and are effective for the financial years starting on or after 30 June 2019. The Condensed Consolidated Financial Statements have also been prepared in accordance with the Royal Decree of 13 July 2014 on Regulated Real Estate Companies.

Condensed Consolidated Financial Statements are drawn up in euros and presented in thousands of euros.

The specific principles for financial reporting are summarised in Note 2.2 of the 2018/2019 Consolidated Financial Statements. These methods were applied consistently to all previous financial years.

The new and amended standards and interpretations listed below are compulsory for the Group since

1 July 2019, but had no significant impact on the current Condensed Consolidated Financial Statements:

  • 'Annual Improvements to IFRS Standards2015-2017 Cycle' issued in December 2017;
  • amendment to IAS 19 'Plan Amendment, Curtailment or Settlement';
  • amendment to IAS 28 'Investments in Associates and Joint Ventures';
  • new interpretation for IFRIC 23 'Uncertainty over Income Tax Treatments';
  • amendment to IFRS 9 'Prepayment Features with Negative Compensation';

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  • new standard for IFRS 16 'Leases':
    IFRS 16 provides a comprehensive model for lessors and lessees alike to identify lease agreements and their accounting processing in the annual accounts. When it entered into force, this standard replaced IAS 17 'Leases' and the accompanying interpretations. IFRS 16 introduces important changes regarding the accounting processing of lease agreements for the lessee, whereby the distinction between operational and financial leases ceases to exist and assets and liabilities are recognised for all lease agreements (save exceptions for short-term leases or assets having a low value). In contrast to the lessee's processing of the lease agreements, IFRS 16 retains almost all the provisions of IAS 17 'Leases' relating to the lessor's processing of the lease agreements. This means that lessors must continue to classify the lease agreements as operational or financial lease agreements.
    Since Aedifica acts almost exclusively as a lessor, IFRS 16 will have no material impact on the consolidated financial statements. A user right and accompanying obligation must be recognised in the statutory and consolidated annual accounts in the limited cases where Aedifica is the lessee in lease agreements classified as operational leases under IAS 17 and these contracts do not fall under the exceptions as laid down in IFRS 16 (e.g. car rental, real estate used by the Group, etc.). The total amount capitalised as a result of the application of IFRS 16 corresponds to the net fair value of the company cars and the building used by the Group as an office. The impact on the consolidated balance sheet as of 31 December 2019 is €2.1 million. This value is depreciated on a straight-line basis over the term of the contracts. A debt corresponding to the net current value is entered in the accounts for this. This debt is amortised using the 'effective interest method'.

Certain new standards, amendments and interpretations of existing standards have been published and will be compulsory for financial years starting on or after 1 July 2020. These amendments, which the Group did not apply early, are as follows (situation as at 23 January 2020):

  • new standard for IFRS 14 'Regulatory Deferral Accounts' (for which no application date can be determined because the EU has decided not to start the approval process of this provisional standard, pending the publication of a final standard);
  • new standard for IFRS 17 'Insurance Contracts' (applicable from 1 July 2021, subject to EU approval);
  • 'Amendments to References to the Conceptual Framework in IFRS Standards' published in March 2019 (applicable from 1 July 2020);
  • amendment to IFRS 3 'Business Combinations' (applicable from 1 July 2020, subject to EU approval);
  • amendments to IFRS 9 and 7 and IAS 39 'Interest Rate Benchmark Reform' (applicable from 1 July 2020);
  • amendments to IAS 1 and IAS 8, 'Definition of Material', (applicable from 1 July 2020).

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Note 3: operating segments

Pursuant to the divestments that were carried out in the course of the 2018/2019 financial year and Aedifica's focus on healthcare real estate, it was decided to adjust the segmented information of the operational result and to classify it geographically as from the financial year that started on 1 July 2019. This segmentation reflects the geographic markets in which Aedifica operates and is consistent with the Group's organisation.

31 december 2019

(x €1,000)

Belgium

Germany

Netherlands

United

Non-

Inter-

TOTAL

Kingdom

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

28,454

13,549

10,910

19,056

0

0

71,970

Net rental income (b)

28,417

13,545

10,910

18,506

0

0

71,378

Property result (c)

28,419

13,537

10,979

18,506

0

0

71,441

Property operating result (d)

28,433

12,911

10,546

17,185

0

0

69,075

OPERATING RESULT BEFORE

28,433

12,912

10,545

17,185

-9,007

0

60,068

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

97%

EBIT margin* (e)/(b)

84%

Operating charges* (e)-(b)

11,310

SEGMENT ASSETS

Marketable investment properties

1,042,133

547,992

397,385

571,140

-

-

2,558,650

Development projects

6,536

35,348

26,935

-

0

-

68,819

INVESTMENT PROPERTIES

0

2,627,469

Assets classified as held for sale

8,268

0

0

0

-

-

8,268

Other assets

-

-

-

-

93,119

-

93,119

TOTAL ASSETS

2,728,856

31 december 2019

(x €1,000)

Healthcare

Apartment

Hotels

Non-

Inter-

TOTAL

real estate

buildings

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

71,970

0

0

0

0

71,970

Net rental income (b)

71,378

0

0

0

0

71,378

Property result (c)

71,441

0

0

0

0

71,441

Property operating result (d)

69,075

0

0

0

0

69,075

OPERATING RESULT BEFORE

69,075

0

0

-9,007

0

60,068

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

97%

EBIT margin* (e)/(b)

84%

Operating charges* (e)-(b)

11,310

SEGMENT ASSETS

Marketable investment properties

2,558,650

0

0

0

0

2,558,650

Development projects

68,819

0

0

0

0

68,819

INVESTMENT PROPERTIES

2,627,469

Assets classified as held for sale

8,268

0

0

0

0

8,268

Other assets

0

0

0

93,119

0

93,119

TOTAL ASSETS

2,728,856

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31/12/2018

(x €1,000)

Healthcare

Apartment

Hotels

Non-

Inter-

TOTAL

real estate

buildings

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

43,519

5,182

2,105

0

-8

50,798

Net rental income (b)

43,514

5,195

2,105

0

-8

50,806

Property result (c)

43,379

4,786

2,101

0

-8

50,258

Property operating result (d)

42,352

3,755

2,095

0

-8

48,194

OPERATING RESULT BEFORE

42,261

3,766

2,094

-5,986

0

42,135

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

95%

EBIT margin* (e)/(b)

83%

Operating charges* (e)-(b)

8,671

SEGMENT ASSETS

Marketable investment properties

1,619,427

215,439

66,710

-

-

1,901,576

Development projects

57,333

-

-

-

-

57,333

INVESTMENT PROPERTIES

1,958,909

Assets classified as held for sale

5,220

0

0

-

-

5,220

Other assets

-

-

-

63,396

-

63,396

TOTAL ASSETS

2,027,525

° Mainly elimination of the internal rent for the administrative offices of the Company.

Note 4: Investment properties

(x €1,000)

Marketable investment

Development

TOTAL

properties

projects

CARRYING AMOUNT AS OF 1/07/2018

1,701,280

35,183

1,736,463

Acquisitions

698,727

13,424

712,151

Disposals

-291,407

0

-291,407

Capitalised interest charges

0

1,083

1,083

Capitalised employee benefits

0

92

92

Other capitalised expenses

6,413

101,191

107,604

Transfers due to completion

86,441

-86,441

0

Changes in fair value

76,382

-13,065

63,317

Other expenses booked in the income statement

0

0

0

Transfers to equity

-12,162

-262

-12,424

Assets classified as held for sale

-1,170

0

-1,170

CARRYING AMOUNT AS OF 30/06/2019

2,264,504

51,205

2,315,709

CARRYING AMOUNT AS OF 1/07/2019

2,264,504

51,205

2,315,709

Acquisitions

222,283

1,524

223,807

Disposals

-5,120

0

-5,120

Capitalised interest charges

0

502

502

Capitalised employee benefits

0

30

30

Other capitalised expenses

8,367

39,013

47,381

Transfers due to completion

16,322

-16,322

0

Changes in fair value

27,114

-7,134

19,980

Other expenses booked in the income statement

0

0

0

Transfers to equity

28,208

0

28,208

Assets classified as held for sale

-3,028

0

-3,028

CARRYING AMOUNT AS OF 31/12/2019

2,558,650

68,818

2,627,469

In addition to the marketable investment properties recognised on the balance sheet under the line 'I.C. Investment properties' among non-current assets, the balance sheet also includes real estate under line 'II.A. Assets classified as held for sale' among current assets, amounting to €8,268 k. This line concerns real estate in Belgium that will be sold (Prinsenhof in Koersel).

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The main acquisitions of investment property during the first half of the current financial year are listed below:

ACQUISITIONS

Country

Properties

Register of

Acquisition

Acquisition method

valuation°

corporations

date°°

(in million €)

Rumah Saya

Netherlands

11

-

9/07/2019

Acquisition of a building

Residentie La Tour

Netherlands

3

-

9/07/2019

Acquisition of a land and project

via Aedifica Nederland 2 BV

Villa Casimir

Netherlands

1

-

9/07/2019

Acquisition of a land and project

via Aedifica Nederland 2 BV

Haus Steinbachhof

Germany

16

-

9/07/2019

Acquisition of a building

Seniorenhaus Wiederitzch

Germany

6

-

9/07/2019

Acquisition of a building

Seniorenwohnpark Hartha

Germany

12

-

9/07/2019

Acquisition of a building

Zur alten Linde

Germany

7

-

9/07/2019

Acquisition of a building

Vinea Domini

Netherlands

1

-

7/08/2019

Acquisition of a land and project

via Aedifica Nederland 2 BV

Wolfsbos

Netherlands

13

-

28/08/2019

Acquisition of a building

De Vecht

Netherlands

11

-

28/08/2019

Acquisition of a building

De Kaap

Netherlands

9

-

28/08/2019

Acquisition of a building

Krakeel

Netherlands

8

-

28/08/2019

Acquisition of a building

WZC Beatrix

Netherlands

4

-

28/08/2019

Acquisition of a building

Seniorenzentrum Weimar

Germany

17

-

1/10/2019

Acquisition of a building

Haus Wellengrund

Germany

3

-

1/11/2019

Acquisition of a building

Natatorium

Netherlands

2

-

28/11/2019

Acquisition of a building

Villa Nuova

Netherlands

2

-

29/11/2019

Acquisition of a building

Aedifica Residenzen West GmbH

Germany

18

HRB206932

17/12/2019

Acquisition of shares

Aedifica Residenzen 3 GmbH

Germany

5

HRB32638

17/12/2019

Acquisition of shares

German Healthcare Real Estate I

Germany

37

B1117448

17/12/2019

Acquisition of shares

Beta SàRL (AL VII)

German Healthcare Real Estate II

Germany

22

B1117437

17/12/2019

Acquisition of shares

Gamma SàRL (AL VIII)

Hazel End Care Home

United

15

-

17/12/2019

Acquisition of a building

Kingdom

TOTAL

222

  • in order to determine the number of shares issued, the exchange ratio and/or the value of the acquired shares. °° and consolidation date in the financial statements.

The main disposals during the first half of the current financial year are listed below:

DISPOSALS

Country

Selling price

Disposals date

(in million €)

De Statenhof Hoogbouw, located Bachstraat 590 in Leiden

Netherlands

6.5

13/12/2019

TOTAL

6.5

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Note 5: Capital

During the course of the half year, Aedifica's capital has increased as follows:

Number of shares

Capital (x €1,000)

Situation at the beginning of the previous year

18,200,829

480,280

Capital increase of 20 November 2018

240,597

6,349

Capital increase of 7 May 2019

6,147,142

162,209

Capital increase of 20 June 2019

12,590

332

Situation at the end of the previous year

24,601,158

649,170

Capital increase

0

0

Situation at the end of the year

24,601,158

649,170

Capital is presented above before subtracting the costs of raising capital; the capital value presented on the balance sheet, is shown net of these costs, in accordance with IFRS.

Aedifica shareholders holding more than 5% of the Company's capital are listed in the table below (as of 31 December 2019, based on the number of shares held by the shareholders concerned as of 5 July 2019)32. According to the definition of Euronext, Aedifica's free float amounts to 100%.

SHAREHOLDERS

Voting rights

(in %)

BlackRock, Inc.

5.00

Others < 5%

95.00

Total

100.00

The capital increases that occurred prior to 30 June 2019 are disclosed in the 'Standing Documents' section of the 2018/2019 Annual Financial Report. All subscribed shares are fully paid-up, with no par value. The shares are registered or dematerialised shares and grant one vote each. All Aedifica shares are listed on the Euronext Brussels (regulated market).

Aedifica SA holds no treasury shares.

The board of directors is authorised to increase the share capital in one or more instalments by a maximum amount of:

  • 1) 50% of the amount of the capital on the date of the extraordinary shareholders' meeting of
    22 October 2019, as the case may be, rounded down to the euro cent for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company;
  • 2) 75% of the amount of the capital on the date of the extraordinary shareholders' meeting of
    22 October 2019, as the case may be, rounded down to the euro cent for capital increases in the framework of the distribution of an optional dividend;
  • 3) 10% of the amount of the capital on the date of the extraordinary shareholders' meeting of
    22 October 2019, as the case may be, rounded down to the euro cent for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the preferential right or priority allocation right, or c. any other kind of capital increase;

32Declarations of transparency (including control strings) are available on Aedifica's website. The Company has not received any additional declarations of transparency since 5 July 2019.

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provided that the capital within the context of the authorized capital can never be increased by an amount that exceeds the legal maximum amount of the capital of € 649,170,038.59, on the dates and in accordance with the terms and conditions as will be determined by the board of directors.

This authorisation is granted for a renewable period of five years, calculated from the publication of the minutes of the extraordinary shareholders' meeting 22 October 2019, in the Annexes to the Belgian Official Gazette.

For each capital increase, the Board of Directors will determine the price, the issue premium (if any) and the terms and conditions of issue of the new securities.

The capital increases that are thus decided on by the board of directors may be subscribed to in cash, in kind, or by means of a mixed contribution, or by incorporation of reserves, including profits carried forward and issue premiums as well as all equity components under Aedifica's statutory IFRS financial statements (drawn up in accordance with the regulations applicable to the regulated real estate companies) which are subject to conversion into capital, with or without the creation of new securities. These capital increases can also be realized through the issue of convertible bonds, subscription rights or bonds repayable in shares or other securities which may give rise to the creation of the same securities.

On 31 December 2019, the balance of the authorised capital amounts to:

  • 1) €324,585,019.29 for capital increases by contribution in cash whereby the possibility is provided for the exercise of the preferential subscription right or the priority allocation right by the shareholders of the Company;
  • 2) €486,877,528.94 for capital increases in the framework of the distribution of an optional dividend;
  • 3) €64,917,003.85 for a. capital increases by contribution in kind, b. capital increases by contribution in cash without the possibility for the shareholders of the Company to exercise the

preferential right or priority allocation right, or c. any other kind of capital increase;

provided that the capital within the context of the authorized capital can never be increased by an amount that exceeds the legal maximum amount of the capital of € 649,170,038.59, on the dates and in accordance with the terms and conditions as will be determined by the board of directors.

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Note 6: Current and non-current financial debts

(x €1,000)

31/12/2019

30/06/2019

Non-current financial debts

756.250

584.193

Credit institutions

741.281

569.226

Other

14.969

14.967

Current financial debts

406.640

272.317

Credit institutions

181.640

172.317

Other

225.000

100.000

TOTAL

1.162.890

856.510

On 31 December 2019, Aedifica had committed credit facilities totalling €1,810 million issued by seventeen credit providers, including fourteen banks (ABN AMRO Bank, Bank für Sozialwirtschaft, Bank Degroof Petercam, Banque Européenne du Crédit Mutuel, Belfius Bank, BNP Paribas Niederlassung Deutschland, BNP Paribas Fortis, Caisse d'Epargne Hauts de France, Deutsche Kreditbank, Deutsche Postbank, ING Belgium, J.P. Morgan Securities, KBC Bank and Triodos Bank), an insurance company (Argenta Assuranties), a savings bank (Argenta Spaarbank) and a syndicated banking group (Groupe BPCE).

  • Aedifica can use up to €1,245 million depending on its needs, so long as thedebt-to-assets ratio does not exceed 60% and other covenants are met (in line with market practice). Each withdrawal is made in euros for a period of up to 12 months, at a fixed margin set with reference to the Euribor rate prevailing at the time of the withdrawal.
  • In order to finance the acquisition of Hoivatilat and to refinance the bridge facility concluded for the acquisition of the healthcare real estate portfolio in the United Kingdom, a new bridge facility was concluded in October 2019 with a duration of 12 months (consisting of two tranches of €300 million and £150 million, respectively, based on the Euribor and the LIBOR). The tranche in British pound was used at the end of November 2019 and was included in current financial debts for an amount of €176 million.
  • Aedifica also benefits from amortising facilities amounting to €53 million at fixed rates between 1.1% and 6.0%, and amounting to €36 million at variable rate.

The amount of the treasury notes programme, which started in June 2018, was increased from €150 million to €300 million at the end of June 2019. This amount comprises €225 million for treasury notes with a maturity of less than one year and €75 million for treasury notes with a maturity of more than one year.

  • Under this programme, Aedifica completed a private placement of €15 million with a maturity of 10 years at a fixed interest rate of 2.176% in late December 2018. This amount is presented on line 'Other' of the'Non-current financial debts'.
  • As of 31 December 2019, theshort-term portion of the treasury notes programme (listed under the heading 'Other' of 'Current financial debts') will be used in full for an amount of €225 million. That amount is fully hedged by the available funds on confirmed long-term credit lines.

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As of 31 December 2019, the Group did not mortgage or pledge any Belgian, Dutch or British building to its creditors. In Germany, however, it is common practice for real estate to be mortgaged as part of bank financing. In this context, 11 of the 67 German buildings were mortgaged. They comply with the requirements of Article 43 of the law of 12 May 2014 on regulated real estate companies.

The classification between current and non-current financial debts is based on the maturity dates of the credit lines on which the drawings are made instead of based on the maturity dates of the drawings.

Taking these elements into account, the maturity dates of the financial debts with Aedifica's seventeen credit providers as of 31 December 2019 are as follows:

Financial debt

Lines

Utilisation

of which

(in € million) 1

treasury

notes

2019/2020

206

206

206

2020/2021

554

254

20

2021/2022

171

76

2022/2023

205

75

2023/2024

225

155

2024/2025

400

224

>2025/2026

290

175

15

Total as of 31 December 2019

2,050

1,165

240

Weighted average maturity (in years) 2

4.5

4.6

  1. Amounts in £ were converted into € based on the exchange rate of 31 December 2019.
  2. Without regard toshort-term treasury notes and the bridge facility.

Without regard to short-term financing (short-term treasury notes and bridge facility), the weighted average maturity of the financial debts as of 31 December 2019 is 4.6 years.

Note 7: Hedging instruments

Almost all of Aedifica's financial debts are floating-rate borrowings. This allows Aedifica to benefit from low interest rates. In order to limit the interest rate risk, Aedifica has put in place hedges that allow for the conversion of floating-rate debt to fixed-rate debt, or to capped-rate debt.

Furthermore, the acquisition of the healthcare portfolio in the United Kingdom in February 2019 has exposed the Group to foreign exchange risk. On 31 December 2019, Aedifica partially hedged the net cash flows resulting from the financial income from intra-group loans and the financial charges of the bridge facility with British pound forward contracts.

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1. Framework

1.1 Management of interest rate risk

All hedges (interest rate swaps or 'IRS' and caps) are related to existing or highly probable risks. Aedifica applies hedge accounting to previously negotiated derivatives that meet the criteria to allow hedge accounting. In accordance with market practices, Aedifica has chosen not to apply hedge accounting to recently negotiated derivatives, even if they meet those strict criteria. Nevertheless, all derivatives provide economic hedging against interest rate risk, regardless of their accounting method. All hedges are provided in the framework of the hedging policy set out in Note 44 of the 2018/2019 Annual Financial Report. The fair value of instruments is calculated by the banks based on the present value of the estimated expected cash flows. This fair value is applied in accordance with IFRS 13 to reflect the company's own credit risk ('debit valuation adjustment' or 'DVA') and the counterparty's credit risk ('credit valuation adjustment' or 'CVA'). The tables below list the Company's hedging instruments.

INSTRUMENT

Notional amount

Beginning

Periodicity

Duration

Hedge

Interest rate

Fair value

Analysis as of

(x €1,000)

(months)

(years)

accounting

(in %)

(x €1,000)

(yes/no)

31 December 2019

IRS

25,000

2/08/2019

3

8

Yes

0.33

-667

IRS

75,000

2/01/2020

3

2

Yes

0.33

-1,048

IRS

50,000

1/01/2021

3

3

Yes

0.80

-1,520

IRS

50,000

3/01/2022

3

2

Yes

0.73

-882

IRS

25,000

2/05/2019

3

6

Yes

1.10

-1,770

IRS

50,000

1/02/2022

3

2

No

0.34

-478

IRS

25,000

1/07/2019

3

6

No

1.69

-2,576

IRS°°

3,500

30/09/2019

3

12

Yes

1.55

-332

IRS

50,000

1/01/2021

3

2

Yes

0.64

-933

IRS°

9,475

1/04/2011

3

32

Yes

4.89

-5,891

IRS

25,000

2/05/2019

3

6

No

1.19

-1,931

IRS

15,000

1/07/2019

3

10

No

2.01

-2,780

IRS

8,000

1/07/2019

3

10

No

2.05

-1,513

IRS

12,000

1/07/2019

3

10

No

1.99

-2,205

IRS

50,000

1/02/2022

3

3

No

0.46

-837

IRS°

23,354

31/07/2014

3

29

No

4.39

-11,111

IRS

25,000

3/07/2019

3

10

Yes

1.04

-2,318

IRS

50,000

1/11/2019

3

5

Yes

0.78

-2,444

IRS

50,000

3/01/2022

3

1

Yes

0.65

-438

IRS

50,000

3/02/2025

3

4

No

0.15

504

IRS

50,000

1/11/2019

3

3

No

0.39

-1,022

CAP

50,000

1/05/2020

3

2

No

0.00

16

CAP

50,000

1/11/2017

3

2

No

0.00

0

CAP

50,000

1/07/2017

3

4

No

0.50

0

CAP

50,000

1/01/2019

3

2

No

0.35

0

CAP

50,000

1/11/2016

3

5

No

0.50

2

CAP

50,000

1/11/2019

3

2

No

0.50

2

CAP

50,000

1/11/2017

3

4

No

0.25

4

CAP

50,000

1/11/2017

3

2

No

0.00

0

CAP

100,000

1/04/2019

3

2

No

0.25

1

CAP

100,000

1/01/2019

3

2

No

0.00

1

CAP

100,000

1/01/2019

3

2

No

0.00

5

CAP

50,000

4/05/2020

3

1

No

0.00

2

CAP

100,000

4/01/2021

3

4

#N/A

0.25

508

TOTAL

1,571,329

-41,654

  • Notional amount depreciable over the duration of the swap. Aedifica and the bank may liquidate in advance these contracts every 10 years.
  • Notional amount depreciable over the duration of the swap.

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INSTRUMENT

Notional

Beginning

Periodicity

Duration

Hedge

Interest rate

Fair value

Analysis as of

amount

(months)

(years)

accounting

(in %)

(x €1,000)

(x €1,000)

(yes/no)

30 June 2019

IRS

25,000

2/11/2016

3

6

Yes

1.30

-1,357

IRS

75,000

2/01/2020

3

2

Yes

0.33

-1,207

IRS

50,000

1/01/2021

3

3

Yes

0.80

-1,653

IRS

50,000

3/01/2022

3

2

Yes

0.73

-961

IRS

25,000

2/05/2019

3

6

Yes

1.10

-2,054

IRS

50,000

1/02/2022

3

2

No

0.34

-553

IRS

25,000

1/07/2019

3

6

No

1.69

-2,937

IRS

50,000

1/01/2021

3

2

Yes

0.64

-1,036

IRS°

9,582

1/04/2011

3

32

Yes

4.89

-6,044

IRS

25,000

2/05/2019

3

6

Yes

1.19

-2,203

IRS

15,000

1/07/2018

3

7

No

3.28

-3,237

IRS

8,000

1/07/2018

3

7

No

3.35

-1,758

IRS

12,000

1/07/2018

3

7

No

3.25

-2,568

IRS

50,000

1/02/2022

3

3

No

0.46

-871

IRS°

23,846

31/07/2014

3

29

No

4.39

-11,505

IRS

25,000

3/04/2017

3

8

No

1.99

-3,069

IRS

50,000

1/11/2019

3

5

Yes

0.78

-2,694

IRS

50,000

3/01/2022

3

1

Yes

0.65

-486

IRS

50,000

1/11/2019

3

3

Yes

0.39

-1,231

IRS°°

3,646

8/10/2018

3

13

No

3.06

-745

CAP

50,000

1/05/2020

3

2

No

0.00

38

CAP

50,000

1/10/2015

3

4

No

0.35

0

CAP

50,000

1/11/2017

3

2

No

0.00

1

CAP

50,000

1/07/2017

3

4

No

0.50

1

CAP

50,000

1/01/2019

3

2

No

0.35

2

CAP

50,000

1/11/2016

3

5

No

0.50

7

CAP

50,000

1/11/2019

3

2

No

0.50

7

CAP

50,000

1/11/2017

3

4

No

0.25

14

CAP

50,000

1/11/2017

3

2

No

0.00

1

CAP

100,000

1/04/2019

3

2

No

0.25

7

CAP

100,000

1/01/2019

3

2

No

0.00

9

CAP

100,000

1/01/2019

3

2

No

0.00

22

CAP

50,000

4/05/2020

3

1

No

0.00

8

TOTAL

1,472,074

-48,053

  • Notional amount depreciable over the duration of the swap. Aedifica and the bank may liquidate in advance these contracts every 10 years. °° Notional amount depreciable over the duration of the swap.

The total notional amount of €1,571 million presented in the table above is broken down as follows:

  • operational and active instruments: €296 million;
  • operational instruments which became out of the money (caps): €550 million;
  • instruments with forward start: €725 million.

The total fair value of the interest rate hedging instruments presented in the table above (-€41,654 k) can be broken down as follows: €1,043 k on line I.E. of the asset side of the consolidated balance sheet and €42,697 k on line I.C.a. of the liability side of the consolidated balance sheet. Taking into account the carrying amount of the upfront premiums paid for the caps (€2,508 k), the effect of the changes in fair value of interest rate hedging instruments on equity amounts to -€44,162 k.

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1.2. Derivatives for which hedge accounting is applied

(x €1,000)

31/12/2019

30/06/2019

Changes in fair of the derivatives

Beginning of the year

-20,922

-11,290

Changes in the effective portion of the fair value of hedging instruments (accrued interests)

3,169

-11,611

Transfer to the income statement of interests paid on hedging instruments

-783

1,979

Transfer to the reserve account regarding revoked designation

0

0

AT YEAR-END

-18,536

-20,922

The amounts recorded in equity will be transferred to net finance costs in line with the payment of interest on the hedged financial debt, between 1 January 2020 and 31 July 2043.

As of 31 December 2019, the equity value includes the effective part (according to IAS 39) of the change in fair value (+€2,390 k) of the financial instruments corresponding to the derivatives for which hedge accounting may be applied, and the ineffective portion of the 2018/2019 financial year (loss of €4 k) that was appropriated by decision of the Annual General Meeting held in October 2019. These financial instruments are 'level 2' derivatives (according to IFRS 13p81). The ineffective part (as defined in IAS 39) is -€11 k as of 31 December 2019.

1.3. Derivatives for which hedge accounting is not applied

The financial result also includes a charge of €4,320 k (30 June 2019: a charge of €5,798 k), arising from the change in the fair value of derivatives for which hedge accounting is not applied (in line with IAS 39, as listed in the framework mentioned above) and the non-linear amortisation of the fair value of terminated derivatives as of their date of termination, which amounts to €554 k (30 June 2019: €1,107 k). The latter is recognised on line 'II. H. Other comprehensive income, net of taxes' of the Consolidated Statement of Comprehensive Income. These financial instruments are 'level 2' derivatives (as defined in IFRS 13p81). The financial result also includes the amortisation of the premiums paid at the time of the subscription to the caps, which amounts to €685 k (30 June 2019: €1,375 k).

1.4. Sensitivity analysis

The fair value of the hedging instruments is determined by the interest rates on the financial markets. These changes partly explain the change in the fair value of the hedging instruments between 1 July 2019 and 31 December 2019. This led to an income of €3,756 k, recognised in the income statement, and to an income of €2,944 k, recognised in equity.

A change in the interest rate curve would impact the fair value of instruments for which hedge accounting is applied (in accordance with IAS 39), and recognised in equity (line 'I.C.d. Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined under IFRS'). All else being equal, a positive change of 10 bps of the interest rate curve at the balance sheet date would have a positive impact on equity in the amount of €2,802 k (€2,832 k as of 30 June 2019). A negative change of 10 bps would have a negative impact in the same range. The impact of a change in the interest rate on the fair value of the instruments for which hedge accounting is not applied cannot be determined as precisely, since options can be embedded within these instruments. The fair value of these options will change in a non-symmetric and non-linear pattern, and is a function of other parameters (e.g. volatility of interest rates). The sensitivity of the 'mark-to-market' value of these instruments to an increase of 10 bps of the interest rate is estimated to have a positive

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impact of €2,034 k (€1,220 k on 30 June 2019) on the income statement. A decrease of 10 bps in the interest rate would have a negative impact on the income statement in the same range.

2. Management of foreign exchange risk

2.1. Framework

All hedges (forward purchase contracts of foreign currencies) are related to existing or highly probable risks. The hedging instruments are derivatives for which Aedifica will not systematically apply hedge accounting and which provide economic hedging against foreign exchange risk. All hedges are provided in the framework of the hedging policy set out in Note 44 of the 2018/2019 Annual Financial Report. The fair value of these instruments is calculated by the banks on the basis of the present value of the estimated cash flows. These financial instruments are 'level 2' derivatives (according to IFRS 13p81). On 31 December 2019, Aedifica partially hedged the net cash flows resulting from the financial income from intra-group loans and the financial charges of the bridge facility with British pound forward contracts. The table below provides a breakdown of the hedging instruments.

TYPE

Contract

Maturity

Purchase/

Currency

Notional

Purchase/

Currency

Echange

Exchange

Fair value

date

sale

amount

sale

value

rate

(x 1,000 €)

(x 1,000 €)

(x 1,000 €)

Forward contract

09/12/2019

31/03/2020

Sale

GBP

1,000

Purchase

EUR

1,183

0.84532

14

Forward contract

09/12/2019

28/02/2020

Purchase

GBP

538

Sale

EUR

638

0.84403

-8

TOTAL

6

The positive fair value of the hedging instruments in the table above is stated on line I.E. of the assets side of the consolidated balance sheet, the negative fair value is stated on line I.E. of the liabilities side of the balance sheet. The effect of the changes in fair value of these hedging instruments on the Company's equity amounts to +€6 k.

2.2. Sensitivity analysis

The fair value of the hedging instruments is determined by the exchange rate fluctuations on the financial markets. The British pound did not change significantly between 19 December 2019 (when the contracts were concluded) and 31 December 2019.

All else being equal, a positive change of 1% of the exchange rates at the balance sheet date would have had a positive impact on the income statement in the amount of €5 k. A negative change of 1% of the exchange rates would have had a negative impact on the income statement in the same amount.

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Note 8: Earnings per share

Earnings per share (« EPS » as defined by IAS 33) are calculated as follows:

31/12/2019

31/12/2018

Profit (loss) (Owners of the parent) (x €1,000)

69,174

38,768

Weighted average number of shares outstanding during the period

24,601,110

18,255,720

Basic EPS (in €)

2.81

2.12

Diluted EPS (in €)

2.81

2.12

The EPRA Earnings* is a performance measure that is not defined by the IFRS standards (see Note 15). Aedifica uses this concept to comply with EPRA recommendations and to monitor operational and financial performance. In Aedifica's case, EPRA Earnings* equals the profit (owners of the parent) after removing exclusively changes in fair value of investment properties (and the movements of deferred taxes related to these), the hedging instruments and the result on the sale of investment properties. It is calculated as follows:

(x €1,000)

31/12/2019

31/12/2018

Profit (loss) (Owners of the parent)

69,174

38,768

- Changes in fair value of investment properties

-19,980

-13,095

- Gain and losses on disposal of investment properties

-1,268

70

- Deferred taxes in respect of EPRA adjustments

3,770

1,845

- Changes in fair value of financial assets and liabilities

-3,418

187

- Negative goodwill / goodwill impairment

0

132

- Share in the profit or loss of associates and joint ventures accounted for using the equity method in

-1,827

0

respect of EPRA corrections

- Non-controlling interests in respect of the above

99

3,833

Roundings

0

-1

EPRA Earnings*

46,550

31,739

Weighted average number of shares outstanding during the period

24,601,110

18,255,720

EPRA Earnings* per share (in €)

1.89

1.74

The calculation in accordance with the model recommended by EPRA is included in Note 15.7.1 of the Condensed Consolidated Financial Statements.

Note 9: Net asset value per share

Net asset value per share (in €)

31/12/2019

30/06/2019

Net asset value after deduction of dividend 2018/2019, excl. changes in fair value of hedging

61.43

57.96

instruments*

Effect of the changes in fair value of hedging instruments

-1.79

-2.05

Net asset value after deduction of dividend 2018/2019

59.64

55.90

Number of share outstanding (excl. treasury shares)

24,601,158

24,601,158

Recall that IFRS requires the presentation of the annual accounts before appropriation. The net asset value of €60.16 per share as of 30 June 2019 (as published in the 2018/2019 Annual Financial Report) thus included the dividend distributed in October 2019, and should now be adjusted by €2.20 per share in order to compare with the value as of 31 December 2019. This amount corresponds to the amount of the total dividend (€54 million) divided by the total number of shares outstanding as of 30 June 2019 (24,601,158).

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Note 10: Contingencies and commitments

A statement of contingencies and commitments as of 30 June 2019 is provided in Note 45 of the Consolidated Financial Statements included in the 2018/2019 Annual Financial Report (see pages 157 - 160). There are no significant changes to be mentioned at the end of the first half of the current financial year, except for the items listed below.

10.1 Redevelopment of two healthcare properties in Roermond (Netherlands)

Aedifica Nederland BV has committed to finance the redevelopment of the healthcare sites Residentie La Tour and Villa Casimir in Roermond for a budget of approx. €8 million. Works are currently in progress.

10.2 Redevelopment of care residence Vinea Domini inSúdwest-Fryslân(Netherlands)

Aedifica Nederland BV has committed to finance the redevelopment of a care residence in Súdwest- Fryslân for a budget of approx. €3 million. The building will be operated by an experienced operator. Works are currently in progress.

10.3 Acquisition of the rest home Seniorenhaus Lessingstrasse in Wurzen (Germany)

Aedifica NV signed an agreement for the acquisition of a rest home to be built in Wurzen. Works are currently in progress. Due to some specific conditions linked to this transaction, the site will be added to Aedifica's portfolio during the third quarter of 2021. The building will be operated by Seniorenhaus Lessingstrasse GmbH. The acquisition price amounts to approx. €7 million.

10.4 Redevelopment of healthcare site Haus Wellengrund in Stemwede (Germany)

Aedifica NV has committed to finance the redevelopment of a healthcare site in Stemwede for a budget of approx. €8 million. The property will be operated by an entity of Argentum Holding GmbH. Works are currently in progress.

10.5 Extension of nine rest homes in the United Kingdom

Aedifica NV has committed to finance extension works on nine rest homes (Bessingby Hall, York House, The Sycamores, Southlands, The Elms & Oakwood, Blenheim, Coplands, Eltandia Hall and Heritage) in the United Kingdom for a budget of approx. €12 million. The rest homes are operated by Burlington Care and Maria Mallaband Care Group. Works on Bessingby Hall are currently in progress. Works on the other eight rest homes are being prepared.

  1. Acquisition and renovation of healthcare site Wohnstift am Weinberg in Kassel (Germany)Aedifica NV signed an agreement for the acquisition and renovation of a healthcare site in Kassel. The property will be operated by Cosiq GmbH. The acquisition price amounts to approx. €10 million. Aedifica has committed to invest a budget of approx. €10 million in the renovation works. Works are currently being prepared.
  2. Acquisition and renovation of rest home BAVARIA Senioren- und Pflegeheim in Sulzbach- Rosenberg (Germany)

Aedifica signed an agreement for the acquisition and renovation of a rest home in Sulzbach-Rosenberg. The property is operated by Auriscare. The acquisition price amounts to approx. €6 million. Aedifica has committed to finance the renovation of the rest home for a budget of approx. €1 million. Works are currently being prepared.

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10.8 Construction of healthcare site Quartier am Rathausmarkt in Bremervörde (Germany)

Aedifica Residenzen West GmbH has committed to finance the construction of a new healthcare site in Bremervörde for a budget of approx. €16 million. The building will be operated by Specht Gruppe. Works are currently being prepared.

10.9 Construction of care residence Villa Nuova in Vorden (Netherlands)

Aedifica Nederland BV has committed to finance the construction of a new care residence in Vorden for a budget of approx. €4.5 million. The building will be operated by Stepping Stones Home & Care (part of the Korian group). Works are currently in progress.

10.10 Construction of four care campuses in Bremen, Weyhe, Langwedel and Sehnde (Germany)

In implementation of the cooperation agreement with Specht Gruppe (point 1.15 of Note 45), Aedifica NV acquired plots of land in Bremen, Weyhe, Langwedel and Sehnde in a third phase through Aedifica Invest NV taking over control of the company Specht Gruppe Drei GmbH (currently Aedifica Residenzen 3 GmbH). On the same date, Aedifica concluded agreements with Residenz Baugesellschaft mbH for the construction of four care campuses on these four plots of land. The works will be financed by Aedifica for a budget of approx. €58 million. The sites will be operated by EMVIA Living. Works are currently in progress.

10.11 Renovation of four rest homes in Berlin and Ueckermünde (Germany)

Through the acquisition of control over two Luxembourg real estate companies, Aedifica NV has acquired five existing rest homes in Germany (Am Stadtpark, Am Schäfersee, Rosengarten and Am Bäkepark in Berlin, and Am Tierpark in Ueckermünde). The five buildings are operated by the Vitanas group. Aedifica has committed to finance the renovation of four rest homes (Am Stadtpark, Am Schäfersee and Rosengarten in Berlin, and am Tierpark in Ueckermünde) for a budget of approx. €23 million. Works are currently being prepared. No works are planned for Am Bäkepark in Berlin.

10.12 Acquisition and renovation of two rest homes in Plön and Wankendorf (Germany)

Aedifica NV has entered into an agreement (under suspensive conditions) for the acquisition and renovation of two existing rest homes in Germany (Am Parnassturm in Plön and Am Marktplatz in Wankendorf). The buildings are operated by the Vitanas group. The total budget to be financed by Aedifica (acquisition price and renovation budget) for the two buildings amounts to approx. €12 million.

10.13 Construction acquisition of a care residence in Grave (Netherlands)

Aedifica Nederland 2 BV has concluded an agreement (under resolutive conditions) for the construction and acquisition of a care residence in Grave. The budget to be financed by Aedifica Nederland 2 BV amounts to approx. €5 million (including land). The building will be operated by an experienced operator.

10.14 Commitments that have already been realised

The commitments presented below, included in Note 45 of the Consolidated Financial Statements within the 2018/2019 Annual Financial Report, have been realised over the first half of the current financial year:

  • renovation of the Plantijn rest home in Kapellen (Belgium) was completed (section 1.1 of Note 45);
  • extension of the't Hoge rest home in Kortrijk (Belgium) was completed (section 1.4 of Note 45);
  • construction of the Seniorenquartier Schwerin care campus in Schwerin (Germany) was completed (section 1.16 of Note 45);
  • acquisition of the Seniorenzentrum Weimar rest home in Weimar (Germany) was completed (section 1.19 of Note 45);

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  • the acquisition of two healthcare sites in Germany (Seniorenwohnpark Hartha in Tharandt and Seniorenpflegezentrum Zur alten Linde in Rabenau) was completed (section 1.27 of Note 45);
  • the acquisition of two healthcare sites in Germany (Haus Steinbachhof in Chemnitz and Seniorenhaus Wiederitzsch in Leipzig) was completed (section 1.29 of Note 45);
  • the renovation of Cowdray Club rest home in Aberdeen (United Kingdom) was completed (section 1.32 of Note 45);
  • the renovation of nine rest homes in the United Kingdom was completed (section 1.33 of Note 45).

Note 11: Dividends paid

The General Meeting of 22 October 2019 approved the distribution of the result as proposed by the Board of Directors for the 2018/2019 financial year. As of 30 October 2019, a gross dividend of €2.80 was paid out for shares entitled to a full dividend (coupon no. 21: €2.38; coupon no. 22: €0.42). Shares temporarily not entitled to a full dividend were granted an adjusted dividend (coupon no. 22: €0.42). After deduction of the withholding tax of 15%, the net dividend amounted to €2.023 for coupon no. 21 and €0.357 for coupon no. 22. The total amount disbursed amounted to approx. €54 million.

Note 12: Subsequent events

  • On 1 January 2020, Aedifica completed the acquisition of the BAVARIA Senioren- und Pflegeheim rest home inSulzbach-Rosenberg (Germany).
  • On 13 January 2020, Aedifica acquired a portfolio of five rest homes in the United Kingdom.
  • On 16 January 2020, the construction work on the care campus Seniorenquartier Kaltenkirchen in Kaltenkirchen (Germany) was completed.
  • On 17 January 2020, Aedifica completed the acquisition of the Wohnstift am Weinberg rest home in Kassel, Germany.
  • On 30 January 2020, Aedifica announced that it controls approx. 98% of the shares in Hoivatilat Oy, in addition to which, on 15 January 2020, Aedifica initiated asqueeze-out procedure to acquire the remaining Hoivatilat shares and to de-list the Hoivatilat shares on Nasdaq Helsinki.
  • On 12 February 2020, Aedifica completed the acquisition of the Am Parnassturm care home in Plön (Germany) and the Am Marktplatz care home in Wankendorf (Germany).

Note 13: Related party transactions

Related party transactions (as defined under IAS 24 and by the Belgian Companies Code) relate exclusively to the remuneration of the members of the Board of Directors and the Management Committee (€2,302 k for the first half of the 2019/2020 financial year; €1,555 k for the first half of the 2018/2019 financial year).

(x €1,000)

31/12/2019

31/12/2018

Short-term benefits

2,069

1,416

Post-employment benefits

98

96

Other long-term benefits

0

0

Termination benefits

0

0

Share-based payments

135

43

Total

2,302

1,555

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Note 14: Consolidation scope

The following entities have been added to the consolidation scope during the first half of the current financial year:

  • Aedifica UK Ltd
  • Aedifica Finance 1 Ltd
  • Aedifica Finance 2 Ltd
  • Aedifica Services BV
  • German Healthcare Real Estate I Beta Sàrl
  • German Healthcare Real Estate II Gamma Sàrl
  • Aureit Holding Oy
  • Aedifica Residenzen West GmbH
  • Aedifica Residenzen 3 GmbH

In the course of the first half of 2019/2020, Aedifica Invest Brugge NV left the consolidation scope. The companies Verlien BVBA, Résidence de la Paix NV and Buitenheide BVBA merged with Aedifica NV on 19 December 2019.

Note 15: Calculation details of the Alternative Performance Measures (APM)

For many years, Aedifica has used Alternative Performance Measures in accordance with ESMA (European Securities and Market Authority) guidelines published on 5 October 2015 in its financial communication. Some of these APM are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of the Company's results and performance. The APM used in this half year financial report are identified with an asterisk (*).

Note 15.1: Investment properties

(x €1,000)

31/12/2019

30/06/2019

Marketable investment properties

2,558,650

2,264,504

+ Development projects

68,818

51,205

Investment properties

2,627,468

2,315,709

+ Assets classified as held for sale

8,268

5,240

Investment properties including assets classified as held for sale*, or

2,635,736

2,320,949

real estate portfolio*

- Development projects

-68,818

-51,205

Marketable investment properties including assets classified as held for sale*, or

2,566,918

2,269,744

investment properties portfolio

Note 15.2: Rental income on a like-for-like basis*

Aedifica uses this concept to illustrate the performance of the investment properties after eliminating the impact of changes in the real estate portfolio.

(x €1,000)

31/12/2019

31/12/2018

Rental income

71,970

50,798

- Scope changes

-30,144

-9,624

= Rental income on a like-for-like basis*

41,826

41,174

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Note 15.3: Operating charges*, operating margin* and EBIT margin*

31 december 2019

(x €1,000)

Belgium

Germany

Netherlands

United

Non-

Inter-

TOTAL

Kingdom

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

28,454

13,549

10,910

19,056

0

0

71,970

Net rental income (b)

28,417

13,545

10,910

18,506

0

0

71,378

Property result (c)

28,419

13,537

10,979

18,506

0

0

71,441

Property operating result (d)

28,433

12,911

10,546

17,185

0

0

69,075

OPERATING RESULT BEFORE

28,433

12,912

10,545

17,185

-9,007

0

60,068

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

97%

EBIT margin* (e)/(b)

84%

Operating charges* (e)-(b)

11,310

31 december 2019

(x €1,000)

Healthcare

Apartment

Hotels

Non-

Inter-

TOTAL

real estate

buildings

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

71,970

0

0

0

0

71,970

Net rental income (b)

71,378

0

0

0

0

71,378

Property result (c)

71,441

0

0

0

0

71,441

Property operating result (d)

69,075

0

0

0

0

69,075

OPERATING RESULT BEFORE

60,068

0

0

0

0

60,068

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

97%

EBIT margin* (e)/(b)

84%

Operating charges* (e)-(b)

11,310

31/12/2018

(x €1,000)

Healthcare

Apartment

Hotels

Non-

Inter-

TOTAL

real estate

buildings

allocated

segment

items°

SEGMENT RESULT

Rental income (a)

43,519

5,182

2,105

0

-8

50,798

Net rental income (b)

43,514

5,195

2,105

0

-8

50,806

Property result (c)

43,379

4,786

2,101

0

-8

50,258

Property operating result (d)

42,352

3,755

2,095

0

-8

48,194

OPERATING RESULT BEFORE

42,261

3,766

2,094

-5,986

0

42,135

RESULT ON PORTFOLIO (e)

Operating margin* (d)/(b)

95%

EBIT margin* (e)/(b)

83%

Operating charges* (e)-(b)

8,671

° Mainly elimination of the internal rent for the administrative offices of the Company.

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Note 15.4: Financial result excl. changes in fair value of financial instruments*

(x €1,000)

31/12/2019

31/12/2018

XX. Financial income

-10

391

XXI. Net interest charges

-8,553

-7,542

XXII. Other financial charges

-1,869

-1,483

Financial result excl. changes in fair value of financial instruments*

-10,432

-8,634

Note 15.5: Interest rate

(x €1,000)

31/12/2019

31/12/2018

XXI. Net interest charges

-8,553

-7,542

Capitalised interests

502

511

Annualised net interest charges (a)

-16,734

-14,756

Net interest charges before annualised capitalised interests (b)

-17,717

-15,755

Weighted average financial debts (c)

990,672

811,878

Average effective interest rate* (a)/(c)

1.7%

1.8%

Average effective interest rate before capitalised interests* (b)/(c)

1.8%

1.9%

On 31 December 2019, the average effective interest rate* (a)/(c) including commitment fees would be 1.9%(31 December 2018: 2.0%).

On 31 December 2019, the average effective interest rate before capitalised interests* (b)/(c) including commitment fees would be 2.0%(31 December 2018: 2.2%).

Note 15.6: Equity and net asset value per share

Aedifica uses equity excl. changes in fair value of hedging instruments* to reflect equity before non-cash effects of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line 'equity attributable to owners of the parent' without cumulated non- cash effects of the revaluation of hedging instruments.

(x €1,000)

31/12/2019

30/06/2019

Equity attributable to owners of the parent

1,467,142

1,429,549

- Effect of the distribution of the dividend 2018/2019

0

-54,223

Sub-total excl. effect of the distribution of the dividend 2018/2019

1,467,142

1,375,326

- Effect of the changes in fair value of hedging instruments

44,156

50,533

Equity excl. changes in fair value of hedging instruments*

1,511,298

1,425,859

Aedifica uses net asset value per share excl. changes in fair value of hedging instruments* to reflect equity per share before the non-cash effect of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line 'equity attributable to owners of the parent' without cumulated non-cash effects of the revaluation of hedging instruments, divided by the number of shares outstanding (after deduction of treasury shares) at the closing date.

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Note 15.7: Key performance indicators according to the EPRA principles

Aedifica supports reporting standardisation, which has been designed to improve the quality and comparability of information. The Company supplies its investors with most of the information recommended by EPRA. The following indicators are considered as APM:

Note 15.7.1: EPRA Earnings*

EPRA Earnings*

31/12/2019

31/12/2018

x €1,000

Earnings (owners of the parent) per IFRS income statement

69,174

38,768

Adjustments to calculate EPRA Earnings*, exclude:

(i) Changes in value of investment properties, development properties held for investment

-19,980

-13,095

and other interests

(ii) Profits or losses on disposal of investment properties, development properties held for

-1,268

70

investment and other interests

(iii) Profits or losses on sales of trading properties including impairment charges in respect

0

0

of trading properties

(iv) Tax on profits or losses on disposals

0

0

(v) Negative goodwill / goodwill impairment

0

132

(vi) Changes in fair value of financial instruments and associated close-out costs

-3,418

187

(vii) Acquisition costs on share deals and non-controlling joint venture interests (IFRS 3)

0

0

(viii) Deferred tax in respect of EPRA adjustments

3,770

1,845

(ix) Adjustments (i) to (viii) above in respect of joint ventures

-1,827

0

(x) Non-controlling interests in respect of the above

99

3,833

Roundings

0

-1

EPRA Earnings* (owners of the parent)

46,550

31,739

Number of shares (Denominator IAS 33)

24,601,110

18,255,720

EPRA Earnings* per Share (EPRA EPS* - in €/share)

1.89

1.74

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Note 15.7.2: EPRA NAV*

EPRA Net Asset Value* (NAV)

31/12/2019

30/06/2019

x €1,000

NAV per the financial statements (owners of the parent)

1,467,143

1,375,325

NAV per the financial statements (in €/share) (owners of the parent)

59.64

55.90

Effect of exercise of options, convertibles and other equity interests (diluted basis)

0

0

Diluted NAV, after the exercise of options, convertibles and other equity interests

1,467,143

1,375,325

Include:

(i.a) Revaluation of investment properties (if IAS 40 cost option is used)

0

0

(i.b) Revaluation of investment properties under construction (IPUC) (if IAS 40 cost option

0

0

is used)

(i.c) Revaluation of other non-current investments

0

0

(ii) Revaluation of tenant leases held as finance leases

0

0

(iii) Revaluation of trading properties

0

0

Exclude:

(iv) Fair value of financial instruments

44,156

50,533

(v.a) Deferred taxes

15,581

11,848

(v.b) Goodwill as a result of deferred taxes

0

0

Include/exclude:

Adjustments (i) to (v) in respect of joint venture interests

0

0

EPRA NAV* (owners of the parent)

1,526,880

1,437,706

Number of shares (Denominator IAS 33)

24,601,158

24,601,158

EPRA NAV* (in €/share) (owners of the parent)

62.07

58.44

The EPRA NAV* values in euro and euro per share as of 30 June 2019 (presented in the table above) were adjusted by €54,223 k (or €2.20 per share) in comparison to the figures published in the 2018/2019 Annual Financial Report, so that they can be compared with the values as of 31 December 2019. This adjustment corresponds to the 2018/2019 gross dividend, which was distributed in October 2019.

Note 15.7.3: EPRA NNNAV*

EPRA Triple Net Asset Value* (NNNAV)

31/12/2019

30/06/2019

x €1,000

EPRA NAV* (owners of the parent)

1,526,880

1,437,706

Include:

(i) Fair value of financial instruments

-44,156

-50,533

(ii) Fair value of debt

-9,392

-7,329

(iii) Deferred taxes

-15,581

-11,848

EPRA NNNAV* (owners of the parent)

1,457,751

1,367,996

Number of shares (Denominator IAS 33)

24,601,158

24,601,158

EPRA NNNAV* (in €/share) (owners of the parent)

59.26

55.61

The EPRA NAV* values in euro and euro per share as of 30 June 2019 (presented in the table above) were adjusted by €54,223 k (or €2.20 per share) in comparison to the figures published in the 2018/2019 Annual Financial Report, so that they can be compared with the values as of 31 December 2019. This adjustment corresponds to the 2018/2019 gross dividend, which was distributed in October 2019.

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Note 15.7.4: EPRA Cost Ratios*

EPRA Cost ratios*

31/12/2019

31/12/2018

x €1,000

Administrative/operating expense line per IFRS statement

-11,901

-8,663

Rental-related charges

-591

8

Recovery of property charges

0

50

Rental charges and taxes normally paid by tenants on let properties

63

-598

Technical costs

-136

-722

Commercial costs

-29

-218

Charges and taxes on unlet properties

0

-81

Property management costs

-1,850

-846

Other property charges

-351

-197

Overheads

-9,000

-6,083

Other operating income and charges

-7

24

EPRA Costs (including direct vacancy costs)* (A)

-11,901

-8,663

Charges and taxes on unlet properties

0

81

EPRA Costs (excluding direct vacancy costs)* (B)

-11,901

-8,582

Gross Rental Income (C)

71,970

50,798

EPRA Cost Ratio (including direct vacancy costs)* (A/C)

17%

17%

EPRA Cost Ratio (excluding direct vacancy costs)* (B/C)

17%

17%

Overhead and operating expenses capitalised (including share of joint ventures)

0

0

Aedifica capitalises some project management costs.

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7. Auditors' report (limited review)

Report of the statutory auditor to the shareholders of Aedifica SA on the review of the interim condensed consolidated financial statements as of 31 December 2019 and for the 6 month period then ended

Introduction

We have reviewed the accompanying interim consolidated balance sheet of Aedifica SA (the 'Company'), and its subsidiaries (collectively referred to as 'the Group') as at 31 December 2019 and the related interim consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the 6 month period then ended, and explanatory notes, collectively, the 'Interim Condensed Consolidated Financial Statements'. These statements show a consolidated balance sheet total of € 2.728.856 thousand and a consolidated profit for the 6 month period then ended of € 69.301 thousand. Management is responsible for the preparation and presentation of these Interim Condensed Consolidated Financial Statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting ('IAS 34') as adopted for use in the European Union. Our responsibility is to express a conclusion on these Interim Condensed Consolidated Financial Statements based on our review.

Scope of Review

We conducted our review in accordance the International Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' applicable to review engagements. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying Interim Condensed Consolidated Financial Statements do not give a true and fair view of the financial position of the Group as at 31 December 2019, and of its financial performance and its cash flows for the 6 month period then ended in accordance with IAS 34.

Brussels, 18 February 2020

EY Réviseurs d'Entreprises SRL Statutory auditor represented by

Joeri Klaykens° Partner

° Acting on behalf of a BVBA/SPRL

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VI. Forward-looking statement

This half year financial report contains forward-looking information involving risks and uncertainties, in particular statements concerning Aedifica's plans, objectives, expectations and intentions. It is brought to the attention of the reader that these statements may involve known or unknown risks and be subject to significant uncertainties related to operational, economic and competitive plans, many of which are outside of Aedifica's control. In the event that some of these risks and uncertainties were to materialise, or should the assumptions prove incorrect, actual results may deviate significantly from those anticipated, expected, projected or estimated. In this context, Aedifica assumes no responsibility for the accuracy of the forward-looking information provided.

VII. Responsible persons statement

Mr. Serge Wibaut, Chairman of Aedifica's Board of Directors, and Mr. Stefaan Gielens, CEO of Aedifica, declare that to the best of their knowledge:

  • the Condensed Consolidated Financial Statements, prepared in accordance with applicable accounting standards, give an accurate picture of the assets, financial situation and the results of Aedifica and the businesses included in the consolidation;
  • the interim Board of Directors' Report contains an accurate account of the important events and key related party transactions that occurred during the first six months of the financial year and their impact on the Condensed Consolidated Financial Statements, and a description of the main risks and uncertainties they face for the remaining months of the financial year.

*****

The English version of this press release constitutes a free translation of the Dutch language text and is made for information purposes only. In case of inconsistency with the Dutch version or inaccuracy of the Dutch translation, the Dutch text shall prevail.

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Table of contents

I.

Interim Management Report ........................................................................................................

2

1.

Summary of the activities since 1 July 2019 ...............................................................................

2

2.

Introduction ..................................................................................................................................

3

3.

Important events ..........................................................................................................................

4

4.

Portfolio as of 31 December 2019 ...............................................................................................

9

5.

Gross yield by segment .............................................................................................................

10

6.

Analysis of the half year consolidated accounts........................................................................

11

7.

Outlook ......................................................................................................................................

18

8.

Principal risks and uncertainties ................................................................................................

19

9.

Related party transactions .........................................................................................................

19

10.

Corporate governance ...........................................................................................................

19

II.

EPRA ............................................................................................................................................

20

III. Aedifica in the stock market ......................................................................................................

21

1.

Stock price and volume .............................................................................................................

21

2.

Graphic illustrations of Aedifica's stock price ............................................................................

23

3.

Shareholding structure ..............................................................................................................

24

4.

Financial calendar......................................................................................................................

24

IV.

Property report............................................................................................................................

25

1.

Consolidated property portfolio..................................................................................................

25

2.

Portfolio analysis as of 31 December 2019 ...............................................................................

32

3.

The healthcare real estate market.............................................................................................

37

4.

Valuation experts' report............................................................................................................

41

V. Condensed consolidated financial statements .......................................................................

44

1.

Consolidated income statement ................................................................................................

44

2.

Consolidated statement of comprehensive income...................................................................

45

3.

Consolidated balance sheet ......................................................................................................

45

4.

Consolidated cash flow statement.............................................................................................

47

5.

Consolidated statement of changes in equity............................................................................

48

6.

Notes .........................................................................................................................................

50

7.

Auditors' report (limited review) .................................................................................................

73

VI.

Forward-lookingstatement........................................................................................................

74

VII.

Responsible persons statement ...............................................................................................

74

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Public Regulated Real Estate Company under Belgian law

Rue Belliard 40 (box 11) - 1040 Brussels

Tel: +32 (0)2 626 07 70

Fax: +32 (0)2 626 07 71

VAT - BE 0877 248 501 - Registry of Legal Entities of Brussels

www.aedifica.eu

This half year financial report is also available in French and Dutch33.

Auditor

Ernst & Young Réviseurs d'Entreprises SCCRL, represented by

Joeri Klaykens, Partner

Valuation experts

Cushman & Wakefield Belgium SA, Deloitte Consulting & Advisory

SCRL, CBRE GmbH, Jones Lang LaSalle SE, DTZ Zadelhoff VOF,

Savills Consultancy BV en Cushman & Wakefield Debenham Tie

Leung Ltd

Financial year

1 July - 30 June

For additional information, please contact:

Stefaan Gielens, CEO - info@aedifica.eu

Ingrid Daerden, CFO - info@aedifica.eu

Delphine Noirhomme, Investor Relations Manager - info@aedifica.eu

33The Dutch version of this document has true value. The English and French versions are translations and were written under

Aedifica's supervision.

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Aedifica SA published this content on 19 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 February 2020 08:32:10 UTC