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Property appraisal

The value of ANF  Immobilier’s land and property portfolio at December 31, 2012 as established by two independent property appraisers, amounted to €884 million. It amounted to €1,691 million as of June 30, 2012, compared with €1,650 million as of December 31, 2011. The significant decline in the real estate value in the second half of 2012 is due in particular to the asset sale in the amount of €793 million in November 2012.

This value is distributed as follows: €119 million in Lyon, €703 million in Marseille, and €29 million in the hotels leased to B&B, as well as €33 million for new acquisitions in Lyon and Bordeaux.

On a like-for-like basis, the portfolio’s appraisal value was up 8% vs. December 2011 and 3% vs. June 2012.

The various development projects in Lyon and Marseille, with expected delivery dates from 2013 to 2017, were valued at €192 million at December 31, 2012, up 15% in 12 months.

Experts have noticed stability in the rates and a slight erosion in residential comparison values.

This accretion in appraisal value is the fruit of rent increases, the intrinsic quality of the Haussmann-era assets and the exceptional city-center locations.

(€ millions) 12/31/2012 12/31/2011 Change
Lyon built 39             372             Na            
Marseille built 591             585             + 1.0 %            
Built 630             957            Na            
Development Projects 192             167            + 15  %            
City center 822             1,124             Na            
B&B 29             513            Na            
Acquisitions 33             13            -            
ANF Immobilier 884             1,650             Na            

Gross yieldrates

According to the third edition of the French Real Estate Appraisal Charter drawn up by the IFEI (Institut français de l’expertise immobilière), the yieldrate is the actual ratio of income from the property to the capital committed by the purchaser (purchase price including expenses and transfer taxes). It is called gross or net depending on whether the gross income or net income from the property is chosen as the numerator.

  Cap rate
12/31/2012 12/31/2011 12/31/2010
Lyon      
Retail 5.00 % to 5.75 %     5.00 % to 5.75 %     5.10 % to 6.00 %    
Offices 6.00 % to 6.75 %     6.00 % to 6.75 %     6.25 % to 6.75 %    
Residential (excl. Law 48) 4.00 % to 4.30 %     4.00 % to 4.30 %     4.25 % to 4.75 %    
Marseille      
Retail 5.00 % to 5.75 %     5.50 % to 7.45 %     5.50 % to 7.35 %    
Offices 6.25 % to 7.50 %     6.25 % to 7.50 %     6.25 % to 7.25 %    
Residential (excl. Law 48) 4.00 % to 4.30 %     4.15 % to 4.75 %     4.25 % to 5.15 %    

Appraisal method

ANF Immobilier uses Jones Lang LaSalle and BNP Paribas Real Estate Expertise, two nationally recognized property appraisers. They were formally appointed in 2011 for a four-year term, with two appraisals being carried out per year and an annual rotation of 25% of the assets between two appraisers. The appraisers use the third edition of the real estate appraisal Code drawn up by the IFEI. Each appraiser values approximately half of ANF Immobilier’s real estate assets, so the Haussmann-style properties in Lyon and Marseille are split roughly equally between the two appraisers to ensure the overall consistency of the valuations.

The Haussmann-style properties are valued by means of both the comparison and capitalization methods.

The development projects are valued according to two methods, depending on their type. In the case of developments on land belonging to ANF Immobilier, the developer balance sheet method is used; in the case of major restructuring of existing buildings, the capitalization and comparison method is applied. The hotels are valued using the net income capitalization method, as the discounted cash flow method is not appropriate due to the long length of the leases and the fixed nature of the rents.

The appraisal certificates established by Jones Lang LaSalle and BNP Paribas Real Estate Expertise are reproduced in Chapter X entitled “Other General Information” of the Registration Document.