Property appraisal

The value of ANF Immobilier’s land and property portfolio at December 31, 2011 was established by two independent property appraisers and amounted to €1,650 million. This compares with €1,607 million at June 30, 2011 and €1,573 million at December 31, 2010.

This value is distributed between €451 million in Lyon, €673 million in Marseille, and €513 million in the hotels leased to B&B, as well as €13 million for new acquisitions in Lyon and Bordeaux.

On a like for like basis the portfolio’s value was up 7% vs. December 2010 and 2% vs. June 2011.

The various development projects in Lyon and Marseille, with expected delivery dates from 2011 to 2014, were valued at €167 million at December 31, 2011, up 1.5% in 12 months.
The appraisers observed a very slight reduction in rates in the most sought-after asset segments.

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.

The solidity of B&B’s model, third largest chain of economic hotels in France generating regular operational growth, plus the secure nature of the leases to the operator, has also allowed a slight fall in the capitalization rates since June 2010. The average capitalization rate of the hotels portfolio was 6.57%.


(€ millions)	31/12/2011	31/12/2010	Change

Lyon built	372	362	+ 2.8 %

Marseille built	585	565	+ 3.5 %

Built	957	927	+ 3.2 %

Development Projects	167	154	+ 8.4 %

City center	1,124	1,081	+ 4.0 %

B&B	513	492	+ 4.3 %

Acquisitions	13	-	-

ANF Immobilier	1,650	1,573	4.9 %

Gross yield or capitalization rates

According to the third edition of the real estate appraisal code, drawn up by the IFEI (Institut Français de l’Expertise Immobilière - French Real Estate Appraisal Institute) the gross capitalization rate is the ratio of gross income from the property to the capital invested by the buyer (acquisition price + expenses and transfer taxes).


	Cap rate

	31/12/2011	31/12/2010	31/12/2009

Lyon

Retail	5.00 % to 5.75 %	5.10 % to 6.00 %	5.40 % to 6.00 %

Offices	6.00 % to 6.75 %	6.25 % to 6.75 %	6.50 % to 7.25 %

Residential (excl. Law 48)	4.00 % to 4.30 %	4.25 % to 4.75 %	4.50 % to 4.90 %

Marseille

Retail	5.50 % to 7.45 %	5.50 % to 7.35 %	5,65 % to 7.50 %

Offices	6.25 % to 7.50 %	6.25 % to 7.25 %	6,75 % to 7.50 %

Residential (excl. Law 48)	4.15 % to 4.75 %	4.25 % to 5.15 %	4,50 % to 5.25 %

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’s real estate assets on the following basis:

the Haussmann-era properties in Lyon and Marseille are split roughly equally between the two appraisers to ensure the overall coherency of the valuations;
the hotel portfolio is split in two and each appraiser takes half of the 168 hotels.

The Haussmann-era 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 IX entitled “Other General Information” of the Registration Document.