Key highlights for the fifth quarter to 30 September 2020
Performance and business highlights
• 96% of tenants have agreed terms for COVID-19 closure periods.
• Rent collection is 91% for Q2 2020 and 90% for Q3 2020 after agreed terms.
• Sales turnover for the three months to 30 September 2020 was 97% of 2019 levels with retail sales
in France above last year’s levels and Sweden at the same as last year’s levels.
• Strong tenant demand resulted in 11.3% rent uplifts on renewals and relettings, with many deals signed during or after the lockdown period.
• Gross rental income for the quarter ending 30 September was €48.8 million compared with €52.1 million in 2019 mainly as a result of the partial sale of Passage du Havre (€2.1m) and COVID-19 concessions (€2.4m).
• Net earnings €3.01 (direct investment result) per depositary receipt for 15 months to 30 September 2020 compared to €3.03 per depositary receipt for the same period last year.
• Vacancies at end of September were 1.6% of annual rent.
• Disposal of Moraberg retail park in line with 30 June 2020 independent valuation.
• EPRA sBPR Gold Award for the seventh year in a row.

Chief Executive’s commentary
The past three months have reassured us that our shopping centres remain popular with our tenants and clients notwithstanding continuing anti-COVID-19 restrictions of one kind or another. Restaurants and bars
have suffered most but there has been a significant improvement in fashion sales, which had plummeted during the lockdowns.
Relettings and renewals continue overall to show uplifts in rents (11.3%), not reductions and our vacancies though increasing slightly remain well under 2%.
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The sale of our Moraberg retail park in Sweden at the 30 June valuation demonstrates that for good properties let at sensible rents there remains a strong market. We are progressing with other sales with the aim of
achieving a LTV ratio of under 40% in due course. All our debt is in the form of straightforward individual mortgage loans with a wide range of banks with whom we have established long-term relationships so we do not have to worry about volatile bond markets or the effect rating agencies can have on interest rates or liquidity requirements.
There is clearly a resurgence of COVID-19, which is of concern to us all. We have kept in place the high safety measures introduced in all our centres during the first wave and are carefully monitoring the situation
as it develops.
We recently surveyed our major shareholders and were very pleased with their support of our investment strategy, our proposed management changes and our response to the COVID-19 crisis. A matter that attracted less enthusiasm, though, was our Stichting Administratiekantoor (STAK), which stems from our
original dual listing in Sydney and Amsterdam. We are always sensitive to shareholders’ views and see this as an opportunity to further modernise our corporate governance. We will therefore use the coming months
to prepare a proposal for a change of the Company’s governance for the winding up of STAK, to allow all our shareholders to decide on the matter in the 2021 AGM.
Finally I must add that I am retiring as a director of Eurocommercial after almost thirty years at the helm, which have flown by far too quickly. I will remain a shareholder of course though and will keep an interested
eye on my investment.
The unique feature of Eurocommercial throughout its existence has been the teamwork of our Directors and employees and their outstanding long service to the Company.
It is their teamwork, dedication and decency that have ensured that our centres are popular with tenants and clients alike which has meant that our occupancy rates have consistently been the highest in the industry
over the last quarter of a century and which remains the case today, despite the difficulties of COVID-19.
I am more than happy therefore to leave Eurocommercial in the capable hands of Evert Jan, Peter and Roberto, who have been fundamental to our past successes.
Financial & Operational Review Direct investment result: €148.6 million (€3.01 per depositary receipt) -1.1%
The direct investment result for the fifteen months to 30 September 2020 was €148.6 million, slightly lower compared with the same period in 2018/2019 due to discounts granted to retailers in Sweden for the COVID19 restrictions during the second quarter and to the amortisation of the rent concessions for the COVID-19 lockdown periods over Q3 2020. These negative impacts were partly offset by cost savings, including interest
expenses, lower marketing, staff and travelling expenses as well as local taxes.
As a reminder, the rent concessions for the COVID-19 lockdown periods in Belgium, France and Italy (in total €19.7 million as per 30 September 2020) are amortized in accordance with IFRS 16 over the remaining terms
of the leases or until the first tenant break option. The impact for the fifth quarter of this reporting period is €2.4 million. Rent concessions granted in Sweden (€2.0 million) were included as a reduction of rental income
for the fourth quarter of this reporting period.
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The direct investment result is defined as net property income less net interest expenses and company expenses after taxation. In the view of the Board this more accurately represents the underlying profitability
of the Company than IFRS “profit after tax”, which must include unrealised capital gains and losses.
The direct investment result per depositary receipt decreased 0.7% to €3.01 at 30 September 2020, from €3.03 for the fifteen months to 30 September 2019 despite a slight reduction in the average number of depositary receipts in issue over the reporting period. The reduction stems from our share buyback
programme in the summer of 2019 and was partly offset by the issuance of stock dividend in November 2019.

Net property income: €219.3 million -2.0% Rental income, including joint ventures (based on proportional consolidation), for the fifteen months to 30
September 2020, after deducting net service charges and direct and indirect property expenses (branch overheads), decreased by 2.0% to €219.3 million compared to €223.8 million for the fifteen months to 30
September 2019. The decline is due to agreed rent concessions related to the COVID-19 pandemic. Property expenses decreased as well due to lower centre marketing expenses, staff and travelling expenses as well
as lower local taxes.

Adjusted net asset value: €42.97 per depositary receipt
The adjusted net asset value at 30 September 2020 was €42.97 per depositary receipt compared with €42.73 at 30 June 2020 and €45.55 at 30 September 2019. Adjusted net asset values do not consider contingent capital gains tax liabilities nor do they consider the fair value of financial derivatives (interest rate swaps) which are used to stabilise interest costs.'

IFRS results
The IFRS net asset value at 30 September 2020, after allowing for contingent capital gains tax liabilities if all properties were to be sold simultaneously and the fair value of the interest rate swap contracts, was €35.72 per depositary receipt compared with €35.41 at 30 June 2020 and €38.81 at 30 September 2019.
No property valuations were undertaken at the end of the period, in accordance with the Company’s policy to only commission independent revaluations at the half-year and year-ends. The adjusted net asset value per depositary receipt, therefore, has changed minimally since June 2020, reflecting only accrued income and currency movements. All properties will be externally valued at 31 December 2020 and reported in the eighteen months results.

Rent collection
We entered into discussions early with our tenants to find mutually acceptable solutions for rent payments during the period of the closure of the centres or the period of significant reduced turnover for Sweden. Our offers of course excluded tenants like hypermarkets which continued to trade during the lockdown. These negotiations did not include service charges which have been paid in full by our tenants.
Overall we have now reached agreements with 100% of tenants in Sweden, 99% in Belgium, 95% in France and 96% in Italy (all numbers by MGR). Depending on the country and type of tenants, rent holidays varying from 50% to 100% of closure periods have been agreed and total approximating €21.7 million (or about 10% of annual rent). In accordance with IFRS 16 the rent concessions for Belgium, France and Italy will be amortized over the remaining terms of the leases or until the first tenant break option. The results of our negotiations are summarised in the table below.
These concessions are mainly for Q2 with some spread over Q2 and Q3. Excluding rent concessions granted and rent deferred, our collection rate for Q2 amounts to 91% and for Q3 amounts to 90%.
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Rent concessions granted Rent collected for Q2* Rent collected for Q3*
Belgium € 2.9 million 95% 97%
France € 4.9 million 92% 92%
Italy € 11.9 million 88% 82%
Sweden € 2.0 million 99% 96%
Total € 21.7 million 91% 90%
*collection rate as a percentage of due and collectable rent.

Visitor numbers
Over the quarter to the end of September 2020, visitor numbers were 82% of the same quarter last year.
They reached 74% in Belgium, 86% in France, 75% in Italy and 94% in Sweden.
Retail Sales turnover Following a solid start of the year, retail sales were severely impacted by the closure of our centres during the COVID-19 lockdowns in Belgium, France and Italy. Since the reopenings, retail sales have recovered faster than visitor numbers. In the three months to 30 September 2020, retail sales reached 96% of the similar period last year on a like-for-like basis. Retail parks and shopping centres anchored by a strong hypermarket have recovered faster and continue to perform better than regional and city centre properties due to the reliance of the latter on public transport, leisure, tourism and office workers.
In Belgium, retail sales in our Woluwe shopping centre for the three months to 30 September 2020 reached 87% compared to the same period last year. Restaurants and Shoes were still lagging, while Gifts and Jewellery and Sport performed particularly well. The lack of a hypermarket, the slow return to work of office workers as well as the strict post-lockdown restrictions explain why the recovery of Woluwe is slower than the rest of our portfolio, but we are confident in the future of this strong centre, as highlighted by renewed tenant demand for our planned extension.
In France, retail sales for the three months to 30 September 2020 were up 3% versus the same period last year. Retail sales were strong in our everyday centres and very strong in our retail park in Chasse (+18%).
Home Goods and Gifts & Jewellery, and Sport performed especially well.
In Italy, retail sales for the three months to 30 September 2020 were at 90% of the levels of the same period last year with a wide range of performance between our centres, with for instance Curno showing results up strongly versus 2019 figures. The best performing sector was Home Goods (+9%), while Services (dry cleaners, travel agents and dentists) were severely impacted by the effects of the COVID-19 pandemic.
In Sweden, retail sales for the three months to 30 September 2020 were the same as last year with the majority of retail sectors showing positive growth including Hypermarkets (8%), Home Goods (6%), Books & Toys (10%) and Electrical (9%)

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tijd 09.02
De Midcap 803,93 -1,16 -0,14% EuroComm. Prop. EUR 10,42 +32ct vol. 30.000