BUSINESS FOR THE YEAR Business activity by region 2 2.2.3 Scandinavia (15.6% of net rental income) 3 NRI & EPRA VACANCY RATE IN SCANDINAVIA Current-porfolio NRI Like-for-like portfolio NRI EPRA vacancy rate In €m 12/31/2017 12/31/2016 Change 12/31/2017 12/31/2016 Change 12/31/2017 12/31/2016 Norway 65.4 66.4 -1.5% 66.3 63.6 4.3% 2.2% 2.6% Sweden 56.0 61.6 -9.0% 56.0 53.4 4.7% 3.7% 2.7% Denmark 51.1 52.3 -2.2% 51.0 48.7 4.7% 4.0% 5.7% SCANDINAVIA 172.6 180.3 -4.3% 173.2 165.7 4.6% 3.1% 3.5% Overall, the Scandinavian economy remained strong and was Norway, rental income was boosted by lower vacancy (-170 bps and supportive to Klépierre’s business, with high GDP growth, a low level -40 bps respectively). On a current portfolio basis, net rental income of unemployment, and rising inflation: declined by 4.3% following the disposal of two shopping malls (Torp > in Norway, GDP grew by 2.1% in 2017 thanks to stronger private Köpcentrum and Lillestrøm Torv) and the office building adjacent to consumption and improved private investment. Higher crude the Emporia shopping center in Malmö. prices in the fourth quarter helped drive the oil and gas sector Leasing activity remained robust, with 279 leases(1) signed in 2017 recovery. Consumer confidence rose to a three-year high by the with a high level of reversion (+12.4% on renewals and relets), while end of 2017 and unemployment improved from 4.7% in 2016 to EPRA vacancy continued to decrease (from 3.5% at the end of 2016 4.3% in 2017; to 3.1% in 2017): > economic growth in Sweden remained strong: GDP grew by 3.1% > in Norway, at Metro Senter (Lørenskog), the merchandising mix in 2017, the same pace as 2016. This was mainly attributable to was complemented by the arrival of new retailers, including the construction investment and exports. Unemployment was at jewelry brand Gullfunn and the first new cosmetic brand Loco around 6.6% and private consumption increased by 2.5% compared (Vita Group); international retailers such as Triumph and Burger to 2016; and King also renewed their leases in the shopping center. At Arkaden > GDP growth in Denmark reached 2.2% in 2017 (vs. +2.0% in 2016), Torgterrassen (Stavanger), H&M unveiled its refurbished store against the backdrop of robust domestic demand. Inflation picked over 3,400 sq.m. and COS opened its first store in a shopping up and reached 1.2% by the end of the year. Both consumer and center in November, covering 1,400 sq.m. At Oslo City, Pandora business confidence remained upbeat. Unemployment decreased will open its new store in January 2018; from 6.2% in 2016 to 5.8% in 2017, further boosting private > in Sweden, 36 deals were secured with global retailers at Emporia consumption. (Malmö), including new leases signed with Swarovski, Calzedonia, Retailer sales in Sweden were up 1.5%, while Norway and Denmark and Calvin Klein. The Danish brand Normal’s will open its first were down 1.6% and 1.4% on a like-for-like basis, respectively. Adverse Swedish store (460 sq.m.) in January, while Vapiano, Levi’s, weather conditions in the first half of the year in Norway and Denmark Espresso House, and Sealife renewed their leases; in October, H&M penalized the fashion and sports segments. opened a full-size store (3,310 sq.m.), including its home concept products. At Marieberg and Kupolen, H&M also extended their At Metro Senter (Lørenskog, Norway), retailer sales rose by 1.4%, stores to a total of 3,260 and 2,860 sq.m. respectively; helped by the now fully-leased retail park. In Sweden, Emporia (Malmö) > occupancy and tenant mix were greatly improved in our Danish posted sales up 4.9% year-on-year, Galleria Boulevard (Kristianstad) portfolio. At Field’s (Copenhaguen), Destination Food® was +2.4%, and Marieberg (Örebro) +0.9%. On a segment basis, health & implemented in all its aspects. The leisure offer was enriched by the beauty outperformed all the others, recording solid performances in new leases signed with Bounce Trampoline Park (4,100 sq.m.) and a the region (+3.5% in Norway, +4.6% in Sweden and +5.8% in Denmark). virtual reality (VR) experience shop – the first VR experience venue in Like-for-like growth in net rental income was very robust at 4.6%, a Danish shopping center. Additionally, the food offer was completely driven by rising indexation (2.4% vs 1.4% last year) and a high level revamped and now spans an extensive array of different cuisines. At of reversion (+12.4%). Growth was sustained in all countries: Norway Bryggen (Viejle), new contracts were signed with Sport 24, the Danish (+4.3%), Sweden (+4.7%), and Denmark (+4.7%). In Sweden, the Group sportswear brand (including a 700-sq.m. shop and a 765-sq.m. outlet), also benefited from an increase in variable rents. In Denmark and and with Toys “R” Us for a new store on a double level. (1) Number restated to take into account a new way to account storage unit in Scandinavia. KLÉPIERRE 2017 REGISTRATION DOCUMENT 49