BUSINESS FOR THE YEAR Outlook 2 2.9 Events subsequent to the accounting cut-off date 2.9.1 Interest rate hedging operations Additionally, on February 2, 2018, Klépierre signed an agreement for the disposal to Carmila of two retail malls for a total consideration of In January 2018, €700 million of caps were bought, with an average €212.2 million (including transfer taxes). maturity of three years, to roll over part of the portfolio of caps The two retail malls, which are anchored by a Carrefour hypermarket, maturing in 2018 and maintain a high interest rate hedging ratio. are the following: 2.9.2 Share buyback program > Grand Vitrolles (Klépierre equity interest 83%; CNP 17%), located near Marseille (France), is a 24,400-sq.m. gallery with 80 retail From January 1, 2018 to February 2, 2018, Klépierre has purchased units adjacent to a Carrefour hypermarket of 21,900 sq.m.; 902,414 of its own shares, representing a total investment of > Gran Via de Hortaleza, fully owned by Klépierre and located in €32 million (average price of €35.74). Madrid in Spain, is a 6,300-sq.m. gallery with 70 retail units (Carrefour hypermarket of 14,000 sq.m.). 2.9.3 Disposals This divestment is consistent with Klépierre’s asset rotation strategy which consists in focusing its capital allocation on leading shopping In January 2018, the Group completed the disposal of Roncalli destinations in continental European cities. (Cologne, Germany), a 17,300-sq.m. office building. The closing of this transaction is expected to occur in the first quarter of 2018. 2.10 Outlook Klépierre’s 2018 budget is based on an improving macroeconomic Overall, Klépierre expects to maintain a high level of net rental income environment in Continental Europe especially on the front of growth, supported by higher indexation in 2018 (expected above 1%). unemployment in France but also in Spain and Italy. Combined with As in previous years, payroll and other overhead costs will be under some more inflation, this should help drive retailers sales further up scrutiny with a view to keeping them at least stable. and, consequently, like-for-like rental growth. Against this backdrop, Klépierre’s asset management initiatives will Recent debt management operations will help further reduce financial focus on: expenses. > accelerating the transformation of the retail offer through tenant Provided that asset disposals are sustained, the 500-million euros rotation and rightsizing; share buyback program should be completed (which represents an additional 150-million euros repurchase in 2018). > enhancing the shopper experience through the deployment of As a result, the net current cash-flow per share is expected to reach Clubstore®, Destination Food®, digital marketing and stunning 2.57-€2.62 assuming a stable, if not lower, debt. This represents a 3.6% events through the Let’s Play® program; to 5.6% increase which should allow for increasing the dividend per > opening successfully the two main ongoing projects: Prado share for the ninth year in a row. (Marseille) and the next phase of Hoog Catharijne (Utrecht) redevelopment; > keeping investing in our assets to transform them through extensions and refurbishments like the recently started Créteil Soleil (Paris); > disposing non-core assets. KLÉPIERRE 2017 REGISTRATION DOCUMENT 69