Mercialys: Q3 2012 Rental revenues

Organic growth in invoiced rents of +4.6%

5 new extensions to be opened during 2012 fourth quarter

Regulatory News:

Over the nine last months, Mercialys (Paris:MERY) rental revenues were up +1.3%:

	Â	Â	Â	Â	Â	Â
		First nine	Â	First nine	Â
		months		months		% change
Thousands of Euro		2011		2012
						Â
Invoiced rents		113,733		114,771		+0.9%
Entry fees		5,314		5,859
		Â	Â	Â	Â	Â
Rental revenues		119,046		120,630		+1.3%

These first nine months of the year were characterized by:

• continuing robust organic growth in invoiced rents: +4.6 points (including indexation¹Â : +2.2 points);
• the impact of the completion of "Esprit Voisin" development projects and the inclusion in the portfolio of the Brive Malemort shopping center at the end of 2011: impact of +4.2 points on growth in invoiced rents;
• the effect of asset sales carried out in late 2011² and the asset sales already carried out in 2012³, reducing our rental base: -6.5 points.

The increase in invoiced rents during the period was also influenced by non-recurring items, mainly relating to base effects (positive non-recurring items recognized in the first half of 2011) and the strategic vacancy relating to on-going redevelopment programs, with a negative impact on growth in invoiced rents at end-september 2012 (-1.4 point).

« Our ability to extract value from our portfolio of assets remained the growth driver during the quarter: we continued to generate a strong organic growth, our main management indicators remained stable, and our completions of Esprit Voisin projects continue at a steady rate with no fewer than 9 extensions opened over the whole year.

Those developments combined with a phased roll-out of our new strategy of 'Foncière Commerçante'⁴ strengthen the quality of our portfolio and the momentum of our shopping centers » commented Géry Robert-Ambroix, interim CEO of Mercialys.

Lease rights and despecialization indemnities received as of September 30, 2012⁵ amounted to Euro 3.7 million, compared with Euro 5.5 million as of September 30, 2011, breaking down as follows:

• Euro 2.3 million in lease rights relating to ordinary reletting activities (compared with Euro 1.9 million as of September 30, 2011);
• Euro 1.4 million in lease rights relating primarily to the letting of the Quimper, Rodez and Fréjus extension/ redevelopment programs (compared with Euro 3.6 million as of September 30, 2012 relating to lettings of Nîmes, Geispolsheim, Ajaccio and Marseille La Valentine extension/redevelopment programs).

After the impact of deferrals required under IFRS (deferring of lease rights over the firm period of the lease), lease rights and despecialization indemnities recognized as rental revenues as of September 30, 2012 increased by +10.3% to Euro 5.9 million (compared with Euro 5.3 million as of September 30, 2011), as a result of significant lease rights received in both 2010 and 2011.

Q3 2012 Activity

The implementation of the Esprit Voisin program kept on going: 5 completions of extensions planned during the fourth quarter and 7 renovations under the "Esprit Voisin" concept

After 4 projects completed during the first-half of 2012, the implementation of the Esprit Voisin program will continue at a steady pace with 5 new extensions to be opened during the fourth quarter:

• The sites of Montauban and Istres will benefit from a renovation and an extension of the shopping mall that will increase their commercial position.
• In Narbonne, an H&M store opened on an area acquired from the anchored hypermarket.
• In Fontaine-Les-Dijon, a retail park will open in front of our existing shopping center.
• Mercialys is developing an extension to the Bordeaux-Pessac shopping mall under the "Esprit Voisin" concept. This extension was sold to a fund on an off-plan basis and is due to be delivered to the fund in November 2012.

As a reminder, Mercialys and Union Investment, a fund manager highly active in the real estate market, created in 2011 an OPCI fund designed to invest in mature retail properties. The fund is 80%-owned by Union Investment and 20% by Mercialys. Mercialys operates the fund and is in charge of asset management and letting of premises.

In 2011, the fund acquired its first asset in Bordeaux-Pessac comprising a shopping center and a retail park.

Thus, a total of 68 new stores are due to open during the fourth quarter 2012 representing a full-year rental value of Euro 4.7 million (including Euro 2.5 million for Bordeaux-Pessac extension) and a newly created, redeveloped and/or renovated GLA of 42,000sqm.

At the same time, 7 shopping centers benefit from a renovation under the "Esprit Voisin" concept due to be completed during the second half of 2012.

¹ In 2012, for the majority of leases, rents were indexed either to the change in the construction cost index (CCI) or to the change in the retail rent index (ILC) between the second quarter of 2010 and the second quarter of 2011 (respectively +5.01% and +2.56%).

² See press release on 2011 results published on January 16, 2012.

³ See press release on 2012 half-year results published on July 23, 2012.

⁴ Think and act as a retailer

⁵ Cash amount received before IFRS smoothing accounting (over the first 3 years of leases)

This press release is available on the www.mercialys.com website

Next events and publications:

January 14, 2013 (after market close) Â	Â	Â	Â	2012 Q4 Activity
February 13, 2013 (after market close) Â				Annual results 2012

About Mercialys

Mercialys is one of France's leading real estate companies, solely active in retail property. Rental revenue in 2011 came to Euro 161.0 million and net income, Group share, to Euro 147.4 million.

It owned 117 properties at June 30, 2012 with an estimated value of Euro 2.7 billion (including transfer taxes). Mercialys has benefited from "SIIC" tax status (REIT) since November 1, 2005 and has been listed on compartment A of Euronext Paris, symbol MERY, since its initial public offering on October 12, 2005. The number of outstanding shares was 92,022,826 as of June 30, 2012 and 92,022,826 as of December 31, 2011.

CAUTIONARY STATEMENT

This press release contains forward-looking statements about future events, trends, projects or targets.

These forward-looking statements are subject to identified and unidentified risks and uncertainties that could cause actual results to differ materially from the results anticipated in the forward-looking statements. Please refer to the Mercialys shelf registration document available at www.mercialys.com for the year to December 31, 2011 for more details regarding certain factors, risks and uncertainties that could affect Mercialys's business.

Mercialys makes no undertaking in any form to publish updates or adjustments to these forward-looking statements, nor to report new information, new future events or any other circumstance that might cause these statements to be revised.

MERCIALYS RENTAL REVENUES
	Â		Â		Â		Â		Â	Â	Â		Â		Â		Â
Â	Â	TOTAL										QUARTERS
In Euro thousands	Â	03/31/2007	Â	06/30/2007	Â	09/30/2007	Â	12/31/2007				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		23,688		47,557		72,257		97723				23,688		23,869		24,700		25,465
Lease rights		447		881		1,287		1,773				447		434		406		486
Rental revenues		24,135		48,438		73,545		99,496				24,135		24,303		25,106		25,951
																			Â
Change in invoiced rents		31.1%		22.3%		23.1%		21.1%				31.1%		14.7%		24.5%		15.7%
Change in rental revenues		28.8%		22.2%		22.8%		20.9%				28.8%		16.3%		23.9%		15.7%
Â	Â	Â	Â	Â	Â	Â	Â	Â				Â	Â	Â	Â	Â	Â	Â
In Euro thousands	Â	03/31/2008	Â	06/30/2008	Â	09/30/2008	Â	12/31/2008				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		27,626		55,884		83,775		113,613				27,626		28,258		27,892		29,838
Lease rights		516		1,111		1,842		2,588				516		595		731		746
Rental revenues		28,142		56,995		85,618		116,201				28,142		28,853		28,623		30,583
																			Â
Change in invoiced rents		16.6%		17.5%		15.9%		16.3%				16.6%		18.4%		12.9%		17.2%
Change in rental revenues		16.6%		17.7%		16.4%		16.8%				16.6%		18.7%		14.0%		17.8%
Â	Â	Â	Â	Â	Â	Â	Â	Â				Â	Â	Â	Â	Â	Â	Â
In Euro thousands	Â	03/31/2009	Â	06/30/2009	Â	09/30/2009	Â	12/31/2009				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		30,630		62,875		97,591		130,911				30,630		32,245		34,716		33,320
Lease rights		680		1,643		2,650		3,326				680		963		1,007		676
Rental revenues		31,310		64,518		100,241		134,237				31,310		33,208		35,723		33,996
																			Â
Change in invoiced rents		10.9%		12.5%		16.5%		15.2%				10.9%		14.1%		24.5%		11.7%
Change in rental revenues		11.3%		13.2%		17.1%		15.5%				11.3%		15.1%		24.8%		11.2%
Â	Â	Â	Â	Â	Â	Â	Â	Â				Â	Â	Â	Â	Â	Â	Â
In Euro thousands	Â	03/31/2010	Â	06/30/2010	Â	09/30/2010	Â	12/31/2010				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		35,127		70,547		106,995		144,695				35,127		35,420		36,447		37,700
Lease rights		803		1,842		2,934		4,811				803		1,039		1,092		1,877
Rental revenues		35,930		72,390		109,929		149,506				35,930		36,459		37,539		39,577
																			Â
Change in invoiced rents		14.7%		12.2%		9.6%		10.5%				14.7%		9.8%		5.0%		13.1%
Change in rental revenues		14.8%		12.2%		9.7%		11.4%				14.8%		9.8%		5.1%		16.4%
Â	Â	Â	Â	Â	Â	Â	Â	Â				Â	Â	Â	Â	Â	Â	Â
In Euro thousands	Â	03/31/2011	Â	06/30/2011	Â	09/30/2011	Â	12/31/2011				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		36,887		75,583		113,733		153,385				36,887		38,696		38,150		39,652
Lease rights		1,581		3,571		5,314		7,621				1,581		1,990		1,742		2,307
Rental revenues		38,468		79,154		119,046		161,005				38,468		40,686		39,892		41,959
																			Â
Change in invoiced rents		5.0%		7.1%		6.3%		6.0%				5.0%		9.2%		4.7%		5.2%
Change in rental revenues		7.1%		9.3%		8.3%		7.7%				7.1%		11.6%		6.3%		6.0%
Â	Â	Â	Â	Â	Â	Â	Â	Â				Â	Â	Â	Â	Â	Â	Â
In Euro thousands	Â	03/31/2012	Â	06/30/2012	Â	09/30/2012	Â	12/31/2012				Q1	Â	Q2	Â	Q3	Â	Q4
																			Â
Invoiced rents		38,592		77,141		114 ,771						38,592		38,549		37,630		Â
Lease rights		1,888		3,849		5,859						1,888		1,961		2,010		Â
Rental revenues		40,480		80,990		120,630		Â				40,480		40,510		39,640		Â
																			Â
Change in invoiced rents		4.6%		2.1%		0.9%						4.6%		-0.4%		-1.4%
Change in rental revenues		5.2%		2.3%		1.3%						5.2%		-0.4%		-0.6%

Contacts:

Mercialys
Analyst/investor relations:
Marie-Flore Bachelier, + 33(0)1 53 65 64 44
or
Press relations:
Image7:
Isabelle de Segonzac, + 33(0)1 53 70 74 85
[e-mail]