Q RESULTS AND A NEW STRATEGIC CHANGE FOR EPP

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1 View this in your browser COMPANY NEWS EDITION 7 Summer 2017 News Flash Q1 results and a strategic change for EPP Polish growth rates underpin EPP retail strategy EPP liquidity increased with sale of portion of Echo Investment stake EPP buys three shopping assets If food is the new fashion then fitness is the new food EPP at a glance Q RESULTS AND A NEW STRATEGIC CHANGE FOR EPP EPP achieved a net profit for the March quarter of 23.95m and distributable income of 16m which is 3.2% ahead of budget. At quarter end we owned 10 retail properties, two development projects and nine office projects. We are also on track to grow steadily and double our retail portfolio value to 3bn by By 2025 EPP will become a Polish retail champion. Most of the company s growth will be fueled by the disposal of our office portfolio by Our company offers an attractive and secure yield of approximately 8%, a portfolio with a long lease expiration profile and a weighted average unexpired lease term of over five years by gross lettable area ( GLA ). We have obtained a diversified tenant base of leading retailers with international brands in the retail portfolio, and a tenant base of primarily blue-chip companies in the office portfolio. We are very excited about the continued strong performance of our shopping centres. We are enjoying strong organic growth fueled by active asset management, a strong economy and growing spending power in Poland. In April, the company issued new ordinary shares at a price of EUR1.27 per share (R18.50 per share) following a successful equity raise. Immediately post the issue of new shares the authorised ordinary share capital of the company was ordinary shares of EUR0.81 each, all of which are listed on the Luxembourg Stock Exchange and the JSE. During the first quarter, we finalised deals for Zakopianka Shopping Centre, A4 Business Park Phase III and Galeria Mlociny. We are also on track with the development of our Warsaw retail development, Galeria Młociny. Galeria Mlociny is a mixed-use development of approximately m², of which approximately m² will be retail space. The construction commenced in October 2016 and is on track for completion in the second quarter of The development is c. 55% preleased to strong anchor tenants

2 including Inditex brands, C&A, Van Graaf, H&M and shoe retailer CCC. Contracts have also been signed with RTV Euro AGD, Jysk, Intermarche and Go Sport. Galeria Mlociny is situated next to the Mlociny transport hub, the main public transport hub for residents of North Warsaw and surrounds, which is used daily by around people. It will be developed at an estimated development yield on cost of c. 7.1% and on completion is expected to be accretive to EPP. POLISH GROWTH RATES UNDERPIN EPP RETAIL STRATEGY Poland is growing quickly and strongly. GDP growth in Poland increased 1.1% on the previous quarter and 4.2% yearon-year. One reason for this growth is that Poles aspire to be like their Western European neighbours including Germany and, further across, the UK. This is part of the rationale for us at EPP having chosen to invest in Polish retail. There are very strong rental growth opportunities in retail and we are shifting our fund to become a retail focused fund as opposed to owning a mix of retail and offices. EPP aims to become a Polish retail national champion and therefore we will need to dominate the shopping centre market of over 30,000m². Many of our opportunities going forward will include expanding existing malls, as opposed to building new ones in cities which already have many malls. This is outside of our existing new developments. The Polish economy is also expected to improve this summer starting with the overall unemployment rate falling. The unemployment rate for May surprised economists with a reading of 7.4%, which is the lowest rate in Poland in decades. The European Union s average unemployment rate as measured in December 2016 was 8.2%. Poland looks set to see through a good 2017 and EPP is at the forefront of this. EPP LIQUIDITY INCREASED WITH SALE OF PORTION OF ECHO INVESTMENT STAKE Existing and new institutional investors have bought 40 million shares from Echo Prime Assets B.V. (EPA) a wholly owned subsidiary of Echo Investment S.A. (Echo) in EPP. EPA was released from the lock-up restrictions imposed by Redefine Properties Limited and the sale was settled on 26 June The sale forms part of Echo s strategy to align its asset composition as a pure developer without investment assets and does not impact on the continued long-term partnership with EPP. EPP and Echo currently collaborate on eight development projects and share three common non-executive directors. "I am pleased that our shares have been bought by South African institutional investors who have trusted a long-term EPP strategy based on the Polish retail property market. This also increases our free float and contributes to improved liquidity in our shares," comments Hadley Dean, CEO of EPP. EPA continues to hold a 7.19% stake in EPP. EPP BUYS THREE SHOPPING ASSETS After much paper work and patience, EPP has concluded the acquisition of three retail assets from investment group, Blackstone for million. We are excited to boost our retail portfolio with another three regionally dominant shopping centres in line with our strategy of becoming Polish retail champion, says our COO, Rafał Kwiatkowski. EPP bought a brilliant m² GLA portfolio which has a proven track record, accessibility and visibility. The projects offer

3 a tailor made tenant mix, sufficient critical mass and all of them are supported with a large catchment area. All three properties are market leading retail schemes in their respective regions. The projects are located in the southern and northern parts of Poland and all are 100% leased. The acquired centres include Galleria Twierdza shopping centre in Kłodzko, Galleria Twierdza shopping centre in Zamość and Wzorcownia shopping centre in Włocławek. Having been operational since 2009 (Wzorcownia and Twierdza Kłodzko) and 2011 (Twierdza Zamość) they boast a diverse tenant mix with anchor tenants including LLP Group, H&M, Rossmann, Carrefour, Cinema 3D, CCC, Empik and Smyk. Rafał Kwiatkowski comments that this kind of deal is in line with EPP s retail investment push. This move aligns with our strategy of investing in regionally dominant centres supported by large catchment areas with a proven positive track record. We are currently growing our portfolio further and are looking forward to announcing new acquisitions in future. IF FOOD IS THE NEW FASHION, THEN FITNESS IS THE NEW FOOD" CityFit, a national fitness club chain in Poland and one of EPP s tenants, says health, wellness and fitness are growing rapidly in the country. It would seem that the Polish fitness market is one of the fastest growing markets in Europe at the moment and I believe that we will continue to see fitness play a large part in Polish peoples lives in future years. The Polish fitness market is particularly fragmented and without one large dominant network which provides us with an opportunity to fill a growing demand which is being seen across Poland in both large and smaller cities, says CEO Richard Keen.

4 "As a pioneer in the No Contract and low-cost fitness market along with our sites being open 24 hours a day we believe that our concept is meeting the demands and requirements of the growing market, The Millennials. We have witnessed very positive effects on footfall growth in shopping centres where we operate our sites, as customers frequent our gyms multiple times each week hence bringing customers to the shopping centres far more regularly than usual shopping centre customers. "This can only be positive for the other tenants in the shopping centre and it means that our gym members spend more time in the shopping galleries using both CityFit services and other services and goods of other tenants, said Keen. EPP AT A GLANCE 22 real estate projects 13 retail projects, including three acquired from Blackstone 9 office projects Active in 17 cities in Poland 2 development assets in Warsaw, the Polish capital 1.6 billion - Total portfolio value (including post Q1 acquisitions) Rapenburgerstraat 175/M 1011VM Amsterdam Netherlands Tel. (+48) Fax (+48) HQoffice@echo-pp.com IR related comments / feedback welcome: IR@singular.co.za Want to change how you receive these s? You can update your preferences or unsubscribe from this list. This was sent to brabothata@singular.co.za why did I get this? unsubscribe from this list update subscription preferences Echo Polska Rapenburgerstraat 175/M 1011VM Amsterdam, 1011VM Netherlands

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