HIGHLIGHTS Q VALID FROM 1 JULY TO 30 SEPTEMBER 2017

Transcription

1 HIGHLIGHTS Q VALID FROM 1 JULY TO 30 SEPTEMBER 2017 By purchasing CORUM shares, you are investing in the real estate market. As with any real estate investment, this is a long-term investment whose liquidity is limited and your initial investment and income generated from it cannot be guaranteed. The recommended investment horizon is 8 years or more. Past performance is not a reliable indicator of future results. We recommend that you make sure that investing in this SCPI is appropriate for your financial situation. KEY FIGURES DIvIDEnD QUARTERLY RESULTS Retained earnings 0.05 Dividend MINIMUM INVESTMENT Including costs PERFORMANCE 6,45% Distributed in ,36% Internal rate of return over 5 years MONTHLY INCOME* CORUM pays dividends on a monthly basis (potential dividends): - It is an ideal solution for people looking to supplement their income - The frequency of dividend payments is in line with loan repayments (if money was borrowed to buy shares) - All the advantages of direct investment in rental property without the drawbacks (in return for the payment of management fees) Dividend payments cannot be guaranteed and may rise as well as fall throughout the investment period depending on the situation of the real estate market and the rental terms of the properties. * Potential monthly income DIVIDEND REINVESTMENT ** Reinvest up to 100% of your CORUM dividends... Thanks to this solution, you can reinvest 1 to 100% of your monthly dividends in new CORUM shares. In turn, each newly acquired share (or fractional share) will accrue further dividends*. ** Potential monthly dividends received once the 5-month period to dividend entitlement is over. ACQUISITIONS MADE DURING THE QUARTER 5 new properties reinforce Corum s presence in 10 eurozone countries shareholders QUARTERLY NEWSLETTER NO. 21 en.corum.fr

2 ACQUISITIONS CORUM MAKES ITS ENTRY INTO ESTONIA 5 acquisitions were made during the quarter including one in a new country: Estonia. CORUM continued its diversification strategy in the eurozone and is now present in 10 countries, including France, Germany, the Netherlands, Spain, Portugal, Belgium, Slovenia, Ireland, Italy and now Estonia. Investments made during the quarter ended are not reliable indicators of CORUM s future performance. PrISmA NARVA (ESTONIA) This property is located in Narva, the 3 rd largest city in Estonia. Through this first investment in Estonia, CORUM has now invested in 10 countries. Estonia is a country in Northern Europe and a member of the European Union. Posting rapid growth since 2010, its public finances are exemplary. Estonia has been recognised for the development of its digital industry, which has become a true growth driver. The building is located in the residential centre of Narva, the country s 3 rd largest city. It is a supermarket leased to Prisma, which is committed to making lease payments for the next 8.2 years. Acquisition. date: 21 June 2017 Acquisition price: 16.7m Net initial yield: 8.06% incl. transfer tax and brokerage fees Floor area: sq.m Tenant: PRISMA Remaining lease term: 8.2 years VAN GANSEWINKEL EINDHOVEN (NETHERLANDS) This property is located in Eindhoven, the 5 th largest city in the Netherlands. The building has a floor area of about sq.m. Its façade and atrium lend it a modern air. The building is located near the Eindhoven airport and the exit ramp of motorway A2, which links Amsterdam to the Belgian border. The region is home to a number of businesses and multinational corporations such as Deloitte, Atos, CGI Netherlands, etc. The property was purchased for 17.2m with a net initial yield of 7.69%. It has been leased to Van Gansewinkel Groep, which is committed for a period of 7.8 years. Van Gansewinkel is the leader in waste treatment and recycling in Benelux. Acquisition date: 14 April 2017 Acquisition price: 17.2m Net initial yield: 7.69% incl. transfer tax and brokerage fees Floor area: sq.m Tenant: Van Gansewinkel Remaining lease term: 7.8 years

3 ACQUISITIONS Investments made during the quarter ended are not reliable indicators of CORUM s future performance. B&B hotels (SPAIN) The 8 B&B Hotels are located in Spain. They are part of the chain s 20 locations in Spain and meet the brand s requirements regarding first-rate locations: located in shopping districts, close to motorways and major roads. The 8 B&B Hotels have approximately 100 rooms each. They meet their customers needs, whether they travel for professional or for leisure purposes, and offer good value, in line with their market and their geographical location. Purchased for 30.3m with a net initial yield of 6.87%, B&B agreed to a 15-year triple net lease with no break option. All charges related to the property s operation will be borne by the tenant. CORUM will therefore make no outlays for this property s running costs. Acquisition date: 11 May 2017 Acquisition price: 30.3m Net initial yield: 6.87% incl. transfer tax and brokerage fees Floor area: sq.m Tenant: B&B Hotels Remaining lease term: 15 years with no break option VOXPrO CORK (IRELAND) The property is located in Cork. As the second largest city after Dublin, Cork is one of the country s major centres of economic interest and home to a number of specialised industries and large national and international firms such as Apple, Siemens, Amazon, Johnson & Johnson, etc. This property of about sq.m is located in a mixed office/ shopping area, where companies such as Dell, Securitas, Regus are located. It has been leased to Voxpro which agreed to a 11.4-year triple net lease with no break option during which all service charges and work costs will be borne by the tenant. CORUM will therefore make no outlays for this property s running costs. VoxPro is the leading call centre company in Ireland. Acquisition date: 26 May 2017 Acquisition price: 17.9m Net initial yield: 7.55% incl. transfer tax and brokerage fees Floor area: sq.m Tenant: VoxPro Remaining lease term: 11.4 years FEdEX HOOFDDORP (NETHERLANDS) This office building of over sq.m has been leased to TNT/ FEDEX, a global freight carrier. The asset is located in the Netherlands, in the Hoofddorp business park, 5 minutes from the Amsterdam-Schiphol airport (3rd largest airport in Europe and largest in the Netherlands, with about 64 million passengers per year) and 10 minutes from the city centre of Amsterdam by train. This modern building was designed by Dutch architect Paul de Ruiter and interior designer Odette Ex. TNT/Fedex is committed to making lease payments for the next 3.6 years. If this lease commitment is shorter than average (about 9 years) for CORUM tenants, it is because we have recognised that due to the building s quality and location, there is strong potential for value increase at the end of the lease. This is the second CORUM building in the area as the airport s Novotel acquired in 2015 is only a 2-minute walk away. Acquisition date: 20 June 2017 Acquisition price: 51.1m Net initial yield: 7.66% incl. transfer tax and brokerage fees Floor area: sq.m Tenant: FEDEX Remaining lease term: 3.6 years

4 LEADER PROPERTIES IN 10 EUROZONE COUNTRIES INVESTMENT VOLUME FOR THE QUARTER 142.4m NETHERLANDS 54% CORUM s business activity was robust in the second quarter of Extensive investments have reinforced the existing property portfolio and its capacity to generate future income in line with our objectives. With close to million invested in 4 eurozone countries, the quarter s acquisitions posted an average net initial yield of 7.49% with an average remaining lease term to first break of nearly 9.4 years. NET INITIAL YIELD 7,49% SPAIN 21% IRELAND 13% AVERAGE LEASE TERM 9,4 years ESTONIA 12% assets. Unfortunately, CORUM s activity in the Netherlands has not gone unnoticed and the investments that were made have piqued the interest of other investors, especially the French. These deep-pocketed investors have gradually contaminated the Dutch real estate market by driving up the prices. Thanks to our mobility, CORUM is still able to seize opportunities wherever they present themselves in the eurozone. These opportunities satisfy our profitability and valuation criteria over the long term. A retail asset having an advantageous geographical location, operated by a tenant involved in mass retailing, providing high yield thanks to a long-term lease clearly satisfies these criteria. This is the investment that was made in Narva, the third largest city in Estonia, located on the Russian border. The asset is a supermarket belonging to a Finnish cooperative company. In addition to its natural catchment area of inhabitants, it benefits from a flow of Russian consumers who contribute greatly to its revenues. And CORUM has the advantage of an 8.2-year lease with no break option. This period is, in and of itself, the perfect illustration of the strategy which has been implemented over the past 5 years. Taking advantage of property cycles rather than enduring them. When buying real estate, why should you accept the pressure of an overheated market if other markets offer better opportunities? As outlined in this message for the past several quarters, these opportunities still exist across the entire Eurozone, but they are now more difficult to find. This is because the property bubble which has prevailed in the French and German real estate markets for the past 5 years has spread like wildfire to the eurozone as a whole, with the Netherlands being the most prominent example. When CORUM began investing in the Netherlands three years ago, investors were few and far between. Compared to other European countries, the real estate market had remained at the bottom of the cycle in the wake of the 2008 financial crisis. This very weak degree of competition enabled CORUM to take advantage of an number of opportunities there. As a result, the Netherlands now represents 36% of CORUM s The strategy implemented by CORUM emphasises the primary importance of economic reality, i.e. the ability of a tenant to pay the rent over the long term in real estate markets providing investment opportunities. As a result, over time and throughout market cycles, Spain, Portugal, Ireland, Slovenia and now Estonia have enabled CORUM to roll out this strategy. At a time of very high prices and low yield in the French and German markets, it is reasonably safe to conclude that while real estate does not represent a safe investment, it does provide real value. While the properties will always exist and are quite real, the money invested at the top of the cycle in the markets is not immune to a decline in value. On the contrary, the risk of capital loss has grown. Financiers euphemistically refer to this by stating that volatility risk is increasing. Investing in a very diversified manner in real estate markets which are much less exposed to inflationary pressures, while reaping high rental income seems to me to make very good sense at this time. Frédéric Puzin Chairman of CORUM AM

5 PERFORMANCE FOR THE QUARTER The data provided herein refer to previous financial years and CORUM s past performance is not a reliable indicator of its future results. As with any property investment, your initial investment cannot be guaranteed and the value of your CORUM shares and income generated from them may rise as well as fall. DIVIDENDS PER SHARE Note: CORUM is responsible for paying foreign taxes to the relevant tax authorities on behalf of the shareholders. The portion of income subject to foreign withholding taxes is offset against French tax 2.54 foreign withholding tax on rental income 2 liabilities. 0 taxes and social security contributions on finance income Dividends Q Net dividends received for Q in 3 interim payments: on 10 May, 10 June and 10 July Estimated 2017 dividend Next dividend payments due for Q are scheduled for 10 August, 11 September and 10 October. 1. Distributed profit is equal to total interim dividend payments divided by the total number of shares entitled to dividends as of the first day of the quarter. 2.Rental income from foreign property may be subject to withholding taxes paid by the SCPI, which are subsequently offset in France, either by way of tax credit in the income tax return, or through the effective tax rate mechanism (foreign income not taxable in France but taken into account for calculating the effective tax rate). Foreign taxes paid by the SCPI are deducted from interim dividend payments NEW SUBSCRIPTION PRICE SINCE 1 JUNE 2016 Minimum subscription for new shareholders: 1 share. Share price (including all costs) Nominal value Share premium Including subscription fee for: - fundraising costs property search and investment costs PERIOD TO DIVIDEND ENTITLEMENT Until the 1 st day of the 6 th month after share subscription and full payment. RETAINED EARNINGS AVERAGE QUARTERLY EARNINGS Launch of CORUM Average earnings per share ( ) Average dividends per share ( ) SHARE TRANSACTIONS DURING THE QUARTER as of 30/06 13k 178k 835k 1 392k 3 067k 5 588k* as of 30/06 Portion of earnings not distributed but retained as a provision by the SCPI to cope with future challenges. * i.e. 1.3 month's worth of dividend Subscriptions resulting in capital increases Subscriptions matched with redemptions Pending redemptions Off-market acquisitions/sales REFERENCE VALUES AS OF 31 DECEMBER 2016 Realisable value (per share) Reinstatement value (per share) Wealth tax value (redemption price per share) RENTAL CHANGES CAPITAL 31/12/ /06/2017 Capitalisation (subscription price) Share capital 833m 677m 996m 810m Number of shares Number of shareholders Rental income received during Q2 2017: k Vacancies as of 30 June 2017: 9 retail assets: 3 in Amneville (468 sq.m), 1 in Le Creusot (160 sq.m), 1 in Valenciennes (195 sq.m), 2 in Torcy (1 144 sq.m), 1 à Hamburg (368 sq.m), 1 in Technoparc (250 sq.m) No properties re-let or vacated during the quarter. Find out the amount of your dividend on your Shareholder Account on en.corum.fr

6 ASSET PROFILE incl. off-plan purchase [VEFA] agreements signed NUMBER OF TENANTS GEOGRAPHIC BREAKDOWN (% of estimated market value) 2% 1% 3% 3% 17% 4% 8% 10% France Portugal Netherlands Belgium Germany Ireland Spain Estonia Italy Slovenia 126 tenants 36% 16% BREAKDOWN BY ENVIRONMENTAL QUALITY (% of estimated market value) 5% 2% BREEAM/DGNB 2% HQE (high environmental quality) 1% 20% HPE (high energy performance) BBC (low consumption building) 47% AVERAGE REMAINING LEASE TERM TO FIRST BREAK 8.68 years March RT 2012 (thermal regulations) RT 2005 (thermal regulations) 23% Others BREAKDOWN BY PROPERTY CLASSIFICATION (% of estimated market value) Office 2% 5% Retail 12% 2026 June 2017 NUMBER OF PROPERTIES 74 properties Industrial 12% 53% Hotels Logistics 16% Healthcare TOTAL FLOOR AREA (in sq.m) PHYSICAL AND FINANCIAL OCCUPANCY RATES (%) Vacant floor area: sq.m Italy BREMBO Netherlands HOTEL INDIGO Belgium BRIDGESTONE 99.6% 99.6% Q physical occupancy rate Q financial occupancy rate Netherlands NOVOTEL Germany DEUTSCHE BANK

7 REGULAR INVESTMENT PLAN As with any real estate investment, CORUM is a long-term investment whose liquidity is limited and whose initial amount and income generated from it cannot be guaranteed, as they may rise as well as fall. And as with any investment, past performance is not a reliable indicator of future results. The amount which is automatically invested according to the selected frequency must be appropriate for your financial situation and your investment objectives. HOW CAN YOU BUILD SAVINGS AT YOU OWN PACE WHILE BENEFITING FROM CORUM S PERFORMANCE? CORUM launches the Regular Investment Plan: this solution allows you to build savings by investing in real estate on a regular basis and according to your financial circumstances. HOW DOES IT WORK? You only need to own or buy one CORUM share at 1 060, and then: AMOUNT You select how much you wish to automatically invest (minimum amount: 50, including all costs), according to your financial circumstances. FREQUENCY You decide how often you want to invest: monthly, quarterly, half-yearly or yearly, with no mandatory commitment period. PROCEDURE You fill out the Regular Investment Plan s enrolment form and submit it to your CORUM representative. PERFORMANCE Each automatic investment entitles you to receive CORUM dividends*, once the 5-month period to dividend entitlement is over. * Potential dividends WITH 200 PER MONTH FOR 10 YEARS, YOU WILL HAVE SAVED *. DURING THESE 10 YEARS YOU WILL HAVE EARNED 7 159** ON YOUR INVESTMENT FREEDOM AND FLEXIBILITY You can change or stop the automatic investments at any time, without charge and effective immediately. * Net of subscription fees ** Income not guaranteed. It is estimated based on a target dividend yield of 6% and assuming that you previously purchased one share for No increases in the share price are assumed and the value of the investment is assumed to grow steadily over the investment period, without any fluctuation. Any income generated is net of management fees, includes the period to dividend entitlement, but does not take into account taxation, which varies according to each taxpayer's individual circumstances.

8 Warnings The management company cannot guarantee that shareholders will be able to sell their shares. Their initial investment cannot be guaranteed and its value may fluctuate throughout the investment period depending on the situation of the real estate market. The recommended holding period for the shares is 8 to 12 years and share liquidity is limited throughout the life of the SCPI. We recommend that you make sure that investing in the SCPI is appropriate for your financial situation. Procedures for subscribing to the capital increase Upon capital increases, the SCPI s Management Company receives a subscription fee of 11.96% (including taxes) of subscription price. This fee is deducted from the share premium. Subscriptions can be received up to the maximum amount of share capital authorised in the Company s Articles of Association ( authorised share capital ), which was set at k. When this maximum amount is reached, subscriptions are only accepted to be matched with redemption requests. Redemption procedures Since the SCPI is an open-ended company, all shareholders may request the redemption of all or part of their shares. When the Management Company receives a redemption request, if there is no redemption fund and if the amount of subscription requests is greater than or equal to the amount of the redemption request, shares are redeemed based on the current subscription price less the subscription fee paid to the Management Company, i.e per share since 1 June Redemption requests submitted to the Management Company shall be centralised in chronological order of receipt, in a register kept at the registered office of the Company. Redemption requests shall be submitted to the management company by registered letter with acknowledgement of receipt along with the share certificates, and the relevant shares shall be cancelled. Transfer procedures 1. Direct transfer (off market) Transfers may be freely negotiated between the parties. Shareholders may sell their shares directly to another shareholder or a third party. In such case, it is their responsibility to find a buyer without the assistance of the Management Company and to carry out all transfer formalities. In case of an off-market transaction, the Management Company shall only be required to record the transfer in the shareholder register. All share transfers shall be considered effective from the date they are recorded in the transfer register. 2. Entitlement to dividends and shareholder approval for transfers Interim dividends attached to the seller s shares shall cease to accrue and any other rights attached shall expire on the last day of the month preceding the transfer. For the buyer, interim dividends attached to the shares shall begin to accrue from the first day of the month of transfer. Share transfers do not require shareholder approval. 3. Transfer tax Transaction fees shall be borne by the buyer, including in particular a transfer tax of 5% (rate effective as of 1 January 2017) and a fixed processing fee of 240 including taxes. Tax treatment 1. Tax return Every year, your Management Company CORUM Asset Management provides you with all the information you need to compute your income related to the CORUM SCPI for the year ended and to file your tax return. 2. Capital gains on property Capital gains on property realised in France are subject to a fixed withholding tax rate of 19% (rate effective as of 1 January 2016) and to social security contributions of 15.5% (rate effective since 1 July 2012), amounting to a total tax rate of 34.5%. For the calculation of the tax base for capital gains on property, a different rate schedule was established for the tax deduction based on the holding period. Gross capital gains (selling price - acquisition price including costs and fees) are applied a 6% tax deduction for each year of the holding period after the 5 th year and until the 21 st year (1.65% for social security contributions), 4% after the 22 nd year (1.60% for social security contributions), and 9% for each year after the 22 nd year only for social security contributions. Therefore, the sale of property assets is exempt from capital gains taxes after 22 years and from social security contributions after 30 years. Between the 23 rd and 30 th years of the holding period, capital gains are only subject to social security contributions. Tax on capital gains on property in excess of : This is a tax on the sale of properties by SCPIs resulting in a capital gain exceeding The tax authorities acknowledged that the threshold applies for each shareholder subject to income tax. The surcharge is calculated from the first euro according to a progressive scale where the surcharge rate varies from 2% to 6% depending on the amount of capital gain. The tax is applied to the amount of taxable capital gains on the basis of ordinary tax law and after applying deductions based on the holding period. 3. Finance income Finance income is that resulting from investments of cash available until it is used for new real estate investments. Financial income is subject to income tax. A 24% tax rate is withheld by the Management Company and can be set off against income tax payable for the year when the income was received. Income tax paid in excess may be refunded by the tax authorities. Taxpayers whose reference taxable income (revenu fiscal de référence) for 2016 is less than (single persons) or (couples) may request tax exemption for the income to be received during tax year 2018 by submitting a sworn statement no later than 30 November Furthermore, for taxpayers receiving less than per year in interests, only the 24% tax rate will apply, meaning that this rate will be regarded as a fixed tax rate in full discharge of tax liability for these taxpayers. Every year by 30 November, shareholders shall (if applicable) renew or submit to the Management Company their exemption request for the income to be received for the next year. 4. Non-resident shareholders Shareholders are required to immediately notify the Management Company of any change in their residency status. Non-resident shareholders should be aware that it is their responsibility to be informed of any potential local tax conditions that might be applicable as a result of their tax residence or personal situation. Tax treatment depends on the individual circumstances of each shareholder and may change over time. 5. Foreign income In accordance with double taxation treaties, rental and finance income received abroad shall be taxable in the country where the property is located and shall be tax-exempt in France, subject to the French effective tax rate or tax credit mechanisms. CORUM is responsible for paying foreign taxes to the relevant tax authorities on behalf of the shareholders. Corporate life Your company s Articles of Association, Prospectus, latest Quarterly Newsletter and Annual Report are available free of charge on the website: en.corum.fr. The Annual General Meeting took place on April 20, All the resolutions put forward were passed. Any change of postal address, bank details, tax treatment or status or other, shall be notified as soon as possible and, at the latest, by the end of the month, to the Management Company CORUM Asset Management along with all necessary supporting documentation. Buying shares with borrowed money If they borrow money to buy shares, investors should bear in mind that they may experience difficulties in meeting their interest obligations, especially if they decided to cover interest payments with the potential dividends to be received from the SCPI, or in repaying the principal amount of the loan in the event of a downturn in real estate prices. Investors shall bear the sole responsibility for any loan they may take out. If shares bought with borrowed money do not provide sufficient earnings to repay the loan, or in the event of a price decline when the investor seeks to sell their shares, the investor will have to pay the difference. GLOSSARY Period to dividend entitlement: Period between the date of share acquisition and the date dividends attached to the shares begin to accrue. Subscribers should take this period into account, especially if they borrowed money to buy shares, in which case loan repayments might start before they begin to receive dividends. Dividend yield (DVM ratio): The annualised dividend yield, defined as gross dividends (before French and foreign taxes and social secutity contributions) paid for financial year N (including special dividends and portion of distributed capital gains) divided by the average acquisition share price over financial year N, is used by CORUM as a financial performance metric. Retained earnings (RE): Share of distributable earnings that are not distributed. Net initial yield: This is the rental yield as of the date of acquisition of the property, calculated as the annual rent divided by the acquisition price including transfer tax and brokerage fees. Financial occupancy rate: Actual rental income / maximum potential rental income. This rate is used to measure the financial performance of rental properties. Physical occupancy rate: Total occupied floor area / total floor area owned. It should be borne in mind that each management company uses a specific calculation method for this rate, which precludes any comparison between SCPIs. Internal rate of return (IRR): This metric is used to measure the profitability of an investment over a given period. It reflects the distributed earnings and changes in share price. Registered office: 1 rue Euler, Paris, France Registered in the Paris Trade and Companies Register (RCS) under No on 28 February 2012 Initial share capital: Share capital as of 30 June 2017: SCPI prospectus approved by the French financial authority (AMF) under No on 24 July Notice in the official French Journal of Mandatory Legal Notices BALO No. 3 dated 6 January Management Company: Corum Asset Management, a company authorised by the French Financial Markets Authority (AMF) on 14 April 2011 under No. GP , and authorised as an AIFM. CORUM Asset Management 1 rue Euler, Paris, France Tel: corum@corum-am.com en.corum.fr