Retail real

estate in
Continental
Europe
Contents
02 Key figures
06 Governance
12 Stock market

14

16 Vision
Where are we heading tomorrow?
24 Action
How do we create value?

34

36 Shopping centers
38 France-Belgium
42 Scandinavia
46 Italy-Greece
48 Iberia
50 Central Europe
52 Retail properties
54 Office properties

56

58 Shopping centers
72 Retail properties
72 Office properties

73

* Glossary
All of the terms followed
by an asterisk* are defined
in the glossary on pages 280-282.
Profile Real estate
holdings

With real estate holdings valued at 15.1 billion euros (1) and located in 13 European
countries, Klépierre is a first rank player in the continental European retail real estate*
15.1
€ Bn (1)

sector.
Thanks to the expertise of its 1 500 employees, the Klépierre Group – owner, manager and
developer of retail real estate assets for more than fifty years – offers retailers a unique range of Annual visitors

1.5
retail locations in the most dynamic regions (France, Scandinavia, Northern Italy) and a diversity
of retail formats that offer the best possible response to the needs of consumers.
This positioning in the most resilient real estate segment guarantees steady and solid revenue Bn
creation. This performance, combined with a healthy financial structure, allows the Group
to undertake renovation-extension programs in areas whose retail drawing power and potential
are confirmed as well as large shopping center development projects that define the retail real
estate landscape of tomorrow. Development
pipeline*
(1) Excluding transfer duties, including retail and office properties.

€ 3.7 Bn

Klépierre – 2010 Annual report | 1

 Our operating and financial performances

A CONSTANTLY EXPANDING
EUROPEAN PLATFORM Presence in Business

13 96%
2006 2007 2008 2009 2010
Number of shopping centers owned 236 240 276 274 273
Appraised values, transfer duties 8 829 10 937 14 364 14 357 15 114
excluded (1)
Workforce
Number of centers managed
1 032
342
1 103
342
1 516
378
1 519
374
1 495
356 countries Retail real estate*
(1) In millions of euros, total share.

Rents up sharply, with a focus

on the most dynamic regions of Europe

Gross rents* 36.7

Geographic breakdown
in millions of euros 43.8
49.9
42.8 Central Europe Central Europe
52.4 12% 8%
33.7 Iberia Iberia
48.8 11%
52.8 23.5 831.7 14%
2.9 787.4
France/ France/
620.1 Belgium Belgium
455.2 517.9
58% 48%
Italy/
Italy/ Greece
Greece 13%
Total: 510.9 Total: 590.2 Total: 706.2 Total: 880.1 Total: 912.2 16% Scandinavia
2006 2007 2008 2009 2010 20%

Shopping centers Retail properties Office properties 2006 2010

2T
 he strong rise in rents from the retail 2 In 2010, more than 80% of rents were generated by regions
real estate segment reflects the Group’s that are the most robust in terms of retail tenant revenue growth
ongoing efforts to refocus on its core as well as growth in rents.
business.

2 | Klépierre – 2010 Annual report

 Workforce Leases under Financial
management occupancy rate*
1 495 >17 000 97.1%

NET CURRENT CASH FLOW* DIVIDEND EPRA NnnAV*

in euros per share in euros per share in euros per share

1.35 (2) 32.2 (1)

2.04 (1) 1.25 1.25 1.25 30.0 (1)
1.99 (1) 1.96 28.1
1.85 (1) 1.07 25.7 (1)
1.60 (1) 25.5 (1)

2006 (3) 2007 2008 2009 2010 2006 (3) 2007 2008 2009 2010 2006 (3) 2007 2008 2009 2010

2 Net current cash flow per share fell 2 84.6% of shareholders opted to receive 2 EPRA NNNAV per share (triple net
slightly compared with 2009. Average their dividend in the form of stock rather asset value) is up significantly
annual change over the past five years than cash in 2010 for fiscal year 2009. compared with year-end 2009 (+9.3%).
is +5.5%. This increase is attributable for
2 In 2010, Klépierre will ask its sharehold- the most part to the increase
ers to approve the payment of a cash in the values of the Group’s real estate
dividend of 1.35 euros, which is an 8.0% holdings as appraised externally.
increase per share over the dividend paid
in respect of 2009.

(1) Data adjusted to reflect the capital increases carried out in December 2008 (2) Pending shareholder approval on April 7, 2011.
and/or May of 2009 and 2010 (payment of the dividend in shares). (3) Data adjusted to reflect the impact of the stock split on September 3, 2007.

Klépierre – 2010 Annual report | 3

 Our societal and environmental performances

Staff training and development: a priority for the Group

AVERAGE NUMBER OF TRAINING DAYS RATE OF ACCESS TO TRAINING
PER YEAR AND PER EMPLOYEE
3.5 78%
77%
3.0 71%

1.7

2008 2009 2010 2008 2009 2010

Diversity: strong commitment yields results

PERCENTAGE OF WOMEN IN THE TOTAL
WORKFORCE AND SHARE IN PROMOTIONS
60%
57%
54% 55% 55%

18
52%

workers
with disabilities, a threefold
2008 2009 2010
increase since 2008
Percentage of women in total workforce
Percentage of women in promotions

Notable progress in the area of environmental performance

FLUID CONSUMPTION PRODUCTION Of NON-HAZARDOUS GREENHOUSE GAS EMISSIONS
(electricity, HVAC, water) INDUSTRIAL WASTE (NHIW) BY EMISSION SOURCE
AND CARDBOARD (in CO2 equivalent)

97
91 14.6 12 864
13.2
11 493
21 324
38% 24 449
0.50 35%
0.54
35 38
5.1 5.0 94 015
89 401

2009 2010 2009 2010 Total: 127 203 Total: 125 343

2009 2010
Electricity in kWh/sq.m. mall + GLA * NHIW in kg/sq.m. mall + GLA
HVAC in kWh/sq.m. mall + GLA Cardboard in kg/sq.m. mall + GLA Electricity HVAC
Water in m3/sq.m. mall + GLA Cardboard/NHIW in % Waste (NHIW+Cardboard) and wastewater

4 | Klépierre – 2010 Annual report

 64%
of all is
training is done
via SégéCampus,
the Group’s corporate university

A transparent approach to ratings

Klépierre maintains ongoing relationships with the extra-financial rat- SAM Research rating
ing agencies, as well as with SRI (Socially Responsible Investment)
38 2006
analysts and investors. The Vigeo and SAM Research ratings for 55 2007
Overall score 58 2008
Klépierre have shown steady improvement for several years, dem- 2009
61
onstrating both the relevance of the measures adopted by Klépierre 67 2010
and its efforts to achieve greater transparency.
24
Environmental 47
Klépierre is continental Europe’s only listed real estate company that dimension 49
54
is included in the following 7 indices: 65
• Dow Jones Sustainability Index World
43
• Dow Jones Sustainability Index Europe 53
Social
• FTSE4Good Index dimension 59
60
• ASPI Eurozone 63
• Ethibel Excellence
56
• Ethibel Pioneer (1) 72
Economic
• Kempen/SNS European SRI Universe (2) dimension 72
74
(1) Since 2011. 76
(2) Since 2010.

Vigeo rating – February 2010

Environmental, social Klépierre’s ( ) positioning compared with other
and corporate governance performance companies in its industry (min max)
www.vigeo.com

01/2009 02/2010
100
Theme Ratings Scores Ratings Scores
Human rights ++ 52 ++ 60 75
Environment + 34 + 63
Human resources ++ 55 ++ 59 50
Market behavior + 47 + 40
25
Corporate governance - 34 = 44
Community involvment + 40 + 58 0
Human Environment Human Market Corporate Community
++ The Company is ranked as a leading performer in its sector. rights resources behavior governance involvment
+  The Company is ranked as an active performer in its sector.
= The Company is ranked as an average performer in its sector.
- The Company is ranked as a bellow average performer in its sector.
-- The Company is ranked as a poor performer in its sector.

Klépierre – 2010 Annual report | 5

 Interview with the Chairman of the Executive Board

Laurent MOREL
Chairman of the Executive Board

6 | Klépierre – 2010 Annual report

What is your look back on 2010? Given the cost of building them, which is lower than the asset
Laurent Morel: In Europe, which is still feeling the effects prices on existing facilities in the market, these developments
of the crisis, consumer spending was fairly robust and even create substantial value.
up slightly for the shopping centers in Klépierre’s portfolio.
Once again, we showed that our revenues are exceptionally How are you tackling 2011?
resilient. Klépierre’s major retail tenants were still profitable last L. M.: 2011 will see the pursuit of our development program
year. It is also interesting to note how creative and dynamic the with the delivery of our flagship project: the Millénaire shopping
retail sector manages to remain: most of the major retailers did center in Aubervilliers. Other developments of large shopping
not hesitate to take the lead, investing in new stores while also centers are also committed in France and in Scandinavia for the
revamping their existing formats. Is there a better way to meet most part, for a total investment of 1.2 billion euros. There will be
the evolving expectations and needs of consumers, while also intense activity on this front in 2011. But the success of Klépierre
reassuring and retaining them? As a real estate developer, also lies in the ability of its teams to make good judgments and
Klépierre deploys all of its retail expertise and its investment execute flawlessly: our big challenge is therefore to continue to
capacity in support of this industry as it strategically repositions train employees, give them the means to excel in their respective
itself. That’s what makes our business so exciting. areas of added value and keep them motivated.

What strategy did Klépierre adopt against Over the longer term, how do you see the future?
this backdrop? What are the industry’s biggest challenges
L. M.: Our strategy has followed a consistent path in the last and opportunities?
decade: last year, we further reinforced our retail real estate L. M.: The number one challenge that our industry faces is related
portfolio and today are almost exclusively invested in this to shifting patterns of consumption. The mounting influence of
particular asset class. In terms of geography, the decision to focus new technologies is a good illustration. While e-business will never
on the most solid and promising markets of Europe was borne out fully replace the magic of the encounter between a retailer and
by the facts. Our recent investments give preference a client, the internet can, on the other hand, enable us to interact
to France, Scandinavia and Northern Italy, three markets that are better with consumers. On an even deeper level, as an important
in the best shape today. With respect to financial structure as well, player in construction and urban planning, our industry needs to
2010 was fruitful. We issued bonds worth 900 million euros under be able to take on board the challenges of environmental issues.
good market conditions and strengthened our shareholders’ Klépierre was an early adopter of the strategy of educating people
equity through the payout of our dividend in shares. on these issues inside the Company, and the management
and construction of its shopping centers are compliant with
If you had to summarize your way of doing business the highest environmental and economic standards. For example,
in a nutshell, what would you say? the Millénaire shopping center, when it opens, will be the first
L. M.: From a highly resilient revenue base generated by major shopping center in France that has obtained both HQE
shopping centers, the business of Klépierre consists of constantly and BREEAM certification. Managed and transformed in this way,
enhancing this potential. There are two complementary sources our real estate holdings will continue to increase in value and
of leverage for doing so. The first is active management of the economic performance level. Lastly, it is worth noting that in these
centers, which helps to make them steadily more attractive to troubled economic times the French real estate investment trust
consumers. This appeal supports and galvanizes retail tenant market has been robust in general. This sector was born just eight
revenues, which in turn ensures steady rental growth. The second years ago, and it has enabled the emergence and development
is the acquisition and above all the creation of new centers. of large listed vehicles that are able to create jobs, value and
Fifty years of expertise have given Klépierre a decisive edge in this industry. Maintaining or even converging these vehicles at
area when it comes to choosing the best sites and then designing the European level will no doubt hold one of the keys to growth
facilities that support and anticipate changes in urban retailing. in our sector in the years ahead.

Klépierre – 2010 Annual report | 7

 The Executive Board and the Executive Committee

The Executive Board

The Executive Board is responsible for managing Klépierre’s operations, assisted by the Klépierre-Ségécé Executive
Committee, whose members offer their substantial expertise and experience.

1 Laurent MOREL 2 Jean-Michel GAULT

Member of the Executive Board since June 1, 2005, Member of the Executive Board since June 1, 2005,
and its Chairman since January 1, 2009 and Deputy CEO in charge of Finance and the Office Property Segment
After having begun his career with Compagnie Bancaire, Laurent Morel took since January 1, 2009
part in the 1989 founding of the Arval group, where he was head of inter- Jean-Michel Gault began his career with GTM International (Vinci group) as a
national business development and then Chief Financial Officer. In 1999, he financial controller, before joining Cogedim, where he served as head of financial
became the first CEO of the newly created Artegy, a subsidiary of BNP Paribas services before being appointed Chief Financial Officer. In 1996, he joined the
specializing in industrial vehicle leasing. He was in charge of business develop- real estate investment division of Paribas, and became the CFO of Compagnie
ment in France and the United Kingdom before joining the Klépierre Group in Foncière, where he supervised its merger with Klépierre. He became Klépierre’s
February 2005. He became the CEO of Ségécé on January 1, 2006. CFO in 1998.
48 years old – Engineering graduate from the École Centrale de Paris 51 years old – Graduate of the École Supérieure de Commerce of Bordeaux

1 2 3 4 5 6 7

The Klépierre-Ségécé Executive Committee

This committee, which is made up of the members of the Executive Board and the principal executives of the Company, was
formed to monitor the operations and business of the Group, and takes part in developing strategy. It meets at least weekly.
3 Éric DEGOUY 6 Marie-Thérèse DIMASI
Chief Property Management Officer Chief Legal Officer
Member of the Executive Committee since April 1, 2008 Member of the Executive Committee since April 1, 2008
After joining Ségécé in 1976 as a shopping center general manager, Éric Degouy After having worked for an SEM (mixed private/public company), where she was
was appointed Program Manager and then Head of Operations and Deputy in charge of public/private relations in connection with the assembly of a new
General Manager in charge of France. Since January 2005, he has served transport infrastructure, Marie-Thérèse Dimasi joined a real estate affiliate of
as Chief Property Management Officer for the Group in Europe. the Caisse des Dépôts group where, as Chief Legal Counsel she spearheaded
59 years old – Graduate of the IUT de Paris several complex transactions in France and abroad. She joined the Klépierre
Group in 2001 as Chief Corporate Legal Officer, before taking on the role
4 Bernard of Chief Legal Officer for the Group.
DESLANDES
50 years old – Post-graduate degree in international business law
Chief Development Officer
and an MBA from HEC.
Member of the Executive Committee since April 1, 2008
After having served in diverse executive capacities in the area of development 7 Bruno VALENTIN
for the commercial property developers Michel Laurent and then SINVIM,
Bernard Deslandes joined Ségécé in 1992. He held a number of Program Chief Accounting, Management Control and IT Systems Officer
Management positions and then, in 1998, was appointed Chief International Member of the Executive Committee since April 1, 2008
Development Officer. In August of 2007, he became Chief Development Officer Bruno Valentin began his career as an auditor with Conseils Associés before joining
for the Group as a whole. the Banking and Real Estate Division of Ernst & Young Audit. He began working
50 years old – Post-graduate degree in urban planning from the Université for Klépierre in 2004 as head of the Control Accounting Department.
Bordeaux III. In August 2006, his role was expanded to include Management Control and,
in 2010, information systems.
5 Frédéric de KLOPSTEIN 45 years old – Master’s in management science from the Université
Chief Investment Officer Paris-Dauphine, CPA
Member of the Executive Committee since April 1, 2008
After working for L’Oréal, where as head of management reporting he took part
in setting up the Czech subsidiary, Frédéric de Klopstein joined the Financial
Management Division of Paribas in 1996 as a special projects manager.
In 2000, he began managing Klépierre’s external growth projects (Carrefour,
Finiper, Central Europe, etc.). Since September 2006, he has been the Group’s
Chief Investment Officer.
40 years old – Graduate of HEC

8 | Klépierre – 2010 Annual report

 The Supervisory Board

« Validate important orientations

to ensure a sustainable and profitable
development for the Group. »
In addition to the thirty or so meetings of the Board and sub-committee
work that is ongoing, the Supervisory Board from time to time takes
a deeper look at the relevance of the Group’s strategy. In early 2011,
we had just such a discussion, and it led to the validation of several
strategic orientations that are very important for ensuring the Company’s
development is both sustainable and profitable.
This is particularly true with respect to the bid for geographic diversification
the Group has been pursuing with determination over the past ten years.
The economic fallout from recent events has been quite uneven across
Europe, and our geographic diversification enabled us in 2010 to
maintain the high levels of lease income we achieved in 2009. Given
the magnitude of the current crisis, this achievement bears highlighting
and has in fact encouraged the Company to step up its investments
in places like Scandinavia, France and Northern Italy, which are
demographically dynamic regions that offer greater economic stability.
In addition, consumer preference for proximity is clearly one of the
lifestyle trends that tallies with both changes in family structure and
population demographics. But this undeniable phenomenon does not
mean the death of the shopping center concept at all. Some of these
assets were designed as downtown facilities, while many others have
structured themselves around zones of centrality located on the outskirts
of large metropolitan areas. The urban planning reforms that are pending
in a number of countries should strengthen the reasonable planning
of facilities in a way that is very favourable to existing shopping centers.
The fairly spectacular development of online trade may also turn out
to be a real challenge for the future. The responses to this challenge,
however, appear to be multiple and varied, which means that the role Michel CLAIR
of the shopping center is bound to become more important. Chairman of the Supervisory Board
Date of initial appointment: December 19, 2008 (1)
The existence of a complementary range in terms of choice, pleasure
A Conseiller Référendaire for the Cour des Comptes since 1975, Michel Clair
and logistics should win out and should also encourage retailers and has occupied a number of different positions within various French government
shopping center managers to make spectacular changes in the panoply agencies and ministries. From 1986 to 1988, he was head of the office
of services they offer, not to mention the product offer and their of the French Trade Minister. In 1991, he joined Compagnie Bancaire as
corporate secretary and a member of the Executive Board. After the Paribas–
architectural layout. The movement is already underway and it will Compagnie Bancaire merger, he became a member of the Paribas Executive
confirm the irreplaceable role that the shopping center occupies Committee in charge of real estate business and pooled corporate services.
in our urban universe. He joined the Klépierre Group in 1996 as a member of the Board of
Directors, and then became the Board’s Chairman the following year.
In asking the shareholders of Klépierre to approve a higher dividend this He was Chairman of the Klépierre Executive Board from 1998 to 2008.
year, we are in fact demonstrating our confidence in the benefits we will 64 – Graduate of ENA (École Nationale d’Administration)
reap from these necessary changes, which we in fact welcome. (1) Effective January 1, 2009.

Role of the Supervisory Board For further information

The role of the Supervisory Board is to oversee the management of the Company by its Executive Board.
The latter submits a management report on a quarterly basis. In order to accomplish its mission and ensure
consult the following pages and
that shareholder interests are protected, the Supervisory Board has formed 4 special-purpose sub-committees the report of the Chairman of the
composed of board members with relevant and substantial experience and expertise. Supervisory Board (page 237).
Number of meeting in 2010: 12 – 87% attendance rate

Klépierre – 2010 Annual report | 9

 The members of the Supervisory Board

Vivien Jérôme BÉDIER Bertrand Bertrand

LÉVY-GARBOUA Independent director (1) de FEYDEAU JACQUILLAT
Vice Chairman Chairman of the Sustainable Independent director (1) Independent director (1)
of the Supervisory Board Development Committee Chairman of the Investment Chairman of the Audit
Date of initial appointment: Date of initial appointment: Committee Committee
April 12, 2000 April 8, 2004 Date of initial appointment: Date of initial appointment:
Vivien Lévy-Garboua began Executive chairman of the July 21, 1998 April 12, 2001
his professional career in Fédération des Entreprises du Bertrand de Feydeau has held Chairman-CEO of Associés
the research department at Commerce et de la Distribution and continues to hold a number en Finance and the Cercle
the Banque de France, and then and chairman of the board of of positions in companies whose des Économistes, professor at
joined BNP Paribas in 1980. directors of the Union d’Économie focus is real estate. Currently Sciences Po (Institut d’Études
He occupied a number of Sociale pour le Logement, Jérôme the chairman of Foncière Politiques de Paris), Bertrand
different executive positions Bédier was a partner with Deloitte Développement Logements, Jacquillat has published several
before being appointed Senior & Touche, where he was in charge he is also chairman of both books and over a hundred
Adviser in September 2008. of international development. the Fondation Palladio and articles, many of them in peer
64 years old – Graduate of Previously, he worked for various the Fondation des Bernardins. reviewed scientific journals.
Polytechnique, he also has a PhD government ministries (Industry, 62 years old – Master of law 66 years old – Graduate of HEC,
in economics from Harvard Economy and Finance, and degree and graduate of Institut Sciences Po (Institut d’Études
Commerce and Artisanat). d’études Politiques de Paris Politiques de Paris), Harvard MBA,
55 years old – Graduate of the a doctorate in economics and
Institut d’Études Politiques de financial management from
Paris and of the École Nationale the Université Paris – Dauphine,
d’Administration and a law degree

The Selection and The Audit Committee

Compensation Committee (Internal regulations amended on April 8, 2004)
(Internal regulations amended on April 8, 2004) Set up in 1998, the role of the audit committee is to examine
Set up in 1998, this Committee meets at least once a year. In addition to its and assess the various financial documents that are published
standard and usual role (forms recommendations on Executive and Board by the Company as part of its annual and interim accounting
appointments and on Executive Board and Supervisory Board compensation), process; the Committee is also responsible for overseeing
this Committee performs an annual review of the independence of the the Company’s internal and external control and audit systems.
members of the Supervisory Board, in compliance with the recommendations It meets at least twice a year and can ask the Executive Board
formulated by the code of corporate governance published by AFEP and at any time for information or a hearing related to its areas
Medef. of oversight. The members of the Executive Board and the
representatives of the statutory auditors attend meetings
Number of meetings in 2010: 2 of the Audit Committee.
Attendance rate: 100% Number of meetings in 2010: 3
Attendance rate: 83.3%

10 | Klépierre – 2010 Annual report

Bertrand LETAMENDIA Dominique AUBERNON Dominique HOENN Philippe THEL
Independent director (1) Date of initial appointment: Date of first appointment: Date of initial appointment:
Chairman of the Selection March 31, 2010 April 8, 2004 April 7, 2006
and Remuneration Committee Dominique Aubernon held a Dominique Hoenn spent its entire Philippe Thel has been with
Date of initial appointment: number of different positions professional career within the BNP Paribas throughout its
July 21, 1998 within BNP Paribas, particularly BNP Paribas group which he entire career, where he has held
in the areas of fixed income was notably Senior Advisor until a number of executive positions
Bertrand Letamendia has spent
and structured finance, before 2009. He served as Chairman of in the Corporate Banking division
his entire career in the real estate
being appointed to serve on Klépierre and Klémurs Supervisory before becoming head of real
business. He was successively
the Strategic Board, in charge Boards from 2005 to 2008 and estate financing for France.
head of development for STIM
of defining and implementing the 2006 for 2008, respectively. He is In 2000, his responsibilities
(the Bouygues group), head of
financial policy of BNP Paribas also member of the Supervisory were expanded to encompass
Kaufman & Broad, and head
in March 2008. Board of Klémurs, member of the European real estate financing
of real estate for the insurance
55 years old – Post-graduate Collège de l’Autorité des marchers at BNP Paribas.
group AGF from 1997 to 2008.
degree in corporate management financiers (AMF) and of the 56 years old – Graduate of the
In 2009, he founded AITA Conseils
and business strategy from the Collège de l’Autorité de contrôle École Supérieure de Commerce
SAS (an economic, commercial
Université Paris-Dauphine prudentiel. de Toulouse, degree in economics
and real estate consulting firm).
70 years old – Graduate
64 years old – Graduate of ESSEC
of ESSEC

(1) An independent director not only has no executive management role in the For more information on the positions
Company or its Group, but also has no particular interest-based relationship with
the Company or its Group (i.e., a significant shareholder, salaried position, etc.) held by members of the Supervisory Board,
that could interfere with his or her independent judgment. please consult pages 112 and following.

The Investment Committee The Sustainable Development Committee

(Internal regulations amended on February 6, 2009) (Internal regulations amended on October 31, 2008)
Instituted in 1998, this Committee meets at least twice Since it was formed in April 2008, this committee has been charged
a year, for the purpose of recommending the Group’s with identifying the principal risk categories to which the Group’s business
investment and disposal policies. It is a genuine decision- is exposed, monitoring the action plan put in place to deal with them,
making support for the Supervisory Board in this area. and examining the Group’s contribution to sustainable development.
The members of the Executive Board attend the meetings
of the Investment Committee as well. The Committee is Number of meetings in 2010: 3
empowered to commission Executive Board audits and Attendance rate: 83.3%
request additional information at the behest of 2 of its
members.
Number of meetings in 2010: 10 For more information on the composition and work
Attendance rate: 91.7% of the committees, please consult the report of the Chairman
of the Supervisory Board (pages 237 and following).

Klépierre – 2010 Annual report | 11

 2010 in review

A year in the stock market

amidst high volatility
Between concerns over sovereign debt, bank stress testing While average daily volumes traded on Euronext ParisTM fell
and a good corporate earnings picture, 2010 sent mixed signals compared with those observed in the course of 2009 (around
to equity investors that were a source of volatility in the capital 363 000 shares traded, compared with 523 000 one year earlier),
markets. After a difficult first half of 2010, Klépierre stock prices a comparative assessment is not particularly relevant, since
recovered in the second half and ended the year at 27.00 euros, the alternative trading platforms now account for nearly 40%
a decline of 4.91% over one year. In 2009, stock price appreciation of all trades in the stock, compared with just 20% a year earlier.
was 62.2%. The EPRA* index appreciated by 8.78% over
the same period, versus +34.4% in 2009. Klémurs’ stock price rose by 12.34% in 2010, ending the year
at 17.30 euros.

Stock price information

ISIN code: FR0000121964/Mnemonic code: LI/Market: Euronext ParisTM – Compartiment A/Number of shares: 189 648 240/
Indices: SBF80, SBF120, SBF250, Euronext 100, SIIC, CAC AllShares, CAC Next20, CAC Financials CAC Real Estate,
DJ STOXX 600, EPRA Eurozone, GPR 250 Index. Sustainable development indices: Dow Jones Sustainability Index World, Dow Jones
Sustainability Index Europe, FTSE4Good Index, ASPI Eurozone, Ethibel Excellence, Ethibel Pioneer, Kempen/SNS European SRI Universe.

Klépierre stock price performance

- Klépierre - EPRA Eurozone - CAC 40 Weekly average of daily trading volumes on Euronext ParisTM

180 1 600 000

160 1 400 000

140 1 200 000

120 1 000 000

100 800 000

80 600 000

60 400 000

40 200 000

20 0

09/01 09/07 10/01 10/07 10/12

Source: Euronext, EPRA (base 100 at 12/31/2008).

Stock price performance 2003 2004 2005 2006 2007 2008 2009 2010
Closing price 15.47 21.13 25.71 46.37 34.01 17.50 28.39 27.00
% increase 10.9% 36.6% 21.7% 80.4% -26.6% -48.6% 62.2% -4.91%
CAC 40 increase 16.1% 7.4% 23.4% 17.5% 1.3% -42.7% 22.3% -3.34%
EPRA Eurozone index increase 13.2% 31.0% 23.5% 45.5% -26.5% -45.4% 34.4% 8.78%

Source: Euronext, EPRA.

12 | Klépierre – 2010 Annual report

 Shareholder relations

Transparency and discipline

For Klépierre, establishing long-term, trust-based relationships The website, which is continuously updated, offers access
with its shareholders means making sure they have access to all financial regulatory disclosures required by law and, more
to financial information that meets the highest standards of generally, all of the information the Group makes available to the
accuracy and transparency. market as a whole. Shareholder meetings provide an important
This commitment to transparency begins with the dissemination opportunity for individual shareholders to obtain information about
of press releases on earnings and revenues, naturally, as well as the Group, while analysts and institutional investors are offered
on all major events that impact the Group’s business. access to half-yearly presentations and quarterly conference
calls. Each year, they are invited to take part in a special visit
to a selected portion of the Group’s assets and have the
opportunity to meet its teams in the field as part of Investor
Days. In June of 2010, the destination was Italy.

The dividend payout policy is guided by the desire to offer

steady increases that are in line with improvements in the major
indicators (net current cash flow*, NAV*) as well as the goal
of distributing 60 to 70% of net current cash flow.
On April 7, 2011, Klépierre shareholders will be asked to
approve the payment of a cash dividend of 1.35 euros per share
in respect of fiscal year 2010.

For more information on capital

www.klepierre.com – Go to the Company’s and shareholders, consult the Capital
website for timely information. and shareholders section of the report
Click on “Finance”. (pages 226 and following).

2011 Agenda
2010 4th quarter and full-year 2010 01/25/2011
2010 annual earnings 02/08/2011
Annual meeting of the shareholders 04/07/2011
Dividend payout date 04/14/2011
2011 1st quarter revenues 04/27/2011
2011 2nd quarter revenues and 1st half earnings 07/25/2011
2011 3rd quarter revenues 10/20/2011

Klépierre – 2010 Annual report | 13

14 | Klépierre – 2010 Annual report
Strategy
page 16 page 24

Klépierre – 2010 Annual report | 15

16 | Klépierre – 2010 Annual report
Where
are we
heading
tomorrow?
While the level of private consumption has been
slowed down by the economic crisis, it nonetheless
remains robust. In this environment, retail real estate
once again demonstrated its strength, attesting
to the wisdom of Klépierre’s strategic choices.
In the pursuit of its development, the Group
is currently focusing its resources on the regions
of continental Europe with high potential, while
remaining more attentive than ever to consumers
and their changing needs.

Klépierre – 2010 Annual report | 17

 Because retail real estate
is more resistant to the real
estate cycle…

Jean-Michel Gault
Member of the Executive Board
and Deputy CEO in charge of finances
and the office property segment

18 | Klépierre – 2010 Annual report

 96%
of Klépierre’s
rents are
generated by retail real estate
assets

Retail real estate* presents a risk profile that is unlike resilience and adaptability throughout the crisis. Vacancy
that of other real estate segments, and particularly the rates at shopping centers stayed low, even when the real
office segment, in that it guarantees particularly secure estate cycle bottomed out, and new retailers have already
revenues. Why? Because these revenues are provided sprung up.
by rents paid by retail tenants and are directly linked This is why, although its historical focus has been
to their turnover. on office properties, Klépierre has shifted the focus
And retail revenues are closely tied to trends in of its strategy and business to retail properties for
household consumption, an aggregate which shows the past ten years.
low volatility and high resilience, even during periods In the course of the last decade, on the strength of
of economic downturn. developments and acquisitions in France as well as in
The diversity of tenants that is inherent to the shopping continental Europe, the Group has assembled a portfolio
center segment also boosts revenues, in particular that is mainly focused on retail assets and that is now
because the European retail sector showed great valued at 15.1 billion euros (excluding transfer duties).

30%
25%

20%

15%
10%

0%

-5%
-10%
-15% Retail
-20%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Offices

Annual change in retail

and office rent indexes in the European Union
Source: CB Richard Ellis EU15 Rent Index, annual change

Klépierre – 2010 Annual report | 19

 Because the European
regions have different
growth profiles…

Frédéric de Klopstein
Chief Investment Officer
and member of the Executive Committee

20 | Klépierre – 2010 Annual report

 Klépierre’s assets
are located in countries
or regions with the
highest GDP per capita

In Scandinavia, population it has no plans to necessarily cover the entirety of the

growth forecasts between territories in which it is present or to expand into new
now and 2030 hover countries. The idea is, rather, to focus on the regions
between 10 and 20%, that offer the greatest potential.
depending on the region. To this end, Klépierre can count on its vast knowledge
In France, the figure is about demographics, retail and urban planning, not only
close to 15% in the south at the country level but also at the regional and city level
and more than 10% for in Europe. 70% of Klépierre’s assets are already located
Île-de-France. It is also in France, in Scandinavia and in Northern Italy – those
high in Northern Italy, countries whose rents showed the most resistance
more than 6%. (1) in the face of the crisis.
These differentiated As with recent developments, the projects under way are
demographic data also mostly concentrated in these highly dynamic regions,
generally correspond which offer lasting growth prospects for the Group.
to household purchasing
power: the richest regions
are located in places where
population growth is expected
to be highest in the next twenty
years.
While Klépierre’s approach
remains squarely focused on Scandinavia: +9.9%
Europe, and consistent with the
growth strategies of its retail clients, Stockholm: +18.0%
Oslo: +19.7%
Malmö: +15.9%

Île-de-France: +10.7%
South of France: +16.7%
Budapest: +5.9%
Northern Italy: +6.3%
Madrid region: +10.6%
Algarve: +27.3%

Bernard Deslandes
Chief Development Officer
and member of the Executive Committee

Population growth forecasts between 2010 and 2030,

and recent regions of development for Klépierre (1)
(1) Source: Eurostat, regional EUROPOP 2008, January 2010.

Klépierre – 2010 Annual report | 21

 Because, depending
on his or her profile and living
environment, each client has
different expectations,

Éric Degouy
Chief Property Management Officer
and member of the Executive Committee

22 | Klépierre – 2010 Annual report

 356
shopping
centers managed

The consumption patterns of European consumers have First of all, convenience: the shopping center must
shifted in recent years without, however, diminishing their be both accessible and visible. Second, choice: every
aspirations. The desire is not to consume less as much shopper should be able to find the brands and products
as it is to consume differently and more responsibly. they are looking for, at the right price for their budget.
In addition to general aspirations, expectations are Last but not least, conviviality: more than just a place
multiple and vary from one socioeconomic group to the to make purchases, the shopping center is also a place
next, as well as from one geographic region to the next. to hang out, a place to participate in the community,
They also tend to evolve over time. a place to stroll, a place to have fun, offering services
Accordingly, these same consumers increasingly cite and events of quality.
pleasure shopping (1) as an important value. It is expected
(1) Communications, leisure and culture, hotels-bars-restaurants.
that purchases of this type will account for 17% of total (2) Source: Insee, BIPE.
household expenditures by 2018, compared with 15.5%
in 1998 (2). This trend varies from one country to the next,
however, with hotel-bar-restaurant spending going from
1.2% in Poland to 9.6% in Portugal.
The shopping center* is a living product; as such, it is Convenience
geared toward a public that is in perpetual motion and must Shopping center
respond to a wide and shifting variety of expectations. format adapted
This is why, at Klépierre, we don’t believe in the existence to the urban
environment
of just one right shopping center format. We believe in
the need for different formats, adapted to each context
and catchment area, from the regional center to the
downtown mall space, not to mention the hypermarket Choice Conviviality
mall. And there is no such thing as an immutable format Timely retail mix, Services,
either: every shopping center has to be subject to review fair prices retail and
cultural events
and sometimes has to undergo transformation in order
to ensure a perfect fit with the needs of its clients.
In response to these multiple challenges, Klépierre has
chosen a customized approach and organizes the
management of its facilities around three essential pillars The 3 keys
that benefit the client equally. to shopping center performance

Klépierre – 2010 Annual report | 23

24 | Klépierre – 2010 Annual report
How do
we create
value?
Enhance the value of assets, understand how to
compose and recompose the portfolio when the
time is right, and optimize financial management:
it is by combining these three levers that Klépierre
pursues growth and development. The Group’s
main pillar of support and value is its people,
whose expertise, talent and creativity remain
the vital link in the value chain.

Klépierre – 2010 Annual report | 25

 Action
lever
No. 1

Strengthen
the appeal
of shopping
centers Because the Group’s own revenue revenues, analysis of retail segment
growth depends on its retail tenants’ abil- performances, etc.
ity to generate higher sales, Klépierre puts Moreover, Klépierre rolls out a medium-
all of its expertise in play to increase the term strategic plan for every one of its
flow of visitors to each facility and pro- assets. Based on an analysis of the
mote its success. Its European position- principal components of the shopping
ing, the variety of its locations and its center – i.e., the projected development
focus on retail real estate* give the Group of its catchment area* , surrounding
unrivalled expertise and market vision. urban projects, how its performances
On the strength of this experience, compare with those of its main rivals –
Klépierre manages its real estate hold- the Group defines a set of medium-term
ings around a simple guiding principle: objectives (five years) and decides what
the ideal center for the consumer offers steps need to be taken to enhance its
a subtle balance between convenience, performances.
retail mix and conviviality.
Anticipating the needs
Shopping centers are of major retailers
constantly regenerated The economic crisis has not put a
Because we live in a period of abun- damper on the enthusiasm of Klépierre’s
dance, the retail landscape is in a process major account clients: they have not just
of constant transformation. Shopping managed to remain profitable for the
centers* are expected to remain on the most part; the most sophisticated cur-
cutting edge of trends at all times and, as rent retail concepts are even looking for
a consequence, must be able to quickly bigger spaces to display their products.
regenerate themselves. Klépierre, which not only owns but also
In addition to the daily effort of keeping manages and develops shopping cen-
an eye on the market and detecting valid ters, has the capacity to adapt existing
new retail concepts, the Group adjusts spaces by restructuring or extending
the composition of its centers using a existing assets. To anticipate the expec-
number of different tools: perception tations of its clients, always a major chal-
Arcades, Noisy-le-Grand, France studies, monthly tracking of retail tenant lenge for Klépierre, a special relational

26 | Klépierre – 2010 Annual report

 Relational marketing and specialty
leasing – generators of added value
Relational marketing and recognized specialist in to promote their products In 2010, a number of
multimedia services have the creation of multimedia in the 48 centers man- businesses were able
several positive impacts tools that strengthen aged by the Group in this to promote their products
on the business of a customer relationships region. via this platform, by
shopping center*. They and increase traffic: There are 5 formulas to sponsoring the Danish
not only enhance the websites, applications for choose from, exploiting street soccer champion-
relationship that binds the smartphones, interactive all of the resources at ship (10-15 year olds).
client and the shopping terminals, newsletters, the center’s disposal. In the course of the
center, they also provide databases, etc. The advertiser can opt second quarter, Steen
a means for the facility The subsidiary is also to be present visually & Strøm Media Partner
to differentiate itself and developing specialty (screens, floor markings, added Pop UP to its
firmly embrace modernity. leasing*. For example, etc.), can stage events service range, which
The appropriation of the Galae proposes using with product samples on enables retailers to lease
shopping center by the the shopping center as a hand or testing, or can temporary space in
client using these tools veritable media, allowing associate its name to an shopping centers so they
creates loyalty and brand advertisers to access event that is being held can install sales kiosks
awareness. visitors directly and inside or near the shop- or put on marketing
In France, Klépierre can present the latest prod- ping center (a sporting events. Galae also offers
count on the expertise ucts and services on offer. event, a contest, etc.). this service in a number of
of its subsidiary Galae In 2010, Galae conducted The shopping center French shopping centers.
to assist in rolling out more than 1 000 projects, can also be used as the
its strategies. Founded for revenues that equal point of anchorage for the From left to right:
in 2001, Galae is a those of an average-sized launch of a new product Karl Fredrik LUND
Corporate Marketing Director
shopping center. or a campaign, or the Steen & Strøm
The approach is identical advertiser can forge Jean-Luc Cesar DESFORGES
in Scandinavia, where a long-term partnership International Marketing Director
policy has been developed specifically for Steen & Strøm has that includes a little bit Jean-François BOUVIER
Director Galae
its global retailers. About sixty in total, developed an offering of each of the previously Gontran Thuring
they are all present in at least two of the for advertisers that want mentioned formulas. Head of Property Management Europe

Group’s countries of operation. The

objective is to manage current partner-
ships as well as potential growth by offer-
ing these retailers a single access point
to the European platform of Klépierre.

Hospitality on display
The only way to gain consumer loyalty
is to offer a more comfortable and pleas-
ant shopping experience than they can
find elsewhere. Since it was launched in
2009, the USE ® (Unique Shopping

Marketing
Experience) program has sought to har-
monize and develop the level of cus-
tomer care and services at Group
shopping centers. A resource for pooling
best practices, but also for training and
knowledge transfer, USE structures its
actions around 2 pillars: the Client
Pathway (fluidity, ambiance, ergonomics,
etc.) and the Client Relationship (the
sum total of all client-centric relational
signs). To cite but one example, several
of the Group’s centers in Europe that
cater mainly to families rolled out parent
spaces in 2010 featuring special ser-
vices (bottle warmers, changing tables,
etc.). By providing this kind of proactive,

Klépierre – 2010 Annual report | 27

 Action
lever
No. 1

Gulskogen Senter, Drammen, Norway

yet customized, management, Klépierre the centers, with Steen & Strøm achiev- social networking sites. Internet offers
helps retail tenants boost their footfall ing two aims in one gesture: creating a yet another channel for making contact
beyond what they would be if the store buzz while also offering consumers inno- with the client, allowing the latter to
was located outside of the shopping vative, high-quality animations. plan ahead or express his or her views
center* . To fully exploit the incredible potential on dedicated forums. The proximity
In addition to being a place to spend that shopping centers offer to the com- between the center and the client is no
time and share happy moments, the munity, Klépierre can also count on its longer just geographic.
shopping center can also offer its visitors specialty leasing subsidiary Galae. Cre-
special retail and cultural events and ated in 2001, Galae’s mission is to A strong commitment
activities. Consumers are looking for develop and operate the shared spaces to the environment
meaning; and what they want out of a in shopping centers, allowing brands Enhancing the value of shopping centers
shopping experience is more than just and retail tenants to advertise and com- also means adopting and enforcing an
a purchase. This is why today’s stores municate with mall patrons. An addi- active sustainable development policy.
are more dramatic in appearance, with tional source of revenue for the Group, The backbone of the Group’s commit-
scenery, product direction and a larger the Galae concept also enhances rela- ments in this area, the Klépierre
array of community-building events. A tionships with clients via the creation of 2010/2015 action plan set far-reaching
participant in this movement, Klépierre events (see close-up, page 27). objectives in 3 domains (environmental,
creates displays and events within its social and societal) related to sustainable
shopping centers. The Mr. Green con- The shopping center development. The encouraging results
cept is a perfect illustration of this trend. in the internet age posted for several years with respect
It was conducted throughout the winter Though online shopping is making great to energetic performance have been
of 2009/2010 in Denmark, when the inroads, the physical encounter between confirmed once again: the average water
United Nations Climate Change Confer- the client and the retailer, between the and electricity consumptions of the
ence was held in Copenhagen. Steen & consumer and the product, remains crit- Group’s shopping centers were respec-
Strøm Denmark, with the support of an ical. Far from posing a threat to the tively reduced by 6% and 12% between
artists’ collective, put on a spectacular future of the shopping center concept, 2009 and 2010. The Group already
series of happenings in all of its shop- the internet should, on the contrary, be ranks among the most advanced in its
ping centers, which were forcefully viewed as an opportunity, a means of industry in the area of resource conser-
relayed on internet. Monumental instal- communication that parallels the in-store vation, and is developing close ties
lations made out of recycled material offering. Retailers are becoming more with the extra-financial rating agencies
were also featured. Messages about adept at leveraging this mix, and so are and SRI (socially responsible invest-
serious issues of social concern were shopping centers. Most now have their ment) investors to ensure that its sus-
conveyed through the use of humor in own websites and dedicated pages on tainable development performances are

28 | Klépierre – 2010 Annual report

 Grand Ouest, écully, France

assessed in perfect transparent fashion. oped a program to encourage profes-

In addition, Klépierre has begun the pro- sional mobility.
cess of seeking environmental certifica- Last but not least, the Group pays par-
tion – BREEAM for centers under ticular attention to the issue of diversity:
development and ISO 14001 for centers non-discrimination on the basis of gen-
in operation. To date, more than fifteen der, promoting the integration of dis-
development projects already integrate abled workers, an agreement on the
the BREEAM method, which has
become the benchmark for commercial
employment of older workers, etc. In
parallel to these efforts, 2010 saw
USE® – UNIQUE
real estate. As for ISO 14001 certifica- significant development in the area of
SHOPPING EXPERIENCE
tion, it is one of the objectives the Group new information and reporting tools
Because a shopping center is not just
has for all of its centers. The Parque used by the entire Group, including the a financial asset or a piece of real estate,
Nascente center in Portugal and the Clipper information system. This trans- and because one of Klépierre’s strengths lies
La Gavia center in Madrid were certified formation, which will be completed in in its ability to offer innovative services and
in 2010. 2013, is already boosting employee unique ambiances, the Group has rolled out the
efficiency and hence productivity. USE® project (Unique Shopping Experience).
Teams striving for higher The objective is to define with precision and
performance by shopping center type, the set of facilities
and shared services that go into making
On a daily basis and across Europe, the
the client experience an easy and pleasant
1 500 employees of Klépierre invent,
consumer moment.
design, lease up, manage and animate In the first quarter of 2011, USE ® was set up
the shopping centers, using the exten- in the 5 regions where the Group operates,
sive knowhow they have acquired and 6 priority action themes were identified:
through long experience in the field. Hospitality, Exteriors, Mall, Restrooms,
To maintain and enrich this high level New Technologies and Retention.
of expertise, the Group has developed Within each region, one person will be
an ambitious training policy, which is named for each one of the priority themes,
and will be charged with identifying, sharing
organized around its corporate univer-
and adapting initiatives.
sity SégéCampus. To identify and
By capitalizing on the most exemplary
retain top talent, Klépierre conducts a practices, Klépierre hopes to offer a consis-
talent detection program that gives tently high level and high quality of customer
everyone the opportunity to evolve care at each of the 356 shopping centers it
within the Group. It has also devel- manages in Europe.

Klépierre – 2010 Annual report | 29

 Action
lever
no. 2

Develop
and refresh
the portfolio
Historically, Klépierre and its subsidiar- Aim for retail relevance
ies Ségécé and Steen & Strøm have Klépierre has a retail real estate invest-
always been developers or initiators, ment pipeline* worth 3.7 billion euros
as the current composition of the port- for the five years to come. This con-
folio attests. Many of its assets were siderable sum will allow the Group to
in fact created by the Group. The lat- remain among the key players in con-
est developments confirm this truth: tinental Europe. But the most impor-
La Gavia in Spain, Odysseum in Mont- tant consideration is qualitative in
pellier, the extensions-renovations in nature. The Group programs its shop-
Toulouse (Blagnac and Saint-Orens), ping center* extensions and creations
Gulskogen in Norway and Sollentuna in the regions that are the most pros-
in Sweden. Klépierre is able to invest perous and whose consumer basins
significantly in development due to the offer the most promising outlook for
strength of its people. Their know-how growth.
of the market, their skill and knowl- At year-end 2010, France and Scandi-
edge and the assessment methods navia combined accounted for nearly
they use ensure successful project 90% of committed or controlled devel-
outcomes. opment projects. All shopping center
The experience acquired over more design projects seek BREEAM or HQE®
than fifty years gives the Group a certification.
capacity for discernment and execution Because opportunities for attractive
that have become scarce in this mar- acquisitions are less numerous than
ket, which is short on landowner-build- they have been in the past, Klépierre is
ers. Klépierre is one of the only players also focusing on its program of asset
able to take a project from A to Z in extensions-renovations (41% of the
several European countries, from the pipeline), conducted on shopping cen-
identification of promising catchment ters located in high consumption areas
areas, negotiations with local public with proven retail appeal. This strategy
policymakers and retailers, construc- offers particularly solid access to attrac-
tion, shopping center launch and man- tive levels of profitability.
agement. Before initiating new The Group is more opportunistic when
development projects, Klépierre makes it comes to the acquisition of existing
sure that their profitability is in line with assets. It looks at assets that offer the
the risks assumed, in real estate, retail possibility of retail repositioning or even,
or urban planning terms. It also focuses in the short or medium term, extension
on pre-lease up, securing the presence capabilities.
of retailers that will make the difference. Rives d’Arcins, Bègles, France

30 | Klépierre – 2010 Annual report

 Bègles Rives d’Arcins:
facilitating the expansion
of a rapidly growing site
Since it first opened in retail park Les Arches foremost with the City
1995, the Rives d’Arcins de l’Estey, which covers of Bègles. For nearly
shopping center located 17 000 sq.m. GLA. All ten years, discussions
in Bègles (Gironde) green spaces are being on the evolution of the
has become a genuine reconditioned and the site have been conducted
shopping destination for liaisons for pedestrians in coordination with
the inhabitants of the and bicyclists being elected officials, the
Greater Bordeaux Area, created inside the site project architects and
attracting nearly 8 million are at an advanced stage. the city planning office.
visitors each year. This work was made In addition to infrastruc-
Retailers are also possible because tures, the City is also a
attracted to the shopping Klépierre gained control stakeholder in a number
center. They appreciate of the land surrounding of actions being carried
its interior architecture the initial site. By taking out at the center, such as
and prime location on advantage of opportuni- Aquaforum, a sustainable
the banks of the Garonne. ties to buy up neighbor- development educational
The reconfiguration ing lots, Klépierre was initiative. Rives d’Arcins
Optimizing allocation decisions program currently able to extend the retail is also taking part in a bid
Starting from the principle that the rota- underway is expected offering beyond the to boost local employment.
tion of assets offers leverage for value to result in a richer and original mall space,
creation, Klépierre pursued its asset totally remodeled facility reinforcing the appeal
in 2013, featuring 130 retail of Rives d’Arcins and From left to right:
disposal policy throughout 2010. Benoist Bitoune
shops spread over expanding its catchment
With its diversified portfolio of nearly Leasing Officer
52 800 sq.m. GLA*. In the area*. This transforma- Hervé ETCHENIQUE
300 shopping centers, the Group is
run-up to the extension of tion is also attributable Head of Expansion Western region
able to dispose of some assets without the mall, a first step was to the partnerships Frédéric BOTTONE
Development Director - Western region
compromising the industrial rationale of completed in June 2010 developed with local Jean-Jacques UZOLS
its project: the funds freed up through with the opening of the governments, first and Shopping Center Manager
asset sales can be reinvested in new
projects with better growth prospects.
In 2010, disposals represented 320 mil-

Extension
lion euros; over the same period the
Groupe invested 430 million euros.
Disposals involved both office and
shopping center assets, unlike invest-
ments, which were limited to retail
center properties.
The office property segment is a minor
component of Klépierre’s global real
estate portfolio, with extremely demand-
ing investment criteria and an exclusive
and determined focus on assets which
are located in Paris CBD and its inner
rim which are under development or
redevelopment, over shorter investment
periods than those which characterize
shopping centers.
The combined strength of its expertise
in these two segments is also an asset
for the major urban transformation proj-
ects that involve both retail and office
components.

Klépierre – 2010 Annual report | 31

 Action
lever
no. 3

Financial
management
that supports
the strategy
Good financial management means ment of the dividend. This offer was
ensuring that resources are always made in 2010.
available as well as optimizing their cost.
It is also a growth vector. Disciplined management
of financial risks
Conservative use of leverage Klépierre takes the risks inherent in debt
Thanks to its almost exclusive posi- financing very seriously.
tioning in the retail real estate sector, In terms of liquidity first of all, the Group
Klépierre can count on recurrent rev- seeks to diversify its sources of financ-
enues. Because of the specific profile ing among various markets (money and
of assets, Klépierre has articulated its bond markets, banking channels, etc.)
debt strategy around two major indica- and also varies its credit counterparties.
tors: the cash flow generated by oper- By spreading its debt due dates over
ations must be at least 2.5 times its several years around a reasonable aver-
interest expense, and net debt must age duration (five and a half years at
not exceed about 50% of the total year end 2010), and by ensuring that it
value of its holdings. To ensure that its maintains a significant undrawn amount
debt remains within these limits despite on its lines of credit (1.4 billion euros at
the growth of its holdings, Klépierre year end 2010), Klépierre is able to
finances its investments through free anticipate any difficulties that may arise
cash flow (cash generated by opera- in financing investments or renewing
tions after payment of the dividend it debts that fall due.
owes to shareholders) and asset sales In terms of the interest rate risk, the
as a matter of preference. Group uses derivative instruments that
Capital increases may be carried out as allow it to maintain at least 70% of its
circumstances warrant, particularly in debt in the form of fixed rate borrow-
Il Destriero, Vittuone, Italy the form of shares in lieu of cash pay- ings, which limits the risk of a higher

32 | Klépierre – 2010 Annual report

 A new and efficient
tool serving Group
financing needs
To ensure that it has fundraising in the bond scribed nearly threefold)
the means required markets by offering attests to the success
to access diversified greater flexibility in terms of the program.
sources of financing for of issuance, Klépierre The successful launch
its various projects, on was able to take advan- of this EMTN program
April 1, 2010 the Group tage of a window of also confirmed that real
set up an EMTN program. opportunity on April 7, estate companies like
This program provides 2010 and raise 900 million SIICs * do have access
a legal framework that euros of long-term debt to means of financing
gives the Group more under very competitive other than the traditional
rapid and less costly terms. While obtaining banking channels.
access to the market, credit remained a
capped at a threshold significant issue for
of 5 billion euros. businesses throughout
This initiative, which was 2010, especially those From left to right:
an immediate success, in the real estate sector, Caroline FINTZ
required close collabora- through this bond Head of Financial Resources
and Financial Communications
tion between the legal program Klépierre Samuel SAYAG
department and the was able to extend the Middle Officer Financing
cash management team. duration of its debt and and Treasury
Lenaig CHASSELOUP
Indeed, while the objec- boost liquidity, while also de CHATILLON
tive was to facilitate diversifying its sources Group Treasurer
of financing. The strong Guy de VILLENAUT
Head of Financing and Treasury
demand expressed Christelle THOMAS
cost of debt should short-term interest (the issue was oversub- Treasurer
rates rise.
To counter the currency risk, the financing
of Steen & Strøm assets in Scandinavian
currencies for each of the countries in
that region allows the Group to limit its
exposure to possible depreciation of
these currencies against the euro.
Thanks to this conservative and consis-
tent financing policy, the Group is able
to reinforce its capacity to generate
steady improvement in its financial indi-
cators, both short and long term.

For more information

on the financial policy and risk
management, see pages 96 and
following and 174 and following.

Klépierre – 2010 Annual report | 33

34 | Klépierre – 2010 Annual report
Business
page 36 page 52 page 54

Klépierre – 2010 Annual report | 35

36 | Klépierre – 2010 Annual report
The
strength of
a diversified
portfolio
From large regional shopping centers to hypermarket
malls, the retail business model of Klépierre is designed
to offer the best response to the needs of consumers,
whether it is in terms of choice, conviviality or con-
venience. Large retailers are also appreciative of this
diversity. In the 356 shopping centers managed,
of which 273 are owned by the Group, teams work
daily to improve the quality of hospitality and customer
care, ensure a varied retail mix and innovative services,
and develop displays, animations and community
service initiatives that reinforce both the center’s appeal
and its ties with the local population.

Klépierre – 2010 Annual report | 37

 France-Belgium
Arcades, Noisy-le-Grand, France Rives d’Arcins, Bègles, France Val d’Europe, Marne-la-Vallée, France

Before becoming the European player it group retailers Bershka and Pull & Bear Stronger positions
clearly is today, Klépierre established a have opened stores at L’Esplanade (Lou- Val d’Europe, which has just celebrated
dense network of roots inside the bor- vain-la-Neuve), and Zadig & Voltaire its tenth anniversary, will have left its
ders of France, its historical home. leased a space at Les Passages de mark in 2010, opening a new Castorama
Today, of the Group’s ten largest assets, l’Hôtel-de-Ville (Boulogne-Billancourt). store covering 9 000 sq.m. of sales area
which together account for more than The Italian cosmetic retailer Kiko has spread over 3 levels. The acquisition last
170 million euros of rent per year, six are chosen 2 of the Group’s emblematic June of the leasehold from Eurodisney
located in the France-Belgium region. shopping centers * for its début in SCA paves the way for new develop-
Klépierre obviously intends to remain, France: Val d’Europe and Le Millénaire, ments, and a number of projects are cur-
strongly anchored in this region, since the future facility in Aubervilliers rently under consideration, including the
50% of its development pipeline worth (April 2011). Les Arcades (Noisy-le- extension of the shopping center by
3.7 billion euros concerns assets or Grand) and Auchy les-Mines (Béthune) 21 000 sq.m., a move that would estab-
projects located here. With 104 centers presented a new and highly modern lish a new link with the city. In Bègles,
under ownership, representing 1.3 mil- architecture to consumers, along with an Rives d’Arcins has started a process
lion sq.m. GLA* and 126 centers under enhanced retail array. At Les sept Che- involving the redeployment and extension
management, France currently gener- mins (Vaulx-en-Velin), both volumes and of its retail footprint (see close-up). As for
ates 38% of the Group’s revenues. After façades were redesigned, creating Odysseum (Montpellier), its inaugural
a satisfactory performance in 2009, and space for designated rest areas and new year was an unmitigated success, with
despite the crisis, performance levels stores in the expanded mall area. With more than six million visitors. In addition,
were reached in 2010 with average this project, Klépierre has made a con- it got the 2010 Mapic Award for the best
relettings and renewals rental gains tribution to the city’s urban renewal and shopping center in Europe. On the
approaching 20%. development policy, which was first strength of this success, Klépierre and its
implemented a decade ago, in partner- partner Icade have just acquired owner-
A constantly enriched offer ship with the French government and ship of and management control over a
In order to meet consumer needs at all the Greater Lyon Area. This type of proj- five-hectare hub adjacent to the shop-
times, the shopping center is in a state ect, with high added value for consum- ping center, which features retail space,
of perpetual change. This is why the ers, retailers and the Group, will be restaurants and recreation. This brings
Group has learned to evolve its facilities, pursued in 2011. The future Créteil the total size of the retail complex to
both in terms of the retail mix and in Soleil, scheduled to open in the fall of more than 100 000 sq.m., making it one
terms of the physical space. In this 2011, includes an extension of the exist- of the largest in Europe.
respect, 2010 was a very eventful year. ing mall and a new Saturn store. In Brit-
On the retail mix side, Adidas Originals, tany, Rennes Colombia, which already Unique displays and events
Planet Jogging and G-Star all joined Val celebrated the opening of its new Fnac The exhibition entitled “Biodiversity, our
d’Europe this year, while Hema has been store in November of last year, will see lives are linked,” which was staged by
added to Place d’Armes (Valenciennes) its makeover completely finished in Klépierre and presented in more than
and Créteil Soleil (a Tally Weijl store has 2011, with the addition of new retail 30 of the Group’s French shopping cen-
also opened at Créteil Soleil). Inditex options and landscaped green spaces. ters in 2010, offers a perfect illustration

38 | Klépierre – 2010 Annual report

 Val d’Europe –
Marne-La-Vallée, France
On the cutting edge of
services and animations
Conviviality was part of strollers and wheelchairs the 10 th anniversary
the DNA of Val d’Europe on loan, shoe-shine and of the shopping center,
from its very inception: wifi spaces are just a few which has already been
its architects had in mind of the many examples. viewed by tens of
an image of Paris of Among the latest initia- thousands of people on
the nineteenth century, tives is a Zen space, the shopping center’s
teeming with life and featuring a massaging website or YouTube,
activity, combining glass armchair and a baby offers another illustration
and cast iron. While the break space for parents of this capacity for
general inspiration of the of very young children, innovation.
facility can be described with big chairs, micro- Other pluses in terms of
as “Eiffelian”, the visitor wave ovens and high ambiance: a pianist plays
actually traverses chairs. There is also daily between 3 pm and
4 different universes. squadron of hosts and 6 pm, filling the space
The ultimate aim is to hostesses, who tour with beautiful music, and
of the Group’s capacity to provide con- give visitors the impres- the shopping center there are many different
sumers with meaningful moments. sion they are actually on a SegwayTM, small workshops for children
walking down a city two-wheeled vehicles. offered each Wednesday
Another client expectation: dedicated ser-
street, with all of the Visitors don’t have to look and during school
vices and spaces. As part of the USE® advantages that natural for an information booth holidays.
(Unique Shopping Experience) program light, space and aesthet- if they have a question;
and to meet this need, the Group once ics offer, minus the they just have to hail a (1) A flash mob is a group of people
who meet in a public place to
again innovated this year, creating a full- disadvantage of being moving SegwayTM. Clients accomplish an action, which
fledged childcare center staffed by pro- exposed to the elements. appreciate all these little has been decided on in advance,
In addition to offering things. This service- under the eye of a camera.
fessionals. The 130 sq.m. space is Once the action is accomplished,
located at the Créteil Soleil center. And a this unique and privileged oriented policy, which the mob disperses rapidly.
family friendly space has been set aside setting, Val d’Europe has represents nearly 35%
always been a trailblazer of the operating budget
at Louvain-la-Neuve. In sync with the Total floor area:
in the area of services. for Val d’Europe, 98 397 sq.m. GLA
times, Val d’Europe put on a show, with Often a pioneer, often is reinforced through Footfall:
more than a hundred dancers on hand to copied, the center has multimedia communica- 18 million visitors per year
perform for its tenth anniversary. The rolled out a number tions campaigns and Composition:
135 units o/w
video of this flash mob (1), which was of free services designed a regular schedule of 1 Auchan hypermarket ,
1 Castorama store,
*
made on the day of the anniversary, has to pamper and win the events, with goodies 1 space dedicated
been viewed nearly 30 000 times on You- loyalty of its clientele: handed out to visitors at to household goods

Tube. And last but not least, the shopping valet service, newspapers key periods, like Mother’s Klépierre ownership:
55%
centers are getting increasing support available for browsing in Day. The flash mob (1) Gross rents, 2010:
the designated rest areas, organized to celebrate €21.0M
from new technologies: a very efficient
directory* has been specially created for
the Arcades center (Noisy-le-Grand), and
Val d’Europe will be equipped with a
website adapted for mobile devices, with
applications designed for smartphones
(iPhone and Android) in early 2011.

From left to right:

Manuel DOS SANTOS
Technical Support Manager
Sabine GRISET
Assistant
Bénédicte ROBIN
Assistant – Technical Support
Sonia BAYEUL
Head Marketing and Communications
Aurore GES
Communications and Marketing Officer
Christian CHARRE
Shopping Center Manager

Klépierre – 2010 Annual report | 39

 France – Development projects
From left to right:
Isabelle BARRET
Head of Leasing
Paul du HAYS
Project Manager
Denis ALALOUF
Director of New
Construction Projects
Virginie NAUDAN
Head of Legal –
Île-de-France region
Bernard CAROUGE
Head of Development –
Île-de-France region

A shopping center
at the gates of Paris
After Val d’Europe in 2000,
Le Millénaire will be the next major
Paris area shopping center* to see
the light of day, in April 2011. Located
in the business district of the same
name, it will ultimately extend over
more than 5 hectares. Located just
a few meters from the Paris ring road,
this retail space – with its unique
architecture – will offer a direct link
to the capital thanks to an extension
of the Paris métro and tram lines, and
additional bus lines in the network.

Develop… and design

A genuine beachhead for a vast urban
redevelopment program, Le Millénaire
is in this sense a precursor, and
emblematic of the objectives of the

CT
E

Saint-Lazare – Paris, France

PR O J

The future retail mall in the heart

of Paris goes into the final turn
In 2010, Klépierre signed the in Paris, this retail space, Total floor area:
first leases for occupancy located inside the station, will 10 000 sq.m. GLA *
Composition: 80 units,
of the future retail mall being serve as the connecting link including 3 mid-sized
built inside the Gare Saint- between the 3 levels of this stores
Lazare train station, with multimodal transport hub Tentative opening date:
Carrefour City, Virgin and (Paris métro/regional RER, 1st quarter 2012
Monoprix among the new platform and street), where Estimated cost price:
e150.0M
tenants. In addition to those 1.2 million people pass
3 anchor tenants, Klépierre through each day. Some *
Expected net initial yield :
8.0%
will set up a unique offer with 80 shops, located in the very
the many brands attracted heart of the busiest shopping
by this ideal location. Part of and business district of the
the broader metamorphosis French capital, will open for
of the oldest train station business in early 2012.

40 | Klépierre – 2010 Annual report

 Le Millénaire
– Aubervilliers-
Paris, France
Total floor area:
56 000 sq.m. GLA (stores)
17 000 sq.m. GLA (offices)
Composition:
140 units, of which 18 mid-sized
and 6 restaurants
Tentative opening date: April 2011
Estimated cost price: e190.9M
Expected net initial yield: 7.4%

CT

E
Claye-Souilly –

PR O J
Grand Paris project that seeks to in charge of working out lease terms
redefine and reshape the Greater with retail tenants.
Paris Area. Development teams have
been working with local government Dual environmental Île-de-France, France
authorities for more than ten years
on the task of designing this unique
certification
Surrounded by 12 000 sq.m. The metamorphosis
spot, located in a neighborhood
which will ultimately play host to
of green spaces, the center – which
is located on the banks of the Canal
of the center
12 to 14 million visitors a year,
creating 2 000 jobs. Land that has
Saint-Denis – is aiming for HQE®
(Haute Qualité Environnementale)
into a retail hub
been used for industrial purposes for
more than a century is being totally
certification, for the 17 000 sq.m.
of office space as well as for the retail
with regional
remodeled. segment. It is also seeking BREEAM
certification.
appeal
Providing future clients The performances of this architec- In the second half of boasts a dynamic
with a unique and tural complex will be exceptional, 2010, Klépierre launched catchment area of more
differentiating retail mix from energy consumption to acous- the programmed than 600 000 inhabitants
extension-renovation and welcomes nearly
Like the London Docklands, tics, not to mention lighting and
of the Claye-Souilly 9 million visitors each
Le Millénaire is a whole new neigh- waste management.
shopping center. year. In just two years,
borhood and the first shopping In its expanded form, clients will be able
center of regional scale that is directly Including neighborhood the center will feature to choose from among
linked to the Paris ring road. The youth in the project some fifty new retailers 130 retailers in a fully
team responsible for the lease-up A founding member of the organiza- operating out of an reinvented facility: a
is focused on optimizing the mix tion 100 Chances 100 Jobs, additional 15 000 sq.m. new façade, new interior
between retail anchors and novelties. Klépierre has set up an ambitious by the fall of 2012. architecture, a new
Thanks to the work accomplished program for promoting the employ- Located in north Seine- identity, new signage,
et-Marne, the center a new retail mix on offer.
with the Group’s Italian, Spanish and ment of young people from the
Portuguese entities, 6 new retailers Aubervilliers/Saint-Denis area in
will be coming to France for the first connection with the Millénaire
time, including Kiko (cosmetics, Italy), project. Applicants will be screened
and Decimas and Polinesia (sports- by the local employment agency
wear, Spain). In addition, retailers that and given the opportunity to discover
do not have a strong shopping center job opportunities, after which some
presence, such as Boulanger and will embark on a process that
Toys R Us, have confirmed their will lead to a fixed-term contract,
arrival. an open-ended one, or additional
Other retailers on the cutting edge training. Other avenues are being Total floor area: an additional
of trends, such as Hema, Guess, explored to ensure access for 15 000 sq.m. GLA for the extension
Composition: 50 additional stores,
NewYorker, Desigual and Confo- the disabled.
*
including 9 mid-sized units and 8 restaurants
DÉCO will round out the facility’s Tentative opening date: 4rh quarter 2014
retail mix. To ensure retail success, Estimated cost price on 12/31/2010: e94.9M
the lease-up teams are working Expected net initial yield: 7.3%
hand in hand with the legal teams

Klépierre – 2010 Annual report | 41

 Scandinavia
Field’s, Copenhague, Denmark Gulskogen, Drammen, Norway Sollentuna Centrum, Sollentuna, Sweden

Present in Scandinavia since Octo- where it is located. This region has code, and won the Red Dot Design Award
ber 2008, when it acquired control of nearly 4 million inhabitants and gener- for 2010 in the process. Also in Sweden,
Steen & Strøm, Klépierre today has a ates a quarter of the cumulative GDP of the Hageby center (Norrköping) got a
portfolio in this region composed of Sweden and Denmark. complete makeover, and inaugurated
29 shopping centers, and manages In October 2010, the center launched its its new assets last April. The newly
15 others. new shopping universe dedicated to revamped center now includes both
Scandinavia is currently the Group’s sec- youth fashion, organized around an orig- The Body Shop and G-Star. The dedi-
ond most important market, accounting inal animated street concept. New cated light rail station, which opened
for more than 20% of consolidated shops include Gina Tricot, Noa Noa, in October, makes Hageby the most
rents. This percentage will no doubt Jack & Jones and Vero Moda, among conveniently located shopping center in
increase in the years ahead, since close others, all located near the extended the region.
to 40% of the Group’s projected invest- H&M store. Also in Denmark, the Bryg- Gulskogen, in Norway, also got a totally
ments in the next five years will be gen center (Viejle) opened a Burger King new look. Since November 2010, visi-
devoted to this region, where demo- outlet and an H&M store last September. tors are treated to 50 000 sq.m. with
graphic growth trends suggest that Retail tenant sales revenue for the fourth surprising façades and 60 new family-
between now and 2030, the population quarter of 2010 was up by 20% com- oriented retailers, including Gina Tricot,
of the major metropolitan areas will climb pared with the fourth quarter of 2009. Home & Cottage and Noa Noa.
by up to +19.7%, particularly in the
Greater Oslo Area (1). For the year ended Sweden and Norway: a total Marketing and hospitality:
December 31, 2010, the performances rethink of shopping centers Scandinavia, land of innovation
of the Scandinavian portfolio once again The Sollentuna shopping center * in The Steen & Strøm Media Partner plat-
attested to the strength of the region’s Stockholm inaugurated its Market Place form, which operates throughout the
economies, particularly Norway, where last March, putting the final touch on its Scandinavian region, is a major marketing
the Group has the highest number of renovation. The project entailed creating innovation that has received peer recog-
centers. Retail tenants at its 17 shopping four malls, each one featuring a differ- nition. It won the ICSC Solal Award in the
centers generated a 0.9% increase entiated universe in terms of color additional revenues category. This
in sales revenue, while rents rose by codes, design and retail mix. The goal platform allows retailers/advertisers to
2.4%, both on a constant portfolio* and of the project was to create Sweden’s sponsor commercial animations or adver-
exchange rate basis. first design oriented shopping center, tising spots and also establish partner-
and it has already been well received ships, on a scale from 1 to 44 centers,
A year of firsts in Denmark by consumers, retailers and the media. which encompasses all of the sites in the
The third largest center in terms of rents In fact, Sollentuna was one of the portfolio managed by Steen & Strøm. A
under Group ownership, historically 2 shopping centers in the region that telling example of what this platform has
developed by Steen & Strøm and made it to the finals for an ICSC Euro- to offer is the campaign carried out in
opened in 2004, Field’s in Copenhagen pean Shopping Centre Award in 2011. May 2010 in 16 Norwegian centers timed
was partially restructured in 2010, to Sollentuna has also changed its logo, to coincide with the release of the film
support growth in the region of Øresund, which now features a multi-color bar Sex & the City 2. Mall frequency was

42 | Klépierre – 2010 Annual report

 Bruun’s GALLERI –
ÅRHUS, DENMARK
A downtown
shopping center
Ideally located in the heart neighborhood, featuring entirely around the work
of downtown Århus trendy shops and cin- of the American street
(Denmark’s second largest emas, the center has photographer Vivian Maier,
metropolitan center), the cultivated a casual and which was extended
Bruun’s Galleri shopping stylish image. There is a to include the entire city.
center, which opened “Bruun’s attitude”, a true The artist’s photos served
in 2003, rapidly became brand image that makes as the basis of the mes-
the areas’ prime meet-up the shopping center itself sages and, cleverly
spot, both for locals and the main attraction. Even blended with visuals
for the numerous tourists the events put on by its from the spring-summer
who visit this region. More teams are innovative and collections, comprised
than 11 million visitors cutting edge, and they the core of the campaign.
stopped by in 2010. Its often extend beyond the In the fall, Bruun’s
convenient downtown confines of the center, launched its rebels
location makes Bruun’s spilling onto the city in Århus, in particular via
substantially boosted as a result (+10%). easy to get to, and 50% streets and further a number of happenings
Fully aware of its responsibility to society, of its visitors choose to reinforcing the strong in the streets and inside
do so on foot or by connection that already the shopping center. The
Steen & Strøm now offers tactile signage
bicycle. One of three exists between Bruun’s idea was to highlight the
in all of its malls in Sweden for sight visitors uses public and its catchment area. role of those who break
impaired visitors. This initiative also transportation, including This optimal integration the habitual codes in the
seeks to raise public awareness of the the trains that service the into the lives of the city’s fields of art and fashion.
need to facilitate life for the disabled. main station, directly inhabitants is reinforced These and other initiatives
And Steen & Strøm also launched the linked to the center. On by the original and differentiate Bruun’s, making
Good Choice Campaign. The aim of this average, clients visit the hard-hitting communica- it a unique, creative and
major effort is to raise consumer aware- center twice tions campaigns that cutting edge place.
ness through communications activities a week, while strolling Århus has delivered.
Total floor area:
downtown or on their way Two carried out in 2010 36 675 sq.m. GLA *
and actions so that they become more
to or from work, a statistic – focused on fashion – Footfall:
responsible consumers and choose that reflects the center’s are particularly illustrative. 11 million visitors per year
products that are respectful of the envi- ease of access. A genuine In the spring, the center Composition:
100 units
ronment. At the same time, the subsid- neighborhood within the ran one campaign created Klépierre’s ownership:
iary created and rolled out a training 56.1%
Gross rents, 2010:
program devoted to sustainable devel- E13.8M
opment that includes an innovative
e-learning module with knowledge
tests at the end and prizes for partici-
pants. All employees took part in the in-
house version, and 5 000 Scandinavian
tenants opted for the public version,
earning a Good Choice Expert diploma
in the process.
(1) Source: Eurostat, Regional EUROPOP 2008,
January 2010.

From left to right:

Anders BOJER NIELSEN
Marketing Coordinator
Ulrik PETERSEN
Shopping Center Manager
Pernille LYAGER LAURSEN
Marketing Coordinator

Klépierre – 2010 Annual report | 43

 Scandinavia – Development projects

First pre-lease up
phase is a success
In July 2010, the Group gave
the green light for the launch of the
Emporia shopping center* in Malmö.
It is expected to open its doors
in late 2012. The go-ahead was given
because the project met the Group’s
requirements in terms of pre-lease up,
success and profitability. Recently,
teams have stepped up the pace of
lease-up, and almost 64% of all space
had found tenants by year-end 2010.
Emporia’s retailers will include H&M,
Willys, Jack & Jones and Vero Moda
(Bestseller group retailers), Lindex,
Desigual and others. Negotiations
are ongoing with other global retailers.

Located in Scandinavia’s
From left to right:
most dynamic region
Jonatan CARLING Emporia is located in southeast
Development Manager Malmö, in the heart of Øresund
Erik LIDSTRÖM
Project Manager (4 million inhabitants, income levels
Anders Malmgren higher than the OECD average)
Leasing Officer
Cindy Jonsson
and just next to the bridge that links
Marketing Officer

Scandinavia, land of many

developments in the years to come
When it acquired Steen & Strøm, Klépierre did not only become the owner of assets in operation and
the expertise of its teams; it also acquired a number of projects that have enhanced its development
pipeline* considerably. At the end of 2010, the Group’s committed projects* and controlled projects*
in the region represented nearly 40% of its global development potential leading up to 2015. To
exploit this source of value creation over the medium term, the teams at Steen & Strøm are working
hard upstream on project launches like the one accomplished for Emporia. In this case, they were
able to secure land rights, construction costs and commercial aspects to ensure future success
of the project. In parallel to the construction of new retail hubs, Steen & Strøm has for several
years been conducting a vast program of extensions and renovations in Sweden and in Norway on
existing centers, similar to what Klépierre has been pursuing in France or in Italy. These large-scale
projects are tied to the broader urban renewal issues on which the Group has been working in close
collaboration with local policymakers.

44 | Klépierre – 2010 Annual report

 Denmark and Sweden. The bridge region – and the other turquoise, of the consumer profile. The credo
is used by 37 million travelers each suggesting the Baltic Sea, its plant of the management team is:
year. With an extremely dense primary forest spiralling over 3 levels, the client should see Emporia
catchment area*, the center is ideally its open air garden on the roof and as the natural choice and say
linked to road and rail infrastructures. its 3 shopping universes, Emporia “why go anywhere else?”
A new ring road will have a special is sure to be an architectural event,
(1) Source: Eurostat, Regional EUROPOP 2008,
exit for the shopping center; and a a place for relaxation and fun where January 2010.
suburban train station just 50 meters the visitor can be freed from all
away links Emporia to downtown the constraints of daily life.
Malmö in 7 minutes and to downtown
Copenhagen in 25 minutes. The An innovative and customized
backbone of a vast urban develop- marketing approach
ment project (8 000 residential units In this 78 000 sq.m. GLA* space,
and offices) designed to support the clients will find more than 220 shops
strong demographic growth expected and restaurants, running the gamut
in the next twenty years (+15.9% for from major international appliance
the area surrounding Malmö), Emporia retailers to personal products to
is a shopping center with international smaller shops with unusual brands.
stature that will include high value To create a truly unique shopping EMPORIA –
added non-retail facilities (international experience and find the best balance MALMÖ, SWEDEN
convention center, sports arena, in terms of retail mix, the marketing Total floor area:
concert venue, etc.). team has segmented its approach, 78 000 sq.m. GLA
Composition:
not by product lines but by type of 220 shops and restaurants
Europe’s most spectacular mall visitor. The center will also offer Tentative opening date:
future shopping center a complete array of upscale services Fall 2012
The amount invested in this retail intended to make life easier for Estimated cost price:
E300.4M
complex, more than 300 million euros, clients: car wash, personal shoppers, Expected net initial yield:
makes it the largest project that Steen coat closets, home delivery, rest 7.4%
& Strøm has ever undertaken in areas, etc. From the simplest to Klépierre ownership:
56.1%
Europe. With its 2 enormous entries, the most sophisticated, every
one amber colored – symbol of the demand can be satisfied, regardless

ct
e

ÅSANE – BERGEN, NORWAY

pr o j

The creation of a downtown

dedicated to shopping
The vast project to a parking lot. The project catchment area (the
restructure the Åsane involves bringing population is expected to
shopping center is one of them together to form grow by almost 25% by
the controlled projects in a genuine downtown 2030). Ultimately, Åsane will
the Group’s development area devoted to shopping. cover nearly 100 000 sq.m.
pipeline in Scandinavia. Benefiting already from GLA and feature close
Located in North Bergen a choice location (the to 180 stores and restau-
(Norway’s second largest best access to downtown rants over 57 000 sq.m.,
metropolitan area with Bergen in terms of traffic), 25 000 sq.m. of office
close to 400 000 inhabit- with highway access and space, spaces dedicated
ants), the current facility a dense mass transit to culture and housing Total floor area: 100 000 sq.m. GLA
is made up of 2 shopping network, the center lies (17 000 sq.m.). Composition: 180 shops and restaurants, residential and tertiary areas
centers separated by in the heart of a dynamic Tentative opening date: 2016

Klépierre – 2010 Annual report | 45

 Italy-Greece
Pescara Nord, Città Sant’ Angelo, Italy La Romanina, Roma, Italy Il Destriero, Vittuone, Italy

In Italy since 1999 and in Greece since gurated 5 stores, in Brianza, Metropoli, Le Rondinelle (Brescia), one of the most
2000, Klépierre today has 40 centers in Milanofiori, Pescara Nord and La active centers in this area, allowed
the region comprising these 2 countries Romanina. The Inditex group’s Bershka Capucine missionaries to present their
(35 of them in Italy) and manages a total concept opened a store at Il Leone di mission and solicit the generosity of mall
of 50 facilities. More than 70% of these Lonato, while awaiting the opening of a visitors, and also sponsored the Brescia
holdings are concentrated in Northern Stradivarius at Pescara Nord in Febru- marathon again and conducted a fund
Italy – in Lombardy, Piedmont Venetia ary 2011. And the Group consolidated drive on behalf of an Italian association
and Emilia-Romagna. These 4 regions, its Italian partnership with Cache Cache created to fight leukemia. Patrons of La
which together account for nearly 40% (1 new store), Sergent Major and Zeta Romanina (Rome) were given the
of Italy’s GDP and whose per capita (3 new stores for both). opportunity to adopt a tree, while those
income is around 20% higher than the of Pescara Nord got fun lessons in recy-
national average, showed great resil- Reinforcing regional anchorage cling through a program baptized the
ience in 2010. In fact, despite generally On December 1, 2010, the Pescara Metamorphosis of Objects, which was
weak macroeconomic indicators, the Nord shopping center unveiled its new conducted during the extension-reno-
retailers in Northern Italy managed to face, after undergoing a major exten- vation of the center. Its key target was
raise their sales revenue by 6.6% last sion-renovation. A leading center in the young consumers.
year, while rents generated by this region Central Italian region of Abruzzo, located
rose 3.1% on a like-for-like basis. in the heart of a catchment area* of
more than 400 000 inhabitants, Pescara
New retail flourish Nord now covers almost 34 000 sq.m.
In 2010, a number of new retailers Its extension-restructuring work added
joined the Group’s shopping centers in 30 additional retail units to the complex
Italy as existing partnerships were as well as another 150 parking slots.
beefed up. Kiabi decided to locate one Designated rest areas were also cre-
of its very first stores in the La Romanina ated, as well as a play area for children.
shopping center, and it is scheduled to Visitor traffic management and care
open in the spring of 2011. In Febru- facilities were also improved. In addition
ary 2010, shoe retailer Deichmann pur- to adding new retail anchors, this proj-
sued its development with a new store ect enhanced the existing retail mix, in
in the Rossini center, while Kiko – a particular the personal products offer-
major name in cosmetics in Italy – inau- ing, and strengthened the center’s
appeal.

Solidarity marketing in Italy

Humanitarian aid and solidarity were
front and center* in 2010 at Italian
shopping centers owned by the Group.

46 | Klépierre – 2010 Annual report

 .2 that’s the increase in
retail sales revenue
for the Group’s tenants
in the region for 2010

Il Leone di Lonato, Lonato, Italy Il Destriero, Vittuone, Italy Milanofiori, Milan, Italy

Milanofiori – ASSAGO-MILAN, ITALY

Milan’s must shopping hub

Ideally located south plus Camicissima (shirts). both OVS industry and the creation of numerous Total floor area:
of Milan, just 30 minutes The Inditex group is Conbipel decided to roll residential units and
47 524 sq.m. GLA *
Composition:
away from its downtown, a major presence, with out new concepts here. offices. A subway station 96 units
Milanofiori cultivates its retail stores that include The retail mix is ideally will be inaugurated in Footfall:
6 million visitors per year
appeal by optimizing the Zara, Zara Home, topped up with interna- 2011, making the center
Klépierre ownership:
retail mix year after year, Bershka, Pull & Bear tional brands that include even easier to asset to 83%
and especially since it and Oysho. The shopping Pimkie, Promod, from downtown Milan. Gross rents, 2010:
was acquired by Klépierre center also features Cache Cache, Camaieu, Other mid-sized stores u11.3M
(2004) and expanded in Cisalfa, Italy’s largest Du Pareil au Même, and a multiplex cinema
2005. Today, it has close sportswear chain and Un Jour Ailleurs and round out the broad array
to 100 stores and gets Saturn. Clearly, Milano- Sephora. The urban area of choice offered to
a substantial boost from fiori is a shopping center where Milanofiori is the 1.3 million people
the presence of one on the cutting edge located is undergoing who live in the catchment
Carrefour hypermarket*. of breaking trends: rapid expansion, with area.
To conserve the full
potential of the retail
offering and continue
to attract the citizens of
Milan, the center strives
to constantly but reason-
ably renew its retail
mix tenants. In 2010,
7 changes in tenancy
were completed, adding From left to right:
several big names in Andrea Pallaro
Shopping Center Manager
retail to the mix, including
Andrea Anzalone
scent specialist Limoni Head of Valorization
(600 points of sale Department
Monica Di Mola
in Italy), Triumph, Rental Officer
Intimissimi (lingerie) Giammarco Maddau
and Kiko (cosmetics), Valorization Department
Orazio D’Amore
Technical Coordinator
North East region

Klépierre – 2010 Annual report | 47

 Iberia
La Gavia, Vallecas, Spain Dama asturies, Asturies, Spain Aqua Portimão, Portimão, Portugal

Present on the Iberian peninsula since uled for the second quarter of 2011, Sustainable development:
2000 (Spain) and 2003 (Portugal), Klépierre involves the Aqua Portimão center in Iberia is pioneer
has become a major player in this mar- Portugal, which will host the first H&M Thanks to the sustained efforts and
ket in just a few short years, where it and Primark stores in Algarve, reinforc- commitment of its employees in the area
now has 104 shopping centers* under ing business in this region. of environmental respect, Ségécé
management, including 76 for its own España and the La Gavia center were
account. Something fun for everyone awarded ISO 14001 certification. This
While Iberia remains one of the regions From September 1 to November 20, success demonstrates the extent to
the hardest hit by the economic crisis, 2010, the Puerta de Alicante center con- which sustainable development has
retail activity was fairly resilient last year, ducted a slow shopping campaign via become a major challenge for staff. The
and rents were virtually unchanged the social networks Facebook and Twit- Environmental Management System
(-0.5%) on a constant portfolio basis in ter. The movement promotes shopping (EMS) of Ségécé España has shown
Spain. The success of La Gavia, the as a privileged moment for strolling in the its value and will gradually be rolled out
largest shopping center servicing universe of fashion, art and design. For for use by all assets located on the
Madrid, which in 2010 attracted close the occasion, the shopping center cre- Peninsula. More one-off but just as
to 11 million visitors, was confirmed ated a Facebook page. By the end of effective was the project implemented at
once again. Revenues from this region 2010, it had more than 1 800 fans. La Gavia in collaboration with FUNDECC
are driven by the performance of malls At Los Prados, a Miss & Mister Asturies (the Foundation for Spanish Shopping
attached to hypermarkets*, a format beauty pageant was held in the shop- Centers). Baptized “Proyectos solidarios
that continues to show a greater ability ping center. Sponsored by a modeling con los nuestros”, the aim of the project
to resist than the regional centers* and agency, the pageant was supported by was to raise money for the Norte Joven
that constitutes the mainstay of the shopping center tenants, who supplied association, which works to promote the
Klépierre portfolio in Iberia. runway costumes for the contestants, social integration of young people from
Against an economic backdrop that is while the center’s hair and makeup disadvantaged backgrounds or those at
said to be still fragile, several retailers salons also offered their services. The risk. Last but not least, during the annual
nonetheless showed confidence, includ- crowd for this event was impressive. Ségécé España seminar, teams came to
ing Deichmann, which opened a store at And at Augusta, children were treated the aid of the Apadrina un Árbol Founda-
Augusta, while Pandora and Ardene to a show that features some of their tion, planting more than 1 000 trees.
opened stores at La Gavia. The retailer favorite cartoon heroes, like Dora the
Worten chose the Los Llanos shopping Explorer and Sponge Bob. In addition,
center for the opening of its first outlet in the shopping center hosted a kids’
Albacete, covering more than 3 000 sq.m. fashion show for the thirteenth year in a
of floor area. The next opening, sched- row. More than 700 children took part,
with the center’s childrenswear outlets
supplying their fall-winter collections.

48 | Klépierre – 2010 Annual report

 million
that’s the number of shoppers
who visited La Gavia in 2010

Meridiano, Santa Cruz de Tenerife, Spain La Gavia, Vallecas, Spain Parque Nascente, Gondomar, Portugal

La Gavia – VALLECAS-MADRID, Spain

A UNIQUE OFFER ON A KEY SPOT
Inaugurated two years cally located, at the In addition to IKEA and Some twenty French Total floor area:
ago, at the height of crossroads of 2 very busy Carrefour, the center has brands are also present,
94 285 sq.m. GLA *
Footfall:
the crisis, the La Gavia freeways and offering been able to attract a high including Fnac, Celio, 11 million visitors per year
shopping center in direct access from number of mid-sized units Orange and Franck Composition:
Greater Madrid was downtown via the bus that offer Spanish Provost. The Italian chain 176 units, including
1 Carrefour
nonetheless a huge or the subway. Second, consumers – who were Kiko decided to open hypermarket
and 1 Ikea store
success when it opened it has a simple and highly particularly hard hit by one of its first stores
Klépierre ownership:
and has remained one functional fan shape. the crisis – great value for in Spain at La Gavia, 100%
ever since. Ideally located Third, its retail mix is both money. One such exam- as did the Portuguese Gross rents, 2010:
just 11 kilometers from unique and complete. ple is Primark, an Irish home deco store A Loja u14.9M
downtown Madrid, this As the advertising slogan chain. And all the classic do Gato Preto. This mix is
multi-level hub offers suggests, everyone can retailers are present as enhanced by a food court
110 000 sq.m. of shop- find what he or she is well, from Zara to H&M. measuring 6 000 sq.m.,
ping, with 176 retail looking for here. The In addition to this tradi- 10 movie theaters with
outlets and 2 anchors: result is a subtle balance tional offering, the Group 3D capability, 1 recreation
1 IKEA store and that, in the end, has won has also succeeded in space for young people
1 Carrefour hypermarket. over footfall and retailers attracting more novel and 5 000 parking slots.
There are 3 major reasons alike. The retail mix at retailers, thanks to All of these assets make
for the appeal that La Gavia is, in fact, unique the synergies between La Gavia a genuine
La Gavia has in the eyes in a number of ways. its global teams. shopping destination.
of local inhabitants.
First of all, it is strategi-

From left to right:

Muriel Dechaume
International Deputy
Commercial Director
Esteban HEREDERO LOPEZ
Commercial Director – Spain
Carlos REVUELTA CALDERON
Shopping Center Manager

Klépierre – 2010 Annual report | 49

 Central Europe
Nový Smichóv, Prague, Czech Republic Poznan Plaza, Poznan, Poland Lublin Plaza, Lublin, Poland

Klépierre took its first steps in Central shopping center successfully con- citizens get safely across the street, etc.
Europe back in 2003. Today, it owns a ducted a lease renewal campaign, and, as a result, attracted widespread
total of 23 shopping centers in this adding 12 new retail stores, including online and offline media coverage –
geographic region (12 in Hungary, 7 in Tatuum, L´Occitane, Promod, Ross- garnering more than 100 mentions in
Poland, 3 in the Czech Republic and mann, Mother-care & ELC and Paris just two weeks. Corvin also made a
1 in Slovakia). In general, these assets Optique. The same program and the big splash with the television singing
benefit from the presence of one hyper- same outcome were observed at contest X Factor, which mostly takes
market* or 1 supermarket, which serves Poznan Plaza, where 11 new retailers place inside the shopping center, work-
as an additional draw to the site. were added, including Puma, Home & ing in partnership with the mall’s five
Today, this region accounts for 8.5% of You, Sunset Suits and Six. And H&M biggest names in fashion retailing. This
the Group’s consolidated rents, with opened 3 new stores in Hungary, one move has given the shopping center*
Poland holding a preponderant position each in Miskolc, Szeged and Duna. In an extraordinary level of visibility and
within the portfolio (42% of total rents addition, the Novodvorska Plaza shop- has also spurred activity on its Facebook
from the region). The economic reality is ping center in the Czech Republic page, which already boasts almost
quite different from one Central Euro- added a new Datart electronic home 11 000 fans after only two months of
pean country to the next, as reflected in appliance store covering more than existence. This statistic provides a good
the mixed performance levels observed. 1 500 sq.m., which boosted the number yardstick for measuring the impact of the
For example, the situation has been of visitors to the site. But the highlight activities rolled out. On the nationwide
particularly difficult in Hungary (3% of the year for the region was surely the level, Hungarian shopping centers have
of Group rents), while the impact of inauguration of Corvin in the heart of continued to contribute to the Santa
the slowdown in private consumption Budapest, in Hungary (see opposite Claus Factory project, which brings
has been limited for Poland where, on page), which on opening day attracted a little bit of holiday magic to disadvan-
a constant portfolio basis * , rents close to 60 000 visitors. The center taged children. This initiative received
remained stable on a like-for-like hopes to achieve 30 000 visitors daily. a Silver Award in the general public
basis. The economic outlook for the interest cause category during the
years ahead suggests, however, that Innovative marketing initiatives ICSC (1) Solal Marketing Awards. In the
this region can be a growth driver for Throughout the region, novel marketing Czech Republic, the Nový Smíchov
the Group. initiatives have also been rolled out shopping center launched an advertis-
to boost business. One such initiative ing campaign based on coupons,
Still upbeat is the Corvin Guys, which originally accepted in 130 of the shopping cen-
In Poland, several retailers did not hesi­ involved showcasing the service policy ter’s 160 stores. As for Plzen Plaza, its
tate to open new store locations in of this new center as embodied in the focus is on music, with 2 free concerts
2010, attesting to their confidence in teams of young people trained in hospi- performed in May and June of last year,
the economic outlook. The Sadyba tality and the Corvin concept. In the end, each attracting around 4 000 spectators.
the Corvin Guys became genuine mas- (1) International Council of Shopping Centers.
cots in Budapest, sheltering people from
the rain with umbrellas, helping senior

50 | Klépierre – 2010 Annual report

 800 000
that’s the average number
of monthly visitors
to Corvin since it opened
in October 2010

Corvin, Budapest, Hungary Nový Smíchov, Prague, Czech Republic Duna Plaza, Budapest, Hungary

Corvin – BUDAPEST, HUNGARY

A lively spot in the middle of a historic district
The Corvin shopping can grow vegetables and adults assimilate. As an this past winter – all open Total floor area:
center, which was inaugu- aromatic herbs. In connec- extension of this engage- to the public and free of
33 350 sq.m. GLA *
Footfall (estimated):
rated in October 2010, tion with the project, ment, the shopping center charge. Last but not least, 10 million visitors
is part of a vast urban a botany course will also plans to host events for the European Traveling per year
Composition:
renewal project in a be given for primary school children conducted by Show to Promote the 127 units, including
Budapest neighborhood children. The second the park staff. In addition, Employment of Young 1 hypermarket CBA
loaded with history. project concerns the a cooperative venture People chose Corvin as Klépierre ownership:
100%
In addition to perfecting rehabilitation of the famed with the theater of the its venue for the Budapest
the retail mix, local teams Orzyc Park, which is 8 th district will lead to the leg of its journey, planned
worked hard to create an already a familiar sight for performance of mini-plays for 2011. Major employers
authentic and lively spot the citizens of Budapest, inside the shopping center and recruiters from across
where the denizens of through a joint action every Saturday. A place for Europe will be participat-
Budapest rapidly found program involving City Hall sharing and discovering, ing. Much more than just
their marks. To underline and the shopping center. Corvin also has a broad a shopping center, Corvin
its seamless integration This initiative will also give array of leisure activities has rapidly established
with the city’s transporta- area residents the chance for its visitors to choose a name for itself as a
tion infrastructures to take part in a collective, from: tai chi lessons, preferred meeting point
(subway, bus, tramway, inter-generational effort exhibitions featuring and passageway for
roadway, etc.), the Group whose aim is to help the work of young artists, Budapest’s inhabitants.
wanted to ensure that adolescents and young a skating rink installation
Corvin was embedded
in its social and societal
environment. So Klépierre
has gotten involved in
several large-scale From left to right:
neighborhood projects. Zsolt KERTAI
Development
The first, which arose Officer-Hungary
from a strong partnership Eva NAGY
Shopping Center Manager
between the shopping
Alex DOUAIHY
center teams and the Business Development
nearby Prater school, Director – International
Development Department
consists of setting up and
maintaining a vegetable
garden on the terrace of
the shopping center, where
the kids from the school

Klépierre – 2010 Annual report | 51

52 | Klépierre – 2010 Annual report
Klémurs confirms
that its model
is robust
Chalon Sud 2, Chalon-sur-Saône, France Buffalo Grill, France Sephora, Metz, France

Via its subsidiary Klémurs, Klépierre invests in the highly special- In 2010, Klémurs disposed of 2 assets. In June, it sold retail
ized field of real estate outsourcing by major retailers. The Group storefront space located in the city of Rouen for 11 million euros
has an 84.1% equity interest in this SIIC*, whose shares have and, in November, it sold a retail property located on rue de
been traded since 2006 in the C compartment of Euronext Flandre (Paris 19th) for 25 million euros.
ParisTM. Klémurs has positioned itself as a partner of choice The investment criteria used by Klémurs are demanding, and
for France’s major retailers (Défi Mode-Vivarte, Buffalo Grill, are focused exclusively on retail properties, a segment where
King Jouet, etc.), becoming the owner of their real estate holdings opportunities are few and far between. Nonetheless, Klémurs
as well as the day-to-day manager. By entrusting this business to remains attentive to all new investment opportunities.
Klémurs, these retailers can refocus their managerial and financial
resources on their core business.
In addition, they get the benefit of the expertise of the Klépierre
Group, which can offer support for their development projects.
Klémurs’ holdings – mostly semi-urban individual retail properties
or retail parks – have an appraised value of 596.7 million euros
excluding transfer duties.

2010 was fully satisfactory for Klémurs, with rents up

by 2.4%, reaching 43.8 million euros. This performance was
boosted by the contribution from investments made in 2009, i.e.,
the acquisition of 26 additional stores in connection with the
pursuit of the Défi Mode-Vivarte agreement, and the September 1, For more information
2009 opening of the retail park Chalon Sud 2. But it also demon- consult the Klémurs’
strates that Klémurs’ performance is both steady and robust: registration document,
the financial occupancy rate was 99.7% in 2010 and the late available on Klémurs’ website
payment rate on rents was practically nil (0.1%). www.klemurs.fr.

Klépierre – 2010 Annual report | 53

54 | Klépierre – 2010 Annual report
Additional
value
creation
Séreinis, Issy-les-Moulineaux, France 21, avenue Kléber, Paris, France Camille Desmoulins, Issy-les-Moulineaux, France

One of the Group’s historical segments, office properties today With the expertise it has accumulated over the years
account for 4% of Klépierre’s holdings. The portfolio is made in the Paris office market, Klépierre remains a savvy investor,
up of prime properties, all located in the heart of Paris CBD and in 2011 is focusing its search for investment opportunities
or in its Western inner rim. Their total floor area is 85 873 sq.m., on the development of new buildings that meet its requirements
and they are occupied by prestigious tenants, mostly large French in architectural, location and profitability terms. This is particularly
or foreign corporations and government administrative offices. important because, as the example of Le Millénaire in Aubervilliers
Deliberately limited in size, this portfolio is constructed and demonstrates, when it comes to large-scale urban restructuring
maintained opportunistically, a strategy that seeks to capitalize projects, Klépierre’s dual competency, as an investor in both
on the cyclical nature of the real estate market. Investments shopping centers and offices, can be a source of opportunity.
in office properties are only committed if the returns on investment As announced in late 2010 by the Group and its partner Icade,
are higher than those required for retail real estate investments. nearly 12 000 sq.m. of office space was taken up on Le Millénaire
As for the proceeds of these sales, they are naturally reinvested site by tenant Direccte (Regional Office for Businesses,
in retail properties. This is why the Group wishes to stay in this Competition, Consumption, Work and Employment). This
market while also pursuing its program of targeted disposals pre-lease up underscores the commercial success of this site
in 2011. and sends a strong signal to the market.

In 2010, Klépierre was successful in capitalizing on the

good conditions in the investment market; the disposals

85  8 73
completed by the Group were preceded by extensive work

sq.m.
intended to enhance the value of these assets, with lease
renegotiations aimed at ensuring the long-term occupancy
and profitability of these assets. Disposals completed in 2010,
for a total amount of 214.6 million euros, include the building
at 11/11 bis place du Général-Leclerc, in Levallois-Perret,
the building at 23/25 rue Marignan/36 rue Marbeuf (Paris 8th), of office space
and the building at 5 boulevard Diderot (Paris 12th).
in Paris and its outlying suburbs

Klépierre – 2010 Annual report | 55

56 | Klépierre – 2010 Annual report
Properties
Klépierre – 2010 Annual report | 57
 Shopping centers properties, as of December 31, 2010

e 14.0Bn e 831.7M
(92.5% of the value
of the portfolio (1)) in rents
(91.2% of consolidated rents)

10 largest assets: e3.2 Bn (1) 10 largest tenants

(gross rents in millions of euros, total share) (% of total rents)
Créteil Soleil (Paris, France) 31.3 H&M 2.0%
Val d’Europe (Paris, France) 21.6 ZARA 1.1%
Field’s (Copenhagen, Denmark) 19.1 CAMAIEU 1.0%
Blagnac (Toulouse, France) 16.0 FNAC 1.0%
Arcades (Paris, France) 15.8 SEPHORA 0.8%
La Gavia (Madrid, Spain) 14.9 MCDONALD’S 0.8%
Bruun’s Galleri (Århus, Denmark) 13.8 CELIO 0.8%
L’esplanade (Louvain-la-Neuve, Belgium) 13.6 ALAIN AFFLELOU 0.7%
Nový Smíchov (Prague, Czech Republic) 12.6 C&A 0.6%
Milanofiori (Milan, Italy) 11.3 Media World 0.5%
(1) Appraised value (excluding duties, total share).

breakdown by retail segment

(% of rents)

Restaurants/Food
17%
Entertainment
1%

Personal products
32%
Services
4%
Household goods
12%

Culture/Gifts/Leisure
19%

Beauty/Health
15%

58 | Klépierre – 2010 Annual report

France-Belgium Louvain-la-Neuve

Noisy-le-Grand
104 centers – 1 276 189 sq.m. rentable floor area* Marne-la-Vallée
Créteil
€6.4Bn (42.6% of the value of the portfolio (1))
€356.7M (39.1% of consolidated rents)
98.9% financial occupancy rate*

Toulouse

Top 5 assets
1 2 3 4 5

Créteil Soleil Val d’Europe Blagnac Arcades L’esplanade

Créteil, France Marne-la-Vallée, France Toulouse, France Noisy-le-Grand, France Louvain-la-Neuve, Belgium

City, center Dpt Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest

France
Alsace
Illzach (Mulhouse), Île Napoléon 68 1978 R/E 1999 2001 Carrefour, 60 units 31 852 10 440 100.0% 83%
Strasbourg, La Vigie 67 1990 R 1996 1990 Conforama, 6 units 16 215 16 215 100.0% 37.50%
Aquitaine
Bègles, Rives d’Arcins 33 1995 2010 1996 Carrefour, 79 units 54 706 34 001 100.0% 52%
Bègles, Rives d’Arcins, Les Arches 33 2010 12 units 15 013 95.4% 52%
de l’Estey
Bordeaux, Saint-Christoly 33 1985 R 1999/2004 1995 Monoprix, 29 units 10 765 8 668 91.1% 100%
Libourne, Verdet 33 1973 2001 Carrefour, 43 units 20 945 2 648 100.0% 83%
Lormont, Rive Droite 33 1973 R 1997 2002 Carrefour, 95 units 29 851 1 799 100.0% 83%
Auvergne
Clermont-Ferrand, Jaude 63 1980 R 1990 1990 Fnac, 70 units 24 400 19 962 100.0% 100%
E/R 2008
Moulins 03 1978 2001 Carrefour, 20 units 16 615 1 516 100.0% 83%
Lower Normandy
Condé-sur-Sarthe (Alençon) 61 1972 R 1999 2001 Carrefour, 30 units 15 301 3 918 95.7% 83%
Hérouville, Saint-Clair 14 1976 R/E 1995 2001 Carrefour, 80 units 40 469 11 837 96.1% 83%
Upper Normandy
Guichainville (Évreux) 27 1970 2001 Carrefour, 17 units 20 900 1 956 100.0% 83%
Le Havre, Espace Coty 76 1999 2000 Monoprix, 81 units 27 000 18 163 98.4% 50%
Burgundy
Beaune, Saint-Jacques 21 1975 2003 Carrefour, 23 units 10 000 3 722 100.0% 83%
Marzy (Nevers) 58 1969 R 1999 2001 Carrefour, 38 units 24 172 9 926 100.0% 83%
Quétigny (Dijon), Grand Quétigny 21 1968 E 1992 2001 Carrefour, 66 units 46 568 12 772 100.0% 83%
R/E 2005

(1) Appraised value (excluding duties, total share).

Klépierre – 2010 Annual report | 59

 City, center Dpt Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest
Brittany
Brest, Iroise 29 1969 R/E 2007 2001 Carrefour, 45 units 33 256 10 925 100.0% 83%
Guingamp 22 1974 2001 Carrefour, 10 units 11 836 1 532 100.0% 83%
Lorient, K2 56 1981 2001 Carrefour, 26 units 19 840 4 557 97.7% 83%
Paimpol 22 1978 2001 Carrefour, 8 units 10 349 1 580 100.0% 83%
Quimper, Kerdrezec 29 1978 2002 Carrefour, 41 units 23 710 7 770 100.0% 83%
Rennes, Colombia 35 1986 2005 Monoprix, Fnac, 19 716 18 792 90.4% 100%
72 units
Langueux (Saint-Brieuc) 22 1973 R/E 1998 2001 Carrefour, 31 units 24 128 6 007 100.0% 83%
Vannes, Le Fourchêne 64 1969 2002 Carrefour, 56 units 26 000 17 173 100.0% 83%
Center
Bourges 18 1969 2001 Carrefour, 19 units 21 834 1 660 100.0% 83%
Chartres, La Madeleine 28 1967 2001 Carrefour, 15 units 22 239 7 053 100.0% 83%
Châteauroux 36 1995 2001 Carrefour, 20 units 18 901 3 473 76.7% 83%
Saran (Orléans), Cap Saran 45 1971 R/E 2007 2001 Carrefour, 50 units 26 600 9 420 100.0% 83%
Champagne-Ardenne
Cernay (Reims) 51 1981 2001 Carrefour, 27 units 18 120 3 132 95.5% 83%
Charleville-Mézières, La Croisette 08 1985 2001 Carrefour, 20 units 14 325 2 467 100.0% 83%
Saint-André-les-Vergers (Troyes) 10 1975 2001 Carrefour, 28 units 13 000 890 100.0% 83%
Tinqueux (Reims), Mont-Saint-Pierre 51 1969 2004 Carrefour, 22 units 29 000 6 049 100.0% 83%
Île-de-France
Athis-Mons 91 1971 R 1999 2001 Carrefour, 23 units 26 498 3 677 100.0% 83%
Boissénart, Maisonément 77 2008 2008 Retail park*, 45 units 42 000 38 691 94.6% 50%
Boulogne-Billancourt, 92 2001 2001 Inno, 61 units 19 198 23 223 100.0% 50%
Les Passages de l’Hôtel-de-Ville
Champs-sur-Marne 77 1981 2001 Carrefour, 16 units 14 748 1 765 100.0% 83%
Claye-Souilly 77 1992 2001 Carrefour, 75 units 48 152 20 226 98.8% 83%
Créteil, Créteil Soleil 1 94 1974 R/E 2000 1991 Carrefour, 232 units 125 500 92 665 90.8% 80%
Drancy, Avenir 93 1995 2008 Carrefour, 53 units 27 386 11 339 100.0% 100%
Flins-sur-Seine 78 1973 2001 Carrefour, 72 units 41 191 1 656 100.0% 83%
Marne-la-Vallée – Serris, 77 2000 E 2003 2000 Auchan, 145 units 89 290 72 834 99.3% 55%
Val d’Europe 2 E 2009
Melun, Boissénart 77 1977 R 1996 1995 Auchan, 52 units 34 500 11 885 94.6% 100%
E 2005
Montesson 78 1973 R/E 1985/ 2001 Carrefour, 54 units 40 276 10 715 100.0% 83%
1999/2005
Noisy-le-Grand, Arcades 4 93 1978 R 1992 1995 Carrefour, 157 units 63 000 40 689 98.5% 53.6%
E 2009
Pontault-Combault 77 1993 R/E 1993 2001 Carrefour, 70 units 53 563 30 912 100.0% 83%
Rambouillet, Bel Air 78 1976 R/E 2007 2001 Carrefour, 56 units 27 000 10 515 100.0% 83%
Sartrouville, Le Plateau 78 1976 E 1999 2001 Carrefour, 28 units 25 274 5 552 97.6% 83%
Sevran, Beau Sevran 93 1973 2003 Carrefour, 96 units 43 809 26 111 92.3% 83%
Stains 93 1972 2001 Carrefour, 23 units 20 120 1 931 100.0% 83%
Villejuif, Villejuif 7 94 1980 R/E 2008 2001 Carrefour, 30 units 13 871 3 078 100.0% 83%
Villiers-en-Bière 77 1990 R 2005 2001 Carrefour, 86 units 65 849 30 150 99.9% 83%
Languedoc-Roussillon
Lattes, Grand Sud 34 1986 R/E 1993 2002 Carrefour, 68 units 37 650 14 355 100.0% 83%
Montpellier, Saint-Jean-de-Védas 34 1986 2001 Carrefour, 28 units 16 240 2 358 100.0% 83%
Nîmes, Nîmes Étoile 30 1981 R 1997 2001 Carrefour, 46 units 22 300 4 843 97.7% 83%
E 2009
Nîmes Sud, Portes de Camargue 30 1980 2002 Carrefour, 18 units 19 655 1 791 97.7% 83%
Perpignan, Claira 66 1983 R/E 1997 2002 Carrefour, 27 units 24 985 2 834 100.0% 83%
Montpellier, Odysseum 34 2009 2009 Géant Casino, 96 units 50 000 12 234 99.6% 50%

60 | Klépierre – 2010 Annual report

City, center Dpt Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest
Lorraine
Épinal, Jeuxey 88 1983 2001 Carrefour, 16 units 12 417 1 917 100.0% 83%
Midi-Pyrénées
Portet-sur-Garonne, Grand Portet 31 1972 R/E 1990 2001 Carrefour, 107 units 60 600 24 666 99.7% 83%
Toulouse, Blagnac 3 31 1993 E 2009 2004 Leclerc, 120 units 48 017 48 017 100.0% 53.6%
Toulouse, Purpan 31 1991 2006 Carrefour, 42 units 23 600 7 683 100.0% 83%
Toulouse, Saint-Orens 31 1991 R/E 2008 2004 Leclerc, 110 units 58 100 37 538 97.6% 53.6%
Nord Pas-de-Calais
Aire-sur-la-Lys, Val de Lys 62 1977 2001 Carrefour, 20 units 11 000 2 362 100.0% 83%
Auchy-les-Mines, Porte de Flandres 62 1993 2001 Carrefour, 18 units 11 650 1 350 95.1% 83%
Aulnoy-lez-Valenciennes, 59 1972 2001 Carrefour, 27 units 20 456 5 268 99.3% 83%
La Briquette
Calais, Mivoix 62 1973 2001 Carrefour, 23 units 17 576 4 311 93.3% 83%
Denain, Jean Bart 59 1979 2003 Carrefour, 21 units 13 006 387 61.5% 83%
Fourmies 59 1985 2001 Carrefour, 16 units 11 000 1 841 100.0% 83%
Hazebrouck 59 1983 2001 Carrefour, 16 units 8 799 1 295 96.0% 83%
Lomme 59 1984 R 2009 2001 Carrefour, 36 units 30 204 6 540 95.1% 83%
Saint-Martin-au-Laërt 62 1991 2001 Carrefour, 12 units 8 452 943 68.3% 83%
Valenciennes, Place d’Armes 59 2006 2006 Match, 57 units 16 200 15 792 99.9% 100%
Provence - Alpes - Côte d’Azur
Aix-les-Milles, La Pioline 13 1971 R 1997 2001 Carrefour, 30 units 32 617 4 756 87.2% 83%
Antibes 06 1973 2001 Carrefour, 33 units 29 880 4 160 100.0% 83%
Châteauneuf-les-Martigues 13 1973 2001 Carrefour, 20 units 21 165 12 665 99.2% 83%
Marseille, Bourse 13 1977 R 1991/ 1990 Galeries Lafayette, 29 245 17 307 98.8% 50%
R 1997 55 units
Marseille, Le Merlan 13 1976 R 2006 2003 Carrefour, 57 units 32 330 7 959 97.4% 100%
Nice, Lingostière 06 1978 R 1998 2001 Carrefour, 49 units 35 000 7 639 100.0% 83%
Orange 84 1986 R 1996 2001 Carrefour, 36 units 18 086 3 983 100.0% 83%
Trans-en-Provence (Draguignan) 83 1970 R 1993 2001 Carrefour, 29 units 15 330 3 684 100.0% 83%
Vitrolles, Grand Vitrolles 13 1970 R 2007 2001 Carrefour, 79 units 61 111 24 273 100.0% 83%
Pays de la Loire
Angers, Saint-Serge 49 1969 E 2006 2001 Carrefour, 28 units 21 800 5 153 100.0% 83%
Cholet 49 1970 2001 Carrefour, 29 units 12 225 4 656 100.0% 83%
La Roche-sur-Yon 85 1973 2001 Carrefour, 16 units 13 000 476 55.6% 83%
La Roche-sur-Yon, Sud Avenue 85 2008 2008 Retail park, 35 units 24 000 13 083 74.0% 100%
Nantes, La Beaujoire 44 1972 2001 Carrefour, 35 units 28 662 3 653 100.0% 83%
Nantes, Saint-Herblain 44 1969 2001 Carrefour, 6 units 15 067 644 96.0% 83%
Picardy
Amiens 80 1973 2001 Carrefour, 21 units 20 434 3 258 100.0% 83%
Angoulins 17 1973 2002 Carrefour, 35 units 23 679 4 088 100.0% 83%
Château-Thierry 02 1972 2001 Carrefour, 21 units 11 102 644 92.6% 83%
Laon, Espace Romanette 02 1990 R/E 2008 2001 Carrefour, 35 units 16 920 4 779 100.0% 83%
Venette (Compiègne) 60 1974 2001 Carrefour, 34 units 28 476 5 105 100.0% 83%
Poitou-Charentes
Angoulême, Galerie Champ-de-Mars 16 2007 2007 Monoprix, 40 units 16 122 16 122 98.4% 100%

Klépierre – 2010 Annual report | 61

 City, center Dpt Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest
Rhône-Alpes
Annecy, Courier 74 2001 2001 Monoprix, 38 units 19 393 13 524 99.9% 58%
Bassens (Chambéry) 73 1969 E 1996 2001 Carrefour, 20 units 19 749 2 633 100.0% 83%
Bourg-en-Bresse, Site de Brou 01 1977 2003 Carrefour, 34 units 17 000 2 232 40.9% 83%
Échirolles (Grenoble) 38 1969 2001 Carrefour, 118 units 58 945 4 706 100.0% 83%
Écully, Grand Ouest 69 1972 R/E 1997 2001 Carrefour, 88 units 46 078 13 373 100.0% 83%
Givors, 2 Vallées 69 1976 R 1997 2001 Carrefour, 37 units 32 528 40 278 100.0% 83%
Meylan (Grenoble) 38 1972 2001 Carrefour, 12 units 19 751 1 602 100.0% 83%
Saint-Égrève (Grenoble) 38 1986 R 2006 2001 Carrefour, 27 units 19 260 4 504 100.0% 83%
Valence, Victor Hugo 26 1994 2007 Fnac, 38 units 12 674 10 431 100.0% 100%
Vaulx-en-Velin, Les Sept Chemins 69 1988 E 2009 2001 Carrefour, 45 units 36 000 6 038 100.0% 83%
Vénissieux 69 1966 R/E 2000- 2002 Carrefour, 24 units 35 913 3 145 100.0% 83%
2002

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Belgium
Brabant wallon
Louvain-la-Neuve, L’esplanade 5 2005 2005 Delhaize, Cinescope, 55 987 55 987 99.6% 100%
132 units

Region Dpt Center Composition Gross Rentable Financial Klépierre

leasable floor occupancy equity
area area rate interest
Miscellaneous assets
Aquitaine 33 Mérignac Darty, Flunch, McDonald’s 7 591 7 591 100.0% 83%
Brittany 56 Vannes Le Fourchêne Pac 2 Fnac, Darty 5 511 5 511 100.0% 83%
Brittany 56 Vannes Nouvelle Coutume Mim, Pimkie 1 325 1 325 100.0% 83%
Franche-Comté 25 Besançon Monoprix 4 604 4 604 100.0% 100%
Île-de-France 95 Osny (Cergy) Osny Nord shopping center* 11 956 2 791 100.0% 37%
Languedoc-Roussillon 11 Carcassonne Salvaza shopping center 15 642 3 279 100.0% 37%
Mc Donald’s 1 662 1 662 100.0% 37%
Languedoc-Roussillon 34 Montpellier Pizza Pino 565 565 100.0% 50%
Languedoc-Roussillon 34 Sète Balaruc (Montpellier) Carrefour shopping center 16 620 3 418 100.0% 38%
Picardy 60 Creil (Beauvais) Cora shopping center 40 000 4 066 100.0% 90%
Boxes (Forum Rebecca) 7 490 7 490 100.0% 70%
Rhônes-Alpes 01 Beynost (Lyon) Beynost shopping center 18 500 2 882 100.0% 15%
Seine-Maritime 76 Dieppe Belvédère shopping center 35 500 5 729 100.0% 24%
76 Tourville-la-Rivière (Rouen) Carrefour shopping center 27 480 7 761 100.0% 51.5%

62 | Klépierre – 2010 Annual report

Scandinavia
29 centers – 870 686 sq.m. rentable floor area*
€3.4Bn (22.4% of the value of the portfolio (1))
€183.8M (20.1% of consolidated rents) Tønsberg

95.8% financial occupancy rate*

Århus Copenhagen

Top 3 assets
1 2 3

Field’s Bruun’s Galleri Farmandstredet

Copenhague, Denmark Århus, Denmark Tønsberg, Norway

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest

Norway
Ås, Vinterbro Senter 1996 1999 2008 Coop, Bohus, Elkjop, 37 064 34 073 99.9% 56.1%
G Sport, 78 units
Bergen, Åsane Storsenter 1985/ 2007, 2009 2008 H&M, Meny, Clas 55 881 46 233 98.3% 28.0%
1976 Ohlson, KappAhl,
132 units
Drammen, Gulskogen Senter 1985 1986, 2000, 2008 Meny, H&M, Cubus, Clas 51 119 38 119 100.0% 56.1%
2008, 2009, Ohlson, G Sport, Lefdal,
2010 XXL, Torshov Bilrekv.,
Match, Home& Cottage,
KappAhl, Lindex, Kiwi,
105 units
Fredrikstad, Torvbyen 1988 1995, 2009 2008 Clas Ohlson, Cubus, 19 092 14 306 97.9% 56.1%
KappAhl, Lindex,
50 units
Halden, Halden Storsenter 1998 2008 ICA, Posten, Cubus, 14 207 9 192 95.6% 56.1%
Lindex, G Sport,
30 units
Hamar, Hamar Storsenter 1933 1987, 1988, 2008 ICA, H&M, Go Sport, 24 632 20 732 100.0% 56.1%
1992, 2000, Clas Ohlson, Cubus,
2006 69 units
Haugesund, Amanda 1997 2008 H&M, KappAhl, Lindex, 22 612 14 500 99.9% 56.1%
Cubus, 63 units
Haugesund, Markedet 1988 1995 2008 H&M, Cubus, Vinmono- 17 006 10 712 94.1% 56.1%
polet, 26 units
Larvik, Nordbyen 1991 1995, 1997, 2008 Meny, H&M, KappAhl, 20 089 16 137 99.3% 56.1%
2007, 2009 Cubus, Clas Ohlson,
52 units
Lørenskog, Metro Senter 1988 2007, 2008, 2008 Coop, Ica, G Sport, 65 382 50 957 91.5% 28.1%
2009 Cubus, Møbelringen,
SATS, 105 units
Mosjøen, Sjøsiden 1994 1998 2008 Posten, Lindex, Cubus, 11 460 7 783 98.0% 56.1%
28 units
Oslo, Økernsenteret 1969 2008 Bertel O. Steen, Expert, 56 417 37 857 88.1% 28.1%
Kiwi, Posten, 30 units
Oslo, Stovner Senter 1975 1998 2008 Ultra Stovner, H&M, 51 005 36 382 99.1% 56.1%
Rimi, Posten, 105 units

(1) Appraised value (excluding duties, total share).

Klépierre – 2010 Annual report | 63

 City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest
Skedsmo, Lillestrøm Torv 1985 1997, 2006 2008 H&M, Cubus, ICA, 36 424 21 071 97.0% 56.1%
78 units
Stavanger, Stavanger Storsenter 1993 2005, 2010 2008 H&M, Cubus, Lindex, 27 592 23 171 96.2% 56.1%
KappAhl, 57 units
Tønsberg, Farmandstredet 3 1997 2002, 2006, 2008 H&M, Meny, Clas 54 375 34 848 96.6% 56.1%
2008 Ohlson, KappAhl,
113 units
Tromsø, Nerstranda 1998 2008 H&M, KappAhl, 15 637 11 460 100.0% 56.1%
Notabene, 45 units

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Sweden
Åstorp, Familia 2006 2008 H&M, Gina Tricot, 19 669 15 711 92.0% 56.1%
Lindex, Cassels,
Intersport, 55 units
Borlänge, Kupolen 1989 1995, 2005 2008 Jula, ICA, H&M, Gina 52 277 35 405 94.3% 56.1%
Tricot, Lindex, Ahlens,
Stadium, KappAhl,
84 units
Karlstad, Mitt i City 2006 2008 Clas Ohlson, Gina Tricot, 20 082 15 796 97.2% 56.1%
Intersport, Konsum,
51 units
Norrköping, Hageby 1966 2000, 2010 2008 ICA, Willys, H&M, 27 378 20 080 75.3% 56.1%
Lindex, Systembolaget,
78 units
Örebro, Marieberg 1991 2009 2008 Clas Ohlson, Intersport, 44 307 32 712 98.1% 56.1%
Gina Tricot, Lindex,
H&M, Jula, 102 units
Partille, Allum 2006 2008 ICA, H&M, Gina Tricot, 61 705 51 660 98.6% 56.1%
Lindex, Clas Ohlson,
Systembolaget, Åhléns,
Willys, Intersport,
Stadium, 113 units
Sollentuna, Sollentuna Centrum 1975 1993, 1999, 2008 ICA, Lindex, Gina Tricot, 105 000 88 600 98.1% 56.1%
2010 H&M, Systembolaget,
126 units
Trollhâttan, Etage 2004 2008 Harald Nyborg, Expert, 20 996 16 544 92.4% 56.1%
Intersport, Cervera,
39 units
Uddevalla, Torp 1991 1998, 2000, 2008 H&M, Gina Tricot, 37 435 31 578 95.7% 56.1%
2001 Lindex, Intersport,
Stadium, Jula, Ica,
Systembolaget,
72 units

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Denmark
Århus, Bruun’s Galleri 2 2003 2008 Kvikly, Cinemaxx, 36 675 33 638 95.9% 56.1%
H&M, Stadium, Bahne,
100 units
Copenhague, Field’s 1 2004 2008 Bilka, Magasin, H&M, 91 342 79 839 89.2% 56.1%
Elgiganten, Fitnessdk
152 units
Viejle, Bryggen 2008 2008 Kvikly, Inspiration, 25 613 21 590 80.8% 56.1%
Intersport, Matas
Bestseller, 75 units

64 | Klépierre – 2010 Annual report

 Milan
Italy-Greece
40 centers – 404 421 sq.m. rentable floor area*
Roma
€1.7Bn (11.4% of the value of the portfolio (1))
€118.3M (13.0% of consolidated rents)
98.5% financial occupancy rate*

Top 3 assets
1 2 3

Milanofiori La Romanina Metropoli

Milan, Italy Roma, Italy Milan, Italy

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest

Italy
Abruzzo
Citta à Sant’ Angelo, Pescara Nord 1995 R/E 2010 2002 IPER, 74 units 34 125 20 110 100.0% 83%
Colonnella (Teramo), Val Vibrata 2000 R/E 2007 2002 IPER, 55 units 29 123 15 789 99.6% 71.3%
Basilicata
Matera 1999 2003 Ipercoop, 7 units 10 093 1 637 93.9% 100%
Campania
Capodrise (Caserta), I Giardini Del Sole 1992 2002 Carrefour, 25 units 18 997 6 327 72.1% 83%
Émilia-Romagna
Savignano s. Rubicone (Rimini), 1992 2002 IPER, 57 units 30 774 13 097 99.4% 71.3%
Romagna Center
Latium
Roma, La Romanina 2 1992 R/E 2009 2002 Carrefour, 101 units 32 078 19 469 92.5% 83%
Roma, Tor Vergata 2004 2005 Carrefour, 64 units 25 740 11 659 97.5% 100%
Lombardie
Assago (Milan), Milanofiori 1 2004 E 2005 2005 Carrefour, 96 units 47 524 24 910 99.6% 100%
Bergamo, Brembate 1977 R 2002 2002 IPER, 17 units 11 054 2 084 100.0% 71.3%
Bergamo, Seriate, Alle Valli 1990 R/E 2001 2002 IPER, 52 units 33 106 10 865 100.0% 71.3%
& 2008
Côme, Grandate 1999 2002 IPER, 15 units 13 732 2 310 100.0% 71.3%
Cremona (Gadesco), Cremona Due 1985 2002 IPER, 59 units 19 458 6 340 99.5% 71.3%
Gran Giussano (Milan) 1997 E 2006 2002 Carrefour, 46 units 19 087 8 208 100.0% 83%
Lonato, Il Leone di Lonato 2007 2008 IPER, 111 units 45 959 30 207 100.0% 50%
Novate Milanese, Metropoli 3 1999 1999 Ipercoop, 80 units 30 606 16 603 100.0% 85%
Paderno Dugnano (Milan), Brianza 1975 R/E 1995 2002 Carrefour 66 units 36 129 15 315 98.4% 83%
R 2006
Pavie, Montebello della Battaglia, 1974 E 2005 2002 IPER, 58 units 33 353 16 802 100.0% 71.3%
Montebello
Roncadelle (Brescia), Le Rondinelle 1996 1998 Auchan, 78 units 36 880 13 727 100.0% 85%
Settimo Milanese, Settimo 1995 2003 1999 Coop, 29 units 9 461 9 459 100.0% 85%
Solbiate Olona, Le Betulle 2002 R 2006 2005 Iper, 22 units 17 390 4 257 100.0% 100%

(1) Appraised value (excluding duties, total share).

Klépierre – 2010 Annual report | 65

 City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest
Varese, Belforte 1988 E 2006 2002 IPER, 37 units 24 840 8 290 100.0% 71.3%
Vignate (Milan), Acquario center 2002 2003 Ipercoop, 55 units 35 918 20 057 99.0% 85%
Vittuone, Il Destriero 2009 2009 IPER, 55 units 32 500 15 682 100.0% 50%
Marches
Pesaro, Rossini Center 2000 R 2008 2002 IPER, 36 units 19 807 8 600 97.8% 71.3%
Piedmont
Burolo (Turin) 1995 2002 Carrefour, 13 units 10 581 968 100.0% 83%
Collegno (Turin), La Certosa 2003 2003 Carrefour, 37 units 19 982 6 187 94.5% 100%
Moncalieri (Turin) 1998 R/E 2000 R 2002 Carrefour, 29 units 11 290 7 293 98.4% 83%
2009
Montecucco (Turin) 1989 2002 Carrefour, 11 units 9 670 1 122 100.0% 83%
Serravalle Scrivia, Serravalle 2003 2004 IPER, 29 units 20 977 8 047 94.1% 100%
Vercelli 1987 2002 Carrefour, 21 units 12 526 1 747 99.0% 83%
Apulia
Bari, Viale Pasteur 1997 E 2002/E 2003 Ipercoop, 24 units 18 562 4 881 82.5% 100%
2007-2008
Lecce, Cavallino 2001 2005 Conad Leclerc, 17 396 5 806 98.9% 100%
27 units
Tussany
Massa Carrara, Mare e Monti 1995 R 2007 2002 Carrefour, 40 units 17 467 7 246 100.0% 83%
Venezia
Thiene (Vicenza) 1993 2002 Carrefour, 36 units 20 930 5 691 95.7% 83%
Verona, Le Corti Venete 2006 2008 IPER, 69 units 31 218 16 349 99.0% 50%

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Greece
Athens, Athinon 2002 2003 Carrefour, Sprider, 13 600 1 588 46.5% 83%
8 units
Larissa 1994 E 2002 2007 Carrefour, Ster Century 26 714 13 129 85.4% 100%
cinema, bowling,
27 units
Patras 2002 2003 Carrefour, Kotsovolos, 16 790 8 040 100.0% 83%
Intersport 25 units
Thessalonica, Efkarpia 1995 2003 Carrefour, 14 units 12 212 802 100.0% 83%
Thessalonica, Makedonia 2000 R 2005 2001 Carrefour, Ster Century 26 772 13 722 97.2% 83%
cinema, bowling,
36 units

66 | Klépierre – 2010 Annual report

Iberia

76 centers – 418 956 sq.m. rentable floor area* Gondomar

€1.3Bn (8.9% of the value of the portfolio (1))
€95.0M (10.4% of consolidated rents) Madrid
92.7% financial occupancy rate*

Santa Cruz de Tenerife

Top 3 assets
1 2 3

La Gavia Meridiano Parque Nascente

Madrid, Spain Santa Cruz de Tenerife, Spain Gondomar, Portugal

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest

Spain
Andalousia
Almería 1987 2000 Carrefour, 28 units 8 483 990 90.7% 83%
Cordoue, Córdoba-Zahira 1977 2000 Carrefour, 17 units 11 804 944 76.4% 83%
Grenade 1990 2000 Carrefour, 31 units 12 315 2 024 96.9% 83%
Huelva 1985 2000 Carrefour, 21 units 12 992 1 602 100.0% 83%
Jerez de la Frontera-Cádiz, Jerez Norte 1997 2000 Carrefour, 46 units 16 958 6 950 97.4% 83%
Jerez de la Frontera-Cádiz, Jerez Sur 1989 2000 Carrefour, 34 units 14 744 3 330 88.8% 83%
La Línea de la Concepción, 1991 R/E 2007 2000 Carrefour, Inditex, 29 477 7 457 79.8% 83%
(Gibraltar North)-Cádiz, Gran Sur 58 units
Los Barrios (Gibraltar Ouest)-Cádiz, 1980 2000 Carrefour, 30 units 11 406 1 748 97.5% 83%
Algeciras I
Lucena 2002 2003 Carrefour, 17 units 6 980 784 82.7% 83%
Málaga, Los Patios 1975 R 2004 2000 Carrefour, 57 units 19 547 4 350 76.6% 83%
Málaga, Málaga I-Alameda 1987 2000 Carrefour, 37 units 18 541 7 550 97.7% 83%
Séville, Sevilla I-San Pablo 1979 2000 Carrefour, 34 units 13 062 2 404 98.1% 83%
Séville, Sevilla II-San Juan de Aznalfarache 1985 2001 Carrefour, 46 units 17 931 4 223 88.2% 83%
Séville, Sevilla III-Macarena 1992 2000 Carrefour, 30 units 11 393 1 883 78.9% 83%
Séville, Sevilla IV-Dos Hermanas 1993 2000 Carrefour, 22 units 10 320 1 465 100.0% 83%
Séville, Sevilla V-Montequinto 1999 2003 Carrefour, 18 units 7 387 879 96.9% 83%
Aragon
Saragosse, Actur 1990 2000 Carrefour, 31 units 18 273 5 085 91.8% 83%
Saragosse, Augusta 1995 2000 Carrefour, 119 units, 62 447 24 330 92.4% 83%
Aki, Kiabi, PC City
Asturias
Lugones, Azabache 1977 2003 Carrefour, 36 units 15 750 4 304 95.4% 83%
Oviedo, Los Prados 2002 2003 Carrefour, 88 units, 35 627 24 699 81.4% 83%
Saturn, Yelmo Cineplex
Balearic
Palma de Mallorca, General Riera 1977 2000 Carrefour, 25 units 9 358 592 97.9% 83%

(1) Appraised value (excluding duties, total share).

Klépierre – 2010 Annual report | 67

 City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest
Canary
Santa Cruz de Tenerife, Meridiano 2 2003 2003 Carrefour, 119 units, 44 650 27 319 93.8% 83%
Inditex, Yelmo Cineplex
Cantabria
Santander, El Alisal 2004 2004 Carrefour, Worten, 25 338 14 463 100.0% 83%
Aki, 37 units
Santander, Peñacastillo 1982 2001 Carrefour, 57 units 28 491 10 203 95.8% 83%
Torrelavega 1996 2000 Carrefour, 16 units 14 554 901 100.0% 83%
Castilla La Mancha
Albacete, Los Llanos 1990 2003 Carrefour, Worten, 19 724 5 505 91.7% 83%
40 units
Castilla y Leon
León 1990 2003 Carrefour, 25 units 13 247 2 466 91.3% 83%
Salamanque 1989 2000 Carrefour, 15 units 11 548 794 99.2% 83%
Valladolid I, Parquesol 1981 2000 Carrefour, 32 units 21 450 3 221 95.4% 83%
Valladolid II 1995 2000 Carrefour, 22 units 14 161 3 388 72.0% 83%
Cataluña
Cabrera del Mar (North Barcelona), 1980 2000 Carrefour, Aki, 18 502 5 913 96.7% 83%
Cabrera 32 units
Lérida 1986 2000 Carrefour, 18 units 5 982 526 82.5% 83%
Reus (East Tarragona) 1991 R/2004 2000 Carrefour, 27 units 19 226 2 936 98.5% 83%
Tarragona 1975 2000 Carrefour, 19 units 12 605 1 199 90.9% 83%
Estremadura
Badajoz, Granadilla 1990 2000 Carrefour, 20 units 15 492 889 100.0% 83%
Merida 1992 2000 Carrefour, 20 units 9 277 1 048 96.6% 83%
Badajoz, Valverde 1996 2000 Carrefour, 30 units 12 537 2 095 98.9% 83%
Villanueva de la Serena 1995 2000 Carrefour, 14 units 7 182 654 96.9% 83%
Cáceres 1993 2000 Carrefour, 17 units 9 600 1 436 100.0% 83%
Plasencia 1998 2000 Carrefour, 13 units 7 574 815 96.7% 83%
Galicia
Lugo 1993 2000 Carrefour, 22 units 9 109 1 410 80.7% 83%
Orense 1995 2003 Carrefour, 21 units 10 525 1 034 92.5% 83%
Pontevedra 1998 2003 Carrefour, 21 units 10 769 1 094 95.8% 83%
Madrid
Alcalá de Henares 2001 2001 Carrefour, 26 units 9 169 1 667 90.9% 83%
Alcobendas (North Madrid) 1982 2000 Carrefour, 49 units 18 973 3 570 93.9% 83%
El Pinar de Las Rozas (Northwest Madrid) 1981 R/2010 2000 Carrefour, 37 units 21 788 2 177 96.7% 83%
Los Angeles (South Madrid) 1992 R/2010 2004 Carrefour, 51 units 17 782 6 972 93.2% 83%
Móstoles 1992 R/2010 2000 Carrefour, 33 units 15 008 2 601 94.3% 83%
Pozuelo, Ciudad de la Imagen 1995 2000 Carrefour, 27 units 11 266 1 936 86.3% 83%
Rivas Vaciamadrid, Parque Rivas 1999 2002 Carrefour, 26 units 37 005 1 522 95.6% 83%
San Sebastian de Los Reyes 2001 2001 Carrefour, 23 units, 149 697 1 455 98.8% 83%
IKEA, Leroy Merlin,
Mediamarkt, Plaza
Norte 2
Vallecas, La Gavia 1 2008 2008 Carrefour, IKEA, 94 285 47 581 97.3% 100%
176 units
Murcia
Carthagène, Alfonso XIII 1988 2000 Carrefour, 23 units 11 334 1 129 93.3% 83%
Molina de Segura, Vega Plaza 2005 2006 Supercor, 97 units 15 000 10 654 77.3% 100%
Murcia, Zaraiche 1985 R/2005 2000 Carrefour, 27 units 11 080 1 645 97.8% 83%

68 | Klépierre – 2010 Annual report

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest
Pays basque
Bilbao II - Sestao 1994 2000 Carrefour, 24 units 17 136 1 325 97.7% 83%
Oyarzun - San Sebastian 1979 2000 Carrefour, 19 units 10 835 745 95.6% 83%
Valence
Alicante, Puerta de Alicante 2002 2002 Carrefour, 83 units, 34 500 20 812 78.0% 83%
Inditex, Yelmo Cineplex
Alzira (South Valencia) 1991 2000 Carrefour, 25 units 15 293 1 031 86.0% 83%
Benidorm 1989 2000 Carrefour, 25 units 12 909 1 627 100.0% 83%
Castellón 1985 2000 Carrefour, 25 units 8 722 820 73.9% 83%
Elche 1983 2000 Carrefour, Decathlon, 27 600 798 100.0% 83%
Aki, Kiabi, 18 units
Elda-Petrer, Alicante 1989 R/2006 2001 Carrefour, 33 units 19 370 3 427 91.7% 83%
Gandía 1994 2000 Carrefour, 24 units 10 758 1 460 100.0% 83%
Sagunto 1989 2000 Carrefour, 15 units 7 979 981 99.3% 83%
Torrevieja 1994 2000 Carrefour, 20 units 16 129 1 094 100.0% 83%
Valencia I, Alfafar 1976 2000 Carrefour, 45 units 21 614 6 992 98.5% 83%
Valencia II, Campanar 1987 R/2005 2000 Carrefour, 34 units 16 060 2 502 91.0% 83%
Valencia III, Paterna 1979 2002 Carrefour, 22 units 12 498 1 016 100.0% 83%
Villarreal (West Castellon de la Plana) 1995 2000 Carrefour, 18 units 9 180 905 97.1% 83%
Vinaroz 2003 2003 Carrefour, 15 units 10 744 868 100.0% 100%

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest
Portugal
Braga, Minho Center 1996 2006 Continente, Worten, 21 603 9 603 88.3% 100%
68 units
Gondomar (Porto), Parque Nascente 3 2003 2003 Jumbo, Leroy Merlin, 63 500 46 973 94.9% 100%
Mediamarkt, Primark,
152 units
Loures 2002 2002 Continente, Aki, 39 277 17 370 92.8% 100%
Decathlon, 75 units
Telheiras 1990 2003 Continente, Worten, 31 398 13 617 100.0% 100%
Aki, 33 units
Vila Nova de Gaia, Gaia 1990 R/2010 2003 Continente, 36 units 22 112 5 179 85.7% 100%

Klépierre – 2010 Annual report | 69

 Central Europe
Poznan

24 centers – 454 268 sq.m. rentable floor area* Lublin

€1.1Bn (7.3% of the value of the portfolio (1))
€78.0M (8.5% of consolidated rents) Prague

96.0% financial occupancy rate*

Top 3 assets
1 2 3

Nový Smíchov Poznan Plaza Lublin Plaza

Prague, Czech Republic Poznan, Poland Lublin, Poland

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area* area* rate* interest

Poland
Crakow, Krakow Plaza 2001 R 2008 2005 Carrefour, Cinema City, 29 422 29 422 95.5% 100%
Fantasy Park, 119 units
Lublin, Lublin Plaza 3 2007 2007 Stokrotka, Cinema City, 25 668 25 668 96.7% 100%
Fantasy Park, H&M,
Reserved, Carry Smyk,
103 units
Poznań, Poznań Plaza 2 2005 2005 Piotr i Pawel, Cinema 29 288 29 288 100.0% 100%
City, Fantasy Park,
Zara, H&M, Reserved,
133 units
Ruda Slaska, Ruda Slaska Plaza 2001 R 2008 2005 Carrefour, Cinema City, 14 568 14 568 96.0% 100%
Fantasy Park, 58 units
Rybnik, Rybnik Plaza 2007 2007 Stokrotka, Cinema City, 18 097 18 097 99.8% 100%
Fantasy Park, H&M,
EURO AGD, Reserved,
72 units
Sosnowiec, Sosnowiec Plaza 2007 2007 Stokrotka, Cinema City, 13 102 13 102 96.9% 100%
Fantasy Park, C&A,
67 units
Warsaw, Sadyba Best Mall 2000 2005 Carrefour, Cinema City, 22 508 22 508 100.0% 100%
Fantasy Park,
103 units

(1) Appraised value (excluding duties, total share).

70 | Klépierre – 2010 Annual report

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Hungary
Budapest, Csepel Plaza 1997 2004 Match, Merkur 13 606 13 606 86.6% 100%
Spilothek 74 units
Budapest, Duna Plaza 1996 R 2002 2004 Match, Media Saturn, 37 081 37 081 94.2% 100%
Palace Cinema,
H&M 194 units
Budapest, Corvin 2010 2009 CBA; H&M; Electro 33 350 31 139 72.5% 100%
World 127 units
Debrecen, Debrecen Plaza 1999 R 2007 2004 Match, Cinema City, 14 630 14 625 92.3% 100%
Merkur Spil. 81 units
Gyor, Gyor Plaza 1998 R 2008 2004 Match, Cinema City, 15 270 15 236 92.6% 100%
80 units
Kaposvar, Kaposvar Plaza 2000 E 2008 2004 Match, Hervis, Palace 10 126 10 126 93.7% 100%
Cinema, 52 units
Miskolc, Miskolc Plaza 2000 2004 C&A, Cinema City, 14 946 14 946 92.7% 100%
H&M 106 units
Nagykanizsa, Kanizsa Plaza 2000 2004 CBA; Cinema, Jysk, 7 556 7 556 91.1% 100%
37 units
Nyiregyhaza, Nyir Plaza 2000 2004 Cinema City, CBA, 13 930 13 930 88.4% 100%
88 units
Szeged, Szeged Plaza 2000 2004 CBA, Cinema city, 16 401 16 401 94.4% 100%
Hervis, H&M 86 units
Székesfehérvar, Alba Plaza 1999 2004 C&A, Hervis, Cinema 15 298 15 284 96.2% 100%
city, 84 units
Szolnok, Szolnok Plaza 2001 2004 Spar, Hervis, Cinema 6 927 6 927 91.7% 100%
City, 37 units
Zalaegerszeg, Zala Plaza 2001 2004 Cinema City, CBA, 7 441 7 441 89.5% 100%
50 units

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Czech Republic
Plzeň, Plzeň Plaza 2007 2008 Cinema City, Bowling 19 998 19 998 93.1% 100%
Plaza, Supermarket
Albert, Hervis Sport,
Reserved, Esprit,
111 units
Prague, Novodvorská Plaza 2006 2006 Tesco, Funtasy Club, 26 762 26 762 90.9% 100%
117 units
Prague, Nový Smíchov 1 2001 2003 C&A, Palace Cinemas, 57 109 38 381 99.1% 100%
H&M, Zara, M&S,
158 units

City, center Opening Renovation/ Acquired Composition Gross Rentable Financial Klépierre
Extension by leasable floor occupancy equity
Klépierre area area rate interest

Slovakia
Bratislava, Danubia 2000 2001 Carrefour, Nay, 45 units 25 976 12 176 92.9% 100%

Klépierre – 2010 Annual report | 71

 Retail properties, as of December 31, 2010
€0.6Bn (3.9% of the value of the portfolio (1))
€43.8M (4.8% of consolidated rents)

Asset name/Retailer Location Composition GLA*

Buffalo Grill Throughout France 157 Buffalo Grill restaurants. 89 009
Vivarte Throughout France 95 assets, including: 94 601
• 83 Défi Mode retail stores;
• 4 La Halle retail stores;
• 8 La Halle aux Chaussures retail stores.
King Jouet Throughout France 29 assets, including: 24 595
• 28 King Jouet retail stores;
• 1 Joupi retail store.
Mondial Moquette Throughout France 10 Mondial Moquette retail stores. 9 619
Chalon Sud 2 Chalon-sur-Saône 1 retail park of 8 units: Boulanger, Top Office, GrandOptical, MaxiZoo, Tati, Milonga, 10 000
Les Relais de la Fête, Passage Bleu.
Sephora Metz and Avignon 2 Sephora retail stores. 1 179
Sundry retail properties Throughout France 42 stores including: 33 786
• 2 Animalis retail stores;
• 2 Chauss Expo retail stores;
• 5 Chausséa retail stores;
• 3 Feu Vert retail stores;
• 2 Gémo retail stores;
• 2 Générale d’Optique retail stores;
• 3 Heytens retail stores;
• 3 Leader Price supermarkets;
• 20 miscellaneous retail stores.
TOTAL Throughout 336 assets 262 786
France

Office properties, as of December 31, 2010

€0.5Bn (3.6% of the value of the portfolio (1))
€36.7M (4.0% of consolidated rents)
City Location Description GLA
Paris
Paris [9th] 7, rue Meyerbeer Haussmanian style building in the heart of the Opéra district, 2 underground levels of retail 4 189 sq.m.
and office space.
Paris [15th] 141, rue de Javel Complex comprised of 2 buildings of 7 and 5 floors respectively, plus 2 underground floors. 5 969 sq.m.
Completed in 1993, it is fully air-conditioned.
Paris [15th] 43, quai de Grenelle Building with 7 floors above ground plus 4 underground floors, with 1 inter-company restaurant. 12 433 sq.m.
Completed in 1993, this building offers quality facility management services. Acquired in 2001.
Paris [15th] 1, bd Victor - Le Barjac A beautiful, 5 floors building, plus 3 underground floors. Entirely restructured in 1999. 7 317 sq.m.
Paris [16th] 21, rue La Pérouse Near the Etoile, this 5 floors building (plus basement) erected in 1990 was partly restructured in 1999. 2 076 sq.m.
Paris [16th] 21, avenue Kléber Near the Etoile, this 5 floors building (plus basement) erected in 1990 was partly restructured 1 933 sq.m.
in 1999.
Inner Rim
Boulogne [92] 9/9 bis, rue Henri-Martin Complex of 2 buildings of 2 and 6 floors plus 2 underground floors. Built in 1996 and fully 3 702 sq.m.
Les Jardins des Princes air-conditioned. Acquired in 2001.
Issy-les- 46, rue Camille-Desmoulins 2 buildings of 7 floors with 4 underground floors. Delivered on December 6, 2002 and June 8, 17 038 sq.m.
Moulineaux [92] ZAC Forum Seine 2004.
Issy-les- 32, rue Galliéni Completed in April 2009, Séreinis combines contemporary architecture and optimum 12 000 sq.m.
Moulineaux [92] comfort. Designed in line with the principles of sustainable development, this building
is eligible for HQE®.
La Défense [92] Collines de l’Arche Operation certification. 30.44% stake in a 9 floors plus 4 underground floors building. 2 572 sq.m.
Built in 1990.
Levallois [92] 105, rue Anatole France 50% stake in a building built in 1992. 7 floors plus 4 underground floors. Air conditioned. 3 127 sq.m.
Neuilly [92] 192, avenue Charles- Recently built luxury complex featuring modern facilites in a joint ownership 13 517 sq.m.
de-Gaulle on the Neuilly bridge right side.
TOTAL 12 assets 85 873 sq.m.

(1) Appraised value (excluding duties, total share).

72 | Klépierre – 2010 Annual report

Financial
report
Klépierre – 2010 Annual report | 73
 Contents
75 Business for the year
102 Risk factors
110 Corporate governance
122 Social and environmental information
132 Consolidated financial statements at December 31, 2010
195 Corporate financial statements at December 31, 2010
219 Information on the Company and the capital
235 General meeting
267 Additional information
280 Glossary

74 | Klépierre – 2010 Annual report

Business
for the year
76 1. Economic environment
77 2. Rental business
82 3. Development – Disposals
85 4. Consolidated earnings and cash flow
89 5. Outlook for 2011
91 6. Parent company earnings and distribution
92 7. Nav (Net asset value)
96 8. Financial policy
98 9. Human resources
99 10. Other information
101 11. Events subsequent to year-end closing date

Klépierre – 2010 Annual report | 75

 Business for the year
1. Economic environment
1.1. Macroeconomic situation (1)
•• In 2010, European GDP growth firmed up over the period, boosted by •• This is also the case for most of the countries where Klépierre has opera-
internal demand. The improvement in private consumption – in particular tions, with a few notable exceptions:
for the car sector – added further support to this trend. Nonetheless, – a slight decline in GDP growth, linked to austerity measures imple-
GDP growth is expected to remain subdued (+1.7% for the Eurozone mented by policymakers, is expected for Portugal;
as a whole) due to a slowdown in global trade near the end of the year. – conversely, a significant improvement is expected for Central Europe,
•• According to the OECD, in 2011, economic activity in Europe as a whole particularly in Poland and in Hungary, where forecasts for 2011 are
is expected to match the levels reached in 2010, despite measures much higher than the year-end 2010 forecasts;
taken to improve public finances in some countries and uncertainties – A slight improvement in private consumption is expected for Spain
related to sovereign debt tensions. in 2011.

Growth forecasts for 2011

France/Belgium Scandinavia Italy/Greece Iberia Central Europe
France Belgium Norway Sweden Denmark Italy Greece Spain Portugal Poland Hungary Czech Slovakia
Republic
+1.6% +1.8% +1.8% +3.3% +1.6% +1.3% -2.7% +0.9% -0.2% +4.0% +2.5% +2.8% +3.5%

1.2. Change in tenants’ sales (2010 aggregate) (2) France/Belgium

France/ Scandinavia Italy/Greece Iberia Central Total •• In France, after having been disrupted in October by social unrest and
Belgium Europe gasoline shortages, activity levels were hurt in December by the sub-
+0.3% +1.8% +5.2% -1.6% -0.6% +1.2% stantial snowfall that kept shoppers away from malls during the crucial
week leading up to Christmas. The result for the year was quasi-stag-
•• In 2010, shopping centers tenants’ sales confirmed their recovery, with nation in sales (+0.1%). Hypermarket-anchored shopping centers sales
sales posting a gain of 1.2% compared to the level reached in 2009: trends were more positive (+0.8%) than those observed for both regional
– for the Italy/Greece region, annual growth was strong (+5.2%); centers (-0.5%) and those located in downtown areas (-0.1%).
– for Scandinavia, retail sales revenue was up by 1.8%; •• In Belgium, growth picked up for L’esplanade (Louvain-la-Neuve: +4.7%)
– for the France/Belgium region, a slight improvement was observed toward the end of the year, boosted in particular by the arrival of dynamic
(+0.3%); new retail tenants (Bershka and Pull & Bear).
– for Central Europe, the significant improvement at year end was not
quite enough to move sales growth into positive territory (-0.6%); Scandinavia
– the annual performance was more mixed for Iberia, which posted a
1.6% decline. •• All 3 Scandinavian countries posted sales growth: +0.9% in Norway,
+3.2% in Sweden, and +2.4% in Denmark. In the latter 2 countries,
•• Retail sales were on the rise in all segments, with the exception of every single shopping center, without exception, saw a rise in sales.
Culture/Gifts/Leisure (-1.0%, though showing improvement in the last
quarter). The Personal products segment (traditionally the highest sales
producer) turned in the best performance (+2.1%). The Beauty/Health
segment (+1.2%) and, to a lesser extent, both the Household goods
(+0.7%) and Restaurant (+0.6%) segments showed improvement.

(1) Source: OECD.

(2) January through December, except for Belgium, Greece, Spain and Slovakia (January through November).

76 | Klépierre – 2010 Annual report

Italy/Greece Central Europe

•• Italian malls reported a sharp rise in sales in 2010 (+5.6%). Every retail •• In Poland, the 4th quarter showed a significant gain (in December alone,
segment showed sales growth, with the top 2 segments (which together +4.8%), which resulted in a positive outcome for the year as a whole
account for two-thirds of sales) showing particular strength: Personal (+0.9%). In particular, the three largest shopping centers (Lublin, Poznan
Products (+6.8%) and Household Goods (+6.9%). The rise was more and Sadyba in Warsaw) posted growth.
modest in December (+0.8%), but constitutes a consolidation of sub- •• In the Czech Republic, sales for 2010 came in 1.8% higher than for
stantial improvement observed in December 2009 (December 2009/ 2009, with improvement reported by all three centers in the portfolio.
December 2008: +4.1%). •• In Hungary, the annual performance was once again negative (-5.1%),
•• In Greece, as nationwide retail sales figures evidence, the situation con- though the trend continues to show improvement (-0.9% in December).
tinued to get worse. Through the first 11 months of 2010, the decline The new Corvin center (which opened in late October) received nearly
versus 2009 is 7.5%. The only shopping center that maintained its level 2 million visitors over the last two months of the year.
of activity was Patras.

Iberia

•• In Spain, the recovery that was observed in the 1st quarter did not con-
tinue in the months that followed. In aggregate, however, the decline
was moderate (-1.1% through the first 11 months of 2010) thanks to the
satisfactory performance turned in by the La Gavia center (Vallecas-
Madrid, +19%).
•• In Portugal, the year’s decline was -3.0%, with a more favorable trend
observed in December (-0.5%), particularly for the Telheiras and Parque
Nascente centers, both of which reported a rise in sales.

2. Rental business
Breakdown of consolidated rents by region/activity:
912.2 millions euros

Retail
5%
Offices
4%
France/Belgium
Central Europe 39%
8%

Iberia
11%

Italy/Greece
13%
Scandinavia
20%

2.1. Shopping center segment (91.2% of consolidated rents)

12/31/2010 Change Rents (in millions of euros) Change Change on Financial occupancy rate* Late payment rate (3)
in retailers on a current a constant
revenues (1) portfolio basis portfolio and
2010 2009 forex basis (2) 2010 2009 2010 2009
France/Belgium 0.3% 356.7 348.7 2.3% 0.2% 98.9% 99.0% 0.9% 0.5%
Scandinavia 1.8% 183.8 160.3 14.7% 1.5% 95.8% 97.2% 0.6% 0.6%
Italy/Greece 5.2% 118.3 100.3 18.0% 2.3% 98.5% 97.7% 2.8% 2.2%
Iberia -1.6% 95.0 96.7 -1.8% -1.8% 92.7% 92.1% 2.0% 2.2%
Central Europe -0.6% 78.0 81.5 -4.4% -3.3% 96.0% 95.5% 5.5% 2.9%
Total 1.2% 831.7 787.4 5.6% 0.1% 97.1% 97.3% 1.7% 1.2%
(1) Aggregate over twelve months, except for Belgium, Greece, Spain and Slovakia (aggregate through eleven months).
(2) On a constant portfolio and current exchange rate basis, changes are +8.7% for the Scandinavian region, -2.5% for the Central European region, and +1.4% for the entire Shopping center segment.
(3) Rate six months out.

Klépierre – 2010 Annual report | 77

 Business
for the year

•• For year 2010 as a whole, rents from the shopping center segment rose – While Portugal and Spain have shown some signs of stabilization, the
by 0.1% on a constant portfolio and exchange rate basis. economic situation has continued to adversely affect consumer
– With increases of between 2% and 3%, Norway, Sweden and Italy spending in Greece and in Hungary, which however only account for
continue to outperform the rest of Europe, while the Group’s other 0.8% and 2.6% of consolidated rents, respectively.
main markets – including France – show resilience.

2.1.1. France/Belgium (39.1% of consolidated rents)

12/31/2010 Change Rents (in millions of euros) Change Change Financial occupancy rate* Late payment rate (1)
in retailers on a current on a constant
revenues 2010 2009 portfolio basis portfolio basis 2010 2009 2010 2009
France 0.1% 343.1 334.4 2.6% 0.1% 98.9% 99.1% 0.8% 0.5%
Belgium 4.7% 13.6 14.3 -5.1% 3.4% 99.6% 97.5% 3.0% 2.1%
Total 0.3% 356.7 348.7 2.3% 0.2% 98.9% 99.0% 0.9% 0.5%
(1) Rate 6 months out.

France (37.6% of consolidated rents)

•• On a constant portfolio basis*, the positive impact of lease negotiations opened at Toulouse-Blagnac, Noisy-Arcades, Val d’Europe and Vaulx-
conducted in 2009 and 2010 helped to offset the negative impact of en-Velin, brought more than 10 million euros in additional rents;
index-linked rent adjustments (-0.2%): – the 2009 and 2010 disposals had a -5.3 million euros impact on rents.
– in 2010, 207 relettings and 154 lease renewals were signed under
financial conditions up by 19.1% (+e4.3M); 22 new leases were also Belgium (1.5% of consolidated rents)
signed, for full year additional rents of 1.0 million euros;
– these transactions also led to qualitative gains: Adidas Originals, Planet •• L’esplanade continues to attract more visitors and produce higher rents:
Jogging and G-Star joined Val d’Europe; Hema was added to Places – the Inditex group reinforced its presence in the center, through the
d’Armes (Valenciennes) and Créteil Soleil; Zadig & Voltaire joined expansion of the space occupied by Zara in August and the inaugura-
Passages de l’Hôtel-de-Ville (Boulogne-Billancourt), etc. tion on October 2, 2010 of Pull & Bear and Bershka outlets.
•• The current portfolio decline in rents is attributable to the conditions
•• On a current portfolio basis*, rents also got a boost from the Group’s attached to the reletting of the cinema complex with the Cinescope
development activities in both 2009 and 2010: group, which opened for business on June 15, 2010.
– the opening of Odysseum in Montpellier and of a retail park* near the
Bègles shopping center (in which Klépierre had purchased an addi-
tional share of ownership in late 2009) as well as extensions that

2.1.2. Scandinavia (20.1% of consolidated rents)

12/31/2010 Change in Rents (in millions of euros) Change Change Financial occupancy rate Late payment rate (2)
retailers on a current on a constant
revenues portfolio portfolio and
2010 2009 basis (1) forex basis (1) 2010 2009 2010 2009
Norway 0.9% 90.5 80.9 11.9% 2.4% 97.5% 98.6% 0.1% 0.4%
Sweden 3.2% 56.5 41.9 34.9% 3.0% 96.2% 96.3% 0.8% 0.5%
Danmark 2.4% 36.8 37.5 -1.9% -1.9% 91.5% 95.0% 1.4% 1.4%
Total 1.8% 183.8 160.3 14.7% 1.5% 95.8% 97.2% 0.6% 0.6%
(1) On a constant portfolio and current exchange rate basis, the change is +11.7% for Norway, +14.7% for Sweden, -1.9% for Denmark, and +8.7% for Scandinavia as a whole.
(2) Rate 6 months out.

78 | Klépierre – 2010 Annual report

Norway (9.9% of consolidated rents) •• Developments finalized in 2009-2010 explain the strong rise in rents on
a current portfolio basis (+34.9%):
•• Norwegian shopping centers continued to show strength in the 4th quar- – the extension of Marieberg, which was definitively opened in
ter, through the following items: August 2009, that of Sollentuna in March 2010 and that of Hageby in
– further tenants’ sales increases; April 2010 together brought 8.6 million euros in rents over the year.
– the positive effect of rental reversions completed since the beginning
of the year: 230 leases were either renewed or signed with new ten- Denmark (4.0% of consolidated rents)
ants under financial conditions that were up by 11.0% (+e1.2M);
21 new leases were signed for 0.3 million euros full year additional •• Despite an economic environment that is less supportive than in Norway
rents; and Sweden, the fall in Danish rents slowed down in the course of 2010.
– the impact of index-linked rent adjustments (+0.7%). A total of 12 relettings were completed in 2010, generating a 0.1 million
•• External growth was mainly driven by the June 2009 opening of the final euros rental upside (+8.1%), and 21 new leases will bring in 1.6 million
phases of the Metro extensions and the last phase in the extension- euros full year additional rents.
renovation of Gulskogen in November 2010 (+e1.6M). – At Field’s, a new space devoted to young fashion was inaugurated in
– The disposal of Karl Johans Gate (Oslo) completed in May 2010 had October 2010 on the 2nd floor of the center; the concept, baptized
a -1.2 million euro impact on rents. “Hi’street”, attracted new and very trendy retailers, including Gina
Tricot, Noa Noa, Jack & Jones and Vero Moda, alongside the existing
Sweden (6.2% of consolidated rents) H&M store, which was expanded as part of the project.
– At Bryggen, the arrival of H&M and Burger King in the month of
•• Swedish rents rose by 3.0% in 2010 on a constant portfolio basis, September increased footfall, and the center’s rents also got a boost
despite the negative impact of index-linked rent adjustments (-1.5%). from a non-recurring item in the 4th quarter (departure indemnities
– the work of the management teams resulted in 174 lease renewals totaling e0.8M).
and 47 relettings under financial conditions up by an average of 7.8% – Brunn’s Galleri (Arhus) continues to turn in good rental performances,
(+e0.7M). New leases involving 13 lots were signed for 0.7 million supported by an increase in footfall (nearly 11 million visitors in 2010).
euros full year additional rents.

2.1.3. Italy/Greece (13.0% of consolidated rents)

12/31/2010 Change Rents (in millions of euros) Change Change Financial occupancy rate Late payment rate (1)
in retailers on a current on a constant
revenues 2010 2009 portfolio basis portfolio basis 2010 2009 2010 2009
Italy 5.6% 110.9 92.7 19.6% 2.7% 98.8% 97.6% 2.5% 1.9%
Greece -7.5% 7.4 7.6 -2.2% -2.2% 94.2% 98.0% 5.8% 4.8%
TOTAL 5.2% 118.3 100.3 18.0% 2.3% 98.5% 97.7% 2.8% 2.2%
(1) Rate 6 months out.

Italy (12.2% of consolidated rents) •• External growth reflects the impact of the full consolidation of the 9 IGC
centers since November 2009, the acquisition of the Vittuone center in
•• The increase in rents on a constant portfolio basis largely exceeded the mid-October 2009, and the opening of the Pescara Nord extension on
impact of index-linked rent adjustments (+1.2%): December 1, 2010 (+e14.7M for these 3 transactions).
– the sharp rise in tenants sales generated additional variable rents; – tenants’ sales for the IGC centers have risen by 6.5% in one year;
– the appeal of the centers helped to attract new retailers that are par- – the Pescara Nord extension-renovation was fully leased up before it
ticularly popular with consumers, such as Kiko, Deichman, Bershka opened.
and Stradivarius, some of which leased space in several of the Group’s
centers in 2010. In all, 54 leases were renewed and 58 lots found new Greece (0.8% of consolidated rents)
tenants, under financial conditions that were up by 8.6% (+e0.6M);
23 new leases were signed (+e1.1M); •• Against a very challenging economic backdrop, the decline in rents from
– the occupancy rate showed a significant improvement over Greek properties was limited to 2.2%.
December 31, 2009.

Klépierre – 2010 Annual report | 79

 Business
for the year

2.1.4. Iberia (10.4% of consolidated rents)

12/31/2010 Change in Rents (in millions of euros) Change Change Financial occupancy rate* Late payment rate (1)
retailers on a current on a constant
revenues 2010 2009 portfolio basis portfolio basis 2010 2009 2010 2009
Spain -1.1% 78.8 79.2 -0.5% -0.5% 92.5% 92.9% 1.8% 2.3%
Portugal -3.0% 16.2 17.5 -7.6% -7.6% 94.1% 88.9% 2.8% 2.0%
TOTAL -1.6% 95.0 96.7 -1.8% -1.8% 92.7% 92.1% 2.0% 2.2%
(1) Rate 6 months out.

Spain (8.6% of consolidated rents) •• Rents also got a boost from positive index-linked rent adjustments
(+0.8%).
•• In an economic backdrop that remains fragile, rents for the year fell
slightly (-0.5%), as did the financial occupancy rate (92.5% compared Portugal (1.8% of consolidated rents)
with 92.9% at year-end 2009).
•• New retailers have joined the Group’s shopping centers, such as Deichman •• In a weakened economic environment, the management teams redou-
in Augusta, and Worten which has leased more than 3 000 sq.m. at bled their efforts to improve the occupancy rates. The 55 leases that
Los Llanos. were renewed or relet during the year resulted in lower rents on average,
– The 189 leases renewed and 88 relettings completed in 2010 led to but the stated objective was reached, since the financial occupancy rate
a rental gain of 0.1 million euros (+2.0%). went from 88.9% at the end of 2009 to 94.1% at the end of 2010.
•• La Gavia, two years after it opened, continues to post strong growth in •• The impact of index-linked rent adjustments was nil over the period.
terms of footfall (close to 10.9 million visitors in 2010), tenants sales
(+19.3%), and rents (+4.0%).

2.1.5. Central Europe (8.5% of consolidated rents)

12/31/2010 Change Rents (in millions of euros) Change Change Financial occupancy rate Late payment rate (2)
in retailers on a current on a constant
revenues portfolio portfolio and
2010 2009 basis (1) forex basis (1) 2010 2009 2010 2009
Poland 0.9% 33.1 33.2 -0.4% 0.0% 98.2% 97.0% 3.6% 2.4%
Hungary -5.1% 23.7 26.4 -10.1% -9.0% 93.2% 93.2% 7.2% 3.5%
Czech Republic & Slovakia 0.6% 21.2 22.0 -3.5% -1.6% 96.0% 96.5% 6.5% 3.0%
TOTAL -0.6% 78.0 81.5 -4.4% -3.3% 96.0% 95.5% 5.5% 2.9%
(1) On a constant portfolio and current exchange rate basis, the change is +1.0% for Poland, -8.5% for Hungary, -0.2% for the Czech Republic and Slovakia, and -2.5% for the Central European region as a whole.
(2) Rate six months out.

Poland (3.6% of consolidated rents) Hungary (2.6% of consolidated rents)

For the year 2010 as a whole, Polish rents were unchanged on a con- •• The country’s macroeconomic situation weighed significantly on retail
stant exchange rate and portfolio basis. business, with tenants sales falling by 5.1%.
•• The Sadyba and Poznan centers, which were the subject of major lease – In this context, rents decreased by 9.0% on a constant portfolio basis,
renewal campaigns in 2010, turned in good performances, with more reflecting a higher vacancy rate and adverse changes in lease terms.
than 20 new stores opened last year, including Tatuum, L’Occitane, – The arrival of H&M at Miskolc, Szeged and Duna nonetheless sup-
Promod, H&M and Puma. Conversely, the transactions involving the ported business at these centers in the 4th quarter of 2010.
Krakow center were concluded under lower financial conditions. •• Inaugurated on October 26, 2010, Corvin attracted nearly 2 million visi-
– Overall, 103 leases were renewed and 50 spaces were relet in 2010, tors in its first two months in operation.
for a full year rental gain of 8.0% (+e0.5M).

80 | Klépierre – 2010 Annual report

Czech Republic/Slovakia (2.3% of consolidated rents)

•• The decline in Czech rents is attributable mostly to the departure of a

tenant at Novo Plaza and Plzeñ in late 2009. At Novo Plaza, 1 540 sq.m.
were relet to the Household white goods specialist Datart, in
August 2010.

2.2. Retail segment – Klémurs (4.8% of consolidated rents)

12/31/2010 Rents (in millions of euros) Change Change Financial occupancy rate Late payment rate
on a current on a constant
2010 2009 portfolio basis portfolio basis 2010 2009 2010 2009
Retail-Klémurs 43.8 42.8 2.4% -0.9% 99.7% 99.7% 0.1% 0.1%

•• On a constant portfolio basis, rents from the Retail segment decreased •• On a current portfolio basis, higher rents also include:
by 0.9%, reflecting the negative impact of index-linked adjustments – the contribution of 26 additional stores acquired in the course of the
(-2.6% on average), somewhat tempered by the rise in additional vari- 2nd half of 2009 as part of the Défi Mode-Vivarte agreement; and the
able rents (+e0.6M): opening in 3rd quarter 2009 of the Chalon Sud 2 retail park, which
– 64% of all leases in value terms were pegged to the 2nd quarter of 2009 includes major anchors Boulanger and Tati (+e2.1M for these
ICC*, which was down by 4.10%. 2 transactions);
– the disposal of three storefront property assets located in downtown
Paris and Rouen (-e0.8M).

2.3. Office segment (4.0% of consolidated rents)

12/31/2010 Rents (in millions of euros) Change on a Change Financial occupancy rate Late payment rate (2)
current portfolio on a constant
2010 2009 basis portfolio basis 2010 (1) 2009 2010 2009
Offices 36.7 49.9 -26.5% -3.3% 79.5% 81.1% 0.1% 0.0%
(1) If Sereinis is excluded, the rate is 94.1%.
(2) Rate six months out.

•• On a constant portfolio basis, rents decreased by 1.3 million euros •• The decline in the financial occupancy rate does not reflect a rise in
(-3.3%), due to: vacant space, but rather the planned disposal program, which led to the
– index-linked rent adjustments (-0.6%, -€0.2M); sale of some buildings that were fully leased up. Accordingly, vacant
– rental modifications made in 2009 and 2010 (-€1.1M); these lease space totaled 17 579 sq.m. on December 31, 2010, compared with
renewals, which allowed to keep the tenant on the premises were 23 384 sq.m. one year earlier, reflecting for the most part the following
carried out in accordance with prevailing market conditions in return items:
for a longer term on the lease. This new rental situation is more attrac- – 1 771 sq.m. in Collines de l’Arche (La Défense), where renovation
tive to potential buyers, in line with the Group’s objective of selling off works were completed in December 2010. Since then, 801 sq.m. of
a significant portion of the portfolio. space has already been leased out.
•• On a current portfolio basis, the decline in rents is also due to: – 2 525 sq.m. at 192 Charles de Gaulle (Neuilly-sur-Seine). This building
– disposals completed: 23/25 Avenue Kléber (Paris, 16th arrondisse- is undergoing restructuring and is currently being leased on a month-
ment) on November 30, 2009, Général Leclerc (Levallois-Perret) on to-month basis (3 297 sq.m. leased).
April 6, 2010 and Marignan-Marbeuf (Paris, 8 th arrondissement) – 12 665 sq.m. in the Séreinis building in Issy-les-Moulineaux, which is
on October 19, 2010; the sale of the Diderot building (Paris, being marketed. Excluding Séreinis, the occupancy rate would be
12th arrondissement), completed on December 28, 2010, had no 94.1%.
impact on rents for the year;
– the voluntary vacancy of Les Collines de l’Arche (La Défense) due to
the restructuring project that this asset is undergoing (2 572 sq.m.).

Klépierre – 2010 Annual report | 81

 Business
for the year

3. Development – Disposals – The diverse mix of businesses present in the Île-de-France market was
once again in evidence: manufacturing (26%), financial services (16%)
3.1. The real estate investment market in 2010 and the public sector (12%) top the list.
– At 3.6 million sq.m., immediate supply has been unchanged since late
3.1.1. The retail investment market in Europe (3) 2009. The market has absorbed space equivalent to deliveries and
tenant departures for the year. The percentage of new supply remains
•• Retail property transactions in Continental Europe reached 14.1 billion stable, at around 27%.
euros in 2010, an increase of 93% compared with 2009 (€7.3Bn in •• The average vacancy rate for Île-de-France was unchanged at 6.8%.
transactions). For Paris Center West, the average rate fell from 6.2% to 5.6%. The
– The amounts invested returned to the levels last reached in 2005. vacancy rate for the West Crescent remained high at 9.9%.
– Investors’ preference for shopping centers was accentuated in the •• Average face rents for Île-de-France firmed up, posting an increase of 2%.
course of 2010, with 74% of all retail transactions involving this seg- – Only the average rent for prime space in Paris Center West rose mark-
ment (versus 66% in 2009). edly (+11%), reaching €734/sq.m.
•• Germany was by far the most active market, accounting for 40% of all – Commercial incentives remain significant, and generally surpass a
transactions completed, followed by France (with 18% of all 1 month rent free period per year of firm lease commitment.
transactions). •• Investment volume rose by 42% in 2010, with the total for France com-
•• With retail property transactions totaling 2.8 billion euros, France was ing to 11 billion euros, of which 7.7 billion euros in Île-de-France. The
the focus of several major operations: Cap 3000 in Saint-Laurent-du-Var, 4th quarter alone accounted for 40% of all commitments (€4.6Bn).
the stake acquired by Allianz in the Espace Saint-Quentin shopping – The percentage share of office properties remains high (68%) but
center, the entry of NPS in O’Parinor, McArthurGlen in Troyes, Espace unchanged since 2009; and while the percentage for retail properties
Saint-Georges in Toulouse, 65 Croisette in Cannes, Saint-Martial in was also unchanged (24%), in value terms this segment turned in its
Limoges, etc. best performance since 2007.
•• The range of prime yields got narrower once again in the 2nd half of 2010, – Paris concentrates around 40% of all commitments involving Ile de
falling by 50 to 75 bps compared with the end of 2009. France. Investors are most interested in assets located at the prime
addresses with long-term leases.
3.1.2. The office property investment market •• The change in yields differed markedly depending on the type of asset
in Île-de-France (4) and its occupancy. For prime assets with long leases, yields declined
significantly and most substantially in the 2nd half of the year, by up to
•• With 2 160 500 sq.m. leased up, demand increased by 15% compared 150 bps, reaching 4.75% at year end. Conversely, for other assets,
with 2009. The 4th quarter, which saw 538 700 sq.m. leased up, was a yields were essentially unchanged.
bit disappointing, and marked a break with the dynamic established over
the 3 that preceded it.
– The mid-range floor area spaces (1 000 sq.m./5 000 sq.m.) were the
most dynamic, with an annual increase of +25%; conversely, the large
floor area segment of the market (>5 000 sq.m.) suffered from still
weak demand.
– The percentage of new or restructured space fell compared with
recent years, and represented 32% of the total space leased up (ver-
sus 36% in 2009). This decline also reflects the slowdown in construc-
tion starts and the delivery of new buildings.
•• Take-up in Paris increased substantially, accounting for 43% of all take-
up in Île-de-France. Conversely, La Défense and the West Crescent
suffered from the lack of activity in the market for large transactions.

(3) Source: Jones Lang LaSalle.

(4) Source: CBRE.

82 | Klépierre – 2010 Annual report

3.2. Investments made in 2010
•• In 2010, Klépierre invested a total of 430.9 million euros, mainly in its - opening of a Castorama outlet at Val d’Europe (Greater Paris Area);
principal regions of operation: France, Scandinavia and Italy (87%). - extension-renovation of the Arcades shopping center in Noisy-le-
– Investments focused mainly on the Group’s flagship projects: Gare Grand (Greater Paris Area);
Saint-Lazare, Aubervilliers (France), Emporia (Sweden), Aqua Portimão - extension-renovation of the Sollentuna shopping center (north of
(Portugal). Stockholm, Sweden);
– On June 28, 2010, Klépierre and its partner AXA acquired full owner- - retail park* Les Arches de l’Estey in Bègles (South-East of Bordeaux,
ship of the land under the Val d’Europe shopping center, for a payment France);
on purchase of 30 million euros. - opening of the Corvin shopping center (Budapest, Hungary);
– In the month of November 2010, Klépierre and Icade strengthened - extension-renovation of Pescara Nord shopping center (Italy).
their hold on the Odysseum retail area (Montpellier, France) by acquir-
ing a hub covering 5 hectares and 21 000 sq.m. GLA next to the shop- For more information, please
ping center, grouping retail, restaurant and entertainment space for a download the related press
global amount of 35 million euros (50% Klépierre/50% Icade). releases from the website,
– A portion of the investments related to Group extension and/or reno- under Information tab:
vation projects, many of them inaugurated over the course of the year: www.klepierre.com

Total Operating assets Projects

SHOPPING CENTERS 428.3 194.7 233.5
86.5 149.5
o/w Rennes Colombia (extension), o/w Aubervilliers(1) (56 000 sq.m.),
France/Belgium 236.1 Val d’Europe, Gare Saint-Lazare (10 000 sq.m.),
Montpellier-Odysseum, Clermont Jaude (13 800 sq.m.),
Annecy-Courrier Claye-Souilly (extension-révovation)
53.5 61.7
o/w Gulskogen o/w Emporia (78 000 sq.m.)
(extension-renovation,
Scandinavia 115.2 last phase opened in November 2010);
Sollentuna
(extension-renovation, last phase opened in March 2010),
Hageby
(extension-renovation, last phase opened in April 2010)
Italy/Greece 22.1 –
22.1 o/w Pescara Nord –
(extension-renovation inaugurated on 12/01/2010)
– 22.3
Iberia 22.3
– Aqua Portimão(1) (35 500 sq.m.)
32.6 –
Central Europe 32.6 Corvin –
(inaugurated on 10/27/2010, 34 600 sq.m.)
Retail assets 0.9 0.9 –
Offices 1.7 1.7 –
TOTAL 430.9 197.4 233.5
In millions of euros
(1) Klépierre share (50%).

(5) The remaining fixed rents paid prior to the signature of the leasehold in 1998 were also retained by the seller (€17M).

Klépierre – 2010 Annual report | 83

 Business
for the year

3.3. Development pipeline*, 2011-2015

•• The Group’s pipeline has a total value of 3.7 billion euros, of which 1.2 billion euros worth of committed projects and 1.1 billion euros worth of con-
trolled projects. Expressed in group share, these amounts are 3.3 billion euros, 1.0 billion euros and 1.0 billion euros, respectively.

Estimated cost (2) Amounts to outlay Expected net Floor area* Expected opening Pre-let rate (%)
2011-2015 initial yield* (3) (sq.m.) date
MGR* (4) Floor area
Aqua Portimão (Portimão, Portugal) (1)
40.5 13.6 7.1% 35 500 2Q 2011 74% 81%
Le Millénaire (Aubervilliers, Paris) (1) 190.9 39.0 7.4% 56 000 2Q 2011 84% 88%
Gare Saint-Lazare (Paris) 150.0 37.7 8.0% 10 000 1Q 2012 29% 33%
Perpignan-Claira (extension/renovation, France) 30.7 30.6 8.8% 8 300 3Q 2012 30% 30%
Emporia (Malmö, Sweden) 304.2 151.5 7.4% 78 000 3Q 2012 64% 70%
Claye-Souilly (extension/renovation, France) 94.9 67.0 7.3% 12 000 4Q 2012 – –
Bègles Rives d’Arcins (extension, France) 59.9 54.9 7.7% 12 500 3Q 2013 – –
Carré Jaude 2 (Clermont-Ferrand, France) 99.0 80.4 7.6% 13 800 1Q 2014 – –
Besançon Pasteur (France) 54.0 50.1 7.4% 14 800 1Q 2015 – –
Other operations
(commercial restructuring Créteil Soleil…)
COMMITTED PROJECTS (5) 1 231 654 7.3% 295 665
Marseille Bourse (extension/renovation, France) (1) 16.4 15.9 – 3 300 2Q 2013 – –
Grand Portet (extension/renovation, France) 53.1 52.0 – 8 000 2013-2014 – –
Mölndal (Sweden) 169.3 145.7 – 45 000 2014 – –
Torp (Sweden) 124.8 116.7 – 61 000 2Q 2015 – –
Nancy-Bonsecours (France) 146.0 99.6 – 53 400 4Q 2016 – –
Åsane (Norway) 103.8 101.9 – 103 000 2016 – –
CONTROLLED PROJECTS (6) 1 122 988 ~ 8% 491 973
IDENTIFIED PROJECTS (7) 1 361 1 196 – 493 390
TOTAL 3 714 2 838 ­– 1 281 028
In millions of euros
(1) Klépierre share (50%).
(2) Estimated cost price, after provisions, before financial costs.
(3) Expected net rents/Total investment forecast, before financial costs.
(4) MGR: Minimum Guaranteed Rent.
(5) Committed transactions: transactions in the process of completion, for which Klépierre controls the land and has obtained the necessary administrative approvals and permits.
(6) Controlled transactions: transactions that are in the process of advanced review, for which Klépierre has control over the land (acquisition made or under condition precedents contingent on obtaining
the necessary administrative approvals and permits).
(7) Identified transactions: transactions that are in the process of being put together and negotiated.

•• The Group’s committed and controlled investments, programmed for Central Europe
4%
the period 2011-2015, will remain focused on France (50%) and France/Belgium
Iberia
Scandinavia (39%), which are continental Europe’s most resilient eco- 1% 50%
nomic areas, offering the best outlook for economic and demographic
Italy/Greece
growth in the years ahead, and will involve: 6%
– either the completion of projects related to dominant shopping cen-
ters, most of which have already won the loyalty of retailers;
– or extension-renovation projects on existing shopping centers, with Scandinavia
39%
proven lease-up power and clearly identified growth potential.

– The Group also announced that it acquired on January 20, 2011 a

retail park * adjacent to the Romagna Center shopping center
(Savignano-Rimini, Italy) that it already owns (see Events subsequent
to year-end closing date). This acquisition, which represents an invest-
ment of 69.2 million euros, was included under committed projects in
the Group’s development pipeline at the December 31, 2010 reporting
date.

84 | Klépierre – 2010 Annual report

•• The lease-up of the main projects progressed in 2010: 4. Consolidated earnings
– Aqua Portimão, which will open its doors in the 2nd quarter of 2011, and cash flow
will feature a Jumbo hypermarket, not to mention Primark, Sephora
and other retailers; 4.1. Earnings by segment
– Le Millénaire (Aubervilliers): nearly 90% of all space has already been
let, and the center will feature the following retailers: Carrefour, Fnac, 4.1.1. Shopping center segment
Boulanger, C&A, H&M, Toys R Us and many global retail brands that
have chosen this shopping center for their début in France, such as 12/31/2010 12/31/2009 2010/2009
Kiko, Decimas and Polinesia (all brands of the Spanish group Rents 831.7 787.4 5.6%
Gruposport), or as a means of accelerating their development in Other rental income 16.4 14.7 11.8%
France (Desigual, Guess, New Yorker, etc.); Rental income 848.1 802.1 5.7%
– the shopping mall in Gare Saint-Lazare, which is scheduled for open- Building expenses -97.0 -92.7 4.6%
ing in the 1st quarter of 2012, has already attracted major retail names, Net rents 751.1 709.4 5.9%
including Carrefour City, Monop’ and Virgin; Management fee and other income 96.9 105.7 -8.4%
– the decision to launch the vast Emporia project (in Malmö) was made Payroll expense and other general costs -119.1 -118.3 0.7%
in July 2010, and lease-up has already reached 64%; retail tenants EBITDA 728.8 696.8 4.6%
will include Willys, Jack & Jones, Vero Moda (Bestseller group brands) Amortization and provisions allowance -408.5 -332.1 23.0%
and Desigual. Negotiations with other major global retailers are Proceeds from sales 21.0 41.7 -49.7%
ongoing. Share in earnings in equity-methods investees 1.7 2.4 -26.7%
SEGMENT EARNINGS 343.0 408.7 -16.1%
For more information on these projects, In millions of euros

go to the Projects section

of the website: www.klepierre.com Rental income for the year came to 848.1 million euros, an increase of
46.0 million euros over 2009.

3.4. Disposals completed in 2010 Other lease income includes entry fees as well as a margin on the provi-
sion of electricity to tenants in the Hungarian and Polish shopping cen-
•• Assets sold in 2010 (eM, excluding transfer duties) ters. The increase observed since December 31, 2009 is primarily
attributable to the straightlining of entry fees invoiced for the Toulouse
Shopping centers 69.2 Blagnac and Val d’Europe, as well as to an improvement in electricity
Douai – Flers-en-Escrebieux 30.0 supply conditions.
Karl Johans Gate (Oslo) 32.0
Minority stakes in the Henri Hermand portfolio 7.2 Owners’ building expenses rose by 4.3 million euros in 2010, reflecting
(15% in Rezé, 13,6% in Beynost, mainly)
in particular the increase in construction projects, partly offset by the
Retail assets 36.3
improvement in the client risk.
Rouen Candé 11.3
Castorama Flandre (Paris 19th) 25.0
Management and administrative fee income, which mainly pertains to
Offices 214.6
development-related fees, showed a decline of 8.8 million euros in 2010.
77-79, Anatole France/11 bis, Général-Leclerc (Levallois-Perret) 33.9
Marignan-Marbeuf (Paris 8th) 134.5
Payroll expense for the year was unchanged at 90.9 million euros.
Diderot (Paris 12th) 46.2
Operating expenses were also contained at 28.2 million euros.
TOTAL 320.1

EBITDA was 728.8 million euros in 2010, an increase of 32.0 million

•• The total amount of disposals in 2010 came to 320.1 million euros. euros compared with 2009.
– These transactions were made on average prices more than 9% higher
than the most recent appraisals. Depreciation and amortization expense for the year came to 408.5 mil-
lion euros, an increase of 76.4 million euros that reflects a 49.0 million
euros rise in provisions for depreciation of assets recorded mostly in
respect of shopping centers that were recently acquired or that are
under development, such as the Corvin center (Budapest). The rest of
the difference is mainly attributable to the portfolio development, and is
reflected in higher depreciation and amortization in Italy, for example,
where a 21.3% interest in IGC was acquired, as well as the Vittuone
center, and in Scandinavia, with the opening of the Gulskogen (Norway),
Hageby and Sollentuna (Sweden) centers.
The sale for a total of 69.2 million euros of the assets Douai–Flers-en-
Escrebieux and Karl Johans Gate (Oslo), and of the minority interest in
Henri Hermand holdings, resulted in 21.0 million euros being credited
to earnings.

Klépierre – 2010 Annual report | 85

 Business
for the year

Including the earnings provided by equity method investees (e1.7M),

the Shopping center segment produced total earnings of 343.0 million
euros in 2010, down by 16.1% versus the prior year.

France/Belgium Scandinavia Italy/Greece Iberia Central Europe

12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009
Rents 356.7 348.7 183.8 160.3 118.3 100.3 95.0 96.7 78.0 81.5
Other rental income 11.7 10.5 – ­– 1.7 1.5 0.1 0.6 3.0 2.0
Rental income 368.4 359.2 183.8 160.3 120.0 101.8 95.0 97.3 80.9 83.5
Building expenses -25.7 -32.7 -32.8 -23.5 -12.4 -12.4 -9.3 -9.8 -16.7 -14.2
Net lease income 342.6 326.5 150.9 136.7 107.6 89.4 85.7 87.5 64.2 69.3
Management fee and other income 47.6 53.3 28.5 31.8 8.7 7.3 7.5 8.1 4.6 5.2
Payroll expense and other general costs -53.4 -49.4 -32.5 -37.0 -10.8 -10.2 -13.5 -13.5 -8.9 -8.3
EBITDA 336.8 330.4 146.9 131.5 105.5 86.5 79.8 82.1 59.8 66.2
Amortization and provisions -84.9 -100.0 -117.9 -68.8 -31.5 -33.2 -43.2 -38.3 -131.0 -91.8
Proceeds from sales 4.0 41.8 17.6 ­– ­– -0.1 ­– ­– -0.7 -0.0
Share in earnings of equity-method investees 1.7 2.4 –­ –­ –­ –­ –­ –­ –­ ­–
SEGMENT EARNINGS 257.7 274.5 46.6 62.8 74.1 53.2 36.5 43.8 -71.9 -25.6
In millions of euros

4.1.2. Retail segment – Klémurs

12/31/2010 12/31/2009 2010/2009 Payroll expense and operating expenses came to 2.3 million euros and
Rents 43.8 42.8 2.4% mainly reflect the reallocation on a cost accounting basis of personnel
Other rental income 1.6 0.7 136.2% in charge of company management and development.
Rental income 45.4 43.5 4.4%
Building expenses -1.4 -2.2 -34.7% EBITDA for the year was 42.9 million euros, up by 2.2 million euros
Net rents 44.0 41.3 6.5% versus 2009.
Management fee and other income 1.2 1.4 -16.4%
Payroll expense and other general costs -2.3 -2.0 13.3% Depreciation and amortization for the year showed a net release of
EBITDA 42.9 40.7 5.3% 2.3 million euros.
Amortization and provisions allowance 2.3 -34.0 -106.8% •• Amortization expense rose due to the acquisitions made in the 2nd half
Proceeds from sales 15.7 4.6 x 3.4 of 2009, as well as to the opening of the retail park Chalon Sud 2 in the
SEGMENT EARNINGS 60.8 11.3 x 5.4 3rd quarter of 2009.
In millions of euros •• In addition, the Retail segment recorded a net release of provisions for
real estate assets of 17.2 million euros: as a reminder, provisions for real
Rental income rose by 4.4% (€1.9M) in 2010, to 45.4 million euros. estate assets totaling 19.9 million euros were recorded in the course of
2009 after the fair market value of the portfolio depreciated. The subse-
Other lease income corresponds mainly to the deferral of the entry fees quent appreciation in values observed by the appraisers in 2010, com-
collected in 2009 on the Castorama property at Rue de Flandre in Paris bined with the year’s allowance for depreciation and amortization, made
and on the retail park* Chalon Sud 2. it possible to reverse most of these provisions in 2010.
– The average yield* on assets excluding transfer duties was 7.1% on
Owner’s building expenses for the year totaled 1.4 million euros, a December 31, 2010, compared with 7.5% on December 31, 2009.
decline of 0.8 million euros versus year-end 2009. They primarily reflect
fees paid to outside suppliers/service providers for asset appraisals, The Retail segment generated proceeds of 15.7 million euros in 2010
and also fees related to acquisitions. Rental management and admin- after selling the retail storefront assets it owned in Rouen (June) and the
istrative fees paid to Klépierre Conseil are eliminated from the segment Castorama store property on Rue de Flandre in Paris (November).
earnings.
The retail segment generated earnings in 2010 of 60.8 million euros.
Management and administrative fee income was 1.2 million euros in
2010, down by 0.2 million euros compared with 2009.

86 | Klépierre – 2010 Annual report

4.1.3. Office segment
12/31/2010 12/31/2009 2010/2009 Payroll expense for the year was 0.6 million euros, a decline of 0.3 mil-
Rents 36.7 49.9 -26.5% lion euros compared with the previous year.
Other rental income – – –
Rental income 36.7 49.9 -26.5% EBITDA was 32.1 million euros, down by 29.3%.
Building expenses -4.0 -3.7 6.6%
Net rents 32.7 46.2 -29.1% Depreciation and amortization expense decreased by 0.4 million euros,
Management fee and other income 0.3 0.3 6.6% reflecting the impact of disposals over the period, offset to some degree
Payroll expense and other general costs -1.0 -1.1 -15.9% by the delivery of the Séreinis building in 2009.
EBITDA 32.1 45.3 -29.3%
Amortization and provisions allowance -11.8 -12.2 -3.3% Proceeds from the sale of office properties came to 88.8 million euros
Proceeds from sales 88.8 40.4 120.0% in 2010, following the sale of the Levallois Général-Leclerc, Marignan-
SEGMENT EARNINGS 109.1 73.5 48.4% Marbeuf (Paris, 8th arrondissement) and Diderot (Paris, 12th arrondisse-
In millions of euros ment) buildings for a global amount of 214.6 million euros excluding
transfer duties.
Rental income from the Office segment was down by 26.5% to
36.7 million euros in 2010, primarily due to the impact of asset sales The Office segment generated earnings for the year ended
completed in 2009 and 2010. December 31, 2010 of 109.1 million euros, an increase over the prior
year of 48.4%.
Owners’ building expenses reflect amortization of the building lease for
the 43 Grenelle building, the cost of vacancy and fees paid to outside
suppliers.

Management, administrative and other income was unchanged at

0.3 million euros and includes an indemnity related to the refurbishing
of premises following the departure of a tenant.

4.2. Consolidated earnings and cash flow

4.2.1. Earnings

12/31/2010 12/31/2009 Change

Millions euros %
Rental income 930.2 895.5 34.7 3.9%
Building expenses -102.4 -98.6 -3.8 3.9%
Net lease income 827.8 796.9 30.9 3.9%
Management fee, administrative and related income 76.5 80.8 -4.3 -5.3%
Other operating income 22.0 27.1 -5.1 -18.7%
Payroll expense -104.6 -103.7 -0.9 0.9%
Other general expenses -39.4 -37.8 -1.6 4.3%
EBITDA 782.3 763.2 19.0 2.5%
D&A on investment property -417.4 -374.2 -43.2 11.6%
D&A on PPE -0.9 -4.4 3.5 -80.2%
Proceeds from sales 125.5 86.6 38.8 44.8%
Results from operations 489.4 471.3 18.1 3.8%
Net cost of debt -297.0 -292.8 -4.2 1.4%
Share in earnings for equity method investees 1.7 2.4 -0.6 -26.7%
Pre-tax current income 194.1 180.9 13.2 7.3%
Corporate income tax -11.7 26.8 -38.5 -143.7%
Net income 182.4 207.7 -25.2 -12.1%
Non-controlling interests -57.9 -45.6 -12.3 27.0%
NET INCOME (GROUP SHARE) 124.6 162.1 -37.5 -23.1%
In millions of euros

Klépierre – 2010 Annual report | 87

 Business
for the year

Net lease income for 2010 came to 827.8 million euros, an increase of centers, as well as the sale of storefront assets owned in Rouen, the
3.9% compared with the previous year. Lease income was 930.2 million Castorama store property on Rue de Flandre in Paris, and the Levallois
euros, broken down among the various segments as follows: Général-Leclerc, Marignan-Marbeuf and Diderot office properties.
848.1 million euros for the shopping centers*, 36.7 million euros for the
office properties, and 45.4 million euros for the retail properties. Results from operations totaled 489.4 million euros in 2010, an increase
Compared with December 31, 2009, rents from shopping center leases of 3.8% over the year ended December 31, 2009.
were up by 5.6% on a current portfolio basis* (+0.1% on a constant
basis); rents from retail properties were up by 2.4% (-0.9% on a con- The financial result for the year was a loss of 297.0 million euros, com-
stant basis*); and rents from office properties fell by 26.5% on a current pared with 292.8 million euros for the year ended December 31, 2009.
portfolio basis (-3.3% on a constant basis). Interest expense for the Group was 4.2 million euros higher in 2010 than
in 2009. Cost of debt for Klépierre observed over the period – ratio of
Fee income generated by service businesses reached 76.5 million euros interest expense to average financing debt – was stable. The decline in
in 2010, a decline of 4.3 million euros that reflected lower development short-term interest rates mostly offset the full-year impact of the rene-
fees. Of the total for the year, 74% of the fees were generated by recur- gotiation with the banks conducted in June 2009 as well as the cost of
rent real estate management business and third party rental property carry on the April 2010 bond issues (fees for non-utilization of credit
management. lines temporarily undrawn).

Other income from operations primarily includes re-invoicing to tenants Klépierre’s financial policy and structure are described in more detail in
and various indemnities. paragraph 8. of this document.

Owner’s building and rental expenses came to 102.4 million euros, an Tax expense for the year came to 11.7 million euros, up by 38.5 million
increase of 3.8 million euros or 3.9%. This increase was due to higher euros:
maintenance costs on the holdings and also takes into account the •• tax payable amounted to 23.7 million euros, versus 26.3 million euros
improvement in the cost of the client risk. one year earlier. The previous year included a charge related to a one-off
marking to market of asset values in Italy for 7.1 million euros;
Payroll expense for the year came to 104.6 million euros, versus •• there was a deferred tax credit of 12.0 million euros in 2010, compared
103.7 million euros for the previous year. On December 31, 2010, the with 53.1 million euros for fiscal year 2009. The previous year included
Company’s staffing level was 1 495 people, down by 24 over the previ- a tax credit of 29.5 million euros in Italy following the reappraisal of asset
ous year. values.

Other operating expenses were up by 4.3% over one year, reaching Consolidated net income for the year was 182.4 million euros, a decline
39.4 million euros. They include, among other things, the rents paid for of 12.1% over one year.
an operating property that the Group leases since it sold the building
on September 30, 2009. Minority share of net income was 57.9 million euros, primarily generated
by the Shopping Center segment, bringing net income group share for
The operating ratio for the year (total expenses/net operating income) 2010 to 124.6 million euros, a decline of 23.1% versus 2009.
was 15.5%, versus 15.6% for the year ended December 31, 2009.

EBITDA for 2010 totaled 782.3 million euros, an increase of 2.5% com-
pared with December 31, 2009.

Depreciation and amortization expense on real estate assets came to

417.4 million euros, up by 43.2 million euros compared to the year ended
December 31, 2009. This increase includes an asset impairment allow-
ance of 131.7 million euros, up 11.9 million euros. Most of the increase
in depreciation and amortization expense on real estate (€30.2M) is attrib-
utable to growth in holdings.

Provisions for contingencies and losses for the year came to 0.9 million
euros, versus 4.4 million euros for the year ended December 31, 2009.

Proceeds from the sale of assets amounted to 125.5 million euros in

2010, versus 86.6 million euros in 2009. This line item includes the result
of the sale of the Douai–Flers-en-Escrebieux and Karl Johans Gate (Oslo)

88 | Klépierre – 2010 Annual report

4.2.2. Change in net current cash flow*
12/31/2010 12/31/2009 Change
Millions euros %
Total share
EBITDA – Shopping centers 728.8 696.8 32.1 4.6%
EBITDA – Offices 32.1 45.3 -13.3 -29.3%
EBITDA – Retail properties 42.9 40.7 2.2 5.3%
Corporate and shared expenses -21.5 -19.5 -1.9 9.9%
EBITDA 782.3 763.2 19.0 2.5%
Restatement payroll and deferred expenses 4.6 -1.0 5.6
Operating cash flow 786.9 762.2 24.7 3.2%
Financial result -297.0 -292.8 -4.2 1.4%
Restatement financial allowance 16.2 13.5 2.7 19.7%
Net current cash flow before taxes 506.0 483.0 23.1 4.8%
Share in equity method investees 1.7 1.8 -0.0 -1.9%
Current tax expenses -22.7 -17.3 -5.3 30.8%
Net current cash flow 485.1 467.4 17.7 3.8%
Group share
Operating cash flow (group share) 624.6 624.8 -0.1 0.0%
Net current cash flow group share 365.3 369.7 -4.3 -1.2%
Number of shares 186 738 812 185 999 445
Net current cash flow per share 1.96 1.99 -0.03 -1.6%
In millions of euros
Number of shares adjusted after payment of dividend in shares, in compliance with IAS 33.

Net current cash flow before taxes was 506.0 million euros for the year
ended December 31, 2010, an increase of 4.8% compared with the
previous year.

Calculated after tax, global net current cash flow for the year came to
485.1 million euros, an increase of 3.8%. Expressed in group share, it
was 365.3 million euros or 1.96 euro per share, a decline of 1.6%.

5. Outlook for 2011

•• Klépierre expects to record slightly increasing rents and at least stable
net current cash flow per share in 2011.
– The impact of index-linked rent adjustments will be slightly positive for
the portfolio (with no impact on shopping centers in France).
– The portfolio’s reversion potential remains positive.
– Amounts invested and disposals are expected to reach 500/600 mil-
lion and 200 million euros, respectively. Among them, the first develop-
ments to open for business will be Le Millénaire (Aubervilliers) and
Aqua Portimão (Portugal) as of April 2011. The acquisition by Klépierre
in January 2011 of a major retail park* in Italy, in Savignano (see sec-
tion entitled Events subsequent to year-end closing date) will also
contribute to the increase in rents.

Klépierre – 2010 Annual report | 89

 Business
for the year

Lease expiration schedule for the Shopping center segment, as of December 31, 2010

Country/Area ≤ 2011 2012 2013 2014 2015 2016 2017 2018 + Total
France 8.6% 9.6% 6.0% 6.6% 5.7% 9.7% 10.3% 43.4% 100.0%
Belgium 0.6% – 0.6% 69.4% 7.9% 4.4% 2.7% 14.4% 100.0%
France/Belgium 8.3% 9.3% 5.8% 8.9% 5.8% 9.5% 10.0% 42.4% 100.0%
Denmark – – – – – – – – –
Norway 19.7% 16.6% 22.3% 13.0% 17.3% 9.5% 1.5% 0.1% 100.0%
Sweden 6.6% 21.6% 19.3% 20.2% 14.8% 10.3% 2.9% 4.3% 100.0%
Scandinavia 14.4% 18.6% 21.1% 15.9% 16.3% 9.8% 2.1% 1.8% 100.0%
Italy 12.9% 11.7% 9.7% 10.3% 9.1% 11.9% 8.6% 25.9% 100.0%
Greece 2.2% 10.3% 0.5% 15.3% 4.7% 1.1% 4.1% 61.7% 100.0%
Italy/Greece 12.3% 11.6% 9.2% 10.6% 8.9% 11.2% 8.3% 28.0% 100.0%
Spain 17.2% 9.0% 8.2% 8.4% 7.9% 5.5% 4.1% 39.6% 100.0%
Portugal 3.7% 20.3% 18.0% 8.1% 22.0% 8.7% 1.6% 17.7% 100.0%
Iberia 14.9% 10.9% 9.9% 8.4% 10.3% 6.0% 3.7% 36.0% 100.0%
Hungary 12.2% 33.7% 6.9% 3.9% 25.9% 1.0% 11.3% 5.1% 100.0%
Poland 21.8% 12.7% 14.6% 12.5% 30.3% 1.4% 2.0% 4.6% 100.0%
Czech Republic & Slovakia 25.8% 22.8% 8.0% 6.2% 14.2% 8.7% 3.6% 10.7% 100.0%
Central Europe 19.1% 23.4% 9.9% 7.5% 24.5% 3.1% 6.0% 6.4% 100.0%
TOTAL 11.8% 12.8% 9.7% 10.1% 10.4% 8.8% 7.3% 29.1% 100.0%

Lease expiration schedule for the Retail segment – Klémurs, as of December 31, 2010

≤ 2011 2012 2013 2014 2015 2016 2017 2018 Total

1.4% 0.7% 2.0% 1.2% 53.7% 5.4% 5.4% 28.9% 100.0%

Lease expiration schedule for the Office segment, as of December 31, 2010

Years ≤ 2011 2012 2013 2014 2015 2016 2017+ Total

By date of the next exit option 10,8 5,3 11,2 0,4 0,0 0,1 0,6 28,4
As a percentage of the total 37.9% 18.7% 39.5% 1.3% 0.0% 0.5% 2.1% 100.0%
By end of lease date 6,8 3,1 8,1 3,1 0,6 2,8 4,0 28,4
As a percentage of the total 24.0% 10.8% 28.5% 10.9% 2.2% 9.7% 14.0% 100.0%
In millions of euros

•• The expirations for 2011 pertain mainly to the tenant Steria, which has
already indicated that it will vacate the premises it currently occupies in
the Camille Desmoulins building (17 038 sq.m., Issy-les-Moulineaux)
effective October 31, 2011.

90 | Klépierre – 2010 Annual report

6. Parent company earnings and distribution
Abridged earnings statement for the parent company Klépierre SA

12/31/2010 12/31/2009 Change

Millions euros %
Operating income 37.3 46.3 -9.0 -19.5%
Operating expenses -29.9 -27.2 -2.7 10.1%
Operating result 7.3 19.1 -11.7 -61.5%
Share of income from subsidiaries 192.6 182.2 10.4 5.7%
Financial result -150.5 159.4 -309.9 -194.5%
Pre-tax result 49.4 360.7 -311.2 -86.3%
Non-recurring result 71.9 37.2 34.7 93.2%
Corporate income tax -0.2 -1.8 1.5 -87.1%
Net income 121.1 396.1 -275.0 -69.4%
In millions of euros

•• Net income for Klépierre SA came to 121.1 million euros in 2010. Other •• The tax loss for the taxable segment was 27.5 million euros in 2010. The
than the change in results from operations, the decrease compared with mandatory distribution is 176.0 million euros after discharging the obli-
2009 is mainly attributable to the following factors: gation relative to capital gains on asset sales.
– the sharp decline in financial results, which includes capital gains on •• The Supervisory Board will recommend that the shareholders assembled
share disposals in 2009; or represented at the meeting on April 7, 2011 approve the payment
– the increase in non-recurring income, which includes the capital gains of a dividend in respect of 2010 of 1.35 euro per share, up by 8%
on the sale of office buildings at Marignan-Marbeuf (Paris 8th) and compared with the previous year. This distribution represents 68.9% of
Diderot (Paris 12th); net current cash flow* per share (versus 60.4% in 2009).
– the increase in the share of earnings from subsidiaries, which includes
the capital gains on the disposals of the Général-Leclerc building
(Levallois-Perret) and the Douai shopping center.

Klépierre – 2010 Annual report | 91

 Business
for the year

7. Nav (Net asset value*)

7.1. Appraisal of Group assets
7.1.1. Methodology

•• On December 31 and June 30 of each year, Klépierre adjusts the value •• Klépierre entrusts the task of appraising its real estate assets to various
of its net assets per share (NAV). The valuation method used entails experts. For the year ended December 31, 2010, these appraisals were
adding unrealized capital gains to the book value of consolidated share- carried out by the following appraisers:
holders’ equity. These unrealized gains reflect the difference between
independently appraised market values and the net values recorded in
the consolidated financial statements.

Appraisers Portfolios Number Valuation (1) % June report December report

of assets
France (incl. retail properties) 256 5 019 32.6% 53% summarized detailed and summarized
Italy 34 1 830 11.9% summarized detailed and summarized
Spain: KFE and KFV 37 709 4.6% summarized detailed and summarized
RCGE Czech Rep. and Slovakia 4 290 1.9% summarized detailed and summarized
Portugal 6 237 1.5% summarized detailed and summarized
Greece 5 83 0.5% summarized detailed and summarized
Hungary 4 57 0.4% summarized detailed and summarized
France: Progest, Scoo, Le Havre Coty, Odysseum 22 1 355 8.8% 17% summarized detailed and summarized
Poland 7 403 2.6% summarized detailed and summarized
Jones Lang LaSalle Spain: KFI 33 350 2.3% summarized detailed and summarized
Hungary 8 237 1.5% summarized detailed and summarized
Belgium 1 235 1.5% summarized detailed and summarized
DTZ Denmark 3 815 5.3% 15% summarized detailed and summarized
Norway 9 831 5.4% summarized detailed and summarized
Sweden 6 591 3.8% summarized detailed and summarized
Norway 8 853 5.5% 8% summarized detailed and summarized
NEWSEC
Sweden 3 315 2.0% summarized detailed and summarized
Auguste-Thouard Offices and retail properties 182 1 178 7.7% 8% summarized detailed and summarized
(1) Amounts include transfer duties, in millions of euros.

•• These appraisal assignments were conducted in accordance with the 7.1.2. Fees paid to appraisers
Code of Compliance for SIICs*, as well as with the Real Estate Appraisal
Guidelines (Charte de l’Expertise en évaluation Immobilière), the recom- •• Fees paid to appraisers are set prior to their property valuation work, on
mendations of the COB/CNC working group chaired by Mr. Barthès de a lump sum basis in accordance with the size and complexity of the
Ruyther, and the standards set forth by the RICS and the IVSC. assets being appraised, and independently of the appraised value of the
assets. They are presented in the table below:

Appraisers Appraisal fees Consulting fees

RCGE 1 206.6 –
Jones Lang LaSalle 530.2 166.8
Auguste-Thouard 298.4 –
DTZ 128.5 –
NEWSEC 62.8 –
TOTAL 2 226.5 166.8
In thousands of euros, excluding taxes.

92 | Klépierre – 2010 Annual report

7.1.3. Results of appraisals pending construction, and Molndal and Lackeraren (Sweden),
Hovlandsbanen (Norway), and the Field’s extensions (Denmark). Projects
The value of Klépierre’s real estate holdings excluding transfer duties under development represent 5.3% of the Group’s holdings.
was 15.1 billion euros total share and 11.9 billion euros group share at
year-end 2010. Total share, the shopping centers accounted for 92.5%, The Corvin center, which opened in October 2010, will be subject to an
the retail properties for 3.9% and the office properties for 3.6%. Group external appraisal for the first time on June 30, 2011.
share, these percentages are 91.3%, 4.2% and 4.5% respectively.
Assets purchased in the course of the 2nd half of 2010 are carried at
Pursuant to a change in the scope of application of IAS 40, since their acquisition price.
June 30, 2009 the Group appraises its committed development projects
using appraisals established by in-house teams. In particular, this On a constant portfolio and exchange rate basis, the change in the
change in scope involves the following projects: Aqua Portimão value of assets over 6 months is +2.7% for the shopping center seg-
(Portugal), Aubervilliers (France) and the renovation project involving ment, +5.9% for the retail segment, and 0.3% for the office segment.
Gare Saint-Lazare in Paris. Projects that are not appraised are carried Over twelve months, the increases are 4.4% for shopping centers, 8.7%
at their cost price. These are mainly projects that are under study or for retail properties and 0.9% for office properties.

Value of holdings, total share (excluding transfer duties)

12/31/2010 In % of total Change over six months Change over twelve months
holdings 06/30/2010 Current Constant 12/31/2009 Current Constant
portfolio basis* portfolio basis* (1) portfolio basis portfolio basis(1)
France 6 197 41.0% 5 884 5.3% 4.6% 5 656 9.6% 7.0%
Belgium 235 1.6% 219 7.2% 7.2% 208 12.8% 12.8%
France/Belgium 6 432 42.6% 6 103 5.4% 4.7% 5 865 9.7% 7.3%
Norway 1 460 9.7% 1 416 3.1% 2.0% 1 306 11.8% 7.5%
Sweden 1 087 7.2% 943 15.3% 2.7% 913 19.1% 3.0%
Denmark 844 5.6% 842 0.3% 1.2% 837 0.9% 2.7%
Scandinavia 3 392 22.4% 3 201 6.0% 1.9% 3 056 11.0% 5.1%
Italy 1 638 10.8% 1 609 1.8% 0.6% 1 575 4.0% 1.9%
Greece 83 0.5% 89 -6.6% -6.6% 95 -12.7% -12.7%
Italy/Greece 1 721 11.4% 1 698 1.4% 0.2% 1 671 3.0% 1.1%
Spain 1 066 7.1% 1 059 0.6% 0.6% 1 063 0.3% 0.3%
Portugal 272 1.8% 265 2.8% -1.3% 265 2.6% -5.3%
Iberia 1 338 8.9% 1 324 1.0% 0.2% 1 328 0.7% -0.8%
Poland 401 2.7% 383 4.5% 4.5% 387 3.5% 3.5%
Hungary 405 2.7% 451 -10.1% -2.4% 448 -9.4% -6.2%
Czech Republic 275 1.8% 268 2.9% 2.9% 273 0.9% 0.9%
Slovakia 15 0.1% 15 -4.5% -4.5% 16 -9.8% -9.8%
Central Europe 1 096 7.3% 1 117 -1.9% 1.8% 1 124 -2.5% -0.5%
TOTAL SHOPPING CENTERS 13 979 92.5% 13 443 4.0% 2.7% 13 043 7.2% 4.4%
TOTAL RETAIL ASSETS 597 3.9% 588 1.5% 5.9% 584 2.2% 8.7%
TOTAL OFFICES 539 3.6% 712 -24.3% 0.3% 732 -26.4% 0.9%
TOTAL HOLDINGS 15 114 100.0% 14 742 2.5% 2.8% 14 359 5.3% 4.4%
In millions of euros
(1) For Scandinavia, change in indicated on a constant portfolio and forex basis.

Klépierre – 2010 Annual report | 93

 Business
for the year

Value of holdings, group share (excluding transfer duties)

12/31/2010 In % of total Change over six months Change over twelve months
holdings 06/30/2010 Current Constant 12/31/2009 Current Constant
portfolio basis* portfolio basis* (1) portfolio basis portfolio basis(1)
France 4 978 41.7% 4 729 5.3% 4.5% 4 553 9.3% 6.7%
Belgium 235 2.0% 219 7.2% 7.2% 208 12.8% 12.8%
France/Belgium 5 213 43.7% 4 949 5.3% 4.6% 4 762 9.5% 7.0%
Norway 819 6.9% 794 3.1% 2.0% 733 11.8% 7.5%
Sweden 610 5.1% 529 15.3% 2.7% 512 19.1% 3.0%
Denmark 474 4.0% 472 0.3% 1.2% 470 0.9% 2.7%
Scandinavia 1 903 15.9% 1 796 6.0% 1.9% 1 714 11.0% 5.1%
Italy 1 414 11.8% 1 390 1.7% 0.5% 1 362 3.9% 1.9%
Greece 71 0.6% 76 -6.5% -6.5% 82 -12.7% -12.7%
Italy/Greece 1 486 12.4% 1 467 1.3% 0.2% 1 444 2.9% 1.0%
Spain 928 7.8% 922 0.7% 0.7% 925 0.4% 0.4%
Portugal 272 2.3% 265 2.8% -1.3% 265 2.6% -5.3%
Iberia 1 200 10.1% 1 186 1.2% 0.3% 1 190 0.9% -0.8%
Poland 401 3.4% 383 4.5% 4.5% 387 3.5% 3.5%
Hungary 405 3.4% 451 -10.1% -2.4% 448 -9.4% -6.2%
Czech Republic 275 2.3% 268 2.9% 2.9% 273 0.9% 0.9%
Slovakia 15 0.1% 15 -4.5% -4.5% 16 -9.8% -9.8%
Central Europe 1 096 9.2% 1 117 -1.9% 1.8% 1 124 -2.5% -0.5%
TOTAL SHOPPING CENTERS 10 898 91.3% 10 515 3.6% 2.7% 10 234 6.5% 4.0%
TOTAL RETAIL ASSETS 502 4.2% 494 1.5% 5.9% 491 2.2% 8.7%
TOTAL OFFICES 539 4.5% 712 -24.3% 0.3% 732 -26.4% 0.9%
TOTAL HOLDINGS 11 939 100.0% 11 721 1.9% 2.7% 11 457 4.2% 4.1%
In millions of euros
(1) For Scandinavia, change in indicated on a constant portfolio and forex basis.

Shopping centers External growth added 195 million euros to the value of this portfolio on
a current basis over 12 months.
The value transfer duties excluded of the shopping center* portfolio
was 13 979 million euros (10 898 million euros group share) at year end, The change is attributable for the most part to developments and acqui-
an increase of 536 million euros compared with June 30, 2010 (+4.0%). sitions in France (+e217M), in Italy (+e33M), in Portugal (+e20M) and in
Over 12 months, the portfolio increased in value by 936 million euros Scandinavia (+e83M). Significant changes concern:
(+7.2%). •• in France, advancement of the Aubervilliers project and acquisition of
Val d’Europe land;
56 facilities and projects have a unit value that exceeds 75 million euros, •• in Italy, extension of the Pescara Nord project;
representing 61.2% of the estimated total value of this portfolio; 101 •• in Portugal, advancement of the Aqua Portimão project;
have a unit value of between 15 million and 75 million euros (26.8%); •• in Sweden, advancement of the Emporia project.
116 have a unit value that is below 15 million euros (12.0%).
On a constant portfolio and exchange rate basis, the value of the shop- This change was offset in France by the disposal of the Douai–Flers-
ping center holdings increased by 2.7% (+e336M) over 6 months, due en-Escrebieux center and in Norway by the disposal of the Karl Johans
to the decline in yields (for 2.5%) and higher income (for 0.2%). Over Gate asset.
one year, the increase is 4.4% (+e527M), due to lower yields (for 3.5%)
and higher income (for 0.9%). Average yield, excluding transfer duties, of the portfolio was 6.4%,
down by 20 basis points compared with June 30, 2010 (6.6%) and by
The change on a current portfolio basis includes the exchange rate 30 basis points since December 31, 2009 (6.7%).
impact related to the appreciation of Scandinavian currencies since
December 31, 2009 (for e214M).

94 | Klépierre – 2010 Annual report

Change in yields (excluding transfer duties), Average yield, excluding transfer duties, of the portfolio was 7.1% on
shopping center portfolio December 31, 2010, compared with 7.4% on June 30, 2010. It has
7.7% 7.8% 7.5% 7.7% 7.6% 7.3%
improved significantly (-40 bps) compared with December 31, 2009 (7.5%).

12/31/2009: 6.7%
6.4% 6.3% 6.0% 6.4% 6.3% 6.1% 6.7% 6.8% 6.6%
06/30/2010: 6.6% Offices
12/31/2010: 6.4%
The value of the office portfolio excluding transfer duties was
539.0 million euros at year-end 2010.

4 assets in the portfolio have an estimated unit value that exceeds

75 million euros, representing 61.3% of the total estimated value of
France/ Scandinavia Italy/ Iberia Central office holdings; 8 have a unit value that is estimated to be less than
Belgium Greece Europe
50 million euros.
12/31/2009 06/30/2010 12/31/2010

On a constant portfolio basis* , the value of office assets total share

Retail-Klémurs increased by 0.3% over 6 months (+0.9% over 12 months), reflecting
lower yields (for 2.0%) and lower income (for -1.7%).
The value transfer duties excluded of the retail property portfolio was
596.7 million euros (€501.9M group share), an increase of 1.5% over On a current portfolio basis, the change in value is -24.3% over
6 months (+2.2% over 12 months). 6 months (-26.4% over 12 months). This decrease includes the impact
of the sale of the Général-Leclerc building (Levallois-Perret) in the
On a constant portfolio basis, the value increased by 5.9% (€33.5M) 1st half of 2010 and the sale of the Marignan-Marbeuf (Paris 8th) and
over 6 months, and by 8.7% over 12 months. This change reflects lower 5 bis Diderot (Paris 12th) buildings in the 2nd half of 2010.
yields (for 5.8%) and higher income (for 2.8%).
The yield of the portfolio, transfer duties excluded, was 6.5% on
On a current portfolio basis, the change in the value of the holdings December 31, 2010, a decline of 30 basis points versus June 30, 2010
reflects the sale in the 1st half of 2010 of storefront properties in Rouen (6.8%) and a decline of 60 basis points versus December 31, 2009 (7.1%).
and, in the 2nd half of 2010, of the Castorama store property on Rue de
Flandre (Paris 19th).

7.2. Change in EPRA NNNAV per share

12/31/2010 06/30/2010 12/31/2009 Change over 6 months Change over 12 months
Consolidated shareholders’ equity (group share) 2 398 2 206 2 269 192 8.7% 129 5.7%
+ Unrealized capital gains on holdings (duties included) 3 084 2 877 2 724 206 7.2% 359 13.2%
- Fair value of financial instruments 221 308 198
- Differed tax on asset values on the balance sheet 327 336 341 -8 -2.5% -14 -4.0%
Reconstitution NAV 6 030 5 727 5 532 303 5.3% 497 9.0%
- Duties and fees on the sale of assets -328 -338 -330 10 -2.9% 1 -0.4%
EPRA NAV 5 701 5 389 5 203 313 5.8% 499 9.6%
- Effective taxes on capital gains -214 -214 -201 0 -0.1% -12 6.2%
+ Fair value of financial instruments -221 -308 -198
+ Fair value of fixed-rate debt -17 -13 -1 -4 28.1% -15
Liquidative NAV (EPRA NNNAV) 5 250 4 853 4 802 396 8.2% 448 9.3%
Number of shares, end of period (after dilutive effect) 186 768 082 186 683 885 186 767 318
Per share (in euros)
Reconstitution NAV per share 32,3 30,7 29,6 1,6 5.2% 2,7 9.0%
EPRA NAV per share 30,5 28,9 27,9 1,7 5.8% 2,7 9.6%
Liquidative NAV (EPRA NNNAV) per share 28,1 26,0 25,7 2,1 8.1% 2,4 9.3%
In millions of euros
Number of shares adjusted after the payment of the dividend in shares, in compliance with IAS 33.

EPRA NNNAV(6) was 28.1 euros per share, versus 26.0 euros on June 30, This increase of 2.4 euros per share over one year is attributable to the
2010 and 25.7 euros on December 31, 2009 (+9.3%). increase in the value of the holdings (for 0.6 euro) and to the increase in net
current cash flow* for the year ended (for 2.0 euros). The remaining differ-
ence (-0.2 euro) reflects the impact of the marking to market of financial
instruments and the distribution for the period.

(6) Net asset value excluding transfer duties after unrealized capital gains and marketing to market of financial instruments.

Klépierre – 2010 Annual report | 95

 Business
for the year

8. Financial policy •• Thanks to these transactions, the Group had 1 373 million euros in
unused credit lines on December 31, 2010, of which 38 million euros at
8.1. Financial resources the level of Steen & Strøm.

8.1.1. Change in net debt 8.1.3. Debt structure and duration

•• Consolidated net debt of Klépierre on December 31, 2010 was •• The bond issues completed in 2010 enabled the Group to diversify and
7 325 million euros, compared with 7 279 million euros on December 31, rebalance its sources of financing more in favor of the bond market,
2009 (+€46M). which account for 30% of its resources on December 31, 2010. The
Group also increased its commercial paper outstanding, which equaled
•• Excluding the forex impact, net debt declined by 76 millions euros: 641 million euros on December 31, 2010 (including e141M in Norway).
– the principal financing requirements of the year were generated by
investments (€430.9M) as well as by the dividend payout in respect •• The breakdown by currency remains consistent with the geographic
of fiscal year 2009 (€223.9M); breakdown in the Group’s portfolio of assets.
– resources were divided between the capital increase that followed the
proposed payment of the dividend in the form of shares (€189.5M),
asset disposals (€320.1M) and the free cash flow for the year; Klépierre Group’s financing breakdown
– the translation into euros of Steen & Strøm’s net debt generated a by type of ressource
forex impact that added 122 million euros to the increase in consoli- (Utilizations)
dated net debt. This development reflects the appreciation of
Financial leases
Scandinavian currencies against the euro, a phenomenon that also 3%
increased the value of the assets of Steen & Strøm expressed in euros. Mortgage loans
Syndicated loans
16% 31%
8.1.2. Available resources Commercial paper
9%
•• In the interest of reinforcing and diversifying its sources of financing after
the maturity of 300 million euros in bank borrowings in March 2010 and Bonds Bilateral facilities
30% 11%
just prior to a major refinancing in 2011 (notably a €600M bond),
Klépierre took advantage of satisfactory bond market conditions in
April 2010 to raise 900 million euros:
– a 7-year benchmark issue of 700 million euros was completed, with
a credit margin of 125 bps above the swap rate. Nearly three times Klépierre Group’s financing
oversubscribed, the issue was placed with buy and hold investors by currency
across Europe, with strong participation from French investment funds (Utilizations)
and insurance companies, as well as from institutional investors in the
DKK
United Kingdom, Germany and Switzerland; 9%
– concomitantly, Klépierre completed a 10-year private placement for
200 million euros, with a margin of 135 bps above the swap rate; SEK
7%
– these transactions were carried out under the Euro Medium Term
NOK
Notes (EMTN) program signed on April 1, 2010, which puts the Group 14%
in a good position to rapidly seize on any opportunities in the bond EUR
market in the years ahead; 70%

– the funds raised were used to reduce the amounts drawn from bank
credit lines and also to reduce by 200 million euros the maximum
amount authorized under the bilateral credit agreement that was set
up in October 2008. •• On December 31, 2010, the average duration of the Group’s debt was
5.5 years.
•• In parallel, Steen & Strøm took advantage of favorable conditions in the
Norwegian bond market in the 4th quarter of 2010 to raise 600 million
Norwegian krone with a 3-year maturity.

96 | Klépierre – 2010 Annual report

 Klépierre group’s financing by due date Interest rate risk hedge profile
Authorizations (in eM) 0 Annual average – swaps and fixed rate debt (in eM)

1500 6 000
3.8% 3.9% 3.7% 3.7% 3.6% 3.4% 3.0%
1200 5 000

4 000
900
3 000
600
2 000

300
1 000

0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 + 2011 2012 2013 2014 2015 2016 2017 2018 2019
Klépierre (EUR) Steen & Strom Klépierre (EUR) Steen & Strom
Average fixed holding (rate excluding credit spread)

8.1.4. Reinforcement of shareholders’ equity 8.3. Cost of debt

•• The proposed payout of shares in lieu of cash for the dividend payable •• The average cost of debt over the year for Klépierre – ratio of interest
in respect of 2009 met with a positive response from Klépierre share- expense to average outstanding financing debt – was stable (4.47%
holders: 84.6% of voting rights were exercised in favor of a payment in versus 4.45% for 2009).
shares. As a result, the Group’s shareholders’ equity was bolstered by – The decrease in short-term interest rates partially offset the full-year
189.5 million euros on May 14, 2010. impact of the bank renegotiation that was carried out in June 2009,
•• As a reminder, the subscription price for the shares was set at as well as the cost of carry on April 2010 bond issues (non-utilization
24.69 euros per share, or 90% of the average quoted price for the fees of temporarily undrawn bank credit lines).
shares over the twenty trading days that preceded the shareholders’
meeting, less the amount of the dividend. •• Based on the financial structure and prevailing rates on December 31,
2010, the Group’s cost of debt would rise by 0.37% in the event of a
8.2. Interest rate hedging 1% rise in rates, which would negatively impact the cost of debt by
around 27.4 million euros full year.
•• Klépierre took advantage of a positive interest rate environment to – It should be noted, however, that this same change in rates would
strengthen its interest rate hedging portfolio, in terms of both amount have a positive impact of around 243 million euros on the fair market
and duration, over the course of 2010: value of financial instruments and hence on the Company’s net asset
– while the bond issues completed in April were swapped in order to value (NAV): indeed the fair market value of financial instruments is
avoid increasing the proportion of fixed rate debt, which was already included in the calculation of NAV.
adequate in 2010, several swaps with forward start dates in 2011,
2012 and 2015 were purchased for a total notional amount of
1 300 million euros;
– Steen & Strøm also strengthened its portfolio, contracting 1 375 million
NOK over the year (around €176.5M), and 1 700 million SEK (around
€189.5M);
– Klépierre also took advantage of tensions on short-term rates at the
end of the year to cancel 650 million euros in swaps which residual
maturity was less than one year. These cancellations bring the hedged
rate to 63% on December 31, 2010, but the portfolio was globally
strengthened in the course of 2010.

•• Taking these transactions into account, the average duration of the

Group’s hedges is 4.6 years, for an average fixed rate of 3.9% (excluding
credit margin).

Klépierre – 2010 Annual report | 97

 Business
for the year

8.4. Financial ratios and ratings

•• For the year ended December 31, 2010, all of the Group’s ratios remain •• Klépierre’s financial rating from Standard & Poor’s remains BBB+/A2
within the thresholds it has committed to under its financing (long- and short-term ratings, respectively), with a stable outlook.
arrangements.

Financing Ratios/covenants Limit (1) 12/31/2010 12/31/2009

Net debt/Value of holdings (“Loan to Value”) ≤ 63% (2) 47.2% 49.3%
EBITDA/Net interest expenses ≥ 1.9 (2) 2.6 2.6
Syndicated loans and bilateral
Secured debt/Value of holdings ≤ 20% 15% 17%
loans of Klépierre SA
Value of holdings, group share ≥ e6Bn e12.3Bn e11.8Bn
Ratio of financings of subsidiaries (excluding Steen & Strøm) over total gross financial debt ≤ 30% 11% 9%
Bond issues of Klépierre SA Secured debt/Revalued Net Asset Value (3) ≤ 50% 8.4% 29.1%
(1) Most constraining limit.
(2) 60% and 2 respectively from June 30, 2011.
(3) NAV* including transfer duties after underlying tax impact.

– Around 29.4% of Steen & Strøm’s debt is subject to a financial cov- this debt and also that the diversification the Group gets from the
enant that requires shareholders’ equity of at least 20% of NAV. On financial autonomy of Steen & Strøm in its markets is a positive factor.
December 31, 2010, this ratio was 27.7%. In this sense, and in compliance with the documentation of its bond
– In most of Klépierre’s credit agreements, ratios limiting the proportion issues, the bond covenant of Klépierre has been aligned in 2010 with
of secured debt exclude the mortgage debt of Steen & Strøm from the bank practice (excluding Steen & Strøm), which explains most of
the calculation, considering that there is no recourse to Klépierre on the change as compared to 2009.

9. Human resources
A resolutely European company The use of temporary manpower in 2010, while it rose significantly over
2009, remains limited. The monthly full-time equivalent level for 2010
Present in 13 countries on the European continent, the Klépierre Group was 18.9 temporary workers on average in Europe, which is equal to
has 1 495 employees, 62% of whom work outside of France. Klépierre 1.3% of the total workforce. The absentee rate for the year was just
is a young group (the average age of its workforce is 40.5 years old) 1.9% (excluding maternity leave).
and one in which female employees are in the majority (54.4%). Women
also hold a significant number of management positions, since 40.5% Personalized staff management,
of Klépierre’s managers are women. a source of motivation and loyalty
Overall, the Group’s workforce declined slightly in 2010 (-1.6%). More than 680 career interviews have been conducted in the past two
At the same time, the year 2010 saw a significant level of turnover years, allowing Human Resources and management to get to know their
(228 new hires on both open-ended and fixed-term contracts, and staff better and engage in a constructive conversation on career aspira-
252 departures from the Group), which reflect different contexts from tions within the Group. In-house promotion allowed 120 employees to
one country to the next: In both France and Italy, the number of new change jobs within the Group in 2010.
hires increased; the labor market in Central Europe was markedly slower
and that in Iberian countries was flat. In support of career path development, training and development remain
a key component of employee management. In 2010, more than 78%
Hiring continued in 2010, with a total of 146 new employees joining the of all Group employees completed at least one training program.
group under open-ended contracts and 82 under fixed-term agree- SégéCampus, the Group’s corporate university, continues to provide
ments. The Group’s growing commitment to the issue of diversity was training for Klépierre employees in relevant areas and hosted around
reflected in its new hires: among the newly hired, 51% are women, 6.6% 900 interns in 2010. Also in 2010, 11 new training modules were
are over the age of 50, and 2.6% are disabled workers. As for the newly released, on themes as varied as diversity, marketing strategy and
hired under open-ended agreements, 23% involve transformations of finance, and 50 employees from outside France took part in training at
at will arrangements (outside suppliers, temps, and those hired under the head office. Cross-business training (office tools, legal develop-
fixed-term contracts). ments, etc.), language training, managerial training and soft skills train-
ing were also offered last year.

98 | Klépierre – 2010 Annual report

Professional evaluations, conducted annually by managers, are oppor- 1.2% in 2010. This agreement also calls for the distribution of allocated
tunities for constructive dialogue that support the wage adjustment pro- funds set aside to reduce the wage gap based on gender. This measure
cess. In 2010, global wages increased by 2% as part of individual concerned 5 people in 2010. For the first time, this agreement also
performance bonuses. In addition, 64% of all employees received vari- sought to reduce the wage gap between employees of any gender
able pay of up to 30% of their annual salary for those whose role is occupying positions of equal responsibility (10 employees).
strongly sales oriented (shopping center managers, leasing agents,
lease negotiators, etc.). In addition, 170 employees (31% from foreign A new profit-sharing agreement was also signed in June 2010, for years
affiliates) were able to take advantage of Klépierre stock options in 2010. 2010, 2011 and 2012, based on an indicator of the collective perfor-
mance of the company, pending length of service requirements.
The effort to detect talent was carried out in all countries as part of the
annual update of the succession plan, and individual interviews were In addition, employee agreements in place allow for the payment of
carried out during visits by the Group HR director to local entities with bonuses and profit-sharing agreements, as well as employer participa-
the objective to get a more European vision of the employees. The tion in savings programs (PERCO and others) and participation in
Executive committee is also monitoring these high potential employees BNP Paribas capital increases for employees.
via performance reviews, succession planning, mobility committees and
stock-options allotments. Last but not least, a company-wide agreement related to the mutual
insurance plan was signed, and a new CHSCT(7) was elected by eligible
France is the only country that has personnel representatives. In France, voters from the company wide committee and personnel delegates.
Klépierre signed an agreement that led to a general wage increase of

10. Other information

10.1. Outcome of the 2010 share buyback program
(data provided under the terms of article L. 225-211 of the French Commercial Code)

During 2010 as a whole, 2,890,621 shares were bought back at an At December 31, 2010, Klépierre held 2,880,158 of its own shares (directly
average price per share of 26.13 euros, and 2,886,698 shares were or indirectly), representing a total value of 75.3 million euros on the basis
sold at an average price per share of 26.14 euros. of the average purchase price, and a face value of 4.0 million euros.

Liquidity Existing stock option plan Future stock External Total

Plan 2006 Plan 2007 Plan 2009 Plan 2010 options growth
Position at December 31, 2009 193 495 563 093 420 536 481 000 0 58 789 1 164 010 2 880 923
Stock option plan allocation – – – – 493 000 -493 000 – –
Stock option plan adjustements (1) -4 500 -6 002 -19 500 -4 500 1 198 512 -1 164 010 –
Options exercised during the year (2) -4 688 -4 688
Purchased 2 890 621 – – – – – – 2 890 621
Sold -2 886 698 – – – – – – -2 886 698
Position at December 31, 2010 197 418 558 593 414 534 456 812 488 500 764 301 – 2 880 158
As a percentage of share capital 0.10% 0.29% 0.22% 0.24% 0.26% 0.40% 0.00% 1.58%
(189 648 240 actions)
In number of treasury shares
(1) Updating of the number of beneficiaries to reflect employee turnover.
(2) Exceptional exercise following the death of a beneficiary.

(7) Comité hygiène sécurité et conditions de travail: Health, Safety, and Workplace Conditions Committee.

Klépierre – 2010 Annual report | 99

 Business
for the year

10.2. 5-fiscal year financial summary

(data provided under the terms of article R. 225-102 of the French Commercial Code)

Indicators 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006

Capital at year-end
Share capital 265 507 536 (1) 254 761 023 (2) 232 700 203 (3) 193 889 761 184 656 916
Number of existing ordinary shares 189 648 240 (1) 181 972 159 (2) 166 214 431 (3) 138 492 687 46 164 229
Operations and income for the fiscal years
Pre-tax revenue 33 082 883 44 666 344 49 093 264 45 808 719 49 178 753
Earnings before tax, employee profit-sharing, depreciation, amortization and provisions 259 470 314 446 756 018 219 551 284 316 842 226 227 810 270
Corporate income tax 229 379 1 774 181 -8 077 108 245 762 15 316 256
Earnings after tax, employee profit-sharing, depreciation, amortization and provisions 121 138 449 396 113 665 172 937 402 300 872 009 198 465 416
Dividends paid (4) 256 025 124 227 465 199 207 768 039 172 115 859 147 725 533
Earnings per share (5)
Earnings before tax, employee profit-sharing, depreciation, amortization and provisions 1.37 2.46 1.32 2.29 4.60
Earnings after tax, employee profit-sharing, depreciation, amortization and provisions 0.64 2.18 1.04 2.17 4.30
Net dividend per share 1.35 (6) 1.25 1.25 1.25 3.20
Personnel
Average labor force employed during the fiscal year, total payroll and employee benefits Nil
In euros
(1) Creation of 7,676,081 shares on May 14, 2010 following option to receive dividend payment in shares.
(2) Creation of 15,757,728 shares on May 15, 2009 following option to receive dividend payment in shares.
(3) Creation of 3,976,826 shares on May 7, 2008 following option to receive dividend payment in shares and of 23,744,918 shares on December 2, 2008 following capital increase.
(4) Does not incorporate the cancellation of dividends on treasury stock on the pay date.
(5) 2006 data has not been restated to reflect the 3-for-1 stock split of September 3, 2007.
(6) Submitted to a vote of shareholders at their general meeting on April 7, 2011.

10.3. Acquisition of equity holdings

and movements in equity securities
impacting the corporate financial statements
of Klépierre SA
No acquisition of equity holdings, according article L. 233-6 of the
French Commercial Code, occurred during the 2010 fiscal year.

10.4. Average supplier payment period

(data provided under the terms of article L. 441-6-1
of the French Commercial Code)

On average, suppliers are paid approximately thirty days from the billing
date. At December 31, 2010, suppliers were owed 14,248.33 euros for
payment no later than January 31, 2011

100 | Klépierre – 2010 Annual report

11. Events subsequent to year-end
closing date

11.1. Acquisition of a retail park at Savignano

(Rimini, Italy)
•• On January 20, 2011, Klépierre announced its intention to buy from
Pradera Europe a retail park* in Savignano (Rimini, Italy) for a total of
69.2 million euros, transfer duties included, producing annual net rents
of 4.9 million euros.
– Offering retail space of 39 537 sq.m. GLA*, this property complex is
located in the immediate vicinity of the Romagna Center shopping cen-
ter*. Co-owned by Klépierre (71.3%) and its partner Finiper (28.7%),
this center features an IPER hypermarket* and a 58-stores mall
(33 000 sq.m. GLA). It saw its tenants sales grow by 8.2% in 2010.
– It enjoys excellent access via the freeway and boasts major retailers
such as Decathlon, Piazza Italia, Scarpe&Scarpe, Co-Import as well
as a UGC cinema complex. The immediate vicinity of a Leroy-Merlin
contributes to the appeal of this dominant Emilio-Romagna regional
site.
•• With this transaction, Klépierre reinforces its hold on this regional retail
hub, and that is located in the heart of a steadily growing 270 000 inhab-
itants catchment area*. The population nearly triples during the summer
period.

11.2. Bond issue

On January 20, 2011, Klépierre increased by 50 million euros its private
placement due in April 2020 and initially issued in April 2010, bringing
the total borrowing to 250 million euros.
– This transaction was carried out in the context of the Euro Medium
Term Notes (EMTN) program signed on April 1, 2010.

For more information,

go to the Financing
section of the website:
www.klepierre.com

To the best of management’s knowledge, no other events have occurred

between the balance sheet closing date and the date of this report that
would have a material impact on the assessment of Klépierre’s financial
condition and position compared with the data presented in this report.

Klépierre – 2010 Annual report | 101

 Risk factors
103 1. Risks related to Klépierre strategy and activities
105 2. Risks related to Klépierre’s financing policy
and financial activities
107 3. Legal, tax and regulatory risks
108 4. Risks related to subsidiary companies
108 5. Environmental risks
109 6. Risks related to Klépierre’s shareholding base

102 | Klépierre – 2010 Annual report

Risk factors
1. Risks related to Klépierre 1.2. Risks related to the real estate market
strategy and activities
Klépierre may not always execute its investments and divestments at
1.1. Risks related to the economic environment the most opportune time because of the cyclicality of the real estate
sector. In overall terms, a downturn in the commercial real estate market
Since the majority of the Klépierre real estate asset portfolio comprises (particularly shopping centers, but also offices to a lesser degree) could
shopping centers, changes in the key macroeconomic indicators of the have a negative effect on the Company’s investment policy and disposal
countries in which the Group operates are likely to impact its rental policy, as well as on the development of new assets, the value of its
income and real estate portfolio value, as well as shape its investment asset portfolio, the conduct of its business, its financial position, its
and new asset development policy, and therefore, its growth prospects. operating profits and its future prospects.
The key factors likely to affect the Klépierre’s business are as follows: More specifically, a downturn in the real estate market could have a
•• the economic environment is likely to encourage or depress demand for significant negative effect on the conditions applying to Klépierre fund-
new retail space, and therefore affect the growth prospects of Klépierre’s ing, and therefore on the business itself. In particular:
shopping center portfolio (in terms of construction of new centers, exten- •• the Company plans to cover part of its funding needs by selling existing
sion of existing centers and acquisition or disposal transactions). It may real estate assets. In unfavorable market conditions, these assets could
also have a long-term impact on occupancy rates and the ability of ten- take longer to sell and achieve lower prices than would otherwise be the
ants to pay their rent; case, which could limit the flexibility of Klépierre in the way it implements
•• a downward trend or slower growth in the indices against which most its growth strategy;
rents payable under Klépierre leases are indexed may also compromise •• the Company is bound by certain covenants related to asset values
Klépierre lease income, as could any change in the indices used for this contained in the loan agreements signed by Klépierre and its subsidiary
purpose. The overall impact on all the leases in the Klépierre portfolio companies. Unfavorable market conditions could reduce the value of
could be reduced by the fact that indexation is country-specific (usually Group assets, making it more difficult for the company to comply with
against national inflation indices or, in the case of France, indices specific the financial ratios fixed under loan agreements. If Klépierre were to find
to commercial rents); itself unable to maintain these ratios, it could be obliged to sell assets
•• the ability of Klépierre to increase rents – or even to maintain them at or raise funds by issuing equity securities in order to repay the debt or
current levels depends, at the point of lease renewal, principally on its ask lenders to amend certain loan agreement provisions.
tenants’ current and forecast revenue levels, which in turn depends in
part on the state of the economy. Tenants’ sales trends also impact on By way of illustration, note that in 2010, the independent experts who
the variable element of rents; valued Klépierre’s real estate assets were of the opinion that the rates
•• any prolonged worsening of economic conditions could also result in an of return used for the appraisals could be reduced by an average of
increase in unlet units in Klépierre centers, which would have a negative 0.30%, considering the improved situation in the markets where the
effect on Group lease income and operating income as a direct result of Group is present. Accordingly, the value of Klépierre assets increased
the loss of lease income and the increase in non-billable expenses where 4.4% over one year, of which 3.6% from reducing rates of return and
vacant premises require repairs and renewals before they can be remar- 0.8% from rent increases. This improvement in asset values is one of
keted. These costs cannot be passed on to tenants; the elements that contributed to the reduction of the loan-to-value ratio
•• the profitability of Klépierre’s real estate letting activities depends on the (one of the Group’s main covenants) from 49.3% to 47.2% over one
solvency of its tenants. During periods of difficulty in the economy in year. As of December 31, 2010, a 1% appreciation in asset value would
particular, tenants may delay payment of rent, fail to pay rent at all, or cause a 0.4% increase in this ratio, all other things being equal.
encounter financial problems that would cause Klépierre to review ten-
ancy conditions downwards.

Klépierre – 2010 Annual report | 103

 Risk
factors

1.3. Risks related to the departure 1.6. Risks related to the marketing
or closure of flagship chains of developments
The Group’s shopping centers are often supported by one or more flag- Klépierre meets the cost of marketing the shopping malls developed by
ship chains with high levels of customer appeal (this is especially true the Company and other real estate assets it acquires, and therefore
in retailing). A decline in the attractiveness of such chains, any slowdown bears the risk of any marketing failures. Klépierre may encounter difficul-
or cessation in their businesses (particularly as a result of an unusually- ties in securing retail chain tenants that are both attractive to consumers
depressed economy), any failure to renew their leases, any termination and prepared to accept the level and structure of rents that the
of their leases and any delay in re-letting the vacated premises could Company offers. The retail real estate sector in which Klépierre operates
result in a decline in attractiveness of the shopping centers concerned. is a rapidly-changing business environment in which change is driven
The resulting decline in footfall could trigger lower sales volumes for by customer demand. The possibility cannot be ignored that at some
other stores, which would thus have a significant negative effect on the future time Klépierre may not be able to let its centers with a portfolio
total rental income from certain centers, and the financial position and of retailers sufficiently attractive to ensure high occupancy rates and the
growth prospects of the Group. opportunity to achieve high rental yields. This could in turn affect the
business volumes and operating results of Klépierre.
1.4. Risks related to the development
of new real estate assets 1.7. Risks related to the competitive
environment
Klépierre is involved in real estate development on its own account. This
business poses the following significant risks: The Company’s rental activities operate in a highly competitive market.
•• the cost of construction may turn out to be higher than initially estimated: Competition may arise as a result of current or future developments in
the construction phase may take longer than expected, technical difficul- the same market segment, other shopping centers, mail order, hard
ties or completion delays may be encountered due to the complexity of discount stores, e-commerce or the attraction exerted by certain retail
some projects, and the prices of construction materials may change chains located in competitor centers. More particularly, the development
adversely; by competitors of new shopping centers located close to existing
•• Klépierre investment (in new projects, renovations and extensions) is Klépierre centers and renovations or extensions to competitor shopping
subject to obtaining the necessary regulatory approvals, which may be centers may impact unfavorably the Company’s ability to let its retail
granted to Klépierre and/or its partners later than anticipated or even premises, and therefore on the rent levels it can charge and its forecast
refused; financial results.
•• Klépierre may require the consent of third parties, such as flagship As part of its portfolio business, the Company competes with many
chains, lenders or the associates involved in partnership developments, other players, some of which may have greater financial resources and
and these consents may not be given; larger portfolios. Having the financial leverage and ability to undertake
•• Klépierre may fail to obtain satisfactory funding for these projects; large-scale development projects from their own resources gives the
•• up-front costs (such as the costs of feasibility studies) cannot normally larger market players the opportunity to bid for development projects
be deferred or canceled in the event of projects being delayed or or asset acquisitions offering high profitability potential at prices that do
abandoned. not necessarily meet the investment criteria and acquisition objectives
The real estate development and investment risks referred to may then set by Klépierre, which may raise uncentainty on the Company’s busi-
result in investment projects being delayed, canceled or completed at ness forecasts.
a cost above that initially estimated in the budgets prepared by
Klépierre, which could in turn affect the Group’s financial results. 1.8. Risks related to the estimation
of asset values
1.5. Risks related to lease renewals
and the letting of real estate assets Klépierre calculates its revalued net asset value per share at
December 31 and June 30 every year. The measurement method used
When existing leases expire, Klépierre could find itself in the position of is as follows: calculation of the unrealized capital gains (or losses) held
being unable to let or re-let vacant units within an acceptable period in the Klépierre portfolio arising as a result of the difference between the
and/or under conditions as favorable as those offered by its current independently-appraised market value and the net book value shown
leases. The Company may not be able to attract sufficient tenants or in the consolidated financial statements, and adding these to (or deduct-
high-profile retail chains into its shopping centers, and may not be suc- ing them from) consolidated balance sheet equity. The independently-
cessful in maintaining occupancy rates and lease income at satisfactory appraised market value depends on the relationship between supply
levels, which could have an unfavorable effect on Klépierre revenue, and demand in the market, interest rates, the economic environment
operating income and profitability (see Business Activity for the year, and many other factors likely to vary significantly in the event of poor
sections 2. Rental business and 5. 2011 outlook). shopping center performance and/or a downturn in the economy.

104 | Klépierre – 2010 Annual report

The IFRS book value of the Company’s portfolio is based on the histori- put in place to facilitate such acquisitions, or be unable to acquire them
cal cost method. It is not immediately adjusted to reflect fluctuations in under satisfactory conditions, especially where the acquisitions are
market value, and cannot therefore reflect the effective realizable value made via a tender offer or in a period of significant economic volatility or
of the portfolio. The appraised value of its assets may not therefore uncertainty. The comprehensive due diligences conducted with the
reflect their realizable value in the event of disposal, which could have assistance of specialist external consultants prior to any acquisition have
a negative impact on the Group’s financial position and operating the specific goal of minimizing these risks;
results. •• where an acquisition is financed by the disposal of other assets, market
conditions or unfavorable deadlines could delay or compromise the abil-
The form and frequency of the expert appraisals conducted are detailed ity of Klépierre to complete the acquisition;
in Business Activity for the year (7. Revalued net assets); the valuation •• the assets acquired could contain hidden defects, such as subletting,
method is described in Note 9.1. Disclosures about the fair value model violations by tenants of applicable regulations (and particularly environ-
of the Notes to the consolidated financial statements. mental regulations) or a failure to comply with the construction plans
which would not be covered by the guarantees contained in the sale
The value of the Company’s real estate portfolio is sensitive to the main and purchase agreement. The due diligence process referred to above
appraiser assumptions (detailed in Note 9.1.). is also beneficial in this respect;
•• Klépierre could also encounter difficulties in incorporating a new acquisi-
1.9. Risks related to the international tion as a result of its impact on the Company’s internal organizational
business profile of Klépierre structure (IT, human resources). However, the possible impacts of any
acquisition on these aspects are systematically evaluated as part of the
Klépierre owns and operates shopping centers in 13 countries of acquisition decision-making process whenever necessary.
Continental Europe. Some of these countries may have risk profiles
higher than those of the Company’s major markets (France, Scandinavia,
Italy). The economic and political context of these countries may be less
stable, their regulatory frameworks and entry barriers may be less favor- 2. Risks related to Klépierre’s
able and business may be conducted in more volatile local currencies. financing policy and financial
The risks posed by individual countries, combined with a failure to man- activities
age those risks effectively, may have a negative impact on the operating
income and financial position of Klépierre. The distribution of the Group’s The exposure of Klépierre to the range of financial risks and the policy
business and performance by country are detailed in Business Activity it applies to manage and hedge against those risks are described in
for the year (2. Rental business). greater detail in Note 7. of the Notes to the Klépierre consolidated
financial statements and in the Report of the Chairman of the
1.10. Risks related to partners’ agreements Supervisory Board.

Klépierre owns a significant proportion of its shopping centers in France, 2.1. Liquidity risk
Spain and, to a lesser degree, Italy and Greece, under the terms of a
series of partnership agreements signed with CNP Assurances and Klépierre’s strategy depends on its ability to raise financial resources in
Écureuil Vie. These partnership agreements provide the usual protec- the form of debt or equity for the purpose of funding its investments
tions for minority partners: pre-emption right, joint exit right and the and acquisitions and refinancing maturing debts. Klépierre is committed
decision-making process applying to investment or divestment. The to distributing a significant proportion of its profits to its shareholders in
principal clauses of the partnership agreement are shown in Note 8.4. order to qualify for SIIC status. It therefore relies significantly on debt to
of the notes to the consolidated financial statements. fund its growth. This method of funding may not be available under
If the minority partners were to exercise their exit rights, and Klépierre advantageous conditions. This situation could arise in the event of a
was not willing to acquire their stake, with the result that those minority crisis in capital markets or debt markets, the occurrence of events
partners sell their investments to a third party at a price below that of impacting on the real estate sector, a reduction in the rating of Klépierre
the revalued net asset value of the underlying assets, Klépierre would debt, restrictions imposed by covenants included as part of loan con-
then be obliged to compensate them for any shortfall (which could go tracts, or any other change to the business, financial position or share-
up to 20% of the revalued net asset value of the underlying assets). In holding profile of Klépierre capable of influencing the perception that
the event of a significant shortfall, the obligation to make the corre- investors or lenders have of its creditworthiness or the attractiveness of
sponding payments in compensation could have a negative impact on investing in the Group.
Klépierre liquidity, and could require the Company to defer or cancel Klépierre is also exposed to the general risks associated with all types
other investments. of borrowing, and particularly the risk of operating cash flows falling to
a level at which the debt could not be serviced. If such a shortfall were
1.11. Acquisition risks to occur, the result could be an acceleration or early repayment and the
calling in of any secutity given, with the possibility of the assets con-
The acquisition of real estate assets or companies owning such assets cerned being seized.
is part of the Klépierre growth strategy. This policy poses the following
significant risks: The Group’s debt maturity schedule and the management of liquidity
•• Klépierre could overestimate the expected yield from these assets, and risk are treated in further detail in the notes to the consolidated financial
therefore acquire them at too high a price compared with the funding statements (Notes 4.15.and 7.2.).

Klépierre – 2010 Annual report | 105

 Risk
factors

Risks related to the covenants and other •• a significant rise in interest rates would impact negatively on the value
commitments contained in certain loan agreements of the Company’s portfolio inasmuch as the rates of yield applied by real
estate appraisers to the rentals of commercial buildings are determined
In addition to the usual covenants and commitments, the loan agree- partly on the basis of interest rates;
ments entered into by Klépierre also contain covenants obliging the •• Klépierre uses derivative instruments to hedge against interest rate risks,
Company to comply with certain specific financial ratios, as detailed in such as swaps, which enable it to pay a fixed or variable rate, respec-
Business Activity for the year (section 8. Financial Policy). If Klépierre tively, on a variable or fixed rate debt. Developing an interest rate risk
were to default on one of its financial commitments and be unable to management strategy is a complex task, and no strategy can protect
remedy that failure within the time allowed in the loan agreement, the the company fully against the risk posed by interest rate fluctuations.
lenders could demand early repayment of the loan or seize the assets The valuation of derivatives also varies depending on interest rate levels,
concerned where the loan is secured. Some loan agreements also con- is reflected in the Klépierre balance sheet, and may also impact on its
tain cross default clauses allowing lenders to demand early repayment income statement if hedging relationships are not sufficiently justified by
of outstanding amounts in the event that Klépierre fails to meet the documentation or if the existing hedges are only partly efficient.
commitments contained in other loan agreements (unless any shortcom-
ing is regularized within the period allowed). Consequently, any failure The use made by Klépierre of interest rate hedge contracts could
to meet its financial commitments could have a negative impact on the expose the Company to additional risks, and particularly the risk of
financial position of Klépierre, its earnings, its flexibility in conducting its failure of the counterparties to such contracts, which could in turn result
business and pursuing growth (for example, by impeding or preventing in payment delays or defaults that would impact negatively on the
certain acquisitions), its ability to meet its obligations, and its share results of Klépierre.
price.
Quantified illustrations of the effects of interest rate fluctuations before
Risks related to any downgrading and after hedging are given in Note 7.1. of the Notes to the consolidated
of the Klépierre debt rating financial statements.

Existing Klépierre debt rating is periodically reviewed by the rating 2.3. Exchange rate risk
agency Standard & Poor’s. At the time this report was prepared (and
throughout 2010), this agency rated the Company’s long-term debt as Klépierre conducts business activities in certain countries that have not
“BBB+, stable outlook”, and its short-term debt as “A-2, stable outlook”. joined the Eurozone (currently Czech Republic, Denmark, Hungary,
These ratings reflect the ability of Klépierre to repay its debts, as well Norway, Poland and Sweden). In these countries, Klépierre’s exposure
as its liquidity, key financial ratios, operational profile and general finan- to exchange rate risks derives from the following elements:
cial position, and other factors considered as being significant in respect •• local currencies could depreciate between the invoicing of rents in euros
of the Company’s business sector and the economic outlook. and the payment of the aforesaid rents by the tenants, which would
Any downgrading of the Klépierre debt rating could impact negatively create exchange rate losses for Klépierre. Moreover, some invoices
the ability of the Group to fund its acquisitions or develop its projects (especially in the Scandinavia region) are not invoiced in euros, but in
under acceptable conditions and could also increase the cost of refi- dollars; (Central Europe) or in local currencies, which creates an addi-
nancing its existing loans. Any increase in interest charges would com- tional risk related to rent amount effectively recovered in euros;
promise Klépierre operating income and the yield of development •• fluctuations in local currencies also impact on the level at which local
projects. If funding were not to be available under satisfactory condi- financial statements are translated into euros and integrated into
tions, the ability of Klépierre to grow its business through acquisition Klépierre’s consolidated financial statements;
and development would be reduced. •• since a proportion of subsidiary company expenses are denominated in
the local currency, although their income (fees) are denominated in
2.2. Interest rate risk euros, any appreciation in the local currency may reduce operating profit;
•• since rent bills are usually denominated in euros, tenants may have dif-
Klépierre is exposed to the general risks associated with all types of ficulty in paying their rent if their local currency depreciates significantly.
borrowing, and particularly the risk of operating cash flows falling to a Any resulting deterioration in their solvency could have a negative impact
level at which the debt could not be serviced. If such a shortfall were on Klépierre lease income.
to occur, the result could be a faster rate of repayment or early repay-
ment and the calling in of any security, with the possibility of the assets For details of the measures taken by the Group to reduce currency risks,
concerned being seized. please refer to Note 7.3. of the Notes to the consolidated financial
Klépierre’s significant debt also exposes it to risks due to interest rate statements.
variations:
•• the interest charges paid by Klépierre on its variable rate borrowings
could therefore rise significantly;

106 | Klépierre – 2010 Annual report

2.4. Counterparty risk Risks related to SIIC tax status

When Klépierre uses derivative instruments such as swaps to hedge a Since the Company has SIIC status, it is subject to a special tax regime,
financial risk, Klépierre’s counterparty may owe Klépierre some pay- referred to as the “SIIC regime”. As such, and subject to certain condi-
ments during the lifetime of the instrument. Insolvency of that counter- tions (see the Glossary on page 282 for further details), it is exempt from
party may lead to delay or default in such payments, which would have paying corporate income tax. Although there are significant benefits
an adverse impact on Klépierre’s results. involved in adopting SIIC status, it is a complex regime that poses cer-
tain risks for the Company and its shareholders:
Klépierre is also exposed to counterparty risks in respect of its short- •• the requirement for the Company to distribute a significant proportion
term investments; since these investments are made for reduced of the profits earned in each fiscal year, which could, for example, affect
amounts, in simple forms and for a short term, this risk is, however, its financial position and liquidity;
barely significant on the Group scale. •• the Company is exposed to the risk of future changes to the SIIC
scheme, and certain changes could have a significant negative impact
The risk monitoring policy and control systems implemented by Klépierre on the Company’s business, financial position and results;
are presented in Note 7.4. of the Notes to the consolidated financial •• the Company is also exposed to the risk posed by future interpretation
statements. of the SIIC scheme provisions by the French tax and accounting authori-
ties. For example, the 20% deduction introduced by the Amending
Finance Act of 2006 has yet to be commented on by the relevant author-
ities. The Company cannot therefore guarantee what kind of interpreta-
3. Legal, tax and regulatory risks tion may or may not be brought forward by the French tax authorities.
Furthermore, there are uncertainties regarding the accounting treatment
3.1. Risks related to applicable regulations of this 20% deduction and the effectiveness of the statutory mechanism
enabling this 20% charge to be passed on to the shareholders
As an owner and manager of real estate assets, Klépierre must comply concerned.
with the regulations in force in all of its operating countries. These rules
apply to several fields, including corporate law, health and safety, envi- Legal intelligence
ronment, building construction, commercial licenses, leases and urban
planning. Changes in the regulatory framework may require Klépierre to The Klépierre legal department supported by the relevant functions work
make changes to its business, assets or strategy. Klépierre may also in partnership with outside counsels to ensure that information regarding
suffer financially should one or more tenants in one of its shopping cen- new laws and regulations that could have a material impact on the
ters fail to comply with the applicable standards. This may take the form Group’s financial position and growth is gathered, processed and dis-
of a loss of rent following a store closure or a loss of marketability of seminated throughout the Group. This intelligence-gathering process
the asset. The regulatory risks described in this paragraph could impose extends to legislation and regulations in every country in which the
additional costs on Klépierre which could have a negative effect on its Group has equity interests.
business, results and financial position, as well as the value of the
Klépierre asset portfolio.

The specific risk posed by legal or regulatory

provisions applying to leases

In certain of Klépierre’s operating countries, and especially France, the

contractual conditions applying to lease periods, lease voidance, lease
renewal and rent indexation may be a matter of public policy. More
specifically, some legal provisions in France limit the conditions under
which property owners may increase rents to align them with market
levels or maximize rental income. In France, certain types of lease must
be entered into for minimum periods, and the process of evicting ten-
ants in the event of non-payment may be lengthy.
Any change to the regulations applying to commercial leases, and par-
ticularly their maturity, the indexation and capping of rents or the way
in which eviction penalties are calculated, could have a negative effect
on the value of the Klépierre asset portfolio, as well as the company’s
operating results and financial position.

Klépierre – 2010 Annual report | 107

 Risk
factors

4. Risks related to subsidiary Internal measures have been implemented to cover certain risks that
companies are not covered by regulatory obligations. These good practices include
building structure audits, energy audits, analyses to control rates of
4.1. Risks related to the shareholding legionnaire’s disease, and thermal checks on electrical installations.
structure of Steen & Strøm
The families of risks identified could have a range of different
Steen & Strøm is owned 43.9% by ABP Pension Fund and 56.1% by consequences:
Klépierre. The equity percentage, together with certain provisions con- •• the health risks resulting, for example, from internal pollution would pro-
tained in the shareholder agreement between the two shareholders, duce a hazard to users and neighbors. A failure of this kind would have
gives ABP Pension Fund significant influence in certain areas of strategic immediate local consequences in terms of footfall, reduced sales for
decision-making, such as major investment and disinvestment transac- retailers and the loss of rent for Klépierre on the site concerned, as well
tions involving Steen & Strøm. Under the terms of the agreement, certain as negative impact on the Group’s reputation;
decisions may be made on the basis of an 85% qualified majority vote, •• an environmental incident caused by human error could reflect badly on
the effect of which is to give ABP Pension Fund an effective right of veto the image of the Group and its management. The damage caused to
over these decisions. For certain Steen & Strøm growth decisions, it the image of the Company as a result of an environmental incident is a
may occur that the interests of ABP Pension Fund diverge from those risk whose potential consequences are hard to quantify;
of Klépierre. The successful growth of Steen & Strøm’s business there- •• under current environmental laws and regulations, Klépierre, as the cur-
fore depends to a certain extent on good relations between its share- rent or previous owner and/or operator of an asset, may be liable for
holders. The possibility of some divergence of approach occurring identifying hazardous or toxic substances affecting an asset or a neigh-
between the shareholders cannot be excluded, or that their relationship boring asset, and removing and cleaning up any such contamination
may deteriorate in more general terms, which could disrupt the opera- found. The existence of contamination or the failure to take measures
tion of Steen & Strøm, causing a negative impact on the results, financial to resolve it may also negatively impact Klépierre’s ability to sell, rent, or
position and prospects of Klépierre. redevelop an asset, or to use it as a security for a loan.

4.2. Risks related to Klémurs In addition to the civil liability cover contracted to cover the risk of acci-
dental pollution, Klépierre also has special insurance policies to cover
The loan agreements entered into by Klémurs provide for a maximum the assets that include classified facilities subject to authorization. These
Loan-To-Value ratio (net financial debt to reappraised asset value) of policies insure against the liability of Klépierre in respect of physical
65%. If the value of the Klémurs portfolio decreased, this limit may be injury, damage to property, and consequential loss arising as a result of
reached, which would thus limit the ability of Klémurs to incur additional gradual pollution. In terms of personal safety, the Group’s civil liability
debt to fund acquisitions or development projects. Moreover, Klémurs policies cover third parties against any prejudice suffered.
could, if necessary, be forced to raise additional capital to comply with •• Depending on its intensity, extreme weather may also impact the busi-
these covenants. Although Klépierre has no contractual obligation to ness activity of one or more assets. Exceptional snowfall could, for
increase its equity holding in Klémurs, any failure to do so could lead to example, result in buildings being evacuated or pose a structural risk
the dilution of Klépierre’s stake in Klémurs, and compromise the ability resulting in cessation of trading on a given site. Property damage insur-
of Klémurs to raise capital. ance addresses this type of risk by covering harm to assets.
•• Any failure to comply with safety measures or control procedures could
result in an official shutdown of the site, with local consequences for the
future of the business and image of the site concerned. Property dam-
5. Environmental risks age insurance addresses this type of accidental damage.

In all its operating countries, Klépierre must comply with environmental Risks are managed by means of permanent and periodic control mea-
protection laws applying to the presence or use of hazardous or toxic sures. The permanent control measures use a “risk matrix” to check the
substances, and the use of facilities capable of generating pollution and procedures implemented and the monitoring points fundamental to the
impacting public health, particularly in terms of epidemics (especially in full coverage of the assets and the claims history. The periodic control
the case of shopping centers). measures ensure compliance with the regulations and procedures imple-
mented (drafting of reports, recommendations and implementation
Regulations on the control and maintenance of wastewater networks, plans) (see Report of the Chairman of the Supervisory Board).
domestic supply water stations and distribution networks, and hydro-
carbon evacuation and storage facilities exist in all countries.

108 | Klépierre – 2010 Annual report

6. Risks related to Klépierre’s
shareholding base
The BNP Paribas group holds the casting vote at general meetings of
shareholders, and minority shareholders have no power of veto over the
major decisions taken by the BNP Paribas group in relation to Klépierre.
Approximately one third of Klépierre’s total bank borrowings are con-
tracted with BNP Paribas. Klépierre also has many other commercial
links with the BNP Paribas group, since BNP Paribas and some of its
subsidiary companies are joint investors alongside Klépierre and/or other
investors in some shopping centers. BNP Paribas has also granted
guarantees in respect of Klépierre course of usual business. Although
Klépierre believes that its relationships with BNP Paribas and its sub-
sidiary companies are reasonable, Klépierre did not implement a tender
offer prior to entering into these relationships.
It is possible that the economic objectives of Klépierre are not always
the same as those of BNP Paribas, and that this fact could give rise to
conflicts of interest. Although Klépierre believes that the likelihood of
any conflict of interest is slight, the company cannot discount it alto-
gether, and such an event could have a negative impact on its results,
financial position and/or business.

Klépierre – 2010 Annual report | 109

 Corporate
governance
11
1 1. Management and supervisory bodies
116 2. Compensation and benefits
121 3. Other information

110 | Klépierre – 2010 Annual report

Corporate governance
1. Management and supervisory bodies
1.1. The Executive Board At least half of the Executive Board members must be present for pro-
ceedings to be considered valid. Decisions are adopted by the majority
1.1.1. Executive Board appointments, operation of votes of members present and represented.
and powers The Executive Board is vested with the most extensive powers to act
on the Company’s behalf in all circumstances. It exercises these powers
The Company is managed by an Executive Board. The Supervisory within the limits of the corporate purpose, subject however, to those
Board elects the members of the Executive Board and determines their expressly attributed by law and the bylaws to the Supervisory Board or
number within the limits of the law. The Board is appointed for three general meetings of shareholders.
years.
The Supervisory Board elects one of the Executive Board members as Under the control of the Supervisory Board, it must, in particular:
its Chairman. The Chairman carries out his duties throughout his term •• present the Supervisory Board with a report on the Company’s course
as member of the Executive Board. The Chairman of the Executive of business at least once every quarter;
Board represents the Company in its relations with third parties. •• present the Supervisory Board with the corporate financial statements,
The Supervisory Board may assign the same power of representation and where applicable, the consolidated financial statements for audit
to one or more members of the Executive Board who will then bear the and control, within three months of each reporting date.
title of Chief Executive Officer.
The Executive Board meets as often as the Company’s interests require. The Executive Board draws up rules of procedure governing the ways
These meetings are held at the head office or at any other venue as in which it exercises its powers and grants delegations.
indicated in the notice of meeting.
The Executive Board meets weekly.

1.1.2. List of mandates and positions of Executive Board members

Information on the professional experience of Executive Board members is provided on page 8 of this registration document.

Laurent MOREL – Business address: 21, avenue Kléber – 75116 Paris (1)
Chairman of the Executive Board
Date of first appointment as Chairman of the Executive Board: January 1, 2009 (2)
Date of first appointment as a member of the Executive Board: June 1, 2005
Period of appointment as a member of the Executive Board: June 22, 2010 to June 21, 2013
Number of shares: 3,958
Manager of Ségécé SCS

Jean-Michel GAULT – Business address: 21, avenue Kléber – 75116 Paris (1)
Member of the Executive Board
Date of first appointment: June 1, 2005
Period of appointment: June 22, 2010 - June 21, 2013
Number of shares: 1,975
Permanent representative of Klépierre and member of the Supervisory Board of Ségécé SCS
(1) In accordance with Commission Regulation (EC) no. 809/2004 of April 29, 2004, these lists do not include all those Klépierre subsidiary companies in which the corporate officers are also, or have been
in the previous five years, a member of the governing, management or supervisory body.
(2) Appointment on December 19, 2008 with effect on January 1, 2009.

Klépierre – 2010 Annual report | 111

 Corporate
governance

1.2. The Supervisory Board require, either at the head office or in any other location. It is convened
by the Chairman and examines any item included in the agenda by the
1.2.1. Supervisory Board appointments, Chairman or by a simple majority of the Board.
operation and powers At least half of the Executive Board members must be present for pro-
ceedings to be considered valid.
The Supervisory Board is composed of a minimum of three and a maxi- Resolutions are adopted on the basis of a majority vote of those mem-
mum of 12 members who are elected by the ordinary general meeting bers present or represented.
of shareholders. The Supervisory Board is responsible for the permanent oversight of
Each member of the Supervisory Board must hold at least 60 shares the Executive Board’s management of the Company. For this purpose,
throughout their term of office. it may conduct any verifications or checks as it sees fit at any time of
Board members are appointed for a three-year term, subject to the the year, and may request any and all documents it believes useful to
requirement to renew the Board by one third annually. the accomplishment of its mission.
The duties of a Supervisory Board member terminate at the close of the The Supervisory Board may decide to set up committees to investigate
ordinary general meeting of shareholders called to approve the financial issues submitted for review by itself or by its Chairman.
statements in the year during which the relevant Board member’s term The Board draws up rules of procedure governing the ways in which it
of office expires. exercises its powers and grants authorizations to its Chairman.
The Board elects a Chairman and a Vice Chairman amongst its All other information relating to the Supervisory Board is recorded in the
members. report prepared by the Chairman of the Supervisory Board in accor-
The Supervisory Board meets as often as the interests of the Company dance with article L. 225-68 of the French commercial code (p. 237).

1.2.2. List of mandates and positions of Supervisory Board members

Information on the professional experience of Supervisory Board members is provided on pages 9 to 11 of this registration document.

Michel CLAIR – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Chairman of Astria Action Logement
Main position within the Company: Chairman of the Supervisory Board
Date of first appointment: December 19, 2008
Period of appointment: January 1, 2009 – April 7, 2011 (1)
Member of the Investment Committee
Member of the Sustainable Development Committee
Number of shares: 88,011
Current appointments: Appointments expired during the last 5 years:
Chairman of the Supervisory Board of Klémurs SCA – Chairman of the Executive Board of Klépierre
Chairman of the Supervisory Board of Ségécé SCS – Chairman of Valéry Développement SAS
Chairman of the Board of Directors of SGRHVS

Chairman:
– SAS Astria Développement (Astria Group)
– RHVS 1% Logement SAS

Director:
– France-Habitation SA HLM (Astria group)
– GIE Astria (Astria group)
– Omnium de Gestion Immobilière de l’Ile de France (Astria group)
– Pax-Progrès-Pallas SA HLM (Domaxis group)
– Domaxis SA HLM
(1) Proposed for reappointment at the ordinary general meeting of shareholders of April 7, 2011.

In accordance with Commission Regulation (EC) no. 809/2004 of April 29, 2004, this does not include all those Klépierre subsidiary companies in which the corporate officers are also, or have been
in the previous five years, a member of the governing, management or supervisory body.

112 | Klépierre – 2010 Annual report

 Vivien LÉVY-GARBOUA – Business address: 21, avenue Kléber – 75116 Paris
Main position outside the Company: Senior Advisor to BNP Paribas
Main position within the Company: Vice Chairman of the Supervisory Board
Date of first appointment: April 12, 2000
Period of appointment: April 8, 2010 – 2013 AGM
Member of the Audit Committee
Member of the Selection and Compensation Committee
Member of the Sustainable Development Committee
Number of shares: 1,800
Current appointments: Appointments expired during the last 5 years:
– Senior Advisor to BNP Paribas – Compliance and internal control manager at BNP Paribas
– Vice Chairman of the Supervisory Board of Linedata Services – Member of the Executive Board of BNP Paribas
– Member of the Supervisory Board of BNP Paribas Immobilier – Vice Chairman of the Supervisory Board of Presses Universitaires de France
– Member of the Board of SFEF (Société de Financement de l’Économie Française)
Director:
– Société Sicovam Holding Director:
– Société Coe-Rexecode – BNP Paribas Luxembourg
– Financière BNP Paribas – BNP Paribas SA (Switzerland)
– Compagnie d’Investissements de Paris – BNP Paribas (GB)
– BGL BNP Paribas Luxembourg
– Bank of the West
– Euroclear SA
– LCH Cleannet

Dominique AUBERNON – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Head of Strategic Advisory, BNP Paribas
Main position within the Company: Member of the Supervisory Board
Date of first appointment: March 31, 2010
Period of appointment: April 8, 2010 – April 7, 2011 (1)
Member of the Investment Committee
Number of shares: 60
Current appointments: Appointments expired during the last 5 years:
– Director of BNP Paribas New Zealand LTD
Chairman and CEO and Director:
– Financière du Marché Saint-Honoré SA

Director:
– BNP Paribas Lease Group SA
– Parilease SAS

Permanent representative of BNP Paribas SA as Chairman of:

– Capstar Partners SAS
(1) Proposed for reappointment at the ordinary general meeting of shareholders of April 7, 2011.

Jérôme BÉDIER – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Executive Chairman of Fédération des Entreprises, du Commerce et de la Distribution
Main position within the Company: Member of the Supervisory Board – Independent director
Date of first appointment: April 8, 2004
Period of appointment: April 4, 2008 – April 7, 2011 (1)
Chairman of the Sustainable Development Committee
Member of the Investment Committee
Number of shares: 300
Current appointments: Appointments expired during the last 5 years:
– Executive Chairman of Fédération des Entreprises, du Commerce et de la Distribution – Member of the Supervisory Board of Générale de Santé
– Medef Executive Committee Member
– Chairman and director of the Board of Directors of Fondation de la Croix Saint-Simon
– Chairman of the Supervisory Board of Union d’Économie Sociale pour le Logement
– Permanent representative of Fédération des Entreprises, du Commerce et de la Distribution,
director of Éco-Emballages
(1) Proposed for reappointment at the ordinary general meeting of shareholders of April 7, 2011.

Klépierre – 2010 Annual report | 113

 Corporate
governance

Bertrand de FEYDEAU – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Chairman of Foncière Développement Logements
Main position within the Company: Member of the Supervisory Board – Independent director
Date of first appointment: July 21, 1998
Period of appointment: April 8, 2010 – 2013 AGM
Chairman of the Investment Committee
Member of the Selection and Compensation Committee
Number of shares: 939
Current appointments: Appointments expired during the last 5 years:
– Chairman of the Board of Directors of Foncière Développement Logements – Head of Economic Affairs – Archevêché de Paris (Archdiocese of Paris)
– Chairman and CEO of SMAF (Société des Manuscrits des Assureurs Français) – Chairman and CEO of AXA Immobilier SAS
– Member of the Supervisory Board of SCA Klémurs
Director:
Director: – Ahorro Familiar
– Foncière des Régions – AXA Aedificandi
– Affine – Bail Investissement
– Société Beaujon SAS – Gécina
– SITC SAS
Current board appointments:
– Fédération des Sociétés Immobilières et Foncières (FSIF)
– Fondation du Patrimoine
– Vieilles Maisons Françaises
– Club de l’Immobilier
– Chairman of Fondation Palladio
– Chairman of Fondation des Bernardins

Non-voting member of Sefri Cime

Dominique HOENN – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: -
Main position within the Company: Member of the Supervisory Board
Date of first appointment: April 8, 2004
Period of appointment: April 8, 2010 – 2013 AGM
Member of the Investment Committee
Member of the Audit Committee
Member of the Selection and Compensation Committee
Number of shares: 300
Current appointments: Appointments expired during the last 5 years:
Member of the Supervisory Board of Klémurs SCA Senior Advisor to BNP Paribas
Chairman of the Board of Directors of BNP Private Equity Chairman of the Board of Directors of BNP Paribas International

Director, Clearstream International (Luxembourg) Supervisory Board Member:

– NYSE Euronext group
Member of the Collège de l’Autorité de Contrôle Prudentiel – Euronext N.V. (Amsterdam)

Member of the Collège de l’Autorité des marchés financiers Director:

– BNP Paribas Securities Services
– BNP Paribas Luxembourg SA
– LCH Clearnet (London)

Bertrand JACQUILLAT – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Professor at Sciences Po Paris
Main position within the Company: Member of the Supervisory Board – Independent director
Date of first appointment: April 12, 2001
Period of appointment: April 9, 2009 – 2012 AGM
Chairman of the Audit Committee
Number of shares: 1,545
Current appointments: Appointments expired during the last 5 years:
– Chairman and CEO of Associés en Finance None
– Member of the Supervisory Board of Presses Universitaires de France
– Director of Total SA

114 | Klépierre – 2010 Annual report

Bertrand LETAMENDIA – Business address: 21, avenue Kléber – 75116 Paris
Main position outside the Company: Chairman of AITA Conseils SAS
Main position within the Company: Member of the Supervisory Board – Independent director
Date of first appointment: July 21, 1998
Period of appointment: April 9, 2009 – 2012 AGM
Chairman of the Selection and Compensation Committee
Member of the Audit Committee
Number of shares: 1,200
Current appointments: Appointments expired during the last 5 years:
– Chairman of AITA Conseils SAS Director:
– Director of Sogeprom – Immovalor Gestion
– Director of SFL
– Vice Chairman and Member of the Supervisory Board of TEXA Chairman:
– SAS Kléber Lamartine
– SAS Kléber Passy
– SAS Établissements Paindavoine
– SAS Étoile Foncière et Immobilière
– SAS Financière Cogedim Laennec
– SAS INVCO
– SAS Madeleine Opéra
– SAS Société Foncière Européenne
– SAS Société de Négociations Immobilières et Mobilières Maleville « SONIMM »
– Vernon SAS

Managing partner:
– SNC AIP
– SNC Laennec Rive Gauche
– SNC AGF Immobilier
– SNC Phénix Immobilier
– Allianz Immo 3 EURL
– EURL Business Vallee II
– EURL 20/22 rue Le Peletier
– SARL Relais de la Nautique
– SARL de l’Étoile
– SCCV 48/50 Henri-Barbusse
– SCCV 33 rue La Fayette
– SCI Tour Michelet
– SCI Remaupin
– SCI 3 Route de la Wantzenau « Les Portes de l’Europe »
– SC Prelloyd Immobilier
– SCI Via Pierre 1
– SCI Le Surmelin
– Société de Construction et de Gestion Immobilière des Mesoyers

Liquidator of SCCV 33 La Fayette

Philippe THEL – Business address: 21, avenue Kléber – 75116 Paris

Main position outside the Company: Head of Real Estate Financing, BNP Paribas
Main position within the Company: Member of the Supervisory Board
Date of first appointment: April 7, 2006
Period of appointment: April 9, 2009 – 2012 AGM
Member of the Investment Committee
Member of the Sustainable Development Committee
Number of shares: 805
Current appointments: Appointments expired during the last 5 years:
None
Director:
– Cilgere Gipec
– PSR
– BNP Paribas Immobilier SAS

Permanent representative of:

– BNP Paribas as Director of Promogim
– BNP Paribas as Director of Sofibus

Klépierre – 2010 Annual report | 115

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2. Compensation and benefits

2.1. Executive Board members’ compensation and benefits
Table summarizing compensation, options and shares awarded to each executive corporate officer
(table no. 1 AMF recommendations – AFEP/Medef code)

Laurent MOREL Jean-Michel GAULT

Chairman of the Executive Board Deputy CEO
Member of the Executive Board Member of the Executive Board
2009 2010 2009 2010
Compensation due for fiscal year 395 514 437 505 343 962 374 607
(detailed in table no. 2)
Valuation of the options granted during the fiscal year 37 975 177 100 32 550 151 725
(detailed in table no. 4)
Valuation of the performance shares granted during the fiscal year – – –­ –
(detailed in table no. 6)
TOTAL 433 489 614 605 376 512 526 332
In euros

Table summarizing compensation of each executive corporate officer

(table no. 2 AMF recommendations – AFEP/Medef code)

Laurent MOREL Jean-Michel GAULT

Chairman of the Executive Board Deputy CEO
Member of the Executive Board Member of the Executive Board
2009 2010 2009 2010
Amount Amount Amount Amount Amount Amount Amount Amount
due paid due paid due paid due paid
Fixed compensation 185 954 185 954 227 945 185 954 161 902 161 902 190 045 161 902
Variable compensation (1) 180 000 180 000 180 000 180 000 160 000 160 000 160 000 160 000
Exceptional compensation – – – – – – – –
Director’s fees 25 000 25 000 25 000 25 000 17 500 12 500 20 000 20 000
Benefits in kind (2) 4 560 4 560 4 560 4 560 4 560 4 560 4 562 4 562
TOTAL 395 514 395 514 437 505 395 514 343 962 338 962 374 607 346 464
In euros
(1) Variable compensation is determined using a cash flow table, according to which the variable compensation payable to the members of the Executive Board is set at between 50% and 80% of their fixed
annual compensation. In addition to this criterion based on the Company’s performance, individual performance criteria are set in line with the targets defined for each member. This may result in additional
variable compensation capped at 40% of the fixed annual compensation.
(2) Benefits in kind consist solely of a Company car and associated expenses such as petrol and insurance.

116 | Klépierre – 2010 Annual report

Options to subscribe new shares or purchase existing shares granted to each executive corporate officer during the year
by the issuer and by any other Group company (table no. 4 AMF recommendations – AFEP/Medef code)

Laurent MOREL No. and date of plan Type of option Value of options based Number of options Exercise price Exercise period
Chairman of the Executive Board (purchase or on method used granted during
Member of the Executive Board subscription) in the consolidated the year
financial statements
No. 4 Purchase 177 100 35 000 22.31 June 21, 2014
Date: June 18, 2011 June 20, 2018
TOTAL 177 100
In euros

Jean-Michel GAULT No. and date of plan Type of option Value of options based Number of options Exercise price Exercise period
Deputy CEO (purchase or on method used granted during
Member of the Executive Board subscription) in the consolidated the year
financial statements
No. 4 Purchase 151 725 30 000 22.31 June 21, 2014
Date: June 18, 2011 June 20, 2018
TOTAL 151 725
In euros

The conditions under which the options can be exercised and the way the exercise price is set up are developed on page 119 of this registration
document.

Options to subscribe to new shares or purchase existing shares exercised during the year by each executive corporate officer
(table no. 5 AMF recommendations – AFEP/Medef code)

Members of the Klépierre board did not exercise any purchase or subscription options during the 2010 fiscal year. The delegations granted
to the Executive Board do not cover the allotment of stock subscription options.

Performance shares awarded to each corporate officer

(table no. 6 AMF recommendations – AFEP/Medef code)

No performance shares were granted to corporate officers during current or previous fiscal years.

Performance shares which became available to each corporate officer

(table no. 7 AMF recommendations – AFEP/Medef code)

No performance shares became available to corporate officers during current or previous fiscal years.

Klépierre – 2010 Annual report | 117

 Corporate
governance

Other disclosures (table no. 10 AMF recommendations – AFEP/Medef code)

Executive corporate officers Employment contract Supplementary pension scheme (5) Benefits due or conditionally due on Compensation related
termination or change of function to non-compete clause
Yes No Yes No Yes No Yes No
Laurent MOREL X (4) X X X
Chairman of the Executive Board (1)
Member of the Executive Board
Beginning of mandate (2): 06/22/2010
End of mandate (3): 06/21/2013
Jean-Michel GAULT X X X X
Chief Executive Officer
Member of the Executive Board
Beginning of mandate (2): 06/22/2010
End of mandate (3): 06/21/2013
(1) Date of first appointment as Chairman of the Executive Board: 01/01/2009.
(2) Date of first appointment as Member of the Executive Board: 06/01/2005.
(3) As Member of the Executive Board.
(4) The Company has decided to apply the AFEP-Medef recommendations as contained in the consolidated version of the AFEP-Medef Code of Corporate Governance for listed companies, published
in December 2008. In its recommendation concerning the termination of contracts of employment in the event of appointment as a corporate officer, the AFEP-Medef code states that: “It is recommended
that when a manager becomes a corporate officer of the Company, the employment contract between him or her and the Company or another Group company should be terminated either by standard
termination or by resignation”, but that “This recommendation does not apply to employees of a group of companies acting as corporate executives in a group subsidiary company, regardless of whether
the company is listed or not”. Laurent Morel has been an employee of the BNP Paribas group since 1988, and was appointed as Chairman of the Company’s Executive Board with effect from January 1, 2009.
He is currently a salaried employee of Segece, a fully-owned subsidiary of the Company, and is bound to the Company by contract of employment. Since the Company is owned 50.91% by BNP Paribas and
is therefore a subsidiary of BNP Paribas under the terms of article L. 233-1 of the French Commercial Code, the contract of employment between Laurent Morel and Segece may remain in place following
his appointment as Chairman of the Executive Board, in accordance with AFEP-Medef recommendations. Laurent Morel continues to be paid under the terms of his contract of employment with Segece,
and is not paid in respect of his positions as Manager of Ségécé and Chairman of the Executive Board of the Company.
(5) Laurent MOREL and Jean-Michel GAULT are covered by the supplementary pension plan for senior executives of the former Compagnie Bancaire. This plan provides for a top-up pension when they leave
the BNP Paribas group to take their retirement. Given their entitlement to this income which will be revalued on their retirement, a calculation should be performed taking into account the amount of their
pensions on retirement and 54.5% of their compensation over their last 12 working months, in order to decide whether or not this income applies and to set up the amount involved.

2.2. Compensation and benefits received by Supervisory Board members

Table summarizing directors’ fees and other compensation paid to non-executive corporate officers
(table no. 3 AMF recommendations – AFEP/Medef code)

Non-executive corporate officers Amounts paid during 2009 fiscal year (1) Amounts paid during 2010 fiscal year (1)
Michel CLAIR (2) 5 000 (3) 56 023 (4)
Vivien LEVY-GARBOUA 20 809 37 252
Jérôme BEDIER 39 350 36 682
Bertrand de FEYDEAU (6) 51 671 53 108
Betrand JACQUILLAT 32 268 30 170
Bertrand LETAMENDIA 34 590 33 426
François DEMON (5) (6) 30 809 –
Dominique AUBERNON (7) – –
Dominique HOENN (6) 45 258 33 990
Alain PAPIASSE (8) 23 000 –
Sarah ROUSSEL (9) – 15 456
Philippe THEL 22 245 17 541
TOTAL 305 000 313 654
In euros
(1) Compensation accruing to non-executive corporate officers consists solely of directors’ fees paid by Klépierre and its subsidiaries Klémurs (84.6%) and Ségécé (100%).
(2) Under the terms of article L. 225-81 of the French Commercial Code, the Supervisory Board granted its Chairman annual compensation of 250,000 euros (including Company directors’ fees) with effect
from May 1, 2009, pro rata for a period of three fiscal years ending December 31, 2011.
(3) Directors’ fees in relation to Ségécé Supervisory Board membership.
(4) Directors’ fees in relation to Klépierre, Klémurs and Ségécé Supervisory Board membership.
(6) François Demon’s mandates as Supervisory Board member of Klépierre and Klémurs ended on December 31, 2008.
(7) Dominique Aubernon has been a member of the Klépierre Supervisory Board since March 31, 2010. The corresponding directors’ fees for the 2010 fiscal year are paid during the 2011 fiscal year.
(8) Alain Papiasse’s mandate as member of the Klépierre Supervisory Board ended on December 31, 2008.
(9) Sarah Roussel resigned as member of the Klépierre Supervisory Board with effect from March 31, 2010. The corresponding directors’ fees for the 2010 fiscal year are paid during the 2011 fiscal year.

118 | Klépierre – 2010 Annual report

2.3. Information on stock subscription and purchase options
Overview of stock subscription and purchase options granted in previous years – Information on stock subscription and purchase options
(table no. 8 AMF recommendations – AFEP/Medef code)

General meeting date Plan no. 1 Plan no. 2 Plan no. 3 Plan no. 4
Without With Without With
performance performance performance performance
targets targets targets targets
General meeting date April 7, 2006 April 7, 2006 April 7, 2006 April 7, 2006 April 9, 2009 April 9, 2009
Executive Board date May 30, 2006 May 15, 2007 April 6, 2009 April 6, 2009 June 21, 2010 June 21, 2010
Total number of shares which can be subscribed or purchased 603 593 443 146 378 500 102 500 403 000 90 000
o/w shares that can be subscribed or purchased by corporate officers: 105 000 84 013 – 65 000 – 65 000
Michel CLAIR 45 000 33 005 – – – –
Laurent MOREL 30 000 27 004 – 35 000 – 35 000
Jean-Michel GAULT 30 000 24 004 – 30 000 – 30 000
Start date for exercising options May 31, 2010 May 16, 2011 April 6, 2013 April 6, 2013 June 21, 2014 June 21, 2014
Expiry date May 30, 2014 May 15, 2015 April 5, 2017 April 5, 2017 June 21, 2018 June 21, 2018
Subscription or purchase price (1) 29.49 euros 46.38 euros 22.60 euros between 22.60 22.31 euros between 22.31
and 27.12 euros and 26.77 euros
Exercise conditions See text below
Number of shares subscribed at December 31, 2010 – ­– 3 750 938 – –
Total number of options that have been cancelled or become null and void 45 000 28 612 19 500 – 4 500 –
Outstanding options at year end 558 593 414 534 355 250 101 562 398 500 90 000
(1) Adjusted to reflect the 3-for-1 stock split and after additional adjustment to reflect the discount granted as part of the preferential subscription rights capital increase of December 2008.

•• The general meeting of shareholders of April 7, 2006 authorized the more occasions, options to purchase shares in the Company resulting
Executive Board, for a period of 38 months, to grant, on one or more from purchases made by the Company in accordance with the appli-
occasions, options to purchase shares in the Company resulting from cable regulations.
purchases made by the Company in accordance with the applicable
regulations. The number of options granted may not confer entitlement to a total
number of shares whose value is greater than 1% of the share capital
The total number of options granted may not confer entitlement to a total on the day of the Executive Board’s decision.
number of shares whose value is greater than 1.1% of share capital.
The applicable lock-up period and life of the options granted was set Under the terms of this authorization, 493,000 stock options were
at four years from the grant date and eight years, respectively. granted on June 21, 2010.

Under the terms of this authorization, 195,000 stock options were The applicable lock-up period and life of the options granted was set
granted on May 30, 2006, 143,000 on May 15, 2007 and 481,000 on at four years from the grant date and eight years, respectively.
April 6, 2009, based on the nominal share price on these dates.
After adjustments to reflect the 2007 stock split and the effect of the On December 31, 2010, taking into account departures, the number
discount granted as part of the capital increase of December 2008, of options granted was 488,500.
and taking into account retirements, the number of outstanding
options granted under these plans at December 31, 2010 was as fol- The shares vested as a result of exercising the options granted on June 21,
lows: 558,593 under the May 30, 2006 plan, 414,534 under the 2010 are subject to an obligation requiring 50% of the capital gain made
May 15, 2007 plan and 456,812 under the April 6, 2009 plan. at the time of exercise by Executive Board members to be held in the form
of registered shares until such time as they leave the Company.
The shares vested as a result of exercising the options granted on
May 30, 2006 and May 15, 2007 may be freely sold. Plan no. 3

The shares vested as a result of exercising the options granted on For certain beneficiaries, a proportion of the total allocation is subject
April 6, 2009 are subject to an obligation requiring 50% of the capital to how the Klépierre share performs in relation to the EPRA Eurozone
gain made at the time of exercise by Executive Board members to be index. Accordingly, the exercise price is dependent on the results
held in the form of registered shares until such time as they leave the of performances in 2009, 2010, 2011 and 2012. It can vary from
Company. 22.60 euros to 27.12 euros. For Executive Board members, the total
allocation is subject to performance conditions (for more information
•• The general meeting of shareholders of April 9, 2009 authorized the on the exercise price, please see note 8.10. to the consolidated financial
Executive Board, for a period of thirty eight months, to grant, on one or statements).

Klépierre – 2010 Annual report | 119

 Corporate
governance

Plan no. 4 performances in 2010, 2011, 2012 and 2013. It can vary from
22.31 euros to 26.77 euros. For Executive Board members, the total
For certain beneficiaries, a proportion of the total allocation is subject allocation is subject to performance conditions (for more information on
to how the Klépierre share performs in relation to the EPRA Eurozone the exercise price, please see note 8.10. to the consolidated financial
index. Accordingly, the exercise price is dependent on the results of statements).

Stock subscription and purchase options granted to and exercised by the top ten employee grantees
(not including corporate officers) (table no. 9 AMF recommendations – AFEP/Medef code)

Stock subscription and purchase options granted Total number Weighted Plan no. 1 Plan no. 2 Plan no. 3 Plan no. 4
to and exercised by the top ten employee grantees of options average price
(not including corporate officers) granted/shares
subscribed
or purchased
Options granted during the period by the issuer and all other companies included
in the scope of options granted, to the ten employees of the issuer or other 75 500 22.31 euros – – – 75 500
Group companies receiving the highest number of options (aggregate information)
Options for shares in the issuer or other aforementioned companies, exercised during
the financial year by the ten employees of the issuer and said companies receiving 4 688 22.60 euros – – 4 688 –
the highest number of options (aggregate information)

120 | Klépierre – 2010 Annual report

3. Other information 3.3. Insiders
3.1. Loans and guarantees granted Supervisory Board and Executive Board members, individuals with close
to members of management personal ties to executives and other management personnel (as defined
or supervisory bodies by current regulations), are all required under current regulations to
disclose any transactions they make involving securities issued by the
None. Company, and are prohibited from conducting any personal transactions
in Klépierre securities during the following periods:
3.2. Conflicts of Interest – •• in respect of each quarter of the calendar year: during the period from
Convictions for fraud the first day of the quarter and the day on which the Klépierre consoli-
dated revenue figures are published during the quarter considered;
To the best of the Company’s knowledge: •• in respect of each six-month period of the calendar year: between the
•• there are no family ties between members of the Executive Board and/ first day of the six-month period and the day on which the Klépierre
or members of the Supervisory Board; annual or interim financial statements are published during the half-year
•• none of the members of the Executive Board and/or members of the considered;
Supervisory Board have been convicted for fraud in the last five years; •• during the period between the date on which Klépierre comes into pos-
•• none of the members of the Executive Board and the Supervisory Board session of an item of information which, if it were made public, could
have been associated with a bankruptcy or receivership as a member have a material impact on the price of the securities and the date on
of an administrative, management or supervisory body or as Chief which this information is made public.
Executive Officer within the last five years;
•• no conviction and/or official public sanction has been recorded against This prohibition on trading has been extended to include all employees
any member of the Executive or Supervisory Boards; no member has with ongoing or occasional access to insider information. The related
been prevented by a court from acting as a member of an administrative, policies and procedures are set out in an internal procedure updated
executive or supervisory body of an issuing company or from managing on a regular basis by the Business Ethics Department of the Klépierre
or running the affairs of an issuing company in the last five years; Group.
•• there is no potential conflict of interest between the exercise of the duties
relating to the issuing company and the private interests and/or other
duties of any Executive Board or Supervisory Board member.

Klépierre – 2010 Annual report | 121

 Social and
environmental
information
23
1 1. Social indicators required under
the New Economic Regulations Act (NRE)
128 2. Environmental indicators required under
the New Economic Regulations Act (NRE)

122 | Klépierre – 2010 Annual report

Social and
environmental information
1. Social indicators required under the New Economic Regulations Act (NRE)
1. Total compensation and benefits paid during the fiscal year to each corporate officer Group scope
See pages 116-118

2. Total compensation and benefits received during the fiscal year by each corporate officer from controlled companies within the meaning Group scope
of article L. 233-13 of the French Commercial Code
See pages 116-118

3. List of all mandates and functions held in all companies by each of these officers during the fiscal year Group scope
See pages 111-115

4. Total number of employees including employees on fixed-term contracts Group scope

At year-end 2010, Klépierre had 1,495 employees, 24 fewer than at year-end 2009.
The year was marked by heavy turnover (146 open-ended and 82 fixed-term new hirings, with 252 people leaving the company) and by the following trends:
• employment-wise, France and Italy saw a revival in recruitments, while other regions struggled in difficult markets;
• the proportion of employees working outside France was stable: 62% (compared to 63% in 2009), consolidating Klépierre’s international presence
(572 employees in France and 923 abroad);
• there was a slight rise in the number of fixed-term employees to 5.6% of the workforce in 2010 (versus 5.0% in 2009);
• managers made up 46.1% of the headcount, a slight increase on 2009 (43.4%).

5. New hirings by fixed-term and open-ended contracts Group scope

In 2010, Klépierre recruited 228 employees across its whole group scope. This total breaks down as follows:
• 146 under open-ended contracts (nearly two out of three) and 82 under fixed-term contracts;
• 116 women and 112 men;
• 16.7% new graduates (direct from further education or with less than two years’ work experience);
• 6.6% older employees (older than 50).
Some 23% of open-ended hires were renewals of short-term contracts (temporary or fixed-term) or people initially working as outside service providers.
Between 2009 and 2010, new hirings rose by 14.6%.
This trend varied considerably by region, however:
• Iberia continues to feel the repercussions of the economic crisis and recruitments fell by 7.1%;
• Italy/Greece and France/Belgium saw a revival in hiring: +72% in France, +82% in Italy;
• recruitment in Central Europe fell by 25%;
• the headcount in Scandinavia was unchanged.
As part of the drive to better manage employment within the Group, priority was given to internal recruitment via internal mobility. In France, 23% of new hires
were through internal mobility in 2010.
In other countries, a system of regular communication has been introduced between Group entities to encourage internal mobility.

6. Recruitment difficulties Group scope

The economic environment remained tough in 2010 and the jobs market was fairly good for companies. Klépierre had few difficulties.
Nevertheless, France, Poland, Denmark and Norway continued to experience difficulties in certain areas of the business (real estate accountant,
shopping center manager) and internet-related disciplines (graphic designers, webmasters and developers).

7. Dismissals and grounds for dismissal Group scope

The number of dismissals fell slightly to 18 in 2010 (versus 25 in 2009).
The main reasons for dismissal were professional incompetence and gross misconduct.

8. Overtime hours Group scope

Across the Group, a total of 5,512 overtime hours were worked during 2010 (versus to 5,727 in 2009), with France, Italy and Scandinavia accounting
for the majority. Overtime working was particularly concentrated in the accounting and financial functions (during the financial year-end period).

9. Non-company labor Group scope

Temporary staff
Group 2008 2009 2010
Average mothly headcount (FTE) 14.4 11.4 18.9
Temporary staff as % of headcount 0.9% 0.8% 1.3%
Upgrades to fixed-term or open-ended contracts N/A 7 15
Although it grew significantly in 2010, the Group’s use of temporary staff remains limited and is mainly due to temporary replacements of people off sick
and transitional arrangements with a view to future recruitment.
Klépierre works with licensed temporary manpower agencies. The contracts signed with these agencies include very strict clauses on compliance with employment law
and the prevention of illegal subcontracting.

Klépierre – 2010 Annual report | 123

 Social and
environmental
information

10. If applicable, information relating to headcount adjustments, redeployment and career support advice France scope
Klépierre did not apply any workforce reduction and job protection plan in 2010.
Whenever necessary the Group considered all possibilities for reassigning employees either internally or within the BNP Paribas Group.
In 2010, 120 employees changed jobs through dynamic individual management or internal promotion.

11. Organization of working hours Group scope

Working hours and days
In France, the legal working week is 35 hours. All staff receive 28 days’ paid leave per year, all bank holidays and rest days granted under the working hours
reduction (RTT) legislation. The number of these days varies, depending on the annual maximum number of days worked: 206 for supervisory staff, 211 for managers
and 215 for senior managers.
Since 2008, Klépierre employees have been donating one day of their RTT rest days to fund initiatives designed to improve the self-sufficiency of the elderly
or disabled in society.
Time Savings Account (CET)
Employees with more than 12 months’ service may benefit from a Time Savings Account (Compte Epargne Temps, CET) in which to save paid leave and/or rest days
under the RTT arrangements.
• The CET may be added to on no more than ten occasions during any calendar year for employees on normal working hours and 15 for fixed-salary employees
and/or those aged over 50.
• Saved days may be taken as additional leave, time off to care for a dependent relative (with an extra 10% contribution from the Company) or pre-retirement leave.
They can also be used to make up for hours or days unworked during a transition to part-time working, for hours of training received outside working hours or for
unpaid leave taken under the Fongecif arrangements.

12. Working hours for full-time employees Group scope

The average number of hours worked per week by a full-time employee is as follows:
• 35 in France;
• 37.8 in Scandinavia (Denmark, Norway and Sweden);
• 39.6 in Iberia (Spain and Portugal);
• 39.5 in Italy and Greece;
• 40 in Central Europe (Poland, Hungary, Czech Republic and Slovakia).

13. Working hours for part-time employees Group scope

Part-time working is the choice of individual employees who request it for health or personal reasons. Jobs and the working structure are therefore rearranged
accordingly without compromising the Company’s organizational structure.
The proportion of employees working part time remains fairly constant from year to year:
• 2008: 5.9%;
• 2009: 5.8%;
• 2010: 5.8%.
Working 80%-time remains the most popular choice (69% of part-time workers).

14. Absenteeism and its causes Group scope

Rate of absenteeism excluding maternity leave
• 2008: 1.3%;
• 2009: 2.1% ;
• 2010: 1.9%.
On the basis of like-for-like headcount, the number of days lost through illness fell by 9.3% compared with 2009.

15. Compensation Group scope

The annual average gross salary (open-ended and short-term contracts) was:
• 43,500 euros in France;
• 67,000 euros in Scandinavia;
• 37,900 euros in Iberia;
• 33,500 euros in Italy/Greece;
• 22,200 euros in Central Europe.

16. Compensation trends Group scope

In 2010, total Group compensation (salaries and variable compensation) rose by 2% based on individual performance. (excluding
In France, the annual pay round resulted in a general increase in 2010. In May 2010, employees meeting the conditions set by the agreement received a pay raise Steen & Strøm)
equivalent to 1.2% of monthly salary, subject to a minimum of 450 euros for a full-time employee, and capped at 800 euros.

17. Social security charges Group scope

The trend in social security charges within the consolidated Group was as follows:
• 2008: 14.8 million euros;
• 2009: 21.5 million euros;
• 2010: 22.2 million euros.

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18. Application of the provisions contained in Chapter IV, Book IV of the French Labor Code (optional and mandatory profit-sharing Group scope
and employee savings scheme)
Employee participation in BNP Paribas capital increase
2008 2009 2010
France 69% 74% 61%
International 13% 11.5% 11.3%
Mandatory and optional profit-sharing
In France, employees are covered by the BNP Paribas group mandatory profit-sharing agreement. A further optional profit-sharing agreement specific
to Klépierre is also in operation.
Mandatory and optional profit-sharing as a share of gross annual compensation
2008 2009 2010
15% 10% 13%
Employees’ entitlements and voluntary contributions can be invested in the employee savings scheme or collective pension funds, sponsored by the Company.

19. Gender equality within the Company Group scope

The headcount includes 814 women and 681 men, with a slightly higher proportion of women in France than in other countries (59% compared to 51.7%).
Gender equality:
• women in the workforce: 54.4%, unchanged from previous years;
• women in new hirings: 51% (58% in 2009);
• women in management: 40.5% (41.7% in 2009);
• women being promoted: 60% of employees who were promoted were women (out of 134 promotions in 2010, 80 went to women);
• women in training: 72%.
Group commitments and actions:
• signature of the Diversity Charter in July 2010;
• continuing commitment to diversity and equality of opportunity for women in the workplace formalized in the Gender Equality Agreement signed in 2007:
the Compulsory Annual Negotiation agreement (Négociation Annuelle Obligatoire or NAO) lays down specific actions to correct unjustified differences
in pay between men and women. As a result 13,500 euros were paid to five women employees in May 2010. For the first time, this agreement also sought to correct
salary discrepancies between employees with identical responsibilities (14,000 euros paid to ten employees).

20. Labor relations and review of collective agreements France scope

Labor relations within Klépierre were fruitful and constructive in 2010.
Agreements signed
• Compulsory annual negotiation (NAO): see section 16 of the NRE appendix.
• Profit-sharing agreement: a new three-year agreement was negotiated with the unions.
• Agreement on the complemantary insurance scheme: elimination of the delay to new employees joining the scheme and optional subscription by employees
on fixed-term contracts of less than twelve months.
Re-election of the CHSCT
The year also brought new elections for the members of the Health, Safety and Working Conditions Committee (CHSCT in French). The CHSCT works with
the Management to help protect employees’ physical and mental health and safety and to improve working conditions. Specifically, it visits sites and analyses
professional risks and working conditions.
Agreements in force
• Older employee agreement: following up on commitments made in 2009, the Group put in place measures to help workers aged 55 and over manage the second
phase of their careers (offers of special training, career interviews, adjustments to working time).
• Gender equality agreement: continued implementation of measures to respect and extend equal opportunities and treatment of men and women throughout
their working life (recruitment, career planning, correction of wage disparities and work-life balance).
• GPEC agreement (forward-looking management of jobs and skills): the Group continued its measures to maintain and develop the competitiveness
of its workforce by reinforcing their skills to suit changing markets, preparing employees for the working environment that they may face or wish to explore
and better matching the skill-set of employees to the evolving needs of the Company.

21. Health and safety conditions Group scope

All Group employees benefit from health and safety measures that are at least compliant with French and European requirements:
• Training and awareness raising sessions on first aid and emergency treatment were given to all or some employees;
• Accidents at work in 2010: 20 across the Group, mainly road accidents or accidents when using public transport;
• Occupational health team: in France, Klépierre employees see the occupational health doctor for an initial consultation when they join the company
and then have check-ups every two years or as required in light of personal circumstances (return from long sick-leave, maternity leave, etc.). Employees may also
request an appointment with the occupational health team whenever they wish;
• CHSCT: the committee responsible for employees’ health and safety issues met four times in 2010.
Meanwhile, Klépierre continued to take positive preventive action, and monitor health and safety risks, as follows:
Ergonomics:
• during medical consultations, special attention is paid to employees who work at a computer screen (which imposes high demand in terms of visual comfort
and may pose a risk of repetitive strain injury) in order to warn them of the risks involved;
• printed information about workstation design and use is supplied, together with personal advice.
Preventative initiatives to address major public health issues:
• as part of its continuing commitment to preventing professional risks, Klépierre launched a project to prevent psychological risks in cooperation with the CHSCT.
As from 2011, a working group will be responsible for establishing monitoring indicators, identifying stress factors within the organization and recommending
preventative measures;
• as well as stress, which is given particular attention during medical check-ups, occupational health doctors warn employees about smoking and offer advice
and help stopping, following the entry into force of the decree of November 15, 2006 banning smoking in public places.
Other actions: as every year, the Group organized campaigns for blood donors and flu vaccination.

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22. Training Group scope

Group training figures:
• access to training rose slightly to 78% (77% in 2009);
• more than 29,000 hours of training in 2010, an average of 3.4 days per employee (three days in 2009).
SégéCampus, the Klépierre skills university, plays a major role by providing training in skills specific to the commercial real estate sector:
• in France, SégéCampus delivered around 7,600 hours of training in 2010;
• SégéCampus also trains employees in the Group’s international subsidiaries: In 2010, around fifty benefited from training programs totaling more than 700 hours.
• SégéCampus is also involved in the induction of new employees, with the organization of Welcome Days for all Klépierre Group employees in France and the
international subsidiaries.
In France, 63% of training hours were covered by the DIF (Droit Individuel à la Formation) employee training entitlement in 2010, no change from 2009.
Sandwich courses, a priority for the Group
In France, Klépierre plays an active role in encouraging young people into the world of work, and training them in the types of jobs available in its shopping centers
and support services:
• 55 young people worked with the Company in 2010.
• Young people working for the Company as part of sandwich courses (in preparation for BTS or further-education qualifications) represented 5.6% of the labor force
compared to 5% in 2009. 43 work-experience placements were also completed (whilst studying for CAP or further-education qualifications), including 16 that were
longer than three months.

23. Employment and integration of disabled employees Group scope

At the end of 2010, Klépierre employed 18 people with disabilities; five more than in 2009. The Group is continuing and building on its external partnerships
in order to promote the employment and integration of disabled employees on 3 fronts:
• Recruitment
– In France, proactive collaboration with Hanploi.com led to the hiring of 2 employees on open-ended contracts.
– One young person with a disability also completed a training period as part of a sandwich course.
– As part of Disability Employment Week, Klépierre took part in the jobs fair and a Handicafé© organized in Paris by ADAPT (Association for social and professional
integration of people with disabilities).
• Awareness raising
The success of efforts to recruit and integrate workers with disabilities into the Company for the long term depends on raising awareness throughout the management
structure and among employees:
– 13 employees affected were trained in how to welcome and integrate workers with disabilities by outside specialists;
– as part of Sustainable Development Week in April 2010, Group subsidiaries also worked to raise disability awareness among their employees. In Hungary
for instance, a role-playing exercise sensitized employees in head office to the experience of living with visual disability.
• Service providers
The Group calls on the services of protected sector companies, primarily in respect of catering services, landscape maintenance and the recycling of electronic
hardware, thereby directly contributing to jobs for disabled workers:
– in France, more than 30,000 euros of orders were placed with the protected sector in 2010 (up by 80% compared to 2009);
– use of the protected sector also expanded in some subsidiaries. In the Czech Republic this system supported the indirect employment of 1.3 worker with disabilities.

24. Welfare Group scope

Works Council
In France, national social and cultural projects are run jointly by an association of Works Councils involving several subsidiaries of the BNP Paribas Group.
Local projects are managed by Klépierre’s own Works Council. Projects are multifarious, ranging from trips for employees to holidays for children, welfare support
for families and the provision of cultural spaces, including: CD, video and media libraries as well as cheap theatre and cinema tickets.
A sports and cultural association allows people to engage in different team sports and numerous cultural activities.
Family day
In 2010, more than 80 children of employees were welcomed into work for France’s first Family Day, at the Paris head office, in the South-East region and in Hungary.
Family Day fits into the Group’s diversity policy by promoting work/life balance for its employees. The event was a chance to support charity also. Children were asked
to bring in a toy they no longer used, as a result of which more than 200 toys were donated to the charity Hôpital Assistance International. Another 3,000 new toys
were passed onto the same charity after a collection at three shopping centers.
Ségénial
Launched in 2009, the Ségénial association seeks to encourage the personal commitment of Group employees in charitable projects by forging networks
and partnerships and by Klépierre funding projects.

25. Relations between the Company and associations promoting integration, teaching establishments, environmental organizations, Group scope
consumer groups and local citizens
Targeted recruitment
• In 2010, in a generally favorable labor market, Klépierre launched a number of highly targeted initiatives:
– real estate jobs: participation in the ESPI’s “job dating” scheme and the ESTP forum;
– finance jobs: participation in the Forum Dauphine Entreprises;
– promotion of diversity: participation in the Open ESSEC-Hanploi.com Forum, the Emploi/Handicap Forum and a Handicafé© organized by ADAPT
as part of the Disability Employment Week.
• A supervisory relationship is also in place with Copernic, a post-masters program for students in Central and Eastern Europe. Klépierre recruited trainees
from this program for the third time in 2010.

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25. Relations between the company and associations promoting integration, teaching establishments, environmental organizations, Group scope
consumer groups and local citizens (continued)
Relations with environmental organizations, consumer groups and local citizens
• The overwhelming majority of shopping centers were involved in initiatives to raise money for good causes or to encourage the economic and/or social development
of their local areas. As focuses for shopping and leisure, shopping centers have become local public spaces in the truest sense of the word, and are available to any
group involved in civil society. In France and internationally, they now host a large number of events organized and supported by social organizations. Events took all
sorts of forms:
– providing space for local initiatives (some of these being permanent projects);
– organizing forums on environmental themes;
– health initiatives, particularly in Poland where the Group’s centers have offered free medical consultations for expectant mothers;
– job creation initiatives (job dating and job fairs).
Participation in Telethon 2010: Klépierre joined in the Telethon charity event, at head office and in many of its shopping centers:
• 73 shopping centers mobilized to collect more than 110,000 euros donated to the Telethon;
• in 2010, the unused portion of the Works Council budget was also donated to the Telethon charity;
• employees also donated 125 used mobile phones for recycling and resale with all proceeds going to the Telethon. Klépierre also made a donation to the French
Muscular Dystrophy Association (Association française contre les myopathies).

26. Ways in which the Company takes into account the territorial impact of its activities in terms of employment and regional development Group scope
Local job creation
• Whenever the Company opens or extends a shopping center, its teams work alongside local public authorities to create as many local jobs as possible. Agreements
are routinely signed with the retailers taking space in the center and the local authorities to prioritize local jobseekers when hiring.
• In “sensitive” inner-city areas, the Company has built close working relationships with local organizations.
• For instance, the Corvin center in Budapest created 850 full-time jobs when it opened in October 2010.
Example: events accompanying the opening of the Le Millénaire center in Aubervilliers (April 2011):
• creation of a dedicated website showing the jobs on offer at the future shopping center (www.lemillenaire-emploi.com);
• active participation in jobs meetings held in the employment catchment area;
• “100 chances – 100 jobs” project: this program was initiated by Schneider Electric and brings together companies in a single employment catchment
area to offer young people from “sensitive” areas, who have been identified by the local support sector, individualized paths back into long-term employment.
Klépierre was one of the founding members of this initiative and has been running the project in Aubervilliers and Saint-Denis since September 2010,
in partnership with the prefecture and state employment organizations.

27. Scale of subcontracting – How the Company selects its subcontractors on the basis of their compliance with ILO standards Group scope
Subcontractors are selected on the basis of their compliance with CSR standards.
• Sustainable development criteria are included in all contracts with companies providing maintenance and security services at French and foreign shopping centers
managed by Klépierre subsidiaries.
• Subcontractors must also submit declarations stipulating that they will only use employees who are legitimately employed under local regulations.

28. Promotion among subcontractors of compliance with the provisions of the fundamental ILO conventions Group scope
All countries where Klépierre operates have ratified the eight fundamental conventions of the ILO.
The Group is able to confirm that no child is employed by Klépierre or by any of its subcontractors.

29. Inclusion by foreign subsidiaries of the impact their activities have on regional development and on the local population Group scope
Klépierre also requires foreign subsidiaries and shopping centers to follow a set of rules for sustainable development in their relationships with suppliers.
Standard code of conduct clauses consistent with these criteria have also been incorporated into the contracts signed with suppliers, alongside the obligation
to have a competitive bidding process every three years and to give priority to companies that comply with European standards.

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2. Environmental indicators required

under the New Economic Regulations Act (NRE)

Shopping centers
The monitoring of environmental indicators imposed by the NRE legislation affects all assets owned and managed by Klépierre in the 13 countries
of continental Europe where the Group is active.

Offices
Offices are a minor part of the company’s business, making up 3.7% of its assets by value. For existing assets, Klépierre makes recommendations
to its tenants. However, for new projects, Klépierre includes environmental requirements in the specifications. Information regarding the Group’s
head office buildings is displayed below.

1. Consumption of water resources Group scope

Major efforts have been made in recent years to measure water use, with the introduction of numerous sub-meters and more detailed analysis of consumption in both
the common and private areas of centers.
Lessees can be quickly notified of any abnormal consumption and take corrective action.
The three biggest uses of water in a commercial building are:
• Sanitary: several dozen waterless, non-chemical toilets have been installed, notably in France and Poland. Each of these installations saves approximately
185 cubic meters of water every year - a figure equivalent to the annual consumption of a household of between 4 and 6 people. Their installation should soon
become commonplace.
• Cooling towers: the program to replace cooling towers with adiabatic systems will save substantial amounts of water. In 2010 the new systems were introduced
in the Blagnac, Orange and Bordeaux Saint-Christoly centers in France.
• Landscaped areas: the watering of landscaped areas is another big area of consumption. Many centers, and especially those in Spain and Portugal where water
shortages are an increasing reality, have therefore reduced their watering requirements considerably. The installation of more efficient systems and/or the planting
of species that require less water and are better adapted to the local climate are two of the preferred courses of action.
Recovery and reuse of rain water already saves considerable amounts of water in some centers, such as Debrecen Plaza in Hungary, opened in 1999,
and will be introduced as part of the extension and renovation of the Bègles Rives d’Arcins center in France.

2. Consumption of raw materials Group scope

The Group does not directly consume raw materials, except as a result of its tertiary activities (office consumables, paper, etc.). Klépierre is nonetheless well aware that
the production and use of the consumer goods sold in its shopping centers and the resources used by all its stakeholders account for the majority of the environmental
impact by the Group’s assets. However, this issue does not fall within the direct operational responsibility of the Group.
Current projects: ultimately, the main issue is the treatment and the recycling of the waste generated by tenants’ supply chains and by customers visiting their
premises (see indicator 6).
Development phase: the Group works closely with property developers within an approved environmental framework.
• Attention to “green site” policies implemented by developers.
• Systematic consideration of eco-friendly materials.
• Attention to the origin of the raw materials used. Timber must be certified under the PEFC or FSC schemes.
Head offices:
• Policy to limit paper consumption. Sorting of paper and other office consumables (plastics, printer cartridges and batteries) in most buildings.
• Use of eco-friendly paper is also widespread.
• All documents printed recto/verso in Poland (including contracts).
Regular initiatives are implemented to raise awareness of these issues.

3. Energy: consumption of energy, measures taken to improve energy efficiency and use of renewable energy Group scope
Klépierre is at the same time landlord, developer and property manager. Designing for management therefore requires that it takes a global approach.
Existing assets: continuous improvement, notably involving teams and service providers on site and by sharing best practice.
Projects under development: contributions of skills and feedback from all staff and stakeholders is incorporated upstream in the design phase of new buildings.
Innovative solutions tailored to local conditions.
Bioclimatic approach
• Where possible use passive methods to cut energy consumption. Design for building density and insulation in order to improve thermal inertia and limit energy loss.
Studies are also systematically conducted of site climatic and weather conditions.
Energy audits
• The best way of identifying and prioritizing actions to improve building energy efficiency. 56 audits were carried out in 2010.
Continual improvement of installations
• Replacement by higher performance equipment.
• Centralized Technical Management (CTM) systems automate the operation of center installations, making it possible to minimize energy consumption.
The vast majority of centers now have such systems.

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3. Energy: consumption of energy, measures taken to improve energy efficiency and use of renewable energy (continued) Group scope
Air conditioning and heating
Many initiatives to reduce energy impact without compromising customer comfort.
• Upgrade of heating or air conditioning systems.
• Optimized scheduling of the times when equipment is in use.
• Use of heat exchanges to channel hot or cold air where it is needed. The Novodvorská Plaza center (Czech Republic) revamped its CTM system in 2010 to introduce
free cooling.
• Limiting the sources of heat to reduce the need for air conditioning: four Hungarian centers have installed anti-UV filters on their windows.
Natural light
• Emphasize the use of natural daylight, whilst avoiding the direct sunlight that could lead to excessive demand for air conditioning and visual annoyance
for customers.
• New projects (such as the Le Millénaire center at Aubervilliers) are designed to use as much natural light as possible. Same approach to renovations: construction
of light shafts in Noisy-Arcades (France, opened March 2010).
Artificial light
• Systematic installation of low-energy lighting (T5 tubes or LEDs) in new centers, when replacing equipment in existing centers or during renovation work.
• Relamping of the car parks at Passages de l’Hôtel-de-Ville (Boulogne-Billancourt, France) in 2010: 46% reduction in the car park’s energy consumption.
Use of renewable energies
• Systematic study of options for renewable energy generation in new projects.
• Consideration also of options for existing centers. The installation of photovoltaic panels is currently the preferred option.
• Many centers have also entered into supplier contracts guaranteeing supplies of electricity generated from renewable sources: centers in Belgium, Norway, Sweden
and some in Spain run wholly on renewable energy. Danish centers use 95% renewables.

4. Discharges into air, water and soil Group scope

Air discharges
• Carbon footprint measured since 2008.
• All the greenhouse gas emissions studies highlight, for instance, the significant impact of refrigerant gas leakages.
• Replacement of these refrigerants with less harmful gases is being accelerated in all existing assets.
Water discharges
2 main approaches are applied in this area:
• Creation of on-site temporary holding tanks to reduce the risk of too much rain water entering mains drainage systems:
– by the creation of planted roofs or underground or landscaped holding tanks;
– by direct infiltration, whilst ensuring compliance with authorized pollution levels. One of the most effective ways of achieving this is to use grass-covered
or stabilized parking areas.
• Controlling the pollution levels of wastewater discharged by shopping centers (communal and private areas):
– checks on toxic discharges from certain specialist retail units;
– periodic cleaning of drainage systems;
– suppliers asked to limit contamination of wastewater by using environmentally-friendly products for cleaning and maintenance.
Conditions of soil usage and discharges
• Environmental impact studies conducted for all construction and renovation projects.
• Soil pollution studies systematically conducted. Pollution remediation work is carried out where necessary before work begins on-site, as with the site
of the future Le Millénaire shopping center in Aubervilliers.
• Car park oil separators: main soil pollution risk factor. However, the gasoline storage tanks of filling stations operated in our car parks by third parties
are not the direct responsibility of the Group.

5. Noise and odor pollution Group scope

Problems of noise and odor pollution are addressed at all levels:
• new construction and restructuring projects: green sites and special measures taken alongside with local authorities;
• day-to-day management of centers:
– in newer centers, waste storage facilities are air-conditioned to reduce odor pollution;
– special measures are agreed with local authorities (noise barrier walls, particular operating times) to reduce noise pollution;
– stores are also asked to limit noise levels in their own areas and pay the closest-possible attention to allergy risks posed by any fragranced products they use.

6. Waste treatment Group scope

Waste produced by shopping centers is mainly due to visiting customers and the business operation of the stores.
The solution therefore lies in ensuring the most efficient means of recovering, processing and recycling this waste.
• Waste sorting: all centers separate out cardboard (with some rare exceptions when the hypermarket recycles waste or when there are no waste processing
solutions available locally). Many also recycle other waste, such as plastics, organic waste, glass and batteries. Some centers, like Parque Nascente in Portugal,
Los Prados in Spain and Metro Senter in Norway, now sort their waste into some 15 different streams.
• Ensure it is collected and recycled: as part of reducing the volume of waste, new compactors have been installed on several sites in France, including the Blagnac
and Saint-Orens centers. These compactors reduce the waste collection frequency by half, and therefore also halve the related greenhouse gas emissions from
collection vehicles.
• New initiatives to raise customer awareness of waste sorting: the Novodvorská Plaza center (Czech Republic) recently introduced mail sorting for center
customers and launched simultaneous awareness-raising initiatives.

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7. Measures taken to restrict damage to ecological balance, natural habitats and protected animal and plant species Group scope
The Group takes action in a number of different ways to limit its impact on natural habitats, but with particular focus on respect for the site itself, and the way
in which buildings are integrated into the environment.
• Respecting the topography and slope of the land to avoid excessive excavation and minimize the impact on the natural environment.
• Taking care in the quantity and quality of landscaping:
– Working in this way has ensured that the future Le Millénaire shopping center at Aubervilliers will include more than 12,000 sq.m. of landscaped environment;
– The average landscaped area of shopping centers is approximately 2,800 sq.m. per site.
• Use local species wherever possible, to maintain the biodiversity of the surrounding area and limit water consumption.
• Particular attention to the integration of facilities within the environment: landscaped water holding tanks and planted screens to conceal technical services areas.
• Enhancement of surroundings, for instance by using low-impact communication routes wherever possible;
– The Rives d’Arcins project in Bègles uses a covered walkway to ensure the safe movement of pedestrians and cyclists within the site.
• Promote natural water flows, limiting the waterproof surfaces used on site.
• Install special equipment to protect endangered plant and animal species:
– Rehabilitation of a stream in the Odysseum center (Montpellier);
– Installation of bee hives on the roof of the future Le Millénaire center (Aubervilliers).

8. Environmental evaluation and certification procedures Group scope

The Group plays an active part in national and international environmental certification initiatives.
Projects under development: BREEAM and HQE®
• At the end of 2008, the Group took the decision to ensure BREEAM (BRE Environmental Assessment Method) certification of all its new developments,
with a minimum level of its “Very Good” rating. To date, 16 projects have been studied for certification.
• The Group may also seek HQE® benchmarking for its French projects.
• The future Le Millénaire shopping center in Aubervilliers (scheduled to open in April 2011) will be the Group’s first center to be awarded both certifications.
Assets in operation: ISO 14001, Eco-Lighthouse and Key2Green
• ISO 14001: in Iberia, the head office of the Spanish subsidiary, its branches and the La Gavia center in Vallecas (Madrid) are now ISO 14001 certified
as is the Parque Nascente center in Portugal. They will soon be followed by the Los Prados and Albacete Los Llanos centers and certification will be gradually
extended throughout the Group’s other regions.
• Eco-Lighthouse and Key2Green (Scandinavia): Teams working in existing assets have long been working towards their local certifications: Eco-Lighthouse
in Norway and Key2Green in Denmark. Steen & Strøm Norway has all its centers certfied and is the most certified private operator in the country.
Socially responsible investment: presence in stock market indices
In 2010, the Group formed part of the following stock market indices:
• Dow Jones Sustainability Index World;
• Dow Jones Sustainability Index Europe;
• FTSE4Good Index;
• ASPI Eurozone;
• Ethibel Excellence;
• Ethibel Pioneer;
• Kempen/SNS European SRI Universe.
This is a positive indication of the way the Group seeks to meet its social and environmental responsibilities. Klépierre is the only real estate company in continental
Europe to be represented in all of these indices.

9. Training and information given to employees Group scope

Employee involvement is a precondition for a successful sustainable development policy. These issues are assuming an increasingly important role in the internal
communication media used within the Group.
Newsletter: 3 issues of Quintessence were published in 2010.
• Aims: to highlight exemplary achievements at European level and to share and disseminate best practice.
• Sent to all Group employees and external stakeholders. Also available on the Company’s website.
E-learning:
• Training module developed in 2009.
• Offered to all employees in the eight languages spoken within the Group (not including Steen & Strøm).
• Steen & Strøm has its own e-learning site on sustainable development, Godt Valg, which is also open to tenants and other stakeholders.
Other communication media: environmental, social and community issues are regularly topics in regional and national seminars and in presentations
by the management team.

10. Existence of internal environmental management departments, resources dedicated to reducing environmental risks and organizational structure to deal Group scope
with accidental pollution incidents with effects beyond the scope of Group company premises
Internal environmental management resources
Environmental impacts are managed and measures taken to minimize them at multiple levels:
• Local teams: these manage shopping centers and their facilities and limit their direct and indirect impact on the environment.
• Operational services in each country: these collect data and identify environmental risks (asbestos, Legionella, water, other pollution sources, structures, etc.).
• Sustainable Development Department: it defines and implements a policy of annual initiatives, raising awareness amongst Group employees and providing
ongoing monitoring of these issues.

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10. Existence of internal environmental management departments, resources dedicated to reducing environmental risks and organizational structure to deal Group scope
with accidental pollution incidents with effects beyond the scope of Group company premises (continued)
Resources dedicated to reducing environmental risks and organizational structure to deal with accidental pollution incidents with effects beyond
the scope of Group company premises
The resources and systems implemented supply the regular data needed to correct issues when identified.
• Natural and Technological Risk Prevention Plans (PPRNT in French).
• A specially-developed risk management system has been in place since 2006 (covering asbestos, Legionella, water, building structures and roofs)
which allows accurate analysis of situations.
• Risk of Legionella disease:
– removal of cooling towers wherever technically possible. However, shopping centers that still use them are methodically monitored to avoid any spread of Legionella;
– a Legionella risk analysis of all relevant sites is conducted in partnership with maintenance companies, compliance authorities and analytical laboratories;
– a preliminary alert system ensures rapid response by maintenance companies where there is any doubt over contamination, which may extend to shutting down
and disinfecting towers where necessary. These checks have also become the norm in other Group operating countries, with European standards and thresholds
being applied.
• Flood risk prevention plan (PPRI in French).
• Structural and roof audits
The multi-year budgets developed out of this approach also provide Klépierre with a clearer view of which areas should take priority, what its legal obligations are
and which renovation programs should be initiated.
Specific crisis management procedure that involves all managers: depending on the risk identified, this procedure provides for the setting up and operation
of a monitoring and communication group until the crisis has passed. Every manager has received special training in identifying, understanding and reacting
appropriately to such situations.

11. Expenditure, amounts of provisions and guarantees for environmental risks and amount of any indemnities paid Group scope
• Expenditure devoted to prevention of possible consequences of the company’s business on the environment: Klépierre’s expenditure in this area
is all integral to its business activities and cannot therefore be easily isolated.
• Amount of provisions and guarantees in place to cover environmental risks: none.
• Amount of indemnities paid during the fiscal year following court decisions over environmental issues: none.

12. Measures taken to ensure that the activities comply with environmental laws and regulations Group scope
As part of incorporating changes resulting from the adoption of new laws and regulations likely to have a significant impact on the Group and the healthy growth
of its business, the Group legal departments work with other Klépierre departments and the Company’s network of external counsels to gather, process and distribute
data about the legislation applying in the various countries in which the Group operates.

13. Information on targets assigned to subsidiaries abroad Group scope

• Klépierre’s international development policy is based on the same criteria of environmentally-friendly construction. Our local teams are involved in the design,
selection and quality of installation to ensure compliance with BREEAM construction methodologies.
• Our project teams of architects, project managers and contractors are encouraged to design buildings that consume less energy and reduce environmental impact.
• The monitoring indicators already in place for our portfolio have enabled us to reduce or stabilize our energy and fluid consumption in our operating sites. The issues
of identifying effective technical solutions and renewable energy generation sources are analyzed on a case-by-case basis.
• Action plan 2010-2015: Each region has its own five-year action plan, developed to take full account of specific national features, whilst maintaining full consistency
with Group commitments. Additional information about this action plan is available in the Sustainable Development section of the Company’s website.

Klépierre – 2010 Annual report | 131

 Consolidated
financial statements
at December 31, 2010
33
1 1. Comprehensive income statement (EPRA model)
134 2. Consolidated statement of financial position (EPRA model)
136 3. Consolidated cash flow statement (EPRA model)
137 4. Statement of changes in consolidated equity
138 5. Notes to the consolitated financial statements
194 6. Statutory auditors’ report on the consolidated financial statements

132 | Klépierre – 2010 Annual report

1. Comprehensive income statement (epra model)
Notes 12/31/2010 12/31/2009
Lease income 6.1 930 170 895 470
Land expenses (real estate) -2 700 -2 694
Non-recovered rental expenses -38 338 -36 997
Building expenses (owner) -61 359 -58 974
Net rent 827 773 796 805
Management, administrative and related income 76 486 80 783
Other operating revenue 22 042 27 097
Survey and research costs -3 995 -3 281
Payroll expenses 9.1 -104 630 -103 735
Other general expenses -35 408 -34 511
Allowances for depreciation and provisions on investment property 6.2 -407 848 -369 142
Allowances for depreciation and provisions on PPE 6.2 -8 471 -5 043
Provisions -861 -4 295
Gains on the disposal of investment property and equity investments 6.3 327 357 364 612
Net book value of investment property and equity investments sold 6.3 -200 046 -277 635
Income from the disposal of investment property and equity investments 127 311 86 977
Profit on the sale of short term assets -1 859 -334
Goodwill impairment -1 100
Operating income 489 440 471 321
Net dividends and provisions on non-consolidated investments -94 -22
Net cost of debt 6.4 -295 418 -291 905
Change in the fair value of financial instruments -958 0
Effect of discounting -575 -869
Share in earnings of equity method investees 1 736 2 369
Profit before tax 194 131 180 894
Corporate income tax 6.5 -11 690 26 784
Net income of consolidated entity 182 441 207 678
Of which
Group share 124 574 162 102
Non-controlling interests 57 867 45 576
Net earnings per share in euros 10.2 0.7 0.9
Diluted earnings per share in euros 10.2 0.7 0.9
In thousands of euros

Notes 12/31/2010 12/31/2009

Net income of consolidated entity 182 441 207 678
Other comprehensive income items recognized directly as equity 40 785 -110 109
– Income from sales of treasury shares -132 -1 103
– Effective portion of profits and losses on cash flow hedging instruments (IAS 39) -23 307 -56 043
– Translation profits and losses 61 509 -63 177
– Tax on other comprehensive income items 2 715 10 214
Share of other comprehensive income items of equity method investees 0 0
Total comprehensive income 223 226 97 569
Of which
Group share 157 022 32 893
Non-controlling interests 66 204 64 676
Comprehensive earnings per share in euros 10.2 0.8 0.2
Diluted comprehensive earnings per share in euros 10.2 0.8 0.2
In thousands of euros

Klépierre – 2010 Annual report | 133

 Consolidated
financial statements
at December 31, 2010

2. Consolidated statement of financial position (epra model)

Assets
Notes 12/31/2010 12/31/2009
Non-allocated goodwill 4.1 132 264 132 492
Intangible assets 4.2 24 146 19 306
Property, plant and equipment 4.3 27 693 23 783
Investment property 4.4 10 879 023 10 708 293
Fixed assets in progress 4.4 795 600 791 458
Equity method securities 4.6 21 101 36 363
Financial assets 4.8 2 515 491
Non-current assets 4.9 37 580 25 847
Interest rate swaps 4.16 28 207 35 394
Deferred tax assets 4.18 84 566 72 829
NON-CURRENT ASSETS 12 032 695 11 846 256
Investment property held for sale 4.5 0 0
Property under construction held for sale 0 0
Inventory 4.10 454 2 674
Trade accounts and notes receivable 4.11 100 108 92 477
Other receivables 4.12 319 890 339 987
– Tax receivables 36 731 38 044
– Other debtors 283 159 301 943
Interest rate swaps 4.16 20 024
Cash and cash equivalents 4.13 300 557 235 951
CURRENT ASSETS 741 033 671 089

TOTAL ASSETS 12 773 728 12 517 345

In thousands of euros

134 | Klépierre – 2010 Annual report

Liabilities
Notes 12/31/2010 12/31/2009
Capital 265 507 254 761
Additional paid-in capital 1 569 970 1 391 523
Legal reserve 25 476 23 270
Consolidated reserves 412 279 437 238
– Treasury shares -70 133 -81 345
– Fair value of financial instruments -220 980 -198 000
– Other consolidated reserves 703 392 716 583
Consolidated earnings 124 574 162 102
Shareholders’ equity, group share 2 397 806 2 268 894
Non-controlling interests 1 267 666 1 262 235
SHAREHOLDERS’ EQUITY 4.14 3 665 472 3 531 129
Non-current financial liabilities 4.15 5 952 508 6 670 504
Long-term provisions 4.17 10 523 9 536
Pension commitments 9.2 12 864 8 620
Non-current interest rate swaps 4.16 279 060 255 055
Security deposits and guarantees 142 186 138 050
Deferred tax liabilities 4.18 434 714 448 223
NON-CURRENT LIABILITIES 6 831 855 7 529 988
Current financial liabilities 4.15 1 618 400 843 089
Bank overdrafts 4.15 120 685 81 100
Trade payables 122 722 101 808
Payables to fixed asset suppliers 50 943 82 143
Other liabilities 4.19 270 077 253 930
Current interest rate swaps 4.16 0 0
Social and tax liabilities 4.19 93 574 94 158
Short-term provisions 0 0
CURRENT LIABILITIES 2 276 401 1 456 228

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 12 773 728 12 517 345

In thousands of euros

Klépierre – 2010 Annual report | 135

 Consolidated
financial statements
at December 31, 2010

3. Consolidated cash flow statement (epra model)

12/31/2010 12/31/2009
Cash flows from operating activities
Net income from consolidated companies 182 441 207 678
Elimination of expenditure and income with no cash effect or not related to operating activities
– Depreciation, amortization and provisions 426 164 380 587
– Capital gains and losses on asset disposals net of taxes and deferred taxes -106 328 -113 761
– Reclassification of financial interests and other items 337 414 339 354
Gross cash flow from consolidated companies 839 691 813 858
Paid taxes -35 091 -24 016
Change in operating working capital requirement 18 879 171 972
Cash flows from operating activities 823 479 961 814

Cash flows from investing activities

Income from sales of investment properties 282 499 239 744
Income from sales of properties under construction – –
Income from sales of other fixed assets 275 212
Income from disposals of subsidiaries 37 441 107 598
Acquisitions of investment properties -185 489 -292 235
Acquisition costs of investment properties -3 568 -2 549
Payments in respect of construction work in progress -357 928 -372 362
Acquisitions of other fixed assets -12 405 -10 646
Acquisitions of subsidiaries through deduction of acquired cash -28 692 -84 129
Change in fixed assets under the "real estate agent" regime –
Change in loans and advance payments granted and other investments 8 149 -70 495
Net cash flows from investing activities -259 718 -484 862

Cash flows from financing activities

Dividends paid to the parent company’s shareholders (1) -223 964 -203 028
Dividends paid to non-controlling interests -59 966 -36 294
Dividends payable 10 971
Change in net cash position 195 149 152 823
Repayment of share premium ­– –
Acquisitions/disposal of treasury shares 1 245 24 893
New loans, borrowings and hedging instruments 2 383 703 2 969 291
Repayment of loans, borrowings and hedging instruments -2 504 024 -2 983 627
Interest paid -330 134 -335 067
Net cash flows from financing activities -527 020 -411 009

Currency fluctuations -11 720 -7 277

CHANGE IN CASH AND CASH EQUIVALENTS 25 021 58 666

Cash at year start 154 851 96 185
Cash at year end 179 872 154 851
In thousands of euros
(1) Dividend paid was 223.9 million euros of which only 34.4 million euros was in cash.

136 | Klépierre – 2010 Annual report

4. Statement of changes in consolidated equity

Capital Capital Treasury Hedging Consolidated Equity, Equity, Total

related shares reserves reserves Group share non- equity
reserves controlling
interests
Equity at December 31, 2008 232 700 1 295 673 -107 934 -151 872 890 551 2 159 118 1 011 238 3 170 356
Changes in accounting methods
Equity at December 31, 2008 – corrected 232 700 1 295 673 -107 934 -151 872 890 551 2 159 118 1 011 238 3 170 356
Capital transactions 22 061 156 324 -3 381 175 004 175 004
Share-based payments
Treasury share transactions 26 589 -2 26 587 26 587
Dividends -37 204 -165 824 -203 028 -36 292 -239 320
Net income for the period 162 102 162 102 45 576 207 678
Gains and losses recognized directly in equity
– Income from disposal of treasury shares -1 105 -1 105 2 -1 103
– Income from cash flow hedging -56 766 – -56 766 723 -56 043
– Translation profits and losses -82 065 -82 065 18 888 -63 177
– Tax on other comprehensive income items 10 727 – 10 727 -513 10 214
Other comprehensive income items – – – -46 039 -83 170 -129 209 19 100 -110 109
Changes in the scope of consolidation 76 022 76 022 227 297 303 319
Other movements -89 2 387 2 298 -4 684 -2 386
Equity at December 31, 2009 254 761 1 414 793 -81 345 -198 000 878 685 2 268 894 1 262 235 3 531 129
Changes in accounting methods
Equity at December 31, 2009 – corrected 254 761 1 414 793 -81 345 -198 000 878 685 2 268 894 1 262 235 3 531 129
Capital transactions 10 746 180 653 -2 206 189 193 189 193
Share-based payments
Treasury share transactions 11 212 -9 267 1 945 1 945
Dividends -223 964 -223 964 -59 966 -283 930
Net income for the period 124 574 124 574 57 867 182 441
Gains and losses recognized directly in equity
– Income from disposal of treasury shares -139 -139 7 -132
– Income from cash flow hedging -26 906 – -26 906 3 599 -23 307
– Translation profits and losses 55 567 55 567 5 942 61 509
– Tax on other comprehensive income items 3 926 – 3 926 -1 211 2 715
Other comprehensive income items – – – -22 980 55 428 32 448 8 337 40 785
Changes in the scope of consolidation 667 667 -1 140 -473
Other movements 4 049 4 049 333 4 382
Equity at December 31, 2010 265 507 1 595 446 -70 133 -220 980 827 966 2 397 806 1 267 666 3 665 472
In thousands of euros

Klépierre – 2010 Annual report | 137

 Consolidated
financial statements
at December 31, 2010

5. Notes to the consolidated

financial statements

139 NOTE 1  ignificant events

S 174 NOTE 7  xposure to risks
E
of the 2010 fiscal year and hedging strategy

1
39 NOTE 2 Accounting principles and methods 1
74 7.1. Rate risk
1
76 7.2. Liquidity risk
1
50 NOTE 3 Scope of consolidation 177 7.3. Currency risk
177 7.4. Counterparty risk
1
57 NOTE 4  otes to the financial statements:
N 178 7.5. Equity risk
balance sheet 1
78 7.6. Legal and tax risks

1
57 4.1. Non-allocated goodwill 178 NOTE 8 Finance and guarantee commitments
1
57 4.2. Intangible assets
158 4.3. Property, plant and equipment 1
78 8.1. Reciprocal commitments
158 4.4. Investment property and fixed assets 178 8.2. Commitments received and given
in progress 179 8.3. Guarantees
159 4.5. Property held for sale 1
79 8.4. Shareholders’ agreements
159 4.6. Equity method securities 1
80 8.5. Commitments under operating leases – Lessors
159 4.7. Joint ventures 181 8.6. Commitments relating to finance leases
159 4.8. Financial assets 181 8.7. Retention commitments
160 4.9. Non-current assets 181 8.8. Payroll expenses
1
60 4.10. Inventory 182 8.9. Employee benefit commitments
1
60 4.11. Trade accounts and notes receivable 183 8.10. Stock options
160 4.12. Other receivables
160 4.13. Cash and cash equivalents 186 NOTE 9 Additional information
161 4.14. Shareholders’ equity
1
61 4.15. Current and non-current financial liabilities 1
86 9.1. Disclosures about the fair value model
165 4.16. Hedging instruments 191 9.2. Earnings per share
168 4.17. Long-term provisions 1
91 9.3. Related companies
168 4.18. Deferred taxes 193 9.4. Post-balance sheet date events
168 4.19. Social and tax liabilities and other liabilities 193 9.5. Statutory auditors’ fees
193 9.6. Identity of the consolidating company
169 NOTE 5 Segment information

1
69 5.1. Segment income statement
170 5.2.  et book value of investment property
N
by segment
170 5.3. Investment by segment

171 NOTE 6 Notes to the financial statements:

comprehensive income statement

1
71 6.1. Operating revenue
171 6.2.  epreciation and provisions on investment
D
properties
171 6.3. Income from sales of investment property and
equity interests
172 6.4. Net cost of debt
172 6.5. Taxes

138 | Klépierre – 2010 Annual report

1. Significant events of the 2010 fiscal year 1.4. Debt

1.1. Investments made On April 7, 2010, Klépierre held two bond issues:
•• a 7-year bond for 700 million euros, maturing April 13, 2017 paying a
The Group invested a total of 430.9 million euros, mainly in France, 4% coupon. The coupon was set at the swap rate plus 125 basis points;
Scandinavia and Italy. the second issue, carried out simultaneously, was a 200 million euro
Over 54% of these investments related to the ongoing projects in: Gare private placement of 10-year bonds maturing April 14, 2020 with a
Saint-Lazare, Aubervilliers (France), Emporia (Sweden) and Aqua 4.625% coupon, identifying a coupon at the swap rate plus 135 basis
Portimão (Portugal). points.
In June 2010, Klépierre also bought 100% of the land for the Val
d’Europe shopping center for 32.7 million euros inclusive of transfer The finance raised allowed the Group to pay down drawings on its bank
duties. lines of credit and to lower by 200 million euros the authorized ceiling
In November 2010, Klépierre and its partner Icade added to their hold- on the bilateral loan arranged in October 2008.
ing in the Odysseum retail park in Montpellier, France, buying a 5 hect-
are block with 21,000 sq.m. GLA next to the shopping center containing 2. Accounting principles and methods
retail, restaurant and leisure space for a total of 35 million euros.
2.1. Corporate reporting
1.2. Disposals
Klépierre is a French corporation (Société anonyme or SA) subject to
On May 31, 2010, Steen & Strøm sold shares in Karl Johansgate 16 AS, French company legislation, and more specifically the provisions of the
the owner of a mall in the middle of Oslo for around 31.5 million euros. French Commercial Code. The Company’s registered office is located
Gross annual lease income for this asset is around 1.2 million euros. at 21 avenue Kléber in Paris.
On January 31, 2011, the Executive Board finalized the Klépierre SA
3 retail assets were sold: consolidated financial statements for the period from January 1 to
•• the shopping center at Douai-Flers-en-Escrebieux, for 30 million euros. December 31, 2010 and authorized their publication.
This mall includes 40 retail units spread over 7,500 sq.m.; Klépierre shares are traded on the Euronext Paris™ market
•• a 2,848 sq.m. mall in rue Candé in Rouen town center. The sale price (Compartment A).
was 11.3 million euros;
•• the Castorama store on rue de Flandre in Paris for 25 million euros. 2.2. Principles of financial statement preparation
3 office buildings were sold:
•• 1 office building in Levallois-Perret in the west of Paris for 36 million In accordance with Regulation (EC) No. 1606/2002 of July 19, 2002 on
euros. This building covers a surface area of 5,833 sq.m.; the application of international accounting standards, the Klépierre
•• 1 mixed office and commercial space complex with surface area of Group consolidated financial statements to December 31, 2010 have
12,042 sq.m. facing rue Marignan and rue Marbeuf in the 8th arrondisse- been prepared in accordance with IFRS published by the IASB, adopted
ment of Paris for 134.5 million euros; by the European Union and applicable on that date.
•• finally, 1 building on rue Diderot in the 12th arrondissement of Paris for The IFRS framework as adopted by the European Union includes the
46.2 million euros. IFRS (International Financial Reporting Standards), the IAS (International
Accounting Standards) and their interpretations (SIC and IFRIC).
1.3. Dividend The consolidated financial statements to December 31, 2010 are pre-
sented in the form of complete accounts including all the information
Klépierre’s general meeting of shareholders held on April 8, 2010 required by the IFRS framework.
approved the payment of a dividend of 1.25 euros per share in respect The accounting principles applied to the consolidated financial state-
of the 2009 fiscal year, with shareholders free to opt for payment either ments to December 31, 2010 are identical to those used when prepar-
in cash or in shares. ing the consolidated financial statements to December 31, 2009, with
This issue increased Klépierre equity by 189.5 million euros through the the exception of the following IFRS and interpretations, which have no
creation of 7,676,081 new shares (4.2% of equity capital). Cash divi- significant effect on the Group financial statements:
dend payments totaled 34.4 million euros. •• amendment to IAS 39: Recognition and measurement — eligible hedged
items;
•• IFRS 3R: Business combinations;
•• IAS 27R: Consolidated and separate financial statements.

Klépierre – 2010 Annual report | 139

 Consolidated
financial statements
at December 31, 2010

These revised standards are applied prospectively and have no affect 2.5.1. Use of estimates
on the accounting treatment of transactions before January 1, 2010.
The effective date or amendment of other standards for which applica- The principal assumptions made in respect of future events and other
tion is mandatory as from January 1, 2010 had no effect on the financial sources of uncertainty relating to the use of year-end estimates for
statements at December 31, 2010. which there is a significant risk of material change to the net book values
Finally, Klépierre has not applied early the new standards, amendments of assets and liabilities in subsequent years are presented below:
and interpretations adopted by the European Union where application
in 2010 was optional. Measurement of goodwill

2.3. Compliance with accounting standards The Group tests goodwill for impairment at least once a year. This
involves estimating the value in use of the cash-generating units to
The consolidated financial statements of Klépierre SA and all its sub- which the goodwill is allocated. In order to determine their value in use,
sidiaries have been prepared in accordance with International Financial Klépierre prepares estimates based on expected future cash flows from
Reporting Standards (IFRS). each cash-generating unit, and applies a pre-tax discount rate to cal-
culate the current value of these cash flows.
2.4. Consolidated Financial Statements –
Basis of preparation Investment property

The consolidated financial statements comprise the financial statements The Group appoints third-party appraisers to conduct half-yearly
of Klépierre SA and its subsidiaries for the period to December 31, appraisals of its real estate assets in accordance with the methods
2010. The financial statements of subsidiaries are prepared for the same described in paragraph 9.1. The appraisers make assumptions
accounting period as that of the parent company using consistent concerning future flows and rates that have a direct impact on the value
accounting methods. of the buildings.
Subsidiaries are consolidated with effect from the date on which they Information on IFRS can be found on the European Commission
were acquired, which is the date on which the Group acquired a con- website:
trolling interest; this accounting treatment continues until the date on http://ec.europa.eu/internal_market/accounting/ias_fr.
which control ceases. htm#adopted-commission
The Group’s consolidated financial statements are prepared on the basis
of the historical cost principle, with the exception of financial derivatives 2.6. Scope and method of consolidation
and financial assets held for sale, which are measured at fair value. The
book value of assets and liabilities covered by fair-value hedges, which 2.6.1. Scope of consolidation
would otherwise be measured at cost, is adjusted to reflect changes in
the fair value of the hedged risks. The consolidated financial statements The Klépierre consolidated financial statements cover all those compa-
are presented in euros, with all amounts rounded to the nearest thou- nies over which Klépierre exercises majority control, joint control or
sand unless otherwise indicated. significant influence.
The percentage level of control takes account of the potential voting
2.5. Summary of material judgments and estimates rights that entitle their holders to additional votes whenever these rights
are immediately exercisable or convertible.
In preparing these consolidated financial statements in accordance with Subsidiaries are consolidated with effect from the date on which the
IFRS, the Group management was required to use estimates and make Group gains effective control.
a number of realistic and reasonable assumptions. Some facts and
circumstances may lead to changes in these estimates and assump- The Group consolidates the Special Purpose Entities (SPEs) formed
tions, which would affect the value of the Group’s assets, liabilities, specifically to manage individual transactions (even where it has no
equity and earnings. equity interest), provided that the Group exercises substantial control
over the relationship (the business of the entity is conducted exclusively
on behalf of the Group, and the Group holds the decision-making and
management powers). The Group has no Special Purpose Entities.

140 | Klépierre – 2010 Annual report

2.6.2. Consolidation method The difference between the price paid to acquire the shares of consoli-
dated companies and the Group’s percentage interest in the net fair
The consolidation method is not based solely on the percentage of legal value of their identifiable assets and liabilities on the date of acquisition
ownership of each subsidiary: is recognized as goodwill.
•• majority control: full consolidation. Control is presumed to exist where On the acquisition date, the acquiring company recognizes positive
Klépierre directly or indirectly holds more than half of the company’s goodwill as an asset. Negative goodwill is immediately recognized in
voting rights. Control is also presumed to exist where the parent com- the income statement.
pany has the power to direct the financial and operational policies of the In accordance with IFRS 3 “Business Combinations”, goodwill is not
company and appoint, dismiss or convene the majority of the members amortized. However, it must be tested for impairment at least annually,
of the board of directors or equivalent management body; and more frequently if events or changes in circumstance indicate pos-
•• joint control: proportional consolidation. Joint control exists where oper- sible impairment.
ational, strategic and financial decisions require unanimous agreement For the purposes of this test, goodwill is broken down by cash-gener-
between the controlling parties. The agreement is contractual, subject ating unit (CGU), which is defined as the smallest identifiable group of
to bylaws and shareholder agreements; assets that generates measurable cash flows.
•• significant influence: consolidation using the equity method. Significant Intangible assets are recognized separately from goodwill where they are
influence is defined as the power to contribute to a company’s financial individually identifiable, i.e. where they arise from contractual or legal
and operating policy decisions, rather than to exercise sole or joint con- rights or where they can be separated from the business activities of the
trol over those policies. Significant influence is presumed where the acquired entity and are expected to generate future economic benefits.
Group directly or indirectly holds 20% or more of an entity’s voting rights. Any adjustments to assets and liabilities recognized on a provisional
Holdings in associated companies are initially recognized in the balance basis must be made within twelve months of the acquisition date.
sheet at cost, plus or minus the share of the net cash position generated
after the acquisition, minus impairment; 2.7.2. Business combinations as from January 1, 2010
•• no influence: the company is not consolidated.
Changes in equity of companies consolidated using the equity method The rules set out above were modified by adoption of IFRS 3 (Revised).
are reported on the assets side of the balance sheet under “Investments The main changes were as follows:
in associates” and under the corresponding equity item on the liabilities An entity must determine whether a transaction or other event represents
and equity side. Goodwill on companies consolidated using the equity a business combination as defined by IFRS 3, which stipulates that the
method is also reported under “Investments in associates”. assets and liabilities acquired must constitute a business. A business is
an integrated set of activities and assets that is capable of being con-
2.6.3. Intercompany transactions ducted and managed for the purpose of providing a return (dividends,
cost savings or other economic benefits) directly to investors.
Intercompany balances and profits resulting from transactions between In deciding whether a transaction is a business combination the Group
Group companies are eliminated. The internal profits eliminated relate notably considers whether a set of integrated activities is acquired
chiefly to the internal margin made on development fees incorporated besides the investment property. The criteria applied may include the
into the cost price of capitalized assets or inventories by purchasing number of property assets held by the target company, the extent of
companies. the acquired processes and, particularly, the auxiliary services provided
Financial items billed to property development companies are listed by the acquired entity. If the acquired assets are not a business, the
among their inventories or capital assets and recognized in the income. entity preparing the financial statements must report the transaction as
an asset acquisition.
2.7. Accounting for business combinations All business combinations must be recognized using the acquisition
method. The consideration transferred (acquisition cost) is measured
2.7.1. Business combinations before January 1, 2010 as the fair value of assets given, equity issued and liabilities incurred at
the transfer date. The assets and liabilities of the business acquired are
Under IFRS 3, all business combinations covered by the standard must measured at their fair value at the acquisition date. Any liabilities are
be accounted for using the acquisition method. only recognized if they represent a real obligation at the date of the
A business combination is defined as the bringing together of separate business combination and if their fair value can be reliably measured.
entities or businesses into a single reporting entity. An acquisition can Costs directly attributable to the acquisition are recognized as expenses.
be considered as a business combination if a set of integrated activity
is acquired besides the investment property, of which the criteria can Any surplus of the consideration transferred over the share attributable
be the number of property assets held by the target and the range of to owners of the parent in the net fair value of the business’s identifiable
the acquired processes, and in particular the auxiliary services provided assets and liabilities are recognized as goodwill. Amounts recognized
by the acquired entity. at the acquisition date may be adjusted where the acquiring party
On the date of acquisition, the acquiring company must allocate the becomes aware of new information whose origin stems from facts and
acquisition cost by recognizing the identifiable assets, liabilities and circumstances that existed at the acquisition date. Goodwill cannot be
contingent liabilities of the acquired entity (excluding non-current assets adjusted after the end of the measurement period (a maximum of twelve
held for sale) at their fair value on this date. months after taking control of the acquired entity). Further acquisitions
of non-controlling interests does not trigger recognition of additional
goodwill. Earnout clauses are included in the acquisition cost at fair
value at the acquisition date irrespective of the likelihood that they will

Klépierre – 2010 Annual report | 141

 Consolidated
financial statements
at December 31, 2010

be earned. During the measurement period, subsequent adjustments 2.9. Intangible assets
are reflected in goodwill if they result from additional information about
facts and circumstances that existed at the acquisition date. After that, An intangible asset is a non-monetary asset without physical substance.
earnout adjustments are recognized in income, unless the counterpart It must be simultaneously identifiable (and therefore separable from the
of the earnouts is an equity instrument. acquired entity or arise from legal or contractual rights), controlled by
Minority interests, now renamed “Non-controlling interests” are recog- the company as a result of past events and provides an expectation of
nized optionally for each business combination: future financial benefits.
•• either at the corresponding share in the fair value of assets and liabilities IAS 38 states that an intangible asset should be amortized only where it
(as previously); has a known useful life. Intangible assets with no known useful life should
•• or at fair value (full goodwill method). not be amortized, but should be tested annually for impairment (IAS 36).
Assets recognized as intangible assets with finite useful lives should be
Where a business is acquired in stages, the previous holding is remea- amortized on a straight-line basis over periods that equate to their
sured at fair value at the date control is transferred. Any difference expected useful life.
between fair value and net book value of this investment is recognized
in income for the fiscal year. 2.10. Investment property
Any change in the Group’s interest in an entity that results in a loss of
control is recognized as a gain/loss on disposal and the remaining inter- IAS 40 defines investment property as property held by the owner or
est is remeasured at fair value with the change being recognized in lessee (under a finance lease) for the purpose of rental income or capital
income. growth or both, rather than:
Finally, IFRS 3 (Revised) also changes the treatment of deferred tax •• using in the production or supply of goods or services or for administra-
assets, obliging companies to recognize a gain in income for deferred tive purposes;
tax assets unrecognized at the acquisition date or during the measure- •• or selling in the ordinary course of business (trading).
ment period.
Almost all of Klépierre real estate meets this definition of “Investment
2.8. Translation of foreign currencies property”. Buildings occupied by the Group are recognized as tangible
assets.
The consolidated financial statements are presented in euros, which is After initial recognition, investment property is measured:
the operating and reporting currency used by Klépierre. Each Group •• either at fair value (with changes in value recognized in the income
entity nominates its own operating currency, and all items in its financial statement);
statements are measured in this operating currency. •• or at cost in accordance with the methods required under IAS 16, in
The Group’s foreign subsidiaries conduct some transactions in curren- which case the company must disclose the fair value of investment
cies other than their operating currency. These transactions are initially property in the notes to the financial statements.
recorded in the operating currency at the exchange rate applying on the
transaction date. The Supervisory Board meeting of May 26, 2004 voted that Klépierre
On the balance sheet date, monetary assets and liabilities stated in should adopt the IAS 40 cost model. There were two key issues behind
foreign currencies are translated into the operating currency at the this decision: the first was the need to maintain consistency between
exchange rate for that day. Non-monetary items stated in foreign cur- the accounting methods used by Klépierre and by its majority share-
rencies and measured at their historical cost are translated using the holder, which has adopted the cost accounting method; the second
exchange rates applying on the dates of the initial transactions. Non- was the intrinsic merits of the cost method, which include a clearer
monetary items stated in foreign currencies and measured at their fair understanding of actual performance unaffected by variations in net
value are translated using the exchange rates applicable on the dates asset value, at the same time as appending the pro forma financial data
when the fair values were calculated. for investment property on the basis of the fair value model.
On the balance sheet date, the assets and liabilities of these subsidiar-
ies are translated into the Klépierre S.A. reporting currency – the euro 2.10.1. Cost model
– at the exchange rate applying on that date. Their income statements
are translated at the average weighted exchange rate for the year. Any Investment property, plant and equipment (PPE) are recognized at cost,
resulting translation differences are allocated directly to shareholder inclusive of duties and fees, and are amortized using the component
equity under a separate item. In the event of disposal of a foreign opera- method.
tion, the total accrued deferred exchange gain/loss recognized as a Depreciation of these assets must reflect consumption of the related
distinct component of equity for that foreign operation is recognized in economic benefits. It should be:
the income statement. •• calculated on the basis of the depreciable amount, which is equivalent
to the acquisition cost less the residual value of the assets

142 | Klépierre – 2010 Annual report

•• spread over the useful life of the PPE components. Where individual 2.10.2. The component method
components have different useful lives, each component whose cost is
significant relative to the total cost of the asset must be depreciated The component method is applied based on the recommendations of
separately over its own useful life. the Fédération des Sociétés Immobilières et Foncières (French
Federation of Property Companies) for components and useful life:
After initial recognition, fixed assets are measured at cost, less any •• for properties developed by the companies themselves, assets are clas-
accumulated depreciation and impairment losses. These assets are sified by component type and measured at their realizable value;
straight-line depreciated over their useful life. •• where investment properties are held in the portfolio (sometimes for long
The depreciation period, depreciation method and residual asset values periods), components are broken down into four categories: business
should be reviewed at each balance sheet date. premises, shopping centers, offices and residential properties.
In addition, fixed assets are tested for impairment whenever there is
evidence of a loss of value at June 30 or December 31. Where such 4 components have been identified for each of these asset types (in
evidence exists, the new recoverable asset value is compared against addition to land):
its net book value, and any impairment is recognized (see •• structures;
section 2.12.). •• facades, cladding and roofing;
Capital gains or losses realized on investment property disposals are •• general and Technical Installations (GTI);
recognized under “Income from sale of investment property” in the •• fittings.
income statement.
Adoption of the cost model requires application of the component Components are broken down based on the history and technical char-
method. Klépierre has adopted the option offered by IFRS 1 to recog- acteristics of each building.
nize the initial cost of its buildings (as shown in the opening balance
sheet) as the revalued amount stated at January 1, 2003, the point at For first-time application of the components method, the historic cost
which the Group adopted SIIC status, this being their deemed market of the property concerned is calculated on the basis of the percentage
value at that date. The amounts concerned have been apportioned attributed to each component at the reappraisal values of January 1,
between land and buildings in accordance with the methods set by the 2003, which have been adopted as the presumed cost price.
appraisers, i.e.:
•• on the basis of land/building apportionment rates for office buildings; Offices Shopping centers Retail stores
•• by comparison with rebuilding costs for shopping centers. Period QP Period QP Period QP
Structures 60 years 60% 35 to 50 years 50% 30 to 40 years 50%
An age-related weighting ratio has been applied to the cost of refurbish- Facades 30 years 15% 25 years 15% 15 to 25 years 15%
ment to “as new” condition, which is then added to the rebuilding cost. GTI 20 years 15% 20 years 25% 10 to 20 years 25%
Properties acquired after January 1, 2003 and the extension and refur- Fittings 12 years 10% 10 to 15 years 10% 5 to 15 years 10%
bishment of reappraised investment property have been recognized in
the balance sheet at their acquisition cost. All component figures are based on assumed “as new” values. Klépierre
has therefore calculated the proportions applied to “fittings”, “General
and Technical Installations” and “facades” at January 1, 2003 on the
basis of the useful life periods shown in the table above, calculated from
the date of construction or latest major refurbishment of the property.
The percentage for “structures” is calculated using the figures shown
for the other components, and is amortized over the residual term set
by the appraisers in 2003.
Purchase costs are divided between land and buildings. The proportion
allocated to buildings is amortized over the useful life of the structures.
The residual value is equivalent to the current estimate of the amount
the company would achieve if the asset concerned were already of an
age and condition commensurate with the end of its useful life, less
disposal expenses.
Given the useful life periods applied, the residual value of components
is zero.

Klépierre – 2010 Annual report | 143

 Consolidated
financial statements
at December 31, 2010

2.11. Non-current assets held for sale value of the portfolio at the end of the forecast period (end value) and
discounting the outcome at an appropriate rate. This discount rate is
The provisions of IFRS 5 regarding presentation and measurement apply arrived at on the basis of the Capital Asset Pricing Model (CAPM) and
to investment property measured using the cost model under IAS 40 is the sum of the following 3 components: the risk-free interest rate, a
whenever the sales process is underway and the asset concerned fulfils general market risk premium (forecast market risk premium multiplied
the criteria for recognition as an asset held for sale. An impairment test by the beta coefficient for the business portfolio) and a specific market
is conducted immediately before any asset is recognized as being held risk premium (which takes account of the proportion of specific risk not
for sale. already included in flows). In a third and final phase the value is obtained
In accordance with the provisions of IFRS 5, the Klépierre Group reclas- for each company’s equity by deducting its net debt and any non-
sifies all property covered by a contract of sale (mandat de vente). controlling interests on the valuation date from the value of its business
The accounting impact is as follows: portfolio.
•• cost of sale is imputed to net book value or net fair value, whichever is
the lower; 2.13. Inventory
•• the assets concerned are presented separately;
•• depreciation ceases. IAS 2 defines inventory as assets held for sale in the ordinary course of
business, assets in progress and intended for sale and materials and
2.12. Impairment of assets supplies (raw materials) intended for consumption in the production of
products and services.
IAS 36 applies to property, plant and equipment and intangible assets, Impairment must be recognized if the net realizable value (fair value net
including goodwill. This standard requires an assessment to be made of exit costs) is lower than the recognized cost.
to establish whether there is any indication that an asset may be
impaired. 2.14. Leases
Such indications may include:
•• a major decline in market value; 2.14.1. Leases
•• significant changes in the technological, economic or legal environment.
IAS 17 defines a lease as an agreement under which the lessor transfers
For the purposes of this test, assets are grouped into cash-generating to the lessee the right to use an asset for a given period of time in
units (CGUs). CGUs are standardized groups of assets whose continued exchange for a single payment or series of payments.
use generates cash inflows that are largely separate from those gener- IAS 17 distinguishes 2 types of lease:
ated by other asset groups. •• a finance lease, which is a lease that transfers substantially all the risks
Assets must not be recognized at more than their recoverable amount. and rewards incident to ownership of an asset to the lessee. Title to the
The recoverable amount is the fair asset value minus selling expenses asset may or may not eventually be transferred at the end of the lease
or its value in use, whichever is the higher. term;
Value in use is calculated on the basis of discounted future cash flows •• all other leases are classified as operating leases.
expected to arise from the planned use of an asset and from its disposal
at the end of its useful life.
An impairment loss must be recognized wherever the recoverable value
of an asset is less than its carrying amount.
Under certain circumstances, the entity may later recognize all or part
of such impairment losses in its income statement, with the exception
of unallocated goodwill.
In most cases the Klépierre Group treats each property and shopping
center as a CGU.
Group goodwill relates chiefly to Ségécé and its subsidiaries. Appraisal
tests are conducted at least annually by an independent appraiser.
Appraisals are updated to take account of any significant event occur-
ring during the year.
The appraisals conducted for Klépierre by Aon Accuracy are based
chiefly on the range of estimated values generated by applying the
Discounted Cash Flow (DCF) method over a period of five years. The
first stage of this method involves estimating the future cash flows that
could be generated by the business portfolio of each company, exclud-
ing any direct or indirect finance costs. The second stage involves esti-
mating the value of the business portfolio, cash flows and the probable

144 | Klépierre – 2010 Annual report

2.14.2. Recognition of stepped rents and rent-free periods Under the IAS 40 components method, these initial payments are clas-
sified as prepaid expenses.
Lease income from operating leases is recognized over the full lease
term on a straight-line basis. 2.15. Trade and other receivables
Stepped rents and rent-free periods are recognized as additions to, or
deductions from, lease income for the fiscal year. Trade receivables are recognized and measured at invoice face value
The reference period adopted is the first firm lease term. minus accruals for non-recoverable amounts. Bad debts are estimated
when it is likely that the entire amount receivable will not be recovered.
2.14.3. Entry fees When identified as such, non-recoverable receivables are recognized
as losses.
Entry fees received by the lessor are recognized as supplementary rent.
Entry fees are part of the net amount exchanged between the lessor 2.16. Borrowing costs
and the lessee under a lease. For this purpose, the accounting periods
during which this net amount is recognized should not be affected by In April 2007, the IASB published an amendment to IAS 23. Under
the form of the agreement or the rent payment schedule. Entry fees are revised IAS 23, borrowing costs directly attributable to the acquisition,
spread over the first firm lease term. construction or production of an eligible asset must be capitalized.
The previous accounting method used by Klépierre already consisted
2.14.4. Early termination indemnities of including borrowing costs in the total cost of a qualifying asset where
they were directly attributable to the acquisition, construction or produc-
Tenants who terminate their leases prior to the contractual expiration tion of that asset.
date are liable to pay early termination penalties.
Such charges are allocated to the terminated contract and credited to 2.17. Provisions and contingent liabilities
income for the period in which they are recognized.
In accordance with IAS 37 “Provisions, contingent liabilities and contingent
2.14.5. Eviction compensation assets”, a provision is recognized where the Group has a liability towards
a third party, and it is probable or certain that an outflow of resources will
When a lessor terminates a lease prior to the expiration date, he must be required to settle this liability without an equivalent or greater amount
pay eviction compensation to the lessee. expected to be received from the third party concerned.
IAS 37 requires that non-interest-bearing long-term liabilities are
(i) Replacement of a lessee discounted.

Where the payment of eviction compensation enables asset perfor- 2.18. Current and deferred taxes
mance to be maintained or improved (higher rent, and therefore higher
asset value), revised IAS 16 allows for this expense to be capitalized as 2.18.1. The tax status of Société d’investissements
part of the cost of the asset, provided that the resulting increase in value immobiliers cotée (SIIC)
is confirmed by independent appraisers. Where this is not the case, the
cost is recognized as an expense. General features of the SIIC tax status

(ii) Renovation of a property requiring the removal All SIICs are entitled to the corporate tax exemption status introduced
of resident lessees by article 11 of the 2003 French finance act as implemented under the
decree of July 11, 2003 provided that their stock is listed on a regulated
Where eviction compensation is paid as a result of the fact that major French market, that they are capitalized at 15 million euros or more and
renovation or reconstruction of a property requires the prior removal of that their corporate purpose is either the purchase or construction of
lessees, the cost of the compensation is treated as a preliminary properties for rent or direct or indirect investment in entities with that
expense and recognized as an additional component of the total reno- corporate purpose. The option to adopt SIIC status is irrevocable.
vation cost. Subsidiaries subject to corporate income tax and owned at least 95%
by the Group may also claim SIIC status.
2.14.6. Building leases: IAS 40 and IAS 17 In return for tax exemption, companies must distribute 85% of their
rental income, 50% of the capital gains made on property disposals and
Land and building leases are classified as operating or finance leases, 100% of the dividends received from SIIC-status subsidiaries subject
and are treated in the same way as leases for other types of assets. to corporate income tax.
However, since the useful life of land is usually indefinite, the majority of
the risks and rewards inherent in ownership will not be transferred to
the lessee (land leases are operating leases) unless title is intended to
be transferred to the lessee at the end of the lease term. Initial payments
made in this respect therefore constitute pre-lease payments, and are
amortized over the term of the lease in accordance with the pattern of
benefits provided. Analysis is on a lease-by-lease basis.

Klépierre – 2010 Annual report | 145

 Consolidated
financial statements
at December 31, 2010

Claiming SIIC status makes the entity concerned immediately subject A deferred tax asset is recognized where tax losses are carried forward
to a 16.5% exit tax on unrealized gains on properties and on shares in on the assumption that the entity concerned is likely to generate future
partnerships not subject to corporate income tax. 25% of the exit tax taxable income against which those losses can be offset.
is payable on December 15 of the year in which SIIC status is first Deferred tax assets and liabilities are measured using the liability method
adopted, with the balance payable over the following three years. and the tax rate expected to apply when the asset is realized or the
At the general meeting of shareholders held on September 26, 2003, liability settled on the basis of the tax rates and tax regulations adopted,
Klépierre was authorized to adopt the new SIIC tax status, with effect or to be adopted before the balance sheet date. The measurement of
backdated to January 1, 2003. deferred tax assets and liabilities must reflect the tax consequences
arising as a result of the way in which the company expects to recover
Discounting of exit tax liability or settle the carrying amounts of its assets and liabilities at the balance
sheet date.
The exit tax liability is discounted on the basis of its payment schedule. All current and deferred tax is recognized as tax income or expense in
This liability is payable over a four-year period, commencing at the point the income statement, except for deferred tax recognized or settled at
when the entity concerned adopts SIIC status. the time of acquiring or disposing of a subsidiary or equity holding and
Following initial recognition in the balance sheet, the liability is dis- unrealized capital gains and losses on assets held for sale. In these
counted and an interest expense is recognized in the income statement cases, the associated deferred tax is recognized as equity.
on each balance sheet date. In this way, the liability is reduced to its net Deferred tax is calculated at the local rate applicable at the closing date.
present value on that date. The discount rate is calculated on the basis The main rates applied are: France 34.43%, Spain 30%, Italy 31.40%,
of the interest rate curve, taking into account the deferment period and Belgium 34%, Greece 23%, Portugal 26.5%, Poland 19%, Hungary
the Klépierre refinancing margin. 10%, Czech Republic 19%, Slovakia 19% and Norway 28%.

Corporate income tax on companies not eligible for SIIC status 2.19. Treasury shares

Since adopting SIIC status in 2003, Klépierre SA has made a distinction All treasury shares held by the Group are recognized at their acquisition
between SIICs that are exempt from property leasing and capital gains cost and deducted from equity. Any gain arising on the disposal of
taxes, and other companies that are subject to those taxes. treasury shares is recognized immediately as equity, such that disposal
Corporate income tax on non-SIICs is calculated in accordance with gains or losses do not impact on net profit or loss for the period.
French common law.
2.20. Distinction between liabilities and equity
2.18.2. French common law and deferred tax
The difference between liabilities and equity depends on whether or not
The corporate income tax charge is calculated in accordance with the the issuer is bound by an obligation to make a cash payment to the
rules and rates applicable in each Group operating country for the other party. The fact of being able to make such a decision regarding
period to which the profit or loss applies. cash payment is the crucial distinction between these two concepts.
Both current and future income taxes are offset where such offsetting
is legally permissible and where they originate within the same tax con- 2.21. Financial assets and liabilities
solidation group and are subject to the same tax authority.
Deferred taxes are recognized where there are timing differences Financial assets include long-term financial investments, current assets
between the carrying amounts of balance sheet assets and liabilities representing accounts receivable, debt securities and investment securi-
and their tax bases, and taxable income is likely in future periods. ties (including derivatives) and cash.
Financial liabilities include borrowings, other forms of financing and bank
overdrafts, derivatives and accounts payable.
IAS 39 “Financial instruments: recognition and measurement” describes
how financial assets and liabilities must be measured and recognized.

146 | Klépierre – 2010 Annual report

2.21.1. Measurement and recognition of financial assets Measurement and recognition of derivatives

Loans and receivables As the parent company, Klépierre takes responsibility for almost all
Group funding and provides centralized management of interest and
These include receivables from equity investments, other loans and exchange rate risks. This financial policy involves Klépierre in implement-
receivables. All are recognized at amortized cost, which is calculated ing the facilities and associated hedging instruments required by the
using the effective interest rate method. The effective interest rate is the Group.
rate that precisely discounts estimated future cash flows to the net car- Klépierre hedges its liabilities using derivatives and has consequently
rying amount of the financial instrument. adopted hedge accounting in accordance with IAS 39:
•• hedges to cover balance sheet items whose fair value fluctuates in
Available-for-sale financial assets response to interest rate, credit or exchange rate risks (fair value hedge):
e.g. fixed-rate liability;
Available-for-sale financial assets include equity interests. •• hedges to cover the exposure to future cash flow risk (cash flow hedges),
Equity interests are the holdings maintained by the Group in non- which consists of fixing future cash flows of a variable-rate liability or
consolidated companies. asset.
Investments in equity instruments not listed in an active market and The Klépierre portfolio meets all IAS 39 hedge definition and effective-
whose fair value cannot be reliably measured must be measured at cost. ness criteria.
The adoption of hedge accounting has the following consequences:
Cash and cash equivalents •• fair value hedges of existing assets and liabilities: the hedged portion of
the asset/liability is accounted for at fair value in the balance sheet. The
Cash and cash equivalents includes cash held in bank accounts, short- gains or losses resulting from changes in fair value are recognized imme-
term deposits maturing in less than three months, money market funds diately in profit or loss. At the same time, there is an opposite corre-
and other marketable securities. sponding adjustment in the fair value of the hedging instrument, in line
with its effectiveness;
2.21.2. Measurement and recognition of financial liabilities •• cash flow hedges: the portion of the gain or loss on the fair value of the
hedging instrument that is determined to be an effective hedge is rec-
With the exception of derivatives, all loans and other financial liabilities ognized directly in equity and recycled to the income statement when
are measured at amortized cost using the effective interest method. the hedged cash transaction affects profit or loss. The gain or loss from
the change in value of the ineffective portion of the hedging instrument
Recognition of liabilities at amortized cost is recognized immediately in profit or loss.

In accordance with IFRS, redemption premiums on bonds and debt 2.21.3. Recognition date: trade or settlement
issuance expenses are deducted from the nominal value of the loans
concerned and incorporated into the calculation of the effective interest IFRS seeks to reflect the time value of financial instruments as closely
rate. as possible by ensuring that, wherever possible, instruments with a
deferred start date are recognized on the trade date, thus allowing cal-
Application of the amortized cost method culation of the deferred start date.
to liabilities hedged at fair value However, this principle cannot be applied to all financial instruments in
the same way. For example, commercial paper is often renewed a few
Changes in the fair value of (the effective portion of) swaps used as fair days before its due date. If these instruments were recognized at their
value hedges are balanced by remeasurement of the hedged risk com- trade date, this would artificially inflate the amount concerned between
ponent of the debt. the renewal trade date of a paper and its effective start date.
Given that the characteristics of derivatives and items hedged at fair Klépierre applies the following rules:
value are similar in most instances, any ineffective component carried •• derivatives are recognized at their trade date, since their measurement
to hedging profit or loss will be minimal. effectively takes account of any deferred start dates;
If a swap is canceled before the due date of the hedged liability, the •• other financial instruments (especially liabilities) are recognized on the
amount of the debt adjustment will be amortized over the residual term basis of their settlement date.
using the effective interest rate calculated at the date the hedge ended.
2.21.4. Determination of fair value

Financial assets and liabilities recognized at fair value are measured

either on the basis of market price or by applying measurement models
that apply the market parameters that existed on the balance sheet
date. The term “model” refers to mathematical methods based on gen-
erally- accepted financial theories. The realizable value of these instru-
ments may differ from the fair value adopted when preparing the
financial statements.

Klépierre – 2010 Annual report | 147

 Consolidated
financial statements
at December 31, 2010

For any given instrument, an active, and therefore liquid, market is any 2.22.1. Short-term benefits
market in which transactions take place regularly on the basis of reliable
levels of supply and demand, or in which transactions involve instru- The company recognizes an expense when it uses services provided
ments that are very similar to the instrument being measured. by its employees and pays agreed benefits in return.
Where prices quoted on an active market are available on the closing
date, they are used to determine fair value. Listed securities and deriva- 2.22.2. Post-employment benefits
tives traded on organized markets such as futures or option markets
are therefore measured in this way. In accordance with generally-accepted principles, the Group makes a
Most OTC (Over The Counter) derivatives, swaps, futures, caps, floors distinction between defined contribution and defined benefit plans.
and simple options are traded on active markets. They are measured “Defined contribution plans” do not generate a liability for the company,
using generally-accepted models (discounted cash flow, Black and and therefore are not provisioned. Contributions paid during the period
Scholes, interpolation techniques, etc.) based on the market prices of are recognized as an expense.
such instruments or similar underlying values. “Defined benefit plans” do generate a liability for the company, and are
therefore measured and provisioned.
2.21.5. Tax treatment of changes in fair value The classification of a benefit into one or other of these categories relies
on the economic substance of the benefit, which is used to determine
In Klépierre’s case: whether the Group is required to provide the promised benefit to the
•• the non-SIIC part of the deferred tax on financial instruments recognized employee under the terms of an agreement or an implicit obligation.
at fair value is calculated pro rata of net financial income; Post-employment benefits classified as defined benefit plans are quanti-
•• the financial instruments of foreign subsidiaries recognized at fair value fied actuarially to reflect demographic and financial factors.
generate a deferred tax calculation on the basis of the rates applying in The amount of the commitment to be provisioned is calculated on the
the country concerned. basis of the actuarial assumptions adopted by the company and by
applying the Projected Unit Credit Method. The value of any hedging
2.22. Employee benefits assets (plan assets and redemption rights) is deducted from the result-
ing figure.
Employee benefits are recognized as required by IAS 19, which applies Measurement of the liabilities inherent in a plan and the value of its
to all payments made for services rendered, except for share-based hedging assets may vary considerably from one accounting period to
payment, which is covered by IFRS 2. another as actuarial assumptions change, and may therefore give rise
All employee benefits, whether paid in cash or in kind, short term or long to actuarial gains or losses. The Group accounts for actuarial gains or
term, must be classified into 1 of the following 4 main categories: losses on its commitments by applying the so-called “corridor” method.
•• short-term benefits, such as salaries and wages, annual vacation, mandatory This method means that the proportion of actuarial gains or losses that
and discretionary profit sharing schemes and company contributions; exceeds the higher of the following values need not be recognized until
•• post-employment benefits: these relate primarily to supplementary bank the following period and may then be spread over time: 10% of the
pension payments in France, and private pension schemes elsewhere; discounted value of the gross liability or 10% of the market value of the
•• other long-term benefits, which include paid vacation, long-service pay- plan hedge assets at the end of the previous period.
ments, and some deferred payment schemes paid in monetary units;
•• severance pay. 2.22.3. Long-term benefits
Measurement and recognition methods vary depending on the category
of benefit. These are benefits other than post-employment benefits and severance
pay, which are not payable in full within twelve months of the end of the
financial year in which the employees concerned provided the services
in question.
The actuarial measurement method applied is similar to that used for
post-employment defined benefits, except that actuarial gains or losses
are recognized immediately and no corridor is applied. Furthermore, any
gain or loss resulting from changes to the plan, but deemed to apply to
past services, is recognized immediately.

148 | Klépierre – 2010 Annual report

2.22.4. Severance pay

Employees receive severance pay if their employment with the Group

is terminated before they reach the statutory retirement age or if they
accept voluntary redundancy. Severance pay falling due more than
twelve months after the balance sheet date is discounted.

2.23. Share-based payments

According to IFRS 2, all share-based payments must be recognized as

expenses when use is made of the goods or services provided in return
for these payments.
For the Klépierre Group, this standard applies primarily to the purchase
of shares to meet the commitments arising from its employee stock
option scheme.
In accordance with IFRS 1, only plans granted after November 7, 2002
whose rights were exercised at January 1, 2005 need be recognized.
Consequently, the stock option plan granted by the Klépierre Group in
1999 has not been restated. The exercise period for this particular plan
ended on June 24, 2007.

2.24. Segment information

Application of IFRS 8 became obligatory with effect from January 1,

2009. This standard requires the presentation of information about the
operating segments of the Group, and replaces the previous provisions
applying to the determination of level one sectors (business sectors)
and level two sectors (geographic sectors).
Operating sectors are identified on the basis of the internal reporting
model used by management when evaluating performance and allocating
resources. They are limited neither by lines of business nor geography.

Klépierre – 2010 Annual report | 149

 Consolidated
financial statements
at December 31, 2010

3. Scope of consolidation

Companies Country Methods at % interest % control

12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
SA Klépierre France FC 100,00% 100.00% – 100.00% 100.00% –

Offices
SAS Klépierre Finance France FC 100.00% 100.00% – 100.00% 100.00% –
SAS LP7 France FC 100.00% 100.00% – 100.00% 100.00% –
SAS CB Pierre France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Jardins des Princes France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Barjac Victor France FC 100.00% 100.00% – 100.00% 100.00% –

Shopping centers – France

SNC Kléber La Perouse France FC 100.00% 100.00% – 100.00% 100.00% –
SAS KLE 1 France FC 100.00% 100.00% – 100.00% 100.00% –
SNC SCOO France FC 53.64% 53.64% – 53.64% 53.64% –
SNC Angoumars France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Klécar France France FC 83.00% 83.00% – 83.00% 83.00% –
SNC KC1 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC2 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC3 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC4 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC5 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC6 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC7 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC8 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC9 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC10 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC11 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC12 France FC 83.00% 83.00% – 100.00% 100.00% –
SNC KC20 France FC 83.00% 83.00% – 100.00% 100.00% –
SAS Centre Jaude Clermont France FC 100.00% 100.00% – 100.00% 100.00% –
SCS Klécar Europe Sud France FC 83.00% 83.00% – 83.00% 83.00% –
SC Solorec France FC 80.00% 80.00% – 80.00% 80.00% –
SNC Centre Bourse France FC 100.00% 100.00% – 100.00% 100.00% –
SCS Bègles Arcins France FC 52.00% 52.00% – 52.00% 52.00% –
SCI Bègles Papin France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Sécovalde France FC 55.00% 55.00% – 55.00% 55.00% –
SAS Cécoville France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Foncière Saint-Germain France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Soaval France FC 100.00% 100.00% – 100.00% 100.00% –
SCA Klémurs France FC 84.11% 84.11% – 84.11% 84.11% –
SCS Cécobil France PC 50.00% 50.00% – 50.00% 50.00% –
SCI du Bassin Nord France PC 50.00% 50.00% – 50.00% 50.00% –
SNC Le Havre Vauban France PC 50.00% 50.00% – 50.00% 50.00% –
SNC Le Havre Lafayette France PC 50.00% 50.00% – 50.00% 50.00% –
SCI Nancy Bon Secours France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Sodevac France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Odysseum Place de France France PC 50.00% 50.00% – 50.00% 50.00% –
SAS Klécar Participations Italie France FC 83.00% 83.00% – 83.00% 83.00% –
SNC Pasteur France FC 100.00% 100.00% – 100.00% 100.00% –

150 | Klépierre – 2010 Annual report

Companies Country Methods at % interest % control
12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
SA Holding Gondomar 1 France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Holding Gondomar 3 France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Klépierre Participations et Financements France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Combault France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Klétransactions France FC 100.00% 100.00% – 100.00% 100.00% –
SCI La Plaine du Moulin à Vent France PC 50.00% 50.00% – 50.00% 50.00% –
SCI Beau Sevran Invest France FC 83.00% 83.00% – 100.00% 100.00% –
SCI Valdebac France FC 55.00% 0.00% 55.00% 55.00% 0.00% 55.00%
SAS Progest France FC 100.00% 100.00% – 100.00% 100.00% –
SCI La Rocade France EM 38.00% 38.00% – 38.00% 38.00% –
SCI Girardin France PC 33.40% 33.40% – 33.40% 33.40% –
SC Boutiques Saint-Maximin France EM 42.50% 42.50% – 42.50% 42.50% –
SARL Belvédère Invest France FC 75.00% 75.00% – 75.00% 75.00% –
SCI Haies Haute Pommeraie France FC 53.00% 53.00% – 53.00% 53.00% –
SCI Plateau des Haies France FC 90.00% 90.00% – 90.00% 90.00% –
SCI Boutiques d’Osny France FC 38.27% 38.27% – 67.00% 67.00% –
SCI la Rocade Ouest France EM 36.73% 36.73% – 36.73% 36.73% –
SARL Forving France FC 90.00% 90.00% – 90.00% 90.00% –
SCI du Plateau France EM 24.25% 24.25% – 30.00% 30.00% –
SCI Maximeuble France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Saint-Maximin Construction France FC 55.00% 55.00% – 55.00% 55.00% –
SCI Immobilière de la Pommeraie France PC 50.00% 50.00% – 50.00% 50.00% –
SCI Pommeraie Parc France FC 60.00% 60.00% – 60.00% 60.00% –
SCI Champs des Haies France FC 60.00% 60.00% – 60.00% 60.00% –
SCI La Rive France FC 51.50% 47.30% 4.20% 51.50% 47.30% 4.20%
SCI Rebecca France FC 70.00% 70.00% – 70.00% 70.00% –
SCI Aulnes développement France PC 25.50% 25.50% – 50.00% 50.00% –
SARL Proreal France FC 51.00% 51.00% – 51.00% 51.00% –
SCI La Roche Invest France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Osny Invest France FC 57.12% 57.12% – 57.12% 57.12% –
SNC Parc de Coquelles France PC 50.00% 50.00% – 50.00% 50.00% –
SCI Achères 2000 France EM 30.00% 30.00% – 30.00% 30.00% –
SCI Le Mais France FC 80.00% 60.00% 20.00% 80.00% 60.00% 20.00%
SCI le Grand Pré France FC 60.00% 60.00% – 60.00% 60.00% –
SCI Champs de Mais France EM 40.00% 40.00% – 40.00% 40.00% –
SCI des Salines France PC 50.00% 50.00% – 50.00% 50.00% –
SCI les Bas Champs France PC 50.00% 50.00% – 50.00% 50.00% –
SCI Des dunes France PC 50.00% 50.00% – 50.00% 50.00% –
SCI la Française France PC 50.00% 50.00% – 50.00% 50.00% –
SCI LC France FC 80.00% 36.00% 44.00% 100.00% 60.00% 40.00%
SCI Klépierre Tourville France FC 100.00% 100.00% – 100.00% 100.00% –
SARL Société du bois des fenêtres France EM 20.00% 20.00% – 20.00% 20.00% –
SAS Kléprojet 1 France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Klécapnor France FC 84.11% 84.11% – 100.00% 100.00% –
SAS Vannes Coutume France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Holding Gondomar 4 France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Besançon Chalezeule France FC 100.00% 100.00% – 100.00% 100.00% –
SARL Immo Dauland France FC 84.13% 84.13% – 100.00% 100.00% –
SAS Carré Jaude 2 France FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Créteil France FC 100.00% 100.00% – 100.00% 100.00% –
SCI Albert 31 France FC 83.00% 83.00% – 100.00% 100.00% –
SCI Galeries Drancéennes France FC 100,00% 100,00% – 100.00% 100.00% –

Klépierre – 2010 Annual report | 151

 Consolidated
financial statements
at December 31, 2010

Companies Country Methods at % interest % control

12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
Service providers – France
SCS Ségécé France FC 100.00% 100.00% – 100.00% 100.00% –
SAS Klépierre Conseil France FC 100.00% 100.00% – 100.00% 100.00% –
SNC Galae France FC 100.00% 100.00% – 100.00% 100.00% –

Shopping centers – International

SA Coimbra Belgium FC 100.00% 100.00% – 100.00% 100.00% –
SA Cinémas de L’esplanade Belgium FC 100.00% 100.00% – 100.00% 100.00% –
SA Foncière de Louvain-la-Neuve Belgium FC 100.00% 100.00% – 100.00% 100.00% –
SA Place de l’Accueil Belgium FC 100.00% 100.00% – 100.00% 100.00% –
Steen & Strøm Holding AS Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Bryggen, Vejle A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Bruun’s Galleri ApS Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Field’s Eier I ApS Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Field’s Eier II A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Field’s Copenhagen I/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Prosjektselskabet af 10.04.2001 ApS Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Centerudvikling IV A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Centerudvikling V A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Centerudvikling VI A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Entreprenørselskapet af 10.04.2001 P/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
SA Klecar Foncier Iberica Spain FC 83.00% 83.00% – 100.00% 100.00% –
SA Klecar Foncier España Spain FC 83.00% 83.00% – 100.00% 100.00% –
SA Klépierre Vinaza Spain FC 100.00% 100.00% – 100.00% 100.00% –
SA Klépierre Vallecas Spain FC 100.00% 100.00% – 100.00% 100.00% –
SA Klépierre Nea Efkarpia Greece FC 83.00% 83.00% – 100.00% 100.00% –
SA Klépierre Foncier Makedonia Greece FC 83.01% 83.01% – 100.00% 100.00% –
SA Klépierre Athinon A.E. Greece FC 83.00% 83.00% – 100.00% 100.00% –
SA Klépierre Peribola Patras Greece FC 83.00% 83.00% – 100.00% 100.00% –
Klépierre Larissa Greece FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Szeged plaza Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Szolnok plaza Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Zalaegerszeg plaza Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Nyiregyhaza Plaza Hungary FC 100.00% 100.00% – 100.00% 100.00% –
SA Duna Plaza Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl CSPL 2002 (Cespel) Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl GYR 2002 (Gyor) Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Debrecen 2002 Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Uj Alba 2002 Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Miskolc 2002 Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Kanizsa 2002 Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl KPSVR 2002 (Kaposvar) Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Sarl Duna Plaza Offices Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Corvin Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Corvin Retail Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Trading Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Spa IGC Italy FC 71.30% 71.30% – 71.30% 71.30% –
Spa Klecar Italia Italy FC 83.00% 83.00% – 100.00% 100.00% –
Spa Klefin Italia Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Collegno Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Serravalle Italy FC 100.00% 100.00% – 100.00% 100.00% –

152 | Klépierre – 2010 Annual report

Companies Country Methods at % interest % control
12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
Galleria Commerciale Assago Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Klépierre Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Cavallino Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Solbiate Italy FC 100.00% 100.00% – 100.00% 100.00% –
Clivia 2000 Italy PC 50.00% 50.00% – 50.00% 50.00% –
K2 Italy FC 85.00% 85.00% – 85.00% 85.00% –
Klépierre Matera Italy FC 100.00% 100.00% – 100.00% 100.00% –
Galleria Commerciale Il Destriero Italy PC 50.00% 50.00% – 50.00% 50.00% –
SA Klépierre Luxembourg Luxembourg FC 100.00% 100.00% – 100.00% 100.00% –
Holding Klégé Luxembourg PC 50.00% 50.00% – 50.00% 50.00% –
Storm Holding Norway Norway FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Amanda Storsenter AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Åsane Storsenter DA Norway PC 27.99% 27.99% – 49.90% 49.90% –
Farmandstredet Eiendom AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Farmandstredet ANS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Hovlandbanen AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Nerstranda AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Os Alle 3 AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Sjøsiden AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
SSI LilleStrøm Torv AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Hamar Storsenter AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Metro Senter ANS Norway PC 28.05% 28.05% – 50.00% 50.00% –
Stavanger Storsenter AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Stovner Senter AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Torvbyen Senter AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Torvbyen Utvikling AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
KS Markedet Norway FC 56.10% 56.10% – 100.00% 100.00% –
Gulskogen Senter ANS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Økern Sentrum Ans Norway PC 28.05% 28.05% – 50.00% 50.00% –
Torvhjørnet LilleStrøm ANS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Vintebro Senter DA Norway FC 56.10% 56.10% – 100.00% 100.00% –
Asane Senter AS Norway FC 56.10% 0.00% 56.10% 100.00% 0.00% 100.00%
Besloten vennootschap Capucine BV Netherlands FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Nordica Netherlands FC 100.00% 100.00% – 100.00% 100.00% –
Klémentine Netherlands FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Sadyba Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Krakow Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Poznan Poland FC 100.00% 100.00% – 100.00% 100.00% –
Ruda Slaska Plaza spzoo Poland FC 100.00% 100.00% – 100.00% 100.00% –
Sadyba Center SA Poland FC 100.00% 100.00% – 100.00% 100.00% –
Krakow spzoo Poland FC 100.00% 100.00% – 100.00% 100.00% –
Poznan SA Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Pologne Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Rybnik Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Sosnowiec Poland FC 100.00% 100.00% – 100.00% 100.00% –
Movement Poland SA Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Lublin Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Galeria Poznan Spzoo Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Galeria Krakow Spzoo Poland FC 100.00% 100.00% – 100.00% 100.00% –
Klépierre Warsaw Spzoo Poland FC 100.00% 100.00% – 100.00% 100.00% –
SA Klélou-Immobiliare Portugal FC 100.00% 100.00% – 100.00% 100.00% –
SA Klépierre Portugal SGPS SA Portugal FC 100.00% 100.00% – 100.00% 100.00% –
SA Galeria Parque Nascente Portugal FC 100.00% 100.00% – 100.00% 100.00% –
SA Gondobrico Portugal FC 100.00% 100.00% – 100.00% 100.00% –
SA Klenor Imobiliaria Portugal FC 100.00% 100.00% – 100.00% 100.00% –

Klépierre – 2010 Annual report | 153

 Consolidated
financial statements
at December 31, 2010

Companies Country Methods at % interest % control

12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
SA Klétel Imobiliaria Portugal FC 100.00% 100.00% – 100.00% 100.00% –
Kleminho Portugal FC 100.00% 100.00% – 100.00% 100.00% –
Klege Portugal Portugal PC 50.00% 50.00% – 50.00% 50.00% –
Klépierre Cz Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Bestes Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Entertaimnent Plaza Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Klépierre Plzen Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Plzen Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Akciova Spolocnost Arcol Slovakia FC 100.00% 100.00% – 100.00% 100.00% –
Nordica Holdco Sweden FC 56.10% 56.10% – 56.10% 56.10% –
Steen & Strøm Holding AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB CentrumInvest Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Emporia Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Överby Köpcentrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Detaljhandelshuset i Hyllinge AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Sollentuna Centrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Borlange Köpcentrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Marieberg Centrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Västra Torp Mark AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
NorthMan Suède AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Viskaholm Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Uddevallatorpet Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Hageby Centrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Mitt i City i Karlstad FAB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Allum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB P Brodalen Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Partille Lexby AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB P Åkanten Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB P Porthälla Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Mölndal Centrum Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Mässcenter Torp AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Mölndal Centrum Byggnads FAB Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Grytingen Nya AB Sweden FC 36.35% 36.35% – 64.79% 64.79% –
FAB Lackeraren Borlänge Sweden FC 56.10% 0.00% 56.10% 100.00% 0.00% 100.00%
Mölndal Centrum Karpen FAB Sweden FC 56.10% 0.00% 56.10% 100.00% 0.00% 100.00%
Mölndal Centrum Kojlan FAB Sweden FC 56.10% 0.00% 56.10% 100.00% 0.00% 100.00%

Service providers – International

Steen & Strøm CenterDrift A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Center Service A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Danemark A/S Denmark FC 56.10% 56.10% – 100.00% 100.00% –
Ségécé España Spain FC 100.00% 100.00% – 100.00% 100.00% –
Ségécé Hellas Greece FC 100.00% 100.00% – 100.00% 100.00% –
Ségécé Magyarorszag Hungary FC 100.00% 100.00% – 100.00% 100.00% –
Ségécé Italia Italy FC 100.00% 100.00% – 100.00% 100.00% –
Ségécé India India FC 100.00% 100.00% – 100.00% 100.00% –
Gulskogen Prosjekt & Eiendom AS Norway FC 56.10% 56.10% – 100.00% 100.00% –

154 | Klépierre – 2010 Annual report

Companies Country Methods at % interest % control
12/31/2010 (1)
12/31/2010 12/31/2009 Change 12/31/2010 12/31/2009 Change
Lille Eiendom AS Norway FC 37.03% 37.03% – 66.00% 66.00% –
Nordbyen Senterforening AS Norway FC 38.82% 38.82% – 69.20% 69.20% –
Norsk Kjøpesenterforvaltning AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Senterservice AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Arken Drift AS Norway PC 27.99% 27.99% – 49.90% 49.90% –
Torvbyen Drift AS Norway FC 21.32% 21.32% – 38.00% 38.00% –
Økern Sentrum AS Norway PC 28.05% 28.05% – 50.00% 50.00% –
Nordal ANS Norway PC 28.05% 28.05% – 50.00% 50.00% –
Økern Eiendom ANS Norway PC 28.05% 28.05% – 50.00% 50.00% –
Steen & Strøm Norge AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Svenor AS Norway FC 56.10% 56.10% – 100.00% 100.00% –
Ségécé Polska Poland FC 100.00% 100.00% – 100.00% 100.00% –
SA Ségécé Portugal Portugal FC 100.00% 100.00% – 100.00% 100.00% –
Ségécé Ceska Républika Czech FC 100.00% 100.00% – 100.00% 100.00% –
Republic
Ségécé Slovensko Slovakia FC 100.00% 100.00% – 100.00% 100.00% –
FAB Centrum Västerort Sweden FC 56.10% 56.10% – 100.00% 100.00% –
FAB Lantmäteribacken Sweden FC 56.10% 56.10% – 100.00% 100.00% –
Steen & Strøm Sverige AB Sweden FC 56.10% 56.10% – 100.00% 100.00% –

Deconsolidated companies Country Methods at % interest % control

12/31/2010 (1)
12/31/2010 12/31/2009 12/31/2010 12/31/2009
Kléaveiro Portugal NC 0% 100.00% 0% 100.00%
Steen & Strøm Narvik AS Norway NC 0% 56.10% 0% 100.00%
Karl Johans Gate 16 AS Norway NC 0% 56.10% 0% 100.00%
SSI Amanda Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
SSI Gulskogen Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
Os Alle Drift AS Norway NC 0% 56.10% 0% 100.00%
SSI LilleStrøm Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
Markedet Drift AS Norway NC 0% 56.10% 0% 100.00%
Metro Drift AS Norway NC 0% 56.10% 0% 100.00%
Nerstranda Drift AS Norway NC 0% 56.10% 0% 100.00%
Sjøsiden Drift AS Norway NC 0% 56.10% 0% 100.00%
SST Stavanger Drift AS Norway NC 0% 56.10% 0% 100.00%
Stovner Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
Vinterbro Eiendomsdrift AS Norway NC 0% 56.10% 0% 100.00%
Økern Sentrum Drift AS Norway NC 0% 56.10% 0% 100.00%
Farmanstredet Drift AS Norway NC 0% 56.10% 0% 100.00%
Hamar Storsenterdrift AS Norway NC 0% 56.10% 0% 100.00%
Tillertorget Drift AS Norway NC 0% 56.10% 0% 100.00%
Østfoldhallen Drift AS Norway NC 0% 56.10% 0% 100.00%
Sandens Drift AS Norway NC 0% 56.10% 0% 100.00%
SA Rezé Sud France NC 0% 15.00% 0% 15.00%
SNC Soccendre France NC 0% 100.00% 0% 100.00%
Sarl Klépierre Météores Luxembourg NC 0% 100.00% 0% 100.00%
Rybnik Plaza Spzoo Poland NC 0% 100.00% 0% 100.00%
Sosnowiec Plaza Spzoo Poland NC 0% 100.00% 0% 100.00%
Down Town Drift AS Norway NC 0% 100.00% 0% 100.00%
SCI l’Emperi France NC 0% 15.00% 0% 15.00%
SCI Sandri-Rome France NC 0% 15.00% 0% 15.00%
SNC Général Leclerc n° 11 Levallois France NC 0% 100.00% 0% 100.00%
Steen & Strøm Eiendomsforvaltning AS Norway NC 0% 56.10% 0% 100.00%
Fritzøe Brygge Drift AS Norway NC 0% 56.10% 0% 100.00%

Klépierre – 2010 Annual report | 155

 Consolidated
financial statements
at December 31, 2010

Deconsolidated companies Country Methods at % interest % control

12/31/2010 (1)
12/31/2010 12/31/2009 12/31/2010 12/31/2009
Senterdrift Åsane Senter AS Norway NC 0% 27.99% 0% 49.90%
Holmen Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
Krokstadelva Senterdrift AS Norway NC 0% 56.10% 0% 100.00%
Kvadrat Drift AS Norway NC 0% 56.10% 0% 100.00%
Mosseporten Drift AS Norway NC 0% 56.10% 0% 100.00%
Steen & Strøm Drift AS Norway NC 0% 56.10% 0% 100.00%
Økern Holding AS Norway NC 0% 56.10% 0% 100.00%
KS Down Town Senter Norway NC 0% 56.10% 0% 100.00%
KS Down Town Senter II Norway NC 0% 56.10% 0% 100.00%
Anpartsselskabet af 18. September 2007 Denmark NC 0% 56.10% 0% 100.00%
Ejendomsselskabet Klampenborgvej I/S Denmark NC 0% 28.05% 0% 50.00%
SCI Sogegamar France NC 15.03% 33.12% 15.03% 33.12%
(1) FC: Full consolidation – PC: Proportional consolidation – EM: Equity method consolidation – NC: Deconsolidated during the year.

The Group included 263 consolidated companies at December 31,

2010 compared to 301 at December 31, 2009. 28 companies were dissolved, merged or deconsolidated:

5 companies were newly consolidated: •• 22 in Norway;

•• 2, Sosnowiec Plaza and Rybnik Plaza in Poland;
•• Valdebac, a French company founded in 2010, which owns a land plot •• Soccendre and SNC Général Leclerc Levallois in France;
in Val d’Europe. It is 55% owned by Secovalde and fully consolidated; •• Kléaveiro in Portugal, which was inactive;
•• Asane Senter AS, a Norwegian company owned at 56.10%; •• Klepierre Météores absorbed by Klépierre Luxembourg.
•• FAB Lackeraren Borlänge, Mölndal Centrum Karpen FAB and Mölndal
Centrum Kojlan FAB, all wholly owned and fully consolidated Swedish Other events
companies.
•• Investments in LC and Le Mais were adjusted to 80%, with no change
Shares in 15 companies were either fully or partly disposed: in the method of consolidation, and the investment in La Rive to 51.50%.

•• Steen & Strøm group sold 11 companies, including Norwegian subsid-

iary Karl Johansgate 16 AS, which owns a mall in the center of Oslo.
Altogether these disposals generated a net gain of 15.8 million euros;
•• Progest sold all its shares in Sandri-rome and l’Emperi, reduced its
investment in Sogegamar by 18.09% to 15.03% and authorized its
subsidiary Rézé Sud to buy treasury shares. These transactions in the
Progest portfolio resulted in a net loss of 6.3 million euros.

The contribution made by entities acquired during the year to the Group’s main consolidated financial statement items was as follows:

Entity Country Acquisition Rent Operating Net income Intangible Property, Investment Net fixed Net
date income assets plant and property and assets indebtedness
equipment fixed assets including
in progress bank
overdrafts
FAB Lackeraren Borlänge Sweden October-10 265 165 91 – – 14 420 14 420 12 665
Mölndal Centrum Kojlan FAB Sweden December-10 47 26 10 – – 6 866 6 866 68
Mölndal Centrum Karpen FAB Sweden December-10 14 8 -4 – – 2 509 2 509 1 147
TOTAL 326 199 96 – – 23 794 23 794 13 881
In thousands of euros

156 | Klépierre – 2010 Annual report

 Purchase price Outflows for securities Outflows for current account Cash at acquisition
of securities acquisitions 2010 purchases 2010 date
FAB Lackeraren Borlänge 615 615 – 713
Mölndal Centrum Kojlan FAB 971 971 – 485
Mölndal Centrum Karpen FAB 1 335 1 335 – -1 147
In thousands of euros

4. Notes to the financial statements: balance sheet

4.1. Non-allocated goodwill
12/31/2009 Acquisitions, new Reduction by Other movements, 12/31/2010
businesses and disposals, reclassification
contributions retirement of assets
Metropoli 913 913
Vignate 520 520
Galeria Parque Nascente 1 713 1 713
Ségécé España 11 977 -1 100 10 877
Ségécé 52 374 52 374
Ségécé Magyarorszag 3 391 3 391
Scoo 546 546
ICD (Brescia) 910 910
IGC 36 328 130 36 458
Ségécé Italia 8 424 8 424
Steen & Strøm 11 341 742 12 083
Coimbra 3 378 3 378
Other goodwill 677 677
NET GOODWILL 132 492 0 0 -228 132 264
In thousands of euros

Other movements and reclassifications results mainly from the revalua-

tion of Steen & Strøm’s goodwill to reflect the currency exchange rate
and an impairment loss for Ségécé España recognized in income.

4.2. Intangible assets

The Group management and accounting system upgrading project was the end of 2009. The 2010 increase reflects the continuation of the
recognized under “Other intangible assets” until it came into service at project in France.

12/31/2009 Acquisitions, new Reduction by Allowances Changes in the Currency Other 12/31/2010
businesses and disposals, for the period scope of fluctuations movements,
contributions retirement consolidation reclassification
of assets
Leasehold right 1 804 1 804
Goodwill 4 920 -250 -47 4 623
Software 7 370 136 -13 -12 9 531 17 012
Other intangible assets 18 200 8 169 67 -9 815 16 621
Total gross value 32 293 8 305 -13 0 0 -195 -331 40 059
Leasehold right -142 -110 -252
Goodwill -1 028 -406 250 4 -1 180
Software -5 726 13 -1 584 10 -7 287
Other intangible assets -6 090 -1 129 -24 50 -7 193
Total depreciation and amortization -12 986 0 13 -3 229 0 236 54 -15 912
INTANGIBLE ASSETS – Net value 19 306 8 305 0 -3 229 0 41 -277 24 146
In thousands of euros

Klépierre – 2010 Annual report | 157

 Consolidated
financial statements
at December 31, 2010

4.3. Property, plant and equipment

Property, plant and equipment includes its business premises at 21, rue
La Pérouse, in Paris 16 th arrondissement and the furniture and
equipment.

12/31/2009 Acquisitions, Reduction by Allowances Currency Changes in the Other 12/31/2010

new businesses disposals, for the period fluctuations scope of movements,
and retirement consolidation reclassification
contributions of assets
Land 10 210 10 210
Buildings and fixtures 6 878 6 878
Furniture and equipment 18 317 4 100 -1 686 947 -2 982 20 767 39 463
Total gross value 35 405 4 100 -1 686 – 947 -2 982 20 767 56 551
Buildings and fixtures -1 757 -251 -2 008
Furniture and equipment -9 866 1 043 -4 991 -613 1 886 -14 310 -26 851
Total depreciation and amortization -11 623 – 1 043 -5 242 -613 1 886 -14 310 -28 859
Provision for impairment –
PROPERTY, PLANT AND EQUIPMENT – Net value 23 783 4 100 -643 -5 242 334 -1 096 6 457 27 693
In thousands of euros

4.4. Investment property and fixed assets in progress

12/31/2009 Acquisitions, new Reduction by Allowances Currency Changes in Other 12/31/2010
businesses disposals, for the period fluctuations the scope of movements,
and retirement consolidation reclassification
contributions of assets
Land 5 367 665 104 566 -26 586 99 087 -1 256 -149 134 5 394 342
Buildings and fixtures 6 479 369 70 889 -24 881 126 181 -9 241 414 344 7 056 661
Total gross value 11 847 034 175 455 -51 467 – 225 268 -10 497 265 210 12 451 003
Buildings and fixtures -1 035 166 8 285 -274 687 -9 549 629 36 791 -1 273 697
Total depreciation and amortization -1 035 166 – 8 285 -274 687 -9 549 629 36 791 -1 273 697
Provision for impairment -103 575 -132 207 -62 500 -298 282
INVESTMENT PROPERTY/Net value 10 708 293 175 455 -43 182 -406 894 215 719 -9 868 239 501 10 879 024
In thousands of euros

Investments during the period, not including “Fixed assets in prog- “Changes in consolidation scope” had a total effect of –9.9 million
ress” totaled 175.4 million euros. euros and comprised the following transactions:
The 41.3 million euro increase in holdings in France mainly results from •• sale of shares in Karl Johansgate 16 AS;
the acquisition of the land of Val d’Europe shopping center (e32.7M) •• 3 Swedish companies were newly consolidated: FAB Lackeraren
and the extension of the Rennes Columbia shopping center (e8.6M). Borlänge, Mölndal Centrum Koljan FAB and Mölndal Centrum Karpen
FAB.
Internationally, the biggest investments were in Sweden’s Sollentuna
(e8.7M) and Hageby (e23.9M) centers, in Norway’s Gulskogen The “Other movements and reclassifications” item represents the
(e15.7M) and Stavanger Storsenter (e7.5M) centers and in Denmark’s net balance arising as a result of the reclassification of buildings under
Fields center (e2.7M). negotiation as “Property held for sale”, and assets commissioned during
Aside from buildings previously reclassified as held for sale, in France the period, which have been reclassified from “Fixed assets in
the group sold the rue Candé mall in Rouen and some offices in rue progress”.
Diderot, Paris.
The “Provision for impairment” item includes real estate provisions in
respect of shopping centers in the Czech Republic (e21.4M), Spain
(e17.7M), Portugal (e15.8M), Greece (e7.4M), Scandinavia (e51.7M),
Hungary (e147.5M), Poland (8.3M), Belgium (e7.5M), Italy (e5.2M) and
France (e15.3M).

158 | Klépierre – 2010 Annual report

 12/31/2009 Acquisitions, new Reduction by Allowances Currency Changes in the Other 12/31/2010
businesses disposals, for the period fluctuations scope of movements,
and retirement consolidation reclassification
contributions of assets
Fixed assets in progress 857 350 357 928 -11 575 14 300 9 374 -428 953 798 424
Provision for impairment -65 892 569 62 500 -2 823
NET FIXED ASSETS IN PROGRESS 791 458 357 928 -11 575 569 14 300 9 374 -366 453 795 601
In thousands of euros

The majority of the “Other movements and reclassifications” item sion and renovation of Claye Souilly (e29.4M), creation of a new
mostly reflects the commissioning of the following assets: Corvin Le Grand Carré de Jaude shopping center in addition to the existing
(e167M), Goutte d’Eau (e43.7M), Pescara (e32.3M), Noisy (e29.4M), center (e20.8M), extension of the Montpellier Odysseum center (e18.5M),
Rennes Columbia (e24.9M) and Vaux en Velin (e10.8M). and the creation of a new center in Besançon city center (e10 million euros);
Assets in progress at December 31, 2010 (gross amounts) were: •• internationally: Metro (e35.3M) in Norway, Emporia (e163.8M) in
•• in France: retail restructurings of the shopping centers at Créteil Soleil Sweden, Field’s (e29.9M) in Denmark and Portimão (e32.9M) in
(e75.3M), Aubervilliers (e153.5M), Gare Saint Lazare (e119.5M), exten- Portugal.

4.5. Property held for sale

12/31/2009 Acquisitions, new Reduction by Other 12/31/2010
businesses disposals, movements,
and retirement reclassification
contributions of assets
BUILDINGS HELD FOR SALE 0 -120 593 120 593 0
In thousands of euros

“Disposals” comprised a shopping mall in Douai, office buildings in 4.7. Joint ventures
Levallois Perret, the Marignan-Marbeuf complex in Paris and, lastly, the
Castorama store in rue de Flandre, Paris. Joint ventures (see section 3, “Scope of consolidation”) are consolidated
No buildings were held for sale at December 31, 2010. using the proportional consolidation method.

4.6. Equity method securities 12/31/2010 12/31/2009

Share in joint ventures’ balance sheets
Current assets 61 234 41 899
Investments in companies accounted for by the equity method 36 363
at December 31, 2009 Non-current assets 351 429 261 983
Share in net income of associates 2010 1 736 Total Assets 412 663 303 882
Dividends received from companies accounted for by the equity method -1 719 Current liabilities 304 757 192 823
Departures from the scope of consolidation -15 279 Non-current liabilities 107 906 111 059
Other movements – Total liabilities 412 663 303 882
Investments in companies accounted for by the equity method 21 101 In thousands of euros
at December 31, 2010
In thousands of euros
12/31/2010 12/31/2009
Share in net income of joint ventures
7 companies were consolidated using the equity method at Revenues from ordinary activities 28 224 22 503
December 31, 2010. Departures from the scope of consolidation cor- Operating expenses -22 345 -16 683
responded to the disposals of Rezé Sud, Sandri-Rome, Emperi and Financial income -4 426 -3 376
Sogegamar. For Sogegamar, deconsolidated but with the group retain- Profit before tax 1 453 2 444
ing a 15% equity stake, the shares were reclassified at fair value under Tax 517 -213
financial assets. Net income 1 970 2 232
The key balance sheet and income statement data for companies con- In thousands of euros
solidated under the equity method are shown below (100% values,
reflecting consolidation restatements): 4.8. Financial assets

12/31/2010 12/31/2009 The “Financial assets” item mainly refers to shares in Sovaly, the com-
Investment property 1 230 12 630 pany formed for a development project and shares in Sogegamar, which
Assets 1 230 12 630 was deconsolidated in 2010.
Restated equity 890 9 418
Liabilities 890 9 418
Lease income 7 335 9 550
Net income 5 175 8 488
In thousands of euros

Klépierre – 2010 Annual report | 159

 Consolidated
financial statements
at December 31, 2010

4.9. Non-current assets

12/31/2009 Newly Increases Reductions Other 12/31/2010
consolidated
Loans and advances to non-consolidated companies, companies consolidated 6 559 6 371 -3 980 1 249 10 199
using the equity method and proportionally consolidated companies
Loans 77 4 -676 2 255 1 660
Deposits 16 035 10 237 -2 796 218 23 694
Other long-term financial investments 3 176 37 -1 -1 185 2 027
TOTAL 25 847 – 16 649 -7 453 2 537 37 580
In thousands of euros

4.10. Inventory 4.11. Trade accounts and notes receivable

At December 31, 2010, inventory totaled 0.4 million euros. They com- Trade accounts include the effect of spreading benefits granted to les-
prise lots acquired under the real estate agent regime. sees of offices and shopping centers.

Rental activities Other activities 12/31/2010 12/31/2009

Receivables 93 516 35 176 128 692 117 809
Provisions -25 712 -2 872 -28 584 -25 332
Total 67 804 32 304 100 108 92 477
In thousands of euros

4.12. Other receivables

12/31/2010 12/31/2009 12/31/2010 Less than one year More than one year
Tax receivables 36 732 38 044 Tax receivables 36 732 36 607 125
– Corporate income tax 6 286 6 049 – Corporate income tax 6 286 6 286
– VAT 30 446 31 995 – VAT 30 446 30 321 125
Other receivables 283 159 301 943 Other receivables 283 159 233 430 49 729
– Calls for funds 126 057 121 850 – Calls for funds 126 057 126 057 –
– Down payments to suppliers 6 823 9 121 – Down payments to suppliers 6 823 5 636 1 187
– Prepaid expenses 68 118 87 123 – Prepaid expenses 68 118 25 221 42 897
– Other 82 161 83 849 – Other 82 161 76 516 5 645
Total 319 891 339 987 Total 319 891 270 037 49 854
In thousands of euros In thousands of euros

The “VAT” item includes outstanding refunds due from local tax authorities in respect of recent acquisitions or construction projects in progress.
No refunds were granted over the period.
Pre-lease payments on construction leases or emphyteutic rights are amortized over the lifetime of the lease and recognized under “Prepaid
expenses”, totaling 59.6 million euros.
Funds managed by Ségécé on behalf of principals total 52 million euros and are recognized under “Other”.

4.13. Cash and cash equivalents

12/31/2010 12/31/2009
Cash equivalents 86 828 100 670
– Treasury and certificates of deposit 13 4 911
– Other fixed-income securities – –
–­ Money market investments 86 815 95 759
Cash 213 729 135 281
Total 300 557 235 951
In thousands of euros

160 | Klépierre – 2010 Annual report

Cash equivalents refers to 86.8 million euros invested in French open- •• a negative 2.8 million euros for exchanges of interest in La Rive,
ended money market funds. LC and Le Mais.
Funds managed by Ségécé on behalf of its principals are classified
under “Other receivables” (e52M at December 31, 2010 and e55.2M 4.15. Current and non-current financial liabilities
at December 31, 2009).
The available cash and marketable securities are made up of “Cash and 4.15.1. Change in indebtedness
cash equivalents”, plus the amount of funds managed by Ségécé on
behalf of principals, and totaled 352.6 million euros. Current and non-current financial liabilities totaled 7,571 million euros
at December 31, 2010.
12/31/2010 12/31/2009 Net financial debt totaled 7,325 million euros, compared with
Cash equivalents 86 828 100 670 7,279 million euros at December 31, 2009. Net debt is the difference
Cash 213 729 135 281 between financial liabilities (excluding fair value hedge revaluation) plus
Gross cash and cash equivalents 300 557 235 951 bank overdrafts, and available cash and marketable securities.
Bank credit balances 120 685 81 100 This increase of 46 million euros is the result of the following influences:
Net cash and cash equivalents 179 872 154 851 •• the principal funding requirements for the fiscal year were driven by
In thousands of euros investment (e430.9M) and payment of the 2009 dividend (e223.9M);
•• resources derived from the capital increase of 189.5 million euros result-
4.14. Shareholders’ equity ing from the proposal to pay the divided in the form of shares, disposals
(e320.1M) and free cash flow for the fiscal year;
4.14.1. Share capital •• the conversion to euros of Steen & Strøm net debt generated an
exchange rate effect that added 122 million euros to the net consoli-
Adopted by 84.6% of shareholders, the proposal to pay the 2009 divi- dated debt. This reflects the appreciation of Scandinavian currencies
dend in the form of shares resulted in the creation of 7,676,081 new against the euro, which also has the effect of increasing the euro value
shares and a gross capital increase of 189.2 million euros. of Steen & Strøm assets.
At December 31, 2010, capital was represented by 189,648,240 shares
each of 1.40 euros par value. The share capital is fully paid up. Shares 12/31/2010 12/31/2009
are either registered or bearer. NON-CURRENT
Bonds net costs/premiums 1 658 616 1 305 897
12/31/2010 12/31/2009 – Of which reevaluation due to fair value hedges 5 099 24 332
Authorized Loans and borrowings from credit institutions – 4 233 516 5 299 908
Ordinary shares at 1.4 euros each 189 648 240 181 972 159 more than one year
Redeemable convertible preference shares NA NA Other loans and borrowings 60 376 64 699
Total 189 648 240 181 972 159 – Advance payments to the Group and associates 60 376 64 699
In thousands of euros TOTAL NON-CURRENT FINANCIAL LIABILITIES 5 952 508 6 670 504
CURRENT
Bonds net costs/premiums 609 246 48 196
4.14.2. Treasury shares
Loans and borrowings from credit institutions – 296 541 373 837
less than one year
The Group acquired shares in Klépierre SA during the year, as autho- Accrued interest 67 371 52 606
rized by the ordinary general meetings of shareholders. – On bonds 63 088 36 118
Treasury shares totaled 2,880,158 at December 31, 2010 (compared – On loans from credit institutions 2 233 12 949
with 2,880,923 at December 31, 2009) at a total cost of 70.1 million – On advance payments to the Group and associates 2 050 3 539
euros. Commercial paper 641 205 365 679
Losses on disposal of treasury shares were recognized in equity and Other loans and borrowings 4 037 2 771
totaled 0.2 million euros at December 31, 2010 and 1 million euros at – Advance payments to the Group and associates 4 037 2 771
December 31, 2009. The acquisition cost of purchased securities and TOTAL CURRENT FINANCIAL LIABILITIES 1 618 400 843 089
gains made on sales of securities were respectively debited from, and In thousands of euros
credited to, equity.

4.14.3. Non-controlling interests

The non-controlling interests posted a negative effect of 1.1 million

euros due to changes in the scope consolidation:
•• a 5.9 million addition from consolidation of Valdebac;
•• a negative 4.3 million euros from discounting 2 put options granted by
Klépierre in 2009 to Finiper, IGC’s non-controlling shareholder; the total
commitment recognized as debt on the liabilities side of the balance
sheet to balance the corresponding reduction of non-controlling interests
was 27.3 million at December 31, 2010;

Klépierre – 2010 Annual report | 161

 Consolidated
financial statements
at December 31, 2010

4.15.2. Principal sources of financing

The Group’s main lines of financing are detailed in the 2 tables below. to lower by 200 million the authorized ceiling on the bilateral loan
The most notable change during the fiscal year was the issue in April arranged in October 2008.
of 2 bonds raising a total of 900 million euros. The finance raised The Group also issued a new bond in Norway for 600 million Norwegian
allowed the Group to pay down drawings on its bank lines of credit and kroner (e77M).

Principal sources of financing (in euros)

Borrower Klépierre % Reference Maturity Repayment Maximum Amount

interest rate date profile amount used
Bonds 2 189 2 189
Of which: Klépierre 100% 4.625% 07/15/2011 In fine 600 600
Klépierre 100% 4.250% 03/16/2016 In fine 689 689
Klépierre 100% 4.000% 04/13/2017 In fine 700 700
Klépierre 100% 4.625% 04/14/2020 In fine 200 200
Syndicated loans 1 150 1 150
Of which: Klépierre 100% Euribor 09/21/2014 In fine 1 000 1 000
Klémurs 84.1% Euribor 12/12/2011 In fine 150 150
Bilateral loans 2 600 785
Of which: Klépierre 100% E3m 06/30/2015 Amortizable 2 100 785
Klépierre (back-up) 100% E3m 06/30/2015 In fine 300 –
Klépierre (back-up) 100% E3m 10/07/2012 In fine 200 –
Mortgage loans 301 301
Of which: Klécar Italia 83% E3m 06/30/2015 Amortizable 104 104
GC Assago 100% E3m 07/03/2015 Amortizable 101 101
GC Collegno 100% E3m 07/15/2015 Amortizable 16 16
K2 85% E3m 01/15/2023 Amortizable 51 51
Le Havre Vauban and Lafayette 50% E3m 12/31/2014 In fine 24 24
Property finance leases 229 229
Of which: IGC 71.3% E3m 03/12/2022 Amortizable 28 28
IGC 71.3% E3m 08/01/2011 Amortizable 3 3
IGC 71.3% E3m 07/31/2011 Amortizable 5 5
IGC 71.3% E3m 07/24/2011 Amortizable 5 5
Cécoville 100% E3m 12/27/2019 Amortizable 39 39
Cécoville 100% E3m 04/03/2020 Amortizable 58 58
Clivia 50% E3m 07/02/2022 Amortizable 58 58
Klémurs/Cap Nord 84.1% E3m/Fixed rate – Amortizable 31 31
Short-term lines and bank overdrafts 83 63
Of which: Klépierre Finance (overdraft) 100% Euribor – – 50 30
IGC 71.3% E3m 03/09/2011 In fine 8 8
IGC 71.3% E3m 06/30/2011 In fine 25 25
Commercial paper 500 500
Klépierre (commercial paper) 100% – – In fine 500 500
KLépierre Group total in euros (1) 7 052 5 217
In millions of euros
(1) Totals are calculated excluding the backup lines of funding, since the maximum amount of the “commercial paper” line includes that of the backup line.

162 | Klépierre – 2010 Annual report

Steen & Strøm financing (in millions of euros or equivalent)

Issue Klépierre Reference Repayment Maximum Amount

currency % interest rate profile amount used
Bond market NOK 56,1% NIBOR In fine 77 77
Mortgage loans NOK 56,1% NIBOR – 824 824
Bank overdrafts NOK 56,1% NIBOR – 32 0
Commercial paper NOK 56,1% NIBOR In fine 141 141
Sub-total NOK 1 074 1 042
Issue Klépierre Reference Repayment Maximum Amount
currency % interest rate profile amount used
Bond market SEK 56,1% STIBOR – 0 0
Mortgage loans SEK 56,1% STIBOR – 551 551
Bank overdrafts SEK 56,1% STIBOR – 6 0
Commercial paper SEK 56,1% STIBOR – 0 0
Sub-total SEK 556 551
Issue Klépierre Reference Repayment Maximum Amount
currency % interest rate profile amount used
Bond market DKK 56,1% CIBOR – 0 0
Mortgage loans (1) DKK 56,1% CIBOR/Fixed rate – 667 667
Bank overdrafts DKK 56,1% CIBOR – 0 0
Commercial paper DKK 56,1% CIBOR – 0 0
Sub-total DKK 667 667
Total Steen & Strøm 2 297 2 259

TOTAL for the Group 9 349 7 476

(Klépierre and Steen & Strøm in euros)
(1) Of which fixed rate: 212 million euros.

4.15.3. Financial covenants relating to financing and rating

The Group’s main credit agreements include clauses, which, if not com-
plied with, could result in demands for early repayment of the corre-
sponding finance.
The stipulated financial ratios and amounts and their actual levels at
December 31, 2010, are shown in section 7. “Exposure to risks and
hedging strategy” paragraph 7.2. “Liquidity risk”.

Klépierre – 2010 Annual report | 163

 Consolidated
financial statements
at December 31, 2010

4.15.4. Breakdown of borrowings by maturity date

•• Breakdown of current and non-current financial liabilities:

Total Less than one year One-five years More than five years
NON-CURRENT
Bonds net costs/premiums 1 658 616 1 658 616
– Of which reevaluation due to fair value hedges 5 099 5 099
Loans and borrowings from credit institutions – more than one year 4 233 516 3 004 053 1 229 463
Other loans and borrowings 60 376 – 60 376 ­–
– Advance payments to the Group and associates 60 376 – 60 376
TOTAL NON-CURRENT FINANCIAL LIABILITIES 5 952 508 0 3 064 429 2 888 079

CURRENT
Bonds net costs/premiums 609 246 609 246
– Of which reevaluation due to fair value hedge 9 246 9 246
Loans and borrowings from credit institutions – less than one year 296 541 296 541
Accrued interest 67 371 67 371
– On bonds 63 088 63 088
– On loans from credit institutions 2 233 2 233
– On advance payments to the Group and associates 2 050 2 050
Commercial paper 641 205 641 205
Other loans and borrowings 4 037 4 037
– Advance payments to the Group and associates 4 037 4 037
TOTAL CURRENT FINANCIAL LIABILITIES 1 618 400 1 618 400
In thousands of euros

•• Maturity schedule of financing (amounts drawn in euro millions equivalent):

Repayment year Issue 2011 2012 2013 2014 2015 2016 2017 2018 2019 Totals
currency and after
Bonds EUR 600 – – – – 689 700 – 200 2 189
Loans and borrowings from credit institutions EUR 195 29 28 1 338 733 25 26 26 65 2 465
Short-term lines and bank overdrafts EUR 62 – – – – – – – 1 63
Commercial paper EUR 500 – – – – – – – – 500
Funding issued in EUR EUR 1 357 29 28 1 338 733 714 726 26 266 5 217
Funding issued in NOK NOK 154 295 89 310 21 10 97 44 23 1 042
Funding issued in SEK SEK 52 121 11 117 10 10 42 73 115 551
Funding issued in DKK DKK 3 4 8 8 22 22 22 72 506 667
TOTAL GROUPE 1 566 448 136 1 773 785 756 887 215 910 7 476
In millions of euros or equivalent

In 2011, amounts falling due mainly comprised repayment of a 600 mil-

lion euro bond, the maturity of a 150 million euro syndicated loan to
Klémurs and 33 million euros of short-term bank lines of credit in Italy.
Other maturities concern repayment of bank loans, notably in
Scandinavia (e68M) and Italy (e13M) and the Group’s renewable short-
term financing arrangements: overdrafts and commercial paper issues
(e30M and e641M, respectively, including e141M in Norwegian kroner).
Total outstanding Klépierre commercial paper in euros can be refinanced
by drawing down two confirmed bank lines of credit maturing in 2012
(e200M) and 2015 (e300M).

164 | Klépierre – 2010 Annual report

The contractual flows including principal and interest (non-discounted) by maturity date are as follows (million euros equivalent):

Repayment year 2011 2012 2013 2014 2015 2016 2017 2018 2019- Totals
2023
Bonds 682 67 67 67 67 734 716 9 209 2 616
Loans and borrowings from credit institutions 241 73 71 1 370 743 28 28 27 66 2 647
Short-term lines and bank overdrafts 63 – – – – – – – – 63
Commercial paper 500 – – – – – – – – 500
Funding issued in EUR 1 485 139 138 1 436 810 762 744 37 275 5 826
Funding issued in NOK 184 318 103 315 21 12 100 45 24 1 122
Funding issued in SEK 66 132 17 119 10 10 45 77 118 595
Funding issued in DKK 13 13 13 8 22 22 26 80 517 715
TOTAL GROUPE 1 748 603 271 1 879 863 805 915 239 934 8 258
In millions of euros or equivalent
Calculated on the basis of interest rates at 31.12.10.

At December 31, 2009, the amortization table for these contractual flows was as follows (million euros):

Repayment year 2010 2011 2012 2013 2014 2015 2016 2017 2018- Totals
2023
Bonds 57 643 29 29 29 29 696 – – 1 514
Loans and borrowings from credit institutions 404 248 897 1 231 330 746 36 35 100 4 027
Short-term lines and bank overdrafts 10 8 – – – – – – – 18
Commercial paper 299 – – – – – – – 299 598
Funding issued in EUR 769 900 926 1 261 359 775 732 35 399 6 157
Funding issued in NOK 148 35 344 28 306 16 15 95 74 1 061
Funding issued in SEK 16 57 103 12 50 11 10 39 148 447
Funding issued in DKK 14 15 15 18 22 35 34 34 547 733
TOTAL GROUPE 948 1 006 1 387 1 318 737 837 792 204 1 169 8 398
In millions of euros
Calculated on the basis of interest rates at December 31, 2009.

4.16. Hedging instruments

4.16.1. Rate hedging portfolio

As part of its risk management policy (see corresponding section),

Klépierre has contracted interest rate swap agreements allowing it to
switch from variable rate to fixed rate debt and vice-versa. Under this
arrangement, the Klépierre hedge rate (the proportion of gross financial
debt arranged or hedged at fixed rate) was 63% at December 31, 2010.

Klépierre – 2010 Annual report | 165

 Consolidated
financial statements
at December 31, 2010

At December 31, 2010, the breakdown of derivatives by maturity date was as follows:

Derivatives by maturity date

Hedging relationship 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total
Klépierre Cash flow hedge 150 300 200 – 1 450 450 250 500 50 500 3 850
­– Of which spot start swaps 150 300 200 – 1 450 – – 100 – – 2 200
– Of which forward start swaps – – – – – 450 250 400 50 500 1 650
Fair value hedge 600 – – – – – 700 – – 200 1 500
Klémurs Cash flow hedge – – – 100 250 – – – – – 350
– Of which spot start swaps – – – 100 250 – – – – – 350
– Of which forward start swaps – – – – – – – – – – –
GC Assago Cash flow hedge – – – – – 85 – – – – 85
GC Collegno Cash flow hedge – – – – – 15 – – – – 15
Le Havre - Vauban & Lafayette Cash flow hedge 2 2 2 2 18 26
K2 Cash flow hedge – – – 22 – – – – – – 22
EUR-denominated derivatives 752 302 202 124 1 718 550 950 500 50 700 5 848
Steen & Strøm Cash flow hedge
– Of which swaps 51 125 – 193 – 154 112 – – – 635
– Of which caps/collars 39 – – – – – – – – – 39
NOK-denominated derivatives 90 125 – 193 – 154 112 – – – 674
Steen & Strøm Cash flow hedge
– Of which swaps 78 100 – – 17 22 56 22 45 67 407
– Of which caps/collars – 22 – 67 – – – – – – 89
– Of which trading 45 – – – – – – – – – 45
SEK-denominated derivatives 123 123 – 67 17 22 56 22 45 67 541
Steen & Strøm Cash flow hedge
– Of which swaps – 70 – 67 – – – – – – 137
– Ofwhich caps/collars – – 27 – – 40 – – – – 67
DKK-denominated derivatives – 70 27 67 – 40 – – – – 204
TOTAL FOR THE GROUP (1) 964 620 229 450 1 735 767 1 118 522 95 767 7 267
In millions of euros
(1) Of which forward start swaps of 1,944 million euros, comprising 1,650 million euros in euros and 294 million euros in Scandinavian currencies.

The corresponding contractual flows (interest) break down as follows (positive flows = payer flows):

Hedging relationship 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total
Spot start swaps Cash flow hedge 81 75 67 64 30 4 3 1 – – 324
Forward start swaps Cash flow hedge 4 26 29 29 43 39 26 24 15 0 235
Spot start swaps Fair value hedge -26 -17 -17 -17 -17 -17 -8 -4 -4 -1 -127
Collar Trading – – – – – – – – – – –
EUR-denominated derivatives 59 84 80 76 56 27 22 20 10 -1 432
NOK-denominated derivatives 8 7 2 2 -0 -0 -1 0 0 0 19
SEK-denominated derivatives 7 7 4 3 1 1 1 0 -0 -0,2 24
DKK-denominated derivatives 4 4 3 2 1 1 – – – – 14
TOTAL FOR THE GROUP 78 102 89 83 58 28 22 20 10 -1 489
In millions of euros
Calculated on the basis of interest rates at December 31, 2010.

166 | Klépierre – 2010 Annual report

At December 31, 2009, the breakdown of derivatives by maturity date and the amortization schedule for the corresponding interest flows were as follows:

Hedging relationship 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total
Klépierre Cash flow hedge – 800 300 200 – 1 450 150 200 100 3 200
– Of which spot start swaps – 800 300 200 – 1 450 – – 100 2 850
– Of which forward start swaps – – – – – – 150 200 – 350
Fair value hedge – 600 – – – – – – – 600
Klécar Italia Cash flow hedge 90 – – – – – – – – 90
Klémurs Cash flow hedge – – – – 100 250 – – – 350
– Of which spot start swaps – – – – 100 250 – – – 350
GC Assago Cash flow hedge – – – – – – 85 – – 85
GC Collegno Cash flow hedge – – – – – – 15 – – 15
Le Havre Vauban et Lafayette Cash flow hedge – – – – 22 – – – – 22
EUR-denominated derivatives 90 1 400 300 200 122 1 700 250 200 100 4 362
Steen & Strøm Cash flow hedge
– Of which swaps/FRA (1) 120 84 117 – 181 – 84 – – 587
– Of which caps/collars – 36 – – – – – – – 36
NOK-denominated derivatives 120 120 117 – 181 – 84 – – 624
Steen & Strøm Cash flow hedge
– Of which swaps/FRA (1) 49 107 88 – – 15 20 – – 278
– Of which caps/collars – – 20 – 59 – – – – 78
SEK-denominated derivatives 49 107 107 – 59 15 20 – – 356
Steen & Strøm Cash flow hedge
– Of which swaps/FRA (1) – – 70 – 67 – – – – 137
– Of which caps/collars (2) – – – 27 – – 40 – – 67
DKK-denominated derivatives – – 70 27 67 – 40 – – 205
TOTAL FOR THE GROUP 259 1 628 595 227 428 1 715 394 200 100 5 546
In millions of euros
(1) Of which FRA 700 million NOK (e84M) and 500 million SEK (e49M).
(2) Excluding swap with 01/01/2010 maturity (e222M).

Hedging relationship 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total
Spot start swaps Cash flow hedge 110 106 81 73 70 32 4 3 1 480
Forward start swaps Cash flow hedge – 5 11 10 10 10 6 – – 52
Spot start swaps Fair value hedge -20 -9 – – – – – – – -29
EUR-denominated derivatives 90.0 102.0 92.0 83.0 80.0 42.0 10.0 3.0 1.0 503
NOK-denominated derivatives 11.9 7.6 6.3 5.0 3.3 1.8 0.9 – – 37
SEK-denominated derivatives 10.7 8.4 5.0 3.1 2.2 0.9 0.3 – – 31
DKK-denominated derivatives 3 5 4 3 2 1 1 – – 18
TOTAL GROUPE 115.7 122.9 107.4 93.6 87.1 45.7 11.7 3.0 1.0 588
In millions of euros
Calculated on the basis of interest rates at December 31, 2009.

Fair value of the interest rate hedging portfolio

Derivatives Fair value net of accrued interest at 12/31/2010 Change in fair value during 2010 Counterparty
Cash flow hedge -261.9 -25.3 Shareholders’ equity
Fair value hedge 13.8 -9.2 Total gross financial borrowings
Trading -0.6 -0.6 Income statement
TOTAL -248.7 -35.1
In millions of euros

Klépierre – 2010 Annual report | 167

 Consolidated
financial statements
at December 31, 2010

4.16.2. Exchange rate hedging portfolio

At December 31, 2010, the hedging portfolio also included an exchange

rate hedging instrument subscribed by Steen & Strøm to convert a loan
subscribed in Danish kroner to Swedish kronor based on a notional total
of 726 million Danish kroner (maturity date: March 31, 2011).

4.17. Long-term provisions

These include a 5.1 million euro provision to cover the risk presented
by a Major Retailer tax investigation instigated by the Principality of
Asturias.

4.18. Deferred taxes

12/31/2009 Change Cash flow hedging Other 12/31/2010
in net income reserves changes
Buildings -496 682 931 4 047 -491 704
Derivatives 6 787 -105 -3 062 381 4 001
Deficits 41 266 1 833 3 095 46 194
Other items 406 5 450 939 6 795
Total for entities in a net liability position -448 223 8 109 -3 062 8 462 -434 714
In thousands of euros

12/31/2009 Change Cash flow hedging Other 12/31/2010

in net income reserves changes
Buildings 4 814 -1 078 -114 3 622
Derivatives 38 452 -141 5 777 133 44 221
Deficits 24 605 11 200 280 36 085
Other items 4 958 -6 064 1 744 638
Total for entities in a net asset position 72 829 3 917 5 777 2 043 84 566
NET POSITIONS -375 394 12 026 2 715 10 505 -350 148
In thousands of euros

The line “Other changes” results from the -14.9 million euro change in
currency exchange rates and the 5.5 million euro impact of deconsoli-
dating Karl Johans Gate.

4.19. Social and tax liabilities and other liabilities

12/31/2010 12/31/2009 The 113.3 million euros in advance payments received from tenants in
Social and tax liabilities 93 574 94 158 respect of charges are recognized in “Creditor customers”.
Personnel and related accounts 25 111 22 904 The “Other liabilities” item consists primarily of funds representing the
Social security and other bodies 6 895 7 774 management accounts of Ségécé’s principals, balanced by an equal
State amount in “Other receivables” on the asset side of the balance sheet.
– Corporate income tax 13 128 25 393 These funds totaled 52.1 million euros at December 31, 2010.
– VAT 26 627 19 294
Other taxes and duties 21 813 18 794
Other liabilities 270 078 253 930
Creditor customers 113 298 101 315
Prepaid income 24 713 37 057
Other liabilities 132 067 115 558
In thousands of euros

168 | Klépierre – 2010 Annual report

5. Segment information
5.1. Segment income statement

For management purposes, the Group is structured into business seg-

ments and geographic regions. There are 7 operating segments.
Shopping centers are structured into 5 operating segments:
•• France/Belgium;
•• Scandinavia;
•• Italy/Greece;
•• Iberia (Spain and Portugal);
•• Central Europe.
The remaining 2 operating segments are Retail assets and Office
buildings.
The management team monitors the operating results of each business
segment independently as a basis for segment decision-making and
performance evaluation.
Group financial policies (including the impact of financial expenses and
revenues), corporate activities and fiscal result calculation are handled
at Group level, and are not allocated to the operating segments.

France/Belgium Scandinavia Italy/Greece Iberia Central Europe

12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009
Rents 356.7 348.7 183.8 160.3 118.3 100.3 95.0 96.7 78.0 81.5
Other rental income 11.7 10.5 – – 1.7 1.5 0.1 0.6 3.0 2.0
Lease income 368.4 359.2 183.8 160.3 120.0 101.8 95.0 97.3 80.9 83.5
Rental and real-estate expenses -25.7 -32.7 -32.8 -23.5 -12.4 -12.4 -9.3 -9.8 -16.7 -14.2
Net rent 342.6 326.5 150.9 136.7 107.6 89.4 85.7 87.5 64.2 69.3
Management and related income 47.6 53.3 28.5 31.8 8.7 7.3 7.5 8.1 4.6 5.2
Payroll and other general expenses -53.4 -49.4 -32.5 -37.0 -10.8 -10.2 -13.5 -13.5 -8.9 -8.3
EBITDA 336.8 330.4 146.9 131.5 105.5 86.5 79.8 82.1 59.8 66.2
Depreciation, amortization and provisions -84.9 -100.0 -117.9 -68.8 -31.5 -33.2 -43.2 -38.3 -131.0 -91.8
Income from disposals 4.0 41.8 17.6 – – -0.1 – – -0.7 -0.0
Share in earnings of equity method investees 1.7 2.4 – – – – – – – –
SEGMENT EARNINGS 257.7 274.5 46.6 62.8 74.1 53.2 36.5 43.8 -71.9 -25.6
Net dividends and provisions on non-consolidated
investments
Net cost of debt
Change in the fair value of financial instruments
Effect of discounting
PROFIT BEFORE TAX
Corporate income tax
NET income
In millions of euros

Klépierre – 2010 Annual report | 169

 Consolidated
financial statements
at December 31, 2010

Shopping centers Offices Retail Unallocated Klépierre group

Total France France
12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009
Rents 831.7 787.4 36.7 49.9 43.8 42.8 – – 912.2 880.1
Other rental income 16.4 14.7 – – 1.6 0.7 – – 18.0 15.4
Lease income 848.1 802.1 36.7 49.9 45.4 43.5 – – 930.2 895.5
Rental and real-estate expenses -97.0 -92.7 -4.0 -3.7 -1.4 -2.2 – – -102.4 -98.6
Net rent 751.1 709.4 32.7 46.2 44.0 41.3 – – 827.8 796.9
Management and related income 96.9 105.7 0.3 0.3 1.2 1.4 0.1 0.5 98.5 107.9
Payroll expenses -91.0 -90.5 -0.6 -0.9 -1.6 -1.4 -11.4 -10.9 -104.6 -103.7
General expenses -28.2 -27.8 -0.3 -0.3 -0.7 -0.6 -10.2 -9.1 -39.4 -37.8
EBITDA 728.8 696.8 32.1 45.3 42.9 40.7 -21.5 -19.5 782.3 763.2
Cost to income ratio (1) 14.0% 14.5% 2.9% 2.5% 5.1% 4.8% 15.5% 15.6%
Depreciation, amortization and provisions -408.5 -332.1 -11.8 -12.2 2.3 -34.0 -0.4 -0.2 -418.3 -378.5
Income from disposals 21.0 41.7 88.8 40.4 15.7 4.6 -0.0 - 125.5 86.6
Share in earnings of equity method investees 1.7 2.4 – – – – – – 1.7 2.4
SEGMENT EARNINGS 343.0 408.7 109.1 73.5 60.8 11.3 -21.8 -19.8 491.2 473.7
Net dividends and provisions on non-consolidated -0.1 -0.0
investments
Net cost of debt -295.4 -291.9
Change in the fair value of financial instruments -1.0 –
Effect of discounting -0.6 -0.9
PROFIT BEFORE TAX 194.1 180.9
Corporate income tax -11.7 26.8
NET INCOME 182.4 207.7
In millions of euros
(1) (Payroll + general expenses)/(Net rents + fees + other income).

5.2. Net book value of investment

property by segment

Net book value of investment property

Shopping centers 9 945 172
France/Belgium 3 557 631
Scandinavia 3 175 492
Italy/Greece 1 344 882
Iberia 1 041 214
Central Europe 825 953
Retail 542 971
Offices 390 880
Total 10 879 023
In thousands of euros

5.3. Investment by segment

Investments include acquisitions and changes of scope.

Shopping Retail Offices Total

centers 12/31/2010
Property, plant 4 100 – – 4 100
and equipment
Investment property 174 698 613 144 175 455
Fixed assets in progress 355 736 468 1 724 357 928
TOTAL 534 534 1 081 1 868 537 483
In thousands of euros

170 | Klépierre – 2010 Annual report

6. Notes to the financial statements: Fees from service companies fell by 4.4 million euros to 76.4 million
comprehensive income statement euros, mainly reflecting a fall in development fees in Scandinavia and
the acquisition of a 21.3% equity holding in IGC at the end of 2009.
6.1. Operating revenue Since the company was fully consolidated in 2010, fees billed by the
service companies are wholly eliminated from Group revenues.
6.1.1. Lease income includes:
6.2. Depreciation and provisions
•• rents: rents from investment property and rent-related income, such as on investment properties
car park rentals and early termination indemnities;
•• other lease income: income from entry fees and other income. Depreciation and provisions on investment property and other fixed
assets were up by 42.1 million euros to 416.3 million euros. Of this,
6.1.2. Other operating income comprises building works 11.9 million was in provisions for impairment of assets. The increase of
re-invoiced to tenants and other income 30.2 million euros in depreciation allowances is due to the increase in
real estate assets. Scandinavian assets were responsible for 12.7 million
Group revenues include rents and management and administration euros of this rise.
income earned by service companies. At December 31, 2010, the
breakdown by segment was as follows: 6.3. Income from sales of investment
property and equity interests
Rents Management Total
income Income from sales totaled 127.3 million euros. This total resulted mainly
Shopping centers 831.7 76.4 908.1 from the sale of:
France/Belgium 356.7 39.8 396.5 •• shares in Karl Johans Gate 16 AS for 14.3 million euros;
Scandinavia 183.8 20.2 204.0 •• the Parisian office buildings Marignan-Marbeuf (e58.2M) and Carré
Italy/Greece 118.3 6.2 124.6 Diderot (e11.5M) and the Place du Général-Leclerc in Levallois-Perret
Iberia 95.0 7.2 102.2 (e15.9M);
Central Europe 78.0 2.9 80.9 •• shopping malls in Douai (e12.6M), rue Candé in Rouen (e3.5M) and
Retail 43.8 0.0 43.8 the rue de Flandre Castorama store in Paris (e12.2M);
Offices 36.7 36.7 •• finally, equity investments in Sogegamar, l’Emperi, Sandri-Rome and
TOTAL 912.2 76.4 988.6 LC for -5.6 million euros.
In millions of euros

Revenues (excluding offices and retail) generated outside France rep-

resented 53.1%, compared to 51.46% at December 31, 2009.
Rents from shopping centers rose 5.6%, a rise of 44.3 million euros,
mainly due to external growth and to the acquisitions and extensions in
2009, in France, Scandinavia and Italy. It also takes into account the
appreciation of Scandinavian currencies. This increase was offset by
the impact of various disposals mainly in France.

Rents from office buildings fell by 13.2 million euros (-26.6%), due to
disposals of buildings in 2009 (23-25 avenue Kléber in Paris), early 2010
(Place du Général-Leclerc in Levallois-Perret) and the end of 2010
(23/25 rue Marignan, 36 rue Marbeuf in Paris). In addition to this there
was the restructuring of the Collines de l’Arche buildings in La Défense.
Retail segment rentals rose by 2.4% to 43.8 million euros following
acquisitions made in this segment during 2009: retail assets acquired
under the Défi Mode/Vivarte agreement, and Immo Dauland assets
(Chalon Sud 2).

Klépierre – 2010 Annual report | 171

 Consolidated
financial statements
at December 31, 2010

6.4. Net cost of debt

The net cost of debt totaled 295.4 million euros, compared with
291.9 million euros at December 31, 2009.
The majority of this 3.5 million euro increase reflects the rise in outstand-
ing debt, mostly in Scandinavia. Capitalized financial expense was
25.3 million euros compared to 32.4 million euros at December 31,
2009.

12/31/2010 12/31/2009
Capitalized interest 25 251 32 371
Interest on advances -2 009 330
Interest on bonds -85 809 -58 373
Interest on loans from credit institutions -119 468 -92 663
Other bank interest 3 107 -60 565
Other interest
Income from currency transactions 4 044 -1 414
Income from sale of securities 491 1 131
Net interest on swaps -100 518 -91 645
Net deferral of payments on swaps -14 664 -10 407
Transfer of financial expenses 3 332 4 962
Other financial income and expense -9 175 -15 632
Cost of indebtedness -295 418 -291 905
In thousands of euros

6.5. Taxes
12/31/2010 12/31/2009
Current taxes payable -23 716 -26 345
Deferred tax 12 026 53 129
Total -11 690 26 784
In thousands of euros

The Group reported net tax expense of 11.7 million euros. A breakdown
into SIIC, France common law and international segments is shown in
the reconciliations between theoretical and effective tax expense:

France Foreign Total

SIIC sector Common law companies
Pre-tax earnings and earnings from equity-method companies 277 901 25 222 -110 728 192 395
Theoretical tax expense at 34.43% -95 681 -8 684 38 124 -66 242
Exonerated earnings of the SIIC sector 122 616 122 616
Taxable sectors
Impact of permanent time lags 6 938 6 821 -1 736 12 023
Untaxed consolidation restatements -26 569 19 -2 448 -28 998
Impact of non-capitalized deficits -9 782 -26 -7 906 -17 714
Assignment of non-capitalized deficits 3 15 -530 -512
Exit tax on special reserve of long-term capital gains – – 18 18
Change of tax regime – – – –
Discount to present of deferred tax following restructuring – – – –
Discounting of tax rates and other taxes -971 -1 015 -15 869 -17 855
Rate differences 439 -419 -15 047 -15 027
Actual tax expense -3 007 -3 289 -5 394 -11 690
In thousands of euros

172 | Klépierre – 2010 Annual report

•• Tax expense payable by the Group was 23.7 million euros com- assets. Fiscal year 2010 included a 13 million euro non-recurring expense
pared to 26.3 million euros at December 31, 2009 for changes to the tax rate in Greece and Hungary. Stripping out non-
At December 31, 2009, this line included a 7.1 million charge from the recurring effects, the net deferred tax assets rose by 1.5 million euros.
free reappraisal of Italian assets and a gain from a tax settlement in the At December 31, 2010, current deferred tax assets mainly resulted from:
Czech Republic. Stripping out non-recurring effects in 2009 and 2010, •• unrealized exchange rate gains and income (e-3.9M);
the tax expense payable increased by 4.6 million euros. •• depreciation and amortization charges restated using the components
method and provisions for impairment of buildings (e6M);
•• Deferred tax assets were 12 million euros compared to 53.1 million •• Discounting of tax loss carryforwards (e19.6M).
euros at December 31, 2009
The previous year’s deferred tax also included a non-recurring deferred Ordinary tax loss carryforwards are capitalized where their realization is
tax asset of 29.5 million euros booked in Italy following a reappraisal of deemed probable.

Country Statutory Inventory of Inventory of Change in OD Capitalized Amounts Change in Amounts Amounts not Remarks
tax rate ordinary ordinary in 2010 deferred capitalizable capitalized capitalized at capitalized at
deficits at deficits at tax at at amounts 12/31/2010 12/31/2010
12/31/2009 12/31/2010 12/31/2009 12/31/2010
Belgium 34.00% -26 413 -25 289 1 124 1 437 8 598 3 309 4 746 3 852 Unlimited deferral of ordinary deficits
Denmark 25.00% -60 265 -57 514 2 752 15 066 14 378 -688 14 378 – Unlimited deferral of ordinary deficits
Spain 30.00% -43 284 -47 276 -3 992 11 295 14 183 -49 11 246 2 937 Deficits can be deferred for fifteen years
France 34.43% -74 149 -100 964 -26 815 4 34 486 1 5 34 481 Unlimited deferral of ordinary deficits
33.00%
16.50%
Grece 24.00% -4 264 -4 081 183 1 066 979 -128 938 41 Deficits can be deferred for five years.
Hungary 10.00% -11 485 -93 068 -81 583 2 182 9 307 7 125 9 307 – Unlimited deferral of ordinary deficits
India 33.99% – – –
Italy 27.50% -8 673 -7 908 765 2 511 2 299 -1 511 1 000 1 299 Ordinary deficits deferrable for
or 5 years except first three years,
31.40% indefinitely deferrable
Luxembourg 28.59% -20 516 -38 202 -17 686 10 922 – 10 922 Tax deficits not capitalized
Norway 28.00% -72 657 -88 534 -15 878 11 859 24 790 698 12 557 12 233 Unlimited deferral of ordinary deficits
The 25.50% -7 036 -7 140 -104 1 821 – 1 821 Holding company: dividends and
Netherlands gainsfrom sales of shares exempt
Poland 19.00% -36 466 -45 066 -8 599 6 337 8 562 1 487 7 824 738 Deficits can be deferred for five years
Portugal 26.50% -1 094 -4 414 -3 321 279 1 145 869 1 148 -3 Deficits can be deferred for six years
or
25.00%
Czech 19.00% -3 474 -134 3 340 26 – 26
Republic
Sweden 26.30% -62 612 -76 801 -14 189 13 835 20 199 5 296 19 131 1 068 Unlimited deferral of ordinary deficits
TOTAL -432 388 -596 391 -164 003 65 871 151 695 16 409 82 280 69 415
In thousands of euros

Klépierre – 2010 Annual report | 173

 Consolidated
financial statements
at December 31, 2010

7. Exposure to risks and hedging strategy Measurement of risk exposure

Klépierre identifies and regularly measures its exposure to the various The first 2 of the following tables show the exposure of Klépierre’s
sources of risk (interest rates, liquidity, foreign exchange, counterparties, income to an interest rate rise, before and after hedging.
equity markets, lawsuits, etc.) and sets applicable management policies
as required. Interest rate position before hedging Amount Change in financial
The Group pays close attention to managing the financial risks inherent expenses caused
by a 1% increase
in its business activity and the financial instruments it uses. in interest rates
Gross position 5 064 50.6
7.1. Rate risk Marketable securities -87 -0.9
Net position before hedging 4 977 49.8
7.1.1. Cash flow hedge rate risk In millions of euros

Recurrence of variable rate financing requirement Interest rate position after hedging Amount Change in financial
expenses caused
by a 1% increase
In structural terms. variable rate debt represents a significant proportion in interest rates
of the Group’s borrowings (68% of debt at December 31, 2010, before Gross position before hedging 5 064 50.6
hedging). It includes: bank loans (standard and mortgages), draw downs Net hedge -2 323 -23.2
on syndicated loans, commercial papers and the use of agreed Gross position after hedging 2 741 27.4
overdrafts. Marketable securities -87 -0.9
Net position after hedging 2 654 26.5
Identified risk In millions of euros

An increase in the interest rate against which variable rate debts are Given that changes in the fair value of cash flow hedge swaps are rec-
indexed (primarily three-month Euribor) could result in an increase in the ognized in equity, the following table quantifies the likely impact on
future interest rate expenses. equity of an interest rate rise based on Klépierre’s cash flow hedge
swaps portfolio at the period end (including deferred swaps).

Fair value of cash flow hedge Fair value net Change in equity
of accrued interest caused by a 1%
increase in interest
rates
Cash flow hedge swaps
at December 31, 2010
Euro-denominated portfolio -248.7 174
Steen & Strøm portfolio -13.22 37
Cash flow hedge swaps -261.9 211
at 12/31/2010
In millions of euros

174 | Klépierre – 2010 Annual report

Financial borrowings after interest rate hedging breaks down as follows:

Fixed-rate borrowings Variable-rate borrowings Total gross financial debts Average cost
of debt,
Mortgage amount Rate Fixed part Mortgage amount Rate Fixed part Mortgage amount Rate base 12/31/2010
12/31/2008 5 952 4,33% 83% 1 246 3.49% 17% 7 198 4.19% 4.38%
12/31/2009 5 613 4.56% 76% 1 773 1.73% 24% 7 386 3.88% 4.08%
12/31/2010 4 735 4.54% 63% 2 741 2.10% 37% 7 476 3.65% 4.07%
In millions of euros

N.B.: The average cost of debt, “base December 31, 2010” is calculated on the basis of the interest rates and funding structure in place at December 31, 2010, and does not therefore constitute a forecast
of the average cost of debt for Klépierre over the coming period. It includes non-utilization commissions and the spreading of issue costs and premiums.

Hedging strategy Measurement of risk exposure and hedging strategy

Klépierre has set a target hedging rate of approximately 70%. This rate At December 31, 2010, fixed rate debt totaled 2,413 million euros
is defined as the proportion of fixed-rate debt (after hedging) to gross before hedging.
financial debt. As the previous table shows, this proportion was 63% at The “fair value hedge” strategy is calibrated to address the overall hedge
December 31, 2010. rate target. It is also based on the use of rate swaps allowing fixed rate
In order to achieve its target level, Klépierre focuses on the use of swap payments to be swapped to variable rate payments. The “credit margin”
agreements, which enable fixed rates to be swapped for variable rates, component is not hedged.
and vice-versa. The duration of “fair value hedge” instruments is never longer than that
Klépierre can also cover up its cash flow hedge rate risk by limiting the of the debt hedged, since Klépierre wishes to obtain a very high level
scope for variation around the benchmark index by buying a cap on of “efficiency”, as defined by IAS 32/39.
that index, for example.
Given the nature of its business as a long-term property owner and its 7.1.3. Marketable securities
growth strategy, Klépierre is structurally a borrower. Since the Group is
not seeking to reduce short-term debt as a proportion of total indebted- At December 31, 2010, Klépierre held 86.8 million euros of marketable
ness, it is highly likely that its short-term variable rate loans will be securities.
renewed in the medium term. This is the reason why Klépierre’s hedging Cash equivalents refers to investments in open-ended money market
strategy includes both the long-term and short-term aspects of its funds (UCITS) in France (e86.7M) and Scandinavia (e0.1M).
borrowings. These investments expose Klépierre to a moderate interest rate risk as
Generally, hedge terms may exceed those of the debts hedged, on the a result of their temporary nature (cash investments) and the amounts
condition that Klépierre’s financing plan emphasizes the high probability involved.
of these debts being renewed.
7.1.4. Fair value of financial assets and liabilities
7.1.2. Fair value hedge rate risk
Under IFRS, financial debts are recognized in the balance sheet at amor-
Description of fixed rate borrowing tized cost and not at fair value.
The following table compares the fair values of debts with their corre-
The majority of Klépierre’s fixed rate borrowing currently consists of sponding nominal values. Fair values are arrived at on the basis of these
bonds and mortgage loans in Scandinavia. principles:
The main source of additional fixed rate debt is potentially the bond •• variable rate bank debt: the fair value is equivalent to the nominal
market or convertible bonds and other “equity-linked” products. amount;
•• fixed rate bank debt: the fair value is calculated solely on the basis of
Identified risk rate fluctuations;
•• bonds (and convertibles, where applicable): use of market quotations
Klépierre’s fixed-rate debt provides a risk-free exposure to fluctuations where these are available.
of interest rates, as far as the fair value of fixed-rate debt increases while
rates fall, and vice-versa.
At any given time, Klépierre may also find itself in the position of needing
to increase its fixed-rate debt (e.g.: in a future acquisition). It would then
be exposed to the risk of a change in interest rate prior to an arrange-
ment of the loan. Klépierre may then consider hedging against this risk,
which is treated as a “cash flow hedge” risk under IFRS.

Klépierre – 2010 Annual report | 175

 Consolidated
financial statements
at December 31, 2010

Klépierre has chosen not to revaluate the margin component of these

unlisted loans inasmuch as the exceptionally difficult conditions seen in
the credit markets since the beginning of the financial crisis have accen-
tuated the differences between margins in individual markets (bonds,
corporate lending, mortgages, etc.) and made any assessment very
uncertain.

12/31/2010 12/31/2009
Par value Fair value Change in fair value Par value Fair value Change in fair value
caused by a 1% increase caused by a 1% increase
in interest rates (1) in interest rates (1)
Fixed-rate bonds 2 189 2 220 -84 1 289 1 323 -48
Fixed-rate bank loans 224 231 -6 522 526 -13
Other variable-rate loans 5 064 5 064 – 5 575 5 575 0
Total 7 476 7 514 -90 7 386 7 424 -61
In millions of euros
(1) Change in fair value of the debt as a result of a parallel “shift” in the rate curve.

Derivatives are recognized in the balance sheet at their fair value. At Outstanding commercial paper (which represents the bulk of short-term
December 31, 2010, a 1% rise in rates would have resulted in a rise of financing) never exceeds the “backup” lines, which would enable imme-
153 million euros in the value of the Group’s euro-denominated interest diate refinancing of this borrowing in the event of refinancing problems
rate swaps (cash flow hedge and fair value hedge). in the market.
On the asset side, unconsolidated securities are recognized under Klépierre also had unused lines of credit (including bank overdrafts)
“securities available for sale”, and are therefore measured at their fair totaling 1,373 million euros at December 31, 2010. These lines will be
value. Given the nature of business conducted by the companies con- easily sufficient to absorb the main refinancing transactions scheduled
cerned, it is estimated that their net book value is close to their fair for the second half of the year.
value. Generally speaking, access to finance for real estate companies is facili-
tated by the security offered to lenders in the form of the companies’
7.1.5. Measures and resources for managing property assets.
interest rate exposure Some Klépierre finance sources (syndicated loans, bonds, etc.) are
accompanied by financial covenants. Failure to comply with these cov-
Given the importance to Klépierre of managing interest rate risk, its enants may result in compulsory early repayment (see the note concern-
management team is involved in all decisions concerning the hedging ing financial liabilities). These covenants are based on the standard
portfolio. The Finance Department uses IT systems to provide real-time ratios applying to real estate companies, and the limits imposed leave
tracking of market trends and calculate the market values of its financial Klépierre with sufficient flexibility.
instruments, including derivatives. Klépierre SA bonds (e2,189M) include a bearer option, providing the
option of requesting early repayment in the event of a change of control
7.2. Liquidity risk capable of changing Klépierre’s rating to “non-investment grade”. Apart
from this clause, no other financial covenant refers to Standard & Poor’s
Klépierre is attentive to the long-term refinancing needs of its business rating for Klépierre.
and the need to diversify maturity dates and the sources of finance in
such a way as to facilitate renewals.
With this objective in mind, the average loan period at December 31,
2010 was 5.5 years, with borrowings spread between markets (the
bond market and commercial paper account for 39% of the debt, with
the balance being raised in the banking market). A range of different
sources (syndicated loans, mortgage loans, etc.) and counterparties are
used within the banking market itself.

176 | Klépierre – 2010 Annual report

 Principal covenants Maximum amount of Impact of Contractual limit (1) Level Level
related finance non-compliance at 12/31/2009 at 12/31/2010
Klépierre financing
Loan-To-Value ≤ 63% (2) 49.4% 47.2%
EBITDA/Net cost of financing ≥ 1.9 (2) 2.6 2.6
Secured debt/Revalued assets ≤ 20% 17% 15%
3 600 Default
Revalued asset value – group share ≥ e6Bn ≥ e11.8Bn ≥ e12.3Bn
Percentage of financial debt belonging to subsidiaries ≤ 30% 9% 11%
(excl. Steen & Strøm)
Secured debt/RNAV 2 189 Default ≤ 50% 29.0% 8.4%
Klémurs financing
Loan-To-Value Ratio total ≤ 65% 60.8% 58.2%
Ratio senior ≤ 55% (3) 39.8% 37.6%
EBITDA/Net cost of financing 150 Default Ratio total ≥ 1.8 2.4 2.4
Ratio senior ≥ 2.5 (3) 3.04 2.78
Secured debt/Revalued assets ≤ 20% 7.2% 5.0%
Revalued asset value – group share ≥ e300M ≥ e619.5M ≥ e633.0M
Steen & Strøm financing
Book equity ratio (shareholders’ equity/revalued asset total) 565 Default ≥ 20% 29.1% 27.7%
In millions of euros
(1) Where applicable, the limit imposed by the most restrictive contract is adopted.
(2) Until June 2011, after which the values will be 60% for LTV and 2 for the EBITDA/Net cost of financing ratio.
(3) Excluding subordinated debt.

In most of Klépierre’s borrowing agreements, covenant ratios limiting Swedish assets are funded by loans denominated in Danish kroner
the share of securitized debt exclude Steen & Strøm mortgages from (DKK726M). The underlying currency risk is fully hedged using exchange
the calculation, since these are without recourse to Klépierre and, in any rate swaps.
case, Steen & Strøm’s independent financing in its domestic markets is The principal exposure of the Klépierre Group to Scandinavian currency
a welcome source of diversification for the group. For the same reasons, risk is therefore limited essentially to the funds invested in the company
as stated in its bond prospectuses, the covenants governing Klépierre’s (share in equity of Steen & Strøm).
bonds followed the same practice as their bank borrowings.
7.4. Counterparty risk
7.3. Currency risk
Counterparty risk is limited by the fact that Klépierre is structurally a
Until its acquisition of Steen & Strøm in October 2008, the majority of borrower. This risk is therefore limited essentially to those investments
Klépierre’s business was conducted within the eurozone, with the made in derivative transactions by the Group and its counterparties.
exception of the Czech Republic, Hungary and Poland.
To date, the currency risk posed by these countries has not been 7.4.1. Counterparty risk on investment securities
assessed sufficiently high to warrant derivative hedging, since the acqui-
sitions and the acquisition financing were denominated in euros. The counterparty risk on investments is limited by the type of products
Generally, rents are invoiced to lessees in euros and converted into the used:
local currency on the billing date. Lessees have the choice of paying •• monetary UCITS managed by recognized institutions, and therefore
their rents in local currency or in euros (or in dollars for some minority carrying a range of signatures;
leases). The currency risk on minimum guaranteed rents is therefore •• loans from the governments of countries in which Klépierre operates (in
limited to any variance between the rent as invoiced and the rent actu- the form of loans/borrowings);
ally collected if the currency should fall in value against the euro between •• occasionally certificates of deposit issued by top-rated banks.
the invoice date and the date of payment in local currency by the
lessee.
At the same time, Klépierre ensures that lease payments from lessees
do not represent an excessively high proportion of their revenue in order
to avoid any worsening of their financial position in the event of a sharp
increase in the value of the euro, which could increase the risk of their
defaulting on payments due to Klépierre.
In Scandinavia though, leases are denominated in the local currency.
Funding is therefore also raised in the local currency. However, some

Klépierre – 2010 Annual report | 177

 Consolidated
financial statements
at December 31, 2010

7.4.2. Counterparty risk on hedging instruments 8. Finance and guarantee commitments

Klépierre conducts derivative instrument transactions only with financial 8.1. Reciprocal commitments
institutions recognized as financially sound. In no event would the Group
deal with an institution rated lower than A- by S&P or an equivalent The reciprocal commitments shown are reciprocal guarantees given
agency. under property development contracts and sale before completion con-
tracts (under which payment is guaranteed by the buyer, and completion
7.5. Equity risk by the developer).

Klépierre holds no equities other than its own shares (2,880,158 shares 12/31/2010 12/31/2009
at December 31, 2010), which are recognized as treasury stock at their Guarantees under Property Development/ 297 399 316 575
historical cost. Sale Before Completion contracts
Total 297 399 316 575
7.6. Legal and tax risks In thousands of euros

During 2009, Buffalo Grill decided to withhold payment of a portion of 8.2. Commitments received and given
some rental payments, corresponding to the application of the index-
ation clause contained in its lease. Following the issue of a provisional 12/31/2010 12/31/2009
court order (ordonnance de référé), confirmed on appeal, upholding the Commitments given
application made by Klémurs, Buffalo Grill is now up to date with all its Security deposits on loans to employees 7 681 9 664
rental payments. However, the underlying suit is ongoing. This situation Guarantees and deposits 22 230 24 584
apart, in the twelve months covered by these consolidated financial Purchase commitments 119 591 145 114
statements, neither Klépierre nor its subsidiaries have been the subject Total 149 502 179 362
of any governmental, judicial or arbitration action (including any action Commitments received
of which the issuer has knowledge, is currently suspended or is threat- Deposits received as guarantees in real-estate 260 030 300 030
management and transactions
ened) which has recently had a significant impact on the financial posi-
Sale commitments – –
tion or profitability of the issuer and/or the Group.
Deposits received from tenants 82 922 64 394
In May 2008, Klépierre and Finim set up a REIF in Italy (K2 fund). Before
Other guarantees received – 12 120
the fund could take on assets the group had to pay a flat-rate tax and
Lines of credit confirmed but not used 1 315 000 825 000
exit tax.
Total 1 657 952 1 201 544
Italy brought in a new law affecting the taxation of real estate funds on
In thousands of euros
July 30, 2010. It specified part of the new regulatory constraints on real
estate investment funds. Any fund that does not meet the criteria must
be brought into compliance or liquidated. In either case, it will be liable 8.2.1. Purchase commitments
for an additional tax. A further decree is to be published shortly specify-
ing how the criteria are to be assessed. In the meantime, Klépierre has Purchase commitments mainly consist of a purchase promissory agree-
booked no provisions. ment on a retail park in Savignano, Italy, for 69.2 million euros.
Earnout clauses exist for some acquisitions. In accordance with arti-
cles 32 and 34 of IFRS 3, the price adjustment applied to the cost of
the business combination on the acquisition date must be recognized
where adjustment is likely and can be reliably estimated on the balance
sheet date.
The price paid for Sadyba (part of the Polish acquisitions made in 2005)
is subject to an earnout clause. Klépierre does not own outright the land
on which the center is built, but holds a lease with an expiry date of
July 31, 2021. It will pay the seller an additional sum if the seller can
arrange an extension of the lease or full ownership within ten years from
July 2005. Since the likelihood of the lease being extended or full own-
ership granted cannot be measured, this additional payment is not cur-
rently recognized.

178 | Klépierre – 2010 Annual report

8.2.2. Deposits received as guarantees 8.4. Shareholders’ agreements
in real-estate management
Shareholder agreements relating to Klécar France, Klécar
As part of its real-estate management activities in 2010, the Klépierre Europe Sud, Solorec and Klécar Participations Italie
Group, via Ségécé, enjoyed a financial guarantee from BNP Paribas for
a variable amount capped at 260 million euros. The shareholder agreements between Klépierre and CNP Assurances
and Ecureuil Vie were amended by a rider signed on December 30,
8.2.3. Lines of credit confirmed but not used 2004, the effect of which was to cancel the liquidity commitments given
by Klépierre to its partners.
At December 31, 2010, Klépierre had access to 1,353 million euros in The agreement provides for the usual minority protections: pre-emption
lines of credit confirmed but not used. This total was made up as right, joint exit right and the decision-making process applying to invest-
follows: ment or divestment. Each agreement contains 2 additional clauses:
•• a 1,315 million euro line of credit under the bilateral loan from •• one in favor of Klépierre: an obligation for the non-controlling sharehold-
BNP Paribas (maturing 2012 and 2013); ers to exit at the request of Klépierre in the event of Klécar assets being
•• a 38 million euro line of credit available to Steen & Strøm. sold to a third party;
An additional amount of 20 million euros is also available in the form of an •• the other in favor of the non-controlling shareholders: a process enabling
unconfirmed BNP Paribas overdraft, partly drawn at December 31, 2010. the latter to consider a range of exit scenarios in 2011, 2016 and 2017
(for the Italian companies) or 2010, 2014 and 2015 (for the other malls):
Other guarantees received – asset sharing or sale,
– purchase of non-controlling shareholdings by Klépierre (with no obliga-
To the best of our knowledge, we have not omitted any significant or tion for Klépierre),
potentially significant off-balance sheet commitment as defined by the – sale to a third party with payment of a discount by Klépierre if the offer
applicable accounting standards. is less than the Revalued Net Assets.

8.3. Guarantees Partners’ agreement in respect of Bègles Arcins

In general terms, the Group finances its assets from equity or debt Signed on September 2, 2003, this agreement between Klépierre and
contracted by its parent company, rather than pledging its own assets, Assurecureuil Pierre 3 contains provisions regulating the relationship
except in Scandinavia, where Steen & Strøm mainly rely on local cur- between the company partners, and, more specifically, a dispute resolu-
rency mortgages to fund their activities. tion clause.
Debts secured by pledges are as follows:
Partners’ agreement between SNC Kléber la Perouse and SCI
Amount of loan at Amount Vendome Commerces in respect of SCS Cecobil
12/31/2010 of mortgage
On property, plant and equipment Signed on October 25, 2007 following the transition of Cecobil to a
France 28 606 54 670 general partnership, this agreement provides for the usual protections
Italy 271 661 583 000 regarding the planned sale of equity shares to a third party (first refusal
Denmark 518 440 532 662 and total joint exit rights) and change of control of a partner.
Norway 789 658 749 030
Sweden 479 161 498 108 Partners’ agreement between SNC Kléber la Perouse
TOTAL 2 087 526 2 417 470 and SCI Vendome Commerces in respect of SCI Secovalde
In thousands of euros and SCI Valdebac

Signed on October 25, 2007, this agreement provides for the usual

protections regarding the planned sale of equity shares to a third party
(first refusal and total joint exit rights) and change of control of a
partner.

This partners’ agreement amended on December 28, 2008 and

November 23, 2010, also includes SCI Valdebac since December 8,
2010. For instance, in December 8, 2010 more than 99.99% of the
shares were transferred from SNC Kléber la Pérouse and SCI Vendôme
Commerces to SCI Secovalde. As a consequence, the partners’ agree-
ment that only concerns SCI Valdebac, signed by SNC Kléber la
Pérouse and SCI Vendôme, was terminated on December 8, 2010.

Klépierre – 2010 Annual report | 179

 Consolidated
financial statements
at December 31, 2010

Partners’ agreements between Klépierre, Kléfin Italia, Finiper, Partners’ agreement between Klépierre Luxembourg SA
Finiper Real Estate & Investment, Ipermontebello, Immobiliare and Torelli SARL in respect of Holding Klégé SARL
Finiper and Cedro 99 in respect of Clivia, and between
Klépierre, Klefin Italia, Klépierre Luxembourg, Finiper, Finiper Signed on November 24, 2008, this partners’ agreement sets out the
Real Estate & Investment, Ipermontebello, Immobiliare Finiper operating structure for Holding Klégé SARL, and includes the usual
and Cedro 99 in respect of Immobiliari Galleria Commerciali provisions governing share capital transactions, decision-making and
(IGC) the right to information. Both parties enjoy preemption rights in the event
of planned disposals of shares in the company to a third party.
A partners’ agreement was signed in 2002 during the acquisition of IGC Holding Klégé SARL owns 100% of the equity of Klégé Portugal SA,
shares by the Klépierre Group. the company formed specifically to manage the construction of a shop-
Its main provisions – including those regarding Klépierre’s preemptive right – ping center in Portimão, Portugal.
were restated in a new agreement of 2007 applying to IGC and Clivia
(the owner of the Lonato, Verona and Vittuone malls). In the case of IGC, Shareholder agreement about Kléprims between Kléprojet 1
this was replaced by an agreement signed on July 23, 2009. and Holprim’s
All these agreements grant Finiper a put (option to sell) enabling the
latter to sell its shares in IGC and/or Clivia to Klépierre. This put expires Signed on September 20, 2010, it gives Kléprojet 1 exit rights if the
in 2017 and can be split into two parts: suspensive conditions are unmet as well as the usual protections
•• 1 of 12% and 1 of 16.70% for IGC; regarding the planned sale of equity shares to a third party (first refusal
•• 2 parts – each of 25% – for Clivia. and total joint exit rights), change of control of a partner and other con-
ditions affecting the relationship between partners.
Any refusal by Klépierre regarding the second IGC part and both Clivia
parts will result in a penalty becoming payable to the Finiper group. 8.5. Commitments under operating leases – Lessors

Partners’ agreement between Klépierre and Stichting General description of the main clauses contained in the lessor’s lease
Pensioenfonds ABP in respect of the Swedish company agreement:
Nordica Holdco AB, and the Norwegian companies Storm
Holding Norway AS and Steen & Strøm 8.5.1. Shopping centers

The shares in Steen & Strøm were acquired via Storm Holding Norway Rental periods vary in different countries. The terms governing the fixing
AS, a company registered in Norway and wholly-owned by Nordica and indexing of rents are set out in the agreement.
Holdco AB, a company registered in Sweden. Indexation enables the reappraisal of the minimum guaranteed rent. The
This agreement was made on July 25, 2008 and an amendment made indices used vary from country to country.
on October 7, 2008. It includes the usual provisions to protect non-
controlling interests: qualified majority voting for certain decisions, pur- Indexation specific to each country
chase option in the event of deadlock and joint exit rights, as well as
the following provisions: France indexes its leases to the French commercial rents index (ILC) or
•• a 1-year inalienability period applied to Steen & Strøm shares from the cost of construction index (ICC). The ILC is a compound index derived
date of acquisition; from the French consumer price index (IPC), retail trade sales value
•• each party has a right of first offer on any shares which the other party index (ICAV) and cost of construction index (ICC). Leases are modified
wishes to transfer to a third party, subject to the proviso that where in line with the index on January 1, each year. Most leases, 75%, are
shares are transferred by one party (other than Klépierre or one of its indexed to the ILC for the second quarter, which is published in October
affiliates) to a Klépierre competitor (as defined in the agreement), the and applicable to the following January 1.
shares concerned will be subject to a right of first refusal and not a right In Spain, the consumer price index (CPI) is recorded annually every
of first offer; January 1.
•• from the sixth year following acquisition, either party may request a In Italy, the system is based on the consumer price indices (excluding
meeting of shareholders to approve, subject to a two-thirds majority, the tobacco) for working class and junior management (ISTAT), but is more
disposal of all the shares or assets of Steen & Strøm, or a market flota- complex in its implementation: depending on the lease, either the ISTAT
tion of the company. is applied at 75% or the full reference segment index is applied.
Through deeds of adherence dated December 23, 2009, Storm ABP In Portugal, the index used is the consumer price index (CPI), excluding
Holding B.V. and APG Strategic Real Estate Pool N.V. adhered to this property.
partners’ agreement. The consumer price index (CPI) is applied in Greece.
The Eurostat IPCH eurozone index used in Central Europe is based on
consumer prices in the EMU countries.

180 | Klépierre – 2010 Annual report

There is no obligatory minimum or maximum period in Norway. However All charges, including property and office taxes, are usually met by the
leases are usually written for periods of five or ten years. Unless agreed lessee, with the exception of works regulated by article 606 of the
otherwise, either party may request an annual rent review based on the French Civil Code, which are usually paid for by the lessor.
trend in the Norwegian consumer price index. Professionals (lawyers, chartered accountants, architects, etc.) are not
In Sweden, the period of a commercial lease is agreed by the parties covered by the statute. The minimum duration for such leases is six
to the agreement. By default leases are open-ended. but most com- years, with the lessee free to terminate at any time by giving six months’
mercial leases are written for at least three years. Where the lease is notice. These agreements are not renewable. The other conditions they
written for a period in excess of three years, annual indexation linked to contain are based more closely on those of commercial leases.
the national consumer price index is the norm. The total amount of conditional rents recognized in income: the
In Denmark, the parties are free to agree the amount of rent and rent conditional rent is that portion of the total rent which is not a fixed
payment methods. Rents may be fixed or indexed against the revenue amount, but is a variable amount based on a factor other than time (e.g.
reported by the lessee. In most cases, the rent is reviewed annually on percentage of revenues, degree of use, price indices, market interest
the basis of the trend in the Danish consumer price index. Under the rates, etc.).
terms of commercial letting legislation, either party may request that the
rent is adjusted to reflect the market rate every four years. This provision Minimum payments made under the lease are those payments which
applies unless the parties agree otherwise. the lessee is, or may be, required to make during the term of the lease,
excluding the conditional rent, the cost of services and taxes to be paid
Minimum guaranteed rent and variable rent or refunded to the lessor.
At December 31, 2010, the total future minimum rents receivable under
Appraised on a year-by-year basis, the rent payable is equivalent to a non-cancelable operating leases were as follows:
percentage of the revenues generated by the lessee during the calendar
year concerned. The rate applied differs depending on business type. 12/31/2010
The total amount of this two-part rent (a fixed part + a variable part) can Less than one year 753 558
never be less than the Minimum Guaranteed Rent (MGR). The MGR is One-five years 1 262 859
reappraised annually by application of the index. The variable part of More than five years 503 663
the rent is equivalent to the difference between the revenue percentage Total 2 520 079
contained in the lease and the minimum guaranteed rent after In thousands of euros
indexation.
Wherever possible, all or part of the variable rent is consolidated into 8.6. Commitments relating to finance leases
the MGR at the point of lease renewal. In this way, the variable part of
the rent is usually reduced to zero at the end of the lease (every five to The Group has no finance leases on any premises at December 31, 2010.
twelve years, depending on the nature of the lease). It is also deducted
annually from the indexation rise in MGR. 8.7. Retention commitments
The variable rent clause traditionally included in most existing French
and Italian real estate leases has gradually been incorporated into other Many assets are subject to the tax regime set out in article 210-E of the
leases at the point of renewal or renegotiation. French General Tax Code, under which the buildings must be retained
for at least 5 years after acquisition. These are:
8.5.2. Offices •• all buildings and property finance leases acquired by Klémurs;
•• some equity investments in Galeries Drancéennes (owner of the Drancy
100% of Klépierre’s property assets are located in France and are there- Avenir mall) and Immo-Dauland (owner of the Chalon sur Saône mall);
fore governed by French law. •• the Créteil Soleil BHV and the Annecy Courrier mall and Monoprix store.
Commercial businesses are covered by articles L. 145-1 to L. 145-60
of the French Commercial Code and the non-codified articles of decree 8.8. Payroll expenses
53-960 of September 30, 1953 (the “statute”). Some of these clauses
are public policy. For example: the length of leasing agreements, which At December 31, 2010, total payroll expenses amounted to 104.6 mil-
may not be shorter than nine years (in terms of the lessor’s commit- lion euros.
ment), the right to renewal, the formal conditions to be complied with Fixed and variable salaries and wages plus incentives and profit sharing
in the event of cancellation, vacation, renewal, eviction, etc. totaled 83.3 million euros, pension-related expenses, retirement
Exceptionally, leases of two years or less may be exempt from the statute. expenses and other staff benefits were 18.1 million euros, taxes and
The most usual lease term is nine years, during which only the lessee similar compensation-related payments were 3.1 million euros.
may terminate the lease at the end of each three-year period by sending At December 31, 2010 Klépierre had 1,495 employees. 923 work out-
a six-month prior notice by extrajudicial act. The parties may grant side France including 406 in the Scandinavian real estate company
exemption from this 3-yearly termination clause. Steen & Strøm.
The rent is usually paid quarterly in advance and is indexed in full annu-
ally against the INSEE Cost of construction index. The rent may be
progressive or constant, and may include rent-free periods, but is
always set at the point when the lease is signed and for its full term
(excluding any riders added during the lease term).

Klépierre – 2010 Annual report | 181

 Consolidated
financial statements
at December 31, 2010

8.9. Employee benefit commitments

8.9.1. Defined contribution pension plans

In France, the Klépierre Group contributes to a number of national and

inter-profession basic and supplementary pension organizations.

8.9.2. Defined benefit pension plans

The defined benefit plans in place in France and Italy are subject to
independent actuarial appraisal, which uses the projected unit credit
method to calculate the expense relating to employee entitlements and
the outstanding benefits to be paid to pre-retirees and retirees. The
demographic and financial assumptions used when estimating the dis-
counted value of the bonds and hedge assets used with these plans
reflect the economic conditions specific to the monetary zone con-
cerned. The fraction of actuarial variances to be amortized after applica-
tion of the agreed limit of 10% (corridor method) is calculated separately
for each defined benefit plan.
The provisions recognized for defined benefit pension plans totaled
10.3 million euros at December 31, 2010.

12/31/2009 Allowances Write-back Write-back Other Changes 12/31/2010

for the period (provision used) (provision movements in the scope
unused) of consolidation
Provisions for employee benefit commitments
– Defined benefit schemes 6 035 2 860 1 545 (1) -190 10 250
– Other long term benefits 2 585 29 2 614
Total 8 620 2 889 0 0 1 545 -190 12 864
In thousands of euros
(1) Includes transfer of Scandinavian company’s employee benefit commitments.

Klépierre has set up supplementary pension plans under a corporate In Scandinavia, general and professional pension schemes both impose
agreement. Under these supplementary plans, employee beneficiaries mandatory annual contributions to pension funds. In addition to these
will, on retirement, receive additional income over and above their national schemes, Steen & Strøm has put in place a private scheme for
national state pensions (where applicable) in accordance with the type some employees Entitlement to the benefits conferred by this pension
of plan they are entitled to. scheme is dependent on thirty years of contributions. The scheme pays
Group employees also benefit from agreed or contractual personal pro- 60% of the basic final salary applying on January 1 of the year in which
tection plans in various forms, such as retirement gratuities. the scheme member reaches 67 years of age. Survivorship and inheri-
In Italy, Ségécé Italia operates a “Trattamento di Fine Rapporto” (TFR) tance arrangements are also covered by the scheme. Approximately
plan. The amount payable by the employer on termination of the 79 employees are scheme members.
employment contract (as a result of resignation, dismissal or retirement)
is calculated by applying an annual coefficient for each year worked.
The final amount is capped. Since the liability is known, it can be rec-
ognized under other debts and not as a provision for contingencies.
In Spain, a provision for retirement commitments may be recognized
where specific provision is made in the collective agreement, but this
does not affect the staff working in the Spanish subsidiaries of the
Klépierre Group.

182 | Klépierre – 2010 Annual report

The existing commitments for post-employment medical assistance 8.10. Stock options
plans are valued on the basis of assumed rises in medical costs. These
assumptions, based on historic observations, take into account the There are currently 4 stock option plans in place for Group executives
estimated future changes in the cost of medical services resulting both and employees.
from the cost of medical benefits and inflation. The first 2 are standard stock option plans, and are therefore not per-
formance linked. The 3 rd and 4th plans are performance-related for
Components of net obligation Executive Board members and partly performance-related for the
Executive Committee.
12/31/2010 In accordance with the provisions of IFRS 1, only stock options granted
Surplus of obligations over the assets of financed schemes after November 7, 2002 are recognized.
Gross discounted value of obligations fully or partially financed by assets 17 798 In accordance with IFRS 2, Klépierre appraises the market value of
Fair value of the scheme’s assets -7 290 options on their grant date and recognizes a pro rata expense during the
Discounted value of non-financed obligations 10 508 vesting period. This appraisal is made by a specialist third-party company.
Costs not yet recognized in accordance with the provisions of IAS 19 The model adopted complies with the basic assumptions of the Black
Cost of past services -16 & Scholes model, adapted to the specific characteristics of the options
Net actuarial losses or gains -242 concerned (particularly dividends in discrete amounts and the possibility
Net obligation recognized in the balance sheet for defined 10 250 of exercising options from May 31, 2010 for the plan authorized in 2006
benefit plans
and from May 16, 2011 for the plan authorized in 2007).
In thousands of euros
The calculated expense also reflects the estimated population of benefi-
ciaries at the end of each vesting period, because beneficiaries may
Change in net obligation lose their rights if they leave the Klépierre Group during this period.
12/31/2010
Net obligation at the beginning of the period 6 035
Retirement expense recognized in income of the period 4 215
Contributions paid by Klépierre recognized in income of the period –
Acquisition/Disposal –
Benefits paid to recipients of non-financed benefits unfunded –
Net obligation at the end of the period 10 250
In thousands of euros

Components of retirement expense

12/31/2010
Cost of services rendered during the year 2 452
Financial cost 712
Forecasted yield of the scheme’s assets -310
Amortization of actuarial gains and losses 25
Amortization of past services 25
Effects of reduction or liquidation of the scheme –
Currency effect -44
Total recognized in "payroll expenses" 2 860
In thousands of euros

Principal actuarial assumptions used for balance sheet date

calculations
Actuarial assumptions Group
Discount rate 3.70% - 4.40%
Forecasted yield rate of the scheme’s assets 3.90% - 4.60%
Forecasted yield rate of redemption rights n/a
Future salary increase rate 3.00% - 4.50%

Klépierre – 2010 Annual report | 183

 Consolidated
financial statements
at December 31, 2010

8.10.1. Summary data

Plan no. 1 Plan no. 2 Plan no. 3 Plan no. 4

Without With Without With
performance performance performance performance
conditions conditions conditions conditions
Date of the general meeting of shareholders 04/07/2006 04/07/2006 04/07/2006 04/07/2006 04/09/2009 04/09/2009
Date of the Executive Board 05/30/2006 05/15/2007 04/06/2009 04/06/2009 06/21/2010 06/21/2010
Start date for exercising options 05/31/2010 05/16/2011 04/06/2013 04/06/2013 06/21/2014 06/21/2014
Expiration date 05/30/2014 05/15/2015 04/05/2017 04/05/2017 06/20/2018 06/20/2018
Subscription or purchase price (1) 29.49 46.38 22.60 between 22.31 between
22.6 22.31
and 27.12 and 26.77
Stock purchase options originally granted before any adjustement 195 000 143 000 378 500 102 500 403 000 90 000
Stock purchase options originally granted (number adjusted to reflect the division of the face value 603 593 443 146 NA NA NA NA
per 3 and the discount of preferential rights granted for the capital increase of December 2008)
Stock purchase options cancelled at December 31, 2010 45 000 28 612 19 500 – 4 500 –
Stock purchase options exercised at December 31, 2010 – – 3 750 938 – –
Number of shares subscribed at December 31, 2010 (number only adjusted by the division
of the face value per 3)
Outstanding stock purchase options at December 31, 2010 (after additional adjustment to reflect 558 593 414 534 355 250 101 562 398 500 90 000
the discount of preferential rights granted for the capital increase of December 2008)
(1) After adjustment of the division per 3 of the face value in 2007 and the discount of preferential rights granted for the capital increase of December 2008.

8.10.2. Other disclosures

Plans authorized in 2006 and 2007

Plan no. 1 Plan no. 2
Exercise price (2) 29.49 euros 47.90 euros
Share price on the date of allocation 27.90 euros 47.30 euros
Volatility 21.5% 21.2%
Risk-free interest rate 4.1% 4.5%
Dividend per share 1.00 euro Growth of 10% in 2007, followed by assumed
growth calculated as a straight-line regression
of the dividends for previous years.
Estimated unit value 4.60 euros 10.40 euros
Expense for the period 251 thousand euros 1,022 thousand euros
(2) Restated for the threefold nominal reduction to the stock in 2007, but before correction of the discount granted as part of the preferential subscription rights capital increase in December 2008.

Plan authorized in 2009

Plan no. 3
Without performance conditions With performance conditions
Exercise price 22.60 euros
Share price on the date of allocation 15.3 euros – EPRA Eurozone index: 1,141.59
Volatility Klépierre share: 30.7%; EPRA Eurozone index: 19.4%; correlation: 0.87
Risk-free interest rate (eight years maturity) 3.19%
Dividend per share 1.25 euros in 2009 then 1.06 euros thereafter
2009: 0.97 euro
2010: 1.12 euro
Estimated unit value 1.20 euro
2011: 1.13 euro
2012: 1.12 euro
Expense for the period 132 thousand euros

184 | Klépierre – 2010 Annual report

Options granted break down into 2 fractions: •• a 2009 secondary fraction: performance measured between the 2008
•• a “principal” fraction, without performance conditions; and 2009 fiscal years;
•• a “secondary” fraction: the exercise price of this fraction varies depend- •• a 2010 secondary fraction: performance measured between the 2009
ing on the performance of Klépierre shares compared to the FTSE EPRA and 2010 fiscal years;
Eurozone (EPEU) index. If the Klépierre share underperforms the index •• a 2011 secondary fraction: performance measured between the 2010
by more than 20%, the options become null and void. and 2011 fiscal years;
This secondary fraction is split into 4 equal groups, each relating to a •• a 2012 secondary fraction: performance measured between the 2011
different performance measure and each determining a part of the allo- and 2012 fiscal years;
cation independently of the others. These are:

Plan authorized in 2010

Plan no. 4
Without performance conditions With performance conditions
Exercise price 22.31 euros
Share price on the date of allocation 23.43 euros – EPRA Eurozone index: 1,202.90
Volatility Klépierre share: 33.3%; EPRA 22.2%; correlation: 0.75
Risk-free interest rate (eight years maturity) 2.83%
Dividend per share 1.25 euro
2009: 5.39 euros
2010: 4.78 euros
Estimated unit value 5.53 euros
2011: 5.03 euros
2012: 5.03 euros
Expense for the period 340 thousand euros

Shares granted under the 2010 plan break down into 2 fractions:
•• a “principal” fraction, without performance conditions;
•• a “secondary” fraction: the exercise price of this fraction varies depend-
ing on the performance of Klépierre shares compared to the FTSE EPRA
Eurozone (EPEU) index. If the Klépierre share underperforms the index
by more than 20%, the options become null and void.
This secondary fraction is split into 4 equal groups, each relating to a
different performance measure and each determining a part of the allo-
cation independently of the others. These are:
•• a 2010 secondary fraction: performance measured between the 2009
and 2010 fiscal years;
•• a 2011 secondary fraction: performance measured between the 2010
and 2011 fiscal years;
•• a 2012 secondary fraction: performance measured between the 2011
and 2012 fiscal years;
•• a 2013 secondary fraction: performance measured between the 2012
and 2013 fiscal years;

Klépierre – 2010 Annual report | 185

 Consolidated
financial statements
at December 31, 2010

9. Additional information
9.1. Disclosures about the fair value model
Comprehensive income statement at fair value (EPRA model) Notes 12/31/2010 12/31/2009
Fair value model Fair value model
Lease income 930 170 895 470
Land expenses (real estate) 0 3
Non-recovered rental expenses -38 338 -36 997
Building expenses (owner) -60 884 -58 545
Net rents 830 948 799 931
Management, administrative and related income 76 486 80 783
Other operating revenue 22 042 27 097
Change in the fair value of investment property 223 976 -1 208 631
Survey and research costs -3 995 -3 281
Payroll expenses -104 630 -103 735
Other general expenses -35 408 -34 511
Depreciation and provisions on investment property 0 -206
Depreciation and provisions on PPE -8 471 -5 043
Provisions -861 -4 295
Gains on the disposal of investment property and equity investments 327 357 364 612
Net book value of investment property and equity investments sold -290 601 -396 674
Income from the disposal of investment property and equity investments 36 756 -32 062
Profit on the disposal of short term assets -1 859 -334
Goodwill impairment -1 100 0
Operating income 1 033 884 -484 287
Net dividends and provisions on non-consolidated investments -94 -22
Net cost of debt -295 418 -291 905
Change in the fair value of financial instruments -958 0
Effect of discounting -575 -869
Share in net income of associates 5 649 -2 314
Profit before tax 742 488 -779 397
Corporate income tax -67 798 142 716
Net income of consolidated entity 674 690 -636 681
Of which
Group share 480 483 -546 207
Non-controlling interests 194 208 -90 474
Net earnings per share (euros) 2.6 -3.1
Diluted earnings per share (euros) 2.6 -3.1
In thousands of euros

Notes 12/31/2010 12/31/2009

Net income of consolidated entity 674 690 -636 681
Other comprehensive income items recognized directly as equity 40 334 -141 217
– Income from disposal of treasury shares -132 -1 103
– Effective portion of profits and losses on cash flow hedging instruments (IAS 39) -23 307 -56 043
– Translation profits and losses 61 058 -94 285
– Tax on other comprehensive income items 2 715 10 214
Share of other comprehensive income items for associates 0 0
Total comprehensive income 715 024 -777 898
Of which
Group share 514 894 -704 606
Non-controlling interests 200 131 -73 292
Comprehensive earnings per share (euros) 10.2 2.8 -3.9
Diluted comprehensive earnings per share (euros) 10.2 2.8 -3.9
In thousands of euros

186 | Klépierre – 2010 Annual report

 Balance sheet: fair value (EPRA model) 12/31/2010 12/31/2009
Fair value model Fair value model
Non-allocated goodwill 115 531 116 501
Intangible assets 24 146 19 306
Property, plant and equipment 27 693 23 783
Investment property 0 0
Fair value of investment property 14 740 385 14 038 007
Fixed assets in progress 96 714 100 677
Investments in associates 25 657 32 710
Financial assets 2 515 491
Non-current assets 37 580 25 847
Interest rate swaps 28 207 35 394
Deferred tax assets 70 554 60 341
NON-CURRENT ASSETS 15 168 982 14 453 057
Fair value of property held for sale 0
Inventory 454 2 674
Trade accounts and notes receivable 100 108 92 477
Other receivables 259 437 262 026
– Tax receivables 36 731 38 044
– Other debtors 222 706 223 982
Interest rate swaps 20 024 0
Cash and cash equivalents 300 557 235 951
CURRENT ASSETS 680 580 593 128
TOTAL ASSETS 15 849 562 15 046 185
Capital 265 507 254 761
Additional paid-in capital 1 569 970 1 391 523
Legal reserve 25 476 23 270
Consolidated reserves 2 501 757 3 232 893
– Treasury shares -70 133 -81 345
– Fair value of financial instruments -220 980 -198 000
– Fair value of investment property 2 104 121 2 814 257
– Other consolidated reserves 688 749 697 981
Consolidated earnings 480 483 -546 207
Shareholders’ equity, group share 4 843 193 4 356 240
Non-controlling interests 1 752 448 1 613 023
SHAREHOLDERS’ EQUITY 6 595 641 5 969 263
Non-current financial liabilities 5 952 508 6 670 504
Long-term provisions 10 523 9 536
Pension commitments 12 864 8 620
Non-current interest rate swaps 279 060 255 055
Security deposits and guarantees 142 186 138 050
Deferred tax liabilities 580 379 538 929
NON-CURRENT LIABILITIES 6 977 520 7 620 694
Current financial liabilities 1 618 400 843 089
Bank overdrafts 120 685 81 100
Trade payables 122 722 101 808
Payables to fixed asset suppliers 50 943 82 143
Other liabilities 270 077 253 930
Current interest rate swaps 0 0
Social and tax liabilities 93 574 94 158
Short-term provisions 0 0
CURRENT LIABILITIES 2 276 401 1 456 228
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 15 849 562 15 046 185
In thousands of euros

Klépierre – 2010 Annual report | 187

 Consolidated
financial statements
at December 31, 2010

Comprehensive income statement (EPRA model) 12/31/2010 Fair value 12/31/2010

restatements Fair value model
Lease income 930 170 930 170
Land expenses (real estate) -2 700 2 700 0
Non-recovered rental expenses -38 338 -38 338
Building expenses (owner) -61 359 475 -60 884
Net rents 827 773 3 175 830 948
Management, administrative and related income 76 486 76 486
Other operating revenue 22 042 22 042
Change in the fair value of investment property 223 976 223 976
Survey and research costs -3 995 -3 995
Payroll expenses -104 630 -104 630
Other general expenses -35 408 -35 408
Depreciation and provisions on investment property -407 848 407 848 0
Depreciation and provisions on PPE -8 471 -8 471
Provisions -861 -861
Gains on the disposal of investment property and equity investments 327 357 327 357
Net book value of investment property and equity investments sold -200 046 -90 555 -290 601
Income from the disposal of investment property and equity investments 127 311 -90 555 36 756
Profit on the disposal of short term assets -1 859 -1 859
Goodwill impairment -1 100 -1 100
Operating income 489 440 544 444 1 033 884
Net dividends and provisions on non-consolidated investments -94 -94
Net cost of debt -295 418 -295 418
Change in the fair value of financial instruments -958 -958
Effect of discounting -575 -575
Share in net income of associates 1 736 3 913 5 649
Profit before tax 194 131 548 357 742 488
Corporate income tax -11 690 -56 108 -67 798
Net income of consolidated entity 182 441 492 249 674 690
Of which
Group share 124 574 355 909 480 483
Non-controlling interests 57 867 136 340 194 208
In thousands of euros

12/31/2010 Fair value 12/31/2010

restatements Fair value model
Net income of consolidated entity 182 441 492 249 674 690
Other comprehensive income items recognized directly as equity 40 785 -451 40 334
– Income from sales of treasury shares -132 -132
– Effective portion of profits and losses on cash flow hedging instruments (IAS 39) -23 307 -23 307
– Translation profits and losses 61 509 -451 61 058
– Tax on other comprehensive income items 2 715 2 715
Share of other comprehensive income items of equity method investees – –
Total comprehensive income 223 226 491 798 715 024
Of which
Group share 157 022 357 872 514 894
Non-controlling interests 66 204 133 926 200 131
Comprehensive earnings per share in euros 0,8 2,8
In thousands of euros

188 | Klépierre – 2010 Annual report

 BALANCE SHEET (EPRA model) 12/31/2010 Fair value 12/31/2010
restatements Fair value model
Non-allocated goodwill 132 264 -16 733 115 531
Intangible assets 24 146 24 146
Property, plant and equipment 27 693 27 693
Investment property 10 879 023 -10 879 023 0
Fair value of investment property 0 14 740 385 14 740 385
Fixed assets in progress 795 600 -698 886 96 714
Investments in associates 21 101 4 556 25 657
Financial assets 2 515 2 515
Non-current assets 37 580 37 580
Interest rate swaps 28 207 28 207
Deferred tax assets 84 566 -14 012 70 554
NON-CURRENT ASSETS 12 032 695 3 136 287 15 168 982
Fair value of property held for sale 0 0
Inventory 454 454
Trade accounts and notes receivable 100 108 100 108
Other receivables 319 890 -60 453 259 437
– Tax receivables 36 731 36 731
– Other debtors 283 159 -60 453 222 706
Interest rate swaps 20 024 20 024
Cash and cash equivalents 300 557 300 557
CURRENT ASSETS 741 033 -60 453 680 580
TOTAL ASSETS 12 773 728 3 075 834 15 849 562
Capital 265 507 265 507
Additional paid-in capital 1 569 970 1 569 970
Legal reserve 25 476 25 476
Consolidated reserves 412 279 2 089 478 2 501 757
– Treasury shares -70 133 -70 133
– Fair value of financial instruments -220 980 -220 980
– Fair value of investment property 0 2 104 121 2 104 121
– Other consolidated reserves 703 392 -14 643 688 749
Consolidated earnings 124 574 355 909 480 483
Shareholders’ equity, group share 2 397 806 2 445 387 4 843 193
Non-controlling interests 1 267 666 484 782 1 752 448
SHAREHOLDERS’ EQUITY 3 665 472 2 930 169 6 595 641
Non-current financial liabilities 5 952 508 5 952 508
Long-term provisions 10 523 10 523
Pension commitments 12 864 12 864
Non-current interest rate swaps 279 060 279 060
Security deposits and guarantees 142 186 142 186
Deferred tax liabilities 434 714 145 665 580 379
NON-CURRENT LIABILITIES 6 831 855 145 665 6 977 520
Current financial liabilities 1 618 400 1 618 400
Bank overdrafts 120 685 120 685
Trade payables 122 722 122 722
Payables to fixed asset suppliers 50 943 50 943
Other liabilities 270 077 270 077
Current interest rate swaps 0 0
Social and tax liabilities 93 574 93 574
Short-term provisions 0 0
CURRENT LIABILITIES 2 276 401 2 276 401
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 12 773 728 3 075 834 15 849 562
In thousands of euros

Klépierre – 2010 Annual report | 189

 Consolidated
financial statements
at December 31, 2010

Fair value is the amount at which an asset may be traded between fully- Appraisal Consultancy
fees fees
informed, consenting parties acting under the conditions of normal
RCGE 1 207
competition.
JLL 530 167
The fair value is the most likely price (excluding transaction fees and
BNP Paribas Real Estate Valuation 298
expenses) that could be reasonably obtained in the market on the bal-
DTZ 129
ance sheet date.
NEWSEC 63
The fair value of Klépierre buildings is determined by third-party apprais-
TOTAL 2 227 167
ers who appraise the Group’s portfolio on June 30 and December 31
In thousands of euros
of each year, exclusive of transfer duties and fees.
However, given the fact that these appraisals are, by their nature, esti-
mates, it is possible that the amount realized on the disposal of some The market value is the value as appraised by the independent appraisers
real estate assets will differ from the appraised value of those assets, responsible for valuing the Group’s holdings on June 30 and December 31
even where such disposal occurs within a few months of the balance of each year, but excludes transfer duties and fees (fees are measured on
sheet date. the basis of a direct sale of the building, even though these costs can, in
Klépierre has entrusted the task of appraising the value of its holdings to some cases, be reduced by selling the company that owns the asset).
a number of appraisers. Offices are appraised by Auguste-Thouard.
9.1.1. Offices
Shopping centers are appraised by the following firms:
•• Retail Consulting Group Expertise (RCGE) appraises all French assets Auguste-Thouard adopts two approaches: the first involves a direct
(with the exception of the Progest, SCOO, Le Havre Coty, Klécar Nord- comparison with similar transactions completed in the market during
Est and Montpellier Odysseum portfolios), approximately 50% of the period, whilst the second involves capitalizing recognized or esti-
Spanish assets (the centers held by Klécar Foncier España and Klécar mated revenue. Analysis of this revenue identifies the existence of 1 of
Foncier Vinaza), 4 Hungarian assets and all the Italian, Czech, Slovakian, 3 scenarios, depending on whether the lease income is broadly in line
Portuguese and Greek portfolios; with, higher than or lower than the market value.
•• Jones Lang LaSalle (JLL) appraises the Progest, SCOO, Le Havre Coty Where lease income and market value are broadly in line, the lease
and Montpellier Odysseum portfolios in France, all Polish and Belgian income used for the purpose of the appraisal is the actual lease income
assets, 8 Hungarian assets and the Spanish assets managed by Klécar earned from the property. Where the lease income is higher than the
Foncier Iberica; market value, the appraisal uses the market value and takes account
•• BNP Paribas Real Estate Valuation appraises 21 assets owned by Klécar of the capital gain arising from the difference between the actual lease
Nord-Est; income and the market value.
•• DTZ appraises Denmark, 50% of Norwegian assets and 50% of Swedish Where lease income is lower than the market value, the appraisers take
assets; account of the time remaining before the lease will be reviewed and the
•• NEWSEC appraises 50% of Norwegian assets and 50% of Swedish rental amount will be aligned with the market rate. In accordance with
assets. the French decree of September 30, 1953, the rental amounts payable
on properties used solely as office premises are automatically aligned
Retail units are appraised by the following firms: with market rates when their leases come up for renewal.
•• Retail Consulting Group Expertise (RCGE) appraises Feu-Vert assets, The appraisers therefore worked on the assumption that the owners of
Buffalo Grill restaurants and the Chalon Sud 2 retail park; such property would be able to align rents with market rates when the
•• BNP Paribas Real Estate Valuation appraises the Défi Mode, Sephora, leases concerned come up for renewal, and have reflected the current
King Jouet, Cap Nord, Akene and Da Costa portfolios. occupancy circumstances in the form of a capital loss calculated as
described above. The appraisers did not limit their approach to proper-
All appraisals are conducted in accordance with the principles of the ties coming up for renewal in the forthcoming three years, on the
Charte de l’Expertise en Evaluation Immobilière, the “Barthes de Ruyter” grounds that the investors involved in current market transactions plan
COB/CNC work group recommendations and RCIS standards. The fees further ahead than three years. In the second scenario, the recognized
paid to appraisers are agreed prior to their appraisal of the properties financial gain has been added to the calculated value. This equates to
concerned, and are fixed on a lump sum basis to reflect the number the (5.5%) discounted value of the difference between the actual lease
and complexity of the assets appraised. The fee is entirely unrelated to income and the market price until the first firm period of the lease
the appraised value of the assets concerned. expires. In the third scenario, the capital loss has been deducted from
the calculated value. This equates to the (5.5%) discounted value of the
difference between the actual lease income and the market price until
the lease expires.
Since December 31, 2005, appraisers have based their work on the
rate of return (yield) rather than the capitalization rate. In other words,
the rate used was that applied to the income calculated as described
above in order to arrive at an appraised value inclusive of transfer duties.

190 | Klépierre – 2010 Annual report

Previously, the rate used resulted in a valuation exclusive of transfer The IASB has changed the scope of 2 standards concerning properties
duties. The decision to use this rate is the result of observing the market under construction. Consequently, on June 30, 2010 and again on
from the point of view of transactions actually completed by investors. December 31, 2010, Klepierre conducted internal valuations of those build-
In arriving at the appraised value exclusive of transfer duties, the transfer ings under construction and covered by irrevocable development
duties and fees were deducted at the rate applied in each country. permission.

9.1.2. Shopping centers 9.2. Earnings per share

In determining the fair market value of a shopping center, appraisers apply Earnings per share is calculated by dividing net income for the period
a yield rate to net annual lease income for occupied premises, and to the attributable to ordinary shareholders by the weighted average number
net market rental price for vacant properties, discounted over the antici- of current shares in circulation, excluding treasury shares.
pated period of vacancy. The capitalized value of real estate or rebates on Diluted earnings per share is calculated by dividing net income for the
minimum guaranteed rent payments, expenses payable on currently vacant period attributable to ordinary shareholders by the weighted average
premises and non-chargeable work is deducted for the fair market value number of current shares in circulation, excluding treasury shares, and
calculated above. A standard vacancy rate is then defined for each asset. adjusted to reflect the effects of the diluting options adopted.
The discount rate applied is the same as the yield rate used in the fair In accordance with IAS 33, the average number of shares at
market value calculation. December 31, 2010 was adjusted after payment of the dividend in the
form of shares in May 2010.
Gross lease income comprises the minimum guaranteed rent, the variable
part of the rent and the market rental price for vacant properties. The net 12/31/2010 12/31/2009
total lease income is calculated by deducting the following expenses from Numerator
the gross lease income: management charges, non-rebillable charges, Net income/loss, group share a 124 574 162 102
expenses relating to provisions for vacant premises and the average loss Comprehensive net income, group share a’ 157 022 32 893
on bad debts over the previous 5 years. Denominator
The yield rate is set by the appraiser based on a range of parameters, the Average weighted number of shares before b 186 738 812 178 463 277
dilutive effect (1)
most important of which are: retail sales area, layout, competition, type and
Effect of dilutive options 0 0
percentage of ownership, lease income and extension potential and com-
Stock options 0 0
parability with recent transactions in the market.
Total potential dilutive effect c 0 0
As a result of the way in which its portfolio is structured and for reasons of
Average weighted number of shares after d = 186 738 812 178 463 277
economy and efficiency, Klepierre uses 2 methods to appraise those assets dilutive effect b+c
posing specific appraisal problems. Undiluted earnings per share, a/b 0,7 0,9
Assets appraised for the first time and those where the most recent group share (in euros)
appraisal is no greater than 110% of net book value (excluding deferred Diluted earnings per share, a/d 0,7 0,9
taxes) are appraised in 2 ways: the first is a yield-based appraisal, as group share (in euros)
explained above, whilst the second is an appraisal based on the discounted Undiluted comprehensive earnings a’/b 0,8 0,2
per share, Group share (in euros)
future flows method.
Diluted comprehensive earnings a’/d 0,8 0,2
This second method calculates the value of a property asset as the sum per share, Group share (in euros)
of discounted financial flows based on a discount rate defined by the In thousands of euros
appraiser. (1) Average number of shares excluding treasury shares.

The appraiser estimates anticipated total revenues and expenses on the 9.3. Related companies
asset side, and then measures an “ultimate value” at the end of an average
ten-year analytical period. By comparing the market rental values with face 9.3.1. Equity relationship with the BNP Paribas group
rental values, the appraiser takes account of the rental potential of the
property asset by retaining the market rental value at the end of the lease, The BNP Paribas group holds a 50.91% equity stake in Klepierre SA.
after deduction of the expenses incurred in remarketing the property. Lastly, Excluding this holding, the Klepierre group is unaware of any share-
the appraiser discounts the forecast cash flow to determine the actual value holder agreement or group of individuals capable of exercising control
of the property asset. over the Klepierre group.
The discount rate adopted reflects the market risk-free rate (ten-year OAT At December 31, 2010, the BNP Paribas share of bank finance totaled
bond) plus a property market risk and liquidity premium and an asset- 2,889 million euros, of which 1,552 million euros had been used. This
specific premium reflecting the location, specification and tenancy of each figure does not include two backup lines of commercial paper (not
building. drawn down) totaling 500 millions euro agreed by BNP Paribas. This
Investment properties under construction were previously subject to the amount compares with authorized total funding of 8,849 million euros,
provisions of IAS 16, even where they were intended to become investment of which 7,476 million euros have been used.
properties measured at fair value, whereas buildings undergoing renovation
remained subject to IAS 40.

Klépierre – 2010 Annual report | 191

 Consolidated
financial statements
at December 31, 2010

9.3.2. Relationships between Klepierre group The end-of-period balance sheet positions and transactions conducted
consolidated companies during the period between fully consolidated companies are fully elimi-
nated. The following tables show the positions and reciprocal transac-
A full list of Klepierre group companies is given in Note 3. “Scope of tions conducted by proportionally consolidated companies (jointly
consolidation”. controlled by the Group) and those consolidated using the equity
Transactions between related parties were governed by the same terms method (over which the Group has significant influence) that have not
as those applying to transactions subject to normal conditions of been eliminated.
competition.

Balance sheet positions with related parties at period end:

12/31/2010 12/31/2009
Proportionally consolidated Companies consolidated Proportionally consolidated Companies consolidated
companies using the equity method companies using the equity method
Non-current assets 803 48 365 45
NON-CURRENT ASSETS 803 48 365 45
Trade accounts and notes receivable 1 040 17 1 016 100
Other receivables 704 0 704 –
CURRENT ASSETS 1 744 17 1 720 100
TOTAL ASSETS 2 547 65 2 085 145
Non-current financial liabilities 7 2 084 7 2 329
NON-CURRENT LIABILITIES 7 2 084 7 2 329
Trade payables 16 – 7 -
Other liabilities 561 – 346 84
CURRENT LIABILITIES 577 0 353 84
TOTAL LIABILITIES 584 2 084 360 2 413
In thousands of euros

Income items related to transactions with related parties:

12/31/2010 12/31/2009
Proportionally consolidated Companies consolidated Proportionally Companies consolidated
companies using the equity method consolidated companies using the equity method
Management, administrative and related income 4 382 277 5 288 422
Operating income 4 382 277 5 288 422
Net cost of debt 5 892 – 5 498 –
Profit before tax 10 274 277 10 786 422
Net income of consolidated entity 10 274 277 10 786 422
In thousands of euros

The majority of these transactions relate to management and adminis-

tration fees and income from company business funding transactions.

192 | Klépierre – 2010 Annual report

Off-balance sheet items related to transactions with related 9.3.4. Compensation paid to the principal executives
parties: of the Klépierre Group
12/31/2010 12/31/2009
Klepierre SA, the parent company of the Klepierre group, is a French
Commitments given
corporation (Société anonyme) whose governance structure comprises
Security deposits on loans to employees 7 681 9 664
an Executive Board and a Supervisory Board.
Guarantees, deposits and mortgages 21 705 24 042
The amount of directors’ fees paid to the members of the Supervisory
Purchase commitments 121 270
Board totaled 313 654 euros. The annual allowance paid to the
Total 29 507 33 976
Chairman of the Supervisory Board for 2010 totaled 212 432 euros.
Commitments received
Compensation paid to the Executive Committee breaks down as follows:
Deposits received as guarantees in real-estate 260 030 300 030
management and transactions
Unused confirmed lines of credit 1 315 000 378 000 12/31/2010
Total 1 575 030 678 030 Short-term benefits excluding employer’s contribution 2 088 424
Secured debts 117 100 117 400 Short-term benefits: employer’s contribution 860 145
Total 117 100 117 400 Post-employment benefits 71 125
In thousands of euros Other long term benefits 0
Termination benefits 85 700
9.3.3. Post-employment benefit plans Share-based payment (1) 578 807
In euros
The main post-employment benefits are severance pay and defined (1) Expense posted in the profit and loss account under stock-option plans.

benefit or defined contribution pension plans.

Post-employment benefit plans are administered by insurance compa- 9.4. Post-balance sheet date events
nies and other independent management companies external to the
Klepierre group. On January 20, 2011, Klépierre increased by 50 million euros the private
bond placement maturing April 2020, issued in April 2010, taking its
total amount to 250 million euros.
On January 20, 2011, Klefin Italia acquired shares in 2 Italian compa-
nies, ICS and GE.CO, the owners of a retail park in Savignano, Italy.
This asset was valued at 69.2 million euros.

9.5. Statutory auditors’ fees

Deloitte Mazars
Amount excl. VAT % Amount excl. VAT %
2010 2009 2010 2009 2010 2009 2010 2009
Audit 1 371 1 162 100% 100% 801 775 100% 100%
Auditing, certification and review of individual and consolidated financial statements
– Issuer 235 235 17% 20% 142 150 18% 19%
– Fully-consolidated subsidiaries 805 850 59% 73% 629 607 79% 78%
Other diligences and services directly related to the statutory auditors engagement
– Issuer 20 10 1% 1% 12 9 1% 1%
– Fully-consolidated subsidiaries 311 67 23% 6% 18 9 2% 1%
Other services provided by statutory auditors to fully-integrated subsidiaries
– Legal, tax, employment-related and other services – – – – – – – –
TOTAL 1 371 1 162 100% 100% 801 775 100% 100%
In thousands of euros

9.6. Identity of the consolidating company

At December 31, 2010, Klépierre was fully consolidated by the

BNP Paribas group. BNP Paribas holds a 50.91% equity stake in
Klépierre (including treasury shares).

Klépierre – 2010 Annual report | 193

 Consolidated
financial statements
at December 31, 2010

6. Statutory auditors’ report on the consolidated financial statements

Year ended December 31, 2010
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speaking
users. The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information
is presented below the opinion on the consolidated financial statements and includes an explanatory paragraph discussing the auditors’ assessments
of certain significant accounting and auditing matters. These assessments were made for the purpose of issuing an audit opinion on the consolidated
financial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the con-
solidated financial statements. This report also includes information to the specific verification of information given in the management report. This report
should be read in conjunction with, and is construed in accordance with, French law and professional auditing standards applicable in France.

To the Shareholders, real estate assets are appraised by independent experts to estimate
impairments, if any, and the fair values of buildings. Our procedures
In compliance with the assignment entrusted to us by your annual general consisted notably in examining the valuation methodology used by the
meeting, we hereby report to you, for the year ended December 31, 2010 on: experts and to ensure ourselves that the impairments as well as the fair
•• the audit of the accompanying consolidated financial statements of values were made based on external expert appraisals;
Klépierre; •• note 2.12. to the consolidated financial statements indicate that your
•• the justification of our assessments; Group used estimated methods regarding to the follow-up of the value
•• the specific verifications required by law. of acquisition cost’s discrepancy. Our procedures consisted in evaluating
the appropriateness of the data and the hypothesis based on these
These consolidated financial statements have been approved by Board estimations, in reviewing the calculation method of your Group, in exam-
of Directors. Our role is to express an opinion on these consolidated ining the approval procedures of these estimates by the board and then,
financial statements, based on our audit. in verifying that notes to the consolidated financial statements provide
applicable information about the hypothesis used;
I. Opinion on the consolidated financial statements •• notes 2.21. and 4.16. to the consolidated financial statements set forth
the accounting rules and methods to determine the fair value of deriva-
We conducted our audit in accordance with professional standards tive instruments as well as the characteristics of the Group’s hedging
applicable in France. Those standards require that we plan and perform instruments. We examined the classification criteria and the documenta-
the audit to obtain reasonable assurance about whether the consoli- tion required specifically by IAS 39 and verified the appropriateness of
dated financial statements are free of material misstatement. An audit these accounting methods and the disclosures provided in the notes to
involves performing procedures, using sampling techniques or other the consolidated financial statements.
methods of selection, to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. An audit also These assessments were made as part of our audit of the consolidated
includes evaluating the appropriateness of accounting principles used financial statements taken as a whole, and therefore contributed to the
and reasonableness of accounting estimates made, as well as the over- opinion we formed which is expressed in the first part of this report.
all presentation of the consolidated financial statements. We believe that
the audit evidence we have obtained is sufficient and appropriate to III. Specific verification
provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair As required by law, we have also verified in accordance with professional
view of the assets and liabilities and of the financial position of the Group standards applicable in France the information presented in the Group’s
as at December 31, 2010 and of the results of its operations for the management report.
year then ended in accordance with International Financial Reporting We have no matters to report as to its fair presentation and its consis-
Standards as adopted by the European Union. tency with the consolidated financial statements.

Without qualifying our opinion, we draw your attention to the matter set Signed in Courbevoie and Neuilly-sur-Seine, February 21, 2011
out in Note 2 to the consolidated financial statements regarding the
changes in accounting rules and methods. The statutory auditors

II. Justification of our assessments French original signed by

In accordance with the requirements of article L. 823-9 of the French Mazars Deloitte & Associés
Commercial Code (Code du commerce) relating to the justification of Guillaume Potel Pascal Colin
our assessments, we bring to your attention the following matters: Julien Marin-Pache Laure Silvestre-Siaz
•• notes 2.5. and 9.1. to the consolidated financial statements specify that

194 | Klépierre – 2010 Annual report

Corporate
financial statements
at December 31, 2010
196 1. Income statement
98 2.
1 Balance sheet
200 3. Notes to the financial statements
218 4. Statutory auditors’ report on the corporate financial statements

Klépierre – 2010 Annual report | 195

 Corporate financial statements
at December 31, 2010
1. Income statement
12/31/2010 12/31/2009
OPERATING REVENUE
Lease income 33 083 44 665
– Rents 30 884 42 515
– Repayment of expenses 2 199 2 150
Write-back of provisions (and depreciation and amortization) & expense transfers 1 028 24
Other income 3 149 1 569
TOTAL I 37 260 46 258
OPERATING EXPENSES
Purchases and external expenses -14 975 -12 322
Taxes and similar levies -3 060 -2 520
Social security deductions -288 -58
Allowances for depreciation and provisions:
– On fixed assets and deferred expenses: depreciation and amortization allowances -9 610 -11 212
– On fixed assets: provisions – –
– On current assets: provisions – –
– For contingencies and losses: provisions -1 501 -433
Other expenses -483 -636
TOTAL II -29 916 -27 182
OPERATING INCOME (I + II) 7 344 19 077
SHARE OF NET INCOME FROM JOINT OPERATIONS
Profits applied or losses transferred (III) 197 156 187 627
Losses borne or profits transferred (IV) -4 535 -5 406
FINANCIAL REVENUE (note 5.3.1.)
From investments 189 315 411 435
From other marketable securities and receivables from capitalized assets – –
Other interest and similar income 158 2 563
Write-back of provisions and transfer of expenses 12 066 40 691
Net proceeds from disposals of marketable securities 77 32
TOTAL V 201 616 454 721
FINANCIAL EXPENSES (note 5.3.2.)
Allowances for depreciation and provisions -137 023 -76 511
Interest and similar charges -215 122 -218 904
Negative exchange rate variances – 59
Net expenses incurred on disposals of marketable securities – –
TOTAL VI -352 145 -295 356
NET FINANCIAL INCOME (III + IV) -150 529 159 365
PRE-TAX INCOME (I + II + III + IV) 49 436 360 663

196 | Klépierre – 2010 Annual report

 12/31/2010 12/31/2009
NON-RECURRING REVENUE
On management transactions – 27
On capital transactions 185 278 459 682
Write-back of provisions and transfer of expenses – –
TOTAL VII 185 278 459 709
NON-RECURRING EXPENSES
On management transactions -0 -27
On capital transactions -113 347 -422 457
Allowances for depreciation and provisions – –
TOTAL VIII -113 347 -422 485
NON-RECURRING INCOME (V + VI) (note 5.4.) 71 931 37 225
EMPLOYEE PROFIT SHARING (IX) – –
CORPORATE INCOME TAXES (X) (note 5.5.) -229 -1 774
TOTAL REVENUE (I + III + V + VII) 621 310 1 148 316
TOTAL EXPENSES (II + IV + VI + VIII + IX + X) -500 172 -752 202
NET INCOME 121 138 396 114
In thousands of euros

Klépierre – 2010 Annual report | 197

 Corporate
financial statements
at December 31, 2010

2. Balance sheet
Assets at December, 31
12/31/2010 12/31/2009
Gross Depreciation, Net Net
amortization
and provisions
FIXED ASSETS
INTANGIBLE ASSETS (note 3.1.) 5 858 614 5 244 5 367
Set-up costs 614 614 – 123
Research and development costs – – – –
Concessions, patents and similar rights 19 – 19 19
Goodwill 5 225 – 5 225 5 225
PROPERTY, PLANT AND EQUIPMENT (note 3.1.) 393 331 51 801 341 530 457 214
Land 181 030 – 181 030 253 657
Buildings and fixtures 210 420 51 415 159 005 203 513
– Structures 127 477 20 660 106 818 137 819
– Facades, cladding and roofing 27 283 5 998 21 285 26 804
– General and Technical Installations 30 017 9 518 20 499 24 445
– Fittings 25 643 15 240 10 403 14 446
Technical installations, plant and equipment 377 375 2 3
Other 26 11 15 15
Property, plant and equipment in progress 1 477 – 1 477 25
Advances and pre-payments – – – –
LONG-TERM FINANCIAL INVESTMENTS 7 231 310 187 856 7 043 454 7 148 158
Investments (note 3.2.1.) 4 366 603 175 333 4 191 269 4 180 573
Loans to subsidiaries and related companies (note 3.2.2.) 2 733 736 12 344 2 721 392 2 767 098
Other long-term investments 179 179 – 27
Loans 130 719 – 130 719 171 365
Other (note 3.2.1.) 74 – 74 29 095
TOTAL I 7 630 500 240 271 7 390 228 7 610 739

CURRENT ASSETS
ADVANCES AND PRE-PAYMENTS TO SUPPLIERS 1 589 – 1 589 229
RECEIVABLES 8 509 – 8 509 6 385
Trade accounts and notes receivable 2 705 – 2 705 1 380
Other (note 3.2.2.) 5 804 – 5 804 5 005
MARKETABLE SECURITIES 74 425 – 74 425 48 218
Treasury shares 70 130 – 70 130 48 218
Other securities 4 295 – 4 295 –
CASH & CASH EQUIVALENTS 43 149 – 43 149 21 776
PREPAID EXPENSES (note 3.5.) 25 020 – 25 020 25 988
TOTAL II 152 691 – 152 691 102 594
Deferred expenses (III) (note 3.5.) 10 073 – 10 073 11 160
Loan issue premiums (IV) (note 3.5.) 8 114 – 8 114 5 189
Translation adjustment – assets (V) (note 3.5.) – – – –
GRAND TOTAL (I + II + III + IV + V) 7 801 377 240 271 7 561 106 7 729 683
In thousands of euros

198 | Klépierre – 2010 Annual report

Liabilities at December, 31
12/31/2010 12/31/2009
SHAREHOLDERS’ EQUITY (note 4.1.)
Capital (of which paid-in) 265 508 254 761
Additional paid-in capital (from share issues, mergers and contributions) 1 401 916 1 223 469
Positive merger variance 187 452 187 452
Positive cancelled share variance 18 557 18 307
Revaluation variances
Legal reserve 25 476 23 270
Other reserves 168 055 168 055
Balance carried forward 569 469 399 525
NET INCOME 121 138 396 114
Investment subsidies – –
Regulated provisions – –
TOTAL I 2 757 569 2 670 952
PROVISIONS FOR CONTINGENCIES AND LOSSES (note 4.2.) 7 003 721
Provision for contingencies 6 969 687
Provision for losses 34 34
TOTAL II 7 003 721

DEBTS
BORROWINGS (note 4.3.) 4 770 625 5 027 342
Other bonds 2 252 189 1 325 218
Loans and borrowings from credit institutions 1 822 003 2 902 563
Other loans and borrowings 696 433 799 561
TRADE ACCOUNTS AND NOTES RECEIVABLE 580 593
TRADE PAYABLES 21 215 21 586
Trade and other payables 7 482 8 702
Social and tax liabilities (note 4.5.) 13 733 12 883
OTHER PAYABLES 2 717 5 981
Payables to fixed asset suppliers 1 137 1 299
Other (note 4.6.) 1 580 4 682
PREPAID INCOME (note 4.7.) 1 397 2 509
TOTAL III 4 796 534 5 058 010
Translation adjustment – liabilities (IV) – –

GRAND TOTAL (I + II + III + IV) 7 561 106 7 729 683

In thousands of euros

Klépierre – 2010 Annual report | 199

 Corporate
financial statements
at December 31, 2010

3. Notes to the financial statements

201 NOTE 1 SIGNIFICANT EVENTS 214 NOTE 5 INCOME STATEMENT

201 1.1. Payment of dividend in the form of shares 214 5.1. Operating income
201 1.2. Real estate asset transactions 214 5.2. Share of income from joint operations
201 1.3. New funding arrangements 214 5.3. Financial income
201 1.4. Internal restructuring of offices segment 215 5.4. Non-recurring income
2
15 5.5. Corporate income tax
201 NOTE 2 ACCOUNTING PRINCIPLES
AND MEASUREMENT METHODS 215 NOTE 6 OFF-BALANCE SHEET COMMITMENTS

201 2.1. Application of accounting conventions 215 6.1. Reciprocal commitments relating to interest
201 2.2. Measurement methods rate hedging instruments
2
03 2.3. Mergers and similar transactions
203 2.4. Receivables, debts and cash 217 NOTE 7 ITEMS CONCERNING RELATED COMPANIES
and cash equivalents
203 2.5. Marketable securities 217 NOTE 8 OTHER DISCLOSURES
203 2.6. Deferred expenses: loan issue costs
203 2.7. Forward financial instruments 217 8.1. Automatic cash centralization
203 2.8. Operating income and expenses 217 8.2. Employees
204 2.9. Tax regime adopted by the Company 2
17 8.3. Loans and guarantees granted
and set up for corporate officers
205 NOTE 3 BALANCE SHEET ASSETS and Supervisory Board members
217 8.4. Compensation paid to Supervisory Board
205 3.1. Intangible assets and property, members
plant and equipment 217 8.5. Post-balance sheet date events
208 3.2. Financial assets
210 3.3. Other fixed assets 217 NOTE 9 CONSOLIDATION INFORMATION
211 3.4. Trade and other receivables
211 3.5. Marketable securities and treasury shares
211 3.6. Prepaid expenses and deferred expenses

212 NOTE 4 BALANCE SHEET LIABILITIES

212 4.1. Shareholders’ equity

2
12 4.2. Provisions for contingencies and losses
213 4.3. Loans and borrowings
213 4.4. Trade and other payables
213 4.5. Social and tax liabilities
214 4.6. Other liabilities
214 4.7. Prepaid income

200 | Klépierre – 2010 Annual report

1. Significant events 2. Accounting principles
and measurement methods
1.1. Payment of dividend in the form of shares
2.1. Application of accounting conventions
The general meeting of shareholders held on April 8, 2010 approved
the payment of a net dividend of 1.25 euros per share in respect of the The annual financial statements for the period ended December 31,
2009 fiscal year; the payment to be made in cash or in shares. 2010 have been prepared in accordance with the general chart of
The option to receive payment of the dividend in the form of shares was accounts.
taken up by 84.6% of shareholders. The general accounting conventions have been applied in compliance
The resulting increase in equity totals 189,522,439.89 euros, funded by with the following principles:
the issue of 7,676,081 new shares. •• prudence;
The cash dividend payment totaled 34.4 million euros. •• independence of fiscal years;
Following this transaction, the share capital of Klépierre SA totaled •• compliance with the general rules applying to the preparation and pre-
265,507,536 euros in the form of 189,648,240 shares, each with a par sentation of annual financial statements, and on the basis of assumed
value of 1.40 euros. continuity of operation.
No changes were made to methods or estimations during the fiscal year.
1.2. Real estate asset transactions
2.2. Measurement methods
Klépierre SA continued to apply its trading policy during the year, result-
ing in the disposal of the following office buildings: 2.2.1. Fixed assets
•• 23/25 rue de Marignan, 38 rue Marbeuf (Paris);
•• 36 rue Marbeuf (Paris); General criteria applied to the recognition
•• 5 bis boulevard Diderot (Paris); and measurement of assets

1.3. New funding arrangements Property, plant and equipment and intangible assets are recognized as
assets when all the following conditions are met:
On April 13, 2010 Klépierre SA issued 700 million euros of new 7-year •• it is likely that the entity will enjoy the corresponding future financial
bonds maturing April 13, 2017 and paying a 4% coupon. benefits;
At the same time the company placed privately 200 million euros of •• their cost or value can be measured with a sufficient level of reliability.
10-year bonds maturing April 14, 2020 with a 4.625% coupon. At the date on which they enter the company’s asset base, asset
Both transactions were carried out under a Euro Medium Term Note values are measured either at their cost of acquisition or their cost
(EMTN) program instigated on April 1, 2010. of construction.
The backup line of commercial paper was increased by 200 million Financial interest relating specifically to the production of fixed assets
euros and now totals 500 million euros. is included in their cost of acquisition.

1.4. Internal restructuring of offices segment 2.2.2. Intangible assets: technical negative variance

Transfer of assets and liabilities (TUP) Generally recognized for mergers or complete transfers of assets and
Klépierre SA resolved on August 26, 2010, to instigate simplified dis- liabilities measured at their book value, the technical negative variance or
solution without liquidation with fiscal retrospective effect from July 1, “false” negative variance is recognized where the net value of the acquired
2010, of the following company: company’s shares as stated in the assets of the acquiring company is
•• General-Leclerc SNC. higher than the net book asset contributed.
This transaction was carried out under the common law tax status. To determine whether the negative merger variance is “true” or “false”, it
must be compared with the underlying capital gains on the asset items
recognized or not in the accounts of the acquired company after deduc-
tion of liabilities not recognized in the accounts of the absorbed company
for lack of accounting obligation to do so (pensions accruals, deferred
tax liabilities).
The technical negative variance shown in the “Goodwill” item is not amor-
tizable, since the time over which its future economic benefits may be
enjoyed cannot reliably be determined.

Klépierre – 2010 Annual report | 201

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financial statements
at December 31, 2010

Impairment of technical negative variance recognized for capital repairs or major refurbishments. This convention
is intended to cover those maintenance expenses whose sole purpose
The negative variance is impaired when the present value (the market is to verify the condition and serviceability of installations and to carry
value or value in use, whichever is the greater) of one or more underly- out maintenance to such installations without extending their working
ing assets to which a percentage of the negative variance has been life beyond that initially intended, subject to compliance with the appli-
assigned falls below the book value of the assets concerned plus the cable accounting recognition conditions.
proportion of negative variance assigned.
Principles of asset impairment
2.2.3. Property, plant and equipment
At each balance sheet and interim reporting date, the Company carries
Definition and recognition of components out an appraisal to determine any indication that an asset could have
suffered a significant loss in value (article 322-5 of the French General
Based on Fédération des Sociétés Immobilières et Foncières (French Tax Code).
Federation of Property Companies) recommendations concerning com- An asset is impaired when its actual value falls below that of its net book
ponents and useful life, the component method is applied as follows: value. The actual value is the market value (appraised value excluding
•• for properties developed by the companies themselves, assets are rights on the balance sheet date) or the value in use (article 322-1 of
classified by component type and measured at their realizable value; the French General Tax Code), whichever is the higher.
•• where investment properties are held in the portfolio (sometimes for long The market value of the asset held is determined by independent
periods), components are broken down into four categories: business appraisers, with the exception of those assets acquired less than six
premises, shopping centers, offices and residential properties. months earlier, whose market value is estimated as the cost of
4 components have been identified for each of these asset types acquisition.
(in addition to land): However, given the fact that these appraisals are, by their nature, esti-
•• structures; mates, it is possible that the amount realized on the disposal of some
•• facades, cladding and roofing; real estate assets will differ from the appraised value of those assets,
•• general and Technical Installations (GTI); even where such disposal occurs within a few months of the balance
•• fittings. sheet date.
When applying regulations 2004-06 and 2002-10, existing office build- Assets covered by a contract of sale (mandat de vente) are appraised
ings have been broken down using the following percentages (arrived at their selling price net of exit expenses.
at on the basis of the FSIF table):
2.2.4. Long-term financial investments
Components Offices Depreciable life
(straight line) Equity investments are recognized at their cost of acquisition. Provisions
Structures 60% 60 years for impairment may be entered for equity investments where their
Facades 15% 30 years inventory value is less than their acquisition value at the fiscal year end.
GTI 15% 20 years The inventory value of equities is equivalent to their value in use, as
Fittings 10% 12 years calculated to take account of the net reappraised situation and yield
outlook.
All component figures are based on assumed “as new” values. The The reappraised net position of real estate companies is estimated on
Company has therefore calculated the proportions of the fittings, techni- the basis of appraisals conducted by third-party real estate
cal installations and facade components on the basis of the periods appraisers.
shown in the table applied since the date of construction or most recent Management Company shares are measured at each fiscal year end by
major renovation of the property asset concerned. The proportion for a third-party appraiser.
structures is calculated on the basis of the proportions previously identi- Treasury shares acquired for the purpose of transfer to a vendor as part
fied for the other components. of an external growth transaction are provisioned if the average stock
In accordance with the recommendations of the Fédération des Sociétés market price for the last month of the fiscal year is lower than the acqui-
Immobilières et Foncières (French Federation of Property Companies), sition value.
the depreciable lives have been determined in such a way as to obtain
a zero residual value on maturity of the depreciation schedule. 2.2.5. Acquisition cost of fixed assets
Depreciation is calculated on the basis of the useful lifespan of each
component. Transfer duties, fees, commissions and legal expenses are included in
The maintenance expenses involved in multi-year capital repairs pro- the capitalized cost of the asset.
grams or major refurbishments governed by legislation, regulations or The Company has exercised the option of recognizing the acquisition
the standard practices of the entity concerned must be recognized from cost of long-term financial investments as expenses (articles 321-10
the outset as distinct asset components, unless a provision has been and 321-15 of the French General Tax Code).

202 | Klépierre – 2010 Annual report

2.2.6. Eviction compensation 2.5. Marketable securities

When a lessor terminates a lease prior to the expiration date, he must Marketable securities are recognized at their cost of acquisition net of
pay eviction compensation to the lessee. provisions.
Where eviction compensation is paid as a result of major renovation or Provisions for impairment of treasury shares are taken when their inven-
reconstruction work on a property requiring the prior removal of tenants, tory value based on the average stock market price for the last month
the cost is included in total renovation costs. of the fiscal year is lower than their existing inventory value.
Expenditure that does not meet the combined criteria applying to the Provisions are made under liabilities for stocks granted to employees
definition and recognition of assets and which cannot be allocated to as soon as it becomes probable that the stock options will be exercised
acquisition or production costs is recognized as an expense: eviction (continued service and performance conditions met and stocks likely to
compensation paid to tenants during commercial restructuring is rec- be exercised). The provision is recognized if the average purchase price
ognized as an expense for the fiscal year. exceeds the purchase price offered to employees.

2.2.7. Marketing expenditure 2.6. Deferred expenses: loan issue costs

Marketing, re-marketing and renewal fees are recognized as expenses Expenditure that does not meet the combined criteria applying to the
for the fiscal year. definition and recognition of assets must be recognized as an expense.
It is no longer possible to amortize these costs over several periods.
2.3. Mergers and similar transactions CNC recommendation 2004-15 on assets of June 23, 2004 does not
apply to financial instruments and related expenditure, such as loan
CNC recommendation 2004-01 of March 25, 2004, as approved on issue costs, share premiums and loan repayment premiums.
May 4, 2004, by the Comité de Réglementation Comptable (CRC), Bond costs and the commissions and fees relating to bank loans are
relating to the treatment of mergers and similar transactions states spread over the full loan period.
the following rule regarding positive or negative variances in respect of
cancelled shares: 2.7. Forward financial instruments

Negative variance Expenses and gains on forward financial instruments (swaps) entered
into for the purpose of hedging the Company’s risk exposure to interest
A negative variance arising from these transactions must be treated in rate fluctuations are recognized pro rata in the income statement.
the same way as a negative merger variance: Unrealized losses and gains arising as a result of the difference between
•• recognition of the technical negative variance in intangible assets; the market value of agreements estimated at the end of the year and
•• recognition of the balance of the negative variance in financial expenses. their par value are not recognized.

Positive variance 2.8. Operating income and expenses

The positive variance from these transactions must be treated in the Rental income is recognized on a straight line basis over the full duration
same way as a positive merger variance. Any positive variance in the of the lease agreement, building expenses are rebilled to clients on pay-
percentage of earnings accumulated by the merged entity (since the ment and interest is entered on receipt or payment. At the end of the
acquisition of the acquired company’s equity by the acquiring company) fiscal year, gains and expenses are adjusted by the addition of accrued
remaining undistributed must be shown in the investment earnings of amounts not yet due and the subtraction of pre-posted non-accrued
the acquiring company. Any residual balance is recognized as share- amounts.
holders’ equity. Accruals for building expenses are recognized as payables in “Suppliers –
invoices to be received”.
2.4. Receivables, debts and cash and cash equivalents

Receivables, debts and cash and cash equivalents have been measured
at par value.
Trade receivables are estimated individually at each balance sheet date
and interim reporting date, and a provision entered wherever there is a
perceived risk of non-recovery.

Klépierre – 2010 Annual report | 203

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financial statements
at December 31, 2010

2.8.1. Leases

Rental income is recognized on a straight-line basis throughout the full

period of the lease.
Stepped rents and rent-free periods are recognized every fiscal year by
spreading the resulting increase or decrease in rental income over the
reference period.
The reference period adopted is the first firm lease term.

2.8.2. Early termination indemnities

Tenants who terminate their leases prior to the contractual expiration

date are liable to pay early termination penalties. This revenue is allo-
cated to the terminated lease and credited to income for the period in
which it is recognized.

2.9. Tax regime adopted by the Company

As a result of opting to apply the tax regime provided for in article 11 of

the French finance act of December 30, 2002, Klépierre SA is exempt
from corporate income tax, subject to compliance with the three follow-
ing conditions applying to the distribution of its profits:
•• distribution of 85% of the profits generated from the rental of real estate
assets prior to the end of the fiscal year following the year in which they
were earned;
•• distribution of 50% of capital gains made on the disposal of buildings,
equity investments in companies covered by the provisions of article 8
and whose purpose is identical to that of an SIIC or stocks in subsidiary
companies subject to corporate income tax, where such companies
have exercised the option prior to the second fiscal year following the
year in which the gains were made;
•• distribution of all dividends received from subsidiary companies exercis-
ing the option during the fiscal year following the year in which the divi-
dends were paid.
Income relating to the exempt sector is distinguished from that of the
taxable sector in accordance with the applicable legal requirements:
•• direct allocation of expenses and income, wherever possible;
•• allocation of general expenses pro rata to the income of both sectors;
•• allocation of net interest expenses pro rata to the gross fixed assets of
both sectors.

Klépierre SA also calculates the taxable income of the sector subject to

corporate income tax.
Further to adopting the reconstitution of the historic cost in the context
of implementing the component method, the new article 237 septies of
the French General Tax Code requires that the resulting net amortization
adjustments must be reintegrated for tax purposes in equal installments
over 5 years.

204 | Klépierre – 2010 Annual report

3. Balance sheet assets
3.1. Intangible assets and property, plant and equipment

3.1.1. Gross fixed assets

Gross value at Acquisitions, new Reductions by Inter-item Merger Gross values

12/31/2009 businesses and disposals, transfer at fiscal
contributions retirement of assets year end
INTANGIBLE ASSETS
Set-up costs 614 – 614
Other intangible assets 5 244 – – – – 5 244
– Technical negative variance 5 225 – 5 225
– Other 19 – 19
Total 5 858 – – – – 5 858
PROPERTY, PLANT AND EQUIPMENT – NET VALUE
Land 253 657 – -72 627 – – 181 030
– Finance lease – – – –
– Operating lease 243 447 – -72 627 170 820
– Operational lease 10 210 – – 10 210
Structures 165 218 – -37 740 – – 127 477
– Finance lease – – – –
– Operating lease 160 554 -37 740 122 814
– Operational lease 4 664 – – – – 4 664
Facades, cladding and roofing 35 875 – -8 592 – – 27 283
– Finance lease – – – –
– Operating lease 34 985 – -8 592 – 26 393
– Operational lease 889 – – 889
General and Technical Installations 38 447 – -8 467 37 – 30 017
– Finance lease – –
– Operating lease 37 620 – -8 467 37 – 29 190
– Operational lease 827 – – 827
Fittings 37 716 – -12 308 235 – 25 643
– Finance lease – –
– Operating lease 37 214 – -12 308 235 – 25 141
– Operational lease 502 – – 502
Fittings and construction in progress 25 1 724 ­ - 272 – 1 477
Other property, plant and equipment 415 – -12 – – 403
Total 531 354 1 724 -139 746 – – 393 331
TOTAL GROSS FIXED ASSETS 537 212 1 724 -139 746 – – 399 189
In thousands of euros

Acquisitions mainly relate to the restructuring of the Collines de l’Arche

buildings in La Défense.
Reductions relate to the disposals of office blocks at 23/25 rue
Marignan, 36 rue Marbeuf and 5 boulevard Diderot in Paris.

Klépierre – 2010 Annual report | 205

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financial statements
at December 31, 2010

3.1.2. Depreciation and amortization

Depreciation, Allowances Disposals Other Merger Depreciation and

amortization at movements amortization at
12/31/2009 fiscal year end
INTANGIBLE ASSETS
Set-up costs 491 123 – – – 614
Other intangible assets – – – – – –
– Technical negative variance – – – – – –
– Other – – – – – –
Total 491 123 – – – 614
PROPERTY, PLANT AND EQUIPMENT – NET VALUE
Structures 27 399 3 672 -10 410 – – 20 660
– Finance lease – – – –
– Operating lease 26 671 3 568 -10 410 – 19 829
– Operational lease 727 104 – 831
Facades, cladding and roofing 9 072 1 250 -4 324 – – 5 998
– Finance lease –
– Operating lease 8 833 1 216 -4 324 5 725
– Operational lease 239 34 – 273
General and Technical Installations 14 002 1 887 -6 371 – – 9 518
– Finance lease – – –
– Operating lease 13 643 1 835 -6 371 – 9 107
– Operational lease 361 52 – 413
Fittings 23 270 2 506 -10 536 – – 15 240
– Finance lease –
– Operating lease 22 840 2 425 -10 536 – 14 729
– Operational lease 430 81 – 511
Other property, plant and equipment 395 2 -11 – 386
Total 74 139 9 317 -31 652 – – 51 801
TOTAL DEPRECIATION AND AMORTIZATION 74 630 9 440 -31 652 – – 52 415
In thousands of euros

Provisions at Allowances Write-backs Inter-item Merger Provisions at

12/31/2009 transfer fiscal year end
PROPERTY, PLANT AND EQUIPMENT – NET VALUE
Buildings and fixtures – – – – – –
– Operating lease – – – –
Structures – – – – – –
– Operating lease – – – – –
Facades, cladding and roofing – – – – – –
– Operating lease – – – – –
General and Technical Installations – – – – – –
– Operating lease – – – – –
Fittings – – – – – –
– Operating lease – – – – –
TOTAL PROVISIONS – – – – – –

TOTAL DEPRECIATION, AMORTIZATION AND PROVISIONS 76 559 9 440 -31 652 – – 52 415

In thousands of euros

206 | Klépierre – 2010 Annual report

3.1.3. Net fixed assets

Net values at Net increases in Net reduction in Inter-item Merger Net values at
12/31/2009 allowances write-backs transfers fiscal year end
INTANGIBLE ASSETS
Set-up costs 123 -123 – – - -0
Other intangible assets 5 244 – – – – 5 244
– Technical negative variance 5 225 – – – – 5 225
– Other 19 – – – – 19
Total 5 367 -123 – – – 5 244
PROPERTY, PLANT AND EQUIPMENT – NET VALUE
Land 253 657 – -72 627 – – 181 030
– Finance lease – – – – –
– Operating lease 243 447 – -72 627 – – 170 820
– Operational lease 10 210 – – – – 10 210
Structures 137 819 -3 672 -27 330 – – 106 818
– Finance lease – – – – –
– Operating lease 133 884 -3 568 -27 330 – 102 986
– Operational lease 3 937 -104 – – 3 833
Facades, cladding and roofing 26 804 -1 250 -4 268 – – 21 285
– Finance lease – – – – –
– Operating lease 26 153 -1 216 -4 268 – 20 669
– Operational lease 650 -34 – – 616
General and Technical Installations 24 445 -1 887 -2 096 37 – 20 499
– Finance lease – – – – –
– Operating lease 23 977 -1 835 -2 096 37 20 083
– Operational lease 466 -52 - – 414
Fittings 14 446 -2 506 -1 772 235 – 10 403
– Finance lease – – – – –
– Operating lease 14 374 -2 425 -1 772 235 10 412
– Operational lease 72 -81 – – -9
Fittings and construction in progress 25 1 724 – -272 1 477
Other property, plant and equipment 19 -2 -1 – – 17
Total 457 214 -7 593 -108 094 – – 341 530
TOTAL NET fixed assets 462 581 -7 716 -108 094 – – 346 774
In thousands of euros

Klépierre – 2010 Annual report | 207

 Corporate
financial statements
at December 31, 2010

3.2. Financial assets Provisions

3.2.1. Equity investments Provisions at Allowances Write-backs Provisions at

12/31/2009 12/31/2010
Gross equity investments at year start 4 243 778 Financial assets
Acquisitions of equities 281 253 Investments 63 204 121 367 -9 238 175 333
– Received in payment for contributions of buildings or shares to subsidiaries Total provisions 63 204 121 367 -9 238 175 333
– Received in payment for equity investment (minority share) – In thousands of euros

– Purchases, capital increase and contributions 281 253

Decreases in equities -158 420 The change in the “Provisions for holdings” item mainly relates to:
– Decreases, capital reductions and contributions -158 420 •• impairment of shares in the following companies:
Disposals and transfers of equities -8 – Capucines BV (e86.5M),
– Retirement of shares -8 – Klépierre Créteil SCI (e32M),
– Disposal of shares – Klépierre Vinaza SA (e2M),
– Payment for contributions – Klépierre Participations et Financements SAS (e0.8M);
– Other –
Gross equity investments at year end 4 366 603 •• write-backs of impaired shares in the following companies:
In thousands of euros – Centre Bourse SC (e4M),
– Holding Gondomar 1 SA (e3.4M),
The change in the “Acquisitions of equities” item refers chiefly to: – Klémentine BV (e1.8 M).
•• the purchase of equities mainly by set-off of receivables of the following
companies:
– Ségécé Polska SPZOO (e10.9M),
– Ségécé Ceska Republika SRO (e10.5M),
– Ségécé Magyarorszag KFT (e7.9M),
– Ségécé Portugal SPA (e9.6M),
– Ségécé Hellas SPA (e0.2M),
– Ségécé Italia SRL (e22.4M);

•• the recapitalization by set-off of advances and receivables from the

following companies:
– Capucines BV (e211.8M),
– Nancy Bonsecours SCI (e6M),
– Klépierre Vinaza SA (e2M);

The “reduction of equities” item mainly relates to payments for contribu-

tions and capital reductions for the following companies:
– Klépierre Participations et Financements SAS (e95M, capital
reduction),
– Cecoville SAS (e18.8M),
– Holding Gondomar 1 SA (e17.2M),
– Général-Leclerc SNC (e14.4M),
– Foncière Saint Germain SNC (e10M),
– Klétransactions SNC (e3.1M).

The “Disposals and transfers of equities” item relates to the cancellation

of stocks in Antin Vendôme SCI which was liquidated in October 2010.

208 | Klépierre – 2010 Annual report

Subsidiary companies and holdings

Financial information on subsidiaries Capital Shareholders Percentage Net income Pre-tax Gross book Net book Guarantees Loans and Dividends
and investments equity other holding at year end revenues value value and sureties advances received
than share given granted
capital & net
income
1. SUBSIDIARIES OWNED BY MORE THAN 50%
Angoumars SNC 5 131 46 165 100 -4 029 4 737 51 296 51 296
Barjac Victor SNC 1 792 16 110 100 2 110 3 405 19 236 19 236 6 855
Begles d’Arcins SCS 26 679 14 469 52 5 366 10 355 44 991 44 991 15 869 2 693
Begles Papin SCI 765 6 871 100 230 778 7 636 7 636 2 638
Besançon Chazeule SCI 54 470 100 142 48 524 524
Capucine BV 51 194 529 869 100 -5 196 586 056 466 029
CB Pierre SAS 10 500 1 050 100 1 706 2 419 0 0 5 460
Cécoville SAS 2 163 105 688 100 5 089 21 114 110 137 110 137 43 606 25 943 16 286
Centre Bourse SNC 3 813 100 2 533 3 231 47 419 47 271
Clermont Jaude SAS 21 686 2 169 100 6 304 10 137 76 396 76 396 32 295 6 525
Combault SCI 777 6 984 100 691 1 194 7 762 7 762 3 832
Foncière de Louvain-la-Neuve SA 62 -22 132 100 -2 838 61 61 34 763
Foncière Saint-Germain SNC 370 2 100 -17 -5 543 372
Galeries Drancéennes SCI 4 600 100 3 621 4 811 58 596 58 596 8 464
Galleria Commerciale Klépierre SRL 1 560 38 902 100 1 208 4 839 41 052 41 052 6 550
Holding Gondomar 1 SA 5 085 24 358 100 2 964 3 469 64 735 52 367 8 450 2 865
Holding Gondomar 3 SAS 410 2 715 100 211 3 684 3 684 1 087
Holding Gondomar 4 SAS 413 2 874 100 214 4 337 4 337 926
Jardin des Princes SNC 800 7 185 100 656 1 113 9 525 9 525 590
Kléber La Pérouse SNC 19 675 138 211 100 7 733 179 165 225 165 225 130 466 7 157
Klécar Europe Sud SCS 315 260 298 485 83 20 857 523 247 523 247 14 728
Klécar France SNC 500 881 500 880 83 129 998 84 938 831 462 831 462 9 178
Klécar Participations Italie SAS 31 471 8 459 83 5 994 33 629 33 629 79 324 2 233
Kléfin Italia SPA 15 450 73 867 100 15 919 989 125 625 125 625 52 516
Klémentine BV 1 784 16 013 100 -70 17 833 17 833 2 287
Klémurs SCA 82 500 40 359 84 27 600 41 425 124 519 124 519 150 057 6 939
Klépierre Conseil SAS 1 108 5 546 100 251 1 902 7 933 6 685 15 793 32
Klépierre Créteil SCI 5 721 16 950 100 1 912 57 201 25 217 16 076
Klépierre Finance SAS 38 4 100 78 38 38 142
Klépierre Luxembourg SA 117 834 212 127 100 12 077 315 626 315 626 50 592
Klépierre Nordica BV 60 000 227 280 100 -19 287 325 287 325 53
Klépierre Participation et Financements SAS 1 377 138 100 -927 1 377 588 6 308
Klépierre Portugal SA 250 1 050 100 1 734 4 250 4 250 177 318
Klépierre Trading KFT 180 389 100 258 510 199 199 456
Klépierre Vinaza SA 60 -9 626 100 -4 149 1 376 7 229 0 28 058
Klé 1 SAS 8 248 20 625 100 6 836 210 82 154 82 154 29 909 5 304
Klé Projet 1 SAS 3 754 27 844 100 291 1 111 37 201 37 201 11 741
Klétransactions SNC 348 403 100 -115 26 751 751
LP 7 SAS 45 18 100 206 261 261
Nancy Bonsecours SCI 3 054 3 053 100 -371 6 565 6 108 2 291
Pasteur SNC 227 1 738 100 -2 81 2 091 1 966 5 168
SCOO SC 24 431 315 839 54 31 737 46 518 193 910 193 910 3 721
Ségécé SCS 1 412 2 691 100 43 749 84 022 49 304 49 304
Ségécé Ceska Republica SRO 120 1 467 100 131 2 970 10 500 10 500
Ségécé Hellas SA 200 92 100 -179 340 200 200
Ségécé Italia SRL 143 8 200 100 1 965 14 117 22 390 22 390
Ségécé Magyarorszag KFT 11 2 202 100 -995 3 303 7 900 7 900
Ségécé Polska ZO O 13 2 169 100 455 3 291 10 900 10 900
Ségécé Portugal SA 200 2 828 100 131 2 839 9 600 9 600
Soaval SCS 5 557 46 394 80 -362 42 046 42 046 56 873

Klépierre – 2010 Annual report | 209

 Corporate
financial statements
at December 31, 2010

Financial information on subsidiaries Capital Shareholders Percentage Net income Pre-tax Gross book Net book Guarantees Loans and Dividends
and investments equity other holding at year end revenues value value and sureties advances received
than share given granted
capital & net
income
Sodévac SNC 2 918 26 245 100 2 788 4 988 29 163 29 163 10 326
Sovaly SAS 469 104 100 -756 787 0
TOTAL I 325 720 366 780 4 142 427 3 967 094 43 606 980 465 76 672
2. INVESTMENTS OF BETWEEN 10% AND 50%
Bassin Nord SCI 44 827 50 236 772 22 413 22 413 143 630
Galae SNC 330 49 436 6 013 490 490
La Plaine du Moulin à Vent SCI 28 593 25 285 50 42 2 803 26 939 26 939 2 657
Le Havre Vauban SNC 300 5 50 209 683 237 237
Le Havre Lafayette SNC 525 9 50 2 693 5 953 983 983
Odysseum Place de France SCI 97 712 1 50 5 671 11 561 49 004 49 004 58 270
Ségécé Slovensko SRO 7 2 15 32 290 4 4
Solorec SC 4 869 2 768 49 25 039 31 945 124 104 124 104 14 440
TOTAL II 34 958 60 020 224 174 224 174 0 218 997 0
GRAND TOTAL I + II 360 078 426 800 4 366 603 4 191 269 43 606 1 199 462 76 672
In thousands of euros

3.2.2. Receivables from equity securities 3.3. Other fixed assets

12/31/2010 12/31/2009 3.3.1. Loans
Advances on equity securities 2 473 349 2 536 142
Interest accrued on advances 105 666 99 005 Loans made by Klépierre SA totaled 130.7 million euros, including inter-
Share of net income 154 720 142 438 est. These loans were granted to Klémurs SCA.
Impairment of receivables from equity investments -12 344 -10 488 On June 30, 2010 a new 20 million euro loan, not subordinated to the
Total 2 721 392 2 767 098 loan agreement, was made to Klémurs SCA allowing it to pay back
In thousands of euros 20 million euros of the 40 million euro loan made on June 29, 2009.
On December 31, 2010, Klémurs repaid the 20 million euro balance of
The majority of the change shown in the “Advances on equity securities” the Klépierre subordinated loan. The repayment was funded from cash.
item refers to increases in advances made to:
•• Bassin Nord SCI (e69M) for construction of the shopping center
Le Millénaire in Aubervilliers, France; 12/31/2010 12/31/2009
•• Corvin Retail and Klépierre Corvin (e41M) for the Corvin Atrium mall in Deposits paid 74 120
Hungary; Treasury shares – 29 002
•• Soaval SCS (e36M) for the restoration of Saint-Lazare station; Impairment of treasury shares -27
•• Holding Klégé (e27M) for the Aqua Portimão center in Portugal; Total 74 29 095
•• Kléber La Pérouse SNC (e18M) for the joint acquisition with Axa of land In thousands of euros

for the Val d’Europe shopping center.

And by reductions in advances to: The “Treasury shares” item was reduced by 29 million euros following
•• Capucine BV (e209.8M) following a capital increase; a transfer to “Marketable securities and treasury shares”.
•• Ségécé SCS (e43.8M) following the purchase by set-off of shares in the
Ségécé International companies.

Having fully impaired the shares in Klépierre Vinaza (Spain), an additional

provision of 1.9 million euros was recognized in respect of these
receivables.

210 | Klépierre – 2010 Annual report

3.4. Trade and other receivables 3.5. Marketable securities and treasury shares

All trade receivables (e2.7M) are less than one year old. At December 31, 2010, the stock of treasury shares totaled 2,880,158
Other receivables are shown in the following tables, broken down by (1.52% of all shares issued), with a net value of 70.1 million euros.
due date: This stock is allocated as follows:
•• 2,682,740 shares to the stock options plan, including 493,000 shares
12/31/2010 12/31/2009 granted by the Executive Board on June 21, 2010 under the Klépierre
State 1 475 2 072 2010 plan;
– VAT 1 331 2 020 •• 197,418 shares to the market liquidity agreement used to regulate the
– Accrued revenue 34 52 share price.
– State – Corporate income tax 110 Totaling 4.3 million euros, the other shares item refers to short-term cash
Other receivables 4 329 2 933 investments.
– Receivables from disposal of assets – 3
– Accrued interest on interest rate swap 3.6. Prepaid expenses and deferred expenses
– Other 4 329 2 930
Total 5 804 5 005 12/31/2010 12/31/2009
In thousands of euros
Prepaid expenses 25 020 25 988
– Deferral of payment on swaps 19 111 21 140
Receivables maturity schedule – Construction lease 5 495 4 707
– Other 414 142
Total Less than One-five More than
one year years five years Deferred expenses 10 073 11 160
State 1 475 1 475 – – – Bond costs 4 490 2 346
– VAT 1 331 1 331 – Lender loan issue costs 5 583 8 814
– Accrued revenue 34 34 Bond premiums 8 114 5 189
– State – Corporate income tax 110 110 Total 43 207 42 337
Other receivables 4 329 4 329 – – In thousands of euros

– Receivables for fixed asset disposals – –

– Accrued interest on interest rate swap – – The “Construction lease” item refers to the building at 43 rue de Grenelle
– Other 4 329 4 329 in Paris (15th arrondissement).
Total 5 804 5 804 – –
In thousands of euros

Klépierre – 2010 Annual report | 211

 Corporate
financial statements
at December 31, 2010

4. Balance sheet liabilities

4.1. Shareholders’ equity
At 12/31/2009 Allocation Distribution Other At fiscal
of profit year end
Share capital (1) 254 761 10 747 (1) 265 508
Additional paid-in capital from issues, contributions and merger premiums
– Issue premiums 676 842 178 446 (1) 855 288
– EOC issue premiums 174 012 174 012
– Contribution premiums 259 318 259 318
– Merger premiums 113 297 113 297
Positive merger variance 187 452 187 452
Positive cancelled share variance 18 307 250 (2) 18 557
Legal reserve 23 270 2 206 25 476
Other reserves
– Regulated reserves – – –
– Other reserves 168 055 168 055
Balance carried forward 399 525 393 908 -227 465 3 501 (3) 569 469
Net income/loss for the year 396 114 -396 114 121 138 121 138
Total 2 670 952 – -38 272 124 889 2 757 569
Composition of share capital (1)
Ordinary shares 181 972 159 7 676 081 189 648 240
Par value (in euros) 1.40 1.40 1.40
In thousands of euros
(1) Capital increase for payment of the dividend in the form of shares.
(2) The increase in the positive variance from cancelled shares refers to the transfer of the assets and liabilities of SNC Général Leclerc.
(3) The increase in retained earnings refers to the dividends relating to allocated treasury shares (3,501 thousand euros).

The capital increase reported results from the option offered to Klépierre
SA shareholders to receive their dividends in the form of shares,
which is described in greater detail in section “1. Significant events”.

4.2. Provisions for contingencies and losses

12/31/2010 Allowances Write-backs Merger 12/31/2009
Other provisions for contingencies and losses 7 003 6 732 - 450 – 721
Total 7 003 6 732 - 450 – 721
In thousands of euros

Allowances mainly relate to a 5.2 million euro provision for risks on the

stock option plan granted in 2010.

212 | Klépierre – 2010 Annual report

4.3. Loans and borrowings The maturity dates of financial debt at December 31, 2010 were as
follows:
Debt maturity schedule
Debt maturity schedule
12/31/2010 12/31/2009
Total Less than One - More than
Other bonds 2 252 189 1 325 218 one year five years five years
– Debt principal 2 189 100 1 289 100 Other bonds 2 252 189 663 089 – 1 589 100
– Accrued interest (1) 63 089 36 118 – Debt principal 2 189 100 600 000 (1) 1 589 100 (2)
Loans and borrowings from credit institutions 1 822 003 2 902 563 – Accrued interest 63 089 63 089
– Credit facilities 1 785 000 2 750 000 Loans and borrowings 1 822 003 37 003 1 785 000 –
– Interest accrued on credit facilities 571 1 646 from credit institutions
– Bilateral loan – 135 000 – Credit facilities 1 785 000 1 785 000
– Interest accrued on bilateral loan – 118 – Interest accrued on credit facilities 571 571
– Bank overdrafts 16 027 41 – Bilateral loan – –
– Interest accrued on bank accounts – – – Interest accrued on bilateral loan – –
– Interest accrued on swaps 20 405 15 758 – Bank overdrafts 16 027 16 027
Other loans and borrowings 696 433 799 561 – Interest accrued on bank accounts – –
– Deposits and guarantees received 2 167 2 157 – Interest accrued on swaps 20 405 20 405
– Cash centralization scheme 166 632 474 822 Other loans and borrowings 696 433 672 859 21 407 2 167
– Commercial paper 500 000 297 000 – Deposits and guarantees received 2 167 2 167
– Debts on equity investments 21 407 19 507 – Cash centralization scheme 166 632 166 632
– Interest accrued on debts 1 692 1 064 – Commercial paper 500 000 500 000
– Share of net income 4 535 5 011 – Debts on equity investments 21 407 21 407
Total 4 770 625 5 027 342 – Interest accrued on debts 1 692 1 692
In thousands of euros – Share of net income 4 535 4 535
(1) Coupon payable on July 15, March 16, April 13 and 14.
Total 4 770 625 1 372 951 1 806 407 1 591 267
At December 31, 2010, the main sources of borrowing were as In thousands of euros
(1) July 2011 600,000 thousand euros.
follows: (2) March 2016 689,100 thousand euros, April 2017 700,000 thousand euros, April 2020
•• a 600 million euro bond issued in July 2004 with a 4.625% coupon and 200,000 thousand euros.
a maturity date of July 2011;
•• a 689.1 million euro bond issued in March 2006 with a 4.25% coupon 4.4. Trade and other payables
and a maturity date of March 2016;
•• a 700 million euro bond issued in April 2010 with a 4% coupon and a On average, suppliers are paid approximately thirty days from the billing
maturity date of April 2017; date. At December 31, 2010, suppliers were owed 14,284.33 euros for
•• a 200 million euro bond issued in April 2010 with a 4.625% coupon and payment no later than January 31, 2011.
a maturity date of April 2020;
•• a 1,000 million euro syndicated loan arranged in 2007 and fully drawn 4.5. Social and tax liabilities
down;
•• 785 million euros from a bilateral loan arranged in 2009 (maximum 12/31/2010 12/31/2009
authorized amount e2,100M); Corporate income tax – 515
•• a bilateral loan arranged in 2008 (maximum authorized amount of Other taxes 13 733 12 368
e200M after an early renunciation of e200M in April 2010); Total 13 733 12 883
•• 500 million euros from a commercial paper line (guaranteed by a e300M In thousands of euros

back-up line increased to e500M in June 2010).

The 135 million euro bilateral loan contracted in December 2004 was The “Other taxes” item mainly refers to 13.4 million euros of taxes payable.
repaid in March 2010. The increase reflects a provision recognized on 0.4 million euros of over-
due interest and the transfer of the Company’s debt to the French
Treasury, basically comprising 0.6 million euros of taxes payable arising
after an adjustment in respect of the 2006, 2007 and 2008 fiscal years.
In 2006, Klépierre was the subject of a tax investigation covering the
2003 and 2004 fiscal years. A demand received in December 2006 in
relation to the 2003 fiscal year is being contested by the Company.

Klépierre – 2010 Annual report | 213

 Corporate
financial statements
at December 31, 2010

4.6. Other liabilities 5.3. Financial income

12/31/2010 12/31/2009 Financial income showed a loss of 151 million euros at December 31,
Current account advances and interest – 2010, compared with a profit of 159 million euros at December 31, 2009.
Accrued interest on interest rate swaps –
Other (1) 1 580 4 682 5.3.1. Financial income
Total 1 580 4 682
In thousands of euros 12/31/2010 12/31/2009
(1) Less than 1 year.
Income from sale of securities 77 32
Income from interest rate swaps (1) –
4.7. Prepaid income Income from equity investments 59 252 272 501
Positive variance from merger and cancelled shares 19 –
12/31/2010 12/31/2009
Shareholder loans from associates 130 045 138 934
Prepaid income 1 397 2 509
Sundry interest received 22
– Deferral of payment on swaps 1 009 2 036
Other revenue and financial income 157 2 541
– Other 388 473
Write-back of financial provisions 9 581 35 730
Total 1 397 2 509
Transfer of financial expenses 2 485 4 961
In thousands of euros
Total financial income 201 616 454 721
In thousands of euros

5. Income statement (1) Swap-related income and expenses are netted.

5.1. Operating income The change in income from equity investments refers principally to:

The reduction in revenues of 11.6 million euros recognized at •• a reduction in dividends paid in the form of issue premiums in respect
December 31, 2010 is the result of office building sales. The sole source of Kléfin Italia SPA of 34.3 million euros;
of revenues is rents from the letting of office buildings. Most of this rental •• a reduction in the interim dividends for Klépierre Participation et
income is generated in Paris and the Paris Region. Financements SAS (e108M) and Holding Gondomar 1 SA (e30.3M);
Operating income for the year was 11.6 million euros lower than the •• a reduction for the dividends paid in respect of Cécoville SAS of 61 mil-
figure for December 31, 2009. lion euros;
•• increases of 7.2 million euros in the dividends paid by Kléber la Pérouse
5.2. Share of income from joint operations SNC, 6.3 million euros in those paid by Klépierre Participation et
Financements SAS and 2.3 million euros in those paid by Klécar
These funds totaled 192.6 million euros at December 31, 2010. Participations Italie SAS;
It largely consists of: •• positive variance from cancelled shares relates to the transfer of assets
•• the company’s share of the 2009 income reported by the limited partner- and liabilities (TUP);
ships (SCSs) Ségécé, Klécar Europe Sud and Begles Arcins, which •• the majority of the “Write-back of financial provisions” item refers to the
totaled 17.1 million euros; write-back of 9.3 million euros on equity investments;
•• 17.4 million euros in pre-payments against the company’s share of 2010 •• at December 31, 2010, the “Transfer of financial expenses” item referred
net income reported by the limited partnerships (SCSs) Ségécé, Klécar to the spreading of bank commissions on new bond issues.
Europe Sud and Begles Arcins;
•• the company’s share in the 2010 income of SNC Klécar France, totaling
107.9 million euros, SC SCOO, totaling 17.2 million euros and SCI
Solorec, totaling 12.4 million euros.

214 | Klépierre – 2010 Annual report

5.3.2. Financial expenses 5.4. Non-recurring income
12/31/2010 12/31/2009 12/31/2010 12/31/2009
Interest on bonds 84 008 56 974 Capital gains and losses on tangible and financial assets 72 111 38 478
Interest on loans to associates 1 098 886 Capital gains and losses on treasury shares -180 -1 252
Interest on loans from credit institutions 43 980 69 846 Other non-recurring income and expenses -1
Other bank interest – – Total 71 931 37 225
Swap-related expenses (1) 73 525 80 096 In thousands of euros
Interest on current accounts and credit deposits 3 086 3 324
Negative cancelled share variance – – The net capital gain of 72.1 million euros refers essentially to:
(transfer of all assets and liabilities)
•• the 46.2 million euro capital gain made on the sale of the 23/25 rue
Other financial expenses 9 425 7 778
Marignan office building;
Amortization allowance on bond premiums 1 801 1 400
•• the 12.5 million euro capital gain made on the sale of the 36 rue Marbeuf
Amortization allowance on loan issue fees 3 978 5 474
office building;
Allowances for financial provisions 131 244 69 637
•• the 11.2 million euro capital gain made on the sale of the 5 bis boulevard
Currency translation losses -59
Diderot office building.
Total financial expenses 352 145 295 356
In thousands of euros
(1) Swap-related income and expenses are netted. 5.5. Corporate income tax

The increase in the “Interest on bonds” item of 27 million euros results 12/31/2010 12/31/2009
from the issuance to two new bonds in April 2010. Corporate income tax and contributions -229 -1 774
The majority of the reduction in “Interest on loans” results from the Reduced-rate corporate income tax and contributions – –
renegotiation of finance terms in June 2009. Income – loss carryback – –
The majority of the “Allowances for financial provisions” item is repre- Total -229 -1 774
sented by: In thousands of euros

•• 86.5 million euros of provisions relating to Capucine BV;

•• 32 million euros of provisions relating to Klépierre Créteil BV; The majority of the -0.2 million euros shown for “Corporate income tax
•• 8 million euros of provisions relating to treasury shares; and contributions” refers to a proposed tax adjustment of 0.4 million
•• 3.8 million euros of provisions relating to Klépierre Vinaza SA. euros in respect of the 2003 fiscal year.

At December 31, 2010, net expenses related to swaps comprised: 6. Off-balance sheet commitments
•• net interest expense of 58.7 million euros;
•• deferred swap balancing payments representing an expense of 6.1. Reciprocal commitments relating to interest rate
14.8 million euros. hedging instruments

The “Interest on loans from credit institutions” item comprises: At December 31, 2010, Klépierre SA held a portfolio of interest rate
•• 13 million euros in syndicated loan interest; hedging instruments, all of which were intended to hedge a proportion
•• 28.4 million euros in bilateral loan interest; of current debt and future debt on the basis of the total funding require-
•• 2.7 million euros in commercial paper. ments and corresponding terms set out in the Group financial policy.
The unrealized capital loss on interest rate hedging instruments at
The “Interest on current accounts and credit deposits” item comprises: December 31, 2010 totaled 198.38 million euros (excluding accrued
•• 3.1 million euros in cash centralization scheme interest. coupons).

Klépierre – 2010 Annual report | 215

 Corporate
financial statements
at December 31, 2010

Firm deals the latter to consider a range of exit scenarios in 2011, 2016 and 2017
(for the Italian companies) or 2010, 2014 and 2015 (for the other malls):
Firm deals 12/31/2010 12/31/2009 – asset sharing or sale,
Fixed rate payer Klépierre – 3 850 000 3 200 000 – purchase of non-controlling shareholdings by Klépierre (with no obliga-
Variable rate payer BNP Paribas tion for Klépierre),
Fixed rate payer BNP Paribas – 1 500 000 600 000 – sale to a third party with payment of a discount by Klépierre if the offer
Variable rate payer Klépierre
is less than the revalued net assets.
In thousands of euros

Partners’ agreement in respect of Bègles Arcins

Impact on income
Signed on September 2, 2003, this agreement between Klépierre and
Impact on income 12/31/2010 Assurécureuil Pierre 3 contains provisions regulating the relationship
(reference capital one-ten years) between the Company partners, and, more specifically, a dispute reso-
Income Expenses lution clause.
Fixed rate payer Klépierre – 21 985 112 636
Variable rate payer BNP Paribas
Partners’ agreements between Klépierre, Kléfin Italia, Finiper, Finiper
Fixed rate payer BNP Paribas – 54 565 22 657
Variable rate payer Klépierre Real Estate & Investment, Ipermontebello, Immobiliare Finiper and
In thousands of euros Cedro 99 in respect of Clivia, and between Klépierre, Kléfin Italia,
Klépierre Luxembourg, Finiper, Finiper Real Estate & Investment,
12/31/2010 12/31/2009 Ipermontebello, Immobiliare Finiper and Cedro 99 in respect of
Commitments given Immobiliari Galerie Commerciali (IGC)
Commitments on purchases of securities and malls – –
Commitments on sale and purchase promissory agreement – – A partners’ agreement was signed in 2002 during the acquisition of IGC
Funding commitments given to credit institutions 138 223 400 930 shares by the Klépierre Group.
Other commitments given 4 725 – Its main provisions – including those regarding Klépierre’s preemptive
Total 142 948 400 930 right – were restated in a new agreement of 2007 applying to IGC and/
Commitments received or Clivia (the owner of the Lonato, Verona and Vittuone malls). In the
Deposits received from tenants 3 182 3 554 case of IGC, this was replaced by an agreement signed on July 23,
Funding commitments received from credit institutions 1 315 000 753 000 2009.
Commitments to buy securities – – All these agreements grant Finiper a put (option to sell) enabling the
Commitments on sale of buildings – – latter to sell its shares in IGC and/or Clivia to Klépierre. This put expires
Total 1 318 182 756 554 in 2017 and can be split into two parts:
In thousands of euros •• 1 of 12% and 1 of 16.70% for IGC;
•• 2 parts - each of 25% - for Clivia.
The change in the “Funding commitments received from credit institu-
tions” item is explained by the unused balance of 1,315 million euros Any refusal by Klépierre regarding the second IGC part and both Clivia
from the 2009 bilateral loan. parts will result in a penalty becoming payable to the Finiper group.

Shareholder agreements relating to Klécar France, Klécar Europe Sud, Partners’ agreement between Klépierre and Stichting Pensioenfonds
Solorec and Klécar Participations Italie ABP in respect of the Swedish company Nordica Holdco AB, and the
Norwegian companies Storm Holding Norway AS and Steen & Strøm
The shareholder agreements between Klépierre and CNP Assurances
and Ecureuil Vie were amended by a rider signed on December 30, The shares in Steen & Strøm were acquired via Storm Holding Norway
2004, the effect of which was to cancel the liquidity commitments given AS, a company registered in Norway and wholly-owned by Nordica
by Klépierre to its partners. Holdco AB, a company registered in Sweden.
The agreement provides the usual protections for non-controlling inter- This agreement was made on July 25, 2008 and an amendment made
ests: pre-emption right, joint exit right and the decision-making process on October 7, 2008. It includes the usual provisions to protect non-
applying to investment or divestment. Each agreement contains 2 addi- controlling interests: qualified majority voting for certain decisions, pur-
tional clauses: chase option in the event of deadlock and joint exit rights, as well as
•• one in favor of Klépierre: an obligation for the non-controlling sharehold- the following provisions:
ers to exit at the request of Klépierre in the event of Klécar assets being •• a one-year inalienability period applied to Steen & Strøm shares from
sold to a third party; the date of acquisition;
•• the other in favor of the non-controlling shareholders: a process enabling •• each party has a right of first offer on any shares which the other party
wishes to transfer to a third party, subject to the proviso that where

216 | Klépierre – 2010 Annual report

 shares are transferred by one party (other than Klépierre or one of its 8. Other disclosures
affiliates) to a Klépierre competitor (as defined in the agreement), the
shares concerned will be subject to a right of first refusal and not a right 8.1. Automatic cash centralization
of first offer;
•• from the sixth year following acquisition, either party may request a On November 30, 2000, Klépierre SA joined the cash centralization
meeting of shareholders to approve, subject to a two-thirds majority, the scheme managed by Klépierre Finance SAS.
disposal of all the shares or assets of Steen & Strøm, or a market flota- At December 31, 2010, Klépierre SA owed 166.4 million euros to
tion of the Company. Klépierre Finance SAS.

Ségécé counter guarantee 8.2. Employees

Klépierre has an agreement with its subsidiary company Ségécé under The Company has no employees. The Company is managed and admin-
which the latter is granted a global mandate to identify new investment istered by Ségécé SCS.
projects. Under this agreement, Klépierre SA guarantees 75% of the
expenses involved in these development projects and stocked by 8.3. Loans and guarantees granted
SCS Ségécé until completion of the transaction. and set up for corporate officers
and Supervisory Board members
7. Items concerning related companies
None.
Item Amounts
Advances and pre-payments on fixed assets 8.4. Compensation paid to Supervisory Board members
Net equity investments 4 191 269
Loans to subsidiaries and related companies 2 721 392 Director’s fees totaling 270 000,00 euros were paid in respect of the
Loans 130 719 2010 fiscal year.
Advances and pre-payments to suppliers (current asset) Director’s fees totaling 212 432,79 euros were paid to the Chairman of
Trade accounts and notes receivable 304 the Supervisory Board in respect of the 2010 fiscal year.
Other receivables 41
Accruals 8.5. Post-balance sheet date events
Subscribed capital called but not paid
Convertible bonds On November 30, 2010, Klépierre SA resolved to instigate simplified
Other bonds 204 308 dissolution without liquidation with retrospective effect from January 1,
Loans and borrowings from credit institutions 1 305 924 2011 of Foncière Saint-Germain SNC.
Other loans and borrowings 538 266 On January 20, 2011, Klépierre increased by 50 million euros the private
Advances and pre-payments received bond placement maturing April 2020, issued in April 2010, taking its
Trade and other payables 1 479 total amount to 250 million euros.
Other liabilities 5
Operating revenue 1 429 9. Consolidation information
Operating expenses 6 066
Financial income 198 711 The Klépierre corporate financial statements are fully consolidated by
Financial expenses 254 917 Klépierre SA, which are themselves included in the financial statements
In thousands of euros of BNP Paribas.

On the basis of the position at December 31, 2010, the BNP Paribas

share of bank loans totaled 2,600 million euros, of which 1,285 million
euros had been used. This lending compares with the total authorized
amount of 3,100 million euros, of which 1,785 million euros have been
used. These amounts do not include the 500 million euros represented
by the backup line of commercial paper (not drawn down) in which BNP
Paribas has an interest of 500 million euros.

Klépierre – 2010 Annual report | 217

 Corporate
financial statements
at December 31, 2010

4. Statutory auditors’ report on the corporate financial statements

Year ended December 31, 2010
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speak-
ing users. The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This
information is presented below the opinion on the Company financial statements and includes an explanatory paragraph discussing the auditors’
assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit
opinion on the Company financial statements taken as a whole and not to provide separate assurance on individual account captions or on infor-
mation taken outside of the Company financial statements. This report also includes information relating to the specific verification of information
given in the management report and in the documents addressed to shareholders. This report should be read in conjunction with, and construed
in accordance with, French law and professional auditing standards applicable in France.

To the Shareholders,

In compliance with the assignment entrusted to us by your annual gen- Our assessment of these valuations is based on the process implemented
eral meeting, we hereby report to you, for the year ended December 31, by your company to determine the value of equity investments. Our pro-
2010, on: cedures notably consisted in assessing, based on expert valuations, the
•• the audit of the accompanying financial statements of Klépierre; financial information used by your company to determine the value of the
•• the justification of our assessments; buildings owned by your subsidiaries and by your management’s entities.
•• the specific verifications and disclosures required by law. These assessments were made as part of our audit of the financial
These financial statements have been approved by the Board of statements taken as a whole, and therefore contributed to the opinion
Directors. Our role is to express an opinion on these financial statements we formed which is expressed in the first part of this report.
based on our audit.
III. Specific procedures and discosures
I. Opinion on the financial statements
We have also performed, in accordance with professional standards
We conducted our audit in accordance with professional standards applicable in France, the specific verifications required by French law.
applicable in France; those standards require that we plan and perform We have no matters to report as to the fair presentation and the con-
the audit to obtain reasonable assurance about whether the financial sistency with the financial statements of the information given in the
statements are free of material misstatement. An audit involves perform- management report and in the documents addressed to shareholders
ing procedures, using sampling techniques or other methods of selec- with respect to the financial position and the financial statements.
tion, to obtain audit evidence about the amounts and disclosures in the Concerning the information given in accordance with the requirements
financial statements. An audit also includes evaluating the appropriate- of Article L. 225-102-1 of the French Commercial Code (Code du com-
ness of accounting policies used and the reasonableness of accounting merce) relating to remuneration and benefits received by the directors
estimates made, as well as the overall presentation of the financial state- and any other commitments made in their favor, we have verified its
ments. We believe that the audit evidence we have obtained is sufficient consistency with the financial statements, or with the underlying
and appropriate to provide a basis for our audit opinion. information used to prepare these financial statements and, where
In our opinion, the financial statements give a true and fair view of the applicable, with the information obtained by your Company from
assets and the liabilities and of the financial position of the Company as companies controlling your Company or controlled by it. Based on this
at December 31, 2010 and of the results of its operations for the year work, we attest the accuracy and fair presentation of this information.
then ended in accordance with French accounting principles. In accordance with French law, we have verified that the required infor-
mation concerning the purchase of investments and controlling interests
II. Justification of our assessments and the identity of the shareholders and holders of the voting rights has
been property disclosed in the management report.
In accordance with the requirements of article L. 823-9 of the French
Commercial Code (Code du commerce) relating to the justification of Signed in Courbevoie and Neuilly-sur-Seine, February 21, 2011
our assessments, we bring to your attention the following matters:
•• as indicated in Note 2.2.3. to the financial statements, real estate assets The statutory auditors
are appraised by independent experts to estimate impairments. Our
procedures consisted notably in examining the valuation methodology French original signed by
used by the experts to ensure ourselves that the impairments were made
based on external expert appraisals; Mazars Deloitte & Associés
•• equity investments recorded under assets on your company’s balance Guillaume Potel Pascal Colin
sheet are valued as described in Note 2.2.4. to the financial statements. Julien Marin-Pache Laure Silvestre-Siaz

218 | Klépierre – 2010 Annual report

Information
on the Company
and the capital
220 1. General information on the Company
23 2.
2 General information regarding share capital
226 3. Breakdown of share capital and voting rights
229 4. List of contracts and agreements

Klépierre – 2010 Annual report | 219

 Information on the Company
and the capital
1. General information also the year in which Klépierre opted to adopt the French tax status of
on the Company a Société d’investissements immobiliers cotée or SIIC;
•• in 2004, the Group continued to grow with the addition of 6 centers in
1.1. Background France, Italy and Spain, and also gained a strategic position in Hungary
with the purchase of 12 shopping centers and the acquisition of a 50%
Klepierre was formed at the end of 1990 from the demerger of Locabail- holding in local management company Plaza Centers Management
Immobilier, whose portfolio of operating leases it retained. Since then, through its subsidiary Ségécé. Ségécé strengthened its European man-
Klépierre has focused on its two core businesses: the ownership and agement network with the formation of Ségécé Hellas in Greece and the
management of shopping centers in France and continental Europe, acquisition of 100% of Centros Shopping Gestion in Spain;
and premium office buildings in Paris and the Paris Region. •• in 2005, Klépierre acquired 9 shopping malls, including 4 in Poland. This
At the end of 1998, Klepierre made the strategic decision to become a was a new country for the Group, following the agreement signed with
major player in the creation and development of new retail sites in con- Plaza Centers Europe at the end of July. The deal also included the
tinental Europe, and made its first acquisition in Italy. Klépierre develops acquisition by Ségécé of 100% of the subsidiary responsible for manag-
its French projects through its subsidiary company Ségécé. ing these Polish centers, and assumed total control of PCM Hungary by
The Group’s principal shareholder at this time was Compagnie Bancaire, acquiring the remaining 50% holding in this company; Klépierre also
which held a 51% stake. The merger of Compagnie Bancaire with made its first investment in Belgium with the L’esplanade shopping cen-
Paribas in May 1998 provided Klépierre with the opportunity to create ter in Louvain-la-Neuve;
a number of business combinations, including the inward merger of •• in 2006, Klépierre continued its shopping center development program
Compagnie Foncière and the contribution of a 100% equity holding in in 7 of its 10 operating countries, and increased integration of the now
Foncière Chaptal. These acquisitions radically increased the size of the wholly-owned management network in Italy and the Czech Republic.
Company and strengthened its position in its core investment The Company also embarked on a new route to growth by outsourcing
sectors. its major retail brand properties to its subsidiary company Klémurs,
Since then, Klépierre has added continually to its portfolio of shopping which floated on the Paris Stock Exchange in December 2006. At the
centers and increased its presence in continental Europe through part- end of 2006, Klémurs acquired 128 Buffalo Grill restaurant properties in
nerships and ad hoc acquisitions: France and signed an important partnership agreement with Buffalo Grill
•• on July 17, 2000, Klépierre signed a major agreement with the Carrefour for the future;
group for the acquisition of 160 shopping malls adjoining this leading •• in 2007, Klépierre invested more than 1 billion euros, chiefly in shopping
retailer’s hypermarkets. The agreement also included management and centers in France, Hungary, Poland and Portugal. Klépierre also gained
development partnerships. In the space of four years, 151 shopping full ownership of Ségécé by acquiring the non-controlling interests held
malls were acquired, mainly in France and Spain. The second part of the by BNP Paribas (15%) and AXA REIM (10%);
Carrefour agreement (consisting of a priority right on all new sites devel- •• the main event of 2008 was the acquisition of a 56.1% equity stake in
oped by Carrefour in continental Europe) was implemented for the first Scandinavia’s leading real estate company Steen & Strøm. The remain-
time at the end of 2001 for 5 new Spanish malls and in 2002 for the ing 43.9% is held by ABP Pension Fund. Klépierre was now operating
acquisition of the Group’s first mall in Portugal; in 13 countries in continental Europe. During the year, the Company
•• in 2002, Klépierre strengthened its position in Italy with the acquisition acquired newly-constructed centers in France, Italy and the Czech
of 11 Carrefour malls and the formation of the first Italian shopping center Republic, and inaugurated 12 new facilities, including new centers and
management company (PSG) in partnership with Finim. Klépierre also retail parks and extensions to existing sites;
signed a major agreement with the Finiper retail group for the acquisition •• in 2009, Klépierre continued to grow (opening new extension and
of a strategic 40% stake in IGC (owner of 9 Finiper malls), as well as a upgrading projects in France, Norway, Sweden and Italy), at the same
partnership agreement covering the joint development of new shopping time as stepping up its asset rotation policy with sales totaling nearly
centers; 400 million euros. The majority of these sales involved office buildings
•• in 2003, Klépierre consolidated its shopping center sector positions in and minority stakes in major shopping centers and smaller shopping
France, Spain, Italy, Greece and Portugal with the acquisition of a further malls;
28 centers. Klépierre also made its first investment in the Czech Republic •• in 2010, several extension and renovation projects on existing centers
(the Novy Smichov mall in Prague). It extended its network of manage- were opened in France (Arcades in the Paris region), Italy (Pescara Nord),
ment subsidiaries with the formation of Sogecaec in Portugal. 2003 was Sweden (Sollentuna, Hageby) and Norway (Gulskogen). Klépierre also

220 | Klépierre – 2010 Annual report

 opened the Corvin shopping center (Budapest, Hungary). The Group 1.7. Tax status
laid the foundation stone of the new Emporia shopping center (Malmö,
Sweden) and continued to invest in large shopping center projects Klépierre has opted for the tax status of Société d’investissements
(Le Millénaire in Aubervilliers or Saint-Lazare train station in Paris). The immobiliers cotée * or SIIC under the terms of article 208-C of the
financial structure of the Group has also been strengthened through French General Tax Code. As such, it is exempt from corporate income
disposals (essentially concerning office buildings), the payment of the tax on:
dividend in shares and the successful bond issue for 900 million euros. •• income from rents, on condition that 85% of these profits are distributed
to shareholders before the end of the fiscal year following the year in
At December 31, 2010, Klépierre owned 273 shopping centers in con- which the profits were earned;
tinental Europe and managed 356. •• capital gains from the sale of buildings, equity interests in real estate
partnerships (sociétés de personnes) and whose purpose is identical to
1.2. Company name that of an SIIC or in subsidiaries that have opted for the new tax status,
provided that 50% of these capital gains are distributed to shareholders
Klépierre before the end of the second financial year after that in which the gains
were made;
1.3. Paris Trade and Companies Register •• dividends received from subsidiary companies which have opted for SIIC
status where these dividends arise as a result of profits and/or capital
SIREN: 780 152 914 gains that are exempt from tax under the SIIC arrangements, subject to
SIRET: 780 152 914 00211 the proviso that they are distributed during the fiscal year following the
NAF/APE: 6820B year in which they were granted.

1.4. Term of the Company 1.8. Legal proceedings and arbitration

The Company was registered as a société anonyme à Conseil No state or legal proceeding or arbitration of which the Company is
d’administration (French corporation governed by a Board of Directors) aware to date, either pending or threatened, has had a material impact
on October 4, 1968. Its term was set at ninety-nine years, expiring on on the financial position or profitability of the Company and/or Group in
October 3, 2067. the past twelve months, or is likely to do so.

1.5. Legal form 1.9. Other disclosures

Klépierre is a French corporation with a 2-tier management structure Corporate purpose
governed by an Executive Board and a Supervisory Board. (article 2 of the bylaws)
It is governed by the legal provisions applicable to sociétés anonymes,
in particular articles L. 225-57 to L. 225-93 of the French Commercial The Company’s purpose is:
Code and by its own bylaws. •• to purchase all land, real estate rights or buildings in France or abroad
and all property and rights which could either be accessory or annexed
1.6. Registered office to the said buildings;
•• to construct buildings and perform all operations directly or indirectly
21, avenue Kléber – 75116 Paris related to the construction of these buildings;
Tel.: +33 1 40 67 57 40 •• to operate and turn to account these premises by renting or otherwise;
•• to enter into all lease agreements for premises or buildings in France or
abroad;
•• to acquire direct or indirect interests in the persons indicated in article 8
and in paragraphs 1, 2 and 3 of article 206 of the French General Tax
Code and, more generally, to acquire interests in all companies whose
purpose is to operate rental properties;
•• incidentally, to acquire interests in any Company or enterprise engaged
in any activities whatsoever in the real estate sector;
•• and more generally, to engage in all types of civil, commercial, financial,
investment and real estate operations directly related to the abovemen-
tioned purpose or in the furtherance thereof, in particular, borrowing and
the creation of any related guarantees or pledges.

Klépierre – 2010 Annual report | 221

 Information
on the Company
and the capital

Ownership and transfer of shares receive all voting forms at least 3 days before the meeting. The deci-
(article 7 of the bylaws) sions of ordinary and extraordinary general meetings are only valid if
quorum requirements are met. The quorum is calculated in relation to
Fully paid-up shares are in registered or bearer form, at the sharehold- the total number of existing shares, subject to exceptions provided for
er’s discretion. by law.
Shares are registered in an account in accordance with the statutory Subject to the applicable legal restrictions, shareholders attending any
and regulatory provisions in force. meeting will have the same number of votes as shares owned or rep-
Shares may be sold or transferred freely in accordance with applicable resented, with no maximum limit. However, holders of fully paid-up reg-
legislation and regulations istered shares (or their proxies) that have been registered in their name
Shares resulting from a capital increase can be traded as soon as the for at least two years (or holders of shares forming part of a share
capital increase has been completed. grouping that meets the same conditions) have two votes per share at
ordinary and extraordinary general meetings of shareholders. Any share
Voting rights converted to a bearer share or transferred to other ownership loses this
(article 8 of the bylaws) double voting right. However, shares transferred as a result of inheri-
tance, divorce settlements or lifetime gifts to a partner or relation entitled
Each share gives right to part ownership in the Company’s assets, to a to such inheritance will retain the double voting right. The double voting
share in profits and liquidation surplus in a proportion corresponding to right may be withdrawn by the Company in accordance with the relevant
the share capital it represents. legal provisions.
All new or existing shares, provided they are of the same class and the
same paid-up nominal value, are fully assimilated once they entitle hold- Fiscal year
ers to the same benefits; during the appropriation of any profit, and also (article 30 of the bylaws)
during the total or partial refund of their nominal capital, holders receive
the same net amount, and all the taxes and duties to which they may The fiscal year begins on January 1 and ends on December 31.
be subject are evenly divided among them.
Owners of shares are liable only up to the limit of the nominal amount Distribution of profits – Reserves
of the shares they own. (article 31 of the bylaws)

General meetings of shareholders At least 5% of profits for the financial year, less any prior losses, are set
(articles 25 to 29 of the bylaws) aside to establish the statutory reserve fund, until such fund equals
one-tenth of the share capital.
Depending on the nature of the decisions to be taken, shareholders The balance and any retained earnings together constitute distributable
meet in either an ordinary or extraordinary general meeting of profit, from which is deducted any amount that the general meeting of
shareholders. shareholders, acting on the recommendation of the Executive Board,
Meetings are convened by the Executive or Supervisory Board, or by and subject to the approval of the Supervisory Board, may decide to
the persons designated by the French Commercial Code. They deliber- assign to one or more discretionary, ordinary or extraordinary funds,
ate in accordance with applicable legal and regulatory provisions. with or without special appropriation, or to carry forward as retained
Meetings take place either at the headquarters or at another venue earnings.
specified in the notice. The balance is apportioned among the shares.
In accordance with article R. 225-85-I of the French Commercial Code, Any shareholder other than a physical person:
to attend general meetings, shareholders must have registered their (i) which directly or indirectly holds at least 10% of rights to dividends
securities either in the accounts of registered securities kept by the in the Company, and
Company or in the accounts of bearer securities through an authorized (ii) whose own position or that of its shareholders which directly or
intermediary, within the deadlines and according to the terms set out indirectly hold 10% or more of its rights to dividends renders the
by applicable law. In the case of bearer securities, the registering of the Company liable for the 20% levy stipulated in article 208 C II ter of
securities is acknowledged by a certificate of participation issued by the the French General Tax Code (the “Levy”) (the said shareholder is
authorized intermediary. Shareholders are represented at meetings in called a “Taxpaying shareholder”),
accordance with the legislation and decrees in force. will owe the Company a sum equal to the amount of the Levy owed by
the Company at the time of payment.
The same applies for information to be provided or sent to shareholders.
Shareholders may vote at all meetings by correspondence under the
conditions specified by legal provisions. To be valid, the Company must

222 | Klépierre – 2010 Annual report

If the Company directly or indirectly holds 10% or more of one or more 2. General information regarding
Sociétés d’investissements immobiliers cotées mentioned in article 208 share capital
C of the French General Tax Code (a “Daughter SIIC”), the Taxpaying
Shareholder will also owe the Company, when a dividend payment is 2.1. Share capital – Type of shares
made, a sum equal to the difference (the “Difference”) between (i) the
amount which would have been paid to the Company by one or more At December 31, 2010, share capital totaled 265,507,536.00 euros,
Daughter SIICs if the said Daughter SIIC(s) had not been liable for the divided into 189,648,240 fully paid-up shares each with a par value of
Levy because of the Taxpaying Shareholder multiplied by the percent- 1.40 euros.
age of the rights to dividends held by the shareholders other than the In accordance with article 28 of the bylaws, shares may carry single or
Taxpaying Shareholder and (ii) the amount actually paid by the said double voting rights (Decision of the ordinary and extraordinary general
Daughter SIIC(s) multiplied by the percentage of the rights to dividends meeting of shareholders held on July 21, 1998).
held by the shareholders other than the Taxpaying Shareholder, so that They are in registered or bearer form, at the shareholder’s discretion.
the other shareholders are not liable to pay any of the Levy paid by any Share capital may be modified under the conditions provided by law.
of the SIICs in the chain of interests because of the Taxpaying
Shareholder. Shareholders other than Taxpaying Shareholders will be
creditors of the Company for an amount equal to the Difference, in
proportion to their dividend rights.
If there is more than one Taxpaying Shareholder, each Taxpaying
Shareholder will owe the Company the portion of the Levy owed by the
Company which its direct or indirect interest generates. The capacity of
Taxpaying Shareholder is assessed on the dividend payment date.
Subject to the information supplied pursuant to the matters set out on
page 227 of this registration document, any shareholder other than a
physical person, which directly or indirectly holds at least 10% of the
Company’s capital, will be presumed to be a Taxpaying Shareholder.

Any payment to a Taxpaying Shareholder is made by an entry in this

shareholder’s individual account (without generating interest); the
chargeback from the account occurs within five business days of the
entry after the sums owed by the Taxpaying Shareholder to the
Company have been set off under the above provisions.
The general meeting can grant each shareholder an option between
payment of all or part of a dividend or interim dividend in cash or shares.
If the payment is in shares, the Taxpaying Shareholder will receive a
portion in shares (no odd lots will be created) and the other portion in
cash (paid by entry in the individual current account) so the set off
mechanism described above can apply to the portion of the dividend
entered in the individual account.
Except in the event of a share capital reduction, no distribution can be
made to shareholders if shareholders’ equity is, or would be as a result
of the distribution, less than the amount of the share capital plus the
reserves that cannot be distributed under the law or the bylaws.

Klépierre – 2010 Annual report | 223

 Information
on the Company
and the capital

2.2. Delegations and authorizations granted to the Klépierre Executive Board

By virtue of the resolutions approved by the general meetings of shareholders held on April 9, 2009 and April 8, 2010, the Executive Board was
granted the following delegations or authorizations:

Delegations or authorizations granted by the general meeting of shareholders of April 9, 2009

Purpose of the resolution Maximum amount Duration Utilizations
Authorization for the Company to buy back its own shares (1) Maximum program amount: 664,857,720 euros 18 months (2)

Maximum purchase price: from April 9, 2009 onwards

40 euros for a share with a par value of 1.40 euro (11th resolution)
Authorization to reduce share capital by canceling shares (1) 10% of capital in a 24-month period 26 months None
from April 9, 2009 onwards
(12th resolution)
Capital increase with preservation of preferential rights via issue of 60 million and 1.2 billion euros for negotiable debt securities 26 months None
shares or securities conferring rights to receive shares or securities that from April 9, 2009 onwards
confer entitlement to receive allocations of negotiable debt securities (13th resolution)
Capital increase with cancellation of preferential rights by issue of shares 60 million and 1.2 billion euros for negotiable debt securities 26 months None
or securities conferring rights to receive shares or securities that confer from April 9, 2009 onwards
entitlement to receive allocations of negotiable debt securities (14th resolution)
Determination of issue price for shares, within the limit of 10% The sum reverting or which is due to revert to the Company for each of 26 months None
of capital per year, within the framework of a share capital increase – the shares, after taking into account, in the event of the issue of share from April 9, 2009 onwards
without preferential rights warrants, the issue price of the said warrants, must at least be equal to (15th resolution)
85% of the average weighted share price for the last three market
trading days prior to the date on which the issue conditions were set
Increase in the number of securities to be issued in the event of a share At the same price as that chosen for the initial issue, within the periods 26 months None
capital increase with or without preferential subscription rights and limits specified by applicable legislation at the date of the issue (3) from April 9, 2009 onwards
(16th resolution)
Capital increase by non-rights issue of shares or securities conferring Up to 10% of share capital 26 months None
rights to receive shares to fund contributions in kind granted from April 9, 2009 onwards
to the Company in the form of shares or securities conferring rights (17th resolution)
to receive shares
Capital increase by incorporation of reserves, profits or issue, 100 million euros 26 months None
merger or contribution premiums from April 9, 2009 onwards
(18th resolution)
Authorization to grant existing or future shares freely to corporate Maximum amount on the day authorization was granted 26 months None
officers and employees on a non-rights basis to the Executive Board: 0.5% of share capital (4) from April 9, 2009 onwards
(20th resolution)
Authorization to grant share purchase options to employees and Maximum amount on the day authorization was granted 38 months None
corporate officers to the Executive Board: 1% of the share capital from April 9, 2009 onwards
(21st resolution)

Maximum nominal amount of immediate or future share capital increases likely to be completed as a result of the authorizations granted  
to the Executive Board as shown above:
100 million euros (5) (22nd resolution)
Maximum nominal amount of investment securities conferring a right to share capital:
1.2 billion euros (22nd resolution)

Delegations or authorizations granted by the general meeting of shareholders of April 8, 2010

Purpose of the resolution Maximum amount Duration Utilizations
Authorization for the Company to buy back its own shares Maximum program amount: 818,874,715 euros 18 months (2)

Maximum purchase price: from April 8, 2010 onwards

45 euros for a share with a par value of 1.40 euro (12th resolution)
Authorization to reduce share capital by canceling shares 10% of capital in a 24-month period 26 months None
from April 8, 2010 onwards
(13th resolution)
(1) These authorizations expired on April 10, 2010.
(2) Share buyback program developments are shown on page 99.
(3) To date, within thirty days of the end of the subscription period and within the limit of 15% of the initial issue.
(4) Assignment of total number of free shares allocated of the maximum amount of share options, i.e. 1%, allocated by use of the 21st resolution.
(5)This nominal amount may be supplemented, where appropriate, by the nominal value of the shares to be issued in order to protect the rights of holders of securities conferring entitlement to shares.

224 | Klépierre – 2010 Annual report

2.3. Dividends
The dividends distributed for the last five financial years are as follows:

Year of distribution 2006 2007 2008 2009 2010

Number of shares 46 164 229 46 164 229 138 492 687 (1) 166 214 431 181 972 159
Net dividend e2.70 e3.20 e1.25 e1.25 e1.25
Net amount distributed e124 643 418.30 e147 725 532.80 e173 115 858.75 e207 768 038.75 e227 465 198.75
(1) After stock split of September 3, 2007.

During this period, there was no payment of interim dividends.

Unclaimed dividends must be paid to the State after a period of five
years has elapsed as of the payment date.
Shares owned by the Company do not confer entitlement to dividends.

2.4. Share capital and stock market

Shares

All the Company’s capital share stock is traded on the Euronext Paris™ market (compartment A).

2005 2006 2007 2008 2009 2010

Market capitalization (in millions of euros) (1) 3 661 6 601 4 843 2 909 5 166 5 120
Number of securities traded (daily average) (2) 205 308 336 090 466 896 593 923 522 897 363 862
Share price (2) (3)
High 27.55 46.45 53.40 40.27 30.80 30.06
Low 19.65 25.51 30.36 14.38 9.88 20.66
Last 25.71 46.37 34.01 17.50 28.39 27.00
(1) Last quotation of the year.
(2) Data restated of the stock split of September 3, 2007.
(3) Adjusted for the discount granted to holders of preferential rights for the rights issue of December 2, 2008.

Trading volume over the last eighteen months (in number of securities and amount of equity traded)
Shares/Months Highest price Lowest price Number of securities Amount of equity traded
2009
September 27.63 24.47 8 705 465 230.30
October 30.80 25.51 11 626 439 333.33
November 27.94 26.61 8 826 900 251.09
December 27.38 26.96 5 292 615 147.45
2010
January 29.45 26.56 5 492 107 154.50
February 28.07 25.63 6 110 514 164.42
March 29.25 27.37 6 220 438 177.63
April 30.06 25.60 6 711 824 187.47
May 26.00 20.66 13 600 587 313.12
June 24.43 20.99 14 051 099 317.93
July 25.99 21.75 8 297 472 198.76
August 25.39 23.52 6 534 813 159.42
September 28.85 24.06 6 923 357 185.63
October 29.67 27.65 7 634 903 218.81
November 28.27 24.20 7 044 247 185.54
December 27.47 24.30 5 255 064 139.59
2011
January 27.85 26.13 5 963 618 160.52
February 28.66 26.68 6 641 527 184.85
In millions of euros

Klépierre – 2010 Annual report | 225

 Information
on the Company
and the capital

2.5. Bonds
Issue date Due date Currency Outsanding nominal Coupon ISIN code
Eurobond issues listed on the Luxembourg stock market (stand-alone)
07/15/2004 07/15/2011 EUR 600 000 000 4.625% FR0010099226
03/16/2006 03/16/2016 EUR 689 000 000 4.250% FR0010301705
Eurobond issues listed on the Paris stock market (EMTN)(1)
04/07/2010 04/13/2017 EUR 700 000 000 4% FR0010885160
04/07/2010 04/14/2020 EUR 200 000 000 4.625% FR0010885582
01/20/2011 04/14/2020 EUR 50 000 000 4.625% FR0010997437
02/28/2011 04/13/2017 EUR 50 000 000 4% FR0011014927
(1) The EMTN (Euro Medium Term Notes) prospectus is available on Klépierre’s website (www.klepierre.com), under the “Finance” heading.

3. Breakdown of share capital and voting rights

3.1. Five-year change in share capital
Dates Nature of increase Number of shares issued Premium Share capital
08/31/2007 Share par value increased from 4 euros to 4.20 euros – – 193,889,761.80 euros
by capitalization of reserves
09/03/2007 Reduction in par value from 4.20 euros to 1.40 euro 92,328,458 – 193,889,761.80 euros
05/07/2008 Payment of dividend in the form of shares 3,976,826 125,429,092.04 euros 199,457,318.20 euros
12/02/2008 Cash capital increase 23,744,918 322,930,884.80 euros 232,700,203.40 euros
05/15/2009 Payment of dividend in the form of shares 15,757,718 153,322,693.44 euros 254,761,022.60 euros
05/14/2010 Payment of dividend in the form of shares 7,676,081 178,775,926.49 euros 265,507,536.00 euros

3.2. Changes in ownership interests and voting rights over last three years
Breakdown of share capital over last three years

Position at December 31, 2008 Position at December 31, 2009 Position at December 31, 2010

Number of % of capital % of voting Number of % of capital % of voting Number of % of capital % of voting
shares rights shares rights shares rights
BNP Paribas Group 86,421,728 51.99% 57.31% 91,895,934 50.50% 55.21% 96,548,371 50.91% 56.74%
Floating 76,013,624 45.73% 42.69% 87,195,302 47.92% 44.79% 90,219,711 47.57% 43.26%
Treasury stock 3,779,079 2.27% – 2,880,923 1.58% – 2,880,158 1.52% –

As far as the Company is aware there are no:

•• agreements whose implementation would lead to a change of control at a future date;
•• shareholder agreements.

Employee profit-sharing

There is no agreement providing for the involvement of employees in the Company’s capital.

226 | Klépierre – 2010 Annual report

3.3. Breakdown of share capital and voting rights
At December 31, 2010, the main holders of the Company’s 189,648,240 shares were:

Number of shares Total votes Voting shares % of capital % of voting

Single Double rights (1)
BNP Paribas SA 15,757,232 30,139,853 1,374,611 14,382,621 8.31% 14.36%
Compagnie Financière Ottomane 6,129,828 11,375,171 884,485 5,245,343 3.23% 5.42%
SETIC 3,378,673 6,269,830 487,516 2,891,157 1.78% 2.99%
UCB Bail 1,782 3,306 258 1,524 0.00% 0.00%
BNP Paribas group – Registered shares 25,267,515 47,788,160 2,746,870 22,520,645 13.32% 22.77%
OGDI 39,702,538 39,702,538 39,702,538 – 20.93% 18.92%
Foncière de la Compagnie Bancaire 31,571,783 31,571,783 31,571,783 – 16.65% 15.05%
Cardif 6,535 6,535 6,535 – 0.00% 0.00%
BNP Paribas group – Bearer shares 71,280,856 71,280,856 71,280,856 – 37.59% 33.97%
TOTAL BNP PARIBAS GROUP 96,548,371 119,069,016 74,027,726 22,520,645 50.91% 56.74%
Registered shares 697,539 1,252,251 142,827 554,712 0.37% 0.60%
Bearer shares 89,522,172 89,522,172 89,522,172 47.20% 42.66%
TOTAL OTHERS EXCLUDING TREASURY STOCK 90,219,711 90,774,423 89,664,999 554,712 47.57% 43.26%
TREASURY STOCK (1) 2,880,158 2,880,158 2,880,158 – 1.52% –
TOTAL 189,648,240 212,723,597 166,572,883 23,075,357 100% 100%
(1) The withdrawal of voting rights is applied to treasury stock in accordance with article L. 225-210 of the French Commercial Code.

The BNP Paribas group owned 50.91% of the Company’s capital and article 31 of the bylaws), in its threshold breach declaration. If the said
56.74% of its voting rights at December 31, 2010: Klépierre is therefore shareholder were to state that it was not a Taxpaying Shareholder, it
controlled by the BNP Paribas group within the meaning of article would have to prove this if requested by the Company and provide the
L. 233-3-I of the Commercial Code. Measures have been taken to Company with a legal opinion from an internationally reputed tax law
ensure that control is not exercised improperly, particularly as regards firm, on the Company’s request. Any shareholder other than a physical
the presence of directors on specialized committees of the Supervisory person who informs the Company that it has directly or indirectly
Board and the chairing of these committees by an independent exceeded the 10% threshold of the Company’s capital must quickly
director. notify the Company of any change in its taxation status causing it to
acquire or lose the status of Taxpaying Shareholder.
3.4. Breach of legal or statutory shareholding Unless such breaches have been declared in accordance with the con-
thresholds ditions set out above, the shares exceeding the statutory threshold that
should have been disclosed will be stripped of voting rights at general
According article 7 of the bylaws, any physical person or legal entity meetings of shareholders where the failure to disclose is brought to the
acting alone or in concert with others which acquires at least 2% of the attention of the meeting or where one or more shareholders together
Company’s share capital (or any multiple thereof) is required to inform holding 2% or more of the Company’s share capital ask the meeting to
the Company of this fact by means of registered letter with acknowl- do so. This withdrawal of voting rights will apply to all general meetings
edgement of receipt setting out the number of shares held, and to do of shareholders held within two years of the date on which the appropri-
so within five trading days of the date on which each threshold is ate declaration is duly made.
breached. All parties are also required to inform the Company, in accordance with
If the 10% threshold of the Company’s capital is directly or indirectly the procedures and time schedules set out above, if their shareholding
exceeded (i.e. ownership of 10% or more of the rights to the dividends falls below any of the thresholds referred to above.
paid by the Company), any shareholder other than a physical person
must state whether or not it is a Taxpaying Shareholder (as defined in

Klépierre – 2010 Annual report | 227

 Information
on the Company
and the capital

The Company was informed of several breaches of legal or statutory thresholds in 2010:

Breaches of the legal 5% threshold

Date Number Date Breach of threshold Breach of threshold

of breach of shares held of notification in capital (1) in voting rights
ALLIANCEBERNSTEIN LP January 11, 2010 9,099,822 01/15/2010 Above –
ALLIANCEBERNSTEIN LP January 27, 2010 9,093,770 01/29/2010 Below –
ALLIANCEBERNSTEIN LP February 3, 2010 9,101,070 02/08/2010 Above –
ALLIANCEBERNSTEIN LP February 18, 2010 9,097,041 02/19/2010 Below –
ALLIANCEBERNSTEIN LP February 22, 2010 9,108,641 02/24/2010 Above –
ALLIANCEBERNSTEIN LP February 24, 2010 9,049,541 02/26/2010 Below –
(1) Between January 1, 2010 and May 13, 2010: calculated based on 181,972,159 shares in issue and between May 14, 2010 and December 31, 2010: calculated based on 189,648,240 shares in issue.

Breaches of the statutory 2% threshold or any multiple of this percentage

Date Number Date Breach of threshold Breach of threshold
of breach of shares held of notification in capital (1) in voting rights
CRÉDIT AGRICOLE SA March 29, 2010 3,681,670 04/02/2010 Above –
CRÉDIT AGRICOLE SA April 20, 2010 3,526,393 04/23/2010 Below –
CRÉDIT AGRICOLE SA April 28, 2010 4,095,044 04/30/2010 Above Above
ALLIANCEBERNSTEIN LP May 5, 2010 7,152,590 05/05/2010 Below –
CRÉDIT AGRICOLE SA (2) May 6, 2010 3,598,270 05/11/2010 Below Below
BNP PARIBAS ASSET MANAGEMENT (3) June 21, 2010 4,295,999 06/23/2010 Above Above
BNP PARIBAS ASSET MANAGEMENT (3) June 24, 2010 4,098,596 06/25/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) June 28, 2010 4,141,878 06/29/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) June 30, 2010 4,081,248 07/01/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) July 16, 2010 4,251,250 07/20/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) July 29, 2010 4,017,251 08/02/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) August 9, 2010 4,174,455 08/10/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) August 19, 2010 4,126,137 08/20/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) August 20, 2010 4,139,533 08/23/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) August 31, 2010 4,105,977 09/01/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) September 7, 2010 4,152,352 09/10/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) September 13, 2010 4,125,092 09/14/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) September 15, 2010 4,149,968 09/17/2010 Unchanged Above
BNP PARIBAS ASSET MANAGEMENT (3) September 22, 2010 4,085,238 09/23/2010 Unchanged Below
BNP PARIBAS ASSET MANAGEMENT (3) September 24, 2010 4,195,987 09/27/2010 Unchanged Above
(1) Between January 1, 2010 and May 13, 2010: calculated based on 181,972,159 shares in issue and between May 14, 2010 and December 31, 2010: calculated based on 189,648,240 shares in issue.
(2) BNP Paribas Asset Management acting in its own name and on its own behalf, and on behalf of CamGestion, Fundquest France and entities of Fortis Investments incorporated into BNP Paribas Investment Partners
for FCPs, SICAVs, Mandates and FCPEs with delegation of voting rights.
(3) BNP Paribas Asset Management acting in its name and on behalf of itself and on behalf of CamGestion, Fundquest France and of the entities of Fortis Investments integrated in BNP Paribas Investment Partners
for the mutual funds, proxys and company mutual funds with proxy voting rights.

228 | Klépierre – 2010 Annual report

4. List of contracts and agreements Acquisition of a shopping center in Reims-Cernay

4.1 Summary of major contracts •• Signed on: July 31, 2009.

•• Parties: Klécar France SNC (buyer, Klépierre subsidiary) and RPFFB
Major investment and disposals contracts Hyper SAS (vendor, ING group).
•• Purpose: acquisition of units forming part of the shopping mall of a
2009 shopping center located in Reims-Cernay.
•• Transaction value: 7.7 million euros net to the vendor (additional
Disposal of a unit forming part of the Carrefour 500 thousand euros payable in the event of a future extension).
shopping center in Le Mans
Disposal of office building at 21, rue Dumont d’Urville in Paris
•• Signed on: June 5, 2009.
•• Parties: Klécar France SNC (vendor, Klépierre subsidiary) and Immobilière •• Signed on: September 30, 2009.
Carrefour (buyer). •• Parties: Klépierre (vendor) and SARL Commerz Real.
•• Purpose: disposal of a unit forming part of the Carrefour shopping center Spezialfondsgesellschaft Mbh (buyer).
in Le Mans. •• Purpose: disposal of office building at 21, rue Dumont d’Urville in Paris.
•• Transaction value: 11.4 million euros net to the vendor. •• Transaction value: 32 million euros inclusive (but excluding fees).

Disposal of a 26.30% equity stake in Société Disposal of Marché Saint-Germain shopping mall in Paris
des Centres d’Oc et d’Oil, and a 22.17% equity stake
in Société des Centres Toulousains •• Signed on: November 24, 2009.
•• Parties: SNC Foncière Saint-Germain (vendor, Klépierre subsidiary) and
•• Signed on: June 30, 2009. Société Paris Marché Saint-Germain (buyer, Banimmo Group company).
•• Parties: Klépierre (vendor) and Cardif Assurance Vie (buyer). •• Purpose: disposal of individual and co-ownership units forming part of
•• Purpose: disposal of a 26.30% equity stake in Société des Centres d’Oc the Marché Saint-Germain shopping mall in Paris.
et d’Oil (SCOO), and a 22.17% equity stake in Société des Centres •• Transaction value: 27.8 million euros net to the vendor.
Toulousains (SCT), as well as proportionate shares of shareholder loan
accounts held in these companies. Disposal of office building at 23/25, avenue Kléber in Paris
•• Amounts of the disposals following price adjustments at December 30,
2009: •• Signed on: November 30, 2009.
– from the sale of SCOO shares equivalent to 26.30% of share capital: •• Parties: Klépierre (vendor) and SARL Commerz Real
83.7 million euros excluding transaction fees; Investmentgesellschaft Mbh (buyer).
– from the sale of SCT shares equivalent to 22.17% of share capital: •• Purpose: disposal of office building at 23/25, avenue Kléber in Paris.
40.6 million euros excluding transaction fees. •• Transaction value: 117.6 million euros inclusive (excluding fees).

Modification of the partners’ agreement dated December 14, Disposal of shopping mall in Tours
2007 relating to IGC SpA
•• Signed on: December 16, 2009.
•• Signed on: July 23, 2009. •• Parties: SAS Cecoville (vendor/Klépierre subsidiary) and SCI Nation-
•• Parties: Finiper, Finiper Real Estate and Investment BV, IperMontebello, Tours (buyer).
Cedro 99, Klépierre, Klefin Italia and Klépierre Luxembourg. •• Purpose: disposal of individual units and an adjoining building.
•• Purpose: conditions governing the acquisition by the Klépierre Group of •• Transaction value: 39.4 million euros.
a 21.30% equity holding in IGC.
•• Modification of the conditions applying to the put granted to Finiper in 2010
respect of the balance of IGC shares with the effect of apportioning the
rights as follows: Disposal of a shopping mall at Flers-en-Escrebieux
a) a put on 12% of the shares (effective from October 15, 2010 to 2017) (Carrefour, Douai Flers)
for the Klepierre Group with no option to cancel;
b) a put on 16.70% of the shares (effective from October 15, 2011 to •• Signed on: June 4, 2010.
2017) for the Klépierre Group with option to cancel on payment of a •• Parties: Klécar France SNC (vendor) and Immobilière Carrefour (buyer).
penalty. •• Purpose: disposal of co-ownership units.
The conditions governing the Clivia agreement remain unchanged •• Transaction value: 30 million euros net to the vendor.
(splittable put with option to cancel on payment of a penalty)
•• Under the terms of these agreements, Klépierre Luxembourg acquired Signing of an equity holding in leasehold ECI (Val d’Europe)
a 21.30% equity holding in IGC on December 14, 2009 (transaction
value: e76.5M). •• Signed on: June 28, 2010.
•• Parties: Euro Disney Associés SCA (vendor) and SCI Valdebac (buyer).
•• Purpose: disposal of leasehold ECI real estate.
•• Transaction value: 30 million euros net to the vendor.

Klépierre – 2010 Annual report | 229

 Information
on the Company
and the capital

Acquisition under sale before completion contract Disposal of co-ownership units in an office building located
of Centre Jaude, car parks and cinema – Clermont-Ferrand at 3-5 bis, boulevard Diderot, Paris (12th arrondissement)

•• Acquisition date: June 30, 2010. •• Signed on: December 28, 2010.

•• Parties: SNC Carré Jaude (vendor) and SAS Carré Jaude 2 (buyer). •• Parties: Klépierre (vendor) and SCI 3-5 Bis Boulevard Diderot (buyer).
•• Purpose: acquisition of a shopping center, a private car park open to •• Purpose: disposal of co-ownership of an office building located
the public and a cinema. This deed of sale restates the sale and pur- at 3-5 bis bd Diderot, Paris.
chase promissory agreement dated June 5, 2008 (shopping center and •• Transaction value: 46.2 million euros net to the vendor.
private underground car park open to the public), and that of July 9,
2008 (cinema in a single deed of sale). Major financing contracts
•• Transaction value: 107.9 million euros net to the vendor.
2009
Acquisition of leisure center 1 Odysseum – Montpellier
Contractual overdraft agreement dated June 29, 2009:
•• Acquisition date: November 10, 2010.
•• Parties: SCI Odysseum 1 (vendor) and SCI Odysseum Place de France •• Purpose: overdraft facility capped at 2,400 million euros.
(buyers: 50% Klépierre/50% Icade). •• Lender: BNP Paribas.
•• Purpose: acquisition of a real estate complex intended for leisure and •• Repayment terms:
catering activities. This deed of sale restates the sale and purchase – 425 million euros on June 30, 2012;
promissory agreement date July 12, 2004. – 750 million euros on March 31, 2013;
•• Total transaction value: 8.9 million euros net to the vendor. – 425 million euros on June 30, 2013;
– 800 million euros on June 30, 2015.
Acquisition of leisure center 2 Odysseum – Montpellier •• To be drawn down in several tranches.
•• Interest: interest is the 3 month Euribor plus a margin to be calculated
•• Acquisition date: November 10, 2010. using a Loan-To-Value ratio table.
•• Parties: SERM (vendor) and SCI Odysseum Place de France (buyers: •• Non-utilization commissions where applicable.
50% Klépierre/50% Icade). •• Major financial covenants:
•• Purpose: acquisition of a real estate complex intended mainly for sports – a Loan-To-Value ratio limited at 65%;
and/or leisure activities. This deed of sale restates the sale and purchase – hedging of financial expenses with EBITDA of at least 1.8;
promissory agreement date February 18, 2008. – and a percentage of secured debts divided by the reappraised value
•• Total transaction value: maximum price of 34.6 million euros net to the of the property limited to 20%.
vendor.
2010
Disposal of 2 office buildings located at 23/25, rue de Marignan
– 38, rue Marbeuf, Paris (1) and 36 rue Marbeuf, Paris (2) Issuance program for Euro Medium Term Notes

•• Signed on: October 19, 2010. •• Purpose: determination of a legal framework to enable the prompt issu-
•• Parties: ance of a large variety of bonds.
(1) Klépierre (vendor) and Ireef Marignan Paris Propco (buyer). •• Maximum amount: 5 billion euros.
(2) Klépierre (vendor) and Ireef Marignan Paris Propco (buyer). •• Listing location: Paris.
•• Purpose: disposal of two office buildings. •• Law: French.
•• Transaction value: •• Brokers: BNP Paribas, ING, BoA Merrill Lynch, Crédit Mutuel, HSBC,
(1) 102.5 million euros “net to the vendor”. Natixis, Intesa, BBVA, Den Norske Bank.
(2) 32 million euros “net to the vendor”. •• Program rating: BBB+.
•• Documentation identical to current issues:
– secured debt/NAV ≤ 50%;
– bearer option to request early repayment in the event of a change of
control leading to a downgrading of the rating below BBB-.

2 fixed-rate issues in euros were carried out in 2010 as part of the pro-
gram (700 million euros for 7-year bonds and 200 million euros for
10-year bonds).

230 | Klépierre – 2010 Annual report

4.2. List of current and regulated agreements
4.2.1 List of agreements applying to current and past transactions conducted under standard conditions
with related companies
Party to the agreement Purpose Date
ANGOUMARS SNC Shareholder’s loan 01/23/2004
ANTIN VENDÔME SC Shareholder’s loan 06/25/1999
BARJAC VICTOR SNC Shareholder’s loan 07/01/2001
BASSIN NORD Shareholder’s loan 12/18/1998
BÈGLES ARCINS Shareholder’s loan 11/21/2008
BÈGLES PAPIN SCI Shareholder’s loan 11/05/2003; amendment 1: 10/28/2005
BESANÇON CHALEZEULE Shareholder’s loan 07/25/2007
CECOVILLE SAS Shareholder’s loan 03/24/2009
CENTRE JAUDE CLERMONT SAS Shareholder’s loan 10/09/2007
COMBAULT SCI Shareholder’s loan 06/09/2004
FONCIÈRE SAINT-GERMAIN Shareholder’s loan 12/05/2003
GALERIES DRANCEENNES Shareholder’s loan 10/03/2008
GÉNÉRAL LECLERC N° 11/11 BIS LEVALLOIS SNC Shareholder’s loan 01/01/2003
HOLDING GONDOMAR 1 Shareholder’s loan 02/23/2010; amendment 1: 04/22/2010;
amendment 2: 07/21/2010
KLÉ 1 Shareholder’s loan 12/31/2008
KLÉ PROJET 1 Shareholder’s loan 03/27/2007
KLÉBER LA PÉROUSE SNC Shareholder’s loan
KLÉCAR FRANCE SNC Shareholder’s loan 12/28/2000
KLÉCAR PARTICIPATIONS ITALIE Shareholder’s loan 06/26/2002
KLÉPIERRE CONSEIL Shareholder’s loan 07/08/2008
KLÉPIERRE CRÉTEIL SCI Shareholder’s loan 11/26/2008
KLÉPIERRE PARTICIPATIONS ET FINANCEMENTS Shareholder’s loan 07/31/2008
KLÉPIERRE TOURVILLE Shareholder’s loan 12/30/2008
KLÉTRANSACTIONS Shareholder’s loan 12/20/2004
LA PLAINE DU MOULIN A VENT SCI Shareholder’s loan 04/22/2005; amendment 1: 05/17/2005
LES JARDINS DES PRINCES SNC Shareholder’s loan 07/01/2001
SAS LP 7 Shareholder’s loan 10/07/2008
NANCY BONSECOURS SCI Shareholder’s loan 12/23/2009
ODYSSEUM PLACE DE FRANCE SCI Shareholder’s loan 03/16/2001
PASTEUR Shareholder’s loan 03/07/2008
PROGEST Shareholder’s loan 01/16/2008
ROCHE INVEST SCI Shareholder’s loan 09/10/2007
SÉGÉCÉ Shareholder’s loan 11/12/2007
SOAVAL Shareholder’s loan 07/09/2008
SOCIÉTÉ DES CENTRES D’OC ET D’OIL « SCOO » Shareholder’s loan
SODEVAC SNC Shareholder’s loan 28/03/1997
SOLOREC Shareholder’s loan 01/01/2003
SOVALY Shareholder’s loan 01/14/2000
ARCOL Intra-group loan agreement 04/04/2005; amendment 1: 01/01/2006;
amendment 2: 05/15/2006; amendment 3: 05/18/2010
BESTES Intra-group loan agreement 07/25/2006; amendment 1: 02/21/2007;
amendment 2: 07/26/2007; amendment 3: 09/19/2007;
amendment 4: 11/23/2007; amendment 5: 09/24/2008
CAPUCINE BV Intra-group loan agreement 10/12/2010
CINÉMAS DE L’ESPLANADE Intra-group loan agreement 04/01/2006; amendment 1: 01/01/2010
COIMBRA Intra-group loan agreement 03/14/2006; amendment 1: 04/01/2006;
amendment 2: 01/01/2007; amendment 3: 01/02/2007;
amendment 4: 01/01/2009; amendment 5: 01/01/2010
CORVIN RETAIL Intra-group loan agreement 04/03/2008; amendment 1: 02/09/2009;
amendment 2: 02/04/2010
CSPL 2002 Intra-group loan agreement 12/18/2009
DUNA PLAZA Intra-group loan agreement 12/18/2009
ENTERTAINMENT PLAZA Intra-group loan agreement 09/17/2007; amendment 1: 12/20/2009

Klépierre – 2010 Annual report | 231

 Information
on the Company
and the capital

Party to the agreement Purpose Date

FONCIÈRE DE LOUVAIN-LA-NEUVE Intra-group loan agreement 12/01/2004; amendment 1: 01/01/2006;
amendment 2: 04/01/2006; amendment 3: 01/01/2007;
amendment 4: 02/15/2007; amendment 5: 12/15/2008
amendment 6: 01/01/2010
GALERIA COMMERCIALE KLÉPIERRE Intra-group loan agreement 04/28/2005; amendment 1: 05/15/2006;
amendment 2: 01/01/2007; amendment 3: 01/01/2010
GREF KLÉPIERRE/HOLDING KLEGE SARL Overdraft facility agreement 12/19/2008; amendment 1: 03/09/2009;
amendment 2: 11/06/2009; amendment 3: 04/26/2010;
amendment 4: 08/05/2010; amendment 5: 11/17/2010
GYR 2002 Intra-group loan agreement 18/12/2009
HOLDING GONDOMAR 3 Intra-group loan agreement 09/01/2005; amendment 1: 12/11/2006;
amendment 2: 01/01/2007; amendment 3: 12/31/2009
HOLDING GONDOMAR 4 Intra-group loan agreement 12/05/2007
IGC Intra-group loan agreement 07/29/2009; amendment 1: 06/22/2010;
amendment 2: 11/04/2010 – 12/14/2009
KANIZSA 2002 Intra-group loan agreement 12/18/12/2009
KLÉCAR PARTICIPATIONS ITALIE Intra-group loan agreement 12/20/2004; amendment 1: 01/04/2005;
amendment 2: 03/14/2007; amendment 3: 04/28/2008;
amendment 4: 05/22/2008
KLEFIN ITALIA Intra-group loan agreement 12/01/2004 and 12/06/2005; amendment 1: 01/01/2006;
amendment 2: 05/23/2006; amendment 3: 01/01/2007;
amendment 4: 02/05/2008; amendment 5: 01/01/2009;
amendment 6: 01/01/2010; amendment 7: 12/05/2010
KLEMENTINE BV Intra-group loan agreement 11/27/2009
KLÉPIERRE CORVIN Intra-group loan agreement 07/30/2007 – 02/09/2009 – 12/18/2009
KLÉPIERRE CZ SRO Intra-group loan agreement 01/25/2006; amendment 1: 03/01/2006;
amendment 2: 05/15/2006; amendment 3: 01/01/2007;
amendment 4: 11/20/2007; amendment 5: 12/20/2009
KLÉPIERRE GALERIE KRAKOW Intra-group loan agreement 07/01/2010
KLÉPIERRE GALERIE POZNAN Intra-group loan agreement 07/01/2010
KLÉPIERRE KRAKOW Intra-group loan agreement 10/01/2010
KLÉPIERRE LARISSA Intra-group loan agreement 06/18/2007; amendment 1: 06/19/2007;
amendment 2: 12/30/2008; amendment 3: 01/01/2010
KLÉPIERRE LUBLIN Intra-group loan agreement 07/27/2007 – 12/23/2009
KLÉPIERRE LUXEMBOURG Intra-group loan agreement 06/11/2007; amendment 1: 06/21/2007;
amendment 2: 09/12/2007; amendment 3: 02/11/2008;
amendment 4: 04/28/2008; amendment 5: 05/30/2008;
amendment 6: 02/09/2009; amendment 7: 01/25/2010
KLÉPIERRE METEORES Intra-group loan agreement 07/31/2007; amendment 1: 02/11/2008;
(merged into Klépierre Luxembourg on 7/30/2010) amendment 2: 02/09/2009; amendment 3: 01/25/2010
KLÉPIERRE PLZEN Intra-group loan agreement 07/31/2008; amendment 1: 10/10/2008;
amendment 2: 12/21/2009
KLÉPIERRE POLOGNE Intra-group loan agreement 01/10/2010
KLÉPIERRE PORTUGAL Intra-group loan agreement 12/01/2004; amendment 1: 10/02/2006;
amendment 2: 01/01/2007; amendment 3: 02/21/2007;
amendment 4: 02/12/2008; amendment 5: 02/15/2009;
amendment 6: 07/29/2009; amendment 7: 01/01/2010
KLÉPIERRE POZNAN Intra-group loan agreement 10/01/2010
KLÉPIERRE RYBNIK Intra-group loan agreement 05/07/2007 – 05/09/2007 – 05/23/2007 – 06/20/2007 –
07/18/2007 – 07/27/2007 – 08/02/2007 – 08/06/2007 –
12/23/2009
KLÉPIERRE SADYBA Intra-group loan agreement 07/01/2010
KLÉPIERRE SOSNOWIEC Intra-group loan agreement 05/07/2007 – 05/09/2007 – 05/23/2007 – 06/28/2007 –
07/18/2007 – 07/27/2007 – 12/23/2009
KLÉPIERRE TRADING Intra-group loan agreement 03/05/2008
KLÉPIERRE VALLECAS Intra-group loan agreement 12/02/2004; amendment 1: 01/01/2006;
amendment 2: 05/15/2006; amendment 3: 01/01/2007;
amendment 4: 02/12/2008; amendment 5: 02/16/2009;
amendment 6: 12/01/2009

232 | Klépierre – 2010 Annual report

Party to the agreement Purpose Date
KLÉPIERRE VINAZA Intra-group loan agreement 12/01/2004; amendment 1: 05/15/2006;
amendment 2: 01/01/2007; amendment 3: 12/15/2008;
amendment 4: 01/01/09; amendment 5: 02/16/2009;
amendment 6: 01/01/2010
KLÉPIERRE WARSAW Intra-group loan agreement 10/01/2010
KPSVR 2002 Intra-group loan agreement 12/18/2009
KRAKOW PLAZA Intra-group loan agreement 03/06/2008
MISKOLC 2002 Intra-group loan agreement 12/18/2009
NORDICA HOLDCO AB Intra-group loan agreement 10/06/2008
NYIREGYHAZA PLAZA Intra-group loan agreement 12/18/2009
PILSEN PLAZA Intra-group loan agreement 07/31/2008; amendment 1: 10/22/2009;
amendment 2: 12/20/2009
PLACE DE L’ACCUEIL Intra-group loan agreement 04/01/2006; amendment 1: 01/01/2007;
amendment 2: 01/02/2007; amendment 3: 01/01/2009;
amendment 4: 02/16/2009; amendment 5: 01/01/2010
RUDA SLASKA PLAZA Intra-group loan agreement 07/01/2010
SZEGED 2002 Intra-group loan agreement 12/18/2009
SZOLNOK PLAZA Intra-group loan agreement 12/18/2009
UJ ALBA 2002 Intra-group loan agreement 12/18/2009
ZALAEGERSZEG PLAZA Intra-group loan agreement 12/18/2009
BNP PARIBAS/BÈGLES D’ARCINS Joint and several guarantee (Klépierre counter-guarantee) 06/30/2008
BNP PARIBAS/KLÉCAR FONCIER ESPAÑA Joint and several guarantees (Klépierre counter-guarantees) 02/17/2005
BNP PARIBAS/KLÉCAR FONCIER ESPAÑA Joint and several guarantees (Klépierre counter-guarantees) 06/17/2005
BNP PARIBAS/KLÉCAR FONCIER ESPAÑA Joint and several guarantees (Klépierre counter-guarantees) 07/25/2006
BNP PARIBAS/KLÉCAR FONCIER ESPAÑA Joint and several guarantees (Klépierre counter-guarantees) 06/15/2007
BNP PARIBAS Joint and several guarantee (Dumont lease) 01/01/2010
BNP PARIBAS Joint and several guarantee (town of Chaumont) 06/04/2010
KLÉPIERRE PARTICIPATIONS ET FINANCEMENTS Joint and several guarantee of 165,000,000 euros 12/22/2004
BNP PARIBAS/GROUPE KLÉPIERRE Bank accounts and securities accounts
BNP PARIBAS Loan agreement (135 million euros) 12/22/2004
BNP PARIBAS/KLÉPIERRE PARTICIPATIONS Loan agreement (165 million euros) 12/22/2004
ET FINANCEMENTS Counter-guarantees Klépierre
BNP PARIBAS SECURITIES SERVICES Management agreement for stock option plans July 2006
BNP PARIBAS/KLÉPIERRE FINANCE Cash centralization 06/29/2009
EXANE BNP PARIBAS Liquidity agreement 09/14/2005
BNP PARIBAS/KLÉPIERRE Bilateral loan (400 million euros) – 10/07/2008: amendment 1: 07/23/2009;
Transition to 200 million euros amendment 2: 04/27/2010
BNP PARIBAS/KLÉPIERRE Syndicated loan (maturing September 2014) 09/21/2007: amendment 1: 06/23/2009
BNP PARIBAS/KLÉPIERRE Bilateral loan (2,400 million euros) 06/29/2009
BNP PARIBAS/CORVIN RETAIL (ex Corvin Office) First demand guarantees (Klépierre counter-guarantees) 07/27/2007
BNP PARIBAS/KLÉPIERRE CORVIN First demand guarantees (Klépierre counter-guarantees) 07/27/2007
BNP PARIBAS/OPDF First demand guarantees (Klépierre counter-guarantee) 02/14/2007
BNP PARIBAS/SOAVAL First demand guarantees (Klépierre counter-guarantee) 07/08/2008
SÉGÉCÉ Company administration and asset management agreement 06/27/2008
SÉGÉCÉ Mandate to research, arrange, supervise and conduct Initial: 04/21/2004 and its amendment extension
transactions on behalf of Klépierre outside France of 07/29/2009
– amendment IGC transaction dated 01/25/2010
– amendment Vittuone transaction dated 01/25/2010
SÉGÉCÉ Mandate to research, arrange, supervise and conduct Initial: 04/21/2004 and its amendment extension
transactions on behalf of Klépierre in France of 07/29/2009
– amendment Auchy-les-Mines transaction dated 01/14/2010
– amendment Clermont-Ferrand transaction dated
09/29/2010
– amendment Val d’Europe transaction dated 11/08/2010
SÉGÉCÉ Mandate to research, arrange, supervise and conduct Mandate dated 12/16/2008
transactions on behalf of Klépierre in India
SÉGÉCÉ Rental management mandate for offices Initial: 04/01/2008
– amendment to management mandate of 01/14/2010
– amendment to management mandate of 03/18/2010

Klépierre – 2010 Annual report | 233

 Information
on the Company
and the capital

Party to the agreement Purpose Date

SÉGÉCÉ Assistance mandate comprising a non-exclusive sell mandate – Relating to the disposal of Marignan-Marbeuf offices
(Paris 8th)
– Relating to the disposal of Diderot offices (Paris 12th)
BNP PARIBAS (fixed-rate payer) Swaps 06/30/2004; 04/07/2010
BNP PARIBAS (variable-rate payer) Swaps 12/20/2004; 04/11/2005; 07/07/2005; 08/31/2005;
01/04/2006; 07/30/2007; 11/15/2007; 11/19/2007;
11/21/2007; 01/23/2008; 01/23/2008; 02/05/2008;
03/10/2008; 08/05/2008; 08/06/2008; 08/08/2008;
08/13/2008; 08/13/2008; 11/10/2008; 01/14/2009;
12/17/2009; 01/12/2010; 01/12/2010; 01/18/2010;
01/21/2010; 01/21/2010; 01/21/2010; 01/22/2010;
02/08/2010; 02/23/2010; 02/24/2010; 12/23/2010

4.2.2 List of previously-authorized regulated agreements remaining effective in 2010

Date of authorization Regulated agreement Parties to the agreement
given by the Date Purpose
Supervisory Board
May 26, 2004 July 9, 2004 Bond: subscription agreement BNP Paribas
May 26, 2004 July 15, 2004 Bond: fiscal agency agreement BNP Paribas Securities Services and BNP Paribas Securities
Services Luxembourg Branch
February 8, 2006 March 13, 2006 Bond: subscription agreement BNP Paribas, HSBC France and The Royal Bank of Scotland PLC
February 8, 2006 March 16, 2006 Bond: fiscal agency agreement BNP Paribas Securities Services and BNP Paribas
Securities Services Luxembourg Branch
July 25, 2008 October 17, 2008 Intra-group loan agreement SCA Klémurs
October 3, 2008 October 6, 2008 Intra-group loan granted as part of the Steen & Strøm transaction Nordica Holdco AB and APG Strategic Real Estate Pool NV assuming
the obligations and the rights of Stichting Pensioenfonds ABP
October 3, 2008 October 7, 2008 Intra-group loan granted as part of the Steen & Strøm transaction Storm Holding Norway AS and APG Strategic Real Estate Pool NV
assuming the obligations and the rights of Stichting Pensioenfonds ABP
June 5, 2009 June 15, 2009 Intra-group loan agreement Le Havre Lafayette and RPFFB Holding France SARL
June 5, 2009 June 15, 2009 Intra-group loan agreement Le Havre Vauban and RPFFB Holding France SARL
June 5, 2009 June 15, 2009 Share pledge Le Havre Lafayette, Le Havre Vauban, RPFFB Holding France SARL
and Westdeutsche Immobilienbank AG
June 5, 2009 June 29, 2009 Loan agreement BNP Paribas
June 15, 2009 June 29, 2009 Intra-group loan agreement SCA Klémurs
June 15, 2009 June 30, 2009 Agreement to sell shares in Société des Centres Toulousains Cardif Assurances Vie (subsidiary of BNP Paribas Assurances)
June 15, 2009 June 30, 2009 Agreement to sell shares in Société des Centres d’Oc et d’Oil Cardif Assurances Vie (subsidiary of BNP Paribas Assurances)

4.2.3 List of regulated agreements authorized in 2010

Date of authorization Regulated agreement Parties to the agreement
given by the Date Purpose
Supervisory Board
March 26, 2010 April 1, 2010 Investment contract BNP Paribas, Banca IMI S.p.A., Banco Bilbao Vizcaya Argentaria
SA, CM-CIC Securities, DnB NOR Bank ASA, HSBC Bank plc, ING
Belgium SA/NV, Merrill Lynch International, Natixis
March 26, 2010 April 1, 2010 Financial services agreement BNP Paribas Securities Services
June 18, 2010 June 30, 2010 Intra-group loan agreement SCA Klémurs
December 17, 2010 December 17, 2010 Agreement to acquire all stock in Ségécé Polska Sp.z.o.o. Ségécé and SAS LP 7
December 17, 2010 December 20, 2010 Agreement to acquire all shares in Ségécé Ceska Republika s.r.o. Ségécé
December 17, 2010 December 20, 2010 Agreement to acquire 15% of shares in Ségécé Slovensko s.r.o. Ségécé
December 17, 2010 December 17, 2010 Agreement to acquire all shares in Ségécé Hungary Management and Controlling Ldt Ségécé
December 17, 2010 December 17, 2010 Agreement to acquire all shares in Ségécé Portugal S.A. Ségécé
December 17, 2010 December 17, 2010 Agreement to acquire 99.95% of shares in Ségécé Hellas Real Estate Ségécé
Management A.E.
December 17, 2010 – Agreement to acquire all shares in Ségécé Espana S.L. Ségécé – agreement not concluded in 2010
December 17, 2010 December 22, 2010 Agreement to acquire all shares in Ségécé Italia S.r.l. Ségécé

234 | Klépierre – 2010 Annual report

General meeting
236 1. Report of the Supervisory Board to the combined
general meeting of shareholders
37
2 2. Report of the Chairman of the Supervisory Board
247 3. Statutory auditors’ report prepared in accordance with article
L. 225-235 of the French Commercial Code on the report
prepared by the Chairman of the Company’s Supervisory Board
248 4. Statutory auditors’ special report on regulated agreements
and commitments with third parties
251 5. Special report of the Executive Board to the general meeting
of shareholders concerning bonus issues of shares
(article L. 225-197-1 et seq of the French Commercial Code)
252 6. Special report of the Executive Board to the general meeting
of shareholders concerning transactions carried out pursuant
to the provisions of articles L. 225-177 to L. 225-186
of the French Commercial Code
253 7. Description of the share buyback program
254 8. Draft resolutions

Klépierre – 2010 Annual report | 235

 General meeting
1. Report of the Supervisory Board to the combined
general meeting of shareholders

Approval of financial statements

for the year ended December 31, 2010
Dear Shareholders,

Pursuant to the provisions of article L. 225-68 of the French Commercial

Code, we are required to make our observations concerning the
Executive Board report which has just been read to you as well as con-
cerning the corporate and consolidated financial statements for the year
ended December 31, 2010.

The Supervisory Board has been kept regularly up to date by the

Executive Board about the Group’s business and has carried out the
required audits and controls as part of its mission.

To do this, the Board called on the services of four special-purpose

committees: the Investment Committee, the Audit Committee, the
Selection and Compensation Committee and the Sustainable
Development Committee.

The Supervisory Board has no special observations to make concerning

the Executive Board’s report and the results of fiscal year 2010. It there-
fore invites you to approve the financial statements and the resolutions
proposed, with the exception of the nineteenth resolution.

The Supervisory Board wishes to thank the Executive Board and all
Company staff for their work and effort in 2010.

The Supervisory Board

236 | Klépierre – 2010 Annual report

2. Report of the Chairman of the Supervisory Board
Supervisory Board meeting of February 4, 2011 called to review the 2010 fiscal year
In accordance with article L. 225-68 of the French Commercial Code, •• the issue of securities of whatever nature, likely to adjust the share capital;
and in my capacity as Chairman of the Klépierre Supervisory Board, it is •• transactions listed below when the denomination of such transactions
my honor to present you with this report on the 2010 fiscal year, as exceeds 8 million euros or its equivalent value in any currency;
approved by the Supervisory Board at its meeting of February 4, 2011. a) accept and dispose of any equity holdings in all companies created
It contains information relating to: or to be created, except those Klépierre Group companies receiving
•• the composition of the Supervisory Board and the way in which its work or purchasing buildings belonging to the Klépierre Group,
is prepared and organized; b) acquire or dispose of any buildings in kind, except in the case of
•• the internal control and risk management procedures implemented by sale or transfer to a Klépierre Group company,
the Klépierre (1) Group; c) enter into all agreements and transactions and accept any com-
•• corporate governance; promise in the event of legal proceedings.
•• the methods governing the participation of shareholders in the general
meetings of shareholders; The Supervisory Board granted its Chairman the ability to authorize the
•• and the publication of information concerning issues potentially relevant Executive Board to complete the transactions referred to in paragraphs
to any public offering. a), b) and c) above, where the individual value of such transactions does
not exceed 46 million euros or its equivalent value in a foreign
The code of governance which Klépierre has chosen to adopt for the currency.
purposes of this report is the code of corporate governance for listed
companies in France, published in December 2008 and amended in The Chairman of the Supervisory Board and the Executive Board report
April 2010 by the French Association for Private Enterprise (Association to the Supervisory Board on the use of these delegations.
Française des Entreprises Privées or AFEP) and the French Enterprise
Movement (Mouvement des Entreprises de France or Medef). I) Composition of the Supervisory Board

The Company is a French corporation (Société anonyme) with an The Supervisory Board is composed of a minimum of three and a maxi-
Executive Board and supervisory board since July 21, 1998. This cor- mum of twelve members who are elected by the ordinary general meet-
porate form enables the Company’s management to be separated from ing of shareholders for a three-year term. Some Board members are
the control of this management which is exercised by the Supervisory replaced at each annual general meeting of shareholders, depending
Board (2). on the number in office, in order to ensure a turnover of members as
regularly as possible, with the Board changing in its entirety at the end
I. Preparation and organization of each three-year period.
of the supervisory board’s work
Each member of the Supervisory Board must hold at least sixty shares
The Supervisory Board is primarily responsible for the permanent over- throughout their term of office.
sight of the Company’s management by the Executive Board. For this
purpose, it may conduct any verifications or checks it sees fit at any The Supervisory Board appoints a Chairman and Vice-Chairman from its
time of the year, and may request any and all documents it believes members.
useful to the accomplishment of its mission.
During the 2010 fiscal year there were nine Supervisory Board members:
The Executive Board must submit a management report to the Michel Clair (Chairman), Vivien Lévy-Garboua (Vice-Chairman), Jérôme
Supervisory Board at least once every quarter, and must also submit Bédier, Bertrand de Feydeau, Dominique Hoenn, Bertrand Jacquillat,
the Company’s financial statements for audit and control. Bertrand Letamendia, Philippe Thel and Sarah Roussel who was replaced
by Dominique Aubernon from March 31, 2010. 11% of Board members
The Supervisory Board authorizes all transactions and agreements regu- are female (4). The renewal of mandates approved by the general meeting
lated by articles L. 225-68 paragraph 2 and L. 225-86 of the French of shareholders on April 8, 2010, did not affect the proportion of men and
Commercial Code. women on the Supervisory Board.
Information concerning the Supervisory Board members’ professional
In accordance with article 16 of the bylaws (3), it also authorizes: experience is available in the Governance section of this registration
•• transactions likely to affect the strategy of the Company and its Group, document and their mandates and responsibilities are listed in the
as well as changes to the financial structure and scope of activity; Corporate Governance section of this document.

(1) The Klépierre Group and its subsidiaries in France and elsewhere, including companies belonging to the Steen & Strøm group, and with the exception of the specific instances
described below, act in accordance with:
(2) AFEP/Medef code of corporate governance (point 3).
(3) AFEP/Medef code of corporate governance (point 4).
(4) AFEP/Medef code of corporate governance (point 6).

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Any member who has no relationship whatsoever with the Company, •• the annual authorization given to the Executive Board for granting guar-
its Group or its Management that could compromise his or her freedom antees, endorsements and sureties;
of judgment is considered as an independent member of the Supervisory •• regulated agreements.
Board. In accordance with the definition and criteria set out in the AFEP/
Medef code, four out of nine members of the Supervisory Board are The Supervisory Board has examined its composition, organization and
considered to be independent: Bertrand de Feydeau, Bertrand functioning. It carried out a review of the Supervisory Board’s and spe-
Jacquillat, Bertrand Letamendia and Jérôme Bédier (5). cial-purpose committees’ principal work and believes that this work
clearly demonstrates their ability to meet shareholders’ expectations. A
II) Meetings of the Supervisory Board formal evaluation will be carried out during 2011 (7).

The Supervisory Board meets as often as the interests of the Company require. The Supervisory Board’s work and that of the special-puspose commit-
tees is prepared and organized by their respective Chairmen.
A quorum of at least half the members of the Supervisory Board is required
in order to conduct business. The members may participate in the proceed- III) Organization and functioning of the special- 
ings of Supervisory Board meetings by means of videoconferencing or any purpose committees assisting the Supervisory Board
other means of telecommunication ensuring their clear identification and
effective participation. This condition will not apply to meetings held to verify To carry out its duties, the Supervisory Board has formed special-pur-
and check the annual and/or consolidated financial statements. pose committees (8). Working within the scope of its own area of exper-
tise, each committee brings forward proposals, recommendations and
Resolutions are adopted on the basis of a majority vote of those mem- advice as necessary, and reports on its work to the Supervisory Board.
bers present or represented.
Additional information concerning the missions and operation of these
In the event of a tied vote, the Chairman of the meeting will have the committees is given in the “Governance” chapter of the activity report.
casting vote. These committees are:

In accordance with the provisions of article L. 823-17 of the French a) The Investment Committee
Commercial Code, the Company’s statutory auditors will be invited to
attend meetings of the Supervisory Board called to inspect or approve This committee has a minimum of three, and a maximum of six, members
the annual and half-yearly financial statements. appointed by the Supervisory Committee from its members.

The Supervisory Board met twelve times during the 2010 fiscal year. During the 2010 fiscal year, the Investment Committee members were:
The attendance rate was 87.04% (6). Bertrand de Feydeau (Chairman of the Investment Committee), Jerome Bédier,
Michel Clair, Dominique Hoenn, Philippe Thel and Sarah Roussel, replaced by
The main items discussed at these meetings are listed below: Dominique Aubernon since April 8, 2010. Two members out of six (33.3%) are
•• the annual corporate and consolidated financial statements for 2010 considered independent: Bertrand de Feydeau and Jérôme Bédier.
and the management report on these statements;
•• the Executive Board’s quarterly management report; This committee’s role is to inspect the investment and/or disposal plans
•• the corporate and consolidated interim financial statements; submitted to it prior to their official authorization by the Supervisory Board.
•• the report of the Chairman of the Supervisory Board; To this end, it examines the property characteristics, as well as the com-
•• the replacement of members of the Supervisory Board; mercial, legal and financial aspects of proposed transactions. More specifi-
•• the replacement of the Vice-Chairman of the Supervisory Board; cally, it seeks to ensure that planned investments and divestments are in
•• the replacement of members of the Executive Board and the Chairman line with the investment strategy and criteria of the Klépierre Group. Before
of the Executive Board; issuing a favorable opinion, the Investment Committee may request any
•• the composition of the committees; additional information it deems useful, as well as recommend that any or
•• the operation of the Supervisory Board; all of the property, commercial, legal or financial aspects be modified.
•• the introduction of a stock options plan;
•• investments and disposals in France and abroad; It met ten times during the 2010 fiscal year, with an attendance rate of
•• funding transactions (notably the implementation of a Euro Medium Term 91.67% (9).
Notes program);

(5) AFEP/Medef code of corporate governance (points 7 & 8).

(6) AFEP/Medef code of corporate governance (point 10).
(7) AFEP/Medef code of corporate governance (point 9).
(8) AFEP/Medef code of corporate governance (point 13).
(9) AFEP/Medef code of corporate governance (point 10).

238 | Klépierre – 2010 Annual report

Work was undertaken on thirty five investment or disinvestment transac- c) The Selection and Compensation Committee (13)

tions. Nine of these transactions were completed or became the subject

of future commitments, and seventeen are either in progress or at the This committee has a minimum of two, and a maximum of five, mem-
negotiation stage. Nine transactions (including two major transactions) bers appointed by the Supervisory Committee from amongst its
were not concluded. members.

The most significant projects concerned: During the 2010 fiscal year, the committee members were: Bertrand
•• the Emporia center in Malmö, Sweden; Letamendia (Chairman of the Selection and Compensation Committee),
•• disposal of the Marignan-Marbeuf building in France; Bertrand de Feydeau, Dominique Hoenn and Vivien Levy-Garboua. Two
•• purchase of the land on which the Val d’Europe center is built, in France. of the four members (50%) are considered independent: Bertrand
Letamendia et Bertrand de Feydeau (14).
b) The Audit Committee (10)

This committee meets at least once per year to formulate recommenda-

This committee has a minimum of three, and a maximum of six, mem- tions for submission to the Board concerning the selection and com-
bers appointed by the Supervisory Board from its members. pensation of Executive Committee members, pensions and employee
benefits, benefits in kind, and stock option grants and plans.
During the 2010 year, the committee members were: Bertrand Jacquillat
(Chairman of the Audit Committee), Dominique Hoenn, Bertrand It met two times during the 2010 fiscal year, with an attendance rate of
Letamendia and Vivien Lévy-Garboua. Two of the four members (50%) 100% (15). Its key tasks included:
are considered independent: Bertrand Jacquillat and Bertrand •• the methods used to determine the variable portion of compensation of
Letamendia (11). the members of the Executive Committee in 2010. The overall compen-
sation figure is made up from three components:
This committee meets at least twice per year to evaluate major account- – a fixed portion, which is determined annually at the beginning of the year,
ing issues, financial information, the quality of internal control and risk – a variable portion which is dependent upon personal objectives set for
management procedures, and the statutory auditors’ fee. each member of the Executive Board and each member of the
Executive Committee. These objectives are determined by the
It met three times during the 2010 fiscal year, with an attendance rate Supervisory Board for members of the Executive Board and by the
of 83.33% (12). Its key tasks included: Executive Board for members of the Executive Committee,
•• the preparation of financial information: – benefits in kind which, at Klépierre, involve the provision of a company
– information on the interim and annual corporate and consolidated car for each member of the Executive Committee, a part of whose
financial statements, cost relating to personal use is payable by the beneficiary and is sub-
– the principal highlights of the year or half-year; ject to tax and social security charges;
•• the monitoring of banking covenants; •• approval of the regime governing the 2010 stock options plan, agree-
•• the monitoring of appraisals and the methods used by appraisers; ment of the total number of options to be allocated and the number to
•• IFRS changes and their impact on the Klépierre financial statements; be allocated individually to each Executive Committee member.
•• the statutory auditors’ 2010 and 2011 budgets as well as the declaration
of independence of the statutory auditors; d) The Sustainable Development Committee
•• internal control compliance:
– reporting on the work done during 2010 by the Periodic Control and This committee has a minimum of two, and a maximum of four, mem-
Business Ethics functions and validation of the action plan for 2011, bers appointed by the Supervisory Board from amongst its members.
– reporting on the coordination of the permanent control system. The
central purpose of the permanent control system is to analyze the During the 2010 year, the committee members were: Jérôme Bédier
ways in which risks are covered by the permanent control processes (Chairman of the Sustainable Development Committee), Michel Clair,
and procedures, and monitor the updating of procedures and the Vivien Lévy-Garboua and Bertrand de Feydeau, who was replaced by
preparation of business continuity plans. Philippe Thel from April 8, 2010. One of the four members (25%) is
independent: Jérôme Bédier.

(10) AFEP/Medef code of corporate governance (point 14).

(11) AFEP/Medef code of corporate governance (point 14): the Audit Committee membership does not comply fully with the code, which recommends that at least two-thirds of
members be independent. This recommendation has been waived in view of the composition of the Company’s share capital and the specialist nature of this committee’s work.
(12) AFEP/Medef code of corporate governance (point 10).
(13) AFEP/Medef code of corporate governance (point 15).
(14) AFEP/Medef code of corporate governance (points 15 and 16): the Selection and Compensation Committee membership does not comply fully with the code, which
recommends that a majority of members be independent. This recommendation has been waived in view of the composition of the Company’s share capital.
(15) AFEP/Medef code of corporate governance (point 10).

Klépierre – 2010 Annual report | 239

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This committee meets at least twice a year. Its responsibilities include: •• separation of tasks: control functions should be independent of operat-
•• listing the principal categories of risk to which Klépierre is exposed; ing functions.
•• monitoring the action plan implemented to address those risks;
•• and examining the contribution made by the Klépierre Group to sustain- The internal control procedures designed to address the objectives
able development. described above cannot, however, ensure with certainty that these
objectives will be achieved, since all procedures have inherent limita-
It met three times during the 2010 fiscal year, with an attendance rate tions. However they aim to make a very significant contribution in this
of 83.33% (16). Its key tasks included: direction.
•• the long-term development of the company through issues such as the
USE® program (improving the welcome of customers and services pro- II) 5 components of internal control procedures
vided in shopping centers across Europe), five-year action plans country
by country on the three environmental, social and societal themes; a) Organization and environment
•• improvement of the Group’s sustainable development policy with the
help of external consultants. Klépierre’s internal control procedures distinguish permanent control
from periodic control (17), which are independent but complementary:
II. Internal control and risk
management procedures Permanent control is the responsibility of all Group employees. It is
linked directly to the business sectors, functions and subsidiaries.
In preparing this report we used the general principles set out in the
reference framework on risk management and internal control proce- Managers of the business sectors, functions and subsidiaries aim to
dures published in July 2010 by the Autorité des marchés financiers. ensure compliance with the Group’s internal control procedures, whose
tasks are:
I) Definition and objectives •• to ensure the methods chosen at Group level are coordinated and imple-
mented by their teams;
Internal control is the structure within which resources, behavior, •• to design and adapt the reporting of the procedures on a regular basis,
procedures and actions are implemented by the Executive Board giving the most appropriate indicators to obtain clear visibility of their
and throughout the Company to ensure that activities and risks are permanent control;
fully controlled and to obtain the reasonable assurance that the •• to regularly transmit this reporting to their superiors and indicate prob-
Company’s strategic objectives have been met. lems and incoherences in order to enable appropriate decisions to be
taken regarding changes to the controls.
Klépierre’s internal control procedures aim to ensure:
•• compliance with current laws and regulations; The powers of the Group companies’ legal representatives and their
•• the application of instructions and directions given by the Executive delegates are limited and subject to controls. Functional departments
Board; provide expertise to operational departments.
•• the optimization of operations and the smooth functioning of the Groups
internal processes; Permanent control procedures require several participants. The involve-
•• the reliability of financial information. ment of many players necessitates tight coordination of actions and
methods. At Klépierre Group level, the coordination of permanent con-
The system is based on the following 3 key principles: trol is carried out under the authority of the Head of the Accounting,
•• the involvement of and taking responsibility by all personnel: all Group Management Control and Information Systems Department, whose
employees contribute to internal control procedures; each employee, at tasks are:
his or her level, should exercise effective control over the activities for •• to ensure the drawing up and implementation of actions to improve
which he or she is responsible; permanent control in the Group’s business sectors, functions and
•• the full extent of the scope covered by the procedures: the procedures subsidiaries;
should apply to all Klépierre Group entities (operational and legal). The •• to coordinate the choice of methodologies and tools;
Steen & Strøm subsidiary has its own organization under the responsibil- •• to roll out directives in the permanent control area and monitor the devel-
ity of the general management of this company, which reports to a Board opment of the procedures in the business sectors, functions and
of Directors on which both shareholders Klépierre and ABP sit. This subsidiaries.
internal control organization is structured around the appointment of a
Risk Manager with responsibility for identifying, analyzing and managing
operational, commercial and ethical risks;

(16) AFEP/Medef code of corporate governance (point 10).

(17) At Steen & Strøm, the role of the Risk Manager is essentially one of permanent control. The periodic audit function is outsourced in most instances.

240 | Klépierre – 2010 Annual report

Periodic control procedures are carried out by Klépierre Group’s internal c) Risk management
audit function. The audit is an independent and objective process of
assurance and advice, the object of which is to deliver added value and The Klépierre Group is careful to anticipate and manage major risks
improve organizational operation. It helps the Executive Board to likely to affect the achievement of its goals and to compromise its com-
achieve its targets by means of a systematic and methodical approach pliance with current laws and regulations. These risks are identified
to the evaluation and improvement of risk management, control and under the “Risk Factors” section of this registration document. This
corporate governance processes. inventory of risks covers the reliability of accounting and financial infor-
mation (interest rate, liquidity, exchange rate and counterparty risks) and
Internal control also includes: operational risks (those related to personal and property safety, monitor-
ing of operational incidents, asset insurance cover, etc.).
•• the description of the Group’s governance and organization of business
sectors and functions which make up the general framework enabling Risk assessment is carried out using a risk matrix which shows the
the Group’s objectives to be reached, as well as the hierarchical and Group’s exposure to risks and the level of each risk. Activities and func-
functional structure; tions are grouped according to the nature of the operating risks, which
•• an instruction guide which formalizes and rolls out the internal rules and are principally: unreliable information, loss of competitive position,
procedures to be applied, as well as controls to be carried out. These excessive costs, termination of activities, non-respect of laws and regu-
procedures make up the basis of preparation for internal control. lations, loss of assets, divulgence of sensitive information, commercial-
Managers of Group entities are responsible for drawing up and updating ization, reputation, and human resources.
this basis of preparation;
•• the principle of delegation underlies the system. It is carried out in The identification and evaluation of risks is used as a reference to deter-
stages, each responsible for implementing procedures in a way that is mine procedures and controls which, in their turn, influence the level of
coherent with Group policy; residual risk. The procedures provide a framework for the activity, in a
•• separation of functions: this mainly occurs between the teams setting more precise way where risks have been identified, and their application
up operations and those implementing them. Group structure should provides a control mechanism.
ensure and maintain a clear distinction between those who operate and
those who validate; The scope of intervention of periodic control covers all Group activities
•• good policy aims to comply with legal and regulatory requirements which and risks in all entities, including the activities of wholly- or jointly-owned
promote ethical behavior by implementing a code of conduct for employ- subsidiaries and activities which have been outsourced contractually. In
ees, in particular regarding the confidentiality of information, ethics with addition, upon the identification of a major risk, periodic control may
regard to third parties, sustainable development and the use of informa- exercise its right to launch any investigation it deems necessary.
tion technology.
d) Control activities to meet these risks
b) Internal communication of relevant information
The internal control and risk management system is based on three
The responsibilities, independence and role of permanent and periodic levels of control, the first two relating to permanent control, and the third
control within the Group are fixed by a Permanent Control Charter and to periodic control:
an Internal Audit Charter respectively. These are jointly signed by the
Chairman of the Executive Board and the Chairman of the Supervisory First level – First degree – Permanent control
Board.
The first level and first degree of control is exercised by every employee
The charters, internal rules and procedures which enable each person as part of his or her job-related tasks with reference to the applicable
to carry out his or her responsibilities are communicated and published procedures. Control is ensured on an ongoing basis by the initiation of
on an intranet site dedicated to documentation. This improves visibility a task by operating employees themselves or by automatic systems for
and access for all employees. carrying out operations.

They are updated whenever necessary (as regulatory requirements First level – Second degree – Permanent control
change, business activity changes or reorganizations take place etc.)
and reconsidered at least every 18 months by the affected manage- The second level is exercised by the management of the business sec-
ment, assisted by the Permanent Control Coordinator. tion or function. Controls are carried out either in the framework of
operating procedures or in autonomous control procedures.
The Klépierre Group continually reviews all those procedures already
drafted, updates procedures where necessary and drafts new
procedures.

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Second level – Permanent control Every part of the internal control function reports to the Executive Board
and the audit Committee concerning the fulfillment of their missions.
The second level of control is intended to ensure that the first level
controls have been carried out and respected correctly. It is undertaken Third level – Periodic control
by separate functions, specially dedicated to permanent control. These
functions are set up in countries where Group assets are largest. The third level of control is exercised by the Group’s Internal Audit
Department.
Coordination of Group permanent control
At Group level, the Coordination of Group permanent control function Accordingly, an annual audit plan drawn up jointly by the Chief Internal
has the following tasks: Audit Officer and the Executive Board is submitted for the approval of the
•• coordinating updates of control procedures and processes by the appro- audit Committee. This plan is based on a preventive approach to risks
priate management; that seeks to define audit priorities consistent with the Group’s objectives.
•• monitoring the implementation of recommendations made by the peri- However, one-off assignments may also be conducted to address a spe-
odic control team; cific problem that may arise.
•• preparing and issuing reports to the Group’s employee relations
bodies; At the same time, audits are carried out in France on a three-year cycle
•• coordinating the actions contained in the Business Continuity Plan, i.e. on the application of internal regulations and procedures in the framework
all those measures intended to maintain the essential services of the of shopping mall management, using standard bases of information
company and ensure the continuity of business activity on a fallback site, covering the following areas:
where such measures are necessary as the result of a major disaster. •• security of people and goods, particularly in the framework of regulations
applicable to public-access buildings;
Key indicators, called “Fundamental Surveillance Points” (FSP), have •• property administration;
been defined, with the aim of better monitoring the implementation and •• rental management;
effectiveness of controls. Controls are selected and formalized within •• managing groups of retail traders.
procedures which specify the speed, intensity and organization of each
control, according to the level of risk. The most important are the sub- The Internal audit department has direct access to the Executive Board
ject of regular FSP reporting to the Coordination function. They follow and reports on its work to the Audit Committee, also providing reports,
a methodology and frequency that are predefined by the managers for recommendations and implementation plans.
each chosen activity presenting a major risk. These are used to ensure
first level controls of the Group’s essential business areas by managers, In addition to senior management, there are six internal auditors
who make it one of the key elements of the management and supervi- assigned to periodic control.
sion of risks.
e) Management and supervision of internal control systems
Each quarter, synthesis work is completed by the permanent control
Coordination, ensuring the high quality of the system. At present, the Under the direction of the Executive Board, the activities and functions
Klépierre Group has defined 23 FSPs, and the updating process is managers carry out the supervision of the systems with the support of
continuous. the permanent control coordination function.

One of these FSPs relates to the monitoring of the Group’s largest risk; An internal control coordination Committee meets at least twice per
the risk to persons and property (monitoring of the annual technical year, bringing together players from permanent compliance, periodic
inspections conducted in shopping centers and structural and weath- compliance, Business Ethics functions, Finance and Legal. Its work and
erproofing audits). conclusions are reported to the Executive Board, as well as to Klépierre’s
Audit Committee.
Internal accounting control
A dedicated function within the Accounting Department is charged with The supervision is also supported by the comments and recommenda-
checking the smooth functioning of first level accounting controls. See tions of the statutory auditors and by any regulatory supervision which
section below “Internal control procedures relating to the preparation may take place. The Coordination function of permanent compliance
and processing of the accounting and financial information”. and accounting control monitor the implementation of corrective action
plans centrally.
Internal audit
Specifically identified, the Business Ethics Department ensures compli- A report on the 2010 fiscal year and the action plan for 2011 have both
ance with ethical and professional standards, the prevention of insider been presented to the Audit Committee.
trading and the control of measures to prevent money laundering.

242 | Klépierre – 2010 Annual report

III) Risk management and internal control bodies III. Internal control procedures relating
to the preparation and processing
The main bodies involved in managing the internal control system are: of the accounting and financial information
a) Executive and Supervisory Boards I) Definition and objectives

The Executive Board, under the supervision of the Supervisory Board, The aim of accounting controls is to ensure adequate coverage of the
has overall responsibility for Group’s internal control systems. The main accounting risks. They rely on understanding operational pro-
Executive Board is tasked with defining the general principles of the inter- cesses and the way they are translated into the company accounts, and
nal control system, creating and implementing an appropriate internal on defining the responsibilities of the individuals responsible for account-
control system and associated roles and responsibilities, and monitoring ing scopes and information system security.
its smooth functioning in order to make any necessary improvements.
Internal accounting controls aim to ensure:
In the specific case of Klépierre, its Executive or Supervisory Boards may •• that published accounting and financial information complies with
call upon the General Inspection Unit of its consolidating entity, the accounting regulations;
BNP Paribas group, to audit its organization and procedures. •• that the accounting principles and instructions issued by the Group are
applied by all its subsidiary companies;
b) Audit Committee •• that the information distributed and used internally is sufficiently reliable
to contribute to processing accounting information.
The Audit Committee is informed at least once a year of the status of
the Group’s entire internal control system, changes made to the system II) Management process for accounting  
and the findings of the work carried out by the various participants and financial organization
working in the system.
a) Accounting organization
c) Permanent compliance functions
The production of accounting information and the application of the
These functions, distinct from internal audit, ensure the communication controls implemented to ensure the reliability of said information are
and update of procedures. Together with business function specialists, primarily the responsibility of the subsidiary company financial depart-
they coordinate the work determined by the Internal Control ments that submit information to the Group, and which certify its com-
Coordination Committee. pliance with the internal certification procedure (especially in the case
of foreign subsidiaries).
d) Internal audit
The corporate and consolidated financial statements are prepared by
Internal audit is responsible for evaluating the work of the risk manage- the Accounting, Management Control and Information Systems
ment and internal control systems, monitoring it on a regular basis and Department, which reports directly to the Executive Board.
recommending any improvements.
Management controllers, who work in the head office and the subsidiar-
It contributes to the awareness and development of the internal control ies, strengthen the internal control system.
framework but is not involved in setting up or running of the system on
a day-to-day basis. The France and International Internal Accounting Control unit, attached
directly to the Head of Accounting, Management Control and Information
Its analyses and observations are used to direct permanent compliance Systems, is charged with:
work, identify areas for improvement and strengthen procedures. •• updating accounting rules in view of changes in accounting regulations;
•• defining the various levels of accounting control to be applied to the
e) Functional management financial statement preparation process;
•• ensuring correct operation of the internal accounting control environment
Functional management departments define the orientation and proce- within the Group, with particular reference to the internal certification
dures of their respective sectors, which they communicate to both procedure described below;
countries and subsidiaries. •• preparing and updating the procedures, validation rules and authoriza-
tion rules applying to the department;
f) Company employees •• monitoring the implementation of recommendations made by internal
and external auditors.
Operating supervisors and line managers are responsible for controlling
risks and are the principal actors in permanent control. They exercise b) Financial risk management
first level controls.
The management of financial risks, and in particular the financial struc-
ture of the Group, its financing needs and interest rate risk management
procedures, is provided by the Financing and Financial Communications
Department, which reports directly to the Executive Board.

Klépierre – 2010 Annual report | 243

 General
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At the end of each year, the Supervisory Board validates the provisional III) Processes contributing to the preparation  
financing plan for the following year, which sets out the broad outlines in of accounting and financial information
terms of the balance and choice of resources, as well as interest rate
hedges. During the year, key financial transaction decisions are submitted a) Operational processes used  
individually for approval by the Supervisory Board, which also receives a to generate accounting information
summary of these transactions once they have been completed.
The financial statements of French companies are prepared centrally at
The Financing and Financial Communications Department also develops Klépierre’s corporate headquarters using a shared information system.
internal procedures that define the distribution of intra-Group responsi- The operational departments are responsible for billing and collecting
bilities for cash management and the implementation of Klépierre share rents and charges by applying a series of appropriate controls to their
buyback programs. job functions, as defined in the corresponding procedures. Entered into
a single management system, key transactions are interfaced automati-
The processing and centralization of cash flows, together with interest cally with the accounting system. The accounting system uses two
rate and exchange rate hedging, are the responsibility of the Financing methods of analysis (per building and per sector) to deliver precise
Department, which keeps a record of commitments and ensures that budgetary control.
they are reflected in the accounting system.
All the processes used to prepare accounting information are subject
c) Information systems structure to various levels of accounting control programs, validation rules, autho-
rization rules and instructions relating to the justification and documen-
Decisions concerning the choice of accounting and financial manage- tation of accounting procedures.
ment software are taken by the Group. Group policy is to standardize
the accounting systems in order to improve the consistency of account- The finance departments of the Group’s foreign subsidiaries apply con-
ing information. trols to the data they produce and contribute to the quality of the
accounts prepared by the accounting entities by working at their own
Accounting and management control information is gathered using a level to make appropriate reconciliations between accounting and man-
consolidation software package (Magnitude) and a management control agement data.
software package (Hyperion Essbase). These two packages are inter-
connected, and are administered and updated by a dedicated team The Accounting Department has set up a system of internal certification
reporting to the Accounting, Management Control and Information via an intranet/internet tool, for quarterly country data and controls car-
Systems Department. Data is fed into the consolidation system at the ried out.
local level in the Group’s main operating countries via local accounting
system interfaces. Each country manager certifies directly through the tool:
•• that the accounting data provided to the consolidation service are reli-
All accounting and financial data follow IT procedures based on daily able and comply with the Group’s accounting standards;
backups to media stored off-site. •• that the internal accounting control system is in good working order, in
order to guarantee the quality of accounting information.
d) Management systems
In addition, a process to review events subsequent to each half-year
The quarterly management control reporting system monitors the trend closing date is also integrated into the internal certification tool, allowing
in key performance indicators for each country and each asset to ensure the Group to be informed of significant events which occur after the
that they are on target with the annual budget. closing date and any impact on the consolidated financial statements.

A global reconciliation is also carried out by Group management control This system of control covers all Group entities.
to ensure that accounting income is consistent with consolidated man-
agement income. b) Processes used to prepare the corporate  
and consolidated financial statements
e) The Audit Committee
The financial statements for the entire scope of consolidation are con-
The clarity of financial information and the relevance of the accounting solidated by the Consolidation Department, although a sub-consolida-
principles used are monitored by the Audit Committee (whose role has tion is produced for the Scandinavian companies in Oslo.
already been specified), working in collaboration with the statutory
auditors.

244 | Klépierre – 2010 Annual report

Preparation of the consolidated financial statements is the subject of a IV. Corporate governance
process based on precise instructions and a detailed schedule distrib-
uted to all finance departments to ensure compliance with deadlines At its meeting of December 19, 2008, the Supervisory Board confirmed
and Group accounting standards. its agreement to the Company’s adoption of the corporate governance
rules set out in the AFEP/Medef code (available at: www.medef.fr).
The team charged with Group consolidation is arranged by geographic
region and is in permanent contact with local teams, enabling them to I) Compensation paid to Supervisory Board  
anticipate processing of complex operations. and special-purpose committee members (18):

The principle accounting controls carried out at each quarterly closing The compensation paid to Supervisory Board and special-purpose com-
date as part of the process of consolidating the financial statements mittee members takes the form of directors’ fees.
are: A total of 270,000 euros was paid in director’s fees to Supervisory Board
•• control of changes in the scope of consolidation; members during the 2010 fiscal year. The terms and conditions of pay-
•• verification of the correct adjustment and elimination of internal ment were as follows:
transactions; •• 90,000 euros divided equally among the members of the Supervisory
•• analysis and justification of all restatements of consolidation according Board who serve as its Chairman or Vice-Chairman, or who serve as
to IFRS standards; Chairman of any one of the following committees: Audit, Investments,
•• analysis and justification of all variances in respect of budgets and Selection and Compensation and Sustainable Development (a fixed sum
forecasts. of 15,000 euros for each);
•• 126,000 euros divided among the members of the Supervisory Board
Off-balance-sheet commitments are centralized in the Magnitude con- for their Supervisory Board duties, of which:
solidation system for each consolidated entity. – 72,000 euros divided equally among the members of the Supervisory
Board in respect of the fixed portion,
Klépierre also uses external consulting services, primarily for tax issues – 54,000 euros divided among the members of the Supervisory Board
both in France and abroad. In the Group’s main operating countries, tax on a variable basis, depending on their actual attendance at
preparation packages are reviewed annually by a specialist firm. Supervisory Board meetings;
•• 54,000 euros divided among members of the Board serving as members
c) Financial communications (press releases,   of one or more of the Board’s special-purpose committees, paid on the
topic-based presentations, etc.) basis of their actual attendance at the meetings of the committees to
which they have been appointed.
The Financing and Financial Communications Department is responsible
for handling the financial communications obligations imposed by market The share of attendance fees received by each member of the
regulators. The team drafts and edits the financial communications materi- Supervisory Board is detailed in the section “Corporate officers’ com-
als published to inform shareholders, institutional investors, analysts and pensation and benefits” of this registration document.
ratings agencies of Group activities, explain its financial results and detail
its growth strategy. II) Internal rules governing the Supervisory Board  
and its committees
The Financial Communications team provides ongoing monitoring of Group
obligations in terms of financial information provision. The distribution of The internal rules of the Supervisory Board and each of its committees
information to financial markets follows a precise schedule, which is dis- are framed to ensure transparency consistent with the principles of
tributed internally. With assistance from a number of different departments, corporate governance applied to listed companies.
this team designs financial results presentations and other presentations
on specific topics. It works with the Legal Department to ensure that infor- These internal rules describe the missions and operation of the
mation is communicated within the required deadlines and complies fully Supervisory Board and its special-purpose committees.
with all applicable legislation and regulations.

(18) AFEP/Medef code of corporate governance (point 18).

Klépierre – 2010 Annual report | 245

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V. Methods governing shareholders

participation in general meetings
of shareholders
The rules applying to the general meetings of shareholders, and more
particularly those relating to the participation of shareholders, are set
out in Chapter V of the Company’s bylaws and in the “General
Information” section of this registration document.

VI. Information concerning issues potentially

relevant to any public offering
Information concerning issues potentially relevant to any public offering
is referred to in the “Information on the Company and the capital” sec-
tion of this registration document (capital structure/delegations and
authorizations granted to the Executive Board by the general meeting
of shareholders held on April 9, 2009), and in the notes to the consoli-
dated financial statements – note 7.2. Liquidity Risk (agreements
entered into by the Company, which could be terminated in the event
of a change of control: bonds issues, if a change of control triggers a
deterioration in the “investment grade” rating).

Michel CLAIR,
Chairman of the Supervisory Board

246 | Klépierre – 2010 Annual report

3. Statutory auditors’ report prepared in accordance
with article L. 225-235 of the French Commercial Code on the report
prepared by the Chairman of the Company’s Supervisory Board
Year ended December 31, 2010
This is a free translation into English of the statutory auditors’ report prepared pursuant to article L.225-235 of the French Commercial Code on
the report prepared by the Chairman of the Company’s Supervisory Board issued in the French language and is provided solely for the conve-
nience of English speaking users.
This report should be read in conjunction with, and is construed in accordance with, French law and professional auditing standards applicable
in France.

To the shareholders,

In our capacity as statutory auditors of Klépierre and in accordance with •• obtaining an understanding of the work involved in the preparation of
article L. 225-235 of the French Commercial Code (Code de that information, and of the existing documentation;
Commerce), we hereby report to you on the report prepared by the •• determining if any significant weaknesses in the internal control proce-
Chairman of the Supervisory Board of your Company in accordance dures relating to the preparation and processing of accounting and
with article L. 225-68 of the French Commercial Code, for the year financial information noted in the course of our engagement have been
ended December 31, 2010. properly disclosed in the Chairman’s report.

It is the Chairman’s responsibility to prepare, and submit to the On the basis of our work, we have nothing to report on the information
Supervisory Board for approval, a report on the internal control and risk in respect of the Company’s internal control and risk management pro-
management procedures implemented by the Company and containing cedures relating to the preparation and processing of accounting and
the other disclosures required by article L. 225-68 of the French financial information contained in the report prepared by the Chairman
Commercial Code, particularly in terms of corporate governance. of the Supervisory Board in accordance with article L. 225-68 of the
French Commercial Code.
It is our responsibility:
•• to report to you on the information contained in the Chairman’s report Other disclosures
in respect of the internal control and risk management procedures relat-
ing to the preparation and processing of accounting and financial infor- We hereby attest that the Chairman’s report includes the other disclo-
mation; and sures required by article L. 225-68 of the French Commercial Code.
•• to attest that the report contains the other disclosures required by article
L. 225-68 of the French Commercial Code, it being specified that we Courbevoie and Neuilly-sur-Seine, February 21, 2011
are not responsible for verifying the fairness of those disclosures.
The statutory auditors
We conducted our work in accordance with the professional standards
applicable in France. French original signed by

Information on the internal control and risk Mazars Deloitte & Associés
management procedures relating to the preparation Guillaume Potel Pascal Colin
and processing of accounting and financial Julien Marin-Pache Laure Silvestre-Siaz
information

The professional standards require that we perform the necessary pro-

cedures to assess the fairness of the information provided in the
Chairman’s report in respect of the internal control and risk management
procedures relating to the preparation and processing of accounting
and financial information. These procedures mainly consisted in:
•• obtaining an understanding of the internal control and risk management
procedures relating to the preparation and processing of the accounting
and financial information on which the information presented in the
Chairman’s report is based, as well as of the existing documentation;

Klépierre – 2010 Annual report | 247

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4. Statutory auditors’ special report on regulated agreements

and commitments with third parties
Year ended December 31, 2010
This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments with third parties that is
issued in the French language and is provided solely for the convenience of English speaking readers. This report on regulated agreements and
commitments should be read in conjunction, and construed in accordance with, French law and professional auditing standards applicable in
France. It should be understood that the agreements reported on are only those provided by the French Commercial Code and that the report
does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.

To the Shareholders,

In our capacity as Statutory Auditors of your Company, we hereby report Nature and purpose
to you on regulated agreements and commitments with third parties. On March 26, 2010, your Supervisory Board authorized the signing of a
The terms of our engagement require us to communicate to you, based Dealer Agreement, with BNP Paribas as a dealer-arranger and various
on information provided to us, the principal terms and conditions of those other dealers, whereby dealers undertake to place and subscribe the
agreements and commitments brought to our attention or which we may securities issued by Klépierre in connection with the implementation of
have discovered during the course of our audit, without expressing an the April 7, 2010 EMTN program.
opinion on their usefulness and appropriateness or identifying such other
agreements, if any. It is your responsibility, pursuant to article R. 225-58 Terms and conditions
of the French Commercial Code (Code de Commerce), to assess the The agreement was signed between Klépierre, BNP Paribas and other
interest involved in respect of the conclusion of these agreements for the dealers on April 1, 2010 and the fees recorded for fiscal year 2010 total
purpose of approving them. e1,424,500.

Our role is also to provide you with the information provided for in article 2. With BNP Paribas Securities Services
R. 225-58 of the French Commercial Code in respect of the performance
of the agreements and commitments, already authorized by the Members of the Supervisory Board concerned
Shareholders’ Meeting and having continuing effect during the year, if any. Messrs. Vivien Lévy-Garboua, Philippe Thel and Dominique Hoenn.
This relates to an agreement indirectly involving BNP Paribas, a share-
We conducted our procedures in accordance with the professional guide- holder with more than 10% of voting rights in your Company.
lines of the French National Institute of Statutory Auditors (Compagnie
Nationale des Commissaires aux Comptes) relating to this engagement. Nature and purpose
These guidelines require that we agree the information provided to us On March 26, 2010, your Supervisory Board authorized the signing of
with the relevant source documents. an Agency Agreement with BNP Paribas Securities Services, with a view
to organizing relations between Klépierre as an issuer, the Principal
Agreements and commitments submitted Paying Agent, who is also the Fiscal Agent, Covenant and Put Agent,
to the approval of the shareholders’ meeting and Calculation Agent and other paying agents, if any.

Agreements and commitments authorized   Terms and conditions

during the year The agreement was signed between Klépierre and BNP Paribas
Securities Services on April 1, 2010 and the fees recorded for fiscal
Pursuant to article L. 225-88 of the French Commercial Code, the fol- year 2010 total e4,039.
lowing agreements and commitments, previously authorized by your
Supervisory Board, have been brought to our attention. 3. With Klémurs, a subsidiary of Klépierre

1. With BNP Paribas SA Members of the Supervisory Board concerned

Members of the Supervisory Board concerned Messrs. Michel Clair, Bertrand de Feydeau and Dominique Hoenn.
This relates to an agreement involving Klémurs, a subsidiary of your
Messrs. Vivien Lévy-Garboua, Philippe Thel and Dominique Hoenn. Company.
This relates to an agreement involving BNP Paribas, a shareholder with
more than 10% of voting rights in your Company. Nature and purpose
On June 18, 2010, your Supervisory Board approved the granting of a

248 | Klépierre – 2010 Annual report

loan from Klépierre to Klémurs in an amount of e20,000,000, for a term Terms and conditions
of 3 years ending on June 30, 2013 and bearing interest at 3-month The acquisition was completed on December 17, 2010 for a consider-
Euribor plus a margin of 150 basis points. ation of e199,900.

Terms and conditions 8. With Ségécé, a subsidiary of Klépierre

The e20,000,000 loan agreement was signed on June 30, 2010.
Interest recorded for fiscal year 2010 totals e237,513.33. This relates to an agreement involving Ségécé, a subsidiary of your
Company.
4. With Ségécé and SAS LP 7, subsidiaries of Klépierre
Nature and purpose
This relates to an agreement involving Ségécé and SAS LP 7, subsidiar- On December 17, 2010, your Supervisory Board approved the acquisi-
ies of your Company. tion by Klépierre of 15% of the Ségécé Slovensko s.r.o securities from
Ségécé.
Nature and purpose
On December 17, 2010, your Supervisory Board approved the acquisi- Terms and conditions
tion by Klépierre of all the Segece Polska Sp.z.o.o. securities from The acquisition was completed on December 20, 2010 for a consider-
Ségécé (49 shares) and SAS LP 7 (1 share). ation of e4,000.

Terms and conditions 9. With Ségécé, a subsidiary of Klépierre

The acquisition was completed on December 17, 2010 for a consider-
ation of e10,900,000. This relates to an agreement involving Ségécé, a subsidiary of your
Company.
5. With Ségécé, a subsidiary of Klépierre
Nature and purpose
This relates to an agreement involving Ségécé, a subsidiary of your On December 17, 2010, your Supervisory Board approved the acquisi-
Company. tion by Klépierre of all the Ségécé Ceska Republika s.r.o securities from
Ségécé.
Nature and purpose
On December 17, 2010, your Supervisory Board approved the acquisi- Terms and conditions
tion by Klépierre of all the Ségécé Hungary Management and Controlling The acquisition was completed on December 20, 2010 for a consider-
Ltd. securities from Ségécé. ation of e10,500,000.

Terms and conditions 10. With Ségécé, a subsidiary of Klépierre

The acquisition was completed on December 17, 2010 for a consider-
ation of e7,900,000. This relates to an agreement involving Ségécé, a subsidiary of your
Company.
6. With Ségécé, a subsidiary of Klépierre
Nature and purpose
This relates to an agreement involving Ségécé, a subsidiary of your On December 17, 2010, your Supervisory Board approved the acquisi-
Company. tion by Klépierre of all the Ségécé Italia S.r.l from Ségécé.

Nature and purpose Terms and conditions

On December 17, 2010, your Supervisory Board approved the acquisi- The acquisition was completed on December 22, 2010 for a consider-
tion by Klépierre of all the Ségécé Portugal SA securities from Ségécé. ation of e22,390,000.

Terms and conditions 11. With Ségécé, a subsidiary of Klépierre

The acquisition was completed on December 17, 2010 for a consider-
ation of €9,600,000. This relates to an agreement involving Ségécé, a subsidiary of your
Company.
7. With Ségécé, a subsidiary of Klépierre
Nature and purpose
This relates to an agreement involving Ségécé, a subsidiary of your On December 17, 2010, your Supervisory Board approved the acquisi-
Company. tion by Klépierre of all the Ségécé España S.L. securities from Ségécé.

Nature and purpose Terms and conditions

On December 17, 2010, your Supervisory Board approved the The acquisition did not take place during fiscal year 2010.
acquisition by Klépierre of 99.95% of the Ségécé Hellas Real Estate
Management A.E. securities from Ségécé.

Klépierre – 2010 Annual report | 249

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Agreements and commitments already

approved by the shareholders’ meeting
Agreements and commitments authorized in previous
years and having continuing effect during the year

Pursuant to article R. 225-57 of the French Commercial Code, we have

been advised that the following agreements and commitments autho-
rized in previous years have had continuing effect during the year.

Date of the Regulated agreements Parties involved

authorization granted Date Purpose
by the Supervisory
Board
05/26/2004 07/09/2004 Bond issue: subscription Agreement BNP Paribas
05/26/2004 07/15/2004 Bond issue: Fiscal Agency Agreement organizing relations between the issuer, the Principal Paying Agent, BNP Paribas Securities Services
any other paying agents and the Covenant and Put Agent over the whole term of the bonds and BNP Paribas Securities
Services, Luxembourg Branch
02/08/2006 03/13/2006 Bond issue: subscription Agreement BNP Paribas
02/08/2006 03/16/2006 Bond issue: Fiscal Agency Agreement organizing relations between the issuer, the Principal Paying Agent, BNP Paribas Securities Services
any other paying agents and the Covenant and put Agent over the whole life of the bonds and BNP Paribas Securities
Services, Luxembourg Branch
07/25/2008 10/17/2008 €130,056,526.60 inter-company loan for a term of 3 years, repayable by a bullet payment and bearing interest Klémurs
at 3-month Euribor plus a margin of 110 basis points
10/03/2008 10/06/2008 NOK575,616,000 inter-company loan granted to Nordica Holdco AB and bearing interest at a fixed 6.5% rate Nordica Holdco AB
10/03/2008 10/07/2008 NOK1,822,784,000 inter-company loan granted to Storm Holding Norway AS and bearing interest at a fixed 6.5% rate Storm Holding Norway AS
06/05/2009 06/15/2009 Inter-Company loan granted by Le Havre Lafayette to Klépierre in a maximum amount of €10,511,752.67 Le Havre Lafayette
06/05/2009 06/15/2009 Inter-Company loan granted by Le Havre Vauban to Klépierre in a maximum amount of €1,268,591.39 Le Havre Vauban
06/05/2009 06/15/2009 All shares held by Klépierre in the share capital of Le Havre Lafayette and Le Havre Vauban pledged by Klépierre Le Havre Lafayette,
as collateral security to Westdeutsche Immobilienbank AG bank and to “all beneficiaries” as defined in the Loan Le Havre Vauban
Agreement
06/05/2009 06/29/2009 Credit facility opening agreement in a maximum amount of €2,400,000,000 and bearing interest at 3-month BNP Paribas
Euribor plus a margin of 120 to 180 basis points, subject to the Loan-To-Value (LTV) grid which can reach 65%
06/15/2009 06/29/2009 Loan from Klépierre to Klémurs in a maximum amount of €100,000,000 and bearing interest at 3-month Euribor Klémurs
plus a margin of 600 basis points
06/15/2009 06/30/2009 26.30% of the SCOO securities and 22.17% of the SCT securities were sold on 06/30/2009 and prices were Cardif Assurances Vie
adjusted by €1,074,494.38 and €1,195,668.13, respectively, on 12/22/2010 (a subsidiary of BNP Paribas
Assurances)

Courbevoie and Neuilly-sur-Seine, February 21, 2011

The Statutory Auditors

French original signed by

Mazars Deloitte & Associés

Guillaume Potel Pascal Colin
Julien Marin-Pache Laure Silvestre-Siaz

250 | Klépierre – 2010 Annual report

5. Special report of the Executive Board to the general meeting
of shareholders concerning bonus issues of shares
(article L. 225-197-1 et seq of the French Commercial Code)
In 2010, the Executive Board did not avail of the authorization granted
to it by the ordinary and extraordinary general meeting of shareholders
of April 9, 2009 (twentieth resolution) to carry out, on one or more occa-
sions, bonus issues of the Company’s existing shares or bonus issues
of future shares to beneficiaries or categories of beneficiaries to be
determined from among:
•• employees of the Company or of companies or grouping interests that
are related to the Company under the terms of article L. 225-197-2 of
the French Commercial Code;
•• and the directors or officers of the Company or of the companies or
grouping interests that are related to the Company and that meet the
conditions set forth in article L. 225-197-1 II of the French Commercial
Code.

It is the duty of the Executive Board to identify the beneficiaries of the

bonus shares as well as the share allotment conditions and, where
applicable, the share allotment criteria, notably the minimal acquisition
period and the holding period required for each beneficiary, with the
understanding that when this concerns bonus issues to company offi-
cers or directors, the Supervisory Board must (a) either decide that the
freely allotted shares may not be transferred by the beneficiaries before
they terminate their employment with the Company or (b) determine the
quantity of bonus shares that they are bound to keep as registered
shares until they terminate their employment with the Company.

In accordance with the deliberations of said general meeting, the total

number of bonus shares allocated, whether existing or future shares,
may not represent more than 0.5% of the Company’s share capital on
the day of the Executive Board’s decision.

This authorization was granted for twenty six months as of April 9, 2009.

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6. Special report of the Executive Board to the general meeting

of shareholders concerning transactions carried out pursuant
to the provisions of articles L. 225-177 to L. 225-186
of the French Commercial Code
The information to be disclosed at the ordinary general meeting
of shareholders pursuant to article L. 225-184 is summarized in the
table below:

STOCK-OPTIONS Date of allocation Number of Exercise period Exercise price Number of options Options remaining
options granted (in euros) exercised in 2010 to be exercised
Laurent MOREL May 30, 2006 (1)(3) 31 021 May 31, 2010 to May 30, 2014 29.49 0 31 021
(Chairman of the Executive Board) May 15, 2007 (1)(3) 27 824 May 16, 2011 to May 15, 2015 46.38 0 27 824
April 6, 2009 (1)(4) 35 000 April 6, 2013 to April 5, 2017 22.60 (6) 0 35 000
June 21, 2010 (2)(5) 35 000 June 21, 2014 to June 20, 2018 22.31 (7) 0 35 000
Jean-Michel GAULT May 30, 2006 (1)(3) 31 021 May 31, 2010 to May 30, 2014 29.49 0 31 021
(Member of the Executive Board) May 15, 2007 (1)(3) 24 822 May 16, 2011 to May 15, 2015 46.38 0 24 822
April 6, 2009 (1)(4) 30 000 April 6, 2013 to April 5, 2017 22.60 (6) 0 30 000
June 21, 2010 (2)(5) 30 000 June 21, 2014 to June 20, 2018 22.31 (7) 0 30 000
(1) Date of the extraordinary general meeting of shareholders which authorized the granting of stock options: April 7, 2006.
(2) Date of the extraordinary general meeting of shareholders which authorized the granting of stock options: April 9, 2009.
(3) The numbers and prices have been adjusted to reflect the 3-for-1 stock split in 2007 and the impact of the discount granted to holders of preferential subscription rights when capital was raised in December 2008.
(4) Pursuant to article L. 225-185 of the French Commercial Code, the Supervisory Board decided on March 6, 2009 that at least 50% of the net gain realized following the exercise of stock options by Executive
Board members must be held in the form of registered shares until such time as they leave the Company.
(5) Pursuant to article L. 225-185 of the French Commercial Code, the Supervisory Board decided on June 18, 2010 that at least 50% of the net gain realized following the exercise of stock options by Executive
Board members must be held in the form of registered shares until such time as they leave the Company.
(6) Depending on the performance of the Klépierre stock versus the FTSE EPRA Eurozone Index (EPEU), this price can fluctuate from 22.60 euros to 27.12 euros. Where performance targets are not achieved,
these options will lapse and it will be no longer possible to exercise them.
(7) Depending on the performance of the Klépierre stock versus the FTSE EPRA Eurozone Index (EPEU), this price can fluctuate from 22.31 euros to 26.77 euros. Where performance targets are not achieved,
these options will lapse and it will be no longer possible to exercise them.

252 | Klépierre – 2010 Annual report

7. Description of the share buyback program
Drawn up in compliance with the relevant sections of articles 241-1 and •• to cancel all or some of these repurchased shares, subject to adoption
following of the General Regulations of the Autorité des marchés finan- by the extraordinary general meeting of shareholders, on April 7, 2011,
ciers (the “AMF”), this description of the share buyback program is of the ninth resolution submitted to a shareholder vote and under the
intended to explain the purpose and workings of the program to repur- terms indicated therein; or
chase company stock that will be submitted to a vote at the combined •• to award free shares pursuant to the provisions of articles L. 225-197-1
general meeting of shareholders on April 7, 2011 (“the 2011 Share et seq of the French Commercial Code; or
Buyback Program”). •• to award or sell shares to employees under profit-sharing programs
offered by the company or in connection with the implementation of an
1. Date of the general meeting of shareholders employee savings scheme sponsored by the employer, in accordance
called to approve the 2011 Share Buyback with applicable law and, in particular, the terms of articles L. 3332-1 et
Program seq of the French Labor Code.

April 7, 2011. 5. Maximum share of capital to be acquired

and maximum number of shares that may
2. Shares held by the Company be acquired under the 2011 Share Buyback
at February 28, 2011 Program
At February 28, 2011, Klépierre directly or indirectly holds The number of shares that the Company buys during the buyback pro-
2 682 740 shares, representing 1.51% of its share capital for a global gram shall not exceed 5% of the shares comprising the share capital of
amount of 69.7 million euros (at book value). the Company at any given time; this percentage shall apply to an
This information, and that which follows, takes into account the total adjusted figure depending on capital transactions that may be com-
number of shares that comprise the equity capital of the Company, i.e., pleted after the general meeting of shareholders. As a reminder, based
189,648,240. on share capital existing at February 28, 2011, and after deduction of
the 2 855 773 shares already owned at this date, the maximum number
3. reakdown by objective of shares held of shares the Company may acquire is 6 626 639.
by Klépierre at February 28, 2011 The number of shares acquired by the Company for the purpose of
holding them and subsequently remitting them as payment or exchange
At February 28, 2011, in connection with a merger, spin-off or partial transfer of business
•• 2 682 740 shares are allocated to any stock option plans the Company assets, cannot exceed 5% of the Company’s share capital. As a
offers and to the award of free shares; and reminder, based on share capital existing at February 28, 2011, and
•• 173 033 shares are allocated for use in connection with the liquidity after deduction of the 2 855 773 shares already owned at this date, the
agreement drawn up with EXANE BNP Paribas in September 2005, in maximum number of shares the Company may acquire is 6 629 639.
accordance with market practices accepted by the AMF and the The number of shares that the Company may hold at any given time
Association Française des entreprises d’investissement (“AFEI”) code of may not exceed 10% of the shares comprising its stated capital on the
conduct for such agreements, authorizing their purchase, sale, conver- date under consideration. As a reminder, based on share capital existing
sion, disposal, transfer or loan of shares, notably to stimulate trading in at February 28, 2011, the maximum number of shares the Company
the market or counter adverse trends. may acquire is 161 090 051.

4. Objectives of 2011 Share Buyback Program 6. Maximum authorized purchase

price per share
The objectives of the 2011 Share Buyback Program are as follows:
•• to stimulate the secondary market or the liquidity of Klépierre stock, The maximum purchase price is 40 euros per share and it is specified
through an investment services provider, within the framework of a that this price would be adjusted in the event of any capital transaction
liquidity agreement that complies with the ethics charter recognized by or any other transaction that affects the Company’s share capital, to
the AMF; or take into account its impact on the value of the share.
•• to remit shares (in exchange, payment or other) in connection with an The maximum amount of funds that can be used to finance the 2011
external growth transaction, a merger, a spin-off or contribution; or Share Buyback Program is estimated at 379 296 480 million euros, cal-
•• to implement any stock option plans the Company offers pursuant to culated on the basis of a maximum purchase price of 40 euros per share
the provisions of articles L. 225-177 et seq of the French Commercial and the share capital of Klépierre on February 28, 2011.
Code or any other similar plan; or
•• in general, to honor obligations associated with stock option plans or 7. Duration of 2011 Share Buyback Program
other allotments of stock to employees, directors or officers of the
issuing company or an associated company; or Under the eighth resolution that will be submitted to a general meeting
•• to remit shares in connection with the exercise of rights attached of shareholders for a vote on April 7, 2011, the share buyback program
to securities with a claim on the capital of the Company, by way of can be implemented over a period of eighteen months following that
redemption, conversion, exchange, presentation of a warrant or any date, i.e., until October 6, 2012.
other manner; or

Klépierre – 2010 Annual report | 253

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8. Draft resolutions
Ordinary resolutions
First resolution   Fourth resolution 
(Approval of corporate financial statements   (Appropriation of earnings for 2010 fiscal year)
for the 2010 fiscal year)
The ordinary meeting of shareholders, having fulfilled the quorum and
The general meeting of shareholders, having fulfilled the quorum and majority requirements pertaining to ordinary general meetings of share-
majority requirements pertaining to ordinary general meetings of share- holders, hereby decides to appropriate the fiscal year’s earnings of
holders, and having read the Executive Board report, the Supervisory 121,138,448.70 euros as follows:
Board report, and the statutory auditors’ report on the corporate finan-
cial statements for the fiscal year ended December 31, 2010, hereby •• Earnings for the period 121,138,448.70 euros
approves said corporate financial statements as presented in the afore- •• Allocation to legal reserve 1,074,651.60 euros
mentioned documents, showing earnings of 121,138,448.70 euros for •• Balance 120,063,797.10 euros
the period. •• Plus retained earnings 569,468,556.86 euros
It also approves the transactions reflected in the financial statements or –––––––––––––––––––––
summarized in the aforementioned reports. •• Distributable net profits of 689,532,353.96 euros
•• To shareholders as dividends 256,025,124.00 euros
Second resolution  (corresponding to a distribution of 1.35 euro per share)
(Approval of consolidated financial statements   •• Balance of retained earnings 433,507,229.96 euros
for the 2010 fiscal year)
The total dividend of 256,025,124 euros, which represents a dividend
The general meeting of shareholders, having fulfilled the quorum and of 1.35 euro per share, constitutes an income that is eligible for the 40%
majority requirements pertaining to ordinary general meetings of share- abatement mentioned in article 158, section 3, indent 2 of the French
holders, and having read the Executive Board report, the Supervisory General Tax Code.
Board report, and the statutory auditors’ report on the consolidated The general meeting of shareholders resolves that, pursuant to article
financial statements for the fiscal year ended December 31, 2010, L. 225-210 of the French Commercial Code, the dividend distributable
hereby approves said consolidated financial statements as presented in respect of treasury stock owned on the date of payment, and any
in the aforementioned documents, showing earnings for the period of amounts that the shareholders have agreed to waive, shall be allocated
182,441,000 euros. to retained earnings.
It also approves the transactions reflected in the financial statements or The dividend shall be available for payment in cash on April 14, 2011.
summarized in the aforementioned reports.
As a reminder, the following dividends per share were paid out in euros
Third resolution  in respect of the three prior fiscal years (after the 3-for-1 stock split on
(Approval of the transactions and agreements mentioned   September 3, 2007):
in article L. 225-86 of the French Commercial Code) •• In respect of 2007: 1.25 euro fully eligible for the abatement provided
for in article 158-3-2° of the French General Tax Code
The ordinary meeting of shareholders, having fulfilled the quorum and •• In respect of 2008: 1.25 euro fully eligible for the abatement provided
majority requirements pertaining to ordinary general meetings of share- for in article 158-3-2° of the French General Tax Code
holders, and having duly noted the terms of the statutory auditors’ •• In respect of 2009: 1.25 euro fully eligible for the abatement provided
special report on the agreements referred to in article L. 225-86 of the for in article 158-3-2° of the French General Tax Code
French Commercial Code and relative to the fiscal year ended
December 31, 2010, hereby approves each of the agreements pre- Pursuant to article 223 quater of the French General Tax Code, the
sented in the aforementioned document in accordance with article general meeting of shareholders approves the expenditures and
L. 225-88 of the same Code. expenses set out in article 39-4 of the same Code, which amount to a
total of 7,120.80 euros for the fiscal year ended December 31, 2010.
These expenditures and expenses reduced the deficit for the taxable
sector by 1,070.15 euros and increased the distributable net profit by
6,050.65 euros.

254 | Klépierre – 2010 Annual report

Fifth resolution  liquidity agreement that complies with the ethics charter recognized by
(Re-election of a member of the Supervisory Board   the Autorité des marchés financiers (“the AMF”); or
for another term of office) •• remitting shares (in exchange, payment or other) as part of a transaction
related to external growth, a merger, a spin-off or partial business trans-
The general meeting of shareholders, having fulfilled the quorum and fer; or
majority requirements pertaining to ordinary general meetings of share- •• implementing any Company stock option plan pursuant to articles
holders, and duly noting that the term of office of Mr. Michel Clair expires L. 225-177 et seq of the French Commercial Code or any other similar
on this day, hereby re-elects Mr. Michel Clair to the Supervisory Board plan; or
for a term of three years expiring at the close of the ordinary general •• generally, honour obligations linked to stock option plans or other
meeting of shareholders called in 2014 to approve the financial state- employee or director stock allocation, of the Company or any affiliated
ments for the 2013 fiscal year. company; or
Mr. Michel Clair has signaled his acceptance of the re-election, and has •• remitting shares in connection with the exercise of rights attached to
indicated that he is not barred, by a court of law or because of other securities with a claim on the Company’s share capital, by way of
positions or offices held, from serving on the Board. redemption, conversion, exchange, presentation of a warrant or any
other manner; or
Sixth resolution  •• cancelling all or some of these repurchased shares, pending adoption
(Re-election of a member of the Supervisory Board   by the extraordinary meeting of shareholders of the ninth resolution,
for another term of office) below, submitted to a vote at the aforementioned meeting under the
terms indicated; or
The general meeting of shareholders, having fulfilled the quorum and •• freely allotting shares in accordance with the relevant provisions of arti-
majority requirements pertaining to ordinary general meetings of share- cles L. 225-197-1 et seq of the French Commercial Code; or
holders, and duly noting that the term of office of Mr. Jérôme Bédier •• granting or selling shares to employees under profit sharing programs
expires on this day, hereby re-elects Mr. Jérôme Bédier to the offered by the Company or in connection with the implementation of any
Supervisory Board for a term of three years expiring at the close of the employee sponsored savings plan in accordance with the law, in par-
ordinary general meeting of shareholders called in 2014 to approve the ticular articles L. 3332-1 et seq of the French Labor Code.
financial statements for the 2013 fiscal year.
Mr. Jérôme Bédier has signaled his acceptance of the re-election, and Purchases of Company shares can involve a number of shares such that:
has indicated that he is not barred, by a court of law or because of other •• the number of shares that the Company buys during the buyback pro-
positions or offices held, from serving on the Board. gram shall not exceed 5% of the shares comprising the share capital of
the Company at any given time; this percentage shall apply to an
Seventh resolution  adjusted figure depending on transactions that may be completed after
(Re-election of a member of the Supervisory Board   this meeting. On December 31, 2010, there were 189,648,240 shares.
for another term of office) For information, (i) the number of shares acquired for the purpose of later
use in connection with a merger, spin-off or contribution cannot exceed
The general meeting of shareholders, having fulfilled the quorum and 5% of the Company’s share capital, and (ii) where shares are purchased
majority requirements pertaining to ordinary general meetings of share- to encourage liquidity as provided for under the General Regulations of
holders, and duly noting that the term of office of Ms Dominique the AMF, the number of shares taken into account to calculate the limit
Aubernon expires on this day, hereby re-elects Ms Dominique Aubernon of 5% stipulated in the first paragraph above corresponds to the number
to the Supervisory Board for a term of three years expiring at the close of shares purchased, less the number of shares redeemed during the
of the ordinary general meeting of shareholders called in 2014 to authorization period;
approve the financial statements for the 2013 fiscal year. •• the number of shares that the Company may hold at any given time may
Ms Dominique Aubernon has signaled her acceptance of the re-election, not exceed 10% of the shares comprising its share capital on the date
and has indicated that she is not barred, by a court of law or because under consideration.
of other positions or offices held, from serving on the Board.
The acquisition, disposal or transfer of these shares may be completed
Eighth resolution  at any time (including during pre-offering periods but not during public
(Authorization given to the Executive Board   offering periods) once or several times, and using all appropriate means
to transact in the company’s shares) within the limits of applicable laws and regulations in force; these transac-
tions shall occur through transactions on regulated markets multilateral
The general meeting of shareholders, having fulfilled the quorum and trading platforms, automatic or over the counter internalizers, including
majority requirements pertaining to ordinary general meetings of share- the use of block trades (without limiting the percentage that the buyback
holders, and having read the Executive Board report, authorizes the program can achieve using these means), public offerings, exchange, via
Executive Board, which may sub-delegate in accordance with the law, the use of options or other financial futures instruments traded on the
pursuant to the relevant provisions of articles L. 225-209 et seq of the aforementioned exchanges, following the issue of new shares in exchange
French Commercial Code, to buy or cause to be bought shares of the for securities with a claim on the Company’s capital via conversion,
Company, in particular for the purpose of: exchange, redemption, the exercise of a warrant, or by any other means,
•• stimulating trade in the secondary market or the liquidity of Klépierre directly or indirectly via an investment services provider.
stock by an investment services provider within the framework of a The maximum purchase price for shares under this resolution is set at
forty (40) euros per share (or the exchange value on the same date in

Klépierre – 2010 Annual report | 255

 General
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any other currency), it being understood that this maximum price is only amortization or any other transaction that affects the Company’s equity,
applicable to acquisitions decided on as of the date of this meeting and to adjust the aforementioned maximum purchase price in order to take
not to forward transactions concluded by virtue of an authorization into account the impact of such transactions on the share price.
granted at an earlier meeting and calling for the acquisition of shares The Executive Board is granted all necessary powers to implement this
on a date that is subsequent to the date of the present meeting. authorization and the option of delegating such powers in accordance
The total amount of the buyback program described above may not with the law. In particular, the Executive Board is authorized to deter-
exceed 379,296,480 euros. mine the terms and conditions of the buyback program; submit trading
This authorization renders null and void as of this day the unused por- orders; enter into agreements, with a view to keeping a register of sales
tion of any prior authorization given to the Executive Board to carry out and purchases of shares; allocate or reallocate shares acquired for vari-
transactions involving Company shares. It is granted for a period of ous purposes, in compliance with applicable laws and regulations;
eighteen months, as of this day. determine the terms and conditions under which, if applicable, the rights
The general meeting of shareholders hereby authorizes the Executive of bearers of marketable securities or options are to be preserved, in
Board, which may sub-delegate this power in accordance with the law, accordance with applicable legal, regulatory or contractual provisions;
where there is a change in the par value of shares, a capital increase and carry out all filings with the AMF and other competent organizations,
via the capitalization of reserves, the allotment of free shares, a stock and in general to do whatever is necessary to give effect to this
split or bundling of shares, or a distribution of or other assets, capital authorization.

Extraordinary resolutions
Ninth resolution  Tenth resolution 
(Authorization given to the Executive Board   (Approval of proposed merger involving  
to reduce share capital by canceling treasury shares) the absorption of CB Pierre by Klépierre)

The general meeting of shareholders, having fulfilled the quorum and The general meeting of shareholders, having fulfilled the quorum and
majority requirements pertaining to extraordinary general meetings of majority requirements pertaining to extraordinary general meetings of
shareholders, having reviewed the Executive Board report and the statu- shareholders:
tory auditors’ special report, hereby authorizes the Executive Board •• having reviewed the proposed merger agreement and its appendices
— which may sub-delegate this authority in accordance with the law — signed and dated February 22, 2011, between:
to reduce the company’s share capital, in one or more transactions, in – Klépierre, a French corporation (Société anonyme) with share capital
the proportions and at the time of its choosing, by canceling any quan- of 265,507,536 euros, with its head office at 21 avenue Kléber 75116
tity of treasury shares that it chooses, within the limits authorized by Paris, registration number 780152914, Paris Trade and Companies
law, pursuant to the relevant provisions of articles L. 225-209 et seq of Register,
the French Commercial Code and L. 225-213 of the same Code. – CB Pierre, a simplified joint stock company (Société par actions sim-
The capital reduction may not involve more than ten percent (10%) of plifiée) with share capital of 10,500,000 euros, with its head office at
the Company’s share capital in any given twenty-four-month period, i.e. 21 avenue Kléber 75116 Paris, registration number 343146932, Paris
189,648,240 shares at December 31, 2010. As a reminder, this upper Trade and Companies Register,
limit applies to the share capital of the Company after any adjustment according to which CB Pierre is to transfer all of its assets and liabilities
that may be made to reflect the impact of capital transactions that are to Klépierre under the terms of the merger;
carried out after the date of this general meeting of shareholders. •• having read the Executive Board report;
This authorization renders null and void as of today the unused portion •• having noted that Klépierre holds all the shares representing the capital
of any prior authorization given to the Executive Board to reduce the of CB Pierre, that Klépierre company shares cannot be exchanged for
share capital by canceling treasury shares. It is granted for a period of CB Pierre company shares and, consequently, that the merger does not
twenty-four months, as of this day. entail any increase in the share capital of Klépierre and that CB Pierre
The general meeting of shareholders hereby grants the Executive Board will be immediately dissolved directly and exclusively as a consequence
— which may sub-delegate this authority in accordance with the law — of the definitive execution of the merger;
broad authority to carry out any operations to cancel shares and reduce approves this agreement and decides on the merger with CB Pierre,
capital under this authorization, to amend the bylaws accordingly, and approves (i) the transfer of all assets of CB Pierre (“transmission univer-
to accomplish all required formalities. selle du patrimoine”), (ii) the valuation of all assets and liabilities, amount-
ing to 18,534,472.59 euros and 5,270,019.75 euros respectively, and
(iii) the positive merger bonus of 13,264,442.07 euros,

256 | Klépierre – 2010 Annual report

expressly approves, where necessary, stipulations in the merger agree- proposed at today’s meeting. This ceiling, where applicable, may be
ment relating to determining and using the positive merger bonus. supplemented by the nominal amount of extra shares to be issued in
the event of new financial transactions, to retain the rights of bearers
Eleventh resolution  of securities with a claim on the Company’s capital,
(Recognition of the definitive nature of the merger   •• where debt securities are issued pursuant to this authorization, the
and of the dissolution of CB Pierre) maximum nominal amount of the debt securities thus issued may not
exceed one billion two hundred million euros or the exchange value
The general meeting of shareholders, having fulfilled the quorum and of this amount in euros on the date of issue, supplemented, where
majority requirements pertaining to extraordinary general meetings of applicable, by any above-par redemption premium, with the under-
shareholders, recognizes that owing to the adoption of the previous standing that this amount is not cumulative with the blanket ceiling
resolution, the condition foreseen under the eighth section of the merger set out in the twenty-first resolution proposed at today’s meeting;
proposal has been achieved, and that consequently the merger of 4. sets the term of this authorization at twenty-six months from the date
CB Pierre into Klépierre is now definitive, with immediate effect, and that of this meeting;
therefore CB Pierre has been definitively dissolved, without any liquida- 5. where the Executive Board avails of this authorization:
tion operation. •• decides that shareholders shall have a preemptive right to apply for
such issue or issues in proportion to the number of shares held at that
Twelfth resolution  time on an irreducible basis,
(Delegation to be granted to the Executive Board to increase •• notes that the Executive Board may allow shareholders to subscribe
share capital by issuing — with maintenance of preferential excess shares on a reducible basis,
subscription rights — shares and/or securities with a claim   •• notes that this authorization entails the waiver by shareholders of their
on the Company’s capital and/or issuing securities that confer preferential right to subscribe to the shares linked to any securities
entitlement to receive allocations of debt securities) issued with a claim on the Company’s share capital for the benefit of
the holders of these securities,
The general meeting of shareholders, having fulfilled the quorum and •• notes that in accordance with article L. 225-134 of the French
majority requirements pertaining to extraordinary general meetings of Commercial Code, where the irreducible subscriptions and, where
shareholders, having reviewed the Executive Board report and the statu- applicable, the reducible subscriptions, have not absorbed the entirety
tory auditors’ special report, and pursuant to the relevant provisions of of the capital increase, the Executive Board may use one of the fol-
articles L. 225-129 et seq of the French Commercial Code, in particular lowing facilities, as provided for by law and as it so determines:
article L. 225-129-2 of the same Code, and to the provisions of articles – limit the capital increase to the amount of securities subscribed pro-
L. 228-91 et seq of the same Code: vided that these account for at least three-quarters of the increase
1. hereby authorizes the Executive Board, which may sub-delegate this initially determined,
power in accordance with the law, subject to the prior consent of the – distribute freely all or some of the shares or, in the case of securities
Supervisory Board pursuant to article 16-3 of the bylaws, to increase with a claim on the share capital, the issue of which has been deter-
the share capital in one or more transactions, in France or abroad, mined but which have not been subscribed,
in the proportions and at a time of its choosing, in euros, or any other – put all or some of the shares or securities, in the case of securities
currency or currency unit established in reference to several curren- with a claim on the capital, that are not subscribed, to public tender
cies by issuing shares (excluding preferred shares) and/or securities on the French market or abroad;
with a claim on the Company’s capital (new or existing), or securities •• decide that Company warrants may be issued by subscription offer
that confer entitlement to receive allocations of debt securities, or by free attribution to existing shareholders, with the understanding
against payment or free of charge, governed by articles L. 225-149 that the Executive Board may determine that fractional rights are not
et seq and L. 228-91 et seq of the French Commercial Code, with transferable and that the corresponding shares are to be sold;
the understanding that shares and other securities may be sub- 6. decides that the Executive Board has full powers, with the option of
scribed in cash, through debt conversion, or partially or in full, via the delegating such powers in accordance with the law to implement this
capitalization of reserves, earnings or premium; authorization and in particular to:
2. hereby authorizes the Executive Board, which may sub-delegate this •• decide to increase the share capital and determine the securities to
power in accordance with the law, to issue securities with a claim on be issued,
the capital of the company which holds over half of its share capital •• determine the amount of the capital increase, the issue price and any
directly or indirectly, or companies in which it holds over half of the issue premium charged,
share capital directly or indirectly, it being agreed that these security •• determine the dates and conditions of the capital increase, the nature,
issues must be authorized by the company in which these rights are number and features of the securities to be created; in addition, in the
exercised; case of bonds or other debt securities (including securities that confer
3. decides that, where the Executive Board avails of this authorization, entitlement to receive allocations of debt securities as provided for in
the capital increases will be capped as follows: article L. 228-91 of the French Commercial Code) determine whether
•• the maximum nominal amount of the capital increases that may be these are to be subordinated or not (and if so their ranking, in accor-
made immediately or eventually by virtue of this authorization is set at dance with article 228-97 of the French Commercial Code), set their
60 million euros, with the understanding that this amount is not cumu- interest rate (in particular fixed, variable, zero-coupon or indexed) and
lative with the blanket ceiling set out in the twenty-first resolution where applicable provide for obligatory or optional cases of suspen-

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sion or non-payment of interest, specify their term (fixed or open- 7. duly notes that this authorization renders null and void as of this day
ended), the possibility of reducing or increasing the nominal amount the unused portion of any prior authorization given to the Executive
of the securities and other issue conditions (including whether to Board to increase the share capital with maintenance of preferential
confer guarantees or pledges) and of amortization (including redemp- rights and covering securities and transactions referred to in this
tion through the remittance of Company assets); where applicable, resolution;
these securities may come with warrants with an entitlement to the 8. duly notes that where the Executive Board avails of the authorization
allocation, acquisition or subscription of bonds or other debt securities granted hereby to it, the Executive Board shall report to the following
or provide the Company with a faculty to issue debt securities (quasi- ordinary meeting of shareholders, in accordance with the laws and
equity or not) to pay interest the payment of which has been sus- regulations, on its use of the authorizations granted herein.
pended by the Company or take the form of complex bonds as
defined by the stock market authorities (for example, due to their Thirteenth resolution 
conditions of repayment or remuneration or other rights such as (Delegation to be granted to the Executive Board to increase
indexing and option faculty); change the above conditions throughout share capital by issuing — without maintenance of preferential
the term of the securities subject to compliance with the applicable rights — shares and/or securities that confer a right to the
formalities, Company’s capital and/or issuing securities that confer
•• determine the payment method for the shares or securities with a entitlement to receive allocations of debt securities through  
claim on the capital to be issued immediately or in the future, a public offering)
•• where applicable, set the conditions for exercising the rights (where
applicable conversion, exchange and redemption rights, including The general meeting of the shareholders, having fulfilled the quorum and
through remittance of Company assets such as securities already majority requirements pertaining to extraordinary general meetings of share-
issued by the Company) attached to the shares or securities with a holders, having reviewed the Executive Board report and the statutory
claim on the capital to be issued and, in particular, to determine the auditors’ special report, and pursuant to the relevant provisions of articles
date, even retroactively, from which the new shares will begin earning L. 225-209 et seq of the French Commercial Code, in particular article
dividends and any other conditions relating to the capital increase, L. 225-129-2, L. 225-135, L. 225-136 and L. 225-148 of the same Code,
•• set the conditions under which the Company may, where applicable, and to the provisions of articles L. 228-91 et seq of the same Code:
purchase or exchange on the stock market, at any time or during set 1. hereby authorizes the Executive Board, which may sub-delegate this
periods, the issued or to be issued securities, in order to cancel them power in accordance with the law, subject to the prior consent of the
or not, in accordance with legal provisions, Supervisory Board pursuant to article 16-3 of the bylaws, to increase
•• provide the power to suspend the exercise of rights attached to these the share capital in one or more transactions, in France or abroad,
securities in accordance with the legal and regulatory provisions, in the proportions and at a time of its choosing, through a public
•• on its own initiative, charge the costs of the capital increase to the offering in euros, or any other currency or currency unit established
related premium and to deduct the necessary amounts from said in reference to several currencies by issuing shares (excluding pre-
premium for allocation to the legal reserve, ferred shares) and/or securities that confer a right to the Company’s
•• determine and proceed with any adjustments that take into account capital (new or existing), or securities that confer entitlement to
the impact of transactions on the Company’s share capital, in particu- receive allocations of debt securities, against payment or free of
lar where there is a change in the par value of shares, a capital charge, governed by articles L. 228-91 et seq of the French
increase via the capitalization of reserves, a free share distribution, a Commercial Code, with the understanding that shares and other
stock split or bundling, a distribution of dividends, reserves or pre- securities may be subscribed in cash, through debt conversion, or
mium or any other assets, capital amortization or any other transac- through the capitalization of reserves, earnings or premium or, under
tion involving shareholder’s equity or share capital (including in the the same conditions, by issuing securities that confer entitlement to
case of public offering and/or a change of control) and set any other receive allocations of debt securities governed by articles L. 228-91
conditions to ensure that the rights of holders of securities with a claim et seq of the French Commercial Code; These securities may be
on the capital (including through cash adjustments) are respected; issued to fund contributions of securities to the Company as part of
•• carry out each capital increase and amend the bylaws accordingly, a public exchange offer in France or abroad in accordance with local
•• generally, enter into any and all agreements, including any perfor- rules pertaining to securities, according to the conditions set out in
mance agreement on the contemplated issues, take any and all mea- article L. 225-148 of the French Commercial Code;
sures and perform any and all formalities related to the issue, listing
and servicing of the securities issued under this authorization and the
exercise of related rights;

258 | Klépierre – 2010 Annual report

2. hereby authorizes the Executive Board, which may sub-delegate this 7. duly notes that where the subscriptions, including, where applicable,
power in accordance with the law, to issue shares or securities that shareholders’ subscriptions, have not absorbed the entirety of the
confer a right to the Company’s capital to be issued following the issue, the Executive Board may limit the transaction value to the value
issuing of securities that confer a right to the Company’s capital by of the subscriptions received, provided that these amount to at least
companies in which the Company holds over half of the share capital three quarters of the issue initially determined;
either directly or indirectly, or by companies that hold over half of its 8. duly notes that this authorization entails the waiver by shareholders
capital either directly or indirectly. of their preferential right to subscribe any securities issued that confer
This authorization entails, for holders of securities which may be a right on the Company’s share capital for the benefit of the holders
issued by the companies within the Company’s group, the waiver by of these securities;
shareholders of their preferential right to subscribe any shares or 9. duly notes that in accordance with article L. 225-136 1°, par. 1 of the
securities conferring rights to the Company’s share capital; French Commercial Code:
3. hereby authorizes the Executive Board, which may sub-delegate in •• the price of directly issued shares shall be at least equal to the mini-
accordance with the law, to issue securities that confer rights on the mum provided for by the regulatory provisions applicable on the issue
share capital of the company which holds over half of its share capital date (i.e. the average weighted share price for the last three trading
directly or indirectly, or companies in which it holds over half of the days on the regulated Euronext Paris market prior to the date on
share capital directly or indirectly, it being agreed that these security which the issue conditions are set, less 5%) after this average has
issues must be authorized by the company in which these rights are been adjusted in the case of a difference between entitlement dates,
exercised; where applicable,
4. decides that, where the Executive Board avails of this authorization, •• the issue price for securities conferring a right on the Company’s
the capital increases will be capped as follows: capital, and the number of shares to which the conversion, redemp-
•• the maximum nominal amount of the capital increases that may be tion or generally transformation of each security conferring a right on
made immediately or in the future by virtue of this authorization is set share capital will entitle, will be such that the sum received by the
at forty million euros, with the understanding that this amount is not Company, plus any future sum that it might receive, for each share
cumulative with the nominal ceiling for capital increases without pref- issued subsequent to the issuing of these securities, is at least equal
erential subscription rights as set out in paragraph 4 of the fourteenth to the minimum subscription price set out in the preceding
resolution proposed at the present meeting, nor with the blanket ceil- paragraph;
ing set out in the twenty-first resolution proposed at the present 10. decides that the Executive Board has full powers and the option of
meeting, delegating such powers in accordance with the law to implement
•• these ceilings may, where applicable, be supplemented by the nomi- this authorization and in particular to:
nal amount of shares to be issued in the event of new financial trans- •• decide to increase the share capital and determine the securities to
actions, to protect the rights of bearers of securities that confer a right be issued,
to the Company’s capital, •• determine the amount of the capital increase, the issue price and any
•• where debt securities are issued pursuant to this authorization, the issue premium charged,
maximum nominal amount of the debt securities thus issued may not •• determine the dates and conditions of the capital increase, the nature,
exceed eight hundred million euros or the exchange value in euros of number and characteristics of the securities to be created; in addition,
this amount on the issue date, supplemented, where applicable, by in the case of bonds or other debt securities (including securities that
any above-par redemption premium, with the understanding that this confer entitlement to receive allocations of debt securities as provided
amount is not cumulative with the nominal ceiling for issues of debt for in article L. 228-91 of the French Commercial Code) determine
securities as set out in paragraph 4 of the fourteenth resolution pro- whether these are to be subordinated or not (and if so their ranking,
posed at the present meeting, nor with the blanket ceiling set out in in accordance with article 228-97 of the French Commercial Code),
the twenty-first resolution proposed at the present meeting; set their interest rate (in particular fixed, variable, zero-coupon or
5. sets the term of this authorization at twenty-six months from the date indexed) and where applicable provide for obligatory or optional cases
of the present meeting; of suspension or non-payment of interest, specify their term (fixed or
6. decides to waive the preferential right of shareholders to subscribe open-ended), the possibility of reducing or increasing the nominal
the securities referred to in this resolution. However, the Executive amount of the securities and other issue conditions (including whether
Board, in accordance with article L. 225-135, section 2, may decide to confer guarantees or pledges) and of amortization (including
to grant shareholders a priority subscription period for a period and redemption through the remittance of Company assets); where appli-
according to conditions determined by it in accordance with the cable, these securities may come with warrants with an entitlement
applicable statutory and regulatory provisions, for all or part of the to the allocation, acquisition or subscription of bonds or other debt
issue. This priority subscription period shall not give rise to the cre- securities or provide the Company with a faculty to issue debt securi-
ation of negotiable rights and must be exercised in proportion to the ties (quasi-equity or not) to pay interest the payment of which has
number of shares owned by each shareholder, and may be supple- been suspended by the Company or take the form of complex bonds
mented by a right to subscribe shares on a reducible basis, with the as defined by the stock market authorities (for example, due to their
understanding that unsubscribed securities are offered publicly in conditions of repayment or remuneration or other rights such as
France or abroad; indexing and option faculty); change the above conditions throughout
the term of the securities subject to compliance with the applicable
formalities;

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•• determine the payment method for the shares or securities that confer 11. duly notes that this authorization renders null and void as of this day
a right to the capital to be issued immediately or in the future, the unused portion of any prior authorization given to the Executive
•• where applicable, set the conditions for exercising the rights (where Board to increase the share capital without preferential right issues
applicable conversion, exchange and redemption rights, including and covering securities and transactions referred to in this
through remittance of Company assets such as treasury stock or resolution;
securities already issued by the Company) attached to the shares or 12. duly notes that where the Executive Board avails of the authorization
securities that confer a right to the capital to be issued and, in particu- granted hereby to it, the Executive Board shall report to the following
lar, to determine the date, even retroactively, from which the new ordinary meeting of shareholders, in accordance with the laws and
shares will begin earning dividends and any other conditions relating regulations, on its use of the authorizations granted herein.
to the capital increase,
•• set the conditions under which the Company may, where applicable, Fourteenth resolution  
purchase or exchange on the stock exchange, at any time or during (Delegation to be granted to the Executive Board to increase
set periods, the issued or to be issued securities, in order to cancel share capital by issuing — without maintenance of preferential
them or not, in accordance with legal provisions, rights— shares and/or securities that confer a right to the
•• provide the power to suspend the exercise of rights attached to the Company’s capital and/or issuing securities that confer
securities issued in accordance with the legal and regulatory entitlement to receive allocations of debt securities,  
provisions, through private placement governed by article L.411-2 II  
•• where securities are issued to fund contributions of securities as part of the French Monetary and Financial Code)
of a public offer with an exchange component; determine the list of
securities contributed to the exchange; set the issue conditions, The general meeting of shareholders, having fulfilled the quorum and
exchange parity and, where applicable, the amount of the remainder majority requirements pertaining to extraordinary general meetings of
to be paid in cash while remaining outside the scope of the methods shareholders, having reviewed the Executive Board report and the statu-
used to determine price set out in paragraph 9 of this resolution; and tory auditors’ special report, and pursuant to the relevant provisions of
determine the issue conditions for a public exchange offer, a public articles L. 225-129 et seq of the French Commercial Code, in particular
offer with purchase or exchange option, or a single purchase or article L. 225-129-2, L. 225-135 and L. 225-136 of the same Code,
exchange offer for the securities against payment in securities and and to the provisions of articles L. 228-91 et seq of the same Code:
cash, or a public bid or a primary exchange proposal combined with 1. hereby authorizes the Executive Board, which may sub-delegate this
a subsidiary public exchange offer or public bid, or any other form of power in accordance with the law, subject to the prior consent of the
public offer in accordance with the law and regulations applicable to Supervisory Board pursuant to article 16-3 of the bylaws, to increase
said public offer, the share capital in one or more transactions, in France or abroad,
•• on its own initiative, charge the costs of the capital increases to the in the proportions and at a time of its choosing, through an offering
related premium and to deduct the necessary amounts from said governed by article L.411-2 II of the French Monetary and Financial
premium for allocation to the legal reserve, Code, in euros or any other currency or currency unit established in
•• determine and proceed with any adjustments to take into account reference to several currencies by issuing shares (excluding preferred
the impact of transactions on the Company’s capital, in particular in shares) and/or securities that confer a right to the Company’s capital
the case of a change in the par value of shares, a capital increase via (new or existing), against payment or free of charge, governed by
the capitalization of reserves, a free share distribution, a stock split or articles L. 228-91 et seq of the French Commercial Code, with the
bundling, a distribution of reserves or premium or any other assets, understanding that shares and other securities may be subscribed
capital amortization or any other transaction involving shareholders’ in cash, through debt conversion, or through the capitalization of
equity or share capital (including through public offering and/or a reserves, earnings or premium or, under the same conditions, by
change of control) and set conditions to ensure that the rights of hold- issuing securities that confer entitlement to receive allocations of debt
ers of securities conferring a rights on the share capital (including securities governed by articles L. 228-91 et seq of the French
through cash adjustments) are respected, Commercial Code;
•• carry out each capital increase and amend the bylaws accordingly,
•• generally enter into any and all agreements, including any perfor-
mance guarantees on the contemplated issues, take any and all mea-
sures and perform any and all formalities related to the issue, listing
and servicing of the securities issued under this authorization and the
exercise of related rights;

260 | Klépierre – 2010 Annual report

2. hereby authorizes the Executive Board, which may sub-delegate this 8. duly notes that this authorization entails the waiver by shareholders
power in accordance with the law, to issue shares or securities that of their preferential right to subscribe any securities issued that confer
confer a right to the Company’s capital to be issued following the a right to the Company’s capital for the benefit of the holders of these
issuing of securities conferring a right to the Company’s capital by securities;
companies in which the Company holds over half of the share capital 9. duly notes that in accordance with article L. 225-136 1°, paragraph 1
either directly or indirectly, or by companies that hold over half of its of the French Commercial Code:
capital either directly or indirectly. •• the price of directly issued shares shall be at least equal to the mini-
This authorization entails, for holders of securities which may be mum provided for by the regulatory provisions applicable on the issue
issued by the companies within the Company’s group, the waiver by date (i.e. the average weighted share price for the last three trading
shareholders of their preferential right to subscribe any shares or days on the regulated Euronext Paris market prior to the date on
securities conferring rights to the Company’s share capital; which the issue conditions are set, less 5%) after this average has
3. hereby authorizes the Executive Board, which may sub-delegate in been adjusted in the case of a difference between entitlement dates,
accordance with the law, to issue securities that confer a right to the where applicable,
capital of the company which holds over half of its share capital •• the issue price for securities conferring a right on the Company’s
directly or indirectly or companies in which it holds over half of the capital, and the number of shares to which the conversion, redemp-
share capital directly or indirectly, it being agreed that these security tion or generally transformation of each security conferring a right on
issues must be authorized by the company in which these rights are share capital will entitle, will be such that the sum received by the
exercised; Company, plus any future sum that it might receive, for each share
4. decides that, where the Executive Board avails of this authorization, issued subsequent to the issuing of these securities, is at least equal
the capital increases will be capped as follows: to the minimum subscription price set out in the preceding
•• the maximum nominal amount of the capital increases that may be paragraph;
made immediately or eventually by virtue of this authorization is set at 10. decides that the Executive Board has full powers, and the option of
forty million euros, with the understanding that this amount is not cumu- delegating such powers in accordance with the law, to implement
lative with the nominal ceiling for capital increases without preferential this authorization and in particular to:
subscription rights as set out in paragraph 4 of the thirteenth resolution •• decide to increase the share capital and determine the securities to
proposed at today’s meeting nor with the blanket ceiling set out in the be issued,
twenty-first resolution proposed at the present meeting, •• determine the amount of the capital increase, the issue price and any
•• in all circumstances, equity securities issued by virtue of this autho- issue premium charged,
rization shall not exceed the limits set out in the regulations applicable •• determine the dates and conditions of the capital increase, the nature,
on the issue date (currently 20% of capital per year), the number and features of the securities to be created; in addition,
•• these ceilings may, where applicable, be supplemented by the nomi- in the case of bonds or other debt securities (including securities that
nal amount of shares to be issued in the event of new financial trans- confer entitlement to receive allocations of debt securities as provided
actions, to protect the rights of bearers of securities conferring a right for in article L. 228-91 of the French Commercial Code) determine
to the Company’s capital, and whether these are to be subordinated or not (and if so their ranking,
•• where debt securities are issued pursuant to this authorization, the in accordance with article 228-97 of the French Commercial Code),
maximum nominal amount of the debt securities thus issued may not set their interest rate (in particular fixed, variable, zero-coupon or
exceed eight hundred million euros or the exchange value in euros of indexed) and where applicable provide for obligatory or optional cases
this amount on the date of issue, supplemented, where applicable, of suspension or non-payment of interest, specify their term (fixed or
by any above-par redemption premium, with the understanding that open-ended), the possibility of reducing or increasing the nominal
this amount is not cumulative with the nominal ceiling for issues of amount of the securities and other issue conditions (including whether
debt securities as set out in paragraph 4 of the thirteenth resolution to confer guarantees or pledges) and of amortization (including
proposed at the present meeting nor with the blanket ceiling set out redemption through the remittance of Company assets); where appli-
in the twenty-first resolution proposed at the present meeting; cable, these securities may come with warrants with an entitlement
5. sets the term of this authorization at twenty-six months from the date to the allocation, acquisition or subscription of bonds or other debt
of the present meeting; securities or provide the Company with a faculty to issue debt securi-
6. decides to waive the preferential right of shareholders to subscribe ties (quasi-equity or not) to pay interest the payment of which has
the securities referred to in this resolution; been suspended by the Company or take the form of complex bonds
7. duly notes that where the subscriptions have not absorbed the as defined by the stock market authorities (for example, due to their
entirety of the issue, the Executive Board may limit the transaction conditions of repayment or remuneration or other rights such as
value to the value of the subscriptions received, provided that these indexing and option faculty); change the above conditions throughout
amount to at least three quarters of the issue initially determined; the term of the securities subject to compliance with the applicable
formalities,

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•• determine the payment method for the shares or securities that confer 13. duly notes that where the Executive Board avails of the authorization
a right to the capital to be issued immediately or in the future, granted hereby to it, the Executive Board shall report to the following
•• where applicable, set the conditions for exercising the rights (where ordinary meeting of shareholders, in accordance with the laws and
applicable conversion, exchange and redemption rights, including regulations, on its use of the authorizations granted herein.
through remittance of Company assets such as treasury stock or
securities already issued by the Company) attached to the shares or Fifteenth resolution 
securities that confer a right to the capital to be issued and, in particu- (Determining the share issue price, up to 10% of the  
lar, to determine the date, even retroactively, from which the new share capital per year, under a capital increase through  
shares will begin earning dividends and any other conditions relating the issuing of shares without preferential subscription rights)
to the capital increase,
•• set the conditions under which the Company may, where applicable, The general meeting of shareholders, having fulfilled the quorum and
purchase or exchange on the stock exchange, at any time or during majority requirements pertaining to extraordinary general meetings of
set periods, the issued or to be issued securities, in order to cancel shareholders, having reviewed the Executive Board report and the statu-
them or not, in accordance with legal provisions, tory auditors’ special report, and pursuant to the relevant provisions of
•• provide the power to suspend the exercise of rights attached to the articles L. 225-129-2 and of article L. 225-136 1° of the French
securities issued in accordance with the legal and regulatory Commercial Code, up to 10% of share capital per year – this percent-
provisions, age rising in proportion to the Company’s capital at any time, whereby
•• on its own initiative, charge the costs of the capital increases to the this percentage is applied to an adjusted figure depending on transac-
related premium and to deduct the necessary amounts from said tions that may be completed after this meeting (for information, on
premium for allocation to the legal reserve, December 31, 2010, there were 189,648,240 shares) – hereby autho-
•• determine and proceed with any adjustments to take account of the rizes the Executive Board, which may sub-delegate this power in accor-
impact of transactions on the Company’s capital, in particular in the dance with the law, subject to the prior consent of the Supervisory
case of a change in the par value of shares, a capital increase via the Board pursuant to article 16-3 of the bylaws, to set the issue price in
capitalization of reserves, a bonus share issue, a stock split or bun- accordance with the following conditions:
dling of shares, a distribution of reserves or any other assets, capital
amortization or any other transaction involving treasury stock or share the sum due to the Company for each of the shares issued under this
capital (including through public offering and/or a change in control) authorization, taking into account the issue price of stock warrants
and set conditions to ensure that the rights of holders of securities where such warrants have been issued, must be at least equal to 85%
conferring a right to the share capital (including through cash adjust- of the weighted average share price for the last three trading days prior
ments) are respected, to the date on which the issue conditions are set.
•• carry out each capital increase and amend the bylaws accordingly,
•• generally, enter into any and all agreements, including any perfor- The maximum nominal amount of the capital increases that may be
mance guarantees on the contemplated issues, take any and all mea- made immediately or in the future by virtue of this authorization is not
sures and perform any and all formalities related to the issue, listing cumulative with the blanket ceiling set out in the twenty-first resolution
and servicing of the securities issued under this authorization and the proposed at the present meeting.
exercise of related rights; This authorization is given for a period of twenty-six months as of the
11. recognizes that as this authorization is not a general authorization date of this meeting.
relating to a capital increase without preferential subscription rights The shareholders note that where the Executive Board avails of this
but an authorization relating to a capital increase without preferential authorization, it shall prepare an additional report, certified by the audi-
subscription rights through an offer governed by article L. 411-2, II tors, that sets out the definitive conditions governing this transaction
of the French Monetary and Financial Code, it does not have the and providing sufficient information on how this affects the position of
same purpose as the thirteenth resolution proposed at today’s meet- shareholders.
ing; consequently, this authorization does not render the thirteenth
resolution proposed at today’s meeting null and void, the validity and
term of which are not affected by this authorization;
12. duly notes that this authorization renders null and void as of today
the unused portion of any prior authorization given to the Executive
Board to increase the share capital without preferential right issues
through an offer governed by article 411-2, II of the French Monetary
and Financial Code, covering securities and transactions referred to
in this resolution;

262 | Klépierre – 2010 Annual report

Sixteenth resolution  2. gives full powers to the Executive Board, which may sub-delegate
(Delegation to be granted to the Executive Board to increase   this power in accordance with the law, subject to the prior consent
the number of securities to be issued in the case of a capital of the Supervisory Board pursuant to article 16-3 of the bylaws, to
increase with or without preferential subscription rights) implement this resolution and in particular to:
•• increase share capital and determine the securities to be issued,
The general meeting of shareholders, having fulfilled the quorum and •• determine the list of securities contributed, approve the contributions’
majority requirements pertaining to extraordinary general meetings of valuation, set the conditions for issuing the securities to fund the
shareholders, having reviewed the Executive Board report and the audi- contributions, and, where applicable, the amount of the remainder to
tors’ special report, and pursuant to the relevant provisions of articles be paid in cash, approve the granting of specific benefits, and reduce,
L. 225-135-1 of the French Commercial Code: subject to the contributors’ agreement, the valuation of the contribu-
1. hereby authorizes the Executive Board, which may sub-delegate this tions or the payment of specific benefits,
power in accordance with the law, to increase the number of securi- •• determine the features of the securities funding contributions and set
ties to be issued in the event of an increase in the Company’s share the terms to ensure that the rights of holders of securities with a claim
capital with or without preferential subscription rights, as set out in on the capital are respected, where applicable,
the twelfth, thirteenth and fourteenth resolutions, at the same price •• on its own initiative, charge the costs of the capital increases to the
as that retained for the initial issue, within the time-frames and limits related premium and deduct the necessary amounts from said pre-
provided for in the regulations applicable on the issue date (currently, mium for allocation to the legal reserve,
within thirty days of the end of the subscription period and up to 15% •• carry out each capital increase and amend the bylaws accordingly,
of the initial issue), in particular in order to grant an over-allocation •• more generally, take any and all measures and perform any and all
option in accordance with market practice; formalities related to the issue, listing and servicing of the securities
2. decides that the nominal capital increase determined by this resolu- issued under this authorization and the exercise of related rights;
tion shall not be cumulative with the blanket ceiling applicable to the 3. notes that this authorization renders null and void as of today the
initial issue nor with the blanket ceiling set out in the twenty-first reso- unused portion of any prior authorization with the same purpose, i.e.
lution proposed at today’s meeting. any authorization to issue shares or securities with a claim on the
This authorization is given for a period of twenty-six months as of the capital without preferential right issues to fund contributions in kind
date of this meeting. of equity shares or securities with a claim on the capital. This autho-
rization is given for a period of twenty-six months as of the date of
Seventeenth resolution  this meeting.
(Option to issue shares or securities with a claim  
on the Company’s capital without preferential subscription   Eighteenth resolution 
rights to fund contributions in kind of equity shares or securities (Delegation to be granted to the Executive Board  
with a claim on the Company’s capital) to increase the share capital through the capitalization  
of premium, reserves, earning or others)
The general meeting of shareholders, having fulfilled the quorum and
majority requirements pertaining to extraordinary general meetings of The general meeting of shareholders, having fulfilled the quorum and
shareholders, having reviewed the Executive Board report and the audi- majority requirements pertaining to extraordinary general meetings of
tors’ special report, and pursuant to the relevant provisions of articles shareholders, having reviewed the Executive Board report, and subject
L. 225-129 et seq, of the French Commercial Code, in particular article to the prior consent of the Supervisory Board pursuant to article 16-3
L. 225-147, par. 6 of the same code: of the bylaws, pursuant to the relevant provisions of article L. 225-130
1. hereby authorizes the Executive Board, which may sub-delegate this of the French Commercial Code:
power in accordance with the law, subject to the prior consent of the 1. hereby authorizes the Executive Board, which may sub-delegate this
Supervisory Board pursuant to article 16-3 of the bylaws, to proceed power in accordance with the law, to increase the share capital in
with the capital increase, in one or more transactions up to 10% of one or more transactions, in the proportions and at a time of its
share capital applied at any given time to an adjusted figure depend- choosing through the successive or simultaneous capitalization of all
ing on transactions that may be completed after this meeting (for or some of the reserves, earnings or issue, merger or contribution or
information, on December 31, 2010, there were 189,648,240 shares), other premium, where their capitalization is authorized by law and by
to fund contributions in kind of shares or securities with a claim on the bylaws, through a free share distribution, an increase in the par
the capital granted to the Company, where the provisions of article value of existing shares or both. The maximum nominal amount of
L. 225-148 of the French Commercial Code do not apply, through the capital increases that may be made by virtue of this authorization
the issue, in one or more transactions, of shares (excluding preferred is set at one hundred million euros, with the understanding that this
shares) or securities with a claim on the Company’s capital, with the amount is not cumulative with the blanket ceiling set out in the
understanding that the maximum nominal amount of the capital twenty-first resolution proposed at today’s meeting;
increases that may be made immediately or in the future by virtue of
this resolution is not cumulative with the blanket ceiling set out in the
twenty-first resolution proposed at today’s meeting;

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2. where the Executive Board avails of this authorization, gives it full Nineteenth resolution 
powers and the option of delegating such powers in accordance with (Delegation to be granted to the Executive Board to increase  
the law to implement this authorization and in particular to: the share capital by issuing shares or securities with a claim  
•• set the amount and nature of the sums to be capitalized, set the on the capital reserved for members of employee savings plans
number of new shares and/or the amount by which the nominal without preferential subscription rights for the benefit  
amount of existing securities will be increased, set the date, even of the latter)
retroactively, from which the new shares will begin earning dividends
or the date when increase in the par value of existing shares comes The general meeting of shareholders, having fulfilled the quorum and
into effect, majority requirements pertaining to extraordinary general meetings of
•• decide, where free shares are distributed: shareholders, having reviewed the Executive Board report and the statu-
– that fractional shares are not transferable and that the corresponding tory auditors’ special report, and pursuant to the relevant provisions of
shares will be sold; the sums arising from the sale to be allocated to articles L. 225-129-2, L. 225-129-6 and L. 225-138-1 of the French
rightholders in accordance with the law and regulation, Commercial Code, and to those of articles L. 3332-18 to L. 3332-24 of
– that shares allocated by virtue of this authorization in proportion to the French Labor Code:
existing shares carrying double voting rights will benefit from this right 1. hereby authorizes the Executive Board, which may sub-delegate this
upon issue, power in accordance with the law, subject to the prior consent of the
•• proceed with any adjustments to take account of the impact of trans- Supervisory Board pursuant to article 16-3 of the bylaws, to increase
actions on the Company’s capital, in particular in the case of a change the share capital in one or more transactions, by a maximum of three
in the par value of shares, a capital increase via the capitalization of million euros, by issuing shares or securities with a claim on the capi-
reserves, a free share or equity related security issue, a stock split or tal reserved for members of one or more employee savings plans (or
bundling, a distribution of reserves or any other assets, capital amor- any other plan permitted by articles L. 3332-1 et seq of the French
tization or any other transaction involving shareholders’ equity or Labor Code or any similar law or regulation that enables a capital
share capital (including through public offering and/or a change of increase to be reserved under similar conditions) set up by a French
control) and set conditions to ensure that the rights of holders of or foreign company or group of companies within the scope of con-
securities with a claim on the capital are respected, and carry out any solidation or combination of the Company’s accounts in accordance
necessary formalities to render definitive the capital increase or with article L. 3344-1 of the French Labor Code, with the understand-
increases carried out, ing that this resolution may be used to implement leveraged formulas
•• carry out each capital increase and amend the bylaws accordingly, and that the maximum amount of the capital increases that may be
•• more generally, enter into any agreement, take any measures and made immediately or in the future by virtue of this authorization is not
perform any formalities related to the issue, listing and servicing of cumulative with the blanket ceiling set out in the twenty-first resolu-
the securities issued under this authorization and the exercise of tion proposed at today’s meeting;
related rights; 2. sets the term of this authorization at twenty-six months from the date
3. notes that this authorization renders null and void as of today the of this meeting;
unused portion of any prior authorization with the same purpose, i.e. 3. decides that the issue price for new shares or securities with a claim
any authorization relating to the increase in share capital through the on the capital will be determined in accordance with articles L. 3332-
capitalization of premium, reserves, earnings or others. This autho- 18 et seq of the French Labor Code and will be at least equal to 80%
rization is given for a period of twenty-six months as of the date of of the Reference Price (as defined hereafter) or at 70% of the
this meeting. Reference Price where the lock-up period provided for by the plan in
accordance with articles L. 3332-25 and L. 3332-26 of the French
Labor Code is higher than or equal to ten years. However, the share-
holders expressly authorize the Executive Board to reduce or cancel
the abovementioned discounts (within the legal and regulatory limits)
as it sees fit, in particular to take into account inter alia legal, account-
ing, fiscal and corporate regimes applicable locally, among others.
For the purposes of this paragraph, the Reference Price refers to the
average share price for the last twenty trading days on the regulated
NYSE Euronext Paris market prior to the date of the decision to open
subscriptions for members of an employee savings plan;

264 | Klépierre – 2010 Annual report

4. authorizes the Executive Board to allocate free of charge to the capital within the legal and regulatory limits in force and in particular
abovementioned beneficiaries in addition to shares or securities with to decide either to substitute all or some of the discount on shares or
a claim on the capital to be subscribed in cash, shares or securities securities granted under the Reference Price stipulated above, or to
with a claim on the capital or already issued, to replace all or part of charge the discount to the total contribution or to combine both
the discount relating to the Reference Price and/or contribution, with options,
the understanding that the advantage resulting from this allocation •• where new shares are issued, charge the sums necessary to release
may not exceed the legal or regulatory limits applicable under articles said shares against reserves, earnings or issue premium, where
L. 3332-10 et seq of the French Labor Code; applicable,
5. decides to waive the preferential right of shareholders to subscribe •• to carry out the capital increases in proportion to the amount of
shares and securities with a claim on the capital referred to in this shares effectively subscribed,
paragraph for the benefit of the abovementioned beneficiaries, said •• where applicable, charge the costs of the capital increase to the
shareholders also waiving any right to shares or securities with a related premium and to deduct the necessary amounts from said
claim on the capital in the event of a free issue of shares or securities premium to bring the legal reserve to one tenth of the new capital
with a claim on the capital to the abovementioned beneficiaries, resulting from these capital increases,
including capitalized reserves, earnings or premium, in proportion to •• enter into any agreements and carry out any transactions or formali-
the free issue of said securities based on this resolution; ties directly, or indirectly through a representative, including any for-
6. authorizes the Executive Board, under the conditions of this autho- malities relating to the capital increases and to related amendments
rization, to transfer shares to members of an employee savings plan to the bylaws,
as provided for under article L. 3332-24 of the French Labor Code, •• generally enter into any and all agreements, including any perfor-
with the understanding that discounted transfers of shares to mem- mance guarantee on the contemplated issues, take any and all mea-
bers of one or more employee savings plans governed by this resolu- sures and perform any and all formalities related to the issue, listing
tion are not cumulative with ceiling set out in paragraph 1 above, in and servicing of the securities issued under this authorization and the
proportion to the nominal amount of shares thus transferred; exercise of related rights;
7. decides that the Executive Board has full powers to implement this 8. decides that this authorization renders null and void as of today the
authorization, with the option of sub-delegating this power in accor- unused portion of any prior authorization given to the Executive Board
dance with the law, subject to the abovementioned limits and condi- to increase the Company’s share capital by issuing shares or securi-
tions and in particular to: ties with a claim on the capital reserved to members of employee
•• determine, in accordance with the law, the list of companies whose savings plans, without preferential subscription rights for these mem-
shares or securities with a claim on the capital thus issued the above- bers and all transactions governed by these.
mentioned beneficiaries may subscribe and avail where applicable of
free issues of shares or securities with a claim on the capital, Twentieth resolution 
•• decide that the subscriptions can be carried out directly by benefi- (Delegation to be granted to the Executive Board to issue  
ciaries who are members of an employee savings plan or through a free issued or to be issued shares for the benefit of employees
corporate mutual fund or other structures or entities permitted under and corporate officers of the group or of some of these)
the applicable legal or regulatory provisions,
•• determine the conditions, in particular seniority, that beneficiaries of The general meeting of shareholders, having fulfilled the quorum and
capital increases must fulfill, majority requirements pertaining to extraordinary general meetings of
•• set the start and end dates of subscription periods, shareholders, having reviewed the Executive Board report and the audi-
•• set the amounts of the issues to be made by virtue of this authoriza- tors’ special report, and subject to the prior consent of the Supervisory
tion and in particular determine the issue price, the subscription date Board pursuant to article 16-3 of the bylaws:
or period, the terms and conditions of subscription, payment, delivery 1. authorizes the Executive Board in accordance with the provisions of
and entitlement of the securities (even retroactively), the applicable articles L. 225-197-1 et seq of the French Commercial Code to grant
reduction rules in the case of oversubscription and any other terms free issued or to be issued shares (excluding preferred shares) in one
and conditions relating to issues, within the legal or regulatory limits or more transactions to beneficiaries or categories of beneficiaries it
in force, determines from among the employees of the Company or compa-
•• in the case of the issue of free shares or securities with a claim on the nies or groups affiliated to it as provided for in article L. 225-197-2
capital, determine the nature, features and number of shares or secu- of the same Code and the directors of the Company or of companies
rities with a claim on the capital to be issued, the number to be allo- or groups affiliated to it that meet the conditions set out in article
cated to each beneficiary, and set the dates, period and terms and L. 225-197-1, II of the same Code, under the following conditions:
conditions for allocating these shares or securities with a claim on the

Klépierre – 2010 Annual report | 265

 General
meeting

2. decides that issued or to be issued shares allocated under this autho- 6. acknowledges that in the case of a free issue of new shares, this
rization may not represent over 0.5% of share capital on the date of authorization entails an increase in capital through the capitalization
the Executive Board’s decision, with the understanding that (i) the of reserves, earnings or issue premium for beneficiaries of said shares
total number of free shares issued under this authorization is not as and when these shares are definitively allocated and a correspond-
cumulative with the 1% ceiling set out in the twenty-first resolution ing waiver by shareholders of their preferential right to subscribe
of the shareholders meeting on April 9, 2009, nor, where applicable, these shares in favor of the beneficiaries of these shares;
with the ceiling provided for by a similar resolution that may succeed 7. notes that where the Executive Board avails of this authorization, it
it during the term of this authorization and (ii) the maximum nominal will each year inform the ordinary meeting of shareholders of transac-
of any capital increases to be made immediately or in the future under tions carried out under the provisions set out in articles L. 225-197-1
this authorization is not cumulative with the blanket ceiling set out in to L. 225-197-3 of the French Commercial Code, in accordance with
the twenty-first resolution proposed at today’s meeting; the conditions set out in article L. 225-197-4 of the same Code;
3. decides that the allocation of said shares will become definitive on 8. notes that this authorization renders null and void as of today the
the expiry of a minimum acquisition period of two years and that the unused portion of any prior authorization given to the Executive Board
beneficiaries must hold their shares for a minimum period of two to grant issued or to be issued shares for the benefit of employees
years from the definitive allocation of said shares, with the under- and directors of the group or of some of these;
standing that the Executive Board may increase the length of the 9. decides that this authorization is given for a period of thirty eight
acquisition and holding periods; months from the date of this meeting.
4. grants all necessary powers to the Executive Board to implement this
authorization and in particular to: Twenty-first resolution 
•• determine if the free shares are issued or to be issued shares, (Overall limit of authorizations to issue shares  
•• determine the identity of the beneficiaries or the category or catego- and securities with a claim on the capital)
ries of beneficiaries to be allocated with shares from among the
abovementioned employees and directors of the Company or affili- The ordinary meeting of shareholders, having fulfilled the quorum and
ated companies or groups and the number of shares to be granted majority requirements pertaining to extraordinary general meetings of
to each one, shareholders, having reviewed the Executive Board report and subse-
•• set the share allocation conditions and, where applicable, the share quent to the adoption of the above twelfth to twentieth resolutions,
allocation criteria, notably the minimal acquisition period and the hold- decides to set at 100 million euros the maximum overall amount of
ing period required for each beneficiary, with the understanding that immediate or future capital increases that may be made pursuant to the
when this concerns free issues to directors, the Supervisory Board authorizations granted in the abovementioned resolutions, with the
must (a) either decide that the freely allocated shares may not be sold understanding that this nominal amount may be supplemented by the
by the beneficiaries before termination of their involvement with the nominal amount of additional shares to be issued to maintain the rights
Company or (b) determine the quantity of free shares that they are of holders of securities with a claim on the Company’s capital.
obliged to keep as registered shares until such time as they leave the The ordinary meeting of shareholders also decides, subsequent to the
Company, adoption of the twelfth, thirteenth and fourteenth resolutions above, to
•• where new shares are issued, charge the necessary sums to release set the maximum overall nominal amount of securities at one billion two
these shares against the reserves, earnings or issue premium, where hundred million euros of debt securities against the Company with a
applicable, carry out the capital increases under this authorization, claim on the capital that may be issued pursuant to the authorizations
amend the bylaws accordingly and, in general, carry out any neces- granted in the abovementioned resolutions.
sary formalities;
5. decides that the Company may, where applicable, adjust the number Twenty-second resolution  
of bonus shares issued necessary to maintain the rights of beneficia- (Authorization to accomplish formalities)
ries, depending on any transactions that affect the Company’s capital,
in particular in the case of a change in the par value of shares, a The ordinary meeting of shareholders, having fulfilled the quorum and
capital increase via the capitalization of reserves, a free share issue, majority requirements pertaining to extraordinary general meetings of
the issue of new shares with preferential subscription rights reserved shareholders, hereby grants full authority to the bearer of an original, a
for shareholders, a stock split or bundling of shares, a distribution of copy or an excerpt of these minutes for the purpose of complying with
reserves, issue premium or any other assets, capital amortization, a all formal publication and filing requirements required by law.
change in the distribution of profit through the creation of preferred
shares or any other transaction involving shareholders’ equity or
share capital (including through public offering and/or a change in
control). Shares allocated pursuant to these adjustments will be
deemed allocated on the same day as the shares originally
allocated;

266 | Klépierre – 2010 Annual report

Additional
information
68
2 1. Competitive position
269 2. Organization chart
270 3. Intra-group services table
271 4. Documents accessible to the public
272 5. Annual document of information
274 6. Statement by the person responsible for the registration
document which serves as the annual financial report
275 7. Persons responsible for audits and financial disclosures
276 8. Registration document concordance table
279 9. Annual financial report concordance table

Klépierre – 2010 Annual report | 267

 Additional information
1. Competitive position
Main competitors of Klépierre
Klépierre (1) Unibail–Rodamco (1) Corio (1) Eurocommercial IGD (2) Mercialys (1)
Properties (1)
Market capitalization at December 31, 2010 5 120 13 578 4 370 1 407 340 2 585
Value of holdings (excluding duties) 15 114 24 532 including 7 235 2 359 1 777 2 474
duties

Geographical breakdown of consolidated rents Klépierre Unibail–Rodamco Corio Eurocommercial IGD (4) Mercialys
Properties (3)
France 424 46% 962 62% 117 26% 50 36% – – 145 100%
Scandinavia 184 20% 128 8% – – 32 23% – – – –
Italy 111 12% – – 87 19% 58 41% 71 88% – –
Spain 79 9% 132 9% 54 12% – – – – – –
Netherlands – – 118 8% 148 33% 0 – – – – –
Other countries 115 13% 205 13% 46 10% – – 9 12% – –
Total consolidated rents 912 100% 1 545 100% 452 100% 141 100% 81 100% 145 100%
Other income 76 13 – – 8 3
Total consolidated turnover 989 1 558 452 141 89 147

Breakdown of consolidated rents by activity Klépierre Unibail–Rodamco Corio Eurocommercial IGD (4) Mercialys
Properties (3)
Shopping centers and/or retail assets 876 96% 1 073 73% 421 93% 141 100% 81 100% 145 100%
Offices 37 4% 221 15% 27 6% – – – – – –
Other activities – – 180 12% 4 1% – – – – – –
Total consolidated rents 912 100% 1 474 100% 452 100% 141 100% 81 100% 145 100%
Other income 76 13 – 8 3
Total consolidated turnover 989 1 487 452 141 89 147
In millions of euros
(1) Value of holdings at December 31, 2010.
(2) Value of holdings at June 30, 2010.
(3) Over 12 months, at June 30, 2010.
(4) Over 9 months, at September 30, 2010.
*Including Belgium.
Source: Kepler Capital Markets.

268 | Klépierre – 2010 Annual report

2. Organization chart

Real estate business Service business

Rental and property management
Development
Business support services Multimedia
Shopping centers

SNC Klécar France 83 SAS Progest 100 SCS Ségécé 100 51 Galae 49
France
SNC Kléber La Pérouse 100 Special-purpose
real estate companies

Belgium
Foncière 100
Louvain-la-Neuve

SAS Klécar Europe Sud 83 Special-purpose

real estate companies
Spain
100 Klécar Foncier Iberica 100 Klécar Foncier España 100 Ségécé España

Klécar IGC 50 21,3 Ségécé Italia 100

Participations Italie 83
Italy
100 Klécar Italia Special-purpose
real estate companies

Klégé Portugal 50 Ségécé Portugal 100

Portugal
Klépierre Portugal 100 Special-purpose
real estate companies

Klépierre Luxembourg 100

Greece
100 Special-purpose
real estate companies Klépierre Larissa 100 Ségécé Hellas 100

Poland 100 Special-purpose holdings Ségécé Polska 100

and real estate companies

Capucine BV 100

Hungary Special-purpose
real estate companies
Ségécé Magyarorszag 100

Czech 100 Klépierre CZ Special-purpose Ségécé Ceska Republika 100

real estate companies
Republic
Slovakia 100 Arcol Ségécé Slovensko 15 85

Special-purpose Special-purpose
Norway Steen & Strøm ASA 56,1 real estate companies management companies
Sweden
Denmark

Key
Retail assets

France %
Klépierre SA’s
direct ownership
SCA Klémurs 84,11 Klépierre Conseil 100 percentage

Direct ownership
100 of a Group
France subsidiary
Offices

by another
SAS CB Pierre 100 SCS Ségécé 100 subsidiary

Klépierre – 2010 Annual report | 269

 Additional
information

3. Intra-group services table

Shopping centers Retail assets Offices

Capucine BV – Hungarian,
Ségécé

Klémurs

CB Pierre
Service recipient

Klépierre

Klécar France

Galae
and subsidiaries

Ségécé España

Ségécé Italia

Ségécé Portugal

Ségécé Polska
Klécar Europe Sud – Klécar
Iberica – Klécar España

Klécar Italia – IGC

Ségécé Hellas

Klécar Europe Sud

Greek real estate companies

Klépierre Portugal

Ségécé Ceska Republika

Ségécé Magyarorszag

Polish and Czech real

estate companies
Coimbra – Foncière
Louvain-la-Neuve
Scandinavian real
estate companies

Klépierre Conseil

Other/external
Service provider

Klépierre Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing
SF CAM CAM
CAM CAM RPM
PM LOP CAM LOP LOP LOP LOP LOP LOP LOP CAM SF
Ségécé CAAD SF CAAD CAAD CAAD CAAD DVPT
France

CAAD Financing SF CAAD SF SF SF SF SF SF SF LOP RPM

RPM CAAD
SF CAAD
DVPT
Klécar France and subsidiaries Property Property
WSD
Galae MM MM MM
CAM
RPM RPM
Ségécé España CAAD CAAD
Spain

SF
• Klécar Europe Sud
• Klécar Iberica Property Property
• Klécar España
CAM
RPM
Ségécé Italia CAAD
Italy

SF
Klécar Italia Property
IGC Property Property
RPM
CAM RPM
Ségécé Hellas SF CAAD
Greece

CAAD
• Klécar Europe Sud
• Greek real estate Property Property
companies
RPM
CAM
Portugal

Ségécé Portugal CAAD

SF
Klépierre Portugal Property
RPM
CAM
Ségécé Ceska Republika RPM
SF
CAAD
Central Europe

RPM
CAM RPM
Ségécé Magyarorszag SF CAAD
CAAD
RPM
CAM
Ségécé Polska SF
CAAD
Capucine BV Property
• Coimbra
Scandinavia Belgium

• Foncière Louvain-la-Neuve Property

DVPT
SF
Steen & Strøm AS CAM
RPM
CAAD
Klémurs Property
CAM
France

RPM
Klépierre Conseil RPM CAAD
DVPT
CB Pierre Property
CAAD = Consultancy and Assistance on Acquisitions CAM = Company Administrative Management MM = Multimedia SF = Support Functions
and Disposals DVPT = Development PM = Property Management WSD = Website Design
LOP = Leasing of Personnel RPM = Rental and Property Management

270 | Klépierre – 2010 Annual report

4. Documents accessible to the public
The bylaws, minutes of general meetings of shareholders and other corporate documents, as well as historic financial information, all appraisals
and declarations made by experts at the Company’s request, and all other documents that have to be kept at the disposal of shareholders in
accordance with the law, may be consulted at the Company’s head office:

21, avenue Kléber, 75116 Paris (France)

Tel: +33 1 40 67 55 50

Copies of this registration document are available free of charge from Klépierre (21, avenue Kléber, 75116 Paris, France), and on its website
(www.klepierre.com) as well as on the website of the Autorité des marchés financiers (www.amf-france.org).

Klépierre – 2010 Annual report | 271

 Additional
information

5. Annual document of information

List of information published or made available to the public during the last 12 months in application of article L. 451-1-1 of the French Monetary and
Financial Code and article 222-7 of the General Regulations of the Autorité des marchés financiers.

DATE DOCUMENT AVAILABILITY

REGISTRATION DOCUMENTS
03/08/2010 AMF filing no. D.10-0096 www.klepierre.com or www.amf-france.org
PROSPECTUSSES
28/02/2011 Final Terms Klépierre 2017 (tap)
02/14/2011 2nd supplement to EMTN base prospectus dated 04/01/2010
01/20/2011 Final Terms Klépierre 2020 (tap)
09/10/2010 1st supplement to EMTN base prospectus dated 04/01/2010 www.klepierre.com or www.amf-france.org
04/12/2010 Final Terms Klepierre April 2020
04/12/2010 Final Terms Klepierre April 2017
04/01/2010 EMTN programme base prospectus
FINANCIAL REPORTS
08/30/2010 2010 interim financial report
www.klepierre.com
03/31/2010 2009 Annual financial report
DESCRIPTION OF SHARE BUYBACK PROGRAM
03/08/2010 2010 Share buyback program www.klepierre.com
PRESS RELEASES RELATED TO permanent DISCLOSURE
02/08/2011 2010 Annual results
01/25/2011 2010 Revenues
01/07/2011 Carrefour Claira Shopping Center: placing the first brick in the extension/renovation of the shopping center and new business park
12/21/2010 Le Millénaire confirms its vocation as a major tertiary and retail hub at the gates of Paris
12/07/2010 Icade and Klépierre are welcoming on the site of Millénaire the headquarters of the regional department of companies, competition,
consumption, labour and employment
12/01/2010 Pescara Nord reinforces its regional hold
11/25/2010 Following the success of their shopping center, Icade and Klépierre strenghten their position on Odysseum
11/19/2010 Grand Portet (Toulouse): extension and renovation of the shopping center
Chalezeule (Besançon): extension and creation of a retail park
Claira (Perpignan): extension, renovation and creation of a retail park
11/16/2010 In the heart of Marseille, the new Centre Bourse opens out on the city
10/26/2010 Corvin Atrium: inauguration of a new generation shopping center in Budapest
10/25/2010 The Val d’Europe shopping center celebrates ten years of success
10/21/2010 Revenues for 3rd quarter 2010
www.klepierre.com
10/06/2010 Leasing is speeding-up for Saint-Lazare train station
07/26/2010 Half-yearly results 2010
07/09/2010 Green light Emporia in Malmö
06/22/2010 Arches de l’Estey, Rives d’Arcins, opens in Bègles
06/10/2010 Klépierre completes 3 selective asset sales
06/03/2010 Le Millénaire, 66% of the space in this unique shopping center at the gates of Paris has already been reserved
06/03/2010 Steen & Strøm appoints new CEO
05/12/2010 Increase in equity by €189.5M following stock dividend
04/21/2010 Revenues, 1st quarter 2010
04/07/2010 Klépierre raises 900 million euros in the debt capital markets
03/25/2010 Steen & Strøm inaugurates the last phase of Sollentuna shopping center extension-renovation
03/25/2010 Expanded and totally reinvented, the Arcades regional shopping center unveils its new look
03/16/2010 A large scale operation honors biodiversity in about 30 Klépierre Ségécé shopping centers
03/01/2010 The Val d’Europe shopping center welcomes Castorama in an original architectural setting

272 | Klépierre – 2010 Annual report

DATE DOCUMENT AVAILABILITY
MONTHLY INFORMATION REgarding THE TOTAL NUMBER OF VOTING RIGHTS AND SHARES COMPRISING THE SHARE CAPITAL
Date of online publication: 02/14/2011 – 01/12/2011 – 12/08/2010 – 11/09/2010 – 10/08/2010 – 09/09/2010 – 08/06/2010 –
www.klepierre.com
07/08/2010 – 06/11/2010 – 05/11/2010 – 04/09/2010 – 03/10/2010 – 02/10/2010
INFORMATION RELATED TO THE GENERAL MEETING OF SHAREHOLDERS
02/28/2011 Methods of disposal or consultation on information relative to the ordinary and extraordinary general meeting of shareholders
of April 7, 2011
www.klepierre.com
03/19/2010 Methods of disposal or consultation on information relative to the ordinary and extraordinary general meeting of shareholders
of April 8, 2010
DECLARATION OF TRANSACTIONS INVOLVING TREASURY SHARES
Date of online publication: 01/10/2011 – 07/09/2010 www.klepierre.com
SEMI ANNUAL STATEMENT OF LIQUIDITY AGREEMENT CONTRACTED WITH EXANE BNP PARIBAS
Date of online publication: 07/09/2011 – 01/10/2011 www.klepierre.com
PUBLICATIONS ON THE BALO (FRENCH OFFICIAL LEGAL ANNOUNCEMENT)
02/28/2011 Notice of the general meeting of shareholders of April 7, 2011
04/21/2010 Allocation of profit 2009
www.journal-officiel.gouv.fr/balo
04/16/2010 Publication of voting rights for the combined general meeting of shareholders of April 8, 2010 in “Les Affiches Parisiennes”
03/19/2010 Notice of general meeting of shareholders of April 8, 2010
INFORMATION FILED AT THE COMMERCIAL COURT
07/01/2010 Extract of minutes related to capital increase dated 05/17/2010
Updated bylaws
www.infogreffe.fr
05/17/2010 Extract of minutes authorizing capital increase dated 04/08/2010
05/07/2010 Corporate and consolidated financial statements for the 2010 fiscal year and related auditors’ reports

Klépierre – 2010 Annual report | 273

 Additional
information

6. Statement of the person responsible for the registration document

which serves as the annual financial report
I hereby certify, having taken all reasonable measures in this regard, that the information contained in this registration document is, to my knowl-
edge, in accordance with the facts, with no omissions likely to affect its import.

I certify that, to my knowledge, the financial statements have been drawn up in compliance with the applicable accounting standards and present
a true and fair view of the assets, liabilities, financial position and income of the Company and of all consolidated companies, and that the man-
agement report [pages 75 and following] presents a true and fair account of the development, income and financial position of the Company and
of all consolidated companies and describes the main risks and uncertainties facing them.

I have obtained an audit completion letter from the statutory auditors in which they indicate that they have verified the information regarding the
financial position and financial statements presented in this document and that they have read the document in its entirety.

The consolidated financial statements for the fiscal year ended December 31, 2010, presented in this registration document, are the subject of a
report issued by the statutory auditors which appears on page 194. They did not points out reservations and their report sets out one observation
which text is repeated thereafter: “Without qualifying our opinion, we draw your attention to the matter set out in Note 2 to the consolidated finan-
cial statements regarding the changes in accounting rules and methods.”

The consolidated financial statements for the fiscal year ended December 31, 2009, presented in the registration document filed with the Autorité
des marchés financiers on March 10, 2010 under registration number D. 10-0096, are the subject of a report issued by the statutory auditors
which appears on page 203 of the same registration document. They did not points out reservations and their report sets out one observation.

Paris, March 14, 2011

Laurent MOREL
Chairman of the Executive Board

274 | Klépierre – 2010 Annual report

7. Persons responsible for audits and financial disclosures

Persons responsible for audits

Statutory auditors Alternate statutory auditors

DELOITTE & ASSOCIÉS Société BEAS

185, avenue Charles-de-Gaulle 7-9, villa Houssay

92200 Neuilly-sur-Seine 92200 Neuilly-sur-Seine
572028041 R.C.S. NANTERRE 315172445 R.C.S. NANTERRE
Pascal Colin/Laure Silvestre-Siaz 1st appointment: OGM of June 28, 2006.
1st appointment: OGM of June 28, 2006. End of term: fiscal year 2015.
End of term: fiscal year 2015.

 

MAZARS
Patrick de CAMBOURG
61, rue Henri-Régnault
92400 Courbevoie 61, rue Henri Régnault
784824153 R.C.S. NANTERRE 92400 Courbevoie
Guillaume Potel/Julien Marin-Pache 1st appointment: OGM of April 8, 2004.
1st appointment: OGM of November 4, 1968. End of term: fiscal year 2015.
End of term: fiscal year 2015.

Person responsible for financial disclosures

Jean-Michel GAULT

Member of the Executive Board - Deputy CEO

Tel: +33 1 40 67 55 05

Klépierre – 2010 Annual report | 275

 Additional
information

8. Registration document concordance table

No. Headings appearing in Appendix I of Commission regulation 809/2004 of f April 29, 2004 Page number
1. Persons responsible
1.1. Persons responsible for the information given in the registration document 274
1.2. Statement by persons responsible for the registration document 274
2. Statutory auditors
2.1. Name and address of the statutory auditors 275
2.2. Departure of the statutory auditors –
3. Selected financial information
3.1. Historical information 2-5
3.2. Intermediate information –
4. Risk factors
4.1. Operational risks 104-105
4.2. Legal risks 107
4.3. Liquidity risks 105
4.4. Credit and/or counterparty risks 107
5. Informations about the issuer
5.1. History and development of the Company
5.1.1. Legal and commercial name 221
5.1.2. Place of incorporation and registration number 221
5.1.3. Date of incorporation and duration of the Company 221
5.1.4. Registered principal office and legal form 221
5.1.5. Important events 139; 201; 220-221
5.2. Investments
5.2.1. Description of principal investments during the fiscal year ended 83
5.2.2. Description of pending investments 40-41; 44-45; 83-85; 139; 158 ; 201 ; 230
5.2.3. Description of future investments 21; 49-50; 44-45; 84
6. Business overview
6.1. Principal activities
6.1.1. Nature of activities 1; 7; 37-55
6.2.2. New products or new developments 40-41; 44-45; 83-85
6.2. Principal markets 2; 16-21; 58-72
6.3. Exceptional events 7; 76
6.4. Possible dependencies 109; 193; 217; 227
6.5. Competitive position 268
7. Organizational chart
7.1. Brief description of the Group 227; 269; 270
7.2. List of main subsidiaries 150-155; 269-270
8. Property, plants and equipment
8.1. Major long-term fixed assets 58-72; 84-85; 93; 158-159
8.2. Environmental issues that could influence the use of long-term assets 4-5; 7; 108-109; 128-131
9. Operating and financial review
9.1. Financial position 7; 32; 96-98; 101; 139 ; 162-163 ; 193 ; 217
9.2. Operating results
9.2.1. Important factors 76-77; 83
9.2.2. Significant changes –
9.2.3. Factors of influence 76-77; 103; 107; 282
10. Cash and capital
10.1. Capital resources of the issuer 96-98; 162-163
10.2. Source and amount of cash flows 96-98; 136
10.3. Borrowing conditions and funding structure 97-98; 162 and following
10.4. Restrictions in the use of capital that could impact issuer transactions 98; 177; 224
10.5. Expected sources of financing 96-98; 162-163

276 | Klépierre – 2010 Annual report

No. Headings appearing in Appendix I of Commission regulation 809/2004 of f April 29, 2004 Page number
11. Research and development, patents and licenses –
12. Trend information
12.1. Principal trends affecting production and sales 7; 76-77
12.2. Trends that could influence the issuer’s outlook 89-90
13. Earnings forecasts or estimates
13.1. Principal assumptions on which forecasts or estimates are based –
13.2. Report of independent statutory auditors –
13.3. Earnings forecast or estimate –
13.4. Earnings forecast included in an existing prospectus –
14. Administrative, management, and supervisory bodies and senior management
14.1. Governing boards 7-11; 111-115
14.2. Administrative, management and supervisory bodies and senior management conflicts of interests 121
15. Remuneration and benefits
15.1. Compensation paid and benefits granted 116-120
15.2. Amounts set aside or accrued to provide pension, retirement or similar benefits 193; 217; 245
16. Board practices
16.1. Date of expiration of the current term of office 111-115; 118
16.2. Service contracts with members of governing boards 121
16.3. Information about the audit committee and compensation committee 10; 239
16.4. Statement as to whether or not the issuer complies with its country’s of incorporation corporate governance regime 237
17. Employees
17.1. Number of employees 3; 100; 123; 182; 198
17.2. Profit-sharing and stock options 111-117; 119
17.3. Arrangements for involving the employees in the capital of the issuer 217; 226
18. Major shareholders
18.1. Shareholders with more than 5% of the capital 227
18.2. Existence of different voting rights 223; 227
18.3. Direct and indirect ownership of the issuer 227
18.4. Known agreement of the issuer whose implementation could change controlling ownership 226
19. Related party transactions 191-193; 234
20. Financial information concerning the assets, the financial position and the earnings of the issuer
20.1. Historical financial information 132-193; 195-217; 279
20.2. Pro forma financial information –
20.3. Financial statements 133-137
20.4. Verification of historical annual financial information
20.4.1. Statement that the historical financial information has been audited 194; 218
20.4.2. Other information audited by the statutory auditors 234; 237-246
20.4.3. Sources of information not audited by the statutory auditors 268
20.5. Dates of most recent financial information
20.5.1. Last year for which financial information was audited 194; 218
20.6. Interim financial information
20.6.1. Audited quarterly or half-yearly information –
20.6.2. Unaudited quarterly or half-yearly information –
20.7. Dividend policy
20.7.1. Dividends per share 3; 100; 225
20.8. Judicial proceedings and arbitration 221
20.9. Significant changes in financial or business position –
21. Additional information
21.1. Share capital
21.1.1. Subscribed share capital 223; 226
21.1.2. Shares not representative of equity capital –
21.1.3. Number, book value and par value of shares held by the issuer 99; 226; 253
21.1.4. Amount of securities with a claim on equity capital 119
21.1.5. Information on the terms and conditions governing the acquisition rights for securities issued but not paid up –
21.1.6. Information on the capital of group members subject to an option 180; 216; 229
21.1.7. Capital ownership history 226

Klépierre – 2010 Annual report | 277

 Additional
information

No. Headings appearing in Appendix I of Commission regulation 809/2004 of f April 29, 2004 Page number
21.2. Memorandum and articles of association
21.2.1. Corporate purpose 221
21.2.2. Summary of the bylaws 221-223
21.2.3. Description of rights and privileges, preferences and restrictions attaching to each class of the existng shares 227
21.2.4. Description of actions required to change the rights of shareholders 222; 246
21.2.5. Description of the terms and conditions under which shareholders are called to meetings 222
21.2.6. Provisions of the bylaws pertaining to control of the Company –
21.2.7. Description setting forth the percentage thresholds above which equity ownership must be disclosed to the public 227
21.2.8. Description of the terms and conditions governing changes in share capital 224
22. Major contracts 229
23. Information provided by third parties, appraisals, and declarations of any interest
23.1. Statements of appraisals –
23.2. Information provided by third parties 268
24. Documents accessible to the public 271
25. Information on equity interests 150-156; 209-210; 269

278 | Klépierre – 2010 Annual report

9. Annual financial report concordance table
This document includes all elements of the annual financial report specified by section I of article L. 451-1-2 of the French Financial and Monetary
Code and article 222-3 of the AMF’s General Regulations. A table allowing cross-referencing between the documents specified in article 222-3
of the AMF’s General Regulations and the corresponding sections of this document is provided herein:

Annual financial report Page number

Statement by the person responsible for the document 274
Management report
Review of the parent company’s and consolidated group’s profit or loss, financial position, risks and share issue authorisations 75-109; 224
(articles L. 225-100 and L. 225-100-2 of the Commercial law)
Information about items that could affect a public offer, as required by the article L. 225-100-3 of the French Commercial Code 226; 246
Information about share buybacks (article 225-211, paragraph 2, of the French Commercial Code) 99
Financial statements
Full-year financial statements 194-217
Statutory auditors’ report on the full-year financial statements 218
Consolidated financial statements 132-193
Statutory auditors’ report on the consolidated financial statements 194

Pursuant to article 28 of European Regulation (EC) no. 809/2004 of •• the consolidated financial statements for the year ended December 31,
April 29, 2004, the following items are incorporated by reference: 2008 and the statutory auditors’ report on the consolidated financial
•• the consolidated financial statements for the year ended December 31, statements for the same period, presented respectively on pages 
2009 and the statutory auditors’ report on the consolidated financial 166-231 and 232 of the registration document no. D. 09-0109 filed
statements for the same period, presented respectively on pages 148- with the AMF an March 10, 2009.
202 and 203 of the registration document no. D. 10-0096 filed with the
AMF on March 8, 2010; and

Klépierre – 2010 Annual report | 279

 Glossary
Anchor Catchment area
A retailer whose strong appeal as a consumer magnet plays a leading A habitual or theoretical area from which a point of sale or shopping
role in the animation and creation of traffic within a specific retail or center draws its potential customers. The scope of this area is influ-
commercial zone or a shopping center. enced by the distance and time it takes to gain access.

Average lease term Constant/current portfolio basis

Apart from Denmark, where leases have no fixed term and are therefore The Group analyzes the change in some indicators either by taking into
indefinite, in each of the countries where the Group owns and manages account all of the holdings it actually owned over the period or date of
property, the date before which an asset cannot be relet to another analysis (current portfolio), or by isolating the impact of any acquisitions,
tenant without being liable for payment of an eviction indemnity is set extensions or disposals during the period, in order to obtain a stable
forth in the lease contract. The average lease term corresponds to the basis of comparison (constant portfolio). As an example, rental growth
mathematical mean for all leases in force. in 2009 was boosted by the opening of the Toulouse-Blagnac center
extension, although the center is not included in the constant portfolio
Box analysis, since the extension opened during the course of the year.
A stand-alone retail space that is generally situated near or in the park-
ing lot of a retail mall or a retail park, designed to enhance the appeal Development pipeline
of the latter. Also called development potential, the development pipeline is the name
given to all investments that the Group plans to undertake, over a given
Capitalization rate (cap rate) period of time, related to the creation, extension and/or renovation of
The average capitalization rate corresponds to the ratio of total expected portfolio assets or the acquisition of assets or of companies.
net rents for occupied and vacant properties to the value, transfer duties The Klépierre development pipeline is generally set out over a five-year
excluded, of these same properties. Transfer duties are the fees for any period and is broken down into 3 categories:
change in ownership when the asset or its owning company is sold •• ongoing operations: operations in progress, in which Klépierre has land
(notary fees, deed and title, registration, etc.). ownership and has obtained all the required administrative
authorizations;

280 | Klépierre – 2010 Annual report

•• operations in development: operations at an advanced stage of plan- ICC (Indice du coût de construction) –  
ning, in which Klépierre has obtained land ownership (an acquisition has French Cost of Construction index
been completed or the sale has been agreed subject to associated This is one of 2 reference indices used to adjust the rents on retail prop-
conditions precedent, for example, the attainment of administrative erties. It is published quarterly by Insee and calculated on the basis of
authorizations); data emerging from the quarterly survey on the trend in the cost price
•• operations under negotiation, for which deal arrangements and negotia- of new housing (PRLN). Using a representative sample of building per-
tions are underway. mits, this survey provides information on markets trends, the charac-
teristics of construction, as well as factors that can be used to derive
Directory land expenses (price of land, any demolitions, various taxes, etc.). It is
Information panel showing the location of all stores and services offered also currently the reference index used to make adjustments to office
in a shopping center to assist customers in finding their way around. rents.
The information may also be displayed in the form of an interactive
touch-screen. ILC (Indice des loyers commerciaux) –  
French Commercial Rent Index
EPRA (European Public Real Estate Association) The ILC is published monthly by Insee and is composed of the ICC
This trade association has more than 200 of Europe’s public real estate (25%), the ICAV (retail trade sales index, expressed in value, for 25%),
companies as members. It publishes recommendations intended to and the IPC (consumer price index, for 50%). The ICAV, published
ensure that the financial reporting disclosures of publicly-traded real monthly by Insee, is calculated on the basis of a sample of sales rev-
estate companies are more standardized and more detailed. enue reports filed by 31 000 businesses. The IPC, published monthly in
the Official Gazette, is an indicator that is commonly used to measure
EPRA NNNAV inflation. The use of the ILC for retail rental price adjustments is possible
This indicator corresponds to revalued net assets, excluding transfer since the August 4, 2008 law on economic modernization went into
duties, and after deferred taxes and marking to market of fixed-rate debt effect pursuant to the application decree dated November 6, 2008.
and financial instruments.
MGR
Financial occupancy rate (vacancy rate) The minimum guaranteed rent payable under the terms of the lease.
The financial occupancy rate is the ratio of annual contractual rents Also referred to as base rent.
occupied to total contractual rents occupied plus target rents for all
vacant spaces (the latter are estimated on the basis of market data). A Mid-sized unit
corollary to the financial occupancy rate, the vacancy rate expresses A retail outlet whose sales area covers more than 750 sq.m.
the percentage of vacant properties. Klépierre measures these rates by
using the notion of minimum guaranteed rent (MGR) for occupied prop- Net current cash flow
erties and not the market rents. The EPRA uses the latter for its defini- This indicator corresponds to the amounts generated by the routine
tion of vacancy rate. operations and business of the Company, after taking interest and tax
expense into account. The management report describes in greater
GLA (Gross Leasable Area) detail how net current cash flow is calculated.
Total sales area (including the hypermarket if there is one), plus storage
area and not including aisles and shared tenant space. Net rent
Gross rent less fees, non-recovered rental charges (in particular due to
Gross rent vacancies), expenses chargeable to the owner and, if applicable,
Contractual rent composed of MGR, to which is added any additional expenses related to the land on which the rental unit sits.
variable rent (percentage rent), which is calculated on the basis of the
retail tenant’s sales revenue. Personal shopper
A personal adviser assisting customers with their purchases or making
Hypermarket such purchases on their behalf.
A retail establishment that displays and sells a broad assortment
of both food and non-food products over a sales space that exceeds Regional shopping center
2 500 sq.m. A shopping center that features a large number of stores, and whose
retail mix is characterized by an integrated and broad range of goods
Hypermarket mall and services, including several retail anchors (mid-sized units,
A shopping center that generally features a limited number of shops hypermarket).
whose retail mix is dominated by convenience services and whose retail
anchor is a hypermarket. Rentable floor area
Gross leasable area owned by Klépierre and on which Klépierre collects
rents.

Klépierre – 2010 Annual report | 281

 Glossary

Rental gain Klépierre opted for SIIC status in 2003. In 2008, tax provisions facilitat-
Additional minimum guaranteed rent (MGR) obtained as a result of relet- ing the sale of real estate assets to a SIIC, commonly referred to as
ting or when a lease is renewed with the same tenant (excluding addi- SIIC 3, were extended until December 31, 2011. Accordingly, the capital
tional MGR obtained when a property is leased for the first time). gains realized on the sale of property to real estate companies that have
opted for SIIC status will be taxed at the rate of 19%, versus 16.5%
Retail park previously and 33.33% under the standard tax regime for corporations.
An open air retail complex located on the outskirts or in the suburbs of Further provisions, known collectively as SIIC 4 and SIIC 5, which went
a metropolitan area, which groups together a number of different retail- into effect on January 1, 2010, stipulate that no shareholder, acting
ers that offer related or complementary merchandise. alone or in concert with others, may control more than 60% of the equity
capital of a company that has opted for SIIC status. In the event of non-
Retail property business compliance with this threshold, the company in question will be taxed
The business of owning and/or managing retail assets (shopping cen- at the normal corporate rate for the fiscal year in question.
ters, retail parks, boxes, etc.).
Specialty leasing
RNAV (Revalued net assets) The term specialty leasing refers to a series of services offering a wide
RNAV is an indicator that measures the break-up value of a real estate range of communication media to retail chains to promote their products
company. Schematically, it represents the difference between the value (in-store and out-of-store poster campaigns for shopping centers,
of the company’s assets (as estimated by independent appraisers) and plasma screens, event organization, temporary lets for promotional pur-
the total sum of its debts or liabilities. The management report describes poses, etc.). Klépierre has two companies specifically dedicated to this
in greater detail how RNAV is calculated. activity: Galae in France and Steen & Strøm Media Partner in
Scandinavia.
Sale and purchase promissory agreement
A contractual instrument signed by and between a seller and a buyer, Unpaid
according to which both parties undertake to proceed to the sale of an Unpaid (rent, utilities and taxes, including VAT sales tax) corresponds
asset at a given price and before a defined date, indicated in the same to any payment that has not been received on the due date, and inte-
instrument. grated into reporting as of the first day the past due payment is
observed. Considering that most unpaid amounts in fact correspond to
Shopping center late payments, Klépierre discloses a late payment rate at 6 months.
A group of at least 20 stores and services that form a Gross Leasable
Area (GLA) of at least 5 000 sq.m., designed, built and managed as a WFA (Weighted Floor Area)
single entity. Floor area figures are given as weighted sq.m. The various types of
office spaces (Offices, Archives – Parking – Employee Food Services)
SIIC (Société d’investissements   are weighted to calculate a price per square meter of office space for
immobiliers cotée – REIT) all space in the office building.
Tax regime allowed under article 208-C of the French General Tax Code
that allows joint stock companies that are publicly listed and whose Yield rate
stated equity capital exceeds 15 million euros, optionally and subject This rate, which unlike the cap rate allows us to determine a transfer
to certain conditions, as part of their primary business activity of acquir- duties included value, is used by our appraisers to estimate the value
ing and/or constructing buildings for the purpose of leasing them and of the holdings. It is defined on the basis of an analysis of comparable
direct or indirect ownership of equity in corporations whose business recent transactions and criteria specific to the type of asset under con-
purpose is identical, to qualify for corporate tax exemption on: sideration (location, sales area, rental reversion potential, possibility of
•• earnings from the rental of buildings, provided that 85% of such earnings extensions, percentage ownership, etc.).
are distributed to shareholders before the end of the fiscal year that fol-
lows the year in which they are earned;
•• the capital gains realized on the sale of buildings, equity in partnerships
or in subsidiaries that have opted for SIIC status, provided that 50% of
these capital gains are distributed to shareholders before the end of the
second fiscal yea that follows their generation;
•• dividends received from subsidiaries that qualify for SIIC status when
these dividends arise as a result of profits and/or capital gains that are
exempt from tax under the SIIC arrangements, subject to the provisio
they are 100% distributed in the course of the fiscal year that follows the
year in which they were granted.

282 | Klépierre – 2010 Annual report

 The English language version of this registration document is a free translation from the original, which was prepared in French. All possible
care has been taken to ensure that the translation is accurate presentation of the original. However, in all matters of interpretation, views
or opinion expressed in the original language version of the document in French take precedence over the translation.

This registration document was filed with the Autorité des

marchés financiers (“the AMF”) on March 14, 2010, in accor-
dance with article 212-13 of the AMF General Regulations. It may
be used in support of a financial transaction only if supplemented
by a transaction memorandum that has received approval from
This document is printed on paper made from pulp the AMF. This document includes all elements of the annual
produced by trees from FSC® certified responsible financial report specified by section I of article L. 451-1-2 of
sources. the French Monetary and Financial Code and article 222-3 of the
AMF’s General Regulations. A table allowing cross-referencing
Photo credits: Wingårdh Arkitektkontor AB, Philippe Castano, Groupe à5, Michel Labelle, between the documents specified in article 222-3 of the AMF’s
Patrick Messina, Mark Milstein, Paul Paiewonsky, Tristan Paviot, G. Perret, Rafaël Trapet, General Regulations and the corresponding sections of this
Ty Stange, Hans Wretling, DR. document is provided on page 279. This document has been
Design and production: 01 55 76 11 11 • 10032 established by the issuer and is binding upon its signatories.
Print: IBC Arteprint

Klépierre – 2010 Annual report | 283

284 | Klépierre – 2010 Annual report
 21, avenue Kléber – 75116 Paris – FRANCE
Tel.: 33 (0)1 40 67 57 40
Fax: 33 (0)1 40 67 55 62
A French corporation (société anonyme)
with an Executive Board and a Supervisory Board
Registered capital stock of 265 507 536.00 euros
Paris Trade and Companies Register (RCS) No. 780 152 914
www.klepierre.com