SFL – Third-Quarter 2023 Financial Information - Seite 2

• Rental income from spaces being redeveloped rose by a net €4.3 million versus the first nine months of 2022, reflecting:

• An increase of €13.3 million, due in particular to:

• the contribution over the entire nine-month period of revenues from the Biome building (delivered in July 2022 following its complete restructuring and fully let to La Banque Postale and SFIL);
• the delivery in July 2023 of the retail area of the Louvre Saint-Honoré complex redeveloped for the Cartier Foundation, whose lease took effect immediately;
• new leases signed on several floors renovated in 2022 and/or 2023, mainly in the Cézanne Saint-Honoré building (Wendel, Lacourte Raquin Tatar, Lincoln International and Jouin Manku).

• A decrease of €9.1 million, mainly due to:

• part of the retail space in the Galerie des Champs-Elysées building (former H&M store) becoming vacant in 2022; following restructuring and delivery in August 2023, this space is now set to become the Paris flagship for its new tenant, Adidas;
• the Scope building (formerly Rives de Seine) previously let to Natixis being vacated at the end of September 2022 in preparation for its redevelopment.

• The acquisition of the Pasteur building in April 2022 generated a significant increase in rental income, partly offset by the impact of Pretty Simple’s October 2022 departure from the 6 Hanovre building, which was sold in April 2023. Together, these movements had a positive net impact on rental income of €4.1 million.

• Lastly, rental income for the first nine months was boosted by €0.7 million in penalties received from tenants for breaking their leases.

Sustained business volumes in an uncertain environment

• Leases

In the first nine months of 2023, the Group signed leases on over 30,000 sq.m. of mainly office space.

The average nominal rent for the new office leases was significantly higher, at €845 per sq.m., corresponding to an effective rent of €695 per sq.m., for an average non-cancellable period of 8.5 years. These lease terms attest to the resilience of the Paris office property market and the attractiveness of the Group’s properties.

The physical occupancy rate for revenue-generating properties at 30 September 2023 was a record 99.7% (compared with 99.5% at 31 December 2022). The EPRA vacancy rate was 0.3% (versus 0.6% at 31 December 2022).

• Portfolio rotation

On 11 April 2023, SFL sold the 6 rue de Hanovre building in Paris (2^nd arrondissement) to the GCI/Eternam joint venture for a net selling price of €58.3 million. The building’s tenant moved out in October 2022 and the 4,600 sq.m. complex was sold untenanted in its condition on the transaction date.