Cromwell European REIT - Annual Report 2021

Light industrial / logistics During FY 2021, 17 new assets were acquired in the Czech Republic and Slovakia (Arete portfolio and One-Hradec Králové), the UK (Thorn Lighting and Kingsland 21), Italy (Via Fornace) and the Netherlands (Rosa Castellanosstraat 4 and De Immenhorst 7), while one asset was sold in France (Parc de Popey). As a result as at 31 December 2021, CEREIT’s light industrial / logistics portfolio comprised 68 properties: 18 properties in France, 15 properties in Germany, 11 properties in Denmark, seven properties in the Netherlands, seven properties in the Czech Republic, five properties in Slovakia, three properties in Italy and two properties in the UK. CEREIT portfolio’s light industrial / logistics sector gross revenue of €75.2 million was 19.9% higher y-o-y, while NPI was €50.1 million, 28.8% higher y-o-y. This included income from the 17 assets acquired during FY 2021 that jointly contributed €6.5 million to the FY 2021 NPI, noting the portfolio acquired in the Czech Republic and Slovakia in 1H 2021 contributed €5.9 million to FY 2021 NPI alone. Furthermore, FY 2021 included income from one asset in Italy acquired in 4Q 2020; from four assets in Germany acquired in 1Q and 3Q 2020 and from Parc de Popey in France, which was divested at the beginning of September 2021. On a like-for-like basis, CEREIT portfolio’s light industrial / logistics sector FY 2021 NPI was €36.6 million, representing an uplift of 3.0% y-o-y. The most notable positive variance was in France, driven by reduced bad debt provisions across the portfolio, notably in Parc des Docks and Parc Delizy, lower letting fees in Parc des Docks, and in Parc Sully (short-term lease renewal at higher rent and a recovery of arrears), which contributed to a positive NPI variance of over €0.6 million y-o-y. This was partially offset by the large lease expiry in Denmark (Priorparken 700 and Priorparken 800) and lower NPI received from two assets in the Netherlands (Folkstoneweg 5 – 15 and Kapoeasweg 4 -16). Office CEREIT’s office portfolio comprised 39 properties as at 31 December 2021, unchanged y-o-y. The Netherlands office portfolio (seven properties) contributed 37% of the office sector FY 2021 NPI, with the Italian office portfolio contributing 25%, the Polish office portfolio contributing 22% and the remaining 16% contributed by Finland and France. FY 2021 gross revenue for the office sector was €110.7 million, 0.6% higher y-o-y, while NPI was €69.9 million, 2.1% higher y-o-y. Notable positive contributions to the office sector FY 2021 gross revenue came from the Netherlands (Haagse Poort) and France (Paryseine); the former a result of a one-off leasing contribution paid by a tenant-customer in the prior year; the latter due to the surrender premium received from a tenant-customer at Paryseine, which contributed to a significant y-o-y uplift. These were partly offset by the 15% rent reduction in three Italian office assets (Via della Fortezza 8, Via Camillo Finocchiaro Aprile 1, Via Rampa Cavalcavia 16 – 18), and one office asset in Finland (Plaza Vivace), where three tenant-customers vacated a total of 2,500 sqm throughout the year. Other CEREIT porfolio’s ‘other’ sector consists of three government-let campuses, one retail property and one hotel, all located in Italy, unchanged y-o-y. FY 2021 ‘other’ revenue of €14.2 million was 0.2% higher y-o-y and NPI of €10.2 million was 0.9% higher y-o-y. The FY 2021 outperformance was mainly due to the reversal of the bad debt provision in Via Madre Teresa 4 and reduced letting fees mainly in Via Madre Teresa 4 and Starhotels Grand Milan. This was offset by the negative variance in gross income from the 15% rent reduction in Via Brigata Padova 19 and Via Salara Vecchia 13 and the lower turnover rent received from Via Madre Teresa 4. CROMWELL EUROPEAN REIT 37 ANNUAL REPORT 2021