FINANCING IN CITYCON:

IG CREDIT RATINGS AND UNSECURED DEBT WITH LONG MATURITIES

SEB IG BOND SEMINAR 24 AUGUST 2017

BEN HELSING, GROUP TREASURER

21.8.2017

Number of shopping centres

LEADING OWNER, MANAGER AND DEVELOPER OF SHOPPING CENTRES IN THE NORDICS AND BALTICS

9

19

19 2

1

NORWAY SWEDEN

FINLAND

ESTONIA

DENMARK

– 50 shopping centres1)

– 13 managed/rented assets

– GLA 1.2 million sq.m.

– 200 million visitors p.a.

– Market cap EUR 2 billion

– Credit ratings: Baa1 & BBB

Key figures 30 June 2017 2 1) Including Kista Galleria 2

Finland 36 %

Norway 29%

Sweden1) 28%

Estonia and Denmark

7%

PORTFOLIO VALUE

5 EUR billion

145 100 80

970

340 205 140 95

300 260 210

155 150

340

140 125 95 90

TRUE PAN-NORDIC LEADER

3

FINLAND

ESTONIA

SWEDEN

NORWAY

Retail GLA (thousand sq.m.)

SPONDA ELO KEVA IDEAPARK

ATRIUM LJUNGBERG

UNIBAIL-RODAMCO

OLAV THON STEEN &STROM

STEEN & STROM SALTO SCALA

ASTRI LINSTOW

#1

#3 #2 #2

OLAV THON

Source: Company reports, Pangea Property Partners analysis, as per April 2017 and Finnish Shopping Centres 2017. Includes only majority-owned shopping centres. Includes some assumptions on retail proportion out of total GLA, where retail data not available.

PURE RETAIL PLAYER FOCUSING ON NECESSITY-BASED SHOPPING CENTRES IN GROWING URBAN AREAS

4

MANAGE Inhouse retail expertise

throughout the shopping centre value chain

290 retail experts in 5 countries Pan-Nordic approach with a

cross-border leasing team

DEVELOP Improved commercial attractiveness and

competitiveness Development investments of

MEUR 150-200 p.a. Conservative pipeline focused on

(re)developments and extensions, no greenfield sites

50% pre-leasing hurdle Development investments <5% of total

assets

OWN Strong portfolio of everyday

shopping centres Located in growing urban areas in

Nordic and Baltic cities Long-term investor Located where people live and work

and integrated with public transportation

90% OF CITYCON’S SHOPPING CENTRES ARE LOCATED IN CAPITAL OR MAIN CITIES

5

Note: Figures are for 2016 1) GLA updated as per April 2017 2) Kista Galleria (100%)

101,000

9

195

GLA, sq.m. Visitors, million Sales, MEUR

92,500

19

204

33,100

6

111

40,500

10

158

49,300

3

121

KISTA GALLERIA, STOCKHOLM 2)

ISO OMENA, HELSINKI AREA 1)

LILJEHOLMSTORGET GALLERIA, STOCKHOLM

KOSKIKESKUS, TAMPERE

HERKULES, SKIEN

GROCERY anchored

FOOD & beverage

Health & beauty

Entertainment & enjoyment

Linked to public transport

Municipal services

FASHION

Enriching

URBAN crosspoints

STRONG GROCERY-ANCHORING ‒ OVER 100 GROCERY STORES 1)

7 As per 31 December 2016

1) Including Kista Galleria (50%)

24%

24%

18%

13%

9%

9%

2% 1%

Home and leisure

Fashion

Groceries

Services and offices

Health and beauty

Cafés and restaurants

Specialty stores

Department stores

Rental income

269

MEUR

CITYCON’S TRANSFORMATION 2011-2016: IMPROVED PORTFOLIO QUALITY

–More balanced Nordic portfolio, reduced Finnish exposure

–Successful divestment of 49 assets (MEUR 350)

–Improved occupancy to >96% and tenant diversification, e.g. Kesko 17%=>6.5%

–Acceleration of urban developments c. MEUR 50 => MEUR 150 p.a.

8

Finland 37%

Norway 28%

Sweden1) 28%

Estonia& Denmark

7%

5 EUR billion

Stronger property fundamentals

Finland 61% Sweden

28%

Baltics 11%

2.5 EUR billion

19.7

22.8

2011 2016

AVERAGE RENT

32

84

2011 2016

AVERAGE VALUE OF PROPERTY EUR/sq.m./mth MEUR

1) Including Kista Galleria 100%

CLEAR FOCUS, EXCEPTIONAL PLATFORM, STRONG CAPITAL BASE

ROBUST BALANCE SHEET, MODERATE LTV

AND ASSETS LARGELY UNENCUMBERED – Committed to a LTV target of 40-45%

STABLE INVESTMENT GRADE RATINGS – Moody’s: Baa1 (negative)

– S&P: BBB (stable)

LEADING OPERATOR AND DEVELOPER OF

NORDIC SHOPPING CENTRES

– Retail experts with €5bn portfolio of urban, grocery-anchored shopping centres close to transport links and where people live and work

- Strong pan-nordic asset portfolio brings stability and diversification

- High credit rating in all operating countries

FOCUS ON AFFLUENT AND STABLE NORDIC

COUNTRIES

SUPPORTIVE SHAREHOLDERS AND ACCESS

TO CAPITAL MARKETS

– Shareholder base of globally recognized real estate investors: Gazit-Globe (43.9%) and CPPIB (15.0%)

– Demonstrated access to equity markets with approx. €1.3 billion in new equity raised since 2012

– Only (re)developments and extensions, no greenfield sites EARNINGS GROWTH UNDERPINNED BY

CONSERVATIVE DEVELOPMENT PIPELINE

– Consistently high occupancy levels around 96% with a 3.3 year average lease term and with top 5 tenants representing only 19.7% of rental income

– Track record of very low losses from tenant defaults – approximately €1-1.5m per annum

CONSISTENTLY HIGH OCCUPANCY LEVELS

FROM DIVERSIFIED TENANT BASE BRINGS A

STABLE CASH FLOW

2

3

4

5

6

1

7

9

HIGHLIGHTS H1/2017

10

6.1% INCREASE IN EPRA EPS TO EUR 0.089

- Overall net rental income growth and lower administrative expenses

- Completed (re)development projects support earnings growth (e.g. Iso Omena and Myyrmanni)

POSITIVE LIKE-FOR-LIKE NET RENTAL INCOME

- LFL NRI +1.6% including Kista Galleria (50%)

- Strong performance in Sweden and Norway compensates for weaker Finland

FURTHER PORTFOLIO QUALITY UPGRADE

- Divestment of six properties including building rights for MEUR 118 slightly above IFRS fair value

SUCCESSFUL SECOND PHASE OPENING IN ISO OMENA

- Footfall +28% and turnover +24%

MORE POSITIVE OUTLOOK, GUIDANCE SPECIFIED

- EPRA EPS EUR 0.165-0.175 (prev. 0.155-0.175)

FINANCIAL HIGHLIGHTS

11

1) Change from previous year (Q1-Q4/2015)

MEUR Q1-Q4/2016 %1) H1/2017 %1)

Net rental income 224.9 12.7 116.0 3.3

Direct operating profit 198.5 13.2 103.0 4.7

EPRA Earnings 151.1 15.5 79.2 6.1

EPRA EPS (basic) 0.170 -1.9 0.089 6.1

EPRA NAV per share 2.82 3.2 2.78 -0.6

Fair value change 25.92) 253.2 -8.4 -

Loan to Value (LTV), % 46.6 - 47.3 4.1

Occupancy rate (economic), % 96.2 96.3

2) Excludes Kista Galleria fair value change + 11 MEUR (100%)

Finland Norway Sweden Estonia &Denmark

Total Kista Galleria Adjustedtotal*

LIKE-FOR-LIKE NET RENTAL INCOME GROWTH 1)

STRONG LIKE-FOR-LIKE NRI GROWTH IN SWEDEN AND NORWAY COMPENSATES FOR WEAKER FINLAND

–Strong shopping centres in the Helsinki area (Iso Omena, Myyrmanni, Lippulaiva) all out of the like-for-like portfolio due to (re)development projects

–Like-for-like portfolio in Finland represents 37% of the total value of the Finnish portfolio

12 1)Including Kista Galleria 50%. The adjusted total including Kista Galleria 100% would be 1.7%.

The width of each column refers to the weight of the business unit in Citycon's portfolio.

8.8%

-7.2%

4.9%

-0.1%

1.5% 2.4%

1.6%

…BUT NOW ALSO FINLAND FINALLY IS RECOVERING

–Finnish economy shows strong recovery (GDP forecast 2017: 2.5-3%)

–Blackstone transaction when buying Sponda triggers unlocked shareholder value

13

KEY TARGET AREAS 2017 AND ONWARDS

14

FURTHER CAPITAL RECYCLING

- Divestments of MEUR 400-500 within the coming three years, of which half within the coming 1.5 years. Mainly smaller, non-urban shopping centres in Finland and Norway.

- MEUR 150-200 p.a. developments within the existing portfolio with an average YoC of 150 bps over yield requirement

- Selective acquisitions

LONG-TERM LFL NRI GROWTH OF 100 BPS ABOVE INFLATION

- Following completion of divestment plan

LOAN TO VALUE TARGET 40-45%

- Recycling of capital

- Selective joint venture opportunities

URBAN DEVELOPMENTS PROGRESSING – SECOND PHASE OF ISO OMENA SUCCESSFULLY OPENED

15

City Area before/

after, sq.m.

Expected investment,

MEUR

Cumulative investment,

MEUR

Yield on cost1), %

Pre-leasing, %

Completion target

1 Mölndal Galleria Gothenburg - /24,000 60.0 (120.0) 34.9 ~6.5-7.0 70 Q3/2018

2 Lippulaiva Helsinki area 19,200/44,100 215.0 36.5 ~6.5 55 2021

3 Iso Omena Helsinki area 63,300/101,000 270.0 269.5 ~6.0 Total SC: 98 Completed:

Q2/2017

1) Expected stabilised yield (3rd year after completion). Calculated on total development costs, also including financing and Citycon internal costs.

ONGOING/COMPLETED PROJECTS

1 2 3

DEVELOPMENT PIPELINE – URBAN LOCATIONS IN CAPITAL CITIES

16

City

Area before/

after,

sq.m.

Expected

investment,

MEUR

Target

initiation/

completion

COMMITTED

Down Town Porsgrunn 38,000/46,000 75 2017/2020

PLANNED (UNCOMMITTED)

Tumba Centrum Stockholm 23,400/32,000 50 2018/2020

Kista Galleria Stockholm 92,500/111,000 801) 2019/2021

Oasen Bergen 31,300/43,300 80 2019/2021

Liljeholmstorget Galleria Stockholm 40,500/63,000 120 2020/2022

Trekanten Oslo 23,900/45,000 110 2020/2022

–Development investments of MEUR 150-200 p.a. sourced through capital recycling

1) Citycon’s share MEUR 40 (50%)

DOWN TOWN – SHOPPING CENTRE EXTENSION IN THE HEART OF THE CITY BY THE RIVERSIDE

17

–Strong existing shopping centre of 24,000 sq.m. with an integrated bus terminal

– (Re)development and extension of 9,000 sq.m. retail with more shopping, restaurants and cafés

–Additional residential to be built

–Total development investment of 75 MEUR

ACQUISITION IN BERGEN – CREATING AN URBAN FLAGSHIP OF OASEN

18

–Sale and leaseback with insurance company Tryg (10 yrs contract)

–Potential for retail extension 31,300 => 43,300 sq.m. and improved circulation

–20,000 sq.m. resi potential

–Urban area with strong demographics

–New light rail in front of the centre

PLANS FOR TREKANTEN: TRANSFORMING NEIGHBOURHOOD CENTRE INTO A CITYCON FLAGSHIP IN NORWAY

BEFORE AFTER

FINANCING IN CITYCON:

IG CREDIT RATINGS AND UNSECURED DEBT WITH LONG MATURITIES

MAIN FINANCING TARGETS

–Loan to Value 40-45% 47.3%

–Average maturity of loan portfolio > 5 yrs 5.0

–Debt portfolio's hedge ratio 70-90% 86%

–Strong investment-grade credit ratings BBB/Baa1

–Financing mainly unsecured 95%

–Substantial liquidity buffer MEUR 565

-

Conservative business model matched by conservative financing targets

- ✓

✓

✓

✓

✓

FINANCING MILESTONES 2012-2017

Equity issues to finance

acquisitions, strengthen balance

sheet, enable IG credit ratings

and cheaper financing

– 10/2012: EUR 90 million rights issue

– 3/2013: EUR 200 million rights issue – strengthen balance sheet to enable IG credit ratings and finance Kista Galleria

– 6/2014: EUR 200 million directed share issue – CPPIB becomes a 15% shareholder

– 7/2014: EUR 200 million rights issue – deleveraging leads to credit rating upgrades

– 7/2015: EUR 600 million rights issue – to finance EUR 1,500 million acquisition of Sektor Gruppen in Norway

– 5/2013: S&P and Moody’s investment grade credit ratings as one of first Nordic real estate companies

– 7/2014: Both upgraded with one notch to BBB (S&P) and Baa2 (Moody’s)

– 1/2016: Moody’s upgrade to Baa1 following Sektor acquisition

Investment-grade credit rating

acquired

22

– 12/2014: All remaining bank debt refinanced with EUR 500 million committed unsecured syndicated revolving credit facility. Five Nordic banks, maturity 5+2Y. Margin 90 bps.

All bank debt refinanced to

decrease financing costs and

improve available liquidity

FINANCING MILESTONES 2012-2017

Bond issues to lengthen average

loan maturities and be less

dependent on bank financing

23

Issued amount Interest, p.a. Spread Tenor Issue date

Eurobond EUR 350m 1.25% 100 BP 10 8/9/2016

Eurobond EUR 300m 2.375% 175 BP 7 16/9/2015

NOK bond NOK 1,400m 3.9% 183 BP 10 1/9/2015

NOK bond NOK 1,250m Nibor + 155 BP 155 BP 5.5 1/9/2015

Eurobond EUR 350m 2.50% 143 BP 10 1/10/2014

Eurobond EUR 500m 3.75% 245 BP 7 24/6/2013

Bond EUR 150m 4.25% 290 BP 5 11/5/2012

– 7/2017: Established a EUR 1,500 million multicurrency EMTN program. 8 Dealer banks. Same covenant package and main terms as in outstanding bonds. Enables quicker bond issues and private placements. NOK bonds listed in Oslo, Eurobonds or SEK bonds listed in Ireland.

EMTN program

– 2015 : Increased limit of Finnish commercial paper program to EUR 400m. 4 Dealer banks.

– 1/2017: Activated existing Swedish commercial paper program and increased limit to SEK 2,000m. 4 Dealer banks.

– 6/2017: Established a NOK commercial paper program. 4 Dealer banks.

Commercial paper programs

CONTINUED DECREASED AVERAGE INTEREST RATE

24

4.25 % 4.12 %

3.28 % 3.04 %

2.86 % 2.58%

2012 2013 2014 2015 2016 H1/2017

WEIGHTED AVERAGE INTEREST RATE

54.5%

49.3%

38.6%

45.7% 46.6% 47.3%

2012 2013 2014 2015 2016 H1/2017

LOAN TO VALUE (LTV)

STEADILY IMPROVED ICR

25

2.1x

2.4x

3.1x

3.8x 3.8x

2012 2013 2014 2015 2016

Years

INTEREST COVER RATIO

3.2

4.1

5.9 5.5 5.6

2012 2013 2014 2015 2016

Years

AVERAGE LOAN MATURITY

BALANCED MATURITY PROFILE WITH LONG AVERAGE LOAN MATURITY

26

DEBT MATURITIES

3

104

235

113

388

31

500

131

300

350

146

350

315

0

50

100

150

200

250

300

350

400

450

500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Loans Floating to fixed swaps Undrawn loan facilities Bonds Commercial Paper

86% OF DEBT FIXED RATE, VAST MAJORITY BONDS

27

DEBT BREAKDOWN BY TYPE DEBT BREAKDOWN BY CURRENCY

Bonds 81%

CP 14%

Bank term loan 5%

Other 0%

2,199.1 EUR million

EUR 54%

NOK 26%

SEK 20%

2,199.1 EUR million

Part of EUR debt has been converted to SEK and NOK using cross-currency swaps

FINANCING KEY FIGURES

28 1) Including cross-currency swaps and interest rate swaps

30 JUN 2017 30 JUN 2016 31 DEC 2016

Interest bearing debt, fair value MEUR 2,199.1 2,055.5 2,191.5

Available liquidity MEUR 564.8 384.6 560.4

Average loan maturity years 5.0 5.0 5.6

Interest rate hedging ratio % 85.6 84.6 93.1

Weighted average interest rate1) % 2.58 3.02 2.86

Loan to Value (LTV) % 47.3 45.4 46.6

Financial covenant: Equity ratio (> 32.5%) % 46.8 48.5 47.3

Financial covenant: Interest cover ratio (> 1.8) % 3.8 3.6 3.8

THE FIRST NORDIC LISTED REAL ESTATE COMPANY WITH INVESTMENT GRADE CREDIT RATINGS

–BBB rating with stable outlook affirmed on 2 June 2016

“Citycon's strong business risk profile reflects our view of the company's €4.7 billion portfolio of resilient retail property assets, diversified across

the Nordic region”

Ratings confirm successful execution of strategy and stable business model

Baa1 BBB

–Baa1 rating was affirmed on 26 July 2017, but outlook was changed to negative due to leverage higher than target

“Citycon’s Baa1 long term issuer rating primarily reflects (i) its focus on urban, necessity-driven retail properties in strong and growing metropolitan locations in highly rated countries, (ii) the geographic diversification of its property portfolio across Finland, Norway and Sweden, (iii) its good market positions and franchise value in the Nordics’ shopping center market and (iv) a fully unencumbered asset base and good access to capital.”

STRONG SUPPORTIVE SHAREHOLDERS AND DEMONSTRATED ACCESS TO EQUITY FINANCING

30

75 99 91

200 197

604

36 35

134

63 100

206

0

100

200

300

400

500

600

700

Au

g-0

5

Oct

-05

Ap

r-0

6

Feb

-07

Oct

-07

Sep

-10

Jul-

11

Sep

-12

Mar

-13

Jun

-14

Jul-

14

Jul-

15

Cap

ital

Rai

sed

€M

Rights Issue Directed Share Issue –Citycon has raised more than €1.8bn of equity since 2005 in a series of rights issues and directed share issues to finance growth, strengthen balance sheet and enable investment grade credit ratings

–7/2015: 604m€ rights issue to finance the acquisition of Sektor Gruppen in Norway

–113% oversubscription of which 99.52% was covered by primary subscription rights

–Two largest owners Gazit-Globe Ltd. and CPP Investment Board Europe gave subscription undertaking for the issue but this was not utilized due to oversubscription

–Gazit-Globe has participated in all rights issue transactions

THANK YOU.

citycon.com

DISCLAIMER

32

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