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GICSA Announces Consolidated Results for Second Quarter 2018

July 24, 2018

MEXICO CITY--(BUSINESS WIRE)--Jul 24, 2018--GRUPO GICSA, S.A.B. de C.V. (“GICSA” or “the Company”) (BMV:GICSA), a Mexican leading company specialized in the development, investment, commercialization and operation of shopping malls, corporate offices, industrial buildings and mixed use properties, announced today its results for the second quarter (“2Q18”) and six-month (“6M18″) periods ended in June 30, 2018.

All figures have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and are stated in millions of Mexican pesos (Ps.) GICSA’s financial results presented in this report are unaudited; therefore figures mentioned throughout this report may present adjustments in the future.

GICSA’s financial results presented in this report are unaudited; therefore figures mentioned throughout this report may present adjustments in the future.

Main Highlights

Corporative

On July 3, via a press release the Company announced the approval and formalization of the restructuring of the joint portfolio that it had with various investors that participate in certain developments of the Company’s real estate portfolio, as well as the signing of a real estate services contract previously provided in various projects. In summary, this transaction had the following effects: Starting in 3Q18, the Company will report 100% of the result for the following properties: Forum Culiacan, Tower E3, Capital Reform, Masaryk 111, City Walk and Forum Buenavista in its results. Forum Coatzacoalcos will be reported at 50%, while Forum Tlaquepaque, Las Plazas Outlet Lerma and Reforma 156 will be dis-incorporated from the Company’s portfolio.The abovementioned will generate an additional annual proportional NOI for GICSA of Ps. 115 million, beginning in 3Q18; Ps. 919 million will be paid upon the signature of this agreement.The real estate services contract previously provided and agreed to by the Company generated revenues of Ps. 1,128 million, of which the Company charged Ps. 282 million upon the signature of this agreement and will receive an additional payment of Ps. 846 million in the next 15 months. This is already reflected in the 2Q18 results.

Operational

GICSA reported a total of 831,004 square meters (m²) of Gross Leasable Area (GLA) comprised of 13 properties in the stabilized portfolio and 3 properties in the stabilization process at the conclusion of 2Q18. GICSA’s proportional GLA during 2Q18 was 529,460 m 2, an increase of more than 124 thousand m 2, 17.47% higher than the figure reported for the same period of the previous year. As of 2Q18, the occupancy rate of the stabilized portfolio was 93.76%, an increase of 3.41 bps. This was due to the occupancy increase at Capital Reforma, Masaryk 111 and Paseo Arcos Bosques. Average leasing rate per square meter of the stabilized portfolio at the end of 2Q18 was Ps. 359, a 9.30% increase compared to 2Q17, which was Ps. 328. GICSA registered an accumulated occupancy cost of 7.8% in 6M18, and an increase in same-store sales of 5.20% for the same period. At the close of 6M18, GICSA had a total of 37 million of visitors in the shopping malls of the stabilized portfolio, an increase of 11.36% compared to 6M17.

Financial

Net operating income (NOI) of the stabilized and under-development portfolio reached Ps. 727 million, a decrease of 3.68% compared to 2Q17. This was explained by a lower proportion of key money collected during the quarter, higher expenses at Forum Cuernavaca, as well as the impact of the credit notes granted to certain tenants for the work carried out for the construction and opening of the Paseo Interlomas expansion. Consolidated EBITDA in 2Q18 reached Ps. 1,863 million, while GICSA’s proportional EBITDA was Ps. 1,582 million, an increase of 146.18% and 234.84%, respectively, compared to 2Q17. This was derived from the recognition of real estate services provided and charged in the recent agreement concluded together with a group of important investors. At the close of 2Q18, net income was Ps. 3,126 million; while GICSA’s proportional net income was Ps. 2,092 million. Consolidated debt at the close of 2Q18 was Ps. 22,671 million; while GICSA’s proportional debt was Ps. 17,497 million.

Pipeline

As of June 30, 2018, the commercialization of properties under development reached progress of 332,884 square meters of GLA under contract. This represents 61.35% of the total space comprising projects under construction, representing an increase of 12.02% compared to 1Q18. On April 26, 2018, La Isla Merida successfully opened with 59,900 m 2 of GLA. As of June 30, 81% of the area was under contract with anchor and sub-anchor stores such as: Liverpool, Cinépolis, H&M and Zara. During 2Q18, the Explanada Culiacán construction began; due to the wide acceptance of the concept by our commercial partners, this project concluded the quarter with 27.54% of area under contract. At the close of 2Q18, 100% of the GLA for Masaryk 169 aimed for commercial use is under contract.

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For a full version of GICSA’s Second Quarter 2018 Earnings Release, please visit: http://www.gicsa.com.mx/en/investors-relationship/financial-information

About the Company

GICSA is a leading company in the development, investment, commercialization and operation of shopping malls, corporate offices and industrial warehouses well known for their high quality standards, which transform and create new development spaces, lifestyles and employment in Mexico, in accordance to its history and executed projects. As of June 30, 2018, the Company owned 16 income-generating properties, consisting of ten shopping malls, four mixed use projects (which include four shopping malls, four corporate offices and one hotel), and two corporate office buildings, representing a total Gross Leasable Area (GLA) 831,004 square meters, and a Proportional GLA of 529,460 square meters. Since June 2015, GICSA is listed on the Mexican Stock Exchange under the ticker (BMV:GICSA B).

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CONTACT: GICSA

In Mexico:

Diódoro Batalla, 5255- 5148-0400 Ext. 4444

Chief Financial Officer

dbatalla@gicsa.com.mx

or

Rodrigo Assam, Tel: 5255- 5148-0400 Ext. 4447

Financial Planning and Investor Relations Officer

rassam@gicsa.com.mx

or

In New York:

i-advize Corporate Communications, Inc.

Rafael Borja, 212-406-3693

rborja@i-advize.com

KEYWORD: MEXICO CENTRAL AMERICA

INDUSTRY KEYWORD: COMMUNICATIONS PUBLIC RELATIONS/INVESTOR RELATIONS CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE OTHER CONSTRUCTION & PROPERTY

SOURCE: GRUPO GICSA, S.A.B. de C.V.

Copyright Business Wire 2018.

PUB: 07/24/2018 05:20 PM/DISC: 07/24/2018 05:21 PM

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