How To Understand And Understand Icade

Annual Report 2005 Bringing the city to life

1

2 ANNUAL REPORT 2005 1- Tour Montparnasse Paris (75) Icade Gestion Tertiaire: Property manager 3 2- Villas Maupassant Rueil-Malmaison (92) 13 houses Icade Capri: Developer Architect: M. Girat 3- Le Lagny Montreuil (93) Icade Tertial: Co-developer Architects: Costantini/Regembal Architecture Investor: Assurances Mutuelles Le Conservateur User: Paris/Paris Region URSSAF 3

Annual Report 2005 CONTENTS 6 THE CHAIRMAN S MESSAGE 9 INTRODUCTION 12 BACKGROUND 14 KEY FIGURES 18 ICADE S THREE MARKETS 22 HOUSING 26 COMMERCIAL PROPERTY 30 PUBLIC-HEALTH PARTNERSHIPS 34 INTERNATIONAL 39 HUMAN RESOURCES 43 GOVERNANCE 48 SUSTAINABLE DEVELOPMENT 52 ORGANISATION CHART OF CONSOLIDATED COMPANIES 54 ANNUAL ACCOUNTS 2005 4

1- Building 270 Site of Emgp Aubervilliers (93) 9,400 m 2 Mission: assistance to client Architects: Brenac & Gonzalez In 2005 this building secured HQE certification, one of the top five French certifications NF tertiary buildings, HQE approach Opening: 14 th September 2005 5

THE CHAIRMAN S MESSAGE Icade is currently a growing company, whose margins are improving and which has a sound financial structure. An integrated property operator, it has bought out of its unlisted subsidiaries and concentrates on assets matching its development model. This has enabled it to grow its businesses and results significantly in 2005. STRONG IMPROVEMENT IN 2005 RESULTS Icade s turnover rose by 19% between 2004 and 2005 to 1.179 billion. EBITDA rose from 124 million to 201 million, i.e. a 61% increase. Compared to turnover, it represents a margin of 17% in 2005, an increase of 4.5 points. The net income Group share increased by 17%, from 60 million in 2004 to 71 million in 2005. These results are an indication of Icade s improved productivity and the change in its business model. In order to respond to the nature and needs of its customers, it has in fact deliberately structured its organisation and management into three markets: housing, commercial property and public-health partnerships. These correspond to three types of customer with specific problems. Icade exercises three activities for each of them. The first is design and development; the second is investment, holding and arbitration; the third is operation and management. This trend towards integration is developing strongly in France. Some companies working in the development field are trying, for example, to develop into property and service companies. Internationally, a number of property companies are also trying to expand into development and services. Icade is currently the only French operator which has a significant presence in these three markets and in the three major activities of the property market. This gives it a unique advantage: it benefits from the dynamism of development, the potency of property companies and the recurrent nature of property services. PROGRESSION IN HOUSING, STRENGTHENING OF THE TERTIARY SECTOR AND DEVELOPMENT OF PUBLIC-HEALTH PARTNERSHIPS Icade has continued its improvement in the housing market in 2005, increasing its turnover by 9%. There were nearly 4,300 new home starts in 2005 and the first-time buyers programmes in renewal urban areas delivered in 2005 (Mantes-la-Jolie and Toulouse) were commercially successful. The 45,000 middleincome units that Icade holds in the Île-de-France saw an occupancy rate of 98%. Icade moreover continued developing its property services business with the full consolidation of Cabinet Villa. Icade significantly strengthened its position in the commercial property sector with an 87% increase in turnover in that market. It sold the Antony 2 complex on an off-plan basis, while two office projects were delivered: L Espace Marceau and Le Lagny in Montreuil-sous-Bois. Batiment 270, one of the first buildings to be named as a Haute Qualité Environnementale (High Environmental Quality) building, was opened (Parc des Portes de Paris). Planning permission for the Porte d Aubervilliers shopping centre (45,000 m 2 ) was granted while the Parc du Millénaire (Paris 19) continued to expand. Finally, Icade developed its property management business by securing the prestigious contract for the Tour Montparnasse management (300,000 m 2 ). Icade is continuing to develop in the field of public-health partnerships with 2005 turnover of m94.6. It has won several invitations to tender including the Docks en Seine, L Institut de la Vision - CHNO des Quinze-Vingts. Six projects with a total floor area of 33,647 m 2 were delivered, including Le Parvis in Clermont-Ferrand and Les Portes d Espagne in Toulouse. Eight new projects have been launched including a 7,000 m 2 home with medical facilities in Laval, within the framework of a publicprivate partnership. Icade created the Icade Santé brand in 2005 combining the healthcare related activities of Icade G3A and Icade Setrhi-Sétaé. 6

Annual Report 2005 BECOME A LEADER IN THE EUROPEAN PROPERTY MARKET Icade is currently the only French company to operate all three businesses developer, investor, service provider in all property markets. Its presence in these markets and expertise in these fields ensure a sound business portfolio and real development prospects. The expertise and energy of its teams, 3,600 employees, including 1,600 managers, located throughout the country and in Europe, are its greatest asset. They work for its customers: private individuals, institutional investors, companies and public authorities. With its stock market flotation on 12 th April 2006, Icade now has the wherewithal to finance its 1.8 billion, three-year investment plan to speed up its growth in France and Europe. Today, more so than ever before, Icade has the resources to match its ambition, to become one of the leading European property companies within the next five years, to bring the city to life. ÉTIENNE BERTIER Chairman and Chief Executive Officer Icade In May 2005, the Caisse des Dépôts decided to clarify and split its property related activities between its two major specialist subsidiaries: - The SNI Group, involved in apartment buildings, manages 210,000 homes (150,000 social housing and 60,000 reserved for civil servants). Since May 2005, it has taken over the 13 social housing companies of SCIC Habitat which previously belonged to Icade. - Icade, which is developing its activities in the competitive property sector. Within Icade s consolidation, the division dedicated to intermediate rental accommodation, Icade Patrimoine, owns 45,000 homes. This portfolio is one of the last intermediate rental accommodation portfolios held by an institutional lessor in the Île-de-France. 7

8 1

2 INTRODUCTION 3 1- Initiale Défense Puteaux (92) Icade Tertial: Co-developer Icade Arcoba: Technical studies Icade Eurogem: Facility manager Architecture: Valode & Pistre 2- Résidence Ferdinand de Lesseps Bayonne (64) Icade Capri: Developer Architect: L. Cazalis 3-2, rue du Quatre Septembre Paris (75) Icade Foncière des Pimonts: Investor 9

10

INTRODUCTION Annual Report 2005 PROFILE Icade is an integrated property operator involved in the whole value chain of the businesses of the three major property markets: housing for private tenants, first-time buyers or investors, commercial property (offices, business, leisure and shop premises) for companies and institutional investors and public and health property (communal and health facilities) for public authorities, administrations and services. These markets are themselves organised around three operations: design and development (development), investment, ownership and arbitration (property) and operations and management (property services). Property companies are today faced with three major challenges: to access land resources, to develop customer relations by means of an integrated offer and to limit exposure to property cycles. Relying on its expertise in development, property and services, Icade is geared towards an original position as an integrated property developer present in all property markets. This deliberate decision to structure its offer, organisation and management according to the type of customer and their needs is a factor for the growth and development of the company. Expertise in the various property businesses enables Icade to provide solutions tailored to the needs of its customers and to become generally involved in some of the sector s current main problems such as publicprivate partnerships (PPP), the outsourcing of major portfolios and integrated service offers. Icade is currently the only French operator to cover these three businesses in the three markets on behalf of its customers: private individuals, institutional investors, companies and public authorities. This original position makes Icade a company with high growth potential, moderately exposed to sector risks, whose profitability offers significant prospects of improvement. 11

INTRODUCTION BACKGROUND Icade, formerly known as the Société Centrale Immobilière de la Caisse des dépôts (SCIC), is one of the major players in the French property sector. Formed in 1954 in response to the scarcity of post-war accommodation, SCIC was, until the end of the 80 s, a service group basically dedicated to building public and para-public homes and infrastructures. Its later development led it to become a competitive property company involved in housing, the tertiary sector and the public and health markets, in the fields of development, property and services. In 1974, SCIC formed Capri (SCIC Promotion) and became involved in developing housing other than social. At the beginning of the 90 s, SCIC changed owing to numerous expansion operations. While retaining its historical skills acquired in property services, it gradually became a property investor and expanded its know-how from housing to office property. It thus acquired: Setrhi (project management - December 1997), GFF, now Icade Administration de Biens (property administration - June 1998), Eurogem (tertiary services - May 2000). Since 2002, the change in Icade (new name of SCIC since September 2003) has accelerated with the introduction of a policy of control of its unlisted subsidiaries, a significant strengthening of its presence in the tertiary sector, particularly through the acquisition of property and the disposal of assets which no longer matched its development model, thanks in particular to the reorganisation of the property related activities of the Caisse des dépôts. Icade moreover began its international development in 1990 (Spain), followed by Italy (2000) and Belgium (2002). Today, Icade is the only French property operator present in the whole value chain (development, property and services) of the three property markets (housing, commercial and public and health). This original position explains why Icade has no directly comparable operator on the French property scene. Hameau Villaine Massy (91) Icade Patrimoine: Investor 12

CHANGES IN ICADE An integrated company HOUSING COMMERCIAL PROPERTY PUBLIC-HEALTH PARTNERSHIPS Formed Capri Icade Patrimoine Formed G3A Acquisition Setrhi Acquisition GFF Acquisition Eurogem Formed Tertial Acquisition Emgp Arcoba Acquisition Foncière des Pimonts Eurogem (buying out minority interests) Capri (buying out minority interests) Acquisition Icade Conseil Acquisition Villa Foncière des Pimonts (buying out minority interests) PPP Icade foncière publique 1954 1997 1998 1999 1998 2000 2001 2002 2003 2004 2005 2006 13

2005 Key figures at comparable structure Turnover m1,179 GROWTH 19% EBITDA m201 GROWTH 61% Net income Group share m71 GROWTH 17% Net current cash flow m127 GROWTH 32% 14

KEY FIGURES Annual Report 2005 TURNOVER Icade s turnover increased from m994.4 in 2004 to m1,179.2 in 2005, i.e. a 19% increase over the year, broken down as follows: 16.1% organic growth, primarily explained by the increase in development activities, up by m150.6, of which m104.3 for Icade Tertial with the impact of the Portes d Arcueil commercial property programme, and m43.3 for Icade Capri (housing); 2.5% external growth. 19% earnings growth (in m) Organic Structure 160.5 10.7 (53.2) 48.3 14.3 4.2 994.4 + 16.1% + 2.5% 1,179.2 2004 Organic growth Acquisition Cabinet Villa Acquisition Foncière des Pimonts Acquisition Icade Conseil Transfer of activities to SNI Other changes in structure* 2005 * Essentially international activities. Contribution of activities to turnover (in m) HOUSING 61% COMMERCIAL PROPERTY 31% PUBLIC-HEALTH PARTNERSHIPS 8% DESIGN AND DEVELOP (DEVELOPMENT) 416 171 39 54% INVEST, HOLD AND ARBITRATE (INVESTMENT) 26% OPERATE AND MANAGE (SERVICES) 193 113-92 76 55 20% 2005 TURNOVER = m 1,179 * * of which international and parent company: m24. Split made on the basis of 2005 turnover excluding international and parent company. 15

KEY FIGURES GROSS OPERATING INCOME Icade s EBITDA increased from m124.3 in 2004 (i.e. 12.5% of earnings) to m200.7 in 2005 (17% of turnover), that is to say an increase of 61.5% over the year broken down as follows: 24.8% organic growth, essentially due to the increase in development activities, with Icade Tertial contributing m19.8 (impact of the Arcueil commercial property programme); 36.7% external growth. 61% EBITDA growth (in m) Organic Structure 4.8 42.1 (0.5) 0.2 30.8 (1.0) 200.7 124.3 + 24.8% + 36.7% 2004 Organic growth Acquisition Cabinet Villa Acquisition Foncière des Pimonts Acquisition Icade Conseil Transfer of activities to SNI Other changes in structure* 2005 * Essentially international activities. Contribution of activities to EBITDA (in m) HOUSING 43% COMMERCIAL PROPERTY 31% PUBLIC-HEALTH PARTNERSHIPS 3% DESIGN AND DEVELOP (DEVELOPMENT) 30% INVEST, HOLD AND ARBITRATE (INVESTMENT) 69% OPERATE AND MANAGE (SERVICES) 1% 38 22 3 55 91 - (1) 1 4 2005 EBITDA = m201* 16 * of which international and parent company: m12. Split made on the basis of 2005 turnover excluding international and parent company.

Annual Report 2005 ICADE S NET INCOME GROUP SHARE Icade s net income consolidated Group share went up from m60.3 in 2004 to m70.8 in 2005, i.e. an increase of 17.4% over the year, broken down as follows: organic shrinkage of 27.5%, a fall primarily borne by Icade Patrimoine (which suffered an increase in tax liabilities and a fall in asset sales); external growth of 44.9%. CONSOLIDATED KEY FIGURES m (IFRS) 2004 2005 Variation Turnover EBITDA Margin (%) Asset sales Net income Group share Net current cash flow Net financial debt* Capital and reserves 994 124 12.5% 65 60 97 521 1,091 1,179 201 17.0% 37 71 127 776 1,161 19% 61% +4.5 pts n.s. 17% 32% 49% 6% * According to IAS 32 and 39. Icade: a growing company, with an increasing EBITDA margin and a sound financial structure. A SOUND ASSET BASE Appraised value of assets excluding rights HOUSING TERTIARY Icade Patrimoine Icade Emgp Icade Foncière des Pimonts 1.4 billion 0.9 billion 0.8 billion Type of assets 45,000 intermediate housing in the Île-de-France Prospects Stability/recurrent business Long-term reversion potential Type of assets Company sites in North East Paris Prospects Substantial property reserve Development and conversion of the portfolio to tertiary property Type of assets Top-end offices in the central business district Prospects Outsourcing of assets Diversification into shopping centres TOTAL : 3.1 billion 17

18 1

2 ICADE S THREE MARKETS 3 1- CREPS (Centre Régional d Éducation Populaire et de Sports) (Regional Sports and popular Education Centre) Bourges (18) Icade G3A: Agent for the public-sector owner Architect: Atelier Carré d Arche 2- Docks en Seine Paris (75) Icade: Public-Private Partnership Architects: Jakob+Macfarlane 3-114, avenue des Champs-Élysées Paris (75) Icade Foncière des Pimonts: Investor 19

THE THREE MARKETS MARKET DRIVEN ORGANISATION Icade is present in the three major property markets which are housing for private tenants and first-time buyers or investors, commercial property (offices, business, leisure and shop premises) for companies and institutional investors and public and health property (communal and health facilities) for public authorities, administrations and services. Icade s operating organisation, tailored to its business model, revolves around these three markets. Icade operates in all three of them. HOUSING COMMERCIAL PROPERTY PUBLIC-HEALTH PARTNERSHIPS DESIGN AND DEVELOP (DEVELOPMENT) Icade Capri Icade Pierre pour Tous Icade Tertial Icade G3A INVEST, HOLD AND ARBITRATE (INVESTMENT) Icade Patrimoine Icade Emgp Icade Foncière des Pimonts Icade Foncière publique OPERATE AND MANAGE (SERVICES) Icade Administration de Biens Icade Eurostudiomes Icade Gestion tertiaire Icade Eurogem Icade Conseil Icade Arcoba Icade G3A Icade Setrhi-Sétaé 20

Annual Report 2005 STRATEGY Enhanced by its belonging to the Caisse des dépôts Group and its position as an integrated property operator in France, Icade intends to strengthen its positions in each of its markets and has set its sights of becoming one of the principal property operators on a European scale. Icade s strategy consists of: valorising its property assets, within the framework of a long-term investment (building, renovation and acquisitions) and arbitration programme in order to maximise the value creation potential of its assets; securing access to new sites thanks to the setting up, in 2006 of an independent structure serving its three markets, Icade Foncier Développement, which is designed to acquire complex property assets in order to contribute to their valorisation; offering its customers a complete service based on top level expertise spread throughout the value chain of the businesses in order to grow their development potential over the three markets; strengthening Icade s market positions, particularly by increasing the density of its territorial mesh in France and by targeted acquisitions, and developing the business in new growth markets such as urban renewal and Public-Health Partnerships; diversifying its geographic presence by expanding in Southern Europe, Germany and Eastern Europe, also by means of external growth operations; setting up common processes in the functional field (IT, management control, treasury, communication, risk control) which generate savings; rolling out a sustainable development approach to the whole company. 21

ICADE S THREE MARKETS HOUSING Key figures 3,700 units reserved in 2005 (purchase and rental) 45,000 units held making a total floor area of 2.6 million m 2 160,000 sites managed for third parties Since it was formed, Icade has been present in the housing market and has developed know-how in development, rental and property services. Primarily geared towards private individuals, users or investors, Icade also offers institutional investors a personalised response, whether in relation to building or managing their property portfolios. Icade currently operates in three areas: DEVELOPMENT Icade Capri, a private developer of new housing in France, is involved in 18 French cities. It builds and markets urban apartments for first-time buyers or private rental investors. Icade Capri also develops housing estates via Icade Aménagement. Through Icade Pierre pour Tous, Icade produces accommodation for first-time buyers in urban renewal areas. INVESTMENT Icade Patrimoine is a housing property developer specialising in intermediate rental accommodation in the Île-de-France. It is one of the top non-social housing lessors in France. Its alternative offer, located between up-market residences and social housing, responds to the demand for intermediate housing from inhabitants of the Île-de-France who do not have access to top level apartments or social housing. SERVICES Icade Administration de Biens (formerly GFF) operates as a property manager offering private individuals and institutional investors a range of services including management, co-ownership management, transaction services. Under the name of Icade Eurostudiomes, Icade also operates a business developing and managing accommodation with services (mainly for students). Les Allées Rimbaud Noisy-le-Grand (93) Icade Capri: Developer of 104 apartments Architects: DLM Architectes Delivered in July and November 2005 22

OUTSTANDING FEATURES IN 2005 Icade continued its progress in the housing market in 2005 with a turnover of m700.6 (+ 9%). In development, Icade increased its home starts by 38% to achieve 4,295 homes and sites. The first sensitive urban area home ownership programmes, delivered in 2005 (Mantes-la-Jolie and Toulouse), were commercially successful. In respect of investment activities specialising in intermediate rental accommodation in the Île-de-France in 2005, Icade Patrimoine had a 98% physical occupancy rate of its residential portfolio of 45,000 units. The average rent for 2005 was 5.71/ habitable m 2, excluding charges. In services, Icade continued to develop its management and managing agent business with the consolidation of Cabinet Villa (63,136 units in late 2005). Icade Eurostudiomes developed its serviced accommodation business by means of eight operations representing 1,195 beds. 23

24

ICADE S THREE MARKETS / HOUSING Annual Report 2005 STRATEGY Icade s strategy in the housing market consists of: developing its geographic presence in housing development in growing cities and increasing the density of its coverage in France in order to increase its market share and secure its access to land; continuing the development of its housing estate business and gaining a foothold in the town centre renovation/refurbishment market; making development the core synergy by making it easier to secure management instructions for accommodation services and property development projects; developing affordable housing through Icade Pierre pour Tous, whose aim is to provide some kind of response to the problem of home ownership; valorising Icade s asset portfolio in conjunction with local government by implementing a multi-annual asset plan. Significant investment in renovation costing 250 million over 4 years, a plan for re-allocating assets to social housing organisations and an acquisition and construction programme should contribute to completing the refocusing of Icade Patrimoine on the intermediate rental accommodation segment. With about 600 hectares of land, Icade also has major potential for future development. Résidence Le Val Sully Mantes-la-Jolie (78) Icade Pierre pour Tous: Developer of 24 houses and 20 apartments for first-time owners Architect: R. Reveau Delivered in October 2005 25

ICADE S THREE MARKETS COMMERCIAL PROPERTY 26 Key figures 273,000 m 2 net floor area of offices and shopping centres delivered between 2002 and 2005 525,000 m 2 of office and business premises held 1.7 billion appraised value of assets held Le Lagny Montreuil (93) 9,325 m 2 Icade Tertial: Co-developer Architects: Costantini - Regembal Architecture Investor: Assurances Mutuelles Le Conservateur User: Paris/Paris Region URSSAF Delivered in October 2005 Icade is present in the commercial property market through several business units: DEVELOPMENT Icade, under the name Icade Tertial, develops offices, shopping and leisure centres throughout France. Between 2002 and 2005, Icade was involved in delivering about 273,000 m 2 net floor area of offices. The project portfolio as at 31 st December 2005 stands at 596 million. Icade s customers are institutional investors (French and foreign) and user companies. INVESTMENT Icade has two listed investment vehicles: Icade Emgp develops and manages a large business park to the North of Paris. Icade Emgp owns 76.5 hectares of land and 420,258 m 2 of built floor area essentially located between Paris, the Paris ring road, the A1 Motorway and La Plaine Saint-Denis, with direct access to Charles-de-Gaulle Airport and the Paris-Nord TGV station. Its assets consist of offices, business premises, audiovisual production studios, warehouses and land. It has been valued at 907.3 million excluding charges as at 31 st December 2005. Its tenant companies belong to a wide range of business sectors such as audiovisual, fashion, distribution and leisure. The size of the property reserves still to be developed makes Icade Emgp a major driving force in the development of Icade. Icade Foncière des Pimonts specialises in holding medium to large size office blocks and is developing into the acquisition of commercial property. Icade Foncière des Pimonts operates an office block portfolio located in the Central Business Quarter of Paris, La Défense, Boulogne-Billancourt and Issy-les-Moulineaux. As at 31 st December 2005, Icade Foncière des Pimonts held total assets of 190,869 m 2 (of which 120,384 m 2 Group quota share). SERVICES Icade is present in the rental and operational management of commercial property for third parties and itself (property and facilities management or PFM) under the names Icade Gestion Tertiaire and Icade Eurogem, property project engineering under the name Icade Arcoba and property consultancy under the name Icade Conseil. This wide range of services allows the company to respond to all its customers needs within the framework of setting up, developing, managing and optimising their property projects.

OUTSTANDING FEATURES 2005 Icade significantly strengthened its position in the commercial property sector with an 87% increase in turnover. Under development activities, Icade sold the Antony 2 complex on an off-plan basis, representing 29,000 m 2 net floor area to be built. Two office projects were delivered: L Espace Marceau (8,100 m 2 ) and Le Lagny (9,300 m 2 ) in Montreuil-sous-Bois; and finally Bâtiment 270 (7,500 m 2 ), one of the first office blocks in France to be named as a Haute Qualité Environnementale (High Environmental Quality) building, was opened in the Parc des Portes de Paris. In respect of investment activities, Icade secured planning permission for the Porte d Aubervilliers shopping centre (60,000 m 2 ) while the Parc du Millénaire (Paris 19) continues to expand. Finally, Icade took a holding in the Mr. Bricolage shops property company. This operation could, subject to certain conditions, enable it to acquire assets of 143,800 m 2 of selling space. In the services field, Icade has developed its offer of information and communication systems for new major customer accounts (Total, Orange, etc.) and is continuing to develop its property business within the framework of the Tour Montparnasse contract won in 2005. Icade has extended its horizon in the Île-de-France with the beginning of the running of Axa s head office and five new France Telecom sites. 27

28

ICADE S THREE MARKETS/ COMMERCIAL PROPERTY Annual Report 2005 STRATEGY Icade s strategy in the commercial property market consists of: increasing development in the shopping centre sector and complex operations (programmes combining offices, businesses, accommodation, conference centres, cinemas...); consolidating its positions in the Île-de-France and developing its presence in major regional cities; enhancing the unique geographic set-up of Icade Emgp by gradually converting the site from a warehouse area into a company and business park and improving the architecture and environment of the site; making Icade Foncière des Pimonts a preferred vehicle for commercial and tertiary asset outsourcing projects; becoming the reference player in property and facilities management in France and increasing its profitability by refocusing on higher added value activities: property administration, gateways and networks, security and safety; consolidating the positioning of its consultancy activities in their upstream and downstream synergy federating role. Les Portes d Arcueil Arcueil (94) 44,600 m 2 Icade Tertial: Developer Architect: François Leclercq Investor: UBS User: Orange 29

ICADE S THREE MARKETS PUBLIC-HEALTH PARTNERSHIPS Key figures 1 of every 2 hospitals built in France 81% public customers in the service businesses 24 agencies in France Icade is present in the public and health markets via its three business units: DEVELOPMENT Icade G3A develops property operations for public authorities (the State, local authorities, public establishments), private authorities working in the field of health and private property investors throughout France. Icade is the top French operator in health property. It has been involved in the construction of one out of every two hospitals on average for the last 20 years. Icade is also heavily involved in the education sector (universities, grammar schools, secondary schools) and culture, sport and leisure facilities projects and the construction of administrative offices. Icade G3A develops office blocks in the provinces; multi-programme property developments (offices, businesses, accommodation, private and public amenities) within the framework of complex urban development or district renewal operations. INVESTMENT Icade decided to combine its current and future public use property assets within a property company formed in January 2006, Icade Foncière publique. This property company is designed to host the outsourced assets of the State, local authorities and private owners and, in that capacity, to hold property rented to public users (ministries, local authorities, hospitals, clinics, retirement homes) either on a freehold basis or investing in companies holding public-private partnership (PPP) contracts. SERVICES Icade G3A provides public amenities on behalf of public authorities or private amenities within the framework of developer mandate or assistance contracts. University Library of St-Quentin-en-Yvelines Guyancourt (78) 7,540 m 2 Icade G3A: Agent for the project owner Architects: Atelier Ripault & Duhart Client: Île-de-France Region Opened in March 2005 Icade Setrhi-Sétaé is the leading company in general hospital, medicosocial and financial engineering management in France and Europe. Its skills cover all sectors: hospitals, clinics, retirement and old people homes, laboratories, balneotherapy and thalassotherapy facilities. In the health field, Icade G3A and Icade Setrhi-Sétaé operate under the Icade Santé brand name. 30

OUTSTANDING FEATURES 2005 Icade continues to develop in the field of public-health partnerships with 2005 turnover of m94.6. With regard to development, Icade won seven PPP invitations to tender including the Docks en Seine (Paris 13), L Institut de la Vision - Hôpital des Quinze-Vingts (Paris 12) and a 7,000 m 2 home with medical facilities in Laval. Six projects with a total floor area of 33,647 m 2 were delivered including Le Quai François Mitterrand in Nantes and Les Portes d Espagne in Toulouse. Eight new projects were launched. In the services division, Icade created the Icade Santé brand combining the health related activities of Icade G3A and Icade Setrhi-Sétaé. 31

32 1

ICADE S THREE MARKETS/ PUBLIC-HEALTH PARTNERSHIPS Annual Report 2005 STRATEGY Icade s strategy in the public-health partnerships market consists of: establishing itself as one of the leading companies in PPP operations in France, developing the public amenities development and multi-programme residential complex business; developing its role as an investor in property dedicated to public sector in order to enable Icade s customers to get a global offer of products and services; strengthening its position as a leading company in services for the health sector (studies, engineering, development) under the Icade Santé brand. 1- Institut de la Vision Paris (75) 11,425 m 2 Icade: Public-private Partnership Architects: Jérôme Brunet-Éric Saunier Project owner: Hôpital des Quinze-Vingts Contract signed in June 2005 2- Hôpital Lorient (56) 65,000 m 2 Icade G3A: Instructed to rebuild the hospital on the site of the former military hospital. Architects: Valode & Pistre Contract signed in September 2005 2 33

ICADE S THREE MARKETS INTERNATIONAL Key figures 21 student residences managed and operated in Spain (5,000 beds) 950 commercial buildings managed in Italy In Europe, Icade is developing property investment and services activities in the housing and commercial property markets. Icade is also supporting large international accounts, investors and users, in their European set-ups. SPAIN Icade has had an office in Barcelona since 1991 under the Inmobiliaria de la Caisse des dépôts name, providing turnkey project management services, from project management to technical and administrative management of buildings. Alongside private investors and within the framework of property concessions concluded with universities, it is involved in the design, financing and construction of student residences within investment companies: the Siresas. Under the Resa brand, it is the top Spanish student residences manager with a presence in 13 major cities and is in charge of the management and operation of 21 Siresas residences representing more than 5,000 beds (Barcelona, Madrid, Seville, Granada ). Icade also manages housing assets under the Inmobiliaria de la Caisse des dépôts Fincas Anzizu name, located in Barcelona. Its clientele of private individuals is diversifying into property transaction and management of commercial buildings. Under the Imsi name, Icade provides facilities management services in the commercial property and public facilities sectors. ITALY Icade Italia and Icade Newreal are located in Milan and cover the whole of Italy (Turin, Naples, Palermo ). They offer their institutional investor and property company customers (Deutsche Bank, Goldman Sachs, Ixis Aew, Aedes) their expertise in property and facilities management and are diversifying their range of services into property audits and transactions. Icade thus manages more than 950 commercial buildings in Italy. Avenue Foix Barcelona - Spain Icade: Property manager Architect: Carlos Ferrater BELGIUM, CZECH REPUBLIC AND HUNGARY Icade has offices in Belgium, the Czech Republic and Hungary under the Icade Benelux, PFM and BFM brands, providing facilities and construction management services for commercial buildings on behalf of well-known institutional investors (European Commission, European Parliament ). 34

35

36

ICADE S THREE MARKETS / INTERNATIONAL Annual Report 2005 STRATEGY Icade is considering European development which, while seeking profitability, should favour investment security. Icade s European strategy is to: seek out portfolios of residential and commercial (offices and shopping centres) property assets, the value of which can be enhanced by a contribution from its various areas of expertise; develop new business park projects by reproducing the Icade Emgp model, by acquiring one or two sites in a major European city; develop and duplicate its know-how in terms of student residences. Torre Girona student residence Barcelona - Spain Icade: Overall management mandate Architects: L. Domenech - R. Amado/ B01 Arquitectes 37

38

HUMAN RESOURCES 39

HUMAN RESOURCES ICADE S EMPLOYEES ICADE S STAFF At the end of 2005, Icade s total staffing (excluding international) amounted to 3,366 employees, compared with 5,715 at the end of 2004. This change can primarily be explained by: - the transfer of 2,353 Icade employees on the occasion of the transfer to SNI, - the addition of 193 employees on the acquisition of Cabinet Villa by Icade Administration de Biens. At 31 st December 2005, Icade also had 254 international employees. In 2005, not counting the acquisition of Cabinet Villa by Icade Administration de Biens, the total number of new employees amounted to 372 open-ended contracts and 384 fixed-term contracts. Not counting the sale of the division to SNI, the total number of people leaving Icade and its subsidiaries amounted to 407 open-ended contracts and 326 fixed-term contracts. Staff turnover for 2005 was therefore about 10%. SPLIT BY MARKET Housing Commercial property Public-health partnerships Other (International and Icade SA) HOUSING The main change in staffing is due to the acquisition of Cabinet Villa (193 employees) as well as support for the increased business of Icade Capri (+16 employees). COMMERCIAL PROPERTY The acquisitions of Icade Conseil and Icade Expertise (39 employees) contributed to the increase in staffing. PUBLIC-HEALTH PARTNERSHIPS The significant fall in average staffing in the public-health market can be explained by SCET and Icade Cités, which together accounted for 538 employees, leaving the consolidation. OTHER (INTERNATIONAL AND ICADE SA) The international division saw its staffing increase (56 employees) due to the acquisition of Newreal. The mutualisation of the support functions resulted in the transfer of 56 employees to Icade SA. 40

Annual Report 2005 CAREER DEVELOPMENT/ RECRUITMENT INTERNAL PROMOTION is one of the key factors in motivating Icade personnel which, within the framework of its career management strategy, has a policy of filling vacant positions by internal mobility as a priority. Icade also recruits externally when seeking specific profiles or skills to enrich and develop knowledge and know-how within the company. ONGOING TRAINING Icade encourages its employees to acquire new skills by making a significant investment in terms of allocated training time. In 2005, Icade dedicated 2.5% of its personnel costs to training its employees. 65% of them thus attended a training course, spending an average time of 12 hours per employee. For 2006, Icade s training guidelines place the accent on crossdisciplinary work, specifically the strengthening of managerial skills, synergies and the development of multi-disciplinary training. The aim is to have employees specialising in specific markets take advantage of this in order to promote common dynamics within Icade. 41

42 1

2 GOVERNANCE 3 1- Works: Michel Cabaret 2- Crystal Défense Nanterre (92) Icade Tertial: Developer Icade Arcoba: Technical studies Architects: Chaix & Morel et Associés Investor: GCI / Whitehall User: HSBC 3-85-89, quai André Citroën Paris (75) Icade Eurogem: Facility manager Icade Foncière des Pimonts: Investor Architect: Richard Meyer 43

GOVERNANCE CORPORATE GOVERNANCE THE BOARD OF DIRECTORS The Board of Directors determines the guidelines of Icade s businesses and oversees their implementation. Subject to the powers expressly assigned during Shareholders Meetings, and within the confines of the corporate object, it deals with all matters relating to the smooth running of Icade and through its deliberations makes decisions on matters concerning it. The Board of Directors meets at least three times a year and whenever the interests of the company so require. It met four times in 2005. COMMITTEES OF THE BOARD OF DIRECTORS In order to support it in its work, the Board of Directors set up three specialist committees: an audit committee, a nominations and remuneration committee and an investment committee. The audit committee The audit committee assesses the quality of the financial information submitted to the Board of Directors and examines the regulatory accounting methods used in producing the accounts. It supplements the work of the auditors but without replacing them. The members of the audit committee are Christian Peene (Chairman), Jérôme Gallot and Marc-Antoine Autheman. The audit committee met four times in 2005. The nominations and remuneration committee The nominations and remuneration committee makes proposals to the Board of Directors on the appointment of directors and the remuneration of the Chairman and CEO. It also looks at proposals for the employee share incentive scheme as well as their conditions and terms of application. The members of the nominations and remuneration committee are Edmond Alphandéry (Chairman), Étienne Bertier, Jérôme Gallot and François Pochard. Guy Parisot was appointed Secretary. Investment committee The investment committee gives a decision on any Icade investment or disinvestment undertaking, the value of which (or accrued turnover in respect of multi-annual contracts) is more than 30 million. In this regard, it gives a decision on: all property investment or disinvestment operations; all commercial development, external growth, investment (acquisition of securities, goodwill ), disposals, mergers and partnerships, in blank operations; any investment in a new business or new country. The members of the investment committee are Étienne Bertier (Chairman), Dominique Marcel, Edmond Alphandéry, Jean-Louis Subileau and Christian Peene. 44

Annual Report 2005 BOARD OF DIRECTORS Edmond Alphandéry Chairman of the Supervisory Board, CNP Assurances Étienne Bertier Chairman and Chief Executive Officer, Icade Marc-Antoine Autheman Caisse des dépôts, represented by Dominique Marcel Head of Finance and Strategy, Caisse des dépôts Jérôme Gallot Head of Retirement Savings, Caisse des dépôts Thierry Gaubert Head of the office of the Chairman of the Management Board, CNCE Christian Peene General Partner, CMP Consultants François Pochard Chief Executive Officer, IXIS AEW Europe Jean-Louis Subileau Chief Executive Officer, Saem Val-de-Seine Aménagement 2, rue du 4 Septembre Paris (75) Icade Foncière des Pimonts: Investor 45

ORGANISATION MANAGEMENT COMMITTEES THE MANAGEMENT COMMITTEE The management committee meets every week to deal with matters relating to the finances, organisation, customers and employees of Icade. It also routinely discusses current projects. THE STRATEGIC COMMITTEE The strategic committee meets every six weeks to deal with the strategy and guidelines of Icade, the development of operational activities, business acquisitions and disposals and synergies between business units. THE UNDERTAKINGS COMMITTEE The undertakings committee meets every month and whenever the situation requires. It authorises the allocation of equity, on or off balance sheet commitments to any project or investment, whether business related or not. It examines all proposals valued at more than 10 million relating to property investment/disinvestment, commercial property, housing, public-private partnership development operations, leasing serviced apartment buildings, multi-annual facilities management contracts. Without any threshold limit, it examines proposals relating to external growth, investments, disposal of securities, goodwill, mergers and partnerships. The undertakings committee is also referred to and must authorise any proposed housing development operation if the acquisition cost of the land excluding charges exceeds 3.5 million in respect of provincial projects and 5 million in respect of projects in the Île-de-France ( 7 million for Paris and Hauts-de-Seine) and/or if the forecast turnover exceed 22 million ( 30 million for Paris and Hauts-de-Seine). THE HUMAN RESOURCES COMMITTEE The human resources committee meets every two weeks to discuss aspects of human resources within Icade and in particular to monitor major projects under way, report on mobility, recruitment, legislation and legal aspects, training and the introduction and monitoring of procedures. 46

Annual Report 2005 From left to right: Jean-Pierre Matton, Antoine Fayet, Marianne de Battisti, Inès Reinmann, Étienne Bertier, Bertrand Delannoy et Guy Parisot. MEMBERS OF THE MANAGEMENT COMMITTEE Étienne Bertier Chairman and Chief Executive Officer Marianne de Battisti Head of International and Communications Bertrand Delannoy Head of Finance Antoine Fayet Head of the Housing Division Jean-Pierre Matton Head of the Public-health partnerships Division Guy Parisot Head of Human Resources Inès Reinmann Head of the Commercial Property Division 47

SUSTAINABLE DEVELOPMENT Annual Report 2005 ICADE, A SUSTAINABLE DEVELOPMENT PLAYER Icade, a major player in the property market, is convinced of the importance of bequeathing on a healthy environment to future generations. This commitment to work for sustainable development goes beyond mere legal requierments. Icade has thus taken environmental problems into account in all its activities. Icade is particularly careful to respect the environment in its: development business, because it itself is an investor, property business, because it serves major users, service provider business, in order to meet the increasing demands of its customers. AN ENVIRONMENTAL CHARTER SOON TO BE EXTENDED TO ALL OF ICADE S BUSINESSES In 2003, Icade introduced a charter based on from principles established by the Association Haute Qualité Environnementale (High Environmental Quality Association) (HQE ) which applies to all accommodation it markets: consideration of the site characteristics and integration of structures into their surroundings, favouring parks; control of environmental impact during constuction phase; optimisation of occupants water and energy consumptions; information on and distribution of actions taken. This charter will gradually be extended to all of Icade s businesses, in all markets, out of a constant concern to protect the environment. 48 Parc de Montesquieu Bordeaux (33) Icade Capri: Developer of 157 homes Architect: Richard Vianne-Lazare In 2005, the Parc Montesquieu project secured Habitat & Environment certification from Cerqual, an independent organisation.

49

THE THREE MARKETS Annual Report 2005 ENVIRONMENTAL QUALITY: A PRIORITY IN ICADE S STRATEGY Icade s efforts to protect the environment were awarded in 2005: The Parc Montesquieu project, carried out in Bordeaux by Icade Capri, secured Habitat & Environment - H&E certification from Cerqual, an independent organisation. This certification attests to the quality of the 157 homes constructed, as well as respect for the environment by means of reasoned resource management, reducing pollution and a constant desire to preserve parks. Icade Emgp makes the High Environmental Quality of its new buildings one of its priorities and in 2005 thus secured one of the first five French Tertiary Buildings HQE approach certifications for Building 270 in Aubervilliers. Icade G3A supports the Regional Council of the Alsace Region in respect of NF tertiary buildings, HQE environmental profile approach certification for the construction of the Jean-Rostand Grammar School in Strasbourg, as assistant developer, with eight impressive targets. Furthermore, thanks to Icade G3A, INERIS (Institut national de l environnement industriel et des risques) (National Institute of the Industrial Environment and Risks) received HQE tertiary certification for the programme, design and construction phases of the reception centre and all its offices, with a net floor area of 1,243 m 2. Icade Eurogem won ISO 9001 certification in March 2005 for its facilities management activities throughout France, consisting in particular of taking over technical installations and controlling services. Icade Eurogem wants to extend this certification to the management of business parks, the operation of heating plants and multi-technical site services in order to implement its environmental approach. 1- INERIS Training Centre and Office Verneuil-en-Halatte (60) 3,400 m 2 Icade G3A: Project management within the framework of a mandate Architects: Arval Project owner: Institut national de l environnement industriel et des risques. 50 2- Le Mélèzium Lille (59) Icade Capri: Co-developer of 57 apartments Architects: J-L. Leclercq & X. Bouffart - Quatr A Architecture In March 2006, this project won the Silver Pyramid in the Property Aesthetics Award category awarded by the FPC and UCB.

1 2 51

ORGANISATION SIMPLIFIED* ORGANISATION CHART AS AT 31.12.2005 Icade HOUSING COMMERCIAL PROPERTY Icade Capri Icade Emgp Icade Capri SASU AD2B SAS 51% Groupe Promo Midi SA 51% Groupe Ellul SA Méditerranée Sud Habitat SARL 50% Groupe Ellul Para Bruguière SARL SCI / SNC / SARL de Promotion et Lotissement (215) 83% Icade Emgp SA Asset based companies Bati Gautier SCI Parc du Millénaire SNC CFI SAS SCI 68 Victor Hugo 99% SCI PDM 1 99% SCI PDM 2 99% SCI PDM 3 32% 32% 36% SCIA Le Parc du Millénaire GIE Capri Trésorerie 99% 60% SERAEL SA Severine SCI 50% Bassin du Nord SCI Icade Administration de Biens Icade Administration de Biens SASU GFF Institutionnels SASU 55% Service companies Manutra SAS (45% Icade Eurogem SASU) Manutra Sécurité SARL Icade Foncière des Pimonts Montparnasse Sces SARL 95% Icade Foncière des Pimonts SA Icade Eurostudiomes SASU Messine Participations SCI 60% Eurocampus SARL Seine A4B SCI Pont Neuf SCI Cabinet Villa SASU 114 Avenue Champs-Elysées SCI Cabinet Villa Gestion SASU Villa Transactions SASU 1 Rond-Point Champs-Elysées SCI 26-28 Avenue de Wagram SCI 31 Rue Mogador SCI 3-5 Avenue de Friedland SCI Icade Patrimoine 99% 99% 69 Boulevard Haussmann SCI 2 rue du 4 septembre SCI Camille Desmoulins SCI 98% Icade Patrimoine SA Foncière Commerce IDF SAS 94% SCI Patrimoniales et Foyers (37) SCI Patrimoniales (39 of which 16 in liquidation) SACLE SAS GIE ICADE Patrimoine ------------ GIE ICADE Trésorerie 99% Morizet SCI 99% Rive du Quinzième SCI 99% 22-24 Avenue de Wagram SCI 33% Terrasse Bellini SCI 33% Tour Descartes SAS Icade Gestion Tertiaire 52 * Consolidated companies Icade Gestion Tertiaire SASU

Annual Report 2005 PUBLIC-HEALTH PARTNERSHIPS Icade Eurogem Icade G3A Icade Eurogem SASU Icade G3A SASU I Labor SNC I PORTA SAS Icade Suretis SASU 99% Development assistance Icade Setrhi-Sétaé SASU Promotion SNC Icade G3A Promotion GESTEC & RS Consultant SAS 99% SNC Etb Nord Promotion EURIS FM SARL (Belgique) 99% SNC Bureaux de l Île de Nantes IMSI EUROGEM SA (Espagne) 99% SNC France Ouest Promotion 78% 75% IMOP SA KLEBER FM SAS 67% 50% SNC Icadleo SNC Sorif Icade Les Portes d Espagne 65% FACIMALP SA Icade Tertial SASU 60% 55% 50% Normandial de Services SAS ISIS Facilities SAS STHAL SNC SCI Antony Parc II SCI Néruda Fontanots SNC Les Portes d Arcueil A 49% PROTERTIA SAS SNC Les Portes d Arcueil B SNC Les Portes d Arcueil C 77% SCI Odysseum 2 Icade Conseil 63% 51% SARL Aménagement La Croix de Berny SCI 22-24 Rue de Lagny 51% SCI Espace Marceau Icade Conseil SASU Icade Expertise SASU 50% 25% 13% SCI Nice 400 Promenade des Anglais SCI Paris Berthelot SNC PB 31 Promotion (37% Icade) SCI Les Tovets Icade Arcoba SASU Icade Arcoba EUROPEAN MARKET Icade in Spain Inmobiliaria de la Caisse des Dépôts SAU 90% 67% Fincas Anzizu SARL Resa SA Icade in Italy Icade Italia SpA NewReal SARL 53