Agency Management

Activities aimed at finding the most profitable tenant mix and negotiating leases for stores at malls.

Development pipeline

Program of investments in development.

Direct costs

Costs directly attributable to the shopping centers.

Dividend yield

The dividend yield, or price/dividend ratio, on a company stock is the company's annual dividend payments made or announced dividend by closing price of its ordinary shares at the end of the year.

EBIT (Operating profit)

EBIT, or Earnings before Interest and Taxes, differs from EBITDA in that it includes information on amortization, depreciation and changes in the fair value of properties held. In the case of IGD, which follows International Accounting Standards (IAS), amortization and depreciation are not overly significant as the value of the freehold properties is updated every six months, based on an independent appraisal; properties are recognized at market value in the balance sheet, while the difference in fair value is shown in the income statement between EBITDA and EBIT.

EBITDA

EBITDA or Earnings before Interest, Taxes, Depreciation & Amortization, is the most significant measure of a company's operating performance as it indicates earnings regardless of the company's means of financing, taxes or investment cycle. EBITDA is a proxy for the operating cash flow that the company is capable of generating.

EPRA

European Public Real Estate Association.

EPS/Earnings per share

Net profit dividend by the average number of shares outstanding in the year.

ERV/Estimated rental value

The estimated value at market rates for rentable spaces, according to an independent appraisal based on similar properties in comparable areas.

Facility Management

Supply of specialized services to shopping centers such as security, cleaning and routine maintenance.

FFO/Funds from operations

Net profit plus deferred taxes, depreciation & amortization, net change in the market value of properties and writedowns. This is the indicator most commonly used to evaluate a REIT's performance.

GLA

Gross leasable area.

Gross floor area

Surface area of a property including external walls.

Gross margin

The result obtained by subtracting direct costs from revenues.

Hedging ratio

The total amount of mortgage loans hedged with interest rate swaps and bonds divided by the total amount of mortgage loans and bonds.

Hypermarket

Property with a sales floor in excess of 2,500m², used for the retail sale of food and non-food products.

IRS/Interest Rate Swaps

Financial instrument whereby two parties agree to exchange a certain interest rate stream on a pre-established date. Used to convert floating rate debt into fixed rate debt.

IPD

Investment Property Databank. An index which produces an independent benchmark for real estate investment returns.

Initial yield

The annualized rental income from a property as a percentage of its valuation at the time of purchase.

Joint venture

Entity controlled on a long-term basis by two or more parties, based on a contractual agreement which calls for decisions regarding the management and financing of the enterprise to be made jointly.

Like-for-like portfolio

Real estate assets held in the portfolio for the entire year and the entire prior year.

LTV/Loan to value

Ratio between the amount borrowed and the fair market value of freehold properties.

Mall/Shopping Mall

Property comprised of many stores plus the common spaces around which they are situated. Usually called a "Galleria" in Italian.

Market value (Fair value)

The estimated amount for which a property could be exchanged as of the valuation date, between a buyer and seller each acting prudently and with knowledge of all the facts. The definition of market value used by the appraiser is as follows: "Pursuant to the 6th and latest edition of the "RICS Appraisal and Valuation Manual" (the "Red Book") publishe dby the Royal Institution of Chartered Surveyors in the United Kingdom and translated into Italian on 1st January 2008, market value is the estimated amount for which a property could be bought and sold on the dtae of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion".

Midsize store

A property with a sales floor of 250 to 2,500m² used for the retail sale of non-food consumer goods.

Nav/Net Asset Value

Difference between the value of properties (Asset Value) and net debt. The NAV per share indicated in IGD's financial statements is the Triple Net Asset Value (£NAV), wchich is expressed net of latent capital gains and the tax effect. In the calculation, potential capital gains on freehold property are added to net equity. The tax effect, based on the company's tax rate, is then deducted from this result. This Net NAV (NNAV) figure is then divided by the number of shares issued.

Net area

Surface area of real estate not including external walls.

Occupancy rate

Gross let surface area expressed as a percentage of properties' total surface area.

Operators committee

Committee made up of retailers operating inside the shopping centre.

Over-rented

Space rented for an amount exceeding its ERV.

Pre-let

Lease signed by a tenant before development of the property has been completed.

Real estate portfolio

The portfolio of freehold and leasehold properties rented out by the IGD Group.

REIT

Real Estate Investment Trust, comparable to a SIIQ in Italy.

Retail Park

Goup of three or more complexes with a combined area of more than 4,500 mq and shared parking.

Reversionary potential yield

The net annual rent that a property would generate if it were fully let at going market rates, as a percentage of the property's value.

ROACE/Return on average capital employed

Operating income dividend by average capital employed in the year.

ROE/Return on equity

Net profit dividend by net equity after dividends.

Shared costs

Corporate costs not attributable to the individual shopping center.

Shopping center

Real estate complex comprised of a hypermarket and a shopping mall, featuring common areas and services located in a covered area with heating and air conditioning.

SIIQ

Società di INvestimento Immobiliare Quotata, Real estate investment model comparable to a REIT. SIIQ rules allow income tax exemptions for publicly held listed companies whose prevalent activity is the rental of properties and the equivalent, provided they meet a series of earnings and balance sheet requirements.

Store

Property for the retail sale of non-food consumer goods.

Supermarket

A property with a sales floor of 250 to 2,500m², used for the retail sale of food and non-food products.

Tenant mix

Set of store operators and brands found within a mall.

Under-rented

Space rented for an amount less than its ERV.

WACC/Weighted average cost of capital

The weighted average cost of debt and all other sources of capital, used to calculate the expected return on investments.