Globalworth Regulatory News (GWI)

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.

19 September 2019

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Interim Results for the six months ended 30 June 2019

Globalworth, the leading office investor in Central and Eastern Europe, is pleased to release its Interim Report and Unaudited Consolidated Financial Results for the six-month period ended 30 June 2019.

Dimitris Raptis, Deputy Chief Executive Officer and Chief Investment Officer of Globalworth, commented: "We are proud of our achievements in the first half of 2019, notably the further expansion of our portfolio, our robust operating metrics, and the strong increase in our financial results. We contracted over 100k sqm of space, marking this as our most active half year of leasing activity to date, while our rental income increased by 35% over H1-18 and our EPRA net asset value rose by 46% from 31 December 2018 to over €1.75 billion. We were delighted with the success of our €501 million equity issuance in April, which came alongside €283 million of acquisitions in Poland and further additions to our development pipeline in Romania. The team continues to deliver on our ambitious objectives, while seeking to consolidate Globalworth's position as the leading office landlord in the CEE."

Operational Highlights

·; The Group announced the acquisition of four office investments in Poland for a total consideration of €283.1 million, two of which completed in July 2019. These included the iconic Warsaw Trade Tower, on which the Group subsequently agreed and closed a major lease renewal for an additional 10 years with AXA, the anchor tenant.

·; Further progress was made with the Group's development pipeline in Romania, with Globalworth Campus Tower 3 on course for completion by the end of the year and Globalworth Square due for completion in mid-2020. Since 31 December 2018, major leases have been signed at Campus Tower 3 with Allianz and Unicredit for 18.9k sqm in total, resulting in 56% (70% including expansion options of the building) of the commercial space being pre-leased for a term of 10 years.

·; In the logistics / light-industrial sector, two new joint venture projects have been agreed for major developments in Constanta, marking the Company's entry into this key market, and Chitila, near Bucharest. The first facility at the second phase of Timisoara Industrial Park has also been completed and was 67% let as at 30 June 2019. The logistics / light industrial portfolio is being rebranded under the "Globalworth Industrial" banner as the Group continues to build its position in this dynamic sector.

·; Globalworth's combined real estate portfolio1 was valued at €2,745 million as at 30 June 2019 (31 December 2018: €2,462 million), rising to €2,858 million pro forma for the July 2019 acquisitions, and representing an increase of 11.5% and 16.1% respectively since 31 December 2018. The portfolio's pro forma geographical allocation is 53.5% Poland and 46.5% Romania, reflecting the rapid pace of acquisitions in Poland since Globalworth entered the market in Q4-2017. The total gross leasable area of the Group's combined real estate portfolio was 1,138.8k sqm as at 30 June 2019, and 1,190.0k sqm pro forma.

·; The Group negotiated the take-up or extension of 101.2k sqm of commercial space, broadly split between Romania and Poland, marking this as our most active half year of leasing activity to date. New leases for 43.4k sqm were signed at an average lease term of 8.1 years, while renewals and existing tenant expansions amounted to 57.8k sqm at an average term of 6.6 years. As at 30 June 2019, 1,055.4k sqm of commercial space was let or pre-let to some 685 tenants, of which 77% (by contracted rent) is to multinational corporates, with a weighted average lease length of 4.9 years.

·; Occupancy of the combined commercial standing portfolio was 93.9% (94.8% including tenant expansion options) as at 30 June 2019, compared to 95.1% (96.3% including tenant expansion options) as at 31 December 2018. This slight decrease reflected the inclusion of properties acquired or completed since 31 December 2018 with lower occupancy levels, but where the Company expects to reduce vacancy through its active asset management and leasing initiatives. Like-for-like occupancy declined marginally by 0.5% following movements of certain tenants in the Romanian portfolio and the partial repositioning of a mixed-use property in Poland.

Financial Highlights

·; In April 2019, the Company successfully raised €347.6 million of new equity at €9.10 per share, a small premium to the December 2018 EPRA net asset value per share, to facilitate ongoing acquisition activity. In addition, €153 million of new shares were issued in exchange for certain minority interests in Globalworth Poland Real Estate N.V. ("Globalworth Poland") as part of a series of transactions to buy in the outstanding minority interests, using both newly issued Globalworth shares and cash. The Company's shareholding in Globalworth Poland has now increased to 99.9%, rising 0.1% post 30 June 2019 (31 December 2018: 69.7%). The Company is in the process of acquiring the remaining outstanding shares through a mandatory transfer and de-listing GPRE from the Warsaw Stock Exchange, which is anticipated to be completed in the coming months.

·; Rental income of €71.8 million (H1-18: €53.3 million), an increase of 35.2% over H1-18 primarily as a result of the expansion of the Group's portfolio since 1 January 2018. Underlying rental income growth of 5.1%2 over H1-18 was recorded on properties held throughout both periods but offset by the impact of the termination of master lease and net operating income ("NOI") guarantees on certain properties in Poland in December 2018, which resulted in the receipt of €21.5 million in H2-18.

·; NOI of €68.0 million (H1-18: €51.7 million), an increase of 31.5%.

·; Adjusted normalised EBITDA3 from ongoing operating activities of €61.6 million (H1-18: €42.2 million), an increase of 46.0% over H1-18 primarily due to the growth in NOI.

·; Earnings before tax of €88.0 million (H1-18: €64.0 million), an increase of 37.7% mainly as a result of the increase in NOI, higher valuation gains and the increased share of profits from the Group's joint ventures.

·; Profit attributable to equity holders increased to €69.9 million (H1-18: €49.8 million), an increase of 40.5%, while earnings per share increased by 16.9% to 44.0 cents per share (H1-19: 37.6 cents per share) as a result of the increase in the average number of outstanding shares. 

·; EPRA earnings of €37.3 million (H1-18: €27.0 million), an increase of 38.0%, while EPRA earnings per share increased by 14.8% to 23.5 cents per share (H1-18: 20.4 cents).

·; A fair value gain of €49.7 million was recorded on investment property (H1-18: €38.6 million), excluding properties held through joint ventures, with the contribution broadly split between Poland (48%) and Romania (52%). Standing properties at 31 December 2018 recorded a 1.2% fair value gain.

·; EPRA NAV of €1,754.3 million (31 December 2018: €1,200.2 million), an increase of 46.2% compared to 31 December 2018. The significant increase reflects the impact of the April 2019 capital raise and the elimination of the minority interest in Globalworth Poland, primarily through the share exchange for Globalworth shares. EPRA NAV per share of €9.05 (31 December 2018: €9.04) marginally increased given the result of the increased share count.

·; In January 2019, a dividend of 27 cents per share was declared and paid, reflecting the second dividend in respect to FY18 (FY18 dividend: 54 cents). Post the period end, the Company declared its first interim dividend in respect of FY19 of 30 cents per share, which was paid in August 2019.

·; A reduction in loan to value to 36.5% (31 December 2018: 43.9%) following the equity capital raise completed in April 2019. As at 30 June 2019, the Group had a weighted average interest rate of 2.85%, with an average maturity of 4.9 years.

Outlook

·; The Company's activities continue to benefit from a supportive economic environment and healthy real estate fundamentals in both Poland and Romania. With ongoing expansionary demand from multinational companies attracted to the region, the Company considers itself well positioned with its strategy of offering high quality, well located space, with a long-term tenant orientated approach and with a strong focus on localised management.

·; With funding costs remaining compelling compared to the yields available from real estate, the Company continues to see excellent opportunities to consolidate its market position and grow its platform. It has a pipeline of acquisition opportunities with the potential to make attractive additions to its portfolio, facilitating greater scale and efficiencies in asset management. By further extending its asset management capabilities across its portfolio it sees opportunity to create value both from existing properties and from recent acquisitions.

The Interim Report and Unaudited Condensed Consolidated Financial Statements is presented below. The full document is available in the "Investor Relations" section of the Company's website at www.globalworth.com.

1 Combined real estate portfolio includes the Group's property investments consolidated on the balance sheet under Investment Property - Freehold as at 30 June 2019, plus those properties held as Joint Ventures (currently Renault Bucharest Connected, and land relating to Globalworth West, Chitila Logistics Park and Constanta Business Park projects) presented at 100%.

2 The H1-18 rental income used for the comparative has been adjusted to exclude the effect of the income (€2.6 million) recognised as a result of the master lease and NOI guarantees on certain properties in Poland, which were settled in December 2018 and, therefore, such income was not earned during H1-19.

3 Earnings before finance cost, tax, depreciation, amortisation of other non-current assets, purchase gain on acquisition of subsidiaries, fair value movement, and other non-operational and/or non-recurring income and expense items. This includes the share of minority interests.

For further information visit www.globalworth.com or contact:

Enquiries

Andrew Cox Tel: +44 20 3026 4027

Head of Investor Relations & Corporate Development

Jefferies (Joint Broker) Tel: +44 20 7029 8000

Stuart Klein

Panmure Gordon (Nominated Adviser and Joint Broker) Tel: +44 20 7886 2500

Alina Vaskina/Justin Gulston

Milbourne (Public Relations) Tel: +44 7903 802545

Tim Draper

About Globalworth / Note to Editors:

Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Romania and in Poland. Globalworth acquires, develops and directly manages high-quality office and logistics/light-industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by over 200 professionals across Romania and Poland, the combined value of its portfolio is €2.85 billion, as at 30 June 2019 pro forma for subsequent acquisitions. Over 95% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of some 685 national and multinational corporates. In Romania, Globalworth is present in Bucharest, Timisoara, Constanta and Pitesti, while in Poland its assets span Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice. For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.

IMPORTANT NOTICE: This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, the Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED

INTERIM REPORT AND UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30 JUNE 2019

FINANCIAL HIGHLIGHTS: H1-19

1The H1-18 EPRA Earnings figure has been adjusted for comparability purposes, following consultation with EPRA subsequent to the publication of the H1-18 Interim Report.

CHIEF EXECUTIVE'S STATEMENT

Globalworth again grew dynamically in the first half of 2019, expanding its platform in Poland and Romania while enlarging its capital base and taking important steps to simplify its corporate structure. We continue to take advantage of favourable market trends and value-add opportunities with the ongoing aim of creating sustainable value for our shareholders and other stakeholders.

The Group has in a very short space of time become the leading institutional office landlord in the CEE region, with a portfolio of prime office assets supported by a strong team of experienced professionals, and is now consolidating that position. The Polish and Romanian economies have further expanded and are expected to continue to do so at a pace that exceeds the EU average in the short to medium term. In line with our expectations, these positive economic conditions are being reflected in firm demand for office and logistics/industrial real estate, the sectors on which we are principally focused, with investment volumes exceeding €2.2 billion (office and logistics/industrial) and average vacancy for office space remaining at a healthy level of less than 10% in H1-19.

Our Portfolio

Our portfolio, including the investments completed in July after the close of the first half of 2019, has grown to over €2.8 billion in value following the acquisition of standing office properties in Poland and further progress in our development program in Romania. In addition, through our hands-on approach to actively managing our standing properties, we have created further value in our existing portfolio. Our Polish properties now account for more than half of our overall portfolio by value (53.5%), with the remainder being in Romania.

During the first half of the year, we announced the acquisition of four new investments in Poland for €283.1 million, with the first two completed in March and April (€169.9 million) and the second two in July 2019 (€113.2 million), at what we consider to be attractive entry prices. Our development program in Romania continued apace, with one new logistics facility delivered in April and two office projects under construction in Bucharest. Ahead of the completion at the end of this year of Globalworth Campus Tower 3, the final phase of our 92k sqm office development in Bucharest, we look forward to welcoming Allianz and UniCredit, which in the first half of 2019 signed leases representing 56% of the commercial space of the asset (c.18.9k sqm). We have further projects at the development phase or at various stages of preparation, with construction scheduled for the short to medium term.

H1-19 saw a strong operational performance with 101.2k sqm of commercial space leased in Romania and Poland at an average lease length of 7.3 years, marking the most active half year in our history. Total contracted rents grew to €175.4 million (€184.1 million proforma for July 2019 acquisitions) with over 1.0 million sqm of commercial GLA leased at an average remaining term of 4.8 years at 30 June 2019. Occupancy of our standing commercial portfolio remained high at 93.9% (94.8% incl. tenant options), albeit decreasing from the 2018 year-end level (95.1% / 96.3% incl. tenant options), mainly reflecting lower occupancy on properties added in the period where we see an opportunity for improvement in the near term. Illustrative of our strategy with such acquisitions, we are delighted to have already secured a major 11.9k sqm renewal with AXA at our Warsaw Trade Tower property acquired in April 2019, and are pleased with leasing progress at other properties acquired in H2-2018, notably Skylight & Lumen and Spektrum Tower in Warsaw.

As part of our commitment to offering best in class services to our tenants, we have continued to invest in our portfolio and internalise the management of our assets, and are delighted that 80.9% (by value) of our standing office and mixed-use properties are now managed in-house.

Our confidence in the logistics/industrial sector in Romania has led us to embark on further projects to expand this element of our portfolio. We are excited to have launched the Globalworth Industrial brand for our logistics / light-industrial portfolio, which will result in the rebranding of our existing assets in Timisoara and Pitesti, and to have formed a joint venture partnership with Global Vision, a leading construction and property management company in Romania, for the development of new high-quality facilities. Of the two new joint venture projects agreed in the first half, one will mark our entry into Constanta, one of Romania's key cities and its major port, a market where we see great potential, while the other is for a last-mile logistics facility close to Bucharest.

People, Places and Technology

At Globalworth we fully recognise that technology is a major disruptor for the real estate industry globally, and accordingly we aspire to be the most technologically advanced landlord in the CEE office market. With more than 200,000 people estimated to be entering and passing through the Company's buildings in Poland and Romania daily, we believe that the use of technology has the potential to bring additional value to the Company's portfolio by integrating and working with these people to create a strong community. This comes in addition to our ongoing development projects in Romania and our multiple asset management initiatives across both our core markets.

Creating great communities for our tenants is a central strategic ambition. We seek to provide environments where businesses can flourish and their employees enjoy working. We are pleased with the positive impact that successful events such as the Globalworth District, "Meet Globalworth" and other initiatives within or around our office space have had on the vibrancy and feel of our assets. We are excited to be exploring new ways to enhance this experience, notably through technological solutions and by evolving the services we offer, for example through the development of our own smartphone application, the Globalworth App. Our investment in technology underscores our belief that innovation can enhance the management of real estate and the experience of those occupying it, with our holdings in this field offering both insight and direct access to new practical applications.

Results & Corporate Activity

The Group reported a strong uplift in its first half earnings with an increase of 31.5% in our net operating income to €68.0 million, 46.0% in our normalised adjusted EBITDA to €61.6 million and 38.0% in our EPRA earnings to €37.3 million, as compared to the same period in 2018. We paid a second interim dividend of 27 cents per share in respect of the 2018 financial year resulting in 54 cents in total, and in July 2019 announced our first interim dividend for 2019 of 30 cents per share, which was paid in August 2019.

Following the purchase of certain minority interests in Globalworth Poland, in March we announced that we would embark on buying out the remaining minority interests and delist Globalworth Poland from the Warsaw Stock Exchange. This is an important step to simplifying our corporate structure, which will improve our efficiency at Group level, and we expect the process to be completed by the end of 2019. The Company's shareholding in Globalworth Poland has now reached 99.9%.

We are delighted to have successfully completed our largest equity issue to date with a combined €501 million raised in April 2019. This included €348 million of new equity placed with new and existing shareholders and the issuance of a further €153 million in new shares to Growthpoint Properties Limited in exchange for its shareholding in our subsidiary, Globalworth Poland, as part of a wider process undertaken to buy-in the remaining minority interests.

During the year we welcomed Aroundtown SA one of the largest property companies in Europe, as a new major shareholder. Following their participation in our capital raise and further share purchases, Aroundtown SA now has a 18.9% shareholding in Globalworth.

Our EPRA net asset value grew by 46.2% to €1,754.3 million predominantly as a consequence of the share issuance and buy-in of minorities, while EPRA NAV/Share grew marginally to €9.05 (31 December 2018: €9.04).

CSR and Governance

Sustainability has always been an important focus for Globalworth. We have continued to increase the proportion of our portfolio with green certifications to 78.2% and are proud that our Renault Bucharest Connected development is the first office and design centre property in Romania to be awarded the EDGE (Excellence in Design for Greater Efficiencies) certification, in addition to achieving BREEAM Excellent. We are also now preparing a standalone sustainability report to meet the needs of our many stakeholders and to support the ESG frameworks that many of our investors have applied.

In H1-19, the Globalworth Foundation continued to support a number of social causes in both Poland and Romania. The Foundation's goal is to make a real contribution to the welfare of society and shape better conditions for future generations, consistent with our overriding focus on People, Places and Technology.

We strive to meet high standards of corporate governance, and to this end the Board has taken onboard feedback from investors on our group-wide remuneration structure. This led to the decision in June 2019 to terminate and subsequently settle the previous incentive scheme, which had been put in place in 2016. The new scheme is more consistently aligned with the best practices adopted by other leading listed real estate companies.

At Board level, I would like to thank Akbar Rafiq of York Capital and Alexis Atteslis of Oak Hill Advisors, who stood down from the Board as non-executive directors during the first half of 2019 following the reduction of their respective organisations' shareholdings in the Company. On behalf of the Board, we are grateful to both for their constructive contributions and engagement during their tenure, as well as for their pivotal support as shareholders during Globalworth's formative years.

Outlook

Our activities continue to benefit from a supportive economic environment and healthy real estate fundamentals in both Poland and Romania. With ongoing expansionary demand from multinational companies attracted to the region, we believe we are well positioned with our strategy of offering high quality, well located space, with a long-term tenant orientated approach and with a strong focus on localised management.

With funding costs remaining compelling compared to the yields available from real estate, we see excellent opportunities to consolidate our market position and grow our platform. We have a pipeline of acquisition opportunities and so the potential to make exciting additions to our portfolio, enabling us to unlock greater scale and efficiencies in asset management. By further extending our asset management capabilities across our portfolio we see an opportunity to create value both from existing properties and from recent acquisitions, as we work to ensure that our exacting management standards continue to result in high levels of tenant retention and ongoing demand for our space.

Ioannis Papalekas

Chief Executive Officer

18 September 2019

MANAGEMENT REVIEW

REAL ESTATE INVESTMENT ACTIVITY

In the first half of 2019, Globalworth completed the acquisition of two class "A" office investments in Warsaw and Krakow for a total of €169.9 million and announced the acquisition of a further two investments in regional cities in Poland for a total of €113.2 million, which were completed in July 2019.

The most significant transaction in H1-19 was the acquisition in Poland of one of Warsaw's most recognisable office towers, Warsaw Trade Tower ("WTT"), for a total consideration of €132.9 million. The 38-floor tower (plus two technical floors) is located in the Wola district of the Capital's extended CBD and, at 208 metres high, is one of the tallest towers in Warsaw, offering a total GLA of 46.8k sqm. WTT was completed in 1999 and its lobby and surrounding common areas were fully refurbished in 2016. WTT is occupied by c.40 national and international corporates, with AXA as the largest tenant alongside other well-known companies including MSD, American Express, Leroy-Merlin and Mattel. Since the acquisition, it is notable that we have agreed a lease renewal with the principal tenant, AXA, leading to the lease term being extended by 10 years (new expiration in 2030) for 11.9k sqm of GLA. This class "A" office tower has a high occupancy rate of 88.3%, with annual contracted rental income of €8.6 million and a weighted average lease length of 5.0 years as at 30 June 2019.

In March 2019, we completed the acquisition of the high-quality class "A" office complex known as Rondo Business Park ("Rondo") in Krakow, for a total consideration of €37.0 million. Rondo is located in the northern part of the city and comprises three buildings completed in two phases, in 2007 (two buildings) and 2008 (one building), offering total GLA of 20.3k sqm. This investment is strategically positioned adjacent to the Quattro Business Park, acquired by Globalworth Poland in 2018, creating critical mass and a combined campus of over 86.6k sqm of GLA. Rondo has a high occupancy rate (90.3%) and is leased to c.18 national and multinational corporates, with Capgemini, Deltavista and UPC being the largest tenants. It has an annual contracted rental income of €3.0 million and a weighted average lease length of 4.2 years as at 30 June 2019.

In addition, in April 2019 Globalworth announced the acquisition of two further investments in regional Polish cities for a combined transaction value of €113.2 million. The purchases of these high-quality properties, Retro Office House and Silesia Star, were finalised in July 2019.

Retro Office House, a newly completed class "A" office development in central Wroclaw, was acquired for a total consideration of €58.8 million. The property benefits from excellent connectivity to all parts of the city and a range of public transport options, and extends over six floors above ground, offering total GLA of 21.9k sqm. Retro is fully let to c.12 corporates, with Infor, Olympus and Intive being the largest tenants. At its acquisition date, the property had an annualised contracted rent of €3.9 million and a weighted average lease length of 4.8 years.

Silesia Star is an office complex at the heart of Katowice with two interconnecting buildings, developed in 2014 and 2016, and was acquired for a total consideration of €54.4 million. Located in the immediate vicinity of the city centre, it is close to two universities and various transport options. The complex extends over eight floors, offering total GLA of 29.2k sqm and an annualised contracted rent of €4.6 million at 95.1% occupancy, rising to €4.8 million and 100% occupancy as a result of a vendor guarantee on the existing vacant space. This complex is leased to a variety of tenants in the finance, technology and services sectors, with a WALL of 3.4 years as at its acquisition date.

Globalworth Industrial & New Deliveries

Building on the success of our logistics / light-industrial platform and given the ongoing attractive market backdrop, Globalworth has continued to invest in high-quality projects in Romania. In the first half of 2019 the Group:

·; Launched the Globalworth Industrial brand for its logistics / light-industrial portfolio;

·; Delivered the first facility within the Timisoara Industrial Park II complex; and

·; Formed a partnership with a leading construction and property management company in Romania for the development of new high-quality facilities in the country.

We are excited with the announcement of the rebranding of our logistics / light-industrial portfolio to Globalworth Industrial as part of our strategy to consolidate our position and further expand our presence in this fast-growing market segment. As part of this initiative, Timisoara Airport Park I & II ("TAP" & "TAP II") will be rebranded as Timisoara Industrial Park ("TIP") I & II and the logistics project developed for Groupe Renault (formerly Dacia Warehouse) to Pitesti Industrial Park, with all future logistics / light-industrial investments to feature under the Globalworth Industrial brand.

In April 2019, we delivered the first facility of 17.7k sqm at our new Timisoara Industrial Park II park. This is the first facility developed on the 30h land acquired in October 2017, which we have further enlarged with an additional 5 hectares in H1-19, and is located near to our very successful Timisoara Industrial Park I complex. TIP II is being developed in phases, designed to suit a variety of occupiers, and on completion will offer 173.3k sqm of high-quality space which, together with TIP I, will form one of the largest industrial hubs in Romania with c.277k sqm of high-quality logistics / light-industrial space. We are currently progressing planning and/or permitting for the development of the next phases of the project.

Globalworth has also formed a partnership with Global Vision, a leading construction and property management company in Romania, for the development of two new high-quality projects in the country. The first is a last-mile logistics park in the greater Bucharest area, Chitila Logistics Park, which on completion will offer 76.6k sqm of GLA over a 13.7h estate. Globalworth has a 50% interest in the project which will be developed in phases, with the first 23.9k sqm of logistics space scheduled for delivery in the first half of 2020. The location benefits from excellent accessibility, being positioned next to the Bucharest ring road which connects the project to the A1 and DN7 roads and the city's central districts.

The second project is the development of a major light industrial / logistics and commercial hub in Constanta (south-east Romania), also through a 50/50 joint venture with Global Vision. This marks Globalworth's first investment in Constanta, one of the largest metropolitan areas in Romania and a location we view as a relatively undeveloped real estate market, offering significant potential for future growth. The project, known as Constanta Business Park, will span a 100h land plot close to Constanta Port on Romania's East coast on the Black Sea, with easy access to the A2 and A4 motorways and the railway network. Constanta is Romania's primary port and one of the largest in Europe (top 20), located at the junction of key pan-European transport corridors and providing a strategic link to Central Asia, the Far East and Transcaucasia. The total project is to be developed in phases over the next five years and is expected to offer c.571k sqm of high-quality logistics / light-industrial (c.80%), office and other commercial space upon completion.

Review of Standing Portfolio

Our portfolio of standing properties continued to expand in H1-19 following the acquisition of two investments (four office properties) in Poland, and the completion of the first facility in the Timisoara Industrial Park II park in Romania.

As at 30 June 2019, there were 34 standing investments in our portfolio comprising a total of 57 standing properties in Poland and Romania. Our standing portfolio comprised 27 Class "A" office investments (43 properties in total) and three mixed-use investments (with seven properties in total) in central locations in Bucharest (Romania), Warsaw (Poland) and five of the largest office markets/cities of Poland (Krakow, Wroclaw, Katowice, Gdansk and Lodz). In addition, we own two light industrial parks with five facilities in Timisoara (Romania), a modern warehouse in Pitesti (Romania), and part of a residential complex in Bucharest (Romania).

Globalworth Combined Portfolio: Key Metrics

The total gross leasable area of Globalworth's combined standing commercial portfolio increased by 9.9% over the six months to 30 June 2019 to reach 1,103.9k sqm, with the overall combined standing portfolio GLA increasing 9.3% to 1,138.8k sqm. The increase in the size of our portfolio was mainly attributed to the 84.7k sqm of new additions (acquisitions and deliveries) and the re-measurement of certain of our properties (14.5k sqm), marginally offset by the sale of certain residential and retail units in our Upground residential complex.

The appraised value of our combined standing portfolio rose to €2.6 billion (as at 30 June 2019), representing an increase of 9.7% over the six-month period, with new additions (acquisitions and deliveries) accounting for 7.7% of the total increase, while the value of properties held throughout the period (like-for-like) increased by 2.2% in H1-19 compared to 31 December 2018.

Consistent with its commitment to energy efficient properties, Globalworth added three environmentally certified properties to its portfolio in the first half of 2019.

We are very pleased that the two class "A" offices developed and delivered by Globalworth in 2018, Globalworth Campus Tower 2 and Renault Bucharest Connected ("RBC"), were both awarded with BREEAM Excellent certifications in 2019, with RBC receiving a second green certification from EDGE. In addition, the recently acquired WTT and Retro Office House (July 2019) are certified with BREEAM Very Good accreditations.

Overall, as at 30 June 2019 our combined standing portfolio comprised 35 green certified properties, accounting for 78.2% of our standing commercial portfolio. 40.7% of our green certified portfolio by value is BREEAM Excellent, followed by 33.7% with BREEAM Very Good, the remainder of properties being LEED Gold or Platinum.

In addition, we are targeting that 100% of our portfolio should be green accredited and we are currently in the process of certifying or recertifying 22 other properties in our portfolio with BREEAM and/or EDGE certifications.

We consider our portfolio to be modern with 37 of our standing properties, accounting for 66.3% of our GLA and 69.2% of our standing combined portfolio value, having been delivered or significantly refurbished in or after 2014.

Review of Projects Under Construction

Globalworth's active development programme in Romania includes two high-quality office projects on which we made significant construction progress in H1-19.

At our Globalworth Campus development, construction of Tower 3 (centre tower) is well underway. The third tower, which represents the second and final phase of the project, will on completion offer 35.5k sqm of Class "A" office space (c.93%) and other amenities such as a 750-seat conference centre, as well as c.500 parking spaces. The new building will extend over 14 floors above ground and two underground levels and is expected to be completed in Q4-2019. As at 30 June 2019, construction was in progress with the shell of the building completed and the façade fitting and installations underway. During H1-19, leases were signed for 56.3% (63.1% including options) of the commercial space, and active discussions are underway for the remainder.

Globalworth Square is the second class "A" office under construction in the New CBD of Bucharest. The property is located between our own Globalworth Plaza and Green Court B offices, and on completion (Q2/3-2020) will offer 28.4k sqm of high-quality GLA and 450 parking spaces over 15 floors above ground and three underground levels. As at 30 June 2019, infrastructure works and construction of the underground levels are in progress.

Review of Other Future Developments

Globalworth owns, directly or through JV partnerships, land plots in prime locations in Bucharest and other regional cities in Romania, covering a total land surface of 1.5 million sqm (comprising 2.4% of its combined GAV), for future developments of office, logistics / light-industrial or mixed-use properties.

We are currently progressing with the required preparatory activities, including performing planning and/or permitting for this land bank and have prioritised the office projects in Bucharest, future phases of Timisoara Industrial Park II and the first phases of Chitila Logistics Park and Constanta Business Park. In H1-19, we added an additional 5h to the TIP II land plot, enhancing the potential scale of the project by 33.5k sqm of GLA. When fully developed, these projects offer the potential to add in total a further 907.7k sqm (mainly office and logistics / light-industrial) to our combined standing portfolio footprint in Romania.

ASSET MANAGEMENT INITIATIVES

Leasing Review

Globalworth maintained strong leasing momentum in 2019 as a result of proactive internal leasing team efforts and healthy demand for high-quality office space in its target real estate markets.

In the first six months of 2019, the Group successfully negotiated the take-up (including expansions) or extension of 101.2k sqm of commercial space in Romania (50.2% of transacted GLA) and Poland (49.8% of transacted GLA), with an average WALL of 7.3 years.

New leases for 43.4k sqm were signed at a WALL of 8.1 years, accounting for 82.4% of total take-up, and included tenants such as Allianz, UniCredit and NDB Logistica Romania as well as 37 other corporates. Leases were renewed, and thus extended, for 65 of our tenants for a total of 48.5k sqm of GLA, at a WALL of 6.8 years, with the most notable extensions involving AXA, International Paper, Schneider Electric, and Airbus Defence. The remaining 9.3k sqm of space signed in the period related to expansion by 31 tenants, with an average WALL of 5.5 years.

Overall occupancy of our combined standing commercial portfolio as at 30 June 2019 was 93.9% (94.8% including tenant options), representing a 1.3% decrease over the past six months (95.1% as at 31 December 2018 / 96.3% including tenant options).

The overall occupancy level was weighed down by new additions (acquisitions and deliveries) to the standing portfolio during the period, where occupancy rates were lower than the Group average but where we are confident there is near-term scope for further upside in both occupancy and contracted rents.

On a like-for-like basis, occupancy marginally decreased by 0.5% to 94.7% over H1-19, negatively impacted by the movements of certain tenants in our Romanian portfolio and the partial repositioning of a mixed-use property in Poland. Space becoming available during the period marginally exceeded new uptake, resulting in negative net uptake of 3.6k sqm.

Across the portfolio, as at 30 June 2019, we had 1,055.4k sqm of commercial GLA (c.98.2% standing GLA) leased to approximately 685 tenants, at an average WALL of 4.9 years (4.8 years on standing GLA) , the majority of which is let to national and multinational corporates that are well-known within their respective markets.

The Group's rent roll across its combined portfolio is well diversified, with the largest tenant accounting for 5.7% of contracted rents, while the top three tenants account for 11.8% and the top 10 account for 28.2%. We expect this diversity to grow further as the portfolio continues to expand.

Romania

Like-for-like occupancy in our Romanian combined standing commercial portfolio was 93.9% as at 30 June 2019, decreasing by 1.1% from 94.9% as at 31 December 2018.

In the first half of the year, occupancy remained stable across the majority of our properties. Improvements in occupancy in our Gara Herastrau (+17.9%) and Globalworth Campus T2 properties (+5.0%) were, however, offset by decreases in occupancy in BOB (-31.5%) due to the relocation of Stefanini to Globalworth Campus, resulting in the subsequent cancellation of its contract in the BOB property, and in Globalworth Plaza (-9.6%) where Bayer released its space. At Globalworth Campus T1, Amazon's short-term lease (2.2k sqm) expired in Q1-2019, but occupancy was maintained by the take-up of the space by a new tenant, Star Storage. At TCI, the decision of the Ministry of European Funds to vacate the remaining space it occupied (4.6k sqm) only marginally impacted occupancy, as 85% of the space (3.9k sqm) was taken by another tenant. These events, combined with the addition of the first facility at Timisoara Industrial Park II, which is at the lease-up stage was 66.5% let, resulted in an overall occupancy rate of our standing commercial portfolio in Romania of 93.1% (94.8% incl. tenant options) as at 30 June 2019.

Globalworth Campus Tower 3, which is due for completion at the end of 2019, saw strong leasing progress with 56.3% (70.1% including tenant options) of the commercial space in the property being leased (or under option) to Allianz and UniCredit Services, with a WALL of 10 years.

Poland

In Poland, like-for-like occupancy marginally improved to 95.8% as at 30 June 2019 from 95.4% as at 31 December 2018. The acquisitions of the Rondo Business Park (90.3% occupancy) and Warsaw Trade Tower (88.3% occupancy), however, resulted in the overall occupancy rate of our Polish portfolio decreasing to 94.9% as at 30 June 2019.

In the first half of 2019 we signed a number of notable leases in the Polish market, including a 11.9k sqm extension / expansion by AXA in WTT for a +10 year period to 2030, a 7.9k sqm extension by International Paper in CB Lubicz to 2026 and a 2.5k sqm (extension and expansion) by Westwing in Spektrum Tower to 2027, demonstrating the appeal of our properties and our asset management capabilities and giving us confidence that we will be able to further improve the performance of our portfolio.

Skylight & Lumen, the properties acquired by the Group in December 2018, reached 90.5% occupancy as at 30 June 2019 (+1.8% compared to 31 December 2018). We are pleased that several new leases and renewals of existing contracts were concluded in the first half of 2019 for the two properties, including F-Secure and Cromwell Poland, which have added to Skylight's list of tenants of 48 corporates. The Embassy of the United Arab Emirates, the Academy of New York, CIMA, Mezzanine Management and Velvet Care all extended their agreements in the building. In the neighbouring Lumen office, FMC Agro has occupied 0.5k sqm for a five-year period and Solidex extended its stay in the property for an additional three years.

In Spektrum Tower, occupancy improved by 1.1% to 97.9% as at 30 June 2019, mainly due to the extension and expansion of Westwing, the largest online shopping club in Poland offering furniture and home accessories, which added 1.0k sqm, increasing its occupancy to 2.5k sqm in total.

Other notable changes in occupancy were achieved at Supersam and Warta, marking improvements of 3.3% and 1.4% to 94.6% and 93.7% respectively as at 30 June 2019. Occupancy in Renoma fell by 3.6% to 88.4% in the first half of the year linked to preparations for a partial repositioning of the property. Overall in Poland, c.79% of the GLA signed in H1-19 involved lease extensions with the remaining 21% being split between expansions and new leases.

Operation, Renovation and Upgrade Programme of Standing Properties

Offering best-in-class real estate space to our business partners is a key component of our strategy at Globalworth.

We continued to implement this strategy in the first half of 2019, focusing on a more hands-on approach to the management and operation of our properties, as well as to our renovation and upgrade programme at selected properties in the portfolio.

Internalising the property management of our portfolio is a prime area of focus for the Group and we continue to build up our in-house capabilities with a team of professionals which, at the end of June 2019, had reached 214 members. We are pleased to now be in a position to be able to internally manage almost all of our office properties in Romania and c.60% of our properties in Poland, accounting for 76.9% of the total standing commercial portfolio by value (80.9% of office and mixed-use standing properties) as at 30 June 2019, and we actively continue to increase this.

Much of our focus is on creating and enhancing the "community" aspect of our portfolio, and includes the roll-out of engagement initiatives with those who work and operate in our properties, such as our Globalworth District Art, Fashion and Technology events in Romania, and the recent "Meet Globalworth" initiatives at our latest acquisitions in Poland. Other initiatives, tying into our sustainability objectives, have included a new partnership with FLOW, the Romanian ridesharing company, to give employees working in Globalworth buildings in Bucharest easy access to eco transportation using electric scooters.

Our investment in improvement works on selected properties was focused predominantly on 11 standing properties in our portfolio, with minor works performed on a number of others. In total, €5.0 million was invested under our renovation and upgrade programme with works involving primarily the upgrade of both indoor and outdoor common areas.

We are also in the process of examining alternative scenarios for certain properties in our portfolio, for example, Warta Tower in Warsaw, which will enable us to maintain and extend their useful life in the medium to long term. We are currently progressing with the partial repositioning / reclassification of certain uses / floors in Renoma in Wroclaw where we aim to increase the office component on the upper floors of the property, the development of additional leasable area at CB Lubicz in Krakow, increasing the GLA by an additional 2.0k sqm, and the extension of the parking, as well as the refurbishment of the lobby at Globalworth Tower in Bucharest.

OTHER INVESTMENTS / INITIATIVES

Investment in Technology Funds and Other Technology Initiatives

As part of an effort to promote technological innovation, underpinned by our belief in the impact that technology can have on real estate for both tenants and investors alike, Globalworth invests directly or indirectly in selected opportunities and initiatives, including technology-related venture capital funds.

Following its €2.0 million commitment in 2018 to Early Games Venture, a venture capital fund co-funded by the European Regional Development Fund focused on innovative companies in Romania and funded through the Competitiveness Operational Program (2014-2020), in H1-19 Globalworth made a €2.4 million commitment to GapMinder Venture Partners ("GapMinder").

GapMinder is a venture capital fund investing in IT Software and Services start-ups in Romania and Central Eastern Europe and on disruptive projects with regional, European and global ambitions. The scope of the fund encompasses verticals in IT including Machine Learning, Artificial Intelligence, Advanced Analytics, Predictive Marketing, and Digital Transformation.

GapMinder won the European Investment Fund bid to build the Competitiveness Fund of Funds and implement the Entrepreneurship Accelerator and Seed Fund Financial Instrument in Romania.

Other initiatives include participation in the Techcelerator in Bucharest, where Globalworth, GapMinder and certain others are targeting investment of up to €1 million in Romanian technology companies.

The Group is also exploring the potential to make additional technology-related investments in the future, either in general technology funds or ventures focusing on real estate solutions in the domain of smart buildings / smart city, mobility and energy, property automation and real estate software.

The Globalworth App

We have continued to make progress with the development of the Globalworth App, through which we aim to make our portfolio "smarter", allowing more interactive engagement and operation between the people working in or visiting our buildings.

The Globalworth App will be the gateway which will allow us to further enhance our vision of building communities. Among its functions, the App will allow news sharing related to our properties, the portfolio, and events held in the Globalworth District. It will improve the experience of those working and visiting our properties by allowing access, indoor navigation, the ability to control the working environment, and improved efficiency. At the same time, the Globalworth App will enable us as the landlord to better monitor the performance and operation of our portfolio and interact with people working in or visiting our properties.

The Globalworth App is currently at a development stage and we plan to implement it in phases, rolling it out to a selection of our buildings in the second half of 2019 and deploying it to the whole portfolio once testing is completed.

Globalworth Poland: Delisting Process

In April 2019, the Company announced its intention to acquire the outstanding shares in Globalworth Poland not owned by the Group, and consequently delist the entity from the Warsaw Stock Exchange, thus eliminating the minority interest, simplifying the Group structure and improving efficiencies.

In August 2019, we received a judgment rendered by the Enterprise Chamber of the Amsterdam Court of Appeals in the Netherlands enabling the Company to complete the mandatory squeeze out process for the 0.1% of shares not already owned by Globalworth, and as a result of this Globalworth Poland is expected to be delisted from the Warsaw Stock Exchange by year end.

FINANCIAL REVIEW

1. Highlights

Globalworth is pleased to report a significant uplift in its earnings and balance sheet metrics over the first half of 2019, reflecting the ongoing growth across its operations and further expansion of its platform.

1. See Glossary (pages 71-72) for definitions.

2. See note 12 of the unaudited condensed consolidated financial statements for calculation.

3. See note 20 of the unaudited condensed consolidated financial statements for calculation.

4. See page 16 for further details.

5. See note 22 of the unaudited condensed consolidated financial statements for calculation.

6. The H1-18 EPRA Earnings figure has been adjusted for comparability purposes, following consultation with EPRA subsequent to the publication of the H1-18 Interim Report.

2. Revenues and Profitability

Consolidated revenues of €103.8 million in H1-19 rose by 32.9% on H1-18 (€78.1 million), primarily as a result of a 35.2% increase in rental income to €71.8 million (H1-18: €53.3 million). The main drivers behind this increase were:

·; additional rental income of €18.0 million recognised in H1-19 versus H1-18 following the acquisition of standing properties in Poland after 1 January 2018, representing a 33.8% increase in rental income;

·; a 5.1%1 increase in underlying rental income derived from standing properties owned throughout both periods, following leasing activity and indexation (Romania +7.8%, Poland +1.5%1);

·; a 1.6% increase in rental income contributed from Globalworth Campus Tower 2 and the first facility at Timisoara Industrial Park II, developments in Romania that were completed in H1-18 and H1-19 respectively; and

·; an offsetting impact of €2.6 million to comparable rental income following the termination of certain master lease and NOI guarantee agreements in Poland that were settled in December 2018 for an immediate cash receipt of €21.5 million, equating to a -4.8% impact on H1-18 rental income.

As a result of acquisition activity in Poland, Group revenues were split 55% Poland / 45% Romania, compared to 45% Poland / 55% Romania in H1-18.

Net Operating Income rose to €68.0 million, a 31.5% increase over H1-18 (€51.7 million) and in line with the increase in Group revenue. The growth in NOI reflected an increase of €14.7 million in Poland and an additional €1.6 million in Romania. NOI was split 58% Poland / 42% Romania, compared to 48% Poland / 52% Romania in H1-18.

Adjusted EBITDA2 rose to €104.7 million, which includes the share of minority interests, an increase of 27.4% over H1-18 (€82.2 million), resulting from the increase of NOI (by €16.3 million) and also higher valuation gains on investment property (by €10.5 million) and lower acquisition costs (by €0.9 million), partly offset by net other income / other expense items (by €5.2 million).

Adjusted normalised EBITDA3 amounted to €61.6 million, which includes the share of minority interests, an increase of 46.0% over H1-18 (€42.2 million), resulting mainly from the increase of NOI (by €16.3 million) as well as the effect of non-recurring income in H1-18 (€3.0 million excluded from adjusted normalised EBITDA in H1-18) relating to the aforementioned master lease and NOI guarantees settled in December 2018.

Net finance costs stood at €20.9 million, a 9.7% increase over H1-18 (€19.1 million) reflecting the additional bond coupon following our second €550 million bond issue in March 2018 (35.1% higher than H1-18) and offset by lower debt issue amortisation costs and other finance expenses.

Joint ventures contributed €4.4m, a significant increase on H1-18 (€0.7 million) as a result of two new development project joint ventures in Constanta and Chitila, Bucharest. Following the completion of the Renault Bucharest Connected development, €1.4 million of rental income was recorded for Globalworth's share in H1-19 (H2-2018: €45,000). Our share of revaluation gains was €4.7 million.

Earnings before tax increased to €88.0 million, a rise of 37.7% over H1-18 (€64.0 million), mainly as a result of the increase in NOI, higher valuation gains and the increased share of profits from our joint ventures. The impact of minority interests of €6.0 million (H1-18: €6.6 million), determined by the weighted average shareholding in the period, was reduced due to the higher percentage of shares in Globalworth Poland owned by the Company, with minorities at the 30 June 2019 accounting for only 0.16%. EPRA earnings were €37.3 million, an increase of 38.0% over H1-18 (€27.0 million4).

IFRS earnings per share increased by 16.9% from 37.63 cents to 43.98 cents, following higher earnings before tax and also influenced by the increased deferred tax expense, as compared to H1-18 which resulted from the property acquisitions made subsequent to 30 June 2018 as well as from valuation gains reported during H1-19. EPRA Earnings per share followed the same trend and increased by 14.8% compared to H1-18, rising to 23.47 cents per share from 20.45 cents per share in H1-18. Both IFRS earnings per share and EPRA Earnings per share for H1-19 were influenced by the higher weighted average number of shares H1-19 (158.9 million) as compared to H1-18 (132.2 million) which resulted from the equity raise in April 2019.

1 The H1-18 rental income used for the comparative has been adjusted to exclude the effect of the income (€2.6 million) recognised as a result of the master lease and NOI guarantees on certain properties in Poland, which were settled in December 2018 and, therefore, such income was not received during H1-19.

2 Earnings before finance cost, tax, depreciation, amortisation of other non-current assets and purchase gain on acquisition of subsidiaries.

3 Adjusted EBITDA, less: fair value gains on investment property and financial instruments (H1-19: €50.6 million; H1-18: €40.2 million), non-recurring income (H1-19: €0.0 million; H1-18: €3.0 million), other income (H1-19: €0.6 million; H1-18: €0.2 million); plus: acquisition costs (H1-19: €0.0 million; H1-18: €0.9 million); plus: non-recurring administration and other expense items (H1-19: €8.1 million; H1-18: €2.5 million). The adjustments listed include the share of minority interests.

4 The H1-18 EPRA Earnings figure has been adjusted for comparability purposes, following consultation with EPRA subsequent to the publication of the H1-18 Interim Report.

3. Balance Sheet

The combined portfolio open market value grew by €282.5 million, an increase of 11.5%, to €2,745 million. This comprises €2,638 million of investment property held on our balance sheet as at 30 June 2019, and a further €107 million representing the 100% value of joint venture properties comprising the standing Renault Bucharest Connected property, and the land associated to the GW West, Chitila Logistics Park and Constanta Business Park projects.

Investment activity in H1-19, which included c.€204 million of new acquisitions and development projects as well as valuation gains of €49.7 million, contributed to a 10.4% increase in the balance sheet value of our investment property portfolio at 30 June 2019 to €2,638 million (31 December 2018: €2,389 million). Fair value gains of €49.7 million were split 48% Poland and 52% Romania, with standing properties held at 31 December 2018 recording €27.3 million gain to investment property, or +1.2% (+0.9% Poland, +1.5% Romania), with the balance derived from development projects, land and acquisitions.

Total assets as at 30 June 2019 amounted to c.€3,199 million and increased by 16.9% from 31 December 2018 (c.€2,737 million), primarily due to the expansion of the property portfolio and the increase in cash and cash equivalents following the equity raise in April 2019.

EPRA NAV Bridge from 31 December 2018 to 30 June 2019 (€ million)

* Others includes the costs associated with the change in the arrangements for the long-term incentive plan for the Group's Executives (cash payment of €25.8 million and transfer of 3.2 million shares), as well as other movements within equity.

EPRA NAV rose to €1,754.3 million as at 30 June 2019, an increase of 46.2% on 31 December 2018 (€1,200.2 million). EPRA NAV per share increased marginally to €9.05 per share (31 December 2018: €9.04 per share), given the increased number of shares in issue.

The main factors driving the change in EPRA NAV during H1-19 were:

·; the results for the period, including €49.7 million of fair value gains on properties in Romania (€25.7 million) and Poland (€24.0 million);

·; dividends of €35.8 million paid in January 2019;

·; acquisitions of minority interests for cash (c.€32 million) and through share exchanges with GWI shares (c.€179 million); and

·; the c.€348 million cash proceeds from the successful equity raise in April 2019.

Evolution of EPRA NAV/share and OMV by semester

4. Results and dividends

The results for the period are set out in the consolidated statement of comprehensive income on page 24.

In January 2019, the Company made an interim dividend distribution of 27 cents per share in respect of the six month period ended 31 December 2018. Post the period end, the Company declared and in August 2019 paid its first interim dividend in respect of the year ending 31 December 2019 of 30 cents per share.

5. Financing & Liquidity Review

Financing Activity in H1-19

We had an active first half in the capital markets, conducting a major equity issue and also various debt financing activities.

In April 2019, we raised €348 million of new equity at a price of €9.10 per share, a small premium to our December 2018 EPRA net asset value per share. This new capital has enabled us to continue on our strong growth trajectory with four acquisitions in Poland completed or announced in the first six months, while also enabling us to manage our loan to value ratio in line with our long-term target of less than 40%.

In addition to the capital raise, we issued €153 million of new shares in exchange for certain minority interests in our Polish subsidiary, GPRE. This was a key step as part of a series of transactions, using both newly issued Globalworth shares and cash, to buy-in the outstanding minority interests in GPRE, which simplifies our group structure and market positioning. This reduced the related minority interest recognised on the balance sheet from €212.4 million as at 31 December 2018, when Globalworth owned 69.7% of GPRE, to €1.2 million following the increase in shareholding to 99.8% as at 30 June 2019. As discussed in the Management Review section of the Interim Report, we are in the process of squeezing out the remaining minorities and de-listing GPRE from the Warsaw Stock Exchange, and we anticipate that this will be finalised before the end of 2019.

In the debt markets, we were pleased to see our credit rating is now recognised as investment grade by all the three major rating agencies that cover us, following upgrades by S&P and Moody's during the first half. We have a BBB- rating from S&P and Fitch, and a Baa3 rating from Moody's. This combined with the general market trend of tightening yields, resulted in a significant compression in the yield to maturity of our two outstanding bonds.

As part of the Group's continuous efforts to reduce its cost of financing, in June 2019 the loan facilities (€40.3 million), secured on its Hala Koszyki, Renoma and Supersam properties in Poland were repaid as was the outstanding amount of €2 million of the €30 million loan facility secured on its Timisoara Industrial Park (formerly TAP) complex in Romania. In April 2019, a c.€85 million outstanding loan balance was assumed upon the acquisition of the Warsaw Trade Tower in Poland, with partial prepayment subsequently made of c.€9.5 million. Negotiations over the remaining balance are ongoing with the financing bank to extend its term at a competitive interest rate. Additionally, the €65 million 10-year secured loan granted by Erste Bank AG was drawn down in March 2019.

Debt Summary

The total debt portfolio of the Group as at 30 June 2019 of €1.34 billion (31 December 2018: €1.26 billion) comprises predominately medium to long-term debt, denominated entirely in Euro.

Over the last few years, the Group has delivered on its strategy of extending the weighted average period to maturity of its debt financing, while reducing the applicable weighted average interest rate. The weighted average interest rate of 2.85% as at 30 June 2019 compares to 2.91% as at 31 December 2018, while the average period to maturity decreased slightly from 5.1 years to 4.9 years.

Servicing of Debt During 2019

During the first half of 2019, we repaid in total c.€52.7 million of loan capital and c.€35.2 million of accrued interest on the Group's drawn debt facilities, including c.€32.3 million in relation to the full annual coupon for both Eurobonds of the Company.

Liquidity & Loan to value ratio

The Group seeks to maintain sufficient liquidity at all times to enable it to finance its ongoing, planned property investments and the completion of properties under development, while maintaining the flexibility to react quickly to attractive new investment opportunities.

As at 30 June 2019, the Group had cash and cash equivalents of €396.3 million (31 December 2018: €229.5 million), an increase connected with the cash equity raise made in April 2019.

The Group's loan to value ratio as at 30 June 2019 was 36.5%, marking a significant decrease compared to 31 December 2018 (43.9%) as a result of the equity raise. This is consistent with the Group's strategy to manage its long-term target LTV of below 40%, whilst pursuing its strong growth profile.

Debt Structure as at 30 June 2019

Debt Structure - Secured vs. Unsecured Debt

As at 30 June 2019, 81.0% (31 December 2018: 87.3%) of the Group's debt, comprising its €1.1 billion in Eurobonds, is unsecured, with the remainder secured with real estate mortgages, pledges on shares, receivables and loan subordination agreements in favour of the financing parties.

The slight decrease in the percentage of the unsecured debt compared to 31 December 2018 was a result of the secured bank loan taken over on the acquisition of the Warsaw Trade Tower, partly offset by the prepayment of banks loans in Romania and Poland during the period, as outlined above.

Loans and borrowings maturity and short-term / long-term debt structure mix

The Group has credit facilities and Eurobonds with different maturities, 94.4% of which are long-term (99.9% as at 31 December 2018). The only short-term facility is currently under negotiation, with a long-term extension expected to be concluded before the end of the year.

Maturity by year of the principal balance outstanding at 30 June 2019 (€m)

Debt Denomination Currency and Interest Rate Risk

Our loan facilities are entirely Euro denominated and bear interest based at either one or three months Euribor plus a margin, or at a fixed interest rate. This ensures a natural hedging to the Euro, the currency in which the most significant part of our liquid assets (cash and cash equivalents and rental receivables) is originally denominated and the reporting currency for the fair market value of our investment property.

Debt Covenants

The Group's financial indebtedness is arranged with standard terms and financial covenants, the most notable as at 30 June 2019 being the following:

Unsecured Eurobonds

·; the Consolidated Coverage Ratio, with minimum value of 200%;

·; the Consolidated Leverage Ratio, with maximum value of 60%; and

·; the Consolidated Secured Leverage Ratio with a maximum value of 30%.

Secured Bank Loans

·; the debt service cover ratio, with values ranging from 110% to 120% (be it either historic or projected);

·; the interest cover ratio ('ICR'), with value of 350%, applicable to one secured loan facility (be it either historic or projected); and

·; the LTV ratio, with contractual values ranging from 48% to 83%.

There have been no breaches of the aforementioned covenants occurring during the six-month period ended 30 June 2019.

Further details on the Group's debt financing facilities are provided in note 13 of the unaudited condensed consolidated financial statements.

Cash flows

·; Cash flows from operating activities amounted to €19.6 million, compared to €11.1 million in H1-18, reflecting the expansion of the Group's operating activities following the acquisition of six additional standing office buildings in Poland since 30 June 2018, but impacted by the annual Bond coupon payments, which were higher in H1-19 following the payment of the first annual coupon on the second €550 million Bond, issued at the end of March 2018.

·; Net proceeds from the successful equity financing in April 2019 of €337.8 million, with c.€110 million subsequently used to finance the acquisition of an additional two properties in Poland in July 2019 (Silesia Star and Retro Office House).

·; Cash used for investments made in H1-19 of €120.6 million, including the acquisition of two standing properties in Poland (Rondo Business Park and Warsaw Trade Tower), the further advancing of the construction of properties under development in Romania, and the acquisition of additional land for development in Romania.

·; Dividends paid in H1-19 of €35.8 million in respect of the six-month period ended 31 December 2018, compared to €31.4 million in H1-18 in respect of the six-month period ended 31 December 2017.

·; Cash and cash equivalents as at 30 June 2019 stood at €396.3 million, compared to €229.5 million at 31 December 2018.

6. Principal Risks and Uncertainties

The key risks which may have a material impact on the Group's performance, together with the corresponding mitigating actions, are presented on pages 75 to 78 of the Annual Report for the year ended 31 December 2018, which is available at www.globalworth.com.

These risks comprise the following:

·; Exposure to the economic environment in Romania and Poland and changes in the political or regulatory framework in Romania, Poland or the European Union;

·; Inability to execute planned acquisition of properties and lack of available financing;

·; Counterparty credit risk;

·; Risk of changes in interest rates and exchange rates;

·; Risk of negative changes in the valuation of the portfolio;

·; Inability to lease space and renew expiring leases;

·; Inability to complete projects under development on time;

·; Risk of breach of loan covenants;

·; Risk of change in fiscal and tax regulations; and

·; Compliance with fire, structural or other health and safety regulations.

There has been no significant change in these risks during the six months period ended 30 June 2019, and these risks are expected to continue to remain relevant during the second half of 2019.

7. Going Concern

The Directors have considered the Company's ability to continue to operate as a going concern based on the Management's cash flow projections for the 12 months subsequent to the date of approval of the unaudited interim condensed consolidated financial statements. The Directors believe that the Company would have sufficient cash resources to meet its obligations as they fall due and continue to adopt the going concern basis in preparing the unaudited interim condensed consolidated financial statements as of and for the six months ended 30 June 2019.

GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2019

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2019

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

These condensed consolidated financial statements were approved by the Board of Directors on 18 September 2019 and were signed on its behalf by:

Geoff Miller

Director

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2019

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2019

* Cash and cash equivalents at 30 June 2019 include € nil restricted cash reserve (30 June 2018: €2.3 million).

SECTION I: BASIS OF PREPARATION

1. Basis of Preparation

Corporate Information

Globalworth Real Estate Investments Limited ('the Company' or 'Globalworth') is a company with liability limited by shares and incorporated in Guernsey on 14 February 2013, with registered number 56250. The registered office of the Company is at Ground Floor, Dorey Court, admiral Park, St Peter Port, Guernsey GY1 2HT, Globalworth, being a real estate Company, has had its ordinary shares admitted to trading on AIM (alternative Investment Market of the London Stock Exchange) under the ticker "GWI" since 2013. The Company's Eurobonds have been admitted to trading on the official List of the Irish Stock Exchange and the Bucharest Stock Exchange since 2017.

Directors

The Directors of the Company are:

• Ioannis Papalekas, Chief Executive Officer

• Dimitris Raptis, Deputy Chief Executive Officer and Chief Investment Officer

• Geoff Miller, Non-executive, Chairman of the Board and member of the Risk Committee

• Eli Alroy, Non-executive, Chairman of Investment Committee and Senior Independent Director

• John Whittle, Non-executive, Chairman of the Audit Committee and member of the Risk Committee

• Peter Fechter, Non-executive, member of the Remuneration Committee

• Andreea Petreanu, Non-executive, member of the Audit Committee and Chair of the Risk Committee

• Richard van Vliet Non-executive, member of the Audit Committee and Risk Committee

• Norbert Sasse, Non-executive

• George Muchanya, Non-executive

• Bruce Buck, Non-executive, Chairman of the Remuneration Committee

On 11 March 2019 and 13 May 2019, Alexis Atteslis and Akbar Rafiq, Non-executive Directors, stepped down from the Board of Directors of the Company, respectively.

Basis of Preparation and Compliance

The condensed consolidated financial statements of the Group (or 'financial statements' or 'consolidated financial statements') as of and for the six-month period ended 30 June 2019 have been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting". These consolidated financial statements are prepared in Euro ("EUR" or "€"), rounded to the nearest thousand, being the functional currency and presentation currency of the Company. These financial statements have been prepared on a historical cost basis, except for investment property freehold and leasehold, financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income which are measured at fair value. The significant accounting policies adopted are set out in the relevant notes to the financial statements and consistently applied throughout the periods presented except for the new and amended IFRSs, which were adopted on 1 January 2019 (see note 29 for more details).

The financial statements are prepared on a going concern basis as explained the financial review section of the Interim Report.

Accounting policies

These condensed consolidated financial statements apply the same accounting policies, presentation and methods of calculation as those followed in the preparation of the Group's consolidated financial statements for the year ended 31 December 2018, except for the adoption of IFRS 16, which were prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and the Companies (Guernsey) Law 2008, as amended. The condensed consolidated financial statements included in this Interim Report should be read in conjunction with the consolidated financial statements for the year ended 31 December 2018. On 1 January 2019, the Group adopted certain new accounting policies where necessary to comply with amendments to IFRS. IFRS 16 "Leases" had a significant impact on the consolidated financial statements of the Group as disclosed below.

IFRS 16 leases and impact on the consolidated financial statements

IFRS 16 supersedes IAS 17 Leases and related interpretations and is effective for periods beginning on or after 1 January 2019. The new standard brings most leases on-balance sheet under a single model, eliminating the distinction in the accounting treatment between operating and finance leases. Lessor accounting however remains largely unchanged and the distinction between operating and finance leases is retained for the lessor.

The impact on the financial statements following the adoption of IFRS 16 is disclosed in note 5 (Group as lessee) and note 7 (Group as lessor).

Basis of Consolidation

These condensed consolidated financial statements comprise the financial statements of the Company and its subsidiaries ('the Group') as of and for the six-month period ended 30 June 2019. Subsidiaries are fully consolidated (refer to note 25) from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the period from the date of obtaining control to 30 June, using consistent accounting policies. All intra-group balances, transactions and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the income statement and within equity in the consolidated statement of financial position, separately from net assets and profit and loss attributable to equity holders of the Company.

2. Critical Accounting Judgements, Estimates and Assumptions

The preparation of consolidated financial statements in conformity with IFRS requires management to make certain judgements, estimates and assumptions that affect reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures and the disclosures of contingent liabilities.

Selection of Functional Currency

The Company and its subsidiaries used their judgment, based on the criteria outlined in IAS 21 "The Effects of Changes in Foreign Exchanges Rates", and determined that the functional currency of all the entities is the EUR.

The preparation of financial statements in conformity with IAS 34 requires management to make certain judgements, estimates and assumptions that effect reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures and the disclosures of contingent liabilities. 

Further additional critical accounting judgements, estimates and assumptions are disclosed in the following notes to the financial statements.

§ Investment Property - freehold, see note 3 and Fair value measurement and related estimates and judgements, see note 4;

§ Investment Property - leasehold, see note 5

§ Commitments (operating leases commitments - Group as lessor), see note 6;

§ Taxation, see note 11;

§ Financial assets at fair value through profit or loss, see note 14;

§ Subsidiaries' acquisitions, see note 23;

§ Investment in Joint ventures, see note 24; and

§ Investment in Subsidiaries, see note 25.

SECTION II: INVESTMENT PROPERTY

3. Investment Property - freehold

3.1 Other operating lease commitment

Other operating lease commitment of €2.14 million (2018: €1.93 million) as of 30 June 2019 (a similar corresponding amount was recorded in trade and other payables as payables for tenant lease incentives) represents the Group's estimated net cost for undertaking existing operating leases in properties owned by third parties, as well as for the commitment to undertake additional operating lease expense, under certain conditions, related to one of the Group's tenants. The net cost is estimated by deducting from the operating lease expenses the revenues from sub-letting the respective properties to third parties selected by the Group, for the unexpired portion of their leases.

4. Fair Value Measurement and Related Estimates and Judgements

Investment Property Measured at Fair Value

The Group's investment property portfolio for Romania was valued by Colliers Valuation and Advisory SRL, and Cushman & Wakefield LLP and for Poland by Knight Frank Sp. z o.o. and CBRE Sp. z o.o. All independent professionally qualified valuers hold a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued using recognised valuation techniques.

Our Property Valuation Approach and Process

The Group reviews the valuations performed by the independent valuers for financial reporting purposes. For each independent valuation performed, The Group's investment team along with the finance team:

§ verifies all major inputs to the independent valuation report;

§ assesses property valuation movements when compared to the initial valuation report at acquisition or latest period end valuation report; and

§ holds discussions with the independent valuer.

Valuation Techniques, Key Inputs and Underlying Management's Estimations and Assumptions

Valuation techniques comprise the discounted cash flows, the sales comparison approach and the residual value method.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period, are described below. The Group has based its assumptions and estimates on the parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market movements or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Key information about fair value measurements, valuation technique and significant unobservable inputs (Level 3) used in arriving at the fair value under IFRS 13 are disclosed below:

Sensitivity Analysis on Significant Inputs

The assumptions on which the property valuations have been based include, but are not limited to, rental value per sqm per month, discount rate, exit yield, cost to complete, comparable market transactions for land bank for further development, tenant profile for the rented properties, and the present condition of the properties. These assumptions are market standard and in line with the International Valuation Standards ('IVS'). Generally, a change in the assumption made for the rental value (per sqm per month) is accompanied by a similar change in the rent growth per annum and discount rate (and exit yield) and an opposite change in the other inputs.

A quantitative sensitivity analysis, in isolation, of the most sensitive inputs used in the independent valuations performed, as of the statement of financial position date, are set out below: