Response to Hellenic Capital Markets Commission Letter

 LAMDA Development S.A. (the Company or the Group), in response to the Hellenic Capital Markets Commission letter, with protocol 2313/27.10.2020 (which was notified to the Company on 29.10.2020) regarding the necessary disclosures in connection to the COVID-19 pandemic and its impact on the Company’s semi-annual financial statements, as per the provisions of par.6 Article 5 of Law 3556/2007 and the relevant recommendations of the Public Statement of ESMA (20/5/2020 ESMA 32-63-972) according to which the semi-annual financial statements have to include detailed – from a qualitative and quantitative perspective as appropriate - information on:

a) the impact of the pandemic on the operations of the Company
b) the measures taken to mitigate the impact of the pandemic
c) the assessment of the impact of the pandemic in the future

the Company re-announces and/or restates information that has been already published on 22.09.2020 and has been included in the Company’s semi-annual financial report for the period ended 30.6.2020 both in the chapter "PROSPECTS" of the Board of Directors’ Report and in note 2.1 "BASIS OF PREPARATION".

Following the government's measures, the operation of the Group’s three Shopping Centers was suspended from 13.03.2020 to 17.05.2020. In addition, according to the Legislative Content Act (GG A’ 68), which was ratified with the article 1 of Law 4683/2020 (GG A’ 83), the associate shopkeepers / tenants were exempted from the obligation to pay the 40% of the total rent for the months of March, April, May and June 2020. In addition, and beyond the existing provisions, the Group has decided to provide an additional discount of 30%, thus a total discount of 70%, on the initial contracted rent only for April and May 2020.

Moreover, the Group has completely lost the revenues from the relevant car park operations, the advertising income as well as the turnover rent for the period from 13.03.2020 to 17.05.2020 (since shopping centers were closed during that period).

Subsequently, the Group as a lessee of the shopping center Mediterranean Cosmos in Pylaia Thessaloniki and following the abovementioned provisions of the previously mentioned Legislative Content Act, has received a reduction in the fixed portion of the payable rent for the period March - June 2020, amounting to €480k.

The outcome of the abovementioned legislative acts along with the Group's decision to provide additional discount of 30% to tenants has been fully depicted in the financial results of the Group for the period from 01.01.2020 to 30.06.2020.

Specifically, during the respective period, the Group’s Shopping Centers total EBITDA declined by €12.5m. However, taking into account the effect of the non-controlling interests and the income tax, the impact on the Group’s Net Asset Value (NAV) amounted to approximately €7.9m.
Apart from the implemented measures as mentioned above, the Management of the Company has carried out all necessary analyses in order to confirm its cash adequacy both at Company and Group level. The Group's cash flow is sufficient to ensure that its contingent obligations are met. In addition, according to the analysis, it is forecast that the main financial covenants of the Group's loans will continue to be satisfied.

Note that, on July 24, 2020, the Company repaid the total outstanding principal amounting to €81.1m and all corresponding interest, as this obligation was directly linked to the issuance of a €320m Corporate Bond through a public offering and subsequent listing for trading in the Organized Market category on the Athens Exchange.

The Group carefully monitors the events regarding the spread of coronavirus COVID-19. Until today, the Group has taken precautious measures for the safety of its employees as well as it has acted immediately in compliance with obligations as imposed each time by the official competent authorities.

The expected economic slowdown of the Greek economy in 2020, the corresponding increase in unemployment, the declining disposable income and/or any potential significant decline in visitors traffic in shopping centres, as a result of the intention to avoid overcrowding places, the adoption of social distancing measures and/or any future prolonged cease of the shopping centres’ operation, due to a next wave of the COVID-19 pandemic, may result in revenue decrease for the shopping centres.

In particular, as also mentioned in the semi-annual financial report, the total impact of COVID-19 pandemic on the Group's financial results and profitability in the second half of the year cannot be assessed with reasonable certainty at this stage, since the phenomenon is underway. Especially for the second half of the year, the government has extended the rent concessions – by 40% – for the months of July and August to certain retail sectors, mainly in the Food & Beverage and cultural units. The monthly impact of rent concessions from the specific reductions on the Group's revenue is approximately €250k. After subtracting the tax effect and minority interests, the aforementioned monthly impact amounts to approximately €160k.

Finally, according to the independent qualified valuers, given the uncertainty deriving from the evolution of COVID-19 pandemic and the potential future impact on the real estate market in both our country and internationally and due to lack of sufficient comparable figures, there are conditions of “substantial valuation uncertainty” as defined by the International Valuation Standards. That said, real estate values are going through a period during which they are monitored with a high degree of attention.