by Country 2016 - Sonae Sierra

creatinG SHareD Valuefor our buSineSS anD Society

SuStainabilityPerformanceby Country

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2016

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sSONAE SIERRA 2016 Sustainability Performance by Country

about tHiS rePort

Sonae Sierra is an international retail real estate company dedicated to serving the needs of investors. We develop and invest insustainable retail assets and provide investment, development and property management services for clients in geographies as diverseas europe, South america, north africa and asia, while creating shared value for our business and society.

We have long recognised that the long term viability of our business is dependent upon a healthy reserve of natural resources, socialcooperation and financial capital. Indeed, we believe that the economic, environmental and social dimensions of our business performanceare inextricably linked.

Our business model is underpinned by our business and sustainability strategies that aim to deliver sustainable financial returns in the short,medium and long term, while creating shared value for society and the environment. We therefore take an integrated approach to settingour strategy and assessing our business performance, which is reflected in our reporting and communications.

This report provides a summary of our sustainability performance across Portugal, Brazil, Germany, Italy, Romania and Spain. It offers anoverview of our key activities and operational performance indicators; awards, certifications and achievements and a summary of ourenvironmental and social performance. It complements our comprehensive 2016 Economic, Environmental and Social Report (available onour website) which provides a fully integrated account of our business strategy and operational performance through the calendar year anddraws heavily on the International Integrated Reporting Council’s (IIRC) Framework, the Global Reporting Initiative (GRI) G4 SustainabilityReporting Guidelines and the Construction and Real Estate Sector Disclosures (CRESD).

about this report 01

Sonae Sierra in Portugal 02

Sonae Sierra in brazil 05

Sonae Sierra in Germany 08

Sonae Sierra in italy 10

Sonae Sierra in romania 12

Sonae Sierra in Spain 14

le terrazze, Italy Hofgarten Solingen, Germany

http://www.sonaesierra.com/publicdocs/reports2016/2016_EES_Report.pdf

We are the market leader in Portugal, the country where we wereincorporated in 1989 and where our headquarters are. As of 31 December 2016, we owned 21 shopping centres across the country.

2016 was a very good year for Sonae Sierra in Portugal.A combination of our skilful property management approach andthe improvement in economic conditions in the country enabled usto deliver sales and rental growth. Indeed, like-for-like retail salesacross our owned portfolio grew by 4%, outperforming the EurostatRetail Sales index. Rental income at owned shopping centresincreased by 4.1% on a like-for-like basis, and we increased theaverage occupancy rate to 98.5%.

Furthermore, increased investor interest in Portugal drove pricesup and capitalisation rates down, resulting in a notable increase inour portfolio’s valuation during the second half of the year. Thefavourable investment market conditions also enabled us to pursueour capital recycling strategy with success. Firstly, we sold a 25%stake in the Sierra Portugal Fund, allowing us to reduce our interestin the Fund to 22.5%, while retaining management services for thefund and its assets. Secondly, we sold two Portuguese shoppingcentres in the Sierra Fund, AlgarveShopping and Estação VianaShopping (along with one shopping centre in Spain) to Iberia Coop,a joint venture fund created with CBRE Global Investment Partners,in which Sonae Sierra has a 10% interest and is responsible for fundand property management.

Having seen investor interest return to the Iberian market it is all the more important for us to maximise value creation from our investment portfolio as we prepare for possible future sales. Inthis context, we proceeded with our renovation programme inPortugal, focusing in particular on refurbishing those shoppingcentres which have been in operation for many years withoutsignificant changes to their interior design. By the end of the year we reached the final stages of refurbishments at Centro Vasco da Gama and LoureShopping, and major renovation workswere underway at CascaiShopping (all in the Greater Lisbon area).

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Sonae Sierra in PortuGal

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sIII SONAE SIERRA 2016 Sustainability Performance by Country

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Azores Islands Madeira Island

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1: 8ª Avenida2: AlbufeiraShopping3: AlgarveShopping4: ArrábidaShopping5: CascaiShopping6: C.C. Continente de Portimão7: Centro Colombo8: Centro Vasco da Gama9: CoimbraShopping10: Estação Viana Shopping11: GaiaShopping12: GuimarãeShopping13: LeiriaShopping14: LoureShopping15: MadeiraShopping16: MaiaShopping17: NorteShopping18: Parque Atlântico19: RioSul Shopping20: SerraShopping21: ViaCatarina Shopping

New Projects7: Centro Colombo – Expansion7: Colombo Tower17: NorteShopping – Expansion

1 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Portugal. It has been calculated based on accountperformance between 1 January and 31 December 2016.

2 ‘Bright’ and ‘Dive’ are innovative energy and water efficiency modelling tools which enable us to calculate the optimised theoretical energy and water consumption of ashopping centre, and then compare this with its actual usage making it possible to easily detect and remedy any inefficiencies.

Small expansions were also in progress at AlgarveShoppingand Centro Vasco da Gama. Both are expected to becompleted before summer 2017, and we were in the processof obtaining licenses for more significant expansions atNorteShopping and Centro Colombo.

In keeping with our focus on exceptional customer experienceand shared value creation, we continued to pioneer new retailformats, leverage advancements in digital technology andsupport local entrepreneurs. Uniquely in Portugal, we launched‘What’s On’, a live guide broadcasting the latest news andevents taking place inside our shopping centres, and this ledto double digit growth in our shopping centres’ website traffic.We also opened three Coop Stores which support independentlocal businesses. Last but not least, we awarded contracts tofive new very promising retail concepts through our ‘RisingStore’ initiative, a crowd-sourcing retail contest for start-ups,out of which four have exceeded our expectations in terms ofsales. The initiative has also generated an AdvertisingEquivalent Value in excess of €120,000 from media coverage.

In keeping with our focus on safe people and eco-efficiency,we improved the electricity efficiency of our owned portfolioby 3%, the water efficiency by 2%, and decreased theproportion of waste sent to landfill (by weight) by 13%.Furthermore, we implemented 88% of the recommendationsidentified as part of our ‘Bright Project’2 energy efficiencyinitiative, and 79% of the water efficiency measures identifiedthrough our ‘Dive Project’2. The measures identified by theseinitiatives offer combined potential savings of €1.578 milliona year. Other highlights include the 43% reduction in the LostWorkday Case Accident Frequency Rate (LWCAFR) among ourshopping centre service suppliers following our investigationsto identify the root causes of incidents and implementpreventive measures.

Direct emPloyeeS SHoPPinG centreS oWneD

ViSitS to all SHoPPinG centreS unDer manaGement

rentS receiVeD at oWneDSHoPPinG centreS1

oPerational coStS DeVeloPment ProjectS

total: 446

total Gla:810,738m2

(21 centres)

184.2m €188.7m

€70.5m3 projects underdevelopment with atotal Gla of 52,000m2

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aWarDS anD acKnoWleDGementSl Centro Colombo received a Silver Award in Customer Services

from the 2016 ICSC Solal Marketing Awards for its Baby Care Room.

l The Sierra Portugal Fund was ranked 7th in the non-listedEuropean retail sector and 11th in European retail overall in theGlobal Real Estate Sustainability Benchmark (GRESB); the SierraFund was ranked 4th and 6th in these respective categories, andthe Iberia Coop Fund 10th and 15th.

certificationSl Obtained OHSAS 18001 certifications for the Safety, Health and

Environment Management Systems at LeiriaShopping andMadeiraShopping.

l Obtained joint ISO 14001 and OHSAS 18001 certifications for the Safety, Health and Environment Management System at C.C. Continente de Portimão.

Key acHieVementS3

l Reduced electricity consumption per m2 of mall and toilet area by 3%.

l Reduced water consumption (litres per visit) by 2%.l Reduced the proportion of waste (by weight) that is sent to landfill

by 13%.l Reduced the Lost Workday Case Accident Frequency Rate

(LWCAFR) among our shopping centre service suppliers by 43%.l Achieved a tenant satisfaction index of 4.8 out of 6.l Invested and helped raise €298,649 for local community

initiatives, supported 1904 charitable organisations and dedicated1,096 hours of staff time to community volunteering.

l Opened three new Coop Stores, which offer local businesses aflexible retail format and help to further diversify our tenant mix.

l Selected five successful applicants from our ‘Rising Store’entrepreneurs’ competition who are now trialling new retailconcepts in Portuguese shopping centres.

SuStainability Performance inDicatorS5

Performance Best centre(s)Performance Indicator 2014 2015 2016 trend 2015/16 in 2016

energy and climate: GHG emissions6 of our owned portfolio and 0.0170 0.0159 0.0158 � Centro Colombo, corporate offices (tCO2e/m2 GLA) 0.0005 tCO2e/m2 GLA

energy and climate: Electricity efficiency (excluding tenants) 451 431 417 � C.C. Continente de of our owned portfolio (kWh/m2 mall and toilet area) Portimão, and GuimarãeShopping, 303 kWh/m2

Water: Water efficiency (excluding tenants) of our owned portfolio 2.92 2.80 2.76 � AlbufeiraShopping,(litres/visit) 1.4 litres/visit

Waste: Total waste recycled as a proportion of waste produced 64% 67% 68% � MaiaShopping, 97% (% by weight, across our owned portfolio)

tenants: Average occupancy rate 97.7% 97.6% 98.5% � AlbufeiraShopping, (% by GLA, across our owned portfolio) AlgarveShopping, Centro Vasco da Gama, LeiriaShopping, 100%

communities and Visitors: Investments in sustainability initiatives 262,671 285,634 298,649 � CascaiShopping, and other community contributions (€)7 €30,833

employees: Investment in staff training and development (€ per capita) 429 497 476 � – (data by country)

Safety and Health: Number of hours of SPO performed 2,512 2,422 2,208 � NorteShopping, 441 hours

Sonae Sierra in PortuGal (CONTINUED)

3 All variations under ‘Key achievements’ are compared with 2015 performance data.4 This figure corresponds to the sum of charitable organisations supported in Portugal, as reported by our shopping centres. In cases where two (or more) shopping centres have

supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.5 GHG emissions, energy, waste and safety and health indicators cover all owned shopping centres in Portugal, as well as the Lisbon and Maia offices. Water indicators exclude

office consumption. Utilities purchased on behalf of tenants are included when applicable.6 GHG protocol scopes 1 and 2, plus business air travel.7 Includes donations collected from shopping centre visitors.

further references:

For more information, see the complete case studies on our website.

8 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).

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Sonae Sierra in PortuGal (CONTINUED)

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11,465 tco2e

total ScoPeS 1 anD2 GHG emiSSionS8

24average hours

traininG Per emPloyee

508,413 Gj

total enerGyconSumPtion

340,626 tco2e

total ScoPe 3 GHGemiSSionS8

762,653m3

total WaterWitHDraWal

4.8aVeraGe tenantSatiSfaction inDex on aScale of 1 (‘not SatiSfieD’)to 6 (‘Very SatiSfieD’)

21,533 tonnes

total WaSteProDuction

Case Study: “no more cuts” we say to chefs at centro colomboThe management team at Centro Colombo identified cuts as havingaccounted for a considerable number of safety incidents occurring inthe shopping centre in 2015. Keen to address this trend, the teamengaged selected restaurant units in a safety project that involvedidentifying protective measures that could be used with key kitchenutensils and appliances and following up on their effective practicethrough a programme of unannounced kitchen safety checks. Withan investment of approximately €150, this project enabled CentroColombo to embed safe practices among tenants’ staff and, mostimportantly, contributed to an 18% reduction in the number oftenant safety incidents occurring in the shopping centre. Havingdemonstrated its effectiveness and earned positive feedbackfrom tenants, this approach will be now be replicated with othertenant units.

Case Study: 8a avenida’s lighting retrofit saves enough electricity to supply25 homes in Portugal8a Avenida was designed as an eco-efficient shopping centreand its management team have been proactive in improving itsenvironmental performance in operation, with notable successes.Determined to improve the assets’ efficiency and reduce costs evenfurther, in 2013 the team investigated potential solutions to reduceelectricity consumption from lighting. By installing LED technologyin technical corridors, they delivered a cost effective lighting retrofitwithout disruption to the shopping centre’s operations, enabling8a Avenida to save 63,500 kWh of electrical energy in 2016, whichis equivalent to the annual electricity consumption of around 25Portuguese homes and 18 tonnes CO2e. Furthermore, the electricityreduction translates into an annual cost saving of more than €5,900,meaning the payback of the project is less than one year.

Case Study: loureShopping pilots a new resource management systemFive years ago, LoureShopping in Portugal set out to pilot a projectto achieve more sustainable water use on the shopping centre site.The shopping centre now recovers water from cooling towers andwashbasins and harvests rainwater for reuse in WCs and coolingtowers. The project allows for the reuse of over 6,250m3 of wastewaterand rainwater and reduces water costs by 6%, offering a return oninvestment of three and a half years. A further 10 Sonae Sierrashopping centres in Portugal (and 20 across our global owned portfolio)have introduced rainwater harvesting systems and/or other reuseor recycling systems, and we are continuing to roll out this approachacross our portfolio as part of our resource resilience strategy.

Case Study: cascais Kitchen: bringing a new dining experience to PortugalWhen two of the restaurant units in CascaiShopping closed dueto lack of business, Sonae Sierra embarked upon a project torefresh an area of the shopping centre that was receiving littlefootfall. Taking inspiration from international food markets, ourteams worked together to create an innovative food court areawhich offers visitors a relaxing place to sample a range ofdifferent cuisines, to socialise, relax and be entertained. With aflexible format that encourages small-scale restaurants to trialnew concepts, Cascais Kitchen creates value for our tenants and consumers alike, and has enabled us to make an ailing partof the shopping centre vibrant and profitable again. Although the total letting area has been reduced, rents per m2 haveincreased by around 630% against the previous set-up, and theshopping centre has experienced immediate benefits with a 3% increase in the number of visits between July and December2016 compared to the same period in 2015.

http://www.sonaesierra.com/corporate/en-gb/research-news/casestudies.aspx

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Sonae Sierra in brazil

1: Boulevard Londrina Shopping

2: Franca Shopping

3: Manauara Shopping

4: Parque D. Pedro Shopping

5: Passeio das Águas Shopping

6: Shopping Campo Limpo

7: Shopping Metrópole

8: Shopping Plaza Sul

9: Uberlândia Shopping

Sonae Sierra Brasil is listed in the BM&F BOVESPA (the Brazilian StockExchange) with a 33% free float; the remainder is a 50/50 partnershipbetween Sonae Sierra and the German investor Alexander Otto. SonaeSierra Brasil’s business operates autonomously and is focused oninvesting, developing and managing shopping centres in Brazil.

As of 31 December 2016, Sonae Sierra Brasil owned nine shoppingcentres. Our shopping centre portfolio delivered good operationalresults in 2016 in the context of ongoing economic recession. Like-for-like tenant sales and rental income across our assets grewat 0.6% and 2.8% respectively (below the rate of inflation), and theaverage occupancy rate increased to 94.8%. As consumer spendhas weakened, we have been deploying our resilient propertymanagement approach, making the greatest possible efforts tosupport our tenants through the crisis by granting temporarydiscounts where appropriate and mobilising effective consumersales campaigns. Consequently, in 2016 we sustained a higher levelof rental income compared to our peers.

2016 saw no changes to yields even in the context of deterioratingmarket conditions. Moreover, the positive impact of the BrazilianReal appreciation contributed further to a higher portfolio OMV,which achieved €1.4 billion as of 31 December 2016, 26% higherthan last year.

Our strategic focus in Brazil is to consolidate our existing portfolio.During the year we completed the sale of 100% of our stake in Boavista Shopping (a non-core asset located in São Paulo) in linewith the open market valuation, and we will also look to raiseadditional revenue through the lease or sale of land adjacent to fourof our shopping centres for office and/or residential developmentschemes. Furthermore, we commenced with preparations for the refurbishment of Shopping Plaza Sul, a shopping centre whichhas been less impacted by the economic downturn and is subjectto significant ongoing demand from tenants looking to acquirespace. The refurbishment will modernise the shopping centre,accommodate additional tenant units and deliver improvements to the tenant mix.

In 2016 we continued to advance our digital offer forconsumers. Our Digital Experience project, launched in 2013,has previously resulted in the creation of several initiatives,including the ‘Services Mobile App’, ‘WhatsApp Advisor’ and‘#BuyTogether’ pilot project. We are now responding to thegrowth in e-commerce with the development of an on-linesales platform, and we have launched a promising new projectcalled STEP-9 which involves the use of an open, collaborativenetwork of digital entrepreneurs to bring together new ideasfor digital services and marketing activation which can betested by Sonae Sierra Brasil’s shopping centres.

In keeping with our focus on safe people and eco-efficiency –and as a part of our focus on reducing tenants’ costs – weimproved the electricity efficiency of our owned portfolio by 12%,and increased our waste recycling rate by 9%. Theimprovements in our portfolio’s electricity efficiency contributedto a 42% reduction in GHG emissions (GHG protocol scope 1 and2 emissions, plus business air travel) across our shoppingcentres and corporate offices.

We implemented 60% of the recommendations identified aspart of our ‘Bright Project’10 energy efficiency initiative, and83% of the water efficiency measures identified through our ‘Dive Project’10. The measures identified by theseinitiatives offer combined potential savings of €798,000 ayear. We were also able to cut the number of level 3 and aboveaccidents per million visits in our shopping centres by 32%following the implementation of site specific action plans totackle the common causes of incidents. And mirroring ourperformance in Portugal, we saw a 60% reduction in the LostWorkday Case Accident Frequency Rate (LWCAFR) among ourshopping centre service suppliers following our investigationsto identify the root causes of incidents and implementpreventive measures.




total: 347

total Gla:451,787m2

(9 centres)

94.3m €76.7m

9 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Brazil. It has been calculated based on account performancebetween 1 January and 31 December 2016. The conversion rate used to convert the Brazilian value in Reais to Euro (€) was 0.26105. The same exchange rate applies for otherfinancial data for Brazil.


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Sonae Sierra in brazil (CONTINUED)

aWarDS anD acKnoWleDGementSl Sonae Sierra Brasil and Shopping Metrópole both received a gold

award in the Institutional Campaigns Marketing category of theABRASCE Awards (Brazilian Council of Shopping Centres) forSTEP-9 and the Evening Food Fair, respectively.

l Uberlândia Shopping received a silver award in the Newton Riquesustainability category of the ABRASCE Awards for energy andwater management.

Key acHieVementS11

l Reduced GHG emissions12 per m2 of GLA by 42%. l Reduced electricity consumption per m2 of mall and toilet area by 12%.l Increased the recycling rate by five percentage points, reaching 61%.l Reduced the proportion of waste (by weight) that is sent to landfill

by 9%.l Reduced the number of non-conformities per hour of reference

SPO by 14%.l Reduced the Lost Workday Case Accident Frequency Rate

(LWCAFR) among our shopping centre service suppliers by 60%,and the Accident Severity Rate by 49%.

l Cut the number of serious accidents per million visits in ourshopping centres by 32%.

l Held the successful sales campaign ‘Revolutionary Tuesday’ inJanuary which increased footfall by 43% and sales by 83%compared to the same day of the previous year.

l Launched STEP-9, an open innovation platform that aims tocreate a collaborative network of digital entrepreneurs to bring together new ideas for digital services and marketingactivation that can be tested in our shopping centres.

l Invested and helped raise €83,844 for local community initiatives,supported 3613 charitable organisations and dedicated 1,029 hoursof staff time to community volunteering.

l Opened one new Coop Store, which offers local businesses aflexible retail format and help to further diversify our tenant mix.

SuStainability Performance inDicatorS14


energy and climate: GHG emissions15 of our owned portfolio and 0.0209 0.0172 0.0100 � Franca Shopping16, corporate offices (tCO2e/m2 GLA) 0.004 tCO2e/m2 GLA and Parque D. Pedro Shopping, 0.007 tCO2e/m2 GLA

energy and climate: Electricity efficiency (excluding tenants) 483 444 391 � Franca Shopping16

of our owned portfolio (kWh/m2 mall and toilet area) 67 kWh/m2

and Boulevard Londrina Shopping, 331 kWh/m2

Water: Water efficiency (excluding tenants) of our owned portfolio 5.3 4.9 5.1 � Shopping Campo (litres/visit) Limpo, 1.6 litres/visit

Waste: Total waste recycled as a proportion of waste produced 49% 56% 61% � Shopping Metrópole,(% by weight, across our owned portfolio) 75%

tenants: Average occupancy rate 95.1% 92.6% 94.8% � Franca Shopping, (% by GLA, across our owned portfolio) 99.4%

communities and Visitors: Investments in sustainability initiatives 420,825 190,114 83,844 � Parque D. Pedroand other community contributions (€)17 Shopping, €28,384


Safety and Health: Number of hours of SPO performed 4,238 4,430 3,381 � Parque D. Pedro Shopping, 838 hours

11 All variations under ‘Key achievements’ are compared with 2015 performance data.12 GHG protocol scopes 1 and 2, plus business air travel.13 This figure corresponds to the sum of charitable organisations supported in Brazil, as reported by our shopping centres. In cases where two (or more) shopping centres have

supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.14 GHG emissions, energy, waste and safety and health indicators cover all owned shopping centres in Brazil, as well as the São Paulo office. Water indicators exclude office

consumption. Utilities purchased on behalf of tenants are included when applicable.15 GHG protocol scopes 1 and 2, plus business air travel.16 Whilst Franca Shopping achieved the best performance it is not considered comparable with other shopping centres since it is partly open air. For this reason, we have also

highlighted the performance of Parque D. Pedro Shopping for GHG emissions and Boulevard Londrina Shopping for electricity efficiency.17 Includes donations collected from shopping centre visitors.

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Sonae Sierra in brazil (CONTINUED)

4,267 tco2e


42average hours


411.101 Gj


145,581 tco2e


861,202m3



13,535 tonnes


Case Study: franca Shopping fights back: reducing the impact of risingcosts and economic recession by increasing energy efficiency Franca Shopping in São Paulo was faced with a difficultsituation: electricity costs were up due to reduced hydropowercapacity; tenant sales were down due to economic recession. In this context, increasing energy efficiency became an evengreater priority. Franca Shopping’s management team workedhard to develop a deep understanding of the energyconsumption patterns of the entire shopping centre site. Havingidentified areas for improvement, they implemented a series ofmeasures to deliver an annual energy saving of 16%, equivalentto around €9,500 in costs, with no capital investment.

Case Study: a step forward for digital innovation in brazil Sonae Sierra Brasil has set its sights on becoming a pioneer indigital innovation in the shopping centre sector. Following thecreation of several successful projects, we wanted to engageconsumers to provide us with inspiration and support to tailor ourdigital strategy to best suit their needs.

With this in mind, we created STEP-9, an open innovationplatform that aims to create a network of digital entrepreneurswho want to help us build the shopping centre of the future.Through STEP-9, we have engaged visitors and otherstakeholders to come up with promising ideas that we candevelop to improve our shopping centre services. Furthermore,the interest generated by the platform has enhanced ourshopping centre brands, whilst STEP-9’s recognition by theABRASCE Awards as a unique project in Brazil distinguishesSonae Sierra Brasil at the corporate level for our inclusive andforward-thinking business approach.Case Study:

We offer consumers ‘the right to pay less’ with a salesrevolution in brazilAs household income declined due to the impacts of economicrecession, consumer sales dropped in Brazil, creatingchallenging conditions for retailers and shopping centreoperators. For Sonae Sierra Brasil, a key challenge was to helpour tenants to recover their sales and reduce their accumulatedstocks. We wanted to launch a sales campaign – but no ordinarysales campaign. Consumers felt frustrated and we wanted tospeak to them in a language that would resonate with theirown economic difficulties. Hence we created ‘RevolutionaryTuesday – The Right to Pay Less’, a highly visible campaign thatwould offer goods at attractive prices. Using just under 1.5% ofthe allocated marketing budget, the campaign brought in 43%more visitors, generated an 83% increase in sales and receivedpositive recognition from consumers.

18 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).

further references:



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As of 31 December 2016 we owned three shopping centres inGermany: Hofgarten Solingen in Solingen, Alexa in Berlin, and Loop5in Weiterstadt.

On the whole, market conditions remained stable in Germany during2016. Nonetheless, due to some specific local operating conditions,like-for-like sales across our owned assets declined by 1.9% incomparison with 2015, although rents increased by 3.9%. But we areoptimistic that the progress we are making to improve the tenant mixand enhance the visitor experience will bear fruit in the medium term.

In line with our capital recycling strategy, in January 2016 we sold41% of our interest in Loop5 to Deutsche Asset Management. Wewill continue to be responsible for the shopping centre’smanagement and will remain the owner of a 9% stake in the asset.

On the development front, we proceeded with the pre-licensing ofa mixed-use project in Nuremberg, which will involve theredevelopment of an iconic building of 250,000m2 which formerlyserved as the distribution centre for the catalogue retailer Quelle.Our plans for the site encompass an 18,000m2 shopping centre,residential units (including student accommodation) and officespace. The development of this scheme will be a strong focus pointfor Sonae Sierra throughout 2017, and we aim to secure a full licenceto commence construction before the end of the year.

2016 also saw the roll out of novel marketing initiatives across ourGerman shopping centres. Following its successful launch at oneshopping centre in Germany in 2015, we continued to expandFashion4Me, a digital stylist which provides personalised fashionadvice by selecting combinations of clothes available in differentshopping centre stores.

In keeping with our focus on safe people and eco-efficiency, we sawa 15% reduction in the number of serious accidents per million visitsto our shopping centres, and achieved zero lost workday accidentsamong our service suppliers. Furthermore, we implemented 47% ofthe recommendations identified as part of our ‘Bright Project’19

energy efficiency initiative. The measures identified by this initiativeoffer potential savings of €180,000 per year.

Sonae Sierra in Germany

Key acHieVementS20

l Reduced the number of serious accidents per million visits in ourshopping centres by 15%.

l Achieved zero lost workday accidents among service suppliers.l Increased average tenant satisfaction to 4.4 out of 6.l Invested and helped raise €9,903 for local community initiatives

in 2016, supported nine21 charitable organisations and dedicated105 hours of staff time to community volunteering.

l Increased investment in staff training and development by 2% (€ per capita).

1: Alexa

2: Hofgarten Solingen

3: Loop5

New Projects

4: Nuremberg





total: 69

total Gla:138,450m2

(3 centres)

53.7m €43.5m

€6.8m1 project underdevelopment with atotal Gla of 18,850m2

19 ‘Bright’ is an innovative energy efficiency modelling tool which enables us to calculate the optimised theoretical energy consumption of a shopping centre, and then comparethis with its actual usage making it possible to easily detect and remedy any inefficiencies.

20 All variations under ‘Key achievements’ are compared with 2015 performance data.21 This figure corresponds to the sum of charitable organisations supported in Germany, as reported by our shopping centres. In cases where two (or more) shopping centres

have supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.22 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Germany. It has been calculated based on account

performance between 1 January and 31 December 2016.

.09 s


Sonae Sierra in Germany (CONTINUED)

SuStainability Performance inDicatorSSuStainability Performance inDicatorS23


energy and climate: GHG emissions24 of our owned portfolio and 0.0210 0.0168 0.0192 � Loop5, 0.007corporate offices (tCO2e/m2 GLA) tCO2e/m2 GLA

energy and climate: Electricity efficiency (excluding tenants) 581 536 589 � Hofgarten of our owned portfolio (kWh/m2 mall and toilet area) Solingen, 525 kWh/m2

Water: Water efficiency (excluding tenants) of our owned portfolio 2.9 3.1 3.2 � Hofgarten(litres/visit) Solingen25, 1.2 litres/visit and Alexa 2.7 litres/visit

Waste: Total waste recycled as a proportion of waste produced 67% 67% 66% � Hofgarten (% by weight, across our owned portfolio) Solingen, 71%

tenants: Average occupancy rate 96.8% 95.1% 95.2% � Alexa (% by GLA, across our owned portfolio) 98.9%

communities and Visitors: Investments in sustainability initiatives 46,101 35,371 9,903 � Hofgarten and other community contributions (€)26 Solingen, €6,903


Safety and Health: Number of hours of SPO performed 284 311 228 � Alexa, 59 hours

23 GHG emissions, energy and safety and health indicators cover all owned shopping centres in Germany, as well as the Düsseldorf office. Water and waste indicators excludeoffice consumption. Utilities purchased on behalf of tenants are included when applicable.

24 GHG protocol scopes 1 and 2, plus business air travel.25 While Hofgarten Solingen achieved the best performance, it is not considered comparable to other shopping centres in our portfolio because water consumption from the

centre’s toilets are not included in our water efficiency indicator as they are managed by a third party. For this reason we have also highlight the performance of Alexa.26 Includes donations collected from shopping centre visitors.27 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).

2,564 tco2e


18average hours


92,907 Gj


84,513 tco2e


127,613m3



2,212 tonnes


12 4

3

1: Freccia Rossa

2: Gli Orsi

3: Le Terrazze

New Projects

4: CityLife Shopping District

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As of 31 December 2016 we owned three shopping centres in Italy:Freccia Rossa in Brescia, Gli Orsi in Biella and Le Terrazze in LaSpezia with a combined gross lettable area of 109,067m2.

In Italy the economy grew at a slow but steady pace in 2016. Like-for-like rents at our owned shopping centres rose by 2.8% and theaverage occupancy rate reached 99.3%, but tenant sales were static.Investor appetite however remained strong, with yield compressionwhich had a positive impact on our shopping centres’ net assetvalues (NAVs).

Whilst we do not have any active development projects of our ownin Italy at present, we proceeded to deliver on our mandate toprovide a full set of development, leasing and property managementservices on the CityLife Shopping District, part of a high-profilemixed-use regeneration project in Milan. Our involvement in thisproject is a testament to the breadth of our service offer andexperience, which gives Sonae Sierra a competitive edge as aservices provider. In 2017 and beyond we will be attentive to otheropportunities for capital-light direct investment and servicesprovision on mixed-use schemes within Italy.

In keeping with our focus on safe people and eco-efficiency,we achieved a 54% reduction in our GHG emissions intensity(GHG protocol scope 1 and 2 emissions, plus business air travel)from our shopping centres and corporate offices, and increased theproportion of waste recycled across our owned portfolio by5 percentage points to 68%. Furthermore, we implemented 57%of the recommendations identified as part of our ‘Bright Project’28,and 85% of the water efficiency measures identified through our‘Dive Project’28. The measures identified by these two initiativesoffer combined potential savings of €450,000 per year.

Sonae Sierra in italy

aWarDS anD acKnoWleDGementSl CityLife Shopping District and Freccia Rossa were awarded a

Certificate of Merit in the Business to Business and Servicescategories of the CNCC Italy Awards, respectively.

Key acHieVementS29

l Reduced GHG emissions30 per m2 of GLA by 54%.l Increased the recycling rate by five percentage points, reaching

68%.l Achieved zero lost workday accidents among service suppliers

and employees.l Achieved a tenant satisfaction index of 4.7 out of 6.l Invested and helped raise €106,955 for local community

initiatives, supported 4931 charitable organisations and dedicated68 hours of staff time to community volunteering.


29 All variations under ‘Key achievements’ are compared with 2015 performance data.30 GHG protocol scopes 1 and 2, plus business air travel.31 This figure corresponds to the sum of charitable organisations supported in Italy, as reported by our shopping centres. In cases where two (or more) shopping centres have

supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.32 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Italy. It has been calculated based on account performance

between 1 January and 31 December 2016.




oPerational coStS

total: 47

total Gla:109,067m2

(3 centres)

25.3m €24.8m

€4.6m

DeVeloPment ProjectS

1 project underdevelopment for thirdparties with a totalGla of 32,000m2

further references:


Case Study: commitment and collaboration increase recycling at freccia rossaFreccia Rossa had a relatively low recycling rate compared to othershopping centres in Sonae Sierra’s Italian portfolio. But thanks to thestrong motivation of the shopping centre management team, theroot causes of poor waste management were identified and a series ofactions were taken to address them. Not only did Freccia Rossa investin new waste management equipment, improve the layout of the wastearea and ensure that recycling featured as a key topic in engagementwith tenants, they went a step further by setting up a system of activecollaboration between the security and cleaning teams and tenants’staff. This resulted in a much improved approach to waste managementin food courts and enabled the centre to increase its recycling rate from46% in 2015 to 61% in 2016.

.11 s


Sonae Sierra in italy (CONTINUED)



energy and climate: GHG emissions34 of our owned portfolio and 0.0254 0.0226 0.0105 � Le Terrazze, corporate offices (tCO2e/m2 GLA) 0.0004 tCO2e/m2 GLA

energy and climate: Electricity efficiency (excluding tenants) 419 432 427 � Le Terrazze, of our owned portfolio (kWh/m2 mall and toilet area) 313 kWh/m2

Water: Water efficiency (excluding tenants) of our owned portfolio 4.0 4.7 4.8 � Le Terrazze, (litres/visit) 3.6 litres/visit

Waste: Total waste recycled as a proportion of waste produced 62% 63% 68% � Gli Orsi, (% by weight, across our owned portfolio) 76%

tenants: Average occupancy rate 99.4% 99.6% 99.3% � Le Terrazze, (% by GLA, across our owned portfolio) 100%

communities and Visitors: Investments in sustainability initiatives 74,238 91,087 106,955 � Gli Orsi, and other community contributions (€)35 €69,840


Safety and Health: Number of hours of SPO performed 281 217 218 � Freccia Rossa, 85 hours

1,095 tco2e


14average hours


58,247 Gj


55,772 tco2e


152,963m3



1,795 tonnes


33 GHG emissions, energy and safety and health indicators cover all owned shopping centres in Italy, as well as the Milan office. Water and waste indicators exclude officeconsumption. Utilities purchased on behalf of tenants are included when applicable.

34 GHG protocol scopes 1 and 2, plus business air travel.35 Includes donations collected from shopping centre visitors.36 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).


1

2

3

1: River Plaza Mall

2: ParkLake

New Projects

3: Adora Mall

.12 s


In 2007 we entered the Romanian market with the acquisition ofRiver Plaza Mall, located in the city of Ramnicu Valcea. In 2016 weinaugurated ParkLake, a new flagship shopping centre in Bucharest,meaning that we now own and operate two assets in Romania.

The opening of ParkLake in September marked a key strategicachievement for Sonae Sierra. It is our first development in EasternEurope and one of the largest shopping centres on the continent, withover 200 shop units within 70,000m2 of GLA. As an early indicatorof its success, ParkLake opened with 97% of its gross lettable area(GLA) pre-leased. Moreover, the new brands and retail concepts it hasintroduced to the Romanian market are proving to be very popular:we have received positive feedback from tenants and a high level ofvisitor traffic in the first four months after its opening.

ParkLake offers a reference for high quality modern retail. It boastsexceptional architecture, innovative features and an integratedtheme based on “park, nature and family”, emphasising its functionas a meeting place where people can eat, shop, relax, be entertainedand participate in a variety of leisure activities within a stimulatingand comfortable living space. Consistent with Sonae Sierra’s long-standing approach to development, which emphasises theintegration of culture and heritage, ParkLake’s interior decorationincludes references to local history and folklore and the buildingoffers dedicated cultural spaces. In this way, ParkLake presentsitself as a truly unique destination, one in which the people ofBucharest can recognise and celebrate their own culture whilst alsorelishing new experiences and benefitting from a tenant mix whichcombines national and international brands.

Sustainability considerations were a standing feature throughout theproject, from design through to construction management and finalcompletion. Sonae Sierra’s own Safety, Health and EnvironmentDevelopment Standards were applied, and the project achieved apre-certification ‘Excellent’ rating in accordance with internationalgreen building design standard BREEAM. Furthermore, theconstruction works were certified in accordance with ISO 14001 andOHSAS 18001 for environment and safety and health managementrespectively. These two groups of certifications are the first of theirkind to be achieved on a shopping centre project in Romania.

2016 also saw strong operational results from River Plaza Mall.Bolstered by high levels of economic growth in the country andreaping the benefits of significant tenant mix improvements carriedout over the past two years, sales increased by 16% and rents wereup by 6% in comparison with 2015.

Sonae Sierra in romania

aWarDS anD acKnoWleDGementSl Sonae Sierra awarded Concept and Design Project of the Year by

the SEE Real Estate Awards for ParkLake.l ParkLake and Sonae Sierra named Best Retail Development &

Developer of the Year respectively by the CIJ Awards.

certificationSl BREEAM Excellent and UNE 170001-2 certifications obtained for

ParkLake.

Key acHieVementS37

l Successful inauguration of ParkLake, with 97% of GLA leased on opening and with positive feedback from tenants, visitors andlocal residents.

l Incorporation of innovative features at ParkLake – including thedesign of the international food court – drawing inspiration fromSonae Sierra’s vision for the ’shopping centre of the future’.

l Full accomplishment of the Safe Practice Index programme andachievement of targets to reduce the rate and severity ofaccidents on the construction project of ParkLake.

l Recycling rate of 85% and completion of a project to map therecycled content of materials used during the construction projectof ParkLake.

l Reduced electricity consumption per m2 of mall and toilet area atRiver Plaza Mall by 9%.

l Achieved zero lost workday accidents among service suppliers andemployees at River Plaza Mall.

l Increased the average number of hours of training per year peremployee by 8%.





total: 26

total Gla:81,004m2

(2 centres)

6.9m €6.2m


37 All variations under ‘Key achievements’ are compared with 2015 performance data.38 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Romania. It has been calculated based on account performance

between 1 January and 31 December 2016. The conversion rate used to convert the Romanian value in Lei to Euro (€) was 0.22498. The same exchange rate applies for otherfinancial data for Romania.

.13 s



PerformancePerformance Indicator 2014 2015 2016 trend 2015/16

energy and climate: GHG emissions40 of our owned portfolio and 0.0861 0.0896 0.0989 �

corporate offices (tCO2e/m2 GLA)

energy and climate: Electricity efficiency (excluding tenants) 325 367 334 �

of our owned portfolio (kWh/m2 mall and toilet area)

Water: Water efficiency (excluding tenants) of our owned portfolio 1.6 1.4 1.6 �

(litres/visit)

Waste: Total waste recycled as a proportion of waste produced 40% 51% 43% �

(% by weight, across our owned portfolio)

tenants: Average occupancy rate 81% 84% 96% �

(% by GLA, across our owned portfolio)

communities and Visitors: Investments in sustainability initiatives 30,193 – 32,135 �

and other community contributions (€)41

employees: Investment in staff training and development (€ per capita) 19 42 – �

Safety and Health: Number of hours of SPO performed 167 86 99 �

1,113 tco2e


8average hours


18,400 Gj


4,605,122 tco2e


13,248m3



335 tonnes


Sonae Sierra in romania (CONTINUED)

39 We have not highlighted our best performing centre in Romania as the sustainability performance of ParkLake, which opened in September 2016, is only included in relation toour human resource, community and development indicators. ParkLake is also included in our operational performance indicators including total GLA under management, thetotal number of shopping centres owned, average occupancy rate by GLA, shopping centre visits, tenant sales and rents.GHG emissions, energy and safety and health indicators cover all owned shopping centres that have been open for the full reporting year (River Plaza Mall), as well as theBucharest office. Water and waste indicators only cover River Plaza Mall. Utilities purchased on behalf of tenants are included when applicable.

40 GHG protocol scopes 1 and 2, plus business air travel.41 Includes donations collected from shopping centre visitors and €29,479 invested in local community activities during the development of ParkLake.42 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).

Scope 3 emissions include emissions associated with the construction of ParkLake.

2

3

1

7

6 4

5

1: Dos Mares

2: GranCasa

3: Luz del Tajo

4: Max Center

5: Plaza Mayor

6: Valle Real

New Projects

7: McArthurGlen Designer

Outlet Málaga

.14 s


In 1999 we started the development of our first Spanish shoppingcentre, Plaza Mayor in Málaga. Since then we have consolidated ourpresence in this market and on 31 December 2016 we owned sixshopping centres in Spain.

Our Spanish portfolio delivered a strong performance in 2016.Favourable economic conditions gave rise to greater consumerconfidence and this, combined with the benefits of our proactiveproperty management approach, meant that we saw an 8% increasein like-for-like tenant sales and a 5.7% growth in rents across ourowned portfolio.

The investment market in Spain remained buoyant, translating intoa very positive impact on our portfolio’s net asset value (NAV). Takingadvantage of favourable market conditions, we placed three assetsin the Sierra Fund on the market – Luz del Tajo in Spain and twoassets in Portugal. They were acquired by Iberia Coop, a new jointventure fund established between CBRE Global Investment Partners(GIP) and Sonae Sierra. Through this transaction we have reducedour ownership stake in Luz del Tajo and the other two assets whilstretaining property management services in line with our strategy.2016 also saw the launch of a new REIT created with Spanish bankBankinter. Sonae Sierra will fulfil the capacity of operating partnerand owns a 3.75% stake in the fund which will pursue a programmeof acquisitions within the Iberian market in 2017 and beyond.

In relation to our existing assets, we are commencing works todevelop the McArthurGlen Designer Outlet Málaga at Plaza Mayor.This unique expansion project will involve the creation of the firstdestination of its kind in southern Spain and, when complete, willoffer consumers over 170 brands selling luxury and designertrademark goods at discount prices.

We are also commencing major interior refurbishments atGranCasa, Max Center and Valle Real. The works at GranCasa inZaragoza also involve a significant repositioning: we are developinga new food court and changing the concept of the third floor toprovide a completely different offer. The leasing for the new shopunits is already underway, with strong demand from prospectivetenants, enabling us to feel confident about the future success ofthis project. All of these refurbishment and expansion works arebeing planned and developed with attention to consumer behaviourtrends. With reference to our ‘shopping centre of the future’ vision,we are presenting innovative concepts to our joint venture partnersin those centres where renovation works are planned, with our sightsset on ensuring that our shopping centres are the most practical,exciting and relevant to visitors in their respective catchment areas.

In keeping with our focus on safe people and eco-efficiency, wereduced our electricity consumption per m2 of mall and toilet areaby 8%, and achieved a 29% reduction in the GHG emissionsintensity (GHG protocol scope 1 and 2 emissions, plus business airtravel) of our shopping centres and corporate offices. Furthermore,we improved our portfolio’s water efficiency by 4%, and increasedthe proportion of waste recycled by five percentage points to 62%.These achievements were complimented by the implementationof 60% of the recommendations identified as part of our ‘BrightProject’43 energy efficiency initiative, and 75% of the waterefficiency measures identified through our ‘Dive Project’43.

Sonae Sierra in SPain

aWarDS anD acKnoWleDGementSl The Sierra Fund was ranked 4th in the non-listed European retail

sector and 6th in European retail overall in the Global Real EstateSustainability Benchmark (GRESB); and the Iberia Coop Fund wasranked 10th and 15th in these respective categories.

Key acHieVementS44

l Reduced GHG emissions45 per m2 of GLA by 29%.l Reduced our electricity consumption per m2 of mall and toilet area

by 8%.l Reduced our water consumption (litres per visit) by 4%.l Increased the recycling rate by five percentage points, reaching 62%.l Reduced the number of non-conformities per hour of reference

SPO by 50%.l Achieved a tenant satisfaction index of 5 out of 6.l Invested and helped raise €154,578 for local community

initiatives, supported 6846 charitable organisations and dedicated136 hours of staff time to community volunteering.

l Opened two new Coop Stores, which offer local businesses aflexible retail format and help to further diversify our tenant mix.

l Rolled out Fashion4Me, a digital stylist which providespersonalised fashion advice by selecting combinations of clothesavailable in different shopping centre stores.


44 All variations under ‘Key achievements’ are compared with 2015 performance data.45 GHG protocol scopes 1 and 2, plus business air travel.46 This figure corresponds to the sum of charitable organisations supported in Spain, as reported by our shopping centres. In cases where two (or more) shopping centres have

supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.47 This figure corresponds to the total rents invoiced (100%) to tenants of Sonae Sierra owned shopping centres in Spain. It has been calculated based on account performance

between 1 January and 31 December 2016.





total: 85

total Gla:304,468m2

(6 centres)

50.5m €45.2m


.15 s


Sonae Sierra in SPain (CONTINUED)



energy and climate: GHG emissions49 of our owned portfolio and 0.0023 0.0024 0.0017 � Plaza Mayor50 andcorporate offices (tCO2e/m2 GLA) Max Center, both 0.0008 tCO2e/m2 GLA

energy and climate: Electricity efficiency (excluding tenants) 282 270 249 � Plaza Mayor50,of our owned portfolio (kWh/m2 mall and toilet area) 76 kWh/m2

and Valle Real, 178 kWh/m2

Water: Water efficiency (excluding tenants) of our owned portfolio 2.3 2.4 2.3 � Dos Mares,(litres/visit) 1.3 litres/visit

Waste: Total waste recycled as a proportion of waste produced 52% 57% 62% � Plaza Mayor, (% by weight, across our owned portfolio) 82%

tenants: Average occupancy rate 92% 95% 94% � Valle Real, (% by GLA, across our owned portfolio) 100%

communities and Visitors: Investments in sustainability initiatives 143,508 149,323 154,578 � GranCasa, and other community contributions (€)51 €56,351

employees: Investment in staff training and development (€ per capita) 1,325 1,309 763 � – (data by country)

Safety and Health: Number of hours of SPO performed 965 701 511 � GranCasa, 120 hours

486 tco2e


20average hours


67,583 Gj


121,341 tco2e


214,582m3



4,473 tonnes


48 GHG emissions, energy and safety and health indicators cover all owned shopping centres in Spain, as well as the Madrid office. Water and waste indicators exclude officeconsumption. Utilities purchased on behalf of tenants are included when applicable.

49 GHG protocol scopes 1 and 2, plus business air travel.50 Whilst Plaza Mayor achieved the best performance it is not considered comparable with other shopping centres since it is predominately open air. For this reason, we have also

highlighted the performance of Max Center for GHG emissions and Valle Real for electricity efficiency.51 Includes donations collected from shopping centre visitors.52 Please refer to our Economic, Environmental and Social Report 2016 for a detailed breakdown of the sources of GHG emissions included in our carbon footprint (scopes 1, 2 and 3).

.16 sIII SONAE SIERRA 2016 Sustainability Performance by Country

www.sonaesierra.com

PortuGalliSboaPorto

brazilSão Paulo

colombiacali

GermanyDüSSelDorf

GreeceatHenS

italymilan

luxembourGluxembourG

moroccocaSablanca

romaniabucHareSt

SPainmaDriD

tHe netHerlanDSamSterDam

turKeyiStanbul

http://www.sonaesierra.com

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by Country 2016 - Sonae Sierra