Tag Immobilien Ag · XETR:TEG

Tag Immobilien — Investor Day (June 2016)

76 slides from Tag Immobilien's investor day presentation, Jun 28, 2016

  1. Slide 1: TAG Immobilien AG | CMD 2016

    11 TAG Immobilien AG | CMD 2016

  2. Slide 2: TAG CMD 2016 Agenda I

    TAG CMD 2016 Agenda I 22 Hotel Hilton 9:00 Welcome / Get Together Presentations 10:00 – 12:30 Martin Thiel (CFO)  Highlights Q1 2016  Recent developments  Strategy  Outlook Draženko Grahovac (Savills)  Residential real estate market in Eastern Germany Claudia Hoyer (COO)  TAG portfolio East Ge

  3. Slide 3: TAG CMD 2016 Agenda II

    TAG CMD 2016 Agenda II 33 Property Tour Dresden  Haenel-Clauß-Straße (district Striesen) 391 units 12:30  Dresden market development/ new constructions - 15:30  Gubener Straße (district Prohlis) 150 units Property Tour  Modernization strategy Dresden  Receivables Management  Max-Klinger-Straße

  4. Slide 4: TAG CMD 2016 Team

    TAG CMD 2016 Team 44 Claudia Hoyer Martin Thiel Dr. Harboe Vaagt Heike Baumgart Dominique Mann COO CFO CLO LIM Dresden Head of IR/PR Draženko Grahovac Head of Valuation Europe Managing Director Corporate Finance - Valuation Savills Immobilien Beratungs-GmbH TAG Immobilien AG | CMD 2016

  5. Slide 5: Presentations

    PRESENTATIONS TAG Immobilien AG | CMD 2016

  6. Slide 6: TAG Martin Thiel

    TAG Martin Thiel 66 CFO Senftenberg, Ernst-Thälmann-Straße TAG Immobilien AG | CMD 2016

  7. Slide 7: TAG highlights Q1 2016

    7 TAG highlights Q1 2016 TAG Immobilien AG | CMD 2016

  8. Slide 8: TAG highlights Q1 2016

    TAG highlights Q1 2016 88 Q1 2016 Q4 2015 Q1 2015  Vacancy (residential units) 7.5% 7.5%/7.7%* 8.9%  L-f-L rental growth Y-o-Y 1.9% 1.6% 1.0% Operational  L-f-L rental growth Y-o-Y incl. vacancy reduction 3.8% 3.3% 2.5% performance  Net in-place rents (EUR/sqm) 5.02 5.04/ 5.00* 4.98  FFO I (EUR

  9. Slide 9: TAG recent developments

    9 TAG recent developments TAG Immobilien AG | CMD 2016

  10. Slide 10: TAG vacancy reduction development

    TAG vacancy reduction development 10 10  Residential units 2013 - 2016  Realisation of development potential from newly acquired portfolios  Proof of successful asset and property management over the last three years  Increases in vacancy due to new acquisitions with higher vacancy and sales wit

  11. Slide 11: TAG rental growth development

    TAG rental growth development 11 11  Rental growth and vacancy reduction are the two main drivers to further improve the rental income profile of TAG  TAG invests in regions with rather stable rent profile and is able to acquire properties with above average vacancy level  By way of targeted mode

  12. Slide 12: TAG strategy

    12 TAG strategy TAG Immobilien AG | CMD 2016

  13. Slide 13: TAG Strategy

    TAG Strategy 13 13  “High Yield” investment profile  Highest FFO and dividend yield profile amongst peer group  Total return focus on distributions to shareholders rather than un-crystalized NAV growth  Focus on cash distributions to shareholders Clear distinction of investment strategy vis-a-vi

  14. Slide 14: TAG achievements in capital recycling strategy

    TAG achievements in capital recycling strategy 14 14 2015 TAG constantly analyzes regional markets and its portfolio to determine the best point in time to realize highest value by targeted disposals Portfolio Sales Acquisitions Portfolio sales Re-investments in (Signing in 2015)  Units: 1,254  Un

  15. Slide 15: TAG outlook

    15 TAG outlook TAG Immobilien AG | CMD 2016

  16. Slide 16: TAG outlook

    TAG outlook 16 16  FFO EUR 84m – EUR 85m (EUR 76.3 in FY 2015) Guidance FY 2016  FFO/share EUR 0.67 (EUR 0.62 in FY 2015) based on current weighted average NOSH (unchanged)  Dividend EUR 0.57 per share (EUR 0.55 for FY 2015) FFO per share in EUR Dividend per share in EUR 0.58 0.62 0.67 0.50 0.55

  17. Slide 17: TAG Draženko Grahovac

    TAG Draženko Grahovac 17 17 Savills, Head of Valuation Europe Dresden, Bienertstraße Riesa, Kastanienstraße Dresden, Heidestraße Dresden, Bärensteiner Straße Lauta, Conrad-Blenkle-Straße TAG Immobilien AG | CMD 2016

  18. Slide 18: Current developments and trends in Eastern Germany

    Current developments and trends in Eastern Germany TAG Capital Markets Day Dresden, 28 June 2016 Draženko Grahovac MRICS savills.de

  19. Slide 19: Are you able to spot East Germany on this map?

    GDP Growth Since Financial Crisis: The Two Europes Are you able to spot East Germany on this map? Source: Eurostat 2 Source: Eurostat

  20. Slide 20: Are you able to spot East Germany on this map?

    GDP Growth Since Financial Crisis: The Two Europes Are you able to spot East Germany on this map? Source: Eurostat 3 Source: Eurostat

  21. Slide 21: Wealth is still lower in Eastern Germany

    Wealth is still lower in Eastern Germany 1991 2014 70,000 60,000 GDP per inhabitant (EUR) 50,000 40,000 30,000 20,000 10,000 0 Source: National Statistics Office 4

  22. Slide 22: Wealth is still lower but the gap is negligible

    Wealth is still lower in Eastern Germany but the gap is negligible compared to 25 years ago 1991 2014 70,000 +67% +245% 60,000 GDP per inhabitant (EUR) 50,000 40,000 30,000 20,000 10,000 0 Source: National Statistics Office 5

  23. Slide 23: Still, the shrinking population is an issue…

    Still, the shrinking population is an issue… Population East Germany (incl. Berlin) Population West Germany 115 110 105 2015 = 100 100 95 90 85 1991 1996 2001 2006 2011* 2016 2021 2026 Source: National Statistics Office / * data revision due to census 6

  24. Slide 24: …but increasing birth rates

    …but increasing birth rates East Germany (incl. Berlin) West Germany 1.55 Birth rate (average number of children per woman) 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 1.10 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: National Statistics Office 7

  25. Slide 25: …but increasing birth rates and positive migration

    …but increasing birth rates and positive migration balance are stabilising factors North Rhine-Westphalia Bavaria Baden-Württemberg Lower Saxony Hesse Berlin Rhineland-Palatinate Saxony Schleswig-Holstein Brandenburg Hamburg Mecklenburg-West Pomerania Bremen Thuringia Saxony-Anhalt Saarland - 20,000

  26. Slide 26: Almost all major cities are attracting people…

    Almost all major cities are attracting people… District-free city Rural district 3,750,000 Number of inhabitants 2014 (logarithmic) 750,000 150,000 30,000 -30 -20 -10 0 10 20 30 40 50 60 70 Net migration 2012-14 per 1,000 inhabitants Source: National Statistics Office 9

  27. Slide 27: Almost all major cities are attracting people…

    Almost all major cities are attracting people… District-free city Rural district 3,750,000 Berlin Number of inhabitants 2014 (logarithmic) 750,000 Dresden Leipzig 150,000 Potsdam Dessau-Roßlau Frankfurt (Oder) 30,000 -30 -20 -10 0 10 20 30 40 50 60 70 Net migration 2012-14 per 1,000 inhabitants Sour

  28. Slide 28: …which is reflected in decreasing vacancy rates

    …which is reflected in decreasing vacancy rates in the local housing markets 2014 2009 12% 10% 8% 6% 4% 2% 0% Source: Empirica 11

  29. Slide 29: Rental growth has been strong in a number of cities

    Rental growth has been strong in a number of cities rental growth 2010-15 30% 25% 20% 15% 10% 5% 0% Source: Bulwiengesa 12

  30. Slide 30: Investment activity is still limited…

    Investment activity is still limited… New Federal States Berlin Old Federal States 100% Share of total residential investment volume 90% 80% 70% 60% 50% 40% 30% 20% population share New Federal 10% States 0% 2009 2010 2011 2012 2013 2014 2015 2016 YTD Source: Savills 13

  31. Slide 31: …although yields are fairly attractive

    …although yields are fairly attractive avg GIY multi-family housing 12% 10% 8% 6% 4% 2% 0% Source: Bulwiengesa 14

  32. Slide 32: Conclusion

    Conclusion • Rather good economic conditions from a European perspective • Still behind German average in terms of some key indicators but development over the past years has been very positive • Most of the large cities are experiencing population growth • Positive socio-economic development led to

  33. Slide 33: Kontakt

    Kontakt Dra Managing Director Head of Valuation Europe E: dgrahovac@savills.de T: +49 (0) 30 726 165 140 M: +49 (0) 172 377 28 52 Savills Immobilien Beratungs-GmbH Hardenbergstraße 27 10623 Berlin savills.de 16

  34. Slide 34: TAG Claudia Hoyer

    TAG Claudia Hoyer 18 18 COO Dresden, Nagelstraße TAG Immobilien AG | CMD 2016

  35. Slide 35: TAG portfolio East Germany

    19 TAG portfolio East Germany TAG Immobilien AG | CMD 2016

  36. Slide 36: TAG portfolio East Germany – 31 Mar-2016

    TAG portfolio East Germany – 31 Mar-2016 20 20 Portfolio Portfolio WEST EAST 30% 70% Portfolio East West Total as of 31 Mar-2016 residential units Units 54,744 21,395 76,139 Rentable area in sqm 3,220,464 1,333,212 4,553,676 Real estate volume in TEUR 2,442,297 1,027,315 3,469,612 Actual net cold re

  37. Slide 37: TAG portfolio East Germany – milestones

    TAG portfolio East Germany – milestones 21 21 Portfolio Jan Portfolio Portfolio Mar Portfolio WEST 2012 EAST WEST 2015 EAST 66% 34% 30% 70% Acquistions 2012 2013 2014 2015 Units in total: 38,700 Units total: 3,100 Units in total: 8,900 Units total: 5,300 East: 37,800 East: 3,100 East: 7,900 East: 4,

  38. Slide 38: TAG portfolio East Germany – Q1 2016 by region

    TAG portfolio East Germany – 22 22 Q1 2016 by region Region Units Rentable IFRS BV In- Vacancy Actual Re- L-f-l rental L-f-l rental # area TEUR place March net letting growth growth sqm yield 2016 cold rent y-o-y y-o-y incl. % % rent EUR/ % vacancy EUR/ sqm reduction sqm % Berlin 9,923 573,444 491,1

  39. Slide 39: TAG portfolio East Germany – vacancy reduction

    TAG portfolio East Germany – vacancy reduction 23 23 residential units 2013 - 2016 Berlin region Chemnitz region xx% Dresden region Erfurt region TAG Immobilien AG | CMD 2016

  40. Slide 40: TAG portfolio East Germany – vacancy reduction

    TAG portfolio East Germany – vacancy reduction 24 24 residential units 2013 - 2016 Gera region Leipzig region xx% Rostock region TAG Immobilien AG | CMD 2016

  41. Slide 41: TAG portfolio East Germany - rental growth

    TAG portfolio East Germany - rental growth 25 25 residential units 2014 - 2016 in % Berlin region Chemnitz region Dresden region in % Erfurt region TAG Immobilien AG | CMD 2016

  42. Slide 42: TAG portfolio East Germany - rental growth

    TAG portfolio East Germany - rental growth 26 26 residential units 2014 - 2016 Gera region Leipzig region xx% Rostock region TAG Immobilien AG | CMD 2016

  43. Slide 43: TAG return on capex

    27 TAG return on capex TAG Immobilien AG | CMD 2016

  44. Slide 44: TAG return on capex

    TAG return on capex 28 28 Modernization is a key element of TAG’s strategy Methodology  TAG spends approx. €40m p.a. on capex measures; these 1 Incremental revenues can be broken down into = Return on investment Total investment  Modernization during re-letting (tenant turnover) 2 Incremental reve

  45. Slide 45: TAG return on capex - overview

    TAG return on capex - overview 29 29 TAG Total capex FY 2015: EUR 40.1m Single unit program Property based program Share of total capex: c.65% Share of total capex: c.35% Return on total investment: c.30%-35% Return on total investment: c.8%-12% Return on equity invested: c.30%-35% Return on equity

  46. Slide 46: Modernization of vacant flats – Riesa

    Modernization of vacant flats (longer term vacancy) 30 30 Case Study – Riesa „Straße der Freundschaft“ (acquired 2014) Pre modernization Measures Post modernization  Units: 35  Vacancy at acquisition date: 42.4%  Vacancy today: 2.8%  Interior refurbishment  Completed in 2015 Description Calcula

  47. Slide 47: Modernization of vacant flats – Hermsdorf

    Modernization of vacant flats (longer term vacancy) 31 31 Case Study – Hermsdorf „Am Stadion“ (acquired 2014) Pre modernization Measures Post modernization  Units: 33  Vacancy at acquisition date: 55.3%  Vacancy today: 0%  Interior refurbishment  Completed during 2015 Description Calculation (i

  48. Slide 48: Modernization large measures – Erfurt

    Modernization large modernization measures 32 32 Case Study – Erfurt „Am Katzenberg“ (acquired April-2012) Pre modernization Measures Post modernization  Units: 71  Vacancy at acquisition date: 100%  Vacancy today: 0%  Interior and exterior refurbishment  Completed in 2015/2016 Description Calc

  49. Slide 49: Modernization large measures – Bestensee

    Modernization large modernization measures 33 33 Case Study – Bestensee „Friedenstraße“ (acquired April -2012) Pre modernization Measures Post modernization  Units: 30  Vacancy at acquisition date: 50%  Vacancy today: 3%  Interior and exterior refurbishment  Completed in 2015/2016 Description C

  50. Slide 50: TAG value creation potential

    34 TAG value creation potential TAG Immobilien AG | CMD 2016

  51. Slide 51: Value creation potential - Multimedia Immobilien GmbH

    TAG value creation potential - 35 35 Multimedia Immobilien GmbH  Starting situation  existing contracts with various cable carriers for cable TV supply  concentrated on Vodafone Kabel Deutschland and Telecolumbus/Primacom  approx. 50,000 residential units served  pricing between 6.20 and 12.50

  52. Slide 52: Value creation potential - Multimedia Immobilien GmbH

    TAG value creation potential - 36 36 Multimedia Immobilien GmbH Lease network Signal supply level 4 Approval Network Multimedia maintenance & service Immobilien Network modernisation Network GmbH transmission/transfer Portfolio holder Network company Operating costs Supply (direct debit order) Tenan

  53. Slide 53: Value creation potential - Energie & Service GmbH

    TAG value creation potential - 37 37 Energie & Service GmbH  Starting situation  a high proportion of the TAG group’s portfolio is centrally supplied and invoiced by TAG  current market trends, technological innovation and changes to the law offer the opportunity for founding an energy company of

  54. Slide 54: Value creation potential - Energie & Service GmbH

    TAG value creation potential - 38 38 Energie & Service GmbH TAG Immobilien AG Rental contract Existing companies Tenants Utilities invoicing  gradual implementation within the next four years planned Heat supply Services  service to approx. 15,000 units starting Jan 2017  takeover of further ener

  55. Slide 55: Q&A Session

    Q&A SESSION TAG Immobilien AG | CMD 2016

  56. Slide 56: Property Tour

    PROPERTY TOUR TAG Immobilien AG | CMD 2016

  57. Slide 57: TAG portfolio Dresden

    41 TAG portfolio Dresden TAG Immobilien AG | CMD 2016

  58. Slide 58: TAG portfolio Dresden region 2016

    TAG portfolio Dresden region 2016 42 42  Dresden is one of the leading business  TAG serves 6 tenant offices in the Dresden region hubs in Germany with a population of (1x Dresden + 5x greater region) approx. 550,000 inhabitants.  23 asset and property manager are in charge for  Home ownership r

  59. Slide 59: Portfolio Dresden region – Top 5

    Portfolio Dresden region – Top 5 43 43 Cities Units Rentable IFRS BV In- Vacancy Actual Re- L-f-l rental L-f-l rental # area TEUR place March net letting growth growth sqm yield 2016 cold rent y-o-y y-o-y incl. % % rent EUR/ % vacancy EUR/ sqm reduction Dresden, Tichatscheckstraße, Q1 2016 sqm % Gut

  60. Slide 60: TAG portfolio Dresden city

    TAG portfolio Dresden city 44 44  Units Dresden city as of March 2016: Districts TOP 6 Units 1 Striesen 578 2 Leubnitz-Neuostra VISIT 470 4 3 Prohlis 150 5 4 Mickten/Pieschen/Trachau 513 5 Neustadt//Radeberger Vorstadt 312 6 Friedrichstadt/Löbtau 288 1 Other 583 6 Dresden city in total 2,894 33 22

  61. Slide 61: Tour I: Dresden Haenel-Clauß-Straße

    45 Tour I: Dresden Haenel-Clauß-Straße TAG Immobilien AG | CMD 2016

  62. Slide 62: TAG portfolio Dresden – Striesen

    TAG portfolio Dresden – Striesen 46 46 Address: Haenel-Clauß-Str. 17-28, 30-52, Haenel-Clauß-Platz 1-3, Prossener Str. 2-4, Keglerstraße 1-9, Siebe- kingsstr. 5-13, Mansfelder Str. 58-62 Postal Code: 01309 Dresden – Striesen 4 5 Type: Conventional building Year of construction: 1930/1933 1 Refurbish

  63. Slide 63: TAG market development - Dresden

    TAG market development - Dresden 47 47 293,922 residential units (2014)  In all 293,922 residential units (as of 2014) in buildings with residential space Year of  New construction following reunification prompted by attractive tax deduction Share construction options pre 1918 28 %  this led to s

  64. Slide 64: TAG new constructions - Dresden

    TAG new constructions - Dresden 48 48  “Gartenstadt Striesen” project  On the former grounds of a (plant) nursery on Haenel-Clauß-Strasse  Condominiums (90% sold prior to completion)  Purchase price: EUR/sqm 2,800 – 3,150  Rental price: EUR/sqm 10.00  Gross yield: approx. 4% TAG Immobilien AG

  65. Slide 65: Tour II: Dresden Gubener Straße

    49 49 Tour II: Dresden Gubener Straße TAG Immobilien AG | CMD 2016

  66. Slide 66: TAG portfolio Dresden – Prohlis

    TAG portfolio Dresden – Prohlis 50 50 Address: Gubener Straße 25-49 Postal Code: 01237 Dresden – Neustadt 4 5 Type: prefabricated building Year of construction: 1978 1 Refurbished: 1994 6 Acquisition date: July 2011 33 2 2 Units Vacancy Net actual/ Relettingal/ % EUR/sqm EUR/sqm Residential 150 2% 5

  67. Slide 67: Modernization of vacant flats – Gubener Straße

    Modernization of vacant flats (longer term vacancy) 51 51 Case Study – Dresden Gubener Straße (acquired 2011) Pre modernization Measures Post modernization  Units: 150  Vacancy at acquisition date: 3%  Vacancy today: 2%  Interior refurbishment Description Calculation (in EUR thousands) Increment

  68. Slide 68: TAG de-centralized management structure

    TAG de-centralized management structure 52 52 LIMs in TAG regions (Heads of Real Estate Management) Customer service Renting activities  Property management  Re-letting  Enhance high tenant  Vacancy reduction satisfaction and tenant loyalty  Monitor and optimize tenant de-centralized functions

  69. Slide 69: TAG receivables management

    TAG receivables management 53 53 Receivables management Development losses on rent receivables (residential)  TAG in total  Minimize outstanding receivables  2014 2.4 %  2015 2.0 %  Q1 2016 2.0%  Payment reminder and legal action  Dresden/ Gubener Straße (150 units)  2014 4.2%  2015 1.1% 

  70. Slide 70: Tour III: Dresden Max-Klinger-Straße

    54 Tour III: Dresden Max-Klinger-Straße TAG Immobilien AG | CMD 2016

  71. Slide 71: TAG portfolio Dresden – Leubnitz-Neuostra

    TAG portfolio Dresden – Leubnitz-Neuostra 55 55 Address: Max-Klinger-Straße 1-13/ 2-20, Corinthstraße 22-24, Hans-Thoma-Straße 7-10, Postal Code: 01217 Dresden – Leubnitz-Neuostra 4 5 Type: Conventional building Year of construction: 1920 1 Refurbished: 2004 6 Acquisition date: Dec-2012 33 2 2 Units

  72. Slide 72: TAG facility management

    TAG facility management 56 56  TAG Immobilien Service GmbH with 225 employees as of 31 March 2016  Partial / full management of approx. 43,000 residential units (approx. 55 % of the TAG portfolio)  Costs saved by handling the services ourselves in 2015: approx. TEUR 250 p.a.  Further benefits: 

  73. Slide 73: Notes

    NOTES 57 57 TAG Immobilien AG | CMD 2016

  74. Slide 74: Notes

    NOTES 58 58 TAG Immobilien AG | CMD 2016

  75. Slide 75: Notes

    NOTES 59 59 TAG Immobilien AG | CMD 2016

  76. Slide 76: TAG Contacts

    TAG Contacts Martin Thiel Dominique Mann TAG Immobilien AG CFO Head of Investor & Public Relations Steckelhörn 5 Phone: +49 40 380 32-222 Phone: +49 40 380 32-305 20457 Hamburg Fax: +49 40 380 32-388 Fax: +49 40 380 32-388 Phone: +49 40 380 32-0 ir@tag-ag.com ir@tag-ag.com Fax: +49 40 380 32-388 www

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