Redefine Properties Limited · JSE:RDF
Redefine Properties — Merger or Acquisition (March 2016)
29 slides from Redefine Properties's merger presentation, Mar 1, 2016
Slide 1: Acquisition of Echo Prime Properties BV
REDEFINE PROPERTIES LIMITED ACQUISITION OF ECHO PRIME PROPERTIES BV 1 MARCH 2016
Slide 2: Agenda
AGENDA Section 1 TRANSACTION OVERVIEW Marc Wainer (Executive Chairman) Section 2 WHY ECHO PRIME PROPERTIES Marc Wainer (Executive Chairman) Section 3 PORTFOLIO REVIEW Marc Wainer (Executive Chairman) Section 4 WHY REDEFINE Przemek Krych & Maciej Dyjas (Griffin Real Estate) Section 5 CLOSING Marc Wai
Slide 3: Section 1: Transaction Overview
Section 1 TRANSACTION OVERVIEW Marc Wainer
Slide 4: A Market Making €1.2 Billion Property Transaction
A MARKET MAKING €1.2 BILLION PROPERTY TRANSACTION • Proud to announce the largest ever single transaction of income generating real estate assets in CEE • Also the largest ever real estate investment transaction in Poland • Redefine has acquired a significant interest in Echo Prime Properties from E
Slide 5: Strong Fundamentals Underpin the Transaction
STRONG FUNDAMENTALS UNDERPIN THE TRANSACTION • Spread across Poland • 10 Retail and 8 office properties with total GLA of 428 158 m² • Retail 77%, by value, of total portfolio • High quality and modern assets with solid property fundamentals valued at €1.2 billion • Initial income yield 6.0% • Retur
Slide 6: Transaction Mechanics
TRANSACTION MECHANICS • An equity interest of 75% has been acquired in Echo Prime Properties • It is intended that an immediate on-sale will reduce the holding to approximately 50% • Total consideration consists of: 100% 75% 50% (€ million) (€ million) (€ million) Property portfolio 1,188 Less third
Slide 7: Section 2: Why Echo Prime Properties
Section 2 WHY ECHO PRIME PROPERTIES Marc Wainer
Slide 8: Poland | Highly Attractive Macroeconomic Backdrop
POLAND | HIGHLY ATTRACTIVE MACROECONOMIC BACKDROP Key factors Key statistics • One of the fastest growing economies Europe 2014A 2015E 2016F 2017F • 3.5% GDP growth in 2015 Priv. Cons growth (%, yoy) 2.5 3.0 4.0 3.9 GDP growth • Growth forecast expected to continue at 2015 pace • Driven by strong do
Slide 9: Why Poland?
WHY POLAND? Attractive investment destination with a large stable and liquid real estate market The largest country and market in the CEE region… … and the highest growth in CEE underpinned by significant further wealth convergence potential to the EU Largest EU development fund beneficiary: Poland
Slide 10: Why Poland? A Real Estate Growth Market
WHY POLAND? A real estate growth market …and the highest growth in CEE underpinned by significant further wealth Solid market liquidity in Poland convergence potential to the EU GDP per capita 10.1 7.9 6.8 14.6 13.8 5.5 Real estate investment volumes in Poland (split by property type) (€ ’000, 15E)
Slide 11: Why Poland? Liquid Real Estate Market
WHY POLAND? Attractive investment destination with a large stable and liquid real estate market Liquid polish real estate sector in the focus of international investors Solid market liquidity in Poland Potential for Eurozone accession while commercial real estate values, Poland now considered part o
Slide 12: Why Echo Prime Properties? A Unique Opportunity
WHY ECHO PRIME PROPERTIES? A unique opportunity • Pure play Polish commercial real estate portfolio of yielding properties with large critical mass • Attractive risk-return profile with secure yield supported by strong operating cash flow profile and no development risk • Significant embedded growth
Slide 13: Why Echo Prime Properties? Diversified Asset Base
WHY ECHO PRIME PROPERTIES? Diversified asset base • Blue chip global tenant base with strong turnover growth and no large single tenant exposure • Retail assets are let out to leading retailers with international brands representing 61% of tenant base by income • Office space leased to blue chip ten
Slide 14: Opportunities to Grow the Platform
OPPORTUNITIES TO GROW THE PLATFORM Additional growth and value upside backed by high quality developer (Echo) • ROFO on over €500 million properties currently being developed in advanced stage by Echo • Over 80% expected to be delivered within the next 2 years • All projects are already kicked-off a
Slide 15: Scale and Critical Mass Platform
SCALE AND CRITICAL MASS PLATFORM Unique opportunity to invest in the leading commercial real estate platform in Poland, comprised of only yielding assets Focus on prime retail and prime office in leading Polish cities Leased NOI split by type Leased NOI split by city Others⁴ Office 17% Szczecin 26
Slide 16: Scale and Critical Mass Platform
SCALE AND CRITICAL MASS PLATFORM High quality and modern properties well-diversified across leading Polish cities characterised by strong purchasing power Properties located in prime locations in Poland Yielding asset split (area split by city)¹ Office Poznan Belchatow Purchasing power as Szczecin S
Slide 17: Strong Portfolio and Asset Management Expertise
WHY ECHO PRIME PROPERTIES Strong portfolio and asset management expertise • Platform covering the entire real estate value chain • Founded in 1994, Echo Investment is a recognized market leader in the Polish commercial and residential property development and investment space • Experienced portfolio
Slide 18: Seasoned Local Partner with Aligned Interests
WHY ECHO PRIME PROPERTIES Seasoned local partner with aligned interests • Backed by highly reputable international investors • International real estate investors with a strong track record • Oaktree has been a major investor in Poland for almost a decade • PIMCO (whose fund is a current shareholder
Slide 19: Section 3: Portfolio Review
Section 3 PORTFOLIO REVIEW Marc Wainer
Slide 20: Poland | Real Estate Market
POLAND | REAL ESTATE MARKET Overview Average European Prime Office Yield vs. Benchmarks (%) • Increased interest in the Poland and the CEE region has provided increased liquidity • As returns from core European markets continue to become increasingly tight, the CEE region will attract further capita
Slide 21: Portfolio Overview
PORTFOLIO OVERVIEW GLA Valuation Property name Location Sector (m2) (EUR’ million) Pasaz Grunwaldzki Pl. Grunwaldzki 22, Wrocław Retail 49 402 233 Galaxy Al. Wyzwolenia 18-20, Szczecin Retail 41 297 201 Galeria Echo Kielce ul. Świętokrzyska 20, Kielce Retail 77 400 206 Galeria Amber Kalisz ul. Górno
Slide 22: Poland | Retail Real Estate Market
POLAND | RETAIL REAL ESTATE MARKET 11 Shopping Centre Yields 10 9 8 % 7 6 5 4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CEE excl Russia Europe Western Europe 12 Polish Retail Stock 10 0.6 Sqm. millions 8 6 9.3 4 2 0.4 0.3 2.1 1.4 0.2 0 Shopping Centres Stand-alone Re
Slide 23: Retail Portfolio Overview
RETAIL PORTFOLIO OVERVIEW Although Warsaw is still by far the largest retail market in Poland, other cities are becoming increasingly more popular with investors looking for locations offering stable rents and high occupancy levels Overview • Polish market noted increased activity among foreign reta
Slide 24: Retail Portfolio Overview
RETAIL PORTFOLIO OVERVIEW Top 3 retail properties represents 70% of retail portfolio by value NOI Annualised Indication of value Footfall Property name Retail GLA (m²) Vacancy (%) (EUR.million) WALT (years) (EUR.million) (12month rolling) Pazaz Grunwaldizki 49 402 2.3% 14 3.6 233 9 851 911 Galaxy 41
Slide 25: Office Portfolio Overview
OFFICE PORTFOLIO OVERVIEW Polish office real estate market offers stable yields at attractive spreads and solid real estate market fundamentals Overview • At the end of 2014 the total office stock (in nine major cities) has been estimated at 7.4 million m² • During the first half of 2015 developers
Slide 26: Office Portfolio Overview
OFFICE PORTFOLIO OVERVIEW Top 3 office properties represents 64% of office portfolio by value NOI Annualised Indication of value Property name Vacancy (%) (EUR.million) WALT (years) (EUR.million) Malta Office Park 6.0% 5 2.4 64 Park Rozwoju 43.1% 4 4.3 73 A4 Business Park 0.0% 3 5.5 37 Source: JLL a
Slide 27: Partnering Echo Offers Significant Growth Opportunities
PARTNERING ECHO OFFERS SIGNIFICANT GROWTH OPPORTUNITIES Q22 building with key features 155m Height without mast 195m Height with mast 53 000m² GLA 348 Parking spaces 1 950m² Floor plate +2 to +13 1 000m² Floor plate +17 to+39 © Redefine Group 27
Slide 28: Section 4: Why Redefine
Section 4 Why Redefine Przemek Krych & Maciej Dyjas (Griffin Real Estate)
Slide 29: Closing and Thanks
Section 5 Closing and Thanks Marc Wainer
Redefine Properties — Merger or Acquisition (March 2016) on 6ix