Slide 1: Q3 2017 Financial Results Presentation
Berlin Nuremberg Dortmund Leipzig Frankfurt Q3 2017 FINANCIAL RESULTS PRESENTATION Amsterdam Munich
Slide 2: Table of Contents
TABLE OF CONTENTS CORPORATE ACHIEVEMENTS HIGHLIGHTS FINANCIAL RESULTS & CAPITAL MARKETS ACTIVITY OPERATIONS AND PORTFOLIO APPENDIX 2
Slide 3: Corporate Achievements
CORPORATE ACHIEVEMENTS Owing to its strong market capitalization and trading volume, Aroundtown is a Aroundtown received the strong MDAX candidate, with inclusion set as a target EPRA BPR Gold award in September 2017, the highest standard for Trading financial reporting Aroundtown was …and included
Slide 4: Corporate Achievements
CORPORATE ACHIEVEMENTS LARGEST CAPITAL MARKETS ISSUER IN RAPID PORTFOLIO GROWTH 2016 AND 2017 (INVESTMENT PROPERTY IN € BN) Straight Shareholder Equity CAGR 2015 - (perpetual Dec 2017 Bonds Equity notes) 8. 91% 8. 8 Total: Total: Total: 4 €2.2 billion €1.2 billion €720 million €700 million €450 mill
Slide 5: Financial Highlights – 1-9/2017
FINANCIAL HIGHLIGHTS – 1-9/2017 Net Rental Adjusted Net Profit FFO I income EBITDA €1.1bn €320m €303m €204m FFO I FFO I per share FFO yield 1) per share Dec run rate €0.26 6% €0.36 Dividend per share Div yield1) Run rate 3.9% €0.23 Investment EPRA NAV EPRA NAV Total assets LTV incl. perpetual notes
Slide 6: Financial Results & Capital Market Activity
FINANCIAL RESULTS & CAPITAL MARKET ACTIVITY 6
Slide 7: Profit and Loss
PROFIT AND LOSS Net rental income (in €M)* 1-9/2017 1-9/2016 € million Net rental income 320.3 159.3 of which relating to properties marked for disposal (27.6) - Net rental income, recurring long-term 292.7 159.3 Rental and operating income 373.7 183.1 Revaluations, capital gains and other income 97
Slide 8: Adjusted EBITDA
ADJUSTED EBITDA € million 1-9/2017 1-9/2016 Operating profit 1,368.3 871.0 Depreciation and amortization 1.7 1.0 subtracted as these profits EBITDA 1,370.0 872.0 include AT’s share in non- operational profits Revaluations, capital gains and other income (976.1) (588.1) generated by the equity- Share
Slide 9: FFO I
FFO I € million 1-9/2017 1-9/2016 FFO I annualized (in €M) Adjusted EBITDA commercial portfolio 261.8 130.5 Finance expenses (48.0) (32.9) Current tax (26.5) (12.9) Contribution to minorities (7.2) (4.3) FFO I commercial portfolio 180.1 80.4 FFO relating to properties marked for disposal (16.4) - FF
Slide 10: Total Assets
TOTAL ASSETS € million Sep 2017 Dec 2016 Investment property 8,400 5,016.2 High balance of cash Equity accounted-investees, holding in GCP SA 1,522.3 1,316.7 and liquid assets Equity accounted-investees, other 363.9 240.3 enable Aroundtown to Non-current assets 10,855.3 6,988.9 pursue attractive Ass
Slide 11: EPRA NAV
EPRA NAV Sep 2017 Dec 2016 EPRA NAV (€ bn) € million Per share € million Per share NAV per the financial statements 6,471.2 3,941.1 Equity attributable to perpetual notes investors (1,203.5) (478.3) NAV excluding perpetual notes 5,267.7 3,462.8 Effect of in-the-money convertible bonds 292.9 394.0 Fa
Slide 12: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE Debt maturity profile 6.9 years average maturity 1.7% cost of debt Loan-to-Value Strong cover ratios (9M 2017) Unencumbered assets 12 * including the equity capital increase in October 2017 ** assuming also conversion of Series B and Series C convertible bonds which ar
Slide 13: Financial Policy and Investment Grade Rating
FINANCIAL POLICY AND INVESTMENT GRADE RATING Financial risk profile Aroundtown financial policy: 1 2 3 4 5 6 Minim Modest Intermediate Significant Aggre High al ssive Levera Strive to achieve A- global rating in the ged long term 1 aaa/ bbb- Business risk profile Excellent aa a+/a a- bbb aa+ /bb+ (D
Slide 14: Capital Market Activity
CAPITAL MARKET ACTIVITY Equity and bond bookrunners Largest European real estate issuer in 2016 and 2017 YTD 14
Slide 15: Operations and Portfolio
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Slide 16: Top Tier German/NL Cities (Sep 2017)
TOP TIER GERMAN/NL CITIES (SEP 2017) Group Regional distribution* (by value) inhabitants per sqkm (2013) Sep 2017 In-place rent* 7.9 €/sqm Sep 2017 EPRA Vacancy* 8.6% 16 * accounting for 36% holding in GCP
Slide 17: Commercial Investment Properties (Sep 2017)
COMMERCIAL INVESTMENT PROPERTIES (SEP 2017) Portfolio breakdown per asset type Investment Area EPRA vacancy Annualized net In-place rent Value per sqm Rental yield properties (in 000' sqm) rent (in €M) per sqm (in €) (in €) (in €M) Office 5,027 2,234 10.5% 270 10.7 2,250 5.4% Hotel 1,566 709 3.7% 76
Slide 18: Commercial Portfolio – Potential to Come
COMMERCIAL PORTFOLIO – POTENTIAL TO COME Commercial current annualized Rental Income vs. Commercial in-place rent compared to market rent prices Market potential including vacancy reduction Large upside potential from rent increases to market levels with very limited downside risk Long lease terms w
Slide 19: Top Tier Cities (Sep 2017)
TOP TIER CITIES (SEP 2017)* Asset Type Breakdown accounting for 36% holding in GCP Residential geographical breakdown Commercial geographical breakdown 19 * all breakdowns are by value
Slide 20: Top Tier Cities within Asset Classes (Sep 2017)
TOP TIER CITIES WITHIN ASSET CLASSES (SEP 2017)* Office geographical breakdown Commercial asset type breakdown Hotel geographical breakdown Logistic/Wholesale/Other Retail geographical breakdown geographical breakdown 20 * all breakdowns are by value
Slide 21: Quality Locations in Berlin Inner City
QUALITY LOCATIONS IN BERLIN INNER CITY 87% of the commercial portfolio is located in top neighborhoods including the inner city, strongly benefiting from the unique dynamics and growth of Berlin’s most in demand neighborhoods, business areas and tourist centres 13% of the commercial portfolio is wel
Slide 22: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE Limited dependency on single tenants due to large tenant base of over 2,600 tenants Long lease terms with a WALT of 7 years as of December 2017 22
Slide 23: Highly Performing Hotel Locations
HIGHLY PERFORMING HOTEL LOCATIONS hotels by category (by value) Many of the hotel assets are held through a 98% stake in Prime City Investment Well diversified portfolio of branded hotels totaling €1.6 bn and 709k sqm as of September 2017 High proportion (82%) in 4 star hotels, meeting the rising ma
Slide 24: Appendix
bei APPENDIX
Slide 25: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Covering Analysts Analyst Research Target Price Analyst recommendations are all set to Buy Index inclusions: - SDAX - STOXX Europe 600 25 - GPR
Slide 26: Aroundtown's Share Price Performance
AROUNDTOWN‘S SHARE PRICE PERFORMANCE Share performance since initial placement of capital (13.7.2015) The share Frankfurt Stock Placement Exchange Share issue price development Shareholder structure (fully diluted) (Prime Standard) 13.07.2015 First equity issuance (€3.2 per share) Number of shares (
Slide 27: Aroundtown's Bond Performance
AROUNDTOWN’S BOND PERFORMANCE Convertible bond Series C performance since placement (15.12.2015) Spread over mid-€-swap for straight bonds A and D, remaining 4.5 years Spread over mid-€-swap for Euro Perpetual Notes 27
Slide 28: Strategy and Business Model
STRATEGY AND BUSINESS MODEL STRONG CASH FLOW, QUALITY Quality assets PORTFOLIO WITH GROWTH top tier cities, POTENTIAL Germany/NL REPOSITIONING AND Healthy capital OPERATIONAL Creation Attractive IMPROVEMENTS structure with a Keep improving the acquisitions below strong & company rating market & belo
Slide 29: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Proven business model and successful track-record Well allocated assets in the top cities of Germany and NL Highly cash generative portfolio resulting from successful repositioning Proven operational performance, increase rents and occupancy and extend leases Signif
Slide 30: Full Control over the Entire Operational Value Chain
FULL CONTROL OVER THE ENTIRE OPERATIONAL VALUE CHAIN • signs off on finalized rent contracts • Rental and marketing responsibility • monitors performance Head of • Lease management Operations • Contract negotiations • WALT management • 24/7 tenant service • Capex analysis Legal • Performance monitor
Slide 31: Lease Management as Drivers for Growth
LEASE MANAGEMENT AS DRIVERS FOR GROWTH – ACHIEVING LONG-TERM GROWING CASH FLOWS Localized one team touchpoint approach – building strong and long-term relationships with tenants. Teams become specialized with the individual asset, the tenants and the regional markets – proactively meeting tenants on
Slide 32: Rental and Marketing as Drivers for Additional Growth
RENTAL AND MARKETING AS DRIVERS FOR ADDITIONAL GROWTH Tailor made rental and marketing strategy on an asset basis Comprehensive vacancy analysis – conducting usability studies/letting concepts of vacant spaces in order to attract a large pool of diverse tenants Optimizing the usage of each asset and
Slide 33: Management
MANAGEMENT CEO and CFO CEO of Aroundtown. Previously, was the CEO of a leading international investment conglomerate with over $8 billion of assets. Since 2006 in Shmuel the management of Aroundtown and its subsidiaries. BA in Economics and Accounting, Law and CPA. Mayo CFO of Aroundtown. Previously
Slide 34: Office, Retail and Hotel Management Team
OFFICE, RETAIL AND HOTEL MANAGEMENT TEAM Head of commercial operations. Before joining the Group he was a board member of Strabag AG and CEO of Raiffeisen evolution, responsible for project Markus development on 11 European countries with a development volume of more than €2bn. Mr. Neurauter holds a
Slide 35: Regional Market Overview
REGIONAL MARKET OVERVIEW Hamburg ► GDP growth1: 2.4% ► Migration balance2: 0.9% Bremen ► Population density3: 2,366 per km2 ► GDP growth1 : 3.5% ► Migration balance2: 0.9% ► Population density3: 1,709 per km2 Hannover ► GDP growth (NI) 1: 2.9% NRW ► Migration balance2: 1.4% ► GDP share 2015 : 21% of
Slide 36: Germany – Growing and Strong Economy
GERMANY – GROWING AND STRONG ECONOMY German GDP Development (€ trillion) Debt/GDP 2016 Budget Surplus/Deficit 2016 Source: eurostat, forecast based on the European Commission, Spring 2017 forecast Source: Eurostat Source: eurostat Germany has a growing GDP paired with a strong budget discipline… Peo
Slide 37: German Office Market: Low Supply and Strong Demand
GERMAN OFFICE MARKET LOW SUPPLY AND STRONG DEMAND… Office employment outpaces office space** Low addition of new office space** **In Top 7 **In Top 7 locations +Regional according to DG HYP: 12 locations Berlin, Munich, Frankfurt, according to Cologne, Hamburg, DG HYP: Düsseldorf, Stuttgart Hannover
Slide 38: German Office Market: Increasing Rents and Occupancy
GERMAN OFFICE MARKET …LEAD TO INCREASING RENTS AND OCCUPANCY …reducing vacancy… …across Germany… Vacancy rate in % (left) Office workers in thousands (right) …putting upward pressure on rents Office prime rent per €/sqm Increase in prime rents from 2006 till 2016 in Percent Prime rents yoy in % (lef
Slide 39: Netherlands Office Market Showing Favourable Developments
NETHERLANDS OFFICE MARKET SHOWING FAVOURABLE DEVELOPMENTS Current trends show very favourable market developments… Office Employment Office take-up 2015 -> 2016 4.6% H1 2016 -> H1 2017 13% Vacant space 7.7% Passing rents* 2016 – H1 2017 2016 – H1 2017 0.1% *Excl. incentives Total Office Space 1.9% 2
Slide 40: Germany Wholesale and Logistics Benefiting from Improved Market Conditions
GERMANY WHOLESALE AND LOGISTICS BENEFITING FROM IMPROVED MARKET CONDITIONS Strong consumer climate provides strong benefits to wholesale and logistics, economic metrics such as Germany’s strong export position provide further benefits, increasing take-up …H1 2017 logistic take-up: Increasing take-up
Slide 41: German Retail Market
GERMAN RETAIL MARKET Growth of wages and consumer prices Increase in real disposable income Consumer climate is strong Retail rents doubled within 20 years… …especially in Berlin 41 Source: DG HYP German Real Estate Market report/ DG HYP Main Regional Real Estate Markets report
Slide 42: German Hotel Market Overview
GERMAN HOTEL MARKET OVERVIEW Overnight stays across all hotel accommodation types Transaction volume of hotel properties € millions millions RevPar development Rated hotels by category Insolvencies in the accommodation services sector # of bankruptcies Total: 8,521 *Jan 2017 Source: Smith Travel Res
Slide 43: Macro Fundamentals Support GCP
MACRO FUNDAMENTALS SUPPORT GCP Population development Population density 2016 Annualized growth in rent price index* (persons per sqkm) Source: destatis 2012-2015, forecast based European Commission spring 2017 forecasted grow th rates Source: destatis From 1991 to 2015 the amount of households incr
Slide 44: Hamburg Dortmund Hannover
Hamburg Dortmund Hannover Amsterdam Leipzig Frankfurt Berlin Baden-Baden Rheinsberg 44
Slide 45: Frankfurt Mainz Düsseldorf
Frankfurt Mainz Düsseldorf Rotterdam Nuremberg Stuttgart 45
Slide 46: Berlin Potsdam Munich
Potsdam Berlin Cologne Munich Amsterdam Hamburg Utrecht Munich Dresden 46
Slide 47: Disclaimer
DISCLAIMER IMPORTANT: This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute
Slide 48: Rotterdam Frankfurt Munich
Rotterdam Frankfurt Munich Leipzig Amsterdam Berlin 48