Peach Property Group Ag · SIX:PEAN

Peach Property — Investor Presentation (November 2019)

34 slides from Peach Property's investor presentation, November 2019

1. Slide 1: Company Presentation November 2019

   Option 1 Company Presentation November 2019

2. Slide 2: Disclaimer

   Disclaimer These materials contain forward-looking statements based on the currently held beliefs and assumptions of the management of Peach Property Group AG, which are expressed in good faith and, in their opinion, reasonable. Forward- looking statements involve known and unknown risks, uncertaint

3. Slide 3: Agenda

   1. Introduction to Peach Property 2. Company highlights 3. Financials 4. Appendix 3

4. Slide 4: German residential player in B-cities with market value >EUR 1bn

   German residential player in B-cities with market value >EUR 1bn and unique tenant management About Peach Property Group Key financial data CHF mm 30.06.2019 30.06.2019 31.12.2018 • Peach is a Swiss-listed company investing in real estate with PF GRANDE a focus on residential property in Germany (98

5. Slide 5: Peach Properties

   Peach Properties German residential properties in carefully selected locations 5

6. Slide 6: Strong track record and history as a German residential player

   Strong track record and history as a German residential player Evolution of Peach Developer focus Gradual shift towards investment portfolios in German residential real estate GRANDE acquisition • 1999: Foundation through Wolfensberger family • 2011: Acquisition of first investment portfolio in Muns

7. Slide 7: GRANDE acquisition bolsters Peach's strong portfolio to > CHF 1bn

   GRANDE acquisition bolsters Peach’s strong portfolio to > CHF 1bn Peach per 30.6.2019 PF GRANDE per 30.06.2019 Acq. parameters Apartments 8,775 apartments 12,450 apartments (+42%)  Peach made an unsolicited offer for subportfolios of Lettable area 599,600 sqm 830,000 sqm (+39%) sellers which are a

8. Slide 8: Pro-forma portfolio is well-located and with relevant scale

   Pro-forma portfolio is well-located and with relevant scale Essen Munster 189 res. units 376 res. units since 2011 Split by location (PF GRANDE)1 Bochum II Fassberg Thuringia 172 res. units since 2017 287 res. units since 2016 Switzerland 3% Lower Saxony 2% Bochum Ostwestfalen 462 res. units 1,247 r

9. Slide 9: Company highlights

   1. Introduction to Peach Property 2. Company highlights 3. Financials 4. Appendix 9

10. Slide 10: Peach highlights

    Peach highlights Focus on highly resilient German residential property market, 1 with our focus markets exhibiting solid growth and low rent volatility Attractive and diversified portfolio with market value of CHF 1.1 2 billion following the GRANDE acquisition 3 Stringent investment criteria and acq

11. Slide 11: Strong housing sector fundamentals

    1 Strong housing sector fundamentals Real estate specific Largest housing market in Europe… …with a strong rental culture Forecast of total population per country in 2020 (mm) 1 Percentage of rented apartments as % of total stock2 Forecast of total households per country in 2020 (mm) 2007A 2012A 201

12. Slide 12: German affordable housing is an extremely stable market

    German affordable housing is an extremely 1 stable market… Real estate specific Low, stable vacancy rate through the cycle… … with exceptionally high average tenancy length3 German residential vacancy rate¹ German office vacancy rate² Peach average tenancy 12.0% length ~9.0 yrs5 8.0 yrs 10.0% 8.0% 5

13. Slide 13: B-cities offer an attractive risk/return profile

    … especially in B-cities that offer an attractive 1 risk/return profile B-cities Multiplier in B-cities significantly lower… … offering an attractive initial return profile Average multiplier multi-family buildings1 Net initial yield 2017/2018 in German Secondary Locations 1 A cities B cities 8.0% 3

14. Slide 14: Almost 60% of portfolio in NRW

    Almost 60% of portfolio in NRW – Germany’s 1 economic engine NRW deep dive NRW as key economic regions in Germany… …and home to a high number of large German corporates  Key metropolitan area in Germany, and one of the largest in Europe (17.9m inhabitants) Bielefeld  Germany’s economic hub, genera

15. Slide 15: Sizeable high-quality platform with market value in excess of ~EUR 1bn

    Sizeable high-quality platform with market value 2 in excess of ~EUR 1bn Isolated effect of GRANDE acquisition1 Portfolio appraisal metrics (H1 2019) Market value in CHF mm 324.3 1,117.6 Gross yield at target rent 6.37% 793.3 Discount rate2 4.01% EUR 6.02 per sqm Monthly market rent (vs. EUR 5.08 cu

16. Slide 16: Portfolio exhibits attractive rent increase potential

    Portfolio exhibits attractive rent increase 2 potential... Potential for increasing rents in existing portfolio (excl. GRANDE)1 EUR/sqm Average in-place rent New tenancies rent 2019 Market rent² New tenancies vs. average in-place rent +13% +9% +10% +13% +9% +20%  Attractive rent 7.43 potential in a

17. Slide 17: Rent upside from market placement of strategic vacancies

    ... allowing for significant rent upside from the 2 market placement of Peach’s strategical vacancies Breakdown of vacant apartments (as of H1 2019, excl. GRANDE) % vacancy based 10.7% Factual vacancy (c. 2.9%)1 on total units 940 63 6.3% 64 Peach is 129 556 reducing vacancy 128 by approx. 20-40 apt

18. Slide 18: Structured acquisition process

    Structured acquisition process that result in 3 strategically sound acquisitions...  Almost exclusive focus on off-market transactions Sourcing based on strong network in Germany  Swift execution Impeccable reputation  Valued partner respecting confidentiality around deal terms Evaluation of arou

19. Slide 19: Defined acquisition strategy leveraging local expertise

    … within a defined acquisition strategy that 3 leverages on local expertise Population density Germany (2017)1  Portfolios with 300 – 1,000 apartments, frequently below “radar screen” of large REITs or institutional buyers, offering limited competitive tension  Focus on NRW and adjacent federal st

20. Slide 20: Peach Points: Client service excellence through regional service hubs

    Peach Points: Client service excellence delivered 4 through regional service hubs Regional service hubs Digital capabilities Proven and time-tested service model that forms the basis for Peach’s strong perception by tenants, ultimately resulting in vacancy reduction and rent optimisation 20

21. Slide 21: Fully digitalized scalable tenant service model

    360 degree tenant service model: strong digital 4 capabilities embedded in multi-region service hubs Tenants with full multi-channel access: • Online (24/7): App, Web Portal, Mail • Tenants Offline: Telephone, Peach Points Property Management in Peach Points • All notifications recorded in ticketing

22. Slide 22: Strong track record of delivery and performance improvements

    Strong track record of delivery and performance 5 improvements… Financial values in CHF mm Portfolio KPIs Change Portfolio KPIs Portfolio KPIs Portfolio KPIs Portfolio KPIs H1 2019 since FY FY 2017 FY 2018 H1 2019 2017 (incl. GRANDE) Market Value 520.3 747.2 793.3 1,117.6 + 115% (in CHF mm) (13% dev

23. Slide 23: Clear path to further deleveraging

    5 …with clear path to further deleveraging PF GRANDE PF GRANDE Ordinary course of business Q4 2019 H1 2020 H1 2020 profit and revaluation Asset acquisition of CHF Sale of development assets (SUI) FY19 profit and revaluation Significant top line growth 253mm ~CHF 70mm (including existing debt) throug

24. Slide 24: Internalized strong platform

    6 Internalized strong platform...  Access to off-market deals given extensive network  Institutional investors, incentivized sellers, private owners Capital markets  Institutional investors debt / equity, private investors Asset Economic Sourcing Modernization Letting management performance  Rig

25. Slide 25: Experienced team of operators with strong track record

    ... managed by an experienced team of operators 6 with strong track record Dr. Thomas Wolfensberger Dr. Marcel Kucher Chief Executive Officer Chief Financial Officer / Chief Operating Officer • Responsible for corporate strategy, capital markets, portfolio • Responsible for finance, operations, lega

26. Slide 26: Financials

    1. Introduction to Peach Property 2. Company highlights 3. Financials 4. Appendix 26

27. Slide 27: Historical financial evolution

    Historical financial evolution Total revenue (CHF mm)1 EBITDA (CHF mm)3 % growth vs. last period % margin 24% 52% 3% 41% 44% 60% 57% 65% 64% 91.3 92.7 71.3 67.7 60.2 51.5 48.6 44.5 37.2 43.1 33.6 28.8 2016 2017 2018 H1 2018 H1 2019 LTM 2016 2017 2018 H1 2018 H1 2019 LTM Gross profit – rental busines

28. Slide 28: Robust financial development driven by restructuring

    Robust financial development driven by operational and financial restructuring Stable rental income profile… … as well as NAV growth… Rental income (CHF mm) % LfL rental growth IFRS NAV (CHF mm) 400 60 2.5% 350 43.9 300 40 31.7 28.6 250 377.5 23.2 200 301.3 316.6 310.9 20 16.8 258.5 29.6 150 16.3 19

29. Slide 29: Illustrative Funds from Operations

    Illustrative Funds from Operations Illustrative Funds from Operations Capex investments  Regular maintenance work is (CHF mm) • Target rental operating margin to increase from c. 70% to 80% expensed through P&L • Supported by mid-term CHF 60mm actual rental income target  2.5% Lfl rental income gr

30. Slide 30: Financial policy

    Financial policy • Mid-term target 55% net market value LTV • Mid-term guidance FFO I yield of 3-4% on IFRS NAV FINANCIAL POLICY CONSIDERATIONS • Target average debt maturity profile > 4 years • Maintain ample liquidity with minimum CHF 20mm cash on balance sheet • We will consider issuing equity to

31. Slide 31: Appendix

    1. Introduction to Peach Property 2. Company highlights 3. Financials 4. Appendix 31

32. Slide 32: Historical Income Statement

    Historical Income Statement In TCHF 2016 2017 2018 H1 20181 H1 20191 LTM1 Comments Rental income 1 8,899 16,264 29,644 13,797 19,285 35,132 Valuation gains from investment properties 33,733 42,620 59,425 27,341 24,866 56,950 1 Rental income up 82.3% in 2018 on Profit on disposal of investment proper

33. Slide 33: Historical Balance Sheet

    Historical Balance Sheet In TCHF 2016 2017 2018 H1 20181 H1 20191 Comments Cash and cash equivalents 12,952 49,157 53,484 91,573 32,893 Total receivables 13,214 7,586 5,772 5,729 4,783 Prepaid expenses 325 418 765 699 4471 1 Contractual assets of CHF43.5mm Contract assets 1 492 43,489 0 1671 1352 in

34. Slide 34: Historical Cash Flow Statement

    Historical Cash Flow Statement H1 20181 H1 20191 Comments In TCHF 2016 2017 2018 Result before tax 17,048 51,548 56,874 30,653 25,351 Depreciation & amortization 177 160 197 125 244 1 Improved working capital Valuation result of investment properties/valuation losses on development (29,960) (40,880)

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