Aroundtown Sa · XETR:AT1
Aroundtown Sa — Q3 2019 Earnings Presentation
51 slides from Aroundtown Sa's earnings presentation, November 2019
Slide 1: Aroundtown Q3 2019 Financial Results
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Slide 2: Table of Contents
TABLE OF CONTENTS Berlin HIGHLIGHTS Munich FINANCIAL RESULTS Cologne OPERATIONS AND PORTFOLIO GUIDANCE Frankfurt APPENDIX Amsterdam Paris 2
Slide 3: Highlights
HIGHLIGHTS €3.1bn YTD signed deals +4.3% total like-for-like net rent growth Adjusted EBITDA +26% YoY at €557m High quality assets, primarily offices and hotels +2.4% from in-place rent growth FFO I +25% YoY at €371m +1.9% from occupancy growth FFO I per share +10% YoY at €0.32, reflecting a 5.6% yi
Slide 4: Financial Results
FINANCIAL RESULTS Berlin Frankfurt 4
Slide 5: Profit and Loss
PROFIT AND LOSS 1-9 / 2019 1-9 / 2018 Net rental income, recurring long-term* (in €m) in € millions REVENUE 650.7 539.8 CAGR RECURRING LONG-TERM NET RENTAL INCOME 548.3 439.7 +57% 2016-Sep 2019 808 PROPERTY REVALUATIONS, CAPITAL GAINS AND OTHER INCOME 1,066.0 1,244.6 Annualized 731 Share in profit f
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA 1-9 / 2019 1-9 / 2018 in € millions Subtracted as these profits include AT’s share in Operating profit 1,766.3 1,799.5 non-operational profits generated by the equity Total depreciation and amortization 1.3 5.9 accounted investees EBITDA 1,767.6 1,805.4 Property revaluations, capital
Slide 7: FFO I & II
FFO I & II 1-9 / 2019 1-9 / 2018 in € millions ADJUSTED EBITDA COMMERCIAL PORTFOLIO, FFO I PER SHARE (in €) DIVIDEND PER SHARE (in €) 459.4 359.8 RECURRING LONG TERM Finance expenses1) (106.2) (81.8) CAGR CAGR Current tax expenses (41.9) (32.9) +22% 0.43 +23% 2016-FY 2019 0.39 2016-FY 2019 0.283) Co
Slide 8: Total Assets
TOTAL ASSETS TOTAL ASSETS (in €bn) Additions in key strategic locations CAGR +51% Solid like-for-like gains 2016- Sep 2019 25.0 19.0 Extensive deal sourcing BILLION 13.8 SIGNED 2019 YTD Accretive growth through acquisitions 8.1 of which €2.6 billion is taken over in 9M 2019, at a multiple of 22x Int
Slide 9: EPRA NAV
EPRA NAV Sep 2019 Dec 2018 € millions Per share € millions Per share EPRA NAV (€m) NAV PER THE FINANCIAL STATEMENTS 13,034.1 9,944.3 Equity attributable to perpetual notes investors (2,466.2) (1,547.7) CAGR NAV EXCLUDING PERPETUAL NOTES 10,567.9 8,396.6 +48% Fair value of derivative financial instru
Slide 10: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE Debt Maturity Profile* Financing Sources Mix 1,000 Straight bonds 31% Millions 900 37% 39% 800 Loans & borrowings 9% 700 2% 6% 4% 600 Convertible Bonds 500 58% 57% 57% 400 Equity 300 200 Perpetual notes 100 Dec 2017 Dec 2018 Sep 2019 0 Interest Hedging Structure 2019 2
Slide 11: Best in Class Financial Ratios Among Peers
I. BEST IN CLASS FINANCIAL RATIOS AMONG PEERS II. HIGHEST RATED IN GERMAN COMMERCIAL REAL ESTATE Financial risk profile 1 2 3 4 5 6 Financial policy: Minim Modest Intermediate Significant Aggre High al ssive Levera ged 1 aaa/ bbb- Strive to achieve A global rating in the long term Business risk prof
Slide 12: Operations and Portfolio
Cologne Dortmund Cologne OPERATIONS AND PORTFOLIO Munich NRW Düsseldorf Duisburg Essen 12
Slide 13: Top Tier Cities (Sep 2019)
TOP TIER CITIES (SEP 2019) * “Others” includes: Paris, Brussels, Rome, Vienna, Edinburgh, Dublin, Bremen, Nuremberg, Kassel and others 13
Slide 14: Top Tier Cities – Central Quality Locations
TOP TIER CITIES – CENTRAL QUALITY LOCATIONS SEP 2019 Residential Commercial *accounting for 39% holding in GCP 1) 1) Including land for development and other rights 14
Slide 15: Top Tier Cities Within Asset Classes
TOP TIER CITIES WITHIN ASSET CLASSES – SEP 2019 * 15 * Including land for development and other rights
Slide 16: Best in Class Berlin Portfolio
BEST IN CLASS BERLIN PORTFOLIO (SEP 2019) 90% of the commercial portfolio is located in top tier neighborhoods • Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Friedrichshain, Lichtenberg, Schöneberg, Neukölln, Steglitz and Potsdam • Strongly benefiting from the unique dynamics and growth of Berlin’
Slide 17: Berlin Potsdamer Platz
Berlin landmark property Potsdamer Platz: The prime commercial and tourist center Potsdamer Platz Office Potsdamer Platz Office Crowne Plaza Potsdamer Platz Hotel Checkpoint Charlie Potsdamer Platz Potsdamer Platz Office Residential (GCP) Office Hilton Gendarmenmarkt Potsdamer Platz Hotel Office Gen
Slide 18: Quality Berlin Assets Around Kurfürstendamm
Berlin landmark property Quality Berlin assets around Kurfürstendamm (Ku’Damm) Moxy by Marriot Berlin AC by Marriot Potsdamer Platz Mitte Hotel Berlin Mitte Hotel Ku’Damm KaDeWe Ku’Damm KaDeWe Berlin City Center Mitte Office Residential (GCP) Retail/Office Ku’damm /Uhlandstr. Berlin City Center Mitt
Slide 19: Quality Frankfurt Assets in Central Locations
Frankfurt Quality Frankfurt assets in central locations InterContinental Frankfurt Hotel Frankfurt Office Campus Frankfurt HBF Offices Offices Frankfurt Hauptbahnhof (Central Train Frankfurt Deutsche Bahn Station) Office Frankfurt HBF Office Frankfurt Frankfurt Büro Center (FBC) Office Frankfurt HBF
Slide 20: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE ➢ Limited dependency on single tenants due to large tenant base of over 3,000 tenants ➢ Top 10 tenants represent 22% of rent ➢ Long lease terms ➢ Portfolio WALT as of September 2019: Logistics/Wholesale Office Hotel Retail Total /Other 4.5 14.8 6.1 6.
Slide 21: Highly Performing Hotel Locations
HIGHLY PERFORMING HOTEL LOCATIONS Well diversified portfolio of over 150 hotels totalling €5.8bn and approx. 1.8m sqm as of September 2019 High proportion (85%) in 4 star hotels, meeting the rising market demand from tourism & business travel Long-term and fixed leases to third party hotel operators
Slide 22: Strategic Top Tier Hotels in Strong Locations
STRATEGIC TOP TIER HOTELS IN STRONG LOCATIONS Hotel: Rooms: Brand: Hilton Berlin Gendarmenmarkt Prime Center 601 Bristol Berlin Ku’damm Prime Center (ex-Kempinski) 301 InterContinental Frankfurt Prime Center 473 Hilton London Hyde Park Prime Center 132 Marriott Conference Hotel Paris City Center 757
Slide 23: Commercial Investment Properties
COMMERCIAL INVESTMENT PROPERTIES Portfolio breakdown per asset type* Investment Area EPRA Annualized net rent In-place Value Rental SEPTEMBER 2019 properties (in k sqm) Vacancy (in €M) rent per sqm per sqm (in €) yield (in €M) (in €) Office 8,676 3,389 10.7% 397 10.3 2,560 4.6% Hotel 5,821 1,769 4.7
Slide 24: Commercial Portfolio: Upside Potential
COMMERCIAL PORTFOLIO: UPSIDE POTENTIAL Commercial September annualized Rental Income vs. Commercial in-place rent Market potential including vacancy reduction compared to market rent prices (in € millions) +33% 1,075 18% 808 82% below market rent at market rent Sep 2019 annualized Annualized market
Slide 25: Guidance
GUIDANCE Amsterdam London Edinburgh 25
Slide 26: Guidance Updated
GUIDANCE GUIDANCE UPDATED GUIDANCE IS CONSERVATIVELY BASED ON CURRENT PORTFOLIO AND CURRENT SIGNED DEALS. FULL EFFECT OF SIGNED DEALS TO START IN 2020 2019 PREVIOUS 2019 GUIDANCE Following the strong impact from recent acquisitions, GUIDANCE UPDATE1) Guidance is updated +€10m addition to FFO I from
Slide 27: Appendix
Stuttgart/ APPENDIX Baden-Baden Hamburg 27
Slide 28: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Analyst Research Target Price 9.80 9.50 9.40 9.20 9.00 9.00 8.90 8.90 8.80 8.80 8.50 8.50 8.50 8.40 8.40 8.30 8.30 8.25 8.00 7.75 First Berlin SRC Research Hauck & Berenberg Commerzbank Baader Bank Citigroup Bankhaus HSBC M.M. Warburg Jefferies Kepler Goldman Sachs O
Slide 29: Aroundtown's Share Price Performance
AROUNDTOWN‘S SHARE PRICE PERFORMANCE Share performance and total return since initial placement of capital (13.7.2015) Aroundtown is the best performer in 2017/2018 amongst European real Estate 8.0 Aroundtown +162% 7.0 6.0 EPRA Germany (rebased) +64% 5.0 Issue Price of €3.20 4.0 MDAX (rebased) +34%
Slide 30: Capital Market Activity
CAPITAL MARKET ACTIVITY Capital market activity per year Capital market activity per issuance type 2015-2019 YTD €4.6bn €4.2bn €4.2bn Str. Bond €10bn €2.6bn Conv. Bond €0.8bn €1.2bn Equity €3.4bn €2.6bn 2015 2016 2017 2018 2019 YTD Equity (incl. Conversions) Perpetual notes Equity Perpetual Conv. Bo
Slide 31: ESG – Strong Commitment to Sustainability
HIGH STAKEHOLDER VALUE CREATION ESG – STRONG COMMITMENT TO SUSTAINABILITY INCLUSION INTO EUROPE 350 in September 2019 AT is already included since 2017/2018 in: In September 2019, Aroundtown received the EPRA BPR Gold award for the third consecutive year, the highest standard for financial reporting
Slide 32: Strategy and Business Model
STRATEGY AND BUSINESS MODEL Quality assets with a focus 4 on large EU ROBUST CASH FLOWS WITH cities LOW VACANCY SUPPORTED BY primarily in Germany/NL STRONG TENANT STRUCTURE, Capital Income recycling by generating WHILE DISPOSING MATURE selling non- portfolios AND NON-CORE PROPERTIES core/mature with
Slide 33: Management
MANAGEMENT CEO and CFO Shmuel Mayo CEO of Aroundtown. Since 2006 in the management of Aroundtown and its subsidiaries. Previously, was the CEO of a leading international investment conglomerate. BA in Economics and Accounting, Law and CPA. Andrew Wallis Deputy CEO of Aroundtown. Since 2014 in the ma
Slide 34: Operational Management Team
OPERATIONAL MANAGEMENT TEAM Markus Neurauter Head of Commercial Operations. Before joining the Group he was a board member of Strabag AG and CEO of Raiffeisen evolution, responsible for project development in 11 European countries with a development volume of more than €2bn. Mr. Neurauter holds a ma
Slide 35: Development/Building Rights
DEVELOPMENT/BUILDING RIGHTS Strong market demand and scarcity of land Focus on strongest asset classes in top tier cities Value of building rights increased significantly in central locations in top tier cities Berlin Office 37% Frankfurt 70% 21% Extracting additional value as part of our value add
Slide 36: Development Rights: Hilton Berlin Gendarmenmarkt
DEVELOPMENT/BUILDING RIGHTS HILTON BERLIN PRIME CENTER GENDARMENMARKT The 4 star Hilton Hotel is located in the heart of Berlin on Gendarmenmarkt, a prime tourist, residential and commercial center with historical & cultural landmarks and excellent connectivity & transportation options. Value extrac
Slide 37: Development Rights: Berlin Kreuzberg/Alt-Treptow
DEVELOPMENT/BUILDING RIGHTS BERLIN KREUZBERG/ALT-TREPTOW The cinema center holds 7k sqm & is located across the Park Center retail/office center in a mixed use office, residential & touristic area of the district of Treptow/Kreuzberg around the corner of the Treptowers office towers. Strong connecti
Slide 38: Development Rights: Berlin Brewery Project
DEVELOPMENT/BUILDING RIGHTS BERLIN TREPTOW-KÖPENICK – THE BREWERY PROJECT This office property is located in the Niederschöneweide quarter of Berlin’s Treptow-Köpenick borough, which is a mix-use area surrounded of commercial as well as a residential space with the Treptower Park to the north and in
Slide 39: Development Rights: Frankfurt Main Central Train Station
DEVELOPMENT/BUILDING RIGHTS FRANKFURT MAIN CENTRAL TRAIN STATION The 22 storey office tower covers 21k sqm and is situated adjacent Frankfurt’s main central train station and thus is well connected by public transport as well as its location just off Mainzer Landstraße, Frankfurt’s main inner city r
Slide 40: Regional Market Overview
REGIONAL MARKET OVERVIEW NRW Bremen Hamburg ◼ GDP share 2017 : 21% of total national ◼ GDP growth1 : 3.3% ◼ GDP growth1: 2.4% ◼ GDP growth1: 1.7% ◼ Migration balance2: 1.1% ◼ Migration balance2: 0.9% ◼ Migration balance2: 0.7% ◼ Population density3: 1,734 per km2 ◼ Population density3: 2,397 per km2
Slide 41: Germany/NL – Growing and Top Tier Economies
GERMANY/NL – GROWING AND TOP TIER ECONOMIES GDP per capita in 2009 – 2018 (in €) Strong trade balance for Germany and NL (in €bn) €43,000 Netherlands, €41,600 131.1 140 €38,000 120 Germany, €35,900 100 €33,000 France, €32,800 United Kingdom, €32,400 80 EU (28 countries), €28,200 €28,000 60 Italy, €2
Slide 42: Germany/NL – Strong Labor Market
GERMANY/NL – STRONG LABOR MARKET Development of gross monthly wages Germany (in €) Unemployment rate Aug 2019 18% 4,000 3,880 3,771 3,703 15% 13.8% 3,750 3,612 3,527 3,449 12% 3,500 3,391 3,311 9.4% 3,227 3,250 9% 8.5% 3,141 3,000 6% 3.8% 3.5% 3.1% 2,750 3% 2,500 0% 2009 2010 2011 2012 2013 2014 201
Slide 43: German Office Market: Low Supply and Strong Demand
GERMAN OFFICE MARKET LOW SUPPLY AND STRONG DEMAND… Office employment growth remains strong* Continuously strong demand at low supply Office workers in million persons Office space in million sqm Office space from 2008-2018 in % Office workers from 2008-2018 in % 2.6 85 35 *In Top 7 2.5 30 locations
Slide 44: German Office Market: Increasing Rents and Lower Vacancies
GERMAN OFFICE MARKET …LEAD TO INCREASING RENTS AND LOWER VACANCIES Strong reductions in vacancy in top locations Strong economic fundamentals and high office employment drive up 20 Vacancy rate in % demand, whilst supply is lacking, reducing vacancies 18 16 14 2010 Putting upward pressure on rents 1
Slide 45: German Office Market: Investor Appetite Reduces Yields
GERMAN OFFICE MARKET MEANWHILE INVESTOR APPETITE REDUCES YIELDS Low treasury yields and continued high demand, especially in office… Bund yields fall to historic lows Investment volume in property market could also Market share reach a high level in 2019 5 years 10 years 30 years Residential portfol
Slide 46: Netherlands Office Market
NETHERLANDS OFFICE MARKET …RESULTING FROM FAVORABLE DEVELOPMENTS Current trends show very favorable market developments… Asking rents 2015 –> 2018 Vacancy reduction1) 2) -580bps +9% 2015 –> 2018 Available Supply -42% 2015 –> 2018 Office take-up 2015 -> 2018 +42% Office Employment1) 2015 -> 2017 +7.5
Slide 47: German Hotel Market Overview
GERMAN HOTEL MARKET OVERVIEW CONTINUED STRONG DEMAND GROWTH Overnight stays across all hotel accommodation types in Germany RevPar development Rated hotels by category 300 5-star 1-star Millions 74€ 123 78 69 71 72€ 250 66 70€ 2-star 61 65 70€ 56 58 413 51 65€ 200 48 62€ 63€ 59€ 4-star 150 58€ 2,639
Slide 48: UK/London Hotel Market
UK/LONDON HOTEL MARKET POSITIVE DEVELOPMENTS AND FORECASTS Continued growth in main KPIs, forecasted to grow further Strong investor appetite for hotel assets London Loans Portfolio Single Forecast RevPAR growth (%) 10 12% A: Actual F: Forecast 2018A 2019F 2020F RevPAR growth p.a. (%) 9 Occupancy %
Slide 49: German Wholesale and Logistics
GERMAN 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 sector wide Increasing take-up of space Sharpl
Slide 50: Macro Fundamentals Support GCP
MACRO FUNDAMENTALS SUPPORT GCP Population density 2018 Population Development Annualized growth in rent price index* (persons per sqkm) 85 237 Bremen 2.2% Millions of People 83.0 83.2 82.5 82.8 82.2 Hessen 1.7% 81.2 Berlin 1.7% 80.5 80.8 121 Bayern 1.5% 80 Nordrhein-Westfalen 1.5% Niedersachsen 1.4%
Slide 51: 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