Tag Immobilien Ag · XETR:TEG

Tag Immobilien — Q1 2016 Earnings Presentation

33 slides from Tag Immobilien's earnings presentation, May 2016

1. Slide 1: Conference call presentation Q1 2016

   Conference call presentation Q1 2016

2. Slide 2: Content

   Content 22 CONTENT I. TAG highlights Q1 2016 3 II. TAG financials Q1 2016 6 III. TAG portfolio Q1 2016 12 IV. TAG East German real estate market 17 V. TAG outlook 21 VI. Appendix 23  Acquisitions and disposals  Valuation  Capex and maintenance  Return on capex  Capital markets heads-up  Bonds

3. Slide 3: TAG highlights Q1 2016

   3 TAG highlights Q1 2016

4. Slide 4: TAG highlights Q1 2016

   TAG highlights Q1 2016 44 Q1 2016 Q4 2015 Q1 2015  Vacancy (residential units) 7.5% 7.5%/7.7%* 8.9% HIGHLIGHTS  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 

5. Slide 5: TAG highlights Q1 2016

   TAG highlights Q1 2016 55  Private placement of 5m TAG treasury shares in March 2016  ABB transaction in March 2016 (after buyback in Sep/Oct 2014 at EUR 9.30 per share) HIGHLIGHTS Share placement  Placement price: EUR 11.65 (6.1% premium to three months VWAP/ 9.5% premium to EPRA NAV per share)

6. Slide 6: TAG financials Q1 2016

   6 TAG financials Q1 2016

7. Slide 7: TAG income statement (IFRS)

   TAG income statement (IFRS) 77 (in EUR millions) Q1 2016 Q4 2015 FY 2015  Increased rental revenues due to closing of INCOME STATEMENT acquisitions end of Dec-2015/Jan-2016 and through Rental revenues 67.7 65.9 259.3 rental growth and vacancy reduction Expenses from property management -14.6 -12.4

8. Slide 8: TAG FFO calculation

   TAG FFO calculation 88 (in EUR millions) Q1 2016 Q4 2015 FY 2015 Net income 18.0 32.1 147.3 FFO + Taxes 1.7 -0.8 27.8 + Net financial result 21.9 21.6 96.0 EBIT 41.6 52.9 271.1 - Net financial result (cash, after one off’s) -20.1 -20.2 -84.0 - Cash taxes 0.1 -0.3 -0.4 + Adjustments Valuation result

9. Slide 9: TAG balance sheet (IFRS)

   TAG balance sheet (IFRS) 99 (in EUR millions) 31 Mar-2016 31 Dec-2015 BALANCE SHEET Non-current assets 3,647.6 3,605.4 Investment property 3,573.8 3,531.1 Deferred tax assets 43.3 43.6 Other non-current assets 30.5 30.7 Current assets 157.9 165.1 Real estate inventory 11.9 12.8  Cash inflows from r

10. Slide 10: TAG NAV calculation

    TAG NAV calculation 10 10 (in EUR millions) 31 Mar-2016 31 Dec-2015 NAV per share development 31 Mar-2016 NAV compared to 31 Dec-2015: Equity (without minorities) 1,176.3 1,085.1 + Deferred taxes on investment properties and financial derivatives 244.9 245.1  Approx. EUR 0.08 per share increase due

11. Slide 11: TAG debt financing structure

    TAG debt financing structure 11 11 Debt maturity profile as of 31 Mar-2016 in EUR millions Interest rates and maturities (1) Bonds FINANCING STRUCTURE EUR 435m (310m) Bank loans EUR 1,800m (710m) Ø interest rate: 4.52% (4.83%) Ø interest rate: 3.13% (3.64%) Total: 310 EUR 2,309m Ø 3.45% Convertibles

12. Slide 12: TAG portfolio Q1 2016

    12 TAG portfolio Q1 2016

13. Slide 13: TAG portfolio in total as of Mar-2016

    TAG portfolio in total as of 31 Mar-2016 13 13  Geographic regions in accordance with decentralized management PORTFOLIO / PLATFORM clusters and strategic relevance  Change in 2016: split of region “Dresden” into two regions (“Dresden” and “Chemnitz”) in accordance with new internal management and

14. Slide 14: TAG portfolio in total – Q1 2016 by region

    TAG portfolio in total – Q1 2016 by region 14 14 Region Units Rentable IFRS BV In- Vacancy Vacancy Actual Re- L-f-l L-f-l rental Mainte- Capex Comments # area TEUR place March Dec. net letting rental growth nance EUR/ sqm yield 2016 2015 cold rent growth y-o-y incl. EUR/ sqm % % % rent EUR/ y-o-y va

15. Slide 15: TAG vacancy reduction development

    TAG vacancy reduction development 15 15  Residential units 2013 - 2016  Realisation of development potential from newly acquired portfolios PORTFOLIO / PLATFORM  Proof of successful asset and property management over the last three years  Increases in vacancy due to new acquisitions with higher

16. Slide 16: TAG rental growth development

    TAG rental growth development 16 16 PORTFOLIO / PLATFORM  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

17. Slide 17: TAG East German real estate market

    17 TAG East German real estate market

18. Slide 18: TAG East German real estate market Demographics

    TAG East German real estate market Demographics 18 18 Migration between eastern and western Germany 1) Personen in 1000 People in 1000  Since the fall of the Berlin Wall, about 1.8 million EAST GERMAN MARKET 300.00 300.0 people from Eastern Germany have moved to the West – mostly young people betwe

19. Slide 19: TAG East German real estate market Economic data

    TAG East German real estate market Economic data 19 19 Change in employment rates 1998-20131) 90  In the regions that are part of the TAG portfolio, EAST GERMAN MARKET +13.6% employment has increased significantly 80 +9.2%  By the same token, there has been a decline in the unemployment rate +11.6

20. Slide 20: TAG East German real estate market Rent over time

    TAG East German real estate market Rent over time 20 20 Change in rents – Net rent (without service charges) 2008-20151) EAST GERMAN MARKET 35% 33.1% 33.1%  In the period from 2008 to 2015, the eastern German cities shown that are also part of the TAG 30% 27.3% 27.3% portfolio demonstrated a positi

21. Slide 21: TAG outlook

    21 TAG outlook

22. Slide 22: TAG outlook

    TAG outlook 22 22  FFO EUR 84m – EUR 85m (EUR 76.3 in FY 2015) OUTLOOK 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.

23. Slide 23: Appendix

    23 APPENDIX

24. Slide 24: TAG acquisitions 2015

    TAG acquisitions 2015 24 24 Signing Saxony/Saxony- NRW/ Anhalt Brandenburg Rügen Brandenburg Lower Saxony Saxony Saxony-Anhalt Total May-2015 Jun-2015 Jul-2015 Nov-2015 Nov-2015 Dec-2015 Dec-2015 FY2015 APPENDIX Units 860 134 180 1,776 1,304 972 96 5,322 Rentable area in 49,900 11,400 11,500 97,200

25. Slide 25: TAG disposals 2015

    TAG disposals 2015 25 25 Signing Berlin (Marzahn/ Stuttgart Hamburg Privatisation and Total APPENDIX Hellersdorf) (Commercial) (Wedel) ongoing disposals FY 2015 Apr-2015 Oct-2015 Dec-2015 2015 Units 972 182 100 679 1,933 Actual net cold rent 5.26 13.64 6.60 --- EUR/sqm/month Berlin Actual net cold r

26. Slide 26: TAG portfolio valuation FY 2015

    TAG portfolio valuation FY 2015 26 26 Region 2015 2015 2015 Revaluation Capex Net 2014 2014 2014 Fair Value Fair Value Implied gain / loss acquisitions Fair Value Fair Value Implied APPENDIX (in EUR millions) (IFRS) (EUR/sqm) multiple and other (IFRS) (EUR/sqm) multiple movements Berlin 441.1 884.5

27. Slide 27: TAG capex and maintenance

    TAG capex and maintenance 27 27 APPENDIX 2015 2016 in EUR millions Q1 Q2 Q3 Q4 Total Q1 Maintenance Residential 6.45 7.09 5.38 5.77 24.69 6.60 Commercial 0.11 0.00 0.22 0.19 0.52 0.02 Capex Residential 6.80 9.88 13.56 9.35 39.59 9.60 Commercial 0.00 0.04 0.18 0.28 0.50 0.03 Total 13.39 16.98 19.34 1

28. Slide 28: TAG return on capex

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

29. Slide 29: TAG return on capex - overview

    TAG return on capex - overview 29 29 APPENDIX 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 o

30. Slide 30: TAG capital markets heads-up

    TAG capital markets heads-up 30 30 Institution Analyst Recommen- Target price Date dation in EUR  High/Low (Q1 2016) EUR 12.09/EUR 9.85 Berenberg Kai Klose Buy 14.00 09-May-16 APPENDIX  Number of shares (issued) 136.6m Bankhaus Lampe Georg Kanders Buy 13.00 06-May-16 Commerzbank Thomas Rothaeusler

31. Slide 31: TAG bonds and convertibles

    TAG bonds and convertibles TAG share price EUR 11.89 as of 31 Mar-2016 31 31  Two corporate bonds outstanding (issued in 2013 and 2014)  One convertible remaining after conversions/clean up call in 2012 and 2015 APPENDIX and (partly) buy back of convertibles in 2013, convertible trades in the mone

32. Slide 32: TAG management board

    TAG management board 32 32 APPENDIX Claudia Hoyer Martin Thiel Dr. Harboe Vaagt COO CFO CLO  Key responsibilities: Property and  Key responsibilities: Controlling,  Key responsibilities: Legal, Human Asset Management, Acquisitions and Accounting, Financing, Taxes, Resources and Transactions Dispo

33. Slide 33: TAG Contacts

    33 33 TAG Contacts APPENDIX 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

TAG Immobilien — Q1 2016 Earnings Presentation on 6ix