Corestate Capital Holding Sa · XETR:CCAP
Corestate Capital Holding Sa — Investor Day (November 2020)
56 slides from Corestate Capital Holding Sa's investor day presentation, Nov 19, 2020
Slide 1: CORESTATE – Capital Markets Day – Strategy, Products, Markets and Clients
CORESTATE – Capital Markets Day – Strategy, Products, Markets and Clients 19 November 2020
Slide 2: Agenda
Agenda Corestate´s Move to New Pastures (Lars Schnidrig, CEO) 4 Operating Environment REIM under COVID-19: Markets, Clients, 2 Business Overview and Strategy Products and Perspectives 7 (Nils Hübener, CIO & Mark Holz, Head of Research) 3 Investment Management Financials: Leverage, Cash Flow 4 Covera
Slide 3: Disclaimer
Disclaimer Glossary This presentation contains forward-looking statements that are subject to various € = Euro; risks and uncertainties. Such statements are based on a number of assumptions, $ = (US)Dollar; estimates, projections or plans that are inherently subject to significant risks, as % = perc
Slide 4: CORESTATE´s Move to New Pastures
CORESTATE´s Move to New Pastures Lars Schnidrig, CEO
Slide 5: Update on Our Corporate Journey – From Founders Business to a Fully Institutionalized Investment Manager
Update on Our Corporate Journey – From Founders Business to a Fully Institutionalized Investment Manager Successful Corporate Transformation on all Layers • Dynamic market consolidation with comprehensive integration of large and bolt-on acquisitions 2017/2018 driven by regulatory and market pressur
Slide 6: Update on Our Strategic Market Approach – Between COVID and New Pastures
Update on Our Strategic Market Approach – Between COVID and New Pastures Consistent Improvement of Operations, Product Range and Client Access • RE Equity from niche to scale − New Core/Core+ focus and a sharpened product range opens room for bigger clients and higher volumes − Value add and opportu
Slide 7: REIM under COVID-19: Markets, Clients, Products and Perspectives
REIM under COVID-19: Markets, Clients, Products and Perspectives Nils Hübener, CIO | Mark Holz, Head of Research
Slide 8: Agile and Smooth CIO Set-Up
Agile and Smooth CIO Set-Up CORESTATE’s integrated investment process Holistic Investment / Product Line Strategy Investment strategy • Strong teams with sectoral and regional approach Contact brokers • Holistic marketing and communication concept Contact developers Property sourcing Contact owners
Slide 9: Uncertainty drives investors to 'safe haven' assets
Uncertainty drives investors to ‚safe haven‘ assets Uncertainty reached a new historic high Brexit negotiations Global Economic Policy Uncertainty (GEPU) Index COVID-19 Lehman 500 5,0 Trade war, Refugee crisis Euro crisis 400 4,0 referendum election US fiscal crisis Trump- Brexit 300 3,0 GEPU Index
Slide 10: Interest rates – strengthening property demand
Interest rates – strengthening property demand In a ‚lower-for-ever‘ rate environment, property remains an attractive asset class Government bond yields (by maturity in years) Yield is 1 2 3 4 5 6 7 8 9 10 Switzerland positive Germany negative Japan Netherlands Austria Sweden Denmark France Belgium
Slide 11: European Transaction Volume
European Transaction Volume European transaction volume held up well, but activity is down Europe – Transaction volume 12 months rolling totals, € bn Core Assets Germany (rhs) United Kingdom (rhs) 6.000 France (rhs) 350 Milliarden Netherlands (rhs) Spain (rhs) 5.000 300 250 4.000 200 3.000 150 2.000
Slide 12: European Transaction Volume
European Transaction Volume European transaction volume held up well, but activity is down Europe – Transaction volume 12 months rolling totals, € bn Core Assets Germany (rhs) United Kingdom (rhs) 6.000 France (rhs) 350 Milliarden Netherlands (rhs) Spain (rhs) 5.000 300 250 Germany 4.000 ‚Low-risk E
Slide 13: European Transaction Volume
European Transaction Volume European transaction volume held up well, but activity is down Europe – Transaction volume 12 months rolling totals, € bn Core Assets Germany (rhs) United Kingdom (rhs) 6.000 France (rhs) 350 Milliarden Netherlands (rhs) Spain (rhs) 5.000 300 250 Germany 4.000 ‚Low-risk E
Slide 14: The Cycle: Risk is with the income side
The Cycle: Risk is with the income side Flexecurity and asset selection are key Qualitative risk assessment by market component Short-term outlook (12 – 24 months) Security of income is crucial • Asset Management focus Income • Core / Core+ focus • Flexibility Risk Core yields to remain defensive Ca
Slide 15: In the mid-term, market opportunities to strengthen
In the mid-term, market opportunities to strengthen 12 to 24 months outlook… …and beyond Property market Property Property market Property characteristics sector characteristics sector Opportunity Transaction activity Hotel Transaction Mixed Use activity Micro Living Residential Core Yields Resident
Slide 16: Implications for our strategy – Asset Management
Implications for our strategy – Asset Management De-risking, pro-longing leases and modernizing the portfolio Strengthening income security • Intensive discussions with our tenants to find suitable solutions to keep occupancy high and rental loss minimal • Negotiate lease prolongations De-risk portf
Slide 17: Asset Management Initiative: Strengthening the portfolio
Asset Management Initiative: Strengthening the portfolio Asset repositioning to create value Initial situation • 70 % of lettable area retail use, 8 % office use • 4.070 m² vacant area of commercial use Repositioning of vacant area • Long-term (20 year) rental commitment from city Hanau • Reduction
Slide 18: Implications for our strategy – Investment Management
Implications for our strategy – Investment Management In the short-term, stability and security of income is key • ‚Core’ investment focus • Residential / Mixed use / City Quarters • Offices / logistics with long and secure leases • Acknowledging cyclical and structural market developments equally M
Slide 19: Increasing allocation into Real Estate
Increasing allocation into Real Estate Institutional and semi-institutional money is targeting real estate Institutional Semi-Institutional Europe – Short-term investment Insurance companies* Global Family offices intentions, Q3 2020 60% Real estate quota Intentions to increase allocation 40% 12% 20
Slide 20: Product solutions in a challenging market environment
Product solutions in a challenging market environment Challenging market environment • High degree of uncertainty • Cautious financing (banks) side • Limited product availability 1 Mixed-use urban City Quarters 2 Residential and related assets Example solutions Client needs in this environment 3 Str
Slide 21: Product Highlights I: City Quarters and Micro Living
Product Highlights I: City Quarters and Micro Living Tobias Gollnest | Lambros Reppas
Slide 22: City Quarters in the 1970/80s
City Quarters in the 1970/80s Cologne, Chorweiler 22
Slide 23: City Quarters in the 1970/80s
City Quarters in the 1970/80s Cologne, Chorweiler Berlin, Marzahn 23
Slide 24: City Quarters in the 1970/80s
City Quarters in the 1970/80s Cologne, Chorweiler Berlin, Marzahn Munich, Neuperlach 24
Slide 25: City Quarters in the 1970/80s
City Quarters in the 1970/80s Cologne, Chorweiler Berlin, Marzahn Munich, Neuperlach Frankfurt, Niederrad 25
Slide 26: New concept of City Quarters – Example Bremen
New concept of City Quarters – Example Bremen City Quarter Am Alten Speicher Residential Key Features: Residential Retail • 32,000m² on 89 acres of land • C. 950 users and employees • Urban mixed-use incl. Residential Serviced Apartments Restaurants residential, services, facilities, Police gastrono
Slide 27: New concept of City Quarters – Example Bremen
New concept of City Quarters – Example Bremen City Quarter Am Alten Speicher Residential Retail Residential Key Features Train Station Residential Area • 32,000m² on 89 acres of land • C. 950 users and employees • Urban mixed-use incl. Residential Serviced Apartments Restaurants Police residential,
Slide 28: Important Megatrends
Important Megatrends The following megatrends will most likely have a significant impact on the real estate sector and can be taken into account in the development of City Quarters : Urbanisation Sustainability Demographic transition Digitalisation The wide range of structural factors impacting the
Slide 29: Investment Rationale
Investment Rationale New City Quarters fulfill several purposes for investors and users Increase in asset class Risk diversification of importance due to cashflow through strong investor mixed use, large interest share of residential use Aspects such as modernity Long-term leases and sustainability
Slide 30: City Quarter Project The Q, Nuremberg (Separate Account)
City Quarter Project The Q, Nuremberg (Separate Account) • The former dispatch centre of the Quelle Warenhaus AG has been constrcucted in five phases between 1953 and 1966 • Parts of the building are listed, e.g. façade, staircases and the cantine • The entire property will be developed to a mixed u
Slide 31: City Quarter Project The Q, Nuremberg (Separate Account)
City Quarter Project The Q, Nuremberg (Separate Account) • The former dispatch centre of the Quelle Warenhaus AG has been constrcucted in five phases between 1953 and 1966 • Parts of the building are listed, e.g. façade, staircases and the cantine • The entire property will be developed to a mixed u
Slide 32: City Quarter Project The Q, Nuremberg (Separate Account)
City Quarter Project The Q, Nuremberg (Separate Account) • The city quarter project “The Q” includes 5 building sections: − 1 and 4 is commercial use; area c. 50,000 sqm − 2, 3 and 5 will be home for c. 2,000 residential users, gastronomy and kindergarten; area c. 112,000 • The commercial area is pr
Slide 33: City Quarter Project The Q, Nuremberg (Separate Account)
City Quarter Project The Q, Nuremberg (Separate Account) 33
Slide 34: Investment Thesis
Investment Thesis Profile Core (key-ready acquisition) of a new building or revitalization Asset Allocation Diversified portfolio in medium-sized and large German cities. The selection of cities is based on the CORESTATE City Index Volume c. EUR 500 million Holding period 10 years Target cash-on-cas
Slide 35: Solid Ground – Micro Living Landscape
Solid Ground – Micro Living Landscape Country Location # Beds Germany Various Location 4,350 Incl. construction Austria Vienna 1,391 Switzerland Zurich (2021) 447 Spain Seville 203 Valencia (2021) 162 Madrid (2022) 207 Various Locations Poland 1,022 Incl. construction Denmark Kopenhagen (2022) 248 U
Slide 36: Country Scoring as Solid Base for Expansion Strategy
Country Scoring as Solid Base for Expansion Strategy Demo- Political Capital Economic Micro Ø Overall Rank Country graphics Stability Markets Activity Living attractiveness 1 Germany 2,1 1,3 3,4 2,1 1,7 1,9 2 Netherlands 1,9 1,3 2,8 2,6 2,1 2,1 3 Denmark 2,0 1,9 2,1 2,5 2,3 2,2 4 Switzerland 1,5 1,2
Slide 37: COVID-19 Heavily Impacts Serviced-Apartments
COVID-19 Heavily Impacts Serviced-Apartments Serviced-Apartment landscape at Occupancy Level (illustrative) Occupancy-rates (operating assets still in ramp up phase) Projection Lockdown Summer COVID-19 Pick-up 90% Solid financial 80% Pedestal during 70% Covid-19 60% 50% 40% 30% 20% 10% 0% Jan 20 Feb
Slide 38: COVID-19 with Transitory Impact on Student Homes
COVID-19 with Transitory Impact on Student Homes PBSA landscape at Occupancy Level (illustrative) COVID-19 Projection 100 Lockdown measures Analyzed Markets 95 YOUNIQ (Germany & Austria) German Market Average 90 CRM (UK) 85 UK Market Average 80 75 70 65 60 Jan Feb Mar Apr May Jun Jul Aug Sept Oct No
Slide 39: European PBSA Market Shows Promising Catch-up Opportunities
European PBSA Market Shows Promising Catch-up Opportunities Number of Number of Number of Country Prime Yield Supply Rate Students International Students Units (approx.) Germany 2.87m 374k 3.70% - 4,20% 316k 12% UK 1.97m 458k 3.75%* 627k 32% 3.75% - France 2.62m 341k 340k 13% 4,80%* Poland 0.80m 78k
Slide 40: Brand Refresh - Next generation of YOUNIQ
Brand Refresh - Next generation of YOUNIQ Brand Evolution: YOUNIQ and Linked Living become YOUNIQ (MY WAY OF LIVING) We continue to develop our self's as the market leader in the Micro Living Sector with a better visibility through our Brand Refresh YOUNIQ – MY WAY OF LIVING 40
Slide 41: Strong Sourcing Power for Profitable Residential Assets
Strong Sourcing Power for Profitable Residential Assets Illustrative Example of Current Residential Investment Approach in Funds CRG II & CRG II Live Live Live Live Live Partly Live 1 Alfred & 2 Elb- 3 Boots- Project 4 Mika 5 Nikolai 6 Johannis 7 Ludwig 8 Herkules 9 Bambi 10 Nemo 11 Wolfgang 12 Stee
Slide 42: Key Anchor of Residential Expansion Strategy
Key Anchor of Residential Expansion Strategy Why Forward Funding Opportunities ? Attractive High returns Very good market repayment and Avoiding of the Influence of through penetration financing German rent Energy-/ and comparably through excellent subsidies for control policy Building higher yields
Slide 43: Product Highlights II: Logistics, French Market, HFS
Product Highlights II: Logistics, French Market, HFS Edward Bates, CEO STAM Europe | Martin Bassermann, CFO & HFS Verwaltungsrat
Slide 44: STAM & French Market overview
STAM & French Market overview STAM is an investment and asset manager focused on real estate investments in France Market Overview • Edward Bates is President and CEO • Investment market: a 30% slow-down expected in 2020 due to the Covid19 – with a strong resilience • 22 dedicated professionals for
Slide 45: STAM Post-Covid focus
STAM Post-Covid focus Residential Investments Core / Core + strategy: • Income • Capital improvement AUM: • Current: €120m • Dry powder: €75m 45
Slide 46: STAM Post-Covid focus
STAM Post-Covid focus Logistics Investments 3 strategies to focus on within the logistics sector: • Core / Core +: Income and dividend strategy • Value-Add: Urban Logistics and Light Industrial strategy: €350m total investment • Opportunistic: Big Box developments with leasing risk: €300m total inve
Slide 47: STAM Logistics AUM €600m
STAM Logistics AUM Current Locations of AUM €600m 100% AUM France 900,000 25 Total Areas (sqm) Total assets 9 dedicated professionals Acquisition Asset Management Property Management Technical Management 47
Slide 48: STAM – Focus on Parisian Last Mile Transaction
STAM – Focus on Parisian Last Mile Transaction Saint Ouen l’Aumône | KPIs • Location: St Ouen l’Aumône : 25km north-west from Paris • Areas: 14,975 sqm • Delivery scheduled in Q4 2021 • Yield-on-Costs: 7.4% • Price psm: €1,13048 • Targeted IRR1: 15% • Targeted EM1: 1.8x Saint-Ouen-l’Aumône 1 Post ta
Slide 49: HFS – Rock-Solid in the Crisis
HFS – Rock-Solid in the Crisis Snapshot of the Current Market Environment • Product sweet spot: metropolises in Germany with focus on residential and city quarters (mixed use) in A & B locations have been rising for more than 10 years and continue also during the crisis • HFS project portfolio large
Slide 50: Investor Base and Performance of HFS Stratos Funds
Investor Base and Performance of HFS Stratos Funds Mezzanine Funds Showing Strong Organic Growth Stable and Loyal Investor Landscape (in bn€) • Stable double-digit returns since inception 2009 Pension Funds and very efficient deployment of funds 12% Investment Insurers Funds 8% • 3Y-CAGR since acqui
Slide 51: Update on Lending and Exposure
Update on Lending and Exposure Uses of Mezzanine Funds at the End of H1-2020 • Total committed fund volume: c € 1.3bn Retail • # of financed projects: 57 Residential 16% 68% 57 • Ø size of mezzanine financing: c € 23m projects Office 16% Regional Break Down of Current Outstanding Financings (in m€)
Slide 52: It's All About Location, Location… and the Right Developer
It’s All About Location, Location… and the Right Developer Illustrative Example for a Recently Completed Project Description Issue 14.12.2018 The project is located in a parkland of almost 80.000 m². The area was developed and Repayment 31.07.2020 built as a hospital between 1909 and 1912; Mezz Capi
Slide 53: Private Debt – More Than Stable in the Upcoming Years
Private Debt – More Than Stable in the Upcoming Years Bright Outlook for HFS Business • All market drivers intact: investor base, product focus, demand, competition • Tangible pipeline of requested financings on record level (c € 0.5 billion) • Further organic growth in mezzanine fund volumes in 202
Slide 54: Sneak Preview: Transaction Market in 2021
Sneak Preview: Transaction Market in 2021 Nils Hübener, CIO
Slide 55: Transaction Market in 2021: Continuous Recovery
Transaction Market in 2021: Continuous Recovery Market Uncertainties to Prevail in the first Half and to Vanish Gradually in H2 Q1-2021 Still impact from COVID-19; focus on Core/Core+ transactions Q2-2021 Continuously less impact from the pandemic, more deals to come H2-2021 Deal volumes tend to nor
Slide 56: IR Contact and Financial Calendar 2021
IR Contact and Financial Calendar 2021 Investor Contact Financial Calendar 2021 Dr. Kai G. Klinger 24 February Publication preliminary results for FY 2020 Chief Markets Officer Phone: +49 69 3535630-106 24 March Annual financial report 2020 ir@corestate-capital.com 28 April Annual General Meeting 19
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