Slide 1: Presentation of the Financial Results for H1 2018
Cologne Mannheim London PRESENTATION OF THE FINANCIAL RESULTS FOR H1 2018 AUGUST 2018 Essen Berlin Bremen Hannover
Slide 2: Table of Contents
Table of Contents 1 Achievements and Highlights 2 Financial and Portfolio performance 3 ESG Outperformer 4 Guidance 5 Appendix 2
Slide 3: Achievements
1 ACHIEVEMENTS CONSISTENLY EXTRACTING THE HIGH ACCRETIVE CAPITAL RECYCLING REVERSIONARY POTENTIAL Maintaining substantial like-for-like performance Increasing portfolio quality through accretive capital recycling Disposals of +2.7% +3.2% +0.5% non-core assets €142m L-F-L L-F-L L-F-L Sales channeled
Slide 4: Highlights H1 2018
1 HIGHLIGHTS H1 2018 Strong Rental and operations Net rent Profit EPS (Basic) operating income and value €182million €271million €1.43 €268million creation High long FFO I per share FFO I per share 65% of FFO I FFO I after perpetual notes term €0.60 attribution dividend yield €99million profitabilit
Slide 5: Profit & Loss
2 PROFIT & LOSS Selected Income Statement Data 1-6/2018 1-6/2017 NET RENTAL INCOME (IN € MILLIONS) € ‘000 Revenue 268,525 240,123 363 Rental and operating income 268,275 239,383 328 Net rent 181,682 159,306 285 CAGR 2015 - Jun 2018 Capital gains, property revaluations and other income 249,985 168,45
Slide 6: FFO
2 FFO 1-6/2018 1-6/2017 FFO I (IN € MILLIONS) € ‘000 Guidance range €196m-€201m Adjusted EBITDA 136,749 120,905 198 Finance expenses (23,322) (19,622) 178 Current tax expenses (13,600) (15,294) 160 Contribution to minorities (714) (801) CAGR FFO I 99,113 85,188 128 2015 - Jun 2018 Result from dispos
Slide 7: EPRA NAV
2 EPRA NAV Jun 2018 Dec 2017 EPRA NAV (IN € MILLIONS) € ‘000 Per share € ‘000 Per share Equity per the financial statements 4,301,788 3,849,662 EPRA NAV 4,503 EPRA NAV Incl. perpetual notes 3.993 Equity attributable to perpetual notes investors (1,006,792) (665,871) 3,496 Equity excluding perpetual
Slide 8: Investment Property
2 INVESTMENT PROPERTY INVESTMENT PROPERTIES (IN € MILLIONS) ACQUISITION CRITERIA 6,857 Acquisition in densely populated areas and major cities 6,388 High cash flow generating assets CAGR 4,796 +26% Vacancy reduction potential Rent level per sqm is below market level (under-rented), 3,858 upside pote
Slide 9: Portfolio Distribution
GB 2 PORTFOLIO DISTRIBUTION DISTRIBUTION BY VALUE JUNE 2018 London Hamburg Bremen Berlin Hannover NRW Halle Leipzig Dresden Frankfurt Nuremberg/ Mainz Fuerth Kaiserslautern Mannheim Focus on value-add opportunities in densely populated areas in Munich Germany and London 9
Slide 10: Portfolio Overview
2 PORTFOLIO OVERVIEW Diversification among areas of sustainable economic fundamentals and demographic prospects PORTFOLIO OVERVIEW JUNE 2018 Value Area EPRA Annualized In-place rent Number of units Value Rental yield (in €M) (in k sqm) Vacancy net rent per sqm per sqm (in €M) (in €) (in €) NRW 1,873
Slide 11: Best in Class Berlin Portfolio - June 2018
2 BEST IN CLASS BERLIN PORTFOLIO - JUNE 2018 Berlin is the single largest city in the portfolio… PORTFOLIO OVERVIEW BERLIN 23%* of GCP’s Portfolio Berlin - Friedrichshain Berlin - Charlottenburg Berlin - Mitte Berlin – Schöneberg QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN* 2/3 of the Berl
Slide 12: Portfolio NRW - June 2018
2 PORTFOLIO NRW – JUNE 2018 …and GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION* 27%* POPULATION DENSITY IN NRW of GCP’s Portfolio Dortmund Gelsenkirchen Essen Duisburg Cologne 12 * by value
Slide 13: Portfolio East and North - June 2018
2 PORTFOLIO EAST AND NORTH - JUNE 2018 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO* NORTH PORTFOLIO* 15%* 7%* of GCP’s of GCP’s Portfolio Portfolio Dresden Leipzig Halle Hamburg Hannover Bremen 13 * by value
Slide 14: Financial Policy
2 FINANCIAL POLICY GCP financial policy Strive to achieve A- global rating in the long term LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios with a strong ICR Unencumbered assets above 50% of total assets Long debt mat
Slide 15: Loan-to-Value
2 LOAN-TO-VALUE Jun 2018 Dec 2017 € ‘000 Investment property 6,908,465 6,425,430 COST OF DEBT Assets held for sale 176,473 117,246 Equity accounted investees 27,171 37,261 Low spreads Total value 7,112,109 6,579,937 1.6% Series D 2021 0.34% Total Debt 3,447,973 2,795,675 Series E 2025 1.00% Cash and
Slide 16: Capital Structure
2 CAPITAL STRUCTURE HEDGING STRUCTURE FINANCING SOURCE MIX 99% 14% 12% Bank Debt Hedged 21% 29% Straight Bond 7% Convertible 3% 58% 56% Equity Dec 2017 Jun 2018 MATURITY SCHEDULE ø approx 8.3 Years 16
Slide 17: Financing
2 FINANCING CAPITAL MARKET ACTIVITY SUPPORTING EFFECTIVE DEBT MANAGEMENT Diversifying and strengthening capital structure through strong access to capital markets with €1.3 billion raised in 2018 year-to-date: Apr-18 Issuance of €350 million perpetual notes at a coupon of 2.5%, GCP’s lowest perpetua
Slide 18: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING COVER RATIOS - H1 2018 UNENCUMBERED ASSETS €4.6 BN 5.9x €4.1 BN 4.9x 64% of 65% of value value €2.8 BN €2 BN 56% of value 53% of value ICR* DSCR** Dec Dec Dec Jun *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) 2015 2016 2017 2018
Slide 19: Maintenance, Capex and Modernization
2 MAINTENANCE, CAPEX AND MODERNIZATION CAPEX STRATEGY Modernization: Aimed at improving standards of the apartments and Repositioning capex: increasing energy saving levels. Targeted to increase rents and Aimed at increasing property includes measures such as adding balconies, improving Improve asse
Slide 20: ESG - Outperformer
3 ESG - OUTPERFORMER In April 2018, GCP published its first sustainability report, demonstrating the Company’s commitment to sustainability by presenting to investors, business partners, employees and other stakeholders its activities and achievements and to embed the high ESG criteria of the Compan
Slide 21: 2018 Guidance Confirmed
4 2018 Guidance confirmed H1 2018 FY 2018e annualized FFO I (in € million) 198 196-201 FFO I per share (in €) 1.20 1.19-1.22 Dividend per share (in €) 0.78 0.77-0.79 Rent like-for-like growth 3.2% Over 3% LTV 35% <40% Continuous FFO I growth, should result in further value creation and in return in
Slide 22: Appendix
5 APPENDIX 22
Slide 23: Portfolio Potential
5 PORTFOLIO POTENTIAL RESIDENTIAL IN-PLACE RENT COMPARED TO MARKET RENT CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL 459 353 85% 15% Below market level at market level June 2018 Run-Rate Annualized market potential* * including vacancy reduction 6% of units 10 years subject to rent restr
Slide 24: Proven Ability to Access Capital Markets
5 PROVEN ABILITY TO ACCESS CAPITAL MARKETS Jun-18 Issuance of Series M, 2033 straight bonds of €55m under the EMTN, coupon of 1.7% p.a. till 2023 May-18 Issuance of Series L, 20-year straight bonds of JPY 7.5bn (€57m) due 2038 under the EMTN, currency hedge, coupon of 1.4% p.a. Apr-18 Issuance of €3
Slide 25: Analyst Coverage
5 ANALYST COVERAGE ANALYST RESEARCH TARGET PRICE GCP‘s operations are researched by leading real estate market analysts, who Key Index inclusions: conduct independent equity research and target price recommendations MDAX FTSE EPRA/NAREIT Global Developed Europe Developed Eurozone Germany
Slide 26: Share Development and Structure
5 SHARE DEVELOPMENT AND STRUCTURE SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) Share Price Since First Equity Placement (19.7.2012) SHARE PRICE/CONVERSION PRICE SHARE OWNERSHIP STRUCTURE THROUGHOUT THE COMPANY’S ISSUANCES Basic amount of shares: 166.7 million/ Fully diluted
Slide 27: Bond Spreads
5 BOND SPREADS STRAIGHT BOND SERIES D SPREAD OVER MID-€-SWAP, REMAINING 3.5 YEARS STRAIGHT BOND SERIES E SPREAD OVER MID-€-SWAP, REMAINING 7 YEARS 3.75% PERPETUAL NOTES SPREAD OVER MID-€-SWAP 27
Slide 28: Management
5 MANAGEMENT CEO Christian Windfuhr Mr. Windfuhr is Grand City Properties’ CEO. Before joining Grand City Mr. Windfuhr served as CEO of Maritim Hotels, with 40 hotels in Germany. Prior to this he served as CEO of Mövenpick. He achieved the financial turnaround of Mövenpick, drove international expan
Slide 29: Management
5 MANAGEMENT Senior Management (continued) Uwe Schillinger Mr. Schillinger is GCP’s Director for Technical Service and responsible for the Facility Management. He has 12 years experience in facility management Head of Facility Management and joined GCP in 2006. Mr. Schillinger is an engineer in elec
Slide 30: Credit Rating Matrix
5 CREDIT RATING MATRIX 1 2 3 4 5 6 Min Modest Aggre- High - Intermediate Significant ssive Lever- imal aged 1 aaa Excellent bbb- / aa a+/a a- bbb GCP will continue /bb+ aa+ strengthening its position within the business profile Business risk profile 2 aa/ (Aroundtown) (Vonovia- BBB+)* Strong aa- a+/
Slide 31: Maintaining Strong and Diverse Financing Sources
MAINTAINING STRONG AND DIVERSE 5 FINANCING SOURCES GCP HAS MORE THAN 50 NON-RECOURSE SEPARATE BANK LOANS FROM AROUND 20 BANKS REVOLVING CREDIT FACILITIES Strong corporate credit lines All credit facilities do not with international banking have a Material Adverse leaders of approx. €100 Change (MAC)
Slide 32: London Mannheim Berlin
London Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 32
Slide 33: Cologne Berlin Halle
Cologne Berlin Halle Frankfurt am Main Leipzig Berlin London Berlin Nuremberg 33
Slide 34: Berlin Leipzig Munich
Berlin Leipzig Munich Bremen Wuppertal Dortmund 34
Slide 35: Contact and Disclaimer
5 CONTACT Katrin Petersen Head of Communications E-mail: katrin.petersen@grandcity.lu www.grandcityproperties.com 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 accordanc