First Property Group Plc · LSE:FPO
First Property — Investor Presentation (November 2012)
32 slides from First Property's investor presentation, November 2012
Slide 1: The Investment Case for Polish Commercial Real Estate
The Investment Case for Polish Commercial Real Estate The performance of funds managed by First Property Group ranked No.1 vs IPD CEE universe over the three, four, five & six years to 31 Dec 2008, 2009, 2010 & 2011 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270
Slide 2: Table of Contents
Table of Contents Introduction 3-4 Fund Manager 17-24 First Property Group plc 3 Investment Philosophy 18 Track Record – Performance 4 Track Record 19 Investment Opportunity – Poland 20 Macroeconomics - Poland 5-12 Investment and Operations Team 21-23 Size of Polish Economy 6 Case Studies – Poland 2
Slide 3: First Property Group plc
First Property Group plc First Property Asset Management Ltd First Property Group plc is a commercial property fund manager with operations in the United Kingdom & Central Europe. First Property Group plc is listed on the AIM segment of the London Stock Exchange (AIM: FPO) and was founded in 2000 by
Slide 4: First Property Asset Management Track Record
First Property Asset Management Track Record (at 30 September 2012) Fund performance at 30 September 2012: • FPAM’s three historic funds (all of which were invested in UK commercial property) generated a weighted average IRR of 23.0% p.a. net of fees. • FPAM’s five discretionary active funds (with i
Slide 5: Macroeconomics - Poland
Macroeconomics - Poland 6 Size of Polish Economy 7 GDP Growth 8 Capital Inflows 9 Consumer Spending 10-11 Additional Supporting Factors 12 Government Debt & Current Account Balance Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 5
Slide 6: Size of Polish Economy
Macroeconomics Size of Polish Economy Poland is the 7th largest economy in the EU with a Poland is the largest economy in emerging Europe nominal GDP in 2011 of $515bn: with the second largest population size after Ukraine: GDP of EU-27 GDP and Pop. Size of Emerging European countries current prices
Slide 7: GDP Growth
Macroeconomics GDP Growth Poland has a strong balanced economy with around Poland is the only EU member state not to enter 60% of GDP generated internally recession since the onset of the credit crunch Exports as % of GDP GDP (2002 - 2011) Selection of European Economies (2011) Poland UK Germany Eme
Slide 8: Capital Inflows
Macroeconomics Capital Inflows Poland is a large recipient of FDI and is the largest beneficiary from the EU Cohesion Policy budget 2007-20131 It is expected to receive a similar amount in the 2014-2020 EU budget 2 Foreign Direct Investment into Poland (2004-2011) EU Subsidies: FDI - Poland Weighted
Slide 9: Consumer Spending
Macroeconomics Consumer Spending Poland’s GDP per capita is forecast to grow twice as fast Polish retail sales have held up relatively well over the as the UK’s over next 40 years1 credit crunch GDP per capita Retail Sales Growth year on year % change (2002 -2011) year on year % change (2002 - 2011)
Slide 10: Additional Supporting Factors – Labour Market
Macroeconomics Additional Supporting Factors – Labour Market Poland benefits from a young, low cost, and highly educated labour market Cost of labour Average hourly labour costs in € (2008 & 2011) Youthful: 32 2008 2011 71% aged 15-64 years (UK = 66%)1 28 24 14% aged 65+ (UK = 17%) 20 16 Low
Slide 11: Additional Supporting Factors – Banking & Shale Gas
Macroeconomics Additional Supporting Factors Polish banks are better capitalised than those in Poland has large shale gas reserves which will Western Europe reduce dependence on Russian natural gas imports Tier 1 Capital Ratio of all Banks in Selected Countries Current estimates of technically recov
Slide 12: Government Debt & Current Account Balance
Macroeconomics Government Debt & Current Account Balance Poland has a low debt-to-GDP ratio compared to Poland’s current account deficit trend. Western Economies. Government debt (gross) Current account balance as a percentage of GDP (2002 – 2012) as a percentage of GDP (2002 – 20012) Poland United
Slide 13: Polish Commercial Property Market
Polish Commercial Property Market 14 Yield and Rent History 15 Investor Demand & Liquidity 16 Technical Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 13
Slide 14: Yield and Rent History
Polish Commercial Property Market Yield and Rent History Change in yields during credit crunch Change in prime rents during credit crunch Poland vs UK (2002 – 2012) Poland vs UK (2002 – 2012) Poland Prime Yield UK Prime Yield Warsaw Prime Office Rent London Prime Office Rent 7.5% 100 Yield p.a. £ pe
Slide 15: Investor Demand & Liquidity
Polish Commercial Property Market Investor Demand & Liquidity Investor Demand & Liquidity: Current legislation prohibits domestic institutional investors Total Investment Deals in Poland from investing in non-listed assets (2002 – 2012) 6 € Billions WSE listed property company’s tend to be focus
Slide 16: Technical
Polish Commercial Property Market Technical Transaction Costs: Polish Lease Structure: Standard costs: Lease lengths Typically 3 - 10 years. Poland UK Longer leases with major tenants becoming more common following Agent Fees 1% 1% law change in January 2009 permitting new leases up to 30 ye
Slide 17: Fund Manager
Fund Manager 18 Investment Philosophy 19 Track record 20 Investment Opportunity – Poland 21-23 Investment Team 24 Case Studies 25 Selection of Polish tenants Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 17
Slide 18: Investment Philosophy
First Property Asset Management Investment Philosophy Our investment philosophy: Sustainable income is a priority. A fundamental approach to investing: Property is illiquid: Consensus may chase a particular investment This illiquidity can be mitigated by rental income – theme but that does
Slide 19: Track Record - History
First Property Asset Management Track Record - History FPAM’s UK Purchase & Sale History (2002-12) Highlighting strategic decision to exit UK commercial property at peak of the bubble. “…the commercial property investment market in the UK has risen sharply over the last few years and a large 2012 Re
Slide 20: Investment Opportunity – Poland
First Property Asset Management Investment Opportunity – Poland Fprop Opportunities plc (FOP) was established in Oct-2010 with £8.28 million of equity, comprising £7 million from First Property Group plc and a further £1.28 million from staff, their families and friends. Currently open to subscripti
Slide 21: Investment Team - UK
Fund Manager Investment Team - UK Group Chief Executive & FPAM Chief Investment Officer — Ben Habib, MA (Cantab) Ben founded First Property Group plc in 2000. He is responsible for all aspects of the operations of Fprop and its fund management business. Subject to the terms and conditions of any giv
Slide 22: Investment Team - Poland
Fund Manager Investment Team - Poland Managing Director, First Property Poland - Premyslaw Kiszka, MA, CFA Przemek joined Fprop in 2006 to manage its Polish subsidiary, First Property Poland Sp. z o.o., which now employs 19 staff. His key responsibility is asset management, which involves enhancing
Slide 23: Operations Team - UK
Fund Manager Operations Team - UK Group Chief Financial Officer & Company Secretary — George Digby, BA (Hons), ACA, IMC George joined Fprop in 2003 and has overseen the rapid expansion of the fund management division during this period, including the development of the operation in Poland, involving
Slide 24: Case Studies: Poland
Fund Manager Case Studies: Poland Lodz, Central Poland Krasnystaw, East Poland Warsaw City Centre Warsaw CBD Sector Retail Sector Shopping Ctr Sector Office Sector Office Tenant Carrefour Tenant Multi-let Tenant Multi-let Key Tenant Citibank Fund FOP Fund FOP Fund n/a Fund USS Purchase Date Oct-2010
Slide 25: Selection of Polish Tenants
Fund Manager Selection of Polish Tenants Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 25
Slide 26: Appendices
Appendices 27 Property Investor Europe (PIE magazine) 04 June 2012, p.49, Ben Habib 28-29 FT Adviser - Polish property offers good prospects, 23 January 2012 30-31 IPE Real Estate investment opportunities in Polish real estate, 01 November 2011 Email jeremy.barkes@fprop.com Phone +44 20 7340 027
Slide 27: Property Investor Europe – 4 Jun 2012
Published Articles by Ben Habib Property Investor Europe (PIE magazine) – 4 Jun 2012 Investor giving Polish commercial property a miss will be losing out By Ben Habib, Property Investor Europe Published 4 June 2012 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 27
Slide 28: FT Adviser – Polish property offers good prospects
Published Articles by Ben Habib FT Adviser – 23 Jan 2012 Polish property offers good prospects By Ben Habib, FT Adviser, published 23 January 2012 It was the only EU member country not to go into Attractive environment The higher yields available on property investments recession following the onset
Slide 29: FT Adviser – Polish property offers good prospects (cont.)
Published Articles by Ben Habib FT Adviser – 23 Jan 2012 Polish property offers good prospects (cont.) The Polish zloty has already weakened to reflect While this is forecast to grow in Poland by some 50 per the southeast of the country, and there is apparently the above. This should provide a degre
Slide 30: IPE Real Estate – CEE's largest economy offers institutional opportunities
Published Articles by Ben Habib IP Real Estate – 1 Nov 2011 CEE's largest economy offers institutional opportunities By Ben Habib, IPE Real Estate Magazine, published 1 November 2011 Poland is the seventh largest economy in the EU As a result of the relative health of Polish banks, it So where are t
Slide 31: IPE Real Estate – CEE's largest economy (cont.)
Published Articles by Ben Habib IP Real Estate – 1 Nov 2011 CEE's largest economy offers institutional opportunities (cont.) The other significant commercial property What to avoid… Notwithstanding the above, an institutional quality investment opportunity in Poland and Warsaw in industrial warehous
Slide 32: Disclaimer
Disclaimer This presentation has been prepared by First Property Asset Any investment to which this presentation relates is available Management Limited for information purposes only and does only to those persons described above. Persons of any other not constitute an offer, recommendation or solic
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