Peach Property Group Ag · SIX:PEAN
Peach Property — Investor Presentation (June 2021)
36 slides from Peach Property's investor presentation, June 2021
Slide 1: Company Presentation
Company Presentation June, 2021 1
Slide 2: Disclaimer
Disclaimer These materials contain forward-looking statements based on the currently held beliefs and assumptions of the management of Peach Property Group AG (hereinafter also referred to as “PPG” or “Peach Property”), which are expressed in good faith and, in their opinion, reasonable. Forward-loo
Slide 3: Presenters
Presenters Dr. Thomas Wolfensberger, Chief Executive Officer • >20 years of experience, including Project manager for successful IPO, bond issuances and real estate transactions with total volume of more than EUR 3 billion • Previously he formed and later sold an international financial technology c
Slide 4: Mandatory convertible bond offering
Mandatory convertible bond offering Issuer Peach Property Group AG Early conversion The Bonds may be converted at any time from and including 19 July Listing SIX Swiss Exchange 2021 until 23 July 2021 and from and including 20 September 2021 until 24 September 2021 at the conversion price Nominal va
Slide 5: Summary
Summary • Attractive German residential market fundamentals: growing number of households, considerable housing shortage (350,000 unmet annual demand for apartments) and significant yield markups in B- cities • CHF 2.1bn German residential portfolio, focused on affordable housing in carefully select
Slide 6: Agenda
Agenda 1. Overview Peach Property 2. Project Eagle 6
Slide 7: Strong track record in growing portfolio
Strong track record in growing portfolio Acquisition Acquisition of Acquisition Acquisition of Acquisition of Acquisition of Acquisition Acquisitions in Acquisition of Acquisition of Proposed residential two portfolios of two portfolios in two portfolios Rheinland, i.a. of Bielefeld 4 200 units resi
Slide 8: Peach properties
Peach properties Affordable German residential properties in carefully selected B-cities 8
Slide 9: Germany has the largest housing market in Europe and is structurally undersupplied
Germany has the largest housing market in Europe and is structurally undersupplied Largest housing markets in Europe… …with a strong rental culture… Distribution of population between owner occupiers and tenant3 Total population per country1 Total households 1 83,2 Owner Tenant 67,1 67,0 100% 60,2 7
Slide 10: Germany's affordable housing segment is extremely stable…
Germany’s affordable housing segment is extremely stable… Low, stable vacancy rate through the cycle… … with exceptionally high average tenancy length3 German residential vacancy rate¹ German office vacancy rate² Peach Property average tenancy length 12,0% ~10 years 10,0% 8,0 yrs 8,0% 5,0 yrs 6,0% 3
Slide 11: … especially in secondary ("B")-cities that offer an attractive risk/return profile
… especially in secondary (“B”)-cities that offer an attractive risk/return profile Peach: 5.0% • B-cities with attractive yields • Growth prospects on the basis of population growth and space consumption • Lower exposure to external shocks due to significantly lower cost ratios 11
Slide 12: More than 60% of portfolio in NRW – Germany's economic engine
More than 60% of portfolio in NRW – Germany’s economic engine Key economic regions in Germany… …and home to a high number of large German corporates • Key metropolitan area in Germany, and one of the largest in Europe (17.9m inhabitants1) • Germany’s economic hub, generating approx. 21% of German GD
Slide 13: Structured acquisition process that results in strategically sound acquisitions
Structured acquisition process that results in strategically sound acquisitions... ✓ Almost exclusively focussed on off- Sourcing market transactions based on strong network in Germany Evaluation of around 4.7 million sqm (2020) ✓ Swift execution Impeccable reputation ✓ Valued partner respecting con
Slide 14: … building on a strong digital platform...
… building on a strong digital platform... Capital markets ▪ Institutional investors debt / equity, private investors Asset / Property Economic Sourcing Modernization Letting management performance ▪ Access to off-market ▪ Comprehensive renovations to ▪ Combination of online & offline ▪ Highly effic
Slide 15: … with satisfied tenants as central focus point
… with satisfied tenants as central focus point Higher rent, better letting and fewer damages all increase value of real estate Value of our Satisfied tenants look real better after their properties apartments and hold Satisfied tenants recommend “misconduct” us as landlord to family and accountable
Slide 16: Peach Points: Client service excellence delivered through regional service hubs
Peach Points: Client service excellence delivered through regional service hubs Regional service hubs Digital capabilities Tried and tested service model that forms the basis for Peach Property Group’s high regard by tenants, ultimately resulting in vacancy reduction and rent optimization Source: Co
Slide 17: Fully digitalized scalable platform
360 degree tenant service model: strong digital capabilities embedded in regional service hubs Tenants with full, multi-channel access: Tenants ▪ Online (24/7): App, Web Portal, E-Mail ▪ Offline: Telephone, Peach Points FULLY DIGITALIZED SCALABLE PLATFORM Property Management in Peach Points ▪ All te
Slide 18: Acquisitions complement existing focal areas and strengthen market position in core regions
Acquisitions complement existing focal areas and strengthen market position in core regions Well-located portfolio with relevant scale Optimum supplement for existing locations Investment Portfolio Split by location (% of market value) Peach Point Thuringia 1% New Peach Point Kiel Mecklenburg Wester
Slide 19: Peach Property's comprehensive sustainability view
Peach Property‘s comprehensive sustainability view Ethical values in daily dealings with one Responsibility towards all shareholders another GOVERNANCE • EPRA NTA per share: CHF 57.29 (plus 13%) • Proportion of employees with Code of • FFO I per share: CHF 0.59 (negative value in Conduct training: 1
Slide 20: Increase in Rental Income and Margin; over 96% of Rental Income from residential
Increase in Rental Income and Margin; over 96% of Rental Income from residential Development of Rental Income and Operating Strong like-for-like rental growth Margin 4,5% 4,7% Rental Income Operating Margin 3,2% CHF million in % 54,7 2018 2019 2020 38,9 29,6 Outperforming peers Like-for-like rental
Slide 21: Vacancy ratio has been reduced significantly
Vacancy ratio has been reduced significantly Development of vacant residential units and Vacant residential units by vacancy category vacancy ratio 1,842 1,842 152 Like-for-like 529 1,158 vacancy: 1,054 7.0% 267 12,5% 262 632 9,3% 7,9% “effective vacancy” (c. 2.9%) Dec 31, 2018 Dec 31, 2019 Dec 31,
Slide 22: Attractive potential to further increase rent
Attractive potential to further increase rent +23% +16% +13% +15% +12% +17% +11% +16% EUR/sqm 6,95 6,82 6,33 6,65 6,73 6,59 6,07 6,40 6,40 6,41 6,21 6,26 6,09 6,08 • Attractive rent potential 6,01 5,79 5,72 5.47 in all core portfolios 5,65 5,50 5,56 5,17 • Focus on leveraging 5,05 4,88 potential ove
Slide 23: Significant economies of scale in overhead cost
Significant economies of scale in overhead cost Personnel expenses as Other operating expenses as % of operating result % of operating result 11,81 8,72 7,52 7,08 4,68 3,50 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 • Insourcing of central steps in the value chain
Slide 24: Ongoing Maintenance vs. Renovation
Ongoing Maintenance vs. Renovation Maintenance Renovations OPEX (per sqm) CAPEX (per sqm) 8,80 8,76 7,05 5,72 5,93 5,04 33,8 28,3 20,8 2018 2019 2020 2018 2019 2020 Maintenance Administration > 1 200 renovated apartments in 2020 • Total capex of CHF 24.1 million in apartment • Flat maintenance costs
Slide 25: Significant valuation gains in light of attractive rental yield
Significant valuation gains in light of attractive rental yield Valuation gains and gross rental yield in % of investment properties Initial valuation Gross rental yield Operational progress & discount rate 10.5% Average discount rate: 7.9% 7.6% 2018: 4.1% 2019: 3.9% 5,60% 5,40% 5,00% 2020: 3.9% Dec
Slide 26: Balance sheet key figures
Balance sheet key figures TCHF 2020 2019 Net LTV Cash & cash 67,656 46,248 equivalents 59,6% 57,8% Development 38,969 33,757 properties 54,7% Investment properties 2,065,045 1,082,058 (incl. assets held for sale) Current financial 177,354 37,869 liabilities Non-current 1,169,279 703,446 financial li
Slide 27: Interest rates financial liabilities
Interest rates financial liabilities Unsecured loans Secured loans 3,5% 3,6% 3,5% 2,4% 2,2% 2,0% Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 • Slight increase of financing cost from 2.8% to 3.0% due to EUR bond II • Rates include interest rate hedges (mostly swaps) • Financing for German portfolio in EUR
Slide 28: Strong NAV growth in 2020
Strong NAV growth in 2020 Strong EPRA NTA growth Equity values Dec 31, Dec 31, 2020 2019 +13% NAV IFRS (TCHF) 754,862 389,564 57,29 50,63 NAV market value (TCHF) 762,459 401,298 thereof hybrid bonds (equity) 90,682 91,696 (TCHF) Equity ratio (NAV IFRS) 33.9% 32.3% NAV (IFRS) per share (CHF) 50.70 43
Slide 29: Agenda
Agenda 1. Overview Peach Property 2. Project Eagle 29
Slide 30: Peach's portfolio will grow to CHF 2.5 bn with EAGLE transaction
Peach’s portfolio will grow to CHF 2.5 bn with EAGLE transaction Peach Portfolio as of Portfolio acquisition Pro Forma YE 2020 “EAGLE” Peach plus Eagle Apartments 23,201 apartments 4,340 apartments 27,541 apartments (+19%) Lettable area 1,505,900 sqm 275,822 sqm 1,781,722 (+18%) Market value CHF 2.0
Slide 31: Project Eagle: Further Growth in 2021
Project Eagle: Further Growth in 2021 Basic Idea of Eagle: 1. Annual rental income to increase to CHF 116 mm+ which will further bring Peach on landscape in Germany • Further growth for Peach 2. Higher revenues will allow significant economies of scale due to leverage of existing systems, processes
Slide 32: The newly identified portfolio complements the existing portfolio
The newly identified portfolio complements the existing portfolio Perfect fit to current Peach portfolio New Bremen cluster, basis for regional expansion Ruhr region (+4,000 apartments) Bremen (+340 apartments) Dinslaken Bremen Meppen Dortmund Celle Duisburg Hattingen Hemer Kempen Hannover Rheine Dü
Slide 33: Impressionen Portfoliozugänge 2021
Impressionen Portfoliozugänge 2021 Marl Nordrhein-Westfalen Dortmund Nordrhein-Westfalen Breme, Delmenhorst, Ganderkesee Bremen/Niedersachsen Bochum Nordrhein-Westfalen Gelsenkirchen Nordrhein-Westfalen 33
Slide 34: Attractive potential to further increase rent
Attractive potential to further increase rent +23% +16% +13% +15% +12% +17% +11% +21% +17% EUR/sqm 7,09 ▪ Attractive rent 6,82 6,95 6,95 potential in all 6,65 6,73 6,59 6,45 core portfolios 6,21 6,40 6,40 6,26 6,41 6,28 6,09 6,08 6,01 5,86 ▪ Focus on 5,79 5,72 5,65 5,56 leveraging 5,50 5,54 potentia
Slide 35: Dividend policy
Dividend policy Dividend policy – Dividend policy - calculation Dividend policy - distribution Principles • Distribution is based on • In line with FFO generation • Continued growth in order to operating cash flow (FFO II), net • Allows further above-average consolidate position in the of strategic
Slide 36: Contact
Contact: Dr. Thomas Wolfensberger, Chief Executive Officer Thorsten Arsan, Chief Financial Officer +41 44 485 50 00 investors@peachproperty.com
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