Peach Property Group Ag · SIX:PEAN
Peach Property — Investor Presentation (March 2020)
48 slides from Peach Property's investor presentation, Mar 31, 2020
Slide 1: Company Presentation – Annual Investor Presentation
PROPERTY GROUP Company Presentation Annual Investor Presentation March 31, 2020
Slide 2: Disclaimer
Disclaimer ©peach PROPERTY GROUP These materials contain forward-looking statements based on the currently held beliefs and assumptions of the management of Peach Property Group AG, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unkn
Slide 3: Presenters: Dr. Thomas Wolfensberger and Dr. Marcel Kucher
operty Group ©peach PROPERTY GROUP a. Dr. Thomas Wolfensberger Dr. Marcel Kucher
Slide 4: Introduction and strategy
Introduction and strategy Portfolio as of December 2019 . Year end result 2019 . Outlook Corona Update ©peach PROPERTY GROUP
Slide 5: Peach Property Group highlights 2019
Peach s Property as of year end 2019 Highlights 2019 of Peach Property Group ©peach PROPERTY GROUP We are an active real estate investor engaged in the attractive German residential market — with a clear focus on secondary ("B”) cities. Our tenants are at the core of what we do: satisfied tenants wh
Slide 6: Portfolio market value significantly more than CHF 1 bn
Apartments Lettable area Market value Target rent p.a. Rental income p.a. Gross rental yield Vacancy ave increased portfolio market icantly more than CHF 1 bn PROPERTY GROUP ©peach Peach as of 30.6.2019 Peach as of 31.12.2019, incl. acquisitions with Q1, 2020 closing 12,952 apartments (+48%) 863,740
Slide 7: ©peach
©peach PROPERTY GROUP
Slide 8: Growth in portfolio
in growing portfolio ©peach PROPERTY GROUP re Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Acquisitions Acquisition Acquisition residential of two Two portfolios in two of Rheinland, of in Bielefeld of 4,200 residential portfolio in portfolios in buildings Nort
Slide 9: Average tenancy length and rental price stability
Peach average tenancy length ~9.0 yrs (rebased to 100) (rebased to 100) no decline in rental prices in c. 20 years across the economic cycle
Slide 10: A cities vs B cities
A cities B cities 30 25 20 15 10 2008 2010 2012 2014 2016 2018 A cities B cities Inflation rate 180% 160% 140% 120% 100% 80% 1990 1995 2000 2005 2010 2015 ▪ ▪ ▪ (1) Bulwiengesa (2) Bulwiengesa, Statista (3) German Economic Institute
Slide 11: Acquisition process
process that results in quisition © peach v Almost exclusive focus on off-market Sourcing transactions based on strong network in Germany v Swift execution Impeccable reputation v Valued partner respecting confidentiality around deal terms Rigorous ¥ Minimum cash-on-cash yield hurdle of ~6% financia
Slide 12: Integrated value chain platform
Capital markets ▪ Asset / Property Economic Sourcing Modernization Letting management performance ▪ ▪ ▪ ▪ ▪ ✓ ▪ ▪ ✓ ✓ ✓ ✓ ✓ ▪ ✓ ✓ ✓ Tenant relationships ▪ ▪
Slide 13: Tenants at the center of our strategy
ants in the center of our ©peach PROPERTY GROUP Higher rents, better letting and few damages increase value of the real property Value of Satisfied tenants our real are taking better i care of their home Properties and punish “misconduct” eee t recommend us as through social Cost Rental landlord to
Slide 14: Proven and time-tested service model
Proven and time-tested service model that forms the basis for Peach’s strong perception by tenants, ultimately resulting in vacancy reduction and rent optimization
Slide 15: Erkrath and Gelsenkirchen starting January 1, 2020
• • • • • • • • • • (1) Erkrath and Gelsenkirchen starting January 1, 2020
Slide 16: Opportunities in tightening asset market
oportunities in tightening asset ©peach PROPERTY GROUP ..requiring operational improvements ..with focus on lasting tenant together with financial structuring... satisfaction. Multiplier multi-stock buildings, B cities im, im, @, ae NN ath Th HE it A oa 24 — Average ——Maximum eit R itt t ° 2. ° 20 f
Slide 17: Portfolio milestones H2 2019
lio milestones H2 2.019 ©peach PROPERTY GROUP = Acquisition of 4,200 apartments in Bochum, Bielefeld, Gelsenkirchen, Essen, and Investment Velbert portfolio = Portfolio size has grown to 12,424 apartments (+47% compared to YE 2018) with a clear focus on five clusters; closing of further 528 units in
Slide 18: Recent acquisitions
Bielefeld, NRW Essen, NRW Gelsenkirchen and Gladbeck, NRW Velbert, NRW Olio acquisitions ©peach PROPERTY GROUP
Slide 19: Introduction and strategy
©peach PROPERTY GROUP Introduction and strategy . Portfolio as of December 2019 . Year end result 2019 . Outlook . Corona Update 19
Slide 20: Portfolio structure as of December 31, 2019
ortfolio structure as of December 31, 2019 ©peach PROPERTY GROUP Total Portfolio Market Value 1,120.0 mm* 96% 4% Investment portfolio 1,071.5 mm Development 48.5mm 2% 98% 100% Switzer- Germany Switzerland 23.4mm 1,048.1 mm 48.5 mm * Market values determined by Wuest Partner AG as at 31.12.2019, excl
Slide 21: Split by location and usage
Peach Point Split by location (incl. acquisitions) Thuringia 3% Switzerland Lower Saxony 2% 4% Hesse 6% Baden- Württemberg 10% Rhineland- Palatinate 17% North Rhine-Westphalia 58% Split by usage (incl. acquisitions) Parking / Commercial / Other, 3% Office 5% Residential 92% • • • • • •
Slide 22: Key portfolio figures 31.12.2019
31.12.2019 Number of residential units 12,424 Total area in sqm 827,525 Residential area in sqm 786,287 Commercial area in sqm (Floor space DIN 277) 38,736 Office space in sqm (Floor space DIN 277) 2,502 Actual rental income in TCHF + 38,915 Maintenance costs in TCHF * 5,275 Administrative and opera
Slide 23: Reduction of vacancy ratio
t reduction of vacancy ratio... ©peach PROPERTY GROUP Development of vacant apartments and vacancy ratio 1,158 1,054 30.06.2018 31.12.2018 30.06.2019 31.12.2019 Vacancy ratio reduced by 28% over the past 18 months 23
Slide 24: Breakdown of vacant apartments
to continuous renovation of letting ©peach PROPERTY GROUP Breakdown of vacant apartments as of December 31, 2019 “Factual vacancy” (c. 2.3%) k We are reducing 1,158 i \ vacancy bY Pl approx. 20- 115 | 756 apts per month 193 94 Total vacancy @ contract signed @lLetting process @under renovation Olett
Slide 25: Wüest Partner valuation as per December 31, 2019
• • • * According to Wüest Partner valuation as per December 31, 2019. .
Slide 26: Development project in Wädenswil on Lake Zurich
lopment project in denswil on Lake Zurich Siepenry GRou ©peach Peninsula, Wadenswil * Peninsula on Lake Zurich with 17,837 sqm land * 5,600 sqm commercial space plus 29 rented apartments as investment properties * Additionally, 58 condominiums in planning stage; combination of renovating existing bu
Slide 27: Introduction and strategy
©peach PROPERTY GROUP Introduction and strategy Portfolio as of December 2019 Year end result 2019 Outlook Corona Update 27
Slide 28: Revenues, result after tax, equity ratio, portfolio 2016-2019
©peach PROPERTY GROUP Revenues 2016 - 2019 Result after tax 2016 - 2019 TCHF | 160,734 TCHF | | | 91,004 115,858 119,707 ! | | H 562 | 41,924 45,319 | | | I 11,586 | l a” | : * 2017 2018 | 2019 2016 * 2017 2018 2019 Equity ratio 2016 — 2019 Portfolio at market values 2016 — 2019 at market values I C
Slide 29: Diluted earnings per share
©peach PROPERTY GROUP Diluted earnings per share CHF 12.06 * Diluted earnings per share more than 6.70 doubled 5.56 ¢ Return on equity (ROE) of around 30% based on the closing price on December 31, 2019 31.12.2017 31.12.2018 31.12.2019 29
Slide 30: Rental income from investment properties
investment properties ©peach PROPERTY GROUP Development rental income : : Rental income by type of use and gross margin HEB Actual rental income — Gross margin TCHF Parking & Others % Commercial 3% 38,915 & Office 5% Residential 92% 31.12.2017 31.12.2018 31.12.2019 ¢ Actual rental income increased b
Slide 31: Vacancy, letting price, OPEX and CAPEX
©peach PROPERTY GROUP 13.5% 12.5% Vacancy (in % of total # apartments) * The central speed inhibitor stems from tense construction market which prohibits faster renovations 9.3% * Reduction of vacancy by around 26 percent * 2.3% effective vacancy on rentable apartments 6.09 6-30 5.85 2019 excl. new
Slide 32: Investment property valuation gains
t property valuation gains ©peach PROPERTY GROUP Valuation gains and gross rental yield in % of investment properties Initial valuation [ff Operational progress & discount rate IB Gross rental yield 11% 9% 5 Average discount rate: 8% 2017: 4.45% . 2018: 4.14% 5.40% 5.60% 5.40% 2019: 3.93% 31.12.2017
Slide 33: Development of operational costs
f operational costs ©peach PROPERTY GROUP Personnel expenses in Other operating expenses in % of operating result % of operating result 12.20 31.12.2017 31.12.2018 31.12.2019 31.12.2017 31.12.2018 31.12.2019 * Insourcing of central steps along the value chain (Peach Points, new back- office in Berli
Slide 34: Financial expenses and tax expenses
©peach PROPERTY GROUP Financial expenses Tax expenses in % of total portfolio value in % of result before tax BB Interest and other financial expenses IB Tax expenses as Bi Tax expenses excl. Gretag reported property gains tax 19.0% le 19.3% ==. Se ve 18.7% Teese een 17.0% 13.2% 31.12.2017 31.12.201
Slide 35: Balance sheet key figures
©peach PROPERTY GROUP 53,484 -14% TCHF Cash & cash equivalents Development properties 37,263 -9% Investment properties (incl. non-current assets held for sale) 693,740 +60% Current financial liabilities 38,507 -2% Non-current financial liabilities 424,402 +66% 54.7% +9% 45.9% -36% Net LTV Net secure
Slide 36: Maturity structure of financial liabilities
©peach PROPERTY GROUP TCHF 2 2018 Maturity structure 2019* Current mortgages 28.358 29.514 more than up to 1 year 5 years 37.358 Non-current mortgages 548.554 363.545 200.202 Syndicated loan Lease liabilities 15.698 1-5 years Other financial liabilities 20.676 14.103 488.057 Interest coverage ratio
Slide 37: Financial liabilities and financing costs
©peach PROPERTY GROUP Financial liabilities & bond ® Mortgages & building loans 3.81% 3.52% 3.61% 31.12.2017 31.12.2018 31.12.2019 * Slight increase of financing cost from 2,54% to 2,84% due to EUR bond * Rates include interest rate hedges (mostly swaps) * Financing for German portfolio in EUR 37
Slide 38: Equity and equity ratio at market values
©peach PROPERTY GROUP Equity and equity ratio at market values Equity values 31.12.2019 31.12.2018 401,298 NAV IFRS (TCHF) --389,564 301,252 NAV market value (TCHF) 401,298 314,061 314,061 thereof hybrid bonds (equity) 272,214 (TCHF) 91696 112,841 ° Po 37.70% Equity ratio (NAV IFRS) | ae NAV (IFRS)
Slide 39: Introduction and strategy
. Year end result 2019 ©peach PROPERTY GROUP Introduction and strategy . Portfolio as of December 2019 . Outlook . Corona Update 39
Slide 40: Further growth in rental income and operational efficiency
her growth in rental income ©peach operational efficiency PROPERTY cRovP Optimization of the existing investment portfolio Increase of tenant satisfaction Further vacancy reduction Rent optimization Reduction of non- recoverables Increase of administrative efficiency (cluster, digitalization....) PL
Slide 41: Capital markets history
EuroBond 3,5% EUR 250 mm; maturity 3 ¼ years Conversion of ~50% of 3% CHF 59 mm hybrid convertible bond at CHF 28.50 Repayment 5% CHF 50 mm hybrid bond Option hybrid bond 1.75% CHF 58 mm, option price CHF 25.00, listed in Zurich Hybrid convertible bond 3.0% CHF 59 mm, conversion price CHF 29.50, lis
Slide 42: Corporate Bond EUR 250 mm
rate Bond EUR 250 mm ©peach PROPERTY GROUP J.PMorgan CreDit Suisse Issuer Peach Property Finance GmbH Ratings: The Issuer's obligations under the Bond will be Guarantee guaranteed on a senior basis by Peach Property Group AG Moopy’s Issue Euro 250,000,000 Interest 3.50% p.a. Issue date November 15,
Slide 43: Introduction and strategy
©peach PROPERTY GROUP Introduction and strategy . Portfolio as of December 2019 . Year end result 2019 . Outlook . Corona Update 43
Slide 44: Corona update: Employees
Employees ©peach PROPERTY GROUP Gradual increase in job security and ensuring compliance with rules of conduct (dispensers with disinfectant, distance rules, flexible home office, mostly home office) So far, no corona cases at Peach No increased employee absences / normal flu as well as some childca
Slide 45: Corona update: letting and cash position
©peach PROPERTY GROUP = So far, letting runs normally: ™ January: 145 rentals ™ February: 163 rentals ™ March (as of March 26): 127 rentals ™ Expectation of less activity but also fewer terminations starting April ™ Changeover to marketing videos for a first impression followed by 1: 1 visits for se
Slide 46: Long-term prospects and outlook
©peach PROPERTY GROUP = Long-term prospects difficult to assess; depend on the further course of restrictions ™ Peach in a very good position, since living is not substitutable and we offer mostly affordable housing > Potential for additional tenants who want / need to adjust their housing budget =
Slide 47: Successful transactions since 2013
©peach PROPERTY GROUP + > CHF 2 bn successful transactions since 2013 Experienced team with a proven + Strong asset management platform transaction track record + Acquisition department with significant pipeline f * 90+ real estate professionals in Cologne, Berlin and Zurich Germany: attractive real
Slide 48: Investors, Analysts and Media contacts
y = Investors, Analysts and Media: ©) peach Dr. Thomas Wolfensberger, Chief Executive Officer PROPERTY GROUP Dr. Marcel Kucher, Chief Financial Officer +41 44 485 50 00 investors@peachproperty.com Wachsen mit Werten.
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