Dream Unlimited Corp. Class A · TSX:DRM
Dream Unlimited Corp. Class A — Dream Global REIT — Investor Presentation (August 2019)
53 slides from Dream Unlimited Corp. Class A's investor presentation, August 2019
Slide 1: Dream Global REIT Investor Presentation August 2019
dream @ global REIT Investor Presentation August 2019
Slide 2: Presentation overview
Presentation overview Section 1 Qur Company and Strategy Section 2 Investment Highlights Section 3 Portfolio and Platform Section & Financial Highlights Section 5 Environmental, Social:and Governance
Slide 3: Our Company and Strategy
Our Company and Strategy
Slide 4: Company Overview
dream global REIT Dream Global REIT [TSX:DRG.UN; FSE:DRG] is an owner operator of a diversified high quality portfolio of predominantly office properties. Our properties are located in key markets in Western Europe with strong operating fundamentals and operated by an in-house local team of 140 real
Slide 5: Portfolio Strategy & Acquisitions
Portfolio Strategy & Acquisitions Maintain balanced portfolio of Core/Core+ & Value-add assets providing sustainable & growing cash flows and superior risk-adjusted returns. Recycle capital out of non- core assets and reinvest in higher quality properties in strong or improving markets. Maintain rob
Slide 6: Portfolio Strategy
dream global REIT Current Current Current \: ii sii "Germany Portfolio Strategy "Core/Coret = Office 1 Netherlands "Value-Add a Industrial ™ Belgium ™ Redevelopment. = Austria = Non-Core Target Target Target 90-95% - Office 70-80% - Germany 80-85% - Core & Core+ 5-10% - Industrial 15-25% - Netherlan
Slide 7: Acquisition Strategy
Acquisition Strategy dream global REIT Target desirable, well located, multi-tenant office properties that attract and retain tenants in Properties markets exhibiting robust fundamentals. Target select industrial opportunities that are complementary to current industrial portfolio. Target office mar
Slide 8: Development Strategy
dream global REIT Opportunity Rationale Considerations Development Strategy 16 properties, totaling 53" acres of land (current book value of approx. $176! m) with potential for development, intensification or conversion into higher yielding and more valuable uses Developments largely comprised of re
Slide 9: Conservative Financial Policy
Sobel er Financial Policy Debt Structure ream Global Fi cial Poli \"] ™ Senior Unsecured Notes Maintain leverage? in the low 40% range or below = Non-Recourse Staggered and long debt maturity profile with focus on fixed rate debt Mortgage Debt = Non-Recourse Target interest coverage ratio greater th
Slide 10: Track Record of Total Returns
dream global REIT Track Record of Total Returns Stable Returns & Consistent Outperformance veo, 53% 13% Last 24 months Total Total Return! since inception®, 160% 140% 120% 100% 80% Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 ——Dream Global REIT S&P/TSX Capped
Slide 11: Global Visibility & Solid Trading Liquidity
dream gobalrat Global Visibility & Solid Trading Liquidity Market Liquidity: With a market capitalization of $2.7 billion (€1.9 billion) and dual listing on the TSX and FSE S&P/TSX S&P/TSX FTSE EPRA ~$5.7M ~$0.8B Capped REIT Index Composite Global Avg. Daily Index Index Volume 2019! Total Volume 201
Slide 12: H1 2019 Highlights
global REIT H1 2019 Highlights $432 million fair value gains over first half of 2019 CP NOI growth of 4.2%‘ year-over-year 150 bps increase in occupancy? year-over-year Acquisitions of $135.2 million and dispositions of $144.8 million over first half of 2019 Leverage of 38.5% (40.7% with JV), declin
Slide 13: Investment Highlights
Investment Highlights
Slide 14: Balanced Total Return Model
dream global REIT Balanced Total Return Model Strong Real Estate Markets Sustainable Distributions Growing NOI & NAV High Quality Portfolio Balanced Asset Base Strong Balance Sheet Organic Growth Well-Diversified Tenant Base Value Creation & Redevelopment Conservative Payout Ratio Acquisitions Skill
Slide 15: Strong Employment Growth In Our Markets
dream Strong Employment Growth In Our Markets global REIT Germany Netherlands 43.0 8.0 oc 2 & 78 E 42.0 2 7.6 3 S é 41.0 Th 3 z ao ene . 7.2 one . — 40.0 2.7 million jobs 0.7 million jobs ao) added over past 5- 70 added over past 5- $ ear period . ear period 2 390 year pi year pi 6.8 38.0 6.6 2014 2
Slide 16: Strong Occupier Market Fundamentals In Germany
Sobel er Strong Occupier Market Fundamentals In Germany Continued Reduction in Vacancy Rate Big 7' Continued Yield Compression 8.0% 7.5% 5.0% 7.0% 6.3% 4.5% 6.0% 5.5% 5.0% 4.7% ‘0% 4.0% 3.6% 3 a9, 3.5% 3.0% 3.0% 3.1% 2.0% Big 7 Prime Yield Range 1.0% 25% — Big 7 Average Prime Yield 0.0% 2.0% 2014 20
Slide 17: Strong Occupier Market Fundamentals In Netherlands
Sobel er Strong Occupier Market Fundamentals In Netherlands Continued Reduction in Vacancy Rate G5! Continued Yield Compression 16.0% 14.7% 14.7% 7.0% 14.0% oom 11.9% 6.0% 0% 5.0% 10.0% 8.8% ° 9 8.0% 7.0% 7.0% 4.0% 3% 6.0% 3.0% 4.0% G5 Prime Yield Range 2.0% 2.0% == G5 Average Prime Yield 0.0% 1.0%
Slide 18: Airport Plaza, Brussels / Flight Forum, Eindhoven
irport Plaza, Brus = Flight Forum: Eindhoven
Slide 19: Strong Balance Sheet
dream global REIT Leverage Reduction Debt Maturities? 55% 50% 45% 40% 35% 30% Strong Balance Sheet 3.30% 38.5% 2.49% [| | 1.83% 1.64% 1.64% 1.64% 2014 2015 2016 2017 2018 = Q22019 lll Weighted Average Interest Rate =—®—Leverage Target leverage’ of low 40% or below with attractive cost of debt 10% 8%
Slide 20: Tenant credit ratings
63 5.7% BBB+ • • 2 2.2% A+ 1 1.9% - • 4 1.8% AAA 1 1.7% AA- 3 1.7% A+ 1 1.1% AAA1 1 1.0% A- 1 0.9% AA+ 1 0.9% - n/a 81.1%
Slide 21: Conservative Payout Ratio
dream global REIT Conservative Payout Ratio Growing FFO per unit Improved Payout Ratio $1.20 110% _ ee 100% 90% $0.80 77% 80% $0.60 70% 4 $0.40 60% $0.20 50% S 40% 2015 2016 2017 2018 Q2 2019 2015 2016 2017 2018 Q2 2019 annualized annualized Increase in FFO driven by strategic Sustainable distributi
Slide 22: Balanced Asset Base
dream global REIT Classification Balanced Asset Base GAV Key Metrics Core & Core+ Value-Add Redevelopment Non-Core 121 properties 96% occupancy! 4.8Y WALT? $5,170M (88% of total) 4O properties 68% occupancy’ 4.9Y watt $476M (8% of total) 16 properties 53 acres land areas $176M (3% of total) 38 prope
Slide 23: Track Record of Organic Growth
dream H 6 | global REIT Track Record of Organic Growth Strong Occupancy Growth Strong Track Record of CP NOI Growth Comparative June 30, June 30, Portfolio 2019 2018 % 6.6% Core/Core+ 96.2% 95.7% Q3 2018 Qk 2018 Value-Add 66.3% 60.1% 9% 3.4% (J e 0 Income Portfolio 91.2% 89.7% +23%' EPRA NAV/unit Gr
Slide 24: Track Record of Organic Growth: Rents and Occupancy
Track Record of Organic Growth Fe | dream global REIT Rental Upside from Marking Leases to Market Growing Rents & Occupancy mmm Rent —— Occupancy ou Region Average Average Rental 92% Property Rents! Market Rents Spread $15 (S/sqft/year) (S/sqft/year) 90% Germany, $10 f 88% Austria & $19.02 $21.39 12
Slide 25: Redevelopment Portfolio
dream global REIT Redevelopment Portfolio Residential Development Commercial Development * Mixed-use residential projects in Germany & * Commercial Projects including office, light Netherlands industrial, hotel and other commercial uses * Intend to maximize value through entitlements * Projects incl
Slide 26: Acquisition: purchase price and going-in cap rate
€22.4M 4.6% 59% 121K? Purchase Going-In Price Cap Rate Occupancy Size (sqft) * Current GLA
Slide 27: Acquisition: purchase price and going-in cap rate
€16.6M 5.4% 92% 114K" Purchase Going-In Price Cap Rate Occupancy Size (sqft) * Current GLA
Slide 28: Local in-house platform across Europe
Netherlands 5 offices Dream Global REIT’s properties are locally and 50 employees in-house managed by a fully integrated ——_* property and asset management platform employing 140 professionals in offices across Europe * Highly experienced in leasing, operations, asset repositioning and the managemen
Slide 29: Management team
• Alexander Sannikov Jane Gavan Chief Operating Officer Chief Executive Officer • Rajeev Viswanathan Bruce Traversy Chief Financial Officer Head of Investments • Michael Schwöbel Roel de Weerd Managing Director, Managing Director1, Real Estate, Germany Real Estate, Netherlands •
Slide 30: Portfolio and Platform
Portfolio and Platform
Slide 31: Geographic Diversification
dream global REIT Germany and Other Netherlands Dream Global Geographic Diversification (% of GAV) Geographic Diversification 4.0% 5.6% 12.8% The Hague Dusseldorf Hamburg 94% Occupancy! Occupancy! Utrecht Rotterdam 7.6% Amsterdam 6.8% Netherlands Berlin 1.2% Eindhoven Key Portfolio Metrics Portfolio
Slide 32: Core & Core+ assets
High quality, welllocated, multi-let income producing assets with stable cash flow and moderate NO! upside through increasing rental EN / rates and occupancy. These assets N \ represent over 80% of our portfolio, \ 2 providing a strong foundation for our balance sheet. . yl | f= all od we Apollo; Am
Slide 33: Value-add assets
Assets with significant upside potential through leasing of vacant space and upgrading of the properties. We expect to generate compelling returns on capital investments and achieve above average NOI/cash flow growth from these assets. 40 Properties 68% Occupied Rivage, Arnhem = Picasso, Zwolle | 33
Slide 34: Redevelopment assets
Income producing ‘land bank’ with upside potential from redevelopment or intensification and limited downside risk. Highest and best uses for the properties include residential, office and other commercial uses. Architect's Rendering = | I mE Handwerkstrasse, Stuttgart 16 Properties Kaiser-Karl Ring
Slide 35: Top Ten Redevelopment Assets
dream global REIT Top Ten Redevelopment Assets PORTFOLIO Location Site Area GLA Current Objective Expected Use Rezoning Status (in sqft) (in sqft) ‘Completed Hildesheim, Bahnhofsplatz 53,615 90,535 Intensification Hotel, Office Finalized Marienstrasse, Offenbach 128,209 114,119 Rezoning, intensifica
Slide 36: Non-Core Assets
dream global REIT set Profile PORTFOLIO Smallest assets in the portfolio that are not consistent with our strategy of holding institutional quality properties with stable and growing cash flows. These assets are to be sold over the next year as part of our on-going capital recycling program. 38 3.9Y
Slide 37: Proven Office Concepts: The Boutique Office
dream global REIT PLATFORM Proven Office Concepts: The “Boutique Office” The.Yard, Amsterdam Johnny River, Amsterda ca Flight Forum, Eindhoven Boutique Office concept has successfully and economically driven occupancy Assets are rebranded and repositioned by creating a hub and amenity on the ground
Slide 38: Proven Asset Management Concepts: The Smart Office
global REIT Proven Asset Management Concepts: The “Smart Office” * Move-in ready plug & play office space: “co-working light” * Higher rents compared to traditional office space: * Flexible terms and transparent alkin pricing (tenant pays flat rent that includes service charges, wifi, coffee) * Addi
Slide 39: Active Asset Management
dream global REIT PLATFORM Active Asset Management 10K sq. ft. Additional Space Yo+ since Millerntorplatz, Hamburg Acquisition Executed manage-to-core strategy comprised of repositioning Renovated & repositioned the asset, upgraded common areas & intensification of the retail component, 10Y renewal
Slide 40: Financial Highlights
Financial Highlights
Slide 41: Financial Summary
Sobel er Financial Summary Earnings and Distributions Balance Sheet YTD 2018 YTD 2019 Change Q2 2018 Q22019 Change Investment Properties Revenue $193m $197m 2% Investment Properties $5,001m $5,902m 18% Net Operating Income (NOI) $140m $143m 2% Equity $2,576m $3,154m 22% Funds from Operations (FFO) $
Slide 42: Extensive Track Record of Value Creation
dream Extensive Track Record of Value Creation global REIT GAV' (SM) NAV? (SM) NAV per unit ($) 7,000 5,902 3,500 3,154 20.0 1753 6,000 3,000 18.0 5,000 oon 16.0 “000 11500 1,034 ; 2 2,390 . ’ 09.59 3,000 1,000 10.0 2,000 500 8.0 1,000 0 6.0 2013 201% 2015 2016 2017 2018 2 2013 201% 2015 2016 2017 2
Slide 43: EPRA Metrics
dream & EPRA Metrics global REIT EPRA Earnings (€M) $91.1 $96.7 6% EPRA Earnings per unit 0.51 0.50 -2% Company specific Adjusted EPS 0.54 0.53 2% EPRA Cost Ratio (incl. direct vacancy costs) 21.8% 21.4% -2% EPRA Cost Ratio (excl. direct vacancy costs) 18.7% 19.0% 2% EPRA NAV per unit 14.24 17.53 23
Slide 44: Portfolio Valuations
global REIT Portfolio Valuations Q2 FMV Q2 FMV Q2 Q2 ($ millions) ($/sqft) Cap Rate’ In place and committed occupancy Big 7 markets, Brussels and Vienna 3,093 615 3.9% 97.6% G5 markets 597 237 5.5% 97.8% Major secondary markets - Germany 1,102 276 5.1% 95.5% Other - Randstad 141 128 6.9% 96.8% Other
Slide 45: FX Hedging Strategy
dream FX Hedging Strategy global REIT Net Operating Income Euro-Denominated Euro-Denominated - Interest Expense Euro-Denominated Euro-Denominated - Local Platform G&A Euro-Denominated Euro-Denominated - Canadian Platform G&A Canadian Dollar-Denominated Euro-Denominated +/- Other FFO adjustments Euro
Slide 46: Environmental, Social and Governance
Environmental, Social and Governance
Slide 47: Environmental, Social & Governance
dream global REIT vironmental Pro-active implementation of sustainability best practices throughout our portfolio Committed to reduce the environmental impact of our operations and reducing our carbon footprint Engaging tenants on energy management through education and awareness Preserve cultural h
Slide 48: Environmental Initiatives
global REIT Environmental Initiatives Dutch Portfolio Early compliance with new energy label regulations Improved Tenant Experience Bee Hotels Placed in our properties to promote the wellness and raise awareness of the critical role of the species to the ecosystem Green Power & Gas 35% Supply ductio
Slide 49: Green-Certified Buildings
dream global REIT Innovum, Niirnberg Sustainable heating and cooling solutions, natural ventilation and sunlight Rivergate, Vienna Austria’s First LEED Platinum Building Geothermal heat and groundwater used as natural energy source Caecilium, Cologne Integration of sustainable lighting and building
Slide 50: Independent & Experienced Board of Trustees
Sobel er Independent & Experienced Board of Trustees Independent Board with a majority of Independent Trustees Independent Trustees make up 100% of Audit Committee and Governance, Compensation and Environmental Committee The Board has deep real estate experience for risk management The Board has ult
Slide 51: Alignment & Transparency
Alignment & Transparency: Clearly defined framework in publicly available asset management agreement Strong internal control framework and oversight by the Board of Trustees of Dream Global Track record of disciplined capital raising & allocation decisions leading to shareholder value creation The a
Slide 52: Non-GAAP Measures
dream global REIT Non-GAAP Measures The Trust's condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this presentation, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certa
Slide 53: Contact
ZINN dream @ global REIT Jane Gavan Rajeev Viswanathan Chief Executive Officer Chief Financial Officer +1 (416) 365-6572 +1 (416) 365-8959 jgavan@dream.ca rviswanathan@dream.ca Alexander Sannikov Chief Operating Officer +1 (416) 365-4106 asannikov@dream.ca
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