NEPI Rockcastle N.V · JSE:NRP

NEPI Rockcastle — Rockcastle Global Real Estate Company — H1 2016 Earnings Presentation

55 slides from NEPI Rockcastle's earnings presentation, December 2015

  1. Slide 1: Interim results presentation

    Karolinka Shopping Centre – Opole, Poland Interim results presentation December 2015

  2. Slide 2: Agenda

    Agenda 01 6‐month highlights & financial results 02 Listed security portfolio update 03 Funding & hedging 04 Direct property portfolio update 05 Conclusion and Q&A Spiro Noussis ‐ CEO

  3. Slide 3: Highlights to 31 December 2015

    Highlights to 31 December 2015 Distribution growth +8.2% Capital invested/committed in Poland to date USD440 million Direct property as a percent of total assets 17% Two developments completing in Q4 2016 40 500m2 GLA New long‐term senior debt facilities EUR34.8 million Disposal of Kafubu Mall & Muk

  4. Slide 4: Headline results underpinning our growth targets

    Headline results underpinning our growth targets 31 Dec 30 Jun 31 Dec 30 Jun 2015 2015 2014 2014 Net rental income (USD’000 equivalent) 6 029 2 633 22 ‐ Direct property assets (USD’000 equivalent)(1) 383 021 108 286(2) 15 324 5 192 4.631 USD 4.42 USD 4.28 USD 4.18 USD Dividend per share cents cents

  5. Slide 5: Listed security portfolio update

    02 Listed security portfolio update  Portfolio composition by jurisdiction  Portfolio composition by sector  Top 10 holdings  Portfolio performance & strategy 5

  6. Slide 6: Portfolio composition by jurisdiction

    Portfolio composition by jurisdiction Geographic spread December 2015 June 2015 3.0% 3.2% 4.9% 4.8% 4.2% USA 9.2% UK 9.0% Europe 18.7% Singapore 9.7% 52.1% 64.2% Canada Hong Kong 17.0% Australia 6

  7. Slide 7: Portfolio composition by sector

    Portfolio composition by sector Sectoral spread December 2015 June 2015 Retail 1.8% 4.3% 5.5% 6.0% Industrial 7.0% 8.7% Healthcare 7.5% 9.5% Hotel 9.4% 58.0% 57.4% Residential 13.5% 11.4% Other/ Diversified Mortgage 7

  8. Slide 8: Top real estate holdings

    Top 10 real estate holdings Market value Market value Name Sector Jurisdiction at 31 Dec 2015 at 30 Jun 2015 (USD Million) (USD Million) Simon Property Retail USA 359.7 288.9 Hammerson Retail UK 349.1 367.7 Prologis Inc Industrial USA 214.6 161.4 Avalonbay 153.5 Residential USA 176.8 Communities Inc

  9. Slide 9: Top real estate holdings (continued)

    Top 10 real estate holdings (continued) Market value Market value Name Sector Jurisdiction at 31 Dec 2015 at 30 June 2015 (USD Million) (USD Million) Ventas Inc Healthcare USA 149.5 158.3 Host Hotels and Hotel USA 112.9 108.1 Resorts Kimco Retail USA 84.7 47.3 Other/ Digital Realty USA 81.3 71.7 div

  10. Slide 10: Portfolio performance & strategy

    Portfolio performance & strategy  Focused on liquid counters in developed markets offering growth prospects  Strategic emphasis on companies with prospects of underlying rental growth and cost containment which will drive future returns  A prudent risk management framework for the listed portfoli

  11. Slide 11: Funding & hedging

    03 Funding & hedging  Gearing  Hedging strategy  Financing developments during the period  Counterparty composition  Swap profile 11

  12. Slide 12: Funding and hedging

    Funding and hedging Gearing  Gearing for the company is targeted between 35% and 50% ‐ intention to remain towards the lower end of the range  Cost of borrowings for listed securities portfolio – broadly consistent with the prior period  Introduction of asset level funding for direct properties i

  13. Slide 13: Funding and hedging

    Funding and hedging  Funding developments during the period ‒ Listed security portfolio gearing reduced – short‐term in nature – continued trend ‒ Increase in long‐term funding during the period by way of the introduction of direct property senior debt ‒ Considerable debt market liquidity in Poland

  14. Slide 14: Facilities by counterparty

    Facilities by counterparty December 2015 June 2015 4.0% 1.5% Morgan Stanley Morgan Stanley 38.5% BofAML 39.9% BofAML 56.1% ING Bank Standard Bank 60.0% 14

  15. Slide 15: Swap profile – listed security portfolio

    Swap profile – listed security portfolio Nominal USD Expiry equivalent Average rate (USD’000) 2020 61 098 0.83% 2021 43 676 0.53% 2022 54 595 0.57% 2025 283 627 1.79% 442 996 1.38% 15

  16. Slide 16: Direct property portfolio update

    04 Direct property portfolio update  Zambian disposals  Cosmopolitan Mall  Poland economic and political developments Spiro Noussis – CEO  Polish retail market update Marek Noetzel – Retail Director  Concluded acquisitions & extension opportunities  Existing portfolio update Spiro Noussis – CE

  17. Slide 17: Disposal of Zambian assets

    Disposal of Zambian assets  Transaction concluded in December 2015 for the disposal of Kafubu Mall and Mukuba Mall (Zambia) to Delta Africa Property Holdings Limited (“Delta”) realising an equity profit  Transaction proceeds of USD21.6 million received with USD2.5 million currently outstanding by

  18. Slide 18: Cosmopolitan Mall – Lusaka, Zambia

    Cosmopolitan Mall – Lusaka, Zambia 18

  19. Slide 19: Cosmopolitan Mall – Lusaka, Zambia

    Cosmopolitan Mall – Lusaka, Zambia  Scheduled opening in March 2016  GLA of 26 000m²  Right to purchase 50%  Anchored by Shoprite and Game  Tenants include: ‒ Foschini ‒ Mr Price ‒ Truworths ‒ Woolworths  Acquisition yield of 9.5%  Discussions currently in progress for disposal of Rockcastle’

  20. Slide 20: Poland – economic and investment data

    Poland – economic and investment data Polish political and legislative developments Opportunities Polish GDP growth (2016 forecast) +3.6% Declining unemployment 6.8% (2016 forecast)

  21. Slide 21: Poland – economic and investment data

    Poland – economic and investment data

  22. Slide 22: Poland – competitive advantage

    Poland – competitive advantage  Successful recruitment of top local skills comprising our core retail & asset management, finance, capital market and development teams  Opportunities to extract asset management and leasing enhancements to existing assets given the strength of the core Polish team

  23. Slide 23: Poland – current portfolio

    Poland – current portfolio 23

  24. Slide 24: Acquisitions & extension opportunities

    Acquisitions & extension opportunities 24

  25. Slide 25: Platan Shopping Centre – Zabrze, Poland

    Platan Shopping Centre – Zabrze, Poland 25

  26. Slide 26: Platan Shopping Centre – Zabrze, Poland

    Platan Shopping Centre – Zabrze, Poland  Transaction concluded in December 2015  GLA of 25 336m²  Ownership 100%  Anchored by Auchan hypermarket  Tenants include: ‒ CCC ‒ Cropp ‒ Deichmann ‒ KFC ‒ House ‒ Reserved ‒ Rossmann  Acquired at a yield of approximately 6.9%  Agreement signed to acqu

  27. Slide 27: Platan Shopping Centre – Zabrze, Poland

    Platan Shopping Centre – Zabrze, Poland 27

  28. Slide 28: Platan Shopping Centre – Zabrze, Poland

    Platan Shopping Centre – Zabrze, Poland 28

  29. Slide 29: Platan Shopping Centre – Zabrze, Poland

    Platan Shopping Centre – Zabrze, Poland 29

  30. Slide 30: Karolinka Shopping Centre – Opole, Poland

    Karolinka Shopping Centre – Opole, Poland Acquisition details  Transaction concluded in December 2015  GLA of 69 997m²  Ownership 100%  Anchored by Auchan hypermarket, Leroy Merlin and Decathlon  Tenants include: ‒ Carry ‒ CCC ‒ Deichmann ‒ H&M ‒ New Yorker ‒ Pepco ‒ Reserved  Acquired at a yi

  31. Slide 31: Karolinka expansion strategy

    Karolinka Shopping Centre – Opole, Poland Currently envisaged expansion strategy  Karolinka is the region’s dominant shopping centre – largest and most diverse retail offering within a 1‐hour radius  Significant opportunity to upgrade and enhance the retail by: — the introduction of additional LPP

  32. Slide 32: Karolinka Shopping Centre – Opole, Poland

    Karolinka Shopping Centre – Opole, Poland 32

  33. Slide 33: Karolinka Shopping Centre – Opole, Poland

    Karolinka Shopping Centre – Opole, Poland 33

  34. Slide 34: Karolinka Shopping Centre – Opole, Poland

    Karolinka Shopping Centre – Opole, Poland 34

  35. Slide 35: Karolinka Shopping Centre – Opole, Poland

    Karolinka Shopping Centre – Opole, Poland 35

  36. Slide 36: Pogoria Shopping Centre – Dabrowa Gornicza, Poland

    Pogoria Shopping Centre – Dabrowa Gornicza, Poland 36

  37. Slide 37: Pogoria Shopping Centre – Dabrowa Gornicza, Poland

    Pogoria Shopping Centre – Dabrowa Gornicza, Poland  Transaction concluded in December 2015  GLA of 36 705m²  Ownership 100%  Anchored by Auchan hypermarket  Tenants include: ‒ Bershka ‒ Carry ‒ CCC ‒ Deichmann ‒ H&M ‒ Reserved ‒ Pull&Bear  Acquired at a yield of 6.76% 37

  38. Slide 38: Pogoria expansion strategy

    Pogoria Shopping Centre – Dabrowa Gornicza, Poland Currently envisaged expansion strategy  Pogoria is the town’s strongest retail centre with arguably the best anchor grocer in the region. However it competes with several regional centres within a 30 min drive.  The opportunity exists to position

  39. Slide 39: Pogoria Shopping Centre – Dabrowa Gornicza, Poland

    Pogoria Shopping Centre – Dabrowa Gornicza, Poland 39

  40. Slide 40: Pogoria Shopping Centre – Dabrowa Gornicza, Poland

    Pogoria Shopping Centre – Dabrowa Gornicza, Poland 40

  41. Slide 41: Existing portfolio updates

    Existing portfolio updates 41

  42. Slide 42: Solaris Shopping Centre – Opole, Poland

    Solaris Shopping Centre – Opole, Poland 42

  43. Slide 43: Solaris Shopping Centre – Opole, Poland

    Solaris Shopping Centre – Opole, Poland  Acquired March 2015  GLA of 18 000m² and 99.8% let  Trading on budget  Footfall increase for the year of 5.3%  PPP agreement concluded in October 2015 for acquisition of adjoining site ̶ Extension of 8 000m² retail GLA planned ̶ Construction of 300 vehic

  44. Slide 44: Solaris Shopping Centre – Opole, Poland

    Solaris Shopping Centre – Opole, Poland 44

  45. Slide 45: Solaris Shopping Centre – Opole, Poland

    Solaris Shopping Centre – Opole, Poland Level ‐1 Level 0 45

  46. Slide 46: Galeria Wolomin – Warsaw, Poland

    Galeria Wolomin – Warsaw, Poland 46

  47. Slide 47: Galeria Wolomin – Warsaw, Poland

    Galeria Wolomin – Warsaw, Poland  Redesign complete, construction underway, opening scheduled for October 2016  GLA of 23 500m², ownership 90%  Anchored by Carrefour hypermarket  Tenants to include: ‒ CCC ‒ Cropp ‒ H&M ‒ KFC ‒ Martes Sport ‒ Reserved  Budgeted yield of 7.6% & completed developm

  48. Slide 48: Galeria Wolomin – Warsaw, Poland

    Galeria Wolomin – Warsaw, Poland 48

  49. Slide 49: Galeria Wolomin – Warsaw, Poland

    Galeria Wolomin – Warsaw, Poland 49

  50. Slide 50: Galeria Tomaszow – Tomaszow Mazowieki, Poland

    Galeria Tomaszow – Tomaszow Mazowieki , Poland 50

  51. Slide 51: Galeria Tomaszow – Tomaszow Mazowieki, Poland

    Galeria Tomaszow – Tomaszow Mazowieki , Poland  Under construction, scheduled opening October 2016  GLA increased to 17 000m²  Ownership 85%  Anchored by Intermarche  Tenants include: ‒ CCC ‒ Cropp ‒ Deichmann ‒ H&M ‒ Pepco ‒ Reserved ‒ Rossman  Redesigned to accommodate cinema operator  Tota

  52. Slide 52: Galeria Tomaszow – Tomaszow Mazowieki, Poland

    Galeria Tomaszow – Tomaszow Mazowieki , Poland 52

  53. Slide 53: Conclusion and Q&A

    05 Conclusion and Q&A  Summary & conclusion  Q&A 53

  54. Slide 54: Conclusion

    Conclusion  Migration to direct property progressing well – currently 17% of total assets  Further acquisitions targeted in Czech Republic, Hungary and Poland  Value creation targeted via development, extension and refurbishments  Operational platform established in CEE  Listed securities portf

  55. Slide 55: Questions & Answers

    © ROCKCASTLE GLOBAL REAL ESTATE COMPANY LIMITED 7 Questions & Answers )

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