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Blackstone — Blackstone Property Partners Europe Holdings — Debt Investor Presentation (September 2022)
47 slides from Blackstone's debt investor presentation, September 2022
Slide 1: Blackstone Property Partners Europe Holdings Investor Presentation
Blackstone Property Partners Europe Holdings Investor Presentation SEPTEMBER 2022 Blackstone Property Partners Europe Holdings
Slide 2: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION This document has been prepared by Blackstone Property Partners Europe Holdings S.à r.l. (“BPPEH”, the “Issuer”) solely for informational purposes. For the purposes of this notice, the presentation shall mean and include any slides that precede this notice, the oral
Slide 3: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Estimates / Targets. Any estimates, targets, forecasts, or similar predictions or returns set forth herein are based on assumptions and assessments made by the Issuer that it considers reasonable under the circumstances as of the date hereof. They are necess
Slide 4: BPPEH Highlights
BPPEH Highlights Blackstone Property Partners Europe Holdings Blackstone | 3
Slide 5: BPPEH invests in high-quality, well-located Core+ real estate assets across Europe
OVERVIEW OF BPPEH BPPEH invests in high-quality, well-located Core+ real estate assets across Europe Highlights Focused on large, high-quality, substantially stabilised assets in major European markets and key gateway cities €13.6B – Primary sectors include logistics, residential and office GAV –
Slide 6: Selected BPPEH Assets
SELECTED BPPEH ASSETS Dublin, Ireland Stockholm, Sweden Milan, Italy Milan, Italy Émerainville, France Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 5
Slide 7: Key Highlights
KEY HIGHLIGHTS High-quality €13.6B portfolio primarily concentrated in the logistics, residential and office sectors Large, High-Quality, Well-located assets in markets with strong fundamentals (74% in the UK, Germany, France and Italy) Diversified Portfolio Selective acquisitions complemented
Slide 8: BPPEH's portfolio has substantial scale and diversification
PORTFOLIO EVOLUTION BPPEH's portfolio has substantial scale & diversification GAV by Sector (€’B) GAV by Country (€’B) 13.6 13.6 13.2 13.2 7.8 7.8 5.4 5.4 4.0 4.0 Dec-18 Dec-19 Dec-20 Dec-21 Jun-22 Dec-18 Dec-19 Dec-20 Dec-21 Jun-22 (1) Logistics Residential Office Luxury Retail Other Germany UK Fra
Slide 9: H1 2022 Key Updates
H1 2022 KEY UPDATES Selective acquisitions and dispositions €382M €142M acquisitions(1) dispositions Stable cash flows with operational upside Proactive capital structure management 93% €367M 47% Jul-22s occupancy run-rate EBITDA(2) net LTV successfully refinanced 6Y 16% €600M €1.3B WALL(3) below ma
Slide 10: A premier portfolio positioned to perform in today's environment
PORTFOLIO BUILT FOR TODAY’S ENVIRONMENT A premier portfolio positioned to perform in today’s environment What Investors Want What BPPEH Offers High-quality portfolio Purposefully-built portfolio – best assets in best markets 90%+ of leases either linked to inflation or with regular rent Inflation-li
Slide 11: Creating value through proactive asset management
ASSET MANAGEMENT INITIATIVES Creating value through proactive asset management Logistics Residential 239k sqm +5% leases signed LfL rent psm change 10% +3 p.p. releasing spread LfL occupancy change Office Luxury Retail 5k sqm New flagship store leases signed at rent 12x previous rent(1) 45% releasin
Slide 12: H1 2022 ESG Updates
H1 2022 ESG UPDATES Enhancing value through ESG initiatives Logistics Office Residential 7 MW 96% 23% of on-site installed solar capacity, of office portfolio has obtained of Dutch residential units have equivalent to powering 1.2k+ homes green building certifications, up achieved an A or B energy l
Slide 13: Blackstone Management Platform
Blackstone Management Platform Blackstone Property Partners Europe Holdings Blackstone | 12
Slide 14: Blackstone is the largest owner of commercial real estate globally
PREMIER GLOBAL REAL ESTATE BUSINESS Blackstone is the largest owner of commercial real estate globally BREP Core+ BREDS Global opportunistic Income-producing, substantially Global performing real estate debt real estate stabilised, global real estate and securities $123B 1991 $143B 2013 $54B 2009 in
Slide 15: BPPEH benefits from Blackstone's competitive advantages
WHY BLACKSTONE REAL ESTATE? BPPEH benefits from Blackstone’s competitive advantages Powerful information advantage and network effect High conviction thematic investment approach Extraordinary team and unrivaled scale of capital Exceptional ability to create value at companies and assets Note: There
Slide 16: Portfolio companies and real-time data insights are key strategic advantages
PREMIER PORTFOLIO COMPANIES Portfolio companies and real-time data insights are key strategic advantages Our €118B European RE platform … provides proprietary + captive portfolio companies insight & drives AM initiatives Logistics 432M 10% square feet H1’22 average re-leasing spreads for BPPEH’s log
Slide 17: Portfolio Overview
Portfolio Overview Blackstone Property Partners Europe Holdings Blackstone | 16
Slide 18: Large, diversified portfolio focused on logistics, residential and office assets
PORTFOLIO OVERVIEW Large, diversified portfolio focused on logistics, residential and office assets in Europe’s key markets Key Metrics Sector Allocation Geographic Allocation (4) Other (2) Ireland Poland Other €13.6B Luxury Retail 1% Spain 2% 2% <1% 6% 3% GAV Netherlands UK Office 24% 9% 14% 93% (3
Slide 19: Below market rents provide an opportunity to capture reversionary potential
PORTFOLIO VALUATION Below market rents provide an opportunity to capture reversionary potential As Reported MTM Yield H1’22(1) Highlights NOI Yield H1’22 BMR: 5% (16%)(2) 4.4% 4.3% 4.2% 4.2% 4% 3.9% 3.7% 3.8% 3.5% W.A. MTM yield(1) 3.3% NOI Yield 3% 2% 2.2% 16% 1.5% 1% below market rents(2) 0% Logis
Slide 20: Real Estate has historically outpaced inflation during inflationary periods
REAL ESTATE IN AN INFLATIONARY ENVIRONMENT Real Estate has historically outpaced inflation during inflationary periods U.K. Real Estate Average Total Returns(1) 1978-82 1988-91 18% 18% 16% 12% 7% 7% CPI Office Logistics CPI Office Logistics Note: Represents BPPEH’s view of the current market environ
Slide 21: Logistics exposure should power BPPEH's growth
THEMATIC INVESTMENT APPROACH Logistics exposure should power BPPEH’s growth Sector Overview YoY Logistics Market Rental Growth Outpaced Inflation(1) Other(2) Luxury Retail 1% 6% 21% Office 14% Residential Logistics 8% 16% 63% 4% Core CPI(3) CPI(3) CPI Logistics Logistics (4) Note: Sector allocation
Slide 22: Logistics Portfolio
LOGISTICS PORTFOLIO Waldlaubersheim, Germany Warrington, UK Warrington, UK Émerainville, France Bedfont, UK Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 21
Slide 23: High-quality logistics portfolio comprising 239 properties across 13 countries
LOGISTICS PORTFOLIO High-quality logistics portfolio comprising 239 properties across 13 countries Key Metrics Geographic Allocation Spain Italy Other(2) Poland 2% 2% €8.5B 5.5M 1% 3% Netherlands 4% GAV square metres Nordics(1) UK 14% 38% 94% 6.4Y Germany 15% France occupancy WALL 21% Note: Geograph
Slide 24: Capitalizing on e-commerce growth and increasing inventory levels
LOGISTICS MARKET OVERVIEW Capitalizing on e-commerce growth and increasing inventory levels 2022 E-Commerce Penetration(1) Record European Inventory Increase(2) (year-over-year change) 37% 100 80 25% +€81B 21% 60 increase year-over-year 40 13% 20 0 Continental U.S. U.K. South Korea -20 Europe 2017 2
Slide 25: Logistics fundamentals are exceptionally strong
LOGISTICS MARKET OVERVIEW (CONT’D) Logistics fundamentals are exceptionally strong Cumulative Rental Growth vs. Vacancy(2) Demand vs. Supply(1) +21% YoY (sqm in millions) €120 €112 €110 1.7x €0 greater €100 7.2% €90 €90 €86 €81 €80 €76 180 €72 €0 €70 €60 105 €50 €40 €0 €30 2.4% €20 €10 €0 Cumulative
Slide 26: Residential Portfolio
RESIDENTIAL PORTFOLIO Amsterdam, Netherlands Milan, Italy Amsterdam, Netherlands Berlin, Germany Berlin, Germany Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 25
Slide 27: Prime residential portfolio concentrated in Berlin and Amsterdam
RESIDENTIAL PORTFOLIO Prime residential portfolio concentrated in Berlin and Amsterdam Key Metrics(1) Geographic Allocation Rotterdam UK Utrecht 3% 1% €2.2B 6.5K 3% Other Germany 5%(3) GAV residential units Milan 8% 89% / Berlin 47% 99% 543 Amsterdam 34% occupancy(2) / properties adjusted occupancy(
Slide 28: Solid demographic trends in Amsterdam and Berlin driving rental growth
RESIDENTIAL MARKET OVERVIEW Solid demographic trends in Amsterdam and Berlin driving underlying rental growth 5-Year Population CAGR(1) Rental Growth (CAGR, 2016 - H1 2022) 8.7% 0.9% 0.9% 0.8% 0.7% 0.6% 3.2% 0.1% (2) (3) Amsterdam Berlin London Eurozone Munich Amsterdam Berlin Madrid Note: Represent
Slide 29: Office Portfolio
OFFICE PORTFOLIO Dublin, Ireland Stockholm, Sweden Milan, Italy Dublin, Ireland Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 28
Slide 30: 15 high-quality office assets located in eight dynamic cities across Europe
OFFICE PORTFOLIO 15 high-quality office assets located in eight dynamic, innovation-focused cities across Europe Key Metrics Geographic Allocation Stockholm €1.9B 242K Rome 6% 6% GAV square metres Milan 21% Barcelona 11% Paris Dublin 91% 4.5Y 12% 17% occupancy WALL Munich Berlin 13% 15% Note: Geogra
Slide 31: Vacancy rates and rental growth remained attractive relative to historical levels
OFFICE MARKET OVERVIEW Vacancy rates and rental growth remained attractive relative to historical levels Vacancy Rate(1) Prime Rents(1) -4 p.p. +20% €63 12% +33% +33% €54 €54 €53 -4 p.p. +89% +32% 9% €44 8% -4 p.p. €43 -2 p.p. €41 €40 7% 7% €33 -2 p.p. 5% 5% 5% €23 3% 3% Milan Dublin Berlin Munich P
Slide 32: TMT tenants represent 40% of BPPEH's office rental income
OFFICE MARKET OVERVIEW (CONT’D) TMT tenants represent 40% of BPPEH’s office rental income 5-Year TMT Employment Growth CAGR(1) Office Tenants by Sector (% of total office rental income) 6.6% 6.8% Selected Tenants Amazon 3.6% TMT 40% Sky 2.9% 2.7% Other 60% Spotify Three Vodafone Stockholm
Slide 33: Trophy asset on Via Montenapoleone, Milan's iconic luxury retail high street
LUXURY RETAIL PORTFOLIO Trophy asset on Via Montenapoleone, Milan’s iconic luxury retail high street Key Metrics Location €820M 3K GAV square metres(1) 94% 4.6Y occupancy WALL Note: Geographic allocation based on GAV. There can be no assurance that BPPEH, BPPE, or any other Blackstone fund or invest
Slide 34: Capital Structure Summary
Capital Structure Summary Blackstone Property Partners Europe Holdings Blackstone | 33
Slide 35: Robust capital structure consisting primarily of unsecured notes
CAPITAL STRUCTURE Robust capital structure consisting primarily of unsecured notes Key Metrics Capital Structure Summary(3) Interest WAM €M Rate(1) (years)(2) 47% BBB Unsecured Notes Unsecured Bank Facilities 6,778 99 1.8% 2.4% 4.8 2.9 net LTV (stable outlook) Revolving Credit Facility 77 1.0% 2.9 S
Slide 36: Strong debt profile consisting primarily of fixed rate unsecured debt
DEBT SUMMARY Strong debt profile consisting primarily of fixed rate unsecured debt Debt by Fixed vs. Secured vs. Debt by Type Floating Unsecured Currency Unsecured Bank Mortgage Facilities Floating Secured RCF 4% 4% GBP Loans 1% 1% 21% 4% EUR Unsecured Notes Fixed Unsecured 79% 94% 96% 96% Note: GBP
Slide 37: Staggered debt maturity profile with a weighted average maturity of 4.8 years
DEBT MATURITY PROFILE Staggered debt maturity profile with a weighted average maturity of 4.8 years Interest - 0.3% 2.0% 2.1% 1.1% 1.3% 1.9% 2.6% 1.6% - 4.9% - - 1.4% Rate(1) Sufficient liquidity €1,232 €1,223 to address 2023 maturities €1,100 €1,000 €695 Green €600 Notes €500 €500 €348 - - - - €14
Slide 38: RCF and unsecured bank facilities provide operational flexibility
CREDIT FACILITIES RCF and unsecured bank facilities provide operational flexibility between bond issuances Revolving Credit Facility Unsecured Bank Facilities Amount €600M €1.8B Pricing(1) E + 1.00% E + 1.40%(2) Maturity May-2027(3) 3 years Security / Collateral Unsecured Unsecured Commitment Commit
Slide 39: ESG Programme
ESG Programme Blackstone Property Partners Europe Holdings Blackstone | 38
Slide 40: Action-oriented global ESG program
BLACKSTONE’S ESG FOCUS Action-oriented global ESG program Good Governance & Transparency Diversity Decarbonization ESG integration 1/3 15% key to building resilient companies diverse representation on boards for carbon emissions reduction target new portfolio companies(1) across all new investments(
Slide 41: BPPEH Green Financing Framework Overview
GREEN FINANCING FRAMEWORK BPPEH Green Financing Framework Overview Sustainalytics issued a positive Second Party Opinion, stating that BPPEH’s Green Financing Framework “is credible and impactful and aligns with the four core components of the Green Bond Principles 2018.” Use of Proceeds Process for
Slide 42: Key Highlights
Key Highlights Blackstone Property Partners Europe Holdings Blackstone | 41
Slide 43: Key Highlights
KEY HIGHLIGHTS High-quality €13.6B portfolio primarily concentrated in the logistics, residential and office sectors Large, High-Quality, Well-located assets in markets with strong fundamentals (74% in the UK, Germany, France and Italy) Diversified Portfolio Selective acquisitions complemented
Slide 44: Appendix: Supplemental Materials
Appendix: Supplemental Materials Blackstone Property Partners Europe Holdings Blackstone | 43
Slide 45: Wholly owned by BPPE, a perpetual investment vehicle
BPPEH STRUCTURE Wholly owned by BPPE, a perpetual investment vehicle Open-ended investment vehicle Limited Regular closings expected, providing additional Partners (“L.P.”) growth capital G.P. / Near-permanent capital Manager BPPE – No legal obligation on behalf of the fund to sell assets to m
Slide 46: Key Metrics
KEY METRICS Total / Logistics Residential Office Luxury Retail Weighted Avg (1) Number of Assets # 239 543 15 1 801 GLA kSQM 5,451 490 242 3 6,222 GAV €M 8,526 2,188 1,912 820 13,583 Occupancy / Adjusted 89% / % 94% 91% 94% 93% Occupancy 99% (2) WALL Years 6.4 n/a 4.5 4.6 6.0 (3) NOI Yield (4) % 3.8
Slide 47: Definitions
DEFINITIONS Term Definition NOI annualised and adjusted to exclude annualised rent abatements and non-recurring items and include rental guarantees provided by the sellers. Adjusted NOI Investments sold during the period are excluded and investments acquired during the period are included Adjusted O
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