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Blackstone — Blackstone Property Partners Europe Holdings — Debt Investor Presentation (April 2022)
47 slides from Blackstone's debt investor presentation, April 2022
Slide 1: Blackstone Property Partners Europe Holdings Investor Presentation
Blackstone Property Partners Europe Holdings Investor Presentation APRIL 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 – Primary sectors include logistics, residential and office €13.2B – Long
Slide 6: Selected BPPEH Assets
SELECTED BPPEH ASSETS Dublin, Ireland Sweden, Stockholm 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 €13.2B portfolio primarily concentrated in the logistics, residential and office sectors Large, High-Quality, ▪ Continued growth and diversification during 2021, focusing on our highest conviction investment themes Diversified Portfolio ▪ €13.3B pro forma for transactio
Slide 8: Substantial increase in growth & diversification in 2021
PORTFOLIO EVOLUTION Substantial increase in growth & diversification in 2021 GAV by Sector (€’B) GAV by Country (€’B) 13.2 13.2 +€5.4B / +€5.4B / +70% +70% 7.8 7.8 5.4 5.4 4.0 4.0 Dec-18 Dec-19 Dec-20 Dec-21 Dec-18 Dec-19 Dec-20 Dec-21 Germany UK France Italy Nordics(2) Logistics Residential Office
Slide 9: 2021 Key Updates
2021 KEY UPDATES Continued growth via high-quality Stable cash flows with operational upside acquisitions(1) 94% 6% €2.8B €777M occupancy(3) LfL passing rent growth Logistics Luxury Retail 6Y 13% WALL(4) below market rents(3) €654M €326M Office Residential & Other(2) Disciplined access of capital ma
Slide 10: Recent Acquisition: Pan-European Logistics Portfolio
RECENT ACQUISITION: PAN-EUROPEAN LOGISTICS PORTFOLIO BPPEH acquired a pan-European portfolio of 31 high- quality last-mile logistics properties in Q4 2021 Émerainville, France Poyle, UK Thurrock, UK Investment Highlights Portfolio Overview ▪ Portfolio includes 31 high-quality last-mile logistics pro
Slide 11: Recent Acquisition: Trophy Milan City Centre Portfolio
RECENT ACQUISITION: TROPHY MILAN CITY CENTRE PORTFOLIO BPPEH acquired 14 high-quality assets located primarily in Milan’s historical city center in Q4 2021 Via Montenapoleone, Milan Via Verdi, Milan Corso Magenta, Milan Investment Highlights Luxury Retail Overview ▪ Portfolio includes an irreplaceab
Slide 12: Asset Management Initiatives
ASSET MANAGEMENT INITIATIVES Creating value through proactive asset management Logistics Residential 93% retention ratio Dutch Residential Portfolio 460 leases signed (26% of portfolio area) 2% releasing spread 9 p.p. LfL occupancy change Office 76% German Residential Portfolio 394 leases signed on
Slide 13: 2021 ESG Updates
2021 ESG UPDATES Enhancing value through ESG initiatives Logistics Office Residential 11 MW 88% 17% of on-site installed solar capacity of office portfolio obtained Green of Dutch residential portfolio has and 4 MW of renewable energy Building Certifications, a 14 p.p. achieved an A or B energy labe
Slide 14: Portfolio Overview
Portfolio Overview Blackstone Property Partners Europe Holdings Blackstone | 13
Slide 15: 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 (3) (5) Other IrelandPoland Other €13.2B Luxury Retail 1% 6% Spain 2% 3% 2% <1% GAV Germany Netherlands Office 22% 9% 94% 15
Slide 16: 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 | 15
Slide 17: High-quality logistics portfolio comprising 236 properties across 13 countries
LOGISTICS PORTFOLIO High-quality logistics portfolio comprising 236 properties across 13 countries Key Metrics Geographic Allocation (2) Spain Italy Other Poland 3% 2% 1% €8.1B 5.4M 3% Netherlands 4% GAV square metres Nordics(1) UK 14% 35% 95% 6.5Y Germany 15% occupancy WALL France 23% Note: Geograp
Slide 18: Accelerating online sales penetration across Europe
LOGISTICS MARKET OVERVIEW Accelerating online sales penetration across Europe, including in France, Germany and the UK E-Commerce Penetration(1) E-Commerce Sales(1) (% of total sales) (€ in billions) +64% +10 p.p. €112 26% +46% €94 +35% +4 p.p. +5 p.p. €72 €68 16% 16% €64 14% €54 11% 11% France Germ
Slide 19: Robust fundamentals across BPPEH's logistics markets
LOGISTICS MARKET OVERVIEW (CONT’D) Robust fundamentals across BPPEH’s logistics markets Take-Up vs. Completions(1) Logistics Vacancy(2) (2012 to 2021, sqm in millions) 1.8x greater 7.6% 198 112 2.8% Completions Take-up 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note: Past performance is not n
Slide 20: European logistics income has historically outpaced inflation
LOGISTICS MARKET OVERVIEW (CONT’D) European logistics income has historically outpaced inflation European Logistics Income and Inflation(1) European Logistics Prime Rent Growth(2) (Indexed, 2016=100) (CAGR, 2016-2021) 120 Logistics Net Rental Income European CPI 6.8% 115 110 105 2.3% 100 95 2016 201
Slide 21: 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 | 20
Slide 22: Prime residential portfolio concentrated in Berlin and Amsterdam
RESIDENTIAL PORTFOLIO Prime residential portfolio concentrated in Berlin and Amsterdam Key Metrics Geographic Allocation Rotterdam UK Utrecht 3% 1% 1% €2.3B 6.4K (3) Other Germany 5% GAV residential units(1) Milan 10% 84% / Berlin 539 47% 96% Amsterdam 33% occupancy(1),(2) / properties(1) adjusted o
Slide 23: 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, 2016-2021) 8.3% 1.0% 0.9% 0.8% 0.7% 0.5% 2.7% 0.2% 0.2% (2) (3) Amsterdam Berlin London Eurozone Milan Munich Berlin Amsterdam Madrid Note: Rep
Slide 24: 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 | 23
Slide 25: 15 high-quality office assets in innovation-focused cities across Europe
OFFICE PORTFOLIO 15 high-quality office assets located in dynamic, innovation-focused cities across Europe Key Metrics Geographic Allocation Stockholm Rome €2.0B 242K 5% 6% GAV square metres Milan 21% Barcelona 12% Dublin 93% 4.8Y Munich 12% 17% occupancy WALL Paris Berlin 13% 14% Note: Geographic a
Slide 26: Vacancy rates and rental growth remain attractive relative to historical levels
OFFICE MARKET OVERVIEW Vacancy rates and rental growth remain attractive relative to historical levels Vacancy Rate(1) Rental Growth(1) (prime rents, 2014 indexed to 100) 14% 200 12% 180 10% 160 8% 140 6% 120 4% 100 2% 0% 80 2014 2015 2016 2017 2018 2019 2020 2021 2014 2015 2016 2017 2018 2019 2020
Slide 27: 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) 6.1% 5.7% Selected Tenants ▪ Amazon 3.6% TMT 40% ▪ Sky Other 2.1% 2.3% 60% ▪ Spotify ▪ Three ▪ Vodafone Paris Mila
Slide 28: Capital Structure Summary
Capital Structure Summary Blackstone Property Partners Europe Holdings Blackstone | 27
Slide 29: 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 6,552 – 1.5% - 4.4 - net LTV (stable outlook) (4) Mortgage Loans 219 2.3% 6.9 S&P credit ra
Slide 30: 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 Mortgage Loans RCF Floating Secured GBP 3% <1% 1% 3% 16% Unsecured Notes Fixed Unsecured EUR 96% 99% 97% 84% Note: There can be no assurance that
Slide 31: Staggered debt maturity profile with a weighted average maturity of 4.5 years
DEBT MATURITY PROFILE Staggered debt maturity profile with a weighted average maturity of 4.5 years Interest Rate(1) 1.4% 0.3% 2.0% 2.1% 1.1% 1.3% 1.9% 1.8% 1.6% 1.4% €1,240 €1,100 €1,000 Green €650 Notes €600 €600 €600 €500 €500 €15 2022 2023 2024 2025 2026 2027 2028 2029 2030 2035 Unsecured Notes
Slide 32: 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-2025 3 years Security / Collateral Unsecured Unsecured Committed / Uncommit
Slide 33: ESG Programme
ESG Programme Blackstone Property Partners Europe Holdings Blackstone | 32
Slide 34: Building a global Real Estate ESG programme
BLACKSTONE’S APPROACH TO ESG Building a global Real Estate ESG programme ▪ Progressing our 15% carbon emission reduction target across new investments(1) ESG Goals ▪ Implementing green clauses in new commercial leases to facilitate sustainability initiatives(3) ▪ Providing best practices to scale so
Slide 35: BPPEH published its Green Financing Framework in March 2021
GREEN FINANCING FRAMEWORK BPPEH published its Green Financing Framework in March 2021 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 P
Slide 36: Inaugural €500M Green Bond fully allocated
GREEN BOND USE OF PROCEEDS Inaugural €500M Green Bond fully allocated in accordance with the Green Financing Framework Allocation of 1.625% Green Notes Due 2030 Acq. Green Building Property Sector Country Year Certification Burlington Plaza A Dublin, Ireland: 22k sqm Burlington Plaza A Office Irelan
Slide 37: 100% of proceeds allocated to Green Buildings
GREEN BOND USE OF PROCEEDS (CONT’D) 100% of proceeds(1) allocated to Green Buildings with at least Very Good or Gold certificates(2) By Certification By Sector By Geography BREEAM Excellent Italy 10% 15% DGNB Gold Logistics 29% Ireland 29% 32% BREEAM Spain Very Good 23% 38% Office 71% LEED Gold Germ
Slide 38: Blackstone Management Platform
Blackstone Management Platform Blackstone Property Partners Europe Holdings Blackstone | 37
Slide 39: 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 $110B $116B $54B investor capital
Slide 40: Our €114B European portfolio provides proprietary insight and access
BLACKSTONE REAL ESTATE EUROPE PORTFOLIO Our €114B European portfolio provides proprietary insight and access Logistics 435M square feet Office 44M square feet Residential 102k units Note: Not representative of all Blackstone Real Estate Europe holdings. In addition to wholly-owned assets, figures in
Slide 41: Our competitive advantages deliver outstanding performance for investors
WHY BLACKSTONE REAL ESTATE? Our competitive advantages deliver outstanding performance for investors Powerful information advantage and network effect Growth-oriented high conviction thematic investment approach Extraordinary team and unrivaled scale of capital Exceptional ability to create value at
Slide 42: Key Highlights
Key Highlights Blackstone Property Partners Europe Holdings Blackstone | 41
Slide 43: Key Highlights
KEY HIGHLIGHTS ▪ High-quality €13.2B portfolio primarily concentrated in the logistics, residential and office sectors Large, High-Quality, ▪ Continued growth and diversification during 2021, focusing on our highest conviction investment themes Diversified Portfolio ▪ €13.3B pro forma for transactio
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(2) Number of Assets # 236 539 15 1 793 GLA kSQM 5,403 500 242 3 6,172 GAV(1) €M 8,095 2,265 1,957 810 13,221 Occupancy / 84% / % 95% 93% 98% 94% Adjusted Occupancy 96%(3) WALL Years 6.5 n/a 4.8 5.1 6.2(4) NOI Yield(5) % 3.9%
Slide 47: Definitions
DEFINITIONS Term Definition NOI annualised for investments acquired during the period, adjusted to exclude annualised rent abatements and non-recurring items and include rent Adjusted NOI top-ups provided by sellers Adjusted Occupancy Represents occupied GLA divided by available GLA, where available
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