Grand City Properties SA · XETR:GYC
Grand City Properties SA — Investor Presentation (July 2015)
36 slides from Grand City Properties SA's investor presentation, July 2015
Slide 1: Grand City Properties July 2015
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Slide 2: Disclaimer
GRAND CITY Properties DISCLAIMER IMPORTANT: You must read the following disclaimer before continuing, The following disclaimer applies to the presentation following these pages and you are therefore advised to read these disclaimer pages carefully before reading, accessing or making any use of the p
Slide 3: Company Overview
COMPANY OVERVIEW GRAND CITY Properties GCP is a specialist real estate company focused on investing in and'managing turnaround opportunities in densely populated areas of the ye German real estate market As of July 2015, the company holds 66k units located mainly in Berlin, North Rhine Westphalia (N
Slide 4: Business Model and Property Life Cycle
BUSINESS MODEL AND PROPERTY LIFE CYCLE 4
Slide 5: Deal Sourcing and Acquisition Criteria
DEAL SOURCING AND ACQUISITION CRITERIA Diversified and large base deal sources Acquisition criteria Acquisition in densely populated areas and major cities Institutional High cash flow generating assets Receivers investors Banks Vacancy reduction potential Private Equity “cherry-pick” Court Screenin
Slide 6: Germany – Stable and Strong Macro Fundamentals
GERMANY – STABLE AND STRONG MACRO FUNDAMENTALS GCP conduct‘s its business activities in Germany‘s main cities and metropolitans, benefiting from the country‘s strong market environment and economic fundamentls. Debt/GDP 2014 Budget Surplus / Unemployment Deficit (% of GDP) Rate 2014 2014 Population
Slide 7: Highly Performing Locations
HIGHLY PERFORMING LOCATIONS Regional distribution (by value) Bremen ► GDP growth2 : 0.8% ► Migration balance3: 0.3% ► Population density4: 1,568 per km2 Berlin ► GDP growth (BY)2 : 2.2% ► Migration balance3: 0.7% ► Population density4: 3,837 per km2 Dresden/Leipzig/Halle NRW ► GDP growth (SN)2 : 0.9
Slide 8: Turnaround Stages
TURNAROUND STAGES Turnaround stages by units and vacancy rates change over time
Slide 9: Defensive Portfolio Embedding Potential to Come
DEFENSIVE PORTFOLIO EMBEDDING POTENTIAL TO COME Current Annualized Rental Income vs. Market Potential Residential in place rent compared to market rent prices including vacancy reduction at market rent Large upside potential for rent increase to market levels with very limited downside risk.
Slide 10: Key Financials (1)
KEY FINANCIALS (1) Portfolio Development (in units) Net Profit Total equity EPRA NAV 2)
Slide 11: Key Financials (2)
KEY FINANCIALS (2) FFO (in € millions) FFO I per share (in €) *) The FFO pro forma assumes that the July 2015 portfolio is **) FFO I per share after Hybrid Notes attribution fully operated on an annualized basis FFO I after Hybrid Notes attribution, FFO I (in € millions) per share (in €) Adj EBITDA
Slide 12: Financial Highlights (in € millions)
FINANCIAL HIGHLIGHTS (IN € MILLIONS) 12
Slide 13: Financial Highlights (in € millions)
FINANCIAL HIGHLIGHTS (IN € MILLIONS) 13
Slide 14: Management Track Record Turnaround
MANAGEMENT TRACK RECORD TURNAROUND 14
Slide 15: Management Track Record Turnaround
MANAGEMENT TRACK RECORD TURNAROUND 15
Slide 16: Debt Schedule
GRAND CITY Properties DEBT SCHEDULE Investment grade rating by both leading rating agencies: Moody's with Baa2 with stable outlook rating received in February 2015 and S&P with BBB with stable outlook rating received in July 2015. The ratings are supported by a strong financial profile which validat
Slide 17: LTV & Debt Cover Ratios
LTV & DEBT COVER RATIOS Interest Coverage Ratio Debt Service Coverage Ratio *) (Adjusted EBITDA / interest) Adjusted EBITDA / (interest + loan amortization) DSCR, a Loan-to-Value 17
Slide 18: Debt Structure and Financing
DEBT STRUCTURE AND FINANCING *Calculated as the ratio of the unencumbered assets to the total value of investments properties. • • • • 18
Slide 19: Peers Analysis – Business
PEERS ANALYSIS – BUSINESS Peer companies Lower Upper Range Range Amount of Units 66k 350k 15k 88k managed 390k managed In-place rent (€ per m2) 5.3 5.1 6.3 Vacancy Rate 12% 9.1% 2.2% Top Locations Well diversified NRW (32%), Portion of largest Portion of largest Berlin(17%),Dresden/Leipzig/Halle (21
Slide 20: Peers Analysis – Key Financials
PEERS ANALYSIS – KEY FINANCIALS Peer companies Lower Upper Range Range Total Cost of Debt 2% 3.7% 2.3% LTV 38% 65% 47% LTV assuming conversion 30% 62% 40% Interest Coverage Ratio (ICR) 5.7x 1.8x 3.2x Debt Service Coverage Ratio (DSCR) 4.3x 1.1x 2.3x Net debt to EBITDA 7.4x 15.5x 9.5x FFO to net Debt
Slide 21: Moody's Rating Peer Comparison
MOODY’S RATING PEER COMPARISON Broad Rating Rating Sub- Rating Sub-Factor Factor Factor Weight Measure Score Measure Score Measure Score Measure Score (LTM Q3 14) (12-18 Month (LTM Q1 15) (LTM Q4 Forward View) 14) Liquidity Coverage 8.00% Ba Ba Ba Ba A A Baa Baa Liquidity and Debt Maturities ratio 6
Slide 22: GCP - S&P Anchor Rating Matrix
GCP - S&P ANCHOR RATING MATRIX Financial risk profile 1 2 3 4 5 6 Minimal Modest Intermediate Significant Aggressive Highly Leveraged 1 Excellent aaa/aa+ aa a+/a a- bbb bbb-/bb+ GCP's will continue strengthening its business profile Business risk profile 2 (DW) (DA)* Strong aa/aa- a+/a A- BBB bb+ bb
Slide 23: Proven Ability to Access Capital Markets
PROVEN ABILITY TO ACCESS CAPITAL MARKETS 24
Slide 24: Financing Sources
, GRAND CITY —_— Properties FINANCING SOURCES LB=BW DG ere DKB t2sieesise IPEBB maces. Berlin Hyp : A HYPO NOE am. Hypothekenbank cy GRUPPE hl imme S Sparkasse : MiinchenerHyp I Rhein Neckar Nord -) Bayern LB COREALCREDIT
Slide 25: Bookrunners and Analyst Coverage
BOOKRUNNERS AND ANALYST COVERAGE • • • 25
Slide 26: Outperforming
OUTPERFORMING GCP LEG DW TAG 26
Slide 27: Shareholder Structure
GRAND CITY Properties Shareholder Structure Share price throughout the Company's Issuances % Share price at issuance/ 108 conversion price 9.72 10 Edolaxia Ltd. 8 6s im Fidelity Worldwide Investment 5.40% c 446 Merrill Lynch 3.22% 4 Odey Asset Management LLP 2.84% 4 275 , || 0+ t 1 Juty 2012 oct 201
Slide 28: GCP's Sustainable Competitive Advantages
GCP’S SUSTAINABLE COMPETITIVE ADVANTAGES Highest operational performance – benefiting both from occupancy and rent growth. Number 1 LFL rent increases (over 5%) Diverse financing sources and excellent professional relationships with 15 German commercial banks and 8 international
Slide 29: Board of Directors and Advisory Board
BOARD OF DIRECTORS AND ADVISORY BOARD 29
Slide 30: Grand City Properties organization and IT system
GRAND CITY Properties [ Asset Management | | Mr. Filip Planinsky IT Development [ I I l Sales & Marketing Opayations / Construction Acquisitions & Maintenance Due Diligence i) Customer Relation Management (CRM) through Proprietary and Centralized IT system : m= Continuous monitoring of portfolio ope
Slide 31: Rental Management with IT Support
RENTAL MANAGEMENT WITH IT SUPPORT 31
Slide 32: Tenant Satisfaction with IT Support
TENANT SATISFACTION WITH IT SUPPORT 32
Slide 33: Rent Increase
GRAND CITY Properties RENT INCREASE c> Automated rent increase calculation - Martin Schlésser —_) Market limitation Rental team a
Slide 34: Cost Saving Measures
GRAND CITY Properties COST SAVING MEASURES a —) Cost savings & yield improvements through new methods and wireless meters Pas Changing fixed costs into variable costs i) slut Mr. Sebastian Remmert-Faltin Operational Manager —) Reduce costs for tenants and vacancy costs
Slide 35: Summary
SUMMARY Experienced management team with unique knowledge of the market Investing in value-add assets with Proven expertise with established downside track record protection In-house IT/software to support a strong team Conservative financial leverage with best financial profile in German real estat
Slide 36: Contact
CONTACT Or Zohar Director of Acquisition & Business Development E-mail: [email protected] www.grandcityproperties.com 36
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