Vonovia SE · XETR:VNA
Vonovia — Non-Deal Roadshow (October 2023)
37 slides from Vonovia's roadshow presentation, October 2023
Slide 1: Asia Roadshow
Asia Roadshow Company Presentation October 2023
Slide 2: Agenda
Agenda 1. Residential Market Fundamentals 2. Vonovia 3. Appendix
Slide 3: High Tenant Ratio and Fragmented Ownership Structure
High Tenant Ratio and Fragmented Ownership Structure Rules-based System to Reconcile Interest between Landlords and Tenants Germany is home to the largest housing market in Rules-based rent growth system to reconcile Europe and the majority of Germans are tenants interests of landlords and tenants •
Slide 4: Rent & Inflation
Rent & Inflation • No direct connection between inflation & rent growth but historic 120 Inflation & rent growth (Germany) CPI data shows strong correlation & similar growth rates over 100 Rents time. 80 60 • When inflation shows meaningful acceleration, rent growth 40 cannot keep up initially due t
Slide 5: Megatrends
Megatrends Support from megatrends while other real Supply-/ €100bn investment volume every year to complete estate sectors fight disruptive changes Demand Imbalance 400k apartments per year.1 Up to €120bn investment volume every year Climate Change to decarbonize Germany’s housing stock.2 Shortage
Slide 6: Support from Megatrends Instead of Disruptive Threats
Support from Megatrends Instead of Disruptive Threats Positive Fundamentals Drive Long-term Structural Growth Office & Retail Residential People do not have to work in an office, …but people do need a place they call home. and there are viable alternatives to shopping in stationary retail outlets...
Slide 7: Key Facts about the German Multifamily Market
Key Facts about the German Multifamily Market High Visibility on Future Rent Growth but Gradual Implementation As Regulation Creates Delay Implied and in-place fair values well below market Upward pressure and low volatility in values for existing and new assets 180 German house prices Portfolio fai
Slide 8: Agenda
Agenda 1. Residential Market Fundamentals 2. Vonovia 3. Appendix
Slide 9: Vonovia at a Glance
Vonovia at a Glance Best Investment Opportunity in Multi-family Housing Performance since IPO Interest rate hike has led to massive distortions between in-place yields and implied yields Vonovia EPRA Developed Europe In-place Implied Gross portfolio yield1 3.9% 5.3% Net portfolio yield2 3.1% 4.3% Ea
Slide 10: Vonovia's Growth Drivers
Vonovia’s Growth Drivers Vonovia is uniquely positioned as the best-in-class operator and sustainability leader in a structurally undersupplied asset class. Customer & employee satisfaction Best-in-class 1 2 Robust capital structure and operating platform competitive cost of capital Investment progr
Slide 11: Operations
Operations Best-in-class Operator with Strong Market Fundamentals Scale and efficiency gains1 • Operating business benefits from rock-solid fundamentals 81% +20pp with accelerating market rent growth, record-high 486 +171% 830 occupancy levels and full collection rates. • Vonovia has developed a uni
Slide 12: Population Growth In Germany In Urban Areas
Population Growth In Germany In Urban Areas Vonovia Has Actively Managed Its Geographic Exposure to Urban Areas • Current demographic forecasts estimate an Germany’s housing market4 and Vonovia’s exposure overall population growth of as much as 6% by 20501 including the required 400k labor The Futur
Slide 13: Sustainability
Sustainability Key Differentiator of the Future Vonovia is ahead of the market as a result of comprehensive … as well as a science-based strategy and a dedicated investments since the IPO… commitment to become nearly CO2 neutral until 2045. Key measures for CO2 neutrality 2.0% 1.1% 0.1% 4.0% Heating
Slide 14: Financing
Financing Well-balanced and Long-term Maturity Profile with Diverse Funding Mix Debt Maturity profile as of early August 2023 • Impact of higher interest rates on financing cost is cushioned by 7- year average maturity. 40% Bank loans1 • Financial debt KPIs currently outside of target ranges but unw
Slide 15: Consequences of a Higher Interest Rate World
Consequences of a Higher Interest Rate World Continued Access to Liquidity But at Higher Cost. Increased Disposals • Continued access to secured and unsecured debt but at higher cost All refinancing needs until end of 2024 covered (avg. cost of debt 1.6% vs. 4%+ for new debt). To be repaid with oper
Slide 16: Wrap-up
Wrap-up German residential offers structural growth in a robust 1 market supported by highly attractive fundamentals. 2 Three dominant megatrends provide long-term tailwind. Vonovia has built the best-in-class platform that offers a 3 compelling investment opportunity in German residential. Oct. 202
Slide 17: Agenda
Agenda 1. Residential Market Fundamentals 2. Vonovia 3. Appendix
Slide 18: Regional Markets
Regional Markets Balanced Exposure to Relevant Growth Regions Fair value1 In-place rent Average rent Regional Markets Residential Organic rent Multiple Purchase power Market rent growth (LTM, %) Residential Vacancy Total Residential (€/sqm/ growth (in-place index (market increase forecast from Optim
Slide 19: Portfolio Clustering
Portfolio Clustering In-place In-place Vacancy Fair value Fair value Gross Jun. 30, 2023 Resi units rent rent rate (€bn) (€/sqm) yield (€m p.a.) (€/sqm) Urban quarters (Includes >€10bn fair value for further potential JV structures) & clusters 421,631 2,338 7.44 1.8 62.8 2,389 3.8% Included in Segme
Slide 20: Who Are Vonovia's Lenders Outside the Bond Market?
Who Are Vonovia’s Lenders Outside the Bond Market? 6% 12% 2% 3% Top Five Lenders: • Berlin Hyp AG 27% • Deutsche Pfandbriefbank AG • HVB/UniCredit 50% • Bayerische Landesbank • Berliner Sparkasse Bonds1 Commercial banks Bank loans German lenders State and savings banks Bank loans Swedish lenders Fed
Slide 21: Bonds & Ratings
Bonds & Ratings Name Tenor & Coupon ISIN Amount Issue price Current Price 3 Yield3 Coupon Final Maturity Date Moodys Scope S&P Bond 028A (EMTN) 2 years 0.000% DE000A3MP4S3 EUR 351,9m 100,484% 99,19% 5,16% 0,000% 01-Sep-2023 Baa1 A- BBB+ Bond 004 (USD-Bond) 10 years 5.000% US25155FAB22 USD 250,0m 98,
Slide 22: Bond Covenants
Bond Covenants Substantial Headroom for All Covenants Required Current level Headroom1 Bond covenants level (Jun. 30, 2023) On the current total financial LTV 44.4bn debt level, fair values would have <60% 46.6% (Total financial debt / total assets) 95.4bn to drop ~25% for the LTV to cross 60%. On
Slide 23: Consequences of a Higher Interest Rate World
Consequences of a Higher Interest Rate World Residential Values Resilient Compared to Capital Market Concerns. First signs of Stabilization. • Market transaction volume still low and no certainty about direction Characteristics of a stable German resi market and speed of near-term value movements. 5
Slide 24: Comps & Implied Building Values
Comps & Implied Building Values Market Comps and Implied Land Values Suggest Vonovia Valuation Is Conservative Vonovia’s implied building values based on reported fair values and current equity valuation (€/sqm) 7,000 6,000 ~€1,000 implied ~€250 implied building value for building value for 5,000 Vo
Slide 25: Vonovia's Fair Values and Rents Are Substantially Below Market
Vonovia’s Fair Values and Rents Are Substantially Below Market Data Points on Prices for Condos & New Constructions and Rent Levels Price levels Rent levels Vonovia fair values versus prices for condos and new constructions Vonovia rental levels versus prices for condos and new constructions (€/sqm)
Slide 26: Resi Prices Have Shown No Real Weakness in 50 Years
Resi Prices Have Shown No Real Weakness in 50 Years Only Period of Slight Decline Came During High Vacancy Phase OECD House Price Index Germany (2015=100) and vacancy rate 180 9% 160 8% 140 7% 120 6% 100 5% 80 4% 60 3% 40 Period of high vacancy following Period of low 2% construction boom after vaca
Slide 27: Relation between NIY and Financing Costs
Relation between NIY and Financing Costs 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 Selected German Cities(1) avg. EPRA NIY Eurozone 10+ Year Corp Bonds YTM Top 30 Markets Residential IRR (unlevered) 1 Simple average of Berlin, Cologne, Dusseld
Slide 28: Residential Market Fundamentals (Germany)
Residential Market Fundamentals (Germany) Household Sizes and Ownership Structure Growing number of smaller households Fragmented ownership structure • While the overall population in Germany is expected to slightly decline, • Germany is the largest housing market in Europe with ~43m housing the num
Slide 29: Supply/Demand Imbalance
Supply/Demand Imbalance Gap May Become Even Larger • Vonovia considers the structural supply/demand imbalance in urban areas to Age group distribution in Germany (million)2 be the most relevant driver of residential property values. • A meaningful improvement to this imbalance is not in sight: • Bui
Slide 30: Affordability
Affordability Average German Household Income and Average Cost of Vonovia Apartment Average disposable income per household in Germany in 2021 was In an effort to mitigate the financial burden from increased cost of living, €3,813/month (€45,756/year).1 the government has put in place various suppor
Slide 31: Long-term Structural Support (Germany)
Long-term Structural Support (Germany) Positive Fundamentals Urbanization1 • Long-term structural support from 100 80 84 75 • Insufficient levels of new construction 80 75 78 68 70 65 • Urbanization driving supply/demand imbalance in urban areas 60 60 40 55 • High replacement costs 50 20 45 0 40 195
Slide 32: Long-term Structural Support (Sweden)
Long-term Structural Support (Sweden) Positive Fundamentals Urbanization1 • Long-term structural support from 100 93 88 84 12 • Insufficient levels of new construction 80 66 10 • Urbanization driving supply/demand imbalance in urban areas 60 8 40 • High replacement costs 6 20 4 0 1950 2000 2022 2050
Slide 33: Total Performance since IPO
Share price (rebased to 100) 80 180 280 380 Jul-13 S-DAX Sep-13 Nov-13 Jan-14 Mar-14 May-14 Vonovia Jul-14 M-DAX Sep-14 Nov-14 Stoxx 600 Jan-15 Mar-15 May-15 Jul-15 DAX Total Performance since IPO Sep-15 DAX Nov-15 Jan-16 Mar-16 Oct. 2023 | Asia Roadshow. Company Presentation May-16 Jul-16 Liquid La
Slide 34: Vonovia Shares
Vonovia Shares Basic Data and NOSH Evolution Norges First day of trading July 11, 2013 No. of shares outstanding 814.6 million 14.6% Free float 85.4% BlackRock 6.9% ISIN DE000A1ML7J1 Ticker symbol VNA 4.0% APG 3.0% DWS Investment Share class Registered shares with no par value Main listing Frankfurt
Slide 35: IR Contact & Financial Calendar
IR Contact & Financial Calendar https://investors.vonovia.de Contact Financial Calendar Rene Hoffmann (Head of IR) Primary contact for Sell side, Buy side +49 234 314 1629 Nov 3 9M 2023 Results [email protected] Nov 21-23 UBS Asia Debt Capital Markets Issuer/Investor Event 2023 (IR only) Stef
Slide 36: Disclaimer
Disclaimer This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, “Vonovia”) for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it. This presentation has been provided for information purp
Slide 37: For Your Notes
For Your Notes Oct. 2023 | Asia Roadshow. Company Presentation 37