Blackstone Inc. · NYSE:BX
Blackstone — Blackstone Property Partners Europe Holdings — Debt Investor Presentation (March 2023)
46 slides from Blackstone's debt investor presentation, March 2023
Slide 1: Blackstone Property Partners Europe Holdings Investor Presentation
Blackstone Property Partners Europe Holdings Investor Presentation MARCH 2023 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 Overview
BPPEH Overview Blackstone Property Partners Europe Holdings Blackstone | 3
Slide 5: Blackstone is the largest owner of commercial RE globally
PREMIER GLOBAL REAL ESTATE BUSINESS Blackstone is the largest owner of commercial RE globally BREP Core+ BREDS Global opportunistic Income-producing, substantially Global performing real estate debt real estate stabilised, global real estate and securities $125B 1991 $143B 2013 $59B 2009 investor ca
Slide 6: 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 Key Stats ▪ Focused on high-quality, substantially stabilised assets in major European markets and key gateway cities €13.2B – 62% of the portfolio is in logistics, Blackstone’s highest conviction in
Slide 7: Selected BPPEH Assets
SELECTED BPPEH ASSETS Northampton, UK Bedfont, UK Amsterdam, Netherlands Milan, Italy Berlin, Germany Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 6
Slide 8: Portfolio overweight to our highest conviction investment themes
BPPEH PORTFOLIO OVERVIEW Portfolio overweight to our highest conviction investment themes Sector Allocation Geographic Allocation Other (1) Poland Other (3) Trophy Retail Ireland 2% <1% 1% 6% Spain 3% 3% UK Netherlands 23% Office 9% 14% (2) Nordics (4) 9% Residential 16% Logistics Germany 62% 21% It
Slide 9: BPPEH benefits from Blackstone Real Estate's unique expertise and access to real-time information
WHY BLACKSTONE REAL ESTATE? BPPEH benefits from Blackstone Real Estate’s unique expertise and access to real-time information Vast Global Real Estate Portfolio Deep Expertise $577B A POWERFUL NETWORK EFFECT 904 Blackstone Real Estate TEV(1) real estate professionals, of which 201 are in Europe 12,60
Slide 10: Premier, multinational team and reach across Europe
DEEP & DIVERSE TEAM – BLACKSTONE REAL ESTATE EUROPE Premier, multinational team and reach across Europe 201 professionals 45 distinct nationalities 34 distinct languages spoken fluently 13k Blackstone Europe HQ portfolio company employees Blackstone Portfolio Company Offices Note: There can be no as
Slide 11: European portfolio companies and real-time data insights provide key strategic advantages
PROPRIETARY INSIGHTS FROM PORTFOLIO COMPANIES 20 European portfolio companies and real-time data insights provide key strategic advantages Blackstone’s €112B European RE platform … provides proprietary insights that + captive portfolio companies drive acquisition and AM initiatives Logistics 440M +1
Slide 12: 2022 Highlights
2022 Highlights Blackstone Property Partners Europe Holdings Blackstone | 11
Slide 13: 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-assembled portfolio, 62% concentrated in logistics 17% logistics market rent growth in Blackstone’s European High-growth
Slide 14: 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 15: High quality portfolio with operational upside potential
STRONG PERFORMANCE WITH OPERATIONAL UPSIDE POTENTIAL High quality portfolio with operational upside potential Strong Operating Opportunity to Capture Performance in 2022 Reversionary Potential 94% 90%+ occupancy leases linked to inflation or with rent reviews(1) 6Y 20% WALL(2) below market rents(3)
Slide 16: Creating value through proactive asset management
ASSET MANAGEMENT INITIATIVES Creating value through proactive asset management Logistics Office (62% of GAV) 713k sqm (14% of GAV) 12k sqm leases signed leases signed +10% +43% avg. re-leasing spread avg. re-leasing spread Residential Trophy Retail (16% of GAV) +14% (6% of GAV) +8% LfL rent psm grow
Slide 17: Proactive capital structure management
CAPITAL STRUCTURE MANAGEMENT Proactive capital structure management Robust Liquidity Position to Address Capital Structure Well-Positioned Upcoming Debt Maturities Through 2025 for Current Environment + €1.1B unrestricted cash & RCF (as of Dec-22) 50% Proactively injected cash into the business to m
Slide 18: Portfolio Overview
Portfolio Overview Blackstone Property Partners Europe Holdings Blackstone | 17
Slide 19: Logistics Portfolio
LOGISTICS PORTFOLIO Großbeeren, Germany Bedfont, UK Worcester, UK Halle, Germany Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 18
Slide 20: High-quality logistics portfolio comprising 243 properties primarily in the UK, France and Germany
LOGISTICS PORTFOLIO (62% OF GAV) High-quality logistics portfolio comprising 243 properties primarily in the UK, France and Germany Key Metrics Geographic Allocation Italy Other (2) Spain €8.2B 5.5M Poland 2% 1% 2% 3% Netherlands 4% GAV square metres Nordics(1) UK 14% 36% 94% 6.3Y Germany 15% occupa
Slide 21: Favourable fundamentals propelling logistics performance with more room to run
POSITIONED FOR CONTINUED GROWTH Favourable fundamentals propelling logistics performance with more room to run Growing Greater inventories: e-commerce demand just-in-time to just-in-case E-commerce penetration in Continental European inventories increased to Europe ~40% below the U.S. (1) record lev
Slide 22: Logistics fundamentals are exceptionally strong
LOGISTICS MARKET OVERVIEW Logistics fundamentals are exceptionally strong 10-Year Cumulative Rents vs. Vacancy(2) Supply vs. Demand(1) €120 +17% €114 growth €110 €97 €0 €100 7.4% €88 183M sqm €90 €84 1.7x €80 €75 €79 greater €71 €0 €70 110M sqm €60 €50 €40 €0 €30 2.6% €20 €10 €0 Supply Demand 2012 2
Slide 23: Residential Portfolio
RESIDENTIAL PORTFOLIO Braintree, UK Milan, Italy Amsterdam, Netherlands Berlin, Germany Berlin, Germany Note: See “Important Disclosure Information” including “Logos”. Blackstone Property Partners Europe Holdings Blackstone | 22
Slide 24: Prime residential portfolio concentrated in Berlin and Amsterdam
RESIDENTIAL PORTFOLIO (16% OF GAV) Prime residential portfolio concentrated in Berlin and Amsterdam Key Metrics(1) Geographic Allocation Rotterdam Utrecht UK 3% €2.1B 6.5K 5% 1% Other Germany(2) 5% GAV residential units Milan 8% Berlin 44% 99% 546 Amsterdam adjusted occupancy(1) properties 35% Note:
Slide 25: 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 | 24
Slide 26: 15 high-quality office assets located in eight dynamic cities across Europe
OFFICE PORTFOLIO (14% OF GAV) 15 high-quality office assets located in eight dynamic cities across Europe Key Metrics Geographic Allocation Stockholm €1.9B 242K 5% Rome 6% GAV square metres Milan 21% Barcelona 11% 93% 19% Paris 11% Dublin 20% occupancy below market rents(1) Munich 12% Berlin 14% Not
Slide 27: Attractive fundamentals in key European cities driving meaningful re-leasing spreads
OFFICE MARKET OVERVIEW Attractive fundamentals in key European cities driving meaningful re-leasing spreads Continued Market Rent Growth BPPEH 2022 Office Re-leasing Spreads(2) Across Tier 1 Office Markets(1) +6% €781 psm Barcelona – Avenida Diagonal growth €734 psm +41% €672 psm €649 psm €615 psm S
Slide 28: Trophy Retail
TROPHY RETAIL Milan, Italy Blackstone Property Partners Europe Holdings Blackstone | 27
Slide 29: Trophy asset on Via Montenapoleone, Milan's iconic luxury retail high street
TROPHY RETAIL (6% OF GAV) Trophy asset on Via Montenapoleone, Milan’s iconic luxury retail high street Key Metrics Location €840M 3K GAV square metres(1) 94% 4.9Y occupancy WALL Note: There can be no assurance that BPPEH, BPPE, or any other Blackstone fund or investment will achieve its objectives o
Slide 30: Capital Structure Summary
Capital Structure Summary Blackstone Property Partners Europe Holdings Blackstone | 29
Slide 31: 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) 50% BBB Unsecured Notes Unsecured Bank Facilities 6,742 133 1.8% 4.1% 4.3 2.6 net LTV (stable outlook) Revolving Credit Facility 147 2.7% 4.4
Slide 32: 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 RCF Mortgage Loans Floating Secured Bank 2% 5% 4% GBP 4% 20% Facilities 2% Unsecured Notes Fixed Unsecured EUR 93% 95% 96% 80% Note: GBP
Slide 33: Staggered debt maturity profile with a weighted average maturity of 4.3 years
DEBT MATURITY PROFILE Staggered debt maturity profile with a weighted average maturity of 4.3 years Interest 0.3% 2.0% 2.3% 1.3% 1.5% 1.9% 2.6% 1.6% - 4.9% - - 2.0% Rate(1) Sufficient liquidity to address maturities through 2025 €1,204 €1,142 €1,100 €1,000 €732 €747 Green Notes €500 €500 €339 - - -
Slide 34: RCF and unsecured bank facilities provide operational flexibility between bond issuances
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 + 1.55%(2) Maturity May-2027 3 years Security / Collateral Unsecured Unsecured Commitment Committed
Slide 35: ESG Programme
ESG Programme Blackstone Property Partners Europe Holdings Blackstone | 34
Slide 36: Action-oriented global ESG program
BLACKSTONE’S ESG FOCUS ENHANCES VALUE Action-oriented global ESG program Good Governance & Transparency Diversity Decarbonization ESG integration 47% 15% key to building resilient companies of Blackstone’s 2022 global analyst carbon emissions reduction target class is female across certain new inves
Slide 37: 2022 ESG Updates
2022 ESG UPDATES Enhancing value through ESG initiatives Logistics Residential Office 8.7 MW 29% 96% of on-site installed solar capacity, of Dutch residential units have of office portfolio has obtained a equivalent to powering 1.5k+ homes achieved an A or B energy label, green building certificatio
Slide 38: Active industry participation to better understand, benchmark and communicate ESG profile
2022 ESG UPDATES (CONT’D) Active industry participation to better understand, benchmark and communicate with investors on BPPEH's ESG profile Inaugural Sustainalytics ESG GRESB Risk Rating 80 70 60 50 40 2020 2021 2022 15.1 / Low Risk 76 ESG Risk Rating(1) GRESB score (above peer group average) 28th
Slide 39: 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 40: Concluding Summary
Concluding Summary Blackstone Property Partners Europe Holdings Blackstone | 39
Slide 41: Key Takeaways
KEY TAKEAWAYS High-Quality, 62% invested in logistics 1 Diversified Portfolio 73% in the UK, Germany, France and Italy 5% LfL rent psm growth 2 Strong Operating Performance 20% below market rent(1) 3 Maintained Leverage Target 50% net LTV as of Dec-22 €2.7B of liquidity, sufficient to 4 Increased Li
Slide 42: Appendix: Supplemental Materials
Appendix: Supplemental Materials Blackstone Property Partners Europe Holdings Blackstone | 41
Slide 43: 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.”) capital G.P. / Manager BPPE ▪ No legal obligation on behalf of the fund to sell assets to meet redemption requests ▪ Pruden
Slide 44: Below market rents provide an opportunity to capture reversionary potential
PORTFOLIO VALUATION Below market rents provide an opportunity to capture reversionary potential Historical MTM Yield 2022(1) Highlights NOI Yield 2022 BMR: (20%)(2) 5.0% 4.8% 4.6% 4.5% 4.6% 4.1% 4.2% 4.0% 3.9% MTM yield(1) 3.5% 3.4% 3.0% NOI Yield 2.5% 2.0% 20% 1.0% 1.5% below market rents(2) – (1)
Slide 45: Key Metrics
KEY METRICS Total / Logistics Residential Office Trophy Retail Weighted Avg (1) Number of Assets # 243 546 15 1 808 GLA kSQM 5,457 493 242 3 6,229 GAV €M 8,167 2,112 1,904 840 13,159 Occupancy / Adjusted 90% / % 94% 93% 94% 94% Occupancy 99% (2) WALL Years 6.3 n/a 4.0 4.9 5.8 (3) €116k NOI Yield (4)
Slide 46: 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. Investments Adjusted NOI sold during the period are excluded and investments acquired during the period are included Adjusted O
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