CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 - - PowerPoint PPT Presentation

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CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 - - PowerPoint PPT Presentation

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CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 Disclaimer This document may contain certain forward -looking statements . By their nature, forward-looking statements involve risk and uncertainty because they relate to future

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CLS Holdings plc

Capital Markets Day Hamburg 4 April 2019

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Disclaimer

This document may contain certain ‘forward-looking statements’. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from those expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of CLS speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except as required by its legal or statutory obligations, the Company does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Information contained in this document relating to the Company or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance. All numbers provided are as at 31 December 2018 unless otherwise stated.

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Contents

1 Overview 7 Germany 10 Operations 14 Key Data 18 Properties 25 Questions

Fredrik Widlund – CEO Rolf Mensing – Head of Germany Florian Voigt – Head of German Asset Management

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Overview

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 01

Fredrik Widlund – CEO

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Senior Management

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 02

Leadership

Fredrik Widlund – Chief Executive Officer

Fredrik joined in 2014. His previous experience includes senior roles in business leadership, property and finance and prior to joining CLS he worked for GE Capital Real Estate and Shell.

John Whiteley – Chief Financial Officer

John joined in 2009. He is a Chartered Accountant and his previous experience includes senior finance roles with Doughty Hanson Real Estate, Great Portland Estates and E&Y.

Simon Wigzell – Head of Group Property

Simon joined in 2010. He is a Chartered Surveyor and previous experience includes senior leadership roles in portfolio management and property development for Warner Estate, BAA and Cushman Wakefield.

Rolf Mensing – Head of Germany

Rolf joined in 2006. He is a Chartered Surveyor and his previous experience includes working for the Quandt Family Office and DIC Asset AG, a listed property company in Germany.

Florian Voigt – Head of German Asset Management

Florian joined in 2017. He has worked for several property companies in Germany in senior asset management roles with Christmann Immobilien and Arminius Kapitalgesellschaft.

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CLS Holdings plc

Overview

  • CLS Holdings plc is a property investment company

which has been listed on the London Stock Exchange since 1994

  • At 31 December 2018 the Company had shareholders’

funds of £1.1bn, and a property portfolio in the UK, Germany and France valued at £1.9bn

  • We specialise in owning and managing office buildings,

with a range of lease lengths, in order to achieve stable cash flows

  • We operate in London and the south east, and in the

major cities in Germany and France

  • We aim to hold, develop and refurbish our property

investments to obtain long-term asset growth

  • We have established offices in London, Hamburg,

Luxembourg and Paris

TOP 10 SHAREHOLDERS

Mortstedt Family & Charity Trust 51.4% Fidelity Worldwide Investments 9.6% Bengt Mortstedt 6.5% Bank of Montreal 6.1% Invesco 5.0% Schroders 2.5% AXA 1.7% Janus Henderson Group 1.2% JP Morgan Chase & Co 1.0% NW Brown Group 0.9%

PROPERTY VALUE BY GEOGRAPHY

UK (£982.3m) 51% Germany (£629.4m) 33% France (£308.1m) 16%

£1.9bn

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 03

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Consistent & Strong Returns

Key Financials

2.8 4.3 6.5 6.5 6.6 7.7 8.5 12.3 12.6 13.1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

EPRA EPS (pence)

83 95 98 115 127 177 208 246 286 310 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

EPRA NAV (pence)

6.0 11.2 12.3 13.2 15.0 15.9 19.1 23.5 25.9 28.1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

DISTRIBUTIONS (£m) TOTAL SHAREHOLDER RETURN

  • 100

200 300 400 500 600 700 800 900 CLS FTSE 350 FTSE Real Estate Super Sector 0.81 0.88 0.90 0.93 1.13 1.31 1.46 1.57 1.80 1.92 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PORTFOLIO VALUE (£bn)

22% CAGR

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 04

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Portfolio

CONTRACTED RENT (£109.6m)

Group Data

Government (28% by rent) Major corporates (29%) Other (43%)

689

Tenants

4.3 4.8 2.6 4.2 5.4 4.9 5.4 5.3 UK Germany France Group To first break To end of lease

AVERAGE UNEXPIRED LEASE TERM (years)

23.14 11.41 19.41 UK Germany France

AFFORDABLE RENTS (£/sq ft p.a.) TOP 10 TENANTS (33% of contracted rent)

1. Secretary of State (UK) 2. National Crime Agency (UK) 3. Roehampton University (UK) 4. City of Bochum (Germany) 5. BAE Systems (UK) 6. General Mills (UK) 7. Kaufland (Germany) 8. Honda (UK) 9. Bosch (Germany) 10. COLT Telecoms (France)

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 05

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Portfolio

Group Data

Government (30%) Business services (23%) IT (7%) Manufacturing (13%) Finance (5%) Medical services & healthcare (3%) Education & training (1%) Media and publishing (2%) Telecomms (1%) Charitable (1%) Other (14%)

OFFICE SECTORS BY REVENUE PROPERTY USE BY REVENUE

Office (89%) Student (5%) Hotel (4%) Food retail (2%) 4.5% 4.4% 3.9% 2.8% 4.4% 1.6% 3.1% 2.9% 5.8% 3.8% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Group KPI 5.0%

VACANCY

0% 2% 4% 6% 8% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net initial yield Weighted average cost of debt

EXCESS OF NET INITIAL YIELD OVER COST OF DEBT

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 06

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Germany

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 07

Rolf Mensing – Head of Germany

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Germany

GERMAN 10-YEAR BOND YIELD (%) GDP (€bn) EMPLOYMENT (m)

Powerhouse of the Eurozone

2,758 2,826 2,939 3,049 3,160 3,277 3,386

  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 2012 2013 2014 2015 2016 2017 2018

  • 0.5
  • 0.5

1.0 1.5 2.0 2.5 3.0 3.5 4.0

INFLATION (CPI)

* Forecast

41.3 41.8 42.2 42.5 42.8 43.3 44.0 44.6 45.0

40.0 41.0 42.0 43.0 44.0 45.0 46.0 2010 2011 2012 2011 2012 2013 2014 2015 2018

Source: www.statista.com

Population:

82.8m

Source: www.statista.com

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2.0% 1.5% 0.9% 0.3% 0.5% 1.8% 1.9%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2012 2013 2014 2015 2016 2017 2018

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Attractiveness of German Real Estate

  • Well-diversified strong economy
  • Ten large autonomous office markets
  • Low vacancy and limited supply driving rental and

high office employment driving capital growth

  • Record level of investment activity
  • Low supply of new build offices; mainly pre-let
  • Attractive spread between property yields and

funding costs Germany

HAMBURG MUNICH

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 09

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Operations

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 10

Rolf Mensing – Head of Germany

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2005 Platform Established

17 properties worth €250m

Development

24,000 sqm in Bochum, pre-let to Government

Market Entry

CLS Germany is set up

Corporate Acquisition

Acquired ZIAG AG with 12 properties, valued at €152m

Timeline

CLS Germany’s History

Asset Management

Vacancy below 3%

CLS Germany Today

30 properties worth €700m

Development

12,000 sqm in Landshut, pre-let to EON

Disposals

Disposal of Landshut properties for €31m

Portfolio

21 properties worth €419m

Acquisitions CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 11 2007 2009 2011 2014 2016 2017 2017 2019

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Create Value, Reinvest for the Future

Strategy

We acquire the right properties… …we secure the right finance… …we deliver value through active management and cost control

We reward shareholders, customers and employees

  • Distribute half of our

EPRA earnings and reinvest remaining

  • Our tenants are our

customers

  • Reward employees for

their loyalty and work

  • Invest in offices in non-

prime locations with good transport links in the larger cities in Germany

  • Multi-let to spread risk
  • Disciplined investment

approach

  • Up to 7 year term from

broad range of lending portfolio

  • Fixed rate primarily
  • Loans mainly to SPVs &

non-recourse

  • Hands-on in-house

asset and property management

  • Work with our

customers to understand their needs

  • Effective cost control

and higher occupancy than local markets

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 12

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German Asset and Property Management Team

Our Team

Asset Manager Property Manager Rolf Mensing

Head of Germany

Florian Voigt

Head of Asset Management

Tanja Korbmacher

Head of Property Management (Joins 01/07/19)

Northern Portfolio

Asset Manager Property Manager

Western Portfolio

Asset Manager Property Manager

Southern Portfolio Eastern Portfolio

Asset Manager Property Manager

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 13

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Questions

CLS Holdings plc Full Year Results 2018 | 17

Key Data

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 14

Rolf Mensing – Head of Germany

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Germany

Key Data

VALUE OF INVESTMENT PROPERTIES

€700.1m

LETTABLE SPACE

305,607 sqm

CONTRACTED RENT

€39.3m

ERV OF LETTABLE SPACE

€43.7m

VACANCY RATE

4.2%

EPRA NIY

5.1%

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 15

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Secure Tenant Base

Key Data

1

City of Bochum (Government) Technisches Rathaus, Bochum

2

Kaufland (Food Retail) Adlershofer Tor, Berlin

3

Robert Bosch (Manufacturing) Mitterer Pfad 2/4 & 9, Stuttgart

4

Hönle UV Technology (Manufacturing) Lochhamer Schlag 1, Munich

5

Materna (IT) Gotic Haus, Dortmund

6

Volksbank (Finance) Bismarckallee 18/20, Freiburg

7

MediGene (Medical) Maximilian Forum, Munich

8

Sky Deutschland (Media) Tangentis, Munich

9

Haematophatologie (Medical) Fangdieckstrasse 75, Hamburg

10

Telefonica (Communications) Parsevalstrasse 11, Düsseldorf

CONTRACTED RENT (€39.3m)

Government (11%) Major Corporations (30%) Other (59%)

TOP 10 TENANTS (30% OF PORTFOLIO)

314

Tenants

PORTFOLIO SPLIT (€700.1m)

North (25%) East (11%) South (34%) West (30%)

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 16

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LEASING DEALS 2018

73 deals Secured €8m of annual rent 2.3% above ERV 72% lease extensions 28% new leases

WAULT

4.8 years

(31 Dec 2017: 4.9 years) AFFORDABLE RENT

€11.38

Per sqm per month

Securing Income whilst Adding Value

Key Data

2.6% 2.5% 1.7% 7.1% 4.2%

2014 2015 2016 2017 2018

VACANCY (By Rent)

+ 0.3% + 1.3% + 0.3% + 3.3% + 5.0% 2% 4% 6% 8% 10% 12% 2014 2015 2016 2017 2018

RENTAL GROWTH (Like-for-like ERV)

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Properties

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 18

Florian Voigt – Head of German Asset Management

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Properties

CLS Germany

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Silo Schellerdamm 16 Fleethaus Schellerdamm 2 Hamburg

Value: €45m Contracted Rent: €2.5m Lettable Space: 18,658 sqm Tenants: 46

Nagelsweg 37/39 Hamburg

Value: €26m Contracted Rent: €1.3m Lettable Space: 9,137 sqm Tenants: 7

NORTHERN PORTFOLIO Principal Location: Hamburg Portfolio Value: €172.2m Number of Properties: 9 Properties Contracted Rent: €9.4m Lettable Space: 75,800 sqm Number of Tenants: 113 Portfolio Initiatives:

  • Drive down vacancies further
  • Capture rental growth
  • Value enhancing investments
  • Refurbishment of 2 underground car parks
  • Progress development projects
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Properties

CLS Germany

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Adlershofer Tor Rudower Chaussee 12 Berlin

Value: €58m Contracted Rent: €3.1m Lettable Space: 19,872 sqm Tenants: 26

Bismarckstrasse 105, Leibnizstrasse 11 -13 Berlin

Value: €23m Contracted Rent: €0.8m Lettable Space: 6,033 sqm Tenants: 3

EASTERN PORTFOLIO Principal Location: Berlin Portfolio Value: €80.5m Number of Properties: 2 Properties Contracted Rent: €3.9m Lettable Space: 25,900 sqm Number of Tenants: 29 Portfolio Initiatives:

  • Recent re-gear with Kaufland for a further 13 years
  • Capture rental growth on vacating tenants
  • Review of leases for further rental growth
  • Progress development projects
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Properties

CLS Germany

Tangentis Betastraße 5-9a Munich

Value: €38m Contracted Rent: €2.1m Lettable Space: 13,837 sqm Tenants: 17

Maximillian Forum Lochhamer Straße 11/13/15 Munich

Value: €39m Contracted Rent: €2.1m Lettable Space: 9,559 sqm Tenants: 10

SOUTHERN PORTFOLIO Principal Location: Munich, Stuttgart, Freiburg Portfolio Value: €253.6m Number of Properties: 11 Properties Contracted Rent: €14.0m Lettable Space: 108,400 sqm Number of Tenants: 98 Portfolio Initiatives:

  • Drive down vacancies further
  • Value enhancing investments
  • Proactive lease management to capture rental growth
  • Refurbishment of 3 underground car parks

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 21

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Properties

CLS Germany

Parsevalstrasse 11 Düsseldorf

Value: €48m Contracted Rent: €3.1m Lettable Space: 22,852 sqm Tenants: 12

Gotic Haus Westfalendamm 96-100 Dortmund

Value: €30m Contracted Rent: €2.9m Lettable Space: 22,296 sqm Tenants: 7

WESTERN PORTFOLIO Principal Location: Bochum, Düsseldorf, Dortmund and Wiesbaden Portfolio Value: €193.8m Number of Properties: 8 Properties Contracted Rent: €11.6m Lettable Space: 87,200 sqm Number of Tenants: 62 Portfolio Initiatives:

  • Drive down vacancies further
  • Capture rental growth
  • Value enhancing investments
  • Refurbishment of 3 underground car parks

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 22

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Disposals

Bismarckallee, Freiburg

  • Not a core city
  • Development potential once vacant possession is obtained
  • Planned sale 2019

East Gate, Munich

  • Single let tenant vacated January 2017; valued at €20m
  • Refurbished 16,400 sqm during 2017/18
  • Over 90% multi-let by year end
  • Planned sale 2019

CLS Germany

Schanzenstrasse, Düsseldorf

  • Tenant vacating H2 2019
  • Building at the end of its lifecycle
  • Located in prime residential area of Düsseldorf
  • Planned sale 2019

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 23

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Vor dem Lauch 14, Stuttgart

  • Acquired August 2017 as part of a portfolio
  • Existing building 8,700 sqm and ERV of €1.1m pa
  • Dec 18 valuation €10.9m
  • Potential 13,900 sqm office space
  • Potential ERV €3.0m pa

Development

Rolf Mensing – Head of Germany

Development Opportunities

CLS Germany

CURRENT USE PROPOSED DEVELOPMENT

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 24

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Questions