COMPANY PRESENTATION AUGUST 2018 ATRIUM PROMENADA VISUALISATION | WARSAW
ATRIUM – A UNIQUE INVESTMENT OPPORTUNITY Continued focus on owning high quality large assets in well-connected strong urban locations within Central Europe Concentrated in Poland and the Czech Republic, the region’s largest and strongest economies Focus on the capitals - Warsaw and Prague in Poland and the Czech Republic Strong management team with a proven track record Balance sheet 30/06/2018 well placed to support growth initiatives: 33.5% net LTV, financial policy 40% leverage € 45m cash & marketable securities Investment grade rating by Fitch, S&P and Moody’s, positive outlook Fitch and Moody’s Balance between solid income producing platform & opportunities for future growth from redevelopment pipeline and portfolio rotation 2
FOCUS: DOMINANT ASSETS IN POLAND AND CZECH STANDING INVESTMENT PORTFOLIO SPREAD* Atrium owns 34* properties, over 900,000 sqm GLA with a market value of € 2.5bn* 82%* of the portfolio is located in Poland and the Czech Republic, 37% in Warsaw and Prague SLOVAKIA 2 Focus on high quality assets in strong urban locations at the heart of their communities POLAND The top 10 assets are 68% of total portfolio value and 48% of the GLA 21 21 High quality and convenient locations coupled with healthy retail, leisure and necessity anchor WARS WA RSAW 34% % of MV MV tenants provides resilience to evolving retail climate Further growth from redevelopment programme of € 300m, creating 60,000 sqm GLA in Warsaw 33.5% net LTV supports further growth GEOGRAPHIC MIX OF THE PORTFOLIO* 46 (1/1/18) → 34* assets as of today 12% THE CZECH REP. 4 6% Poland RUSSIA PRA RAGUE UE 7 80% % of MV MV Czech Republic Valu alue * € 2.5 2.5bn bn Slovakia Russia 20% 62% * Excl. a € 95m asset in Romania (sold in July 2018) and 4 assets in Hungary with a total value of € 12m (for which sale agreements were signed in July 2018) 3
STRATEGY EXECUTION SNAPSHOT 31.12 .12.2014 30.06 .06.2018* € 2.6bn PORTFOLIO MARKET VALUE € 2.5bn 153 NUMBER OF ASSETS 34 7 NUMBER OF COUNTRIES 4 8,900 sqm AVERAGE ASSET SIZE IN GLA 27,600 sqm € 17m AVERAGE ASSET VALUE € 73m 97.4% OCCUPANCY RATE 97.0% 95.1% OPERATING MARGIN 97.3% 8.0% NET EQUIVALENT YIELD 6.8% € 36m REDEVELOPMENT PROJECTS € 143m € 329m LAND PORFOLIO € 229m Portfolio repositioning strategy executed through 120 assets sales with an average value of € 3.4m since 2015 and the acquisition of Arkady Pankrac shopping centre in Prague now valued at € 173m * Excl. a € 95m asset in Romania (sold in July 2018) and 4 assets in Hungary with a total value of € 12m 4 (for which sale agreements were signed in July 2018) 4
OUR MARKETS: 82% OF THE PORTFOLIO BY MARKET VALUE IS LOCATED IN POLAND AND THE CZECH REPUBLIC 4.1% and 3.5% 2018 forecast for GDP growth for Poland and the Czech Republic respectively 4.5% and 4.3% increase in consumer spending forecast for 2018 for Poland and the Czech Republic respectively GDP growth (2014-2018F) Consumer spending growth (2014-2018F) 5.3% 6.0% 6.0% 4.8% 4.3% 4.6% 4.5% 4.1% 4.1% 3.8% Poland 3.5% 2.9% 3.3% 4.0% 4.0% 3.8% 2.7% 4.3% 2.6% 4.3% 2.5% 2.7% 2.4% 3.6% 3.2% Czech 2.0% 1.8% 1.8% 2.0% 2.0% 1.8% 2.4% EU 2.1% 1.9% 1.8% 1.2% 0.0% 0.0% 2014 2015 2016 2017 2018F 2014 2015 2016 2017 2018F Poland Czech EU Retail sales y/y (2014-2018F) E-commerce penetration (2014-2018F) 20.0% 16.8% 15.7% 7.3% 14.5% 7.1% 14.8% 8.0% 13.3% 13.3% 15.0% 12.1% 5.7% 5.8% 5.4% 11.2% 5.5% 9.9% 4.8% 6.0% 9.1% 4.2% 4.0% 8.8% 8.4% 7.7% 10.0% 7.1% 6.9% 3.4% 7.2% 6.2% 4.0% 2.8% 2.5% 5.4% 2.6% 2.3% 3.9% 1.9% 4.6% 5.0% 2.0% 0.0% 0.0% 2014 2015 2016 2017 2018F 2014 2015 2016 2017 2018F Poland Czech Rep. EU Poland Czech Rep. UK Germany Sources: Polish and Czech Statistical Office, Eurostat, Capital Economics 5
37% OF THE PORTFOLIO BY MARKET VALUE IS LOCATED IN WARSAW AND PRAGUE WARSAW PRAGUE Poli olish ag aggl glomerations acc accounts for or mor ore tha han 30 30% of of the po population Warsaw Wa Silesia Krak rakow Tri ri City Wrocl Wro claw Po Pozn znan Lod odz Szcz czecin Tota otal Population (M people) 3.1 2.6 1.4 1.1 0.9 1.0 0.9 0.5 11.5 Monthly Retail per capita (sqm/1000 population) 477 466 526 593 724 722 549 451 6,139 Mac acro in indicators s – Pola oland and and the Czech Rep epublic Cze zech ch Wa Warsaw Poland Po Pr Prague Euro Ar Eur Area Fran rance ce Germany Re Republic Population (M people) 1.8 38.0 1.3 10.6 512.6 64.8 82.7 Unemployment (%) 2.0% 4.9% 1.7% 2.9% 7.6% 9.4% 3.8% Monthly Retail per capita (sqm/1000 population) 477 281 677 220 n.a. 286 177 6 Sources: Polish and Czech Statistical Office, Eurostat, Capital Economics
OUR STRATEGY AT THE HEART OF THE LOCAL COMMUNITY HIGH QUALITY ASSETS STRENGTHENING THE PORTFOLIO Improving the portfolio through a Further grow to come from the selective rotation of assets towards ongoing redevelopment and high quality assets in strong urban extension programme locations at the heart of their communities FOCUS ON PLACEMAKING INNOVATION To meet the challenges of ever- Providing a variety of leisure, growing ecommerce and changes dining and other entertainment in consumer spending habits experience elements as well as a tenant mix tailored to the centres’ local environments 7
RESILIENT INCOME: STRONG TENANTS, LONG LEASE DURATION AT AN AVERAGE OF 4.7 YEARS* TENANT MIX BY ANNUALISED RENTAL INCOME Grou oup % of % f Ann nnualis lised Internatio ional l Sale ales 20 2017 17 € Bn, n, Main ain br bran ands name nam Rental l Inc ncome presence pr wor orld ldwid ide 1,923 stores/ 7,400 sqm of leisure and entertainment will be added from the projects AFM AFM 5% 52.8 17 countries in re-development over the next 9 months 1,700 stores/ LPP LPP 4% 1.6 20 countries 4,800 stores/ uritz Henn ennes & Ma Maur 3% 23 2% 1% 3% 69 countries Fashion Apparel (40%) 4% 2,200 stores/ Met Metro o Gr Grou oup 2% 58.4 Speciality goods (13%) 33 countries 7% Home (12%) 1,280 stores/ Ki King ngfishe her 2% 11.2 10 countries Health and Beauty (11%) 40% 7% 934 stores/ Hyper/Supermarket (7%) CCC 1% 3.5 17 countries Restaurants (7%) 12,000 stores/ Car arref efour ur 1% 88.2 Entertainment (4%) 30 countries 11% Services (3%) 1,000 stores/ New New Yo Yorker er 1% n/a 40 countries Non Retail (2%) 232 sites/ Specialty Food (1%) Cine newor orld 1% 0.6 12% 9 countries 13% 14,300 stores / A.S. Wa Watso son 1% 55.4 24 countries Top op 10 tena nant nts 22% 22% *till lease expiry, as at 30.06.2018 8
€ 300M REDEVELOPMENT AND EXTENSION PROGRAMME IN WARSAW Białołęka Atrium Targowek Further growth and improvement in quality to come from the ongoing € 300m redevelopment and extension programme Bielany Targówek Żoliborz Rembertów Praga Creating over 60,000 sqm GLA to our 3 centres in Warsaw Północ Bemowo Wesoła Praga Wola € 115m invested by the end of June 2018 Południe Ochota Creating dominant and convenient centres with focus on place making and a wider offer of leisure, dining and other entertainment Ursus Wawer Mokotów experiences, tailored to the centres’ local communities and catchment Włochy areas High levels of tenant demand for extensions with key tenant leases Wilanów Atrium Atrium secured prior to and during construction Reduta Ursynów Promenada Current phases of the redevelopments are virtually fully leased 9 10 10
CREATING 26,000 sqm in 2018 INC NCREMENTAL GLA K sqm 70 60 50 40 61.9 30 1.5 4.2 20 8.6 26.8 10 13.2 7.6 0 2016 2018 by 2019/2021 Total Atrium Red eduta Atrium Promenada Atrium Tar argowek 47,600 sqm 8,600 sqm 5,700 sqm A large scale extension that creates a unique, modern, Increase the number and size of 2,700 sqm cinema, being the first interactive shopping centre dominant fashion anchor tenants CINEMA3D in Warsaw and a modern 1,500 13,200 sqm are scheduled to open in Q4 2018, sqm fitness centre will open in Q4 2018 Refurbish the mall area within the including double shop fronts, a refurbished fountain existing scheme The overall refurbishment of the centre and alley and new food court units new food court units will be completed in Expected completion at the end of 2018 The total project is expected to complete in 2021 2019 11
ADEQUATE LIQUIDITY WITH A € 300 MILLION REVOLVER CREDIT FACILITY AND A 33.5% NET LTV Cash and marketable securities of € 45m as at the end of June 2018, € 95m from the disposal of Militari was received in July € 75m increase in revolving credit facility to € 300m with an expiry in 2023 ↓€ 2m in financial expenses compared to H1 2017- bank refinancing in 2017 and impact of foreign currency differences LTV (net) Borrowings Debt maturities (as at 30/06/2018) (in million € ) Long term target at around 40% 3.4% cost of debt 4.2 years average maturity 84% unencumbered standing investments 33.5% 30.1% 28.7% 26.3% € 986 986m m Total debt 501 334 115 2020 2022 2027 Bonds Bank Loans Bonds € 835m Loan € 134m RCF € 17m 31/12/2015 31/12/2016 31/12/2017 30/06/2018 11 11
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