Company profile A Central and Eastern European property development - - PDF document

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Company profile A Central and Eastern European property development - - PDF document

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Results presentation June 2014 1 Company profile A Central and Eastern European property development and investment company Distribute cash dividends (or return of capital & share subscription) on a semi-annual basis Invest in

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Results presentation

June 2014

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  • A Central and Eastern European property

development and investment company

  • Distribute cash dividends (or return of capital & share

subscription) on a semi-annual basis

  • Invest in properties with long-term multinational

tenants with leases in Euro

  • In-house property management, asset management,

property investment & property development via an integrated approach

  • 5-year nominal average compounded annual growth

rate in distribution per share of 14.03%

Company profile

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  • Dominant or potentially dominant regional shopping

malls and value centres in Romania and Slovakia

  • Opportunistic investment in A-grade offices in prime

locations in cities with significant multi-national tenant presence

  • Continued expansion beyond Romania with strong

local management teams, where scale can be established

  • Gradual disposal of non-core assets held for sale

Strategy

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Financial performance

* 2014 interim distribution assumed at 14.2 ZAR/€ ** (Debt – cash) / (investment property + listed securities)

Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Distribution per share (€ cents) 8.11 8.35 9.26 9.77 10.48 11.24 12.05 12.93 13.86 14.87 Distribution per share (ZAR)* 84.49 77.99 90.79 99.79 106.18 119.37 143.76 172.74 207.90 211.15 Adjusted NAV per share (€) 1.97 2.03 2.22 2.33 2.43 2.63 2.88 3.10 3.70 3.89 Gearing (%)** 46.0 42.3 49.0 41.9 32.1 33.9 25.0 18.9 22.5 16.2 Shares in issue (million) 41 62 77 88 103 125 144 159 205 225 Trading (million shares) 3.96 6.0 5.3 5.5 17.7 14.0 12.8 16.5 17.2 15.8 No of shareholders 232 472 642 1,396 1,907 2,372 3,479 4,316 6,011 7,006

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Highlights

  • Recurring distributable earnings (€)

19%

(compared to the six months ended 30 June 2013)

  • Increase in acquisition and development pipeline

Retail:

  • Achievement of scale in Romania
  • Increase in foot-fall
  • Vacancy* at 1.45% (1.52% at 31 Dec 2013)
  • Negligible arrears

* Excluding investment property held-for-sale

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Highlights (continued)

Office:

  • Increased supply in Floreasca – Barbu Vacarescu
  • ffice corridor
  • Strong demand in Timisoara and Cluj
  • Vacancy* at 1.19% (0.06% at 31 Dec 2013)
  • 65% of The Office – Phase I development leased
  • Negligible arrears

* Excluding investment property held-for-sale

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Portfolio structure by gross rental

66% 31% 3%

Retail Office Industrial Jun 2014 Jun 2013

42% 54% 4%

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Top 10 retail tenants

1.0% 1.1% 1.2% 1.4% 1.4% 1.5% 2.0% 3.3% 6.2% 6.3% 0% 2% 4% 6% 8% Zara Praktiker Deichmann Cora Altex H&M Metro Cash & Carry Bricostore Auchan Carrefour % of total monthly rent in Jun 2014

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Top 10 office tenants

0.7% 0.8% 0.8% 1.0% 1.1% 1.1% 1.2% 1.3% 1.4% 3.2% 0% 1% 2% 3% 4% Visma L'Oreal Regus Xerox Alcatel-Lucent Wipro Raiffeisen Bank Huawei Royal Bank of Scotland PricewaterhouseCoopers % of total monthly rent in Jun 2014

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Gross rentals (€ million)

Rent expiry profile per sector

10 20 30 40 50 60 70

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Retail Office Industrial 62%

8% 30%

Tenant profiles gross rentals Weighted average duration remaining of 4.6 years Type A Type B Type C

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€ million

Debt repayment profile

69 24 65 10 116 20 40 60 80 100 120 2014 2015 2016 2017 2018 and beyond

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  • S&P raised country rating to BBB-; Romania achieved investment grade rating

from all three major rating agencies

  • Continued fiscal adjustment further reduces government deficit
  • Decreasing interest rates
  • Further improvement in law enforcement

Romania – macroeconomic

Key indicators 2013 2014 2015 2016 2017 2018 Real GDP growth (%) 3.5 3.1 3.8 4.6 4.7 4.5 General gov. budget balance (% of GDP) (2.3) (2.3) (2.1) (2.0) (2.0) (2.0) General gov. debt (% of GDP) 38.4 37.4 37.2 36.5 36.0 35.4 Unemployment (%) 7.3 5.1 4.6 4.2 3.8 3.5 Price inflation (%) (EU harmonised) 3.2 2.0 3.3 3.2 2.9 2.7

Source: Eurostat, Economist Intelligence Unit

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  • Improving macro-economic environment

Slovakia – macroeconomic

Key indicators 2013 2014 2015 2016 2017 2018 Real GDP growth (%) 0.9 2.4 3.1 3.6 3.9 4.0 General gov. budget balance (% of GDP) (2.8) (2.9) (3.0) (2.9) (2.8) (2.7) General gov. debt (% of GDP) 55.4 56.8 57.1 56.8 54.9 54.9 Unemployment (%) 14.2 13.8 13.6 13.3 12.9 12.5 Price inflation (%) (EU harmonised) 1.5 0.4 1.3 1.4 1.6 1.9

Source: Eurostat, Economist Intelligence Unit 14

Macroeconomics

2 000 4 000 6 000 8 000 10 000 12 000 14 000 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Slovakia - GDP per capita (€) Romania - GDP per capita (€) Romania - average annual gross wages (€) Slovakia - average annual gross wages (€) Romania - number of employees ('000) Slovakia - number of employees ('000)

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Private consumption growth (2002 base)

  • 20%

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Romania Baltics aggregate Bulgaria Albania Serbia Slovakia Czech Republic Poland Croatia Slovenia Hungary EU 15 aggregate

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Private consumption per inhabitant as % of EU15

0% 10% 20% 30% 40% 50% 60% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Romania Baltics aggregate Bulgaria Albania Serbia Slovakia Czech Republic Poland Croatia Slovenia Hungary

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Increasing market share - modern grocery trade

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 2000 2002 2004 2006 2008 2010 H1'12 H1'13

37% 41% 49% 60% 62% 63% 72% 76% 80% 63% 59% 51% 40% 38% 37% 28% 24% 20%

0% 20% 40% 60% 80% 100%

Serbia Bulgaria Romania Hungary Croatia Poland Slovakia Czech Republic Austria

Modern grocery trade vs Traditional grocery trade in CEE (2012) Traditional grocery trade in Romania Modern grocery trade in Romania

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Investment and development activities

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Developments completed during 2014

  • Vaslui Strip Mall (May 2014)
  • The Office Cluj-Napoca - Phase I

(July 2014 - final sign-off by authorities pending)

Land acquisitions during 2014

  • Shopping City Timisoara (April 2014)
  • Piatra Neamt (July 2014)

Completed acquisitions and developments

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Kaufland value extension (Vaslui, Romania)

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Kaufland value extension (Vaslui, Romania)

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Kaufland value extension (Vaslui, Romania)

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The Office (Cluj, Romania)

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The Office Phase I (Cluj)

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The Office Phase I (Cluj)

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The Office Phase I (Cluj)

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The Office Phase I (Cluj)

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Acquisitions, developments and extensions pipeline

Committed: projects currently under construction Controlled: projects where the land is controlled, but not yet under construction Capitalised interest is not included

  • 38

437 100 200 300 400 500 600 Jun-14 Controlled Further opportunities

Acquisitions pipeline (€m)

91 154 60 127 105 122 169 170 (46) (14) 96

  • 100

100 200 300 400 500 600 Dec-12 Dec-13 Jun-14 Money spent Committed Controlled Finalised Further opportunities

Developments and extensions pipeline (€m)

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Property name Location Type Target

  • pening

date Ownership Weighted GLA on completion Weighted yield

  • n cost

Weighted cost to date (Jun 14) Weighted total cost % m2 % €m €m Developments under construction 120,169 10.4 118.4 227.4 1 The Office (Phase I) Romania Office 2014 Q3 50 10,679 14.7 10.8 12.3 2 Vulcan Value Centre Romania Value centre 2014 Q3 100 25,200 8.7 33.3 45.2 3 Shopping City Targu Jiu Romania Mall 2014 Q4 100 26,800 9.8 15.8 30.6 4 Mega Mall Romania Mall 2015 Q2 70 49,490 10.0 45.1* 110.2* 5 Victoriei Office Romania Office 2015 100 8,000 8.4 13.4 29.1 Subject to permitting and pre-leasing 136,862 35.9 202.2 6 City Park Romania Extension 2015 100 21,000

  • 35.4

7 Shopping City Deva Romania Extension 2015 100 10,000 1.2 15.0 8 Severin Mall Romania Extension 2015 100 10,000

  • 9.5

9 Shopping City Timisoara (Phase I) Romania Mall 2015 Q4 100 50,000 19.8 73.4 10 Piatra Neamt Romania Mall 2015 Q4 100 29,362 1.0 33.6 11 The Office (Phases II and III) Romania Office 2015/16 50 16,500 2.0 23.5 12 Land held for extensions Romania 100 11.8 11.8 Further opportunities

  • 96.2

TOTAL DEVELOPMENTS 257,031 154.3 525.8

Schedule of developments

Note: Expected capitalised interest not included, except for weighted yield on cost figures * Mega Mall is presented at 100% in the IFRS condensed consolidated results

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Committed and controlled pipeline

Targu Jiu Bucharest Drobeta-Turnu Severin Deva Cluj-Napoca Timisoara Piatra Neamt Constanta

Developments Extensions Acquisitions

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Mega Mall (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Vulcan (Bucharest, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Targu-Jiu Shopping City (Targu-Jiu, Romania)

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Timisoara Retail Development

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Timisoara Retail Development

  • 303,000 residents
  • 3rd largest city in Romania;

Timis County 650,000 inhabitants

Catchment Population 15 minutes 439 500 30 minutes 476 500 45 minutes 570 500

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Timisoara, Romania

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Timisoara, Romania

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Timisoara, Romania

Ground level

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Timisoara, Romania

Upper level

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Timisoara, Romania

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Timisoara, Romania

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Piatra Neamt Retail Development

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Piatra Neamt Retail Development

  • 85,000 residents

Neamt County 570,000 inhabitants

Catchment Population 15 minutes 130 000 30 minutes 205 000 45 minutes 245 000

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Piatra Neamt Retail Development

Upper level Ground level

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Piatra Neamt Retail Development

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Piatra Neamt Retail Development

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Victoriei Office (Bucharest, Romania)

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Prospects

  • Earnings guidance
  • Further retail acquisitions and developments
  • Continued increase in scale

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Questions & Answers