Echo Polska Properties SBG Investor Conference Cape Town Hadley - - PowerPoint PPT Presentation
Echo Polska Properties SBG Investor Conference Cape Town Hadley Dean CEO 5th December 2016 www.echo-pp.com Contents Introduction, Overview & Long Term Goals Growth and Prospects Why Poland? Polish Macro Economic Indicators
www.echo-pp.com
SBG Investor Conference Cape Town Hadley Dean CEO 5th December 2016
SBG Conference, Dec. 5 2016
EPP 2017 STRATEGIC PLAN
3
AT-A-GLANCE
SQUARE METERS GLA
PROPERTIES
MARKET CAPITALIZATION
TOTAL GAV
YIELD
CITIES IN POLAND
PROJECTS UNDER MANAGEMENT
EMPLOYEES IN POLAND
WROCŁAW KIELCE SZCZECIN KALISZ WARSZAWA KATOWICE GDAŃSK ŁÓDŻ
SBG Conference, Dec. 5 2016
SBG Conference, Dec. 5 2016
Acquisitions through STRATEGIC RELATIONSHIPS and EXPERIENCED MANAGEMENT TEAM Combination of: ORGANIC GROWTH ACQUISITIVE GROWTH ORGANIC GROWTH from retail extensions, filling up of vacancies and ACTIVE ASSET MANAGEMENT Focus on acquiring retail assets in STRATEGIC LOCATIONS Targeting sustainable DOUBLE DIGIT ANNUAL GROWTH IN DPS LEVERAGE PORTFOLIO and platform with retail tenants Pursue STRATEGIC DEVELOPMENT OPPORTUNITIES (development profits will be reinvested) PRO-ACTIVELY TRADE ASSETS to ensure balanced portfolio (maintain WAULT of >4 years) Acquire further HIGH QUALITY, WELL LOCATED OFFICE ASSETS with STRONG TENANTS
SBG Conference, Dec. 5 2016
3,4 2,3 4,4 2,3 3 3,1 3,1 2,6 3,4 2,6 2,7 3,3 3,5 2,8 3,2 2,4 3 3,5
1 2 3 4 5 Poland Hungary Romania Czech Republic Slovakia Bulgaria 2016E 2017E 2018E
POLISH MACROECONOMICS
2014 2015 2016e 2017e Private consumption (%, YoY) 2,6 3,0 4,1 4,0 GDP growth (%, YoY) 3,3 3,5 2,5 2,6 Inflation (%) 0,1
2,0 Unemployment (%) 9,0 9,8 6,2 5,5
Source: Central Statistical Office, National Bank of Poland, Oxford Economics, Eurostat
FORECAST GROWTH IN GDP PER CAPITA FOR A SELECTION OF EU COUNTRIES
Source: EIU 10.9 11.2 8.8 15.8 14.7 6.3 Nominal GDP per capita (€ ‚000, 16E) GDP GROWTH (%)
SBG Conference, Dec. 5 2016
most attractive markets for professional services
rents lower than most of EU)
Germany, Poland’s biggest trading partner, ~ 27.1% of all Polish exports & 22.9% of all imports (2015)
process outsourcing (BPO), shares services centres (SSC)
continue due to FDI and new investment
the UK consider transferring part/all operations
reflected in the real estate market
convergence with developed Europe will provide an
SBG Conference, Dec. 5 2016
fastest growing economies in Europe.
GDP and 45% growth in exports.
44% of the region’s nominal GDP.
during the GFC.
increases in average household income has spurred robust growth in private consumption which is expected to reach 4.1% in 2016.
5th in Europe (ahead of Britain and the US)
EUR105.8 billion allocated 2014 through 2020
increasing consumer spending driven by consistent growth in employment and stable inflation levels
SBG Conference, Dec. 5 2016
Source: Knight Frank on the basis of RCA 100 200 300 400 500 600 700 800 900 1000 Poland Czech Republic Baltic Region Turkey Russia Others H1 2015 H1 2016
CEE – RETAIL INVESTMENT VOLUME (H1 2015 VS. H1 2016
MILLIONS (€)
CEE – RETAIL INVESTMENT VOLUME H1 2016
Poland 50% Czech Republic 17% Baltic Region 5% Russia 1% Turkey 2% Others 25%
SBG Conference, Dec. 5 2016
CITY PROPERTIES WARSAW Park Rozwoju Stage I and II (Office) Warsaw retail development (Retail) WROCLAW Pasaz Grunwaldzki (Retail) West Gate (Office) Sagittarius (Office) Nobilis Business House (Office) KATOWICE A4 Business Park Stage I and II (Office) A4 Business Park Stage III (Office) Libero (Retail) KRAKÓW O3 Business Park I (Office) O3 Business Park II (Office) O3 Business Park III (Office) KIELCE Galeria Echo (Retail) Astra Park (Office)
CITY PROPERTIES SZCZECIN Galaxy (Retail) Outlet Park (Retail) Oxygen (Office) POZNAN Malta Office Park (Office) KALISZ Galeria Amber (Retail) GDANSK Tryton Business House (Office) LODZ Symetris Business Park I (Office) Symetris Business Park Phase II (Office) BELCHATOW Galeria Olimpia (Retail) Centrum Echo Belchatow (Retail) JELENIA GORA Galeria Sudecka (Retail) PRZEMYSL Centrum Echo Przemysl (Retail) LOMZA Galeria Veneda (Retail)
Retail Office
SBG Conference, Dec. 5 2016
486 projects (H12016)
(constituted 25% of new supply)
major Polish cities (H12016); Warsaw – 1.6%
market saturation is 640 sqm/1000 inhabitants which makes Warsaw still underserved bar with biggest spending power
total investment deals
international brands debuted in Poland (2015)
(year-on-year)
SBG Conference, Dec. 5 2016
TENANT PROFILE By GLA (%) By rental income (%) A 70% 65% B 25% 29% C 4% 6% A. Large international and national tenants, large listed tenants and government
B. Smaller international and national tenants, smaller listed tenants, major franchisees and medium to large professional firms. C. Smaller national tenants. RETAIL LEASE EXPIRY PROFILE By GLA (%) By rental income (%) Vacant 1,7% 0,0% 2016 3,7% 6,1% 2017 6,9% 7,9% 2018 5,0% 7,9% 2019 5,8% 7,0% 2020 10,5% 11,0% 2021 & after 2021 66,3% 60,1% Total 100,0% 100,0%
density catchment areas - ranging from 142,000 – 730,000 people within a 30 minute drive
international brands representing c. 61%
SBG Conference, Dec. 5 2016
Extensions
expected to 40% of the total new supply in 2017 compared to 24% in H1 2016
Technology
merging brick and mortar and e-tailing retail closer together; embracing digital tech with convenience feature such as apps, click & collect and free WiFi equaling increased dwelling time
Leisure & Entertaiment
a shift away from building ‚retail only’ centres to creating leisure & entertaiment centres
Social hub of the community
notable increase in the number of mixed-use properties where they serve as an urban hub for the local communities.
SBG Conference, Dec. 5 2016
major cities) was estimated at 8.5 million m²
in Poland generating significant demand for office space.
50% a year
Wroclaw and Krakow
City becoming preferred destinations for business process outsourcing and shared service centres industry
m² of office space. Warsaw is the largest office market in Poland with 47% of 2015 new supply
SBG Conference, Dec. 5 2016
EPP will …
modern properties
chip companies
appropriate, recycle assets
located office assets, in major Polish cities and let to strong international and domestic tenants.
remains balanced and competitive in the long term while maintaining a weighted average unexpired lease term in excess of 4 years
SBG Conference, Dec. 5 2016
OFFICE TENANT PROFILE By GLA (%) By rental income (%) A 94 93 B 6 7 C 1 1 A. Large international and national tenants, large listed tenants and government
B. Smaller international and national tenants, smaller listed tenants, major franchisees and medium to large professional firms. C. Smaller national tenants. OFFICE LEASE EXPIRY PROFILE By GLA (%) By rental income (%) Vacant 9,7% 0,0% 2016 5,2% 6,5% 2017 6,5% 7,6% 2018 12,3% 14,5% 2019 7,6% 8,5% 2020 28,6% 31,1% 2021 & after 2021 30,1% 31,8% Total 100,0% 100,0%
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Tryton Business Park - Gdansk O3 Business Park I Krakow Symetris Business Park I Lodz A4 Business Park III Katowice
EPP acquired …
Business Park Phase III and Tryton from Echo Investment.
EPP’s participation in the development profit.
which will cover any remaining vacancies and rent free periods for 3 years post acquisition.
SBG Conference, Dec. 5 2016
SBG Conference, Dec. 5 2016
leader in Polish commercial and residential properties
in Poland with a total area of + 1 million m²
management team consists of 300+ professionals and has been the recipient of numerous awards
arrangements)
track record
almost a decade
$5.6 billion in AuM and has deployed capital extensively across Europe
in over 30 deals from 2010 to date and currently has around EUR 4 billion in AuM
SBG Conference, Dec. 5 2016 Poland South Africa Population 38 million 54 million GDP per Capita $14 522.9 $7 656.0 GDP % Change Y/Y (2016) 2.6% 1.26% GDP growth forecast 2.7% 0.1% Global GDP ranking (2015) 24 33 Debt/GDP ratio (2015) 53.18% 44.71% Reference rate/Repo rate 1.5% 7% CPI y/y
6.3% 10yr bond rate 2.93% 8.75% Unemployment rate (latest) 6.2% 26.6% CREDIT RATINGS S&P Long term: BBB+ Outlook negative Long term: BBB- Outlook: Negative Moody’s A2 Baa2: Outlook Negative Fitch Long term: A- Outlook: Stable Long Term: BBB- Outlook: Negative
Source: World Bank
2000 4000 6000 8000 10000 12000 14000 16000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Poland South Africa
Source: Reuters
Growth in GDP per capita ($)
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Property name Location Est date of completion Acquired Estimated acquisition date Symetris Lodz Phase I August 2016 a 1 Dec 2016 Symetris Lodz Phase II August 2017 * A4 Business Park Katowice Phase III Oct 2016 a 1 Dec 2016 O3 Business Campus Krakow Phase I Complete a 1 Dec 2016 O3 Business Campus Krakow Phase II May 2017 * O3 Business Campus Krakow Phase III October 2018 * Tryton Business House Gdansk Complete a 1 Dec 2016 Nobilis Wroclaw March 2017 * Sagittarius Wroclaw October 2017 * Libero (retail) Katowice March 2018 *
* Still subject to ROFO process
25% share of the ROFO assets.
and first right of offer to acquire ROFO assets.
is completed and at least 60% let.
size and enhance growth potential.
SBG Conference, Dec. 5 2016
LTV
AVERAGE REMAINING PERIOD
HEDGING POLICY1
AVERAGE COST OF DEBT
SBG Conference, Dec. 5 2016
Hadley Dean
CEO
Hadley has over 20 years’ of real estate experience, most recently as the CEO of Compass Offices in Europe, Middle East and
Management Board Member at Colliers International whilst running Eastern Europe as Managing Partner, where he was responsible for leading the business in 12 countries, 16 offices and 750 employees. Hadley has extensive experience in Poland, having spent 9 years in the Colliers office in Poland. Colliers International is an industry leading global real estate services company operating in 66 countries. He graduated with BSc (University of Newcastle-upon-Tyne), Property valuation and management (Sheffield Hallam University).
Maciej Drozd
CFO
Maciej has been deputy CEO of Echo, one of the largest investment and development companies in Poland listed on the Warsaw Stock Exchange, in charge of the company’s finance. Maciej started his professional career in 1995 at Eastbridge Group, a Luxembourg private investment fund managing over €2.5 billion in assets related to retail, consumer goods and real estate, overseeing financial operations of selected subsidiaries within the group. He was promoted to CFO and managing partner of the group in 2009. He graduated from University of Warsaw with master’s degree in Philosophy and Management, and also from University of Illinois with MBA degree.
Wojciech Knawa
Board Member I Property Management
Wojciech is a graduate of the Cracow University
recently served as Managing Director at Echo Investment Property Management responsible for management of all retail and office assets developed by Echo Investment with particular emphasis on delivering high quality property management services, increasing portfolio profitability and conceptual development of modern management tools improving property management operations and tenants’ business effectiveness.
Michał Świerczyński
Board Member I Asset Management
Michał has nearly 20 years real estate experience in Poland, Germany and Russia. Most recently as Venture Partner and Head of Retail for Griffin Real Estate, managing over 84 000 sqm of retail assets. Previously part of JLL Russia as associate direct head of leasing and ECE Projektmanagement Poland as Head of Leasing and development. He graduated from London Open University in Warsaw in Business and Marketing, and continued at the Warsaw College of Communication and Media with B.A. degree, in Public Relations. In 2005 he attended the International Council of Shopping Centres School for professional development Level II in Dubai, UAE. Apart from his native Polish, he speaks fluent English and German, and basic Russian.
SBG Conference, Dec. 5 2016
by EPP’s strongly incentivised, dedicated and proven executive management team
experience in asset management covering all areas
includes other EU countries and the US
Echo and have long term relationships with portfolio tenants and experience with the assets
SBG Conference, Dec. 5 2016
Hadley Dean
CEO
Hadley has over 20 years’ of real estate experience, most recently as the CEO of Compass Offices in Europe, Middle East and
Management Board Member at Colliers International whilst running Eastern Europe as Managing Partner, where he was responsible for leading the business in 12 countries, 16 offices and 750 employees. Hadley has extensive experience in Poland, having spent 9 years in the Colliers office in Poland. Colliers International is an industry leading global real estate services company operating in 66 countries. He graduated with BSc (University of Newcastle-upon-Tyne), Property valuation and management (Sheffield Hallam University).
Maciej Drozd
CFO
Maciej has been deputy CEO of Echo, one of the largest investment and development companies in Poland listed on the Warsaw Stock Exchange, in charge of the company’s finance. Maciej started his professional career in 1995 at Eastbridge Group, a Luxembourg private investment fund managing over €2.5 billion in assets related to retail, consumer goods and real estate, overseeing financial operations of selected subsidiaries within the group. He was promoted to CFO and managing partner of the group in 2009. He graduated from University of Warsaw with master’s degree in Philosophy and Management, and also from University of Illinois with MBA degree.
Robert Weisz
Independent Non-executive chairman
Robert Weisz serves as Partner and Managing Director of Timevest, a European commercial property investment company. Its portfolio includes high street shopping and commercial retail locations in Germany, the Czech Republic, and the Netherlands. Previously, Mr. Weisz was Partner and Managing Director of DBN Group, a commercial property company operating in the Netherlands and the US. Mr. Weisz has been visiting professor at the Technical University of Eindhoven's Urban Planning Design Group since 2004 and was formerly a guest lecturer in property finance and valuation at the Amsterdam School of Real Estate and University of
textbooks on property investment.
Marek Belka
Independent non-executive director
Marek Belka is a former Prime Minister of Poland (2004-2005) and President of Narodowy Bank Polski (Polish Central Bank) (2010-2016). He qualified as an economist with an M.A., Ph.D. and Habilitacja (higher degree common in continental Europe). He has held various political positions since 1996, including Advisor to the President of Poland, Minister of Finance and Deputy Prime Minister. He has also held positions in international organizations, serving as Executive Secretary of the Economic Commission for Europe (in the rank of Undersecretary General of the U.N.) and Director of European Department in the International Monetary Fund (2008-2010). He was member of Board of Directors of two commercial banks in Poland (at different times) and served as Chairman of LOT Polish Airlines in 2002-2003.
SBG Conference, Dec. 5 2016
Marc Wainer ̶ Non-executive director
Marc Wainer
Non-executive director
Until August 2014, Marc was Chief Executive Officer of Redefine Properties Limited, thereafter moving to the Executive Chairman
aspects of real estate. Marc’s primary focus is
investments and investor relations, as well as playing a role on the conceptual development at Redefine.
Maciej Dyjas
Non-executive director
Maciej has been deputy CEO of Echo, one of the largest investment and development companies in Poland listed on the Warsaw Stock Exchange, in charge of the company’s
in 1995 at Eastbridge Group, a Luxembourg private investment fund managing over €2.5 billion in assets related to retail, consumer goods and real estate, overseeing financial
managing partner of the group in 2009. He graduated from University of Warsaw with master’s degree in Philosophy and Management, and also from University of Illinois with MBA degree.
Andrew Konig
Non-executive director
A qualified Chartered Accountant with 22 years of commercial and financial experience, Andrew was previously group Financial Director of Independent News and Media. He is responsible for the management of Redefine and for ensuring the Board’s strategy is implemented, as well as all aspects
and communications.
Nebil Senman
Non-executive director
Nebil Senman is a Co-Managing Partner of Griffin Real Estate, a leading and a dynamically growing investment group
market in Central & Eastern Europe. Prior to that, Nebil Senman held the position of Senior Vice President and as Supervisory Board Member of German and Polish real estate operations and companies worth several billion Euro for Oaktree’s real estate funds for 9 years. Before joining Oaktree he spent 8 years within the real estate advisory and corporate finance division at Ernst & Young Real Estate (previously Arthur Andersen), holding different managerial positions.
SBG Conference, Dec. 5 2016
Dionne Hirschowitz
Independent non-executive director
Dionne has a B Com LLB from Wits and thereafter was admitted as an Attorney of the Supreme Court of South Africa. She lived in London for 11 years where she worked at Stenham Property managing commercial property investments for offshore clients. On return to South Africa she was appointed as a director of Ellerine Bros. Proprietary Limited, which is involved in equities and property investments.
Peter Driessen
Independent non-executive director
Until 1 July 2016, Peter served as European Director Capital Markets with CB Richard Ellis in Amsterdam, where he was focused primarily on providing strategic and property specific investment advice to both Dutch and international investors across all property sectors. Previously, Peter served as Co-Founder and Managing Director of Colliers BDR / Insignia BDR, as a board member of BCD Holdings and as Director Real Estate Investments at Centraal Beheer Pensioenverzekeringen N.V. (Achmea Group). He currently serves as a member of the supervisory board of three international real estate investment funds of Syntrus Achmea Real Estate & Finance. Peter is a Dutch resident.
Andrea Steer
Independent non-executive director
Andrea is International Legal Counsel at Randstad Holding N.V., an HR services company with operations in 39 countries, headquartered in Amsterdam and listed on the Amsterdam Stock Exchange (AEX). She has previously held roles as legal consultant at the SBS Broadcasting Group (Amsterdam) and as an associate at Clifford Chance LLP (Amsterdam). Andrea is a Solicitor of England and Wales, an Attorney of the High Court of South Africa and is registered with the Dutch Law Society (Nederlandse Orde van Advocaten) as a foreign lawyer practising within the EU). Andrea is a Dutch resident.
SBG Conference, 5 Dec., 2016
CEO
Hadley Dean
hadley.dean@echo-pp.com +48 22 43 00 300 MARKETING DIRECTOR
Magda Cieliczko
magda.cieliczko@echo-pp.com +48 22 43 00 300 INVESTOR RELATIONS Singular Systems IR
Jacques de Bie/Michèle Mackey
jdebie@singular.co.za/michele@singular.co.za +27 10 003 0700 SPONSOR
Java Capital
sponsor@javacapital.co,za +27 11 722 7400