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EPP: powerful vehicle to exploit the Polish retail growth story - - PowerPoint PPT Presentation

EPP: powerful vehicle to exploit the Polish retail growth story Investor update NOVEMBER 2018 Disclaimer This document has been prepared and issued by and is the sole responsibility of the management of EPP N.V. (the Company or EPP)


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EPP: powerful vehicle to exploit the Polish retail growth story

Investor update

NOVEMBER 2018

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1

Disclaimer

This document has been prepared and issued by and is the sole responsibility of the management of EPP N.V. (the “Company” or “EPP”) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, to any other person. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the management beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The information on which these statements has been based has not been reviewed or reported by EPP’s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.

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Introduction to EPP

Section 1

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3

Executive management team

Introduction to EPP

1 Source: Company filings

  • >20 years of real

estate experience

  • Former CEO of Compass Offices’

EMEA operations

  • Former Managing Partner of

Eastern Europe at Colliers International

  • In 2017 received the EuroBuild

Real Estate Personality of the Year (2017) award

Hadley Dean CEO

  • >20 years of experience across

CEE

  • Member of a number of

Management and supervisory Boards

  • Former CFO in companies listed
  • n the Warsaw Stock Exchange

and those controlled by large private equity funds in CEE

  • Former Member of the

Management Board and CFO of Empik Media & Fashion

Jacek Baginski CFO

  • >20 years of real estate

experience across Poland, Russia and Germany

  • Former Venture Partner and the

Head of Retail at Griffin Real Estate

  • Former Associate Director at JLL

Russia

  • Former Head of Leasing and

Development at ECE Projektmanagement

Michal Swierczynski Head of Asset Management

  • 17 years of experience in

commercial real estate

  • Former Managing Director at

Echo Investment Property Management

  • Previously, worked in the hotel

and office sectors

Wojciech Knawa Head of Property Management

  • >15 years of real estate

experience

  • Former Chief Legal Officer at

Echo Investment

  • Former Member of the

Supervisory Board at Barlinek and Opoczno

Rafal Kwiatkowski COO

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4

Investment thesis

Introduction to EPP

1

Why Poland? Why retail? Why EPP?

One of the few economies that demonstrated resilience through the global financial crisis

Consistently high GDP growth, well above other Western European economies

Exposure to 38m population

“Safe haven” status due to economic and political stability and convergence towards EU living standards, well educated and large population base

Public debt and budget deficit as % of GDP expected to fall to 52% and 1.3% by Q4’18

Rapid increase in consumer spending, expected to continue

Lack of high-street proposition

Online emergence amplifying brick and mortar retail, while Allegro equivalent “Amazon” already present

  • “Click n collect” concept driving further in store purchases, cost of delivery remain high

and inconvenience of delivery driving consumers to pick up goods in stores.

Tenants increasingly expanding and new e-retailers launching e-stores

Largest Polish retail real estate player

High quality dominant shopping centres in strategic locations

Predictable cash flows, further supported by consistently high occupancy, long leases and secured pipeline of assets

Breadth of expertise within EPP allowing it to win tenants vs. market (EPP university, Dash boards etc.)

Strong growth profile (organic and inorganic) backed by in house platform

➢ Polish GDP growth CAGR 18-20 of 3.2% vs 1.7% in Western Europe3 ➢ Recently upgraded by FTSE RUSSELL to developed market ➢ Consumer spending growth CAGR 18-20:

5.7%

➢ Offline sales growth of

4.2% in the next 3 years

➢ Retail occupancy: 99.4%1

➢ 9%4 div. yield

➢ LFL NRI growth: 4.1%1

➢ EUR333m acquisition

pipeline & c.EUR1.1bn development pipeline2

Source: Company filings, Oxford Economics

1 As of 1H 18 report; 2 Represents estimated value at completion; 3 Western Europe (EU15)—Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK; 4 Div. yield calculated as mid-point of management

guidance DPS 18E of 11.70 cents / Share price of EUR1.31 as of November 7, 2018

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5

EPP at a glance

Introduction to EPP

1

Overview

Source: Company filings

1 1H18 Total portfolio value, excluding value of developments, EUR2.4bn including them; 2 Div. yield calculated as mid-point of management guidance DPS 18E of 11.70 cents / Share price of EUR1.31 as of November 7, 2018; 3 Marcelin shopping centre acquired post year end,

EUR1,763 ex. Marcelin; 4 Total estimated value on completion – Mlociny EUR412 and Towarow 22 EUR680m

Geographical footprint

EPP sites

Pure play Poland

1

Focus on dominant retail assets

1

Largest retail landlord in Poland

1

Anchor shareholder: Redefine properties

1

GAV: EUR2.1bn1 Dividend yield: 9%2 Retail Occupancy:

99.4%

Employees: >150

Dominant Polish shopping centre portfolio focus

EUR1.9bn3

Standing retail (19 assets)

EUR1.1bn4

Retail development

Mlociny – Q2 19 Towarowa 22 – 2024/5

EUR308m

Office (6 assets)

Szeczecin Poznan Inowroclaw Wroclaw Jelenia Gora Klodzko Zabrze Czeladz Krakow Przemysl Zamosc Lomza Wloclawek Kalisz Lodz Belchatow Kielce Warsaw

(JSE listed with €3.2bn market cap)

PP Tychy

EUR333m

M1 Tranches 2 & 3 (8 assets)

PP Olsztyn M1 Radom M1 Bytom PP Opole M1 Czestochowa

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EPP’s strategy

Introduction to EPP

1

  • Leading Polish retail landlord focused on income generation
  • Dominant, defensible and sustainable portfolio located in key

locations

  • Consolidation of key retail assets in strategic locations

Create an income-generating retail champion in Poland

1

Maintain efficient operations through expertise

4

  • Experienced asset and property management teams and

excellent staff retention

  • Direct cooperation between asset management team and the

client base to optimise tenant mix Utilise strategic relationships

3

  • Leverages relationships with tenants by exploiting economies of

scale

  • Strong relationships in the international capital markets.

Develop even larger scale with prudent leverage

2

  • Growth driven by acquisitions of hand-picked retail assets,

extensions and two developments in prime locations in Warsaw

  • Steady deleveraging towards the mid-term LTV target of 45%
  • Cautious liquidity management

Source: Company filings

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Journey since listing

Introduction to EPP

1

Consistent growth demonstrated since IPO

Source: EPP

1 30% owned by Echo Investment S.A. until development phase completion 2 Tryton Business House GLA increased from 23,537 sqm in Q4 2016 to 23,875 sqm in Q3 2017

Acquisitions Disposals Retail Development of Towarowa 221 Date: Dec-16 Zoning: 2019 Start of construction: 2021/2022 Completion: 2024/2025 Location: Warsaw GLA: 105,000 (additional potential 45,000) Sale of West Gate Date: Dec-17 Location: Wroclaw GLA: 16,646 Office Sale of Tryton Business House Date: Dec-17 Location: Gdansk GLA: 23,8752 Office Acquisition of Zakopianka Date: May-17 Location: Krakow GLA: 26,142 Retail +252k sqm

  • f M1

retail space3 Sale of A4 Business Park (I, II, III) Date: Dec-17 Location: Katowice GLA: 30,556 Office Jan 2017 2018 Apr Aug Sep May Jan Jun Feb Jul Mar Oct Nov Dec Nov Dec Oct

3 Tranche II and III of M1 portfolio 4 Excluding developments, EUR2.4bn including them

Apr Aug Sep May Jun Feb Jul Mar Acquisition of King’s Cross Marcelin Date: July-18 Location: Poznan GLA: 45,353 Retail Capital raise Apr -17 Equity raise of EUR150mm in an ABB through private placement of new shares. Equity raise Capital raise Jul - 2018 Raised equity

  • f EUR45mm
  • n JSE with

Redefine Jan - 2018 Raised equity

  • f EUR113mm

Capital raise Aug/Sep Listed on Luxembourg Stock Exchange (Aug-16) and private placement listing on JSE (Sep 16) Listing Retail Acquisition of 4 assets under tranche 1 of M1 portfolio Purchase price: EUR359mm GLA: 194,400 Rest of the portfolio (8 properties representing 252,000 sqm) to be acquired in 2019/2020

1.2 1.4 1.4 1.6 1.7 1.7 2.0 2.14 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18

Acquisition of Galeria Mlociny1 Date: Jun-17 Location: Warsaw GLA: 82,122 Retail Acquisition of Galeria Solna Date: Jul-17 Loc.: Inowroclaw GLA: 23,359 Retail Acquisition of Blackstone portfolio Date: Jun-17 Wzorcownia Location: Wloclawek GLA: 25,423 Twierdza Klodzko Location: Klodzko GLA: 23,039 Twierdza Zamosc Location: Zamosc GLA: 23,806 Retail

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8 1,210 1,623 2,067

IPO- Aug 2016 1H 2017 1H 2018

EPP at a glance

1

Portfolio growth and strategy executed

EPP performance update (1H’18)

Total portfolio value (EUR’m)

303,338 402,637 638,815

IPO- Aug 2016 1H 2017 1H 2018

Retail portfolio GLA (m2)

1.04 1.23 1.37

IPO- Aug 2016 1H 2017 1H 2018

Net asset value per share (EUR)

56.4% 50.6% 50.9%

IPO- Aug 2016 1H 2017 1H 2018

LTV (%)

9 13 18

IPO- Aug 2016 1H 2017 1H 2018

Number of shopping centres

76% 74% 85%

IPO- Aug 2016 1H 2017 1H 2018

Share in retail portfolio (%)

Source: Company filings

Introduction to EPP

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Key investment highlights

Section 2

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10

Key investment highlights

2

Key investment highlights

Poland: growth engine of Europe 3 Predictable cash flows Platform for

  • rganic growth

National retail champion 2 Active balance sheet management 6 1 4 Secured pipeline 5

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Population

Population and nominal GDP breakdown GDP growth and Debt/GDP in Poland vs. WE

Real GDP CAGR (%) Nominal GDP across CEE (%)

42 17 17 11 8 5 Bulgaria Poland Romania Czech Republic Slovakia Hungary Total CEE1 nominal GDP: EUR1,114bn 10m 38m 11m 7m 20m 5m 3.8 3.2 2.1 1.7 2015-17 2018-20 Poland Western Europe +1.7pp +1.5pp

Poland: Growth engine of Europe

Source: Economist Intelligence Unit, European Commission, Oxford Economics, BMI

1 Western Europe — Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK

1

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Largest economy in CEE region outpacing Western Europe

FDI

Polish foreign direct investment stock (US$bn)

294.6 307.6 321.1 2018E 2019E 2020E 51% 54% 51% 86% 86% 83% 2015 2016 2017 Poland Western Europe

Debt / GDP

1

1

Only developed economy in the region

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12 240 238 265 307 321 343 2015A 2016A 2017A 2018F 2019F 2020F Poland Western Europe

Poland: growth engine of Europe

Unemployment rate and Real wages growth evolution Consumer spending evolution

Source: EIU, Oxford Economics, OECD, Euromonitor, IMF

1 Western Europe includes Belgium, France, UK, Ireland, Luxembourg 2 Western Europe (EU15)—Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK 3 USDEUR Fx rate of 0.86255

0% 1% 2% 3% 4% 5% 6% 0% 2% 4% 6% 8% 10% 12% 14% 16% Real wages growth (%) Unemployment rate (%) Western Europe Poland Western Europe2 Poland2

2

Consumer spending (EURbn)

1

Key investment highlights

2

5.7% 3.0% Why Poland? Why retail? Why EPP?

Unemployment rate (%) Real wages growth (%)

4% 3% 5%

CAGR 2018–20 (%)

Improving labour market and consumer sentiment

5%

1

2012 2022 2014 2016 2018 2020

2

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13

0.5% 1.5% 2.5% 3.5% 4.5% 5.5% 6.5% 2012 2013 2014 2015 2016 2017 H1 2018 Warsaw prime shopping centre 10Y Polish bond (EUR)

Poland: growth engine of Europe

Source: Company fillings, Savills, Bloomberg

Poland shopping centre supply and commercial investment volumes Structure of investment volumes

0% 20% 40% 60% 80% 100% 1,000 2,000 3,000 4,000 5,000 2012 2013 2014 2015 2016 2017 Other Polish market share (EURm) Warsaw Other Polish markets Other Polish market share

1

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Poland retail real estate yield vs. broader yields

Spread between retail yields and 10 year EUR bond yields (%)

5.0%

Increasing investment and reducing supply driving cap rate compression

EPP yield : 6.4%

New supply of shopping centre stock (000s sqm)

475 607 425 612 443 399 459 253 250 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 1.2%

Current spread: 3.8%

Average: 436,000 sqm

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Poland: growth engine of Europe

European retail density landscape Retail sales Poland vs. Europe

Source: Savills

1 Western European countries include: Austria, Belgium. Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and UK

Existing shopping center stock (GLA in sqm per 1,000 inhabitants)

1

Key investment highlights

2

Retail sales growth and CAGR (2018-2027) Key CEE economies Key WE economies

EPP assets

Why Poland? Why retail? Why EPP?

Favourable underlying retail dynamics

250 500 750 1,000 1,250 US Finland Sweden Netherlands Ireland Portugal France Poland UK Spain Italy Slovakia Czech Rep. Germany Turkey Greece

WE1 Average: 260sqm per 1,000 inhabitants

Podlaskie (3.1%/2.9%) Lubelskie (3.1%/2.9%) Podkarpackie (2.9%/3.0%) Opolskie (2.8%/ 2.8%) Slaskie (2.8% /2.8%) Malopolskie 3.5%/3.2%) Swietokrzyskie (2.4%/2.8%) Mazowieckie (3.9%/3.4%) Warminsko-Mazurskie (2.6%/2.7%) Lodzkie (3.2%/2.8%) Kujawsko-Pomorskie (2.2%/2.6%) Pomorskie (2.9%/2.9%) Zachodniopomorskie (2.3%/2.4%) Wielkopolskie (3.4%/3.5%) Dolnoslaskie (3.0%/3.4%) Lubuskie (2.3%/2.8%)

0.0% 0.9% 1.8% 2.7% 3.6% 4.5% 0% 9% 18% 27% 36% 45%

Poland Czech Rep. Romania Hungary France UK EU28 Germany Netherlands Italy Retail sales growth 2018-2027 CAGR 2018-2027

Poland CAGR 2018-27: 3.1%

Retail sales CAGR in Poland by city 2008-2017 / 2018-2027

Overall Poland retail sales statistics

  • Polish CAGR 2008-2017: 3.2%
  • Polish CAGR 2018-2027: 3.1%

Excludes high street retail, of which Poland has an insignificant amount representing <1%

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Poland: growth engine of Europe

Source: Company filings, Savills, Credit Suisse, Oxford Economics

1 Represents annualised 1H17 Revenue number; 2 Tradewatch

1

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Online retail amplifying brick and mortar sales

Online and offline retail sales (€ bn) Ecommerce share in total retail sales Majority of online sales are “click and collect”

Performing brick and mortar sector despite “Allegro”, major player with >50%2 of total Polish e-commerce market share

Customer prefers to “touch and feel”, driving footfall Lack of high street driving consumers to shopping centres Unique take-away’s

Traditional retail e-Commerce Omni-channel (Click n Collect)

6.2% 8.9% 10.9% 18.5% 6.6% 9.7% 11.4% 19.1% 7.1% 10.2% 11.6% 19.4% 2018 2019 2020

Online CAGR 18-20 Offline CAGR 18-20 10.1% 4.2% 7.8% 0.0% 4.7% 1.8% 5.4% 1.6%

Online sales in Poland remain a small proportion of

  • verall sales and this is expected to remain small

84% of total online and offline growth from 2018 – 2020 is in from bricks and mortar

105.9 112.4 118.9 123.4 127.0 6.1 6.7 7.4 8.2 9.0 2016 2017 2018E 2019E 2020E Offline retail sales Online retail sales

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National retail champion

2

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Source: Company filings

1 Includes tranche of M1 portfolio acquisition which closed in January 2018 2 Latest available data; 3 Taking 1997 as year 1; 4 28 assets as of 2020, which includes M1 portfolio

Leading Polish retail portfolio, with modern asset base

684 558 435 428 411 243 147 128 113

GLA of retail assets in Poland (000s sqm)2

  • No. of properties2

284 21 6 11 6 2

Additional GLA following the acquistion of M1 tranche II, III, and completion of Galeria Mlociny and Towarowa 22

12 9 7

Year of completion split by GLA (000s sqm)

European retail real estate landscape Modern and well-invested buildings

1,118

34 39 28 24 23 25 48 57 72 50 69 91 26 54 2014 2013 2012 2011 2010 2009 2007 2003 2002 2001 2000 1999 1998 1997 Undergone refurbishment / extension since M1 tranche 1 assets Refurbishment usually carried

  • ut within 9-10 years from

completion >50% of stock under 10 years old 52 Represents only 1 property each, both recently acquired

1

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17 Urban shopping centres Regional shopping centres

Source: Company filings

EPP retail assets Large urban shopping centres

  • EPP's largest assets with a GLA of >45,000 sqm
  • Located in Poland's largest and most affluent cities; very close

to the city centres

  • Strong fashion offering complemented by food, entertainment

and F&B. EPP in the process of improving and increasing the F&B and leisure component of all its assets. Dominant regional shopping centres

  • EPP's smaller format with a GLA of <45,000 sqm
  • Located in strong regional cities
  • Critical mass enhanced by entertainment and F&B extension

will further enhance this

  • Very limited competition, usually limited to much smaller

formats (e.g. hypermarkets or smaller retail parks)

Lomza Kielce Przemysl Wroclaw Jelenia Gora Szczecin Belchatow Wloclawek Krakow Klodzko Zamosc Inowroclaw Warsaw Lodz Kalisz Czeladz Zabrze

National retail champion

2

63%

x% of 1H 18 retail portfolio valuation

Key investment highlights

2

37% Why Poland? Why retail? Why EPP?

Dominant regional centres becoming “town squares” in regional locations

Retail developments

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GAV (EURm) 282 GLA (m2) 56,630 Key tenants GAV (EURm) 130 GLA (m2) 53,648 Key tenants GAV (EURm) 130 GLA (m2) 49,643 Key tenants

National retail champion

2

Source: Company filings Note: Catergory 1 shopping centres represent Large urban shopping centres

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Category 1 shopping centres represent 63% of retail GAV

Galaxy

SZCZECIN WROCŁAW

Pasaz Grunwaldzki

GAV (EURm) 257 GLA (m2) 48,352 Key tenants

Galeria Echo

KIELCE GAV (EURm) 225 GLA (m2) 71,830 Key tenants

M1 – Zabrze

ZABRZE

M1 – Kraków M1 – Czeladź

CZELADZ KRAKOW GAV (EURm) 82 GLA (m2) 52,775 Key tenants

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19

Comparison of 10 year bond yields of Poland vs other EU economies

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Dec-08 Sep-09 Jun-10 Mar-11 Dec-11 Sep-12 Jun-13 Mar-14 Dec-14 Sep-15 Jun-16 Mar-17 Dec-17 Polish EUR 10 year bond 10Y German bond 10Y French bond 10Y Italian bond 10Y Spanish bond

1.2% 0.4% 0.8% 1.6% 2.0%

2

National retail champion

Key investment highlights

2

EPP has a high yielding portfolio compared to peers, on a risk adjusted basis

Source: Company filings, Savills

Why Poland? Why retail? Why EPP?

Reported EPRA Net Initial Yield

x.x% Weighted average country risk premium x.x% Portfolio yield adjusted for country risk premium

6.4% 4.1% 4.8% 6.7% 5.4% 4.9% 5.2% 4.8% 6.8% 4.7% 5.1% 7.1%

1.2% 1.3% 1.0% 1.2% 0.8% 1.5% 1.1% 1.5% 0.6% 0.6% 2.0% 0.7% 5.2% 2.8% 4.4% 3.6% 3.9% 5.6% 3.7% 5.2% 4.2% 4.5% 4.8% 4.5%

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3

Tenant mix Stability from Top strong 10 retail tenants5 Sectoral breakdown of income Occupancy cost ratio on average (as reported)

Source: Company filings, Orbis

1 Other includes Health and Beauty, Household appliances, Specialty Goods, Electronics and Services; 2 Latest available; 3 OCR defined as : (rental charges + service charges including marketing costs for tenants, all including VAT) / (tenants’ sales,

including VAT); 4 The proportion of retailer’s sales compared with the total cost of occupation being: rent, business rates, service charge and insurance. Calculated excluding anchor stores # LPP market cap c. EUR 3.4bn CCC market cap c. EUR 1.9bn; 5 As at Dec 2017

International tenants Polish chain tenants Local tenants

No. Tenant name Description % share in total rental income Overall Sales growth y-o-y2 Poland Sales growth y-o-y2 1 Polish clothing company 8.1% 18.0% 15.8% 2 French supermarket 5.3% Private Private 3 Swedish clothing brand 2.3% 3.0% 13.0% 4 One of largest footwear retailer 2.2% 18.3% n.m. 5 2nd largest Polish multiplex chain 2.0% 20.9% 20.9% 6 Spanish multinational clothing co. 1.9% 8.7% n.m. 7 British multinational supermarket 1.9% 2.8% 6.3% 8 Germany's 2nd largest chemist 1.9% 7.1% n.a. 9 All for kids store 1.6% 14.2% n.a. 10 Consumer electronics 1.5% Private Private Leading CEE retailers

Predictable cash flows

Key investment highlights

2

Fashion & Accessories 49% Food / Supermarkets 14% Entertainment 13% Food Court, Restaurants & Cafe 3% Other1 20% 16%

51% 44% 5%

15.1% 15.2% 3 12.2% 8.5% 11.6% 14.3%

Average: 12.4%

4

Why Poland? Why retail? Why EPP?

Diversified tenant base geared towards growth

“Once gastronomy and leisure units occupied approx. 5-7% of shopping space, now this ratio has increased to approximately to 10-15% with a few examples exceeding 20%. This ratio is expected to grow even further in the future”

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21

3

Predictable cash flows

7.9 9.2 12.5 17.2 15.7 9.3 6.0 5.3 1.9 9.1 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026

Source: Company filings

1 By total GLA; 2 As of FY 2017; 3 Based on weighted average lease term

98.4 98.7 98.4 98.3 98.6 99.7 99.4 95.8 97.0 97.2 97.3 96.0 93.7 94.0 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18

Occupancy rate Security of income stream

Occupancy1 (%)

Tax ✓ Insurance ✓ Maintenance ✓ Triple net lease ✓✓✓

1

Expenses covered by tenants EUR contracts with tenants are matched with predominantly EUR-denominated debt payments

2

Interest Rent ✓✓✓ EUR EUR

Primarily CPI-indexed contracts (almost 100%)

3

  • 1.8pp

Office Retail

+1.0pp

By rental income (EURm)2

Lease expiry profile

Retail: 5.4 years1,3 Office: 4.2 years1,3

WAULT Key investment highlights

2

Why Poland? Why retail? Why EPP?

Secured income stream

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22

4

Platform for organic growth

Source: Company filings, Company information, Trading economics

1 Impacted from departure of larger tenants in Belgium, free-parking initiatives and banks restructuring

  • Economies of scale with most tenants
  • perating in the Polish market
  • Fully integrated in-house and local asset

management platform

  • Uniquely live dashboard
  • EPP university
  • CPI-indexing which is part of almost all lease

contracts – average 2018-2020 inflation rate of 2.3% Last reported LFL NRI growth (%) Actively improve tenant mix CPI indexing A

  • Supportive macro market backdrop resulting

in overall GDP growth and resulting rise in disposable income, with consumer spending growing at a CAGR of 5.7% from 2018-20

  • Emerging middle class with higher purchasing

power Market backdrop B C Key investment highlights

2

Drivers of organic growth

Why Poland? Why retail? Why EPP?

4.3% 4.1% 4.1% 3.8% 3.2% 3.0% 2.9% 1.5% 1.4% 1.1% (0.6%)

Rental growth supported by macro factors and asset management

1

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23

Help tenants improve performance, leading to rental growth 1 Attracting smaller tenants with rents higher than larger tenants 2 Identify potential problems early and prevent long-term voids 3

Source: Company filings

4

Key investment highlights

2

Key focus areas of EPP University EPP University overview

xx Growth

Platform for organic growth

Why Poland? Why retail? Why EPP?

Goal to support tenants in daily operations Team of highly trained professionals Provides professional training to tenant’s staff on most important performance factors Units work shop with tenant staff

EPP University: a dedicated team to support tenants, with >2,500 retail staff trained

>2,500 retail staff trained

Tenants’ KPIs before and after EPP University training

24.8% 16.9% Before After

Sales density (EUR/sqm/p.a.) OCR RTS

805 2,014 Before After 3,887 5,925 Before After 27.2% 10.9% Before After 20.1% 12.9% Before After

150.2% 52.4%

  • 16.3pp
  • 7.2pp
  • 23.3pp
  • 7.9pp

42.2% 18.9% Before After

Specialist store Jewellery store

Key individual has >18 years of tailored experience

slide-25
SLIDE 25

24

Secured pipeline

Source: Company filings

5

Key investment highlights

2

Why Poland? Why retail? Why EPP?

GLA extensions

✓Apart contracted M1 tranches II and III (252,000

sqm), EPP acquired King Cross Marcelin (45,000 sqm) located in Poznan

✓Excellent access to additional opportunities to

further increase the scale of its portfolio in Poland

✓Actively engaged in recycling of assets (office and

retail)

External acquisitions

✓Extensions of 2 best-performing retail assets,

Galaxy and Outlet Park, both of which opened in H2 2017

  • Full NOI impact yet to be reflected

✓13 assets have been identified for potential future

extension and this represents additional GLA in of 160,000 sqm

External acquisitions

✓2 projects under development with a GLA of

187,000 sqm (Mlociny c.82,000 sqm, Towarowa 22 105,000 sqm) with an additional 45,000 sqm for mixed use (from Towarowa), both located in Warsaw

  • Attractively situated in Warsaw Galeria Mlociny

to open in April 2019

  • Further upside from Towarowa 22, the largest

urban retail project in Poland and one of the largest in Eastern Europe

  • Right of first offer to acquire retail and office

properties of Echo Investments

Developments A C B Kings Cross Marcelin Galeria Belchatow (Olimpia) Towarowa 22

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25

Secured pipeline: Acquisitions

A 5

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Additional value potential

  • Sites in large catchment areas, generally situated along the motorway at

major junctions (land base >200 ha)

Location

  • Strong tenant-mix including top brands: Auchan, OBI, MediaMarkt, TK

Maxx, H&M, C&A

Tenants

  • Food and DIY anchored with top international brands providing

the greatest retail offer and best prices

Bespoke shopping centres

  • 100,000 GLA identified

Extensions

Assets highlights

  • Utilise existing relationships with tenants to grow NOI
  • Increase the F&B and entertainment offerings
  • Right-size retail units
  • Boost the short-term leases income

Active asset management

Source: Company filings

M1 Transaction summary GAV: EUR692 million Sustainable NOI: EUR49 million 13 million people live within a 30-min drive 120 million annual footfall combined

Krakow 18.2% Czeladz 17.8% Poznan 12.9% Zabrze 10.9% Radom 8.4% Czestochowa 7.4% Kielce 5.1% Others 19.2%

GAV: EUR692mm GLA 446k sqm

M1 transaction rationale

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SLIDE 27

26

Secured pipeline: Developments

Key tenants

  • Development located in the North-West part of Warsaw, located

next to a rapidly growing residential area – Mlociny

  • 1.5 million people within 30 minutes drive
  • Opening planned for Q2 2019 with construction ahead of

schedule

  • Largest retail construction site in Poland; 87% of GLA already

leased

Planned total GLA 82,212 sqm

  • Est. cost of development2

EUR300m

  • Est. fully-let NOI

EUR22m

  • Est. yield on cost
  • c. 7.0%
  • Est. valuation yield on

completion

  • c. 5.35%
  • Est. value on completion

EUR 412m

B

Source: Company filings

1 70% owned by EPP, 30% by Echo Investment 2 Fair value reflects 54% of the value of the land plot

5

Key investment highlights

2

Why Poland? Why retail? Why EPP?

KPI’s Galeria Mlociny1 overview Asset snapshot Brief timeline

March 2019 Completion of Galeria Mlociny Q3 2016 Start of construction

  • f Galeria Mlociny

Q2 2019 Opening of Galeria Mlociny

Q3 2016 March 2019 Q2 2019

Warsaw

Mlociny: Flagship Warsaw development on track to open in Q2 2019

Strong purchasing power Affluent consumers Relatively less saturated RE market

1 1 1

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27

Secured pipeline: Developments

  • Last large retail development (6.5 hectares) in Warsaw and the last to be built near the

city-centre, next to the metro line

  • Undergoing zoning process scheduled for 2019
  • Planned start of construction 2021/2022
  • Strong interest from all main anchor tenants
  • Contained in the current zoning: 105,000 sqm GLA designated for Retail with an

additional potential identified 45,000 sqm GLA expected for offices, Residential for rent or sale, entertainment and cultural, student housing and hotel

B 5

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Planned total retail GLA 105,000 sqm

  • Est. cost of development1

EUR420m

  • Est. fully-let NOI

EUR34m

  • Est. yield on cost
  • c. 8%
  • Est. valuation yield on completion
  • c. 5%
  • Est. value of retail space

EUR680m

  • Est. value of additional space

EUR150m TOTAL EUR830m 2024/2025 Planned opening

  • f Towarowa 22

2019 Zoning process for Towarowa 22 2021/2022 Start of construction

  • f Towarowa 22

Source: Company filings

1 Land included;

KPI’s Towarowa1 overview Asset snapshot Brief timeline

Warsaw

Towarowa: First of its Kind shopping destination

Strong purchasing power Affluent consumers Relatively less saturated RE market

1 1 1

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28

Secured pipeline: GLA extensions

C

Source: Company filings

5

Key investment highlights

2

Why Poland? Why retail? Why EPP?

New tenants

GLA NOI GAV

+15,150 sqm 41,477 56,627 +EUR3.1m 12.6 16.4 +EUR53m 210 275

Case study: Galaxy extension (completed 15 November 2017) Case study: Outlet Park extension (completed September 2017)

GLA NOI GAV

+7,229 sqm 21,054 28,283 +EUR1.1m 4.3 5.8 +EUR17m 69 92 New tenants

Track record of successful extensions at attractive development yields of c.8.5%

IPO DEC -17

ATTRIBUTED TO EXTENSION

IPO DEC -17

ATTRIBUTED TO EXTENSION

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29

Key investment highlights

2

Why Poland? Why retail? Why EPP?

Secured pipeline: Contractual growth pipeline in retail

5

Retail properties Retail GLA (000) Retail NOI (€m) Tranche I + Marcelin July 20182 2017YE Tranche III June 2020 Tranche II + Mlociny3 June 2019 86 118 148 157 19 26 28

Pro-forma impact of the committed M1 portfolio acquisition1, Marcelin acquisition and Mlociny development completion

Retail 76% Office 24% GLA split 684 921 989 Retail portfolio value (€m) Retail 83% Office 17% Retail 87% Office 13% Retail 88% Office 12% 14 444 1,352 1,859 2,369 2,480

Source: EPP

1 Pro-forma as of FY 2017 values assuming full let NOI with no indexation, no retail / office acquisitions or disposals other than M1 portfolio, Marcelin acquisition, value dislosed to market, and Mlociny development completion 2) Assumes disclosed value or retail portfolio as at H1 2018 and Marcelin value 3) Mlociny assumes 70% stake

+5 +240 +507 +7 +237 +510 +2 +68 +111 Selected tenants + 160,000 sqm extensions identified

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30

Active balance sheet management

Source: Company filings, S&P, Moody’s

Financial management guidelines

6

Intention to distribute 100% of distributable earnings to the shareholders Medium term target LTV of 45% Robust approval system and periodic monitoring of costs versus the budget on a monthly (at properties and HQ level) and quarterly (overall for EPP) basis Require tenants to pay rentals in advance and present security of the liabilities resulting from lease agreements, bad debts ratio <1% Target to hedge 90% of interest rate exposure; currency of rental income matching the currency of EPP funding

Key investment highlights

2

Liquidity and working capital management Hedging Credit risk Operational costs Leverage Dividend policy Maintain a balance between continuity of funding and flexibility through the use of proceeds from disposal of assets, bank deposits and corporate loans, monitoring the available cash position on a daily basis 56.4% 55.4% 47.4% 50.9% 45.0% At IPO FY16 FY17 1H18 Medium-term target

Reported LTV (%)

11 195 672 425 2018 2019 2020 2021 2022 >2022

(EURm)

Debt levels Maturity dates

Average maturity: 4.3 years

  • 5.5 p.p since IPO

Why Poland? Why retail? Why EPP?

Consistently decreasing leverage since IPO

Average cost of debt: 2.38%

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31

Active balance sheet management

Source: Company filings

1 FV figure of the three announced properties to dispose as per 1H18

6

Disposals strategy Key investment highlights

2

Why Poland? Why retail? Why EPP?

  • Disposed of A4 Business Park, Tryton

Business House and West Gate for EUR160m in December 2017, at a yield c. low 7%

  • Properties disposed contributed

positively to the company’s NAV

  • In the process of sale of O3 Business

Park, Malta and Symetris Business Park

  • Starting the process of selling the non-

core retail assets

Tranche sold in October 2017 Tranche being currently for sale

A4 Business Park

Katowice GLA: 29,900 sqm

Tryton Business House

Gdansk GLA: 23,537 sqm

O3 Business Park (I, II, III)

Krakow GLA: 56,926 sqm

Malta Office Park

Poznan GLA: 28,270 sqm

Symetris (I & II)

Lodz GLA: 19,000 sqm

West Gate

Wroclaw GLA: 16,532 sqm

EPP has historically disposed assets at / above NAV

slide-33
SLIDE 33

Financial overview

Section 3

slide-34
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33

Key historical financial highlights

Financial overview

3 4

Historic development of key metrics

Increase in net operating income

  • Driven by acquisitions, property extensions completion and effective asset

and property management initiatives (LFL) Cost stabilisation

  • Cost stabilisation is expected in the future, despite a one-off charge in 2017

as the company completed the integration of its own asset management and property management team Distributable earnings

  • NOI increases and cost stabilisation has resulted in substantial distributable

earning growth of 126% for 2017

  • DPS guidance achieved despite the changes in the taxes in Poland

10.84 10.87 5.82 IPO guidance FY'17 H1'18

Distribution per share (EUR cents)

Source: EPP, FactSet as of November 7, 2018

1 LTM dividend on closing price of November 7, 2018 (ZAR 21.05)

67 103 66 FY'16 FY'17 H1'18

NOI (EURm)

54 87 59 FY'16 FY'17 H1'18

EBITDA (EURm)

34 77 48 FY'16 FY'17 H1'18

Distributable earnings (EURm)

Distribution per share

  • On track to achieve full year guidance of (EUR 11.6-11.8 cents),

representing growth of 7.6% on 2017.

  • EPP’s forward looking dividend yield would be 8.9%, based on the EUR

11.7 cents mid-point of management guidance

Dividend yield1 (%)

8.9% 8.8% 8.7% 7.7% 7.5% 6.8% 6.4% 6.3% 5.2%

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34

Evolution of key metrics over time

Financial overview

3 4

Balance sheet (EURm)

2016A 2017A 2018H1 Investment property 1,359 1,656 2,067 Investment in joint ventures 54 116 138 Financial assets 19 30 22 Other assets 33 28 22 Cash 44 123 70 Total assets 1,509 1,952 2,320 Equity 607 834 976 Borrowings 795 948 1,190 Deferred tax liability 59 94 110 Trade & other liabilities 48 76 44 Total equity and liabilities 1,509 1,952 2,320

Portfolio evolution

  • Significant increase in investment property and joint ventures due to

acquisitions of 5 retail properties in 2017

  • Tranche 1 of the M1 portfolio was acquired in the first half of 2018, tranche

2 and 3 are expected to be acquired in June 2019 and June 2020

  • NAV has increased by c.30% since listing from 1.04 to 1.37 euro cents per

share mainly due to positive asset revaluation driven by strong NOI growth Leverage management

  • The LTV ratio decreased from 52.7% in 2016 to 47.4% in 2017. The

reduction was driven by positive asset revaluation, partial utilisation of proceeds of asset sales and debt amortisation

  • The medium term target net LTV ratio is 45%

Source: Company filings

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35

Key takeaways Why Poland? Why retail? Why EPP?

➢ Polish GDP growth CAGR 18-20 of 3.2% vs 1.7% in Western Europe3

➢ Stable economy with a well capitalised financial system

➢ Developed market status ➢ Consumer spending growth CAGR 18-20: 5.7% ➢ Offline sales growth of 4.2% in the next 3 years

➢ Exposure to 38m population, a place for immediate scale for new retailers

➢ Largest Polish retail Platform with an existing and contracted pipeline of 1.1m sqm

➢ Retail occupancy: 99.4%1

➢ 9%4 div. yield

➢ Historical LFL NRI growth: 4.1%1

➢ EUR333m contracted acquisition pipeline & c.EUR1.1bn development pipeline2

Source: Company filings, Oxford Economics

1 As of 1H 18 report; 2 Represents estimated value at completion; 3 Western Europe (EU15)—Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK; 4 Div. yield calculated as mid-point of management

guidance DPS 18E of 11.70 cents / Share price of EUR1.31 as of November 7, 2018; 5 As of 2020 and including M1 portfolio

Financial overview

3 4

slide-37
SLIDE 37

Appendix

Section 4

slide-38
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37

Proven track record

Standing GLA (000s sqm) Number of investments Value of EPP's portfolio (EURm)1 Fully-let annual NOI (EURm)

Occupancy (%)2

96.0 97.5 98.1 98.0 98.0

937 940 972 975 1,203 1,271 1,347 359 268 268 387 392 420 422 309 1,205 1,208 1,359 1,367 1,623 1,693 2,0145 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 93 93 93 93 133 143 143 4 6 6 9 9 94 94 6 15 15 18 18 22 23 245 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

98.0 96.2

Disposal of A4 Business Park, West Gate and Tryton Business Park

58 58 59 59 76 80 86 25 22 22 31 31 33 33 24 80 80 90 90 109 113 1355 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 299 299 299 303 401 429 444 194 125 125 176 176 188 189 137 424 424 476 479 590 618 7765 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Retail Office M1 tranche I (retail)

Source: Company filings

1 Defined as investment property value 2 Based on total GLA 3 Galeria Olimpia and Centrum Echo Belchatow treated as one project 4 Acquisition of A4 Business Park III; treated as one project together with A4 Business Park I/II 5 Pro forma for M1 tranche I acquisition completed in January 2018

Proven track record of delivery and leasing while achieving strong value creation

Appendix

4

slide-39
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38

LPP in Galeria Echo

Source: Company filings, FactSet

2002 2011 2018 861 1,430 1,430 1,430 3,000 2002 2011 2013 2014 2018 2002: First LPP store opened 2002: First CCC store opened 2011: Reserved store extension in a new, two-level format 2013: Stores with new brands introduced: Mohito and Sinsay (787 sqm) 2018: House store extension in the latest format opened; further extension of Reserved store already planned 2011: Extension

  • f the store in a

new format 2014: Further extension

  • f the store

2013 2018: Planned

  • pening of the

latest concept store

GLA evolution (sqm)

169 419 419 668 1,500 2002 2011 2013 2014 2018

CCC in Galeria Echo

2014 2018 2002 2011 Market cap of c. EUR 3.6bn

  • Est. 1995

One of largest Polish retailers listed at WSE Market cap of c. EUR 1.9bn

  • Est. 1999

One of largest Polish retailers listed at WSE

Loyal customer base, growing with EPP

Appendix

4

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39

EPP Asset Management and Property Management capabilities

Source: Company filings, press releases

1 As of July 2018; 2 Retail GLA of 684,000 sqm (including Marcelin)

Key highlights

Echo Investment Property Management Office team Property Managers Echo Investment Property Management Retail team Shopping Mall Directors Marketing Managers Lease Administration Managers Financial & Accounting Managers Technical Managers Echo Investment Property Management Property Management Facility Management Team Budgeting Reporting & Analysis Team Marketing Management EPP University Integration Team Architecture Team Legal Department Financial and Accounting Department Retail Leasing Team Construction and Development Team Office Leasing Team AM

Total Retail GLA

  • c. 684 k

sqm >150 employees

CIJ Awards Best Asset Management Co. 2017

1,545 retail units

2017 Eurobuild Awards Property Management Co.

Fully integrated in-house platform

Select awards Appendix

4

Europa Property Awards Core+/Value Add Investor 2017

Retail 19 projects1 684k sqm2

slide-41
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40

1 Acquisition yield excluding transaction costs; 6.8% for the total portfolio including transaction costs 2 Represents M1 Poznan only

Source: Company filings

High quality assets in dominant catchment areas

Appendix

4

Tranche 1 Tranche 2 Tranche 3 Number of properties 4 6 2 GAV (EURmm) 359 222 111 GLA (000s sqm) 194 184 68 NOI (EURmm) 25 16 8 Acquisition yield (%) 7.0%1 7.3%1 6.9%1 GLA (‘ooo sqm) 194 184 68 Footfall (million) 22 12.62 5.7

Portfolio

Geographic footprint of M1 portfolio Key operational statistics of M1 portfolio

To be acquired Perform. Key tenants

Tranche 1 Tranche 2 Tranche 3

M1 Lodz M1 Zabrze M1 Czeladz M1 Krakow PP Olsztyn M1 Radom PP Kielce M1 Czestochowa PP Opole M1 Bytom

M1 Poznan M1 Tychy

slide-42
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41

Source: Company information, FactSet

Strong performance of current retailers i.e. LPP, CCC, etc.

  • “In weeks with non-trading Sundays demand transfers to other days
  • f the week. Positive LFLs in Poland show that LPP deals well

with the ban on trade on selected Sundays. 80% of LFL stores recorded higher YoY revenues in 2Q18.” – LPP market cap of

  • c. EUR 3.6bn, Q2’18 Investor Presentation

1

Consumer shift to other days in the week

2

  • Saturdays – up to 12% increase
  • Mondays – up to 12% increase
  • Fridays – up to 8% increase

Already existing in many other European countries

3

  • Already in place in Germany, Belgium, Holland, France, Austria,

Greece and others

Mon Tue Wed Thu Fri Sat Sun Mar-Jun 2017 Mar-Jun 2018 +12% +3% +7% +4% +8% +12% (48%)

Sunday trading has had a marginal impact on EPP shopping centres

Average footfall change (%)

Appendix

4

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42

Experienced Board of Directors

Source: Company filings

Executing clearly-defined purposes

  • EPP has a one-tier board structure, with non-executive directors who supervise the

executive directors

  • The purpose of the Board of Directors is to:

set the strategic objectives of EPP and determine the company’s investment and performance criteria

take responsibility for the company’s sustainability, proper management, control and compliance, and the ethical behaviour of the businesses

  • The Executive Directors are in charge of the day-to-day management of EPP
  • The Non-Executive Directors are entrusted with the supervision of the performance of the

tasks by the Members of the Board

the Non-Executive Directors are individuals of calibre, credibility and have the necessary skills and experience to provide judgement that is independent

  • f Management
  • The board has established specific committees (audit and risk committee, investment

committee, nomination and remuneration committee) to give detailed attention to certain

  • f its responsibilities
  • Board meetings are held at least quarterly, with additional meetings convened when

circumstances necessitate

Comprising of experienced professionals Status Member Nationality Experience in real estate

Executive Directors

  • Hadley Dean (CEO)
  • Jacek Bagiński (CFO)
  • British
  • Polish
  • 20 years
  • 20 years

Independent Non- Executive Directors

  • Robert Weisz (chairman)
  • Marek Belka
  • Dionne Ellerine
  • Andrea Philippa Steer
  • Peter Driessen
  • Dutch
  • Polish
  • S. African
  • S. African / Irish
  • Dutch
  • 36 years
  • 10 years
  • 40 years

Non- Executive Directors

  • Marc Wainer
  • Maciej Dyjas
  • Andrew König
  • Nebil Senman
  • S. African
  • German
  • S. African
  • German / Turkish
  • 40 years
  • 25 years
  • 22 years
  • 20 years

Appendix

4