GERMAN USUFRUCT FUND I (GUF-I) PRESENTATION INVESTMENT OPPORTUNITY - - PowerPoint PPT Presentation

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

GERMAN USUFRUCT FUND I (GUF-I) PRESENTATION

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

1 Fund Description……………………………….…………………….......... 04 2 Term Sheet ………………………………….………………………............... 06 3 The EUR 400 Trillion Pension Gap …………………………..…… 07 4 Usufruct Market Size…………………………………………………...... 09 5 Value Creation and Financials………………………………………… 10 6 Acquisition Pipeline………………………………………………………. 17 7 Team…………………………………………………………………………………… 22 8 Social Impact……………………………………………………………………… 25 9 Attachments…………………………………………………………………..… 26

CONTENTS

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

DISCLAIMER

This presentation relates to the PPM of a DIFC Fund to be incorporated in accordance with the Collective Investment Law 2010 and Rules of the Dubai Financial Services Authority (“DFSA”) as amended from time to time. This presentation must be read in conjunction with GUF-I Private Placement Memorandum and other related documents.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

FUND DESCRIPTION (GUF-I)

WHY INVEST IN GUF-I FUND DESCRIPTION

GUF-I is purchasing real estate from retirees in Germany while granting them a lifelong right to live in the property (Usufruct). The fund therefore purchases the asset with the an average discount of >40% and “collects the rent upfront”. The fund has therefore no rental risk and can return higher yields to the investor while, at the same time, significantly reducing any investment risk.

✓ GUF-I has a higher expected return profile than comparable real estate funds ✓ GUF-I has no rental risk and has a 100% rental guarantee ✓ GUF-I has no property insurance/ maintenance costs ✓ GUF-I concept allows to purchase “off market” properties in prime locations normally not available ✓ GUF-I has a higher “enhancement value add opportunity” due to “off market” properties ✓ GUF-I is not impacted by Government regulations such as rent caps and others

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

BE BERL RLIN

GU GUF-I I inves ests ts pred edomin

• minately

ely in n Berl rlin, n, one ne of f the he most t und nderv rval alued ued capita tals s in n the he world. rld.

INVESTMENT STRATEGY

GUF-I is based on a 4 pillar investment strategy providing a safe haven investment with a double digit return profile (base case net IRR 12%).

RES ESIDEN DENTIAL TIAL

GU GUF-I I inves ests ts onl nly y in o n off ff mark rket t pri rime e resid iden ential tial real l estate e with h enh nhancem ancemen ent t poten ential. tial.

GE GERMA MANY NY

GU GUF-I I inves ests ts exclus clusiv ively ely in n Ge Germ rman any, , one ne of f the he most t stab able le ec economies nomies in n the he world. rld.

US USUF UFRU RUCT CT

GU GUF-I I inves ests ts only nly in n real es estate e wi with h Usu sufruc ruct t co contr tracts acts an and ca can n the heref efor

• re

e buy properties perties wi with h a a disc scoun

• unt

t >40% 0% (no no ren ental tal ri risk sk). ).

1 2 3 4

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

FUND TERM SHEET

RESPONSIBLE ENTITIES FUND HIGHLIGHTS FEE STRUCTURE KEY PARTNERS

Fund Name German Usufruct Real Estate Fund I (GUF-I) General Partner CES Investments Limited Fund Manager CES Investments Limited Fund DIFC Registration Number 3980 Fund Administrator APEX Legal Representative BSAH Ahmad Bin Hazeem & Associates LLP External Auditor Russel Bedford Fund Profile Real Estate (Usufruct) Target Market Germany Fund Size EUR100 million Minimum First Close EUR10 million Minimum Subscription Amount EUR1 million Fund Life 7 + 1 years Initial Closing Q3 2020 Anticipated net IRR 12% Dividend 1.5% in Y2 rising to 6% by Y7 Fund Domicile DIFC, UAE Service Charges and Arranging Fee 2% of investor commitment Management Fee 1.5% p.a. on AUM Performance Fee 10% above hurdle rate of 7.5% with high water mark Financial Model Review PWC Licensed Actuary (Germany) Peter Schramm German Real Estate Partner Engel & Völkers

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

THE RETIREMENT PROBLEM

The German EUR 150 billion pension gap

money.co com

The Global EUR 400 trillion pension gap

World Economic ic Forum

8% deficit 12% deficit

01

Germany has already a Pension Gap of

• ver 12%

02

Next Generations are saving less money

03

Interest rates did erode over 13 years

04

Fast aging population – 2020 cross over point

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

PROBLEM:

52% of Germans own their home. However, retirees do not qualify for mortgages. Therefore many retirees are asset ri rich ch but ut ca cash sh poor

• r.

They are forced to struggle in life battling increasing cost of living and healthcare.

SOLUTION:

GUF-I offers to purchase the property under a Usuf ufruct ct contract giving a lifetime right to live in the property. Usuf ufruc ruct is defined in the BGB §§ 1030–1089 and has been used in Germany for

• centuries. This option provides immediate liquidity for the retirees

and allows them to stay in their homes. Funds can be used to increase quality of life and/or provide support to loved ones.

THE SOLUTION – USUFRUCT FUND

Retirees with valuable property but shortfall in liquidity Retirees unlocking property value through Usufruct and gaining immediate liquidity

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

MARKET SIZE GERMANY

ADDRESSABLE MARKET IN EUR BILLION

677 7 34

100 200 300 400 500 600 700 800 Addressable Market USUFRUCT Market 2020 USUFRUCT Market 2030

5% 1% TOTAL MARKET Total residential real estate market in Germany.

USUFRUCT MARKET

2020

USUFRUCT MARKET

2030

GERMANY: EUR 7 billion GERMANY: EUR 34 billion

11% 41% 48% Own their Property and are < 65 Own their Property and are > 65 Don't own their Property

EUR 6.2 trillion

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

FUND VALUE CREATION

Fund purchases the property with an average discount of > 40% (usufruct). Value Add 1 is already locked in after purchase.

01

Property Acquisition

Discount Day 1 Value Add Property Value Acquisition Price During the holding period capital appreciation gains will be recognized.

02

Property Value Enhancement strategy implementation.

03

Property Enhancement

Total Value Add

04

3 Layers of Value Add

Capital Appr. Enhancement Discount Day 1 Value Add Capital Appreciation Enhancement Value Add 1 Value Add 2 Value Add 3 Total Value Add Acquisition Price

01 01 02 02

Acquisition Price

01 01 02

Acquisition Price Capital Appreciation Capital Appr.

03 03

Capital Appreciation

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

02

06 GENDER: Female AGE: 75 LIFE EXPECTANCY: 13 years PROPERTY VALUE: EUR 1,000,000 DISCOUNT: 46% PAYMENT: EUR 524,000

GERMANY: EUR7 billion

The Usufruct discount allow us to get “the rent upfront”. The discount reduces every year increasing the asset value automatically. The Usufruct discount translates to a 6.1% rental yield which is realized automatically. The Fund has no rental risk and is guaranteed 100%

• ccupied.

Purchase Price

Guaranteed Average Annual Rental Yield (unleveraged) 6.1%

Market Price Discount 46.3% 41.5% 37.8 34.0% 30.2% 26.4% 22.7% 18.9%

The discount represents the rent which the Fund accounts for “upfront” Rent “upfront”

Years

01

Property Acquisition

EXAMPLE – PROJECT LEVEL

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

BEFORE

Old Single Family Home

AFTER

Modern Duplex

GUF-I creates value by obtaining building

• permits. The fund

provides prime land and increases buildable area while modernizing the project.

02

Property Enhancement

EXAMPLE – PROJECT LEVEL

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

At a most likely scenario the Fund expects an average growth rate of 4.4%.

• ver 8 years
• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Optimistic Scenario V Shaped Recovery CAGR: 7.5% p.a. Most Likely Scenario U Recovery CAGR: 4.4% p.a. Pessimistic Scenario Recession CAGR: 0% p.a.

COVID-19 Impact Berlin – historical appreciation of 10% per year Berlin – one of the most undervalued capitals Stress test – 3 different Scenarios

03

Capital Appreciation

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

Value add based on the above example using most likely assumptions:

• Acquisition

Discount (Rental Yield)

• Enhancement

Strategy

• Capital

Appreciation

Market Price Acquisition Price

02

06 GENDER: Female AGE: 75 LIFE EXPECTANCY: 13 years PROPERTY VALUE: EUR 1,000,000 DISCOUNT: 46% PAYMENT: EUR 524,000

44% 19% 37% Rental Yield Enhancement Capital Appreciation

04

3 Layers of Value Add

EXAMPLE – PROJECT LEVEL

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

EXPECTED FUND PERFORMANCE

Fund d perfor

• rmance

mance if th the Fund had d been n launc nche hed d in 2007, just t befor

• re

e th the financi ncial al crisis (with thout

• ut any

y enhancem ancement t value lue add).

At base case the Fund anticipates to return a net IRR of 12%, while investing in off- market, prime residential real estate in Germany.

ANTICIPATED FUND RETURN (2020 to 2028)

BASE CASE OPTIMISTIC

VALUE ADD 1: Property acquisition with av. discount of > 40% 40% 40% VALUE ADD 2: Recession Assumption

• 15%

0% 0% VALUE ADD 3: Property Enhancement Assumption 1% 2% 3%

EXPECTED NET IRR 5% 12% 16% CRISIS TESTED FUND PERFORMANCE MODEL (2007 to 2015) Historical NET IRR 13%

FUND PERFORMANCE STRESS TEST FUND PERFORMANCE CRISIS STRESS TEST

HISTORICAL TESTED FUND PERFORMANCE MODEL (2011 to 2019) Historical NET IRR 18%

FUND PERFORMANCE HISTORICAL STRESS TEST

Fund d perfor

• rmance

mance if th the Fund had d been n launc nche hed d in 2011 (witho thout ut any y enhancem ancemen ent t value ue add). ). Net t IRR is calcula ulated ed after er subtr trac acti tion

• n of
• f a

all fees s and in-coun

• untry

try tax taxes. Annual Appreciation Assumption 2.5% 4.4% 7.5%

EXTREMELY PESSIMISTIC

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

5 10 15 20 25 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Total

EXPECTED DIVIDEND DISTRIBUTION

The Fund pays a minimum guaranteed payment of 1.5%. In Y8 the remaining portfolio will be sold to a pension fund, REIT, hedge fund, private investors or

• ther party.

4% 4% 4% 4% 4% 4%

TOTAL RETURN INVESTMENT

207% ANTICIPATED FUND RETURN PROFILE (EUR MILLION)

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

PROCESS

The Fund is purchasing prime off market properties with Usufruct contracts in Germany, enhances and sells the same. 01

Client Acquisition

02

Enhancement

03

Divestiture INVESTMENT ADVISOR

A deal pipeline of residential German real estate with Usufruct exceeding EUR40 million has already been secured. Add value through capital appreciation and e.g. increase

• f plot build up area and new

building permits. Divest projects with expired usufruct contract and/or non- expired contracts after value generation.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

Deal Pipeline >EUR40 million available Example of Properties – Example 1

Price: Eur 1,49 million Price with Usufruct: Eur 0.89 million Seller: Female, Age 79 Discount: 39% Life expectancy: 10 years Land: 893 m2 BUA: 193 m2 Built: 1935 Enhancement Strategy – New Built Allowance for New Built: 500m2

1,490,000 897,000 998,001 1,107,433 1,226,348 1,354,588 1,493,751 1,635,041 1,787,781 500,000 1,000,000 1,500,000 2,000,000 Market Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

BASE CASE (EUR)

Expected Value Increase

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

Deal Pipeline >EUR40 million available Example of Properties – Example 2

Price: Eur 3.2 million Price with Usufruct: Eur 2.43 million Seller: Female, Age 79 Male. Age 74 limited to 10 years Discount: 36% Life expectancy: 11 years Land: 990 m2 BUA: 420 m2 Built: 1910 No Enhancement Strategy – resell strategy

Base Case Value Add (Euro)

Expected value increase based on discount decrease, enhancement and capital appreciation

3,200,000 2,430,000 2,515,556 2,731,167 2,962,050 3,209,194 3,473,647 3,756,522 4,059,001

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 Price Y1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

Deal Pipeline >EUR40 million available Example of Properties – Example 3

Price: Eur 0.90 million Price with Usufruct: Eur 0.55 million Seller: Female, Age 75 Discount: 44% Life expectancy: 12 years Land: 1,400 m2 BUA: 140 m2 Built: 1965 Enhancement Strategy - Property Division Allowance for New Built: 200m2

Base Case Value Add (Euro)

Expected value increase based on discount decrease, enhancement and capital appreciation

900,000 549,000 651,733 689,010 756,340 828,996 907,336 991,744 1,082,624

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 Price Y1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

Deal Pipeline >EUR40 million available Example of Properties – Example 4

Price: Eur 1.40 million Price with Usufruct: Eur 1.12 million Discount: 26% Seller: Male, Age 80 Life expectancy: 8 years Land: 1,300 m2 BUA: 160 m2 Built: 1940 Enhancement Strategy – New Built Allowance for New Built: 500m2

Base Case Value Add (Euro)

Market Price

• Disc. Price

Expected value increase based on discount decrease, enhancement and capital appreciation

1,400,000 1,120,000 1,347,329 1,497,722 1,660,655 1,836,990 2,027,640 2,233,577 2,471,613

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 Price Y1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

THE TEAM

Markus Giebel

Markus Giebel, a German national, is the CEO of CES Investments. He was previously the CEO of Deyaar Development PJSC, a publicly traded real estate company. At Deyaar Mr. Giebel was responsible for the development of over 1 million square meter of residential and commercial real estate with a combined value exceeding USD5

• billion. Before joining Deyaar he was the youngest ever Vice President of Corning, a fortune 500 company listed on the New York Stock Exchange. He holds several Board

positions, and has over 20 patents in his name. He received several awards such as the CEO award, the Leadership award, the Entrepreneur award, the Inventor of the Year award amongst others. Mr. Giebel graduated with a Master from the Technical University of Munich and a MBA from the Swiss Business School.

Olivier Richaud

Olivier Richaud, a French national, is the CFO of CES Investments. He was before a senior manager with Apex Group located in Luxembourg in charge of the corporate client portfolio. He further has extensive experience in Mezzanine financing and was responsible for the Mezzanine debt portfolio for GS Lux Management Services. Mr. Richaud was further the senior advisor for Alter Domus with a focus on Private Equity and listed US companies. Mr. Richaud has several degrees including a Master in Management (audit, banking) from Audencia ESC Nantes.

Ward Ferraye

Ward Ferraye is responsible for compliance at CES Investments. Ward is an experienced Compliance Consultant with a demonstrated and proven history of working in the financial services industry. Ward not only designed the compliance manuals for many companies, but also provided the relevant training modules to embed a compliance culture within each entity. Skilled in administration, management, payroll, and invoicing he adds a multifunctional role to the organization. Ward has a strong background in finance including an Anti-Money Laundering Specialist Certification focused in Anti-Money Laundering from ACAMS.

Madalina Masilla

Madalina Masilla is the Investor Relations Manager (IRM) for CES Investments. Having graduated in Economics and studied Diplomacy at post-graduate level, Madalina embarked upon an outstanding career in international business structuring. On the basis of her early prodigious output and creative problem-solving skills, Madalina quickly progressed to advising clients in Europe, the Middle East and the Far East. For the last 5 years Madalina has been successfully heading the compliance department

• f Quantiq Limited, a management and business structuring consultancy based in the Dubai International Financial Center and Abu Dhabi Global Markets. Madalina has a

proven track record in due diligence, corporate governance, enterprise structuring, compliance, and anti-money laundering.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

THE TEAM

Jurgen Herre

Jurgen E. Herre, a German national, is a member of the CES advisory committee. He was Managing Director of Hines Europe and member of the worldwide investment committee of the Hines real estate funds. Hines is a privately owned globally leading real estate development and investment company. Hines operates in 24 countries and has US$ 133,3 billion under management. During his career Mr. Herre was involved in real estate projects with a value of more than US$ 25 billion. Prior to Hines Mr. Herre worked as a real estate investment banker for a leading German banking consortium. Mr. Herre is a Board Member in various companies.

• Dr. Kassem Lahham
• Dr. Kassem Lahham, a German national, is a member of the CES advisory committee. Dr. Kassem Lahham’s career path spans over more three decades in the financial

industry with a focus on finance, wealth management, legacy planning and private banking. With Levantine roots, he started his professional journey in Germany, where he was born and raised, as a private banker advising HNWI clients for the largest German Bank for more than 14 years. Along other degrees, he holds more importantly a Diploma in Economics from Germany, MBA and PhD in Finance from the USA. Since 2015 Dr. Kassem Lahham is heading the Private Banking Team for

• ne of the largest Islamic Banks in the UAE.

Zaid Maleh

Zaid Maleh is a member of the CES advisory committee. His professional career spans over 2 decades in Emerging Markets overseeing the establishment of world- class ventures across multiple asset-classes. He currently holds multiple board seats at leading institutions throughout the US, Europe and the Middle East. Zaid Maleh started his professional career as a Middle East Consultant at the United Nations Headquarters in Vienna back in 2000. He then held senior positions within leading international banks in Vienna, London, Moscow and Dubai. Zaid Maleh is currently pursuing his PhD at the world-renowned Institute for Law and Finance at the Goethe University in Frankfurt and holds an MSc in Investment Banking and Finance from the Vienna University for Economics & Business Administration.

Klaus Holscher

Klaus Holscher, a German national, is a member of the CES advisory committee. He was engaged in the German real estate market since 1987. Mr. Holscher founded Kensington Luxury Real Estate Brokers LLC in Feb 2006. With this LLC he built up as a License Partner the brand Engel & Völkers in the UAE and the brand Kensington International. With these both brands he led his company to the best License Partner for Engel & Völkers worldwide twice in a row. Klaus has more than 25 years international experience in German based REC in real estate and finance. In Germany he was responsible for the marketing of luxury real estates for some well-known developers e.g. Bayerische Hausbau, Deutsche Hausbau and BayernAreal.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

Oliver Kuehn

Oliver Kuehn, a German national, is a member of the CES advisory committee. Oliver is one of the most renowned architects in Germany and has his headquarter in

• Berlin. He is a visiting professor at Huaqiao University, China and has a team of over 30 people working for him. Oliver is advising CES on the “Enhancement Strategy”

in order to transform properties and provide the best value add proposals for GUF-I including building and concept pre-approvals.

Otto Kiebler

Otto Kiebler is the CEO of HausplusRente and has over 40 years experience in the banking and real estate sector. Mr. Kiebler is the pioneer for Usufruct offerings in Germany and has offices in several cities including Berlin. His company has currently a deal pipeline of over EUR40 million for Usufruct investments and CES has signed a Letter of Intent with HausplusRente. With over 20 employees HausplusRente has a steady deal flow for prime Usufruct offerings providing an ideal partnership opportunity.

THE TEAM

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

SOCIAL IMPACT

The Fund has a significant social impact foot print.

As Assis sist t Reti tired ed pe peop

• ple

le to u

• unl

nloc

• ck

k Li Liqu quid idit ity

Retir ired ed peo eople ple in n Ge Germ rman any y do no not qua ualify ify for r mortgage.

• rtgage. In

In order er to ge gener nerate liqui uidity dity the hey y ar are e oft ften en forced ced to se sell the heir ir ho home.

• e. However

er, , in n the he Ge Germ rman an cu culture e older er peo eople ple wan ant t to stay y wi within hin the heir ir ho home me as as long ng as as possib ssible le (do

• no

not rep eplan ant t an an old tree). ee). The he Usu sufruct ruct al allows ws retired ed peo eopl ple e to stay y in n the heir r ho home e an and gen ener erated ed the he oft ften en req equir ire e liquidity dity to avoid id ha hardship ship an and to inc ncrease ease qual ality ity of f life. e.

1 Redu duce e th the P Pens nsion ion Ga Gap

The Usufruct model allows to reduce the country’s pension gap and is therefore a welcome financial tool by the he Go Governmen ernment. .

2 Inc ncreas ease Sp Spend ndin ing

Extr tra a liquidity dity wi will l be e unl nloc

• cked

ed an and ca can n be e use sed d to stimula late the he ec econom

• nomy.

3 Gr Green R n Rede devel elopm

• pmen

ent Opp t Oppor

• rtu

tuni nity ty

The Fund’s strategy is to prepare the projects for redevelopment to maximize environmental aspects and popula ulation tion den ensity sity in ur n urban an se settings tings.

4

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

ATTACHMENTS

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

✓ GUF is not subject to Rent Payments (rent is pre-paid by the discount) ✓ GUF locks in >40% of future profits at day 1 ✓ GUF is not exposed to possible Rent Caps ✓ German real estate market has very little volatility ✓ Berlin is an extremely undervalued city ✓ Berlin has over 200 nationalities and attracts international tenants ✓ German home ownership on a low level but increasing ✓ Berlin is a growing city (4.5% growth) ✓ Germany – a save haven investment country ✓ Germany is moving to a hybrid home office model

GUF-1 WHY INVEST IN GERMANY, BERLIN

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

MARKET INFORMATION

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

GERMANY KEY FACTS

Germany is the largest and most stable economy in Europe.

15%

• f patents filed in the world

1st

ranked in the Global National Brand Index

28k

PhD graduates every year from Germany’s universities

4th

largest economy in the world

14

EUR billion budget surplus in 2019

GERMAN GDP FRAN ANCE CE UK UK ITALY

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

GERMAN HOUSING MARKET

The German Housing Market has a low volatility and is an extremely safe investment in uncertain times.

https://www.businessinsider.com/chartshowswherehousescostthemost20152?nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_term=Business%2520Insider%2 520Select&utm_campaign=BI%2520Select%2520%2528Wednesday%2520Friday%2529%25202015-02-27&utm_content=BISelect

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

BERLIN HOUSING MARKET

Berlin is

• ne of the

most undervalued Capitals in the world and has an enormous capacity for growth. Berlin is

• ne of the

fastest growing cities in Germany. Berlin requires

• ver

200,000 new homes.

% of new homes requested in Berlin

Berlin Pricing Index

https://www.businessinsider.com/chartshowswherehousescostthemost20152?nr_email_referer=1&utm_source=Sailthru&utm_me dium=email&utm_term=Business%2520Insider%2520Select&utm_campaign=BI%2520Select%2520%2528Wednesday%2520Frid ay%2529%25202015-02-27&utm_content=BISelect https://guthmann.estate/de/marktreport/berlin/

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GERMAN HOME OWNERSHIP

Germany has a low home ownership ratio which is increasing Year on Year.

https://www.google.com/search?q=german+home+ownership&tbm=isch&ved=2ahUKEwjR9_KtsPzpAhUV4oUKHQoyBLEQ2- cCegQIABAA&oq=german+home+ownership&gs_lcp=CgNpbWcQAzoECAAQQzoCCAA6BAgAEB46BggAEAgQHjoECAAQGFDsuERYhtlEYMbbRGgAcAB4AIAB6AGIAaofkgEGMC4x NS42mAEAoAEBqgELZ3dzLXdpei1pbWc&sclient=img&ei=e4LjXpHODZXElwSK5JCICw&bih=881&biw=1745#imgrc=hYQ1nUMtxkc0cM

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FUND INFORMATION

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

FUND STRUCTURE

GUF-I Fund Established in the DIFC, Dubai regulated by the DFSA Limited Partners (Investors) Fund Manager Investment Advisor Property 1 Administrator Property 2 Property 3 Property 4 Investment Committee Auditor Financial Advisor Risk Manager SPV SPV Established in Luxembourg Property ….. Dubai, UAE Luxembourg Germany Fund Manager Fund d Managemen nagement Inves estm tmen ent t Managemen nagement

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

REAL ESTATE ACQUISITION FORECAST

Anticipated Deployment of Capital in Year 1 (EUR million)

2 4 6 8 10 12 14 16 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12

The investment advisor together with Engel & Völkers, von Poll and/or other real estate partners will liaise with retirees and assist with the selection and acquisition process.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

GUF-I is investing in “In Investmen tment t Grade ade Areas eas” only. These areas have been identified with a potential for maximum mid-to- long term appreciation, beating the average.

CREATING VALUE 3a:

01 03

Enhancement Strategy

X%

beating the city’s average capital appreciation

Investment Grade Areas Non Investment Grade Areas

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

GUF-I IS A WIN-WIN PROPOSITION

The winning investment

• pportunity for

uncertain times.

INVES ESTOR Provides a high return investment with a recession tested investment model. GOVERNM NMEN ENT Assists in easing a global Government problem to address the rising pension gap and stimulates spending. USUFRU RUCT CT HOLDER ER Solves the cash flow problem of a large population of retirees.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

With the Baby Boomers starting to dominate the retirement distribution, a retirement shift is underway. The Silent Generation (war generation) was preserving assets and wealth, whereas Baby Boomers and Gen X are focusing on consumption. A EUR 34 billion Usufruct market is developing in Germany.

THE RIGHT TIME FOR USUFRUCT IN GERMANY

The retirement shift is fuelling EUR 34 billion Usufruct market in Germany. CES is well positioned to lead the “Early Adopter” market.

Silent Generation Baby Boomers Gen X

FIRST MOVERS EARLY ADOPTORS EARLY MAJORITY

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

MARKET PLAYERS

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

USUFRUCT MARKET

Since 2009 specialised in the Usu sufruct ruct Model

• Model. Established first in Munich and

since 2019 expansion into other major cities and regions in Germany. In Munich Haus Plus Rente sold properties worth around EUR300 million. A former employee of Haus Plus Rente started DEGIV as a start up in 2015. DEGIV also specialises in the Usu sufruc ruct Model el in Munich and surrounding areas. Market leader in the lif life annu nnuity ity model

• model. Deutsche Leibrenten AG does not use

external investors, but purely invests their own equity. Currently, Deutsche Leibrente AG has more than 400 properties in their portfolio with a combined value of EUR130 Million. For 2020 additional 400 acquisitions are planned. Very large diversified trust since 1870 in Germany, operational in the fields of education, agriculture, landscaping, artisanry, trade and textiles. For more than 17 years they offer life an annu nuity ity through their partner INITIUM AG.

On the onset of a fast maturing market. The market has already transacted over Eur 1 billion in usufruct real estate.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

MARKETING

Awareness is starting to grow with TV Spots on the official German TV stations and several publications.

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INVESTMENT OPPORTUNITY - GERMAN USUFRUCT REAL ESTATE FUND I

www.cesinvest.ae +971 4 399 7772 info@cesinvest.ae