Investor Presentation May 2015 Disclaimer This presentation (the - - PowerPoint PPT Presentation
Investor Presentation May 2015 Disclaimer This presentation (the - - PowerPoint PPT Presentation
Investor Presentation May 2015 Disclaimer This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, publication or use by (directly or indirectly,
Disclaimer
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This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, publication or use by (directly or indirectly, in whole or in part), any person or entity that is a citizen of, or resident or located in, the United States, Australia, Canada or Japan or any jurisdiction where applicable laws prohibit its viewing, release, distribution, publication or use. This Presentation is being provided for information purposes to selected recipients only and does not constitute or form part of, and should not be construed as an offer or invitation or recommendation to, purchase or sell or subscribe for, or any solicitation of any offer to purchase or subscribe for any securities in BPG Investments S.à r.l (the "Company"), in any
- jurisdiction. Neither the Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on, in connection
with, or act as an inducement in relation to, a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any such securities. While the Company is financed via debt securities, it is not intended that the information that will be provided in this Presentation will constitute material non-public information regarding the Company and the Company has already publicly stated that they are considering strategic options, including an IPO. The contents of this Presentation and any information relating to the Company received (whether in written or oral form) are confidential and may not be copied, distributed, published or reproduced, directly or indirectly, in whole or in part, or disclosed or distributed by recipients to any other person. The information contained in this Presentation has been provided by the Company and has not been verified independently. Unless otherwise stated, the Company is the source of information. No reliance may be placed for any purpose whatsoever on the information or opinions contained in the Presentation or on its completeness, accuracy of fairness. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its respective directors, officers, employees, agents or advisers as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no responsibility or liability is accepted by any of them for any such information or opinions. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, ambitions, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be relied on as a promise or representation as to the future. This Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company, or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. All features in this Presentation are current at the time of publication but may be subject to change in the future. The Company disclaims any obligation to update or revise any statements, in particular forward-looking statements, to reflect future events or developments. Statements contained in this Presentation regarding past events or performance should not be taken as a guarantee of future events or performance. Prospective recipients should not treat the contents of this Presentation as advice relating to legal, taxation or investment matters, and are to make their own assessments concerning such matters and other consequences of a potential investment in the Company and its securities, including the merits of investing and related risks. In receiving any information relating to the Company (whether in written or oral form), including information in this Presentation, you will be deemed to have represented and agreed for the benefit of the Company (i) that you will
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BGP management team
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Source: Company information
BGP Management – Non Executive Directors
Chairman Mediaworks Ltd, Vantage Private Equity, member of the board of Ramsay Healthcare
Former Chairman of Skycity Entertainment Group and Australian Growth Properties Ltd
The present Honorary Consul General for Luxembourg in Australia
Gained significant real estate experience
Known for international sports marketing activities, including leading the bid for Sydney’s Olympic games 2000 Rod McGeoch
Chairman Chairman and CEO of Carrosserie Comes and co- founder and chairman of HITEC Luxembourg Significant entrepreneurial expertise BSc degree in industrial technology from University
- f Applied Sciences in Ludwigshafen and MA degree
in economics and finance from the University of Mannheim Nicolas Comes Non-Executive Director
Currently serves as managing partner and CEO of HITEC Luxembourg SA. and is a member of the board of Carrosserie Comes
He is also chairman of the Luxembourg National Research Fund (FNR) and member of the Supervisory Board of Villeroy & Boch
He previously served as a member of the management committee of SES SA and has significant experience in the fields of innovation, technology, business development and marketing.
He received his MSc degree from ETH Zurich in civil engineering, an MBA and an IDP-C from INSEAD Yves Elsen Non-Executive Director
BGP Management – Key Executives
CEO of BGP since 2009, responsible during repositioning phase
More than 20 years experience in corporate and institutional banking
Previous positions include Managing Director within Financial Markets at ING and Head of Specialized Funds EMEA at Babcock & Brown
BA and LLB degree from University of Sydney
Joined BGP in 2014 from Orco Property Group, where he acted as CFO
Prior to this he served in various roles at Groupe Bruxelles Lambert and Générale de Banque
Graduate degree in Ingenieur Commercial in Business Administration and Technology Interface from I.C.H.E.C. Brussels Yves Désiront CFO Mark Dunstan CEO
Joined BGP in 2009, responsible for the
- perational activities of BGP AM
Previous positions include asset and investment manager at Cerberus Group and fund manager for IVG
Architecture degree level from Karlsruhe including scholarships at the ESTAB Barcelona and the Architectural Association London, as well as an MBA and MRICs
Joined BGP in 2009, in charge of the BGP AM finance department
Eight years of experience at PwC in transaction services, business recovery services and auditing
BA degree in history and economics at Oxford University, qualified as an Associated Chartered Accountant Thomas Drastik Managing Director Fund Management & Finance Till Schmiedeknecht COO
Residential portfolio €1,093m 96% Non-core(1) €47m 4%
BGP at a glance – an attractive, fully integrated platform in the German residential real estate market
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Portfolio Locations – Residential Portfolio(2) GAV by Portfolio Segment – 31-Mar 2015
GAV < €5m €5m < GAV < €10m €10m < GAV < €50m €50m < GAV < €100m GAV > €100m
Nuremberg Kirchseeon Garching Ulm Karlsruhe Dietzenbach Berlin Düren Dortmund Essen Düsseldorf Cologne Bremerhaven Bremen Celle Hanover Emden Ronnenberg Gronau Paderborn Münster
Northern Germany Southern Germany Western Germany Berlin Area 42% of portfolio GAV located in the Berlin area
Goettingen Glienicke
BGP at a glance Total GAV of €1,140m
42% 12% 22% 25%
Norderstedt Rendsburg Kiel Kappeln
Bremerhaven Norderstedt Rendsburg Kiel
OTTO II
As of 31-Mar 2015
GAV(3): €1,140m, thereof €1,093m residential
LTV(4): ~47% As of 31-Dec 2014
GAV(3): €1,220m, thereof €1,084m residential
EPRA NAV: €584m(5)
LTV(4): 51.9%
Residential units: 16,117
NRI(6): €75.5m
Rent/sqm (residential)(7): €5.4
Vacancy rate (residential)(8): 5.9%
Source: Company information, CBRE reports (1) Non-core portfolio consists of Straubing (€44m) and 25% minority stake in OTTO III (25% NAV representing €2.8m), see Annex for more information; valuation as of 31-Dec 2014 (2) Residential portfolio as of 31-Mar 2015 (CBRE) (3) Gross asset value based on CBRE (4) Loan to value – for a calculation, see “G – Financial Overview” (5) EPRA NAV represents net assets after excluding marked to market adjustments of effective cash flow hedges and deferred tax relating to revaluation movements, capital allowances and derivatives (6) Net rental income of residential portfolio for the year ending 31-Dec 2014 (7) Average residential net cold rent per month per sqm, as of 31-Dec 2014 (8) Vacancy of residential units as of 31-Dec 2014 excludes OTTO II and units under repositioning and refurbishment and assets held for sale
Management successfully transformed BGP into a pure-play residential player
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2005 - 2009
2007 Q1 2015
Source: Company information (1) GAV as of 31-Mar 2015 (CBRE); excluding non-core portfolio consisting of Straubing and OTTO III
Stabilization and repositioning of BGP – focus on German residential portfolio Pan-European multi-segment fund
Focus on German residential assets
Establishment of BGP Asset Management in 2009 as a subsidiary of BGP Investment
Divest non-core assets and negative equity investments
Reinvest income in target portfolio through capex and debt reduction
Full integration of the platform incl. AM, PM and FM
Initially, major joint venture between Babcock & Brown and the
GPT Group established in mid 2005 as Pan-European multi-segment fund
Portfolio before global economic conditions deteriorated and
prompted a partial sell down 2009 – Q1 2015
Germany Netherlands Spain France Lithuania Czech Republic Denmark Sweden Residential Light industrial Retail 1,093
- Germany
Netherlands Spain France Lithuania Czech Republic Denmark Sweden
GAV €m
(1)
Operational Turn Around
- Improvement of core processes
(refurbishment, repositioning and maintenance, letting, rent collection, side costs)
- Introduction of Rental Price
Cockpit (dynamic pricing model)
- Improvement of KPIs
- Sale of non core locations and
start of sell-down program for condo units
- Set up of JV with family office(1)
(currently in sales process – estimated IRR (BGP) > 100%)
Refinancing
- c.10,000 units with a CMBS
transaction at initial cost of capital of 3.91% in 2013 (currently 4.16%) (Monnet)
- c.1,600 units at 2.075% cost of
capital at Jun 2014 (Franz I)
- c.4,000 units with a bank loan at
1.945% cost of capital at Dec 2014 (Bundaberg)
Platform Integration
- Participation of 28% in facility
manager in 2012
- Participation of 50% in property
manager 2013
- Establishment of own letting
platform BGP Immobilienservice (first external client acquired in December 2014)
- Acquisition of outstanding
stakes and integration of asset management, property management, facility management into Pan-German Residential platform
- Transfer of all residential units
from external property management into internal structure
- Rollout of FM services in key
markets
Capex Program
- Value-enhancing capex program
from 2013 – 2015 to further reduce vacancy levels and uplift asset valuation
- Approx. €36m of total capex in
2015 to be invested in the portfolio to drive operating performance and repositioning
- f selected assets
Strong management track record of value enhancement
BGP’s asset management team has a strong track record in implementing value-enhancing strategic projects. The successful turn-around allowed for refinancing of the company. Platform integration as well as the current capex program should drive further profitability and valuation improvements
(1) OTTO III defined as non core asset
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BGP – Key investment highlights
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Opportunity to invest in growing and resilient German residential market Germany wide upward trending residential portfolio consisting of attractive micro locations in Berlin (42%) and other growing urban cities Fully integrated management platform geared to support scale and efficiency enhancement Significant organic growth potential driven by capturing rental reversion, vacancy reduction and selective refurbishments Germany wide presence allows significant opportunities for acquisition of small to medium scale portfolios with limited competition – operational gearing Well balanced, conservative financial structure combined with significant cost
- ptimization potential
2 3 4 5 6
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19.0 17.0 16.7 16 15.4 15.6 60.6 59.6 54.5 51.9 51.5 50.4 20.4 23.3 28.8 32.1 33.1 34 2008 2020 2030 2040 2050 2060 <20 years 20-65 years 65 years and older
Supportive structural demand dynamics
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Source: Federal Statistical Office 2013
29.4 31.1 32.1 32.8 10.2 9.6 8.9 8.3 39.9 40.7 41.0 41.1 2013A 2015E 2020E 2025E 1-2 person households 3+ person households %
1-2 person household growth: +11.7%
m units
Ageing German population Number of private households
Source: Federal Statistical Office
1
18% 21% 21% 21% 25% 35% 43% 49% Hamburg Berlin Cologne Frankfurt Munich Paris Madrid Rome Germany European Metropolis
Source: Cologne Institute for Economic Research
2012
Ownership ratio
56% 58% 80% 82% Netherlands France Italy Spain % Germany: 46%
Source: EMF – Hypostat 2013
Accommodation cost as a % of income(1)
(1) Refers to 1 room apartments
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(1) Construction costs for a multiple dwelling (medium price segment, living comfort, without underground car park - in A-locations construction costs are on average 20% higher (2) Houses and apartments
Low structural housing supply
Commentary
Source: CBRE 13.0
11.5 10.0 9.0 9.0 7.5 5 10 15 Munich Frankfurt Hamburg Cologne Dusseldorf Berlin
Median Rent (Supply) in €/SQM
10.5 5.5 4.0 3.9 2.3 2 4 6 8 10 12 Spain France Netherlands Italy Germany
Source: Euroconstruct, Worldbank
% Average housing(2) completions per 1,000 inhabitants 2003-2012
European Housing completions in major countries
Supply is historically low in Germany as evidenced by lower average housing completions compared to European neighbours
In place stock significantly lower than construction costs
Areas with extensive demand for residential properties and thus significant increases in rent levels such as Berlin and Munich
- ffer the potential to rental growth
1
~950 ~1,620 + ~20% Average value Average construction cost
Construction costs to replace current stock
In €/sqm Source: Arbeitsgemeinschaft für zeitgemäßes Bauen (2015), own estimates
(1)
Base rental levels in major German cities
Attractive German residential real estate market with strong increase of new letting and low vacancy levels
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Significant catch-up potential for German metropolitan areas
(1) Vacancy defined as vacant apartments which are immediately marketable as well as apartments which are currently not lettable due to defects but could be let in the medium term (<6 months) (2) Number reflect the development of year average new letting rents excluding new construction
% Index 100 103 103 107 110 112 116 88 92 96 100 104 108 112 116 120 2011A 2012A 2013A Dec-2014A Market BGP 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A Germany Growing regions in Germany
Development of residential rent in Germany(2)
Source: CBRE Empirica Vacancy Index Source: CBRE
Decreasing vacancy rates indicate good upside potential
This is supported by the strong preference for metropolitan areas and relatively low accommodation costs as percentage of income which indicate substantial further upside potential for rent increases
1
Vacancy rates in Germany(1) Attractive funding spread
(4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 2001 2003 2005 2007 2009 2011 2013 2015 Bundesbank 9-10y Average yield Rental yield
Source: Bulwiengesa AG, Eurostat, Bloomberg
%
BGP’s residential portfolio is focused on growth regions/ urban centre areas in Germany
Source: Federal Statistical Office, Company Information (1) GAV of residential portfolio as of 31-Mar 2015 (CBRE) (2) CAGR 2007A - 2014A (3) CAGR 2007A - 2012A (4) As of Dec 2013A Berlin Area Most sought after German residential real estate market. Strong demand especially for smaller apartments due to high proportion of 1-person households Rent level still low compared to other German and European metropolis Limited availability new built apartments GDP growth(2): 3.1% Increase of disposable income(3): 1.7% # inhabitants(4): 3.4m
Portfolio GAV by Region(1) % of total GAV 41.6% 24.6% 21.8% 11.9% Berlin Area Northern Germany Western Germany Southern Germany Residential Portfolio(1)
GAV < €5m €5m < GAV < €10m €10m < GAV < €50m €50m < GAV < €100m GAV > €100m
Nuremberg Kirchseeon Garching Ulm Karlsruhe Dietzenbach Berlin Düren Dortmund Essen Düsseldorf Cologne Bremerhaven Bremen Celle Hanover Emden Ronnenberg Gronau Paderborn Münster
Northern Germany Southern Germany Western Germany Berlin Area
Goettingen Glienicke
Southern Germany Strong growth of market demand in metropolitan areas due to positive demographic trend Higher incomes allow for higher rent levels GDP growth(2): 2.1% Increase of disposable income(3): 2.2% # inhabitants(4): 29.7m Western Germany Economic centre of Germany generating approx. 22% of German GDP Most densely populated federal state Immigration to additionally drive growth in new households GDP growth(2): 1.7% Increase of disposable income(3): 2.4% # inhabitants(4): 17.6m Northern Germany Continuing trend towards inner-city living boosts demand in urban areas Positive household growth in urban areas expected GDP growth(2): 2.3% Increase of disposable income(3): 2.7% # inhabitants(4): 10.8m
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4 3 2 2 3 4 1 1
€455m €269m €238m €130m
2
Norderstedt Rendsburg Kiel Kappeln
+3% +9% +7% +8% +10% +12% +8% +5% +6% +6% +4% +2% +32% +30% +63% +48% +46% +41% +41% +32% +24% +27% +56% +28%
Population growth 2011 – 2025 Household growth 2011 – 2025 Rent upside(2)
+2% +3% +5% +8% +7% +6% +14% +9% +6% +6% +9% +4%
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42% of residential portfolio GAV located in sought-after Berlin area
Source: CBRE, Berlin-Brandenburg Statistics Office (1) Percentage of total GAV as of 31-Mar 2015 (CBRE) (2) Rental potential defined as the sqm weighted difference between CBRE market rent (as of 28-Feb 2015) and portfolio rent as of 28-Feb 2015
8% 3% 2% 4% 1% 5% <1% 2% 1% 8% 2% <1% 4% Glienecke 1% Other Mitte Friedrichshain- Kreuzberg Pankow Charlottenburg- Wilmersdorf Spandau Steglitz- Zehlendorf Tempelhof- Schöneberg Neukölln Treptow- Köpenick Marzahn- Hellersdorf Lichtenberg Reinickendorf
6.9% population growth in BGP located districts (GAV weighted)
2
6.6% household growth in BGP located districts (GAV weighted) 35.7% rent upside in BGP located districts (sqm weighted)
District % OF GAV Marzahn-Hellersdorf 8.4% Mitte 7.5% Steglitz-Zehlendorf 5.2% Charlottenburg 4.2% Friedrichshain-Kreuzberg 2.5% Pankow 2.1% Neukölln 2.0% Lichtenberg 1.7% Treptow-Köpenick 1.2% Spandau 1.0% Tempelhof-Schöneberg 0.9% Reinickendorf 0.4%
Overview of Berlin portfolio (% of total GAV)(1)
District
Marzahn-Hellersdorf Mitte Steglitz-Zehlendorf Charlottenburg Friedrichshain-Kreuzberg Pankow Neukölln Lichtenberg Treptow-Köpenick Spandau Tempelhof-Schöneberg Reinickendorf
Berlin Area
41.6%
─ Berlin East
17.6%
─ Berlin Center
13.6%
─ Berlin West
6.0%
─ Glienicke
3.7%
─ Others
0.7%
Western Germany
21.8%
─ Cologne
7.6%
─ Münster
3.5%
─ Düsseldorf
2.1%
─ Verden
1.4%
─ Others
7.3%
Northern Germany
24.6%
─ Kiel
6.7%
─ Rendsburg
4.4%
─ Emden
1.8%
─ Bremen
1.8%
─ Hannover
1.5%
─ Other
8.5%
Southern Germany
11.9%
─ Munich
5.8%
─ Nürnberg
2.3%
─ Others
3.8% 100% 4,176 4,204 6,245 1,443 2,629 887 436 199 25 1,030 628 318 388 1,840 1,574 1,425 512 142 321 2,271 558 376 509
Residential portfolio located in regions with positive household growth dynamics – substantial rent increases and vacancy reduction achievable
City
Source: Company information, CBRE (1) Residential units as 28-Feb 2015 (2) CBRE as of 31-Mar 2015 (3) 2009A-2030E; based on BBSR; adjusted for latest census update (4) Rental upside potential defined as the sqm weighted difference between CBRE market rent (as of 28-Feb 2015) and portfolio rent as of 28-Feb 2015 (5) Vacancy upside potential defined as the difference between CBRE market vacancy (Data as of 31-Dec 2013 and published in Dec 2014) and portfolio vacancy levels as of 28-Feb 2015
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% 5.5% 7.2% 3.7% 11.3% 5.0% 5.0% 5.0% 15.9% 3.6% 9.4% 10.5% 9.4% 7.6% 4.0% 1.9% 4.9% 2.2% 1.3% 4.1% 4.8% 17.5% 7.4% 7.5%
# of residential units(1) GAV(2) Household Growth(3)
€m
Rent Upside To Market Rent(4) Vacancy Upside To Market Vacancy(5)
%
32.8% 13.1% 7.4% 44.5% 38.1% 34.9% 22.9% 6.1% 21.0% 15.2% 22.4% 25.4% 7.2% 5.7% 8.1% 6.8% 13.2% 11.9% 12.5% 4.8% 83.7% 22.5% 14.8%
% Ø 20.9% BGP portfolio wide Total # of units: 16,068 Ø 2.1% Germany wide (29.3%)
2
455 192 149 65 41 8 238 83 38 23 15 80 269 73 48 19 19 17 93 130 64 25 41 Total GAV: 1,093 25.5% 68.9% 62.2% 80.0% (0.7%) 46.8% 65.9% 23.7% 74.8% 75.6% 53.7% 66.6% 67.2% 55.0% 55.8% 48.8% 71.6% 64.7% 68.0% 63.3% 24.8% 87.2% Ø 58.5% BGP portfolio wide
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Berlin Area
41.6%
Western Germany
13.2%
─ Cologne
7.6%
─ Münster
3.5%
─ Düsseldorf
2.1%
Northern Germany
10.0%
─ Kiel
6.7%
─ Bremen
1.8%
─ Hannover
1.5%
Southern Germany
10.3%
─ Munich
5.8%
─ Nürnberg
2.3%
─ Karlsruhe
1.3%
─ Ulm
0.9% 75.1%
Approximately 75% of portfolio GAV located in Germany’s top 50 university cities
City
Source: Company information, CBRE Report Student Housing 2014/2015 (1) GAV as of 31-Mar 2015 (2) CBRE Report Student Housing 2014/2015 as of 25-Nov 2014
% GAV(1)
# ‘000 # ‘000 3,375 1,915 1,024 297 594 1,300 240 546 514 2,297 1,388 495 296 118
Total Population(2) Ratio Students / Total Population(2)
- No. of Students(2)
163 179 88 51 39 104 32 32 40 187 109 23 41 14 4.8% 10.9% 8.6% 17.3% 6.6% 9.0% 13.3% 5.8% 7.8% 9.5% 7.9% 4.6% 13.8% 11.9% %
2
Norderstedt Rendsburg Kiel Kappeln
Tailored setup allows for efficient operation and management of the historically spread-out portfolio
Offices located at close proximity to portfolio assets
Asset Management Letting Facility Management Property Management Headquarters
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Nuremberg Kirchseeon Garching Ulm Karlsruhe Dietzenbach Berlin Düren Dortmund Essen Düsseldorf Cologne Bremerhaven Bremen Celle Hanover Emden Ronnenberg Gronau Paderborn Münster
Northern Germany Southern Germany Western Germany Berlin Area
Goettingen Glienicke Munich Verden
GAV < €5m €5m < GAV < €10m €10m < GAV < €50m €50m < GAV < €100m GAV > €100m
Offices Assets Luxembourg (1) Employee figures as of 31-Dec 2014
Integrated residential real estate platform(1) Property Management (PM)
Offices: 10
Employees: 20
Services:
Residential letting for internal and external clients
Offices: 10
Employees: 69
Services:
Rent collection
Maintenance
Side costs
Tenant management
Project management
Property accounting
Locations: 5
Employees: 72
Services:
Janitor service
Winter service
Gardening
Concierge service
Small maintenance services
Asset Management (AM)
Offices: 4
Employees: 26
Services:
Portfolio management
Financing
Asset management
Managing operational companies
BGP Investment (Luxembourg)
Offices: 1
Employees: 7
Services:
Strategic management Proximity allows for quickly being able to adapt to local market developments and needs
3
Letting Facility Management (FM)
BGP’s Rental Price Cockpit has increased letting rents by almost a factor of two compared to the market since 2011
Comments Rental price cockpit The Rental Price Cockpit is a dynamic pricing model
Every quarter all relevant online offers are classified
according to size groups
Property type refurbishment standards and target rents are
adjusted to market developments
Supported an increase in new rents by c.16%(2) in 3 years out-
performing the market
Appropriate pricing improved tenant selection reducing
fluctuation from 12.7%(4) to 11.9%
Residential use rent new lettings Rental price cockpit example(3)
Note: Figures excluding OTTO II (1) ERP defined as Enterprise Resource Planning; i.e. business management software (2) 2011A to 2014A new NCR difference; excluding OTTO II (3) Snapshot Rental Price Cockpit - apartment units from 60m2-75m2 (4) Tenant fluctuation defined as % turnover of tenants by sqm
16
5.2 5.8 5.9 6.1 4.5 5.0 5.5 6.0 6.5 2011A 2012A 2013A 2014A NCR (€/sqm)(2)
+16.4% BGP vs 8.3% Market
Implementation of the Rental Price Cockpit
# offers NCR /€/sqm) 2007 2008 2009 2010 2011 2012 2013 2014 Offers NCR NCR/sqm new lettings
3
Market data Immoscout In place rent ERP(1) Size groups Market segmentation Size groups Positioning Refurbishment standards Development of market rents in size groups Development of target rents
- Excl. OTTO II
Value creation through stringent asset development strategy
Source: Company information (1) Based on classification by company’s management as of 28-Feb 2015 (2) Based on internal assessment of company’s management as of 28-Feb 2015 (3) As of 28-Feb 2015 – Vacancy of residential units excludes OTTO II, units under repositioning and refurbishment and assets held for sale
Portfolio(1) Upside potential(2)
Value creation potential Portfolio cluster % of resi units Vacancy(3) Vacancy reduction potential Rent increase potential Property strategy Portfolio strategy Comments
Vacancy reduction 31% 12.4%
High Moderate to high Remove obstacles of vacancy reduction CAPEX Programme Improve value upside of existing portfolio Significant capex spending budgeted in 2015 to improve occupancy and cash flow portfolio
Rental upside 37% 3.4%
Limited Moderate to high Adjust property and apartment qualities to market requirements Rental Price Cockpit Improve value upside of existing
- portfolio. Invest in
growth markets. Sell in stagnating market and markets without critical mass Additional capex spending to realise upsides
Project development 1% 8.8%
Moderate High Value creation through complete repositioning and additional building rights Project Developments Dependent of ROI/ sell if upside is limited Current project developments are 3 upside potential properties in Berlin and one large development potential in Münster
Stabilised potential disposal and reinvestment 31% 3.0%
Limited Limited Realise rental upsides through Differentiated Housing Products Improve value upside of existing
- portfolio. Invest in
growth markets. Sell in stagnating market and markets without critical mass About one quarter of stabilised properties are under rental caps
- f which most will
expire by 2016 and will then potentially allow for rental upside
Total 100% 6.1%
Reinvestment in project management, vacancy reduction and rental upside properties
3
17
0% 10% 20% 30% Vacancy
Portfolio provides significant potential for organic growth driven by rental reversion and vacancy reduction
0% 15% 30% 45% 60% Rental potential 0% 15% 30% 45% 60% Rental potential 0% 15% 30% 45% 60% Rental potential
GAV split by region(2)
Berlin(1) Western Germany(1) Northern Germany(1)
0% 15% 30% 45% 60% Rental potential 0% 10% 20% 30% Vacancy 2.6% 13.1% 0% 10% 20% 30% Vacancy 8.7% 0% 10% 20% 30% Vacancy 7.4% 8.4% 44.5% 5.3%
Southern Germany(1)
Northern Germany 25% Western Germany 22% Southern Germany 12% Berlin 42% Total: €1,093m
Vacancy reduction strategy Rent reversion strategy
Average weighted rental growth potential of 20.9% in current portfolio
Significant vacancy reduction potential before approaching vacancy levels of peers
4
32.8%
18
Source: Company information, CBRE report
6.1%(1,3) 3.4% 2.2% 2.7% 3.4% 0.5%(4) 6.7% 0% 2% 4% 6% 8% 10% Average: 2.9%
Vacancy upside vs. peers
Source: Company information, for peers latest available reporting
(1) As of 28-Feb 2015 (2) As of 31-Mar 2015 (3) Vacancy of residential units excludes OTTO II, units under repositioning and refurbishment and assets held for sale, as of 28-Feb 2015 (4) Including OTTO II vacancy, as of 28-Feb 2015
Conservative capex spent historically, as company focused on streamlining its core portfolio
Historical capex spent 2012-2014 Capex spent and returns achieved
Historically BGP’s focus was on streamlining the portfolio
Successful transformation into core residential portfolio and strategic disposal of non-core assets
Capex spent in the past very focused on properties with clear upside potential
Demonstrated through significant NRI increases overall
Approximately 12-19% inflation adjusted NRI increase(5)
5 6 6 8 9 14 <1 1 6 <1 1 1 14 16 27
- 5
10 15 20 25 30
2012 2013 2014 Maintenance Modernisation capex Letting capex Otto II
Source: Company information
a
4
19
In €m
Source: Company information
(1) Maintenance: expenditures to maintain rented investment property (2) Modernisation capex: expenditures on planned works (3) Letting capex: expenditures on vacant investment property to increase rent and support the letting process (4) Analysis only takes into consideration capitalised capex spent (5) Ratio in percentage of inflation adjusted NRI increase to prior-year capex spent 2012(4) 2013(4) 2014(4) Capex spent (€m) 8.5 9.6 20.1 Inflation adj. NRI increase (€m) 1.0 2.4 Inflation adj. NRI increase to prior-year capex spent ~12% ~19%
Comments
(1) (2) (3)
6 14 6 <1 27
- 5
10 15 20 25 30 35 40
2014 2015E 2016E 2017E Maintenance Modernisation capex Letting capex Otto II
20
16.5 13.8 17.6 29.1 ~242
…but also maintaining a value enhancing Capex programme
Total capex vs. peers (2014A) Comments Near term capex programme significantly larger than the
average of most other German peers
Portfolio offers significant opportunities to utilise capex in
- rder to enhance shareholder returns
Management team targets a capex budget with minimum
return of 8%
In case of potential upside opportunities, capex can be
increased
~32(2) Source: Company information, for peers their latest reporting (1) Historical and targeted capex spent (2015-2017E targets pre-acquisition) (2) Based on latest total lettable area (1,139,661sqm) from CBRE report as of 31-Mar 2015, based on rent roll as of 28-Feb 2015 Average: 19.3
b
4
Capex and maintenance programme(1)
In €m €/sqm 2014 2015E ~36 ~27 ~22
Repositioning of projects to drive further value
21
4
Upgrade properties Berlin Comments
Repositioning project in separate SPV in preparation
Strategy
Repositioning to increase rents from current to market levels
Measures
Build out roof top
Elevator
Energetic measures
Improvement of floor apartments and floor plant
Repositioning project in separate SPV in preparation
Strategy
Repositioning to increase rents from current to market levels
Measures
Build out roof top
Elevator
Energetic measures
Improvement of floor apartments and floor plant
Repositioning project in separate SPV in preparation
Strategy
Repositioning to increase rents from current to market levels
Measures
Build out roof top
Elevator
Energetic measures
Improvement of floor apartments and floor plant
Address: Warschauer Str. 25 / Kopernikusstr. 6 Address: Warschauer Str. 72 Address: Schönhause Allee 86 / Erich Weinert Str. 2
Germany wide presence allows significant advantage for acquisition
- f small to medium scale portfolios with limited competition
5
22
29% 26% 45% €0m - €100m €100m – €500m > €500m
Aiming to acquire additional portfolios with cost efficiency and vacancy reduction potential and has set a target of 18 months to achieve
BGP targets assets in growing markets that are
Too small for institutional investors and too big tor private investors
Enhance operational footprint / scalability
Show clear upside potential or low pricing
Have assets with up to c.15% vacancy and / or 5-20% inherent rental upside potential
Offer rental yields on actual rents of 6-7%
Locations
Growth cities >100,000 inhabitants and urban regions with positive household development
Asset type
Residential properties with up to 20% commercial
Commercial properties with redevelopment potential into residential/student housing/business apartments
Target deal sizes
Minimum of €5m (if local presence exists) and minimum of €15m (if no presence); maximum c.€50m (80-800 units)
Deutsche Annington Deutsche Wohnen LEG Foncière des Régions ADO
GAV (€bn) 1.1(1) 12.8 10.1 6.0 1.7(2) n.a. Berlin (Berlin, Dresden) North (Hanover, Kiel) South West (Rhine-Main / Rhineland) (NRW) (Rhine-Ruhr) East Focus German wide focus on growth regions German wide Berlin NRW Berlin/NRW Berlin
Acquisition criteria
Management plans to use €250m over the next 3 years for acquisitions
Volume of acquisitions may be increased if opportunities arise and financing available
German residential 2013 transaction volume per portfolio size
BGP vs. other German residential players
Source: Company information, CBRE reports, for peers their latest reporting Source: CBRE report
(1) GAV of BGP Investment as of 31-Mar 2015 (2) GAV of German residential assets
23
BGP completed acquisition of OTTO II portfolio
Portfolio summary
Portfolio spread across 13 cities
The district Schleswig-Flensburg represents c.36% of the lettable area and 30.5% of the total fair value as of 31-Mar 2015
Portfolio fair value of €42m as of 31-Mar 2015
1,301 residential units with a lettable area of 76,490 sqm
€4.0m of NRI(1)
NCR/sqm of €4.8(2)
Vacancy rate of 12.8%(3)
Mainly apartment buildings which were constructed between 1945-1983
Deal summary
Repurchase of debt at discount (through equity)
Portfolio already owned by BGP, but not in control since 2009
External facility and property management to date
Source: Company information, CBRE reports as of 31-Mar 2015 (1) For the year ending 31-Dec 2014 (2) As of 28-Feb 2015; NCR defined as net cold rent (defined as contractually agreed rent payments; additional expenses (e.g. trash collection, water, janitor) and heating costs are not included in NCR (3) Vacancy of residential units as of 28-Feb 2015
Competitive strengths / rationale
Ability to pay cash upfront was a competitive advantage
BGP knew the asset well (having owned it, but not in control since 2009)
Rationale:
Currently high vacancy provides significant upside potential
Limited incremental costs as properties strongly overlap with existing BGP portfolio
Portfolio Location OTTO II
Northern Germany
Norderstedt Rendsburg Kappeln Kiel
5
9.1% 7.5% 5.9% 6.1% 0.4% 0.5% 0.5% 0.5% 9.5% 7.9% 6.4% 6.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2012A 2013A 2014A Feb-2015A
% of residential units
15,106 14,981 14,813 14,767 1,304 1,304 1,304 1,301 16,410 16,258 16,117 16,068 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 2012A 2013A 2014A Feb-2015A
Strong operational track record
Number of residential units
Source: Company information (1) Excl. OTTO II (2) As of 28-Feb 2015 – Vacancy of residential units excludes OTTO II and units under repositioning and refurbishment and assets held for sale (3) Tenant fluctuation defined as % turnover of tenants by units, including OTTO II; better tenant selection has helped decrease this figure
Vacancy development(2)
12.7% 12.7% 11.9% 10.0% 11.0% 12.0% 13.0% 2012A 2013A 2014A
6
Number of units
5.1 5.3 5.4 5.4 5.8 5.9 6.1 6.1
0.0 2.0 4.0 6.0 8.0 10.0
2012A 2013A 2014A Feb-2015A Average in-place rents New rent (of respective year)
Rent development
€ NCR per sqm +7.0% / +4.9%(1)
Tenant fluctuation by units(3)
24
OTTO II 5.9 5.4 5.4 6.0 xx
- Incl. OTTO II
- 3.0 pp
Adjusted vacancy OTTO II impact
~0.2% new lettings in Q1
37.2 11.2 37.2 11.7 39.9 13.8 2.3 2.2 1.7 1.7 2.0 2.1 13 13 16 10 20 30 40 50 Adjusted EBITDA OTTO II FFO I 942 386 976 430 1,043 526 48 10 51 12 44 4 482 58 464 57 133 54 1,472 453 1,492 499 1,220 584 200 400 600 800 1,000 1,200 1,400 1,600 Residential Real Estate Non-Core Portfolio Disposal Group
Key financial highlights
NRI and NRI multiple Adjusted EBITDA(3) & FFO I
73.1% 67.0% 51.9% ~47% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2012A 2013A 2014A Q1 2015
(1) Multiples and growth rate excl. OTTO II (2) 14.6x if calculated from CBRE gross asset value as of 31-Dec 2014 (net of purchasing cost of 7.9%) (3) Adjusted EBITDA is defined as EBITDA adjusted from Net gains / loss on disposal of investment properties, as well as valuation gains from investment property (4) LTV is equal to Net loans over GAV
66.2 68.2 71.6 3.7 3.7 4.0 20 40 60 80 2012A 2013A 2014A 14.2x(1) 14.3x(1) 14.6x(1,2)
GAV & NAV development
2012A 2013A 2014A GAV NAV GAV NAV GAV NAV
6
€m €m
25
Source: Company information Source: Company information Source: Company information
8.1%(1) OTTO II ~(26)% 70.0 72.0 75.5 37.2 11.2 37.2 11.7 39.9 13.8 2.2 2.2 1.8 1.8 2.0 2.0 13.4 13.5 15.9 10 20 30 40 50 Adjusted EBITDA OTTO II FFO I
Source: Company information
€m 2012A 2013A 2014A 39.4 39.0 41.9 13.4 13.5 15.9
LTV(4) development
Current average debt maturity of c.4 years Current average cost of debt of c. 3.4%(1) Entire debt structure based on secured financing of which
c.66% of CMBS financing which is expected to be pre-paid and potentially refinanced through bank market
Monnet CMBS of €386m at issuance will be partly amortised
As of 31-Dec 2014 amounted to €378m
Company remains committed to hedge a significant portion of
its interest costs as it is also the case currently
OTTO II loan has been acquired in February 2015 with a 25%
discount Type of debt(5)
Current financing structure
Comments Structure of debt(5)
Bank loans 34% CMBS debt 66% Variable but hedged and fixed 96% Variable, but capped 4%(6)
6
26
Debt maturity(2,3)
Short-term debt Long-term debt / 386 133 25 41 41 158 100 200 300 400 500 2015 2018 2019 2021
Start date: Sep 2013 Cost of debt: 4.16%(3,4) Start date: Jun 2014 Cost of debt: 2.08% Start date: Jan 2015 Cost of debt: 2.10% Start date: Dec 2014 Cost of debt: 1.95%
In €m
€34m acquisition
- f OTTO II
portfolio loan in early 2015
Source: Company information (1) Weighted average cost of debt as of 31-Dec 2014, Monnet CMBS pro-forma adjusted by 25 bps (step-up effective Jan 2015 onwards), without accounting for the purchase of the OTTO II loan (2) As of 31-Dec 2014, pro-forma the acquisition of OTTO II loan in early 2015 (3) Initial principal amount excluding amortisation (4) Reflecting 25bps step-up from Jan 2015 and onwards (5) As of 31-Dec 2014 (6) €25m variable and only capped at 2.5%
Current outstanding Monnet CMBS: €378m(1)
Cost of financing of c.4.16% (reflecting 25bps step-up from Jan 2015 and onwards)
Expiring in 2018
Option to pre-pay with a penalty:
Before 12 August 2014, 7% of the total outstanding loan amount
After 12 August 2014 but before 12 August 2015, 5% of the total outstanding loan amount
On or after 12 August 2015 but before 12 August 2016, 3% of the total outstanding loan amount
On or after 12 August 2016 but before 12 August 2017, 1% of the total outstanding loan amount
Marked-to-market of swaps: €17.1m(2)
Total breakage costs of refinancing estimated at €28.5m
CMBS pre-payment expected to significantly enhance FFO
CMBS structure today
Source: Company information (1) As of 31-Dec 2014, after amortisation (2) As of 31-Mar 2015 (3) Calculated as the amount of new debt minus estimated value of Monnet CMBS as of Sep 2015 (€377m) minus total breakage costs minus €4m issuance costs
Assuming a 60% LTV of the underlying portfolio (existing Monnet and OTTO II) €442m debt could be raised, delivering €32-33m(3) additional proceeds (net
- f costs)
Expected refinancing in September 2015 could increase FFO by €8.3 - €9.3m, based on the illustrative example presented above
6
27
Illustrative FFO increase (pre-tax)
(€m) Annual interest savings at new cost of debt One time penalty Swap marked- to-market Total breakage costs(3) Repayment date 1.75% 1.90% 2.05% <12/08/2015 9.3 8.7 8.3 18.9 17.1 36.0 12/08/2015< 12/08/2016 9.3 8.7 8.3 11.4 17.1 28.5 12/08/2016< 12/08/2017 9.3 8.7 8.3 3.8 17.1 20.9 >12/08/2017 9.3 8.7 8.3 0.0 17.1 17.1
FFO development
FFO bridge Comments
Adjusted EBITDA margin remained stable at approx. 56% Cash taxes from operations is expected to be very limited
going forward, due to significant tax loss carry forward
Important capex programme is expected to peak in 2015 and
subsequently decrease in 2016
Capex has been partially financed in 2014 by €4.8m capex
line of the CMBS financing
Normalised FFO
Core 2014 Split (€m) 2012 2013 2014 OTTO II Total EBIT 254.6 66.7 83.2 14.7 97.9 (+) correction for D&A 2.5 1.5 14.4 0.1 14.5 EBITDA 257.2 68.2 97.6 14.8 112.3 (-) Asset sales (9.6) (0.8) (2.5) (0.0) (2.5) (-) Revaluation (210.3) (30.2) (55.2) (12.7) (67.9) Adjusted EBITDA 37.2 37.2 39.9 2.0 41.9 (-) Net cash interest (25.6) (25.2) (25.6) 0.0 (25.6) (-) Current income taxes (0.4) (0.4) (0.5) 0.0 (0.5) FFO 1 11.2 11.7 13.8 2.0 15.9 (-) Capitalised maintenance (8.5) (9.6) (20.1) (0.9) (20.9) AFFO 2.7 2.2 (6.2) 1.2 (5.1) 13.8 2.0(1) 8.3-9.3(2) ~1(4) 0.0 10.0 20.0 30.0 40.0 50.0 FFO 2014A OTTO II Monnet refinancing Refinancing closed in 2014 VAT group Platform integration Growth
Source: Company information (1) Based on 2014A FFO contribution (2) Based on the illustrative example laid out on previous slide (3) Company estimate depending on positive outcome of an EU court decision (remaining 51% acquisition of BGP Asset Management GmbH, allowing issuance of invoices without VAT within the group) (4) Company estimate resulting from BGP Asset Management GmbH and its subsidiaries, remaining 51% acquired in December 2014
6
28
€m
(3)
Summary
BGP is a lean but fully integrated real estate platform across attractive micro locations in Germany
29
LTV of ~47% as of 31-Mar 2015 Target LTV of ~50% post add on acquisitions Dividend payout ratio in % of recurring FFO in line with peers Portfolio optimisation Reduction of vacancies and refurbishments Add on developments Firepower for selective bolt-on acquisitions Operational highlights Financial highlights
Appendix
Housing Market in Transition – BGP Prepared to Offer Tailored Solutions
Due to its fully integrated operational platform, BGP can offer differentiated, tailor-made housing solutions. German residential real estate is in transition
Ongoing trend towards living in metropolitan areas Ongoing development towards 1- to 2-person households Energy savings will become a key topic Demand for external services strongly increasing Demographic development/elderly population impact housing needs
Thus, differentiating housing supply taking into account demographic and socioeconomic trends will be key
Housing solutions with external services in metropolitan areas of key importance (food corner, laundry, gym, assisted
living)
Living communities (in particular for elderly people) will further increase as structure of apartments cannot be changed Housing supply for students in metropolitan areas missing
With its in-house platform across Germany, BGP is well equipped to capture growth in the residential housing sector
Vertically integrated property management; letting and facility management platform allows to offer service packages Scalable platform allows for add-on acquisitions with strong synergy potential Regional diversified portfolio allows to invest in most attractive growth regions across Germany
30
Overview of Key Strategic Projects
BGP’s asset management team has a strong track record in implementing value-enhancing strategic projects. The successful turn-around allowed for refinancing of the company. Platform integration as well as the current capex program should drive further profitability and valuation improvements.
Key Strategic Projects Operational turn around 2009-2014 Refinancing 2013-2014 Platform integration 2013-2014 Capex program 2014-2015
Improvement of core processes (refurbishment, repositioning and maintenance, letting, rent collection, side costs) Introduction of Rental Price Cockpit (dynamic pricing model) Improvement of key performance indicators Sale of non core locations and start of sell-down program for condo units Set up of JV with family office(1) (currently in sales process – estimated IRR (BGP) > 100%) c.10,000 units with a CMBS transaction of €406m at c.4% cost of capital in 2013 (Monnet) c.16,00 units at c.2% cost of capital in 2014 (Franz I) c.4,000 units with a bank loan at c.2% cost of capital end of 2014 (Bundaberg) Participation of 28% in facility manager in 2012 Participation of 50% in property manager 2013 Establishment of own letting platform BGP Immobilienservice (first external client acquired in December 2014) Acquisition of outstanding stakes and integration of asset management, property management, facility management into
pan German Pan-German Resi platform
Transfer of all residential units from external property management into internal structure Rollout of FM services in key markets Value-enhancing capex program in 2014 and 2015 to further reduce vacancy levels and uplift asset valuation
31
(1) Otto III
Case Study: Grazer Damm repositioning
32
Source: Company information 50 100 150 200 250 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Mar 2010 May 2010 Jul 2010 Sep 2010 Nov 2010 Jan 2011 Mar 2011 May 2011 Jul 2011 Sep 2011 Nov 2011 Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 rent/m² new lettings modernisation / m²
Status quo
Former occupation with high percentage of subsidized tenants
Measures
Unit by unit refurbishment including new bath rooms
Step by step refurbishment of staircases, façade and gardens and
- pen spaces by “integrated” facility manager
Renovation to barrier reduced apartments for ground floor units
With decreasing vacancy increasing CAPEX spending as more difficult apartments are renovated
Result: positioning as core property
Re-letting at higher level to tenants from middle class (new letting 50% above in-place rents) gradually adapted with rental development
As of December 31, 2014 split (€m) 2012 2013 2014 Resi Core OTTO II GRI 100.2 104.4 108.3 101.7 6.6 Services charges (30.2) (32.4) (32.8) (30.1) (2.6) NRI 70.0 72.0 75.5 71.6 4.0 Other expenses related to investment properties (29.0) (30.1) (28.0) (26.3) (1.8) NOI 41.0 41.9 47.5 45.3 2.2 Other operating income 1.6 3.5 2.3 2.2 0.1 Other operating expenses (5.9) (7.9) (22.3) (22.0) (0.3) Gain / loss on portfolio disposal 9.6 0.8 2.5 2.5 0.0 Revaluation 209.9 29.4 67.9 55.2 12.7 EBIT 256.3 67.7 97.9 83.2 14.7
Historic P&L
P&L Comments
Source: Company information
33
Revenue from investment properties
increased in 2014, primarily due to the increase in rental income
Reduction in Expenses related to
investment properties mainly driven by decreasing vacancy
Corporate and other operating expenses
increased in 2014, principally due to goodwill impairment of €11m from the purchase of BGP Asset Management
Net gains on disposals increased to €2.5m
in 2014 primarily due to gains on the sale
- f a property in Berlin
Net rental income increased by €3.6m,
driven by higher new rents achieved via the Rental Price Cockpit and a decrease in vacancy in 2014
As of 31-Dec 2014 split (€m) 2012 2013 2014 Resi Core OTTO II EBIT 256.3 67.7 97.9 83.2 14.7 Finance income 0.1 0.1 0.1 0.0 0.0 Finance costs (63.9) (60.9) (57.6) (55.9) (1.7) Net gains on derivatives 9.1 15.2 4.8 4.8 0.0 Net finance expenses (54.7) (45.6) (52.8) (51.0) (1.7) Share of result from associates (21.4) 18.2 (35.7) (35.7) 0.0 Profit before tax from continuing
- perations
180.2 40.3 9.4 (3.5) 13.0 Current income tax (0.9) (0.2) 1.2 1.2 (0.0) Deferred income tax (34.3) (6.1) (5.3) (5.5) 0.1 Profit for the period from continuing
- perations
145.0 34.0 5.3 (7.8) 13.1 Profit/ (loss) after tax for the period from discontinued operations (5.3) 16.8 50.2 50.2 0.0 Profit 139.7 50.8 55.5 42.4 13.1
Historic P&L (cont’d)
P&L Comments
Source: Company information (1) including also others non-core
34
In 2014, net gain on derivates only
includes the reversal of past fair value liabilities
Net finance expenses increased in 2014,
mainly due to a decrease in net gains on swap contracts valuation
Net finance expenses in 2014 include
€1.8m of issuance costs’ amortization
Result from associates includes 49% stake
in the asset management platform, the share of result in non core activities and impairment of the full investment value in a retail portfolio financed in Swiss Francs
Income tax expenses remain low as non-
recognised accumulated loss carry forward is partially compensating valuation gains
Current income tax changed from a tax
payment in 2013 to a gain of €1.2m in 2014 mainly as the result of an over- estimated tax liability
Profit from disc. operations increased in
2014, driven by the sale of the Group's logistic activities
As of 31-Dec Consolidated statement of financial position data (€m) 2012 2013 2014 Assets Tangible assets 1,322.9 1,124.6 1,084.7 Investment in associates 64.7 82.9 37.4 Goodwill
- 4.6
Financial instruments held to maturity
- 20.4
20.4 Other non current assets 3.7 2.4 1.3 Total non-current assets 1,391.3 1,230.3 1,148.4 Tenants receivables 2.9 1.9 2.4 Other current assets 23.1 28.8 59.1 Cash and cash equivalents 38.5 34.8 50.1 Total current assets 64.5 65.5 111.5 Assets classified as held for sale 87.8 313.1 98.0 Total assets 1,543.6 1,608.9 1,357.9 Equity Total capital reserves attributable to the owners of the parent (550.0) (499.3) (444.2) Non-controlling interests (0.3) (0.2) 0.2 Total equity (550.3) (499.5) (444.0) Liabilities Loans from banks and institutional investors 311.6 516.7 566.0 Loans from related parties 728.9 728.6 728.4 Interest on loans from related parties 200.4 231.9 260.7 Finance lease 2.6 0.0 0.0 Derivative financial instruments 47.1 5.2 0.0 Deferred tax liabilities 27.5 33.7 39.0 Other non-current liabilities
- 20.4
20.4 Total non-current liabilities 1,318.3 1,536.5 1,614.5 Loans from banks and institutional investors 663.1 197.4 37.9 Finance lease 0.0 0.0 0.0 Accrued interest payable to banks 6.3 8.1 8.3 Accounts payable and accrued expenses 39.6 25.5 62.0 Income taxes payable 1.3 1.1 0.5 Total current liabilities 710.4 232.2 108.7 Liabilities directly associated with the assets classified as held for sale 65.3 339.7 78.8 Total liabilities 2,093.9 2,108.4 1,801.9 Total equity and liabilities 1,543.6 1,608.9 1,357.9
Historic balance sheet
Balance sheet Comments
35
Source: Company information (1) BGP Holdings Europe S.à r.l. became substitute lender replacing the retiring lender, GPT RE Limited, to the Preferred Loan concluded by the Company and GPT RE Limited in June 2005 for an amount up to AUD 1,020,000,000. As at December 2014 the principal of that loan amounts to 986,905,213 (no change since 1 January 2012)
In order to meet the retention requirement,
the company holds €20.4m of class D notes issued by Monnet Finance Limited
As of 5-May, 2015, all assets held for sale
are sold, except one retail portfolio valued at €44m
Loans from related parties include
primarily the Preferred Loan (granted by BGP Holdings Europe1)
Loans from banks and institutional
investors include the CMBS, and loans from Berliner Volksbanken and the Berlin Hyp finance facility
Cash taxes from operations is expected to
be very low going forward, due to significant tax loss carry forward
End of 2014, associates include two retail
portfolios and a minority stake in one residential portfolio
As of 31-Dec 2014 (€m) 2012 2013 2014
- Cont. Discont.
Operating activities Profit/(loss) before tax from continuing operations 180.2 40.3 9.4 9.4 0.0 Profit /(loss) before tax from discontinued operations (5.5) 17.3 50.3 0.0 50.3 Profit/(loss) before tax 174.7 57.6 59.7 9.4 50.3 Adjustments to reconcile profit before tax to net cash flows: Fair value adjustments of investment properties (194.1) (25.5) (69.6) (67.9) (1.7) Fair value adjustments of derivative financial instruments (12.2) (26.9) (10.4) (4.8) (5.6) Amortization and impairment
- 14.4
14.4 0.0 Net finance expenses 86.1 80.8 65.5 57.6 8.0 Share of result of associates 21.4 (18.2) 35.7 35.7 0.0 Gain on disposal of investment properties (9.7) (2.4) (50.1) (2.7) (47.4) Change in working capital (1.2) (23.7) (10.4) 1.1 (11.5) Tax paid (0.4) (3.2) (0.2) (0.1) (0.1) Net cash flows from operating activities 64.7 38.6 34.6 42.6 (8.1) Investing activities Capital expenditure on investment properties (12.8) (6.9) (21.0) (20.9) (0.1) Proceeds from disposal of investment properties 26.8 22.1 102.9 11.0 91.9 Acquisition of a subsidiary, net of cash acquired
- (15.6)
(15.6) 0.0 Proceeds from associates 0.0 0.0 8.1 8.1 0.0 Interest received 0.2 0.2 0.1 0.1 0.0 Net cash flows from investing activities 14.1 15.4 74.4 (17.4) 91.8 Financing activities Repayments of borrowings (38.1) (386.3) (275.3) (208.8) (66.5) Proceeds from borrowings
- 387.0
199.2 199.2 0.0 Transfer from continued to discontinued 0.0 0.0 0.0 25.3 (25.3) Interest paid and other (48.5) (46.0) (32.6) (24.8) (7.8) Net cash flows used in financing activities (86.6) (45.2) (108.7) (9.1) (99.6) Net increase/(decrease) in cash and cash equivalents (7.7) 8.8 0.3 16.2 (15.9) Cash and cash equivalents at the beginning of the year 48.7 41.0 49.8 30.0 19.7 Cash and cash equivalents at the end of the year 41.0 49.8 50.1 46.2 3.9
Historic cash flow statement
Cash flow statement Comments
Source: Company information
36
In 2014, net cash flows from operating
activities was €34.6m compared to €38.6m in 2013, mainly as a result of the restructuring of the portfolio and the integration of the management platform
Net finance expenses comprises the net of
finance income, finance costs and net gains on derivatives
Finance costs includes interest on bank
loans, swap payments, amortization of capitalized finance costs, net foreign currency exchange losses and other finance costs. Net gains on derivatives relate to gains on the Group's interest rate swap contracts.
Change in working capital is highly
influenced by the sale of discontinued activities and service charges
Repayment of borrowings include €66m
repayment upon sale of discontinued assets and the refinancing from Franz 1 and Bundaberg