INVESTOR PRESENTATION October 2019
RENDERING. SILK DISTRICT, IASI, ROMANIA
TABLE OF CONTENTS History of Prime Kapital and MAS relationship 4 Prime Kapital business model 5 Prime Kapital team 6 Prime Kapital business tools 7 Development JV structure 8 Development JV – MAS' participation in profjts 9 Development JV pipeline and MAS' estimated future participation 10 Investment JV structure 11 Investment JV results 13 IJV contribution to MAS' combined net rental income and corporate cost savings per share 14 IJV contribution to MAS' NAV per share after expected revaluation gains 15 MAS redeployment strategy — Assets 16 MAS redeployment strategy — Equity & Liabilities 17 Prime Kapital perspective 18
History of Prime Kapital and MAS relationship 4 2015 2016 2017 2018 2019 ⊲ Prime Kapital capitalised and ⊲ February ⊲ March: €128m cap raising ⊲ January ⊲ February founded by Martin Slabbert » DJV with MAS ⊲ May » Morne Wilken » Acquisition of the and Victor Semionov to appointed as CEO value centres portfolio » €30m/€20m ordinary » Acquisition of Galleria focus on developments developed in the DJV share participation Portfolio (Bulgaria) » MAS shifts strategy to two ⊲ Approached by (Romania) for €108m for €62m pillars: WE German retail » €200m preference share various investors: investment alongside CEE ⊲ April commitment ⊲ June » Advantage: more scale Prime Kapital partnership » Werner Behrens ⊲ April: €38m cap raising » Lukas Nakos announces » Disadvantage: additional ⊲ July appointed as CEO intention to resign as CEO ⊲ July: €32m cap raising work and disproportional » Acquisition of Militari ⊲ May ⊲ July ⊲ October: joint MAS - Prime higher risk required Shopping (Romania) » MAS change in strategy Kapital strategy » Additional €100m for better returns for €95m to WE divestment roadshow commitment to DJV ⊲ October in favour of CEE and extension of ⊲ November: exclusivity until 2021 » Morne Wilken » Additional €120m » IJV with MAS resigns as CEO commitment to DJV ⊲ September: €127m cap raising » Acquisition of Nova Park and extension of » Paul Osbourn ⊲ November: €159m cap raising (Poland) for €88m exclusivity until 2025 appointed as CFO » Option MOU on Prime » Malcolm Levy Kapital AMP appointed interim CEO ⊲ August ⊲ December » Option agreement fails » Acquisition of Atrium Mall (Romania) for €40m ⊲ September » Sale of AMP to MAS subject to shareholder approval
Prime Kapital business model 5 Vertically integrated developer with a team of over 200 professionals covering the entire value-creation chain from permitting, project design and construction to leasing, sales, property and asset management. DESIGN ASSET MANAGEMENT COST CONTROL Close control over the entire development process ♦ PROCUREMENT PROPERTY MANAGEMENT Cost optimisation ♦ Consistency across all projects in design, standards, execution and operation ♦ Synergies from integrated multidisciplinary approach ♦ AFTER-SALES SERVICE CONSTRUCTION Swift response to changes in market or project / property specifjc circumstances FLEXASSIST LEASING SALES
Prime Kapital team 6 CONSTRUCTION MANAGEMENT 83 Project managers 7 Site managers (construction managers, quality & quantity surveyors, health & safety specialists, tenant coordinators) 30 Design managers (architectural, structural, mechanical, electrical engineers) 25 Cost managers (cost controllers, procurement, contract management specialists) 15 Construction assistants (document controllers & support) 6 RESIDENTIAL 9 Director 1 Sales specialists 5 Marketing specialists 1 Residential assistants 2 ASSET & PROPERTY MANAGEMENT 101 Asset managers 5 Centre managers 10 Facility managers 15 Property accountants (bookkeeping, collection, controlling, HR specialists) 33 Property assistants 6 Marketing specialists 11 ASSET & PROPERTY Leasing specialists (including leasing lawyers) 12 MANAGEMENT PLATFORM Maintenance personnel 9 (AMP) CORPORATE 22 Operational managers (company secretary, capital markets & debt fjnance specialists) 3 Corporate lawyers (acquisition, debt fjnance & property specialists) 5 Analysts 3 Financial managers (reporting, treasury, tax, budgeting & internal audit specialists) 6 Administrative personnel (IT specialists & support personnel) 5
Prime Kapital business tools 7 Prime Kapital employs a team of Business Intelligence (BI) specialists that has developed and maintains proprietary business tools supporting development and asset management. Malls database Multi-point analytical tool enabling in-depth synchronised assessment of multiple acquisition and development targets, by employing: ⊲ Detailed data on shopping centres in the region (over 3 million m 2 of GLA); ⊲ Exhaustive data points on development costs of existing/planned assets in the region (over 20 individual assets); ⊲ Proprietary analytical tools and assessment methods to enable in-depth understanding of potential targets including, but not limited to, tenant performance analysis, cross-country lease analysis, construction budget benchmarking. Macroeconomic analysis tool Proprietary tool pack designed for cross-analysis of complex macroeconomic datasets to aid identifjcation and selection of target development/acquisition locations, by way of: ⊲ Extensive analysis of the target catchment area and comparable stock in the region (upwards of 70 difgerent locations across the region); ⊲ Detailed historical macroeconomic information on inhabitants of individual targets and regions, population trends and fmuctuations in purchasing power; ⊲ Monitoring of indicators of the local economy. Macroeconomic prediction tool ⊲ Tool embedded into the forecast process of owned assets and potential acquisitions used to determine expected tenant turnovers across assets; ⊲ The analysis provides detailed information on tenant sales forecast across the existing portfolio as well as potential acquisition targets; ⊲ Extensive knowledge about the trading patterns of the assets is determined by employing a broad range of historical data on individual consumption, combined with analysis of consumer basket evolution; ⊲ The growth rates generated above are back-tested using historical data, as well as benchmarked across the extensive database.
Development JV structure 8 MAS invested equity, provides preference share capital Prime Kapital invested equity, identifjes development and makes no further contribution to the JV opportunities and provides all of the construction, development and management services on an exclusive basis to the JV 40% EQUITY 60% EQUITY €20m €30m Development JV €420m 7.5% coupon preference shares commitment, of which €170m drawn to date
Development JV – MAS' participation in profjts 9 Based on the current pipeline and feasibilities, the combination of preference share capital and a 40% equity stake in the JV projects should result in a 26% profjt on cost in respect of commercial projects and 24% in respect of residential projects for MAS. MAS realised a 30% profjt on project cost to date on completed projects. 100% 90% 80% 70% MAS' share of total development profjt 60% (including preference share dividends) MAS' profjt on project cost excluding preference 50% share dividends Net preference share dividends MAS' returns on completed pipeline 40% (profit on project cost 30%; average YoC 11.7%) MAS' expected returns on current commercial 30% pipeline (profit on project cost 26%; average YoC 10%) 20% MAS' expected returns on current residential pipeline (profit on project cost 24%) 10% 0 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% Project yield on cost Note: Profit on project cost means MAS' share of the development profit divided by total project costs and is calculated assuming an average exit yield of 6.75% for commercial projects and an average project time to completion 1.25 years.
Development JV pipeline and MAS' estimated future participation 10 To date €69.2m was developed (at cost), which delivered €20m in development profjts to MAS. The remaining pipeline of €781.7 (at cost) is estimated to deliver €192m in development profjts to MAS over the next ~5 years. €250m Development profjt (including preference share dividends) €200m €150m €82m Preference share dividends MAS' share of development profjt (net of preference share €100m dividends) €50m €130m €7m €13m 0 Inception 28 February 2019 ~2024 (sale of completed pipeline)
Investment JV structure 11 Participation loan * 80% 20% Investment JV * Interest on participation loan is determined as the weighted average interest paid by the Group on all third-party fjnancings.
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