RESULTS PRESENTATION Six-months ended 31 December 2016 Nova Park, - - PowerPoint PPT Presentation

MAS REAL ESTATE INC

RESULTS PRESENTATION

Six-months ended 31 December 2016

Nova Park, Gorzow, Poland Nova Park, Gorzow, Poland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 2

Nova Park, Poland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 3

TABLE OF CONTENTS

1. Company profile

• 2. Distribution
• 3. Other metrics
• 4. Portfolio in figures
• 5. Recent additions to portfolio
• 6. Pipeline

7. Capital management

• 8. Outlook
• 9. Appendices
• Management accounts

Munich property, Germany Edeka portfolio MIHA, Germany

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 4

COMPANY PROFILE

PROPERTY INVESTOR, DEVELOPER AND OPERATOR

MAS Real Estate Inc (“MAS”) is a commercial property investor, developer and operator listed

• n the main board of the Johannesburg Stock Exchange (“JSE”) and the Euro-MTF market of

the Luxembourg Stock Exchange (“LuxSE”).

BUSINESS STRATEGY

MAS’ strategy is to generate sustainable and growing distributable earnings per share by acquiring, developing and operating retail, office, industrial, logistics and hotel assets in western Europe and central and eastern Europe (“CEE”). Where exceptional opportunities arise, the group will embark on mixed-use or residential developments with the view to either generate recurring income, or capital gains. The company aims to distribute all of its distributable earnings on a semi-annual basis, with distribution of capital and other profits at the discretion

• f the directors.

MANAGEMENT

MAS is internally managed, combining investment, development and asset management skills. Developments are undertaken both directly and by teaming up with strong developers that have intimate knowledge of the local markets and by agreeing terms that lead to a strong alignment of interests.

FUNDING

MAS is targeting a long-term aggregate portfolio LTV of 40%. This may fluctuate up to a maximum of 50% on a temporary basis as the portfolio grows. Long-term debt funding is preferred and interest rates are managed through the group’s hedging strategy. Developments are generally funded through equity and refinanced at completion.

LONG-TERM INCOME FROM STRONG COVENANTS

MAS has assembled a high quality portfolio of commercial property and developments across western Europe and is currently expanding into CEE in two joint ventures with Prime Kapital, a development joint venture and a co-investment joint venture focused on income-generating

• assets. At 31 December 2016 the portfolio had an outstanding weighted average lease term of

11,1 years, occupied by tenants with strong corporate covenants.

€m 406.4 15.7 44.3 €m 15.7 6.4 4.7 1.2

€28.01

million

GEOGRAPHIC PROFILE BY PASSING RENT

Retail Industrial/logistics Hotel

€28.01

million

SEGMENT PROFILE BY PASSING RENT

€m 19.5 4.9 3.6 Income-generating Developments Land bank

€466.4

million

SEGMENT PROFILE BY VALUE

1 Includes turnover linked rent (Nova Park) of €0,24m

Germany UK Poland Switzerland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 5

Adagio, New Waverley, Scotland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 6

0.60 1.15 2.27 2.66 1.24 2.20 2.23 3.19 1 0.0 2.0 4.0 6.0 8.0 10.0 12.0 2014 2015 2016 2017 2018 2019 Euro cents DISTRIBUTION PER SHARE Target distribution per share H2 distribution per share H1 distribution per share 5.85 1 4.50 3.35 1.84

+82%

+34% +30% 7.61 1 9.89 1 +30% +30%

1 Based on the assumption that a stable macro-economic environment will prevail, that no major corporate failures will occur and that the

investments and developments reported on above will progress in accordance with expectations. This forecast has not been reviewed or reported on by MAS’ auditors.

DISTRIBUTION

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 7

OTHER METRICS

310 410 467 569 200 250 300 350 400 450 500 550 600 2014 2015 2016 H1 2017 Euro million TOTAL ASSETS1

1 Data extracted from management accounts

65 249 312 466 50 100 150 200 250 300 350 400 450 500 2014 2015 2016 H1 2017 Euro million INVESTMENT PROPERTY1 1 41 76 124 20 40 60 80 100 120 140 2014 2015 2016 H1 2017 Thousands of shares MEDIAN DAILY SHARE VOLUME 16 5 12 25 5 10 15 20 25 30 2014 2015 2016 H1 2017 Percentage LOAN TO VALUE1

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 8

PORTFOLIO IN FIGURES

56% 23% 17% 4% Germany UK Poland Switzerland

€28.01 million

GEOGRAPHIC PROFILE BY PASSING RENT

UK

Edinburgh Office

GERMANY

London Office Frankfurt Office

SWITZERLAND

Prime Kapital Office Isle of Man Headquarters

ROMANIA

4 1 8 1

POLAND SLOVENIA

1

Number of development properties Number of income-generating properties

2 37

1 Includes turnover linked rent (Nova Park) of €0,24m

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 9

PORTFOLIO IN FIGURES

15.2 17.3 28.0 0.9 1.4 3.9 4.71 0.2

10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0

Passing rent 31 Dec 2015 Passing rent 30 Jun 2016 Munich Adagio (exc retail) Edeka MIHA portfolio Nova Park Impact of fx Passing rent 31 Dec 20161

Euro million

PASSING RENT BRIDGE

Total Add Less

+61.8% 70% 17% 13% Retail Industrial/Logistics Hotel

€28.01 million

SECTOR PROFILE BY PASSING RENT

1 Includes turnover linked rent (Nova Park) of €0,24m

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 10

Adagio, New Waverley, Scotland The Arches, New Waverley, in context, Edinburgh

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 11

RECENT ADDITIONS TO THE PORTFOLIO

EDEKA MIHA

Acquired August 2016 Tenant Edeka Passing rent €3.96m WALT 14.4 years A portfolio of 20 retail units based in Germany let on long- term leases to Edeka. The Edeka Group is the largest German supermarket corporation, holding a market share of approximately 26% in Germany and operating 4,100 stores under the Edeka brand. These portfolios were acquired because of the strong income generated and ability to refinance at exceptionally low rates, as well as the key locations of the stores in the surrounding area.

MUNICH PROPERTY

Acquired August 2016 Tenant Volkswagen Passing rent €0.89m WALT 2.0 years A logistics property located in Munich, Germany, let to Volkswagen AG, the leading German auto manufacturer. This property was acquired for its strategic location, asset management opportunities, and in time, it’s potential redevelopment.

Lehrte property, Germany Premier Inn, new Waverley Edeka store, Germany Munich property, Germany

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 12

RECENT ADDITIONS TO THE PORTFOLIO

NOVA PARK

Acquired December 2016 Tenant Multiple retail Passing rent1 €4.66m 2 WALT 4.5 years A dominant regional mall situated in Gorzów, Poland. Nova Park has a diversified mix of high quality tenants including international and national brands Bershka, C&A, CCC, Cropp Town, Deichman, Douglas, Empik, H&M, Intersport, KFC, Media Expert, Mohito, New Yorker, Piotr i Pavel, Pull&Bear, Pure Fitness, Reserved, Rossmann, Sephora, Sinsay, Smyk, Stradivarius and Super-Pharm.

Edeka store, Germany Munich property, Germany Nova Park, Poland

1 MAS’ share of passing rent 2 Includes turnover linked rent of €0,24m

ADAGIO APARTHOTEL

Completed December 2016 Tenant Adagio UK Passing rent €1.44m (excluding turnover rent) WALT 19.9 years A 146 room aparthotel pre-let to Adagio, and guaranteed by both Accor and Pierre & Vacances, with frontage directly onto the Royal Mile, Edinburgh, together with a further 5 retail units. The development completed and has handed over to the tenant in late 2016. More information available at www.newwaverley.com

Adagio Aparthotel, New Waverley, Scotland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 13

PIPELINE – WESTERN EUROPE

PHASE II NEW WAVERLEY - OFFICE

Completion FY2019E

Phase I of the New Waverley development delivered three hotels and twenty two new retail units. Phase II is now set to deliver a significant mix of new office, retail and residential uses. The group has been chosen as development partner to deliver approximately 19 000 square metres of Grade A office space on a pre-let to a significant tenant, and is now in the process of finalising detailed design and leasing agreements. The tenant will have an option to occupy an additional (up to) 3 000 square metres of further office space which would be delivered adjacent to the first proposed

• ffice building.

Construction is set to begin in March 2017 for completion in mid-2019. Phase II, New Waverley Phase II New Waverley, Scotland

PHASE II NEW WAVERLEY - RESIDENTIAL

Completion FY2019E

Pre-letting discussions for the balance of the site are also underway to residential sector occupiers and investors. Discussions are underway with city planners regarding various options. Attractive development and investment funding is being negotiated to fund the delivery of this next phase of development. Phase II New Waverley, Scotland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 14

PIPELINE – CENTRAL AND EASTERN EUROPE (Prime Kapital Development JV)

EMONIKA

Lehrte property, Germany Premier Inn, new Waverley Edeka store, Germany Munich property, Germany

• Large-scale development project in the heart of Slovenia’s

capital Ljubljana in partnership with the Slovenian Railways, the Republic

• f Slovenia and the city of Ljubljana.
• 59 000 square metre gross lettable area (“GLA”) mall and 21 000 square

metre GLA of A-grade offices and a hotel in addition to the development

• f public logistic infrastructure.
• Catchment area of approximately 305 000 and 560 000 within 15 and 30

minute drives respectively.

• Slovenia benefits from significantly higher per capita purchasing power

than other CEE countries and yet Ljubljana lacks a large modern and centrally located mall.

• Emonika benefits from a prominent and highly visible central location.
• A retail value centre development in Ploiesti, Romania.
• 25 600 square metre GLA retail value centre with a high concentration
• f anchor tenants.
• Ploiesti, with 210 000 inhabitants and the capital of Prahova county, is

placed centrally in the larger urban agglomeration north of Bucharest that is home to a population of approximately 750 000.

• The property benefits from a catchment of 96 000 residents within

walking distance and 565 000 residents within a 30 minute drive.

• Major anchor tenants have already expressed a strong interest in the

project and consideration is being given to expanding the planned scheme.

PLOIESTI

Emonika, Slovenia Ploiesti, Romania Emonika, Ljubljana, Slovenia

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 15

PIPELINE – CENTRAL AND EASTERN EUROPE (Prime Kapital Development JV)

BALOTESTI

• A value centre development in Balotesti, Romania.
• The development will be integrated with Hornbach and the new planned

Lidl on the adjacent sites, extending the combined 18 000 square meters GLA of these two operators by an additional 28 000 square metres of GLA in the first phase, with a substantial further extension to be developed at a later stage.

• Catchment analysis indicates a population of 85 000 and 137 000,

respectively, within 15 and 30 minute drives.

• Balotesti, a rapidly developing affluent residential area, is approximately

25 km north of Bucharest.

• Tenant negotiations are progressing well and include discussions with

two international hypermarket groups, as well as various international fashion and other discounters.

• Development of five convenience value extensions in various cities cross

Romania.

• 20 000 square metres GLA of convenience value extensions to be

integrated with the existing Kaufland mini-hypermarkets.

• Kaufland is the leading food retailer in Romania, with more than 100 well

located owned and operated stores generating over €2.2 billion in annual sales.

• Approximately 70% of the planned extensions have been pre-leased to

tenants including Deichmann, Jysk, Noriel and Pepco.

• The first three of these developments are expected to complete in 2017.

KAUFLAND

Kaufland value centre, Romania Balotesti, Romania

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 16

PIPELINE

• 190

>50 282 150

• 50

100 150 200 250 300 Income-generating Development

Euro million

Further pipeline Secured Committed

31 December 2016

53% 28% 19% PK Development JV PK Investment JV

• W. European Developments

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 17

CAPITAL MANAGEMENT

Optimising the group’s sources of funding is one of the group’s key strategic objectives. FUNDING STATEMENT

70% 26% 4% EUR GBP CHF

€231.2 million1

€m m Cash (excluding development JV) 31.12.2016 20.8 Further funding anticipated:

• Debt to be drawn against portfolio

109.5

• VAT receivable Nova Park

20.3 TO TOTAL AL 150 150.6 .6

DEBT

340 360 380

30 Jun 2016 Capital raise Scrip distribution reinvestment 31 Dec 2016

Million

SHARES IN ISSUE

1 Includes NCI share of Nova Park debt

EQUITY

Funding Funding

Debt Debt (€m) m) Cos Cost t Term Term (years (years) ) Drawn 121.7 2.40% 8.7 Committed 53.01 2.05% 5 Negotiated 56.5 <2.50% +4 Total Total 231.2 231.2 Less NCI (10.8) 220 220.4 .4

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 18

OUTLOOK

• MAS is well positioned to deliver a sustained

period of significant growth in earnings and distributions on the back of:

• A strong internally managed platform that

can take on the management of significant further assets

• Significant capital committed alongside our

experienced partners Prime Kapital

• A focus on income-generating investment

property and developments, which should deliver the optimal returns from our capital base in markets with strong growth potential

• Balance sheet optimisation and efficient

capital management

Phase I New Waverley, Scotland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 19

New Waverley, Edinburgh, UK

MAS REAL ESTATE INC

APPENDICES

Phase I New Waverley, Scotland

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 20

MANAGEMENT ACCOUNTS > INCOME STATEMENT

Six-month period ended Six-month period ended Year ended 31 December 2016 31 December 2015 30 June 2016 € € € Rental income 10 959 343 6 586 450 14 203 699 Net service charges and property operating expenses (899 648) (1 064 227) (1 989 426) Service charge income and other recoveries 1 508 587 841 651 2 047 322 Service charges and other property operating expenses (2 408 235) (1 905 878) (4 036 748) Net rental income Net rental income 10 05 10 059 6 9 695 5 5 5 5 522 223 22 223 12 214 273 Other income

• 1 717 829

Corporate expenses (1 895 966) (1 740 285) (3 203 472) Net oper Net operating income ting income 8 16 8 163 7 3 729 29 3 7 3 781 9 81 938 38 10 728 630 Net finance costs (669 627) 15 184 (355 990) Finance income 114 179 318 713 433 132 Finance costs (1 011 661) (303 529) (817 928) Interest capitalised on development and land bank property 227 855

• 28 806

Current taxation (424 496) (644 799) (684 749) Direct inves Direct investment result tment result 7 06 7 069 606 9 606 3 15 3 152 323 2 323 9 68 9 687 8 7 891 91 Fair value adjustments (4 303 482) 2 378 038 6 431 719 Investment expenses (183 040) (1 130 028) (2 202 144) Other income

• 637 552

Exchange differences (2 904 171) (3 053 676) (12 913 210) Deferred taxation (76 462)

• (143 776)

Indirect inves Indirect investment result tment result (7 46 (7 467 155) 7 155) (1 805 666) (1 805 666) (8 18 (8 189 85 9 859) 9) IFRS net profit (direct plus indirect result) IFRS net profit (direct plus indirect result) (3 (397 54 7 549) 9) 1 346 65 1 346 657 7 1 4 1 498 0 98 032 32

For the year ended 31 December 2016

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 21

DISTRIBUTABLE EARNINGS

Six-month period ended Six-month period ended Year ended 31 December 2016 31 December 2015 30 June 2016 € € € Direct investment result 7 069 606 3 152 323 9 687 891 Other specific adjustments 1 372 699 (844 123)1 1 698 750 Adjustment relating to shares issued during period 188 987 31 425 1 568 915 Distributable earnings 8 631 292 2 339 625 12 955 556 Distribution from reserves 1 492 238 4 355 077 2 750 000 Total distribution 10 123 530 6 694 702 15 705 556 Closing number of shares 380 583 836 294 455 630 348 625 219 Final distribution (euro cents per share)

• 2.23

Interim distribution (euro cents per share) 2.66 2.27 2.27 Total distribution (euro cents per share) 2.66 2.27 4.50

For the year ended 31 December 2016

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 22

MANAGEMENT ACCOUNTS > FINANCIAL POSITION

As at As at As at 31 December 2016 31 December 2015 30 June 2016 € € € Investment property 466 391 848 275 863 118 311 613 772 Income-generating property 406 437 212 169 911 602 242 625 172 Development property 15 665 601 59 081 009 24 907 797 Land bank 44 289 035 46 870 507 44 080 803 Financial investments 21 875 305 50 232 879 51 614 068 Intangible assets 24 499 280 28 449 119 25 262 818 Deferred taxation asset 1 047 599 908 482 721 292 Trade and other receivables 23 174 544 5 118 880 11 313 808 Other assets 230 277 19 233 763 241 083 Cash and cash equivalents 32 210 809 31 997 044 66 946 902 Total as Total assets sets 56 569 429 662 9 429 662 411 80 11 803 285 3 285 46 467 7 7 713 7 13 743 43 Shareholders’ equity Shareholders’ equity 428 912 3 428 912 350 50 348 408 56 348 408 569 9 400 844 9 400 844 952 2 Interest bearing borrowings 121 744 597 14 971 478 44 578 595 Financial instruments 7 531 949 41 684 646 12 543 033 Deferred taxation liability 1 652 903 1 430 625 1 242 741 Trade and other payables 9 470 469 5 215 677 8 405 586 Other liabilities 117 394 92 290 98 836 Total liabilities Total liabilities 140 517 312 140 517 312 63 3 3 394 7 94 716 16 66 868 7 66 868 791 91 Total shareholders’ equity and liabilities Total shareholders’ equity and liabilities 56 569 429 662 9 429 662 411 80 11 803 285 3 285 46 467 7 7 713 7 13 743 43 Actual number of ordinary shares in issue 380 583 836 294 455 630 348 625 219 NAV per share (euro cents) 112.7 118.3 115.0 Adjusted NAV per share (euro cents)* 112.9 118.5 115.1 *Net asset value per share as adjusted for deferred tax

As at 31 December 2016

MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 23

DISCLAIMER

This document does not constitute an offer for securities or other interests in MAS Real Estate Inc., nor does it purport to solicit offers to subscribe for securities or interests in MAS Real Estate Inc. This document does not constitute an offer for the sale of or subscription for, or the solicitation of an offer to buy and subscribe for, securities to the public as defined in the South African Companies Act, No. 71 of 2008 (as amended or otherwise) and must not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of Chapter 4 of the said Act. This document does not constitute an offer of securities to the public in the United Kingdom. This communication is directed only at (i) persons who are

• utside the United Kingdom or (ii) persons who have professional experience in matters relating to investments who are investment professionals falling

within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), (iii) high net worth entities falling within Article 49(2) of the Order and (iv) other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant

• persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Any offer of securities to the public that

may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. This document does not constitute an offer of securities for sale or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in the United States, Canada, Australia, Japan or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. In particular the shares in MAS have not been, and will not be, registered under the United States Securities Act of 1933 as amended (the “Securities Act ”)

• r qualified for sale under the laws of any state of the United States or under the applicable laws of any of Canada, Australia or Japan and, subject to

certain exceptions, may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act) or to any national, resident or citizen of Canada, Australia or Japan. Neither this document nor any copy of it may be distributed directly or indirectly to any persons with addresses in the United States of America (or any of its territories or possessions), Canada, Australia or Japan, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country where such distribution may lead to a breach of any legal or regulatory requirement. MAS Real Estate Inc. disclaims any obligation or undertaking to release publicly any update, review or revise any forward looking statement contained in this document whether as a result of new information, future developments or

• therwise or any change in events, conditions or circumstances on which any such statement is based.

info@masrei.com www.masrei.com