SHAPING THE FACE OF RETAIL IN POLAND Introduction 1 EPP Management - - PowerPoint PPT Presentation

SHAPING THE FACE OF RETAIL IN POLAND

1

EPP Executive Team

EPP Management

Introduction

• More than 20 years of real

estate experience

• Most recently served as

the CEO of Compass Offices’ EMEA operations

• Prior to Compass, served

as a Managing Partner of Eastern Europe at Colliers International, where he managed business across 12 countries, 16 offices and more than 1,000 employees

• In 2017 received the

EuroBuild Real Estate Personality of the Year (2017) award

Hadley Dean CEO

• Senior financial executive

with over 20 years of experience across CEE

• Member of a number of

Management Boards and CFO in companies listed

• n the Warsaw Stock

Exchange and those controlled by large private equity funds in CEE

• Recently, Member of the

Management Board and CFO of Empik Media & Fashion, one of the largest retail groups in Poland

Jacek Baginski CFO

• Over 20 years of real

estate experience across Poland, Russia and Germany

• Most recently served as a

Venture Partner and the Head of Retail at Griffin Real Estate

• In 2004-2007 Associate

Director at JLL Russia

• In 1997-2004 Head of

Leasing and Development at ECE Projektmanagement

Michał Świerczyński Head of AM

• 17 years of experience in

commercial real estate

• Most recently served as

the Managing Director at Echo Investment Property Management, where he managed all retail and

• ffice assets
• Prior to joining EPP,

worked in the hotel and

• ffice sectors, selling hotel

projects and commercialising office assets

Wojciech Knawa Head of PM

• Over 15 years of real

estate experience gained at, among others, Echo Investment

• Most recently served as

the Chief Legal Officer at Echo Investment, being directly involved in financing, leasing, sales and acquisitions

• In 2005-2007 Member of

the Supervisory Board at Barlinek and Opoczno

Rafal Kwiatkowski COO

2

Introduction

Agenda

1

Company at a glance

2

Key investment highlights

3

Poland – attractive investment destination

4

M1 portfolio update , Marcelin and Developments

5

Update on the office disposal process

7

Conclusion

6

Historical Financials

3

Company at a glance

Section 1

4

EPP at a glance

Source: Company information

Section 1

Overview Business model

• EPP is the leading retail property group in Poland with c.€2bn
• f investment properties
• One of the most experienced retail property and asset

management team in Central & Eastern Europe (CEE)

• Presence in the majority of key cities throughout Poland with

coverage of 40% of the national catchment area

• Experienced Executive Board
• Strong institutional shareholders: Redefine (36.2% stake),

Oaktree & PIMCO (shareholders in Echo Prime which holds a 6.4% stake in EPP)

• Raised c.€360m of new equity post IPO
• Pure Polish play, with retail focus
• Each asset must be dominant, defensible and sustainable
• Organic and inorganic growth to obtain scale
• Highly proactive asset and property management
• Long-standing tenant relationships
• Continued deleveraging

EPP’s geographical footprint

Lomza Warsaw Zamosc Krakow Lodz Wrocław Poznan Szczecin Kielce Inowroclaw Jelenia Gora Klodzko Czeladz Przemysl Bełchatow Wloclawek Zabrze Kalisz

18 6

Retail assets

2 18

Retail development projects Office assets Cities

Key performance indicators

1 2 3 4 5 6 98.6 96.0 Occupancy (%) 5.3 3.8 WALT (years) LTV (%) 47.4 (target of 45) Debt WAM (years) 3.9 EBITDA interest coverage (x) 4.2 (2017A) Occupancy cost ratio (%) 13.5 (2017A) Rent to sales (%) 10.3

5

EPP at a glance

Developments since listing1,2

Source: EPP, 2017 Financial Results Presentation

1 As of March 2018 2 Incl. M1 tranche I acquisition

Section 1

Key corporate events

Jan-16: Incorporation of EPP in the Netherlands as a private limited liability company Aug/Sep-16: Listing on the Luxembourg Stock Exchange (Aug-16) and conducted a private placement listing (€96m) on Johannesburg Stock Exchange (Sep-16) Jun-16: Acquisition of 75% stake by Redefine and subsequent decrease of stake to 50% by on-sale of shares to a consortium of investors Aug-16: EPP converted to a public company 11 acquisitions 153 employees currently €805m increase in portfolio value since incorporation (Jun-16)4 339k sqm increase in retail GLA (since Q2 2016) Signing of the agreement to acquire M1 portfolio consisting of 12 assets 192k GLA sqm of retail developments in Warsaw 1,428 retail leases3 Galaxy extension opened in Nov-17 (€3.1m NOI uplift) Outlet Park extension opened in Sep-17 (€1.0m NOI uplift) Apr-17: Equity raise of €149m through a private placement Jan-18: Equity raise of €113m through a private placement to finance acquisition of M1 tranche I

3 Excluding leases of tranche I of M1 portfolio which are secured by a master lease until 2024 4 Excluding JVs

6

Acquisition of Galeria Solna Date: Jul-17 Location: Inowroclaw GLA: 23,627 Acquisition of Galeria Mlociny1 Date: Jun-17 Location: Warsaw GLA: 81,900 Acquisition of Zakopianka Date: May-17 Location: Krakow GLA: 26,142

EPP at a glance

Section 1

Source: EPP

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

Investment journey since listing to position EPP as the leading retail landlord in Poland

Sale of Tryton Business House Date: Dec-17 Location: Gdansk GLA: 23,8752 Sale of West Gate Date: Dec-17 Location: Wroclaw GLA: 16,533 Sale of A4 Business Park (I, II, III) Date: Dec-17 Location: Katowice GLA: 29,959

Recent portfolio transactions

Location: Czeladz GLA: 53,600 Location: Krakow GLA: 49,600 Location: Zabrze GLA: 52,800 Location: Lodz GLA: 38,400 Acquisition of M1 portfolio (tranche I) Date: Jan-18 Acquisitions Disposals Acquisition of Blackstone portfolio Date: Jun-17 Wzorcownia Location: Wloclawek GLA: 25,455 Twierdza Klodzko Location: Klodzko GLA: 23,039 Twierdza Zamosc Location: Zamosc GLA: 23,806 O3 Business Campus (I) Location: Krakow GLA: 18,755 Tryton Business House Location: Gdansk GLA: 23,5372 Acquisition of ROFO office portfolio Date: Dec-16 A4 Business Park (III) Date: Apr-17 Location: Katowice GLA: 11,900 Symetris (I) Location: Lodz GLA: 9,595 Retail Retail Retail Office Office Office Retail Retail Retail Office Office Development of Towarowa 221 Date: Dec-16 Completion: 2022/2023 Location: Warsaw GLA: 110,000 O3 Business Campus (II) Date: Dec-17 Location: Krakow GLA: 18,950 Office +252k sqm

• f M1

retail space3 Jan 2017 2018 Apr Aug Sep May Jan Jun Feb Jul Mar Oct Nov Dec Nov Dec Oct

3 Tranche II and III of M1 portfolio

7

48% 46% 6%

EPP at a glance

Source: EPP, 2017 Financial Results Presentation

1 As of January 2018 2 Incl. M1 tranche I acquisition concluded in January 2018

Section 1

Tenant mix1,3

Fair value GLA

Portfolio breakdown1,2

Retail Office

Value of portfolio Key operating metrics

1,347 359 116 2016 2017 972 1,822 444 194 2016 2017 299 638 2016 2017

(€m) GLA (sqm) Footfall and sales LFL (%)

• No. of units

GLA (sqm) Occupancy (%)

• No. of tenants

(€m)

2016 2017 387 309 2016 2017 3.0 4.6 3.0 7.0 2016 2017 176 137 2016 2017 110 94 2016 2017 968 1,4284 Footfall Sales

International tenants Retail Office Polish chain tenants Local tenants

95.8 96.0

85% 15% 82% 18% Total income GLA 54% 41% 5%

WAULT: 3.8 years WAULT: 5.3 years Standing value Developments M1 tranche I

3 M1 tranche I not included due to existing masterlease agreement 4 Excluding leases of tranche I of M1 portfolio which are secured by a master lease until 2024

8

743 452 615 475 607 425 612 443 399 459 253 250 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018F 2019F 2020F

Why focus on retail in Poland?

Source: CBRE, JLL, Savills

Section 1

Limited new supply

Prior to transformation:

• 95% of retailing controlled by

government owned entities

• Only other formats were temporary

and improvised selling points

Prior

1989-1995:

• Strong reliance on outdoor

market places

• Emergence of small isolated

stores in sporadic unconnected locations

1989

1995-2000:

• First hypermarkets opened by Auchan, Real, Carrefour

and Geant

• First three shopping malls built in Warsaw (Panorama,

Promenada, Bogusz Centre) to cater to the needs of wealthier clients

• Other formats included a few department stores

(Domy Towarowe: Wars, Sawa & Junior, Smyk)

• Opening of the first M1 in 1997

1995

2000-2005:

• Large foreign real estate players

invest in large malls in Poland (e.g. Klepierre, Unibail-Rodamco)

• Hypermarkets complemented with

large fashion offering

2000

2005 onwards:

• Multi-level urban schemes
• Introduction of new formats:

discounters, convenience stores, outlet parks

• Development of shopping

centres in smaller cities

• Starting from 2015, development
• f mixed-use schemes

2005

Lack of high-street retail proposition prior to transformation enabled rapid growth in the number of shopping centres in Poland, which remain the dominant format with 71% of market share, and makes the EPP portfolio particularly attractive

New supply of shopping centres stock (000s sqm) Prime retail yields in major regional Polish cities (%)

8.0 6.3 6.0 6.8 7.5 7.0 6.0 6.0 6.0 6.0 5.5 5.3 5.0 2005A 2006 2007A 2008 2009A 2010 2011A 2012 2013A 2014 2015A 2016 2017A

Decreasing prime yields

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EPP strategy

Section 1

• Leading Polish retail landlord focused on income generation
• Dominant, defensible and sustainable portfolio
• Consolidation of key retail assets in strategic locations

Create an income-generating retail champion 1 Develop scale with prudent leverage 4

• Growth has been primarily driven by acquisitions of

hand-picked retail assets and extensions

• Going forward we expect to grow organically and inorganically

through extensions and acquisitions.

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

Maintain efficient operations through expertise 3

• Experienced in-house asset and property management teams
• Excellent staff retention facilitating intellectual capital and long-

term value generation

Utilise strategic relationships 2

• Leverages relationships with tenants by exploiting economies of

scale

• Strong relationships in the international capital markets,

particularly in South Africa

Source: EPP

10

Section 1

… Resulting in the largest retail portfolio in Poland …

Year of completion split by GLA (000s sqm)

Galaxy refurbishment and extension

• Opened in 2003 and fully refurbished in 2013
• Extension in 2017 resulted in additional 15,150 sqm GLA and €3.1m NOI uplift

Galeria Echo Kielce

• Opened in 2002 and extended in 2011 to create one of the biggest shopping-entertainment

centers in Poland with almost 300 stores Outlet Park

• Opened in 2012 and extended in 2015 and 2017

–

2017 extension resulted in additional 3,800 sqm GLA and €1.0m NOI uplift Galeria Sudecka

• Opened in 2000 and redeveloped in 2015

One of the largest portfolio of retail assets in Poland… … consisting of modern and well-invested buildings

34 39 28 24 23 25 48 57 72 50 69 91 26 54 2014 2013 2012 2011 2010 2009 2007 2003 2002 2001 2000 1999 1998 1997

… widely recognized with prominent awards

2016 Eurobuild Awards Shopping Centre of the Year – Galeria Echo Eurobuild Awards Shopping Centre Manager

• f the Year – Grzegorz Czekaj

2016 Eurobuild Awards The Real Estate Personality of the Year – Hadley Dean 2017 2017 CIJ Awards Poland Best Asset Management Company of the Year 7th CEE Investment Awards Core+/Value Add Investor 2017 2006–2016 Deal of the Decade Awards Winner: Newcomer 2017 CEE Retail Awards Property Management Company 2017

639 596 428 412 412 250 162 128 114 87 +489 EPP¹ Atrium ECE NEPI Rockcastle Unibail Cromwell Immo- finanz Klepierre GTC Global- worth³

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

Source: EPP, company information

3 Griffin portfolio acquired by Globalworth 1 Includes tranche I of M1 portfolio acquisition which closed in January 2018 2 Latest available data as of March 2018

• No. of properties2

18 21 6 11 6 2 3

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

Undergone refurbishment / extension since M1 tranche I assets 9 12 8 Refurbishment usually carried

• ut within 9-10 years from

completion

11

6.7% 4.1% 0.5% 9.7% 3.3% 6.3% 7.1% 12.5% 8.9% 5.9% 7.9% 6.0% 10.2% 200 400 600 800 1,000 Galeria Veneda Galaxy Outlet Park Galeria Echo Twierdza kłodzko Pasaż Grunwaldzki Galaeria Solna Galeria Amber Zakopianka Twierdza Zamość Galeria Olimpia Galeria Wzorcownia Galeria Sudecka Average 2016 Average 2017

… Outperforming the competition …

Section 1

PLN/sqm

Footfall increase

8.8% 7.1% 2.3% 8.1% (0.1%) 4.8% 6.2% 2.0% (1.1%) (2.5%) 6.4% 3.1% 4.5% 4 8 12 Pasaż Grunwaldzki Galaxy Galeria Echo Galeria Amber CH Veneda Outlet Park Galeria Sudecka Galeria Olimpia Zakopianka Twierdza Zamość Twierdza kłodzko Wzorcownia Włocławek Galeria Solna Footfall 2016 Footfall 2017

Source: EPP, Savills

Average monthly sales (PLN/sqm) Retail assets sales performance Footfall (million) EPP outperforming the competition Polish Council of SC – turnover index (yoy change)

(2.6%) 2.1% 1.8% 2.2% 2014 2015 2016 2017 2.5% 2.8% 3.0% 7.0% 2014 2015 2016 2017

Sales increase EPP turnover growth (yoy change)

12

… And well-positioned to take advantage

• f e-commerce

Section 1

EPP's properties respond to customer needs … … leveraging e-commerce to enhance shopping experience

3 4

Stores are expected to drive most of the retail sales growth … … while online retail penetration should remain at moderate levels

1 2

• In Poland retail is expected to remain resilient to online shopping – Poles associate visiting

shopping centre with leisure

• There is a strong drive to focus on the development of the social aspects of social centres,

which should further limit on-line shopping threat

“

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

GLA split by categories

Online retail as percentage of total retail

Source: EPP, JLL

• Customers engage anywhere and at anytime via integrated, seamless experiences
• Showroom effect enhances the customer experience
• Flagship stores increases the desirability of the brand
• Omni-channelling increases brands’ recognition and appeal to widest range of customers
• Click-n-collect provides an opportunity for the consumer to further interact with the brand

and may lead to further in store sales

• Convenience of location and desirability of the shopping centre drives willingness of the

consumer to engage with retailer

Traditional retail e-commerce Click-n-collect

Shopping centres in Poland are a social destination, making e-commerce channels far less of a substitute

Fashion & Accessories 49% Food / Supermarkets 14% Entertainment 13% Food Court, Restaurants & Cafe 3% Health & Beauty 6% Household appliances & Accessories 5% Speciality Goods 4% Electronics 3% Services 1% 16% 25 50 75 100 125 150 Netherlands France UK Germany Poland

Retail sales 2016A vs. 2022E (indexed to 100)

Online sales In-store sales

4.3 15.1 17.8 10.0 9.5

75% of growth coming from in-store sales

13

Key investment highlights

Section 2

14

Key investment highlights

Creating scale through organic and inorganic growth Successful acquisition strategy supported by prudent financial management Dominant and defensible portfolio of well-located shopping centres Strong relationships with high quality tenants Efficient, reliable and integrated operations platform 1 2 3 4 5

Section 2

15

Section 2

Source: EPP

1 Defined as investment property value 2 Galeria Olimpia and Centrum Echo Belchatow treated as one project

Value of EPP's portfolio (€m)1

972 975 1,203 1,271 1,347 359 387 392 420 422 309 1,359 1,367 1,623 1,693 2,0144 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Retail Office M1 tranche I (retail)

3 Acquisition of A4 Business Park III; treated as one project together with A4 Business Park I/II 4 Pro forma for M1 tranche I acquisition completed in January 2018

1

• Extensions of 2 best-performing retail assets

(Galaxy and Outlet Park) – full NOI impact yet to be reflected

• 3 other assets identified for future extension
• Upside for M1 assets

GLA extensions

• Excellent access to additional opportunities
• Strong sourcing capabilities
• Plan to acquire King Cross Marcelin located in

Poznan and M1 tranche 2 and 3

• Recycling of assets

Substantial NOI growth in 2016A-17A (54%), with further expansion expected between 2018E and 2020E

External acquisitions

• 2 Warsaw projects under development with

(GLA of 192k sqm)

• Galeria Mlociny to open in April 2019
• Further upside from Towarowa 22, zoning

expected to take place in 2018/2019

Developments

• Turnover increase
• CPI-indexing
• Tenant mix improvement initiatives

NOI growth Organic growth Inorganic growth

Creating scale through organic and inorganic growth

• No. of investments

92 92 132 142 142 – – – 4 – 9 9 93 6 93

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Section 2

Successful acquisition strategy supported by prudent financial management

Source: EPP

1 100% of the debt is assumed to be hedged in line with EPP policy; the remaining portion is unhedged due to one loan maturing in 2018

2

Reducing LTV Long debt maturity dates

55.4% 47.4% 45% FY 2016 FY 2017 Long-term target

LTV (%)

83% hedged1 102 151 11 81 434 179 2018 2019 2020 2021 2022 >2022

(€m)

Average maturity: 3.9 years

Financial management guidelines

• Leverage: sustain a sound balance sheet that is well within covenants and credit metrics

with a long-term target of 45%

• Hedging: target to hedge 100% of interest rate exposure; currency of rental income

matching the currency of EPP funding

• Credit risk: require tenants to pay rentals in advance and present security of the liabilities

resulting from lease agreements

• Operational costs: robust approval system and periodic monitoring of costs versus the

budget on a monthly (at properties and HQ level) and quarterly (overall for EPP) basis

• Dividend policy: intention to distribute 100% of distributable earnings to the shareholders;

shareholders have the option to reinvest through DRIP programme 1 2 3 4 5

17

Section 2

Urban shopping centres Regional shopping centres Outlet parks / stand-alone retail schemes

Source: EPP

1 Including development projects (Towarowa 22 and Galeria Mlociny)

EPP retail assets

EPP's geographically diversified portfolio encompasses three asset types targeting diverse customer groups

Large urban shopping centres

• EPP's largest assets with a GLA of 48,000-72,000 sqm
• Located in Poland's largest and most affluent cities, very close to the city centres,

in densely populated areas

• Strong fashion offering complemented by food, entertainment and F&B
• Usually competing with a handful of other malls in their vicinity

Dominant regional shopping centres

• EPP's smaller format with a GLA of 15,000-55,000 sqm
• Located in strong regional cities
• Critical mass enhanced by entertainment
• Very limited competition, usually limited to much smaller formats

(e.g. hypermarkets or smaller retail parks)

Outlet parks / stand-alone retail schemes

• Category includes Outlet Park Szczecin (GLA of c.28,300 sqm) and Centrum

Handlowe Przemysl (GLA of c.6,000 sqm)

• Located in either smaller cities or outskirts of larger cities in less densely populated

areas

• Competition mainly from other nearby hypermarkets or larger malls in city centres

but usually catering mainly to the population living in its close vicinity Lomza Kielce Przemysl Wroclaw Jelenia Gora Szczecin Belchatow Wloclawek Krakow Klodzko Zamosc Inowroclaw Warsaw1 Lodz Kalisz Czeladz Zabrze

3

Dominant and defensible portfolio of well-located shopping centres

18

66% 32% 2% 43% 50% 7%

No. Tenant name Rental income (€/month) % share in total 1 542,712 8.1% 2 352,648 5.3% 3 154,096 2.3% 4 147,368 2.2% 5 131,509 2.0% 6 128,400 1.9% 7 125,599 1.9% 8 125,371 1.9% 9 108,395 1.6% 10 103,344 1.5%

Strong relationships with high quality tenants

• Portfolio diversified in terms of footfall and NOI which creates a strong negotiating position
• In 2017, retail accounted for 82% of GLA and 85% of fair value, while office for 18% and 15% respectively
• Retail assets are let out to leading retailers with international brands and mature, strong Polish retail chains (e.g. LPP

with a market cap. of €4.0bn, CCC with a market cap. of €2.7bn), diversifying EPP's macro exposure

• Cumulative top 10 retail and office tenants represent only 32% of total rental income
• Office space leased to blue chip tenants

A diversified portfolio with blue chip and international tenant base Split by types – retail tenants1 Top 10 retail tenants Other tenants

International tenants Polish chain tenants Local tenants

Source: EPP, Factset as of 24 May 2018

1 As of FY 2017

Section 2

Top 10 office tenants

No. Tenant name Rental income (€/month) % share in total 1 154,013 9.1% 2 138,781 8.3% 3 103,103 6.1% 4 61,156 3.6% 5 61,148 3.6% 6 57,037 3.4% 7 51,590 3.1% 8 49,419 2.9% 9 48,152 2.9% 10 47,355 2.8% Leading CEE retailers

51% 44% 5%

Split by types – office tenants1

68% 30% 2% GLA Total income

4

19

Section 2

Efficient, reliable and integrated operations platform—proprietary management system

Source: EPP

EPP has developed internally a proprietary tool which enables it to control key property and tenants' KPIs

Asset portfolio monitoring

• Performance overview at asset-level incl. sales density, footfall, RTS and

OCR and debt collection ratios for each EPP property all in one dashboard

• Allows effective decision-making process based on real-time data

1 Immediate identification of potential tenants' issues

• Drill down option – macro to micro perspective, using the tenant panel and

heat maps

• Overview of key KPIs at tenant-level: RTS, OCR, debt collection ratios, SC

rates, rent reductions, sales density and sales, footfall and opex reports 2

Main functions Visualisations and key facts

Dashboard with a holistic and handy

• verview of key

metrics Macro and micro level heat maps and efficiency levels of shopping galleries Key lease term and performance KPIs

6

20

Section 2

Efficient, reliable and integrated operations platform—EPP University

• EPP University platform was developed to

support tenants in daily operations and is run by a team of 4 professionals

• Tenants’ staff provided with professional

training on most important performance factors includes:

–

effective sales techniques

–

customers’ typology

–

building a receipt

–

selling on the shop front

–

business KPIs analysis

• Units workshop with tenants’ staff includes:

–

planning the optimum store layout, positioning of the best sellers

–

effective visual merchandising implementation

–

interior shop design and shop fronts improvement

Overview Tenants’ KPIs before and after EPP University training

Tenants Project Sales density (€/sqm/p.a.) RTS OCR Sales density (€/sqm/p.a.) RTS OCR Before After Specialist Store Pasaz Grunwaldzki 805 27.2% 42.2% 2,014 10.9% 18.9% Fashion retailer Galeria Echo 1,631 20.5% 29.8% 2,100 16.4% 23.8% Jeweller Pasaz Grunwaldzki 3,887 20.1% 24.8% 5,925 12.9% 16.9%

Key EPP University personnel

• More than 18 years of experience, including creating and developing customer awareness
• f recognized foreign and Polish brands such as Zara, Orsay, Motivi, Vero Moda, Camaieu,

Tatuum and Gino Rossi

• For the last 9 years Roksana held various managerial positions and joined EPP as a Retail

Manager in June 2014

• Roksana is an expert in training in areas such as sales, visual merchandising and business

Roksana Bialecka Head of University Retail Tenants Management

Improvement of performance of clients leading to rental growth 1 Attracting smaller tenants with rents higher than larger tenants 2 Ability to identify potential problems early and prevent long-term voids 3

EPP University attracts both smaller and large tenants; offered sessions are also popular among sales assistants of established international retail chains

Source: EPP

6

21

Poland – attractive investment destination

Section 3

22

Stable fiscal environment with low interest rates and falling unemployment …

Section 3

Source: Economist Intelligence Unit, Eurostat, Datastream, Moody's, S&P ratings, Analyst research, Factset as of 24 May 2018

1 Western Europe (EU15)—Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK

Low level of public debt

Public debt as percentage of GDP (%, 2017A); sovereign ratings (Moody's/S&P) 1

179 132 126 103 98 97 88 78 74 68 64 51 51 35 Greece Italy Portugal Belgium Spain France UK Austria Hungary Ireland Germany Slovakia Poland Czech Rep. A2/BBB+

Falling unemployment rate

2 Unemployment rate in Poland (%)

9.8 12.1 12.8 12.3 8.9 6.8 6.6 6.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F

Unemployment is historically low, below natural level

Rising real wages

3

1.1 0.6 1.6 1.4 1.5 1.8 2.1 2.3 2.4 2.6 2.5 3.5 2.5 3.8 3.5 4.1 4.9 5.1 4.7 4.3 4.7 4.7 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F Western Europe¹ Poland

Percentage change in hourly wages in local currency (%)

252 254 261 266 275 292 309 325 342

2012A 2013A 2014A 2015A 2016A 2017B 2018F 2019F 2020F

Significant boost from consumer spending

4 Consumer spending in Poland (US$bn)

Consumer confidence index in Poland (100=long-term average) 102.0

23

200,000 400,000 600,000 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018F 2019F Supply yearly Under construction Planned

… Making Poland a highly attractive retail investment destination

Section 3

Decreasing supply of new shopping centres stock 3

Above 28.0% Between 26.5% and 27.9% Between 25.0% and 26.4% Below 25.0% Bialystok Lublin Rzeszow Krakow Kielce Katowice Opole Lodz Warsaw Olsztyn Bydgoszcz Poznan Wroclaw Zielona Gora Szczecin Tricity

Source: Oxford Economics, JLL

1 Above analysis is based on the modern retail stock defined as retail schemes exceeding 5,000 sqm of gross leasable area (GLA), delivered or refurbished after 1990

Impressive growth in retail sales 1 Retail sales change between years 2004-2016

(30%) (5%) 20% 45% 70% 95% Poland Czech Republic France Hungary Germany Spain

Shopping centre pipeline in Poland (sqm) Existing shopping centre stock (GLA in sqm per 1,000 inhabitants)

400 800 1,200 US Luxembourg Netherlands Ireland Sweden Finland UK Spain Portugal Italy France Czech Rep. Poland Slovakia Turkey Greece

N/A 31% 23% 29% 26% 42% 18% 24% 29% 32% 19% 49% 50% 66% 78% 37%

x% Proportion of the last 10 year completions of total existing stock (January 2017)

High future growth projections 2 10-year growth forecast of retail spending per capita (2017-2027E)¹ Saturation of shopping centres well below Western Europe and the US 4

24

M1 portfolio update, Marcelin and Developments

Section 4

25

M1 transaction rationale

Section 4

40% of Polish population is within a 30-min drive time 120 million annual footfall combined

Additional value potential

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

major junctions (land base >200 ha)

Location

• Master lease provided by Metro AG (rated BBB-/Ba1), supported by a

strong tenant mix including top brands: Auchan, OBI, MediaMarkt, TK Maxx, H&M, C&A

Tenants

• Food and DIY anchored with top international brands providing

the greatest retail offer and best prices

Bespoke shopping centres

• Through the

combined scale of EPP and M1 portfolio, the company is able to attract retail market leaders and assist with their growth aspirations

• Increase the F&B and entertainment offerings
• Right-size retail units
• Boost the short-term leases income
• Optimise costs

Active asset management

• Potential to increase the GLA by 8-10% and NOI by 10-15%
• Increase of the existing rents

Extensions

Source: EPP

Transaction rationale Assets highlights

Scale

26

M1 portfolio overview

Section 4

Tenant mix (NRI) Tenant mix (GLA)

Auchan 36% OBI 13% Media Markt 8% Other tenants 43% Auchan 38% OBI 22% Media Markt 10% Other tenants 30% Auchan – no. 1 hypermarket

• perator in Poland and 5th largest

worldwide; a 20 year track record in the Polish market; 7 year agreements with Auchan OBI – the leading DIY operator with

• ver 50 stores in Poland and a

19 year track record in the Polish market; 15 existing lease agreements in place MediaMarkt – German-based leading consumer electronic retailer with over 60 stores in Poland and a 19-year track record on the Polish market; opportunity to decrease space and re-rent at better rates

GLA (sqm): 446,500 Sustainable NOI: €49.0m Entry yield¹: 7.1% RTS: 8.9% Further upside from GLA extension Vacancy: 1.8% Development yield: 8–10% WALT by GLA²: 6.4 years

1 Acquisition yield excluding transaction costs; 6.8% for the total portfolio including transaction costs 2 End of Master Lease

Tenants Key portfolio statistics

EPP agreed to acquire portfolio of twelve M1 assets in 3 tranches. Tranche I was closed in January 2018, tranche II and III to follow in June 2019 and June 2020, respectively

Source: EPP

Selected other brands

27

Potential for further development of M1 assets

Space available for extensions

Section 4

• Following the preliminary internal audit

and modelling exercise to assess the profitability of the potential projects, 7 assets have been identified to have extension potential

• Upside for total GLA increase of c.10%

and NOI of c.12-15%

• Detailed audit to be carried out in 2018

Tenants restructuring

• Adjustments to tenant mix to maximise

NOI by replacing poorly performing tenants with new sought-after retailers

• r service providers
• Ability to improve shopping experience

by widening the base of various tenant types and introducing new services

• Aligning the tenant mix to respond to

the shoppers' increasing spending power and changing preferences

Refurbishments

• A way of increasing the assets'

attractiveness to customers by adapting to the 'cross-channel' era caused by growing online retail penetration and hence recalibrating the assets' positioning

• Energy-efficiency improvements
• Resulting in better tenant retention and

higher footfall

Improvement of entertainment and food courts

• Potential to include tenants providing

leisure services at 5 of the analysed 7 assets

• Facilities to include modern food

courts, fitness centres and cinemas

• Increases the overall attractiveness of

the mall and time spent shopping, reducing substitutability of the experience with e-commerce

Source: EPP

Assessment of alternative use of land next to the existing M1 assets: residential, industrial purposes and big boxes

28

Contractual growth pipeline in retail from M1

Section 4

Retail properties Retail GLA (000) Retail NOI (€m) Tranche I January 2018 2017YE Tranche III June 2020 Tranche II June 2019 72 97 113 121 18 24 26

Pro-forma impact of the committed M1 portfolio acquisition1

Retail 76% Office 24% GLA split 639 823 891 Retail portfolio value (€m) Retail 82% Office 18% Retail 86% Office 14% Retail 87% Office 13% 14 444 1,352 1,710 1,933 2,044

Source: EPP

1 Pro-forma as of FY 2017 assuming no retail / office acquisitions or disposals other than M1 portfolio

+4 +194 +359 +6 +184 +222 +2 +68 +111 Selected tenants

29

Marcelin transaction rationale

Section 4

Additional value potential and growth

• Located in the affluent western part of Poznan
• Isolated catchment area of approx. 350,000 within a 30 min drive

Strong catchment area

Auchan, H&M, Reserved, Pepco, CCC, New Yorker, Jysk, Media Markt, Empik, Super-Pharm

Tenants – Complimentary to current portfolio

• Food anchored with top international brands providing the greatest retail
• ffer and best prices

Dominant shopping centre in its catchment

• Currently no F&B offering
• Right-size retail units
• Significant demand from new tenants to improve mix
• Optimisation costs

Active asset management

• Potential to extension on the first floor
• Project neighbouring a large office complex Business Garden

Poznan 135,000 m2 is currently under construction which will attract an additional 12,000 people daily to the catchment area.

Extensions and potential footfall increase

Source: EPP

Assets highlights

30

Section 4

Strategic developments: large, well-integrated developments in attractive locations in the capital city

Galeria Mlociny1

• Retail development located in the North-West part of Warsaw, conveniently

located next to a rapidly growing residential area – Mlociny

• Mlociny is the main public transport (incl. a metro line) hub used daily by
• c. 40,000 people
• 1.5 million people within 30 minutes drive
• Opening planned for April 2019 with construction ahead of the schedule
• The largest retail construction site in Poland; 75% of GLA already leased

Planned total GLA 81,900 sqm

• Est. cost of

development3 €300m

• Est. fully-let NOI

€21m

• Est. yield on cost
• c. 7.0%
• Est. valuation yield
• n completion
• c. 5.75%
• Est. value on

completion €365m Planned total GLA 110,000 sqm

• Est. cost of

development3 €420m

• Est. fully-let NOI

€34m

• Est. yield on cost
• c. 8%
• Est. valuation

yield on completion

• c. 5%
• Est. value on

completion €680m

Towarowa 222 Construction of one asset at a time

• Last large retail development in Warsaw and the last to be built near the city-centre
• The property is the biggest commercial area located in the centre of Warsaw (next

to the metro line) with total area of c. 6.2ha

• Zoning process scheduled for 2018/2019
• Potential for additional 45,000 sqm of mixed-use: residential, office, hotel
• Strong interest from all main anchor tenants

Source: EPP

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

March 2019 Completion of Galeria Mlociny 2018/2019 Zoning process for Towarowa 22 Q3 2016 Start of construction of Galeria Mlociny 2020/2021 Start of construction

• f Towarowa 22

April 2019 Opening of Galeria Mlociny

31

Update on the office disposal process

Section 5

32

Flexible terms of ROFO agreements allow EPP to realise profits on disposals of office and retail assets

Section 5

Sagittarius1 O3 Business Park III

Source: EPP

1 ROFO assets intended for sale (EPP owns 25% of the assets, with remaining 75% being ROFO)

Office Retail Symetris II Libero1

EPP has options to buy, sell or waive all its ROFO assets

Project name Location GLA (000' sqm) NOI (€m) Status

Symetris II Lodz 9.7 1.6 Authorized to acquire Symetris II until 30.09.2019 O3 Business Park III Krakow 18.9 3.3 Authorized to acquire O3 Business Park III until 30.09.2019 Sagittarius Wroclaw 24.9 4.5 Waived ROFO, we will participate in profit share Libero Katowice 45.1 9.0 Waived ROFO, we will participate in profit share

33

Disposals of office assets

• EPP invests in offices only on an
• pportunistic basis
• Acquired office assets are intended to be

disposed of at a profit

• EPP’s aim is to focus solely on retail assets

in the long-term and continue with the stated disposal strategy of office real estate

• In December 2017, EPP disposed of A4

Business Park, Tryton Business House and West Gate for a total consideration of €160m

• Sale process of O3 Business Park, Malta

and Symetris Business Park was initiated at the beginning of the year and we currently

• ffers for all three assets put for sale
• Disposals on track for year end

Tranche sold in October 2017 Tranche being currently for sale

Source: EPP

A4 Business Park

Katowice GLA: 29,900 sqm

Tryton Business House

Gdansk GLA: 23,537 sqm

O3 Business Park (I, II, III)

Krakow GLA: 56,926 sqm

Malta Office Park

Poznan GLA: 28,270 sqm

Symetris (I & II)

Lodz GLA: 19,000 sqm

West Gate

Wroclaw GLA: 16,532 sqm

Section 5

34

Historical financials

Section 6

35

Section 6

Key historical financial highlights

54.1 49.6 2016A 2017A

Total debt / Total assets (%)

55.0 47.4 45.0 2016A 2017A Target

Net LTV1 (%) Net debt / (Net debt + Equity)1 (%)

56.5 50.6 2016A 2017A

EBITDA interest coverage (x)

3.4 4.2 2016A 2017A

Source: EPP

1 Net debt defined as Debt less cash available, excluding deposits

67 103 89 FY2016 FY2017 Target at IPO (FY2017)

Historical development of financials

• Significant increase on the

back of recent retail asset acquisitions with an additional retail GLA of 145k sqm

• EBITDA grew by 61% due

to acquisitions and effective asset and property management 54 87 81 FY2016 FY2017 Target at IPO (FY2017) 34 77 64 FY2016 FY2017 Target at IPO (FY2017)

• NOI increases and cost

stabilisation has resulted in substantial distributable earning growth of 126%

• Higher than forecasted

despite changes to CIT +16% +7% +20%

LTV and ICR

Distributable earnings (€m) EBITDA excl. fair value gains (€m) NOI (€m)

36

Conclusion

Section 7

37

Key takeaways

Section 7

Source: EPP

We are the leading Polish retail landlord 1 Profitable and well positioned portfolio 2

• Retail landlord focused on income generation
• Dominant, defensible and sustainable portfolio
• Cash generative assets in key strategic locations
• Coverage of 40% of the national catchment area post tranche III of

M1 transaction

• Limited new supply and lack of high street alternative
• Footfall and tenants’ turnover has increase across the portfolio
• Scale makes us the ‘go-to’ landlord for retail clients
• Positive Polish macro and real estate market backdrop
• NOI and asset value growth

Leading operational platform delivers competitive advantage

3

Prudent Financial & Corporate Management

4

• Experienced asset and property management delivering NOI

growth

• Excellent staff retention deepens relationships with tenants
• Proprietary management information system & EPP University

enable proactive tenant management

• Debt materially reduced since IPO to LTV 47.4% at y/e 2017 and

long-run target 45%

• Deep banking relationships enhanced by prospective bond issue
• Recycling of assets into higher value properties
• Strong culture of Corporate Governance
• Support of key institutional shareholders

38

Additional materials

Appendix A

39

Yielding assets split (GLA split by city)3

Office Retail4

Properties located in prosperous regions

Szczecin Przemysl Kalisz Jelenia Gora Kielce Lomza Warsaw

13

7 Poznan Belchatow 3 3 4 Source: EPP, GfK Polonia 2017

1 Includes Galeria Olimpia and Centrum Handlowe Belchatow 2 70% owned by EPP, 30% by Echo Investment

Szczecin 13% Krakow 12% Kielce 11% Czeladz 8% Zabrze 8% Wroclaw 8% Lodz 6% Kalisz 5% Belchatow 5% Other 23%

17

Krakow Wloclawek Zamosc 10 Klodzko 5 20 19 2 6 Lodz 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 20 19 13 14 12 11 15 Property Location Completion / latest refurbishment Fair value (€m) GLA (sqm) Retail Galaxy (incl. extension) Szczecin 2003/2013/2017 275 56,627 Pasaz Grunwaldzki Wroclaw 2007/20166 252 48,366 Galeria Echo Kielce 2002/2011 223 71,650 Zakopianka Retail Park Krakow 1998 56 26,142 Galeria Amber Kalisz 2014 88 33,599 Outlet Park (incl. extension) Szczecin 2012/2015/2017 92 28,283 Galeria Sudecka Jelenia Gora 2000/2015 57 30,268 Wzorcownia Wloclawek 2009 51 25,455 Twierdza Zamosc 2011 52 23,806 Twierdza Klodzko 2010 49 23,039 Galeria Olimpia1 Belchatow 2000/2012 55 32,703 Galeria Veneda Lomza 2013 39 15,026 Centrum Handlowe Przemysl 2000/2012 5 5,759 Galeria Solna Inowroclaw 2013 59 23,627 M1 - Czeladz Czeladz 1997/2008 123 53,650 M1 - Zabrze Zabrze 1999 75 52,775 M1 - Krakow Krakow 2001/2011 126 49,617 M1 - Lodz Lodz 1999 34 38,396 Total Retail 1,710 638,788 Retail – Developments Towarowa 222 Warsaw 2022/2023

• c. 420

110,000 Galeria Mlociny2 Warsaw 2019

• c. 295

81,900 Total Retail (incl. Developments) 2,425 830,688 Office Malta Office Park Poznan 2011 62 28,270 O3 Business Campus (I, II) Krakow 2016/2018 93 37,846 Park Rozwoju (I, II) Warsaw 2014/2015 72 33,475 Astra Park Kielce 2007 31 14,269 Oxygen Szczecin 2010 28 13,902 Symetris I Lodz 2016 23 9,595 Total Office 309 137,357 1

8

11

Appendix A

Dominant and defensible portfolio of well-located shopping centres

List of EPP properties

Lowest Average Purchasing power per capita index Highest Office properties Retail properties 12 Inowroclaw

14 4

Zabrze Czeladz Wroclaw 18 Krakow 28% Warsaw 24% Poznan 21% Kielce 10% Szczecin 10% Lodz 7%

After the acquisition of all three M1 tranches, EPP’s portfolio will cover 40% of Poland where the spending power is 25% higher than Poland's average5

16 17 18

EPP portfolio assets are located in the largest Polish cities and offer exposure to attractive local markets where competition is still limited while consumer demand is growing rapidly

3 As of January 2018 4 Incl. M1 tranche I acquisition concluded in January 2018 5 Based on catchment area within 30 minutes drive time 6 Partial refurbishment in Q1 2016

165

9

2 15 16

40

EPP AM/PM capabilities

Efficient, reliable and integrated operations platform

EPP has assembled a team of highly experienced professionals which offers comprehensive asset and property management services of the highest quality

2017

• A highly experienced employee base recruited both externally and inherited

from Echo Investments prior to portfolio transfer to EPP, which ensured continuity of management and experience with each asset and the tenants

• Manages multiple shopping centres and offices across Poland
• EPP's property management can offer access to the entire real estate value

chain

• Unrivalled leasing capabilities resulting from well-established relationships

with large, international tenants who trust EPP's expertise and expand together in Poland

• EPP’s in-house development and asset management team has been

recognized over the years with many awards

Eurobuild Awards Property Management Company CIJ Awards Best Asset Management Company

2017 Total GLA

• c. 776k

sqm 1,428 retail units3 94 office tenants 124 employees2 Echo Investment Property Management PM Facility Management Team Budgeting Reporting & Analysis Team Marketing Management Echo Investment Property Management Office team Property Managers Echo Investment Property Management Retail team Shopping Mall Directors Marketing Managers Lease Administration Managers Financial & Accounting Managers Technical Managers

Europa Property Awards Core+/Value Add Investor

2017

Source: EPP, press

1 As of January 2018 2 Includes 9 employees of the Asset Management team and 115 employees of the Property Management team

Retail 18 projects1 Office 6 projects1 Architecture Team Legal Department Financial and Accounting Department Retail Leasing Team AM

Experienced and recognised asset and property manager

Appendix A

Construction and Development Team Office Leasing Team EPP University Integration Team

3 Excluding leases of tranche I of M1 portfolio which are secured by a master

lease until 2024

41

Case study: effectively leveraging existing tenant relationships

Appendix A

LPP and CCC in EPP's shopping centres

Galaxy Szczecin

2003: First LPP store opened (1,223 sqm) 2014: Stores with new brands introduced: Sinsay (580 sqm) and Cropp (590 sqm) 2017: Opening of one of the biggest Reserved stores in Poland on two levels (2,613 sqm) Stores with new brands introduced: House (480 sqm) and Mohito (442 sqm) 2003: First CCC store opened (385 sqm) 2013: Extension of the store to 552 sqm 2017: Opening of the latest concept store on two levels (2,267 sqm) – the biggest CCC store in Poland at that time

• Founded in 1996, CCC is the biggest Polish shoe retailer
• It operates 438 stores in Poland and more than 500 stores in other European

countries

• Market capitalisation of c.€2.7bn
• Over 263 million customers visited CCC stores in 2017
• Currently CCC has 17 stores in EPP shopping centres

–

further extensions of stores have already been planned

Galeria Echo

2011: Reserved store extension in a new, two-level format (1,430 sqm) 2002: First LPP store opened (861 sqm) 2013: Stores with new brands introduced: Mohito and Sinsay (787 sqm) 2018: House store extension in the latest format opened (550 sqm); further extension

• f Reserved store (up to 2,500 sqm)

already planned 2002: First CCC store opened (169 sqm) 2011: Extension of the store in a new format to 419 sqm 2014: Further extension of the store to 668 sqm 2018: Planned opening of the latest concept store with 1,500 sqm (in talks) 4,700 Current total GLA (sqm): 2,267

LPP CCC

Sought-after locations with loyal tenants growing with EPP

• Founded in 1991, LPP, given its range of brands, is referred to as 'Polish Inditex' with

more than 1,700 stores worldwide, 1,000 of which are located in Poland

• Portfolio consists of 5 fashion brands: Reserved, Mohito, Cropp, House and Sinsay
• Market capitalisation of c.€4.0bn
• Sells c. 140 million products every year
• Currently LPP has over 70 stores in EPP shopping centres

–

further extensions of stores have already been planned

3,000 1,500 1,223 First store GLA (sqm): 385 861 169

Source: EPP, Factset as of 24 May 2018

42

Appendix A

Case study: extensions

Identifying new extensions

• EPP identifies assets where it has the right to

construct an extension

• Internal audit is carried out by architects to

assess the feasibility of increasing GLA

• Once GLA extension size is estimated, the

development department prepares the profitability model based on leasing and construction data

• Leasing team starts approaching potential
• tenants. Financing and FC secured
• Construction starts when 75% of GLA leased

(based on conditional contracts with tenants)

• Board decision based on positive outcome of

the model, financing and FC availability and minimum 75% of GLA being already leased

Galaxy extension (completed 15 November 2017)

• €3.1 million NOI uplift – €50 million uplift in value
• 1.1 million visitors in November – best month ever
• 950k increase in number of visitors within 5 months (+20% LFL)
• 45 new stores in 15,150 sqm GLA

Outlet Park extension (completed September 2017)

New tenants

GLA

+15,150 sqm

NOI

41,477 56,627 +€3.1m 11.4 14.5

GLA

+3,800 sqm

NOI

24,483 28,283 +€1.0m 4.5 5.5

Both extensions completed on time

Source: EPP

• 21 new stores totaling 3,800 sqm GLA
• €1.0 million NOI uplift – €17 million uplift in value
• 42% sales increase since opening in 2012
• 53% footfall increase since opening in 2012
• 140k increase in number of visitors during the first 4 months

New tenants

43

New proposed changes to the Polish legislation affecting commercial real estate sector

Appendix A

• The tax is levied on owners of commercial and office real estate and came into

force on 1 January 2018

• It is a tax of 0.42% a year on real estate assets with value >PLN 10 million

(first PLN10m are tax exempt)

• Assets value is based on their initial value, not depreciated but adjusted for capex
• Such assets include: shopping malls, departments stores, stand-alone shops or

boutiques, service/trade buildings, office buildings (office buildings for own use are excluded)

• The tax sets a minimum amount of tax that has to be paid even in the case of

company generating losses, however, it is not to be paid in addition to CIT

• In November 2017, Poland's Lower House of Parliament passed a law

restricting Sunday sales to two Sundays per month

• Shopping restriction came into force in March 2018
• The bill foresees limiting trading to one Sunday per month in 2019 and 7

Sundays a year from 2020 onwards

• Currently Austria, Belgium, Cyprus, France, Germany, Greece, Hungary,

Netherlands, Norway and Spain have restrictions on Sunday trading

• Exemptions for F&B, entertainment, fitness, bakeries, flower shops and others

Tax on commercial real estate Sunday trading ban Proposed change Impact on EPP

• Estimated increase of the effective tax rate in 2018 by c.2-3pp
• According to UBS research, the loss in revenues should be to a large extent
• ffset by cost reductions and increased footfall and turnovers during other days
• f the week
• The Hungarian example suggests that the distortions are likely

to be temporary – following the introduction of the restrictions, retail sales momentum slowed down but returned to normal within two months

• Shopping centres are defining new operation principles e.g. prolonged opening

hours to help customers’ to change their shopping habits

Source: EPP, press releases, UBS research