Attracting Investors to REITs Fraser Hughes, EPRA 14 November 2014 - PowerPoint PPT Presentation

Attracting Investors to REITs Fraser Hughes, EPRA 14 November 2014 Author:

EPRA Strategy All three areas • Investor Outreach, Indices & Research support & • Reporting & Regulation promote the • Events & Networking sector Member Category No. % Property Co/REITs 110 54 Investors 45 21 Representing Universities 24 11 Gross Value > Consultants 11 5 EUR 350 Billion Insurance Companies 10 5 Banks & Law Firms 7 3 Others 3 1 Author: Total 210 100 2

Global Listed Real Estate Benefits • FTSE EPRA/NAREIT Global Index • Diversification & liquidity • Quality assets & management • Strong Total Returns & Dividend Yield • Governance & Transparency • Research • Promotion Author: 3

FTSE EPRA/NAREIT Global Index Author: 4

FTSE EPRA/NAREIT Global Index Five major criteria for inclusion: Underpinned by 4 Minimum Minimum Minimum committees with size liquidity free-float total of > 300 years experience! Minimum level of Detailed English relevant real annual reporting estate income A focused, relevant and investible benchmark To create: for global real estate Author: 5

FTSE EPRA/NAREIT Global Index Global Emerging Developed Global Global Emerging Emerging Emerging Developed Developed North Asia Americas EMEA EMEA Asia America Emerging Emerging Developed Developed Europe MEA Europe MEA 5 8 5 16 9 2 1 6 Countries Countries Countries Countries Countries Countries Country Countries Rental or REIT or 9 Sectors Each index has Author: Non-Rental Non-REIT multiple sub-indices: 6

FTSE EPRA/NAREIT Global Index Index Use: • Specialist Managers Underpinned by 4 • Pension Funds committees with total of > 200 • Global ETFs market years experience! • US$ 10.5bn AUM You need to be on • Futures contracts – Europe investors • OTC products radar! Author: 7

Global diversification Direct investment Zones Zonal Property No. of Ave. Total markets sectors properties price invested ( € m) ( € bn) EMEA 10 4 25 25 25 Americas 10 4 25 25 25 Asia Pacific 10 4 25 25 25 Total Investment required: 75 and if real estate is 10% of the total portfolio = € 750bn! Author: 8

Significant Global Investors 2012 2013 2012 2013 Sovereign AUM AUM Pension AUM AUM Wealth Fund Fund Country ($bn) ($bn) Country ($bn) ($bn) GPJ Japan 1,181 1,227 GPF Norway 716 838 APG NL 418 477 ADIA UAE 627 773 NPF Korea 359 402 SAMA Saudi 568 676 CDC France 341 395 CIC China 533 575 FR Thrift US 321 358 SAFE China 482 568 Others 27,134 29,121 Others 2,396 2,892 Total (Source: Towers Watson 2014) 29,754 31,980 Total (Source: SWF 2014) 5,322 6,322 (If) Government Pension Fund of Japan invests 5% in real estate = $60bn! Author: 9

Global Asset Exposure – € 1.5 Trn Region Companies Assets Top 10 own Asia 78 5,100 900 Europe 86 14,300 1,500 Nth America 143 32,000 7,200 Author:

South Africa Asset Exposure Johannesburg 12 South African companies own 1,500 Assets 18.5 sq.km. of Floor Space Cape Town Sandton Author: 11

Company Examples – Major Cities One New Change - London Paris  500,000 sqm owned at La Defense  Heart of City of London overlooking St Paul’s Cathedral  Major player in the Greater Paris project  Approx. 20,000 sqm Retail, 35,000 sq m Offices  EPRA Member: Icade  EPRA Member: Land Securities The Leadenhall Building – London Paris  Located in La Defense  224m tall building in centre of City of London  Tenants include: PWC, LCL Bank & Heineken  Office largest in Europe including 7 stories open plan  EPRA Member: Gecina  EPRA Member: British Land Author: 12

Company Examples - Offices Lowenbrau site - Zurich MainTor - Frankfurt  Zürich West, former industrial area „Kries 5“  Six impressive buildings in financial district  Disused brewery dated back to 1897  Over 100,000 sqm (mix of retail and offices)  EPRA Member: PSP Swiss Property  EPRA Member: DIC Alte Post – Hamburg Oslo - Norway  Addition of a new 6-floors development  Refurbishment docklands area  9,800 sqm (mix of retail and offices)  Mixed use, office, retail and urban space  EPRA Member: alstria  EPRA Member: Norwegian Property Author: 13

Company Examples - Retail SOHO - London Carrousel du Louvre – Paris  11,500 sqm retail and leisure  Mix of retail, office & living space  16.7mn visitors per annum  Mix of flagship stores and specialist retailers  EPRA Member: Unibail-Rodamco  EPRA Member: Shaftesbury Gare St Lazare – Paris Les Terrasses du Port - Marseille  Refurbishment of station attracting 500,000 commuters daily  Located in Euromediterranee regeneration area  80 retailers & 10 restaurants  190 stores & 260m long restaurant terrace  EPRA Member: Klépierre  EPRA Member: Hammerson Author: 14

Company Examples - Specialist Student Accommodation – UK Co Working & Shared Offices - UK  43,000 Students in 130 sites in 23 UK cities  30,000 people employed in offices  New and refurbished modern & energy efficient units  Refurbished warehouses/derelict city spaces  EPRA Member: Unite  EPRA Member: Workspace Healthcare – Belgium & France Industrial – UK & Europe   In 2005 Cofinimmo identified nursing homes  Warehousing, logistic & datacenters  Now 40% of total portfolio  5.8million sqm worth over GBP4.5billion  EPRA Member: Cofinimmo  EPRA Member: SEGRO Author: 15

Regional Breakdowns 150 constituents Mkt Cap EUR 119 Bn. Emerging Developed 18% 16% Asia Pacific North America EMEA 56% Asia Americas 52,6% 26% EMEA 32% 306 constituents Mkt Cap EUR 927 Bn. Author: Sources: FTSE, EPRA, NAREIT Data as of: September 1, 2014

Global Property Sectors Industrial / Self Storage Lodging & Offices 3% Resorts 2% 4% Industrial 6% Diversified Health Care 30% 7% 4% Residential 10% Offices 13% Retail 25% Author: EPRA Sources: FTSE, EPRA, NAREIT 2012 Data as of: August 30, 2014

Strong Long Term Performance 10,0% LISTED & REITs 9,0% 15-year annualised total 8,0% DIRECT return in local currency 7,0% 4,5% 6,0% 5,0% 4,9% 4,0% 1,3% 3,0% 3,9% 4,5% 2,0% 3,4% 2,6% 1,0% 0,5% 0,0% Global Bonds Global Equities Global Real Estate Global Listed Real Estate Capital Growth Yield Author: Sources: Eurostat, JP Morgan, FTSE, IPD, MSCI, Bloomberg, EPRA, NAREIT Data as of: September 30, 2014 Note : Based on assumptions made by EPRA 18

Annualised Local Total Returns Global Global Global Listed Real Estate Government General Bonds Equities 3 years 18.0% 3.3% 19.1% 5 years 14.6% 3.9% 11.4% 10 years 7.6% 3.9% 7.8% 15 years 9.0% 4.4% 4.7% 20 years 8.7% 5.5% 7.7% Source: EPRA Data as of: September 30, 2014 Author:

Transparency - EPRA BPR 2014 Total of 84 European companies surveyed • 50% gained a ‘medal’ or award: • 25 gold medals • 9 silver medals • 8 bronze medals • 81% disclose at least 1 EPRA measure (91% mkt cap) • 33% disclose all 6 EPRA measures (58% mkt cap) • South African BPRs & EPRA BPRs under EMEA umbrella? Author: 20

Transparency – BPR 2014 INTU Alstria Aedifica Atrium Icade Klepierre Befimmo Affine Development Secs NSI Land Secs British Land Capco DIC Wereldhave Leasinvest Citycon Great Portland EuroCommerical Aedifica Mobimo Cofinimmo Intervest Office Helical Bar Intervest Office NSI Corio Mercialys LondonMetric PSP Derwent Picton STE SEGRO FDR Shaftesbury Workspace Sponda Gecina SPS Unibail Hamborner Vastned Hammerson WDP Icade Author: Wereldhave

Transparency....but 42 Co’s Below Bronze! Big Yellow Balder Deutsche Annington Beni Stabili CA Immo Daejan Hldgs Convert Castellum IGD Deutsche Euroshop F&C Commercial Dios Deutsche Wohnen F&C UK Fabege GAGFAH Grainger Hemfosa LEG Hansteen Wereldhave Allreal Hufvudstaden Prime Office MedicX Belgium Klovern Primary Health TAG Kungsleden Quintain St Modwen Wallenstam Safestore Wihlborgs Eurobank Technopolis Schroder REIT Colonial Standard Life Non-EPRA members UK Commercial Unite are underlined Author: ANF 22

Transparency - sBPR 2014 Results British Land*** Grainger Corio*** Alstria*** Beni Stabili Great Portland** Hammerson*** Befimmo*** Citycon*** INTU*** STE* DIC Asset* Cofinimmo*** Klepierre*** Wereldhave*** Sponda*** Derwent London*** Land Secs*** Technopolis EuroCommercial* SEGRO*** Wereldhave Belgium FDR*** Unibail*** • 10 companies won gold BPR & sBPR Gecina*** Workspace* • 57% reported at least one sBPR (74% mc) ***Gold BPR • ** Silver BPR Author: 31% achieved an award (27% - 2013) * Bronze BPR

Transparency - GRESB Ranking Table 2014 Points Australia Listed 68 “Green Stars” Australia Non-Listed 63 Management = 64 * 0.30 Europe Listed 54 Implementation = 49 * 0.70 Asia Listed 51 >50 required in both categories to Nth America Listed 49 achieve “green star” status Europe Non-listed 47 Asia Non-listed 44 Nth America Non-listed 42 Global Listed scored 52 v Global non-listed scored 45 Author:

EPRA Research Daily, weekly, monthly & ad-hoc tailored research and data output based on the Global Index constituents Author: 25