Brookfield Property Partners L.P. Investor Meeting September 29, 2016
Table of Contents Our Business 3 Brian Kingston, Senior Managing Partner, Chief Executive Officer Core Office 17 Ric Clark, Senior Managing Partner, Chairman Urban Multifamily 35 Lowell Baron, Managing Partner, Head of Multifamily Retail Business 47 Ashley Lawrence, Senior Vice President, Asset Management – Retail Opportunistic Investment Strategy 64 Brian Kingston, Senior Managing Partner, Chief Executive Officer Financial Update 75 Bryan Davis, Managing Partner, Chief Financial Officer Wrap-up / Q&A 89 Brian Kingston, Senior Managing Partner, Chief Executive Officer 2
Our Business – Brian Kingston 3
Brookfield Property Partners is Brookfield’s primary vehicle to make investments across all strategies in real estate Brookfield Property Partners L.P. (BPY) Through Participation in Direct Brookfield Private Funds Core Core-Plus Value-Add Opportunistic 4
Our goal is to be the leading global owner & operator of high-quality real estate, generating an attractive total return for our unitholders comprised of: Current yield backed by stable cash flow from a diversified portfolio of assets 5-8% annual distribution growth Capital appreciation of our asset base 5
Stable, predictable cash flows from our Core Office and Retail units are enhanced by our higher-yielding Opportunistic strategies Core Office & Retail Opportunistic 10% to 12% Total Returns 20% Total Returns • 20% of BPY’s balance sheet • Currently 80% of BPY’s balance sheet • • Investing in high-quality, trophy assets Investing in mispriced portfolios, properties with significant value-add • Provides stable cash flow with growth and capital • appreciation Provides capital appreciation 6
Proven approach to investing • We are value-oriented, counter-cyclical investors • We specialize in executing multi-faceted transactions that allow us to acquire high-quality assets at a discount to replacement cost • We leverage our business units to enhance the value of our investments • We have the flexibility to allocate capital to the sectors and geographies with the best risk-adjusted returns • We continually recycle capital from stabilized assets to higher-yielding assets in order to build long-term value for unitholders 7
Brookfield Property Partners has undergone significant, transformative growth in the three years since spin-out 8
Progress since spin- out… • Completed $5 billion acquisition of Brookfield Office Properties and reduced balance sheet concentration in public securities from 80% to 30% • Invested $1 billion in General Growth Properties to increase interest to 34% 1 • Invested $1.8 billion alongside our joint venture partner to privatize Canary Wharf and increase our interest to 50% • Issued $6 billion of perpetual equity • Recycled $5 billion of capital out of mature office and retail assets • Invested $3 billion in new Brookfield-sponsored funds Represents BPY’s fully diluted interest in GGP 1) 9
Through organic growth in existing markets… 2013 UK & Europe $4B Canada $8B Australia $9B United States $70B Brazil $4B 10
… and expansion into new markets we have grown AUM to over $146 Billion 1 Today UK & Europe $23B Canada $7B China - $0.5B Australia Middle East - $0.1B $7B United States $105B India - $1.2B Brazil $3B Figure represents AUM of Brookfield Property Group. BPY’s proportionate total assets have grown to approxim ately $66 billion 1) 11
We have also expanded into a number of new asset classes… 2013 TODAY PRIMARY Traditional real estate sectors that Core Office Core Office have deep public and private Core Retail Core Retail institutional capital markets Multifamily Multifamily Logistics ESTABLISHED Alternative real estate sectors that Suburban Office Suburban Office have deep public and private capital Alternate Retail Alternate Retail markets Hotels Net Leases NON-TRADITIONAL Some public market presence and Self-Storage analyst coverage but highly Manufactured fragmented and largely privately held Housing Student Housing 12
…and built a diversified portfolio of premier properties • 149 premier office properties totaling 101 million square feet (“msf”) in gateway markets around the world • 10 msf of office and multifamily development projects currently underway • Interest in 128 best-in-class retail properties totaling 125 msf throughout the United States • High-quality assets with operational upside including: • 35,000 multifamily units in the United States • 54 msf of industrial in modern logistics properties in North America and Europe • 18,400 hotel rooms throughout the United States, Europe and Australia • Over 300 triple net lease properties throughout the United States • Over 150 self-storage assets in the United States • 13 student housing properties in the United Kingdom 13
...Which has led to significant growth of business 2013 TODAY 31 66 Total Assets ($ billions) 113% 13 22 Total Equity ( $ billions ) 69% 570 950+ Company FFO ($ millions) 67% 25 30 20% Value per Unit ($) 1.12 1.00 12% Distribution per Unit ($) 14
Continue to be focused on key objectives Enhance the flexibility of our balance sheet In 2016: • Refinanced corporate credit facility, upsizing capacity from $2.0 to $2.5 billion, reducing interest costs by 55bps and extending maturity to 2019 • BBB credit rating from S&P • Issued C$200 million of perpetual preferred shares, using proceeds to repay on-demand capital securities Recycle capital • $1.5 billion of net equity year to date; on target for $2.0 billion in 2016 • Proceeds redeployed: • Repayment of BPO acquisition facility • Private fund capital calls • Development funding • Repurchase of units 15
Continue to be focused on key objectives Stabilize occupancy in Core Office and Retail portfolios • Flat occupancy in existing office portfolio at 92% • Development pre-leasing increased at One Manhattan West, Principal Place and Brookfield Place Calgary • Stable occupancy in Core Retail portfolio at 95% Share price to reflect value of business • Active investor relations program • Index inclusion • Buying back units 16
Core Office – Ric Clark 17
Brookfield’s Core Office business features an iconic, irreplaceable portfolio of the world’s most sought -after commercial properties 18
Iconic Properties Premier locations, high-quality properties in the most dynamic, resilient cities around the globe Brookfield Place, New York City Canary Wharf, London Potsdamer Platz, Berlin Brookfield Place, Toronto Darling Park, Sydney Brookfield Place, Perth 19
Comprehensive Capabilities We offer a full suite of real estate services for our tenants , assuring them of best-in-class quality and service throughout the lifecycle of our properties “…Of our top 20 office tenants, 75% are in Brookfield buildings in more than one city and 50% are in buildings in more than three cities, which speaks to the consistency and quality of our properties.” 20
Scale of Operations We have $15 billion of capital invested in Core Office 149 18 PROPERTIES CITIES 101 msf 6 PORTFOLIO SIZE COUNTRIES 92 % 1,600 EMPLOYEES OCCUPANCY 8.3 yrs 9 msf AVERAGE AVERAGE ANNUAL LEASE TERM LEASING VOLUME 21
Stable Income Long average lease life, market diversification and high-quality tenants produce very stable income NET OPERATING INCOME (US$ in millions) $ 2,000 Other Canada 14% $ 1,500 Australia 16% U.S. 50% $ 1,000 18% UK $ 500 1 2013 2014 2015 2016 1) Forecast to reflect increm ental NOI at Brookfield Place New York 22
Organic Growth Significant income growth driven by recently signed leases at Brookfield Place New York and increasing occupancy SAME PROPERTY NOI GROWTH (in natural currency) 14% 12% 10% 8% 6% 4% 2% 0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 23
We have been taking advantage of strong pricing and demand for stabilized office assets in select core markets to extract equity capital and reinvest in higher yielding opportunities 24
Asset Sales On track to achieve goal of raising $2 billion of equity from asset sales in 2016 Interest Cap Net Proceeds Property City Sold Rate (US$ Millions) World Square Retail Sydney 100% $ 200 4.2% Royal Centre Vancouver 100% 220 3.3% Principal Place London 50% 360 4.0% Two Ballston Plaza Greater Washington, DC 100% 60 5.6% Potsdamer Platz Berlin 25% 170 3.4% One New York Plaza New York City 33% 550 4.6% King Street Wharf Sydney 100% 30 4.9% One Shelley Street Sydney 100% 250 5.1% 4.2% Total $ 1,840 25
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