EDMOND DE ROTHSCHILD REAL ESTATE SICAV CAPITAL INCREASE 20 - PowerPoint PPT Presentation

EDMOND DE ROTHSCHILD REAL ESTATE SICAV CAPITAL INCREASE 20 SEPTEMBER 2019 www.edr-realestatesicav.ch EDMOND DE ROTHSCHILD, L’AUDACE DE BÂTIR L’AVENIR.

 REMINDER ON 2018/2019 RESULTS  STRATEGIC FOCUS 2019/2023  CAPITAL INCREASE EDMOND DE ROTHSCHILD, L’AUDACE DE BÂTIR L’AVENIR. 2

MAIN FACTS ERRES - SWISS 66 buildings CHF 58 mio rental income 2’085 apartments March 2018 March 2019  NAV : 878 Mio CHF 894 Mio CHF  Real Estate GAV : 1’243 Mio CHF 1’211 Mio CHF  NAV / share: 114.97 117.08  Share Premium : 18.99% 18.64%  LTV Ratio : 28.47% 29.18%  EBIT margin: 73.44% 71.74%  Rental loss rate: 3.03% 3.14%  TER (GAV) : 0.70% 0.70%  Investment yield (TR) 4.96% 4.94% EDMOND DE ROTHSCHILD 4

HISTORICAL PERFORMANCE TER & VACANCY RATE EDMOND DE ROTHSCHILD 5

HISTORICAL PERFORMANCE INVESTMENT YIELD & DIVIDEND EDMOND DE ROTHSCHILD 6

STRATEGIC FOCUS 2019-2023 INITIAL CONSIDERATIONS  OBJECTIVE : MAINTAIN DIVIDEND DISTRIBUTION GROWTH  CONSTRAINTS : HIGH DEBT RATIO OF 31% RISK / RETURN PROFILE OF BUILDINGS  OPPORTUNITY : REDUCTION OF FUND COSTS (TER & TAXES) EDMOND DE ROTHSCHILD 8

STRATEGIC FOCUS 2019-2023  INVESTMENT CRITERIA › Type 1 : Quality assets in urban areas at market price (residential or mixed) › Type 2 : Assets to be redeveloped or repositioned with a minimum risk premium of 20 bps › Type 3 : Commercial assets with net yields higher than the average of the portfolio EDMOND DE ROTHSCHILD 9

STRATEGIC FOCUS 2019-2023  INVESTMENT CRITERIA › Only located in agglomerations as descibed by « Bundesamt für Statistik » › Reasonable and sustainable rent levels › ESG Criteria : (1) Energy label or (2) identified program of improvements over 5 to 10 years. › Target size : 5 to 100 MCHF in order to ensure future liquidity › Residential + Mixed > 66% › Focus Romandie > 75% EDMOND DE ROTHSCHILD 10

STRATEGIC FOCUS 2019-2023  DIVESTMENT CRITERIA › Planned and selective divestment program in order to cristallise value and provide an additional stream of revenue. › Criteria : - Risk mitigation (tenant, vacancy, location, future CAPEX, timing of commercial leases…) - Sub- optimal yield due to loss of revenues or high owner’s costs - Realization of substantial capital gain - Exceptional price conditions - Tax conditions - Loss of rental income can be compensated on a new acquisition EDMOND DE ROTHSCHILD 11

STRATEGIC FOCUS 2019-2023  GROWTH OBJECTIVES › Reduction of the debt ratio between 25% et 28% in order to have a margin of safety against regulatory constraints. Potential variations of +/- 2% depending construction projects or capital increases. › Take advantage of the improved tax treatment in several cantons › Pursue TER reduction › Real estate portfolio of 2’000 MCHF within 5 years. › Capital increases subject to market conditions and secured deal flow based on acquisition criteria  DIVIDEND DISTRIBUTION PERSPECTIVES › Rental income distribution : Target at 3,4 CHF/share as per March 2019. › Potential fluctuation : +/- 0,05 CHF related to actual LTV and buildings under construction › Capital gain distribution : Target of 0,2 CHF/share in relation to sales realized in the previous year › Total annual distribution over the period 2019-2023 : 3,5 to 3,6 CHF/share EDMOND DE ROTHSCHILD 12

 BUILDINGS UNDER CONSTRUCTION AND RENOVATION  SIGNED ACQUISITIONS  DEBT REDUCTION  DIVIDEND PERSPECTIVES

BUILDINGS UNDER CONSTRUCTION LES VERGERS – MEYRIN – GE Ongoing construction of 4 buildings with rental apartments under state controlled regime (ZD-loc), storage and indoor parking spaces.  Start of work in June 2018  Delivery Q3 2020  Minergie building  Total cost after completion 63.8 MCHF  Tenancy schedule 2.9 MCHF  Gross yield 4.54%  Net yield : 3,7% EDMOND DE ROTHSCHILD 14

BUILDINGS UNDER RENOVATION SOMMERHALDSTRASSE – BRUGG (AG) Renovation of 2 residential buildings with 102 apartements  Initial building cost: 30.3 MCHF  Renovation cost: 12.8 MCHF  Complete renovation of the building and 102 apartments on the occupied site  Works already completed on the 1st building  Rent increases in the process of being implemented  Net yield targeted above 4 % EDMOND DE ROTHSCHILD 15

RECENT ACQUISITION CONSTRUCTION BLAUACKER – KONIZ (BE) Construction of a residential building with retail ground floor  29 apartments and 1 ’ 693 m2 of commercial area  Delivery Q1 2021  Minergie building  Acquisition price 18.6 MCHF  Tenancy schedule 1.1 MCHF  Net yield 3.89% EDMOND DE ROTHSCHILD 16

SIGNED ACQUISITIONS Portfolio 1 VERNIER (GE) Acquisition of a building with 104 apartments under construction in a new area of Geneva  Well located and close to public transport  Minergie building  Delivery Q4 2021  Acquisition price 58 MCHF  Rental income 2.2 MCHF  Rents controlled by Canton Geneva  Net yield 3.20 % Additional tranche for 113 apartments under exclusivity. EDMOND DE ROTHSCHILD 17

SIGNED ACQUISITIONS Portfolio 1 PÂLA – BULLE (FR) Acquisition of a new residential building with 55 apartments  Delivery Q1 2020  High Energy efficiency (HPE)  Acquisition price 20.5 MCHF  Rental income 969 KCHF  Rental guarantee for 2 years  Net yield 4.03% EDMOND DE ROTHSCHILD 18

ACQUISITIONS UNDER EXCLUSIVITY Portfolio 2 LEON-GAUD 7 – GENEVE (GE)  Prime mixed building very well located in the center of Geneva  12 large apartments and 416 m2 of commercial area  Share deal of 14.6 MCHF  Transfer of ownership 1st October 2019  Rental income 568 KCHF  Rental reserve to be deployed (38% according to WP)  Current net yield 3.07% EDMOND DE ROTHSCHILD 19

ACQUISITIONS UNDER EXCLUSIVITY Portfolio 2 ARCANGIER 10/12 – LA TOUR-DE-PEILZ (VD)  Residential building with 26 apartments  Transfer of ownership 1st october 2019  Acquisition price 10 MCHF  Rental income 427 KCHF  Rental reserve to be deployed (25% according to WP)  Net yield 3.32% EDMOND DE ROTHSCHILD 20

ACQUISITIONS UNDER EXCLUSIVITY Portfolio 2 GIULIO VICARI 30 – LUGANO (TI)  Residential building with 19 apartments  Transfer of ownership 1st october 2019  Acquisition price 5.8 MCHF  Rental income 269 KCHF  Net yield 3.78% EDMOND DE ROTHSCHILD 21

SALES ZURCHERSTRASSE 86 - UZNACH (SG)  Historical cost : 12.65 MCHF  Valuation 31.03.19 : 12.1 MCHF  Selling price: 13.25 MCHF  Capital gain on current valuation: 0.835 MCHF  Rental income SOLL: 675 KCHF  Rental income IST: 600KCHF  Vacancy rate : 11% (almost all-time-low since acquisition)  Gross yield on IST : 4.5%  Net yield on IST : 3.3% EDMOND DE ROTHSCHILD 22

CAPITAL INCREASE ACQUISITION SUMMARY Price Buildings Canton Use Gross yield Net yield (MCHF) 11% KONIZ BE MIXED 18.6 4.54% 3.89% VERNIER GE RESIDENTIAL 58 3.76% 3.20% 89% PÂLA FR RESIDENTIAL 20.5 4.57% 4.03% Residential Commercial 5% LEON-GAUD GE MIXED 14.6 3.89% 3.07% 20% ARCANGIER VD RESIDENTIAL 10 4.12% 3.32% 8% 51% GIULIO TI RESIDENTIAL 5.8 4.55% 3.78% 16% VICARO UZNACH SG MIXED - 13.3 - 4.54% - 3.30% GE FR VD BE TI TOTAL 114.2 4.05% 3.47% EDMOND DE ROTHSCHILD 23

DEBT REDUCTION LTV impact 31.03.19 20.09.2019 31.03.2020 31.03.2021 31.03.2022 GAV 1’211 MCHF 1’305 MCHF 1’365 MCHF 1’386 MCHF 1’479 MCHF Debt 353 MCHF 391 MCHF 337 MCHF 366 MCHF 422 MCHF  Short term repayment End September 2019 LTV 29 % 31 % 24,5 % 26,5 % 28,5 % 62 MCHF Debt distribution (Sept 2019) End February 2020 61'580'000 6 MCHF 39'810'000 47'500'000 34'300'000 43'000'000 40'115'000 39'500'000 34'860'000 30'975'000 8'900'000 - 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 > 2028 EDMOND DE ROTHSCHILD 24

CAPITAL INCREASE DETAILS OF THE TRANSACTION Amount CHF 179 millions 117.08 CHF/share Issue price 22 August 2019 Official confirmation of the issue From 22 August to 30 August 2019 Presentation of the capital increase to investors 2 September – 13 September 2019 Subscription period Listed on SIX Subscription rights 2 September – 11 September 2019 Subscription rights listing period 20 September 2019 Issue of new shares 25