MAS REAL ESTATE INC INVESTOR PRESENTATION – OCTOBER 2016
The Arches, New Waverley Scottish Commercial Project of the year
CONTENTS Strategy update . . . . . . . . . . . . . .2 Platform for growth . . . . . . . . . . .5 » Projects and pipeline overview » Capital allocation Highlights . . . . . . . . . . . . . . . . . . . .8 Pipeline . . . . . . . . . . . . . . . . . . . . . .9 Projects update . . . . . . . . . . . . . . 10 » Income generating » Development Outlook . . . . . . . . . . . . . . . . . . . . 24 Hub Hotel, New Waverley, Edinburgh 1 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
STRATEGY UPDATE • Delivering sustainable growing distribution per share • Development and income generating property focus • Capital allocation to new markets for continued growth Central and Eastern Europe » Western Europe » • Optimising capital management Equity fully invested with fmexibility » “POSITIONED TO DELIVER to respond fast to opportunities STRONG GROWTH IN Gearing current 12% to target » 40-50% LTV DISTRIBUTIONS IN THE YEARS AHEAD.” The Arches, New Waverley, Edinburgh 2 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016
POSITIONING FOR LONG-TERM GROWTH INCOME-GENERATING PROPERTY REFINANCED & PROCEEDS INVESTED IN FURTHER DEVELOPMENTS 500 EURO MILLION 2015 450 2016 OPTIMISED 400 350 300 250 200 150 100 50 0 INCOME-GENERATING PROPERTY DEVELOPMENT PROPERTY COMPLETED DEVELOPMENTS HELD FOR INCOME PREVIOUS LISTED INVESTMENTS, TREASURY, CASH AND PROCEEDS FROM REFINANCING INVESTED IN NEW DEVELOPMENTS AND ACCRETIVE INCOME GENERATING PROPERTY 3 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
EPS POTENTIAL 5,8 2,0 10,0 EURO MILLION 9,0 8,1 8,0 7,0 6,0 5,4 1,1 5,0 4,3 4,0 3,0 2,0 1,0 - NRI ADMIN PLUS TAX RECURRING EPS NRI – OPTIMISED FINANCE COST TO 40% LTV RECURRING EPS POTENTIAL • Current EPS potential implies near term growth of 80% per share to 8.1 euro cents per share • Assumes no further equity issues, gearing to 40% LTV, and full investment of assets in income generating properties at 6.5% net yield 4 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016
PLATFORM FOR GROWTH • CEE Prime Kapital Development joint venture €20m in 40% equity stake » €200m in 7.5% preference shares » Expected portfolio of €800m to €1bn in 3-5yrs » +15% expected IRR » • CEE income generating property co-investment with Prime Kapital Effjcient alignment of interest via co-investment » 80/20 full recourse loan model with no management fees » • New Waverley Phase II Offjces » Edinburgh University » • Western European developments Munich » • Team Internal team can support signifjcant further growth at minimal marginal cost » Co-investment model with Prime Kapital in CEE development and investment » 5 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
CAPITAL ALLOCATION UK 30 JUNE 2016 Edinburgh Offjce Isle of Man POST YEAR-END Headquarters GERMANY POLAND 12 2 COMMITTED 16 21 1 London Offjce EXCLUSIVITY Frankfurt Offjce ROMANIA AND OTHER CEE 1 1 1 3 3 1 SWITZERLAND WESTERN EUROPE CEE Prime Kapital Existing and new New developments SLOVENIA Offjce developments Existing income New income generating properties generating property MAS and associate offjces acquisitions Properties 6 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016
PRIME KAPITAL EXECUTIVES MARTIN SLABBERT DEWALD JOUBERT BCom, LLB (cum laude), MCom (cum laude), Dip FMI, CF (England and Wales) BCom, LLB Co-founded and developed NEPI through acquisitions and developments into 18 years of experience in private equity and tax advisory. the third largest retail focused REIT in continental Europe in terms of market 2016-present: Partner, Prime Kapital; 2008-2016: Founder and Co-managing capitalization and distributable profjts. 2015-present: Partner, Prime Kapital; director, Argosy Capital (a privately owned private equity investment 2007-2015: Co-founder and CEO, New Europe Property Investments plc; business); 2001-2008: Partner, Maitland Group; Prior to 2001: Corporate tax 2005-2006: Partner, Deloitte Central Europe (Corporate Finance); Prior to advisory services, Arthur Andersen; Forensic investigator for serious tax fraud, 2005: CFO Premier Foods on secondment from Nedbank; General Manager in South African Revenue Service; Other: independent non-executive director, the capital management cluster of the Nedbank Group; Senior Vice-President serving throughout his career on the boards of private and listed companies. for the shareholders’ funds, member of the Executive Committee at Nedcor Investment Bank; HSBC Investment Services (Africa) (Pty); Arthur Andersen. VICTOR SEMIONOV MIHAIL VASILESCU BCom BCom (top student), MCom 17 years of experience in corporate fjnance and property investment. 13 years of experience in property fjnance and property investment. 2015-present: Partner, Prime Kapital; 2007-2015: Co-founder, CFO and later 2015-present: Partner, Prime Kapital; 2008-2015: Founder and CEO, Rampart COO of New Europe Property Investments plc; 1999-2006: Assistant Director, (corporate fjnance and property advisory); Prior to 2008: Head of Project Deloitte Central Europe (Corporate Finance). Finance, Banca Romaneasca; Senior Relationship Manager Bancpost. MICHAEL BEUX BOGDAN BALAN Civil Eng Bcom 27 years of experience in construction engineering and project management. 13 years of experience in property fjnance and property investment. 2015-present: Partner, Prime Kapital; 2010-2015: Head of construction and 2015-present: Acquisitions, Prime Kapital; 2010-2015: Partner, Rampart project management, New Europe Property Investments plc; 2006-2010: (corporate fjnance and property advisory); Prior to 2010: Senior Relationship Projects Director, Gleeds Project & Construction Management (Romania); Manager, Banca Romaneasca; PwC. 2000-2005: Manager, Kier International (Romania offjce); 1989-2000: Construction contracting, Group Five Civils (South Africa). CSABA TOTH TIBERIU SMARANDA Bcom BCom 18 years of experience of which 15 years in property development and asset 15 years of experience in commercial property development, leasing and management. asset management. 2016-present: Partner, Prime Kapital; 2009-2016: Senior 2016-present: Developments, Prime Kapital; 2011-2015: Development Director, Executive and later Executive Director at New Europe Property Investments TriGranit Development; 2009-2011: CEO, TriGranit Management; 2006- plc responsible for leasing and retail asset management with a leading role 2009: Deputy Chief-Development Offjcer, TriGranit Development; Prior to in retail development; 2001-2009: Development and Expansion Director, 2006: Senior Financial Analyst, Business Development Manager at TriGranit Flamingo Group. Development. 7 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
HIGHLIGHTS • To year end June 2016 • Further post year-end: » 63% increase in rental income to €14.2m of which c5% organic growth from » Further rental income of €6.2m existing portfolio acquired, with contracted escalations » €78.2m increase in income-generating property to €242.6m with total and turnover-linked contracted rent of €248.4m » Sold non-core asset, Sirius real » Developments completed: Whitbread hotels, Arches and retail estate realising €47.2m » Developments progressed: Adagio hotel and retail due December 2016 » Negotiated €86.7m of further debt » Liquidity in traded share increased 87% and SAPY Index inclusion against income-generating portfolio » R1.2bn new equity raised for new acquisitions and to fund new developments at sub 2.5% all in cost » Prime Kapital Development and Co-investment Joint Ventures » First major CEE acquisition agreed EVOLUTION OF PASSING RENT – INCOME-GENERATING PROPERTY PORTFOLIO VALUE EURO MILLION 26 400 EURO MILLION 2015 ACTUAL RENT 24 336,6 2016 350 PASSING RENT 2016 ADJUSTED ADD 22 300 TOTAL 242,6 20 250 18 200 164,4 16 150 14 100 44,3 44,1 40,6 39,8 12 50 24,9 7,0 10 0 RENT RECEIVED ANNUAL PASSING MUNICH EDEKA PORTFOLIO 2 ADAGIO ANNUAL PASSING INCOME-GENERATING PROPERTY DEVELOPMENT PROPERTY LAND BANK 30 JUNE 2016 RENT 30 JUNE 2016 (EXCL. RETAIL) RENT – SECURED PORTFOLIO 8 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016
PIPELINE OTHER CEE ACQUISITIONS INCOME-GENERATING CEE ACQUISITIONS FURTHER PIPELINE EXCLUSIVITY NEW WAVERLEY PHASE II COMMITTED DEVELOPMENT MUNICH PRIME KAPITAL 0 20 40 60 80 100 120 140 160 180 200 € 30M € 200M PRIME KAPITAL (DP) - COMMITTED NW PHASE II (DP) - EXCLUSIVE € 180M CEE (IG) - COMMITTED OTHER CEE ACQUISITIONS (IG) – FURTHER PIPELINE MUNICH (DP) - EXCLUSIVE € 50M € 106M 9 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
PROJECTS UPDATE The Arches, New Waverley, Edinburgh 10 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016
Adagio Hotel, Phase II site, New Waverley, Edinburgh 11 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC
PRIME KAPITAL DEVELOPMENT JV UPDATE • Under development - €35 million at an average yield on cost of +11% • Controlled Pipeline – €250million • Pipeline under due diligence – €130million • Further opportunities - €150million 12 MAS REAL ESTATE INC INVESTOR PRESENTATION 2016 Bucharest North Value Centre
PRIME KAPITAL DEVELOPMENT JV UPDATE 13 INVESTOR PRESENTATION 2016 MAS REAL ESTATE INC Bucharest North Value Centre
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