MAS REAL ESTATE INC RESULTS PRESENTATION Six-months ended 31 December 2016 Nova Park, Gorzow, Poland Nova Park, Gorzow, Poland
Nova Park, Poland MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 2
TABLE OF CONTENTS 1. Company profile 2. Distribution 3. Other metrics 4. Portfolio in figures 5. Recent additions to portfolio Edeka portfolio MIHA, Germany 6. Pipeline 7. Capital management 8. Outlook 9. Appendices - Management accounts Munich property, Germany MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 3
COMPANY PROFILE PROPERTY INVESTOR, DEVELOPER AND OPERATOR SEGMENT PROFILE BY VALUE MAS Real Estate Inc (“MAS”) is a commercial property investor, developer and operator listed on the main board of the Johannesburg Stock Exchange (“JSE”) and the Euro-MTF market of the Luxembourg Stock Exchange (“LuxSE”). € m Income-generating 406.4 €466.4 Developments BUSINESS STRATEGY 15.7 Land bank 44.3 million MAS’ strategy is to generate sustainable and growing distributable earnings per share by acquiring, developing and operating retail, o ffi ce, industrial, logistics and hotel assets in western Europe and central and eastern Europe (“CEE”). Where exceptional opportunities arise, the group will embark on mixed-use or residential developments with the view to either generate recurring income, or capital gains. The company aims to distribute all of its distributable earnings on a semi-annual basis, with distribution of capital and other profits at the discretion GEOGRAPHIC PROFILE BY PASSING RENT of the directors. MANAGEMENT € m Germany MAS is internally managed, combining investment, development and asset management skills. 15.7 UK €28.0 1 6.4 Developments are undertaken both directly and by teaming up with strong developers that Poland 4.7 have intimate knowledge of the local markets and by agreeing terms that lead to a strong million Switzerland 1.2 alignment of interests. FUNDING MAS is targeting a long-term aggregate portfolio LTV of 40%. This may fluctuate up to a maximum of 50% on a temporary basis as the portfolio grows. Long-term debt funding is SEGMENT PROFILE BY PASSING RENT preferred and interest rates are managed through the group’s hedging strategy. Developments are generally funded through equity and refinanced at completion. € m LONG-TERM INCOME FROM STRONG COVENANTS 19.5 Retail Industrial/logistics 4.9 MAS has assembled a high quality portfolio of commercial property and developments across €28.0 1 Hotel 3.6 western Europe and is currently expanding into CEE in two joint ventures with Prime Kapital, a million development joint venture and a co-investment joint venture focused on income-generating assets. At 31 December 2016 the portfolio had an outstanding weighted average lease term of 11,1 years, occupied by tenants with strong corporate covenants. 1 Includes turnover linked rent (Nova Park) of € 0,24m MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 4
Adagio, New Waverley, Scotland MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 5
DISTRIBUTION DISTRIBUTION PER SHARE 12.0 Euro cents Target distribution per share 9.89 1 H2 distribution per share 10.0 +30% H1 distribution per share 7.61 1 8.0 +30% 5.85 1 6.0 +30% 4.50 +34% 3.19 1 4.0 3.35 2.23 + 82 % 1.84 2.20 2.0 2.66 1.24 2.27 1.15 0.60 0.0 2014 2015 2016 2017 2018 2019 1 Based on the assumption that a stable macro-economic environment will prevail, that no major corporate failures will occur and that the investments and developments reported on above will progress in accordance with expectations. This forecast has not been reviewed or reported on by MAS’ auditors. MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 6
OTHER METRICS MEDIAN DAILY SHARE VOLUME INVESTMENT PROPERTY 1 140 Thousands of shares 466 500 124 Euro million 450 120 400 100 350 312 76 300 80 249 250 60 200 41 150 40 65 100 20 50 1 0 0 2014 2015 2016 H1 2017 2014 2015 2016 H1 2017 TOTAL ASSETS 1 LOAN TO VALUE 1 Euro million 600 569 Percentage 30 25 550 25 500 467 20 450 410 16 400 15 12 350 310 10 300 5 5 250 200 0 2014 2015 2016 H1 2017 2014 2015 2016 H1 2017 1 Data extracted from management accounts MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 7
PORTFOLIO IN FIGURES UK 4 2 GEOGRAPHIC PROFILE BY PASSING RENT 4% Edinburgh Isle of Man O ffi ce Headquarters GERMANY 17% 1 37 London € 28.0 1 POLAND O ffi ce million Frankfurt O ffi ce 56% 1 SWITZERLAND 8 1 23% SLOVENIA Prime Kapital O ffi ce Germany ROMANIA UK Poland Number of income-generating properties Switzerland Number of development properties 1 Includes turnover linked rent (Nova Park) of € 0,24m MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 8
PORTFOLIO IN FIGURES PASSING RENT BRIDGE 30.0 Euro million 28.0 SECTOR PROFILE BY PASSING RENT 0.2 26.0 4.7 1 13% 24.0 22.0 17% € 28.0 1 3.9 million 20.0 28.0 1.4 70% 18.0 0.9 +61.8% 16.0 14.0 17.3 Retail Industrial/Logistics 15.2 12.0 Hotel 10.0 Passing Passing Munich Adagio Edeka Nova Park Impact of Passing rent rent (exc retail) MIHA fx rent 31 Dec 30 Jun portfolio 31 Dec 1 Includes turnover linked rent (Nova Park) of € 0,24m 2015 2016 20161 Total Add Less MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 9
The Arches, New Waverley, in context, Edinburgh Adagio, New Waverley, Scotland MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 10
RECENT ADDITIONS TO THE PORTFOLIO EDEKA MIHA Acquired August 2016 Tenant Edeka Passing rent € 3.96m WALT 14.4 years A portfolio of 20 retail units based in Germany let on long- term leases to Edeka. The Edeka Group is the largest German supermarket corporation, holding a market share of approximately 26% in Germany and operating 4,100 stores under the Edeka brand. These portfolios were acquired because of the strong income Lehrte property, Germany Edeka store, Germany generated and ability to refinance at exceptionally low rates, as well as the key locations of the stores in the surrounding area . MUNICH PROPERTY Acquired August 2016 Tenant Volkswagen Passing rent € 0.89m WALT 2.0 years A logistics property located in Munich, Germany, let to Volkswagen AG, the leading German auto manufacturer. This property was acquired for its strategic location, asset management opportunities, and in time, it’s potential redevelopment. Premier Inn, new Waverley Munich property, Germany MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 11
RECENT ADDITIONS TO THE PORTFOLIO NOVA PARK Acquired December 2016 Tenant Multiple retail Passing rent 1 € 4.66m 2 WALT 4.5 years A dominant regional mall situated in Gorzów, Poland. Nova Park has a diversified mix of high quality tenants including international and national brands Bershka, C&A, CCC, Cropp Town, Deichman, Douglas, Empik, H&M, Intersport, KFC, Media Expert, Mohito, New Yorker, Piotr i Pavel, Pull&Bear, Pure Fitness, Reserved, Rossmann, Sephora, Sinsay, Smyk, Nova Park, Poland Edeka store, Germany Stradivarius and Super-Pharm. ADAGIO APARTHOTEL Completed December 2016 Tenant Adagio UK € 1.44m (excluding turnover rent) Passing rent WALT 19.9 years A 146 room aparthotel pre-let to Adagio, and guaranteed by both Accor and Pierre & Vacances, with frontage directly onto the Royal Mile, Edinburgh, together with a further 5 retail units. The development completed and has handed over to the tenant in late 2016. Munich property, Germany More information available at www.newwaverley.com Adagio Aparthotel, New Waverley, Scotland 1 MAS’ share of passing rent 2 Includes turnover linked rent of € 0,24m MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 12
PIPELINE – WESTERN EUROPE PHASE II NEW WAVERLEY - OFFICE Completion FY2019E Phase I of the New Waverley development delivered three hotels and twenty two new retail units. Phase II is now set to deliver a significant mix of new o ffi ce, retail and residential uses. The group has been chosen as development partner to deliver approximately 19 000 square metres of Grade A o ffi ce space on a pre-let to a significant tenant, and is now in the process of finalising detailed design and leasing agreements. The tenant will have an option to occupy an additional (up to) 3 000 square metres of further o ffi ce space which would be delivered adjacent to the first proposed o ffi ce building. Construction is set to begin in March 2017 for completion in mid-2019. Phase II New Waverley, Scotland PHASE II NEW WAVERLEY - RESIDENTIAL Completion FY2019E Pre-letting discussions for the balance of the site are also underway to residential sector occupiers and investors. Discussions are underway with city planners regarding various options. Attractive development and investment funding is being negotiated to fund the delivery of this next phase of development. Phase II, New Waverley Phase II New Waverley, Scotland MAS REAL ESTATE INC. RESULTS PRESENTATION SIX-MONTHS ENDED 31 DECEMBER 2016 13
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