SHAPING THE FACE OF RETAIL IN POLAND Introduction 1 EPP Management - PowerPoint PPT Presentation

SHAPING THE FACE OF RETAIL IN POLAND

Introduction 1 EPP Management EPP Executive Team Hadley Dean Jacek Baginski Rafal Kwiatkowski Micha ł Ś wierczy ń ski Wojciech Knawa CEO CFO COO Head of PM Head of AM • • • • • More than 20 years of real Senior financial executive Over 20 years of real 17 years of experience in Over 15 years of real estate experience with over 20 years of estate experience across commercial real estate estate experience gained experience across CEE Poland, Russia and at, among others, Echo • • Most recently served as Most recently served as Germany Investment • the CEO of Compass Member of a number of the Managing Director at Offices’ EMEA operations • • Management Boards and Most recently served as a Echo Investment Property Most recently served as CFO in companies listed Venture Partner and the Management, where he the Chief Legal Officer at • Prior to Compass, served on the Warsaw Stock Head of Retail at Griffin managed all retail and Echo Investment, being as a Managing Partner of Exchange and those Real Estate office assets directly involved in Eastern Europe at Colliers controlled by large private financing, leasing, sales • • International, where he In 2004-2007 Associate Prior to joining EPP, equity funds in CEE and acquisitions managed business across Director at JLL Russia worked in the hotel and • • 12 countries, 16 offices Recently, Member of the office sectors, selling hotel In 2005-2007 Member of • In 1997-2004 Head of and more than 1,000 Management Board and projects and the Supervisory Board at Leasing and Development employees CFO of Empik Media & commercialising office Barlinek and Opoczno at ECE Fashion, one of the assets • In 2017 received the Projektmanagement largest retail groups in EuroBuild Real Estate Poland Personality of the Year (2017) award

Introduction 2 Agenda Company at a glance 1 Key investment highlights 2 Poland – attractive investment destination 3 M1 portfolio update , Marcelin and Developments 4 Update on the office disposal process 5 Historical Financials 6 Conclusion 7

3 Section 1 Company at a glance

4 Section 1 EPP at a glance EPP’s geographical footprint Overview Key performance indicators • EPP is the leading retail property group in Poland with c.€2bn Occupancy of investment properties 98.6 96.0 (%) • One of the most experienced retail property and asset Szczecin management team in Central & Eastern Europe (CEE) Lomza WALT • Presence in the majority of key cities throughout Poland with 5.3 3.8 Inowroclaw (years) Wloclawek coverage of 40% of the national catchment area Poznan Warsaw • Experienced Executive Board LTV 47.4 • Strong institutional shareholders: Redefine (36.2% stake), Kalisz (%) (target of 45) Lodz Oaktree & PIMCO (shareholders in Echo Prime which holds a Bełchatow 6.4% stake in EPP) Jelenia Gora Debt WAM Wrocław • Raised c.€360m of new equity post IPO 3.9 Kielce (years) Zamosc Czeladz Business model Klodzko Zabrze EBITDA interest Krakow 4.2 coverage (2017A) • 1 Pure Polish play, with retail focus Przemysl (x) • 2 Each asset must be dominant, defensible and sustainable Occupancy cost 13.5 ratio • 3 Organic and inorganic growth to obtain scale (2017A) (%) Retail development 18 2 Retail assets 4 • Highly proactive asset and property management projects Rent to sales 5 • 10.3 Long-standing tenant relationships 6 18 (%) Office assets Cities • 6 Continued deleveraging Source: Company information

Section 1 5 EPP at a glance Key corporate events Jan-16: Aug-16: Apr-17: Jan-18: Equity raise of €113m through Incorporation of EPP in the EPP converted to Equity raise of €149m through Netherlands as a private a public company a private placement to finance limited liability company a private acquisition of M1 tranche I placement Jun-16: Aug/Sep-16: Acquisition of 75% stake by Redefine Listing on the Luxembourg Stock Exchange and subsequent decrease of stake to (Aug-16) and conducted a private placement listing (€96m) on Johannesburg Stock 50% by on-sale of shares to a consortium of investors Exchange (Sep-16) Developments since listing 1,2 €805m increase in portfolio value 339k sqm increase in Signing of the agreement to Galaxy extension opened in 11 since incorporation retail GLA acquire M1 portfolio consisting of Nov-17 acquisitions (€3.1m NOI uplift) (Jun-16) 4 (since Q2 2016) 12 assets 153 Outlet Park extension opened in Sep-17 192k GLA sqm of retail developments in 1,428 retail leases 3 employees (€1.0m NOI uplift) Warsaw currently Source: EPP, 2017 Financial Results Presentation 1 As of March 2018 3 Excluding leases of tranche I of M1 portfolio which are secured by a master lease until 2024 2 Incl. M1 tranche I acquisition 4 Excluding JVs

Section 1 6 EPP at a glance Investment journey since listing to position EPP as the leading retail landlord in Poland Recent portfolio transactions Retail Retail Retail Office Office Office Acquisition of Acquisition of Acquisition of Sale of Sale of Tryton Sale of A4 Business Galeria Mlociny 1 West Gate Zakopianka Galeria Solna Park (I, II, III) Business House Date: May-17 Date: Jun-17 Date: Jul-17 Date: Dec-17 Date: Dec-17 Date: Dec-17 Location: Krakow Location: Warsaw Location: Inowroclaw Location: Katowice Location: Wroclaw Location: Gdansk GLA: 26,142 GLA: 81,900 GLA: 23,627 GLA: 16,533 GLA: 23,875 2 GLA: 29,959 +252k sqm of M1 Oct Nov Dec 2017 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 Jan retail space 3 Office Retail Office Retail Office Retail Acquisition of ROFO office portfolio Development of A4 Business Park Acquisition of Blackstone portfolio Acquisition of M1 portfolio (tranche I) O3 Business Campus Towarowa 22 1 (III) Date: Dec-16 Date: Jun-17 Date: Jan-18 (II) Date: Dec-16 Date: Apr-17 Date: Dec-17 O3 Business Campus (I) Wzorcownia Location: Czeladz Completion: 2022/2023 Location: Katowice Location: Krakow Location: Krakow Location: Wloclawek GLA: 53,600 Location: Warsaw GLA: 11,900 GLA: 18,950 GLA: 18,755 GLA: 25,455 GLA: 110,000 Location: Zabrze GLA: 52,800 Tryton Business House Twierdza Zamosc Location: Gdansk Location: Zamosc GLA: 23,537 2 GLA: 23,806 Location: Krakow GLA: 49,600 Symetris (I) Twierdza Klodzko Location: Lodz Location: Lodz Location: Klodzko GLA: 38,400 GLA: 9,595 GLA: 23,039 Source: EPP 1 30% owned by Echo Investment S.A. until development phase completion 3 Tranche II and III of M1 portfolio Acquisitions Disposals 2 Tryton Business House GLA increased from 23,537 sqm in Q4 2016 to 23,875 sqm in Q3 2017

Section 1 7 EPP at a glance Value of portfolio Key operating metrics (€m) Footfall and sales No. of units GLA (sqm) LFL (%) 1,822 7.0 1,428 4 638 116 Retail 359 968 4.6 972 194 299 3.0 3.0 1,347 444 2016 2017 2016 2017 2016 2017 2016 2017 Standing value M1 tranche I Developments Footfall Sales (€m) Occupancy (%) No. of tenants GLA (sqm) 95.8 96.0 Office 387 176 110 309 94 137 2016 2017 2016 2017 2016 2017 2016 2017 Portfolio breakdown 1,2 Tenant mix 1,3 WAULT: 3.8 years WAULT: 5.3 years 6% 15% 48% 5% Fair value Total 18% income 41% 54% GLA GLA 82% 46% 85% International Polish chain Local Retail Office tenants tenants tenants Source: EPP, 2017 Financial Results Presentation 1 As of January 2018 3 M1 tranche I not included due to existing masterlease agreement 2 Incl. M1 tranche I acquisition concluded in January 2018 4 Excluding leases of tranche I of M1 portfolio which are secured by a master lease until 2024

Section 1 8 Why focus on retail in Poland? Lack of high-street retail proposition prior to transformation enabled rapid growth in the number of shopping centres in Poland, which remain the dominant format with 71% of market share, and makes the EPP portfolio particularly attractive Prior to transformation: 1989-1995: 1995-2000: 2000-2005: 2005 onwards: • • • • • 95% of retailing controlled by Strong reliance on outdoor First hypermarkets opened by Auchan, Real, Carrefour Large foreign real estate players Multi-level urban schemes government owned entities market places and Geant invest in large malls in Poland • Introduction of new formats: (e.g. Klepierre, Unibail-Rodamco) • • • Only other formats were temporary Emergence of small isolated First three shopping malls built in Warsaw (Panorama, discounters, convenience • and improvised selling points stores in sporadic Promenada, Bogusz Centre) to cater to the needs of Hypermarkets complemented with stores, outlet parks unconnected locations wealthier clients large fashion offering • Development of shopping • Other formats included a few department stores centres in smaller cities (Domy Towarowe: Wars, Sawa & Junior, Smyk) • Starting from 2015, development • Opening of the first M1 in 1997 of mixed-use schemes Prior 1989 1995 2000 2005 Limited new supply Decreasing prime yields Prime retail yields in major regional Polish cities (%) New supply of shopping centres stock (000s sqm) 743 8.0 615 612 607 7.5 7.0 6.8 475 459 452 443 6.3 425 6.0 6.0 6.0 6.0 6.0 399 5.5 5.3 5.0 253 250 2005A 2006 2007A 2008 2009A 2010 2011A 2012 2013A 2014 2015A 2016 2017A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018F 2019F 2020F Source: CBRE, JLL, Savills