CORESTATE Capital Group A Fully Integrated Real Estate Investment Manager

Transcription

1 CORESTATE Capital Group A Fully Integrated Real Estate Investment Manager 1

2 CORESTATE at a Glance Real Estate Investment Management Platform Real estate investment manager specialized in the creation and subsequent realization of core/core+, value add and opportunistic products Unique deal access through complementary sourcing platform (>1,500 agents) 476 FTEs in 26 offices in 6 countries with direct access to local real estate markets Equity raising and client relations through dedicated experts in Zurich, Frankfurt and Singapore Diversified client base: Institutional / Semi-institutional (family office, UHNWI) / Retail Covering the entire range of the value creation process and managing residential and commercial real estate assets Investment focus on home markets Germany and Austria with targeted expansion into other European markets The companies that belong to the CORESTATE Group have generated a transaction volume of approximately 27bn, CORESTATE typically coinvests in its products with alignment capital Total AuM of 16.1bn (1) Access to European key markets Main offices Singapore RE mgmt. offices Client relations hub Hamburg Hanover Berlin Magdeburg Essen Solingen Gera Luxembourg (HQ) Frankfurt Neu-Isenburg Pullach Vienna Zurich Madrid Note: All data as of Q if not indicated otherwise; the key figures of the Hannover Leasing Group have already been taken into account in the corporate figures of the CORESTATE Group if not indicated otherwise; the completion of the transaction is still subject to the conclusion of ownership control procedures by BaFin, which is expected to occur in the first half of (1) AuM 0.6bn, third-party property management mandates (Capera), estimated based on net rental income of assets in property management; (2) Including revenues from real estate management services, share of profit or loss from associates, net rental income, revenues from service charges, net gain from selling property holding companies, net gain from Sale of Investment Properties; (3) Derived from net income (incl. minorities) adjusted for severance cost, IPO costs and interest burden from shareholder loan; (4) Preliminary, before Review 2

3 CORESTATE s Key Investment Highlights What are the five most important pillars? 1 Fully Integrated Real Estate Investment Manager with Experienced Management Team and Strong Track Record Strong Asset / Investment Management 2 Strong and Structured Deal Sourcing Process Superior Investment Product 3 Large and Diversified Client Network Access to Capital 4 Highly Diversified Income Streams Throughout the Entire Investment Lifecycle; Strong Asset Light Cash Generation Sustainable Asset Light Returns 5 Significant Further Growth Potential Building on Existing Track Record Value Growth Unique opportunity to invest in a fully integrated real estate management platform with a significant growth potential through an attractive deal pipeline, increasing deal quantity & size, as well as expanding client and capital base 3

4 Activities 1 Fully Integrated Real Estate Investment Manager What Does CORESTATE s Investment Lifecycle Look Like? ~ 0-6 months ~ 3-10 years ~ 0-6 months Phase 1 Deal Structuring / Acquisition Phase 2 Hold Period Phase 3 Exit / Realization Off-Balance Structures Fund Management Sale Temporary On-Balance Warehousing Off-Balance Structures Investment Management Asset Management Property & Facility Management Market intelligence and investment opportunity sourcing through outstanding network on both asset and equity side Using warehousing concept to seize additional opportunities AIFM compliant management of investment structures Value creation through proactive asset and property management services Single asset/ privatizations Portfolio transactions Conversion into structured investment products Fees Transaction-related fees Management fees Transaction and performance-related fees Structured Investment Process & Regulatory Compliance (in-house AIFM) CORESTATE offers comprehensive solution to its clients providing all relevant investment management services in-house, generating various different types of fees over the entire investment lifecycle 4

5 Highly structured investment process 2 Strong and Structured Deal Sourcing How Does CORESTATE Access Deals? Complementary Sourcing Platform Deal sourcing through regular network CORESTATE receives offers from a broad network of agents (Colliers, Lührmann, ), advisors (CBRE, JLL, ), banks (Deutsche Bank, HSH Nordbank, ), real estate companies, servicers, insolvency receivers, etc. 1 Total deals offered: 1,401 Unique deal access through local agents Stringent inhouse review In addition CORESTATE benefits from a unique deal access through 1,500 local agents Over the last decade CORESTATE has been able to build up a reliable business relationship with agents by successfully performing numerous transactions, this cannot be easily copied by peers CORESTATE developed an internal stringent process to review the offers A team of experts for each asset class checks every single offer for fit of investment and principles 2 Fit of investment criteria and principles: 236 Process leads to massive deal flow: Proof of concept 2014 > 1,387 offers 2015 > 1,401 offers 2016 ytd > 1,580 offers 3 Signing: 39 Note: 2015 actual, figures of Hannover Leasing Group are not included CORESTATE has access to attractive deals, which are not widely marketed. In addition, CORESTATE has a strong reputation and is known for its fast deal execution and transaction reliability 5

6 Warehousing concept On-balance Warehouse Investment opportunities 2 Strong and Structured Deal Sourcing How Does Warehousing Enable CORESTATE to Seize Additional Opportunities? Warehousing rationale Investment period: 6 to 24 months Investment criteria: Investment products with pre-identified client demand Focus on assets with positive cash flow contribution and limited leverage No assets with substantial capex backlog Value creation & enhancement activities Conversion Off-balance investment products for clients Realizing short-term opportunities where timing is essential to secure acquisitions, as well as building sizeable seed portfolios to particularly attract institutional clients 6

7 3 Large and Diversified (Institutional) Client Network How Did CORESTATE s Client Base Develop? Equity inflow by region (in EUR million) Equity inflow by type (in EUR million) Q Q Europe RoW / Asia Alignment Investment Semi-Institutional Institutional / PE Recurring investments from clients Comments Capital from clients invested 1x 42.3% While historically the majority of equity was coming from a European client base, equity inflows from clients outside of Europe have reached a significant share during the last years Capital from clients invested multiple times 57.7% Q32016 Diverse client mix consisting of UHNWI, family offices and an increasing institutional client base, successfully established in 2015 High rate of clients investing multiple times as a sign for high customer satisfaction Note: Figures of Hannover Leasing Group are not included Strong operational and investment return track record has led to significant grow in number of clients, increase in volume of equity income and steady base of recurring investors 7

8 Performance-related fees Recurring character of revenue Transaction-related fees Management fees 4 Highly Diversified Income Streams How does CORESTATE Generate Revenues? Category Type Relation Aggregate Revenues (2015) (in m) (in %) Property Management Asset Management Fee related to AuM Fee related to AuM % 24% Recurring fees, non transaction or performance related Acquisition Fees Warehousing Fees Fees related to acquired volume Fees related to warehoused properties converted into investment vehicles % 9% Large portion of transaction related fees coming out of secured transaction pipeline Promotes Fee related to total performance of investments % Alignment contributions At-equity contributions and dividends for alignment investment % Note:Figures of Hannover Leasing Group are not included; including revenues from RE management services, share of profit or loss from associates, net rental income, revenues from service charges, net gain from selling property holding companies, net gain from sale of investment properties. 8 Total: 47.1 Total: 100%

9 5 Significant Further Growth Potential Building on Existing Track Record How Does CORESTATE s Business Model Translate in Revenue Dynamics & Related Profitability Levels? Aggregate Revenues (1) ( m) EBITDA (2) ( m) Net Income (3) ( m) 42.0% 41.4% 37.8% 39.5% 35.2% 38.1% 35.0% 33.9% CAGR Margin as % of aggregate revenues CORESTATE s financial model exhibits strong growth with sustained high profitability and operating cash flow generation 2016 s projected development of aggregate revenues and net income is driven by the company s limited financial resources to date Expected to show accelerated growth rates again in 2017 against the background of the newly established access to the capital markets Note: (1) Including revenues from real estate management services, share of profit or loss from associates, net rental income, revenues from service charges, net gain from selling property holding companies, net gain from Sale of Investment Properties; (2) Derived from EBITDA by adding back IPO costs and severance cost; (3) Derived from net income (incl. minorities) by adding back severance cost, IPO costs and interest burden from bridge facilities; figures of Hannover Leasing Group are not included. 9

10 What are CORESTATE s targets for 2017? Outlook 2017 Significant increase of AuM Increasing volume of real estate transactions Set-up of additional mid- and long-term investment products for our growing institutional client base Expansion of property warehousing faster realization of market opportunities and preparation of future investment products Continued focus on target asset classes with selected regional expansion High Street Retail in two product lines (core/core+ and value add) Micro Living / business apartments (development) Student accommodation (core/core+) Residential (core) Office (value add) Conversion of existing investment structures into institutional investment products while retaining long-term investment management mandates High Street Retail (into institutional investment vehicle) Office (value add) 10

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12 Strong Asset Light Cash Generation Why Does CORESTATE Follow an Asset-Light Business Model? Asset-light business model (illustrative example) Transaction volume 500m Debt 300m / 60% Stable, low-risk revenues from real estate management services 3rd Party Alignment capital investments Equity 180m / 36% Alignment 20m / 4% Dividends / gains from exit Promote / carried interest The Asset-Light Business Model enables CORESTATE to realize large transaction volume with small alignment capital investment. At the same time the stable fee income protects from downside scenario, while alignment capital investments and promotes create upside potential 12

13 Significant Further Growth Potential Building on Existing Track Record Why Does European Real Estate Continue to be Highly Attractive for Investors? Low relative returns in the bond markets have fueled appetite for European real estate, particularly by international investors Prime High Street Total Returns ( f) vs. 10Y Gov t Bond Yields in CORESTATE s Key Countries RE Inv. Volume (Rolling Year) (3) RE Inv. Targeting Europe (4) 10.00% 8.00% 100 Western Europe (14 cities): bn 76% 61% 61% 6.00% 4.00% % 28% 29% 2.00% 0.00% Madrid Vienna Frankfurt Berlin Munich (1) (2) 10-Year Government Bond Yield Average Annual Total Return 25 0 North America- Based Investors Europe-Based Investors In Q1-Q3 2016, Europe accounted for the second largest share of capital raised for real estate (4) Capital Raised in Q1-Q by Closed-End RE Funds (by Primary Geographic Focus of Investment)... and is expected to remain high on the agenda of investors (4) Regions Targeted by Institutional RE Investors within next 12 Months 29% 7% 2% Total: $66,4bn 62% North America Europe Asia 53% 47% 44% 53% 24% 25% 7% 4% 5% 8% 33% 27% Rest of World North America Europe Asia-Pacific Rest of World Emerging Markets 3Q15 3Q16 Global Source: (1) Financial Times (October 2016); (2) Deutsche AWM (January 2015); (3) BNP Paribas (July 2016); (4) Preqin (2016) 13

14 Public Company Information Key Data ISIN / WKN Ticker symbol/ Reuters: Market segment: Stock exchange: Type of shares: LU / A141J3 CCAP Entry Standard Frankfurt Stock Exchange No par value shares Shareholder Structure The share capital of amounts to EUR 945, and is divided into 12,610,681 ordinary shares. The calculated nominal amount thus amounts to EUR per share. The free float is around 27.40%. First day of trading: October 04, 2016 Number of shares: 12,610, % 66.10% Designated Sponsor: equinet Bank AG Number of shares: 12,610,681 Flygon Holding LLC (Ralph Winter) 6.50% Management Free float 14

15 15 CORESTATE Capital Group 4, Rue Jean Monnet L-2180 Luxembourg IR Contact Henryk Deter / Mirko Koch cometis AG Phone: koch@cometis.de