VALUE. QUALITY. RESPONSIBILITY.

Transcription

1 VALUE. QUALITY. RESPONSIBILITY.

2 SUSTAINABLE PORT- FOLIO MANAGEMENT WITH A COMMITMENT TO QUALITY Deutsche Wohnen, with its focus on Berlin, is one of the leading publicly listed property companies in Europe. In its business operations it concentrates on the sustainable management and development of its own residential property holdings. In recent years Deutsche Wohnen has made targeted acquisitions to expand its portfolio to just under 150,000 residential units, of which approximately 100,000 are located in Greater Berlin. Ensuring the value of its holdings remains the company s highest priority. Its properties are characterised by high quality and a good location. Almost 90 % of them are located in growth regions in Germany for which the economic outlook is favourable. RESPONSIBLE GROWTH MODEL Deutsche Wohnen develops its business activities as part of a responsible growth model and in consideration of the challenges that currently exist high demand for housing in conurbations, climate change and demographic change. In everything it does the company acts sustainably and, in so doing, takes responsibility for its properties, its staff, its shareholders, and for both society and the environment. AN APPROACH BASED ON QUALITY AND EFFICIENCY In its day-to-day work Deutsche Wohnen attaches great importance to both quality and efficiency in all areas of its operations. This means that, with its strong economic position and clear strategic direction, it creates added value, ensures long-term commercial success and sets standards in the housing sector. Wilmersdorf, Berlin 2 Company 3

3 A FLEXIBLE STRUC- TURE DESIGNED TO ENSURE FUTURE SUCCESS The Deutsche Wohnen Group has a classic holding structure that en ables the company to adapt flexibly to new challenges within the context of its growth strategy. The cross-functional areas like Finance, Human Resources, Corporate Communications or Investor Relations can be found in the holding company. THREE PILLARS OF VALUE CREATION The company s direct value creation activities rest on three pillars: residential property management, strategic and operational disposals, and nursing and assisted living (KATHARINENHOF Seniorenwohnund Pflegeanlage Betriebs-GmbH). The operational companies within the segment of residential property management are responsible for the management and development of the Group s property holdings and, therefore, for its core business. A further important pillar of Deutsche Wohnen is the segment of strategic and operational disposals. The activities of this segment include the profitable sale of individual apartments to owner-occupiers and investors as well as the sale of entire buildings. Finally, with approximately 2,000 residential and nursing care places, KATHARINENHOF Seniorenwohn- und Pflegeanlage Betriebs-GmbH is one of the leading providers of high-quality residential and nursing accommodation for elderly people. Deutsche Wohnen AG is listed as a public limited company in the Deutsche Börse s MDAX and is also included in the leading indices EPRA/NAREIT and GPR 100. DEUTSCHE WOHNEN AG HOUSING Deutsche Wohnen Management GmbH CARE KATHARINENHOF Seniorenwohn- und Pflegeanlage Betriebs-GmbH Deutsche Wohnen Immobilien Management GmbH Deutsche Wohnen Construction and Facilities GmbH Deutsche Wohnen Corporate Real Estate GmbH COMPANIES (e. g. GEHAG, GSW, BauBeCon) Prenzlauer Berg, Berlin 4 BUSINESS MODEL 5

4 A HIGH-QUALITY PORTFOLIO WITH GOOD PROSPECTS The property portfolio of Deutsche Wohnen consists of approximately 150,000 units. In its portfolio strategy the company focusses on the acquisition and management of attractive residential properties in metropolitan and growth regions of Germany, i. e. economically significant conurbations whose population is forecast to grow. These dynamic regions are characterised by a constant influx of inhabitants, rising numbers of households and a housing market in which new building activity is insufficient to meet the demand created by these megatrends. The metropolitan regions, in which the portfolio is located for the most part, are characterised by very high demand for rental accommodation. Ring Estate Siemensstadt, Berlin 6 PORTfOLIO 7

5 CLUSTERING OF THE PORTFOLIO Distribution of residential units Kiel Luebeck 86,7 % CORE + The most dynamic markets with strong rental growth Total 86.7 % 2,2 % 11,1 % 71.8 % Greater Berlin 6.4 % Rhine-Main 3.4 % Mannheim/ Ludwigshafen Hanover Brunswick Magdeburg Potsdam Berlin 3.2 % Rhineland 1.9 % Dresden CORE Markets with moderately rising rents A WIDE RANGE OF DIFFERENT TYPES OF BUILDINGS The portfolio consists of a wide range of different types of buildings of various ages from listed, historic estates in the Classic Modernist tradition to modern multi-storey apartment blocks. Most of the holdings are characterised by their high quality and good location. With the help of specific investments in its core properties, targeted acquisitions in growth regions and conurbations, and disposals for the purpose of streamlining its portfolio, Deutsche Wohnen has significantly increased the value of its holdings in recent years to above EUR 9 billion (as at June 30, 2015). OPENING UP NEW MARKETS Since 2010 Deutsche Wohnen has strengthened and expanded its holdings significantly by making value-enhancing acquisitions. In doing so, it has opened up attractive new growth markets, e. g. in Potsdam, Düsseldorf and Dresden. The core regions of the company can be found particularly in Greater Berlin, the Rhine- Main area, in Dresden and Hanover, as well as in medium-sized cities like Brunswick and Magdeburg. The growth history of the company in recent years has been impressive. Moreover, because of its stable structures and the high quality of its work processes, new holdings can be integrated quickly and professionally into its portfolio and then managed accordingly. Cologne Düsseldorf Bonn Koblenz Mainz Ludwigshafen Wiesbaden Frankfurt/ Main Mannheim Erfurt Halle Leipzig Dresden Total 11.1 % 6.2 % Hanover/ Brunswick 1.5 % Magdeburg 1.4 % Kiel/Lübeck 1.2 % Halle/Leipzig 0.4 % Erfurt 0.4 % Others NON-CORE Residential holdings earmarked for sale Total 2.2 % 8 PORTfOLIO 9

6 INVESTMENT IN MAINTENANCE AND MODERNISATION In EUR million 152, NEW BUILDINGS In order to meet the rising demand for housing in German metropolitan regions, Deutsche Wohnen, as a housing manager with many years of experience in developing and consolidating residential holdings, has started to build new flats again. An initial new building is currently underway in Potsdam, within commuting distance of Berlin MODERN AND EFFICIENT MANAGEMENT SYSTEMS As a sustainable housing manager with substantial expertise in the field of residential property management and with a commitment to the long term, Deutsche Wohnen almost exclusively manages its holdings itself. In developing its portfolio, the company does not go for an indiscriminate expansion of its housing stock. It attaches importance to housing clusters of a sufficient minimum size in its core regions. This enables the company to make use of scaling effects and to manage its properties efficiently and cost-effectively. Deutsche Wohnen applies the principle of decentralisation to the administration of its properties, i. e. the tenants can reach their given contact person locally at the company s Service Points. In actually running the properties, Deutsche Wohnen works together with various system providers that operate nationwide. These cooperation models lead to efficient structures and help to optimise the service charges for the tenants at about units 2 at about units 3 at about units SUSTAINABLE INVESTMENTS IN ITS HOLDINGS Deutsche Wohnen takes responsibility for its residential holdings. It makes sustainable and compared to other housing companies above-average investments in the quality of its housing stock. In 2014 EUR 153 million was invested in the maintenance and modernisation of the portfolio. Over the next four years the company aims to invest a further EUR 280 million in the modernisation of selected properties. These high levels of investment further enhance the value of the company s portfolio. In addition to an ongoing programme of maintenance, Deutsche Wohnen also aims to improve the energy efficiency of its holdings and, in so doing, to make an important contribution to environmental protection. Horseshoe Estate, Berlin 10 PORTfOLIO 11

7 DEUTSCHE WOHNEN ON THE CAPITAL MARKETS Deutsche Wohnen enjoys a high level of trust on the capital markets because in the past the company has performed as well as forecast and has kept its promises. The same principles of transparency and credibility apply to the company s communication with the capital markets as to its dialogue with stakeholders. The fact that the company puts these principles into practice in its dealings with these markets explains why it has an excellent reputation and why it is able at any time to acquire equity and loan capital in sufficient quantities to finance further growth. INTERNATIONAL SHAREHOLDER STRUCTURE Over 90 % of Deutsche Wohnen shares are held by international investors. The USA and Great Britain each account for around 1/3 of the shares. Norway and the Netherlands follow with a share of around 7 % and roughly 5 % respectively. Around half of the shares are held by 20 renowned international institutional investors. The high free float of over 90 % with a free float market capitalisation of around EUR 8 billion (as at August 2015) underlines why the share is attractive to investors. FINANCING STRENGTH Deutsche Wohnen is excellently positioned to be able to act flexibly and cost-effectively on the financial markets. On the basis of its sustainable growth and investment strategy with a focus on Core + markets, Deutsche Wohnen has acquired for itself a strong position on the capital markets. The financing strategy is characterised in particular by a sustainable financing structure with above-average repayment periods for loans (on average nine years) and with the maturity dates for the various loans staggered. This attractive capital market environment was made use of in 2014 and 2015 to optimise the financing structure and cash flow profile of the company over the long term. Accordingly, it was possible to lower the average interest rate payable on loans from 3.4 % to less than 1.9 %. All of this means that Deutsche Wohnen, in comparison to other German companies in the sector, has the most favourable financing costs combined with above-average repayment periods. K Langenfeld near Düsseldorf 12 financial MARKET 13

8 Unterliederbach, frankfurt INTERNATIONAL RATING EXTENDS THE RANGE OF FINANCING OPTIONS At the end of 2014 Deutsche Wohnen was given a long-term rating by both Moody s and Standard and Poor s. In June 2015, both rating agencies upgraded Deutsche Wohnen to A- (Standard & Poors) and A3 (Moody s) in connection with measures taken to optimise its capital structure, underlining the high quality of the company s business model. On account of these ratings, Deutsche Wohnen is one of the best-rated real estate companies in Europe and the best-rated in Germany. The ratings have given the company greater flexibility because more diverse sources of financing are now available, allowing it to place a corporate bond (term: five years; coupon: %) with 130 international investors for the first time. LTV UNDER 45 % With a Core + share of its portfolio of almost 90 %, Deutsche Wohnen s loan-tovalue ratio has fallen significantly since September 2014 from just under 55 % to 40.9 % (as at 30 June, 2015), which is a very sound level for a German residential property company. Thanks to its conservative financing structure, the company is in a position to take better advantage of growth opportunities that result from cyclical fluctuations in the market. Deutsche Wohnen sees itself in an excellent position to then be able to grow externally even when interest rates rise again. The company s business model and its sustainable financing structure, therefore, make it less dependent on low interest rates. 14 financial MARKET 15

9 G GEHAG (Berlin) Founding Deutsche Wohnen (frankfurt/main) Start of business operations Initial public offering Acquisition of Eisenbahn- Siedlungs-Gesellschaft and Fortimo GmbH Merger Admission to the MDAX Acquisition of BauBeCon properties Privatisation Termination of Deutsche Bank control agreement Takeover of GSW Immobilien AG (Berlin) Advent of modern housing estate construction BUILT HISTORY More people rent their home in Germany than in any other country in Europe. Particularly in densely populated regions and cities, the majority of inhabitants do not live in their own flat or house but in a rented property. Moreover, during the crisis periods of recent years this large and stable market for rented accommodation has prevented undesirable developments in the German property sector. The history of Deutsche Wohnen AG and its individual subsidiaries is closely linked, both historically and architecturally, to the development of a mature and diversified rental accommodation market particularly in Germany s capital city. GEHAG GEHAG GmbH was founded in 1924 as a non-profit-making building society and housing construction company. The residential estates and flats that were built by GEHAG in the 1920s in Berlin are still regarded today as ground-breaking in architecture and urban planning. In an attempt to satisfy the high demand for housing after the First World War, Berlin founded a number of housing associations and launched an unprecedented house building programme. All around the late 19th century architecture in the centre of the city there appeared new estates with a modern architectural design and stylistic elements. The style of Berlin Modernism was born. The architect Bruno Taut built for GEHAG the high-quality and even today extremely popular estates like, for example, the Carl Legien Residential Estate in Prenzlauer Berg or the Horseshoe Estate in Neukölln. So, GEHAG GmbH as the substantial nucleus of Deutsche Wohnen AG has over 90 years of experience in residential property management. Moreover, its focus was always to care for and maintain its properties. DEUTSCHE WOHNEN Deutsche Wohnen AG in its current form resulted from the merger of the two housing companies, Deutsche Wohnen AG in Frankfurt and GEHAG GmbH in Berlin. Deutsche Wohnen AG was originally founded in 1998 as a subsidiary of the Deutsche Bank, and owned residential properties mainly in the Rhine-Main area and in Rhineland-Palatinate. Since 1999 Deutsche Wohnen has been listed on the German stock exchange. Following initial acquisitions from 2010, Deutsche Wohnen acquired the BauBeCon portfolio in 2012 with its 24,000 residential units. In so doing, it opened up for itself new core regions in Lower Saxony and Central Germany. GSW At the end of 2013 Deutsche Wohnen acquired the listed, Berlin-based housing company GSW Immobilien AG with its approximately 60,000 residential units. GSW had also been founded in In the 1930s GSW, with its holdings of more than 37,000 flats, was the largest housing company in the city. In the 1960s and 1970s the municipal GSW realised a large number of new building projects in the western part of the city. Following reunification, the GSW got back the holdings in the eastern part of Berlin which it had lost in The formerly municipal companies GEHAG and GSW were privatised by the federal state of Berlin in 1998 and 2004 respectively. Today s Deutsche Wohnen Group provides impressive proof that it is possible to fulfil all of the obligations and requirements imposed by privatisation and still achieve sustainable growth both on the capital markets and with regard to the size of the company s holdings and the number of its employees. In cities where it has major holdings especially Berlin the company is a reliable partner in dialogue for both politicians and the general public regarding all questions to do with neighbourhood development. 16 HISTORY 17

10 Wohnstadt Carl Legien, Berlin ENDURING VALUES PRIDE AND RESPONSIBILITY Deutsche Wohnen is the largest owner of listed residential properties in Germany. Moreover, no other property company in Germany has such valuable, historic holdings in excellent locations. Of the almost 150,000 residential units owned by Deutsche Wohnen AG, a good 30,000 are listed. The care and maintenance of these unique holdings is an obligation for the company, but also a source of motivation. UNESCO WORLD HERITAGE In 2008 six Classic Modernist estates in Berlin were entered into the UNESCO list of world heritage sites and thus given special protection. Deutsche Wohnen owns four of these estates: the Horseshoe Estate in Britz, the White City Estate in Reinickendorf, Siemensstadt in Charlottenburg and the Carl Legien Estate in Prenzlauer Berg. In addition, the following residential holdings are listed: the Waldsiedlung in Berlin- Zehlendorf, the Piesteritz Works Estate in Wittenberg, the Railway Workers Estate in Elstal near Berlin and a large part of the Cracau Estate in Magdeburg. SOUGHT-AFTER SPECIALISTS Deutsche Wohnen is proud of these holdings, and it understands architecture and building culture as a central component of its corporate culture. The employees in the company have specific expertise in technical matters and in the field of property management and so are able to maintain these properties and make appropriate improvements to them. They are sought-after specialists for the refurbishment of listed residential buildings. At the same time, these residential estates which for the most part were built for working people in the 1920s stand for genuine social commitment. They were designed by architects like Bruno Taut or Otto Rudolf Salvisberg with the particular needs of their residents in mind and they made a decisive contribution to improving the living conditions of broad sections of society. Even today they stand for a type of architecture that promotes neighbourliness and a sense of community. Tenant demand for these listed estates is extremely high. VALUE-ENHANCING INVESTMENTS The strategy of Deutsche Wohnen AG is characterised by high levels of investment in its holdings. In 2014 the company invested a total of EUR 37 million in its listed properties. Deutsche Wohnen is committed in the long term to the sustainable care, maintenance and further development of its housing stock. For this reason, it has been making above-average investments for years and so has been enhancing the value of its holdings. Through its letting strategy and its social commitment locally the company assumes responsibility for ensuring that the social mix in its neighbourhoods works. Deutsche Wohnen can point with pride to the holdings it has managed and developed sustainably. This is the way in which enduring values form the basis of the company s commercial success. 18 VALUES & RESPONSIBILITY 19

11 SUBSTANTIAL EXPERTISE IN THE HOUSING SECTOR The management of Deutsche Wohnen has substantial expertise in the housing sector. A number of managing directors and directors answer directly to the Management Board. They too have many years of experience in the real estate sector. The Deutsche Wohnen Group is also extensively engaged in training and professional development and, for this reason, it is always able to fill a wide variety of posts with young, qualified employees. Moreover, because of the open culture within the company, motivated employees have excellent career prospects. This means that it is possible for the company to hold on to its young talent. MICHAEL ZAHN The Chief Executive Officer (CEO) of Deutsche Wohnen AG Michael Zahn, born in 1963, is a graduate economist, and also completed post-graduate courses in corporate real estate management and chartered surveying at the European Business School in Oestrich-Winkel. From 1997 he worked in various senior management positions for the GEHAG Group. In the course of the merger between Deutsche Wohnen and the GEHAG Group he was appointed as spokesperson for the Management Board in 2007 and then as its CEO in In his position as CEO Michael Zahn is responsible for the strategic direction of the Deutsche Wohnen Group. ANDREAS SEGAL Andreas Segal, born in 1969, is a lawyer and banking professional. Following the takeover of GSW Immobilien AG by Deutsche Wohnen, he was appointed as Chief Financial Officer (CFO) of the Group in January After holding various posts, including postings abroad, in the banking and real estate sectors, he joined GSW Immobilien AG as a senior executive, becoming a member of the executive board in Following the conversion of GSW into a public limited company in 2010 he was a member of the Board of Management as CFO. From August 2013 until January 2014 he was co-ceo of GSW Immobilien AG. LARS WITTAN Lars Wittan, born in 1977, is a business administration graduate and a qualified auditor. He has worked in leading positions for the Deutsche Wohnen Group since Before this time, he worked for Arthur Anderson and as an authorised signatory for Ernst & Young. In October 2011 he was appointed a member of the Management Board of Deutsche Wohnen. As Chief Investment Officer (CIO) he is responsible for inter alia the areas of asset management, corporate planning and accounting. In addition to his role as CIO, he has been Chief Executive Officer of GSW Immobilien AG since January MANAGEMENT 21

12 CONTACT Manuela Damianakis Director Corporate Communication & Public Affairs Phone +49 (0) Head Office Berlin Deutsche Wohnen AG Mecklenburgische Straße Berlin IMPRINT published by Deutsche Wohnen AG, Frankfurt/Main Consultancy and design kleiner und bold GmbH, Berlin Concept and text Deutsche Wohnen AG, Frankfurt/Main photo credits Anja Steinmann, Mühlheim an der Ruhr Andreas Pohlmann, Munich Stefan Maria Rother, Berlin Ring Estate Siemensstadt, Berlin 22 IMPRINT

13 DEUTSCHE WOHNEN AG Registered office: Pfaffenwiese Frankfurt am Main Head Office Berlin: Mecklenburgische Straße Berlin Phone +49 (0) Telefax +49 (0) info@deutsche-wohnen.com