Deutsche Konsum REIT AG

Transcription

1 8 August 2017 Deutsche Konsum REIT AG BUY Real Estate Focus on food real estate offers upside Kai Klose, CIIA Analyst Tina Munda, ACA Analyst ATLAS ALPHA THOUGHT LEADERSHIP ACCESS SERVICE

2 THE TEAM Kai Klose has 15 years experience in real estate, working both in the industry and on the equity side. He joined Berenberg from Macquarie, and prior to that worked for Dresdner and Sal. Oppenheim. Tina Munda joined Berenberg from BlueCrest in 2014 where she worked in product control for the credit fund. Before that, she worked in business control at Lloyds Banking Group, specifically looking after structured credit investments. Tina started her professional career at Mazars, in assurance services. She is qualified accountant (ACA) and holds a Masters degree in Finance and Investments from the University of Nottingham. For our disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) and our disclaimer please see the end of this document. Please note that the use of this research report is subject to the conditions and restrictions set forth in the disclosures and the disclaimer at the end of this document.

3 Table of contents Focus on food real estate offers upside 4 Investment thesis 5 Deutsche Konsum REIT AG investment thesis in pictures 6 Deutsche Konsum REIT AG company profile 7 Portfolio and earnings forecasts 17 Valuation 25 Snapshot of property markets 36 Financials 40 3

4 Focus on food real estate offers upside Focus on food retail: Deutsche Konsum REIT-AG (DKR) is focused on convenience-led retail real estate in Germany, with food retailers contributing c 14m, about 60%, to the portfolio s total annualised rents. With new space for food retail limited, DKR is therefore active in an attractive niche of stationary retail real estate, where competition from e-commerce has (so far) been rather moderate. Additionally, DKR benefits from high tenant quality, with lease contracts signed with local retailers and national groups such as Metro, Edeka, Rewe and Aldi. Very local: DKR s current average net initial yield on the portfolio of 9.8% is significantly higher when compared to other German retail property companies, although they arguably have different strategies and focus. Also, DKR s portfolio is more than 80% exposed to eastern Germany and includes a number of smaller cities. However, we regard the company s local expertise as high, reflected in having extended the average lease maturity to about five years, which is the key criterion for value creation in this asset class. While the group s regional diversification is likely to increase, we do not expect significant expansion to the largest seven German cities, due to yields being lower and DKR s current acquisition strategy of targeting cities with less local competition. Ticking the boxes: With a portfolio of c 250m and a total market cap of 210m, DKR has been making good progress in gaining critical size. With a listing on the Prime Standard, the company also signals its commitment to fulfil capital markets standards, in addition to the requirements according to German REIT law depicting a moderate financial leverage and a predictable business model. Growing further: We expect DKR to bring more of its operational functions and asset and portfolio management in-house, with the aim of further growing the portfolio. The company now benefits from a high adjusted EBITDA margin of 78% at the end of the first half-year period, which we expect to advance with scale effects set to materialise. In our model we have incorporated only low lfl rental growth, but assume the portfolio will on average grow with annual acquisitions of 90m, reaching 675m by 30 September Together with lower financing costs, the funds from operations (FFO) should advance at CAGR of 31% to 35.4m over the same period. We expect dividend payments to start for the next fiscal year with a payout ratio of 45% on FFO. Although the shares have been performing fairly well, we see the potential of the underlying portfolio to start materialising. Supported by DKR s track record in acquisitions and improving the portfolio quality, we initiate coverage with a Buy rating and price target of 10. Y/E 30/09, EUR m E 2018E 2019E 2020E Total revenues Net rents EBIT (inc revaluation net) EBIT (excl revaluation) Net profit (reported) Funds From Operations (FFO) EPS reported FFO per share DPS NAV per share NNAV per share EV/EBITDA FFO yield 3.8% 5.4% 8.9% 10.5% 8.0% P/FFO Dividend yield 0.0% 0.0% 4.0% 4.7% 3.7% P/NAV per share 56% 40% 9% -8% 5% P/NNAV per share 56% 40% 9% -8% 5% Net gearing 101% 71% 77% 75% 63% Loan-to-value (LTV) 39% 36% 31% 34% 38% Implied yield 5.6% 6.5% 8.7% 10.3% 11.2% Source: Company data, Berenberg 8 August 2017 BUY Current price (Initiation) Price target EUR 8.44 EUR /08/2017 XETRA Close Market cap (EUR m) 209 Reuters DKG.DE Bloomberg DKG GY Share data Shares outstanding (m) 25 Enterprise value (EUR m) 316 Daily trading volume 8,000 Source: Thomson Reuters Datastream Kai Klose, CIIA Analyst kai.klose@berenberg.com Tina Munda, ACA Analyst tina.munda@berenberg.com

5 BUY Investment thesis 8 August 2017 Reuters DKG.DE With the focus on food retail real estate the company is acting in Current price Price target EUR 8.44 EUR Bloomberg DKG GY Market cap (EUR m) /08/2017 XETRA Close EV (EUR m) 316 Non-institutional shareholders Trading volume 8,000 Free float 32.0% Share performance Obotritia Capital Group: 31% High 52 weeks EUR 9.27 Low 52 weeks EUR 7.32 Business description Deutsche Konsum REIT-AG owns a convenience-led retail property portfolio with a high exposure to food stores/ supermarkets. Performance relative to SXXP SDAX 1mth -2.6% -6.5% 3mth 7.8% 0.3% 12mth -12.9% -14.8% an attractive niche of the market, where the risk from new supply of space is limited. Based on a high local knowledge Deutsche Konsum REIT has been growing the portfolio fairly rapidly. Current portfolio yields of about 10% offer the potential for value creation once the occupancy rates and lease maturities have been increased. Our valuation is based on return on EPRA net asset value and dividend discount model. Profit and loss summary EURm E 2018E 2019E Net rental income Total revenues Revaluation result Total operating expense EBITDA Adjusted EBITDA Financial result EBT Net profit Funds from operations FFO/share Year-end shares DPS Cash flow summary EURm E 2018E 2019E FFO CF operating activities Payments (acquisitions) Income (asset disposals) Change in debt position Dividend paid Capital measures Growth and margins E 2018E 2019E Rental growth % 65.7% 32.0% Adj. EBITDA growth % 64.1% 31.7% FFO growth % 79.1% 30.2% Adj. EBITDA margin % 71.2% 73.4% 73.3% Adj. EBIT margin % 71.2% 73.4% 73.3% FFO margin % 72.6% 78.5% 77.5% Key ratios E 2018E 2019E Net debt Net debt/equity LTV - 39% 36% 31% 34% Net gearing - 101% 71% 77% 75% Interest cover Dividend cover Payout ratio - 0% 0% 45% 45% Return on NAV - 5.9% 7.6% 9.6% 9.7% Valuation metrics E 2018E 2019E P / FFO P / NAV - 56% 40% 9% -8% P / NNAV - 56% 40% 9% -8% FFO yield - 3.8% 5.4% 8.9% 10.5% Dividend yield - 0.0% 0.0% 4.0% 4.7% EV / adj. EBITDA Key risks to our investment thesis The regional diversification is very high with the overall portfolio size still relatively small. Due to its small size, DKR outsources some of its property management and some back-office functions. A sudden and substantial rise in interest rates typically leads to an underperformance of the property stocks. Kai Klose, CIIA Analyst kai.klose@berenberg.com Tina Munda, ACA Analyst tina.munda@berenberg.com

6 Deutsche Konsum REIT AG investment thesis in pictures Chart 1: Investment portfolio ( m) Chart 2: Rental income ( m) m Investment properties m Rental income FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E - FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E Source: Berenberg estimates Source: Berenberg estimates Chart 3: Adjusted EBITDA ( m) Chart 4: Funds from operations ( m) m Adjusted EBITDA m Funds From Operations (FFO) FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E - FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E Source: Berenberg estimates Source: Berenberg estimates Chart 5: EPRA net asset value per share ( ) Chart 6: Dividend per share and FFO per share ( ) EPRA NAV per share FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E FFO per share DPS Source: Berenberg estimates Source: Berenberg estimates 6

7 Deutsche Konsum REIT AG company profile Deutsche Konsum REIT AG (DKR) is focused on convenience-led retail properties in Germany and follows a buy-to-hold strategy with a long-term-oriented investment horizon. With food retailers being its main tenants, DKR s portfolio ranges from single supermarkets to mid-sized retail parks, and also includes some DIY markets. While sourcing properties takes place from a broad range of sellers, DKR s investment decisions are always based on the supply/demand situation and the mid-term prospects of the respective micro location. Accordingly, the company is exposed to a number of smaller cities so benefits from a fairly low risk of new food-related properties being developed. This puts DKR in a rather powerful position, especially when negotiating lease contracts with its tenants who are typically more interested in securing favourable rent levels per sqm and long-term lease maturities. Nevertheless, we assume that for an uplift of DKR s portfolio value from the current external appraisal, an extension of the lease maturity is of high relevance. While both rental levels and 4.6 years as the average lease duration offer potential to be increased, current portfolio yields of 9.8% are very undemanding. Therefore, we forecast this value to be increased by DKR s active asset management, as recently seen in the Domcenter property in Greifswald in the northern state of Mecklenburg- Vorpommern. Here, new lease contracts were signed and existing contracts extended at a maturity of 10 years, increasing the annualised rent from 0.9m to 1.3m and reducing the vacancy rate from almost 50% to below 10%. Having the key functions of the portfolio and asset management in-house, and expecting this to increase with the further growth of the portfolio, we have a positive view about DKR s underlying operational and financial strategy. This is reflected in a net loan-to-value of 36% as of March at the end of the first half-year period. Finally, as the company has only been in operations since 2014, DKR benefits from a hand-selected portfolio acquired more or less recently without any major legacies. While the total market capitalisation of the stock has reached 210m, or c 70m on a free-float basis, its liquidity is expected to improve further. We think that investors focus will improve once the company starts dividend payments as soon as the loss carried forward according to German GAAP, which is the legal basis for dividend contributions, has been balanced out by the end of the actual fiscal year. In our numbers we forecast DKR to start dividend payments for the next fiscal year and assume a payout ratio of c45% on FFO as the normalised earnings. At the end of the first half (31 March), DKR s portfolio consisted of 62 properties with a total lettable space of c330,000sqm. From a regional perspective and measured by gross asset value, the main exposure is on the federal states Saxony (22% of annual rents), Mecklenburg-Vorpommern (18%) and Brandenburg (17%). We would expect the regional diversification to increase further, but clearly to remain on smaller cities. DKR s regional split of the portfolio Saxony 22% Thuringia 12% Brandenburg 17% Mecklenburg- West Pomerania 18% Saxony Anhalt 14% Source: Company reports North Rhine- Westphalia 6% Lower Saxony 8% Together with the portfolio growth we would expect the regional diversification to widen further. 7

8 Regional split of DKR s portfolio Source: Company reports The five largest assets in DKR s portfolio represent 37% of fair value. Vacancy rates in DKR s five largest properties have already decreased Location Gothaer Strasse 22, Erfurt Am Marstall 2, Ludwigslust Merseburger Strasse/ Marktbreite, 4178 Leipzig Rostocker Strasse 1, 2, 3, 7 and 8, Pritzwalk Holzmarkt 7, 9, 11, 13 and 15, Verden Use Retail Retail Retail Retail Retail Ground area in sqm 48,996 24,005 65,640 46,316 16,162 Rental space in sqm 19,750 14,386 22,655 14,647 7,128 Vacancy in % 0.0% 2.4% 8.0% 0.0% 3.0% Rent level /sqm Monthly rent p.m. 236, , , ,191 96,837 annual rent p.a. 2,833,016 1,548,190 1,511,681 1,370,291 1,162,041 Source: Company reports, Berenberg estimates 8

9 About 57% of the 24.8m annualised in-place rents of DKR s portfolio are generated by food retailers. With 5.9 years as the average lease length of food retailers, their income stream is fairly stable, in our view. In total, about 75% of rents come from convenience-led retail segments ( non-cyclical uses ), which have also historically shown high resilience in economical downturns. Rent contribution by sector ( m) Non-food discounters 8% Health sector 2% Food retailers 57% Other noncyclical uses 8% DIY-stores 10% Other cyclical uses 14% Source: Company reports, Berenberg estimates In addition to the high resilience against economic changes for food retailers, DKR can benefit from its tenants high creditworthiness as lease contracts with local shop operators are usually always backed up by a guarantee from the group. Major tenants of high quality (rent contribution in m) Real 13.9% Famila 5.3% Rewe 4.8% Netto 3.7% B1 Baumarkt 5.3% Kaufland / Lidl 18.7% Other 29.4% Edeka 18.7% Source: Company reports, Berenberg estimates 9

10 The average lease maturity of DKR s 12 largest tenants is six years, and even 4.1 years for Edeka, which is the largest food retailer in Germany. These 12 tenants have taken up space in 45 DKR properties. We understand that DKR has been building a close relationship with these major tenants, supported by the company s experience and know-how as being a professional landlord. Major tenants have shops in various DKR properties (number of lease contracts as of July 2017) Source: Company reports, Berenberg estimates The current average lease duration before DKR s recent acquisitions is 4.6 years, which is comparable to other commercial property companies. As of July, the average lease maturity is already closer to five years. However, about 40% of these leases expire over the next three years. While peers have a more defensive lease expiry schedule with usually 10% of annual leases maturities up for renewal, we think that DKR s lease maturity schedule offers more of an opportunity. Given that a number of properties were previously owned by various and in many cases unprofessional landlords, DKR has had to establish good relationships with tenants, who typically appreciate having an experienced and long-term-focused landlord. We understand that the company is in advanced negotiations with its existing main retailers, and that there should not be a high amount of capex spending necessary. While we would not expect significant positive rent revisions in the upcoming lease extensions, DKR s portfolio value should certainly see a rise, assuming that renewals are signed again for five or 10 years. Distribution of rent maturities (as of March 2017) 40% 35% 36% 30% 25% 20% 15% 18% 14% 16% 10% 5% 8% 8% 0% Source: Company reports, Berenberg estimates Looking at the company s assets in its portfolio, the highest rents are generated from retail parks (in German: Fachmarktzentrum), which contribute 41% of current annualised rents, followed by convenience malls (in German: Nahversorgungszentrum) contributing 28%. We appreciate this higher exposure to retail parks and convenience malls as German building legislation provides some kind of privilege for existing properties. 10

11 If there is a retail park with a certain size already in operation, new retail properties of a similar type cannot be built next door. As this keeps the new supply at a low level, the location is usually sought after by new retailers, while existing tenants are typically keen to stay, which enables the landlord to extend long leases and achieve rental growth on a selective basis. Portfolio split by type of use (% of annualised rents) Local supply center 28% Discounter 12% DIY 3% Hypermarket 16% Retail park 41% Source: Company reports, Berenberg estimates DKR was founded in 2008 by Rolf Elgeti, who, via his family office Obotritia Capital, is still the largest shareholder. However, the company has only been fully in operation since 2014 when it became a public company, followed by a stock listing one year later. While we assume further regional expansion based on investment opportunities, we expect the sector focus to be maintained, as well as the split between the types of properties to be kept. DKR has been buying smaller portfolios, but has predominantly gained in size by adding single properties. The latest larger acquisition was a portfolio of six retail properties for 26.5m with 54,000sqm of lettable space, located in Saxony, Thuringia and Brandenburg. The properties were built between 1992 and 2006 and currently have vacancy rates of about 29% and a rather short average lease maturity of 4.3 years. Accordingly, the net initial yield of 12.5%, based on 3.3m as the current annualised in-place rents, is very high. Over the coming years DKR has to demonstrate its ability to revitalise the assets, although at a first glance the properties for retail brands Kaufland, Edeka and Netto seem to fit well into the company s existing portfolio. Recent acquisition fits well into DKR s existing portfolio Location Guben "Neisse-Center" Oer-Erkenschwick Meissen Plauen Tangerhütte Space 12,400 9,600 24,200 24,000 2,600 Annualized rent (meur) Major tenants Rewe, Aldi, Rossmann Kaufland Kaufland, Tedi Kaufland, Takko Edeka WALT ~ 5 years ~ 13 years ~ 4 years ~ 4 years ~ 5,5 years Source: Company reports, Berenberg estimates 11

12 As already mentioned, DKR s portfolio includes various types of retail properties, such as single-tenant discounters and DIY markets, hypermarkets, mid-sized convenience malls and rather sizeable retail parks. We welcome that the company provides relevant data on a single-asset basis in its publications and on its homepage. DKR s portfolio includes a wide range of different retail properties Source: Company reports, Berenberg estimates Headed by a three-man management board, DKR s strategy is very straightforward with the aim of sustainable and predictable earnings generation. With the focus on small and medium-sized cities the company expects to benefit from lower prices and less competition from professional investors, as they tend to prefer investing in larger cities. Nevertheless, the conditions of each location are always very thoroughly assessed before considering an investment. Resuming dividend payments as soon as the loss carried forwards according to German GAAP will have been cleared, we tend to agree that being a REIT should also help DKR to broaden the investor base. DKR has a clearly defined strategy Strong cash flow generating portfolio Stable and efficient financial structure Value creation by active asset management Lean company structure Advantages from REIT structure Attractive and stable dividends Source: Company reports, Berenberg estimates As seen with the latest portfolio acquisition, DKR largely invests in so-called value-add and higher-yielding properties that offer reversionary potential from various initiatives, such as lease extension, vacancy reduction or tenant rotation. In order to assess and to price the risks and reversionary potential adequately, the company creates a property-specific business plan and benefits from its close contacts with the relevant food retailers, with many of them looking to expand by finding win-win solutions. 12

13 DKR is following a value-add approach Risk/Chance analysis before purchase We try to get a vision of the asset, location and useful future uses on the basis of current market demand Pro-active asset management DKS asset management consists of 5 experienced and motivated full-time asset managers Establishing a stable tenant relationship We want to be reliable and long term partner and are in steady discussions understand tenants needs with the aim to generate winwins Creativity and flexibility We try to think unconventionally and to find new concepts to recover a property Experience We have a motivated and experienced asset management which quickly estimates which way could be value adding Building a network With the growth of DKS also our network of potential tenants grows which can be advantageous Source: Company reports, Berenberg estimates We think that DKR has not only built-up a track record in growing its portfolio in a short period of time, but has also been able to significantly improve the value of a number of properties, such as the BiTZ retail park in Bitterfeld, Saxony-Anhalt ( This was bought in February 2015 for 4.5m, had a vacancy rate of 29%, and a reasonably long remaining lease length of 4.5 years with three well-known retailers OBI (DIY), Aldi (discounter) and Deichmann (shoes). DKR refurbished parts of the property and created additional space by spending 5.5m in total. This attracted two new tenants in supermarket REWE (a 15-year contract) and drugstore DM (12-year contract), and extended the lease contracts of the existing anchor tenants (eg with OBI for 10 years). Accordingly, the average lease length went up to 8.8 years and after having realised c 0.4m in additional rents, the property s value improved to 11.0m. Given the significantly better tenant mix we also foresee the current vacancy rate of 29% to be reduced once the space occupied by a nightclub is re-let. 13

14 Case study 1: Revitalisation of a retail store in Bitterfeld Source: Company reports, Berenberg estimates The convenience mall Lindencenter ( in Ludwigslust, Mecklenburg-Vorpommern, was bought in March 2015 for 13m. With an already low vacancy rate, the anchor tenants were also about to move out due to disputes with the previous owner. DKR managed to substantially improve the relationship with the tenants, extended the lease contract with the core food retailer by an additional 10 years and rented out most of the available space. Consequently, the property s value increased to 21.2m, representing a net initial yield of 7.5% and 1.6m of annualised rents, compared to 11.5% at the date of purchase. While rental levels overall have not materially changed, external appraisers have assessed the extension of the lease contracts positively. Case study 2: Maintaining the food retailer as anchor tenant Source: Company reports, Berenberg estimates On 12 June DKR announced the appointments of Alexander Kroth as CIO and Christian Hellmuth as CFO, with both joining CEO Rolf Elfgeti on the management board. Mr Kroth 14

15 joined DKR in 2014 and will keep responsibility for improving the portfolio quality as well as growing its size. He has been in the real estate industry for more than 10 years and previously worked for KPMG as real estate advisor. Mr Hellmuth joined DKR in January this year and has 15 years of sector experience, previously working for WCM, GSW, Deutsche Wohnen and PwC. Management board of DKR Source: Company reports, Berenberg estimates In total, the company now has five employees and we understand that the management board is about to implement a long-term incentive plan fairly soon. Given the young age and rapid growth of the portfolio, only the key operational functions, such as asset and tenants management and all decisions for acquisitions and capex spending, are in-house. Property management and some centralised functions, such as accounting and legal, are still outsourced. We would encourage the company to bring more responsibilities in-house as this typically gives a more detailed view about the portfolio and enables the landlord to act faster by being even closer to the tenants. For property management, DKR is currently paying 2-3% of the annual rents to the external service provider depending on the complexity of the property, which is a markets average fee. DKR to internalise more functions over time Functions External Internal Asset Management X X Property Management & facility management X Strategy X Investments / disposals X Corporate Finance / IR X Accounting / Reporting X X Controlling X Taxes X Legal X HR X IT X Source: Company reports DKR s largest shareholder is CEO Rolf Elgeti via his family office Obotritia Capital KGaA. His stake of 31% is split into six investment vehicles in order to comply with the requirements of German REIT law. Larger stakes are also held by family offices, which all tend to follow a long-term investment horizon, but there is no lock-up period in place. Since the beginning of March 2017, DKR has been listed at the Prime Standard of Deutsche Boerse, which should enable it to become a member of the EPRA/NAREIT index universe the most relevant benchmark for equity investors focused on property stocks/reits. 15

16 Shareholder structure Other free float 32.0% Obotritia Capital Group * 31.0% Lotus AG 7.3% Carmignac Gestion 2.7% Tiven GmbH 3.9% Source: Company reports, Berenberg estimates (*Stake of Obotritia Capital Group split into five SPVs) 9. Invest GmbH 4.9% Retail Real Estate UG 5.2% Zerena GmbH 5.7% Goebel Home AG 7.3% DKR obtained the status as real estate investment trust (REIT) as of 1 January So far there are only two other investible German REITs alstria office REIT and Hamborner REIT listed on the stock exchange. On a global perspective, REITs have become the standard for real estate securities, and a high number of specialised equity investors have been set up. There are several reasons why REITs in Germany have not yet become more popular, but we strongly welcome that DKR has decided to become a REIT and to benefit from a being tax-exempt at the company level. Accordingly, DKR does not pay corporate or commercial taxes. In return, the company needs to have a minimum equity ratio of 45% and needs to distribute 90% of earnings according to German GAAP. There are some additional criteria DKR has to meet, according to German REIT law, which have been implemented similar to REIT laws in other countries, in order to ensure a lowrisk investment profile focused on high stability in earnings and dividends. Key points on German REITs Headquartered in Germany and stock to be listed at regulated market >25% free float at IPO and >15% free float after IPO >45% equity ratio > 75% of gross income to be originated from rental, leasing of disposal gains of portfolio assets >75% of assets must be invested in real property >90% payout ratio of the profit for the financial year according to German GAAP <10% directly held shares per shareholder Tax-exempt at company level: No obligation to pay corporate of commercial taxes Mandatory stock-listing enables a high fungibility >45% equity ratio ensures solid balance sheet ratios High payout ratio requires a business model with predictable income stream Source: Company reports 16

17 Portfolio and earnings forecasts Including recent portfolio acquisitions, DKR s current total portfolio generates annualised rents of 25m on a vacancy-adjusted basis. We appreciate that in its latest prospectus the company shows the current value as well as the ERV of almost every single asset. DKR s current portfolio structure 2016/2017E Number of properties Gross asset value m Annualised rents including Vacancy rates vacancy rates Yield Annualised rents assuming full occupancy rates % % 28.2 Source: Company reports, Berenberg estimates While we would encourage the company to provide a more detailed split of the portfolio s valuation according to the different types of use, we have based our lfl portfolio forecasts on the currently reported structure. We do not assume a substantial change in rental levels and have incorporated 0.5% as annual lfl rental growth. With vacancy rates to decrease by about 100bp annually, we forecast DKR to maintain and actually to increase the weighted average lease maturity, as shown several times already. As the lease length for this asset class is usually seen as fairly relevant for external appraisers, we have incorporated an annual yield compression of c30bp. With this we forecast a higher capital appreciation for DKR s portfolio compared to other commercial property companies in our coverage. However, DKR s current yield at c10% is also substantially higher, with new properties often needing an experienced and professional asset manager to begin with. Overall, we still regard our lfl portfolio scenario as conservative. 17

18 Our forecast for DKR s lfl portfolio performance 2017/2018E Number of properties Increase in rents from lower annualised rents including new Vacancy rates Change in Vacancy rates vacancy rates vacancy rates old vacancy rates new m only ( m) Lfl rental growth Increase in rents from rent adjustments ( m) Annualised rents new including rent increases only ( m) Annualised rents new including new vacancy rates and rent adjustments total ( m) Yields old Change in yields Yields new Gross asset value new ( m) % -1.00% 12.0% % % -0.30% 9.20% Change /2019E Number of properties Increase in rents from lower annualised rents including new Vacancy rates Change in Vacancy rates vacancy rates vacancy rates old vacancy rates new m only ( m) Lfl rental growth Increase in rents from rent adjustments ( m) Annualised rents new including rent increases only ( m) Annualised rents new including new vacancy rates and rent adjustments total ( m) Yields old Change in yields Yields new Gross asset value new ( m) % -1.00% 11.0% % % -0.30% 8.90% Change /2020E Number of properties Increase in rents from lower annualised rents including new Vacancy rates Change in Vacancy rates vacancy rates vacancy rates old vacancy rates new m only ( m) Lfl rental growth Increase in rents from rent adjustments ( m) Annualised rents new including rent increases only ( m) Annualised rents new including new vacancy rates and rent adjustments total ( m) Yields old Change in yields Yields new Gross asset value new ( m) % -1.00% 10.0% % % -0.30% 8.60% Change /2021E Number of properties Increase in rents from lower annualised rents including new Vacancy rates Change in Vacancy rates vacancy rates vacancy rates old vacancy rates new m only ( m) Lfl rental growth Increase in rents from rent adjustments ( m) Annualised rents new including rent increases only ( m) Annualised rents new including new vacancy rates and rent adjustments total ( m) Yields old Change in yields Yields new Gross asset value new ( m) % -1.00% 9.0% % % -0.20% 8.40% Source: Berenberg estimates Change 16.7 With the latest portfolio acquisition of nine retail properties for 50m DKR has again shown its deal-sourcing ability. Given the company s access to capital, as shown with the latest capital increase, and its local network being strengthened by being a repeated investor, we believe the company can continue to acquire single as well as portfolios of properties. At the same time, we would not necessarily expect the competition in this segment to intensify that much, as DKR can act rather opportunistically and has the advantage against local competitors in ensuring deals are finalised quickly. We have pencilled in an annual acquisition volume of about 100m with initial yield of c10%. We would appreciate if DKR would increase its exposure to retail parks in particular. We have not modelled valuation changes for the newly acquired properties, nor have we assumed any disposals in our model. However, we would encourage the company to dispose of non-core assets and properties where the value has increased, in order to materialise capital gains and to demonstrate the upside potential of the portfolio. 18

19 Our forecasts for acquisitions m 2017/2018E 2018/2019E 2019/2020E 2020/2021E Amount spent Yield 11.0% 10.5% 10.0% 10.0% Rental income annualised Vacancy 8% 8% 8% 8% Rental income annualised / vacancyadjusted Rental income time-adjusted Total additional income from acquisitions accumulated Impact on GAV Debt for new acquisitions Cost of debt 2.6% 2.50% 2.40% 2.30% Annual interest expenses Interest expenses time-adjusted Additional interest expenses for acqusisitions accumulated Source: Berenberg estimates Combining our lfl scenario for the existing retail portfolio with our assumptions for acquisitions (again, we have no valuation scenario for new properties), we believe that DKR should continue to grow the portfolio and net asset value over the coming years. The growth in net asset value per share will be somewhat lower as we have incorporated a 10% capital increase annually for the next two years in order to finance the growth. This should not be seen as a surprise as DKR as a REIT can only retain a small amount of annual profits according to German GAAP because of a payout ratio of 90%. Also, REIT legislation requires an equity ratio of at least 45%, which means that DKR s gearing levels are also somewhat limited. DKR to steadily grow portfolio and net asset value further ( m ( m/ ) m Investment properties m EPRA NAV EPRA NAV per share FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E 0 FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E 0.00 FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E Source: Berenberg estimates Accordingly, DKR s key earnings numbers for rental income, net operating income, adjusted EBITDA and FFO should grow steadily over the next few years. Our clear preference for companies acting as principal investors is to have the broad range of operational activities, including property management, in-house. While it is clearly understandable that DKR has been working with external partners, we would strongly welcome seeing more functions being brought in-house in the context of the growing portfolio. In terms of earnings we expect that FFO and adjusted FFO will also benefit from reduced financing costs. Furthermore, we anticipate some positive contributions from scale effects as growing the portfolio should lead to higher profitability. We forecast the payout ratio of 45% on FFO broadly to be maintained. In the fiscal year 2019/2020 the convertible bond will be converted into equity, leading to an increase in the outstanding number of shares of 15m. 19

20 DKR s key financials at a glance ( m/ ) 70.0 m FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E Rental income NOI Adjusted EBITDA (excl. revaluation result) FFO FY2015/16 FY2016/17E FY2017/18E FY2018/19E FY2019/20E FY2020/21E FFO per share DPS Source: Berenberg estimates Like most of the European property companies/reits, DKR has adopted the fair market value model, according to IAS 40, for the accounting of investment properties. This means that the result from the external portfolio valuation is part of the income statement, which could lead to relatively high volatility in the reported net profit according to IFRS. The key operational number is net operating income (NOI) and adjusted EBITDA. 20

21 Our estimates for DKR s income statement ( m) Income statement FY2015/2016 H1 FY2016/2017E FY2017/2018E FY2018/2019E FY2019/2020E FY2020/2021E Rental income Maintenance expenses Non-recoverable expenses Other expenses / income Total expenses for letting business Net operating income / NOI Disposal gains Book value of property disposals Expenses for disposals Net result from disposals Other operating income Valuation results of existing investment properties Valuation results of new investment properties Net result of investment property portfolio EBITDA reported EBITDA adjusted net of valuation and disposal results Personnel expenses Depreciation Write-down on receivables and inventories Other operating expenses Other / new items EBIT reported EBIT adjusted net of valuation and disposal results Financial income Financial expenses Other financial results Total financial results EBT reported EBT adjusted net of valuation and disposal results Total taxes Net profit reported Source: Company reports, Berenberg estimates For the bottom line we therefore regard FFO and adjusted FFO as much more relevant as they are not affected by non-cash valuation items. In our model, we expect corporate costs 21

22 and overheads to increase at a lower pace than the company s top-line growth, which will come from additional acquisitions. The increasing FFO margin also shows the effect from lower financing costs of 3.2% as of March, based on an average debt maturity of 5.2 years. We believe that DKR s marginal cost of debt is closer to c2.5% or lower and has been achieved in several mortgage loans recently. For the time being, and also because of the smaller size, we forecast DKR using bank loans for debt financing. Our forecasts for DKR s FFO ( m/ ) Calculation for Funds From Operations as reported by Deutsche Konsum FY2015/2016 H1 FY2016/2017E FY2017/2018E FY2018/2019E FY2019/2020E FY2020/2021E Reported net profit according to IFRS Cash taxes Depreciation Valuation results on investment properties Net disposal results Other operating income / expenses Other non-current / non-cash expenses Funds From Operations Interest expenses on convertible bonds FFO per share undiluted FFO per share diluted Capex spending Adjusted Funds From Operations AFFO per share undiluted AFFO per share diluted Dividend payments in m Dividends per share Source: Company reports, Berenberg estimates DKR s balance sheet looks very similar to those of other real estate companies, with investment properties and long-term financial liabilities as the two most relevant items. The convertible bond will expire in 2019 and we expect it to be converted into equity with the number of outstanding shares to rise accordingly. 22

23 Our forecasts for DKR s balance sheet ( m) Balance sheet FY2015/2016 H1 FY2016/2017E FY2017/2018E FY2018/2019E FY2019/2020E FY2020/2021E Investment properties Intangible assets Other long-term assets Deferred taxes Total long-term assets Trade receivables Tax claims Other short-term assets Cash Total short-term assets Total long-term and short-term assets Subscribed capital Additional paid-in capital Other reserves Other comprehensive income Retained earnings Total shareholders equity Minority holders Total equity Financial liabilities against banks Financial liabilities from covnertible bonds Other provisions Other long-term liabilities Deferred taxes Total long-term liabilities Short-term liabilities against banks Short-term liabilities against other creditors Other short-term provisions Trade payables Other short-term liabilities Total short-term liabilities Total equity and total long- and short-term liabilities Source: Company reports, Berenberg estimates We appreciate that DKR is strongly focused on solid balance sheet ratios and is keen to exceed the requirements according to German REIT law. Also, the number of lending banks has been increasing, which we expect to continue as the portfolio s regional focus widens further. 23

24 DKR to maintain solid financial ratios Financial ratios FY2015/2016 H1 FY2016/2017E FY2017/2018E FY2018/2019E FY2019/2020E FY2020/2021E Total bank debt and convertible / corporate bonds Unrestricted cash Net debt Investment properties, properties under construction, properties held for sale, inventories Net loan-to-value 54.2% 37.3% 42.3% 44.1% 43.3% 39.0% 41.6% Total loan-to-value 61.2% 45.5% 50.3% 46.3% 46.5% 42.9% 43.2% Net debt including convertible bond and corporate bond Cash interest expenses Adjusted EBIT net of valuation results ICR Equity before minorities according to IFRS including shareholder loans Net gearing 101.3% 57.2% 70.9% 77.2% 75.0% 63.2% 70.3% Net gearing including convertible / corporate bonds 101.3% 57.2% 70.9% 77.2% 75.0% 63.2% 70.3% Net debt including convertible bond / adjusted EBITDA Equity ratio 45.3% 57.7% 53.4% 54.6% 54.9% 58.6% 57.4% Source: Berenberg estimates In addition to FFO, DKR regards growth in net asset value (NAV) as an important measure for successful portfolio management. We tend to agree given the currently above-average portfolio yields, although generally we regard the development in earnings and dividends as more relevant. We also refer to the EPRA NAV metric, which has become a standard measure in the industry. In being a REIT, DKR has no deferred tax assets and deferred tax liabilities on the balance sheet, which is why the EPRA net asset value equals the IFRS equity. Following the conversion of the convertible bond and having incorporated a 10% capital increase for each of the next two years, the progress in EPRA NAV per share is still attractive but obviously somewhat affected. Our forecasts for DKR s net asset value Calculation of EPRA Net Asset Values as reported FY2015/2016 H1 FY2016/2017E FY2017/2018E FY2018/2019E FY2019/2020E FY2020/2021E Total shareholders equity Net asset value per share Fair value of derivatives Deferred taxes Other / new items EPRA Net Asset Value EPRA Net Asset Value per share undiluted Conversion of convertible bonds Adjusted EPRA Net Asset Value Adjusted EPRA Net Asset Value per share diluted Source: Company reports, Berenberg estimates 24

25 Valuation Standalone valuation leads to as fair value For the valuation of property stocks we typically follow a standardised approach, which is based on return on net asset value (EPRA NAV) and a three-stage Gordon growth/dividend discount model. Through this method, we try to determine if a company generates or destroys value. The total return is split into: 1) the economic return, which is the sustainable operating profit defined as FFO excluding disposal gains; and 2) the indirect profit, which is the result of the lfl valuation changes of the investment property portfolio. The total return is typically forecast for three years. The return on NAV is then compared with the cost of equity. By adding company-specific risk premiums such as those reflecting financial leverage and financial structure, portfolio and tenants quality or transparency we derive the cost of equity. By incorporating financial and non-financial items, we attempt to calculate a correctly priced, company-specific cost of equity. Finally, the spread between total return and cost of equity in relation to the company s economic profit leads us to the economic value that is generated or destroyed by the company. By adding the net present values of the forecast economic value to the NAV, we reach the fair value of the company. In general, we believe that a standalone valuation is more reasonable than a peer group-based approach. For DKR s base cost of equity calculated via the CAPM we start with a normalised risk-free rate of 2.75%, a risk premium of 3.5% and a beta of 0.9. Additionally, we derive company-specific risk spreads of 180bp for DKR according to the following criteria, which leads to a total cost of equity of 7.7%. Cost of equity Deutsche Konsum REIT - calculation for cost of equity Portfolio Asset type 0.30% Focussed / Multi-focussed 0.00% Location (national/pan-european) 0.20% Quality of assets / tenant structure 0.10% Development exposure 0.00% Management In-/external management 0.30% Experience/track record 0.00% Financing structure LTV 0.00% Structure of debt 0.00% Shareholder structure 0.40% Liquidity / Indices 0.40% Transparency 0.10% Corporate Governance 0.00% Total risk premiums 1.80% Normalised risk free rate 2.75% Risk spread 3.50% Beta 0.90 Total Cost of Equity 7.70% Source: Berenberg estimates 25

26 Based on return on NAV, we derive a fair value of c 10 for DKR based on our estimates for FY 2017/18, with 30 September 2018 ending as the first fiscal year. Valuation of DKR based on return on net asset value Deutsche Konsum - Return on NAV valuation m/ 2018E 2019E 2020E 2021E year-end 30 Sep 2018 year-end 30 Sep 2019 year-end 30 Sep 2020 year-end 30 Sep 2021 FFO I Revaluation results New equity Other items Total return EPRA Net Asset Value Adjustments Adjusted NAV Return on NAV 15.7% 15.2% 13.2% 13.0% Cost of equity 7.70% 7.70% 7.70% 7.70% Spread 8.0% 7.5% 5.5% 5.3% Value creation Year NPV Total value creation Net Asset Value Adjustments Equity value Source: Berenberg estimates We expect the payout ratio to be broadly maintained for the longer term. Our dividend discount model valuation, therefore, derives a fair value for DKR of 10. Fair value of DKR based on dividend discount model Source: Berenberg estimates Fair Value 12M Number of shares Fair Value per share Deutsche Konsum - valuation on Dividend Discount Model Mid-term growth 4.00% Terminal growth 1.75% Sustainable payout 55% Normalised CoE 7.00% DPS FFO Payout EPRA NAV Return on Cost of equity equity (NAV) Growth Year FY % % 7.70% FY % % 7.70% #DIV/0! 1 FY % % 7.70% 20% 2 FY % % 7.70% -23% 3 FY1 FY2 FY3 NPV NPV of forecasted dividend 0.89 FY FY FY FY FY FY FY4 FY5 FY6 FY7 FY8 FY9 NPV NPV of dividend FY4-FY NPV of Terminal Value 8.91 Fair Value

27 The range for DKR s fair value on a standalone basis on both valuation methods comes out relatively close. On an equal-weight basis, the fair value for DKR comes out at 10 on a standalone basis. This implies for the next fiscal year ending on 30 September 2018 an earnings yield on FFO of 7.5% and a dividend yield of 3.3%. Range of fair value for DKR on a standalone basis ( ) Valuation based on return on net asset value Valuation based on dividend discount model Average valuation on a stand-alone basis Source: Berenberg 27

28 Peer group valuation leads to an average fair value of 8.70 Peer profiles Deutsche Euroshop: Germany s largest retail property stock, Deutsche Euroshop has a portfolio that consists of 21 shopping centres, 17 of which are located in Germany, and one each in Poland, Austria, Czech Republic and Hungary. Its investment strategy is long-termorientated, with a buy-and-hold-and-develop strategy. The malls are preferably situated in city centres or in locations with good transport connections. Hamborner REIT AG: One of the two REITs in the peer group, Hamborner s commercial portfolio is split about one-third each in office, high street retail and large-scale retail. Since the introduction of its new, more focused strategy in 2007, its portfolio size has more than tripled, with the average size of its assets more than doubling due to portfolio recycling and external acquisitions. Typically, Hamborner buys newly built or completely refurbished single properties with high or even full occupancy levels on a long-term basis, with tenants of high quality. Sirius: As of 31 March 2017, Sirius was the largest listed property company specialising in mixed-use flexible workspaces in Germany (including traditional office properties), with an investment portfolio worth ceur0.8bn (as of March 2017). Established in 2007, the company now owns 44 business parks and some single properties across the country, with a stronger regional exposure to regions with solid economic fundamentals. The company is internally managed, with all asset and property management functions carried out inhouse; its own employees manage the properties locally. In the main, Sirius s tenants are small- and medium-sized enterprises, which are the backbone of the German economy. TLG Immobilien AG: TLG is an active portfolio manager with a commercial portfolio focused on offices and retail properties in eastern Germany. Its strong regional focus is on Berlin and Dresden, where TLG also owns a number of hotel properties. In the last year TLG announced a regional expansion to western Germany and has bought three office properties in Frankfurt since then. The majority of the assets are so-called core and core+ properties, which benefit from long-term leases. TLG recently issued a friendly takeover offer on WCM, but is included in our peer group section on a standalone basis. VIB Vermoegen: Together with Sirius, VIB is one of Germany s two listed property companies with a large exposure to logistics and light industrial properties. About 61% of its ~ 1.1bn pure commercial portfolio is logistics and industrial real estate, followed by large-scale retail properties (32%). Its regional focus is on southern Germany, the country s industrial backbone, with close proximity to the relevant logistics regions. In total, VIB owns 103 properties. WCM Beteiligungs- und Grundbesitz-AG: WCM specialises in acquiring and managing German office and retail properties in the core and core+ segments. It is also investing selectively in the value-add segment and seizes opportunities to sell properties by generating capital gains. WCM grew its portfolio substantially in 2015, making several acquisitions. With 240m of GAV, DKR has by far the smallest portfolio size so far, followed by Sirius, VIB and WCM. Deutsche Euroshop s total portfolio is the largest of our peer group. In terms of vacancy rate, DKR and Sirius stand out with significantly higher vacancy than the rest of the peer group. In general, we would expect DKR s portfolio to have a somewhat higher vacancy rate due to the acquisition focus on value-add properties, with the reversionary potential in rents and values to be realised over time. Weighted average lease terms (WALTs) are broadly comparable across the entire peer group, but Sirius has the lowest WALTs and the highest vacancy. DKR has the highest rental yield due to exposure mainly to eastern Germany, followed by Sirius s and VIB s also somewhat higher, which is to some degree due to significant exposure to more industrial assets/warehouses. Portfolio details of DKR s and peers operational KPIs DKR Deutsche Euroshop Hamborner Sirius TLG VIB WCM Investment properties 0.2bn 4.4bn 1.2 bn 0.8bn 2.2bn 1.0bn 0.8bn Vacancy rate 12.9% 1.2% 1.3% 19.0% 3.3% 1.3% 4.3% WALT 4.6 years 5.7 years 6.6 years 2.5 years 6.1 years 5.8 years 8.2 years Rental yield 9.8% 5.2% 5.1% 8.1% 6.7% 7.1% 6.0% Source: Most recent published company reports 28

29 When we examine the portfolio split of the peers, DKR and Deutsche Euroshop both have 100% exposure to retail, although DKR s portfolio is a mix of different asset types whereas Deutsche Euroshop is concentrating on shopping centres only. Other peers with significant exposure to retail are Hamborner, WCM and TLG. Sirius and VIB have the highest exposure to industrial/warehouses. Historically, REITs/property companies with a clear sector focus have been somewhat preferred by investors, particularly in countries with a high number of listed and liquid property stocks offering a broad variety of sectors, regions and business models, such as in the US or Asia. Sector focus of DKR and peers Deutsche Konsum Hypermarkets, 16% Local supply center, 28% Discounter, 12% Retail park, 41% DIY, 3% Deutsche Euroshop Hamborner Large-scale retail, 40% Highstreet retail, 29% Shopping centres, 100% Offices / other, 31% Sirius TLG Production, 26% Retail, 40% Storage, 35% Other, 9% Smartspace, 6% Hotel, 12% Office, 24% Offices, 45% Others, 3% VIB WCM Retail, 31% Logistics / Light industry, 62% Offices, 4% Commecial buildings and others, 3% Retail, 47% Office, 53% Source: Most recent published company reports 29

30 The majority of DKR s portfolio is located in eastern Germany, similar to TLG. Deutsche Euroshop is the only one of the peers with a small exposure to outside Germany. Regional focus of DKR and peers Deutsche Konsum Deutsche Euroshop Saxony Anhalt 13% Mecklenburg 18% Saxony 22% Brandenburg 17% Thuringia 12% Saxony 22% Lower Saxony 8% NRW 6% Schleswig- Holstein 2% Berlin 1% Germany, 93% Austria, Hungary & Poland, 7% Hamborner TLG Bavaria, 18% Hesse, 8% Lower Saxony, 7% Berlin, 6% Schleswig - Holstein, 5% Dresden, 15% Leipzig, 7% Rostock, 8% Hamburg, 3% Baden- Wurttemberg, 20% Bremen, 2% Saxony, 2% Berlin, 40% Other, 30% North-Rhine West, 27% Rhineland - Palatinate, 2% VIB WCM Bavaria, 80% Hesse, 6% Baden - Wurtember g, 3% Others, 11% East Germany, 38% West Germany, 41% South Germany, 16% North Germany, 4% Source: Most recent published company reports 30

31 The lease expiry schedules of all peers are relatively similar: Sirius will be facing higher maturities over the next three years because of the different asset class. In general, we regard an annual expiry of about 10% of the entire lease contracts as standard for office and retail real estate. From DKR we understand that the company is already in advanced negotiations for the lease maturities in the next two years and that the anchor food retailers have been signalled their interest to stay and to extend the lease contract on a longer term basis. Lease expiry profile of DKR and peers 60% 50% Deutsche Konsum 40% 30% 20% 10% 0% > 4 yrs 100% 80% Deutsche Euroshop 80% 70% 60% Hamborner 60% 50% 40% 40% 30% 20% 20% 0% >4 years 10% 0% >4 years 35% 30% 25% 20% 15% Sirius 40% 35% 30% 25% 20% TLG 10% 15% 5% 10% 0% > 4 yrs 5% 0% >4 years 25% 20% 15% 10% 5% 0% VIB <1 year 1-3 years 3-5 years >5 years 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% WCM >4 years Source: Most recent published company reports In addition to the companies portfolio details, investors have been closely following the strength of their balance sheet ratios. In general, we appreciate that the vast majority of German property companies have reduced their LTV levels in combination with longer debt maturities. DKR s debt is a mix of bank loans and convertible bond. DKR s average interest rate on financial liabilities including the convertible bond is 3.24% (2.55% on bank loans only). The higher average cost of debt for VIB is because the company usually 31

32 finances via annuity loans, which minimises the extension risk. So far none of the peer group has investment-grade credit ratings. Details on debt structure of DKR and peers DKR Deutsche Euroshop Hamborner Sirius TLG VIB WCM LTV 36.1% 35.3% 35.1% 38.0% 38.0% 53.6% 56.6% Average cost of debt 3.2% 3.0% 2.8% 2.0% 2.4% 3.1% 1.9% Average debt maturity 5.2 years 5.6 years 6.3 years 5.8 years 5.8 years 6.1 years 6.0 years Source: Most recent published company reports DKR still has a higher amount of debt due by the end of the current fiscal year; however, it is already in the final stages of negotiation for the debt extension. We would foresee a fairly significant reduction on the average financing costs once the mortgage loan has been extended. In terms of the debt expiry schedule, we note that all of the peers have a relatively low level of debt due in the short term and a fairly defensive maturity schedule. Debt maturity profile of DKR and peers in m Deutsche Konsum > 5 yrs 1,200 Deutsche Euroshop 300 Hamborner 1, in m 600 in m <1 year 1-5 years >5 years >5 years in m Sirius > 5 yrs in m TLG >5 years in m VIB >5 years in m WCM >5 years Source: Most recent published company reports 32

33 DKR is the only company in the peer group with higher exposure to capital markets debt, having two outstanding convertible bonds. Apart from Deutsche Euroshop, which has a small exposure to non-bank debt, all other peers rely 100% on bank loans. Details on debt structure of DKR and peers Deutsche Konsum Bank loan, 59% Convertible bond, 41% Deutsche Euroshop Hamborner Convertible bond, 6% Bank loans, 94% Bank loans, 100% Sirius TLG Bank loans, 100% VIB Bank loans, 100% WCM Bank loans, 100% Bank loans, 100% Source: Most recent published company reports 33

34 With the exception of DKR, VIB and Sirius, other peers are members of the EPRA indices, which is the most relevant index family for European real estate securities. Deutsche Euroshop is also a member of the German MDAX, while Hamborner, TLG and WCM are members of the German SDAX. Stock market details of DKR and peers DK Deutsche Euroshop Hamborner Sirius TLG VIB WCM Share price ( ) Market cap ( m) 209 2, , Free float 32% 83% 70% 73% 81% 80% 61% Largest holder 31% 18% 13% 9% 13% 9% 25% 52W high ( ) W low ( ) Average daily turnover (shares, 1Y) 11, , , , ,000 15, ,000 Weighting in EPRA Global % 0.05% % % Weighting in EPRA Europe % 0.32% % % Weighting in MDAX % Weighting in SDAX % % % Source: Company reports, Datastream as of 07 August 2017 The performance has been fairly positive on a one-year basis for most of the peers shares. DKR and peers share price performance YTD performance 1 year performance 3 years performance Sirius 33% Sirius 42% WCM 201% WCM 28% VIB 14% Sirius 139% TLG 10% WCM 7% VIB 8% Deutsche Konsum 5% VIB 66% HAMBORNER REIT 7% TLG -3% HAMBORNER REIT 33% Deutsche Konsum 3% HAMBORNER REIT -7% Deutsche Euroshop -6% Deutsche Euroshop -13% Deutsche Euroshop 11% Source: Datastream as of 07 August 2017 Obviously, the difference among the peer group is notable. Nevertheless, we think that VIB and Sirius should still be included as they are still small-cap companies with portfolios of c 1bn each. From a portfolio perspective we think that Hamborner, which is also a REIT with about a third of its portfolio being large-scale retail properties, and TLG (on a standalone basis) because of its exposure to retail properties in eastern Europe are comparable. WCM, meanwhile, has a fairly high exposure to supermarkets with Edeka being a tenant. Deutsche Euroshop is not included in the peer-group based valuation for DKR it is more to illustrate the different valuation levels for mid-cap property companies. For FY 2018, DKR s closest peers are trading at a median FFO yield of 6.9%, at a median dividend yield of 4.1%. The median discount to NAV is -8%. 34

35 Valuation levels of peers COUNTRY SPLIT Crcy Price Market cap LTV Net gearing Float % Dividend Yield FFO yield EV/EBITDA Premium/(discount) NAV 15a 16e 17e 18e 15a 16e 17e 18e 15a 16e 17e 18e 15a 16e 17e 18e Deutsche Konsum EUR % 71% % 0.0% 4.0% 3.7% 5.4% 8.9% % 40% 9% Close peers HAMBORNER REIT EUR % 92% % 4.7% 4.7% 4.9% 5.5% 5.9% 6.0% 6.6% % -4% -7% -9% Sirius GBp % 45% % 0.1% 0.1% 0.1% 7.8% 0.1% 0.1% 0.1% % -1% -3% -9% TLG Immobilien EUR ,399 42% 92% % 4.2% 4.4% 4.8% 6.0% 6.0% 6.3% 6.9% % 2% -2% -8% VIB EUR % 107% % 2.6% 2.8% 2.9% 6.9% 6.3% 6.9% 7.7% % 22% 16% 11% WCM EUR % 135% % 3.1% 3.7% 4.1% 3.9% 4.4% 6.2% 6.9% % 25% 7% -2% average peers 45% 94% 3.1% 2.9% 3.1% 3.4% 6.0% 4.5% 5.1% 5.6% % 9% 2% -3% median peers 42% 92% 4.2% 3.1% 3.7% 4.1% 6.0% 5.9% 6.2% 6.9% % 2% -2% -8% Other peers Deutsche Euroshop EUR ,027 35% 91% % 4.0% 4.1% 4.3% 5.7% 6.9% 7.1% 6.9% % -19% -14% -17% Source: Berenberg, Datastream as of 07 August 2017 The mid-point of the peer-group-based valuation range for DKR derives 8.70 as a fair value or at 9.00 when only referring to peer group s valuation multiples P/NAV and FFOyield. Peer-group based valuation range for DKR Valuation basedvaluation basedvaluation based Peer groupbased Based only on on P/NAV2018E on P/FFO2018E on DY2018E fair value peers' P/NAV for DKR (average) and FFO-yield for DKR (average) Source: Berenberg estimates 35

36 Snapshot of property markets Food retail sales have increased along with an increase in consumer spending. While selling space has remained relatively stable, the smaller and unprofitable outlets have been closed. This has led to an increased number of sales per square metre. More restructuring will take place in order to adjust to an aging population and to defend the company s position against online food retail. More focus will lie on consumer experience and quality of service. Development of food retail in Germany Source: Bulwiengesa AG number of outlets Selling space Sales Today, more customers are willing to buy higher-quality foods. However, there is still a large difference between the old and the new federal states, with the discounter segment having a far higher market share in the east than in the west. One of the reasons for this is the lower spending power in the old federal states. Share of total selling space held by different business types by region South-West East North-West 15% 15% 14% 14% 35% 13% 45% 14% 36% 37% 27% 36% Discounters Supermarkets (400<2,500 sqm) Large supermarkets (2,500 < 5,000 sqm) Hypermarkets (> 5,000 sqm) Source: Bulwiengesa AG Development of sales per unit area in food retail Source: Bulwiengesa AG 36

37 There are five top market players in German food retail that jointly have 84% of the market share. Edeka Group is the largest food retailer in Germany, taking up almost a quarter of 2016 sales volume. The consolidation process continues to leave the smaller retail stores as outcasts. Top five market players in German food retail Schwarz Group 17% Rewe Group 16% Edeka Group 24% Aldi Group 13% Metro Group 14% Other 16% Source: Bulwiengesa AG However, the German food retail market is still very diversified, with the food retailers having different supermarket lines to target the different consumer needs. Edeka and Rewe Group are both active as premium food retailers as well as discounters with their lines Netto and Penny, respectively. Food retail lines Edeka Group Rewe Group Schwarz Group Metro Group Aldi Group Marktkauf, Ratio, E-Center, Aktiv Discount, E-Neukauf, E Reichelt, Edeka, E-Aktiv Markt, Kupsch, Netto, Netto City, NP, Diska, Treff 3000, Prof Top Getränke, Trinkgut, Netto Getränkemarkt, K&U, Wünsche, Büsch, Thürmann, Schäfer's Schwarzwaldhof, Kaiser's Tengelmann (stores reflagged in 2017) toom, Rewe Center, Akzenta, Rewe, Rewe City, Kaufpark, Standa, Perfetto, Penny, Nahkauf, Temma, Rewe to go, toom Getränkemarkt, Kölner Weinkeller, Glocken Bäckerei, Rothermel, Kaiser's Tengelmann (store reflagging in 2017), Coop (store reflagging planned) Lidl, Kaufland, Kaufmarkt, Handelshof real,- Aldi Süd, Aldi Nord Source: Bulwiengesa AG 37

38 Discounters have the biggest market share in German food retail. However, the recent trend has seen consumers becoming more willing to pay higher prices for higher-quality foods. Some discounters, such as Lidl, are therefore trying to become high-quality discounters. Market shares in food retail 100% 80% 60% 40% 20% 0% Discounters Supermarkets Large supermarkets Source: Bulwiengesa AG Hypermarkets Other food retailers Discounters and supermarkets with stores of between 400sqm and 2,500sqm are the most prevalent stores in German food retail, leading the way both in number and in total selling space. Development of selling space at food retailers by business type Discounter Supermarket Large supermarkets Hypermarket Small food retailer Source: Bulwiengesa AG Development of number of food retailers by business type 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Discounter Supermarket Large supermarket Hypermarket Small food retailer Source: Bulwiengesa AG 38

39 Average rents for food retailer have continuously increased over the past decades. However, there are still notable differences in the new and old federal states of Germany. Development of average rents for selected food retail business types New Federal states Old Federal states 11.7 Source: Bulwiengesa AG In retail, yields have also compressed over the past years, although they are still higher than commercial and residential yields and therefore attract investors interest. The eastern cities of Germany especially offer attractive yields. Average net initial yields non-central locations (127 RIWIS cities) 8.00% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% East A/B cities East C/D cities West A/B cities West A/D cities Berlin Source: Bulwiengesa AG 39

40 Financials Profit and loss account Year-end September (EUR m) E 2018E 2019E 2020E Net rental income Direct property expenses Net operating income Earnings from property disposals Earnings from project developments Earnings from other property activities Other operating income Total revenues Revaluation result from investment properties (net) Total income Administrative expenses Personnel expenses Other operating expenses Total operating expenses EBITDA EBITDA excl revaluation result (net) Depreciation EBITA EBITA excl revaluation result (net) Amortisation of goodwill Amortisation of intangible assets Impairment charges EBIT (incl revaluation result net) EBIT excl revaluation result Interest income Interest expenses Depreciation of financial investment Investment income Financial result Earnings before taxes (incl revaluation result) Earnings before taxes (excl revaluation result) Total taxes Net income from continuing operations (incl revaluation result) Net income from continuing operations (excl revaluation result) Income from discontinued operations (net of tax) Extraordinary items (net of tax) Cumulative effect of accounting changes (net of tax) Net income (incl revaluation result net) Net income (excl revaluation result net) Minority interest Net income (net of minority interest, incl revaluation result) Net income (net of minority interest, excl revaluation result) Funds from operations (FFO) Source: Company data, Berenberg estimates 40

41 Balance sheet Year-end September (EUR m) E 2018E 2019E 2020E Intangible assets Investment properties Development assets Property, plant and equipment Financial assets Other non-current assets Deferred tax assets FIXED ASSETS Properties held for sale Inventories Accounts receivable Accounts receivable and other assets Liquid assets CURRENT ASSETS TOTAL ASSETS Subscribed capital Surplus capital Additional paid-in capital Net profit/loss SHAREHOLDERS' EQUITY MINORITY INTEREST PROVISIONS AND ACCRUED LIABILITIES short-term liabilities to banks Bonds (long-term) long-term liabilities to banks other interest-bearing liabilities Interest-bearing liabilities Accounts payable Current liabilities Deferred income Deferred taxes LIABILITIES TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Source: Company data, Berenberg estimates 41

42 Cash flow statement EUR m E 2018E 2019E 2020E Funds from operations Other recurrent / non-recurrent items Increase/decrease in working capital Cash flow from operating activities Capex Payments for acquisitions Financial investments Income from asset disposals Cash flow from investing activities Increase/decrease in debt position Dividends paid Purchase of own shares Capital measures Others Cash flow from financing activities Cash flow from operating activities Cash flow after maintenance capex Cash flow before financing Increase/decrease in liquid assets Source: Company data, Berenberg estimates Ratios Ratios E 2018E 2019E 2020E Return on equity Net profit / Y/E equity 14.8% 8.9% 10.7% 10.5% 8.4% Recurring net profit / Y/E equity 5.9% 7.6% 9.6% 9.7% 8.3% Net profit / avg. equity 14.8% 8.9% 10.7% 10.5% 8.4% Recurring net profit / avg. equity 5.9% 7.6% 9.6% 9.7% 8.3% Security Net debt Debt / equity 114% 84% 81% 81% 69% Net gearing 101% 71% 77% 75% 63% Interest cover EBITDA / interest paid Dividend payout ratio 0% 0% 45% 45% 46% Dividend cover Loan-to-value (LTV) 39% 36% 31% 34% 38% Return on net asset value 5.9% 7.6% 9.6% 9.7% 8.3% Liquidity Current ratio Acid test ratio Source: Company data, Berenberg estimates 42

43 Please note that the use of this research report is subject to the conditions and restrictions set forth in the General investment stment-related disclosures and the Legal disclaimer at the end of this document. For analyst certification and remarks regarding foreign investors and country-specific disclosures, please refer to the respective paragraph at the end of this document. Disclosures in respect of Article 20 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation MAR) Company Deutsche Konsum REIT AG Disclosures no disclosures (1) Joh. Berenberg, Gossler & Co. KG (hereinafter referred to as the Bank ) and/or its affiliate(s) was Lead Manager or Co- Lead Manager over the previous 12 months of a public offering of this company. (2) The Bank acts as Designated Sponsor/Market Maker for this company. (3) Over the previous 12 months, the Bank and/or its affiliate(s) has effected an agreement with this company for investment banking services or received compensation or a promise to pay from this company for investment banking services. (4) The Bank and/or its affiliate(s) holds 5% or more of the share capital of this company. (5) The Bank holds a long position in shares of this company. (6) The Bank holds a short position in shares of this company. Production of the recommendation completed: , 18:29 Historical price target and rating changes for Deutsche Konsum REIT AG in the t last 12 months Date Price target - EUR Rating First dissemination GMT Initiation of coverage 08 August Buy - Click here for a list of all recommendations on any financial instrument or issuer that were disseminated during the preceding 12-month period. Berenberg enberg Equity Research ratings distribution and in proportion to investment banking services on a quarterly basis, as of 1 July 2017 Buy % % Sell % % Hold % % Valuation basis/rating key The recommendations for companies analysed by Berenberg s Equity Research department are made on an absolute basis for which the following three-step rating key is applicable: Buy: Sell: Hold: Sustainable upside potential of more than 15% to the current share price within 12 months; Sustainable downside potential of more than 15% to the current share price within 12 months; Upside/downside potential regarding the current share price limited; no immediate catalyst visible. NB: During periods of high market, sector, or stock volatility, or in special situations, the recommendation system criteria may be breached temporarily. Competent supervisory authority Bundesanstalt für Finanzdienstleistungsaufsicht -BaFin- (Federal Financial Supervisory Authority), Graurheindorfer Straße 108, Bonn and Marie-Curie-Str , Frankfurt am Main, Germany. General investment- related disclosures Joh. Berenberg, Gossler & Co. KG (hereinafter referred to as the Bank ) has made every effort to carefully research all information contained in this financial analysis. The information on which the financial analysis is based has been obtained from sources which we believe to be reliable such as, for example, Thomson Reuters, Bloomberg and the relevant specialised press as well as the company which is the subject of this financial analysis. Only that part of the research note is made available to the issuer (who is the subject of this analysis) which is necessary to properly 43

44 reconcile with the facts. Should this result in considerable changes a reference is made in the research note. Opinions expressed in this financial analysis are our current opinions as of the issuing date indicated on this document. The companies covered by Berenberg are continuously followed by the analyst. Based on developments with the relevant company, the sector or the market which may have a material impact on the research views, research reports will be updated as it deems appropriate. The functional job title of the person/s responsible for the recommendations contained in this report is Equity Research Analyst unless otherwise stated on the cover. The following internet link provides further remarks on our financial analyses: Legal disclaimer This document has been prepared by Joh. Berenberg, Gossler & Co. KG (hereinafter referred to as the Bank ). This document does not claim completeness regarding all the information on the stocks, stock markets or developments referred to in it. On no account should the document be regarded as a substitute for the recipient procuring information for himself/herself or exercising his/her own judgements. The document has been produced for information purposes for institutional clients or market professionals. Private customers, into whose possession this document comes, should discuss possible investment decisions with their customer service officer as differing views and opinions may exist with regard to the stocks referred to in this document. This document is not a solicitation or an offer to buy or sell the mentioned stock. The document may include certain descriptions, statements, estimates, and conclusions underlining potential market and company development. These reflect assumptions, which may turn out to be incorrect. The Bank and/or its employees accept no liability whatsoever for any direct or consequential loss or damages of any kind arising out of the use of this document or any part of its content. The Bank and/or its employees may hold, buy or sell positions in any securities mentioned in this document, derivatives thereon or related financial products. The Bank and/or its employees may underwrite issues for any securities mentioned in this document, derivatives thereon or related financial products or seek to perform capital market or underwriting services. Analyst certification I, Kai Klose, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by the Bank or its affiliates. I, Tina Munda, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein. In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by the Bank or its affiliates. Remarks regarding foreign investors The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. United Kingdom This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers. United States of America This document has been prepared exclusively by the Bank. Although Berenberg Capital Markets LLC, an affiliate of the Bank and registered US broker-dealer, distributes this document to certain customers, Berenberg Capital Markets LLC does not provide input into its contents, nor does this document constitute research of Berenberg Capital Markets LLC. In addition, this document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers. This document is classified as objective for the purposes of FINRA rules. Please contact Berenberg Capital Markets LLC ( ) if you require additional information. 44

45 Third-party research disclosures Company Deutsche Konsum REIT AG Disclosures no disclosures (1) BCM or its affiliates owned 1% or more of the outstanding shares of any class of the subject company by the end of the prior month. (2) The subject company is or was, during the 12-month period preceding the date of distribution of this report, a client of BCM or its affiliates. BCM or its affiliates provided the subject company non-investment banking, securities-related services. (3) BCM or its affiliates received compensation from the subject company during the past 12 months for products or services other than investment banking services. (4) During the previous 12 months, BCM or its affiliates has managed or co-managed any public offering for the subject company. (5) BCM is making a market in the subject securities at the time of the report. (6) BCM or its affiliates received compensation for investment banking services in the past 12 months, or expects to receive such compensation in the next 3 months. (7) There is another potential conflict of interest of the analyst(s), BCM, of which the analyst knows or has reason to know at the time of publication of this research report. (8) The research analyst or a member of the research analyst's household serves as an officer, director, or advisory board member of the subject company (9) The research analyst or a member of the research analyst s household has a financial interest in the equity or debt securities of the subject company (including options, rights, warrants, or futures). (10) The research analyst has received compensation from the subject company in the previous 12 months. * For disclosures regarding affiliates of Berenberg Capital Markets LLC please refer to the Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) section above. Copyright The Bank reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without the Bank s prior written consent Joh. Berenberg, Gossler & Co. KG 45

46 Contacts JOH. BERENBERG, GOSSLER & CO. KG Internet EQUITY RESEARCH AEROSPACE & DEFENCE CHEMICALS GENERAL MID CAP - UK (cont'd) METALS & MINING Ryan Booker Sebastian Bray Sam England Alessandro Abate Andrew Gollan Rikin Patel Ned Hammond Fawzi Hanano Charlotte Keyworth Omar Ismail Yuriy Vlasov Ross Law CONSTRUCTION Ian Osburn Saravana Bala Antony Plom REAL ESTATE AUTOMOTIVES Lush Mahendrarajah Edward James Kai Klose Cristian Dirpes Robert Muir Benjamin May Tina Munda Alexander Haissl Olivia Peters Owen Shirley Fei Teng Donald Tait TECHNOLOGY ENERGY Josep Bori BANKS Tibor Bokor GENERAL RETAIL Georgios Kertsos Adam Barrass Yuriy Kukhtanych (EM) Conrad Bartos Richard Odumosu Stephanie Carter Camilla Mazzolini Tammy Qiu James Chappell FOOD MANUFACTURING AND H&PC Michelle Wilson Andrew Lowe Rosie Edwards TELECOMMUNICATIONS Andreas Markou (EM) Philip Patricha HEALTHCARE Ondrej Cabejsek (EM) Alex Medhurst Fintan Ryan Scott Bardo Nicolas Didio Eoin Mullany James Targett Jakob Berry Usman Ghazi Peter Richardson Alistair Campbell Siyi He FOOD RETAIL Klara Fernandes Laura Janssens BEVERAGES Batuhan Karabekir (EM) Tom Jones Javier Gonzalez Lastra Dusan Milosavljevic Joseph Lockey THEMATIC RESEARCH Batuhan Karabekir (EM) Laura Sutcliffe Nick Anderson Matt Reid GENERAL MID CAP - DACH Charles Weston Oyvind Bjerke Gunnar Cohrs (DACH + US) Asad Farid BUSINESS SERVICES, LEISURE & TRANSPORT Martin Comtesse INSURANCE Robert Lamb Roberta Ciaccia Thomas Eble Charles Bendit Paul Marsch Najet El Kassir Charlotte Friedrichs Trevor Moss James Sherborne Stuart Gordon Gerhard Orgonas Emanuele Musio Josh Puddle Benjamin Pfannes-Varrow Iain Pearce TOBACCO Kate Somerville Julia Scheufler Jonathan Leinster Joel Spungin LUXURY GOODS GENERAL MID CAP - EU core Mariana Horn UTILITIES CAPITAL GOODS Aymeric Lang Zuzanna Pusz Oliver Brown Nicholas Housden Anna Patrice Andrew Fisher Sebastian Kuenne Trion Reid MEDIA Neha Saxena Philippe Lorrain Robert Berg Lawson Steele Rizk Maidi GENERAL MID CAP - UK Laura Janssens Simon Toennessen Calum Battersby Alastair Reid ECONOMICS Robert Chantry Sarah Simon Florian Hense Carsten Hesse (EM) Kallum Pickering Holger Schmieding EQUITY SALES SPECIALIST SALES UK ctd CRM LONDON (cont'd) AUTOS & TECHNOLOGY David Hogg Laura Cooper Mike Berry Ed Wales Gursumeet Jhaj Jessica Jarmyn Stewart Cook BANKS, DIVERSIFIED FINANCIALS & INSURANCE Peter Kaineder Madeleine Lockwood Mark Edwards Iro Papadopoulou James Matthews Rita Pilar Tom Floyd Calum Marris James McRae Tristan Hedley BUSINESS SERVICES, LEISURE & TRANSPORT David Mortlock CORPORATE ACCESS Peter King Rebecca Langley Eleni Papoula Lindsay Arnold Christoph Kleinsasser CONSTRUCTION,CHEMICALS, METALS & MINING Bhavin Patel Jennie Jiricny Simon Messman James Williamson Kushal Patel Stella Siggins AJ Pulleyn CONSUMER DISCRETIONARY Richard Payman Matthew Regan Victoria Maigrot Clémence Peyraud COO Office Michael Schumacher HEALTHCARE Christopher Pyle Greg Swallow Paul Somers Abigail James Joanna Sanders Fenella Neill MEDIA & TELECOMMUNICATIONS Mark Sheridan EQUITY TRADING Julia Thannheiser George Smibert EVENTS HAMBURG THEMATICS Alexander Wace Laura Hawes David Hohn Chris Armstrong Edward Wales Suzy Khan Gregor Labahn Paul Walker Charlotte Kilby Lennart Pleus SALES Natalie Meech Marvin Schweden BENELUX FRANCE Eleanor Metcalfe Omar Sharif Miel Bakker Thibault Bourgeat Rebecca Mikowski Philipp Wiechmann Bram van Hijfte Alexandre Chevassus Ellen Parker Christoffer Winter Dalila Farigoule Sarah Weyman GERMANY Benjamin Voisin LONDON Michael Brauburger SALES TRADING Edward Burlison-Rush Nina Buechs SCANDINAVIA HAMBURG Richard Kenny André Grosskurth Mikko Vanhala Tim Storm Chris McKeand Florian Peter Marco Weiss Ross Tobias Joerg Wenzel PARIS SWITZERLAND, AUSTRIA & ITALY Vincent Klein ELECTRONIC TRADING UK Andrea Ferrari Antonio Scuotto Jonas Doehler Fabian De Smet Gianni Lavigna Matthias Führer Jules Emmet Jamie Nettleton LONDON Sven Kramer Karl Hancock Yeannie Rath Assia Adanouj Matthias Schuster Sean Heath Benjamin Stillfried Charles Beddow BERENBERG CAPITAL MARKETS LLC Member FINRA & SIPC firstname.lastname@berenberg-us.com EQUITY RESEARCH EQUITY SALES SALES (cont'd) SALES TRADING Adam Mizrahi SALES Jessica London Michael Haughey Enrico DeMatt Ryan McDonnell Christopher Kanian CRM Kelleigh Faldi Emily Mouret Lars Schwartau LaJada Gonzales Isabella Fantini Peter Nichols Brett Smith Monika Kwok Ted Franchetti Kieran O'Sullivan Bob Spillane Shawna Giust Rodrigo Ortigao CORPORATE ACCESS Rich Harb Ramnique Sroa ECONOMICS Olivia Lee Zubin Hubner Matt Waddell Mickey Levy Tiffany Smith Michael Lesser Roiana Reid

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