EPP: powerful vehicle to exploit the Polish retail growth story

Transcription

1 EPP: powerful vehicle to exploit the Polish retail growth story Investor update NOVEMBER 208

2 Disclaimer This document has been prepared and issued by and is the sole responsibility of the management of EPP N.V. (the Company or EPP ) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, to any other person. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company s business, financial condition and results of operations. These statements, which contain the words anticipate, believe, intend, estimate, expect, forecast and words of similar meaning, reflect the management beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The information on which these statements has been based has not been reviewed or reported by EPP s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.

3 Section Introduction to EPP

4 Introduction to EPP Executive management team Hadley Dean CEO Jacek Baginski CFO Michal Swierczynski Head of Asset Management Wojciech Knawa Head of Property Management Rafal Kwiatkowski COO >20 years of real estate experience Former CEO of Compass Offices EMEA operations Former Managing Partner of Eastern Europe at Colliers International In 207 received the EuroBuild Real Estate Personality of the Year (207) award >20 years of experience across CEE Member of a number of Management and supervisory Boards Former CFO in companies listed on the Warsaw Stock Exchange and those controlled by large private equity funds in CEE Former Member of the Management Board and CFO of Empik Media & Fashion >20 years of real estate experience across Poland, Russia and Germany Former Venture Partner and the Head of Retail at Griffin Real Estate Former Associate Director at JLL Russia Former Head of Leasing and Development at ECE Projektmanagement 7 years of experience in commercial real estate Former Managing Director at Echo Investment Property Management Previously, worked in the hotel and office sectors >5 years of real estate experience Former Chief Legal Officer at Echo Investment Former Member of the Supervisory Board at Barlinek and Opoczno Source: Company filings 3

5 Introduction to EPP Investment thesis Why Poland? Why retail? One of the few economies that demonstrated resilience through the global financial crisis Consistently high GDP growth, well above other Western European economies Exposure to 38m population Safe haven status due to economic and political stability and convergence towards EU living standards, well educated and large population base Public debt and budget deficit as % of GDP expected to fall to 52% and.3% by Q4 8 Rapid increase in consumer spending, expected to continue Lack of high-street proposition Online emergence amplifying brick and mortar retail, while Allegro equivalent Amazon already present Click n collect concept driving further in store purchases, cost of delivery remain high and inconvenience of delivery driving consumers to pick up goods in stores. Tenants increasingly expanding and new e-retailers launching e-stores Polish GDP growth CAGR 8-20 of 3.2% vs.7% in Western Europe 3 Recently upgraded by FTSE RUSSELL to developed market Consumer spending growth CAGR 8-20: 5.7% Offline sales growth of 4.2% in the next 3 years Why EPP? Largest Polish retail real estate player High quality dominant shopping centres in strategic locations Predictable cash flows, further supported by consistently high occupancy, long leases and secured pipeline of assets Breadth of expertise within EPP allowing it to win tenants vs. market (EPP university, Dash boards etc.) Strong growth profile (organic and inorganic) backed by in house platform Retail occupancy: 99.4% 9% 4 div. yield LFL NRI growth: 4.% EUR333m acquisition pipeline & c.eur.bn development pipeline 2 Source: Company filings, Oxford Economics As of H 8 report; 2 Represents estimated value at completion; 3 Western Europe (EU5) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK; 4 Div. yield calculated as mid-point of management guidance DPS 8E of.70 cents / Share price of EUR.3 as of November 7, 208 4

6 Introduction to EPP EPP at a glance Overview Dominant Polish shopping centre portfolio focus Geographical footprint Pure play Poland Focus on dominant retail assets EUR.9bn 3 Standing retail (9 assets) Szeczecin Inowroclaw PP Olsztyn Lomza Largest retail landlord in Poland Anchor shareholder: Redefine properties GAV: EUR2.bn Dividend yield: 9% 2 (JSE listed with 3.2bn market cap) Retail Occupancy: 99.4% Employees: >50 EUR.bn 4 Retail development Mlociny Q2 9 Towarowa /5 EUR308m Office (6 assets) EUR333m M Tranches 2 & 3 (8 assets) Jelenia Gora Klodzko EPP sites Poznan Kalisz Wroclaw Wloclawek Warsaw Lodz M Radom Belchatow M Czestochowa PP Opole Kielce Zamosc Czeladz M Bytom Zabrze Przemysl PP Tychy Krakow Source: Company filings H8 Total portfolio value, excluding value of developments, EUR2.4bn including them; 2 Div. yield calculated as mid-point of management guidance DPS 8E of.70 cents / Share price of EUR.3 as of November 7, 208; 3 Marcelin shopping centre acquired post year end, EUR,763 ex. Marcelin; 4 Total estimated value on completion Mlociny EUR42 and Towarow 22 EUR680m 5

7 Introduction to EPP EPP s strategy Create an income-generating retail champion in Poland 2 Develop even larger scale with prudent leverage Leading Polish retail landlord focused on income generation Dominant, defensible and sustainable portfolio located in key locations Consolidation of key retail assets in strategic locations Growth driven by acquisitions of hand-picked retail assets, extensions and two developments in prime locations in Warsaw Steady deleveraging towards the mid-term LTV target of 45% Cautious liquidity management 3 Utilise strategic relationships 4 Maintain efficient operations through expertise Leverages relationships with tenants by exploiting economies of scale Strong relationships in the international capital markets. Experienced asset and property management teams and excellent staff retention Direct cooperation between asset management team and the client base to optimise tenant mix Source: Company filings 6

8 Introduction to EPP Journey since listing Consistent growth demonstrated since IPO Listing Listed on Luxembourg Stock Exchange (Aug-6) and private placement listing on JSE (Sep 6) Retail Acquisition of Zakopianka Date: May-7 Location: Krakow GLA: 26,42 Retail Acquisition of Galeria Mlociny Date: Jun-7 Location: Warsaw GLA: 82,22 Retail Acquisition of Galeria Solna Date: Jul-7 Loc.: Inowroclaw GLA: 23,359 Office Sale of A4 Business Park (I, II, III) Date: Dec-7 Location: Katowice GLA: 30,556 Office Sale of West Gate Date: Dec-7 Location: Wroclaw GLA: 6,646 Office Sale of Tryton Business House Date: Dec-7 Location: Gdansk GLA: 23,875 2 Aug/Sep Oct Retail Nov Dec Development of Towarowa 22 Date: Dec-6 Zoning: 209 Start of construction: 202/2022 Completion: 2024/2025 Location: Warsaw GLA: 05,000 (additional potential 45,000) 207 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 208 Capital raise Apr -7 Equity raise of EUR50mm in an ABB through private placement of new shares. Retail Acquisition of Blackstone portfolio Date: Jun-7 Wzorcownia Location: Wloclawek GLA: 25,423 Twierdza Zamosc Location: Zamosc GLA: 23,806 Retail Acquisition of 4 assets under tranche of M portfolio Purchase price: EUR359mm GLA: 94,400 Rest of the portfolio (8 properties representing 252,000 sqm) to be acquired in 209/2020 Jan Feb Mar Capital raise Jan Raised equity of EUR3mm Apr May Jun Jul Aug Sep Capital raise Jul Raised equity of EUR45mm on JSE with Redefine Retail Acquisition of King s Cross Marcelin Date: July-8 Location: Poznan GLA: 45, k sqm of M retail space 3 Twierdza Klodzko Location: Klodzko GLA: 23, Sep-6 Dec-6 Mar-7 Jun-7 Sep-7 Dec-7 Mar-8 Jun-8 Source: EPP 30% owned by Echo Investment S.A. until development phase completion 2 Tryton Business House GLA increased from 23,537 sqm in Q4 206 to 23,875 sqm in Q Tranche II and III of M portfolio 4 Excluding developments, EUR2.4bn including them Acquisitions Disposals Equity raise 7

9 Introduction to EPP EPP at a glance Portfolio growth and strategy executed EPP performance update (H 8) Total portfolio value (EUR m) Retail portfolio GLA (m 2 ) Net asset value per share (EUR),20,623 2, , , , IPO- Aug 206 H 207 H 208 IPO- Aug 206 H 207 H 208 IPO- Aug 206 H 207 H 208 LTV (%) Share in retail portfolio (%) Number of shopping centres 56.4% 85% % 50.9% 76% 74% 9 3 IPO- Aug 206 H 207 H 208 IPO- Aug 206 H 207 H 208 IPO- Aug 206 H 207 H 208 Source: Company filings 8

10 Section 2 Key investment highlights

11 2 Key investment highlights Key investment highlights 6 Active balance sheet management Poland: growth engine of Europe 2 National retail champion 5 3 Secured pipeline 4 Predictable cash flows Platform for organic growth 0

12 2 Key investment highlights Why Poland? Why retail? Why EPP? Poland: Growth engine of Europe Largest economy in CEE region outpacing Western Europe Population and nominal GDP breakdown Population FDI Polish foreign direct investment stock (US$bn) GDP growth and Debt/GDP in Poland vs. WE Real GDP CAGR (%) Poland Western Europe pp +.5pp 38m 3.2 m 5m m 20m 7m Nominal GDP across CEE (%) Hungary Czech Republic Slovakia 7 Bulgaria 8 Romania Poland Only developed economy in the region Total CEE nominal GDP: EUR,4bn E 209E 2020E Debt / GDP Poland Western Europe 86% 86% 83% 5% 54% 5% Source: Economist Intelligence Unit, European Commission, Oxford Economics, BMI Western Europe Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK

13 Unemployment rate (%) Real wages growth (%) 2 Key investment highlights Why Poland? Why retail? Why EPP? Poland: growth engine of Europe Improving labour market and consumer sentiment Unemployment rate and Real wages growth evolution Consumer spending evolution Unemployment rate (%) Real wages growth (%) Consumer spending (EURbn) CAGR (%) 6% Western Europe Poland Western Europe2 Poland2 2 6% 4% 2% 0% 2 5% 5% 4% % 8% 3% 3% % 6% 4% 2% 5% 4% % % 0% 0% Source: EIU, Oxford Economics, OECD, Euromonitor, IMF Western Europe includes Belgium, France, UK, Ireland, Luxembourg 2 Western Europe (EU5) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK 3 USDEUR Fx rate of A 206A 207A 208F 209F 2020F Poland Western Europe 2

14 (EURm) Other Polish market share 2 Key investment highlights Why Poland? Why retail? Why EPP? Poland: growth engine of Europe Increasing investment and reducing supply driving cap rate compression Poland shopping centre supply and commercial investment volumes Poland retail real estate yield vs. broader yields New supply of shopping centre stock (000s sqm) Spread between retail yields and 0 year EUR bond yields (%) 6.5% Warsaw prime shopping centre 0Y Polish bond (EUR) EPP yield : 6.4% Average: 436,000 sqm 5.5% % 4.5% E 209E 2020E Structure of investment volumes 3.5% Current spread: 3.8% 5,000 00% 2.5% 4,000 80% 3,000 2,000 60% 40%.5%.2%,000 20% % 0.5% H 208 Warsaw Other Polish markets Other Polish market share Source: Company fillings, Savills, Bloomberg 3

15 Poland Czech Rep. Romania Hungary France US Finland Sweden Netherlands Ireland Portugal France Poland UK Spain Italy Slovakia Czech Rep. Germany Turkey Greece UK EU28 Germany Netherlands Italy 2 Key investment highlights Why Poland? Why retail? Why EPP? Poland: growth engine of Europe Favourable underlying retail dynamics Retail sales CAGR in Poland by city / EPP assets Overall Poland retail sales statistics Polish CAGR : 3.2% Polish CAGR : 3.% Retail sales growth and CAGR ( ) 45% 36% 27% 8% 9% 0% Retail sales Poland vs. Europe Zachodniopomorskie (2.3%/2.4%) Lubuskie (2.3%/2.8%) Dolnoslaskie (3.0%/3.4%) Poland CAGR : 3.% Pomorskie (2.9%/2.9%) Kujawsko-Pomorskie (2.2%/2.6%) Wielkopolskie (3.4%/3.5%) Opolskie (2.8%/ 2.8%) Lodzkie (3.2%/2.8%) Warminsko-Mazurskie (2.6%/2.7%) Mazowieckie (3.9%/3.4%) Swietokrzyskie (2.4%/2.8%) Slaskie (2.8% /2.8%) Malopolskie 3.5%/3.2%) Podlaskie (3.%/2.9%) Lubelskie (3.%/2.9%) Podkarpackie (2.9%/3.0%) 4.5% 3.6% 2.7%.8% 0.9% 0.0% European retail density landscape Existing shopping center stock (GLA in sqm per,000 inhabitants),250, Excludes high street retail, of which Poland has an insignificant amount representing <% WE Average: 260sqm per,000 inhabitants Key CEE economies Key WE economies Retail sales growth CAGR Source: Savills Western European countries include: Austria, Belgium. Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and UK 4

16 2 Key investment highlights Why Poland? Why retail? Why EPP? Poland: growth engine of Europe Online retail amplifying brick and mortar sales Online and offline retail sales ( bn) Unique take-away s Online sales in Poland remain a small proportion of overall sales and this is expected to remain small Online CAGR 8-20 Offline CAGR % 4.2% 7.8% 0.0% Majority of online sales are click and collect Performing brick and mortar sector despite Allegro, major player with >50% 2 of total Polish e-commerce market share Customer prefers to touch and feel, driving footfall E 209E 2020E Offline retail sales Online retail sales Ecommerce share in total retail sales 4.7%.8% 5.4%.6% Lack of high street driving consumers to shopping centres 84% of total online and offline growth from is in from bricks and mortar % 6.6% 7.% 8.9% 9.7% 0.2% 0.9%.4%.6% 8.5% 9.% 9.4% Traditional retail e-commerce Omni-channel (Click n Collect) Source: Company filings, Savills, Credit Suisse, Oxford Economics Represents annualised H7 Revenue number; 2 Tradewatch 5

17 2 Key investment highlights Why Poland? Why retail? Why EPP? 2 National retail champion Leading Polish retail portfolio, with modern asset base European retail real estate landscape GLA of retail assets in Poland (000s sqm) 2 No. of properties Modern and well-invested buildings Year of completion split by GLA (000s sqm) Undergone refurbishment / extension since M tranche assets,8 Additional GLA following the acquistion of M tranche II, III, and completion of Galeria Mlociny and Towarowa 22 Refurbishment usually carried out within 9-0 years from completion 9 >50% of stock under 0 years old Source: Company filings Includes tranche of M portfolio acquisition which closed in January Latest available data; 3 Taking 997 as year ; 4 28 assets as of 2020, which includes M portfolio Represents only property each, both recently acquired 6

18 2 Key investment highlights Why Poland? Why retail? Why EPP? 2 National retail champion Dominant regional centres becoming town squares in regional locations EPP retail assets 63% Large urban shopping centres Szczecin Lomza Inowroclaw Wloclawek Warsaw Kalisz Lodz EPP's largest assets with a GLA of >45,000 sqm Located in Poland's largest and most affluent cities; very close to the city centres Strong fashion offering complemented by food, entertainment and F&B. EPP in the process of improving and increasing the F&B and leisure component of all its assets. Jelenia Gora Klodzko Wroclaw Zabrze Belchatow Zamosc Kielce Czeladz Krakow Przemysl 37% EPP's smaller format with a GLA of <45,000 sqm Located in strong regional cities Dominant regional shopping centres Urban shopping centres Regional shopping centres Retail developments Critical mass enhanced by entertainment and F&B extension will further enhance this Very limited competition, usually limited to much smaller formats (e.g. hypermarkets or smaller retail parks) Source: Company filings x% of H 8 retail portfolio valuation 7

19 2 Key investment highlights Why Poland? Why retail? Why EPP? 2 National retail champion Category shopping centres represent 63% of retail GAV SZCZECIN Galaxy WROCŁAW Pasaz Grunwaldzki KIELCE Galeria Echo GAV (EURm) 282 GAV (EURm) 257 GAV (EURm) 225 GLA (m 2 ) 56,630 GLA (m 2 ) 48,352 GLA (m 2 ) 7,830 Key tenants Key tenants Key tenants KRAKOW M Kraków CZELADZ M Czeladź ZABRZE M Zabrze GAV (EURm) 30 GAV (EURm) 30 GAV (EURm) 82 GLA (m 2 ) 49,643 GLA (m 2 ) 53,648 GLA (m 2 ) 52,775 Key tenants Key tenants Key tenants Source: Company filings Note: Catergory shopping centres represent Large urban shopping centres 8

20 2 Key investment highlights Why Poland? Why retail? Why EPP? 2 National retail champion EPP has a high yielding portfolio compared to peers, on a risk adjusted basis Reported EPRA Net Initial Yield Comparison of 0 year bond yields of Poland vs other EU economies.2%.3%.%.5%.0% 0.6% 0.7%.2% 2.0% 0.8% 0.6%.5% 5.2% 2.8% 3.7% 5.2% 4.4% 4.2% 4.5% 3.6% 4.8% 3.9% 4.5% 5.6% Polish EUR 0 year bond 0Y German bond 0Y French bond 0Y Italian bond 0Y Spanish bond 6.4% 6.7% 6.8% 7.% 8.0% 7.0% 4.8% 5.4% 4.9% 5.2% 4.8% 4.7% 5.% 6.0% 5.0% 4.% 4.0% 3.0% 2.0% 2.0%.6%.0%.2% 0.8% 0.4% 0.0% Dec-08 Sep-09 Jun-0 Mar- Dec- Sep-2 Jun-3 Mar-4 Dec-4 Sep-5 Jun-6 Mar-7 Dec-7 x.x% Weighted average country risk premium x.x% Portfolio yield adjusted for country risk premium Source: Company filings, Savills 9

21 2 Key investment highlights Why Poland? Why retail? Why EPP? 3 Predictable cash flows Diversified tenant base geared towards growth Polish chain tenants Tenant mix Stability from Top strong 0 retail tenants 5 44% 5% Local tenants 5% International tenants No. Tenant name Description % share in total rental income Overall Sales growth y-o-y 2 Poland Sales growth y-o-y 2 Polish clothing company 8.% 8.0% 5.8% 2 French supermarket 5.3% Private Private 3 Swedish clothing brand 2.3% 3.0% 3.0% 4 One of largest footwear retailer 2.2% 8.3% n.m. 5 2 nd largest Polish multiplex chain 2.0% 20.9% 20.9% 6 Spanish multinational clothing co..9% 8.7% n.m. 7 British multinational supermarket.9% 2.8% 6.3% 8 Germany's 2 nd largest chemist.9% 7.% n.a. 9 All for kids store.6% 4.2% n.a. 0 Consumer electronics.5% Private Private Leading CEE retailers Sectoral breakdown of income Occupancy cost ratio on average (as reported) 6% Food Court, Restaurants & Cafe 3% Entertainment 3% Other 20% Fashion & Accessories 49% Once gastronomy and leisure units occupied approx. 5-7% of shopping space, now this ratio has increased to approximately to 0-5% with a few examples exceeding 20%. This ratio is expected to grow even further in the future 5.% 5.2% 3 2.2% Food / Supermarkets 4% Source: Company filings, Orbis Other includes Health and Beauty, Household appliances, Specialty Goods, Electronics and Services; 2 Latest available; 3 OCR defined as : (rental charges + service charges including marketing costs for tenants, all including VAT) / (tenants sales, including VAT); 4 The proportion of retailer s sales compared with the total cost of occupation being: rent, business rates, service charge and insurance. Calculated excluding anchor stores # LPP market cap c. EUR 3.4bn CCC market cap c. EUR.9bn; 5 As at Dec % Average: 2.4%.6% 4.3% 4 20

22 2 Key investment highlights Why Poland? Why retail? Why EPP? 3 Predictable cash flows Secured income stream Occupancy rate Security of income stream Occupancy (%) Retail Office Expenses covered by tenants +.0pp -.8pp Tax Insurance Maintenance Triple net lease Q4'6 Q'7 Q2'7 Q3'7 Q4'7 Q'8 Q2'8 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 Q'8 Q2'8 Lease expiry profile 2 EUR contracts with tenants are matched with predominantly EUR-denominated debt payments By rental income (EURm) WAULT Retail: 5.4 years,3 Office: 4.2 years,3 Interest EUR Rent EUR Primarily CPI-indexed contracts (almost 00%) >2026 Source: Company filings By total GLA; 2 As of FY 207; 3 Based on weighted average lease term 2

23 2 Key investment highlights Why Poland? Why retail? Why EPP? 4 Platform for organic growth Rental growth supported by macro factors and asset management Drivers of organic growth A Actively improve tenant mix B Market backdrop C CPI indexing Economies of scale with most tenants operating in the Polish market Fully integrated in-house and local asset management platform Uniquely live dashboard EPP university Supportive macro market backdrop resulting in overall GDP growth and resulting rise in disposable income, with consumer spending growing at a CAGR of 5.7% from Emerging middle class with higher purchasing power CPI-indexing which is part of almost all lease contracts average inflation rate of 2.3% Last reported LFL NRI growth (%) 4.3% 4.% 4.% 3.8% 3.2% 3.0% 2.9%.5%.4%.% (0.6%) Source: Company filings, Company information, Trading economics Impacted from departure of larger tenants in Belgium, free-parking initiatives and banks restructuring 22

24 OCR RTS Sales density (EUR/sqm/p.a.) 2 Key investment highlights Why Poland? Why retail? Why EPP? 4 Platform for organic growth EPP University: a dedicated team to support tenants, with >2,500 retail staff trained EPP University overview Goal to support tenants in daily operations Tenants KPIs before and after EPP University training Specialist store Jewellery store Team of highly trained professionals 50.2% 52.4% 2,04 3,887 5,925 Provides professional training to tenant s staff on most important performance factors 805 Units work shop with tenant staff Before After Before After >2,500 retail staff trained Key individual has >8 years of tailored experience 27.2% -6.3pp 0.9% 20.% -7.2pp 2.9% Key focus areas of EPP University 2 3 Before After Before After Help tenants improve performance, leading to rental growth Attracting smaller tenants with rents higher than larger tenants Identify potential problems early and prevent long-term voids 42.2% -23.3pp 8.9% 24.8% -7.9pp 6.9% Before After Before After Source: Company filings xx Growth 23

25 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 Secured pipeline A External acquisitions B Developments C GLA extensions Apart contracted M tranches II and III (252,000 sqm), EPP acquired King Cross Marcelin (45,000 sqm) located in Poznan Excellent access to additional opportunities to further increase the scale of its portfolio in Poland Actively engaged in recycling of assets (office and retail) 2 projects under development with a GLA of 87,000 sqm (Mlociny c.82,000 sqm, Towarowa 22 05,000 sqm) with an additional 45,000 sqm for mixed use (from Towarowa), both located in Warsaw Attractively situated in Warsaw Galeria Mlociny to open in April 209 Further upside from Towarowa 22, the largest urban retail project in Poland and one of the largest in Eastern Europe Right of first offer to acquire retail and office properties of Echo Investments Extensions of 2 best-performing retail assets, Galaxy and Outlet Park, both of which opened in H2 207 Full NOI impact yet to be reflected 3 assets have been identified for potential future extension and this represents additional GLA in of 60,000 sqm Kings Cross Marcelin Towarowa 22 External acquisitions Galeria Belchatow (Olimpia) Source: Company filings 24

26 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 A Secured pipeline: Acquisitions M transaction rationale M Transaction summary Assets highlights GAV: EUR692 million Others 9.2% Krakow 8.2% Location Sites in large catchment areas, generally situated along the motorway at major junctions (land base >200 ha) Sustainable NOI: EUR49 million 3 million people live within a 30-min drive 20 million annual footfall combined Kielce 5.% Czestochowa 7.4% Radom 8.4% Zabrze 0.9% GAV: EUR692mm GLA 446k sqm Poznan 2.9% Czeladz 7.8% Tenants Strong tenant-mix including top brands: Auchan, OBI, MediaMarkt, TK Maxx, H&M, C&A Bespoke shopping centres Food and DIY anchored with top international brands providing the greatest retail offer and best prices Additional value potential Active asset management Utilise existing relationships with tenants to grow NOI Increase the F&B and entertainment offerings Right-size retail units Boost the short-term leases income 00,000 GLA identified Extensions Source: Company filings 25

27 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 B Secured pipeline: Developments Mlociny: Flagship Warsaw development on track to open in Q2 209 Galeria Mlociny overview KPI s Key tenants Development located in the North-West part of Warsaw, located next to a rapidly growing residential area Mlociny Planned total GLA Est. cost of development 2 82,22 sqm EUR300m.5 million people within 30 minutes drive Opening planned for Q2 209 with construction ahead of schedule Largest retail construction site in Poland; 87% of GLA already leased Est. fully-let NOI EUR22m Est. yield on cost c. 7.0% Est. valuation yield on completion Est. value on completion c. 5.35% EUR 42m Warsaw Strong purchasing power Affluent consumers Relatively less saturated RE market Asset snapshot Brief timeline Q3 206 Start of construction of Galeria Mlociny March 209 Completion of Galeria Mlociny Q2 209 Opening of Galeria Mlociny Q2 209 Q3 206 March 209 Source: Company filings 70% owned by EPP, 30% by Echo Investment 2 Fair value reflects 54% of the value of the land plot 26

28 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 B Secured pipeline: Developments Towarowa: First of its Kind shopping destination Towarowa overview KPI s Last large retail development (6.5 hectares) in Warsaw and the last to be built near the city-centre, next to the metro line Planned total retail GLA Est. cost of development 05,000 sqm EUR420m Undergoing zoning process scheduled for 209 Est. fully-let NOI EUR34m Planned start of construction 202/2022 Strong interest from all main anchor tenants Contained in the current zoning: 05,000 sqm GLA designated for Retail with an additional potential identified 45,000 sqm GLA expected for offices, Residential for rent or sale, entertainment and cultural, student housing and hotel Est. yield on cost c. 8% Est. valuation yield on completion c. 5% Est. value of retail space EUR680m Est. value of additional space EUR50m TOTAL EUR830m Warsaw Strong purchasing power Affluent consumers Relatively less saturated RE market Asset snapshot Brief timeline 209 Zoning process for Towarowa /2022 Start of construction of Towarowa /2025 Planned opening of Towarowa 22 Source: Company filings Land included; 27

29 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 C Secured pipeline: GLA extensions Track record of successful extensions at attractive development yields of c.8.5% Case study: Galaxy extension (completed 5 November 207) Case study: Outlet Park extension (completed September 207) IPO ATTRIBUTED TO EXTENSION DEC -7 IPO ATTRIBUTED TO EXTENSION DEC -7 GLA +5,50 sqm 4,477 56,627 GLA +7,229 sqm 2,054 28,283 NOI +EUR3.m NOI +EUR.m GAV +EUR53m GAV +EUR7m New tenants New tenants Source: Company filings 28

30 2 Key investment highlights Why Poland? Why retail? Why EPP? 5 Secured pipeline: Contractual growth pipeline in retail Pro-forma impact of the committed M portfolio acquisition, Marcelin acquisition and Mlociny development completion 207YE Tranche I + Marcelin July Tranche II + Mlociny 3 June 209 Tranche III June 2020 Retail properties Retail GLA (000) ,000 sqm extensions identified Retail portfolio value ( m), , , ,480 Office 24% Office 7% Office 3% Office 2% GLA split Retail 76% Retail 83% Retail 87% Retail 88% Retail NOI ( m) Selected tenants Source: EPP Pro-forma as of FY 207 values assuming full let NOI with no indexation, no retail / office acquisitions or disposals other than M portfolio, Marcelin acquisition, value dislosed to market, and Mlociny development completion 2) Assumes disclosed value or retail portfolio as at H 208 and Marcelin value 3) Mlociny assumes 70% stake 29

31 2 Key investment highlights Why Poland? Why retail? Why EPP? 6 Active balance sheet management Consistently decreasing leverage since IPO Debt levels Financial management guidelines Reported LTV (%) 56.4% 55.4% -5.5 p.p since IPO Average cost of debt: 2.38% 47.4% 50.9% 45.0% Liquidity and working capital management Maintain a balance between continuity of funding and flexibility through the use of proceeds from disposal of assets, bank deposits and corporate loans, monitoring the available cash position on a daily basis Hedging Target to hedge 90% of interest rate exposure; currency of rental income matching the currency of EPP funding At IPO FY6 FY7 H8 Medium-term target Credit risk Require tenants to pay rentals in advance and present security of the liabilities resulting from lease agreements, bad debts ratio <% (EURm) Maturity dates Average maturity: 4.3 years 672 Operational costs Robust approval system and periodic monitoring of costs versus the budget on a monthly (at properties and HQ level) and quarterly (overall for EPP) basis 425 Leverage Medium term target LTV of 45% >2022 Dividend policy Intention to distribute 00% of distributable earnings to the shareholders Source: Company filings, S&P, Moody s 30

32 2 Key investment highlights Why Poland? Why retail? Why EPP? 6 Active balance sheet management EPP has historically disposed assets at / above NAV Disposals strategy Tranche sold in October 207 Disposed of A4 Business Park, Tryton Business House and West Gate for EUR60m in December 207, at a yield c. low 7% A4 Business Park Katowice GLA: 29,900 sqm Tryton Business House Gdansk GLA: 23,537 sqm West Gate Wroclaw GLA: 6,532 sqm Properties disposed contributed positively to the company s NAV Tranche being currently for sale In the process of sale of O3 Business Park, Malta and Symetris Business Park Malta Office Park Poznan GLA: 28,270 sqm Symetris (I & II) Lodz GLA: 9,000 sqm O3 Business Park (I, II, III) Krakow GLA: 56,926 sqm Starting the process of selling the noncore retail assets Source: Company filings FV figure of the three announced properties to dispose as per H8 3

33 Section 3 Financial overview

34 3 4 Financial overview Key historical financial highlights Historic development of key metrics NOI (EURm) FY'6 FY'7 H'8 Increase in net operating income Driven by acquisitions, property extensions completion and effective asset and property management initiatives (LFL) EBITDA (EURm) Cost stabilisation FY'6 FY'7 H'8 Distributable earnings (EURm) 34 Distribution per share (EUR cents) IPO guidance FY'7 H'8 Dividend yield (%) FY'6 FY'7 H'8 8.9% 8.8% 8.7% 7.7% 7.5% 6.8% 6.4% 6.3% 5.2% Cost stabilisation is expected in the future, despite a one-off charge in 207 as the company completed the integration of its own asset management and property management team Distributable earnings NOI increases and cost stabilisation has resulted in substantial distributable earning growth of 26% for 207 DPS guidance achieved despite the changes in the taxes in Poland Distribution per share On track to achieve full year guidance of (EUR.6-.8 cents), representing growth of 7.6% on 207. EPP s forward looking dividend yield would be 8.9%, based on the EUR.7 cents mid-point of management guidance Source: EPP, FactSet as of November 7, 208 LTM dividend on closing price of November 7, 208 (ZAR 2.05) 33

35 3 4 Financial overview Evolution of key metrics over time Balance sheet (EURm) 206A 207A 208H Investment property,359,656 2,067 Investment in joint ventures Financial assets Other assets Portfolio evolution Significant increase in investment property and joint ventures due to acquisitions of 5 retail properties in 207 Tranche of the M portfolio was acquired in the first half of 208, tranche 2 and 3 are expected to be acquired in June 209 and June 2020 NAV has increased by c.30% since listing from.04 to.37 euro cents per share mainly due to positive asset revaluation driven by strong NOI growth Cash Total assets,509,952 2,320 Equity Borrowings ,90 Deferred tax liability Leverage management The LTV ratio decreased from 52.7% in 206 to 47.4% in 207. The reduction was driven by positive asset revaluation, partial utilisation of proceeds of asset sales and debt amortisation The medium term target net LTV ratio is 45% Trade & other liabilities Total equity and liabilities,509,952 2,320 Source: Company filings 34

36 3 4 Financial overview Key takeaways Why Poland? Polish GDP growth CAGR 8-20 of 3.2% vs.7% in Western Europe 3 Stable economy with a well capitalised financial system Developed market status Why retail? Consumer spending growth CAGR 8-20: 5.7% Offline sales growth of 4.2% in the next 3 years Exposure to 38m population, a place for immediate scale for new retailers Largest Polish retail Platform with an existing and contracted pipeline of.m sqm Retail occupancy: 99.4% Why EPP? 9% 4 div. yield Historical LFL NRI growth: 4.% EUR333m contracted acquisition pipeline & c.eur.bn development pipeline 2 Source: Company filings, Oxford Economics As of H 8 report; 2 Represents estimated value at completion; 3 Western Europe (EU5) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK; 4 Div. yield calculated as mid-point of management guidance DPS 8E of.70 cents / Share price of EUR.3 as of November 7, 208; 5 As of 2020 and including M portfolio 35

37 Section 4 Appendix

38 4 Appendix Proven track record Proven track record of delivery and leasing while achieving strong value creation Value of EPP's portfolio (EURm) Fully-let annual NOI (EURm),205,208,359, ,04 5,623, ,203,27,347 Occupancy (%) Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Q3 207 Q4 207 Standing GLA (000s sqm) Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Q3 207 Q4 207 Number of investments Disposal of A4 Business Park, West Gate and Tryton Business Park Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Q3 207 Q4 207 Source: Company filings Defined as investment property value 2 Based on total GLA 3 Galeria Olimpia and Centrum Echo Belchatow treated as one project 4 Acquisition of A4 Business Park III; treated as one project together with A4 Business Park I/II 5 Pro forma for M tranche I acquisition completed in January 208 Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Q3 207 Q4 207 Retail M tranche I (retail) Office 37

39 4 Appendix Loyal customer base, growing with EPP LPP in Galeria Echo CCC in Galeria Echo Market cap of c. EUR 3.6bn Est. 995 One of largest Polish retailers listed at WSE 2002: First LPP store opened : Stores with new brands introduced: Mohito and Sinsay 20: Reserved store (787 sqm) extension in a new, two-level format : House store extension in the latest format opened; further extension of Reserved store already planned 208 Market cap of c. EUR.9bn Est. 999 One of largest Polish retailers listed at WSE 2002: First CCC store opened : Extension of the store in a new format : Further extension of the store : Planned opening of the latest concept store 208 GLA evolution (sqm) 3,000,430,430,430, Source: Company filings, FactSet 38

40 Retail team Office team Property Management 4 Appendix Fully integrated in-house platform Key highlights EPP Asset Management and Property Management capabilities Total Retail GLA c. 684 k sqm,545 retail units >50 employees Facility Management Team Marketing Management Budgeting Echo Investment EPP Reporting & Property Management University Analysis Team Integration Team Retail Leasing Team Office Leasing Team 207 Europa Property Awards Core+/Value Add Investor Select awards CIJ Awards Best Asset Management Co. Echo Property Investment Property Managers Management Shopping Mall Directors Lease Administration Managers Marketing Echo Investment Technical Managers Property Management Managers Retail 9 projects 684k sqm 2 Construction and Development Team Architecture Team Legal Department AM Eurobuild Awards Property Management Co. Financial & Accounting Managers Financial and Accounting Department Source: Company filings, press releases As of July 208; 2 Retail GLA of 684,000 sqm (including Marcelin) 39

41 Key tenants Perform. Portfolio 4 Appendix High quality assets in dominant catchment areas Geographic footprint of M portfolio Key operational statistics of M portfolio Tranche Tranche 2 Tranche 3 PP Olsztyn Number of properties GAV (EURmm) GLA (000s sqm) M Poznan NOI (EURmm) M Czestochowa PP Opole M Zabrze M Lodz M Radom PP Kielce M Czeladz Acquisition yield (%) 7.0% 7.3% To be acquired 6.9% GLA ( ooo sqm) Footfall (million) M Bytom M Tychy M Krakow Tranche Tranche 2 Tranche 3 Source: Company filings Acquisition yield excluding transaction costs; 6.8% for the total portfolio including transaction costs 2 Represents M Poznan only 40

42 4 Appendix Sunday trading has had a marginal impact on EPP shopping centres Strong performance of current retailers i.e. LPP, CCC, etc. Average footfall change (%) Mar-Jun 207 Mar-Jun 208 In weeks with non-trading Sundays demand transfers to other days of the week. Positive LFLs in Poland show that LPP deals well with the ban on trade on selected Sundays. 80% of LFL stores recorded higher YoY revenues in 2Q8. LPP market cap of c. EUR 3.6bn, Q2 8 Investor Presentation +2% +3% +7% +4% +8% +2% 2 Consumer shift to other days in the week Saturdays up to 2% increase Mondays up to 2% increase (48%) Fridays up to 8% increase 3 Already existing in many other European countries Already in place in Germany, Belgium, Holland, France, Austria, Greece and others Mon Tue Wed Thu Fri Sat Sun Source: Company information, FactSet 4

43 4 Appendix Experienced Board of Directors Executing clearly-defined purposes Comprising of experienced professionals EPP has a one-tier board structure, with non-executive directors who supervise the executive directors The purpose of the Board of Directors is to: set the strategic objectives of EPP and determine the company s investment and performance criteria Status Member Nationality Executive Directors Hadley Dean (CEO) Jacek Bagiński (CFO) British Polish Experience in real estate 20 years 20 years take responsibility for the company s sustainability, proper management, control and compliance, and the ethical behaviour of the businesses The Executive Directors are in charge of the day-to-day management of EPP The Non-Executive Directors are entrusted with the supervision of the performance of the tasks by the Members of the Board the Non-Executive Directors are individuals of calibre, credibility and have the necessary skills and experience to provide judgement that is independent of Management The board has established specific committees (audit and risk committee, investment committee, nomination and remuneration committee) to give detailed attention to certain of its responsibilities Independent Non- Executive Directors Non- Executive Directors Robert Weisz (chairman) Marek Belka Dionne Ellerine Andrea Philippa Steer Peter Driessen Marc Wainer Maciej Dyjas Andrew König Nebil Senman Dutch Polish S. African S. African / Irish Dutch S. African German S. African German / Turkish 36 years 0 years 40 years 40 years 25 years 22 years 20 years Board meetings are held at least quarterly, with additional meetings convened when circumstances necessitate Source: Company filings 42