ENCORE+ DIVERSIFIED AND BALANCED CORE+ PROPERTY FUND Q1 2017. This document is for professional clients and institutional/qualified investors only. It is not to be distributed to or relied on by retail clients.
WHY ENCORE+ Successful Partnership Strong Performance 1 Core-plus specialists Consistently outperforming fund in IPD PEPFI Index 2 1 Past performance is not a guide to future returns. The value of an investment in the fund can go down as well as up and the investor may not get back the original amount invested. 2 Encore+ consistently belonged to the three best-performing funds by total return (on three year rolling basis) in the Pan European Property Funds Balanced Funds Index (PEPFI) over last three years as at 31 December 2015. Past performance is net of fees. 2
FUND STRATEGY Objective A diversified, Continental European real estate fund which aims to deliver stable and growing income alongside long-term capital appreciation. The portfolio is actively-managed in a monthly dealt open-ended fund structure. Top-down and bottom-up approach Top-down Seeking to identify outperforming markets and sectors on a risk-adjusted basis Bottom-up Select properties with long-term attraction for occupiers 3
TWO STRONG PARTNERS Fund manager Asset manager Strong Expertise in governance and oversight, and managing European openended funds Established track record of acquisitions and asset management performance in Continental Europe 4
BALANCED, DIVERSIFIED AND STABLE PORTFOLIO 1,328m GAV ( 1,059m NAV) 23 Assets (45 properties) 325+ Tenants diversified across eight countries 98% Occupancy rate Portfolio Characteristics 1. CORE-PLUS 2. DIVERSIFIED 3. ROBUST FUNDAMENTALS 14% Loan to GAV 5.0% Net income return Aviva Investors as at 31 March 2017. 5
GEOGRAPHIC DIVERSIFICATION NETHERLANDS 2 Assets Value 106m Sectors: Office / Logistics GERMANY 5 Assets Value 250m Sectors: Office / Retail / Logistics SWEDEN 1 Asset Value 47m Sectors: Retail POLAND 1 Asset Value 28m Sectors: Retail FRANCE 8 Assets Value 326m Sectors: Office / Retail/ Logistic CZECH REPUBLIC 1 Asset Value 82m Sectors: Office SPAIN 3 Assets Value 159m Sectors: Office / Retail LUXEMBOURG 1 Asset Value 117m Sectors: Office Aviva Investors, LaSalle Investment Management as at 31 March 2017. 6
GEOGRAPHIC AND SECTOR BREAKDOWN VARIATION FROM Q4 2016 TO Q1 2017 Geographical Distribution (% of GAV) Sector Distribution (% of Direct RE) 40% 60% 50% 30% 40% 20% 30% 20% 10% 10% 0% FR DE SE NL ES PL CZ LX Q4 2016 10-30% Q1 2017 Limit 0% Office Retail Logistics Q4 2016 Q1 2017 Min Max Aviva Investors, LaSalle Investment Management as at 31 March 2017. Please note that there are no formal restrictions on the Fund s sector allocation. 7
STRONG PERFORMANCE WITH STABLE INCOME Annualised Fund performance Q1 2017 10% 9% 9.2% 8% 7% 7.2% 7.6% 8.5%* Return % (annualised) 6% 5% 4% 3% 2% 4.9% 4.8% 4.9% 6.5%* 1% 0% 1 year 3 year (ann) 5 year (ann) Encore+ income return Encore+ capital return Strong performance with consistent income return Note: Past Performance is not a guide to future returns. Aviva Investors as at 31 March 2017. All returns and income are net of property tax, expenses and fees to the manager. The Encore+ is a Euro-denominated fund. *Time weighted return target: 6.5% - 8.5% p.a. over a rolling 3 year period and a distribution target of 5% p.a. 8
OUTPERFORMING OUR PEERS IPD PEPFI performance comparison Q4 2016 10.0% 9.6% 9.0% 8.0% 7.5% 7.8% 7.0% 6.7% Return % (annualised) 6.0% 5.0% 4.0% 3.0% 2.0% 5.7% 4.3% IPD European Property Investment Award for best performing balanced fund in the Pan-European market 1.0% 0.0% 1 year 3 years 5 years Encore+ (Fund level) IPD PEPFI (Fund level) Note: Past Performance is not a guide to future returns. MSCI 2016. Based on IPD return methodology as at 31 December 2016. There is a time lag for Q1 2017 IPD PEPFI performance. All returns and income are net of property tax, expenses and fees to the manager. Encore+ is a Euro-denominated fund. The IPD Balanced pan-european Balanced Fund Index (IPD PEPFI managed by MSCI) is as a reference point for the Fund s performance. Encore+ has outperformed the IPD PEPFI since joining the index. Past performance is net of fees. 9
ACQUISITION ACTIVITY FM Logistics El Tormes Date January 2017 March 2017 Sector/Location Logistics, Fontenay region, France Retail, Salamanca, Spain Purchase Price 38.4m 69.5m Net Initial Yield 7.8% 6.04% Size (sq.m.) 70,800 22,890 WALT 8 years 7.3 years Debt 40% after 9 months 40% after 6 months Forecast IRR 6.7% 6.25% Investment Rationale Acquisition of a logistics warehouse in a strong location 50km south east of Paris. Well leased and capable of being multi-let. Dominant shopping centre located in an accessible area of Salamanca, Spain. Currently 94% let with a strong tenant mix and growing footfall. Opportunity to increase value and rental income through cap-ex investment and tenant repositioning. Aviva Investors, LaSalle Investment Management as at 31 March 2017. Forecast returns are leveraged, post fees and taxes. 10
ACTIVE ASSET MANAGEMENT Goals Successful leasing Healthier income Capital expenditure investments Improved assets Sustainability improvements Stronger returns Year to Q1 2017 Increased income +50.3% (+3.2% like for like) 2m~ Cap-ex investments increasing value Market facing bespoke Asset Management strategies Stable 98% occupancy 11% income recycled 325+ tenants WALT 6.9 years (3.8 years incl. breaks) 65 Leasing events LaSalle Investment Management as at 31 March 2017. 11
UNLOCKING VALUE: EUROCENTER II DIVERSIFIED INCOME IN URBAN LOCATION Results in 2016 Successful acquisition: May 2016: Property NPP: 41.0m External valuation: 51.9m 85% let at acquisition: almost fully let (98%) Prolonging income Re-branding in progress Next steps: 2017 Re-branding project and new lobby to complete Amsterdam Zuid Last premises to let (312 sqm) Achieve BREEAM status Coffee bar operator Schiphol Airport Hold asset for medium/long term Benefit from income and capital appreciation LaSalle Investment Management as at 31 March 2017. 12
LIQUIDITY MANAGEMENT EXPERIENCE Liquidity buffer 10% cash target provides the fund liquidity (of which 5% may be allocated to securities) Monthly dealing Providing liquidity to investors without compromising the integrity of the portfolio Secondary Platform Matched bargain service enhancing unit-holder liquidity c.285 million units traded via matched bargains since inception Aviva Investors as at 31 March 2017. 13
KEY FUND FACTS Key fund facts Objective To invest in a diversified portfolio particularly focused on income and also seeking long-term capital appreciation through real estate investments in the European Economic Area (excluding the UK) and Switzerland. Legal structure Open-ended Luxembourg FCP Return target 1 Net time-weighted return range of 6.5% to 8.5% p.a. calculated over a rolling three-year periods Distribution target 1 Net 5.0% per year Style Core plus Currency Euro ( ) Leverage Minimum investment Fees Pricing Dealing Distributions Redemptions Target 30% of GAV; Max 40% of GAV 1m initial; 100k thereafter Stepped Management Fees on NAV (based on total invested capital) 25m or less: 105 bps 25m to 50m: 95 bps 50m or more: 85 bps Acquisition fee 0.5% of the purchase price of each property acquired by the Fund. Monthly Monthly Quarterly Monthly (may be subject to redemption discount of 2% and exit levy based on holding period) Launch 15 June 2006 1 The target return is not guaranteed. 19
IMPORTANT INFORMATION As at the date of this document, the Fund has been notified, registered or approved (as the case may be and howsoever described) in accordance with the local law/regulations implementing the Alternative Investment Fund Managers Directive (Directive (2011/61/EU)) (the AIFMD ) for marketing to professional investors into the following member state(s) of the EEA (each a Member State ): Austria, Belgium, Cyprus, Denmark, Finland, Germany, Ireland, Italy, Malta, Netherlands, Luxembourg, the UK, Poland, Portugal, Spain, France, Sweden, Switzerland & Norway. In relation to other Member States, this document may only be distributed and shares in the fund may only be offered or placed in a Member State: (i) at the investor s own initiative; or (ii) to the extent that this document may otherwise be lawfully distributed and the shares may lawfully be offered or placed in that Member State. In addition, the following restrictions apply to the distribution of this document in the following Member States: In Ireland the distribution of this document and the offering or purchase of units in the Fund is restricted to the individual to whom it is addressed. Accordingly, it may not be reproduced in whole or in part, nor may its contents be distributed in writing or orally to any third party and it may be read solely by the person to whom it is addressed and his/her professional advisers. Units in the Fund will not be offered or sold by any person: (a) otherwise than in conformity with the provisions of the European Communities (Markets in Financial Instruments) Regulations 2007, as amended; or (b) in any way which would require the publication of a prospectus under the Investment Funds, Companies and Miscellaneous Provisions Act, 2005, as amended, and any regulations adopted pursuant thereto; or (c) in Ireland except in all circumstances that will result in compliance with all applicable laws and regulations in Ireland. While this AIF has been approved to market its units to the public in Ireland by the Central Bank, the scheme is not supervised or authorised in Ireland. It is incorporate in Luxembourg and is supervised by the CSSF. In Germany units of the Fund may in particular not be distributed or marketed in any way to German retail or semi professional investors if the Fund is not admitted for distribution to these investor categories by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). In Switzerland the distribution of shares in the Fund will be exclusively made to, and directed at, qualified investors (the "Qualified Investors"), as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended ("CISA") and its implementing ordinance. Accordingly, the Funds have not been and will not be registered with the Swiss Financial Market Supervisory Authority ("FINMA"). Offering materials relating to the units may be made available in Switzerland solely to Qualified Investors. The representative and paying agent in Switzerland is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich, Switzerland. The prospectus, the articles of incorporation as well as the annual and semi-annual reports may be obtained free of charge from the representative in Switzerland. In France shares in the Fund may only be lawfully offered or placed in the Republic of France: i. if the Fund is permitted to be marketed to Professional Investors or ii. to the extent that this document may otherwise be lawfully distributed. Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited ("Aviva Investors") as at 31 March 2017. Unless stated otherwise any opinions and future returns expressed are those of Aviva Investors and based on Aviva Investors and LaSalle Investment management internal forecasts. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Past performance is not a guide to future returns. 15
IMPORTANT INFORMATION (CONTINUED) The content of this document does not purport to be representational or provide warranties above and beyond those contained in the prospectus and subscription documentation of the fund. The prospectus and the subscription document contain the full terms & conditions in respect of the fund. This document is not a recommendation to sell or purchase any investment to any person in any jurisdiction where it would be unlawful to make such an offer or solicitation. Where funds are invested in real estate, you may not be able to switch or cash in your investment when you want because real estate in the fund may not always be readily saleable. If this is the case we may defer your request to switch or cash in your units. You should also bear in mind that the valuation of real estate is generally a matter of valuers opinion rather than fact. Encore+ (the Fund") is a Euro-denominated, Luxembourg fonds commun de placement (FCP) established pursuant to Part II of the Luxembourg law of 17 December 2010 relating to undertakings for collective investment, as may be amended from time to time. Accordingly, units in Encore+ are reserved to Institutional Investors and Well-Informed Investors who are aware of the risks attaching to an investment in a Fund investing in direct or indirect interests in real estate. The Fund has no separate legal personality and qualifies as an Alternative Investment Fund ( AIF ) for the purposes of AIFMD. The Management Company of the Fund is Aviva Investors Luxembourg S.A. The Management Company has also been authorised as the Alternative Investment Fund Manager ( AIFM ) of the Fund by the CSSF and acts in its capacity as the AIFM of the Fund since 18 August 2014. Aviva Investors Global Services Limited has been appointed by the Management Company as the Fund Manager of the Fund. The Fund Manager has appointed LaSalle Investment Management as the Asset Manager to the Fund. LaSalle Investment Management is also the Property Manager and Advisor. Issued by Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: St. Helen s, 1 Undershaft, London, EC3P 3DQ. Authorised and regulated by the Financial Conduct Authority registration number 119178. Contact us at Aviva Investors Global Services Limited, St. Helen s, 1 Undershaft, London, EC3P 3DQ. LaSalle Investment Management is authorised and regulated by the Financial Conduct Authority registration number 179466. RA17/0587/31082017 16