Gateway Real Estate AG - Company Presentation March 2019 - www.gateway-re.de
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Gateway Real Estate AG
Company Presentation
March 2019
www.gateway-re.de
Disclaimer
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.
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This presentation has been prepared by Gateway Real Estate AG (the “Company”) and is for information purposes only. It may not be reproduced, distributed, transmitted or
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does not purport to be, nor is it intended to be, comprehensive. No person may rely on the information contained in this presentation or any other material discussed at the
presentation, or on its completeness, accuracy or fairness.
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opinions expressed in this presentation or the actual occurrence of the forecasted developments. The statements in this presentation are made only as of the date of this
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business.
2
Gateway is a leading diversified property developer in Germany
~€3.7bn (1)
GDV
+
25%
Target average EBITDA
margin on project level(4)
~€1.0bn (2)
GDV acquisition pipeline
(3) current
>800,000
(5)
sqm GLA
63% / 37%
residential / commercial
(5)(6)
~50% / 50%
~4% residential / commercial
targeted dividend yield after closing of acquisition
pipeline
(1) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already under construction or in application process for building permit. Disposal of
projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (2) Acquisition pipeline in advanced stages of negotiation. Amount reflects 100% of
GDV; planned fully consolidated accounting. (3) Includes projects held “at equity” and assumes completion of projects. (4) Before overhead costs of €10-12m per annum. (5) Includes 3
projects held “at equity” and assumes completion of projects. (6) Refer to page 9 for the exact share.
Highlights
Active in highly attractive German residential
and commercial development markets
Sizeable €3.7bn(1) GDV project portfolio leading
to accelerated growth. Additional ~€1bn GDV
acquisition pipeline(2)
Targeting average mid-term 25% EBITDA
margin(3) across development projects, leading
to attractive cash flow profile and ROE
Note: Figures as per January 2019. (1) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already under construction or in application process
for building permit. Disposal of projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (2) Acquisition pipeline in advanced stages of 4
negotiation. Amount reflects 100% of GDV; planned fully consolidated accounting. (3) Target average EBITDA margin in development business across projects.
Diversified development project portfolio
Nationwide project locations(1) GDV breakdown assuming closing of acquisition pipeline(2)
(5)
€4.7bn
(4)
€3.7bn
51%
37%
JV share
Hamburg
63% 49%
Braunschweig
Berlin Current Post assumed acquisition closing
Gottingen Halle Commercial Residential
Dusseldorf
Dresden
Leipzig
Cologne
Erfurt Current breakdown by region(2)
Chemnitz
Frankfurt
GDV breakdown excluding acquisition pipeline (€3.7bn, inner ring)
Wiesbaden
and including pipeline (€4.7bn, outer ring) Munich region
Trier
Frankfurt / Rhine-main region
Nuremberg
Mannheim
Berlin region
Stuttgart region
Stuttgart
Cologne region
GDV
Munich
€3.7bn(4) Dusseldorf region
Leipzig region
Commercial Residential Dresden region
Other(3)
Note: Data as per February 2019. 13% of GDV currently under construction, while 31% and 55% have obtained zoning and currently apply for zoning, respectively. (1) Includes acquisition pipeline projects. (2)
Based on GDV. (3) Other includes projects in Hamburg, Nuremberg, Göttingen, Trier and Braunschweig. (4) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already
under construction or in application process for building permit. Disposal of projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (5) Composed of current portfolio of 5
€3.7bn and the acquisition pipeline of c.€1bn.
Gateway develops sought-after high quality products
Commercial
Office properties predominantly in Top 7 cities(1)
Mixed-use projects in high street locations of mid-sized cities
Modern architecture and flexible usage format
Cologne, Cubus Süd Dusseldorf, Kennedydamm Hamburg, Barmbeker Bahnhof
12,828 sqm 34,872 sqm 24,307 sqm
(completed) (ongoing) (ongoing)
Berlin, Michaelkirchstrasse Nuremberg, Breite Gasse Dusseldorf, Uerdinger Strasse
17,250 sqm 26,014 sqm 7,585 sqm
(ongoing) (ongoing) (ongoing)
6
(1) Top 7 cities are Berlin, Frankfurt, Cologne, Dusseldorf, Hamburg, Munich and Stuttgart.
Gateway develops sought-after high quality products
Residential
Focus on cities with >100,000 inhabitants
New-built multifamily mid-rise buildings
Modern living
Expertise in developing mixed-use properties and sites
Frankfurt, Taunustrasse Berlin, Pankow Munich, Jugendstilpark
6,438 sqm 99,360 sqm 23,505 sqm
(ongoing) (ongoing) (ongoing)
Mannheim, Soho Erfurt, Steigerwald Dresden, Hansastrasse
84,194 qm 27,770 sqm 20,000 sqm
(ongoing) (ongoing) (ongoing)
7
Lean operating set-up while orchestrating all steps in the value chain
Sourcing / Marketing & Asset & Property
Development Construction
Acquisition Sales Management
Total of 60 FTEs(1)
Market intelligence Cost estimation and Letting Strict controlling of Value creation through
budget control costs and timeline active asset
through dedicated management
Business plan and Cash flow project manager
due diligence Managing of optimisation and risk
architects, engineers reduction through Renegotiation and
and interior designers forward sales to Typically package and successful renewals of
Acquisition of land institutional investors single contracting anchor tenant leases
Approvals, licenses
and permits and Advertising and
accounting communication
B2B sales
8
(1) As per 31 Dec 2018 Gateway employs 53 FTEs, the short-term goal is to increase this number to 60 FTEs.
Gateway has attractive project-level margins
Median EBITDA margin(1) of past projects sold EBITDA margins(1) of projects under construction
>50%
Median:
>31%
>31%
Mid-term
target: 25%
>22%
2016A 2017A 2018A Project 1 Our Project
projects3 currently under
Project 5 construction
Project 7 Project 9
Note: Includes projects executed by Development Partner AG, which became part of Gateway in October 2018, as well as projects executed in the joint venture with Immvest Wolf.
(1) Before targeted overhead costs of c.€10-12m per annum. Past project margins include interest expenses, leading to actual EBITDA margins being higher than those shown in the 9
chart.
Accelerated future growth based on existing portfolio
~750
~440
(1)
~350
(1) ~200
~180
~120
2019E 2020E mid-term target
Total revenue(2) of Gateway (excluding JVs) Total pro rata revenue(2) of joint ventures
Note: All financial figures in €m.
Mid-term target metrics: Leverage of max. 3.0x net debt to EBITDA. Financial costs c.2.5% of gross debt for fully consolidated projects and c.6% of revenue for joint ventures. Tax
rate approximately 15%. Minorities c.5-10% of net income. Target land costs c.15-20% as % of GDV. Target inventory approx. €700-800m. 10
(1) Disposals before project completion may be considered on a project by project basis. (2) Total revenue includes revenue and other operating income as per company reporting.Attractive development project pipeline in exclusivity will
accelerate future growth
Location Asset type Est. GDV (€m)
Stuttgart area Commercial ~230
Stuttgart area Commercial ~550
Frankfurt area Commercial ~135
Frankfurt area Commercial ~150
Total ~1,000
11€278m portfolio of standing assets: Gateway will seek to maximise
value for shareholders and will consider disposals going forward
Portfolio by asset class Portfolio NAV
As of 31 Dec 2018 As per 31 Dec 2018
€ in millions
Other
Mixed 5% Retail
10% 25%
195
Office
20% Total space 278
~183k sqm
83
Hotel
40% (1)
Standing assets Net portfolio Portfolio
(1) (2) (1)
debt NAV
Standing portfolio by region
Rent
Federal state Fair value (€m) Space (000‘ m2) Vacancy (%) (€m pa) Yield (%)
Lower Saxony 62.1 28.7 26% 3.2 5.2%
Bavaria 55.7 21.5 0% 3.4 6.1%
Saxony 47.4 48.5 33% 2.5 5.3%
Hesse 41.1 26.4 36% 2.5 6.2%
Northrhine-Westphalia 45.1 34.7 27% 3.2 7.1%
Hamburg area(3) 26.5 25.2 74% 1.0 3.7%
Total 277.9 185.0 33% 15.8 5.7%
Note: Fair value as per Cushman & Wakefield valuation report on 31 Dec 2018. (1) After sale of the properties in Erlangen, Neuss and Bochum in Q4 2018. (2) Comprises bank debt 12
(€150m) and other financial debt (€85m), net of cash sales in Q4 2018 (€40m). (3) Hamburg area includes Mecklenburg-Vorpommern and Schleswig-Holstein.Appendix
Underlying assumptions for GDV
Assumed multiples and rents determined at the time of land acquisition, i.e. backward
looking
Asset type Assumed approximate monthly rent Assumed approximate multiple (yield)
~25 — 28.5x
Residential ~€10.50 — 12.50/sqm (3.5% – 4.0%)
Office ~€21/sqm ~24 — 28x
(Top 7 cities(1)) (3.6 – 4.2%)
~23 — 25x
Mixed-use ~€25/sqm (4.0% – 4.3%)
14
Source: Management estimates based on benchmarks. (1) Top 7 cities are Berlin, Frankfurt, Cologne, Dusseldorf, Hamburg, Munich and Stuttgart.You can also read
