Well established properties with goodinfrastructural connections and regional relevance
Occupying a niche which is situated below the investment criteria ofinstitutional investors and above the requests of private investors
Lean company structure and low administrative expenses
Valuation potential due to low purchase prices, vacancy reduction, rent increases
Furthergrowth of the portfolio mitigates single-asset risks and stabilises the whole portfolio leading to more diversity
REIT combines our asset strategy with lean admin structures,tax exemption on company level and provides attractive dividends for shareholders
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
7
Strategy & Business Model
Real estate investment company focussed on Light Industrial
Strong continuous growth with acquisition at high yields around 10%
Land development potential
DIR owns a huge land area of 2.6 million sqm.
Light Industrial is the lowest possible type of development for land
Usually low buildings
Land utilisation is only 50%
Construction of taller buildings and increased utilization would lead to higher density
New construction with upgrade in for instance office or residential use is possible
Rent development potential
No significant
Restrictive
Conversion
Strong
Need for more
into more
storage and
new
approval
valuable types
economic
logistics
construction
practice for
of uses
fundamentals
spaces due to
due to current
industrial areas
(residential,
in Germany
booming online
low rent level
office etc.)
shopping
Shrinking product supply
Growing demand
Increasing land value
Increasing market rents
Built up a Light Industrial real estate platform with multi-dimensional value enhancing potential where the whole is worth more than the individual parts
8
Strategy & Business Model
Investment approach & Deal sourcing
Investment criteria
Locations with good infrastructural connections and regional relevance
Pure Light Industrial and logisticuses
High initialvacancy is not necessarily a hurdle
Good over-allsubstance with possible need for renovation and development
Initialyield: Preferably over 10% p.a. (on the basis of the in place rent)
Volume from <1 m€ up to 50 m€ per transaction
Only asset deals, single assets and small portfolios
Typical Seller / Sales Reason
Splitting
Sale &
Opco/
lease
Propco
back
Enterprise
Leftovers
Non-
Succession
from big
institutional
portfolios
owners
CapitalInsolvency
recycling/stressed companies
Conversion
properties
Our competitive advantages:
Deal sources
• Quick decisions due to lean company structure
• Focused and flexible acquisition team
Broker
DIR
Public
Other
• Fast payment due to equity financing
network
auctions
• Well-defined investment strategy with pure focus on one asset class
• Comprehensive and transparent reporting
9
Strategy & Business Model
Value add approach
Risk/Chance
analysis before
purchase
We try to get a vision of the asset, location and useful future uses based on current market demand
Creativity and
flexibility
We try to think
unconventionally and to find new concepts to recover a property
Pro-active asset
management
Our team consists of
experienced and motivated full-time asset managers
Tenant relationship
We want to be a
reliable and long-term
partner and are in
continuous
discussions to
understand tenants needs with the aim to generate win-wins
Tenant network
With the expansion of the portfolio also our network of potential tenants grows which can be advantageous
10
Market Overview
German Light Industrial Market
Overview of the commercial real estate market in Germany
Total commercial floor space (million sqm)
Market values of commercial real estate (billion EUR)
Market values of company properties(billion EUR)
Retail properties
Converted
Business parks
Company properties 563.6
properties 43.0
360.0
14.5
Company properties
957.6
Industrial space
1,359.0
Light
Office properties
maufacturing
Warehouse/
properties 300.5
logistsics space
600.0
205.7
Retail properties
120.0
Space in smaller
Industrial space
Office properties
Space in smaller properties
475.7
properties
400.0
310.0
93.0
Key facts:
New constructions company properties
(sqm in thousand)
▪ 27 % of the total commercial market value are company properties
▪ New Constructions of company properties H2 2019:
•
49.0 %
Light manufacturing properties
•
26.7 %
Logistics space
•
21.4 %
Business parks
•
2.8 %
Converted properties
1,175.5
918.6
714.4
988.8
871.0
772.6
538.5
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
Source: bulwiengesa, Market Report - Transparency on Germany's Industrial Real Estate Market (H2 2019)
12
German Light Industrial Market
Investment market - corporate properties
Investment volume (mEUR)
Average gross initial yields (%)
2,408
2,052
8.7%
1,803
7.8%
5.9%
6.4%
1,084
953
796
Converted properties
Warehouse-/ logistics
Business parks
Light manufacturing
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
properties
properties
Key facts:
Doubling of the investment volume in the second half of 2019, highest transaction volume so far, still short supply on the market
More transactions in less documented market regions / more off-market deals
Rolf is the founder of Deutsche Industrie REIT-AG, which is a spin-off of his investment company Obotritia Capital. Before he was the CEO of TAG Immobilien AG, Hamburg, which experienced an enormous growth under his leadership and was included into German Mid- Cap Index (MDAX).
Rolf worked many years as an equity strategist at ABN Amro, Commerzbank and UBS in London. He has excellent banking and real estate knowledge. Rolf is personally and financially committed to Deutsche Industrie REIT-AG.
Sonja Petersen (neé Paffendorf) (CIO)
Sonja has been part of Obotritia Capital since 2015. She started as a Head of Project Development and became the Chief Investment Officer of Obotritia Capital in January 2017. In this position she has been responsible for the strategic growth of the commercial real estate portfolio. She was appointed CIO of Deutsche Industrie REIT-AG on 18th of October 2017.
Sonja has worked many years in the real estate industry, especially in project development in Germany and Australia. Sonja is personally and financially committed to Deutsche Industrie REIT-AG.
René Bergmann (CFO)
René has been working for the Deutsche Industrie REIT-AG since November 2017, as Director Finance he was responsible for the development of this area. He has been Chief Financial Officer (CFO) since September 1, 2018. His duties include equity and debt financing as well as accounting / controlling and IR.
René has worked many years in the real estate industry, especially in portfolio management and IR. René is personally committed to Deutsche Industrie REIT-AG.
41
Appendix
Appendix
Glossary
#
Glossary
1
Commercial units
e.g. logistics, production, warehouse, office or similar without parking and other units (for example antennas, open spaces, apartments)
2
Total rental space
Also contains ancillary areas such as open spaces, ancillary rooms (corridors, sanitary facilities, common areas), apartments, owner-
occupied space (concierge or similar)
3
Commercial rental space
e.g. logistics, production, warehouse, office or similar without parking and other units (for example antennas, open spaces, apartments)
4
Annualised in-place rent
Contractual net cold rent p.a. for all units (includes also antennas, parking lots, open spaces, apartments etc.)
5
Vacancy commercial
Vacant commercialspace divided by (total) commercialspace
6
WALT
Weighed average lease terms - only contracts with an agreed fixed term have been considered
7
IPR commercialper sqm
Rent of leased commercialunits divided by space of leased commercialunits
8
Current market value
Value determined by means of market value appraisal or, where this is not yet available, the purchase price
9
Date of transfer
Transfer of ownership (benefits and encumbrances)
10
EPRA NAV per share
Total equity modified according to EPRA guidelines divided by number of shares
11
FFO
Funds From Operation - Recurring and one-off adjusted result from the operation of the property portfolio
12
GAV
Gross Asset Value - Value of investment properties in the balance sheet
13
Net-LTV
Net loan-to-value - debt (financial liabilities minus cash) divided by GAV
43
Disclaimer
The material in this presentation has been prepared by Deutsche Industrie REIT-AG (Deutsche Industrie) and is general background information about Deutsche Industrie's activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters. Any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.
This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Deutsche Industrie REIT-AG businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. Deutsche Industrie REIT-AG does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Deutsche Industrie REIT-AG control. Past performance is not a reliable indication of future performance.
The individual financial statements comprise the balance sheet, statement of comprehensive income, statement of changes in equity, cash flow statement and are prepared in Euros (EUR). All amounts are presented in thousands of Euros (kEUR) (exceptions are indicated), which may result in rounding differences.
Unless otherwise specified all information are for the financial quarter ended 30 June 2020.
Deutsche Industrie REIT AG published this content on 15 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 September 2020 16:04:07 UTC
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