"text":"Real Estate Prime Europe\nAccess the Core of European Prime Cities with a green SRI fund\nincluding a genuine low carbon commitment\nFor professional investors only. Not for further distribution. Information is valid as of December 2018"
},
{
"page":2,
"text":"Content\n1. Executive Summary\n. GRD Real Estate\nThe Fund\nExpertise & Investment Process\nInvestment Case & Views\n»wp\nao\nAppendices\nFund Investment Process\nos Detailed SRI Process\n— Reporting\n— Biographies\n2 See : ::: Estate Prime Europe"
},
{
"page":3,
"text":"01\nExecutive summary\n3 GE: :: Estate Prime Europe"
},
{
"page":4,
"text":"Executive summary\nA selective pan European investment strategy\n- European economics in most countries should sustain Office leasing\nactivity, retail consumption and business Hotels. Considering the\ndepth of these market segments, selectivity will be key.\n- A strategy targeting high quality Core and Core+ buildings, with\ndefined SRI objectives, in order to extract value through an active\nasset management.\nWhat makes us different?\n- Se, ss: long established real estate investment\nand fund management player in Europe, allowing for a clear view of\nopportunities coming to the market (€4bn of acquisitions out of\nFrance over the past 3 years).\n- GRD semi-open architecture based on a strong integrated\nplatform in France, Luxembourg and Italy and long standing\npartnerships in major European countries gives us the required\nlocal historical expertise and the important flexibility to build and\ndiligently manage a well balanced pan European portfolio.\n- GRDas a leading player in ESG expertise is putting all\n| resources to structure products in line with our ambition: AREPE will\na be a low carbon fund compliant with the Qi Real Estate\nsustainable investment Charter.\n4 GE: :: Estate Prime Europe EEE\n|—________|”|\"_)"
},
{
"page":5,
"text":"02\nSERes|i Estate"
},
{
"page":6,
"text":"A leader in European real estate\nA LEADER IN EUROPEAN PRIME CITIES €33 bn 125 750\nOf AuM Dedicated people Properties in Europe\nGREED Real Estate is a company specialized in developing, i.\nstructuring and managing European focused property funds. Gr: — = een\nThanks to the power of its inflows carried out the largest\ntransactions in the European market, with €4bn of acquisitions out of\nFrance over the past 3 years.\n- WEB sources assets across Europe, structures the acquisitions\nand their financing, and manages all type of properties with a focus on\nOffices. 700+ properties in France, Italy, Germany, the Netherlands,\nUK, Czech Republic, Luxembourg...\nACOMPLETE OFFERING\nSee the map with detail for each of the 750 assets on:\n- Commingled Funds (closed-end and open-ended); Dedicated Funds; Club Deals\n& Joint Ventures ; Mandates (tailor made solution).\n- A leading player in managing and structuring regulated funds in France. mOffice 75,6%\nBRetail 13,8%\n- A window for international clients looking to access the European real estate\nEB Hotels 4,3%\nmarket for diversification\n\" Industrial/logistics 1,0%\n\" Residentials 9.4%\nOthers 4,9%\nove > 201:\n6 GE: :: Estate Prime Europe"
},
{
"page":7,
"text":"Comprehensive service offering to institutions\nDirect Investment Indirect Investment\nDedicated\nClub Deals Mandates Funds Commingled Funds\nClub Deals: investing with similar-minded investors Different strategies (single country or pan-European, single\nasset class or diversified)\nMandates: build from a tailor made proposal, defined according ; ;\nto the client’s constraints & guidelines Different risk profile (core, core+, value-added)\nDedicated funds: build a structure to manage client’s assets Different leverage levels\nDifferent jurisdictions (French OPCI, Lux. SIFs, etc.)\nSESE\nT GE: :: Estate Prime Europe"
},
{
"page":8,
"text":"SEBeal Estate : a genuine low carbon commitment\nA fully documented sustainable investment charter\nEnvironmental and social performance\nEach of our assets is ranked by our dedicated team, from A to G.\nG F E D C B A\nWe use a well-known referential to perform a thorough analysis of 0 14 29 43 57 86 100\neach asset: the BREEAM In Use Part 1 international referential is fully Pollution\n59% Health & wellbeing\nexploited in order to perform an analysis of the environmental and social 52%\nperformance of the assets. Land we\n100%\nWaste\n100%\nEnergy\nGERD::| Estate has also developed additional and specific tools Materials 65%\n51%\nto complete and strengthen our sustainable approach on an asset by Water\n78% Transport\nasset basis: 23%\nThe Carbon Footprint 2°C Trajectory Climate Risk\nThis footprint is calculated based on: This trajectory will help assess the This evaluation shows the exposure of\nEnergy and leaks of refrigerants (scope 1) greenhouse gas emissions’ reductions the asset to different climate related risks\nElectricity, water and energy consumption needed to respect the Paris agreement (sea level, floods, temperature,\n(scope 2) heatwaves, storms...)\nMaterials used for construction or\nrefurbishment (Scope 3)\nGED Real Estate has built a genuine low carbon approach, in line with the best\nstandards\n8 GE: :: Estate Prime Europe"
},
{
"page":9,
"text":"The Fund\nSE Real Estate Prime Europe\n9 GE: :: Estate Prime Europe"
},
{
"page":10,
"text":"The Fund\nFund Objective\nNavigate the diversity of the Core/Core+ investment opportunities\nin European Prime Cities\nGEDis an open-ended Lux-based fund providing an attractive core/core+ real estate exposure, leveraging\nGRRE expertise in European RE markets. It offers diversification in terms of pan-European geographies and\nsectors: Offices, Retail and Hotels.\n- Risk level: Core/Core+\n- Type: essentially new or recently refurbished assets\nStrategy\n- Individual asset size: ranging from € SOM to € 200M\ncharacteristics\n- Leverage: 50% max (at asset and fund level) / Target 40-45%\n- A low carbon approach fully compliant with the best standards\n- Sector: offices (70% target; 60% min), all other types (30% target; 40% max)\n- Geography: 100% Europe\n- Tier 1: Min 75% in total, Max 40% by country (FR, UK, DE, BE, NL, LU, Nordics,\nAllocation SP, IT, CH)\nGuidelines - Tier 2: Max 25% in total in rest of Europe, max 10% by country\n- Non Euro investments: max 20%\n- Manage to Core: max 20%\n- Concentration limits: max 25% by asset\nTarget Returns - IRR: 6% - 7%\n(net of fees and tax) - Cash on Cash: 4% - 5%\nSt\n10 GE: :: Estate Prime Europe"
},
{
"page":11,
"text":"The caine\n4aodPr.\nFund Key Features\nA Luxembourg Alternative Investment Fund\ndenominated in EUR\nTarget Size: Target equity of€ 500m (€1 Bn of assets)\nRegulatory Qualification: Luxembourg AIF\nFund Structure “ Legal Form: Luxembourg Limited Partnership\nCurrency: EUR\nMinimum Investment: €5m\nSubscriptions: Quarterly. Queue system, with pari passu calls to the oldest vintage.\nRedemptions: Every semester (Dec and June). Queue system by vintage after lock up period.\nLock up: 5 years for investors entering in 2019, 4 years for investors entering in 2020 then 3\nyears\nLiquidity - Gates: 10% of NAV per annum\nRedemption deadline: 18 months after demand\nRedemption fee: If there are sufficient inflows when redemptions are outstanding, no fee on\nredemption ; otherwise, redemption fee will be 3% (10Y holding period), 2% (15Y) or 1% (>15Y)\nof NAV\nAsset Management/ Fund Management: sliding scale considering committed amount\n55-50-40bp x NAV (5-10; 10-50; 50+ ME). Fee only payable on investment called.\nFees For investors committing before 31/12/2019: Rebate of 10bp for 5 years after subscription\n(before VAT) = Acquisition: 0.5% to 1% x GAV following asset size\nDisposal: 200k€, flat\nPerformance fee: 20% above 7% IRR (payable by investors on realised profit)\n11 GE : :: Estate Prime Europe"
},
{
"page":12,
"text":"The Fund\nWhy a Core / Core + investment program?\nBenefits of the core\n/ core+ segment\n- Capital preservation*\n- Room to lock in Risk premia over\nfinancing rates\nDrawbacks ofthe core\n- Assets attractive for Long Term / core+ segment\nfinancing\n- Strong competition on this segment of\n- Assets adapted to a Buy and Hold the market for investment\nstrategy\n- Real Estate yields testing historically\n- Assets that generate running yields low levels\n- Adeep market improving availability\n- Core assets leave less room for active\nand asset liquidity\nasset management value creation\n- Better resilience to potential interest\nrate hikes (which usually triggers flight\nto quality)\n*capital preservation is defined here as a characteristic of core/core+ investments. There is no guarantee of capital.\nSESE\n12 GE: :: Estate Prime Europe"
},
{
"page":13,
"text":"The Fund\nSees has a strong track record versus the MSCI PEPFI*\n% 2015 2016 2017 2018 3Y 3Y (unl.) M S C Pas\nGHEE Total return 5,3 16,1 13,6 8,9 12,8 8,0 =\nLTV 71,0 62,4 58,9 58,2 59,8 0,0\nPercentile 80th 5th 5th 10th 5th\nPEPFI Total return 8,2 5,7 6,4 6,4 6,2 5,3\nLTV 20,6 21,5 21,9 21,8 21,7 0,0\nComments\n° LTV: part of the performance is down to leverage and ap ; significantly more leveraged than the benchmark and will remain so even\nafter we have reduced leverage to ca. 45%. Given the low cost of debt today, we believe this level of leverage makes sense: it boost\nincome return while the core nature of the portfolio should dampen a capital loss in case of a market downturn.\n. Asset-mix: QD current allocation is 100% Germany and a mixture of retail/office/hotel. As such, its asset and country allocation is less\nrisky than the benchmark which includes more risky countries and asset types (eg industrial/logistics).\n*PEPFI: Pan European Property Fund index QT: state as at end of December 2018\n16 GE: :: Estate Prime Europe"
},
{
"page":14,
"text":"Indicative pipeline of Investments — June 2019\nTechnical\nCountry / city Sector Risk Deal size Location Tenancy Comments\nspecificities\nOffice building 500m away from the European\nBELGIUM Offices Core Excellent New building Vacant Commission - well served by the subway (250m away\n80m\nBrussels Delivery Q4 2020 from one of the major metro station - 67 parking spaces -\nDelivery Q4 2020\nMulti let office building in the Sought after brussel's\nBELGIUM Fully let\nOffices Core 40m Good Recent building Euopean District - 100% let to 8 tenants - WALB 5,42\nBrussels WALB 5,42\nyears - Share deal - NIY around 4,17%\nFully let Office building in the South of Madrid - - 7 years lease\nSPAIN Completely\nOffices Core <50m Good Single tenant recently signed by an energy company - 47 parking\nMadrid refurbished\nspaces - Built in 1891 refurbished in 2019 -\nFully let\nFRANCE New building\nOffices Core 400m Good Very well located — LT lease - very good tenants\nLevallois Single tenant\nFRANCE New building Fully let\nOffices Core 300m Good New building in Paris\nParis 14 Multi tenant\n2 independent and interconnected office buildings in\nBELGIUM\nOffices Core 99m-102m Excellent Refurbished in 2014 Occupancy 92% Leopold / Location : A/ Accessibility : very good, in front\nBrussels\nof the property / Construction : 1992 / WALT : 7 years/\nLocated in the heart of CBD - next to the metro stop\nNETHERLANDS Beurs - Single good tenant - comprehensive\nOffices Core 85m-90m Excellent Recent building Fully let\nRotterdam refurbishment undergoing - handover scheduled for June\n2020 - 207 parking spaces\nLocated in the port of Rotterdam - connected with the\nFully let\nNETHERLANDS A15 highway - Sale and lease back with 10 years triple-\nLogistics Core 50m - 55m Good New building\nRotterdam net lease agreement - 43 loading docks - Expected\nSingle tenant\ncompletion in Q1 2020\n17 GE: :: Estate Prime Europe"
},
{
"page":15,
"text":"Indicative pipeline of Investments — June 2019\n; Technical\nCountry / city Sector Risk Deal size Location De Tenancy Comments\nspecificities\nThe building is a recently constructed office property in\nthe European District of the Brussels CBD. Located close\nFully letto five\ntothe Rue de la Loi, the main axis of the district, the\nBELGIUM Offices Core Good New building tenants (WALT of\n34-40m building benefits from close proximtio ttyhe main EU\nBrussels almost 10 Y)\ninstitutions, excellent infrastructure and many amenities.\nSpecifications fully meet today's market requirements,\nincluding a BREEAM Excellent rating.\nCompletely Fully let Office located in the West Berlin — Good Tenant -\nGERMANY Offices Core 44m-46m Se refurbished\nSingle tenant Delivery Q4 2020 - Lease term 20 years -\nBerlin\nA recent office building constructed in 2017, with 7 700\nsqm, 59 parking spaces and amenities (conference\nAlmost fully let\ncentre, fitness club, cafe, restaurant...). The property has\nPOLAND (WAULT 10 years)\nOffices Core 50-75m Excellent Recent building a Leed Platinium certification. The building is very well\nWarsaw\nlocated in the City Center of Warsaw and benefits from\nMulti tenant\nan excellent access to public transport. The expected\nyield is around 4,50%.\nNew 17 700 sqm development completed at the end of\nFully rented 2019, located seaside, in the South West city center of\nFINLAND\nOffices Core Good New building Helsinki. The property is single let to an Agency of the\nHelsinki 100-150m\nSingle tenant European Union on a 10 year lease agreement. The\nexpected yield is around 4,50%.\nAn outstanding quality iconic and sensitively developed\nFully rented\nCZECH Republic multifunctional building consisted of a restored baroque-\nOffices Core CBD New building\nPrague 90-100m renaissance palace from 1734, juxtaposed with a 2018\nMulti tenants\nconstructed eight storey premium office building\nFully rented\nFRANCE Property newly built in an established office submarket\nOffices Core Good New building\nSaint Denis 150 -170m close to public transports.\nMulti tenants\n18 GE: :: Estate Prime Europe"
},
{
"page":16,
"text":"Expertise\nOur strategy in Europe\nInvestment Process\nESG framework\nTeams\n19 GE: :: Estate Prime Europe"
},
{
"page":17,
"text":"Strategy to access & select prime assets in Europe\nGED benefits from long history, strong local partnerships, global and CRE economic research\nAcquisitions 2016-2018: over €11bn\nDeep deal flow in Europe = France\n= Paris exceptional deals\n\\\n= Germany\nGERM sources assets across Europe. All segments of\n= Netherlands\nreal estate assets are covered, with a focus on offices. = Italy\nThanks to the importance of its inflows, @jiiicarries = Austria\nout the largest transactions in the European market, Rane Rep\nwith €4bn of acquisitions out of France over the past 3 LUXENDBUG\nyears. en\n= UK\n= Finland\n2015 2016 2017 2018\nPipeline 620 assets analysed 520 assets analysed 577 assets analysed 813 assets analysed\nP €41.6 Bn €51.6 Bn €63.8 Bn €66.3Bn\nee 126 assets 74 assets 86 assets 79 assets\nCommittee €5.7 Bn €11.1 Bn €17.3 Bn €8.8 Bn\nAegucit 52 assets 55 assets 30 assets 17 assets\ncq7u isitions €2.6 Bn €4.3 Bn €6.0 Bn* €1.1 Bn\n20 GE: :: Estate Prime Europe EEE"
},
{
"page":18,
"text":"An open-architecture organisation\nAllowing for flexibility and agility\n- Semi-open architecture based on a strong\nintegrated platform in France, Luxembourg,\nItaly;\n- Longstanding partnerships in major\nEuropean countries, giving us the required local\nexpertise and the important flexibility to choose\nwhere to invest in Europe;\n- A strict and documented methodology when\nselecting our partners, in terms of compliance\nwith our ESG policy (target 2021).\nCountry Partners (non-exclusive)\nGermany Etoile Properties\nAerium\nIC Property Investment &\nManagement\nBenelux Etoile Properties\nHannover Leasing\nUK Knight Frank\nScandinavia Newsec\nAustria EHL\nIberia Etoile Properties\nFY Estate, December 2018\nEEE\n21 GD : :: Estate Prime Europe"
},
{
"page":19,
"text":"Investment process\nSR: Estate Prime Europe\nSourcing - Continuous market watch: discussions with our local partners, brokers, sellers\n- Dealflow in open architecture\n- First screening, analysis, identification of due diligence issues\n- Target portfolio guidelines\n- Thorough financial and ESG analysis of the asset, external valuation and\nasset visit\n- Technical, legal, tax, notarial due diligence\n- Negotiation of financing in accordance with due diligences’\nconclusions (tender, term sheet, loan documentation)\n- Acquisition structuring to minimize risk and tax, closing\ndocumentation\n- Strategy & business plan\n- Coordination with property and asset\nmanager\n22 GEDea! Estate Prime Europe ZEEEEE"
},
{
"page":20,
"text":"GEBhas a long experience of core/core+ investments\nin Europe\nGERD(a balanced pan-European open ended retail fund — under the form of a French collective undertaking for Real\nEstate investments “OPCI”) is the flagship oQf in France and combines RE and listed assets (respective targets of 60%\nand 40%) with max. 40% leverage. The RE portfolio of the fund is a good illustration Of expertise in European\ncore/core+ investments.\nOPCIMMO RE EN ee,\nportfolio ) ZZ\nTotal Return +4,6% +6,6% +7,5% +8,8% +7,2% +72% +6,9% ae ieer\nne irene 69 N Pologne\nRE AuM (€m) 99 297 472 1,636 3,214 4,846 4,920 a oe 25. a a\nIpStuRR:3 Ukraine\nNumber of 6 13 17 32 52 71 62 =RE-=)Seti\nassets Be — Be\nEr \\ ie ‘ulgarie\nRE Leverage 0% 234% 296% 307% 358% 378% 347% Th a Ra Re\nTurquie\nsource ‘GD :::: as of December 2018\nPast performance is not a guarantee of future results\nSESE\n23 GE: :: Estate Prime Europe"
},
{
"page":21,
"text":"Our ESG approach: a defined framework to reach the best\nstandards in terms of low carbon commitment\n| knaronmemal and ch! aertormaren\nGED will integrate additional investment criteria in order to be a green\nfund.\nAs such, following preselection of the assets, the fund managers will Laci\nexclude assets ranked below D, and build a portfolio with a global\nranking above or equal to C. rst\nOn top of this ranking, we will perform a specific analysis on each asset ne lese,\nin order to be fully aware of its impact in environmental terms:\n- The carbon footprint ofthe assets\n- The 2 degrees trajectory of the assets ‚=\n- The exposure ofthe assets to climate risks 3000 5 G\n} #\nIn line with the Paris Agreement — COP 21* and the European directive** objectives for foreign\nassets, we will assess for each asset the greenhouse gas emissions reductions to be\nachieved and implement an energy consumption reduction trajectory, delivering to our\nclients a genuine low carbon approach backed by concrete analyses and reporting\n“the Paris Agreement:\n- limiting the average increase in the planet’s temperature to less than 2°C compared to pre-industrial levels\n- reinforcing capacity for adaptation to the harmful effects of climate change and promoting resilience to these changes\n**the European Directive :\n- The European Council has adopted an indicative objective to reducing energy consumption by 27% by 2030\nSESE\n24 GE: :: Estate Prime Europe"
},
{
"page":22,
"text":"A robust and balanced setup for efficient teamwork\nReal Estate\n(125 people)\nInstitutional Solutions\nReal Estate team\nInvestment teams\n(Research, Acquisitions\n& Sales, Asset\n| Advisory\nManagement)\nOperations (Fund\nControlling, Liability\nManagement... )\nMngt co.\nLuxembourg\n(76 people)\n| Ptf and Risk\n: Mngt Strong and long dated\nexperience as an AIFM\nGeneral Partner GP Sarl 4 people dedicated to\nLux real estate: Conducting\nOfficer, Portfolio\nManagement, Fund\nControlling and\ndedicated\nRisk&Compliance\nOfficer\n25 a. :: Estate Prime Europe"
},
{
"page":23,
"text":"Investment Case & Views\n28 GE: :: Estate Prime Europe"
},
{
"page":24,
"text":"Market\nViews\nEurope is a liquid, deep and attractive real estate market\n; Spread between office prime yield and 10-\nInvestment volumes in European real estate RR a. |\nyear Govies (in basis points, since 2000)\n300 Md € 4 r 6% 600 pb\n250 Md € 4 | 5% : 4\nS\n0\nU\n0\nR\np\nph\nb FE\nma€ x\n200 Md € + L 4% 300 pb all.\n200 pb a eo a ce i\n150 Md€ 4 | 3% 100 pb 4 TT =\n= ao . j | o am 0 pb min\n-100 pb —\n50 Md € + L 1% -200 pb\nO Md € + 0% -300 pb \" & = m P\n19 11 12 13 14 18 16 17 18 19 FS F KC Kw K & KS N!\nGa Q3\nPrcS\nme 2\nma CO! — Q2 2019 — Average 200— 0Q2 2019 —- (04 2018\nwm Average S1 2010 - 2019\n—EU 15 weighted prime rate (right scale) “End of period\n- Europe is a key destination for capital markets - Real Estate investors follow their acquisitions at historically\nlow rates, this behavior is led by office rents increases\n- European investment markets have been very active over the recent anticipations (and to some extent for the logistics), at low\nyears. Offices are the main asset class, with a little less than 1 euro financing rates, and a gap with 10 years rates significantly\nover 2 euros invested. higher than the long period average.\n- Local European actors and even often local national investors have - The spread between government bonds and prime yields is\ndominated the RE investment markets in Europe, but international still currently significantly high on many markets in a lasting\ninvestors are gaining market shares (mainly from Asia, Americas and low rates environment\nthe Middle East) .\n29 GE: :: Estate Prime Europe"
},
{
"page":25,
"text":"Market\nViews\nOffices are by far the main real estate asset class in Europe\nview of cities’ office prime headline\nOffice take-up and vacancy rate\nrents — Q2 2019\n14Mm? - - 12%\nAmsterdam Prague\nBarcelone\n12Mm? + + 10% Hambourg\nBruxelles\nFrancfort\nMilan\n10 Mm? 4 6.0 8%\nDublin\nLondres Paris\n8 Mm? 4 + 6% Varsovie\n6M mi» | 4% Berlin\nMunich\n4M mi - 1 2%\n2Mm? + + 0%\n0OMm?« -2% A d c e c c e li l n e e r ation of rents S de l c o l w i d ne o wn of rents A i c n c c e r l e e a r s a e t ion ofrents i S n l c o r w e d a o se wn of rents\n10 11 12 13 14 15 16 17 18 19\n(4\nma3\nRents variation intensity: weak moderate strong\nme)\nu() |\nu Average S1 2010-2019\n— Vacancy rate EU 15 {right scale)\newes Headline prime rent rental growth EU 15 (rught scale)\n- The office market has been particularly active at the 1° semester - Major EU markets should benefit from tenants demand\n2019, a performance to be highlighted in a context of economic\n- All markets have different rental cycles in terms speed: Pan\nslowdown and of high uncertainties: office commercialization have\nEuropean diversification will allow to anchor RE investment\nincreased over 1 year in Western Europe and are higher than the\nperformance\ndecade average.\nNB\n- Alot of companies continue to favour central zones for “talents\n- The positions are purely indicative and are not an investment recommendation or\nhunting” recruitment purposes., but they face a quality offer that is solicitation\n- City positions can move at different speeds and directions depending on various\nregularly lacking. This context of rarity, if it benefits “In white”\nparameters\nlaunches, it exerts upward pressure on facial rents.\nSource!\n30 GE: :: Estate Prime Europe"
},
{
"page":26,
"text":"A strategy for Europe today: stability & diversity\nCurrent Fund Target Allocation across Europe\nOur strategy for Continental Europe today: BE Conviction - Strong\n> targeting sustainable LT yield, value protection, with a ME Conviction - Medium\nhigh level of diversification and valuation potential FE Conviction - Low\nFrance Germany Benelux Other € Non € Target Themes\n/ Austria\nTargeting demand-driven markets featuring rent recovery or rent\nOffices 70% pressures and >200bps risk premiums over risk free rates, always\nin prime locations\nFocus on leases featuring fixed or floored rents with established\nHospitality\n= + + + = operators in markets where constrain of new offer exist. Risk\nHotels, others 10% premium must reflect any operational risk taken\nindustrial / Look at the opportunities in close to city centers distribution\n\\Warahöus + of. + = = 10% platforms while large modern logistic platforms might be out of\na e reach (high individual values).\nRetail (High Focus on prime high street retail or small central urban shopping\nstreet; retail + + + + - 10% centers in main secondary cities demonstrating positive data in\npark) terms of demographics and spending potential\nTier 1 (FR, UK, DE, BE, NL, LU, Nordics, SP, IT, CH) target 80%\nTier 2 target 20%\n31 GE : ::: Estate Prime Europe"
},
{
"page":27,
"text":"Current views accross Europe\nThose markets are diverse and present perspectives and positions in Real BM Conviction - Strong\nEstate cycles which are highly dependent upon each local economic situations, BM Conviction - Medium\nperspectives and exceptional events affecting them:\n— Conviction - Low\na|\nGermany France Portugal\nPrime office assets in Prime markets are very Paris region is a deep and liquid market. Rents Lisbon is a small market but it experienced a\npricey unless rent reversion is real. Risk have some potential to improve. Considering rapid economic recovery in recent years and is\npremium remains attractive on a leveraged current low yield and fierce competition, office interesting for Core Offices, quality Retail asset\nbasis. Managteo core or build to core can make right outside CBD for Core + assets can be or Hotel walls with top operators. Limited\nsense as a LT investor in main cities. considered. Manage to core strategies could liquidity of this market means investment must\nResidential is also attractive make sense. be small\n||]\nBenelux Austria United Kingdom\nBrussels is an interesting market despite its high Office retail and hotel marketsto be looked at London office market attractiveness has\ndependency on EU commissions offices. as risk premium remains attractive and financing been hurt by the uncertainties introduced\nOpportunities are rare but worth looking at. offer as good conditions as in Germany. We since Brexit vote. Although presenting new\nDespite a recent decrease in yields, Amsterdam must remain cautious in this market where opportunities, the UK market does not\nand Luxemburg remain attractive for office and competing future supply can break present present today the best investment set.\nresidential equilibrium.\nIreland Finland Italy\nThe market is narrow but opportunities can Although rather small market, Finish office, retail Office market is over priced and leverage is not\nbe looked at in the Dublin office market, and hotel assets should be looked at. Asset size efficient. Each of Milan and Rome office\nwhich can benefit from Brexit. A particular should remain reasonable as this market lacks markets are narrow. competition is currently too\nfocus on the competitive future supply will be liquidity. Residential market can also be looked strong for prime assets. Focus could be made\nneeded. at although local investors present strong on retail in 2nd tier cities for best in class micro\ncompetition locations.\nPoland Spain Czech Rep\nPrime office market in Warsaw will be searched Madrid office and retail assets are interesting Office assets could be looked at on an\nfor opportunities as sellers (investors and while financing costs continue to decrease and opportunistic basis in Prague but this market is\ndevelopers) start to be reasonable in their economy slowly recovers, offering potential for now very competitive and can sometime be\nselling price. Investment should focus on Euro higher rents. Assets in prime locations (Madrid overpriced especially for Euro-denominated\ndenominated assets offering mainly Euro and Barcelona) should be favored as they have deals.\nrevenues. best potential for rent evolutions.\nSESE\n32 GE: :: Estate Prime Europe"
},
{
"page":28,
"text":"Appendices\nFocus on our ESG approach\nFund Information / Reportings\nRecent acquisitions in Europe\nBiographies\n33 GE: :: Estate Prime Europe"
},
{
"page":29,
"text":"Focus on the ESG approach\nA) The environmental and social mapping\nPerformance environnementale et sociale\nTo realize this mapping, we mainly use the\n71 / 100\nBREEAM-In-Use part 1 frame of\nG F E D C B A reference.\nee DE\n0 14 29 43 9 6 100\nThis internationally known frame of\nPollution 29% reference allows us to confirm the\n59% ~~. Santé et bien-étre\nrelevance of the realised analyses.\n52%\n100% OccupPatir =\nsol et écologie\nNous y dérogeons sur l’aspect énergie en\nDechets\n100% |\ns’interessant a l’annee de construction du\nFE ' Energie\nPerennite des \\ 65% bätiment et a la reglementation a laquelle\néquipements il etait soumis.\n78% Transport\nWe derogate from it on the energy aspect\n83%\nby focusing on the construction year of the\nbuilding and the rules and regulations to\nwhich it was subject.\n34 |"
},
{
"page":30,
"text":"Focus on the ESG approach\nB) Energy-Carbon performances evolutions\nThis part is based on the consumption of the\nEvolution des performances Energie - Carbone\nasset. It allows to visualize the evolution of\nconsumption in relation to two objectives:\nEnergie Carbone\n(kWh,,/m?.an) | (kgCO,e/m?.an)\nPerformance de - Energetic objective: based on the\nréférence 286 17 reductions imposed by the tertiary decree in\n(2011)\nFrance and on recommended reductions by\nPerformance actuelle the European framework for energy and\n286 17\n(2011) climate for other European countries.\nObjectif 2030 171 14\n- Carbon objective: based on the necessary\nAvancement de reduction to ensure that the asset is on a\n100\nl'objectif (%) 0%\n[0 trajectory compatible with the Paris\nAgreement limiting the global warming to\n2 os\niy Les performances analysees prennent en compte :\n- les usages de l'immeuble (parties communes et/ou privatives)\n- le mix énergétique de chaque pays d'implantation (pour la The translation of the energetic performances\nconversion Energie-carbone)\nin carbon performances takes into account the\nLa performance carbone est issue des consommations\nenergetic mix of the asset's country.\nénergétiques uniquement (scope 1 et/ou 2).\n35 |"
},
{
"page":31,
"text":"Focus on the ESG approach\nC) Exposure to climate risks\nRisques physiques lies au changement climatique\nLes risques physiques lies au changement climatique se traduisent par des evenements chroniques (élévation du niveau de la mer et de la\ntempérature) et exceptionnels (canicules, inondations, tempétes) pouvant endommager le batiment ou ses équipements.\nkz ow ee BER\nLe batiment est situé dans un milieu\nurbain dense, avec un phénoméne d’ilot\ni de chaleur urbain lors de fortes chaleurs\npouvant entrainer des appels de\npuissance supplémentaires en froid.\nHausse du Inondations dues Hausse de la Canicules Tempétes\nniveau de la mer aux pluies température moyenne\nThis part allows an evaluation of the exposure of the asset to 5 risks linked to climate changes. 3\ncriteria are considered to build this grade:\n- The geolocation of the asset and the resulting predictive scenarios of the climate change ;\n- The devices and characteristics of the asset allowing it to resist to these risks ;\n- The immediate environment of the asset that may include aggravating factors.\nre\n36 |"
},
{
"page":32,
"text":"ESG\napproach\nFocus on our ESG approach: mobilization within our sector\nGERD Real Estate is one of the founding members of the Observatory of\nSustainable Real Estate, an independent and transparent forum for exchanges,\npromoting the sustainable development and innovation of French real estate. ®) B\npESOCIATing\nBATIMENT\nGHEE Real Estate is a member of the BBCA low carbon building association since\nBBCA\n2016.\nBAS CARBONE\nC,\nMEMBRE 2019\nGERD Real Estate participates in the working group on the creation of A SPIM ASSOCIATION FRANGAISI\nICIETES\nan SRI label applied to real estate. ACEMENT IMMOBILIET\nps\n33 GE: :: Estate Prime Europe"
},
{
"page":33,
"text":"Fund\nReporting\nFund Information Reporting\nFinancials : quarterly (D+45) Real Estate : semi-annually (D+90)\n- NAV calculation, consolidated accounts - Appraisal reports, global market review, asset\n- InREV adjustments, distributed dividends management report\nstatements (semi-annual), ratios =\nss | Be | == |e | ee\nGlobal synthesis : annually (D+90) Annual Report (D+120)\n- Annual accounts, market, financial and real estate - Annual audited accounts\nanalyses, updated business plan - Audit report\n— Be - - un\n-/— | naa\n3 =\n= 1\nWw oo Real Estate Prime Europe"
},
{
"page":34,
"text":"Recent deals in Europe\n(1/5) Our sourcing capabilities make us a specialist of European assets’ origination and asset management\nI [rem 00 Bo\nInvestment by unds\nINK MGallery Hotel Area: 148 rooms\nAmsterdam ! ee\nCore Tenant: Accor Hospitality Nedeland\nClosed in 2018 WAULT (years): 14\nAsset Value: €64,6m\nNet Initial Yield: 4.02%\nUnlevered CoC: 4.14%\nUnlevered IRR 10Y: 4.40%\nEl Portico Area: Office 20,814 sqm Investment by unds\nMadrid Parking 401 units\nCore Tenants: Multi tenants\nClosed in 2018 WAULB (years): 2,28\nPrice: €117,4m\nNet Initial Yield: 4.31%\nUnlevered CoC: 3.31%\nUnlevered IRR 10Y: 4.26%\n39 GE: :: Estate Prime Europe"
},
{
"page":35,
"text":"Examples of recent deals in Europe\n(2/5) Our sourcing capabilities make us a specialist of European assets’ origination and asset management\nroJmoe\nEnjoy Area: Office 16,970 sqm Forward sale deal,\nParis development to be\nCore Parking 64 units completed by end-2018.\nClosed in 2018 Tenant: AXA Services\nWAULT (years): 9 Co-investment between\nAsset Value: €258m net Fund and a French\nNet Initial Yield: 3.40% institutional investor\nUnlevered CoC: 3.30%\nUnlevered IRR 10Y: 3.30%\nArea: Office 28,564sqm Investment b¥@iiiFunds\nBBW Residential 2,494 sqm\nFranfurt Commercial 1,028 sqm\nCore Parking 347 units\nClosed in 2018 Mains tenants: KfW, Dwp Bank, Nomura\nWAULT (years): 10\nAsset Value: €141,2m\nNet Initial Yield: 4.25%\nUnlevered IRR 10Y: 3.60%\n40 GE: :: Estate Prime Europe"
},
{
"page":36,
"text":"Recent deals in Europe\n(3/5) Our sourcing capabilities make us a specialist of European assets’ origination and asset management\nDM [rom Terms\nGrand Central Area: Office 43,674 m? Forward sale deal,\nFrankfurt Storage 1,636 m? development to be\nCore Parking 783 units completed by end-2020.\nClosed in 2017 Tenant: Deutsche Bahn Netz AG (100%)\n-subsidiary of DB AG*\nWAULT (years): 20 GERD funds bought 100% of\nAsset Value: €324m net the deal and seek to share\nNet Initial Yield: 3.45% 50% of this deal with co-\nUn-levered Cash-on-cash: 3.48% investor(s).\nInvestor un-levered IRR 10Y: 3.22%\nRocket Tower Area: Office 26,192 m? Co-investment between\nBerlin Retail 1,765 m? GERuDnd and a Finnish\nCore Parking 411 units institutional investor\nClosed in 2017 Tenants: Multi (occupancy 96%)\nWALB (years): 13:5\nPrice: €149m net\nNet Initial Yield: 40%\nLTV: 45%\nCash-on-cash: 9.47%\nInvestor IRR 10Y: 7.58%\nmm \"DUB AG: responsible for railways maintenance\n41 GE: :: Estate Prime Europe"
},
{
"page":37,
"text":"Recent deals in Europe\n(4/5) Our sourcing capabilities make us a specialist of European assets’ origination and asset management\nECT [>777\nCoeur Défense Area: Office 182,765 m? Co-investment between\nParis, La Défense Main tenants: HSBC, RTE, Allianz and EDF EN and French\nCore WALB (years): 7 institutional investors\nClosed in 2017 Price: € 1,720m\nNet Initial Yield: 4,78%\nLTV: 52%\nCash-on-cash: 5.59%\nInvestor IRR 10Y: 7.46%\nTour Hekla Area: Office 79,876 m? Speculative development\nParis, La Défense Main tenant: Vacant Co-investment between\nCore WALB (years): and a French\nClosed in 2017 Price: € 582m institutional investor.\nNet Initial Yield: 6.7%\nLTV: 41%\nCash-on-cash: 5.8%\nInvestor IRR 10Y: 6.03%\n42 GE: :: Estate Prime Europe"
},
{
"page":38,
"text":"Recent deals in Europe\n(5/5) Our sourcing capabilities make us a specialist of European assets’ origination and asset management\nroens\nThe Atrium Area: Office 59,044 m? Co-investment wit»\nAmsterdam south-axis Parking 525 units investors\nCore Tenants: Multi (occupancy 68%)\nClosed in 2017 WALB (years): 8\nPrice: €920m net\nNet Initial Yield: 3.83%\nLTV: 60%\nCash-on-cash: 6-7%\nInvestor IRR 10Y: 7.57%\nThe Cloud Area: Office 23,807 m? Co-investment between\nAmsterdam Parking 195 units GERD0 ans GD\nCore Tenants: Multi (occupancy 98.4%) institutional investor\nClosed in 2017 WALB (years): 9.7\nPrice: €159m net\nNet Initial Yield: 4.24%\nLy: 40%\nCash-on-cash: 4.78%\nInvestor IRR 10Y: 5.56%\n43 GE: :: Estate Prime Europe"
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