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Deutsche Euroshop Real Estate Summer

Gdansk 2015

21.08.2015

Agenda

Deutsche EuroShop – Update

Galeria Baltycka Extension

Portfolio Activities

Investment Market

Discussion

21.08.2015 DEUTSCHE EUROSHOP REAL ESTATE SUMMER 2015

2

AGENDA

1) incl. non controlling interests

Key Figures H1 2015


3

COMPANY

€ million 01.01.-30.06.2015 01.01.-30.06.2014 Change

Revenue 100.6 99.7 1%

Net operating income 91.8 90.5 1%

EBIT 88.2 88.3 0%

Net finance costs -24.7 -28.0 -12%

Valuation result -2.0 -2.9 31%

EBT 61.5 57.4 7%

Consolidated profit 49.7 46.3 7%

FFO per share (€) 1.14 1.09 5%

Earnings per share (€, undiluted) 0.92 0.86 7%

€ million 30.06.2015 31.12.2014 Change

Total equity1) 1,736.0 1,751.2 -1%

Financial liabilities 1,461.4 1,430.1 2%

Other debt (incl. Deferred taxes) 307.6 310.9 -1%

Total assets 3,504.9 3,492.2 0%

Net financial liabilities 1,388.1 1,371.8 1%

Equity ratio1) 49.5% 50.1%

LTV ratio 41% 40%

Gearing1) 102 99


4

FINANCIALS

1) Compound Annual Growth Rate (CAGR) 2010-2016 2) incl. dilution 3) excl. capital gain

Forecast

REVENUE

€m

EBIT

€m

EBT EXCLUDING VALUATION3)

€m

FFO PER SHARE

€

1.40 1.61 1.66 2.08 2.23

2010 2011 2012 2013 2014 2015 2016

63.9 86.6 95.1 113.4

1 2 3 4 5 6 7

124.0 165.7 151.61) 165.81) 177.5 179-182

144.2 190.0 178.21) 188.01) 200.8 203-206

1 2 3 4 5 6 7

+1%

+1%

+3%

+3%

+32%

+34%

+36%

+15%

+10%

+3%

+19%

+25%

+7%

+7%

+10%

+7%

201-204

177-180

125.0 126-129 130-133

2.24-2.28 2.30-2.34

Equity method

Equity method

CAGR1)2): +9%

CAGR1): +13%

+1% +5%

+9% +1%

+2%

+1%

Opportunity to grow

Strong performance of Galeria Balycka since opening

– Leasing status >99%

– High productivity

– #1 player in Gdansk region

Meet substantial tenant demand

– successful tenants need more space


5

EXTENSION GDANSK

Opportunity to grow (cont.)

Improve customer satisfaction:

– increased retail variety by gaining up to 70 new brands and concepts

– tenants will invest in new stores making them more attractive

Staying ahead of competition

– Riviera

– Forum Radunia

Investment case

– attractive investment return well above current market yields


6

EXTENSION GDANSK

Opening center Fall 2007 (first leasing cycle due in 2017)

Leasable area (GLA) 48.700 + 13.800 = 62.500 sqm after extension

No. of parking places 1.100 + 200 = 1.300 after extension

No. of shops 200 + 70 = 270 after extension

No. of retail / parking levels 3 / 2

Anchor tenants Inditex Group, P&C, H&M, Saturn, Intersport, Carrefour

Investment volume extension 70-75 Mio. EUR (100% view, DES share: 74%)

Key Project Data*


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EXTENSION GDANSK

* subject to change

Aerial view of the extension part


8

EXTENSION GDANSK

Plot situation: all plots are owned or secured


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EXTENSION GDANSK

Environmental permit valid 2015

Stream relocation 2016 Building permit extension 2016/17

Construction start 2016/17

Grand opening 2018

Project Steps*


10

EXTENSION GDANSK

* subject to change

Conceptual Design Example: Highly Attractive Architecture


11

EXTENSION GDANSK

Target Tenants


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EXTENSION GDANSK

Anchor tenants:

H&M (extension)

Inditex brands

− Zara (prolongation)

− Stradivarius / Bershka / Pull & Bear (extensions/relocations)

− Massimo Dutti / Zara Home (new openings)

LPP brands

− Reserved (extension)

− Sinsay / House / Cropp (extensions/relocations)

Peek & Cloppenburg

On-going intensive talks to the tenants


13

EXTENSION GDANSK

* subject to change

= outline of the existing center

Target Leasing Concept* - Basement

Target Leasing Concept* – Ground Floor


14

EXTENSION GDANSK

* subject to change

Target Leasing Concept* – 1st Floor


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EXTENSION GDANSK

FLOOR

* subject to change

Summary


16

EXTENSION GDANSK

attractive opportunity to grow

right timing

plots secured

well received from the leasing market

building permit processes ongoing

long development & construction time due to complexity

good expected returns

Phoenix-Center Hamburg: Extension in the Basement


17

PORTFOLIO ACTIVITIES



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19


City-Point Kassel: Creating Atmosphere for the 3rd Place


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439 sqm shop area

198 seats + 20 seats on the balcony

City-Point Kassel: Creating Atmosphere for the 3rd Place


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Internal Growth with Extensions


22


Simulation Phoenix-Center

€30m @ 6%


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INVESTMENT MARKET

European Retail Investment Volumes 2014

Germany: Transaction Volume Shopping Center


24

INVESTMENT MARKET

5-year average

bn. €

source: JLL

lack of supply

incl. corporate transactions

Germany: International Player dominating the scene


25

INVESTMENT MARKET

H1 2015: 84% of the investors in German shopping centers were international (after 63% in 2014), by volume

source: JLL


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INVESTMENT MARKET

This time it´s different: Quality investments can pay off also long term!

Investment Cycle and Relative Returns

Investment Strategy – Financial Parameters


27

INVESTMENT MARKET

no „fixed cap rate hurdle“ for acquisitions, but prudent investment policy:

− valuation of sustainable rent, NOI and growth

− thorough due diligence, e.g. on capex

investments with long-term strong cash-flow contributions

long-term NAV growth

averaging of pricing (buying through the cycles in case of opportunities)

Investment Strategy – Quality Parameters


28

INVESTMENT MARKET

high-quality shopping centers

realistic catchment areas >300,000 inhabitants

>25,000 sqm leaseable area, special cases >15,000 sqm

A/B centers in A cities

A centers in B cities

Investment Strategy – Target Countries


29

INVESTMENT MARKET

Germany

Austria

Poland

Hungary

()

Czech Republic

Pecs

Contact


30

APPENDIX

Deutsche EuroShop AG Investor & Public Relations Heegbarg 36 22391 Hamburg

Tel. +49 (40) 41 35 79 - 20 / -22 Fax +49 (40) 41 35 79 - 29 E-Mail: [email protected] Web: www.deutsche-euroshop.com

Important Notice: Forward-Looking Statements

Statements in this presentation relating to future status or circumstances, including statements regarding management’s plans and objectives for future operations, sales and earnings figures, are forward-looking statements of goals and expectations based on estimates, assumptions and the anticipated effects of future events on current and developing circumstances and do not necessarily predict future results.

Many factors could cause the actual results to be materiallydifferent from those that may be expressed or implied bysuch statements.

Deutsche EuroShop does not intend to update these forward-looking statements and does not assume any obligation to do so.

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Patrick Kiss Head of Investor & Public Relations

Nicolas Lissner Manager Investor & Public Relations

Wilhelm Wellner Chief Executive Officer

Olaf Borkers Chief Financial Officer

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