COMPANY PROFILE 15 OCTOBER 2015

Transcription

1 COMPANY PROFILE 15 OCTOBER 2015 NEW EUROPE PROPERTY INVESTMENTS PLC 1

2 COMPANY PROFILE 1 TRACK RECORD 2 GEOGRAPHICAL FOCUS 3 INVESTMENT CRITERIA 4 MANAGEMENT APPROACH 5 FUNDING STRATEGY 6 MACROECONOMIC OVERVIEW 7 MACROECONOMIC OUTLOOK 8 PRIVATE CONSUMPTION OVERVIEW 9 PRIVATE CONSUMPTION TRENDS 10 TYPICAL LEASE TERMS 11 GROUP STRUCTURE 12 BOARD OF DIRECTORS 13 INCOME PRODUCING PROPERTIES 16 DEVELOPMENTS UNDER CONSTRUCTION 39 SCHEDULE OF PROPERTIES 43 MANAGEMENT ACCOUNTS 44 NEW EUROPE PROPERTY INVESTMENTS PLC 2

3 z+3+15 z+2+17 Company profile INTEGRATED COMMERCIAL PROPERTY DEVELOPER, INVESTOR AND OPERATOR NEPI is a leading property investment and development group with a highly effective and skilled internal management team using an integrated approach by combining investment, development, asset management, property management, leasing and finance expertise. This results in the company and shareholders benefitting from development, property management, asset management, leasing and marketing. BUSINESS STRATEGY Continued above industry growth in recurring distribution per share by: - Expanding the investment property portfolio via developing, extending, redeveloping and acquiring dominant or potentially dominant retail assets in emerging European markets with high consumption growth potential; - Extracting additional revenue from retail assets via active asset management; - Active re-positioning of portfolio by disposing of non-core and lower growth assets when opportune, and - Benefitting from optimal funding costs due to continued increase in scale. PROPERTY PORTFOLIO Exceptional property portfolio and development pipeline in Romania, Slovakia, and Serbia, progressing with a retail expansion program in other emerging European retail markets, that generates earnings from long-term, triple net leases in Euro with strong corporate covenants. LISTINGS the Main Board of the Johannesburg Stock Exchange (JSE) the regulated market of the Bucharest Stock Exchange (BVB) the Alternative Investment Market (AIM) of the London Stock Exchange (LSE) The shares are transferable among the three registers. The JSE is the most liquid in terms of share trading of the three stock exchanges where NEPI is listed. DISTRIBUTIONS Voluntary, semi-annual distribution of the recurring direct result, with a scrip dividend election option. INVESTMENT PROPERTY OVERVIEW AS AT 30 SEPTEMBER 2015 Weighted Valuation m Weighted Passing rent/erv m Number GLA '000m 2 Occupancy % TOTAL PROPERTIES INCOME PRODUCING Retail Office Industrial DEVELOPMENTS Under construction Under permitting and pre-leasing Land bank 28 NON-CORE by rental income 100% million GEOGRAPHICAL PROFILE SECTORAL PROFILE 100% million 81+ by rental income Romania 82% 96.7 million Retail 81% 95.8 million Slovakia 15% 18.1 million Office 17% 20.6 million Serbia 3% 3.4 million Industrial 2% 1.8 million NEW EUROPE PROPERTY INVESTMENTS PLC 1

4 Track record 120 NET OPERATING INCOME ( m) INVESTMENT PROPERTY ( m) 5 ADJUSTED NAV PER SHARE ( ) Sep Sep Sep 2015 Annualised net operating income MARKET CAPITALISATION ( b) SHARE PRICE ( ) DISTRIBUTION PER SHARE (euro cents) % % % % % % Oct Oct % Share price Share price with dividend reinvested June December Compound annual growth rate (%) NEW EUROPE PROPERTY INVESTMENTS PLC 2

5 Geographical focus The Group is focused on expanding its portfolio in Romania, Slovakia, Serbia and gradually into other CEE countries (which are recent or potential candidates to EU membership) through acquisition or development of dominant or potentially dominant regional retail assets that meet its investment criteria. The establishment of scale and strong local management teams are essential to NEPI s presence in these countries. ROMANIA With 11 existing regional malls and 9 value centres, the Group is the largest owner of retail space in the country. The Group also opportunistically invests in A-grade office buildings in cities with high multinational tenant demand. CEE REGION ESTONIA LATVIA LITHUANIA SLOVAKIA After the 2013 acquisition of a dominant regional mall and the establishment of a strong local management team, the Group further extended in 2014 through the acquisition of three properties in one transaction. The Group currently owns two regional malls, one office building and land for the development of a retail or mixed use scheme. The Group will continue to strengthen its presence in Slovakia through further acquisitions of retail assets. CZECH REPUBLIC POLAND SLOVAKIA SERBIA The Group acquired its first Serbian mall in The country is underdeveloped in terms of retail offering and the Group is considering to gradually build up a portfolio of dominant regional retail centres. SLOVENIA CROATIA HUNGARY ROMANIA BOSNIA AND SERBIA HERZEGOVINA MONTENEGRO BULGARIA KOSOVO MACEDONIA ALBANIA EU Member Countries Candidate and Potential Candidate to EU Membership NEW EUROPE PROPERTY INVESTMENTS PLC 3

6 Investment criteria The Group is focused on expanding its portfolio of dominant regional retail assets and selectively invests in A-grade office buildings. Investment decisions are forward looking and sustainable income growth is the primary focus. DOMINANT RETAIL ASSETS Retail assets must be or have the potential to be dominant. Size is critical to achieve comprehensive offering and tenant mix (large proportion of food and fashion anchors with a substantial leisure offering). Good location, access, visibility, design, specifications and potential for extension reduce the threat of significant future competition. Professional active management of such properties creates significant and valuable growth opportunities. A-GRADE OFFICE BUILDINGS Offices must have a central location, excellent access to public transport, up-to-date technical specifications, large floor areas, high efficiency rates and high parking ratios. As management of office properties has limited potential for value creation, investments are made opportunistically in cases where high initial yields are achievable and the assets will be disposed of in time. DEVELOPMENTS NEPI currently limits its development commitments to low-risk development, redevelopment and extension opportunities in Romania (where it is the largest owner of retail space and has unparalleled knowledge of the market) in a non-speculative phased manner (construction costs are committed to on a gradual basis following the achievement of pre-leasing targets agreed by the Board and are limited to the availability of internal sources of financing). MEGA MALL, BUCHAREST THE OFFICE, CLUJ-NAPOCA SHOPPING CITY TIMISOARA NEW EUROPE PROPERTY INVESTMENTS PLC 4

7 Management approach NEPI is internally managed combining investment, development, asset and property management, leasing, accounting and finance expertise in an integrated approach. The team includes more than 250 professionals. Unparalleled knowledge of the Romanian retail market and outstanding execution and operational excellence illustrated by a number of best-in-class indicators, including standards of property management, financial reporting timetables, historically consistent low receivable balances, non-collection ratios and vacancy rates. Strong corporate culture focused on planning, quality of execution, sustainability, ethics and early risk assessment. World-class experience of Board members (non-executive directors hold executive positions in large listed companies, while Investment Committee members have in excess of 70 years of combined experience). Strong long-term alignment of interests between management and shareholders achieved through a substantial shareholding in the business. OCCUPANCY RATE (%) COLLECTION RATE (%) 100% 94.8% 98.2% 94.7% 95.2% 97.7% 98.2% 97.8% 100% 99.5% 98.1% 97.4% 99.8% 99.9% 99.8% 99.5% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Sep % Sep 2015 NEW EUROPE PROPERTY INVESTMENTS PLC 5

8 Funding strategy EQUITY The Company has a proven track record of raising equity in the capital markets and has developed a strong following amongst institutional and private shareholders in addition to the continued support received from strategic shareholders. The JSE is the main equity market for NEPI and the Company is included in relevant JSE indices. EQUITY RAISED ( m) NUMBER OF SHAREHOLDERS SHARES TRADED (m) Oct Sep Sep 2015 DEBT Long-term debt strategy is to fund assets with 30% debt on an LTV basis (capped at 35%) and diversify financing sources to optimise cost of debt. Current gearing is 21.7%. NEPI aims at maintaining an adequate liquidity profile and optimising its cost of debt. Investment grade credit ratings of Baa3 (stable outlook) and BBB- (stable outlook) were received from Moody s and Standard & Poors in October % LEVERAGE PROFILE* 200 DEBT MATURITY PROFILE ( m) 200 CASH AND SECURITIES ( m) 80% % 40% % Sep Sep 2015 * (loans cash)/(investment property + listed securities) Secured debt Unsecured RCF Unsecured term loan Cash and cash equivalents Unused revolving facilities Listed securities NEW EUROPE PROPERTY INVESTMENTS PLC 6

9 Macroeconomic overview GDP per capita ( ) Serbia Romania Slovakia Average annual gross wages ( ) Serbia Romania Slovakia Number of employees ('000) Serbia Romania Slovakia Sources: European Commission s Directorate General for Economic and Financial Affairs, National Statistical Offices, Thomson Reuters NEW EUROPE PROPERTY INVESTMENTS PLC 7

10 Macroeconomic outlook ROMANIA SLOVAKIA SERBIA 2014* * * Real GDP growth (%) (1.8) (0.2) General gov. budget balance (% of GDP) (1.9) (2.3) (2.5) (2.4) (2.2) (2.0) (2.9) (2.5) (2.3) (2.2) (2.1) (2.0) (7.0) (5.0) (4.2) (3.7) (3.3) (2.7) General gov. debt (% of GDP) Unemployment (%) Price inflation (%) (EU harmonised) (0.1) Credit rating Moody s S&P Fitch Baa3 stable BBB- stable BBB- stable A2 stable A+ stable A+ stable B1 stable BB- negative B+ stable * Actual figures Sources: Economist Intelligence Unit, IMF, Thomson Reuters NEW EUROPE PROPERTY INVESTMENTS PLC 8

11 Private consumption overview CEE BY NATIONAL PRIVATE CONSUMPTION (2014 BASE) 120% 100% Serbia 25bn 10-year forecasted growth 80% 60% 40% Bulgaria 26bn Romania 94bn Hungary 52bn Croatia 26bn Poland 248bn Czech Republic 75bn Baltic countries 48bn Slovakia 43bn Slovenia 20bn 20% EU private consumption/year/capita Source: Eurostat, Thomson Reuters, Oxford Economics NEW EUROPE PROPERTY INVESTMENTS PLC 9

12 Private consumption trends 60% 50% CONVERGENCE WITH REST OF EU Private consumption as % of EU15 average 54.3% 40% 30% 32.5% 20% 27.4% 24.3% 10% % 10.5% Romania Serbia Slovakia 250% STRONG GROWTH TO CONTINUE Estimated private consumption growth 200% 223.4% 169.7% 150% 100% 96% 50% Romania Serbia Slovakia NEW EUROPE PROPERTY INVESTMENTS PLC 10

13 Typical lease terms RENT Office tenants pay a base rent, while a large portion of retail tenants have an obligation to report turnovers and pay the higher between a base rent and a turnover rent. Top 10 Retail Tenants Annual rent Top 10 Office Tenants Annual rent TRIPLE-NET LEASES Taxes, insurance, property management fees, utility costs and common area costs are recovered from tenants. CURRENCY Leases negotiated in EUR; in Romania, rent is invoiced in local currency equivalent and currency differences between invoice date and collection date are recovered from tenants. TERM TO FIRST BREAK OPTION Ten years for hypermarkets, DIYs and cinemas, and five years for other tenants. INDEXATION Rent and marketing charges are adjusted annually in line with EU inflation. GUARANTEES Equivalent to three months rent, service charge and VAT; parent company guarantee required for some office tenants. Auchan 8.6% Carrefour 6.0% H&M 2.6% Inditex Group 2.2% C&A 1.8% Kingfisher 1.7% Altex 1.3% New Yorker 1.3% Deichmann 1.2% Metro Cash&Carry 1.0% 27.7% PricewaterhouseCoopers 1.7% Wipro 1.6% Huawei 1.1% Alcatel-Lucent 0.6% Holcim 0.5% Regus 0.4% Visma 0.4% Lenovo 0.4% L Oreal 0.4% Novartis 0.4% 7.5% NEW EUROPE PROPERTY INVESTMENTS PLC 11

14 Group structure outline SHAREHOLDERS 100% NEW EUROPE PROPERTY INVESTMENTS PLC ISLE OF MAN 100% NE PROPERTY COOPERATIEF UA THE NETHERLANDS 100% 100% 100% Management company Property-owning companies ROMANIA Management company Property-owning companies SLOVAKIA Management company Property-owning companies SERBIA NEW EUROPE PROPERTY INVESTMENTS PLC 12

15 Board of Directors BALANCED BOARD STRUCTURE: majority of Independent Non-executive Directors. WORLD CLASS EXPERIENCE: property management, retail, finance, accounting, legal and administration of listed companies. DIRECTORS BOARD AUDIT COMMITEE INVESTMENT COMMITEE NOMINATION COMMITEE REMUNERATION COMMITEE RISK COMMITEE Alex Morar Chief Executive Officer Member Mirela Covasa Finance Director Member Tiberiu Smaranda Executive Director Dan Pascariu Chair Independent Non-executive Chair Member Desmond De Beer Independent Non-executive Chair Member Dewald Joubert Independent Non-executive Member Chair Jeffrey Zidel Independent Non-executive Member Member Member Michael Mills Independent Non-executive Chair Member Member Nevenka Pergar Independent Non-executive Chair MEETINGS PER YEAR At least four At least four As required As required At least one As required MAIN FUNCTIONS Approves and monitors: strategic plans, investments, capex, disposals, funding, financial statements, business performance, effectiveness of internal controls Reviews: accounting policies, financial statements, internal controls Assesses: investments, capex, disposals Recommends: qualified individuals, composition of the Board Recommends: remuneration for Directors and executive management Develops and monitors: risk management policies and their implementation NEW EUROPE PROPERTY INVESTMENTS PLC 13

16 Executive Directors ALEX MORAR Chief Executive Officer Appointed as Director on 25 September 2013 and as CEO on 7 August 2015 BSc Alex Morar graduated with a dual degree in finance and information systems from Stern School of Business, New York University. He began his career as an analyst at Julius Baer Investment Bank. He later joined the financial advisory practice of Deloitte Romania where he spent two years working on an energy-related project as well as M&A transactions. He joined NEPI upon its founding in 2007 and has contributed to all aspects of the business since then, being recently focused on the investments and acquisitions programme, with a view to expanding NEPI s portfolio throughout the Central Eastern Europe region. He was appointed CEO in August MIRELA COVASA Finance Director Appointed on 10 February 2015 BCom, ACCA, CAFR Mirela Covasa graduated with a finance degree from Bucharest Academy of Economic Studies and is a member of the Association of Chartered Certified Accountants (ACCA) and Chamber of Financial Auditors of Romania (CAFR). Prior to working for NEPI, she was senior manager at PricewaterhouseCoopers, where she spent eight years performing audit assignments in Romania, Slovenia and India. She has worked in accounting and auditing for thirteen years. Ms Covasa joined NEPI in February 2012 and is currently responsible for the financial management of the Company. TIBERIU SMARANDA Executive Director Appointed on 25 September 2013 BA Tiberiu Smaranda graduated with a degree in management and marketing. He started his career at Flamingo Group (Flanco), one of Romania s leading electronics and white goods retailers, where he was involved in retail management, development and expansion for nearly eight years, and was responsible for the company s expansion into Bulgaria, Croatia, Hungary, Macedonia, Moldova and Serbia. He joined NEPI in 2009 as Leasing Manager, and is currently responsible for leasing, retail developments, asset management and keytenants relationship. NEW EUROPE PROPERTY INVESTMENTS PLC 14

17 Non-executive Directors DAN PASCARIU Independent Non-executive Chairman Appointed on 30 March 2009 MBA DESMOND DE BEER Independent Non-executive Director Appointed on 21 October 2008 BProc, MAP DEWALD JOUBERT Independent Non-Executive Director Appointed 23 Jul 2007 BCom, LLB, Adv Cert Tax Dan Pascariu is a prominent figure in Romanian banking. His career started at the Romanian Bank for Foreign Trade in 1973, where he held the position of Chairman and CEO. Mr Pascariu is a non-executive Chairman of the Supervisory Board of Unicredit Bank, Romania. The founder and first President of the Romanian Banking Association, as well as a co-founder and associate professor at the Romanian Banking Institute, Mr Pascariu is currently on the board of directors at various financial institutions in Romania and abroad. Desmond de Beer has significant experience in property investment and management. He spent several years in the banking industry, first at Barclays Bank, South Africa, where he was Bond Manager at the Barclays Trust. Subsequently, he was appointed General Manager, Corporate Equity and became a member of the Executive Committee at Nedcor Investment Bank. Since 2002, Mr de Beer is the Managing Director of Resilient Property Income Fund, listed on the JSE. Dewald Joubert has extensive experience in international tax planning for corporations, transaction structuring and corporate governance. Formerly a lawyer, his professional career began with Arthur Andersen South Africa, and was subsequently appointed partner at the Maitland Group, Isle of Man. Mr Joubert is joint managing director of a private equity group and independent non-executive director on the boards of various listed companies and significant subsidiaries of listed multinational businesses, such as the investment holding structure of the Oppenheimer Family Business, Anglo Gold Ashanti and Nampak. JEFFREY ZIDEL Independent Non-Executive Director Appointed 11 Nov 2009 Jeffrey Zidel is a successful property developer and investor, and has been involved in many aspects of the property industry for over 40 years. He is currently the Chairman of Fortress Income Fund, and was one of the co-founders of Resilient Property Income Fund. Mr Zidel is Vice President of the South African Council of Shopping Centres and director of the South African Property Owners Association. MICHAEL MILLS Independent Non-Executive Director Appointed 13 Aug 2007 BSc, FCA Michael Mills is experienced public company chairman and managing director with significant operating and financial experience across a range of sectors, including technology, engineering, service and distribution, paper and packaging, food and textiles. A chartered accountant, he has held senior financial roles in a number of multinational companies, a private equity house and held lead roles in restructuring, and refinancing listed companies. His recent experience includes Chairman or CEO roles on the boards of UK listed companies operating in the finance sector, software development, healthcare services and manufacturing and a US based distribution business. NEVENKA PERGAR Independent Non-Executive Director Appointed 10 Feb 2015 LLB, MBA Nevenka Pergar is the owner and director of NP Consulting, an independent advisory company that offers legal and business consultancy, mainly to foreign investors in Slovenia. She also acts as a local partner of PwC Czech Republic. Ms Pergar has acquired a wide experience in public services serving in Slovenia s Ministry of Economy and she was member of two Slovenian governments, first as a Secretary General of the Government and then as a Junior Minister for Public Administration. She is currently a member of AmCham and The Managers Association of Slovenia. NEW EUROPE PROPERTY INVESTMENTS PLC 15

18 Income-producing properties 17 RETAIL ROMANIA Slovakia Romania 14 1 Mega Mall 2 Promenada Mall 3 Iris Titan Shopping Center 4 City Park 5 Braila Mall 6 Shopping City Deva 7 Vulcan Value Centre 8 Shopping City Galati 9 Pitesti Retail Park 10 Ploiesti Shopping City 11 Shopping City Targu Jiu 12 Severin Shopping Center 13 Aurora Shopping Mall 14 Regional value centres OFFICE SERBIA 15 Kragujevac Plaza SLOVAKIA 16 Aupark Kosice Mall 17 Aupark Zilina ROMANIA 1 Floreasca Business Park 2 The Lakeview 3 City Business Centre 4 The Office Phase I SLOVAKIA 5 Aupark Kosice Tower Serbia INDUSTRIAL ROMANIA 1 Rasnov Industrial Facility 2 Otopeni Warehouse NEW EUROPE PROPERTY INVESTMENTS PLC 16

19 Mega Mall INCOME-PRODUCING PROPERTIES Mega Mall has a unique tenant mix and is home to over 200 tenants, including a number of flagship stores. The mall has a significant entertainment and leisure offering, including a 14-screen Cinema City, which also features the first 4DX auditorium in Romania, a World Class gym with a semi-olympic swimming pool, and m 2 of fast-food and sit-down restaurants. RETAIL Ownership 70% Type Mall Year opened 2015 Lettable area m 2 Property value million Passing rent 17.2 million Occupancy 98.7% Hypermarket Carrefour Fashion & Sport Adidas, Aldo, Bata, Benvenuti, Bershka, C&A, CCC, Claire s, Colin s, Cropp, Deichmann, Ecco, Folli Follie, Geox, H&M, Hervis, Hilfiger Denim, House, Intersport, Kenvelo, Koton, LC Waikiki, Lee Cooper, Levi s, Mango, Marks&Spencer, Mohito, Musette, New Yorker, Nike, Office Shoes, Orsay, Otter, Pandora, Peek&Cloppenburg, Pull&Bear, Reserved, Sinsay, Sport Vision, Stefanel, Steilmann, Stradivarius, Swarovski, Takko, Tom Tailor, Triumph, Zara Flanco, Media Galaxy, Samsung Health & beauty dm, Douglas, MAC, Pupa, Sabon, Sephora, Yves Rocher DIY & Home decor English Home, Lem's, Nobila Casa Food Brioche Dorée, KFC, Manufaktura by Doncafé, Paul, Pizza Dominium, Pizza Hut, Subway Entertainment 4DX cinema, bowling, casino, gym, playground, sports bar, swimming pool Other Lego, Maxi Toys, Next, Noriel Catchment area (within 30-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Shopping City Baneasa m 2 Sun Plaza m 2 Afi Palace Cotroceni m 2 Major businesses in the region Professional & financial services Property & construction Local Universities Romania's largest educational centre (35 universities) *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 17

20 Promenada Mall INCOME-PRODUCING PROPERTIES RETAIL Promenada Mall is situated in Bucharest s new central business district, near NEPI s Floreasca Business Park and The Lakeview. The Group plans to extend this mall with m 2 gross leasable area of mixed-use fashion, leisure, entertainment and office space. Ownership 100% Type Year opened/acquired 2013/2014 Lettable area m 2 Property value Passing rent Mall million 10 million Occupancy 98.0% Supermarket Fashion Food Health & beauty Entertainment Billa Adidas, Bershka, BSB, C&A, Calzedonia, Colin s, Deichmann, H&M, Hervis, Humanic, Intersport, Lacoste, Massimo Dutti, Musette, Oysho, Pandora, Peek&Cloppenburg, Promod, Stefanel, Stradivarius, Tommy Hilfiger, Triumph, US Polo Assn., Zara Altex, Flanco,iCentre Chopstix, KFC, McDonalds, Paul, Pizza Hut dm, Douglas, MAC, Pupa, Sephora, Yves Rocher billiard, bowling, casino, fitness Catchment area (within 15-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Shopping City Baneasa m 2 Afi Palace Cotroceni m 2 Major businesses in the region Local Universities Professional and financial services Property & construction Romania's largest educational centre (35 universities) *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 18

21 Aupark Kosice Mall INCOME-PRODUCING PROPERTIES RETAIL Aupark Kosice Mall is located on the southern side of the main shopping street, in the city centre of Kosice, the second largest city in Slovakia. The mall was completed in November 2011 and comprises three levels, providing a wide retail offering, complemented with leisure and a food court area. Ownership 100% Type Regional mall Year opened/acquired 2011/2014 Lettable area m 2 Property value Passing rent million 9.1 million Occupancy 95.0% Supermarket Fashion Health & beauty Entertainment Billa Bata, C&A, Calzedonia, Deichmann, EXIsport, Gaastra, Geox, Guess, H&M, Intersport, Mango, Napapijiri, New Yorker, Nike, Office Shoes, Tom Tailor, Tommy Hilfiger, Trussadi, US Polo Assn. Datart, Lenovo, Samsung Beauty Shop, Marionnaud, Yves Rocher casino, gym Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Atrium Optima m 2 Galeria Kosice m 2 Cassovia m 2 Major businesses in the region Automotive Electronics Steel Local Universities Technical University of Kosice University of Pavol Josef Safarik University of Veterinary Medicine and Pharmacy *Source: Population Explorer, GfK, Statistical Office of the Slovak Republic NEW EUROPE PROPERTY INVESTMENTS PLC 19

22 Iris Titan Shopping Center INCOME-PRODUCING PROPERTIES RETAIL Iris Titan Shopping Center is located in the most densely populated district of Bucharest. The property is anchored by the first and largest Auchan hypermarket in Romania. Ownership 100% Type Mall Year opened/acquired 2008/2015 Lettable area m2 Property value 86 million Passing rent 7.9 million Occupancy 99.4% Hypermarket Auchan Fashion Adidas, C&A, CCC, Deichmann, H&M, New Yorker, Takko Domo, Flanco Food Pizza Hut Delivery, Subway Health & beauty dm, Kendra, Marionnaud Entertainment Cine Grand Catchment area (within 15-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Bucuresti Mall m 2 Major businesses in the region Local Universities Professional & financial services Property & construction Romania s largest educational centre (35 universities) *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 20

23 City Park INCOME-PRODUCING PROPERTIES RETAIL City Park mall has a prime location in Constanta, the fifth largest Romanian city, close to Mamaia, the country s most popular seaside resort. Once the m 2 extension is complete, the mall is expected to dominate the region. The first phase of the extension is complete, and Cinema City s ten-screen cinema, including Romania s second 4DX auditorium, opened in July The second phase is scheduled for completion by March Ownership 100% Type Regional mall Year opened/acquired 2008/2013 Lettable area m 2 Property value Passing rent 93.2 million 7.4 million Occupancy 99.1% Hypermarket Fashion Food Entertainment Cora Adidas, Bata, BSB, Benvenuti, Bershka, Columbia, Ecco, Guess, Koton, Lacoste, LC Waikiki, Mango, Marks&Spencer, Mothercare, Musette, Nike, Oysho, Pandora, Pull&Bear, Sport Vision, Stefanel, Stradivarius, Tom Tailor, US Polo Assn., Zara Domo KFC, McDonald s, Pizza Hut, Subway billiard, bowling, casino Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Maritimo Mall m 2 Tom Mall m 2 Tomis Mall m 2 Major businesses in the region Local University Shipping and naval Tourism Commerce and education Constanta Maritime University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 21

24 Aupark Zilina INCOME-PRODUCING PROPERTIES RETAIL This regional mall is located in the historic centre of Zilina (Slovakia), the capital of a region with residents. It is the best performing mall in the region, with the largest and widest retail offering, simple and efficient layout and high occupancy. Ownership 100% Type Regional mall Year opened/acquired 2010/2013 Lettable area m 2 Property value Passing rent million 7.2 million Occupancy 99.3% Supermarket Fashion Entertainment Billa C&A, Calzedonia, Camaieu, Deichmann, Ecco, EXIsport, Guess, H&M, Mango, New Yorker, Nike, Orsay, Takko, Tom Tailor, Tommy Hilfiger Datart, Orange, Slovak Telekom gym, playground Catchment area (within 30-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Mirage Shopping Center m 2 Max Zilina m 2 Major businesses in the region Local University Automotive Construction & transportation engineering Chemical University of Zilina *Source: Population Explorer, GfK, Statistical Office of the Slovak Republic NEW EUROPE PROPERTY INVESTMENTS PLC 22

25 Braila Mall INCOME-PRODUCING PROPERTIES RETAIL Braila Mall was acquired in 2009, and a subsequent three-phase redevelopment has resulted in a threefold footfall increase. With a diverse range of tenants, including a large entertainment and leisure area, this regional mall dominates Braila and Galati counties. Ownership 100% Type Regional mall Year opened/acquired 2008/2009 Lettable area m 2 Property value Passing rent 73.4 million 5.4 million Occupancy 98.2% Hypermarket Fashion DIY & Home decor Food Entertainment Carrefour Benvenutti, C&A, CCC, Deichmann, H&M, Hervis, Musette, New Yorker, Office Shoes, Orsay, Pepco, Reserved Kingfisher, Lems, Naturlich Altex, Flanco KFC, Segafredo billiard, bowling, cinema, ice skating Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Major businesses in the region Local University NEPI s Galati Shopping City Shipbuilding Agriculture and warehousing Metalworking Danubius University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 23

26 Shopping City Deva INCOME-PRODUCING PROPERTIES RETAIL This regional shopping center was acquired in 2013 and its extension of over m 2 GLA has been completed as planned, in September The extension includes fashion and entertainment facilities and secures the centre's dominance in the region. Ownership 100% Type Regional mall Year opened/acquired 2007/2013 Lettable area m 2 Property value Passing rent 62.3 million 5.6 million Occupancy 97.0% Hypermarket Fashion DIY & Home decor Health & Beauty Food Entertainment Auchan, Metro Cash&Carry Benvenuti, C&A, CCC, Deichmann, H&M, New Yorker, Orsay, Pepco, Takko Altex, Domo Jysk, Praktiker dm, Kendra, Sensiblu KFC, Spartan billiard, bowling, cinema Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Major businesses in the region Education No other modern value centre in the region Automotive Commerce Construction materials National gymnastics centre *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 24

27 Vulcan Value Centre INCOME-PRODUCING PROPERTIES RETAIL The Group completed the development of Vulcan Value Centre in September Due to its prime location in a densely populated area of Bucharest, tenant mix and convenient access to public transport, the centre has reported strong trading figures since opening, which was only nine months after obtaining the building permit. Ownership 100% Type Value centre Year opened/acquired 2014 Lettable area m 2 Property value 51.2 million Passing rent 3.7 million Occupancy 95.5% Hypermarket Carrefour Fashion C&A, CCC, Deichmann, H&M, Hervis, Penti, Takko Domo, Orange, Vodafone Health & Beauty dm, Marionnaud, Sensiblu DIY & Home decor Jysk, Lems Other Noriel Catchment area (within 30-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Major businesses in the region Local Universities No other modern value centre in the region Professional and financial services Property & construction Romania's largest educational centre (35 universities) *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 25

28 Shopping City Galati INCOME-PRODUCING PROPERTIES RETAIL This mall was developed in 2013, to complement NEPI s current retail offering in the Braila Galati region. It is the city s only modern mall and the Group owns sufficient land for a substantial extension. Ownership 100% Type Regional mall Year opened 2013 Lettable area m 2 Land available for extension m 2 Property value Passing rent 51.3 million 3.7 million Occupancy 97.6% Hypermarket Fashion Health & beauty Food Entertainment Carrefour Benvenuti, BSB, C&A, CCC, Deichmann, H&M, Intersport, New Yorker, Nike, Otter, US Polo Assn. Altex, Flanco dm, Kendra, Marionnaud, Yves Rocher KFC, Segafredo billiard, bowling, playground Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Major businesses in the region Local University NEPI s Braila Mall Iron & steel Shipping Dunarea de Jos University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 26

29 Pitesti Retail Park INCOME-PRODUCING PROPERTIES RETAIL This value centre is adjacent to the best performing hypermarket in Pitesti (sold by NEPI to Auchan in 2013). The centre has a number of value tenants, including a substantial furniture and home decor offering. Type Value centre Year opened/acquired 2007/2010 Lettable area m 2 Property value 41.7 million Passing rent 3.7 million Occupancy 100% Altex, Flanco DIY & Home decor Kingfisher, Jysk, Lems, Naturlich, Top Shop Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Jupiter City m 2 Euromall m 2 Major businesses in the region Local University Automotive Oil & Gas Winery University of Pitesti *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 27

30 Kragujevac Plaza INCOME-PRODUCING PROPERTIES RETAIL Kragujevac Plaza is Serbia s only mall outside the capital city. It is the Group s first Serbian acquisition, and will serve as a platform for prudent further expansion in the former Yugoslavia. Kragujevac Plaza opened in February 2012 and dominates the region. Ownership 100% Type Regional mall Year opened/acquired 2012/2014 Lettable area m 2 Property value Passing rent 39.4 million 3.4 million Occupancy 93.7% Supermarket Fashion DIY & Home decor Food Entertainment Idea Bata, C&A, Deichmann, New Yorker, Nike, Orsay, Sport Vision, Terranova, Tom Tailor Home Centre Asian Wok, McDonald's cinema, climbing wall, laser tag, playground Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Major businesses in the region Local University No other modern retail centre in the region Automotive Agriculture Commerce University of Kragujevac *Source: Population Explorer, GfK, Statistical Office of the Republic of Serbia NEW EUROPE PROPERTY INVESTMENTS PLC 28

31 Ploiesti Shopping City INCOME-PRODUCING PROPERTIES RETAIL This is the dominant mall in Prahova, a region with residents. A smaller competing mall was developed and opened in late This development had no impact on trading levels of Ploiesti Shopping City, which continues its upward trend in trading densities since opening. Ownership 50% Type Regional mall Year opened 2012 Lettable area m 2 Lettable area weighted by ownership m 2 Land available for extension m 2 Property value weighted by ownership Passing rent weighted by ownership 40.9 million 3 million Occupancy 98.8% Hypermarket Fashion Food Health & beauty Entertainment Carrefour Bershka, CCC, Colin s, Deichmann, H&M, Intersport, Koton, LC Waikiki, New Yorker, Orsay, Pull&Bear, Stradivarius, Takko, Zara Altex, Domo, Flanco Chopstix, KFC, Paul, Pizza Hut Douglas, Kendra, Marionnaud, Sabon, Sephora, Yves Rocher billiard, bowling, casino, cinema, climbing wall, ice skating, playground Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Competition Afi Palace Ploiesti m 2 Mall Ploiesti Centre m 2 Major businesses in the region Local Universities Oil production and refining FMCG Textile manufacturing centre Oil and Gas University George Baritiu University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 29

32 Shopping City Targu Jiu INCOME-PRODUCING PROPERTIES RETAIL The Group completed the development of this regional mall in Targu Jiu during 2014, within a year of the issuance of the building permit. The centre is located on one of the city s main roads in a densely populated district. Ownership 100% Type Regional mall Year opened/acquired 2014 Lettable area m 2 Property value Passing rent 38.9 million 3 million Occupancy 99.6% Hypermarket Fashion DIY & Home decor Health & Beauty Food Entertainment Carrefour Benvenuti, C&A, CCC, Deichmann, H&M, New Yorker, Orsay, Otter, Pepco, Takko Altex, Flanco Jysk dm, Kendra, Marionnaud, Sensiblu, Yves Rocher KFC, Spartan billiard, bowling, casino, cinema Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* 841 Competition Major businesses in the region Local University No other modern retail centre in the region Construction materials Mining Power generation Constantin Brancusi University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 30

33 Severin Shopping Center INCOME-PRODUCING PROPERTIES RETAIL This regional mall was acquired in It has no significant competition. Phase I of the planned 9 700m 2 GLA extension includes a six-screen cinema and was completed in October Ownership 100% Type Regional mall Year opened/acquired 2009/2013 Lettable area m 2 Property value Passing rent 19.8 million 1.5 million Occupancy 98.5% Hypermarket Fashion Health & Beauty Food Entertainment Carrefour Benvenuti, CCC, Deichmann, Lee Cooper, New Yorker, Orsay, Pepco, Takko Altex Kendra, Sensiblu KFC, Spartan billiard, bowling, cinema Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* 770 Competition Major businesses in the region Local University No other modern retail centre in the region Shipbuilding Wind farms & power generation Tourism Gheorghe Anghel University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 31

34 Aurora Shopping Mall INCOME-PRODUCING PROPERTIES RETAIL Aurora Shopping Mall is situated on the main boulevard of Buzau, Romania, a major transit hub for two of the country s main historical regions. NEPI plans to reconfigure and refurbish the mall, including building a cinema, improving the layout and tenant configuration. Ownership 100% Type Regional mall Year opened/acquired 2008/2014 Lettable area m 2 Property value Passing rent 7.5 million 1.5 million Occupancy 100% Hypermarket Fashion Health & Beauty Entertainment Carrefour Benvenuti, CCC, Deichmann, New Yorker, Orsay, Pepco Altex Kendra, Sensiblu bowling, billiard Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* 939 Competition GTC Galleria m 2 Major businesses in the region Local University Agriculture Automotive Tourism BioTerra University *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 32

35 Regional value centres INCOME-PRODUCING PROPERTIES RETAIL The Group owns a value centre in Brasov, adjacent to an existing Carrefour hypermarket. Five regional value centres, located in Alexandria, Petrosani, Sfantu Gheorghe, Sighisoara and Vaslui, all benefiting from adjacent Kaufland hypermarkets, were developed and opened during 2013 and 2014 by NEPI. In August 2014 NEPI acquired a seventh value centre in Alba Iulia. Type Regional value centre Year opened/acquired Lettable area m 2 Lettable area weighted by ownership m 2 Property value weighted by ownership 30.6 million Passing rent weighted by ownership 2.5 million Occupancy 100% Fashion Deichmann, New Yorker, Takko Altex, Domo DIY & Home decor Mobexpert Health & beauty dm Catchment area (within 45-minutes drive)* Purchasing power/inhabitant* Bank deposits/inhabitant* Major businesses in the region Local Universities Agriculture, Automotive Mining, Pharmaceutical Textiles, Tourism Valahia University (Alexandria) Transylvania University (Brasov) University of Petrosani (Petrosani) Spiru Haret University (Vaslui) *Source: Population Explorer, GfK, National Bank of Romania NEW EUROPE PROPERTY INVESTMENTS PLC 33

36 Floreasca Business Park INCOME-PRODUCING PROPERTIES OFFICE Floreasca Business Park is located in Bucharest s new central business district, in close proximity to NEPI s Promenada Mall and Lakeview office building. In recent years this area has seen significant development, including new A-grade offices, a shopping mall and infrastructure. Ownership 100% Type A-grade Year opened/acquired 2009/2010 Lettable area m 2 Property value Passing rent 102 million 7.4 million Occupancy 96.9% Electronics & Engineering Chemicals & Pharma Others Lenovo, Wipro Daikin, General Electric Berlin Chemie, BGP Products, Sandoz Colliers, DHL, Exxon Mobil, Federal Mogul, Goodyear, Holcim, L'Oreal, Mars, Regus, Royal Canin Bucharest is the largest business centre in Romania, hosting well-known national and international companies. Population Inhabitants with ages between Number of students Number of universities 35 Main universities University of Bucharest, Academy of Economic Studies Carol Davila University of Medicine and Pharmacy Polytechnic University Major businesses in the region Professional and financial services Property & construction Languages English, French, German, Greek, Hungarian, Italian, Russian, Spanish Transportation bus, trolleybus, tram, metro Airports Henri Coanda International Airport Aurel Vlaicu International Airport Rail stations 6 Modern office stock (A & B grade) 3.33 million m 2 NEW EUROPE PROPERTY INVESTMENTS PLC 34

37 The Lakeview INCOME-PRODUCING PROPERTIES OFFICE This A-grade office building was acquired in It is located close to Floreasca Business Park and Promenada Mall in Bucharest's new central business district. Ownership 100% Type A-grade Year opened/acquired 2010/2013 Lettable area m 2 Property value Passing rent 67.1 million 5.1 million Occupancy 100% Professional services Pharma Others PricewaterhouseCoopers Huawei, Philips Alcon, Abbvie, Novartis LeasePlan Bucharest is the largest business centre in Romania, hosting well-known national and international companies. Population Inhabitants with ages between Number of students Number of universities 35 Main universities University of Bucharest Academy of Economic Studies Carol Davila University of Medicine and Pharmacy Polytechnic University Major businesses in the region Professional and financial services Property & construction Languages English, French, German, Greek, Hungarian, Italian, Russian, Spanish Transportation Bus, trolleybus, tram, metro Airports Henri Coanda International Airport Aurel Vlaicu International Airport Rail stations 6 Modern office stock (A & B grade) 3.33 million m 2 NEW EUROPE PROPERTY INVESTMENTS PLC 35

38 City Business Centre INCOME-PRODUCING PROPERTIES OFFICE City Business Centre is the largest A-grade office building in Timisoara, the third largest city in Romania. It comprises three complete office buildings and a forward purchase agreement is in place for the two adjacent buildings. Ownership 100% Type A-grade Year opened/acquired 2007/2012 Lettable area m 2 Property value Passing rent 57.1 million 4.7 million Occupancy 98.3% Professional services Financial services Accenture, Deloitte, NNDKP, 3Pillar Global Alcatel-Lucent, EBS, IBM, Toluna, Visma, Wipro Generali, Raiffeisen Bank, UniCredit Tiriac Bank Timisoara is the third largest business centre in Romania, hosting international and services companies. Population Inhabitants with ages between Number of students Number of universities 8 Main universities Polytechnic University West University Major businesses in the region Automotive FMCG Languages English, French, German, Hungarian, Serbian Transportation bus, trolleybus, tram Airports Traian Vuia International Airport Rail stations 4 Modern office stock (A & B grade) m 2 NEW EUROPE PROPERTY INVESTMENTS PLC 36

39 The Office INCOME-PRODUCING PROPERTIES OFFICE During 2014, the Group completed Phase I of The Office in Cluj-Napoca, the city s first A-grade office development. Phase II is under construction and is scheduled for opening in December Ownership 50% Type A-grade Year opened/acquired (Phase I) 2014 Lettable area (Phase I) m 2 Lettable area weighted by ownership (Phase I) m 2 Property value weighted by ownership (Phase I) Passing rent weighted by ownership (Phase I) 20.7 million 1.6 million Occupancy (Phase I) 96.5% 3Pillar Global, Lohika Systems, Yardi Professional services COS, Deloitte, Ernst&Young, Wolters Kluwer Tourism Others TUI Betfair, Bombardier, Bosch, National Instruments, Yonder Planned extension (Phase II & Phase III) m 2 Cluj-Napoca is the second largest business centre in Romania, hosting well-known national and international companies, operating mainly in the sector. Population Inhabitants with ages between Number of students Number of universities 12 Main universities Babes-Bolyai University Technnical University Major businesses in the region Manufacturing Pharmaceutical Languages English, French, German, Hungarian Transportation bus, trolleybus, tram Airports Avram Iancu International Airport Rail stations 3 Modern office stock (A & B grade) m 2 NEW EUROPE PROPERTY INVESTMENTS PLC 37

40 Aupark Kosice Tower INCOME-PRODUCING PROPERTIES OFFICE Aupark Kosice Tower is a ten-storey office building, connected to Kosice Mall. The building is adjacent to the main road connecting the centre with the city s international airport, on the south side of Kosice s main shopping street. Ownership 100% Type A-grade Year opened/acquired 2012/2014 Lettable area m 2 Property value 20.1 million Passing rent 1.8 million Ocuppancy 100% Eset, IBM Professional services PricewaterhouseCoopers Others GTS, Holcim Population Inhabitants with ages between Number of students Number of universities 3 Main universities Major businesses in the region Languages Transportation Airports Technical University of Kosice University of Pavol Josef Safarik University of Veterinary Medicine and Pharmacy Automotive Electronics Steel English, German, Hungarian Bus, trolleybus, tram Kosice International Airport Rail stations 2 Modern office stock (A & B grade) m 2 NEW EUROPE PROPERTY INVESTMENTS PLC 38

41 Developments 3 SATU MARE DEVELOPMENTS UNDER CONSTRUCTION Shopping City Timisoara CLUJ-NAPOCA PIATRA NEAMT 2. City Park extension - Phase II 3. Severin Shopping Center extension 4. Victoriei Office 5. The Office Phase II 1 TIMISOARA DEVELOPMENTS UNDER PERMITTING AND PRE-LEASING 1. Promenada Mall extension 2. Shopping City Piatra Neamt 3 SEVERIN 4 1 BUCHAREST 2 CONSTANTA 3. Shopping City Satu Mare 4. The Office Phase III NEW EUROPE PROPERTY INVESTMENTS PLC 39

42 Shopping City Timisoara DEVELOPMENTS UNDER CONSTRUCTION RETAIL The Group is developing a regional mall in two phases on an 18ha plot in Timisoara, located in a densely populated residential area. Construction of Phase I, including a Carrefour hypermarket, various fashion anchors and extensive modern entertainment and leisure facilities, commenced in December The Carrefour hypermarket and gallery are planned to open in Q4 2015, while the fashion and entertainment section is scheduled for opening in Q RENDER Ownership 100% Type Regional mall Lettable area (Phase I) m 2 Estimated rental value 7.6 million Opening date (targeted) Q4 2015/Q City Park extension RENDER The first phase of the extension is complete, and Cinema City s ten-screen cinema, including Romania s second 4DX auditorium, opened in July The second phase is scheduled for completion by April Once the m 2 extension is complete, the mall is expected to dominate the region. Ownership 100% Lettable area m 2 Estimated rental value 4 million Opening date - Phase II (targeted) Q NEW EUROPE PROPERTY INVESTMENTS PLC 40