KWG KOMMUNALE WOHNEN AG

Transcription

1 KWG KOMMUNALE WOHNEN AG Company Presentation 01 September 2013

2 AGENDA 1 KWG Overview Sustainable success based on value enhancement 2 Company Efficient organization, ready for growth 3 Case Study Sustainable value management 4 Financials Half year results confirm profitable growth 2

3 1. KWG Overview Sustainable success based on value enhancement

4 1. KWG Overview Company profile KWG focus Portfolio overview 1. Excellent micro locations in Germany 2. Under-managed assets 3. Value enhancement potential 4. ROI sustainably > 8% = core portfolio = investment portfolio = Property Management Schleswig- Holstein Hamburg Bremen Lower Saxony Mecklenburg- West Pomerania Berlin Key figures H North Rhine- Westphalia Hesse Saxony -Anhalt Thuringia Brandenburg Saxony Revenue 22.5 m m m m. Net rental income 15.6 m m m m. Rhineland- Palatinate Saarland Property assets m m m m. FFO per share NNNAV per share Baden- Wurttemberg Bavaria 4

5 1. KWG Overview Real estate portfolio per KWG-Portfolio overview Total portfolio Lower Saxony Berlin Units: 9,477 Parking lots: 2,575 Lettable space: 591,901 m² North-Rhine Westfalia Units: 1,226 Parking lots: 355 Lettable space: 74,522 m² Saxony Units: 1,024 Parking lots: 32 Lettable space: 63,785 m² Thuringia Units: 4,691 Parking lots: 1,632 Lettable space: 319,920 m² Units: 1,868 Parking lots: 536 Lettable space: 99,195 m² Units: 668 Parking lots: - Lettable space: 34,479 m² 5

6 Units Vacancy rate 1. KWG Overview Track record in vacancy redution Vacancy reduction in increasing Core Portfolio Acquisition of 2,909 units per with a vacancy rate of 24% 20,0% 18,0% 16,0% KWG Zielsegment 14,0% 12,0% ,0% 8,0% 6,0% 4,0% 2,0% 0 01/09 05/09 09/09 01/10 05/10 09/10 01/11 05/11 09/11 01/12 05/12 09/12 01/13 05/13 0,0% Number of units (core portfolio) Vacancy rate (core portfolio) Number of units (total portfolio) Vacancy rate (total portfolio) 6

7 Return 1. KWG Overview Focused value enhancement Optimal balance between risks and opportunities Yield in large cities below average Medium-sized citis gain in importance KWG target-roi: sustainable more than 8% A-locations in B- und C-cities offer ROI > 8% Requirement: expertiese and experience in this sector B- und C-cities are KWG target regions since ,0% 9,0% 8,0% 7,0% 6,0% 5,0% Risks and opportunities comparison of residential real etstate Braunschweig Aachen Karlsruhe Bochum Magdeburg Kassel Dresden Erfurt Dortmund Nürnberg Potsdam Chemnitz KWG target segment Wuppertal Köln Hamburg München Hannover Berlin Frankfurt Lübeck As a specialist for B- and C-cities KWG achieves higher sustainbale operative returns than its compatitors. 4,0% 1,0 2,0 3,0 4,0 5,0 Risk factor KWG locations selected German residential real estate locations Source: TLG Immobilien Investitionschancen in deutschen Mittelstädten,

8 1. KWG Overview Value Drivers Four vital levers for profitable growth Profitable acquisitions sustainbale yield of > 8% assets specific vacancy focus on KWG-target regions 1. Acquisitionen 2. New tenancies Vacancy reduction aktives Asset-Management refurbishment of appartments Best in Class assets 4. Costs 3. Rent increases Efficient property management reduction of maintenance needs realisation of economies of scale strict recievables management Usage of rent increase potential modernisation allocation adjustments acc. to standard rents Quality premium 8

9 2. Company Lean organization, ready for growth

10 2. Company Structure of KWG group Corporate headquarter in Hamburg Holding of the KWG group (20 staff members) Management Board Purchasing Construction Management Asset- Management Investor- und Public Relations Administration Finance HR, Law, IT Operative subsidiaries Portfolio Management in Chemnitz, Glauchau and Hainichen (5 staff members) Portfolio Management in Berlin, Thuringia and Lower Saxony (28 staff members) Portfolio Management in North-Rhine-Westphalia (9 staff members) 10

11 2. Company Construction Management Organization Location Hamburg Refurbishment, modernisation Expenditures of refurbishment, modernisation and renovations (in /m²) Supervision Personell Uwe Lunk 3 Consulting Engineers (Hamburg) 5 Technical Engineers (Regional offices) ,47 4,65 28,00 6,41 3,39 3,77 20,52 9,56 7,43 10, modernsation and renovation refurbishment Tasks Location, examination and assessment of constructional risks Modeling and execution of concepts for refurbishment and modernization acc. to state development programs Determination of construction expenses based on midand long term investment forecasts Coordination, controlling and accounting of all construction activities by well-qualified staff members Business Approach / Perspectives Alignment of the portfolio management in close cooperation with asset management Establishment of KWG-Standards as a marketing instrument Expenses for the refurbishment and modernization decrease long-term portfolio costs Decreased expenses Ingenieure for the modernization and refurbishment underline increasing portfolio quality 11

12 2. Company Asset-Management Organization Development Core Portfolio Location Hamburg 5,20 5,00 7,0 % 6,4 % 8 6 Supervision Ivo Joachim Mokross 4,80 4,60 4,66 4,80 4,92 2,7 % 4 2 Personell two staff members 4, Ø net cold rent in EUR / qm vacancy rate in % Tasks Definition of all process flows in the Porperty Management Supervision, Controlling and Reporting Determination of budgeted rental income (market research) Determination of measures for vacancy reduction In coordination with construction management budget planning for: refurbishment, capital expenditures Milestones / Perspectives Inclease of net rental income FY 2011 to approx. EUR 15 Mio. (FY 2010: EUR 13.3 Mio.) Estimated annual rental income 2012 KWG exclusing the acquistion of BWAG: EUR 16.3 Mio. Considerable reduction of vacancy rate in Core Portfolio to less than two per cent in 2012 Decrease of average vacancy rate in total portfolio to applox. nine per cent in

13 2. Company Property-Management KWG Wohnwert Organization of Property-Management Administration of KWG Portfolio = managed units Location Supervision Personell Glauchau (central office) Kerstin Sahr Ivo Joachim Mokroß 19 staff members (Glauchau) 7 staff members (regional offices) = regional offices Hamburg Bremen Lower Saxony North- Rhine-Westphalia Schleswig- Holstein Mecklenburg- West Pomerania Saxony Anhalt Berlin Brandenburg Hesse Thuringia Saxony Rheinland- Pfalz Saarland Baden- Württemberg Bavaria 13

14 2. Company Property Management KWG Wohnwert Tasks Central Office Glauchau Invoicing of operating costs and creation of development plans Tendancy matters, invoice management Documentation of ongoing accounting receipts Receivables management and reporting Involvement in monthly and annual closing reports Close cooperation with regional offices Tasks Regional Offices Tasks of business object manager General tenant service Publication of letting advertisements Execution of tenancy agreement Letting and reporting Handing over of appartments and transfer Receivables management on site Assignment of small repairing measures Central office Regional offices Glauchau Bad Langensalza Berlin Braunschweig Bremen Celle Erfurt Hainichen Tasks of technical object manager Development, organization and controlling of refurbishment measures Development, assignment, controlling and handing over of construction and repairing measures Supervision of subcontractor services Costs- and quality control, warranty management Organizational aligment of all object related documents and continious inspection 14

15 2. Company Property-Management KWG Wohnwert Added value by internal Property Management* in % Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Net Cold Rent total Net Cold Rent in /m² * Lettings through subsidiary since January 2010 in k Vacancy in % (core portfolio) Management according to strict group standards Efficient incidentals accounting through continuous monitoring and amendment of contracts (Benchmarking) Direct Contact with tenants (tenant offices on location) Tightly knit claims management Administrative, technical und infra-structural Facility Management Cost savings through group-internal administration vs. outsourcing approx. 30 per cent Close co-operation with internal construction management Lettings through pro-active communication Significant reduction of vacancies Constant increase of rental income throughout years Relevant increase of Net Cold Rent due to new lettings No commission for agents Superior mix of tenants Fewer defaults Direct Contact with tenants and authorities Sales presence with uniform corporate design 15

16 3. Case Study Sustainable value management

17 3. Case Study Value management Veilchengrund, Celle (1/3) Key facts Object prior modernisation Year of construction 1963 Housing units 174 Commercial units 0 Housing area 13,062 m² Commercial area 0 m² Total area 13,062 m² Parking lots 0 Constructional measures core activities Object after modernisation Thermal insulation (roof, facade, basement roofs) Replacement of windows (roller blinds in first floor) Replacement of pitch roofs incl. dewatering Assembly of block heating works (LichtBlick) Apartment modernization KWG-Standard (125 units) 17

18 Net cold rent p.a. in Vacant rental units (RE) 3. Case Study Value management Veilchengrund, Celle (2/3) Portfolio development RU 77 RU 856, /m² 907, /m² , /m² 42 RU 376, /m² 430, /m² RU 5 RU Net cold rent p.a. Vacancy 18

19 3. Case Study Value management Veilchengrund, Celle (3/3) Construction costs Energy efficient modernization 4.3 mio. Apartment renovation (125 RU) 2.0 mio. Total 6.3 mio. Value development Purchase price 5.3 mio. NOI-Yiel (after purchase) 4.9 % Construction costs 6.3 mio. NOI-Yield (after modernization)* 6.3 % * lower refurbishment costs 31% 69% energy efficient modernization appartment renovation Increase of sustainable return by 28 per cent 19

20 4. Financials Half year results confirm profitable growth

21 4. Financials Successful Value Creation Development of key figures demonstrates operational success 12,7 m. Revenue NNNAV je Aktie LTV 22,5 m. 57,4 % 22,5 m. 12,7 m. +77% +77% -9% 52,4 % H H Income increase due to renovations and acquisitions Net cold rent H H Dynamic value- and cashgeneration development per share FFO per share Profitable growth at conservative debt levels Equity ratio 9,0 m. 15,6 m. 40,0 % 0,08 36,3 % +73% +136% +10% H H H H ,21 21

22 4. Financials Profit and Loss in Mio. H H Revenue Other operating income Costs of materials Staff costs Expenses related to investment properties Other expenses/income = EBITDA Depreciation and amortisation Income from the fair value measurement = EBIT Interest and similar expeses = EBT taxes = Net Profit for the Period

23 4. Financials Balance sheet Key Ratios Equity Ratio 40.0% 36.3% Loan-To-Value 52.4% 57.4% Real Estate value in per sqm ,1 Assets 45,3 Balance Sheet in mn Investment Property ,7 Other long-term assets 2.6 3,0 Long-term Assets, Total ,7 Cash & Cash equivalents ,3 Other short-term assets ,0 Short-term Assets, Total ,3 Equity, Total Long-term financial debt Other long-term liabilities Long-term Liabilities, Total Short-term financial debt Other short-term liabilities Short-term Liabilities, Total Total 442,7 473,0 230,8 427, non-current assets current assets Equity & Liabilities 36,0 114,0 112,8 184,9 90,1 174, Equity non-current borrowings current borrwoings 23

24 4. Financials Stable Financing Situation Key Figures Table of Banks Attribute Value Average nominal interest rate 3.94% Average annual amortisation (nominal) Total Financial Debt As per: June % mn. Refinancing requirements at end of fixed interest Comments 23% 5% 24% LBB DKB Pfandbriefbank NRW Bank 6% DG Hyp 23% Allianz 7% Micellaneous 12% As per: June 2013 * Miscellaneous: debt share each < 5% In mn. 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 fixed interest rate Ø: 8.1 years In the recent past loans have been refinanced at attractive conditions, thus reducing the average nominal interest rate. Debt financing consists almost exclusively of traditional German mortgage loans at fixed interest rates, with long durations and covenants relating to the specific assets only. Financing is being provided by a multitude of national and regional commercial banks. 24

25 Disclaimer The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to or discuss it with - any other person without KWG Kommunale Wohnen AG prior written permission. To the maximum extent permitted by applicable laws, KWG Kommunale Wohnen AG makes no representations and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no responsibility for, the authenticity, validity, Accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation. Certain statements may be made herein which use the words estimate, project, Intend, expect, believe and similar expressions intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the company to be materially different from those which may be expressed or implied by such statements, including, among others, risks or uncertainties associated with the company, the real estate market, government regulations in Germany, changes in tax and other laws, changes in competitions and the loss of key personnel. The Company believes that there is a significant likelihood that the Company and its subsidiaries will be classified as passive foreign investment companies ( PFICs ) for US federal income tax purposes. The tax rules generally applicable to PFICs are very complex, and, in some cases, uncertain and purchasing and owning Shares of the Company may subject you to unfavorable tax treatment under these rules. The Company does not intend to make available to holders of Shares the annual information statement currently required by the United States Internal Revenue Service top be used by United State Persons for purposes of complying with the reporting requirements applicable to United States making a Qualified Electing Fund election. Therefore, each United States Person is strongly urged to consult his, her or its own tax advisor with respect to the relevant tax rules. Neither this document not any copy of it may be taken or transmitted into the United States of America, its territories or possessions or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any US person, save to persons reasonably believed to be qualified institutional buyers ( QIBs ) (as defined Rule 144A under the US Securities Act of 1933 as amended ( Security Act )). Neither this document nor any copy of it may be taken or transmitted to Australia, Canada or Japan or to Canadian persons or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Canada, Australia or Japan and, subject to certain exceptions, may not be offered or sold within the United States Canada, Australia or Japan or to any national, resident or citizen of Canada, Australia or Japan. 25