Attractive shopping centres always good for business. Across Europe. In good hands at Union Investment.

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1 Attractive shopping centres always good for business. Across Europe. In good hands at Union Investment.

2 Our shopping centres are the number one in their catchment areas, offering our tenants the perfect platform for their business success. Our active management strategy covers every relevant aspect with the aim of enhancing the attractiveness of each centre and maximising its financial performance. In the interests of our investors and to the advantage of our tenants. Lars Richter Head of Asset Management Shopping Centres / Hotels, Union Investment 2

3 Geographic distribution of the shopping centre portfolio Sweden Properties: 1 Sisjo Entré, Gothenburg Netherlands Properties: 2 Twentec, Enschede De Klanderij, Enschede Belgium Properties: 3 Les Grand Prés, Mons K in Kortrijk Feest en Cultuurpaleis, Ostend France Properties: 3 Saint Martial, Limoges Centre Commercial Géant, Bordeaux Issy 3 Moulins, Paris Issy-les-Moulineaux Italy Properties: 4 Centro Commerciale Auchan di Monza, Monza Centro Commerciale Carrefour di Pavia, Pavia Casal Bertone, Rome Le Terrazze, La Spezia Spain Properties: 1 Área Sur, Jerez de la Frontera Poland Properties: 6 3 Stawy, Kattowitz Manufaktura, Łódź Focus Park, Rybnik Sarni Stok, Bielsko-Biala Riviera, Gdingen Ferio Konin, Konin Czech Republic Properties: 1 Palladium, Prague Austria Properties: 1 Bühl Center, Krems Turkey Properties: 4 Forum Kayseri, Kayseri Forum Mersin, Mersin Media Markt, Istanbul Media Markt, Izmir Shopping centres in Properties: 21 Fördepark, Flensburg Quer Passage, Kiel Sophienhof, Kiel MERCADO, Hamburg Geschäftshaus Ottensen, Hamburg Karstadt Wandsbek, Hamburg Wandsbek Quarrée, Hamburg Bethanien-Center, Neubrandenburg ALEXA, Berlin Spandau Arcaden, Berlin Limbecker Platz, Essen Rheinpark-Center, Neuss Köln Arcaden, Cologne Chinon-Center, Hofheim a. Taunus Europa-Galerie, Saarbrücken RHEIN-GALERIE, Ludwigshafen Das ES!, Esslingen Breisgau-Center, Freiburg LAGO, Constance StadtQuartier Riem Arcaden, Munich CityQuartier Fünf Höfe, Munich 3

4 Attuned to the market... Being a retailer involves embracing change and the speed of change is accelerating. From small, local shop owners to major chains, retailers constantly have to adapt their product and sales strategies to new social trends and changing demand. In turn, this creates new challenges for providers of retail space. Our daily experience shows us that megatrends such as Industry 4.0 and social, climatic and demographic change don t stop at the doors of our shopping centres. They all have a transformational impact. Anticipating such developments and recognising new opportunities is therefore critical. CityQuartier Fünf Höfe, Munich, Around 12 years ago, Union Investment was the first open-ended real estate fund provider in to identify the untapped potential in retail and set up its own expert team. We are now an established player in the European retail sector and have an unrivalled track record of managing these specialist properties. Active engagement and commitment We currently manage 47 shopping centres across eleven countries comprising total rental space of over 1.6 million sqm. Our portfolio includes smaller, local shopping centres, established retail parks and dominant shopping centres in major European cities, such as Alexa in Berlin, Manufaktura in Łódź and Palladium in Prague. Our malls are rooted in flourishing retail locations, always occupying prime, highly visible sites. Our specialised asset management team supports and directs the external centre managers. We work exclusively with leading operators, such as ECE, mfi / Unibail, Sonae Sierra, Multi Development and APSYS. Driven by shared objectives, we collaborate to boost the competitiveness of our shopping centres and ensure that they and our tenants achieve long-term success. We also actively support tenants who want to change and evolve. We adapt existing strategies, ensure a balanced tenant and sector mix and invest in modifications and expansions. That commitment includes routinely implementing major projects to ensure the viability of our shopping centres. In short: we operate with courage, competence and capital. That applies both to our Hamburgbased activities and our on-the-ground presence. 4

5 and at the cutting edge E-commerce is undeniably one of the biggest challenges of our times. But we are looking even further ahead. How will people be shopping two, five or ten years from now? What will drive them? Working with our retail partners and centre operators, we are already researching tomorrow s shopping trends today. Shopping is about more than just consumerism, which is why shopping centres need to be more than a collection of shops. They are destinations that must provide a high-quality user experience. The Internet has not changed that. E-commerce impacts and complements bricks-and-mortar retail, but does not displace it. Sales figures from 2015 underline this: our tenants and their 3,916 stores and more than 500 food outlets turned over approximately EUR 3.8 billion last year. We want that success to continue. Accordingly, we are fully committed to ensuring that our shopping centres remain vibrant, bustling marketplaces. Planning ahead to stay ahead We work with carefully selected management companies to research customer shopping habits both present-day and future. Where do customers look for information? How do they find goods and services? Which additional services would they like? Our results show that the Internet plays a role in a good 50 per cent of all purchases. Having said that, not all smart phone applications have (yet) been widely adopted or embraced by all customer groups. Other innovations, by contrast, have long been accepted by our shopping centre customers and are becoming increasingly popular: returns management via Click & Collect, the Easy to Park card for cashless payment of parking charges and the Selfie Photo Box customer loyalty tool, for example. We are also testing proprietary apps in selected shopping centres and have more digital projects in the pipeline. The high quality of our shopping centres is regularly recognised by industry experts. It remains a pleasure to receive prestigious awards from the International Council of Shopping Centers (ICSC) or the Shopping Center Report Deutschland, with the latter ranking LAGO in Constance in 1st place for the third year running. ALEXA, Berlin, 5

6 Applied expertise Our team has strong expertise in retail, real estate and capital markets. We enjoy a strong reputation in the industry for successfully repositioning existing shopping centres. The best example is the restructuring and revitalisation of the Sophienhof centre in Kiel. Dating from 1988 and located opposite Kiel s main station, we acquired the five-storey shopping centre for our retail fund UniImmo: Deutschland in early An extensive refurbishment plan was already in place. We worked with the external manager to develop this plan further and invested approximately EUR 25 million in various measures between mid-2012 and October 2013, including: creation of a food court relocation of the escalators enlargement of the storefronts introduction of a new signage system creation of customer service facilities new colour scheme, furniture and planting optimisation of the tenant and sector mix Sophienhof, Kiel, Sophienhof, Kiel, For many tenants, the long overdue restructuring acted as a catalyst for making improvements to their own stores. The remodelling which had to be carried out without closing the centre was thus a win-win situation for everyone. A market hall and ten new units were created, 24 new stores were opened, 22 tenants relocated within the shopping centre and seven existing units were completely refitted. The effort was worthwhile, Sophienhof has been given a new lease of life. It is now a vibrant mar- ketplace which benefits from optimum interaction between food court and market hall. These and other measures have shown that while as asset managers we cannot move mountains, but we can certainly move walls, storefronts and escalators. 6

7 Our shopping centre portfolio a snapshot Key figures for our shopping centre portfolio 47 existing shopping centres Current valuation: approx. EUR 7.6 bn No. of shops: approx. 3,900 No. of restaurants / food outlets: approx. 500 Net sales in 2015: EUR 3.8 bn Total rental space (existing shopping centres): approx million sqm Palladium, Prague, Czech Republic Alexa, Berlin, Limbecker Platz, Essen, Manufaktura, Łódź, Poland LAGO Center, Constance, 7

8 Your contacts Lars Richter Head of Asset Management Shopping Centres / Hotels Phone: lars.richter@union-investment.de Ralf Schaffuss Head of Asset Management Shopping Centres Phone: ralf.schaffuss@union-investment.de Jörg-Michael Zimmermann Head of Asset Management Shopping Centres International Phone: joerg-michael.zimmermann@ union-investment.de Robin Ahlers Kerstin Behm Norman Naehrig Phone: robin.ahlers@union-investment.de Phone: kerstin.behm@union-investment.de Phone: norman.naehrig@union-investment.de Simon Splittgerber Phone: simon.splittgerber@union-investment.de Katja Tiedemann Phone: katja.tiedemann@union-investment.de Kaan Aral Poland, Turkey kaan.aral@union-investment.de Carsten Freitag Belgium, France carsten.freitag@union-investment.de Claudia Gläser Italy Phone: claudia.glaeser@union-investment.de All information current at 30 June 2016 Union Investment Real Estate GmbH Valentinskamp 70 / EMPORIO Hamburg, Anne Högemann Holger Siedtmann Belgium, France, Czech Republic Phone: anne.hoegemann@union-investment.de Poland Phone: holger.siedtmann@union-investment.de