Investors Presentation

Transcription

1 Investors Presentation June 2011

2 Disclaimer This document is not a prospectus. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. This presentation contains only partial and selective information and it is being supplied to you solely for your information. This presentation and its contents are confidential and may not be further copied, distributed or passed on to any other person or published or reproduced directly or indirectly, in whole or in part, by any medium or in any form for any purpose. The information contained in this presentation must be kept confidential and must not be used for any other purpose. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose, and it is intended for distribution in the United Kingdom only to and is directed only at: (i) persons who have professional experience in matters relating to investments falling within the definition of investment professionals in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ); or (ii) persons falling within Article 49(2)(a) to (d) of the Order; or (iii) to those persons to whom it can otherwise lawfully be distributed (all such persons together being referred to as relevant persons ). This document must not be acted upon by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. This presentation has been prepared by Plaza Centers N.V. (the Company ) solely for its use at the presentation to investors to be made during The Company is not obliged in any way to release and/or update this presentation following its publication. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. The information in this presentation is given in confidence and the recipients of this presentation should not base any behavior in relation to qualifying investments or relevant products (as defined in Financial Services and Markets Act 2000 (as amended) ( FSMA ) and the Code of Market Conduct (made pursuant to FSMA) which would amount to market abuse for the purposes of FSMA on the information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any way which would constitute market abuse. This presentation has been prepared by, and is the sole responsibility and property of, the Company. The information set out herein has not been verified by the Company or any other person. No representation or warranty, express or implied, is or will be made by the Company or any of its affiliates, directors, officers or employees, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, the Company, their advisors and their respective affiliates, directors, officers or employees do not and will not accept any liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this presentation or its contents or otherwise arising in connection there with. Certain statements in this presentation constitute forward-looking statements. These statements, which contain the words anticipate, believe, intend, estimate, expect and words of similar meaning, reflect the Directors beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors (including, without limitation, the risk factors specified in the last prospectus that was publish by the Company) could adversely affect the outcome and financial effects of the plans and events described herein. As a result, you are cautioned not to place undue reliance on such forward-looking statements. T he Company and their advisors and each of their respective members, directors, officers and employees disclaim any obligation to update the Company s view of such risks and uncertainties or to publicly announce the result of any revision to the forward-looking statements made herein, except where it would be required to do so under applicable law. 2

3 The Plaza Centers Team Mordechay Zisser, Chairman Ran Shtarkman, President & CEO Roy Linden, CFO Founder of the Europe Israel Group of companies and president of Elbit Imaging Ltd. Has developed some of the most ambitious and prestigious real estate development projects in Israel (including the city of Emmanuel, the Herzlia Marina, the Ashkelon Marina, and the Sea and Sun luxury residential project in northern Tel Aviv), large scale residential projects in South Africa, hotel projects in South Africa and Western Europe shopping and entertainment centre developments in CEE and India CPA, MBA. Mr Shtarkman joined the Company in 2002, was appointed the Chief Financial Officer of Plaza Centers in 2004 and was promoted to the CEO position in August 2006 Prior to joining the Company, he acted as the CFO of SPL Software Ltd., the Finance and Administration Manager of the Israel representative office of Continental Airlines (a publicly traded company - NYSE) and the controller of Natour Ltd. (a publicly traded company - TASE) Mr. Linden joined the company in November 2006 and acts as the group s CFO Prior to joining the Company, he spent nearly 4 years at KPMG in Hungary, acting as a Manager in the real estate desk, specializing in auditing, business advisory, local and international taxation for companies operating throughout the CEE region Mr Linden also spent 3 years at Ernst and Young in Israel, as a senior member of an audit team specialized in high-tech companies 3

4 Table of Contents SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 APPENDIX A APPENDIX B APPENDIX C Investment Case Key Highlights Property Portfolio U.S. Operation Conclusions Current Projects Financial Overview Company Track Record 4

5 Company Structure Elbit Imaging TASE / NASDAQ Aviva PTE Poland 5.81% ING Open Pension Fund Poland 7.65% 62.29% Plaza Centers N.V. LSE / WSE 5.95% BZ WBK AIB Asset Management S.A. Residential Projects India Shopping & Entertainment Centers CEE and India Real Estate Investment Fund USA 5

6 A Lean Management Structure Relying on Local Teams Plaza Centers Board Senior Management Shimon Yitzhaki Director Marco Wichers Director Uzi Eli Legal Counsel Mordechay (Motti) Zisser Chairman Ran Shtarkman President & CEO Ran Shtarkman President & CEO Roy Linden CFO Edward Paap Director Functional Management Support Executive Directors Marius Van Eibergen Santhagens Director Ami Hayut Chief Engineer Oversight of company strategy and all project development decisions Wide-ranging property development expertise Review and approval of business plan and budgets Active management and monitoring of development risks Experienced property development professionals with global property development expertise Responsible for sourcing development projects Development of business plans Overseeing the management of development projects Local Country Management Eli Mazor Country Director (Poland) Regional Marketing Director (Europe) Yossi ofir Country Director India Sagiv Meger Country Director Czech republic, Serbia and Balkan States Daniel Belhassen Country Director (Bulgaria, Greece) Bulgaria and Greece Luc Ronsmans Country Director The Netherlands, Romania Alexander L. Berman Country Director United States Extensive local experience Cultivating connections within market to source opportunities Day-to-day management of local operations and developments 6

7 Section 1: Investment Case

8 Investment Highlights (1) 15-year track record of developing shopping & entertainment centres in CEE Plaza Centers has been active in the region since 1996 and was the first to develop western-style shopping and entertainment centres in Hungary Leading emerging markets developer of shopping and entertainment centres... Plaza has pioneered this concept throughout the CEE whilst building a strong track record of successfully developing, letting and selling shopping and entertainment centres. The group has extended its area of operations beyond the CEE into India Plaza has 30 development assets, 4 active shopping & entertainment centres and 2 office buildings which it owns, as well as a broad and constantly evolving pipeline in both CEE and India the group has the ability to identify new growth opportunities, constantly targeting attractive returns in fast growing emerging markets, evidenced by the portfolio additions that we made in Flexibility and ability to anticipate and adapt to market trends Plaza is well positioned to satisfy the significant retail demand resulting from rapidly growing incomes as well as increasingly westernised tastes and habits of emerging market populations. Decisions to dispose of portfolio properties are based on an in-depth analysis of market situation 8

9 Investment Highlights (2) Highly skilled management team extensive local and business knowledge with a proven ability to source strategic development sites and design projects that meet the demands of the local market. Many management team members have been with us for several years... with a longstanding track record in CEE, expanding portfolio and clearly identified pipeline... Extensive network strong relationships with both leading international retailers and property investors as demonstrated by the proven ability to pre-sell projects (before or during the construction) and achieve at least 70%-90% of pre-lettings Strong brand name Plaza Centers has become a widely recognised brand name for successful property development in CEE which is beneficial at all stages of project execution (e.g. following portfolio sales to Klépierre, Dawnay Day and aaim, the purchasers continue to use the Plaza Centers trade name under license) Thorough project evaluation prior to each project, Plaza goes through a carefully developed, structured evaluation process involving each of the relevant disciplines (economics, engineering, marketing, etc) Successful project management almost all projects to date finished on time and within budget 9

10 Investment Highlights (3) Since foundation, the group has sold 26 assets with a gross value of 1,164m... listed on the Main Board of the London Stock Exchange since 2006 and on the Warsaw Stock Exchange since October 2007 The Group owns 30 development projects and is also involved in advanced negotiations for several additional new development sites. As at 31 December 2010, the market value on completion of the projects owned was approximately 3.85b On 1 November 2006, the Company raised c. 166m (c. 247m) from its IPO and began trading on the Main Board of the London Stock Exchange Since 19 October 2007, Plaza centers shares are also traded in the main list on the Warsaw stock exchange - first property company to achieve London-Warsaw dual lisitng Plaza Centers has acquired 25 development sites and sold 5 shopping and entertainment centres since the IPO, all 5 were 100% leased on opening Between July 2007 January 2011, Plaza issued c. 370m of bonds on the Tel Aviv stock exchange In November 2010 the company raised a total of PLN 60 million (circa 15.2million) from issuing bonds to Polish Institutional investors 10

11 History Developed & let 30 shopping and entertainment centres in the CEE region, of which 26 were sold with an aggregate gross value of 1,164m 1996 First investment in Hungary Developed and managed a portfolio of 20 shopping and entertainment centres 2004 Sold 12 shopping and entertainment centres to Klépierre at a gross asset value of 278m (c. 9.3% net yield) 2005 Sold 4 shopping and entertainment centres to Dawnay Day at a gross asset value of 54m (c. 9.2% net yield) 2005 Sold 4 shopping and entertainment centres to Klépierre at a gross asset value of 204m (c. 8.4% gross yield) 2005 Forward sold 5 shopping and entertainment centres to Klépierre 2006 Raised 166.2m from issuing 92.3m ordinary shares listed on the Main Board of the LSE 2006 Sold 1 shopping and entertainment centre to Klépierre at a gross asset value of 50m (c. 7.9% grosst yield) 2006 First transaction in India 2007 Sold 3 shopping and entertainment centres to Klépierre at a gross asset value of 129m (c. 7.3% gross yield) 2007 Sold 1 shopping and entertainment centre to aaim for approx. 387m (c. 5.9% gross yield) 2007 Introduction to Exchange trading shares of plaza centers in the main market on WSE Gross proceeds raised of approximately 300m from bond issuance on the Tel Aviv stock exchange 2008 Sold 1 shopping and entertainment centre to Klépierre at a gross asset value of 61.4m (c. 7.3% gross yield) 2009 Opening of 2 new shopping and entertainment centres in Riga, Latvia and in Liberec, Czech Republic 2010 Opening of 2 new shopping and entertainment centre in Zgorzelec and Suwalki, Poland 2010 First transaction in the US retail market As at 31 December 2010 market value on completion of the projects ownd was approximately 3.85bm Healthy pipeline in the Czech Republic, Poland, Romania, Serbia, India and other countries Expanding into Indian market where expertise gained in CEE can be applied 11

12 Impressive Track Record asset sales 26 property disposals for over 1,164m Hungary 17 Poland 7 Czech Republic

13 Strategy and Objectives A clear and focused strategy Develop modern, western-style shopping and entertainment centres in capital and regional cities primarily in CEE and in India Acquire operating shopping centres that show significant redevelopment or revaluation potential also in the US Pre-sell centres where market conditions are favourable, before or during the construction Where the opportunity exists in CEE, draw upon skills of the Elbit Imaging Group to participate in residential, hotel, offices and other development schemes Objectives Target at least 4 5 new development projects per year Target returns of at least 30% 50% on equity invested Dividend policy* fixed 25% of realised development profits up to 30m, and 20 25% of the excess thereafter, as decided by the Directors. Payable annually * Plaza s Annual General Shareholders Meeting is scheduled to take place on June 30, In the notice to the meeting, issued on 18 May, 2011, the company s board of directors recommended no dividend to be distributed on account of the 2010 financial year 13

14 Section 2: Key Highlights

15 Key Highlights 2011 Plaza issued an additional principal amount of approximately NIS 267 million (approximately 58 million) of Series A and B Notes for an aggregate consideration of approximately NIS 300 million (approximately 65 million) by way of a private placement MIDROOG Ltd., the Israeli Credit Rating Agency and an affiliate of Moody s Investors Service ( Midroog ), has updated the rating of Plaza s two series of Notes to A2/negative on March 07, Furthermore, Midroog has ratified the same rating for the additional NIS 300,000,000 series A and B notes issued in January In May 2011 the two rating agencies placed the bonds into their credit watch list EPN made an off-market takeover bid to acquire all of the outstanding units of EDT on March 10, EPN's unconditional offer is to buy all outstanding units of EDT that EPN's affiliate does not already own (approximately 52%), for AUS$ 0.09 cash per EDT unit. The total consideration, which will be paid by EPN, assuming full take up of EDT units, is approximately USD 200 million 15

16 Key Highlights 2011 (cont.) Further progress with the company s ongoing development projects: Construction of Plaza's 10th retail scheme in Poland, the 40,000 sqm GLA Torun Plaza, remains on schedule for completion in Q The centre is already 60% pre-let. Plaza is expected to complete the construction of its first retail scheme in Serbia in Q The 22,000 sqm GLA Kragujevac Plaza, is already 75% pre-let. Along with its 50:50 Indian joint venture partner, Plaza continues to make good progress with the construction of the first phase of the Kharadi project in Pune, a 28,000 sqm GBA office building known as Matrix One, which is due to complete at the end of this year. To date, Plaza has pre-sold over 70% of the saleable area. Letting and construction progress continues at Plaza s 48,000 sqm Koregaon Park Plaza shopping centre scheme in Pune, India. Approximately 55% of the scheme is pre-let with memoranda of understanding signed for a further 15% of the space. Completion of the shopping and entertainment centre is expected in H

17 Active shopping and entertainment centers Liberec Plaza, Czech Republic Riga Plaza, Latvia GLA 17,000 sqm Occupancy 74% Book value million GLA - 49,000 sqm Occupancy 84% (starting August %) Book value million (representing PC 50% stake) Zgorzelec Plaza, Poland Suwalki Plaza, Poland GLA 13,000 sqm Occupancy 75% Book value - 24 million GLA - 20,000 sqm Occupancy 82% Book value million 17

18 Developments under construction Torun Plaza, Poland Kragujevac Plaza, Serbia GLA - 40,000 sqm Expected completion Q Finance in Place 52.3 million Kharadi Plaza (Matrix 1), India GLA - 22,000 sqm Expected completion Q Finance in Place million Koregaon Park Plaza (Mall), India GBA - 28,000 sqm Expected completion Q The project financed by revenues from pre sold offices GLA - 39,000 sqm Expected completion Q Finance in Place - $

19 Plaza Centers position in current global credit crises Due to the global crises Plaza has limited its ongoing development programme to projects with the high market demand and where financing terms are more favourable The remaining of the projects we continue with design and permits, and will decide if to build based on availability of financing Banks continue to finance construction, though in lower ratios and higher costs: from the former DTC of 85% - 100% to current 65% - 75%, with margins higher by 50 bps to 200 bps Yet- we see Plaza as positioned strongly in current challenging credit conditions: High Liquidity Current cash balances of over 250 million The company is conservatively geared, 54% debt / balance sheet The group maintains good relations with the financing banks who remain supportive of companies with strong track record. During the crises Plaza has signed and secured bank loan agreements for the construction of the projects in Koregaon Park, India ($42.5 million), Kragujevac, Serbia ( 32.9 million) and Torun, Poland ( 52.5 million) Fast phase and efficient construction management in the CEE region which lowers the significant impact of higher margins, in addition to being a trader-developer rather than holder of yielding assets Majority of projects expected to be completed in late 2011 onwards, therefore no need to sell in current market conditions 19

20 Expected cash flow for the coming two years MEUR MEUR MEUR Cash - Opening Balance Sources Uses Proceed from selling trading properties cash flows from operating Activities (1) Issuance of new debentures Total Sources Debentures - principal repayment Debentures Interest repayment Minus-Hedging on debentures Bank loans - principal repayment Bank loans interest repayment Additional Equity investment in current projects General & administrative expenses Total Uses Cash - Closing Balance Dividends (subject to sufficient profits from sale of properties) (1) Including income from operating malls, Indian activities, US venture and financial income 20

21 Expected NOI from properties (excluding US) Period Q2 - Q4/ Representing NOI Total related debt upon completion MEUR MEUR MEUR MEUR Operating shopping and entertainment centers (1) Shopping and entertainment centers under construction (2) Total (1) Suwalki Plaza, Zgorzelec Plaza, Riga Plaza, Liberec Plaza (2) Torun Plaza, Kragujevac Plaza, Koregaon Park Plaza 21

22 Debt & Liquidity Structure as at Debt structure EUR (000') Debentures (1) Liquid Balances 257 Total Debt CEE 212 Bank Loans US 136 India 25 Total Financial instruments and restricted bank deposits 69.4 Net financial debt 427 shareholders equity (Non-Revalued) 620 Net debt / Net CAP (2) 41% Total debt to balance sheet 54% (1) Total debentures amount of 424m net of related hedging amounting to 44m (2) Net CAP= Net Debt + Equity 22

23 Debentures repayment schedule MEUR % 19% 19% 19% 19% 3% 3% 23

24 Section 3: Property Portfolio

25 Portfolio Composition by Country (excluding U.S) Total portfolio of 36 assets in 9 countries 1 2 Offices Under Development Completed & Active Romania Poland India Hungary Czech Republic Serbia Bulgaria Greece Latvia 25

26 Portfolio Composition by Value (excluding U.S) Project Market value on completion ( m) 1 Market value of the land and project ( m) (1) Total GLA (m 2 ) (2) Shopping and entertainment center developments ,000.0 Dream Island ,000 (GBA) Casa Radio ,000 (GBA) Indian mixed use projects ,165,000.0 Mixed use projects ,000.0 Other projects and developments ,300.0 Active Shopping and entertainment centers ,000.0 Total as at December 31, , ,986,300 (1) Value of Plaza s stake as per King Sturge valuation report as at 31 December, 2010 (2) All figures reflect 100% 26

27 Arena Plaza Hungary Overview Arena Plaza is one of the largest shopping and entertainment centres in CEE, with GLA of approx. 66,000m² The site is prominently located in the heart of Budapest on the Kerepesi Street in one of the most densely populated residential districts in Budapest, adjacent to one of the major roads into Budapest and close to the Keleti railway station (one of Budapest s main international train stations with the highest footfall) Arena Plaza is also include the first IMAX cinema auditorium in Hungary Tenants mix: Tesco, Cinema City with IMAX 3D theatre and 22 other screens, Peek & Cloppenburg, Zara, Hervis (sporting clothing & equipment), Electro World, Hennes & Mauritz, C&A Project status: Completed and fully let, opened on 15 November, 2007, sold at a record 5.9% gross yield, representing circa 20% of all real estate transactions in Hungary in 2007 Sold: aaim - 387m Arena Plaza, Budapest 27

28 Dream Island (Obuda) Hungary Overview: 320,000 m² plot on the southern end of the Obuda Island on the Danube River in central Budapest Plaza intends to develop the plot into a 350,000 m² business and leisure resort including 3,000 hotel rooms, a convention centre accommodating 3,500 delegates, a large scale American style casino, a 1,500 seat opera house, a 3,500 seat theatre, a marina (with an anchorage for 300 vessels), a shopping and entertainment centre, a Roman cultural museum and parking facilities for approximately 5,500 vehicles The Group has a 50% shareholding in the SPV that has a 87% interest in the consortium. The remaining members of the consortium are MKB Bank (approx. 43.5% indirect interest) and a company controlled by the managing director of the consortium (approx. 10% direct interest) and minor minorities (3% interest) The Group will provide project management services and retain leading international operators for the hotels, the casino, the convention hall and the cultural centre Debt funding for the project will be arranged by MKB Bank Project status: Modified Town Planning Scheme (KSZT) received following a referendum amongst the residents of the local district. Initial excavation and archaeological works commenced. Casino license for 20 years (+10 option) granted in May 2008 Obuda, Budapest 28

29 Casa Radio Romania Overview: Plaza Centers owns a 75% stake in the Casa Radio project in central Bucharest (in partnership with the Romanian state and another third party) Casa Radio is located on the border of Sector 1 and Sector 6 in the city of Bucharest, which comprises a large area of the city centre as well as a high proportion of residential apartments The property comprises a brownfield site covering an approximate area of 101,497 m² The proposed scheme will comprise refurbishment of the existing building as well as the development of additional space annexed to the building and on adjoining land The scheme will include a shopping & entertainment centre of approximately 170,000 m², with a hypermarket of approximately 6,500 m², a hotel of 35,000 m² (320 rooms), an apartment hotel of 18,000 m², a conference centre of 14,000 m², 130,000 m² of offices and a ferris wheel Project status: Under Construction The centre is scheduled to open in Casa Radio, Bucharest 29

30 Bangalore - India Residential project comprised of row houses and villas. Joint venture project, 50% owned by the JV and 50% owned by a prominent local developer The project located on the eastern side of Bangalore in South India Bangalore City Population 7,000,000 Plaza Ownership 23.75% Land 165 Acres Project Built Area Villas 320,000 GBA (excluding parking) 320,000 30

31 Chennai - India Mixed-use project comprised of high quality villas and high-rise buildings units together with local retail facility Joint venture project, 80% owned by the JV and 20% owned by a prominent local developer The property is located adjacent to the largest IT park in the area Chennai City Population 10,000,000 Plaza Ownership 38% Land 90 Acres Project Built Area Residential 770,000 Retail 30,000 GBA (excluding parking) 800,000 31

32 Kochi Island - India Mixed-use project comprised of high-end residential apartment buildings, office complexes, a hotel and serviced apartments complex, retail area and a marina Joint venture project, 50% owned by the JV and 50% owned by a prominent local developer The property is located on a backwater island overlooking and a minute drive from the administrative, commercial and retail hub of the city of Kochi Kochi Island City Population 10,000,000 Plaza Ownership 23.75% Land 41 Acres Project Built Area Residential 355,000 Offices 120,000 Hotel 70,000 Retail 30,000 GBA (excluding parking) 575,000 32

33 Section 4: U.S. Operation

34 U.S Operation in 2009 Elbit Plaza USA signed a co-investment agreement with East gate Property, creating the EPN GP, LLC Fund (EPN Fund) EPN Fund is to invest a combined $200m (to be split 50:50), to take advantage of opportunities in the U.S retail and commercial real estate sectors. Additional $200m will be put up by limited European and Israeli investors to date, a total of $231m has been committed by investors $400m of capital would allow EPN to purchase property investment valued up to $1,000 M EPN Fund Structure USD 31 M 34

35 Shopping Centers Portfolio (REIT I + Venice) Before Entitlement Offer In USD millions Value * 1,264 Secured Debt 918 Unsecured Debt 108 NAV 238 LTV 81% Cash injection as a result of the deal US$ 183M (AU$210M) After Entitlement Offer In USD millions Value 1,264 Secured Debt 843 Unsecured Debt - NAV 421 LTV 67% * According to latest published valuations 35

36 U.S Operation EDT Portfolio In June 2010, EPN completed the transaction to gain control (48%) at the Australian listed EDT Fund and purchased 50% of the management company partnering with DDR (shopping malls company) for approximately USD 120 million. Recently EPN made an off-market takeover bid to acquire all of the outstanding units of EDT for AUS$ 0.09 per unit. To date EPN increased its stake in EDT to 56% EDT currently holds and manages 48 active commercial centres in 20 states in the U.S with an aggregate property value of approximately USD 1.38 billion The properties generate annual net operating income of circa USD 100 million These centers are 89% occupied where approximately 80% of annual revenues from rental derive from retail anchors with nationwide locations who are signed on long term leases The properties have rentable areas spanning over 1.02 million sq.m which are leased to hundreds of diverse tenants 36

37 U.S Operation EDT Portfolio EDT Top Ten Tenants TJX Companies 5.9% PetSmart 4.7% Kohl s 4.7% Best Buy 3.3% Dick s Sporting Goods 2.6% Bed Bath & Beyond 2.5% Wal-Mart 2.2% Jo-Ann Stores 2.1% Home Depot 2.0% Schottenstein Stores 2.0% Top Ten Tenants 32.1% Top ten states by Annual Base Rent Massachusetts 12.9% Ohio 10.7% New York 9.3% Minnesota 9.1% Texas 7.0% Illinois 6.4% Florida 6.3% Connecticut 5.3% Colorado 4.8% Kansas 4.5% EDT Geographical Diversification 37

38 U.S Operation EDT Portfolio Total Owned Square Feet (Thousands): 10,942 Average Occupancy: 88.77% (% leased today) Average Yearly Rent Per Square Foot: $11.76 (current rents) The Trust s rental revenue remains relatively stable with over 80% of its Annual Base Rent derived from large and junior anchor retailers which predominantly have a national presence and are secured by relatively long-term leases Historical NOI million USD The decrease in the NOI between was mainly caused by the sale of some assets by MDT

39 U.S Operation EDT Portfolio Since acquiring EDT, we have implemented a programme of improvements, which included extension of long term credit related to the assets, rental of available space and reorganization of the management structure We are investing in the improvement of the rented premises (tenants improvement) to achieve enhanced returns ranging from 12% to 20% It is our intention to increase the NOI by a further USD 10 million in the coming 3 years 39

40 U.S Operation EDT Portfolio EDT Loan to Value MUSD Assets value in the Balance Sheet 1,409 Total Debt 925 Cash Balances 50 Net Debt 875 LTV 62% in MUSD Stake Accounting Shareholders equity Market Value Value based on NOI (1) Value as of 27 May, EPN Share 56% (2) Plaza Centers Share 21.65% (1) assuming 7% yield as the average trading yield of other REIT funds that invests in similar assets (2) current stake. There is an open offer from EPN to acquire all of the outstanding units in EDT that it does not currently own (offer expires 3 June, 2011) 40

41 U.S Operation EDT Portfolio: sample properties 41

42 U.S Operation Grocery Anchored Centers Portfolio In December 2010, EPN entered into an agreement with Charter Hall, an Australian company, to purchase seven commercial centres of grocery anchored shopping centres type in the U.S at property value of USD 75 million The Grocery Anchored Centers Portfolio is comprised of seven retail properties including five grocery anchored centers, two grocery/big box hybrid centers, one pharmacy anchored center and one unanchored strip center. Assets within the portfolio range from 25,394 square feet to 201,979 square feet Totaling 648,301 square feet, the 91% leased portfolio includes assets located in three markets throughout the United States. Four of the assets are located in Georgia, two in Oregon and one in Florida Nationally recognized grocery and big box anchors including Office Max, PetSmart, Marshalls and CVS occupy approximately 400,000 square feet (more than 55% of the total portfolio). One of the grocery centers are anchored by Kroger, one by Publix and one by Safeway. One grocery/big box hybrid includes Albertson s and another includes Trader Joe s As evidence of the demographic strength of the submarkets in which the assets are located, the portfolio boasts average household incomes within a 3-mile radius of the properties that significantly exceed the average for the United States at $89,500 per household The commercial centres generated net operating income of approximately USD 7 million in 2010, representing a return of 9.2% on the purchase price 42

43 U.S Operation Grocery Anchored Centers Portfolio 43

44 Section 5: Conclusions

45 Conclusions 15-year track record of developing shopping and entertainment centres in CEE Expanding portfolio and constantly evolving pipeline Flexibility and ability to anticipate as well as adapt to market trends Highly skilled and experienced management team Strong relationships with leading international retailers and property investors Strong brand name Thorough project evaluation process Successful project management - Exceptional track record of delivering projects on time and within budget 45

46 Appendix A: Current Projects

47 Shopping & Entertainment Centres Developments Project City Ownership (%) GLA (m 2 ) Market value on completion ( m) (1) Market value of the land and project ( m) (1) Expected completion Hungary Uj Udvar Budapest 35 16, Poland Suwalki Plaza Suwalki , Operating Torun Plaza Torun , Q Zgorzelec Plaza Zgorzelec , Operating Kielce Plaza Kielce , Leszno Plaza Leszno , Lodz Plaza Lodz , Czech Republic Liberec Plaza Liberec , Operating Latvia Riga Plaza Riga 50 49, Operating Greece Pireas Plaza Athens , Serbia Kragujevac Plaza Kragujevac , H Sport Star Plaza Belgrade , Bulgaria Shumen Plaza Shumen , Romania Constanta Plaza Constanta , Timisoara Plaza Timisoara , Miercurea Ciuc Plaza Miercurea Ciuc , Slatina Plaza Slatina , Hunedoara Plaza Hunedoara , Targu Mures Plaza Targu Mures , Total 497,000 1, (1) Value as per King Sturge valuation reports as at 31 December,

48 Other Properties and Developments Project City Ownership (%) GLA (m 2 ) Market value on completion ( m) (1) Market value of the land and project ( m) (1) Expected completion Extensions Arena Plaza Extension Budapest , Mixed use developments Dream Island, Obuda (3) Budapest 43.5 (2) 350, Casa Radio (3) Bucharest , Iasi Plaza Iasi , Koregaon Park (3) Pune , H (mall) Kharadi (3) Pune , Trivandrum (3) Trivandrum , Bangalore (3) Bangalore , Chennai (3) Chennai , Kochi (3) Kochi , Belgrade (3) Plaza Belgrade , Sofia Plaza Business Center Sofia 51 44, Existing offices David House Budapest 100 2, Completed Palazzo Ducale Bucharest Completed Residential Prague III Prague , Roztoky Prague , Lodz Lodz , Total 3,489, , (1) Value as per King Sturge valuation reports as at 31 December 2010 (2) Indirect (the Company has a 50% shareholding in a company which has a 87% interest in the consortium which owns the project) (3) GBA 48

49 Projects overview Completed Projects Liberec Plaza (Czech Republic) Riga Plaza (Latvia) City: Liberec, Czech Republic Type: Shopping & entertainment centre Size: 17,000 (GLA) Plaza Share: 100% Status: Operating City: Riga, Latvia Type: Shopping & entertainment centre Size: 49,000 (GLA) Plaza Share: 50% Status: Operating Zgorzelec Plaza (Poland) Suwalki Plaza (Poland) City: Zgorzelec, Poland Type: Shopping & entertainment centre Size: 13,000 (GLA) Plaza Share: 100% Status: Operating City: Suwalki Type: Shopping & entertainment centre Size: 20,000 (GLA) Plaza Share: 100% Status: Operating 49

50 Projects overview - Poland Torun Plaza Lodz Plaza City: Torun Type: Shopping & entertainment centre Size: 40,000 (GLA) Plaza Share: 100% Completion Date: Q Status: Under construction City: Lodz Type: Shopping & entertainment centre Size: 45,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage Leszno Plaza Kielce Plaza City: Leszno Type: Shopping & entertainment centre Size: 16,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage City: Kielce Type: Shopping & entertainment centre Size: 33,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage 50

51 Projects overview Serbia Belgrade Plaza Sport Star Plaza City: Belgrade Type: Mixed use (offices, Hotel & retail) Size: 70,000 (GBA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage City: Belgrade Type: Shopping & entertainment centre Size: 45,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage Kragujevac Plaza City: Kragujevac Type: Shopping & entertainment centre Size: 22,000 (GLA) Plaza Share: 100% Completion Date: H Status: Under Construction 51

52 Projects overview India Koregaon Park Kharadi City: Pune Type: Mixed use (Shopping, entertainment & offices) Size: 110,000 (GBA) Plaza Share: 100% Completion Date: H (Mall) Status: Under construction City: Pune Type: Mixed use (Shopping, entertainment & offices) Size: 165,000 (GBA) Plaza Share: 50% Completion Date: Status: Under Construction Trivandrum City: Trivandrum Type: Mixed use (Residential with commercial area) Size: 195,000 (GBA) Plaza Share: 50% Status: Planning and permits stage 52

53 Projects overview India Bangalore Chennai City: Bangalore Type: Mixed use (residential,,offices, retail, hotel, hospital and other infrastructure) Size: 320,000 (GBA) Plaza Share: 23.75% Completion Date: Status: Planning and permits stage City: Chennai Type: Mixed use (residential, commercial, office and retail) Size: 800,000 (GBA) Plaza Share: 38% Completion Date: Status: Planning and permits stage Kochi Island City: Kochi Type: Mixed use (residential, science park, retail, hospitality, infrastructure and marina) Size: 575,000 (GBA) Plaza Share: 23.75% Status: Planning and permits stage 53

54 Projects overview - Romania Casa Radio Timisoara Plaza City: Bucharest Type: Mixed use Size: 600,000 (GBA) Plaza Share: 75% Completion Date: Status: Initial construction City: Timisoara Type: Shopping & entertainment centre Size: 43,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage Iasi Plaza Slatina Plaza City: Iasi Type: Mixed Use Size: 62,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Planning and permits stage City: Slatina Type: Shopping & entertainment centre Size: 17,000 (GLA) Plaza Share: 100% Completion Date: 2013 Status: Planning and permits stage 54

55 Projects overview - Romania Csiki Plaza Targu Mures Plaza City: Miercurea Ciuc Type: Shopping & entertainment centre Size: 14,000 (GLA) Plaza Share: 100% Status: Awaiting external finance Hunedoara Plaza City: Targu Mures Type: Shopping & entertainment centre Size: 30,000 (GLA) Plaza Share: 100% Completion Date: 2013 Status: Planning and permits stage Constanta Plaza City: Hunedoara Type: Shopping & entertainment centre Size: 13,000 (GLA) Plaza Share: 100% Completion Date: 2013 Status: Planning and permits stage City: Constanta Type: Shopping & entertainment centre Size: 18,000 (GLA) Plaza Share: 100% Completion Date: 2013 Status: Planning and permits stage 55

56 Projects overview - Hungary Dream Island Arena Extension City: Budapest Type: Business and leisure resort Size: 350,000 (GBA) Plaza Share: 43.5% Completion Date: Status: Initial excavation and archaeological works, casino license obtained City: Budapest Type: office Size: 40,000 (GLA) Plaza Share: 100% Completion Date: 2013 Status: Planning stage Uj Udvar City: Budapest Type: Shopping & entertainment centre Size: 16,000 (GLA) Plaza Share: 35% Status: Existing shopping centre for refurbishment 56

57 Projects overview Bulgaria Shumen Plaza Sofia Plaza Business center City: Shumen Type: Shopping & entertainment centre Size: 20,000 (GLA) Plaza Share: 100% Completion Date: Status: Planning and permits stage City: Sofia Type: Mixed use (Retail & offices) Size: 44,000 (GLA) Plaza Share: 51% Status: Under Planning; currently let to hyper-market operator 57

58 Projects overview Greece Piraeus Plaza City: Athens (Greece) Type: Shopping & entertainment centre Size: 26,000 (GLA) Plaza Share: 100% Completion Date: 2014 Status: Plannning stage 58

59 Projects overview Residential Projects Roztoky (Czech Republic) Prague 3 (Czech Republic) City: Prague, Czech Republic Type: Residential Size: 14,000 (GBA) Plaza Share: 100% Completion Date: Status: Planning and permits stage City: Prague, Czech Republic Type: Residential Size: 61,600 (GBA) Plaza Share: 100% Status: Permits to be obtained in 2011, currently yielding rent Lodz (Poland) Plaza Centers City: Lodz, Poland Type: Residential Size: 80,000 (GBA) Plaza Share: 100% Status: Planning and permits stage 59

60 Projects overview Office buildings David House (Hungary) Palazzo Ducale (Romania) City: Budapest, Hungary Type: Office Size: 2,000 (GLA) Plaza Share: 100% Status: Operating City: Bucharest, Romania Type: Office Size: 700 (GLA) Plaza Share: 100% Status: Operating 60

61 Appendix B: Financial Overview

62 Financial Position Comments Non current assets 134, , ,129 Investment property 12,970 13, ,702 Increase in 2010 due to the purchase of investment property in the US Other non current assets 121, , ,427 Current assets 824, ,562 1,065,167 Trading properties 575, , ,887 Cash and cash equivalents 146, , ,801 Other current assets 102, , ,479 Total assets 958,556 1,059,621 1,426,296 Increase in 2010 mainly due to the increase in value of cross currency transactions Construction in the course of 2010 mainly in 3 projects in Poland, 2 in India and 1 in Serbia Increase in cash in 2010 mainly due to raise of bonds in approximately 78m Current liabilities (126,018) (235,017) (352,071) Short term bank loans and bond raised (69,415) (184,060) (301,982) Increase in 2010 mainly due to the US transaction - about 59m, and bonds B series transferred to current maturities - 48m Other current liabilities (56,603) (50,957) (50,089) Net current assets / liabilities 698, , ,096 Non current liabilities (223,007) (249,895) (449,776) Bank loans and bonds raised (216,417) (247,167) (443,490) Increase in H mainly due to the US transaction - 121m and raising of bonds - 78m. Forex on bonds in m Other non current liabilities (6,590) (2,728) (6,286) Total liabilities (349,025) (484,912) (801,847) Net assets 609, , ,449 Retained earning 350, , ,109 Increase in 2010 mainly due to the US transaction effecting P&L - about 42m, offset by Forex loss and administrative expenses Other reserves and equity 258, , ,340 Increase in 2010 mainly due translation reserve ( 18m) as well as increase in non-controlling interest ( 19m) Total equity 609, , ,449 Source: Company audited accounts in accordance with IFRS, ( 2010 Audited) 62

63 Income Statements Source: Revenues 98,613 15,616 32,994 Changes in fair value of investment property ,647 98,613 16,045 37,641 Cost of operations (55,934) (46,863) (27,563) Gross (loss) profit 42,679 (30,818) 10,078 Administrative exp. (24,540) (19,054) (17,923) Company audited accounts in accordance with IFRS, ( 2010 Audited) H Comments 2010 includes US rental income- 12.5m, rent in Europe- 12m, Fantasy Park - 7.5m, fair value adjustment of Investment property- 4.5m, revenue from selling trading property - 1m includes 8.3m of rental income and 7.3m from Fantasy Park includes US property operations- 5.4m, property operations in Europe 8.4m, Fantasy Park operation 6m, value of trading property sold million and depreciation as well as write-downs of trading properties 6.7m 2009 includes depreciation as well as write-downs of trading properties 34.2m; cost of operation of shopping centres - 5.5m; Fantasy Park - 7.2m 2010 includes 2.5m of non-cash share based payments as well as activities of 4 completed shopping centers includes 2.8m of non-cash share based payments as well as activities of 2 completed shopping centers. Other income (expenses), net (2,689) , includes 42 million gain in respect of the US transaction Results from operating activities 15,450 (49,631) 34,498 Finance income 67,356 33,423 49, Substantial finance loss recorded due to Forex and value uplift losses of issued debentures ( 63m) offset mainly by (70,773) finance income derived from derivative financial instruments ( 33m) and cash income from deposits ( 10m) Finance expenses (9,268) (51,543) Substantial finance loss recorded due to increase in the fair value of issued debentures ( 45m) offset mainly by finance income derived from derivative financial instruments ( 17m) and cash income from deposits ( 9m) Share in loss of associate (941) (780) (381) Profit (loss) before tax 72,597 (68,531) 12,940 1,308 Tax benefit (income tax expenses) (4,913) 3,819 Movement is due to movements in deferred taxes on financial instruments (Debentures, cross currency transactions) Profit (loss) for the period 67,684 (64,712) 14,248 63

64 Financing The Group seeks externally sourced bank financing (in the form of construction loans) for individual projects. The Company's debt financing for each project usually falls within the following parameters: 70 : 30 per cent debt to equity ratio. In some instances, the Group has been successful in achieving higher debt ratios. The land acquisition costs count towards the Group s equity contribution; construction loans are usually taken out for a period of 2 years (investment loans, if needed, taken out for 10 to 15 years); interest rate margins range between 2% to 4% depending on the particular project; repayment terms will generally indicate a grace period on repayment of principal (but not interest) during, and in some instances for up to 12 months after the end of the construction period. After operations commence, repayment of principal and interest are generally effected on a quarterly basis, with a bullet payment upon loan maturity of up to 30% of the principal sum; with few exceptions, construction loans are taken out on a strictly non-recourse basis; security requirements vary from country to country and from bank to bank, but would in all instances include: a first ranking mortgage on the property, a pledge on the shares held in the borrower, the subordination of shareholders loans, a charge on the borrower s bank accounts and the assignment of the rentals in favour of the relevant Bank In those countries where the Group has established operations, it will generally establish long term financing relationships with leading banks in that country. For example, in Hungary, the majority of the Group s projects were financed by MKB Bank and by OTP Bank. These relationships have in some instances extended beyond the borders of the relevant country, for instance, financing some Czech, Polish and Latvian projects was done with debt from Hungarian banks In those cases where the completed projects have not been pre-sold or where divestment does not take place at the commencement of operation, the Group will generally seek to re-finance the project as soon as practical after opening 64

65 Appendix C: Company Track Record

66 Summary of Sold Developments Hungary Shopping and entertainment centres sold to Klépierre in 2004 gross asset value of 278m and average net yield of approximately 9.3% Name City Country GLA (m 2 ) Alba Plaza Szekesfehervar Hungary 14,981 Csepel Plaza Budapest Hungary 13,565 Debrecen Plaza Debrecen Hungary 14,624 Duna Plaza Budapest Hungary 35,915 Gyor Plaza Gyor Hungary 15,085 Kanizsa Plaza Nagykanizsa Hungary 5,947 Kaposvar Plaza Kaposvar Hungary 8,296 Miskolc Plaza Miskolc Hungary 14,647 Nyir Plaza Nyiregyhaza Hungary 13,775 Szeged Plaza Szeged Hungary 15,842 Szolnok Plaza Szolnok Hungary 6,815 Zala Plaza Zalaegerszeg Hungary 7,405 Total 166,897 Shopping and entertainment centres sold to Dawnay Day in 2005 gross asset value of 54.4m and average net yield of approximately 9.2% Name City Country GLA (m 2 ) Balaton Plaza Veszprem Hungary 9,155 Pecs Plaza Pecs Hungary 15,356 Savaria Plaza Szombathely Hungary 8,235 Sopron Plaza Sopron Hungary 14,128 Total 46,874 Shopping and entertainment centre sold to aaim in 2007 gross asset value of approx. 387m and gross yield of approximately 5.9% Name City Country GLA (m 2 ) Arena Plaza Budapest Hungary 66,000 66

67 Summary of Sold Developments Poland & Czech Republic Shopping and entertainment centres sold to Klépierre in 2005 gross asset value of 204m and average net yield of approximately 8.4% Name City Country GLA (m 2 ) Krakow Plaza Krakow Poland 30,209 Poznan Plaza Poznan Poland 29,522 Ruda Slaska Plaza Ruda Slaska Poland 14,452 Sadyba Best Mall Plaza Warsaw Poland 24,078 Total 98,261 Shopping and entertainment centres sold to Klépierre in 2006 (Novo), in 2007 (Rybnik, Sosnowiec and 50% of Lublin) and in 2008 (Plzen) gross asset value of 240.5m and average net yield of approximately 6.9% Name City Country GLA (m 2 ) Rybnik Plaza Rybnik Poland 18,127 Sosnowiec Plaza Sosnowiec Poland 12,860 Lublin Plaza (1) Lublin Poland 25,738 Novo Plaza Prague Czech Republic 26,417 Plzen Plaza Plzen Czech Republic 20,000 Total 103,142 (1) Klépierre had exercised the option to buy 50% in the shopping and entertainment centre held by Plaza Centers 67