investor presentation february 2019berlin office space take -up and vacancy rate, 000s sqm . office...

Investor Presentation February 2019

2

CPIPG: Long-term owner, active asset manager

Source: Company information (1) Other WE includes: France, Switzerland, Italy; Other CEE includes: Poland, Croatia, Romania, Slovakia and Russia (2) Other includes industry & logistics, and agriculture (3) As of 30 June 2018

Czech Republic 54%

Germany 24%

Hungary 8%

Other CEE 10%

Other WE 4%

Office 41%

Retail 29%

Hotels & Resorts 11%

Land bank & development

9%

Residential 8%

Other 2%

2

1

2

Property portfolio by sector (as of June 30, 2018)

Property portfolio by geography (as of June 30, 2018) Long term investor in income-generating properties in the Czech

Republic, Berlin and the CEE region Largest real estate owner in our region, with a diversified property portfolio valued at more than €7.5bn

Our asset management teams are local experts who understand the needs of each market; our platforms have shown consistent growth in rents and occupancy

Our primary shareholder Mr. Vitek is completely aligned with management and has reinvested consistently over the years to create a high quality portfolio and a professional team

Very low development exposure, currently 9% of total portfolio (of which 87% is land bank primarily in Prague3)

Investment grade ratings profile (Baa2/BBB) and consistent capital structure improvements through unsecured bond issuance and secured loan/bond repayments

3

Our portfolio operates across four key segments

€6,994m

Property portfolio 1H’2018

Net business income 1H’2018

(for half year)

€156m Source: Company information

€3,446m €86m Czech Republic 1

€1,683m €32m Berlin 2

€738m €20m Hotels 3

€1,128m €18m Complementary assets portfolio 4

Total:

Largest real estate owner in Czech Republic: #1 retail owner nationally #1 office owner in Prague #2 residential owner nationally

Owner/operator of hotels in Czech Republic and major CEE cities:

#1 congress and convention hotel provider in Czech Republic #1 resort on premier island of Hvar, Croatia

#1 owner of offices in Berlin: Assets extremely well suited for tech, creative and startups

Portfolio consists primarily of investments in Poland, Hungary and Slovakia:

Potential for further expansion in Poland and Hungary

4

Focused on the Czech Republic, Berlin, and nearby CEE countries

78% of our portfolio is located in the Czech Republic and Berlin Source: Company information

Capital and other large city

Legend

Flight time (hrs)

Drive time (hrs)

Office

Retail

Residential

Hotels

Property portfolio value per segment

Poland €337m

Germany €1,683m

Czech Republic €3,774m

Slovakia €121m

Hungary €555m

Berlin

Warsaw

Budapest Bratislava

Brno

Prague

1:20

1:05

1:20

1:10

1:10

3:30

2:30

1:30

2:00

5

CPIPG: Key performance highlights from 2018

FY 2017 FY 2018 Comment

Total Assets €7.5bn >€8.0bn Up nearly 10% versus 2017

Property Portfolio €6.7bn >€7.5bn Up nearly 12% versus 2017 due to acquisitions and higher valuations

Czech Republic + Berlin (%) 78% 78% Focused on our core areas of expertise

LFL Rental Growth 5.4% ~5% 10% in Berlin, 3% to 5% in Czech Republic and CEE

EPRA Occupancy1 93% 94.5% Up by 1.5 p.p. versus 2017

Net Business Income €272m €315m Up over 15% versus 2017

Funds From Operations (FFO) €127m €160m Up nearly 26% versus 2017

EPRA NAV €3.9bn €4.5bn Up over 15% versus 2017

Net LTV 45% <37% Decrease by 8 p.p. versus 2017

Secured Debt to Total Debt 59% 38% Decrease by 21 p.p. versus 2017

Unencumbered Assets 43% 65% Up by 22 p.p. versus 2017

Cost of Financing 2.6% 1.6% Decrease by 1 p.p. versus 2017

Net Interest Coverage Ratio 2.6x 4.2x Up by 1.6x versus 2017

Credit Ratings Baa3 Baa2/BBB/A-(JCR) Upgrade from Moody’s; new ratings from S&P and JCR

Source: Company information (1) Excluding hotels; Calculated on the basis of EPRA vacancy All FY 2018 data contained in this presentation are unaudited estimates, solely for information purposes. The final audited 2018 annual results will be in the Company's full audited annual financial report, which is expected to be published on 29 March 2019. These estimates relate to financial information not yet audited and have been prepared on the basis of assumptions about accounting policies and financial figures, which entails substantial uncertainties. Due to these uncertainties, it is possible that the Company's actual results for the financial year ended 31 December 2018 may differ materially from these estimates.

Robust operating performance, driven by growth in rents and occupancy

Transformation of our capital structure through nearly €2.3bn of bond / hybrid issuance and a €230m revolving credit facility

Cap

ital S

truct

ure

Portf

olio

Per

form

ance

6

Consistent improvements to our capital structure

Source: Company information. (1) Calculated as net debt divided by fair value of property portfolio (2) Calculated as total assets less a sum of encumbered assets divided by total assets (3) Calculated as consolidated adjusted EBITDA divided by a sum of interest income and interest expense

48% 45%

37%

2016 2017 2018

Lower net LTV1

Improved net interest coverage ratio3

2.4x 2.6x

4.2x

2016 2017 2018

23%

43%

65%

2016 2017 2018

Increasing unencumbered assets2

Decreasing secured debt as % of total debt

77% 59%

38%

2016 2017 2018

All FY 2018 data contained in this presentation are unaudited estimates, solely for information purposes. The final audited 2018 annual results will be in the Company's full audited annual financial report, which is expected to be published on 29 March 2019. These estimates relate to financial information not yet audited and have been prepared on the basis of assumptions about accounting policies and financial figures, which entails substantial uncertainties. Due to these uncertainties, it is possible that the Company's actual results for the financial year ended 31 December 2018 may differ materially from these estimates.

Market Positioning and Backdrop

16.0 14.7

13.2 11.7

7.5 6.4 5.7 4.0 2.9

8

Market leader in the Czech Republic, Berlin and CEE

Largest portfolio in the Czech Republic and Berlin

Clear market leader in the Czech Republic Largest office portfolio in Berlin

Total property value (€bn) 1

Source: Company information and latest reported figures for peers. Note: CPIPG as of 31 December 2018, others as of 30 June 2018. (1) Includes equity accounted investment in JVs, assets under development and held for sale as well as building inventories – EUR/GBP FX rate for UK peers as at 30 June 2018 of 1.1307 (2) Excludes stake in Grand City Properties (3) Latest reported figures

CPI is comparable in size to well-known Western European peers focused on offices Selected companies - total property value1 (€bn)

• Owner of a diversified real estate portfolio in the Czech Republic, with leading market positions in the office, retail and residential sectors:

– 12.8% market share in the Czech Republic shopping centres

– 8.5% market share in the Prague office market

• #1 office landlord

• Increased occupancy by 10 p.p. since 2012

• Unique, non-replicable platform

• 53-year track record

2

7.5

5.8

4.3 4.1 4.1

2.8 2.1 2.1 1.9

2,000

985

365

171

CPI

TLG

CA Immo

Sirius

Property value in the Czech Republic (€m)3

51% of total portfolio Property value in Berlin (€m)3

27% of total portfolio

3,800

2,944

1,180

696

341

341

CPI

CTP

Residomo

Klepierre

CA Immo

Immofinanz

1.9%

2.0%

2.2% 2.5%

2.0%

(1.0%)

0.0%

1.0%

2.0%

3.0%

4.0%

2014 2015 2016 2017 2018 2019 2020 2021 2022

Czech Republic Germany Poland Hungary Slovakia

3.5

3.0 2.7 2.6

0.9

1.4

1.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Poland Hungary Czech Republic

Slovakia Germany Europe US

Real

wag

e gr

owth

201

7-22

p.a

. (%

)

2.3% 3.3%

6.4% 5.5% 5.3%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018E 2019E 2020E

Une

mpl

oym

ent r

ate

( %)

Czech Republic Germany Europe Poland Slovakia

9

Strong growth environment in our markets

Robust private consumption growth (2017-22 CAGR)

Low levels of unemployment

Positive trends for real wages (2017-22 CAGR)

7.5

6.3

5.5 5.4

3.8

2.6

1.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Poland Hungary Slovakia Czech Republic Germany US Europe

Source: BMI, EIU and Oxford Economics, Colliers International, BerlinOnline Stadtportal

Priv

ate

cons

umpt

ion

grow

th 2

017-

22 p

.a. (

%)

Unemployment in Berlin fell to 7.7%, its lowest level since reunification (as of Oct-18)

Czech unemployment

lowest in EU

Positive inflation expectations underpin rental growth

0

1,000

2,000

3,000

4,000

2014 2015 2016 2017 2018(f) Industrial Mixed-use Office Other Retail Residential Completed

10

CEE real estate is an attractive investment destination

Record levels of investment in Czech real estate Prime yields are compressing across sectors

Stable rental growth in Prague

Rent (€/sqm/month)

Growth

1 year 5 year CAGR

High Street Shops 220.0 4.8% 4.1%

Shopping Centres 160.0 21.2% 4.4%

Retail Parks 10.5 2.4% 1.0%

Office 22.5 7.1% 1.4%

3.5%

Investment volume in the Czech Republic (€m)

Outlook

Prime yields (%)

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Q3 2010

Q2 2011

Q1 2012

Q4 2012

Q3 2013

Q2 2014

Q1 2015

Q4 2015

Q3 2016

Q2 2017

Q1 2018

Prime office yield Prime industrial yield Prime shopping centre yield Prime high street yield Source: Eurostat, Cushman & Wakefield, CBRE, Colliers International

19.0

30.9 34.3 32.3

40.4 46.2

0

15

30

45

60

Czech Republic EU-15 Germany

1995 2017

(US$ ‘000, PPP)

+70%

+31% +35%

GDP per capita converging with Western Europe

0.0%

1.0%

2.0%

3.0%

Mun

ich

St

ockh

olm

La

Def

ense

Be

rlin

Fr

ankf

urt

Paris

: WBD

Co

logn

e

Duss

eldo

rf

Birm

ingh

am

Prag

ue

Paris

CBD

He

lsink

i Co

penh

agen

Do

ckla

nds

Dubl

in

Mila

n

Ham

burg

Vi

enna

Br

usse

ls

Lisb

on

Oslo

M

adrid

M

arse

ille

Ro

me

Ed

inbu

rgh

Lo

ndon

: City

Ba

rcel

ona

Bu

dape

st

War

saw

Lu

xem

bour

g Lo

ndon

: WE

11

Expected office employment growth

Record levels of letting activity Strong rental growth outlook

Office prime rental growth end-2018 – end-2023 (% pa) Berlin office space take-up and vacancy rate, 000s sqm

Tightness of office space availability in Germany Availability of key 7 German centres(1), 000s sqm

1. Key 7 German centres include: Berlin, Munich, Frankfurt, Hamburg, Dusseldorf, Cologne and Stuttgart.

Source: PMA, CBRE.

Berlin office market supported by strong fundamentals

0

1,800

3,600

5,400

7,200

9,000

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

2017

20

18

2019

20

20

2021

20

22

2023

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Berlin Cologne Hamburg Frankfurt Munich Stuttgart Dusseldorf

0%

2%

5%

7%

10%

12%

0

200

400

600

800

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Q1 Q2 Q3 Q4 Vacancy Rate

Office employment growth end 2018 – end 2023 (% pa)

Asset Management Update

13

Local teams drive focused asset management

Increasing occupancy, rents and portfolio value

Asset management expertise and capabilities

Strong relationship with tenants, tenants mix optimized for each market

Bringing value to own tenants through investments and training

A tailor made asset management approach for each asset class within each geography A long-term approach focused on investments in our assets to maintain and increase value

Office

Retail

Hotel

Residential

• In the Czech Republic, Hungary and Poland we are focused on top-quality offices in the major/capital cities

• In Berlin, our focus in X-Berg and Rest-West is to continue bringing rents up to market levels while investing smart Capex; vacancy in these segments is mostly structural at this stage. In the Econoparks segment, our focus is on increasing occupancy, including efforts to relocate tenants who are “priced out” of the West Berlin locations

• Investing in amenities (such as food and beverage) offered in our “Congress” hotels to ensure a positive and productive experience

• Selective upgrading of city hotels to ensure a high standard of quality

• Continued investment in Hvar to support luxury positioning for these unique assets

• Focused on dominant shopping centres and convenience shopping

• Strong local teams who maintain good relationships with our tenants

• Actively upgrading our shopping centres to the latest market standards (redevelopments/ refurbishments/extensions)

• Focused on our existing Czech Republic residential portfolio

• We have invested consistently in the portfolio since the 1990s to improve quality and rents while reducing operational costs

Source: Company information

Reuchlin Berlin, Germany

Value (€m) 103

Nisa Liberec, Czech Republic

Value (€m) 102

Clarion Congress

Prague, Czech Republic

Value (€m) 97

Schlesische Strasse

Berlin, Germany

Value (€m) 93

Olympia Plzen Pilsen, Czech Republic

Value (€m) 146

Source: Company information Note: CPI as of 1H’2018

Zlaty Andel Prague, Czech Republic

Value (€m) 122

Ogrody Elbląg, Poland

Value (€m) 120

City Park Jihlava, Czech Republic

Value (€m) 113

Quadrio Prague, Czech Republic

Value (€m) 234

High quality portfolio well occupied by large global tenants

Regional headquarters of large global tenants

Quadrio, Prague • Best Office Development (CIJ Awards 2014) • ESSA Leading Green Building of the Year (CIJ Awards 2014) • Certificate LEED Silver 2015

Buddha Bar Hotel, Prague • Czech Republic’s Leading Boutique Hotel 2016 (World

Travel Awards) • Top 10 most romantic hotels in the world (Reader’s Digest)

GSG • Honor Certificate from the Chamber of Commerce and

Industry of Berlin • Winner of the Immobilienmanager Award 2016 for ‘Best

Management’ for GSG Solar – the biggest provider of solar power in Berlin

Selected awards

14

Retail, 41%

Office, 39%

Hotels & Resorts, 13%

Others, 7%

Czech Republic, 56%

Germany, 20%

Hungary, 11%

Poland, 5%

Other CEE, 5% Other WE, 3%

# Tenant % of total WAULT (in years)3

1 4.4

2 6.1

3 4.8

4 8.8

5 8.8

6 5.7

7 2.8

8 2.5

9 5.1

10 10.1

Total top 10 15.5% 5.9

4.0%

2.0%

1.9%

1.5%

1.5%

1.1%

1.1%

0.9%

0.8%

0.8%

Ahold Tesco

Generali Siemens

Cez Group Penny

Billa Takko

OBI Continental

Source: Company information Note: Based on data for CPI as of 1H’2018 (1) Other WE includes: France, Switzerland, Italy; Other CEE includes: Slovakia, Romania, Croatia and Russia (2) Other includes industry and logistics, agriculture and residential (3) WAULT reflecting the first break option

Diversification by segment (by net business income)

15

Well diversified by geography, segment, property and tenant

Top 10 tenants (based on rent)

Top 10 income generating assets (based on value)

Diversification by geography (by net business income)

# CPI Value (€m) % Total GLA in k sqm Location 1 Quadrio 234 3.3% 27 Prague, Czech Republic 2 Olympia Plzen 146 2.1% 41 Plzen, Czech Republic 3 Zlaty Andel 122 1.7% 21 Prague, Czech Republic 4 Ogrody 120 1.7% 42 Elbląg, Poland 5 City Park Jihlava 113 1.6% 29 Jihlava, Czech Republic 6 Reuchlin 103 1.5% 50 Berlin, Germany 7 Nisa 102 1.5% 50 Liberec, Czech Republic 8 Helmholtz 101 1.4% 37 Berlin, Germany 9 Clarion Congress Hotel 97 1.4% 35 Prague, Czech Republic 10 Schlesische Strasse 93 1.3% 25 Berlin, Germany

Top 10 as % of property value 1,231 17.6% 357

€156m

2

€156m

1 1

16 Source: Company information Note: CPI as of 1H’2018; Occupancy rates based on GLA (1) Value for 2017 calculated on the basis of EPRA vacancy (2) Czech Republic occupancy calculated as a straight average of all property sectors

EPRA Occupancy rate

94% 94% 94%

92% 92%

H1'2018 2017 2016 2015 2014

Group1

Czech Republic2

Berlin offices

Lease maturity profile

12% 18% 14% 10% 12% 15% 14% 5%

2018E 2019E 2020E 2021E 2022E 2023E 2024E+ Indefinite

8%

45%

16% 11% 6% 6% 6% 3%


Czech Republic

Berlin

Occupancy growing across our portfolio, even as rents continue rising

14% 19% 16% 14% 14% 7% 12% 4%


Group

95% 93%

90% 89% 89%

2018 2017 2016 2015 2014

91% 90%

88% 85%

83%

H1'2018 2017 2016 2015 2014

3.9 WAULT (years)

3.9 WAULT (years)

3.4 WAULT (years)

• Steady progress in Berlin, where our economic occupancy is closer to 92% (as of 30 June)

• Shorter-dated lease profile in Berlin is designed to capture rising rents in that market

• Tenant churn rate in Berlin was 7.5% for 2017 and below 7% for the last 12 months, which gives GSG ample comfort to sustain the level of renewal activity

• Strong like-for-like rental growth at around 5%, and higher in Berlin (10%), even as occupancy continues to increase

• In the Czech Republic we continue to outperform the market with occupancy at 94% versus the market average of 92% (as of 30 June)

• Occupancy stands at 95% in Hungary and at 92% in Poland, matching and even exceeding the market average (as of 30 June)

17

-2.00%

0.00%

2.00%

4.00%

Dubl

in

War

saw

M

adrid

Bu

dape

st

Barc

elon

a

Prag

ue

Paris

St

ockh

olm

M

ilan

Be

rlin

Br

usse

ls

Rom

e

Mun

ich

Am

ster

dam

M

arse

ille

Co

penh

agen

Fr

ankf

urt

Lille

Co

logn

e

Lisb

on

Ham

burg

Vi

enna

Ly

on

Man

ches

ter

Birm

ingh

am

Lond

on

Glas

gow

281 227 220

127

464 380 375

328 286 261

700

0 100 200 300 400 500 600 700 800

CPI % of retail assets in each country(3)

CPI geographies Western Europe 5% 2% 54% 8%

Density of retail below W.Europe / US Strong rental growth outlook

Retail prime rental growth end-2018 – end-2023 (% pa) Shopping centre GLA (sqm / 1,000 inhabitants)(2)

Czech Republic retail market is structurally sound

(1) Long-term average is based on 1996-2017 data (2) Source: for US, ICSC data for total shopping center GLA above 30,000 sq ft – for Europe, Cushman & Wakefield data (centres above 5,000 m²) (3) Share of property value of retail portfolio in Czech Republic, Hungary, Poland, Slovakia and Romania

Source: World Bank “Ease of doing business” index, PMA, and company information as of last reported.

Index Rating Country 1 Hong Kong

17 United Kingdom 19 France 24 Germany 40 Poland

110 Hungary 143 Slovakia 155 Uruguay 156 Czech Republic 157 West bank and Gaza 186 Somalia

0

50

100

150

200

250

300

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

E

2019

E

2020

E

0

Prague Rest of Czech Republic Long-term average(1)

Ease of obtaining construction permits Subdued development activity Shopping centre completions, 000 sqm GLA (1= easiest)

10.4%

2.6% 1.4% 1.3% 1.2%

(0.5%) (2.2%) (2.5%)

9.1%

CPI

Glob

al c

ompa

ny

Con

EU P

eer 1

Con

EU P

eer 2

Con

EU P

eer 3

Con

EU P

eer 4

UK

peer

1

UK

peer

2

Source: Company information, Euromonitor (1) Calculated as share of internet retail in total retail market based on value. Data for 2017. Select countries presented

18

Retail portfolio well positioned in response to e-commerce

CPIPG’s initiatives to support the future of retail

CPI tenant academy – we provide training to our tenants (and their shop attendants) on methods to increase sales and improve customer satisfaction

Click-and-collect shoppers – increase footfall by attracting the Clients who buy online by collect in-store

Continuous improvement of existing space – actively working with existing tenants to keep the retail space attractive

In store entertainment – enhancing the shopping experience and footfall by opening cinema complexes and kid zones in existing shopping malls

F&B and Leisure activities – offering exciting leisure activities and compelling F&B stores as a way to increase footfall in the shopping centers

CPIPG’s retail tenant sales growth (H1 2018)

3.7% 4.4%

6.2% 6.7% 8.3%

9.1%

13.3%

15.7% Online retail already mature in the Czech Republic with penetration higher than in more developed markets

CEE countries

WE countries

CEE avg

WE avg

CEE avg

WE avg

Mature Czech Republic online retail penetration1 CPI portfolio continues to show strong growth

Czech shopping centres portfolio

Group shopping centres portfolio

51.2

52.1

1H'2017 1H'2018

332.1

362.4

1H'2017 1H'2018

Annual turnover in CPI shopping centers (l-f-l, €m)

Footfall in CPI shopping centres (l-f-l, million)

19

Investing in the shopping centre experience

Quadrio, Prague

IGY Centre, České

Budějovice

Galerie Fénix, Prague

• New food court in Quadrio replaced a bookseller and other merchants on the first floor

• Further establishes Quadrio as a centre of gravity in Central Prague • Footfall has increased by more than 11.1%, exceeding

1 million/month

• Objective was to completely transform the centre • Renovated 29,000 sqm of retail space • Expanded the centre by more than 30% • The centre now houses 120 stores in addition to a 9 screen

multiplex cinema • Turnover increased by 75.4% post redevelopment

• Food court renovations completed in June 2018 • Ongoing refurbishments in the shopping centre will be completed

in the coming months • Connects to Clarion Congress Hotel, Prague which has also

benefited from recent refurbishment • Excellent location with solid transport connectivity


20

Investment and asset management success in Berlin

Geneststraße

• Located in Tempelhof-Schöneberg, a three minute walk from Berlin’s second largest train station (Südkreuz)

• Includes 101 commercial units including workshops, offices, business premises and production facilities

• Asset has been guided through an development from “value add” to “core plus” through pro-active asset management and upgrading of spaces

• The shift of the asset was accompanied by reasonable and sustainable space improvements (parquet floor, new bathrooms, outside facilities, cantina, etc.)

• Significant increase in rental income (over 35% for 1H 2018), with further upside expected for 2018/2019

Aqua Höfe

• When GSG acquired the asset in 2014, tenants were primarily small creative companies, artists, a techno club and a dance school

• GSG has focused on intensive asset management: merging smaller units into larger units, increasing rents to market levels, improvements of vacant units and common areas, and generating economies of scale across all cost lines (i.e., snow removal and cleaning)

• Beginning in 2016, GSG began a redevelopment phase which involves adding 6,000 sqm GFA and 5,000 sqm NLA to the existing building

• Rents achieved in the newly built space are well above the Berlin market average (which is about €18/sqm)


Prague

Celakovice

Lidice

Ričany

Libeř

Rudná

Úvaly

Development 13%

Land bank - Prague 48%

Land bank - Other 39%

84

238

294 472

366 310

456

612 615

15%

10% 8%

9% 9% 9%

2013 2014 2015 2016 2017 1H'2018

Developments and land bank (€m and % of total portfolio)

21

Minimal development exposure, high-quality land bank

CPIPG: Very low exposure to development risk

• 91% of total property value comprises income-producing assets

• Land bank comprises 87% (€532m) of non-income generating property – this is a source of flexibility and liquidity, with no immediate plans to develop

• Development (excl. land bank) represents only 1% of total property value

• No speculative development

• No bank financing encumbering any of our land bank

• Development also includes existing assets which are being refurbished

Land bank – Prague: the Bubny site

202k m2 Bubny site, situated in central Prague, constitutes significant part

of the overall land bank


Financial Management

Access to liquidity

Funding strategy

Dividends

Interest coverage

Leverage

Rating commitment

• Focused on funding via unsecured debt and maintaining a high level of unencumbered assets

• Proactive management of our maturity profile

23

Sect

ion

2

Key

cred

it hi

ghlig

hts o

f the

com

bine

d gr

oup

CPIPG’s financial policy

• Absolute commitment to strong investment grade ratings

• Focused on achieving “high BBB” ratings in coming years

• Our target remains a Net LTV of 45% or below

• We may tighten this target in the future, depending on acquisition activity

• CPI has no current plans to begin paying dividends

• Focus on using cash for debt repayment and capex, lower acquisition activity in 2018

• Revolving credit lines of €230m; nine regional and international banks in our facilities

• Strong focus on investor relations in the EUR market, actively considering strategies to diversify

• CPI intends to maintain an ICR well above 3x going forward

1

2

3

4

5

6


Financial policy remains a priority

24

Positive changes to our capital structure and ratings

Increasing share of unsecured debt

CPIPG Rating Evolution

CPIPG International Bond Issuance

Cost of Financing (all sources)

2017 2018 2019

Moody's S&P Japan Credit Agency

A+

A

A-

BBB+

BBB

BBB-

4.4%

3.9%

3.3% 2.9%

2.6%

1.6%

2013 2014 2015 2016 2017 2018

21% 41%

62%

69% 52%

38% 6% 5% 4% 2%

YE 2016 YE 2017 YE 2018

Unsecured debt Secured bank loans Secured bonds Other

Issue Date Ranking M S JCR Ccy Size (m) Cpn Mty

12 Feb 2019 Senior Unsecured Baa2 BBB -- HKD 450 4.51 Feb-24

10 Dec 2018 Senior Unsecured Baa2 BBB A- JPY 8,000 1.414 Dec-21

10 Dec 2018 Senior Unsecured Baa2 BBB A- JPY 3,000 1.995 Dec-28

25 Oct 2018 Senior Unsecured Baa2 BBB -- CHF 165 1.630 Oct-23

17 Oct 2018 Senior Unsecured Baa2 BBB -- EUR 600 1.450 Apr-22

9 May 2018 Junior Subordinated Ba1 BB+ -- EUR 550 4.375 Perp

4 Oct 2017 Senior Unsecured Baa2 -- -- EUR 825 2.125 Oct-24

Target “high BBB”

09/17 10/18

05/18

11/18

25

Funding

Geography

Asset class

Sourcing

Target Size

• Focus on buying assets unencumbered (unsecured funding at the CPIPG level)

• Banks have demonstrated ample capacity for bridge financing if/when required

• CPIPG does not have growth targets, and is pleased with the size/scale of our business

• Our focus is on long-term sustainability and performance

• We will only pursue acquisitions which fit our portfolio

• We continue to see proposals on individual assets and portfolios/companies

• Active dialogue with brokers, funds, and the banking community

• Focused on the Czech Republic and Berlin, although opportunities are limited

• Potential good opportunities in Poland and Hungary

• Focus on office and retail, selective in hotels

• 1H’2018 report provided guidance on the size/scale expected for our sectors over the long term

1

2

3

4

5


CPIPG’s acquisition strategy: selective and consistent

Appendix

27

Income statement as of 1H’2018

Income statement (€m) 1H‘2017 1H‘2018 % change Gross rental income 120 147 22.4%

Net rental income 106 135 27.0%

Net development income (1) (2) 100%

Net hotel income 14 14 2.4%

Net income from other business operations 4 8 66.8%

Total revenue 203 245 20.6%

Total direct business operating expenses (80) (89) 11.6%

Net business income 123 156 26.5%

Net valuation gain 229 95 (58.5%)

Net loss on the disposal of investment property (0) (0) -

Net gain on disposal of subsidiaries and investees (2) (0) (96.5%)

Amortization, depreciation and impairments (15) (12) (22.3%)

Other operating income 8 1 (89.9%)

Administrative expenses (22) (25) 12.8%

Other operating expenses (1) (4) 310.6%

Operating result 321 211 (34.3%)

Net finance income / (costs) (90) (25) (71.8%)

Profit before income tax 231 185 (19.9%)

Income tax expense (41) (24) (40.9%)

Net profit from continuing operations 190 161 (15.4%)

Consolidated adjusted EBITDA 101 131 29.7%

Commentary

• Total revenues increased by 21% (compared to 1H’2017) reaching €245m mainly driven by our successful acquisitions in 2017 and 2018, most notably the acquisition of shopping centres from CBRE GE in Q2 2017

• Net valuation gain of €95m results primarily from valuation gains on the office portfolio in Berlin and Prague plus residential portfolio in the Czech Republic mainly driven by performance improvements

• Operating result declined primarily due to lower level of property revaluation gains. For 1H’2018 the Group only re-values a selected number of high performing properties

• Total interest expense substantially decreased driven by significant refinancing activities in Q4 2017

1

1

2

2

3

3 4

4


28

Balance sheet as of 1H’2018

Balance sheet (€m) 1H‘2017 1H‘2018 % change Investment property 4,923 6,082 23.5%

Property, plant and equipment 682 770 12.9%

Other long-term assets 321 358 11.4%

Total non-current assets 5,926 7,210 21.7%

Cash & equivalents 235 473 101.4%

Inventories 100 80 (19.7%)

Trade receivables 75 74 (0.8%)

Other current assets 154 201 30.3%

Total current assets 563 829 47.2%

Total assets 6,490 8,038 23.9%

Interest bearing loans & borrowings 2,429 2,894 19.1%

Other non-current liabilities 622 772 24.1%

Total non-current liabilities 3,051 3,667 20.2%

Interest bearing loans & borrowings 646 303 (53.1%)

Other current liabilities 194 201 3.5%

Total current liabilities 840 504 (40.0%)

Total liabilities 3,891 4,170 7.2%

Equity attributable to owners of the Company 2,567 3,287 28.0%

Perpetual notes - 542 N.M.

Non-controlling interests 31 39 26.0%

Total equity 2,598 3,868 48.9%

Total liabilities & equity 6,490 8,038 23.9%

Commentary

• Substantial increase of investment properties mainly driven by sound acquisitions including commercial assets in Berlin for €168m (94.9% stake in ARMO) acquired in March 2017, the shopping centre Královo Pole in Brno (Czech Republic) for €59m, the shopping centre in Hradec Kralove (Czech Republic) for €121m, 2 office buildings for €78m in Warsaw (Poland), and 6 retail parks for €22m (Poland)

• Interest bearing debt changed following the issuance of €825m senior unsecured bonds in H2’2017, which were primarily used to repay secured and expensive debt

• Total equity increase mainly driven by net profit from the period, issuance of new shares of €50m (2018) and €100m (2017), as well as issuance of hybrid notes with impact of €538m

1 1

2

3

3

2

2


29

Cash flow statement as of 1H’2018

Cash flow statement (€m) 1H’2017 1H‘2018 % change Profit before income tax 231 185 (19.9%)

Net valuation gain / (loss) on investment property (229) (95) (58.5%)

(Gain)/loss on disposal of investment property & subsidiaries 2 (0) (96.5%)

Depreciation / amortisation / impairments 15 12 (22.3%)

Net finance costs 50 41 (17.4%)

Change in working capital 13 (14) (205.5%)

Income tax paid (1) (6) 508.9%

Other non-cash adjustments 38 (12) (130.6%)

Net cash from operating activities 119 112 (6.3%)

Acquisitions and capex of investment property & subsidiaries (153) (198) 29.1%

Disposal of investment property & subsidiaries 27 26 (3.7%)

Loans (provided) / repaid (30) (74) 146.4%

Capex on properties under development and PP&E (17) (14) (20.9%)

Interest received 3 7 139.4%

Other investing activities - - -

Net cash from investing activities (170) (252) 48.4%

Proceeds from issue of share capital 52 50 (3.8%)

Proceeds / (repayments) of bonds 19 (30) (257.9%)

Proceeds / (repayments) of borrowings (38) 4 (109.3%)

Interest paid (51) (37) (27.8%)

Other financing activities (1) 388 (38,919.3%)

Net cash from financing (18) 375 (2,182.6%)

Net increase in cash (69) 234 (439.3%)

Commentary

• Investments in terms of capital expenditure in 1H’2018 mainly comprise:

• Office: Primarily to German portfolio (€15.5m)

• Retail: Mainly in connection with refurbishment of Olympia Teplice (€3.9m), IGY in České Budějovice (€1.4m) and Galerie Fénix in Prague (€1.6m)

• Land bank: Mainly €3.3 million relating to the revitalization of Nová Zbrojovka in Brno

• Total capital expenditure and improvements in 1H’2018 led to an increase of GAV of €54m in the respective period

• The Group has currently capital expenditure commitments of €50m


30

Disciplined growth, focused on long-term sustainable income

GAV evolution over time

4,865

1,069

813

(142)

117 6,722 285 112

(60) (65)

6,994 > €7.5bn

Property value 2016

Acquisitions and additions

Change in fair value

Disposals Other changes

Property value 2017

Acquisitions and additions

Change in fair value

Disposals Other changes

Property value 1H'2018

Property value 2018

Germany 49%

Czech Republic

44%

Other 7%

Total property value (€m)

• Atrium Centrum & Atrium Plaza offices in Warsaw with a GLA of 31,869 sqm, completed in May 2018

• 5 retail parks in Poland (“HopStop Portfolio”) totalling about 19,000 sqm in GLA, completed in April 2018

• Futurum Hradec Králové shopping centre with a floor area of c. 39,000 sqm and 1,350 parking spaces, completed in April 2018

• 11 luxury apartments at Buxmead in North London, completed in December 2018

2018 Disposals 2018 Acquisitions • 5 small retail assets in regional cities of northern Czech Republic,

completed in June 2018

• Retail park in Český Těšín, completed in May 2018

• Budaörs Office Park, Hungary with a gross area of 18,512 sqm, completed in January 2018

• 3 small retail properties in the Czech Republic totalling approximately 16,000 sqm, completed in December 2018

• Regional convenience shopping outlets in December 2018

Czech Republic

58%

Germany 31%

Other 11%

Selected assets were revalued for 1H 2018 due to excellent

performance.


Additional acquisitions and valuation uplift as the full

portfolio was re-valued at year-end 2018.

31

Disclaimer

portfolio

The information and opinions in this presentation have been prepared by CPI Property Group ("CPIPG") solely to provide condensed general information on CPIPG and an overview of its operations. This presentation and its contents are intended for use for information purposes only and may not be reproduced, redistributed, published or passed onto any other person or published, directly or indirectly, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws. By attending a meeting where this presentation is made, or by accessing or reading the presentation slides on CPIPG’s website, you agree to be bound by the following limitations. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to or restricted by law or regulation or which would require any registration or licensing within such jurisdiction. Persons who receive this presentation should make themselves aware of and adhere to any such restrictions. THIS PRESENTATION IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, INTO THE UNITED STATES. This presentation and its contents may not be viewed by persons within the United States or “U.S. Persons” (as defined in Regulation S under the Securities Act of 1933, as amended (the “Securities Act”)). The securities issued by CPIPG or any of its subsidiaries (the “Securities”) have not been registered under the Securities Act and the Securities may not be offered or sold in the United States or to U.S. persons unless so registered, or an exemption from the registration requirements of the Securities Act is available. CPIPG does not intend to register any portion of the Securities in the United States or to conduct a public offering of any securities in the United States. By accessing the presentation, you represent that you are a non-U.S. person that is outside the United States. This presentation is not for publication, release or distribution in Australia, Canada or Japan. This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to sell securities of CPIPG, or the solicitation of an offer to subscribe for or purchase securities of CPIPG, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation does not constitute a recommendation or investment advice regarding any securities of CPIPG. This presentation is for promotional purposes only and is not a prospectus for the purposes of applicable measures implementing EU Directive 2003/71/EC, as amended, and as such does not constitute an offer to sell or subscribe for or a solicitation of an offer to purchase or subscribe for securities. Any decision to purchase any securities of the CPIPG should be made solely on the basis of the final terms and conditions of the securities and the information to be contained in the prospectus or equivalent disclosure document produced in connection with the offering of such securities. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of CPIPG and the nature of the securities before taking any investment decision with respect to securities of CPIPG. CPIPG’s financial statements or prospectus (or equivalent disclosure documents) may contain information different from the information contained herein and the financial statements or prospectuses shall prevail. Subject to applicable law, CPIPG accepts no responsibility whatsoever and makes no representation or warranty, express or implied, for the contents of the presentation, including its accuracy, completeness or verification or for any other statement made or purported to be made in connection with CPIPG and nothing in this presentation shall be relied upon as a promise or representation in this respect, whether as to the pastor the future. CPIPG disclaims all and any liability (including any liability for damages for misrepresentation under the UK Misrepresentation Act 1967) whatsoever, whether arising in tort, contract or otherwise which it might otherwise have in respect of the presentation or any such statement. This presentation contains certain statistical and market information. Such market information has been sourced from and/or calculated based on data provided by third-party sources identified herein or by CPIPG, if not attributed exclusively to third-party sources. Because such market information has been prepared in part based upon estimates, assessments, adjustments and judgments which are based on CPIPG or third-party sources’ experience and familiarity with the sector in which CPIPG operates and has not been verified by an independent third party, such market information is to a certain degree subjective. While it is believed that such estimates, assessments, adjustments and judgments are reasonable and that the market information prepared appropriately reflects the sector and the market in which the CPIPG operates, there is no assurance that such estimates, assessments, adjustments and judgments are the most appropriate for making determinations relating to market information or that market information prepared by other sources will not differ materially from the market information included herein. This presentation contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words "targets", "believes", "expects", "aims", "intends", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond CPIPG's control that could cause CPIPG's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding CPIPG's present and future business strategies and the environment in which it will operate in the future. These forward-looking statements speak only as at the date of this presentation. CPIPG expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.

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