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Deutsche EuroShop | Company Presentation | 02/11

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  • 1. 02/11 feelestate.de
  • 2. Company I Equity Story p y q y y Deutsche EuroShop is Germany´s only public company that invests solely in shopping centers centers. Shopping centers are attractive investments because of b f continuously positive development of rents stable long term growth prime locations high quality standardsCompany Presentation | 02/11 page 2
  • 3. Company I At a Glance p y 18 shopping centers on high street and in established locations – 14 in Germany 2 in Poland and one each Germany, in Austria and Hungary Lettable space approx. 842,000 approx 842 000 sqm* Retail shops approx. 2,145* Market value a et a ue app o €3 3 b o approx. €3.3 billion* Rents per year €219 million* Occupancy rate > 99% 2009 portfolio valuation: 5.82% net initial yield FFO yield 2009: approx. 6.3% Professional center management by ECE, the European market leader in this industry*incl. development/extension of Wildau, Dresden and Sulzbach, 100%-viewCompany Presentation | 02/11 page 3
  • 4. Company I Key Figures p y y g Revenue EBIT 110.7 NAV per share 127.6 28 27.43 115.3 98.1 98 1 26.91 120 100 26.63 26 63 95.8 86.3 100 92.9 78.5 26 25.53 80 80 72.1 60 57.5 24 60 23.11 40 40 +15%1) +18%1) 22 +3.6%1) 20 20 0 0 20 €m 2005 2006 2007 2008 2009 €m 2005 2006 2007 2008 2009 € 2005 2006 2007 2008 2009 FFO per share Dividend per share 1,10 1.491,50 1.38 1.05 1.05 1.05 1.05 1.12 1,05 1 05 1.081,00 0.97 1.00 1,000,50 +11%1) 11% 0,95 0 95 +1.2%1) 1 2%0,00 0,90 € 2005 2006 2007 2008 2009 € 2005 2006 2007 2008 20091) 2005-2009, Compound Annual Growth Rate (CAGR)Company Presentation | 02/11 page 4
  • 5. Company I Lease System p y y 5rent 4 General form of lease contracts turnover-linked rent for DES-tenants 3 2 Participation in sales growth of 1 retail industry CPI-linked minimum rent 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 years Lease standards: 10 years lease only no break-up option turnover-linked rents t li k d t minimum rents are CPI-linkedCompany Presentation | 02/11 page 5
  • 6. Company I Lease System p y y avg. rent per sqm and year: €250 avg. avg turnover per sqm and year: €4 700 €4,700 avg. avg German retail: €3,330 Rent-to-sales-ratio: 7-11% weighted maturity of rental contracts: 6.7 years € million5% 127.6 115.34% 115 95.8 2.8% 92.93% 2.6% 2.4% 90 2.2% 2.0%2% 1.8% 72.1 1.8% 61.4 65 57.91%0% 40 2003 2004 2005 2006 2007 2008 2009 Revenue Rate of turnover-linked rentCompany Presentation | 02/11 page 6
  • 7. Company I Targets p y g Long term net asset value enhancement Main focus on NAV and dividend “buy & hold”-strategy Continuous growth Stable and attractive dividends Dividend yield: currently 4.0% Investment-focus: At least 75% Germany and up to 25% Europe Portfolio extension by 10% per year by acquisition of new shopping centers by increasing existing amounts of holdings by expansion of portfolio centersCompany Presentation | 02/11 page 7
  • 8. Shopping Centers I Overview pp g 1. Wildau/Berlin 2. Sulzbach/Frankfurt 3. Viernheim 4. Dresden 5. Hamburg Poland 6. Hamm 7. Wetzlar 8. Dessau 8 D 9. Wolfsburg Germany 10. Kassel 11. 11 Wuppertal 12. Passau 13. Hameln Hungary 14. 14 Gdansk Austria 15. Klagenfurt 16. Pécs 17. Wroclaw 18. HamburgCompany Presentation | 02/11 page 8
  • 9. Shopping Centers I Germany pp g y A10 Center Main-Taunus-Zentrum Altmarkt-GalerieLocation Wildau/Berlin Sulzbach/Frankfurt DresdenInvestment 100% 52.0% 52 0% 67.0% 67 0%Lettable space sqm 120,000* 117,000** 76,500**Parking 3,800* 4,500** 500Number of shops approx. 180 approx 180* approx. 180 approx 180** approx. 220 approx 220**Occupancy rate 100% 100% 100%Catchment area approx. 1.2 m. inhabitants approx. 2.2 m. inhabitants approx. 1.0 m. inhabitantsOpening / refurbishm. p g 1996 / 2011 1964 / 2004 / 2011 2002 / 2011*incl. new development (A10 Triangle, opening spring 2011)**incl. extension (MTZ opening autumn 2011 / Dresden opening spring 2011)Company Presentation | 02/11 page 9
  • 10. Shopping Centers I Germany pp g y Rhein-Neckar-Zentrum Phoenix-Center Billstedt-CenterLocation Viernheim Hamburg HamburgInvestment 99.9% 99 9% 50.0% 50 0% 100%Lettable space sqm 69,000 38,700 38,100Parking 3,500 1,600 1,500Number of shops approx. approx 110 approx. approx 110 approx. approx 110Occupancy rate 100% 100% 100%Catchment area approx. 1.4 m. inhabitants approx. 0.6 m. inhabitants approx. 0.7 m. inhabitantsOpening / refurbishm. p g 1972 / 2003 2004 1969 / 1977 / 1996Company Presentation | 02/11 page 10
  • 11. Shopping Centers I Germany pp g y Allee-Center Forum Rathaus-CenterLocation Hamm Wetzlar DessauInvestment 88.9% 88 9% 65.0% 65 0% 94.9% 94 9%Lettable space sqm 34,000 34,300 30,400Parking 1,300 1,700 840Number of shops approx. approx 85 approx. approx 110 approx. approx 80Occupancy rate 100% 100% 98%Catchment area approx. 1.0 m. inhabitants approx. 0.5 m. inhabitants approx. 0.5 m. inhabitantsOpening / refurbishm. p g 1992 / 2003 / 2009 2005 1995Company Presentation | 02/11 page 11
  • 12. Shopping Centers I Germany pp g y City-Galerie City-Point City-ArkadenLocation Wolfsburg Kassel WuppertalInvestment 89.0% 89 0% 100% 100%Lettable space sqm 30,800 28,200 28,700Parking 800 220 650Number of shops approx. 90 approx. 70 approx. 80Occupancy rate 100% 100% 100%Catchment area approx. 0.3 m. inhabitants approx. 0.8 m. inhabitants approx. 0.7 m. inhabitantsOpening / refurbishm. p g 2001 / 2006 2002 / 2009 2001 / 2004Company Presentation | 02/11 page 12
  • 13. Shopping Centers I Germany pp g y Stadtgalerie Stadt-GalerieLocation Passau HamelnInvestment 75.0% 75 0% 94.9% 94 9%Lettable space sqm 27,300 25,900Parking 500 500Number of shops approx. 90 approx. 100Occupancy rate 100% 100%Catchment area approx. 0.4 m. inhabitants approx. 0.4 m. inhabitantsOpening / refurbishm. p g 2008 2008Company Presentation | 02/11 page 13
  • 14. Shopping Centers I Europe pp g p Galeria Bałtycka City Arkaden ÁrkádLocation Gdansk, Poland Klagenfurt, Austria Pécs, HungaryInvestment 74.0% 74 0% 50.0% 50 0% 50.0% 50 0%Lettable space sqm 39,500 36,900 35,000Parking 1.000 880 850Number of shops approx. 200 approx. 120 approx. 130Occupancy rate 100% 100% 100%Catchment area approx. 1.1 m. inhabitants approx. 0.4 m. inhabitants approx. 0.5 m. inhabitantsOpening p g 2007 2006 2004Company Presentation | 02/11 page 14
  • 15. Shopping Centers I Europe pp g p Galeria DominikanskaLocation Wroclaw, PolandInvestment 33.3% 33 3%Lettable space sqm 32,000Parking 900Number of shops approx. 100Occupancy rate 100%Catchment area approx. 1.3 m. inhabitantsOpening p g 2001Company Presentation | 02/11 page 15
  • 16. Shopping Centers I Acquisition of Billstedt-Center pp g q originally opened in 1969 and 1977, reopening: 1996 (after a major refurbishment and expansion) approx. 40,000 sqm retail space on 2 levels (incl. Karstadt which is owned by a third party) 735,000 735 000 people are living in the catchment area occupancy rate: 100% (incl. office and residential) investment: approx. €160 million expected annualised rents for 2011: approx. €11 million expected gross yield (2011): 6.9% expected net initial yield (2011): 6.0%Company Presentation | 02/11 page 16
  • 17. Shopping Centers I Acquisition of A10 Center Wildau pp g q one of the biggest shopping centers in Germany grand opening: autumn 1996, new development (A10 Triangle): spring 2011 approx. 120,000 sqm lettable space ( pp , q p (incl. Triangle), g ), thereof 66,000 sqm retail space Total investment: approx. €265 million (incl. Triangle) Nov 2010 (pre-)letting status: 100% Triangle approx 90% (pre )letting 100%, approx. expected annualised rents from 2011 €19.4 million expected gross yield (incl. Triangle): 7.3% expected net initial yield (NOI, incl. Triangle): 6.5%Company Presentation | 02/11 page 17
  • 18. Shopping Centers I Extension Altmarkt-Galerie Dresden pp g lettable area: add t o a 32,000 m² ettab e a ea additional 3 ,000 (currently 44,500 m²) 90 new shops extension includes 2 900 m² office space and 2,900 5,300 m² for a hotel (signed) Approx. €165 million total investment volume (approx. (appro €110 million for DES) opening planned for spring 2011 Jan 2010 pre-letting status: approx. 95% expected net initial yield: approx. 5.6%Company Presentation | 02/11 page 18
  • 19. Shopping Centers I Extension Main-Taunus-Zentrum pp g selling area: additional 12,000 m² g , (currently 79,000 m²) 70 new shops approx. approx €74 million total investment volume (approx. €38.5 million for DES) opening planned for autumn 2011 Nov N 2010 pre-letting status: approx. 70% l i 0% expected net initial yield: approx. 8.9%Company Presentation | 02/11 page 19
  • 20. Shopping Centers I Our Tenants pp g Well-known tenantsCompany Presentation | 02/11 page 20
  • 21. Shopping Centers I Tenants Structure Top 10 tenants* pp g p Metro-Group 4.6% Douglas-Group 4.6% Peek & Cloppenburg 2.5% 2 5% Low level of H&M 2.5% dependence on the top 10 tenants New Yorker 2.2% Inditex 2.0% 2 0% Deichmann 2.0% C&A 1.8% dm-Drogeriemarkt dm Drogeriemarkt 1.4% 1 4% Esprit 1.3% Other tenants total 24.9% total 75.1%*in % of total rents as at 31 Dec 2009, excluding A10, Billstedt and extensionsCompany Presentation | 02/11 page 21
  • 22. Shopping Centers I Maturity Distribution of Rental Contracts* pp g y 2015 et sqq: 62.7% Long-term contracts guarantee rental income 2010: 2.9% 2011: 9.3% Weighted maturity 6.7 years y 2012: 13.3% 2013: 3.2% 2014: 5.6%*as % of rental income as at 31 Dec 2009, excluding A10, Billstedt and extensionsCompany Presentation | 02/11 page 22
  • 23. Shopping Centers I Sector and Retailer Mix* pp g non-food/electronics 21% department stores 10% food 7% health & beauty 6% catering 4% fashion services 51% 1% inter-/national Balanced sector and retailers retailer diversification 47% localentrepreneurs p 27% regional retail chains % 26%*in % of lettable space as at 31 Dec 2009, excluding A10, Billstedt and extensionsCompany Presentation | 02/11 page 23
  • 24. Financials I Key Figures 9M 2010 y g € million 01.01.-30.09.2010 01.01.-30.09.2009 +/- Revenue 106.6 94.4 13% Net operating income 94.9 83.8 13% EBIT 91.5 80.9 13% Net finance costs -44.6 -41.6 -7% EBT before valuation 46.9 39.3 20% Valuation result -0.7 6.9 -110% EBT 46.3 46.2 0% Consolidated profit 38.3 38 3 38.5 38 5 0% FFO per share (€) 1.06 1.07 -1% Earnings per share (€) 0.87 1.05 -17% € million 30.09.2010 31.12.2009 +/- Total equity 1,172.4 1,044.4 12% Interest bearing debt g 1,091.0 , 934.2 17% Other debt 56.5 48.0 18% Total assets 2,410.4 2,112.1 14% Equity ratio 48.6% 49.5% LTV ratio 47% 46%Company Presentation | 02/11 page 24
  • 25. Financials I Loan Structure* bank debt: €929 million Principle amounts Share of avg. avg Interest lockin Duration (€ thousand) total loan interest rate avg. interest rate Up to 1 year 1.0 13,399 1.4% 5.27% 5.27% 1 to 5 years 4.3 43 424,071 424 071 45.7% 45 7% 5.48% 5 48% Weighted maturity 5 to 10 years 7.8 382,151 41.1% 5.10% 7.1 years Over 10 years 16.8 109,400 11.8% 5.06% Total 2009 7.1 929,022 100% 5.27% Total 2008 7.0 894,945 5.33%*as of 31 December 2009Company Presentation | 02/11 page 25
  • 26. Financials I Valuation – Investment Properties p Rating External appraisers: Feri Research and 50% DES‘ portfolio was rated very good (A) 50% GfK GeoMarketing Profitability Property Ratingdiscounted cash-flow method 2008 2009 actual Macro-location 20.0%expected yield of 10-year Competitive environment 6.4%German federal bonds 4.58% 4.48% 3.21%1)average applied risk premiums 2.10% 2.38% Micro-location 9.6%average discount rate 6.68% 6.80% Property q p y quality y 4.0%average inflation rate 1.70% 1.70% +1.70%2) Tenants risk 10.0%average property operatingand management costs 13.10% 11.40% 11.40% ) 13 10% 11 40% 11 40%4)net initial yield 5.64% 5.82% 5.82%4)1) Status: 2 February 20112) German Federal Statistical Office, December 2010)Company Presentation | 02/11 page 26
  • 27. Forecast € million 149-152 160 Revenue 140-144 140 127.6 115.3 120 92.9 92 9 95.8 95 8 100 80 72.1 CAGR 60 +29% +3% +20% +11% +11% +6% +15% 40 150 127-130 130 EBIT1) 110.7 120-123 110 98.1 90 73.6 77.2 70 57.5 CAGR 50 +28% +5% +27% +13% +10% +6% 30 +16% +28% 75 1) 2) 64-66 65 EBT 61-63 54.8 55 49.9 45 37.7 35 28.1 28 1 36.1 CAGR 25 +28% +4% +32% +10% +13% +5% +17% 15 €1.60 FFO per share 1.49 1.45-1.501,60 1.38 1.37-1.40 1.08 1.121.101,10 0.97 CAGR +11% +4% +23% +8% -7% +6%0.600,60 +7%3) 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 20111) 2) 3) adjusted for one-time proceeds from disposals excl. valuation result incl. dilutionCompany Presentation | 02/11 page 27
  • 28. Shopping Center Share I Shareholder Structure pp g 10,100 shareholders Otto family Germany Private 17.3% 72% Free float 82.7% Investors BlackRock 28.8% 3.3% Karoo 2.9% Institutional Investors 47.7% Other 3% USA NO 6% 1% ZA CH FR 3% 3% BE UK 4% 4% 3%*Status: 1 Feb 2011Company Presentation | 02/11 page 28
  • 29. Shopping Center Share I Dividend & Performance pp g dividend Share price in € in € 1,25 28.98 30,00 28.08 23.73 24.30 25,00 1,15 23.50 23.67 1.10* 19.26 19 26 20,00 20 00 16.88 1.05 1.05 1.05 1.05 1,05 1.00 15,00 0.96 0.96 0.96 0,95 10,00 0,85 5,00 2003 2004 2005 2006 2007 2008 2009 2010 2011 Performance DES: DAX: 1 year (2010): +28.1% +16.1% 3 years: +41.2% = +12.2% p.a. –5.0% p.a. 5 years: +50.6% = +8.5% p.a. +5.0% p.a.* = planned proposal for AGMCompany Presentation | 02/11 page 29
  • 30. Shopping Center Share I Analysts‘ Consensus pp g y avg. / in € 2010 2011 EBIT (€ million) 124.0 139.6 FFO per share 1.38 1 38 1.50 1 50 Buy: 7 EPS 1.58 1.92 Dividend 1.09 1.14 Outperform: 3 Price target 26.95 Neutral: 13 Underperform: 3 Sell: 0 ABN Amro equinet Rabobank 26 analysts: Aurel Hamburger Sparkasse Silvia Quandt Bank one of the best covered Bankhaus Lampe HSBC Societe Generale real estate Bank of America Merrill Lynch HSH Nordbank UBS companies in Europe Berenberg Bank Kempen & Co. Unicredit Close Brothers Seydler Kepler Capital Markets WestLB Commerzbank C b k Macquarie M i Credit Suisse Metzler Deutsche Bank M.M. Warburg & Co DZ Bank Petercam BankStatus: 12 Jan 2011Company Presentation | 02/11 page 30
  • 31. Appendix I Key Data of the Share pp yListed since 02.01.2001 02 01 2001Nominal capital €51,631,400.00Outstanding shares 51,631,400Class of shares Registered sharesDividend 2010 (planned proposal) €1.1052W High €29.0052W Low €21.66Share price (02.02.2011) €27.66Market capitalisation €1.4 billionavg. turnover per day last 12 months 116,000 sharesIndices MDAX, EPRA, GPR, MSCI Small Cap Prime StandardOfficial market Frankfurt and XETRA Berlin-Bremen, Dusseldorf, Hamburg,OTC market Hanover, Munich and StuttgartISIN DE 000 748 020 4Ticker DEQ, Reuters: DEQGn.DEMarket makers Close Brothers Seydler, WestLBCompany Presentation | 02/11 page 31
  • 32. Appendix I Environment pp Climate protection is one of the most important issues for Deutsche EuroShop. We believe that sustainability and profitability, the shopping experience and environmental awareness do not have to be opposites. Long-term thinking is part of our strategy. This includes playing our part in environmental protection. All our German shopping centers have contracts with suppliers that use pp g pp regenerative energy sources such as hydroelectric power for their electricity needs. The “EnergieVision” organisation certified the green electricity for eleven of our German centers with the renowned “ok-power” accreditation in 2009. We plan to switch the centers in other countries to p green electricity as well in the next few years. The twelve participating centers used a total of around 49 million kWh of green electricity. This represented 100% of the electricity requirements in our German shopping centers. As a result, based on conservative calculations this meant a reduction of around 19,300 tonnes in carbon dioxide emissions – this equates to the annual CO2 emissions of just under 900 two-person households. We have already reduced the energy consumption of our shopping centers by using heat exchangers and energy-saving light bulbs. Deutsche EuroShop, through its shopping centers, also supports a range of activities at local and regional level in the areas of ecology, society and economy. economyCompany Presentation | 02/11 page 32
  • 33. Appendix I Financial Calendar 2011 pp22.02. Roadshow Paris, Bankhaus Lampe 31.05. Roadshow Stockholm, ABN-Amro23.02. Roadshow Amsterdam, Kempen & Co. 09.06. Roadshow Vienna, Berenberg Roadshow London, Metzler , 16.06. Annual General Meeting, Hamburg g, g28.02. Roadshow Zurich, WestLB 16.06. Supervisory Board meeting, Hamburg01.03. HSBC S&M Real Estate & Construction 21.-22.06. Bankhaus Lampe Hamburg Investment Conference, Frankfurt Conference17.-18.03. Kempen & Co. Property Seminar, 11.08. Interim report H1 2011 New Y k N York 22.09. Supervisory Board meeting, Hamburg12.04. WestLB German Property Day, London 06.-07.10. Société Générale Pan European Real27.04. Supervisory Board meeting, Hamburg Estate Conference, London29.04. Annual earnings press conference, 19.10. Real Estate Share Initiative, Frankfurt Hamburgg 10.11. 10 11 Nine month Nine-month report 201102.05. Roadshow Munich, Baader Bank 14.11. Roadshow Zurich, Rabo13.05. Interim report Q1 2011 17.11. Supervisory Board meeting, Hamburg17.05. Roadshow Luxembourg, 23.11. Roadshow Brussels, Petercam Close Brothers Seydler24.05. Metzler Property Day, Frankfurt25.05. Kempen & Co. European Property Seminar, AmsterdamCompany Presentation | 02/11 page 33
  • 34. Appendix I Contact ppDeutsche EuroShop AGInvestor & Public RelationsOderfelder Straße 2320149 Hamburg Claus-Matthias Böge Chief Executive OfficerTel. +49 (40) 41 35 79 - 20 / -22Fax +49 (40) 41 35 79 - 29E-Mail: ir@deutsche-euroshop.com @ pWeb: www.deutsche-euroshop.com facebook.com/euroshop Olaf G. Borkers flickr.com/desag Chief Financial Officer slideshare.net/desag twitter.com/des_ag youtube.com/DeutscheEuroShopImportant Notice: Forward-Looking StatementsStatements in this presentation relating to future status or Patrick Kisscircumstances, including statements regarding manage- g g g g Head of Investor & Public Relationsment’s plans and objectives for future operations, salesand earnings figures, are forward-looking statements ofgoals and expectations based on estimates, assumptionsand the anticipated effects of future events on current anddeveloping circumstances and do not necessarily predictfuture results.Many factors could cause the actual results to be materially Nicolas Lissnerdifferent from those that may be expressed or implied by Manager Investor & Public Relationssuch statements.Deutsche EuroShop does not intend to update theseforward lookingforward-looking statements and does not assume anyobligation to do so.Company Presentation | 02/11 page 34

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