Akiş REIT 2Q18 Performance Presentation August 2018 1
Breaking News New Investment Project The project is located in the uprising Aldgate region (London) which is 20-25 min away from central London The project includes c.40 residential units most of which will be pre-sold to Asian investors The project will be undertaken with 40%/60% equity/debt ratio where the financing will be fully met from banks in the project country New Credit Facility Akiş REIT has secured a US$40mn loan from HSBC bank to extend average debt maturity The loan will be repaid over a period of six years with a bullet payment structure Share Buy Back Akiş REIT initiated a buy-back in 3rd of August in order to protect the right of its investors from market fluctuation The ceiling amount is 9.500.000 for number of shares and the allocation ceiling for such transaction has been determined as TL30mn The current size of total buy back is 542.792 shares corresponding to 0,0126% of equity 2
Breakdown of Portfolio 61,5% 23,5% 9,8% 4,6% 0,6% Akasya Shopping Center Akbati Shopping Center Suadiye Beymen Other Assets Inventories 3
Turkey Shopping Mall Market Overview Number of Shopping Malls 379 363 345 415 463 465 Shopping Malls Turnover (TLbn) 15.4% 119,2 14.8% 103,8 137,5 9.4% 150,4 2014 2015 2016 2017/09 2018E 2019E Breakdown of Investments by Investor (sqm) 2.722.001; Foreign; 23,1% 471.750; Mix; 4,0% 2016 2017 2018E 2019E Competition is getting more intense every year Planned supply and demand dynamics should be more carefully analysed than ever Shopping Malls are not just malls but living spaces where technology and social media intersect Location; closeness to customer is more important than ever İstanbul is home to c.40% of Gross Leasable Area 8.600.000; Local; 72,9% Source: https://assets.kpmg.com/content/dam/kpmg/tr/pdf/2018/01/sektorel-bakis-2018-perakende.pdf Akasya Shopping Mall still holds its title as the only almost fully let A+ shopping mall status on the Anatolian side of Istanbul whereas Akbatı Shopping Mall is still the very first and only attraction centre in its hinterland 4
Overview of Our Commercial Portfolio Akasya Commercial Center Akbatı Commercial Center Suadiye Beymen Opening Date 2014 Number of Shops 260 Opening Date 2011 Number of Shops 173 Opening Date 2017 Number of Shops 1 Gross Leasable Area (sqm) 80.000 Gross Leasable Area (sqm) 65.500 Gross Leasable Area (sqm) c.5.000 Occupancy Rate 95% Occupancy Rate 99% Occupancy Rate 100% Rent per sqm US$66/month Rent per sqm US$32/month Rent per sqm US$60/month Rent for last Full Year US$57mn Rent for last Full Year US$23mn Rent for last Full Year n.a. International Awards 91 International Awards 87 International Awards - 5
Akasya Shopping Mall 6
Akasya Shopping Mall Akasya Shopping Mall stores total turnover rose by c.10% in 2Q18 (YoY) 2Q15 2Q16 2Q17 2Q18 Akasya Turnover Income breakdown 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Rental Revenue Revenue on Turnover Turnover Top-Up Revenue Other Revenue Occupancy Ratio ~ Near All Times High, Vacant stores already rented 97,3% 96,4% 96,5% 96,0% 95,9% 96,7% 95,9% 96,4% 95,4% 95,3% 98,5% 97,7% 97,9% Crate & Barrel exit impact, vacant store already rented, but not reflected in the figure below 94,8% Average Store Tenure (month) 8,46 10,85 10,71 10,44 6,79 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2014 (9M) 2015 2016 2017 2018 (7M) 7
Akasya Shopping Mall Store Mix by Size (sqm) 21% 21% 20% 20% 14% 14% 14% 15% 7% 7% 8% 9% 51% 49% 50% 49% 2Q15 2Q16 2Q17 2Q18 1,000 10,000 500-1,000 250-500 100-250 50-100 0-50 8
Akasya Shopping Mall Income yield Akasya Shopping Mall (US$mn) 2015 2016 2017 2Q18 Revenue 58,4 58,9 57,5 13,4 NOI 44,5 45,0 45,3 10,5 EBITDA 45,5 45,9 46,0 10,7 Latest Appraisal Value 603,8 627,6 631,0 617,2 Yield 7,54% 7,31% 7,30% 7,65% Akasya Shopping Mall posted a turnover increase c.10% YoY despite a tiny c.2.4% fall in terms of visitors Yet, there has been slight increase (c.1.4%) in car entrance figure Thus, core Akasya visitors remained almost unchanged Net Operational Margin stood out at c.78.4% vs. c.77.1% average over the last three years due mainly to; Effective cost management Rise in complimentary income 9
Akbatı Shopping Mall 10
Akbatı Shopping Mall Akbatı Shopping Mall stores total turnover rose by c.19% in 2Q18 (YoY) Income breakdown 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 2Q15 2Q16 2Q17 2Q18 0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Rental Revenue Revenue on Turnover Turnover Top-Up Revenue Other Revenue Occupancy Ratio ~ Near All Times High 98,5% 98,3% 98,0% 97,6% 97,6% 98,3% 98,6% 98,4% 96,3% 97,9% 98,0% 99,1% 98,7% 99,1% Average Store Tenure (month) 11,22 10,60 10,68 10,58 11,01 10,64 6,51 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2012 2013 2014 2015 2016 2017 2018 (7M) 11
Akbatı Shopping Mall Store Mix by Size 16% 14% 14% 13% 9% 10% 10% 11% 11% 12% 12% 12% 58% 58% 58% 57% 2Q15 2Q16 2Q17 2Q18 1,000 10,000 500-1,000 250-500 100-250 50-100 0-50 12
Akbatı Shopping Mall Income yield Akbatı Shopping Mall (US$mn) 2015 2016 2017 2Q18 Revenue 23,8 24,1 23,2 5,7 NOI 16,5 16,7 16,9 4,0 EBITDA 16,6 16,8 17,1 4,1 Latest Appraisal Value 267,4 253,5 239,4 235,3 Yield 6,22% 6,64% 7,13% 6,77% Akbatı Shopping Mall posted significant turnover increase (c.19%) YoY coupled with c.2% rise in the # of visitors due to; Akbatı s unique shopping mall status in its hinterland Net Operational Margin remained around c.71% in line with the average over the last 3 years thanks to ongoing efforts on; Effective cost management Rise in complimentary income 13
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Our Portfolio vs. Market Turnover Change YoY 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% AYD Akasya Akbatı Visitors Change YoY 25% 20% 15% 10% 5% 0% -5% -10% AYD Akasya Akbatı 14
High Street Retail Projects We are developing four retail oriented units that will fit the texture of the city and reflect the company s vision; in Erenköy, Caddebostan and Suadiye, located on Bağdat Street, one of the most coveted shopping streets in Istanbul with a total investment value of US$185mn (US$170mn realized). Expected Opening Dates: 2018-2019 Exp. Yearly Rental Income: USD7mn Gross Leasable Area: 12.000 m2 Gross Sellable Area: 2.000 m2 Expected Sales Revenue: USD16mn Our Track Record on High Street Retail Opened in September 2017, Suadiye Beymen adds to the prestige of Bağdat Street with its spectacular interior and exterior architecture 15-year lease contract with a well known retailer: Beymen USD3.6mn rental income per annum (c.7.75%) yield based on latest appraisal value) 15
Beykoz Projects We plan on developing a residential/commercial project in Beykoz, one the most upmarket districts in Istanbul, seizing the opportunity of supply deficit in the region. The expected date for the project kick-off is 2019. Project Kick-Off Date: 2019 Project Area: 45.000 m2 Total Investment Value: TL230mn (TL85mn realized) Expected IRR: 25% (in TL terms) Expected Project Income: TL350mn Investment Rationale: Limited modern residential supply in the area Most of the available land plot is protected area Residential density one the lowest of Istanbul Looking over the forest and the sea New and upcoming infrastructure will make commuting easier 16
Financial Performance Overview Net profit of 1H18 is mainly due to revaluation gain of Investment Properties c.tl182mn stem from one-off merger profit c.tl597mn re-appraisal gain 466,0 EBITDA margin improved thanks to c.26% rise in store rent revenues and significant jump in other revenues coupled with a good cost management 73,7% 75,4% 66,4% 66,1% 62,1% (TLmn) 263,7 34,3% 37,2 12,8 41,3 146,8 91,2 186,4 123,1 1H16 1H17 1H18 1H16 1H17 1H18 Revenue EBITDA Net Income Gross margin EBITDA margin EBITDA/Interest Expense Average Debt Maturity has fallen significantly due to hefty previously long term payments being now recorded as short term. We target to lengthen average debt maturity in 2018. 1,9 1,9 2,62 2,51 1,97 1,2 1H16 1H17 1H18 1H16 1H17 1H18 17
Akiş REIT Share Summary 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Opening Low High Closing Average 18
Communication Ozan Hançer Director Strategic Planning, Business Development and Investor Relations E-mail: ozan@akisgyo.com Telephone: +902123930100 Sercan Uzun, CFA Assistant Manager Investor Relations, Strategic Planning and Business Development E-mail: sercan.uzun@akisgyo.com Telephone: +902123930100/53544 Disclosure: This presentation has been prepared in order to inform investors. Since the presentation has been prepared regarding the previous period, the data in it may not reflect the current situation. The estimations regarding projects are given in accordance with feasibility studies prepared on basis of certain assumptions and may be updated any time. Akiş REIT management and employees can not be held responsible for any damages or losses arising from the direct/indirect use of content in this presentation. For more information : investor.relations@akisgyo.com 19