Legal Disclaimer This presentation is not considered as an offer to buy or sell securities of Brack Capital Properties N.V. (hereunder: the Company ) nor is it an invitation to receive such offers and it is meant only for providing information. The information presented in the Presentation doesn t replace independent collection and analysis of data, isn t considered a recommendation or on opinion and furthermore isn t considered a replacement the independent discretion of each investor. This Presentation and the information included in it isn t meant to replace the need to review the reports issued by the Company to the public, including without derogating from the abovementioned the Company s 2016 Annual Report (published on March 26 th 2017) and the Q3 2017 Periodic Report (published on November 19 th 2017) and the Company s immediate report of December 10 th 2017 (hereunder: the Immediate Report ). The information described in slide 3 hereunder in regards to the rezoning (including the expected date for its completion) is considered a forecast which is not fully controlled by the Company and that its execution either in full or in part in fact is uncertain. The information is based on information that exists within the Company as of this date. There is no certainty that such rezoning of the land will be completed, if at all, since its execution depends on the planning and construction processes under the German law that are not under the Company's control. The data provided in page 3 in regards to the value per net square meter for sale, value of an apartment and sale price per square meter wasn t included in the immediate report in this detailed manner and are provided in this presentation as additional data in regards to the said project (if the Company will decide to develop it). Information included in this presentation might be considered as information presented in a different manner than the one it was presented in the Company s reports, yet it can be calculated based on the data provided in those reports. It should be emphasized that the picture included in this presentation and what is mentioned in slide 3 hereunder, are presented in a different manner than the one those were presented in the Company s reports. 2
Project Overview The Project- Development of a residential neighborhood comprising ca. 1,300 units in Gerresheim, Dusseldorf. Gerresheim is considered above average as in terms of socio-economics characteristics. Gerresheim which is located east to the city center of Dusseldorf, south to the up market neighborhood Grafenberg and adjacent to the Grafenberg forest, offers diverse educational institutes, shopping centers and recreational facilities, as well excellent transport links to the Düsseldorf city Centre (13 minutes by Metro and 20 minutes by car). The Zoning Plan is expected to be published by the end of 2018, which will enable the company to obtain the building permit and begin the development of the project 1 during 2019. The completion of the transaction is expected to take place on February 28, 2018. Location- The land is located in the center of Gerresheim neighborhood close to shopping centers, parks and a short walking distance to Tram and Metro stations. Dusseldorf- The capital and the business center of NRW (17M inhabitants and responsible for 22% of German GDP) benefits from a diversified economy and high-quality of living (ranked 6 th in the world by the Mercer Institute). Düsseldorf is ranked second in Germany un terms of GDP per capita (ca. EUR 83k) and in terms of the purchasing power of the households. The housing market in Düsseldorf is characterized by a high structural gap between the demand and supply- the Municipality of Düsseldorf predicts a shortage of over 20,000 30,000 residential units in 2020, this gap is gradually expanding due to immigrations of professionals ( white collar ) which increases the city population by ca. 1% p.a. On the other hand, insufficient new construction2 due to lack of available land for residential development contributes to a continuous price increase trend in the city. Between June 2016 and June 2017 sales price for new Condo units in Düsseldorf (that were built starting since 2012) have increased by 9% to an average price of EUR 4,970 per sqm. Source: Dusseldorf Report 1 st Half 2017 JLL BCP Projects in Dusseldorf Grafenberg Grafental Gerresheim Glasmacherviertel Typically houses in Gerresheim Location Land size (sqm) BGF (sqm) NGF (sqm) No. of Residential units Commercial space (sqm) Main uses No. of underground parking *Excluding land cost for the commercial part **Excluding parking Gerresheim 192,983 187,082 149,329 1,294 30,000 1,598 Financial Data Purchase price 133,000,000 Bank financing 93,000,000 Equity 40,000,000 Land value per sqm 689 Value per sqm NGF 891 Value per unit* 87,326 Breakeven price** - Sales price per sqm 4,000 3 1. It should be noted that the company hasn t decided yet to develop the land. 2. According to research company Jones Lange Lasalle 4,500 new homes will be required every year by 2025 compared to new supply at an average of 1,000 1,250 units/year built in the last five years (JLL, Düsseldorf Report 1 st half of 2017)
Housing market in Germany - Significant Catch-up Potential to the rest of Western Europe The demand for housing is growing as a result of low owner-occupier rate comparatively to Europe, immigration of professionals, historically low interest rate for mortgage and low sales price compared to the household disposable income. On the other hand a supply shortage that fails to cater for the growing demand due to low housing completions due to regulatory barrier to rent increase rendering most new development uneconomical. 4 The widening of the structural gap between growing demand and supply shortage combined with the low sales prices compared to other western market is generating a long term price increase trend in the city.
Housing Market in Dusseldorf Demand- Dusseldorf population has increased by 1% annually in the last 5 years as a result of inward migration of professionals. By 2020 Dusseldorf population is forecasted to grow from 612,000 to ca. 630,000 inhabitants. Supply- Insufficient new construction due to lack of available land for residential development in central locations in Düsseldorf: In 2008 the city of Düsseldorf predicted a shortage of over 20,000 30,000 residential units in 2020. Since 2008 till Dec. 2016, only 7,700 units were completed. While the number of households has grown by 3.5% since 2012, the housing supply in Düsseldorf has risen by just 1.1% and therefore, only a third of the additional demand could be supplied by new construction (JLL, Düsseldorf 1st half of 2017) Despite a rise of ca. 23,000 inhabitants / ca. 18,000 new households during 2010-2016, only ca. 7,700 new apartments were built during this period, i.e. 1,000-1,250 units p.a. According to Jones Lange Lasalle 4,500 new homes will be required every year by 2025 vs. new completion rate at an average of 1,000 1,250 units/year in the last five years, that will trigger a continued significant price increase trend. Between June 2016 and June 2017 sales price of new residential units in Düsseldorf (that were built since 2012) has increased by 9% to an average price of EUR 4,970 per sqm. 5 Structural and expanding gap between demand and supply is supporting a continuous price increase trend 1. JLL Dusseldorf Report 1 st Half 2017
Strategical Aspects The company will own ca. 50% of the available land reserves for residential uses in a city characterized by a structural gap between demand and supply which is expanding during the last several years. Synergies: Costs- Economics of scale- Improves the bargaining power with local construction companies and other suppliers without a significant increase in the costs of the residential development division. Revenues- Enables the Company to regulate the scope of the annual development between the projects in a manner that will support the annual growth rates of selling prices per sqm. Expanding the pipeline in residential development for the next 10 years while doubling the scope of yearly development from ca. 100-125 units as of today to 200-250 p.a., thanks to parallel development of several development projects in various locations in Dusseldorf without cannibalizing the sales prices. Grafental-July 2017 6 Significant contribution to NAV for the next 10 years. BCP is standing out among the real-estate German companies thanks to its scope and quality of pipeline and its proven ability to develop projects with significant contribution to NAV.
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