conwert company presentation + December PDF Free Download

conwert company presentation + December 2015

conwert is a fully integrated real estate company focusing on residential properties and apartment buildings in Austria and Germany. This focus is complemented by a commercial property portfolio. conwert owns, develops, lets and sells properties in metropolitan regions. conwert s business model is based on three pillars: portfolio asset management, the development and sale of properties and the property service segment. conwert relies on a transparent corporate culture and a clear strategy for the implementation of its objectives. A code of conduct applicable to all employees of the group lays down the ethical principles of entrepreneurship and governs the behaviour of employees when dealing with one another and with the stakeholders. Content + Highlights Q3 2015 + Operating Performance + Portfolio Strategy & Valuation + Cost Reduction Programme + Financing + Financials + Strategy Summary, Guidance & Outlook + Appendix

+ Highlights Q3 2015 conwert with Very Strong 1-9/2015 Results + Like-for-like rent increases y-o-y - Increase of 2.4% in core portfolio - Increase of 2.6% in core residential portfolio + Vacancy rate reduced y-o-y - Overall from 10.4% to 8.7% - Residential core portfolio: from 6.0% to 4.5% + Adjusted NRI margin increased from 84.6% to 87.4% + Fair value up by 105 mn (3.8%) since 31/12/2014 on a like-for-like basis + Average financing cost lowered to 3.6% + Bridge to break swaps in place breakage during next weeks will lead to <2.6% average financing cost + FFO I up almost 50% from 25.6 mn to 38.1 mn y-o-y ( 0.31/share to 0.45/share) + EPRA NAV up 5.8% from 15.70 to 16.61 per share 3

+ Operating Performance Operating Performance at a Glance 1-9/2015 1-9/2014 Change NCR /sqm/m 6.40 6.29 1.8% NCR 1) like-for-like residential core /sqm/m 5.75 5.61 2.6% Vacancy rate % 8.7 10.4-16.0% Vacancy rate residential core % 4.5 6.0-24.0% FFO I 2) mn 38.1 25.6 48.8% FFO I per share /share 0.45 0.31 47.1% FFO I per avg. usable space /ø sqm 15.94 9.99 59.6% Total usable space 1,000 sqm 2,338 2,528-7.5% 30/09/2015 31/12/2014 Change Fair value 1) mn 2,849.6 2,847.8 0.1% Initial yield of portfolio % 5.9% 6.1% -3.5% Fair value 1) like-for-like mn 2,846.0 2,740.9 3.8% EPRA NAV 3) mn 1,391 1,300 7.0% EPRA NAV 3) per share /share 16.61 15.70 5.8% EPRA NAV diluted post swap breakage 4) /share 15.06 n/a n/a 1) incl. IFRS 5 and SELL (at fair values) 2) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs + restructuring charges/one-off items 3) undiluted 4) considering 2016 convertible bond conversion and swap breakage pro forma based on 30/09/2015 Glossary: FV = Fair Value; NCR = Net Cold Rent 5

+ Portfolio Strategy & Valuation New Portfolio Strategy Overview Portfolio segment Segment characteristics Main locations Strategy Premium markets + Strong household growth forecast + Low city vacancy rate + Berlin + Vienna + Potsdam + Dresden Keep / invest Core markets + Either good household growth or high occupancy markets + Leipzig + Wuppertal + Dortmund Keep / invest Core assets + Good micro locations + Chemnitz Keep / invest selectively Privatisation + Residential assets prepared for disposal of individual units + Vienna + Berlin Realise attractive margin on disposal Premium commercial + Commercial assets in top locations with excellent re-letting potential + Vienna + Munich + Leipzig Hold opportunistically Residential non-core Commercial non-core + Locations with low development potential or locations attached to non-core commercial + Commercial units with limited upside within conwert + ND Dispose around fair value + ND Dispose around fair value 7

+ Portfolio Strategy & Valuation Main Portfolio KPIs Portfolio segment Units 1) (No.) FV 2) ( mn) % of total FV NCR ( /sqm) l-f-l NCR growth (% yoy) Vacancy rate (%) l-f-l Vacancy dvpt 2) (% yoy) FV/NCR (x) NCR/FV (%) Premium markets 8,988 1,008.9 35 6.48 3.1 3.1-16.2 21.1 4.7 Core markets 10,123 542.6 19 5.25 2.3 5.6-29.2 13.4 7.4 Core assets 1,691 74.6 3 5.22 1.2 6.6 1.8 12.7 7.8 Privatisation 731 111.8 4 4.50 1.3 3.9-12.4 33.9 2.9 Residential core 21,533 1,737.9 61 5.75 2.6 4.5-22.6 17.9 5.6 Premium commercial 385 171.1 6 9.34 0.4 4.3-6.3 16.1 6.2 Core portfolio 21,918 1,909.0 67 5.97 2.4 4.5-21.8 17.7 5.7 Residential non-core Commercial non-core 4,696 211.5 7 5.38 1.7 17.2 1.3 13.3 7.5 3,049 729.1 26 8.50-0.9 16.6 2.0 16.2 6.2 Total portfolio 29,663 2,849.6 100 6.40 1.4 8.7-8.0 16.9 5.9 1) excl. parking spaces 2) incl. IFRS 5 and SELL (at fair values) Glossary: FV = Fair Value; NCR = Net Cold Rent; l-f-l = like-for-like 8

+ Portfolio Strategy & Valuation Residential Core Portfolio Overview Top 10 Locations Location FV ( mn) Units (No.) NCR ( /sqm) FV/NCR (x) Vienna 415.3 2,500 6.16 28.9 4.0 Berlin 411.5 4,431 6.11 19.7 2.7 Leipzig 250.3 4,532 5.31 13.3 3.3 Vacancy rate (%) Portfolio segment Premium markets Privatisation Premium markets Privatisation Premium markets Core markets Potsdam 196.2 1,657 6.94 19.8 1.2 Premium markets Wuppertal 100.4 2,060 5.03 12.2 2.8 Dresden 41.2 586 6.13 14.9 4.6 Core markets Privatisation Premium markets Privatisation Dortmund 28.3 521 4.92 14.5 10.2 Core markets Chemnitz 28.1 598 5.14 12.8 9.2 Core assets Erfurt 22.1 446 5.78 14.7 3.9 Core markets Bochum 18.6 389 4.90 13.3 18.9 Core markets Total Top 10 1,511.9 17,720 5.78 18.4 3.8 Other locations 225.9 3,813 5.59 14.8 8.0 Residential core 1,737.9 21,533 5.75 17.9 4.5 + The top 10 locations make up almost 90% of the core residential portfolio Glossary: FV = Fair Value; NCR = Net Cold Rent 9

+ Portfolio Strategy & Valuation Residential Core Portfolio - Overview Household Growth vs. City Occupancy Rate 15% 12% Macro potential Strong household growth Premium assets/ strong macro potential Average household growth 2015 2025 1) 9% 6% 3% 0% (3)% (6)% (9)% Strong assets despite Macro potential (12)% weak macro High occupancy 86% 88% 90% 92% 94% 96% 98% 100% 102% Bubble size = GAV City occupancy 2) Premium markets ( 1,008 mn, 36.2%) Core markets ( 540 mn, 19.4%) Core assets ( 75 mn, 2.7%) Privatisation ( 112 mn, 4.0%) Sources: Company Information 1) based on data of Statistik Austria, Federal institute for statistics (Austria; based on annualised household growth from 2012-2022) and Bundesinstitut für Bau-, Stadt- und Raumforschung for 2015E- 2025E (Germany; household growth per city = population growth in the city s Kreis adjusted by the delta between population and household growth per Raumordnungsregion) 2) based on data of Municipal authority of Vienna (Austria) and CBRE - Empirica - Leerstandsindex (refers to Marktaktiver Leerstand 2013 ) (Germany) 10

+ Portfolio Strategy & Valuation Premium Commercial Portfolio Overview Locations Units (No.) Usable space (sqm) Fair value ( mn) NCR ( /sqm) FV/NCR (x) Vienna 104 18,423 54.7 11.6 21.7 5.5 Vacancy rate (%) Type of assets apartment, office, retail Munich 8 13,371 28.5 11.9 14.6 - school Leipzig 62 18,600 19.4 6.1 13.4 5.2 office Meitingen 19 8,948 17.4 10.6 15.3 - retail Berlin 51 8,810 13.1 8.4 14.6 0.4 Magdeburg 72 10,051 13.0 7.4 14.9 11.2 apartment, office, retail apartment, office, retail Starnberg 8 6,413 12.4 11.9 12.6 - office, retail Other 61 9,886 12.8 7.3 15.1 9.6 Total 385 94,502 171.1 9.3 16.1 4.3 apartment, office, retail + Strategy: Hold opportunistically very low re-letting risk and excellent locations Glossary: FV = Fair Value; NCR = Net Cold Rent 11

+ Portfolio Strategy & Valuation Premium Commercial Impressions of Major Assets (1/2) Schulerstraße 1-3, Vienna + Excellent location opposite of St. Stephen s Cathedral + Type of use: 40% apartments, 60% mixed office/retail + Current tenants: Shops (souvenirs, toys, jeweler, clothes, books, furs) lawyers, cosmetic surgeons, architect, software companies, hairdresser + Fair value: 30 mn + NCR: 9.78/sqm + Vacancy rate: 0% Roßauerlände 47-49 / Alserbachstraße 32, Vienna + Excellent location in the 9th district of Vienna with public transport (subway) in front of building + Type of use: 16% apartments, 84% mixed office/retail + Current tenants: conwert (headquarter), SPAR, rehab clinic + Fair value: 28 mn + NCR: 13.30/sqm + Vacancy rate: 8.9% (expected to be at 0% at the beginning of 2016) 12

+ Portfolio Strategy & Valuation Premium Commercial Impressions of Major Assets (2/2) Bayerwaldstraße 8-18, Munich + Very good location in eastern part of Munich within a popular residential neighborhood + Current tenant: Private school with rental contract until 2028 + Fair value: 15 mn + NCR: 8.50/sqm + Vacancy rate: 0% Hasselbachpassage, Magdeburg + Top location in the south center of Magdeburg, at one of two central public transportation hubs + Type of use: 32% apartments, 68% mixed office/retail + Current tenants: Anchor tenant McFit with contract until 2022; other tenants: Bars, restaurants, doctors, lawyers + Fair value: 13 mn + NCR: 7.45/sqm + Vacancy rate: 11% (due to refurbishing) 13

+ Portfolio Strategy & Valuation Disposals Current Status Disposals 1-9/2015 1-9/2014 Change Units sold 1) No. 1,059 1,055 0.4% Sales proceeds mn 118.9 70.9 67.8% Disposal of book values mn (110.0) (61.8) 78.1% Profit from disposals mn 8.9 9.1-2.5% Book value step-up % 8.1 14.7-45.3% thereof non-core 1-9/2015 1-9/2014 Change Units sold 1) No. 844 576 46.5% Sales proceeds mn 97.5 31.1 NM Disposal of book values mn (94.0) (29.2) NM Profit from disposals mn 3.5 2.0 77.0% Book value step-up % 3.7 6.7-45.1% + On track to achieve guidance of 150-200 mn commercial disposals + Commercial disposal pipeline (to be signed this year) - Portfolio A ~ 60 mn Signing and closing expected in Q4 2015 - Portfolio B ~ 100 mn Signing expected in Q4 2015, closing in Q1/Q2 2016 + Commercial disposal pipeline (to be signed/closed next year) - Portfolio C ~ 120 mn Signing/closing expected in Q2/Q3 2016 + Non-core residential disposal pipeline - ~ 70 mn to be signed latest Q1 2016 + Commercial pipeline well filled also for 2016 1) excl. parking spaces 14

+ Portfolio Strategy & Valuation Portfolio Valuation Overview KPI 30/09/2015 31/12/2014 Change Absolute Like-for-Like Like-for-Like Residential FV mn 2,849.6 2,847.8 0.1% FV /sqm 1,218.8 1,151.4 5.9% FV/NCR multiple x 16.9 16.3 3.7% Initial yield % 5.9 6.1-3.6% FV mn 2,846.0 2,740.9 3.8% FV /sqm 1,219.3 1,170.9 4.1% FV/NCR multiple x 16.9 16.5 2.2% Initial yield % 5.9 6.1-2.2% FV mn 1,734.3 1,620.7 7.0% FV /sqm 1,199.6 1,120.4 7.1% FV/NCR multiple x 17.9 17.3 3.1% Initial yield % 5.6 5.8-3.0% + l-f-l increase of fair values by 3.8% or 105 mn + Value increase based on - rent increases - vacancy reduction - improved technical maintenance condition of assets - Capex - yield compression + Further yield compression expected over the next quarters in - Berlin - Potsdam - Dresden - Leipzig + Due to further expected yield compression, two valuations planned for 2016 Glossary: FV = Fair Value; NCR = Net Cold Rent 15

+ Portfolio Strategy & Valuation Maintenance & Modernisation (in /sqm) 28.85 24.96 11.62 7.26 18.22 7.52 10.03 13.42 8.27 7.20 4.28 2.43 2013 2014 1-9/2015 Maintenance Capex Capex large projects + High capex levels strongly driven by large refurbishing projects + Examples for large ongoing projects - Am Kiesteich, Berlin 15 mn - Baumertweg, Essen 9 mn - Gropius-Terrassen, Bochum 9 mn + Many historical projects initiated to reduce high vacancy levels (e.g. Gropius-Terrassen with 47% vacancy rate) 16

+ Cost reduction programme Restructuring of German Operations Hannover sites 2014 sites 2017 (planned) Bremen Hamburg Celle Berlin Magdeburg Potsdam Essen Braunschweig Leipzig Dresden Wuppertal Erfurt Siegen Bad Gera Hainichen Langensalza Chemnitz Glauchau Nürnberg Gelsenkirchen Bonn Lünen Wuppertal Siegen Delmenhorst Hamburg Hannover Magdeburg Erfurt = Head Office = alt+kelber = Shared Services Center = KWG = Service Hubs ( Geschäftsstelle ) = both = Service Point ( Mieterbüro ) Gera Nürnberg Leipzig Chemnitz Berlin Potsdam Dresden Hainichen Target structure + reduction of sites from 23 to 18 + clearly defined organisational structure with three levels head office / shared services centre service hubs service points + centralisation of shared services consolidation of various services teams into one shared service centre + focus on management of core units reduction of average driving time between site and managed units phasing-out management of non-coreunits either by termination of the management contracts or by thirdparty management of the objects + new organisational structure scalable for growth + Headcount reduction ~20% Including Austrian and HQ savings 8 mn run rate savings after summer 2016 18

+ Financing Financing Summary + LTV down to 50.8% + Financing cost down by 18% / approx. 80 bps since Q3 2014 + Financing of breakage of swaps secured by bridge facility to be executed in the next weeks, bringing financing cost down to peer level + Further continuous interest reduction by refinancing of mortgage loans + Bond issuance planned by Q1 2016 if markets permit a low premium to mortgage loan financing 20

+ Financing Financing cost down by 18% / 80 bps since Q3 2014 Measures Execution of measures Impact on cash financing cost 2015 Financing cost end of Q3 2014 Buy-back of debt Breakage of swaps Breakage / adjustment of strike price for swaps Adjustment of strike price for swaps 2015 Restructuring of debt Financing cost end of Q3 2015 Buy-back of 34.8 mn 5.25% convertible bonds Selective buy-back of swaps with low remaining duration with nominal value of 110 mn Adjustment of strike price for swaps with nominal value of 23 mn Buyback / adjustment of strike price for swaps with nominal value of 233 mn Restructuring / repricing of existing mortgage debt with nominal value of approx. 180 mn Q4 2014 Implies approx. 2 bps Q4 2014 Approx. 20 bps Q4 2014 Approx. 3 bps 4.32% average as per Q3 2014 Q1-Q3 2015 Approx. 35 bps Q1-Q3 2015 Approx. 20 bps 3.55% average as per Q3 2015 21

+ Financing Measures Until Q1 2016 Financing cost end of Q3 2015 Measures Execution of measures Impact on cash financing cost 2015 3.55% average as per Q3 2015 Bridge loan 100 mn Q4 2015 Breakage / adjustment of strike price for swaps Nominal value of 500 mn Q4 2015 Approx. 95 bps Financing cost 2016 interest run rate 2.6% Strategy in respect to unsecured financing + Investment grade rating achieved (BBB- S&P) + Unsecured financing a clear flexibility advantage for future acquisitions + However, bond issuance only if premium to mortgage loans not too high 22

+ Financing Impact of Conversion of 2016 Convertible Bonds without conversion with conversion Deviation absolute in % Shares No. 85,359,273 94,715,015 9,355,742 11.0 Shares in circulation No. 83,782,809 93,138,551 9,355,742 11.2 Equity mn 1,106 1,210 104 9.4 Equity /share 13.21 12.99 (0.21) -1.6 EPRA NAV (pro forma conversion 2016 convertible bonds) /share 15.55 15.07 (0.48) -3.1 FFO I 1) (pro forma 2016 / guidance) mn 61.4 65.0 3.6 5.9 FFO I 1) /share 0.73 0.70 (0.03) -4.8 Dividend mn 37 39 2 5.9 Dividend /share 0.44 0.42 (0.02) -4.8 Equity ratio % 41 45 Main reasons for not buying back the convertibles + Cash required for breakage of swaps + No unencumbered assets available to refinance convertible by mortgage loans + Debt-to-capital ratio without conversion would jeopardise BBB- rating 1) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs not including non-controlling interests + restructuring charges/one-off items Assumptions: Buy back of convertible assumed at 120%; Cost of new unsecured debt assumed at 3% 23

+ Financing Solid Capital Structure, Conservative Financial Policies and IG Rating LTV evolution (%) 54.4% 53.6% 51.8% 50.8% 50.0% 47.5% 45.4% 44.5% June 2014 Dec 2014 June 2015 Sep 15 Target Reported Pro forma convertible conversion Current maturity profile¹ ( mn) + Current cash-effective interest rate of 3.55% after hedging to be reduced significantly going forward + Approx. 7.0-year average term of all loans including corporate/convertible bonds + Broad and long-term distribution of debt financing (with 51 financing institutions) + Approx. 74.9% of debt hedged against interest rises + LTV currently at 50.8% (LTV with in-the-money convertibles as equity 44.5%) Financial policies 216.8 1 Leverage policy + EBITDA interest coverage of more than 2.0x + LTV 50% targeted 183.2 65.0 150.5 132.5 100.2 ² 80.0 ³ 66.9 152.0 21.0 83.0 70.5 28.1 2015 2016 2017 2018 2019 2020 2021 2 3 Maintain strong liquidity profile Other + Ensure that sufficient liquidity is maintained to cover maturities in the next 12-18 months + Ongoing discussions with further lenders on prolongation of mortgage loans + Hedging ratio target of c. 70-80% Mortgage-backed Loans Bond Convertible Bonds + Stable dividend policy at 60% of the FFO I Note: 1 As of 30/09/2015; ² Strike price: 10.71; ³ Strike price: 11.27 24

+ Financing Balance Sheet Structure as of 30 September 2015 LTV ratio further improved Balance sheet ( mn) Breakdown of financial liabilities ( mn) Others Property assets 2,955 153 2,802 2,955 248 241 1,265 1,201 Other liabilities HoldCo Debt Mortgage debt Equity HoldCo debt Mortgage debt 1,506 241 214 388 663 Share of debt of convertible bonds and retail bond 34 banks Range: < 20mn 11 banks Range: 20 50mn 6 banks Range: > 50mn Assets as of 30/09/2015 Equity and liabilities as of 30/09/2015 30/09/2015 Balance sheet indicators 30/09/2015 31/12/2014 Target Loan-to-value (LTV) incl. cash and cash equivalents Loan-to-value (LTV) (in-the-money convertibles as equity) 50.8% 53.6% 44.5% 47.5% 50% Equity ratio 40.6% 37.1% Equity ratio (in-the-money convertible as equity) 46.6% 43.0% 25

+ Financials Overview of 1-9/2015 Income Statement Reflecting operational focus ( mn unless otherwise indicated) 1-9/2015 1-9/2014 Change Rental income 170.2 181.4-6.1% Net proceeds on property sales 8.9 9.1-2.5% Service revenues 5.5 6.8-19.0% Net result from fair value adjustments 59.2 (6.0) NM Earnings before interest and tax (EBIT) 142.9 75.5 89.2% Net finance result (59.0) (103.3) -42.9% Earnings before tax (EBT) 83.9 (27.8) NM Profit/loss after tax 68.6 (19.9) NM Profit/loss after non-controlling interests 64.9 (23.0) NM Recurring FFO I 1) (excl. sales income) 38.1 25.6 48.7% Cash profit 2) 39.2 27.9 40.6% Net rental income (NRI) 111.8 112.9-1.0% NRI margin (in %) 65.7 62.2 5.5% NRI margin (adjusted) (in %) 3) 87.4 84.6 3.3% Comment Impact of sales programme Revaluation in Q3 Cash cost of debt significantly down Very strong Q3 result Significant growth driven by strong operational result and lower cash costs of debt NRI margin further improved 1) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs not including non-controlling interests + restructuring charges/one-off items 2) Cash profit: FFO I + difference between sales and carrying amount of sold properties deduction of operating expenses of sales result cash taxes 3) NRI margin (adjusted): NRI margin excluding operating costs charged to tenants in order to be comparable to German peers. 27

+ Financials FFO Development in Detail ( mn) 1-9/2015 1-9/2014 1-9/2013 EBT 83.9 (27.8) 36.0 Deduction of difference between sales and carrying amount of sold properties (8.9) (9.1) (18.9) Operating expenses of sales result 3.6 4.7 6.6 Deduction of result from fair value adjustments of properties (57.0) 6.0 0.8 Depreciation 0.9 1.0 (0.3) Non-cash part of financial result and other non-cash costs 11.6 51.0 0.4 One-off charges 3.9-3.1 FFO I 1) (excl. sales income) 38.1 25.6 27.7 Difference between sales and carrying amount of sold properties 8.9 9.1 18.9 Operating expenses of sales result (3.6) (4.7) (6.6) FFO II 2) (incl. sales income) 43.4 30.1 40.0 FFO II 2) (incl. sales income) excluding cash taxes / cash profit 39.2 27.9 31.1 1) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs not including non-controlling interests + restructuring charges/one-off items 2) FFO II: FFO I + difference between sales and carrying amount of sold properties deduction of operating expenses of sales result 28

+ Financials NAV Composition 30 September 2015 NAV/share significantly up ( unless otherwise indicated) 30/09/2015 31/12/2014 Change 30/09/2015 pro forma 2) Equity (w/o non-controlling interests) 1,136 mn 1,045 mn 8.7% 1,235 mn Number of shares outstanding (in thousand shares) 83,783 82,783 1.2% 93,138 Equity/share 13.55 12.63 7.3% 13.26 Additional fair value of trading properties/share 0.42 0.33 26.7% 0.38 Fair value of financial instruments/share 1.41 1.38 1.9% - Long-term financing contribution of tenants/share 0.11 0.12-9.2% 0.10 Deferred taxes/share 1.12 1.24-9.9% 1.32 EPRA NAV/share 16.61 15.70 5.8% 15.07 Discount to current share price 1) 19.6% 14.9% 11.8% 11.3% 1) 13.355 at 23 November 2015 2) including breakage of swaps and conversion of 2016 convertible bond 29

+ Financials Financial Results 1-9/2015 Significant impact of development of interest rate landscape for ineffective swaps ( mn) 1-9/2015 1-9/2014 Comment Cash cost of mortgage loans, convertible bonds and retail bond Non-cash write-ups for convertible bonds & buyback of convertible bonds (46.8) (55.6) (1.6) (2.7) Lower cash costs Reduction due to lower financial liabilities and reduced interest cost Financial results after write-ups (48.4) (58.3) of value of derivatives and deduction of cash flow hedge reserve (8.6) (43.9) Interest rate recovery resulted in balanced effect of non-cash impacts in 1-9/2015 Prepayment penalty (0.8) - IFRS cash costs (2.6) (2.5) Result of associates, interest paid to conwert and others 1.4 1.3 Result significantly improved vs Q3 2014 Net finance costs (59.0) (103.4) 30

+ Strategy Summary, Guidance & Outlook Strategy Summary Strategic focus on portfolio + Focus on residential keep only premium commercial assets + Focus on Germany and Austria + Invest value-accretively in residential assets Increased efficiency and profitability in operating business + Reduce vacancies further + Continue to increase rent + Lower operating cost ~20% Strengthening and clean-up of financing structure + Reduce financing cost further + Keep at target LTV below 50% + Leverage investment grade rating received (S&P BBB-) to issue unsecured debt if differential to mortgage financing not too high Value accretive growth + Acquire undermanaged residential portfolios in good locations + Raise equity only if value accretive for shareholders 32

+ Strategy Summary, Guidance & Outlook conwert s FFO Guidance for 2015 and 2016 Business outlook providing for strong FFO I growth (in mn) 2015e 2016e 65 48+ 2015e Portfolio change Cost savings Interest reduction Other 2016e Comments + FFO I guidance 2016 raised to 65 mn despite accelerated non-core disposals + Main drivers: - Reduction of financing cost - Reduction of operating cost Note: others primarily include loss of rent as a result of reduction in lettable space 33

+ Strategy Summary, Guidance & Outlook Guidance 2015 and 2016 FFO I guidance lifted despite accelerated non-core disposals 1-9/2015 2015e 2016e Recurring FFO I 1) (excl. sales income) 38.1 mn 48 mn 65 mn NRI margin (adjusted) 2) 87.4% ~87.5% ~89% LTV 50.8% ~50% <50% Non core sales volume 97.5 mn 150-200 mn 300-350 mn 1) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs + restructuring charges/one-off items 2) NRI margin (adjusted): NRI margin excluding operating costs charged to tenants 34

+ Appendix Fair Value > Book Value Bridge (in mn) 2,750.6 2,802.2 2,849.6 181.5 51.4 181.7 47.4 229.1 2,569.1 2,620.5 2,620.5 Book Value Assets held for sale Total book value Hold Sell Fair Value reserve SELL Total Fair Value 36

+ Appendix conwert at a Glance Long-term development of residential properties in Germany and Austria Overview + conwert is one of the largest managers and developers of residential properties in Germany and Austria + The residential portfolio is comprised of approx. 26,500 units with a usable space of 1.8 mn sqm + In addition, conwert owns approx. 3,100 commercial units with usable space of 0.6 mn sqm + By beginning 2016, conwert targets both the share of residential properties as well as the share of the German portfolio to be increased to approx. 80% 1) + The conwert business model is mainly based on generating income from managing and developing residential properties and is supplemented by providing property services to third parties 1) based on sqm 2) annualised 1-9/2015 rental income conwert core markets Potsdam Berlin NRW Dresden D CZ SK A Vienna HU Leipzig Core markets Regional markets Advanced negotiations for sale of regional portfolios + Portfolio value: 2.8 bn (30 September 2015) + Rental income² ) : approx. 227 mn + LTV: 50.8% (30 September 2015) 37

+ Appendix Valuation of conwert Share Still trading at a significant discount to NAV Performance of the conwert share 17 16 15 14 13 12 11 Despite outperforming ATX, discount to NAV much higher than peers in residential segment 15.06/share 11.3% discount to NAV 13.36/share Analyst research 4 8 analysts in total Buy 4 Hold Bank Recommendation Target Baader/Helvea Hold 13.50 Deutsche Bank Hold 13.00 Erste Group Accumulate 13.50 HSBC Buy 14.20 Kepler Cheuvreux Buy 14.75 Oddo Seydler Neutral 13.30 RCB Hold 13.90 SRC Research Buy 15.00 10 9 8 EPRA NAV 1) 15.06 Average target price 13.89 Current share price 2) 13.35 7 Outstanding shares 3) Treasury shares 89.81 mn 1.58 mn conwert ATX NAV conwert Treasury shares in % of issued shares 3) 1.8% of o/s 1) pro forma; including breakage of swaps and conversion of 2016 convertible bond 2) as of 15 December 2015 3) as of 11 December 2015 38

+ Appendix Portfolio by Region Detailed overview as per 30 September 2015 Austria Germany Other 1) Total Total conwert Group Residential Commercial Residential Commercial Residential Commercial Residential Commercial Number of rental units 2,538 1,884 23,635 765 367 474 26,540 3,123 29,663 Number of parking spaces 783 3,489 5,684 1,619 191 580 6,658 5,688 12,346 Total usable space (in 1,000 sqm) 2) 195 320 1.539 208 27 48 1,761 577 2,338 Vacancies 4.6% 13.9% 7.0% 8.8% 29.8% 34.7% 7.0% 13.8% 8.7% of which strategic vacancies 0.7% 4.4% 0.6% 2.1% 6.5% 0.6% 0.7% 3.2% 1.4% Change in vacancies from 1-9/2014-13.2% -13.7% -19.5% -10.2% 24.2% -7.0% -18.6% -8.6% -16.3% Initial yield 3.9% 5.6% 6.6% 6.9% 5.8% 7.2% 6.1% 6.1% 6.1% Change in initial yield from 1-9/2014-7.7% 1.6% -5.2% -0.4% 0.5% 11.9% -5.5% 1.3% -3.0% Property assets ( mn) 363.4 550.2 1,511.2 295.5 25.9 56.0 1,900.4 901.7 2,802.2 Average rent ( /sqm) 6.04 8.75 5.63 8.56 6.40 9.75 5.69 8.74 6.40 1) Czech Republic, Slovakia, Hungary, Ukraine, Luxembourg 2) excl. parking spaces 39

Disclaimer This presentation includes various forecasts and expectations as well as statements concerning the future development of the conwert Group. These statements are based on assumptions and estimates, and may be connected with known and/or unknown risks and uncertainties. Actual developments and results as well as the financial, earnings and asset position of the Group may therefore differ materially from these expectations and assumptions. The reasons for such variances may include market fluctuations, the development of property prices and rents as well as financial markets and foreign exchange rates, changes in national or international laws and regulations or fundamental changes in the economic and political environment. For this reason, futureoriented statements are only related to the day on which they are made. conwert will accept no obligation to revise or adjust such statements to reflect new information or future results.