Gateway Real Estate AG

Company Presentation
March 2019

www.gateway-re.de
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Gateway is a leading diversified property developer in Germany

~€3.7bn (1)

GDV

+
25%
Target average EBITDA
margin on project level(4)
~€1.0bn (2)

GDV acquisition pipeline

(3) current
>800,000
(5)

sqm GLA
63% / 37%
residential / commercial

(5)(6)

~50% / 50%
~4% residential / commercial
targeted dividend yield after closing of acquisition
pipeline

(1) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already under construction or in application process for building permit. Disposal of
projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (2) Acquisition pipeline in advanced stages of negotiation. Amount reflects 100% of
GDV; planned fully consolidated accounting. (3) Includes projects held “at equity” and assumes completion of projects. (4) Before overhead costs of €10-12m per annum. (5) Includes 3
projects held “at equity” and assumes completion of projects. (6) Refer to page 9 for the exact share.
Highlights

Active in highly attractive German residential

and commercial development markets

Sizeable €3.7bn(1) GDV project portfolio leading

to accelerated growth. Additional ~€1bn GDV
acquisition pipeline(2)

Targeting average mid-term 25% EBITDA

margin(3) across development projects, leading
to attractive cash flow profile and ROE

Note: Figures as per January 2019. (1) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already under construction or in application process
for building permit. Disposal of projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (2) Acquisition pipeline in advanced stages of 4
negotiation. Amount reflects 100% of GDV; planned fully consolidated accounting. (3) Target average EBITDA margin in development business across projects.
Diversified development project portfolio

Nationwide project locations(1) GDV breakdown assuming closing of acquisition pipeline(2)

(5)
€4.7bn
(4)
€3.7bn
51%
37%
JV share
Hamburg
63% 49%
Braunschweig
Berlin Current Post assumed acquisition closing

Gottingen Halle Commercial Residential

Dusseldorf

Dresden
Leipzig
Cologne
Erfurt Current breakdown by region(2)
Chemnitz
Frankfurt
GDV breakdown excluding acquisition pipeline (€3.7bn, inner ring)
Wiesbaden
and including pipeline (€4.7bn, outer ring) Munich region
Trier
Frankfurt / Rhine-main region
Nuremberg
Mannheim
Berlin region

Stuttgart region
Stuttgart
Cologne region
GDV
Munich
€3.7bn(4) Dusseldorf region

Leipzig region

Commercial Residential Dresden region

Other(3)

Note: Data as per February 2019. 13% of GDV currently under construction, while 31% and 55% have obtained zoning and currently apply for zoning, respectively. (1) Includes acquisition pipeline projects. (2)
Based on GDV. (3) Other includes projects in Hamburg, Nuremberg, Göttingen, Trier and Braunschweig. (4) Project sales are not signed and may not materialise; only projects with c.€1.6bn GDV are already
under construction or in application process for building permit. Disposal of projects before completion might be considered. Gateway with a pro rata share of €2.2bn GDV. (5) Composed of current portfolio of 5
€3.7bn and the acquisition pipeline of c.€1bn.
Gateway develops sought-after high quality products
Commercial

 Office properties predominantly in Top 7 cities(1)

 Mixed-use projects in high street locations of mid-sized cities
 Modern architecture and flexible usage format

Cologne, Cubus Süd Dusseldorf, Kennedydamm Hamburg, Barmbeker Bahnhof

12,828 sqm 34,872 sqm 24,307 sqm
(completed) (ongoing) (ongoing)

Berlin, Michaelkirchstrasse Nuremberg, Breite Gasse Dusseldorf, Uerdinger Strasse

17,250 sqm 26,014 sqm 7,585 sqm
(ongoing) (ongoing) (ongoing)

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(1) Top 7 cities are Berlin, Frankfurt, Cologne, Dusseldorf, Hamburg, Munich and Stuttgart.
Gateway develops sought-after high quality products
Residential

 Focus on cities with >100,000 inhabitants

 New-built multifamily mid-rise buildings
 Modern living
 Expertise in developing mixed-use properties and sites

Frankfurt, Taunustrasse Berlin, Pankow Munich, Jugendstilpark

6,438 sqm 99,360 sqm 23,505 sqm
(ongoing) (ongoing) (ongoing)

Mannheim, Soho Erfurt, Steigerwald Dresden, Hansastrasse

84,194 qm 27,770 sqm 20,000 sqm
(ongoing) (ongoing) (ongoing)

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Lean operating set-up while orchestrating all steps in the value chain

Sourcing / Marketing & Asset & Property

Development Construction
Acquisition Sales Management

Total of 60 FTEs(1)

 Market intelligence
 Business plan and
due diligence
 Acquisition of land
 Cost estimation and
budget control
 Managing of
architects, engineers
and interior designers
 Letting  Strict controlling of  Value creation through
costs and timeline active asset
through dedicated management
 Cash flow project manager
optimisation and risk
reduction through  Renegotiation and
forward sales to  Typically package and successful renewals of
institutional investors single contracting anchor tenant leases

 Approvals, licenses
and permits and  Advertising and
accounting communication

 B2B sales

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(1) As per 31 Dec 2018 Gateway employs 53 FTEs, the short-term goal is to increase this number to 60 FTEs.
Gateway has attractive project-level margins

Median EBITDA margin(1) of past projects sold EBITDA margins(1) of projects under construction

>50%

Median:
>31%
>31%
Mid-term
target: 25%
>22%

2016A 2017A 2018A Project 1 Our Project

projects3 currently under
Project 5 construction
Project 7 Project 9

Note: Includes projects executed by Development Partner AG, which became part of Gateway in October 2018, as well as projects executed in the joint venture with Immvest Wolf.
(1) Before targeted overhead costs of c.€10-12m per annum. Past project margins include interest expenses, leading to actual EBITDA margins being higher than those shown in the 9
chart.
Accelerated future growth based on existing portfolio

~750

~440

(1)
~350

(1) ~200
~180
~120

2019E 2020E mid-term target

Total revenue(2) of Gateway (excluding JVs) Total pro rata revenue(2) of joint ventures

Note: All financial figures in €m.

Mid-term target metrics: Leverage of max. 3.0x net debt to EBITDA. Financial costs c.2.5% of gross debt for fully consolidated projects and c.6% of revenue for joint ventures. Tax
rate approximately 15%. Minorities c.5-10% of net income. Target land costs c.15-20% as % of GDV. Target inventory approx. €700-800m. 10
(1) Disposals before project completion may be considered on a project by project basis. (2) Total revenue includes revenue and other operating income as per company reporting.
Attractive development project pipeline in exclusivity will
accelerate future growth
Location Asset type Est. GDV (€m)

Stuttgart area Commercial ~230

Stuttgart area Commercial ~550

Frankfurt area Commercial ~135

Frankfurt area Commercial ~150

Total ~1,000

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€278m portfolio of standing assets: Gateway will seek to maximise
value for shareholders and will consider disposals going forward
Portfolio by asset class Portfolio NAV
As of 31 Dec 2018 As per 31 Dec 2018
€ in millions
Other
Mixed 5% Retail
10% 25%

195
Office
20% Total space 278
~183k sqm

83
Hotel
40% (1)
Standing assets Net portfolio Portfolio
(1) (2) (1)
debt NAV
Standing portfolio by region

Rent
Federal state Fair value (€m) Space (000‘ m2) Vacancy (%) (€m pa) Yield (%)
Lower Saxony 62.1 28.7 26% 3.2 5.2%

Bavaria 55.7 21.5 0% 3.4 6.1%

Saxony 47.4 48.5 33% 2.5 5.3%

Hesse 41.1 26.4 36% 2.5 6.2%

Northrhine-Westphalia 45.1 34.7 27% 3.2 7.1%

Hamburg area(3) 26.5 25.2 74% 1.0 3.7%

Total 277.9 185.0 33% 15.8 5.7%

Note: Fair value as per Cushman & Wakefield valuation report on 31 Dec 2018. (1) After sale of the properties in Erlangen, Neuss and Bochum in Q4 2018. (2) Comprises bank debt 12
(€150m) and other financial debt (€85m), net of cash sales in Q4 2018 (€40m). (3) Hamburg area includes Mecklenburg-Vorpommern and Schleswig-Holstein.
Appendix
Underlying assumptions for GDV
Assumed multiples and rents determined at the time of land acquisition, i.e. backward
looking

Asset type Assumed approximate monthly rent Assumed approximate multiple (yield)

~25 — 28.5x
Residential ~€10.50 — 12.50/sqm (3.5% – 4.0%)

Office ~€21/sqm ~24 — 28x

(Top 7 cities(1)) (3.6 – 4.2%)

~23 — 25x
Mixed-use ~€25/sqm (4.0% – 4.3%)

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Source: Management estimates based on benchmarks. (1) Top 7 cities are Berlin, Frankfurt, Cologne, Dusseldorf, Hamburg, Munich and Stuttgart.