Public Credit Suisse Investment Foundation Real Estate Germany€¦ · Investor group Tax-exempt...

Credit Suisse Investment FoundationReal Estate Germany

Public

Opening 2018

Credit Suisse Asset Management (Switzerland) Ltd.Global Real Estate – InternationalJanuary 2018

January 2018Global Real Estate – International 2/27

Overview

Key Information in Brief and Facts on the Opening

Product Overview

Global Real Estate Team- CSA Real Estate Germany

Real Estate Market in Germany

Properties in the Portfolio


CSA Real Estate GermanyKey Information in Brief

Opening with a subscripiton period until April 2018.

The capital will be used to further expand the portfolio and to reduce debt capital in the short term.

With the purchases recently made and the current purchasing commitments of CHF 130 million, the debt financing ratio is approximately 30%.

Another real estate pipeline with some CHF 120 million and a gross yield of 5.7% has already been identified.

Source: Credit Suisse Asset Management (Switzerland) Ltd. | Historical performance data and financial market scenarios are not reliable indicators of future performance


CSA Real Estate GermanyFacts on the Opening

Investor group Tax-exempt pension funds domiciled in Switzerland

Subscription period April 30, 2018, 12:00 noon (CET)

Value date May 31, 2018

Issue price Indicative price: CHF 1,249.65 per unit (NAV as of December 31, 2017); the NAV as of March 31, 2018, is definitive

Issuing premium 1% will be put into the investment group assets

Identification of units Security number: 23 547 751ISIN: CH0235 477 517

Source: Credit Suisse Asset Management (Switzerland) Ltd.


CSA Real Estate GermanyPortfolio Expansion

Location Usage Purchase Price Gross Yield Commencement

Münster, Monasterium Commercial property (office/retail) CHF 35.0 million 5.3% 01.11.2017

Cologne, HaubrichforumMedical practices with residential and retail zoning

CHF 27.0 million 5.0% 04.12.2017

Düsseldorf, The Frame Office property CHF 30.0 million 5.5% 31.12.2017

Duisburg, ICC Business Center Office property CHF 38.6 million 6.4% 30.04.2018


Intended Purchases

Purchases and Purchasing Commitments

Total current purchases, purchasing commitments and intended purchases CHF 245 million 5.7% 2017/18

Location Usage Purchase Price Gross Yield Commencement

Troisdorf, Logistics Logistics CHF 20.0 million 6.5% Spring 2018

Bochum, Kortumstrasse Commercial property (office / retail) CHF 57.5 million 5.6% Spring 2018

Erlensee Logistics CHF 35.8 million 5.9% Spring 2018


Münster, Monasterium

Purchase price CHF 35.0 million

Gross yield 5.3%

Construction date 1994/2001

Usage Commercial property (office and retail)

Weighted average lease 8.2 years

CSA Real Estate GermanyProperties Acquired


Cologne, Haubrichforum


Gross yield 5.0%

Construction date 1989 / Renovated 2009

Usage Medical practices with retail/residential properties



Dusseldorf, The Frame

Investment volume CHF 32.7 mn

Gross yield 5.5%

Construction date 1974 / Exterior renovations 2006Interior renovations 2017/18

Usage Office property

Weighted average lease 11 years

CSA Real Estate GermanyProperties Acquired and Certified


Duisburg, ICC Business Center


Gross yield 6.4%

Construction date 2002

Usage Office property



Product OverviewProfile

First Swiss investment foundation with investment focus on commercial investment properties in Germany

Only Swiss pension funds that are zero rated for tax purposes are approved as investors

The units are valued each quarter on the basis of the net asset value (NAV) - no premium / discount

Reinvestment of profits (no distribution)

The product currency is the Swiss franc (CHF) –the euro risk is not hedged

Maximum of one-third debt capital



Product OverviewSuccess Factors

Economic development in Germany is creating growth and yield potential in the real estate market.

Liquid real estate market with a high transaction volume; this opens up interesting investment opportunities.

NAV-based real estate investment group offers attractive entry opportunities (without premium).

Diversification compared to Swiss real estate products; the real estate markets in Switzerland and Germany behave differently.

Global Real Estate has a long track record in the German real estate market.



The focus is on commercial real estate in Germany. More than 20 cities with over 200,000 residents have been identified as target markets.

The portfolio is broadly diversified both geographically and in terms of property types, with commercial real estate in economically powerful and central locations in Germany.

Earnings and value potential is identified and exploited in a targeted manner thanks to proactive asset management and by establishing clearly defined property strategies.

The real estate market in Europe's largest economy offers attractive growth potential (positive rent growth, declining vacancy rates).

Growth market Investment focus Diversification Earnings and value orientation

Product OverviewInvestment Strategy



Product OverviewData ReportAnnual Financial Statements as of 30.06.2015 30.06.2016 30.06.2017

Total assets in CHF mn 207.0 283.3 402.55

Net assets in CHF mn 179.1 250.7 357.90

Asset value per unit in CHF 950.05 1,051.03 1,131.55

Rate of loss of rental income 9.20% 7.33% 4.24%

Debt financing ratio 25.04% 12.80% 10.60%

Leverage ratio 13.49% 11.50% 11.09%

Operating profit margin (EBIT margin) 87.57% 73.51% 80.59%

Operating expense ratio (TERISA) GAV 0.77% 0.82% 0.84%

Operating expense ratio (TERISA) NAV 0.89% 0.94% 1.02%

Return on equity (ROE) -1.21% 8.28% 7.13%

Return on invested capital (ROIC) -2.72% 8.53% 6.71%

Investment return -4.99% 10.63% 7.66%

Average discount rate real/nominal 4.97% / 6.44% 4.23% / 5.79% 4.14% / 5.71%

Source: Data report as of June 30, 2017 Historical performance data and financial market scenarios are not reliable indicators of future performance


-4.99%

10.63%7.66%

-15%

-10%

-5%

0%

5%

10%

15%

2014/15 2015/16 2016/17

Cashflow-Rendite

Bewertungen

Fremdwährungs-Effekte

Anlagerendite Total

Product OverviewDevelopment of investment return – Performance Attribution

Historical performance data and financial market scenarios are not reliable indicators of future performance


1) The figures from 2014 (with the exception of the investment return) are approximate / launched in 2014

1)

Cash flow yield

Valuation

Effect of FX

Total investment return


Product OverviewBroad Diversification

Source: Data report as of June 30, 2017

Number of properties

Market value CHF

CHF 10-20 mn

CHF 20-50 mn

More than CHF 50 mn

Up to CHF 10 mn


Product OverviewTen Largest Tenants

Source: Credit Suisse Asset Management (Switzerland) Ltd. | Last data point: June 30, 2017

Tenant Property Lease Ends Share

TJX (TK Maxx / Department store chain) Pforzheim / Singen 28.02.2025* 7.0%

DPD (logistics service) Ludwigsburg 28.02.2026 5.9%

State of Baden Württemberg Stuttgart, Heilbronner Str. 31.10.2024 5.5%

Sumitomo Dusseldorf, Glockhaus 30.06.2019 4.4%

BDO AG Dusseldorf, Glockhaus 30.09.2022 3.9%

Hennes & Mauritz SA Singen, August-Ruf-Str. 30.09.2023 3.6%

KPMG Leipzig, Münzgasse 30.04.2019 3.1%

Joey's Pizza Service Hamburg, Kontorhaus 31.05.2019 1.9%

L'ORÉAL Deutschland GmbH Dusseldorf, Glockhaus 31.12.2017 1.8%

TARGOBANK Dusseldorf, Glockhaus 30.04.2021 1.5%

*Weighted average of leases by annual income


Product OverviewRemaining Term of Leases

Source: Credit Suisse Asset Management (Switzerland) Ltd. | Last data point: 30.06.2017

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

< 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5-6 years 6-7 years 7-8 years 8-9 years 9-10 years > 10 years


Operational Management

Investment Committee

Global Real Estate Team - CSA Real Estate GermanyProven Experience

Peer PetersenAcquisitions and Sales Europe

Sven WalterConstruction & Development

Hanspeter StreuleFinance Manager

Christoph SchumacherHead of Global Real Estate

Karl-Josef SchneidersHead of Real Estate Germany

Francisca Fariña FischerHead of Real Estate International

Zoltan SzelyesHead of Global Real Estate Strategy

Bernd WesendahlAsset Management Germany

Radhia Rüttimann Product Manager



Real Estate Market in GermanyEconomic Development

Source: Credit Suisse Asset Management (Switzerland) Ltd., Eikon

Positive macroeconomic environment expected to continue CS Research forecasts economic growth of 2.7% in 2018 Private consumption continues to offer significant support

and is driven by the strong labor market

These forecasts are not reliable indicators of future performance

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E20

18E

Employment in mn Unemployment rate in % (RHS)


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Munich Berlin Dusseldorf Cologne Frankfurt Hamburg Stuttgart

Office Retail

Source: Credit Suisse, PMA; last data point September 2017

Real Estate Market in GermanyRental Markets in Germany

The robust conditions on the demand side are likely to lead to further rent increases

Rental price forecasts for prime rents 2018-2021 per year on average in %

Prime office rents in EUR per sq.m


German Real Estate Market Volatility and Total Returns

Source: Credit Suisse, MSCI/IPD; last data point December 2016Historical performance data and financial market scenarios are not reliable indicators of future performance

Total returns p.a. in %

Annualized volatility (MSCI / IPD total returns 2002 - 2016)

Properties in the PortfolioCSA Real Estate Germany




Dusseldorf, Glockhaus

Year of construction: 2001

CHF 54.7 million

16.2% of the portfolio

Office property

Cologne, Hohenstaufenring

Year of construction: 1967/2005

CHF 27.0 million


Business property(office and retail)

Stuttgart, Heilbronner Strasse


CHF 17.0 million


Office property

Frankfurt, Feldbergstrasse


CHF 40.1 million


Office property




Berlin, Alte Jakobstrasse


CHF 17.6 million



Hamburg, Kontorhaus


CHF 12.9 million


Office property

Leipzig, Münzgasse


CHF 9.7 million


Office property

.


Office property

Berlin, Friedrichstrasse


CHF 41.2 million





Singen, August-Ruf-Strasse


CHF 25.9 million


Retail property

Stuttgart, Hirschstrasse


CHF 10.8 million



Ludwigsburg, Carl-Benz-Strasse


CHF 15.7 million


Logistics property

Pforzheim, Karl-Friedrich-Strasse


CHF 17.6 million





Regensburg, Posthof


CHF 47.0 million


Business property(office and restaurants)




Radhia RüttimannReal EstatePortfolio ManagerDirector

[email protected]. +41 44 334 81 74*

Credit Suisse Investment Foundation Real Estate GermanyYour Contacts


Ulrich BraunReal EstateStrategies & AdvisoryManaging Director

[email protected]. +41 44 332 58 08*

* Please note that telephone calls to these numbers may be recorded. We assume that, by calling us, you accept this business practice.


Credit Suisse Investment Foundation Real Estate GermanyRisks and Risk Mitigation

Limited liquidity compared with larger listed investment products

The values of properties may fluctuate, for example due to the following:

Unfavorable changes in supply or demand that negatively impact the acquisition/sale or rental of properties

Development of interest rates and/or currencies Taxes or changed regulatory conditions in the

respective markets Environmental risks Disasters Force majeure and terrorism

Thorough due diligence prior to purchase of any property

Continuous monitoring of individual investments, rental markets and the macroeconomic environment by our Global Real Estate Strategy team

Local internal and external experts on regulatory framework conditions and taxes

Broad portfolio diversification through carefully selected properties

Investments primarily through equity and a carefully selected level of debt capital absorb negative interest rate developments

Risk Mitigation


Disclaimer

The information provided herein constitutes marketing material. It is not investment advice or otherwise based on a consideration of the personal circumstances of the addressee nor is it the result of objective or independent research. The information provided herein is not legally binding and it does not constitute an offer or invitation to enter into any type of financial transaction.The information provided herein was produced by Credit Suisse Group AG and/or its affiliates (hereafter "CS") with the greatest of care and to the best of its knowledge and belief. The information and views expressed herein are those of CS at the time of writing and are subject to change at any time without notice. They are derived from sources believed to be reliable.CS provides no guarantee with regard to the content and completeness of the information and does not accept any liability for losses that might arise from making use of the information. If nothing is indicated to the contrary, all figures are unaudited. The information provided herein is for the exclusive use of the recipient.Neither this information nor any copy thereof may be sent, taken into or distributed in the United States or to any U. S. person (within the meaning of Regulation S under the US Securities Act of 1933, as amended).It may not be reproduced, neither in part nor in full, without the written permission of CS. Investments in foreign currencies involve the additional risk that the foreign currency might lose value against the investor's reference currency.The key risks of real estate investments include limited liquidity in the real estate market, changing mortgage interest rates, subjective valuation of real estate, inherent risks with respect to the construction of buildings and environmental risks (e.g., land contamination).Credit Suisse Investment Foundation, Zurich, is the issuer and manager of CSA products. Credit Suisse (Switzerland) Ltd, Zurich, is the custodian bank. The articles of incorporation, regulations and investment guidelines, as well as the most up-to-date annual report and fact sheets, may be obtained free of charge from the Credit Suisse Investment Foundation. Only pension funds domiciled in Switzerland that are not subject to tax are permitted as direct investors.

Copyright © 2018 Credit Suisse Group AG and/or its affiliates. All rights reserved.

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