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Erste Group Research Issuer profile | Corporate Bonds | Austria 16. January 2020

CA Immo Group https://www.caimmo.com

Analyst: Elena Statelov, CIIA High-quality office property portfolio [email protected] The core competence of CA Immo (rating: Baa2; outlook: stable) is the letting, management, and development of high-quality office property. The

core regions are Austria, Germany, Poland, Romania, the Czech Republic, and Hungary. As of 30 September 2019, the group’s headcount was 423.

Starwood Capital Group is currently by far the largest single shareholder of

CA Immo at 26%. Other significant shareholder is S Immo with around 6%.

As of 30 September 2019, the property portfolio of the group consisted of 76 objects with a total usable floor space of about 1.4mn m2. The IFRS book

value amounted to about EUR 4.9bn, with investment properties accounting for about 81% thereof and property assets under development (including land bank) accounting for c. 18%, while about 1% of properties are held for trading. Germany is the biggest single market at 48%.

The CA Immo Group has successfully streamlined its portfolio of non- strategic properties. The group’s in-house project development remains its central growth driver with a clear strategic focus on Berlin, Frankfurt and

Munich. According to management, in the medium term, the group may expand its focus in Germany to additional, sustainably attractive cities. Contents High-quality office property portfolio ...... 1 At the moment, the property sector is benefiting from the good economy and SWOT analysis ...... 2 the low interest-rate policy of the ECB. Earnings before taxes (EBT) reached Company profile ...... 3 a new high of EUR 396.2mn in FY 2018 and remained on an upward trend Financials ...... 8 in the first nine months of 2019. This was not the least the consequence of the highly positive revaluation result.

The cash flow from operating activities has been strong since 2014, Major Markets & Credit Research whereas the free cash flow has been negative a few times due to the Gudrun Egger, CEFA (Head) growing property portfolio. The company operates a shareholder-friendly

dividend policy. Corporate Bonds Peter Kaufmann, CFA Most of CA Immo’s relevant credit ratios are better than the median values Bernadett Povazsai-Römhild, CEFA of the peer group. Since 2014, CA Immo has kept its gearing within a tight Elena Statelov, CIIA bandwidth while significantly improving its interest coverage ratio. The group has maintained a solid LTV ratio of continuously below 40% in the past five years.

In the wake of the good 9M results, Management is optimistic about Q4 Historical performance data are not indicative 2019 and has confirmed the FFO I guidance of above EUR 125mn for the of the future development. full fiscal year of 2019.

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SWOT analysis

Strengths and opportunities

 High-quality and geographically diversified portfolio of office property as well as long-term track record in the segment “project development”. Strong project pipeline in the German office market

 Gradual reduction in average financing costs via redemption of expensive loans

 Strong pool of tenants and well staggered expiry profile of lease contracts

 CA Immo has been awarded an investment grade rating by Moody’s, which makes a stronger focus on the EUR capital market easier; strong balance sheet structure and high equity ratio

Weaknesses and threats

 Relatively small property portfolio by international comparison

 As property company, CA Immo operates in a highly capital- intensive sector; dependence on macro-economic (especially in commercial property) and demographic factors (especially in residential property)

 The company engages in the CEE office market, which has a higher yield but is also more volatile; it also runs a slightly elevated business risk given the concentration of large parts of its project development business in Germany

 Dividend policy beneficial for shareholders

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Company profile

CA Immo specialises in office property across the capital cities of Central and Eastern Europe (CEE). The company, founded in Vienna in 1987, was originally only operating on the Austrian market, but from 1999 onwards CA Immo would also invest in Central and Eastern Europe. In line with the expansion in Eastern Europe, the property portfolio in Austria and from 2006 onwards in Germany has also continuously grown.

The parent company of CA Immo Gruppe is CA Immobilien Anlagen Aktiengesellschaft, a company listed at the Vienna stock exchange since 1988. The main activity of the group holding company1 is the strategic and operating management of the domestic and foreign subsidiaries. In Austria the domestic property is held directly via CA Immo investments. In Germany CA Immo Deutschland GmbH is the operating platform of all German activities of the group. The German CA Immo subsidiary omniCon handles construction management. The Central and Eastern European portfolio of investment properties is held via direct CA Immo investments and by Europolis GmbH (formerly Europolis AG).

Ownership structure

Disinvestment of Immofinanz The most recent significant change to the ownership structure of CA Immo from its role as core occurred in the middle of 2018, when the in-depth talks about a possible shareholder of CA Immo merger with Immofinanz AG were suspended. From 2 August 2016 to 27 September 2018, Immofinanz was the biggest single shareholder of CA Immo via its wholly owned subsidiary Gena Elf Immobilienholding GmbH, holding an investment of about 26% in the capital stock. At the beginning of July 2018, Immofinanz sold its CA Immo investment to SOF-11 Klimt CAI S.a r.l., a company managed by Starwood Capital Group. The transaction was closed at the end of September.

Starwood: currently the At the time of writing, Starwood was the biggest single shareholder of CA biggest single shareholder Immo with an investment of about 26%. The remainder of the shares outstanding (about 74% of the capital stock) are free float and held by institutional and retail investors. Other significant shareholder is S Immo with around 6%.

Property portfolio

Nearly 100% invested in the EU The European Union accounts for almost 100% of CA Immo’s investments. The business model of the CA Immo Group is aimed at the generation of stable, recurrent rental income from a high-quality pool of tenants with high creditworthiness and of additional income from property development and the sale of property. In addition, the company has considerable in-house construction competence at its disposal and thus covers the entire value chain in the field of commercial property.

1 CA Immobilien Anlagen AG also holds property to the tune of about EUR 308mn directly.

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Core regions of the property portfolio

Source: CA Immo

Total property portfolio: 76 As of the end of September 2019, the property portfolio of the CA Immo objects with a total usable floor Group consisted of 76 objects (end of 2018: 74) with a lettable floor space of space of 1.4mn m2 about 1.4mn m2 2. The biggest object by floor space is currently the office building ensemble Millennium Towers in Budapest (70,637m2).

Portfolio structure Portfolio structure by city (Book value 9M 2019: EUR 4.9bn) (Book value 9M 2019: EUR 4.9bn)

Short-term Landbank: 5% property Frankfurt: 7% assets**: 1% Bucharest: 8% Berlin: 21% Active development project: 13% Other: 8%

Prague: 8% Munich: 16%

Warsaw: 11% Investment properties*: Budapest: 10% 81% Vienna: 11%

*) Contains properties used by CA Immo **) Short-term property assets contain properties held for sale or trading

Source: CA Immo, Erste Group Research

Investment properties: most As of 30 September 2019, the book value of the entire property portfolio of important source of income CA Immo amounted to EUR 4.9bn. Investment properties account for about 81% of total property assets and are the most important source of income for CA Immo. Property assets in development (including land bank) account for 18%, while about 1% of property assets are held for trading.

2 Including rented properties and lettable open areas Major Markets & Credit Research Page 4

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59% of objects are located in 59% of the objects are in Austria and Germany, with the CEE region Germany and Austria accounting for the remaining 41%. They are largely located in the capital cities of these regions, where purchase power is strong. Germany makes up 48% of the business and is thus the biggest single market; according to Management, it will continue to grow.

Business segment: Investment Properties

Investment property portfolio CA Immo buys, lets, and manages property at business locations in central 9M 2019: EUR 3.9bn and 1.4mn Europe. The investment property portfolio was capitalised at EUR 3.9bn as m2 of total usable floor space of 30 September 2019. It contains office properties (9M 2019: 89% of total book value of investment properties), hotels (7%), and a small portion of retail, residential, and logistics properties. The total lettable floor space of the investment property portfolio (including properties used by CA Immo and rented properties) amounted to 1.4mn m2 as of 30 September 2019.

Germany: biggest single In terms of total portfolio value (i.e. book value), 50% of the investment investment property market properties of CA Immo are located in the CEE and SEE regions. Germany (36%) and Austria (14%) account for the remaining investment properties. Germany is the biggest single investment property market of the group.

Properties owned by type Properties owned by city (9M 2019: book value EUR 3.9bn) (9M 2019: book value EUR 3.9bn)

Frankfurt: 3% Other: 5% Bukarest: 10% Berlin: 17% Hotel: 7%

Andere: 9%

München: 13% Prag: 9%

Budapest: Warschau: 13% 13% Office: 88% Wien: 13%

Source: CA Immo, Erste Group Research

As of 30 September 2019, the occupancy rate of the investment property portfolio was a very high 95%3 (2018: 94.4%). Germany recorded the highest occupancy rate at 98.9%4. In Austria, this rate was at 89.2%5, and in the CEE countries at 94.6%6. The average total rental yield (i.e. annual

3 Excludes properties used by CA Immo and the office buildings Orhideea Towers (Bucharest) and ViE (Vienna) as well as office buildings at Kunstcampus (Berlin), all of which were completed and transferred to the investment portfolio at the end of 2018 or throughout 2019 but are still in their stabilisation phase. 4 Excludes properties used by CA Immo and properties held for sale or trading, and excludes the office building at Kunscampus (Berlin), which is still in its stabilisation phase, completed in 2019 and transferred to the investment portfolio. 5 Excludes the office building ViE (Vienna), which is still in its stabilisation phase, completed in 2018 and transferred to the investment portfolio. 6 Excludes the office building Orhideea Towers (Bucharest), which is still in its stabilisation phase, completed at the end of 2018 and transferred to the investment portfolio. Major Markets & Credit Research Page 5

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rental income in terms of property value) was 5.6%3 (2018: 5.8%). However, it differs from region to region: CA Immo makes 5.2% in Austria, 4.3% in Germany, and from 5.9% to 7.3% in the CEE region. The CEE office market has performed particularly well in recent years.

High share of blue-chip tenants CA Immo currently has more than 1,300 tenants in its properties. According to information from the company, the good diversification of the tenant structure ensures there is no dependence on any individual sector(s). Among the tenants are renowned companies such as PWC, Frontex, InterCity, Google, Morgan Stanley, Land Berlin, and TOTAL. According to Management, the top 20 tenants account for about 32% of rental income in terms of total CA Immo property portfolio. Lease agreements are usually signed for fixed terms but may come with extension clauses. The weighted average lease term (WALT7) amounted to 4.2 years at the end of September 2019, with Hungary (2.7 years) and Germany (6.2 years) marking the tail ends of the bandwidth. The WALT of the top 20 tenants was 6.5 years. All lease agreements across the entire portfolio are in euro.

Expiry profile of the lease agreements (annualised) As of September 2019

Source: CA Immo

Business segment: Project Development

Project development as growth In complement to its core business of Investment Properties, CA Immo driver develops high-value commercial properties in central European capital cities. The primary goal of development is to generate organic growth of the existing portfolio and sustainable cash flows. In addition, existing land reserves in the portfolio are increased in value by obtaining building rights. The focus of the development activity by book value is on Germany (Berlin, Frankfurt, Munich) at 98%. The wholly owned construction management company omniCon provides CA Immo with a high degree of in-house development competence and technological prowess. Office and hotel properties are mainly developed for the company’s own investment portfolio, whereas residential properties are intended for sale upon completion.

Germany continues to hold The book value of property value under development amounted to growth potential EUR 844.8mn as of 30 September 2019, i.e. up 29.7% on 31 December 2018. Project developments (EUR 601.2mn) and land reserves (EUR

7 Calculated to first break option of the tenant, otherwise longer. Major Markets & Credit Research Page 6

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231.8mn; N.B. see above, unused plots of land) in Germany accounted for 99%, while CEE made up 1%.

According to CA Immo, there are nine projects (seven in Germany and two in the Czech Republic) in the project pipeline.

Strategy

Generally speaking, the CA Immo Group steers and manages its property portfolio with the goal of creating sustainable value.

Property development: The process of in-house development and taking possession of modern, investment focus still on energy-efficient core properties in the core markets remains the central Germany organic growth driver for CA Immo. Like in previous years, the development activities of the company are focussed on the German market, where CA Immo has land reserves and development competence. This strong positioning of the group as established, supra-regional, successful property developer in Germany is of crucial relevance for the future growth strategy of the company. Here, the investment focus is largely on office properties.

Expansion to B cities possible As far as Germany is concerned, the strategic focus is on Munich, Frankfurt, and Berlin, and on the capital cities of the other countries (Vienna, Warsaw, Prague, Budapest, and Bucharest). According to Management, an expansion to further, sustainably attractive cities with more than 500,000 inhabitants is possible in Germany.

Property acquisitions as Beyond property development, selective acquisitions in the core markets of additional growth impulse the group are meant to strengthen the portfolio and create additional momentum for rental income. CA Immo can see growth opportunities especially in its East European core markets.

Successful sale of non- In recent years, the strategic focus has been on the disinvestment of non- strategic investment in strategic properties, on the further optimisation of the finance structure, and Immofinanz on value creation through growth in the defined core markets. In November 2019, CA Immo sold the investment in Immofinanz. This transaction was in line with CA Immo’s goal of disinvesting non-core investments. It means there are no capital affiliations between the two companies anymore. Management wants to reinvest the proceeds from this disinvestment (about EUR 110mn) in the company’s core business.

Rating

Stable investment grade rating In December 2015, Moody’s awarded CA Immobilien Anlagen AG an since 2015 investment grade issuer rating of Baa2, which was confirmed in July 2019. In mid-March, the rating agency upgraded the outlook from negative to stable after talks about a possible merger with Immofinanz had been suspended and the risk of a weaker balance sheet had thus failed to materialise.

The essential factors for keeping the investment grade rating are the good quality and geographic diversification of the office portfolio, the limited concentration risk of tenants, the valuable land bank in Germany, and moderate debt. The stable outlook reflects the expectation of Moody’s that CA Immo will continue to generate a stable cash flow and good liquidity. The outlook also hinges on the still favourable operative environment. Major Markets & Credit Research Page 7

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Financials

Income & profitability

Continuous increase in rental CA Immo has increased group revenues (i.e. rental income and operating income since 2014 costs charged to tenants) in the past five years (2014-2018) by about 40%, with every year recording a rise on the previous one. This combined item reached a new high in 2018 at EUR 248.3mn (+7.2% y/y), while exceeding last year’s level by 16.4% for the first nine months of the year. Rental income (2018: EUR 192.4mn; 9M 2019: EUR 164.8mn) constitutes the most important source of revenue. This item, too, has been up continuously since 2014.

Positive result from revaluation In CA Immo’s accounts, the result from revaluation enters the calculation of triggers significant increase in EBIT and EBT. Due to the significant increase in the result from revaluation EBIT and EBT (2018: >+150%; 9M 2019: >+100% y/y), which reflects the extremely positive market environment especially in Germany (most important core market of the group), EBIT recorded an increase of 28.4% y/y for 2018 and of 45.1% y/y for the first nine months of 2019. EBT also increased, reaching EUR 396.2mn (+30.8% y/y) in FY 2018 and EUR 247.8mn for 9M 2019 (+35.8% y/y).

Cash flow

Property sector: volatile cash The property sector is cyclical and capital-intensive by nature. This means flows that cash flows can be strongly volatile – especially the cash flow from investment activities (purchases/sales) and from financing activities (finance and/or development of objects). Constant or rising operating cash flows, on the other hand, are regarded as signs of a high-quality property portfolio and good management. The situation of CA Immo is in line with the overall situation in the sector.

Strong positive cash flow from CA Immo has generated strong, positive operating cash flows throughout operating activities over the the years since 2014. They take into account changes in working capital years from the sale of certain properties held for sale. The free cash flow (cash flow from operating and investment activities minus dividend pay-out) has been negative a few times in the past five years, which is due to the qualitative growth of the property portfolio and is reflected in the cash flow from investment activities (net balance between investments and property sales). In FY 2018, the free cash flow amounted to EUR -165.1mn (9M 2019: EUR -81.6mn).

Continuity in dividends Up until FY 2010, the CA Immo Group would not distribute any dividends but would instead plough back the results and funnel them into property investments. For the time being, the company sticks to its result-oriented dividend policy that lines up with the profitability, growth prospects, and capital requirements of the CA Immo Group. The dividend ratio is about 70% of sustainable results (FFO I8).

Highest FFO I in company As pointed out above, the ratio of FFO is used as central indicator of the history sustainable profitability and ability to pay dividends of the group. In simple

8 FFO I (Funds From Operations) do not contain any effects from sales and are adjusted as annual result for non-cash items such as depreciation and amortisation, property (re)valuation, and non-cash effects from interest hedge instruments. Major Markets & Credit Research Page 8

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terms, the ratio illustrates how much cash flow is generated sustainably in the property business. Since 2014, CA Immo has continuously boosted its FFO I. It amounted to EUR 118.5mn (+11.4% y/y) in 2018 and to EUR 101.4mn (+8.2% y/y) for 9M 2019.

Finance & debt

CA Immo finances its business through equity and long-term debt in the form of secured mortgage loans. Therefore, a large part of the group’s property assets serves as collateral. The mortgage loans secured by property are usually taken out by the subsidiary that holds the respective property. This means that the covenants do not affect the key ratios of the group.

The sources of unsecured finance within the parent company of the group (CA Immobilien Anlagen AG) consist of six EUR corporate bonds that total EUR 990mn (including a convertible bond of EUR 200mn). The unmortgaged properties of the group with a book value of about EUR 2.3bn as of the end of 3Q 2019 represent a critical criterion for the investment grade of the group.

Further optimisation of the Interest expense constitutes the biggest item on the expenditure side in the finance structure property sector. It can affect results in a seriously negative way when interest rates are rising. CA Immo has continued to optimise its finance structure in the past five years on the back of the increased volume of unsecured corporate bonds, whose issue proceeds were basically used to redeem and substitute more expensive loans in the CEE portfolio. As a result, average financing costs (including derivatives) were at 1.7% at the end of December 2018, in comparison with 4.1% as of 31 December 2014. The company had also further stepped up the average maturity of its finance to 6.4 years as of 31 December 2018.

Slight upward trend of net debt Net debt has been on a slight upward trend since 2014, which reflects the since 2014; gearing fluctuating company's growth. At the end of December 2018, net debt was about EUR mildly 1.6bn and thus c. 15% above last year’s level. By 30 September 2019, it had increased to EUR 1.7bn. The gearing ratio (net debt / equity) has remained within a narrow bandwidth in the past five years and has most recently edged from 59.4% (31 December 2018) to 62.5% (30 September 2019). The equity ratio does not fluctuate much either. Management’s long- term goal is a bandwidth of 45-50%.

High interest coverage The interest coverage ratio has improved in the past five years both on the basis of EBITDA and EBIT to 3.9x (EBITDA) and 12x (EBIT), respectively, at the end of 2018 (end of September 2019: 3.8x and 12.7x, respectively).

Solid LTV ratio CA Immo aims for a balanced relation of credit amount and the market value of the property in question (loan-to-value ratio9). In the past five years, the LTV ratio has consistently been below 40%. According to company definition, it was at 35% at the end of 2018 (9M 2019: 35.5%). Generally, Management aims to keep the net LTV ratio between 35% and 40%.

9 The loan-to-value ratio (LTV) expresses financial liabilities in terms of the market value of the property portfolio. An LTV of 40% means that 40% of the property portfolio value is financed by debt. Major Markets & Credit Research Page 9

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Liquidity

At the end of December 2018, CA Immo had liquid funds of EUR 347.3mn (September 2019: EUR 352.1mn) at its disposal, which fully covered the short-term financial liabilities (end of 2018: EUR 220mn; 9M 2019: EUR 157mn). In addition, the company also had unused credit lines for development projects in Germany of EUR 652mn available (9M September 2019: EUR 360mn).

CA Immo in compliance with Most of the corporate bonds and loans contain financial covenants such as covenants according to “Change of Control10”, “Cross Default11”, or LTV ratio. According to Management Management, the company was in compliance with these as of 30 September 2019, as it had been in previous years, too.

Balanced maturity profile of financial liabilities as of end of September 2019, in EUR mn

Source: CA Immo

10 Obtaining a direct or indirect controlling investment in the company as defined by the Austrian Take-Over Act, if it leads to a significant impairment of CA Immo’s ability to honour its obligations arising from its bonds. 11 According to which the amount outstanding can be called if early redemption of another financial obligation is demanded from the company or one of its significant subsidiaries due to non-compliance with credit terms. Major Markets & Credit Research Page 10

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Appendix

Income Statement

IFRS, in EUR '000, 31/12 2014 2015 2016 2017 2018 9M 2018 9M 2019 Rental income 145,195 154,817 165,603 180,281 192,440 141,538 164,815 Operating costs charged to tenants 33,471 38,290 46,906 51,263 55,828 41,698 38,504 Operating expenses -39,261 -44,567 -52,726 -55,696 -60,107 -45,028 -41,577

Other expenses directly related to properties rented -10,560 -12,948 -12,633 -12,489 -12,961 -7,737 -17,361

Net rental income 128,845 135,592 147,150 163,359 175,200 130,471 144,381 Other expenses directly related to properties under development -3,175 -2,159 -2,333 -2,844 -6,141 -2,633 -2,429 Income from the sale of properties and construction w orks 14,870 9,535 28,099 54,209 44,417 37,248 12,178 Book value of properties sold incl. ancillary and construction costs -6,145 -6,446 -18,669 -38,249 -37,011 -32,509 -13,728 Result from trading and construction works 8,725 3,089 9,430 15,960 7,406 4,739 -1,550 Result from the sale of investment properties 29,827 36,547 23,340 28,802 8,225 5,320 16,268 Indirect expenses -44,386 -42,452 -44,140 -44,618 -53,246 -34,343 -31,604 Income from services rendered 15,990 16,219 13,265 11,109 12,145 9,312 6,617 Other operating income 11,469 1,470 873 1,051 1,485 515 447 EBITDA 149,051 148,558 147,585 172,818 145,075 113,382 132,130 Depreciation and impairment of long-term assets -10,285 -2,915 -3,460 -2,658 -2,385 -1,669 -3,456 Changes in value of properties held for trading 204 32 29 -1,188 -234 0 -73 Depreciation and impairment/reversal -10,081 -2,883 -3,431 -3,846 -2,619 -1,669 -3,529 Revaluation gain 34,121 257,563 179,094 181,886 293,220 112,733 203,579 Revaluation loss -38,331 -43,744 -40,834 -78,021 -16,759 -20,236 -10,127 Result from revaluation -4,210 213,819 138,260 103,865 276,461 92,497 193,452 Result from joint ventures 8,157 43,221 11,420 71,564 23,354 19,914 3,153 EBIT 142,917 402,715 293,834 344,401 442,271 224,125 325,205 Finance costs -81,767 -60,172 -41,622 -42,010 -36,966 -26,409 -32,172 Foreign currency gains/losses -640 -4,191 -328 -617 3,502 3,724 442 Result from derivatives -13,252 -15,299 -1,662 -8,068 -21,301 -23,386 -52,937 Result from financial investments 47,402 12,344 7,229 7,665 11,081 6,682 10,268 Result from other financial assets -9,351 -13,264 -15,768 -3,459 0 0 0 Result from associated companies -3,146 -6,297 -4,077 5,034 -2,387 -2,195 -2,967 Financial result -58,346 -86,701 -56,228 -41,456 -46,071 -41,585 -77,366 Net result before taxes (EBT) 84,571 316,014 237,606 302,945 396,200 182,540 247,839 Income tax expense -13,773 -95,174 -53,688 -64,805 -90,896 -46,630 -69,909 Consolidated net income 70,798 220,839 183,916 238,140 305,304 135,910 177,930

Source: CA Immo, Erste Group Research

Cash flow statement

IFRS, in EUR '000, 31/12 2014 2015 2016 2017 2018 9M 2018 9M 2019 Cash flow from operations 107,865 102,898 130,052 135,190 129,765 103,613 99,226 Cash flow from operating activities 99,501 113,157 125,368 132,460 109,329 88,468 87,421 Cash flow from investing activities -184,200 101,548 39,474 -193,756 -200,005 -23,156 -85,253 Dividends -35,142 -44,464 -47,904 -60,691 -74,423 -74,423 -83,725 Free cash flow -119,841 170,241 116,938 -121,987 -165,099 -9,111 -81,557 Cash flow from financing activities -362,962 -171,372 23,455 49,968 84,254 33,096 –23.340

Source: CA Immo, Erste Group Research

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Balance sheet

IFRS, in EUR '000, 31/12 2014 2015 2016 2017 2018 9M 2019 Investment properties 2,092,917 2,714,305 2,923,676 3,155,677 3,755,196 3,934,019 Investment properties under development 496,252 408,979 433,049 579,274 651,575 844,835 Ow n used properties 7,533 7,016 6,643 5,500 5,223 13,513 Office furniture and equipment 1,399 5,710 5,599 5,462 5,938 7,117 Intangible assets 15,845 11,567 8,195 6,703 5,689 5,262 Investments in joint ventures 206,136 172,286 194,838 214,950 200,012 185,489 Financial assets 385,410 134,824 90,199 86,466 65,163 61,013 Deferred tax assets 4,301 2,376 1,563 1,934 1,951 1,716 Long-term assets 3,209,811 3,457,063 3,663,761 4,055,966 4,690,747 5,052,965 Assets held for sale and relating to disposal groups 91,481 54,048 26,754 40,106 15,144 1,190 Properties held for trading 18,445 22,069 15,549 36,459 44,468 57,721 Receivables and other assets 120,983 99,223 84,934 96,905 97,115 92,069 Current income tax receivables 42,037 39,218 15,552 19,343 19,184 21,731 Securities 24,547 105,250 101,555 117,668 114,544 114,552 Cash and cash equivalents 163,638 207,112 395,088 383,288 374,302 352,064 Short-term assets 461,131 526,920 639,433 693,769 664,757 639,327 Total assets 3,670,942 3,983,983 4,303,194 4,749,735 5,355,504 5,692,292

Shareholders' equity 1,951,707 2,120,450 2,219,082 2,419,270 2,639,697 2,756,402 Provisions 7,726 15,980 56,058 36,756 29,327 39,898 Interest-bearing liabilities 1,026,620 858,776 1,412,635 1,680,170 1,723,749 1,919,388 Other liabilities 162,352 84,911 36,965 50,911 67,485 122,344 Deferred tax liabilities 145,991 197,365 245,312 296,871 346,793 401,597 Long-term liabilities 1,342,689 1,157,032 1,750,970 2,064,948 2,167,353 2,483,227 Current income tax liabilities 11,372 16,382 16,736 17,638 38,648 20,519 Provisions 51,259 69,177 111,311 127,386 119,646 108,522 Interest-bearing liabilities 202,530 545,214 153,004 68,920 219,645 156,541 Other liabilities 84,841 75,728 52,091 51,505 169,588 167,081 Liabilities relating to disposal groups 26,543 0 0 71 927 0 Short-term liabilities 376,545 706,501 333,142 265,518 548,454 452,664 Total liabilities and shareholders' equity 3,670,941 3,983,983 4,303,194 4,749,735 5,355,504 5,692,292

Source: CA Immo, Erste Group Research

Ratios*

Profitability ratios 2014 2015 2016 2017 2018 9M 2019 Property portfolio value, in EUR mn 2,597 3,130 3,363 3,740 4,412 4,792 Total usable space (excl. parking, excl. projects)*, m² 2,233,988 1,655,187 1,609,242 1,466,057 1,586,183 1,571,820 Gross yield investment properties** 6.6% 6.5% 6.1% 6.2% 5.8% 5.6%

Credit ratios Cash and cash equivalents, in EUR mn 163.6 207.1 395.1 383.3 374.3 352.1 Financial liabilities, in EUR mn 1,229 1,404 1,566 1,749 1,943 2,076 - non-current financial liabilities 1,027 859 1,413 1,680 1,724 1,919 - current financial liabilities 203 545 153 69 220 157 Net debt, in EUR mn 1,066 1,197 1,171 1,366 1,569 1,724 Equity ratio 53.2% 53.2% 51.6% 50.9% 49.3% 48.4% Gearing (Net debt / equity) 54.6% 56.4% 52.7% 56.5% 59.4% 62.5% Net debt / EBITDA 7.1x 8.1x 7.9x 7.9x 10.8x 10.5x Financial liabilities / EBITDA 8.2x 9.5x 10.6x 10.1x 13.4x 12.7x EBIT / Interest expense 1.7x 6.7x 7.1x 8.2x 12.0x 12.7x EBITDA / Interest expense 1.8x 2.5x 3.5x 4.1x 3.9x 3.8x Loan-to-Value-Ratio 41.0% 38.2% 34.8% 36.5% 35.6% 36.0% Loan-to-Value-Ratio (calculation according to CA Immo) 39.4% 37.2% 34.2% 35.8% 35.0% 35.5% Loan-to-Value-Ratio (net debt / balance sheet total) 29.0% 30.0% 27.2% 28.8% 29.3% 30.3%

*) In 9M 2019 the dynamic key figures are calculated on the basis of EBITDA, EBIT and interest expenses on a 12M basis. **) Including rented land plots and rentable open spaces ***) Excluding the recently completed office buildings, which have been added to the portfolio

Source: CA Immo, Erste Group Research

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Peer group comparison

FY 2018, IFRS Atrium Immofinanz S IMMO Median CA Immo

Rating / Outlook Moody's Baa3 / positiv Baa2 / stabil Rating / Outlook S&P BBB- / stabil BBB- / stabil Rating / Outlook Fitch BBB / stabil

Balance sheet total, in EUR mn 3,293 5,838 2,720 5,356 Revenues, in EUR mn 242.4 333.8 192.4 248.2 EBITDA in EUR mn 149.5 159.0 83.1 145.1 Property portfolio* (according to balance sheet), in EUR mn 2,906 4,291 2,121 4,412 EBITDA margin 61.7% 47.6% 43.2% 47.6% 58.5% EBITDA / Property portfolio* 5.1% 3.7% 3.9% 3.9% 3.3% Gearing (Net debt / Equity) 67.5% 64.1% 118.6% 67.5% 59.4% Net debt / EBITDA 8.1x 11.3x 15.9x 11.3x 10.8x EBITDA / Interest expense 4.3x 2.3x 2.2x 2.3x 3.6x LTV-Ratio (Net debt / Portfolio property*) 41.7% 41.8% 63.3% 41.8% 35.6% LTV-Ratio (Net debt / Balance sheet total) 36.8% 30.7% 48.5% 36.8% 29.3%

* Companies calculate this figure differently. For a better comparison, a common approach was used here. Values can differ from those provided by companies.

Source: Companies‘ financial reports, Erste Group Research

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ContactsContacts Group Research Treasury – Erste Bank Vienna

Head of Group Research Group Markets Retail and Agency Business Friedrich Mostböck, CEFA +43 (0)5 0100 11902 Head: Christian Reiss +43 (0)5 0100 84012

CEE Macro/Fixed Income Research Markets Retail Sales AT Head: Juraj Kotian (Macro/FI) +43 (0)5 0100 17357 Head: Markus Kaller +43 (0)5 0100 84239 Zoltan Arokszallasi, CFA (Fixed income) +361 373 2830 Katarzyna Rzentarzewska (Fixed income) +43 (0)5 0100 17356 Group Markets Execution Malgorzata Krzywicka (Fixed income, Poland) +43 (0)5 0100 17338 Head: Kurt Gerhold +43 (0)5 0100 84232

Croatia/Serbia Retail & Sparkassen Sales Alen Kovac (Head) +385 72 37 1383 Head: Uwe Kolar +43 (0)5 0100 83214 Mate Jelić +385 72 37 1443 Ivana Rogic +385 72 37 2419 Corporate Treasury Product Distribution AT Czech Republic Head: Christian Skopek +43 (0)5 0100 84146 David Navratil (Head) +420 956 765 439 Jiri Polansky +420 956 765 192 Fixed Income Institutional Sales Michal Skorepa +420 956 765 172 Nicole Gawlasova +420 956 765 456 Institutional Distribution non CEE Hungary Head: Margit Hraschek +43 (0)5 0100 84117 Orsolya Nyeste +361 268 4428 Karin Rattay +43 (0)5 0100 84118 Christian Kienesberger +43 (0)5 0100 84323 Romania Bernd Bollhof +49 (0)30 8105800 5525 Eugen Sinca +40 3735 10435 Rene Klasen +49 (0)30 8105800 5521 Dorina Ilasco +40 3735 10436 Christopher Lampe-Traupe +49 (0)30 8105800-5507 Slovakia Charles-Henry La Coste de Fontenilles +43 (0)5 0100 84115 Maria Valachyova (Head) +421 2 4862 4185 Bernd Thaler +43 (0)5 0100 84119 Katarina Muchova +421 2 4862 4762 Bank Distribution Major Markets & Credit Research Head: Marc Friebertshäuser +49 (0)711 810400 5540 Head: Gudrun Egger, CEFA +43 (0)5 0100 11909 Sven Kienzle +49 (0)711 810400 5541 Ralf Burchert, CEFA (Sub-Sovereigns & Agencies) +43 (0)5 0100 16314 Michael Schmotz +43 (0)5 0100 85542 Hans Engel (Global Equities) +43 (0)5 0100 19835 Ulrich Inhofner +43 (0)5 0100 85544 Margarita Grushanina (Austria, Quant Analyst) +43 (0)5 0100 11957 Klaus Vosseler +49 (0)711 810400 5560 Peter Kaufmann, CFA (Corporate Bonds) +43 (0)5 0100 11183 Andreas Goll +49 (0)711 810400 5561 Heiko Langer (Financials & Covered Bonds) +43 (0)5 0100 85509 Mathias Gindele +49 (0)711 810400 5562 Stephan Lingnau (Global Equities) +43 (0)5 0100 16574 Carmen Riefler-Kowarsch (Financials & Covered Bonds) +43 (0)5 0100 19632 Institutional Distribution CEE Rainer Singer (Euro, US) +43 (0)5 0100 17331 Head: Jaromir Malak +43 (0)5 0100 84254 Bernadett Povazsai-Römhild, CEFA (Corporate Bonds) +43 (0)5 0100 17203 Elena Statelov, CIIA (Corporate Bonds) +43 (0)5 0100 19641 Institutional Distribution PL and CIS Gerald Walek, CFA (Euro, CHF) +43 (0)5 0100 16360 Pawel Kielek +48 22 538 6223 Michal Jarmakowicz +43 50100 85611 CEE Equity Research Head: Henning Eßkuchen +43 (0)5 0100 19634 Institutional Distribution Slovakia Daniel Lion, CIIA (Technology, Ind. Goods&Services) +43 (0)5 0100 17420 Head: Sarlota Sipulova +421 2 4862 5619 Michael Marschallinger, CFA +43 (0)5 0100 17906 Monika Smelikova +421 2 4862 5629 Nora Nagy (Telecom) +43 (0)5 0100 17416 Christoph Schultes, MBA, CIIA (Real Estate) +43 (0)5 0100 11523 Institutional Distribution Czech Republic Thomas Unger, CFA (Banks, Insurance) +43 (0)5 0100 17344 Head: Ondrej Cech +420 2 2499 5577 Vladimira Urbankova, MBA (Pharma) +43 (0)5 0100 17343 Milan Bartos +420 2 2499 5562 Martina Valenta, MBA +43 (0)5 0100 11913 Barbara Suvadova +420 2 2499 5590

Croatia/Serbia Mladen Dodig (Head) +381 11 22 09178 Institutional Asset Management Czech Republic Anto Augustinovic +385 72 37 2833 Head: Petr Holecek +420 956 765 453 Magdalena Dolenec +385 72 37 1407 Martin Perina +420 956 765 106 Davor Spoljar, CFA +385 72 37 2825 Petr Valenta +420 956 765 140 David Petracek +420 956 765 809 Czech Republic Blanca Weinerova +420 956 765 317 Petr Bartek (Head) +420 956 765 227 Marek Dongres +420 956 765 218 Institutional Distribution Croatia Jan Safranek +420 956 765 218 Head: Antun Buric +385 (0)7237 2439

Hungary Zvonimir Tukač +385 (0)7237 1787 József Miró (Head) +361 235 5131 Natalija Zujic +385 (0)7237 1638 András Nagy +361 235 5132 Tamás Pletser, CFA +361 235 5135 Institutional Distribution Hungary Head: Peter Csizmadia +36 1 237 8211 Poland Gabor Balint +36 1 237 8205 Tomasz Duda (Head) +48 22 330 6253 Cezary Bernatek +48 22 538 6256 Institutional Distribution Romania and Bulgaria Konrad Grygo +48 22 330 6254 Head: Ciprian Mitu +43 (0)50100 85612 Michal Pilch +48 22 330 6255 Crisitan Adascalita +40 373 516 531 Emil Poplawski +48 22 330 6252 Marcin Gornik +48 22 330 6251 Group Institutional Equity Sales Romania Head: Brigitte Zeitlberger-Schmid +43 (0)50100 83123 Caius Rapanu +40 3735 10441 Werner Fürst +43 (0)50100 83121 Josef Kerekes +43 (0)50100 83125 Turkey Cormac Lyden +43 (0)50100 83120 Gizem Akkan +90 2129120445 Berke Gümüs +90 2129120445 Business Support Bettina Mahoric +43 (0)50100 86441

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