RE IV Limited Bond Investor Report Q2 2020 www.wprei.com RE IV Limited, Interim Report Q2 2020 Table of contents Section A 03 Overview 04 About this report 05 Green Bond factsheet 06 Project factsheet 07 Letter from the CEO 09 Highlights of Q2 2020 11 Quarterly data dashboard Section B 12 Performance 13 Project status 24 Financial performance 25 - Highlights of financial performance 26 - Consolidated financial statements Investor relations contacts Karen Xu Fredrik Mandelholm Head of Investor Relations Head of Stockholm Office [email protected] [email protected] Financial Calendar Financial Year 2020 2020-05-29 Q1 2020 Bond Investor Report 2020-08-28 Q2 2020 Bond Investor Report 2020-11-30 Q3 2020 Bond Investor Report 2021-02-26 Year-end 2020 Bond Investor Report (Unaudited) 2021-03-31 Year-end 2020 Bond Investor Report (Audited) 2 RE IV Limited, Interim Report Q2 2020 Section A Overview Pages 03—10 3 A — Overview RE IV Limited, Interim Report Q2 2020 About this report Background Reporting Boundary Basis of Preparation The Quarterly Report has been prepared in The Quarterly Report pertains solely to RE IV The Consolidated Financial Statements are accordance with the terms and conditions Limited and no financial information regarding prepared in accordance with IFRS (IAS 34). governing the Green Bond issued by White Peak other affiliated entities is set out herein. However, during the third quarter of 2019. The reporting to facilitate the understanding of the Quarterly Caveat framework established by the Quarterly Report Report, certain non-financial information relating The Quarterly Report has not been reviewed by will enhance transparency, facilitate access to, inter alia, White Peak’s business platform the company’s auditor. to reliable information regarding White Peak’s which is not exclusively attributable to RE IV business operations and strengthen White Peak’s Limited has been included herein. communication with Green Bond investors. White Peak Real Estate II L.P. White Peak Real Estate III L.P. White Peak Real Estate IV L.P. RE IV Limited (Green Bond issuer) Project 1 Project 2 Project 3 Project 4 Project 5 Project 1 Project 2 Project 3 Project 4 Project 5 Eco City A-2 Eco City B Fushan Pian Ling Print House Shenbei Xiazhuang General non-financial information reporting boundary Financial information reporting boundary 4 A — Overview RERE IVIV Limited,Limited,Interim Interim Report Q2 2020 Green Bond factsheet Issuer RE IV Limited Volume SEK 600 million Total framework SEK 1 billion Tenure 3 years (Final Maturity Date at 5 July 2022) Coupon Fixed 9%, semi-annual payments Use of proceeds The proceeds will be used to finance investments and transaction costs in accordance with the Terms and Conditions governing the Green Bond. Maintenance — Loan to Value <55% covenants — Minimum Cash: at least equal to 12 months scheduled interest payments Listing At the end of Q2 2020, the Green Bond was traded on the Freiverkehr list at Deutsche Borse. On 14 May 2020, the listing of the Green Bond on the Nasdaq Stockholm Corporate Bond list was completed. Thereby, the listing requirement set out in the terms and conditions governing the Green Bond has been fulfilled. Hedging At the end of Q2 2020, RE IV Limited held RMB/SEK fx options of SEK 735 mil notional, at strike 1.3180. The notional amount is sufficient to cover both the future bond principal and coupon payments. The company intends to use this RMB/SEK fx options to hedge the foreign currency risk, should SEK appreciate beyond 1.3180 against RMB. Covenant compliance Requirement Q2 2020 certificate Loan to Value¹ <55% 5.2% Minimum RMB 597 mil³ Cash² SEK 54 mil (c. SEK 787 mil) ¹ Loan to Value means the ratio of Net Interest Bearing Debt to Gross Asset Value as per the latest independent third party valuation. ² Based on currency exchange rates as of June 30, 2020 ³ As of June 30, 2020, the Group had cash and bank balances in the amount of RMB 835 million, of which RMB 237 million was not counted towards cash and cash equivalents in the financial statements, since it can only be used for payment of construction costs when approval from related government authority is obtained. 5 A — Overview RE IV Limited, Interim Report Q2 2020 Project factsheet Current Investments 5% Equity Investment % by City 9% By the end of Q2 2020, RE IV Limited had made seven investments, Yantai located in five cities across three provinces, with a total population of over 15% 42% Shenyang 219 million. Chengde Qingdao The projects resulting from the first three investments made in Yantai in 29% Pingdu December 2018 launched sales in Q4 2019 and started to generate cash flows. The projects have estimated delivery dates ranging between 2021 and 2023. Equity Investment % by Project In early December 2019, RE IV Limited expanded its portfolio by 5% Shenbei Project, Shenyang 9% acquiring two land parcels in Chengde (Hebei Province) and Pingdu 29% Eco City (Site B), Yantai (Shandong Province), respectively. During Q1 2020, RE IV Limited continued its 10% Eco City (Site A-2), Yantai growth by acquiring land parcels in Shenyang (Liaoning Pian Ling Project, Chengde Province) and Qingdao (Shandong Province), respectively, thereby 15% Fushan Project, Yantai 18% increasing the geographic diversification of the company’s investments. 14% Xiazhuang Project, Qingdao Print House Project, Pingdu Year of Equity Property Year of project invested Estimated Project name type acquisition completion (RMB million) total GFA m² Status Eco City (Site A-2), Acquisition Yantai Mixed use 2018 2022 340 94,490² completed Eco City (Site B), Acquisition Yantai Mixed use 2018 2023 446 125,472² completed Fushan Project, Acquisition Yantai Residential 2018 2022 259 245,832² completed Pian Ling Project, Acquisition Chengde Residential 2019 2023 359¹ 180,321² completed Print House Project, Acquisition Pingdu Residential 2019 2022 117 44,434² completed Shenbei Project, Acquisition Shenyang Residential/ Retail 2020 2024 722 283,106² completed Xiazhuang Project, Won the Qingdao Residential 2020 2023 210 47,133² land auction Total 2,453 1,020,788² 1 The equity deployed includes equity contributions in the form of subordinated shareholder loans from RE IV Limited’s parent company White Peak Real Estate IV L.P. (indirectly through White Peak Real Estate IV L.P.'s wholly owned subsidiary White Peak Holdings IV Limited) and RMB 200 million from recycled onshore funds. 2 The building areas may change due to changes in project positioning. Eco City Eco City Fushan Pian Ling Print House Shenbei Xiazhuang In RMB Total (Site A-2) (Site B) Project Project Project Project Project CBRE Valuation³ 3,990,000,000 633,000,000 690,000,000 750,000,000 634,000,000 142,000,000 953,000,000 188,000,000 Book value of properties⁴ 3,494,812,624 492,183,493 500,362,127 699,511,689 618,670,685 141,362,952 854,825,263 187,896,415 Revaluation gain 495,187,376 140,816,507 189,637,873 50,488,311 15,329,315 637,048 98,174,737 103,585 3 The latest CBRE Valuation was carried out as per 30 June 2020. 4 The book value pertains to properties under development for sale in the balance sheet as per 30 June 2020. 6 A — Overview RE IV Limited,Interim Report Q2 2020 Letter from the CEO China was the first country to be affected by the outbreak of COVID-19 and has also proven to be the first country to begin to recover from the negative economic effects that the pandemic has given rise to. In Q2, China’s GDP growth turned positive at 3.2% year-on-year, with key economic indicators – including total retail sales, investments and PMI – all significantly improved from Q1, demonstrating the country’s resilience compared to its international peers. In June, the IMF estimated that China would be the only major economy to achieve positive growth in 2020. Following months of strict and swift control measures being applied nationwide, China took action to ensure that its economy and society could reopen in an efficient manner as soon as the situation allowed it. As of the date of this investor report, the government has taken various measures to incentivize the broad scale resumption of industry production while simultaneously maintaining regular prevention and control measures, an equilibrium that is expected to be the new norm over an extended period of time. The various private sectors across the country have made extensive efforts, of both traditional and innovative nature, in order to ensure survival and to thrive again. As a result of this resilience and the fundamental dynamics of the Chinese economy, China is gradually rising from the financial slump caused by the COVID-19 outbreak. We expect the economy to continue to improve since domestic consumption and investments are leading the growth. In the real estate sector, market indicators such as price and volume growth have improved from the bottom in February, implying a continuous recovery in the sector. As of the end of Q2, price growth year-to-date had returned to pre-COVID levels. In addition, the monthly data shows that price growth has been positive since March. Sales volumes have developed on a similar trajectory as consumer confidence is bouncing back. Overall, White Peak’s project locations in Northern and Eastern China have been less affected by the COVID-19 outbreak than the Central and Southern parts of China. However, the new clusters of COVID-19 cases that occurred in Beijing, Liaoning and Xinjiang in the recent months have created some challenges. As already noted, regular control and prevention measures will remain the new norm over the foreseeable future.