ANLAGESTIFTUNG STEINER INVESTMENT FOUNDATION · 2 14.02.2017 | Launch of Swiss Development Residential This document has been drawn up by Steiner Investment Foundation (hereinafter

STEINER INVESTMENT FOUNDATION

Launch of investment group

14.02.2017

ANLAGESTIFTUNG

2 14.02.2017 | Launch of Swiss Development Residential

This document has been drawn up by Steiner Investment Foundation (hereinafter “SIF”) carefully and in good faith. However, SIF

provides no guarantee with regard to its content and completeness and does not accept any liability for losses which arise from its

use. The opinions contained in this document are those of SIF at the time of editing, and may change at any time without notice

being given. Unless indicated to the contrary, all figures are unaudited. This document has been prepared solely for information

purposes and for the exclusive use of the recipient. It constitutes neither an offer nor a recommendation to subscribe to or

otherwise acquire claims vis-à-vis SIF, and does not release the recipient from exercising his/her own judgement. In particular, the

recipient is recommended, if necessary with the involvement of an adviser, to review the compatibility of the information with

his/her personal circumstances. The only determining factor for the subscription to claims is the valid prospectus together with the

Articles of Association and regulations of SIF. This document may not be reproduced either wholly or in part without the written

approval of SIF. It is intended solely for pension funds and other tax-exempt institutions domiciled in Switzerland established for

the purpose of providing occupational benefits or for entities that manage pension assets and are supervised by FINMA. Any

investment involves risks, particularly those relating to fluctuations in value and return. Historical performance information and

financial market scenarios are no guarantee of current or future performance. The performance information does not take into

account the commissions and costs levied upon issuance and redemption. No guarantee can be given that the performance of the

benchmark index will be matched or exceeded. The issuer of claims is SIF. The custodian bank is Notenstein Privatbank AG, St.

Gallen. The Articles of Association, regulations and investment guidelines, as well as the most up-to-date annual report and fact

sheets, may be obtained free of charge from SIF. The Total Expense Ratio (TERISA GAV) describes the totality of the

commissions and costs charged to the average gross assets on an ongoing basis (operating expenses). The value (ex ante) is

expressed as a percentage of gross assets and anticipates the average total costs that will apply over the coming twelve months,

other parameters remaining equal.


Established 1915

Head office in Zurich with branch offices in Basel, Bern,

Geneva, Lausanne, Lucerne, St. Gallen

In Swiss “Top 3”

Sales approx. CHF 800 million p.a.

Managed by real estate, financial, HR and legal specialists

Independent

Leader in real estate project development

Pioneer in TC (total, i.e. design-and-build, contracting)


Built since 1915:

1200 residential

buildings

540 commercial

buildings

45 hotels

150 infrastructure

buildings (hospitals,

universities, prisons,

etc.)

SkyKey

Sihlcity Prime Tower

PostParc Vulcano

Schönberg Ost


60%18%

17%

Wohnen

Büro

Gewerbe

Verkauf

Spezial

Total pipeline CHF 4 billion, including CHF 2.2 billion

in guaranteed development portfolio


Development and

construction services

provider

Management of

employee benefit

investment assets

Steiner Investment

Foundation (SIF)

Management of investment-

seeking funds of Swiss employee

benefit schemes with main focus

on real estate project development

Steiner AG

Bundling partnership model:

residential segment of Steiner

Real Estate Development plus

investments with SIF



Tasks/objective

Business management

Strategy development

Project investment decision-making

Portfolio controlling

Operational, legal and financial management of development

business with client representation

Development management

Financial control and optimisation

Legal aspects

Management in line with corporate governance rules

Administrative services

General administration

Balance sheet and accounting (book-keeping by Steiner AG)

Quarterly/annual statements

Budgeting

Liquidity planning and financing

Reports to Board of Trustees and investors

Financial management

Financing

Reporting

Taxes and legal affairs

Taxes (possible involvement of external consultants)

Legal (possible involvement of external consultants)

Development activities

Preliminary examination of project acquisitions

Establishment/expansion of project pipeline

Elaboration of a project business plan

Feasibility studies

Preliminary feasibility studies

Preparation of information for investment application

Preliminary market/location analyses

Project and product definition

Drafting/finalising of specifications

Securing of plot

Creating project organisation to ensure success of project

Selection of planning team

Guiding and coordinating all planning services

Permit/authorities management

Environmental management, income planning and income

management

First-time rental (possibly with external partners)

Sale

PR/communication/marketing

Cost management and controlling

Deadline management

Quality management

Risk management

Change management

SWISS INVESTMENT FOUNDATIONSTEINER AG


Responsibilities

SIFSTEINER/externals

Residential acquisition

portfolio of

Steiner AG

BT/DO

RED

RED

DO

DO

DO

DO

RED / W&P/KPMG DO

IC

DO

DO

BT: Board of Trustees

RED: Steiner Real Estate Development

DO: SIF Fund Management

Selected

projects

DO


Events

Due diligence Financing Option A: Sale

Option B: Operators

Land

procurement

Building

permit

Con-

struction

Operational

real estate

Site

appraisal

Start

Development

Project

entry

To

tal va

lue

/ris

k

Land

Capital level: Y

1. Project IRR

2. Capital requirement

3. Capital structure

4. Debt costs

Development*

Construction

costs

Land

Development

Land

Construction

costs

Development

LandLand

Development* Valuation gain Valuation gain

Rent

Valuation gain

Land

Development*

Scouting Initialization Development Realization Service

Real estate holding Option A: Sale

Real estate holding Option B: Operators

Steiner AG

Steiner Investment Foundation


Project selection and evaluation process: multistage selection and external expert reports

Project development risks are manageable because entry does not take place until permits

have been obtained or are likely to be granted

Clear and reliable cost structure plus bonus/penalty system

Diversification

Decision process

Clear segregation of competencies and functions in accordance with ICS using the “four-

eyes” principle


A new real estate investment group in the residential sector

Early entry into residential construction projects already at the development stage with reduced

risks

Uses: residential (min. 70%), commercial (max. 30%)

Investment restrictions (after build-up phase):

Ground lease plots (max. 30% of the investment group assets)

Customary joint ownership with no controlling influence (max. 30% of the investment group

assets)

Market value of an investment property must not exceed 15% of the investment group assets

Selected portfolio with 14 projects, of which over CHF 760 m in the rental segment,

6 projects in the launch portfolio already examined by the Investment Committee and given

positive ratings (use of funds for acquisition in Q1 and Q2 2017)

Locations in conurbations diversified across the whole of Switzerland

Planned start-up equity capital: CHF 200 million (commitments) in Q1 2017

Gearing ratio: max. 33%


Investment volume: Standard spectrum CHF 20-130 m per project (preference)

Market positioning: Based on a price spectrum for standard projects, this amounts to 70%

percentile rent per sq. m for rental properties and 80% percentile rent

per sq. m for owner-occupied apartments (according to Wüest &

Partner AG)

Development period:From project acquisition to handover: from 3 years (quick runners) or

5 years (standard project) to 7 years (rezoning, with income from

interim use)

Land: Purchase of plot, purchase of existing properties with development

potential, reservation of plots, land subject to ground lease

Ownership: Direct ownership; indirectly where 100% stake in the company

Usage types: Residential; commercial use also possible but preferably as part of

mixed residential/commercial projects with commercial use on ground

floor


Development fee payable upon receipt of building permit

Linked to actual project success – measured in terms of return on equity in the project period

In the first three years of business:

Management fee at project level linked to attainment of a minimum return on equity of 5.5%

p.a.

Steiner AG obliged to assume management costs of up to CHF 2.5 million

“Early bird” investors receive timely, appropriate remuneration for their higher-risk investment

compared with later investors

Outlook: Possibility of converting to a classic real estate investment group with lower risk

profile


When a real estate asset reaches a

completion level of 20%, the class may be

switched to a classical investment group by

a simple resolution of the Board of Trustees.

Completed real estate in a classical

investment group is not subject to

mandatory sale.

From this point in time, the

investment group can be

transformed* from a capital

growth to a distribution vehicle


Timing of transformation with 70% completion achieved in 2021

-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

2017 2018 2019 2020 2021

To

tal vo

lum

ein

CH

F m

Year

Volumes and segments

Condo

Rental

-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

2017 2018 2019 2020 2021

To

tal vo

lum

ein

CH

F m

Year

Project milestones and volumes

Completed

Construction

Development


* Forecast is no guarantee of events actually occurring

14 investment projects, total volume approx. CHF 990 million

SDR prioritySDR IRR

priority

1 1.0 - 1.3 Excellent 5.0 Excellent 7.0 - > %

2 1.4 - 1.7 Very good 4.5 Very good 6.5 - 6.9%

3 1.8 - 2.1 Good 4.0 Good 6.0 - 6.4%

4 2.2 - 2.5 Above av. 3.5 Above av. 5.5 - 5.9%

2.6 - 2.9 Average 3.0 Below av. 5.0 - 5.4%

3.0 - 3.3 Below av. 2.5 Mediocre 4.5 -4.9%

3.4 - 3.7 Mediocre 2.0 Poor

3.8 - 4.1 Poor 1.5 V. poor

4.2 - 4.5 V. poor 1.0 Extremely poor

4.6 - 5.0 Extremely poor

KantonAgglomeration

Pipeline

status

Approval

status

SDR

agglomeration

priority

WP municipality

rating rent

WP municipality

rating condo.

WP micro-

location profile

rent

WP micro-

location profile

condo.

Rental

volume CHF

m

Condo.

volume

Total

volume CHF

m Completion Total IRR

ZH Zürich Dev. IC PA 1 1.6 1.3 4.5 3.0 38.2 38.2 Apr 19 5.8%

BE Bern Pipeline DO PC 1 1.7 2.2 5.0 3.0 74.9 74.9 Mai 19 5.8%

BL Basel Pipeline IC PA 1 1.6 1.8 3.0 3.0 53.9 19.1 72.9 Okt 19 11.4%

SH Schaffhausen Dev. DO PC 2 2.0 1.8 3.5 3.5 35.5 30.0 65.6 Jun 20 4.7%

BE Bern Pipeline DO PC 1 1.2 1.5 4.0 4.0 55.3 55.3 Mrz 20 5.6%

ZH Zürich Dev. IC PA 1 1.4 4.0 100.1 100.1 Jun 20 5.5%

LU Luzern Pipeline DO PC 1 2.1 1.7 4.5 4.0 18.4 18.4 Sep 20 6.5%

VD Montreux Pipeline IC PA 2 2.3 2.0 4.0 3.5 29.5 40.5 69.9 Nov 20 12.3%

AG Aarau Dev. IC PA 2 2.6 2.0 3.5 3.0 55.9 37.5 93.4 Mrz 21 6.0%

SG St. Gallen Pipeline DO PC 1 1.7 1.5 3.0 3.5 28.8 28.8 Apr 21 7.1%

VD Lausanne Pipeline IC PA 1 1.7 2.2 3.5 3.0 50.3 24.5 74.8 Jan 22 7.0%

NE Neuenburg Pipeline DO PC 2 2.8 2.7 3.0 3.0 38.0 34.1 72.1 Jun 22 5.7%

ZH Zürich Pipeline DO PC 1 1.9 1.4 3.0 3.0 99.2 99.2 Jun 25 5.7%

SG St. Gallen Pipeline DO PC 1 1.9 1.9 3.0 3.0 123.4 5.7 129.1 Jun 25 5.9%

Geldgewichteter Projekt IRR (Projektportfolioebene) 7.3%

Max. STEWE Volumen bei Fertigstellung 229.6

Total Volumen (inkl. STEWE) 992.6

Verbleibendes Mietvolumen 763.1

WP micro-location profile rating

scaleWP municipality rating scale


Actual investment strategy in priority 1 and 2 conurbations Priority

1st priority

2nd priority

Zürich 138.1

Bern 130.2

Basel 53.9

Schaffhausen 35.5

Montreux 29.5

Aarau 53.7

St. Gallen 155.1

Neuenburg 38.0Luzern 18.4

Lausanne 50.3

Swiss Development Residential:

Agglomeration priority rental portfolio in CHF m


Very good overall rating of launch portfolio with the projects in the location matrix


Implementation of strategy by canton and with residential focus at 75%

74.9%

18.7%

4.2% 1.0% 1.2%

Area, by type of use

Residential

Office

Retail

Commercial

Special

AG; 9.4%

BE; 13.1%

BL; 7.3%

LU; 7.3%

NE; 1.9%

SG; 15.9%SH; 6.6%

VD; 14.6%

ZH; 23.9%

Market values on completionby canton


Computed financial model

* Computed performance forecast is no guarantee of events actually occurring

2017 2018 2019 2020 2021 2022

Key figures

Portfolio figures

Issuances BOY CHF 200.0m CHF 30.0m CHF 80.0m CHF 60.0m CHF 20.0m CHF 10.0m

Equity EOY CHF 203.9m CHF 264.1m CHF 368.6m CHF 441.4m CHF 489.1m CHF 593.2m

Mortgages CHF 15.9m CHF 114.8m CHF 153.7m CHF 171.2m CHF 183.1m CHF 120.8m

Deferred taxes CHF 9.1m CHF 21.8m CHF 26.2m CHF 24.2m CHF 26.6m CHF 31.9m

GAV EOY CHF 228.9m CHF 400.6m CHF 548.5m CHF 636.9m CHF 698.8m CHF 745.9m

Leverage (LTV) 6.96% 28.65% 28.02% 26.89% 26.20% 16.19%

SFA Net yield of net rental income on valuation 0.00% 0.00% 4.42% 3.90% 3.74% 3.25%

TER ISA GAV 0.29% 0.21% 0.19% 0.66% 0.69% 0.69%

Values per share

Share price CHF 101.95 CHF 115.09 CHF 123.29 CHF 126.98 CHF 134.60 CHF 159.96

Income return p.a. -2.83% -0.15% -0.68% 0.26% 2.07% 2.16%

Capital grwoth p.a. 4.37% 12.99% 7.71% 2.67% 3.92% 16.67%

Performance p.a. 1.54% 12.83% 7.03% 2.93% 5.99% 18.83%

Performance annualized since launch 1.54% 7.04% 7.04% 5.99% 5.99% 8.03%


Legal form: Investment foundation under Swiss law

Investment strategy: Development (residential)

Placement agent: Vescore AG, St. Gallen; Steiner AG, Zurich

Custodian bank: Notenstein La Roche Privatbank AG, St. Gallen

Auditors: Ernst & Young AG

Valuation experts: Wüest & Partner AG, KPMG AG

Property management: Privera AG

Appropriation of profits: Capital growth

Publication of NAV: Quarterly

Financial year: 1 Jan. – 31 Dec (1st financial year: 1 Oct 2016–31 Dec. 2017)

Issuing volume: max. CHF 200 m

Minimum subscription amount: CHF 100,000.00

Swiss sec. no./ISIN: 34401187/CH0344011876

Benchmark: KGAST real estate index

Issue price: CHF 100.00


Issuing commission 0.90%

Subscription period: 23.11.2016 - 28.2.2017, midnight

Allocation 1.3.2017

Notification of allocation: 1.3.2017

1. Payment date: 3.3.2017 (50%, max. CHF 100 m)

2. Payment date: 1.11.2017 (50% max. CHF 100 m)

Management fee: 0.35% (project phase)

0.40% (portfolio after project phase) p.a.

Transaction fee: max. 1.75%

Client representation fee: max. 1.25%

Target investment return from Devt: min. 5.50% (in the first three financial years)

Target investment return on portfolio: min. 3.50–4.50% (long-term)

Ordinary redemption period: During the five-year build-up phase, the minimum holding

period is three years. Thereafter a notice period of 18

months applies up to financial year-end.


1. Excellent annualised return/performance expectations (see p. 21)

2. The unique partnership model with Steiner AG and the resulting low development risks (compared with the competition) are

unique in the market:

Thus if the target return of at least 5.5% p.a. per project is not achieved within the development phase (first three financial

years), the management fee at project level no longer applies.

The development fee on receipt of planning permission and in the form of a bonus/penalty system is also variable and linked to

the return on equity.

In addition, a cost-ceiling model has been agreed, with partnership-based sharing of savings gains.

The result is a strong incentive system in which development and TC partners bring the projects to fruition.

This inherently entails an assumption of risks, on which the construction of the building and the attainment of the target return

are based.

3. Minimum holding period: Investors can take advantage of the possibility of switching their holdings; this option is provided for by

the regulatory provisions and with us it is also available in the first three financial years. As a result, claims can be reallocated

within the existing circle of sponsors. However, it is in the first three financial years that the growth in net asset value is most

interesting.

4. During the first three financial years, however, the founder (Steiner AG) is under an obligation to assume management costs,

which results in a lowering of the TER ISA GAV to a very low average of 0.23% p.a.

5. Marketing risks are addressed as follows: Rental income is in the 70% rents percentile and is calculated with reserves; for

owner-occupied properties, sales prices are in the 70% percentile (also calculated with reserves). The first project has already

achieved a pre-marketing status of 45% (plus 10% reserve)

6. Excellent portfolio valuation according to a rating from Wüest & Partner AG, with very good geographical diversification

7. Min. 70% residential component (currently 75% in terms of area)

8. Investment consultants have responded very positively to the investment group’s features

9. The investment foundation invites you to join the Board of Trustees

10.Once the real estate assets reach a completion level of 70%, a class switch (to a classical investment group) can be effected by

a simple resolution of the Board of Trustees. This then makes the investment group a distribution vehicle with no further sale

obligation.

TAKING THE LEAD TOGETHER

STEINER INVESTMENT FOUNDATION

RALF LABRENZ

CEO

T +41 58 445 21 20

M+41 79 711 07 53

[email protected]

www.steinerinvest.com

STEINER AG

JOSEF EISENMANN

Institutional Client Relationship Manager

T +41 58 445 22 60

M+41 79 817 07 41

[email protected]

26 Steiner Investment Foundation

ANNEX


Ajay Sirohi, Reto Niedermann, Urs Rüdin

(from left to right)

Ajay Sirohi, Chairman, joined Steiner Group in May 2011 as

CFO. He has a Masters Degree in Business Administration and

Intl. Business as well as a Bachelors in Mathematics. Long and

successful career as CFO at various multinationals.

Reto Niedermann, Deputy Chairman, brings over 20 years of

experience from the areas of business development, marketing

and sales, more than 14 of them spent in the finance and asset

management industry. As the holder of a federal SAWI marketing

manager's diploma, he has been a federally accredited examiner

since 2005.

Urs Rüdin, Member, at Vescore AG (Vontobel Group) since 2013

as deputy head of the Business Development Real Estate

department. Has many years of experience in direct and indirect

property investments and, as member of the real estate

investment committee, the advisory board and the Board of

Directors, he also works for a number of different real estate

bodies.


Michael Schiltknecht, Prof. Markus Schmidiger,

Dr. Christoph Zaborowski (from left to right)

Michael Schiltknecht, Chairman, joined Steiner AG in November 2007 as a

departmental manager in Property Development, taking over general

responsibility for this area in August 2010. Michael Schiltknecht obtained his

architectural degree from ETH Zurich in 1995. After six years as an architect

and subsequently studying business administration, he joined Credit Suisse

as client representative for major projects and subsequently worked for AXA

Winterthur as head of project development.

Dr. Christoph Zaborowski, MRICS, Member, studied economics at the

universities of Constance (Germany) and Kingston (UK) before obtaining his

doctorate from the University of Zurich. In 1999 he joined the leading real

estate consultancy Wüest & Partner. From 2003 to 2014 he was first partner

and then also member of this consultancy's Board of Directors with

responsibility among other things for benchmarking and the development of

an international valuation network. He owns REFL Invest AG and has the

following directorships: Credit Suisse Funds AG, BS2 AG, Deal Estate AG

and REFL Invest AG. He is also a member of the real estate committees of

various institutional investment bodies.

Prof. Markus Schmidiger, Member, studied at and obtained his doctorate

from the University of St. Gallen (HSG). For over ten years, he worked in the

areas of international strategy and organisational consulting. As of 1999 he

built up the Swiss organisation of the global real estate specialist Engel &

Völkers, of which he is still Chairman of the Board of Directors. For several

years he managed private real estate portfolios worth some 1 billion Swiss

francs. In 2005 the University of Lucerne engaged him to develop a centre of

expertise for real estate management. He teaches, advises and researches

in the area of Swiss and international real estate investment and

development.


Stephen Schüz, Ralf Labrenz, Hannes Leu

(from left to right)

Ralf Labrenz, Director (CEO), studied business administration in Leipzig,

obtaining a Diplom-Kaufmann FH degree in 2003. He had previously

completed an IHK commercial vocational training course in real estate and

residential business administration. He worked for Steiner AG as a Finance

Manager from 2013 to 2016 and has a 20-year track record plus

management networking experience in the real estate investment groups of

Swiss investment foundations and real estate funds. His career milestones

include positions at Realstone, UBS, Zurich Insurance Group and

HypoVereinsbank Group. Furthermore, he is a member of the Swiss

pension fund federation ASIP and the Society of Property Researchers

(GIF).

Hannes Leu, Vice Director (CFO), studied business administration at the

University of Zurich, obtaining a lic. oec .publ. degree in 2006. In 2010 he

also obtained an auditing qualification (Dipl. Wirtschaftsprüfer). He worked

for the Finance department of Steiner AG from 2009 to 2016, latterly as

head of Accounting and Reporting. Among other things, he was responsible

for the administration of the pension fund and executive pension provision

as well as for the Steiner AG foundation. He is also a member of the Swiss

Institute of Certified Accountants and Tax Consultants. In addition to his

professional duties, he is continuing to study for a doctorate at the University

of Vienna.

Stephen Schüz, Investment Coordinator, obtained a BSc in International

Management at the Zurich University of Applied Sciences and an MSc in

Political Economy from King’s College London. He has worked in the

Finance department of Steiner AG since 2014. Since 2016, he has also

been active as Investment Coordinator for the Steiner Investment

Foundation. In addition to his research activities, he performed controlling

activities for Zurich Investment Management Real Estate and acted as a

consultant for UPC Cablecom.

Documents

ANLAGESTIFTUNG STEINER INVESTMENT FOUNDATION · 2 14.02.2017 | Launch of Swiss Development Residential This document has been drawn up by Steiner Investment Foundation (hereinafter