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Brookfield Property Partners L.P.
Investor Meeting
September 29, 2016
2
Our Business 3 Brian Kingston, Senior Managing Partner, Chief Executive Officer
Core Office 17 Ric Clark, Senior Managing Partner, Chairman
Urban Multifamily 35 Lowell Baron, Managing Partner, Head of Multifamily
Retail Business 47 Ashley Lawrence, Senior Vice President, Asset Management – Retail
Opportunistic Investment Strategy 64 Brian Kingston, Senior Managing Partner, Chief Executive Officer
Financial Update 75 Bryan Davis, Managing Partner, Chief Financial Officer
Wrap-up / Q&A 89 Brian Kingston, Senior Managing Partner, Chief Executive Officer
Table of Contents
Our Business – Brian Kingston
3
Brookfield Property Partners is Brookfield’s primary vehicle to
make investments across all strategies in real estate
4
Brookfield Property Partners L.P. (BPY)
Opportunistic
Value-Add
Core
Core-Plus
Through Participation in
Brookfield Private Funds Direct
Our goal is to be the leading global owner & operator
of high-quality real estate, generating an attractive total return
for our unitholders comprised of:
5
Current yield backed by stable cash flow from a diversified portfolio
of assets
5-8% annual distribution growth
Capital appreciation of our asset base
Opportunistic Core Office & Retail
• Currently 80% of BPY’s balance sheet
• Investing in high-quality, trophy assets
• Provides stable cash flow with growth and capital appreciation
• 20% of BPY’s balance sheet
• Investing in mispriced portfolios, properties with significant value-add
• Provides capital appreciation
10% to 12% Total Returns 20% Total Returns
Stable, predictable cash flows from our
Core Office and Retail units are enhanced by our
higher-yielding Opportunistic strategies
6
Proven approach to investing
• We are value-oriented, counter-cyclical investors
• We specialize in executing multi-faceted transactions that allow us to
acquire high-quality assets at a discount to replacement cost
• We leverage our business units to enhance the value of our investments
• We have the flexibility to allocate capital to the sectors and geographies with the best risk-adjusted returns
• We continually recycle capital from stabilized assets to higher-yielding
assets in order to build long-term value for unitholders
7
Brookfield Property Partners has undergone significant, transformative growth
in the three years since spin-out
8
Progress since spin-out…
• Completed $5 billion acquisition of Brookfield Office Properties and
reduced balance sheet concentration in public securities from 80% to 30%
• Invested $1 billion in General Growth Properties to increase interest to 34%1
• Invested $1.8 billion alongside our joint venture partner to privatize
Canary Wharf and increase our interest to 50%
• Issued $6 billion of perpetual equity
• Recycled $5 billion of capital out of mature office and retail assets
• Invested $3 billion in new Brookfield-sponsored funds
9
1) Represents BPY’s fully diluted interest in GGP
10
Through organic growth in existing markets…
2013
Canada
$8B
United States
$70B
UK & Europe
$4B
Australia
$9B
Brazil
$4B
11
…and expansion into new markets we have grown
AUM to over $146 Billion1
Today
Canada
$7B
United States
$105B
UK & Europe
$23B
Brazil
$3B
Australia
$7B Middle East - $0.1B
India - $1.2B
China - $0.5B
1) Figure represents AUM of Brookfield Property Group. BPY’s proportionate total assets have grown to approximately $66 billion
2013 TODAY
PRIMARY Traditional real estate sectors that
have deep public and private
institutional capital markets
Core Office
Core Retail Multifamily
Core Office
Core Retail Multifamily Logistics
ESTABLISHED Alternative real estate sectors that
have deep public and private capital
markets
Suburban Office
Alternate Retail
Suburban Office
Alternate Retail Hotels
Net Leases
NON-TRADITIONAL Some public market presence and
analyst coverage but highly
fragmented and largely privately held
Self-Storage
Manufactured Housing
Student Housing
We have also expanded into a number of new asset classes…
12
• 149 premier office properties totaling 101 million square feet (“msf”) in
gateway markets around the world
• 10 msf of office and multifamily development projects currently underway
• Interest in 128 best-in-class retail properties totaling 125 msf throughout the
United States
• High-quality assets with operational upside including:
• 35,000 multifamily units in the United States
• 54 msf of industrial in modern logistics properties in North America and Europe
• 18,400 hotel rooms throughout the United States, Europe and Australia
• Over 300 triple net lease properties throughout the United States
• Over 150 self-storage assets in the United States
• 13 student housing properties in the United Kingdom
…and built a diversified portfolio of premier properties
13
...Which has led to significant growth of business
31 Total Assets ($ billions) 66
Total Equity ($ billions)
Company FFO ($ millions)
13
570
22
950+
TODAY 2013
Distribution per Unit ($)
Value per Unit ($)
113%
69%
67%
25
1.00 12%
20% 30
1.12
14
Continue to be focused on key objectives
Enhance the flexibility of our balance sheet
In 2016:
• Refinanced corporate credit facility, upsizing capacity from $2.0 to $2.5 billion, reducing
interest costs by 55bps and extending maturity to 2019
• BBB credit rating from S&P
• Issued C$200 million of perpetual preferred shares, using proceeds to repay on-demand capital securities
Recycle capital
• $1.5 billion of net equity year to date; on target for $2.0 billion in 2016
• Proceeds redeployed:
• Repayment of BPO acquisition facility
• Private fund capital calls
• Development funding
• Repurchase of units
15
Stabilize occupancy in Core Office and Retail portfolios
• Flat occupancy in existing office portfolio at 92%
• Development pre-leasing increased at One Manhattan West, Principal Place and
Brookfield Place Calgary
• Stable occupancy in Core Retail portfolio at 95%
Share price to reflect value of business
• Active investor relations program
• Index inclusion
• Buying back units
Continue to be focused on key objectives
16
Core Office – Ric Clark
17
Brookfield’s Core Office business features an
iconic, irreplaceable portfolio
of the world’s most sought-after
commercial properties
18
Iconic Properties
Premier locations, high-quality properties
in the most dynamic, resilient cities around the globe
Brookfield Place, New York City Canary Wharf, London
Potsdamer Platz, Berlin
Brookfield Place, Toronto
Darling Park, Sydney
Brookfield Place, Perth
19
Comprehensive Capabilities
20
We offer a full suite of real estate services for our tenants, assuring them
of best-in-class quality and service throughout the lifecycle of our properties
“…Of our top 20 office
tenants, 75% are in Brookfield buildings in more than one city and
50% are in buildings in more than three cities,
which speaks to the consistency and quality
of our properties.”
Scale of Operations
21
We have $15 billion of capital invested in Core Office
149 PROPERTIES
92% OCCUPANCY
101msf PORTFOLIO SIZE
8.3yrs AVERAGE
LEASE TERM
18 CITIES
1,600 EMPLOYEES
6 COUNTRIES
9msf AVERAGE ANNUAL
LEASING VOLUME
50%
18%
16%
14%
$ 500
$ 1,000
$ 1,500
$ 2,000
2013 2014 2015 2016
NET OPERATING INCOME (US$ in millions)
Stable Income
22
Long average lease life, market diversification and
high-quality tenants produce very stable income
U.S.
UK
Australia
Canada
Other
1
1) Forecast to reflect incremental NOI at Brookfield Place New York
0%
2%
4%
6%
8%
10%
12%
14%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
SAME PROPERTY NOI GROWTH (in natural currency)
Organic Growth
23
Significant income growth driven by recently signed leases at
Brookfield Place New York and increasing occupancy
We have been taking advantage of
strong pricing and demand
for stabilized office assets in select core markets
to extract equity capital and reinvest in higher yielding opportunities
24
Property City
Interest
Sold Net Proceeds
(US$ Millions)
Cap
Rate
World Square Retail Sydney 100% $ 200 4.2%
Royal Centre Vancouver 100% 220 3.3%
Principal Place London 50% 360 4.0%
Two Ballston Plaza Greater Washington, DC 100% 60 5.6%
Potsdamer Platz Berlin 25% 170 3.4%
One New York Plaza New York City 33% 550 4.6%
King Street Wharf Sydney 100% 30 4.9%
One Shelley Street Sydney 100% 250 5.1%
Total $ 1,840 4.2%
Asset Sales
25
On track to achieve goal of raising $2 billion of equity
from asset sales in 2016
Case Study
26
Acquisition of Potsdamer Platz, Berlin’s premier mixed-use
property estate
COMPETITIVE
ADVANTAGE
• Capitalizing on Brookfield’s unique capability to underwrite, acquire
and asset manage a large-scale mixed-use trophy estate that spans
office, retail, multifamily, hospitality, leisure and gaming
• Motivated seller divested asset as part of mandatory liquidation of a
maturing closed-end fund and required transaction assurance of a
well-capitalized buyer with strong lending and JV equity
relationships
STRONG
MARKET FUNDAMENTALS
• Market vacancy at 10-year low in 2016
• Rental growth in Berlin has consistently outpaced other major
German cities
• Demand driven by growing technology, media and
telecommunications (TMT) sector tenants particularly strong with
40% of total leases executed
VALUE
ENHANCEMENT MEASURES
• Brookfield expertise in lease-ups of significant vacancy – increased
office occupancy from 53% to 75% in first 9 months of control
• 85 residential units had been held vacant by previous owner in
condo conversion exercise; Brookfield’s plan is to aggressively re-
lease as rentals to tap into existing apartment demand on the estate
Development Strategy
• Earn premium risk-adjusted returns
compared to acquisitions
• Upgrade our portfolio with new, trophy assets
in strategic markets
• Mitigate risk by typically securing:
– Anchor leases for 40-50% prior to launch
– Maximum price construction contracts
– Construction financing with term extensions
– JV equity partners once project is substantially
de-risked
– Limit development capital to <10% of total assets
• Focus on prominent, large-scale projects in
high-growth markets
27
Development Activity
7.3msf UNDER DEVELOPMENT
7% AVERAGE YIELD-ON-COST
$300M INCREMENTAL NOI
56% PRE-LEASED
28
Active Development Projects
Building best-in-class regional headquarters premises for a
diversified high-credit-quality tenant roster
Project City Sq. Ft. (000’s)
Pre-
Leased
Date of
Completion Cost1
(US$ millions) Yield
Principal Place London 621 84% Q4 2016 $ 510 8%
L’Oreal Brazil HQ Rio de Janeiro 197 100% Q1 2017 40 12%
London Wall Place London 505 73% Q2 2017 270 7%
Brookfield Place East Calgary 1,400 81% Q3 2017 620 7%
655 New York Avenue Washington, DC 766 70% Q3 2018 290 7%
100 Bishopsgate London 938 38% Q4 2018 1,140 7%
1 Bank Street London 715 40% Q2 2019 330 7%
One Manhattan West New York 2,117 30% Q4 2019 1,060 6%
Total 7,259 56% $ 4,260 7%
29
1) At BPY’s proportionate share
$ 0
$ 100
$ 200
$ 300
2017 2018 2019 2020 2021
Brazil UK Canada U.S.
Development Income
At current capitalization rates this income stream is
worth ~$7 billion
(US$ in millions)
30
Next Phase of Developments
Project City Sq. Ft. (000’s)
Manhattan West New York 2,296
ICD Brookfield Place Dubai 1,079
10 Bank Street London 857
Shell Centre London 317
North Quay London 2,400
One Park Place London 680
Wood Wharf – Phase 1 London 338
Bay Adelaide Centre North Toronto 825
Total 8,792
Over 8 million square foot pipeline will fuel growth post-2021
31
Insulated from ‘Brexit Effect’…
32
• 98% leased to high-credit-quality tenant roster
• Average remaining lease term of 12 years
• Current developments 55% pre-leased ahead of delivery in
2017-19 timeframe
• Completed £515 million construction facility on 100 Bishopsgate
following Brexit outcome
• Only 5% of total BPY equity exposed to British pound
We maintain our view that the UK will remain a
very important center of commerce in the world, and that an
acceptable deal with the EU will be negotiated
….and Energy Market Downturn
33
• 91% leased to high-credit-quality tenant roster
• Average remaining lease-term of 7.4 years
• Manageable lease expiry through year-end 2019
• Current development 81% pre-leased
• Executed 1.2 msf of leases in the last 18 months
• Only 6% of total BPY’s total assets exposed to these markets
Energy markets1 are seeing increasing demand from tenants
seeking “flight to quality” opportunities which align
with Brookfield’s portfolio attributes
1) Data on this slide attributable to BPY’s Core Office business in Houston, Calgary and Perth
Brookfield has built its real estate business
by capitalizing on
distressed assets and businesses
in capital-deprived markets and will continue to monitor the current investment
landscape for such opportunities
34
Urban Multifamily – Lowell Baron
35
Brookfield is building a core investment platform of
premier Urban Multifamily rental assets
36
Creating a long-term, best-in-class urban multifamily business complementary
and with similar characteristics to Brookfield’s established, highly regarded global
office portfolio
Initial strategy includes a build-to-core model, leveraging urban infill parcels owned
within the office business as well as newly sourced transactions
Acquiring single assets or portfolios will become a major avenue of growth for the
right opportunities and at the right time
Brookfield’s History of Multifamily Investment
37
Recapitalizes
Fairfield
2010/11 2012 2013 2014 2015
Acquires 4,900 unit
portfolio for $500 million
Acquires 4,275 unit
portfolio for $290 million
Acquires 3,962 unit
portfolio in Manhattan for
$1 billion
Privatizes AEC for
$2.5 billion - 14,200 unit
portfolio
Properties 4 23 70 90 150
Units 1,270 6,680 19,010 26,700 42,060
GAV (US millions) $140 $715 $1,980 $4,030 $7,400
Commits $300
million to second Value-Add fund
Commits $50
million to first Value-Add fund
Construction
begins on Manhattan West
residential tower
(879 units)
Acquires four
development projects in US
representing
2,350 units
Scale of Operations1
38
129 PROPERTIES
94% OCCUPANCY
~1,600 EMPLOYEES
Seattle
Sacramento San Francisco
San Jose
Los Angeles
Inland Empire
Denver
Dallas Metro
San Antonio
Houston
Miami / Ft. Lauderdale
/ West Palm Beach
Atlanta
Washington, DC
Metro
New York City
Boston Metro
Las Vegas
Phoenix
Detroit Cleveland/
Columbus
Indianapolis
Charlotte
1) Only includes U.S. assets
Raleigh/Durham
Tampa
Charlottesville
Virginia Beach
~38,000 UNITS
Why Urban Multifamily?
39
Sources: McKinsey & Company, MIT and Edward Glaeser (Harvard Economics Professor)
Urbanization • 50% of the world’s population lives in cities; figure expected to rise
to 75% by 2050
Global
Growth • Cities generate 80% of today’s total GDP; figure expected to rise
to 90% by 2050
Concentrated
Wealth • More urbanized countries have incomes on average 5x those of
less urbanized countries
Social
Connectivity
• People of all ages choose urban living for: (1) Social possibilities
and networking; (2) Attractions, entertainment, shopping and restaurants; (3) Public transit and walkability; (4) Access to medical care and services for seniors
Cities are places of collaboration, innovation and opportunity -
The urbanization trend exists because cities make
people smarter, healthier and happier
Historical Returns
40
Multifamily has been one of the top performing asset types
over the long term with a favorable risk-to-return profile
Source: NAREIT (data through 2015)
Sector Compounded Annual Returns Since 1994 Returns/Risk (Sharpe Ratio) Since 1994
U.S. Multifamily Rent Growth
41
Expected rent growth of 3.7% in 2016 with select markets
experiencing double-digit increases
Source: Axiometrics
Apartment Rent Growth
U.S. Multifamily Occupancy Rates
42
Historically strong and stable occupancy rates
Apartment Occupancy Rates
Source: Axiometrics
U.S. Homeownership Rate
43
Declining homeownership creating incremental demand
for apartments
Sources: U.S. Census Bureau, Green Street Advisors
U.S. Homeownership Rate
69.0% 68.9% 68.8% 68.2%
67.8% 67.4%
66.9% 66.2%
65.5% 65.1% 64.5%
63.8%
63.0% 62.8% 62.3% 62.5% 62.7%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Long Term Average –
64%
Target Markets
44
• “Coastal core” markets of New York City, Boston, Washington DC, Los Angeles,
San Francisco and Seattle
• Also targeting markets that offer a great lifestyle, affordable cost of living, are business
friendly and have a diversified economy
Seattle
Portland
San Francisco
San Jose
Los Angeles
San Diego
Denver
Dallas
Austin
Houston Miami
Atlanta
Washington, DC
New York City
Boston
Active Development Projects
45
Project City # of Units
Date of
Completion Cost1
(US$ millions) Yield
For Rent
Three Manhattan West Manhattan 473 Q1 2018 $ 414 5%
Greenpoint Landing - G Brooklyn 341 Q1 2019 273 6%
Camarillo Ventura County 446 Q3 2019 128 7%
Newfoundland London 636 Q4 2019 322 4%
For Sale
Principal Place London 329 Q1 2019 249 N/A
Shell Centre London 597 Q3 2019 219 N/A
Total 2,822 $ 1,605 5%
Active development pipeline with value
in excess of $2 billion
1) At BPY’s proportionate share
Future Development Projects
46
… and value in excess of $1 billion
from our future development pipeline
Project City # of Units
Date of
Completion Cost1
(US$ millions) Yield
For Rent
Wood Wharf Phase I London 677 Q4 2019 $ 245 5%
Greenpoint Landing - F Brooklyn 400 Q3 2020 364 6%
1810 Main Houston 286 Q2 2019 81 7%
Westcreek Houston 409 Q4 2020 166 7%
Dallas Hi-Line Dallas 426 Q4 2020 164 7%
Studio Plaza Silver Spring 343 Q1 2019 106 7%
Total 2,541 $1,126 6%
1) At BPY’s proportionate share
Retail Business – Ashley Lawrence
47
The premier quality assets and operations
in our Core Retail business
mirrors that of the Core Office portfolio
These class A malls are
long-term investments that provide stable cash flow
48
Through our 34% fully diluted interest in
General Growth Properties (“GGP”)
we are invested in
100 of the top 500 malls in the United States
49
Scale of Operations
50
We have $9 billion of capital invested in Core Retail
128 PROPERTIES
95% OCCUPANCY
125msf PORTFOLIO SIZE
$583psf AVG. TENANT SALES
Although there is much publicity about the decline
of brick-and-mortar shopping in the face of
increased online retail,
the statistics do not support this
51
Regional Mall Visitation by Generation
52
Sources: GGP Strategy & Analytics, Nielsen Local, 2014-2015. 400,489 respondents
For one, millennials are shopping in malls
more than any other living generation
50
100
150
Millenials (18-34) Gen Xers (35-49) Baby Boomers (50-65) Silents (Over 65)
PROPENSITY TO SHOP AT LEAST ONCE EVERY 3 MONTHS (100 = Average Shopper)
Same-Property Occupancy
53
…and our mall occupancy has stayed consistently
in the 95% range for several years
Source: GGP
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
SAME-PROPERTY OCCUPANCY
Tenant Sales
54
At the same time our tenants’ sales continue to increase…
$ 500
$ 525
$ 550
$ 575
$ 600
2012 2013 2014 2015
TENANT SALES/PSF (<10 SF)
Source: GGP
Core Retail Mall Sales and NOI Percentage by Rank
55
Source: GGP
1) Percentage of GGP’s reported Company NOI
Top Properties 2016 Sales/psf % of NOI1
Top 10 $792 23%
Top 30 $727 48%
Top 50 $677 67%
Top 100 $598 96%
Total $583 100%
Redeveloping Obsolete Big-Box Stores
56
Since 2011, GGP has redeveloped 82 vacant department stores
for a total cost of $1.4 billion, generating an 11% annual return
“The decline of certain big-box
retailers has unlocked the
opportunity to convert these
spaces into more productive
uses, including full-service
restaurants, chef-driven food
halls, high-end grocers, fitness
centers and movie theaters.”
Core Retail – 2016 Asset Sales
57
1) At BPY’s fully-diluted interest
Property City
Interest
Sold Net Proceeds
(US$ Millions)1
Fashion Show Las Vegas, NV 50% $ 282
Eastridge Mall San Jose, CA 100% 74
Pioneer Place (office) Portland, OR 100% 40
One Stockton San Francisco, CA 49.8% 11
522 Fifth Avenue New York, NY 10% 6
Owings Mills Mall Owings Mills, MD 50% 4
Newgate Mall Salt Lake City, UT 100% 3
Total $ 420
Similar to Core Office, we have been raising equity capital by
selling interests in premier quality U.S. malls
at near or peak valuations (~4% cap rates)…
Core Retail – Development Sites
58
1) At BPY’s proportionate cost
Project City Description
Stabilized
Year Cost1
(US$ millions) Return
Ala Moana Center Honolulu Anchor Repositioning 2018 $ 15 9-10%
Staten Island Mall New York Expansion 2019 60 8-9%
Other Various Redevelopment 2017-18 70 6-8%
Under construction $ 145 7-9%
The SoNo Collection Norwalk Ground-up development 2020 80 8-10%
Other Various Redevelopment TBD 75 8-9%
Total under construction and in planning $ 300 8-9%
…and reinvesting proceeds into higher-yielding development
and redevelopment initiatives
We made an incremental investment in the
class B mall sector through the
recent privatization of Rouse Properties…
Not all B malls are created equal!
59
Rouse Properties
60
35 PROPERTIES
91% IN-LINE OCCUPANCY
24msf PORTFOLIO SIZE
$2.9billion GROSS ASSET VALUE
Rouse Properties – Mall Portfolio
61
In many instances these malls represent the ‘only game in town’ –
limited competition and appealing demographics
We have identified $200 million of non-strategic
assets in lower-tier markets for disposition
in the near-term
And expect to recycle this capital into new
acquisitions and redevelopment of existing assets
62
Rouse Properties – Value Creation and Growth
63
• We have 17 redevelopment projects requiring $155 million to complete at expected
returns of 9-11%
• We are targeting acquisitions in retail locations along the coasts and in select markets
with high population densities and significant value creation opportunities
Shoppes at Carlsbad Redevelopment
Completion Q2 2018
Opportunistic Investments – Brian Kingston
64
Brookfield Property Partners participates in
Opportunistic real estate strategies to
diversify the investment portfolio
and bolster returns
65
The assets acquired in this strategy are of high-quality,
but have operational upside through
efficiencies and synergies
with Brookfield’s global operating footprint
66
Investment Approach
67
• Sectors or markets that are out-of-favor
and where capital is scarce
• Distressed assets, activist investors /
public-to-private, socioeconomic
headwinds
• Fragmented industries with outsized
returns
• Avoid auctions
• Identify operational improvements and
synergies
Counter-
Cyclical /
Contrarian
Investments
Multi-faceted /
Structured
Transactions
Proprietary
Investments
Case Study
68
Acquisition of Simply Self Storage, the largest privately held
self-storage owner/operator in the U.S. and 7th largest overall
Farmington Hills,
Michigan
Grand Rapids
Michigan
Brighton,
Massachusetts
TRANSACTION
MERITS
• Transaction sourced through Brookfield relationship with
previous owners/operator
• Forward cap rate of 6.6% represents a significant discount to recent portfolio transactions in the sector
• Sector is attractive due to limited new supply and growing demand
GROWTH
OPPORTUNITY
• Lack of available capital by previous owners provides
opportunity to redevelop and add density to existing asset base
• Acquire individual, small/medium portfolios in secondary
markets where public REITs are not active
• Develop new assets in primary and secondary markets
EXPERIENCED
MANAGEMENT
• Existing management team was retained and expanded
• CEO is a 20 year veteran of the storage sector and is the operating member of a joint venture with Brookfield
Grand Rapids,
Michigan
Case Study
69
Acquisition of a portfolio of seven high-quality assets located in
prime regions of São Paulo and Rio de Janeiro
CONTRARIAN
THESIS
• Flight of capital / lack of competition in region due to geo-
political instability and uncertain near-term economic landscape
• Off-market opportunity sourced through long-standing relationships with both portfolio owner and owner’s majority
shareholder
• Successful history of investing in market with strong underlying
economic indicators in medium- to long-term
HIGH-QUALITY
ASSETS
• Acquisition, at ~40% discount to replacement cost, of newly
delivered, high-quality assets
• Portfolio of primarily AAA assets in prime regions of São Paulo and Rio de Janeiro
STABILITY +
GROWTH
• Long-term leases in place with inflation-protected income
streams to investment-grade multinational tenants
• Vacancy concentrated in 2 of the 7 properties
• Ability to fill vacancy by offering competitive rents due to low
investment basis
Alfa Laval
São Paulo
Cidade Jardim
São Paulo
JK Complex – Towers D & E
São Paulo
BPY Fund Commitments
70
Fund Strategy/Sector(s) Year(s) Size
($US Millions)
BPY
(%)
Target
Return1 BPY’s Equity2
($US Millions)
BSREP II Opportunistic/
Diversified 2015 $ 9,000 26 20%+ $ 1,350
BSREP I Opportunistic/
Diversified 2012 4,350 31 20%+ 1,850
VAMF Series Value-Add/
Multifamily 2011-15 1,900 34 14-16% 300
BREF Series Debt/
Diversified 2004-14 3,125 27 12-13% 200
Other direct 500
Total $ 4,200
1) Targeted gross internal rate of return (“IRR”) – There can be no assurance that the funds will achieve returns within the targeted range or within a comparable range or will be able to avoid losses
2) Represents BPY’s invested equity to-date
…We now have $4 billion of capital invested in
Opportunistic strategies
71
…Which has given us exposure to new sectors and
new geographies with our capital invested alongside partners
…A sizeable pipeline of investments will continue to broaden
our sector and geographic exposure
72
NEW SECTORS
• In binding agreement to purchase second largest privately held
manufactured housing portfolio in North America
• Highly-fragmented, recession-resistant sector has achieved positive
same-store NOI growth every quarter for last 20 years
NEW MARKETS
• In advanced negotiations to acquire the premier, mixed-use 5.4msf
International Financial Center complex in Seoul, South Korea
• Tenant roster of large, multinational corporations – many ‘repeat
customers’ in Brookfield’s global portfolio
• Discount to replacement cost with upside from active lease-up
strategy and repositioning of retail and hotel offerings
PLATFORM
EXPANSION
• Building on 2014 acquisition of Candor Office Park portfolio in Delhi,
India, in advanced negotiations to acquire a 4.2msf portfolio of
prime office and retail properties in Mumbai
• Portfolio located in Powai submarket – the ‘Silicon Valley’ of India –
high-quality infrastructure and location
• Acquisition basis at discount to replacement cost with upside from
platform integration and repositioning to ‘Live-Work-Play’ community
While our investment in Opportunistic strategies
will continue to grow, we intend to limit it to
25% of our balance sheet
73
Self-“Fund”ing
74
BPY’s Opportunistic investment strategy will be largely
self-funding as we begin to harvest capital from legacy funds
2017 2018 2019 2020
$1
$ 2
$ 3
$ 4
CUMULATIVE RETURN OF CAPITAL ($ billions)
BSREP II
Other
BSREP I
Financial Update – Bryan Davis
75
1. Positioning our Balance Sheet
2. Stable and growing cash flows
76
Multifamily Office
Retail
Multifamily
Office
Retail
Multifamily
Accomplished our Initial Objectives
77
Launched BPY
Used BPY equity to acquire Brookfield Office Properties and
converted our passive investment in Canary Wharf into a control
position
Raised capital through sales of interests in mature assets and
developments to fund our capital commitments to:
1) Active developments
2) Funds
3) Repayment of corporate debt
Continued to raise capital from high demand assets and markets
to redeploy into higher yielding opportunities
2014
2013
2015
2016
Re-shaped our Balance Sheet…
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1) Reflects mandatorily convertible preferred shares as equity ($1.8 billion, 70 million units)
2) Diluted IFRS value per unit
(US$ millions, except per unit amount) 2013 BPO &
Canary
Allocation
of Capital Organic
Growth Today
Assets
Office $ 6,200 $ 6,700 $ (6,000) $ 4,900 $ 11,800
Development 1,000 2,500 3,500
Retail 7,600 1,300 8,900
Opportunistic 1,200 2,000 1,000 4,200
16,000 6,700 (1,500) 7,200 28,400
Corporate debt 500 1,500 (1,500) 1,600 2,100
Capital securities 1,250 1,250
Other liabilities 600 1,000 1,600
Equity $ 13,650 $ 5,200 $ − $ 4,600 $ 23,450
Units outstanding1 540 241 781
Value per unit2 $ 25 $ 30
Net Proceeds (US$ Millions)
Cap
Rate
2016 2,000+ 4.0%
2015 2,000 4.5%
2014 1,000 5.5%
Total $ 5,000+ 4.5%
Sourced the most effective capital…
• Issued 173 million limited partnership units in 2014 to acquire BPO
• Issued $1.8 billion of preferred units which are mandatorily convertible into 70 million BPY
units to fund the privatization of Canary Wharf
• In 2015 and 2016 accelerated recycling of capital to take advantage of strong market
demand:
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2017+ will start to realize significant amounts of capital
from ‘first generation’ fund investments
…Advanced development pipeline
• Completed on time and budget $1.2 billion of development and redevelopment projects and created $800+ million in value
• Added $3.6 billion in projects to the active development pipeline, including:
– Pipeline in Canary Wharf
– Development sites in London, New York, Washington, DC, Rio de Janeiro
• Invested $2 billion on advancing construction, on time and on budget
• Secured over $3 billion in committed construction financings
• Advanced pre-leasing by executing 3 million square feet of leases
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Increased capital invested in Opportunistic strategies…
• >$4 billion of capital invested compared to $1 billion in 2013
• Earned $110 million in FFO in Q2 2016, up 93% year over year
• Diversified our cash flows by exposing us to both new geographies and real estate sectors:
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($ in millions) U.S. Europe Brazil India China Total
Hospitality $ 360 $ 740 $ 1,100
Multifamily 850 850
Retail 350 250 200 800
Office 200 40 240 250 730
Industrial 400 250 50 700
Triple net lease 400 400
Mezzanine 170 170
Self-storage 150 150
Student housing 150 150
Total $ 2,880 $ 1,180 $ 490 $ 250 $ 250
($ in millions expect per unit amounts) Capital FFO Appreciation Total
Core Office and Retail $ 19,000 6% 4–6% 10–12%
Opportunistic 4,500 7% 11–13% 18–20%
$ 23,500 6% 6–9% 12–15%
Target Earnings per unit $1.90 $2.10 $4.00
Funds attractive distribution per unit of… $1.12
and distribution growth targets between… 5–8%
Provides capital to re-invest into
platforms for future growth
Now positioned to achieve earnings potential
• Target long-term return on equity of 12-15%:
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$1.11
$1.80
2014 2015
$1.18
$1.32+
2016 2021
$2.00
Same store growth of 2-3% – $220m
Active developments – $160m
Reinvestment of capital at higher
returns – $100m
Future drivers of earnings growth…
• To date, we have benefited from earnings growth driven by lease-up of Brookfield Place
New York and reallocation of capital to higher-returning Opportunistic strategies
• Over the next 5 years, growth will be driven by three things:
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9%
2015
$1.18
2016 2021
$2.00
$1.60
$1.06
90% 80%
($ per unit)
Funds from operations $ 2.00
Average annual realized gains 0.35
Second generation leasing costs (0.35)
Sustaining capital expenditures (0.15)
Annual non-cash rents (0.10)
Adjusted AFFO $1.75
Conservative payout ratio + diversity of cash flows
provides support for current yield
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7%
$1.32
$1.12
85%
Conservative Financing Strategy
• We finance predominantly with asset-level, non-recourse debt
• We raise asset-level debt in local currency with primarily fixed interest rates
• We source the lowest cost capital to fund growth
• Our investment-grade corporate credit rating provides financing flexibility
• We target a distribution pay-out ratio of 80% of Company FFO
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Our long-term goal is to maintain a
proportionate debt-to-capital ratio of <50%
• We have made significant progress in reducing debt levels post the acquisition of BPO and are continuing to work toward our long-term goal:
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53%
50% ($ in millions)
Repay unsecured bonds $ (400)
Reduce corporate and subsidiary debt (1,600)
$ (2,000)
38%
25%
($ in millions)
Reduce corporate and subsidiary debt (4%)
Planned refinances (4%)
Swap to fixed in floating rate markets (3%)
Convert construction financing to permanent (2%)
(13%)
We target to limit floating rate debt to 25% of total
• Although we may maintain higher floating rate exposure during certain periods where economic conditions and investment strategy support it
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We proactively manage foreign exchange exposures…
• Finance using local currency debt which reduces exposure by 45-50%
• Layer on currency hedges to reduce the exposure a further 30-40%
• Leaving only 10-20% of our equity exposed to foreign currencies at any given time
• Actively manage this exposure to protect equity – Brexit case study:
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(£ in millions)
Total assets invested in U.K. £ 7,100
Local currency debt (3,400)
Reduces our capital at risk prior to hedging £ 3,700
Currency hedges (2,900)
Net exposure to the Pound £ 800
Reduced % of total equity exposed to Pound from 12% to …. 5%
Wrap-up / Q&A – Brian Kingston
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Global reach to identify and acquire high-quality
real estate on a value basis
• Strong operating platforms which enables us to acquire real estate in need of leasing, capital or re-positioning, to generate core-plus returns
• Extensive development pipeline assembled over time in high-value, supply-constrained markets
– 10 msf of core office and multifamily developments and expected to produce +/-15% levered returns over next 5+ years
– Significant shadow pipeline, with minimal invested capital that will be well-positioned for the next development cycle
• Access to opportunistic real estate returns through ability to invest in Brookfield Asset Management-sponsored real estate funds
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BPY offers a compelling, unique combination of
current yield and organic growth
• Yield backed by stable and secure cash flow from a portfolio of high-quality assets
• Attractive entry point at discount to IFRS value
• A $23 per unit investment today has the potential to offer a very attractive return to
shareholders:
$ 23
Year 1 Year 2 Year 5 Year 10
Current Yield (5-8% distribution growth)
+ Appreciation
(Multiple of 8-11% FFO growth)
+ Investment
(as of NYSE closing on 9/27/16)
$ 16
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Today
$ 38
$ 77
$ 42
$ 7
$ 12
$ 23 $ 23
13%
Q&A
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Special Note Regarding Forward-looking Statements
This presentation contains “forward-looking information” w ithin the meaning of Canadian provincial securities law s and applicable regulation and “forward looking statements” w ithin the
meaning of “safe harbor” provisions of the United States Private Security Litigation Reform Act of 1995. Forw ard-looking statements include statements that are predictive in nature,
depend upon or refer to future events or conditions, include statements regarding our operations, business, f inancial condition, expected f inancial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook, as w ell as the outlook for North American and international economies for the current f iscal year and
subsequent periods, and include w ords such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, “likely”, or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.
Forw ard-looking statements include, w ithout limitation, statements about the quality of our assets and the resiliency of the cash flow they will generate, our target distribution grow th, the
performance of our assets and their potential for capital appreciation, our f inancial and operating objectives and strategies to achieve those objectives, our ability to recycle capital from
stabilized or non-strategic assets and realize capital from our fund investments, our ability to allocate capital and capitalize on investment opportunities, the potential grow th of our business and related revenue streams, grow th to be achieved by increasing occupancy, the prospects for increasing our cash f low from c ontinued achievement of targeted returns on our
investments and development and re-development pipeline, the anticipated cost and value of our development and re-development pipeline, the impact of Brexit and the energy market
dow nturn on our business and the availability of f inancing and our f inancing strategy.
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Although w e believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon
reasonable assumptions and expectations, the reader should not place undue reliance on forw ard-looking statements and information because they involve know n and unknow n risks,
uncertainties and other factors, many of w hich are beyond our control, w hich may cause our actual results, performance or achievements to differ materially from anticipated future
results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors that could cause actual results to differ materially from those contemplated or implied by forw ard-looking statements include, but are not limited to: risks incidental to the
ow nership and operation of real estate properties including local real estate conditions; the impact or unanticipated impact of general economic, political and market factors in the
countries in w hich we do business; the ability to enter into new leases or renew leases on favorable terms; business competition; dependence on tenants’ f inancial condition; the use of
debt to f inance our business; the behavior of f inancial markets, including f luctuations in interest and foreign exchanges rates; uncertainties of real estate development or
redevelopment; global equity and capital markets and the availability of equity and debt f inancing and refinancing w ithin these markets; risks relating to our insurance coverage; the possible impact of international conflicts and other developments including terrorist acts; potential environmental liabilities; changes in tax law s and other tax related risks; dependence
on management personnel; illiquidity of investments; the ability to complete and effectively integrate acquisitions into exis ting operations and the ability to attain expected benefits
therefrom; operational and reputational risks; catastrophic events, such as earthquakes and hurricanes; and other risks and f actors detailed from time to time in our documents f iled
w ith the securities regulators in Canada and the United States.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our view s as of the date of this
presentation and should not be relied upon as representing our view s as of any date subsequent to the date of this presentation. When relying on our forward-looking statements or
information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law , w e undertake no obligation to
publicly update or revise any forward-looking statements or information, w hether written or oral, that may be as a result of new information, future events or otherwise.
Special Note Regarding Use of Non-IFRS Measures
This presentation contains references to net operating income (“NOI”) and funds from operations (“FFO”) w hich do not have any standardized meaning prescribed by International Financial
Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures presented by other entities. We define FFO as income, including equity accounted income, before
realized gains (losses) from the sale of investment property (except gains (losses) related to properties developed for sale) , fair value gains (losses) (including equity accounted fair value
gains (losses)), depreciation and amortization of real estate assets, income tax expense (benefit), and less non-controlling interests of others in operating subsidiaries and properties. We
believe that these are useful supplemental measures that may assist investors in assessing the f inancial performance and the cash anticipated to be generated by our business. NOI and FFO should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a s ubstitute for, analysis of our f inancial statements prepared
in accordance with IFRS. See “Reconciliation of Non-IFRS Measures” in our most recent annual report on Form 20-F and our 6-K filed on August 11, 2016 for a more detailed discussion
including a reconciliation to the most directly comparable IFRS measures.
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Additional Notes
All amounts are in U.S. dollars unless otherw ise specified.
Unless otherw ise indicated, the statistical and financial data in this document is presented as of June 30, 2016.
Brookfield Property Partners L.P. 2016
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