Enlightened Product Development - CORESTATE Capital · 2019-09-12 · Co-Living appeals to a certain demographic with a certain lifestyle and mind -set 22 to 35 years (Millennials,

Enlightened Product DevelopmentThomas Landschreiber, CIO & Co-Founder

CMD - 12 September 2019

Urbanisation

Megatrends

2

Demographic transition Digitalisation

Sustainability

Megatrends and their impact on real estate are a key component for us in developing new products.

Capital Markets Day, 12 September 2019

Important Megatrends – Urbanisation & Demographics

Population in German cities until 2050 (million)

Lack of apartments until 2030 in the top 10 regions

Sources: Statistisches Bundesamt Destatis, United Nations Statistics; „Nachdenken über die Stadt von übermorgen“, BBSR 2019; „Summe der fehlenden Wohnungen bis 2030“, Allianz/Prognos, Statiistisches Amt München, Statistisches Jahrbuch Frankfurt 2018; Bericht zur Wohnungssituation in München 2016-2017; IBB Wohnungsmarktbericht 2017; Statista

11,400

6,700

7,100

7,300

5,300

5,200

6,200

3,300

2,800

5,100

20,700

16,900

16,200

15,900

10,800

9,600

7,200

6,700

6,000

5,700

Region Munich

City Berlin

Region Rhein-Main

Region Stuttgart

City Hamburg

Region Cologne

Region Munster

Region South Oberrhein

Region Hannover

Region Dusseldorf

Needed new apartments per year until 2030

New apartments per year between 2011 and 2014

3

0.65

0.7

0.75

0.8

0.85

0.9

0.95

1

40 45 50 55 60 65 70 75 80 85

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Mill

ione

n

FORECASTGermany % UrbanGermany urban population

Number of 1-2 room apts vs. 1-2 person households (2017/18)

0

500,000

1,000,000

1,500,000

2,000,000

1-2 roomapartments

1-2 personhouseholds

1-2 roomapartments


1-2 roomapartments


Frankfurt München Berlin

78% undersupply(c. 250k apts)




CORESTATE‘s strong Track Record

4

Serviced Apartments Student Homes


Co Living

CORESTATE‘s equipment for future trends

City Quarters Densification

5

New investment opportunities answering global trends


Millennial’s Lifestyle Drives Co-Living

6

Flexibility to move No long term commitment No acquisition of a flat/house

Search for contractual simplicity Demand for all-inclusive renting

Shifting consumption habits – less focus on owning cars or apartments but preference for experiences and sharing

Remain single longer

Sharing Urban

CommunityStyleFreedom

Plug & Play

Network All-inclusive

Co-Living appeals to a certain demographic with a certain lifestyle and mind-set

22 to 35 years (Millennials, Gen Y) Income >$30,000 p.a. Rental period of 12-18 months

Co-Living

Open space


Integrated Co-Living Concept

7

Co-Living Residential 3 months minimum, no cap Shared bathroom and kitchen Common spaces Little traffic areas or other ‘dead’ space No add-on services or cross-selling Fully connected

Interieur Modern and urban design Common Area with Lounge and Beverages Manifold leisure facilities Laundry Room

Events Community manager Concert evenings Networking and cooking events Exhibitions Wine and cocktail tastings

The integrated co-living concept promotes community throughout the building and thereby creates an ideal living experience tailored to the needs of the target group

Roof Terrace

Bedroom

Common Area

Concierge & Community Manager

Laundry room


Unlocking Value through Floor Optimization

8

Standard Apartment Co-Living Apartment


Co-Living: JV with QUARTERS

9

• Company was founded in 2012 –affordable urban housing as a point ofintense competition

• Market leader with 2,700 beds at 110locations

• Quarters curates a living experience thatcombines property technology, design andsocial interaction for Millennials and Gen-Z

• Integrated software platform (App) buildscommunity and drives operationalefficiency, customer experience andscalability

• Robust business model tried and testedfor over 7 years


Construction trend in the 1970/80s: Mono-culture

10

Cologne, Chorweiler

Berlin, MarzahnMunich, Neuperlach

Frankfurt, Niederrad


Building the right usage mix: City Quarters

11Capital Markets Day, 12 September 2019

Selected Features of City Quarters

12

City Quarters are able to actively implement modern requirements resulting from (mega) trends due to a high level of planning options and a wide range ofpotential use types:

Renewable Energies

„Last mile“Logistics

Decentral energy generation

Intelligent traffic flows

Sharing concepts

Digitalization

Infrastructure / E-Mobility

Transportation diversity

Walkability

Safety requirements

Smart Homes

Public transport


City Quarter “large scale” example (1/2)Acquisition of a City Quarter development in Bremen: “Stadtquartier Am Alten Speicher”

PoliceResidential

Daycare

Residential Retail Residential

Serviced Apartments Restaurants

• 32,000m² on 89 acres of land

• C. 950 users and employees

• Urban mixed use incl. residential, services,facilities, gastronomy and police station

• Residential: c. 17,000m²

• Serviced apartments: c. 3,600m²

• Boardinghouse: c. 2,500m²

• Police station: c. 3,000m²

• Commercial: c.1,500m²

• Daycare: c. 2,700m²

• Parking: c. 1,600m²

Residential

Restaurants

Residential

CommercialCommercial

Bakery

City Quarter Am Alten Speicher

Medical

13

Source: Haven Höövt


City Quarter „partial element“ – example (2/2) Acquisition of the mixed-use building "Clouth 104" as part of the City Quarter development "Clouth Areal“ in Cologne

• Part of the City Quarter development"Clouth Areal" (Revitalization of a 111 acreformer industrial factory site in the districtof Nippes)

• Urban use mix of office, residential, artstudio, retail, gastronomy etc.

• Net rental area of approx. 17,100 m²(excluding Serviced Apartments with 40units)

• 200 car parking spaces

• High standard of sustainability (DGNB"Gold" certified)

Mobility hub

Daycare

Daycare

Restaurants

ResidentialResidential

Clouth Areal

Residential Office

Office

Education (planned)

14

Source: Website Clouth Areal


High quality of life and stay for its users

Aspects such as modernity and sustainability provide attractiveness of the buildings

Mixed use leads to synergies

New build quality offers energy efficiency and environmentally friendly solutions

Long-term leases with commercial tenants

Eco-friendly with electric charging stations, last mile logistics and car-free areas

Investment Thesis – City Quarters

New City Quarters fulfill several purposes for investors and users:

From an investor's point of view, City Quarters meet the changing requirements for stable and sustainable real estate, which cannot be met in an isolated view of the respective asset classes of residential, office and retail

15Capital Markets Day, 12 September 2019

Initital

Net Lettable Area Actual / Planned

12,919 sqm / 17,537 sqm

Rent Actual / Planned

€1.3m / €3.3m

Occupancy / WAULT

74.0% / 4.8 years

Purchase Price / Transaction Costs

€41.5m / €3.1m

Capex & Tenant Improvements €20.4m

All-in costs €68.0m

Equity / Debt €25m / €43m(37%) / (63%)

Project ECHO

16

Densification – Example “Echo” (1/4)


School

17

AM Initiative I - Development



AM Initiative I - Development

18



19

AM Initiative II – Refurbishment - Exterior


Exit rent p.a. €3.3m

Multiple 25.0x

Sales Price €82.5m

Money Multiple 1.6x

IRR p.a. 18%

Projected exit KPIs


20

Capturing synergy profits across entire value chain


Documents

Enlightened Product Development - CORESTATE Capital · 2019-09-12 · Co-Living appeals to a certain demographic with a certain lifestyle and mind -set 22 to 35 years (Millennials,