2017
highlights

  • Distributable earnings of €76.60 million
  • NAV €1.32 per share up 16%
  • Successfully executed acquisitions of €334 million
  • LTV improved to 47.4% (2016: 52.7%)
  • Distributable income per share 10.87 € cents for full FY
  • NOI up to €103 million (2016: €67 million)
  • Disposed of €160 million of office assets
  • Cost of debt 2.14% – weighted maturity 3.9 years

75 603 104 million shoppers visited EPP centres in 2017

130 international retailers in EPP malls

122 069 m2 retail GLA acquisitions added to EPP portfolio in 2017 (excluding development site and M1 portfolio)

11 retailers launched flagship stores in EPP malls

Boosted in-house capabilities including asset management, leasing, legal department and investor relations

Announced €692 million M1 portfolio acquisition

Acquired six retail properties (including Młociny development site)

Disposed of three office properties

18 450 m2 of retail extensions delivered (Galaxy and OPS)

  • GLA m2
    444 350
    (2016: 307 840)
    GLA at the end of 2016 excluding extensions
  • Tenant turnover growth ("LFL*'')
    7.0%
    (2016: 3.0%)
  • Rent-to-sales ("RTS'')
    10.3%
    (2016: 11.0%)
  • WALT# by GLA
    5.30 years
    (2016: 4.76 years)
  • Footfall growth ("LFL*'')
    4.6%
    (2016: 3.0%)
  • Vacancy
    1.41%
    (2016: 1.63%)
  • Operational costs ratio ("OCR'')
    13.5%
    (2016: 14.5%)
  • Number of units
    1 428
    (2016: 968)

*LFL: Like-for-like, #Weighted average lease term.

Performance
review

As a result of the M1 transaction, by 2020 we will own 27 shopping malls with almost 1 million square metres of GLA across Poland, one of the fastest growing consumer markets in Europe.

I'm pleased to present a strong set of financial results in our first full year of peration. 2017 has been a tremendous year which has seen us consolidate a airly fragmented retail market in Poland with acquisitions totalling nearly a billion euros.
Chairman's letter to shareholders Chief executive officer's report and operational review Chief financial officer's report

Property
portfolio

 

GALAXY

Szczecin

GLA (m2) 56 627

Rent to sales 11.6%

WAULT (rent) 7.1 years

Occupancy 98.80%

Turnover growth 4.1%

Annual footfall growth 7.1%

Annual footfall 11 624 049

Valuation yield 5.95%

PASAŽ GRUNWALDZKI

Wrocław

GLA (m2) 48 368

Rent to sales 12.6%

WAULT (rent) 4.7 years

Occupancy 99.3%

Turnover growth 8.8%

Annual footfall growth 6.3%

Annual footfall 10 525 382

Valuation yield 5.65%

GALERIA ECHO

Kielce

GLA (m2) 71 650

Rent to sales 10.0%

WAULT (rent) 4.6 years

Occupancy 96.0%

Turnover growth 2.3%

Annual footfall growth 9.7%

Annual footfall 9 710 032

Valuation yield 5.75%

AMBER KALISZ

Kalisz

GLA (m2) 33 599

Rent to sales 9.3%

WAULT (rent) 4.7 years

Occupancy 100%

Turnover growth 8.1%

Annual footfall growth 12.5%

Annual footfall 6 148 053

Valuation yield 6.31%

OUTLET PARK

Szczecin

GLA (m2) 28 283

Rent to sales 8.7%

WAULT (rent) 5.3 years

Occupancy 98.7%

Turnover growth 4.8%

Annual footfall growth 0.4%

Annual footfall 3 631 819

Valuation yield 6.28%

GALERIA SOLNA

Inowrocław

GLA (m2) 23 627

Rent to sales 8.8%

WAULT (rent) 3.9 years

Occupancy 96.6%

Turnover growth 4.5%

Annual footfall growth 7.1%

Annual footfall 4 239 887

Valuation yield 7.07%


Hadley Dean (Chief executive officer)
(Male, 47, British)
Hadley Dean brings more than 20 years of real estate experience to EPP. Most recently the CEO of Compass Offices' European, Middle Eastern and African operations, Hadley helped Compass grow to become Hong Kong's largest serviced office provider with a network extending to Australia, Japan, Kazakhstan, Singapore and the United Arab Emirates. Prior to Compass, Hadley served as a Managing Partner at Colliers International, an industry-leading global real estate services company operating in 66 countries. Responsible for Colliers' Eastern Europe region, he managed business across 12 countries, 16 offices, and more than 750 employees. He was also Colliers' EMEA Management Board Member. Hadley holds a BSc from the University of Newcastle-upon-Tyne, and a Property valuation and Management degree from Sheffield Hallam University. Hadley was appointed to the board effective 1 June 2016. His current term expires in 2020.


Jacek Bagiński (Chief financial officer)
(Male, 48, Polish)
Jacek is a senior financial executive with over 20 years' experience in various businesses operating across Poland and Central and Eastern Europe (CEE) countries, ranging from retail, production and sale of pharmaceuticals, fast moving consumer goods, to exploration of oil and gas and other natural resources. Jacek was a member of a number of management boards and CFO of companies listed on the Warsaw Stock Exchange and controlled by the largest private equity funds operated in CEE countries. Additionally, he has served in senior management and executive positions in multinational corporations, including PepsiCo and BP/Amoco, with turnovers ranging from €15 million to over €750 million. Jacek was responsible for business development, including M&As, financing and taxation as well as financial planning and controlling. Recently, he was a member of the management board and CFO of Empik Media & Fashion S.A., one of the largest holding companies controlling a group of retail, e-commerce and service operations. He holds a Master's degree from SGH Warsaw School of Economics. Jacek was appointed to the board effective 19 May 2017. His current term expires in 2019.


Robert Weisz (Independent non-executive chairman)
(Male, 68, Dutch)
Robert serves as Partner and Managing Director of Timevest, a European commercial property investment company. Its portfolio includes high street shopping and commercial retail locations in Germany, the Czech Republic, and the Netherlands. Previously, Robert was Partner and Managing Director of DBN group, a commercial property company operating in the Netherlands and the US. He has been visiting professor at the Technical University of Eindhoven's Urban Planning Design group since 2004 and was formerly a guest lecturer in property finance and valuation at the Amsterdam School of Real Estate and University of Groningen. Robert is the co-author of three textbooks on property investment. He holds an MBA, and is a CA, Fellow of the Royal Institute of Chartered Surveyors RICS. Robert was appointed to the board effective 12 August 2016. His current term expires in 2019.


Marek Marian Belka (Independent non-executive director)
(Male, 66, Polish)
Marek is a former Prime Minister of Poland (2004 to 2005) and President of Narodowy Bank Polski (Polish Central Bank) (2010 to 2016). He qualified as an economist with an MA, PhD and Habilitacja (higher degree common in continental Europe). He has held various political positions since 1996, including Advisor to the President of Poland, Minister of Finance and Deputy Prime Minister. He has also held positions in international organisations, serving as executive secretary of the Economic Commission for Europe (in the rank of Undersecretary General of the UN) and Director of European Department in the International Monetary Fund (2008 to 2010). Marek worked in Albania as advisor to three consecutive prime ministers of the country and in the Coalition Provisional Authority in Iraq (2003 to 2004). He was a member of the board of directors of two commercial banks in Poland (at different times) and served as chairman of LOT Polish Airlines from 2002 to 2003. Marek was appointed to the board effective 12 August 2016. His current term expires in 2018.


Peter Driessen (Independent non-executive director)
(Male, 70, Dutch)
Until 1 July 2016, Peter served as the European Director of Capital Markets with CB Richard Ellis in Amsterdam, where he focused primarily on providing strategic and property-specific investment advice to both Dutch and international investors across all property sectors. Previously, Peter served as Co-Founder and Managing Director of Colliers BDR/ Insignia BDR, as a board member of BCD Holdings, and as Director Real Estate Investments at Centraal Beheer Pensioenverzekeringen N.V. (Achmea Group). He currently serves as a member of the supervisory board of three international real estate investment funds of Syntrus Achmea Real Estate & Finance. Peter holds a degree from University of Tilburg, faculty of law. He was appointed to the board effective 12 August 2016. His current term expires in 2018.


Dionne Ellerine (Independent non-executive director)
(Female, 50, South African)
Dionne has a BCom LLB from the University of the Witwatersrand ("Wits'') and thereafter was admitted as an Attorney of the Supreme Court of South Africa. She lived in London for 11 years where she worked at Stenham Property managing commercial property investments for offshore clients. On her return to South Africa, she was appointed as a director of Ellerine Bros. Proprietary Limited, which is involved in equities and property investments. Dionne was appointed to the board effective 1 June 2016. Her current term expires in 2018.


Andrea Philippa Steer (Independent non-executive director)
(Female, 48, South African/Irish)
Andrea holds BCom (WITS) and LLB (UNISA) degrees and was admitted as an Attorney, Notary and Conveyancer of the High Court of South Africa. She is currently registered as a Solicitor of England and Wales. Andrea runs her own legal consultancy business, and until recently acted as International Legal Counsel at Randstad Holding N.V., a global leader in the HR services industry, headquartered in Amsterdam and listed on the Amsterdam Stock Exchange ("AEX''). Previously, she held roles as legal consultant at the SBS Broadcasting group (Amsterdam) and as an associate at Clifford Chance LLP (Amsterdam). She currently holds a number of other non-executive directorships in privately held companies in the Netherlands and South Africa. Andrea was appointed to the Board effective 12 August 2016. Her current term expires in 2018.


Maciej Dyjas (Non-executive director)
(Male, 54, German)
Maciej Dyjas is a Co-Managing Partner and Co-CEO of Griffin Real Estate, a leading and dynamically growing investment group operating in Central and Eastern Europe's commercial real estate market. He is also a Managing Partner at Cornerstone Partners – a private equity investment firm, active in the CEE region – with an impressive track record of transactions. Before joining Griffin Real Estate and Cornerstone, he was a Managing Partner and CEO of Eastbridge Group, a Luxembourg-based private investment fund that manages over €1.5 billion in assets related to retail, consumer goods and real estate. He graduated from the University of Warsaw and University of Stuttgart with degrees in Mathematics, IT and Management. Maciej was appointed to the board effective 1 June 2016. His current term expires in 2020.


Andrew König (Non-executive director)
(Male, 50, South African)
A qualified Chartered Accountant with 22 years of commercial and financial experience, Andrew was previously the group Financial Director of Independent News and Media. He is the chief executive officer of Redefine responsible for all aspects of regulatory compliance, corporate activity and communications, and for ensuring the board's strategy is implemented. Andrew holds a BCom and a BAcc and is a CA(SA). Andrew was appointed to the board effective 1 June 2016. His current term expires in 2019.


Nebil Senman (Non-executive director)
(Male, 46, German/Turkish)
Nebil Senman is a Co-Managing Partner of Griffin Real Estate, a leading and dynamically growing investment group operating in Central and Eastern Europe's commercial real estate market. Previously, Nebil held positions for nine years as Senior Vice President and Supervisory Board Member of Oaktree's German and Polish real estate funds and operations worth several billion Euro. Before joining Oaktree, Nebil spent eight years within the real estate advisory and corporate finance division at Ernst & Young Real Estate (previously Arthur Andersen) where he held different managerial positions. Nebil is a graduate of universities in Berlin (TU Berlin), Paris (ESCP-EAP) and London (LSE). He holds an MBA and a degree in civil engineering, and a post-graduate diploma in real estate management (EBS). He is a member of the Royal Institute of Chartered Surveyors, MRICS. Nebil was appointed to the board effective 12 August 2016. His current term expires in 2019.


Marc Wainer (Non-executive director)
(Male, 69, South African)
Until August 2014, Marc was chief executive officer of Redefine Properties Limited, before moving into his role as executive chairman. He has 40 years' experience in all aspects of real estate. Marc's primary focus is on acquisitions and disposals, international investments, and investor relations, as well as playing a role in conceptual development at Redefine. Marc was appointed to the board effective 1 June 2016. His current term expires in 2020.

Przemysław Krych resigned as director on 20 December 2017.

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Jacques de Bie
JdBie@singular.co.za

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michele@singular.co.za

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28 Fort Street Birnam
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Investor Relations
Curwin.rittles@echo-pp.com