Share in Germany’s No.1 Residential Property Portfolio
2012
WHY PUT ALL YOUR MONEY INTO ONE PROPERTY when you can join together with like minded investors and purchase the whole building at a lower price with higher returns.
Agenda
Introduction
German Property Market
Properties acquired 2011
Portfolio description
Investment features
Investment model
ROI Projections
Propfund’s role
EURIX Group
Getting started
Share in Germany’s No.1 Residential Property Portfolio
2012
The idea is very simple… Where an individual investor could purchase one apartment in Germany for €140,000 with a rental yield of 5.5% and with a 60% mortgage, Propfund Germany would bring all these investors together to purchase the entire building resulting in the same apartment being purchased for €100,000 with a rental yield of 8% with an 80% mortgage. With this model Propfund investors make a lot more money with little or no involvement compared to investing privately themselves.
Share in Germany’s No.1 Residential Property Portfolio
2012
Returns
Forecasted dividend of 7-10% per year. 170% return in 10 years time Invest €50K in Germany and Make 170% ROI Your Exit Amount: €135,000
Share in Germany’s No.1 Residential Property Portfolio
2012
German property market
Germany – The Worlds most stable property economy
German Real estate market is very active with institutional investors Economic growth in 2011 – 3% GDP Unemployment levels are falling Investor confidence very strong High rental occupancy levels in major cities 84% rental occupancy in Berlin Property Prices and Rents continue to rise No.1 residential property investment market in the world
Share in Germany’s No.1 Residential Property Portfolio
2012
What the media says in 2012… “German residential sector is regarded as a secure investment” CBRE
“Apartment costs up by around 8% in 2011” GSW Immobilien
“The most dynamic rent market is in Berlin, where prices rose by 9%” Jones Lang LaSalle
“Housing prices rose by 5.5% last year— more than twice as much as in 2010.” TD International
“Analysts expect prices for German real estate company shares to rise by 5-15% over the next twelve months” Dr. Zitelmann
Share in Germany’s No.1 Residential Property Portfolio
2012
Housing price development is healthy DB Research expects a further rise in the price of housing in Germany. Prices for houses should rise by 3% annually until 2015, condominiums by even more. No talk of a bubble: “Historically and in terms of disposable income, housing remains attractively valued and thus, even with price increases of 5% per year through 2015, there is no threat of overheating.” Over the long term, prices are not likely to go through the roof because of both the regulatory environment, which has a moderating effect on rent, and the demographic trend, which, “in less than ten years,” will have a negative influence on prices. Share in Germany’s No.1 Residential Property Portfolio
2012
Berlin housing market Properties are valued as a multiple of the rental yield Property Prices and Rents are low in Berlin and rising Berlin is a population of tenants – 84% of Berliners rent
Germany’s capital city has huge potential for growth!
Share in Germany’s No.1 Residential Property Portfolio
2012
Properties acquired 2011
Propfund Germany 1- Subscribed in 2011 With the combined equity of 80 investors in 2011, Propfund 1 acquired 6 portfolios totalling 240 units, bringing the total acquisitions to €12,737,500 with an exciting rental yield of 9,3% 240 properties & 27 car spaces Portfolios purchased for €12,737,500 Current portfolio value (12.5) €14,800,000 Acquired 20% below current market value External bank financing – 84% LTV Average apartment price €53,072 (€744/sqm) Rental income – €1,184,439 Rental yield – 9.3% Rental Occupancy 98% Cash surplus pa – €266,701 Profit 7.4% pa equity invested
Don’t miss your chance in 2012! Share in Germany’s No.1 Residential Property Portfolio
2012
PROPFUND GERMANY 2 Launching March 2012
Portfolio Description
Residential apartment blocks Over 500 units worth over €30,mil 7%+ rental yields minimum Low purchase prices – 13 times the annual rent No renovation required All buildings tenanted Immediate income generating portfolios
Share in Germany’s No.1 Residential Property Portfolio
2012
Investment Features
Invest via a SIPP or as a Private investor Invest from €30,000 German Federal Financial Authority approved Low purchase prices – 13 times the annual rent €10,mil in Private Equity and €20,mil in bank financing Returns paid to investors yearly – forecast 7%-10% per annum Investors can expect to earn 170% ROI over 10 years Safe and secure investment
Share in Germany’s No.1 Residential Property Portfolio
2012
Investment model & ROI projections
Investment Model
Stage31:SIMPLE Purchase theSTAGES property
•Apartment block for sale €1,000,000 (10 apartments at €100,000/apt) •If purchased individually €140,000/apt •Annual rental income: €76,900 (13 times annual rent) •Investment based on a purchase price of €1,000,000 plus 10% closing costs. •80% bank financing + 20% private equity
Purchase Factor 13
Stage 2: Manage the portfolio each year
•Collect the annual rent: €76,000 (increase by approx 2%-3% per annum - €100,000 after 10 years) •Manage all the annual costs: €59,000 •Generate the annual cash surplus: €21,000 (grows as rent increases per annum) Stage 3: Resell the property after 10 years •Shareholder payout each year = €21,000 - 7% of the €300,000 private equity 2%-3% increase in rent pa = 20%-30% increase in Property value over 10 years • Mortgage balance reduced by approx. 20% over 10 years • Property resale value: €1,300,000 • Profit from sale of the portfolio: €300,000 after all closing costs • + (€300,000 = 100% ROI) = (€210,000 over 10 years = 70% ROI)
Share in Germany’s No.1 Residential Property Portfolio
7% ROI Each year 100% ROI in 10 yrs (€510,000 = 170% ROI)
2012
Creating wealth for investors
Invest €50,000 Earn an average dividend of €3,500 per year for 10 years. (7%pa) PLUS €50,000 lump sum after 10 years PLUS your initial investment back That’s a total of €135,000!
Share in Germany’s No.1 Residential Property Portfolio
2012
Investment examples
Share in Germany’s No.1 Residential Property Portfolio
2012
Role of Propfund To set up the legal construction to enable multiple investors in to invest together To obtain approval from the German regulator to offer the fund To raise the private equity from multiple private investors and SIPPs To source, negotiate, and purchase the properties To complete all the due diligence and organise the bank financing To manage all the properties and collect the rent each month To co-ordinate any maintenance or refurbishment required To perform annual tenant reviews and increase the income from the portfolio each year. To sell all the properties on completion of the fund To pay annual dividends to investors and profits from the sale of the portfolio after 10 years
Share in Germany’s No.1 Residential Property Portfolio
2012
The EURIX Group
EURIX Group Propfund Germany is part of the EURIX Group
Real estate Investment since 1996 Founded by Marco Knoblauch and Detlef Martin – approx 20 staff Head office Berlin. Offices in London, Dublin & Zurich Expertise in Property Acquisition, Investment and Asset Management 3 Syndicated Property Funds under management Over 1000 properties under management in Berlin. (300 units Group owned) Real Estate partner of Germany’s largest network of Financial Advisors Member of the German Real Estate Association
Share in Germany’s No.1 Residential Property Portfolio
2012
EURIX Group
Share in Germany’s No.1 Residential Property Portfolio
2012
Summary… By investing in Propfund Germany 2, you benefit from: Lower Purchase Prices Better finance conditions Higher rental yields Lower risk No hassle, Fully Managed investment Multiple Investment options
Excellent Returns! Forecasted dividend of 7-10% per year. 170% return in 10 years time Invest €50K in Germany and Make 170% ROI Your Exit Amount: €135,000
Share in Germany’s No.1 Residential Property Portfolio
2012
Joining the Fund
Getting Started
Read a copy of the investment prospectus. Decide the amount you would like to invest.
Complete the Investment Instruction and return this to your advisor.
The Trustee signs the necessary documents and returns copies of these to the investor.
Once you have received the documents you need to transfer the funds to the Propfund bank account.
Receipt of funds is first confirmed by email. Once the 14 days “cooling off” period has expired, confirmation of funds along with a share certificate is sent to you by post, this completes the investment process.
Share in Germany’s No.1 Residential Property Portfolio
2012
Thank You Propfund Germany, GmbH & Co. KG KG, Friedrichstraße 82, 10117 Berlin-Mitte T: +49 304 9905 0950 E: info@propfund.com
Share in Germany’s No.1 Residential Property Portfolio
2012