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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.
Introduction
German Property Market
Properties acquired 2011
Portfolio description
Investment features
Investment model
ROI Projections
Propfund’s role EURIX Group
Getting started
Agenda
Share in Germany’s No.1 Residential Property Portfolio 2012
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.
The idea is very simple…
Share in Germany’s No.1 Residential Property Portfolio 2012
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
Returns
2012 Share in Germany’s No.1 Residential Property Portfolio
German property market
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
Germany – The Worlds most stable property economy
Share in Germany’s No.1 Residential Property Portfolio 2012
“German residential sector is regarded as a secure investment” CBRE
What the media says in 2012…
Share in Germany’s No.1 Residential Property Portfolio
“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
2012
Housing price development is healthy
Share in Germany’s No.1 Residential Property Portfolio
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.
2012
Berlin housing market
Share in Germany’s No.1 Residential Property Portfolio
Properties are valued as a multiple of the rental income
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!
2012
Properties acquired 2011
Propfund Germany 1- Subscribed in 2011
Share in Germany’s No.1 Residential Property Portfolio
With the equity Propfund raised in 2011 we
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
With the combined equity of 80 investors in 2011, Propfund 1
acquired 6 portfolios totalling 240 units, bringing the total
acquisitions to €12,602,500 with an exciting rental yield of 9,4%
240 properties & 27 car spaces
Portfolios purchased for €12,602,500
Current portfolio value (12.5) €14,800,000
Acquired 20% below current market value
External bank financing – 85% LTV
Average apartment price €53,072 (€744/sqm)
Rental income – €1,187,233
Rental yield – 9.4%
Rental Occupancy 98%
Cash surplus pa – €287,670
Profit 7.4% pa equity invested
2012
Don’t miss your chance in 2012!
PROPFUND GERMANY 2 Open for investments, April 2012
Residential apartment blocks
Over 500 units worth over €30,mil
8% average rental yields
Low purchase prices – 12.5 times the annual rent
No renovation required
All buildings tenanted
Immediate income generating portfolios
Portfolio Description
Share in Germany’s No.1 Residential Property Portfolio 2012
Invest via a SIPP or as a Private investor
Invest from €30,000
German Federal Financial Authority approved
Low purchase prices – 12.5 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
Investment Features
Share in Germany’s No.1 Residential Property Portfolio 2012
Investment model & ROI projections
Key Performance indicators
Share in Germany’s No.1 Residential Property Portfolio
1. Purchase Prices: Average 12.5 times the annual rental
income – average 8% rental yields.
2. Profitable from Day 1: Properties show a 7% profit in
the first year after all costs based on our cost model.
3. Rental & Property increases: Forecast is based on
increasing the rents and the value of the portfolio by
2,5% per year for 10 years.
4. Resale Prices: Average 13 times the annual rental
income – average 7.7% rental yields.
2012
3 SIMPLE STAGES Stage 1: Purchase the property
• Apartment block for sale €1,000,000 (10 apartments at €100,000/apt)
• If purchased individually €140,000/apt
• Annual rental income: €80,000 (Purchase factor is 12.5 times annual rental income)
• Investment based on a purchase price of €1,000,000 plus 10% closing costs.
• 80% bank financing + 20% private equity
Stage 2: Manage the portfolio each year
• Collect the annual rent: €80,000 (increase by approx. 2%-3% per annum - €100,000 after 10 years)
• Manage all the annual costs: €59,000 per annum
• Generate the annual cash surplus: €21,000 (grows as rent increases per annum)
• Shareholder payout each year = minimum forecast €21,000= 7% of the €300,000 private equity
Stage 3: Resell the property after 10 years • 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 (strategy is to resale the portfolio for a price 13 times annual rent)
• Profit from sale of the portfolio: €300,000 after all closing costs
Investment Model
Share in Germany’s No.1 Residential Property Portfolio
100% ROI
in 10 yrs.
Purchase
Factor 12.5
7% ROI
Each year
(€210,000 over 10 years = 70% ROI)
2012
+ (€300,000 = 100% ROI) = (€510,000 = 170% ROI)
ROI Forecast – €100,000 (Before tax in Germany)
Share in Germany’s No.1 Residential Property Portfolio
Invest €100,000
Earn an average dividend of €7,000 per year
for 10 years. (7%pa)
PLUS €100,000 lump sum after 10 years
PLUS your initial investment back
That’s a total of €270,000!
2012
Negative Forecast- 0% increase in rent and property values per annum
Invest 100,000€ year 1 & 2 year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 TOTAL
Net payout after tax 7,000 € 7,000 € 4,500 € 3,908 € 3,581 € 3,530 € 3,727 € 3,922 € 4,115 € 5,056 € 5,994 € 52,334 €
Net payout after tax (%) 7.00% 7.00% 4.50% 3.91% 3.58% 3.53% 3.73% 3.92% 4.12% 5.06% 5.99% 52.33%
Actual Forecast- 2,5% increase in rent and property values per annum
Invest 100,000€ year 1 & 2 year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 TOTAL
Net payout after tax 7,000 € 7,000 € 7,000 € 5,652 € 5,566 € 5,378 € 5,435 € 5,487 € 5,533 € 6,322 € 7,106 € 67,479 €
Net payout after tax (%) 7.00% 7.00% 7.00% 5.65% 5.57% 5.38% 5.44% 5.49% 5.53% 6.32% 7.11% 67.48%
Invest 100,000€ year 1 & 2 year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 TOTAL
Net payout after tax 7,000 € 7,000 € 9,273 € 7,598 € 7,512 € 7,160 € 7,041 € 6,904 € 6,748 € 7,323 € 7,877 € 81,435 €
Net payout after tax (%) 7.00% 7.00% 9.27% 7.60% 7.51% 7.16% 7.04% 6.90% 6.75% 7.32% 7.88% 81.44%
Positive Forecast- 5% increase in rent and property values per annum
Total net annual payments over 10 years 52.3% 52,334 €
Average dividend net pay out per year 5.2% 5,230 €
Plus lump sum after 10 years 25% 25,156 €
Plus your initial investment back 100% 100,000 €
That’s a total return of: 177% ( 177,490 € )
Total net annual payments over 10 years 67.5% 67,479 €
Average dividend net pay out per year 6.8% 6,740 €
Plus lump sum after 10 years 100% 99,926 €
Plus your initial investment back 100% 100,000 €
That’s a total return of: 267% ( 267,406 € )
Total net annual payments over 10 years 81.4% 81,435 €
Average dividend net pay out per year 8.1% 8,140 €
Plus lump sum after 10 years 197% 196,995 €
Plus your initial investment back 100% 100,000 €
That’s a total return of: 378% ( 378,430 € )
Investment examples
Share in Germany’s No.1 Residential Property Portfolio 2012
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
Role of Propfund
Share in Germany’s No.1 Residential Property Portfolio 2012
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
EURIX Group
Propfund Germany is part of the EURIX Group
2012 Share in Germany’s No.1 Residential Property Portfolio
EURIX Group
2012 Share in Germany’s No.1 Residential Property Portfolio
Summary… By investing in Propfund Germany 2, you benefit from:
Share in Germany’s No.1 Residential Property Portfolio
Lower Purchase Prices
Better finance conditions
Higher rental yields
Lower risk
No hassle, Fully Managed investment
Multiple Investment options
2012
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
Joining the Fund
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.
Getting Started
2012 Share in Germany’s No.1 Residential Property Portfolio
Thank You
Propfund Germany 2 GmbH & Co. KG
Friedrichstraße 82,
10117 Berlin-Mitte
T: +49 30 499 05 09 50
E: info@propfund.com
2012 Share in Germany’s No.1 Residential Property Portfolio
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