1. real estate

Investor Presentation
October201 4
At-a-Glance
Dream Global REIT is an owner and
operator of 15.9 million square feet of
office and mixed use space in
Germany and provides a unique
opportunity to gain exposure to the
German real estate market.
15.9 M
Square Feet
Hamburg
Berlin
Cologne
277
Properties
Frankfurt
$2.7 B
Total Assets
8.8%
Cash Yield
15%
Year-to-date total return
Stuttgart
Munich
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Why Dream Global
Unique opportunity to gain exposure to Germany, one of the best real estate market in Europe

German real estate fundamentals are expected to remain strong and outperform the rest of Europe.

Local economy is diversified with low unemployment of 5.0%
Pipeline of good acquisition opportunities

Dream Global has been among the top 3 buyers of German office properties over the last three years.

We have established ourselves as a well-known player in the market and our ability to close deals is well
recognized by lenders, leading to repeat deals.
Active asset management through our strong operating platform and local depth of expertise

We have ~40 experienced and dedicated real estate professionals on the ground in Europe who are focused on
execution.

Our team has collectively leased 1.8 million square feet of commercial space since inception.

Market rents are currently 11.6% above in place rents for our IPO portfolio.
Historically, low interest rate environment present attractive spreads to help generate attractive returns
on further acquisitions

All our acquisitions have been completed at a ~400 bps spread between cap rate and cost of financing, which
equate to 10-12% levered returns of equity.

We continue to see a robust pipeline of opportunities as good real estate continue to change hands at attractive
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cap rates.
Why Dream Global
Significant improvement in asset quality and tenant diversification have lead to stable, high quality cash
flows

Gross rental income (GRI) from Deutsche Post, which was 85% at the time of IPO, is now only 34%. We’ve also
increased GRI contribution in the “Big 7” German office markets to 65%.

We have been selling our Deutsche Post assets at book value or better and have been realizing cap rate
compression and value appreciation on our development opportunities. To date, only 600k sf GLA (<4% of total
portfolio) of unannounced terminations remain in our Deutsche Post assets.

Dream Global currently offers a superior and well-covered cash yield of 8.8%.
Strategic JV opportunities leverage our expertise to source and manage high quality office properties

Our recently announcement partnership with POBA highlights our strong global relationship/management
platform and allows us the potential for future joint venture investment opportunities alongside POBA or other
partners.
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Dream Global REIT is being recognized for establishing an excellent platform
We recently entered into a strategic joint venture partnership with Public Official Benefits Association (POBA), a
South Korean pension fund to sell a 50% interest in seven of our properties for €221 million.
This transaction will allow us to leverage our operating platform and redeploy the proceeds into highly accretive
opportunities that are already identified.
Deal Merits:

We realized a significant cap rate compression from 6.3% as at acquisition to 5.3% on sale

The REIT will be receiving asset management and leasing fee income of C$ 1.2 million p.a. from POBA

The transaction provides us with the opportunity to refinance over €110 million of mortgages at 100 bps
lower interest rates when reinvesting the proceeds

The REIT realized a cash gain of over €70 million (100% of the assets) over our acquisition price,
including the recovery of land transfer tax and financing costs

Reinvestment of proceeds provides opportunities to further diversify the portfolio and grow fee
income through additional joint ventures
“This strategic joint venture and significant acquisition of a high quality office portfolio in Germany allows us to
expand into one of the most highly sought-after real estate markets in the world. With Dream, we have found a
partner on the ground who is not only an experienced owner and operator of real estate but also understands our
unique requirements,” said Eunghan Park, Executive Managing Director of POBA.
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Joint Venture with POBA – Partnership Rationale & Key Terms
Long-term partnership

Long-term commitment – at least 5 years with a target term of 10 years

Joint investments in Europe with investment criteria similar to what we acquired over the past 18 months
No significant change in the investment and asset management structure

POBA is realizing significant tax savings utilizing our existing efficient Luxembourg structure

Dream Global will retain the asset management and acquisition management functions
Benefits for Dream Global

Economies of scale through diversification of asset base

Access to new growth opportunities through the reinvestment of proceeds within the joint venture

Opportunity to leverage the existing management platform on the ground
Benefits for POBA

Entry into the German market with a successful existing platform

Risk diversification through a 50/50 joint venture with a successful asset manager

Alignment of interest with a REIT which has a similar pension fund-like mentality
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Strong Fundamentals of the German Market
 Low interest rate environment
 Mortgage rates in Germany are among the lowest in recent history, as increased competition in the German lending
market has put pressure on credit spreads. The trend is expected to continue. For example, we recently received a
quote for a 10-year mortgage at an interest rate of 2.0%.
 German unemployment at 5.0%, among lowest in EU with employment levels at the highest point in
recent years
 Liquid and scalable real estate market
 Germany remains one of the most highly sought after real estate investment markets in Europe
 The total investment volume for commercial real estate reached €16.9 billion in Q1 & Q2 2014, a y/y increase of 34%
 Attractive spreads of ~400 bps between cap rate and borrowing rates for further acquisitions
 Large office stock with limited new construction
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Declining Unemployment Rate
German Employment Index
German Unemployment Rate
42,500
10
42,000
Unemployment rate (in %)
9
8
7
6
5
August 201 4
5.0%
Employment Figures (in 000s)
11
41,500
41,000
40,500
40,000
39,500
4
39,000
Jan-07 Jan-08 Jan-09 Jan-10
Source: ILO labour market statistics, Destatis
Jan-11
Jan-12 Jan-13 Jan-14
Source: Bloomberg
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3 Years of Improving Metrics
Market Capitalization
Index Inclusion
IFRS Asset Value
% of GRI from Deutsche Post
IPO (August 2011)
June 30, 2014
$520 million
$1.1 Billion
None
S&P/TSX Composite,
Capped REIT Index
$1.1 Billion
$2.6 Billion
85%
34%
63%
% of GRI in “Big 7 ” Office Markets
Yield
8.0%
8.4%
Estimated Cost of 5-year Debt
~4%
1.3%
7 consecutive quarters
of positive absorption
Leasing Record
No. of Dedicated Real Estate Professionals in Europe
14
40
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Acquisition Properties produce 60% of our NOI, are 98% occupied and
financed at an average interest rate of 2.5% for a term of 6.5 years
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Recent Accretive Acquisitions
Purchase
Price:
Cap rate:
Interest rate:
Debt term:
GLA:
Occupancy:
WALT:
My Falkenried, Hamburg
C$ 92 million
6.2%
2.33%
7-year fixed
220,000 sf
100%
4.0 years
Modern office property with over 40 tenants and
a significant retail component located in a very
desirable urban submarket of Hamburg.
Officium, Stuttgart
Purchase
Price:
Cap rate:
Interest rate:
Debt term:
GLA:
Occupancy:
WALT:
C$ 68 million
6.6%
1.99%
7.5-year fixed
268,000 sf
89%
4.0 years
Multi-tenant office property located in one of
the most active submarkets of Stuttgart with
excellent transportation links. We expect to
achieve NOI growth from leasing up the
vacancy in this asset.
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Strong Tenant Relationships and Increased Diversification of Tenant Base
Top 1 0 Tenants
Industry
Total
Annualized
GRI (%)
Credit
Rating
1 00
1
Postal Services /
Logistics
33.0
BBB+/Stable
2
Prof. Services / Legal
2.9
n/a
3
Insurance
2.8
AA-/Stable1
60
4
Energy/Technical
Equipment Services
2.2
n/a
40
5
Insurance
2.1
A+/Stable
20
6
Internet
2.0
AA/Stable
0
7
Financial Services
1 .8
A+/Stable
8
Financial Services
1 .8
A-
9
Education
1 .6
AAA/Stable2
10
Entertainment
1 .4
n/a
Sources: Bloomberg, Dream Asset Management, Standard & Poor’s, Fitch
80
IPO 201 1
Q4 201 2
Q4 201 3
Q4 201 4E
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Proactive Leasing Strategy to Maximize Value of Our Assets
Leasing activity (sf)
Historical Leasing and Occupancy Data
Occupancy (%)
300,000
89%
88%
250,000
87 %
86%
200,000
85%
150,000
84%
83%
100,000
82%
81 %
50,000
80%
0
7 9%
Q3 201 2
Q4 201 2
Q1 201 3
Q2 201 3
Q3 201 3
Q4 201 3
Q1 201 4
Q2 201 4
Our leasing pipeline remains robust, supported by good market fundamentals. Occupancy continued to improve to
87.9%in Q2 2014, the seventh consecutive quarter of occupancy growth and positive leasing absorption.
In addition, a high tenant retention rate of 76% in Q2 2014 added to the positive results.
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Financing expertise - we have built strong, long-term lender relationships with
a diversified pool of financial institutions
14
Debt Maturity Schedule
Debt Maturities (in $ millions)
Mortgage Maturities
Convertible Debentures (5.5%; Conv. Price: $13.00)
500
400
300
200
100
0
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As at August 31, 2014
In 2016, the term loan credit facility put in place at the time of the IPO comes due. Refinancing discussions
with lenders have commenced in a very attractive debt market.
The majority of the debt coming due in 2018 relates to the SEB portfolio acquired in 2013. These properties are
well located with high occupancy rates and are well positioned for attractive refinancing opportunities.
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Key Performance Indicators
Key indicators
Quarter ended
June 30, 201 4
OPERATING RESULTS ($‘000, except per unit amounts)
Investment property revenue
Net rental income
$ 67,51 4
47,07 9
Basic FFO/unit
0.24
Basic AFFO/unit
0.22
Distribution/unit
0.20
FINANCING
Weighted average interest rate
Interest coverage ratio
Weighted average term to maturity
Level of debt (debt-to-book value, net of cash)
3.33%
3.39 times
4.2 years
56%
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Year-over-year Improvement in Key Metrics
Key indicators
Six months ended
June 30, 201 4
Six months ended
June 30, 201 3
Change
$ 92,87 9
$ 63,502
46%
FFO/unit
$0.46
$0.42
1 0%
AFFO/unit
$0.43
$0.39
1 0%
93%
1 03%
1 0%
Occupancy
87.9%
85.7 %
3%
In-place rents (per sf/year)
€ 8.7 4
€ 8.1 4
7%
1 42,029
1 1 9,598
1 9%
OPERATING RESULTS ($‘000)
Net rental income (NOI)
AFFO Payout Ratio
Net leasing absorption
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Dream Global REIT is part of the Dream Group of Companies
Dream Unlimited Corp.
$1 4.7 Billion of Assets Under Management
Dream Office
REIT
Dream Global
REIT
Dream Industrial
REIT
Dream Hard Asset
Alternatives Trust
Largest Office REIT in
Canada
Largest Global REIT
in Canada
One of the Largest
Dedicated
Industrial REITs
in Canada
Fund for New
Opportunities for
Hard Asset
Investments
Dream platform provides:





Asset management capabilities
Transaction expertise
Capital markets expertise
Track record of development & value creation
Synergies realized across broad platform
Housing & Urban
Development
Land
Development
Renewable
Power
Dream has:
 20 year history in real estate and as a renewable
power developer, manager and investor
 Completed ~$20 billion of real estate and
alternative investment transactions
 1,000+ dedicated professionals in all disciplines
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Our Strong & Diverse Management Platform is Experienced, Diversified and
Focused on Execution
Jane Gavan
Chief Executive Officer
Industry Experience: 26 yrs
Acquisitions
Bruce Traversy
Head of Investments
Industry Experience: 25 yrs
Finance & Controlling Luxembourg
Cengiz Coelhan
Head of Finance & Controlling
Industry Experience: 8 yrs
Portfolio Management
Alexander Sannikov
Portfolio Manager
Industry Experience: 8 yrs
Acquisitions Germany
Kim Andersson
Investments
Industry Experience: 10 yrs
Rene Gulliver
Chief Financial Officer
Industry Experience: 35 yrs
Chief Investment Strategist Luxembourg
Gerwin Holland
Chief Investment Strategist
Industry Experience: 8 yrs
Leasing Germany
Michael Schwöbel
Head of Leasing
Industry Experience: 16 yrs
Asset Management Germany
Anne Braun
Head of Asset Management
Industry Experience: 12 yrs
Value Creation Germany
Mark Goehring
Strategic Assets Projects
Industry Experience: 23 yrs
A total of 40 real estate professionals are on the ground in Europe managing Dream Global REIT’s growing platform.
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Our senior leadership team in Europe understands local market conditions
Michael Schwöbel, Head of Leasing, Frankfurt
Michael is the Managing Director, Europe and head of leasing of Dream Global Advisors Germany GmbH,
Dream Global REIT’s German asset management platform. Michael oversees the advisory services for all
revenue generating operations in Germany including leasing, dispositions, repositioning and value add
initiatives. Prior to joining Dream, Michael was Head of Leasing, Germany of Fortress Investment Group
for 6 years and was in charge of several assignments at Deutsche Bank’s Corporate Real Estate division
for more than 8 years. Michael holds a degree in Business Administration and a postgraduate degree in
Real Estate Economics from the European Business School.
Anne Braun, Head of Asset Management, Frankfurt
Anne is the Managing Director, Europe and head of asset management for Dream Global REIT. Anne
oversees asset and property management services at Dream Global REIT. Prior to joining Dream, Anne
was a Partner at Cushman & Wakefield where she was responsible for property and asset management in
Germany. Prior to C&W, Anne worked for GE Real Estate in Germany. During her 12 years in the real
estate sector, Anne has been involved in major real estate transactions in Germany covering all aspects
from transaction, underwriting and operations. Anne studied business administration and holds an MBA
from the European Business School.
Gerwin Holland, Chief Investment Strategist, Luxembourg
Gerwin is Chief Investment Strategist of Dream Global REIT. Gerwin is responsible for sourcing
investment and joint venture opportunities, finding alternative sources of capital and building the asset
management platform for Dream Global REIT. Prior to joining Dream Global REIT, Gerwin was a Senior
Portfolio Manager with PGGM, a Dutch pension fund with €153 billion of assets under management. He
was responsible for PGGM’s investment in REITs in the U.S. and Canada. Gerwin holds a master degree
in International Finance Economics from the University of Amsterdam.
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Our “on-the-ground” Local Team provides Significant Depth and Expertise
across our offices in Europe with a Proven Track Record of Delivering Results
Dream Global REIT’s properties are locally managed by
a team of 40 professionals in six offices across Europe
 Operating history with the properties
 Highly experienced in leasing, operations and the
management of capital expenditures
 Well connected in their respective local markets
 Focus on strong tenant relationships
Dream Global’s s management offices are located in






Frankfurt (German head office)
Munich (Leasing)
Düsseldorf (Leasing)
Hamburg (Leasing)
Halle (Leasing)
Luxembourg (Finance & Compliance)
Hamburg
Düsseldorf
Luxembourg
●
Halle
Frankfurt
Munich
21
Appendix:
Case Study – Value Creation
Value Creation – Darmstadt
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Value Creation – Darmstadt
Darmstadt was one of the largest buildings in the initial portfolio. Subsequent to the DP termination, we leased a portion of the space and
worked quickly to transform the interior and exterior of the building to enhance the appeal of the asset to prospective tenants. In Q1 2014,
we leased an additional 72,000 sf at a term of 10 years and at an average rent that is almost 30% better than former DP rents. The
tenant is a large educational institution with strong solvency rating. The asset is now almost fully leased. With our leasing efforts at
Darmstadt, we expect the value of the asset to have increased by 30 – 40%.
Atrium - Before
Atrium - After WALT
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Value Creation – Darmstadt
Entrance - Before
Entrance - After
25
Value Creation – Darmstadt
Interior – After (Pitney Bowes Space)
Interior – Before (DP Space)
26
Value Creation – Darmstadt
Interior - Before
Interior - After
27
Value Creation – Bremen
28
Value Creation – Bremen
Another example of a large and successful repositioning project is our 170,000 sf office property in Bremen. After Deutsche Post
terminated space in 2012, the occupancy dropped to 70%. Our leasing team aggressively marketed the space, upgrading both the
front entrance and the lobby. These transformations have helped in leasing the space to a wide range of tenants, including 3,100 m2
to the City of Bremen. Today, the property is 94% leased with an average term of 9 years – with higher income, longer lease terms
and a better tenant mix driving cap rate compression and value appreciation.
29
Value Creation – Bremen
Lobby - Before
Lobby - After
30
Value Creation – Hildesheim
This property in Hildesheim consists of two separate plots. One plot, comprising approximately 4,900 m2 is dominated by a large office
building. The building, which was affected by Deutsche Post’s 2012 termination, has been fully leased to the State of Lower Saxony for 15
years. In addition, we are in the process of getting the property rezoned and are in negotiation to sell the smaller plot at the north end of
the property to a developer.
Main
building
Development
(planned hotel)
Development
planned
31
Value Creation – Mannheim
This property in Mannheim is a great example of a redevelopment opportunity in our current portfolio. The 21,100 m2
property is centrally located next to the main train station in Mannheim and rezoning for a mixed-use redevelopment
of office, hotel and residential space is currently discussed with the local authorities and is expected to be formalized by the
end of 2014.
Before
After
32
Value Creation – Humboldt Haus, Hamburg
We acquired Humboldt Haus in the fall of 2012. At the time of the acquisition, the property was 90% leased. A vacant unit in the property
had not been occupied for 6 years when we took over this asset. With our creative approach to leasing and staging the unit, the
property is now fully occupied. Through our active asset management, not only did we increase the cash flow, we also added over
€2.5 million of value.
90% occupied at the time of acquisition
33
33
Value Creation – Humboldt Haus, Hamburg
99% occupied after effective staging
34
Value creation – Feldmühleplatz
Feldmühleplatz in Düsseldorf was acquired in November 2013. It is a fully leased modern office complex located minutes
away from the central business district. The area around the property is the absolute top residential location in the city with
condominium prices as high as €10,000 per square meter, or over 300% of our purchase price.
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Value creation - Feldmühleplatz
will be provided by Barbara
36
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This slide presentation contains forward looking information within the meaning of applicable securities legislation.
Forward looking information is based on a number of assumptions and is subject to a number of risks and
uncertainties, many of which are beyond Dream Global REIT's control, that could cause actual results to differ
materially from those that are disclosed in or implied by such forward looking information. These risks and
uncertainties include, but are not limited to, general and local economic and business conditions; the financial
condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability
to lease vacant space. All forward looking information in this presentation speaks as of September 30, 2014. Dream
Global REIT does not undertake to update any such forward looking information whether as a result of new
information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is
disclosed in filings with securities regulators filed on SEDAR (www.sedar.com).
37
Jane Gavan
CEO
(416) 365-6572
[email protected]
Rene Gulliver
CFO
(416) 365-5447
[email protected]
Alexander Sannikov
Portfolio Manager
(416) 365-4106
[email protected]
Gerwin Holland
Chief Investment Strategist
+352-2736-8933
[email protected]