Consus announces a further material sale of development projects, resulting in additional significant deleveraging

- Upfront sale of a further 8 development projects with a GDV of EUR 2.0 billion

- Reduction in project finance debt of around EUR 390 million

- Sale results in material reduction in average interest rate

Consus Real Estate AG ("Consus") announced on 20 May 2020 a further significant asset sale as part of its deleveraging strategy. The total gross development value ("GDV") of the development projects disposed of in the transaction amounts to EUR 2.0 billion. The development projects have been sold at a premium to the market values appraised as of 31 December 2019. The parties have agreed not to disclose the selling price. Consus will reduce its project finance debt due to this transaction by around EUR 390 million.

Andreas Steyer, CEO of Consus Real Estate, commented "This further disposal continues to demonstrate the underlying value in Consus' projects that can be sold at a premium to market values ​​even in the current economic environment. With the sale of this portfolio, Consus has taken a major step in reducing our high cost debt and reducing the average cost of debt. With this and the previously announced divestment, Consus will have reduced net debt by well over EUR 1 billion."

Consus deleveraging accelerated

Consus has sold 8 development projects with a GDV of EUR 2.0 billion to Partners Immobilien Capital Management, a real estate fund focused on mixed-use real estate development schemes across Europe. This upfront sale will reduce project debt by around EUR 390 million, of which over EUR 210 million is high cost mezzanine debt. The average run-rate cost of debt pro forma for both divestments will fall to below 7.5% from 7.8%. The transaction, subject to closing adjustments and conditions, is expected to close in Q3 2020 and the parties have agreed not to disclose the selling price. In the medium term, a portion of the proceeds will be reinvested in new development projects.

The gross book asset value will decrease in a similar proportion to the GDV reduction, resulting in a net overall reduction in LTV, and the disposal will positively impact Net Debt/Adjusted EBITDA.

Consus portfolio post disposals

The divestment of these development projects further focuses Consus' portfolio on residential developments in top 9 cities, as the assets sold have a significantly greater proportion planned for commercial use. The projects are located in Bayreuth, Cologne, Hamburg, Munich, Offenbach and Passau. Consus continues to believe that German residential real estate in the top 9 cities will prove to be one of the most robust asset classes despite the Coronavirus pandemic.

Following the sale, and including the impact of the previously announced disposal, the proportion of Consus' GDV within the top 9 cities will have increased to 99%. In addition, in line with the strategy this transaction serves to strengthen the Group's focus on the development of residential real estate, with the percentage of residential increasing to 62%.

With this upfront sale and the previously announced upfront sale, Consus will have achieved total upfront sales year to date of GDV EUR 4.3 billion, and will have a remaining development portfolio with a GDV of EUR 8.0 billion. The proportion of the remaining portfolio that has been forward sold, is under LOI or in negotiation for a forward sale will increase materially to 32%, further reducing development and business risks. Of the eight projects sold in this transaction, all eight projects are in development with construction expected to start in 2021 or 2022. Six of the projects disposed of (Neuländer Quarree, Cologneo II, Covent Garden, Billwerder Neuer Deich, NY, Vitopia-Kampus Kaiserlei) were in the top 25 projects.

Outlook and guidance

The upfront sale of a further EUR 2.0 billion of GDV demonstrates the existing value in Consus projects in the current environment. Consus has now significantly exceeded the target of EUR 2 billion GDV of upfront sales for 2020, and will achieve very significant deleveraging from these disposals. The company continues to see ongoing interest in the company's developments, in particular in relation to upfront sales.

Consus continues to maintain its previously communicated guidance of an Adjusted EBITDA of approx. EUR 450m in 2020, an adjusted EBITDA margin of approx. 20% and a target Net Debt / adjusted EBITDA of around 3x in the medium term.

Consus does not assume at this point in time that the Coronavirus pandemic will have a material impact on the Group's business. Existing forward sales contracts are continuing largely unaffected; however, certain upfront sales and new forward sales are currently delayed and our plans, including these sales being completed as originally assumed, are dependent on the scale of negative impacts caused by the Coronavirus pandemic and the success of any counter measures. Although there is a risk to asset prices, Consus continues to believe that German residential real estate will prove to be one of the most robust asset classes despite the Coronavirus pandemic. Consus will continue to assess any potential macro-economic and industry-related impacts as well as any impact on the Group's business, either directly or from reduced economic visibility, and will update the market as appropriate.

Contact
Investor Relations: +49 30 96535790264
Email: investors@consus.ag

About Consus Real Estate AG

Consus Real Estate AG ("Consus"), with its headquarters in Berlin, is the leading real estate developer in the top 9 cities in Germany. As of 31 December 2019, Consus' development portfolio had a gross development value (GDV) of EUR 12.3 billion. Consus focuses on the development of neighbourhoods and standardised multi-storey residential construction, which are sold to institutional investors through forward sales. Due to its own construction expertise and the digitalisation of construction processes, Consus operates along the entire value chain of real estate development. Consus provides the realisation of projects from planning and execution to handover, property management and related services through its subsidiaries Consus RE AG and Consus Swiss Finance AG. The shares of Consus are included in the scale segment of the Frankfurt Stock Exchange and the m:access segment of the Munich Stock Exchange and are traded via XETRA in Frankfurt, among others.