INVL Baltic Real Estate

Investor Presentation • Aug 23, 2018

2018

INVL BALTIC REAL ESTATE THE FIRST LISTED REIT IN THE BALTIC STATES

INVESTMENT MANAGEMENT STRUCTURE

PROFESSIONAL TEAM

Experience (years)				Profile	Responsibilities
Vytautas Bakšinskas	RE investment	Manage ment	General team		RE mana gement	Finding investments	Finan cing	Supervi sion	Sales
Real Estate Fund Manager, Member of the Investment Committee	10+	7+	5+	• Prior to joining INVL Baltic Real Estate oversaw more than 100 000 sq. m. of space as head of the leasing division at Inreal. • Acquired extensive management experience working at a number of Inreal Valdymas companies.	✓	✓	✓	✓	✓
Andrius Daukšas Investment Manager, Member of the Investment Committee	7+	10+	5+	• More than a decade of professional experience in the investment management field • A member of the board in real estate management and production companies • Former director of the Treasury Department at Finasta and Investment Manager at Invalda INVL	✓	✓	✓	✓	✓
				Managing bodies
	Laura Križinauskienė			Darius Šulnis	Nerijus Drobavičius				Vytautas Plunksnis

Chief Executive Officer

Chairman of the Board

Member of the Board

Member of the Board

QUALITY PORTFOLIO OF ASSETS IN PRIME LOCATIONS

80% OF MANAGED REAL ESTATE OBJECTS BY ASSET VALUE ARE LOCATED IN THE CENTRAL PART OF VILNIUS

QUALITY ASSET PORTFOLIO

General occupancy rate

General occupancy rate upon elimination of Vilnius Gates effect

Object occupancy average (2013-2017)

Conservative portfolio valuation

	Relative fair market value as per Oberhaus and Newsec valuations (unless specified otherwise), average, EUR	Conditional market value according to Oberhaus and Newsec appraisal (unless otherwise determined), average, EUR/sq. m.
	30-04-2018	30-04-2018
IBC Business Centre	22 623 000	995
Vilnius Gates Business Centre	14 479 832	2040
Dommo BusinessPpark (according to Oberhaus appraisal)	8 181 500	640
Office building in the centre of Vilnius on Vilniaus St.	8 945 000	910
Žygis Business Centre	2 833 500	885
Other investment property (as per Oberhaus)	350 000	1270

CHANGES IN SHAREHOLDER STRUCTURE FOR MORE LIQUIDITY

CONSISTENT GROWTH STORY: THE FIRST LISTED REIT IN THE BALTICS

INCOME FORECAST AND CAPITAL STRUCTURE

Thousand euro	2016	2017	2018 I Half
Net operating income	2,002	2,522	1,691
Revaluation	147	2,326	849
Management and success fee	(819)	(645)	(234)
Other expenses/income	(279)	(153)	(172)
Operating profit	1,051	4,050	2,134
Net profit	4,507	3,577	1,907
Equity	31,073	33,861	34,058
NAV per share	2.3629	2.5749	2.59

Reduction of the
management fee from 1.5 to
1.0 per cent approved at the
shareholder's meeting on 29
December 2017.

Million euro	31 December 2017	30 June 2018	According to the appraisal at 30 April 2018, the value of
Investment properties	56.3	57.5	investment property grew by
Other assets	1.6	1.8	0.85 million euro in comparison to end-2017
Total assets:	58.0	59.3	data.
Equity	33.9	34.1	The actual debt ratio of 40%
Borrowings from credit institutions	21.7	23.1	is less than the target rate of
Other liabilities	2.4	2.1	50%.
Equity and liabilities	58.0	59.3

KEY TERMS OF THE OFFERING

Target return			Fees
Net IRR1	≥ 8%	Distribution fee:	0%
Payout2	5%	Management fee4 :

	Main terms		Supervision
Form	Closed-end real estate investment company	Supervision	Bank of Lithuania
	30 (+20) years from issuance of	Custody	SEB
Fund term	closed-end real estate investment company licence on 22 December 2016	Audit	PwC
Offer term3	End of 2018	the Nasdaq Baltic stock exchange
Process	First come first served
Size	Up to 2,893,000 shares (approx. EUR 7 million)
Price	Last publicly announced NAV/share

Distribution fee:	0%
Management fee4 :	• 1% of the weighted average market capitalization, paid quarterly.
Success fee:	• 20% of profit above 8% IRR which is the minimum required rate of return.
Supervision	Bank of Lithuania
Custody	SEB
Audit	PwC

Quarterly, semi-annual and annual reports are published on the Nasdaq Baltic stock exchange

¹Net IRR – annual internal rate of return after fees and profit sharing.

²Payout in the form of dividends is approved in the company's dividend policy.

³Open trading periods: from 2 May 2018 to 4 July 2018, from 18 August 2018 to 18 September 2018, from 2 November 2018 to 13 December 2018.

⁴Reduced on 5 January 2018 from 1.5% to 1.0% by decision of the management company.

	On the exchange
1.	Open a securities account at your bank.
2.	A bank employee, based on the customer's knowledge, experience and other information, will determine what financial instruments are suitable and provide information on investing.
3.	You can find out what the share purchase-sale price is from customer service staff at a bank branch, from a broker at the bank by telephone, or online through your e-banking service.
4.	Submit an order to buy shares, specifying how many and at what price.
5.	The price of shares on the exchange fluctuates with every transaction and depends on demand and supply in the market.
6.	When the transaction is completed, the shares that are bought will be recorded in the customer's securities account.

At a customer service office of INVL Finasta

1. A financial broker at INVL Finasta, based on the customer's knowledge, experience and other information, will determine what financial instruments are suitable and provide information on investing.

If the customer wishes to invest, during the meeting the broker

2. will have a securities account opened at Šiaulių Bankas and will make arrangements for the purchase transaction.

The share price for each stage of the offering is equal to the company's last published net asset value per share, in keeping

3. with the prospectus for this public offering of shares which the Bank of Lithuania approved on 23 April 2018 (by decision No. 241-70 of the Director of the Supervision Service).

WHAT TO DO WITH THE SHARES AFTER YOU BUY THEM

Shares that you have purchased will be safeguarded in your securities account at the bank, where you can always see their value. Public information about the value of the shares is also provided on INVL Baltic Real Estate's website.

Shares that you hold can be sold on the Nasdaq Vilnius exchange. To do so, you must contact the bank with the securities account where your INVL Baltic Real Estate shares were credited. Note that the price on the exchange is set based on the principles of supply and demand, thus it may fluctuate and is not known in advance.

As a shareholder of the company, you have the right to receive dividends that INVL Baltic Real Estate pays. They can be paid every year by decision of the general meeting of shareholders. If a decision to pay dividends is adopted, they will be automatically transferred to your account. More details about the dividend policy are available on the company's website.

For more about risks see on the Company's website.

Closed-end investment company	Investments in the shares of a closed-end investment company are associated with investment risk. The value of the company's shares can both rise and fall, and you may recover less than you invested or even lose all the money that was invested. Past results only show the changes in the value of the company's shares over a past period. Past results do not guarantee future performance.
	The value of investments in real estate may fluctuate in the short term depending on general economic conditions, real estate leasing and sale prices, and variations in supply and demand. Investments in real estate should be made for the medium or long term so that the investor can avoid the risk
Real estate	of short-term price fluctuations. Investments in real estate are associated with higher-than-average risk. If the company makes unprofitable investments or encounters other unfavourable circumstances (inability to pay creditors on time), bankruptcy proceedings may be launched against the company.
Redemption of shares	The redemption of shares is restricted, i.e., a shareholder may not demand the redemption of shares by the Company or by the management company which has assumed its management. Shareholders do, however, have the possibility of selling shares in the secondary market.

BRIEF OVERVIEW

INVL Baltic Real Estate's management company is INVL Asset Management.

The management company has been working with real estate portfolios for more than 14 years.

INVL Baltic Real Estate operates as a REIT (real estate investment trust) and its' managers have more than 10 years of experience in real estate management which they are successfully applying to increase the value of INVL Baltic Real Estate.

Established portfolio of assets An attractive investment

The portfolio comprises 5 main investment properties with a total value of EUR 58 million as of 30 June 2018.

The occupancy of the properties is stable and regularly exceeds 90%.*

Team Economic environment

The real estate market in Vilnius is characterized by high occupancy levels at commercial premises.**

Rental prices of commercial properties in prime locations are well

below those both in Central and Eastern Europe and Scandinavia.**

Properties in Vilnius typically offer a yield premium of 200-300 basis points over those in Central and Eastern Europe and Scandinavia.**

Rational use of debt:

• Target < 50%
• Actual 40%

Liquidity and transparency through listing on the Nasdaq Baltic

exchange.

An approved dividend policy and regular payment of dividends. The dividend yield proposed in the policy is 5% on the basis of the NAV per share at the end of 2017.

A target return to investors of 8%+:

• Dividends
• NAV growth

*Occupancy estimates for 2016-2017 excluding the Vilnus Gates business center which was under construction.

** BNP Paribas information, 2017 March 14

ALL RELEVANT INFORMATION IS AVAILABLE ON THE WEBSITE invl.com/bre

PROPERTIES

Ending lease agreements, %

Extended lease agreements, %

POTENTIAL OF THE PROPERTY

Commercial real estate property

Vilnius central business district

VILNIUS GATES BUSINESS CENTRE

Ending lease agreements, %

Extended lease agreements, %

Ending lease agreements, %

Extended lease agreements, %

POTENTIAL OF THE PROPERTY

GLA

Ending lease agreements, %

Extended lease agreements, %

3.8 WALT 2017

12 800 sq. m. GLA EUR 8 million Value of investment property 98% 2018 Q2 occupancy rate 99% Income from TOP 5 tenants 1.3 WALT 2017

Ending lease agreements, %

Extended lease agreements, %

POTENTIAL OF THE PROPERTY

Current regulations allow the development of up to 200 000 sq. m.

9 plots (58 ha in total) with infrastructure for the development of logistics or industrial objects

2018

INVL BALTIC REAL ESTATE THE FIRST LISTED REIT IN THE BALTICS