Brookfield Property Partners
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Brookfield Property Partners C O R P O R AT E P R O F I L E NOVEMBER 2018
Table of Contents
Overview of Brookfield Property Partners (“BPY”) Page 4
Organic Growth Page 11
Operating Segments Page 20
Developments and Redevelopments Page 32
Appendix – Structure and Governance Page 39
2
BPY is Brookfield Asset Management’s (“Brookfield”) primary vehicle
to make investments across all strategies in real estate
Our goal is to be the leading global owner and operator of
high-quality real estate, generating an
attractive total return for our unitholders comprised of:
1 2 3
Current yield supported 5% ‒ 8% annual Capital appreciation
by stable cash flow from distribution growth of our asset base
a diversified portfolio
of assets
3
Overview of Brookfield Property Partners
4
Global Owner, Developer and Operator of Diversified,
High-Quality Real Estate
Investment Portfolio Characteristics
1
$86B Core Office
TOTAL ASSETS • 150 premier office properties totaling 99 million
square feet (msf) in gateway markets around the world
1 as well as 11 msf of core office and multifamily
$28B development projects currently underway
UNITHOLDER EQUITY
Core Retail
• 125 best-in-class retail properties totaling 122 msf
throughout the United States
$0.315
QUARTERLY DISTRIBUTION / UNIT LP Investments
• High-quality assets with operational upside across
2 office, retail, multifamily, industrial, hospitality, triple net
6.0% lease, self storage, student housing and manufactured
housing sectors
DISTRIBUTION YIELD
1) As of September 30, 2018 and on a proportionate basis.
2) Based on BPY’s 9/28/18 closing price of $20.89 on the Nasdaq Stock Market. 5
Investment Segments
Stable cash flows on core portfolios enhanced by investment in opportunistic
strategies
Core Office and Core Retail LP Investments
Brookfield Place, New York Fashion Show Mall, Las Vegas Conrad Hotel, Seoul
Targeting 10% to 12% Total Returns Targeting 20% Total Returns
• Approximately 80% of BPY’s balance sheet • Approximately 20% of BPY’s
• Invested in high-quality, well-located trophy assets and balance sheet
development projects • Invested in mispriced
portfolios and/or properties
with significant value-add
6
Global Investor with Local Expertise
~$171B Total RE AUM1 | 30 Offices | ~17K Operating Employees2
CANADA EUROPE & MIDDLE EAST
$8.2B $28.4B
ASIA PACIFIC
UNITED STATES3
$12.5B
$119.3B
BRAZIL
$2.4B
1) At the Brookfield Property Group level which includes assets of BPY and Brookfield-managed funds.
2) Employee figures are as of December 31, 2017.
3) AUM in the Bahamas are included within our US AUM figure.
7
Proven Investment Approach
Value-oriented, counter-cyclical investors
Specialize in executing multi-faceted transactions that allow
us to acquire high-quality assets at a discount to replacement cost
Leverage our business units and operational expertise to enhance the
value of our investments
Flexibility to allocate capital to the sectors and geographies with the
best risk-adjusted returns at various points in the real estate cycle
Continually recycle capital from stabilized assets to higher-
yielding opportunities in order to build long-term value for unitholders
8
Conservative Financing Strategy
• We finance our investments predominantly with asset-level, non-recourse debt
• We raise debt in local currency with primarily fixed interest rates
• We source the lowest-cost capital to fund growth
‒ Recycle capital from stabilized assets
‒ Consider issuing equity if expected returns exceed our cost of capital
• We target a distribution payout ratio of 80% of Company Funds From Operations (“CFFO”)
which combined with realized gains from our LP investments allows us to retain sufficient cash
flow for tenant improvements, leasing costs and organic growth
• Our investment-grade corporate credit rating provides financing flexibility
The quality and diversification of our assets support our target of achieving long-term
proportionate debt-to-capital of up to 50%
9
Brookfield Property REIT (BPR)
Brookfield Property REIT is a publicly traded U.S. REIT (Nasdaq: BPR) externally managed by BAM. It is a subsidiary of
Brookfield Property Partners (BPY) and was created to offer economic equivalence to BPY in the form of a U.S. REIT security.
BPR Shares & BPY Units Share an Identical Economic Interest
BPR BPY Details
Distributions Distributions are identical in amount and timing
Class A BPR shares are exchangeable for a
Exchangeable N/A BPY unit or the equivalent value in cash
Liquidation Value Liquidations values are equalized
Voting control for both BPR and BPY is aligned
Voting Rights N/A as BPR’s majority shareholder is BPY
Delaware Bermuda-
Structure/Index As a U.S.-domiciled REIT, BPR is eligible for
Corp.; based LP;
Eligibility many equity indexes that exclude LPs
1099 Issuer K1 Issuer
BPY owns ~75% of the outstanding shares of
Majority Owner BPY BAM BPR and BAM owns ~53% of BPY
10Organic Growth
11BPY’s Unique Growth Drivers
Strong global operating capabilities enable us to acquire real estate in need
of leasing, capital or repositioning, to generate core-plus returns
Extensive development pipeline assembled over time in dynamic,
supply-constrained markets
Access to opportunistic real estate returns through ability to invest in
Brookfield-sponsored property funds
12Track Record of Earnings and Distribution Growth
$1.50+
$1.44 Earnings and distribution growth for
five consecutive years since launch
$1.36 9%
CAGR
$1.26
Annual CFFO growth of 9%
$1.18 $1.18 6%
$1.11 CAGR
$1.12
$1.06 Annual distribution growth of 6%
$1.00
Reduced payout ratio from 90%
of CFFO to our target of 80%
2014 2015 2016 2017 2018
CFFO Distribution (per unit)
13Growth in LP Investment Gains
$0.67
$0.66
We have earned realized gains from our
LP investments in private funds
In the early years, these gains were from
the sale of individual assets or smaller $0.37
portfolios
As these funds mature, and investment- $0.14
level business plans are executed, the $0.08
pace and size of realizations will
increase
2014 2015 2016 2017 LTM
Realized Gains on LP Investments (per unit)
14Future Earnings Growth
Achieve annual CFFO growth for the next 5 years with target of 7%-9%
$2.15+
Realize significant earnings from our LP investments including, on average, $500
million in annual realized gains
$1.70+
Earnings provide ample coverage for distributions
$1.45+
$1.26Earnings growth will support distribution growth in line with target of 5%-8%
annually
15Main Drivers of Earnings Growth
Annual CFFO growth between 2017 and 2022 continues to be driven by:
• Achieving same property growth of 2-3%
• Completion of active developments on time and budget:
In US$ millions Cumulative Development NOI
$1.18
$600
$500
$400
$300
$200
$100
$0
2017 2018 2019 2020 2021 2022
Office Retail Urban multifamily Condo sales
16Payout Ratio
Target payout ratio leaves sufficient retained cash to protect distribution levels, sustain
properties and fund future growth in support of our five-year business plan:
In US$ millions
2022
Forecasted CFFO $ 2,300
Annual realized gains from LP investments 600
Annual earnings $ 2,900
Distributions at target payout (1,800)
Available to maintain properties and fund growth $ 1,100
17Looking forward, we are positioned to
increase earnings from
leasing and development activities in our
core office and retail businesses...
and to realize value from the
capital we have invested in our LP investments
18BPY = Compelling Investment Opportunity
2022
25%
CAGR
$ 48 An investment today has the potential
$ 22 to offer a very attractive return to
15% shareholders
CAGR
$ 35 Yield backed by cash flow from a
$9 portfolio of high-quality assets
$ 55
$6 $6
Entry point at discount to average
$ 20 $ 20 $ 20 analyst NAV of $27.49 per unit
Potential for significant appreciation
Opportunity to further enhance return if
Today Narrowing Current
Discount1,2,3 Discount1,2 discount to NAV erodes
Investment Current Yield Appreciation
1) Using forecasted 2022 CFFO
2) Distributions assumed at 80% of forecasted 2022 CFFO
3) Using consensus NAV implied multiple
19Operating Segments
20Core Office Portfolio
Iconic assets in gateway markets
Darling Park, Sydney Brookfield Place, New York
Brookfield Place, Toronto Canary Wharf, London
21Core Office Portfolio
• 150 premier office properties totaling approximately 99 msf in gateway cities around the
globe, including: New York, London, Toronto, Los Angeles, Houston, Sydney, Washington, DC
and Berlin
• Portfolio is 92.9% leased with an average remaining lease term of 8.3 years
• Embedded 8.2% mark-to-market opportunity on expiring leases
• Properties generally financed with non-recourse, asset-level debt
• We offer an integrated, multifaceted real estate business with comprehensive operating
and real estate management capabilities
• Our diversified global structure gives us a competitive advantage in the marketplace as we
are able to leverage relationships across geographies and business lines
Of our top 20 office tenants, 11 are tenants in Brookfield buildings
in more than one city; 7 are tenants in at least three cities
22Core Retail Portfolio
Trophy retail assets that mirror the quality of our office properties
The Woodlands Mall, Houston Ala Moana, Honolulu
Jordan Creek, Des Moines Miami Design District
23Core Retail Portfolio
125 best-in-class malls and urban retail properties totaling over
122 msf throughout the United States
95.6% NOI-weighted occupancy
Initial rent spreads of 11.6% for leases commencing in the trailing 12
months
Highly productive stores with $744 NOI-weighted tenant sales/sf
24Class A+ Shopping Centers
• Our class A+ mall portfolio represents approximately 8% of the high-quality retail
space in the United States, including 3 of the top 5 assets.1 Although total retail
space in the U.S. is likely to contract in the coming years, high-quality malls continue to
demonstrate meaningful outperformance and serve as the centerpiece of all retail
activity in the U.S.
• The declining performance of traditional department stores has created opportunities to
recapture square footage within our existing centers and improve their productivity by
introducing more dining, entertainment and fitness venues as well as e-retailer ‘pop-up’
and permanent stores.
• Development and redevelopment initiatives in our core retail portfolio total
$1.7 billion of which $1.2 billion is currently under construction with a further $500 million
in the pipeline. The projects have expected ROIs of between 6-8%.
Inserting new technology into our malls has been a major driver to elevate the
shopping experience – from retail and dining to entertainment and leisure
1) Source: CNBC.com article from 1/29/18. 25E-commerce vs Brick-and-Mortar? NOT a Zero-Sum Game…
E-Commerce Brick-and-Mortar ONE Channel
Online-to-offline examples
Amazon Bonobos Rent the Runway
93% of all retail sales are owed all or in part to brick-and-mortar presence1
1) Source: U.S. Census Bureau 26LP Investments
Acquiring mispriced assets with upside to earn outsized returns
The Diplomat Resort & Spa, Florida BR7 Office Portfolio, Sao Paulo
Center Parcs, UK Roosevelt Landing, New York
27LP Investments
• Acquire high-quality assets at a discount to replacement cost or
intrinsic value
• Execute multifaceted transactions that utilize structuring
Invest on a Value Basis
capabilities
• Seek contrarian investments via market dislocations and other
inefficiencies
• Focus on geographies and sectors where Brookfield has
informational, operational and other competitive advantages
Leverage Brookfield
• Utilize Brookfield’s relationships to originate proprietary
Platform
investments
• Target large-scale investments
• Execute clearly defined strategies for operational improvement:
‒ Leasing: increasing occupancy and rental rates
Enhance Value through
Operating Capabilities ‒ Development: expanding or redeveloping/repositioning
properties
• Achieve opportunistic returns through NOI growth
28Case Study: IDI Gazeley projected to return 30% Gross IRR in 5 years
• Assembled a 42M SF global logistics business through the acquisition of 3 industrial
companies in North America and Europe
50M SF 16%
AREA LEASED RENT INCREASED
30M SF 88 – 95%
COMPLETED CHANGE IN OPERATING
DEVELOPMENT OCCUPANCY 2013-2017
30% 3.1x
PROJECTED PROJECTED
GROSS IRR GROSS MOC
29Case Study: Simply Self Storage returned 46% Gross IRR in 2.5 years
• Acquired 90-asset, 6.8M SF portfolio and operating company in early 2016 and grew
business to over 200 assets totaling ~16M SF
32%
VALUE INCREASED PSF
$1.3B $162M
GROSS SALE PRICE1 NET PROCEEDS TO BPY2
46% 2.6x
GROSS IRR GROSS MOC
1) Partial sale of business
2) Includes proceeds from portfolio refinancing following transaction
30Opportunistic Real Estate Funds Track Record
Total BPY Projected Projected
Fund Inception Equity Stake Gross IRR Gross MOC
RE Opportunity Fund I 2006 11.0% 1.9x
GGP Acquisition
RE Opportunity Fund II 2007 20.0% Closes 2.1x
RE Turnaround Fund 2009 38.6% 2.3x
Strategic Real Estate
2012 $4.5B 30% 25.0% 2.7x
Partners I
Strategic Real Estate
2015 $9.0B 25% 19.0% 2.2x
Partners II
Total 26.0% 2.2x
31Developments and Redevelopments
32Development Strategy
• We opportunistically pursue developments to:
‒ Earn premium risk-adjusted returns compared to acquisitions (~200-250 bps spread)
‒ Upgrade our portfolio with new, trophy assets in key strategic markets
• Development strategy seeks to limit risk:
‒ Typically secure anchor leases for 40% ‒ 50% of space before launching project
‒ Execute guaranteed maximum price contracts to reduce construction risk
‒ Bring in JV partners once project is substantially de-risked
‒ Limit developments to less than 10% of total assets
• Prominent, large-scale projects primarily in the high-growth markets of London and New York
City
• Active office and multifamily projects expected to produce approximately $320 million of
incremental NOI upon completion
334
Projects Delivered Over the Past 24 Months
4.2M SF
PREMIER
OFFICE SPACE
5 Manhattan West One Blue Slip
New York Brooklyn
1,200
APARTMENT
UNITS
Principal Place The Eugene London Wall Place
London New York London
345
Projects On Schedule for Delivery in 2019
5.6M SF
PREMIER
OFFICE SPACE
Camarillo ICD Brookfield Place 1 Bank Street
Los Angeles Dubai London
~3,500
APARTMENT
UNITS
655 New York Ave 100 Bishopsgate 1 Manhattan West
Washington DC London New York
35Active Development Projects
Date of
($M) Total Date of Accounting
Office % Pre-Leased SF 000s Cost1 Yield on Cost Completion Stabilization
655 New York Avenue, Washington, DC 71% 766 285 7% Q2 2019 Q3 2020
One Manhattan West, New York 84% 2,117 778 6% Q4 2019 Q3 2020
1 Bank Street, London 40% 715 335 7% Q3 2019 Q4 2020
100 Bishopsgate, London 67% 938 1,140 7% Q2 2019 Q2 2020
ICD Brookfield Place, Dubai 6% 1,104 342 11% Q3 2019 Q1 2021
Bay Adelaide North, Toronto 64% 820 386 6% Q1 2022 Q4 2022
Wood Wharf – Office, London 42% 423 163 8% Q2 2021 Q2 2021
Subtotal 58% 6,883 $3,429 7%
Multifamily
Camarillo (California) 413 127 7% Q4 2018 Q2 2019
Greenpoint Landing Bldg. G, New York 250 199 6% Q4 2018 Q4 2019
Studio Plaza, Silver Spring (Maryland) 343 106 7% Q2 2019 Q1 2020
Wood Wharf – 8 Water St. & 2 George St., London 371 197 5% Q4 2019 Q4 2020
Newfoundland, London 545 324 4% Q1 2020 Q1 2021
Greenpoint Landing Bldg. F, New York 310 358 6% Q3 2020 Q2 2021
Principal Place – Residential, London2 303 248 17% Q1 2019 Q1 2019
Southbank Place, London2 669 302 20% Q4 2019 Q4 2019
Wood Wharf – 10 Park Drive, London2 269 133 31% Q4 2019 Q4 2019
Wood Wharf – One Park Drive, London2 430 288 30% Q2 2021 Q2 2021
Subtotal 3,903 $2,282
Total Active Developments 10,786 $5,711
1) In US$ Millions and represents BPY’s share of investment.
2) Represents condominium/market sale developments. Anticipated return on cost and date of completion are presented instead of yield on cost and date of accounting 36
stabilization, respectively, for these developments.Redevelopment Strategy
We leverage our affiliated design, construction, operations, leasing and
real estate management teams to perform a 360-degree assessment
of a property’s refurbishment and repositioning potential
We time our initial capital investment to maximize returns
(e.g. upon an anchor tenant’s relocation announcement)
We are able to charge higher rents and subsequently
earn higher returns on our investment following the repositioning effort
Our integrated capabilities provide the opportunity to redevelop high-quality,
well-located assets that have leasing challenges or CapEx needs
37Case Study – 5 Manhattan West, New York
Acquisition Capital Levered IRR
$700M $350M 34%
450 W. 33rd St. 5 Manhattan West
Skin in the Owned parcels of undeveloped land adjacent to 450 W. 33rd St. since the 1980s and
Game acquisition opportunity required quick response
A Submarket Tenants seeking alternatives to expensive, aging midtown buildings are migrating to
on the Cusp areas more proximate to their employee populations
An Attractive With over 25 million sf of traditional HQ office product being delivered to the
Alternative submarket, 5MW’s ‘warehouse’ layout and vibe attracted tech and new media tenants
A Stunning A unique ‘new’ building centered at the nexus of Chelsea, traditional Midtown, and the
Transformation Hudson Yards District – New York City’s next great mixed-use neighborhood
38Appendix – Structure and Governance
39Corporate Structure
Brookfield Asset Management
(BAM)
30% 60% 53% 68%
Brookfield
Brookfield Renewable Brookfield Property Brookfield Business
Infrastructure
Partners Partners Partners
Partners
(BEP) (BPY) (BBU)
(BIP)
Core Office Core Retail LP Investments
Core office assets Class A Real estate opportunity funds
Canary Wharf U.S. Mall Value-add multifamily funds
Core-plus funds Portfolio Real estate finance funds
Other direct investments
40Governance
• BPY and BPR have an established Master Services Agreement with Brookfield
− Brookfield provides executive oversight of BPY/BPR and services relating to the origination of
acquisitions, financings, business planning and supervision of day-to-day management and
administration activities
− Management fee, on an annualized basis, equal to 0.5% of the total capitalization of BPY/BPR, subject
to a minimum fee of $50 million
− Equity enhancement distributions, on an annualized basis, equal to 1.25% of the increase in
BPY/BPR’s market capitalization over the initial capitalization of approximately $11.5 billion
− Credit applied for management fees paid on investment in Brookfield-sponsored funds
• Incentive distributions based upon increases in distributions paid to unitholders over pre-defined thresholds
− 15% participation by Brookfield in distributions over $1.10 per unit
− 25% participation by Brookfield in distributions over $1.20 per unit
− Credit applied for incentive fees paid on investments in Brookfield-sponsored funds
• BPY/BPR’s general partner has a majority of independent directors
BPY/BPR’s governance is structured to provide alignment of interests with unitholders
41Favorable Structure
• As a global real estate investor, we have structured BPY to provide flexibility to pursue its strategy and
to limit negative tax consequences to our unitholders
• BPY is a Bermuda-based, publicly-traded partnership that owns or has interests in holding corporations
primarily in the U.S., Canada, Australia, Western Europe, Brazil, India and South Korea
• Structure is favorable relative to Master Limited Partnerships (MLPs), and we are committed to
structuring our activities to avoid generating UBTI and ECI1
BPY’s Structure
Type of Entity Bermuda-based, publicly-traded partnership
UBTI1 No
ECI1 No
U.S. Tax Slip Issued1 K1
Canadian Tax Slip Issued1 T5013
1) BPY does not provide legal or tax advice to any third party and as such strongly recommends that each prospective investor review all documentation with their legal and
tax advisors.
42Contacts
Contact Title E-Mail Address Phone Number
Brian Kingston Chief Executive Officer brian.kingston@brookfield.com (212) 978-1646
Bryan Davis Chief Financial Officer bryan.davis@brookfield.com (212) 417-7166
Matt Cherry SVP, Investor Relations & Communications matthew.cherry@brookfield.com (212) 417-7488
43Important Cautionary Notes
All amounts are in U.S. dollars unless otherwise Factors that could cause actual results to differ materially will be similar to the historic investments presented herein
specified. Unless otherwise indicated, the statistical and from those contemplated or implied by forward-looking (because of economic conditions, the availability of
financial data in this document is presented as of statements include, but are not limited to: risks incidental investment opportunities or otherwise), that targeted
September 30, 2018. to the ownership and operation of real estate properties returns, diversification or asset allocations will be met or
including local real estate conditions; the impact or that an investment strategy or investment objectives will
This presentation contains “forward-looking information” unanticipated impact of general economic, political and be achieved.
within the meaning of applicable securities laws and market factors in the countries in which we do business;
regulations. Forward-looking statements include the ability to enter into new leases or renew leases on This presentation includes estimates regarding market
statements that are predictive in nature, depend upon or favorable terms; business competition; dependence on and industry data that is prepared based on its
refer to future events or conditions, include statements tenants’ financial condition; the use of debt to finance our management's knowledge and experience in the markets
regarding our operations, business, financial condition, business; the behavior of financial markets, including in which we operate, together with information obtained
expected financial results, performance, prospects, fluctuations in interest and foreign exchanges rates; from various sources, including publicly available
opportunities, priorities, targets, goals, ongoing uncertainties of real estate development or information and industry reports and publications. While
objectives, strategies and outlook, as well as the outlook redevelopment; global equity and capital markets and the we believe such information is reliable, we cannot
for North American and international economies for the availability of equity and debt financing and refinancing guarantee the accuracy or completeness of this
current fiscal year and subsequent periods, and include within these markets; risks relating to our insurance information and we have not independently verified any
words such as “expects,” “anticipates,” “plans”, “believes,” coverage; the possible impact of international conflicts third-party information.
“estimates”, “seeks,” “intends,” “targets,” “projects,” and other developments including terrorist acts; potential
“forecasts,” “likely,” or negative versions thereof and other environmental liabilities; changes in tax laws and other
similar expressions, or future or conditional verbs such as tax related risks; dependence on management personnel; This presentation makes reference to net operating
“may,” “will,” “should,” “would” and “could”. illiquidity of investments; the ability to complete and income (“NOI”), funds from operations (“FFO”), and
effectively integrate acquisitions into existing operations Company funds from operations (“CFFO”). NOI, FFO and
Forward-looking statements include, without limitation, and the ability to attain expected benefits therefrom; CFFO do not have any standardized meaning prescribed
statements about target earnings and distribution growth, operational and reputational risks; catastrophic events, by International Financial Reporting Standards (“IFRS”)
the growth potential of our existing and new investments, such as earthquakes and hurricanes; and other risks and and therefore may not be comparable to similar measures
return on invested capital, gains on mark-to-market factors detailed from time to time in our documents filed presented by other companies. The Partnership uses
releasing and occupancy, targeted same-store growth with the securities regulators in Canada and the United NOI, FFO and CFFO to assess its operating results.
and returns on redevelopment and development projects, States. These measures should not be used as alternatives to
the availability of suitable investment opportunities, and Net Income and other operating measures determined in
the availability of financing and our financing strategy. We caution that the foregoing list of important factors that accordance with IFRS but rather to provide supplemental
may affect future results is not exhaustive. When relying insights into performance. Further, these measures do
Although we believe that our anticipated future results, on our forward-looking statements or information, not represent liquidity measures or cash flow from
performance or achievements expressed or implied by investors and others should carefully consider the operations and are not intended to be representative of
the forward-looking statements and information are based foregoing factors and other uncertainties and potential the funds available for distribution to unitholders either in
upon reasonable assumptions and expectations, the events. Except as required by law, we undertake no aggregate or on a per unit basis, where presented.
reader should not place undue reliance on forward- obligation to publicly update or revise any forward-looking
looking statements and information because they involve statements or information, whether written or oral, that For further reference, specific definitions of NOI, FFO,
known and unknown risks, uncertainties and other may be as a result of new information, future events or and CFFO are available in the Partnership’s press
factors, many of which are beyond our control, which may otherwise. releases announcing its financial results each quarter.
cause our actual results, performance or achievements to In considering investment performance information
differ materially from anticipated future results, contained herein, prospective investors should bear in
performance or achievement expressed or implied by mind that past performance is not necessarily indicative
such forward-looking statements and information. of future results and there can be no assurance that
comparable results will be achieved, that an investment
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