Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial — H1 2024 Earnings Presentation
50 slides from Colonial Sfl Socimi Sa's earnings presentation, Jul 30, 2024
Slide 1: 2024 First Half Results
Colonial #1 2024 First Half Results July 30th, 2024 Top 1.5% Global 1H 2024 RESULTS | 1
Slide 2: Disclaimer
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Slide 3: Agenda
Agenda 01 Highlights 02 Financial Performance 03 Portfolio Management 04 Future Growth 1H 2024 RESULTS | 3
Slide 4: The Prime Asset Class outperforms due to a unique nature of demand & supply
01 Highlights The Prime Asset Class outperforms due to a unique nature of demand & supply Prime Asset Class with unique fundamentals … … delivers the strongest performance Two separate markets within the sector with different fundamentals Widening gap between best and the rest Our Market: Prime prop
Slide 5: Outstanding operating results with asset values stabilizing
01 Highlights Outstanding operating results with asset values stabilizing 1 Sustained GRI - Like for Like EPRA Earnings EPRA EPS +6.5% €92m +6% €17.0 cts +6% Cash Flow Growth + 7% in Paris & +9% Barcelona 2 Operational Rental Growth1 Release Spread2 Occupancy +6% in 6 months +9% Group 97.3% Outperfo
Slide 6: The best prime property delivers outperformance in rental levels
01 Highlights The best prime property delivers outperformance in rental levels Paris Madrid Barcelona Maximum rent signed Maximum rent signed Maximum rent signed 1,100 €/sqm/year 40 €/sqm/month 28 €/sqm/month Rental Rental Rental +14% +5% +2% growth1 Q2 2024 growth1 Q2 2024 growth1 Q2 2024 22@ 1. ER
Slide 7: Rental Growth is driving improved valuation outlook
01 Highlights Rental Growth is driving improved valuation outlook Rental growth drives Colonial’s portfolio valuation €11.3bn Portfolio €m +0.7% LFL growth +0.7% like-for-like Values bottoming Out 213 11,336 (130) 11,267 (152) Rental growth & Project Delivery offsetting limited cap rates increase Va
Slide 8: The start of a new cycle of urban transformation – Alpha X
01 Highlights The start of a new cycle of urban transformation – Alpha X Life Science/ Healthcare Urban Mixed-Use Business Campus UNGEARED IRR LEVERED IRR1at NTA UNGEARED IRR LEVERED IRR1at NTA UNGEARED IRR LEVERED IRR1at NTA UNGEARED IRR LEVERED IRR1at NTA > 7% > 11% > 9% > 13% > 9% > 13% > 9% > 13
Slide 9: Financial Performance
02 Financial Performance 1H 2024 RESULTS | 9
Slide 10: Colonial’s prime property strategy delivers strong growth in earnings
02 Financial Performance Colonial’s prime property strategy delivers strong growth in earnings Gross Rental Income EPRA Earnings EPRA EPS1 €m €m €cts/share +6.5% +10% LFL Continued 192 Operations1 +10% 92 Continued 87 Operations1 183 +6% +5% Vs. Vs. 06/23 17 +6% 06/23 16 Vs. 06/23 06/23 06/24 06/23
Slide 11: Gross rental income growth on the back of core portfolio & project deliveries
02 Financial Performance Gross rental income growth on the back of core portfolio & project deliveries Gross Rental Income Variance Gross Rental Income Growth (%) €m Core Portfolio +6% +6% Like for like Alpha +12% Delivery of Projects Delivery of +6% +6% Projects 11 (13) Like for like1 Disposals & O
Slide 12: Solid Gross Rental Income like for like growth through superior pricing power
02 Financial Performance Solid Gross Rental Income like for like growth through superior pricing power Gross Rental Income Variance (%) Gross Rental Income Like for Like1 Variance €m Total Like-for-Like1 +6.5% +2.0% +3.1% +1.3% like for like 181 Group +5% +6.5% 2 5 170 3 Paris +14% +7% Madrid (16%)
Slide 13: Strong growth in EPRA EPS - acceleration towards upper range of guidance
02 Financial Performance Strong growth in EPRA EPS - acceleration towards upper range of guidance EPRA Earnings EPRA EPS €m €cts/share 12 (4) +10% 92 Continued Operations1 (3) +6% 17 87 16 +6% Vs. 06/23 06/23 06/24 Recurring Portfolio SG&A, Discontinued Recurring 2024 EPS Guidance Profit 06/23 Conti
Slide 14: Gross Asset Values improving
02 Financial Performance Gross Asset Values improving Gross Asset Values GAV Like For like Variance Pricing Power & Project Deliveries offsetting Rates Group GAV Like for like: +0.7% €m +0.7% like-for-like Valuation GAV Variance Capital Yield Exp. Value Yield1 vs peak 1H22 6 months - Cap Rate - 213
Slide 15: Rental growth driving NTA stabilisation
02 Financial Performance Rental growth driving NTA stabilisation Net Tangible Assets: €9.66/share (€9.93 / share pre dividend) Net Tangible Assets - value variance €/share NTA var. pre DPS (0.2%) Recurrent Earnings +2% 0.17 Alpha +5% 0.34 9.95 9.93 Rental growth & +3% 9.66 Project Delivery (0.53) (0
Slide 16: Strengthened equity base by €622m at premium to share price
02 Financial Performance Strengthened equity base by €622m at premium to share price Capital increase at premium to share price Significant increase in Shareholder Equity (NTA) Limited dilution in NTA per share €m €/share NTA pre 9.95 9.93 9.57 5,839 DPS 622 5,372 0.27 0.27 DPS 5,217 9.66 (10) 9.30
Slide 17: Significant debt and leverage reduction with enhanced liquidity
02 Financial Performance Significant debt and leverage reduction with enhanced liquidity Significant net debt reduction in 6 months Enhanced liquidity & improved maturities Loan To Value €bn €bn % 4.9 4.9 3.5 LTV 39.5% 40.5% 1.8x incl. transf. €0.5bn Coverage costs 3.0 36.7% 2.9 24-26 Debt Maturitie
Slide 18: Financial costs under control with 100% debt at fixed rate
02 Financial Performance Financial costs under control with 100% debt at fixed rate Future Stable Financial Cost Debt fully hedged for the next 4 years 2024-2026 Future cost of debt <2.5% Fixed / Hedged Debt1 1.7% 1.8% 1.7% 100% 97% 98% 98% 12/22 12/23 03/24 12/24 12/25 12/26 2024 2025 2026 2027 Not
Slide 19: Enhanced financial strength based on high ESG standards
02 Financial Performance Enhanced financial strength based on high ESG standards Renewal of €1.9bn of Credit Facilities Active liability management with better conditions based on ESG metrics • Two new debt placements totaling €200m, > Renewal of a €1bn with maturity extension of 5+1+1 years enlargi
Slide 20: Portfolio Management
03 Portfolio Management 1H 2024 RESULTS | 20
Slide 21: Our premium assets deliver strong letting performance…
03 Portfolio Management Our premium assets deliver strong letting performance… Strong Letting Performance… ... with prime properties capturing the highest rents in the market €m sqm >1,100 >1,000 >1,000 €/sqm/y €/sqm/y €/sqm/y Barcelona 45,843 Paris CÉZANNE SH EDOUARD VII #CLOUD x2.3 Paris 8 Paris 9
Slide 22: Prime portfolio with strong occupancy profile outperforming the market
03 Portfolio Management Prime portfolio with strong occupancy profile outperforming the market Our prime portfolio delivers maximum occupancy levels… … outperforming the market in every city 97.3% +20 100% Paris 97.1% bps 100% 100% 100% 100% 100% 4 98% 100% 100% 95.7% 100% 100% 12/22 12/23 06/24 100
Slide 23: Strong pricing power - letting performance achieving record rental levels
03 Portfolio Management Strong pricing power - letting performance achieving record rental levels Solid Release ERV Indexation Spread1 Growth2 Paris Madrid Maximum rent signed Maximum rent signed 1,100 €/sqm/year 40 €/sqm/month Group +3% +9% +6% Paris1 +4% +22% +10% Madrid +1% (1%) +4% Barcelona +2%
Slide 24: Project delivery - Madnum has strong momentum
03 Portfolio Management Project delivery - Madnum has strong momentum Additional rental growth & Capital Value High Rental €19m >8% Increase New Rents Yield On cost Almost 2H 2024 €15m Delivered Delivery Pending Capex Strong commercial interest prior to delivery Large Scale 56,000sqm 4,000 sqm Proje
Slide 25: Clear Leadership on ESG & Decarbonization
03 Portfolio Management Clear Leadership on ESG & Decarbonization Colonial’s Sustainable Strategy Awarded Internationally Highest rankings across ratings Financial times and Statista: “Colonial as Time: “Colonial as one of the World’s most 5 STAR – 4th year in a row one of Europe`s Climate leaders 2
Slide 26: Future Growth
04 Future Growth 1H 2024 RESULTS | 26
Slide 27: We delivered strong EPS growth on the back of a multi-layer growth platform
04 Future Growth We delivered strong EPS growth on the back of a multi-layer growth platform 1 Inflation hedge Revenue EPRA EPRA EPS Earnings 2 Rental Growth €192m €92m €17 Cts./share 3 Project Pipeline +6.5% +6% +6% like for like YoY YoY YoY 4 Acquisitions & +10% +10% Prime Factory Continued Contin
Slide 28: Bifurcation - The best prime property delivers the highest rental growth
04 Future Growth Bifurcation - The best prime property delivers the highest rental growth … PARIS - Office rental market MADRID - Office rental market Market rents (€/sqm/y) Market rents (€/sqm/m) Colonial’s playing field Colonial’s playing field Prime Prime CBD CBD Future Outlook Future Outlook 1,1
Slide 29: ... and outperforms the market on occupancy
04 Future Growth ... and outperforms the market on occupancy Paris Madrid Barcelona Colonial 100% Colonial 96% Colonial CBD 99% 98% 86% CBD Market CBD Market 96% Colonial 94% La Défense Market1 86% Outside M-30 82% CBD Market Outside City Center 81% 100% 76% 91% 100% 100% 100% 90% 100% 88% 99% 100%
Slide 30: Colonial’s prime property delivers operational outperformance
04 Future Growth Colonial’s prime property delivers operational outperformance Gross Rental Income GRI Like For Like Occupancy YoY growth YoY growth % Colonial Colonial 4.7% Colonial 6.5% Colonial 97.3% Colonial Colonial Peer Merlin 4.4% Peer 6.5% 96.1% Covivio Peer Merlin Peer Ic ade 3.7% Peer 6.3%
Slide 31: Our Prime Assets are leading the market in value stabilization
04 Future Growth Our Prime Assets are leading the market in value stabilization GAV like for like Asset Scarcity of prime central assets has boosted - 6 months - Class rental Growth for urban assets Colonial +0.7% Colonial Prime Paris CBD rental dynamics ▪ Availability for Grade A product in CBD is
Slide 32: Rental growth driving an uplift in portfolio valuation
04 Future Growth Rental growth driving an uplift in portfolio valuation Gross asset value Like for Like - % Values bottoming Out 6% Rental growth & Project Delivery 1% 1% offsetting limited cap rates increase 12/21 12/22 12/23 06/24 Rental Growth and Projects - Alpha (9%) Dominant value drivers goin
Slide 33: Growing demand for premium space in prime locations
04 Future Growth Growing demand for premium space in prime locations Demand for prime with increasing momentum • CBD prime locations with strong connectivity & services ▪ Transport links & efficient commuting Louvre Saint-Honoré Prime Retail ▪ Amenities/ Terraces/ Wifi ▪ City Center locations with a
Slide 34: We are well positioned to serve evolving client needs through Urban Transformation
04 Future Growth We are well positioned to serve evolving client needs through Urban Transformation Alpha X: substantial value creation from urban Mixed use approach leads to best financial and strategic mixed use pipeline outcomes > 9% > 9% ungeared ungeared IRR IRR • Addressing market trends - wha
Slide 35: A new urban transformation project pipeline with an ungeared IRR of +9%
04 Future Growth A new urban transformation project pipeline with an ungeared IRR of +9% Alpha X Project pipeline - Colonial’s new source of growth Capital Value > 9% > 9% ungeared ungeared > 9% creation IRR IRR ungeared €1.4-1.6bn IRR +€0.4- > 13% > 13% €1.03bn 0.6bn levered2 levered2 > 13% IRR at
Slide 36: Our asset management expertise provides rental growth & value extraction
04 Future Growth Our asset management expertise provides rental growth & value extraction Alpha X - Office Portfolio Alpha X – Living Portfolio Haussmann St-Augustin Diagonal 197 Madrid & Barcelona – 20,000 sqm Spain – 55,000 sqm Prime CBD – 12,000 sqm Barcelona 22@ – 15,000 sqm Cash Flow & Cash Flo
Slide 37: Acceleration of Rental Growth & Value Creation
04 Future Growth Acceleration of Rental Growth & Value Creation Gross Rental Income1 Several sources of Cash Flow Growth & Value Creation €m I Projects 17.800 24.000 46.900 22.000 sqm sqm sqm sqm IV Sancho de Ávila Condorcet Santa Hortensia Scope Barcelona – 22@ Paris – City centre Madrid – City cen
Slide 38: Strategy & Outlook
04 Future Growth Strategy & Outlook We deliver profitable growth through premium space in prime locations An attractive Growth Profile in Rents 1 Colonial achieves another strong set of financial results through superior €m like for like growth and cash flow from delivered projects 2 Our Prime Prope
Slide 39: Thank You
THANK YOU https://www.inmocolonial.com/en/shareholders-and-investors 1H 2024 RESULTS | 39
Slide 40: Appendices: Profit & Loss Account
Appendices PROFIT & LOSS ACCOUNT GROSS RENTAL INCOME NET RENTAL INCOME €m €m Results analysis - €m 1H 2024 1H 2023 +6.5% Like- 192 for-like Gross Rents 192 183 183 178 +5% Net operating expenses(*) (7) (5) YoY Overheads (28) (23) +5% 170 YoY Recurring EBITDA 157 156 Recurring financial result (41) (
Slide 41: One of the highest occupancy ratios in the sector thanks to its prime positioning
Appendices One of the highest occupancy ratios in the sector thanks to its prime positioning Group Occupancy Group Occupancy By Markets 12/23 06/24 Var 97.3% 97.1% +16 TOTAL GROUP 97.1% 97.3% bps 95.7% PARIS (4) 99.8% 99.8% bps (14) MADRID 96.2% 96.0% bps +137 BARCELONA 84.5% 85.8% bps 12/22 12/23 0
Slide 42: Colonial has a healthy level of 2.7% availability of top-quality product
Appendices Colonial has a healthy level of 2.7% availability of top-quality product Group EPRA Vacancy Paris Barcelona 100% 100% 90% 100% 88% 99% 100% 81% 100% 100% 100% 100% 100% 4 98% 100% 100% 100% 100% 100% 0.1% Paris CBD 100% 100% 100% 100% 100% Proje ct 100% 4.3% Plaza 0.3% Madrid CBD 100% Cat
Slide 43: Extension of Debt Maturities
Appendices EXTENSION OF DEBT MATURITIES A Solid Financial Structure Maturity profile of debt facilities - €m 31/12/2023 30/06/2024 50%1 of debt €4,864m €4,892m Net Debt maturing >2028 39.5%2 36.7%2 LTV Total Facilities €2,570m €2,570m Maturities covered Cash €438m €425m by current liquidity Liquidit
Slide 44: New Project Pipeline with an ungeared IRR of more than +9%
Appendices New Project Pipeline with an ungeared IRR of more than +9% > 9% > 9% ungeared ungeared Life Science/ Urban Life Science/ Urban IRR IRR Healthcare Mixed use Healthcare Mixed use 11% 10% 61% Business > 13% > 13% 59% Campus levered2 levered2 €1bn €64m IRR at NTA IRR at NTA Total Cost Busines
Slide 45: Value creation through urban transformation on the back of a proven track record
Appendices Value creation through urban transformation on the back of a proven track record Alpha X - value creation potential Strong track record of delivered value creation Capital Value creation Capital Value €2.3bn creation +€1bn €1.4-1.6bn +€0.4- 0.6bn €1.3bn +77% €1.03bn Capex +45% Capex Curre
Slide 46: Significant growth profile at adjusted Risk Return
Appendices Significant growth profile at adjusted Risk Return Rental losses from disposals offset by revenue growth Significant Additional Revenue Growth Annualized Topped-up GRI (€m) More than €150m of growth to be captured >565 50 32 82 411 401 47 401 (20) (12) (25) Passing 2023 Sta. Condorcet & G
Slide 47: Additional future growth on the back of capital recycling
Appendices Additional future growth on the back of capital recycling More than €700m divested – 15 Assets Ongoing flight to quality through active capital allocation 2017 Alpha III 2018IV Alpha 2019 2020V Alpha 2021VI Alpha 2022VII Alpha 2023 2024 1,000 4Q23-2024 786 Disposal Reloading Program Prime
Slide 48: Paris: Latest Market transactions
Appendices Latest Market transactions Asset Area Price GLA Cap. Value 150 Champs-Elysées CBD €1,000m 18,000 sqm €55,556sqm (4Q 2023) 101 Champs-Elysées CBD €146m 4,300 sqm €34,000/sqm (2Q 2023) 10 Rue de Bassano CBD €48m 1,750 sqm €27,429/sqm (1Q 2024) PARIS 21-23 Rue de la Ville l'Évêque CBD €100m
Slide 49: Madrid and Barcelona: Latest Market transactions
Appendices Latest Market transactions Asset Area Price GLA Cap. Value Francisco Gervás 10 City Center €60m 8,000 sqm €7,475/sqm (1Q 2024) MADRID Batalla del Salado 5 City Center €60m 8,100 sqm €7,407/sqm (1Q 2024) Portal de l’Àngel 40* (4Q 2022) City Center €105m 4,400 sqm €23,683/sqm * Includes Off
Slide 50: www.inmocolonial.com
www.inmocolonial.com © 2024 Colonial 1H 2024 RESULTS | 50
Inmobiliaria Colonial — H1 2024 Earnings Presentation on 6ix