Stoneweg European Stapled Trust · SGX:SEB
Stoneweg European Stapled Trust — Cromwell European REIT — Q2 2018 Earnings Presentation
59 slides from Stoneweg European Stapled Trust's earnings presentation, Aug 13, 2018
Slide 1: Cromwell European REIT Results Presentation
CROMWELL EUROPEAN REIT RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND THE FINANCIAL PERIOD FROM 30 NOVEMBER 2017 TO 30 JUNE 2018 13 August 2018
Slide 2: Disclaimer
Disclaimer This presentation shall be read in conjunction with Cromwell European REIT’s (“CEREIT”) financial results announcement dated 13 August 2018 published on SGX Net. This presentation is for information purposes only and does not constitute or form part of an offer, invitation or solicitation
Slide 3: Investment Case – Focus on Yield and Growth
Cromwell European REIT Investment Case – Focus on Yield and Growth € 0.65 Effective 7.2% Annualised Distribution Yield (at current Unit price)1 Cromwell European REIT (“CEREIT”) successfully debuted on 30 November 2017 € 0.60 and has delivered above the IPO Forecast2 € 1.4 billion Diversified and
Slide 4: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Portfolio Optimisation and Investment Strategy 4 Asset Management Update 5 Key Takeaways and Priorities 6 Appendix RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND 4 THE FINANCIAL PERIOD FROM 30 NOVEMBER 2017 TO 30 JUNE 2018
Slide 5: Key Highlights
EUROPEAN REIT Key Highlights
Slide 6: Key Reporting Period Highlights
Key Reporting Period Highlights Ongoing focus on meeting and exceeding IPO Forecast1 Declared DPU of 2.53 cents2 for Reporting Period Maiden Distribution Income available for distribution up 3.0% Declared Annualised distribution yield of 7.9%3 DPU Up Achieved better leasing incomes, resultin
Slide 7: Key 2Q 2018 Highlights
Key 2Q 2018 Highlights Proactive portfolio strategy execution Focused on organic value creation Entered into a settlement agreement with respect to the deferred consideration for Parc Des Docks that resulted in a portfolio valuation uplift of € 12 million and a reduction in statutory gearing by
Slide 8: Key 2Q 2018 Highlights – Cont’d
Key 2Q 2018 Highlights – Cont’d Inclusion in the MSCI Singapore Small Cap Index A constituent on MSCI Singapore Small Cap Index since 1 June 2018 Increases attraction to a broader group of investors seeking to gain exposure to major European real estate markets and enhance liquidity Sustainabili
Slide 9: Financial Performance
EUROPEAN REIT Financial Performance
Slide 10: Key Reporting Period Highlights
Key Reporting Period Highlights Exceeded IPO Forecast for all key performance metrics for Reporting Period1 Net Property Income2 (€ ‘000) NTA per Unit2,3,4 (€) € ‘000 € ‘000 47,743 0.580 0.570 47,500 46,303 46,500 0.560 45,500 0.540 0.532 44,500 43,500 0.520 42,500 0.500 41,500 IPO Forecast Actual I
Slide 11: Total Return and Distribution Exceed IPO Forecast
Total Return and Distribution Exceed IPO Forecast All key performance metrics exceed IPO Forecast for the Reporting Period Gross revenue € 72.8 million since IPO, up 2.2% compared to IPO Forecast € 31.8 million for 2Q 2018, up 3.9% compared to IPO Forecast for the same period Net property in
Slide 12: Net Property Income Exceeded IPO Forecast by 3.1%
Net Property Income Exceeded IPO Forecast by 3.1%1 Well-diversified portfolio with balanced mix of asset classes Net Property income breakdown by asset class Net property income breakdown by country € ‘000 € ‘000 TOTAL: 50,000 TOTAL: 50,000 TOTAL: TOTAL: 47,743 47,743 46,303 46,303 3,296 6.9% 45,000
Slide 13: Balance Sheet – Aggregate Gearing Reduced to 33.9%
Balance Sheet – Aggregate Gearing Reduced to 33.9% Liquidity position remains strong Total asset value up by 2.1% while aggregate leverage is reduced by 1.2 p.p. to 33.9% NTA per unit up by 2.1% to € 0.57 Cash and cash equivalents stand at € 53.5 million Distributable Income declared at € 40
Slide 14: Responsible Capital Management
Responsible Capital Management Well-managed debt book delivering low debt cost and significant interest cover Aggregate leverage stands at 33.9%, well below the regulatory requirements of 45%1 Annualised cost of debt (excluding any upfront fees) stands at ~ 1.46% p.a. (as at 30 June 2018) Inte
Slide 15: Debt Maturity Profile
Debt Maturity Profile Pan-European debt facilities are well-diversified across lenders and jurisdictions, allowing for full operational flexibility Weighted Average Debt Expiry (“WADE”) of 3.61 years as at 30 June 2018 reflects secured debt arrangements in the medium term Weighted average term t
Slide 16: CEREIT Declares Inaugural Distribution
CEREIT Declares Inaugural Distribution Distribution Timetable Notice of Books Closure Date 13 August 2018 Last Day of Trading on a “cum” Basis 16 August 2018 Ex-Date 17 August 2018 Books Closure Date 21 August 2018 Distribution Payment Date 28 September 2018 Distribution Amount per Unit (in Euro Cen
Slide 17: Portfolio Optimisation and Investment Strategy
Portfolio Optimisation and Investment Strategy
Slide 18: Portfolio Overview
Portfolio Overview Unique opportunity to invest in scale and diversification across Europe Properties1 75 Denmark Properties 13 Occupancy Rate (by lettable area)1,3 88.7% Lettable Area (sqm) 151,483 Valuation (€ million)2,4 1,390.4 Valuation (€ million) 81.4 WALE1 / WALB1 5.0 years / 4.1 years % of
Slide 19: High-Quality and Diversified Tenant Base
High-Quality and Diversified Tenant Base Diversified tenant mix with top 10 tenants representing 41% of portfolio Total No. of Leases as at 30 June 2018 797 Tenant trade sector breakdown by headline rent1 Total. No. of Tenants as at 30 June 2018 720 8.4% Tenant Retention Rate from 1 April 2018 to 30
Slide 20: Focused on European Office and Light Industrial Sectors
Focused on European Office and Light Industrial Sectors Expected to benefit from improving fundamentals and business sentiment in Europe Italy and Netherlands Office Pan-European Light industrial / Logistics Piazza Affari, Milan Central Plaza, Rotterdam Parc Des Docks, Paris Bischofscheim, Frankfurt
Slide 21: Completed Acquisition of Office Property in Ivrea, Italy
Completed Acquisition of Office Property in Ivrea, Italy Via Jervis 9, Ivrea, Italy Demonstrates strength of pipeline sourcing capabilities Complements resilient Italian office portfolio and diversify tenant base with Vodafone as blue-chip tenant Transaction completed on 27 June 2018 Property
Slide 22: Settlement of Deferred Consideration for Parc Des Docks
Settlement of Deferred Consideration for Parc Des Docks Parc Des Docks, Paris, France Entered into a settlement agreement with respect to the deferred consideration for Parc Des Docks that resulted in: Lump-sum payment of € 6 million to the sellers, representing 50% savings as compared to the €
Slide 23: Asset Management Update
CROMWELL EUROPEAN REIT Asset Management Update
Slide 24: Stable Occupancy and Proactive Leasing
Stable Occupancy and Proactive Leasing Portfolio occupancy stable, moving by 1.0 p.p. to 88.7%1 Better leasing outcomes through “barbell approach” to portfolio management with growth provided by light industrial/logistics sector and stability provided by office sector 88.7% occupancy rate as at
Slide 25: Office Sector – Overview
Office Sector – Overview Strong sector performance in Italian office portfolio Italian office portfolio performed above expectations due to savings in letting fees and better than expected leasing outcomes, particularly at Piazza Affari, Milan and Milanofiori, Assago Total 30-Nov-17 to 1-Apr-18 to
Slide 26: Office Sector – Occupancy and Leases
Office Sector – Occupancy and Leases Strong sector performance in Italian office portfolio Key focus on Haagse Poort, The Hague where CB&I exercised its right to surrender 3,295 sqm on 31 March 2018 and a further 3,295 sqm on 31 December 2018. On-going discussions with Nationale-Nederlanden for ex
Slide 27: Office Sector – Leasing & Asset Enhancement Initiatives
Office Sector – Leasing & Asset Enhancement Initiatives Netherlands Central Plaza, Rotterdam: Coolblue signed a new lease for existing 9,796 sqm at a headline rent of approximately € 2 million from 1 January 2019 for 7.5 years Haagse Poort, The Hague: Upgrade of climate control to commence in Ju
Slide 28: Light Industrial / Logistics Sector – Overview
Light Industrial / Logistics Sector – Overview Light industrial portfolios in France and the Netherlands outperform France and the Netherlands light industrial portfolios delivered 2Q 2018 NPI performance of 7.4% above IPO Forecast, with positive leasing activity resulting in an increase in occupa
Slide 29: Light Industrial / Logistics Sector – Occupancies and Leases
Light Industrial / Logistics Sector – Occupancies and Leases Light industrial portfolio in France outperforms Light industrial portfolio in France benefited from better-than-expected leasing outcomes and successful leasing and tenant retention efforts Expected departure of tenant in Germany led
Slide 30: Light Industrial / Logistics Leasing & Asset Enhancement Initiatives
Light Industrial / Logistics Properties Sector Leasing & Asset Enhancement Initiatives France Parc du Bois du Tambour, Nancy Gondreville: enhancement works related to a new major lease of c. € 1.5 million are continuing with an expected completion in 3Q 2018 A land tax review has been conducted
Slide 31: Key Takeaways and Priorities
Key Takeaways and Priorities
Slide 32: Key Results Takeaways
Key Results Takeaways Met and exceeded IPO Forecast Declared DPU of 2.53 Euro cents for the Reporting Period Outperformed all key performance metrics Providing resilient income through diversified and well-leased up portfolio Experienced real estate team is executing on asset strategy and deli
Slide 33: Key Management Priorities for the Year Ahead
Key Management Priorities for the Year Ahead Delivering on IPO Forecast through effective business strategy execution Meeting and exceeding IPO Forecast Unlocking asset value through proactive approach to acquisitions and divestments Providing clear visibility for investors to our path to growth
Slide 34: Appendix
CROMWELL EUROPEAN REIT Appendix
Slide 35: Portfolio Overview and Outlook by Country
Portfolio Overview and Outlook by Country Appendix A • Netherlands • France • Italy • Germany • Denmark ______________________ NOTE: All figures are as at 30 June 2018 unless otherwise stated
Slide 36: Portfolio Overview – The Netherlands
Portfolio Overview – The Netherlands Occupancy % Last Valuation Weighted Reversionary Yield Number of Leases NPI1 (€ million) (as at 30 June 2018) (as at 31 March 2018) (as at 31 March 2018) (as at 30 June 2018) 93.9% 14.4 469.6 5.0% 241 ______________________ 1. For the Reporting Period RESULTS PRE
Slide 37: Netherlands – Office Market Outlook
Netherlands – Office Market Outlook Real Estate Market Investment Volumes Available supply is falling sharply as active requirements translate into take-up and against low levels of completions the vacancy has fallen and is now at 12.1% nationwide – this does include some structural vacancy that s
Slide 38: Netherlands – Logistics/Industrial Market Outlook
Netherlands – Logistics/Industrial Market Outlook Real Estate Market Real Estate Demand for logistics space across the Netherlands is robust with 1H seeing take-up of 915,300 sqm. Activity stems largely from the strong expansion of e-commerce and retailers Netherlands Investment Volumes (€ million
Slide 39: Portfolio Overview – Italy
Portfolio Overview – Italy Occupancy % Last Valuation1 Weighted Reversionary Yield Number of Leases NPI1 (€ million) (as at 30 June 2018) (as at 31 March 2018) (as at 31 March 2018) (as at 30 June 2018) 99.4% 14.3 418.0 5.5% 40 1. Valuation for Ivrea conducted as at 1 April 2018 RESULTS PRESENTATION
Slide 40: Italy – Office Market Outlook
Italy – Office Market Outlook Real Estate Market Investment Volumes The first six months of 2018 has seen €1.17 billion flow into the Italian office sector. Milan remains the most liquid market with investors, both domestic and international, targeting the city. Italy Investment Volumes (€ million
Slide 41: Portfolio Overview – France
Portfolio Overview – France Occupancy % Last Valuation Weighted Reversionary Yield Number of Leases NPI € million (as at 30 June 2018) (as at 31 March 2018) (as at 31 March 2018) (as at 30 June 2018) 86.3% 12.0 313.7 7.3% 342 RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND 41 THE
Slide 42: France – Office Market Outlook
France – Office Market Outlook Real Estate Market Investment Volumes Occupier activity reached With 1H 2018 occupier activity reaching 1.36 million sqm, a 15% increase y-o-y, the office sector is off to its best start since 2007. In terms of trading volumes, 30,000 France Investment Volumes (€ mil
Slide 43: France – Logistics/Industrial Market Outlook
France – Logistics/Industrial Market Outlook Real Estate Market Investment Volumes 2017 broke records – occupier activity reached 4.1 million sqm across France – a level not seen before. Fundamentals are strong but 1Q 2018 saw a notable slow down due to a fall 30,000 France Investment Volumes (€ m
Slide 44: Portfolio Overview – Germany
Portfolio Overview – Germany Occupancy % Last Valuation Weighted Reversionary Yield Number of Leases NPI1 (€ million) (as at 30 June 2018) (as at 31 March 2018) (as at 31 March 2018) (as at 30 June 2018) 80.7% 3.7 107.8 6.4% 55 RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND 44 TH
Slide 45: Germany – Office Market Outlook
Germany – Office Market Outlook Real Estate Market Investment Volumes 2017 was a stellar year for German real estate with € 57.5 billion traded - the best performing year since 2007. Offices were the most-targeted asset class with € 6.8 billion 70,000 German Investment Volumes (€ million) invested
Slide 46: Germany – Industrial Market Outlook
Germany – Industrial Market Outlook Real Estate Market Investment Volumes 2H 2018 capital inflows into the German industrial sector reached approximately € 3 million. German Investment Volumes (€ million) On paper this is a 42% fall in activity across the equivalent period, however it needs to be
Slide 47: Portfolio Overview – Denmark
Portfolio Overview – Denmark Occupancy % Last Valuation Weighted Reversionary Yield Number of Lease NPI1 (€ million) (as at 30 June 2018) (as at 31 March 2018) (as at 31 March 2018) (as at 30 June 2018) 73.6% 3.3 81.4 7.6% 119 RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND 47 THE
Slide 48: Denmark – Logistics/Industrial Market Outlook
Denmark – Logistics/Industrial Market Outlook Real Estate Market Real Estate Demand for logistics space is continuing apace in Denmark with e-commerce related activities in particular, being a demand accelerator. The integration of retail and logistics Denmark Investment Volumes (€ million) real e
Slide 49: European Update and Outlook
European Update and Outlook Appendix B
Slide 50: Commentary on the European Economy
Commentary on the European Economy Growth in the Eurozone economy has eased over the first few months of the year due to a fall in exports. However, it is not expected to be a major slowdown with GDP growth still expected to be a healthy 2.1% in 2018. There is momentum in the European economy de
Slide 51: European Commercial Real Estate - Recent Performance
European Commercial Real Estate - Recent Performance Occupational Prime rental rates in some CBD and City Centre locations have come under sustained upward pressure as occupiers look to trade up their accommodation. The desire for quality space has pushed up rents to the point that many occupiers
Slide 52: Global Capital Flows to Europe
Global Capital Flows to Europe Cross-border activity: 1Q 2018 Sources: Cushman & Wakefield, RCA, bespoke presentation to Cromwell by Cushman & Wakefield RESULTS PRESENTATION FOR THE SECOND QUARTER ENDED 30 JUNE 2018 AND 52 THE FINANCIAL PERIOD FROM 30 NOVEMBER 2017 TO 30 JUNE 2018
Slide 53: Cromwell European REIT - Attractive Distribution Yield
Cromwell European REIT - Attractive Distribution Yield 2018E DPU yield of 7.2%1 compares favourably to other global yield investment products US Europe Benchmarks Singapore Benchmarks Yield Spread to Benchmark Benchmarks +5.8% +2.0% 4.2% +4.7% +4.6% +1.2% 7.2% 5.9% 5.1% 2.9% 2.4% 2.5% 1.3% CEREIT 20
Slide 54: CEREIT’s Sponsor Strength
CEREIT’s Sponsor Strength Appendix C
Slide 55: Sponsored by Cromwell Property Group
Sponsored by Cromwell Property Group Cromwell is a real estate investor and manager operating on three continents with a global investor base A$11.2 4.1 million billion AUM1 sqm A$2.2 330+ billion properties Market Capitalisation2 3,600+ tenants A$152.2 million 360+ Legend: Operating Profit3 people
Slide 56: European Platform with Local Capability
European Platform with Local Capability Unique platform of 20 regional offices providing on the ground local market knowledge and expertise € 4.0 billion Credentials AUM^ Track record of providing holistic asset management, development, corporate 260+ restructuring and equity properties capital inve
Slide 57: Sponsor and Manager Dedicated to Sustainability
Sponsor and Manager Dedicated to Sustainability Cromwell is committed to acting responsibly and proactively, to understand, measure, manage and communicate the impacts of our activities Cromwell has been reporting in accordance with the Global Report Initiative sustainability guidelines since 2009
Slide 58: Research backed Investment Strategies
Research backed Investment Strategies Rigorous selection process to ensure investments are focused on the right cities, sectors and trends Detailed and continuous research process • Target cities in each sector • Investment strategies are identified for investment increasingly overlapping as Country
Slide 59: Thank You
Thank You If you have any queries, kindly contact: Cromwell EREIT Management head of investor relations Ms Elena Arabadjieva at elena.arabadjieva@cromwell.com.sg, Tel: +65 6817 9589 or Newgate Communications at cereit@newgatecomms.com.sg.
Cromwell European REIT — Q2 2018 Earnings Presentation on 6ix