Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — H1 2020 Earnings Presentation
62 slides from Colonial Sfl Socimi Sa's earnings presentation, July 2020
Slide 1: First Half Results 2020
First Half Results 2020 July 2020 2020 2/20
Slide 2: Disclaimer
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Slide 3: Agenda
Agenda 01 Highlights 02_ Covid-19 – Client Management 03 Market Update 04 Operational performance 05 Financial performance 06 Non Financial Highlights - ESG 07 Prime Positioning enhances Resilience 08 Conclusion 3
Slide 4: Highlights: Solid results with resilient Q2
01 Highlights Solid results with resilient Q2
Slide 5: Solid results with resilient Q2
01 Highlights Solid results with resilient Q2 SOLID FIRST HALF RESULTS > Total Shareholder Return 2019 of +8.4% YoY > EPRA NAV of €11.21€ per share: +7% YoY > Gross Asset Value of €12.2bn, +4% like-for-like YoY > Gross Rental Income of €177m, +1% like-for-like > Net Rental Income of €165m, +4% like-
Slide 6: Financial Results remain solid in Q2 – Defensive prime positioning
01 Highlights Financial Results remain solid in Q2 – Defensive prime positioning > Total Annual Shareholder Return of +8.4%, flat in 1H 20 > Net Asset Value of 11.21€/share +6.5% > Recurring EPS of 16.24€Cts/ share, +20% Total Annual Return - € per share 1H 20 6M YoY Profit & Loss - €m 1H 20 YoY Var
Slide 7: Solid fundamentals driving top line growth
01 Highlights Solid fundamentals driving top line growth > Outstanding NRI Like for Like growth of +4% > Double digit Release Spread & Superior Rental Growth > Strong CBD positioning with high Paris exposure Solid Fundamentals 1H 20 Unparalleled Prime Positioning EPRA Vacancy 4% CBD Breeam Paris 76%
Slide 8: Covid-19 – Client Management
02 Covid-19 – Client Management Limited Covid-19 impact YTD
Slide 9: COVID19 response
02 Covid-19 – Client Management COVID19 response Proactive management in key areas of the company MARCH APRIL MAY JUNE JULY Implementation of Increased liquidity Rating agencies S&P and Logistics Disposal Pre-letting of Marceau covid-19 protocol through the signature of Moody’s confirm credit Settle
Slide 10: COVID-19 – Agreements & discounts
02 Covid-19 – Client Management COVID-19 – Agreements & discounts > Conversations with circa 41% of clients > Agreements almost finalized - Spain with agreements on all files > Discounts in very limited cases: 2% impact YTD on annual GRI STATUS OF CLIENT CONVERSATION NEGOTIATION RESULTS YTD Q2 with
Slide 11: COVID-19 – Agreements & deferrals
02 Covid-19 – Client Management COVID-19 – Agreements & deferrals > Agreements almost finalized - Spain with agreements on all files > Deferrals in exchange of longer-term maturities > Secured future GRI of €40m YTD through longer maturities STATUS OF CLIENT CONVERSATION NEGOTIATION RESULTS YTD Shor
Slide 12: Scarcity in Prime Product
03 Market Scarcity in Prime Product
Slide 13: Rental Markets
03 Market Rental Markets VACANCY % PRIME ERV HIGHLIGHTS €/sqm/month > CBD vacancy at 2.3% in Q1 20 -> historically low levels BARCELONA 0% > CBD / 22@ most dynamic markets 2019 2Q > Q2 Prime rents at Pre-Covid levels of €27.5/sq m /month 2020 Vacancy CBD(%) Prime Rents CBD (€/sqm/month) €/sqm/month
Slide 14: CBD Rental Market
03 Market CBD Rental Market > In the three markets, 2Q 2020 rental prices continued in line with prior quarter for prime location assets > CBD rental transactions decreased due to COVID-19 crisis and the scarcity of grade A product Diagonal 609 28 1,245 Diagonal 616 26 1,063 €/sqm/month sqm Prime CB
Slide 15: Investment Markets – prime remains resilient
03 Market Investment Markets – prime remains resilient PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > 22@ attracting investments focused on grade A assets BARCELONA > International investors acquiring turned-key projects > Prime yield at 3.60%, with very healthy spread of 313bp vs reference rate >
Slide 16: Unparalleled exposure to CBD
04 Operational performance Unparalleled exposure to CBD
Slide 17: Letting activity remains solid in Q2 2020 – Contracts signed in good terms
04 Operational performance Letting activity remains solid in Q2 2020 – Contracts signed in good terms LETTING VOLUME SQM Q1 2020 Q2 2020 TOTAL 1H20 RENTAL GROWTH2 RELEASE SPREAD5 MATURITY (years)3 EPRA VACANCY4 Pre Covid Covid BARCELONA 7,024 13,720 20,744 +8% +54 5 4% years MADRID 5,374 466 5,839 +
Slide 18: Letting activity remains solid in Q2 2020
04 Operational performance Letting activity remains solid in Q2 2020 > More than 28,000 sqm signed in Q2 2020 > Covid19 months 2on quarter letting activity higher than 1 st quarter (PreCovid) > Solid rental levels with healthy maturities SQM SIGNED 1H 2020 LETTING MIX Q2 2020 Madrid & Paris Group Ba
Slide 19: Rental Price levels remain solid in 2Q 2020
04 Operational performance Rental Price levels remain solid in 2Q 2020 > Price levels remain solid in every segment > Releases Spreads double digit in Spain & France > Rental Prices +11% vs ERV 12/19 SOLID INCREASE IN RENTAL PRICES RELEASE SPREAD1 GROWTH ON SIGNED RENTS 2019 1Q 20 2Q 20 20192 1Q 203
Slide 20: Rental Price levels remain solid in 2Q 2020
04 Operational performance Rental Price levels remain solid in 2Q 2020 GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 Diagonal 609 Marceau Via Augusta +9% +++ +38% Sant Cugat Torre BCN Diagonal 609-615 +18% +13% +58% Castellana 163 Washington Plaza Washington Plaza +13% +12% +14% (1) Signed rents vs 12/19
Slide 21: Letting activity remains solid in April & May 2020
04 Operational performance Letting activity remains solid in April & May 2020 > Unique asset in Paris Prime location > Project design with the highest environmental standards > Pre-let of more than 6,000 sqm with AAA tenants PRIME ASSET IN PRIME POSITION RESILIENT PRODUCT ATTRACTING TOP TENANTS Pari
Slide 22: Vacancy at very healthy levels in every segment
04 Operational performance Vacancy at very healthy levels in every segment > Group & Office portfolio vacancy at a healthy 4% > Paris at 2% excluding 103 Grenelle entry into operation > Group at 3% vacancy excluding 103 Grenelle entry into operation EPRA VACANCY BARCELONA1 Total 4% 4% 3% 4% Vacancy(
Slide 23: Vacancy at very healthy levels in every segment
04 Operational performance Vacancy at very healthy levels in every segment > Group & Office portfolio vacancy at 4% > 1% of new vacancy due to entry in operation of Renovation Program asset Grenelle > Available space in Madrid and Barcelona, mainly in secondary locations EPRA VACANCY 1 Entry in oper
Slide 24: Logistics disposal – Execution of Call Option confirmed
04 Operational performance Logistics disposal – Execution of Call Option confirmed > Settlement of Call Option signed in 2019 > €100m cash proceeds in July > €64m cash proceeds in Q4 2020 LOGISTICS PORTFOLIO DISPOSAL LOGISTICS PORTFOLIO DISPOSAL – SECOND PHASE In August 2019 Colonial signed the disp
Slide 25: A good start into the year 2020 with solid financials
05 Financial performance A good start into the year 2020 with solid financials
Slide 26: Strong top line growth
05 Financial performance Strong top line growth > Gross Rental Income +2% and +1% like for like > Office portfolio GRI +7% and +3% like for like > Madrid and Barcelona outstanding GRI growth GROSS RENTAL INCOME - €M EPRA Like for like1 +1% EPRA Projects & Disposals & TOTAL like-for-like1 renovations
Slide 27: Like-for-like rental growth price driven
05 Financial performance Like-for-like rental growth price driven > Like-for-like growth largely driven by rental price increases > Barcelona fully price driven > Madrid growth driven by a combination of price and volume GROSS RENTAL INCOME - €M STRONG EPRA LIKE-FOR-LIKE GROWTH EPRA like- GRI LIKE-F
Slide 28: NRI like for like growth at +5%
05 Financial performance NRI like for like growth at +5% like for like > Net Rental Income like-for-like increase at +4%, +5% like for like > Barcelona and Madrid with outstanding NRI growth > Like-for-like growth in 1H20 accelerating by 95 bp YoY LIKE-FOR-LIKE VARIANCE1 – NRI LFL IN NET RENTAL INCO
Slide 29: Strong underlying growth in Asset Values
05 Financial performance Strong underlying growth in Asset Values > Gross Asset Value of €12,164m (€12,773m including transfer costs) > +4% like for like YoY growth, flat in 6 months > Paris outstanding with +6% like for like YoY (+1% in 6 months) GAV 1H 2020 GROWTH – 6 months GAV VARIANCE (0.2%) 6
Slide 30: Strong underlying growth in Asset Values
05 Financial performance Strong underlying growth in Asset Values > (0.2%) like for like Capital Value Growth in 1H 2020 > Positioning in Paris CBD offsetting slight decline in Spain > Strong Alpha component of +1.2% (Project Delivery) GAV 1H 2020 GROWTH – 6 months LIKE FOR LIKE VARIANCE 6 months (0
Slide 31: Profitable growth with enhanced quality
05 Financial performance Profitable growth with enhanced quality > High double digit recurring EPS growth > NRI growth the main profit driver > Non-Core Disposals enhancing the quality of returns STRONG EPS GROWTH RECURRING EARNINGS – VARIANCE ANALYSIS Offloading Secondary Assets RECURRING RESULT €m
Slide 32: Profitable growth with enhanced quality
05 Financial performance Profitable growth with enhanced quality > Recurring Earnings is high double digits > Stabel dividend based on strong cash flow generator > Net profit at €(26)m driven by asset revaluation PROFIT & LOSS ACCOUNT STRONG DPS GROWTH DIVIDEND 1H 2020 €m +6% LFL Stable + 1H 19 1H 2
Slide 33: Ongoing access to debt markets and liquidity
05 Financial performance Ongoing access to debt markets and liquidity > Investment Grade Rating confirmed > €200m of ESG loan signed in Spain and €150m in France > €500m successful bond issuance in France Investment Grade Rating Confirmed New loans signed Bond issuance in France New ESG loan in Spai
Slide 34: A solid capital structure
05 Financial performance A solid capital structure > An unparalleled high-quality collateral diversified in three cities > A solid financial structure with competitive financing costs > A strong credit profile FIRST CLASS COLATERAL A SOLID CAPITAL STRUCTURE More than €12bn of high quality assets 1.
Slide 35: Solid Total Shareholder Return
05 Financial performance Solid Total Shareholder Return > +8.4% Total Annual Shareholder Return YoY, flat in 6 months > EPRA NAV of 11.21 €/share, +6.5% YoY > EPRA NAV per dividend of 11.41€/share, flat vs 12/19 STRONG MOMENTUM IN NAV GROWTH TOTAL SHAREHOLDER RETURN €/share 0.06 (0.27) 6 months 12 m
Slide 36: “Alpha” approach providing resilience in downturns
05 Financial performance “Alpha” approach providing resilience in downturns > Total Return (NAV pre dividend) almost flat vs 12/19 and +8,4% YoY > Project Delivery providing asset value growth +5% YoY and +1% vs 12/19 > Recurring EPS providing cash flow base for dividend TOTAL SHAREHOLDER RETURN TOT
Slide 37: Strong Commitment on ESG & Decarbonization
06 Non Financial Highlights - ESG Strong Commitment on ESG & Decarbonization
Slide 38: Maximum Energy Efficiency Standard
06 Non Financial Highlights - ESG Maximum Energy Efficiency Standard MAXIMUM ENERGY EFFICENY STANDARDS GREEN FINANCING More than €350m of ESG loans Portfolio with Leed/Breeam1 – value Portfolio with Leed / Breeam1 2019 > Thanks to its high standards in sustainability, in April 2020 Leed/ Colonial fo
Slide 39: Strong Commitment to ESG & Decarbonization
06 Non Financial Highlights - ESG Strong Commitment to ESG & Decarbonization COLONIAL ALIGNED WITH PARIS AGREEMENT > Objective of carbon neutral portfolio in 2050 > Objective of a 75% carbon reduction until 20301 CARBON EMISSIONS – PORTFOLIO LIKE FOR LIKE 2015 – 2019 2018 – 2019 (KgCo2e/sqm) (KgCo2e
Slide 40: Strong Commitment to ESG & Decarbonization
06 Non Financial Highlights - ESG Strong Commitment to ESG & Decarbonization SIGNIFICANT REDUCTION OF THE CARBON FOOTPRINT SCOPE 1, 2 & 3 – ABSOLUTE FIGURES- (tCO2e) SCOPE 1 & 2 – FIGURES LIKE FOR LIKE 2019 2018 Var. CARBON EMISSIONS - (tCO2e) BARCELONA 5,767 9,756 (41%) LFL (40%) (59%) MADRID 9,198
Slide 41: Building the 1st Wood Office Building in Spain
06 Non Financial Highlights - ESG Building the 1st Wood Office Building in Spain Opportunity to build the 1st Wood Office Building in Spain > Small premise of 2,500sqm above ground > Good location in the 22@ area of Barcelona > JV partnering with Family Office of Barcelona, current owner of the land
Slide 42: Located in 22@, one of the fastest-growing business districts in Spain
06 Non Financial Highlights - ESG Located in 22@, one of the fastest-growing business districts in Spain WittyWood - Barcelona 22@ > First office building built entirely of wood in Spain > Located in 22@, Barcelona’s burgeoning technological district, home to over 8,800 firms > Plot is situated in o
Slide 43: Building the 1st Wood Office Building in Spain
06 Non Financial Highlights - ESG Building the 1st Wood Office Building in Spain 43
Slide 44: A diversified Core CBD Portfolio with a strong balance sheet
07 Defensive Prime Positioning A diversified Core CBD Portfolio with a strong balance sheet
Slide 45: Resilience through prime positioning
07 Defensive Prime Positioning RESILIENCE THROUGH PRIME POSITIONING 1✓ A super Core CBD Portfolio 2✓ AAA Clients with strong solvency 3✓ A defensive Project Pipeline 4✓ Flight to quality 45
Slide 46: A Super Core CBD Portfolio
07 Defensive Prime Positioning 1A A Super Core CBD Portfolio > Colonial as largest office owner in the City Center of Madrid, Barcelona and Paris > Strong market share in CBD > Prime positioning enhances resilience BARCELONA MADRID PARIS Colonial Portfolio - max rent signed Colonial Portfolio - max
Slide 47: A Super Core CBD Portfolio in Paris
07 Defensive Prime Positioning 1A A Super Core CBD Portfolio in Paris > Strong footprint in Paris through SFL > Unparalleled CBD exposure, far beyond any other peer > Strong fundamentals in the city centre of Paris with significant lack of supply STRONG FOOTPRINT IN PARIS … WITH UNPARRALLELED CBD EX
Slide 48: A Super Core CBD Portfolio with solid valuation levels
07 Defensive Prime Positioning 1A A Super Core CBD Portfolio with solid valuationn levels > Prime Yields at very attractive spreads compared to reference rates > Colonial portfolio at prudent valuation levels > Prime product with defensive metrics VALUATION YIELDS (1) BARCELONA MADRID PARIS Colonial
Slide 49: Investment transactions since Covid-19 crisis
07 Defensive Prime Positioning 1A A Super Core CBD Portfolio – Investment transactions since Covid-19 crisis > Investment market for CBD Offices remains active > Markets continues with solid transaction prices YTD 7 rue de Téhéran CBD Prime €210m 7,000 sqm 2.6% Yield 46 av. Grande-Armée CBD €200m 7,
Slide 50: AAA Clients with strong solvency
07 Defensive Prime Positioning 2 AAA Clients with strong solvency CONTRACT PORTFOLIO 2020 MATURITIES – DELIVERY YTD ON TRACK SIGNIFICANT IMPROVEMENT YTD 2020 MATURITIES MANAGEMENT ON TRACK Pending maturities 2020 % on annualized 6/20 Group GRI €72m 1H 2020 8% 0.4% 2.1% 6% 0.5% €29m €1m €8m €29m Matu
Slide 51: AAA Clients with strong solvency
07 Defensive Prime Positioning 2 AAA Clients with strong solvency > Reversion as solid cash flow “buffer” > Contract Portfolio under-rented > Delivery of high release spreads YTD > Renovation programs as rental growth accelerator ENHANCED THROUGH REVERSION AS SOLID “BUFFER” MATURITIES 2020 REVERSION
Slide 52: A defensive project pipeline
07 Defensive Prime Positioning 3 A defensive project pipeline Close to €30m of pre-let secured > Significant Pre-let level with AAA tenants > Top Product in unique locations GRI – Project Pipeline 87% Pre-let 12/2019 Current 100% Pre-let Pipeline Total 80% 25% 33% Pre-let Pre-let Pre-let Committed P
Slide 53: Yield on cost confirmed and enhanced
07 Defensive Prime Positioning 3 A defensive project pipeline Yield on cost confirmed and enhanced > Significant Pre-let level with AAA tenants > Top Product in unique locations GRI – Path to reversion 87% Pre-let 100% Pre-let 55 57 436 449 80% Pre-let 28 381 392 353 364 Group GRI Group GRI Secured
Slide 54: Flight to quality through active asset management
07 Defensive Prime Positioning 4 Flight to quality through active asset management > Ongoing flight to quality through disciplined capital allocation > Disposal of non-core asset for €1.4bn > Increasing the prime exposure and defensive profile of our portfolio INVESTMENTS & DIPOSALS SINCE 2015 - €m
Slide 55: Conclusion
08 Conclusion
Slide 56: Conclusion: Solid first half results
08 Conclusion SOLID FIRST HALF RESULTS > Total Shareholder Return 2019 of +9% YoY > Net Asset Value €11.21/share (€11.41/share pre-dividend) > A prime CBD portfolio with defensive value ✓ Total Group: (0.2%) like-for-like in 6 months ✓ Paris +1% like-for-like in 6 months > Solid growth in Income ✓ G
Slide 57: Q&A
Q&A
Slide 58: MSCI European Property Investment Award
APPENDICES MSCI European Property Investment Award > Colonial awarded for the 4th year in a row by MSCI as best performing portfolio in Spain > Colonial outperformed the Benchmark in 2019 and over last 3 and 5 years > Spanish index benchmark made of 51 portfolios and 490 assets worth €19Bn MSCI Euro
Slide 59: A solid platform to capture future growth
APPENDICES A solid platform to capture future growth > Solid intrinsic growth profile of CBD portfolio > Colonial well-positioned to capture reversion > Significant future value creation through CBD Project pipeline Current Uplift Potential Passing GRI 1 – (€m) PRIME POSITIONING 4 CBD4 76% Paris4 60
Slide 60: A solid capital structure
APPENDICES A solid capital structure > An unparalleled high-quality collateral diversified in three cities > A solid financial structure with competitive financing costs > A strong credit profile FIRST CLASS COLATERAL A SOLID FINANCIAL STRUCTURE Capital Structure 31/12/2019 30/06/2020 More than €12b
Slide 61: Creation of Hybrid products – Fix, Flexible & Additional Services
APPENDICES Creation of Hybrid products – Fix, Flexible & Additional Services > Delivery of two new hybrid office buildings within Colonial’s portfolio during 1H > Enhancement of user experience through the combination of flexible product and new contents > Prime locations and customer centric conten
Slide 62: www.inmocolonial.com
www.inmocolonial.com © Colonial
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