Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial SOCIMI — Debt Investor Presentation (January 2022)
80 slides from Colonial Sfl Socimi Sa's debt investor presentation, January 2022
Slide 1: Implementation of a Green Financing Program
Implementation of a Green Financing Program January 2022
Slide 2: Executive Summary
Implementation of a Green Financing Program Executive Summary > Colonial Group (“Colonial” or the “Group”) pursues a clear leadership in ESG, being at the heart of its strategy, as well as prioritizing sustainable long-term returns based on a business model of high-quality assets > The high-quality
Slide 3: Agenda
Agenda 01 ESG at the Core of Colonial’s Corporate Strategy 02 Consent Solicitation 03 Green Financing Transformation 04 Green Financing Framework 05 Appendices 3
Slide 4: ESG at the core of Colonial's Corporate Strategy
01 ESG at the core of Colonial’s Corporate Strategy
Slide 5: A Holistic Integrated Approach
01 ESG at the core of Colonial’s Corporate Strategy A Holistic Integrated Approach A HOLISTIC INTEGRATED APPROACH 1 STRONG ESG AMBITION WITH SOLID GOVERNANCE 2 QUANTITATIVE APPROACH 3 DELIVERY OF STRONG PERFORMANCE 5
Slide 6: Strong ESG Ambition with Solid Governance
STRONG ESG AMBITION WITH SOLID GOVERNANCE 6
Slide 7: Strong ESG Ambition with Solid Governance
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance GROUP KEY PORTFOLIO METRICS CAPITAL STRUCTURE METRICS GAV Group H1 2021 €12bn +3% LFL3 NTA H1 21 / Net Profit H1 21 €5.8bn €162m # of assets H1 2021 64 Spain | 20 France Market Cap1 €4.5bn IBEX 35 Surface
Slide 8: Largest office owner in Madrid, Barcelona and Paris
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance Colonial as the largest property owner in offices in the City Center of Madrid, Barcelona and Paris > Strong market share increases negotiation power > Colonial best positioned to capture the rental cycle
Slide 9: Integrated holistic ESG strategy and governance
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance Colonial’s ESG strategy pursues an integrated holistic approach to the three dimensions E, S and G > This ESG strategy aims to maximize the value creation for the Shareholders of the Group > ESG Strategy
Slide 10: Integrated holistic approach to E, S and G
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance Colonial’s ESG strategy pursues an integrated holistic approach to the three dimensions E, S and G > The Group’s Corporate Strategy and ESG Strategy are completely integrated to create long-term sustainab
Slide 11: Commitment to the UN 2030 Agenda
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance Colonial is committed to the United Nations’ 2030 Agenda > Detailed analysis of Colonial’s contribution to the achievement of the Sustainable Development Goals (“SDGs”) > The main goals to which the organ
Slide 12: Examples of concrete actions on our assets
01 ESG at the core of Colonial’s Corporate Strategy 1 Strong ESG Ambition with Solid Governance EXAMPLES OF CONCRETE ACTIONS ON OUR ASSETS Energy and carbon Water Biodiversity Well-being > The Group is committed to > Colonial has objectives for > Actions and standards > Well-Being Policy aims to ali
Slide 13: Quantitative Approach
QUANTITATIVE APPROACH 13
Slide 14: Quantitative Approach: Significant progress
01 ESG at the core of Colonial’s Corporate Strategy 2 Quantitative Approach > ESG strategy is set with strong and ambitious objectives > The performance of every KPI or activity is measured and assessed recurrently Business Sustainability Plan 2015-2030: Significant progress and effort have been m
Slide 15: Carbon footprint reduction (77%) vs 2015 baseline
01 ESG at the core of Colonial’s Corporate Strategy 2 Quantitative Approach Carbon footprint reduction (77%) vs 2015 baseline year > 2030 Group Target achieved ahead of timing > Acceleration of path towards net zero emissions COLONIAL FULLY ALIGNED WITH PARIS CLIMATE AGREEMENT ACCELERATION ON DECARB
Slide 16: Active strategy for improving carbon impact and energy efficiency
01 ESG at the core of Colonial’s Corporate Strategy 2 Quantitative Approach Active strategy for improving carbon impact and energy efficiency > In 2011 SFL already set ambitious targets to reduce its greenhouse gas emissions which were amply exceeded by 2020 > New targets for 2030 are certified by t
Slide 17: Delivery of Strong Performance
DELIVERY OF STRONG PERFORMANCE 17
Slide 18: Highest sustainable certification of asset portfolio
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance The Colonial Group commitment is to obtain the highest sustainable certification its asset portfolio > The Group has worked to certify all its buildings in its portfolio and has steadily increased the ratings of the
Slide 19: Commitment on ESG and decarbonization; CBD lower Scope-3 footprint
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance STRONG COMMITMENT ON ESG & DECARBONIZATION CBD POSITIONING ENHANCES LOWER SCOPE-3 CARBON FOOTPRINT > Implementation of a mobility analysis regarding the carbon footprint of our tenants > ESG Committee at C-Level ens
Slide 20: Strong performance LFL in decarbonization of the portfolio
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance Strong performance LFL in decarbonization of the portfolio1 > Strong c.(20%) LFL reduction in Energy KPIs in both countries > High reduction of Green house Gas (GHG) emission thanks to Colonial decarbonization plan
Slide 21: Outstanding rating results
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance OUTSTANDING RATING RESULTS1 BENCHMARK / INDEX ACHIEVEMENT / RATING CDP Score at A confirming decarbonization leadership > Scoring of A: well above Europe regional average and financial services sector > 200 companie
Slide 22: Setting the benchmark in European Real Estate sector
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance Colonial Group setting the benchmark in European Real Estate sector > Colonial among top scorers in main benchmark > Colonial Group portfolio with the highest in-use certifications in Europe BENCHMARKING1 BLOOMBERG
Slide 23: CDP Score at A confirming decarbonization leadership
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance CDP Score at A confirming decarbonization leadership > Scoring of A: well above Europe regional average and financial services sector > Strong YoY momentum: increase up to A coming from A- GLOBAL CDP SCORE REACHING
Slide 24: Continuous improvement on GRESB performance
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance CONTINUOUS IMPROVEMENT ON GRESB PERFORMANCE 24
Slide 25: Continuous improvement on GRESB performance (cont.)
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance CONTINUOUS IMPROVEMENT ON GRESB PERFORMANCE (CONT.) EVOLUTION OF GRESB SCORE EVOLUTION OF GRESB SCORE 94 94 91 92 +7% 90 86 77 +54% 61 2018 2019 2020 2021 2018 2019 2020 2021 25
Slide 26: High-end rating on development benchmark
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance HIGH-END RATING ON DEVELOPMENT BENCHMARK 26
Slide 27: Case study Spain: Miguel Angel 23
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance EXAMPLE OF CONCRETE ACTIONS – CASE STUDY SPAIN: MIGUEL ANGEL 23 I. Building acquisitions II. Overall refurbishment III. Management of real estate in operation > Positioning of the building in the market > Low carbon
Slide 28: Case study France: Biome
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance EXAMPLE OF CONCRETE ACTIONS – CASE STUDY FRANCE: BIOME I. Building acquisitions II. Overall refurbishment III. Management of real estate in operation > Positioning of the building in the market > Refurbishment and c
Slide 29: Building the 1st wood office building in Spain
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance 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 Fa
Slide 30: 01 ESG at the core of Colonial’s Corporate Strategy Delivery of Strong Performance
01 ESG at the core of Colonial’s Corporate Strategy 3 Delivery of Strong Performance 30
Slide 31: Consent Solicitation
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Slide 32: Summary and Consent Solicitation Overview
02 Consent Solicitation Summary and Consent Solicitation Overview > The Group has announced a Consent Solicitation to approve the requalification of all of their outstanding bonds into green bonds OVERVIEW > Colonial and SFL announced a Consent Solicitation on all of their EUR senior bonds to approv
Slide 33: Summary and Consent Solicitation Process
02 Consent Solicitation Summary and Consent Solicitation Process BACKGROUND > The Group pursues ESG strategy, which lies at the heart of its business model. In order to support this ESG strategy, the Group has prepared a Green Financing Framework to align the Group’s financing strategy with its corp
Slide 34: Target Bonds Overview and Main Terms
02 Consent Solicitation Target Bonds Overview and Main Terms Issued O/S Listing First Issuers ISIN CCY Amount Amount Coupon Maturity Place Call Date (M) (M) XS1509942923 EUR 600 187.2 1.450% Jul-24 Oct-24 XS1725677543 EUR 500 500 1.625% Aug-25 Nov-25 XS1808395930 Ireland EUR 650 650 2.000% Jan-26 Ap
Slide 35: Indicative Timeline
02 Consent Solicitation Indicative Timeline January 2022 January 2022 February 2022 12 Notice of General Meetings M T W T F S S M T W T F S S 1 2 1 2 3 4 5 6 February 2022 3 4 5 6 7 8 9 7 8 9 10 11 12 13 3 General Meetings 10 11 12 13 14 15 16 14 15 16 17 18 19 20 Results of General Meetings / 4 17
Slide 36: Documents Available to Investors
02 Consent Solicitation Documents Available to Investors and Where to Find the Information > Notice and any notice relating to an adjourned General Meeting, if applicable > Green Financing Framework > Second Party Opinion > Independent Auditors Report Colonial > Relevant Agency Agreement > Press Rel
Slide 37: Colonial: Procedures to Participate
02 Consent Solicitation Colonial: Procedures to Participate > Each General Meeting will be held via video conference, without the physical presence of Bondholders. Bondholders that wish to attend and vote at the General Meeting via video conference should (i) request a Voting Certificate from the Fi
Slide 38: SFL: Procedures to Participate
02 Consent Solicitation SFL: Procedures to Participate > Each holder of Notes may participate in the relevant General Meeting either by attending such meeting physically, or by voting by proxy or by correspondence > Noteholders are informed that they can also attend the relevant General Meeting by v
Slide 39: Key Questions
02 Consent Solicitation Key Questions > The Group pursues ESG strategy, which lies at the heart of its business model. Colonial prioritises sustainable long-term returns by developing, refurbishing and operating high quality offices in prime locations, mainly the Central Business What is the backgro
Slide 40: Consent Solicitation Agent & Tabulation and Information Agents
02 Consent Solicitation Consent Solicitation Agent &Tabulation and Information Agents The Tabulation and Information Agent / Centralizing Agent Colonial Bonds SFL Bonds Lucid Issuer Services Limited Société Générale Securities Services Tel: +44 20 7704 0880 Tel: +33 2 51 85 65 93 Email: inmocolonial
Slide 41: Green Financing Transformation
03 Green Financing Transformation
Slide 42: Integrate Colonial's ESG Dynamic into its Financing Structure
03 Green Financing Transformation Integrate Colonial’s ESG Dynamic into its Financing Structure > Colonial wishes to reflect its ESG commitments and policy in its financing by targeting a 100% Green financing transformation and so publishes its Green Financing Framework > Colonial has 100% of its bi
Slide 43: How Ambitious is this Approach?
03 Green Financing Transformation How Ambitious is this Approach? Comprehensive approach More and more ambitious criteria over time On bonds portfolio On Colonial’s asset portfolio > 100% of the existing bond debt is > 100% of assets is tested every year > The carbon criteria becomes more and requal
Slide 44: Green Financing Framework
04 Green Financing Framework
Slide 45: Rationale for a Green Financing Framework
04 Green Financing Framework Rationale for a Green Financing Framework > The Colonial Group pursues a clear leadership in ESG, being a fundamental element of its strategy, prioritizing sustainable long-term returns, and based on a business model of high-quality products. Accordingly, the Group’s Cor
Slide 46: Rationale for a Green Financing Framework (cont.)
04 Green Financing Framework Rationale for a Green Financing Framework (cont.) > The Framework is designed as an overarching framework. As such, new issuances under the Framework will comprise future green bonds and existing bond debt to be requalified into green bond debt (subject to Bondholder app
Slide 47: Overview of the Pillars of the Framework
04 Green Financing Framework Overview of the Pillars of the Framework 1 Use of proceeds 2 Process for Project Evaluation and Selection > The Use of Proceeds of any Green Bond under the Framework will be subject > The ESG Committee will verify the compliance of the selected pool of to the eligibility
Slide 48: Eligibility Criteria
04 Green Financing Framework Eligibility Criteria Use of proceeds > The Use of Proceeds of any Green Bond under the Framework will be subject to the following eligibility criteria, to be applied to new or existing assets (the “Eligible Green Assets”) > Eligible Green Assets refer to the following ec
Slide 49: Carbon emissions intensity per asset
04 Green Financing Framework Focus on Eligibility Criteria > Colonial’s Green Financing Framework retains green certification levels > Colonial Green Financing Framework retains dynamic carbon which illustrate the Group’s high ambition emissions thresholds which illustrate the Group’s high ambition
Slide 50: Framework Contribution to SDGs and EU Environmental Objectives
04 Green Financing Framework Framework Contribution to SDGs and EU Environmental Objectives > Colonial’s sustainability strategy is aligned with regional and international objectives such as the European Union's environmental objectives and the United Nations‘ Sustainable Development Goals COLONIAL’
Slide 51: Reporting
04 Green Financing Framework Reporting > The Group will prepare, and make available to investors, an Allocation and Impact Report for Green Bonds linked to this Framework, specifying the relevant measurement methodologies > The reporting document will be published each year by the Group and by each
Slide 52: Second Party Opinion
04 Green Financing Framework Second Party Opinion > V.E, a global leader in ESG assessments, data, research, benchmarks and analytics, has provided a Second-Party Opinion on Colonial’s Green Financing Framework > V.E considers that Colonial’s Framework is aligned with the four core components of the
Slide 53: Appendices
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Slide 54: Glossary
GLOSSARY 54
Slide 55: Glossary
05 Appendices Glossary Eligibility criteria Carbon emissions > Colonial’s carbon footprint is presented in kgCO2/sqm. It is a material indicator in the Real Estate sector and it can be intensity benchmarked > BREEAM is the world’s leading sustainability assessment method for masterplanning projects,
Slide 56: Allocation Report
ALLOCATION REPORT 56
Slide 57: List of Colonial and SFL's current Outstanding Bonds
05 Appendices List of Colonial and SFL’s current Outstanding Bonds Issued Amount O/S Amount First Issuers ISIN CCY Coupon Maturity (M) (M) Call Date XS1509942923 EUR 600 187.2 1.450% Jul-24 Oct-24 XS1725677543 EUR 500 500 1.625% Aug-25 Nov-25 XS1808395930 EUR 650 650 2.000% Jan-26 Apr-26 Colonial XS
Slide 58: Allocation Report
05 Appendices Allocation Report > Colonial has currently €2.8bn outstanding bonds and SFL has currently €1.8bn outstanding bonds > In addition, the Group has 100% of its bilateral debt (€76m secured debt and a €1bn RCF) linked to its GRESB rating1 > Colonial’s assets have been reviewed by the ESG co
Slide 59: Eligible Assets Examples
ELIGIBLE ASSETS EXAMPLES 59
Slide 60: Avenida de Bruselas 38 – Spain
05 Appendices Avenida de Bruselas 38 – Spain > In late 2017 and early 2018, Colonial acquired > After the completion of the project, 100% of the property was rented as corporate headquarters for an the office building located at Avenida de IBEX 35 technology company with a long-term contract and a h
Slide 61: Miguel Angel – Spain
05 Appendices Miguel Angel – Spain > Colonial acquired the Miguel Ángel, 23 asset at the start of 2018 following the purchase and subsequent merger with Axiare Socimi SA > The LCA identified levers to optimize the level of sustainability in the building, consequently maximizing value creation > The
Slide 62: Miguel Angel – Spain (cont.)
05 Appendices Miguel Angel – Spain (cont.) > The building will also have a large photovoltaic installation, a solar thermal energy system on the roof, in addition to a turbine system to produce wind energy (new for a building of these characteristics), which will mean that a large portion of the ene
Slide 63: 9 Avenue Percier – France
05 Appendices 9 Avenue Percier – France > In 2015, through its subsidiary SFL, Colonial > In 2020, Colonial, as part of its recurring assessment of the value created by its assets, found this acquired the building located at 9 Avenue Percier, building to be non-strategic, given that its investment c
Slide 64: Credit Update
CREDIT UPDATE 64
Slide 65: Q3-21 Results Highlights
05 Appendices Q3-21 Results Highlights SOLID FINANCIAL RESULTS > Group Net Profit of €184m, +€179m vs. previous year > Net Rental Income of €219m, +2.5% like-for-like (Paris +5.1% like for like) > Recurring EPS of €17.91cts, below the previous year due to Disposals & Renovation Program acceleration
Slide 66: Solid Results – Back to Growth through Prime Positioning
05 Appendices Solid Results – Back to Growth through Prime Positioning > Net Rental Income with +2.5% like for like growth, Paris portfolio +5% > EPS decrease due to disposals & renovation program acceleration > Comparable EPS +9% vs previous year Profit & Loss - €m 09/21 YoY Unparalleled Prime Posi
Slide 67: Solid Operating Performance Underpinned by Polarization Trends
05 Appendices Solid Operating Performance Underpinned by Polarization Trends > Letting volume of 117,680 sqm, +71% Year on Year > Exceptional letting volume in the third quarter, ongoing polarization towards prime > Rental prices with solid ERV growth, Paris with +7% Solid Fundamentals 09/21 Unparal
Slide 68: Resilient Occupancy Profile
05 Appendices Resilient Occupancy Profile > Office portfolio occupancy at resilient 93.4% level > 97% occupancy in comparable terms (excluding entry into operation of renovation program) > Paris strongest market with 95% occupancy (98% in comparable terms) EPRA OCCUPANCY 96% 98% 95% Grenelle Washngt
Slide 69: Rental Markets – Scarcity of High Quality Product in CBD
05 Appendices Rental Markets – Scarcity of High Quality Product in CBD > Grade A product in CBD with limited vacancy across markets > Increased polarization in take-up: preference for grade A assets in central locations > Paris CBD with take-up back at pre-covid levels Stock CBD as of Q3 2021 Vacanc
Slide 70: Investment Market – Prime Product in the CBD
05 Appendices Investment Market - Prime Product in the CBD with Strong Valuation levels PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > Record Investment volume: €1,415m 2021 YTD BARCELONA > 60% of transactions concentrated in 22@ area > Prime yield at 3.60%, with very healthy spread of 314bp vs re
Slide 71: Strong Commitment to ESG & Decarbonization
05 Appendices Strong Commitment to ESG & Decarbonization > Significant reduction of the carbon footprint YoY - (51%) like for like > Barcelona and Madrid outstanding > Acceleration of Net Zero transition SIGNIFICANT REDUCTION OF THE CARBON FOOTPRINT TOTAL VARIANCE - (tCO2e) LFL VARIANCE - (tCO2e) 20
Slide 72: Gross Rental Income +2% like for like
05 Appendices Gross Rental Income +2% like for like > Gross Rental Income +2% like for like > GRI increase fully rental price driven (Madrid outstanding with +3%) > Contract portfolio best positioned to capture momentum in indexation & ERV Growth GROSS RENTAL INCOME - €m +2% SOLID EPRA LIKE-FOR-LIKE
Slide 73: Net Rental Income at +2.5% like for like
05 Appendices Net Rental Income at +2.5% like for like > Net Rental Income +2.5% like for like > Paris with +5% Net Rental Income > Strong Paris performance offsetting temporary correction in Barcelona LIKE-FOR-LIKE VARIANCE1 – NRI LFL IN NET RENTAL INCOME FURTHER STRENGTHENED Gross Net Rental Incom
Slide 74: Comparable EPS Stable – Flight to Quality & Reloading Growth
05 Appendices Comparable EPS Stable – Flight to Quality & Reloading Growth > EPS decrease mainly due to disposals, acceleration of renovation program and indemnities in previous year > Comparable Recurring EPS of €23.99cts/share, +9% vs. previous year level > Disposals of non-core - reloading growth
Slide 75: Solid Profitability with Enhanced Quality
05 Appendices Solid Profitability with Enhanced Quality > Group Net Profit of €184m, +€179m > Recurring Profit impacted by disposals & renovation program acceleration > Comparable Recurring EPS of €23.99cts/share, +9% vs previous year level PROFIT & LOSS ACCOUNT GROUP NET PROFIT €m Value Creation th
Slide 76: Improving Group's Debt Positioning
05 Appendices Improving Group’s Debt Positioning > Improved debt profile through successful liability management > Issuance of more than €1,125m bonds in Spain and France with high oversubscription > Issuances at 0.75% and 0.50% coupon, the lowest coupons in the history of the Colonial Group Success
Slide 77: Solid Capital Structure
05 Appendices Solid Capital Structure > Improved debt profile through successful liability management > Significant Cost of Debt reduction reaching 1.4% > Solid capital structure with LTV of 36.6% STREGNHTHENED BALANCE SHEET IMPROVED FUNDING OF THE GROUP Solid Capital Structure 1. Debt reduction thr
Slide 78: Colonial Well Positioned for Growth
05 Appendices Colonial Well Positioned for Growth STRONG RESULTS ENHANCED BY POLARIZTION TOWARDS PRIME > Group Net Profit of €184m, +€119m vs. previous year > Net Rental Income of €219m, +2.5% like-for-like > Significant increase in letting volume, +71% vs the previous year > Positive momentum on re
Slide 79: Disclaimer
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Slide 80: www.inmocolonial.com
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