Tel Aviv Stock Exchange Ltd. · TASE:TASE
Tel Aviv Stock Exchange — Gazit Brasil — Investor Presentation (October 2018)
50 slides from Tel Aviv Stock Exchange's investor presentation, October 2018
Slide 1: Investor Presentation October 2018
INVESTOR PRESENTATION OCTOBER 2018 Photo: São Paulo City – Estaiada Bridge
Slide 2: Disclaimer
SÃO PAULO This presentation may include forward-looking statements, including forecasts, evaluations, pro forma figures, estimates and other information relating to future events and issues. Forward-looking statements may relate to, among other things, revenues, earnings, cash flows, capital expendi
Slide 3: Brasil overview: urban population and low mall penetration
HIGHLY URBAN POPULATION (86% OF TOTAL) LOW PENETRATION – DEMAND EXCEEDS SUPPLY (1) (Total GLA m2/ 1000 inhabitants) BRASIL 200,00 200M 86% 90% 85% OVERVIEW 84% 80% 150,00 150M 81% 75% 76% 70% USA Canada Australia Portugal Spain France Germany Mexico Brazil 100,00 100M 65% BRAZILIAN CONSUMER SPENDING
Slide 4: São Paulo: business capital of South America
POPULATION EXPLOSION BUSINESS CAPITAL OF SOUTH AMERICA 5 Most populous city in the world • Sao Paulo state has 20% of the population and is responsible for 32% of the nation’s GDP, approx. US$600B*; 21.5M • Latin America headquarters of 65% of Fortune 500 Companies, such as Inhabitants in the metrop
Slide 5: Focused strategy that proves itself
Irreplaceable Real Estate in off-the-chart Value-add opportunity in each of the assets by urban demographics. Current rate of upgrading tenant mix, retrofit and with over 60M annual visitors to our properties 316Ksqm* approved rights for mixed use. One-of-a-kind 100% São Paulo based Proactive manage
Slide 6: Gazit Brasil Management Team
GAZIT BRASIL MANAGEMENT TEAM EXPERIENCED LOCAL MANAGEMENT WITH GLOBAL MINDSET GAZIT BRASIL IS A FULLY INTEGRATED COMPANY WITH SOUP TO NUTS MANAGERIAL CAPABILITIES Mia Stark – CEO Sergio Koffes Jr. - COO Mia Stark became Chief Executive Officer at Sergio Koffes has over 13 years of experience in Gazi
Slide 7: Gazit's Brasil Business Strategy
GAZIT’S BRASIL BUSINESS STRATEGY CONCENTRATION DIFFERENTIATION INNOVATION + = OUTSIZED RETURNS + • Focus on São Paulo, with “off the • Continuous transformation of the assets • Creation of a new concept of day-to- chart” demographics that enhances the shopping experience day Life & Entertainment Cen
Slide 8: At a Glance
~ R$3B* of Real State ** 9 Assets AT A GLANCE ASSETS ANCHORED BY 166k sqm Owned GLA* Occupancy 97.3%* 283 Employees 2 Landbanks - Corporate 28 - Asset level 255 Over 316K sqm*** approved Number of rights for mixed use. tenants ~1.5K OCR 10.5%* *As of Q2 – 2018 (occupancy without Carrefour building)
Slide 9: Our Portfolio
OUR PORTFOLIO 7 1 6 MORUMBI TOWN 2 MAIS SHOPPING 137 tenants 179 tenants Fully Owned Fully Owned GLA: 31K sqm + GLA: 14K sqm Landbank: 4,624 sqm GLA 2019: 23K sqm 4 3 TOP CENTER PAULISTA 1267 3 5 99 tenants Landbank Fully Owned Potential 5 km 9 GLA: 20K sqm GLA: 4K sqm 4 SHOPPING LIGHT 5 CARREFOUR 1
Slide 10: Malls located on main public transportation routes of São Paulo
5 5 GAZIT BRASIL MALLS ARE LOCATED ON MAIN PUBLIC 1 TRANSPORTION ROUTES OF SÃO PAULO 3 2 1 Shopping Light 2 Top Center 3 Eldorado 4 4 Mais Shopping 5 Internacional Shopping 10
Slide 11: Irreplaceable assets with strong demographics
1 5 ELDORADO CARREFOUR 1 2 2 5 4 IRREPLEACEBLE 5 ASSETS WITH CIDADE JARDIM SHOPPING LIGHT 3 6 STRONG Sao Paulo City Average: R$73K 3 DEMOGRAPHICS 6 Brazil Average: R$30K 7 MAIS SHOPPING MORUMBI TOWN 4 7 * TOP CENTER INTERNACIONAL São Paulo Metropolitan Assets • Source: IBGE • In 5KM radius 11
Slide 12: Our Growth Evolution: NOI
25% NOI Growth; Yield on Cost 2018 2019 7.4% 8.1% 200 W/O MT (under stabilization) 207 8.0% 8.6% 185 200 166(1) 207 150 185 NOI (millions of R$) 166 150 200 117 207 OUR GROWTH 100 NOI (millions of R$) 185 117 EVOLUTION 166 100 150 73 NOI (millions of R$) 50 117 100 50 73 50 50 73 2250 13 22 50 - 201
Slide 13: Our Shopping Mall Tenant Mix
Roughly 50% of tenants are e-commerce resistant and all our São Paulo city malls are 100% urban high density located assets! 4% Based on Rent 16% 30% Apparel (30%) Restaurant (4%) Entertainment (7%) 20% Food Court (16%) OUR SHOPPING Supermarket (3%) 7% 3% MALL TENANT Non apparel retail (20%) 20% Con
Slide 14: Paulista Avenue: 1.5 million pedestrians per day
PAULISTA AVENUE 1.5 MILLION PEDESTRIANS PER DAY Lively 3km avenue with public transportation, universities, museums, offices, residences and entertainment sites 14
Slide 15: Top Center
GoTop CENTER soars SHOPPING ‘Hit is
Slide 16: Top Center Overview
NOI INFO * As of Q218 Shopping Center Acquisition Date - September 2014, 28 Office Tower - June 2016 25 OVERVIEW CAGR 29.5% 23 Plot Area 3.9K sqm Occupancy 100% LIDE RETAIL AWARD (2016) EXCELENCY IN Total Sales 2018E R$171M TENANT MIX 10 Tenants 99 9 Shopping Only! R$ Million GLA 20K sqm Visitors (2
Slide 17: Case Study: Top Center
2014 2018 CASE STUDY • NOI Growth of the shopping - approximately 60.5% in 4 years; • Yield on Cost for the shopping center - from 6.8% (2014) to TRANSFORMATION 9.1% (2018); VALUE CREATION THROUGH PROACTIVE MANAGEMENT • Re-tenanted 95% of the mix since acquisition; GLA: 6.5K sqm (Shopping) GLA: 6.5K
Slide 18: Maximizing Potential
2014 INVESTMENT R$148M MAXIMIZING POTENTIAL FUTURE OPPORTUNITY GLA (shopping): 6.5K sqm NOI – R$10m (Total built area: 36K sqm) (annualized) VALUE CREATION, 2018 FUTURE EXPANSION EXPANSION, TOTAL INVESTMENT R$338M DIFFERENTIATION GLA ( Shopping + Office GLA (Shopping + Office Additional – 2K sqm Tow
Slide 19: Transformation of Customer Experience
TRANSFORMATION OF CUSTOMER EXPERIENCE 19
Slide 20: Tenant Mix
Top brands from diverse segments, provide the visitors unique experience, services and day to day convenience on the go. TENANT MIX Based on rent 6% 19% Apparel (19%) 40% Restaurant (6%) 19% Convenience/Services (19%) 16% Food Court (40%) Non apparel retail (16%) Based on GLA Top international brand
Slide 21: Paulista 1267
PAULISTA 1267 ISRAEL´S INDEPENDECE DAY (70 YEARS) IN SÃO PAULO 21
Slide 22: Paulista 1267 Landbank
2018 FUTURE PAULISTA 1267 LANDBANK Potential GLA: 4K • Anchor – 1K sqm; • Food-Hall | Restaurant – 2K ILLUSTRATION sqm; • Terrace Uncovered (Food- POTENTIAL Hall | Restaurant) – 1K sqm. VALUE CREATION THROUGH NEW DEVELOPMENT Common Area • Circulation | Common Area – 606 sqm; • Parking | Docks – 3K s
Slide 23: Downtown São Paulo
DOWNTOWN SÃO PAULO Where the city of São Paulo was founded: city hall, stock exchange, courts, universities, museums, offices, residences and entertainment & tourism sites. SHOPPING LIGHT 23
Slide 24: Shopping Light Overview
YIELD ON COST INFO * As of Q218 Acquisition Date June 2015 Plot Area 4.9K sqm 10.5% 10.2% Occupancy 96.1% 9.6% OVERVIEW Total Sales 2018E R$266M YIELD % 7.7% Tenants 142 GLA 18.6K sqm Visitors (2018E) 11.5M Parking Spaces 82 2015 2016 2017 2018E Cars (2018E) 74K DEMOGRAPHIC DATA SOCIAL CLASS GENDER
Slide 25: Overview: Shopping Light transformation
2015 2020 OVERVIEW • NOI Growth – approximately 61.3%, mainly by re-tenanting of 60% of the mix since acquisition in ILLUSTRATION 2015; • Potential cultural or entertainment addition on the rooftop: demand LANDMARK BUILDING THAT WAS TRANSFORMED INTO A SHOPPING MALL for restaurants, cinema and conven
Slide 26: Maximizing Potential
2015 INVESTMENT R$144M MAXIMIZING POTENTIAL HISTORICAL BUILDT IN 1929 GLA: 19K sqm BUILDING BUILT (Total built area: 36.5K sqm) IN THE HEART OF 2018 TOTAL INVESTMENT R$169M FUTURE EXPANSION DOWNTOWN SÃO PAULO IN 1929 THAT WAS CONVERTED INTO SHOPPING MALL IN THE 1990s FUTURE OPPORTUNITY GLA: 19K sqm
Slide 27: Transformation of Customer Experience
Adidas /Calvin Klein /Pizza hut TRANSFORMATION OF CUSTOMER EXPERIENCE Starbucks Kopenhagen 27
Slide 28: Tenant Mix
The only shopping mall in downtown. Comprises with a F&B options, variety of services, and daily convenience stores. Potential to transform the roof top into an unforgettable gastronomy and entrainment experience. TENANT MIX Based on Rent 6% 3% 38% Apparel (38%) Restaurant (3%) 30% Entertainment (9%
Slide 29: Shopping Cidade Jardim
us D ag os SHOPPING
Slide 30: Cidade Jardim Overview
INFO * As of Q218 Acquisition Date December 2016 Plot Area 50K sqm Occupancy 98.8% Total Sales 2018E R$855M OVERVIEW Tenants 211 Gazit Brasil 33% of the mall GLA 37K sqm Ultra-Luxury mall in São Paulo, Sales (monthly/sqm) R$1.8K located on the main highway of the city (Marginal) and part Visitors (2
Slide 31: Mais Shopping
Gass gaz geireney SHOPPING
Slide 32: Mais Shopping Overview
YIELD ON COST INFO * As of Q218 Jan (60%) Feb (40%) Acquisition Date - 2015 Plot Area 18K sqm OVERVIEW 9.6% 10.1% Occupancy 97.5% 9.1% 8.3% Total Sales 2018E R$202M YIELD % Tenants 179 GLA 14K sqm GLA – post expansion 23K sqm Visitors (2018E) 13.5M Parking Spaces 788 2015 2016 2017 2018E Cars (2018E
Slide 33: Case Study: Mais Shopping
2015 2018 CASE STUDY • NOI Growth of the mall - approximately 29.6% in 3 years; Illustration • Re-tenanted 40% of the mix; • From 14K sqm GLA in 2015 (acquisition) to 23K sqm GLA in METRO STATION MALL THAT IS CONTINUOUSLY GOING THORUGH IMPROVEMENTS 2019 (post expansion); WITH EXPANSIONS, TENANT MIX
Slide 34: Maximizing Potential
2015 INVESTMENT R$193M MAXIMIZING POTENTIAL FUTURE OPPORTUNITY GLA: 14K sqm MAXIMIZING (Total built area: 49,8K sqm) POTENTIAL: 2017 ON GOING EXPANSION VALUE TOTAL INVESTMENT R$206M (1) CREATION, EXPANSION, DIFFERENTIATED GLA 14K sqm GLA: 23K sqm Additional 9k GLA expansion (Total built area: 50K sq
Slide 35: Transformation of Customer Experience
TRANSFORMATION OF CUSTOMER EXPERIENCE Rocks & Ribs Smartfit 35
Slide 36: Tenant Mix
The main shopping center in Santo Amaro, is a commuters hub that connects the adjacent university with the metro station and buses terminal in the southern part of the city. Mais Shopping is known for its convenience and wide options of fast food and democratic mix catering to customers everyday TEN
Slide 37: Morumbi Town Shopping
Camorums! TOWN pera SHOPPING
Slide 38: Morumbi Town Overview
INFO * As of Q218 Plot Area 22.8K sqm Occupancy 99.4% OVERVIEW Total Sales 2018E R$291M “GRANDES Tenants 137 CONSTRUÇÕES” AWARD (2016) GLA 31K sqm MOST EFFICIENT CONSTRUCTION IN Visitors (2018E) 5.1M BRAZIL LIDE RETAIL AWARD Parking Spaces 1,563 (2017) DESIGN & Cars (2018E) 1.2M ARCHITECTURE DEMOGRA
Slide 39: Case Study: Morumbi Town
2014 2018 CASE STUDY • 96% occupancy at opening in Dec 2016; • Flagship stores such as Cinesystem (cinema), Zaffari (hypermarket), Tramontina (home goods), Bio Ritmo (gym), Anaca (dancing school) and many GROUND UP DEVELOPMENT FOCUSED ON FAMILY EXPERIENCE AND CONVENIENCE entertainments; MEETING THE
Slide 40: Maximizing Potential
2008 INVESTMENT R$77M * MAXIMIZING POTENTIAL GLA: 18K sqm INAUGURATED IN DECEMBER 2018 FUTURE EXPANSION – 6K GLA Expansion TOTAL INVESTMENT R$339M (1) 2016 – UNDER STABILIZATION • 3 Restaurants GLA: 37K • International anchor; (Total built area: 103K sqm) • Expansion of Bio Ritmo (gym); • 14 Satelli
Slide 41: Transformation of Customer Experience
TRANSFORMATION OF CUSTOMER EXPERIENCE 41
Slide 42: Tenant Mix
Innovative mall with a focus on services, convenience and entertainment for kids and families, in a very inviting and brightening atmosphere for their daily visits. Roughly 63% of tenant mix are e-commerce proof. TENANT MIX Based on Rent 2% 13% 17% 6% Apparel (13%) 6% Restaurant (2%) Entertainment (
Slide 43: Eldorado Overview
INFO * As of Q218 Plot Area 165K sqm Occupancy 99.0% OVERVIEW Tenants 340 Gazit Brasil owns 4.3% shares of the mal (REIT) GLA 77K sqm A trophy asset and one of the Visitors (year) ~20M most established malls in Brazil in which Gazit has full ROFR mechanism to acquire all of the Parking Spaces 3,500
Slide 44: Internacional Shopping Guarulhos
Estaiada Bridge Guarulhos 44
Slide 45: Internacional Shopping Overview
INFO * As of Q218 Acquisition Date April 2018 OVERVIEW Plot Area 125K sqm Occupancy 96.4% Gazit Brasil owns 70% of the mall Gazit´s latest acquisition and most relevant single Total Sales 2018E R$1.1B investment in Brazil for Gazit Globe: R$956M with an expected annualized yield of Tenants 339 7.8%
Slide 46: Overview: latest acquisition with potential of value creation
2018 FUTURE EXPANSION OVERVIEW Gazit Brasil owns 70% of the mall • Occupancy increased to 98.0% in August, 2018 (96.2% upon acquisition on April 2nd, 2018); • Since April - 2018 – 26 new store ILLUSTRATION leases (LS 169%) and 22 new kiosk contracts; • 28.6M annual mall visitors and LATEST ACQUISITI
Slide 47: Maximizing Potential
2018 INVESTMENT R$956M MAXIMIZING POTENTIAL EXPANSION POTENTIAL 198K SQM - FUTURE OPPORTUNITY GLA: 77K sqm MAXIMIZING (Total built area: 121K sqm) POTENTIAL: FUTURE EXPANSIONS VALUE FUTURE EXPANSION CREATION, EXPANSION, Phase I (2018) Additional Expansion GLA 6K sqm DIFFERENTIATED • 1 Restaurant • 2
Slide 48: Transformation of Customer Experience
TRANSFORMATION OF CUSTOMER EXPERIENCE Bacio 48
Slide 49: Tenant Mix
One of the top trophy malls in Sao Paulo metro area, Internacional Shopping has off the chart foot traffic providing convenience, services and leisure, in addition it has 197K sqm expansion TENANT MIX rights that can be transformed to an attractive mixed use project. Based on Rent 2% 13% 29% Apparel
Slide 50: Thank You for Visiting Us!
THANK YOU FOR VISITING US! Rua Olimpiadas 66, 4 andar Vila Olimpia Sao Paulo Brazil 04551-000 Tel: +55-11-35080800 50