Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q1 2022 Earnings Presentation
53 slides from Colonial Sfl Socimi Sa's earnings presentation, May 17, 2022
Slide 1: First Quarter Results 2022
First Quarter Results 2022 May 17th, 2022 1/22
Slide 2: Disclaimer
Disclaimer By attending this presentation and receiving this document, you are agreeing to be bound by the following limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws and/or may result in civil, administrative or criminal liabilities.
Slide 3: Agenda
Agenda 01 Highlights 02_ Double digit profit growth 03 Strong delivery on operations 04 Leadership in ESG & Decarbonization 05 Strong visibility on further growth 06 Conclusion & Outlook 3
Slide 4: Presenting management team
Presenting management team PRESENTING MANAGEMENT TEAM Pere Viñolas Carmina Ganyet Carlos Krohmer Chief Executive Officer Corporate Managing Director Chief Corporate Development Officer 4
Slide 5: Delivery of profitable Growth on the back of polarization
01 Highlights Delivery of profitable Growth on the back of polarization
Slide 6: The Best Office Product
01 Highlights The Best Office Product COLONIAL – THE FULL BENEFIT OF POLARIZATION > Superior Grade A with unparalleled City Center/ CBD exposure 98%1 City Center More than > Most sustainable product with leadership in decarbonization €12bn GAV 80%2 CBD > Best locations with best services & highest q
Slide 7: The Best Office Product
01 Highlights The Best Office Product COLONIAL – THE FULL BENEFIT OF POLARIZATION PARIS MADRID BARCELONA Place de l’Étoile Place de la Tour Concorde Eiffel Musée du Louvre Plaza de Colón 7
Slide 8: Delivery of profitable Growth on the back of polarization
01 Highlights Delivery of profitable Growth on the back of polarization Delivery of Strong profit growth… … Further Growth Through Strong Operations ✓ Net Profit & EPA with high double-digit year on year growth ✓ Letting volume of 51.000 sqm, well above pre-covid ✓ Profit Growth driven by solid exec
Slide 9: Strong Profit Growth Driven by Strong Operations
01 Highlights Strong Profit Growth Driven by Strong Operations Delivery of Strong profit growth… … Further Growth Through Strong Operations +32% +74% Group Net Profit €28m Letting volume 51,661 sqm YoY Lettings on Renovation Program 9,821 sqm Q1 2022 Recurring Net profit €36m +26% Pre lets on Renova
Slide 10: Delivery of profitable Growth on track
02 Double digit profit growth Delivery of profitable Growth on track
Slide 11: Strong profitable growth on all metrics
02 Double digit profit growth Strong profitable growth on all metrics > Net Group Profit increase of +32% > Solid increase in Recurring Net Profit: +26% YoY > Double digit EPS growth of +19% PROFT FULLY TOP-LINE DRIVEN NET GROUP PROFIT RECURRING NET PROFIT EPS €m €m €cts/share 36 28 +32% +26% +19% 6
Slide 12: Profit Growth driven by solid execution of key drivers in 2021
02 Double digit profit growth Profit Growth driven by solid execution of key drivers in 2021 Solid increase in Recurring Net Profit: +26% YoY > Strong growth in revenues with +11% profit impact > Improvement in financial costs due to liability management > Additionally profit impact through SFL stak
Slide 13: +4% GRI YoY Increase (+6% excluding impact of disposals)
02 Double digit profit growth +4% GRI YoY Increase (+6% excluding impact of disposals) Revenue Growth excluding impact of disposals of +6% > +4.2% Revenue increase due to delivery on projects & renovation program > +1.8% Revenue increase through rental growth in Core Portfolio & Acquisitions GROSS R
Slide 14: +5% Office like for like in Gross Rental Income on the back of polarization
02 Double digit profit growth +5% Office like for like in Gross Rental Income on the back of polarization > Group GRI Like for Like of +3% > Office portfolio like for like of +5% > Office like for like growth through balanced mix of price & volume GROSS RENTAL INCOME - €m Gross Rental Income Varianc
Slide 15: Green Bond Conversion – Competitive Advantage to tap debt markets
02 Double digit profit growth Green Bond Conversion – Competitive Advantage to tap debt markets > 100% Green Bond Conversion on the back of a Green Portfolio > First & Only on the IBEX-35 and in the Spanish Real Estate Sector > Leadershipo on Decarbinzation with clear payoff for capital markets The
Slide 16: Solid Capital Structure with strong Hedging Policy
02 Double digit profit growth Solid Capital Structure with strong Hedging Policy > Solid Capital structure with strong liquidity > LTV at healthy 36%, at low-end of guidance > Strong hedging policy securing future interest rates Solid Capital Structure Competitive cost of debt Strong hedging policy
Slide 17: 1Q 2022 Results – Strong Profit Growth Driven by Strong Operations
02 Double digit profit growth 1Q 2022 Results – Strong Profit Growth Driven by Strong Operations PROFIT GROWTH ANALYSIS YOY - GROWTH PROFIT STRONGLY TOP-LINE DRIVEN 1 Successful Project Delivery RECURRING NET PROFIT +8% €m 36 2 Acceleration of Renovation Program +26% +2.6% 28 3 SFL M&A and Acqu. Dan
Slide 18: Superior performance on the back of polarization for high quality product
03 Strong delivery in operations Superior performance on the back of polarization for high quality product
Slide 19: Office Markets with strong support for Grade A in CBD
03 Strong delivery in operations Office Markets with strong support for Grade A in CBD > Grade A product in CBD scarce in every market > Take-up in all markets above pre-Covid levels > Strong investment market for scarce Grade A in the City Center Rental market – Strong Take-up Growth in CBD Strong
Slide 20: Superior performance on the back of high quality product
03 Strong delivery in operations Superior performance on the back of high quality product LETTING VOLUME SQM KPIS Q1 2022 Q1 2021 Q1 2022 YoY RELEASE SPREAD1 ERV GROWTH2 MATURITY (years)3 EPRA VACANCY4 PARIS 2,080 7,039 +238% +6% +4% 8 0.8% MADRID 10.890 38.998 +258% +9% +4% 4 6.7% BARCELONA 16.789
Slide 21: Superior performance on the back of high quality product
03 Strong delivery in operations Superior performance on the back of high quality product > More than 51,000 sqm signed, +74% on previous quarter > Letting activity growth of +101% in economic terms > New lettings representing more than 25,400 sqm LETTING ACTIVITY REMAINS SOLID IN 1Q 2022 SQM SIGNED
Slide 22: Benefitting from polarization - Setting the benchmark in Prime
03 Strong delivery in operations Benefitting from polarization - Setting the benchmark in Prime PARIS MADRID BARCELONA Letting volume - sqm Letting volume - sqm Letting volume - sqm Total 7,039 Total 38,998 Total 5,624 Thereof CBD & 7ieme 6,343 Thereof CBD 22,343 Thereof CBD & 22@ 5,624 Max.Rent1 Ma
Slide 23: Strong Occupancy Profile of Grade A Portfolio
03 Strong delivery in operations Strong Occupancy Profile of Grade A Portfolio > Group Occupancy at healthy 95% with almost full occupancy in Paris (99%) > Strong letting performance in 1Q22: +60% vs. 1Q19 letting volume (pre COVID-19) > Agreements post Q1 with further positive momentum on occupancy
Slide 24: Vacancy at healthy 4.7%: availability of top-quality product
03 Strong delivery in operations Vacancy at healthy 4.7%: availability of top-quality product 4.7% of available high-quality space with solid letting prospects > 2.1% renovation program assets in Paris & Madrid > 2.1% Grade A CBD premises in Barcelona & Madrid EPRA VACANCY - Offices Renovation Progr
Slide 25: Maximum Rents on the back of the Best Product
03 Strong delivery in operations Maximum Rents on the back of the Best Product > ERV growth of +4% with solid performance across all segments > +9% release spread (Barcelona +21%) > Setting the benchmark with the maximum rents signed SOLID INCREASE IN RENTAL PRICES COLONIAL SETTING THE BECHMARK IN R
Slide 26: Increasing ambition on Net Zero
04 Leadership on ESG & Decarbonization Increasing ambition on Net Zero
Slide 27: Decarbonization Strategy on track
04 Leadership on ESG & Decarbonization Decarbonization Strategy on track DECARBONIZATION PLAN ON TRACK GREEN BOND CARBON DISCLOSURE SBTI APPROVAL GRESB FULL BOND CONVERSION PROJECT 1.5º AMBITION SCORE: 5-STAR TO GREEN BONDS SCORE: A > First and only Real Estate > 1st and only IBEX35 company > Invest
Slide 28: Science Based Target initiative (SBTi) - Colonial’s Business Plan verified & approved by SBTi
04 Leadership on ESG & Decarbonization Science Based Target initiative (SBTi) - Colonial’s Business Plan verified & approved by SBTi > Carbon footprint reduction by 52% vs 2018 baseline year > Acceleration of path towards net zero emissions > Objective of carbon neutrality in 2030 (previous objectiv
Slide 29: Superior growth & returns through prime positioning
05 Strong visibility on further growth Superior growth & returns through prime positioning
Slide 30: EPS GROWTH OF MORE THAN +60% IN THE NEXT 3 YEARS
05 Strong visibility on further growth EPS GROWTH OF MORE THAN +60% IN THE NEXT 3 YEARS 1 Project pre-lets ahead of schedule 2 Renovation program almost completed 3 Acquisition program completed 4 Indexation & Rental Growth 28
Slide 31: EPS Growth of more than +60% in the next 3 years
05 Strong visibility on further growth EPS Growth of more than +60% in the next 3 years 35 >€510m €5m Out of additional GRI1 of 166 €m 4 Indexation & Rental Growth €92m of GRI1 20 >€74m To come with high visibility YTD 3 Acquisition program completed €20m 422 2 Renovation program almost completed €2
Slide 32: Velázquez 86D in Madrid Prime CBD almost completed
05 Strong visibility on further growth 1 Project Pipeline delivery beating expectations Velázquez 86D in Madrid Prime CBD almost completed > Top –tier clients signing at the highest market rents > More than 14,000 sqm signed in Madrid Prime CBD at record rent > Last floor available with high market
Slide 33: Miguel Ángel 23 in Madrid Prime CBD almost completed
05 Strong visibility on further growth 1 Project Pipeline delivery beating expectations Miguel Ángel 23 in Madrid Prime CBD almost completed > Agreement for 100% of the available space > More than 7,000 sqm with an AAA tenant > Global advisory firm betting for Near-Net-Zero-Building Miguel Ángel 23
Slide 34: Project Pipeline delivery beating expectations
05 Strong visibility on further growth 1 Project Pipeline delivery beating expectations > €80m of additional rents to flow into the recurring P/L > €37m of secured rents YTD through solid Grade A letting performance > Additional €16m of rents with strong momentum GLA Total 2 Yield Project City Deliv
Slide 35: Renovation Program almost completed
05 Strong visibility on further growth 2– Renovation Program almost completed > Renovation program almost fully let > Signed rents well above market ERVs > Contracts signed with AAA tenants Washington Plaza 103 Grenelle Cézanne Saint Honoré Charles de Gaulle Cedro Ortega y Gasset Prime CBD – 10,000
Slide 36: Renovation Program almost completed
05 Strong visibility on further growth 2– Renovation Program almost completed > Significant progress in letting up the renovation program > Passing rents have increased by +41% in 3 months > Reversion of €35m annualized GRI secured as of 03/22 SIGNIFICANT GRI REVERSION WITH VALUE CREATION POTENTIAL
Slide 37: Acquisition Program completed
05 Strong visibility on further growth 3 Acquisition Program completed > More than €500m securing more than €20m rents > Pasteur Acquisition at attractive pricing and ahead of timing > Danone Spanish Headquarters: Opportunistic Acquisition at attractive terms 91 Boulevard Pasteur, Paris City Center
Slide 38: Indexation & Rental Growth
05 Strong visibility on further growth 4– Indexation & Rental Growth > Colonial portfolio fully capturing positive indexation impact in cash flow > Indexation on Spanish portfolio already secured for more than 35% of the contracts > Prime Grade A Positioning provides additional rental upside COLONIA
Slide 39: Conclusion & Outlook
06 Conclusion & Outlook
Slide 40: Delivery of growth on track
06 Conclusion & Outlook Delivery of growth on track DELIVERY OF PROFITBALE GROWTH ON TRACK > Recurring Net Profit +26% YoY > Recurring EPS +19% YoY > Grade A portfolio with outstanding performance EPS GROWTH OF MORE THAN +60% IN THE NEXT 3 YEARS2 Colonial platform with strong growth drivers in place
Slide 41: Save the Date
“SAVE THE DATE” Don´t miss our next events July 11: Capital Markets Day in Paris
Slide 42: Q&A
Q&A
Slide 43: Project pipeline – GRI reversionary potential going forward
APPENDICES Project pipeline – GRI reversionary potential going forward > More than €80m of additional rents to flow into the recurring P/L > €37m of secured rents through solid pre-let performance > Project pipeline delivery & pre-letting process on track GLA Total 1 Yield Project City % Group Deliv
Slide 44: Project pipeline – significant value creation potential going forward
APPENDICES Project pipeline – significant value creation potential going forward > More than €2.5bn of value creation > 2022 Delivery on track GLA Total 1 Yield Value creation potential - €bn Project City % Group Delivery (sqm) Cost €m on Cost 2.3 - 2.5 Future 1 Diagonal 525 Barcelona CBD 100% Deliv
Slide 45: Renovation Program with positive momentum
APPENDICES Renovation Program with positive momentum > Significant progress in letting up the renovation program > Passing rents have increased by €16m since the beginning of the program > Reversion of €35m annualized GRI secured as of 03/22 RENOVATION PROGRAM SIGNIFICANT GRI REVERSION WITH VALUE CR
Slide 46: Paris acquisition completed ahead of timing
APPENDICES Paris acquisition completed ahead of timing > Pasteur acquisition at attractive pricing and ahead of timing > Acquisition securing a strategic positioning in Montparnasse train station > Asset with excellent real estate fundamental and good value perspective in the long term 91 Boulevard
Slide 47: Vacancy at very healthy levels in every segment
APPENDICES Vacancy at very healthy levels in every segment > Office portfolio vacancy stable at a healthy 4.7% level (2.8% excluding Torre Marenostrum, Ortega y Gasset & Grenelle) > Temporary increase in Barcelona vacancy due to Torre Marenostrum entry into operation offset by Paris improvement > Pa
Slide 48: Rental Price levels remain solid
APPENDICES Rental Price levels remain solid during RELEASE SPREAD1 GROWTH ON SIGNED RENTS2 Via Augusta 21 Santa Engracia 120 Castellana 43 DAU Retail Amigó 11-17 103 Grenelle +21% +19% +10% +30% +20% +12% Santa Engracia 120 Santa Engracia 120 Santa Engracia 120 José Abascal 45 Génova 17 Recoletos 37
Slide 49: A solid capital structure
APPENDICES A solid capital structure > Long-term financing profile with extended debt maturities > LTV of 36% with a liquidity of €2,601m > A solid financial structure with competitive financing costs Extension of Debt Maturities A Solid Financial Structure Maturity profile of debt facilities - €bn
Slide 50: Investment markets for prime product remain active – Paris
APPENDICES Investment markets for prime product remain active > Paris CBD an attractive target for International Investors SKY CBD €108.25m 3,500 sqm €30,928/sqm (1Q 2022) 1-1BIS Rue Francois CBD €86m 3,410 sqm €25,219/sqm (1Q 2022) PARIS 18 Rue Yves Toudic City Center €120m 7,700 sqm €15,584/sqm (1
Slide 51: Investment markets for prime product remain active – Barcelona
APPENDICES Investment markets for prime product remain active > Barcelona leading the investment market in Spain – specially in the 22@ district Torre Sabadell CBD €90m 12,000 sqm €7,500/sqm (4Q 2021) Price pre Price pre Capex future capex Tanger, 66 22@ €50m 7,2111 sqm €6,934/sqm (4Q 2021) BARCELON
Slide 52: Investment markets for prime product remain active – Madrid
APPENDICES Investment markets for prime product remain active > Investor appetite with increased momentum for Prime in Madrid Castellana 42 CBD €54m 4,500m €12,000/sqm (3Q 2021) Goya 36 CBD €52m 4,500 m €11,556/sqm (1Q 2022) MADRID Ancora 40 CBD €51 7,215 sqm €7,069/sqm (1Q 2022) Alcalá 26 CBD €37m
Slide 53: www.inmocolonial.com
www.inmocolonial.com © Colonial
Inmobiliaria Colonial, SOCIMI — Q1 2022 Earnings Presentation on 6ix