Slide 1: Results Presentation June 2018
O’Learys RESULTS PRESENTATION JUNE 2018
Slide 2: Table of contents
Table of contents 1 2 3 4 5 6 Operating Half year Portfolio and financial Market trends Pipeline Outlook highlights performance NEPI ROCKCASTLE PLC 1 RESULTS PRESENTATION JUNE 2018
Slide 3: Half year highlights
1 Half year highlights Paradise Center, Bulgaria NEPI ROCKCASTLE PLC 2 RESULTS PRESENTATION JUNE 2018
Slide 4: Highlights
Highlights 26.49 €CENTS DISTRIBUTION PER SHARE €153m DISTRIBUTABLE EARNINGS €5.3bn INVESTMENT PROPERTY PORTFOLIO 12.9% INCREASE FROM JUN 2017* 21% INCREASE FROM JUN 2017** 8.1% INCREASE FROM DEC 2017 Arena Centar, Croatia 3.8% EPRA VACANCY RATE 99.9% COLLECTION RATE 2.3% COST OF DEBT 6% EPRA NET ASS
Slide 5: Executing the strategy
Executing the strategy €311m INVESTED IN NEW PROPERTY ACQUISITIONS 94.4% OF PROPERTY PORTFOLIO IN INVESTMENT GRADE COUNTRIES €109m INVESTED IN LAND AND DEVELOPMENTS 73% UNENCUMBERED ASSETS €211m DECREASE IN NET LISTED SECURITIES POSITION 9 CEE countries NEW ENTRY IN LITHUANIAN MARKET 28% MAINTAINING
Slide 6: Changes to Board of Directors
Changes to Board of Directors • Dan Pascariu and Michael Mills retired effective 28 August 2018. • Robert Emslie - the new Chairman of the Board of Directors. • New Audit Committee structure: - Andre van der Veer - Independent Non-executive Director, Chairman - Antoine Dijkstra - Independent Non-exe
Slide 7: Successful delivery of acquisition pipeline
Successful delivery of acquisition pipeline Ozas Shopping and Entertainment Centre Vilnius, Lithuania Acquisition drivers Aura Centrum Olsztyn, Poland Large and dominant shopping centres: • Large assets • Large cities • Strong growth potential Significant acquisitions in H1 2018 Galeria Mlyny Shoppi
Slide 8: Poland
Poland WARMIAN-MASURIAN VOIVODESHIP 1 436 000 INHABITANTS OLSZTYN 173 000 NEPI ROCKCASTLE PLC 7 RESULTS PRESENTATION JUNE 2018
Slide 9: Consolidating the Polish portfolio - Aura Centrum
Consolidating the Polish portfolio - Aura Centrum REGIONAL MALL Aura Centrum is a prominent shopping and entertainment destination in the heart of Olsztyn city centre with a GLA of 25,400m2. Opened in 2005, the centre was extended in 2009 100% and was further modernised in 2013 and 2016 to keep it a
Slide 10: Lithuania
Lithuania VILNIUS COUNTY 805 000 INHABITANTS VILNIUS 574 000 NEPI ROCKCASTLE PLC 9 RESULTS PRESENTATION JUNE 2018
Slide 11: Lithuanian market entry - Ozas Shopping and Entertainment Centre
Lithuanian market entry - Ozas Shopping and Entertainment Centre REGIONAL MALL Ozas is located in Vilnius, the capital city of Lithuania, and has a GLA of 62,300m2. The centre has a strong fashion and entertainment- oriented tenant mix: Adidas, Bershka, CCC, Deichmann, Gant, H&M, Karen Millen, Jack&
Slide 12: Slovakia
Slovakia NITRA DISTRICT 689 000 INHABITANTS NITRA 79 000 NEPI ROCKCASTLE PLC 11 RESULTS PRESENTATION JUNE 2018
Slide 13: Becoming the largest retail landlord in Slovakia - Galeria Mlyny
Becoming the largest retail landlord in Slovakia - Galeria Mlyny Shopping Centre REGIONAL MALL Galeria Mlyny is the main retail destination in Nitra, a city of 79,000 people in western Slovakia. Opened in 2009, the shopping centre was extended in 2015 with a new wing, which includes a 100% five-scre
Slide 14: Portfolio
Bonarka City Centre, Poland 2 Porfolio NEPI ROCKCASTLE PLC 13 RESULTS PRESENTATION JUNE 2018
Slide 15: Dominant portfolio by scale and geographical diversification
Dominant portfolio by scale and geographical diversification^ Rentable EPRA Property Passing Lithuania Country area Occupancy value rent 3% Romania 841 100m2 95.9% €1 960m €139.4m Poland 434 600m2 95.6% €1 296m €79.8m Poland 26% Bulgaria 162 000m2 94.9%* €481m €32.4m Slovakia 98 200m2 97.9% €399m €2
Slide 16: Combination of high-quality direct portfolio and liquid indirect investments
Combination of high-quality direct portfolio and highly liquid indirect investments DIRECT PORTFOLIO AT 30 JUNE 2018^ STRATEGY Weighted Weighted Weighted annualised EPRA Number GLA Valuation^ Passing rent/ERV Occupancy* '000m2 €m €m % TOTAL PROPERTIES 73 2 218 5 334 367 At 30 June 2018, present in n
Slide 17: Top 10 retail tenants and contracted gross rent
Top 10 retails tenants and contracted gross rent Sustainable anchor tenant base by rent 4.1% 3.2% * 3.1% ** 3.0% 2.4% 1.6% 1.4% 1.3% 1.2% 1.1% * Bershka, Massimo Dutti, Oysho, Pull and Bear, Stradivarius and Zara ** Reserved, Cropp Town, House, Mohito, Sinsay Long-term lease duration €m Expiry profi
Slide 18: Sustained growth in retailer sales
Sustained growth in retailer sales Retailer sales increase by Poland 7.7% in H1 2018 compared to +8.6% H1 2017. Czech Republic Performance driven by: +22.3% - 19.1% Services Slovakia - 16.8% Electronics +2.4% - 11.4% Food - 10.5% Fashion Hungary +4.2% Croatia Romania Sales benefited from asset +3.9%
Slide 19: Operating and financial performance
3 Operating and financial performance Braila Mall, Romania NEPI ROCKCASTLE PLC 18 RESULTS PRESENTATION JUNE 2018
Slide 20: Strong performance indicators
Strong performance indicators Operational performance indicators H1 2018 Financial performance indicators H1 2018 Net Operating Income €165m Loan-to-value* 28% NOI growth (like-for-like) 4.1% Unencumbered assets (% of total assets) 73% Weighted average remaining lease term 4.1 years Cost of debt 2.3
Slide 21: Strong performance indicators » continued
Strong performance indicators » continued Galeria Warminska, Poland 28.40* €CENTS EPRA 26.49* €CENTS DISTRIBUTABLE EARNINGS PER SHARE EARNINGS PER SHARE €7.14 EPRA NAV 6.70% EPRA 6.77% EPRA 'TOPPED-UP' NET INITIAL YIELD NET INITIAL YIELD * Reconciliation of profit for the period to EPRA earnings and
Slide 22: Robust balance sheet
Robust balance sheet • Versatile funding profile via a combination of equity, debt and sale of DEBT MATURITY PROFILE AS AT 30 JUNE 2018 (€m) the listed securities portfolio. 800 • Investment grade credit ratings: • Baa3, positive outlook - Moody’s • BBB, stable outlook - Standard & Poor’s • BBB, sta
Slide 23: Market trends
Promenada Mall, Romania 4 Market trends NEPI ROCKCASTLE PLC 22 RESULTS PRESENTATION JUNE 2018
Slide 24: Macroeconomic prospects - future growth prospects in CEE
Macroeconomic prospects - future growth prospects in CEE % Real GDP growth % General gov. debt (% of GDP) 8 100 7 80 6 5 60 4 40 3 2 20 1 0 0 Czech Czech Romania Slovakia Serbia Croatia Poland Bulgaria Hungary Lithuania EU28 Romania Slovakia Serbia Croatia Poland Bulgaria* Hungary* Lithuania EU28 Re
Slide 25: 10-year forecasted growth
Strong macroeconomic fundamentals and future growth prospects in CEE CEE private consumption growth well above the EU average 120% 120% Serbia 100% €26bn 100% Lithuania 10-year forecasted growth Latvia €27bn 80% Poland €17bn Estonia 80% Romania €273bn €12bn €117bn Bulgaria Slovakia Slovenia 60% €31b
Slide 26: Retail trends: NEPI Rockcastle competitive advantages
Retail trends: NEPI Rockcastle competitive advantages Adaptive retail model for enriching the shopping experience Tenant Mix • Flexibility towards newer “Millennial” concepts such as pop-up stores, demo rooms and food halls; • Updates on standard lease agreement based on new omnichannel distribution
Slide 27: Pipeline
5 Pipeline Promenada Novi Sad render, Serbia NEPI ROCKCASTLE PLC 26 RESULTS PRESENTATION JUNE 2018
Slide 28: Strong pipeline: growth with limited risk
Strong pipeline: growth with limited risk LEASING COMMITTMENT REINFORCING DOMINANCE Main anchors secured early in the 9 extension projects to reinforce process for all developments under the dominant position of our construction shopping centres Promenada Plovdiv, Bulgaria Festival Sibiu, Romania Pr
Slide 29: Acquisitions, developments and extensions pipeline
Acquisitions, developments and extensions pipeline ACQUISITIONS PIPELINE (€ MILLION) JUN 2018 )500( 0 500 1000 1500 2000 2500 Finalised Committed Under due dilligence Further opportunities DEVELOPMENTS AND EXTENSIONS PIPELINE (€ MILLION) JUN 2018 )500( 0 500 1000 1500 2000 2500 Finalised Money spent
Slide 30: Schedule of developments and extensions as at 30 June 2018
Schedule of developments and extensions as at 30 June 2018 CASH BASIS Weighted by ownership Target GLA of existing GLA of Cost Total Country Type Category opening date Ownership property development to date cost % m2 m2 €m €m Developments under construction 170 000 168 900 130 454 Promenada Novi Sad
Slide 31: Summary of ongoing developments projects
Summary of ongoing developments projects Focus Mall Zielona Gora - extension Zielona Gora, Poland Solaris Shopping Centre - extension Opole, Poland Pogoria Shopping Centre - extension Platan Shopping Centre - extension Promenada Novi Sad, Serbia 48 900m2 GLA Dabrowa Gornicza, Poland Zabrze, Poland F
Slide 32: Serbia
Serbia VOJVODINA REGION 1 881 000 INHABITANTS NOVI SAD - 319 000 NEPI ROCKCASTLE PLC 31 RESULTS PRESENTATION JUNE 2018
Slide 33: Promenada Novi Sad - Phase I (Serbia)
Promenada Novi Sad - Phase I (Serbia) UNDER CONSTRUCTION Novi Sad is the second largest city in Serbia, 70 km from the capital, Belgrade, and is connected by international highways to Budapest, Vienna, Belgrade, Zagreb and Skopje. The property is in a prime location, at the intersection of two main
Slide 34: Romania
Romania SIBIU COUNTY SATU MARE COUNTY 400 000 INHABITANTS 337 000 INHABITANTS SIBIU - 170 000 SATU MARE - 123 000 Sibiu, Romania NEPI ROCKCASTLE PLC 33 RESULTS PRESENTATION JUNE 2018
Slide 35: Festival Sibiu
Festival Sibiu UNDER CONSTRUCTION The 42,200m2 GLA of Festival Sibiu development, will complement the other retail property of the Group in the city, Shopping City Sibiu. Festival has an excellent location within walking distance to Sibiu’s historical city centre and to the main train station. The l
Slide 36: Shopping City Sibiu - extension and refurbishment
Shopping City Sibiu - extension and refurbishment UNDER CONSTRUCTION The extension will add approximately 9,600m2 GLA which will improve the centre’s fashion offering. 100% A large part of the shopping centre is already under refurbishment. Ownership CATCHMENT 67 600m 2* Lettable area AREA for prope
Slide 37: Shopping City Satu Mare
Shopping City Satu Mare UNDER CONSTRUCTION The only modern shopping and entertainment destination in Satu Mare is estimated to open in December 2018. Satu Mare has a population of 123,000 inhabitants, with 288,000 people living within 45-minute drive from Satu Mare Shopping City. It is located in th
Slide 38: Poland
Poland LUBUSZ VOIVODESHIP OPOLE VOIVODESHIP 1 017 000 INHABITANTS 993 000 INHABITANTS ZIELONA GORA - 140 000 OPOLE - 128 000 SILESIAN VOIVODESHIP 4 559 000 INHABITANTS ZABRZE - 175 000 Zielona Gora, Poland NEPI ROCKCASTLE PLC 37 RESULTS PRESENTATION JUNE 2018
Slide 39: Focus Mall Zielona Gora - extension and refurbishment
Focus Mall Zielona Gora - extension and refurbishment UNDER CONSTRUCTION The extension improves the fashion, leisure and entertainment offering. 100% Ownership 28 800m 2 Lettable area for property in use CATCHMENT AREA 15 000m 2 151 000 Estimated lettable area for extension 15-minute drive Q1 2020 2
Slide 40: Platan Shopping Centre - extension
Platan Shopping Centre - extension UNDER CONSTRUCTION Extension and redevelopment works, including the construction of a multi-level car park, started in June 2017. Additional tenants in the extension: Carry, Helios, KFC, Martes Sport, Neonet, Pepco, Reserved, Smyk. 100% Ownership 22 700m 2 Lettable
Slide 41: Solaris Shopping Centre - extension
Solaris Shopping Centre - extension UNDER CONSTRUCTION The building permit has been received and construction has started in 2018. The project includes the development of multi-level basement parking and a new town square in front of the centre’s main entrance. Extension area is scheduled to be comp
Slide 42: Developments under permitting and pre-leasing
Developments under permitting and pre-leasing Shopping City Targu Mures - Phase I Targu Mures, Romania Promenada Plovdiv Plovdiv, Bulgaria RENDER RENDER Zoning has been obtained and permitting is underway for 100% The Group owns over 6.5ha in Plovdiv, the second largest city in Bulgaria, and is plan
Slide 43: Developments under permitting and pre-leasing » continued
Developments under permitting and pre-leasing » continued Korzo Shopping Centre - extension Prievidza, Slovakia Krusevac & Sabac retail parks Krusevac and Sabac, Serbia RENDER RENDER 100% Ownership 100% Ownership The 10,500m2 and 11,700m2 GLA retail parks are The Group is planning a 11,000m2 GLA ext
Slide 44: Developments under permitting and pre-leasing » continued
Developments under permitting and pre-leasing » continued Aurora Shopping Mall Buzau - extension Buzau, Romania Arena Centar Retail Park - extension Zagreb, Croatia RENDER RENDER 100% The Group will start developing a 8,000m2 100% Ownership GLA retail park adjacent to its shopping mall in Ownership
Slide 45: Outlook
Mega Mall, Romania 6 Outlook NEPI ROCKCASTLE PLC 44 RESULTS PRESENTATION JUNE 2018
Slide 46: Achievements and prospects
Achievements and prospects • Achievements: »»Earnings growth above peers in European Real Estate. »»NOI and turnover growth, with low Effort Ratios. »»Executed strategy: ° Expansion - acquisitions and developments ° Decrease in listed securities portfolio ° Strong balance sheet and investment grade
Slide 47: Appendix: Reconciliation of profit to EPRA Earnings and distributable earnings
Appendix: Reconciliation of profit for the period to EPRA Earnings and distributable earnings amounts in €'000 EPRA Earnings Jun 2018 Earnings in IFRS Consolidated Statement of Comprehensive Income 149 042 Fair value adjustments of investment property (86 143) Fair value and net result on sale of fi
Slide 48: Disclaimer
Disclaimer NEPI Rockcastle plc is a commercial property investor and developer, listed on the Main Board of the Johannesburg Stock Exchange Limited (JSE) and Euronext Amsterdam (AEX). The information in this presentation has been included in good faith but is for general informational purposes only.
Slide 49: NEPI ROCKCASTLE PLC RESULTS PRESENTATION JUNE 2018
NEPI ROCKCASTLE PLC 48 RESULTS PRESENTATION JUNE 2018