Slide 1: FY 2019 Call Presentation
2019 FY 2019 CALL P R E S E N TAT I O N H1 2019
Slide 2: COVID-19 circumstances notice
In light of the current circumstances due to COVID-19, the following presentation aims to give a factual picture of Emirates REIT business with a very limited forward-looking estimate due to the rapidly changing business and inforced measured environment which we are adapting to.
Slide 3: Speakers
SPEAKERS Sylvain Vieujot Alain Debare Sheikh Muhammed Moeen Chief Executive Officer Group Head of Real Estate Finance Director Managed by Equitativa 3
Slide 4: UAE Real Estate Market 2019: Office Supply
UAE REAL ESTATE MARKET 2019 OFFICE SUPPLY • Total office stock to around 8.7 million sq m. Office supply is expected to increase to 9.1 million sq m by the end of 2020 • It is expected that the Government initiatives launched to boost demand and increase business activity in Dubai will bring in more
Slide 5: UAE Real Estate Market 2019: Performance
UAE REAL ESTATE MARKET 2019 PERFORMANCE • Average Grade A rents in the Central Business District (CBD) declined by 13% in the last quarter of 2019 to reach AED 1,358 when compared to the same period last year, with select buildings performing better. • Average vacancy in the CBD increased to 14% (y-
Slide 6: UAE Real Estate Market 2019: Outlook
UAE REAL ESTATE MARKET 2019 OUTLOOK • The office market is expected to remain under pressure due to subdued market conditions and Covid-19 consequences. • However, the government has launched multiple initiatives to target new and existing businesses. On one hand, it is trying to attract new entrant
Slide 7: Financial Highlights FY 2019
FINANCIAL HIGHLIGHTS FY 2019 • Rental Income +5.1% year-on-year under challenging market conditions to USD 64.5m (AED 236.7m) • Total Property Expenses -14.9% year-on-year to USD 14.2m (AED 52.2m) • Total Property Income +4.2% year-on-year to USD 72.9m (AED 267.6m) • Net Property Income +10.2% year-
Slide 8: Financial Highlights FY 2019: Provisions and Profit
FINANCIAL HIGHLIGHTS FY 2019 • Provisions amounted to USD 6.9m (AED 25.6m) in FY 2019 vs USD 3.3m (AED 12.0 m) in FY2018 • Profit before Fair Valuation amounted to USD 4.4m (AED 16.1m) vs 11.3m (AED 41.5m) in FY2018 Managed by Equitativa 8
Slide 9: Financial Highlights: Fair Valuation Losses
FINANCIAL HIGHLIGHTS FY 2019 Movement in Deferred Income 17 Fair Valuation Losses USD 30.0m ( 114.0m) Fait Value adjustment on (1,710) Right of use Asset Net Loss after Fair Valuation USD 25.6m (AED 94.0m) Additional Capitalization (7,268) (fit-out / re-development work) EMIRATES REIT PRIME DUBAI SE
Slide 10: Financial Highlights: NAV, Liquidity, LTV
FINANCIAL HIGHLIGHTS FY 2019 • Net Asset Value stands at USD 469.7m (AED 1.7bn) or USD 1.57 per share as at 31 Dec 2019 • Liquidity stood at USD 48.4m (AED 177.9m) vs USD 38.2m (AED 140.2m) in FY 2018 • Loan to Value (LTV) stands at 47.9% Managed by Equitativa 10
Slide 11: Portfolio Highlights
PORTFOLIO HIGHLIGHTS 11
Slide 12: Operational Highlights FY 2019
OPERATIONAL HIGHLIGHTS FY 2019 • Leasing - 71 new leases (120,160 sqft) signed during 2019 • Renewals - Over 155,000 sqft of renewals (93 leases) - Since Jan 2020, renewal of the two largest office tenants for 5 years accounting 4% of Total Rental Income • 5.1% increase in rental income and 4.2% inc
Slide 13: Operating Margins FY 2019
OPERATING MARGINS FY 2019 • Improvement in operating margins from 76.1% in FY 2018 to 80.5% FY 2019 - Renegotiation of all contracts - Index Tower asset under direct management of Equitativa - Continuous monitoring of all expenses • Net Property Income increase by 10.2% Managed by Equitativa 13
Slide 14: Property Highlights FY 2019
PROPERTY HIGHLIGHTS FY 2019 LEASABLE AREA INCOME BY BY UNIT TYPE UNIT TYPE COMMERCIAL COMMERCIAL 49% 72% EDUCATION EDUCATION 41% 27% RETAIL RETAIL 10% 10% Managed by Equitativa 14
Slide 15: Property Operations Highlights FY 2019
PROPERTY OPERATIONS HIGHLIGHTS FY 2019 INDEX TOWER OFFICE PARK • Occupancy 50% • Occupancy 89% • 38,000 sqft of new lease (33 leases) and 45,000 sqft of • Secured 45,497 sqft with 8 new leases renewals (44 leases) • Desirable property and good pipeline, • 21,300 sqft of non renewed leases 10 active
Slide 16: Annualised Rent per Property
ANNUALISED RENT PER PROPERTY FY 2019 * * Contracted income without provisions Managed by Equitativa 16
Slide 17: Financial Highlights
FINANCIAL HIGHLIGHTS 17
Slide 18: Total Property Income
TOTAL PROPERTY INCOME (USD M) +4.2% 69.9 72.9 18.3 18.3 18.8 17.3 17.8 17.9 17.9 16.5 FY 2018 FY 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Total Property Income: This includes Rentals, Service Fee and Other Property Income Managed by Equitativa 18
Slide 19: Net Property Income
NET PROPERTY INCOME (USD M) +10.2% 53.2 58.7 16.0 15.4 14.0 13.5 13.5 13.8 13.1 12.6 FY 2018 FY 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net Property Income: Total Property Income less Property Operating Expenses Managed by Equitativa 19
Slide 20: FFO
FFO (USD M) (61.3%) 11.3 4.4 4.1 4.1 3.4 3.8 2.3 1.0 (0.3) (2.7) FY 2018 FY 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Managed by Equitativa 20
Slide 21: EBITDA
EBITDA (USD M) +2.5% 32.5 33.4 11.6 9.3 9.3 8.8 8.5 8.6 5.4 4.4 FY 2018 FY 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Managed by Equitativa 21
Slide 22: Balance Sheet Overview
BALANCE SHEET OVERVIEW FY 2019 IN USD M 31 DEC 2019 31 DEC 2018 CHANGE USD 1,058.8 USD 1,058.8 INVESTMENT PROPERTY 919.4 939.9 (2%) Right-of-use assets 53.3 54.5 Lease Liability Trade & Other Receivables 37.7 27.2 Other Payables & TOTAL ASSETS 1,058.8 1,009.7 +5% Cash & Equivalents 48.4 Derivative L
Slide 23: Summary FY 2019
SUMMARY FY 2019 USD 919m 222,936 m2 PORTFOLIO VALUE NET LEASABLE AREA As of 31 Dec 2019 $919m USD 470m 73% NET ASSET VALUE OCCUPANCY USD 1.57per share 7.6 years NET ASSET VALUE WAULT(1) NAV per share is calculated by the REIT administrator. Growth rates are adjusted for dividends and annualized. For
Slide 24: COVID-19
EQUITATIVA COVID-19
Slide 25: COVID-19 Response: Internal & Preventive Measures
COVID-19 RESPONSE INTERNAL & PREVENTIVE MEASURES As we continue to experience a truly unprecedented situation with how the pandemic is affecting all of our families, our businesses and our way of life, we wanted to share how Equitativa is addressing the impacts of COVID-19 Coronavirus. How we are re
Slide 26: COVID-19 Response: Internal & Preventive Measures
COVID-19 RESPONSE INTERNAL & PREVENTIVE MEASURES • Communication: Our management team have been • Sanitization & Operational Measures: We have regularly communicating important government implemented several initiatives to ensure the safety of our announcements, news on new legislation and market bu
Slide 27: COVID-19 Response: Internal Measures
COVID-19 RESPONSE INTERNAL MEASURES Equitativa’ Group online management software developed over the last 15 years with the following features: • Always up to date and remotely accessible by employees, tenants, clients, asset managers, auditors, etc • Acquisitions deal flow of over 1,500 assets • Ass
Slide 28: COVID-19 Response: Defensive Sectors & Portfolio Resilience
COVID-19 RESPONSE DEFENSIVE SECTORS & PORTFOLIO RESILIENCE Key commercial tenants operate in industries which are not • Nokia represents around 10% of Office Park income primarily affected by the current market conditions • Coca-Cola represents around 6% of Office Park income • Our largest pharmaceu
Slide 29: COVID-19 Response: Personalized Tenant Support
COVID-19 RESPONSE INTERNAL MEASURES PERSONALIZED TENANT SUPPORT • Review tenants on a case by case basis • Provide adapted and customized support • Considering flexible deals to secure renewals and long term tenant retention • Focus on a long term view for tenants and investors • Conducting means te
Slide 30: Questions & Answers
QUESTIONS & ANSWERS EQUITATIVA
Slide 31: Thank You
THAN R'YQU EQUITATIVA