Colonial Sfl Socimi Sa · BME:COL

Colonial Sfl Socimi Sa — Inmobiliaria Colonial SOCIMI — Q1 2019 Earnings Presentation

44 slides from Colonial Sfl Socimi Sa's earnings presentation, May 2019

  1. Slide 1: First Quarter Results 2019

    First Quarter Results 2019 May 2019 1/19

  2. 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.

  3. Slide 3: Agenda

    Agenda 01 Highlights 02_ Market 03 Operational performance 04 Financial performance 05 Growth drivers 06 Conclusion 3

  4. 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

  5. Slide 5: Highlights: Delivering the Business Plan

    01 Highlights Delivering the Business Plan

  6. Slide 6: Business Plan delivery on track

    01 Highlights 1Q 2019 Business Plan delivery on track OUTSTANDING FINANCIAL RESULTS > Recurring EPS of €6.5 Cts. per share, +41% YoY > Gross Rental Income of €87m, +4% like-for-like > Recurring earnings of €33m, +65% YoY STRONG OPERATIONAL PERFORMANCE > 32,375 sq m let with top tier clients > Very h

  7. Slide 7: Business Plan delivery on track

    01 Highlights 1Q 2019 Business Plan delivery on track > High double digit growth in recurring EPS > Outstanding EPRA Like for Like growth of +4% > Double digit rental price increases Profit & Loss - €m 1Q 2019 YoY Var Solid Fundamentals Gross Rental Income €87m +5% EPRA Vacancy 4% Recurring Net Prof

  8. Slide 8: Market: Scarcity in Grade A

    02 Market Scarcity in Grade A

  9. Slide 9: CBD outperforming the market

    02 Market CBD outperforming the market VACANCY % PRIME ERV HIGHLIGHTS €/sqm/month > New record take-up of 135,000 sqm, +67% YoY BARCELONA +8% > CBD vacancy below 2% -> historically low levels > Prime rents at €26/sq m /month, +8% YoY 1Q 2018 1Q 2019 Vacancy CBD(%) Prime Rents CBD (€/sqm/month) €/sqm

  10. Slide 10: Operational performance: Unparalleled exposure to CBD

    03 Operational performance Unparalleled exposure to CBD

  11. Slide 11: Strong delivery on rental price increases

    03 Operational performance Strong delivery on rental price increases > Outstanding rental growth in every segment > High double digit release spreads > Paris portfolio with additional growth through lower incentives - from15% down to 8% YoY SOLID INCREASE IN RENTAL PRICES GROWTH ON SIGNED RENTS1 REL

  12. Slide 12: Strong delivery on rental price increases across the entire portfolio

    03 Operational performance Strong delivery on rental price increases across the entire portfolio GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 Pedralbes Center Sant Cugat Av. Diagonal, 682 Illacuna Tucumán +135% +33% +32% +25% +24% José Abascal, 45 Edouard VII Francisco Silvela, 42 Sant Cugat Miguel Ángel

  13. Slide 13: Significant letting-up post closing Q1 2019

    03 Operational performance Significant letting-up post closing Q1 2019 > More than 17,000 sq m signed post Q1 2019 closing > Avenida Bruselas 38 fully let just after project delivery > Ribera del Loira 22% let with prestigious tenant AVENIDA BRUSELAS 38 100% LET post Q1 RIBERA DEL LOIRA 22% LET post

  14. Slide 14: Vacancy remains at healthy levels

    03 Operational performance Vacancy remains at healthy levels > Colonial Group vacancy at a healthy 4% > Barcelona and Paris at 1% > Madrid traditional portfolio at 2% EPRA VACANCY BARCELONA1 MADRID1 Axiare & COLONIAL GROUP2 delivered projects “LFL” Colonial Axiare & delivered projects “LFL” Colonial

  15. Slide 15: Capturing reversion through successful letting-up

    03 Operational performance Capturing reversion through successful letting-up > Strong progress on letting-up Madrid portfolio > Madrid pro-forma vacancy at 7% > Group pro-forma vacancy at 3% EPRA VACANCY POST Q1 2019 LETTINGS Avenida Bruselas 38 MADRID1 (324bp) Post 1Q 2019 Ribera del Loira COLONIAL

  16. Slide 16: ESG Strategy on track

    03 Operational performance ESG Strategy on track > GRESB / BREEAM 2019 Award for Responsible Real Estate Investment > #1 Portfolio for Responsible Real Estate Investment in Europe > ESG excellence at the Core of Strategy BENCHMARK / INDEX ACHIEVEMENT / RATING > GRESB / BREEAM 2019 Award for Responsi

  17. Slide 17: Financial performance: Profitable Growth improving the quality of returns

    04 Financial performance Profitable Growth improving the quality of returns

  18. Slide 18: Strong top line growth

    04 Financial performance Strong top line growth > +5% of top line growth in Q1 2019 > Outstanding +4% like for like > Madrid with highest LFL of +7% GROSS RENTAL INCOME - €M EPRA Projects & TOTAL Acquisitions & like-for-like1 refurbishments +4% disposals +1% LFL1 GROUP +5% +4% +2% (1%) 2 (1) 87 3 BC

  19. Slide 19: Like-for-like rental growth price driven

    04 Financial performance Like-for-like rental growth price driven > Like-for-like growth driven by rental price increases > Barcelona and Paris almost fully price driven > Madrid growth driven by a combination of price and volume GROSS RENTAL INCOME - €M STRONG EPRA LIKE-FOR-LIKE GROWTH EPRA like- G

  20. Slide 20: Improved credit profile through active liability management

    04 Financial performance Improved credit profile through active liability management > Active liability management improving cost of debt > A stronger balance sheet with high liquidity > Highest Corporate Rating in Spanish Real Estate ACTIVE LIABILITY MANAGEMENT … … ENHANCING THE BALANCE SHEET Prime

  21. Slide 21: Profitable growth with enhanced quality

    04 Financial performance Profitable growth with enhanced quality > High double digit EPS growth > High double digit recurring earnings growth > Non-Core Disposals enhancing the quality of returns STRONG EPS GROWTH VARIANCE ANALYSIS – RECURRING EARNINGS RECURRING EPS Offloading Secondary Assets Cts€/

  22. Slide 22: Growth drivers: A strong platform for future value creation

    05 Growth drivers A strong platform for future value creation

  23. Slide 23: Future value creation

    05 Growth drivers FUTURE VALUE CREATION 1 Leadership in Prime Offices 2 €1.3bn of project pipeline 3 Capturing reversion in rents 4 Strong investment market 5 Disciplined capital allocation 23

  24. Slide 24: €1.3bn of CBD Project Pipeline with strong visibility

    05 Growth drivers 2 €1.3bn of CBD Project Pipeline with strong visibility > 4 out of 12 projects pre-let YTD > Enhanced visibility on cash flow and value creation > Important value creation to be captured 4 of 12 projects pre-let CBD 98% Total 98% Cost CBD €1.3bn & City Center1 2 24 1 CBD, 22@ Barce

  25. Slide 25: Louvre Saint-Honoré Project – Pre-let to Richemont

    05 Growth drivers 2 Louvre Saint-Honoré Project – Pre-let to Richemont A MAJOR PARIS PROJECT TO CREATE A NEW DESTINATION PRELET WITH RICHEMONT GROUP Delivery 2023 > 20 Year turnkey contract signed with the Richemont Group > Redevelopment of over 18,000 sq m of retail space - Building permit obtained

  26. Slide 26: Diagonal-Pedralbes Centre – Uniqlo Flagship

    05 Growth drivers 2 Diagonal-Pedralbes Centre – Uniqlo Flagship BARCELONA PROJECT PIPELINE PRELET WITH UNIQLO Delivery 1H 19 > 17 year contract signed for UNIQLO flagship store > UNIQLO a strong anchor tenant - 1,947 sq m above ground signed with UNIQLO & other tenants - GLA below ground floor under

  27. Slide 27: Capturing reversion - Attractive CBD contract portfolio

    05 Growth drivers 3 Capturing reversion - Attractive CBD contract portfolio > Delivery of double digit release spreads > Renovation programs as rental growth accelerator > Solid positioning in growing markets STRONG DELIVERY ON REVERSION ATTRACTIVE RENT ROLL RENOVATION PROGRAM TO MAXIMIZE GROWTH COM

  28. Slide 28: Investment Market with strong support for Prime

    05 Growth drivers 4 Investment Market with strong support for Prime > Investor interest for prime product remains strong > Quarterly capital value increases ongoing > Colonial’s assets with prudent appraisal values Madrid City Center (inside M30) Barcelona City Center Paris CBD Terreis deal +7% Prem

  29. Slide 29: Alpha Rotation 2019 - Torre Marenostrum, 22@ Barcelona

    05 Growth drivers 5 Alpha Rotation 2019 - Torre Marenostrum, 22@ Barcelona Acquisition of the remaining 45% stake of Torre Marenostrum for €28.5m (implicit GAV of 4.508 €/sq m)1 Torre Marenostrum CORE WITH VALUE ADDED POTENTIAL Creation of a unique product > Full ownership (previously 55% stake) of

  30. Slide 30: Alpha Rotation 2019 - Sources of Value Creation

    05 Growth drivers 5 Alpha Rotation 2019 - Torre Marenostrum, 22@ Barcelona Acquisition of the remaining 45% stake of Torre Marenostrum €28.5m (implicit GAV of 4.508 €/sq m)1 Sources of Value Creation 1. Acquisition of 45% stake at 13% discount to NAV 12/18 > 4% discount to 12/18 GAV > Acquisition of

  31. Slide 31: Alpha Rotation 2019 – Value Creation in 4 Steps

    05 Growth drivers 5 Alpha Rotation 2019 – Value Creation in 4 Steps ALPHA ROTATION 2019 – VALUE CREATION IN 4 STEPS 1. Disposal of a secondary hotel at premium to 12/18 GAV 2. Acquisition of a 45% stake in Torre Marenostrum (prime22@) at a discount to 12/18 NAV 3. Renovation program in Torre Marenos

  32. Slide 32: Discipline on Capital Allocation

    05 Growth drivers 5 Discipline on Capital Allocation > Ongoing flight to quality through disciplined capital allocation > Disposal of secondary assets for €0.9bn in 2017 & 2018 > Alpha Rotation 2019 enhancing focus & prime exposure INVESTMENTS & DIPOSALS SINCE 2015 - €m Alpha 2015 Alpha I Alpha II A

  33. Slide 33: Conclusion

    06 Conclusion

  34. Slide 34: Delivery of Business Plan on track

    06 Conclusion DELIVERY OF BUSINESS PLAN ON TRACK Financials > Recurring EPS of €6.5 Cts. per share, +41% YoY > Recurring earnings of €33m, +65% YoY > Gross Rental Income of €87m, +4% like-for-like Operations > Very healthy vacancy levels at 4% > Strong letting up of Madrid portfolio > Successful pre

  35. Slide 35: Q&A – Save the date

    Q&A “SAVE THE DATE” Don´t miss our next events > July 5: Field Trip - BARCELONA > Mid-October: Investor Day - MADRID

  36. Slide 36: Investment Markets remain strong

    APPENDICES Investment Markets remain strong > Scarcity of Grade A product > Strong investor interest for CBD > Spreads vs reference rates remain attractive PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > Investor interest faces scarce supply BARCELONA > Prime yields stabilizing at 3.75% > Healthy s

  37. Slide 37: CBD focus ensures strong letting performance

    APPENDICES CBD focus ensures strong letting performance # CONTRACTS SQM SIGNED GRI SECURED1 INCENTIVES2 EPRA VACANCY3 BARCELONA 7 9,867 €3m 10% 9%4 1% MADRID 9 12,716 €3m 8% 10% PARIS 9 9,792 €7m 8% 1% TOTAL 25 32,375 €13m 9% 4% (1) Annualized figures of signed contracts (2) Incentive ratio = econom

  38. Slide 38: Capturing Reversion – Renovation Programs

    APPENDICES Capturing Reversion – Renovation Programs > Smart tenant rotation unlocking growth opportunities > Renovation programs with rapid execution > Solid base for further ERV and Capital Value Growth 106 Haussmann Ortega y Gasset, 100 Torre Marenostrum 22@ CBD CBD prime GLA of 6,237 sqm with 52

  39. Slide 39: Barcelona Letting Performance

    APPENDICES Barcelona Letting Performance BARCELONA – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 9,867 sq m let Pedralbes Center Sant Cugat > Max. rent signed 25.0 €/sqm/month (1) > ERV growth +21% +135% +33% vs ERV1 vs ERV1 > Release spread2 +23% New Lettings Av. Diagona

  40. Slide 40: Madrid Letting Performance

    APPENDICES Madrid Letting Performance MADRID – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 12,716 sq m let Tucumán José Abascal, 45 > Max. rent signed 31.9 €/sqm/month > ERV growth +5% (1) +24% +24% release vs ERV1 spread > Release spread2 +22% New Lettings 5.851 sq m Fra

  41. Slide 41: Paris Letting Performance

    APPENDICES Paris Letting Performance PARIS – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 9,792 sq m let Edouard VII Louvre Saint-Honoré > Max. rent signed 852 €/sqm/year (1) > ERV growth +10% +8% +21% release vs ERV1 spread > Release spread2 +7% New Lettings 103 Grenelle

  42. Slide 42: Colonial portfolio outperforming the market on occupancy

    APPENDICES Colonial portfolio outperforming the market on occupancy > Colonial with solid vacancy levels in every city > Colonial strongly-positioned vs market average > Project deliveries in Madrid enhance reversion EPRA VACANCY VACANCY COLONIAL VS. MARKET BARCELONA Total Market Prime CBD Market Co

  43. Slide 43: Delivering the Business Plan

    APPENDICES Delivering the Business Plan > High double digit EPS growth delivered > High double digit recurring earnings growth > Business Plan delivery on track STRONG EPS GROWTH PROFIT & LOSS ACCOUNT RECURRING EPS Cts€/share 6.5 +41% 4.6 1Q 2018 1Q 2019 RECURRING RESULT €m 33 +65% 20 1Q 2018 1Q 201

  44. Slide 44: www.inmocolonial.com

    www.inmocolonial.com © Colonial

Inmobiliaria Colonial SOCIMI — Q1 2019 Earnings Presentation on 6ix