Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial — Q1 2016 Earnings Presentation
34 slides from Colonial Sfl Socimi Sa's earnings presentation, May 13, 2016
Slide 1: First Quarter Results 2016
First Quarter Results 2016 13 May 2016 1
Slide 2: Disclaimer
Disclaimer By accepting this presentation and/or by attending this presentation, you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this disclaimer. The information contained in this presentation (“Presentation”) has been prepa
Slide 3: Agenda – First Quarter 2016 Results Presentation
AGENDA – FIRST QUARTER 2016 RESULTS PRESENTATION AGENDA PRESENTING MANAGEMENT TEAM Pere Viñolas Highlights CEO 1 2 Office markets 3 Operating performance Carmina Ganyet Corporate Managing Director 4 Financial review 5 Growth drivers Carlos Krohmer 6 Conclusion & Outlook Chief Corporate Development O
Slide 4: Highlights
1 HIGHLIGHTS
Slide 5: Highlights: Execution of growth strategy on track
1 HIGHLIGHTS FIRST QUARTER 2016 Execution of growth strategy on track Successful delivery of growth strategy Double digit growth in Gross Rental Income: +20% +8% Like for Like - increase +12% Successful Project Delivery & 2015 Acquisitions Significant increase of recurring net profit: +110%
Slide 6: Office Markets
@D OFFICE MARKETS
Slide 7: Macroeconomic context
2 OFFICE MARKETS Macroeconomic context Fundamentals remain attractive for the Colonial Group despite increased volatility in capital markets Market Trends GDP Growth The world economy’s growth rate will speed up in 2016 to 3.4% (3.1% in 2015) WORLD & EU Eurozone gaining positive momentum in the
Slide 8: Rental Market: take-up and vacancy
2 OFFICE MARKETS Rental Market Sustained momentum in take-up faces scarcity of Grade A product in CBD BARCELONA MADRID PARIS CBD # of transactions 113 86 90 122 104 95 84 90 129 104 200 259 263 347 305 TAKE-UP (‘000 sq m) 163 141 138 134 113 106 112 103 96 97 83 90 71 68 69 1Q 15 2Q 15 3Q 15 4Q 15 1
Slide 9: Rental Market: Barcelona prime rents
2 OFFICE MARKETS Rental Market Prime Product in CBD consolidates as key driver to capture selective demand and rental growth Growth potential in prime rents underpinned by strong fundamentals in every market 2016 1Q prime rents with slight positive momentum in the three markets Take Up Analisis
Slide 10: Investment Market
2 OFFICE MARKETS Investment Market Investment volumes of 1Q 2016 moderate compared to previous year, mainly due to the lack of product Spread vs reference rates remain at very attractive levels Room for further capital value growth through: 1. Additional yield compression for high quality assets
Slide 11: MSCI Property Index Benchmark
2 OFFICE MARKETS MSCI Property Index Benchmark Colonial clearly outperforming the IPD benchmark in Spain and France CBD Offices with outstanding performance in every market CBD Offices Paris with double digit total returns Total Return 20151 - Spain Total Return 20151 - France Colonial Spain 20.
Slide 12: Operating Performance
3 OPERATING PERFORMANCE
Slide 13: Letting activity with strong momentum
3 OPERATING PERFORMANCE – FIRST QUARTER 2016 Letting activity with strong momentum Ongoing strong momentum in activity – more than half of the 2016 budget achieved YTD Barcelona with record volume, more than 31,000 sq m signed Madrid remains strong, close to 5,000 sq m let in 6 transactions Pa
Slide 14: Letting activity with strong momentum: prime positioning
3 OPERATING PERFORMANCE – FIRST QUARTER 2016 Letting activity with strong momentum Prime Positioning permits to attract & retain top clients Torre Marenostrum Diagonal, 609-615 Recoletos, 37-41 100% let 94% let 100% let 22,394 2,922 2,693 sqm sqm sqm SPAIN Pharmaceutical Company #Cloud 103 Grenelle
Slide 15: EPRA Occupancy accelerating
3 OPERATING PERFORMANCE – FIRST QUARTER 2016 EPRA Occupancy accelerating Prime positioning with the adequate product ensures successful letting-up EPRA Office Occupancy at 95%, +1152 bps in 12 months Strong performance of Colonial in every market EPRA Financial Office Occupancy Var. 12 months EP
Slide 16: Successful delivery of growth strategy
3 OPERATING PERFORMANCE – FIRST QUARTER 2016 Succesfull delivery of growth strategy Sustained strong delivery of GRI growth 1. Strong first quarter momentum in passing GRI through delivery of reversionary potential 2. Additional impacts through rental price increases still to come through 3. Solid b
Slide 17: Unlocking value through ongoing repositioning
3 OPERATING PERFORMANCE – FIRST QUARTER 2016 Unlocking value through ongoing repositioning Unlocking value from the current portfolio Continuing progress in execution of value added strategies and portfolio repositioning Source for further value creation through future rental uplifts and “create
Slide 18: Financial Review
4) FINANCIAL REVIEW
Slide 19: Successful execution of growth strategy
4 FINANCIAL REVIEW – FIRST QUARTER 2016 Successful execution of growth strategy Successful execution of growth strategies as base for double digit GRI increase 1. Strong underlying growth from like for like portfolio: +8% 2. Additional rental growth from value added strategies & acquisitions: +12% G
Slide 20: Strong underlying growth in every market
4 FINANCIAL REVIEW – FIRST QUARTER 2016 Strong underlying growth in every market Strong recovery of gross rental income Barcelona with outstanding like for like growth – catching up versus previous years Madrid remains strong at 5% like for like increase Paris with sustained strong performance
Slide 21: Solid Capital Structure with substantial firepower
4 FINANCIAL REVIEW – FIRST QUARTER 2016 Solid Capital Structure with substantial firepower Solid Capital Structure with optimal financing to implement growth strategy Competitive financing cost in Spain & France First class long term financing structure with important fire power capacity Competi
Slide 22: Positive Momentum in Earnings
4 FINANCIAL REVIEW – FIRST QUARTER 2016 Positive Momentum in Earnings Significant increase in Net Profit through: Delivery of strong GRI increase based on successful growth strategy Savings in financing costs due to active liability management in 2015 Recurring Income - €m - Variance Analysis €m
Slide 23: Strong share price performance
4 FINANCIAL REVIEW – FIRST QUARTER 2016 Strong share price performance Resilient share price performance in volatile capital markets Capital markets with strong support for Colonial’s growth strategy Share price YTD outperforming benchmarks and peers Analyst coverage Colonial versus Benchmarks #
Slide 24: Growth Drivers
5 GROWTH DRIVERS
Slide 25: Value added initiatives – Current pipeline
5 GROWTH DRIVERS Value added initiatives – Current pipeline Prime Factory project execution on track Estébanez Calderon finishing demolition works and brokers for commercialization assigned Principe de Vergara with ongoing demolishing works ESTÉBANEZ CALDERÓN 3-5 PRÍNCIPE DE VERGARA 112 Good pro
Slide 26: Value added initiatives – Current pipeline
5 GROWTH DRIVERS Value added initiatives – Current pipeline Progress on maximizing value creation in recent core acquisitions Repositioning works on track optimizing GLA in size and quality Assets with good traction in the letting market SANTA ENGRACIA 9, AVENUE PERCIER Asset located in an area
Slide 27: New Acquisitions – Current pipeline
5 GROWTH DRIVERS New Acquisitions – Current pipeline Acquisition pipeline of more than €400m under exclusivity Colonial is currently negotiating under exclusivity the acquisition of more than €400m of Pure Prime Office Assets, that could be executed in the next weeks All this opportunities of hi
Slide 28: Attractive growth profile
5 GROWTH DRIVERS Attractive growth profile Attractive growth profile in Rents & Value Current Portfolio & Projects with significant reversion potential 1Q 2016 with proven delivery of GRI reversion Additional value creation through successful execution of growth strategy in a context of attrac
Slide 29: Colonial's positioning in rental cycle looks good
5 GROWTH DRIVERS Colonial’s positioning in rental cycle looks good Colonial’s positioning in rental cycle looks good Madrid & Barcelona remain as most attractive European markets in rental growth perspective Paris CBD gaining important momentum in rental price acceleration European Property Cloc
Slide 30: Conclusion & Outlook
< Oo oO —_l - > Oo ce] z =) Nn > —_! S) Zz Oo w) 6
Slide 31: Delivery of Growth Strategy on track
6 CONCLUSION & OUTLOOK Delivery of Growth Strategy on track 1. Superior performance of prime positioning – beating IPD in all markets 2. Strong occupancy improvement in a year 3. Double digit rental growth 4. Capturing reversion ensures positive momentum going forward 5. Acquisition pipeline of €400
Slide 32: Conclusion & Outlook Q & A
© CONCLUSION & OUTLOOK ye psa 32
Slide 33: Appendix: Profit & Loss Account
APPENDIX Profit & Loss Account Profit & Loss Accounts Recurring Earnings Income - €m - Variance Analysis Results analysis - €m 1Q 2016 1Q 2015 Gross Rents 66 55 Net operating expenses (1) (7) (6) Overheads (9) (8) 2.5 (4.7) Recurring EBITDA 50 41 8.6 Recurring financial result (20) (23) 12.3 Income
Slide 34: Q&A
Q&A 34
Inmobiliaria Colonial — Q1 2016 Earnings Presentation on 6ix