Helios Re Socimi, S.a. · BME:SCHLR
Helios Re Socimi — Lar España Real Estate SOCIMI — Investor Presentation (April 2018)
49 slides from Helios Re Socimi's investor presentation, April 2018
Slide 1: Corporate Presentation
CORPORATE PRESENTATION www.larespana.com The Spanish Retail Specialist April 2018
Slide 2: Index
Index 01 02 03 04 05 Company Investment Financial ESG Appendix 1 Description Highlights Results Results Appendix 2
Slide 3: Company Description
01 Company Description
Slide 4: Snapshot
01 Company Description 4 Snapshot Shareholder Structure First IPO of a Spanish REIT listed on the Spanish Stock Exchange Other investors PIMCO 42.9% 19.6% Focused on creating both sustainable income and strong capital returns for shareholders Franklin Lar España is managed by Grupo Lar, private Real
Slide 5: Portfolio at a glance
01 Company Description 5 Portfolio at a glance GAV1 €1.50 Bn Logistics 6% Retail Offices Residential 82% 6% 6% Unique exposure to real Resilient prime dominant Recurrent cash flow estate retail assets and the shopping centers in generation from a 6.6% Net Spanish consumer and EPRA Annualized Net Ren
Slide 6: A Cherry Picked Portfolio
01 Company Description 6 A Cherry Picked Portfolio Retail Acquisitions Other Assets Acquisitions Alovera II As Termas Divestments Portal de la Alovera III Marina Egeo Alovera IV Nuevo Alisal Almussafes Palmas Altas Megapark Albacenter P. Marina Development Hypermarket Hypermarket Leisure Area P. Mar
Slide 7: Major corporate milestones from 2017 & Q1 2018
01 Company Description 7 Major corporate milestones from 2017 & Q1 2018 JAN MAR MAY JUL SEP DEC FEB +15.8% Abadía Retail Dividend +19.5% Vidanova Parc Analyst Day Rivas Futura Asset Revaluation Park Acquisition Payment Asset Revaluation Credit for Construction Acquisition since Acq. 22 Retail Units
Slide 8: Board of Directors & Critical Activities
01 Company Description 8 Board of Directors & Critical Activities Independent and experienced Board: 5 independent directors (5 out of 7) Critical Activities internalized José Luis del Valle Roger Cooke Pedro Luis Uriarte Sergio Criado Jon Armentia Susana Guerrero Chairman and Independent Independen
Slide 9: External Manager: A Real Estate Reference
01 Company Description 9 External Manager: A Real Estate Reference Grupo Lar now owns a 5.7% stake in Lar España, subject to a lock-up period Manager New IMA recently signed Grupo LAR Key Facts 1 Family owned Company +40Y of experience Retail Offices 39 Shopping centres 9 Office buildings developed
Slide 10: Investment Strategy Focused in Retail
01 Company Description 10 Investment Strategy Focused in Retail Investment Target Creation of unique shopping Criteria 100% experiences levered ownership IRR>12% Customer journey analysis Value-Creation Potential Optimum size for area of influence Dominant Optimal and fine-tuned tenant line-up Core+
Slide 11: The value of a retail platform
01 Company Description 11 The value of a retail platform Main market players by owned GLA, Lar España has a clear objective to consolidate among the including GLA under development1 top 3 retail operators in Spain: target to selectively increasing GLA to generate revenue synergies Peer 1 584,222 14
Slide 12: Strong Transformation + Innovation
01 Company Description 12 Strong Transformation + Innovation Transformation Strategy Digital Innovation Big Data Customer Intelligence Full Market Connectivity Knowledge Webs Seeketing APPS System WIFI Social Media E-Beacons c.90k 28% 128 sqm Rotation Rate since Leased since Relettings + New Letting
Slide 13: Business Plan Guidance 2018-2021
01 Company Description 13 Business Plan Guidance 2018-2021 Target Returns ▪ 12% Target Annual Return on investments ▪ €380m of divestments over the next 24 months From Office, residential and non-core retail assets Divestments ▪ >€90 Mn of divestments From all logistics assets ▪ Finance all existing
Slide 14: Investment Highlights
02 Investment Highlights
Slide 15: Top 10 Value Drivers
02 Investment Highlights 15 Top 10 Value Drivers 10 1 Attractive Dividend Momentum of Real Policy Estate in Spain /Yield Compression 9 2 ANNUALIZED NET RENT1 NET LTV5 €73.1 Mn 35% Optimal Debt Upside from the Total Management Existing Portfolio CURRENT POTENTIAL ANNUALIZED AVG. COST OF DEBT NET RENT
Slide 16: Value Driver 1: Momentum of RE in Spain / Yield Compression
02 Investment Highlights 16 Value Driver 1: Momentum of RE in Spain / Yield Compression 1 2 3 4 5 6 Spanish economy has been It is expected to continue Consumer´s Confidence Unemployment Rate Future Investment Spanish Real Estate surprising on the upside outperforming the keeps growing in line with
Slide 17: Value Driver 2: Potential from the Existing Retail Portfolio
02 Investment Highlights 17 Value Driver 2: Potential from the Existing Retail Portfolio +c.60% +5.7% +6.4% +c.8% +>6% Estimated Rental Topped-Up NIY Topped-Up Expected NIY Expected NIY Increase Potential Reversionary NIY Future Investments Existing Developments 15 102 Existing Income Generating Ass
Slide 18: Value Driver 3: Strong Operating Results
02 Investment Highlights 18 Value Driver 3: Strong Operating Results Lar España is outperforming the market Letting activity at the core of the strategy Sales 2017 Visits 2017 +13% €636.2 Mn 56.9 Mn RENTAL GROWTH 10% Lar España 2017 ROTATION Retail Sales RATE Lar España +3.3% Footfall3 +2.7% +36% 12
Slide 19: Value Driver 3: Strong Operating Results
02 Investment Highlights 19 Value Driver 3: Strong Operating Results All figures refer to FY 2017 period Vs FY 2016 €67.4 Mn €1.8 Mn Active Asset & Tenant Management LfL Occupancy Rate LfL NOI GRI LfL Mall Income Incentives Growth Growth Growth Growth to Tenants + Smart Capex in Operating Assets +3.
Slide 20: Value Driver 4: Innovation Strategy
02 Investment Highlights 20 Value Driver 4: Innovation Strategy Disruptive projects differentiating among our competitors To position Lar España To create shared value to lead economic and as the leader in digital transformation social progress, and also generate financial in the retail sector retur
Slide 21: Value Driver 4: Innovation Strategy
02 Investment Highlights 21 21 Value Driver 4: Innovation Strategy Disruptive projects differentiating among our competitors Big Data Full Conectivity Market Knowledge Market Place DIGITALIZATION & WEBS DIFFERENTIATION CUSTOMER APPS SEEKETING SYSTEM TRANSACTIONAL INTELLIGENCE WIFI E-BEACONS WEB SOCI
Slide 22: Value Driver 5: Developments – Lagasca 99
02 Investment Highlights 22 Value Driver 5: Developments – Lagasca 99 VALUATION GLA Sqm Location Purchase Date +20.1% Over acq. Price 26,203 Madrid 30 January 2015 (Including Capex) In process Acquisition Price1 Market Value (Dec 2017)1 €50.1 Mn €83.3 Mn 1Corresponds to the 50% of the JV with Pimco
Slide 23: Value Driver 5: Developments – Vidanova Parc
02 Investment Highlights 23 Value Driver 5: Developments – Vidanova Parc Opening Pre Letting Expected Rent All-in Costs Building Permit 2 Expected Date % of GLA € Mn € Mn Edification Works Owned 44,252 Q3 2018 95% 4.0 45.7 09/2017 Plot acquired in 2015 Tenants already signed Project Key Points Excel
Slide 24: Value Driver 5: Developments – Palmas Altas
02 Investment Highlights 24 Value Driver 5: Developments – Palmas Altas Opening Pre Letting Expected Rent All-in Costs Building Permit AREA1 2 Expected Date % of GLA € Mn € Mn Edification Works Owned 100,000 Q2 2019 59% 14.0 191.1 07/2017 Plot acquired in 2016 Tenants already signed Project Key Poin
Slide 25: Value Driver 6: Attractive valuation of the Existing Portfolio
02 Investment Highlights 25 25 Value Driver 6: Attractive valuation of the Existing Portfolio Total Portfolio Portfolio Value evolution LfL 2017/16 Since Acquisition € Mn Portfolio Value 28.5% 21.7% 61.5% 11.1% ASSET MANAGEMENT IMPACT Valuation Growth CAGR1 1,538 1,536 12.5% 9.3% 38.5% 1,275 YIELD C
Slide 26: Value Driver 7: Asset Rotation Policy Aimed at Maximizing Returns
02 Investment Highlights 26 Value Driver 7: Asset Rotation Policy Aimed at Maximizing Returns Divestments: €470 Mn Capex Investment1 c.€247 Mn Office Logistics Lagasca 99 Other Mature including development costs2 Portfolio Portfolio delivery Assets New Investments €170 Mn €90 Mn €110 Mn €100 Mn c.€2
Slide 27: Value Driver 8: Acquisition Pipeline Aimed at Increasing Retail Platform
02 Investment Highlights 27 Value Driver 8: Acquisition Pipeline Aimed at Increasing Retail Platform Current Opportunities +€220 Mn of Investment Pipeline ✓ Large and visible pipeline Short Term Pipeline 110k+ including actionable off-market acquisitions with yields in the 6% area Asset Class Aprox.
Slide 28: Value Driver 9: Debt Management as a Means of Value Creation
02 Investment Highlights 28 Value Driver 9: Debt Management as a Means of Value Creation Key Figures1 of the financing Back-loaded Amortization Profile €590.2 Mn € Mn €140 Mn Senior Secured Bond €450.2 Mn Bank Debt 35% Net Loan to Value (LTV) 256.0 203.9 140.0 77.9 Avg. Cost of Debt 35.6 2.2% 5.2 11
Slide 29: Value Driver 10: Predictable and Sustainable Dividend Distribution Policy
02 Investment Highlights 29 Value Driver 10: Predictable and Sustainable Dividend Distribution Policy ✓ Predictable and ✓ Competitive in the ✓ Attractive vs ✓ As a result of a Dividend policy sustainable dividend International Real Spanish equity solid cash flow objectives and distribution schedule
Slide 30: Value Driver 10: Consistent dividend growth per share
02 Investment Highlights 30 Value Driver 10: Consistent dividend growth per share 55 €0.49 ps1 0.55 €45.0 Mn 5.1% 45 0.452017 Dividend1 Dividend Yield on NAV2 €45.0 Mn1 €0.33 ps +50% 0.35 35 VS 2016 €0.20 ps €30.0 Mn 0.25 4th Lagasca 99 Extraordinary 25 Dividend in dividend announced 4 years 0.15 15
Slide 31: Financial Results FY 2017
03 Financial Results FY 2017
Slide 32: Successful & Strong Key Facts delivered in FY 2017
03 Financial Results 32 Successful & Strong Key Facts delivered in FY 2017 +21% vs €1,538 Mn GAV1 FY 2016 +24% vs €145.6 Mn EBT FY 2016 €10.27 EPRA NAV €951.5 Mn EPRA NAV pre-performance fee per share Rental +29% vs EPRA EPRA €77.6 Mn Income FY 2016 5.6% “topped-up” NIY 5.5% Net Initial Yield €32.5
Slide 33: Solid Company performance in FY 2017
03 Financial Results 33 Solid Company performance in FY 2017 €77.6 Mn Revenues +29% vs FY 2016 €36.6 Mn Adjusted EPRA Earnings +41% vs FY 2016 01 Solid FY 2017 Results and Balance Sheet €951.5 Mn EPRA NAV €10.27 p.s. +12% 35% Net LTV; €590.2 Mn Gross Debt 2.2% cost of debt Retail NOI LfL improvement
Slide 34: Consolidated Income Statement
03 Financial Results 34 Consolidated Income Statement (€ Millions) Chg (%) FY 2017 FY 2016 FY17/FY16 Recurring Non-Recurring Total2 Recurring Non-Recurring Total2 Rental Income 77.6 - 77.6 60.2 - 60.2 Other Income 2.2 - 2.2 1.8 - 1.8 Property Operating Expenses (11.3) - (11.3) (10.0) - (10.0) Base F
Slide 35: ESG Results
04 ESG Results
Slide 36: ESG - Asset Management & Environment
04 ESG Results 36 ESG - Asset Management & Environment 1 Responsible asset management focused on consumptions and emissions Promoting sustainability certification measures, CSR Master Plan to meet the encouraging the use of new technology to improve our assets’ environmental quality and most demandi
Slide 37: ESG - Corporate Governance
04 ESG Results 37 ESG - Corporate Governance Risk Control & Management System Integrated enterprise risk management (ERM) system designed to mitigate the risks exposure ERM system involves all Lar España’s staff and Risk Map: the ERM system categorises risk into high, 1 supervising of third parties
Slide 38: Appendix 1
05 Appendix 1
Slide 39: Retail Assets
05 Appendix 1 39 39 Retail Assets Megapark Gran Vía P. Marina El Rosal Anec Blau As Termas P. Altas P. Abadía3 Bilbao Vigo Alicante Ponferrada Barcelona Lugo Seville Toledo Development Market Value €214.0 Mn €163.0 Mn €119.8 Mn €109.0 Mn €95.4 Mn €84.2 Mn €71.5 Mn €65.0 Mn (Dec 2017) GLA (Sqm) 83,38
Slide 40: Retail Assets
05 Appendix 1 40 40 Retail Assets Rivas Albacenter 22 R. Units Vistahermosa Vidanova Parc Madrid Albacete North Spain + Alicante Valencia Balearic Islands Development Other Assets3 Market Value €61.6 Mn €56.3 Mn €52.5 Mn €50.4 Mn €24.8 Mn €62.3 Mn (Dec 2017) GLA (Sqm) 36,724 27,890 28,822 33,550 44,
Slide 41: Offices, Logistics and Residential
05 Appendix 1 41 41 Offices, Logistics and Residential Office Logistics Residencial Lagasca 99 Market Value Market Value €85.5 Mn €91.9 Mn €83.3 Mn2 (Dec 2017) (Dec 2017) GLA (Sqm) 23,713 280,000 GLA (Sqm) 26,203 Acquisition Date NA NA Acquisition Date 30 Jan ´15 Acquisition Price €51.4 Mn €65.6 Mn
Slide 42: Appendix 2
05 Appendix 2
Slide 43: Highlights of the new Investment Management Agreement
05 Appendix 2 43 Highlights of the new Investment Management Agreement 1 Alignment with current Business Plan 7 2 Unanimously approved by the seven REINFORCING PRESENCE Enhanced Corporate Provides continuity OF INDEPENDENT members of the Board Governance and certainty DIRECTORS IN THE BOARD (5 indep
Slide 44: Lower and capped performance fee
05 Appendix 2 44 Lower and capped performance fee Four key changes to the performance fee Worked Example - Scenario mechanism creating stronger alignment between Illustrative benchmarks at end of previous financial year: shareholders and the Manager: ▪ EPRA NAV: €900m ▪ Removal of the promote equali
Slide 45: External management by Grupo Lar continues to be the optimal strategy
05 Appendix 2 45 External management by Grupo Lar continues to be the optimal strategy for Lar España Retail property requires skilled, hands-on management… …which Grupo Lar is uniquely qualified to provide ▪ Granular unit configuration and diverse ▪ Lar España can draw upon the expertise Operationa
Slide 46: Recognitions
Recognitions
Slide 47: Recognitions
47 Recognitions 2017 EPRA BPR & sBPR Awards Since June 2015: Member of FTSE EPRA/Nareit Global Estate Index First SOCIMI to be awarded with the "EPRA Recognition of the CSR GOLD AWARD” in Financial Reporting for the work and progress made 3rd consecutive year this year Sustainability Certification A
Slide 48: Disclaimer
48 Disclaimer This document has been prepared by Lar España Real Estate SOCIMI, S.A. (the “Company”) for information purposes only and it is not a regulated information or information which has been subject to prior registration or control by the Spanish Securities Market Commission. This document n
Slide 49: Corporate Presentation
Corporate Presentation Follow us: www.larespana.com Lar España Real Estate SOCIMI info@larespana.com Lar España App
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