Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q3 2019 Earnings Presentation
43 slides from Colonial Sfl Socimi Sa's earnings presentation, November 2019
Slide 1: Third Quarter Results 2019
Third Quarter Results 2019 November 2019 2019 3/19
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.
Slide 3: Agenda
Agenda 01 Highlights 02_ Market 03 Operational performance 04 Financial performance 05 Growth drivers 06 Conclusion 3
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
Slide 5: Highlights: Delivering the Business Plan
01 Highlights Delivering the Business Plan
Slide 6: Business Plan delivery on track
01 Highlights 3Q 2019 Business Plan delivery on track OUTSTANDING FINANCIAL RESULTS > Recurring EPS of 20.5€Cts, +33% YoY > Disposal of logistics portfolio > Gross Rental Income of €263m, +4% like-for-like > Recurring earnings of €104m, +53% YoY STRONG OPERATIONAL PERFORMANCE > 197,027 sq m let with
Slide 7: Solid top line growth driving results
01 Highlights 3Q 2019 Solid top line growth driving results > High double digit growth in recurring EPS > Outstanding GRI Like for Like growth of +4% > Double digit Release Spread & Superior Rental Growth Profit & Loss - €m 09/19 YoY Var Solid Fundamentals 09/19 Gross Rental Income €263m +2% EPRA Va
Slide 8: Guidance
01 Highlights 3Q 2019 Guidance GUIDANCE 1 Profit & Loss > Top Line GRI 2019E €350m > EPS 2019E: €27cts > DPS 2019E: +10% YoY growth 2 Capital Recycling > 2019E Disposals > €475m > 2020 Selective disposals of mature assets 3 Acquisition program ongoing > Selective acquisitions > Prioritize value add
Slide 9: Market: Scarcity in Prime Product
02 Market Scarcity in Prime Product
Slide 10: CBD outperforming in the rental market
02 Market CBD outperforming in the rental market VACANCY % PRIME ERV HIGHLIGHTS €/sqm/month +7% > Record take-up of 307,600 sq m in 2019 BARCELONA > CBD vacancy at historical lows -> 1.9% > Prime rents at €27/sq m /month, +7% 2019 YTD 12/18 9/19 Vacancy CBD(%) Prime Rents CBD (€/sqm/month) €/sqm/mon
Slide 11: Investment Markets with strong fundamentals
02 Market Investment Markets with strong fundamentals PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > Scarcity of supply faces strong investor interest BARCELONA > Prime yields at 3.75% > Healthy spread of 349 bp > Dominance of international investors MADRID > Prime yields at 3.50% > Healthy spread
Slide 12: Unparalleled exposure to CBD
03 Operational performance Unparalleled exposure to CBD
Slide 13: High letting volume with 200,000 sqm signed in very good terms
03 Operational performance High letting volume with 200,000 sqm signed in very good terms # CONTRACTS SQM SIGNED GRI SECURED1 EPRA VACANCY2 INCENTIVES3 MAX. RENT SIGNED BARCELONA 30 54,871 €14m 1.4% 6% 28.5 €/sqm/month MADRID 37 111,075 €25m 7.4% 6% 35.5 €/sqm/month PARIS 31,081 €24m 13% >800 30 1.4
Slide 14: Strong delivery on rental price increases
03 Operational performance Strong delivery on rental price increases > Significant rental growth in every segment > High release spreads in the double-digit arena > Paris portfolio with double digit rental growth three quarters in a row SOLID INCREASE IN RENTAL PRICES GROWTH ON SIGNED RENTS1 RELEASE
Slide 15: 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 1H 2019 3Q 2019 Dau Retail Edouard VII Francisco Silvela Haussman Diagonal 525 Torre Marenostrum Av. Diagonal, 682 Dau Retail +135% +21% +19% +13% +12% +16% +11% +68% Sant Cugat A
Slide 16: Strong delivery on rental price increases across the entire portfolio
03 Operational performance Strong delivery on rental price increases across the entire portfolio RELEASE SPREAD1 1H 2019 3Q 2019 Illacuna Tucumán Diagonal 409 Via Augusta Torre BCN Illacuna Berlín Numància +25% +24% +33% +78% +52% +53% +51% Sant Cugat Miguel Ángel Diagonal 609 Santa Engracia Alfonso
Slide 17: Colonial portfolio outperforming the market on occupancy
03 Operational performance Colonial portfolio outperforming the market on occupancy > Rapid letting up of Axiare Portfolio > Improving the portfolio mix offloading non-core > Providing new high-quality supply to the market EPRA VACANCY LETTING UP PRODUCT & OFFLOADING NON CORE MADRID OFFICES PORTFOLI
Slide 18: Vacancy remains at healthy levels
03 Operational performance Vacancy remains at healthy levels > Colonial Group vacancy at a healthy 3.5% > Barcelona and Paris at 1.4% > Madrid core portfolio at 2% EPRA VACANCY BARCELONA1 COLONIAL GROUP2 MADRID1 Portfolio Axiare Project delivery LFL Colonial Portfolio Axiare LFL Colonial PARIS1 (1)
Slide 19: Profitable Growth improving the quality of returns
04 Financial performance Profitable Growth improving the quality of returns
Slide 20: Strong top line growth
04 Financial performance Strong top line growth > Outstanding +4% like for like > Madrid with highest LFL of +5% > Paris & Barcelona remain strong with 3% each GROSS RENTAL INCOME - €M EPRA Projects & TOTAL Acquisitions & like-for-like1 renovations +4% disposals (2%) LFL1 GROUP +2% +4% (2%) +0.2% BC
Slide 21: Like-for-like rental growth price driven
04 Financial performance Like-for-like rental growth price driven > Like-for-like growth largely driven by rental price increases > Barcelona and Paris 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-
Slide 22: Disposals of logistics portfolio
04 Operational performance Disposals of logistics portfolio > Integration of Axiare successfully completed after disposal of logistics portfolio > Significant value creation through premium on GAV > Ongoing flight to quality through disciplined capital allocation DISPOSALS 2019E OF > €475m VALUE CRE
Slide 23: 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 RECURRING EARNINGS – VARIANCE ANALYSIS RECURRING EPS Offloading Secondary Assets Cts€/
Slide 24: A strong credit profile
04 Financial performance A strong credit profile > Highest Corporate Rating in Spanish Real Estate > LTV reduction to 37% in line with financial policy > Attractive cost of debt of 1.5% and more than €2bn of liquidity2 ACTIVE LIABILITY MANAGEMENT … … ENHANCING THE BALANCE SHEET 1 Refinancing of €151
Slide 25: A strong platform for future value creation
05 Growth drivers A strong platform for future value creation
Slide 26: 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 26
Slide 27: €1.3bn of CBD Project Pipeline with strong visibility
05 Growth drivers €1.3bn of CBD Project Pipeline with strong visibility > Castellana, 163 Project delivery ahead of plan > 70% of the asset pre-let with AAA tenants > Signed rents doubling initial rent in place CASTELLANA,163 - STRONG PROGRESS PROJECT DELIVERY AHEAD OF PLAN STRONG PRE-LETTING > Faça
Slide 28: €1.3bn of CBD Project Pipeline with strong visibility
05 Growth drivers €1.3bn of CBD Project Pipeline with strong visibility > 5 out of 12 projects pre-let YTD > Enhanced visibility on cash flow and value creation > Important value creation to be captured STRONG VISIBILITY ON RENTAL CASH FLOW Stabilized GRI €83m €83m Secured €20m €23m 27% Louvre Saint
Slide 29: Capturing reversion - Attractive CBD contract portfolio
05 Growth drivers Capturing reversion - Attractive CBD contract portfolio > Delivery of high release spreads ongoing > Solid prime positioning in growing markets > Renovation programs as rental growth accelerator STRONG DELIVERY ON REVERSION ATTRACTIVE RENT ROLL PRIME PORTFOLIO FOR STRONG REVERSION
Slide 30: Capturing reversion – Renovation program on track
05 Growth drivers Capturing reversion – Renovation program on track > Substantial levels of pre-let > Significant rental uplift CHARLES DE GAULLE – Paris Neuilly TORRE MARENOSTRUM – Barcelona CBD > Renovation of common spaces > Acceleration of current tenant and floorplates upgrade rotation > 1,940
Slide 31: Capturing reversion – Renovation program
05 Growth drivers Capturing reversion – Renovation program > Renovation programs as rental growth accelerator > Tenant rotation to improve rental levels > Solid positioning in growing markets RENOVATION PROGRAM ANNUALIZED GRI 1 CBD 106 Haussmann Prime T. Marenostrum SIGNIFICANT REVERSION AHEAD Paris
Slide 32: Discipline on Capital Allocation
05 Growth drivers Discipline on Capital Allocation > Ongoing flight to quality through disciplined capital allocation > Disposal of non-core asset for more than €1.4bn in the last 26 months > Acquisition program ongoing with relevant pipeline under analysis INVESTMENTS & DIPOSALS SINCE 2015 - €m CAP
Slide 33: Conclusion
06 Conclusion
Slide 34: Delivery of Business Plan on track
06 Conclusion DELIVERY OF BUSINESS PLAN ON TRACK Financials > Recurring EPS of 20.5€Cts. per share, +33% YoY > Disposal of logistics portfolio > Gross Rental Income of €263m, +4% like-for-like > Recurring earnings of €104m, +53% YoY Operations > Very healthy vacancy levels at 3.5% > Strong letting u
Slide 35: Guidance
06 Conclusion Guidance GUIDANCE 1 Profit & Loss > Top Line GRI 2019E €350m > EPS 2019E: €27cts > DPS 2019E: +10% YoY growth 2 Capital Recycling > 2019E Disposals > €475m > 2020 Selective disposals of mature assets 3 Acquisition program ongoing > Selective acquisitions > Prioritize value add opportun
Slide 36: Q&A
Q&A
Slide 37: 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 +33% RECURRING RESULT €m +53% Recurring Earnings - €m 104 68 +53% Nosh (mm
Slide 38: Profit Bridge Guidance Disposals
APPENDICES Profit Bridge Guidance Disposals > Offloading non-core product improving the balance sheet > Reduction of rents increasing focus and quality of the returns RECURRING EARNINGS – VARIANCE ANALYSIS €cts/ share (1) (2) (1) Impact of 2019E disposals (annualized Topped GRI of €16m) 38 (2) 2019
Slide 39: Barcelona Letting Performance
APPENDICES Barcelona Letting Performance BARCELONA – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 54,871 sq m let Dau Retail Torre Marenostrum > Max. rent signed 28.5 €/sqm/month (1) > ERV growth +10% +68% +11% vs ERV1 vs ERV1 > Release spread2 +34% Illacuna Berlín Numànci
Slide 40: Madrid Letting Performance
APPENDICES Madrid Letting Performance MADRID – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 111,075 sq m let Castellana 163 Castellana 163 > Max. rent signed 35.5 €/sqm/month (1) > ERV growth +4% +17% +25% vs ERV1 vs ERV1 > Release spread2 +8% José Abascal 56 José Abascal
Slide 41: Paris Letting Performance
APPENDICES Paris Letting Performance PARIS – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 31,081 sq m let Edouard VII Haussman > Max. rent signed > 800 €/sqm/year (1) > ERV growth +12% +21% +13% vs ERV1 vs ERV1 > Release spread2 +7% Louvre Saint-Honoré 103 Grenelle +8% +6%
Slide 42: A solid capital structure
APPENDICES A solid capital structure > An unparalleled high-quality collateral diversified in three cities > A solid financial structure with competitive financing costs > A strong credit profile FIRST CLASS COLATERAL A SOLID FINANCIAL STRUCTURE Capital Structure 31/12/2018 30/09/2019 More than €11b
Slide 43: www.inmocolonial.com
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Inmobiliaria Colonial, SOCIMI — Q3 2019 Earnings Presentation on 6ix