Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial — FY2015 Earnings Presentation
46 slides from Colonial Sfl Socimi Sa's earnings presentation, Feb 22, 2016
Slide 1: 2015 Annual Results Presentation
2015 Annual Results Presentation 22 February 2015 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 – 2015 Results Presentation
AGENDA – 2015 RESULTS PRESENTATION AGENDA PRESENTING MANAGEMENT TEAM Pere Viñolas 1 Highlights CEO 2 Macroeconomic context & office markets 3 Operating performance Carmina Ganyet Corporate Managing Director 4 Financial review 5 Growth drivers 6 Conclusion Carlos Krohmer Chief Corporate Development O
Slide 4: Highlights
GD HIGHLIGHTS
Slide 5: Highlights 2015: A year of outstanding performance
1 HIGHLIGHTS 2015 A year of outstanding performance A strong set of Results EPRA NAV of 62cts€/share: +29% of Total Return Gross Rental Income, +9% (+6% like for like) Recurring Income, +121% Net Profit of €415m Performance & Operations Record volume of lettings: more than 163,000 sq m in
Slide 6: Highlights 2015: Outstanding performance in every KPI
1 HIGHLIGHTS 2015 A year of outstanding performance A year of outstanding performance in every key performance indicator EPRA NAV of 62cts€/share: +29% y-o-y growth Strong letting activity with significant improvement of occupancy Double digit GAV growth in all markets through value added stra
Slide 7: Macroeconomic Context & Office Markets
2 MACROECONOMIC CONTEXT & OFFICE MARKETS
Slide 8: Macroeconomic context
2 MACROECONOMIC CONTEXT & OFFICE MARKETS Macroeconomic context Global growth affected by China and Oil Price, however: Spain remains with strong fundamentals and high GDP growth prospects France with increasing growth momentum in coming years GDP Growth Market Trends Robust Growth with strong fu
Slide 9: Rental Market - Offices (Barcelona, Madrid)
2 MACROECONOMIC CONTEXT & OFFICE MARKETS Rental Market - Offices Increasing momentum in take up faces scarcity of Grade A availability in CBD BARCELONA MADRID Increasing take-up vs. scarce supply +41% Take-up +31% TAKE-UP (‘000 sq m) 398 478 Barcelona with strong take-up momentum +41% 282 366 365
Slide 10: Rental Market - Offices (Paris)
2 MACROECONOMIC CONTEXT & OFFICE MARKETS Rental Market - Offices Increasing momentum in take up faces scarcity of Grade A availability in CBD PARIS Strong take-up vs scarce supply +18% Take-up TAKE-UP CBD (‘000 sq m) 447 Above average performance of Paris CBD Market 378 344 Take-up “Opera” +23% 32
Slide 11: Rental Market - Trends 2016
2 MACROECONOMIC CONTEXT & OFFICE MARKETS Rental Market - Offices Trends 2016 – Rental growth expected in CBD for the three cities Take Up Analisis 2015 Trends 2016 # of transactions Market Trends Take up ERV Growth Incentives Periphery CBD 62 68 Ongoing Consolidation of take-up momentum BARCELONA
Slide 12: Investment Market - Offices
2 MACROECONOMIC CONTEXT & OFFICE MARKETS Investment Market - Offices Important yield compressions in every market Spread vs reference rates remain at very attractive levels Room for further capital value growth through: 1. Additional yield compression for prime assets 2. Increasing rental valu
Slide 13: Operating Performance
3 OPERATING PERFORMANCE
Slide 14: Strong letting activity
3 OPERATING PERFORMANCE – 2015 Strong letting activity Continued positive momentum on letting activity in every market Barcelona catching up, Madrid consolidating strong performance Paris with record volumes, proven success of prime product Barcelona > 39,400 sq m let Madrid > 35,500 sq m let Pa
Slide 15: EPRA Office Occupancy improvements
3 OPERATING PERFORMANCE – 2015 EPRA Office Occupancy improvements in office portfolio EPRA Office Occupancy at 94%, +845 bps in 12 months EPRA Financial Office Occupancy Var. 12 months EPRA Occupancy 94% +845 TOTAL Barcelona 85% 93% bps 84% 86% Total Portfolio 90% / Office Portfolio 89% 4Q 14 1Q 15
Slide 16: Letting activity – Main Actions Barcelona
3 OPERATING PERFORMANCE – 2015 Letting activity – Main Actions Barcelona First Class Property Management ensures strong momentum in capturing high quality demand Av. Diagonal, 409 Av. Diagonal, 682 Trav. Gracia / Amigó 52% 63% 0% 100% let 95% let 49% let 2,155 3,703 3,670 sqm sqm sqm Sant Cuga
Slide 17: Letting activity – Main Actions Madrid
3 OPERATING PERFORMANCE – 2015 Letting activity – Main Actions Madrid First Class Property Management ensures strong momentum in capturing high quality demand Alfonso XII, 62 Jose Abascal Ramírez Arellano, 37 86% 72% 100% let 97% let 98% let 1,880 3,801 5,988 sqm sqm sqm Recoletos, 37-41 Génova
Slide 18: Letting activity – Main Actions Paris
3 OPERATING PERFORMANCE – 2015 Letting activity – Main Actions Paris First Class Property Management ensures strong momentum in capturing high quality demand Le Vaisseau In/Out #Cloud 100% 0% 90% pre let 100% let pre let 6,026 32,614 24,105 sqm sqm sqm 131 Wagram Louvre Saint-Honoré 100% let 97% l
Slide 19: High quality tenant portfolio
3 OPERATING PERFORMANCE – 2015 High quality tenant portfolio High quality premises attract and retain top tier tenants A well diversified tenant base with long-standing clients 2015 – another year of capturing many new high quality clients A well diversified tenant base of top quality clients Di
Slide 20: Growth of rental cash flow accelerating
3 OPERATING PERFORMANCE – 2015 Growth of rental cash flow accelerating Growth of rental cash flow accelerating 1. Significant increase of passing GRI in 2015 2. Current GRI growth mainly volume driven 3. Recovery of rental price cycle still to come through Significant increase of Passing GRI1 €m Ren
Slide 21: Successful project execution – value added strategies
3 OPERATING PERFORMANCE – 2015 Successful project execution– Superior returns through value added strategies Highly successful value added strategies – Prime Factory Projects Superior returns & value creation for shareholders #CLOUD.paris 90 CHAMPS ELYSÉES IN/OUT Project start 2012 Project s
Slide 22: Successful project execution – value added strategies
3 OPERATING PERFORMANCE – 2015 Successful project execution– Superior returns through value added strategies Highly successful value added strategies – Prime Factory Projects Full re-pricing not yet captured -> substantial additional value to cristalize upon full market recovery JOSE ABASCAL, 56
Slide 23: Financial Review
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Slide 24: Strong top line growth
4 FINANCIAL REVIEW – 2015 Strong top line growth Strong top line growth driven by: Strong underlying growth of comparable portfolio Additional rents from new acquisitions Gross Rental Income - €m Gross Rental Growth +9.3% Top line Growth +9.3% 9.1 231 10.6 Like for like +5.5% 211 Acquisitions &
Slide 25: Strong underlying growth of portfolio
4 FINANCIAL REVIEW – 2015 Strong underlying growth of portfolio Strong recovery of gross rental income in all markets Madrid consolidates strong momentum & Barcelona achieves positive growth Paris remains with very good performance "Like for Like" Rental Growth Crecimiento "Like for Like" Ingres
Slide 26: Strong underlying growth in Gross Asset Values
4 FINANCIAL REVIEW – 2015 Strong underlying growth in Gross Asset Values Gross Asset Value of €6,913m (€7,239m including transfer costs) Significant growth in Gross Asset Values, +16% like for like in a year riance Analysis - Value 12 months - €m GAV Variance LFL 1H15 2H15 Full year +16% Like fo
Slide 27: Valuation yields and capital values
4 FINANCIAL REVIEW – 2015 Strong underlying growth in Gross Asset Values Important yield compression in every market, in particular Madrid & Barcelona Colonial portfolio at very attractive valuation levels Valuation Yields1 Capital Values 12/2015 - €/sq m Y-o-Y var. (77 bp) Colonial 5.54% 5.54%
Slide 28: High quality asset base with solid capital structure
4 FINANCIAL REVIEW – 2015 High quality asset base with solid capital structure First class credit credentials allow for competitive financing costs First Class Credit Credentials Significant improvement of financing costs Costs savings through active liability management High Credit Credentials 1. I
Slide 29: Successful Liability Management
4 FINANCIAL REVIEW – 2015 Successful Liability Management Optimal financing based on active liability management Competitive financing cost First class long term financing & important fire power capacity Competitive Finance Costs A long term maturity profile Financing costs % - Spot as of 31/12/
Slide 30: Profit & Loss Account
4 FINANCIAL REVIEW – 2015 Profit & Loss Account Significant increase in Net Profit through: Strong operating performance Important savings in financing costs Prime positioning & Value Added Strategies generating above average growth €m Profit & Loss Accounts €m RECURRING EBITDA +8% LFL 178 Res
Slide 31: Double Digit Growth Total Shareholder Return
4 FINANCIAL REVIEW – 2015 Double Digit Growth Total Shareholder Return Strong momentum in NAV growth, +29% year on year increase Strong momentum in NAV growth Double digit Total Return Capital Value Creation 1.2 (1.5) 61.6 First half +14% #Cloud In/Out 3.3 90 CE +29% 4.8 3.5 Cts. €/share 2.7 +29% Se
Slide 32: Strong share price performance
4 FINANCIAL REVIEW – 2015 Strong share price performance Long term oriented Shareholder Base with important free float & liquidity Share price performance Analyst recommendation +17% Colonial Target Price 0.71 €/share Neutral consensus +16% EPRA 23% Sell 23% Target Price - 0.58 €/share Buy Minimum 5
Slide 33: Growth Drivers – Acquisitions & Current Portfolio
5 GROWTH DRIVERS – ACQUISITIONS & CURRENT PORTFOLIO -
Slide 34: Acquisitions of Prime Assets in CBD
5 GROWTH DRIVERS Acquisitions of Prime Assets in CBD Acquisition plan on track €475m Selective investment approach – focus on Prime Assets in CBD Acquisition Target MADRID – 4 acquisitions PARIS – 2 acquisitions 2015 2015 2015 2014 €1,500m in 5 years €300m per annum Estébanez Príncipe 9, Av
Slide 35: Acquisitions of Prime Assets in CBD
5 GROWTH DRIVERS Acquisitions of Prime Assets in CBD Attractive risk adjusted returns through selective investment approach Acquisition returns above target maintaining investment discipline Investments 2015 Delivery vs Target Plaza Europa Barcelona New Business Area Core Investment Génova 1
Slide 36: Prime Factory Investments: Santa Engracia
5 GROWTH DRIVERS Superior Returns through “Prime Factory” Investments A unique high-visibility building in Madrid CBD with an important growth potential SANTA ENGRACIA CBD - Madrid Core Investment Sources of Value Creation TRANSACTION OPPORTUNITY Asset located in an area with significant Price1 €6
Slide 37: Prime Factory: Estébanez Calderón
5 GROWTH DRIVERS Superior Returns through “Prime Factory” Investments Prime Factory project execution on track ESTÉBANEZ CALDERÓN 3-5 Prime CBD - Madrid Prime Factory Inv. Good progress on project execution TRANSACTION OPPORTUNITY Definition of project parameters Price1 €30m Yield on Cost 7-8 %
Slide 38: Prime Factory: Príncipe de Vergara 112
5 GROWTH DRIVERS Superior Returns through “Prime Factory” Investments Prime Factory project execution on track PRÍNCIPE DE VERGARA 112 CBD - Madrid Prime Factory Inv. Good progress on project execution TRANSACTION OPPORTUNITY Definition of project parameters Price1 Capex €30m €15m Yield on Cost
Slide 39: Prime Factory Investments
5 GROWTH DRIVERS Superior Returns through “Prime Factory” Investments INITIAL CURRENT FINAL ESTÉBANEZ CALDERON PRÍNCIPE DE VERGARA 39/45
Slide 40: Core Investments in Prime CBD
5 GROWTH DRIVERS “Core Investments” in Prime CBD Complementary “Core” investments with important cash generating capacity GÉNOVA, 17 Prime CBD - Madrid 9, AVENUE PERCIER Prime CBD - Paris TRANSACTION OPPORTUNITY TRANSACTION OPPORTUNITY Price1 €36m Potential Yield 5% Price €68m Potential Yield 5%
Slide 41: Attractive growth profile in Gross Rents
5 GROWTH DRIVERS Attractive growth profile in Gross Rents Significant value & cash flow to be unlocked from current portfolio and growth strategy Passing Gross Rental Income1 – €m Significant GRI to cristalize in P/L Reversionary potential Sources of additional GRI 1. Significant amount of passing G
Slide 42: Attractive rent roll profile to capture cycle
5 GROWTH DRIVERS Attractive rent roll profile to capture cycle Colonial best positioned to capture the cycle in the three cities European Property Clock – JLLS(1) Exposure Madrid Exposure Paris (1) Source JLLS 42/45
Slide 43: Conclusion
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Slide 44: Conclusion: A year of outstanding performance
6 CONCLUSION 2015 – A year of outstanding performance A year of outstanding performance in operations & financing 1 Occupancy improvement as major achievement in ongoing operations 2 Sustainable, strong top line growth in every market 3 Value creation through prime positioning and successful project
Slide 45: Conclusion: A solid base for future growth
6 CONCLUSION A solid base for future growth Drivers for future value creation 1 Our existing Portfolio Locked in GRI fully to crystalize in P/L & cash flow Additional reversionary potential underpinned by strong momentum in operations Recovery play of rental cycle to be captured in every marke
Slide 46: Q&A
Q&A Q & A