Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — H1 2022 Earnings Presentation
52 slides from Colonial Sfl Socimi Sa's earnings presentation, Jul 28, 2022
Slide 1: First Half Results 2022
First Half Results 2022 July 28th, 2022 1H/22
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_ Financial Performance - Double digit profit growth 03 Strong delivery on operations 04 Drivers for future performance 05 Conclusion & Outlook 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: Delivery of profitable Growth on the back of polarization
01 Highlights Delivery of profitable Growth on the back of polarization
Slide 6: The Best Office Product
01 Highlights The Best Office Product COLONIAL – THE FULL BENEFIT OF POLARIZATION > Superior Grade A with unparalleled City Center/ CBD exposure 99%1 City Center > Most sustainable product with leadership in decarbonization €13bn GAV 78%2 CBD > Best locations with best services attracting the best c
Slide 7: Strong Profit Growth Driven by Strong Operations
01 Highlights Strong Profit Growth Driven by Strong Operations Delivery of strong profit growth … … on the back of solid operations … maximizing Value Creation +12% Letting volume 104,733 Total Shareholder Return YoY sqm Group Net Profit €355m +120% +6% +75% YoY (NTA based) 6 months +10% 51,500 Pre-
Slide 8: Delivery of profitable Growth
02 Financial Performance - Double digit profit growth Delivery of profitable Growth
Slide 9: Strong growth in all metrics
02 Financial Performance - Double digit profit growth Strong growth in all metrics > Net Group Profit increase of +120% YoY > Solid increase in Recurring Net Profit: +35% YoY > Double digit EPS growth of +27% PROFIT FULLY TOP-LINE DRIVEN NET GROUP PROFIT RECURRING NET PROFIT EPS €m €m €cts/share +35
Slide 10: +9.5% Gross Rental Income YoY Increase
02 Financial Performance - Double digit profit growth +9.5% Gross Rental Income YoY Increase Revenue Growth excluding impact of disposals3 of +13.2% > +8.0% Revenue increase due to rental growth in Core Portfolio & Acquisitions > +5.2% Revenue increase through delivery on projects & renovation progr
Slide 11: +6% like for like in Gross Rental Income on the back of polarization
02 Financial Performance - Double digit profit growth +6% like for like in Gross Rental Income on the back of polarization > Group Gross Rental Income Like for Like growth of +6% > Paris & Barcelona with outstanding like for like growth > Like for like growth through balanced mix of price & volume G
Slide 12: Net Rental Income growth of +7% (+6% like for like)
02 Financial Performance - Double digit profit growth Net Rental Income growth of +7% (+6% like for like) > Net Rental Income growth +7% driven by Paris Portfolio > Outstanding Net Rental Income like for like growth +6% > Paris and Barcelona with outstanding for like increase Net Rental Income varia
Slide 13: Flight to quality through selected disposals
02 Financial Performance - Double digit profit growth Flight to quality through selected disposals > €59m of secondary assets divested in 1H2022 > +11% premium on 12/21 GAV MADRID PARIS J Valcárcel, 24 Alcalá, 506 Le Vaisseau - Paris €59m 5,652 6,259 6,332 Secondary sqm sqm sqm Assets divested Vacan
Slide 14: +7% GAV growth in 6 months (+11% YoY)
02 Financial Performance - Double digit profit growth +7% GAV growth in 6 months (+11% YoY) > +8% YoY like for like growth (+4% in 6 months) > Strong YoY like for like growth of Madrid +9% (+5% in 6 months) > Paris with solid +8% YoY like for like growth (+4% in 6 months) GAV 1H 2022 GROWTH GAV VARI
Slide 15: Solid Capital Structure with strong Hedging Profile
02 Financial Performance - Double digit profit growth Solid Capital Structure with strong Hedging Profile > LTV at healthy 36.9%, at low-end of guidance > Liquidity of 2.6 €bn with €0.5bn in cash > Strong hedging policy securing future interest rates Solid Capital Structure Competitive cost of debt
Slide 16: Solid profitability with enhanced quality
02 Financial Performance - Double digit profit growth Solid profitability with enhanced quality > Group Net Profit of €355m, +120% YoY > Recurring Earnings of €76m, +35% YoY > EPRA EPS of €14.13/share; +27% YoY) PROFIT & LOSS ACCOUNT Results analysis - €m 1H 22 1H 21 NET GROUP PROFIT RECURRING NET P
Slide 17: Strong NTA growth through Prime Positioning & Alpha
02 Financial Performance - Double digit profit growth Strong NTA growth through Prime Positioning & Alpha > Total Shareholder Return of +12% YoY (+6% in 6 months) > Epra NTA of €12.49/share; +10% YoY (+4% in 6 months) > NTA growth on the back of Prime Positioning & Alpha Value Creation EPRA NET TANG
Slide 18: Superior performance on the back of polarization for high quality product
03 Strong delivery in operations Superior performance on the back of polarization for high quality product
Slide 19: Office Markets with strong support for Grade A in CBD
03 Strong delivery in operations Office Markets with strong support for Grade A in CBD > Tenant for Grade A product concentrates more than 70% of total demand > Take-up in all markets widely above previous year > Strong investment market for scarce Grade A in the City Center Rental market – Recoveri
Slide 20: Superior performance on the back of high-quality prime product
03 Strong delivery in operations Superior performance on the back of high-quality prime product LETTING VOLUME YTD (Sqm) KPIS 1H 2022 1H 2021 1H 2022 YoY RELEASE SPREAD1 ERV GROWTH2 MATURITY (years)3 EPRA VACANCY4 PARIS 17,313 34,483 +99% +8% +6% 8 0.3% MADRID 17,825 57,135 +221% +9% +6% 5 6.6% BARC
Slide 21: Superior performance on the back of high quality product
03 Strong delivery in operations Superior performance on the back of high quality product > Colonial with strong letting activity, +75% on previous year (+64% in economic terms) > Letting activity focused on CBD assets with high Energy Certificates > Solid mix between renewals and new lets LETTING A
Slide 22: Benefitting from polarization - Setting the benchmark in Prime
03 Strong delivery in operations Benefitting from polarization - Setting the benchmark in Prime PARIS MADRID BARCELONA Letting volume - sqm Letting volume - sqm Letting volume - sqm Total 34,483 Total 57,135 Total 13,115 Thereof CBD & 7ieme 10,703 Thereof CBD 39,274 Thereof CBD & 22@ 12,676 Max. Max
Slide 23: Strong Occupancy Profile of Grade A Portfolio
03 Strong delivery in operations Strong Occupancy Profile of Grade A Portfolio > Group Occupancy at healthy 96% with almost full occupancy in Paris (99%) > Strong letting performance in 1H 22: +75% vs. 1H 21 letting volume LETTING ACTIVITY - sqm EPRA OCCUPANCY GROUP OCCUPANCY as of 06/2022 GROUP OCC
Slide 24: Vacancy at healthy 4.0%: availability of top-quality product
03 Strong delivery in operations Vacancy at healthy 4.0%: availability of top-quality product 4.0% of available high-quality space with solid letting prospects > 1.5% renovation program assets in Madrid, Barcelona & Paris > 2.1% Grade A CBD premises in Barcelona & Madrid EPRA VACANCY - Offices Renov
Slide 25: Rental growth remains solid
03 Strong delivery in operations Rental growth remains solid > Q2 Solid ERV growth of +6% driven by Madrid & Paris > +8% release spread YTD (+9% in Madrid & +8% Paris) SOLID INCREASE IN RENTAL PRICES GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 2021 1Q 22 2Q 22 TOTAL 2021 1Q 22 2Q 22 TOTAL PARIS +8% +4%
Slide 26: Prime Positioning & Alpha driving future performance
04 Drivers for future performance Prime Positioning & Alpha driving future performance
Slide 27: Performance on the back of Prime Positioning & Alpha
04 Drivers for future performance Performance on the back of Prime Positioning & Alpha 1 Sustained Strong Delivery on NTA & EPS 2 Pricing Power 3 Projects & Renovations on track 4 Securing future cash flow 28
Slide 28: Sustained Strong Delivery on NTA & EPS
04 Drivers for future performance 1 Sustained Strong Delivery on NTA & EPS Prime Positioning Alpha 12.73 (0.26) €/Sh. 12,73 0,14 0,24 TOTAL 0,28 0,29 SHAREHOLDER 12.04 €/sh. 12.49 12,04 RETURN NTA +12% +6% PRIME YoY 6 months POSITIONING 12/21 Core Projects EPS DPS & DPS Paid 06/21 & Portfolio Others
Slide 29: Pricing Power through Prime Positioning
04 Drivers for future performance 2– Pricing Power through Prime Positioning PRICING POWER - INDEXATION PRICING POWER - CAPTURING MAXIMUM RENTS Outperfoming the market 2022 YTD Indexation Paris, Madrid & Barcelona > 100% of contracts 55% Max .Rent 45% indexed2 Release Rental Spread Q23 Growth Q24 Si
Slide 30: Projects on track: Biome
04 Drivers for future performance 3– Projects on track BIOME: Best quality product with low carbon footprint Office space 100% pre-let > Two leases signed with La Banque Postale and SFIL for all the office space > Rent: over €670/sqm > Lease term: 10 years > Effective 2 Nov. 2022 30
Slide 31: Projects on track
04 Drivers for future performance 3– Projects on track > 7 of the 9 assets of the project pipeline already have high pre-let levels > €52m of annualized rents secured in more than 77,000 sqm > Rental prices signed at the high end: yield on cost above 6% confirmed PROJECT PIPELINE 81 Diagonal 525 Mar
Slide 32: Projects on track: fully let
04 Drivers for future performance 3– Projects on track > 7 of the 9 assets of the project pipeline already have high pre-let levels > Signed rents well above market ERVs > Contracts signed with AAA tenants Diagonal 525 Marceau / Iena 96 Velázquez 86D Miguel Ángel 23 Biome Plaza Europa, 34 Louvre-St-
Slide 33: Renovation Program almost completed
04 Drivers for future performance 3– Renovation Program almost completed > Significant progress in letting up the renovation program > Passing rents have increased by +105% in 6 months > Reversion of €35m annualized GRI secured/passing as of 06/22 SIGNIFICANT GRI REVERSION WITH VALUE CREATION POTENT
Slide 34: Renovation Program almost completed
04 Drivers for future performance 3– Renovation Program almost completed > Renovation program almost fully let > Signed rents well above market ERVs > Contracts signed with AAA tenants Washington Plaza 103 Grenelle Cézanne Saint Honoré Charles de Gaulle Cedro Ortega y Gasset Prime CBD – 10,000 sqm P
Slide 35: Future Cash Flow on the back of an increasing revenue base
04 Drivers for future performance 4– Future Cash Flow on the back of an increasing revenue base INCREASE ANNUALIZED GRI1 UP TO €385m MORE THAN €400m RENTAL BASE1 SECURED YTD > €41m additional annualized1 rents since 12/21 > Strong Pre-Lets > +12% increase of revenue base1 (net of disposals) > Pricin
Slide 36: Superior growth & returns through prime positioning
05 Conclusion Superior growth & returns through prime positioning
Slide 37: Colonial well positioned
05 Conclusion & Outlook Colonial well positioned STRONG DELIVERY ON VALUE & CASH FLOW > Total Shareholder Return (NTA based) +6% in 6 months > GAV growth of + 4% like for like in 6 months > Recurring EPS +27% YoY > Strong operations securing additional cash flow COLONIAL WELL POSITIONED TO PLAY THE
Slide 38: Appendices Q&A
Appendices Q&A
Slide 39: Investment markets for prime product remain active (Paris)
APPENDICES Investment markets for prime product remain active > Paris CBD an attractive target for International Investors > Pricing above appraisals for Core product in CBD 2 Place Rio CBD €282m 8,676 sqm €32,570/sqm (2Q 2022) SKY CBD €108.25m 3,500 sqm €30,928/sqm (1Q 2022) Maison Bayard CBD €252m
Slide 40: Investment markets for prime product remain active (Madrid, Barcelona)
APPENDICES Investment markets for prime product remain active > Barcelona with solid investment activity– specially in the 22@ district > Investor appetite with increased momentum for Prime in Madrid Goya 36 CBD €52m 4,500 m €11,556/sqm (1Q 2022) MADRID Ancora 40 CBD €51 7,215 sqm €7,069/sqm (1Q 202
Slide 41: Indexation & Rental Growth
APPENDICES Indexation & Rental Growth > Colonial portfolio fully capturing positive indexation impact in cash flow > Indexation on Spanish portfolio already secured for more than 35% of the contracts > Prime Grade A Positioning provides additional rental upside INDEXATION IMPACT IN RENTS INDEXATION
Slide 42: Rental Price levels remain solid
APPENDICES Rental Price levels remain solid RELEASE SPREAD1 GROWTH ON SIGNED RENTS2 Via Augusta 21 Santa Engracia 120 Torre Bcn Washington Plaza 176 Charles de Gaulle DAU Retail +21% +19% +17% +33% +31% +30% López de Hoyos, 35 Cézanne Saint-Honoré Diagonal 609 Illacuna Francisco Silvela 42 Amigó 11-
Slide 43: Project pipeline – GRI reversionary potential going forward
APPENDICES Project pipeline – GRI reversionary potential going forward > More than €80m of additional rents to flow into the recurring P/L > €52m of secured rents through solid pre-let performance > Project pipeline delivery & pre-letting process on track GLA Total 1 Yield Project City % Group Deliv
Slide 44: Project pipeline – significant value creation potential going forward
APPENDICES Project pipeline – significant value creation potential going forward > €2.5bn of value expected > Base for significant future NTA growth > 2022 Delivery on track GLA Total 1 Yield Project City % Group Delivery (sqm) Cost €m on Cost Value creation potential - €bn 1 Diagonal 525 Barcelona
Slide 45: Renovation Program with positive momentum
APPENDICES Renovation Program with positive momentum > Significant progress in letting up the renovation program > Passing rents have increased by €27m since the beginning of the program > Reversion of €35m annualized GRI secured/passing as of 06/22 RENOVATION PROGRAM SIGNIFICANT GRI REVERSION WITH
Slide 46: Vacancy at very healthy levels in every segment
APPENDICES Vacancy at very healthy levels in every segment > Office portfolio vacancy stable at a healthy 4% level (2.7% excluding Torre Marenostrum & Ortega y Gasset) > 1.5% renovation program assets in Madrid, Barcelona & Paris > Outstanding Paris at 0.3% vacancy in the office portfolio EPRA1 VACA
Slide 47: AAA Clients with strong solvency
APPENDICES AAA Clients with strong solvency CONTRACT PORTFOLIO 2022 MATURITIES – DELIVERY YTD ON TRACK 2022 MATURITIES – MIX 2022 MATURITIES BREAKDOWN % on annualized Group GRI Madrid 13% 8.6% 0.1% 2.9% 5.6% 1.0% Paris 57% Barcelona 30% 0 12 35 Paris 23 Madrid 4 Barcelona Group Signed & Not Stays &
Slide 48: A solid capital structure
APPENDICES A solid capital structure > Long-term financing profile with extended debt maturities > LTV of 36.9% with a liquidity of €2,557m > A solid financial structure with competitive financing costs Extension of Debt Maturities A Solid Financial Structure Maturity profile of debt facilities - €b
Slide 49: Interest Rate Risk Under Control & No Refinancing Risk
APPENDICES Interest Rate Risk Under Control & No Refinancing Risk > Strong financial position with few maturities in the next 3 years > Current liquidity covers 2 times future financing needs STRONG FINANCIAL POSITION CURRENT LIQUIDITY ENSURING FUTURE FINANCING 85% c. 5 years +100% 3,4 years 117 bp
Slide 50: Decarbonization Strategy on track
APPENDICES Decarbonization Strategy on track DECARBONIZATION PLAN ON TRACK GREEN BOND CARBON DISCLOSURE SBTI APPROVAL GRESB FULL BOND CONVERSION PROJECT 1.5º AMBITION SCORE: 5-STAR TO GREEN BONDS SCORE: A > First and only Real Estate > 1st IBEX35 company > Investment portfolio: 94 / 100 > Only Offic
Slide 51: Science Based Target initiative (SBTi) - Colonial's Business Plan verified & approved
APPENDICES Science Based Target initiative (SBTi) - Colonial’s Business Plan verified & approved by SBTi > Carbon footprint reduction by 52% vs 2018 baseline year > Acceleration of path towards net zero emissions > Objective of carbon neutrality in 2030 (previous objective 2050) COLONIAL FULLY ALIGN
Slide 52: www.inmocolonial.com
www.inmocolonial.com © Colonial
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