Barwa Real Estate Co. · QSE:BRES
Barwa Real Estate — Q3 2020 Earnings Presentation
40 slides from Barwa Real Estate's earnings presentation, September 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION September 2020
Slide 2: Disclaimer
DISCLAIMER The information contained herein has been prepared by Barwa Real Estate Company Q.P.S.C.(“Barwa”) relying on information obtained from sources believed to be reliable but Barwa does not guarantee the accuracy or completeness of such information. Except for statements of historical facts,
Slide 3: Discussion Summary
DISCUSSION SUMMARY Barwa At A Glance Investment Rationale Qatar Economy Financial Track Record Annexure
Slide 4: Barwa at a Glance
BARWA AT A GLANCE We are one of the leading real estate developers headquartered in Doha, Qatar. We develop and manage properties that reflect the changing needs of the people living, working and visiting the country. Our Vision: To be a reliable Real Estate company, recognized for its strong values
Slide 5: Major Contributor to Qatar's Development
MAJOR CONTRIBUTOR TO QATAR’S DEVELOPMENT Completed 8,148 3.6 mn sq. m. built-up Leadership in affordable residential units and area under operations housing more than 37,300 labour rooms Balanced product mix ~ 80% Op. Revenue2 is Positive Cash Profits1 resulting in stable rental recurring rentals si
Slide 6: Investment Rationale
INVESTMENT RATIONALE
Slide 7: Proxy to Qatar's Real Estate Market
Investing In Barwa PRESENCE ACROSS REAL ESTATE MOVING UP THE 1 6 ECOSYSTEM VALUE CHAIN • Moving towards mid to high-mid residential • Affordable housing solution for families segment in newly developed Lusail city & blue-collared workers • Barwa selects its product offering in alignment • Commercial
Slide 8: Barwa Real Estate – Portfolio Overview
BARWA REAL ESTATE– PORTFOLIO OVERVIEW RESIDENTIAL COMMERCIAL INDUSTRIAL LABOUR ACCOM. LAND BANK • 264,312 sq. m. retail (shopping & restaurant) • 8,148 residential • 68,973 sq. m. office • 445,779 sq. m. • 5.4 million sq. m. units & Villas warehouses & • More then 37,300 domestic land • 701 hotel ke
Slide 9: Balanced Portfolio of Assets
BALANCED PORTFOLIO OF ASSETS Barwa Outperformed Qatar Residential Rental Index over 2016-2019 110 10.0% 100 100 8.0% 7.8% 90 6.0% #4.4% 80 4.0% 70 71.92.0% *Yield on operating assets is 8.7% as of Q4 FY19 60 0.0% Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 2016 2016 2017 2017 2018 2018 2019 2019 KPMG Residential Rental
Slide 10: Inherent Strength Built Over Time Resulted in Strong Brand Preference
Inherent Strength built over time resulted in strong Brand Preference… Timeliness Quality • Proven developer and operator of a range of assets with timely delivery • Quality control is paramount despite tight cost measures • Routine quality checks at various stages of project life cycle • Barwa was
Slide 11: Significant Recurring Revenues & Operating Profit
SIGNIFICANT RECURRING REVENUES & OPERATING PROFIT RECURRING INCOME PROVIDES BETTER CASH FLOW VISIBILITY QAR mn 1,200 180% 96% 160% 93% 93% 1,000 84% 140% 3.6 million sq. m. BUA# under 993 79% 981 956 800 890 870 120% operation 762 100% 600 702 708 663 80% Rental assets spread across 599 400 51%
Slide 12: Prudent Gearing, Sufficient Room for Leveraged Growth
PRUDENT GEARING, SUFFICIENT ROOM FOR LEVERAGED GROWTH Balance Sheet Strength provides an Opportunity for Leveraged Growth *Recurring cash profits have been generated Timely sale of properties have adequately supported consistently, providing sufficient liquidity liquidity 35 1.0 Cash Profits 0.9 30
Slide 13: Comfortable Liquidity Position, for Prudent Capital Allocation
COMFORTABLE LIQUIDITY POSITION, FOR PRUDENT CAPITAL ALLOCATION Comfortable Debt Maturity Profile (QAR Mn) QAR Million Sept-20 2,379 2,464 Debt 9,762 2,157 Cash 799 1,186 1,245 Net Debt 8,963 331 Total Equity 20,020 2020 2021 2022 2023 2024 2025 & Beyond Total Assets 32,033 Liquidity – QAR 2,653 mn (
Slide 14: Optimising Shareholder Value
OPTIMISING SHAREHOLDER VALUE Consistency in Cash Profits, Low Leverage has given Consistent Shareholder Returns QAR Mn 8% 61% 8% 57% 57% 973 973 973 7% 856 51% 50% 51% 778 778 778 6% 6% 6% 584 5% 5% 389 31% 31% 28% 3% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 20
Slide 15: Enhancing Asset Portfolio
ENHANCING ASSET PORTFOLIO Well established Adding diversity Residential & Labour Housing & Education Healthcare Commercial Logistics Sector Sector In-depth understanding Strict implementation Govt. allocated QAR Govt. allocated QAR of the sector to gauge of law banning 19.2 bn in 2019 (9.3%
Slide 16: Premiumisation to Drive Sustained Growth & Better Profitability
PREMIUMISATION TO DRIVE SUSTAINED GROWTH & BETTER PROFITABILITY FREE HOLD ZONES EXPANSION 2004 (3 Zones) 2019 (10 Zones) HOW IT BENEFITS BARWA? District West Bay (Legtaifiya) Land bank The Pearl- Qatar 7.8 mn sq. m. 68% in Qatar Al Khor Resort 32% Abroad Rawdat Al Jahaniyah Qatar land bank Al Qassar
Slide 17: Qatar Economy
QATAR ECONOMY
Slide 18: Qatar Economy – An Overview
QATAR ECONOMY – AN OVERVIEW QATAR ECONOMY IS EXPECTED TO CONTINUE THE GROWTH MOMENTUM POISED FOR OVERALL AT A GLANCE DEMAND DRIVERS GROWTH • Population – 2.78 million as • Qatar’s natural gas resources are the • Permanent Residency for of Jan 2020 (Source: Planning country’s main economic engine and
Slide 19: Qatar Real Estate – An Overview
QATAR REAL ESTATE – AN OVERVIEW Residential Sector QATAR REAL ESTATE INDEX • Recent law amendment of expanding freehold ownership in residential sector and subsequent introduction of the 2-tier residency system to provide further incentive to foreign owners to have outright owner 266.2 • Currently f
Slide 20: Demand Drivers
DEMAND DRIVERS Qatar’s successful bid for the World Cup has had a multi-fold positive impact on Qatar’s Economy by acting as a catalyst to Qatar National Vision 2030 accelerate various projects envisaged by the government in area of : 4 PILLARS OF DEVELOPMENT FIFA 2022 • Infrastructure and utilities
Slide 21: Financial Track Record
FINANCIAL TRACK RECORD
Slide 22: Financial Overview
FINANCIAL OVERVIEW (for the period ended 30 Sept) In QAR Million TOTAL INCOME1 & OP. REVENUE2 OPERATING PROFIT3 2,215 1,949 891 1,833 797 1,624 1,676 762 714 711 1,325 1,239 1,149 1,138 1,191 Q3 2016 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Total Income Operating Revenue Q3 2016 Q3 2017 Q3 2018 Q3 2019 Q3 20
Slide 23: YTD 2020 Key Highlights
YTD 2020 KEY HIGHLIGHTS 80% op. revenue is from Operating Revenue QAR Operating Profit QAR 797 recurring rentals 1,191 mn mn 96% of Operating Profits Net Debt at QAR 8.96 bn Operating Margin 67% from net recurring rental Distributed a 20% cash Leasing started at Al Khor dividend for 2019, Liquidity
Slide 24: YTD 2020 Key Highlights
YTD 2020 KEY HIGHLIGHTS Key financial indicators Q3 2020 Q3 2019 % Change Operating Revenue 1,191 1,138 5% Operating Profits 797 711 12% Operating Profits Margin 67% 63% 7% EBITDA 1,006 1,075 -6% Non Operating Income* 485 486 -0.3% Depreciation & Amortization (44) (42) 4% EBIT 773 1,032 -7% Finance
Slide 25: YTD 2020 vs 2019 Key Highlights
YTD 2020 vs 2019 KEY HIGHLIGHTS Operating Revenues Operating Profits Consultancy 4% Consultancy 7% Consultancy Consultancy 20% 24% Rental 96% Rental 93% Rental Rental 80% 76% Q3 2020 Q3 2019 Q3 2020 Q3 2019
Slide 26: Balance Sheet & Cash Flow Overview
BALANCE SHEET & CASH FLOW OVERVIEW As at 30 Sept 2020 BALANCE SHEET OVERVIEW CASH FLOW OVERVIEW TOTAL QAR 32,032 mn Investments 1.4% 2.4% Others 1.0% in Associates 2.3% Receivables & 0.4% Prepayments 29.4% 4.7% Lease Intangible liabilities Assets 1.7% 4.6% Trading Properties 1.8% Obligations 2.2% un
Slide 27: Ongoing & Recently Completed Projects
ONGOING & RECENTLY COMPLETED PROJECTS PROJECT TIMELINE 2017 2018 2019 2020 2021 2022 Start Finish Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. Mukaynis Compound Dec-17 Jun-21 1.1 Zone 1 Dec-17 May-19 1.1 Zone 2 Dec-17 Aug-19 1.1 Zone 3 & additional works Dec-17 Jun-21 2
Slide 28: Upcoming Project Opportunities
UPCOMING PROJECT OPPORTUNITIES Barwa Real Estate Group is conducting feasibility studies and design enhancements for several land banks in order to ensure their best use and derive attractive returns, including: Lusail North land development Medical City Al Khor Community Energy City Barwa
Slide 29: Project Under Construction
PROJECT UNDER CONSTRUCTION Barwa Real Estate Group has recently signed agreements and commenced construction on 2 new projects in Al Wakra in line with the Group’s initiative to achieve Qatar’s National Vision 2030 to improve the living conditions of all groups in society. These are the Barahat Al J
Slide 30: Annexure
ANNEXURE
Slide 31: Geographical Distribution of Projects
GEOGRAPHICAL DISTRIBUTION OF PROJECTS ONGOING Mukaynis Compound Madinat Al Mawater Phase 3 Al Huweila Land Barahat Al Janoub Al Khor Recreation Extension Al Khor Recreation Madinatna Barwa Salwa – Shell Project Lusail Golf Barwa Salwa Al Khor Extension Al Kharaej Residential Tower LAND BANK
Slide 32: Residential Portfolio
RESIDENTIAL PORTFOLIO Name of Project Residential (Units) Nature of Project Al Khor Community 3,171 Residen al Labor Camp 3* 982 Labor accommoda on Ras Laffan Accommodation-West Side* 688 Labor accommoda on Labor Camp 2* 662 Labor accommoda on Porta cabins 451 Phase 2* 493 Labor accommoda on Labor C
Slide 33: Mixed Use Portfolio (1/2)
MIXED USE PORTFOLIO (1/2) Residential/Labour Retail Office Hotel Warehouse Name of Project Nature of Project (Units) (‘000 sq. m.) (‘000 sq. m.) (Keys) (‘000 sq. m.) Baraha Warehouses Industrial - - - - 184.8 and Workshop Barwa Al Sadd Mix Use 261 4.2 41.8 232 - Barwa Village Mix Use 457 106.2 - - -
Slide 34: Mixed Use Portfolio (2/2)
MIXED USE PORTFOLIO (2/2) Office Name of Project Nature of Project Residential (Units) Retail (‘000 sq. m.) (‘000 sq. m.) Barwa Village Expansion Mix Use 177 10.7 - (Mukaynis Compound) * Mix Use 25,360 13.3 5.4 Salwa Affordable Housing Development Souq Mesaieed Mix Use 138 12.3 7.1 Old Salata Buildi
Slide 35: International Portfolio
INTERNATIONAL PORTFOLIO Office Name of Project Nature of Project (‘000 sq. m.) Cavendish Office 1.0 North Row Office 2.2
Slide 36: Project Status (1/2)
PROJECT STATUS (1/2) MADINAT AL MAWATER – PHASE 3 MUKAYNIS COMPOUND – SALWA SCHOOLS PACKAGE 1 (PPP) Land Area (sq. m.) 339,716 Land Area (sq. m.) 1,179,114 Land Area (sq. m.) Varies BUA (sq. m.) 165,631 BUA (sq. m.) 735,091 BUA (sq. m.) Varies Construction Start Date Aug - 19 Construction Start Date
Slide 37: Project Status (2/2)
PROJECT STATUS (2/2) BARAHAT AL JANOUB MADINATNA Land Area (sq. m.) 773,457 Land Area (sq. m.) 1,141,689 BUA (sq. m.) 754,673 BUA (sq. m.) 1,035,555 Construction Start Date Aug-20 Construction Start Date Aug-20 Construction End Date Apr-22 Construction End Date Apr-22
Slide 38: Domestic Land Bank
DOMESTIC LAND BANK Owned Area (‘000 sq. m.) Lusail (Golf) 3,476 Baraha 3 523 DARA B-F 130 Al Khor Zone 7 54 Barwa Al Doha 48 Alaqaria Delta Center 38 Lehwaila Beach Club 28 Asas Marina Tower 28 Alaqaria South Gate 28 Al-Kharaej Residential Tower 4 Leased Area (‘000 sq. m.) Barwa City Phase 3 330 Maw
Slide 39: International Land Bank
INTERNATIONAL LAND BANK Land* Area (‘000 sq. m.) Country Bahrain Bay 12.5 Bahrain Cyprus Land 54.7 Cyprus Marrakech* 9.6 Morocco Fez * 3.1 Morocco Astrakhan - Russia 150.0 Russia Riyadh Land Development 2,216.1 Saudi Arabia Total 2,446 *Includes pre-existing structures
Slide 40: Investor Relation Team
Investor Relation Team Contact : +974 44088785 Email : Barwa.Investor@barwa.com.qa
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