Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Day (August 2020)
33 slides from Grupo Argos's investor day presentation, August 2020
Slide 1: Real Estate Business
REAL ESTATE BUSINESS August 2020
Slide 2: Disclaimer
REAL ESTATE BUSINESS Disclaimer This presentation contains certain forward-looking representations and information related to Grupo Argos and its subsidiaries based on currently known facts, expectations and forecasts, circumstances and assumptions regarding future events. Many factors could cause t
Slide 3: Content
REAL ESTATE BUSINESS CONTENT I. Portfolio • National scale land portfolio II. Representative business according to use • Residential E5: E5 (Londoño Gómez) • Residential social housing: Pajonal • Mixed use large extension: Miramar V • Concession: Pajonal III. Valuation • Valuation model (Pajonal, Pa
Slide 4: From legacy assets to a sustainable development portfolio
FROM: Legacy assets with no strategic focus TO: A portfolio focused on the development of sustainable and responsible projects, towards communities and the environment, providing urban development for the territories.
Slide 5: I. Portfolio
REAL ESTATE BUSINESS I. Portfolio I. National scale land portfolio II. Strategic lots for development: Barranquilla – Cartagena III. Portfolio information: • Portfolio area by type • Gross area per Urban and Suburban use • Multi-family housing types on Urban land • Number of housing units on urban a
Slide 6: Portfolio
REAL ESTATE BUSINESS PORTFOLIO Our portfolio is worth COP 2,32 trillion Santa Marta Barranquilla, Ciénaga Pto. Colombia Portfolio composition Tubará Cartagena Juan de Our land portfolio includes different types of areas including: Urban, suburban, rural, Acosta protected and port. Although less than
Slide 7: Our developments are focused on Cartagena (Barú) and Barranquilla
REAL ESTATE BUSINESS PORTFOLIO Our developments are focused on Cartagena (Barú) and Barranquilla Development Strategy Our Masterplan: Defines roads and public areas, assigns areas for urban fittings and environmentally relevant areas, defines private lots for real estate developments, plans uses and
Slide 8: Barú Masterplan
REAL ESTATE BUSINESS PORTFOLIO Barú Masterplan RafaelNuñez Historic Airport Cartagena – 1,180 Ha * Includes San Antonio de Cocon, Portonaito and delivered transfers district Illustrative planning process according to Boca Grande Cartagena de Indias urban development regulations Planning area 1,180 H
Slide 9: Barranquilla and Metropolitan Area
REAL ESTATE BUSINESS PORTFOLIO Barranquilla and Metropolitan Area 306.15 Ha 216.15 Ha La Inmaculada Pajonal Rural, Protected, Reserve Suburban 100.50 Ha Insignares Urban Note: Plots with two different land use 50.63 Ha type circles refer to different typologies Pradomar / Nisperales or products for
Slide 10: Masterplan development
REAL ESTATE BUSINESS PORTFOLIO Masterplan development Riomar Masterplan Approximate size: 1.3 times Central Park Value creation through the urban development process: 10
Slide 11: Land Portfolio – Urban
REAL ESTATE BUSINESS PORTFOLIO Land Portfolio – Urban Portfolio area percentage by type Gross area per use in urban land Suburban Industrial Industrial 37,795 m2 31% Commercial + Urban Comercio + Institucional 1,530,166 m2 Institutional Protected 11% Reserves 29% Single FamilyUnifamiliar Housing 0 m
Slide 12: Land Portfolio – Urban area
REAL ESTATE BUSINESS PORTFOLIO Land Portfolio – Urban area Multi-family housing types on urban area Gross area per usage on urban area Higher Income Industrial Industrial 37,795 m2 19% Social Housing 34% Comercio ++ Commercial 1,530,166 m2 Institucional Institutional Middle Income 23% Unifamiliar 0
Slide 13: Land Portfolio – Suburban area
REAL ESTATE BUSINESS PORTFOLIO Land Portfolio – Suburban area Portfolio area percentage by type Gross area per suburban use Protected Reserves Industrial 133,349 m2 Industrial 29% Comercio Commercial 1,086,449 m2 Suburban 31% Rural Single Family 27% Unifamiliar Housing 9,055,892 m2 Multi-Family Mult
Slide 14: Number of housing units on urban and suburban area
REAL ESTATE BUSINESS PORTFOLIO Land portfolio – Number of housing units on urban and suburban area Number of housing units on suburban land Number of housing units on urban land 35,930 unds Single Family Unifamiliar Housing 2,172 unds 100,920 Multi-Family Multifamiliar Housing 60,538 Multi-Family 7,
Slide 15: Portfolio value share by use and type
REAL ESTATE BUSINESS PORTFOLIO Land portfolio - Portfolio value share by use and type 64% of the portfolio value arises from land destined for residential 36.1% products 27.9% 17.4% 16.2% 1.2% 0.6% 0.3% 0.2% 0.1% Suburban Vivienda en suelo Suburban Comercio en suelo Urban Vivienda en suelo Urban + C
Slide 16: Land portfolio
REAL ESTATE BUSINESS PORTFOLIO Land portfolio Development time per type Cost per sq. mt. of gross area per type $ 189,906 Port Suelo Portuario SueloUrban Urbano 31 años $ 81,832 SueloSuburban Suburbano 38 años Suelo Protección Reserve // $ 15,275 Reserva Protection $ 2,065 $ 425 Suelo Rural, SueloRu
Slide 17: Land portfolio – Inventoried lots
REAL ESTATE BUSINESS PORTAFOLIO Land portfolio – Inventoried lots Inventoried Lots Location Useful Area Type Use PEN Barranquilla 41,620 m2 Urban Industrial CIC / Genoves Barranquilla 29,876 m2 Urban Commercial Villa Carolina 8, Alejandría M25, M26 Barranquilla 27,833 m2 Urban Non-VIP Housing (Middl
Slide 18: II. Representative business by use
REAL ESTATE BUSINESS II. Representative business by use • Residential E5: Londoño Gómez • Residential Low Income Housing: Pajonal • Mixed use – large extension: Miramar V • Other uses: Concesion Costera Barranquilla Cartagena 18
Slide 19: Londoño Gómez - Lago Alto
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Londoño Gómez - Lago Alto Project type: Type: Residential Urban, useful Location: and developed Barranquilla Year: Value: 2017 14.28 billion Income Level: $/sq. mt. saleable : 5 690,000/sq. mt. Density: Lot useful area: Foto del lote, render o foto
Slide 20: Social and Low Income Housing– Pajonal
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Social and Low Income Housing– Pajonal Location: Type: Puerto Colombia Suburban*, Value: useful and 126.50 billion developed $/unit: Year: 17,187,475/unit 2020 Lot useful area: Density: 146,926 sq. mt. 480 units/useful ha *Suburban due to its produ
Slide 21: Miramar V
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Miramar V Project type: Type: Residential and Urban, gross, commercial undeveloped Location: Year: Barranquilla 2018 Value: Income level: 40 billion 3/4 % uses per sq. mt. : Gross lot area: Residential 99% 140,674 m2 Commercial 1% Manual Reference
Slide 22: Concesión Costera Pajonal
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Concesión Costera Pajonal Project type: Type: Highway concession Protected / Suburban Location: $/sq.mt. gross : Puerto Colombia 94,000 / 370,712 Year: Lot gross area: 2018 19,537 /17,572 m2 Value: 8.24 billion Manual Reference / Example 1.1. GROSS
Slide 23: Historical sales for the Urban Development Business
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Historical (invoiced) sales for the Urban Development Business Only the net profit is booked to the P&L and not the 250.00 full revenue from Alameda, as it is investment property and not in inventory. 200.00 Only the net profit from Decameron and M
Slide 24: Accounting Considerations
REAL ESTATE BUSINESS REPRESENTATIVE BUSINESS BY USE Accounting Considerations Inventory vs. Investment Property P&L revenue vs. cash revenue EBITDA vs Value creation • When an asset is held as investment • Revenue under the P&L arises upon signing • Due to revenue recognition principles, sales prope
Slide 25: III. Valuation
REAL ESTATE BUSINESS III. Valuation I. Valuation model (Pajonal, Pavas, Santa Isabel, Insignares) II. Assumptions: 1. Housing demand 2. Discount rate 3. Price and cost growth 4. Assumptions for social housing units 5. Assumptions for E4, E5, E6 housing units 6. Commercial assumptions 7. Opex per uni
Slide 26: Land valuation methodology
REAL ESTATE BUSINESS VALUATION Land valuation methodology - Land has no intrinsic value, it’s value depends on what can be built on it. - The value of the land is the price a developer is willing to pay to obtain an adequate profit upon project completion. Manual Reference / Example To calculate the
Slide 27: Valuation model / Representative lots
REAL ESTATE BUSINESS VALUATION Valuation model / Representative lots - Pajonal, Pavas, Santa Isabel, Insignares Lots: Pajonal, Pavas, Santa Available units 100,000 92,646 92,646 92,646 90,900 88,325 85,749 83,173 COP bn Isabel, Insignares Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Slide 28: Valuation model – Assumptions for valuation
REAL ESTATE BUSINESS VALUATION Valuation model / Representative lots – Assumptions for valuation Assumptions Fundamental / Sustainable Annual Demand (Baranquilla, Puerto Colombia, Soledad) Discount rate 12.76% Annual Market Annual Market Total Market Total housing 100,000 units E4, E5, E6 VIP, VIS,
Slide 29: Assumptions for valuation: Housing demand
REAL ESTATE BUSINESS VALUATION Assumptions for valuation Housing demand: Population of Barranquilla, Puerto Colombia and Soledad Persons per Houshold - Atlántico Fundamental / Sustainable Annual Demand (Baranquilla, Puerto Colombia, Soledad) Annual Market Annual Market Total Market E4, E5, E6 VIP, V
Slide 30: Assumptions for valuation: Units sold
REAL ESTATE BUSINESS VALUATION Assumptions for valuation Housing Demand: Units Sold Over the Last 12 Months (VIS and VIP) Fundamental / Sustainable Annual Demand (Baranquilla, Puerto Colombia, Soledad) Annual Market Annual Market Total Market E4, E5, E6 VIP, VIS, E3 Units 2,767 5,819 8,586 GA Market
Slide 31: Assumptions for valuation: discount rate, price and cost growth
REAL ESTATE BUSINESS VALUATION Assumptions for valuation Discount rate Price and cost growth Social housing (VIS) unit assumptions Discount Rate 12.76% Price and cost growth Social housing units NHPI VIS (LMMW increase) 4.60% NPV Lot / VIS Unit Market share: $ 16,000,000 NHPI Non-VIS 7.00% VIS Units
Slide 32: Assumptions for valuation: housing, commercial and opex
REAL ESTATE BUSINESS VALUATION Assumptions for valuation Assumptions for E4, E5, E6 housing units Commercial assumptions Opex per unit and Optimization Housing units – income levels 4, 5, 6 Commercial assumptions Opex NPV Lot / Unit 4,5,6 Market share: $ 60,000,000 Sale sq.mt. commercial / hous unit
Slide 33: Demand for land
REAL ESTATE BUSINESS VALUATION Demand for land Depends on the demand for different real estate products Use Main determinants of demand • Total population and population growht. • Population structure (for example: home size, working age population, among others). • Population purchasing capacity (r