Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — FY2023 Earnings Presentation
44 slides from Colonial Sfl Socimi Sa's earnings presentation, Feb 29, 2024
Slide 1: Full Year Results 2023
Full Year Results 2023 February 29th, 2024
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 2023 Highlights 02 Financial Performance 03 Portfolio 04 Future Growth 3
Slide 4: We are strategically positioned in the urban product of the future
01 Highlights We are strategically positioned in the urban product of the future What business want Our current position ▪ Prime, central locations 1. 1 Colonial outperforms on letting activity ✓ ▪ Close to transport links ▪ Amenity and services driven 2. 2 Colonial’s portfolio achieves high occupan
Slide 5: Our Performance
01 Highlights Our Performance Strong Cash Flow Growth Operational Outperformance Active Capital Allocation ESG Leadership 158.000 €723 €m + 9% like for like Disposals to date sqm signed Net Rental Confirming Historical Top 0.2% Global Income Appraisal Values High Levels 1st on Ibex 97% €491m + 12% O
Slide 6: The Best Office Product delivers outperformance on occupancy levels
01 Highlights The Best Office Product delivers outperformance on occupancy levels > Colonial has one of the highest occupancy ratios in the sector thanks to its prime positioning > Colonial’s prime assets are fully benefitting from the polarization trend and scarcity of grade A product in the market
Slide 7: Office Markets polarization: Scarcity of Prime Assets in CBD driving ERV growth
01 Highlights Office Markets polarization: Scarcity of Prime Assets in CBD driving ERV growth PARIS - Office rental market MADRID - Office rental market Market rents (€/sqm/y) Market rents (€/sqm/m) Future Future Outlook Outlook Super Colonial’s playing field Super Colonial’s playing field 1,100 41
Slide 8: Financial Performance
02 Financial Performance Strong growth in earnings driven by pricing power and financial discipline EDOUARD VII, PARIS
Slide 9: Colonial's Prime Strategy delivers strong growth in earnings
02 Financial Performance – Strong Cash Flow & Resilient Values Colonial’s Prime Strategy delivers strong growth in earnings STRONG CASH FLOW GROWTH … GROSS RENTAL INCOME GROUP EBITDA EPRA EARNINGS PER SHARE (EPS) €m €m €cts/share 377 32 354 +8% 316 +18% 30 +18% Like- Continued Continued for-like Ope
Slide 10: Strong Growth on Recurring EPS beating initial guidance
02 Financial Performance – Strong Cash Flow & Resilient Values Strong Growth on Recurring EPS beating initial guidance > EPRA EPS +7% vs previous year > EPRA EPS of continued operations increased by +18%1 RECURRING PROFIT - €m EPRA EARNINGS PER SHARE (EPS) 2023 EPS OF €32cts/sh 42 (18) +7% to +14% v
Slide 11: Strong revenue growth from core portfolio and active portfolio management
02 Financial Performance – Strong Cash Flow & Resilient Values Strong revenue growth from core portfolio and active portfolio management > Core Portfolio contributes +8% to revenue growth on the back of a strong like-for-like > Projects & Acquisitions contribute with +10% to Gross Rental Income Grow
Slide 12: Strong Gross Rental Income increases throughout the portfolio
02 Financial Performance – Strong Cash Flow & Resilient Values Strong Gross Rental Income increases throughout the portfolio > Gross Rental Income increases by +6% driven by Paris portfolio with a +15% growth > Outstanding like-for-like increase of +8%, one of the highest growth rates in the sector
Slide 13: Net Rental Income Growth of +9% like-for-like
02 Financial Performance – Strong Cash Flow & Resilient Values Net Rental Income Growth of +9% like-for-like ACCELERATION IN LIKE-FOR-LIKE RENTAL GROWTH Gross Rental Income Variance YoY Gross Rental Income Like-for-Like1 Growth €m +8% 377 Like- 354 for-like +8% +7% +6% Vs. Alpha rental growth 12/22
Slide 14: Colonial continues with its capital recycling strategy – securing new disposals
02 Financial Performance – Strong Cash Flow & Resilient Values Colonial continues with its capital recycling strategy – securing new disposals Asset disposals proving the resilient value and liquidity of Colonial’s portfolio €150m NEW DISPOSALS1 INITIAL DISPOSAL PROGRAM DISPOSAL PROGRAM II Disposal
Slide 15: Solid capital structure strongly linked to sustainability
02 Financial Performance – Strong Cash Flow & Resilient Values Solid capital structure strongly linked to sustainability > Significant Net Debt Reduction & Increased liquidity following new RCF and Disposals SIGNIFICANT NET DEBT REDUCTION IN 12 MONTHS INCREASED LIQUIDITY FOLLOWING NEW DISPOSALS €m €
Slide 16: Financial cost under control with 100% at fixed rate
02 Financial Performance – Strong Cash Flow & Resilient Values Financial cost under control with 100% at fixed rate > 100% of the debt at fixed cost, resulting in low cost of debt of 1.7%1 > EBITDA growth & Project delivery enhancing credit profile Debt at fixed cost also in the long term More than
Slide 17: Asset Values Bottoming-out
02 Financial Performance – Strong Cash Flow & Resilient Values Asset Values Bottoming-out > GAV variance among the most resilient in the sector > Prime Positioning and Geographic Diversification providing resilience GROSS ASSET VALUES GROSS ASSET VALUE - LIKE FOR LIKE VARIANCE Pricing Power & Projec
Slide 18: Asset Values Bottoming-out: yield expansion
02 Financial Performance – Strong Cash Flow & Resilient Values Asset Values Bottoming-out > Higher Cap Rates partially offset by Rental growth & Project Delivery > Asset Values bottoming-out – more than 100 bp yield expansion since 06/22 RENTAL GROWTH PARTIALLY OFFSETING YIELD EXPANSION VALUES BOTTO
Slide 19: Colonial's Prime Strategy delivers a resilient NTA
02 Financial Performance – Strong Cash Flow & Resilient Values Colonial’s Prime Strategy delivers a resilient NTA Rates impact on NTA partially offset by Rental Growth & Project Value Creation NET TANGIBLE ASSETS: €9.95/share (€10.2 /share pre dividend) €/share NTA var. pre DPS (14%) Net Tangible As
Slide 20: Portfolio
03 Portfolio Our Prime buildings set the market benchmark in rental growth
Slide 21: More than 158,000 sqm signed in 2023, locking in long-term contract maturities
03 Portfolio – Outperformance of Prime Product More than 158,000 sqm signed in 2023, locking in long-term contract maturities STRONG LETTING ACTIVITY & HIGH TENANT LOYALTY OUTPERFORMANCE ON THE BACK OF TOP UBRAN PRODUCT 158,000 Velazquez 86D | Madrid sqm €68m 9 Years Last floor signed at record rent
Slide 22: Colonial delivers strong letting performance capturing rental growth
03 Portfolio – Outperformance of Prime Product Colonial delivers strong letting performance capturing rental growth > Our buildings have delivered strong rental growth in 2023 > Rental growth remains solid throughout the year with further acceleration in the fourth quarter RELEASE SPREAD1 MARKET REN
Slide 23: Colonial has one of the highest occupancy ratios in the sector
03 Portfolio – Outperformance of Prime Product Colonial has one of the highest occupancy ratios in the sector thanks to its prime positioning > Solid Group Occupancy above 97%, with clear leadership among peers > Paris portfolio occupancy continues at 100%, reflecting the scarcity of prime urban pro
Slide 24: Colonial has a healthy level of 3.2% availability of top-quality product
03 Portfolio – Outperformance of Prime Product Colonial has a healthy level of 3.2% availability of top-quality product Scarce availability of high-quality space in the CBD of Madrid and Barcelona GROUP EPRA VACANCY - OFFICES Paris 100% Occupied 0.9% CBD Madrid 0.3% 0.3% 0.1% Recoletos, 37-41 Discov
Slide 25: Strong Leadership on ESG & Decarbonization
03 Portfolio – Outperformance of Prime Product Strong Leadership on ESG & Decarbonization 6.2 Rating A - Score 5 STAR – 4th year in a row Leader in Europe Leader #3 #1 100%3 In IBEX 35 & Among 100 Of Portfolio In IBEX 35 Real Estate Listed Peers Breeam/ Leed Top 0.2% Top 1.5% 94/ 100 Unparalleled St
Slide 26: Future Growth
04 Future Growth Colonial a Prime Platform with multi-layer Cash flow Growth
Slide 27: Prime Platform with a Multi-layer Cash flow Growth
04 Future Growth Strategy – Prime Platform with a Multi-layer Cash flow Growth Colonial a Prime Platform with a Multi-layer Cash flow Growth 1 Inflation hedge EBITDA +12% +18% €316m Vs. 12/22 Continued 2 Rental Growth Operations1 2023 EPS of 32 €Cts/ sh. EPRA Earnings Per Share Beating upper range o
Slide 28: Colonial's Prime Portfolio delivers outperformance
04 Future Growth Strategy – Colonial’s Prime Portfolio delivers outperformance Performance above sector average with solid results across all metrics Group Occupancy Gross Rental Income LFL GAV LFL Variance 2023 Colonial 97.1% Colonial Colonial +8.0% -9% Colonial Colonial Colonial Peer Covivio 96.7%
Slide 29: Colonial's Prime Factory Approach delivers additional Cash Flow & Value Creation
04 Future Growth Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation Colonial is successfully delivering the project pipeline with one of the highest yield on cost in the sector PROJECT PIPELINE GLA Yield PROJECT PIPELINE Project City Let Delivery (sqm) on Cost RETURN 1
Slide 30: Significant additional growth to be unlocked in our portfolio
04 Future Growth Significant additional growth to be unlocked in our portfolio Our portfolio offers significant rental growth and value creation potential to be crystalized RENTAL LOSSES OF DISPOSALS OFFSET BY REVENUE GROWTH SIGNIFICANT ADDITIONAL REVENUE GROWTH Gross Rental Income post disposals re
Slide 31: Additional future growth on the back of capital recycling
04 Future Growth Additional future growth on the back of capital recycling MORE THAN €700m DIVESTED – 14 ASSETS ONGOING FLIGHT TO QUALITY THROUGH ACTIVE CAPITAL ALLOCATION Alpha III 2017 Alpha 2018IV 2019 Alpha 2020V Alpha VI 2021 Alpha 2022VII 2023 2024 1,000 4Q23-2024 €500m Disposal 786 target for
Slide 32: Prime assets, experience destinations, financial discipline
04 Future Growth Strategy - Prime assets, experience destinations, financial discipline Colonial’s letting performance continues at historical high volumes ▪ Scarcity of Grade A stock & race to quality accelerate bifurcation in Europe ▪ Central locations benefiting from short commuting time, key fac
Slide 33: Strategy & Outlook: 2024 The Year To Reload Growth
04 Future Growth Strategy & Outlook 2024 The Year To Reload Growth 1. We are a well-established urban transformation platform with solid outperformance ▪ Urban prime strategic positioning benefits from polarization ▪ We deliver Alpha Value Creation through projects & rental growth ▪ Value accretive
Slide 34: Thank You
THANK YOU https://www.inmocolonial.com/en/shareholders-and-investors 34
Slide 35: Solid cash flow with enhanced quality
APPENDICES Solid cash flow with enhanced quality PROFIT & LOSS ACCOUNT Results analysis - €m 2023 2022 GROSS RENTAL INCOME NET RENTAL INCOME Gross Rents 377 354 €m €m 377 Recurring EBITDA 316 283 354 +8% 353 Like- 326 +9% for-like Like- Recurring financial result (93) (81) for-like Income tax expens
Slide 36: Barcelona: More than 150,000 sqm signed in 2023
APPENDICES More than 150,000 sqm signed in 2023, reducing vacancy and locking in long-term contract maturities LETTING VOLUME EPRA VACANCY1 MATURITY (years) 1st Sqm Value (€) 12/22 12/23 potential exit Expiry TOTAL (122 bps) 158,225 €68m 4.4% 3.2% Vs. 6 9 12/22 PARIS 41,248 €35m 0.2% 0.0% 7 11 MADRI
Slide 37: Ongoing high occupancy levels
APPENDICES Ongoing high occupancy levels EPRA1 OCUPANCY PARIS 100% 100% 100% 100,0% 0.2% PARIS 0.0% 0.0% 0.0% Total 12/22 06/23 09/23 12/23 4.3% 2.8% 2.6% 2.9% Vacancy2 96% 97% 97% 97,1% (2) 12/22 09/23 10/23 12/23 COLONIAL MADRID TOTAL 97% 97% 96,8% 97% 98% 96,2% 96% 95% GROUP 4.4% MADRID 4.5% 3.1%
Slide 38: Colonial's Prime Positioning allows to fully capture cash flows from indexation
APPENDICES Colonial’s Prime Positioning allows to fully capture additional cash flows from indexation Colonial Group has captured +5% of revenue growth through indexation (+6% France and 4% Spain) 2023 INDEXATION FULLY PASSED THROUGH Indexation captured Cumulative Secured Indexation In 2023 Impact 1
Slide 39: A solid capital structure
APPENDICES A solid capital structure EXTENSION OF DEBT MATURITIES A Solid Financial Structure Maturity profile of debt facilities - €m 31/12/2022 31/12/2023 aaaa €5,355m €4,864m 77%1 of debt Net Debt maturing >2026 38.7% 39.5%2 LTV Drawn Facilities €100m €105m 935 Unutilized Facilities €2,240m €2,46
Slide 40: EPRA Yields
APPENDICES EPRA Yields (1) 100% occupied at market rents 40
Slide 41: Paris: Latest market transactions
APPENDICES Latest market transactions Asset Area Price GLA Cap. Value 19 François 1er CBD €150m 2,600 sqm €57,692/sqm (1Q 2023) 150 Champs-Elysées CBD €1,000 18,000 sqm €55,556sqm (4Q 2023) m 62 Champs-Elysées CBD €100m 2,300 sqm €43,478/sqm (1Q 2023) PARIS 35 Montaigne CBD €200m 5,100 sqm €39,216/s
Slide 42: Madrid: Latest market transactions
APPENDICES Latest market transactions Asset Area Price GLA Cap. Value Castellana 51 CBD €239m 18,700 sqm €12,750/sqm (3Q 2022) Almagro 9, José Abascal 56 & Miguel Ángel 11 CBD €315m 33,731 sqm €9,338sqm (1Q 2023) MADRID Fray Luis de León 13 City Center €32m 4,300 sqm €7,442/sqm (4Q 2022) Francisco S
Slide 43: Barcelona: Latest market transactions
APPENDICES Latest market transactions Asset Area Price GLA Cap. Value Portal de l’Àngel 40* City Center €105m 4,400 sqm €23,683/sqm (4Q 2022) * Includes Office & Retail Units Diagonal 662** €240m CBD 27,300 sqm €8,791sqm Transaction not completed ** Sale price as of publishing date (1Q 2023) BARCELO
Slide 44: www.inmocolonial.com
www.inmocolonial.com © Colonial
Inmobiliaria Colonial, SOCIMI — FY2023 Earnings Presentation on 6ix