Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q1 2020 Earnings Presentation
52 slides from Colonial Sfl Socimi Sa's earnings presentation, May 2020
Slide 1: First Quarter Results 2020
First Quarter Results 2020 May 2020 1/20
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_ Covid-19 – First impacts & Colonial’s response 03 Market Update 04 Operational performance 05 Financial performance 06 Prime Positioning enhances Resilience 07 Conclusion 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: A good start into the year 2020 pre-covid
01 Highlights A good start into the year 2020 pre-covid
Slide 6: A good start into the year 2020 pre-covid
01 Highlights A good start into the year 2020 pre-covid COVID19 – COLONIAL’S REPSONSE & IMPACTS > Employees and Clients safety in management focus > All office buildings fully operational and available > April cash recollection with no relevant default > Client negotiations ongoing: P/L impact curre
Slide 7: A good start into the year 2020 – A strengthened position to navigate the crisis
01 Highlights A good start into the year 2020 – A strengthened position to navigate the crisis > Solid top line & bottom line growth > GRI Like for Like at +6% > EPRA Vacancy at 2%, rents signed at high levels Profit & Loss - €m 03/20 YoY Var Solid Fundamentals 03/20 Net Profit €32m +39% EPRA Vacanc
Slide 8: Prime Positioning enhances Resilience
01 Highlights Prime Positioning enhances Resilience A UNIQUE PRIME PORTFOLIO DIVERSIFIED AAA CLIENT PORTFOLIO STRONG BALANCE SHEET TRACK RECORD Strong presence in CBD Tenants with high loyalty Investment Grade Rating confirmed 04/20 Flight to quality through disposals €1.4bn Non-core asset Divestmen
Slide 9: Limited Covid-19 impact YTD
02 Covid-19 – First impacts & Colonial’s response Limited Covid-19 impact YTD
Slide 10: Covid-19 – Planned and considered measures
02 Covid-19 – First impacts & Colonial’s response COVID-19 > Coronavirus epidemic significantly affecting our domestic and global markets > Colonial ready to deal and manage the situation > Proactive management in key areas of the company Planned and considered measures for COVID-19 > The Coronaviru
Slide 11: Responsible commitment during the COVID-19 outbreak
02 Covid-19 – First impacts & Colonial’s response COVID-19 Responsible commitment during the COVID-19 outbreak > Constant coordination and communication with employees, suppliers and clients > Successful implementation of a preventive, containment and crisis stages in all our assets > Flexible worki
Slide 12: Proactive management of the crisis in key areas of the company
02 Covid-19 – First impacts & Colonial’s response COVID-19 Proactive management of the crisis in key areas of the company > Management of Project Pipeline, postponing part of the Capex > Colonial’s financial profile remains strong with more than €2Bn1 of liquidity and LTV at 36% > Impact on developm
Slide 13: Covid-19 impacts estimate as of May 13, 2020
02 Covid-19 – First impacts & Colonial’s response COVID-19 > In April 2020 most of the rental invoices have been collected > Negotiations with clients ongoing > P/L impact currently below 2% of 2020 GRI (estimated max impact of 6% on 2020 GRI) IMPACTS ESTIMATE AS OF MAY 13, 2020 In April 2020 most o
Slide 14: Scarcity in Prime Product
03 Market Scarcity in Prime Product
Slide 15: Rental Markets
03 Market Rental Markets VACANCY % PRIME ERV HIGHLIGHTS €/sqm/month > CBD vacancy at 2.3% -> historically low levels BARCELONA +6% > Prime rents at €27.5/sq m /month, +6% YoY > Take-up of 30,000 sqm, figure that reflects the 1Q 1Q 2019 2020 Covid-19 crisis Vacancy CBD(%) Prime Rents CBD (€/sqm/month
Slide 16: CBD Rental Market
03 Market CBD Rental Market > In the three markets, 1Q 2020 rental prices continued in line with prior quarter > CBD rental transactions decreased due to the scarcity of grade A product and the beginning of COVID-19 crisis Q1 2020 OFFICE MARKETS – MAIN KPIS LATEST CBD RENTAL TRANSACTIONS Take - up #
Slide 17: Investment Markets
03 Market Investment Markets > Office transactions in Spain amounted a volume of €875m, increasing a +6% YoY > Paris transaction volume amounted €4.5bn, increasing a + 114% YoY Q1 2020 INVESTMENTS TRANSACTIONS LATEST INVESTMENT TRANSACTIONS €100m 17,400 Turnkey Prime Yield Sancho de Avila 1 CBD - 22
Slide 18: Prime CBD offices with solid operations
04 Operational performance Prime CBD offices with solid operations
Slide 19: Solid delivery on lettings signed in very good terms
04 Operational performance Solid delivery on lettings signed in very good terms # CONTRACTS SQM SIGNED GRI SECURED1 RENTAL GROWTH2 MATURITY (years)3 EPRA VACANCY4 BARCELONA 8 7,024 €2m +7% 8 2.2% years MADRID 5 5,374 €1m +5% 4 2.49% years PARIS 1,141 €1m +7% 9 2 1.8% years TOTAL 15 13,539 €4m +6% 6
Slide 20: Solid delivery on lettings in Q1 2020
04 Operational performance Solid delivery on lettings in Q1 2020 > 1Q 2020 with strong price increases in every segment > Solid rental growth vs 12/19 ERV > High release spreads SOLID INCREASE IN RENTAL PRICES RELEASE SPREAD1 GROWTH ON SIGNED RENTS 1H 19 2H 19 1Q 20 1H 192 2H 192 1Q 203 BARCELONA +5
Slide 21: Solid delivery on lettings in Q1 2020
04 Operational performance Solid delivery on lettings in Q1 2020 GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 Diagonal 609 Sant Cugat Diagonal 682 Sant Cugat +9% +10% +50% +68% Francisco Silvela 42 Diagonal 409 Francisco Silvela 42 Francisca Delgado 11 +14% +10% +18% +25% Torre Marenostrum 112 Wagram Dia
Slide 22: Solid delivery on lettings in Q1 2020
04 Operational performance Solid delivery on lettings in Q1 2020 > Clients signing solid maturities with long term commitment > Strong diversification across sectors – good quality mix > Balanced mix of renewals & new letting ups LETTING ACTIVITY 1Q 2020 SOLID MIX IN LETTING ACTIVITY Madrid & Paris
Slide 23: Strong YoY letting-up in Madrid
04 Operational performance Strong YoY letting-up in Madrid reaching levels around 2% in every city > More than 700 bp Madrid vacancy reduction YoY > Group vacancy from 4.3% down to 2.4% > High quality available space EPRA VACANCY LETTING UP PRODUCT & OFFLOADING NON CORE MADRID OFFICES PORTFOLIO1 (76
Slide 24: Vacancy at very healthy levels in every segment
04 Operational performance Vacancy at very healthy levels in every segment > Group vacancy at a healthy 2.4%, with Office Portfolio at 2.1% > Barcelona vacancy at 2.2% and Paris vacancy at 1.8% > Madrid vacancy at 2.5% EPRA VACANCY BARCELONA1 Total 4% 3% 2.4% Vacancy(2) COLONIAL GROUP1 MADRID1 Portf
Slide 25: A good start into the year 2020 with solid financials
05 Financial performance A good start into the year 2020 with solid financials
Slide 26: Top line growth in Q1 2020
05 Financial performance Top line growth in Q1 2020 > Group GRI with +6% like for like growth > Madrid & Barcelona with double digit LFL > Paris LFL of +2% GROSS RENTAL INCOME - €M (2) EPRA Projects & like-for-like1 acquisitions Disposals TOTAL +6% GROUP LFL1 +6% (3%) (4%) (0.4%) MADRID +14% +1% (1%
Slide 27: Like-for-like rental growth at +6%
05 Financial performance Like-for-like rental growth at +6% > Like-for-like growth double digit in Spain > Madrid growth driven by a combination of price and volume > Barcelona with strongest price effect GROSS RENTAL INCOME - €M STRONG EPRA LIKE-FOR-LIKE GROWTH EPRA like- GRI LIKE-FOR-LIKE OF +6% P
Slide 28: NRI like for like growth at +7%
05 Financial performance NRI like for like growth at +7% > Net Rental Income like-for-like increase at +7% > Madrid with outstanding +21% like-for-like in Net Rental Income > Like-for-like growth in 1Q20 accelerating by 480 pp YoY LIKE-FOR-LIKE VARIANCE1 – NRI LFL IN NET RENTAL INCOME FURTHER STRENG
Slide 29: Disposal of secondary assets
05 Financial performance Disposal of secondary assets Disposal of secondary assets post COVID-19 outbreak: > Disposal of Hotel Mojácar with +22% premium on GAV > Disposal of a residential unit in Madrid with +23% premium on GAV HOTEL MOJACAR (SOUTH SPAIN) APPARTMENT O’DONELL (MADRID) +22% premium >
Slide 30: A good start into the year 2020 with solid financial results
05 Financial performance A good start into the year 2020 with solid financial results > Net profit of €32m, +39% > Double digit recurring EPS growth > Non-Core Disposals enhancing the quality of returns STRONG EPS GROWTH RECURRING EARNINGS – VARIANCE ANALYSIS RECURRING EPS Cts€/share Hotel Centro No
Slide 31: A good start into the year 2020 with a strong credit profile
05 Financial performance A good start into the year 2020 with a strong credit profile > A stronger Balance Sheet with LTV reduction to 36% > Confirmation of investment grade rating by credit agencies > Access to liquidity adding €200m to the €1.900m of cash and credit lines available I. A STRONGER B
Slide 32: A diversified Core CBD Portfolio with a strong balance sheet
06 Prime Positioning enhances Resilience A diversified Core CBD Portfolio with a strong balance sheet
Slide 33: Resilience through prime positioning
06 Prime Positioning enhances Resilience RESILIENCE THROUGH PRIME POSITIONING 1✓ A super Core CBD Portfolio 2✓ AAA Clients with strong solvency 3✓ A defensive Project Pipeline 4✓ A strong balance sheet 5✓ Flight to quality through active asset management 33
Slide 34: A Super Core CBD Portfolio
06 Prime Positioning enhances Resilience 1A A Super Core CBD Portfolio > Colonial as largest office owner in the City Center of Madrid, Barcelona and Paris > Strong market share in CBD > Prime positioning enhances resilience BARCELONA MADRID PARIS Colonial Portfolio - max rent signed Colonial Portfo
Slide 35: AAA Clients with strong solvency
06 Prime Positioning enhances Resilience 2 AAA Clients with strong solvency A HIGHLY DEFESIVE CLIENT BASE WITH STRONG SOLVENCY PROFILE TENANT PROFILE DEFENSIVE MATURITY AAA TENANTS As of 12/2019 Prime Retail 6% Wework 4% Utopicus 1% Offices 87%1 Small Retail & Leisure <2% 2020 >2020 20% 80% SP Other
Slide 36: Reversion as solid cash flow buffer
06 Prime Positioning enhances Resilience 2 AAA Clients with strong solvency > Reversion as solid cash flow “buffer” > Contract Portfolio under-rented > Delivery of high release spreads YTD > Renovation programs as rental growth accelerator REVERSION AS SOLID “BUFFER” REVERSION IN PRIME PREMISES ENHA
Slide 37: 2020 maturities – delivery YTD on track
06 Prime Positioning enhances Resilience 2 AAA Clients with strong solvency CONTRACT PORTFOLIO 2020 MATURITIES – DELIVERY YTD ON TRACK 2020 MATURITIES – HIGH LOAYLTY CLIENTS 2020 MATURITIES MANAGEMENT ON TRACK 2020 clients with 7 years of loyalty, half of them Paris % on annualized 12/19 Group GRI1
Slide 38: A defensive project pipeline
06 Prime Positioning enhances Resilience 3 A defensive project pipeline > 100% City Centre Exposure > Significant Pre-let level with AAA tenants > High development margin buffer GRI2 – Project Pipeline 87% €85m Delivered Pre-let Pre-let 100% 25% Pre-let 25% Pre-let 8% Under 33% 34% High negotiation
Slide 39: A defensive project pipeline
06 Prime Positioning enhances Resilience 3 A defensive project pipeline > No project deliveries in 2020 > The capex program has been delayed with €75m pending for the rest of 2020 > Additional Pre-letting conversations ongoing Project Pipeline – A defensive approach Solid Project Capex Coverage Deli
Slide 40: A strong balance sheet
06 Prime Positioning enhances Resilience 4 A strong balance sheet > €2.1bn1 of liquidity as of 4/2020, covering more than 4x(2) debt maturities in 20/21 > Covenant LTV and ICR well above required levels > Colonial is one of the few European real estate companies that has maintain its rating post COV
Slide 41: Flight to quality through active asset management
06 Prime Positioning enhances Resilience 5 Flight to quality through active asset management > Ongoing flight to quality through disciplined capital allocation > Disposal of non-core asset for €1.4bn > Increasing the prime exposure and defensive profile of our portfolio INVESTMENTS & DIPOSALS SINCE
Slide 42: Conclusion
07 Conclusion
Slide 43: Conclusion: Covid-19 response and impacts
07 Conclusion COVID19 – COLONIAL’S REPSONSE & IMPACTS > Employees and Clients safety in management focus > All office buildings fully operational and available > April cash recollection with no relevant default > Client negotiations ongoing: P/L impact currently below 2% of 2020 GRI > Potential max
Slide 44: Q&A
Q&A
Slide 45: A solid capital structure
APPENDICES A solid capital structure Large Headroom on All debt Covenants > Bonds issued in Spain require Unsecured debt < Unencumbered assets > Covenants of Credit lines require LTV to be below 55% and ICR above 2.0x AMOUNT COVENTANT REQUIRED LEVEL 12/19 LEVEL Unsecured debt < Unsecured debt: €4.6m
Slide 46: Solid Q1 2020 results pre-covid
APPENDICES Solid Q1 2020 results pre-covid > Net profit of €32m, +39% > Double digit recurring EPS growth > Non-Core Disposals enhancing the quality of returns STRONG EPS GROWTH PROFIT & LOSS ACCOUNT RECURRING RESULT 1Q 2020 1Q 2019 €m +6% LFL +10% + 1Q 19 1Q 20 RECURRING EPS Cts€/share +10% + Recur
Slide 47: Letting Performance
APPENDICES Letting Performance LETTING PERFORMANCE BARCELONA MADRID PARIS 7,024 sq m let 5,374 sq m let 1,141 sq m let > Max. rent signed 28 > Max. rent signed 35 > Max. rent signed 795 €/sqm/month €/sqm/month €/sqm/year > ERV growth1 +7% > ERV growth1 +5% > ERV growth1 +7% > Release spread2 +50% >
Slide 48: Vacancy profile
APPENDICES Vacancy profile > Strong vacancy reduction YoY > Colonial with healthy vacancy levels in every city > Colonial well positioned vs market average EPRA VACANCY(1) VACANCY (2) COLONIAL2 VS. MARKET Total Market Prime CBD Market PARIS (187bp) YoY Colonial Portfolio Portfolio Axiare LFL Colonia
Slide 49: AAA Clients with strong solvency
APPENDICES AAA Clients with strong solvency AAA TOP TENANTS WITH STRONG SOLVENCY TOP TENANTS 12/19 TOP TENANTS BREAKDOWN 12/19 Investment >10 years Grade 57% 80% Loyalty Investment < 5 years 86% > 5 years Grade 13% 5 - 10 Years 29% >2020 Paris 85% 2020 66% 15% Barcelona Maturity 10% Madrid 25% 49
Slide 50: A solid capital structure
APPENDICES A solid capital structure > An unparalleled high-quality collateral diversified in three cities > A solid financial structure with competitive financing costs > A strong credit profile FIRST CLASS COLATERAL A SOLID FINANCIAL STRUCTURE Capital Structure 31/12/2019 31/03/2020 More than €12b
Slide 51: Update on CoWorking – UtopicUs
APPENDICES Update on CoWorking – UtopicUs > Utopicus with consolidated leadership in Spain > Strong brand recognition with well positioning in key locations > Quick expansion with 13 centers and c.40,000 sqm under operation CONSOLIDATION OF A COWORKING PLATFORM IN SPAIN NEW CENTERS IN Q120 #centers
Slide 52: www.inmocolonial.com
www.inmocolonial.com © Colonial
Inmobiliaria Colonial, SOCIMI — Q1 2020 Earnings Presentation on 6ix