Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial — Q3 2016 Earnings Presentation
38 slides from Colonial Sfl Socimi Sa's earnings presentation, Nov 14, 2016
Slide 1: Regulatory announcement (Hecho Relevante)
According to article 228 of the Legislative Royal Decree 4/2015 of October 23 approving the revised text of the Securities Market Act, Inmobiliaria Colonial, S.A. (“Colonial” or the "Company") hereby reports the following: REGULATORY ANNOUNCEMENT (“HECHO RELEVANTE”) Following the Significant Event p
Slide 2: Third Quarter Results 2016
Third Quarter Results 2016 November 2016
Slide 3: 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 4: Agenda
Agenda 01 Highlights 02_ Office markets 03 Operating performance 04 Financial review 05 Growth drivers 06 Conclusion 3
Slide 5: 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 6: Highlights
01 Highlights
Slide 7: Another strong set of results
01 Highlights 3Q 2016 Another strong set of results ANOTHER STRONG SET OF RESULTS > Gross Rental Income, +8% like for like > Net Rental Income, +13% like for like > Recurring Net Income, +86% > Net Profit of €249m, +17% SOLID OPERATIONAL PERFORMANCE > More than 70,000 sq m let with top tier clients
Slide 8: Execution of growth strategy on track
01 Highlights 3Q 2016 Execution of growth strategy on track Successful delivery of growth strategy > Strong Like for Like growth rental income : +8% GRI and +13% NRI > Significant increase of Recurring Earnings: +86% > Net Profit of €249m, +17% Valuation BUSINESS MIX- – byGAV use GROUP FINANCIAL PER
Slide 9: Office markets
02 Office markets om
Slide 10: Macroeconomic context
02 Office markets Macroeconomic context Macro outlook remains solid > Fundamentals remain attractive despite increased uncertainty > Still early to assess long term impacts of Brexit vote MARKET TRENDS GDP GROWTH WORLD & EU Global growth remains stable: +3.1% in 2016 Euro area consolidating grow
Slide 11: Rental Market
02 Office markets Rental Market Stable take-up faces scarcity of Grade A product in CBD > Vacancy in CBD far below total market ratio > Paris CBD at historical lows > Grade A product in CBD almost inexistent BARCELONA MADRID PARIS CBD VACANCY % VACANCY % VACANCY % Total Market 11.4% 11.1% Total Mark
Slide 12: Rental Market
02 Office markets Rental Market Prime Product in City Center as key driver to capture selective demand and rental growth > Growth potential in prime rents underpinned by solid fundamentals > Prime rents with positive momentum in the three markets > Paris CBD and Barcelona with strongest growth YTD T
Slide 13: Investment Market
02 Office markets Investment Market Investment markets 2016 remain strong, but below 2015 due to the lack of product > General market volatility increases “flight to quality” > Increasing importance of rental growth for further capital value growth > Spread vs reference rates remain at very attracti
Slide 14: Operating performance
03 Operating performance
Slide 15: Letting activity with strong momentum
03 Operating performance 3Q 16 Letting activity with strong momentum Ongoing strong momentum in letting activity 96% > Barcelona with record volume, more than 41,300 sq m signed in 29 transactions TOTAL 93% > Madrid remains strong, more than 9,100 sq m let in 15 transactions > Paris with high activi
Slide 16: Outstanding occupancy levels
03 Operating performance 3Q 16 Outstanding Occupancy levels Prime positioning with top quality product ensures successful letting-up > EPRA Office Occupancy at 96%, +315 bps in 12 months > Strong performance of Colonial in every market EPRA OFFICE OCCUPANCY YoY VAR 96% 96% TOTAL 93% +315 bp BARCELON
Slide 17: Solid delivery of rental price increases
03 Operating performance 3Q 16 Solid delivery of rental price increases Colonial as leading market indicator for rental price recovery > Strong momentum in occupancy enhances bargaining power > Prime positioning enables rental price increases – especially in CBD assets BARCELONA MADRID PARIS > Signe
Slide 18: Solid delivery of rental price increases: Barcelona and Madrid lettings
03 Operating performance 3Q 16 Solid delivery of rental Price increases Letting up vacant space at top price levels > High quality product attracts top clients > GRI growth through vacancy reduction with high end ERVs Barcelona – New lettings of vacant space Madrid – New lettings of vacant space Av.
Slide 19: Solid delivery of rental price increases: Paris lettings
03 Operating performance 3Q 16 Solid delivery of rental Price increases Letting up vacant space at top price levels > High quality product attracts top clients > GRI growth through vacancy reduction with high end ERVs Paris – New lettings of vacant space Cezanne Saint-Honoré - CBD 103 Grenelle Max R
Slide 20: Execution of value added strategies
03 Operating performance 3Q 16 Execution of value added strategies Ongoing progress on repositioning and value added strategies > Continuous improvement of energy efficiency standards and asset quality > Source for further value creation through rental uplifts & “created” yield compression PORTFOLIO
Slide 21: Execution of value added strategies
03 Operating performance 3Q 16 Execution of value added strategies Successful implementation of value and initiatives > Repositioning programs of current portfolio to unlock additional value + Created ERV uplifts + Created Yield compression CASTELLANA 52 VIA AUGUSTA CEZANNE SAINT-HONORÉ Reposition
Slide 22: Financial review
04 Financial review a = a =i 7 oe ae ae ae _hamitl ee eer = r ee te ath pS a (ee ae TCCUmreté‘(<i’:;!”.tCUCtCt eee
Slide 23: Strong underlying rental growth
04 Financial review 3Q 16 Strong underlying rental growth Successful execution of growth strategy as base for double digit GRI increase > Strong underlying like for like growth: +8% > Additional rental growth from value added strategies & acquisitions: +13% GROSS RENTAL INCOME - €M Like for Projects
Slide 24: Strong underlying rental growth in every market
04 Financial review 3Q 16 Strong underlying rental growth Strong underlying growth in every market > Barcelona with outstanding like for like growth – catching up versus previous years > Madrid remains strong at 4% like for like increase > Paris with strong like for like growth and increasing moment
Slide 25: Disposal at double digit premium to Gross Asset Value
04 Financial review 3Q 16 Disposal at double digit premium to Gross Asset Value Value creation through active asset allocation > Portfolio management focused on optimizing value creation > Disposal of a mature asset with premium to Gross Asset Value BARCELONA – Ausiàs March disposal Maximization of
Slide 26: Positive momentum in earnings
04 Financial review 3Q 16 Positive momentum in earnings Net Profit 17% above previous year > Strong momentum in recurring earnings > Superior value creation in asset portfolio STRONG TOP & BOTTOM LINE PERFORMANCE Profit &&Loss PROFIT LOSSAccounts ACCOUNT GROSS RENTAL INCOME Results analysis - €m 3Q
Slide 27: Successful tapping of bond market
04 Financial review 3Q 16 Successful tapping of bond market Successful issuance of €650m of new financing > Colonial tapped the market for a €600m 8Y senior unsecured bond > A €50m private placement has been issued in November BOND ISSUANCE PRIVATE PLACEMENT EXECUTION HIGHLIGHTS Bond Issuance Size €
Slide 28: Active balance sheet management
04 Financial review 3Q 16 Active balance sheet management ACTIVE BALANCE SHEET MANAGEMENT A LONG TERM MATURITY PROFILE Bonds France Other debt Bonds Spain 1. Set up of an €3,000m Euro Medium Term Note 3,500 €725m extended 2,591 Programme (ETM) 3,000 post 2020 Private Placement 2. Successful issuance
Slide 29: Share buy-back programme
04 Financial review 3Q 16 Active balance sheet management SHARE BUY-BACK PROGRAMME Main characteristics of the share buy-back programme: 1. Objectives of the program Management compensation plan Corporate purposes Other uses of corporate interest approved by the Board of Directors 2. Maximum A
Slide 30: Growth drivers
05 Growth drivers
Slide 31: Growth strategy on track
05 Growth drivers Growth strategy on track Firm delivery of growth plan > Acquisition volumes beating targets > Value creation through transformation to prime products > Superior risk adjusted returns based on solid investment discipline INVESTMENTS SINCE 2015 STRONG DELIVERY YTD Condorcet 1 Paris P
Slide 32: Strong progress on execution of recent Prime Factory acquisitions
05 Growth Drivers Strong progress on execution of recent Prime Factory acquisitions Execution of value added strategies in recent acquisitions > Execution of the projects on track > Important value creation to be captured ESTÉBANEZ CALDERÓN PRINCIPE DE VERGARA 112 PARC GLORIES Structural works und
Slide 33: Transformation and further enhancement of recent core acquisitions
05 Growth Drivers Transformation and further enhancement of recent core acquisitions Execution of value added strategies in recent acquisitions > Strong progress on various value add initiatives > Enhancement of returns through active asset management JOSÉ ABASCAL 45 SANTA ENGRACIA SERRANO 73 Star
Slide 34: Conclusion
06 Conclusion —
Slide 35: Conclusion
06 Conclusion SOLID DELIVERY IN OPERATIONS > Continued strong letting momentum > Healthy occupancy levels in every portfolio > Solid delivery of rental price increases > Strong progress on value added strategies STRONG FINANCIALS > Superior like-for-like growth in rental income > Disposals with prem
Slide 36: Q&A
Q&A
Slide 37: Positive momentum in earnings
APPENDICES Positive momentum in earnings Significant increase in Recurring Net Profit through > Delivery of strong GRI increase based on successful growth strategy > Savings in financing costs due to ongoing liability management STRONG TOP & BOTTOM LINE PERFORMANCE RECURRING NET INCOME – VARIANCE AN
Slide 38: www.inmocolonial.com
www.inmocolonial.com © 2016 Colonial
Inmobiliaria Colonial — Q3 2016 Earnings Presentation on 6ix