Slide 1: FY 2020 Call Presentation
2020 FY 2020 CALL P R E S E N TAT I O N H1 2019
Slide 2: Speakers
SPEAKERS Sylvain Vieujot Alain Debare Sheikh Muhammed Moeen Chief Executive Officer Group Head of Real Estate Finance Director Managed by Equitativa 2
Slide 3: Market Performance
MARKET PERFORMANCE
Slide 4: 2020 A Very Difficult Year
2020 A VERY DIFFICULT YEAR • Force majeure event: Covid-19 • Tenants seeking concessions, rental support & waivers • Forced sellers of assets • Difficult operating environment Managed by Equitativa 4
Slide 5: Covid-19 Timeline
COVID-19 TIMELINE 29 JAN 13 MAR 21 MAR 23 MAR 27 MAR 07 APR 24 APR 27 MAY 15 SEP First case reported Remote work for Beaches, parks, and Closure of malls, National Disinfection Dubai Economy Partial ease of The government The UAE approves Sinopharm government pools, parks, movie restaurants serve Pr
Slide 6: 2021 Huge Shift in Operating Environment
2021 HUGE SHIFT IN OPERATING ENVIRONMENT COMMERCIAL EDUCATION • In 2020: A shift to a home working model by many • In 2020: Headwinds, lockdown measures and families leaving businesses, caused tenants to reduce their space. The the UAE had a significant impact on schools in the region. majority of a
Slide 7: Global Markets 2020 Overview
GLOBAL MARKETS 2020 OVERVIEW • In 2020, Global real estate investment volumes declined by 28% year-on-year from a record amount of capital markets activity in 2019 Source: CNBC Managed by Equitativa 7
Slide 8: Global Markets Outlook
GLOBAL MARKETS OUTLOOK • A worldwide vaccination effort will inevitably support us against indefinite lockdowns, although a rebound in the global economy is not expected before H2 2021 • In 2021, the global real estate market has started to show signs of recovery, which varies by region • Currently,
Slide 9: Dubai Doing Relatively Well
DUBAI DOING RELATIVELY WELL • As at January 2021 the UAE was ranked second globally COVID-19, VACCINATION DOSES ADMINISTERED 13 Jan 2021, per 100 People by way of vaccination doses administered per 100 people. As of today the vaccination program is even 5 10 15 20 25 further advanced, providing conf
Slide 10: UAE Macroeconomic Forecast
UAE MACROECONOMIC FORECAST • The economy is expected to grow in 2021 as it recovers from its pandemic-induced slump in 2020 • Despite a high GDP contraction of around 11% last year, GDP is expected to follow a V-shaped recovery this year and remain positive until 2023 • The UAE’s economy is projecte
Slide 11: Dubai Office Market 2020 Review
DUBAI OFFICE MARKET 2020 REVIEW • The commercial market witnessed challenges in 2020 as a result of the implementation of the remote working model VACANCY LEVELS and lock-downs due to the COVID-19 pandemic. With a return to work policies varying across companies • Vast majority of demand is coming f
Slide 12: Dubai Office Rents Q4 2020
DUBAI OFFICE RENTS Q4 2020 This market study was prepared by CORE. Established in 2008 and present in Abu Dhabi, Dubai and Bahrain, CORE is a full-service real estate advisory, brokerage and management firm delivering integrated expertise across Office, Retail, Industrial and Hotel sectors. Managed
Slide 13: Office Market Forecast
OFFICE MARKET FORECAST OFFICE IS HERE TO STAY SECOND WAVE OF RELOCATIONS RESISTANCE IN HEADLINE RENTS OCCUPANCY AND TENANT RETENTION Flexibility around remote working will We expect a second wave of relocations Landlords are providing a variety of As most new office demand is dominated remain preval
Slide 14: Portfolio Highlights
PORTFOLIO HIGHLIGHTS 14
Slide 15: Operational Highlights
OPERATIONAL HIGHLIGHTS FY 2020 OCCUPANCY -5.1% PROPERTY INCOME -6.1% RENTAL RATES +2.8% UNEXPIRED LEASE TERM +19.8% ORGANIC GROWTH IN RENT Managed by Equitativa 15
Slide 16: Operational Highlights
OPERATIONAL HIGHLIGHTS FY 2020 • Covid-19 - Prevention measures - Support to tenants • Support to tenants through deferments and lease resets • Focus on commercial operations: - Focus on tenant retention (142 renewals - 289,000 sq ft) and new leases (97 leases - 175,000 sq ft) - REIT Largest propert
Slide 17: Property Operations Highlights
PROPERTY OPERATIONS HIGHLIGHTS FY 2020 INDEX TOWER LOFT OFFICES • Occupancy at 49% • Occupancy at 64% - excluding Loft Offices 3 (in refurbishment) • Full year benefit from Property under direct management • Cluster most impacted by Covid-19 disruption • Focus on tenant retention and management of t
Slide 18: Property Operations Highlights
PROPERTY OPERATIONS HIGHLIGHTS FY 2020 EUROPEAN BUSINESS CENTER TRIDENT GRAND MALL • Occupancy at 71% • Stable occupancy • Completion of metro station and road works significantly • 100% retail with tenants particularly impacted by Covid-19 improving visibility and access • Assessing a soft refurbis
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS 19
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS FY 2020 • Rental Income -9.7% year-on-year from USD 64.5m (AED 236.9m) to USD 58.2m (AED 213.7m) • Total Property Income -9.4% year-on-year from USD 72.9m (AED 267.8m) to USD 66.0m (AED 242.4m) • Total Property Expenses -1.3% year-on-year from USD 14.2m (AED 52.2m) to USD 14.0m
Slide 21: Total Property Income
TOTAL PROPERTY INCOME (USD M) (9.4%) 72.9 66.0 17.9 18.3 17.9 18.8 17.2 16.8 16.6 15.4 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total Property Income: This includes Rentals, Service Fee and Other Property Income Managed by Equitativa 21
Slide 22: Net Property Income
NET PROPERTY INCOME (USD M) (11.3%) 58.7 52.0 16.0 15.4 13.5 13.8 13.3 14.0 13.3 11.4 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Net Property Income: Total Property Income less Property Operating Expenses Managed by Equitativa 22
Slide 23: EBITDA
EBITDA (USD M) (12.3%) 11.6 33.4 29.3 8.6 8.8 8.0 7.4 7.6 6.3 4.4 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Managed by Equitativa 23
Slide 24: FFO
FFO (USD M) (88.7%) 3.8 2.3 1.0 0.8 0.1 0.1 0.4 (0.8) 4.4 (2.8) 0.5 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Managed by Equitativa 24
Slide 25: Balance Sheet Overview
BALANCE SHEET OVERVIEW FY 2020 IN USD M 31 DEC 2020 31 DEC 2019 CHANGE USD 803.4 USD 803.4 INVESTMENT PROPERTY 690.3 919.4 (24.9%) Receivables & Others 99.3 82.3 Payables & Others TOTAL ASSETS 803.4 1,058.8 (24.1%) Cash & Equivalents 13.7 ISLAMIC FINANCING 495.6 507.4 (2.3%) TOTAL LIABILITIES 577.9
Slide 26: Strategic Updates
STRATEGIC UPDATES
Slide 27: Strategic Review
STRATEGIC REVIEW • Houlihan Lokey was engaged on 2 August 2020 to advise on the strategic options for the Emirates REIT’s portfolio and on its operational structure • Equitativa, as manager of the REIT, provided full access to their online system which tracks live the portfolios KPIs (the leases, oc
Slide 28: Strategic Review Nasdaq Dubai
STRATEGIC REVIEW NASDAQ DUBAI • As part of the strategic review, our advisors reviewed the EXCHANGE COMPARABLES (INCL. ALL ASSET CLASSES) trading volumes of Emirates REIT on the Nasdaq Dubai ENTITY LISTED 2020 TRADING 2019 TRADING INSTRUMENTS VALUE ($BN) VALUE ($BN) Nasdaq Dubai ~150 ~1.6bn ~1.6bn •
Slide 29: Strategic Review Sukuk
STRATEGIC REVIEW SUKUK • It has been a very volatile year with commercial real estate debt markets having a positive underlying tone at the beginning of the year on a fundamental basis “In a distressed scenario, […] we have excluded • That tone cracked under extreme strain and forced selling […] any
Slide 30: 2021: 20% Reduction in Management Fee
2021: 20% REDUCTION IN MANAGEMENT FEE • The REIT is operating in a very difficult environment, and we have offered short term relief in exchange of longer duration leases to our tenants to support them. We believe this support strengthens the relationship with our tenants “REIT manager fees, which a
Slide 31: Questions & Answers
QUESTIONS & ANSWERS EQUITATIVA
Slide 32: Thank You
THANK YOU EQUITATIVA