Globalworth Real Estate Investments Limited · LSE:GWI
Globalworth Real Estate Investments — Investor Presentation (November 2017)
75 slides from Globalworth Real Estate Investments's investor presentation, Nov 27, 2017
Slide 1: Globalworth Real Estate Investments Limited Investor Presentation
globalworth TM Globalworth Real Estate Investments Limited Investor Presentation November 2017
Slide 2: Disclaimer
globalworth TM Disclaimer IMPORTANT NOTICE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, SOUTH AFRICA
Slide 3: Agenda
globalworth TM Agenda Section Page Investment Highlights 11 Griffin Premium RE.. Investment 31 Appendix 34 Markets Overview 35 Financials 39 Further Portfolio Information 43 GWI Property Book 46 Griffin Premium RE.. Assets 62 2
Slide 4: GWI Today At A Glance
globalworth TM GWI Today At A Glance Overview Key Metrics (Jun 2017, unless otherwise stated) • Globalworth is set to become the largest listed CEE office investor and developer • Strategy focused on income generation and value creation primarily through a €1,088m 17 92.5% 7.2% sizeable portfolio of
Slide 5: GWI's Journey So Far
globalworth TM GWI’s Journey So Far • Consistent and successful execution of GWI’s strategy in acquisitions, asset management and development of predominantly prime office assets • Established as the leading listed office investor and developer in Romania and, following the expansion to Poland, this
Slide 6: Strong Track Record Of Delivery On Stated Goals
globalworth TM Strong Track Record Of Delivery On Stated Goals • Globalworth has evolved in all areas and surpassed its targets since its IPO in July 2013 Gaining critical mass in CEE from an increase in investments and portfolio value from €0.1bn in 2013 to almost €1.1bn today Significant incre
Slide 7: Strategic Investment In Griffin Premium RE..
globalworth TM Strategic Investment In Griffin Premium RE.. Transaction Overview Transaction Rationale • Announcement on 4 October 2017 of strategic investment in GPRE, a • Consistent with stated strategy Warsaw-listed pure-play Polish real estate platform • Diversification into the region’s largest
Slide 8: GWI & GPRE – Transformational Opportunity For Further Growth And Income
GWI & GPRE – Transformational Opportunity globalworth TM For Further Growth And Income Breakdown By GAV (30 June 2017) GWI GPRE + Contracted Acquisitions/Options(1) GWI + GPRE Contracted Acquisitions/Options(2) GAV: €1,088m GAV: €839m GAV: €1,927m Other Other Romania Industrial 56% 12% Mixed (Office
Slide 9: Acquisition Pipeline & Future Development Opportunities
Acquisition Pipeline & Future Development globalworth TM Opportunities Near-term acquisition pipeline of standing properties targeting attractive income yield and future asset management opportunities(1) Romania Poland Project 3 standing office assets with asset management potential 2 standing offic
Slide 10: Next Generation of Flagship Developments
globalworth TM Next Generation of Flagship Developments Romania Poland Luterana Office Development – Targeted Delivery in 2020 Emilka Mixed-use Development – Targeted Delivery in 2021 • Prominent 27k sqm office development in the heart of Bucharest city centre • Landmark 42 - 50k sq m development in
Slide 11: Emerging Leader In CEE Commercial Real Estate
globalworth TM Emerging Leader In CEE Commercial Real Estate Globalworth Is A Top Owner Of Real Estate In CEE Real estate assets in Romania (€m) Real estate assets in Poland (€m) 1,885 #2 #3 1,623 1,121 1,088 839 627 587 572 288 186 EPP Nepi IMMO GTC GPRE CAImmo GTC GWI Nepi Immo Pro forma (1) Globa
Slide 12: Investment Highlights
Investment Highlights
Slide 13: Pillars Of Success
globalworth TM Pillars Of Success 1 Attractive Market Fundamentals Compelling macro-economic and real estate fundamentals in Romania and Poland 7 Governance 2 Quality Portfolio Sizeable and modern portfolio of high Robust corporate governance structure quality assets with triple-net and long- with m
Slide 14: Focused On Markets With Strong Macro-Economic Fundamentals
Focused On Markets With Strong Macro-Economic globalworth TM 1 Fundamentals… Target Markets Are The Largest In The CEE Consistently High GDP Growth Above EU Average GDP(1) 424.3 169.6 176.6 113.7 81.2 Poland Romania EU Population in mm 5.9 38.0 4.8 5.0 4.4 3.9 3.9 4.0 3.5 3.7 19.8 2.8 10.6 9.8 5.4 P
Slide 15: And Attractive Real Estate Investment Markets
globalworth TM 1 …And Attractive Real Estate Investment Markets Attractive Yield Positive Inflation Expectations Support Rental Growth Prime office yields, H1 2017 5.0% 7.3% 6.2% 4.0% 5.3% 3.0% 4.6% 3.7% 4.0% 2.0% 3.0% 3.3% 1.0% 0.0% (1.0%) (2.0%) 2012 2013 2014 2015 2016 2017E 2018E 2019E Prague Bu
Slide 16: Strong Markets Supported By Growing Demand For Quality Office
Strong Markets Supported By Growing Demand For globalworth TM 1 Quality Office The New European BPO(1) Hubs Business Services Jobs Spike In CEE Poland Romania • Largest outsourcing market in • 1st in the annual BPO index (2nd 19K CEE(2), after continuous growth of largest outsourcing location in 186
Slide 17: GWI Has Assembled A High Quality Portfolio
globalworth TM 2 GWI Has Assembled A High Quality Portfolio High Quality Portfolio Valued At c. €1,088m (Standing Assets Valued At c. €979m)(1) Selection Of Class A Offices Developments 1 2 3 4 51 6 7 Globalworth Tower TCI UniCredit HQ Globalworth Plaza Gara Herastrau Globalworth Campus Renault Buch
Slide 18: Prime Locations In Romania
globalworth TM 2 Prime Locations In Romania All Properties Are Located In Prime Locations Within Their Respective Sub-Markets With 70% Of Portfolio Located In The New CBD UniCredit HQ Historical CBD (Centre) New CBD (North) TCI is a landmark asset as the third tallest Bucharest 1 4 5 6 Newest an
Slide 19: Modern Collection Of Assets With Excellent Green Credentials
Modern Collection Of Assets With Excellent globalworth TM 2 Green Credentials Modern Portfolio Consisting Mostly Of Class A, Multi-Tenanted Offices Year of completion split (based on portfolio value) Green certification split (based on portfolio value) 26% Undergone refurbishment in last 5 years Cer
Slide 20: Diversified High Profile Tenant Base
globalworth TM 2 Diversified High Profile Tenant Base Enviable Line Up Of Tenants From 20 Countries And 27 Sectors Globalworth's multi-tenant/campus leasing model reduces exposure to any particular tenant USA Other Consumer Accounting 17% 8% Gov't Goods 3% 2% Other 3% 14% State Romania Other 28% Con
Slide 21: Dedicated Internal Management Platform
globalworth TM 3 Dedicated Internal Management Platform Leading Property Investment Platform In CEE Organisation Structure • Team of 72 dedicated and multi-disciplinary professionals based in Bucharest Ioannis Papalekas • Strong track record of expanding and managing CRE Founder & CEO portfolio in R
Slide 22: Local And Hands-On Management Platform
globalworth TM 3 Local And Hands-On Management Platform Core strategy • Attracting and retaining high quality tenants • Reacting to and serving tenants’ needs, as well as being ahead of market trends Local presence and anticipating cycles Experience • Tenant trust earned over the years with multiple
Slide 23: Building Long And Expanding Relationships With Large Multinationals
Building Long And Expanding Relationships With globalworth TM 3 Large Multinationals Proven track record in capturing demand not only from top international tenants but successfully strengthening the relationship year after year showcased by continuous increase in take-up Leased area in GWI properti
Slide 24: Proven track record of value creation
globalworth TM 3 Proven track record of value creation Proven track record of value creation with €336m generated or expected from 16 developments/refurbishments and value accretive acquisitions of mispriced or underperforming assets Value Generation Through Value Accretive Acquisitions Of Standing
Slide 25: Proven Avenues to Growth
globalworth TM 4 Proven Avenues to Growth Pillars Of Growth Asset Management Developments Acquisitions • Opportunity to extract income and value from • Outstanding reputation for delivering product • Proven capabilities in acquiring, repositioning assets on time and on budget. Track record evidenced
Slide 26: Attractive Development Pipeline
globalworth TM 4 Attractive Development Pipeline High-Quality Developments Now complemented By Nov-17 Additional Pipeline On Slide 8 Renault Bucharest Globalworth Campus TAP Light Industrial Complex Total Pipeline as (€m) Connected (RBC)(1) (New CBD) (Timisoara) at Aug-17 (West Bucharest) Phase A
Slide 27: Robust Path Of Rental Growth And Attractive Yield on Cost
Robust Path Of Rental Growth And globalworth TM 4 Attractive Yield on Cost Business Plan Contracted Rent Acquisition & Development Cost(1) Jun 17 Aug 17 (€m) (4) Q4 19 Target Asset Name Status Contracted Contracted Investment Cost Remaining Total Acq/Dev Yield on Cost(4)(6) Rent(3) Rent(2)(3) Q4 18
Slide 28: Conservative Financing Policy
globalworth TM 5 Conservative Financing Policy Overview Of Financing Policy GWI €550m June 2017 Eurobond Was A Landmark CEE Transaction • €550m 5-year Eurobond priced on 13 June 2017 • LTV target of 35% • Attractive coupon of 2.875%(1) Financing Strategy • Target diversification across debt maturiti
Slide 29: Supportive Shareholder Base
globalworth TM 5 Supportive Shareholder Base Shareholder Structure(1) Strong Support From Key Shareholders Founder and CEO of Globalworth (I. Papalekas) has invested substantially in the I.Papalekas company, remains fully hands-on and is committed to continue supporting it in the Other 17.0% 26.1%
Slide 30: High Grade Leases With Strong Defensive Features
globalworth TM 6 High Grade Leases With Strong Defensive Features Stable And Predictable Cash Flows Long-Term Leases • In line with strategy, the average duration of new leases signed between 1 Expenses covered by tenants 2014 to 2017 YTD was 8.8 years – significantly higher than the market average
Slide 31: Robust Corporate Governance Structure
globalworth TM 7 Robust Corporate Governance Structure Strong Board Of Directors Geoff Miller Eli Alroy John Whittle Akbar Rafiq Chairman of the Board Ioannis Papalekas Dimitris Raptis Non-executive director Non-executive director Non-executive director Non-executive director Founder, CEO Deputy CEO
Slide 32: Griffin Premium RE.. Investment
Griffin Premium RE.. Investment
Slide 33: Griffin Premium RE.. At A Glance
globalworth TM Griffin Premium RE.. At A Glance • Griffin Premium RE.. (“GPRE”) is a leading office property investor in Portfolio Overview Poland, listed on the Main Market of the Warsaw Stock Exchange, following its IPO in April 2017 GLA GAV NOI(1) NIY Occupancy(2) Properties (sqm) (€m) (€m) (%) (
Slide 34: A High-Quality Portfolio That Complements GWI's
globalworth TM A High-Quality Portfolio That Complements GWI’s GPRE Portfolio Valued At c.€508m(1) EPP Assets At c.€160m(4) GPRE Contracted/Option Class A Offices High-Street Mixed-Use EPP Office(2) Forward Purchase At €36m 1 2 3 4 15 West Link Batory Building I Philips House Hala Koszyki A4 Busines
Slide 35: Appendix
Appendix
Slide 36: Markets Overview
Markets Overview
Slide 37: Romania: Strong Market Supported By Growing Demand For Quality Office
Romania: Strong Market Supported By Growing globalworth TM Demand For Quality Office Overview Influx Of Foreign Direct Investments Into Romania Foreign Direct Investments • Macroeconomic stability is increasingly attracting foreign capital via an (€bn) influx of foreign direct investments with many
Slide 38: Poland: Outstanding Fundamentals As Leading CEE Economy
Poland: Outstanding Fundamentals globalworth TM As Leading CEE Economy Largest CEE Country And Market Economy Immune To External Economic Shocks One Of The Highest Growth Rates In CEE Largest EU development fund beneficiary: €105.8bn allocated Poland was the only European country which avoided Under
Slide 39: Polish Market: Warsaw Dominated, But Regions Increasingly Attractive
Polish Market: Warsaw Dominated, globalworth TM But Regions Increasingly Attractive Important Hub For Business Service Centers Office Real Estate Investments In Poland Stock & Vacancy Rate 2017 YTD Office stock (k sqm) Employment Second best year ever in 7,000 30 Total (€m) 5,700 City growth Polish
Slide 40: Financials
Financials
Slide 41: GWI Summary Income Statement — 2014-2017 H1
globalworth TM GWI Summary Income Statement — 2014-2017 H1 (€m) 2014A 2015A 2016A H12017A(1) Revenue 22.2 44.8 68.2 35.0 Operating expenses (9.3) (16.4) (24.7) (13.0) Net Operating Income 12.9 28.4 43.6 22.0 Administrative expenses (11.7) (10.2) (7.7) (3.2) Acquisition costs (2.5) (0.8) (0.1) (0.3)
Slide 42: GWI Summary Balance Sheet — 2014-2017 H1
globalworth TM GWI Summary Balance Sheet — 2014-2017 H1 (€m) 2014A 2015A 2016A H12017A(1) Non-current assets Investment property 599.3 937.1 980.9 1,048 Goodwill 12.3 12.3 12.3 12.3 Advances for investment property 14.5 4.0 2.5 10.9 Investments in joint-ventures - - - 1.7 Other long-term assets 0.7
Slide 43: Selected Historical Financials — NAV Evolution
globalworth TM Selected Historical Financials — NAV Evolution Figures in € million, Dec 31/Jun 30 2013 2014 2015 2016 H1 2017(1) Reported NAV to ordinary equity 119.7 392.7 499.7 715.4 688.8 holders Adj. Deferred Tax Liability, Goodwill (net effect) and Fair Value of Financial 6.5 41.4 68.6 68.4 71.
Slide 44: Further Portfolio Information
Further Portfolio Information
Slide 45: Globalworth Portfolio Statistics
globalworth TM Globalworth Portfolio Statistics Valuation Contracted Rent Contracted Rent Occupancy GLA Completion Value WALL Location Asset Type June 2017 June 2017 August 2017 August 2017 (sqm) (€m) (years) (€m) (€m) (€m) (%) Globalworth Tower Bucharest New CBD O 54,686 168.6 168.6 11.1 11.1 98.1%
Slide 46: GPRE And EPP Portfolio Statistics
globalworth TM GPRE And EPP Portfolio Statistics NOI Occupancy Occupancy As At Q3-2017 (Except GLA(1) Valuation WALL Location Asset Type (incl. RGA)(1) (incl. RGA)(1) (excl. RGA)(1) Valuation As At H1-2017) (sqm) (€m) (years) (€m) (%) (%) Batory Building 1 Warsaw O 6,610 11.9 1.0 91.9% 90.1% 3.4 Bli
Slide 47: GWI Property Book
GWI Property Book
Slide 48: Standing Assets Globalworth Tower
Standing Assets globalworth TM Globalworth Tower Overview Property photos • Landmark class A multi-tenanted office building located in the Northern part of Bucharest, delivered in 2016 • 2nd tallest office property in Bucharest with a height of 120m , extending over 26 floors above ground and 3 unde
Slide 49: Standing Assets BOB
Standing Assets globalworth TM BOB Excellent Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, delivered in 2008 • Extends over 7 floors above ground and offers 157 parking spaces • Part of a wider building complex developed between 2
Slide 50: Standing Assets BOC
Standing Assets globalworth TM BOC Excellent Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, delivered in 2009 • Extends over 8 floors above ground and 3 underground levels and offers 895 parking spaces Location: Bucharest/New CBD S
Slide 51: Standing Assets Green Court A
Standing Assets globalworth TM Green Court A Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, developed by Skanska and delivered in 2014 • Extends over 12 floors above ground and 3 underground levels and offers 262 parking spaces Loc
Slide 52: Standing Assets Green Court B
Standing Assets globalworth TM Green Court B Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, developed by Skanska and delivered in 2015 • Extends over 12 floors above ground and 3 underground levels and offers 328 parking spaces Loc
Slide 53: Standing Assets Green Court C
Standing Assets globalworth TM Green Court C Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, developed by Skanska and delivered in 2016 • Extends over 12 floors above ground and 3 underground levels and offers 242 parking spaces Loc
Slide 54: Standing Assets Globalworth Plaza
Standing Assets globalworth TM Globalworth Plaza Overview Property photos • Modern class A multi-tenanted office building located in the Northern part of Bucharest, delivered in 2010 and partially refurbished during 2014-15 • The property extends over 21 floors above ground and 3 underground levels
Slide 55: Standing Assets UniCredit HQ
Standing Assets globalworth TM UniCredit HQ Very good Overview Property photos • Landmark class A single-tenanted office building located in the Northern part of Bucharest, delivered in 2012 • The property extends over 16 floors above ground and 2 underground levels and offers 146 parking spaces • T
Slide 56: Standing Assets TCI
Standing Assets globalworth TM TCI Overview Property photos • Landmark class A multi-tenanted office building located in Bucharest’s historical CBD, at Victoriei Square, delivered in 2012 • Currently the 3rd tallest office property in Bucharest at 106m • Comprises of 2 interconnected buildings, exte
Slide 57: Standing Assets City Offices
Standing Assets globalworth TM City Offices Overview Property photos • Mixed-use property comprising two connected buildings, a commercial building and multi-level parking, located in the southern part of Bucharest • Commercial building was entirely refurbished by Globalworth (works completed in Q4-
Slide 58: Standing Assets Gara Herastrau
Standing Assets globalworth TM Gara Herastrau Excellent Overview Property photos • Class A multi-tenanted office building located in the Northern part of Bucharest, delivered in 2016 • The property, extends over 12 floors above ground and 3 underground levels and offers 157 parking spaces Location:
Slide 59: Standing Assets Upground Towers
Standing Assets globalworth TM Upground Towers Overview Property photos • Modern residential complex located in the northern part of Bucharest • Comprises two buildings which offer 571 residential units of which Globalworth owns 431 as of 31 December 2016 as well as 25 retail units and 580 parking s
Slide 60: Standing Assets (with Expansion Potential) TAP
Standing Assets (with Expansion Potential) globalworth TM TAP Overview Property photos • Modern light-industrial complex located in the North-East of Timisoara • In close vicinity of the international airport and • The complex has been developed in phases and it’s almost exclusively let to Valeo, Co
Slide 61: Developments Renault Bucharest Connected (RBC)
Developments globalworth TM Renault Bucharest Connected (RBC) “RBC” is a development in West Bucharest with excellent access to the motorway connecting it to Dacia's warehouse in Pitesti Overview Property photos • Latest development project of Globalworth with site already acquired • Obtained demoli
Slide 62: Developments Globalworth Campus
Developments globalworth TM Globalworth Campus Overview Property photos • Class A office campus which upon completion will comprise of 3 office towers and other amenities, located in the Northern part of Bucharest • Phase “A”, will comprise two (side) towers facing the main street. Tower A is comple
Slide 63: Griffin Premium RE.. Assets
Griffin Premium RE.. Assets
Slide 64: GPRE – Standing Assets Hala Koszyki
GPRE – Standing Assets globalworth TM Hala Koszyki Overview Property photos • Dating back to 1909, Hala Koszyki is firmly entrenched in the Warsaw centre’s landscape and atmosphere. Following a revitalization, it features the original Art Nouveau façade and a functional complex with a total of 37 re
Slide 65: GPRE – Standing Assets Batory Building I
GPRE – Standing Assets globalworth TM Batory Building I Overview Property photos • A modern six-floor office building on Al. Jerozolimskie, one of Warsaw’s main traffic arteries. The location benefits from close proximity to the city centre, Warsaw Chopin Airport and the Warsaw bypass connecting to
Slide 66: GPRE – Standing Assets Bliski Centrum
GPRE – Standing Assets globalworth TM Bliski Centrum Overview Property photos • This six-floor building is situated in an upscale area at the heart of Warsaw’s business district. It was originally finished in 2000 and comprehensively modernized in 2005, including installation of a modern air-conditi
Slide 67: GPRE – Standing Assets CB Lubicz
GPRE – Standing Assets globalworth TM CB Lubicz Overview Property photos • Lubicz Business Centre consists of two modern class A buildings situated in a prestigious district of Kraków. The complex’s strategic location near Rondo Mogilskie, one of the most important public transit interchanges in Kra
Slide 68: GPRE – Standing Assets Green Horizon Office Centre
GPRE – Standing Assets globalworth TM Green Horizon Office Centre Overview Property photos • Green Horizon’s location in the north-eastern part of Lodz’s business district and the high quality of this modern office complex have attracted Polish and international businesses seeking office space in an
Slide 69: GPRE – Standing Assets Nordic Park
GPRE – Standing Assets globalworth TM Nordic Park Overview Property photos • Nordic Park is a modern eight-floor office building featuring timeless architectural design. It is situated in one of Warsaw’s trendiest districts, Powisle. Nordic Park is a boutique office building, meaning it is not part
Slide 70: GPRE – Standing Assets Philips House
GPRE – Standing Assets globalworth TM Philips House Overview Property photos • Completed in 1999, Philips House has become a flagship building of Warsaw’s office building landscape. Being close to one of the capital’s major traffic arteries ensures a very good connection with the city centre. The he
Slide 71: GPRE – Standing Assets Renoma
GPRE – Standing Assets globalworth TM Renoma Overview Property photos • Renoma is a modern multi-functional building combining retail and services with office space, located right in the centre of Wroclaw, with modernist architecture dating back to 1930. The Old Town and the opera house are nearby •
Slide 72: GPRE – Standing Assets Supersam
GPRE – Standing Assets globalworth TM Supersam Overview Property photos • Supersam is a modern multi-functional building combining retail and services with office space, located in the very centre of Katowice the heart of the Silesian agglomeration in a traditionally commercial part of town, close t
Slide 73: GPRE – EPP Portfolio A4 Business Park
GPRE – EPP Portfolio globalworth TM A4 Business Park Overview Property photos • A4 Business Park is a complex of two modern office buildings Location: Katowice Status: Standing Property Project Type: Office Year of Completion: 2014 GLA: 30,556 sqm Key Tenants Source: Company information 72
Slide 74: GPRE – EPP Portfolio Tryton Business House
GPRE – EPP Portfolio globalworth TM Tryton Business House Overview Property photos • Tryton Business House is an office building located in one of the most characteristic places in Gdansk, at the junction of Jana z Kolna and Waly Piastowskie streets, in the vicinity of the inner city centre Location
Slide 75: GPRE – EPP Portfolio West Gate
GPRE – EPP Portfolio globalworth TM West Gate Overview Property photos • West Gate is a modern office building situated in the north-western part of the Wroclaw, with a very good access to the city bypass and the city centre. Wroclaw is in one of the main regional office market in Poland Location: W
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