Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — H1 2024 Earnings Presentation
43 slides from Grand City Properties Sa's earnings presentation, August 2024
Slide 1: Financial Results Presentation H1 2024
FINANCIAL RESULTS PRESENTATION H1 2024 Aug 2024 Hamburg
Slide 2: Highlights
HIGHLIGHTS GCP
Slide 3: H1 2024 Key Results Summary
H1 2024 KEY RESULTS SUMMARY KEY FINANCIAL RESULTS FINANCIAL PROFILE PORTFOLIO P&L H1 2024 change H1 2023 Jun 2024 Dec 2023 Jun 2024 Dec 2023 Net Rental Annualised net €212m 3% €204m LTV 37% 37% €406m €406m Income rent Adjusted EPRA LTV 48% 48% €166m 4% €160m Units 61,923 63,303 EBITDA Net debt/ Vaca
Slide 4: Key Trends and Highlights
KEY TRENDS AND HIGHLIGHTS STRONG OPERATIONS WITH POSITIVE MOMENTUM ❖ GCP recorded like-for-like rental growth of 3.4% YoY, driven mostly by in-place rental growth. ❖ Reversionary rent potential acceleration and increased to 24%. ❖ Market rents continue to increase strongly driven by the expanding su
Slide 5: Operational & Financial Results
OPERATIONAL & FINANCIAL RESULTS 5
Slide 6: Strong Operational Dynamics
STRONG OPERATIONAL DYNAMICS CONTINOUSLY DELIVERING OPERATIONAL PERFORMANCE In-place rent (in €/sqm) +3.8% +3.4% +3.3% CAGR In-place rental growth L-F-L L-F-L 8.9 continued, reaching €8.9/sqm Total net rent growth 8.6 Total net rent growth 8.1 8.2 8.4 as of June 2024 and further Dec 2023 upside to ca
Slide 7: Valuation Update
VALUATION UPDATE: VALUES REACHING BOTTOM AS GROWTH OFFSETS YIELD EXPANSION VALUATION PARAMETERS ❖ GCP recorded like-for-like revaluation of –2% excluding capex, with strong Jun 2024 Dec 2023 operational growth offsetting much of the yield expansion Rent Multiple 20.2x 20.9x ❖ Favorable market fundam
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW ❖ The annualized net rental income is significantly below market rent, indicating a market upside potential of 24%. ❖ In 2024 YTD, GCP signed over €220 million of disposals. ❖ In H1 2024, GCP completed €160 million of asset disposals at a 2% discount to book value. The closed disp
Slide 9: P&L Results
P&L RESULTS Selected consolidated statement of profit or loss H1 2024 H1 2023 NET RENTAL INCOME ADJUSTED EBITDA (in € millions) (in € millions) in € ‘000 unless otherwise indicated +3% Revenue 298,156 309,401 +4% 212 204 Net rental income 211,536 204,403 160 166 Property revaluations and capital los
Slide 10: FFO I + II
FFO I + II FFO I FFO I per share (in € millions) (in €) 0% in € ‘000 unless otherwise indicated H1 2024 H1 2023 0% 94 94 Adjusted EBITDA 166,113 159,596 0.54 0.54 Finance expenses (27,882) (27,342) Current tax expenses (20,835) (20,294) Contribution to minorities (2,292) (2,536) H1 2023 H1 2024 H1 2
Slide 11: Maintenance & Capex
MAINTENANCE & CAPEX NEW FACADE, ROOF + BALCONY RENOVATION REPOSITIONING CAPEX REPOSITIONING CAPEX & MAINTENANCE (in € per average sqm) - Focus remains on improving asset quality, value creation 12.7 and increasing rental income 11.9 - Other value-add measures include: Göttingen (before) - Upgrading
Slide 12: EPRA NAV Metrics
EPRA NAV METRICS EPRA NAV PER SHARE METRICS (in €) EPRA NAV METRICS (in € millions) EPRA NRV PS EPRA NTA PS EPRA NDV PS EPRA NRV EPRA NTA EPRA NDV -2% -2% -3% -2% -2% -3% 26.7 26.1 4,606 4,517 23.2 22.8 4,014 3,944 3,745 3,647 21.7 21.1 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2023 2024 2023
Slide 13: Financial Profile
FINANCIAL PROFILE GCP
Slide 14: Strong Financial Profile
STRONG FINANCIAL PROFILE LIQUIDITY POSITION LOW LEVERAGE INTEREST HEDGING RATIO Wuppertal Fixed & Swapped LOW AND STABLE LTV 94% hedged Capped 45% Board of Directors’ Limit Variable EPRA LTV NET €1.1b 37% 37% (including perpetual DEBT/ Jun 2024 cash and notes as 100% debt) EBITDA 5% liquid assets 89
Slide 15: Successful Capital Market Transactions
SUCCESSFUL CAPITAL MARKET TRANSACTIONS GCP RETURNED TO CAPITAL MARKETS IN 2024 WITH HIGHLY SUCCESSFUL TRANSACTIONS, RECEIVING STRONG INVESTOR SUPPORT, VALIDATING THE STRONG ACCESS TO CAPITAL MARKETS FIRST BOND ISSUANCE SINCE 2021 SUCCESSFUL LIABILITY MANAGEMENT PERPETUAL EXCHANGE AND TENDER OFFER ❖
Slide 16: Debt Maturity Schedule
DEBT MATURITY SCHEDULE AVERAGE DEBT COST OF DEBT 1,400 MATURITY 1.9% 5.1 years Jun 2024 Jun 2024 1,200 AVERAGE DEBT COST OF DEBT MATURITY 1,000 2.2% 5.3 years Jun 2024 Cash and liquid assets + post balance Jun 2024 pro-forma* sheet activities and signed disposals cover debt Jun 2024 pro-forma* EUR M
Slide 17: High Headroom for All Covenant Types
HIGH HEADROOM FOR ALL COVENANT TYPES H1 2024 STRESS CASE 1) COVENANT GCP COVENANT LIMIT RESULTS (value decrease until covenant breach) -41% Implies €4.3bn o GCP remains committed to maintain TOTAL NET DEBT / TOTAL NET ASSETS <=60% 33% (Additional total asset further value loss a conservative financi
Slide 18: Guidance
GUIDANCE GCP
Slide 19: Guidance
GUIDANCE FY 2024 FFO I €180M – €190M FFO I per share €1.04 - €1.10 GUIDANCE INCREASED Dividend per share* €0.78 - €0.83 Total net rent like-for-like growth >3% LTV <45% * The dividend will be subject to market condition and AGM approval Key drivers: ❖ Low single digit adj. EBITDA increase as a resul
Slide 20: Appendix
APPENDIX GCP
Slide 21: Successful Perpetual Notes Transaction
SUCCESSFUL PERPETUAL NOTES TRANSACTION RESULT AND BENEFITS MAIN CHARACTERISTICS OF PERPETUAL NOTES ❖ With the high acceptance rate and issuance of a new large note, GCP reestablished itself in the Capital market. ❖ Perpetual notes have no maturity date. On specified ❖ The offer supports credit metri
Slide 22: Focus on Central Locations in Berlin and NRW
FOCUS ON CENTRAL LOCATIONS IN BERLIN AND NRW* BEST IN CLASS BERLIN PORTFOLIO WELL DISTRIBUTED NRW PORTFOLIO 23% of GCP’s Portfolio Value 4th Largest city in Germany 70% of the Berlin portfolio is 21%* located in top tier of GCP’s Portfolio neighborhoods: Charlottenburg, Wilmersdorf, Mitte, Kreuzberg
Slide 23: High Quality London Portfolio
HIGH QUALITY LONDON PORTFOLIO* 19% of GCP’s WELL CONNECTED ❖The total London portfolio, including pre-marketed units, consists of Portfolio LONDON PORTFOLIO approx. 3,500 units ❖Approx. 80% of the portfolio is situated within a short walking distance to an underground/overground station ❖Through str
Slide 24: Quality East and North Portfolio
QUALITY EAST AND NORTH PORTFOLIO QUALITY EAST PORTFOLIO QUALITY NORTH PORTFOLIO DRESDEN/LEIPZIG/HALLE HAMBURG / BREMEN 13%* 5%* of GCP’s of GCP’s Portfolio Portfolio DIVERSIFICATION INTO GERMANY’S DYNAMIC WELL POSITIONED IN EASTERN CITIES WITH GERMANY’S LARGEST Leipzig & Dresden STRONG DEMOGRAPHIC N
Slide 25: Market Fundamentals Remain Highly Supportive
MARKET FUNDAMENTALS REMAIN HIGHLY SUPPORTIVE Market fundamentals provide significant tailwind to continuous operational achievements resulting in higher rents, lower vacancies, supporting valuations Share of each rental rate segment in total rental offerings per annum Germany ❖ Elevated net migratio
Slide 26: London Rental Market Significant Supply-Demand Imbalance
LONDON RENTAL MARKET SIGNIFICANT SUPPLY – DEMAND IMBALANCE INCREASING DEMAND RESULTING COSTS AND DELAYS REMAIN ELEVATED SUPPLY CONTINUES TO LAG IN HIGHER RENTS - As per the most recent Construction Output Price Indices - New completions continue to lag the required level of 66k - London has witnesse
Slide 27: German Housing Market – Demand Fundamentals
GERMAN HOUSING MARKET – DEMAND FUNDAMENTALS Smaller Household Size1) 1,600k Positive Net Migration Trends3) 1 person 2 persons 3 persons 4 persons 5 or more persons 1,400k 1,200k 1,000k 800k Forecast 600k scenarios 1) 400k Average of approx. 330k per year 400k 41% 43% 42% 43% 43% 45% 46% 290k 38% 20
Slide 28: German Housing Market – Supply Fundamentals
GERMAN HOUSING MARKET – SUPPLY FUNDAMENTALS Strong increase in construction costs, additionally driven by more regulation 1) 800 Actual Completions vs. Required Completions2) Index January 2000 = 100 700 Est. new required level due to net migration: 600K 600 (until 2002) (from 2009) Additional 500 T
Slide 29: London Rental Market – Renting Favorable Over Owning
LONDON RENTAL MARKET – RENTING FAVORABLE OVER OWNING Ratio of house price to median earnings UK home ownership rate ❖ Doubling of house price to 18.0 household income ratio since 16.0 69% early 2000s leading to the 14.0 decrease in affordability of 53% 12.0 home ownership and supporting rental deman
Slide 30: ESG and Sustainability
ESG AND SUSTAINABILITY ENHANCED REPORTING In order to effectively address the varied interests and priorities of our business partners, investors, tenants, employees and communities The non-financial report was 2023 (NON-)FINANCIAL reviewed with limited assurance by KPMG. It provides REPORT a descri
Slide 31: ESG Goals and Contribution
ESG GOALS AND CONTRIBUTION 31
Slide 32: Environment
ENVIRONMENT GOING FORWARD Cologne Halle Create and deliver a portfolio wide CO2 reduction pathway report by energy auditing the environmental performance of buildings such as the use of energy, waste and water. Continue to switch the electricity supply of all common areas to PPA (Power Purchase Agre
Slide 33: Regulatory Environment – Modernisation
REGULATORY ENVIRONMENT – MODERNISATION - GCP continues to monitor the changes with regards to the modernization and sustainability investments. The German government recently rolled out a new subsidy and tax incentive scheme – however, these have changed continuously in recent years, and, in our opi
Slide 34: Social
SOCIAL TENANTS GCP FOUNDATION EMPLOYEES LOOKING FORWARD GCP values diversity – a fact that is also Entertaining, diverse, convincing: GCP From Dortmund to Halle, from Bremen to underlined with almost 40 nations creates attractive digital alternatives to Mainz: Support for charitable projects represe
Slide 35: Governance
GOVERNANCE 1 BEST-IN-CLASS REPORTING LEADING TO HIGH STANDARDS OF TRANSPARENCY - For the SEVENTH CONSECUTIVE year in September 2023, GCP received the EPRA BPR and sBPR gold awards for its financial reporting and sustainability reporting, respectively. 2 EXPERIENCED LEADERSHIP WITH STRONG AND INDEPEN
Slide 36: Financial Policy
FINANCIAL POLICY GCP FINANCIAL POLICY LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios with a strong ICR Unencumbered assets above 50% of total assets Long debt maturity profile Good mix of long-term unsecured bonds &
Slide 37: Analyst Coverage
ANALYST COVERAGE 19.2 14.6 14.5 13.7 12.5 12.2 12.0 11.1 11.0 10.1 10.0 9.3 8.4 8.2 Citigroup DZ Bank Kepler Cheuvreux First Berlin Berenberg Goldman Sachs HSBC Bernstein Deutsche Bank Oddo BHF Kempen & co UBS Jefferies Barclays 16.05.2024 16.05.2024 16.05.2024 17.05.2024 11.04.2024 03.06.2024 15.04
Slide 38: Share Development & Ownership Structure
SHARE DEVELOPMENT & OWNERSHIP STRUCTURE GCP - SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) 26 24 Grand City Properties 462% 22 SDAX (rebased) 177% 20 18 FTSE EPRA/NAREIT 117% 16 Germany (rebased) 14 12 10 Issue price 8 €2.75 6 4 2 2012 2013 2013 2014 2014 2015 2015 2016 2016
Slide 39: Management
MANAGEMENT Refael Zamir Mr. Zamir is the Chief Executive Officer of Grand City Properties since 2020 (and Daily Manager (administrateur-délégué)). Mr. Zamir has been working for the Group since 2013. He served as Chief Chief Executive Officer Financial Officer from 2014 to 2023 and as Chairman of th
Slide 40: Management
MANAGEMENT Senior Management Sebastian Remmert-Faltin Mr. Remmert-Faltin has more than 20 years professional experience in the real estate industry. He covered positions ranging from property and asset management, letting, marketing and other COO operational aspects Michael Bar-Yosef Mr. Bar-Yosef i
Slide 41: Business Risk Profile
CREDIT RATING MATRIX FINANCIAL RISK PROFILE 1 2 3 4 5 6 MINIMAL MODEST INTERMEDIATE SIGNIFICANT AGGRESSIVE HIGH LEVER-AGED 1 aaa/ GCP will continue strengthening its position within the business profile EXCELLENT aa a+/a a- bbb bbb-/bb+ BUSINESS RISK PROFILE aa+ (Vonovia- BBB+)1 2 (GCP) (Aroundtown)
Slide 42: Disclaimer
DISCLAIMER IMPORTANT: This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute
Slide 43: Thank You
THANK YOU Investor Relations Team E-mail: gcp-ir@grandcity.lu www.grandcityproperties.com
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