Slide 1: 2014 Annual Results Presentation
COLONIAL - 2014 Annual Results Presentation- Presentation March 2015 1
Slide 2: Disclaimer
Disclaimer This document contains market estimates and financial forecasts and information from different sources regarding the Colonial Group financial situation, operating results, business, strategies and plans. These forecasts represent no guarantee of the future performance of the companies men
Slide 3: Index
INDEX 1 Colonial at a Glance 2 Operating Performance 3 Financial Review 4 Conclusion & Outlook 3
Slide 4: Colonial at a Glance
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Slide 5: A successful recapitalization – The new Colonial
1 Colonial at a Glance A successful recapitalization – The new Colonial A successful recapitalization - Key milestones Creation of the leading European Prime Office Platform Colonial’s shareholder structure Market Capitalization €m 1 Largest g listed p property p y company p y in Spain p Other Free
Slide 6: Key characteristics
1 Colonial at a Glance Key characteristics Group Key Portfolio Metrics Capital Structure Metrics Group GAV 12/14 €5,757 , m +9.6% LFL Market Capitalization(1) €2,012 , m EPRA NAV 12/14 47.7 +6.3% # of assets 32 Spain19 France (cents €/share) cents €/share (6 months) Surface Above Ground 725,341 sq m
Slide 7: Highlights 2014 – Positive Momentum on all the metrics
1 Colonial at a Glance Highlights 2014 – Positive Momentum on all the metrics Highlights 2014 - Positive momentum on all the metrics EPRA OCCUPANCY – Total Portfolio 87% +3.9 pp GROSS RENTS €211m +3.2% LFL RECURRING EBITDA €161m +4.1% LFL RECURRING EARNINGS €17m +€13m GAV €5,757m +9.6% LFL EPRA NAV
Slide 8: Highlights 2014 – Prime positioning permits strong performance
1 Colonial at a Glance Highlights 2014 – Prime positioning permits strong performance Barcelona GAV €594m +6.3% LFL Gross Rents €28m (4.6)% LFL EPRA Office occupancy 78% EPRA Office occupancy 83% (excluding Diagonal 409 & Travesera/Amigó) Madrid GAV €687m +13.3% LFL Gross Rents €32m +5.4% LFL EPRA O
Slide 9: Highlights 2014 – Prime positioning permits strong performance
1 Colonial at a Glance Highlights 2014 – Prime positioning permits strong performance SPAIN Colonial Spain Performance vs Peers(1) (Like for like) GAV – Var. % Gross Rents – Var. % Colonial Colonial 10.0% Colonial Spain 0.5% Spain Spain na na P Peer 1 P Peer 1 Peer 2 na Peer 2 na Peer 3 na Peer 3 na
Slide 10: Operating Performance
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Slide 11: Active Asset Management to boost value creation
2 Operating Performance Active Asset Management to boost value creation Value creation through active asset management €304m Disposal of a Minority Disposal of a minority stake at maximum price capturing full value potential Stake in SIIC de Paris DISPOSALS Price in line with December 2013 NAV (
Slide 12: Strong Letting Performance
2 Operating Performance Strong Letting Performance Strong letting performance in the three cities Take-up share of Colonial clearly above Colonial’s share on total stock Proven attraction of high quality premises Letting Perfomance New Lettings g Renewals & Revisions “Take-up” Take-up share Sh
Slide 13: Strong Letting Performance
2 Operating Performance Strong Letting Performance Strong letting performance in all the markets Main actions - Spain Building ld Tenant sq.m. CAPITAN HAYA, 53 Loterías y Apuestas del Estado 12,375 MARTINEZ VILLERGAS, 49 Empresa líder en infraestructuras 6,425 PASEO DE LOS TILOS, 2-6 Abertis Infraes
Slide 14: Diversified & resilient tenant base
2 Operating Performance Diversified & resilient tenant base A well diversified client base with top tier clients Superior asset quality permits to retain clients Breakdown by economic sector Government Bodies Financial / 11% Insurance 24% Manufacturing 28% Services 7% Telecoms Professional 7% Se
Slide 15: Occupancy
2 Operating Performance Occupancy Positive momentum in occupancy Upside potential in reaching pre crisis levels EPRA Financial Fi i l Occupancy O (2) Offi Occupancy Office O (1) – Evolution E l ti off Colonial’s C l i l’ Portfolio P tf li Office Total OCCUPANCY - SURFACE 98% 97% 96% OTAL OTAL 85
Slide 16: Prime Factory - Additional rental upside
2 Operating Performance Prime Factory - Additional rental upside Prime Factory – Significant value & cash flow to be unlocked from current portfolio Main Assets - Spain +€87m of additional rents from current portfolio Travessera/Amigó Diagonal, 409 Jose Abascal €m +41% Paseo de los Tilos Alfonso XII
Slide 17: Acquisitions of Trophy Assets in Paris & in Barcelona
2 Operating Performance Acquisitions of Trophy Assets in Paris & in Barcelona INVESTMENT METRICS Rue Condorcet 4-8 A “Trophy Asset” with a AAA client in an attractive location Gaz Réseau Distribution France (GrDF) 25,000 sq m on 10,000 sq m of land, with redevelopment opportunities Four building
Slide 18: Financial Review
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Slide 19: Profit & Loss Account 2014
3 Financial Review Profit & Loss Account 2014 PL Recurring Income - €m – Variance Analysis Results analysis - €m 2014 2013 22.0 (14.9) (14.8) Rental revenues 211 213 Net operating expenses & other income (19) (17) Overheads (32) (32) Recurring EBITDA 161 165 Results associated to SIIC de Paris - rec
Slide 20: Rental income - 2014
3 Financial Review Rental income - 2014 Positive momentum in rental growth, +3.2% like for like PERFORMANCE OF RENTAL INCOME 2014 vs. 2013 €m LFL RCELONA Positive rental growth in 28.4 (1.2) 2.5 27.5 (4.6%) (2.1) Paris BAR 27.2 Strong momentum in 25.0 25.0 2013 Like for Like Projects, refurbishm
Slide 21: Evolution of Asset values 2014
3 Financial Review Evolution of Asset values 2014 Strong momentum in Asset Values, +9.6% like for like SPAIN (GAV €m) TOTAL COLONIAL (GAV €m) +10.9% +7.7% +10.0% +9.6% 1 292 1,292 5,757 10 (0,1) 234 5,347 (308) 1,165 484 117 1,281 1 165 1,165 5 831 5,831 5,347 2013 Comparable Acquisit. Dispossals 20
Slide 22: Main debt figures – 2014
3 Financial Review Main debt figures – 2014 Significant debt reduction post recapitalization Main debt characteristics Group Net Debt - €m (998) 3,543 €m Well diversified mix of debt sources 2,545 Prudent LTV ratios Sufficient funding for new investments Room for improvement of financing cos
Slide 23: Active Management of the Balance sheet - France
3 Financial Review Active Management of the Balance sheet - France Active Management of the Balance sheet - France New Bond Issue 500€m Successful implementation of “Liability Liability Management” Management 1.875% Coupon Oversubscribed book with international high quality accounts Lowest coupo
Slide 24: NAV 2014
3 Financial Review NAV 2014 Strong increase of EPRA NAV in 6 months EPRA NAV Colonial Cts. €/share +6.3% 2.7 0.5 (0.3) 47.7 44.9 EPRA NAV Variance GAV Spain Variance NAV SFL Others EPRA NAV 06/2014 12/2014 €1,430m €1,521m 24
Slide 25: Conclusion & Outlook
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Slide 26: Conclusion – A successful strategy focused on Prime Office
4 Conclusion & Outlook Conclusion – A successful strategy focused on Prime Office Conclusion – A strategy focused on Prime Office delivers superior performance 1 A successful recapitalization creating the largest listed property company in Spain 2 Strong positive momentum in all operating metrics 3
Slide 27: Outlook - Office market review
4 Conclusion & Outlook Outlook - Office market review Outlook – Office market review 1 Momentum M t and d positive iti outlook tl k iin macro ffundamentals, d t l especially i ll iin S Spain, i will ill d drive i office ffi markets k t iin th the next two years 2 Clear decoupling of prime and second
Slide 28: Outlook - Significant upside potential strategy going forward
4 Conclusion & Outlook Outlook - Significant upside potential strategy going forward Outlook – Significant upside potential from implementing the strategy going forward Enhance Cash Flow Strong delivery on letting activity 1 Profit Progressive increase of occupancy Additional momentum through
Slide 29: Q&A
own Q&A 29
Slide 30: Appendices
own Appendices 30
Slide 31: Office Market
APPENDICES Office Market Scarcity of Prime Product Prime Rents Capital Value & Prime Yield Vacancy €/sq m/month Value €/sq m Prime Yield vs risk free rate (36.3%) Current Maximum 12.1% 40 6,100 11,300 RID MADR 25.5 469 bp Madrid < 5% < 2% Total Todo Grade ActivosA Future Oferta Supply futura 2007 20
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