Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q1 2021 Earnings Presentation
51 slides from Colonial Sfl Socimi Sa's earnings presentation, May 17, 2021
Slide 1: First Quarter Results 2021
First Quarter Results 2021 May 17th, 2021 1/21
Slide 2: 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 3: Agenda
Agenda 01 Highlights 02_ Market Update 03 Operational performance 04 Financial performance 05 ESG Performance - Decarbonization 06 Reloading Growth & Value Creation 07 Conclusion & Outlook 3
Slide 4: 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 5: Starting 2021 with solid like for like performance
01 Highlights Starting 2021 with solid like for like performance
Slide 6: Starting 2021 with solid like for like performance
01 Highlights Starting 2021 with solid like for like performance Q1 2021 WITH SOLID LIKE FOR LIKE RESULTS > Recurring EPS of €5.6cts/share, lower than the previous year YoY decrease manly due to disposals & renovation program acceleration > Comparable recurring EPS of €7.2cts/share in line with the
Slide 7: Starting 2021 with solid like for like performance
01 Highlights Starting 2021 with solid like for like performance ACCELERATION ON PORTFOLIO DECARBONIZATION > Reduction in carbon footprint (51%) “like-for-like” (12/20 vs 12/19) > Reduction in carbon footprint of (77%) “like-for-like” since base year 2015 > Fulfilment in 2020 of the 2030 target - ac
Slide 8: Starting 2021 with solid like for like performance
01 Highlights Starting 2021 with solid like for like performance > EPS decrease due to disposals & renovation program acceleration > Comparable EPS in line with previous year > Net Rental Income with +4% like for like growth Profit & Loss - €m 03/21 YoY Var Solid Fundamentals 03/21 Recurring Net Pro
Slide 9: Scarcity in Prime Product
02 Market Scarcity in Prime Product
Slide 10: Rental Markets - Scarcity of High Quality Product in CBD
02 Market Rental Markets - Scarcity of High Quality Product in CBD > Grade A stock in CBD remains very low in every city > Grade A availability in Paris below 1% > Grade A availability in Barcelona & Paris at 19,000 sqm each and in Madrid at 65,000 sqm Stock CBD as of Q1 2021 Vacancy CBD as of Q4 20
Slide 11: Investment Markets – prime remains resilient
02 Market Investment Markets – prime remains resilient PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > 22@ attracting investments focused on grade A assets BARCELONA > International investors entering the market > Prime yield at 3.60%, with very healthy spread of 326bp vs reference rate > Healthy s
Slide 12: High quality CBD portfolio with superior performance
03 Operational performance High quality CBD portfolio with superior performance
Slide 13: Outstanding leasing activity in Q1 2021
03 Operational performance Outstanding leasing activity in Q1 2021 LETTING VOLUME SQM KPIS Q1 2021 Q1 2020 Q1 2021 YoY RELEASE SPREAD1 ERV GROWTH2 MATURITY (years)3 EPRA VACANCY4 BARCELONA +139% +21% +0.5% 5 7,024 16.789 4.9% years MADRID 5,374 10.890 +103% +18% +3% 6 2.6% years PARIS 1,141 2,080 +8
Slide 14: Letting activity remains strong in Q1 2021
03 Operational performance Letting activity remains strong in Q1 2021 > Colonial with strong letting activity, +1.2x on previous year > Letting activity focused on CBD with high Energy Certificates > Solid mix between renewals and new lets LETTING ACTIVITY REMAINS SOLID IN 1Q 2021 SQM SIGNED LETTING
Slide 15: Rental growth remains solid
03 Operational performance Rental growth remains solid > Releases Spreads remain at double digit levels > Barcelona with +21% and Madrid with +18% release spread > Signed Prices +3% above ERVs, Paris with outstanding +11% vs ERV COLONIAL PRODUCT SIGNED RELEASE SPREAD1 GROWTH ON SIGNED RENTS2 Breakdo
Slide 16: Additional reversion through projects & renovation program
03 Operational performance Additional reversion through projects & renovation program Project - DIAGONAL 525 Project Delivery Performance Barcelona CBD > Full refurbishment increasing > 10-year contract at record prices floors lay-out efficiency > > +50% vs rent pre project 5,706 sqm > Leed Gold cer
Slide 17: Vacancy at very healthy levels in every segment
03 Operational performance Vacancy at very healthy levels in every segment > Office portfolio vacancy stable QoQ at a healthy 4.7% level > Madrid with a vacancy of 2.6% > Paris at 3.8% excluding 103 Grenelle entry into operation EPRA VACANCY BARCELONA1 Secondary Assets COLONIAL GROUP1 Secondary Asse
Slide 18: Occupancy stability in the portfolio
03 Operational performance Occupancy stability in the portfolio > Total vacancy remains stable at levels of 4.8% > 2.4% vacancy due to entries into operation and residual secondary exposure > CBD assets almost fully let EPRA VACANCY Epra SECONDARY EXPOSURE Vacancy 1.2% Le Vaisseau Sant Cugat Ribera
Slide 19: Solid financials underpinned by high quality assets
04 Financial performance Solid financials underpinned by high quality assets
Slide 20: Top line stable in like for like terms
04 Financial performance Top line stable in like for like terms > Gross Rental Income +0.6% like for like > Office portfolio GRI (0.6%) like for like > Paris with positive like for like (flat in offices and positive effect from Hotel Indigo reopening) GROSS RENTAL INCOME - €M EPRA Projects & TOTAL D
Slide 21: Like-for-like rental growth price driven
04 Financial performance Like-for-like rental growth price driven > Like-for-like variance slightly negative due to volume effect > Group rental price like for like variance at +1% > Barcelona with outstanding rental price like for like of +2.6% GROSS RENTAL INCOME - €M SOLID EPRA LIKE-FOR-LIKE VARI
Slide 22: Net Rental Income at +4% like for like
04 Financial performance Net Rental Income at +4% like for like > Net Rental Income +4% like for like > Paris with +6% Net Rental Income > Office portfolio with +2% Net Rental Income (Madrid +4% Net Rental Income) LIKE-FOR-LIKE VARIANCE1 – NRI LFL IN NET RENTAL INCOME FURTHER STRENGTHENED Gross Rent
Slide 23: Capital recycling with flight to quality
04 Financial performance Capital recycling with flight to quality > Strengthened balance sheet - LTV post disposals below 35% > Significant Net debt reduction thanks to cash generation through disposals > Highest Corporate Rating in Spanish Real Estate S&P CONFIRM BBB+ CREDIT RATING… STREGNHTHENED B
Slide 24: Comparable EPS stable – flight to quality & reloading growth
04 Financial performance Comparable EPS stable – flight to quality & reloading growth > Comparable EPS in-line with previous year > EPS decrease mainly due to disposals and acceleration of renovation program > Disposals of non-core: reloading growth through capital recycling RECURRING EARNINGS – VAR
Slide 25: Acceleration of the decarbonization strategy
05 ESG Performance - Decarbonization Acceleration of the decarbonization strategy
Slide 26: Strong Commitment to ESG & Decarbonization
05 ESG Performance - Decarbonization Strong Commitment to ESG & Decarbonization > Significant reduction of the carbon footprint YoY - (51%) like for like > Barcelona and Madrid outstanding > Acceleration of Net Zero transition SIGNIFICANT REDUCTION OF THE CARBON FOOTPRINT TOTAL VARIANCE - (tCO2e) LF
Slide 27: Strong Commitment to ESG & Decarbonization
05 ESG Performance - Decarbonization Strong Commitment to ESG & Decarbonization > Carbon footprint reduction (77%) vs 2015 baseline year > Carbon intensity Scope 1&2 of 7 KgCo2e/sqm, among the lowest levels in Europe > Acceleration of Net Zero transition STRONG YOY CARBON FOOTPRINT REDUCTION ACCELER
Slide 28: Strong Commitment to ESG & Decarbonization
05 ESG Performance - Decarbonization Strong Commitment to ESG & Decarbonization > Carbon footprint reduction (77%) vs 2015 baseline year > 2030 Group Target achieved ahead of timing > Acceleration of path towards net zero emissions ACCELERATION ON DECARBONIZATION COLONIAL FULLY ALIGNED WITH PARIS AG
Slide 29: Superior growth & returns through prime positioning
06 Reloading Growth & Value Creation Superior growth & returns through prime positioning
Slide 30: Strong growth potential in rents & value
06 Reloading Growth & Value Creation STRONG GROWTH POTENTIAL IN RENTS & VALUE 1✓ Project Pipeline with solid value creation potential 2✓ Renovation Program with strong reversion 3✓ Prime Contract Portfolio to capture rental growth 4✓ Prime Portfolio in solid Investment Markets 5✓ Reloading growth th
Slide 31: Project pipeline – significant GRI reversion to come
06 Reloading Growth & Value Creation 1 Project pipeline – significant GRI reversion to come > Prime Project pipeline delivery on track > Around €80m of additional rents to flow into the recurring P/L > YTD more than €27m of secured rents through solid pre-let performance 1 GLA Total Yield Project Ci
Slide 32: Project pipeline – solid value creation potential
06 Reloading Growth & Value Creation 1 Project pipeline – solid value creation potential > Prime Project pipeline delivery on track > 4 out of 9 projects to be delivered during 2021 > Significant capital value creation potential to be crystalized 1 GLA Total Yield Project City % Group Delivery (sqm)
Slide 33: Renovation Program with strong reversion
06 Reloading Growth & Value Creation 2– Renovation Program with strong reversion > Current Program of more than 100,000 sqm > €920m of current value with upside potential > Strong reversionary potential on GRI and Capital Value RENOVATION PROGRAM Significant Value Creation Potential Barcelona Madrid
Slide 34: Prime Contract Portfolio to capture rental growth
06 Reloading Growth & Value Creation 3 Prime Contract Portfolio to capture rental growth > Ongoing delivery of high release spreads > Contract Portfolio under-rented > Reversion as solid growth driver in cash flow ENHANCED THROUGH REVERSION AS SOLID “BUFFER” REVERSION IN PRIME PREMISES RENOVATION PR
Slide 35: Prime Portfolio in solid Investment Markets
06 Reloading Growth & Value Creation 4 Prime Portfolio in solid Investment Markets > Colonial portfolio with additional potential for yield compression > Prime market yields & scarcity value as driver > Prime Yields at very attractive spreads compared to reference rates VALUATION YIELDS (1) BARCELON
Slide 36: Reloading growth through capital recycling
06 Reloading Growth & Value Creation 5 Reloading growth through capital recycling > Ongoing flight to quality through active portfolio management > Disposals of more than €1.8bn of mature and/ or non-core product > Acquisitions of more than €2.9bn of assets reloading the Prime Exposure ONGOING FLIGH
Slide 37: Reloading growth through capital recycling
06 Reloading Growth & Value Creation 5 Reloading growth through capital recycling > Prime Project Pipeline with significant value creation potential > Renovation Program with more than €30m in GRI reversion > Opportunistic acquisitions going forward FLIGHT TO QUALITY & CAPITAL RECYCLING ... … RELOAD
Slide 38: Conclusion & Outlook
07 Conclusion & Outlook
Slide 39: Reloading growth through capital recycling
07 Conclusion & Outlook Reloading growth through capital recycling Q1 2021 WITH SOLID LIKE FOR LIKE PERFORMANCE > Comparable recurring EPS of €7.2cts/share in line with the previous year > Net Rental Income of €68m, +4.0% like-for-like (Paris +6% like for like) > Letting volume of 29,759 sqm, +1.2x
Slide 40: Q&A
Q&A
Slide 41: Markets Update – European Macro scenarios
APPENDICES Markets Update – European Macro scenarios > The IMF updated its GDP projections per country as of April 2021 > Spain and France with the highest GDP growth for 2021/22 among OCDE countries > 2021 as good entry point for playing the recovery cycle in Spain and France GLOBAL GDP IMF ESTIMAT
Slide 42: Rental Markets
APPENDICES Rental Markets > Rental market still with low levels of take-up > Scarcity in Grade A remains Prime rents stable > Secondary markets with some correction on rents Letting activity Stable Prime Rents Highlights €/sqm/month Spain GDP QoQ > 65,000 sqm take-up, +131% year on year variance BAR
Slide 43: Investment markets for prime product remain active (Paris)
APPENDICES Investment markets for prime product remain active > Paris CBD remains an attractive target for Investors > Pricing above appraisals for Core CBD 16/18 Georges V CBD €196m 6,500 sqm 3.65% Yield (1Q 2021) 17 avenue Hoche CBD €80m 2,300 sqm 2.75% Yield (1Q 2021) 2.0x Value 112 Wagram CBD €1
Slide 44: Investment markets for prime product remain active (Spain)
APPENDICES Investment markets for prime product remain active > Spain still with low lever of activity > Investor appetite with increased positive momentum for Prime Titán 8 City Center €60m 10,600 sqm €5,660/sqm Mendez Alvaro (1Q 2021) Francisco Gervás, 10 CBD €70m 8,000 sqm €8,750/sqm MADRID (1Q 2
Slide 45: COVID – Strong Q4 Collection rates
APPENDICES COVID 19 – Strong Q4 Collection rates > 100% Group Offices in Q1 21 > 100% Paris & Barcelona Offices in Q1 21 > 98% Group Offices in Q1 21 COLLECTION RATES DURING COVID-19 Q1 2021 Q2-Q4 2020 Group Paris Barcelona Madrid Group Offices 100% 100% >100% 99% 97% All uses 98% 98% >100% 96% 87%
Slide 46: Rental growth remains solid
APPENDICES Rental growth remains solid RELEASE SPREAD1 GROWTH ON SIGNED RENTS2 Cézanne Saint Honoré Diagonal 409 Washington Plaza Génova, 17 +7% +48% +31% +11% Diagonal 609 Amigó 11-17 Génova 17 Via Augusta, 21-23 +47% +27% +11% +15% Génova 17 José Abascal, 56 Recoletos, 27 Washington Plaza +34% +27
Slide 47: AAA Clients with strong solvency
APPENDICES AAA Clients with strong solvency CONTRACT PORTFOLIO 2020 MATURITIES – DELIVERY YTD ON TRACK 1Q 21 MATURITIES – HIGH LOYALTY CLIENTS 1Q 21 MATURITIES MANAGEMENT ON TRACK 1Q 21 clients with 6 years of loyalty, half of them in Madrid % on annualized 12/20 Group GRI1 Madrid 45% 4% 14% 2% 5% 6
Slide 48: A solid capital structure
APPENDICES A solid capital structure > Long-term financing profile with extended debt maturities > €2.4Bn of liquidity covering debt maturities until 2024 > A solid financial structure with competitive financing costs Extension of Debt Maturities A Solid Financial Structure 31/12/2019 31/12/2020 31/
Slide 49: Solid profitability with enhanced quality
APPENDICES Solid profitability with enhanced quality EPS decrease mainly due to disposals and acceleration of renovation program > Comparable EPS in-line with previous year > Disposals of non-core - reloading growth through capital recycling PROFIT & LOSS ACCOUNT Recurring Earnings - €m 28 36 Nosh (
Slide 50: Strong Commitment to ESG & Decarbonization
APPENDICES Strong Commitment to ESG & Decarbonization INTENSITY LFL 2020 VS 2015 – Scope 1 & 2 (KgCo2e/sqm) BARCELONA LFL (92%) COLONIAL GROUP LFL LFL MADRID (89%) (77%) PARIS LFL (40%) 50
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