Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q3 2018 Earnings Presentation
39 slides from Colonial Sfl Socimi Sa's earnings presentation, November 2018
Slide 1: Third Quarter Results 2018
Third Quarter Results 2018 November 2018 3/18
Slide 2: Disclaimer
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Slide 3: Agenda
Agenda 01 Highlights 02_ Market 03 Operational performance 04 Financial performance 05 Growth drivers 06 Conclusion 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: Highlights: Accelerating the Business Plan
01 Highlights Accelerating the Business Plan
Slide 6: Accelerating the Business Plan
01 Highlights 3Q 2018 Accelerating the Business Plan OUTSTANDING FINANCIAL RESULTS > Gross Rental Income, +22% and +5% like-for-like > Recurring EBITDA, +20% > Recurring earnings, +15% > FY 18E EPS1 guidance confirmed: €22cts/ sh. STRONG OPERATIONAL PERFORMANCE > More than 154,000 sq m let with top
Slide 7: Solid top line growth driving results
01 Highlights 3Q 2018 Solid top line growth driving results > Significant increase of Recurring Earnings of +15% (+21% in a quarter) > Outstanding EPRA Like for Like growth of +5% > Solid rental price increases securing forward looking earnings growth Profit & Loss - €m 3Q 2018 YoY Var Solid Fundame
Slide 8: Market: Scarcity in Grade A
02 Market Scarcity in Grade A
Slide 9: Fundamentals accelerating in every market
02 Market Fundamentals accelerating in every market VACANCY % PRIME ERV HIGHLIGHTS €/sqm/month > Record take-up: 101,000 sq m in Q3 25.0 BARCELONA +7% > CBD vacancy below 4% -> historical low 23.3 > +7% YTD increase in Prime rents 4Q 17 12/17 3Q 18 09/18 Vacancy CBD(%) Prime Rents CBD (€/sqm/month)
Slide 10: Investment Markets remain strong
02 Market Investment Markets remain strong > Scarcity of Grade A product > Accelerating market momentum in every city > Spreads vs reference rates remain attractive PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > Strong Investment volume: €445m YTD BARCELONA > Increasing investor interest faces sca
Slide 11: Operational performance: Offering the better site
03 Operational performance Offering the better site
Slide 12: Grade A product ensures strong letting performance
03 Operational performance Grade A product ensures strong letting performance # CONTRACTS SQM SIGNED GRI SECURED1 INCENTIVES2 EPRA VACANCY3 BARCELONA 20 16,249 €3m 7% 1% MADRID 37 60,853 €16m 4% 12% PARIS 22 19,922 €14m 13% 2% LOGISTIC 3 57,805 €4m 1% 5% TOTAL 82 154,829 €37m 8% 5% (1) Annualized fi
Slide 13: Strong delivery on rental price increases
03 Operational performance Strong delivery on rental price increases > Third quarter in a row with strong price increases in every segment > Outstanding rental growth in every market, Spain double digit > Double digit release-spread in every market, Paris + 13% SOLID INCREASE IN RENTAL PRICES GROWTH
Slide 14: Strong delivery on rental price increases across the entire portfolio
03 Operational performance Strong delivery on rental price increases across the entire portfolio GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 The Window IÉNA Castellana, 52 Percier +26% +36% +40% +17% Torre BCN Washington Plaza Martinez Villergas, 49 Washington Plaza +22% +14% +33% +17% Martinez Villerga
Slide 15: Vacancy remains at healthy levels
03 Operational performance Vacancy remains at healthy levels > Colonial vacancy at a healthy 5% > Barcelona and Paris at or below 2% > Madrid like-for-like at 1% - Discovery, Window & Axiare providing reversionary potential EPRA VACANCY BARCELONA1 MADRID1 COLONIAL GROUP2 PARIS1 LOGISTICS Logistics P
Slide 16: Short-term projects on track to crystalize value
03 Operational performance Short-term projects on track to crystalize value > Successful delivery of projects initiated in 2015/2016 > Rents signed well ahead of initial underwriting > Full value creation still to be crystallized in NAV Discovery Príncipe de Vergara Parc Glories 66% let 80% 94% YTD
Slide 17: Financial performance: Solid top line driving profitability
04 Financial performance Solid top line driving profitability
Slide 18: Double-digit top line growth
04 Financial performance Double-digit top line growth > GRI growth of +22% enhanced through Axiare > GRI like-for-like increase outstanding at +5% > High GRI like for like growth in every single market GROSS RENTAL INCOME - €M +5% EPRA Acquisitions In&Out like-for- Axiare TOTAL EPRA like-for-like1 &
Slide 19: Like-for-like rental growth price driven
04 Financial performance Like-for-like rental growth price driven > Like-for-like growth driven by rental price increases > Barcelona and Madrid with strong price effect > Paris with +5% like-for-like increase, well above peers GROSS RENTAL INCOME - €M STRONG EPRA LIKE-FOR-LIKE GROWTH EPRA Price Vol
Slide 20: Improved credit profile
04 Financial performance Improved credit profile > Highest Corporate Rating in Spanish Real Estate > Important liability management in 2018 > A stronger balance sheet ACTIVE LIABILITY MANAGEMENT … … ENHANCING THE BALANCE SHEET 1 €663m1 new equity issued (Axiare merger & Alpha IV) BBB BBB+ 2 €1,150m
Slide 21: Acceleration of profitable growth
04 Financial performance Acceleration of profitable growth > Strong Top Line driving bottom line > +15% increase of cumulative recurring profit > +21% increase of quarterly recurring profit STRONG TOP & BOTTOM-LINE PERFORMANCE PROFIT & LOSS ACCOUNT EPS Guidance confirmed €22cts Full Year 2018E RECUR
Slide 22: Growth drivers: A stronger platform for future growth
05 Growth drivers A stronger platform for future growth
Slide 23: Future value creation
05 Growth drivers FUTURE VALUE CREATION 1 €1.5bn of project pipeline 2 Capturing reversion in rents 3 Strong investment market 4 Acquisitions with investment discipline 23
Slide 24: €1.5bn of Project Pipeline
05 Growth drivers 1 €1.5bn of Project Pipeline > Successful delivery of projects initiated in 2015/2016 > Important future value creation to be crystalized > Very attractive Yield on Cost 1 2 Project City Delivery GLA (sqm) Total Cost €m Total Cost €/ sqm Yield on Cost 1 Discovery Madrid Delivered 1
Slide 25: Colonial well-positioned to capture reversion
05 Growth drivers 2 Colonial well-positioned to capture reversion > Strong delivery on reversion > Attractive rent roll profile > Solid positioning in growing markets CAPTURING REVERSION ATTRACTIVE RENT ROLL SOLID POSITIONING IN GROWING MARKETS COMMERCIAL LEASE EXPIRY DATES (6/18) Static upside Rele
Slide 26: Investment Market
05 Growth drivers 3 Investment Market > Investor interest for prime product remains strong > Significant capital value increases in recent quarters > Colonial’s assets with prudent appraisal values Madrid City Center (inside M30) Barcelona City Center Paris CBD €/sqm €/sqm €/sqm Market 8,671 Market
Slide 27: Acquisitions – a solid track record in investment discipline
05 Growth drivers 4 Acquisitions – a solid track record in investment discipline > Mainly off-market transactions > High value-added components > City Center locations with strong fundamentals NET INVESTMENTS SINCE 2015 - €m 2015 Alpha I Alpha II Alpha III Alpha IV ACQUISITION TARGETS 1. Prioritize
Slide 28: Alpha IV Acquisition - Smart Capital Recycling to Prime
05 Growth drivers 4 Alpha IV Acquisition - Smart Capital Recycling to Prime > Disposals of €441m with +12% premium on last reported GAV1 > Acquisition of 22% stake in SFL at 19% discount on NAV > Acquisition of 1 Prime Factory project in Barcelona CBD 1 Disposals Disposals €441m Non Core & mature as
Slide 29: Alpha IV Acquisition - Attractive investment for Colonial
05 Growth drivers 4 Alpha IV Acquisition - Attractive investment for Colonial Attractive returns increasing exposure to prime > +4% accretion in EPRA NAV1 > +10% accretion in recurring EPS2 ATTRACTIVE RETURNS ACCRETIVE TRANSACTION FROM DAY ONE > NAV pro-forma of €9.44 per share post deal Proforma EP
Slide 30: Conclusion
06 Conclusion
Slide 31: Guidance 2018 confirmed
06 Conclusion DELIVERY OF BUSINESS PLAN ON TRACK > Guidance 2018 confirmed EPS recurring 2018E: €22cts > Strong operational performance Very healthy vacancy levels Strong growth in rental prices in every city Successful delivery of projects > Solid top line driving bottom-line results Outs
Slide 32: Q&A
Q&A
Slide 33: Barcelona Letting Performance
APPENDICES Barcelona Letting Performance BARCELONA – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 16,249 sq m let Park Cugat Sant Cugat > Max. rent signed 24.0 €/sqm/month > ERV growth +15% (1) +28% +19% vs ERV1 vs ERV1 > Release spread2 +18% Amigó Diagonal 682 +26% +21% v
Slide 34: Madrid Letting Performance
APPENDICES Madrid Letting Performance MADRID – LETTING PERFORMANCE Solid Performance Strong Rental Growth - Highlights 60,853 sq m let De La Vega Business Park Miguel Ángel 11 Génova 17 > Max. rent signed 29.9 €/sqm/month +9% (1) > ERV growth +21% +15% +10% release release vs ERV1 spread spread > Re
Slide 35: Paris Letting Performance
APPENDICES Paris Letting Performance PARIS – LETTING PERFORMANCE Solid Performance Strong Rental Growth - Highlights 19,922 sq m let Louvre Saint-Honoré Iéna > Max. rent signed 787 €/sqm/year > ERV growth +5% (1) +8% +36% vs ERV1 vs ERV1 > Release spread2 +13% Washington Plaza Louvre Saint-Honoré +9
Slide 36: A solid capital structure
APPENDICES A solid capital structure > An unparalleled high-quality collateral diversified in three cities > A solid financial structure with competitive financing costs > A strong credit profile FIRST CLASS COLATERAL A SOLID FINANCIAL STRUCTURE Capital Structure 31/12/2017 30/09/2018 More than €11b
Slide 37: 2018 - Creation of a stronger platform for growth
APPENDICES 2018 - Creation of a stronger platform for growth > Creation of a stronger platform for growth > 2018 a year of transition with many “moving parts” > Full positive impacts from 2019 onwards Action 2018 1 2 3 4 5 6 7 8 9 10 11 12 Axiare Ownership 29% 87% 100% - Full integration Synergies I
Slide 38: Acceleration of profitable growth
APPENDICES Acceleration of profitable growth > +15% increase in Recurring Earnings > Earnings driven by solid top-line growth > Axiare acquisition enhancing results PROFIT & LOSS ACCOUNT RESULTS TOP LINE DRIVEN > Solid 5% like-for-like net rental income growth 33 (19) > Results enhancement through A
Slide 39: www.inmocolonial.com
www.inmocolonial.com © Colonial
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