Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q3 2023 Earnings Presentation
43 slides from Colonial Sfl Socimi Sa's earnings presentation, Nov 9, 2023
Slide 1: Third Quarter 2023
Third Quarter 2023 November 9th, 2023
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 - Pere Viñolas, CEO 02 Financial performance - Carmina Ganyet, CCO 03 Portfolio and Pipeline – Carlos Krohmer, CCDO 04 Future Growth & Conclusion - Pere Viñolas, CEO Pere Viñolas Carmina Ganyet Carlos Krohmer Chief Executive Officer Chief Corporate Officer Chief Corporate Develo
Slide 4: Highlights: Strong Growth in NRI, EBITDA & EPS
01 Highlights Our Performance 1 Strong Growth in NRI, ▪ +11% Net Rental income like for like, leading the sector ▪ +13% Recurring EBITDA growth reaching €233m (vs €207m in 09/2022) EBITDA & EPS ▪ +8% growth of recurring EPS reaching €23.8cts per share 2 ▪ More than 113,000 sq m signed YTD equivalent
Slide 5: Solid tenant trends in prime European offices
01 Highlights Solid tenant trends in prime European offices Colonial’s strategy is focused on prime CBD assets outperforming the market Strong demand for prime assets in city center Tenant demand concentrated in prime assets Increasing European demand with positive momentum 9M 2023 Letting performan
Slide 6: The Best Office Product delivers outperformance on occupancy levels
01 Highlights The Best Office Product delivers outperformance on occupancy levels 1. Colonial has one of the highest occupancy ratios in the sector thanks to its prime positioning 2. Colonial’s prime assets are fully benefitting from the polarization trend and scarcity of grade A product in the mark
Slide 7: The Best Office Product delivers outperformance on rental growth
01 Highlights The Best Office Product delivers outperformance on rental growth 1. Colonial’s portfolio is achieving outstanding rental growth, setting the benchmark for prime rents 2. High quality clients signing the maximum rents to secure low carbon destinations in the City Centre PARIS MADRID BAR
Slide 8: Financial performance – Strong Cash Flow & Resilient Values
02 Financial performance – Strong Cash Flow & Resilient Values Strong top-line results driving profitable growth
Slide 9: Strong Operations
02 Financial Performance – Strong Cash Flow & Resilient Values The Best Office Product delivering outperformance Strong Cash Flow Recurring Net Profit Recurring EPS Recurring EBITDA Revenues €129m €23.8 Cts/sh €233m €279m +19% +19% +19% +8% Continued +8% Continued +13% Continued +7% +8% Operations1
Slide 10: Financial Performance – Solid Cash Flow Growth
02 Financial Performance – Solid Cash Flow Growth Strong profitable growth on all metrics STRONG INCREASE IN NET RENTAL INCOME DRIVING SOLID EPS GROWTH GROSS RENTAL INCOME NET RENTAL INCOME RECURRING EBITDA €m €m €m +8% +11% 279 Like- Like- 262 +19% for-like 261 for-like Continued Operations1 237 23
Slide 11: Full year EPS guidance revised upwards
02 Financial Performance – Strong Cash Flow & Resilient Values Full year EPS guidance revised upwards 1. Recurring EPS +8% vs previous year 2. Recurring EPS of continued operations increased by +19%1 RECURRING PROFIT - €m EARNINGS PER SHARE (EPS3) 34 (13) €cts/share +19% Continued (12) Operations1 2
Slide 12: Strong Revenue with a multi-layer cash flow growth
02 Financial Performance – Strong Cash Flow & Resilient Values Strong Revenue with a multi-layer cash flow growth 1. Core Portfolio contributes +7% to revenue growth on the back of a strong like for like 2. Projects & Acquisitions contributed +11% to Gross Rental Income Growth GROSS RENTAL INCOME -
Slide 13: Strong Gross Rental Income increases throughout the portfolio
02 Financial Performance – Strong Cash Flow & Resilient Values Strong Gross Rental Income increases throughout the portfolio 1. Gross Rental Income increases by +7% driven by Paris portfolio with a +13% growth 2. Outstanding like-for-like increase of +8%, one of the highest growth rates in the secto
Slide 14: Net Rental Income growth of +11% like-for-like
02 Financial Performance – Strong Cash Flow & Resilient Values Net Rental Income growth of +11% like-for-like ACCELERATION IN LIKE-FOR-LIKE RENTAL GROWTH GROSS RENTAL INCOME Gross Rental Income Like-for-Like1 growth €m +8% 279 Like- 262 for-like +8% +7% +7% Alpha rental growth +2% Indexation impact
Slide 15: Colonial has successfully divested more than €570m in line with appraisal values
02 Financial Performance – Strong Cash Flow & Resilient Values Colonial has successfully divested more than €570m in line with appraisal values 1. In a narrow investment market Colonial is successfully divesting a large volume of non-core assets (>€570m) 2. Divestments achieved at attractive pricing
Slide 16: Financial Cost under control with 100% at fixed rate
02 Financial Performance – Strong Cash Flow & Resilient Values Financial Cost under control with 100% at fixed rate 1. Colonial has 100% of the debt at fixed cost maintaining financial costs under control at 1.7% 1 & future cost at <2.5% 2. Standard & Poor’s BBB+ stable outlook credit rating with st
Slide 17: Colonial has achieved financing at attractive conditions
02 Financial Performance – Strong Cash Flow & Resilient Values Colonial has achieved financing at attractive conditions 1. 5-year €835 million sustainability-linked syndicated revolving credit facility, including three ESG performance indicators 2. Group’s liquidity increased up to €2.7bn after disp
Slide 18: Portfolio & Pipeline – Outperformance of Prime Product
03 Portfolio & Pipeline – Outperformance of Prime Product Our Prime buildings set the market reference in rental growth
Slide 19: Colonial delivers strong letting performance
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial delivers strong letting performance STRONG LETTING ACTIVITY & HIGH TENANT LOYALTY In sq m 136,454 117,680 113,285 9/2021 9/2022 9/2023 48% of contracts with 9 Years €49m Luxury Industry Contracts WALT signed1 Signed Tech & Media Pr
Slide 20: Colonial's assets are capturing high rental growth
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial’s assets are capturing high rental growth 1. Our buildings have delivered strong rental growth in 3Q 2023 with double digit increases in Paris 2. Rental growth remains solid throughout the year with further acceleration in the thir
Slide 21: Colonial has one of the highest occupancy ratios in the sector
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial has one of the highest occupancy ratios in the sector thanks to its prime positioning 1. Solid Group Occupancy above 97%, with sustained improvement year to date 2. Paris portfolio occupancy continues at 100%, reflecting the scarci
Slide 22: Colonial has a healthy level of 2.8% availability of top-quality product
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial has a healthy level of 2.8% availability of top-quality product > Scarce availability of high-quality space in the CBD of Madrid and Barcelona > Remaining availability mainly due to entry into operation of the Barcelona renovation
Slide 23: Colonial's Prime Factory Approach delivers additional Cash Flow & Value Creation
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation Colonial is successfully delivering the project pipeline with one of the highest yield on costs in the sector PROJECT PIPELINE RETURN PROJECT PIPELINE GLA Proj
Slide 24: Colonial consolidates its ESG leadership with outstanding GRESB Rating
03 Portfolio and Pipeline – Outperformance of Prime Product Colonial consolidates its ESG leadership with outstanding GRESB Rating ESG LEADERSHIP WITH CLEAR PRIORITIES STANDING INVESTMENTS BENCHMARK 94/100 – FIVESTAR 4th YEAR IN A ROW Third Rank in listed Real Estate Europe “Low Carbon building Awar
Slide 25: Colonial a Prime Platform with a multi-layer Cash flow Growth
04 Future Growth & Conclusion Colonial a Prime Platform with a multi-layer Cash flow Growth
Slide 26: Strategy – Prime Platform with a Multi-layer Cash flow Growth
04 Future Growth & Conclusion Strategy – Prime Platform with a Multi-layer Cash flow Growth Strong portfolio driving EPS guidance upgrade growth in 2023 1 Inflation hedge RECURRING EBITDA +19% €233m +13% FULL YEAR 2023 EPS Continued 2 Rental Growth Operations1 GUIDANCE REVISED Earnings Per Share UP
Slide 27: Colonial's Prime Portfolio outperforming the market on rental growth
04 Future Growth & Conclusion Strategy – Colonial’s Prime Portfolio outperforming the market on rental growth MARKETS COLONIAL OUTPERFORMANCE ON PEERS Prime Rent 1,000 (€/sqm/y) GRI like for like growth 1000 25.0% +18% 900 850 18-23 20.0% Occupancy 100% 800 15.0% PARIS 700 600 Rent in 3Q 23 office r
Slide 28: The right office product – Colonial can find liquidity in narrow markets
04 Future Growth & Conclusion The right office product – Colonial can find liquidity in narrow markets CLOSE TO €600m DIVESTED YTD – 12 ASSETS CAPITAL RECYCLING WITH FLIGHT TO QUALITY • Close to € 600m divested at appraisal value • Disposal of non- core/ secondary assets with weak P. Somport 10-18 C
Slide 29: Prime assets, experience destinations, financial discipline
04 Future Growth & Conclusion Strategy - Prime assets, experience destinations, financial discipline Colonial’s letting performance continues at historical high volumes ▪ Scarcity of Grade A stock & race to quality accelerate bifurcation in Europe ▪ Central locations benefiting from short commuting
Slide 30: Thank You
THANK YOU https://www.inmocolonial.com/en/shareholders-and-investors
Slide 31: Solid profitability with enhanced quality
APPENDICES Solid profitability with enhanced quality PROFIT & LOSS ACCOUNT Results analysis - €m 09 2023 09 2022 GROSS RENTAL INCOME RECURRING EBITDA Gross Rents 279 262 €m €m +8% 279 Like- Recurring EBITDA 233 207 262 +19% for-like Continued Operations1 Recurring financial result (71) (58) 233 207
Slide 32: Colonial delivers strong letting performance
APPENDICES Colonial delivers strong letting performance Colonial has signed more than 113,000 sqm year to date, reducing vacancy and locking in long-term contract maturities LETTING VOLUME EPRA VACANCY1 MATURITY (years) 1st Sqm Value (€) 12/22 09/23 potential exit Expiry TOTAL (166 bps 113,285 €49m
Slide 33: Prime positioning captures additional cash flows from indexation
APPENDICES Colonial’s Prime Positioning allows to fully capture additional cash flows from indexation Colonial Group has captured +5% of revenue growth through indexation (+6% France and 3% Spain) 2023 YTD INDEXATION FULLY PASSED THROUGH Indexation captured Cumulative Secured Indexation YTD 09/23 Im
Slide 34: Colonial's Prime Factory Approach delivers solid Value Creation
APPENDICES Colonial’s Prime Factory Approach delivers solid Value Creation 1. Colonial is successfully delivering the project pipeline with one of the highest yield on costs in the sector 2. High levels of secured rents as solid source for additional revenue growth in 2023 PROJECT PIPELINE - DELIVER
Slide 35: Strong track record on value creation through capital recycling
APPENDICES Colonial has a strong track record on value creation through capital recycling Colonial continues with its successful flight to quality strategy through active portfolio asset allocation ONGOING FLIGHT TO QUALITY THROUGH ACTIVE CAPITAL ALLOCATION 2015 Alpha I Alpha II Alpha III Alpha IV 2
Slide 36: A solid capital structure
APPENDICES A solid capital structure Extension of Debt Maturities A Solid Financial Structure Maturity profile of debt facilities - €m 31/12/2022 30/09/2023 75%1 of debt aaaa aaaa maturing >2026 Net Debt €5,355m €5,115m LTV 38.7% 39.1% Drawn Facilities €100m €0m Unutilized Facilities €2,240m €2,600m
Slide 37: Office Rental Markets | Paris & Madrid
APPENDICES Office Rental Markets | Paris & Madrid Office markets have a scarce supply of Grade A product in CBD that is favouring Prime rental growth PARIS MADRID Prime Prime 1050 Rent 25.0% Rent €/sqm/y €/sqm/m 1,000 1,000 38 1000 38.0 37 20.0% 36 +23% 36 36 20.5% 17-YTD23 950 36.0 930 930 +18% 17-
Slide 38: Vacancy at very healthy levels in every segment
APPENDICES Vacancy at very healthy levels in every segment EPRA1 VACANCY PARIS 0.2% 0.4% 0.0% 0.0% 4% 3% 2.8% 2.6% Total 12/22 3/23 06/23 09/23 Vacancy2 MADRID TOTAL 4.4% 4.5% 2.7% 3.3% 3.1% 3.1% 2.8% 2.8% 2% 12/22 3/23 06/23 09/23 12/22 3/23 06/23 09/23 BARCELONA 20.0% 16.4% 14.9% 14.2% Sant Cugat
Slide 39: ESG Leadership with clear priorities
APPENDICES ESG Leadership with clear priorities Colonial has a strong ESG commitment creating low carbon destinations for our clients A clear ambition… …with solid delivery … creating low carbon destinations Operational decarbonization pathway CDP A-Rating 2nd year in a row Ambition for lowest embod
Slide 40: Direct Investment Market – Paris
APPENDICES Direct Investment Market Asset Area Price GLA Cap. Value 19 François 1er CBD €150m 2,600 sqm €57,692/sqm (1Q 2023) 62 Champs Elysées CBD €100m 2,300 sqm €43,478/sqm (1Q 2023) 35 Montaigne CBD €200m 5,100 sqm €39,216/sqm (1Q 2023) PARIS 11 Hoche CBD €115m 3,300 sqm €34,849/sqm (1Q 2023) 10
Slide 41: Direct Investment Market – Madrid
APPENDICES Direct Investment Market Asset Area Price GLA Cap. Value Almagro 9, José Abascal 56 & €315m CBD 33,731 sqm €9,338/sqm Miguel Ángel 11 (1Q 2023) Maria de Molina 39 CBD €30.4m €7,500/sqm 4,000 sqm (4Q 2023) MADRID Fray Luis de León 13 City Center €32m €7,442/sqm 4,300 sqm (4Q 2022) Francisc
Slide 42: Direct Investment Market – Barcelona
APPENDICES Direct Investment Market Asset Area Price GLA Cap. Value Portal de l’Àngel 40* City Center €105m 4,400 sqm €23,863/sqm (4Q 2022) * Includes Office & Retail Units Diagonal 662** CBD €240m 27,300 sqm €8,791/sqm BARCELONA Transaction not yet completed ** Sale price as of publishing date (1Q
Slide 43: www.inmocolonial.com
www.inmocolonial.com © Colonial
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