Helios Re Socimi, S.a. · BME:SCHLR
Helios Re Socimi — Lar España Real Estate SOCIMI — Investor Day (December 2017)
101 slides from Helios Re Socimi's investor day presentation, Dec 1, 2017
Slide 1: 2017 Analyst Day
2017 ANALYST DAY Madrid December 1, 2017
Slide 2: Presenting Team
2017 ANALYST DAY THE INVESTMENT CASE 2 Presenting Team José Luis del Valle Miguel Pereda Jose Manuel Llovet Chairman Lar España Board Member Lar España Commercial RE Managing CEO Grupo Lar Director Grupo Lar Sergio Garcia Nicolás Alcibar Sergio Criado Hernán San Pedro Asset Management Lagasca 99 Pro
Slide 3: Today's Agenda
2017 ANALYST DAY THE INVESTMENT CASE 3 Today’s Agenda 01 THE INVESTMENT CASE José Luis del Valle Chairman Lar España Special Guest 1: Ramiro J. Rodriguez PhD Associate Director Cushman & Wakefield 02 MARKET UPDATE Spain Research and Insight Special Guest 2: Yola Camacho Partner Cushman & Wakefield R
Slide 4: The Investment Case
The Investment Case Analyst Day www.larespana.com Jose Luis del Valle Chairman Lar España December 2017
Slide 5: Lar España, meant to be the Retail Reference Player in Spain
2017 ANALYST DAY THE INVESTMENT CASE 5 Lar España, meant to be the Retail Reference Player in Spain “To build a market “Focused on “Capital “Adequate leading Spanish prime/good appreciation leverage” REIT” secondary combined with commercial assets material cash flows and marginally on and dividend r
Slide 6: A Strategy Aligned at Every Level
2017 ANALYST DAY THE INVESTMENT CASE 6 A Strategy Aligned at Every Level MANAGEMENT Special focus on under managed assets Real Estate Manager with objective of COMPANY COMPANY MANAGEMENT implementing an Active Management Strategy in order to deliver “Alpha” First IPO of a Spanish REIT listed on the
Slide 7: A Portfolio Built "Brick by Brick"
2017 ANALYST DAY THE INVESTMENT CASE 7 A Portfolio Built “Brick by Brick” Alovera II As Termas Portal de la Alovera III Marina Egeo Alovera IV Nuevo Alisal Almussafes Megapark Albacenter P. Marina Palmas Altas Leisure Area Hypermarket Hypermarket Development P. Marina Arturo Soria Arturo Soria Eloy
Slide 8: Growth of the Portfolio aimed at Consistent P&L Growth
2017 ANALYST DAY THE INVESTMENT CASE 8 Growth of the Portfolio aimed at Consistent P&L Growth Revenues: €0.9 Mn Revenues: €57.2 Mn EBITDA: €-1.1 Mn EBITDA: €34.3 Mn Net Profit: - €Mn Net Profit: €72.2 Mn EPRA Earnings: - €Mn Adj. EPRA Earnings: €26.4 Mn IPO March 2014 H1 FY H1 FY H1 FY H1 9M 2014 20
Slide 9: Major Corporate Milestones since IPO
2017 ANALYST DAY THE INVESTMENT CASE 9 Major Corporate Milestones since IPO Construction works started in Vidanova Parc EPRA Initiation of Gold Award construction works in LRE Digital Project Financial Reporting Lagasca 99 presentation EPRA EPRA 2016 Silver Award €140 Mn Sustainability Reporting Gol
Slide 10: A Unique Footprint in the Spanish Geography
2017 ANALYST DAY THE INVESTMENT CASE 10 A Unique Footprint in the Spanish Geography GAV (€Bn) Geographies cautiously selected Logistics Residential 5% Dominant SCs in their catchment area 6% Regions with above-average GDP per capita Offices 11% Low commercial density, or in highly touristic ones Imp
Slide 11: Creating Value through ESG
2017 ANALYST DAY THE INVESTMENT CASE 11 Creating Value through ESG Assets Corporate Governance Properties that have a positive effect Business model that aims to have a positive on their urban surroundings and effect on the environment and society, as generate a high return for our well as generate
Slide 12: Recognitions
2017 ANALYST DAY THE INVESTMENT CASE 12 Recognitions 2017 EPRA BPR & sBPR Awards Since June 2015: Member of FTSE EPRA/Nareit Global Estate Index First SOCIMI to be awarded with the "EPRA Recognition of the CSR GOLD AWARD” in Financial Reporting for the work and progress made third consecutive year t
Slide 13: Value is our DNA
2017 ANALYST DAY THE INVESTMENT CASE 13 Our Values and Strengths Value is our DNA Experienced Improved Tailor made Sustainable Continuous Manager Corporate balanced investment innovation Governance portfolio Strategy & and Policy Dividends Digitalization 1 RIGHT TIMING Cycle 2 RIGHT RESOURCES Operat
Slide 14: Retail Trends in Spain
Retail Trends in Spain Analyst Day www.larespana.com José Manuel Llovet Commercial RE Managing December 2017 Director Grupo Lar
Slide 15: Sound Investment Market of Commercial Assets
2017 ANALYST DAY RETAIL TRENDS 15 Sound Investment Market of Commercial Assets Commercial real estate1 investment volume in 9M 2017 c.€5,842 Mn [+28% vs 9M 2016] Other Retail Assets Retail Sector 20% €1,877 Mn Shopping Centres 60% 54% €709 Mn €3,488 Mn Retail Units 26% €902 Mn Investment Volume by s
Slide 16: Solid growth of the Spanish Economy
2017 ANALYST DAY RETAIL TRENDS 16 Solid growth of the Spanish Economy Macro recovery in Spain is one of Lar España external value-creation pillars… Flourishing tourism sector: over 66 Mn of tourists, 9M 2017 Following the trend of 2016, when it registered its fourth record year with over 70 million
Slide 17: Yields Compression as a Market Driver
2017 ANALYST DAY RETAIL TRENDS 17 Yields Compression as a Market Driver Spanish headline yields 1 Ultra-low interest rates have 10% Corporate Debt reduced headline yields in Spain 8% Spain and Europe in general, and shifted 6% 10Y Spanish Bond Yields investors’ appetite towards 4% high-yielding asse
Slide 18: Sales and Consumption Supporting Further Upside
2017 ANALYST DAY RETAIL TRENDS 18 Sales and Consumption Supporting Further Upside There is still room for further recovery of sales and consensus is optimistic… Retail Sales Index % YoY Growth 1 15 10 2003 5 2017 0 -5 -10 . 2011M03 2011M09 2012M03 2012M09 2013M03 2013M09 2014M03 2014M09 2015M03 2015
Slide 19: Supply Dynamics Support Shopping Centre's Stock
2017 ANALYST DAY RETAIL TRENDS 19 Supply Dynamics Support Shopping Centre’s Stock 56,000 sqm of new GLA is expected to be opened by the end of 2017, with the opening of 3 new shopping centres Shopping centre stock GLA (sqm) Density (sqm per 1,000 inhab.) 559 13.6 Mn 376 Evolution of Shopping Centre
Slide 20: Where is Lar España among its Competitors?
2017 ANALYST DAY RETAIL TRENDS 20 Where is Lar España among its Competitors? Main market players by owned GLA, LAR España has a clear objective to consolidate among the top including GLA under development 1 3 retail operators in Spain: target to selectively increasing GLA to generate revenue synergi
Slide 21: Lar España Main Investment Criteria
2017 ANALYST DAY RETAIL TRENDS 21 Lar España Main Investment Criteria Lar España has built a high quality Core+ portfolio, acquiring asset by asset Investment Criteria are 4: Dominant in its area, Size, Footfall and Quality Tenants and all with Value Creation potential VALUE- CREATION +250,000 +5 Mn
Slide 22: Lar España Retail Dominant Portfolio (A)
2017 ANALYST DAY RETAIL TRENDS 22 Lar España Retail Dominant Portfolio (A) Megapark Gran Vía P. Marina El Rosal Anecblau As Termas P. Abadía Bilbao Vigo Alicante Coast Ponferrada Great BCN Lugo Toledo Area (sqm) 83,380/127,772 41,435 40,158 51,022 28,608 35,127/43,718 37,114/54,012 NMV1 (€ Mn) 192.0
Slide 23: Lar España Retail Dominant Portfolio (B)
2017 ANALYST DAY RETAIL TRENDS 23 Lar España Retail Dominant Portfolio (B) Vistahermosa Albacenter Palmas Altas6 Vidanova Parc6 Other Retail Alicante Albacete Sevilla Sagunto Assets7 Overall Portfolio w/o develop. Incl. develop. 440,233 / 584,485 / Area (sqm) 35,550 27,890 100,00012 44,252 61,948 Av
Slide 24: 9M 2017 Key Retail Operating Trends
2017 ANALYST DAY RETAIL TRENDS 24 9M 2017 Key Retail Operating Trends Outperforming the market Lar España vs Spain Index Sales & Footfall Sales YoY Growth +3% +2.7% vs 9M 2016 €451.5 Mn +3.3%2 +2.1% Visits Occupancy3 +1.9% +1.8% +2% +2p.p. vs 9M 2016 vs 9M 2016 Average Lar España Spain Retail Lar Es
Slide 25: Lar España Outstanding Results since Acquisition
2017 ANALYST DAY RETAIL TRENDS 25 Lar España Outstanding Results since Acquisition Key Performance Actual Indicators accumulated till Sep. 2017 vs Acquisition Operations Rent Uplift NOI signed excl. new lettings Growth 356 + 5% + 8% GLA Leased 1 Discounts Mall Income +3.0 (sqm) Reduction Growth % 70
Slide 26: There's Still High Potential to Create Value
2017 ANALYST DAY RETAIL TRENDS 26 There’s Still High Potential to Create Value NIY vs Topped Up NIY vs Potential NIY vs Reversionary NIY1 Yield Compression Path 2 8.09% Potential Yield spread Compression -21 bps 7.36% 7.35% -13 bps -13 bps 6.81% -23 bps 6.85% 7.20% 6.56% 6.62% -26 bps -28 bps 6.38%
Slide 27: Two Burning Issues
2017 ANALYST DAY THE INVESTMENT CASE 27 Two Burning Issues 1 USA. The Department Store Case. Impact in SC Aging of shopping centres Shopping Centre Stock/Capita 2017 (% of new GLA / total GLA) 0 500 1000 1500 50% 45% USA: 54% before 1988 Spain: 65% after 1998 USA 40% 26% Norway 30% 23% 22% 19% 18% 2
Slide 28: Two Burning Issues
2017 ANALYST DAY THE INVESTMENT CASE 28 Two Burning Issues 1 USA. The Department Store Case. Impact in SC Department stores on total GLA Tenant Mix (% of GLA) 0% 10% 20% 30% 40% 50% 46% USA UK Spain USA 46% 25% 24% UK 27% % of Total Centre GLA Australia 23% 12% 10% 9% 8% 8% 6% Asia 17% Middle East 1
Slide 29: Two Burning Issues: Democratisation of technology
2017 ANALYST DAY RETAIL TRENDS 29 Two Burning Issues 2 Democratisation of technology. Online + Offline sales Sectors with the highest revenue: Travel agencies: 14.2% (€3.4 Bn) Total e-commerce turnover in Spain was € 24 Bn Air Transport: 11.7% (€2.8 Bn) in 2016, YoY growth of 20.8% Clothing: 6.0% (€
Slide 30: Change and Adaptability
2017 ANALYST DAY RETAIL TRENDS 30 Change and Adaptability Market trends forecasted that individuals will shop increasingly by a combination of online and offline, versus a significant reduction of only online or only offline shopping Customers Retailers Lar España New buying channel Better Custo
Slide 31: Lar España Digital
2017 ANALYST DAY RETAIL TRENDS 31 Lar España Digital Online platform Leads Lar España’s Shopping Centres Digital Transformation Omni-channel platform Includes products of physical stores where customers can buy through its smartphone, tablet, laptop or PC New and extra channel for our customers Sati
Slide 32: Portfolio Overview
Portfolio Overview Analyst Day www.larespana.com Sergio García Asset Management Director December 2017 Grupo Lar
Slide 33: Retail KPIs since Acquisition
2017 ANALYST DAY PORTFOLIO OVERVIEW 33 Retail KPIs · Since Acquisition1 from Q3 2017 2015 2016 2017 Nº of SC2 7 9 11 GLA owned 307,185 388,768 440,233 Sqm Vacancy Evol. 7.5% 5.2% 5.0% Footfall Evol. Comparable Data +3.9% +1.3% +1.9% Versus previous year Sales Evol. Comparable Data +4.2% +2.7% +2.7%
Slide 34: Txingudi
2017 ANALYST DAY PORTFOLIO OVERVIEW 34 Txingudi Non-Core Assets Footfall Evol. 1 Sales Evol. 2 Occupancy NMV Evol. NOI (€ Mn) 2 Since May 2017 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 10,712 6.0% 22.6% 98.5% 39.1% 1.7 1Average footfall increase since H&M and Kiabi opennings 2Total Dat
Slide 35: Txingudi
2017 ANALYST DAY PORTFOLIO OVERVIEW 35 Txingudi Amazing Refurbishment Developed
Slide 36: Megapark
2017 ANALYST DAY PORTFOLIO OVERVIEW 36 Megapark1 Core Assets Footfall Evol.1 Sales Evol.2 Occupancy NMV Evol. NOI (€ Mn) 2 Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 83,380 1.4% 1.3% 92.7% 12.9% 7.6 1 FOC 2 Total Data Refurbishment project Already launched Acquired in
Slide 37: Megapark
2017 ANALYST DAY PORTFOLIO OVERVIEW 37 Megapark Image renewal & Improvement of FOC Commercialization
Slide 38: Anecblau
2017 ANALYST DAY PORTFOLIO OVERVIEW 38 Anecblau Core Assets Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 28,603 6.4% 2.1% 89.2% 18.6% 4.0 1Total data Dining Area project Mediterranean lifestyle Acquired in 2014
Slide 39: Anecblau
2017 ANALYST DAY PORTFOLIO OVERVIEW 39 Anecblau Transformation & positioning of FB area (Food & Beverage)
Slide 40: Albacenter
2017 ANALYST DAY PORTFOLIO OVERVIEW 40 Albacenter Core Assets Total Complex Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 27,890 -1.36% 7.0% 88.3% 30.4% 2.3 1Total data Full renewal project Already launched Acqui
Slide 41: Albacenter
2017 ANALYST DAY PORTFOLIO OVERVIEW 41 Albacenter Value generation through impressive refurbishment
Slide 42: Portal de la Marina
2017 ANALYST DAY PORTFOLIO OVERVIEW 42 Portal de la Marina Core Assets Retail Complex Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 40,158 11.7% 5.5% 96.0% 28.2% 5.2 1Total data New main entrance and a complete r
Slide 43: Portal de la Marina
2017 ANALYST DAY PORTFOLIO OVERVIEW 43 Portal de la Marina Transformation & positioning of FB area (Food & Beverage)
Slide 44: As Termas
2017 ANALYST DAY PORTFOLIO OVERVIEW 44 As Termas Core Assets SC Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 35,127 2.0% 5.1% 94.0% 17.4% 3.8 1Total data New Dining Area & Image Renewal Acquired in 2014 Capex €1
Slide 45: As Termas
2017 ANALYST DAY PORTFOLIO OVERVIEW 45 As Termas Improve FB area (Food & Beverage) and attract local restaurants
Slide 46: Gran Vía
2017 ANALYST DAY PORTFOLIO OVERVIEW 46 Gran Vía Core Assets Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q3 2017 vs Q3 2016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 41,435 -1.7% 2.1% 95.7% 8.5% 6.4 1Total data Acquired in 2016 Full renewal project Concept on development
Slide 47: Gran Vía
2017 ANALYST DAY PORTFOLIO OVERVIEW 47 Gran Vía
Slide 48: El Rosal
2017 ANALYST DAY PORTFOLIO OVERVIEW 48 El Rosal Core Assets Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (€ Mn) Q32017 vs Q32016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Owned 51,022 -1.0% 1.5% 90.2% 14.7% 4.4 1Total data Acquired in 2015 Completely Image Renewal Capex €2 Mn Planning
Slide 49: Retail Parks
2017 ANALYST DAY PORTFOLIO OVERVIEW 49 Retail Parks Footfall Evol. Sales Evol. Occupancy NMV Evol. NOI (€ Mn) Vistahermosa Q32017 vs Q32016 Q3 2017 vs Q3 2016 Q3 2017 H12017 vs Acq. Q3 2017 Acquired in 2016 Owned 33,550 12.6% 6.5% 90.5% 11.8% 1.9 Footfall Evol. Sales Evol.1 Occupancy NMV Evol. NOI (
Slide 50: Palmas Altas
2017 ANALYST DAY PORTFOLIO OVERVIEW 50 Palmas Altas AREA1 Opening Building Permit Pre Letting All-in Costs 2 Expected Date Granted Date % of GLA € Mn Owned 100,000 Q2 2019 07/2017 +56% 191.1 1Retail and family leisure place Plot acquired in 2016 Tenants already signed Project Key Points One of the m
Slide 51: Palmas Altas
2017 ANALYST DAY PORTFOLIO OVERVIEW 51 Palmas Altas
Slide 52: Vidanova Parc
2017 ANALYST DAY PORTFOLIO OVERVIEW 52 Vidanova Parc Opening Building Permit Pre Letting All-in Costs 2 Expected Date Edification Works % of GLA € Mn Owned 44,252 H1 2018 09/2017 +88% 45.7 Plot acquired in 2015 Tenants already signed Project Key Points Excellent location Valencia – Sagunto – Castell
Slide 53: Vidanova Parc
2017 ANALYST DAY PORTFOLIO OVERVIEW 53 Vidanova Parc
Slide 54: Offices KPIs since Acquisition
2017 ANALYST DAY PORTFOLIO OVERVIEW 54 Offices KPIs · Since Acquisition1 from Q3 2017 2014 2017 Nº of Assets 3 4 Comparable Data GLA owned 33,360 41,970 Sqm NMV Evolution 27.1% Since Acquisition NOI Portfolio (€ Mn) 2.5 3Q 2017 1. First asset acquired in 2014
Slide 55: Marcelo Spínola, Eloy Gonzalo
2017 ANALYST DAY PORTFOLIO OVERVIEW 55 Marcelo Spínola Eloy Gonzalo NMV Evol. Capex NMV Evol. Capex H1 2017 vs. Acq Total Amount H1 2017 vs. Acq Total Amount 76.3% €9.6 Mn 47.3% €4.1 Mn
Slide 56: Logistics KPIs since Acquisition
2017 ANALYST DAY PORTFOLIO OVERVIEW 56 Logistics KPIs · Since Acquisition1 from Q3 2017 2014 2017 Nº of Assets 2 5 Comparable Data GLA owned 119,148 161,840 Sqm NMV Evolution 31.6% Since Acquisition NOI Portfolio (€ Mn) 3.9 3Q 2017 1. First asset acquired in 2014
Slide 57: Highlights
2017 ANALYST DAY PORTFOLIO OVERVIEW 57 Highlights PORTFOLIO FOOTFALL EVOL. SALES EVOL. NOI EVOL. REVALUATION Q3 17 vs Q3 16 Q3 17 vs Q3 16 Q3 17 vs Q3 16 Comparable Data Comparable Data Retail + Offices + Logistics +15.3% +1.9% +2.7% +3.6%
Slide 58: Lagasca Residential Development
Lagasca 99 Residential Development Analyst Day www.larespana.com Nicolás Alcibar Lagasca 99 Project Manager December 2017
Slide 59: Lagasca 99
2017 ANALYST DAY PORTFOLIO OVERVIEW 59 Lagasca 99 Q2 2018 Estimated delivery date In Process New record set Financing of GLA Sqm Location Purchase Date for a flat in 100% of 26,203 Madrid 30 January 2015 Madrid Golden construction Mile costs agreed Acquisition Price1 Market Value (June 2017)1 €50.1
Slide 60: Future Value
Future Value Analyst Day www.larespana.com Sergio Criado CFO Lar España December 2017
Slide 61: Value Momentum of the Spanish Economy
2017 ANALYST DAY FUTURE VALUE 61 Value Momentum of the Spanish Economy 1 2 3 4 5 Spanish economy has It is expected to continue Confidence of consumers Unemployment Rate Future Investment been surprising on the outperforming the keeps growing in line with supporting further supported by largest upsi
Slide 62: Strong Valuation Performance in All Asset Classes to Date
2017 ANALYST DAY FUTURE VALUE 62 Strong Valuation Performance in All Asset Classes to Date Revaluation after invested Capex Portfolio Value evolution Total Portfolio Retail € Mn Portfolio Value Valuation growth 15.3% CAGR1: 9.7% 1,508 9.2% 13.7% 8.9% 1,275 H1 LfL 2017/16 Since Acquisition H1 LfL 201
Slide 63: Present Portfolio Potential
2017 ANALYST DAY FUTURE VALUE 63 Present Portfolio Potential Potential Future Investments Existing Developments C.115 Existing Income Generating 5 107 c.8 Assets 18 84 72 3 4 3 5 17 -2 54 Annualised net New Arturo Soria Improvement Annualised net Reversionary Reversionary Marcelo Reversionary Vidano
Slide 64: Proven Asset Management Capabilities
2017 ANALYST DAY FUTURE VALUE 64 Proven Asset Management Capabilities Active Asset & Tenant Management + Smart Capex in Operating Assets …are providing results Logistics +19.5% Portfolio 2% Valuation Growth Office Retail 41% 57% 22% 55Mn +2% Occupancy Total Portfolio Rotation Rate since EPRA annuali
Slide 65: Asset Rotation = Unlocking Value
2017 ANALYST DAY FUTURE VALUE 65 Asset Rotation = Unlocking Value Office revaluation since acquisition Arturo Soria revaluation 178.6 +34.5% 32.5 sale price/ acquisition 150.5 28.9 24.2 +13.0% Premium over last appraisal Acquisition Price + Valuation at Since Acquisition Revaluation to Sale Price In
Slide 66: Development Value
2017 ANALYST DAY FUTURE VALUE 66 Development Value… 2 Retail Residential developments development c.88% 70% GLA signed & Sales committed Vidanova Parc, Valencia As of 9M 2017 LAGASCA 99 Price +56% c.11,000 €/sqm GLA signed & committed Palmas Altas, Seville Q2 2018 Estimated delivery date
Slide 67: Debt Management as a Means of Value Creation
2017 ANALYST DAY FUTURE VALUE 67 Debt Management as a Means of Value Creation Key Figures of the financing Back-loaded Amortization Profile €577.3 Mn € Mn €140 Mn Senior Secured Bond €437.3 Mn Bank Debt 447.7 37% Net Loan to Value (LTV) 140 307.7 77.9 Avg. Cost of Debt 35.6 9.7 2.19% 1.2 5.2 -41 b.p
Slide 68: €140Mn Bond Contract allows Flexibility in Mortgage-Backed Assets Perimeter
2017 ANALYST DAY FUTURE VALUE 68 €140Mn Bond Contract allows Flexibility in the Mortgage- Backed Assets Perimeter Each Secured Real Estate Asset can be substituted with a non-residential Real Estate Asset that has an aggregate value and net operating income equal or greater to the asset being substi
Slide 69: Acquisition Pipeline Aimed at Increasing Retail Platform Value
2017 ANALYST DAY FUTURE VALUE 69 Acquisition Pipeline Aimed at Increasing Retail Platform Value Current Opportunities Lar España in the Spanish Retail Market Large and visible pipeline LAR España has a clear objective to consolidate among the top 110k+ including actionable off-market 3 retail oper
Slide 70: Main Highlights
2017 ANALYST DAY FUTURE VALUE 70 Main Highlights Value Strong Active asset Unlocking Accretive Optimal momentum of valuation management value from Value from debt the Spanish performance portfolio as future asset developments manage economy in all asset potential driver of rotation ment classes valu
Slide 71: Innovation Strategy
Innovation Strategy Analyst Day www.larespana.com Miguel Pereda CEO Grupo Lar & December 2017 Board Member Lar España
Slide 72: Innovation Rationale
2017 ANALYST DAY INNOVATION STRATEGY 72 Innovation Rationale To position Lar España To create shared value to lead economic as the leader in digital transformation and social progress, and also generate in the retail sector financial returns for our shareholders To change relations with customers an
Slide 73: Innovation Strategy – TES Project
2017 ANALYST DAY INNOVATION STRATEGY 73 Innovation Strategy – TES Project Disruptive projects differentiating among our competitors DIGITALIZATION & ENGAGEMENT ESG DIFFERENTIATION TECHNOLOGY EXPERIENCE SUSTAINABILITY
Slide 74: Innovation Strategy – Technology
2017 ANALYST DAY THE INVESTMENT CASE 74 Innovation Strategy – Technology Disruptive projects differentiating among our competitors Big Data Full Conectivity Market Knowledge Market Place DIGITALIZATION & WEBS CUSTOMER APPS SEEKETING SYSTEM TRANSACTIONAL WEB DIFFERENTIATION INTELLIGENCE WIFI E-BEACON
Slide 75: Digitalization & Differentiation
2017 ANALYST DAY INNOVATION STRATEGY 75 Digitalization & Differentiation Digitalization and Differentiation of Lar España projects 1 2 Webs, Apps and Tucentro.com Social Networks New transactional web 3 4 Footfall and Market research in Sales & effort rates Data Analytics Seeketing our shopping cent
Slide 76: Engagement – Creating Experiences
2017 ANALYST DAY INNOVATION STRATEGY 76 Engagement – Creating Experiences projects aimed at engaging customers Customer Journey LAR Territory Reforms Plan Wonderful Project Indicators Getting to know SC Implementing activities to Capex plan adapted to Entrepreneurship Measurement of the customers ar
Slide 77: Environmental, Sustainability and Governance
2017 ANALYST DAY INNOVATION STRATEGY 77 Environmental, Sustainability and Governance Creating shared value Asset Management & Environmental Corporate Governance Risk Control & Management Accessibility Society-based initiatives Ensuring strong governance Ethics and Compliance Responsible Asset Manage
Slide 78: ESG - Asset Management & Environment
2017 ANALYST DAY INNOVATION STRATEGY 78 ESG - Asset Management & Environment 1 Responsible asset management focused on consumptions and emissions Promoting sustainability certification measures, CSR Master Plan to meet the encouraging the use of new technology to improve our assets’ environmental qu
Slide 79: ESG - Corporate Governance
2017 ANALYST DAY INNOVATION STRATEGY 79 ESG - Corporate Governance Risk Control & Management System Integrated enterprise risk management (ERM) system designed to mitigate the risks exposure ERM system involves all Lar España’s staff and Risk Map: the ERM system categorises risk into high, 1 supervi
Slide 80: Next Steps
Next Steps Analyst Day www.larespana.com Miguel Pereda CEO Grupo Lar & December 2017 Board Member Lar España
Slide 81: Our Next Steps
2017 ANALYST DAY NEXT STEPS 81 Our Next Steps LAR ESPAÑA- RETAIL FOCUS NON-CORE DEVELOPMENTS GRUPO LAR STRATEGY ASSETS RELATIONSHIP DIVESTMENT FRAMEWORK
Slide 82: Lar España – Manager Agreement
2017 ANALYST DAY NEXT STEPS 82 Lar España – Manager Agreement March April Aug 2016 March 2014 2017 2017 Performance 2019 fee shares subscribed at Base Fee Reduction NAV p.s – 24% IMA IMA From 1.25% on NAV fee reduction Approval Maturity 1.25% on NAV up to €600 Mn 1% on NAV over €600 Mn Flexibility f
Slide 83: Retail Focus Strategy
2017 ANALYST DAY NEXT STEPS 83 Retail Focus Strategy Investment Target Creation of unique Criteria 100% shopping experiences levered ownership IRR>12% Customer journey analysis Value-Creation Potential Optimum size for area of influence Dominant Optimal and fine-tuned Core+ tenant line-u
Slide 84: Retail Focus Strategy
2017 ANALYST DAY NEXT STEPS 84 Retail Focus Strategy Lar España mix is positioned in the most common asset size among top retail operators 100% 78% 61% 80% 75% 78% 71% 60% 51% 40% 60% 20% 18% 0% INTU Klepierre Unibail ECMPA DEQ Wereldhave Lar España <15k 15 - 30k 30 - 45k 45 - 60k 60 - 75k 75 - 90k
Slide 85: Non-Core Assets Divestment
2017 ANALYST DAY NEXT STEPS 85 Non-Core Assets Divestment Expected divestments to crystalize significant value +3Y post Premium GAV Acquisition Asset Status Asset Class Location Sale Price Since 30 June 2017 Date Acquisition Jul 2017 Arturo Soria Sold Office Madrid €28.9 Mn €32.5 Mn +34.5% Refurbish
Slide 86: Developments
2017 ANALYST DAY NEXT STEPS 86 Developments Keep investing our two retail developments… Q2 Q2 2018 2019 Estimated >9% €4 Mn c.88% Estimated >8% €14 Mn c.56% delivery date Exp NIY Exp annual rents GLA signed delivery date Exp NIY Exp annual rents GLA signed & committed1 & committed1 Retail Retail + O
Slide 87: Expected Next Steps
2017 ANALYST DAY NEXT STEPS 87 Expected Next Steps Arturo Soria Vidanova Parc Delivery Palmas Altas Delivery Divestment Acq price - €14 Mn Acq price - €36 Mn Sell Price – €33.5 Mn Dev capex – €26 Mn Dev capex – €109 Mn Capital Gain - €7.6 Mn Exp NIY - >9% Exp NIY - >8% Ext Div - €5.9 Mn, 0.064 €/ps
Slide 88: Business Plan
Business Plan Analyst Day www.larespana.com Miguel Pereda CEO Grupo Lar & December 2017 Board Member Lar España
Slide 89: Lar España Q3 2017 Highlights
2017 ANALYST DAY BUSINESS UPDATE 89 Lar España Q3 2017 Highlights GAV Annualized Net Rent €1,429 Mn €72.1 Mn +19% vs Q3 2016 +15% vs Q3 2016 Assets EPRA Topped-Up NIY 31 5.9% 3 acquisitions in 2017 LAR ESPAÑA’S PORTFOLIO GLA Occupancy Rate 882,852 sqm 94.7% +25% vs Q3 2016 Wault 2017 Investments 2.7
Slide 90: Lar España Q3 2017 Highlights
2017 ANALYST DAY BUSINESS UPDATE 90 Lar España Q3 2017 Highlights EPRA NAV Rental Income €880.2 Mn €57.2 Mn +16% vs Q3 2016 +36% vs Q3 2016 Net LTV EBIT 37% €81.2 Mn LAR ESPAÑA’S +37% vs Q3 2016 FINANCIAL Average Cost of Debt INFORMATION Net Profit 2.19% €72.2 Mn +55% vs Q3 2016 Financial Debt ROE1
Slide 91: Business Plan 2018-2021
91 Business Plan 2018-2021
Slide 92: Main BP Assumptions
2017 ANALYST DAY BUSINESS UPDATE 92 Main BP Assumptions Period 2018-2021 Divestments €380 Mn Capex Investment1 c. €49 Mn c. €247 Mn including development costs2 New Investments €220 Mn Capital Increase No capital increases considered 1. In existing investment properties and development projects 2. D
Slide 93: Main BP Assumptions
2017 ANALYST DAY BUSINESS UPDATE 93 Main BP Assumptions Office Portfolio € 170 Mn DIVESTMENTS Lagasca 99 delivery € 110 Mn Other Mature Assets € 100 Mn
Slide 94: Development and Renovation Capex
2017 ANALYST DAY BUSINESS UPDATE 94 Development and Renovation Capex Drivers of Share Price Accretion Extension/ Renovation Capex Logistics 3% Retail 16% 80% Offices 1% Expected Yield on 8.5% Development Capex Development Capex 5.8% € 247 Mn Expected Yield on 7.5% Renovation Capex Retail NIY as of
Slide 95: Main BP Assumptions
2017 ANALYST DAY BUSINESS UPDATE 95 Main BP Assumptions INVESTMENT € 220 Mn PIPELINE Short Term Pipeline Asset Class Aprox. GLA Location Asset 11 Retail 6,200 Centre Spain Asset 2 Retail 37,000 Centre Spain Asset 3 Retail 60,000 Prime Touristic Area Asset 41 Retail 11,500 North Spain ... ... … … 1.
Slide 96: KPI's 2017-2021
2017 ANALYST DAY BUSINESS UPDATE 96 KPI’s 2017-2021 Expected Expected Average End 2017 Growth per annum GAV c. €1,500 m c.7% Annualized GRI1 € 81 m c.13% Annualized NOI1 € 73 m c.14% Non recoverable/ 10% c.-8% (till 7% target) GRI expenses Occupancy1 95% c. 1% (till 97% target) Net LTV 37% c. 37%2 1
Slide 97: KPI's 2017 - 2021
2017 ANALYST DAY BUSINESS UPDATE 97 KPI’s 2017 - 2021 Expected Expected Average End 2017 Growth per annum Total Annual >13% >12% Return NAV c. € 923 m c.8%1 Dividend Yield on 5% over NAV ≥ 5% over NAV NAV 6.1% Dividend Yield considering current Market Cap2 1. Without including dividend distribution
Slide 98: Dividends
2017 ANALYST DAY BUSINESS UPDATE 98 Dividends Predictable and Competitive in the Attractive vs As a result of a Dividend policy sustainable dividend International Real Spanish equity solid cash flow objectives and distribution schedule Estate market market generation 1 Dividend Yield 5% over
Slide 99: Closing Remarks
2017 ANALYST DAY BUSINESS UPDATE 99 Closing Remarks 1 2 3 RIGHT RIGHT RIGHT TIMING RESOURCES PLATFORM Cycle Operational Size Opportunity Financial Synergies Know-How Developments Rotation potential Future RESULTS Operational Revaluation Dividends
Slide 100: Disclaimer
2017 ANALYST DAY NEXT STEPS 100 Disclaimer This document has been prepared by Lar España Real Estate SOCIMI, S.A. (the “Company”) for information purposes only and it is not a regulated information or information which has been subject to prior registration or control by the Spanish Securities Marke
Slide 101: 2017 Analyst Day
2017 Analyst Day Follow us: www.larespana.com Lar España Real Estate SOCIMI info@larespana.com Lar España App
Lar España Real Estate SOCIMI — Investor Day (December 2017) on 6ix