49 slides from Vbare Iberian Properties Socimi's investor presentation, Jun 25, 2019
Slide 1: Relevant Fact: Presentation for Share Capital Increase
THIS RELEVANT FACT IS A TRANSLATION OF THE SPANISH VERSION. IN CASE OF ANY DISCREPANCIES, THE SPANISH VERSION SHALL PREVAIL. Madrid, 25 June 2019 Pursuant to the terms set forth in Article 17 of EU Regulation No. 596/2014 with regard to abuse of markets and Article 228 of the Consolidated Text of th
Slide 2: Corporate Presentation and Share Capital Increase Information
CORPORATE PRESENTATION AND SHARE CAPITAL INCREASE INFORMATION June 2019
Slide 3: Disclaimer
DISCLAIMER This document has been prepared by VBARE Iberian Properties SOCIMI, S.A. (the “Company”) and its subsidiaries (the “Group”). This Presentation does not constitute or form part of, and should not be construed as, any offer to sell or issue or invitation to purchase or subscribe for, or any
Slide 4: Index
INDEX 1. EXECUTIVE SUMMARY 2. COMPANY OVERVIEW 3. STRATEGY 4. PORTFOLIO OVERVIEW 5. SHARE CAPITAL INCREASE 6. PIPELINE 7. ANNEX -MARKET INFORMATION -BOD AND MANAGEMENT TEAM CVS -Q12019 FINANCIAL INFORMATION -SHARE CAPITAL INCREASE OPERATIVE DETAILS -TERMS AND CONDITIONS 3
Slide 5: 1. Executive Summary
1. EXECUTIVE SUMMARY 4
Slide 6: Executive Summary
EXECUTIVE SUMMARY • Attractive opportunity to invest in the Spanish Residential Market RESIDENTIAL MARKET • Continued rent growth driven by strong demand-supply imbalances, especially in Madrid • Increased interest from institutional investors to invest in this asset class • Well-renowned sponsors w
Slide 7: Executive Summary
EXECUTIVE SUMMARY • Well-located €57.4mn portfolio generating a strong net yield (6.32%) with high rent growth potential (+€1.2mn) and significant reversionary yield (7.51%) SOLID • Major portfolio revaluation (+49% vs. Total Capital Invested) PORTFOLIO AND STRONG • +€24mn stabilized assets ready to
Slide 8: 2. Company Overview
2. COMPANY OVERVIEW 7
Slide 9: Renowned Sponsors with Strong Experience in the Real Estate Sector
RENOWED SPONSORS WITH STRONG EXPERIENCE IN THE REAL ESTATE SECTOR VALUE BASE AURA REE • Leading Investment Bank In Israel • Spanish leading advisor on NPL & REO portfolio valuations • Established in 2013 by Victor Shamrich and Ido Neuberger, previously Co-CEOs Of Meitav Dash, second • +€75 billion a
Slide 10: Vertically Integrated Team
VERTICALLY INTEGRATED TEAM • Management team with more than 11 professionals exclusively dedicated to the Socimi • Multidisciplinary team with more than 100 years of experience • In-house capability to cover the whole investment process (acquisition, refurbishment, repositioning, letting, selling) e
Slide 11: Board of Directors and Management Team
BOARD OF DIRECTORS FERNANDO ACUÑA JUAN MANUEL SOLDADO JUAN JOSÉ NIETO YAIR EPHRATY IDO NOUBERGER YESHAYAHU MANNE FOUNDER & CEO OF AURA REE CEO AT AURA ASSET MANAGEMENT CEO AT NK5 & PALMERA CAPITAL HEAD OF INVESTMENT, VALUE BASE CEO & CO-FOUNDER, VALUE BASE DIRECTOR OF ZAFIRO TECHNOLOGIES Former Deut
Slide 12: Strong Alignment of Interest
STRONG ALIGNEMENT OF INTEREST • Management Company shareholder´s own approximately 17% of the share capital of the Company • Success fee to be paid to the Management Company entirely linked to the share price evolution: • Annual hurdle rate of 6% with catch-up over a minimum of €15.7 per share • Hig
Slide 13: First Level Partners to Create Value and Transparency to Our Investors
FIRST LEVEL PARTNERS TO CREATE VALUE AND TRANSPARENCY TO OUR INVESTORS AUDITORS INDEPENDENT PORTFOLIO QUARTERLY AUDITED FINANCIAL APPRAISER STATEMENTS QUARTERLY RICS APPRAISALS SECRETARY OF THE REGISTERED ADVISOR BOARD OF AND LIQUIDITY DIRECTORS PROVIDER LEGAL & TAX ADVISORS CORPORATE SOCIALRESPONSA
Slide 14: 3. Strategy
3. STRATEGY 13
Slide 15: VBARE's Investment Strategy
VBARE’S INVESTMENT STRATEGY CLEAR STRATEGY TO CREATE LONG TERM VALUE NO METROPOLITAN VALUE ADD DEVELOPMENT AREAS IN TOP RISK CITIES IN SPAIN TARGET MINIMUM 4% ACQUISITION NET YIELD PRICE: 10% BELOW MARKET VALUE 14
Slide 16: Investment Strategy Focused on a Very Selective Approach
INVESTMENT STRATEGY FOCUSED ON A VERY SELECTIVE APPROACH INVESTMENT ACTIVITY SINCE INCEPTION 2018-2019 OPPORTUNITIES OFFERED OPPORTUNITIES OFFERED 771 / €3.7bn 324 / €2.1bn ADVANCED ANALYSIS ADVANCED ANALYSIS 256 / €794mn 25 / €165mn DUE DILIGENCE DUE DILIGENCE 29 / €82mn 5 / €19.4mn CLOSED DEALS CL
Slide 17: Margaritas 15 – Case Study (I)
MARGARITAS 15 – CASE STUDY (I) Construction Year: 1930 Acquisition Date: 22/12/2016 Location: Madrid Typology: Entire Building District: Tetuán Horizontal Division: No Total Units: 16 Total SQM: 615 sqm Residential Units: 16 Residential sqm: 615 sqm Acquisition Price: €1,079,108 RICS Valuation Q1-19
Slide 18: Margaritas 15 – Case Study (II)
MARGARITAS 15 – CASE STUDY (II) AT ACQUISITION AFTER REFURBISHMENT 17
Slide 19: Vallehermoso 94 – Case Study
VALLEHERMOSO 94 – CASE STUDY Construction Year: 1940 Acquisition Date: 08/01/2019 Location: Madrid Typology: Entire Building District: Chamberí Horizontal Division: No Total Units: 29 Total SQM: 1,517 sqm Residential Units: 27 Residential sqm: 1,308 sqm Commercial Units: 2 Commercial sqm: 209 sqm To
Slide 20: 4. Portfolio Overview
4. PORTFOLIO OVERVIEW 19
Slide 21: Portfolio Overview
PORTFOLIO OVERVIEW 17,717 sqm (GLA) 92% average yearly €1.76mn 301 units current occupancy rate 56 sqm per unit passing rent 9.39% €595 average lease €10.6 average lease €2.95mn EPRA like for like rent rent per sqm per potential rent rental growth in 2018 per rented unit unit €38.4mn €2,051 invested
Slide 22: Portfolio Overview
PORTFOLIO OVERVIEW MAJORITY OF THE PORTFOLIO LOCATED IN ASSETS WITH >50% OWNERSHIP, IN MADRID CITY CENTER AND WITH THE APPROPRIATE SIZE TO LEASE TYPE OF OWNERSHIP PORTFOLIO LOCATION 68.77% 17% Entire Building Scattered asset 8% Units in the same building 6% (>50%) 22.35% Units in the same building 6
Slide 23: Portfolio Location
PORTFOLIO LOCATION 91% OF THE PORTFOLIO LOCATED IN THE CITY OF MADRID AND 69% INSIDE MADRID M30 Entire buildings or units in the same building Scattered assets 22
Slide 24: Some of Our Assets
SOME OF OUR ASSETS JUAN PASCUAL BARILOCHE SANTA JULIA VICENTE CARBALLAL CARNICER ANTONIA RUIZ SORO 23
Slide 25: Portfolio Rental Growth
PORTFOLIO RENTAL GROWTH IMPRESSIVE RELETTING SPREAD AND STRONG RENTAL GROWTH WITH SIGNIFICANT UPSIDE POTENTIAL QUARTERLY RELETTING SPREAD AND LEASES SIGNED 25% 35 21.37% 29 30 20% 16.73% 16.10% 25 22 22 15% 20 20 11 15 10% 7.03% 10 5% 3.17% 5 0% 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 BELOW MARKET UNITS UND
Slide 26: Portfolio Yield Growth
PORTFOLIO YIELD GROWTH SOLID YIELD GENERATED BY STABILIZED ASSETS WITH EXCELLENT GROWTH PERSPECTIVES Information as of March 31, 2019. Yield calculation based on annualized rents at the end of each period Reversionary Yield is based on estimated ERV as of March 31st, 2019 25 Stabilized Assets are th
Slide 27: Portfolio Financing
PORTFOLIO FINANCING MODERATE FINANCIAL LEVERAGE WITH LOW RISK INTEREST RATE FLUCTUATIONS LOAN TO VALUE LOAN TO COST 52.5% 35.1% 51.4% 33.5% 35.9% 22.5% • Average interest rate 1.75% • Average maturity 16.8 years 2017 2018 Q1 2019 2017 2018 Q1 2019 • Financing partners: - Banco Sabadell LOAN PRINCIPA
Slide 28: 5. Share Capital Increase
5. SHARE CAPITAL INCREASE 27
Slide 29: Share Capital Increase
SHARE CAPITAL INCREASE • €30mn share capital increase subject to a minimum €12.5mn subscription • Between €14mn-€16mn “hard circled” by current and new investors • 19.4% share price discount vs EPRA NAV • Commitment to investors to adapt the management agreement to foster alignment of interest throu
Slide 30: 6. Pipeline
6. PIPELINE 29
Slide 31: Pipeline
PIPELINE STRONG PIPELINE WITH MORE THAN €80M UNDER NEGOTIATION & UNDER ANALISYS Gross Yield Levered Deal City Location Status Sqm built Asking price Estimated capex Current Potential IRR Multiple 1 Madrid Inside M-30 Exclusivity agreement 1.300-1.600 €6.3mn-€6.9mn €1.0mn 0.66% 5.00% 12.00% 1,70x 2 M
Slide 32: 7. Annex
7. ANNEX 31
Slide 33: Market Information
MARKET INFORMATION 32
Slide 34: Economic Outlook
ECONOMIC OUTLOOK DESPITE ECONOMIC, TRADE TENSION AND POLITICAL INSTABILITY SPANISH GDP CONTINUES UNEMPLOYMENT IN SPAIN CONTINUES GROWING ALTHOUGH AT MODERATE BUT DECREASING RESULTING IN SALARY INCREASE SIGNIFICANT LEVELS GDP GROWTH UNEMPLOYMENT RATE AND SALARY INCREASE 4.00% 20.00% 2.50% 16.00% 2.00
Slide 35: Sociodemographic Trends
SOCIODEMOGRAPHIC TRENDS ROBUST DEMOGRAPHIC GROWTH, ESPECIALLY IN THE MADRID REGION ‘’Madrid has become 6.7 POPULATION GROWTH 47.2 a very attractive 6.7 6.6 47.0 place to live in, 6.6 46.8 specially for young people, who decide 6.5 6.5 46.6 to rent because the 6.4 46.4 6.4 6.3 6.3 46.2 majority do no
Slide 36: Residential for Sale
RESIDENTIAL FOR SALE ROOM FOR GROWTH FOR THE PRICES COMPARED TO NUMBER OF TRANSACTIONS IN SPAIN GROWING PEAK LEVELS EACH YEAR SINCE 2012, ALTHOUGHT STILL REPRESENTS ONLY 61% OF PEAK TRANSACTION PRICE EVOLUTION (€/sqm) TRANSACTIONS EVOLUTION (in thousands) 300.000 € 4,000 € 3,500 240 15% POTENTIAL 39
Slide 37: Residential for Sale
RESIDENTIAL FOR SALE STARTING FROM THE CRISIS AND STILL VERY REDUCED GOING FORWARD VERY LIMITED NEW SUPPLY BUILT STOCK BY YEAR (in thousands) NEW CONSTRUCTION PERMITS FOR RESIDENTIAL USE 700 (in thousands) 1,000 600 900 88% FOR PEAK LEVELS 800 500 700 GROWTH 3x TIMES 400 600 MORE 3% STOCK BUILT 500
Slide 38: Residential for Rent
RESIDENTIAL FOR RENT STRONG RENTAL MARKET GROWTH IN SPAIN AND SPANISH RENTAL MARKET IS BELOW EU LEVELS MADRID AND THE TREND IS TO BE EACH YEAR CLOSER RENT PRICE EVOLUTION (€/sqm/month) POPULATION BY TENANCY 80.1% 80.7% 14.8 € 76.7% 13.6 € 15.4 € 73.0% 12.2 € 11.6 € 9.6 € 8.5 € 7.6 € 9.5 € 7.1 € 27.0
Slide 39: BOD and Management Team CV
BOD AND MANAGEMENT TEAM CV 38
Slide 40: Board of Directors
BOARD OF DIRECTORS Fernando Acuña – Board of Directors and Management team ✓Founder & CEO of Aura Ree ✓CEO of Mortgage & Consumer Finance Bank - Deutsche Bank Credit (former) ✓McKinsey & Company, engagement manager, Madrid and New York (former) ✓Over 10 years of experience in the Spanish real estate
Slide 41: Board of Directors
BOARD OF DIRECTORS Yair Ephrati – Board of Directors and Management team ✓Head of investment Banking of Value Base M&A and director in various private and public companies, with over 20 years of investment banking and corporate finance experience ✓CEO of Meitav-DS Mergers & Acquisitions, a leading f
Slide 42: Management Team
MANAGEMENT TEAM Fabrizio Agrimi – General Manager ✓Managing Director and Partner in Altan Capital (real estate arm of the Altamar Group, leading alternative asset manager in Spain) ✓Investment Team at Aguirre Newman (2004-2006) ✓Worked in Milan and London in the law firm Vita Samory, Fabrini e Assoc
Slide 43: Q1 Financial Information
Q1 FINANCIAL INFORMATION 42
Slide 44: Q1 2019 Financial Performance
Q1 2019 FINANCIAL PERFORMANCE OUTSTANDING GAV AND NAV EVOLUTION • +15% GAV increase vs. December 2018 • +1% revaluation of 2018 portfolio • €5.5mn invested in Q1 2019 acquisitions • +24% revaluation of assets acquired in Q1 2019 • 2% nav increase vs. December 2018 GAV DECEMBER ASSETS ACQUIRED IN CAP
Slide 45: Share Capital Increase Information
SHARE CAPITAL INCREASE INFORMATION 44
Slide 46: Share Capital Increase Details and Stock Information
SHARE CAPITAL INCREASE DETAILS AND STOCK INFORMATION • SHARE CAPITAL INCREASE AMOUNT: €29,993,742.60 • SHARE PRICE: €13.4 (19.5% Discount vs. EPRA NAV) • SUSCRIPTION RIGHT PERIOD: June 24 – July 24 • SUSCRIPTION RIGHT LISTING PERIOD: July 11 – July 24 • DISCRETIONARY PERIOD: July 31 – August 1 • DIS
Slide 47: Terms and Conditions
TERMS AND CONDITIONS 46
Slide 48: Terms and Conditions
TERMS AND CONDITIONS* • MANAGEMENT COMPANY: VBA Asset Management 3000, S.L. • MANAGEMENT COMPANY SHAREHOLDERS: Value Base Ltd & Aura Asset Management • TERMINATION DATE: 31 December 2024 unless the Company starts before such date its liquidation. In this case this agreement will be extended two addi
Slide 49: Company Information and Contact
COMPANY INFORMATION AND CONTACT VBARE Iberian Properties SOCIMI, S.A. C/ Almagro, 3 – 5º Izq. 28010 Madrid (Spain) Website: www.vbarealestate.com FABRIZIO ALBERTO GARCÍA AGRIMI DE NOVALES GENERAL MANAGER FINANCE DIRECTOR +34 91 277 75 78 +34 91 277 75 78 +34 607 734 783 +34 607 817 553 fabrizio.agri