Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — Q1 2024 Earnings Presentation
40 slides from Grand City Properties Sa's earnings presentation, May 2024
Slide 1: Financial Results Presentation Q1 2024
Dresden FINANCIAL RESULTS PRESENTATION Q1 2024 May 2024
Slide 2: Highlights
HIGHLIGHTS GCP
Slide 3: Q1 2024 Key Results Summary
Q1 2024 KEY RESULTS SUMMARY KEY FINANCIAL RESULTS FINANCIAL PROFILE PORTFOLIO P&L Q1 2024 change Q1 2023 Mar 2024 Dec 2023 Mar 2024 Dec 2023 Net Rental Annualised net €105,301 4% €101,376 LTV 36% 37% €410m €406m Income rent Adjusted EPRA LTV 48% 48% €81,984 3% €79,504 Units 63,216 63,303 EBITDA Net
Slide 4: Successful Perpetual Notes Transaction
SUCCESSFUL PERPETUAL NOTES TRANSACTION EXCHANGE AND TENDER OFFER IN Q2 24 RESULT AND BENEFITS ❖ With the high acceptance rate and issuance of a new large note, GCP reestablished itself in the ❖ In April 2024, GCP launched an exchange offer with a Capital market. 15% tender option to the holders of t
Slide 5: Operational & Financial Results
OPERATIONAL & FINANCIAL RESULTS 5
Slide 6: Strong Operational Dynamics
STRONG OPERATIONAL DYNAMICS CONTINOUSLY DELIVERING OPERATIONAL PERFORMANCE In-place rent +3.4% +3.2% CAGR (in €/sqm) In-place rental growth L-F-L 8.7 +3.3% Total net rent growth +0.1% 8.1 8.2 8.3 8.6 continued, reaching €8.7/sqm as of March 2024 and further L-F-L Mar 2024 L-F-L upside to catch up to
Slide 7: Portfolio Overview
PORTFOLIO OVERVIEW ❖ The annualized net rental income is significantly below market rent, indicating a market upside potential of 22%. ❖ In addition to the portfolio below, GCP has investment property held for sale amounting to ~€170 million. ❖ No valuations were carried in Q1 2024. The next portfol
Slide 8: P&L Results
P&L RESULTS Selected consolidated statement of profit or loss Q1 2024 Q1 2023 NET RENTAL INCOME ADJUSTED EBITDA (in € millions) (in € millions) in € ‘000 unless otherwise indicated +4% 82 Revenue 149,052 150,052 105 +3% 80 Net rental income 105,301 101,376 101 Property revaluations and capital gains
Slide 9: FFO I + II
FFO I + II FFO I FFO I per share (in € millions) (in €) -4% in € ‘000 unless otherwise indicated Q1 2024 Q1 2023 47 -4% 45 0.27 Adjusted EBITDA 81,984 79,504 0.26 Finance expenses (14,121) (13,470) Current tax expenses (10,282) (10,111) Contribution to minorities (1,408) (1,530) Q1 2023 Q1 2024 Q1 2
Slide 10: Maintenance & Capex
MAINTENANCE & CAPEX REPOSITIONING CAPEX REPOSITIONING CAPEX & MAINTENANCE ROOF RENOVATION & MODERNISATION (in € per average sqm) Hamm (before) - Focus remains on improving asset quality, value creation and increasing rental income 6.0 6.0 - Other value-add measures include: - Upgrading apartments fo
Slide 11: EPRA NAV Metrics
EPRA NAV METRICS EPRA NAV PER SHARE METRICS (in €) EPRA NAV METRICS (in € millions) EPRA NRV PS EPRA NTA PS EPRA NDV PS EPRA NRV EPRA NTA EPRA NDV +1% +1% +0% +1% +1% +0% 26.7 27.0 4,606 4,654 23.2 23.5 4,014 4,063 3,745 3,762 21.7 21.8 Dec Mar Dec Mar Dec Mar Dec Mar Dec Mar Dec Mar 2023 2024 2023
Slide 12: Financial Profile
FINANCIAL PROFILE GCP
Slide 13: Strong Financial Profile
STRONG FINANCIAL PROFILE LIQUIDITY POSITION LOW LEVERAGE INTEREST HEDGING RATIO Wuppertal Fixed & Swapped LOW AND STABLE LTV Capped 45% Board of Directors’ Limit 12% Variable EPRA LTV NET €1.3b 37% 36% (including perpetual DEBT/ 10% Mar 2024 cash and notes as debt) EBITDA liquid assets 48% 9.6x Pote
Slide 14: Debt Maturity Schedule
DEBT MATURITY SCHEDULE CURRENT AVERAGE DEBT 1,400 COST OF DEBT MATURITY 1.9% 5.1 years 1,200 1,000 Mar 2023 Cash and liquid assets cover debt maturities until the end of 2026 800 EUR Millions 600 400 200 0 CURRENT COST OF 1.2% 1.3% 1.3% 1.6% 1.5% 3.4% 2.8% 5.1% 1.8% 2.6% MATURING DEBT 2024 2025 2026
Slide 15: High Headroom for All Covenant Types
HIGH HEADROOM FOR ALL COVENANT TYPES Q1 2024 STRESS CASE 1) COVENANT GCP COVENANT LIMIT RESULTS (value decrease until covenant breach) -41% Implies €4.5bn o GCP remains committed to maintain TOTAL NET DEBT / TOTAL NET ASSETS <=60% (1) 32% (Additional total asset further value loss a conservative fin
Slide 16: Guidance
GUIDANCE GCP
Slide 17: Guidance
GUIDANCE FY 2024 FFO I €175M – €185M FFO I per share €1.01 - €1.07 GUIDANCE CONFIRMED Dividend per share* €0.76 - €0.80 Total net rent like-for-like growth ~3% LTV <45% * The dividend will be subject to market condition and AGM approval Key drivers: ❖ Low single digit adj. EBITDA increase as a resul
Slide 18: Appendix
APPENDIX GCP
Slide 19: Focus on Central Locations in Berlin and NRW
FOCUS ON CENTRAL LOCATIONS IN BERLIN AND NRW* BEST IN CLASS BERLIN PORTFOLIO WELL DISTRIBUTED NRW PORTFOLIO 23% of GCP’s Portfolio Value 4th Largest city in Germany 70% of the Berlin portfolio is 21%* located in top tier of GCP’s Portfolio neighborhoods: Charlottenburg, Wilmersdorf, Mitte, Kreuzberg
Slide 20: High Quality London Portfolio
HIGH QUALITY LONDON PORTFOLIO* 20% of GCP’s WELL CONNECTED ❖The total London portfolio, including pre-marketed units, consists of Portfolio LONDON PORTFOLIO approx. 3,600 units ❖Over 80% of the portfolio is situated within a short walking distance to an underground/overground station ❖Through strong
Slide 21: Quality East and North Portfolio
QUALITY EAST AND NORTH PORTFOLIO QUALITY EAST PORTFOLIO QUALITY NORTH PORTFOLIO DRESDEN/LEIPZIG/HALLE HAMBURG / BREMEN 13%* 5%* of GCP’s of GCP’s Portfolio Portfolio DIVERSIFICATION INTO GERMANY’S DYNAMIC WELL POSITIONED IN EASTERN CITIES WITH GERMANY’S LARGEST Leipzig & Dresden STRONG DEMOGRAPHIC N
Slide 22: Market Fundamentals Remain Highly Supportive
MARKET FUNDAMENTALS REMAIN HIGHLY SUPPORTIVE Market fundamentals provide significant tailwind to continuous operational achievements resulting in higher rents, lower vacancies, supporting valuations Share of each rental rate segment in total rental offerings per annum Germany ❖ Elevated net migratio
Slide 23: London Rental Market Significant Supply–Demand Imbalance
LONDON RENTAL MARKET SIGNIFICANT SUPPLY – DEMAND IMBALANCE INCREASING DEMAND RESULTING COSTS AND DELAYS REMAIN ELEVATED SUPPLY CONTINUES TO LAG IN HIGHER RENTS - As per the most recent Construction Output Price Indices - New completions continue to lag the required level of 66k - London has witnesse
Slide 24: German Housing Market – Demand Fundamentals
GERMAN HOUSING MARKET – DEMAND FUNDAMENTALS Smaller Household Size1) 1,600k Positive Net Migration Trends3) 1 person 2 persons 3 persons 4 persons 5 or more persons 1,400k 1,200k 1,000k 800k Forecast 600k scenarios 1) 400k Average of approx. 330k per year 400k 41% 43% 42% 43% 43% 45% 46% 290k 38% 20
Slide 25: German Housing Market – Supply Fundamentals
GERMAN HOUSING MARKET – SUPPLY FUNDAMENTALS Strong increase in construction costs, additionally driven by more regulation 1) 800 Actual Completions vs. Required Completions2) Index January 2000 = 100 700 Est. new required level due to net migration: 600K 600 (until 2002) (from 2009) Additional 500 T
Slide 26: London Rental Market – Renting Favorable Over Owning
LONDON RENTAL MARKET – RENTING FAVORABLE OVER OWNING Ratio of house price to median earnings UK home ownership rate ❖ Doubling of house price to 18.0 household income ratio since 16.0 69% early 2000s leading to the 14.0 decrease in affordability of 53% 12.0 home ownership and supporting rental deman
Slide 27: ESG and Sustainability
ESG AND SUSTAINABILITY ENHANCED REPORTING In order to effectively address the varied interests and priorities of our business partners, investors, tenants, employees and communities The non-financial report was 2023 (NON-)FINANCIAL reviewed with limited assurance by KPMG. It provides REPORT a descri
Slide 28: ESG Goals and Contribution
ESG GOALS AND CONTRIBUTION 28
Slide 29: Environment
ENVIRONMENT GOING FORWARD Cologne Halle Create and deliver a portfolio wide CO2 reduction pathway report by energy auditing the environmental performance of buildings such as the use of energy, waste and water. Continue to switch the electricity supply of all common areas to PPA (Power Purchase Agre
Slide 30: Regulatory Environment – Modernisation
REGULATORY ENVIRONMENT – MODERNISATION - GCP continues to monitor the changes with regards to the modernization and sustainability investments. The German government recently rolled out a new subsidy and tax incentive scheme – however, these have changed continuously in recent years, and, in our opi
Slide 31: Social
SOCIAL TENANTS GCP FOUNDATION EMPLOYEES LOOKING FORWARD GCP values diversity – a fact that is also Entertaining, diverse, convincing: GCP From Dortmund to Halle, from Bremen to underlined with almost 40 nations creates attractive digital alternatives to Mainz: Support for charitable projects represe
Slide 32: Governance
GOVERNANCE 1 BEST-IN-CLASS REPORTING LEADING TO HIGH STANDARDS OF TRANSPARENCY - For the SEVENTH CONSECUTIVE year in September 2023, GCP received the EPRA BPR and sBPR gold awards for its financial reporting and sustainability reporting, respectively. 2 EXPERIENCED LEADERSHIP WITH STRONG AND INDEPEN
Slide 33: Financial Policy
FINANCIAL POLICY GCP FINANCIAL POLICY LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios with a strong ICR Unencumbered assets above 50% of total assets Long debt maturity profile Good mix of long-term unsecured bonds &
Slide 34: Analyst Coverage
ANALYST COVERAGE 19.2 14.5 12.9 12.5 12.3 12.0 11.8 11.2 11.1 10.1 10.0 10.0 9.3 8.4 8.2 8.0 Citigroup Kepler Cheuvreux First Berlin Berenberg DZ Bank HSBC J.P. Morgan Goldman Sachs Bernstein Oddo BHF Kempen & co Deutsche Bank UBS Jefferies Barclays Bank of America 01.09.2023 22.03.2024 15.04.2024 0
Slide 35: Share Development & Ownership Structure
SHARE DEVELOPMENT & OWNERSHIP STRUCTURE GCP - SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) 26 24 Grand City Properties 440% 22 SDAX (rebased) 208% 20 FTSE EPRA/NAREIT 95% 18 Germany (rebased) 16 14 12 10 Issue price 8 €2.75 6 4 2 2012 2013 2013 2014 2014 2015 2015 2016 2016
Slide 36: Management
MANAGEMENT Refael Zamir Mr. Zamir is the Chief Executive Officer of Grand City Properties since 2020 (and Daily Manager (administrateur-délégué)). Mr. Zamir has been working for the Group since 2013. He served as Chief Chief Executive Officer Financial Officer from 2014 to 2023 and as Chairman of th
Slide 37: Management
MANAGEMENT Senior Management (continued) Michael Bar-Yosef Mr. Bar-Yosef is responsible for financial modeling and cooperates with equity researchers to analyze their financial models and has more than 15 years of experience. Before joining GCP he served as Senior Financial Analyst a financial and c
Slide 38: Business Risk Profile
CREDIT RATING MATRIX FINANCIAL RISK PROFILE 1 2 3 4 5 6 MINIMAL MODEST INTERMEDIATE SIGNIFICANT AGGRESSIVE HIGH LEVER-AGED 1 aaa/ GCP will continue strengthening its position within the business profile EXCELLENT aa a+/a a- bbb bbb-/bb+ BUSINESS RISK PROFILE aa+ (Vonovia- BBB+)1 2 (GCP) (Aroundtown)
Slide 39: Disclaimer
DISCLAIMER IMPORTANT: This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute
Slide 40: Thank You
THANK YOU Investor Relations Team E-mail: gcp-ir@grandcity.lu www.grandcityproperties.com
Grand City Properties — Q1 2024 Earnings Presentation on 6ix