Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial SOCIMI — Q1 2018 Earnings Presentation
53 slides from Colonial Sfl Socimi Sa's earnings presentation, May 2018
Slide 1: First Quarter Results 2018
First Quarter Results 2018 May 2018 1/18
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 1Q 2018 Accelerating the Business Plan OUTSTANDING FINANCIAL RESULTS > Gross Rental Income, +19% > Net Rental Income, +8% like for like > Recurring earnings, +29% > Net Profit of €22m, +40% STRONG OPERATIONAL PERFORMANCE > More than 73,000 sq m let in a quarter > Very healthy vacancy l
Slide 7: Solid top line growth driving results
01 Highlights 1Q 2018 Solid top line growth driving results > GRI increase: +19% > GRI like for like: +6%, strong growth in every market > Net Profit: +40% with EPS up +15% Top line Growth – Gross Rental Income YoY Var BUSINESS MIX – GAV GROUP1 Group Total +19% Group like for like2 +6% Madrid like f
Slide 8: Capturing rental growth in every market
01 Highlights 1Q 2018 Capturing rental growth in every market > High double digit release spreads > Strong increase vs market rents > Low vacancy with strong fundamentals Operational Performance 1Q 2018 BUSINESS MIX – GAV GROUP3 # Transactions signed 33 Volume of sq m signed 73,855 EPRA Vacancy 5% D
Slide 9: Market: Scarcity in Grade A
02 Market Scarcity in Grade A
Slide 10: Macro Outlook remains strong
02 Market Macro Outlook remains strong > Eurozone above 2% GDP Growth > Spain growing above EU average > France improving significantly MARKET TRENDS GDP GROWTH WORLD & EU World GDP improving +3.7% in 2017 & +3.9% in 2018 2017E 2018E 2019E Euro area with GDP growth well above +2% Solid base po
Slide 11: Fundamentals remain solid in every market
02 Market Fundamentals remain solid in every market VACANCY % TAKE UP 1Q 2018 HIGHLIGHTS > CBD vacancy at historical lows: < 5% 81,040 sqm BARCELONA > Take-up +21% vs previous quarter +21% QoQ > Increased number of pre-let transaction Stable YoY > Prime Rents at 24 €/sqm/month, +8% YoY > Q1 2018 tak
Slide 12: Colonial as leading market indicator for rental growth
02 Market Colonial as leading market indicator for rental growth > Ongoing rental growth in Colonial portfolio > Colonial outperforming the market > Colonial setting the benchmark for prime ERV GROWTH – COLONIAL VS MARKET PRIME ERVs 12 months 2017 3 months 2018 €/sqm/month BARCELONA Colonial Portfol
Slide 13: Investment Markets remain strong
02 Market Investment Markets remain strong > Scarcity of Grade A product > Rental growth main driver for future capital value growth > Spreads vs reference rates remain attractive PRIME YIELDS (1) SPREAD VS 10Y BOND HIGHLIGHTS > +3% Capital Value Growth QoQ BARCELONA > Q1 Prime Capital Values at 7,2
Slide 14: Operational performance: Offering the better site
03 Operational performance Offering the better site
Slide 15: 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 10 4,695 €1m 4% 2.8% MADRID 13 18,262 €5m 2% 12% PARIS 7 5,506 €4m 14% 2.7% LOGISTIC 3 45,392 €2m 3% 0% TOTAL 33 73,855 €12m 8% 5% (1) Annualized figu
Slide 16: Prime positioning captures top tier clients paying maximum rents
03 Operational performance Prime positioning captures top tier clients paying maximum rents > High quality premises attract top tier tenants > Colonial captures rental prices at the top of the market MAX. RENT SIGNED PRIME RENTS # CONTRACTS CAPTURING & RETAINING TOP TIER CLIENTS COLONIAL MARKET BARC
Slide 17: Strong delivery on rental price increases
03 Operational performance Strong delivery on rental price increases > Outstanding rental growth in every city > Double digit release spreads > No renewals in Paris SOLID INCREASE IN RENTAL PRICES GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 4Q 2017 1Q 2018 4Q 2017 1Q 2018 BARCELONA +16% +3% +15% +16% MA
Slide 18: Barcelona Letting Performance
03 Operational performance Barcelona Letting Performance BARCELONA – LETTING PERFORMANCE Solid Performance Strong rental growth - Highlights 4,695 sq m let Diagonal 609-615 Via Augusta 21-23 Berlín / Numancia > Max. rent signed 24.0 €/sqm/month > ERV growth +3% (1) +22% +20% +10% release release rel
Slide 19: Madrid Letting Performance
03 Operational performance Madrid Letting Performance MADRID – LETTING PERFORMANCE Solid Performance Strong Rental Growth - Highlights 18,262 sq m let Sagasta 31-33 Martínez Villergas 49 Francisca Delgado 11 > Max. rent signed 29.9 €/sqm/month +7% (1) > ERV growth +40% +25% +11% release release rele
Slide 20: Paris Letting Performance
03 Operational performance Paris Letting Performance PARIS – LETTING PERFORMANCE Solid Performance Strong Rental Growth - Highlights 5,506 sq m let Louvre Saint-Honoré Cézanne Saint-Honoré > Max. rent signed 787 €/sqm/year > ERV growth +5% (1) +11% +9% vs ERV1 vs ERV1 > EPRA Vacancy 3% Washington Pl
Slide 21: Vacancy remains at healthy levels
03 Operational performance Vacancy remains at healthy levels > Colonial vacancy at healthy 5% > Barcelona and Paris below 3% > Madrid like for like at 1% - Discovery & Axiare providing reversionary potential EPRA VACANCY BARCELONA1 Axiare LFL Colonial MADRID1 Axiare COLONIAL GROUP2 Discovery LFL Col
Slide 22: Madrid portfolio with additional Grade A Product
03 Operational performance Madrid portfolio with additional Grade A Product > Discovery & Axiare providing reversionary potential > Grade A space to attract new clients > Best product in every market-segment EPRA VACANCY AVAILABILITY OF GRADE A SPACE IN SOLID MARKETS Luca de Tena 14 Ribera del Loira
Slide 23: Colonial portfolio outperforming the market on occupancy
03 Operational performance Colonial portfolio outperforming the market on occupancy > Colonial with solid vacancy levels in every city > Colonial strong positioned vs market average > A solid base to capture rental growth EPRA VACANCY VACANCY COLONIAL VS. MARKET BARCELONA Total Market Prime CBD Mark
Slide 24: Corporate Social Responsibility (CSR) at the core of strategy
03 Operating Performance Corporate Social Responsibility (CSR) at the core of strategy > Colonial with strong commitment on CSR > Providing added value to clients through efficient buildings > CSR guarantees long term sustainable returns EPRA BPR Gold ENERGY EFFICIENCY STANDARDS 3rd year in a row 90
Slide 25: Financial performance: Solid top line driving profitability
04 Financial performance Solid top line driving profitability
Slide 26: Double digit top line growth
04 Financial performance Double digit top line growth > GRI growth of +19% enhanced through Axiare > GRI like for like increase strong at +6% > Madrid like for like outstanding with +8% GROSS RENTAL INCOME - €M +6% EPRA Acquisitions In&Out Like for Axiare TOTAL EPRA Like for like1 & Projects2 dispos
Slide 27: Like for like rental growth mainly price driven
04 Financial performance Like for like rental growth mainly price driven > Half of like for like growth driven by rental price increases > Barcelona and Madrid with strong price effect > Paris with +6% like for like increase, well above peers GROSS RENTAL INCOME - €M STRONG EPRA LIKE FOR LIKE GROWTH
Slide 28: Like for like growth accelerating
04 Financial performance Like for like growth accelerating > Like for like growth in Q18 accelerating by 200 bp > Net Rental Income like for like increase at +8% > Madrid with outstanding +15% like for like in Net Rental Income LIKE FOR LIKE VARIANCE1 – GRI & NRI LFL GROWTH ACCELERATING LFL IN NET R
Slide 29: Acceleration of profitable growth
04 Financial performance Acceleration of profitable growth > +29% increase in Recurring Earnings > Earnings driven by solid top line growth > Axiare acquisition enhancing results PROFIT & LOSS ACCOUNT RESULTS TOP LINE DRIVEN > Solid 8% Like for Like net rental income growth > Results enhancement thr
Slide 30: Acceleration of profitable growth
04 Financial performance Acceleration of profitable growth > +40% Increase in Net Profit > +15% EPS increase > +19% Gross Rental Income growth STRONG TOP & BOTTOM LINE PERFORMANCE PROFIT & LOSS ACCOUNT PROFIT ATTRIBUTABLE TO GROUP €m +40% EARNINGS PER SHARE €/share +15% GROSS RENTAL INCOME €m +19% 3
Slide 31: Active balance sheet management
04 Financial performance Active balance sheet management > Successful issuance of €650m 8Y senior unsecured bond > Extension of the Group’s debt maturity at attractive cost of 2% > More than 3x oversubscribed with high quality accounts BOND ISSUANCE KPI’S EXECUTION HIGHLIGHTS Bond Issuance Size €650
Slide 32: Strong credit profile
04 Financial performance Strong credit profile > An unparalleled high quality collateral diversified in three cities > A solid capital structure with competitive costs > An enhanced maturity profile A FIRST CLASS COLATERAL WITH… … SOLID CAPITAL STRUCTURE €11bn well diversified high quality assets LT
Slide 33: Share price driven by solid delivery of fundamentals
04 Financial performance Share price driven by solid delivery of fundamentals > +22% Share Price increase 2018 YTD > Capital markets recognize execution of Business Plan > High quality shareholder base SHARE PRICE PERFORMANCE 2018 YTD1 STRONG SHAREHOLDER BASE Free float 1 Alpha III 64% 9/05/18 End o
Slide 34: Share price driven by solid delivery of fundamentals
04 Financial performance Share price driven by solid delivery of fundamentals > Unparalleled share price performance YTD > Strong outperformance of peers in Spain & Europe > Well above reference indices – IBEX & EPRA SHARE PRICE PERFORMANCE 2018 YTD1 VS PEERS Spain Europe (1) Share price YTD as of 9
Slide 35: Growth drivers: A solid base for future growth
05 Growth drivers A solid base for future growth
Slide 36: A solid base for growth
05 Growth drivers A solid base for growth GROWTH DRIVER KPIs ADDITIONAL GRI1 ATTRACTIVE TIMING 1 Spain: 74% of contracts due in 3 years Capturing €33m France 52% of contracts due in 3 years Reversion ADDITIONAL UPSIDE 2 Project 11 Projects FROM MARKET €71m GLA of more than 240,000 sqm(3) pipeline RE
Slide 37: Colonial well positioned to capture reversion
05 Growth drivers 1 Colonial well positioned to capture reversion > Strong delivery on reversion in Q1 2018 > Attractive rent roll profile > Solid positioning in growing markets CAPTURING REVERSION ATTRACTIVE RENT ROLL SOLID POSITIONING IN GROWING MARKETS COMMERCIAL LEASE EXPIRY DATES First potentia
Slide 38: Value creation potential through project pipeline
05 Growth drivers 2 Value creation potential through project pipeline > Colonial Project pipeline with substantial capital gain potential > Progressive phasing-in of the initiatives > Short term projects with strong visibility on pre-lets Discovery Príncipe de Vergara Plaza Europa 34 M Álvaro Office
Slide 39: Short term projects on track to crystalize value
05 Growth drivers 2 Short term projects on track to crystalize value Projects – short term delivery GLA of 46,071 sq m Ungeared IRR 8-9%1 Discovery Delivered Parc Glories Príncipe de Vergara 10.152 24.551 11.368 sq m sq m sq m 4,693 3,136 3,998 Total Product Cost2 Total Product Cost2 Total Product
Slide 40: Solid execution on Take-over bid on Axiare
05 Growth drivers 3 Solid execution on Take-over bid on Axiare > Rapid execution of takeover bid through efficient process management > Transaction financing secured in advance - de-risking the final settlement > Full integration process after merger approval EXECUTION HIGHLIGHTS - TAKE-OVER BID AXI
Slide 41: A complementary Grade A portfolio with high growth potential
05 Growth drivers 3 A complementary Grade A portfolio with high growth potential > 13 assets fully occupied allowing for price reversion > Additional Grade A space to capture new clients > Attractive project pipeline in solid markets CORE ASSETS ABOVE 95% OCCUPANCY ADDITIONAL SPACE IN -GRADE A- PROD
Slide 42: A unique logistics portfolio in Spain
05 Growth drivers 3 A unique logistics portfolio in Spain > High quality portfolio 100% occupied > Additional growth from San Fernando projects > 5th largest logistics portfolio in Spain UNIQUE LOGISTICS PORTFOLIO STRONG FOOTPRINT IN SPANISH LANDSCAPE More than €300m in GAV Alcalá de Henares Azuquec
Slide 43: Acquisitions – solid track record with €2bn in 4 years
05 Growth drivers Acquisitions – solid track record with €2bn in 4 years > Mainly off market transactions > High value added components > City center locations with strong fundamentals INVESTMENTS SINCE 2015 - €m 579 499 Close to €2.0bn 477 389 of organic acquisitions I. Attractive entry prices thro
Slide 44: A Solid platform to capture future growth
05 Growth drivers A Solid platform to capture future growth > Well positioned to capture reversion > Significant future value creation through Project pipeline > Combination of complementary -Grade A- office portfolios Current Uplift Potential Passing GRI 1 – (€m) Solid platform for future growth I.
Slide 45: Conclusion
06 Conclusion
Slide 46: Conclusion
06 Conclusion CAPTURING RENTAL GROWTH WITH GRADE A PRODUCT > More than 73,000 sq m let with top tier clients > Very healthy vacancy levels at 5% > Strong delivery on rental growth - double digit release spreads Capturing market rental growth GRI increase price driven Solid base for further Cap
Slide 47: Q&A
Q&A
Slide 48: Project pipeline: Barcelona Projects
APPENDICES Project pipeline Barcelona Projects GLA of 43,169 sq m Ungeared IRR 8-9%2 Parc Glories Gala Placidia Plaza Europa IT Multinational 80% PRE LET IT Multinational FINAL PRODUCTS - KPIs BARCELONA PRIME MARKET IT Multinational IT Multinational Total Cost1 €126m 2,900 6,975 Capital Value Capita
Slide 49: Project pipeline: Madrid Projects
APPENDICES Project pipeline Madrid Projects GLA of 141,168 sq m Ungeared IRR 8-9%2 Discovery Delivered Príncipe de Vergara Castellana 163 Méndez Álvaro Campus Méndez Álvaro Office Scheme FINAL PRODUCTs - KPIs PRIME MARKET Total Cost1 €495m 3,500 Capital 10,000 Capital Value Value €/sqm €/sqm Prime
Slide 50: Project pipeline: Paris Projects
APPENDICES Project pipeline Paris Projects GLA of 49,300 sq m Ungeared IRR >> 7%2 Emile Zola Iéna Louvre St. Honoré FINAL PRODUCTs - KPIs PARIS PRIME MARKET Iéna €536m Total Cost1 Louvre St. H. Emile Zola 11,000 25,800 Capital Value €/sqm Capital Value €/sqm >6% 3% Yield on Cost Prime Yield (1) Acqu
Slide 51: A solid capital structure
APPENDICES A solid capital structure > An unparalleled high quality collateral diversified in three cities > A solid finance structure with competitive financing costs > A strong credit profile A FIRST CLASS COLATERAL A SOLID FINANCIAL STRUCTURE Capital Structure 31/12/2017 31/03/2018 More than €9bn
Slide 52: Total Shareholder Return since June 2014
APPENDICES Total Shareholder Return since June 2014 52
Slide 53: www.inmocolonial.com
www.inmocolonial.com © Colonial
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