Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — 9M 2024 Earnings Presentation
42 slides from Grand City Properties Sa's earnings presentation, November 2024
Slide 1: Financial Results Presentation 9M 2024
FINANCIAL RESULTS PRESENTATION 9M 2024 Nov 2024 Dresden
Slide 2: Highlights
HIGHLIGHTS GCP
Slide 3: 9M 2024 Key Results Summary
9M 2024 KEY RESULTS SUMMARY KEY FINANCIAL RESULTS FINANCIAL PROFILE PORTFOLIO P&L 9M 2024 change 9M 2023 Sep 2024 Dec 2023 Sep 2024 Dec 2023 Net Rental Annualised net €317 3% €307m LTV 36% 37% €413m €406m Income rent Adjusted EPRA LTV 48% 48% €250 5% €240m Units 62,014 63,303 EBITDA Net debt/ Vacanc
Slide 4: Key Trends and Highlights
KEY TRENDS AND HIGHLIGHTS STRONG OPERATIONS WITH POSITIVE MOMENTUM ❖ GCP recorded like-for-like rental growth of 3.5% YoY, driven mostly by in-place rental growth. ❖ Rental increases are now beginning to reflect the inflationary pressures of the past few years, and going forward, rental growth is ex
Slide 5: Operational & Financial Results
OPERATIONAL & FINANCIAL RESULTS 5
Slide 6: Market Fundamentals Remain Highly Supportive
MARKET FUNDAMENTALS REMAIN HIGHLY SUPPORTIVE Consistently widening supply/demand gap and German market fundamentals provide significant tailwind to continuous operational achievements resulting in higher rents, lower vacancies, and supporting valuations Germany Strong city-specific fundamentals ❖ Ti
Slide 7: Strong Operational Dynamics
STRONG OPERATIONAL DYNAMICS CONTINOUSLY DELIVERING OPERATIONAL PERFORMANCE SUPPORTED BY FAVOURABLE MARKET FUNDAMENTALS +3.9% In-place rent CAGR (in €/sqm) ANNUALISED NET RENTAL INCOME vs. MARKET POTENTIAL (ERV) 9.0 (in € millions) 8.5 8.6 8.1 8.2 +24% +3.5% +3.3% 413 upside 512 L-F-L L-F-L Total net
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW ❖ In 9M 2024, GCP signed €230 million of disposals. ❖ In 9M 2024, GCP completed €170 million of asset disposals around book value (slight discount of <2%). The closed disposals include properties signed in 2023. These properties are primarily located in London, NRW, Berlin and Hes
Slide 9: P&L Results
P&L RESULTS Selected consolidated statement of profit or loss 9M 2024 9M 2023 NET RENTAL INCOME ADJUSTED EBITDA (in € millions) (in € millions) in € ‘000 unless otherwise indicated +3% 317 307 +5% 250 Revenue 447,046 455,862 240 Net rental income 316,931 307,492 Property revaluations and capital los
Slide 10: FFO I + II
FFO I + II FFO I FFO I per share (in € millions) (in €) in € ‘000 unless otherwise indicated 9M 2024 9M 2023 141 141 Adjusted EBITDA 250,491 239,584 0.82 0.82 Finance expenses (43,154) (42,093) Current tax expenses (30,910) (29,757) Contribution to minorities (3,559) (3,265) 9M 2023 9M 2024 9M 2023
Slide 11: Maintenance & Capex
MAINTENANCE & CAPEX REPOSITIONING CAPEX REPOSITIONING CAPEX & MAINTENANCE REPOSITIONING CAPEX PROJECTS (in € per average sqm) Dresden - Focus remains on improving asset quality, value creation 18.5 and increasing rental income 17.0 - Other value-add measures include: - Upgrading apartments for new r
Slide 12: 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% 0% -5% -1% -1% -5% 26.7 26.4 4,606 4,560 23.2 23.1 4,014 3,985 3,745 21.7 3,562 20.6 Dec Sep Dec Sep Dec Sep Dec Sep Dec Sep Dec Sep 2023 2024 2023 2
Slide 13: Financial Profile
FINANCIAL PROFILE GCP
Slide 14: Strong Financial Profile
STRONG FINANCIAL PROFILE LIQUIDITY POSITION LOW LEVERAGE INTEREST HEDGING RATIO Wuppertal Fixed & Swapped LOW AND STABLE LTV 95% hedged Capped 45% Board of Directors’ Limit Variable EPRA LTV NET €1.5b 37% 36% (including perpetual DEBT/ Sep 2024 cash and notes as 100% debt) EBITDA 5% liquid assets 90
Slide 15: Debt Maturity Schedule
DEBT MATURITY SCHEDULE AVERAGE DEBT COST OF DEBT 1,400 MATURITY 2.1% 5.1 years Sep 2024 Sep 2024 1,200 1,000 EUR Millions 800 600 400 200 0 COST OF 1.3% 1.3% 1.6% 1.3% 4.0% 4.4% 2.6% 3.5% 2.2% 2.4% MATURING DEBT 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 >=2038 Straight Bo
Slide 16: Guidance
GUIDANCE GCP
Slide 17: Guidance
GUIDANCE FY 2024 FFO I €180M – €190M FFO I per share €1.04 - €1.10 GUIDANCE CONFIRMED Dividend per share* €0.78 - €0.83 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: High Headroom for All Covenant Types
HIGH HEADROOM FOR ALL COVENANT TYPES 9M 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 20: Successful Perpetual Notes Transactions
SUCCESSFUL PERPETUAL NOTES TRANSACTIONS Nominal Coupon First call date % and Exchange Amount Nominal Amount absolute Ratio1) repurchased Amount MAIN CHARACTERISTICS OF PERPETUAL NOTES outstanding accepting the via tenders outstanding before offers after 6.332% Perpetual Notes €200m 6.332% Jan 2023 7
Slide 21: 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 located in top tier 21%* of GCP’s neighborhoods: Portfolio Charlottenburg, Wilmersdorf, Mitte, Kreuzberg
Slide 22: High Quality London Portfolio
HIGH QUALITY LONDON PORTFOLIO* 19% of GCP’s WELL CONNECTED ❖The total London portfolio, including pre-marketed units, consists of Portfolio LONDON PORTFOLIO approx. 3,600 units ❖Approx. 80% of the portfolio is situated within a short walking distance to an underground/overground station ❖Through str
Slide 23: 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 24: 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 - No rent regulation
Slide 25: German Housing Market – Supply Fundamentals
GERMAN HOUSING MARKET – SUPPLY FUNDAMENTALS Strong increase in construction costs, additionally driven by more regulation 1) Germany: Actual Completions vs. Required Completions2) and Estimated Completions3) Index January 2000 = 100 650 GEG 2023/ Est. new required level due to net migration: 600K GE
Slide 26: London Rental Market – Renting Favorable Over Owning
LONDON RENTAL MARKET – RENTING FAVORABLE OVER OWNING Ratio of house price to median earnings Difference between the mean England home ownership rate ❖ Doubling of house price to household income ratio average house price and the since early 2000s leading to the decrease in mean mortgage size (implie
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 EIGHT CONSECUTIVE year in September 2024, GCP received the EPRA BPR and sBPR gold awards for its financial reporting and sustainability reporting, respectively. 2 EXPERIENCED LEADERSHIP WITH STRONG AND INDEPENDE
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 19.7 17.0 15.7 15.1 14.5 14.3 13.2 12.7 12.2 12.0 12.0 11.0 11.0 8.4 Citigroup Kepler Cheuvreux DZ Bank First Berlin Berenberg Bernstein Oddo BHF Goldman Sachs Barclays HSBC Kempen & co Deutsche Bank UBS Jefferies 05.09.2024 04.09.2024 14.08.2024 24.09.2024 28.08.2024 11.09.2024 01.
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* 478% 22 SDAX (rebased)* 170% 20 18 FTSE EPRA/NAREIT 127% 16 Germany (rebased)* 14 12 10 Issue price 8 €2.75 6 4 2 2012 2013 2013 2014 2014 2015 2015 2016
Slide 36: Management – CEO & CFO
MANAGEMENT – CEO & CFO REFAEL ZAMIR – CHIEF EXECUTIVE IDAN HADAD – CHIEF FINANCIAL OFFICER OFFICER Mr. Zamir is the Chief Executive Officer of Grand City Mr. Hadad is the Chief Financial Officer of Grand City Properties since 2020 (and Daily Manager Properties as of January 2023 (and also Daily Mana
Slide 37: Management – Board of Directors
MANAGEMENT – BOARD OF DIRECTORS MR. CHRISTIAN WINDFUHR – CHAIRMAN, DIRECTOR Mr. Windfuhr is the Chairman of the Board of Grand City Properties. Before joining MS. SIMONE RUNGE-BRANDNER – NON-EXECUTIVE DIRECTOR Grand City Mr. Windfuhr served as CEO of Maritim Hotels, with 40 hotels in Ms. Runge-Brand
Slide 38: Management – Senior Management
MANAGEMENT – SENIOR MANAGEMENT MICHAEL BAR-YOSEF – HEAD OF INVESTOR RELATIONS AND CAPITAL SEBASTIAN REMMER-FALTIN - COO MARKETS Mr. Remmert-Faltin has more than 20 years professional experience in the real Mr. Bar-Yosef is responsible for investor relations, capital markets and credit ratings estate
Slide 39: Advisory Board
ADVISORY BOARD The Advisory Board is an important source of guidance for the Board of Directors when making strategic decisions and has been established by The Board of Directors to provide expert advice and assistance. The Advisory Board has no statutory powers under Luxembourg law or the articles
Slide 40: 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 continuously strengthens its position within the business profile EXCELLENT aa a+/a a- bbb bbb-/bb+ BUSINESS RISK PROFILE aa+ (Vonovia- BBB+)1 2 (DW)2 (GCP) (Aroundto
Slide 41: 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 42: Thank You
THANK YOU Investor Relations Team E-mail: gcp-ir@grandcity.lu www.grandcityproperties.com
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