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GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED
Annual / Quarterly Financial Statement • Mar 3, 2023
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Annual / Quarterly Financial Statement
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National Storage Mechanism | Additional information 
RNS Number : 7320R
Globalworth Real Estate Inv Ltd
03 March 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
3 March 2023
Globalworth Real Estate Investments Limited
("Globalworth" or the "Company")
Condensed Unaudited Financial Results for the year ended 31 December 2022
Globalworth, the leading office investor in Central and Eastern Europe, announces the release of its Unaudited Consolidated Statement of Comprehensive Income and Unaudited Consolidated Statement of Financial Position for the year ended 31 December 2022.
The Company intends to announce its audited Financial Results for the year ended 31 December 2022 and publish its 2022 Annual Report towards the end of March 2023.
Key Highlights for the year ended 31 December 2022
· Total combined portfolio value remained effectively unchanged at €3.2 billion (0.2% higher compared to 31 December 2021).
o Combined standing commercial properties at year-end were appraised at €2.9 billion. Like-for-like properties marginally lower at €2.8 billion (1.3% decrease compared to 31 December 2021), with new facilities acquired or completed in 2022 adding €75.5 million in standing commercial portfolio value.
· Focused development program in select high-quality projects.
o Romania; delivered 6 new logistics facilities offering 104.4k sqm of GLA, with 3 logistics facilities under development which are expected to have a total GLA of 30.0k sqm.
o Poland; two mixed-use properties under refurbishment/repositioning.
· Acquired the first small business units logistic facility in Romania (Bucharest), with a total area of 7.1k sqm.
· Overall standing portfolio footprint net increase of 103.3k sqm (+7.9% compared to 31 December 2021) to 1.4m sqm of GLA in 71 standing properties.
· Leasing transactions of 206.9k sqm of commercial space at an average WALL of 4.4 years, despite continued challenging market conditions.
· Average standing occupancy of 85.6% (85.9% including tenant options), 2.9% lower compared to 31 December 2021.
o Addition of 7 properties with an average occupancy of 54.2%, some of which are in the lease-up phase, negatively impacted the overall combined standing occupancy.
o Like-for-like standing occupancy adjusted for Warta Tower in Warsaw (property held for sale and now effectively vacant), of 90.5% (+0.2% compared to 31 December 2021).
· Total annualised contracted rent up by 3.0% to €189.2m
o Like-for-like annualised commercial contracted rents in our standing commercial portfolio increased by 1.7% to €177.5 million at the end of 2022, mainly as effect of rent indexation.
· Rate of collections invoiced and due remained high at 99.0% for 2022.
· Net Operating Income ("NOI") was lower by 3.2% compared to 2021 at €139.7 million.
· EPRA earnings increased by 21.2% to €71.6 million (2021: €59.1 million), as prior year EPRA earnings were impacted by the exceptional one-off costs associated with the cash offer for Globalworth's shares initiated in May 2021.
· Adjusted normalised EBITDA decreased by 3.2% to €126.0 million (2021: €130.2 million), due to lower NOI, partially offset by the positive impact of the lower recurring administrative and other non-operating expenses.
· Net loss of €16.1 million (2021: net profit of €47.5 million) due to revaluation losses of €89.5 million in 2022 compared to the €5.7 million revaluation losses in 2021.
· Cash dividend paid to shareholders of €0.27 per share in 2022.
· Preliminary EPRA Net Reinstatement Value (NRV) of €1.8 billion, or €8.29 per share, decreasing from €8.66 at 31 December 2021 mainly due to revaluation losses on the property portfolio.
· High liquidity of €163.8 million (vs €418.7 million at 2021 year-end) plus available liquidity from committed undrawn facilities of €300 million; LTV 42.7% at 31 December 2022 (vs 40.1% at 2021 year-end).
· Maintained investment grade rating by all three major rating agencies.
· Sustainability:
o €2.6 billion in 53 green certified properties.
o 45 properties were certified or recertified with BREEAM Very Good or higher certifications during the year.
o Committed to reduce our carbon footprint based on a science-based approach to align with a 1.5oC trajectory.
o Issued the third sustainable development report and our inaugural Green Bond Report.
o Maintained low-risk rating by Sustainalytics and our MSCI rating to "A".
o Contributed to over 15 social initiatives in Romania and Poland.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
| 31 December | 31 December | ||
| 2022 | 2021 | ||
| €'000 | €'000 | ||
| Revenue | 239,251 | 219,350 | |
| Operating expenses | (99,571) | (75,098) | |
| Net operating income | 139,680 | 144,252 | |
| Administrative expenses | (13,712) | (25,622) | |
| Acquisition costs | (7) | - | |
| Fair value loss on investment property | (89,471) | (5,738) | |
| Share-based payment expense | - | (532) | |
| Depreciation and amortisation expense | (673) | (536) | |
| Other expenses | (2,013) | (1,851) | |
| Other income | 524 | 1,051 | |
| Foreign exchange gain/(loss) | 851 | 214 | |
| Loss from fair value of financial instruments at fair value through profit or loss | 222 | (386) | |
| Profit before net financing cost | 35,401 | 110,852 | |
| Finance cost | (52,532) | (55,539) | |
| Finance income | 2,694 | 1,749 | |
| Share of profit of equity-accounted investments in joint ventures | 3,219 | 5,010 | |
| (Loss)/profit before tax | (11,218) | 62,072 | |
| Income tax expense | (4,886) | (14,583) | |
| (Loss)/profit for the year | (16,104) | 47,489 | |
| Items that will not be reclassified to profit or loss: | |||
| Loss on equity instruments designated at fair value through other comprehensive income | (5,391) | - | |
| Other comprehensive income for the year, net of tax | (5,391) | ||
| Total comprehensive income | (21,495) | 47,489 | |
| (Loss)/profit attributable to: | (16,104) | 47,489 | |
| - ordinary equity holders of the Company | (16,961) | 47,489 | |
| - non-controlling interests | 857 | - | |
| Total comprehensive income attributable to: | (21,495) | 47,489 | |
| - ordinary equity holders of the Company | (22,352) | 47,489 | |
| - non-controlling interests | 857 | - |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
| 2022 €'000 |
2021 €'000 |
||
| ASSETS | |||
| Investment property | 2,945,460 | 2,966,080 | |
| Goodwill | 12,349 | 12,349 | |
| Advances for investment property | 4,393 | 3,436 | |
| Investments in joint ventures | 67,967 | 48,908 | |
| Equity investments | 7,521 | 12,109 | |
| Other long-term assets | 1,784 | 2,083 | |
| Prepayments | 226 | 338 | |
| Deferred tax asset | 161 | 151 | |
| Non-current assets | 3,039,861 | 3,045,454 | |
| Financial assets at fair value through profit or loss | 3,554 | 7,324 | |
| Trade and other receivables | 22,337 | 16,208 | |
| Contract assets | 9,967 | 6,106 | |
| Guarantees retained by tenants | 98 | 885 | |
| Income tax receivable | 840 | 117 | |
| Prepayments | 2,430 | 2,104 | |
| Cash and cash equivalents | 163,767 | 418,748 | |
| 202,993 | 451,492 | ||
| Investment property held for sale | 126,009 | 130,537 | |
| Total current assets | 329,002 | 582,029 | |
| Total assets | 3,368,863 | 3,627,483 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Issued share capital | 1,704,476 | 1,704,476 | |
| Treasury shares | (4,859) | (4,917) | |
| Fair value reserve of financial assets at FVOCI | (5,469) | - | |
| Share-based payment reserve | 156 | 156 | |
| Retained earnings | (37,798) | 38,914 | |
| Equity attributable to ordinary equity holders of the Company | 1,656,506 | 1,738,629 | |
| Non-controlling interests | 862 | - | |
| Total equity | 1,657,368 | 1,738,629 | |
| Interest-bearing loans and borrowings | 1,433,631 | 1,285,641 | |
| Deferred tax liability | 154,866 | 150,713 | |
| Lease liabilities | 19,861 | 18,762 | |
| Guarantees retained from contractors | 1,995 | 2,661 | |
| Deposits from tenants | 3,897 | 3,844 | |
| Trade and other payables | 1,034 | 956 | |
| Non-current liabilities | 1,615,284 | 1,462,577 | |
| Interest-bearing loans and borrowings | 21,600 | 348,279 | |
| Guarantees retained from contractors | 3,652 | 3,361 | |
| Trade and other payables | 35,679 | 39,788 | |
| Contract liability | 1,743 | 1,940 | |
| Other current financial liabilities | 67 | 261 | |
| Current portion of lease liabilities | 1,669 | 1,303 | |
| Deposits from tenants | 17,477 | 16,068 | |
| Income tax payable | 382 | 550 | |
| Current liabilities | 82,269 | 411,550 | |
| Liabilities directly associated with the assets held for sale | 13,942 | 14,727 | |
| Total current liabilities | 96,211 | 426,277 | |
| Total equity and liabilities | 3,368,863 | 3,627,483 |
COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT
AS AT 31 DECEMBER 2022
Our real estate investments are in Poland and Romania, the two largest markets in the CEE. As at 31 December 2022, our portfolio was spread across 13 cities, with Poland accounting for 50.2% by value and Romania 49.8%.
| Combined Portfolio Snapshot | |||||
| Poland | Romania | Combined Portfolio | |||
| Standing Investments(1) | 19 | 22 | 41 | ||
| GAV(2) / Standing GAV (€m) | €1,584m / €1,423m | €1,574m / €1,471m | €3,159m / €2,894m | ||
| Occupancy | 81.3% | 88.4% | 85.6% | ||
| (89.0% incl. tenant options) | (85.9% incl. tenant options) | ||||
| WALL(3) | 3.8 years | 5.0 years | 4.4 years | ||
| Standing GLA (k sqm)(4) | 542.1k sqm | 863.5k sqm | 1,405.6k sqm | ||
| Contracted Rent (€m)(5) | €93.3m | €95.9m | €189.2m | ||
| GAV Split by Asset Usage | |||||
| Office | 83.0% | 75.0% | 79.0% | ||
| Mixed-Use | 17.0% | 0.0% | 8.5% | ||
| Industrial | 0.0% | 17.2% | 8.6% | ||
| Others | 0.0% | 7.9% | 3.9% | ||
| GAV Split by City | |||||
| Bucharest | 0.0% | 84.0% | 41.9% | ||
| Timisoara | 0.0% | 6.3% | 3.1% | ||
| Pitesti | 0.0% | 3.7% | 1.8% | ||
| Constanta | 0.0% | 4.0% | 2.0% | ||
| Arad | 0.0% | 1.1% | 0.5% | ||
| Oradea | 0.0% | 0.4% | 0.2% | ||
| Tg. Mures | 0.0% | 0.5% | 0.3% | ||
| Warsaw | 44.6% | 0.0% | 22.3% | ||
| Krakow | 20.7% | 0.0% | 10.4% | ||
| Wroclaw | 16.0% | 0.0% | 8.0% | ||
| Katowice | 10.8% | 0.0% | 5.4% | ||
| Lodz | 4.3% | 0.0% | 2.1% | ||
| Gdansk | 3.7% | 0.0% | 1.8% | ||
| GAV as % of Total | 50.2% | 49.8% | 100.0% | ||
| 1. Standing Investments representing income producing properties. One investment can comprise multiple buildings. e.g. Green Court Complex comprises three buildings or one investment. | |||||
| 2. Includes all property assets, land and development projects valued at 31 December 2022. | |||||
| 3. Includes pre-let commercial standing and development assets. WALL of standing commercial properties in Romania, Poland and the Combined portfolio are 5.0 years, 3.7 years and 4.4 years, respectively. | |||||
| 4. Including 22.4k sqm of residential assets in Romania. | |||||
| 5. Total rent comprises commercial (€181.3 million) and residential (€0.7 million in Romania) standing properties, rent in assets under redevelopment (€6.7 million in Poland) and development pre-lets (€0.5 million in Romania). | |||||
| Annualised Commercial Portfolio Lease Expiration Profile | |||||||
| Year | 2023 | 2024 | 2025 | 2026 | 2027 | ≥2028 | Total |
| € million | 20.2 | 28.8 | 19.0 | 19.6 | 25.7 | 75.2 | 188.5 |
| % of total | 10.7% | 15.3% | 10.1% | 10.4% | 13.6% | 39.9% | 100% |
For further information visit www.globalworth.com or contact:
Enquiries
Stamatis Sapkas Tel: +40 732 800 000
Chief Financial Officer
Panmure Gordon (Nominated Adviser and Broker) Tel: +44 20 7886 2500
Dominic Morley
About Globalworth / Note to Editors:
Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Poland and Romania. Globalworth acquires, develops and directly manages high-quality office and industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by over 260 professionals across Cyprus, Guernsey, Poland and Romania, a combined value of its portfolio is €3.2 billion, as at 31 December 2022. Approximately 96.4% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of over 690 national and multinational corporates. In Poland Globalworth is present in Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice, while in Romania its assets span Bucharest, Timisoara, Constanta, Pitesti, Arad, Oradea and Targu Mures.
For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.
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