Investor Presentation • Apr 11, 2021
Investor Presentation
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APRIL 2021
COMPANY INFORMATION AS OF 31 DECEMBER 2020 UNLESS STATED OTHERWISE
PRESENTATION CONTENT
ONE OF THE LARGEST PUBLICLY-TRADED, DEVELOPERS, OWNERS AND MANAGERS OF OFFICE, RETAIL AND LOGISTIC REAL ESTATE IN ISRAEL
| 3-5 | AMOT INTRODUCTION |
|---|---|
| 6-13 | SUPPORTIVE MACRO ENVIRONMENT |
| 14-22 | HIGH QUALITY PORTFOLIO |
| 23-33 | ROBUST DEVELOPMENT PIPELINE |
| 34-39 | SUPERIOR FINANCIAL RETURNS |
| 40-41 | CONCLUSION |
| 42-46 | APPENDIX ADDITIONAL MATERIALS |
IN TRO DUC TION
ONE OF THE LARGEST PUBLIC-TRADED COMPANIES, DEVELOPERS, OWNERS AND MANAGERS OF OFFICE, RETAIL AND LOGISTIC REAL ESTATE IN ISRAEL
AMOT 4 INTRODUCTION
57% OWNED BY ALONY HETZ, A LEADING REAL ESTATE GROUP WITH EXTENSIVE TRACK RECORD IN COMMERCIAL REAL ESTATE.
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ONE OF THE 35 LARGEST COMPANIES ON THE ISRAELI STOCK EXCHANGE AND INCLUDED IN THE FOLLOWING INDICES: TEL AVIV 35, TEL-AVIV - REAL ESTATE AND TEL-AVIV - DIVIDEND, FTSE EPRA NAREIT GLOBAL.
THE COMPANY'S BONDS ARE RATED ILAA/STABLE BY S&P MAALOT AND ILAa2/STABLE BY MOODY'S MIDROOG (ISRAELI SCALE).
TOTAL REAL ESTATE VALUE (GAV) - 14 BILLION NIS ALL LOCATED IN ISRAEL.
TOTAL AREA: 1,500,000 SQUARE METRES. APPROXIMATELY 956,000 SQM ABOVE GROUND SPACE AND 553,000 SQM PARKING SPACES.
72% OF THE TOTAL OPERATING PROPERTY VALUE IS LOCATED IN GREATER TEL AVIV AREA.
ONE OF THE LARGEST PUBLICLY-TRADED, DEVELOPERS, OWNERS AND MANAGERS OF OFFICE AND INDUSTRIAL REAL ESTATE IN ISRAEL
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Key investment 5 highlights
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QUARTERLY DIVIDEND DISTRIBUTION ACCORDING TO A CLEAR DIVIDEND POLICY. 8
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MENT
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SUPPORTIVE MACRO ENVIRONMENT
SUPPORTIVE MACRO ENVIRONMENT AND LOCAL REAL ESTATE FUNDAMENTALS
ENVIRONMENT
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ISRAEL BOASTS STRONG ECONOMIC FUNDAMENTALS AND HAS BECOME A GLOBAL TECHNOLOGY HUB
ISRAEL BOASTS STRONG ECONOMIC FUNDAMENTALS AND HAS BECOME A GLOBAL TECHNOLOGY HUB
PUBLIC DEBT AS % OF GDP (2019)
IN
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ENVIRONMENT
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ISRAEL BOASTS STRONG ECONOMIC FUNDAMENTALS AND HAS BECOME A GLOBAL TECHNOLOGY HUB
ISRAEL BOASTS STRONG ECONOMIC FUNDAMENTALS AND HAS BECOME A GLOBAL TECHNOLOGY HUB
SOURCES: IVC, MINISTRY OF ECONOMY AND INDUSTRY
SUPPORTIVE 10 ENVIRONMENT
TEL AVIV AS ISRAEL'S GROWTH ENGINE
IN
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TION
| 38% | AGED 25-44 RESIDENT (VERSUS 26% ACROSS ) REST OF COUNTRY |
|---|---|
| 141% OF NATIONAL AVERAGE |
HIGHER INCOMES THAN ISRAELI AVERAGE |
| c.2,100+ | HIGH -TECH COMPANIES BASED IN TEL AVIV |
| 90% | LARGEST TECH COMPANIES IN THE - WORLD WITH TEL AVIV PRESENCE |
| 100+ | INTERNATIONAL R&D CENTERS |
SOURCE: TEL AVIV STATISTICAL YEARBOOK, IVC, TEL AVIV STARTUP CITY REPORT
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STRONG TENANT DEMAND WITH LIMITED NEAR TERM. NEW SUPPLY DRIVING RENTS HIGHER
80% 84% 88% 92% 96% 100% 98.20% 97.10%
SOURCE: CBRE - INTRODUCTION TO COMMERCIAL REAL ESTATE IN ISRAEL (DECEMBER 2020)
IN
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SUPPORTIVE 12 ENVIRONMENT
NB
NEW PUBLIC TRANSPORT LINKS TO BE BUILT OVER THE NEXT DECADE
ISRAELI GOVERNMENT TO INVEST OVER 150 BILLION NIS OVER THE NEXT SEVERAL YEARS, TO PROMOTE AND DEVELOP THE TRANSPORT INFRASTRUCTURE IN THE TEL AVIV METROPOLITAN AREA, INCLUDING SEVERAL LIGHT RAIL LINES AND METRO LINES CONNECTING TEL AVIV CBD TO SURROUNDING SUBURBS.
IN
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SIGNIFICANT GAP BETWEEN HIGH CAP RATES AND LOW INTEREST RATES SUPPORT AN ATTRACTIVE RETURN ON EQUITY FOR REAL ESTATE INVESTORS
3.1% 3.0%
1 Cap rate spread defined as prime CBD office cap rates / yields less the applicable 10-year benchmark government bond yield
SUPPORTIVE ENVIRONMENT
Cushman & Wakefield, CBRE, JLL; the office market in the shadow of covid-19 feb 2021 (Hebrew version);Factset as of 12 March 2021
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FOLIO
OFFICE AND INDUSTRIAL LED PORTFOLIO; RETAIL LARGELY COMPRISED OF CENTRES IN HIGH QUALITY LOCATIONS
HIGH QUALITY 15 PORTFOLIO
OFFICE FOCUS PORTFOLIO
FOLIO
OFFICE AND INDUSTRIAL LED PORTFOLIO; RETAIL LARGELY COMPRISED OF CENTRES IN HIGH QUALITY LOCATIONS
INCOME-PRODUCING PROPERTY VALUE AS OF: 31/12/2020
SEGMENTATION OF INCOME-PRODUCING PROPERTY VALUE
INCOME-PRODUCING PROPERTY VALUE IN MILLION NIS:
12,651
TOTAL PROPERTY VALUE IN MILLION NIS:
INCLUDING ESSENTIAL RETAIL ( 7%) SUCH AS PHARMACIES, CLINICS AND BANKS *
13,941 INCLUDING PROJECTS UNDER DEVELOPMENT
GREATER
TEL AVIV
AMOT'S PORTFOLIO IS FOCUSSED ON GREATER TEL AVIV AND ITS IMMEDIATE SURROUNDINGS ("GUSH DAN"), THE BOOMING EPICENTRE OF ISRAEL
FOLIO
FAIR VALUE BY LOCATION INCOME-PRODUCING PROPERTY
36%
TEL AVIV METROPOLIS
36%
NB PORT INCOME-PRODUCING PROPERTY VALUE AS OF:
GUSH DAN SURROUNDINGS
28%
OTHER AREAS
VALUE IN MILLION NIS:
12,651
31/12/2020
AMOT OWNS SEVERAL MARQUEE BUILDINGS THAT STAND OUT AMIDST THE TEL AVIV SKYLINE
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HIGH QUALITY 18 PORTFOLIO
OFFICES CASE STUDY
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DEVELOPMENT AT ATTRACTIVE YIELD ON COST
| ATRIUM | ||
|---|---|---|
| TOWER |
LOCATION TEL AVIV
METROPOLIS
MAIN USE OFFICES
OCCUPANCY 95%
INCLUDING AMOT'S FLOOR REP. NOI 91 MILLION NIS
AREA 57,000 SQM INCLUDING AMOT'S FLOOR NIS FAIR VALUE 1,482M 31.12.1020
YIELD ON COST >10%
AMOT'S SHARE 100%
HIGH QUALITY 19 PORTFOLIO
OFFICES CASE STUDY
DEVELOPMENT AT ATTRACTIVE YIELD ON COST
LOCATION TEL AVIV METROPOLIS MAIN USE OFFICES AREA 57,000 SQM OCCUPANCY 96.5% NOI 90 MILLION NIS YIELD ON COST >10% AMOT'S SHARE 50% FAIR VALUE 1,542M NIS 100% AS OF 31.12.1020 2020 100% 100%
HIGH QUALITY 20 PORTFOLIO
NB
| LOCATION | SHOHAM |
|---|---|
| (28KM FROM CENTRAL TEL-AVIV) | |
| MAIN USE | LOGISTICS |
| AMOT'S SHARE | 100% |
| AREA | 50,000 SQM |
| FAIR VALUE 11.2019 |
451M NIS |
| OCCUPANCY | 100% |
NOI 22
2020 MILLION NIS
ADDITIONAL UNUSED BUILDING RIGHTS
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NEAR FULL OCCUPANCY; LONG TRACK-RECORD OF SUCCESSFUL LEASING
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ROBUST DEVELOPMENT PIPELINE
DE VE LOP MENT
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INVESTMENT IN PROJECTS UNDER CONSTRUCTION (LAND + BUILDING) UP TO 15% OF THE TOTAL PROPERTY VALUE.
MAINTAINING THE COMPANY'S EXISTING LEVERAGE RATES.
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MENT
CONCENTRATION OF DATA ON PROJECTS UNDER CONSTRUCTION
THE COMPANY HAS 4 PROJECTS IN THE STAGES OF CONSTRUCTION OR PRE-CONSTRUCTION, IN WHICH THE COMPANY'S SHARE IS APPROXIMATELY 94 THOUSAND SQUARE METERS OF ABOVEGROUND AREAS. THE TOTAL EXPECTED SCOPE OF THE INVESTMENT IN THESE PROJECTS IS AROUND NIS 1.4 BILLION (THE COMPANY'S SHARE), AND THE BALANCE OF THE INVESTMENT THEREIN IS NIS 0.8 BILLION (THE COMPANY'S SHARE).
| MAIN USE | OFFICES |
|---|---|
| AMOT'S SHARE | 78% |
| GLA 100% |
60,000 SQM |
| EXPECTED COMPLETION |
2021 |
EXPECTED YOC 8%
| ESTIMATED CONSTRUCTION COST: | ||
|---|---|---|
| AMOT'S SHARE |
570 M
NIS
(10KM FROM CENTRAL TEL-AVIV)
NB
PROJECTS UNDER CONSTRUCTION
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IN ADDITION THERE IS AN OFFICE BUILDING WITH AN AREA OF APPROXIMATELY 9 THOUSAND SQUARE METERS (100%) ,UNDER CONSTRUCTION.
STATUS LEASED TO
SHUFERSAL LTD
EXPECTED YOC 8%
ESTIMATED CONSTRUCTION COST: 100%
320 M NIS
100%
NB
| ⊣⊦ | |
|---|---|
| L | |
PROJECTS UNDER CONSTRUCTION
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MENT
PREEMINENT DEVELOPER WITH ROBUST PIPELINE
| LOCATION | BNEI BRAK (6KM FROM CENTRAL TEL-AVIV) |
|---|---|
| MAIN USE | OFFICES |
| AMOT'S SHARE | 50% |
| GLA 100% |
82,000 SQM |
| EXPECTED COMPLETION |
2024 |
| ESTIMATED CONSTRUCTION COST: 100% |
1,234 M NIS |
| EXPECTED YOC | 8% |
ROBUST DEVELOPMENT PIPELINE
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VELOP
MENT
| $\overline{\phantom{000000000000000000000000000000000000$ |
|---|
| ⊢ |
| and the project |
| --- |
CONCENTRATION OF DATA ON PROJECTS IN THE PLANNING AND INITIATION STAGES
PROJECTS IN THE PLANNING AND INITIATION STAGES
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AMOT'S SHARE 50%
GLA 140,000 100%
ESTIMATED CONSTRUCTION COST:
2,000 M NIS
100%
A SIGNATURE SKYSCRAPER IN THE CENTRE OF TEL AVIV ACCORDING TO T"A\5000, THE LOCAL
COMMITTEE APPROVED FOR DEPOSIT,
BUILDING RIGHTS FOR THE CONSTRUCTION
OF ANOTHER OFFICE TOWER
ADDITIONAL RIGHTS:
LOCATION TEL AVIV
METROPOLIS
| THE CONSTRUCTION COST DOES NOT INCLUDE |
|---|
| TENANTS IMPROVEMENTS AND CAPITALIZATION OF |
| COSTS. |
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VELOP
MENT
PREEMINENT DEVELOPER WITH ROBUST PIPELINE
| $\rightarrow$ ⊢ |
|---|
| × |
1,100 M NIS
| LOCATION | JERUSALEM (66KM FROM CENTRAL TEL-AVIV) |
|---|---|
| MAIN USE | OFFICES |
| AMOT'S SHARE | 50% |
| GLA (*) 100% |
103,000 SQM |
| EXPECTED COMPLETION |
TBD |
(*) GLA IS PURSUANT TO AN URBAN CONSTRUCTION PLAN THAT IS ABOUT TO BE DEPOSITED .APPROXIMATELY 79 THOUSAND SQUARE METERS ABOVE GROUND, PURSUANT TO AN URBAN CONSTRUCTION PLAN THAT IS IN EFFECT (100%)
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FIN
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CIAL
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SUPERIOR 37 FINANCIAL RETURNS
ROBUST FFO PER SHARE GROWTH OVER TIME HAS SUPPORTED A RAPIDLY INCREASING DIVIDEND (NIS)
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NOT INCLUDING DISTRIBUTION OF SPECIAL DIVIDENDS
DIVIDEND PAYOUT RATIO
NOT INCLUDING DISTRIBUTION OF SPECIAL DIVIDENDS
SUPERIOR 38 FINANCIAL RETURNS
STRONG BALANCE SHEET WITH CONSERVATIVE LEVERAGE POSITION
INVESTOR PRESENTATION
EFFECTIVE LEVERAGE RATIO OF 43%.
THE COMPANY'S BONDS ARE RATED ILAA/STABLE BY S&P (MAALOT) AND ILAa2/STABLE BY MOODY'S (MIDROOG) (ISRAELI SCALE).
ALL OF THE COMPANY'S ASSETS ARE UNPLEDGED EXCEPT FOR ASSETS VALUED AT 2% WHICH ARE HELD WITH PARTNERS.
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WEIGHTED EFFECTIVE CPI LINKED INTEREST 1.93%.
CURRENT DEBT RAISING COST, BASED ON AMOT'S BOND SERIES 8, DURATION 9 YEARS 1%. AS OF 7 MARCH 2021.
AVERAGE DURATION OF DEBT 4.9 YEARS.
CREDIT FACILITIES IN THE AMOUNT OF 1,080 MILLION NIS.
CASH AND CASH EQUIVALENTS IN THE AMOUNT OF 1,000 MILLION NIS (AS OF 7 MARCH, 2021).
SUPERIOR 39 FINANCIAL RETURNS
AMOT HAS A STRONG AND SOLID INCOME STREAM DUE TO ITS DIVERSIFIED PORTFOLIO AND STRONG TENANTS BASE.
TRACK RECORD OF DELIVERING A RELIABLE FORECAST FOR SHAREHOLDERS
INVESTOR PRESENTATION
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CONCLUSION
PORTFOLIO FOCUSSED ON GREATER TEL AVIV REGION, ISRAEL'S GROWTH ENGINE. PORTFOLIO ONLY IN ISRAEL.
IMPRESSIVE PORTFOLIO OF PROPERTIES FOCUSSED ON OFFICES LOCATED IN PRIME LOCATIONS.
ATTRACTIVE ISRAELI ECONOMIC ENVIRONMENT COUPLED WITH STRONG REAL ESTATE FUNDAMENTALS. 1
STRONG DEMAND FROM A DIVERSE SET OF INTERNATIONAL AND LOCAL TENANTS.
PREEMINENT DEVELOPER WITH A ROBUST PIPELINE
TOP-RATED FINANCIAL POSITION.
PROVEN TRACK RECORD OF DELIVERING
QUARTERLY DIVIDEND DISTRIBUTION ACCORDING
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ADDITIONAL MATERIALS
| ITEM | UK | US | ISRAEL |
|---|---|---|---|
| LEASE TERM | • 10-15 years |
• 5-10 years |
• c. 5 years + tenant option • Larger spaces leased for c.10 years |
| RENT QUOTE | • Per square foot per annum |
• Per square foot per annum |
• Per square metre per month |
| RENT MECHANISM |
• Rent review, generally every five years (rent remains flat in intervening period) –New rent established with reference to lease transactions in comparable property –Process conducted by independent surveyor • Rent review is generally upwards only • 1-2 rent reviews per lease |
• Built-in rent increases –Fixed uplift –Variable uplift (inflation indexed) • Post lease expiration, rent renegotiated with tenant –Passing rent level and structure of rental uplifts |
• CPI-linked; upwards only (on initial base rent) • Post lease expiration, rent renegotiated with tenant • Tenant option at additional rent (pre-agreed at signing of initial lease) |
| RENEWAL RIGHTS |
• Statutory right of renewal under the terms of original lease (unless lease carved out of statute) |
• No tenant right to remain in the property unless a specific lease-extension right negotiated and signed |
• No tenant right to remain in the property unless a specific lease-extension right negotiated and signed |
| PROPERTY EXPENSES |
• Leases are generally Fully Repairing and Insuring ("FRI") –Building maintenance, insurance and most capital expenditure borne by the tenant –Some of the costs (e.g., utilities, council tax) are paid by the tenant directly while others are paid indirectly (paid by the landlord and reimbursed by the tenant through a service charge) • Void costs are therefore more substantial for UK landlords and include: –Loss of rent; unreimbursed service charges –Empty rates (property taxes) |
• Unless triple-net lease, landlord generally responsible for all ongoing management costs of the building, including: –Utilities –Insurance –Property tax –Maintenance capex |
• Tenant responsible for almost all costs –Utilities –Property tax –Maintenance capex –Insurance |
| BUILDING CONDITION |
• Strict requirement for tenant to return the space to its original condition after allowing for reasonable wear and tear |
• Less strict requirement |
• Strict requirement for tenant to return the space to its original condition after allowing for reasonable wear and tear |
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ADDITIONAL 43 MATERIALS
APPENDIX
I N ADDITION, THE COMPANY WORKS ACTIVELY TO MAINTAIN A HIGH STANDARD OF MAINTENANCE ACROSS ITS PORTFOLIO TO REDUCE WATER AND ELECTRICITY USAGE IN ITS BUILDINGS .
A, AMOT S TWO MOST RECENTLY COMPLETED
S ASSETS HAVE BEEN MADE ACCESSIBLE FOR PEOPLE WITH
The information included in this presentation is a summary only and does not exhaust all of the information on the Company and its business, nor is it a substitute for inspection of the Periodic Report for 2020, and the presentations released thereby, as reported to the ISA via the Magna distribution site.
The presentation does not constitute an offer or an invitation to purchase the Company's securities, and its contents do not constitute a recommendation or opinion or a substitute for the investor's discretion.
This presentation includes forecasts, valuations, estimates, and other information relating to future events and/or matters, the realization of which is not certain and is not under the Company's control, and is forward-looking information, as defined in the Securities Law, 1968. Such information may not be realized, in whole or in part, or may be realized in a manner significantly different than expected. Such information includes, inter alia, income forecasts, FFO and NOI, and timetables.
Forward-looking information is based solely on the subjective evaluation of the Company, based on facts and data regarding the current state of the Company's business and macro-economic facts and data, all as known to the Company at the time of preparing this presentation. The realization or non-realization of the forward-looking information will be affected, inter alia, by factors that cannot be assessed in advance and which are not under the Company's control. The Company does not undertake to update and/or change any such forecast and/or assessment in order to reflect events and/or circumstances that may occur after the date of preparation of this presentation.
This presentation includes figures that are based on external sources and various surveys and studies. The Company is not responsible for the veracity or content thereof, nor for forecasts in respect thereof.
The financial information in the presentation which is attributed to the extended consolidated statements is neither audited nor reviewed by the Company's auditors.
The information included in this presentation is similar to the information included in the reports and/or immediate reports of the Company and does not include new material information. However, some of the data included in the presentation are presented in a different manner and/or breakdown and/or are differently edited. In any event of inconsistency between the reports and/or immediate reports of the Company released to the public and the information contained in this presentation, the information released to the public as aforesaid shall prevail.
All numbers and figures are approximate.
ONE OF THE LARGEST PUBLIC-TRADED COMPANIES, DEVELOPERS, OWNERS AND MANAGERS OF OFFICE, RETAIL AND LOGISTIC REAL ESTATE IN ISRAEL
AMOT ATRIUM TOWER 2 JABOTINSKY STREET, RAMAT GAN ISRAEL 5250501
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