Investor Presentation • May 17, 2021
Investor Presentation
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De conformidad con lo establecido en el artículo 227 del texto refundido de la Ley del Mercado de Valores aprobado por el Real Decreto Legislativo 4/2015, de 23 de octubre, Inmobiliaria Colonial, SOCIMI, S.A. ("Colonial" o la "Sociedad") comunica la siguiente
Como continuación a la comunicación de información relevante publicada con fecha 12 de mayo de 2021 con número de registro 9372, Colonial remite documentación de soporte a la presentación a analistas e inversores relativa a los resultados correspondientes al primer trimestre de 2021, que se celebrará hoy lunes día 17 de mayo de 2021 a las 18:30 horas (CET) a través de un webcast.
Los datos de conexión a la conferencia se detallan a continuación:
Desde España: +34911140101 + PIN Code: 42185988# Desde Francia: +33170710159 + PIN Code: 42185988# Desde Holanda: +31207095119 + PIN Code: 42185988# Desde el Reino Unido: +442071943759 + PIN Code: 42185988# Desde USA: +1 6467224916 + PIN Code: 42185988#
La presentación online será visible a través del siguiente link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=3BD0312C-14D8-4A3F-8E05-1D4649F874EF
Adicionalmente, la presentación de resultados estará disponible en la página web de la Sociedad.
En Madrid, a 17 de mayo de 2021.
First Quarter Results 2021
May 17th, 2021
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This document is strictly confidential and is being furnished to you solely for your information. It may not be reproduced, or redistributed to any other person, and it may not be published, in whole or in part, for any purpose.
The information contained in this presentation ("Presentation") has been prepared by Inmobiliaria Colonial, SOCIMI S.A. (the "Company") and has not been independently verified and will not be updated. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein and nothing in this Presentation is, or shall be relied upon as, a promise or representation. None of the Company nor any of its employees, officers, directors, advisers, representatives, agents or affiliates shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with this Presentation.
This Presentation is for information purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by the Company and the Company's publicly available information. The information and opinions in this presentation are provided as at the date hereof and subject to change without notice. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company's financial or trading position or prospects.
This Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Company. You are solely responsible for seeking independent professional advice in relation to the Company. No responsibility or liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates on the basis of such information.
This Presentation contains financial information regarding the businesses and assets of the Company. Such financial information may not have been audited, reviewed or verified by any independent accounting firm. The inclusion of such financial information in this Presentation or any related presentation should not be regarded as a representation or warranty by the Company, its affiliates, advisors or representatives or any other person as to the accuracy or completeness of such information's portrayal of the financial condition or results of operations by the Company and should not be relied upon when making an investment decision. . Certain financial and statistical information in this document has been subject to rounding off adjustments. Accordingly, the sum of certain data may not conform to the expressed total.
Certain statements in this Presentation are forward-looking. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, changing economic, business or other market conditions, changing political conditions and the prospects for growth anticipated by the Company's management. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this Presentation and based upon past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The market and industry data and forecasts included in this Presentation were obtained from internal surveys, estimates, experts and studies, where appropriate as well as external market research, publicly available information and industry publications. The Company, it affiliates, directors, officers, advisors and employees have not independently verified the accuracy of any such market and industry data and forecasts and make no representations or warranties in relation thereto. Such data and forecasts are included herein for information purposes only. Accordingly, undue reliance should not be placed on any of the industry or market data contained in this Presentation.
NEITHER THIS DOCUMENT NOR ANY OF THE INFORMATION CONTAINED HEREIN CONSTITUTES AN OFFER OF PURCHASE, SALE OR EXCHANGE, NOR A REQUEST FOR AN OFFER OF PURCHASE, SALE OR EXCHANGE OF SECURITIES, OR ANY ADVICE OR RECOMMENDATION WITH RESPECT TO SUCH SECURITIES.
Pere Viñolas Chief Executive Officer
Carmina Ganyet Corporate Managing Director
Carlos Krohmer Chief Corporate Development Officer
Starting 2021 with solid like for like performance
Starting 2021 with solid like for like performance
Recurring EPS of €5.6cts/share, lower than the previous year
YoY decrease manly due to disposals & renovation program acceleration
Comparable recurring EPS of €7.2cts/share in line with the previous year
Gross Rental Income of €78m, +0.6% like-for-like
Net Rental Income of €68m, +4.0% like-for-like (Paris +6% like for like)
Collection rates of 100% in offices
Letting volume of 29,759 sqm, +1.2x vs. the previous year
Office occupancy levels of 95% (97% in Madrid)
Capturing rental price increases
Completion of the disposal program with double digit premium on GAV
A strengthened Balance Sheet
Starting 2021 with solid like for like performance
Reduction in carbon footprint (51%) "like-for-like" (12/20 vs 12/19)
Reduction in carbon footprint of (77%) "like-for-like" since base year 2015
Fulfilment in 2020 of the 2030 target acceleration in net zero transition
Project Pipeline with significant value creation potential
Renovation Program with more than €30m in GRI reversion
Opportunistic acquisitions
Scarce supply of Grade A product in CBD
Investment markets solid for Prime CBD assets
EPS Guidance 2021 & 2022
Dividend proposal: 22 €cts per share, +10% YoY
Starting 2021 with solid like for like performance
EPS decrease due to disposals & renovation program acceleration
Comparable EPS in line with previous year
Net Rental Income with +4% like for like growth
| Profit & Loss - €m |
03/21 | YoY Var |
|---|---|---|
| Recurring Net Profit | €28m | (8€m) |
| Recurring EPS | 5.6 €Cts/share | (22%) |
| Comparable Recurring EPS | 7.2 €Cts/share | +1% |
| Outstanding GRI like for like | 03/21 | YoY Var |
| Group like-for-like1 | €78m | +0.6% |
| Offices Like-for-Like1 & 2 | €75m | (0.6%) |
| Barcelona like-for-like1 | (0.8%) | |
| Madrid like-for-like1 | (1%) | |
| Paris like-for-like1 | (0.3%) | |
| Outstanding NRI like for like | 03/21 | YoY Var |
| Group like-for-like1 | €68m | +4% |
| Offices Like-for-Like1 & 2 | €65m | +2% |
| Barcelona like-for-like1 | (3%) | |
| Madrid like-for-like1 | +4% | |
| Paris like-for-like1 | +2% |
| Solid Fundamentals | 03/21 |
|---|---|
| EPRA Vacancy | 4.8% |
| Office Collection Rate Q1 21 | 100% |
| Total Collection Rate Q1 21 | 98% |
| Volume of sq m signed |
29,759 |
| # transactions signed | 25 |
| Double-digit release Spread3 | +20% |
|---|---|
| Barcelona | +21% |
| Madrid | +18% |
| Paris | +7% |
| Sustained rental growth4 | +3% |
| Barcelona | +0.5% |
| Madrid | +3% |
| Paris | +11% |
(1) EPRA like-for-like variance based on EPRA BPR methodology
(2) Office portfolio + Prime retail of Galeries Champs Elysées and DAU Pedralbes
(3) Rental prices signed vs previous rents
(4) Rental prices signed vs ERV 12/20
Scarcity in Prime Product
Rental Markets - Scarcity of High Quality Product in CBD
Grade A stock in CBD remains very low in every city
Grade A availability in Paris below 1%
Grade A availability in Barcelona & Paris at 19,000 sqm each and in Madrid at 65,000 sqm
Source: Cushman & Wakefield
22@ attracting investments focused on grade A assets
International investors entering the market
Prime yield at 3.60%, with very healthy spread of 326bp vs reference rate
Healthy spread of 301 bp above 10-year average of 200 bp
Investors with strong liquidity for prime yielding assets
Prime yield at 3.35%
Spread at historical highs, 255 bp vs reference rate
Prime Yield resilient at 2.50%
Increased polarization between Prime and Secondary values
(1) Market consultants in Spain report gross yields and in France they report net yields 10 year Bond as of 31 December 2020
High quality CBD portfolio with superior performance
(2) Signed rents vs 12/19 ERV (new lettings & renewals) (3) Maturity until expiry of the contract
(4) Financial vacancy calculated according to EPRA methodology – Office Portfolio
Colonial with strong letting activity, +1.2x on previous year
Letting activity focused on CBD with high Energy Certificates
Solid mix between renewals and new lets
Releases Spreads remain at double digit levels
Barcelona with +21% and Madrid with +18% release spread
Signed Prices +3% above ERVs, Paris with outstanding +11% vs ERV
(2) Signed rents 2020 vs 12/19 ERV and signed rents 2021 vs 12/20 ERV (new lettings & renewals)
Full refurbishment increasing floors lay-out efficiency
Leed Gold certified, reducing carbon footprint
New AAA tenant signing passing rent above initial target
Increased cost efficiency ratio with triple net contracts
10-year contract at record prices
+50% vs rent pre project
Maximum ERV in Barcelona market
Acq. Status New Contract
Renovation Program of more than 5,700 sqm during 2020
7eme arrondissement attracting large demands in city centre
Increased efficiency thanks to new lay-outs
23% of the renovation program let YTD
+15% vs rent pre project
ERV at high end of the Paris 7ieme market
Pre Renov. New Contracts
Vacancy at very healthy levels in every segment
Office portfolio vacancy stable QoQ at a healthy 4.7% level
Madrid with a vacancy of 2.6%
Paris at 3.8% excluding 103 Grenelle entry into operation
EPRA VACANCY
Occupancy stability in the portfolio
Total vacancy remains stable at levels of 4.8%
2.4% vacancy due to entries into operation and residual secondary exposure
CBD assets almost fully let
EPRA VACANCY
Solid financials underpinned by high quality assets
Top line stable in like for like terms
Gross Rental Income +0.6% like for like
Office portfolio GRI (0.6%) like for like
Paris with positive like for like (flat in offices and positive effect from Hotel Indigo reopening)
1) Like-for-like calculated following EPRA BPR recommendations
2) Office Portfolio including Retail Prime CBD of Galeries des Champs Elysées and Pedralbes Cente
3) Logistic Portfolio, Axiare Retail Secondary and Hotel Indigo in Paris
Like-for-like rental growth price driven
Like-for-like variance slightly negative due to volume effect
Group rental price like for like variance at +1%
Barcelona with outstanding rental price like for like of +2.6%
1 Like-for-like variance calculation based on EPRA best practice methodology 2 Office portfolio + Prime retail in Champs Elysées and Pedralbes Centre
Net Rental Income at +4% like for like
Net Rental Income +4% like for like
Paris with +6% Net Rental Income
Office portfolio with +2% Net Rental Income (Madrid +4% Net Rental Income)
NET RENTAL INCOME – LIKE-FOR-LIKE OF +4%
Madrid with an important increase of Net Rental
Income of +4% like-for-like
Paris total portfolio with a significant increase of +6%
like-for-like in Net Rental Income
1 Like-for-like variance calculation based on EPRA best practice methodology 2 Office portfolio + Prime retail of Galeries Champs Elysées and Dau Pedralbes
Capital recycling with flight to quality
Strengthened balance sheet LTV post disposals below 35%
Significant Net debt reduction thanks to cash generation through disposals
Highest Corporate Rating in Spanish Real Estate
S&P has confirmed its BBB+ rating for Colonial
Strengthened capital structure with 34.9% LTV after finalisation of the divestment program
Liquidity of €2,406m as of Q1 2021, an increase of more than €500m year on year
Solid collateral of Prime Core Product
(1) GAV 12/20 Office portfolio. Barcelona CBD, includes the assets in the 22@ market segment (2) GAV 12/20 Office portfolio in operation
stable
23
Comparable EPS stable – flight to quality & reloading growth
Comparable EPS in-line with previous year
EPS decrease mainly due to disposals and acceleration of renovation program
Disposals of non-core: reloading growth through capital recycling
Significant reduction of the carbon footprint YoY (51%) like for like
Barcelona and Madrid outstanding
Acceleration of Net Zero transition
Carbon footprint reduction (77%) vs 2015 baseline year
Carbon intensity Scope 1&2 of 7 KgCo2e/sqm, among the lowest levels in Europe
Acceleration of Net Zero transition
Carbon footprint reduction (77%) vs 2015 baseline year
2030 Group Target achieved ahead of timing
Acceleration of path towards net zero emissions
(Carbon Intensity Scope 1&2 -2015-20 like for like office portfolio in operation)
Target of 2030 Carbon Reduction achieve ahead of timing
Acceleration of path towards net zero emissions
Objective of Carbon Neutrality in 2050
Adherence to the Science Based Target Initiative (SBTi)
CDP Score at A- confirming decarbonization leadership.
Scoring well above Europe regional average and Financial services sector
Strong YoY momentum (increase up to A- coming from C)
Superior growth & returns through prime positioning
✓ Project Pipeline with solid value creation potential 1
✓ Renovation Program with strong reversion
✓ Prime Contract Portfolio to capture rental growth 3
✓ Prime Portfolio in solid Investment Markets
✓ Reloading growth through capital recycling
Project pipeline – significant GRI reversion to come 1
Prime Project pipeline delivery on track
Around €80m of additional rents to flow into the recurring P/L
YTD more than €27m of secured rents through solid pre-let performance
| Project | City | % Group Delivery | GLA (sqm) |
1 Total Cost €m |
Yield on Cost |
|||
|---|---|---|---|---|---|---|---|---|
| months | 1 | Diagonal 525 | Barcelona CBD | 100% | Delivered | 5.706 | 41 | ≈ 5% |
| 2 | Miguel Angel 23 | Madrid CBD | 100% | 2H 21 | 8.204 | 66 | 5- 6% | |
| <12 | 3 | 83 Marceau | Paris CBD | 82% | 2H 21 | 9.600 | 154 5.5- 6.0% | |
| 4 | Velazquez 88 | Madrid CBD | 100% | 2H 21 | 16.164 | 116 | 6- 7% | |
| 5 | Biome | Paris City Center | 82% | 2H 22 | 24.500 | 283 | ≈ 5% | |
| months >12 |
6 | Plaza Europa 34 | Barcelona | 50% | 2H 22 | 14.306 | 42 | ≈ 7% |
| 7 | Sagasta 27 | Madrid CBD | 100% | 2H 22 | 4.896 | 23 | 6- 7% | |
| 8 | Mendez Alvaro Campus | Madrid CBD South | 100% | 2023 | 89.872 | 323 | 7- 8% | |
| 9 | Louvré SaintHonoré | Paris CBD | 82% | 2024 | 16.000 | 215 | 7- 8% | |
| TOTAL PIPELINE | 189.248 | 1.264 | 6- 7% | |||||
| 1 | Total Cost Finished Product = Acquisition Cost/ Asset Value pre Project + future Capex |
GRI3 Path to reversion - €m 27 52 79 Secured YTD Rest of Pipeline Static potential CPI / Growth Dynamic Potential
| Pending Capex2 - €m |
|||||
|---|---|---|---|---|---|
| 2021 to go | 145 - 150 |
||||
| 2022 | 136 - 140 |
||||
| 2023 | 86 - 95 |
||||
| Total Pending Capex | 367 - 385 |
||||
| Thereof Spain | 202 - 212 |
||||
| Thereof France | 165 - 173 |
||||
1 Total Cost Finished Product= Acquisition Cost/Asset Value pre Project + total Capex to be invested
2 Pending Capex as of 30/03/21
3Topped-Up passing GRI
Project pipeline – solid value creation potential 1
Prime Project pipeline delivery on track
4 out of 9 projects to be delivered during 2021
Significant capital value creation potential to be crystalized
| Project | City | % Group Delivery | GLA (sqm) |
1 Total Cost €m |
Yield on Cost |
|||
|---|---|---|---|---|---|---|---|---|
| months | 1 | Diagonal 525 | Barcelona CBD | 100% | Delivered | 5.706 | 41 | ≈ 5% |
| 2 | Miguel Angel 23 | Madrid CBD | 100% | 2H 21 | 8.204 | 66 | 5- 6% | |
| <12 | 3 | 83 Marceau | Paris CBD | 82% | 2H 21 | 9.600 | 154 5.5- 6.0% | |
| 4 | Velazquez 88 | Madrid CBD | 100% | 2H 21 | 16.164 | 116 | 6- 7% | |
| 5 | Biome | Paris City Center | 82% | 2H 22 | 24.500 | 283 | ≈ 5% | |
| months >12 |
6 | Plaza Europa 34 | Barcelona | 50% | 2H 22 | 14.306 | 42 | ≈ 7% |
| 7 | Sagasta 27 | Madrid CBD | 100% | 2H 22 | 4.896 | 23 | 6- 7% | |
| 8 | Mendez Alvaro Campus | Madrid CBD South | 100% | 2023 | 89.872 | 323 | 7- 8% | |
| 9 | Louvré SaintHonoré | Paris CBD | 82% | 2024 | 16.000 | 215 | 7- 8% | |
| TOTAL PIPELINE | 189.248 | 1.264 | 6- 7% | |||||
| 1 Total Cost Finished Product = Acquisition Cost/ Asset Value pre Project + future Capex |
1
Significant value creation potential
Delivery well balanced
1 Total Cost Finished Product= Acquisition Cost/Asset Value pre Project + total Capex to be invested
2 GAV 12/20 + Pending Capex as of 31/12/20
3 Stabilized Rent capitalized at estimated exit yield
Current Program of more than 100,000 sqm
€920m of current value with upside potential
Strong reversionary potential on GRI and Capital Value
105,000 sqm of GLA & €920m GAV 12/20 Renovation Program with circa €60m capex
Ongoing delivery of high release spreads
Contract Portfolio under-rented
Reversion as solid growth driver in cash flow
Strong delivery 2021 YTD
REVERSION IN PRIME PREMISES
ENHANCED THROUGH
Colonial portfolio with additional potential for yield compression
Prime market yields & scarcity value as driver
Prime Yields at very attractive spreads compared to reference rates
(1) Market consultants in Spain report gross yields and in France they report net yields (2) Portfolio in operation (3) According to JLL
Ongoing flight to quality through active portfolio management
Disposals of more than €1.8bn of mature and/ or non-core product
Acquisitions of more than €2.9bn of assets reloading the Prime Exposure
Prime Project Pipeline with significant value creation potential
Renovation Program with more than €30m in GRI reversion
Opportunistic acquisitions going forward
Comparable recurring EPS of €7.2cts/share in line with the previous year
Net Rental Income of €68m, +4.0% like-for-like (Paris +6% like for like)
Letting volume of 29,759 sqm, +1.2x vs. the previous year
Office occupancy levels of 95% (97% in Madrid)
Solid rental price increases with double digit release spreads
Completion of the disposal program with double digit premium on GAV
A strengthened Balance Sheet
Project Pipeline & Acceleration of Renovation Program
Opportunistic acquisitions going forward
Scarce supply of Grade A product in CBD
Investment markets solid for Prime CBD assets
EPS Guidance 2021 & 2022
Dividend proposal: 22 €cts per share, +10% YoY
The IMF updated its GDP projections per country as of April 2021
Spain and France with the highest GDP growth for 2021/22 among OCDE countries
2021 as good entry point for playing the recovery cycle in Spain and France
Rental market still with low levels of take-up
Scarcity in Grade A remains Prime rents stable
Secondary markets with some correction on rents
Investment markets for prime product remain active
Paris CBD remains an attractive target for Investors
Pricing above appraisals for Core CBD
Spain still with low lever of activity
Investor appetite with increased positive momentum for Prime
| D RI D A M |
Titán 8 (1Q 2021) |
City Center Mendez Alvaro |
€60m | 10,600 sqm | €5,660/sqm |
|---|---|---|---|---|---|
| Francisco Gervás, 10 (1Q 2021) |
CBD | €70m | 8,000 sqm | €8,750/sqm | |
| Principe de Vergara 108 (1Q 2021) |
City Center | €50m | 7,143 sqm | €7,000/sqm | |
| Av Bruselas 38 (4Q 2020) |
Madrid Secondary | confidential | 11,697 sqm | 1.8x Value creation |
|
| A N O L E C R A B |
177 Almogavers (3Q 2020) |
22@ | €50m | 8,500 sqm | €5,880/sqm |
| Berlin/Numancia (3Q 2020) |
Barcelona-BD | confidential | 12,800 sqm | 1.7x Value creation |
|
| Plaza Europa 40 (3Q 2020) |
Plaza Europa | confidential | 4,800 sqm | 1.7x Value creation |
|
| Cristobal de Moura (3Q 2020) |
22@ | na | 30,770 sqm | Hines leading the Project |
Source: public information, press and consultants
COVID 19 – Strong Q4 Collection rates
100% Group Offices in Q1 21
100% Paris & Barcelona Offices in Q1 21
98% Group Offices in Q1 21
Diagonal 409
Amigó 11-17
Génova 17
Diagonal 609
+34% +27%
José Abascal, 56
Génova, 17
Recoletos, 27
Washington Plaza
(1) Signed rents vs previous contracts (renewals)
(2) Signed rents vs 12/20 ERV (new lettings & renewals)
1Q 21 clients with 6 years of loyalty, half of them in Madrid
% on annualized 12/20 Group GRI1
Long-term financing profile with extended debt maturities
€2.4Bn of liquidity covering debt maturities until 2024
A solid financial structure with competitive financing costs
| 31/12/2019 | 31/12/2020 | 31/03/2021 | |
|---|---|---|---|
| Net Debt |
€4,609m | €4,582m | €4,315m |
| LTV | 36.1% | 36.2% | 34.9% |
A Solid Financial Structure
| Drawn Facilities |
€0m |
|---|---|
| Unutilized Facilities |
€2,040m |
| Total Facilities |
€2,040m |
| Cash | €366m |
| Liquidity | €2,406m |
| Debt Maturity Group |
5.0 years |
|---|---|
| Non-Mortgage debt |
94% |
| Cost of Debt Group |
1.77% |
EPS decrease mainly due to disposals and acceleration of renovation program
Comparable EPS in-line with previous year
Disposals of non-core reloading growth through capital recycling
| Recurring Earnings - €m |
28 | 36 |
|---|---|---|
| Nosh (mm) EPS recurring - Cts€/share |
508 5.59 |
508 7.17 |
© Colonial
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