6M2019 RESULTS PRESENTATION - 31 July 2019 - Merlin Properties
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
6M2019 RESULTS PRESENTATION 31 July 2019
DISCLAIMER
This presentation has been prepared by Certain statements in this document presentation in other jurisdictions may RELIED ON IN CONNECTION WITH ANY
MERLÍN Properties, SOCIMI, S.A. (the regarding the market and competitive also be restricted by law and persons CONTRACT OR COMMITMENT TO SELL
Company) for informational use only. position data may be based on the into whose possession this presentation OR PURCHASE SHARES. ANY DECISION
internal analyses of the Company, comes should inform themselves about TO SELL OR PURCHASE SHARES IN ANY
The information contained in this
which involve certain assumptions and and observe any such restrictions. In OFFERING SHOULD BE MADE SOLELY
presentation does not purport to be
estimates. These internal analyses may particular, any offer that might result from ON THE BASIS OF PUBLICLY AVAILABLE
comprehensive or to contain all the
have not been verified by any independent the transaction herein escribed will not be INFORMATION.
information that a prospective purchaser
sources and there can be no assurance made, directly or indirectly, in the United
of securities of the Company may desire This presentation may include forward-
that the assumptions or estimates are States of America, or by use of mails, or by
or require in deciding whether or not to looking statements. These forward-
accurate. Additionally, certain information any means or instrumentality (including,
purchase such securities, and has not looking statements involve known and
in this presentation may be based on without limitation, facsimile transmission,
been verified by the Company or any unknown risks, uncertainties and other
management accounts and estimates of telephone and internet) of interstate or
other person. The information contained factors, which may cause such actual
the Company and may have not been foreign commerce of, or any facilities of
in this document is subject to change results, performance or achievements, or
audited or reviewed by the Company’s any national securities exchange of, the
without notice. Neither the Company industry results, to be materially different
auditors, whereas the information United States, Canada, Australia or Japan.
nor any of affiliates, advisors or agents from those expressed or implied by
on Metrovacesa S.A. and on certain The securities of the Company have not
makes any representation or warranty, these forward-looking statements. These
competitors contained herein is based been and, should there be an offering, will
express or implied, as to the accuracy forward-looking statements are based
on publicly available information which not be registered under the U.S. Securities
or completeness of any information on numerous assumptions regarding the
has not been verified by the Company. Act of 1933, as amended (the Securities
contained or referred to in this document. present and future business strategies
Accordingly, recipients should not place Act) and, subject to certain exceptions,
Each of the Company and its employees, of the Company and the environment in
undue reliance on this information. may not be offered or sold in the United
officers, directors, advisors, agents or which they expect to operate in the future.
States. The securities of the Company have
affiliates expressly disclaims any and all This information is provided to the Forward-looking statements speak only
not been and, should there be an offering,
liabilities whatsoever (in negligence or recipients for informational purposes as of the date of this presentation and the
will not be registered under the applicable
otherwise, whether direct or indirect, in only and recipients must undertake their Company expressly disclaim any obligation
securities laws of any state or jurisdiction
contract, tort or otherwise) for any loss own investigation of the Company. The or undertaking to release any update
of Canada or Japan and, subject to certain
howsoever arising from any use of this information providing herein is not to of, or revisions to, any forward-looking
exceptions, may not be offered or sold
presentation, the information contained be relied upon in substitution for the statements in this presentation, any
within Canada or Japan or to or for the
or referred to therein, any errors therein or recipient’s own exercise of independent change in their expectations or any change
benefit of any national, resident or citizen
omissions therefrom or otherwise arising judgment with regard to the operations, in events, conditions or circumstances on
of Canada or Japan.
in connection with this presentation. financial condition and prospects of the which these forward-looking statements
Neither the Company, nor any of its Company. THIS PRESENTATION DOES NOT are based.
affiliates, advisors or agents undertakes CONSTITUTE OR FORM PART OF ANY
Neither this presentation nor any copy In reviewing this presentation, the
any obligation to provide the recipients OFFER FOR SALE OR SOLICITATION OF
of it shall be taken, transmitted into, recipient is agreeing to, and accepting, the
with access to additional information or ANY OFFER TO BUY ANY SECURITIES IN
disclosed, diffused, send, published or foregoing restrictions and limitations.
to update this document or to correct any THE UNITED STATES OR IN ANY OTHER
inaccuracies in the information contained distributed in the United States, Canada, JURISDICTION, NOR SHALL IT OR ANY
or referred to therein. Australia or Japan. The distribution of this PART OF IT FORM THE BASIS OF OR BE
ı2ı
Contents
6M19 Financial results
ISMAEL
CLEMENTE Portfolio performance
CEO
Offices
Shopping centers
Logistics
MIGUEL
OLLERO
GM / COO
Valuation and debt position
Value creation
Closing remarks
DAVID
BRUSH
CIO
Key highlights |
Financial performance
• +8.0% Rents YoY
• +11.6% FFO per share YoY
• EPRA NAV per share up 7.5% YoY to reach € 15.11
• DPS guidance of € 0.52 per share reconfirmed
• TSR of 4.1% in the period (11.0% LTM)
Operating performance
• Rental growth very robust across the board
• Offices showing strength with 8.3% LfL rental growth
• Slight increase in occupancy of +37 bps (92.9%), being
shopping centers the top performer in the quarter (+184 bps)
Value creation
• 8,487 sqm signed in Torre Chamartin (+2,121 sqm option to
extend) reaching 83% occupancy (94% if option executed)
• Two large pre-lets achieved for Best II & III, including the
largest logistics lease ever signed in Spain (98,757 sqm with
Carrefour)
• Cabanillas Park I extension signed (92,994 sqm) to become
the largest logistics park in Madrid (314,867 sqm) and the
landmark area for national e-commerce distribution
ı4ı
6M19 Financial results
6M19 Financial results |
Strong cash flow generation (+11.6% in FFO per share YoY)
€ million 6M19 6M18 YoY
Gross rents 262.7 243.2 +8.0%
Gross rents after incentives 253.0 232.2 +9.0%
Net rents 228.2 210.7 +8.3%
EBITDA(1) 210.4 195.9 +7.4%
FFO 157.2 140.9 +11.6%
AFFO 151.6 136.1 +11.4%
IFRS net profit 262.0 479.7 (45.4%)
EPRA NAV 7,096.9 6,603.8 +7.5%
Includes Testa Residencial
(€ per share) extraordinary sale
FFO 0.33 0.30 +11.6%
AFFO 0.32 0.29 +11.4%
EPS 0.56 1.02 (45.4%)
EPRA NAV 15.11 14.06 +7.5%
Excludes non-overhead costs items (€ 1.6m) plus LTIP accrual (€ 22.1m)
(1)
ı6ı
6M19 Financial results | Bridge gross rents
Robust LfL growth in all asset categories with offices standing out at 8.3%
(€m) +8.3%
Offices
LfL(1)
Shopping centers +3.9%
+5.7%
Logistics +6.2%
H. Street retail +2.7%
+12.9 +6.6 262.7
243.2
6M 2018 Like-for-Like Balance acquisitions, 6M 2019
growth disposals and other
Portfolio in operation for 6M19 (€ 241.5m GRI) vs 6M18 (€ 228.6m GRI)
(1)
ı7ı
Offices
Offices | Rent bridge and breakdown
Offices performing strongly in our 3 markets
(€m)
LfL(1)
+8.3%
110.2 +8.8 +1.3 120.3
6M 2018 Like-for-Like Balance acquisitions, 6M 2019
growth disposals and other
Lfl growth by area Occupancy by area
1Q19 2Q19
Madrid +5.5% Madrid 88.3% 88.4%
+11 bps
Barcelona +20.4% Barcelona 94.0% 93.4%
(58 bps)
Lisbon +18.2% Lisbon 99.2% 100%
+78 bps
Voluntary vacancy
(1)
Offices portfolio in operation for the 6M19 (€ 115.3m GRI) and for the 6M18 (€ 106.5m GRI)
in D605 due to works
ı9ı
Offices | Leasing activity
Rental growth continues robust (+6.1% release spread)
Contracted sqm Release spread #contracts Tenants
Madrid 207,506 +5.0% 145 PE Cristalia PE Cerro Gamos PE Via Norte Partenon 16-18
2,120 sqm 6,582 sqm 3,853 sqm 1,127 sqm
Barcelona 30,553 +14.9% 35 Torre Glòries WTC6 Diagonal 605
1,128 sqm 1,128 sqm 1,128 sqm 862 sqm 764 sqm
Lisbon 7,920 +10.5% 17 Art Central Office
2,083 sqm 682 sqm
TOTAL 245,979 +6.1% 197
ı 10 ıShopping centers
Shopping Centers | Rent bridge and breakdown
Steady LfL rental growth in the porfolio. Footfall and sales rising in the period
(€m) LfL(1)
+3.9%
+12.1 61.1
47.2 +1.8
6M 2018 Like-for-Like Balance acquisitions, 6M 2019
growth disposals and other
Footfall (million) Tenant sales (million)
2018 LTM 107.8 2018 LTM 1,116.7
+0.1% +2.0%
2019 LTM 107.9 2019 LTM 1,139.6
(1)
Shopping centers portfolio in operation for the 6M19 (€ 47.7m GRI) and for the 6M18 (€ 45.9m GRI)
ı 12 ıShopping Centers | Leasing activity and occupancy
Meaningful increase in occupancy (+184 bps vs 3M19)
Release spread #contracts Tenants
All
portfolio +2.9% 153
Contracted Net Occupancy Change vs
sqm Absorption 30/06/19 31/03/19 (bps)
All
portfolio
51,405 5,994 92.6% +184
ı 13 ıLogistics
Logistics | Rents bridge and breakdown
Solid LfL growth driven by increase in rents
(€m)
LfL(1)
+6.2%
24.3 +1.3 +0.6 26.2
6M 2018 Like-for-Like growth Balance acquisitions, 6M 2019
disposals and other
LfL growth by location Occupancy by area
1Q19 2Q19
Madrid +7.7% Madrid 93.6% 94.1%
+50 bps
Barcelona +5.6% Barcelona 98.4% 96.5%
(191 bps)
Other +3.6% Other 98.4% 99.0%
+64 bps
Logistics portfolio in operation for 6M19 (€ 23.3m GRI) and for the 6M18 (€ 21.9m GRI)
(1)
ı 15 ıLogistics | Leasing activity
Rents continue growing in all markets (+5.0% release spread in the portfolio)
Contracted sqm Release spread #contracts Tenants
Madrid 59,424 +7.3% 5
Barcelona 5,583 +5.2% 5
Other 1,818 +0.7% 4
TOTAL 66,824 +5.0% 14
ı 16 ıLogistics | ZAL Port
Stock Investment
468,745 € 136m
WIP ERV
257,981 € 22m
Stock incl. WIP
726,726
Third parties stock
178,433
Stock under management
905,159
Contracted sqm Release spread #contracts Tenants
135,007 +3.1% 22
Occupancy by area
1Q19 98.2% +177 bps 2Q19 100%
€m 6M19 6M18 YoY
Gross rents 22.8 21.8 +4.3%
Net rents 22.5 21.5 +4.7%
EBITDA 21.5 20.3 +6.2%
FFO(1) 12.6 12.0 +4.6%
Net earnings 4.5 4.2 +9.2%
MERLIN attributed 2.2 2.0 +9.2%
ı 17 ı
After deducting leasehold concession charge
(1) Valuation and debt position
Valuation and debt position | GAV summary
Gross asset value approaching € 12.4bn
Passing
4.1% 5.3% 4.4% 5.9% - 4.5%
Gross yield 12,375
12,173
6,096
GAV
TOTAL with minority stakes
(€ million)
Shopping centers
High Street Retail
2,292 2,229
Minority stakes
Logistics
Offices
847
TOTAL
Other(1)
709
202
€/sqm AG 4,437 4,293 5,631 779 2,564
Source: Company ı 19 ı
(1)
Other includes WIP, hotels, non-core land and miscellaneousValuation and debt position | GAV bridge
(€m)
+2.8%
12,041.0 134.5 65.9 157.6 12,375.0
(24.1)
(€ million)
GAV Acquisitions Disposals Capex & WIP Revaluation(1) GAV
Dec 2018 6M19 6M19 6M19 6M19 Jun 2019
Source: Company
(1)
Including off-balance sheet revaluations ı 20 ıValuation and debt position | GAV drivers
+4.1%
AV
G
Like-for-Like
evolution(1)(1)
+1.9%
1.6%
+1.2% MERLIN
+0.4% average(1)
Offices Shopping centers High street retail Logistics
(45 bps)
17 bps
ield
Y (35 bps)
compression
/ (expansion)(1) 4 bps (28 bps)
2 bps
(24 bps) 2 bps
MERLIN
average (2)
MERLIN
(20 bps) average
Office (11 bps)
Shopping centers Logistics High street retail
Offices Shopping centers High street retail Logistics
(1)
Vs FY18
ı 21 ıValuation and debt position | Maturity profile
€ 1,550m ESG indexed financing has extended maturities…
1,820
720
1,077
(€ million)
17
867
716 17 776
16 176
850 1,100
700 850
15 14 600
8 7 13
210
1 2 14
2019 2020 2021 2022 2023 2024 2025 2026-2031
Unsecured loans Unsecured bonds Secured bank loans RCF
ı 22 ıValuation and debt position | Debt position
… and further reduced the cost of debt
(€ million) 30/06/2019 31/12/2018
Gross financial debt 5,292 5,413
Cash(1) (216) (509)
Net financial debt 5,076 4,904
(Metrics)
LTV 41.0% 40.7%
Average cost (spot) 2.04% (1.74%) 2.13% (1.84%)
Fixed interest rate 95.4% 96.3%
Average maturity (years) 6.0 5.9
Liquidity(2) (€ million) 706 634
Rating Outlook
BBB Positive
Baa2 Stable
Source: Company
(1)
Including cash, pending receivable of Testa Residencial and treasury stock
(2)
Including cash, pending receivable of Testa Residencial and treasury stock, and unused credit facilities ı 23 ıValue creation
Value creation | Acquisitions - Cabanillas Park I extension
I J Cabanillas
Park I
A B C extension
G H
F D E
Cabanillas
Park I
The project The market KPIs
• Development of 4 logistics modules, • A-2 corridor is the main logistics hub GLA 92,994 sqm
adjacent to Cabanillas Park I, with a in Spain, with a stock of ca. 5m sqm Total investment € 56.0m
total GLA of 92,994 sqm
• Most dynamic market in Spain, with a ERV € 3.9m
• MERLIN Cabanillas Park I + extension take-up of ca. 0.5m sqm per annum in Yield on cost 6.9%
(314,867 sqm GLA) will become the the last two years. Vacancy stands at
largest logistics park in Madrid 6% (obsolete product for 3PLs)
• Delivery in two phases: 2020 and 2021 • MERLIN is the predominant leader Clients in A-2
in the area, with a footprint upon full
development of 1.2m sqm and € 24m
of annual rents
ı 25 ıValue creation | Landmark I
Torre Glòries Torre Chamartin
• Full occupancy of office space after having signed 5,118 sqm • 9,067 sqm signed in the year (+ 2,121 sqm optioned) to reach 83%
in 2Q19 occupancy (94% if option executed). Deloitte will occupy 70% of
• World class observatory development signed with Mediapro. the space
To open by end-2020 • LOOM in the top floor and rooftop terrace to enjoy 360° stunning views
• LOOM flex space construction underway of Madrid, providing flex space solution to corporates of MERLIN Hub
• Direct access from A-1 progressing
GLA 37,614 sqm GLA 18,295 sqm
Total investment € 169.2m Total investment € 69.2m
Yield on cost 7.0% Yield on cost 6.7%
ı 26 ıValue creation | Flagship
Larios X-Madrid Tres Aguas
• Compelling achievements in leasing-up the • Preleasing activity has reached 92% and main • Anchor tenants upsizing and upscaling
refurbished additional space anchors secured units
• Primark will open its largest shop in a mall • Opening in October • Entertainment offer reinforced adding
in Spain (8,282 sqm) a new leisure area
• Upsizing Zara shop to 4,273 sqm
• Opening in October
GLA 41,460 sqm GLA 47,424 sqm GLA 67,690 sqm
48.0m (incl. units acquired) Cost € 45.7m (incl. land)
Cost € Cost € 20.2m
Yield on cost 6.4% Yield on cost 11.8% Yield on cost 15.1%
ı 27 ıValue creation | Best II & III
Largest logistics lease ever signed in Spain, with
Carrefour, for the entire lease-up (98,757 sqm)
The turn-key project, currently under construction,
will be delivered by the beginning of 2021
Carrefour will cover national distribution of
non-consumable goods from this core hub
GLA 98,757 sqm
GRI € 4.4m
YoC 8.1%
Guadalajara-Azuqueca II (Best II)
Turn key project let to Dachser upon delivery
in the most dynamic logistics hub of Valencia
Dachser will serve Leroy Merlin e-commerce
distribution in the Mediterranean corridor
Tailor made solution to clients of MERLIN, proving
the “top-of-mind” role of MERLIN in the Iberian
logistics arena
GLA 34,992 sqm
GRI € 1.9m
Valencia Ribarroja (Best III) YoC 7.4%
ı 28 ıClosing remarks
Closing remarks |
• Significant growth in cash flow generation, to reach €0.33 of FFO per share
Financial (+11.6% YoY)
• Steady growth in EPRA NAV per share (€ 15.11, +7.5% YoY)
performance • DPS guidance of € 0.52 per share reconfirmed
• LTV maintained at 41% LTV, with lower cost (2.0%) and extended maturities (6yr)
• Offices. Excellent growth in LfL rents and release spreads. Slight increase
in occupancy and +91% guidance for year end reconfirmed
Business • Shopping centers. Footfall and tenant sales rising as compared to previous
performance quarter. Meaningful increase in occupancy and steady growth in rents
• Logistics. Continues performing well, with compelling pre-leases signed
• Landmark I.
- Torre Chamartin has shown a strong leasing activity YTD
- Torre Glòries office space at full occupancy
Value •F
lagship
- Anchor tenants upsizing Larios and Tres Aguas shops on the back of the
creation refurb. Larios Primark will be the largest in a Spanish mall
- X-Madrid poised to open at full occupancy (92% pre-let)
• Best II & III
- Cabanillas Park I extension signed to become the largest logistics park
in Madrid
- Largest lease ever signed in Spain with Carrefour (98,757 sqm) plus Dachser
in Valencia-Ribarroja (34,992 sqm)
ı 30 ıPaseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
You can also read
