ANALYST PRESENTATION 1H 2018

Transcription

1 ANALYST PRESENTATION 1H 2018

2 ABOUT QRF CITY RETAIL BE-REIT in inner-city retail WE INVEST IN, (RE)DEVELOP AND RENT OUT PRIME RETAIL REAL ESTATE IN THE GOLDEN MILE OF BELGIAN AND DUTCH CITIES

3 > m² 51 retail properties > 280 MEUR fair value

4 : PERIOD OF STRONG PORTFOLIO EXPANSION & EPRA PERFORMANCE 2018: REBALANCING FOR FUTURE GROWTH

5 THE RETAIL MARKET To a new equilibrium

6 RETAIL IS IN FUNDAMENTAL TRANSITION BECAUSE OF Turnover evolution is less impacted by consumer confidence COMPETITION CONSUMER BEHAVIOR DEMOGRAPHIC EVOLUTION COMPETITION Retailers struggle with a profitable implementation of the combination of online and offline This leads to rental levels and occupancy rates being under downward pressure in Belgium, with Prime Yields for the high streets slowly increasing On the upside, the market in The Netherlands is slowly recovering Qrf City Retail focuses on rebalancing for future growth TECHNOLOGY POLITICAL UNCERTAINTY INFRASTRUCTURE WORKS

7 FAIR VALUE OF 281 MEUR SPREAD OVER BELGIUM & THE NETHERLANDS CONTRACTUAL RENTS OF MEUR KEY FIGURES H OCCUPANCY RATE OF 95.72% DEBT RATIO OF 54.34% EPRA earnings of 4,279 KEUR NAV per share of EUR (IFRS) EUR (EPRA)

8 H UPDATE In the first half of 2018, Qrf City Retail focused on the optimization of the existing portfolio and on divesting non-strategic properties. In this context, Qrf City Retail has recorded a stable EPRA earnings per share of 0.76 EUR.

9 REBALANCING FOR FUTURE GROWTH Based on 4 core anchor principles

10 FOCUS ON QUALITY Qrf City Retail focused on investments in prime retail premises in major cities combined with opportunistic divestments in non-strategic locations.

11 MAASMECHELEN GERAARDSBERGEN TEMSE BRUGGE (PERIPHERY) MERKSEM NET SELLING PRICE 9.5 MEUR DIVESTMENTS 10 MEUR SINCE IPO WITH A NET SELLING PRICE OF 7.7% ABOVE LATEST FAIR VALUE SINT-NIKLAAS 1H 2018 NET SELLING PRICE 0.7 MEUR 2H 2018 FURTHER DIVESTMENTS IN PIPELINE

12 ANTWERPEN AALST TONGEREN MECHELEN Antwerpen, Kammenstraat 34 Roof renovation Mechelen, Bruul Elevator renovation Tongeren, Maastrichterstraat Roof renovation Aalst, Nieuwstraat Cleaning of facade RENOVATION MAINTAINING AND INCREASING THE PORTFOLIO QUALITY AND ATTRACTIVENESS OOSTENDE BONCELLES Oostende, Adolf Buyl. 1A: Renewal of facade 1H 2018 Boncelles, R. de la Condroz: Renewal of roof ANTWERPEN HUY Antwerpen, C. Center: Escalators & HVAC 2H 2018 Huy, Shopping Mosan: Optimalization of traffic on site + construction new exit

13 NEWCOMERS RENEWALS ASSET MANAGEMENT AND DYNAMIC LEASING CSR/POP-UP Qrf succeeds in capturing newcomers and established players due to its dynamic leasing activity WITH AN OCCUPANCY RATE OF 95.72% QRF CITY RETAIL IS OUTPERFORMING THE BE / NL MARKET WHERE OCCUPANCY RATE IS ~ 90% to 93%

14 ASSET MANAGEMENT AND LEVERAGE ON SECTOR DIVERSIFCATION FASHION 60% FOOD 8% BEAUTYCARE 6%

15 2017: AALST - NIEUWSTRAAT PROJECT SUMMARY New connection of the ground floor unit with the basement unit (previously unavailable) Increase of 60% of the annual rental income (compared to the previous tenant MS Mode) REDEVELOPMENTS 8.0% Yield on investment (= 90 KEUR rental uplift / KEUR CAPEX) Status: finished : LEUVEN BONDGENOTENLAAN 58 PROJECT SUMMARY Retail & student housing Status: permit application process ongoing Timing:

16 BELGIUM 90% 10% THE NETHERLANDS KEY FOCUS OVER 70% OF THE PORTFOLIO LOCATED IN KEY STRATEGIC & PRIME CITIES

17 ANTWERP, KEYSERLEI ANTWERP, WIEGSTRAAT ANTWERP THE MAIN SHOPPING CITY OF BELGIUM ANTWERP, MEIR ANTWERP, WIEGSTRAAT 8 PRIME ASSETS ANTWERP, WAPPER 19.4% OF FAIR VALUE ANTWERP, KAMMENSTRAAT ANTWERP, SCHUTTERSHOFSTRAAT ANTWERP, SCHRIJNWERKERSSTRAAT

18 FINANCIALS Stable EPRA earnings but negative portfolio result

19 STABLE EPRA EARNINGS IN A CHALLENGING ENVIRONMENT P&L (in K EUR) 1H H 2017 diff. Net rental income % Property result (-) Property costs (-) General costs and other operating income and costs Operating result before result on the portfolio % Operating margin 77.4% 76.0% (-) Financial result (excl. changes in the Fair Value of non-effective hedging instruments) (-) Taxes (-) Minority interests EPRA earnings % Per share data (in EUR) 1H H 2017 diff. Weighted average number of shares % Net result - group share EPRA earnings per share %

20 STABLE EPRA EARNINGS IN A CHALLENGING ENVIRONMENT EPRA EARNINGS (EUR/share) EPRA EARNINGS (KEUR)

21 BUT A NEGATIVE PORTFOLIO RESULT IN 1H 2018 (-5.23 MEUR) RESULT ON DISPOSAL OF INVESTMENT PROPERTIES (+0.15 MEUR) CHANGES IN FAIR VALUE OF INVESTMENT PROPERTIES (-5.37 MEUR) BELGIUM -2.3% BELGIUM (i) Sale of Sint-Niklaas, Stationsstraat 39: MEUR (i) H&M related assets: MEUR (ii) Other BE: MEUR +0.6% THE NETHERLANDS (iii) Other NL: MEUR

22 H&M Results (in SEK m) H H H H H H H ABOUT H&M Total Sales (excl.vat) H&M is one of the biggest global fashion groups Cost of goods sold % of sales -42,6% -43,3% -45,1% -44,4% -45,3% -46,6% -46,8% Gross profit Gross profit margin 57,4% 56,7% 54,9% 55,6% 54,7% 53,4% 53,2% Selling expenses Approx. 20 billion EUR in sales and 1.6 billion EUR in net profit in FY 2017 H&M copes with the challenge of integrating offline and on-line shopping H&M is a profitable retailer, but profitability is stuck in a downward trend % of sales -39,0% -38,8% -39,9% -38,9% -40,1% -40,3% -41,8% Administrative expenses % of sales -3,4% -3,2% -3,7% -3,2% -3,6% -3,5% -4,0% EBIT EBIT margin 15,1% 14,7% 11,3% 13,4% 11,0% 9,6% 7,3% Net financial items H&M EXPOSURE H&M represents 16,5% of the total Contracual Rents on an annual basis H&M leases 5 retail units in the Qrf portfolio Taxes Net profit Profit margin 11,7% 11,4% 8,7% 10,6% 8,5% 7,7% 6,1% SINT-NIKLAAS AALST SINT-TRUIDEN 1.3% 5.8% 9.4% HASSELT UCCLE VACANT AS OF 31 AUGUST SECURED TILL FY 2021 IN RENEWAL PROCEDURE

23 BACKGROUND INFORMATION H&M PROCEDURE WHAT? H&M proposes turnover based lease After termination of the procedure before the justice of the peace, the followings options are open: Judgment determines conditions of the lease agreement between the parties Appeal against the judgment by (at least) one party Judgement in appeal determines the conditions of the lease agreement After a judgement in last instance, H&M can decide to waive its request for renewal of the lease *Duration of these procedures difficult to estimate: Parties can request expert reports (in order to assist the judge in determining market conformity of the rents) Possibilty of appeal against a judgment results in delays => Not excluded that the procedures remain ongoing after termination of contractually agreed rent period The procedures can be terminated as follows: Artcle 13 Law on Commercial Leases (Handelshuurwet): De huurder heeft het recht, bij voorkeur boven alle andere personen, de hernieuwing van zijn huurovereenkomst te verkrijgen om dezelfde handel voort te zetten, hetzij bij het verstrijken ervan, hetzij bij het verstrijken van de eerste of de tweede hernieuwing, voor een duur van negen jaar (...). STATUS Procedure pending before the justice of the peace (Vrederechter) - Hasselt: Hearing scheduled Q Ukkel: Hearing scheduled Q Indicative timings subject to procedural events* By mutual agreement between both parties Unilaterally by H&M by waiving its request for lease renewal

24 WHICH HAS AN IMPACT ON NAV IFRS NAV (EUR/share) ,0 IFRS NAV (KEUR) 120,0 100, ,0 60, ,0 20,

25 EVOLUTION OF THE FAIR VALUE OF THE PORTFOLIO (MEUR) : 4 YEARS OF STRONG EXPANSION (26% CAGR) REBALANCING FOR FUTURE GROWTH 350 MEUR 300 MEUR 287 MEUR 281 MEUR 250 MEUR 251 MEUR 219 MEUR 200 MEUR 150 MEUR 139 MEUR 100 MEUR 50 MEUR 0 MEUR Dec 2014 Dec 2015 Dec 2016 Dec 2017 Jun 2018

26 EVOLUTION OF EPS AND DPS 1,80 EUR OUTLOOK FY 2018: EPRA EARNINGS OF EUR 1,60 EUR 1,40 EUR 1,40 1,49 1,59 1,59 1,30 1,32 1,34 1,35 1,20 EUR 1,00 EUR 0,80 EUR 0,60 EUR FY 2014 FY 2015 FY 2016 FY 2017 EPRA earnings per share Gross dividend per share

27 IMPROVED DEBT PROFILE Qrf City Retail has contracted new credit lines in the first half of 2018 for a total amount of 45 MEUR with durations of 5 to 8 years. These credit lines will be used, amongst others, to reimburse credits with expiry dates in December 2018 for an amount of 25 MEUR. This way, Qrf City Retail succeeds in prolonging the durations of its financial debts and lowering its financing risk at attractive conditions. The average cost of financing dropped to 1.91% in 1H 2018.

28 IMPROVED DEBT PROFILE COMMENTS 50 MEUR 45 MEUR 40 MEUR 35 MEUR 30 MEUR 25 MEUR 20 MEUR 15 MEUR 10 MEUR 5 MEUR 0 MEUR DEBT MATURITIES Financial debt amounts to 151 MEUR - Drawn credit lines: 134 MEUR - Commercial Paper: 17 MEUR (fully covered by back-up lines) Weighted average remaining duration of drawn credit lines of 4.1yrs (*) Credit lines are provided by 8 financial institutions 60 MEUR committed non-withdrawn credit lines available Debt ratio of 54.3% (strategic target <55%) Expiry dates of drawn credit lines Expiry dates of available credit lines Expiry dates of Commercial Paper 92.1% of the drawn credit lines have an interest rate that is fixed (or hedged by means of Interest Rate Swaps) HEDGING TYPE OF FUNDING Weighted average remaining duration of the fixed interest rates of 4.0yrs 7.9% Fixed interest rate 11.3% Bank loans Average financing cost of 1.91% in 1H 2018 (vs 2.01% in 1H 2017) 92.1% Floating interest rate 88.7% Commercial Paper (*) Commercial Paper is excluded from the calculation of the average remaining duration of drawn credit lines. The CP Program is fully covered by available long term back-up lines.

29 OUTLOOK FOR THE RETAIL MARKET Focus on attractive cities & concepts

30 EXPERTISE AND EXPERIENCE ARE KEY FACTORS TO SUCCESS Service through staff and new technologies Mc Donalds Keyserlei Antwerp

31 TURNOVER IS NO LONGER THE GOAL OF THE PHYSICAL STORE Customer connection and footfall is key Ostend, Kapellestraat

32 CUSTOMER EXPERIENCE GAINS IMPORTANCE 3 2

33 MAIN FOCUS QRF CITY RETAIL: WE STAY CLOSE TO OUR CUSTOMERS

34 VISIT US Qrf City Retail Museumstraat 11 (bus 211) 2000 Antwerpen CONTACT US

35 DISCLAIMER Qrf CVA (hereafter Qrf ), having its registered office at Museumstraat 11/211, 2000 Antwerp, is a public Regulated Real Estate Company, incorporated under Belgian law and listed on Euronext Brussels. This presentation is directed to financial analysts and institutional investors and is not to be considered as an incentive to invest or as an offer to acquire Qrf shares. The information herein is extracted from Qrf s annual and half-yearly reports and press releases, but does not reproduce the entire content of these documents. Furthermore, this presentation contains forward-looking statements involving risks and uncertainties, including statements regarding Qrf's plans, targets, expectations and intentions. Readers are reminded that such forward-looking statements involve known and unknown risks and are subject to major corporate, economic and competitive uncertainties to a large extent outside the control of Qrf. Should one or more of these risks or uncertainties materialize, or should assumptions used prove incorrect, the final results could substantially vary from those anticipated, expected, estimated or projected. Qrf consequently assumes no responsibility for the accuracy of these forecasts.