THIRD QUARTER RESULTS

Transcription

1 THIRD QUARTER RESULTS 2015

2 CONTENTS - THIRD QUARTER RESULTS 2015 I. EXECUTIVE SUMMARY... 3 II. UPDATE ON PROPERTY INVESTMENTS A. Offices B. Residential C. Hotels D. Events subsequent to the close of the period III. SUMMARY OF THE FINANCIAL STATEMENTS A. Statement of Financial Position and Consolidated Profit and Loss Account B. Analysis of Financial Statements as of September 30 th IV. APPENDICES A. Shareholder Structure B. Composition of the Board of Directors and its Dependent Committees... 34

3 I. Executive Summary THIRD QUARTER RESULTS 2015

4 4 Executive Summary KEY INFORMATION In the third quarter, Hispania acquired an office building in Madrid on Príncipe de Vergara, adjacent to the National Auditorium of Music. This acquisition amounts to 17.6 million euros (excluding transaction costs). As a result, from the time of its stock market listing to the end of the third quarter of 2015, Hispania has invested assets with a gross consolidated value of million euros (1). As a result of this acquisition, Hispania has invested a total of million euros (2) since its stock listing. Further more, the net asset value, according to EPRA recommendations, amounted to million euros, or euros per share. Up to the end of September 2015, the Group recorded total income of 20.3 million euros (19.6 million euros in net rental income), consolidated EBITDA of 1.8 million euros and consolidated net profit of 13.3 million euros. During the first 9 months of 2015, the company obtained total financing of 154 million euros, putting total Group financial debt at 222 million euros. Following the signing of execution of Phase I of Bay with the Barceló Group in October, the joint venture has drawn down 64 million euros of the total syndicated loan of 234 million euros from Bay. (1) Pursuant to CBRE appraisals at the close of June 2015 plus capex implemented in the third quarter and acquisitions made during the period (2) Total investment as of September 30 th, 2015

5 5 SUMMARY OF ACTIVITY IN THE THIRD QUARTER OFFICES The office portfolio has a total GLA of 128,042 sqm split between of 22 assets managed by the Group. At September 30 th, 2015, the portfolio had an occupancy rate of 65%, which stands at 86% when discounting the buildings being repositioned (Murano Building, NCR Building, Orense Building (ground floor) and the building on Av. Burgos (ground floor) and the Cristalia Building). The average rent at September 30 th, 2015 of the occupied portfolio was 13.1/sqm, including the rent and occupancy of the building in Plaza Les Glòries, which was acquired subsequent to the end of the period. In terms of GAV, the book value of these assets (according to CBRE appraisals as of June 2015, plus capex implemented in the third quarter and acquisitions of the period) amount to a total in office assets of million euros, divided between Madrid (80%), Barcelona (18%) and Malaga (2%). In the third quarter of the year, the company began to incorporate the rent generated by the new tenant of the building at Comandante Azcárraga 3, - from the company NCR-, which currently occupies a GLA of 3,139 sqm, which has brought the building up to an occupancy level of the building 89%. RESIDENTIAL The residential portfolio includes a total of 684 units, which at the end of the financial year had an occupancy rate of around 86% and average income of 8.8/sqm. In terms of GAV, the total value of assets amounted to 169 million euros, divided between Madrid (59%) and Barcelona (41%). As a continuation of the strategy of improving the residential assets and following the refurbishment of the common areas, 25 residential units have been refurbished by the end of the third quarter in Isla del Cielo. Additionally part of the refurbishment of the common areas of Sanchinarro has been completed, as well as the refurbishment of a number of the empty residential units. This strategy of refurbishing residential assets is allowing the rental of the refurbished units at a rent substantially higher than the average rent in the rest of the building. The company will continue to refurbish the empty residential units of both residential assets in order to unlock the maximum value from the assets. HOTELS Hispania has a total of 29 hotels in its portfolio which are managed by different operators at different sites throughout Spain. In October, subsequent to the end of the period, Hispania announced that it will add to its portfolio 1,183 rooms from the portfolio of Dunas Hotels & Resorts in the Gran Canaria and 313 rooms acquired in the Holiday Inn Hotel Madrid Bernabéu which, combined with the 6,097 rooms (16 hotels plus two small shopping centres) added to the portfolio following execution of Phases I and II of Bay, will amount to a total of 9,032 rooms. With respect to the Holiday Inn Madrid Bernabéu, although only 169 rooms have been acquired to date, Hispania has been managing since the acquisition all the hotel s 313 rooms under a management contract. Hence, the total of 9,032 rooms in the Hispania hotel portfolio includes the 313 rooms of the Holiday Inn Madrid Bernabéu. At year end, the hotel segment had a GAV of 247 million euros, divided between Canary Islands (63%), Costa del Sol (15%), Barcelona (7%) and Madrid (14%). The registered GAV at the end of the period will be increased by the transactions announced subsequent to the end, reaching a total GAV of 537 million euros (215 million euros of Phase I of BAY, including capex implemented to date and 75 million euros of Dunas). With respect to the repositioning of the hotel segment, the refurbishment of the Hotel Meliá Jardines del Teide continued in the third quarter of The work is expected to conclude towards the end of 2015, following a refurbishment of the hotel s common areas and of all its rooms to a different degree. The work will cost approximately 6.5 million euros.

6 6 Total GAV of 755 million euros accumulated from the listing of Hispania up to the end of the third quarter of 2015 is detailed below, divided into the three main asset categories defined in the company s investment strategy: GAV DISTRIBUTION PER ASSET CLASS 30/09/15 GAV DISTRIBUTION PER LOCATION 30/09/15 33% 22% 20% 6% 20% 45% 54% Offices Hotels Residen al Madrid Málaga Barcelona Canarias Hispania has maintained a steady rate of investment since it was listed for trading in 2014 and up to the end of the third quarter of 2015, as shown in the diagram below: GAV (million euros) (1) acquisi ons H acquisi ons Capex deployed Asset revalua on H GAV Q capex Q acquisi ons 9M 2015 GAV 1. GAV in million euros distributed acording to acquisi on date, considering book value, revalua on and capex of each period At the end of September 2015, Hispania s asset portfolio was located mainly in Madrid (54% of total Group GAV), Barcelona (20%) and the Canary Islands (20%).

7 7 LOCATION OF ASSETS ACQUIRED UP TO 30 SEPTEMBER 2015: OFFICES MADRID BUSINESS DISTRICT MADRID PRIME SECONDARY AREA BARCELONA F E C D M J K I O N B A L G H CBD Area A B C D E Ppe. Vergara 108-6,724 sqm Pechuán 2-3,579 sqm Ppe. Vergara - Auditorio - 4,815 sqm Comandante Azcárraga 3-5,138 sqm Comandante Azcárraga 5-3,547 sqm Orense 81-1,535 sqm G H I J NCR - 11,417 sqm Mizar - 7,348 sqm Cristalia 10,928 sqm Av. de Bruselas 15 3,458 sqm Talos 3,636 sqm Arcis 4,691 sqm K Poeta R. Morales 2,763 sqm L Ramírez Arellano 6,364 sqm Murano m 2 M Foster Wheeler 11,058 sqm N O ON Building 6,908 sqm Les Glòries Diagonal 9,519 sqm Les Glòries Gran Vía 8,680 sqm Les Gòries C. Granada 3,311 sqm F Avda. Burgos sqm Total: 26,100 sqm Total: 69,237 sqm Total: 28,418 sqm Nota: 1 Excluding GLA of Málaga Plaza Office Building

8 8 RESIDENTIAL MADRID BARCELONA B D A C A Sanchinarro 285 units D Isla del Cielo 200 units B San Sebas an de los Reyes 84 units C Majadahonda 115 units

9 9 HOTELS CANARY ISLANDS BALEARIC ISLANDS PENÍNSULA N S T R Q B A F G H I J M L M O N P E K C D A B Meliá J.del Teide 300 keys Barceló Varadero 312 keys E F C Barceló Las Margaritas 484 keys Dunas Don Gregory 241 keys Dunas Suites & Villas 301 keys Dunas Maspalomas 205 keys Dunas Mirador 436 keys G D Barceló Jandía Mar 485 keys Barceló Jandía Playa 634 keys Barceló Fuerteventura 486 keys Barceló Cas llo Beach 480 keys Gran Bahía Real 242 keys Suite Atlan s 383 keys Barceló Teguise 305 keys Barceló Lanzarote 426 keys H Barceló Pueblo Ibiza 346 keys I Barceló Cala Viñas 330 keys J Pueblo Park 275 keys K Barceló Ponent Playa 432 keys L Barceló Pueblo Menorca 374 keys M Barceló Hamilton 158 keys M Barceló Isla Cris na 341 keys N Guadalmina 178 keys O Vincci Málaga 105 keys P Barceló Cabo de Gata 229 keys Q Hesperia Ramblas 70 keys R NH Pacífico 62 keys S NH SS de los Reyes 99 keys T Holiday Inn Bernabéu 313 keys Total: 5,720 keys Total: 1,915 keys Total: keys

10 10 TOTAL OFFICES RESIDENTIAL HOTELS Gross Asset Value ( 000 ) (1) 754, , , ,971 Consolidated Book Value ( 000 ) 726, , , ,038 Number of Assets GLA (2) 124,731 (2) 66,873 (2) n/a Units (3) n/a 684 1,569 Average Occupancy Level (4) 65% 86% n/a Average WALT (5) n/a Años Net Rental Income ( 000 ) 19,580 8,613 3,275 7,692 (1) Gross Asset Value as of CBRE appraisals of 30/06/15 plus capex implemented during 3Q 2015 and adquisitions made during the period (K ) (2) Gross Leasable Area. Includes in offices 1,882sqm of commercial area and 1,083sqm of commercial area in Residential (3) Units in residential are dwellings, and in hotels equals keys. In hotels it includes the 130 rooms of Holiday Inn in ownership at the end of the period although it manages the full 313 keys of the hotel (4) Occupancy of the office space including commercial area, and in residential taking into account the dwellings (commercial area within residential is fully leased) (5) Weighted Average Term Length in years of the existing contracts, taking into account break option and end of contract of the leased area(or existing extensions in hotels) (without considering WALT of the comercial unit in Hotel Hesperia Ramblas) TOTAL 30/09/15 ( 000 ) Rental Income 19,580 Other income 692 EBITDA 1,823 Asset Revaluation 14,441 Earnings After Tax 13,319 Profit Attributable to Parent Company 12,946

11 11 EVENTS SUBSEQUENT TO THE CLOSE OF THE PERIOD I. Formalisation of Phase I of BAY On October 15th, 2015, Hispania acquired from the Barceló Group, through its subsidiary Hispania Real SOCIMI, an 80.5% share in the capital of Bay Hotels & Leisure, S.A. (BAY) for a paid out equity value of million euros, thus completing execution of the first phase agreed in April of this year. II. Acquisition of Hotel Holiday Inn in the Madrid CBD Hispania has acquired control of the Hotel Holiday Inn Madrid, 4* and 313 rooms, in the financial zone of Azca, adjacent to the Torre Picasso and opposite the Santiago Bernabéu stadium, in the midst of the central business district of Madrid, on the Paseo de la Castellana. III. Acquisition of four hotels from Dunas Hotels & Resorts Group Hispania has reached a binding agreement with the partners of Dunas Hotels & Resorts for the acquisition of four hotels in Maspalomas in the south of the island of Gran Canaria, with a total of 1,183 rooms. The Hotel Dunas Don Gregory (4* rooms), the Hotel Dunas Suites & Villas (4* rooms), the Hotel Dunas Maspalomas (4* rooms) and the Hotel Dunas Mirador (3* rooms). The acquisition price will be about 75 million euros and plans to implement 9.5 million euros in the repositioning of the assets, 5.5 million of which will be allocated to the Hotel Dunas Don Gregory 4*. IV. Acquisition of office building in Plaza Les Glòries, Barcelona Hispania has acquired an office building in Barcelona for 8 million euros, thus complementing the set of buildings at Les Glòries owned by Hispania, of which it is an integral part, and where Hispania now has nearly 21,500 square metres. This acquisition is of a strategic and defensive nature in the area, where Hispania hopes to consolidate its position and defend the rents negotiated with its tenants to date. The property is 100% occupied by the company GoreTex.

12 II. Update on Property Investments THIRD QUARTER RESULTS 2015

13 13 II. Update on Property Investments A. Offices In the third quarter of 2015 Hispania acquired an office building in Madrid. PRÍNCIPE DE VERGARA-AUDITORIO BUILDING LOCATION PRÍNCIPE DE VERGARA-AUDITORIO BUILDING c/ Suero de Quiñones, 42. Madrid DESCRIPTION Hispania continues with its investment plan in the office sector and is expanding its portfolio with an office asset in Madrid, with a payout of 17.6 million euros, in addition to a capex plan of approximately 4.3 million euros. The property is adjacent to the National Auditory of Music and has excellent visibility. PENDIENTE FOTO Y MAPA The building was constructed in 1991, and it features a unique, coppercoloured, two-level curtain wall façade that highlights the building s vertex. It has 4,815 square metres of GLA distributed in 6 floors of offices (of 2.60 m in free height and modulable to allow for dividing each floor into two independent spaces), 2 ground floor commercial premises and 95 parking spots in 3 underground floors. This asset is currently 82% occupied, and its acquisition enables Hispania to reinforce its positioning in the capital s central business district, in the north of Principe de Vergara, one of the areas with the greatest potential for revalorisation in the Madrid office market, where Hispania has two other office assets (Pechuán and Príncipe de Vergara, 108). Knight Frank and CBRE have acted as advisers to Hispania in this acquisition.

14 14 HISPANIA S OFFICE PORTFOLIO Hispania currently manages a portfolio of offices comprising 22 assets with a total gross leasable area (GLA) of 126,160 sqm used as office space, 1,882 sqm are used as commercial premises and there are 2,552 parking spaces At September 30, 2015, the portfolio had an occupancy rate of 65%, which stands at 86% when discounting the buildings being repositioned (Murano Building, NCR Building, Orense Building (ground floor) and the building on Av. Burgos (ground floor) and the Cristalia Building). The average rent at September 30th, 2015 of the occupied portfolio was 13.1/sqm. In terms of GAV, the office assets amount to a total value of million euros, divided between Madrid (80%), Barcelona (18%) and Malaga (2%). In the third quarter of the year, the company began to incorporate the rent generated by the new tenant of the building at Comandante Azcárraga 3, from the company NCR, for a GLA of 3,139 sqm, which has brought the building up to an occupancy level of 89%. Hispania is continuing with its plan of refurbishment of the office assets. Specifically, currently in execution are the works that began in the second half of 2015 in the buildings of Malaga Plaza, the Arcis Building, the Avenida de Bruselas Building and the Poeta Rafael Morales Building. Works are aimed mainly at refurbishing and updating communal areas of the buildings, allowing them to be repositioned on the market. Notable is the start of works in the NCR Building, in which the placement of external scaffolding has been completed, and the interior demolition of the empty floors has begun. This is the largest-scale work being carried out in the office assets, and it is expected to be complete in summer In terms of management of portfolio assets, the average occupancy levels have increased since the second quarter of 2015, with a greater impact on the adjusted averages of buildings in the repositioning phase, in which occupancy rates increased to 86%. The building with the greatest variation in occupancy rates is Comandante Azcarraga 3, which went from 27% to 89% following the active management of the management team, which managed to relocate the largest tenant in the NCR Building to this building, occupying a surface area of more than 3,000 sqm. Occupancy also increased in Príncipe de Vergara, 108 up to 61% following the entry of a new tenant in the third quarter.

15 15 MAIN OFFICE PARAMETERS AS AT SEPTEMBER GROSS NET TOTAL LEASABLE TOTAL MONTHLY TOTAL INITIAL INVESTMENT AREA INVESTMENT RENT OCCUPANCY MAIN WALT REVERSION GAV GAV ( MN) (1) LOCATION (SQM) ( / SQM) (1) ( /SQM) (3) % TENANTS (YEARS) (4) YIELD (%) (5) ( MN) (6) ( / SQM) (6) Glòries - Diagonal Building 21.7 Barcelona 9,519 (2) 2, % Atos Origin % ,431 Glòries - Gran Vía Building 19.7 Barcelona 8,680 2, % Bull % ,329 On Building 18.7 Barcelona 6,908 2, % CINC % ,750 Comandante Inmobiliaria Azcárraga, 3 Chamartín, Building 15.7 Madrid 5,138 3, % Alpama, NCR % ,070 Av. de Bruselas Building 7.0 Madrid 3,458 2, % Bosch, Flir, IDL % 8.0 2,323 Incadea Spain, Quental Technologies, Ed.Médica Arcis Building 11.0 Madrid 4,691 2, % Panamérica % ,383 Talos Building 8.0 Madrid 3,636 2, % IDEO % 8.3 2,283 Orange España, Centro Genética Rafael Morales Building 3.9 Madrid 2,763 1, % Avanzada, Riso Ibérica % 4.8 1,727 Pechuán Building 12.7 Madrid 3,579 3, % Grupo Ilunion % ,051 Av. de Burgos Building (single floor) 1.8 Madrid 762 2, n/a - 5.7% 1.9 2,486 Murano Building 18.9 Madrid 7,574 2, n/a - 7.0% ,510 Orense Building (single floor) 3.4 Madrid 1,535 2, n/a - 7.9% 3.5 2,280 NCR Building 27.1 Madrid 11,417 2, % AT&T % ,437 Mízar Building 22.2 Madrid 7,348 3, % Grupo Ilunion, Paramount % ,267 Comandante Azcárraga, 5 Building 8.3 Madrid 3,547 2, % Grupo Ilunion % 8.9 2,495 Ramírez de Arellano Building 22.0 Madrid 6,364 3, % Publicis % ,504 Málaga Plaza Building 6.7 Málaga 4,288 1, % Aegón, Deloitte, Integrated % 6.9 1,611 Príncipe Babel Sistemas de de Vergara Información, Building 25.5 Madrid 6,724 (2) 3, % Corporación Mutua % ,968 Foster Wheeler Building 23.9 Madrid 11,058 2, % Foster Wheeler % ,163 Cristalia 4B Building 31.9 Madrid 10,928 2, n/a - 6.2% ,926 P. Vergara Auditorio Building 17.6 Madrid 4,815 (2) 3, % Tower Watson, Aegon % ,655 TOTAL PORTFOLIO ,731 2, % % ,650 TOTAL ADJUSTED (7) ,515 2, % % ,663 (1) Including acquisition prices, transaction costs and implemented capital expenditure as of 30 September 2015 (2) Includes commercial area (728 sqm in Glories-Diagonal, 559 sqm in P.Vergara 108, y 596 sqm in P.V. Auditorio) (3) Rent of the office and commercial leased area without expenses as of September 2015 (4) Weighted average lease term from 30 September 2015 until first break option and total contract length taking into account the leased area (5) Based on 100% occupancy rate with current net market rents and total investment as of 30/09/15 (6) According to RICS valuations by CBRE as of 30 June 2015 plus capex implemented during 3Q 2015 (7) Adjusted without the buildings under repositioninig (NCR Building, Orense Building (single floor), Av. Burgos Building (single Floor), Murano Building and Cristalia Building)

16 16 B. Residential HISPANIA S RESIDENTIAL PORTFOLIO Hispania currently manages a residential portfolio comprising four assets, three in the Madrid region (Madrid, Majadahonda and San Sebastían de los Reyes) and one in Barcelona. The residential portfolio includes a total of 684 units, which at the end of the financial year had an occupancy rate of 86% and average income of 8.8/sqm. In terms of GAV, the residential assets in the portfolio amount to a total value of the assets of million euros, divided between Madrid (59%) and Barcelona (41%). As a continuation of the strategy of improving residential assets and following the refurbishment of the common areas, 25 residential units have been refurbished by the end of the third quarter in Isla del Cielo. In the third quarter of 2015, Hispania commenced the repositioning of the Sanchinarro residential complex, which includes the refurbishment and improvement of common areas, the modernisation of the exterior and interior of the building (façade, portals, etc.), and the increase in the services provided with the construction of a swimming pool, paddle-tennis court and playground. This refurbishment will involve an investment of approximately 1 million euros. In addition, the residential units will be gradually refurbished to maximise the value of the asset. This will allow Hispania to increase rents on the renovated residential units in respect of the building s average rental costs and this is expected to lead to a gradual increase in average rental income and subsequently the occupancy rate. This strategy of refurbishing in Isla del Cielo and Sanchinarro is allowing for the rental of refurbished residential units at a rent that is substantially higher than the average rent in the rest of the respective properties. The company will continue to refurbish empty units in order to unlock the maximum value and profitability from the assets. MAIN RESIDENTIAL PARAMETERS AS AT SEPTEMBER GROSS AVERAGE GROSS TOTAL LEASABLE TOTAL GROSS INITIAL INVESTMENT AREA INVESTMENT MONTHLY REVERSION GAV GAV ( MN) (1) LOCATION (SQM) DWELLINGS ( /SQM) (1) RENT ( /SQM) OCCUPANCY (%) YIELD (%) (4) ( MN) (6) ( / SQM) (6) Residential Units Isla del Cielo 63.8 Barcelona 22, , % 5.6% ,035 Residential Units S.S.Reyes 13.5 Madrid 8, , % 6.3% ,743 Residential Units Majadahonda 17.9 Madrid 9, , % 6.2% ,115 Residential Units Sanchinarro 62.5 Madrid 24,948 (2) 285 2,296 (3) % 5.8% (5) ,372 (3) TOTAL PORTFOLIO , ,318 (3) % 5.8% (5) ,483 (3) (1) Including acquisition prices, transaction costs and implemented capital expenditure as of 30 September 2015 (2) Additionally, the buildings have 1,083 sqm of commercial area (3) /sqm excluding the commercial area and parkings linked to the commercial area (4) Based on 100% occupancy rate, gross market current rents and total investment as of 30/09/15 (5) Yield of book value of the residential part, excluding the commercial area (6) According to RICS valuations by CBRE as of 30 June 2015 plus capex implemented in 3Q 2015

17 17 C. Hotels HISPANIA S HOTELS PORTFOLIO Hispania now has 29 hotels in its portfolio which are managed by different operators at different sites throughout Spain. The hotel portfolio includes a total of 9,032 rooms. In October, subsequent to the end of the period, Hispania announced that it will add to its portfolio 1,183 rooms from the portfolio of Dunas Hotels & Resorts in the Gran Canaria and 313 rooms managed in the Holiday Inn Hotel Madrid Bernabéu (169 under ownership) which, combined with the 6,097 rooms (16 hotels plus two small shopping centres) added to the portfolio following execution of Phases I and II of Bay, will amount to a total of 9,032 rooms. At year end, the hotel segment had a GAV of 247 million euros, divided between Canary Islands (63%), Costa del Sol (15%), Barcelona (7%) and Madrid (14%). The registered GAV at the end of the period will be increased by the transactions announced subsequent to the end, reaching a total GAV of 537 million euros (215 million euros of PHASE 1 of BAY, including capex implemented to date and 75 million euros of Dunas). The refurbishment of the Meliá Jardines del Teide Hotel continued in the third quarter of The renovation involves the refurbishment of the common areas, updating a 70% of the rooms and upgrading the category of the remaining 30%. The work will cost around 6.5 million euros, and be completed by the end of 2015.

18 18 MAIN HOTELS PARAMETERS AS AT SEPTEMBER 30, 2015 TOTAL TOTAL GROSS INITIAL INVESTMENT CATEGORY ROOMS INVESTMENT CONTRACT CONTRACT REVERSION GAV GAV ( MN) (1) LOCATION (*) (NUMBER) ( /KEY) (1) OPERATOR TYPE LENGTH YIELD (%) (3) ( MN) (5) ( /KEY) (5) Hotel Guadalmina 22.8 Marbella 4* ,068 - Fixedenta Rent Nov-2015 (2) 9-10% ,596 Hotel NH Pacífico 6.2 Madrid 3* ,587 NH Hoteles Fixed rent + Variable Nov % ,097 depending years extension on results Hotel NH SS de los Reyes 7.1 Madrid 3* 99 71,584 NH Hoteles Fixed rent + Variable April % ,525 depending years extension on results Hotel Meliá Jardines 38.9 Tenerife 4* ,705 Meliá Fixed rent + Variable January % ,046 del Teide all inclusive depending years extension on results Hotel Hesperia Ramblas 17.9 Barcelona 3* ,305 Hesperia Fixed rent + Variable February % (4) ,000 depending on results (with rent increase until 2019) Hotel Vincci Málaga 10.7 Málaga 4* ,931 Vincci Fixed rent + Variable January % ,419 depending on results Gran Hotel Bahia Real (6) 70.0 Fuerteventura 5* ,059 Atlantis Fixed rent + Variable Jun % ,091 Deluxe depending years extension on results Suite Hotel Atlantis 45.5 Fuerteventura 4* ,712 Atlantis Fixed rent + Variable Jun % ,241 Fuerteventura Resort (6) depending years extension on results Hotel Holiday Inn 22.0 Madrid 4* ,336 n/a n/a n/a n/a ,336 Bernabeu (7) TOTAL PORTFOLIO , , % ,406 (1) Including acquisition prices, transaction costs and implemented capital expenditure as of 30 September 2015 (2) Hispania has reached an agreement with the current operator of the hotel by which he will conclude management by November 2015 (3) Based on actual stabilized contracts signed (after agreed rental increases) and total investment as of 30/09/15, except for the Guadalmina Hotel and Meliá Jardines del Teide, increased by the total capex and contracts expected after capex implementation has been completed. (4) Excluding the commercial area (5) According to RICS valuations by CBRE as of 30 June 2015 plus capex implemented in 3Q2015 (6) Includes part of the variable price accounted for in book value but not paid yet ( 6.9M for both hotels) (7) A closing of the period only the adquisicion of Leading Hospitality was completed. The company is owner of 130 keys and all common areas of the hotel. Nevertheless Hispania manages the full 313 keys of the hotel through Leading Hospitality

19 19 D. Events Subsequent to the Close FORMALISATION OF PHASE I OF BAY On October 15, Hispania executed within the scheduled time frame, the Phase I of the transaction agreed in April 2015 with the Barceló Group, acquiring an 80.5% share in the capital of Bay Hotels & Leisure, S.a. (BAY) for an initial price of 123 million euros. Currently, BAY owns 11 resort hotels (3,946 rooms) in the Canary Islands, the Balearic Islands, Huelva and Almería and a small shopping centre in Fuerteventura. Bay has signed the respective leases with the hotels with the Barceló Group. The last appraisal of this asset portfolio, amounting to 229 million euros, as against an acquisition cost of 207 million euros, reflects the appreciation in value of this portfolio due to the good results and the improvement CAPEX implemented. Bay has signed with the Barceló Group call and put options on the optional portfolio of five hotels and a small shopping centre that make up the second phase, the execution of which is scheduled for prior to the end of The value of the assets in the optional portfolio amounts to million euros. Bay has also closed a financing agreement for its portfolio of 234 million euros with a syndicate of banks, of which the first tranche of 64 million has been drawn down. With the execution of the Phase I, Hispania is commencing its partnership with the Barceló Group with the firm intention continuing to grow in its resort hotel strategy, one of Hispania s main focuses. In addition to the 3,946 rooms that Hispania today adds through BAY, the company has a further 1,439 rooms, where Socimi has the largest exposure to the Spanish hotel sector and with a special emphasis on resort hotels, one of the better performing sectors in the Spanish economy. ASSET LOCATION KEYS sqm

20 20 ACQUISITION OF FOUR HOTELS FROM DUNAS HOTELS & RESORTS GROUP Hispania has reached a binding agreement with the partners of Dunas Hotels & Resorts for the acquisition of four hotels in Maspalomas in the south of the island of Gran Canaria, with a total of 1,183 rooms. The Hotel Dunas Don Gregory (4* 241 rooms), the Hotel Dunas Suites & Villas (4* rooms), the Hotel Dunas Maspalomas (4* rooms) and the Hotel Dunas Mirador (3* rooms). The acquisition will be carried out through a number of agreements, including the purchase of mortgage debt and the commitment to recapitalise the company in order to rescue Dunas Hotels & Resorts from its current situation of insolvency. Hispania s total investment amounts to approximately 75 million euros, and an asset repositioning investment of more than 9 million euros is planned. The transaction is subject to the approval of the creditors agreement. The current partners of Dunas Hotels & Resorts will act as Hispania s industrial partner, operating the aforementioned hotels through a variable lease for an initial, extensible term of 10 years, which will include a guaranteed minimum. The acquisition of these hotels supplements Hispania s resort portfolio in the Canary Islands and strengthens its presence in the island of Gran Canaria, where Hispania already has the Hotel Barceló Margaritas. Dunas Don Gregory Hotel Dunas Suites & Villas Hotel Dunas Maspalomas Hotel Dunas Mirador Hotel

21 21 ACQUISITION OF HOTEL HOLIDAY INN IN MADRID Hispania has acquired control of the Hotel Holiday Inn Madrid, which is located adjacent to the Paseo de la Castellana and opposite the Santiago Bernabéu stadium, in the midst of the central business district. The 4* hotel has a total of 313 rooms, in addition to several restaurants, bars, outdoor swimming pool and halls for events of up to 500 people, and it is the only hotel of this category in the Azca business area. The acquisition was carried out through the purchase of Leading Hospitality, S.L. ( Leading ), a company that is insolvent and which owns all the common areas and 130 rooms in the Holiday Inn, in addition to other assets. Hispania has also purchased, in a separate transaction, a further package of 39 rooms from an institutional investor. The two transactions involved a total investment of 25 million euros. The majority of the other rooms, held by individual investors, are subject to a lease with Leading that runs until the year Hispania s final payout is dependent upon the closing of the transaction, and on the amount of the investment to definitively reposition the asset. This transaction once again shows Hispania s capacity to successfully carry out complex transactions, through which the company accedes to unique assets that have a high potential for the creation of additional value through repositioning. Hispania is reinforcing its presence in the Madrid hotel market through the acquisition of a unique hotel in a special area, where a substantial improvement and modernisation plan is also envisaged.

22 22 ACQUISITION OF OFFICE BUILDING IN PLAZA LES GLÒRIES, BARCELONA Hispania continues with its investment plan in the office sector and is expanding its portfolio with an office building in Barcelona, with a total payout of 8 million euros in acquisition costs. The property is an example of rationalist architecture in an industrial building of the the era, built in the years 1941 and 1942, and refurbished in along with the construction of the Les Glòries shopping centre. It has 3,311 square meters of GLA and it strengthens Hispania s position in a key area of investment, where it already had a significant presence. The acquisition of the Barcelona asset completes the complex of the Glòries buildings owned by Hispania, of which it is an integral part. The building is 100% rented, with a long-term lease. With this acquisition, the Glòries complex of 22,000 square metres of GLA is now 98.6% rented. Knight Frank and CBRE have acted as advisers to Hispania in this acquisition.

23 III. Summary of the Financial Statements as of 30 September 2015 THIRD QUARTER RESULTS 2015

24 24 IV. Summary of the Financial Statements at 30 September 2015 A. Financial statements A.a. Balance Sheet at 30 September 2015 Thousands of euros 30/09/15 31/12/14 Intangible assets Real state investments 754, ,365 Financial investments Non current financial assets 99,525 2,556 Defered tax assets 14,092 13,210 NON CURRENT ASSETS 868, ,515 Receivables 4,116 2,150 Credits with Public Administration 4,153 2,719 Other current financial assets 29,385 2,379 Cash 257, ,201 CURRENT ASSETS 294, ,449 TOTAL ASSETS 1,163, ,964 Thousands of euros 30/09/15 31/12/14 Share capital 82,590 55,060 Share premium and other reserves 793, ,909 Acciones de la Sociedad Dominante -1,195 - Profit 12,946 17,132 Minority interest 10,510 10,137 EQUITY 898, ,238 Long-term provisions Non current debts with credit entities 200,442 56,414 Non current debts with third parties 10,000 10,000 Otros pasivos financieros no corrientes 8,066 4,380 Deferred tax liabilities 8,278 4,913 NON CURRENT LIABILITIES 227,534 76,105 Current debts with credit entities 11,451 5,254 Current debts with third parties Other current financial liabilities 1,588 1,619 Trade payables 24,591 5,988 Other payables to Public Administration CURRENT LIABILITIES 37,843 13,621 TOTAL EQUITY AND LIABILITIES 1,163, ,964 The comparative information contained in the Consolidated Statement of Financial Position corresponds to the period of eleven months and nine days ending 31 December At that date, the Hispania Group was formed by Hispania Activos Inmobiliarios, S.A. (Sociedad Dominante), Hispania Real SOCIMI, S.A.U. e Hispania Fides, S.L. Hespérides Bay, S.L.U., Hospitia, S.L.U., and Hispania Hotel Management, S.L.U. (formerly Dunas Bay Resorts, S.L.U.) were included in the consolidation scope in June 2015, and the inclusion of Leading Hospitality, S.L.U. took place in July 2015.

25 25 A.b. Income Statement at 30 September 2014 Thousands of euros 30/09/15 30/09/14 REVENUE 19,580 4,193 Other operating income Other operating expenses -7,659-1,988 Net operating income 12,613 2,493 Management company fees -7,330-2,677 SG&A -3,460-1,857 EBITDA 1,823-2,041 % of revenue 9.30% % Depreciation and amortisation Proceeds from disposal of assets Revaluation of assets 14,441 - NET OPERATING INCOME 16,308-2,009 % of revenue 83.30% % Finance income 2,006 2,295 Finance costs -3, NET FINANCE INCOME/(EXPENSE) -1,676 1,683 PROFIT/(LOSS) BEFORE TAX 14, % of revenue 74.70% -7.80% Income tax -1, NET PROFIT/(LOSS) 13, % of revenue 68.00% -9.30% Non-controlling interests PROFIT ATTRIBUTABLE TO THE PARENT 12, The comparative information included in the consolidated statement of comprehensive income corresponds to 30 September At that date, the Hispania Group was formed by Hispania Activos Inmobiliarios, S.A. (parent) and Hispania Real SOCIMI, S.A.U. and Hispania Fides, S.L. (from 8 July 2015). Hespérides Bay, S.L.U., Hospitia, S.L.U., and Hispania Hotel Management, S.L.U. (formerly Dunas Bay Resorts, S.L.U.) were included in the consolidation scope in June 2015, and the inclusion of Leading Hospitality, S.L.U. took place in July 2015.

26 26 B. Analysis of the consolidated financial statements of the Hispania Group at 30 September 2015 The main highlights of the condensed interim consolidated financial statements at the end of the first nine months of 2015 are as follows: The Group s investment activities, entailing the acquisition of eight assets for a total of 287 million euros (Hotel Vincci Málaga, the Sanchinarro Residential Complex, the Príncipe de Vergara building, the Foster Wheeler building, the Cristalia Building 4B, Gran Hotel Atlantis Bahía Real, the Atlantis Fuerteventura Resort Suite Hotel and the Príncipe de Vergara building - Auditorium). A further 10 million euros was invested on refurbishment and improving portfolio assets. The inclusion of Leading Hospitality, S.L.U. (the company owning the communal areas and most of the rooms of the Holiday Inn Bernabéu hotel, mainly) in the Group s consolidation scope following the purchase of 100% of its shares. This company contributes a GAV of 22 million euros to the consolidated Group. The Group signed new bank borrowing agreements for a total nominal amount of 154 million euros, with an average repayment date of around 8.5 years. Interest rate risk on borrowing was covered by 5-7 year hedges on 100% of the nominal amount pending payment. The share capital increase of 337,243 thousand euros in April 2015 through the issue of 27,530,000 new shares of par value 1 euro each, with an euro share premium. Capital gains generated by the Group s assets portfolio at the end of the first six months of 2015, in the amount of 14.4 million euros. Consolidated Income Statement At 30 September 2015, the Group reported a net profit of 12,947 thousand euros (loss of 409 thousand euros at 30 September 2014) due to the income obtained from real estate assets rentals and associated capital gains following the appraisals performed by CBRE using RICS methodology at 30 June Revenue The Group reported revenue of 19,580 thousand euros (4,193 thousand euros at 30 September 2014). This amount includes rental income, net of discounts and rebates. In accordance with the applicable regulatory financial reporting framework, the Group does not consider the costs passed on to its tenants as income, but are deducted from costs on the consolidated income statement.

27 27 The graphs below show the breakdown of revenue by type of asset at 30 September 2015 and their share of the total. THOUSANDS OF EUROS % 7,692 3,275 39% 17% 8,613 44% Offices Hotels Residen al Offices Hotels Residen al BREAKDOWN BY TYPE OF ASSET 000 OFFICES RESIDENTIAL HOTELS CORPORATE EXPENSES GROUP REVENUE 8,613 3,275 7,692-19,580 EBITDA 6,713 2,364 3,536-10,790 1,823

28 28 Results by business line include expenses relating to the operation of investment property, including the full annual impact of taxes associated with the operation of real estate assets, primarily Property Tax of 2,745 thousand euros, in accordance with the prevailing regulatory framework. Operating expenses Operating expenses in the consolidated income statement at 30 September 2015 can be broken down as follows: Other operating expenses 4,759 thousand euros correspond to operating expenses relating to the Group s real estate assets, including taxes associated with the operation of real estate assets. 2,900 thousand euros relating to Leading Hospitality, S.L.U., included in the consolidation scope in the third quarter of 2015, and associated with the current management of the company and the restructuring carried out to 30 September The full income statement of this company has been included under the Hotels business line, with a significant negative impact on EBITDA/revenues. Management company fees, SG&A 7,330 thousand euros in fees paid to Azora Gestión, SGIIC, S.A. in respect of its management contract with the Group; this figure is calculated on the basis of the NAV following the EPRA criteria: 2,677 thousand euros at 30 September Group corporate management and analysis of investment opportunities included in studies which were not followed up: 3,460 thousand euros. Financial profit/(loss) On September, 30 th 2015, the Group reported finance income of 2,006 thousand euros corresponding to the reversal of specific financial liabilities recorded in 2014 on the basis of the improved disbursement schedule forecast for 2015 and 256 thousand euros corresponding to cash deposits, mainly bank deposits, interest-bearing current accounts and high liquidity investment funds (2,295 thousand euros at 30 September 2014). Finance costs relate mainly to the cost of Group company loans, including hedging costs. The weighted average interest rate of the Group s debt as of 30 September 2015 was 2.6%. At 30 September 2015, 87% of the Group s financial debt was hedged against interest rate fluctuations. Income tax Income tax expense incurred by the Group at 30 September 2015 corresponds mainly to the tax impact of the revaluation of investment property held by Group companies not registered as REITs.

29 29 Consolidated Statement of Financial Position Non-current assets Investment property As noted above, the Group acquired eight new investment properties in the third quarter of 2015 for a total purchase price of 287 millions of euros. Further, the inclusion of Leading Hospitality, S.L.U. in the Group s consolidation scope has increased the value of its investment property by 22 million euros. The net variation in investment property is due to the aforementioned acquisitions, the capital gains on investment property following its statement at fair value in line with the appraisals carried out by CBRE at 30 June 2015 under RICS standards, and capex during the period (10 million euros). The table below shows movements in investment property in the first nine months of 2015 (million euros): REAL ESTATE INVESTMENTS TIMELINE (in million euros) Evolución inversiones inmobiliarias (millones de euros) Value as of 31/12/2014 Capex implemented in 2014 Asset Revalua on in 2014 News investments in 2015 Capex implemented in 2015 Asset Revalua on in 2015 Value as of 30/09/2015 The breakdown of the value of the asset by type is as follows: THOUSANDS OF EUROS % 246, ,566 33% 22% 339,407 45% Offices Hotels Residen al Offices Hotels Residen al

30 30 Non-current financial assets As part of its rental activity, the Group has the obligation to deposit the amounts paid by tenants of the leased properties with the relevant public agencies in the Autonomous Communities where the leased properties are located. This item includes all the amounts deposited with such bodies, as well as other deposits and additional guarantees delivered by the lessees. On September, 30 th 2015 the Group recognised 95 million euros under this heading in favour of Barceló Corporación Empresarial, S.A. as an advance payment for the shares of BAY Hotels & Leisure, S.A.U., by virtue of the investment agreement signed between the subsidiary Hispania Real SOCIMI, S.A.U. and the Barceló Group. Deferred tax assets Deferred tax assets correspond to negative tax bases carryforwards which the Group expects to recover in a reasonable period of time. Deferred assets were contributed mainly by Hispania Fides, S.L. and arose mainly as a result of prior years losses and other temporary differences. The Group recognised these assets applying a tax rate of 25% in accordance with the corporate income tax rates established under Law 26/2014 for the years beginning on December, 31 st 2015 and onwards, since most of the deferred tax assets are expected to be recovered from this year onwards. Current assets Trade and other receivables At 30 September 2015, this item was formed by the amount of 4,116 thousand euros (2,150 thousand euros at 31 December 2014) mainly representing trade receivables expected to be collected in the short term and to accrued revenues to be billed to customers for Property Tax. Tax receivable The detail of this item at 30 September 2015 corresponds to VAT refundable and withholdings on income from movable property due to interest received. Other current financial assets At 30 September 2015 this heading mainly includes investments in deposits maturing in the short term, in the amount of 25,000 thousand euros (2,000 thousand euros at 31 December 2014), and pre-paid expenses arising from the Group s operations, mainly related to insurance policies that will be accrued during the year. Cash and cash equivalents Cash and Cash Equivalents include the Group s current accounts and other liquid assets held in financial institutions with

31 31 excellent credit ratings. All of these items are fully available. Equity and liabilities Share capital, share premium, parent company own shares and other reserves. On 27 April 2015 an agreement was reached to increase the Parent s share capital by 27,530 thousand euros by issuing 27,530,000 new shares with a par value of 1 euro each and a share premium of euros. Therefore, on 30 September 2015 the Company s share capital was represented by 82,590,000 shares with a par value of 1 euro each, fully subscribed and paid up (55,060,000 shares with a par value of 1 euro each and a share premium of 9 euros at 31 December 2014). This heading also includes contributions from shareholders of 540 thousand euros and the measurement of interest rate hedging derivatives arranged by the Group to hedge the risk of interest rate rises with respect to its mortgage loans. Pursuant to the liquidity contract entered into on 30 June 2015 with Beka Finance, S.V., S.A. to assist the liquidity of its transactions and the stability of its quoted share price, at 30 September 2015 the Group parent held 93,092 treasury shares for a total amount of 1.2 million euros (at 31 December 2014 the parent held on treasury shares). Non-controlling interests The change in non-controlling interests is due to the Once Group s share of the results of Hispania Fides, S.L. during the first nine months of Non-current liabilities Non-current and current borrowings from banks and others During the first nine months of 2015, the Group signed new borrowing agreements with credit institutions for a total nominal amount of 161 million euros, with an average maturity of approximately 8.5 years. The interest rate risk on these borrowing agreements has been hedged with 5-7 year swaps, which hedge 100% of the nominal amount repayable during their lifetime. The maturity profile of the borrowings from banks and others at 30 September 2015 is shown in the graph below. This includes the non-current loan signed with Corporación Empresarial Once, the interest accrued but not paid on that loan, the interest accrued on the associated hedging instruments, and the transaction costs of the borrowing which will be included in the consolidated income statement at the corresponding effective interest rate.

32 32 Thousands of euros 221, ,877 11,521 6,532 10,314 10,719 1 year 2 years 3 years 4 years 5 or more years Total At 30 September 2015, approximately 87% of the Group s financial debt was hedged against interest rate fluctuations. This debt is made up mainly of borrowings with maturity dates of over 10 years. However, given the repayment schedule over the life of these borrowings, the weighted average duration of total Group debt stands at 8 years. Other non-current financial liabilities Other non-current financial liabilities also includes the guarantees and deposits paid by tenants to secure their rental agreements. The deposits and guarantees are expected to mature at long term. This heading also includes liabilities arising from the marking to market of the interest rate hedges of the Group s borrowings, discussed above. Deferred tax liabilities This heading is essentially made up of deferred tax liabilities arising from the capital gains on the property investments of Hispania Fides, S.L. at 31 December 2014 and 30 June Current Liabilities Other current financial liabilities This heading includes mainly deposits received from tenants which are expected to be returned in the short term, in the amount of 642 thousand euros (726 thousand euros at 31 December 2014), together with the purchase options held by certain tenants of housing developments in the amount of 946 thousand euros (893 thousand euros at 31 December 2014). Trade and other payables The balance under this item consists mainly of amounts pending payment to third parties in respect of services provided to the Group in the course of its usual activities. At 30 September 2015, this includes the current liability associated with the new company in the consolidation scope, Leading Hospitality, S.L.U.

33 33 IV. Annexes THIRD QUARTER RESULTS 2015

34 34 V. Appendices A. Shareholder Structure At the end of September 2015, the shareholder structure of Hispania Activos Inmobiliarios, pursuant to the filings with the Spanish Securities Market Commission made by the Company s various investors was as follows: APG Asset Management, N.V.: 4.22% Hispania Management Team: 1.42% Free float 38.29% Cohen & Steers, Inc.: 4.96% FMR: 7.34% CBRE 3.55% BWGI 3.64% Paulson & Co, Inc.: 9.85% Tamerlane, S.A.R.L.: 3.63% Soros Fund Management Llc: 16.67% B. a) Composition of the Board of Directors and its Dependent Committees The composition of the Board of Directors of Hispania is as follows: BOARD OF DIRECTORS: BOARD MEMBER CATEGORY 1 Mr. Rafael Miranda Robredo Chairman 2 Mr. Luis Alberto Mañas Antón Member 3 Mr. Joaquín Ayuso García Member 4 Mr. José Pedro Pérez-Llorca y Rodrigo Member 5 Mrs. Concha Osácar Garaicoechea Member 6 Mr. Fernando Gumuzio Íñiguez de Onzoño Member

35 35 The Committees of the Board of Directors of Hispania are composed as follows: EXECUTIVE COMMITTEE: BOARD MEMBER CATEGORY 1 Mr. Rafael Miranda Robredo Chairman 2 Mr. Joaquín Ayuso García Member 3 Mr. Fernando Gumuzio Íñiguez de Onzoño Member NOMINATION AND REMUNERATION COMMITTEE: BOARD MEMBER CATEGORY 1 Mr. José Pedro Pérez-Llorca y Rodrigo Chairman 2 Mr. Rafael Miranda Robredo Member 3 Mrs. Concha Osácar Garaicoechea Member 4 Mr. Joaquín Hervada Yáñez Secretary/Non-Board Member AUDIT COMMITTEE: BOARD MEMBER CATEGORY 1 Mr. Luis Alberto Mañas Antón Chairman 2 Mr. Joaquín Ayuso García Member 3 Mr. José Pedro Pérez-Llorca y Rodrigo Member