Full Year Results 2016/ August 2017

Transcription

1 Full Year Results 2016/17 25 August 2017

2 2016/17: At a glance 1 RENTAL GROWTH +4.1% Italy, 5.6%; Sweden, 3.2%; France, 2.3%, despite almost 0% rental indexation PROPERTY VALUES +5.0% Italy, + 6.7%; France, + 2.8%; Sweden, + 5.5%. EARNINGS +3.7% Earnings increase (direct investment result): +3.7% to 2.23 per depositary receipt. NET ASSET VALUE +8.0% Adjusted Net Asset Value per depositary receipt: +8.0%, million. DIVIDEND +2.4% Board recommends dividend of 2.10 per depositary receipt, an increase of 2.4% over RETAIL SALES -1.0% for 12 months Improved to +0.7% for the three months to end of June. Figures are provided on a proportionally consolidated basis

3 Eurocommercial: listed in Amsterdam since France Italy Sweden Total Property value 1,352m No of properties 13 Property value 1,645m No of properties 12 Property value 838m 9 No of properties Property value 3.8bn No of properties 34 35% 43% 22% Figures are provided on a proportionally consolidated basis

4 Chief Executive s commentary was one of our busiest and most successful years with strong increases in both rental income and property values. Earnings have reached record levels and we have extended the maturity of our loans and our swaps to lock in current low interest rates. Property investment markets in France, Italy and Sweden continue to be strong, particularly in France where yields had reduced and remain firm with good demand from French and foreign institutions. We have signed a contract to sell 74 rue de Rivoli, Paris to a major institutional investor for a net price of 79.6 million and with a net yield of 3%. The property has produced a total return of 13% per annum since its purchase in Completion is expected to take place in October. In Italy, valuation yields have declined for the larger properties, bringing them closer to French levels. I Gigli and Carosello are now valued at under 5%. The Swedish market has retained its strength, despite possible tax reforms now delayed until at least Eurocommercial s attractive and popular centres continue to perform well in 2017 with 99.5% occupancy levels, benefitting from continual upgrading and re-letting to such strong international names as Primark and Zara. In 2017, they generated 186 million in rental income. Our Occupancy Cost Ratio of 8.5% reflects our long-term commercial approach to building sustainable and close relationships with our tenants, resulting in the lowest levels of vacancy and arrears in our industry. The shopping centre developments of Halmstad and Kristianstad are both on schedule for construction and lettings, with the former in line to deliver a 7% net return on cost. The exemplary expansion and refurbishment ( 12,200m²), of our largest centre, I Gigli, was completed in 2017 and we welcomed the first Primark store south of Milan, a much enlarged Zara and an exciting new restaurant concept - the Mercato Centrale Ai Banchi. In France, the 5,000m² extension of the gallery in Amiens is scheduled for completion in October The agreed sales of Rue de Rivoli (France) and Mellby (Sweden), which are examples of our asset rotation programme, will release nearly 100 million, which we will reinvest into further expansion projects. With high occupancy levels throughout our attractive shopping centres, plus the completion of several exciting expansion projects in the coming months, we believe the outlook for Eurocommercial in the next 12 months is excellent.

5 Comparison 2017 and Twelve months to end June 2017 Twelve months to end June 2016 % increase (year-on-year) Direct Investment Result million million +5.1% (per depositary receipt) % Rental Income million million +3.7% Retail Sales * -1.0% 2.7% - Occupancy Cost Ratio 8.5% 8.2% - Property Value** 3.8 billion 3.6 billion +5.0% Adjusted Net Asset Value (per depositary receipt) % Dividend (per depositary receipt) 2.10*** % * Excluding hypermarkets, Systembolaget and extensions ** On a proportional consolidated basis *** Proposed, subject to shareholder approval

6 Rental growth 12 months to June Average rental uplift on relettings and renewals Number of relettings and renewals % of total leases relet and renewed Overall like-for-like rental growth Overall 21% % 4.1% France 10% 64 13% 2.3% Italy 28% % 5.6% Sweden 12% 51 20% 3.2% EXCEPTIONAL HIGH OCCUPANCY RATE OF 99.5%

7 Retail Sales increase in final quarter, steady OCR 6 Retail Sales** FY2016/17 Twelve months to 30 June 2017 Three months to 30 June 2017 Overall -1.0%* 0.7%* France -2.1% 0.2% Italy -1.2% 0.1% Sweden 2.3% 3.8% Occupancy Cost Ratio** FY2016/ % 8.0% 8.5% 8.9% 8.3% 8.0% 6.0% 4.0% 2.0% 0.0% Overall France Italy Sweden *Excluding hypermarkets, Systembolaget and extensions/redevelopments **Rent plus marketing contributions, service charges and tenant property taxes as a proportion of retail sales including VAT. Excluding hypermarkets, Systembolaget and extensions

8 Valuations 12 and 6 months to the 30th of June Valuation increase Net initial yield including purchase costs* Twelve months to 30 June 2017 Six months to 30 June 2017 At 30 June 2017 Overall 5.0% 3.4% 4.9% France 2.8% 1.4% 4.3% Italy 6.7% 5.3% 5.3% Sweden 5.5% 3.0% 4.8% * Net initial yield figures are derived by dividing expected net income for the coming year by the valuation figure, to which has been added the relevant standardised market allowance for deemed purchaser s costs (usually notional transfer taxes) in the particular country. Average yields exclude Eurostop Halmstad and C4 Shopping which are under development

9 Potential future extensions and refurbishments June Shopping centre Project Status Potential timescale Les Atlantes, Tours 15,000m 2 extension and refurbishment Discussions with local municipalities 2019 Val Thoiry, Greater Geneva 25,000m 2 extension and refurbishment Discussions with local municipalities 2019 Shopping Etrembières, Greater Geneva 5,000m 2 extension and refurbishment Discussions with local municipalities 2020 Les Grands Hommes, Reorganisation and refurbishment Discussions with local municipalities 2019 Bordeaux Carosello, Carugate, Milan 23,000m 2 extension Seeking planning consent 2021 Curno, Bergamo 3,500m 2 new restaurants Awaiting final planning approval 2020 Collestrada, Perugia 19,500m 2 extension and refurbishment Discussions with local municipalities 2021 I Portali, Modena 13,000m 2 extension and refurbishment Initial discussions with municipality and co-owner 2022 Ingelsta Shopping, Norrköping 8,000m 2 extension In discussions with municipality Start 2019 Grand Samarkand, Växjö 10,000m 2 extension Initial conversations with municipality Start 2020 Elins Esplanad, Skövde 5,000m 2 extension Layout finalised Start 2018

10 Funding summary at 30 June Shareholders adjusted net equity Total net borrowings 2.26 billion 1.51 billion Loan book hedged for interest exposure 72% Average term of hedges c.7 years Average overall interest rate (incl. margin) 2.5% Net debt to adjusted net equity ratio 67% Net loan to property value ratio 39% Figures are provided on a proportionally consolidated basis

11 Non Current Loan Maturity Schedule / / / / / / / / / /28 Figures are provided on a proportionally consolidated basis

12 FRANCE: performance overview 11 Valuation of portfolio % since June 2016 Net initial yield: 4.3% (June 2016: 4.4%) Like-for-like rental growth: +2.3% Relettings and renewals: +10% Like-for-like retail sales: -2.1% Three months to June % Occupancy cost ratio: 8.9% Contracts exchanged for the sale of 74 rue de Rivoli, Paris at 79.6 million.

13 Amiens Glisy: extension of gallery 12 5,000m 2 extension of Amiens Glisy H&M have signed a lease to anchor the new mall with a 2,000m 2 store Other brands include New Yorker and Pandora Opening planned for October.

14 ITALY: performance overview 13 Valuation of portfolio + 6.7% since June 2016 Net initial yield: 5.3% (June 2016: 5.7%) Like-for-like rental growth: +5.6% Relettings and renewals: +28% Like-for-like retail sales: -1.2% Three months to June % Occupancy cost ratio: 8.3%

15 I Gigli: Primark and Ai Banchi del Mercato Centrale 14 Major refurbishment works at the I Gigli shopping centre completed. Space freed from the hypermarket has been converted into a new mall and large premises for Primark, Zara, Piazza Italia, Sephora & others. Exceptional new food concept launch on the upper floor: Ai Bianchi del Mercato Centrale. New marketplace for local food operators, which took over from the former free-flow restaurant. Work has already started for the next phase. General refurbishment of the areas not yet renovated, in particular the Corte Lunga and the area in front of the hypermarket.

16 SWEDEN: performance overview 15 Valuation of portfolio + 5.5% since June 2016 Net initial yield: 4.8% (June 2016: 5.0%) Like-for-like rental growth: +3.2% Relettings and renewals: +12% Like-for-like retail sales: +2.3% Occupancy cost ratio: 8.0% Contracts exchanged for the sale of Mellby Center, Laholm at SEK 185 million (c. 19 million)

17 C4 Shopping: development in Kristianstad 16 Construction of a 31,600m 2 shopping centre and 9,000m 2 hypermarket box, with a conditional commitment to acquire an adjoining 20,500m 2 retail park. Acquired in October 2016, regional catchment of 300,000 people. 75% pre-let a year ahead of its scheduled opening in October Tenants include H&M, Lindex, KappAhl, Gina Tricot and the Varner Group and Bestseller brands. Hypermarket let to City Gross: opens in September 2017.

18 Extension of Eurostop, Halmstad 17 16,000m² extension and refurbishment. Will comprise a total GLA of approx. 40,000m² with around 90 tenants. On-track to open at the end of October Over 95% of the new retail area is pre-let. New southern entrance and 12 shops including the 4,300m² Coop are already open and trading New tenants include New Yorker, Stadium, XXL, Nilson Group, Jack and Jones, Vero Moda, Gina Tricot, Cubus, Volt, Carlings, MQ and Cassels. Total cost expected to be approximately 75 million, yielding a net return on cost of around 7%.

19 Outlook 18 Modest inflation re-emerging and retail prospects improving with European economies. Interest rates likely to rise gradually as governments ease bond purchases. Property yields should stay firm but unlikely to reduce further despite continuing shortage of prime investments. Sales of Eurocommercial s smaller properties will continue following Rue de Rivoli and Mellby to provide funding for profitable extensions and possible future acquisitions. Eurocommercial will continue to concentrate on retail properties in France, Italy and Sweden whilst keeping an eye open for possible purchases in Switzerland and Belgium.