Eurobank Properties REIC. Company Presentation May 2014

Transcription

1 Eurobank Properties REIC Company Presentation May 2014

2 Disclaimer This presentation has been prepared by Eurobank Properties REIC (the Company ). The information contained in this presentation has not been independently verified and no representation or warranty, 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. None of the Company, shareholders or any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. Unless otherwise stated, all financials contained herein are stated in accordance with International Financial Reporting Standards ( IFRS ). This presentation does not constitute an offer or invitation to purchase or subscribe for any shares and neither it or any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. The information included in this presentation may be subject to updating, completion, revision and amendment and such information may change materially. No person is under any obligation to update or keep current the information contained in the presentation and any opinions expressed in relation thereof are subject to change without notices. This presentation is subject to any future announcements of material information made by the Company in accordance with law. This presentation does not constitute a recommendation regarding the securities of the Company. 2

3 Company overview Largest Listed Investment Property Fund in Greece High quality property portfolio and remarkable tenant mix (Eurobank, Bancpost, Greek State, AB Vasilopoulos, Marinopoulos, Praktiker, H&M, L Oreal, P&G, Marks & Spencer) Strong operational performance Tax-Efficient Structure in Greece; REICs are exempt from: - Capital gains tax - Transaction tax - Dividend tax Strong shareholder base Strong management team Significantly improved legislation framework 3

4 Healthy Balance Sheet Snapshot Cash (Term Deposits) 1 : 175m Average deposit rate: 3.10% Debt to Total Assets 2 : 7% Loan to Value 2 : 12% Total debt outstanding 2 : 68m Weighted average maturity 2 : 6 years Weighted average cost of debt 2 : 3.11% All debt is on floating interest rate Loan maturity schedule Eliade Tower SPV Reco Real Property SPV Seferco Development SPV 29% Eurobank Properties Eurobank Properties 31% Eurobank Properties Eurobank Properties 17% Reco Real Property SPV 17% 3% 2% 1% thousands Eurobank Properties Eurobank Properties Eliade Tower SPV Reco Real Property SPV Actual balloon payments Seferco Development SPV Eurobank Properties Total balloon payments: 39m 4 1: Taking into consideration HRADF 145,8m investment 2: Excluding HSBC 60m 5 year bond loan financing

5 Shareholder NAV and Stock Information Share Price Information (05/2014) Shareholder Structure 05/2014 Average Share Price 8.14 NAV 839m NAV per share 8.28 Greek Institutionals 2,01% International Investors 11,64% Retail 3,92% Treasury stock 1,14% Fairfax Financial Holding Ltd * 41,50% Average Capitalization 824m Fidelity Management and Research LLC * 5,84% Eurobank Ergasias S.A. * 33,95% Total Shares Outstanding : 101,260,000 5 *: On Group level

6 2013 financial results * 22% thousands (10.000) (20.000) Profit bf tax and valuations Loss from fair value adjustments Profit/(loss) bf tax Net Profit/(loss) (30.000) -34% (25.890) (28.060) (40.000) (50.000) (43.151) (60.000) (70.000) (65.687) 6 *: thousands positive impact on profit from negative goodwill due to Cloud s acquisition.

7 Healthy financials for 2013 Rental growth vs. operating costs Funds from Operations thousands % % % thousands % % -2% % % -15% -6% 13% * Adjusted EBITDA NAV per share (**) thousands % 2% % -8% ,50 12,00 11,50 11,00 10,50 10,00 9,50 9,00 8,50 8,00 11,94 11,49 11,18 10,30 10, * Operating costs increased vs due to the strategic decision to upgrade our buildings and to FX difference arising from Ukraine disposal of IP. ** The decrease in NAV is mainly driven by the loss from fair value adjustments by 32.6m in 2011 and 65.7m in In NAV per share calculation is based on 61m shares.

8 Attractive lease profile Leases Overview Expiration (% of Annualised Rent) Vast majority of leases in Greece remain with term of 12 years Weighted average remaining term of 12,4 years 71,2% of the annual rent income comes from guaranteed leases Signed agreements with several tenants under which they waive right to terminate leases for a 3,6% 1,9% 2,3% 0,4% 5,70% 1,50% 2,40% period of 1 20 years All tenants responsible for ordinary maintenance expenses Contracted Indexation Profile (1) 82,20% HICP 35,1% No rent review 3,9% CPI+1.0% 9,7% CPI+0.5% 0,5% CPI 27,6% Other 23,2% 8 (1) Due to the unfavorable economic situation we have granted freeze of the rental indexation for 1 to 2 years to several tenants representing 32,2% of total rental income.

9 High quality diversified portfolio Office % of Total GLA ( sqm ) by Sector Retail 47,2% 13,6% 13,7% 19,9% 5,6% 33 properties sqm 54,6% of total rents 95,6% leased 21 properties sqm 22,3% of total rents 99,3% leased Special use Buildings Logistics Mixed use # of Assets: 74 properties Portfolio Occupancy Rate : 95,4% 5 properties sqm 8,2% of total rents 100% leased 5 properties sqm 7,7% of total rents 94,6% leased 10 properties sqm 7,2% of total rents 71% leased 9 80% of total GLA is above ground and 20% is below ground. Calculation excludes own-use property and plot of land in Spata.

10 Portfolio Geographic Breakdown Belgrade & Nis No. of Assets 2 GLA (sqm) MV ( mn) 13,2 % of TMV 1,8% Bucharest & Iasi No. of Assets 3 GLA (sqm) MV ( mn) 74,1 % of TMV 10,1% Romania Serbia Rest of Greece No. of Assets 19 GLA (sqm) MV ( mn) 106,3 % of TMV 14,6% Greece Athens and Greater Athens No. of Assets 51 GLA (sqm) MV ( mn) 537,1 % of TMV 73,5 % Greece: 88,1% International: 11,9% 10 Note: Market values are based on independent valuations as of 31/12/2013.

11 Recent transactions & pending investment Portfolio of four retail boxes in Athens and Thessaloniki Total GLA of c. 65,100 sqm with Praktiker Hellas as anchor 100% occupancy rate, annual rental income of 5.5m Transaction cost: 50m Transaction concluded in 2013Q4 Hellenic Republic, Sale & Leaseback Portfolio of 14 assets in Athens and locations around Greece with c. 136,000 sqm of office areas 100% occupancy rate, annual rental income of 14.05m Transaction price: 145.8m Transaction concluded on May 12 th, 2014 Portfolio of three warehouses in Aspropyrgos Newly constructed assets with modern specifications and total GLA of c. 39,000 sqm 100% occupancy rate, annual rental income of 2m Transaction price: 17m Acquisition of two warehouses was concluded in 2014Q1, the third warehouse is expected to be concluded in 2014Q2 11

12 Appendices Balance Sheet Debt portfolio analysis REIC Legal Regime Tax Regime European Discounts to NAV Share Performance Comparison 2014 Market Outlook 12

13 Balance Sheet Debt portfolio analysis Balance Sheet Debt Portfolio in thousands 31/03/ /12/2013 in thousands 31/03/ /12/2013 Investment property PPE, Goodwill and Intangible assets Deferred tax asset Other long term receivables Non-current assets Eurobank Properties REIC (Emporiki Leasing S.A.) Eliade Tower S.A (Eurobank Private Bank Luxembourg S.A.) Reco Real Property SPV (EFG New Funding B.V.) Trade and other receivables Cash and cash equivalents Current assets Total Assets Reco Real Property SPV (EFG New Funding B.V.) Reco Real Property SPV (EFG AD Beograd) Bank Debt Current income tax liabilities Other Payables Total Liabilities Seferco Development S.A (Eurobank Private Bank Luxembourg S.A.) Eurobank Properties REIC (Eurobank Ergasias Leasing S.A.) Share capital Share premium Own shares (4.894) (6.735) Other reserves Retained earnings Total Equity Total Liabilities & Equity Eurobank Properties REIC (Alpha Bank) Cloud Hellas Ktimatiki S.A (HSBC) (1) Eurobank Properties REIC- overdraft (Eurobank Ergasias S.A.) Total Debt ) The loan of Cloud Hellas Ktimatiki S.A. was fully repaid in 02/2014.

14 REIC Legal Regime- New favorable legislation introduced New Law 4141/2013 which was enacted on , as further supplemented by law 4209/2013, improved the legal regime governing Greek REICs in the following areas: 1) Greater investment horizon by allowing investments in: Residential assets, hospitality real estate business, marinas etc (1) Long- term concessions Property development (1) 2) Flexibility in investing through structuring and investing in: JVs for property acquisition or development- minimum 25% share SPVs that have the same business objects as REICs- minimum 80% share Holding companies which hold shares in the above SPVs- minimum 80% share Regulated mutual and alternative investment funds that invest solely or mainly in shares of real estate companies or real estate mutual funds- minimum 80% share Furthermore Can borrow funds up to 75% of their total assets (previously 50%) Are obliged to distribute at least 50% of their net profits (previously 35%) Corporate governance rules and supervision by regulatory authorities were strengthened, ensuring more transparency and accountability 14 (1) Certain restrictions in the framework exist. Total investments in residential assets must be lower than 25% of total investments. Maximum cost of property development must be up to 40% of the total value of the portfolio.

15 Tax Regime Favourable tax structure linked with ECB Ordinary Corporate Taxes Eurobank Properties Taxes Income tax 26% on profits 0,125% on average of fair value of investment property and cash & cash equivalents of two semesters (1) 3% property transfer tax No property transfer tax Registration duties 4.75%o on the purchase price of the asset Registration duties 1.75%o on the purchase price of the asset 26% Capital Gains Tax as taxable income No Capital Gains Tax 10% Tax on Dividends No Tax on Dividends 15 (1) The taxation formula is the following: 10% * (ECB reference + 1%). The current reference rate is 0,25%, therefore the current rate for the company is 10% *(1%+0,25%) = 0,125%

16 European Discounts to NAV Discounts in Europe (January 31, 2014) FTSE EPRA/NAREIT Europe Index Discount to Published NAV 16 Source - Monthly published NAV Bulletin, January 2014

17 Share Performance Comparison EuPro vs. HELEX (1) & FTSE Large Cap, EuPro vs. HELEX, /1/2013 2/5/2013 2/9/2013 2/1/2014 2/5/ /1/2010 4/9/2010 4/5/2011 4/1/2012 4/9/2012 4/5/2013 4/1/2014 HELEX FTASE Large Cap EuPro HELEX EuPro EuPro Market Cap Ranking in HELEX (2) (1) HELEX: Hellenic Exchanges (2) According to average annual market capitalization

18 2014 Market Outlook Previous 3-year period facts 2014 Outlook Limited institutional investment activity. Rental drop is expected to slow down. For prime Tenants orientation in applying cost effective solutions was the driver for occupying activity; relocations in smaller spaces & lease negotiations. Sharp drop in rental values and rise in vacancy rates. Asking yields presented only modest rise in 2011 and This inflexibility was reflected on the limited volume of transactions. The rising trend in yields was stronger in 2013, leading to rationalization of implied unit prices and increase in the volume of transactions Development pipeline kept in very low levels due to high uncertainty and limited demand locations, bottom seems to have been reached, with few exceptions. Pressure will remain on rents for second quality retail and office buildings; tenants identify the opportunity to relocate in more prime locations or cost-effective assets Due to lack of new supply, vacancy rate to remain low for prime assets. Attractive investment opportunities are expected to arise, including public sector assets High cost of money and limited financing to provide cash-rich investors with opportunities. 18

19 Contact For further information please contact: Mr George Chryssikos, Chief Executive Officer - telephone number: , gchryssikos@eurobank.gr or Mr Paris Varfis, Chief Financial Officer - telephone number: , pvarfis@eurobank.gr Mrs Natalia Strafti, Chief Operating Officer - telephone number: , nstrafti@eurobank.gr Company s website: 19