ANNUAL REPORT 2018 Helgi S. Gunnarsson 13 th February 2019 - - PowerPoint PPT Presentation

ANNUAL REPORT 2018

Helgi S. Gunnarsson 13th February 2019

OPERATIONAL INCOME 8,288 m.ISK.

LEASING INCOME

7,737 m.ISK.

⇧ 17%

OPERATIONAL RESULTS BEFORE ASSESSMENT CHANGE 5,390 m.ISK .

⇧ 19%

OPERATIONAL RESULTS BEFORE ASSESSMENT CHANGE / LEASING INCOME

70%

PROFIT AFTER TAX 3,226 m.ISK.

⇩ 15%

YIELD OF INVESTMENT PROPERTIES 4Q-2018

5,2%

REAL RETURN ON EQUITY

8,9%

OPERATIONS AND RESULTS - 2018

YIELD OF INVESTMENT PROPERTIES 2018

4,9%

900.000 1.100.000 1.300.000 1.500.000 1.700.000 1.900.000 2.100.000 2.300.000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Amounths in th. ISK.

Leasing income Operational results before assessment change

2016 2017 2018

OPERATIONS AND RESULTS - 2018 Cont.

• Calculated ASSESSMENT CHANGES of investment properties for the period

were 2,910 m.ISK.

• INVESTMENT PROPERTIES at the end of the period were assessed at

128,748 m.ISK. and the equity ratio was 32%.

• INTEREST BEARING DEBTS were 80,488 m.ISK. at the end of the period

compared to 57,515 m.ISK. at end of the year 2017 . Leverage as a percentage of investment properties is 63%.

• INTEREST EXPENCES in the year amounted to 2,602 m.ISK. compared to

2,017 m.ISK. for the year 2017. Total financial expenses were 4,352 m.ISK. compared to 2,750 m.ISK. for the year 2017.

• NET CASH from operations amounted to 2,641 m.ISK. in the year. Net Cash

at the end of the year was 2,490 m.ISK.

OBJECTIVES:

PROPERTIES OPERATIONAL COSTS

20%

ADMINISTRATIVE COSTS

5,0%

DEVELOPEMENT OF OPERATIONAL COSTS

OPERATING COSTS OF INVESTMENT PROPERTIES Costs consistent with plans. Good progress in expense

• management. Acquisition of properties entwined to HTO
• ehf. and FAST-2 ehf. (RA 16 ehf.) reduce proportionally

the operational costs. The increase in public property valuation in recent years influence directly the rise in property taxation. Provisions in leasing agreements increase rent due to property taxation was imposed at the beginning

• f

the year. Applies to about 50%

• f

agreements.

ADMINISTRATIVE COSTS

Administrative costs are lower than plans and objectives. The company's management units have been very successful in incorporating new property portfolios.

3,00% 4,00% 5,00% 6,00% 7,00% 8,00% 9,00% 10,00%

• 100.000
• 95.000
• 90.000
• 85.000
• 80.000
• 75.000
• 70.000
• 65.000
• 60.000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Percentage of leasing revenues Amounths in th. ISK Administrative expenses Ratio of leasing income 2016 2017 2018 18,0% 19,0% 20,0% 21,0% 22,0% 23,0% 24,0% 25,0%

• 470.000
• 430.000
• 390.000
• 350.000
• 310.000
• 270.000
• 230.000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 percentage of leasing revenues Amounths in th. ISK Operating cost of investment properties Ratio of leasing income 2016 2017 2018

OPERATIONS AND PROSPECTS

Quarterly Overview 4Q 2018 3Q 2018

Leasing revenues 2,306 1,922 Revenues, Operations in properties 138 134 Total revenues 2,444 2,056 Operational costs of investement properties

• 466
• 452

Operational costs in properties

• 235
• 155

Administrative costs

• 99
• 90

Gross profit before assessment changes 1,644 1,359 Assessment changes of investment. properties 978 655

Results from operations 2,622 2,014

• Rental revenues have increased in line with plans. Operation of the company is successful and in line

with plans.

• Management and operations of the company’s supporting functions „Operations in properties” is

successful, and progressive achivement made after the takeover. By reorganisation, a better

• ptimization and overview of operations have been achived, the company’s management considers that

the quality of service has increased.

• The company has enforced the objective to increase significantly environmental awareness in all
• perational aspects.
• Demand for commercial properties is good. The emphasis placed on leasing to public entities and

strong occupants has been very successful.

• The leasing ration of the portfolio is now 97,5%.
• Nearly all spaces in Smáralind have been leased out. Leasing agreemens for large spaces, that had

been reserved for two international brands, were finalised last summer. Opening of these units will be this coming spring.

• Defaults have been minimal and are not escalating.

27% 26% 14% 9% 3% 16% 5%

REGINN’S PROPERTIES m2

Retail and service Office Office - puplic ent. Sport, education and entertainment - public Sport, education and entertainment Industrial and storage Hotel

• The Book Value of property portfolio was 128,748 m.ISK. at the end year 2018.
• This year the company has invested in property management companies and properties, that in

total have property portfolios valued at 30,900 m.ISK. There off investment in present properties is 7,000 m.ISK. The main investment weight is at Hafnartorg as investments in Smáralind, Egilshöll and Vesturvör 29.

• The large investments in the year, i.e. portfolios attached to FAST-1 slhf. and FM-hús
• ehf. were financed in part by increase in share capital.
• The company has sold properties for 2,300 m.ISK. The main weight on building rights south
• f Smáralind.
• REFINANCING. From spring 2017 the company has utilised a framework covering bond issuing of

the company. This framework was used in the year 2018 but on September 12th a closed tender for a new bond issue was finalised, REGINN250948, issued under the company’s bond

• framework. Bonds were sold for 17,180 m.ISK, bearing fixed 3.6% interest rate, indexed, to 30

years and sold at nominal value. The bonds are indexed by specially designed insurance

• arrangement. The bonds were listed on main marked of Nasdaq Iceland Ldt., last October.

INVESTMENT PROPERTIES AND FINANCING

NUMBER OF PROPERTIES

119

REGINN’S PORPERTY PORTFOLIO

368.903 m2

369

th.m2

86

th.m2 Public entities

PUBLIC ENTITIES

• Leasing progressing well and demand for most types of commercial

properties.

• This year to date new leasing contracts completed for over 40 th. m2. There
• ff is about third in renewal of older contracts.
• Leasing rate is in line with the company’s expectations.
• Un-leased space is about 10,200 m2 . In the next 6 months about 8,600 m2

will become available.

57.977 40.507

10.000 20.000 30.000 40.000 50.000 60.000 Leased square meters (cumulative)

Quarter

LEASED SQUARE METERS

2016 2017 2018

LEASING - SUPPLY AND DEMAND

Q1 Q2 Q3 Q4 1.000 2.000 3.000 4.000 5.000

Industrial and storage Office Retail and service

Available m2 1.000 2.000 3.000 4.000 5.000

Industrial and storage Office Retail and service

SPACE TO BE ABAILABLE NEXT HALF YEAR

STRONG AND GROWING SERVICE CORES

REGINN’S COMMERCIAL PROPERTIES – In Reginn’s property portfolio are well located commercial properties in most major development and condensation cores in the capital

• area. HAFNARTORG AND HÖFÐATORG are located within land cores according to present

local plans by municipalities in the capital area. SMÁRALIND OG SMÁRABYGGÐ are located within the only zone core in the capital area. GROWTH – Service cores have been developed and expanded extensively in recent years. They are still expanding and taking shape i.e. the Town Transportation Line will influence the expansion and strength as following factors:

• Increased supply of residential housing and increased population.
• Increased supply of commercial housing and increased working population in core

zones.

• Increased recreation opportunities.
• Increased number of foreign tourists.
• Stronger emphasis on transportation – better access.

OPPORTUNITIES – The excessive growth will enhance opportunities to offer more services, from basic service as grocery stores to specialised service and recreation.

Hafnartorg Höfðatorg Egilshöll Smáralind / Smárabyggð Garðatorg / Litlatún Hafnartorg Höfðatorg Egilshöll Smáralind og Smárabyggð Garðatorg og Litlatún Picture: Cores and municipality limits in the capital area and examples of Reginn’s commercial properties – Ref: Samtök Sveitarfélaga á höfuðborgarsvæðinu

The company has proceeded by investing in strong cores in the capital region.

OPPORTUNITIES IN KATRÍNARTÚN TOWER

Unique properties with regard to quality, location and increased revenues.

• Work begun in reconsidering several factors in location plan and increased

revenues.

• Ground and first levels offer extensive opportunities for ideas.
• New glass building on top levels offer exciting options.
• Extensive opportunities in site and surroundings.
• Basement parking enhance future opportunities.

OPERATIONAL FORECAST 2019 - 2020

• The extensive new investments and restructuring of present properties of the company are mostly

finalised, and can be observed in the revenue generation of the company. Large projects as purchase of HTO ehf. and FAST-2 ehf. (RA16 ehf.) have great importance for the revenues and results of the company, and change all key figures extensively.

• The restructuring of Smáralind is in final stage and the retail centre will have reached peak

performance in the year 2019

• The commercial and service unit Hafnartorg will have reached full utilisation by autumn 2019, planned

the strong revenue basis for the property will be built up in next three years. Same applies for Austurhöfn, i.e. 2.700 m2 catering and commercial space at the side of the five star hotel Edition, but it is planned that this space will be operational by spring 2020.

• It is forecast that the leasing revenues of the company in the year 2019 will be 9.600 – 9.800

m.ISK. which is an 25% increase from the year 2019. It is estimated that revenues increase between 2019 and 2020 will be 6%

• As is predicted that the ratio of operational profit before assessment changes will be 71% in the year

2019 but will grow up to 73% the year 2020.

• Administrative costs is estimated about 4,5% of leasing revenues in the year 2019.
• Operational costs of investment properties is estimated 22% of leasing revenues in the year 2019.

20 LARGEST STOCKHOLDERS 7th FEBRUARY 2019

# Nafn Hlutir % 1 The Pension Fund of Commerce 243,105,301 13.31% 2 Gildi – (a pension fund) 158,201,461 8.66% 3 The pension fund for state employees, A - dep. 119,158,425 6.52% 4 Sigla ehf. (an investment company) 100,000,000 5.48% 5 Birta (a pension fund) 81,576,062 4.47% 6 Stapi (a pension fund) 72,135,266 3.95% 7 Brimgarðar ehf. (an investment company) 57.200,000 3.13% 8 Frjálsi lífeyrissjóðurinn (a pension fund) 50,237,004 2.75% 9 The pension fund for state employees, B - dep. 49,251,877 2.70% 10 Lífsverk (a pension fund) 47,941,808 2.63% 11 Global Macro Absolute Return A 46,771,138 2.56% 12 Söfnunarsjóður lífeyrisréttinda (a pension fund) 46,744,122 2.56% 13 Festa - (an investment company) 39,061,245 2.14% 14 Sjóvá-Almennar tryggingar hf. (an insurance company) 33,437,221 1.83% 15 Stefnir - ÍS 15 (an investment company) 30,944.749 1.69% 16 Stefnir - ÍS 5 (an investment company) 30,854.467 1.69% 17 Arion banki hf. 27,758.333 1.52% 18 FM eignir 1 ehf 25,205.819 1.38% 19 FM eignir 2 ehf 25,205.818 1.38% 20 Landsbankinn hf. 24,007.291 1.31% Total 20 largest stockholders 1,308,797,407 71.67%

THANK YOU