Corporate www.larespana.com Presentation December 2016 2 - PowerPoint PPT Presentation

Corporate www.larespana.com Presentation December 2016

2 Snapshot Shareholder Structure  First IPO of a Spanish REIT listed on the Spanish Stock Exchanges  First IPO of a Spanish REIT listed on the Spanish Stock Exchanges  Focused on creating both sustainable income and strong capital returns  Focused on creating both sustainable income and strong capital returns PIMCO for shareholders for shareholders 20.03% Other investors 46.1% Brandes Investment  Lar España is externally managed by Grupo Lar, private Real Estate Asset  Lar España is externally managed by Grupo Lar, private Real Estate Asset Partners Manager, Investor and Developer with a 40 year track record of Manager, Investor and Developer with a 40 year track record of 3.0% international experience international experience Franklin Templeton Institutional 15.1%  Lar España is a leader in retail, due to the size of the portfolio and the  Lar España is a leader in retail, due to the size of the portfolio and the Bestinver Gestion quality of the assets as well as the capacity and quality of its management quality of the assets as well as the capacity and quality of its management 4.2% Columbia Management Threadneedle Blackrock Inc. 3.5% 5.2% 3.1%  A clear investment opportunity in a unique shopping experience platform  A clear investment opportunity in a unique shopping experience platform

3 Governance Structure Independent and experienced Board: Critical Activities internalized 4 independent directors (4 out of 5) José Luis del Valle Roger Cooke Pedro Luis Uriarte Sergio Criado Jon Armentia Susana Guerrero Chairman and Independent Independent CFO Corporate Legal Independent Director Director Director Manager Manager Alec Emmott Miguel Pereda Juan Gomez-Acebo Hernán San Pedro José Díaz Morales Secretary Internal Audit Independent Grupo Lar Head of Investor Non Member Director Relations

4 Retail platform + non-retail assets MALL Offices Offices Logistics Logistics Residential Residential Retail Retail Offices in consolidated locations of Focus on logistic properties on Development of first homes in Madrid and Barcelona with good a selective basis with low rents, prime niche markets without Top retail player connections / public transport low capital values and high zoning risk, limited supply and yields clear demand Leading Shopping Centres in their Recurrent activity with selective catchment area rotation Retail parks with proven demand and profitability potential Good quality properties with excellent access and visibility 6% 6% 14% 14% 5% 5% GAV GAV GAV GAV GAV GAV 75% 75% GAV GAV

5 Portfolio distribution Location by asset class 10 6 13 4 15 RETAIL 7 9 12 5 75% GAV 5 OFFICES 20 21 22 1 23 24 14% GAV 17 16 26 19 18 11 5 LOGISTICS 6% GAV 14 25 3 1 RESIDENTIAL 2 8 5% GAV 15

6 Lar España Strategy Special focus on under managed assets First IPO of a Spanish REIT listed on the Spanish Stock Real Estate Manager with objective of implementing Exchanges MANAGEMENT MANAGEMENT an Active Management Strategy in order to deliver “Alpha” >100 Real Estate Company’s business strategy is to experts contributing acquire primarily retail property to Lar España’s value delivery with high return potential for rental COMPANY COMPANY purposes 35% Net LTV CAPITAL CAPITAL Diversification of sources of funding Focused on creating both including bank and debt capital markets STRUCTURE STRUCTURE sustainable income and strong capital returns for shareholders Highly compelling 2.24% cost of debt Back loaded debt amortization profile

7 Retail Assets Focus on shopping centres and retail parks 1 Key assets in their catchment areas Key assets in their catchment areas Locations Locations Locations selected based on: Locations selected based on:   Prime assets in their area of influence Prime assets in their area of influence Level of competition Level of competition     Close to 500,000 sqm GLA Close to 500,000 sqm GLA Current GDP per capita and future growth outlook Current GDP per capita and future growth outlook     Impact of tourism as an additional factor in some assets Impact of tourism as an additional factor in some assets Unique platform Unique platform Strength of the portfolio Strength of the portfolio A unique platform, which provides an attractive position with A unique platform, which provides an attractive position with Strength based on: Strength based on: retailers and the opportunity to consolidate existing economies retailers and the opportunity to consolidate existing economies   Size of the portfolio (top-3) Size of the portfolio (top-3) Average size of the centres (2 nd in Spain) Average size of the centres (2 nd in Spain) of scale of scale   Quality and attractiveness of assets Quality and attractiveness of assets  

8 Non-Retail Assets Opportunistic approach to other assets 2 Core locations Core locations Focus on value added assets Focus on value added assets   Luxury residential for sale Luxury residential for sale Management as a key element to make acquisitions and Management as a key element to make acquisitions and   Offices in Madrid and Barcelona Offices in Madrid and Barcelona generate differential value, taking advantage of Grupo Lar’s generate differential value, taking advantage of Grupo Lar’s   Logistics in main markets as a good complement to retail Logistics in main markets as a good complement to retail platform in Spain platform in Spain All assets 3 Development Development Asset Rotation Asset Rotation Using experience and capacity of development as a Using experience and capacity of development as a Rotation of assets held for at least three years based on value Rotation of assets held for at least three years based on value differentiating element to achieve better returns with moderate differentiating element to achieve better returns with moderate generation and returns generation and returns risk risk

9 Main Figures EPRA Net Initial Yield: 5.8% & EPRA Topped-up NIY GAV (€ Mn) 6.2% 6.3% Residential Developments Retail Logistics 5% 10% 6% Offices 2.9% 2 4.4% 14% Offices €1,201 1 €1,201 1 7.0% 7.2% Logistics Retail 75% Rental Properties EPRA Occupancy Rate: 90% 92.8% EPRA Annualized Net Rent (€ Mn) Logistics 92.6% 8% Retail Offices 7% 88.5% 2 €62.7 Offices Retail 85% 100.0% Logistics 1. Total GAV = Valuation of assets as of 30th June + acquisition price Gran Vía de Vigo + invested Capex (€10 Mn) 2. Marcelo Spínola’s EPRA NIY and EPRA Occupancy rate is not calculated due to the lack of representativeness. To calculate the NIY for the total portfolio we have excluded the data from Marcelo Spínola

10 Valuation Valuation Bridge Since Acquisition € Mn (2) 1,201 Revaluation H1 2016 1,050 (1) 42 118 €42Mn 48 Yield Impact 47% 851 Management Impact 53% Acquisition & Acquisitions H12016 Revaluation H12016 GAV Revaluation 2014-15 Revaluation Aquisitions 1. Market Value determined by JLL and C&W as of 30 June 2016 2. € m 1.201 included Gran Via de Vigo.

11 9M 2016 Highlights €1,201 +71% vs GAV 1 Q3 2015 Mn €42.2 Rental +80% vs EPRA NAV EPRA NAV €757.9 €8.4 Income Q3 2015 (€ ‘000s) Mn per share 2.24% EPRA 6.1% 5.8% Net LTV 2 35% EPRA “topped-up” NIY Cost of Debt Net Initial Yield Tenants Sales Growth €18.8 +56% vs €62.7 EPRA EPRA outperforming the market +9.2% Earnings 9M 2015 Annualised Net Rent 3 9M 2016 xMn Mn Footfall outperforming EPRA 34.6% EPRA Cost Ratio 92.8% +6.5% the market Occupancy Rate 9M 2016 1. Total GAV = Valuation of assets as of 30th June + Gran Vía de Vigo + invested Capex (€10 Mn) ROE 4 ROA 4 10% 6% 2. Net LTV as of 30 September 2016 3. Includes only operating assets generating rents by the end of September 2016 4. Indicators calculated using the figures from the last 12 months

12 LAR España has a clear objective Consolidate among the top 3 retail operators in Spain: Target to selectively increasing GLA to generate revenue synergies Owned GLA Estimate % Ownership Spain Total Retail GLA by Size Other Very Large Peer 1 15.5 M sqm 15% 15% Peer 2 Retail Park 12% Lar España + Dev + Lar España + #3 #1 1 470,000 80% Large & Upcoming Acq Developments 1 Medium Small 47% 10% Peer 3 Peer 4 SCs fitting LRE’s strategy by size Fit LRE Size and Value Added Strategy Peer 5 N/A Peer 6 9.2 M sqm Value Added Opportunity Peer 7 4.5-6.0 M sqm Peer 8 Regional Opportunistic Prime Peer 9 SCs fitting LRE’s strategy by size and segment 1. Lar España Includes development projects (Palmas Altas and Vidanova Parc)

13 Retail Operating Performance 16% Rotation rate +20,051 Sqm leasing activity Since Acquisition 9M 2016 Average holding period 16.3 months REPOSITIONING +4.9% NOI +4% Improvement in revenues Since Acquisition of common areas Average holding period 16.3 months Since Acquisition VALUE CREATION 52 Mn 92.6% EPRA Occupancy Annualized visitors +1p.p. vs FY 2015 +9.2% Sales +6.5% Footfall vs +2.7% Retail 9M 2016 vs Sales index 1 9M 2016 1.3% Avg. Footfall Index Spain 1. Source: INE 13