Development LTD August 2019 2 Forward - Looking Information The - - PowerPoint PPT Presentation

development
SMART_READER_LITE
LIVE PREVIEW

Development LTD August 2019 2 Forward - Looking Information The - - PowerPoint PPT Presentation

IR Presentation Adgar Investments & Development LTD August 2019 2 Forward - Looking Information The information included in this presentation is information based on information included in the Company s periodic report as of


slide-1
SLIDE 1

August 2019

IR Presentation Adgar Investments & Development LTD

slide-2
SLIDE 2

2

Forward - Looking Information

▪ The information included in this presentation is information based on information included in the Company’s periodic report as of June 30, 2019 and December 31, 2018 and as published through the distribution site of the Israel Securities Authority (MAGNA) as well as on prior presentations and immediate reports published by the Company and cannot replace study of the Company reports stated above. In addition, the presentation includes data and information presented in a manner and/or edited and/or segmentation that differ from those presented in the Company's reports and in the Company's past reports, or such that can be calculated from the data included in the Company’s reports. ▪ The report does not constitute an offer to purchase Company securities or an invitation to receive such offers and was intended solely to provide information to investors and the information does not constitute the basis for making an investment decision, a recommendation or an opinion, nor does it provide a substitute for reasoned deliberation by a potential investor. The Company is not responsible for the completeness and/or precision of the information, and shall bear no responsibility for any damages and/or losses that may be caused as a result of use of the information. ▪ This presentation features forecast information ("forward-looking information"), as defined in the Securities Law, 5728-1968. Such information includes, among other things, forecasts, goals, assessments and estimates made by the Company referring to future events or matters, the realization of which is not certain and is not under the Company's control and which are known to the Company as of the publication of this presentation. By its nature, forward-looking information is subject to the risk of it not being realized and such information is uncertain. ▪ Realization of the forward-looking information shall be influenced by risk factors that characterize the Company's activity as well as developments in the economic environment in which the Company is active and in outside elements that may influence the Company’s activity. ▪ Therefore, readers of this presentation are hereby warned that the Company's actual results and achievements in the future may be differ materially from those presented in the forward-looking information presented in this presentation. ▪ Furthermore, forward-looking forecasts and estimates are based on data and knowledge in the Company’s possession upon publication of this presentation and the Company do not undertake to make any update or change in any such forecast and/or estimate so that they reflect events or circumstances applying after the presentation publication date. ▪ It is clarified that the Company do not undertake to update the information included in the presentation.

slide-3
SLIDE 3

3

Group Structure Summary

Adgar Investments & Development LTD

(19.9% Migdal)

80.1%

Adgar Canada Inc Adgar I&D Belgium N.V

Poland Canada Adgar I&D Poland N.V Belgium

Unless stated otherwise, ownership interest is 100% Adgar partnerships are 100% owned and have a 50% interest in most properties with local partners.

slide-4
SLIDE 4

4

Adgar Investments & Development LTD

38 properties 368 thousand m2 of leasable space Located in major City Centers – Toronto, Tel Aviv, Warsaw, Antwerp Occupancy (marketing) rate of 90% as at June 30, 2019 Real Estate Portfolio Value of approximately 4.1 Billion NIS

Rating

Real Estate Value – 4B

Diversified Geographically Occupancy

Bond rating – A3

Variety of workspace solutions Classic Lease

50+ Employees 15 -50 Employees

Brain Embassy

1-15 Employees

Brain Embassy

Dividend distribution of at least 50%

  • f the annual shareholders FFO

Dividend policy for 2018-19

The property Adgar 360 (A+B) worth approx. 800 million NIS is without debt.

(The property is pledged against an unused 350 million NIS credit line)

Financial Flexibility

slide-5
SLIDE 5

Number of Properties

6

Leasable area thousand m²

83

Occupancy as at 30.6.19

91% (94% Marketed)

assets value

1,123M NIS

5

Real Estate Assets as at 30.6.2019

1) Not including Investment property under construction – Adgar 360 C. 2) Company’s share is 80.1%. 3) Not including Investment property under construction – Property under construction in Poland (Fully owned by the company).

Israel Canada Belgium Poland

2

Total

( 1 )

Number of Properties

23

Leasable area thousand m²

149

Occupancy as at 30.6.19

91% (94% Marketed)

Assets value

1,508M NIS

Number of Properties

6

Leasable area thousand m²

109

Occupancy as at 30.6.19

80% (82% Marketed)

Assets value

989M NIS

Number of Properties

3

Leasable area thousand m²

27

Occupancy as at 30.6.19

87% (90% Marketed)

Assets value

198M NIS

Number of Properties

38

Leasable area thousand m²

368

Occupancy as at 30.6.19

87% (90% Marketed)

Assets value

3,818M NIS

(3)

slide-6
SLIDE 6

Poland 21% Israel 35%

6

Geographically Diversified & Balanced in Growing Markets

▪ Geographic spread by Company’s share in investment property value for 30.6.19

Belgium 5% Canada 39%

slide-7
SLIDE 7

7

Some of our Tenants

Invesco GSK Softchoice IBM CIBC General Motors Bank Of Montreal Government of Israel Government of Poland Government of Belgium Embassy of Germany, Tel Aviv

  • M. Firon & Co. Advocates

I.D.I Insurance Company LTD. Direct Finance (Mimun Yashir)

slide-8
SLIDE 8

Equity to Balance Ratio (Cash deducted)

8

Bank debt to pledged assets - LTV

Financial Ratios

Total financial debt, net. (including bonds) to Investment Property is approx. 67%

23.4% 23.0% 26.6% 25.3% 25.4% 24.9% 24.3% 27.8% 26.8% 26.9%

20% 22% 24% 26% 28%

2015 2016 2017 2018 30.6.19

Equity Ratio (Cash deducted) Equity Ratio (Cash deducted), Migdal loan sorted to Equity

46% 44% 38% 39% 36%

30% 35% 40% 45% 50%

2015 2016 2017 2018 30.6.19

slide-9
SLIDE 9

Repayment of Bond Principal

9

Decrease in average Real Interest Rate for Bonds

Bonds (Million NIS)

200 400 600 800 1,000 1,200 1,400 1,600 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Outstanding Bonds Real Interest rate

153 231 231 317 232 232 86 86

  • 100

200 300 400 2020 2021 2022 2023 2024 2025 2026 2027

slide-10
SLIDE 10

10

Key Parameters – Reports for 30.6.2019 (million NIS)

As at 30.6.19 30.6.18 31.12.18 Cash & Securities 247 352 323 Investment Property & Under construction 4,088 3,930 4,061 Total Assets 4,527 4,454 4,570 Current Liabilities 462 468 490 Non - Current Liabilities 2,977 2,938 3,007 Equity 1,088 1,048 1,073 Shareholders Equity 1,054 1,006 1,034 Period 1-6/2019 1-6/2018 1-12/2018 Rent income 123.2 119.8 243.3 NOI 113.5 110.9 224.9 EBITDA 91.6 90.7 183.4 Net profit 68.9 21.6 65.1 Net profit attributed to shareholders 70.8 24.1 71.4 Comprehensive income attributed to shareholders 40.0 29.2 72.7

slide-11
SLIDE 11

11

NOI Growth (Million NIS)

* After selling a stake of 25% of 12 properties in Canada in May 2012 and an additional 25% in January 2014.

** See slide no. 12 See slide no.2 regarding forward-looking information

146 167 173 171 174 192 (* 190 186 (* 173 204 206 225 229 261

100 150 200 250 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Annual rate during 2020 ** Annual rate according to Q2/19

slide-12
SLIDE 12

12

Annual NOI rate forecast for 2020 (Million NIS – Exchange rates as at 30.6.2019)

1) Calculated according to a growth in occupancy by 4% in Poland and expected increase in revenues from Brain Embassy. See slide no. 2 regarding forward- looking information.

229 150 170 190 210 230 250 270

Annual Rate according to Q2/19 Including increase from singed contracts for pre-occupied areas at Adgar 360 Including increase from singed contracts for pre-occupied Including expected increase from fully leasing Adgar 360 C Including expected increase in

  • ccupancy rates (1)

NOI – Million NIS

261 231 236 258

slide-13
SLIDE 13

14.0 15.1 15.2 17.1 17.8 17.8 17.3 18.6 19.7 18.2

6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 MILLION NIS

FFO

2017 61.4 2018 71.5

13

Shareholders FFO - Quarterly

8.3%

Yearly increase from 2016

16.4%

Yearly increase from 2017

slide-14
SLIDE 14

14

Adjusted FFO Forecast (Million NIS)

2016

56.7

2017

61.4

2018

71.5

Forecast 2019

75-80

Forecast 2020

80-85

*) Including occupancy assumptions regarding existing properties & projects in marketing process. Without effects of other possible changes i.e. changes in exchange rates and changes in finance expenses due to change in interest rates. Furthermore, not including FFO from purchasing additional properties (as well as selling properties). See slide no.2 regarding forward-looking information.

slide-15
SLIDE 15

Adgar – Accompanying the tenant through every stage

15

Classic Lease

50+ Employees 15 -50 Employees

Brain Embassy

1-15 Employees

Brain Embassy

slide-16
SLIDE 16

Brain Embassy awards

16

Leasing

םידבוע+50

❖7th of The 50 Best Co-Working Spots In Europe - Big Seven Travel

https://bigseventravel.com/2019/03/europe-coworking/

❖ Best All Inclusive Office, Eurobuild Awards, ❖ Workplace Arrangement of the Year, Eurobuild Awards, ❖ Office Superstar, CBRE, ❖ International Media Design Award in the Annual Office Space Award category in Shenzhen, China.

slide-17
SLIDE 17

Brain Embassy: Co-working Spaces & Immediate rental suites

17

Boutique offices Offices emphasizing the construction of a creative work environment with a high level of finish Flexibility Short-term rentals with the

  • ption to

expand or reduce rental space Availability Immediate rental using a dedicated app Efficiency Maximal utilization of public spaces Occupancy An engine to grow property occupancy; a draw for potential tenants Additional services Potential for income growth from additional services

slide-18
SLIDE 18

Brain Embassy: Co-Working Space – Warsaw, Poland

Adgar Park West

3,000 m² - Fully occupied

Adgar Plaza One

2,400 m² - 35% Occupancy

Adgar Bit - Warsaw, Poland

2,300 m² - Launched at

September 2018, 50% Occupancy

Warsaw City Center:

At November 2018, an additional property was acquired in the city center, with a 4,000 m² of leasable area purposed for Brain Embassy.

18

slide-19
SLIDE 19

Brain Embassy: Immediate rental suites (15-50 employees) – Warsaw, Poland

Leasable Area - Adgar Wave

1,400 m² - Fully occupied

Leasable Area - Adgar Park West

1,300 m² - Fully occupied

Leasable Area - Adgar Bit

1,400 m² - Launched at

September 2018, Fully Occupied

Leasable Area - Adgar Plaza

1,600 m²

Construction Completed at March 2019, 34% occupancy

*For forward-looking information, see Slide 2 19 19

slide-20
SLIDE 20

Israel

slide-21
SLIDE 21

21

Properties in Israel

Adgar Tower – 35 Efal st. Petah Tikva Adgar 360 – 2 Ha’shlosha st. Tel Aviv Adgar 360 – 2 Ha’shlosha st. Tel Aviv

slide-22
SLIDE 22

Cost of Completion

(Including 4 floors purposed for Brain Embassy)

35M NIS

Construction is expected to be completed during the third quarter

  • f 2019

Expected Income - full occupancy

(Including Brian Embassy)

22-23M NIS Adgar 360 C

Adgar 360 B

Adgar 360 A

Simulation

22

* Leased unit is approx. 10% of the Brain Embassy area at the property ** See slide no.2 regarding forward-looking information

**

Project in execution – Adgar 360 C, Ha’shlosha st. Tel Aviv

Building Under Construction

17,000 m²

Book Value

233M NIS

**

slide-23
SLIDE 23

23

Project in Planning Phase – 33 Efal st. Petah Tikva

33 Efal st., Petah Tikva

At July 2019, the regional committee approved an outline plan with increased building rights for the employment area

  • f Kiryat Arye in Petah Tikva,

which includes the land owned by the company.

Simulation

Light Rail station under construction; a pedestrian overpass is planned from the station to near the property *

* See slide no. 2 regarding forward-looking information

slide-24
SLIDE 24

Canada

slide-25
SLIDE 25

25

Properties in Toronto, Canada

55 York St 350 Burnhamthorpe Rd W 9050 Yonge St 1 Richmond St W 365 Bay St 170 University Ave 800 Bay St 120 Bloor St E 1881 Yonge St 1867 Yonge St 110 Eglinton Ave E 40 Eglinton Ave E 75 Eglinton Ave E 40 Holly St 300-306 Town Centre 2&20 Atlantic Ave 159/173 Dufferin St 161 Liberty St 2 Fraser Ave 42 Fraser Ave 7-15 Fraser Ave 30 Fraser Ave 2001&2005 Sheppard 111 Gordon Baker

slide-26
SLIDE 26

365 Bay St

26

Portfolio - Toronto Downtown

1 Richmond St W 55 York St 800 Bay St 170 University Ave 120 Bloor St E

slide-27
SLIDE 27

75 Eglinton Ave E 40 Eglinton Ave E 110 Eglinton Ave E 1881 Yonge St

27

Portfolio - Toronto Midtown

1867 Yonge St 40 Holly St

slide-28
SLIDE 28

300-306 Town Centre Blvd, Markham 9050 Yonge St, Richmond Hill

28

Portfolio - Suburban (Nearby main transport routes)

2001&2005 Sheppard, Heron’s Hill 350 Burnhamthorpe Rd W, Mississauga 111 Gordon baker, North York

slide-29
SLIDE 29

Exhibition GO Station

South Liberty Trail

29

Liberty Village Portfolio

Co-Ownership with a local partner +/- 38,000 m² of leasable area on

  • approx. 41,000 m²
  • f land

Company’s share +/- 24,000 m² of leasable area on

  • approx. 22,000 m²
  • f land
slide-30
SLIDE 30

161 Liberty 159/173 Dufferin St 2 Fraser Ave 7/15 Fraser Ave 2 & 20 Atlantic Ave

Liberty Village is a successful former Industrial Area Re-Purposed for mixed use of residential, retail and office.

30

Liberty Village Portfolio

slide-31
SLIDE 31

31

Dufferin - Liberty Village

The company is working to obtain building rights for an

  • ffice building of
  • approx. 25,000 m²

and 162 parking places.

slide-32
SLIDE 32

Poland

slide-33
SLIDE 33

33

Properties in Warsaw, Poland

4.5 km 2.7 km

0,6 km

4 km

Acquired at November 18 Property under construction

(Fully owned by the company)

slide-34
SLIDE 34

Properties in Warsaw, Poland

Adgar Park West Adgar Wave BMW Adgar Plaza Adgar Bit

slide-35
SLIDE 35

35

Poland - Adgar Park West

Post renovation Pre Renovation Post renovation Pre Renovation

slide-36
SLIDE 36

Property Under Construction –

Fully owned by the company Acquired at November 18 for approx. 35 million NIS

  • Approx. 4,000 m² purposed for the Brain Embassy

Cost of additional investment - approx. 40 million NIS

Property Under Construction – Czackiego, Warsaw City Center

36

Simulation

slide-37
SLIDE 37

Belgium

slide-38
SLIDE 38

38

Properties in Belgium

Veldkant 39 2550, Kontich Plantin en Meretuslei 12 2000, Antwerpen Italielei 120-124, Antwerpen (Theater building)

slide-39
SLIDE 39

Summary

39

Local Professional Adgar Management Teams Variety of leasing options Brain Embassy Financial Flexibility Growth in

  • perational

parameters & FFO High quality yielding properties in City Centers Strong Occupancy Rates Geographic Diversity in growing markets Material income addition from existing properties

slide-40
SLIDE 40

Thank you

Simulation