August 2019
Development LTD August 2019 2 Forward - Looking Information The - - PowerPoint PPT Presentation
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
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.
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.
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
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)
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%
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)
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
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
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
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
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
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
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.
Adgar – Accompanying the tenant through every stage
15
Classic Lease
50+ Employees 15 -50 Employees
Brain Embassy
1-15 Employees
Brain Embassy
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.
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
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
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
Israel
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
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
**
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
Canada
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
365 Bay St
26
Portfolio - Toronto Downtown
1 Richmond St W 55 York St 800 Bay St 170 University Ave 120 Bloor St E
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
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
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
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
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.
Poland
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)
Properties in Warsaw, Poland
Adgar Park West Adgar Wave BMW Adgar Plaza Adgar Bit
35
Poland - Adgar Park West
Post renovation Pre Renovation Post renovation Pre Renovation
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
Belgium
38
Properties in Belgium
Veldkant 39 2550, Kontich Plantin en Meretuslei 12 2000, Antwerpen Italielei 120-124, Antwerpen (Theater building)
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
Thank you
Simulation