Echo Polska Properties N.V.(Incorporated in The Netherlands) (Company number 64965945) | JSE share code: EPP | ISIN: NL0011983374 | (“EPP” or “the Company” or “the Group”)
www.echo-pp.com
FINANCIAL STATEMENTS for the period 4 January to 31 December 2016 - - PowerPoint PPT Presentation
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS for the period 4 January to 31 December 2016 Echo Polska Properties N.V.(Incorporated in The Netherlands) (Company number 64965945) | JSE share code: EPP | ISIN: NL0011983374 | (EPP or the
Echo Polska Properties N.V.(Incorporated in The Netherlands) (Company number 64965945) | JSE share code: EPP | ISIN: NL0011983374 | (“EPP” or “the Company” or “the Group”)
www.echo-pp.com
This document has been prepared and issued by and is the sole responsibility of the management of Echo Polska Properties N.V. (the “Company” or “EPP”) and its subsidiaries. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the Directors’ beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future
based has not been reviewed or reported by EPP’s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, Java Capital or any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or
information.
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4.1 Retail 4.2 Office 4.3 Developments
www.echo-pp.com
DUAL LISTINGS ON
WARSAW DEVELOPMENT PROJECT
110 000m² Towarowa
LTV OF
Target of 50%
forecast at IPO)
Distributable income for 12 months to 31 Dec 2017
FORWARD YIELD OF
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YIELDING PORTFOLIO AT IPO
10 Retail (78% by value) 6 Office projects - 14 buildings (22% by value)
CURRENT & ANNOUNCED ACQUISITIONS YIELDING PORTFOLIO
15 Retail (74% by value) 9 Office projects - 18 buildings (26% by value) *Forward yield to 12 months ended 31 Dec 2017. Assuming a price of R18.50 and an EUR/ZAR rate of R13.70.
NET ASSET VALUE
12% increase in NAV per share post IPO
€1.16 per share, NAV excludes deferred tax
DISTRIBUTABLE INCOME
RAFAŁ KWIATKOWSKI CHIEF OPERATING OFFICER JACEK BAGIŃSKI CHIEF FINANCIAL OFFICER WOJCIECH KNAWA EXECUTIVE DIRECTOR Property Management MICHAŁ ŚWIERCZYŃSKI EXECUTIVE DIRECTOR Asset Management
HADLEY DEAN CHIEF EXECUTIVE OFFICER
MACIEJ DROZD OUTGOING CHIEF FINANCIAL OFFICER
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MANAGEMENT BOARD
TRANSACTION & LEGAL Acquisitions Compliance Legal Corporate Governance COMMUNICATIONS/IR Marketing & PR Administration HR Controlling Planning Treasury Reporting Budgeting Transactions FINANCE & ACCOUNTING PROPERTY MANAGEMENT Retail Operations Office Operations Integration Team Facility Management Analysis & Reporting IT ASSET MANAGEMENT
Retail Leasing Office Leasing Innovations EPP University
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Strategic partnership with Echo Investment SA, Griffin RE and Redefine
SUCCESSFULLY EXECUTED OR SECURED ACQUISITIONS TO DATE
SINCE LISTING INCREASED PORTFOLIO BY
PROPERTY MANAGEMENT COMPANY OF THE YEAR 2017 ANNUAL CEE RETAIL AWARDS
OVERSUBSCRIBED CAPITAL RAISE OF
AT 7.5% FORWARD YIELD
RESPONSE TO CHANGES IN TAX LEGISLATION
RESTRUCTURE
WINNER OF
BEST SHOPPING CENTRE OF THE YEAR – Galeria Echo RETAIL PROPERTY MANAGER OF THE YEAR – Grzegorz Czekaj EUROBUILD AWARDS 2016
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VACANCY (GLA): RETAIL 1.7% (as of Dec 2016) OFFICES 4.3% (as of Dec 2016) Footfall increase (yoy) 3.4 % Portfolio value increase3.3% (€41million) ON TRACK TO DELIVER
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Asset Management Development & Extensions Acquisitions
Creating a Polish national champion that leverages its scale and relationships to provide a leading and largest cash-generating property group that will deliver consistently high returns to our shareholders.
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www.echo-pp.com
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DPS (for the 4 month period to 31 Dec 2016)
€cents 3.14
Distributable Earnings (for the 4 month period to 31 Dec 2016)
€18.4 million
Total NAV1
€683 million
NAV per share
€1.16
Total assets
€1 509 million
Market capitalisation
€797 million
Cost of debt
1.85%
LTV
52.7%2
1NAV excluding deferred tax 2Value includes the investment in joint venture – Towarowa and unrestricted cash
13 Actual for the year ended PLS for the year ended Variance to PLS EUR million
31 Dec 2016 31 Dec 2016
Rental income and recoveries
95.3 94.0 1.3
Property expenses
(29.2) (29.9) 0.7
Net property income
66.1 64.1 2.0
Other income / (expenses)
(0.4) (0.2) (0.2)
Administrative expenses and corporate costs
(12.5) (9.6) (2.9)
Profit from operations
53.1 54.2 (1.1)
Finance income / (expenses)
(18.0) (19.4) 1.4
Amortisation of debt structuring fee
0.0 0.3 (0.3)
Tax
(0.9) (0.8) (0.1)
Prepaid rental income
(0.3) (0.2) (0.1)
Distributable income attributable to shareholders
34.0 34.3 (0.3)
Distributable earnings for the period 1 Sept to 31 Dec 2016
18.4 18.0 2.2%
Dividend for the period to 31 Aug 2016 (cents)
2.44 2.43 0.5%
Dividend for the period 1 Sept to 31 Dec 2016 (cents)
3.14 3.07 2.2%
14 Actual for the period ended Actual for the 6 month period ended PLS for the year ended EUR million
30 Jun 2016 31 Dec 2016 31 Dec 2016
Rental income and recoveries
38.5 56.8 94.0
Property expenses
(12.3) (17.0) (29.9)
Net property income
26.2 39.8 64.1
Other income / (expenses)
(0.9) 0.5 (0.2)
Administrative expenses and corporate costs
(5.7) (6.8) (9.6)
Profit from operations
19.6 33.5 54.2
Finance income / (expenses)
(9.9) (8.1) (19.4)
Amortisation of debt structuring fee
Tax
(0.6) (0.3) (0.8)
Prepaid rental income
(0.1) (0.2) (0.2)
Distributable income attributable to shareholders
9.0 25.0 34.3
15 Actual for the period ended
EUR million 31 Dec 2016 Earnings attributable to shareholders
76.8
Fair value adjustments (net of tax and minorities)
(44.7)
Headline earnings
32.0
Debt amortisation fee (net of taxation)
4.4
Straight-line and prepaid rental income accrual (net of taxation)
(1.5)
Deferred tax
18.5
Foreign exchange gains losses
(2.2)
Fair value gain in JV
(12.5)
Goodwill impairment
0.5
Capital gains
(5.3)
Distributable earnings
34.0
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Number of shares in issue
Net asset value per share
Loan to value (LTV)
1NAV excluding deferred tax 2Value includes the investment in joint venture – Towarowa and unrestricted cash
EUR million 31 Dec 2016 30 Jun 2016
ASSETS Investment properties
1 359 1 205
Investment in JV
54
19 24
Trade, VAT and other receivables
33 7
Cash and restricted cash
44 24
Total assets
1 509 1 260
EQUITY AND LIABILITIES Share capital and premium
570 474
Accumulated profit /(loss)
54 50
Deferred tax liability
59
769 700
VAT borrowings
26
31 36
Total equity and liabilities
1 509 1 260
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NAV per share increase
€ million Number of shares NAV per share (€)
Pro forma NAV as at 30 Jun 2016 (post IPO)
607.6 586 051 293 1.04
Profit from operations
35.1
Fair value gain on investment portfolio excluding Towarowa (2.6% uplift in value)
30.9
Fair value gain on Towarowa (30% uplift in value)
12.5
Finance income/(expenses)
(2.6)
Current tax
(0.2)
NAV as at 31 Dec 20161
683.3 586 051 293 1.16
1NAV excluding deferred tax 2Movement calculated using number of shares post IPO
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Increase in Investment Portfolio
€ million Investment Property Investment in JV (Towarowa) Profit participation in ROFO and other financial assets Total
Investment portfolio as at 30 Jun 2016 1 205
1 229 Fair value gain and capital expenditures 41
Acquisitions (3 ROFO) 113
Profit realised on ROFO transactions
(10) Investment in JV (Towarowa)
Pre-payment for Zakopianka
5 Investment portfolio as at 31 Dec 2016 1 359 54 19 1 432
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Average maturity
Average cost of debt
Hedging level1
Net LTV
Current:
Targeted:
1100% of the debt is assumed to be hedged for the purpose of the forecast in line with EPP policy; the remaining portion of unhedged debt is ROFO bank debt to be hedged from the end of Q1 2017
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SOURCES OF DEBT1
BZ WBK SA (Santander Group) / Erste Bank 38% Helaba 23% HSBC Bank plc 21% Berlin HYP/ING 15% Other 3%
50 100 150 200 250 300 350 400 450 500 2017 2018 2019 2020 2021 >2021
EUR million
DEBT MATURITY PROFILE
1Excluding short term VAT financing maturing before Sep 2017
www.echo-pp.com
GDP based on purchasing-power-parity (PPP) per capita
in European Union by 2050
1996 and 2015
2016
the most attractive FDI destination in CEE (and 5th most attractive in Europe)
higher than in 2014)
POLISH MACROECONOMICS
2016 2017 (f) 2018 (f) 2019 (f) GDP growth (%, yoy)
2.8% 3.6% 3.3% 2.9%
Retail sales growth (%, yoy)
6.4% 5.7% 3.9% 3.0%
Consumer spending (%, yoy)
3.5% 3.7% 3.2% 2.9%
Inflation
(0.6%) 1.6% 1.7% 1.9%
Unemployment
6.3% 5.3% 4.8% 4.4%
Source: Oxford Economics, NBP Source: Oxford Economics, NBP
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0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Poland Czech Republic Germany France UK EU Average GDP GROWTH IN SELECTED EU COUNTRIES 2016 2017 (f) 2018 (f) 2019 (f)
sector in 2017 according to Polish Deputy PM
numerous large investments into the region
UK from Poland, aiding positive demographic change
space e.g. McKinsey, Philips and BA
convergence with developed Europe will provide an
investments in Poland:
(Mercedes Benz)
€500m
engine factory
€326m
Lithium-Ion battery plant
€60m
Supplier of components to Boeing, Airbus and Rolls Royce
€800m
commercial vehicle factory Announced expansion
Launched operations centre in Warsaw Extended facilities to create world’s largest Global Shared Services Centre Centre for excellence
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European Excellence Hub
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Rank City 1 Warsaw 2 Cracow 3 Lodz 4 Wrocław 5 Poznań 6 Gdańsk 7 Szczecin 8 Bydgoszcz 9 Lublin 10 Katowice 11 Białystok 12 Gdynia 13 Częstochowa 14 Radom 15 Sosnowiec 16 Toruń 17 Kielce 18 Gliwice 19 Zabrze 20 Bytom Rank City 21 Olsztyn 22 Bielsko-Biała 23 Rzeszów 24 Ruda Śląska 25 Rybnik 26 Tychy 27 Dąbrowa Górnicza 28 Płock 29 Opole 30 Elbląg 31 Gorzów Wielkopolski 32 Wałbrzych 33 Włocławek 34 Zielona Góra 35 Tarnów 36 Chorzów 37 Kalisz 38 Koszalin 39 Legnica 40 Grudziądz Rank City 41 Słupsk 42 Jaworzno 43 Jastrzębie Zdrój 44 Jelenia Góra 45 Nowy Sącz 46 Konin 47 Piotrków Trybunalski 48 Siedlce 49 Lubin 50 Inowrocław Ranked by population in 2016; Source: Central Statistical Office of Poland
EPP presence in city
in 2016
€4.5 billion - second highest volume of investment transactions, close to the record year (2006)
listing of EPP was the largest transaction of the year
TOP INVESTORS 2015 - 2016
1,000 2,000 3,000 4,000 5,000 EUR millions Offices Retail Logistics Other
Source: Savills
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200 400 600 800 1,000 1,200 1,400 Volume (EUR milion) Volume
INVESTMENT VOLUME BY SECTOR (EUR MILLION)
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Poland; 4.54 36% Czech Republic; 3.62; 29% Hungary, 1.70, 13% Slovakia, 0.85, 7% Romania; 0.86 7% SEE markets, 0.99, 8%
1,000 2,000 3,000 4,000 5,000 2009 2010 2011 2012 2013 2014 2015 2016 EUR million Domestic EU US AsiaPac Middle East South Africa Other
CEE INVESTMENT VOLUMES: Volume in EUR billion, % of CEE total 2016 REAL ESTATE INVESTMENT VOLUME BY REGION OF ORIGIN
2017 which removed the corporate income tax exemptions applicable to Polish investment funds of the nature utilised within the EPP Group structure
effective tax cost
account the accretive benefits of recently announced acquisitions (concluded post the September 2016 listing) result in EPP remaining on track to achieve its forecast distributable earnings and DPS for the financial period ended 31 December 2017 (as published in the 31 August 2016 Pre-Listing Statement) 1
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1This forecast is the responsibility of the board and has not been reported on by the company’s auditors
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At 31 Dec 2016 Acquired post year end Total
Yielding portfolio Office Retail Office Retail Number of projects 9 10 0* 5 24 Number of buildings1 17 10 1 5 33 Value/consideration (EUR) 387.0 million 977.0 million 27.6 million (ROFO) 220.6 million 1 612 million Vacancy % 4.3 1.7
Office c. 4.0%, Retail c. 2.0% Market value (% split) 28% 72% 11% 89% GLA (m2) 175 941 322 633 11 975 116 234 626 783 WAULT (rent) 3.7 years 5.9 years n/a 3.7 years Annualized NOI (EUR) 85 million 21 million 106 million Development + Warsaw development project*
completion 2020/21) 110 000m² 1
1 including ROFO buildings – 3 buildings acquired in Dec 2016 and 1 building in the pipeline for 2017
Retail 71.7% Office 28.3% Retail 63.3% Office 36.7% 1.7% 4,3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%
Vacancy by GLA* %
Retail Office * Vacancy profile of Retail assets not including extensions under development (Galaxy and Outlet Park)
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PORTFOLIO STRUCTURE by GLA (m2) PORTFOLIO STRUCTURE by Fair Value
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No Retail Property Retail GLA (m2) Fair Value at IPO (EUR m) Fair Value 31 Dec 16 (EUR m) Fair Value 31 Dec 17 (EUR m) 1 Pasaz Grunwaldzki (FC/Recom) 48 408 239.7 241.8 241.8 2 Galaxy (extension completed in 2017) 56 230 210.4 224.3 224.3 3 Galeria Echo (Recom) 71 457 206.0 211.3 211.3 4 Amber Kalisz (leasing) 33 599 74.7 78.5 78.5 5 Veneda (turnover rent) 15 026 35.1 37.1 37.1 6 Outlet Park* (extension completed in 2017) 28 211 69.2 74.9 74.8 7 Galeria Sudecka (leasing) 31 243 52.4 52.8 52.8 8 Olimpia 21 274 39.5 41.4 41.4 9 Echo Centrum Belchatow 11 426 10.1 10.2 10.2 10 Echo Centrum Przemysl 5 759 4.8 4.7 4.7 11 Zakopianka Retail Park 27 463 54.0 12 Twierdza Zamość 23 799 53.5 13 Twierdza Kłodzko 23 359 40.7 14 Wzorcownia Włocławek 25 611 49.2 15 Tęcza Kalisz 16 003 23.2 Sub Total 438 868 941.9 977.0 1 197.5 Office Property Office GLA (m2) Fair Value at IPO (EUR m) Fair Value 31 Dec 16 (EUR m) Fair Value 31 Dec 17 (EUR m) 1 Malta Office Park (recom) 28 270 62.4 63.3 63.3 2 Park Rozwoju (recom) 33 126 69.5 72.1 72.1 3 A4 Business Park Phase (ROFO) 30 034 37.6 37.9 65.6 4 West Gate 16 532 39.3 39.4 39.4 5 Astra Kielce 14 269 30.9 31.3 31.3 6 Oxygen (recom) 13 902 28.0 28.5 28.5 7 Tryton Gdańsk (ROFO) 23 364 48.7 48.7 8 Symetris Phase I (ROFO) 9 652 20.4 20.4 9 O3 Business Campus Phase I (ROFO) 18 766 45.4 45.4 Sub Total 187 915 267.7 387.0 414.7
Total 626 783
1 209.6 1 364.0 1 612.2
*existing or secured by PSPA (Preliminary Share Purchase Agreements), areas according to 31 Dec 2016 valuations
Retail 86.0% Office 14.0% Retail 91.3% Office 8.7% Retail 87.1% Office 12.9%
(2, 6, 16) Szczecin (1, 14) Wrocław (3, 15) Kielce
(5) Łomża
(10) Przemyśl
(6) Jelenia Góra
(4) Kalisz (8,9) Bełchatów
(12) Warszawa (11) Poznań (13) Katowice (19) Kraków (17) Gdańsk
(18) Łódź
Retail Office
No Property Retail GLA (m2) Fair Value 31 Dec 16 (EUR m) Annualized NOI 31 Dec 16 (EUR m) 1 Pasaz Grunwaldzki 48,408 241.8 12,6 2 Galaxy * 41,083 224,3 12,7 3 Galeria Echo 71,457 211,3 12,0 4 Amber Kalisz 33,599 78,5 5,2 5 Veneda 15,026 37,1 2,4 6 Outlet Park * 24,571 74,8 4,7 7 Galeria Sudecka 31,243 52,8 3,9 8 Olimpia 21,274 41,4 2,8 9 Echo Centrum Belchatow 11,426 10,2 0.8 10 Echo Centrum Przemysl 5,759 4,7 0.4 Total 303,846 976,9 57,5 Galaxy extension 15,147 Outlet Park extension 3,812 Total after extensions 322,805 Average retail GLA 39,631 No Property Office GLA (m2) Fair Value 31 Dec 16 (EUR m) Annualized NOI 31 Dec 16 (EUR m) 11 Malta Office Park 28,270 63,3 5,1 12 Park Rozwoju 33,126 72,1 4,0 13 A4 Business Park Phase I & II** 18,059 37,9 2,8 14 West Gate 16,532 39,4 2,9 15 Astra Kielce 14,269 31,3 2,6 16 Oxygen 13,902 28,5 2,4 17 Tryton Gdańsk 23,364 48,7 3,7 18 Symetris Phase I 9,652 20,4 1,7 19 O3 Business Campus Phase I 18,766 45,4 3,2 Total 175,941 387,0 28,4 20 EUR m 80 EUR m Fair Value diagram scale: * GLA and Annualized NOI excluding planned extensions
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**Excluding phase III to be acquired in Q1 2017
New Project - retail
10,000 m2 25,000 m2 GLA diagram scale:
(6) Kraków (2) Włocławek (3) Zamość (4) Kłodzko (5) Kalisz
No Project name Type City GLA (m2) Fair Value (EUR m) % share of FV 1 A4 Business Park III Office Katowice 11 975 27.6 11.1% 2 Wzorcownia Retail Włocławek 25 611 49.2 19.8% 3 Twierdza Retail Zamość 23 799 53.5 21.6% 4 Twierdza Retail Kłodzko 23 359 40.7 16.4% 5 Tęcza Retail Kalisz 16 003 23.2 9.3% 6 Zakopianka Retail Kraków 27 463 54.0 21.8% Total 156 682 248.2 100.0% 7 Towarowa Retail Warsaw 110 000 Dev
(1) Katowice
New Project - office
Szczecin Gdańsk Łomża Warszawa Jelenia Góra Wrocław Przemyśl Poznań Bełchatów Kielce
Existing projects
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Development Projects - retail
(7) Warsaw
www.echo-pp.com
retail turnovers supported by + 500 program (see next slide)
in-line rents show healthy dynamics with Warsaw showing 2 year growth of 23%
countries adding most new retail space relative to existing space at 1.3 % c.46% relates to extensions of existing projects
show strong growth with 6.4% growth in December 2016
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Source: Polish Council of Shopping Centers 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 Q1-Q3 2016 New schemes Extensions
NEW RETAIL SUPPLY
2014 – Q3 2016 Source: Knight Frank
0.00% 5.00% 10.00% 15.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TURNOVER INDEX (y-o-y change) 2014 2015 2016
500+ programme opportunity
Jun-Dec 2015 to Jun-Dec 2016 changes
Projects Sales density increase POLISH ZLOTY/m² Footfall increase
Galaxy 0.9% 4.1% Galeria Amber 13.5% 8.8% Galeria Echo 8.6% 0.4% Galeria Olimpia 5.3% 0.7% Galeria Sudecka 5.0% 0.0% Galeria Veneda 9.9% 0.0% Outlet Park 7.3% 18.9% Pasaż Grunwaldzki 3.6% 0.9% Total 5.9% 3.4%
families with more than one child with a monthly contribution of PLN500 (€125) per child
disposable income in regional cities.
comparison to the larger regional cities
increased their turnover
entertainment sectors are benefiting
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portfolio to leverage our scale and influence
Towarowa (city centre)
does not have a presence eg. Zakopianka
dominant catchment area ranging from 150 000 people within a 30 minute drive
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Echo Centrum Belchatow 1.0% Echo Centrum Przemysl 0.5%
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CONTRIBUTION TO GLA BY CATEGORY COMPOSITION OF FAIR VALUE
*Included assets as at 31 Dec 2016
corresponds to ca. 31% of portfolio’s total retail rental income
leases currently under negotiation – when signed vacancy will drop to 0.5%:
(Sinsey), Eurofirany, fashion
Inditex Group (Pull & Bear, Oysho), Pepco, T-mobile
Assn., forever 21 and Steve Madden entered market 2016
3.9% 4,1% 2.5% 1.1% 1.7% 0.1% 0.0% 0.0% 0.0% 0.0%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
500 1,000 1,500 2,000 Pasaz Grunwaldzki Galeria Echo Amber Kalisz Outlet Park Veneda Galaxy Galeria Sudecka Olimpia Echo Centrum Belchatow Echo Centrum Przemysl
Vacancy (m2)
VACANCY PROFILE
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TOP 10 RETAIL TENANTS IN TERMS OF RENTAL INCOME No Tenant name % share in total rental income 1 8.0% 2 5.9% 3 2.8% 4 2.6% 5 2.3% 6 2.3% 7 2.0% 8 1.9% 9 1.7% 10 1.6%
Total
31.1%
8.41 5.79 5.61 5.38 5.17 5.12 5.11 4.97 4.79 4.41
2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 Galaxy Echo Centrum Przemysl Outlet Park Amber Kalisz Galeria Sudecka Galeria Echo Pasaz Grunwaldzki Echo Centrum Belchatow Veneda Olimpia
WAULT (years)
WAULT
Average Retail WAULT (5.86)
* WAULT exluding signed Lease Agreements concerning planned extensions (Galaxy and Outlet Park)
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271,246 288,838 323,414 553,924 839,911 600,210 487,652 236,496 192,183 579,547 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 =< 2026
Renatl Income (EUR)
LEASE EXPIRY PROFIE
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0% 25% 50% 75% 100% 3 6 9 12 Millions m²
SUPPLY: WARSAW VS. REGIONAL CITIES
Warsaw Regional cities Regional cities vs. Warsaw 0% 25% 50% 75% 100% 500,000 1,000,000 1,500,000 2,000,000 m²
TAKE-UP: WARSAW VS. REGIONAL CITIES
Warsaw Regional cities Regional cities vs. Warsaw 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
VACANCY RATE: WARSAW VS. REGIONAL CITIES
Warsaw Kraków Wrocław Poznań Łódź Tricity
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strong growth potential with an influx of shared services companies, which are likely to become the market’s key growth driver
including Q22 (Echo) and Warsaw Spire
terms of supply and demand for office space
Poland with 46% of 2016 new supply
expanding rapidly with vacancies showing stability or even some signs of decrease
EPP will continue to:
properties
companies
appropriate, recycle assets
remains balanced and competitive in the long term while maintaining a weighted average unexpired lease term in excess of 4 years
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Malta Office Park 17% Park Rozwoju 19% A4 Business Park 10% West Gate 10% Astra Kielce 8% Oxygen 7% Tryton Gdańsk 12% O3 Business Campus Phase I 12%
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COMPOSITION OF FAIR VALUE
No Tenant name % share in total Office rental income 1 10.01% 2 6.43% 3 6.07% 4 5.41% 5 3.90% 6 3.35% 7 3.01% 8 2.77% 9 2.72% 10 2.60% Total 46,27% TOP 10 OFFICE TENANTS IN TERMS OF RENTAL INCOME
20,6% 3.4% 0.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Park Rozwoju Oxygen Malta Office Park A4 Business Park West Gate Astra Kielce Tryton Gdańsk Symetris Phase I O3 Business Campus Phase I Vacancy level (%) Vacancy (m2)
VACANCY PROFILE IN OFFICE ASSETS
Vacancy (m2)
Space under LOI (75%)
20.6%
ROFO projects with 3 years fully let guarantee (Master Lease)
45
28% vacancy without Master Lease 24% vacancy without Master Lease 17% vacancy without Master Lease
corresponds to ca. 46 % of portfolio’s total office income
signed Master Lease, which provides guarantee of monthly payments amount to the Headline Rent for each square metre of free space
currently under negotiations exepected to sign by June 2017
to 5,2%
6.36 4.45 4.25 3.88 2.91 1.92 4.22 5.12 5.81
2.00 3.00 4.00 5.00 6.00 7.00 Astra Kielce A4 Business Park West Gate Park Rozwoju Oxygen Malta Office Park Tryton Gdańsk Symetris Phase I O3 Business Campus Phase I
WAULT (years)
WAULT
Portfolio average WAULT Rent 4,10 (years) ROFO projects with 3 years fully let guarantee (Master Lease)
generated by office assets fall vacant in the 4th year
Investment SA (as a tenant) to be prolonged by end of March 2017 – currently under negotiations (project without master lease)
(40%) lease with McKinsey currently under negotiation – extention planned for next 5 years; expected to signed by the end of March 2017
140,238 * 221,679 292,908 410,923 275,543 196,283 86,361 2,458 148,859 64,110 0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 400,000.00 450,000.00 2017 2018 2019 2020 2021 2022 2023 2024 2025 =< 2026 Renatl Income (EUR)
LEASE EXPIRY PROFIE
46
www.echo-pp.com
48
Towarowa
110 000 m2 dominant mixed- use scheme
for 2020/2021
Extensions
retail centres in development – Galaxy and Outlet Park Szczecin
Europe and the biggest in Poland
modern multifunctional and the biggest shopping centre in Warsaw, new attractive public areas, art and cultural space and high quality apartments
centre of Warsaw and next to arterial roads passing through Warsaw
6,000 vehicles per hour
2020/2021
49 Estimated cost at development (€ million; land
acquisition included)
420 Estimated NOI on completion (€ million) 33.8 Estimated yield on cost
Estimated valuation yield on completion
EPP capital uplift (€ milion) c.180
CATCHMENT AREA Drive time
1,512 1,002 702 1,000 2,000 3,000
0–20 minutes 20–40 minutes 40–60 minutes Total
Population (000s)
50
Extensions 18 959 m² in extensions
in development – Galaxy and Outlet Park Szczecin Galaxy’s extension – 70% leased OPS’s extension – phase I 100% leased; phase II 100%, phase III 24% and
€3.1 million NOI uplift €15 million capital uplift
www.echo-pp.com
Project name Cost NOI Debt Interest rate (%) Equity Cash on cash yield
Acquisitions contracted for year to date
Zakopianka 54 5.7
10.6% Blackstone 166 12.8 (93) 2.2% 74 14.2% A4 phase III 282 2.1 (13) 2.2% 12 15.2%
Total 248 20.6 (106)1 140
1Estimated LTV of 43% 2Cost is not presented net of profit share
52
Acquisitions through STRATEGIC RELATIONSHIPS and EXPERIENCED MANAGEMENT TEAM Combination of: ORGANIC GROWTH ACQUISITIVE GROWTH ORGANIC GROWTH from retail extensions, filling up of vacancies and ACTIVE ASSET MANAGEMENT Focus on acquiring retail assets in STRATEGIC LOCATIONS LEVERAGE PORTFOLIO and platform with retail tenants SIGNIFICANT STRATEGIC DEVELOPMENT IN PROGRESS Towarowa PRO-ACTIVELY TRADE ASSETS to ensure balanced portfolio (maintain WAULT of >4 years) Acquire further HIGH QUALITY, WELL LOCATED OFFICE ASSETS with STRONG TENANTS
53
STRONG COMPOUNDED GROWTH IN DPS OVER THE MEDIUM TERM
54
CEO Hadley Dean
hadley.dean@echo-pp.com +48 22 43 00 300
MARKETING DIRECTOR Magda Cieliczko
magda.cieliczko@echo-pp.com +48 22 43 00 300
INVESTOR RELATIONS Singular Systems IR Jacques de Bie
jdebie@singular.co.za
Michèle Mackey
michele@singular.co.za +27 10 003 0700
CORPORATE ADVISOR Java Capital Kevin Joselowitz
kjoselowitz@javacapital.co.za +27(0)83 642 0112
Carl Esterhuysen
cesterhuysen@javacapital.co.za +27(0)83 642 0223