Globalworth: CEE’s Leading Office Landlord
2019 Annual Results & 2020 April Covid-19 Update
Disclaimer
This presentation is published solely for information purposes, and it may not be reproduced or redistributed or republished, in whole or in part, for any purpose by any person other than Globalworth Real Estate Investments Limited (the
“Company”) . By accessing this presentation, you are agreeing to be bound by the following limitations.
The information contained in this presentation has been prepared by the Company and has not been independently verified and will not be updated. No representation, warranty or undertaking, express or implied, is made as to, and no reliance
should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein and nothing in this Presentation is, or shall be relied upon as, a promise or representation. None of the Company nor any
of its affiliates, nor their respective employees, officers, directors, advisers, representatives or agents shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss
howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
The information and opinions in this presentation is provided as at the date hereof and subject to change without notice. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive
analysis of the Company’s financial or trading position or prospects.
This presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular
needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Company. You are solely responsible for seeking independent professional advice in
relation to the Company. No responsibility or liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates on the basis of such information.
This presentation contains financial information regarding the businesses and assets of the Company. Such financial information may not have been audited, reviewed or verified by any independent accounting firm. The inclusion of such
financial information in this presentation or any related presentation should not be regarded as a representation or warranty by the Company, its affiliates, advisors or representatives or any other person as to the accuracy or completeness of
such information’s portrayal of the financial condition or results of operations by the Company and should not be relied upon when making an investment decision. Certain information contained in this presentation is based on management
accounts and estimates of the Company and has not been audited or reviewed by the Company’s auditors. Recipients should not place undue reliance on this information. This presentation includes certain non-IFRS financial measures and other
metrics which have not been subject to a financial audit for any period.
Certain financial and statistical information in this presentation has been subject to rounding off adjustments. Accordingly, the sum of certain data may not conform to the expressed total.
Certain statements in this presentation are forward-looking. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which may or may not occur and may be beyond our ability to control, predict or
estimate, and and could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. There can be no assurance that such statements will prove to be accurate. These include, among
other factors, changing economic, business or other market conditions, changing political conditions and the prospects for growth anticipated by the Company’s management. These and other factors could adversely affect the outcome and
financial effects of the plans and events described herein. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the
future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking
statements, which speak only as of the date of this presentation. Nothing in this presentation should be construed as a profit forecast or profit estimate.
The market and industry data and forecasts included in this presentation were obtained from internal surveys, estimates, experts and studies, where appropriate as well as external market research, publicly available information and industry
publications. The Company, it affiliates, directors, officers, advisors and employees have not independently verified the accuracy of any such market and industry data and forecasts and make no representations or warranties in relation thereto.
Such data and forecasts are included herein for information purposes only. Accordingly, undue reliance should not be placed on any of the industry or market data contained in this presentation.
THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORMS THE BASIS OF OR BE RELIED ON IN CONNECTION
WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SECURITIES.
The distribution of this presentation in certain jurisdictions may be restricted by law. No action has been taken or will be taken by or on behalf of the Company that would permit an offer of securities of the Company in any jurisdiction
where to do so would be unlawful. Persons into whose possession this presentation comes should inform themselves about, and comply with, any such restrictions. Any failure to comply with the relevant restrictions may constitute a
violation of the securities laws of any such jurisdiction.
In particular, this presentation is not and does not constitute or form a part of any offer of, or solicitation to purchase or subscribe for, any securities in the United States. No securities have been nor will be, registered under the United
States Securities Act of 1933, as amended (the “Securities Act”). No securities may be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities
Act), except pursuant to an exemption from the registration requirements of the Securities Act. No public offering of securities will be made in the United States of America.
In the United Kingdom, this presentation is only directed at: (i) persons who have professional experience in matters relating to investments and fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, (the “Order”), (ii) persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order or (iii) any other person to whom it may otherwise may
lawfully be communicated under the Order (each such person being referred to as a “relevant person”). Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents. In the
United Kingdom, any investment activity to which this presentation relates is only available to, and will only be engaged in with, a relevant person.
In any member state of the European Economic Area, this presentation is addressed only to and directed solely at “qualified investors” (as defined in Directive 2003/71/EC (as amended or superseded), including any applicable
implementing measures in any Member State) in that member state.
This presentation is for distribution in Israel only to, and is only directed at: investors included in the Schedule one of the Israeli Securities Law 5728-1968 and for Qualified Clients as defined in Schedule One of the Law for the Regulation
of Investment Advice, Investment Marketing and Investment Portfolio Management, 5755-1995. Nothing in this presentation should be considered as investment counselling or investment marketing, as defined in the Law for the
Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management, 5755-1995. Investors are encouraged to seek competent investment counselling from a locally licensed investment counsellor prior to
making the investment.
This presentation is not an “offer to the public” (as defined in the Companies Act, No. 71 of 2008 (as amended) (the “South African Companies Act”) in South Africa, provided that the offer is made in the circumstances specified in section
96 of the South African Companies Act and this presentation does not, nor is it intended to, constitute a prospectus (as such term is defined in the South African Companies Act).
1
Highlights & Strategy
Green Court Complex, Bucharest
2
FY 2019 – HIGHLIGHTS
Expanded Our Real
Estate Platform
Strong Operating
Performance
Improved Key
Performance
Measures
Conservative Credit
Profile
Portfolio Value
€3.0bn
+23.7%
Leasing Activity
179.5k sqm
+47.4%
Total Investment
€645.4m
+19.9%
Occupancy Rate(1)
94.7%
-0.4%
Portfolio Value LfL
€2.6bn
+7.2%
Occupancy Rate LfL(1)
95.5%
+0.3%
Increase in GLA Footprint
171.7k sqm
+16.5%
Contracted Rent
€191.0m
+19.8%
Contracted Rent LfL
€166.0m
+4.1%
Rental Income
€151.5m
+10.1%
LTV
34.7%
2018: 43.9%
Adjusted normalised EBITDA
€134.8m
+34.3%
EPRA Earnings / Share
€44 cents
-4.3%
Financing Cost
2.83%
2018: 2.91%
Cash & Cash Equivalents
€291.7m
+27.1%
(1) Occupancy of standing commercial
properties, and in the case of Poland,
including office rental guarantees.
Group’s credit rating further improved, now
received investment grade rating by all three
major rating agencies
Raised or secured c.€1.0bn from the equity and
debt capital markets in 2019
3
Our Strategy in Motion During 2019
Strengthen our
position as the
leading investor and
landlord in our core
markets
Enhance value of
existing investments
Maintain an efficient
and flexible capital
structure
Corporate Activity:
• Became the sole shareholder of our subsidiary Globalworth Poland at a cost of €216.1m
• Formed a partnership in Romania to develop two new high-quality projects in the country
Direct Investment in Real Estate:
• Invested €429.3m in real estate acquisitions and developments
• Completed a new industrial facility in Timisoara
• Progressed with our development program, with 7 projects under development in Romania and Poland at year-end
• Increased our standing footprint by 171.7k sqm to +1.2 million sqm
• Signed and/or extended 179.5k sqm of GLA and improved like-for-like occupancy, while maintaining an overall high level
across our portfolio of 94.7% (95.0% incl. options)
• Invested €22.2m as part of our renovation and upgrade programme for selected properties
• Continued to internalise property management, with c.92.0% of our office properties in Romania and 73.2% of our
properties in Poland now managed in-house
• Further improved our credit rating, with the Group’s Eurobonds recognised as investment grade by all three major
rating agencies
‒ Moody’s: upgrading our rating to Baa3 (from Ba2 in 2018)
▪ In April 2020 Moody’s affirmed Globalworth's Baa3 ratings and changed its outlook to negative
‒ S&P: upgrading our rating to BBB- (from BB+ stable in 2018)
‒ Fitch: assigned investment grade rating of BBB- in 2018 (remained stable in 2019)
• Completed our largest equity issue to date, raising a total of €793m including €501m in April
• Maintained flexibility of available, committed capital at an attractive interest rate through a €200m 4.5-year unsecured
revolving credit facility, with an additional €50m uncommitted accordion option
4
Our Strategy in Motion During 2019 (cont’d)
De-risk our Portfolio
• Reduced exposure to developments by limiting their weighting to no more than 10% of GAV, and improved occupancy
through active management during the development phase
• Diversified locations to reduce reliance to any single sub-market
‒ Bucharest remains the market with the highest concentration with 41.0% of total portfolio value (2016: 94.8%)
‒ Warsaw accounts for 24.1% of the portfolio with 14 standing properties and 210.8k sqm of GLA
• Increased presence in the fast- growing office and industrial sector
‒ €2.5bn in offices (standing, developments and future developments), with 897.0k sqm of standing GLA
‒ €117m in industrial properties with 189.7k sqm of high-quality standing GLA, 44.3k under construction and
786.9k sqm that can be developed in the future
• The Globalworth Foundation is now fully active in Romania and the first initiatives have been launched in Poland
• Actively supported more than 10 causes, investing both our personal time and resources
‒ Donations of c.€1.0m
• Continued to invest in ideas that promote the sense of community through the Globalworth Art & Tech District and
other initiatives
• Made further progress on our environmentally friendly portfolio, with 43 properties at YE-19 (30 at YE-18) and 81.3% of
our standing commercial portfolio by value being classified as green
‒ First BREEAM Outstanding certified property added to the portfolio in Podium Park in Krakow
‒ BREEAM Very Good or higher accredited properties account for 76.7% of total
‒ Remaining properties with LEED Gold or Platinum and EDGE certifications
Investment in
sustainable
environment &
communities
5
Six Years of Progress
Portfolio Value
(€m)
GLA Standing
(‘000s sqm)
GLA Commercial Standing
(‘000s sqm)
GLA Commercial Standing Occupied
(000’s sqm and %)
3,500
3,000
2,500
2,000
1,500
1,000
500
-
1,400
1,200
1,000
800
600
400
200
-
1,400
1,200
1,000
800
600
400
200
-
1,200
1,000
77%
85% 83%
800
600
400
200
-
93% 95% 95%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014 2015 2016 2017 2018 2019
Romania
Poland
Romania
Poland
Romania
Poland
Romania
Poland
%
Portfolio Concentration
(€m)
Green Portfolio
(€m)
Green Certified Properties
(Number of Properties)
Contracted Rent
(€m)
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2,500
2,000
1,500
1,000
500
-
50
45
40
35
30
25
20
15
10
5
-
250
200
150
100
50
-
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
Bucharest New CBD
Regional Romania
Regional Poland
Bucharest Other
Warsaw
Romania
Poland
Romania
Poland
Romania
Poland
6
Globalworth’s Leading CEE Platform
As of 31 Dec 2019
Standing Investments(2)
Globalworth Poland(1)
Globalworth Romania(1)
Globalworth Group(1)
22
15
37
GAV(3) / Standing GAV
€1,647m / €1,619m
€1,398m / €1,225m
€3,045m / €2,845m
Occupancy(4)
WALL
Standing GLA sqm(5)
Contracted Rent(6)
GAV Split by Asset Usage(1)
GAV Split by City(1)
94.1%
3.7 years
586.3k sqm
€107.8m
95.3%
(95.9% including tenant options)
94.7%
(95.0% including tenant options)
5.8 years
627.4k sqm
€83.2m
4.6 years
1,213.7k sqm
€191.0m
Mix Use
(Office / Retail)
18%
Other 10%
Industrial 9%
Lodz
5%
Katowice
11%
Krakow
20%
Office
82%
Gdansk
4%
Warsaw
44%
Wroclaw
16%
Office
81%
Constanta,
1%
Pitesti, 4%
Timisoara
6%
Industrial 4%
Mix Use
(Office / Retail)
10%
Other 4%
Office
82%
Gdansk 2%
Lodz 2%
Katowice 6%
Wroclaw 9%
Krakow 11%
Bucharest
89%
Poland
54%
Warsaw
24%
Bucharest
41%
Romania
46%
Timisoara 2%
Pitesti 2%
Constanta 1%
(1) Assets owned under JV are presented at 100% (e.g. Chitila Logistics Hub and Constanta Business Park), to
(2)
reflect “Combined Portfolio”.
Standing Investments representing income producing properties. 1 investment can comprise multiple
buildings. e.g. Green Court Complex comprises 3 buildings or 1 investment .
Includes all property assets, land and development projects at 31 Dec 2019 valuation.
(3)
(4) Occupancy of standing commercial properties, and in the case of Poland, including office rental
(5)
(6)
Including 33.7k sqm of residential units in Romania.
Total contracted rent comprises rent from commercial and residential standing properties (€183.3m &
€1.1m respectively) as of 31 Dec 2019, which includes contracted rent under master lease agreements, and
€6.5m development pre-lets.
guarantees.
7
Investment & Operational Performance
Skylight & Lumen, Warsaw
8
New Investments:
Corporate Activity:
• Globalworth Poland (now 100% owned):
‒ Acquired the remaining 30.9% of Globalworth
Poland for €216.1m (c.85% in GWI shares)
•
Formed JV’s for the development of two
high-quality projects in Romania
Asset Level Activity:
• Acquired 5 standing class-A offices for
€321.8million in Poland
‒ 139.2k sqm of Class “A” office space
‒ Occupancy: 88.3% (31 Dec. 19)
‒ €22.0 million of contracted rent / average
WALL of 4.1 years
‒ NIY / 100% Rent Yield: 7.0% / 7.7%
• Other acquisitions:
‒ The remaining 50% in RBC in Romania
‒ 2 offices under development in Poland
‒ 5ha in Timisoara for further expansion of our
industrial platform
Asset Level Activity Summary
Standing Properties
Acquired
City
Acq. Price
(€m)
GLA
(K sqm)
Initial
Yield (%)
Warsaw Trade Tower
Retro Office House
Silesia Star
Rondo Business Park
Podium Park I (*)
RBC (50%)
Total Standing Properties Acquired
Warsaw
Wroclaw
Katowice
Krakow
Krakow
Bucharest
132.9
58.8
54.4
37.0
38.7
73.0
394.8
46.8
23.2
30.2
20.3
18.9
42.3
181.5
6.8%
6.6%
8.8%
8.2%
4.4%
7.8%
7.1%
100% Occ.
Yield (%)
7.6%
6.7%
8.8%
8.9%
7.2% / 6.9%
7.8%
7.7% / 7.7%
Investment in
Developments
City
Acq. Price
(€m)
Dev. Cost
(€m)
GLA
(K sqm)
100% Occ.
Yield (%)
Podium II & III
Expansion Land (5h)
Krakow
Timisoara
Chitila Logistics Hub (JV)
Bucharest
Constanta Business Park (JV) Constanta
Total Developments Acquired
19.5
0.9
4.8
12.5
37.7
67.8
11.3
28.9
230.0
338.0
36.5
33.6
76.1
570.9
717.1
Note: The total amount and timing of capital to be invested in Developments as presented above in the “Development Cost” column
will be assessed based on tenant demand and market conditions. For the latest update on Globalworth’s status on projects under
construction, refer to the “Projects Under Construction” section of the presentation.
(*) Final acquisition price for Podium I may increase up to €46.7 million, subject to Vendor’s ability to lease the available space in the
property in H1-2020.
7.4%
10.0%
10.2%
12.2%
10.9%
9
H1-2019 Acquisitions in Poland:
Warsaw Trade Tower, Warsaw
• In April 2019, we acquired WTT, one of the
tallest office towers in Warsaw, for €132.9m
• Attractive entry yield and effective price of
sub - €3.0k / sqm, with the property offering
a range of asset management opportunities.
• Shortly after acquisition, Globalworth agreed
a 11.9k sqm lease renewal with anchor
tenant AXA for a term of 10 years
Rondo Business Park, Krakow
• In March 2019, we acquired Rondo Business Park in Krakow, for €37.0m,
Rondo sits adjacent to our Quattro Business Park
• Combined with Quattro BP, our footprint presents a contiguous campus of
86.6k sqm offering strong scope for asset management synergies.
• Krakow is the largest business process centre in Poland, and one of the
largest in Europe.
Quattro BP
Rondo BP
Location:
Value (Dec-19)
GLA:
Occupancy:
WALL:
Warsaw – Wola district / extended CBD
Location:
€142.3m
46.8k sqm
88%
4.5 years
Value (Dec-19)
GLA:
Occupancy:
WALL:
Krakow
€37.1m
20.3k sqm
90%
c.3.7 years
Contracted Rent/100% occupancy rent:
€8.6m / €10.0m
Contracted Rent/100% occupancy rent:
€3.0m / €3.3m
Key tenants:
Data as of 31 Dec 2019
Key tenants:
10
H2-2019 Acquisitions in Poland:
Retro Office House, Wroclaw
• Retro Office House, was acquired in In July 2019 for €58.8m, in a transaction
Silesia Star, Katowice
• Silesia Star office property, was acquired in July 2019, for €54.4m, in a
which included also Silesia Star.
transaction which included also Retro Office House.
• Retro is a newly completed office development located in central Wroclaw
benefitting from excellent connectivity to all parts of the city and a range of
public transport options.
• Silesia is an office complex with two interconnecting buildings developed in
2014 and 2016 at the heart of Katowice, located in the immediate vicinity of
the city centre, it is close to two universities and various transport options.
Location:
Value (Dec-19)
GLA:
Occupancy:
WALL (Dec-19):
Wroclaw
€64.7m
23.2k sqm
100%
4.4 years
Location:
Value (Dec-19)
GLA:
Occupancy:
WALL (Dec-19):
Katowice
€61.5m
30.2k sqm
100%
3.0 years
Contracted Rent/100% occupancy rent:
€3.9m
Contracted Rent/100% occupancy rent:
€4.8m
Key tenants:
Key tenants:
Data as of 31 Dec 2019
11
H2-2019 Acquisitions in Poland (cont’d):
Podium Park, Krakow
• Podium Park comprises of three interconnected office. Podium Park I was
completed in Q3 2018, while Podium Park II and III are currently under
development.
• Globalworth has signed a development management agreement with the
vendor in relation to the construction and completion of the respective
properties.
Overview Summary
City
Total Acq. & Investment Cost
Value (Dec-19)
Podium Park I
Status:
Value (Dec-19)
GLA (k sqm):
Occupancy:
WALL (Dec-19):
Krakow
€ 134.0m
€69.3m
Completed Q3-2018
€41.3m
18.9k sqm
53.9%
5.1 years
Contracted Rent/100% occupancy rent:
€1.7m / €3.2m
Podium Park II & III
Status:
Value (Dec-19)
GLA (k sqm):
Occupancy:
WALL (Dec-19):
Under Development (2020/ -)
€28.0m
36.5k sqm
Podium II: 82.6% / Podium III: -
Podium II: 5 years / Podium III: -
Key tenants:
Contracted Rent/100% occupancy rent:
€2.8m / €6.5m
For Podium Park III, the future pace of will be assessed
based on tenant demand and market conditions.
12
Standing Portfolio:
•
Standing Portfolio: € 2.8bn
‒ +19.5% (€2.4m in 2018)
• New Additions:
‒ 5 office acquisitions (8 properties) in Poland
with 139.2k sqm
‒ 1 logistics facility in the Timisoara Industrial
Park II in Romania with 17.8k sqm
•
•
37 investments with 61 standing
properties offering 1.2m sqm
LfL Occupancy Rate: 95.5%
‒ +0.4% (95.1% in 2018)
• Overall Occupancy Rate: 94.7%
‒ -0.4% (95.1% in 2018)
‒ Improvement in LfL occupancy and positive
impact of Silesia Star and Retro House (avg
occupancy of 99.8%) offset by Rondo BP,
WTT and Podium Park I (avg occupancy of
81.2%)
1,633
852
781
Key Metrics
Standing GAV1 (€ m)
2,845
2,381
1,217
1,619
Standing GLA1 (k sqm)
Contracted Rent1(€ m)
1,214
586
1,042
429
159
82
77
184
105
79
1,164
1,225
613
627
2018
Romania
2019
Poland
2018
Romania
2019
Poland
2018
Romania
2019
Poland
Green Portfolio (€ m)
Occupancy GLA (%)*
WALL (years)*
2.262
1,226
95.1%
94.7%
95.4%
94.1%
1,036
94.9%
95.3%
5.0
3.9
6.1
4.5
3.7
5.6
2018
Romania
2019
Poland
2018
Romania
2019
Poland
2018
Romania
2019
Poland
(1) Includes c.37.2k sqm and c.33.7k sqm of residential space in 31 December 2018 and 2019 respectively.
* Refers to commercial
13
Developments:
•
•
Projects Delivered in 2019: 17.8k sqm
‒ 1st Facility in TIP II delivered increasing our
industrial footprint in Timisoara to 121.2k
sqm
‒ Total GLA delivered by the Group in the past
5 years of c.260k sqm
Projects Delivered in Q1-2020: 33.6k sqm
‒ Globalworth Campus T3 was delivered in
January 2020, with remaining fitout works
performed for its 760-seat conference centre
• Under Construction:
•
‒ Four projects under construction in Romania
(3) and Poland (1)
‒ Estimated Avg Development Yield: 8.9%
Future Developments:
‒ Additional 880.6k sqm can be developed in
phases in 7 projects in Romania and Poland in
the future
‒ GAV of future developments accounting for
2.3% of total portfolio
‒ Estimated Avg Development Yield: 11.2%
Developments Update: Post Covid-19 Globalworth Initiatives
Number
of
Properties
GAV
(€m)
GLA
(K sqm)
Est. Rent
(100%)
(€m)
Capex
Invested
(€m)
Remaining
Capex (€m)
Est. Yield on
Cost (%)
Romania
Q1-2020
Deliveries
Poland
Romania
Under
Construction
Poland
Romania
Future
Developments
Total
1
1
1
3
4
1
6
7
71.1
71.1
19.1
31.5
50.6
8.9
61.8
70.7
33.6
33.6
18.8
72.7
91.5
17.7
862.9
880.6
5.9
5.9
3.4
7.6
11.0
3.1
52.3
55.4
51.2
51.2
12.7
31.6
44.3
7.5
36.8
44.3
6.9
6.9
33.0
45.2
78.2
34.1
414.4
448.5
10.1%
10.1%
7.4%
9.9%
8.9%
7.5%
11.6%
11.2%
12
192.4
1,005.7
72.2
139.8
533.6
10.7%
(1) Figures presented as at 31 December 2019, with status of developments updated for April 2020.
The future pace of our developments,
considering the Covid-19 pandemic, will be assessed based
on tenant demand and market conditions.
14
Best In Class Office & Mix-Use Portfolio in Poland …
Gdansk
54.1% of our portfolio by value
is in 6 cities in Poland
Wroclaw
WARSAW
Lodz
Katowice
Krakow
Warsaw
GAV
Standing Properties
Standing GLA
Standing Occupancy
Standing Contracted Rent:
Standing 100% Potential Rent
Regional Poland
GAV
Standing Properties
Standing GLA
Standing Occupancy
Standing Contracted Rent:
Standing 100% Potential Rent
Future GLA
Future ERV
€733.2m
14
210.8k sqm
92.4%
€45.3m
€49.3m
€914.2m
24
375.5k sqm
95.1%
€59.7m
€63.1m
36.5k sqm (15.5k sqm let)
€6.5m (€2.8m let)
Tryton Business House
(Gdansk)
Nokia Campus
(Wroclaw)
Quattro Business Park
(Krakow)
Skylight & Lumen
(Warsaw)
Hala Koszyki
(Warsaw)
15
… and Best In Class Office & Industrial Portfolio in Romania
627k of high-quality standing
space, and a further 830k sqm
that can be developed in the
future, in 4 cities
Timisoara
Pitesti
BUCHAREST
Bucharest’s new CBD although
has the highest concentration
by value this has decreased
from 73.4% in 2016 to 30.5% in
2019
Constanta
Bucharest
GAV
Standing Properties
Standing GLA
Standing Occupancy
Standing Contracted Rent
Standing 100% Potential Rent
Future GLA
Future ERV
Regional Romania
GAV
Standing Properties
Standing GLA
Standing Occupancy
Standing Contracted Rent
Standing 100% Potential Rent
Future GLA
Future ERV
€1,247.1m
17
437.8k sqm
90.9% (91.7% incl. options)
€69.7m
€74.8m
214.1k sqm (25.8k sqm let)
€28.6m (€3.7m let)
€150.6m
6
189.6k sqm
100%
€9.8m
€9.8m
615.4k sqm
€18.6m
GW Tower, Green Court & GW Plaza
(Bucharest)
Globalworth Campus
(Bucharest)
Unicredit Tower
(Bucharest)
Renault Bucharest Connected
(Bucharest)
Pitesti Industrial Park
(Pitesti)
16
Projects Under Construction:
63% leased as of today (83%
including options)
30% leased as of today (44% including
signed HoTs and tenant option)
HoTs signed for 29%
of the GLA
82.6%
leased
Secured Projects
Globalworth
Campus T3
Chitila Logistics Hub
(Phase A)(2)
Constanta Business Park
(Phase A)(2)
Globalworth
Square
Status
Type
Delivery
Est. GLA (k sqm)
Cost / Capex to 2019YE (€m)
GAV (€m)
Est. Remaining Capex (€m)
Est. Rental Income (100%)
Est. Yield on Cost
Est. Yield on GAV + Capex
Completed
Under Construction
Under Construction
Office,
Bucharest
Q1-20A
33.6
51.2
71.1
6.9
5.9
10.1%
7.5%
Industrial, Bucharest
Mix-Use, Constanta
2020E
23.1
3.5(3)
3.1
7.3
1.1
10.2%
10.6%
2020E
21.3
2.9
3.3
7.3
1.1
10.4%
10.0%
Under
construction
Office,
Bucharest
2021E
28.4
25.2(3)
25.1
30.6
5.4
9.7%
9.7%
Podium II
Under
Construction
Office,
Krakow
2020E
18.8
12.7
19.1
33.0
3.4
7.4%
6.5%
Globalworth Campus Tower 3
(Bucharest)
Constanta Business Park
(Constanta)
Chitila Logistics Hub
(Bucharest)
Podium Park II
(Krakow)
Globalworth Square
(Bucharest)
(1)
(2)
(3)
Calculated as Est. Rental Income/ (GAV (Dec 19) + Est. Remaining Capex)
50:50 Joint Venture; figures shown on 100% basis
Includes advances paid
* Office component completed in January 2020 with remaining works to be performed
in the Conference centre
17
Asset Management / Leasing Review:
• Record year in Leasing
Key Metrics
‒ +179.5k sqm successfully negotiated in take-
up (including expansions) or extension
Leasing Activity by Type (k sqm)
Leasing Activity by Country (k sqm)
‒ Average WALL of 5.5 years
New Leases: 85.1k sqm
• Negotiated headline rent level remained
stable to portfolio average
‒ Avg office rent of €14.19 /sqm/m Vs portfolio
overall average of €14.15 /sqm/m
‒ Our overall commercial GLA agreed at an
Avg rent of €12.8 /sqm/m
▪
▪
Industrial spaces: €3.3 /sqm/m
Commercial spaces: €14.6 /sqm/m
4.6 yrs
94.4
47.4%
52.6%
85.1
94.4
7.5 yrs
66.9
4.8 yrs
18.2
New Leases
Expansions
Extensions
Romania
Poland
Notable Leases
Poland
•
AXA: 13.1k sqm in WTT / Extension &
Expansion
Google: 13.0k sqm in Quattro BP /
Extension & Expansion
IBM: 9.6k sqm in A4 BP / Extension
International Paper: 7.9k sqm in CB
Lubicz / Extension
152 Other Tenants: 50.7k sqm in 25
properties
•
•
•
•
Romania
•
NDB Logistica: 11.8k sqm in TIP II /
New Lease
UniCredit Services: 9.7k sqm in GW
Campus T3 / New Lease
Allianz: 9.2k sqm in GW Campus T3 /
New Lease
•
•
• Mega Image (Delhaize Group): 4.5k
•
sqm in CLP / New Lease
49 Other Tenants: 49.9k sqm in 18
properties
18
Asset Management / Sustainable Rental Income:
Total contracted rent
increased to €191.0
‒ +99% from commercial
spaces
‒ 94.7% from active leases
•
•
Total commercial
contracted GLA: +1.1m sqm
13.9 19.3
Commercial Rent: Lease Expiration Profile (€m)
Commercial Rent: Commencement Period (€m)
36.4
31.1
23.3
19.0
21.3
11.2
9.0
179.8
3.6
3.1
2.3
0.5
0.3
0.3
189.9
‒ +87.0% in standing
properties
• +715 tenants in our
portfolio
‒ majority of portfolio let to
national and multinational
corporates that are well-
recognised names in their
respective markets
• WALL: 4.6 years
‒ 4.5 years for standing
commercial properties
7%
10% 16% 12% 19% 10%
6%
5%
5.4
3%
11%
95%
7%
10% 16% 12% 19% 10%
6%
5%
3%
11%
5%
100%
2020
2021 2022 2023
2024 2025 2026
2027 2028 ≥2029
Lease Agreements
Master Lease
Active H1-20 H2-20 H1-21 H2-21 H1-22 H2-22 H1-23
Total
Standing Properties
Developments
Standing Commercial Rent: Tenant Origin (€m)
Commercial Rent: Tenant Concertation
State Owned,
1.6%
Master Lease,
0.3%
•
•
•
Largest Tenant 5.3%,
Top 3 Tenants 10.9%
Top 10 Tenants 26.1%
100.0%
88.9
National,
22.7%
73.5
38.5%
46.6%
15.5
52.8%
11.9
Multinational,
75.4%
1-20
21-30
31-40
41-718
Rent (€m /yr)
Cumulative % of total
19
Asset Management / Other Initiatives:
•
Constantly improving the quality of our
property services
Selected Initiatives
‒ Added 47 professionals mainly to our asset
and property management teams on the
ground
‒ Almost all office and mix-use properties
owned in 2019 are now internally managed
‒ Overall 76.9%(1) of total standing commercial
portfolio internally managed
▪
80.5%(1) of office and mix-use properties
• Renovation & Upgrade Programme with
€22.2m invested in 2019
‒ Improvement works on selected properties
was focused predominantly on 14 standing
properties
•
Further investment (directly and
indirectly) in technology
‒ Investment in various technology applications
including smart applications and the
Globalworth App.
‒ €2.4m commitment in a second venture
capital fund in GapMinder
(1)
Figures represent percentage of value
Globalworth Tower: Kinetic Floor
Globalworth Tower: Natural Green Wall
40sqm kinetic floor generating energy
which is stored and re-used
158 sqm wall using recycled water,
nutritionally improved and treated through
a process of osmosis
Globalworth Portfolio: Pepper
Globalworth Square: Ice Storage
Pepper is our humanoid robot which improves the
visit experience at our properties
Ice storage unit which allows the use of ice
produced at night hours to be used at
daytime
20
Creating a Sustainable Environment
where Business can Flourish:
Creating Communities
Sustainability
• We create vibrancy and communities
across our assets. New initiatives
include special events and LED
illuminations, that promote our
brand and bring a greater sense of
place to our buildings
Globalworth District is our latest
concept that brings together visual
arts, fashion and music, through the
backdrop of technological innovation
Such events not only promote
Globalworth, but enable us to create
new revenue streams to sustain such
initiatives
•
•
•
•
•
Globalworth published it
inaugural Sustainable
Development Report in
October 2019, formalising its
activities to date, and
marking a commitment to
further its efforts in the
future
Prepared in accordance with
the Global Reporting
Initiative (GRI) Standards -
core option, and in
accordance with the EPRA’s
Sustainability Best Practice
Reporting Recommendations
(EPRA sBPR)
Report available at:
www.globalworth.com/sustainability
21
Covid-19:
Initiatives To Ensure Health, Safety And Business Continuity
•
•
•
The safety and wellbeing of
our people, partners,
communities, and other
stakeholders and
shareholders, are and will
continue to be our top
priority as we focus on
safeguarding our business,
protecting our assets and
minimising our exposure to
the impact of Covid-19.
Commitment to help fight
Covid-19 in Romania and
Poland.
€600k donated to assist
hospitals and related staff
in Romania and Poland.
Close Monitoring of the Covid -19 Virus Outbreak
Actions For Our People
• Dedicated teams at Group and country levels set up to
monitor and implement our Covid-19 related strategy
• Evolving strategy respecting measures and guidelines set out
in relation to the virus at a European level, by the World
Health Organisation, and at country and local levels
Preventive Measures For Our Tenants And Buildings:
Installation of hand disinfection stations in all our buildings’
lobbies and other public areas (with instructions for use)
•
•
Our number one priority is to keep our teams safe and healthy:
• Daily communication with our team members updating them
on the latest Covid-19 news
• Communicating using technology (phone, videoconferencing
etc.), limiting internal and third party meetings
• Provisional self-quarantine for team members who have
been travelling in affected areas, as well as employees
showing flu or any other associated symptoms (fever,
blocked nose etc.) who are requested to stay at home and
seek medical advice
Frequent disinfections (every 2-4 hours) with specialised
products in areas of high traffic
•
Flexible working programme implemented for our
employees, including working remotely
• Continuous communication and monitoring of all suppliers
• Additional hygiene measures implemented within our
regarding best practice procedures when entering and using
our buildings
• Detailed communication with tenants, explaining measures
taken by Globalworth and providing links to important
authority/government information relating to Covid-19
• Detailed action plan in place should a case of Covid-19 case
be detected in one of our buildings
Additional Communication Available To The Public And
Tenants
• Produced two sets of video materials, informing visitors and
tenants on how to prevent contamination and demonstrating
how we clean common spaces overnight (lobbies, stairs,
elevators etc.)
• All events held at our buildings, including Globalworth
District events, have been cancelled until we have greater
clarity on Covid-19
• Adapted the editorial messaging on our social media
platforms to be more informative on Covid-19
• Commitment to help fund medical supplies as well as
logistical, human and material support to aid in the response
to the threat of Covid-19 in Romania and Poland
workplaces, including installation of disinfectant dispensers
in multiple locations in our offices and more frequent
disinfection of areas which are most commonly used
Measures Affecting Our Development Projects
• Additional health and safety measure are being taken at our
construction sites, in close cooperation with our general
contractors and other suppliers, including:
‒ Covid-19 related updates and instructions for those
who visit and work at our sites
‒ Installation of disinfection points at entrances and
other selected locations
‒ Professional and periodical disinfection of site offices
and worker stations
•
Information panels regarding hygiene practices and
emergency contacts are installed at site entrances and in
various visible areas inside the construction areas
• Detailed action plan in place should a case of Covid-19 case
be detected in one of our developments
22
Covid-19:
2020-YTD Initiatives to Mitigate Economic Impact
Globalworth as a result of the Covid-19 pandemic has been implementing several significant measures aiming
at safeguarding continuity of business, preserving cash flow and protecting its income and assets.
Asset & Property Management
Building Capex
• Action: Termination, and/or suspensions, or renegotiation of supplier
contracts
• Benefit: Achieve significant savings, promoting sustainability of our business
and operations, with tenants benefiting directly as leases are 3Net, thus
reducing the cost of service charges
‒ Currently in the process of identifying the most efficient way to pass on
the SC savings to our tenants, until the final 2020 SC reconciliation takes
place early next year
Human Resources & Administration
• Action (1): Reduction of overheads and other costs, including employee-
related costs
• Action (2): Adjustment of the new Group annual remuneration policy, so
that all 2019 bonuses will now be paid in shares (Vs 50% cash and 50%
shares)
‒ Senior employees: 100% paid in shares in 2 tranches
‒ 50% on 31/3/2021, and 50% on 31/3/2022
‒ Other employees: 100% paid on 31/3/2021
‒ Shares will be transferred upon vesting at the fixed value of €7.00 /
share and with no further vesting period or lock up
• Action (3): Continued review of our entire cost base, and are already
achieving significant savings thanks to our longstanding relationships with a
number of suppliers
• Action: Substantially reduced our Renovation & Upgrade Capex for our
standing properties, focusing on the absolute essential requirements
relating to health and safety, and maintenance.
• Benefit: Suspension of +€12m of planned standing building capex works for
2020.
‒ Works suspended exclude tenant fitout works which continue as normal,
but at renegotiated prices with suppliers and/or contractors.
Projects Under Development
• Action: Significantly scaling back of our development programme, focusing
only to those projects which have significant pre-lets or construction is
substantially completed or very advanced.
• Benefit: Expect to invest c.€54m over the next 12 months in developments
‒ Investment reduced by €36m (original estimate was for +€90m
investment during the period)
‒ Reductions, achieved through renegotiations with contractors, value-add
engineering, scope reduction and works postponement
New Investments
• Action: New investment activity is currently suspended.
‒ We continue to monitor the investment market for potential investment
opportunities
‒ In the future should an investment opportunity with particularly
attractive potential returns arise we my consider pursuing it
23
Covid-19:
Our Preliminary Take-Aways on Sustainability of Our Business
Consideration
Countries of Focus
Consideration
• Covid-19 has spread across the Globe with some
countries and regions more affected than other
Where we Stand
• Poland and Romania as at the end of April 2020, had 12.6k and 12.0k confirmed Covid-19
cases, ranking 15 and 16th in Europe, and accounting for less than 1.0% of total confirmed
cases in the continent respectively
Government
Intervention on
Real Sectors
• Government measures directed at fighting
• Governments in Poland and Romania have established a number of such measures
Covid-19 have had a direct impact on certain
real estate sectors
including rent reductions and/or suspensions for non-essential retail businesses during the
state of emergency period
• Non-essential retail premises have been ordered to close, whereas certain types of
restaurants were only allowed to operate a take-away or delivery service
‒ Globalwortth has only limited exposure to the retail sector (see below)
• No government measures forcing the closure of offices, logistics/light-industrial properties
or essential retail businesses in Poland and Romania
Occupancy / Rent
Sustainability
• Covid-19 has or is expected to impact a number
businesses with quality of tenant base and type
of operation becoming increasingly important
• Globlaworth has +715 tenants in its portfolio, with 75.1% of rental income generated by
multinational groups and the majority of the remaining rent from well known and
established national corporates (23.0%) and state owned entities (1.6%)
Liquidity & Debt
Risk
• Increasing importance on available resources as
availability of funding is becoming more difficult
or expensive
• Almost all of our Top-20 tenants, accounting for 38.5% of our contracted rent, are
multinational corporates covering a number of international markets
• Globalworth has only limited exposure to the retail sector, with 9.1% of contracted rent
derived from retail
‒ Less than 50% of retail rent from tenants which have been closed down or materially
affected by the emergency legislation
‒ Retail is located in 3 mixed-use properties in Poland and (typically) on the ground
floors of our office properties
• Coworking accounts for less that 3.0% of contracted rents
• +€550m liquidity (April 2020), increased from €292m at year-end 2019, as a result of
drawdown of existing committed (RCF) and new facilities, and aforementioned cost
cutting measures
• Net LTV of 34.7% as at YE2019, with limited debt maturities until June 2022
24
Covid-19:
Impact from Government Covid-19 Related Measures
Contracted Rent Overview:
86%
Contracted Rent:
€191.3m
Automotive 8%
l
a
t
o
t
f
o
%
100%
80%
60%
40%
20%
-
9%
5%
Office
Retail
Industrial
1%
Other
Closed or
Severily Affected
by Covid-19
measures
49%
• Retail Shops
• Restaurants
•
Fitness Centers
• Kindergartens
• Other
Note : Data as per April 2020
Open or Less
Affected by
Covid-19
measures
51%
Supermarket
•
• Convenience Stores
• Pharmacies
• Bank branches
• Other
Financial 12%
IT 15%
Other 27%
Medical /
Pharmaceutical
7%
Services 7%
Telecom 7%
Technology 5%
Insurance 5%
Industrial 4%
Other 37%
Restaurant
23%
Clothing
21%
Grocery 11%
Fitness 11%
• Retail comprising of +17 different sub-categories
25
2019 Capital Markets Performance
26
Capital Market Performance / Equity:
•
•
•
•
•
€793m of total new equity raised in 2019
2019 Share Price Performance
‒ €612m of new equity placed with new and
existing shareholders (€348 million in April
and €264 million in October)
‒ €181m of new shares in January and April to
certain shareholders of Globalworth Poland
in exchange for its shareholding in our
subsidiary
2019 Total share price performance for
the year: +14.4%
2019 Total shareholder return (including
dividends) for 2019: 21.7%
Significant movement in shareholding
base
‒ Aroundtown entered the shareholding in
2019 and the CPI Property Group becoming
the Groups largest shareholder in February
2020
The Covid-19 pandemic has impacted
Goldworth's 2020 share price
performance:
‒ -33% (based on 30 April 2020 share price)
125.0%
120.0%
115.0%
110.0%
105.0%
100.0%
95.0%
125.0%
120.0%
115.0%
110.0%
105.0%
100.0%
95.0%
8
1
-
c
e
D
-
1
3
9
1
-
n
a
J
-
4
1
9
1
-
n
a
J
-
8
2
9
1
-
b
e
F
-
1
1
9
1
-
b
e
F
-
5
2
9
1
-
r
a
M
-
1
1
9
1
-
r
a
M
-
5
2
9
1
-
r
p
A
-
8
9
1
-
r
p
A
-
2
2
9
1
-
y
a
M
-
6
9
1
-
y
a
M
-
0
2
9
1
-
n
u
J
-
3
9
1
-
n
u
J
-
7
1
9
1
-
l
u
J
-
1
9
1
-
l
u
J
-
5
1
9
1
-
l
u
J
-
9
2
9
1
-
g
u
A
-
2
1
9
1
-
g
u
A
-
6
2
9
1
-
p
e
S
-
9
9
1
-
p
e
S
-
3
2
9
1
-
t
c
O
-
7
9
1
-
t
c
O
-
1
2
9
1
-
v
o
N
-
4
9
1
-
v
o
N
-
8
1
9
1
-
c
e
D
-
2
9
1
-
c
e
D
-
6
1
9
1
-
c
e
D
-
0
3
Globalworth Share Price
FTSE/EPRA Developed Europe (ex UK)
FTSE/EPRA Global
Shareholding Structure
31 December 2019
Other,
24.5%
Growthpoint
Properties, 29.3%
EBRD,
5.0%
Altsuler
Group, 6.2%
I. Papalekas,
13.1%
Aroundtown,
21.9%
25 March 2020
Other,
14.3%
EBRD,
5.0%
CPI Property Group,
29.4%
Aroundtown,
21.9%
Growthpoint
Properties,
29.4%
27
Capital Market Performance / Eurobonds:
•
•
•
•
€1.1bn in two Eurobonds maturing in
2022 and 2024
€1.5bm EMTN program in place
‒ €550m raised as part of the program and an
additional €950m available to be issued in
the future
Eurobonds rated at Investment Grade by
all 3 agencies
‒ Moody’s: upgrading to Baa3 (from Ba2 in
2018)
▪ in April 2020 Moody’s affirmed
Globalworth's Baa3 ratings and changed
its outlook to negative
‒ S&P: upgrading to BBB- (from BB+ stable in
2018)
‒ Fitch: assigned investment grade rating of
BBB- in 2018 (remained stable in 2019)
Signed a €200 million, 4.5-year unsecured
revolving credit facility in 2019
‒ additional €50 million uncommitted
accordion option in place
‒ On 18 March 2020, €200.0 million were
drawn from the facility
2019 Eurobond Performance
3.98%
2.85%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
-
GWI bond 17/22
GWI bond 18/25
Selected Metrics
Performance of the Globalworth Bonds
GWI bond 17/22
Year-end closing price
Yield to maturity at year-end closing price
GWI bond 18/25 (*)
Year-end closing price
Yield to maturity at year-end closing price
(*) 2018 performance from time of issue
2018
100.1%
2.854%
94.7%
3.976%
1.44%
0.67%
2019
105.4%
0.671%
107.8%
1.440%
28
2019 Financial Results
29
FY 2019 – FINANCIAL HIGHLIGHTS
• Strong growth in
financial metrics
following ongoing
portfolio expansion
in 2019
• Successful capital
markets activities
funding growth
Portfolio Value1
€3.0bn
+23.7%
EPRA Net Asset Value
€2.1bn
+72.4%
EPRA NAV / share
€9.30
+2.9%
LTV
34.7%
YE-2018: 43.9%
Av. Debt Interest Rate
2.83%
YE-2018: 2.91%
Rental Income
€151.5m
+10.1%
Adj EBITDA2
€240.1m
+59.2%
IFRS Earnings
€170.2m
+112.0%
EPRA Earnings
€80.9m
+32.8%
Dividend
€124.7m*
FY-2018: €71.5m
NOI
€147.7m
+10.7%
Adj Normalised EBITDA3
€134.8m
+34.3%
IFRS EPS
€0.93
+52.5%
EPRA EPS
€0.44
-4.3%
Dividend / Share
€0.60*
2018: €0.54
Please refer to the published Audited 2019 Financial Statements for full disclosures.
(1)
Combined real estate portfolio includes the Group’s Investment Property - Freehold as at 31 December 2019, plus investment
properties held as Joint Ventures presented at 100%.
Earnings Before Interest (finance cost), Tax, Depreciation, Amortisation of other non-current assets and purchase gain on
acquisition of subsidiaries. This includes the share of minority interests.
(2)
(3)
Earnings Before Interest (finance cost), Tax, Depreciation, Amortisation of other non-current assets, purchase gain on
acquisition of subsidiaries, fair value movement, and other non-operational and/or non-recurring income and expense items.
This includes the share of minority interests.
* Dividend related to the year ended 31 December 2019.
30
Financial Highlights: P&L
Condensed Income Statement
€m
Rental Income
Net Operating Expenses
Net operating income
Administrative expenses
Fair value movement in investment property
Other net expenses/income
Profit before net financing cost
Net financing cost
– Finance cost
– Finance income
Share of profit of joint venture
Profit before tax
Income tax expense
Deferred tax expense
Profit for the year
– Equity holders of the Company
– Non-controlling interests
IFRS Earnings per share (diluted)
Wtd Average Shares (diluted) - ('000)
Adjusted EBITDA Metrics
Profit before Net financing cost
Gain on Subsidiary acquisition
Depreciation on other long-term assets
Adjusted EBITDA (100% GW Poland)
Less: FV gains on property & financial instruments
Less: Other income
Add-back: Acquisition Costs
Add-back: Non Recurring Admin & Other
Expenses
Rental guarantees adjustment
Adjusted Normalised EBITDA
(100% GW Poland)
1
2
3
4
5
6
7
2019
151.5
-3.8
147.7
-19.3
117.7
-3.5
242.6
-42.6
-45.1
2.4
7.8
207.7
-6.8
-24.8
176.2
170.2
6.0
2018
137.6
-4.2
133.4
-15.3
34.1
-1.6
150.7
-38.4
-41.7
3.3
3.1
115.3
-8.0
-7.4
99.9
80.3
19.6
Variance
13.9
0.4
14.3
-4.0
83.6
-1.9
91.9
-4.2
-3.3
-0.9
4.7
92.4
1.3
-17.4
76.3
89.9
-13.6
€ 0.93
182,823
€ 0.61
132,518
€ 0.32
50,305
2019
242.6
-2.9
0.4
240.1
-119.6
-0.9
0.2
9.2
5.7
2018
150.7
-0.3
0.4
150.8
-39.6
-0.3
1.2
6.9
-18.6
100.4
Variance
91.9
-2.6
0.0
89.3
-80.1
-0.6
-0.9
2.3
24.3
34.3
% Chg
10%
-10%
11%
27%
245%
122%
61%
11%
8%
-27%
150%
80%
-16%
235%
76%
112%
-69%
52%
38%
% Chg
61%
1,041%
2%
59%
202%
182%
-80%
34%
-131%
34%
Comments
1. Increase in Rental Income of 10%:
• New acquisitions in Poland added rental income of €12.1m
• Successful leasing activity resulting in LfL portfolio rental income increasing by
21.9% or €24.9m
‒ Polish and Romanian properties rental income up by 37.5% and 6.8%
‒ Negative impact of the one-off rental guarantee income encashed in
Dec-2018 for future periods (€18.6m)
• New deliveries and other income added another €0.6m
2. Fair value gains of €117.7m, resulting from
• €72.6m valuation uplift of LfL standing properties and LfL lands
• €38.0m from investments completed in 2019
• €7.1m from properties under development on LfL basis
3. Finance costs increase mainly as a result of full annual interest cost of the
€550m Eurobond (18/25) in 2019 (vs 9-months of interest in 2018)
4. Joint Venture profits includes the €2.4m share of rental income from the RBC
property (100% owned as at Q4-19), plus the share of revaluation gains of €1.8m
from the Group’s two other JVs
5. Deferred tax expense
Mainly due to fair value gain on investment property.
6. Non-controlling interests reduced due to the increase in ownership in
Globalworth Poland from 69.7% at 31 Dec 18 to 100% at 31 Dec 19
7. Adjusted EBITDA shown as 100% of Globalworth Poland, without elimination of
share of minority interest, which was decreased to zero in Q4-19
8. Adjusted normalised EBITDA removes certain items, including fair value gains
on property and non-recurring income and expenses.
31
Please refer to published audited 2019 Financial Statements for full disclosure. Note that numbers may not add correctly due to rounding
8
134.8
Financial Highlights: Balance Sheet
Condensed Balance Sheet
Comments
€m
Investment property
Investment in joint ventures
Equity investments
Other non-current assets
Financial Assets (ROFOs)
Non-current assets
Financial Assets (ROFOs)
Other current assets
Cash and cash equivalents
Current assets
Total assets
Share capital & related reserves
Retained earnings
Equity attributable to equity holders
Non-controlling interest
Total equity
Interest-bearing loans and borrowings
Deferred tax liability
Lease liabilities
Other non-current liabilities
Non-current liabilities
Interest-bearing loans and borrowings
Current portion of lease liabilities
Other current liabilities
Current liabilities
Total equity and liabilities
1
2
3
4
5
6
2019
3,049
18
10
50
3
3,130
20
40
292
352
3,482
1,702
213
1,915
-
1,915
1,300
134
30
6
1,470
24
2
71
97
3,482
2018
2,391
38
9
19
3
2,460
13
35
230
277
2,737
899
186
1,085
212
1,297
1,235
107
-
16
1,358
24
-
58
82
2,737
Variance
658
-20
1
31
0
669
8
5
62
75
745
803
27
830
-212
617
65
27
30
-10
112
0
2
13
15
745
IFRS Book Value per share (basic)
EPRA Net Asset Value per share (diluted)
Shares Outstanding (diluted) - ('000)
€ 8.64
€ 9.30
222,410
€ 8.19
€ 9.04
132,699
€ 0.45
€ 0.26
89,711
% Chg
28%
-53%
11%
161%
10%
27%
59%
16%
27%
27%
27%
89%
14%
76%
-100%
48%
5%
26%
100%
-63%
8%
1%
100%
23%
19%
27%
5%
3%
68%
1. Growth in investment property by €0.7bn split to:
• New acquisitions of €423.7m in Poland (€335.1m) and Romania (€ 88.6m)
• CAPEX of €55.6m from our development projects in Romania and €35.1m on
standing properties (mainly in Poland)
• Addition of €32.1m on adoption of IFRS 16 for right of perpetual usufruct of
the land in Poland
• Revaluation of portfolio of €117.7m
2. Investments in Joint-Ventures
• Investment in two new JVs (€14.3m) and share of results (€3.5m)
• Transfer of €38m on consolidation following the acquisition of the remaining
50% in our RBC investment
3. Cash and Cash Equivalent of €292m at 31 December 2019 increased as a
result of:
• Net cash inflow from Operations of €80.3m
• Cash outflow for Investing Activities of €375.0m
• Net Cash inflows from Financing Activities of €359.2m
4. Share Capital change due to:
• €599m net proceeds from equity capital raises
• €179.4m from share exchange with Globalworth Poland minority holders
• New share capital issued (€29.2m) as part of the incentive plan termination
5. Retained Earnings up by €27m
• FY-19 profits (+€170.2m) and the gain on acquisition of non-controlling
interest in GPRE (+€5.5m), partially offset by dividend payments (-€93.9m) and
incentive plan termination (-€55.0m)
6. Non-Controlling Interests
• Decrease due to acquisition of 100% of Globalworth Poland
Please refer to published audited 2019 Financial Statements for full disclosure. Note that numbers may not add correctly due to rounding
32
EPRA NAV and Earnings Metrics
€m
Earnings Attributable to Equity Holders (IFRS)
Adjustments per EPRA Guidelines:
Fair Value gain on investment property
Chg. in FV of financial instruments & resp. close-out costs
Losses on disposal of investment properties
Chg. in value of financial assets through P&L
Acquisition costs
Gain on acquisition of subsidiaries
Tax credit relating to losses on disposals
Deferred tax charge in respect to above
Adjustments in respect of JVs and other items
Non-controlling interests in respect of the above
EPRA Earnings
EPRA Earnings per share (basic)
€m
Equity Attributable to Equity Holders (IFRS)
Adjustments per EPRA Guidelines:
2019
170.2
2018
80.3
-117.7
-34.1
0.5
1.6
-1.9
0.2
-
(0.0)
29.7
-4.4
2.7
80.9
0.3
2.7
-5.5
1.2
-0.3
(0.0)
17.5
-4.1
2.9
60.9
€ 0.44
€ 0.46
2019
2018
1,914.7
1,084.9
Deferred tax liability in respect to property revaluations
157.6
128.6
FV of interest rate swap
Goodwill as a result of deferred tax
Adjustments in respect of JV for above items
Non-controlling interests in respect of the above
EPRA Net Asset Value
EPRA NAV per share (diluted)
1.5
-5.7
1.3
0.0
2.1
-5.7
1.3
-11.1
2,069.4
1,200.2
€ 9.30
€ 9.04
IFRS to EPRA Earnings Bridge (€m)
Change in EPRA NAV (€m)
(1)
“Other” includes the costs associated with the change in the arrangements for the long-term incentive plan for the Group’ Executives (cash payment of €25.8 million and transfer of 3.2 million shares), as well as
other movements within equity.
33
Financing Metrics
Key Balance Sheet
Metrics
■ 34.7% LTV
■ 2.83% weighted average interest rate
■ 83.3% debt via unsecured, public debt markets
■ 4.3 years average maturity of debt
Debt
Instruments
■ €550m 5 yr Eurobond in Jun-17 with 2.875% coupon
■ €550m 7yr EMTN issue in Mar-18 with 3.0% coupon
■ Selective use of secured financing facilities
■ €200m 4.5 yr unsecured RCF (drawn in Mar-2020)
Financing Strategy
■ Long-term LTV target of below 40%
■ Largely unsecured debt structure, but seeks to optimise
flexibility around portfolio and financing management
■ Target diversification across debt maturities
Investment
Grade
Credit Rating
■ Fitch: BBB-, stable outlook
■ S&P: BBB-, stable outlook
■ Moody’s: Baa3, negative outlook(1) (April update)
Consolidated Loan to Value Ratio
Extended Debt Maturity Profile – Dec-19 (€m)
€m
31-Dec-19
31-Dec-18
Balance Sheet Debt (at Face Value)
Less: Cash/Cash Equivalents
Net Debt
Add: 50% Share of JV Debt
Less: 50% Share of JV Cash
Combined Net Debt
Investment Property*
Less: Other operating lease commitment
Group Open Market Value
Add: 50% share of JV Property OMV
Group Share of Total Open Market Value
Loan-to-value ratio (“LTV”)
1,342
(292)
1,050
-
(0)
1,282
(230)
1,052
14
(2)
1,050
1,065
3,017
(1)
3,016
15
3,030
34.7%
2,391
(2)
2,389
36
2,426
43.9%
700
600
500
400
300
200
100
0
2020
2021
2022
2023
2024
2025
>2025
* As the carrying value of lease liability equals with the investment property – leasehold at 31 December 2019, both related
asset and liability of €32m are excluded from the LTV calculation above.
(1) Moody’s in April 2020 affirmed Globalworth's Baa3 ratings and changed its outlook to negative.
34
Other Supporting Material
35
Future Developments:
Globalworth has a number of developments to be developed in the future in phases, mainly office and industrial projects, in
Bucharest and other principal regional cities in Romania, and on completion will offer c.880.6k sqm of high-quality real estate
space, providing an expected blended yield on investment cost of 11.2%.
Secured Projects
Podium III
Globalworth
West
Chitila Logistics
Hub
(Other Phases)(2)
Constanta Business
Park
(Other Phases)(2)
Timisoara
Industrial Park
(I & II) (Other
Phases)
The Luterana
Development
Green
Court D
Status
Type
Future
Development
Future
Development
Future
Development
Future
Development
Future
Development
Future
Development
Future
Development
Office,
Krakow
Office,
Bucharest
Industrial,
Bucharest
Mix-Use,
Constanta
Industrial,
Timisoara
Office,
Bucharest
Office,
Bucharest
Est. GLA (k sqm)
Cost / Capex to 2019YE (€m)
GAV (€m)
Est. Remaining Capex (€m)
Est. Rental Income (100%)
Est. Yield on Cost
Est. Yield on GAV + Capex
17.7
7.5
8.9
34.1
3.1
7.5%
7.3%
33.4
4.4
7.5
41.1
5.1
11.1%
10.4%
Note: Figures presented as at 31 December 2019, with status of developments updated for April 2020.
(1)
(2)
Calculated as Est. Rental Income/ (GAV (Dec 19) + Est. Remaining Capex)
50:50 Joint Venture; figures shown on 100% basis
53.0
3.3(3)
3.8
19.6
2.3
10.2%
10.0%
549.6
12.0
19.3
220.3
28.6
12.3%
11.9%
184.2
7.0
10.9
67.9
7.5
10.0%
9.5%
26.4
7.2
14.4
40.4
5.8
12.2%
10.6%
16.2
2.9
5.9
25.1
3.0
10.7%
9.7%
36
Combined Standing Commercial Portfolio Snapshot:
(data as of 31 December 2019)
Number of
Investments
(#)
Properties
(#)
Value
GAV
(€m)
Area
GLA
(k sqm)
Occupancy Rate
by GLA
(%)
Rent
Contracted
Rent (€m)
WALL 100% Rent
(€m)
Years
Contracted Headline Rent / Sqm or Unit
Office
(€/sqm/m)
Industrial
(€/sqm/m)
Commercial
(€/sqm/m)
Office Portfolio
Bucharest New CBD
Bucharest Other
Romania: Office
Warsaw
Krakow
Wroclaw
Lodz
Katowice
Gdansk
Poland: Office
Total Office Portfolio
Mix-Use Portfolio
Warsaw
Wroclaw
Katowice
Total Mix-Use Portfolio
Industrial
Timisoara
Pitesti
Constanta
Bucharest
Total Industrial Portfolio
Other Portfolio
Bucharest New CBD
Upground Complex - Residential
Bucharest New CBD
Upground Complex - Commercial
Total Other Portfolio
Total Standing Commercial Portfolio
Of which Romania
Of which Poland
7
4
11
8
4
3
1
2
1
19
30
1
1
1
3
2
1
--
--
3
1
--
36
14
22
10
6
16
9
11
3
2
5
1
31
47
5
1
1
7
5
1
--
--
6
1
--
755.6
281.0
1,036.6
602.8
304.1
148.6
74.0
131.0
59.3
1,319.6
281.8
116.3
398.1
188.5
129.3
56.6
35.5
63.3
25.6
498.8
2,356.2
897.0
130.5
114.4
54.9
299.7
67.6
49.5
--
--
22.3
40.9
24.3
87.5
121.2
68.4
--
--
117.1
189.7
61.6
10.0
33.7
6.0
71.6
39.6
60
22
38
2,783.1
1,163.7
1,619.4
1,180.1
593.8
586.3
93.2%
92.3%
93.0%
92.0%
90.8%
99.7%
98.9%
99.8%
100.0%
94.4%
93.8%
95.8%
87.5%
96.3%
92.1%
100.0%
100.0%
-
-
100.0%
nm
99.6%
nm
94.7%
95.3%
94.1%
49.0
18.8
67.8
38.3
20.4
9.4
5.3
10.0
4.1
87.5
155.4
7.0
6.5
3.9
17.4
5.5
4.3
--
--
9.8
1.1
0.7
1.9
183.3
78.3
105.0
5.1
6.4
5.5
3.7
3.3
5.0
4.0
2.9
2.3
3.6
4.4
4.9
3.4
3.5
4.0
7.4
5.5
--
--
6.6
1.2
8.8
4.2
4.5
5.6
3.7
52.1
20.9
72.9
42.1
22.6
9.4
5.4
10.0
4.2
93.6
166.6
7.2
7.5
4.2
18.8
5.5
4.3
--
--
9.8
1.1
0.7
1.9
195.9
83.5
112.4
14.2
13.7
14.1
16.8
13.2
13.0
11.7
12.5
12.3
14.3
14.2
22.4
12.4
13.6
17.2
6.2
5.3
--
--
6.0
--
--
--
14.2
13.8
14.5
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
3.5
5.3
--
--
4.1
--
--
--
4.1
4.1
--
14.2
13.6
14.0
16.7
13.2
13.0
11.9
12.3
12.2
14.2
14.1
24.6
13.7
13.1
16.4
3.7
5.3
--
--
4.3
--
9.2
9.2
12.6
10.7
14.5
37
For more information, please see www.globalworth.com
or contact ir@globalworth.com
38