Institutional presentation

Transcription

1 Institutional presentation FY

2 IRCP at a glance Business description Largest owner and operator of premium shopping malls and one of the largest owners of office buildings in Argentina ~427,000 gross leasable area ( GLA ) in prime locations Land reserve to develop ~372,000 1 sqm of commercial property Over 98% occupancy rates in shopping malls in last 10 years Average lease rates of US$26.1 / sqm and 92% office occupancy GLA breakdown (as of June 30, 2018) Simplified ownership structure 7 office buildings ~83,000 sqm 20% BYMA 16 year track record 20 year track record Total: ~427,000 1 sqm 16 shopping malls ~344,000 sqm 80% 86.3% 13.7% IRSA is a leading, diversified, publicly listed company with presence in real estate and other sectors 2

3 We have consistently grown and established our market position by developing and adding premium real estate assets to our portfolio Our growth story in GLA ( 000 sqm) shopping malls 1 office building % developed shopping malls 5 office buildings 64% acquired In December 2014, we acquired several premium office buildings from our parent company IRSA and changed our name to IRSA Commercial Properties 3

4 Our prime portfolio of assets is located in Argentina s wealthiest neighborhoods and principal business districts Buenos Aires shopping malls Buenos Aires office buildings 67% market share in terms of sales City of Buenos Aires City of Buenos Aires Argentina shopping malls Low income Area Mid Income Area High income Area Land reserve Expanding Corporate North Area Business Center AAA Location Back Office Center Land reserve Our premium locations act as an entry barrier for new competitors 4

5 We have unique advantages that differentiate us from our competitors both nationally and regionally 1 Bargaining power and ability to charge top-level rents and brokerage fee 2 Real sales tracking of all tenants Key money paid in advance Brokerage fee paid in advance Full control of mall operations BEST Real Estate Company 3 Strong local tenants and longstanding strategic relationships that mitigate risks 4 Valuable data gathering through cutting edge technology and strong customer relationships Long term history of collaboration working with Top 10 tenants Strong local apparel industry and low tenant concentration Entertainment Home Services Strong local Top tenant Anchor Store industry represents <7% of total sales 5% Restaurant Miscellaneous Clothing and Footwear 54% ~110mm annual shopping mall visitors ~2.6x Argentina s population Electric appliances 5

6 We are the top mall operator in Latin America, supported by strong operating and financial metrics Highest market share 1 Highest ownership interest in malls Highest occupancy Total GLA as % of country GLA Ownership stake in malls (%) Occupancy (%) 26,5% 12,0% 93,3% 83,0% 77,0% 60,7% 59,5% 98,5% 97,3% 96,5% 94,7% 92,4% 6,3% 5,1% 3,0% Highest sales per sqm Company average LTM (US$/sqm) Lowest leverage ratio Net debt / LTM EBITDA 6,430 5,911 5,528 5,9x 4,676 2,865 3,4x 2,4x 2,1x 1,4x Source: Company filings, as of March 31, Multiplan, BR Malls and Iguatemi as of March 31, Parque Arauco market share corresponds to Chile, as of

7 2. Significant growth opportunities 7

8 Shopping malls in Argentina present an attractive opportunity given high consumption rates and low penetration Local GLA per capita (mall GLA per 000 inhab.) Local shopping mall sales penetration (%) Shopping mall sales / retail sales ,0% 92 24,0% 79 21,4% 63 19,4% 63 17,0% 50 Latam avg w/o Arg: 93 Source: Cushman & Wakefield Global Shopping Center Development Report, as of ,0% Source: International Council of Shopping Centers, as of 2014 The Argentine shopping mall industry is the youngest in Latin America and has strong potential for future growth Industry age years Southdale Center 53 years Iguatemi Sao Paulo 44 years Unicentro Bogota 43 years Plaza San Miguel 40 years Shopping del Sol 37 years Parque Arauco 34 years Montevideo 32 years Soleil 8

9 The Buenos Aires office sector is underdeveloped relative to other major cities in Latin America Low regional penetration in the Class A office sector 491 Office penetration (sqm / '000 inhab.) Latam avg w/o Arg: x Santiago Mexico City Bogota Sao Paulo Lima Buenos Aires Source: Jones Lang LaSalle Latin America Office Report YE 2016 and United Nations The World s Cities in 2016 report A+ offices in the City of Buenos Aires Sale price (US$/sqm) Rent (US$/sqm/month) ,7% 9,8% 8,3% 8,0% 4,6% 5,3% 5,3% 7,2% 7,8% 7,7% '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Source: LJ Ramos Informe Tecnico Mensual Julio

10 Projects under development: CAPEX Total investment: ~ USD 208 million (including land at BV) Projected stabilized EBITDA: USD 24 million EBITDA / Investment: 11,6% Shopping Malls Expansions under development sqm GLA 344,025 2,200 4,000 2,000 6% 12,800 End of concession FY19 13, ,290 ~USD 8 million increase in EBITDA (+7%) Investment: USD 54 million FY18 Alto Comahue (Movie Theaters) Alto Palermo Expansion Alto Rosario Expansion Mendoza Plaza (Sodimac & Falabella Expansion) Projected FY20 Office buildings under development sqm GLA 83,213 32,000 58% 16, ,225 ~USD 16 million increase in EBITDA (+70%) Investment: Land USD 44 million Development USD 110 million FY18 Polo Dot 1st Stage Catalinas Projected FY20 10

11 Our current projects under development Highest sales/sqm mall in the region Shopping Alto Palermo Modern office building in the City Catalinas Office Building City of Buenos Aires shopping mall US$28.5mm estimated investment FY2019 opening date 3,900 sqm GLA City of Buenos Aires office US$45mm estimated investment FY2020 opening date 16,000 sqm GLA Progress 16% 11

12 Our current projects under development Top quality office project in the booming northern area 98,000 sqm 1 Total GLA Polo Dot Phase 1 Progress 74% 32,000 sqm GLA Philips Building Recently acquired 8,000 sqm GLA FY2019 opening date 80% owned by IRCP 28,000 potential sqm GLA US$65mm estimated investment Buenos Aires office 1 Includes 32,000 sqm from Dot Phase 1; 38,000 sqm from Dot Phase 2; 8,000 current and 20,000 additional potential sqm from recently acquired Philips building 12

13 Recent acquisition Land Plot in La Plata district (March 2018) Surface: 78,000 sqm Capacity to develop: 100,000 sqm Price paid: USD 7.5 million Potential use: Mixed use (shopping mall, offices, hotel & residential) La Plata is the 5th highly populated district in Argentina with no shopping malls 5 Km away from the city center 13

14 Recent acquisition - Maltería Hudson property (Jul 2018) Surface: 190,000 sqm Capacity to develop: 177,000 sqm Price paid: USD 7 million Potential use: Mixed use Hudson - Berazategui ~30 km Maltería Hudson ~30 km Located in BA - La Plata highway, main connection to the south of BA and the Atlantic Coast 14

15 Our land reserve will allow us to significantly expand our commercial real estate portfolio We have a robust pipeline for shopping malls as well as for premium office properties 1.7x x ~21,000 sqm 130 currently under construction or to start soon ,000 sqm currently under construction Current Brownfield Greenfield Current GLA & pipeline In existing land reserve Current New developments Current GLA & pipeline In existing land reserve 15

16 Landbank Growth for mixed-use developments in Argentina Commercial, Mixed-uses and Residential Landbank (th. Sqm) 1,636 San Martín 470 th. sqm Greater BA 1,345 Recent Acquisitions 294 La Plata 117 th. sqm Greater BA Maltería Hudson 177 th. sqm Greater BA UOM 464 th. sqm Lujan - BA Province Other Residential land reserves 36 th. sqm Neuquén, Córdoba & Coto air space Malls Expansions FY 2017 FY 2018 Land for Rental GLA (Th. sqm) Mixed-uses and Residential (Th. sqm) 16

17 Our five year development pipeline ~US$580mm estimated 5-year investment 1 CAGR 18-23: 8.9% 654,138 sqm Mendoza Plaza Mall 12,800 sqm Polo DOT Phase 3 22,400 sqm Jun-23 Alto Rosario Mall 2,400 sqm Catalinas Office 16,000 sqm San Martin Mall 35,000 sqm Intercontinental II 19,600 sqm Alto Comahue 2,200 sqm Cordoba Office 5,000 sqm Alto Rosario Office 10,000 sqm Tucuman Mall 10,000 sqm Jun ,238 sqm Legend Developments Expansions Polo DOT Phase 1 32,000 sqm Alto Rosario Mall 7,500 sqm La Ribera Mall 3,000 sqm Jun ,138 sqm Soleil 5,300 sqm Alto Palermo Mall 3,900 sqm Jun ,338 sqm Cordoba Shopping Cordoba Mall 7,000 sqm Polo DOT Phase 2 16,000 sqm Jun-21 DOT Mall 16,800 sqm 54,100 other potential expansions Alto Rosario 550,338 sqm Patio Bullrich Philips 18,000 sqm Jun ,538 sqm Caballito 68,000 sqm 2 La Plata Maltería Hudson 117,000 sqm 3 177,000 sqm 3 1,355,000 other potential developments Parana 5,000 sqm UOM Luján 464,000 sqm San Martin 470,000 sqm Others 36,000 sqm 1 Assumes average of US$/sqm of 2,500 for all developments and expansions excluding Alto Palermo (US$28.5mm), Dot Phase 1 (US$65mm) and Catalinas (US$45mm) 2 Approvals pending. Shopping mall GLA 30,000 sqm 3 Includes 50k sqm for potential residential/hotel 17

18 3. Financial highlights 18

19 Resilient revenue model That has withstood historical inflation and currency depreciation Shopping malls Revenue from leases Office buildings Revenues from leases In advance Our tenants pay a peso denominated base rent plus an additional percentage linked to sales % Sales Brokerage fee ~5x monthly base rent % Sales % Sales US$ US$ US$ Key money admission rights ~8x monthly base rent Base Rent Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Other revenues Non Traditional Advertising Shopping mall rent revenue breakdown 1 Other 15,1% 3-year average term for office lease contracts US Dollar based Parking 1 As of March 31, 2018 Stands Admission rights 9,1% Percentage rent 19,3% Base rent 56,5% Rental rates for renewed terms are negotiated at market 19

20 Financial overview Income from sales, rents and services (USDmm) NOI (USDmm) CAGR: 8.8% CAGR: 9.7% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Adjusted EBITDA (USDmn) 1 Adjusted FFO (USDmm) 2 CAGR: 9.4% CAGR: 13.4% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 1 Adjusted EBITDA: EBITDA minus changes in FV of Investment Properties + unrealized gain from sales of investment properties 2 Adjusted FFO: Total profit for the period minus net gain from FV adj. of investment properties, plus D&A, minus foreign exchange effects, gains/(losses) on derivative instruments, minus fair value gains of financial assets and liabilities, plus other financial results (net), plus deferred tax, excluding non-controlling interest 20

21 Financial overview Dividend payment (US$mm) FY13 FY14 FY15 FY16 FY17 FY18 1 Dividend payments converted to USD at the official exchange rate considering the ex-date of the dividend. 21

22 Consolidated Financial Results FY 2018 ARS million USD million FY 2018 FY 2017 Var % FY 2018 (1) FY 2017 (2) Var % Adjusted EBITDA 3,161 2, % % NOI 3,581 2, % % Adjusted FFO 2,412 1, % % Valuation Metrics Jun 30, 2018 Cap Rate 15.0% EV/EBITDA 7.4x P/FFO 7.9x P/BV 0.6x Notes 1. FY 2018 Avg. FX: $ FY 2017 Avg FX: $

23 IRSA CP Consolidated Debt as of June 30, 2018 Debt Description (USD million) Description Issue Currency Outstanding Amount (US$ million) Rate Maturity Series II Notes due 2023 (int.) US$ % Mar-23 Series IV Note due 2020 (local) US$ ,00% Sep-20 PAMSA loan* US$ ,24% Feb-23 Short-term debt ARS < 360 days Total IRSA CP s Debt IRSA CP s Net Debt *On February 2018, PAMSA (80% owned by IRCP) granted a loan with a bank for USD 35 million at % due on February Proceeds will be used to complete the Polo Dot 1 st stage office development Debt Amortization schedule (USD million) Debt Ratios Net Debt/EBITDA LTM 1.45x Loan to Value 2 23% Local Rating (Fitch) AA+ International Rating B+ 362,7 150,8 0,7 10,8 10, Notes 1. Net Debt less cash & equivalents, short-term financial current investments (cash & equivalents includes our holding in TGLT s convertible Notes for USD 20.2 million). 2. Gross Financial Debt over Total Assets 23

24 IRCP investment highlights 1 Largest commercial real estate company in Argentina with a proven track record acquiring and developing assets, even before capital markets were open in Argentina 2 Pure, simple and focused commercial real estate player positioned for Argentina s new growth phase 3 Unique prime portfolio of assets located in profitable areas 4 Strong cash flow generation with conservative financial discipline 5 Significant growth potential 6 Experienced management team with longstanding industry expertise 24

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