November Introducing Habas Investments

Transcription

1 November 2012 Introducing Habas Investments

2 Disclaimer Certain matters discussed by Habas Investments in this presentation constitute forward-looking statements within the meaning of the securities laws. Although Habas Investments believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that these expectations will be achieved. Factors that could cause actual results to differ materially from current expectations include changes in macroeconomic conditions and the supply and demand factors in the areas in which Habas Investments is active; the continuing financial success of Habas Investments current and prospective tenants; continuing supply constraints in its geographic markets; the availability of properties for acquisition; the success of its efforts to lease up vacant space; the effects of natural and other disasters; the ability of Habas Investments to successfully integrate the operations and systems of acquired companies and properties.

3 Operations in Israel and Western Europe Amsterdam Tel Aviv Zurich

4 A multinational group with a long family heritage 1953: Separation of the footwear and real estate business 1962: First major development project 1991: Built the Kfar Saba City Center 2004: Start of the Yoo Tel Aviv project 2010: Start of the real estate debt operation 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s : Foundation of a leather trading business in Palestine 1930s: Purchase of land in what would later become major cities in Israel 1949: Foundation of the Jerusalem shoes factory - the largest in the Middle East 1975: Developed residential neighborhoods in Israel 1980s: Developed 1,000s of residential units, shopping centers in Israel 1993: TASE IPO of the public company* Acquiring shopping centers in the US : Re-established the European HQ with major investment s in Western Europe 2011: Expansion of European activities and RE Debt; Completion of Israeli projects. * One of the Habas Group companies

5 Habas Investments: three business segments INCOME PRODUCING PROPERTIES Cash flow from NSI dividends and direct ownership of properties in WE and the U.S DEVELOPMENT Large-scale projects where the group s skill and reputation can be leveraged to command a premium REAL ESTATE DEBT Combining real estate expertise with financial sophistication ROOTED IN DEEP REAL ESTATE EXPERTISE

6 Overview HABAS INVESTMENTS Division INCOME PRODUCING PROPERTIES DEVELOPMENT REAL ESTATE DEBT HQ Netherlands US Israel Netherlands Switzerland Properties NSI 20.5% Swiss portfolio German portfolio Caesarea Koresh Yoo Tel Aviv 1 Rothschild Purchase of B-notes and other CMBS tranches

7 Income producing properties

8 Habas Operates in Highly Developed Economies 2011 IMF Netherlands Switzerland Germany Belgium GDP Current prices (US$ Bil.) (% Change) 838 (+1.2) 660 (+0.2) 3,607 (+0.7) 514 (+2.0) GDP per capita (PPP) US$ 42,023 44,451 38,077 37,780 Inflation (% change) Unemployment rate (%) Population (mil)

9 NSI - Portfolio and Market Focus Office/Industrial 72% Retail 28% Netherlands 70% Belgium 28% Switzerland 2% Class B properties in Class A cities 271 properties 1,700 leases 229 properties; 1.5 billion Retail and Offices. Gross average yield of 9.3% 40 properties; 601m Offices and Warehouses on logistic axes (North/South and East/West). Gross average yield of 8.7% 2 properties; 36m Exit strategy in progress. Gross average yield of 6.8%

10 NSI: a Dutch REIT - Space to Perform Financial profile Portfolio profile Assets 2.2bn Third largest mixed use portfolio REIT in the Netherlands Equity Q1-Q Revenue 829m 120m Habas owns 20.5% and is the largest shareholder. Hertzel Habas is the NSI Chairman of the Supervisory Board Q1- Q NOI 103m Merged with a 1bn portfolio REIT in 2011 Current dividend yield 14-15% High annual dividend distributed quarterly in cash/stocks

11 NSI - Work Plan Target LTV after merger completion: Short Term <55%; Mid Term =50% Refinance completion in Disposal program of the Swiss remaining portfolio and non-core assets in the Netherlands Change of dividend distribution policy - option for either stock or cash Enhancing merged portfolio quality by increasing occupancy rates and lease renewals

12 Direct ownership of income producing properties in Western Europe - some examples The Dietikon City Plaza is a 12,700 sqm Class A office building in Dietikon, Switzerland, situated on Zurich's outer ring. The leading office building in the area, it has 6 tenants and a 100% occupancy rate. Built in 1992, renovated in Bad Homburg is a 10,000-sqm retail property located in a prime location near Frankfurt. The high-quality, distinctive property includes a 241- car parking lot. The property is rented out in its entirety to one tenant, Karstadt retailer chain for a period of 15 years with two 5-yr extension options.

13 Development

14 Careful selection of development projects Habas Investments probably sees every development opportunity in Israel, but only handpicks those where it can create a truly new reality in real estate far ahead of anyone else

15 The Group s recent flagship development projects The Yoo Tel Aviv towers were developed under design supervision of Philippe Starck. The project led the way in transforming a deserted waste land into one of the most exclusive neighborhoods in Tel Aviv, and was the first branded development project in Israel. Total sales were NIS 1.2bn Back in 2003, people were still wondering whether high net worth individuals would buy multimillion dollar apartments at 1 Rothschild in central Tel Aviv. Habas created the market. Total sales were NIS 800m

16 Future projects Vacation apartments and retail space with a view of either the Mediterranean Sea or the Caesarea international golf course. In advanced planning stages. An attractive location in the heart of Tel Aviv near Rothschild Boulevard. The company is in the process of rezoning for hotel, residential and retail use.

17 Past development projects A 600 unit residential complex built to the highest quality standards in the heart of Kfar Saba, an affluent suburb in the greater Tel Aviv area The Arim Mall with over 100 businesses created a new city center in Kfar Saba, an affluent suburb in the greater Tel Aviv area. Many years after completion, it still is among the top 10 shopping centers in Israel 1994 Dan Eden is a luxurious residential project located in one of Tel Aviv's most desirable neighborhoods, Shikun Dan Combining quality construction with a high standard of living, the Country Neighborhood in Modi'in is one of the most successful residential projects in the newly established city situated between Tel Aviv and Jerusalem 1998

18 Real Estate Debt

19 A significant opportunity for Habas According to DTZ, the European Debt Funding Gap (between existing debt and debt available to replace it) for is $182bn 2014 It takes real estate expertise, not just financial expertise to separate the chaff from the wheat

20 Habas Loan-to-Own Strategy What a pure financial player sees Owner credit worthiness Loan details Property potential What Habas sees

21 A recent case example: Wankdorf Center (Bern) 2006 B-note Senior debt Equity CHF 65 m CHF 230 m The owner purchases the building financed by 2 loans Breach of LTV Covenant for the whole loan Wiped out The owner is in breach of the LTV covenant, despite that there are no problems with the property and its tenants payments and the loan is still performing. April 2011 Habas Buys for CHF 11.25m Wiped out Based on deep understanding of the property, Habas buys the b-note at a discount and offers the owners either to buy the property or do all the work to sell the property in return for a profit share May 2011 Habas recoups Habas Profit share Habas takes over managing all aspects of the deal for selling the property, with the owner s consent, making a CHF19m or 170% profit in 2 months

22 About

23 Shareholders Public HABAS INVESTMENTS Habas family Odin Psagot* XT Real Estate * Institutional investor

24 Senior management Ronen Akavia CEO Amir Nitzani CEO Habas Star Eyal Reggev CEO Habas USA Dafna Katzir VP Marketing & Sales Shachar Klein CFO

25 Board of Directors Yoseph Rosen Josef Habas Haim Barzel Zamir Sofer Shimon Mizrahi Izake Lotan Noya Habas Hertzel Habas Chairman Eithan Ben Eliahu

26 Revenues and total income NIS m Q Q Development Income producing properties* Real estate debt Total revenues Net profit )92.7( *Including rental income, company s share of subsidiary income, profit from NSI stock purchase, profits from the merger of NSI and profits from Swiss property sales.

27 Balance sheet NIS m 1,833 1,833 1,646 Cash Deposits in pledged bank accounts Assets held for sale 1,646 Other ST&LT liabilities Liabilities held for sale Other ST assets Inventory of land for construction Credit from banks and others Investments in equity accounted investees Debentures Equity Other LT assets 23%* 19%* ASSETS LIABILITIES *Equity as % of total balance sheet

28 Cash flow NIS m Cash 2011 EOY Ops H Inv H Fin H Cash EOP H Ops Q Inv Q Fin Q Cash EOP Q3 2012

29 Thank you