Capital market presentation August 2017

Transcription

1 Capital market presentation August 2017

2 About Developer of income generating properties Total GLA* 458,000 m 2 Operating in Israel and in 8 countries in Europe Public company since 2004 listed on TA-90 Developer of income generating properties Rating of A3 with stable outlook by Midroog Revenues from income generating properties during approx. NIS 372M Africa Israel Investments holds 56% of the company s shares 2

3 Financial overview N.O.I Operating income Net profit Equity For the 6 months ended NOI NIS 167 million Operating income NIS 197 million Net profit NIS 69 million Equity attributable to owners NIS 2,639 million (*) After the reporting period, and up to the date of approval of the financial statements, the EUR-NIS exchange rate increased by 6.7%. The estimated effect of this increase is other comprehensive income and an increase in the capital reserve in respect of translation differences of foreign operations in the amount of NIS 200 million. 3

4 Major events during the reporting period - completion of projects Property development in Israel and Europe During the reporting period the company continued implementing its business strategy, which is based on enhancing the value of its assets in Israel and in Europe through the development of projects on lands owned by it, and by starting new development projects in the company s main countries of operation. Following are the main developments in this field: During the first quarter of 2017 the company completed the construction of an office building with GLA of 13,000 m 2 in Airport City Belgrade, Serbia (phase 4.2). The building s occupancy rate is 66%. Accordingly, the company recognized a valuation gain of EUR 4.1 million. The company completed the first phase of a residential project in Prague named Tulipa Trebesin with 183 residential units. All the units have been sold. During the second quarter, 166 apartments were delivered, and the company booked a profit in the amount of EUR 8.8 million. The company is building the second phase (with 255 residential units, of which 208 units have been sold). The construction is expected to be completed in the second quarter of The company, together with Shikun & Binui, is developing a project at the center of Belgrade with approx. 400 residential units and 15,000 m 2 of retail and office space. The construction of the project s first and second phases with 178 residential units has been completed (2 apartments remain for sale). The company expects to complete the project's third phase, which includes additional 129 residential units (124 units have been sold) during the second half of The company has started the construction of an adjacent office building of 15,000 m 2 GLA. The construction works of the first phase of AFI City in Prague are underway. The project has 257 residential units, of which 247 units have been sold. The project's construction is expected to be completed in the first quarter of On August 2017, the company has received a building permit for an additional phase of this project, which includes 200 units. The company is building an office project in Prague named AFI Vocovice, with GLA of approx. 15,000 m 2, of which 62% has been leased (48% HOT). The construction is expected to be completed in the third quarter of 2018.

5 Major events during the reporting period project development Property development in Israel and Europe The company is building an office project named AFI Butterfly in Prague, with a GLA of approx. 22,000 m 2 of which 76% have been leased (46% HOT). The construction is expected to be completed in the fourth quarter of During February 2017, the purchase of a land plot in Warsaw city center for PLN 23.3 million (EUR 5.4 million) was completed. The company plans to develop a residential project with GSA of 6,000 m 2. The company is building the first phase of project AFI TECH in Bucharest with GLA of approx. 22,000 m 2. The construction works started during the third quarter of The company is building AFI Park Krakow project in Poland with a GLA of approx. 25,000 m 2. The construction works started during the second quarter of 2017 and expected to be completed in the fourth quarter of The construction of AFI Palace Brasov has been started. The project will include a shopping mall of 41,000 m 2 GLA (of which 26% have been already leased) and an office building of 15,000 m 2 GLA. The completion is expected on the first quarter of During the second quarter of 2017, the company started the construction works of Trebu Home project in Riga with 108 residential units (of which 6 units have been sold). The construction is expected to be completed in the fourth quarter of In project Osiedle Europejskie in Krakow, the company is constructing an additional phase with 214 residential units, of which 134 units have been sold and 144 units have been delivered until the end of the second quarter. The construction works on the Sarona Project in Tel Aviv, which is being developed in cooperation with Melisron, has began. The partners are promoting the process of increasing the building rights on the site in accordance with the master plan TA / 5000 up to 166,000 m 2. During August 2016 the additional building rights were approved by the Local Deposit Committee of the District Committee.

6 Major events during the reporting period project development Property development in Israel and Europe 6 In June 2016 the company won a tender of the Israeli Ministry of Finance. The company started the construction of the Ministry of Justice which includes approx. 35,000 m 2 of building area and an underground parking lot of 418 parking spaces, as well as retail areas of 1,500 m 2. The company will operate the building for a period of 22 years, and in consideration the company will receive a fixed annual payment from the state of approx. NIS 23 million. In August 2016 the company won a tender of the Israeli Ministry of Finance for the planning and construction of the Jerusalem District campus. The project will include 50,000 m 2 of building area, which includes approx. 416 parking spaces and retail space of approx. 4,000 m 2. The works commencement order was received in January During January 2017, the company completed the sale of its properties in Berlin, with a net consideration of EUR 122 million. As a result of the transaction, the company generated net cash flow of approx. EUR 51M. During March 2017, the company completed the sale of 3 additional assets in Germany for an aggregate consideration of EUR 11.9 million. As of June 2017, the book value of the remaining properties in Germany is EUR 3.8 million. During April 2017, the company signed an agreement to purchase leasing rights of approx. 8,000 m 2 (until 2029) in the science park in Nes Ziona which includes a fully occupied building, for approx. NIS 10.2 million. During April 2016, the company sold all of its ownership rights in a plot of land in Yachin for NIS 86 million. During February 2017 the purchase price was fully received and the transaction was completed. During August 2017, the sale transaction of office buildings AFI Park 1-3 in Romania and the letter of intent for the sale of AFI Park 4-5 were canceled. The company has no intention to put up for sale those five buildings in the near future. The company plans to refinance the bank loans in relation to these properties. During June 2017, to company signed an addendum to the construction agreement with the Tel Aviv Municipality in relation to the Habarzel parking lot in Tel Aviv. The addendum sets the terms for the renewal of the construction works on the site. Danya Cebus (the general contractor of the project) is responsible for obtaining a building permit for the construction of the parking lot.

7 Assets overview Total assets NIS 7.2 Billion Breakdown of the company's assets as at Income generating properties under development NIS 0.7 B (10%) Total assets NIS 7.2 billion 10% 3% 15% Inventory of apartments NIS 0.2 B (3%) 72% Income generating properties (commercial) Land in Israel and Europe NIS 1.1 B (15%) NIS 5.2 B (72%) (*) Based on the actual percentage interest in each asset, including in equity holdings 7 (**) The breakdown of the properties is different than the balance sheet classification. Lands classified in the financial statements as investment property under development or investment property the construction of which has not yet commenced are classified here as land.

8 The company s group structure AFI Properties A F I Europe N.V. I n c o m e generating p r o p erties in Israel Hungary Latvia Poland Bulgaria Serbia Romania Czech Republic Residential Residential Offices Residential Offices Residential Offices Residential Malls Offices Residential Offices Residential 8

9 Strategy and objectives EUROPE Development of projects in the company s main countries of operation, on the basis of its existing land bank, with a view to reducing the portion of the company s land bank in its overall asset portfolio, while evaluating the market conditions and the possibility of raising financing for the development of these projects. Concurrently, the company will examine the possibility of initiating new projects in its main countries of operation. Accordingly, over the short-term the company intends to develop residential, retail and office projects in the Czech Republic, Romania, Serbia, Poland and Latvia. Over the medium-term, the company intends to expand its operations by purchasing land that is ready for development in its main countries of operations. The book value of the lands that the company intends to develop in the short term is approx. NIS 370 million, which is approx. 37% of the total value of its land bank in Europe. 9

10 Strategy and objectives ISRAEL The company intends to expand its development activities in the investment properties sector in Israel. Project development will be done first and foremost on land already owned by the company (Kiryat Weizmann in Ness Ziona and the Sarona project in Tel Aviv). The company intends to expand its operations in the area of BOT projects and in rental housing. The company intends to examine the purchase of land or other properties for purposes of future development. Moreover, from time to time, the company will evaluate business opportunities and proposals for the sale of properties that it owns or for part of them. 10

11 Net Asset Value Net Asset V a l u e Net Asset Value Analysis Income generating property (**) Income generating property under development )*( Inventory of residential units (including residential units under development) Land Total Israel Value 1,572, ,625-98,717 1,992,743 Attributable loans 1,015, , ,192,037 Loan to value 65% 55% % Net asset value 556, ,560-98, ,706 Europe Value 3,603, , ,942 1,010,743 5,169,106 Attributable loans 1,754,515-69,438 45,267 1,869,220 Loan to value 49% - 31% 4% 36% Net asset value 1,848, , , ,476 3,299,886 Total Net Asset Value 2,405, , ,504 1,064,193 4,100,592 (*) The value of the investment properties under development in Europe includes AFI Butterfly and AFI Vokovice in the Czech Republic, AFI Park Krakow in Poland and AFI Tech Park and AFI Palace Brasov in Romania. The value of the investment properties under development in Israel includes Sarona Project and building no.1 in plot no.2 in Park Weizmann. (**) The value of the investment properties in Europe excluding properties in Western Germany in amount of NIS 14 million classify to assets held for sale in the company s financial statement. 11 )***( Based on the actual percentage interest in each asset.

12 Geographical distribution- income generating properties G e o g r a p h i c a l d i s t r i b u t i o n Country Number of assets Total GLA (thousand m 2 ()*( Annual income (million NIS)(**) Book Value )*( (million NIS) Average occupancy rate Israel ,572 97% Czech Republic % Romania(***) ,756 98% Serbia % Bulgaria % Total ,176 89% (*) Based on the actual percentage interest in each asset, including in equity holdings. (**) The annual revenues are based on the tenant list as at June 30, 2017 (except AFI Palace Controceni revenues which based on the first half of 2017) and not intended to be a forecast of expected revenues for (***) The office buildings AFI Park 1-5 in Bucharest, Romania were taken into account as a single assets. 12

13 Investment properties in Israel ISRAEL Property name Location Property Type Total GLA Holding (m 2 ) (1) % Book value as at (1) Revenues for 2017 NIS) (1)(4) Occupancy rates Kiryat Weizmann (5) Ness Ziona Science Park 63,640 60% 510,650 42,788 97% Concord (2) Bnei Brak Offices 23, % 272,300 22,932 98% Avia Yehud Offices 2,795 40% 28,200 2,051 97% rental housing 'Glil yam' (3) Herzliya Rental housing 10,944 50% 186,600 7,200 93% Total assets , ,750 74,971 - Hayovel Tower Tel Aviv Offices + commercial 33,046 49% 542,430 37,882 98% City Center Haifa Offices + commercial 4,833 45% 32,220 2,896 97% Total assets including Equity Companies ,735-1,572, ,749 97% (1) The GLA, the book value and the annual revenues of the equity companies are presented according to company's percentage interest. (2) The value reflects the relative share of the company in the project. (3) As of , 253 units has been leased which constituting 93% occupancy. (4) The annual revenues are based on the tenant list as of June 30, 2017 and not intended to be a forecast of expected revenues for (5) Including building 15 in Park Weizmann purchased in April

14 Investment properties in Europe EUROPE Name Country City Type GLA ) 1( Holding % Book value as of NIS) ) 1) Revenues for 2017 NIS) (1)(2) Occupancy rates AFI Cotroceni Romania Bucharest Retail 79,226 98% 1,857, ,609 98% AFI Park Romania Bucharest Offices 69, % 627,038 51,255 98% AFI Palace Ploiesti Romania Ploiesti Retail 33, % 271,603 21,105 99% Airport City Belgrade (3) Broadway Palace Cz Prague Serbia Belgrade Offices 50,567 54% 380,879 28,996 79% Offices + commercial 8, % 56,221 6,067 74% Classic 7 Cz Prague Offices 33, % 319,461 21,496 99% Business Park Varna Bulgaria Varna Offices 43, % 91,118 3,364 31% Total assets ,726-3,603, ,892 (1) The book value, annual revenues and land area are presented according to company's percentage interest in relation to the relevant property. (2) The annual revenues are based on the tenant list as at June 30, 2017 (except the revenues of AFI Controceni which are based on the first half of 2017) and not intended to be a forecast of expected revenues for (3) After the reporting period and before the publication of the financial statements, lease agreements in respect of 2,200 m 2 of GLA were signed and the occupancy rose to 79%. 14

15 Structure of the Company's financial debt Financial debt structure as at (in NIS thousands) Amount of debt % of the debt Bonds (seriers 5+6+7) (*) 1,382,106 32% Corporate loan from a bank in Israel 16,095 1% Loan from financial institutions in Israel (backed by properties) 837,352 19% Loans from banks in Europe (backed by properties) (non-recourse) (**) 2,043,498 48% Total debt 4,279, % (*) During July 2017, the Company raised an amount of NIS 150 million (series 5). (**) Including a full recourse loan in the amount of EUR 35 million. 15

16 AFI Cotroceni Key features Location Bucharest, Romania AFI Cotroceni mall NOI evolution (in EUR thousands) GLA 80,514 m2 * Occupancy 98% Parking spaces 2,500 Asset value 473M 26,960 28,719 29,779 30,713 33,793 NOI (when fully let) 35M 16,545 16,742 Outstanding bank loan 193.7M A variety of entertainment complexes 20 movie screens (Cinema City & IMAX) An ice skating rink (830 m2) 2 electronic casinos Carting and bowling H1 16 H1 17 Total average number of daily visitors is approx. 50,000. )*( Reflects a percentage interest of 100%. According to the Company's actual percentage interest the area is 79,226 m 2. The construction works of an additional 6,500 m2 are underway and fully leased. 16

17 '000 eur AFI Cotroceni Revenue development The ratio of total rental revenue is 13% Key features Location GLA Bucharest, Romania 80,514 m2 Occupancy 98% Parking spaces 2,500 Asset value 473M NOI (when fully let) Outstanding bank loan 35M 193.7M A variety of entertainment complexes 20 movie screens (Cinema City & IMAX) An ice skating rink (830 m2) 2 electronic casinos Carting and bowling Total average of daily visitors is approx. 50,000 AFI Cotroceni mall 27,500 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 0 TURNOVER FIGURES - COMPARISON JUNE 2017 January Febr March April May Jun Jul Aug Sep Oct Nov Dec Total ,716 14,370 15,346 16,311 15,885 15,829 15,804 16,259 17,051 18,065 18,687 25, , ,613 14,585 16,296 18,080 16,098 15,581 17,158 16,749 17,744 19,692 19,782 27, , ,984 17,259 18,015 19,961 18,169 18,477 18,955 18,073 18,751 20,888 20,249 28, , ,553 16,561 18,286 20,901 18,186 18, ,229 Thousands of euros Q1 Q2 Q3 Q4 Stores turnover in ,970 47,375 49,106 62,547 Stores turnover in ,494 49,759 51,651 67,402 Stores turnover in ,258 56,607 55,779 69,871 Stores turnover in ,400 57,

18 stock of apartments EUROPE Stock of apartments in Europe (apartments completed and not yet sold) Name of project Holding % Country City Number of apartments in the project The number of sold apartments until Apartments sold in Unsold apartments Book value as of NIS) )***()**( Lagera 100% Bulgaria Sofia ,076 Vitosha Tulip 100% Bulgaria Sofia ,829 Osiedle Europejskie phase 8b 100% Poland Krakow ,839 Osiedle Europejskie phase % Poland Krakow ,517 Central Garden Phase % Serbia Belgrade ,700 Tulipa Trebesin phase 1 100% Czech Republic Prague ,955 Total 1,171 1, ,916 (*) Starting and until the Company sold 16 additional apartments out of which 8 were in Europejskie project, 6 apartments in Vitosha project and 2 apartments in Lagera project. (**) The value reflects the company s percentage interest 18 (***) The book value includes an apartment sold and not yet delivered.

19 Residential projects under construction in Europe EUROPE Apartments under construction Name of project Location Holding % Book value NIS ) )*( Number of apartments in the project Expected costs for completion NIS ) )*( Completion date Total cost of project NIS ) )*( Total expected sales NIS ) )*( The number of apartments sold until Number of apartments sold from to Central Garden Phase 3 Central Garden Phase 4 Tulipa Trebesin Phase 2 AFI City Phase 1 Trebu Home Phase 2 Serbia, Belgrade Serbia, Belgrade Czech Republic, Prague Czech Republic, Prague Latvia, Riga 42% 24, ,969 Q ,406 45, % 11, ,680 Q ,599 22, % 100% 51, ,868 Q , , , ,448 Q , , % 6, ,666 Q ,281 33, Total , , , , (*) The value reflects the company s percentage interest 19

20 Projects under construction in Israel ISRAEL Name of project Designation Holding % Book value as of NIS ) Units / GLA (*) Expected costs to complete the project NIS) (*) Completion date )**( Park Weizmann (building no. 1 plot 2) Offices 60% 20,045 7,284 43,685 Q Sarona (***) Offices + retail 50% 301, ,000 (****) - Total , ,284 43,685 - (*) The value reflects the company s percentage interest (**) The information regarding project development completion dates is forward-looking, which might not occur and/or occur in a different way, and which is based the company s predictions in light of, inter alia, the development speed, contractual breaches, and regulatory requirements. (***) The partners are promoting the process of increasing the building rights on the site in accordance with the master plan TA / 5000 up to 166,000 m 2. During August 2016 the additional building rights were approved by the Local Deposit Committee of the District Committee. The construction works have begun. (****) After the building rights increase, the company expects its share in the remaining completion costs to be NIS million. 20

21 Projects under construction in Europe EUROPE Projects under construction Name of project Location Holding % Space for rent )*( (GLA) Book value as of NIS ) (*) Expected costs for completion (in NIS thousands) )*( Completion Date Total amount of expected rent in full capacity (in NIS thousands) )*( AFI Butterfly (Karlin) Czech Republic, Prague 100% 21, ,574 78,820 Q ,269 AFI Tech Park Romania, Bucharest 100% 21,924 50,591 86,877 Q ,057 AFI Palace Brasov AFI Vokovice AFI Krakow Romania, Brasov Czech Republic, Prague Poland, Krakow 100% 56,000 69, ,667 Q , % 13,985 55,747 94,645 Q , % 24,736 32, ,313 Q ,048 Total , , , ,411 (*) The value reflects the company s percentage interest 21

22 Land in Israel ISRAEL Name of project Designation Holding % Book value as of NIS ) )*( Building rights m 2 )GLA) (**) Kiryat Weizmann Additional building rights Kiryat Weizmann Additional building rights owned jointly with the Weizmann Institute Offices and high-tech Offices and high-tech 100% 26,800 about-37,000 60% 2,917 about-12,000 RGM logistics 100% 69,000 about- 100,000 Total ,717 About 149,000 (*) The value reflects the company s percentage interest (**) reflects 100% ownership. 22

23 Land in Europe EUROPE Country Land area (Thousands of square meters) )1( Book value as of NIS) )3( )2( Bank loans books to NIS) )2( Net value NIS) )2( Lands that the Company intends to develop in the short term NIS) (4) Names of projects classified to the short term Book value as of deducting the value of the lands the Company plans to develop or realize in the short term Bulgaria ,061-92,061 21,065 Lagera phase 2 70,996 Czech Republic , ,871 33,226 AFI City & Tulipa Trebesin 103,645 Hungary ,251 18,641 56, ,251 Latvia 94 55,952 26,626 29,326 5,506 Poland 21 66,312-66,312 66,312 Romania , , ,675 Trebu Home Phase 3 Europeski Phase 10, Zlota 83, Sapiezynska B-Noi phase 1, AFI Tech Park 50, ,813 Serbia (5) , ,808 94,832 ACB, Skyline 39,976 Total 2,084 1,010,743 45, , , ,127 (1) The land areas are stated at 100%. (2) The value reflects the company s percentage interest (3) After booking impairments of approx. EUR 131M during the years (4) The company intends to develop this land over a span of 3 years. (5) Excluding 15,000 m 2 in Central Garden in the amount of NIS 15 million, intended for an office building whose construction has not yet begun. 23

24 Legal Information This presentation was prepared by Africa Israel Properties Ltd. ) the company ( as a presentation about the company. This presentation is not intended to replace the necessity to read reports issued by the company to the public, including the Periodic Report for 2016 dated March 13, 2017, the report for the second quarter dated August 20, 2017 and the shelf prospectus of the company dated February 28, 2017 and shelf proposal reports that have been issued and/or will be issued by the company, before making a decision regarding an investment in the securities of the company. The information included in the presentation is not advice, recommendation, opinion or proposal as to the feasibility of an investment and is not a substitute for an independent examination and consultation based on the individual needs of each investor. The presentation comprises estimates, forecasts, plans and other information that relate to future events and matters, whose extent of realization is uncertain and is not solely under the control of the company, representing forward looking information, as defined in the Securities Law The principal facts and data that served as a basis of this information are facts and data referring to the current condition of the company and its business, facts and data related to the current status of the operating sectors in which the company presently operates in the areas of its operations and macro-economic facts and data, all as they are known to the company on the date of preparation of this presentation. In addition to the existing information of the company, the forward looking information included in this presentation is based, to a substantial extent, on current expectations and assessments of the company with regard to future developments in each of the above parameters, and on the integration of these developments into one another. The company has no assurance that its expectations and assessments will indeed be realized, inter alia, due to the realization or lack of realization of the aforementioned forward looking information, which might be influenced by factors that cannot be estimated in advance and are not solely under the control of the company. For the removal of doubt, it is clarified that the company is not obligated to update the information included in the presentation. This presentation should not be considered as a proposal or invitation to purchase securities. 24

25 Thank You