Wereldhave Belgium : Corporate presentation 30 June 2020
08/17/2020 | 05:28am EST
Corporate presentation 30 June 2020
1
Key investment highlights
p4
2
Portfolio overview
p7
3
Operational results HY 2020
p9
4
Financial results HY 2020
p18
5
Belgium retail real estate market
p25
6
Corporate strategy
p29
7
Development projects
p32
8
Appendix
p36
9
Q&A - Contact
p52
1 Key investment highlights
4
1 Key investment highlights
→ High quality real estate portfolio, consisting primarily of shopping centres and retail parks in Belgium and Luxembourg with a high and stable occupancy ratio (c.95%)
→ Solid balance sheet with conservative LTV (< 30%) and low cost of debt (< 1%)
→ Covid-19 resilient portfolio valuation, rental income and direct result
→ Identified growth potential via various development projects
(with strategic focus of developing additional services into retail assets)
5
2 Portfolio overview
7
2 Portfolio overview
High quality real estate portfolio, consisting primarily of shopping centres and retail parks in Belgium and Luxembourg with a high and stable occupancy ratio (c.95%)
Figures as of 30 June 2020
AntwerpenTurnhout
Brugge Gent
Shopping 1
Genk
Ring
Belle-île
Shopping
Liège
Kortrijk
Shopping
Bastions
Tournai Shopping
Nivelles
Diversification
Number of
Lettable area
Contract rent
Occupancy rate
of the portfolio
assets
(in sqm x 1,000)
at 30 June '20
at 30 June '20
(in % of valuation)
(in Mio €)
Retail
88.9%
12
220.7
49.5
96.0%
Offices
9.8%
2
60.5
7.7
87.0%
Development
1.3%
3
-
-
-
in commercial
projects
Total
100%
17
281.3
57.1
94.6%
(936 Mio €)
Waterloo Vilvoorde
8
3 Operational results HY 2020
9
3 Operational results HY 2020
Solid leasing activity despite Covid-19 and constructive tenant discussions
→ 40 leasing activities
Representing 5.7% of the rental income
15.8% above ERV and 8.6% above previous rent
→ Succesful openings of Action on 1,000 m² in Ring Shopping Kortrijk and of Courir in Shopping Bastions and Belle-Île
→ Covid-19 discussions
→ Q2 2020 rent collection ± 60%
10
3 Operational results HY 2020
Although visitor numbers suffered from Covid-19,
Wereldhave Belgium's assets outperformed the market in this regard
Number of visitors
(x 1,000)
2019
2020
500
400
300
200
100
0
Week
1
5
10
15
20
25
→ Number of visitors in January and
February: +14.65% (market figure +5.96%) compared to the same period last year
→ Number of visitors in June:
-13.6% (market figure -24%) compared to the same period last year
11
3 Operational results HY 2020
Constructive Covid-19 related tenant discussions
Tenants situation
Textile under pressure
Break options used: 5 contracts until now (all textile)
Some difficult negotiations for renewals (lower rents)
Several retailers under 'chapter 11' (±15 contracts)
Tenants
Covid-19 discussions
TO DO before YE 2020:
±475 contracts to negotiate with ±300 different tenants (±615 contracts under management with ±400 tenants)
DONE on 30/06:
±200 contracts negotiated with ±130 tenants
Receivables cancellation / rents reduction (lockdown & after lock- down)
Broader discussions (win/win)
Tenants expansion
Limited but several deals signed and several ongoing discussions
Central and local measures taken to ensure that people, entrepreneurs and partners feel safe and welcome to visit, work and do business in the centres
Create a safe & healthy space that minimizes the risk of an outbreak of Covid-19
Provide visitors with clear information before and during centre visits
Spread visits with crowd management tooling, strict centre guidelines, communication and signing
Wereldhave Belgium donated laptops to support a local triage- centre where doctors are referring Covid-19 patients to the hospital
14
3 Operational results HY 2020
Operational Wereldhave Belgium Centre measures
→ Campaign 'good to see you again'
→ Additional cleaning services
→ Additional safety guards
→ 1,5 meter communication, signing and services
→ Vending machines with facemasks
→ Hand disinfection totems
→ Busy overview 'pick your moment' (visitors)
→ Crowd monitoring (tenants)
→ Busy Alarm button (tenants)
→ 2,000 m² of free space granted to
Food & Beverage tenants
15
3 Operational results HY 2020
Development / Building & Maintenance / Divestment
→ Development CAPEX (€ 7 Mio) - Mainly Belle-Île renovation
→ Additional maintenance and tenant CAPEX (€ 3 Mio)
→ Disposal of student housing in Ghent (€ 7,8 Mio)
Capital gain of € 0,3 Mio against last fair value
16
4 Financial results HY 2020
18
4 Financial results HY 2020
Solid H1 2020 performance in light of Covid-19 impact
Balance Sheet
2018
2019
HY 2020
Real Estate Portfolio (Mio €)
956.7
961.3
936.5
EPRA Occupancy Ratio (in %)
96.2
95.2
94.6%
Net Asset Value (Mio €)
678.4
689.2
670.9
Financial Debts (Mio €)
286.0
273.0
260.8
NAV per Share (in €)
89.97
88.27
85.92
LTV (in %)
29.7
29.3
28.9%
Low portfolio value volatility following Covid-19 impact (-3.6%)
High occupancy ratio (c.96% in retail)
Solid balance sheet structure with conservative LTV (< 30%)
Profit and Loss Account
2018
HY 2019
2019
HY 2020
Gross Rental Income (in Mio€)
57.78
32.22
63.94
29.70
Direct Result (in Mio €)
40.73
23.44
45.62
16.99
Indirect Result (in Mio €)
-0.19
-2.33
-16.66
-35.35
Total Result (in Mio €)
40.54
21.11
28.96
-18.36
EPRA Earnings per Share
5.74
3.08
5.92
2.18
Dividend per Share
5.20
-
4.50*
TBD
*FROM 5.20 TO 4.50 DUE TO COVID-19 SITUATION /
SUBJECT TO APPROVAL OF AGM 2 SEPTEMBER
Resilient rental income / direct result despite Covid-19 impact
19
4 Financial results HY 2020
In the light of Covid-19, Wereldhave Belgium took various liquidity management measures
→ Liquidity Management in Covid-19 context:
Screening of costs and investments
Cash collection
Treasury management
Anticipation of April 2021 debt maturities (€ 130 Mio)
→ Restructuring of IRS instruments (€ 50 Mio)
20
4 Financial results HY 2020
Wereldhave Belgium has a solid balance sheet with conservative LTV and low cost of debt
Financing structure overview
(in Mio €)
2018
2019
HY 2020
Equity
678.4
689.2
670.9
Financial debt
286.0
273.0
260.8
Bank loans
110.0
180.0
230.0
Interco loans
141.0
0.0
0.0
DCM loans
35.0
93.0
30.8
Other debt
15.7
31.4
29.7
Total Equity & debt
980.1
993.6
961.4
LTV ratio
29.7%
29.3%
28.9%
Average cost of debt
1.09%
0.81%
0.83%
Hedge Ratio
38.5%
58.6%
61.3%
Debt maturity schedule
Debt duration
200
180
150
130
100
50
50
30
26
0
0
2020
2021
2022
2023
2024
>2024
Financing availabilities 30 June 2020: € 155.2 Mio
Average cost of debt: 0.83%
Debt duration: 2.3 years
21
4 Financial results HY 2020
Resilient portfolio values
Total Portfolio Value
(in mio €)
820
854
957
961
937
15
13
12
92
Development
35
67
95
92
projects
Offices
124
104
Retail
661
683
847
856
833
2016
2017
2018
2019
HY 2020
Portfolio Revaluations
(in mio €)
2,6%
1,5%
0%
-1,7%
-3,6%
2016
2017
2018
2019
HY 2020
EPRA net initial yield:
Retail: 5.9%
Offices: 8.3%
22
4 Financial results HY 2020
Wereldhave Belgium offers an attractive dividend yield
Dividend
Dividend yield*
Gross dividend
8.6%*
6.33%
5.35%
5.10
5.20
4.50
2017
2018
2019
FROM 5.20 TO 4.50 DUE TO COVID-19 SITUATION /
SUBJECT TO APPROVAL OF AGM 2 SEPTEMBER
*SHAREPRICE PER 17 JULY 2020
Actuals 2019
EPRA Earnings per share
€ 5.92
Dividend per share
€ 4.50
*
Pay-out ratio
81%
Distribution method (cash-optional) still to be confirmed
Forecast 2020
EPS 2020 indication of € 4.50 per share
* SUBJECT TO APPROVAL OF THE GENERAL ASSEMBLY
23
5 Belgium retail real estate market
25
5 Belgium retail real estate market
New retail formats are developing on the back of various trends in the retail real estate market
→ Increasing overlap between physical and online retail (accelerated by the Covid-19 crisis)
→ Population growth and tourism are major drivers
→ Growing importance of technology & data
→ Continued growth in lifestyle, well being, leisure and food & beverage sectors
→ Consumers' increasing need of experimental and convenience retail
26
5 Belgium retail real estate market
Challenges in the retail market are limiting leasing / occupation activity, decreasing rents and increasing yields
Leasing and owner-occupation activity
Number of deals
500
Shopping
75
64
400
Centre
300
Out of
225
204
200
town retail
23
75
100
Main
130
133
street
40
0
2018
2019
HY 2020
Prime rent evolution
Prime yields by segment
Average prime rent (in €/m2/Y)
In %
2,000
190
7
High
1,800
street
6
180
Out of town retail
5.25
1,600
1,700
5
Retail
170
Shopping centre
4.25
1,400
warehouse
4
165
160
High street
3.75
Shopping centre
1,200
3
1,150
1,000
2014
'15
'16
'17
'18
'19 HY 2020
150
2
2014
'15
'16
'17
'18
'19
HY 2020
SOURCE: CUSHMAN & WAKEFIELD
SOURCE: CUSHMAN & WAKEFIELD
SOURCE: CUSHMAN & WAKEFIELD
27
'Retailers still focus on AAA locations. Adaptability is key and rents are slightly under pressure in the high street and shopping centres.' Due to the Covid-19 crisis, retailers will probably have to reconsider their real-estate strategy.
28
6 Corporate strategy
29
6 Corporate strategy
Wereldhave Belgium is a specialised Shopping Centres and Retail Parks investor and operator, aiming to transform its assets into Full Service Centres.
→
Full Service Centres offer
a much
broader focus than retail
→ Full Service Centres help consumers fulfill everyday life needs
Work
space & offices
Residential & hotels
Health, relax
&
Groceries,
F
fresh & services
i
beauty
g
xi
n
n
g
i
e
t
b
h
-
e
l
W
e
l
Full-service
b
i
a
s
centres
c
s
(
for better
Transport
everyday
S
e
l
life
)
if
e
l
f
g
e
in
x
p
y
r
e
o
s
j
n
s
E
i
o
n
Horeca & leisure Fashion,
accessoires
& home
Nearby
30
6 Corporate strategy
We are well-positioned to transform our assets into Full Service Centres
1
2
3
4
Favorable
Attractive
Scale
Total return
locations
rents
and skill
strategy
Densely populated
Current rent levels
Size of portfolio
Capital allocation
and well-connected
enable conversion
and local market
based on total
locations
to new uses
knowledge in
return
Belux make
transformation
achievable
31
7 Development projects
32
7 Development projects Commited: Belle-Île - Liège
Identified growth potential
via various development projects
Additional
New extension
car park
capacity
Opened in
1995
New shops
+30
Renovation /
Extension
2019-
2022
Mixed-
Use
Shops
99
GLA+200 30,000m2
Additional GLA
+11,000 m2
Investment
60 MIO €
33
7 Development projects Uncommited
Waterloo
Mixed-use development project, located in the city centre having underground parking boutique- style retail and F&B, residential program and public space.
Ring Shopping Kortrijk
Renovation of outdoor facades and entrances including topping up to improve visibility and signing of anchor tenants. Upgrade of outdoor parking area and outdoor rest areas.
Brugge retail park
Refurbishing single tenant building to multi-tenant concept with small kiosks for services. Renovation of façade and circulation to roof parking including new parking deck. Development of mixed-use cluster with retail on ground floor and topping up with residential program.
34
8 Appendix
36
8 Appendix General
→ Company founded in 1972 and listed on
Euronext Brussels since 1998
→ Focused on investment in Retail Real Estate (Shopping Centres and Retail Parks) in Belgium and Luxembourg
→ Holds a total real estate portfolio of 936.5 Mio € as of 30 June 2020
→ Status of a Belgian REIT since 1998
37
8 Appendix
Belgian REIT (GVV / SIR status)
→ Company specialized in Real Estate investment
→ Favourable tax status
→ Main conditions:
Portfolio diversification:
20% per single asset/tenant Loan-to-Value: < 65% Pay-out: > 80% of net proceeds
38
8 Appendix Shareholding
Market capitalisation
±410 Mio €*
Free
Wereldhave
Float
Group (NL)
33.5%
66.5%
*MARKET CAPITALISATION ON 17 JULY 2020
39
8 Appendix
Structure of the company
Shopping 1 Genk
Development
Ring Shopping Kortrijk
Legal
Finance
Shopping Nivelles
CEO
Shopping Bastions Tournai
Leasing/Investment
HR
Belle-Île Liège
Operations/Building & Maintenance
Retail Parks, Offices & other
40
8 Appendix
Solid balance sheet structure
Assets
(in mio €)
Liabilities
(in mio €)
Other assets
Development projects
Properties available for lease
980
994
32
23
32
15
13
942949
961
25
12
924
980
994
961
Other
16
32
30
liabilities
Financial
286
273
261
debts
Equity
678
689
671
2018
2019
HY 2020
2018
2019
HY 2020
41
8 Appendix
Total result characterized by resilient direct result and fluctuating revaluation
(in k€)
2018
HY 2019
2019
HY 2020
Gross rental income
57,779
32,222
63,936
29,700
Service costs charged
11,576
4,806
7,880
4,928
Service costs paid
-13,566
-6,057
-10,407
-5,881
Net Service costs
-1,990
-1,251
-2,528
-953
Property expenses
-7,627
-3,705
-8,397
-7,822
Net rental income
48,162
27,266
53,011
20,926
General costs
-4,102
-2,303
-4,854
-2,582
Operational result
44,060
24,963
48,157
18,343
Net interest
-3,025
-1,428
-2,606
-1,288
Tax on direct result
-305
-95
67
-66
Direct result
40,730
23,440
45,617
16,989
EPS per share
5.74
3.08
5.92
2.18
Valuation result
-478
-2,005
-16,535
-34,794
Result on disposal
-35
13
6
342
Other indirect
-652
-713
-899
Tax on indirect result
323
310
582
0
Indirect result
-191
-2,333
-16,660
-35,350
Total result
40,540
21,107
28,957
-18,361
Total result per share
5.71
2.77
3.76
-2.35
42
8 Appendix
Main portfolio events
Operations
+5%
traffic over all the assets in 2019 (cfr. -0.88% Belgian Market Index) results in + 1.1% sales
"Outperforming the market is only possible with a balanced and relevant commercial mix and an active management."
- INE BEETERENS, HEAD OF OPERATIONS
100%
Breeam in Use certifed
buildings (excl. development projects)
"Breeam is more than a checklist,
it's providing well thought assets to our tenants in order to minimize their costs."
FRANK VAN CAUWENBERGE, BUILDING & MAINTENANCE DIRECTOR
43
- EMILIE THOMAS, SHOPPING MANAGER"
8 Appendix
Main portfolio events
Operations
1,634 users
active on flow with 80% involvement
"When we actively want to manage our buildings, we need to be at all times communicating with our tenants and stimulating the shopping community. Flow enables us to stay ahead of things."
→ Customer Journey Implementation -
Accelerating through concept design and central management
44
8 Appendix
Corporate social responsibility
Better tomorrow
Enriching communities & protecting the environment where we operate
Wereldhave Belgium SCA published this content on 16 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2020 09:27:18 UTC
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