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1
BCP SecuritiesFixed Income Conference
Buenos AiresOctober 24, 2019
Leading commercial real
estate company in Argentina
Best-in-Class Operator
Shopping Malls
95% occupancy
74% EBITDA Mg
High brand recognition & customer loyalty
Valuable customers information & technology
innovation
110 mnAnnual Mall visitors
2.5xArgentina’s population
15 Shopping Malls
332k sqm GLA
67% Market Share BA City
8 Office Buildings
115k sqm GLA
11% Market Share A+ BA
City
Unique Portfolio of Prime Commercial Real Estate
Offices
88% occupancy
82% EBITDA Mg
BEST
Real Estate
Company
Top of mindShopping Malls 2
82.3%
Rental properties’ resilient revenue model
Parking
Non Traditional Advertising
StandsBase rent
51,9%
Percentage rent
20,9%
Admission rights12,3%
Other14,9%
• 3-year average term for office
lease contracts
• US Dollar based
• Rental rates for renewed
terms are negotiated at
market
Base Rent
% Sales
% Sales
% Sales
Year 1 Year 2 Year 3
ARS linked to
inflation
Brokerage fee~5x monthly base rent
“Key money”
admission rights~8x monthly base rent
In advance
US$ US$ US$
Year 1 Year 2 Year 3
Shopping Malls
OfficesRevenue from leases
Revenue from leases Other revenues Rent revenue breakdown
International75%
Local25%
Tenants breakdown
3
21,2%18,3% 19,5%
18,3%
22,3% 22,7%
27,3%28,7%
24,4% 24,7%
29,6%
35,1%
-14,5% -14,1%
-2,9% -2,1%
2,8%-0,1%
1,6% 1,2%
-8,1%
-15,5%-14,7%
-13,5%
IQ 17 IIQ 17 IIIQ 17 IVQ 17 IQ 18 IIQ 18 IIIQ 18 IVQ 18 IQ 19 IIQ 19 IIIQ 19 IVQ 19
Nominal terms Real terms
341,289 344,025332,150
99% 99%
95%
FY17 FY18 FY19
Same Shopping Malls’ Sales
(% Var i.a.)
Shopping Malls Operating Figures
4
Shopping Malls – Sqm GLA (Th.) & Occupancy (%)
Mainly due to 12,600 sqm vacancy generated by Walmart in DOT Baires
Shopping
end of concession
Excluding this effect, IVQ 19 occupancy would have been
98.5%
Excluding
IVQ19Nominal Terms: 36.6%
Real Terms: -12.5%Movie
theatres
-5%
43%
15%
40%
21%
43%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
-18%
36%
11%
17%
34%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Inflation + GDP(%)
Shopping Malls historical figures evolution
Source: Indec
Occupancy (%)
5
Tenants sales growth(ARS/sqm)*
* Excluding DOT Baires
Shopping Malls historical sales in USD(as of June 30)
2.515
6.333
2.500
4.961
4.150
8.148
7.465 7.469
6.998
6.429
4.345
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Tenants sales(USD/sqm)
10% AR$ depreciation
0.1% real GDP growth
31% AR$ depreciation
0.5% real GDP growth 60% AR$
depreciation(2.3%) real GDP
contraction
~100% AR$ depreciation
241% AR$ depreciation
(10.9%) real GDP contraction
84,110 83,213
115,378 115,378
30,000
145,378
FY17 FY18 FY19 FY20E
7
Offices - Stock (sqm GLA)
- 1.1%
+26.0%
Zetta Building
200 Della Paolera
1 floor Intercontinental
+38.7%
6.8%Mkt share
A+
6.4%Mkt share
A+
10.4%Mkt share
A+
15.1%Mkt share*
A+
AAA & A83%
B17% Suipacha 664 (B)
Philips Building (B)
Zetta Building (AAA)
Dot Building (A)República(AAA)
Intercontinental(A) – 3 floors remaining
Boston Tower(AAA)
Bouchard 710(AAA)
Office BuildingsOperating Figures
OFFICE
Offices – Current portfolio by class
* According to A+ stock projected for FY20 by L.J.Ramos
98,5% 100,0% 98,5%96,2% 97,2%
96,7% 90,7%
51,5%
79,6%
45,0%
June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 June 30, 2019
94%
93% 92% 89%
88%
6%
7%8%
11%
12%
27.870
23.049 23.846 23.507
27.210
FY 15 FY 16 FY 17 FY 18 FY 19
A+ & A
Office BuildingsOperating Figures
8
OFFICE
Revenues by Class (USD Th.)
B
Occupancy by Class
USD/sqm/mth
17.1
27.3
26.4
B
A+ & A
ZETTA BUILDING
OPENING32,000
GLA sqm
May 2019 Opening date
USD 60mmInvestment
USD 9mmEst. EBITDA
15%Cap Rate
80%
20%
9
ZETTA BUILDING - INTERIOR
11
Dot Baires Shopping
Zetta Building
Giga Building(planning status)
Exa Building(planning status)
Philips Building(future recycling)
Dot Building
Dot Connection(planning status)
Coca Cola Building
Panamerican Plaza
Intecons Building
200
DELLA PAOLERAUnder development
35,000 GLA sqm
87%IRCP stake
68%Works Progress
IVQ FY20 Est. Opening date
USD 90mmEst. Investment
USD 10-12mmEst. Estabilized EBITDA
12%Cap Rate
12
2.450
710
4.500 5.000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: L.J. Ramos – Colliers
Active portfolio management
Yacht V & VI
Bouchard 710
República
Boston Tower
Bouchard Plaza
Rulero
Rulero
Maipú
Intercontinental
Maipú
Intercontinental
A+ Offices pricesUSD/sqm
Dique IV
Avg IRR: ~ 10-20%
Flight to quality
Zetta BuildingRecently opened
CatalinasCurrently under development
Bouchard Plaza
Real Estate Acquisitions & Sales Track Record
Capital control period
14Source: Reporte inmobiliario
3.050
3.420 3.405
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Residential prices(USD/sqm – Recoleta)
Mortgages/GDP
Protective way of saving
Real Estate prices’ increase despite no mortgages
62
70
56
64
75 77
67 68
5456
61 61
72 7173
69
52
6264
47
3634
37
45
64
56
30
7 10
12
8
5 4 4 6
16
13
3
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E
Deeds Mortgages
City of Buenos Aires – Residential market statistics
1993 – 2019: Number of signed deeds 2009 – 2019: Number of mortgages granted(thousands)
Nov-11 to Dec-15Capital controls period
Mar-16Launch of UVA mortgage loans
May-18Devaluation
Aug/Sep-19Devaluation &
Capital controls
Source: Colegio de Escribanos de la Ciudad de Buenos Aires
2001 -2002Crisis
29.9%82.3%
VP 18.9% Dolphin 49.0%
HOTELS
SANTA MARÍA & OTHER
LANDBANK INTERNATIONAL
SHOPPINGMALLS
OFFICEBUILDINGS
COMMERCIAL LANDBANK
100.0% 82.3%
62.4%
IRSA: Leading Real Estate Company in Argentina
16
▪ Leading real estate company in Argentina with opportunistic
assets abroad.
▪ Majority shareholder of IRSA Propiedades Comerciales,
leading commercial real estate company in Argentina with
~447,000 sqm of GLA located in premium locations.
LibertadorBA city
IntercontinentalBA city
Llao Llao ResortBariloche city
Argentina Business Center - Hotels
152 191 197
67,3% 70,1% 65,2%
IVQ17 IVQ18 IVQ19
Rate USD/room & Occupancy evolution
71
588
FY18 FY19
EBITDA (ARS MM)
+ 728%
On Feb-19, IRSA acquired 20% of the shares of HotelesArgentinos S.A., owner of the
hotel formerly known as Sheraton Liberatdor
Current stake: 100%17
US Investments
Leases (USD MM) & Occupancy NOI (USD MM)
Lipstick Building US Hospitality REIT (NYSE: CDOR)
Under sale processMain events FY19:
• Debt refinance from USD 53 to USD 11 MM maturing in April 2021.
• In June 2019, a deposit “escrow” agreement was signed for USD 5.1mm to get an option to acquire a controlling position on a fraction of the land where Lipstick is built. The option expired on August 30th and the owner is entitled to collect the deposit.
• The company will continue negotiations trying to obtain funding sources that allow us to execute the purchase.
Main future challenges:
• Keep working on its capital structure• Main tenant replacement in FY 2021.
69 78 77
95% 97% 97%
FY17 FY18 FY19
26 27 27.4
FY17 FY18 FY19
On July 2019, Condor signed an agreement and merge plan with a non-related company.
IRSA will collect its position in common and preferred shares according the following conditions:
• Ordinary share price: USD 11.10
• Preferred E convertible share price: USD 10.00
The transaction is expected to be concluded between October and December 2019.
IRSA will collect approximately USD 29 million.
8,11
10,97
1/3/2019 1/4/2019 1/5/2019 1/6/2019 1/7/2019 1/8/2019
CONDOR price evolution
Agreement date
ImmediateMarket reaction
+35%
18
IRR (USD):7.2%
Israel Business CenterCurrent Corporate Structure
100% 82.3%
Indirectly*
68.8%100% 15.3%**20.2% 47.0% 68.8% 61.1% 26.0%
45.4% 35.0%
* There is a nonrecourse intercompany loan between Dolphin (borrower) and IDB (lender) due to the transference of DIC shares. This loan is guaranteed with DIC shares sold.** Direct stake.
Energy Tourism InsuranceFinancial
InvestmentsTelecommunications
Agriculture Rental Properties
Real Estate Technology Supermarket
Requirement: reduce one more layer of public companies before
December 2019
To be defined before
December 2019
19
Concentration Law Resolution:
▪ Disposal of 16.7% of Gav-Yam sharesAccounting deconsolidation and loss of control
▪ Privatize ISPRO public debt
100%
Senior Management:
▪ New CEO appointed
+ 20% through swap transactions.
PBC (67.5% DIC stake) & Gav Yam (35% PBC stake)
Leading Real Estate companies in Israel
Office & hi-tech parkCommercial & RetailIndustrial & LogisticsProperties under constructionResidentialLand reserves
HSBC Building - Manhattan
Matam Park - Haifa
Herzeliva North
Tivoli - Las Vegas
1,160,000 sqmin Israel
97%occupancy
670,000 sqmLand reserve
142,000 sqmin USA
Market CapUSD 523 MM
USD 1,010MM 20
Real Estate projects under development in Israel
The New Haifa Bay – Logistic CenterOpening during 2H FY 2019
TOHA: 95% already leased. Opening during 2H FY 2019
NEGEV: 3 of 4 buildings finished
MATAM-YAM: Recently finished Amazon main tenant
8 Projects
194,000 sqm
REHOVOT: 3 of 4 buildings finished
21
22
20,0%
34,8%
45,2%25,0%
29,8%
45,2%54,8%
45,2%
Original stake
Jun-18
4 sales of 5% each through swap
transactions during FY 18
1 additional sale of 5% through swap
transaction
Aug-18
24,0%
20,3%55,7%
In May, 2 private investors bought ~10%,
and one of them received an option to
buy another 3%
Additional option given to a 3rd investor to buy
3-5%.
Jun-19
Economic rights 54.8% 54.8% 54.8% 44.3%
20,0%
15,3%64,7%
On September 2nd and 3rd, 3% of swaps were sold and IDB announced a 6% additional sale of Clal shares in exchange of its own bonds:
• 5% at a price of NIS 52.5 per share - total consideration of NIS 145 MM, in exchange of Series 9 & 14 own bonds.
• 1% additional sale in swaps.
This transaction is equivalent to sell at ~90% BV.
Sep-19
35.3%
Clal sale process
IDB Through swaps IDB Directly Float
Mar-19: Control permit requested
Aug-19: Control permit requested
pulled back
1290 1312
923781 749 711
613
dec-2012 dec-2013 dec-2014 dec-2015 dec-2016 dec-2017 dec-2018
Israel Financial Figures(USD MM)
Stand alone
Stand alone
Net Debt evolution(as of December 2018)
23
13211466
951 954
740
966
632
dec-2012 dec-2013 dec-2014 dec-2015 dec-2016 dec-2017 dec-2018
135
58 58
339
58 58 58
dec-2019 dec-2020 dec-2021 dec-2022 dec-2023 dec-2024 dec-2025
USD 154 mmCash & Equivalents
USD 415 mm Cash & Equivalents
79 79
176 176 176 176 176
97
dec-2019 dec-2020 dec-2021 dec-2022 dec-2023 dec-2024 dec-2025 dec-2026
Net Debt evolution(as of December 2018)
Debt Amortization Schedule(as of June 2019)
Debt Amortization Schedule(as of June 2019)
Recent events:
▪ Due to IDB financial situation, IRSA invested NIS 70 mmin IDB through Dolphin and committed to invest an additional NIS 140 mm (half in 2020 and half in 2021) subject to certain conditions.
179 169 163
111
15 47
64
122
68 49 49 33
96 74
51
-44
2016 2017 2018 2019
Rental EBITDA CAPEX Interests paid + Income tax FCF
Financial Figures(USD MM)1
Dividends paid by IRCP
24
1 Figures not adjusted for inflation.
Development (Zetta, Catalinas & Alto …
Catalinas acquisition; 45
Maltería Hudson acquisition; 7
Financial FiguresAs of June 30, 2019
19% LTVNet Asset Value (USD mm)
Debt USD 542 mm
Net Debt USD 306 mm
Net Debt / EBITDA 2.8x
Adjusted EBITDA FY19 USD 111 mm
NOI FY19 USD 136 mm
Adjusted FFO FY19 USD 70 mm
25
USD 236 mm Cash
Debt Amortization Schedule
1.480 1.202
783
457
154 31 55278
Shopping Malls Offices Land reserves &prop. under
development
Others JV & Investess Gross AssetValue
Net Debt Net AssetValue
14.3
149.3
10.8
368.1
FY 2020 FY 2021 FY 2022 FY 2023
Notes
(1) Assets and liabilities adjusted by IRCP ownership
(2) Includes floors of the Intercontinental building used by IRCP, registered under PP&E, and trading properties and barters registered under intangible
assets. These 3 items are recorded at historical cost in the financial statements
(3) Includes Quality and Nuevo Puerto Santa Fe as JV and La Rural, La Arena, Convention Center, TGLT & Avenida as Investees.
1,275
941
788
33181
273 334
IRCP Book Value Hotels Banco Hipotecario Landbank & Others Gross Asset Value Net Debt Net Asset Value
154.8179.5
8.8
FY 2020 FY 2021 FY 2022
130.2Recently
issued
IRSA Stand Alone Financial Figures
Net Asset Value (USD mm)As of June 30, 2019
USD 333.9 mmStand Alone Net Debt
Debt Amortization ScheduleAs of June 30, 2019
411 428 448
364
258
328 335 334
2012 2013 2014 2015 2016 2017 2018 2019
Net Debt evolution
26
1. Market value as of June 30, 2019
2. Book value as of June 30, 2019. Others includes the investment in Condor Hospitality Trust and Israel at market value
1 2
26% LTV
Financial events:
▪ Credit line with IRCP for up to USD 180 mm, for up to 3 years, at an interest rate equal to IRSA 2020 or future issuances.
▪ In May 2019, we issued a local Bond for USD 96.3 mm at a fixed annual interest rate of 10.0% due November 2020 to refinance short-term debt
▪ Subsequently, in August 2019, we issued a second tranche of the Class 1 issued in May for USD 85,2 mm at an 8.75% yield, and a new class in Chilean Pesos for an equivalent of USD 45 mm at an interest rate of 10.5%, both maturing in August 2020.
309.7
27
“Payment Currency: U.S. Dollars”
“Payments of principal, interest, additional amounts or other amounts due under Series VIII
Notes will be made through Caja de Valores S.A. as depositary of the Global Certificate, by
transferring the relevant amounts for credit in the respective accounts held by the holders of
Series VIII Notes with collection right as of the close of business on the Business Day
immediately preceding the relevant payment date.”
❖ Argentina Law.
❖ On September 9, 2019, IRSA paid in time and appropriate manner, U.S. dollars 135 million to Caja de Valores (USD 132.6 million of Principal + USD 2.3 million of Interest).
❖ Once Caja de Valores received the entire payment, they distributed the funds to all the bondholders.
❖ Non-residents received the funds in U.S. dollars in Euroclear/Clearstream accounts in Caja de Valores.
❖ According to Regulation “A” 6770 of the Central Bank, U.S. dollars received locally by non-residentscan not be transferred abroad through direct transfer mechanisms (“Canje”) without Central Bank authorization.
❖ The funds are available in Argentina for withdrawal or transfer to local accounts.
Payment of IRSA´s Series VIII
28
Notes by Governing Law
Argentine Law IRCP IV Sep 20 - 5.00% IRSA I Nov 20 - 10.00%IRSA II (CLP) Aug 20 - 10.50%
Outstanding USD 140 MM USD 226.5 MM
NY Law IRCP II Mar 23 - 8.75% IRSA II Jul 20 - 11.50%Outstanding USD 360 MM USD 71.4 MM
29
BCP SecuritiesFixed Income Conference
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