Conference call invitation: Megapark Bilbao acquisition€¦ · Lar Lar España Real Estate SOCIMI,...

Lar España Real Estate SOCIMI, S.A. (LRE)

Conference call invitation: Megapark Bilbao acquisition

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19 October, 2015 – 17:00 CEST

Direct DDI (s) to Participant Connection:

Spain: +34 917900875

UK: +44(0) 2030092454

USA: +1 8554027761

Participants outside Spain, UK or USA, please call to the Spanish number


www.larespana.com

Megapark Bilbao

October 19, 2015

Lar España Real Estate SOCIMI, S.A. (LRE) Lar España Real Estate SOCIMI, S.A. (LRE) - Date Lar España Real Estate SOCIMI, S.A. (LRE)

Disclaimer

DISCLAIMER. RISKS AND FORWARD-LOOKING STATEMENTS

This document has been prepared by Lar España Real Estate SOCIMI, S.A. (the “Company”) for information purposes only and it is not regulated information or information which has been subject to prior registration

or control by the Spanish Securities Market Commission. This document neither is a prospectus nor implies a bid or recommendation for investment. This document includes summarised audited and non-audited

information. The financial and operational information, as well as the data on the acquisitions which have been carried out, included in the presentation, correspond to the internal recordings and accounting of the

Company. Such information may be subject to audit, limited review or any other control by an auditor or an independent third party. Therefore, this information may be modified or amended in the future.

The information contained herein has been obtained from sources that the Company considers reliable, but the Company does not represent or warrant that the information is complete or accurate, in particular with

respect to data provided by third parties. Neither the Company nor its legal advisors and representatives assure the completeness, impartiality or accuracy of the information or opinions included herein. In addition,

they do not assume responsibilities of any kind, whether for misconduct or negligence, with regard to damages or loss that may derive from the use of this document or its contents. The internal analysis has not been

subject to independent verification. This document may include forward-looking representations or statements on purposes, expectations or forecasts of the Company or its management up to the date of release of

this document. Said forward-looking representations and statements or forecasts are mere value judgments of the Company and do not imply undertakings of future performance. Additionally, they are subject to risks,

uncertainties and other factors, which were unknown or not taken into account by the time this document was produced and released and which may cause such actual results, performance or achievements, to be

materially different from those expressed or implied by these forward-looking statements.

Under no circumstances does the Company undertake to update or release the review of the information included herein or provide additional information. Neither the Company nor any of its legal advisors or

representatives assume any kind of responsibility for any possible deviations that the forward-looking estimates, forecasts or projections used herein may undergo.

This document discloses neither all risks nor other material issues regarding the investment on the shares of the Company. The information included in this presentation is subject to, and should be understood

together with, all publicly available information. Any person acquiring shares of the Company shall do so on their own risk and judgment over the merits and suitability of the shares of the Company, after having

received professional advisory or of any other kind that may be needed or appropriate but not only on the grounds of this presentation. By delivering this presentation, the Company is not providing any advisory,

purchase or sale recommendation, or any other instrument of negotiation over the shares or any other securities or financial instrument of the Company. This document does not constitute an offer, bid or invitation to

acquire or subscribe shares, in accordance with the provisions of article 30.bis of Law 24/1998, of July 28th, on the Securities Market, and/or the Royal Decree 1310/2005, of November 4th and their implementing

regulations. Furthermore, this document does not imply any purchase or sale bid or offer for the exchange of securities or a request for the vote or authorization in any other jurisdiction. The delivery of this document

within other jurisdictions may be forbidden.

Consequently, recipients of this document or those persons receiving a copy thereof shall become responsible for being aware of, and comply with, such restrictions.

By accepting this document you are accepting the foregoing restrictions and warnings.

All the foregoing shall be taken into account with regard to those persons or entities which have to take decisions or issue opinions relating to the securities issued by the Company. All such persons or entities are

invited to consult all public documents and information of the Company registered within the Spanish Securities Market Commission.

Neither the Company nor any of its advisors or representatives assumes any kind of responsibility for any damages or losses derived from any use of this document or its contents.

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Megapark Bilbao

Lar España Real Estate SOCIMI, S.A. (LRE) Lar España Real Estate SOCIMI, S.A. (LRE) - Date Lar España Real Estate SOCIMI, S.A. (LRE) 4

Unique asset by location, size and tenant line up, located in one of the wealthiest regions in Europe

The largest retail area in the Basque country, with one of the strongest catchment areas in Europe

Game-changing, Off Market Deal, representing over 20% of Lar España’s Current Net Rental Income

The acquisition of Megapark Bilbao for €170m makes Lar España’s

portfolio one of the most attractive real estate platforms in Spain

Megapark Bilbao

Megapark Bilbao is a Retail complex comprised of a Retail Park, Factory Outlet Center and Leisure Area, with a total area of 128,000

sqm. On October 16 Lar España completed the deal signed on July 15, acquiring 64,000 sqm of Megapark Bilbao consisting of 14 retail

warehouse units in the Retail Park and the whole Factory Outlet Centre.

Deal Description


Megapark Bilbao is a unique asset by market segment, size,

location and its excellent tenant line-up

Prime retail complexes are an evermore sought-after channel for top retailers

5

17%

40%

21%

11% 11%

<9,999sqm 10,000-19,999sqm 20,000-29,999sqm 30,000-40,000sqm +50,000sqm

Distribution of Retail Parks in Spain by size

Prime retail complex in a unique location

Megapark has a unique tenant line up Megapark is unique due to its size: 64.000 sqm owned by Lar

• The largest retail area in the Basque Country: more than 128,000 sqm

and one of Europe’s strongest catchment areas.

• Prime Retail Parks benefit from 100% occupancy: €15-€16 rent/sqm/

month.

• Rental performance over the property cycle is more stable than other

asset classes.

• While only 11% of GLA in Spain is located in retail parks, it accounts

for c.30%1 of new supply coming on to the market over the next few

years.

1Savills: January 2015

• The Basque Country has the 2nd highest GDP per capita in Spain.

• Retail density well below Spanish average (40%).

• The Factory Outlet Centre is the only fashion outlet in the north of

Spain, the closest is located 400 km away in Bordeaux (France).

• It comprises a Retail Park, a Factory Outlet Center and a leisure area,

anchored by top retailers.

Megapark Bilbao


Acquisition of 14 retail warehouse units with top end retailers -

Anchored by Ikea and Leroy Merlin

Excellent International tenant line up and balanced retail mix

• The retail park features all of the main fashion, home and

entertainment brands. It is also anchored by IKEA, -closest

IKEA store 300 km away in Oviedo- and Leroy Merlin, both of

which own their stores.

• The 14 retail warehouses comprise 44,512 sqm (GLA).

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Retail Park

Fashion/Clothes 29%

Home Equipment

32%

Services 5%

Leisure & Sport 34%

Retail Park Activity by GLA

• The rents paid by our tenants (€16.9 per sqm/month) are

above the national average, but appropriate for its

uniqueness: quality retail complex with no competitors.

100% occupied and prime rents above national average

Factory Outlet Center 21%

Retail Park 79%

Passing Rent Distribution

Megapark Bilbao


Megapark Retail Complex – Retail Park Area - Bilbao

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Megapark Bilbao


The Factory Outlet Centre acquired is the only fashion outlet in the

north of Spain

Unique Factory Outlet Center destination and balanced retail mix

• The Factory Outlet Centre is the only fashion outlet in the north of

Spain. The closest is located 400 km away in Bordeaux (France). It is

anchored by top-tier tenants: Mercadona, Nike, Desigual and Mango

• Lar España acquired 19,210 sqm (GLA).

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Factory Outlet Center

Fashion/Clothes 36%

Home Equipment

5%

Services 1%

Food/Supermarket 28%

Cafe/Restaurant 1%

Leisure and Sport 4%

Vacant 25%

Factory Outlet Center Activity by GLA

• Current occupancy stands at 75% and the €12 per sqm/month rent

provides room for the asset to be improved: Good sales level and

healthy effort ratio.

• First Mercadona to open in the province of Vizcaya will create novelty

effect and will help to drive the new letting strategy.

Opportunity to create value by improving occupancy and asset performance

Factory Outlet Center 21%

Retail Park 79%


Megapark Bilbao


Megapark Retail Complex - Factory Outlet Center Area -

Bilbao

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Megapark Bilbao


Game-Changing Off Market Deal, representing over 20% of Lar

España’s Current Net Rental Income

• Purchased @ 6.25% of Net Yield on Cost,

• Underpinning the high recurrent cash-flow generation of the real estate

portfolio.

• Game-changing deal as it represents 20% of all of Lar España’s

investments to date and generates more than €10m in Net Operating

Rents per year.

Prime Regional Retail Park acquired @ above market prime yields

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Retail Ex-Megapark

58% Megapark

21%

Offices 12%

Logistics 9%


Megapark Bilbao


Retail 69% Offices

17%

Logistics 7%

Residential 7%

Asset Distribution by Investment

Lar España consolidates a diversified and stable rent generating portfolio

Madrid 22%

Basque Country

20%

Castilla León 12%

Catalonia 12%

Castilla la Mancha

11%

Galicia 8%

Valencia 9%

Other 6%

Balanced Geographical Distribution

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75%

25%

Mostly Off-Market Acquisitions

Off-Market Market

All figures stated as at the acquisition date

1 7.2% is the Gross Initial Yield of rent generating assets. Thus the €60m investment in a residential development is not included in its calculation. 2 6.6% is the NIY on cost of rent generating assets. Thus the €60m investment in a residential development is not included in its calculation. 3 Not included in the Marcelo Spínola calculation –currently under refurbishment.

Portfolio overview as at October 16

Asset Class Units Price Gross Lettable Area W.A.U.L.T as

at June 2015 Avg. Rent/sqm

Avg. Initial

Occupancy

Weighted Avg.

EPRA Net

Initial Yield

Annual Net Rent

Generation

Retail4 12 €588.7m 320,049 sqm 2.6 €13.82 92.5% 6.57% c.€38m

Offices 5 €140.5m 50,342 sqm 2.0 €13.7 95.6% 5.6% c.€8m

Logistics 5 €63.4m 161,840 sqm 2.7 €3.4 100% 9.6% c.€6m

Residential 1 €60m 23,932 sqm n/a n/a n/a n/a n/a

Total 23 €852.6m 556,163 sqm 2.52(3) €13.0 94.9% 6.6%(2) c.€52m(4)

4 Future rental contribution of Sagunto Retail development has not been included

Megapark Bilbao


Breakdown of properties by Location, €m

Porfolio Overview Location by property class

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0 50 100 150 200

Other

Galicia

Comunidad Valenciana

León

Castillla la Mancha

Catalonia

Basque Country

Madrid SC

RetailWarehouseRetail Complex

Offices

Logistics

Shopping Centre Office

Logistics

Retail Warehouses

8 Nuevo Alisal (Santander)

9 Villaverde (Madrid)

10 Galaria (Pamplona)

1 L’Anec Blau (Barcelona)

2 Portal de la Marina (Alicante)

3 Albacenter (Albacete)

4 Txingudi (Guipúzcoa)

5 Las Huertas (Palencia)

6 As Termas (Lugo)

7 El Rosal (León)

18 Alovera I (Guadalajara)

19 Alovera II (Guadalajara)

20 Alovera III(Guadalajara)

21 Alovera IV (Guadalajara)

22 Almussafes (Valencia)

13 Egeo (Madrid)

14 Arturo Soria (Madrid)

15 Cardenal Marcelo Spinola

(Madrid)

16 Eloy Gonzalo (Madrid)

17 Joan Miró (Barcelona)

Residential

23 Juan Bravo / Claudio Coello

1

4

9

5

14

15 16

18

8

13

2

3

23

6

21

Lar España’s investments are mainly located in Madrid, Bilbao, Barcelona and wealthy areas of other select cities

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20 19

22

Note: Size as per investment amount

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11

12 11 Megapark (Bilbao)

12 Cruce de Caminos (Sagunto)

Retail Complex

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Megapark Bilbao


• Excellent location in Barakaldo, considered part of the

metropolitan area of Bilbao, in the north of Spain.

• Catchment area: is the most consolidated retail area in the

Basque Country with 1 million people living within 15 minutes

drive and more than 3 million within 90 minutes drive.

• Solid and top-tier tenants: Media Markt, Decathlon,

Oportunidades El Corte Inglés, Mercadona, Nike…

• Barakaldo, with more than 100,000 inhabitants, is one of the

largest cities in the Basque Country. It benefits from very

good road transport links, thanks to its location next to the A-8

Bilbao-Santander motorway.

Asset Characteristics

Asset Name: Megapark

Asset Type: Retail complex

Opening Date: 2004

Location: Bilbao

GLA:

63,722 sqm

RP1: 44,512 sqm

FOC2: 19,210 sqm

Acquisition price: EUR 170 m

Price per sqm: €2,340 per sqm

No. Tenants: 14RP + 61FOC units

Appendix

Retail complex

• Megapark is the largest retail scheme in the Basque

Country. It has one of the strongest catchment areas in

Europe with 18 million visitors per year. It has good growth

potential and limited competition.

• Our tenants benefit from being in a wealthy European

region that outperforms the national economy. The Basque

Country has the 2nd highest GDP per capita in Spain

(€29,683).

• The Retail complex benefits from an extremely strong

tenant line up. The rents paid by our tenants are above

the national average, but appropriate for its uniqueness

(quality Retail complex with no competitors)

Megapark, Bilbao

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Building Capex

Capex committed: €5.1

KPI´s (Initial)

Occupancy (%):

92.4%

RP1: 100%

FOC2: 75% incl.

Mercadona

Net yield on cost (%): 6.25%

Monthly Rent (€/sqm)

€15.6 sqm/mth

RP1: €16.9 sqm/mth

FOC2: €12 sqm/mth

Location & Profile Investment Rationale

1RP: Retail Park 2FOC: Factory Outlet Centre

Megapark Bilbao


Lar España invites you take a tour of the asset: Megapark Bilbao

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Save the date: 26 November, 2015: 12:00 - Asset Tour 14:00 - Lunch presentation by Lar España management

• Please confirm your attendance by email to [email protected] specifying the

number of people from your organisation that will attend and any details you consider

necessary. You will be notified of further details in advance.

• Should you have any queries please contact Sergio Criado at [email protected]

mailto:[email protected]

mailto:[email protected]

Lar España Real Estate SOCIMI, S.A. (LRE) 15

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