Last checked at 30 Aug 2017 07:00
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Company Update and EPRA Net Asset Value at 30 June 2017
Globalworth Real Estate Investments Limited ("Globalworth" or the "Company") is pleased to release an update for its operations in 2017 and its unaudited EPRA Net Asset Value as of 30 June 2017.
The operational update includes Globalworth's:
· leasing update for the period extending between 1 June and 25 August 2017;
· financial highlights from the six month period ending 30 June 2017; and
· unaudited Consolidated Statement of Comprehensive Income and unaudited Consolidated Statement of Financial Position as of and for the six month period ended 30 June 2017.
The Company's Interim Report and Unaudited Interim Condensed Consolidated Financial Statements as of and for the six month period ended 30 June 2017, which will also contain these two statements, will be published in September 2017.
The unaudited EPRA Net Asset Value as of 30 June 2017 is presented in accordance with the stated intention of the Company to publish its estimated NAV on a quarterly basis.
Key highlights:
· Successfully signed an additional 12.6k sqm of commercial GLA in our properties between 1 June and 25 August 2017, increasing our total for the year to 30.0k sqm
· 462.8k sqm of commercial space let or pre-let, including Globalworth's stake in the new 47.0k sqm headquarter of Groupe Renault Romania's to be developed in Bucharest, with a WALL of 6.2 years as of 25 August 2017
· Our total average occupancy of commercial standing GLA was 92.6% up from 89.7% at 30 May and 83.1% at 31 December 2016
· 8.5k sqm of additional commercial GLA under HoT and tenant option, which would further increase occupancy of our standing properties to 94.4%
· Net operating income ("NOI") of €22.0m (H1-16: €19.9m), up 11% as compared to H1-16 mainly as a result of the new lease agreements signed during 2016 and the addition of two leased properties to the standing commercial portfolio during H1-17
· Normalised EBITDA1 from ongoing operating activities of €18.8m (H1-16: €16.2m), up 16% as compared to H1-16 due to the increase in NOI and reduction in administration expenses
· As a function of one-off debt restructuring expenses, earnings after tax of €6.6m negative (H1-16: €4.7m positive) decreased by €11.3m as compared to H1-16. The negative earnings after tax resulted from the full amortisation of unamortised debt issue costs of c.€16.1m, following the successful refinancing of the Company's debt with the issuance of the €550m Eurobond in June 2017 at a coupon of 2.875%. This has significantly lowered the Company's weighted average cost of debt to 3.0% at 30 June 2017, from 5.3% at 31 December 2016
· Portfolio Open Market Value ("OMV")2 of €1,045.4m (31 December 2016: €977.5m), up 6.9% as compared to 31 December 2016
· Net Loan to Value of 27.4 per cent (31 December 2016: 20.7 per cent), up 6.7% as compared to 31 December 2016
· Gross Loan to Value of 54.6 per cent (31 December 2016: 43.4 per cent), up 11.2% as compared to 31 December 2016
· The increase in Net and Gross Loan to Value ratios as at 30 June 2017 as compared to 31 December 2016 is due to the temporary effect of the successful equity and debt raising initiatives of the Company in December 2016 and June 2017, respectively, leading to the temporary availability of significant cash and cash equivalent balances at 30 June 2017 (c.€284.3m) to be utilised for the execution of further investments, which in turn are anticipated to lead to an increase in NAV and reduction in the Gross and Net Loan to Value ratios
· Net Asset Value ("NAV") of €688.8m (31 December 2016: €715.4m) and NAV per share of €7.613 (31 December 2016: €7.91), down 3.7% and 3.8%, respectively, as compared to 31 December 2016 mainly due to the interim dividend distribution declared in June 2017 and the full amortisation of debt issue costs, as explained above
· EPRA4 NAV of €759.8m (31 December 2016: €783.8m) and EPRA NAV per share5 of €8.30 (31 December 2016: €8.57), down 3.1% and 3.2%, respectively, as compared to 31 December 2016 due to the same reasons as the reduction in NAV
IMPORTANT NOTICE / FORWARD LOOKING STATEMENTS
This Announcement contains forward-looking statements. These relate to the Company's future prospects, developments and strategies. Forward-looking statements are identified by their use of terms and phrases such as "believe", "could", "envisage", "estimate", "expect", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions and discussions of strategy, plans, objectives, goals, future events, intentions or expectations. The forward-looking statements in this Announcement, including as to expected or estimated NOI (net operating income), GLA and WALL, are current expectations based on a number of assumptions that reflect a substantial degree of judgment and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied by the relevant statements. Factors that could cause actual results and outcomes (including NOI) to differ materially include, but are not limited to, those discussed under "Risk Factors" in Part I of the Admission Document of the Company dated 24 July 2013. These forward-looking statements speak only as of the date of this Announcement.
For further information visit www.globalworth.com or contact:
Globalworth Real Estate Investments Limited
Dimitris Raptis
Tel: +40 372 800 000
Panmure Gordon (Nominated Adviser and Joint Broker)
Andrew Potts
Tel: +44 20 7886 2500
Jefferies (Joint Broker)
Stuart Klein
Tel: +44 20 7029 8000
Milbourne (Public Relations)
Tim Draper
Tel: +44 7903 802545
About Globalworth
Globalworth is a real estate investment company active in the SEE and CEE regions with a prime focus on Romania. The Company is internally managed by c.70 professionals and its portfolio comprises high quality real estate investments valued at c.€1.0 billion at 30 June 2017, all located in Romania.
______________________
1 Calculated as profit before finance cost, depreciation, amortisation of other non-current assets, gain on acquisition of subsidiaries, fair value gain on investment property, and other non-operational and / or non-recurring income and expense items.
2 Portfolio OMV is based on appraised valuations performed by Coldwell Banker as of 30 June 2017.
3 The number of ordinary shares used to calculate Net Assets Value "NAV" per share as of 30 June 2017 were 90,465,754 (31 December 2016: 90,396,948). If the 1,072,962 shares that will be issued during 2017 is taken into account, the diluted NAV per share at 30 June 2017 would amount to €7.53 per share (31 December 2016: €7.82 per share).
4 "EPRA" The European Public Real Association Estate is a non-profit association representing Europe's publicly listed property companies.
5 The number of ordinary shares used to calculate the EPRA Net Assets Value "EPRA NAV" per share as of 30 June 2017 were 91,538,716 (31 December 2016: 91,469,910).
Note all numbers in this announcement are unaudited.
Leasing Update (1 June - 25 August 2017)
Globalworth's momentum in leasing spaces in its properties continued in the period extending between 1 June and 25 August 2017. During this period, the Company successfully negotiated the take-up of 12.6k sqm of commercial space within its buildings, with tenants such as Microsoft, Cegedim, Nielsen and others, increasing its total for the year to 30.0k sqm.
Overall, Globalworth continues to benefit from an increasing demand for high quality office space in the Bucharest real estate market and its internal leasing capabilities. The Company has successfully negotiated the take-up of approximately 268k sqm of commercial GLA within its buildings since the beginning of 2014, confirming its position as one of the most successful investors and developers in the Romanian commercial real estate market.
The average occupancy rate of our standing properties continued to increase reaching to 92.6% on 25 August 2017 from 89.7% on 30 May, as a result of additional take-up of space in our properties and the acquisition of Green Court Building "C".
The most notable change in occupancy rate in our portfolio was in our Globalworth Plaza property where occupancy has now reached 79.5%, representing an increase of +39.6% from 30 May 2017. Occupancy has further increased in our flagship Globalworth Tower and City Offices properties which as of 25 August were 98.1% and 41.9% respectively (from 96.3% and 34.5% as of 30 May 2017).
In addition, we are currently at different stages of discussions / negotiation with a number of tenants for leasing the available spaces in our portfolio, and most notably have signed Heads Of Terms ("HoT") and have options available to tenants for the take-up of an additional 8.5k sqm of office space in certain properties which should they materialize would result in occupancy rate in Globalworth Plaza, Gara Herastrau office and City Offices to exceed 90%, 93% and 52% respectively. Our average occupancy including the aforementioned leases currently under HoT and tenant options would reach 94.4%.
New contracts signed between the beginning of June and 25 August 2017 included well-known national and multinational corporates such as Microsoft (Globalworth Plaza) for 3.6k sqm, RCS-RDS (City Offices) for 2.7k sqm, Amoma (Globalworth Plaza) for 2.3k sqm, Cegedim (Globalworth Plaza) for 1.2k sqm and Nielsen (Globalworth Plaza) for 1.2k sqm.
Tenancies in our portfolio have been signed with over 120 national and multinational corporates from 20 countries, operating in 27 different sectors / industries.
The WALL remaining on the commercial lease space in the Company's portfolio was approximately 6.2 years (at 25 August 2017).
Commercial Contracted Rent Expiration Profile (% of total) | ||||||
Year | 2017 | 2018 | 2019 | 2020 | 2021 | ≥2022 |
% | 3.3% | 0.8% | 1.4% | 13.6% | 8.0% | 72.9% |
Tenant Origin: | % of Contracted Rent | Selected Tenants of Commercial Portfolio |
Multinational | 84.5% | ABB, Abbott Laboratories, Adecco, ADP, Anritsu Solutions, Bayer, Baker Tilly, Billa, BRD, Bunge, Capgemini, Carrefour, Cegeka, Clearanswer, Colgate-Palmolive, Continental, Credit Agricole Bank, Dacia / Renault Group, Delhaize Group, Deutsche Telekom, EADS, Elster Rometrics, Ericsson, EY, Ferrero, GfK, General Motors, Grant Thornton, Honeywell, Hewlett Packard Enterprise, Huawei, Intel, Legrand, Litens Automotive, Merck, Mood Media, NBG Group, Nestle, Orange, Piraeus Bank, Procredit Bank, Saipem, Sanofi, Schneider Electric, Skanska, Starbucks, Stefanini, Subway, Telekom, Tradeshift, Tripsta, UniCredit, Valeo, Vodafone, Wipro, Worldclass, Zara / Inditex |
National | 11.1% | CITR, Creative Media, Enel Muntenia, GlobalVision, NNDKP, NX Data, Patria Bank, RINF |
State Owned Entities | 4.4% | Hidroelectrica, Ministry of European Funds |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| 30 June 2017 (Unaudited) |
| 30 June 2016 (Unaudited) |
| €'000 |
| €'000 |
Revenue | 34,938 |
| 32,035 |
Operating expenses | (12,957) |
| (12,147) |
Net operating income | 21,981 |
| 19,888 |
Administrative expenses | (3,224) |
| (3,593) |
Acquisition costs | (303) |
| (21) |
Fair value gain on investment property | 682 |
| 5,420 |
Gain on acquisition of subsidiaries | 2,639 |
| - |
Gain on sale of subsidiary | - |
| 272 |
Share based payment expense | (3) |
| (11) |
Depreciation on other long-term assets | (76) |
| (101) |
Foreign exchange loss | (229) |
| (82) |
Other operating expenses | (1,493) |
| (431) |
Other operating income | 5 |
| 3,166 |
| (2,002) |
| 4,619 |
Profit before net financing cost | 19,979 |
| 24,507 |
Finance cost | (27,330) |
| (19,329) |
Finance income | 583 |
| 146 |
Share of loss of joint ventures | (23) |
| - |
Profit /(loss) before tax | (6,791) |
| 5,324 |
Income tax expense | 195 |
| (631) |
Profit / (loss) for the period | (6,596) |
| 4,693 |
Other comprehensive income | - |
| - |
Attributable to equity holders of the parent | (6,596) |
| 4,693 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| 30 June 2017 (Unaudited) | 31 December 2016 (Audited) |
| €'000 | €'000 |
ASSETS |
|
|
Non-current assets |
|
|
Investment property | 1,048,110 | 980,892 |
Goodwill | 12,349 | 12,349 |
Advances for investment property | 10,883 | 2,454 |
Investments in joint-ventures | 1,675 | - |
Other long-term assets | 634 | 722 |
Other receivables | 1,183 | 1,183 |
Prepayments | 1,039 | 1,022 |
Non-current assets | 1,075,873 | 998,622 |
Current assets |
|
|
Trade and other receivables | 10,585 | 10,807 |
Guarantees retained by tenants | 319 | 277 |
Income tax receivable | 250 | 411 |
Prepayments | 297 | 348 |
Cash and cash equivalents | 284,296 | 221,337 |
| 295,747 | 233,180 |
Total assets | 1,371,620 | 1,231,802 |
|
|
|
EQUITY AND LIABILITIES |
|
|
Equity |
|
|
Issued share capital | 538,567 | 538,114 |
Unpaid share capital | 8,584 | 8,584 |
Share based payment reserve | 1,626 | 2,139 |
Retained earnings | 140,059 | 166,557 |
Equity attributable to ordinary equity holders of the parent | 688,836 | 715,394 |
Non-current liabilities |
|
|
Interest-bearing loans and borrowings | 556,878 | 375,570 |
Deferred tax liability | 73,630 | 70,575 |
Guarantees retained from contractors | 33 | 33 |
Deposits from tenants | 2,643 | 2,261 |
Trade and other payables | 1,857 | 2,188 |
| 635,041 | 450,627 |
Current liabilities |
|
|
Interest-bearing loans and borrowings | 1,610 | 38,665 |
Guarantees retained from contractors | 2,563 | 2,394 |
Trade and other payables | 19,396 | 20,726 |
Other current financial liabilities | 3,004 | 3,574 |
Finance lease liabilities | - | 4 |
Deposits from tenants | 980 | 374 |
Dividend payable | 19,902 | - |
Income tax payable | 288 | 44 |
| 47,743 | 65,781 |
Total equity and liabilities | 1,371,620 | 1,231,802 |