1
GREAT THINGS HAPPEN WHEN
DISCLAIMERYOU OWN GREAT REAL ESTATE
This presentation may include forward-looking statements, including forecasts, evaluations, pro forma figures, estimates and other information relating to future events and issues or the Corona epidemic effect and the global economic crisis derived from it or a targeted crisis in one or several countries in which the company operates. Forward-looking statements may relate to, among other things, revenues, earnings, cash flows, capital expenditures and other financial items. Forward-looking statements may also relate to our business strategy, goals and expectations concerning our market position, future operations, profitability, liquidity and capital resources. All statements other than statements of historical facts are forward-looking statements and can be identified by the use of forward-looking terminology such as the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases.
Any forward-looking information contained in this presentation is based, in addition to existing information of the Company, on present Company expectations and evaluations regarding future developments and trends and on the interaction of such developments and trends. Although we believe the assumptions upon which any forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. Our business and operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements are based on current expectations and are not guarantees of future performance.
Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in this presentation depending on a variety of factors including those described in greater detail in our Periodical and Annual Reports and Early Release of condensed financial information from the Company's Financial Statements , and in other information we file and furnish including, but not limited to, with the Israel Securities Authority, including under the heading "Risk Factors."
All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable securities laws, we undertake no obligation to update any information contained in this presentation or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this presentation.
The information contained herein does not constitute a prospectus or other offering document, nor does it constitute or form part of any invitation or offer to sell, or any solicitation of any invitation or offer to purchase or subscribe for, any securities of Gazit-Globe Ltd. or any other entity, nor shall the information or any part of it or the fact of its distribution form the basis of, or be relied on in connection with or relating to any action, contract, commitment or to the securities of Gazit-Globe Ltd.
The Company's estimated regarding the sale of properties, are forward-looking information as defined in the Securities Law, 1968. Its assessments regarding the sale of properties are based on the Company's and Group companies' assumptions and estimates, but they are uncertain, may not materialize and are largely uncontrolled by the Company. As the global economic crisis continues and worsens, and as the Covid-19 Pandemic continues and there is a stagnation in the income-producing real estate sector, there may be delays in realization of assets until the end of 2021.
In addition, the Company's estimates regarding the savings from the dividend policy update are based on assumptions regarding the actual approval of dividend distribution in each of the aforesaid quarters, including the amounts specified in the updated policy and may not materialize as the Covid-19 Pandemic crisis worsens and will have a negative effect over the Company's financial position.
2020 Operational Performance
Same Property NOI
Same property NOI decreased by 14.9% for the year.
primarily from Brazil which reopened partially for business in the middle of June 2020 and for normal operation by the middle of October, Atrium due to reliefs imposed by the Poland government for the lockdown period, and Israel which was under lockdown for 139 during 2020.
-5.9% -15.4% -33.4% -3.4% -18.0% - 14.9%
Northern Europe
CEE
BrazilU.S.
Israel
Total
COVID-19 Impact on the Proportionate adjusted NOI of 20% in 2020 (Slide 21 For Details)
Proportionate NOI exc. COVID
COVID- 19 Impact Recognized in the period Reported Proportionate NOI
COVID-19 Impact in the next periods
1,299 (199) 1,100 (65)
Proportionate NOI Including Total Impact Recognized During the Period and in the Next Periods
1,035
Urban Assets Portfolio Providing Daily Needs and Services
Group's GLA was opened for business during COVID-19
Lease agreements in the Group
# of assets
As of December 31, 2020
Supermarkets in the Portfolio
Contribution of the largest tenant in the Group according to proportionate NOI
55%
9,200
105
140
~1.8%
*Company share in group proportionate NOI for the year 2020.
Geographic Diversification Based on
Proportionate NOI*:
Norway 13%
80% Of Gazit's Assets Are Located In 16 Metropolitan Areas.
Tenant Mix Based on Proportionate NOI*
DIY, Home Furniture 3%
Tel Aviv New York Prague Sao PauloBoston Warsaw Stockholm Helsinki
Quality Assets Portfolio that Incorporates Partially Open-Air Assets in Densely Populated Urban Areas, Not relied On Dominant Tenants.
Lockdown Periods in Wholly Owned Private Subsidiaries
Strong Rebound When Centers Reopened
• Israel:
• Mall were closed for 139 days (37%) during 2020
• Power centers were close for 97 days (27%) during 2020
• US: After two months and a half lockdown, properties opened for operation under limitation
• Brazil, Sao-Paulo - Reopened during June 2020 for partially operation and for normal operation during October 2020, As of March 2021 Sao-Paulo is in lockdown period
Jan-20 | Feb-20 | Mar-20 | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | Sep-20 | Oct-20 | Nov-20 | Dec-20 | Jan-21 | Feb-21 |
Malls | |||||||||||||
Strip Ce | nters | ||||||||||||
Lockdown Period
Normal Operations
New Lease Agreements (Wholly Owned Subsidiaries)
• During the period, 285 new lease agreements were executed, including exercise of options in the company's wholly owned subsidiaries, with GLA of approximately 53,000 square meters and a weighted average rent that exceeds by 5% (excluding Home Depot new lease in Manhattan) the rent paid for those areas.
• In the second quarter, the company signed a new lease agreement with the leading DIY The Home Depot - international retail credit tenant, which manages thousands of stores, the lease term is 20 years, at an annual base rent of about $7.8 million compared to $ 3.8 million current base rent.
• In the fourth quarter, a new lease agreement was signed with the NBA to open the fourth largest store in the world in Sao Paulo. The store is expected to be open in April 2021 in the Murambi Town Mall of Gazit. The store has an area of about 1,200 square meters and will include a variety of amenities including a basketball court, events area, restaurant bar and locker rooms.
G MIKADO CENTER | TEL AVIV
Actions to Increase and Strengthen the Capital Structure
In The Last Three Months, Agreements Have Been Signed in an Amount of
~ NIS 650 MILLION
(OUT OF NIS 1 BILLION IN THE PROGRAM)
The Company Is Advancing In The Disposition Program of Non-Core Assets
1
BILLION NIS
100%
#Assets | 12 |
Portfolio Value | 3.7 B NIS |
GLA (Company's share) | 168K SQM |
• 60% of the Portfolio GLA is Open Air centers
• Approximately 43% of the GLA are leased to essential tenants and continued to operate during the lockdown period
• Approximately 30% of the GLA are neighborhood centers. Approximately 53% of the neighborhood centers are leased to essential tenants .
New Opening During the Period
Additional NIS 22 million to the annual NOI
Company Share - 100%
5 KM Population - 620K
Company Share - 100%
5 KM Population - 530K
Socioeconomic score 10*
Source: CBS, * Urban interior cluster (Index SES)
Socioeconomic score 7
G CITY Commercial and Office Tower Approx. 65,000 SQM
Addition to G City (existing property) in Rishon Letzion, on a land of approximately 80 dunams (approx. 20 acres) privately held, adjacent to the currently under-construction light-rail train station (Green Line), and 500 square meters from the Moshe Dayan train station (Israel Railways). Redevelopment permit for excavation has been granted. The company has submitted for a permit
to build the basements.
G CITY | RISHON LEZION
Company's Share | 100% |
GLA (sqm) | 65,000 |
Uses | Office and Commercial |
Expected Constroction Date | Q2/2021 |
Expected Completion Date - Commercial | Q2/2023 |
Expected Completion Date - Office Tower | Q4/2025 |
Demonstrated value creation within the existing portfolio:
• Executed a new lease agreement with the leading
Occupancy
90.7% (3.4%)
DIY** tenant, The Home Depot - international retail
credit tenant, lease term of 20 years, with annual
lease payment of USD 7.8 million, compared to USD
3.8 million from previous tenant.
Future upside and potential for value creation within the existing portfolio:
• Gazit intends to implement a capital improvement plan to renovate the new property "College House". Additionally, retail tenants CVS and Santander Bank are expected to vacate in 2021, which will allow Gazit to create exceptional retail space directly across from Harvard Yard.
• Development Pipeline, Brickell, Miami: Company is examining several scenarios for utilized the 48 stories
* Including jointly controlled property (Ceaser's Bay in Brooklyn) and "College House" property which was purchased after the reporting date.
**DIY is acronym for "do it yourself" retailers as Home-Depot.
of building rights for mixed-use of commercial, office, lodging and residential development.
The information about the company's development and investment plans as well as expectations for future leases constitute forward-looking information, for details see page 2
Main results for the period
Same Property NOIFocusing on gateway cities with superior demographicsValue add opportunities in mixed use properties
#Assets* | 12 |
Portfolio Value | 561 M USD |
GLA (Company's share) | 58K SQM |
GAZITHORIZONS
Case Study | Bridge Tower | Home Depot
Value Creation Through Acquisition of Premium Properties in Special Locations
The property has an atypical size for Manhattan retail condos with three 30,000 SF floorplates and 17'+ ceiling heights with minimal column intrusion and a dedicated off-street loading dock in the garage.
The Property is situated on 1st Ave at the foot of the Queensborough Bridge connecting Queens to Manhattan, in one of Manhattan's most affluent and oldest retail neighborhoods, Sutton Place, with an average annual income of nearly $200,000.
Bed Bath & Beyond vacated the property; Renovation in progress for Home-Depot fit out.
Location | MANHATTAN, NY |
Company's Share | 100% |
GLA (sqm) | 9,300 |
# Stores | 2 |
1-MILE POP. | 175K |
AVG. HH INC. | $200K |
GAZITGLOBE
GAZITHORIZONS Case Study | Bridge Tower | Home Depot
GAZITGLOBE
Oct 2017
Sep 2018
Q2 2020
2021
STEP 1 - COMPLETED Acquisition of Bridge Tower for approx. $73 Million. Bed Bath & Beyond is the main tenant in NNN lease and Starbucks occupied the rest.
Annual Gross Rent: $4 Million
UPSIDE: | DOWNSIDE: |
Rent is significantly | BB&B will extend |
lower than market | the contract |
price |
STEP 2 - COMPLETED Acquisition of the adjacent
Garage under the assumption - it will increase value add potential
Property Basis: $80 Million
UPSIDE:DOWNSIDE:
Obtaining an eviction agreement with BB&B at no extra charge. Executed a new lease agreement with Leading DIY giant The Home Depot - international retail credit tenant, lease term - 20 years and 1% annual rent growth.
RESULT:
Bed Bath vacates all or a Bed Bath & Beyond portion of space and re- exercises option at $4 leasing at market rateMs illion NNN with 2% annual growth
STEP 3 - COMPLETED
Annual Gross Rent: $7.8 Million
RENT UP 97%
STEP 4 - TO BE COMPLETE The Home Depot 10yr bond is trading at 1.8% YTM. Examining the option of re-financing with specific mortgage for long term credit tenant.
RESULT: 1.4x equity multiple return at refinancing. Expected annual cash flow of approximately $ 0.5 million
(full amortization)
Doubling the Rent - Annual yield on total cost increased from 5% to 8%, resulted in significant value creation
MAIN RESULTS IN THE PERIOD
OccupancySame Property NOI
98.1% )33.4%(
• The Company filed with the Securities and Exchange Commission in Brazil a draft prospectus for an IPO of most of its Brazilian operations through an offer for sale.
• Interest rate has decrease sharply, Selic is 2.75% compared to 4.5% Q4/19.
Double digit Same Store NOI Growth
18.2%
2018
2019
GAZITBRASIL Sao-Paulo
Listing on Sao Paulo Stock Exchange
GAZITGLOBE
On February 2, 2021, The Company filed with the Securities and Exchange Commission in Brazil a draft prospectus for an IPO of most of its Brazilian operations through an offer for sale. In addition, the designated fund intends to raise a long-term secured debt prior to the offer for sale.
The sale offer will be in the format of a FII (similar to REIT), a Brazilian real estate investment fund, which is fully owned by the company.
What is the rationale for issuing the activity in Brazil?
1. Much more flexibility with regards to our Brazil holdings
2. Increasing liquidity
3. Reducing leverage in the group
4. Reducing exposure to Brazilian market
5. Creating new income streams - annual management fees of 0.9% of the fund's market value
* Including jointly controlled property (Ceaser's Bay in Brooklyn) and "College House" property which was purchased after the reporting date.
**DIY is acronym for "do it yourself" retailers as Home-Depot.
The information about the company's development and investment plans as well as expectations for future leases constitute forward-looking information, for details see page 2
GAZITBRASIL Sao-Paulo
Listing on Sao Paulo Stock Exchange (Cont.)
GAZITGLOBE
Cidade Jardim
33% ownership GLA: 38k sqm
Paulista 1267
Landbank Potential GLA: 4k sqm
Top Center
Fully Owned GLA: 20k sqm
*As of 31/12/2020, The BRL / NIS exchange rate used for convenience conversion is 0.6
The Investment Fund's holdings, which are recorded on the Company's books at fair value of BRL 2,8 billion,
NIS 1,7 billion*
2
Mais Shopping
Fully Owned GLA: 23k sqm
Shopping Light
Fully Owned GLA: 19k sqm
Prado Boulevard
98% ownership GLA: 10k sqm Located in Campinas
Internacional Shopping
80.1% ownership GLA: 76k sqm
Morumbi Town
Fully Owned GLA: 31k sqm + Landbank: 4,624 sqm
GAZITBRASIL Sao-Paulo
Listing on Sao Paulo Stock Exchange (Cont.)
GAZITGLOBE
Stage 1 - Immediately preceding the public offer of sale, the special fund is expected to raise secured debt with a lien of up to BRL 650 million (NIS 390 million*) through a private offering to institutional investors
Stage 2 - Gazit will carry out an offering for sale of 25% - 49% of its holdings in the Special Investment Fund for an expected consideration of BRL 0.5 - 1 billion (NIS 320 - 630 million*)
Result -The total proceeds from the offer of sale and raising debt is expected to be
BRL 1.2 - 1.7 billion (NIS 710 - 1,000 million*)
New income stream - annual management fees of 0.9% of the fund's market value, as well as a success fees. Approx. BRL 50 - 60 million (NIS 30 - 36 million*)
*The BRL / NIS exchange rate used for convenience conversion is 0.6
**The Company's estimates regarding the dates of completion of the offers, the degree of their completion and the expected return constitute forward-looking information, as detailed in slide 2 of the presentation. These estimates are based on the Company's assumptions as of this date, and are uncertain, may not materialize and are not under the Company's control, inter alia, due to changes in global capital market conditions in Brazil and interest rates in Brazil, morbidity due to Covid-19 Pandemic and its effects, and the fulfillment of the conditions for the offers (such as the receipt of regulatory permits).
* The Company's relative share of the total value of the assets of the subsidiaries. ** Including G. Kfar Saba, G. Rishon Lezion, Savyon and land parcels.
2020 Summary
COVID-19 Impact
• P&L - 20% Decrease in the Proportionate adjusted NOI in 2020 approx. NIS 264 million (see next slide)
• Balance Sheet - decrease of 7.6 in equity per share, mainly
36.30%
due to devaluation of investment property and changes in foreign exchange rates.
Same Property NOI
Same property NOI decreased by 14.9% for the period (full year)
primarily from Brazil which reopened partially for business in the middle of June 2020 and for normal operation by the middle of October, Atrium due to reliefs imposed by the Poland government for the lockdown period, and Israel which was under lockdown for 139 during 2020.
-5.9% -15.4% -33.4% -3.4% -18.0% - 14.9%
Northern Europe
CEE
BrazilU.SIsrael
Total
FFO Per Share
NISו
FFO p/s in the period decreased by 13.3% compared to last year
3.24
2.81
(13.3%)
36.30%
2019
2020
COVID-19 Impact During 2020
Proportionate NOI:
• Decrease of NIS 199 millions (15%) as result of COVID-19 impact recognized during the period
• Decrease of NIS 264 millions (20%) as result of total COVID-19 impact (recognized during the period and in the next periods)
Proportionate NOI exc. COVID
COVID- 19 Impact Recognized in the period Reported Proportionate NOI
COVID-19 Impact in the Next Periods
Proportionate NOI Including Total Impact Recognized During the Period and in the Next Periods
COVID-19 impact recognized during the period
COVID-19 impact SLR in the next periods
*SLR - Straight Line Rent
1,299 (199) 1,100 (65)
NOI 2020 exc.
COVID-19
ATR
CTYBrazilIsraelNOI 2020 Reported
68
1,035
COVID-19 Impact and FX changes on Shareholder's Equity per Share
Main factors which caused decrease in shareholder's equity per share:
• Decrease of NIS 6 per share from devaluation of investment property, mainly due to negative market sentiment
• Decrease of NIS 6.2 per share as result of changes in foreign exchange rates, mainly 28% devaluation of BRL/NIS in the period
Equity p/s as of 31.12.19
Buyback of sharesRevaluation ofFair value loss from Investmentderivatives(exclude property (Gazit'sForeign currency translation reserves net of
FFO 2.8
Other 0.4
Dividend
FX)
part)
SWAPEquity p/s as of 31.12.20
1.6
Rent Collection Rate
Year 2020
96%
97%
93%
99%
91%
76%
72%
GroupCitycon (Northern
Europe)
Fourth Quarter:
Atrium (CEE)Gazit IsraelGazit BrasilHorizonsCanada and Germany
95%
93%
99%
88%
90%
87%
62%
GroupCitycon (Northern
Europe)Atrium (CEE)Gazit Israel
As Reported by Subsidiaries, Atrium collection rate does not include rent exemptions imposed by polish government
Gazit BrasilHorizonsCanada and Germany
Wholly Owned Subsidiaries, Collection Rate Based on Rent Without Adjustments
Operating Cash Flow and Interest Costs
Financial Strength
Key Items
NISו
• Cash and Cash Equivalent of Approx. NIS 1.1 Billion
• Net Debt to Total Assets (Expanded Solo) - 61.8%
• Net debt to total assets (Consolidated) - 58.8%
• Weighted duration - 4.2 years
• Average interest rate of liabilities - 3.50%
Net Debt (Expanded Solo)
NIS Million ו
14,079
9,620
Net Debt Decreased
3...
NIS Billion
31/12/2016
31/12/2020
Bond Maturity Schedule Until End of 2023
NIS Million ו
Liquidity
NIS Billions ו
Expanded Solo As of 31/12/2020
Signed RCF from Israeli Bank and Release of Pledge Deposit (Bond 15)
Disposition of Assets with Signed Definitive Agreements
909
Unutilized Signed Credit Facility
723
346
Cash and Cash Equivalent
2021
2022
2023
Total
30/09/2020*
Bond Maturity Schedule (Extended Solo)
*As described in slide 25
• On October 20, 2020, a new series of bond (Series 15) was issued, secured by real estate in Israel, with a rating of AA by S&P Maalot and Aa2 rating by Midroog.
• Refinancing in attractive yield of 1.08%
• Long duration of 6.2 years
• Expected annual interest expenses saving of NIS 14 millions
GREAT THINGS HAPPEN WHEN YOU OWN GREAT REAL ESTATE
THANK YOU FOR YOUR TIME
CONTACT INFORMATION
Adi Jemini
EVP & CFO
Or Ackerman
Head of Investor Relations
oackerman@gazitgroup.com
+972.3.6948000
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Gazit-Globe Ltd. published this content on 29 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2021 15:49:08 UTC.