intu properties plc site visit to puerto venecia, zaragoza · intu properties plc . site visit to...
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intu properties plc Site visit to Puerto Venecia, Zaragoza 8 June 2016
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Itinerary
This presentation contains “forward-looking statements” regarding the belief or current expectations of intu properties plc, its Directors and other members of its senior management about intu properties plc’s businesses, financial performance and results of operations. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of intu properties plc and are difficult to predict, that may cause actual results, performance or developments to differ materially from any future results, performance or developments expressed or implied by the forward-looking statements. These forward-looking statements speak only as at the date of this presentation. Except as required by applicable law, intu properties plc makes no representation or warranty in relation to them and expressly disclaims any obligation to update or revise any forward-looking statements contained herein to reflect any change in intu properties plc’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All figures as at 31 December 2015 unless stated.
The Spanish Strategy Martin Breeden, Group Development Director
Existing centres Nick Hodson, Managing Director, Intu Management Spain
The developments Ian Sandford, Eurofund President
Q&A
Tour of Puerto Venecia
The Spanish strategy Martin Breeden, Group Development Director
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Spain and our Spanish strategy
Create a business of scale
Focus on top 10 markets
Acquire, develop and manage market leading retail and leisure resorts
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The opportunity in Spain
Fragmented ownership
Very limited committed development pipeline
Considerable scope for improvement in quality
Top 10 key catchments account for 80 per cent of retail expenditure
Return to strong economic growth
Transferrable skills and brand values
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Our Spanish timeline
As at 31 December 2015. Subject to change.
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Eurofund arrangements
50:50 ownership with intu of all sites/options up to go/no go decision - intu to fund pre-development costs
Additional capital (intu and/or third party) to be introduced into each project at point of go decision
Will result in dilution of original 50:50 ownership structure - Eurofund interest augmented by ‘promote’ at this stage based on increase in land value
Eurofund to have 25 per cent interest in Intu Management Spain - now established as the management company for intu’s Spanish activities
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Top 10 centres
Scheme name (1) Province City, Town Total GLA(2) (sqm) Year opened Units
Diagonal Mar Barcelona Barcelona 87,085 2001 197
Gran Plaza 2 Madrid Madrid 57,500 2012 200
intu Asturias Asturias Oviedo 120,000 2001 136
La Cañada Málaga Marbella 120,000 1997 210
La Maquinista Barcelona Barcelona 76,200 2000 227
La Vaguada Madrid Madrid 85,500 1983 252
L'Illa Diagonal Barcelona Barcelona 35,000 1993 172
Madrid Xanadú Madrid Arroyomolinos 152,887 2003 220
Parquesur Madrid Leganés 151,200 1989 216
Puerto Venecia Aragon Zaragoza 200,000 2012 202
1. Listed in alphabetical order of scheme name 2. Total destination GLA, in some cases multiple ownerships
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Key retailers
intu Asturias Puerto Venecia intu UK centres
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Deliver 80 per cent of retail spend
Top 10 catchments
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Spanish economy
GDP growth Consumer confidence Employment
Ten consecutive quarters of growth
Highest levels since 2000
Employment increased by 5% in two years
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
%
Source: BoAML
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Return to growth
Spanish economy
3.5% GDP growth in 2015, the highest since 2007
(5.0%)
(4.0%)
(3.0%)
(2.0%)
(1.0%)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%GDP 3m (YoY) GDP YoY
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Return to growth
Spanish economy
Consumer confidence remains strong
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
Spain - Overall Consumer Confidence
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Return to growth
Spanish economy
Retail sales have been positive since September 2014
(14.0%)
(12.0%)
(10.0%)
(8.0%)
(6.0%)
(4.0%)
(2.0%)
0.0%
2.0%
4.0%
6.0%
8.0%Retail sales YoY
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The team is in place
Senior management structure
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Existing assets
Funding structure
€'m intu equity CPPIB Debt
funding Total asset
value intu Asturias 74 74 94 242 Puerto Venecia 113 113 225 451 31 December 2015 187 187 319 693 intu Costa del Sol (spend to December 2015)
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Development pipeline
Funding structure
€1.4 billion pipeline over next seven years to deliver three centres
Assumption that development finance will be utilised and 50:50 joint venture partner will be introduced
As at 31 December 2015. Subject to change.
Existing centres Nick Hodson, Managing Director, Intu Management Spain
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Key data
intu Asturias
2001 year opened
120,000 GLA (sq. m.)1
€242m market value +41% since acquisition
99% occupancy
11m footfall1 +2% 2015 year-on-year
+5% 2015 total sales growth
120mins dwell time
10% total occupancy cost ratio
€3,100 average sales per sq. m.
5 years weighted average unexpired lease term
1 all owners included; All data as at 31 December 2015.
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Region and catchment
intu Asturias
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Location and access
intu Asturias
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Aerial view
intu Asturias
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Letting progress since acquisition (October 2013)
intu Asturias
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Letting progress since acquisition (October 2013)
intu Asturias
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High impact, low cost enhancements
intu Asturias
Refreshment of entrances and central squares
Enhanced seating and toilets
intu branding successfully introduced
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High impact, low cost enhancements
intu Asturias
New slip roads to car parks enhancing access
Acquired petrol station providing full site ownership
External restaurant terrace attracting new brands and customers
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Current Layout
intu Asturias
IKEA under separate ownership
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Key data
Puerto Venecia
2012 year opened
200,000 GLA (sq. m.)1
€451m market value
95% occupancy
19m footfall +4% 2015 year-on-year
+13% year to date sales growth
156mins dwell time
10% total occupancy cost ratio2
€3,100 average sales per sq. m. 2
11 years weighted average unexpired lease term
1 all owners included; 2 2015 figures for covered mall; All data as at 31 December 2015.
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Region and catchment
Puerto Venecia
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Location and access
Puerto Venecia
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Aerial view
Puerto Venecia
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Leisure
Puerto Venecia
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Letting progress since acquisition (January 2015)
Puerto Venecia
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Letting progress since acquisition (January 2015)
Puerto Venecia
The developments Ian Sandford, Eurofund President
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Background
Eurofund
1984: Thorbourne PLC, a specialist developer of retail warehousing - From 1989 responsible for international development, establishing Spain-focused strategy - Developed Spain’s first retail park in Valencia, another in Granada
1994: Founded Eurofund - Developed and sold Parc Vallés leisure retail park; Terrassa, Barcelona - 58,000 sq m including cinema, fitness centre, restaurants and retail - Developed strategy for supra-regional shopping centre investment
1999 – 2012: Puerto Venecia JV established – Eurofund, British Land & Orion - 206,000 sq m, Europe’s largest retail destination - Eurofund role was as founding investor and developer - Innovative “shopping resort” – unrivalled shopping, leisure and dining in exceptional public spaces - Opened 90% let in October 2012
2013+: JV established with intu focused on developments and management of the existing centres
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The Shopping Resort
Our response…
The changing world of retail
The internet is revolutionising how we shop and more importantly where we shop
Rapidly diverging models developing between rational based and experience based shopping
Driving retailers to fewer but larger shops
And asking different questions as to what a shop does
A regional retail, entertainment and services hub centered around stunning public spaces
Bringing together a sense of experience, a sense of place
Creating a place not just to stop, but a place where people want to spend their free time embracing leisure at its heart
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The principles in creating a Shopping Resort
The Shopping Resort
“Our objective is to create the family’s second space. Offering something for every member of the family. Reducing the
compromises makes for an easy decision. Making it a day out!”
Make it emotional
Compete for people’s free time
Think family, think everybody
Variety and surprise
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Defining the concept… Puerto Venecia
Shopping Resort
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Timeline
Developments
As at 31 December 2015. Subject to change.
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Region and catchment
intu Costa del Sol
Plus 10 million annual tourists
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Location and access
intu Costa del Sol
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Planned development
intu Costa del Sol
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intu Costa del Sol Leisure options
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Region and catchment
intu Valencia
Plus 22 million annual tourists
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Location and access
intu Valencia
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Planned development
intu Valencia
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Location and access
intu Vigo
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Planned development
intu Vigo
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Location and access
intu Palma
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Planned development
intu Palma
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Biographies
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Spanish Executive Management
Ian Sandford President Eurofund Investments
Nick Hodson Managing Director Intu Management Spain
Jose Urrutia Director of Operations Intu Management Spain
In 1994, Ian Sandford became a founding director of Eurofund. In 1999 Eurofund saw the potential to invest in super regional shopping centres. With the collaboration of British Land and Orion Capital Managers, a joint venture was established to develop Puerto Venecia, which with a GLA of 206,000m² is Europe’s largest retail destination. In April 2013, Eurofund established a joint venture with intu for the development pipeline in Malaga, Valencia, Vigo and Palma. Ian Sandford is a Chartered Surveyor.
Nick Hodson joined the recently incorporated Spanish management company, Intu Management Spain, as Managing Director in March 2015. Intu Management Spain is responsible for the recently acquired trading schemes, intu Asturias and Puerto Venecia, and the development pipeline with Eurofund. Nick joined intu from Eurofund Investments and was previously Head of Continental Europe for British Land with particular responsibility for the Development of Puerto Venecia. Nick Hodson is a Chartered Surveyor.
Jose Urrutia joined intu in January 2014 as Senior Asset Manager and the first employee in Spain following the intu Asturias acquisition. Jose offers over 20 years experience in leading development, investment and asset management, mainly for large shopping centres but also other project uses. He joined intu from British Land where he played a material role in the development of Puerto Venecia, and has previously worked for Metrovacesa, Procisa and Carrefour Group. Jose is an Industrial Engineer (M. Eng.- ICAI), MSc. Manufacturing Eng. & Management (University of Birmingham), and PDG graduate at IESE.