Institutional Presentation - IIQ FY 2019 - IRSA
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Institutional
Presentation
IIQ FY 2019
www.irsa.com.ar
IRSA: Leading Real Estate Company in Argentina
Leading real estate company in Argentina with opportunistic assets abroad.
Majority shareholder of IRSA Propiedades Comerciales, leading commercial real estate company in Argentina with
~415,000 sqm of GLA located in premium locations.
63.3%
81.3% SANTA MARÍA 29.91%
HOTELS & OTHER INTERNATIONAL
LANDBANK
SHOPPINGS OFFICE
VP 18.9% Indirectly 49.0%
MALLS BUILDINGS 100% 77.9%
COMMERCIAL
LANDBANK
© 2017 CRESUD. All rights reserved. Page 2
IRCP at a glance
Business description
Largest owner and operator of premium shopping malls and one of
the largest owners of office buildings in Argentina
~415,000 gross leasable area (“GLA”) in prime locations
Land reserve to develop ~372,0001 sqm of commercial property
Over 95% occupancy rates in shopping malls in last 10 years
Average lease rates of US$25.7 / sqm and 90% office occupancy
GLA breakdown (as of September 30, 2018) Simplified ownership structure
18 year
7 office buildings track record
~83,000 sqm
BYMA 22 year
20% track record
81.3% 18.8%
16 shopping malls
Total: ~332,000 sqm
~415,0001 80%
sqm
IRSA is a leading, diversified, publicly listed company with
presence in real estate and other sectors
© 2017 CRESUD. All rights reserved. Page 3
Our prime portfolio of assets is located in Argentina’s wealthiest
neighborhoods and principal business districts
Buenos Aires shopping malls Buenos Aires office buildings
67% market share in
terms of sales
City of City of
Buenos Aires Buenos Aires
Argentina shopping
malls
Low income Area Expanding Corporate North Area
Mid Income Area Business Center
High income Area AAA Location
Land reserve Back Office Center
Land reserve
Ourreserved.
© 2017 CRESUD. All rights premium locations act as an entry barrier for new competitors Page 4
Resilient revenue model
That has withstood historical inflation and currency depreciation
Shopping malls Office buildings
Revenue from leases Revenues from leases
In advance Our tenants pay a peso denominated base
rent plus an additional percentage
% Sales
linked to sales
% Sales
Brokerage fee
~5x monthly base rent
% Sales
US$ US$ US$
Base Rent
“Key money”
admission rights
~8x monthly base rent
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3
Other revenues Shopping mall rent revenue breakdown1
3-year average term for office
Other lease contracts
Non Traditional Advertising
13,4%
Admission US Dollar based
rights
9,1%
Parking Stands
Rental rates for renewed
terms are negotiated at
Base rent market
Percentage 56,4%
rent
21,1%
1 As of September 30, 2018
© 2017 CRESUD. All rights reserved. Page 5
Shopping Malls & Offices’ Operating figures
Shopping Malls – Tenants’ Sales Offices – Leases USD/sqm/month & Occupancy
(% Var i.a.)
Nominal terms Real terms
100%
* Mainly explained
27,6% 28,6% 94% by new vacant floors
21,3% 22,5% 22,7% 24,1% 23,8%
18,5% 19,6% 18,5% 90%* at Dot building.
Considering Zetta
2,9% 1,8% 1,2% building fully leased
26,5 27,0 to open next quarter,
25,6
the avge occupancy
-2,8% -2,0% -0,1%
would have been
-8,4%
-14,4% -14,0% -16,1% ~93%.
IQ 17 IIQ 17 IIIQ 17 IVQ 17 IQ 18 IIQ 18 IIIQ 18 IVQ 18 IQ 19 IIQ 19
IIQ17 IIQ18 IIQ19
Shopping Centers – Sqm GLA (Th.) & Occupancy (%) Offices – Stock (sqm GLA)
98% 99% Mainly due to 12,600 sqm
+74.5%
vacancy generated by
95% Walmart in DOT Baires 145,213
Shopping
200
115,213 30,000 Della
Paolera
+ 9.2% - 1.4%
Zetta 32,000
337,401 340,111 Building
332,119
115,213
77,252 84,361 83,213 83,213
Excluding this effect, IIQ 19
end of
occupancy would have been
concession
98.7%
IIQ17 IIQ18 IIQ19 IIQ17 IIQ18 IIQ19 FY19E FY20E
© 2017 CRESUD. All rights reserved. Page 6
Our land reserve will allow us to significantly expand our
commercial real estate portfolio
We have a robust pipeline for shopping malls… …as well as for premium office properties
1.7x
580
2.7x
1181 118
221
~19,000 sqm currently
128 130 or
under construction 128
to start soon
1382 138
332 332
~67,000 sqm currently
under construction
83 83
Current Brownfield Greenfield Current GLA & Current New developments Current GLA &
pipeline pipeline
In existing land reserve In existing land reserve
© 2017 CRESUD. All rights reserved. Page 7
“200 Della Paolera” Office building (under development in Catalinas)
Recent sell to IRCP Current Ownership Total Project
35,000 GLA sqm
14,213 sqm
87%
FY 2020 Est. opening
12 floors USD 10-12mm
131 parking spaces Est. EBITDA
13%
41% Work Progress*
*As of January 31, 2018
Price:
(including remaining development)
USD 60.3 mm
Price/sqm:
~USD 4,200
© 2017 CRESUD. All rights reserved. Page 8
Projects under development
Zetta building (Polo Dot 1st office building)
The first building of the Office Park developed in the north area of BA City
Recent delivery of units to its tenants for conditioning
20%
80%
32,000 GLA sqm
Fully Leased
ARS 1,425 mm
Est. investment
~ USD 9mm
Est. EBITDA
99% Work Progress
IIIQ 2019 Est. opening
© 2017 CRESUD. All rights reserved. Page 9
Polo Dot Full Project
Polo Dot 3rd stage
Existing Shopping Mall Future Mall Expansion
Polo Dot 2nd stage
Existing Office Building
Zetta Building
Polo Dot 1st stage
Philips Building
Future Recycling
© 2017 CRESUD. All rights reserved. Page 10Projects under development: Alto Palermo Expansion
Alto Palermo Shopping mall – BA City
Highest sales/sqm shopping mall
3,900 US$28.5mm
sqm GLA estimated investment
FY2020
opening date
© 2017 CRESUD. All rights reserved. Page 11Recent approval, after 20 years, of a Mixed-Use Project in
Caballito plot of land
Land Plot of 23,000 sqm
Capacity to develop
Residential: ~ 76,000 sqm
Retail: ~ 11,000 sqm
© 2017 CRESUD. All rights reserved. Page 12Argentina Business Center – Hotels
Rate & Occupancy evolution
69,1% 71,5% 68,5%
201 195 205
IIQ17 IIQ18 IIQ19
Llao Llao
Bariloche – Río Negro Avg. Rate/room (USD) Occupancy
On Feb-19, IRSA acquired EBITDA (ARS MM) Book Value as of Jun ‘18
20% of the shares of
Hoteles Argentinos S.A., 305
owner of the hotel known 25.4
as Sheraton Liberatdor
Current stake: 100% + 331% 35,610
+ 563%
5.9
46
8,204
6M18 6M19 Historical Adjusted for Inflation
Intercontinental Sheraton Libertador
BV (USD MM) USD / room
BA City BA City
© 2017 CRESUD. All rights reserved. Page 13IRSA Main Landbank across Argentina and Uruguay
Santa María del Plata
~ 700,000 sqm to be developed
Premium Location in BA City
Mixed Use Project
Approvals pending
Montevideo Project (Uruguay) Puerto Retiro (BA) La Adela (Lujan - BA)
© 2017 CRESUD. All rights reserved. Page 14Argentina Business Center – Banco Hipotecario
Ownership Share Price evolution
IRSA
29.9%
+15%
Current vs.
IIQ 19
2019 main work fronts: 13.6
13,5
• Liabilities: to preserve cash and long term 11,8
-14%
deposits, adjusting rates to market IIQ 19 vs. IIQ
changes. 18
• Assets: increase of commissions, fees and
preservation of the quality of the portfolio
31/12/2016 30/6/2017 31/12/2017 30/6/2018 31/12/2018
in a context of higher delinquency rates.
Market Value to IRSA
• Balance Sheet equilibrium: preserving the
solvency and liquidity, with focus on the (USD million)
funding.
328
Results to IRSA
174
The bank has generated a loss of ARS 79 140 153
million during 6M 19 compared to a gain
of ARS 309 million during 6M 18, mainly
explained by the Implementation of IFRS 9.
IIQ17 IIQ18 IIQ19 Current as of Feb,21
© 2017 CRESUD. All rights reserved. Page 15Argentina Business Center – International
Lipstick Building Condor Hospitality Trust
Ownership
IRSA
18.9%*
FLOAT
STEPSTONE 56.8%
NOI (USD MM) 24.3%
8,38
27 Share Price Evolution
26 26
20/2/2017 20/8/2017 20/2/2018 20/8/2018 20/2/2019
FY16 FY17 FY18
Market Value to IRSA
Leases (USD MM) & Occupancy
(USD million)
22,8
95% 97% 97% 4 (*)
22,0 18,8
69 78 76,7 15,5
IIQ 18 IIQ 19 Current as of Feb
FY17 FY18 IIQ19 22, 2019
(*) 3,3mm in preferred E Series + 0,7 mm promissory note
© 2017 CRESUD. All rights reserved. Page 16Israel Business Center – Main Events 6M 2019
Sale:
Sales: 7.5% stake
NIS 416 mm.
(Through Current stake: 26.0%
swap transactions) Aug-2018: 5% stake Acquisitions:
Jan-2019: 4.5% stake
Current stake: 25.3%
Economic rights: 54.9%
3% stake 9.2% stake 0.7% stake
NIS 55 mm NIS 31 mm NIS 15 mm
6.000 Market Cap vs. Book Value Current stake: 67.5% Current stake: 59.5% (+NIS 31 mm option exercise)
(NIS million) Current stake: 43.9%
5.500
5.150,7
5.000
4.500
Shares repurchase plan:
4.000 Up to NIS 120 mm
3.500 Period: 1 year (until Dec-2019)
3.000 Remaining floating capital stock: no less than 10.1%
2.500 2.927,9 As of Dec-2018 2.1 mm shares already repurchased (NIS 9 mm)
2.000 57% BV
1.500
Equity Market cap
1.000
Dividend distribution (Feb-2019): NIS 100 mm
(NIS 60 mm in kind – IDB Series 9 Bond – and NIS 40
mm in cash)
© 2017 CRESUD. All rights reserved. Page 17Investment in IDB & DIC (Israel)
Current Corporate Structure
Indirectly*
100% 77.9% Working to reduce one more
layer of public companies
before December 2019,
according to Concentration
Law requirement
19.3% 100% 25.3%** 68.8% 43.9% 67.5% 59.5% 26.0%
Financial Telecommunicatio
Energy Tourism Insurance Real Estate Technology Supermarket
Investments ns
45.4% 51.7%
Agriculture Rental Properties
* There is a non recourse intercompany loan between Dolphin (borrower) and IDB (lender) due to the transference of DIC shares. This loan is guaranteed with DIC shares sold.
** 29.6% stake sold through local swap transactions, holding economic rights for 54.9%.
© 2017 CRESUD. All rights reserved. Page 18PBC & Gav Yam: Leading real estate companies in Israel
Main tenants
1,160,000 sqm 97%
HSBC building (Manhattan) Tivoli (Las Vengas)
in Israel occupancy
670,000 sqm 142,000 sqm
Land reserve in USA
© 2017 CRESUD. All rights reserved. Page 19Real Estate projects under development in Israel
8 Projects - 194,000 sqm
MATAM-YAM:
REHOVOT: 3 of 4 Recently finished. NEGEV: 3 of 4
buildings finished Amazon main tenant buildings finished TOHA: 95% already leased. Opening during 2H FY 2019
The New Haifa Bay – Logistic Center: Opening during 2H FY 2019
© 2017 CRESUD. All rights reserved. Page 20Deleverage at IDB & DIC
Net Debt (USD million)
Stand alone
Stand alone
1290 1312
1466
1321
923
781
749 739
698 951 954 966
740
673
dec-2012 dec-2013 dec-2014 dec-2015 dec-2016 dec-2017 dec-2018 dec-2012 dec-2013 dec-2014 dec-2015 dec-2016 dec-2017 dec-2018
© 2017 CRESUD. All rights reserved. Page 21IRSA Net Debt as of December 31, 2018*
USD million
IRSA Net Debt 294.2
Amortization Schedule
205.5
83.2
5.9 8.8
FY 2019 FY 2020 FY 2021 FY 2022
*Does notCRESUD.
© 2017 include IRCP
All&rights
IDB/DIC debt
reserved. Page 22Thanks!
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