FOCUSING ON IT-SHOPPING PLACES
DISCLAIMER This document was prepared by Klépierre solely for use at the presentation of June 9, 2016. This document is not to be reproduced nor distributed, in whole or in part, by any person other than the Company. The Company takes no responsibility for the use of these materials by any person. The information contained in this document has not been subject to independent verification and no representation, warranty or undertaking, express or implied, is made as to, and no reliance may be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company nor its shareholders, its advisors, its representatives or any other person shall be held liable for any loss arising from any use of this document or its contents or otherwise arising in connection with this document. In the event of any discrepancies between the information contained in this document and the public documents, the latter shall prevail. This document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction.
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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TABLE OF CONTENTS
1
2
SPAIN, SHOWCASING THE KLEPIERRE PORTFOLIO UPGRADE STRATEGY
OPERATIONAL EXCELLENCE: DEPLOYMENT OF RETAIL KNOW-HOW IN SPAIN
3
4
CAPITAL ALLOCATION: DISPOSALS AND DEVELOPMENT PIPELINE
FINANCIAL MODEL: SOLID GROWTH, LESS RISK
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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3 PILLARS TO BOOST CASH FLOW GROWTH
Organic growth
Capital allocation
Re-tenanting
Disposals KLÉPIERRE CASH FLOW GROWTH
Rental reversion
Improvement in the Gross to Net ratio
Accretive acquisitions
Development pipeline
Economic environment Slow improvement in inflation from a very low point KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
Slight improvement in consumption trend
Further boost from interest rates
4
SPAIN, SHOWCASING THE PORTFOLIO UPGRADE STRATEGY
Meridiano (Tenerife – Spain)
1
TOP 5 ASSETS IN SPAIN REPRESENT > 85% OF TOTAL GAV Focus on shopping centers that appeal to highly demanded and valued brands. Consistency of platform enables efficiency in management, leasing and rationalization of costs.
La Gavia 89,200 sq.m. 13.3 M visitors
Maremagnum 22,000 sq.m. 10.8 M visitors
BARCELONA
Plenilunio 82,000 sq.m. 11.2 M visitors
MADRID
Meridiano 44,650 sq.m. 8.0 M visitors
Principe Pio 28,700 sq.m. 11.1 M visitors TENERIFE
55 millions visitors Data as of year-end 2015
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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SPANISH PORTFOLIO BUILD-UP – KEY MILESTONES Major strategic reshuffle completed in 2014
Integration of Corio former assets
Today’s portfolio of shopping center is well positioned to grow and benefitfrom the rapid changes in retail
Further acquisitions (Carrefour deal ctd’) First acquisitions 38 retail galleries (Carrefour deal)
Acquisition of Plenilunio
Opening of La Gavia (Klépierre development)
100
80
71
68
April 2014: Disposal of 63 retail galleries
60
1,461 40
1,190
38
800
20
495
405
16 10
2000
2004
2008
Portfolio value (€M, excl. duties, total share)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
2014 Number of shopping centers
0
2015 Average value of top 5 assets: €260 M
7
CONCENTRATION IN THE MOST DYNAMIC REGIONS/CITIES OF THE COUNTRY According to JLL cross border retailer attractiveness index, Madrid and Barcelona rank among the most appealing markets for international retailers
MADRID
BARCELONA
SPAIN
Most attractive city in Europe for retailers(1)
4
8
Million of inhabitants(2)
6.4
7.4
46.5
€31,812
€27,663
€23,290
2015 GDP growth(3)
+3.4%
+3.3%
+3.2%
Unemployment(2)
17.1%
18.6%
24.5%
GDP per capita(3)
TH
TH
(1) JLL cross border retailer attractiveness index 2016 (2) Eurostat, data as of year-end 2014 (3) Instituto Nacional de Estadistica, 2016
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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OUTPERFORMANCE OF LEADING MALLS OF OUR PORTFOLIO Today’s Spanish portfolio has historically outperformed the domestic market Top 5 centers’ retailer sales vs. national index Base 100 in 2009 145
Klépierre top 5 assets
AECC sales index
140.9 130.1
135
125 114.1 115
105
107.1
113.5
111.6
99.9
96.7 94.9
95
85 2009
91.1
2010
2011
2012
103.7
92.9
2013
2014
2015
AECC (Asociación Española de Centros Comerciales)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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PORTFOLIO RESHUFFLE LEADS TO SIGNIFICANT IMPROVEMENT IN OPERATIONAL KPIs YEAR-END 2013
YEAR-END 2015
70
Number of centers
16
€845 M
Valuation(1)
€1,461 M
50.7%
Top 5 GAV
85.7%
8.9%
EPRA Vacancy rate
5.3%
Sales per sq.m. vs 2013
+28.4%
Sales per sq.m. top 5 Gross to net ratio top 5
€4,900 94%(2)
€3,015
Sale of 56 retail galleries Integration of Corio former assets Acquisition of Plenilunio (1) Total share, excluding duties (2) Excluding leasehold fee, if applicable
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OPERATIONAL EXCELLENCE: DEPLOYMENT OF RETAIL KNOWHOW IN SPAIN
Plenilunio (Madrid, Spain)
2
MERIDIANO: 2015 NET RENTS UP MORE THAN 25% VS 2013
Clubstore® implementation in 2015 with a hype food court, sky bar lounges and leisure area Regeneration of anchors 2015 net rents 27% over 2013 level
Footfall up 26% versus 2013 Good Choices®: energy consumption down 16% in 2 years. 100% electricity from renewable sources Footfall: 8.1M
Active asset management since 2013 to strengthen the center in the Canary Islands. Has become the place to meet on the island
Bershka Calzedonia Guess H&M Intimissimi
Kiko Levi’s Mango Massimo Dutti Oysho
Primark Pull & Bear Stradivarius Zara Tenerife, Spain
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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MAREMAGNUM: 2015 REVERSION AT 20% AND FURTHER VALUE CREATION TO UNLOCK
Clubstore® implementation scheduled for 2017-2018 A powerful magnet for international retailers 2015 reversion: +20.3% Good Choices®: Certified BREEAM In Use “Very Good”. 83% of visitors using public transports.100% electricity from renewable sources Footfall: 10.9M
Maremagnum is the favorite shopping and dining destination in downtown Barcelona for locals and tourists
Bershka Calzedonia Desigual H&M Hawaianas
Ikks Jack&Jones Lefties Mango Oysho
Pull&Bear Rituals Shana Starbucks Victoria's Secret
Barcelona, Spain
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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MAREMAGNUM: POTENTIAL EXTENSION (2017-2018) Extension of the center on the existing square Restructuring of the square on the cinemas building Enlargement and upgrade of the food offer Maremagnum today IMAX
Aquarium
Cinemas
Maremagnum after project completion Current square
Maremagnum shopping center
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
IMAX
Aquarium
New square
Extension
Maremagnum shopping center
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MAREMAGNUM: POTENTIAL MARITIME CONNECTION TO BEACHES The project: connection to link Barcelona City center to the beaches (Barceloneta) through the shopping center in order to capture additional footfall
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CAPITAL ALLOCATION: DISPOSALS AND DEVELOPMENT PIPELINE
Créteil Soleil (Créteil, France)
3
€4.7 BN IN ASSET DISPOSALS SINCE 2011 Gradual and constant upgrade of average portfolio quality Rollout of pure play retail strategy (Retail Only®) Ability to complete disposals with good timing and at NAV 172 shopping centers sold (in 7 countries) 12 office buildings sold full exit + portfolios of retail assets sold of the office property business in H1 2014 Portfolio of 126 Carrefouranchored galleries+ Portfolio of 4 Swedish centers
2,403 Portfolio of 4 Norwegian centers
Portfolio of 9 Dutch centers
844
698 539 187 2011
2012
2013 Shopping centers
Retail assets
2014
2015
Offices Data in million of euros, excluding duties
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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€9.7 BN DEVELOPMENTS AND ACQUISITIONS SINCE 2011 A total of €2.7 Bn invested (excl. Corio) in development pipeline and acquisitions
€1.3 Bn
€1.4 Bn
Corio: €7.0 Bn acquisition, including major assets: Porta di Roma, Hoog Catharijne, Grand Littoral, Boulevard Berlin, Campania, Le Gru, Grand Place, Alexandrium, Akmerkez…
Acquisitions Development pipeline (reported at cost) Oslo City (Norway)
St.Lazare (France)
Emporia (Sweden)
+7 Bn
Odysseum (50%, France)
Plenilunio (Spain)
948 652
458
408 205
2011
2012
2013
2014
2015 Data in million of euros
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016 Data in million of euros, excluding duties
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A PIPELINE FOCUSED ON EXTENSIONSREFURBISHMENT OF LEADING MALLS Extension-refurbishments offer the best risk/reward equation for both Klépierre and retailers PRIORITY GIVEN TO ENLARGING LEADING REGIONAL MALLS to generate further growth Major retailers are rightsizing their stores and concentrating on prime locations • Extensions provide them with the possibility to build on the success of existing locations • More incentive and visibility on returns to invest in refurbishing existing stores
Timing of extension in Klépierre’s hands – can be coupled with large scale re-tenanting actions
Committed and controlled pipeline breakdown(1) by type (% value) New developments 21%
High visibility on future rental income Extensions 79%
(1) Committed and controlled pipeline correspond to 2.0 billion euros of projects. Data as of year-end 2015.
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€3.6 BN PIPELINE OF PROJECTS TO FURTHER INCREASE EXPOSURE TO MOST DYNAMIC REGIONS (1/2) EUROPEAN UNION (28 countries) GDP per
capita(1)
Population(2) Demo. growth 2015-2040
Oslo
Walloon Brabant (Brussels) €27,500 508.1 M +3.0%
GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(4) Projects: L’esplanade
€35,300 1.1 M +21.7% +€131 M
GDP per capita(1) (3) Population(2) Demo. growth 2015-2040 Investment(4) Projects: Økernsenteret
€51,800 1.2 M +55.8% +€89 M
#19 highest GDP per capita in the GDP per €42,400 European Union Population(2) (5) 8.0 M Demo. growth 2015-2040 +11.2% Investment(4) +€510 M Projects: Hoog Catharijne, Alexandrium Randstad (Utrecht) capita(1)
Ile-de-France (Paris) GDP per capita(1) €49,000 Population(2) 12.0 M Demo. growth 2015-2040 +14.5% Investment(4) +€231 M Projects: Val d’Europe (phase 1 & 2), Créteil Soleil
Rhône-Alpes (Lyon) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(4) Projects: Grand’ Place, Givors
#8 highest GDP per capita in Europe Aquitaine (Bordeaux) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(4) Projects: Bègles Rives d’Arcins
€25,300 3.3 M +16.8% +€24 M Midi-Pyrénées (Toulouse)
Provence-Alpes-Côte d’Azur (Marseille)
GDP per capita(1) €26,500 Population(2) 3.0 M Demo. growth 2015-2040 +16.8% Investment(4) +€186 M Projects: Grand Portet, Odysseum, Blagnac
GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(4) Projects: Prado, Grand Vitrolles
€29,100 6.5 M +20.9% +€119 M
€28,000 5.0 M +5.8% +€247 M
(1) GDP in PPS. Source: Eurostat, 2014 (2) Source: Eurostat (3) Data for 2013 (4) Investment pipeline at cost (total share) (5) Population figure for Randstad
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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€3.6 BN PIPELINE OF PROJECTS TO FURTHER INCREASE EXPOSURE TO MOST DYNAMIC REGIONS (2/2) EUROPEAN UNION (28 countries) GDP per capita(1)
€27,500
Population(2)
508.1 M
Demo. growth 2015-2040
+3.0%
Piedmont (Turin) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Le Gru
€27,600 4.5 M +6.9% +€80 M
Lombardy (Milan) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Lonato
Catalonia (Barcelona) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Maremagnum
€34,300 7.4 M -5.9% +€45 M
€34,700 10.1 M +16.4% +€50 M
Emilia-Romagna (Bologna) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Gran Reno
€32,200 4.4 M +21.2% +€130 M
Madrid GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Plenilunio, La Gavia
€29,700 6.4 M -4.1% +€146 M
Lazio (Roma) GDP per capita(1) Population(2) Demo. growth 2015-2040 Investment(3) Projects: Porta di Roma
€31,400 5.7 M +17.5% +€90 M
(1) GDP in PPS. Source: Eurostat, 2014 (2) Source: Eurostat (3) Investment pipeline at cost (total share)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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BY H1 2018, KLEPIERRE WILL DELIVER 3 LANDMARK PROJECTS More than 35 million euros(1) in full year net rental income expected Prado (Marseille, France)
Val d’Europe (Paris region, France)
Hoog Catharijne (Utrecht, Netherlands)
An iconic and upscale center in the most affluent district for France second largest city
Expanding France fastest growing shopping mall to welcome international brands
The first phase of a large redevelopment project for the country’s number 1 retail hub
23,000 sq.m. 53 stores Anchored by Galeries Lafayette
+17,000 sq.m. 100,000 sq.m. 21 new stores and 4 mid-sized units o/w which Primark
42,100 sq.m. mall on completion Enhanced connection with Utrecht Central station (1) Total share basis
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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OKERNSENTERET: A 55,000 SQ.M. REGIONAL SHOPPING DESTINATION (150 STORES) FOR OSLO
Part of a 163,000 sq.m. urban development area including residential, office, hotel and leisure schemes
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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OKERNSENTERET PROJECT (2020)
ADD PICTURE
A state of the art mall for Norway’s capital
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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CRETEIL SOLEIL: BUILDING ON THE SUCCESS OF A LEADING MALL OF GRAND PARIS 10,200 sq.m. extension project
€76 M investment planned
Créteil Soleil
Prefecture
Key figures
City Hall
20.1 million visitors
Shopping center today
123,500 sq.m. Museum of Arts
Extension project
221 shops
Gate 23
Cinema
2 floors extension Will enhance the connection with metro line 8, linking the mall with Paris city center (5 million passengers used Créteil Préfecture metro station in 2015(1)) Will connect cinemas with a renovated and upgraded food court (1) Source: RATP
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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CRETEIL SOLEIL: EXTENSION OF GATE 23 TO THE METRO STATION (H2 2018)
Main entrance for the shopping center with close to 1/3 of shoppers
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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L’ESPLANADE: STRENGTHEN THE POSITIONS OF THE LEADING MALL IN SOUTHERN BRUSSELS 20,650 sq.m. extension project
€131 M investment planned
L’esplanade
Key figures
Existing shopping center footprint
7.6 million visitors
Extended and restructured footprint
55,800 sq.m.
Direct access from the railway station to the extension through escalators
132 shops
Direct link to the new intermodal hub with a new pedestrian bridge to the neighborhood New bordering Park & Ride (2,300 slots by year-end of 2016)
Addition 50 stores/restaurants and 4 mid-sized units A center even more embedded into the city and strongly connected to transportation network New regional express train to reach the center from Brussels in 30’ KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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L’ESPLANADE: EXTENSION (2020)
Clubstore® implementation / addition of large units / anchors
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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GRAND PLACE: REINFORCE POSITION AS THE TOP RETAIL SPOT FOR GRENOBLE REGION 15,600 sq.m. extension project
€39 M investment planned
Grand Place
Key figures 13 million visitors
Carrefour hypermarket
Extension restructuring
94,000 sq.m. 130 shops
Grand Place Light rail
Addition of a major anchor (8,300 sq.m.), 1 mid-sized unit, 14 shops and 10 restaurants to enhance connection with the two parts of the center
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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GRAND PLACE: EXTENSION (H2 2018)
PICTURE WITHOUT PRIMARK SIGNAGE TO BE ENCLOSED
Clubstore® implementation / addition of large units / anchors
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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LONATO: EXTENSION OF A SUCCESSFULL CENTER IN LOMBARDY (2019-2020) 9,000 sq.m. extension project
€50 M investment planned
Il Leone di Lonato
Key figures 6.2 million visitors 46,000 sq.m.
Extension
128 shops
Existing center
Extension-restructuration of the existing center
Upgrade of the retail mix with a renewed food and beverage offer Rightsizing of anchors
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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TWO LARGE PROJECTS FOR TWO LEADING CENTERS IN ITALY PORTA DI ROMA (ROME) Italy’s #1 shopping center +12,000 sq.m.
Food court enlargement and retail extension €90 M investment planned Completion: 2020-2022
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
LE GRU (TURIN) Piedmont’s leading mall +12,000 sq.m.
Extension-refurbishment of the 1st floor €80 M investment planned Completion: 2020-2022
Key figures
Key figures
18.3 million visitors
11.3 million visitors
92,400 sq.m.
78,500 sq.m.
240 shops
156 shops
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FINANCIAL MODEL: SOLID GROWTH, LESS RISK
Oslo City, Oslo (Norway)
4
A MODEL BUILT TO DRIVE CASH FLOW UP
Organic growth
Capital allocation
Re-tenanting
Disposals KLÉPIERRE CASH FLOW GROWTH
Rental reversion
Improvement in the Gross to Net ratio
Accretive acquisitions
Development pipeline
Economic environment Slow improvement in inflation from a very low point KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
Slight improvement in consumption trend
Further boost from interest rates
34
A SOLID TRACK RECORD Since 2010, Klépierre has delivered solid growth while reducing its financial leverage Upgrade in S&P credit rating: BBB+ A-
47.2% 45.8% 43.6%
1.99
1.99
2.07
2.16
2.07
43.6% 39.2%
1.96
37.6% 2010
2011
2012
2013
Net current cash flow per share (€)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
2014
2015
LTV
35
A MODEL ALSO DESIGNED TO LOWER RISKS Well diversified geographical footprint
Limited leverage LTV expected to remain at or below the current level Long-term debt Strong liquidity position High level of hedging
RISK PROFILE Sustainable payout ratio
Development pipeline and acquisitions Priority given to extensions Selective on greenfield M&A focus on prime assets
With dividend growth expected at least in line with net current CF / share
Disposals Of non core assets to limit cash flow volatility
Not only growing cash flow but also better cash flow KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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ENHANCED GROWTH/RISK PROFILE THROUGH ACTIVE PORTFOLIO ROTATION Retailer sales like-for-like growth April 2014: retail galleries disposal
4.40% 3.8%
2.60%
Retail galleries (sold to Carmila April 2014) had a 60 bp dilutive impact on 2013 LfL retailer sales growth
1.5%
+10.2%
+7.8% -3.4% LfL
2012
-4.4%
2013
2014
-0.4%
In 2014, the recent developments represented 7% of sales but counted 31% of LfL retailer sales growth (excluding extensions)
-0.7%
Capital allocation impact (new developments, acquisitions) LfL retailer sales growth (excluding extensions)
2015
(1)
Dilutive impact from retail galleries LfL retailer sales growth (including extensions)
Klépierre’s exposure to top-performing shopping malls has been increased through efficient capital allocation, boosting like-for-like growth (1) Includes Emporia, Corvin, Aqua Portimão, Saint Lazare, Le Millénaire and Plenilunio (in 2015)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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M&A GENERATES ATTRACTIVE IMMEDIATE RETURNS Recent acquisitions (3Y targeted returns*)
6.0% 5.7%
6.0%
5.7%
5.5%
Strong results achieved so far. Since acquisition, retailer sales up: 11% for Plenilunio 6% for Oslo City
Plenilunio and Oslo City acquired at NIY of respectively 5.25% and 5.0%, and expected to increase up to 6.0%
5.4% 5.2% 5.0%
2015
2016e
2017e
Plenilunio NIY
2018e
2019e
Oslo City NIY
While generating appealing returns, acquisitions offer today a much lower risk profile compared to greenfield developments * Returns based on the acquisitions price and the NOI forecasted
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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FURTHER COST OF DEBT IMPROVEMENT TO COME FROM ONGOING LOW INTEREST RATE ENVIRONMENT Drawn debt maturity schedule
Potential for refinancing at a lower cost - €600 M: 4.75% - €499 M: 3.25%
Recent refinancings completed
€615 M 4.0% €220 M 3.1%
€291 M 4.625%
€500 M 2.75%
€750 M 1%
€300 M: 4.625% €250 M: 5.448%
€630 M 1.75%
€500 M 1.875% €255 M 2.125%
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Assuming current market conditions, the cost of debt should decline below 2.0% by 2017, while the duration will be extended KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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HIGH VISIBILITY ON CASH FLOW GROWTH PROSPECTS
47.2%
Guidance
2.23 – 2.25
45.8% 43.6%
43.6%
2.16 2.07
2.07 LTV at current level or below
39.2% 1.99
1.99
2011
2012
37.6%
1.96
2010
2013
2014
Net current cash flow per share (€)
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
2015
2016
LTV
40
CONCLUSION
SOLID GROWTH – LESS RISK THROUGH BETTER OPERATIONS BETTER PORTFOLIO BETTER BALANCE SHEET
KLEPIERRE — 2016 INVESTOR DAYS — June 9, 2016
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THANK YOU
Klépierre, Retail Only®