Fashion Arena – the No. 1 outlet centre in Prague

Transcription

Preliminary announcement of financial
statements 2013/14
Illustration:
Alfa Laval,
office building,
Aalborg, Denmark
Contents
1.
The Group’s results
•
Financial highlights and key ratios
•
2013/14 at a glance
2.
Execution of announced strategy
•
Strategic goals – execution of announced strategy
3.
Market conditions
4.
Project portfolio
•
Property development
•
Asset management
5.
Financial issues
6.
New sales and outlook
•
New sales
•
Outlook for 2014/15
TK Development – Preliminary announcement of financial statements 2013/14 – 2 April 2014
2
1. The Group’s results
Development of town centre
Køge, Denmark
27,500 m²
3
Financial highlights and key ratios
2009/10
(DKKm)
Financial highlights:
Net revenue
1,384.9
Gross profit/loss
200.5
Operating profit/loss (EBIT)
57.5
Profit/loss before tax and writedowns, etc.
53.8
Profit/loss before tax
39.4
Profit/loss
25.4
2010/11
2011/12
2012/13
2013/14
Results before tax, excluding
discontinuing activities:
602.4
256.0
127.2
48.2
74.2
73.6
359.8
195.8
65.5
-1.2
14.3
27.0
632.3
-139.5
-241.1
-0.3
-326.0
-493.3
407.0
163.9
71.5
-28.8
-35.0
-49.0
Balance sheet total
Project portfolio
Equity
4,377.3
3,249.5
1,593.4
4,622.0
3,424.7
1,866.0
4,639.5
3,498.1
1,876.4
4,009.3
3,030.9
1,389.7
3,839.6
2,986.0
1,553.7
Cash flows from operating activities
Net interest-bearing debt, end of year
-582.8
2,178.9
-182.7
2,170.2
-78.8
2,244.9
45.6
2,206.1
55.6
1,890.9
Key ratios:
Return on equity (ROE)
Solvency ratio (based on equity)
Price / book value (P/BV)
1.6 %
36.4 %
0.5
4.3 %
40.4 %
0.5
1.4 %
40.4 %
0.3
-30.2 %
34.7 %
0.4
-3.4 %
40.5 %
0.4
Results before tax
Of which results of
discontinuing activities amount to
Total
-35.0
-38.9
3.9
4
2013/14 at a glance
•
Results before tax, excluding discontinuing activities, DKK 3.9
million, in line with expectations.
•
Results before tax of discontinuing activities, DKK -38.9 million,
consist of:
• DKK -13.3 million from current operations
• DKK -1.0 million from losses recognized on completed sales
• DKK -24.6 million from impairment losses and value
adjustments of remaining assets.
•
•
The Group’s balance sheet total has been reduced by DKK 170
million compared to the year before, and equity has increased by
DKK 164 million
• A capital increase with gross proceeds of DKK 230.5
million was completed in September 2013.
2000
100%
1500
80%
1000
36.4%
40.4%
40.4%
34.7%
60%
40.5%
500
40%
20%
0
0%
31 Jan 10 31 Jan 11 31 Jan 12 31 Jan 13 31 Jan 14
Equity, DKKm
Solvency ratio,%
Net interest-bearing debt has been reduced by DKK 315 million
compared to the year before and amounts to DKK 1,891 million at
31 January 2014.
5
2013/14 at a glance
•
•
The portfolio of cash-flow-generating properties amounts to DKK
2,066 million at 31 January 2014.
• The ratio of cash-flow-generating properties to total net
interest-bearing debt has developed positively in the
amount of DKK 249 million during the year under review.
Handover of second phase of retail park in Danderyd in Sweden
to Commerz Real.
•
Sale of 80 % of shopping centre project in Frýdek Místek,
Czech Republic
• Fee income for letting and construction management and
related services.
•
Handover of first-phase apartments of the Group’s residential
project in Bielany, Warsaw, Poland
• 97 % of the units have been sold.
3000
2500
2000
1500
1000
500
0
31 Jan 10
31 Jan 11
31 Jan 12
31 Jan 13
31 Jan 14
Net interest-bearing debt, DKKm
Investment properties and completed projects, DKKm
6
2013/14 at a glance
•
Start-up of second phase of the residential project in Bielany,
is being prepared:
• Will comprise about 300 residential units and service
facilities.
• Building permit has been granted.
• Pre-construction sale was started in December 2013
• Is progressing better than expected.
• Pre-reservations received for 27 % of units.
• Construction expected to begin in spring 2014.
•
Sale of two German investment properties.
•
Overheads reduced by 8.5 % relative to 2012/13.
• Cost-reducing measures have been implemented to reduce the overheads by
around 20 % relative to 2012/13, with half of the reduction deriving from the
discontinuation of activities in Germany, Finland and the Baltic States.
• Full impact in the course of 2014/15.
•
Agreements regarding new sales, please see section ”New sales”.
is being
7
2013/14 at a glance
•
TK Development is planning to construct a new shopping
centre of about 29,800 m² in Esbjerg, Denmark.
•
The process of obtaining permits for the project has been
delayed because the project must undergo a validation and
approval procedure to ensure safe railway operations.
•
The timeline has been verbally agreed with Banedanmark.
•
The validation process is expected to continue until after the
end of the summer 2014.
•
Construction startup is anticipated in autumn 2014.
•
Discussions are being held with PFA regarding the sale of a share of the project at its
current stage.
BROEN, shopping centre, Esbjerg
8
NAV per share
At 31 January 2014
DKK per share
ASSETS
LIABILITIES
NAV
1,015
30
(1.6)
(39.1)
(-20.3)
(15.8)
1,554
309
(-3.0)
296
1,662
(17.0)
436
(4.4)
15
156
3,840
1,990
(37.5)
(3.1)
25
20
(1.7)
167
(10.3)
35
(1.0)
3,684
40
95
45
10
5
0
9
2. Execution of announced strategy
Sillebroen
Frederikssund, Denmark
25,000 m²
10
Strategic goals
March 2013: Revision of strategy and business model, including adjustment of market
focus.
The below strategic goals were set with the aim of executing the adjustments within
a period of two years:
The activities will be limited to Denmark, Sweden, Poland and the Czech
Republic.
The portfolio of projects not initiated (plots of land) is to be reduced from
about DKK 1.1 billion to about DKK 500 million.
The balance sheet total is to be adjusted, with a solvency ratio of about 40 %.
Overheads are to be reduced by around 20 % relative to 2012/13.
Financing costs are to be normalized as a result of the initiatives
implemented.
11
Activities in Germany, the Baltic States, Finland and Russia are to be phased
out.
•
Market focus on
Denmark, Sweden,
Poland and the
Czech Republic
•
•
•
Germany
•
The German activities have been reduced through the sale of
investment properties.
•
The branch office in Berlin has been closed down, and the employees
have left their positions.
•
The Group owns two remaining investment properties, two minor
plots of land and a share of a minor shopping centre.
Baltic States
•
Retail park, DomusPro, Vilnius, conditionally sold to BPT and to be
handed over to the buyer after the reporting date.
•
Closedown of the office awaits clarification of the next steps in
respect of the Group’s two remaining plots of land.
Finland
•
The branch office in Helsinki has been closed down, and the
employees have left their positions.
•
The Group owns two minor plots of land.
Russia
•
The Group owns a minor project in Moscow, consisting of
Scandinavian-style dwellings that are used for rental.
•
Efforts will be made to sell this project once market conditions have
normalized.
Balance sheet total –
discontinuing activities:
(DKKm)
31 Jan. 13
31 Jan. 14
Decline
425.4
367.7
13.6 %
DomusPro
31.1.14
92.9
12
•
Reduction of
portfolio of
projects not
initiated
(plots of land)
•
Cost trimming
The portfolio of projects not initiated (plots of land) is to be reduced
from about DKK 1.1 billion (March 2013) to about DKK 500 million over
a two-year period.
• Reduction through the sale of land and initiation of projects.
• Progressing satisfactorily and according to plan for many of the
projects.
• For a few projects the process is taking longer than expected.
• Management believes it will still be possible to implement the
balance sheet adjustment within the planned two-year period.
Projects not initiated:
(DKKbn)
31.1.13
31.1.14
Reduction
1.1
1.0
-0.1
Overheads are to be reduced by around 20 % with half of the reduction
deriving from the discontinuation of activities in Germany, the Baltic
States and Finland.
• Cost-reducing measures have been implemented. Full impact is
expected to be achieved in the course of 2014/15.
13
Solvency ratio of
about 40 %
• The balance sheet total is to be adjusted, with a solvency ratio of about 40 %.
• After implementation of the capital increase in September 2013, this strategic
goal has been met. The solvency ratio stood at 40.5 % at 31 January 2014.
• The solvency will be further strengthened through completion of the agreed
sale of the Fashion Arena Outlet Center in Prague.
Lower financing
costs
• Financing costs are to be normalized as a result of the initiatives implemented.
• In connection with the implementation of the capital increase, the Group has
reached agreements for a reduction of the interest payable on several major
credits.
• The Group is currently negotiating interest rate reductions for other credits.
14
3. Market conditions
Residential Park, Bielany,
Warsaw, Poland
Phase 2, 297 units
15
Market conditions
•
The market conditions are improving for the
Group
• Rising consumer confidence
• Expectations for financial growth,
although varying in strength from
country to country.
• Effect is not yet reflected in private
consumption, which is also expected to
rise in the years to come.
Macroeconomic expectations
Denmark
GDP growth
(% y/y)
Unemployment
(%)
Sweden
Poland
2014e 2015e 2014e
Czech Rep.
2014e
2015e
2015e 2014e 2015e
1.3
1.7
2.8
3.5
3.6
4.2
1.8
2.2
5.6
5.5
7.9
7.6
12.6
11.8
6.8
6.6
Source Denmark, Sweden and Poland: Nordea, March 2014.
Source Czech Republic: The European Commission, European Economic Forecasts, Winter 2014.
•
Some uncertainty, although diminishing, persists in the property markets
• The decision-making process of tenants, investors and financing sources remains
lengthy and carefully considered.
•
Easing in project financing restraints
• Depending on type, location and status, including letting and sales.
• Lenders continue to require relatively high equity financing, but there also
appears to be some relaxation of these requirements.
16
Market conditions
- Tenants
Retail
• Focus on right location.
• Rental level for well-situated projects is expected to remain fairly stable in the
period ahead.
• Good amount of interest in well-situated projects.
• Robust national and international branded retailers still wish to expand.
• Local tenants are having a difficult time.
Offices
•
•
•
•
Residential
property sector
Vacancy rate generally increasing.
Major difference between primary and secondary locations.
Reasonable demand for fairly new premises with a practical layout.
Rental level for primary locations is expected to remain relatively stable.
• A vast number of people are moving to major towns and cities.
• Demand for new dwellings, either owner-occupied dwellings or rental
dwellings, depending on the individual market.
• Increased demand for housing has led to increasing rental levels in the rental
housing market.
• These higher rental levels are expected to be maintained in the period to come.
17
Market conditions
- Investors
In general
• Growing optimism.
• Good amount of interest in investing in real property.
• Institutional investors wish to increase the share of property investments in
their portfolios:
• Confident that real property will deliver stable competitive returns
going forward.
• Investor interest is currently changing in two areas:
• Also interest in projects outside the capital cities.
• Investors seeking to play an active role in projects development, thus
assuming a higher risk against anticipated higher return.
Retail
• Focus on right location.
• Relatively low rates of return for prime locations.
• In Management’s opinion, investors are prepared to assume a slightly higher
risk than seen recently.
18
Market conditions
- Investors
Offices
• Prime-location office properties with stable tenants are attracting great
investor interest.
• Return requirement for prime-location offices is at the same level as before
the economic and financial crisis.
• In Management’s opinion, investors are prepared to assume a slightly higher
risk than seen recently.
Residential
property sector
• Great investor interest, focused on locations in capitals and major towns and
cities, where substantial population growth is presently being recorded.
• Vast migration towards major towns and cities has led to increased demand
for residential properties.
• Increasing price level for owner-occupied dwellings and low return
requirements from investors.
• The market for developing housing for sale to private owner-occupants has
again become interesting.
19
4. Project portfolio
BROEN, shopping centre
Esbjerg, Denmark
29,800 m²
20
1
Business area: Property development
Development potential in m²
•
Comprises the following markets: Denmark,
Sweden, Poland and the Czech Republic.
•
Development potential of 405,000 m².
•
Total carrying amount of project portfolio is
DKK 1,111 million.
Denmark
Sweden
Poland
Czech Rep.
21
1
Business area: Property development
Property development = DKK 1,111 million (carrying amount)
In progress (DKK 216 million)
Alfa Laval
Ahlgade
Amerika Plads
Aalborg, Denmark
Holbæk, Denmark
Copenhagen, Denmark Stockholm, Sweden
Offices
6,000 m2
Shopping-street
property/housing
3,100 m2
Underground car park
16,000 m2
Barkarby Gate
Not initiated
DomusPro retail park
Vilnius, Lithuania
Retail park
20,000 m2
Retail park
11,100 m2
BROEN, shopping centre
Esbjerg, Denmark
Shopping centre
29,800 m2
Not initiated, continued (selected) (DKK 887 million)
Amerika Plads (lots A & C)
Stuhrs Brygge
Østre Teglgade
Copenhagen, Denmark
Aalborg, Denmark
Copenhagen, Denmark Gothenburg, Sweden
Kulan commercial district
Offices/residential
24,800 m2
Mixed
72,000 m2
Offices/residential
32,700 m2
Jelenia Góra
Residential Park, Bielany
Jelenia Góra, Poland
Warsaw, Poland
Shopping centre/services Shopping centre
24,000 m2
45,000 m2
Residential/services
48,350 m2
22
2
Business area: Asset management
•
Comprises the following markets:
Denmark, Sweden, Poland and the
Czech Republic.
•
Total value of portfolio amounts to
DKK 1,934 million.
•
Overall the footfall and centre revenue are
developing positively, however weak
development in Danish retail trade in 2013
and weak private consumption. Local
tenants are having a difficult time.
•
Conditional agreement on the sale of the
Fashion Arena Outlet Center.
•
Focus on maturing the individual properties
and selling them.
Carrying amount, broken down by country
Denmark
Czech Rep.
Poland
23
2
Business area: Asset management
Asset management = DKK 1,934 million (carrying amount)
Asset management
Futurum Hradec Králové
Galeria Tarnovia
Sillebroen
Hradec Králové
Czech Republic
Tarnów
Poland
Frederikssund
Denmark
28,250 m²,
20 % ownership interest
16,500 m²,
25,000 m²,
Fashion Arena
Prague
Czech Republic
Galeria Sandecja
Nowy Sącz
Poland
Retail Park,
Most, Czech Rep.
Retail park,
Aabenraa, Denmark
25,000 m²,
Shopping-street prop.
Brønderslev, Denmark
Ringsted Outlet,
Denmark
17,300 m²,
The return on the carrying amount of the properties is 6.7 %.
Based on full occupancy, the return on the carrying amount is expected to reach 7.9 %.
24
5. Financial issues
Shopping centre,
Jelenia Góra, Poland
24,400 m²
25
Financial issues
•
The cash flows from operating activities amount to DKK 55.6 million for the year against
DKK 45.6 million in 2012/13.
•
Capital increase
• Capital increase completed in September 2013.
• Gross proceed of DKK 230.5 million.
• A substantial portion of the proceeds has been used to reduce debt.
•
Conditional sale of the Group’s 75 % stake in the Fashion Arena Outlet Center in Prague,
the Czech Republic
• The sale is expected to be completed in April 2014.
• Will substantially strengthen the Group’s financial platform.
•
Since 31 January 2013, agreements on the refinancing of project credits totalling DKK 1.2
billion have been entered into.
•
Credit facilities of DKK 0.1 billion only are due to expire prior to 31 January 2015
• These are expected to be refinanced prior to maturity or to be repaid in connection
with the sale of projects.
26
6. New sales and outlook
Fashion Arena Outlet Center,
Prague, Czech Republic
25,000 m²
27
Conditional sale of Fashion Arena
Outlet Center, Czech Republic
•
In February 2014, the Group entered into a
conditional agreement for the sale of its 75 %
stake in the outlet centre.
•
The outlet centre has a total floor space of
about 25,000 m2 and comprises 110 stores.
•
The overall centre has been sold to Meyer
Bergman at a price of EUR 71.5 million.
•
The sale is expected to be completed in April
2014.
•
The sale generates a minor profit compared
to the carrying amount, reduces the balance
sheet total by about DKK 400 million and
makes a substantial contribution to the
Group’s free cash resources.
The sale results in:
• Generation of a minor
profit compared to the
carrying amount.
• Reduction of balance
sheet total by about DKK
400 million.
• A substantial contribution
to the Group’s free cash
resources.
Outlet centre, Prague, Czech Republic
28
Sale of Barkarby Gate, Stockholm,
Sweden
•
In June 2013 the 20.000 m² retail park
project Barkarby Gate (Stockholm,
Sweden) was sold based on forward
funding.
•
The buyer of the project is a fund
managed by Cordea Savills.
•
Construction started in August 2013
immediately after the option to
purchase the land for the project was
exercised.
•
The current occupancy rate is 94 %.
•
Opening is scheduled for autumn 2014.
Sold based on
forward funding
Retail park, Barkaby Gate, Stockholm, Sweden
29
Sale af DomusPro, Vilnius, Lithuania
•
In August 2013 the about 11,100 m² retail
park project DomusPro (Vilnius, Lithuania)
was conditionally sold.
•
The buyer of the project is BPT Baltic
Opportunity Fund, which is managed by BPT
Asset Management.
•
The first phase of about 7,500 m² has an
occupancy rate of 85 %, with supermarket
operator RIMI as the anchor tenant.
•
Constructed started in August 2013, and the
first phase opened in March 2014.
•
Handover to the buyer will take place after
the reporting date.
• Sold in advance
• BV 31.1.14:
DKK 92.9 million.
Retail park, Vilnius, Lithuania
30
Sale of Alfa Laval, office building,
Aalborg, Denmark
Sold in advance
•
In February 2014 TK Development entered into a
conditional agreement for the sale of a 6,000 m²
office project in Aalborg.
•
The project has been let to the international Alfa
Laval Group.
•
The project has been sold to PensionDanmark at
a total price of DKK 126 million.
•
Construction started in March 2014, and the
project will be handed over to the investor in
June 2015.
Alfa Laval, office building, Aalborg, Denmark
31
Other new sales
•
Sale of 80 % of the ownership interest of a shopping
centre project in Frýdek Místek, Czech Republic, to a
business partner.
• TK will maintain a 10 % ownership interest.
• 14,800 m².
• Fee income for letting and construction
management, etc.
• Construction started in autumn 2013.
• Opening is scheduled for end-2014.
•
Agreements regarding the letting and sale of several
minor retail project have been concluded.
Shopping centre, Frýdek Místek, Czech Republic
32
Outlook for 2014/15
• Management anticipates positive results of about DKK 40 million before
tax, excluding discontinuing activities, for the 2014/15 financial year.
• The timing and phase-out of the discontinuing activities are subject to
major uncertainty. The activities are in the process of being discontinued,
and the Group risks incurring further losses before the phase-out is
complete. Therefore, the results before tax of the discontinuing activities
have not been included in the outlook for 2014/15.
33
Disclaimer
The expectations mentioned in this presentation, including earnings
expectations, are naturally subject to risks and uncertainties, which may
result in deviations from the expected results.
Various factors may impact on expectations, as outlined in the section
”Risk issues” in the Group’s Preliminary announcement of financial
statements 2013/14, particularly the valuation of the Group’s project
portfolio.
34

Fashion Arena – the No. 1 outlet centre in Prague

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