2010 ANNUAL EVALUATION MEETING
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2010 ANNUAL EVALUATION MEETING 07 April 2011. 1. 3. 2. > In the developed economies, final demand is unlikely to demo n strate a strong recovery in the near future. The world needs anchor countries growing at a dynamic pace. These countries should have the following characteristics:

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2010 ANNUAL EVALUATION MEETING 07 April 2011

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2010 annual evaluation meeting 07 april 2011

2010 ANNUAL EVALUATION MEETING

07 April 2011

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2010 annual evaluation meeting 07 april 2011

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2010 annual evaluation meeting 07 april 2011

>In the developed economies, final demand is unlikely to demonstrate a strong recovery in the near future.The world needs anchor countries growing at a dynamic pace. These countries should have the following characteristics:

1.Young population to support growth and spending

2.Low debt burden to feed credit channels

3.Diversified economy to generate employment opportunities and long term growth

4.Capital accumulation to finance high savings or growth

>Turkey meets with the first three out of these four criteria

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2010 annual evaluation meeting 07 april 2011

Economic Highlights

Real GDP Growth

Fiscal Balances as % of GDP

Source: EIU (February 2011)

Source: EIU (December 2010)

Interest Rates

Consumer Price Inflation

Source: Turkish Statistical Institute - Central Bank of Turkey (Feb. 2011)

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Economic highlights

Economic Highlights

ConsumerConfidence

Industrial Production and Unemployment

Source: Turkish Statistical Institute(January 2011)

Source: Turkish Statistical Institute (February 2011

Exchange Rate

ISE National 100 Index

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Source: Central Bank (February 2011)

Source: CentralBank ( February 2011)


2010 annual evaluation meeting 07 april 2011

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2010 annual evaluation meeting 07 april 2011

MCAP & NAV of the REIC Sector

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Relative post ipo performance of torunlar reic s share

Relative post-IPO performance of Torunlar REIC’s share

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Strategy highlights

Strategy highlights

  • Strategy focus

    • Primary focus on development of shopping malls

      • Increased focus on mixed-use projects

    • Creating ‘life centres’ with extensive leisure and entertainment avenues

    • Focus investments in urban centres with limited supply

      • Developing residential neighbourhoods in cities with good connectivity to metro etc.

    • Opportunistic investments in non shopping mall related projects

  • Development portfolio

    • Successful track record of liaising with local municipalities in contributing to and working on urban transformation projects

    • Leverage the development platform for performing value-addingtasks such as land development, funding and identify potential growth areas of development

    • Opportunistic development of other asset classes

    • Leverage track-record of JV development

      • Access to attractive development opportunities

      • Diversification of risk

  • Asset management

    • Active asset management targeting occupancy optimisation and rent increase

    • Active refurbishment and extensions in-line with increased demand and evolving consumers and market trends

    • Tenant rationalisation opportunities

      • Ensure appropriate shop and tenant mix

      • Leveraging Torunlar Group’s reputation and network of contacts to attract known Turkish/international  tenants

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2010 annual evaluation meeting 07 april 2011

Key investment highlights

  • 2nd largest listed retail property company in Turkey

  • Portfolio value: TRY3.1 bn (2010)

  • Gross rental income: TRY 58.5 m(2010)

  • Market capitalisation: TRY1,5 bn(31/03/2011)

  • Listed on 21.10.2010 on Istanbul Stock Exchange

  • Diversified investment portfolio

  • 5 cities, Istanbul added in October 2010

  • Portfolio ‘primarily’retail (76% shopping centres)

  • Resilient operations: 98% occupancy rate (2010)

  • Financial strength

  • Healthy financial structure with leverage at 24.4 %

  • Stable shareholder structure with 25.16 % free float

GAV Breakdown (2010)

Total GAV:TRY 2.7 bn (USD 1.7 bn)

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Breakdown of portfolio value

Breakdown of Portfolio Value


Shopping mall portfolio

Shopping Mall Portfolio

Zafer Plaza (SM)

Korupark (SM)

Ankamall+ Crowne Plaza (SM+Hotel)

Deepo Outlet Centre (SM)

Occupancy 98%

Occupancy 96%

Occupancy 100%

Occupancy 99%

Occupancy 99%

Istanbul

Black Sea Region

(Karadeniz Bölgesi)

Samsun

Bursa

Ankara

Marmara Region

(Marmara Bölgesi)

Eastern Analtolia Region

(Doğu Anadolu Bölgesi)

Kutahya

Izmir

Central Anatolia Region

(Iç Anadolu Bölgesi)

Aegean Region

(Ege Region)

Southeastern Anatolia Region

(Güneydoğu Anadolu Bölgesi)

Mugla

Antalya

Key portfolio information

Mediterranean Region

(Akdeniz Bölgesi)

Torunlar REIC’s presence

Additional target cities

Torium Istanbul (SM)


Footfall and turnover torunlar reic performed stable and strong in 2010

Footfall and turnoverTorunlar REIC performed stable and strong in 2010’

*Korupark, Deepo, Ankamall figures declared by the tenants.

Zafer Plaza and Torium are excluded.

**Newly opened Torium excluded

Source: Council of Shopping Centers Turkey


Resilient retail operations through active hands on management

Resilient retail operations through active hands-on management.

(1)72,26% share. Receives rental income.

(2) 14,83% share. Receives dividend income

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Shopping centers by value

Shopping centers by value

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Financial highlights 2010

Financial highlights 2010

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Income statement

Rental revenues relate to the rental income from operating shopping malls.

Other revenue consists of electricity sales income, excavation site rent income, construction site rent income and sales of other services and goods.

2

1

Other income/expenses is mainjy driven by the net gains from fair value adjustments on investment property.

3

Share of profits of associates are minority stakes in assets held by Torunlar REIC. The latter in counterparty receives dividends from those assets. The split is into ‘dividends from associates’ which are considered as recurring item and the gain in fair value adj. of Investment Properties’ are considered non recurring.

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4

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Financial income includes gains and loss of financial instruments as well as the sale of share of profits from associates.

Note: Sales are accounted when properties are physically transferred to buyers1 EBIT includes operating profit and share of profits from associates excluding any effect of fair value changes2 EBITDA = EBIT + Depreciation expenses ³ Excludes fair value gains/losses from “Investment Properties” and financial instruments

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2

2.6x

2.8x

2.3x

2009

2008

2010

Balance sheet (‘000 TL)

Inventories consist of construction cost of housing units (completed and in progress) as well as the cost of land used for these residential projects. In addition lands for future development of residential projects are also included in this line-item

1

2

Investment properties are properties held for long-term rental yields and/or for capital appreciation. This also includes landbank on which asset to be held for long term usage is planned.

1

Interest coverage ratio

Net debt / Assets

Net debt / EBITDA

27.2%

21.8%

8.4x

7.6x

10.7%

6.2x

2008

2009

2008

2009

2010

2010

*EBITDA Net interest expense

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Financing ratios strong financing ratios

Financing ratios‘Strong financing ratios’

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  • Total revenues are boosted +93% by the residential sales of Nishistanbul project and rental revenues of Torium shopping mall opened in end-October.

  • EBITDA is 22.8% lower due to one-off IPO, consultancy and donation to Bursa Metropolitan Municipality as well as increasing real estate taxes and advertising expenses.

  • Net gain from fair value adjustment is 65.8% lower, driven by the significant contribution of Mall of İstanbul land and Torium land in 2009. This item accounts for 77.7% of net profit in 2010 vs 91% in 2009.

  • Despite the contribution of deposit interest income and declining interest expense, the bottom level is 60% less than in 2009.


2010 annual evaluation meeting 07 april 2011

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Evolution of the projects m2

Evolution of the Projects (m2)


2010 annual evaluation meeting 07 april 2011

GLA Breakdown by City

Istanbul grasps a larger share by 2014, overtaking Bursa.

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Future outlook

Future Outlook

  • The company will capitalise on its expertise to further extract operational efficiency from its shopping malls under its management.

  • All the projects in the pipeline will start this year and be completed by 2013-2014.

  • Total sales in 2011 are expected to reach TRY 150 million with 40% derived from residential sales.

  • No new opening or delivery will take place in 2011. The major part of sales revenue will come from shopping malls including Torium which will operate full year.

  • As EBITDA of shopping malls is at around 80%, company EBITDA is expected to be higher than in 2010 at TRY 90 million.

  • For the upcoming years, 10% annual LFL growth is forecast in rental revenues.

  • The company will chase further acquisition opportunities with its favorable cash position.

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2010 annual evaluation meeting 07 april 2011

Ownership

Torunlar REIC (72.26%)

  • The Property is located at the most central part of the city

  • Close to the metro station, on major public transportation routes and at the junction of intercity roads

  • The property includes a movie theater with six screens and an amusement park for children and teenagers

  • In 2000, Zafer Plaza was selected "The Best Shopping Centre" by the AMDP, Shopping Centres and Retail Centres Council

  • Majority of rents (80%) are USD denominated

Operational date

1999

Leasable are (m²)

23,449 (REIC share 16,944)

Occupancy (m²) (as of date)

98% (as of December 2010)

Number ofstores

125

4% anchors (30% of GLA): Migros, YKM, Bimeks and Boyner

Anchor tenants

Breakdown–tenants (GLA)

Breakdown–income

Appraisal value

TL143.2mm (US$92.6mm)¹

2.0 years

Average lease term as of Dec-2010

Kiosk 0.5%

Leisure goods 1%

Average NOI (per TL/m²/month)

TL38.4

Leisure goods 1%

Restaurant 2%

Restaurant 2%

Fashion 37%

Leasehold / Freehold status

Freehold

Kiosk 3%

Jewellery 3%

Rental income (Dec 2010)

TL10.8mm

Jewellery 5%

Fashion 43%

Footwear 3%

Health beauty 5%

Home 5%

Home 5%

Service 5%

Footwear 5%

Food café 6%

Service 7%

Health beauty 7%

Food café 8%

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Dept & Anchor 15%

Dept & Anchor 33%


Korupark shopping mall

Korupark shopping mall

Torunlar REIC's porfolio overview

  • The Property is located at the most central part of the city

  • Close to the metro station, on major public transportation routes and at the junction of intercity roads

  • The property includes a movie theater with six screens and an amusement park for children and teenagers

  • In 2000, Zafer Plaza was selected "The Best Shopping Centre" by the AMDP, Shopping Centres and Retail Centres Council

  • Majority of rents (80%) are USD denominated

Ownership

Torunlar REIC (100%)

Operational date

H2 2007

Leasable are (m²)

71,267

Occupancy (m²) (as of date)

96% (as of December 2010)

Number of stores

178

(39% of GLA): Tesco, Koçtaş, Beymen, C&A, Boyner and Electro World

Anchor tenants

Breakdown–tenants (Income)

Breakdown–tenants (GLA)

Appraisal value

TL540.5mm (US$349.6mm)¹

Storages 1%

Average lease term as of Dec-2010

2.7 years

Kiosk 2%

Kiosk 0.5%

Fashion 41%

Dept & Anchor 44%

Average NOI (per TL/m²/month)

TL34.4

Leisure goods 4%

Jewellery 1%

Restaurant 4%

Storages 2%

Leasehold / Freehold status

Freehold

Health beauty 4%

Restaurant 2%

Jewellery 4%

TL36.8mm

Rental income (Dec 2010)

Health beauty 2%

Home 5%

Food 3%

Footwear 7%

Home 3%

Service 7%

Footwear 4%

Food 8%

Fashion 26%

Service 4%

Dept & Anchor 14%

Leisure goods 9%

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2010 annual evaluation meeting 07 april 2011

Korupark Residences Phase III

Ownership

Torunlar REIC (100%)

Estimated start of construction

2011

Estimated date of completion

2012

Estimated operational date

2012-2013

Estimated investment

TL87.3mm (US$56.5mm)

Appraisal value

TL50.4mm (US$32.6mm)¹

Leasehold / Freehold status

Freehold

Number of residential units/GSA

643 units / 120.000 m2 resi,

9.659 m2 office

  • The property, adjacent parcel to Korupark phase I & II, is a luxurious housing settlement that includes residences and office units

  • For Korupark Residences Phase III, sales will be denominated in Turkish Lira

Current status

Under project development

Map of Korupark

Korupark Residences Phase I & II

Korupark Residences Phase III

Korupark Residences Phase I & II

Korupark Residences Phase III

Korupark Shopping Mall

  • Note: Exchange rate US$/TL=1.5460 as of December 31, 2010¹ Prime appraisal report (based on the CMB standards as of December 31, 2010)

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2010 annual evaluation meeting 07 april 2011

Leisure goods 1%

ATM & Kiosks 1%

Heath Beauty 1%

Heath Beauty 1%

ATM & Kiosks 2%

Leisure goods 1%

Jewellery 2%

Jewellery 3%

Fashion 62%

Fashion 70%

Service 2%

Service 3%

Home 3%

Home 3%

Restaurants 6%

Food 4%

Food 8%

Restaurants 5%

Footwear & Access. 11%

Footwear & Access. 10%

Torunlar REIC's porfolio overview (cont'd)

Antalya Deepo outlet mall–Antalya

Breakdown–income

Breakdown–tenants (GLA)

  • Antalya Deepo is the biggestoutlet in the Mediterranean region.

  • The property is located close to the Antalya Airport

  • The mall attracts annual foot traffic of c.5 mm

  • For Antalya Deepo, majority of rents are denominated in EURO

  • Zoning of this region is expectedto be approved in 2011.

  • Deepo Antalya is not directly held by Torunlar REIC, but is instead

  • held by a subsidiary which is 100% owned by Torunlar REIC

Source: Company as of Dec 31, 2010

Ownership

Torunlar REIC (100%)

Operational date

Leasable area (m²)

October 24, 2004

18,069

Occupancy (%) (as of date)

99% (as of Dec 2010)

Antalya Deepo extension project

Number of stores

90

Anchor tenants

LCW, Ayakkabı Dünyası, Mudo City, Collezione, Sarar, Aydınlı Group

Appraisal value

TL180.5mm (US$116.7mm)¹

Average lease term as of Dec-2010

3.1 years

Average NOI (per TL/m²/month)

TL48.2

Leasehold / Freehold status

Freehold

Rental income (Dec 2010)

TL13.3mm

Ownership

Torunlar REIC + Hastalya

Estimated start of construction

July 2011

Leasable area (m²)

Estimated date of completion

March 2012

26,651

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Estimated operational date

March 2012

Estimated investment

TL31.2mm (US$20.2mm)

Leasehold / Freehold status

Partially freehold, partially leasehold from Hastalya

Current status

Under zoning process


2010 annual evaluation meeting 07 april 2011

Ankamall shopping mall + Crowne Plaza hotel–Ankara

  • Ankamall is located in Yenimahalle, in the centre of Ankara. The shopping mall is considered to be the largest in Ankara and third largest in Turkey

    • Ankamall is owned by Yeni Gimat which was formed as a cooperative with over 1000 investors, and in which Torunlar REIC currently has 14.83% stake, making it the largest shareholder as of December 31, 2010

  • The property includes the Crowne Plaza Hotel which is a 21–storey building with 263 rooms

  • For Ankamall, the rents in Phase 1 are denominated in Turkish Lira, while the rents in Phase 2 are denominated in USD

Dividends - Torunlar REIC share (TLmm)²

Ownership

Yeni Gimat in which Torunlar REIC holds (14.83%)

Operational date

Leasable area (m²)

1999¹

88,421³ (REIC’s share 13,112)

100% (as of December 2010)

Occupancy (%) (as of date)

Number of stores

318

Number of rooms

263

Migros, Koçtaş, Tepe Home, Electro World, Boyner, Mudo City, Marks&Spencer, LCW

Anchor tenants

TL137.9m (US$89.2mm)³

Appraisal value (REIC share)

Leasehold / Freehold status

Freehold


2010 annual evaluation meeting 07 april 2011

Mall of Istanbul–Istanbul

Ownership

TorunlarREIC(100%)

Estimated start of construction

H12011

Estimated date of completion

H2 2013

Estimated operational date

H1 2013

Estimated investment

c.TL479.3mm (US$310mm)

Number of residences/ GSA-GLA

1.200 units/ 135.000 m2 GLA ret,

116.000 m2 GSA residence

30.000 m2 GLA office

Appraisal value

TL637.3mm (US$412.2mm)¹

Leasehold / Freehold status

Freehold

Current status

Under project development

Breakdown–Area¹ (GLA/GSA)

  • Mall of Istanbul is a mixed-use project with a large shopping mall development along with residential, officeunits

  • It is expected to be one of the largest mixed-use projects in Turkey

  • Planned to be built with 135.000 m² GLA enriched with 16,000 m² kids entertainment, 7,200 m² snowpark, cinema complex and conference / performance hall¹

  • Mall of Istanbul is well connected to the city centre through the D100 and TEM highway. In addition, the site is located within 5km of the airport

  • For the Mall of Istanbul, rents will be denominated in USD. Sales will be denominated in Turkish Lira

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Torunlar reic s portfolio overview cont d

Torunlar REIC’s portfolio overview (cont’d)

Torium Istanbul shopping mall–Istanbul

Ownership

Torunlar REIC

Start of construction

H2 2008

Date of completion

October 30th, 2010

Operational date

October 30th, 2010

Number of stores

168

Appraisal value*

TL556.9mm (US$360.3mm)¹

Leasehold / Freehold status

Freehold

GLA / GSA

95.280 m2 GLA retail

5.318 m2 GSA resi

MSU & small stores35%

  • Torium is a mixed-use project of retail and residential use

  • It is located at the centre of high density residential settlements along one of the two major highways of Istanbul

  • The shopping mall provides a broad range of leisure and entertainment facilities

  • Majority of rents at the shopping mall are denominated in EUR

  • Residential sales are expected to bedenominated in Turkish Lira

Residential5%

Café/ Rest.5%

GLAsplit¹ (‘000m²)

GLA/GSA split¹ (‘000m²)

Others4%

Anchor 25%

Hypermarket 10%

Retail95%

Electronic stores4%

Entertainment 15%

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Torunlar reic s portfolio overview cont d1

Torunlar REIC’s portfolio overview (cont’d)

Torun Tower–Istanbul

Ownership

TorunlarREIC (100%)

Estimated start of construction

2011

Estimated date of completion

2013

Estimated operational date

2013

Estimated investment

c.TL128.3mm (US$83mm)

Appraisal value

TL237.7mm (US$153.8mm)¹

Leasehold / Freehold status

Freehold

Current Status

Under project development

Breakdown–Area (GLA)

Other4%

  • The property is located at the city centre in one of the most expensive commercial districts of Istanbul

  • It also has a subway connection

  • 40 floor high-rise tower is planned

  • The building is planned to be a landmark for the city with very modern architecture and construction technology

  • The Property is planned as a mixed-use project with office and retail units

  • For Torun Tower, leases will be denominated in USD

Office96%

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2010 annual evaluation meeting 07 april 2011

Location

Istanbul

Torunlar REIC (65%), Ascioglu (30%), Kapıcıoğlu (5%)

Ownership

Estimated start of construction

H2 2011

Estimated date of completion

H2 2014

Estimated operationaldate

H22014

Estimated investment

c.TL463.8mm (US$300mm) *

Land acquired

Revenue Share (45%)

Land area (m²)

34.640

Sellable area (m²)1

GSA 55.978 m2 resi, 53.771 m2 office

GSA 13.870 m2 retail

Mixed–useproject

Format

Name of architect

Emre Arolat Architects

P O R T F O L I O   O V E R V I E W 

Number of residences

593

Appraisal value

TL505.4mm (US$326.9mm)¹*

Leasehold / Freehold status

RevenueShare

Current status

Under project development

  • Mecidiyeköy is a mixed-use project with 1,200 unit residential complex, along with office and retail units.

  • Its’ location is in the city center, on the land where the ex-stadium of Galatasaray is located.

  • The project is planned on three high-rise blocks of 40 storey's each. Two of the blocks will be used as residential, one block will be developed as A- Class Office Tower.

  • For the Mecidiyeköy Project sales will be denominated in Turkish Lira.

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1.Torunlar share


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Existing property performance

Existing property performance

Munich once again holds the top spot

for performance of existing

investments, Istanbul following very

close. London and Paris also retain top

positions.

2010 was a year of stabilisation, both in

terms of valuation and the occupier side.

A clear focus on asset management to

maintain the value of existing assets.

Secondary property is a “ ticking time

bomb”.

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New property acquisitions

New property acquisitions

The answer is stock selection, not

markets or cities. All markets have

opportunities at the right price.

Istanbul ranked top spot.

“The biggest challenge is to find “good”

new investments, i.e. core assets in top

locations with strong tenants”

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City development

City Development

Further signs of recovery in sentiment

Istanbul, with strong underlying

fundamentals, again, stands out

followed by London and Munich

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2010 annual evaluation meeting 07 april 2011

Torunlar REIC: COMPETITIVE ADVANTAGES

One of the leading real estate developers in Turkey

1

Well established performance track record of development and asset management

2

Excellent growth potential

3

Professional management team with long-term local experience and deal sourcing capability

4

Turkey has strong long term economic fundamentals supporting RE growth

5

Stable financial structure and flexible tax efficient REIC regime

6

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