Retail Investment Market PDF 2024

PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE Retail PROFESOR Andrea Rodríguez...

PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE Retail PROFESOR Andrea Rodríguez MRICS Aura REE ENERO 2024 Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 1 Índice 1. Retail Investment Market 2. REIT stock price/ Valuation 3. Terminology 4. Typologies. 5. Shopping centers 6. Retail Parks 7. Grocery RE sector 8. Analysis of the property/rental units 9. Methodology 10. Alternative Uses Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 2  Real Estate Investment Market 2021 Overview 2021 Overview - Real Estate still looks attractive relative to other asset classes. - Outperformed bonds over the last 5 & 10 years. - Increasing spread in returns 5Y forecast vs bonds and overvalued equities. FTSE World Government Bond Index Global: Multi asset class Performance (2012-2021) Source: Oxford Economics, Cornell University/Hodes Weill Source: Oxford Economics, Prequin Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 3  Real Estate Investment Market 2021 Overview - Rising allocation into RE sector globally. - With special growth in value Added & Opportunistic strategies driven by structural changes - Rise non-bank lending (Debt) also show rising numbers (20% share now vs 10% 10 years ago) as a result more regulatory capital in the financial sector. Target Allocation to Real Estate by Region (2021 vs. 2022) Global Real Estate dry Powder (2001-2021) Source: Oxford Economics, Cornell University/Hodes Weill Source: Oxford Economics, Prequin Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 4  Real Estate Investment Market 2022-2023 Overview - The global economic outlook has deteriorated - Economic uncertainty, elevated inflation, more rapid rate hikes, and rising government bond yields. - Expected capital value correction - yields moving out creating a greater spread between bond yields and NOI yields. Retail will see the smallest correction, despite headwinds in the form of e-commerce and declining real incomes, given retail capital values have stagnated in the pre-pandemic period and yields remain higher than the other sectors Office NOI yield to 10Y Bond spread CPI, 10Y Bond, BCE rates 12,00% 10,00% 8,00% 6,00% 4,00% 2,00% 0,00% 2021 01 2021 02 2021 03 2021 04 2021 05 2021 06 2021 07 2021 08 2021 09 2021 10 2021 11 2021 12 2022 01 2022 02 2022 03 2022 04 2022 05 2022 06 2022 07 2022 08 2022 09 2022 10 2022 11 2022 12 2023 01 2023 02 2023 03 2023 04 2023 05 2023 06 2023 07 2023 08 2023 09 2023 10 2023 11 2023 12 CPI SPN Bond 10Y BCE Source: Oxford Economics, Cornell University/Hodes Weill Source: INE, Bde Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 5  Real Estate Investment Market 2022-2023 Overview Green Street Commercial Property Price Index. Indexed in Sept 2017 Source: Green Street (Core Sector Average is equally-weighted between the Industrial, Office, Residential, and Retail sectors) Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 6  Real Estate Investment Market 2024 Outlook Policy rates Forecast - The role of bank lending and debt in corporate real estate (CRE) makes the sector particularly sensitive to movements in financial conditions. - The market is expecting rate cuts by central Banks starting 2H 2024. - Lower rates will make it less expensive for investors to finance new deals or refinance existing loans, which should support investment in the sector. Colonial & Merlin REITs Source: Oxford Economics Sources: AEW Research & Strategy, Oxford Economics, CBRE & Chatham Financial Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 7  Retail Investment Market - Investment in Europe fell by c. 57% by 3Q 23 YoY. - Widespread decrease across various asset classes, with the office sector continuing to face the most significant downturn. - Senior housing, hotels, and retail showed greater resilience than others. - Retail accounted for 17% of total European investment volumes, its largest share since 2016. Investment Volumes in RE Europe Investment Volumes by Asset class Europe Source: Savills Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 8  Retail Investment Market Why has Retail shown to be more resilient than other CRE? - The sector had already seen strong repricing over the past five years - Weaker investor confidence in other asset classes (office sector, particularly in light of its much tighter, or even negative, spread to debt costs) Retail is now real estate’s high yielding sector European prime average yields Source: Savills IM. MSCI Europe Annual Property Index Source: Savills Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 9  Retail Investment Market - Spanish retail investment picked up in ‘20 after a ‘19 at historic lows previous to decrease by 50% in ’21 one of years with the lowest values in the historical series. 2022 - Year started with good prospects: excess liquidity & strong investor demand at attractive yields. - Total retail investment volume in 2022 was €2 billion- +107% YoY. - Recovery on investment in SC & RP 2023 - The year have witnessed a restraint on investment triggered by interest rates hikes Yields in Retail (2012-2022) Investment Volumes Retail Spain (2013-2022) 2022 Volume excluding 2.1 Bn€ BBVA branches portfolio -71% YoY 540 M€ Source: Savills Research Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 10 Retail Investment Market Top Retail Transactions Spain 2023 Name Flag Type Buyer GLA Transaction Price (€) Initial yield Salera SC Resilient (Bacanati Investments) 55.059 171.000.000 7,7% Moraleja Green SC Indotek 30.200 75.000.000 Los Patios and Alameda (Malaga) & Los Barrios & Gran Sur (Algeciras) SC family office 26.895 75.000.000 Rivas Futura SC AEW Europe 36.447 73.100.000 6,3% Vistahermosa RP AEW Europe 33.363 56.000.000 6,3% Parque Comercial Las Cañas RP Mosaqui Capital 45.000 54.000.000 7,0% El Corte Inglés Marineda City SC Merlin Properties 45.000 45.000.000 Itaroa SC Cojaswinvest 37.675 45.000.000 4,5% CC Quadernillos SC BNP + Proudreed 30.000 27.000.000 9,0% Parque Comercial El Osito RP Iroko Zen 20.300 26.500.000 7,1% Marbell Center SC López Real Inversiones 10.000 25.000.000 Hipercor CC El Faro SC Castellana Properties 20.112 22.125.000 Viapark Almería RP Private investor 16.420 19.500.000 8,2% Parque Comercial de Nassica RP family office 10.000 18.400.000 Carrefour Nou Centre SP Serris Reim 15.078 18.000.000 Vilamarina SC Indotek 31.355 16.350.000 Planetocio SC Azora 21.600 16.000.000 8,5% Calle Serrano 30 HS Confidential 120 14.100.000 Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 11 REIT stock price Share Price premiums/discounts to NAV at a historical high Source: Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 12  REIT stock price Lar España’s premiums/discounts to NAV Source: Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 13 Valuation NAV discounts anticipating a drop in valuations motivated by decreasing rents and an increase in interest rates Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 14  Valuation: Income Like-for-like annual growth in GRI, in % o URW 2022 inflation passed on through 2023 indexation Source: S&P Global. URW financial reports Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 15  Valuation: Income Income Flow 2023 Footfall (Base 100 = 2019) Sales (Base 100 = 2019) 140 140 125 120 121 120 115 108 100 110 100 100 100 98 80 80 77 60 60 48 40 40 20 20 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Lar Castellana Properties Unibail-Rodamco-Westfield Lar Castellana Properties Unibail-Rodamco-Westfield Source: Crédit Agricole CIB, URW, Carmila & Klepierre financial reports Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 16 Valuation: Cap Rates Capitalization Rates Commercial real estate spreads vs. benchmark bonds across Europe Prime yields across Europe expanded in the recent quarters as relative attractiveness diminishes vs Bonds Benchmark leading to potential correction in asset valuation Source: RCA, AEW Research & Strategy Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 17 Valuation GAV sensitivity to rate hikes: Required NOI increase to offset a yield expansion 0,0% -5,0% -10,0% -15,0% -20,0% -25,0% -30,0% +25 bp +50 bp +75 bp +100 bp Source: Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 18  Valuation GAV. Valuation Lfl growth since H2 22 for REIT in EMEA vs SP& Global expectations 105 100 99 97 95 90 89 85 82 80 75 70 2019 2020 2021 2022 Lar Castellana Properties Unibail-Rodamco-Westfield Carmilla Klepierre What impact a yield decompression of 100bp would have on NAV assuming an initial 60% LTV? *initial yield of 4% Source: Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 19  Valuation Retail transaction prices in Spain dropped by 13% on avg. in 2020 before partially recovering between 2021-2022 despite ERV asking prices showing a weak performance. YoY ERV var. By Province €psqm Retail Sale Market ERV Retail Source: Brains https://brainsre.com/Home#/exploredata/01 Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 20  Terminology Anchor tenant: An anchor or magnet tenant is generally the tenant which occupies the largest area or generates the highest rental income and is the strongest attraction for customers Branch mix: Although there are no general rules for the correct branch mix, the success of a tenant community grows when it is possible to generate synergy effects. Catchment area: The area and population from which a retail property/project attracts its customers. Sales per m²: normally defined as the net turnover per m2 of sales area (p.a.). Tenant fit-out: This refers to physical changes to a shop in the landlord’s building, undertaken by the tenant at its own cost Net Initial Yield: Gross Rental Income – operating costs which affect liquidity / (property value or purchase price) + purchaser’s on-costs. Rent-to-sales-ratio / effort rate (also OCR): calculated from the ratio of rent and net turnover and is used as a benchmark. There are standard ranges which can be regarded as sustainable for the tenant. Abnormally high rent-to-sales ratios increase the risk of rental loss and/or risk of re-letting. GLA: Gross Leasable area WAULT: short for Weighted Average Unexpired Lease Term, is a measurement used in commercial real estate to quickly judge the value of contracted rents in a property, or more commonly, a portfolio of properties. It is one of the many key performance indicators (KPIs) used in the field. Footfall: the measurement of the number of people entering a shop or shopping mall. Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 21  Typologies Shopping centers: Multitenant properties. Managed as a single unit. >10,000 sqm Retail Park: Multitenant properties. Managed as a single unit. In contrast to a shopping centre, a retail park is not based on the principle of providing an extensive range of products via a high number of individual retailers, but is based on the appeal of fewer large. Medianas Stand-alone retail: Tenants is free standing building could be anything from restaurants, supermarkets, furniture stores, bowling alleys or electronic stores. High-street retail: high street is the primary place for businesses to locate themselves in a town or city. Standard Retail : small-scale shops with a limited and basic range of mainly everyday products. Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 22  Reinventing the Shopping Centers Retail sales in Spain by sales channel (2021) Retail sales in Spain by sales channel (2022) 10% 18% 72% 68% 13% 19% Online Shopping centers High street Source: Savills, Forrester Analytics Shopping Centre openings in Spain Source: Savills, AECC (Asociación Española de Centros Comerciales) Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 23 Reinventing the Shopping Centers Getting creative with leasing Historically, retailers and retail real estate owners have worked on a fixed lease rental model. acceleration in online sales and pandemic- related closures have increased cost pressures. owners and tenants should work together to align interests and share business risks: hybrid rent model, which includes both fixed and variable components Reworking the tenant mix: Experimental & Destination Retail Contemporary shopping centres need to drive footfall beyond just “buying stuff ” becoming what is being called “Destination Places” Higher flexibility in order to accommodate changing store formats, different tenant profiles and new uses of social spaces Relevant mix transformations to give additional space to categories more immune to e-commerce Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 24 Reinventing the Shopping Centers Source: Carmila Investor Presentation (Nov.23) Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 25 Reinventing the Shopping Centers More as a service provider and less like a space provider Merging brick & Mortar with online Services promoting online/offline integration services (Implementing strategies like buy-online-pick-up-in-store (BOPIS). Supply Chains Opportunity to leverage physical stores and use it as fulfilment centres in order to support growing e-commerce operations. Active Management - Technology Monitoring of footfall and movement patterns. Core focus on sustainability and climate Throughout the epidemic, there has been an increase in attention to ESG Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 26 Reinventing the Shopping Centers Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 27 Reinventing the Shopping Centers More CAPEX investment More intensive management More difficult to asses future CFs Spanish shopping centers av. rent €/sq.m./month 18-19 €psqm mo Source: Savills Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 28 Retail Parks: standout performers of the pandemic crisis Out of town and out of doors is a winning combination - Shoppers feel safer in outlets visited by car rather than public transport - Larger,: social distancing and ventilation - most resilient and defensive of the three primary retail formats Winning Commercial mix they are stuffed with the sorts of shops that have boomed during the pandemic: supermarkets, pet-supply stores and those selling everything needed for the home. Better placed than their high-street counterparts to survive the rise of internet shopping - white goods, furniture and furnishings want to see and touch them before buying -Vast shop floors and good road access: they can double as distribution centres– Click & collect Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 29 Retail Parks: Spanish overview Retail Park’s weight evolution Good fundamentals 77% 75% Developing sector High occupancy rate 18% 20% Less intensively managed 3% 3% 2% 2% Shopping Center Retail Park Leisure Center Factory Outlet Strong tenant profile 2022 2023 Retail Parks Openings Longer-term contracts Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 30  Retail Parks: Spanish overview Rents Yields Average rent €psqm/mo by RP type 19 17 10 Super Prime Retail Park Prime Retail Park Avg Retail Park Average rent €psqm by tenant profile Prime Main cities Secondary cities 5,5% 5.5-6.5% 6.5-7.5% Source: Savills Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 31  The grocery RE sector emerging as a secure and defensive sub-sector within the wider retail investment market. During COVID-19 investor interest for grocery anchored real estate assets surged as a resilient investment option during the crisis. A surge in grocery sales that has left many grocery anchors in a strong financial position regarded as more resistant to the rise of e-commerce than other retail sub-sectors Supermarket share in total retail investment (%) Main indicators of food chains in Spain 45% 40% 39% 35% 30% 30% 25% 24% 20% 15% 14% 13% 10% 9% 7% 5% 0% 2016 2017 2018 2019 2020 2021 2022 Source: Savills Aguirrre Newman Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 32  The grocery RE sector emerging as a secure and defensive sub-sector within the wider retail investment market. Before 2020-2022 2023 - high levels of corporate ownership - Operator concentration - sitting on fairly major cash - Need for scale - Financial strength reserves - Fragmented ownership - Grocery operators to raise capital. - capitalising on the downward pressure on capital values. Source: Savills Aguirrre Newman Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 33 The grocery RE sector emerging as a secure and defensive sub-sector within the wider retail investment market. Investment strategies - Core / Sale and leaseback has been a popular route for some to gain access to core product - Value added / shorter lease terms for refurbishment and rent renegotiation purposes Asset/by/asset Supermarkets Portfolios Small cities 5 10 Leases structure: Medium sized cities 7 13 - Longer leases (3 to 5 years longer on avg. across Europe in Major cities 9 16 comparison to non-food leases. Spain / 7 to 25 years - 10 20 30 - Often without break clauses Hypermarkets Small cities 3 6 - Typically linked to inflation, but indexation hurdles apply Medium sized 5 10 cities - Grocery retailers typically target 2% to 3% of their annual Major cities 6 12 turnover as rent. 0 5 10 15 20 Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 34  Sale & Leaseback Buyer – Seller = Landlord - Tenant Benefits for sellers Benefits for buyers -The chance to convert equity into cash and avoid debt -attractive long-term investment with inflation restriction protection -The owner can receive more capital than they would with traditional financing: 100% Mortgage -Certainty on future cash flows -Keeps the asset in the company balance sheet – financial -Low management: triple net contracts liability - Interesting returns: demand from yield-driven -liquidise assets tied up in property and re-invest the money investors will continue to support the availability of elsewhere: opportunity cost of capital is a vital consideration low-cost capital in allocating company resources efficiently if a company is generating a 15% return from capital Factors to consider invested in the core business, it is inefficient to retain a property with a market yield of 5%. In this scenario, the company would generate an - Strength of the tenant additional 10% annually by reallocating the property investment back - Length of the lease: 15-20 years into the business. - Triple net rents & sustainable rent acc. To the business - Location & condition – RESIDUAL VALUE – - Secure attractive prices and terms – long term leased impact in NPV investments with committed tenants appeal to both purchasers and - - Yields 4.5%-7.0% (según sector) sellers Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 35  Sale & Leaseback Main Transactions Activo buyer Fecha de Adquisición Precio adquisición yield Media Market Pierre Plus (AEW) feb-18 12.255.000 6,36% Makro Encore+ (Lasalle Investments) jul-18 38.000.000 5,10% Makro Encore+ (Lasalle Investments) jul-18 21.000.000 10 Carrefour supermarkets Barings ene-20 73.300.000 7 Family Cash supermarkets Corum AM mar-20 33.000.000 7,12% 27 Eroski supermarkets W. P. Carey Inc. nov-20 85.500.000 5,55% 37 Cash & Carry Sagax nov-20 150.000.000 6,50% Portfolio Invesco (6 hipers Eroski) Pradera nov-20 130.000.000 6,25% 27 Mercadona supermarkets LCN Capital Partners nov-20 180.000.000 5,20% 27 Mercadona supermarkets MDSR (fondo israelí) jun-21 100.000.000 Source: Brains Factors: tenant profile & length Source: Savills Aguirrre Newman Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 36  Sale & Leaseback Correlation between yields & Wault Source: Savills Aguirrre Newman Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 37  Analysis of the property/rental units Space concepts and floor plan designs/spatial flexibility/functionality ◼ Property size (total GLA) ◼ Tenants (anchor and/or major) Dimensions, mix and layout of space Disruptive room components: columns, stairs, lifts, etc. ◼ Licenses for specific businesses  Display window fronts, room depth ◼ Site size  Efficiency of floor plan design (flexibility of layout, ratio of usable area to ancillary space etc.) ◼ Accesses & communications Number of floors - % basement (license) ◼ Pedestrian affluence Extension opportunities Assessment of third party use potential Customer base (Claudio Coello) Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 38  Analysis of the property/rental units Retail in Claudio Coello 91. Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 39 Analysis of the property/rental units Retail in Serrano 36- Goya 15. What would be the value of the retail premises as of today? Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 40 Analysis of the property/rental units Highstreet Madrid. https://brainsre.com/Brains/MarketTrends#/exploredata Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 41  Valuation Methodology 1. Cost approach* Business models: owner vs operator 2. Sales comparison approach uses recently sold comparable properties and asking prices of currently listed properties as data points to determine the current value of a similarly appointed property. 3. Income capitalization approach “As is” vs Vacant Possession Value Determines value by taking into account the market rent that a property can reasonably be expected to generate – Capitalize the Net Operating Income at a Cap Rate Snapshot of the value of a Direct capitalization (cap rate) property at a given moment – Present Value of a Perpetuity Discounted cash flow (Cap rate + discount rate) Overall view of the total returns on the investment on an annualized basis. 1. Choose the time horizon when do I use 2. Estimate the Cash Flow - NOI 3. Estimate Residual Value each of them? 4. Estimate the Discount rate Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 42 Methodology a) Commercial warehouse, single-tenant, long-term contract, market rent b) Commercial warehouse, single-tenant, contract expires in 2 years, under-rented c) Commercial warehouse (1,000 sqm), single-tenant, medium-term contract, over- rented Contractual rent is 8,000 €/month whereas the market rent is 6,500 €/mo. WAULT is 10 years and the cancellation fee amounts 15% of the total rental amount pending to receive. Closing yields for the typology and location 6.00%. What is the value of the property assuming triple net lease? d) Shopping center, 2nd year of operation, occ. 70%, step rents, bonifications. e) Shopping center stabilized, structural vacancy aligned with vacancy in the SC as well as rents Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 43 Methodology. Income capitalization approach ¿ How to estimate NOI? Property's gross rental income (GRI) – Operating expenses = NOI Operating expenses include items like maintenance costs, insurance expenses, and services. Property tax is also considered an operating expense. It does not include any debt service (such as your mortgage payments) as an expected cash flow calculation would, and it also doesn't include any capital expenses you incur.** - property taxes and insurance Min. 5% Avg. 25% Max. 30%** - capped service charge arrangements - property/center/marketing/facility management costs - compulsory landlord contributions to marketing funds - ongoing letting fees - repairs & maintenance - vacancy costs Leakage GRI NOI Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 44 Methodology. Income capitalization approach What are the Different Types of Commercial Real Estate Leases? - Net leases - Single Net Lease: a tenant pays their pro-rata share of the property’s taxes in addition to base rent - Double Net Lease: a tenant to pay both the property taxes and insurance, in addition to base rent. - Triple Net Lease: gold standard for real estate investors. all operating expenses associated with the property ownership are passed through to the tenant. This substantially reduces the ownership risk for a landlord and alleviates much of the burden of active management - Bondable Net Lease: Often used in sale-leaseback arrangements. Is a truly passive investment. Property owners pass 100% of all management, expense, and ownership responsibilities to the tenant. - Gross leases: tenant strictly pays a fixed rental rate each month - Percentage leases: tenant pays a fixed base rent plus a percentage of their business’s gross revenue from sales. Percentage leases are common in Shopping centers. Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 45  Methodology. Income capitalization approach ¿How to estimate the Cap rate? Capitalization Rate = Net Operating Income / Current Market Value The capitalization rate equals a property's net annual rental income divided by the current value of the property. It ignores the impact of financing Cap rate= risk-free rate + risk premium/market risk The risk premium would vary depending on: Age, location, and status of the property Property type Tenants’ solvency and regular receipts of rentals Term and structure of tenant lease(s) Macroeconomic fundamentals of the region as well as factors impacting tenants’ businesses Source: Savills Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 46 Alternative Uses: The 2nd life of the retail Residential, hotel, storages, common spaces…. “Capital canario compra el edificio Maya en Santa Cruz para hacerlo hotel” invertirá diez millones para transformarlo en un establecimiento de cuatro estrellas “Cada vez más locales comerciales se convierten en viviendas en Madrid” (2021) “Crece la presión en Barcelona para convertir locales comerciales vacíos en viviendas” (Feb- 2021) Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 47 Shopping centers Property Information Escenario de Estabilización: Physical information Rentas de mercado: son mis rentas de - Quality of buildings; mercado? (histórico del centro comercial, BBDD - Gross Leasable Area (GLA) centros comerciales similares, asking rents de - Condition of buildings; centro comerciales similares, Información pública - Levels of occupancies or vacancies; SOCIMIs) - Land use; Avg passing rents psqm 24,6 -Surplus or excess land; 19,3 - Extraordinary features; 15,4 - Parking; and 8,1 Rent Rolls Merlin Castellana Lar Carmila Properties - Rental contracts by tenant - Expire dates, break options, WAULT Son las rentas sostenibles a medio plazo para - Annual sales Tenant Mix el perfil de tenant? Effort rate - Recoverable SC Vacancy Service charges Cual sería una ocupación razonable? Vacancy - Leased area structural de CCC similares, histórico del CC - Bonifications Effort rate - Step rents (OCR – Occ. Los costes de explotación están alineados a - Variable rents Cost Ratio) mercado? Y la fee de gestion? Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 48 Shopping centers Tasa de Esfuerzo (rent-to-sales-ratio) OCR % 14,8% Type Effort rate 11,7% Grocery 2-5% 10,0% 10,8% 9,9% Restaurants 5-10% Clothing retailer 5-10% Gym 10-25% Cinema 18-22% Lar Castellana Carmila Merlin URW Properties Management Fee: 2-7% (depending on the size) Gastos 2020 % €psqm mo Mantenimiento ascensores 51.000 8,39% 0,26 Service charges: 2-7 €psqm Mantenimiento general 22.400 3,69% 0,11 (depending on the size and SC type) Reparaciones 1.200 0,20% 0,01 Mantenimienot PCI 8.600 1,41% 0,04 Agua 12.000 1,97% 0,06 Electricidad 44.000 7,24% 0,23 Limpieza 108.500 17,85% 0,56 Vigilancia 79.500 13,08% 0,41 Reciclaje 26.000 4,28% 0,13 Seguros 9.600 1,58% 0,05 Tributos no estatales (IBI) 126.500 20,81% 0,65 Trbutos autonómicos (IGEC) 97.000 15,96% 0,50 Tributos no estatales (IAE) 21.500 3,54% 0,11 Total 607.800 100,00% 3,12 Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 49  📨 Muchas gracias [email protected] Pág PROGRAMA DE ESPECIALIZACIÓN EN REAL ESTATE 50