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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Globalworth Real Estate Investments Limited | LSE:GWI | London | Ordinary Share | GG00B979FD04 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.02 | 0.77% | 2.63 | 2.60 | 2.66 | 2.60 | 2.54 | 2.54 | 1,960 | 16:35:10 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Agents & Mgrs | 242.49M | -54.15M | -0.2148 | -12.10 | 658.12M |
From Jul 2022 to Jul 2024
TIDMGWI
RNS Number : 1405U
Globalworth Real Estate Inv Ltd
24 March 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
24 March 2023
Globalworth Real Estate Investments Limited
("Globalworth" or the "Company")
Audited Results for the year ended 31 December 2022,
Posting of Annual Report and
Notice of AGM
Globalworth, the leading office investor in Central and Eastern Europe, announces that further to the publication on 3 March 2023 of its Condensed Unaudited Financial Results, it is pleased to release its Annual Report and Audited Consolidated Financial Results for the year ended 31 December 2022 ("2022 Annual Report").
Key Highlights for the year ended 31 December 2022
-- Total combined portfolio value remained effectively unchanged at EUR3.2 billion (0.2% higher compared to 31 December 2021).
o Combined standing commercial properties at year-end were appraised at EUR2.9 billion. Like-for-like properties marginally lower at EUR2.8 billion (1.3% decrease compared to 31 December 2021), with new facilities acquired or completed in 2022 adding EUR75.5 million in standing commercial portfolio value.
-- Focused development program in select high-quality projects.
o Romania; delivered 6 new logistics facilities offering 104.4k sqm of GLA, with 3 logistics facilities under development which are expected to have a total GLA of 30.0k sqm.
o Poland; two mixed-use properties under refurbishment/repositioning.
-- Acquired the first small business units logistic facility in Romania (Bucharest), with a total area of 7.1k sqm.
-- Overall standing portfolio footprint net increase of 103.3k sqm (+7.9% compared to 31 December 2021) to 1.4m sqm of GLA in 71 standing properties.
-- Leasing transactions of 206.9k sqm of commercial space at an average WALL of 4.4 years, despite continued challenging market conditions.
-- Average standing occupancy of 85.6% (85.9% including tenant options), 2.9% lower compared to 31 December 2021.
o Addition of 7 properties with an average occupancy of 54.2%, some of which are in the lease-up phase, negatively impacted the overall combined standing occupancy.
o Like-for-like standing occupancy adjusted for Warta Tower in Warsaw (property held for sale and now effectively vacant), of 90.5% (+0.2% compared to 31 December 2021).
-- Total annualised contracted rent up by 3.0% to EUR189.2m
o Like-for-like annualised commercial contracted rents in our standing commercial portfolio increased by 1.7% to EUR177.5 million at the end of 2022, mainly as effect of rent indexation.
Hot Features
Premium
-- Rate of collections invoiced and due remained high at 99.0% for 2022.
-- Net Operating Income ("NOI") was lower by 3.2% compared to 2021 at EUR139.7 million.
-- EPRA earnings increased by 21.2% to EUR71.6 million (2021: EUR59.1 million), as prior year EPRA earnings were impacted by the exceptional one-off costs associated with the cash offer for Globalworth's shares initiated in May 2021.
-- Adjusted normalised EBITDA decreased by 3.2% to EUR126.0 million (2021: EUR130.2 million), due to lower NOI, partially offset by the positive impact of the lower recurring administrative and other non-operating expenses.
-- Net loss of EUR16.1 million (2021: net profit of EUR47.5 million) due to revaluation losses of EUR89.5 million in 2022 compared to the EUR5.7 million revaluation losses in 2021.
-- Cash dividend paid to shareholders of EUR0.27 per share in 2022.
-- Preliminary EPRA Net Reinstatement Value (NRV) of EUR1.8 billion, or EUR8.29 per share, decreasing from EUR8.66 at 31 December 2021 mainly due to revaluation losses on the property portfolio.
-- High liquidity of EUR163.8 million (vs EUR418.7 million at 2021 year-end) plus available liquidity from committed undrawn facilities of EUR300 million; LTV 42.7% at 31 December 2022 (vs 40.1% at 2021 year-end).
-- Sustainability:
o EUR2.6 billion in 53 green certified properties.
o 45 properties were certified or recertified with BREEAM Very Good or higher certifications during the year.
o Committed to reduce our carbon footprint based on a science-based approach to align with a 1.5(o) C trajectory.
o Issued the third sustainable development report and our second Green Bond Report.
o Maintained low-risk rating by Sustainalytics and our MSCI rating to "A".
o Contributed to over 25 social initiatives in Romania and Poland.
Availability of 2022 Annual Report and Notice of AGM
The 2022 Annual Report is available on Globalworth's website, www.globalworth.com under the Financial Reports and Presentation section.
The Annual General Meeting of the Company ("AGM") will be held on 19 June 2023 at 10.00am British Summer Time at Anson Court, La Route des Camps, St Martin, Guernsey GY4 6AD. The notice of this year's AGM will be included in a separate circular to shareholders, will be issued to shareholders and notified via RNS at least 10 clear days before the meeting, and will also in due course be available on the Company's website in accordance with AIM Rule 20.
For further information visit www.globalworth.com or contact:
Enquiries
Stamatis Sapkas Tel: +40 732 800 000
Chief Financial Officer
Panmure Gordon (Nominated Adviser and Broker) Tel: +44 20 7886 2500
Dominic Morley
About Globalworth / Note to Editors:
Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Poland and Romania. Globalworth acquires, develops and directly manages high-quality office and industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by over 260 professionals across Cyprus, Guernsey, Poland and Romania, a combined value of its portfolio is EUR3.2 billion, as at 31 December 2022. Approximately 96.4% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of over 690 national and multinational corporates. In Poland Globalworth is present in Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice, while in Romania its assets span Bucharest, Timisoara, Constanta, Pitesti, Arad, Oradea and Targu Mures.
For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.
CEO Statement
Adapting our strategy to tumultuous macro and property markets
"At Globalworth we focus on providing our business partners with high- quality spaces in Poland and Romania that are sustainable, technologically advanced, and tailored to their unique needs. Our premium spaces and services are geared towards ensuring the success of our tenants' and our business.
Dennis Selinas
Chief Executive Officer
Dear Stakeholders,
As we move forward, we remain committed to improving our services and providing a platform for growth that is sustainable and at the forefront of building technology. At Globalworth, we strive to offer our business partners and their employees the best possible experience, and we are proud to be a trusted partner for their ongoing success.
Navigating Our Business Through Challenging Market Conditions
The year 2022 began with a sense of hope that, after two years of the COVID-19 pandemic, the world was ready to start returning to normality. However, fresh challenges soon surfaced, largely linked to macroeconomic/geopolitical risks and the war in Ukraine. These hurdles have given rise to supply chain disturbances, hikes in fossil fuel prices, increased costs for transportation and construction materials, and higher levels of inflation and interest rates, which have put a strain on consumer incomes and businesses. As a result, the outlook for everyone has become more uncertain.
As a result, the economic outlook in our regions has been revised, with slower growth predictions for 2022 and beyond than had been previously anticipated. However, a recession in the Eurozone is not currently expected. Another positive note is that inflation appears to be gradually returning to more normalised levels over the next 18-24 months.
Amidst these challenging circumstances, Globalworth's performance demonstrated remarkable resilience, as we adhered to our steadfast commitment to the "local landlord" approach to managing our business. This involved undertaking a series of carefully calibrated initiatives including:
-- Strategic investments in existing and new high-quality properties -- Managing our portfolio to preserve and enhance operational performance -- Maintaining a flexible capital structure that can adapt to evolving market conditions
At the core of all our endeavours was an unwavering commitment to providing a safe and healthy environment that nurtured both work and leisure for our tenants and for our communities.
We are confident that the extensive work carried out by our team throughout 2022, while not fully reflected in this year's financial results, has served to consolidate our position as the pre-eminent landlord in our home markets of Poland and Romania and will set us to a trajectory towards even greater performance as the markets gradually return to a more normalised state in the future.
At this juncture, and despite my relatively short tenure at Globalworth, I would like to extend my sincere gratitude to all of our team members for their resolute and optimistic attitude, unwavering commitment and efficiency, as well as our shareholders, partners and communities for their steadfast support, all of which have enabled us to achieve results of which we can be rightfully proud.
Evolving Real Estate Portfolio
Our portfolio predominantly comprises Class "A" offices. Nonetheless, following the delivery of our Class "A" Globalworth Square office and in response to changing market dynamics, we have in the past 12 months shifted our development focus towards high-quality logistics facilities in Romania as well as the ambitious redevelopment of two mixed-use properties in Poland.
Throughout the course of 2022, we successfully completed the construction of six logistics facilities, which collectively encompassed 104.4k sqm of GLA. Five of these facilities represent subsequent phases of development within existing established projects which are owned directly by us, or through JV partnerships.
In addition, we also established a new strategic partnership with an experienced local developer with the aim of investing in the lucrative "small business units" segment of the logistics and warehouse facilities market in Romania. Under this partnership, in which we hold a controlling majority (75%) stake, we acquired our first small-business-units project (standing) in the north-western part of Bucharest, and we are in the process of developing a second project which is executed in phases and is located in the north-eastern part of the capital city.
As of 31 December 2022, Globalworth's high-quality combined standing portfolio reached a total of 1.4m sqm. The Company anticipates continued growth in 2023, with the finalisation of two mixed-use properties in Poland and two industrial facilities in Romania, adding another 104.9k sqm of GLA.
Globalworth's investment programme has also included investment in existing properties aimed at preserving and enhancing their value, generating long-term income and offering best-in-class real estate space to our business partners. As a result, the Company continues to (re)invest in all of its properties, improving the quality of our buildings and services across the board.
Overall, the addition of new properties to Globalworth's standing portfolio has resulted in a combined portfolio value of EUR3.2 billion as at 31 December 2022, representing a +0.2% increase compared to the end of 2021.
Our Leasing and Occupancy
The ability to lease spaces within our portfolio is a critical factor in both our short- and long-term success. In 2022, despite the persistently challenging market conditions, we were able to successfully negotiate the take-up or extension of 206.9k sqm of commercial space, within an average WALL of 4.4 years. It is worth noting that the majority (52.4% by GLA) of our leasing activity involved new take-up of available spaces.
As at 31 December 2022, the standing occupancy of our combined commercial portfolio was 85.6% (85.9% including tenant options), representing a 2.9% decrease from the previous 12 months. However, this decline can be primarily attributed to the addition of several new properties in our portfolio, most of which are in their lease-up phase, and Warta Tower in Warsaw which is now effectively vacant and is being sold.
-- Like-for-like standing occupancy of our combined commercial portfolio adjusted for Warta Tower was 90.5% (+0.2% compared to 31 December 2021).
Despite the uncertainty in the market and the cautious approach of tenants, headline market rental levels across our portfolio remained relatively stable. We attribute this to the quality of our properties, our active asset management initiatives, and our commitment to sustainable development.
The total annualised contracted rent of our combined portfolio increased by 3.0% to EUR189.2 million, compared to year-end 2021, with like-for-like annualised commercial contracted rents in our combined standing commercial portfolio increasing by 1.7% to EUR177.5 million.
It is noteworthy that most of our tenants are large multinational or national corporations and their operations within our portfolio had no significant exposure to Ukraine or Russia. Therefore, our business has not been directly impacted by the war. Nevertheless, it is important to recognise that no business is entirely immune to the war's effects on the macro economy through its impact on inflation and interest rate transmission mechanisms.
In both Poland and Romania, the COVID-19 pandemic has resulted in increased construction costs and reduced office development activity thereby limiting new supply. We anticipate that this will result in fewer new, high-quality offices being available for lease in central locations over the next few years.
Furthermore, the disparity between A-grade properties with robust ESG credentials and B-grade properties has been growing from both an investment and a leasing perspective. This trend is expected to work in favour of our portfolio of high-quality properties in the future.
Given these factors, and the quality of our services and properties, we are confident that we will be able to lease the available spaces in our portfolio in due course.
However, it is important to note that competition between landlords for high-quality tenants remains intense, particularly in regional cities in Poland. This is likely to impact the level of effective rents achieved or attainable in the market and in our portfolio.
Our Financial Results
In a year fraught with numerous challenges, our unwavering operational focus and business expansion have been partly reflected in our annual results.
Despite market conditions, our rental income for the year remained virtually unchanged compared to the previous year. The positive effect of our operating initiatives and the addition of new standing properties were counterbalanced by relatively higher amortisation expenses in 2022, active leases and fluctuations in occupancy.
Moreover, our Net Operating Income and EBITDA decreased by 3.2% annually. This decline was due to an increase in the cost of non-recoverable service charges (including the impact of Warta Tower being effectively empty during the year) and property operating costs covered by the Group as part of our ESG commitment for spaces used in response to the Ukrainian refugee crisis.
Over the past 12 months, property values in our markets have come under pressure, due to the challenging macroeconomic and geopolitical environment. Furthermore, a combination of operating performance, expanding yields, higher discount rates and capex invested in our portfolio, which are fully reflected in valuations and operations, contributed to negative revaluations of EUR89.5 million in our consolidated portfolio as of 31 December 2022.
As a result, the Group recorded a net loss for the year of EUR16.1 million (2021: EUR47.5 million gain). It is worth noting, however, excluding the impact of revaluation and exceptional items, our net profit would be EUR72.9 million.
Dividend
Throughout the year, we disbursed two interim dividends, one in relation to the 2021 financial year and the first interim dividend of 2022, amounting to EUR0.13 per share and EUR0.14 per share respectively. In summary, dividends paid to our shareholders during 2022 totalled EUR0.27 per share or EUR59.8 million. Both dividends were at least 90% of the EPRA Earnings for their corresponding half-year periods, as stipulated by our Articles of Incorporation.
Balance Sheet
Ensuring ample liquidity has always been a key area of focus for us, and we are pleased to report that during the year, we were able to repay the remaining EUR323 million of Globalworth's inaugural EUR550 million bond, which had been due to mature in June 2022. As a result, Globalworth has no material debt maturing until March 2025.
Additionally, we secured new financings for a total of EUR266 million during the year, with the most noteworthy being:
-- the six-year term loan agreement for EUR85 million with the International Finance Corporation , which is a member of the World Bank; and
-- the EUR160 million for two new facilities (secured and unsecured) signed with the Erste Group (undrawn at the end of 2022)
In the context of negative revaluations and recently completed or ongoing projects, which have yet to fully realise their value uplift, our LTV increased from 40.1% to 42.7% at year-end. Furthermore, our EPRA Net Reinstatement Value (NRV) at the end of the period was EUR1.8 billion, or EUR8.29 per share, representing a 4.3% decline from EUR8.66 on 31 December 2021, mainly due to dividends paid that offset operating performance and negative revaluations.
Despite these developments, we maintained a flexible liquidity position at year-end, with EUR164 million in cash and cash equivalents, and a further EUR300 million in undrawn debt facilities. Moreover, we maintained an investment grade rating from all three rating agencies in the 2022 review. However, the outlook was updated to negative, reflecting a higher interest-rate environment, deteriorating real estate market conditions, future refinancing considerations and a more negative outlook of rating agencies towards the real estate sector. In March 2023 S&P updated their rating to BB+ (stable outlook).
Sustainable Development
Our strategy for sustainable development revolves around the fundamental tenets of "People, Places and Technology". We are committed to delivering environmentally sound, safe buildings that cater to our occupiers' requirements while ensuring that we continue to make positive contributions to the communities we serve.
To that end, in 2022, we have accepted the challenge of proactively managing the consumption and associated carbon emissions produced during the construction and operation of our properties. This effort is aimed at further reducing our carbon footprint throughout the value chain, from areas within our control to those under the purview of our tenants.
Our environmental target is to reduce GHG emissions intensity by +40% by 2030 compared to our 2019 baseline levels (for Scope 1 and 2) and to commit to measuring and reducing Scope 3 emissions.
We also certified or recertified 45 of our properties during the year, with our green portfolio comprising 53 environmentally friendly properties valued at EUR2.6 billion. I am delighted that 89.8% of our standing commercial portfolio has been awarded high-level green certifications. Moreover, all of the offices within our portfolio have received the WELL Health-Safety Rating, and several other properties have received additional certifications.
However, sustainable development is not merely restricted to green buildings. Our comprehensive approach to ESG was further acknowledged by Sustainalytics where our "Low Risk" rating improved to 13.9 (compared to 14.8 last year and 16.0 two years ago) and MSCI, where we maintained our "A" rating.
Additionally, we continued to support our communities, where we supported over 15 initiatives in Romania and Poland.
Management Changes
In 2022, there was a change in executive leadership, wherein Mr D. Raptis and Mr A. Papadopoulos relinquished their roles as CEO and CFO respectively. Subsequently, Mr S. Sapkas and myself assumed these positions. I would like to express my utmost appreciation to the departing individuals for their invaluable contributions to the trajectory of Globalworth. As previously communicated upon my appointment, I am eagerly anticipating the prospect of progressive expansion, pioneering asset management innovation and an unwavering commitment to improving our tenants' experiences, all while delivering optimal returns to our esteemed shareholders.
Outlook
In 2023, we anticipate that macroeconomic developments, specifically the trajectory of inflation and the response of central banks, will have the most significant impact on the performance of the real estate market. Despite the prevailing market uncertainty, our Company remains steadfast in its focus on liquidity initiatives, which provide us with the resources we need to seize emerging opportunities.
Our unwavering commitment to providing sustainable office space that is highly appealing to the employees of our tenants, and adheres to the strictest environmental standards, continues to be a top priority. We are confident that this commitment, combined with the flexibility we offer our clients, will enable us to maintain robust leasing activities in 2023, irrespective of any challenges posed by the market's fluctuating conditions.
In conclusion, I have complete faith in the resilience of Globalworth in the face of market turbulence, and I believe that our prospects are bright. Our focus on liquidity and sustainability, coupled with the flexibility we offer our clients, positions us well to navigate any challenges that may arise and to continue to thrive. We look forward to the opportunities that the future holds, and we are eager to achieve greater success in the coming years.
Dennis Selinas
23 March 2023
"At Globalworth, we strive to offer our business partners and their employees the best possible experience, and we are proud to be a trusted partner for their ongoing success."
Standing Portfolio Review
We operate best-in-class real estate spaces in Poland and Romania
Our high-quality standing portfolio grew by 103.3k sqm to 1.4m sqm, valued at EUR2.9 billion at year-end 2022.
We provide our business partners with high-quality spaces in some of the most important real estate markets in Poland and Romania, that are sustainable, technologically advanced, and custom fitted to their requirements, offering premium services to allow the businesses to succeed.
By effectively managing our real estate portfolio, we aim to offer our investors an efficient gateway to the two largest markets in Central and Eastern Europe.
Increased Our Footprint to 1.4m sqm
In 2022, our combined portfolio of standing properties grew by 103.3k sqm with the addition of seven logistics facilities in Romania. Four facilities are in Bucharest, including our first small business units facility acquired in April, and three in regional cities of Romania (Pitesti, Constanta and Timisoara).
Overall, our standing portfolio predominantly comprises 30 Class "A" offices (50 properties in total) and a mixed-use investment (with five properties in total) in central locations in Bucharest (Romania), Warsaw (Poland) and five of the largest office markets/cities in Poland (Krakow, Wroclaw, Katowice, Gdansk
and Lodz), which in total account for 89.4% of our standing portfolio by value.
-- During the year, the size of our office and mixed-use portfolio remained unchanged; however, we expect it to grow in 2023 following the completion of the repositioning/redevelopment of two mixed-used properties in Poland.
In addition, in Romania, we fully own two logistics/light-industrial parks with six facilities in Timisoara, one industrial park in Pitesti (two facilities), two modern warehouses in Arad and Oradea, and, since earlier this year, we also own the majority stake (75% ownership) in a small business units facility and another warehouse (delivered in November), both in the Bucharest area. We have 50% ownership through a joint venture of two other logistics/business parks (with three standing facilities) in Bucharest and Constanta. We also own part of a residential complex in Bucharest.
During the year, our standing commercial portfolio's total GLA increased 8.7% to reach 1,383.2k sqm at the end of December 2022 whilst our overall standing portfolio (commercial and other) increased in GLA by 7.9% to 1,405.6k sqm due to the sale of residential units in our Upground residential project.
Standing Portfolio Value at EUR2.9 billion
The appraised value of our combined standing portfolio as of 31 December 2022 was EUR2.9 billion (+1.4% in commercial properties). This overall increase is mainly attributable to the addition of new properties through acquisition and completion, partly offset by relatively small revaluation losses of properties held throughout the period (like-for-like) and by the sale of certain units in our Upground residential complex.
The value of like-for-like standing commercial properties decreased by 1.3% as of 31 December 2022 compared to the prior year, as the reduction in value by 1.7% of our like-for-like standing office and mixed-use properties was offset by the increase in value of our industrial properties.
Globalworth Combined Standing Portfolio: 2022 Evolution ---------------------------------------------------------- GAV - 31 December 2021 EUR2,866.3m ----------------------------------------- --------------- Like for Like Change* -EUR34.6m ----------------------------------------- --------------- Acquisitions of Properties +EUR7.2m ----------------------------------------- --------------- Delivery of Properties +EUR68.3m ----------------------------------------- --------------- Sales -EUR13.7m ----------------------------------------- --------------- GAV - 31 December 2022 EUR2,893.6m ----------------------------------------- ---------------
* Like-for-Like change represents the changes in GAV of standing properties owned by the Group at 31 December 2021 and 31 December 2022.
Globalworth Combined Standing Portfolio: 2022 Evolution ------------------------------------------------------------- Total Standing YE 2021 1,302.3k sqm ---------------------------------------- ------------------- of which Standing Commercial YE 2021 1,272.0k sqm ---------------------------------------- ------------------- Pitesti Industrial Park (Phase II) / logistics facility developed in Pitesti (RO) +6.7k sqm ---------------------------------------- ------------------- Chitila Logistics Hub (Phase B & C) / logistics facilities developed in Bucharest (RO) +54.4k sqm ---------------------------------------- ------------------- Constanta Business Park (Phase B) / logistics facility developed in Constanta (RO) +19.8k sqm ---------------------------------------- ------------------- Timisoara Industrial Park II (Phase B) / logistics facility developed in Timisoara (RO) +19.0k sqm ---------------------------------------- ------------------- Business Park Stefanesti (Phase A) / logistics facility developed in Bucharest (RO) +4.4k sqm ---------------------------------------- ------------------- Business Park Chitila / logistics and warehouse facilities acquired in Bucharest (RO) +7.1k sqm ---------------------------------------- ------------------- Net Remeasurement Adjustments & Other (RO & PL) -0.2k sqm ---------------------------------------- ------------------- Standing Commercial YE 2022 1,383.2k sqm ---------------------------------------- ------------------- Upground / residential complex in Bucharest (RO)* 22.4k sqm ---------------------------------------- ------------------- Total Standing YE 2022 1,405.6k sqm ---------------------------------------- -------------------
* In 2022, units with 7.9k GLA were sold in our Upground residential complex.
Like-for-Like Occupancy Marginally Changed in 2022
Our standing commercial portfolio's average occupancy as of 31 December 2022 was 85.6% (86.0% including tenant options), representing a 2.9% decrease over the previous 12 months (88.5% as of 31 December 2021 / 88.7% including tenant options).
This decrease is mainly attributable to the addition of seven industrial properties (six deliveries and one acquisition), the majority of which are in their lease-up phase and, consequently, at year-end had occupancy lower than the Group average, thus negatively impacting the overall average standing commercial occupancy rate across our portfolio. These facilities have a total GLA of 111.5k sqm and on 31 December 2022 were 54.2% occupied.
On a like-for-like basis, occupancy marginally decreased by 0.2% to 88.4% at the end of the year, mainly due to the expiration of certain ESG leases during the year (from our efforts to help in the Ukrainian refugee crisis) and Warta Tower in Warsaw now being effectively empty.
Like-for-like standing occupancy of our portfolio, adjusted for Warta Tower which was in the process of being sold at year-end, was 90.5% (+0.2% compared to 31 December 2021). We see this relative stagnation as a changing point under normalising market conditions. Therefore, we remain confident that we will be able to lease the available spaces in our portfolio in the future as business conditions return to a more balanced state.
Across our standing portfolio, at 31 December 2022, we had 1,184.6k sqm of commercial GLA leased to more than 600 tenants at an average WALL of 4.4 years, the majority of which is let to national and multinational corporates that are well-known within their respective markets.
Not included in our standing portfolio metrics are: 44.3k sqm leased in our two mixed-use properties which are currently under refurbishment/repositioning, and 4.8k sqm in our industrial properties which are under development in Romania (Bucharest and Targu Mures).
Occupancy Evolution 2022 (GLA k sqm) - Commercial Portfolio
Occupancy Occupancy Occupancy
Poland Rate (%) Romania Rate (%) Group Rate (%)
------------------------- ------ --------- ------- --------- ------- ---------
Standing Available
GLA - 31 Dec.
21 542.1 729.9 1,272.0
------------------------- ------ --------- ------- --------- ------- ---------
Acquired GLA - 7.1 7.1
New Built GLA - 104.4 104.4
Remeasurements,
reclassifications 0.0 (0.3) (0.2)
------------------------- ------ --------- ------- --------- ------- ---------
Standing Available
GLA - 31 Dec.
22 542.1 841.0 1,383.2
------------------------- ------ --------- ------- --------- ------- ---------
Occupied Standing
GLA - 31 Dec. 21 464.1 85.6% 662.1 90.7% 1,126.2 88.5%
Acquired/Developed
Occupied GLA - 60.4 60.4
Expiries & Breaks (56.8) (19.7) (76.5)
Renewals* 42.7 47.8 90.5
New Take-up 32.7 40.9 73.5
------------------------- ------ --------- ------- --------- ------- ---------
Other Adj. (relocations,
remeasurements, etc) 0.6 0.0 0.6
------------------------- ------ --------- ------- --------- ------- ---------
Occupied Standing
GLA - 31 Dec. 22 440.6 81.3% 743.7 88.4% 1,184.3 85.6%
------------------------- ------ --------- ------- --------- ------- ---------
Standing Portfolio Snapshot
As of 31 December 2022, our combined standing portfolio comprised 41 investments (39 on 31 December 2021) with 71 buildings (66 on 31 December 2021) in Poland and Romania. The appraised value of the portfolio was EUR2,893.6 million, of which 88.4% was environmentally certified.
Globalworth Combined Portfolio: Key Metrics
Total Standing Properties 30 Dec. 2020 31 Dec. 2021 31 Dec. 2022
-------------------------- ------------ ------------ ------------
Number of Investments 37 39 41
-------------------------- ------------ ------------ ------------
Number of Assets 64 66 71(1)
-------------------------- ------------ ------------ ------------
GLA (k sqm) 1,271.3 1,302.3 1,405.6
-------------------------- ------------ ------------ ------------
GAV (EUR m) 2,805.5 2,866.3 2,893.6
-------------------------- ------------ ------------ ------------
Contracted Rent (EUR m) 178.7 175.4 182.1
-------------------------- ------------ ------------ ------------
30 Dec. 31 Dec. 31 Dec.
Of which Commercial Properties 2020 2021 2022
--------------------------------- --------------- --------------- ---------------
Number of Investments 36 38 40
--------------------------------- --------------- --------------- ---------------
Number of Assets 63 65 70
--------------------------------- --------------- --------------- ---------------
GLA (k sqm) 1,238.9 1,272.0 1,383.2
--------------------------------- --------------- --------------- ---------------
GAV (EUR m) 2,745.9 2,810.3 2,850.3
--------------------------------- --------------- --------------- ---------------
90.9% (91.7%(2) 88.5% (88.7%(2) 85.6% (86.0%(2)
Occupancy (%) ) ) )
--------------------------------- --------------- --------------- ---------------
Contracted Rent (EUR m) 177.7 174.5 181.3
Potential Rent at 100% occupancy
(EUR m) 199.2 201.2 211.4
--------------------------------- --------------- --------------- ---------------
WALL (years) 4.5 4.7 4.4
--------------------------------- --------------- --------------- ---------------
1 Following the completion of the third phase of the Chitila Logistics Hub, we have consolidated the three phases in one facility.
2 Including tenant options.
Our awards:
Poland
Golden Award - Marketing Event of the Year - Hala Koszyki
Investment of the Year - Retail Space Market - Renoma
Golden Award - The Best Food Hall in Poland - Hala Koszyki
Golden Award - PR & Employer Branding
Best Interior Concept for Uniqa Polska in WTT
Romania
Best Technology Driven Office Building award at the "The Readers' Choice Realty Awards" gala - Globalworth Square
Office Developer of the Year award at the Real Estate Gala
Logistics Project of the Year at SEE Property Forum 2022 - Chitila Logistics Hub
Best Green Development of The Year at CIJ Awards gala - Globalworth Square
Forbes Best Office Buildings - The New Way of Working Gala - Globalworth Square.
Portfolio Development / Evolution
Investment activity principally focused on developing and repositioning of 178.6k high-quality GLA in Romania and Poland
"In 2022, we continued with our active investment programme focusing on high-quality logistics/light-industrial facilities in Romania and the refurbishment/repositioning of two mixed-use properties in Poland, investing over EUR52.2 million in their acquisition and development during the year.
Dimitris Pergamalis
Group Head Globalworth Workplaces
Investment in Industrial Properties
Tenant demand for industrial properties, specifically for warehouses, logistics and light-industrial buildings, has significantly accelerated in recent years, supported by strong demand for e-commerce and last-mile logistics.
In this market segment, we have been growing our footprint, especially since the COVID-19 pandemic outbreak, where we have added over 180k sqm of high-quality real estate spaces to our portfolio, most of which we developed ourselves and the remainder added through select acquisitions.
Review of New Acquisitions
In April 2022, we formed a new strategic partnership with CATTED focusing on the "small business units" segment in logistics and warehouse facilities in Romania. As part of this partnership in which we own a majority (75%) stake, we acquired our first small business units project in the north-western part of Bucharest, close to our Chitila Logistics Hub. The project, developed by CATTED, has been rebranded as "Business Park Chitila" and comprises 13 small units, offering 7.1k sqm of GLA and was 98.2% occupied on 31 December 2022.
We also acquired a 45k sqm land plot in the north-eastern part of Bucharest (Stefanesti) where, together with CATTED, we are currently constructing "Business Park Stefanesti", also focused on small business units.
In addition, and to facilitate further the success and development of future phases of the Constanta Business Park project, we acquired a 34.5k sqm plot to secure a future railroad connection for the entire park.
Review of Developments
In 2022, we continued developing high-quality logistics/light-industrial facilities in Romania. At the beginning of the year, we had five logistics facilities under construction (98.9k sqm). In addition, we commenced the construction of four other facilities with 34.4k sqm of GLA during the year.
The new facilities we commenced construction on in 2022 included:
-- our first development of small business units facilities (three phases) in the north-eastern part of Bucharest, and
-- the first phase of the Mures City Logistics in the central northern part of Romania.
Business Park Stefanesti, located in the north-eastern part of Bucharest, offers easy access to the Bucharest ring road and allows for a quick connection to the centre of Bucharest via the A2 motorway. The location is considered very advantageous for housing small business units. The project comprises three buildings to be delivered in phases with a total of 17.7k sqm GLA, offering up to 24 units for rent, ranging from 500 to 1,500 sqm. As of 31 December 2022, the first building was already delivered and fully let to Delivery Solutions SRL.
Mures City Logistics, located in the central northern part of Romania, involves the development of a new facility which, on completion, will offer 16.7k sqm of high-quality space. Targu Mures is the seventh Romanian region we have invested in, and we elected to expand in this sub-market due to its strategic location and connectivity. The project is being developed with a joint venture partner, and we own a 50% interest in the venture. As of 31 December 2022, the facility was partially pre-let to Friesland Campina, a multinational holding the leading position in dairy products in Romania, on a +10 years contract.
Projects Delivered
We delivered six new logistics facilities offering 104.4k sqm of GLA. All facilities represented subsequent phases of development in existing established projects which we directly own or through JV partnerships.
These new facilities are in Bucharest (58.8k) and three regional locations, in Timisoara (19.0k sqm), Pitesti (6.7k sqm), and Constanta (19.8k sqm).
In Bucharest, deliveries were dominated by the completion of the second and third (final) phase of the Chitila Logistics Hub, which now offers in total 77.8k sqm of high-quality last-mile logistics spaces close to the Bucharest ring road, providing easy access to the capital. The first phase was delivered in Q3-2020 and is 100.0% occupied, with the second and third phases delivered in Q1 and Q3-2022, respectively and 90.7% and 23.8% occupied.
At the end of December 2022, the six facilities, some of which are in their lease-up phase, were 51.2% contracted by multinational or large national tenants like HAVI Logistics, Caroli, Linde, Phylosophy Design and Delivery Solutions. They had a total annualised contracted rent of EUR3.2 million at an average WALL of 7.5 years. Total annualised rent could increase to EUR5.7 million at full occupancy.
Developments in Progress
We currently have two projects under construction expected to be completed in the first half of 2023, further expanding our industrial footprint by 30.0k sqm of high-quality GLA and at full occupancy are expected to generate EUR2.4 million of annualised rent.
Developments - Delivered Developments - Under
Construction
Timisoara
Pitesti Chitila Constanta Industrial Business
Industrial Logistics Business Park Park
Park Hub (Phases Park II Stefanesti
(Phase B and (Phase (Phase (Phase Business Mures City
II) C)* B)* B) A) Park Stefanesti(2) Logistics(1)
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
Location Pitesti Bucharest Constanta Timisoara Bucharest Bucharest Tg. Mures
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
GLA (k sqm) 6.7 54.4 19.8 19.0 4.4 13.2 16.7
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
Occupancy
(%) 100.0% 43.9% 86.7% 6.1% 100.0% 4.4% 25.2%
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
Development
Cost (EUR
m) / Estimated
CAPEX to Go 5.9 28.3 9.4 8.3 3.0 9.4 / 1.5 11.6 / 1.9
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
GAV (EUR
m) 7.7 32.4 13.3 10.9 4.0 8.5 8.4
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
Contracted
Rent (EUR
m) 0.6 1.2 1.1 0.1 0.3 0.0 0.4
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
100% Rent
(EUR m) 0.6 2.7 1.2 0.9 0.3 0.9 1.1
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
Estimated
Yield on
Development
Cost 9.6% 9.6% 13.1% 11.0% 9.6% 9.7% 9.3%
------------------- ----------- ------------ --------- ----------- ----------- ------------------ -------------
* Joint venture in which Globalworth owns 50%; figures shown on 100% basis.
1 50:50 joint venture; figures shown on 100% basis.
2 75% owned by Globalworth; figures shown on 100% basis.
Refurbishment/Repositioning of Mixed-Use Properties
Following the review back in 2020 of our portfolio and in response to market conditions, we commenced refurbishing/repositioning two of our three mixed-use properties in Poland. Aiming to increase their Class "A" office space and improve their retail/commercial offering, work started at our Renoma landmark property in Wroclaw in H2-2020 and our centrally located Supersam property in Katowice in H2-2021.
-- At Renoma, the refurbishment will increase the offer of Class "A" office space on the higher floors. It will also reposition the property's retail offer towards a more attractive food court and a selected fashion mix on the ground floor and convenience facilities, including a supermarket, gym and drugstore located on the -1 level.
-- At Supersam, we are redeveloping the entire level 1 into an office function. On level -1, we are repositioning selected retail modules into high-quality retail and commercial spaces with food and entertainment.
In 2022 we invested EUR12.6 million in the two properties, and we expect to deliver the properties within 2023.
Ongoing Investment & Upgrade Programme of Our Standing Properties
Offering best-in-class real estate space to our business partners is a key component of our strategy at Globalworth.
We believe that through a "hands-on" approach with continuous active management and investment in our portfolio, we can preserve and enhance the value of our properties, generate long-term income and offer best-in-class real estate space to our business partners.
To be able to provide spaces for our current and future business partners' requirements, we keep (re)investing in our properties, maintaining and, where required, improving the quality of our buildings and our services.
We manage all our properties in Poland internally, and in Romania, we manage all but one of our offices in-house. This translates to 968.2k sqm of high-quality office and mixed-use space with an appraised value of EUR2.5 billion internally managed by our team.
Our Upgrade Programme has resumed at a more normalised pace since last year, following its scaling back for part of 2020 due to COVID-19. In 2022, we invested EUR35.2 million in select improvement initiatives in our standing commercial portfolio. As a result of our ongoing in-house initiatives and property additions, we hold a modern portfolio with 53 of our standing commercial properties, accounting for 77.1% by GLA and 76.2% by commercial portfolio value, having been delivered or significantly refurbished in or after 2014.
Also, in Q3-2022, we chose Honeywell Forge to help us lower maintenance costs and reduce energy consumption in our portfolio.
Properties Under Refurbishment/Repositioning
------------------------------ ----------------------------------------------
Renoma Supersam
------------------------------ ---------------------- ----------------------
Location Wroclaw Katowice
------------------------------ ---------------------- ----------------------
Refurbishment/ Refurbishment/
Status Repositioning Repositioning
------------------------------ ---------------------- ----------------------
Expected Delivery Q2/Q3-2023 H1-2023
------------------------------ ---------------------- ----------------------
GLA - on Completion (k sqm) 48.2 26.6
------------------------------ ---------------------- ----------------------
CAPEX to 31 Dec 22 (EUR m) 14.6 3.4
------------------------------ ---------------------- ----------------------
GAV (EUR m) 108.0 44.4
------------------------------ ---------------------- ----------------------
Estimated Capex to Go (EUR
m)* 12.1 2.7
------------------------------ ---------------------- ----------------------
ERV (EUR m) 9.8 4.2 ------------------------------ ---------------------- ---------------------- Estimated Yield on Completion of Project** 9.9% 11.2% ------------------------------ ---------------------- ----------------------
* Estimated Capex to Go partially excludes tenant contributions which are subject to tenant negotiation and may impact the final yield on completion of the project.
** Estimated Rental Value increase versus current Contracted rent + ERV on vacant spaces divided by total Development Capex.
Internally Managed Commercial Portfolio
as at 31 Dec. 2022
Poland Romania Group
---------------- ------------- ------------- -------------
GLA (k sqm) 542.1 426.1 968.2
---------------- ------------- ------------- -------------
% of Commercial
GLA 100% 51% 70%
---------------- ------------- ------------- -------------
% of Office and
Mixed-Use GLA 100% 92% 96%
---------------- ------------- ------------- -------------
GAV (EUR m) 1,422.6 1,088.6 2,511.2
---------------- ------------- ------------- -------------
% of Commercial
GAV 100% 76% 88%
---------------- ------------- ------------- -------------
% of Office and
Mixed-Use GAV 100% 93% 97%
---------------- ------------- ------------- -------------
Future Developments
We own, directly or through JV partnerships, other land plots in prime locations in Bucharest, regional cities in Romania and Poland, covering a total land surface of 1.2 million sqm (comprising 2.8% of the Group's combined GAV), for future developments of office, industrial or mixed-use properties. When fully developed, these land plots have the potential to add a total of a further 785.7k sqm of high-quality GLA to our standing portfolio footprint.
These projects, which are classified as "Future Development", continue to be reviewed by the Group, albeit periodically, with the pace at which they will be developed subject to tenant demand and general market conditions.
Future Developments
Timisoara
Constanta Industrial
Podium Business Park I and II
Park III Green Court D Globalworth West Park (Phased)* (Phased) Luterana
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Location Krakow Bucharest Bucharest Constanta Timisoara Bucharest
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Constr. Constr. Constr.
Status Postponed Postponed Postponed Planned Planned Planned
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
GLA (k sqm) 17.7 17.2 33.4 525.8 165.2 26.4
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
CAPEX to 31 Dec
22 (EUR m) 8.5 2.5 5.2 12.3 7.0 7.4
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
GAV (EUR m) 9.6 8.6 7.4 37.2 11.0 13.6
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Estimated CAPEX
to Go (EUR
m)** 29.7 23.9 38.5 243.6 63.5 39.7
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
ERV (EUR m) 3.1 3.3 5.1 27.7 6.7 5.8
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Estimated Yield
on Development
Cost 8.1% 12.6% 11.5% 10.8% 9.6% 12.3%
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
* 50:50 joint venture; figures shown on 100% basis.
** Initial preliminary development budgets on future projects to be revised prior to the permitting.
Asset Management Review
Continuing to actively manage our real estate portfolio
Leasing Review
We are present in six of the seven largest office markets in Poland, and in the largest office market and some of the most attractive logistics/light-industrial hubs of Romania too.
Our office markets provide corporations with the necessary infrastructure for them to operate and offer people interesting opportunities for them to grow professionally and personally, while our logistics/light-industrial properties benefit from locations that are easily accessible, on or next to major road arteries, connecting our facilities to major hubs in Romania and abroad.
The COVID-19 pandemic triggered a change in the way we work, and how business is conducted, and, as our markets were recovering and absorbing these changes, there was a further negative impact on the economic and business environment from the Ukraine war, resulting in a more uncertain outlook. The changes in market conditions became more apparent in the second half of 2022, impacting our overall operating performance.
As such, signing new leases, typically for large multinational and national corporates, is taking longer in the current market environment as tenants continue to assess their future occupational plans and adapt to the new conditions.
In both Poland and Romania, increased construction costs and reduced development activity, mainly as a result of the COVID-19 pandemic, limited new supply in these markets. This means that the supply of high-quality offices in central locations in the coming years will be lower than the average levels recorded in the past, which may result in higher tenant demand for such properties.
In addition, we observed a widening gap between A-grade properties with strong ESG credentials and B-grade properties, both from an investment and a leasing perspective, which should benefit our portfolio in the future as we actively manage our high-quality properties with the aim of improving our operational metrics.
Headline rental levels have remained stable, and the combination of lower supply and higher inflation should be a strong mitigant against the negative effects of a potential slowdown in tenant demand as a result of the weakening economic conditions.
New Leases
Our principal focus continued to be the prolongation of leases with existing tenants in our portfolio and the take-up of available spaces in standing properties and developments.
In the 12 months of 2022, the Group successfully negotiated the take-up (including expansions) or extension of 206.9k sqm of commercial spaces in Poland (42.3% of transacted GLA) and Romania (57.7% of transacted GLA), with an average WALL of 4.4 years. Between 1 January and 31 December 2022, the majority of our leasing activity, involved new take-up of available spaces, with such leases accounting for 52.4% of our total leasing activity and were signed at a WALL of 5.4 years, while renewals accounted for 47.6% signed at a WALL of 3.8 years.
In total, we signed new leases for 108.5k sqm of GLA, with the majority involving spaces (+65.0%) leased to new tenants, and the remaining areas being taken up by existing tenants which were expanding their operations.
-- New leases were signed with 82 new tenants for 75.2k sqm of GLA at a WALL of 5.5 years. The majority were for office spaces, accounting for 61.3%, with the remainder involving industrial (31.4%) and retail/other commercial spaces.
-- In addition, 52 tenants signed new leases, expanding their operations by 33.2k sqm at an average WALL of 5.2 years.
Also, in response to the Ukrainian refugee crisis in this period, we offered 14.9k sqm (8.1k sqm already returned to us) of GLA in our properties in Poland and Romania to local authorities and organisations, which we include in our performance.
During 2022, 52 of our tenants expanded their operations, taking-up an additional 33.2k sqm at an average WALL of 5.2 years.
We also renewed leases for a total of 98.4k sqm of GLA with 97 of our tenants at a WALL of 3.8 years. It is important to note that c.68.1% (by GLA) of these renewals were for leases that were expiring in 2023 or later.
Summary Leasing Activity for Combined Portfolio in 2022
GLA (k sqm) No. of Tenants* WALL (yrs)
------------------------------ ----------- --------------- ----------
New Leases (incl. expansions) 108.5 125 5.4
------------------------------ ----------- --------------- ----------
Renewals/Extensions 98.4 97 3.8
------------------------------ ----------- --------------- ----------
Total 206.9 198 4.4
------------------------------ ----------- --------------- ----------
* Number of individual tenants.
Selected New Leases Signed in 2022
City Property Use GLA
-------------------- ------------- ------------------------- ----------- -----
Bucharest
Phylosophy Design (RO) Chitila Logistic Hub Industrial 10.8k
-------------------- ------------- ------------------------- ----------- -----
Timisoara Timisoara Industrial
OVT Logisticzentrum (RO) Park II Industrial 5.8k
-------------------- ------------- ------------------------- ----------- -----
Bucharest
Delivery Solutions (RO) Business Park Stefanesti Industrial 4.4k
-------------------- ------------- ------------------------- ----------- -----
Bucharest
Max Bet (RO) City Offices Office 4.3k
-------------------- ------------- ------------------------- ----------- -----
Renoma, Retro Office
Coherent Solutions Wroclaw (PL) House Office 3.8k
-------------------- ------------- ------------------------- ----------- -----
Selected Lease Extensions Signed in 2022
City Property Use GLA
-------------------- ------------- --------------------- ----------- -----
Automatic Data Bucharest
Processing Romania (RO) Gara Herastrau Office 8.3k
-------------------- ------------- --------------------- ----------- -----
Timisoara Timisoara Industrial
Litens Automotive (RO) Park I Industrial 8.1k
-------------------- ------------- --------------------- ----------- -----
Bucharest
Carrefour (RO) Green Court Complex Office 5.3k
-------------------- ------------- --------------------- ----------- -----
Olympus Business
Services Wroclaw (PL) Retro Office House Office 4.6k
-------------------- ------------- --------------------- ----------- -----
Bucharest
Delivery Solutions (RO) Globalworth Square Office 4.3k
-------------------- ------------- --------------------- ----------- -----
Average Portfolio Headline Rents in Standing Portfolio (EUR/sqm/m)
31 Dec. 2022 31 Dec. 2021 Change (%)
------------------------ ---------------- --------------- ------------
Office 14.2 14.0 1.8%
------------------------ ---------------- --------------- ------------
Industrial 4.0 3.8 4.6%
------------------------ ---------------- --------------- ------------
Retail/Commercial 14.2 13.9 2.1%
------------------------ ---------------- --------------- ------------
Average Headline Rents of New Leases Signed (EUR/sqm/m)
31 Dec. 2022 31 Dec. 2021 Change (%)
-------------------- ------------- ------------- ----------
Office 14.8 13.9 6.8%
-------------------- ------------- ------------- ----------
Industrial 3.7 3.9 -4.9%
-------------------- ------------- ------------- ----------
Retail/Commercial 14.1 12.7 11.0%
-------------------- ------------- ------------- ----------
Average: 11.9 12.1 -0.9%
-------------------- ------------- ------------- ----------
Rental Levels
Headline market rental levels have remained relatively stable in our portfolio, despite the uncertainty in the market and the cautious approach of tenants. This reflects the quality of our properties, our active asset management initiatives, and our approach to sustainable development.
Our leases typically adjust annually in the first quarter of the year, with eligible leases indexed at an average of 3.8% in 2022. However, this positive impact is not fully reflected in our averages, as the rates at which leases were renewed or new leases signed were at their respective ERV rates.
Rental levels can vary significantly between type of spaces, buildings and sub-markets. Leases signed in 2022 were at EUR11.9/sqm/m, 0.9% lower than their prevailing group averages.
Contracted Rents (on annualised basis)
Total annualised contracted rent across our portfolio in Poland and Romania increased by 3.0% to EUR189.2 million compared to year-end 2021, driven by active asset management, indexation, a new acquisition and lease-up in our development projects (completed or in-progress).
Total annualised contracted rents in our standing commercial portfolio were EUR181.3 million on 31 December 2022, up by 3.9% compared to 31 December 2021, increasing to EUR182.0 million when including rental income generated by renting 147 residential units and other auxiliary spaces in Upground, the residential complex in Bucharest which we partially own.
Like-for-like annualised commercial contracted rents in our standing commercial portfolio also increased by 1.7% to EUR177.5 million at the end of December 2022 compared to the same period in 2021, mainly as a result of rent indexation.
Annualised Contracted Rent Evolution 2022 (EURm)
Poland Romania Group
---------------------------------------------- ------ ------- ------
Rent from Standing Commercial Properties
("SCP") 31 Dec. 2021 87.9 86.6 174.5
---------------------------------------------- ------ ------- ------
Less: Space Returned (9.7) (2.0) (11.7)
---------------------------------------------- ------ ------- ------
Plus: Rent Indexation 2.5 2.6 5.2
---------------------------------------------- ------ ------- ------
Plus/Less: Lease Renewals (net impact)
& Other 0.4 (0.3) 0.1
---------------------------------------------- ------ ------- ------
Plus: New Take-up 5.4 4.0 9.4
---------------------------------------------- ------ ------- ------
Total L-f-L Rent from SCP 31 Dec.
2022 86.6 90.9 177.5
---------------------------------------------- ------ ------- ------
Plus: Standing Commercial Properties
Acquired During the Period - 0.6 0.6
---------------------------------------------- ------ ------- ------
Plus: Developments Completed During
the Period - 3.2 3.2
---------------------------------------------- ------ ------- ------
Total Rent from Standing Commercial
Properties 86.6 94.7 181.3
---------------------------------------------- ------ ------- ------
Plus: Residential Rent - 0.7 0.7
---------------------------------------------- ------ ------- ------
Total Rent from Standing Properties 86.6 95.4 182.0
---------------------------------------------- ------ ------- ------
Plus: Active and Pre-lets of Space
on Projects Under Development/ Refurbishment 6.7 0.5 7.2
---------------------------------------------- ------ ------- ------
Total Contracted Rent as at 31 Dec.
2022 93.3 95.9 189.2
---------------------------------------------- ------ ------- ------
Combined Annualised Commercial Portfolio Contracted Rent Profile
as at 31 Dec. 2022
Poland Romania Group
------------------------------------- ---------- ----------- -------
Contracted Rent (EUR m) 93.3 95.2 188.5
------------------------------------- ---------- ----------- -------
Tenant origin - %
------------------------------------- ---------- ----------- -------
Multinational 68.2% 86.4% 77.4%
------------------------------------- ---------- ----------- -------
National 30.6% 12.4% 21.4%
------------------------------------- ---------- ----------- -------
State Owned 1.1% 1.3% 1.2%
------------------------------------- ---------- ----------- -------
Note: Commercial Contracted Rent excludes c.EUR0.7 million from residential spaces as at 31 December 2022.
Annualised Contracted Rent by Period of Commencement Date as
at 31 Dec. 2022 (EURm)
Active
Leases H1-2023 H2-2023 H1-2024 H2-2024 >2024 Total
-------------------- ------- ------- ------- ------- ------- ----- -----
Standing Properties 177.4 4.2 0.5 0.0 - - 182.0
-------------------- ------- ------- ------- ------- ------- ----- -----
Developments 6.2 0.6 0.3 - 0.1 - 7.2
-------------------- ------- ------- ------- ------- ------- ----- -----
Total 183.6 4.7 0.8 0.0 0.1 - 189.2
-------------------- ------- ------- ------- ------- ------- ----- -----
Annualised Commercial Portfolio Lease Expiration Profile as
at 30 June 2022 (EURm)
Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 >2031
------------ ----- ----- ----- ----- ----- ----- ---- ----- ---- -----
Total 20.2 28.8 19.0 19.6 25.7 19.0 13.8 27.9 4.1 10.4
------------ ----- ----- ----- ----- ----- ----- ---- ----- ---- -----
% of total 10.7% 15.3% 10.1% 10.4% 13.6% 10.1% 7.3% 14.8% 2.2% 5.5%
------------ ----- ----- ----- ----- ----- ----- ---- ----- ---- -----
The Group's rent roll across its combined portfolio is well diversified, with the largest tenant accounting for 5.2% of contracted rents, while the top three tenants account for 10.6% and the top 10 account for 24.8%.
Cost of Renting Spaces
Renting spaces typically involves certain costs, such as rent-free periods, fitouts for the space leased, and brokerage fees, which the landlord incurs. These incentives can vary significantly between leases and depend on market conditions, type of lease signed (new take-up or lease extension), space leased (office, industrial, other), contract duration and other factors.
Headline (base) rents present the reference point typically communicated in the real estate market when referring to the level at which lease contracts are expected to be signed or are signed. However, the effective rent is a more useful indicator of a rental agreement's profitability.
In calculating our effective rent, we account for the costs incurred over the lease's lifetime, which we deduct from the headline (base) rent, thus allowing us to assess the profitability of a rental agreement. To analyse the effective rent more accurately in this period, we excluded ESG leases offered as assistance to support Ukrainian refugee initiatives in Poland and Romania.
Overall, in 2022, we successfully negotiated the take-up (including expansions) or extension of 191.0k sqm of commercial spaces in our portfolio (excluding ESG leases). The weighted average effective rent for these new leases was EUR8.8/sqm/month with a WALL of 4.4 years.
-- Industrial leases completed in the period accounted for 24.7% of the total leasing activity, resulting in the lower average headline and effective rent.
The difference between headline (base) and effective rents in 2022 was, on average, 26.1%, which is lower than for FY2021 (average of 29.2%) but reflects the fact that market conditions continued to be challenging.
In total, new leases signed during the year will generate future rental income of EUR128.9 million (including auxiliary spaces), with leases from office properties accounting for 73.1% of future rental income.
Weighted Average Effective Rent (EUR / sqm / m) - 2022
Poland Romania Group
---------------------------------- ------- -------- ------
Headline Commercial Rent 15.9 9.0 11.9
---------------------------------- ------- -------- ------
Less: Rent Free Concessions (2.3) (0.9) (1.5)
---------------------------------- ------- -------- ------
Less: Tenant Fitouts (2.2) (0.8) (1.3)
---------------------------------- ------- -------- ------
Less: Broker Fees (0.5) (0.1) (0.3)
---------------------------------- ------- -------- ------
Effective Commercial Rent 10.9 7.2 8.8
---------------------------------- ------- -------- ------
WALL (in years) 4.0 5.1 4.4
---------------------------------- ------- -------- ------
Collections Review
The ability to collect - cash in - contracted rents is a key determinant for the success of a real estate company.
Our rate of collections of rents invoiced and due in 2022 remained high, at 99.3% (over 99% for FY2021). This is due to the long-term partnerships we have established and maintained with high-quality national and multinational tenants since the inception of the Group, which have helped us minimise the impact on rent collections in this period of higher economic uncertainty and ensure sustainable cash flow generation.
Portfolio Valuation
In line with our practice of biannual valuations, we valued our entire portfolio in Poland and Romania as of 30 June and 31 December 2022.
The valuations were performed by CBRE and Knight Frank for our properties in Poland, with Colliers and Cushman and Wakefield valuing our properties in Romania (more information is available under note 4 of the audited annual consolidated financial statements as of and for the period ended 31 December 2022).
Assigning the appraisal of our portfolio to four independent and experienced service providers makes the process of determining the value of our properties transparent and impartial. Through our oversight, we ensure that a consistent methodology, reporting, and timeframe are respected.
The main drivers in the growth of our portfolio since the inception of the Group have been:
-- Acquisition or development of high-quality properties in Poland and Romania, -- Active asset management of the properties, and -- The performance of the real estate markets in which we operate.
Overall, our total combined portfolio value was EUR3.0 billion at the end of 2019, and remained effectively unchanged in 2020 due to the impact of the COVID-19 pandemic, increasing to EUR3.2 billion at 31 December 2021 due to additions.
In valuing our properties, key market indicators used by the four independent appraisers, although they vary, consider factors such as the commercial profile of the property, its location and the country in which it is situated.
As at 31 December 2022, third-party appraisals were impacted by higher inflation and interest rates, increased market volatility and a more uncertain outlook. This has led to the application of assumed (in several cases) yield expansion and higher discount rates in determining the valuations. As such, the portfolio's overall third-party appraised value on 31 December 2022 was estimated at EUR3.2 billion, +0.2% higher compared to the end of 2021.
The completion of six high-quality industrial facilities in Romania, the acquisition of a "small business units" facility and the net positive impact from our developments (in progress or under refurbishment) added EUR75.5 million in portfolio value, which was offset by the like-for-like decrease (EUR35.6 million/1.3%) in the appraised value of our standing commercial properties compared to 31 December 2021.
Combined Portfolio Value Evolution 31 Dec. 2022 (EURm)
Poland Romania Group
----------------------------------------- ------- ------- -------
Total Combined Portfolio Value at
31 Dec. 2021 1,612.8 1,539.5 3,152.3
----------------------------------------- ------- ------- -------
Less: Properties Held in Joint Venture
* - (86.7) (86.7)
----------------------------------------- ------- ------- -------
Total Investment Properties ** at
31 Dec. 2021 1,612.8 1,452.8 3,065.6
----------------------------------------- ------- ------- -------
Plus: Transactions - (6.5) (6.5)
----------------------------------------- ------- ------- -------
o/w New Acquisitions - 7.2 7.2
----------------------------------------- ------- ------- -------
o/w Disposals - (13.7) (13.7)
----------------------------------------- ------- ------- -------
Plus: Capital Expenditure 39.0 29.3 68.3
----------------------------------------- ------- ------- -------
o/w Developments 8.1 13.0 21.1
----------------------------------------- ------- ------- -------
o/w Standing Properties 30.9 16.3 47.2
----------------------------------------- ------- ------- -------
o/w Future Developments - - -
----------------------------------------- ------- ------- -------
Plus: Net Revaluations Adjustments (67.3) (20.5) (87.8)
----------------------------------------- ------- ------- -------
o/w Developments (11.7) 4.8 (6.9)
----------------------------------------- ------- ------- -------
o/w Standing Properties (55.6) (27.3) (82.9)
----------------------------------------- ------- ------- -------
o/w Lands, Future Developments &
Acquisitions - 2.0 2.0
----------------------------------------- ------- ------- -------
Total Investment Properties ** at
31 Dec. 2022 1,584.5 1,455.1 3,039.6
----------------------------------------- ------- ------- -------
Plus: Properties Held in Joint Venture
* - 119.3 119.3
----------------------------------------- ------- ------- ------- o/w Capital Expenditure & Acquisitions - 24.7 24.7 ----------------------------------------- ------- ------- ------- o/w Net Revaluation Adjustments - 7.9 7.9 ----------------------------------------- ------- ------- ------- Total Portfolio Value at 31 Dec. 2022 1,584.5 1,574.4 3,158.9 ----------------------------------------- ------- ------- -------
* Properties held through joint ventures are shown at 100%; Globalworth owns 50% stake in the respective joint ventures.
** Excludes adjustments made to investment properties, for sale of real estate assets following the year end.
Note: Certain casting differences in subtotals/totals are due to figures presented to 1 decimal place.
Financial Review
Resilient performance despite global challenges
"Our strong operational focus and business expansion partly reflected in our annual results, as we navigate through challenging market conditions.
Stamatis Sapkas
Chief Financial Officer
1. Introduction and Highlights
Our 2022 performance was resilient despite the global challenges, as we continued implementing our "local landlord" approach in managing our business.
To help explain our performance, we use a number of measures typically observed in our sector. These include quoting several measures on a consolidated basis (including our joint ventures), as it best describes how we manage our portfolio and overall business, like-for-like measures and measures prescribed by EPRA.
The measures defined by EPRA are designed to enhance transparency and comparability across the European real estate sector.
2. Revenues and Profitability
Our main source of revenue is rent that we receive from leasing spaces available in our properties to our partners. We also receive other income including that from service charges to cover the costs of communal or shared spaces and services in our properties, however this income is netted off against our total service charge cost.
Revenues
EUR239.3m
9.1% on 2021
IFRS Earnings per Share(2)
(8) cents
21 cents in 2021
EPRA NRV(1,3)
EUR1,835.5m
(4.3)% on 31 Dec. 2021
Adjusted Normalised EBITDA(1,4)
EUR126.0m
(3.2)% on 2021
LTV(1,5)
42.7%
40.1% at 31 Dec. 2021
NOI(1)
EUR139.7m
(3.2)% on 2021
Combined Portfolio Value (OMV)(1)
EUR3.2bn
0.2% on 31 Dec. 2021
EPRA NRV per Share(1,3)
EUR8.29
(4.3)% on 31 Dec. 2021
EPRA Earnings per Share(1,2)
32 cents
18.5% on 2021
Dividends Paid in 2022 per Share
27 cents
(10.0)% on 2021
1. See Glossary (pages 152-154) for definitions.
2. See note 12 of the consolidated financial statements for calculation.
3. See note 23 of the consolidated financial statements for calculation.
4. See page 46 for further details.
5. See note 25 of the consolidated financial statements for calculation.
Total Revenue & Net Operating Income
2022 2021
Year ended 31 Dec. EUR'm EUR'm
-------------------------------- ------ ------
Contracted rent 180.9 176.4
Adjustment for lease incentives (31.1) (26.1)
Rental income 149.8 150.3
Service charge income 86.9 63.2
Other income 2.6 5.9
-------------------------------- ------ ------
Total Revenue 239.3 219.4
Operating Expenses (99.6) (75.1)
-------------------------------- ------ ------
Net Operating Income 139.7 144.3
-------------------------------- ------ ------
Globalworth generated total consolidated revenue of EUR239.3 million during 2022, up by 9.1% compared to EUR219.4 million generated during 2021.
Gross rental income which accounts for the majority of our revenue was EUR180.9 million, 2.6% higher compared to the year prior. Decreasing however to EUR149.8 million when accounting for costs associated of renting spaces in our portfolio, and which are amortised during the life of the leases. As such our year-on-year (net) rental income was marginally lower (0.3% lower) compared to 2021.
2022 2021
Year ended 31 Dec. EUR'm EUR'm
------------------------- ------ ------
Office 126.9 128.7
Mixed-Use 10.4 10.6
Industrial 11.1 9.5
Other 1.4 1.4
------------------------- ------ ------
Rental Income by Segment 149.8 150.3
------------------------- ------ ------
Like-for-like rental income on standing properties decreased by 2.8%, or EUR4.0 million, to EUR138.8 million in 2022. However, rental income from standing properties owned in Romania by the Group throughout 2021 and 2022 was higher by 2.7% at EUR68.1 million. In Poland, like-for-like rental income was lower by 7.6% at EUR70.7 million; however, the majority of this decrease (EUR5.2 million or 6.8%) was associated with Warta Tower (one of the properties held for sale) where TUIR Warta, the principal tenant in the building, vacated its premises at the end of 2021 and the building remaining only partially occupied in 2022. Excluding Warta Tower, rental income on our remaining Polish properties was marginally lower by EUR0.5 million or 0.8%.
Rental income received during the year from properties acquired or delivered in 2021 and 2022 was EUR11.0 million. This income was received from Globalworth Square, Supersam and Renoma (both under refurbishment) and three industrial facilities which were added to our portfolio in 2021 and had only partially contributed to the year prior, and three other industrial facilities that were acquired or delivered in 2022.
In 2022, we recorded a service charge income of EUR86.8 million, 37.6% higher compared to EUR63.1 million in 2021, due to the inclusion of new properties in the portfolio and an increase in service charge rate per square metre of 19.5% across our standing portfolio. This income is mainly linked to ancillary expenses that are typically reimbursed by tenants as the vast majority of our leases are triple-net, and include utility costs (energy, heating, water, electricity, insurance, etc.) and charges for services provided to tenants (cleaning, security, etc.).
In addition, we received EUR2.6 million for other services provided to tenants and partners which included fit-out services, marketing fees and other.
Revenue Share per Country
Year ended 31 Dec. 2022 (EUR'm)
Poland Romania
----- ------ -------
2021 51.0% 49.0%
----- ------ -------
Revenue Share per Country
Year ended 31 Dec. 2021 (EUR'm)
Poland Romania
----- ------ -------
2021 52.6% 47.4%
----- ------ -------
Net Operating Income ("NOI"), for the 12 months of 2022 was EUR139.7 million, after taking into account property and fit-out costs, lower by 3.2% compared to 2021. Overall operating expenses in our portfolio increased by EUR24.5 million to EUR99.6 million of which 89.8% were re-invoiced to tenants. The portion of our operating expenses not re-invoiced by tenants typically involved spaces available to be leased.
Net Operating Income Build Up
Year ended 31 Dec. (EUR'm)
NOI - 2021 NOI Change - Poland NOI Change - Romania NOI - 2022 ---------- ------------------- -------------------- ---------- 144.3 (8.6) 4.0 139.7 ---------- ------------------- -------------------- ----------
Net Operating Income Share per Country
Year ended 31 Dec. 2022 (EUR'm)
Poland Romania
----- ------ -------
2021 50.3% 49.7%
----- ------ -------
Net Operating Income Share per Country
Year ended 31 Dec. 2021 (EUR'm)
Poland Romania
----- ------ -------
2021 54.7% 45.3%
----- ------ -------
Adjusted Normalised EBITDA
We use Adjusted Normalised EBITDA as a key performance measure to evaluate our recurring operational results. As such, we exclude from the calculation non-operational and non-cash items including revaluation or capital gains, exceptional income or costs and other adjustments.
Our Adjusted Normalised EBITDA was EUR126.0 million (excluding share of minority interests EBITDA was EUR125.9 million), lower by 3.2% compared to 2021 (EUR130.2 million), as a result of lower NOI which was only partially offset by lower administrative and other expenses.
Adjusted Normalised EBITDA
2022 2021
Year ended 31 Dec. EUR'm EUR'm
------------------------------------------- ------ ------
Profit before net financing cost 35.4 110.9
Plus: Fair value loss/(gain) on investment
property 89.5 5.7
Plus: Depreciation on other long-term
assets 0.7 0.5
Plus: Other expenses 2.0 2.4
Plus: Acquisition costs 0.0 -
Plus: Other income (0.5) (1.1)
Plus: Foreign exchange (gain)/loss (0.9) (0.2)
Plus: Loss/(Gain) from fair valuation
of financial instrument (0.2) 0.4
Plus: Non-recurring expenses - 11.5
------------------------------------------- ------ ------
Adjusted Normalised EBITDA 126.0 130.2
------------------------------------------- ------ ------
Share of minority interest (0.1) -
------------------------------------------- ------ ------
Adjusted Normalised EBITDA (excluding
minority share) 125.9 130.2
------------------------------------------- ------ ------
Property Valuation
Over the past 12 months, property values in our markets have come under pressure, given the challenging macroeconomic and geopolitical environment. Also, operating performance, expanding yields, higher discount rates and capex invested in our portfolio, which is fully reflected in valuations and operations, further contributed to recording EUR89.5 million in negative revaluations in our consolidated property portfolio on 31 December 2022. Approximately 75.9% of the net fair value loss was in our office and mixed-use properties in Poland, while in Romania EUR24.1 million (or 26.9%) of net fair value loss in our standing portfolio was partially offset by 2.8% net fair gains in our industrial properties.
Year ended 31 2022 2021 Dec. EUR'm EUR'm ------------------ ------ ------ Fair value (loss) on investment property (89.5) (5.7) ------------------ ------ ------
Finance Costs and Income
Our finance costs mainly include net interest on bonds, bank loans and other financing sources such as a Revolving Credit Facility. In 2022 our total finance cost was EUR52.5 million, lower by EUR3.0 million compared to the prior year, a result of net lower indebtedness following the repaying of the remaining GW 17/22 bond in June, reducing the interest cost by EUR4.5 million, which was partially offset by the increase in EURIBOR base rates particularly in the second half of the year on existing and new financing facilities.
In addition, finance income was EUR2.7 million, higher by EUR1.0 million compared to 2021. Higher interest received from shareholder loans provided to finance our joint ventures and higher finance income (by 170% or EUR0.5 million) as a result of higher/positive interest rates collected on Euro, Romanian Leu (RON) and Polish Zloty deposits and current accounts balances were partially offset (EUR0.2 million) by changes in the fair value in financial instruments during the year.
Overall, net finance costs were EUR49.8 million for the twelve months of 2022, lower by 7.3% or EUR4.0 million compared to 2021.
Finance Cost & Income Year ended 31 2022 2021 Dec. EUR'm EUR'm ----------------- ------ ------ Finance Cost 52.5 55.5 Finance Income 2.7 1.7 ----------------- ------ ------ Net Finance Cost 49.8 53.8 ----------------- ------ ------
Share in Joint Venture
We hold interests in three joint ventures in Romania which principally focus on developing and managing industrial parks. In 2022 the share of profit in our joint ventures was EUR3.2 million, compared to EUR5.0 million in 2021, mainly due to the negative impact of the properties' revaluation. We have to note, however, that operating performance improved by EUR1.2 million, with losses excluding revaluations recorded lower by EUR2.7 million, to EUR2.4 million for the year, as we continue to invest in the three joint ventures and lease the available spaces in the facilities which are in their lease-up phase.
IFRS and EPRA Earnings
To measure our profitability, we measure both IFRS and EPRA Earnings. The latter, we consider as a more appropriate measure for real estate companies as it excludes non-cash or non-recurring items such as revaluation, capital gains, fair value adjustments and related deferred tax impact of adjustments made to profit after tax.
We recorded negative IFRS Earnings of EUR16.1 million (-8 cents per share) for 2022, compared to positive earnings of EUR47.5 million (21 cents per share) in 2021. This decrease is mainly attributed to the EUR89.5 million of revaluation losses recorded for the period compared to revaluation losses of EUR5.7 million in 2021.
Adjusting for revaluation losses with related deferred tax and the EUR11.5 million exceptional and non-recurring costs associated with the offer for Globalworth shares initiated in May 2021, the adjusted IFRS profit after tax for 2022 was marginally lower by EUR2.2 million compared to 2021, at EUR72.9 million for the year.
EPRA Earnings for 2022 were EUR71.6 million (or 32 cents per share), up by 21.2% from the prior year due to improved operating results, as lower operating performance was offset from lower cost base, net finance costs and income tax expenses (excluding deferred tax expense on investment property) compared to the same period in 2021.
IFRS Earnings Vs EPRA Earnings
Total Per Share
EUR'm cents
-------------------------------------------- ------ ---------
IFRS Earnings (17.0) (8)
FV loss on properties 89.5 40
Losses on disposal of investment properties 1.9
FV gain on financial instrument (0.2) 0
Deferred Tax (1.0) 0
JVs & Others (1.6) 0
-------------------------------------------- ------ ---------
EPRA Earnings 71.6 32
-------------------------------------------- ------ ---------
3. Assets
Note to 31 Dec. 31 Dec.
the financial 2022 2021
Assets statements EUR'm EUR'm
--------------------------------------- -------------- ------- -------
NCA - Investment property 3 2,945.5 2,966.1
CA - Investment property held for sale 126.0 130.5
--------------------------------------- -------------- ------- -------
Total Investment Property 3,071.5 3,096.6
NCA - Investments in joint ventures 27 68.0 48.9
Cash and cash equivalents 19 163.8 418.7
Other Assets 65.7 63.2
--------------------------------------- -------------- ------- -------
Total Assets 3,368.9 3,627.5
--------------------------------------- -------------- ------- -------
The two largest assets in our balance sheet are real estate/investment property and cash and cash equivalents, which account for over 96% of our total assets.
The balance sheet value of our investment property (freehold and properties held for sale) was EUR3,071.5 million as of 31 December 2022, EUR25.1 million or 0.8% lower compared to year-end 2021. This decrease was mainly due to the negative revaluations of real estate properties (EUR89.5 million) and disposal of residential units (EUR14.1 million), which offset the positive impacts mainly from the acquisition of our first small business units project in the north-west of Bucharest (EUR5.5 million), the purchase of land for future development (EUR1.8 million), and investments made in properties under development and other value accretive investments on standing properties (EUR70.3 million).
IP Movement Freehold EUR'm
----------------------------- ------- ------- -------
Poland Romania Total
EUR'm EUR'm EUR'm
----------------------------- ------- ------- -------
OMV Dec 21 1,612.8 1,539.0 3,151.8
JV properties - 86.7 86.7
Investment property - Dec 21 1,612.8 1,452.3 3,065.1
CAPEX 38.97 29.29 68.256
Fair value loss (67.3) (21.6) (88.8)
Apartment Disposals - (14.1) (14.1)
Asset acquisition - 7.4 7.4
Investment Property - Dec 22 1,584.5 1,453.3 3,037.8
JV properties - Dec 22 - 119.0 119.0
OMV Dec 22 1,5845 1,572.3 3,156.8
----------------------------- ------- ------- -------
Cash and cash equivalents at the end of the year were EUR163.8 million (EUR418.7 million on 31 December 21), mainly as a result of the repayment of the remaining EUR323.2 million of our inaugural EUR550 million bond at the end of June and the distribution of EUR59.8 million of dividend to shareholders during the year.
Our investment in joint ventures increased by EUR19.1 million, reaching EUR68.0 million on 31 December 2022, due to an EUR8.4 million investment in a new/third joint venture company mainly to finance the acquisition of new standing investment facility and facilitate further development, and a EUR6.7 million further investment in two other companies mainly to finance subsequent phases in the Constanta Business Park and Chitila Logistic Hub projects. In addition, for 2022 our share of profit in our joint ventures was EUR3.2 million and we received EUR0.8 million of net interest income.
Other assets mainly comprised trade and other receivables and equity investments (where we have a right of first offer) and accounted for 1.9% (EUR65.7 million) of our total assets as of 31 December 2022.
Total assets at the end of the period were EUR3,368.9 million, lower by 7.1% compared to 31 December 2021 (EUR3,627.5 million).
4. Liabilities
Note to 31 Dec. 31 Dec.
the financial 2022 2021
Liabilities statements EUR'm EUR'm
NCL - Interest-bearing loans and borrowings 14 1,433.6 1,285.6
CL - Interest-bearing loans and borrowings 14 21.6 348.3
------------------------------------------------ -------------- ------- -------
Total Interest-bearing loans and borrowings 1,455.2 1,633.9
Deferred Tax Liabilities (including liabilities
associated with the assets held for sale) 11.1 159.9 156.3
Other Current Liabilities 69.5 72.4
Other Non-Current Liabilities 26.8 26.2
------------------------------------------------ -------------- ------- -------
Total Liabilities 1,711.5 1,888.9
------------------------------------------------ -------------- ------- -------
Total Liabilities for the Group were EUR1,711.5 million at year-end 2022, EUR177.4 million lower compared to 31 December 2021. This decrease is mainly due to Interest-bearing Loans and Borrowings of the Group, which accounted for 85.0% of Total Liabilities, and were lower by EUR178.7 million on 31 December 2022.
Deferred Tax Liabilities were EUR159.9 million on 31 December 2022, EUR3.6 million higher compared to the prior year, mainly due to improved fiscal profits and the transition of certain subsidiaries to a taxable profit position.
Other Current and Non-Current Liabilities accounted for 5.6% of the Total Liabilities and included items such as tenant deposits, lease liabilities, and other trade and other payables. During the year, such amounts overall decreased by EUR2.3 million.
5. Interest-bearing Loans and Borrowings
Overview and Select Initiatives
The total consolidated debt for the Group at 31 December 2022 was EUR1,455.2 million (31 December 2021: EUR1,633.9 million) comprising mainly of medium to long-term debt, denominated entirely in Euro.
Our largest debt-related activity in 2022, involved the repayment from our own cash resources of the remaining EUR323.2 million of our inaugural EUR550 million bond that was due to mature in June 2022, thus resulting in Globalworth having no material debt maturing until March 2025.
In addition, during 2022 we:
-- repaid the coupon on the 2022 bond and also the annual coupons of the 2025 and 2026 bonds, -- entered into a six-year term loan agreement for EUR85 million with IFC, -- drew down on part of the RCF available to us until April 2024,
-- entered into a 10-year term loan agreement for EUR110 million with BCR/Erste Bank (both part of Erste Bank Group) for the refinancing of the logistics portfolio, not drawn at end of year 2022. Out of this amount, the Group is entitled to EUR95 million and the remainder will refinance one of our joint venture companies, and
-- entered into a three-year term new RCF for EUR50 million with Erste Bank, not drawn until end of year.
Interest-bearing Loans and Borrowings Profile
The total consolidated debt for the Group on 31 December 2022 was EUR1,455.2 million (31 December 2021: EUR1,633.9 million).
Most of the debt remained in unsecured facilities, which accounted for 75.4% (31 December 2021: 77.9%) of the total debt outstanding. Unsecured facilities included the two bonds maturing in March 2025 and July 2026 accounting for EUR950.0 million, the EUR85.0 million facility from the IFC, and EUR60.0 million from a Revolving Credit Facility. The remainder debt (24.6%) is secured with real estate mortgages, pledges on shares, receivables and loan subordination agreements in favour of the financing parties.
The weighted average interest rate cost for the Group remained low throughout the year, despite the higher inflationary and interest rate environment, as 80.7% of our debt carries a fixed interest rate charge and 4.1% of debt facilities are hedged through interest rates caps, therefore the weighted average cost of debt on 31 December 2022 increased marginally by 16 basis points to 2.89% compared to 2021 despite EURIBOR increasing by over 200 basis points during the year.
The high level of fixed interest rate debt ensures natural hedging to the Euro, the currency in which the most significant part of our liquid assets (cash and cash equivalents and rental receivables) is originally denominated and the currency for the fair market value of our investment property. Based on the Group's debt balances on 31 December 2022, an increase of 100 basis points in the EURIBOR would result in a higher interest expense of EUR2.8 million per annum.
The average maturity period of our debt remained above 3.0 years at 3.3 years (2021: 3.5 years), not including the 10-year term loan facility from BCR/Erste Bank undrawn on December 2022.
-- All our debt facilities are Euro denominated.
-- Interest is based either on one month, three months or six months EURIBOR plus a margin (19.3% of the outstanding balance compared to 8.5% at 31 December 2021).
During 2022, we repaid EUR2.8 million in bank debt principal amounts, the entire remaining balance of the 2022 Eurobond (EUR323.1 million) and EUR45.7 million of accrued interest on the Group's outstanding debt facilities, including EUR37.6 million in relation to the full annual coupon for the Eurobonds of the Company.
Debt Covenants
As of 31 December 2022, the Group was in compliance with all of its debt covenants.
The Group's financial indebtedness is arranged with standard terms and financial covenants, the most notable as at 31 December 2022 being the following:
Unsecured Eurobonds, Revolving Credit Facility and IFC loan
-- the Consolidated Coverage Ratio, with minimum value of 200% (150% applicable for the Revolving Credit Facility and IFC loan);
-- the Consolidated Leverage Ratio, with maximum value of 60%; -- the Consolidated Secured Leverage Ratio with a maximum value of 30%; and
-- the Total Unencumbered Assets Ratio, with minimum value of 125% (additional covenant applicable for the Revolving Credit Facility and IFC loan).
Secured Bank Loans
-- the debt service cover ratio ("DSCR")/interest cover ratio ("ICR"), with values ranging from 120% to 350% (be it either historic or projected); and
-- the LTV ratio, with contractual values ranging from 60% to 83%.
There have been no breaches of the aforementioned covenants occurring during the period ended 31 December 2022.
Weighted Average Interest Rate Versus Debt Duration to Maturity
30 Jun 31 Dec 30 Jun 31 Dec 30 Jun 31 Dec
20 20 21 21 22 22
---------------------- ------ ------ ------ ------ ------ ------
Weighted average
interest rate 2.52% 2.73% 2.73% 2.73% 2.55% 2.89%
Weighted average
duration to maturity 4.2 4.5 4.0 3.5 3.8 3.3
---------------------- ------ ------ ------ ------ ------ ------
Maturity Profile (by year) of the Principal Loan Outstanding at 31 Dec. 2022 (EUR million)
2023 2024 2025 2026 2027 2028 2029
EUR'm EUR'm EUR'm EUR'm EUR'm EUR'm EUR'm
------ ---------- ----------- ----------- ---------- ---------- -----------
- 94,314,000 662,184,849 400,000,000 62,260,000 85,000,000 151,825,000
------ ---------- ----------- ----------- ---------- ---------- -----------
6. Liquidity & Loan-to-Value Ratio ("LTVî)
Managing our resources has been a key area of focus for the Group, especially since the COVID-19 pandemic outbreak, and this careful management has carried on throughout this period of higher volatility.
As of 31 December 2022, the Group had cash and cash equivalents of EUR163.8 million (31 December 2021: EUR418.7 million), of which EUR7.8 million was restricted due to various conditions imposed by the financing banks.
In addition, the Group at year-end 2022 had undrawn EUR95.0 million (plus EUR15.0 million undrawn to be allocated to joint ventures) in secured committed debt facilities and a further EUR205 million in unsecured revolving credit facilities.
The Group's loan-to-value ratio on 31 December 2022 was 42.7%, compared to 40.1% on 31 December 2021, mainly due to the impact of negative revaluations in our standing properties, and capex invested in our portfolio which was not fully reflected in valuations and operations.
7. EPRA NRV
The EPRA Net Reinstatement Value ("NRV") is a measure used to highlight the value of a company's net assets on a long-term basis, on the assumption that the entities do not sell their assets.
EPRA NRV was EUR1,835.5 million as at 31 December 2022, lower by 4.3% compared to 31 December 2021 (EUR1,917.5 million). As a result, EPRA NRV per share also decreased to EUR8.29 per share (31 December 2021: EUR8.66 per share).
The decrease in EPRA NRV over the 12 months of 2022 was largely due to the negative revaluations of EUR89.5 million on our real estate property portfolio and the EUR59.8 million of dividends paid during the year to shareholders which offset the EUR12.5 million positive effect in our EPRA Earnings (EUR71.6 million for the year).
EPRA NRV per Share (EUR)
------------------------------ ------
EUR
------------------------------ ------
EPRA NRV Dec-21 8.66
Income statement
EPRA Earnings 0.32
FV loss on Property portfolio (0.40)
Non-EPRA Earnings 0.1
Changes in equity
Dividends (0.27)
JV and NCI adjustment (0.03)
EPRA NRV Dec-22 8.29
------------------------------ ------
8. Cash Flows
2022 2021
Year ended 31 Dec. EUR'm EUR'm
------------------------------------------- ------- -------
Operating Profit before Changes in Working
Capital 126.4 119.4
Changes in Working Capital (63.3) (54.1)
------------------------------------------- ------- -------
Cash Flows from Operating Activities 63.1 65.3
Cash Flows used in Investing Activities (73.8) (101.4)
Cash Flows used in Financing Activities (243.9) (72.8)
------------------------------------------- ------- -------
Net Increase in Cash and Cash Equivalents (254.6) (108.9)
------------------------------------------- ------- -------
Cash and Cash Equivalents at Year End 163.8 418.7
------------------------------------------- ------- -------
Cash flows from operating activities before working capital changes during 2022 was EUR126.4 million, higher by EUR7.0 million or 5.8% compared to 2021. Lower administrative expenses, also associated with the exceptional and non-recurring expenses incurred in 2021, and lower finance interest cost due to lower net lower indebtedness of the Group, which offset the lower net operating income.
Overall, cash inflow from operations for the 12 months of 2022 was EUR63.1 million, lower by 3.4% (or EUR2.2 million compared to 2021 as a result of higher interest and taxes paid by EUR1.2 million and negative changes in working capital by of EUR1.0m.
During the year, cash used in investments was EUR73.8 million, EUR27.6 million lower compared to EUR101.4 million in 2021. Despite a decrease in new acquisitions by EUR12.4 million compared to 2021, investment in 100% owned properties (standing and developments) reached EUR71.2 million (EUR2.4 million higher compared to 2021). Proceeds from sales, mainly from non-core residential units and ROFO assets, were EUR13.8 million higher compared to 2021, reaching EUR16.9 million for 2022.
Cash used in financing was EUR243.9 million in 2022 (EUR171.1 million higher compared to 2021), mainly associated with the repayment of EUR323.2 million for the 17/22 bond, the drawdown of EUR146.8 million from IFC and RCF facilities in the second half of the year and reduction of dividend distribution by EUR6.5 million to EUR59.8 million in 2022.
9. Dividends
2022 2021
Year ended 31 Dec. EUR'm EUR'm
--------------------------------- ------ ------
Dividends Paid - EUR m 59.8 66.3
--------------------------------- ------ ------
Dividends Paid per Share - Cents 27 30
--------------------------------- ------ ------
Globalworth distributes bi-annually at least 90% of its EPRA Earnings to its shareholders. As a result, in March 2022, it paid an interim dividend of 13 cents per share (EUR28.8 million) in respect of the six-month period ended 31 December 2021. In addition, in September 2022, it paid the first interim dividend in respect of the six-month period ended 30 June 2022 of 14 cents per share (EUR31.0 million).
In total in 2022 the Group paid EUR59.8 million or 27 cents per share in dividends.
The results for the period are set out in the consolidated statement of comprehensive income on page 84.
EPRA Performance Measures Snapshot
Our performance under the EPRA guidelines
The European Public Real Estate Association ("EPRA"), is a widely recognised market standard guidance and benchmark provider for the European real estate industry.
The following performance indicators have been prepared in accordance with best practices as defined by EPRA in its Best Practices Recommendations guide, available on EPRA's website (www.epra.com).
Figures in EUR million,
unless otherwise
indicated 2022 2021 Definition Purpose pgs
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
Metric making adjustments
to the NAV per the IFRS
financial statements to
provide stakeholders with
the most relevant information
on the fair value of the
assets and liabilities
of a real estate investment
company, assuming that
entities never sell assets
and aims to represent
EPRA Net Reinstatement the value required to
EPRA NRV 1,835.50 1,917.46 Value. rebuild the entity. 50
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
EPRA NRV per share EPRA Net Reinstatement
(EUR) 8.29 8.66 Value per share. 50
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
Metric measuring a company's
underlying operating results
and an indication of the
extent to which current
Earnings from operational dividend payments are
EPRA Earnings 71.6 59.10 activities. supported by earnings. 47
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
EPRA Earning per Earnings from operational
share (EUR) 0.32 0.27 activities per share. 47
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
Annualised rental income
based on the cash rents
passing at the balance
sheet date, less non-recoverable
property operating expenses,
divided by the market
value of the property,
EPRA Net Initial increased with (estimated) A comparable measure for
Yield ("NIY") (%) 5.2% 5.0% purchasers' costs. portfolio valuations. 149
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
This measure incorporates
an adjustment to the EPRA
NIY in respect of the
expiration of rent-free
periods (or other unexpired
lease incentives such
EPRA Topped-up NIY as discounted rent periods A comparable measure for
(%) 5.8% 5.7% and step rents). portfolio valuations. 149
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
Estimated Market Rental A 'pure' (%) measure of
Value (ERV) of vacant investment property space
space divided by ERV of that is vacant, based
EPRA Vacancy (%) 14.0% 13.0% the whole portfolio. on ERV. 149
------------------------ -------- -------- ---------------------------------- ------------------------------- ---
Financial statements
Consolidated statement of comprehensive income
For the year ended 31 December 2022
31 December 31 December
2022 2021
Note EUR'000 EUR'000
------------------------------------------- ---- ----------- -----------
Revenue 7 239,251 219,350
Operating expenses 8 (99,571) (75,098)
------------------------------------------- ---- ----------- -----------
Net operating income 139,680 144,252
------------------------------------------- ---- ----------- -----------
Administrative expenses 9 (13,712) (25,622)
Acquisition costs (7) -
Fair value loss on investment
property 3.4 (89,471) (5,738)
Share-based payment expense 24 - (532)
Depreciation and amortisation
expense (673) (536)
Other expenses (2,013) (1,851)
Other income 524 1,051
Foreign exchange gain 851 214
Loss from fair value of financial
instruments at fair value through
profit or loss 16 222 (386)
------------------------------------------- ---- ----------- -----------
Profit before net financing cost 35,401 110,852
------------------------------------------- ---- ----------- -----------
Finance cost 10 (52,532) (55,539)
Finance income 2,694 1,749
------------------------------------------- ---- ----------- -----------
Share of profit of equity-accounted
investments in joint ventures 27 3,219 5,010
------------------------------------------- ---- ----------- -----------
Loss/profit before tax (11,218) 62,072
------------------------------------------- ---- ----------- -----------
Income tax expense 11 (4,886) (14,583)
------------------------------------------- ---- ----------- -----------
Loss/profit for the year (16,104) 47,489
------------------------------------------- ---- ----------- -----------
Items that will not be reclassified
to profit or loss
------------------------------------------- ---- ----------- -----------
Loss on equity instruments designated
at fair value through other comprehensive
income (5,391) -
------------------------------------------- ---- ----------- -----------
Total comprehensive income for
the year (21,495) 47,489
------------------------------------------- ---- ----------- -----------
31 December 31 December
2022 2021
Note EUR'000 EUR'000
(Loss)/profit attributable to: (16,104) 47,489
- ordinary equity holders of the
Company (16,961) 47,489
---------------------------------------- ---- ----------- -----------
- non-controlling interests 857 -
---------------------------------------- ---- ----------- -----------
Total comprehensive income attributable
to: (21,495) 47,489
---------------------------------------- ---- ----------- -----------
- ordinary equity holders of the
Company (22,352) 47,489
---------------------------------------- ---- ----------- -----------
- non-controlling interests 857 -
---------------------------------------- ---- ----------- -----------
Earnings per share (EUR cents)
---------------------------------------- ---- ----------- -----------
- Basic 12 (8) 21
- Diluted 12 (8) 21
---------------------------------------- ---- ----------- -----------
Financial statements
Consolidated statement of financial position
As at 31 December 2022
2022 2021
Note EUR'000 EUR'000
--------------------------------- ---- --------- ---------
ASSETS
Investment property 3 2,945,460 2,966,080
Goodwill 12,349 12,349
Advances for investment property 5 4,393 3,436
Investments in joint ventures 27 67,967 48,908
Equity investments 7,521 12,109
Other long-term assets 1,784 2,083
Prepayments 226 338
Deferred tax asset 11.1 161 151
--------------------------------- ---- --------- ---------
Non-current assets 3,039,861 3,045,454
--------------------------------- ---- --------- ---------
Financial assets at fair value
through profit or loss 16 3,554 7,324
Trade and other receivables 18 22,337 16,208
Contract assets 13 9,967 6,106
Guarantees retained by tenants 98 885
Income tax receivable 840 117
Prepayments 2,430 2,104
Cash and cash equivalents 19 163,767 418,748
--------------------------------- ---- --------- ---------
202,993 451,492
--------------------------------- ---- --------- ---------
Investment property held for
sale 3.3 126,009 130,537
--------------------------------- ---- --------- ---------
Total current assets 329,002 582,029
--------------------------------- ---- --------- ---------
Total assets 3,368,863 3,627,483
--------------------------------- ---- --------- ---------
2022 2021
Note EUR'000 EUR'000
EQUITY AND LIABILITIES
Issued share capital 21 1,704,476 1,704,476
Treasury shares 24.5 (4,859) (4,917)
Fair value reserve of financial assets
at FVOCI (5,469) -
Share-based payment reserve 24 156 156
Retained earnings (37,798) 38,914
--------------------------------------- -------- --------- ---------
Equity attributable to ordinary equity
holders of the Company 1,656,506 1,738,629
--------------------------------------- -------- --------- ---------
Non-controlling interests 862 -
--------------------------------------- -------- --------- ---------
Total equity 1,657,368 1,738,629
--------------------------------------- -------- --------- ---------
Interest-bearing loans and borrowings 14 1,433,631 1,285,641
Deferred tax liability 11.1 154,866 150,713
Lease liabilities 3.2 19,861 18,762
Guarantees retained from contractors 1,995 2,661
Deposits from tenants 3,897 3,844
Trade and other payables 1,034 956
--------------------------------------- -------- --------- ---------
Non-current liabilities 1,615,284 1,462,577
--------------------------------------- -------- --------- ---------
Interest-bearing loans and borrowings 14 21,600 348,279
Guarantees retained from contractors 3,652 3,361
Trade and other payables 35,679 39,788
Contract liability 13 1,743 1,940
Other current financial liabilities 67 261
Current portion of lease liabilities 3.2 1,669 1,303
Deposits from tenants 17,477 16,068
Income tax payable 382 550
--------------------------------------- -------- --------- ---------
82,269 411,550
--------------------------------------- -------- --------- ---------
Liabilities directly associated with
the assets held for sale 3.2, 3.3 13,942 14,727
--------------------------------------- -------- --------- ---------
Total current liabilities 96,211 426,277
--------------------------------------- -------- --------- ---------
Total equity and liabilities 3,368,863 3,627,483
--------------------------------------- -------- --------- ---------
The financial statements were approved by the Board of Directors on 23 March 2023 and were signed on its behalf by:
Andreas Tautscher
Director
Financial statements
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
Note EUR'000 EUR'000
--------------------------------------- ---- -------- --------
Profit/(loss) before tax (11,218) 62,072
Adjustments to reconcile profit/(loss)
before tax to cash flows from
operating activities
Fair value loss on investment
property 3.4 89,471 5,738
Loss on sale of investment property 1,851 471
Share-based payment expense 24 - 532
Depreciation and amortisation
expense 673 536
Net increase in allowance for
expected credit losses 20.2 44 1,134
Foreign exchange (gain)/loss (851) (214)
Loss from fair valuation of financial
instrument at fair value through
profit or loss 16 (222) 386
Share of (profit) of equity-accounted
joint ventures 27 (3,219) (5,010)
Finance income (2,694) (1,749)
Financing cost 10 52,532 55,539
--------------------------------------- ---- -------- --------
Operating profit before changes
in working capital 126,367 119,435
(Increase) in contract assets,
trade and other receivables (10,547) (4,513)
(Decrease) in contract liabilities,
trade and other payables (6,435) (3,872)
Interest paid (45,662) (44,641)
Interest received 723 267
Income tax paid (2,168) (1,949)
Interest received from joint ventures 797 536
--------------------------------------- ---- -------- --------
Cash flows from operating activities 63,075 65,263
--------------------------------------- ---- -------- --------
2022 2021
Note EUR'000 EUR'000
---------------------------------------------- ---- --------- ---------
Investing activities
Expenditure on investment property completed
and under development or refurbishment (71,235) (68,846)
Payment for land acquisitions (1,732) -
Advances for investment property 4,100 -
Proceeds from sale of land 502 -
Payment for acquisition of investment
property (5,584) (18,011)
Proceeds from sale of investment property 12,411 3,010
Investment in financial assets at fair
value through profit or loss 16 (38) (143)
Proceeds from sale of financial assets
through profit and loss 4,030 85
Payments for investment in equity investments 17 (803) (1,740)
Investment in and loans given to joint
ventures 27 (28,510) (23,354)
Repayment of loan from joint ventures 27 13,429 8,111
Payment for purchase of other long-term
assets (371) (468)
---------------------------------------------- ---- --------- ---------
Cash flows used in investing activities (73,801) (101,356)
---------------------------------------------- ---- --------- ---------
Financing activities
Proceeds from issuance of share capital 24.1 - 100
Proceeds for issuance of new shares
in subsidiary
from non-controlling interest 5 -
Proceeds from interest-bearing loans
and borrowings 14 146,825 -
Repayment of interest-bearing loans
and borrowings 14 (325,963) (2,796)
Payment of interim dividend to equity
holders of the Company 22 (59,771) (66,286)
Payment for lease liability obligations 3.2 (2,289) (1,659)
Payment of bank loan arrangement fees
and other financing costs 15 (2,725) (2,168)
---------------------------------------------- ---- --------- ---------
Cash flows used in financing activities (243,918) (72,809)
---------------------------------------------- ---- --------- ---------
Net (decrease) in cash and cash equivalents (254,644) (108,902)
Effect of exchange rate fluctuations
on cash and bank deposits held (337) (151)
Cash and cash equivalents at the beginning
of the year 19 418,748 527,801
---------------------------------------------- ---- --------- ---------
Cash and cash equivalents at the end
of the year 19 163,767 418,748
---------------------------------------------- ---- --------- ---------
Financial statements
Consolidated statement of changes in equity
For the year ended 31 December 2022
Fair
value
reserve
of
Issued Share-based financial
share Treasury payment assets Retained Non-controlling Total
capital shares reserve at FVOCI earnings Total interests Equity
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
As at 1
January 2021 1,704,374 (12,977) 6184 - 57,783 1,755,364 - 1,755,364
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
Shares issued
to the
Executive
Directors
and other
senior
management
employees - 339 (339) - - - - -
Interim
dividends - 72 - - (66,358) (66,286) - (66,286)
Share-based
payment
expense under
the
subsidiaries'
employees
share award
plan - - 532 - - 532 - 532
Shares vested
under the
subsidiaries'
employees
share award
plan - 1,253 (1,253) - - - -
Shares issued
for cash
under
Executive
share option
plan 102 - (2) - - 100 - 100
Cash-based
portion of
deferred
annual
bonus plan
converted to
deferred
shares
settlement - - (79) - - (79) - (79)
Shares issued
for long-term
plan
termination
and employees
incentive
plan - 1,476 33 - - 1,509 - 1,509
Shares vested
under the
deferred
annual
bonus
incentive
plan - 4,920 (4,920) - - - - -
Total
comprehensive
income for
the year - - - - 47,489 47,489 - 47,489
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
As at 31
December 2021 1,704,476 (4,917) 156 - 38,914 1,738,629 - 1,738,629
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
Interim
dividends 22 - 58 - - (59,829) (59,771) - (59,771)
Shares issued
in a newly
acquired
subsidiary - - - - - - 5 5
Settlement of
fair value
reserve of
equity
instruments
designated at
FVOCI in cash 17 - - - (78) 78 - - -
Total
comprehensive
income for
the year - - - (5,391) (16,961) (22,352) 857 (21,495)
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
As at 31
December 2022 1,704,476 (4,859) 156 (5,469) (37,798) 1,656,506 862 1,657,368
-------------- ---- --------- -------- ----------- --------- --------- ------------ --------------- ---------
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March 24, 2023 03:00 ET (07:00 GMT)
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