Vbare Iberian Properties SOCIMI S.A. Opportunities in the Spanish Residential Market January 17, 2017
The Opportunity Economic Confidence Index 70 • Real Estate capital values in Spain, are at the 60 lowest levels seen in recent years, representing a unique opportunity for future capital gains . 50 40 • The Spanish economy has reached the floor 30 and is recovering in most of the key economic and 20 real estate indicators. 10 • Expected positive evolution of both the rental 0 and the sale price of the Spanish residential market in the next 3-5 years. Economic Confidence Current Economic Situation • Highest levels of GDP growth in the EU Economic Expectations (3.5% GDP growth in 2015, and 2016 in the same Source: Centro de Investigaciones Sociologicas (CIS) range) Nominal GDP (seasonally adjusted) Unemployment rate evolution (%) 300,000 15.0% 30 280,000 25 10.0% 260,000 20 240,000 220,000 5.0% 15 200,000 10 0.0% 180,000 5 160,000 -5.0% 140,000 0 120,000 100,000 -10.0% 00Q1 00Q3 01Q1 01Q3 02Q1 02Q3 03Q1 03Q3 04Q1 04Q3 05Q1 05Q3 06Q1 06Q3 07Q1 07Q3 08Q1 08Q3 09Q1 09Q3 10Q1 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 14Q1 14Q3 15Q1 15Q3 16Q1 16Q3 Spain Madrid Source: Instituto Nacional de Estadística (INE) Source: Instituto Nacional de Estadística (INE)
Why Residential? • Prices are at all time low – c. construction cost • Although Spain is traditionally an owners market (more than 80% of Spain’s population own their homes), the Spanish government has taken measures to increase the rental market in the country , including, among others, establishing the Socimi regime • High rental demand – time to lease app. 3 weeks • No institutional landlords/multifamily assets – difficult to acquire a critical mass • Average rent increased by 6.7% in 2016 – pushing yields higher.
Spain Residential Market Overview (1/2) Residential Housing - Total transactions (value) • Since 2008, major global players such as Apollo, 50,000 Blackstone, Fortress, TPG and others have 45,000 invested significant amounts in the Spanish RE 40,000 35,000 € Million Market. 30,000 25,000 • 40% of the amount invested in Spanish RE in 2015 20,000 15,000 (~ € 15 Billion), were invested in Madrid, ranking 10,000 the city at number 5 in Europe in real estate 5,000 0 investments. Spain Madrid Source: Ministerio de Fomento Rental evolution Madrid ( € /m2) Residential Prices Madrid vs. Spain ( € /m2) (Madrid) 3,500.0 16.0 3,000.0 14.0 2,500.0 12.0 € /m2 2,000.0 10.0 € /m2 1,500.0 8.0 1,000.0 6.0 500.0 4.0 0.0 2.0 0.0 Spain Madrid Source: Ministerio de Fomento Source: Idealista Index 2
Spain Residential Market Overview (2/2) The Time is Now! “Renting will consolidate as the main way “In general the rental prices will stabilize in to fly the nest, as happens in countries with the following years, because the lease a similar development to Spain” market has arrived to Spain to stay” (Spanish Property Insight - February 2016) (Fotocasa Index - May 2016) “The rental market is expected to continue “ As long as the recovery of the real estate to expand in 2016 and the ratio of rented market consolidates, residential become housing (14.9% in 2014) will continue to more attractive for investors. Acquiring converge towards the Eurozone average.” residential assets , is nowadays a high return operation with a low risk ” (CBRE - February 2016) (Expansion - March 2016) 3
Structure Socimi Structure Zero Taxation (capital gains and rents) 95% reduction on Transfer Tax (6% in the Madrid area) Going public within 2 years • Originally introduced in 2009 to support investments in Spanish Real Estate following the financial crisis • There are several large SOCIMI’s that are traded on Madrid’s main market (Merlin, Lar, Hispania etc..), and 27 Socimis traded on the MAB, most of which are not truly public • VBA is the first dedicated residential public SOCIMI – on December 2016 the company registered on the MAB 10
Strategy • Acquiring distressed mid level residential assets in main cities • Acquisitions done mainly from banks or other distressed sellers, at prices significant lower than current market prices (backed by an international non affiliated appraisal) creating significant capital gain in the short term . • Dedicated on the ground local operational and managerial personnel Property Acquisition Refurbishment Lease Origination Management Creating Substantial Added Value Over Time 10
Examples of our assets 13
Contact Vbare Iberian Properties SOCIMI S.A. Yair Ephrati C/ Almagro, 3 – 5º Dcha. Director 28010 Madrid (Spain) T +972 3 622 3381 M +972 54 4866 866 yair@valuebase.co.il 14
Disclaimer This presentation has been prepared by Vbare Iberian Properties SOCIMI , S.A. (“ VBA ”). This presentation does not constitute and should not be construed as an offer to sell or issue, or the solicitation of an offer to buy or acquire securities. This Presentation is solely for informational purposes and should not be treated as investment advice. In addition, this Presentation does not take into account the specific investment objectives, financial situation or particular needs of any recipient in any jurisdiction nor does it contain all the information necessary to fully evaluate any investment or transaction. Accordingly, no part of this Presentation nor the fact of its distribution should form the basis of, or be relied upon in connection with, any contract, commitment or investment decision in relation to any securities or otherwise. This presentation was not prepared for the purpose of being used in connection with any offering of securities. VBA does not make any representation, warranty or undertaking, express or implied, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information, opinions or projections contained in the Presentation. VBA shall have no liability whatsoever for any loss whatsoever arising from any use of this Presentation or its contents or otherwise arising in connection with this Presentation. Some of the information contained in the presentation including, among other things, forecasts, goals, assessments and estimates related to events and or future matters, realization is uncertain and is beyond the control of VBA (the " Forward Looking Information "). Forward Looking Information as stated above does not constitute a proven fact and is based solely on VBA’s subjective estimates. Whether or not the information wil l materialize and will be affected, amongst other things, by risk factors inherent in the Public Investment Vehicle’s operations, as well as developments in the general environs and external factors that affect the Public Investment Vehicle's operation, which cannot be estimated in advance and that are not within the control of VBA. This Presentation and the information contained in the Presentation are provided as of the date of this Presentation and are subject to change ,and VBA is not under any obligation to update, complete, revise, verify, amend or keep current the information contained herein. Furthermore, anyone who is interested in making an investment, should consult with legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that he deems necessary, and should make his own investment decisions based upon his own judgment and advice from such advisers as he deems necessary and not upon any view expressed by VBA or expressed in this Presentation. This Presentation shall be governed and construed in accordance with the laws of Spain without regard to its conflict of law provisions and the receiver of this Presentation hereby irrevocably consents to the exclusive jurisdiction of, and venue in, the competent jurisdiction located in Madrid, Spain.
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