CORE BUSINESS: PROPERTY-OWNING

1. DESCRIPTION OF CLIENT PORTFOLIO

Gmp develops a property-owning business model based on long-term leasing contracts with companies that have a strong track record of financial solvency and operate in a broad range of sectors. Moreover, historically, it achieves high renewal figures as a result of client satisfaction with the quality, services and management of buildings they occupy.

As of 31 December 2018, more than 60% of the existing rental contracts had an end date of above four years.

  • Gmp’s top 20 tenants (rental revenue 2018)
  • Breakdown of tenants by business sector (rental revenue)
  • Breakdown of rental contacts by year (% m² expired)

Gmp develops a property-owning business model based on long-term leasing contracts with companies that have a strong track record of financial solvency and operate in a broad range of sectors. Moreover, historically, it achieves high renewal figures as a result of client satisfaction with the quality, services and management of buildings they occupy.

As of 31 December 2018, more than 60% of the existing rental contracts had an end date of above four years.

  • Gmp’s top 20 tenants (rental revenue 2018)
  • Breakdown of tenants by business sector (rental revenue)
  • Breakdown of rental contacts by year (% m² expired)

2. OCCUPANCY

2018 was a year of intense commercial activity, as contracts for office space of 28,000 m² were signed, out of which 19,000 m² were like-for-like portfolio and 9,400 m² at the Oxxeo building, which reached 69% occupancy in its first year of operations. Outgoing tenants increased to approximately 14,600 m². As a result of the above, there was a positive net absorption of close to 14,000 m², although occupancy stayed at 90% due to the rise in GLA -Oxxeo. In addition, contracts for 36,000 m² were renewed.

The graph below shows the evolution of Gmp’s portfolio in 2018 in detail.

  • Evolution of occupancy of Gmp’s office portfolio in 2018 (000 m²)

2018 was a year of intense commercial activity, as contracts for office space of 28,000 m² were signed, out of which 19,000 m² were like-for-like portfolio and 9,400 m² at the Oxxeo building, which reached 69% occupancy in its first year of operations. Outgoing tenants increased to approximately 14,600 m². As a result of the above, there was a positive net absorption of close to 14,000 m², although occupancy stayed at 90% due to the rise in GLA -Oxxeo. In addition, contracts for 36,000 m² were renewed.

The graph below shows the evolution of Gmp’s portfolio in 2018 in detail.

  • Evolution of occupancy of Gmp’s office portfolio in 2018 (000 m²)
  • The biggest movements were as follows:

Incoming tenants

  • Grant Thornton at Castellana 81.
  • WeWork at Castellana 77, extending the space rented in 2017.
  • Capgemini at Oxxeo.
  • UniversalPay at Condesa de Venadito 1.

Renewals

  • EDP at Parque Norte.
  • IMS at Condesa de Venadito 1.

Outgoing tenants

  • Carlson Wagonlit Travel at Barajas 1, asset sold in March 2019.
  • Banco Popular at Condesa de Venadito 1, space rented immediately after to UniversalPay.

The breakdown of evolution of occupancy is shown below according to the location of the asset.

  • Evolution of the occupancy rate by location

The breakdown of evolution of occupancy is shown below according to the location of the asset.

  • Evolution of the occupancy rate by location

3. AVERAGE RENTS

The average rent for the financial year 2018 was 18.0€/m², 4.6% up on the previous year. The breakdown of the evolution of average rents is shown below according to the location of the asset.

  • Evolution of average rents by location (€/m2).

The average rent for the financial year 2018 was 18.0€/m², 4.6% up on the previous year. The breakdown of the evolution of average rents is shown below according to the location of the asset.

  • Evolution of average rents by location (€/m2).

4. PROJECTS / INVESTMENTS

CASTELLANA 81

As planned, renovation work on the top five floors of Castellana 81, from floor 24 to 28, was completed in 2018, which the historical tenant of the building, BBVA, had continued to lease until 31 December 2017.

In May 2018, Castellana 81 obtained WELL Gold certification and became the first WELL office building in Spain and the fifth building in Europe to obtain the WELL Building Gold Standard in the Core & Shell category.

Over this financial year, Castellana 81 has received the following awards:

  • “Prize for Best Renovation 2017” from the AEO (Spanish Office Association).
  • “Best Non-Residential Property Project” at the ASPRIMA-SIMA Awards.
  • “COAM Award -Madrid Institute of Architects- 2018” for the renovation of the building.

OXXEO

In April 2018, Gmp completed work on this new office development located in Las Tablas in north Madrid, one of the business areas of the capital enjoying highest growth.

In May 2018, Oxxeo obtained LEED Platinum certification for Core & Shell and became the first office building in Las Tablas to reach the highest level of sustainability according to the LEED certification system awarded by the US Green Building Council (USGBC). In addition, in May 2018, it also became the first new office building in Spain to gain DIGA (Hallmark of Level of Accessibility) 5-star certification.

At the time of writing this report, Oxxeo is in the final phase of the WELL Building Standard certification process. It aims to obtain one of the highest levels, Gold standard.

ARQBÓREA

In October 2018, Gmp started work on this new office development located in Las Tablas in north Madrid. The project, which boasts a modern and sustainable design, was created by the prestigious architecture studio ORTIZ LEÓN. Its architectural features double skin with terraces and vegetation on the façades with greatest exposure to sunlight. This efficient design feature protects the building from direct sunlight and provides higher levels of comfort and wellbeing for occupants.

At the time of writing this report, excavation work has been carried out and the foundations laid and structural work has started. Construction work on the building is expected to be completed by December 2020.

5. EPRA RATIOS

Gmp has been an associate member of EPRA since 2016, when it adopted the association’s recommendations on best practices in reporting.

A breakdown of EPRA Performance Measures is shown below.

  • EPRA 2017-2018 Performance Measures
  • Breakdown of the calculation of EPRA data 2017-2018
  • EPRA 2017-2018 Performance Measures
  • Breakdown of the calculation of EPRA data 2017-2018
  • EPRA CAPEX
  • EPRA CAPEX