A Nn Ual R Epo Rt

2020 Annual Report Annual 1 Contents 01 That’s us ––––––––––––––––––––––––––––––––––––––––––– 04 02 Financial Highlights ––––––––––––––––––––––––––––––––– 10 03 Key Projects –––––––––––––––––––––––––––––––––––––––– 12 04 Group Overview –––––––––––––––––––––––––––––––––––– 28 05 Countries Overview ––––––––––––––––––––––––––––––––– 34 06 Board of Directors –––––––––––––––––––––––––––––––––– 52 07 Our People –––––––––––––––––––––––––––––––––––––––– 54 08 ESG ––––––––––––––––––––––––––––––––––––––––––––––– 58 09 Business Review –––––––––––––––––––––––––––––––––––– 62 10 How We Managed Our Assets –––––––––––––––––––––––– 66 11 Investment Management –––––––––––––––––––––––––––– 72 12 Financial Review –––––––––––––––––––––––––––––––––––– 74 13 Consolidated Financial Statements –––––––––––––––––––– 80 2 3 01 That’s us 01 That’s us I think we can all say That’s us That’s 2020 was one of the most challenging years we’ve ever experienced. But as often happens in difficult times, people have become more open to new ideas. Perhaps one of the most obvious signs of this is the broader faith employers have in their people working from home. What was once considered a prized job benefit is now growing to become a modus operandi of the way we all operate. The only delays were down to supply chain issues. This meant we were able to complete five A new approach to the office? buildings during the year and saw huge success This has unquestionably accelerated a change in terms of commercialisation, despite the in the way we think about workspaces. Offices challenging environment. We also secured 100% are evolving from rows of desks to collaborative funding for all our projects under construction – spaces with productivity-boosting features. And they’re now all covered for full completion. businesses will need more flexibility in terms of usage, size and lease terms. Success across Europe There were other highlights too. In Hungary, Yes, the pandemic has affected occupational we leased over 90% of Agora – and have since activity. Tenants have put off decisions until seen Huawei sign a large deal. And Bratislava saw the future is clearer, and rental levels are under progress on all our projects under construction, pressure as a result. However, we expect to see from Nivy Mall to New Apollo – with the latter a full recovery in the medium term. So, while signing an important global anchor tenant IBM transactional and financial liquidity are under in February of this year. pressure, the long-term fundamentals in the sector remain solid. Varso Tower in Warsaw is now the EU’s tallest structure at 310 m and offers new tenants an Facing up to COVID-19 address in one of the world’s most iconic new Our employees have been our first priority buildings. Elsewhere in the city, one of Forest’s throughout the pandemic. Yet, even as we buildings was smoothly completed, and we’ve embedded new safety and escalation protocols since signed a contract with French home – across both sites and offices – we kept all 11 improvement business Leroy Merlin, who’ll make of our buildings under construction moving it their new 12,358 sq m HQ. 01 smoothly forward. 4 5 01 That’s us 01 That’s us Our UK colleagues are continuing work on Bloom A bright future Clerkenwell in London. With finance secured, we expect Financially, we are now very well positioned – the occupational market there to take off once the especially after raising €90m by tapping into the restrictions are lifted. Equally, we now have all the permits bond markets in the Czech Republic, Poland and for One Waterloo, – huge congratulations to the team – Slovakia from December to March 2021. and as the market stabilises the demolition phase will begin. The fledgeling One Worship Square project is now ready to Our key 2021 targets now revolve around see more concentrated activity over the coming months too. replenishing our development pipeline, mainly in Germany and Poland, and founding the REIT vehicle, which will hold our completed developments. We also expect our Investment Management business to grow the assets under Things are also moving management, mainly through its flagship forward at speed in Germany. CE REIT fund. Our DSTRCT.Berlin project Although occupational activity last year was is progressing according to Going forward, we’ll continue building our core restricted due to COVID-19, we are already plan and several large leasing development business by focusing on high-quality seeing a gradual return to normal, with leasing deals should be pushed modern workspace products: super-prime core, activity picking up at the beginning of 2021 – through shortly. One of them, well-connected locations crafted with exceptional a strong sign for healthy demand in the future. e-commerce furniture brand, quality and sustainability standards to create home24, take more than healthy, stimulating and modern workspaces. We are also seeing the results of our well- 13,000 sq m in May 2021. established focus on wellbeing and productivity. The function of the workspace will innovatively Clients associate us with people-centrism, and this shift from desks and chairs towards collaborative, gave us a competitive advantage during and after healthy workspaces and supportive environments. the pandemic. Although 2020 saw a net loss of €184 million and our NAV So our strategy, with wellbeing and productivity at as a result declined to €1.514 billion, we confidently expect its heart, will garner positive results. Of course, success depends completely on our to capitalise on our development pipeline across all four people. To that end, we have created a new markets and use new business opportunities to help us get mentoring programme that launches later fully back on track. In fact, the topic of this year. And, following research, we have responsibility and the also adjusted how we set goals and recognise performance – putting more weight on variable overall ESG policy is rewards. The result is that we all are now even Looking forward more invested in the success of HB Reavis. The year brought changes to our business strategy. a pivotal part of our value We discontinued our future development activities in Hungary creation and product Let me finish by thanking all of my colleagues to focus on our projects in London, Berlin, Warsaw and Bratislava. and our partners for their commitment. I’m in development. We have awe of the way they’ve balanced the demands of So, our updated 2025 Group Strategy can be distilled into four areas: home life and work over the last 12 months while incorporated ESG delivering such great performance. into our development I very much look forward to seeing what we can retain completed projects in a soon- process, making it a key all achieve together – and seeing the progress in to concentrate on our to-be-created separate investment person – when all the restrictions are lifted. four core countries vehicle rather than sell them component in ensuring our products comply Marian Herman with today’s standards. 1 2 We aim to become evolve our roll out the Way We Work (WWW) market leaders in this Workspace as a Service initiative, which helps us efficiently area by securing future- portfolio run projects with clear expectations proof developments. 6 3 4 7 01 That’s us 01 That’s us I’ve been associated with HB Reavis for some 13 years now, but I’ve never been more proud to be part of the company. Financially, the year was not as rewarding as we hoped. Our clients went through difficult times staying safe and managing employees at a distance. This led to uncertainties that resulted in the demand for leases stagnating, and in some cases longstanding deals were cancelled or Maarten Hulshoff postponed. Agora, however, was an impressive exception, leasing almost 71,000 sq m. Overall, we managed to keep construction going despite supply chain disruptions, but increases in the price of materials did lead to a few cases of cost It’s at times of pressure overruns. As a result, we do have a leasing backlog. that the quality of our What is positive, however, people really shines is our impressive through. And over the last This was primarily down to the great strides As for the office developments themselves, we we’ve made with our Workspace as a Service will be even more selective and, what I like to performance in Q1 year, I’ve seen so many (WaaS) strategy. During 2020, we focused further call, laser-beam focused on developing prime on providing advisory services to our clients – properties. Making decisions based on location, 2021. It’s clear that among us manage our enhancing employee satisfaction, productivity, connectivity and sustainability, these will become businesses feel the end is business in a proactive, health and wellbeing on one hand, and raising the best possible environments for our clients and sustainability standards on the other. their employees. in sight and want to make hands-on manner – always In fact, environmental, social and governance Effectively, I expect to see an evolution from ambitious decisions so keeping our clients’ have been at the top of our agenda. Last year being a pure developer recycling our capital they’re best-placed to interests at the forefront saw the introduction of a new strategy and set of by exiting our projects, to a more selective principles that will help to create a further point of and focused developer that creates then holds succeed in the long term. of our minds. difference in the market. onto assets for a long time. In Bratislava, where the company was originally established, we Its ethos is reflected in the work of services will also start to diversify with some residential We’re grateful for all the support and patience Naturally, most clients spent the majority of like Symbiosy and Origameo. These were development opportunities. given from our stakeholders, including our clients, the year dealing with the COVID-19 crisis.

Load more