Globalworth Real Estate Investments : Annual Report and Consolidated Financial Statements 2022

People,

Places,

Technology.

Globalworth

Annual Report and Financial Statements 2022

Globalworth Annual Report and Financial Statements 2022

Strategic Report

Operational Review

Governance

Financial Statements

Additional Information

01

Inside this report

Welcome to our 2022 Annual Report

Globalworth is a leading real estate company focusing on Poland and Romania, the two largest markets in Central and Eastern Europe ("CEE"), having the leading position in our two main markets, Romania and Poland.

We acquire, develop and manage commercial real estate assets, primarily in the office sector, with the objective of being the landlord of choice for established national and multinational corporations in the region.

Our reporting

We believe that through robust performance monitoring and reporting, we can support and properly manage our performance.

As part of this continuous effort, we published Globalworth's "2021 Sustainable Development Report" in May 2022.

02

Strategic Report
Our Purpose	02
Our Approach	03
Highlights of the Year	04
At a Glance	05
Investment Case	06
Sustainable Solutions	07
Local Landlord Approach	08
Our Supply Chain	09
CEO Statement	10
2022 Market Review	13
Our Strategy	16
Our Business Model	17
Stakeholder Engagement	18
Key Performance Indicators	20

22

Operational Review
Portfolio Snapshot	22
Romania	23
Poland	25
Portfolio Development/Evolution	27
Case Studies	31
Asset Management Review	35
Standing Portfolio Review	39
Capital Markets Review	41
Financial Review	44
EPRA Select Key Performance Measures Snapshot 51
Sustainable Development Review	52
Environmental Review	54
Social Review	56
Governance Review	57
Principal Risks & Uncertainties	58

63

Governance
Introduction to Governance	65
The Board of Directors	70
Directors' Report	72
Audit and Risk Committee Report	74
Nomination Committee Report	79
Remuneration Committee Report	80
Investment Committee Report	83
77
Financial Statements
Consolidated Financial Statements	84
Notes to the Consolidated Financial Statements	88
Independent Auditor's Report	136
133
Additional Information
Schedule of Properties: Romania	139
Schedule of Properties: Poland	141
Standing Portfolio - Breakdown
by Location & Type	143
Portfolio - Breakdown by Location & Type	144
Portfolio Analyses	146
EPRA NAV Metrics	149

• Click here to visit our website
• Click here to read our 2022 Sustainability Report

Click here to visit our Twitter page

Click here to visit our YouTube channel

How to navigate this report

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Investing Policy	151
Glossary	152
Company Directory	155

Globalworth Annual Report and Financial Statements 2022

Strategic Report

Operational Review

Governance

Financial Statements

Additional Information

At Globalworth, our purpose is clear.

Our mission is to create value for our shareholders, tenants, and the local communities by acting consistently in an ethical and socially responsible manner.

Creating an environment in which people want to work and be associated with is one of our key objectives, achieved through building a vibrant, modern and greener portfolio.

02

Globalworth Annual Report and Financial Statements 2022

Strategic Report

Operational Review

Governance

Financial Statements

Additional Information

03

Our Approach

We are a leading real estate company in the CEE region

Our purpose

Guided by our strategy

Delivered with our business model

We utilise our six-pillar strategy to deliver attractive,

We employ our relationships and proven investment

sustainable long-term value to our shareholders

model to deliver sustainable long-term value.

and other stakeholders.

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Strengthen

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Preserve and/

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in our core

manage our

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investment

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model

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activities

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Maintain an

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efficient and

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capital structure

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financial

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Read more about our Strategy on page 16

Read more about our Business Model on page 17

Underpinned by our values

Integral to our culture is adhering to the highest

standards of ethical business practices and living

One Team

Act with Integrity

by our values, which are:

Creating value for stakeholders

In a world in which businesses are interrelated, engaging with our shareholders and other stakeholders to understand their interests, priorities, and expectations is key for shaping our strategy for the future and the success of our business.

Who do we deliver for?

Employees

Tenants

Partners/Suppliers/Contractors

Shareholders/Bondholders

Local communities

State and local authorities

Read more about our Stakeholders on pages 18 to 20

Respect, Diversity	Build an Environmentally
and Inclusion	Friendly & Sustainable Future

Globalworth Annual Report and Financial Statements 2022	Strategic Report	Operational Review	Governance	Financial Statements	Additional Information

Highlights of the Year

Our performance

04

In 2022, new challenges, largely linked to macroeconomic/geopolitical risks and the war in Ukraine, impacted the economic and business environment, resulting in

a more uncertain outlook. Despite the numerous challenges, our unwavering operational focus and business expansion have been partly reflected in our annual results.

Having said this, we are confident that the extensive work carried out by our team in 2022 has allowed us to consolidate our position as the pre-eminent landlord in our home markets of Poland and Romania and will set us on a trajectory towards even greater performance as the markets gradually return to a more normalised state in the future.

Operational Highlights

• Total combined portfolio value marginally higher by +0.2% at €3.2 billion.
• Focused development programme in select high- quality projects.
• • Romania; delivered six new logistics facilities offering 104.4k sqm of GLA, with three logistics facilities under development which are expected to have a total GLA of 30.0k sqm.
  • 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 7.9% 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.
• • Addition of seven properties with an average occupancy of 54.2%, some of which are in the lease-up phase, negatively impacted the overall combined standing occupancy.
  • Like-for-likestanding 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 €189.2 million
• Rate of collections invoiced and due remained high at 99.3% for 2022.

Sustainability:

• €2.6 billion in 53 green certified properties.
• 45 properties were certified or recertified with BREEAM Very Good or higher certifications during the year.
• Committed to reduce our carbon footprint based on a science-based approach to align with a 1.5oC trajectory.
• Issued the third sustainable development report and our second Green Bond Report.
• Maintained low-risk rating by Sustainalytics and our MSCI rating to "A".
• Contributed to over 25 social initiatives in Romania and Poland.

Tryton

Financial Highlights

Portfolio Open Market Value

€3.2bn

€3.2bn (2021)

Shareholders' Equity

€1.7bn

€1.7bn (2021)

IFRS Earnings Before Tax

€(11.2)m

€62.1m (2021)

Adjusted Normalised EBITDA

€126.0m

€130.2m (2021)

IFRS Earnings per Share

(8) cents

21 cents (2021)

EPRA Earnings per Share

32 cents

27 cents (2021)

EPRA NRV per Share

€8.29

€8.66 (2021)

Net Operating Income

€139.7m

€144.3m (2021)

Dividend per Share Paid

27 cents

30 cents (2021)