Good afternoon, ladies and gentlemen, and welcome to Lar España Q1 2022 financial results conference call. I would now like to turn the conference over to Mr. Hernán San Pedro, Lar España's Investor Relations and Corporate Communication Director. Please go ahead, Hernán.
Good afternoon, everyone, and thank you for joining us today. This is Hernán San Pedro. Welcome to our Q1 business update presentation. On this occasion, as in the last Q1 and Q3 quarters, the presentation will be limited to a brief summary of the quarter made by Jon Armentia, Corporate Director and CFO of Lar España. Miguel Pereda, Chairman of Grupo Lar and Vice Chairman of Lar España Real Estate SOCIMI, and José Manuel Llovet, Chief Executive Officer of Commercial Real Estate of Grupo Lar, will be at your disposal too for the Q&A session. As always, the press release and the presentation, which includes a review of the operating performance, financial, and ESG information, are available on the web for consultation. After the presentation, we will answer any questions you may have. Now let me hand the call over to Jon Armentia. Please, Jon.
Thank you, Hernán, and good afternoon, everybody. First of all, I would like to thank all of you for being here for this business update. Before we start analyzing the Q1 of 2022, I think it's important to highlight where we come from and the important activity carried out during 2021. Last year proved to be a very active one at corporate level. Lar España continued to carry out actions aimed at creating value for our shareholders, always with the focus on remaining the retail leaders in Spain. We divested 22 supermarkets leased to Eroski to focus our portfolio on shopping centers and retail parks. In June, we renewed the IMA with very advantageous conditions for the company. We also completed our first share buyback program, amortizing 5% of the capital.
In July and in October, we issued two green bonds for a total amount of EUR 700 million. All this while striving every day to return operating results to pre-pandemic levels and maintaining a strong balance sheet and a healthy cash flow. As can be seen in slide number five, 2022 has begun with great challenges for the global economy. Post-pandemic growth forecasts have had to be revised downward by the IMF. In the case of Spain, the GDP growth forecast for 2022 stands at 4.8%, and this figure falls to 3.8% for 2023. Moreover, inflation levels are at historic highs, and the behavior of energy prices does not suggest that this trend will change in the short term. As can be seen in the last graph, forecasts for electricity prices in Europe are not promising.
To all this, we must add the conflict in Ukraine, which has left us an unprecedented humanitarian crisis and which will undoubtedly exacerbate the economic slowdown we are experiencing. Despite all this, we can be optimistic. Regardless the high levels of inflation, it does not appear that this trend will continue in the long term, although it's true that we still have a few months of high levels ahead of us. If we look at the national level, our economy has already recovered pre-pandemic levels, and there is still room for improvement because tourism is not 100% at pre-pandemic rates. Experts also point out that the origin of everything is in the price of oil, and various studies point to the fact that the forecast is that the price of a barrel will gradually return to normal values.
At Lar España, we have a very close relationship with our tenants. We were with them during the pandemic, and we are very proud to be the preferred choice of major referent brands. In this regard, I think it's important to remember that all our contracts are indexed to the CPI and that energy costs can be passed on, like so many other costs, to our tenants. At Lar España, we did things right during the pandemic and have proven to be a resilient company that is well-positioned to take advantage of the economic recovery as indicators return to normal. Our portfolio has been maintained over the last few years. The decrease in GLA is due to the rotation of non-strategic assets for the company. As for occupancy, footfall, and sales, as can be seen in the graphs, current levels are already even higher than those of 2019.
The FO rate remains at similar rates. As for loan-to-value, the company's sound financial policy is allowing this ratio to be reduced year- after- year. For Lar España, our tenants are more than just numbers. At Lar, we knew that we all had to come out of the pandemic together, and that is how we faced the situation that was so unexpected for all of us. We met personally with each of them and reached agreements with 100% of the GLA. As of March, 95% of the rents invoiced in the Q1 of the year had been collected. We have a high level of revenue security, with more than 60% of the contracts maturing beyond 2025.
As a result of this commitment to our tenants, our leasing activity has increased in this Q1 of 2022. We turned over 15,000 square meters in the quarter, signed 36 operations. EUR 2.8 million in rents were negotiated, and a remarkable 6.3% increase in rents was achieved. At this point, it's important to note that the effort level stands at 9.4%. All this while maintaining high occupancy levels. At Lar España, we could not be prouder of the work we have done. We have closed the Q1 with a recurring GRI of EUR 24.5 million and a recurring net profit of EUR 13.6 million. EBITDA per share rises to EUR 10.5.
During the Q1 of 2022, the company generated EUR 10.7 million cash flow, a remarkable figure. All this while maintaining a solid financial position, a healthy balance sheet, and a prudent leverage. Loan-to-value declined in the quarter to 39.9% with an average cost of debt of 1.8%. Our cash position is EUR 200 million, which is sufficient to cover expenses for the next four years. Finally, I would like to remember that reflecting Lar España's financial strength, the last annual general meeting approved a dividend of EUR 0.36 per share, amounting EUR 30 million, a 7% dividend yield over market cap that will be paid on May 27. This dividend positions us among the leading Spanish listed companies in terms of dividend shareholder remuneration.
Thank you for your attention, and now we can open the Q&A session.
Thank you very much, Jon. We have a couple of questions. The first one is for you, from sell-side people. In terms of cash flow generations in the reported figure around EUR 11 million, could be a good guidance for the next part of the year?
Thank you, Hernán, for the question. Yes, as you have said, EUR 10.7 has been the cash that we have generated in this Q1 . The guidance will be to have in the whole year four times that figure. That's correct.
Thank you, Jon. The next one is for José Manuel Llovet. José Manuel, reported sales had recovered pre-pandemic levels. What do you expect for the rest of the year? Can you give us some color about the impact of inflation and other things over the relation with the retailers?
Okay, Hernán, thank you for the question. Yes, I mean, as you have seen in the presentation. In the main KPIs, we are clearly recovering the level of 2019. In visits, we are currently 8.4% below. In sales, we are 7.7% above 2019. This recovery is not the same in all the activities. There are some activities that are still, you know, thriving very much like food. As you know, this has been growing for all the COVID period and it is still very strong. We are in the Q1 , they are like in double digits. Home is also in double digits. We are happy because we are seeing that fashion is recovering.
They had a very, very tough year, 2019 and 2020. In 2021, they started to recover, and now we see that they are close to be in a below 10% in our portfolio in comparison with 2019. We are happy to see this recovery. Leisure, it is still a little bit weak. We are in levels of -20%. If you put together all these activities, you will see that in general terms, we are like very similar to 2019 with some differences that we think they are going to stabilize by the end- of- the- year.
In terms of what is happening and how is this affecting to the business, I think that it is clear that the challenges is the you know the inflation, of course, and how it is moving the global inflation to core inflation. This will have an impact in the family budgets. The distribution bottlenecks in the ships, the jams in Shanghai and other similar things, they are bringing some difficulties also, and they are creating a moment in which the margins are a little bit tightening. Energy prices, of course, the same. On the other side, we have positive drivers. We see that consumption is very strong. Of course, the most important thing is that COVID already ends.
We see that the tenants are very strong. We haven't seen, you know, signals of weakness in the tenants. Most of them are working well. Well, the good proof is that we are in an occupancy of 96%, no? The numbers of employment in Spain are being quite positive, as well. So we have these two drivers. One is positive, one the other one is negative. We have to see how they evolve. In terms of the market in general, we see that there. Or we feel that there are more activity in capital markets as well.
We are seeing a Q1 and the two months of the Q2 in which there have been some transactions, important transactions. We are seeing retail parks and shopping centers transacted, and this is also very positive. Last year was supermarkets and hypermarkets. Now as we forecasted, you know, it's the moment of shopping centers and retail parks. We have seen some specific transactions that make us think that the market is coming back. Also we are reading some papers from analysts and some from some economic newspapers that try to reflect that there is a new traction for these kind of assets in the capital markets. This is in general how we see the moment of the industry right now.
Thank you very much, José Manuel. Another one for you. Knowing the strategic plan of Inditex, can you explain us the impact on Lar España Real Estate SOCIMI portfolio, in terms of closure of points?
Yes. Yeah. I mean, we all know what Inditex is doing. Inditex is reducing number of shops, but also enhancing and expanding the dominant ones. In our portfolio, you know that I always mention that we have a lot of Inditex brands. To be precise, we have today 55 brands of Inditex Group. At the moment we acquired the assets, we had less. We had around 50. We have grown in number of brands of the group. At the same time, we have, like, in like-for-like terms, we are, like, 10%. We have shops that are 10% bigger than what we usually have. Most of them have been expanded.
For us it is a sign of the strength of the portfolio and dominance and the good relation that we have with this company. This company is only going to be in the best places, so this is a proof of the quality of each asset in the catchment area. We are okay. We have still a lot of plans for improving the shops of Inditex. We have done some very special things now in, for instance, Portal de la Marina or in Ànecblau, where we have the biggest Zara in a shopping center in Catalonia. We expect that the relation continue like this or get improved.
Thank you very much, José Manuel. The next one is from buy-side people for Miguel. Figures improving and the discount over NAV maintained around 50%. Any special reason? Do you see something changing in retail world? It's possible to see given the present year significant reduction in the discount.
Thank you, Hernán. Miguel speaking. Well, I think that at the end, this difference between private and public market cannot relate forever. After two years of difficult years, has been proven that the fear on valuations and the fear of the activity collapsing is not anymore there. That should give confidence to the market in general that the value of our assets and the value of the share is strong and resilient. That's something that we can demonstrate with figures now. It was more difficult a year ago. It was a conviction, but now it's there.
As José Manuel and Jon were saying, the fact that NOI is resilient, the fact that the occupancy is even improving, and the fact that FFO rates are maintained is the best proof of that. On the other hand, we are going to start seeing, we have seen already, and that will increase the amount of transactions on the private market. That in conjunction with the valuations of the year-end, that we already seen how the values were improving, and I'm sure that valuations in June, all that will be factors that should give confidence of the market. In the end, the discount is a reflection of, I think that the market not being sure or having uncertainty of where income and values were going.
I suppose that we are going to give, and we are giving strong reasons to take that uncertainty out of the table.
Thank you, Miguel.
As a reminder, if you want to ask a question, please use the webcam functionality, Ask a Question. I now hand over the call to Hernán San Pedro.
Yes, we have another one for Miguel. In terms of capital allocation, what is the idea of the company for this year and coming years? Any news regarding a possible rotation on your asset portfolio, or are you thinking maybe to make more share buybacks?
There's no factors or things that will not be considered. Today, clearly we believe that the market is improving, and asset rotation is probably our priority. It's not that. I mean, we've done share buybacks in the past, but clearly our priority will be to rotate assets and change one for another. That means selling those that we consider are more mature and where is less value to be created, and take advantage of the situation of the market and of our platform in order to acquire things that itself are create value, but also that create value for the portfolio in general.
Clearly asset rotation is on the top of the list of our priorities.
Thank you very much. Is there any other question?
There is no more questions.
Okay. Thank you very much. Thank you for attending the call, and please remember that all the company and all the departments are ready to complete this process. Thank you very much and good afternoon.