Spear Reit Ltd. · JSE:SEA
Spear Reit — Investor Presentation (August 2020)
23 slides from Spear Reit's investor presentation, Aug 28, 2020
Slide 1: Pre-Close Investors' Presentation and Trading Update
PRE - CLOSE INVE STORS’ PRE SE NTATION AND TRADING UPDATE INTERIM PERIOD 31 AUGUST 2020 / 28 AUGUST 2020
Slide 2: Table of Contents
TABLE OF CONTENTS INTRODUCTION AND 1. ENVIRONMENTAL UPDATE 2. IMPACT OF COVID-19 ON SPEAR 3. PORTFOLIO UPDATE 4. SECTORAL PERFORM ANCE 5. OUTLOOK AND PROSPECTS 6. QUESTIONS / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 2
Slide 3: Introduction and Environmental Update
INTRODUCTION AND 1 / ENVIRONMENTAL UPDATE EMAIL QUESTIONS TO [email protected] / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 3
Slide 4: Mission Statement and Strategy
1 / INTRODUCTION AND ENVIRONMENTAL UPDATE / MISSION STATEMENT AND STRATEGY S TRATEGY S HO RT T ER M Adapted to Covid-19 operating environment Capital preservation and liquidity management Maintained income statement consistency and strong rental collections to date Letting of vacant space and quick
Slide 5: Impact of Covid-19 on Spear
IMPACT OF COVID-19 2 / ON SPEAR / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 5
Slide 6: Lockdown Operating Percentages – Revenue Based on Rentable Area
2 / IMPACT OF COVID-19 ON SPEAR / LOCKDOWN OPERATING PERCENTAGES – REVENUE BASED ON RENTABLE AREA LOC K D O W N O P E R AT I N G P E R C E NTAG E S – R EVEN UE - B AS E D O N R E NTAB L E AR E A The percentages below illustrate the monthly revenue contributed to the group under the various lockdown
Slide 7: FY2021 Operating Scenarios – Updated to August 2020 from May 2020
2 / IMPACT OF COVID-19 ON SPEAR / FY2021 OPERATING SCEN ARIOS – UPDATED TO AUGUS T 2020 FROM M AY 2020 FY2021 OP ER AT I NG SCE N AR I O S – U P DAT E D TO AU GU S T 2 0 2 0 FROM M AY 2 0 2 0 LO W R OA D HI GH R OAD 60% of FY2021 budget collected 85% of total budget collected* Spear breakeven point
Slide 8: Portfolio Update
3 / PORTFOLIO UPDATE / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 8
Slide 9: Portfolio Snapshot
3 / PORTFOLIO UPDATE / PORTFOLIO SN APSHOT 32 7.23% 100% NUMBER OF AVERAGE PROPERTIES IN-FORCE WESTERN CAPE ESCALATIONS AS S E TS LETTING R4.5BN 453 319M2 28 MONTHS ASSET VALUE GLA WALE 91.40% R91.10/M2/PM OCCUPANCY AVERAGE RENTAL INCLUDING RATES / Pre-Close Investors’ Presentation and Trading Updat
Slide 10: Collections
3 / PORTFOLIO UPDATE / COLLECTIONS Trading environment remains extremely challenging Spear’s hands-on approach and regional focus paying off YTD collections under the circumstances have been satisfactory and inline with management’s planning scenarios Billing reflects revenue after all credits and d
Slide 11: Exclusions, Credits and Deferrals; Collections vs. Billed
3 / PORTFOLIO UPDATE / EXCLUSIONS, CREDITS AND DEFERRALS (EXCLUDING UTILITIES) Spear has 419 tenants with 196 tenants provided with Covid-19 related relief. 93.25% COLLECTIONS % of YTD budget VS. BILLED Classification YTD amount (rentable area only) Hospitality (12 314 291) * 5.95 Credit (10 397 333
Slide 12: Tenant Letting Activity
3 / PORTFOLIO UPDATE / TEN ANT LE T TING ACTIVIT Y Expiries and Average gross Renewals/ Gross rental Average gross Average rental cancellations Gross rental expiry rental new lets at renewals/ new rental reversion GLA at expiry R/m² GLA new lets R/m² % Commercial 13 899 1 895 882 136.41 9 170 1 448
Slide 13: Non-Core Disposals
3 / PORTFOLIO UPDATE / NON-CORE DISPOSALS In line with management’s less-is-more strategy to focus on assets valued at R100 million and above the following non-core asset disposal updates are listed below: R148.8 MILLION OF DISPOSALS CONCLUDED OR Value Net Yield UNDERWAY Property R’000 % Status 10 M
Slide 14: Sectoral Performance
4 / SECTORAL PERFORM ANCE Sector-wide the impact of Covid-19 has been felt in varying degrees. The resilience of the Spear portfolio has been displayed in the level of collections set out earlier in the presentation along with the following sectoral performance update. / Pre-Close Investors’ Present
Slide 15: Retail
4 / SECTORAL PERFORM ANCE RE TAIL RE TAIL (42 229M 2 GL A) Spear has only ever invested into convenience retail assets as opposed to large regional or super regional shopping centres Retail portfolio occupancy: 91% Collections have been 87.86% versus revenue billed for the period to date Spear provi
Slide 16: Commercial
4 / SECTORAL PERFORM ANCE COMMERCI AL COMMERCI AL (139 842M 2 GL A) All Spear’s commercial assets are located in highly attractive and established office nodes in Cape Town Office portfolio occupancy: 92% Collections have been 95.66% versus revenue billed for the period to date Spear provided credit
Slide 17: Industrial
4 / SECTORAL PERFORM ANCE INDUSTRI AL INDUSTRI AL (243 158M 2 GL A) Spear’s industrial portfolio has been exceptionally resilient during the interim period with a number of new lets and relets taking place in a very challenging market Industrial portfolio occupancy: 90%* (6.5% of vacancy relates to
Slide 18: Hospitality
4 / SECTORAL PERFORM ANCE HOSPITALIT Y HOSPITALIT Y (28 090M 2 GL A) Sector hardest hit by the impact of Covid-19 15 O N O R AN G E HOT E L , C AP E TO WN Management has eliminated hospitality income from its FY2021 forecasts FY2020 hospitality comprised ±7% of group revenue 15 on Orange Hotel under
Slide 19: General Business Continuity Risks (All Sectors)
4 / SECTORAL PERFORM ANCE ALL SE CTORS l GEN ER AL B U SINE SS CONTINUIT Y RISKS (ALL SECTORS) Tenant cost of occupancy continues (local authority charges) to rise well ahead of inflation Any new government restrictions that may limit tenant operations Major market or tenant failures Civil disobedie
Slide 20: Outlook and Prospects
5 / OUTLOOK AND PROSPECTS / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 20
Slide 21: Outlook
5 / OUTLOOK AND PROSPECTS OUTLOOK Spear’s portfolio remains of a high quality, defensive in The leasing and asset management team will as always remain nature and underpinned by strong lease covenants close to the market and our tenants Maintain our hands-on non-bureaucratic approach Fewer tenant fa
Slide 22: Prospects
5 / OUTLOOK AND PROSPECTS PROSPECTS PR OSPE CTS It is difficult to predict fully the economic outcomes of the pandemic on the real estate sector and on Spear. Spear will not be issuing any FY2021 distribution guidance until latest November 2020. Our various scenarios have not forecast any rental inc
Slide 23: Thank You
TH AN K YOU QU E STIONS? EMAIL QUESTIONS TO [email protected] LIVE Q&A WITH CEO AFTER PRESENTATION / Pre-Close Investors’ Presentation and Trading Update / Interim Period 31 August 2020 / 23