Stride Property Group · NZX:SPG
Stride Property — FY2022 Earnings Presentation
41 slides from Stride Property's earnings presentation, May 2022
Slide 1: Stride Property Group Annual Results FY22
Stride Property Group Annual Results FY22 1
Slide 2: Contents
Contents 3 Financial Highlights 4 Strategic Highlights 5 Investment Management Business 9 Repositioning of Office Portfolio 13 Products 19 Places 23 Climate-Related Disclosures 26 FY22 Financial Results 30 Capital Management 33 Outlook 35 Glossary 37 Appendices Capitalised and technical terms are de
Slide 3: Financial Highlights
Financial Highlights Stride Property Group (Stride) - Consolidated Profit after income tax from continuing operations $112.3m down $19.7m from FY21 Distributable profit1 per share 10.95cps Distributable profit after current income tax $54.2m up $7.9m from FY21 Assets Under Management $3.6bn Up $0.6b
Slide 4: Strategic Highlights
Strategic Highlights Stride Property Group (Stride) - Consolidated Stride continues to grow its assets under management (AUM), while also proactively managing $2.5bn $324m capital to support execution of strategy External Assets $175m+ Gross transactions Under Management (AUM) Future development pip
Slide 5: Investment Management Business
Investment Management Business 5
Slide 6: Growth in AUM
Growth in AUM Stride’s strategy is to create a group of Products in specific commercial property sectors to grow its investment management business. Stride has delivered significant growth of $0.6bn / +20% in Assets Under Management during FY22 Note: Numbers in chart may not sum due to rounding. 215
Slide 7: Diversified Income Sources
Diversified Income Sources FY22 look-through revenue sources1 Stride combines a property ownership business (SPL) with a real estate investment management business (SIML) Stride derives its income from: • Management fees • Direct property income from SPL’s directly owned property • Indirect property
Slide 8: Management Fee Income
Management Fee Income Stride Investment Management Limited (SIML) FY22 management fee1 income: • $25.3m management fees • 18.7% growth in recurring fees from FY21 Stride benefits from growth in the Stride Products through: 2 • Activity based fees associated with acquisitions and development activity
Slide 9: Repositioning of Office Portfolio
Repositioning of Office Portfolio 9
Slide 10: Office Market Themes
Office Market Themes Three key investment themes for the NZ office market 1 • NZ has set a target to reduce net GHG emissions to 50% below 2005 levels by 2030 1 and achieve net zero carbon by 20502 Market shift towards • The Carbon Neutral Government Programme (CNGP) launched in December 2020, aimin
Slide 11: Office Portfolio
Office Portfolio Transactions • 110 Carlton Gore Road acquisition confirmed unconditional post balance date for a purchase price of $213m, a $4.5m reduction from the original price • Four B Grade Auckland office assets, comprising 25 Teed Street, 35 Teed Street, 7-9 Fanshawe Street and 80 Greys Aven
Slide 12: Fabric Portfolio Repositioned
Fabric Portfolio Repositioned Execution of Stride’s office strategy over the past two years has resulted in a rapid repositioning of Fabric’s portfolio towards prime, modern, green office properties which will Green assets1 ($m) benefit from enduring demand 853 723 Fabric Portfolio (excludes 55 Lady
Slide 13: Products
Products 13
Slide 14: Products
Products Since 31 March 2021, Stride’s AUM has grown from $3.0bn to $3.6bn or $3.8bn including acquisitions, developments and disposals, with external AUM increasing from $2.1bn to $2.5bn Portfolio composition by value as at 31 March 2022 1 Acquisitions, developments and disposals Industrial Large F
Slide 15: Industre: $849m portfolio value
O’Rorke Road, Penrose $849m portfolio value as at 31 March 2022 growth of $239m since 31 March 2021 $88m of acquisitions completed in FY22 9.3 years WALT as at 31 March 2022 $450m growth in portfolio since Industre commencement 1 July 2020 $38m of developments underway across three properties, with
Slide 16: Investore: $1.2bn portfolio value
Countdown, Petone, Wellington $1.2bn Portfolio value 1 net valuation gain of 8.2% for 12 months to 31 March 2022 99.7% Portfolio occupancy 9.1 years WALT $73.8m acquisitions completed during FY22 29.5% Loan to Value Ratio 2 with $120m bank debt facility headroom for future growth $125m listed bond i
Slide 17: Diversified: $493m portfolio value
$493m Portfolio value Growth of $27m since 31 March 2021 Queensgate carpark rebuild complete Cinema open in second half of 2022 $382m Portfolio MAT1 +6.1% vs 31 March 2021 (+6.7% LFL2) 1. See glossary on page 36. 2. On a like for like basis and excluding travel-related retailers. Queensgate Shopping
Slide 18: Developments
Developments Acquisitions completed by Stride’s Products in FY22 have focused on building future development pipelines, with $130m of active projects committed and a future pipeline of $175m+ across the Stride Products Completions1 Committed Remaining Future (FY22) projects spend Pipeline $37m - - $
Slide 19: Places
Places 19
Slide 20: SPL Places
SPL Places As at As at SPL Overview1 31 Mar 22 31 Mar 21 SPL Highlights Properties (no.) 15 14 • Net valuation movement5 of -$3.7m for the 12-month period Tenants (no.) 358 347 to 31 March 2022, or +$24.3m excluding the impact of 55 Lady Elizabeth Lane Net Lettable Area (sqm) 151,212 135,350 • Net c
Slide 21: SPL Office Portfolio
SPL Office Portfolio Pro As at As at Office Overview forma1 31 Mar 22 31 Mar 21 Office Highlights Properties (no.) 8 11 10 • Rent reviews across 59% of the portfolio completed in FY22 Tenants (no.) 90 127 115 with an increase in rental of +3.3% Net Lettable Area (sqm) 82,520 85,687 69,614 • Followin
Slide 22: SPL Town Centre Portfolio
SPL Town Centre Portfolio As at As at Town Centre Highlights Town Centre Overview 31 Mar 22 31 Mar 21 Properties1 (no.) 4 4 • MAT2 for NorthWest was +5.6% (+9.0% LFL2) for the year to 31 March 2022, and MAT2 for Silverdale Centre was +3.2% (+3.0% Tenants (no.) 231 232 LFL2) over the same period Net
Slide 23: Climate-Related Disclosures
Climate- Related Disclosures 23
Slide 24: FY22 Progress
FY22 Progress Stride Property Group (Stride) During FY22 Stride has delivered significant progress in its approach to sustainability and climate risk Climate risk assessment undertaken, preliminary risk ratings established Minimum green rating policy established for acquisitions and developments GHG
Slide 25: Climate-related Risks
Climate-related Risks Stride Property Group (Stride) Low Carbon Scenario (less than 2º Business as Usual Scenario (4ºC rise) temperature rise) In a low carbon scenario, transition risks are more In this scenario physical climate issues are a focus, as material as the focus is on reducing carbon in t
Slide 26: FY22 Financial Results
FY22 Financial Results 26
Slide 27: Financial Performance
Financial Performance Stride Property Group (Stride) - Consolidated Change 2022 2021 $m $m $m % Net rental income 65.8 50.7 +15.1 +29.9 Management fee income 24.3 24.2 +0.0 +0.2 Corporate expenses (27.4) (21.1) (6.4) (30.3) Profit before net finance expense, other income/(expense) and income tax fro
Slide 28: Distributable Profit
Distributable Profit1 Change Stride Property Group (Stride) - Consolidated 2022 2021 $m $m $m % Profit before income tax (including discontinued operations) 124.7 143.2 (18.5) (12.9) Non-recurring, non-cash and other adjustments: - Net change in fair value of investment properties (30.7) (43.3) +12.
Slide 29: Financial Summary
Financial Summary Stride Property Group (Stride) - Consolidated As at As at 31 March 31 March Change ($m) 2022 2021 $m Investment Properties1 1,244.6 1,050.5 194.1 Bank debt drawn ($m) 305.5 261.0 44.5 Equity 1,231.1 1,017.4 213.7 Shares on issue (million) 540.2 472.8 67.4 NTA per share $2.28 $2.15
Slide 30: Capital Management
Capital Management 30
Slide 31: Capital Management – Debt Facilities
Capital Management – Debt Facilities SPL (excl. Industre unincorporated joint venture assets and debt) • $134m oversubscribed capital raise completed in December 2021 to As at As at provide balance sheet flexibility and support execution of strategic 31 Mar 31 Mar initiatives Debt facilities 2022 20
Slide 32: Capital Management – Cost of Debt
Capital Management – Cost of Debt SPL (excl. Industre unincorporated joint venture assets and debt) As at As at • As at 31 March 2022, $335m of swaps were active, representing 31 Mar 31 Mar 110% of drawn debt. This has now fallen to 82% in April 2022 Cost of debt 2022 2021 following the first paymen
Slide 33: Outlook
Outlook 33
Slide 34: Outlook
Outlook Stride remains committed to its funds management strategy and has successfully repositioned its office portfolio over FY22 towards high quality, modern, and green office properties which will benefit from enduring demand • Stride continues to explore opportunities for establishing Fabric as
Slide 35: Glossary
Glossary 35
Slide 36: Glossary
Glossary AUM Assets under management Contract Rental Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL (or the relevant landlord) by that tenant under the terms of the relevant lease as at the relevant date, annualised for the 12-month period on the basi
Slide 37: Appendices
Appendices 37
Slide 38: Appendix 1: Portfolio by Sector
Appendix 1: Portfolio by Sector Town Centre/ Overview Total Portfolio Office1 Industrial Large Format Retail Retail Shopping Centres Office and retail portfolio2 Properties (no.) 12 8 44 Net Contract Rental3 ($m) 67.9 45.9 22.0 WALT3 (years) 6.6 7.8 4.1 Occupancy Rate (% by area) 96.2 95.7 96.7 Port
Slide 39: Appendix 2: Net Contract Rental
Appendix 2: Net Contract Rental $10.9m $67.9m $7.9m $1.5m $63.0m ($0.6m) ($0.5m) $54.5m ($5.9m) As at Office acquisition Rent reviews Net leasing impact Other As at Disposals Office acquisition Pro Forma 31 Mar 21 (46 Sale Street) 31 Mar 22 (4x office) (110 CGR) 31 Mar 22 Profit before other income
Slide 40: Appendix 2 (cont.): Net Tangible Asset per share
Appendix 2 (cont.): Net Tangible Asset per share $0.12 $0.06 $2.28 $0.09 $0.03 ($0.09) ($0.03) ($0.03) $2.15 ($0.02) As at Profit before Income tax Movement in Net change in Impairment of Share of profit Dividends Issue of capital As at 31 Mar 21 tax expense cash flow fair value of equity- in associ
Slide 41: Thank you
Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the twelve months ende