Stride Property Group · NZX:SPG
Stride Property — HY23 Earnings Presentation
39 slides from Stride Property's earnings presentation, Nov 24, 2022
Slide 1: Interim Results Presentation
Interim Results Presentation For the six months ended 30 September 2022 24 November 2022 1 Stride Property Group HY23 Interim Results Presentation
Slide 2: Contents
Contents 3 Introduction 4 Market update 5 HY23 financial overview 6 Highlights 7 Investment management business 11 Portfolio 19 Sustainability 21 HY23 consolidated interim financial results 25 Capital management 28 Outlook 31 Glossary 33 Appendices Capitalised and technical terms are defined in the
Slide 3: Introduction
Introduction The past six months have provided a dynamic background for the commercial property investment market. We currently observe three key investment themes influencing the market and returns: inflation impacts, a strong occupancy market, and lower transactional activity Stride is taking step
Slide 4: Market update
Market update Office Town Centres • Flight to quality, construction cost inflation, and increasing • Relaxation of COVID-19 restrictions supportive of strong ESG and seismic requirements are supportive of the outlook trading. SPL Town Centre2 specialty MAT up 7.6% against for quality properties and
Slide 5: HY23 financial overview
HY23 financial overview Stride Property Group • $34.1m net rental income, up 11.2% (HY22: $30.7m) primarily due to Profit before other impact of COVID-19 rental abatements in HY22 (expense)/income and income tax • $12.0m management fee income1, down 1.2% (HY22: $12.2m), cycling from a higher level o
Slide 6: Highlights
Highlights As at 30 Sep 22 Stride Property Group SPL Office and Town Centre portfolio1 Value2 WACR Portfolio WALT Occupancy3 $904m 5.7% 5.6 years 97% Investment management business Total AUM External AUM Development projects underway $3.7bn $2.6bn $110m on a committed basis4 on a committed basis4 ac
Slide 7: Investment management business
Investment management business 7 Stride Property Group HY23 Interim Results Presentation
Slide 8: Total AUM
Total AUM AUM movements over HY23 Stride’s strategy is to create a group of Products in core +$263m1 $3,733m $3,606m +$37m +$26m +$8m commercial property sectors $3,471m ($83m) which form the basis of its ($124m) $1,151m investment management $1,063m $945m business Total AUM is $3.5bn as at 30 Sep 2
Slide 9: Diversified revenue sources
Diversified revenue sources HY23 look-through revenue sources1 Stride combines a property ownership business (SPL) with a real estate investment management business (SIML) Activity Stride derives its revenue from: and performance • Management fees fees • Direct property income from SPL’s directly ow
Slide 10: SIML management fee income
SIML management fee income HY23 management fee1 income: • $12.0m total management fees, in line with HY22 ($12.2m) • $8.9m recurring fees, representing 16% growth compared to HY22 • Lower activity fees due to cyclically lower performance fees and transaction activity $12.7m $12.2m $12.0m $3.2m $4.6m
Slide 11: Portfolio
Portfolio 11
Slide 12: Products
Products Stride’s total AUM is $3.5bn. Including committed acquisitions and developments 1, total AUM increases to $3.7bn, while external AUM increases from $2.5bn to $2.6bn Portfolio composition by value as at 30 Sep 22 Office $1,236m Retail Shopping Centres / Town Centre $1,151m $36m Large Format
Slide 13: Industre HY23 highlights
318 East Tamaki Road, Auckland HY23 highlights1 • During HY23 15 rent reviews were completed over 44,000 sqm, all of which were fixed, resulting in +2.6% increase to previous rentals • Industre’s portfolio is ~8% under-rented2. 23% of net Contract Rental is subject to market review or expiry over th
Slide 14: Investore HY23 highlights
Countdown, Browns Bay, Petone, Countdown, Auckland Wellington HY23 highlights1 • $1.18bn portfolio value2, with 99.5% occupancy (by area) and WALT of 8.5 years • ‘Everyday needs’ tenants contribute 73% of Contract Rental, resulting in a resilient income stream in varying market conditions • Property
Slide 15: Diversified HY23 highlights
Queensgate Shopping Centre HY23 highlights1 • MAT2 increased by $23.6m (+6%) against year ending 30 Sep 19 (pre-COVID-19) • Rent reviews have generated a +6% increase against previous base rent • 15 new lettings have been completed, increasing base rent against Mar 22 market rents for those units by
Slide 16: SPL Town Centre portfolio
SPL Town Centre portfolio HY23 highlights1 • MAT2 improved to $229m (+16%) against year ending 30 Sep 19 • Rent reviews have generated a +5% increase to base rental, driven by positive leasing demand and strong sales performance • 17 new deals (4 new lettings and 13 renewals) have been committed, ge
Slide 17: SPL Office portfolio
SPL Office portfolio HY23 highlights1 SPL office, use deleted slide for stats etc Include portfolio optimization – sale of 4x non-core • Four non-core office assets sold • Only 0.9% of Contract Rental expiring over the remainder of FY23 and 6.1% in FY24 • Rent reviews completed across 40% of the por
Slide 18: Developments
Queensgate Shopping Centre Developments Acquisitions completed by Stride’s Products in HY23 have included properties with future development pipelines. $110m of active projects currently committed with a future pipeline of $650m+ across the Stride Products Completions1 Committed Remaining Future (HY
Slide 19: Sustainability
Sustainability 19
Slide 20: HY23 progress
HY23 progress Stride continues to focus on ensuring the sustainability of its properties and business, with a particular focus on the environment and climate change. Stride annually completes the Global Real Estate Sustainability Benchmark (GRESB) process to assess its sustainability performance, ta
Slide 21: HY23 consolidated interim financial results
HY23 consolidated interim financial results 21
Slide 22: Interim financial performance
Interim financial performance Stride Property Group (Stride) - Consolidated Change 30 Sep 22 30 Sep 21 $m $m $m % Net rental income 34.1 30.7 +3.4 +11.2 Management fee income 12.0 12.2 (0.2) (1.2) Total corporate expenses (12.2) (16.9) +4.7 +28.0 Profit before net finance expense, other income/(expe
Slide 23: Distributable profit
Distributable profit1 Change Stride Property Group (Stride) - Consolidated 30 Sep 22 30 Sep 21 $m $m $m % (Loss)/profit before income tax (49.3) 69.5 (118.8) (171.0) Non-recurring, non-cash and other adjustments: - Net change in fair value of investment properties 51.8 (13.4) +65.2 +488.1 - Impairme
Slide 24: Financial summary
Financial summary Stride Property Group (Stride) - Consolidated As at As at 30 Sep 22 31 Mar 22 Change Investment Properties1 ($m) 1,296.1 1,244.6 +51.5 Bank debt drawn ($m) 361.1 305.5 +55.6 Equity ($m) 1,158.5 1,231.1 (72.5) Shares on issue (million) 540.3 540.2 +0.1 NTA per share $2.14 $2.28 ($0.
Slide 25: Capital management
Capital management 25
Slide 26: Capital management – debt facilities
Capital management – debt facilities SPL (excl. Industre joint operation assets and debt) As at As at • SPL’s bank covenant LVR1 was 32% as at 30 Sep 22, or 38% Debt facilities 30 Sep 22 31 Mar 22 on a committed basis2 Banking facility limit • SPL’s debt covenants only factor in the value of SPL’s d
Slide 27: Capital management – cost of debt
Capital management – cost of debt SPL (excl. Industre joint operation assets and debt) • As at 30 Sep 22, SPL had $335m active interest rate swaps, representing 93% of drawn debt. This falls to 76% after As at As at considering commitments1 Cost of debt 30 Sep 22 31 Mar 22 • $30m, 3 year forward sta
Slide 28: Outlook
Outlook 28
Slide 29: Prudent capital management initiatives
Prudent capital management initiatives Initiatives reflect market conditions and Stride’s transition to a maturing real estate investment FY23 full year forecast distributable manager profit after current income tax The increase in interest rates and inflation over the last six months has been signi
Slide 30: Outlook
Outlook With its resilient portfolio, prudent capital management and its Real Estate Investment Diversified REIM Repositioned Management (REIM) business to provide earnings diversification, platform business portfolio Stride considers it is well exposure to all four management fees now focus on prop
Slide 31: Glossary
Glossary 31
Slide 32: Glossary
Glossary AUM Assets under management Contract Rental Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL (or the relevant landlord) by that tenant under the terms of the relevant lease as at the relevant date, annualised for the 12-month period on the basi
Slide 33: Appendices
Appendices 33
Slide 34: Appendix 1: Portfolio by sector
Appendix 1: Portfolio by sector Town Centre/ Overview Total Portfolio Office Industrial Large Format Retail Retail Shopping Centres Office and Town Centre portfolio1 Properties (no.) 9 6 3 Net Contract Rental ($m) 53.8 33.0 20.8 WALT (years) 5.6 6.6 4.0 Occupancy Rate (% by area)2 96.7 95.0 98.6 Por
Slide 35: Appendix 2: SPL Office and Town Centre portfolio
Appendix 2: SPL Office and Town Centre portfolio Pro As at As at SPL Overview forma1,2 30 Sep 221 31 Mar 22 Location by Contract Rental1 Properties (no.) 10 9 15 Tenants (no.) 248 243 358 Net Lettable Area (sqm) 135,976 121,895 151,212 Wellington Net Contract Rental ($m) 64.6 53.8 63.0 43% Auckland
Slide 36: Appendix 3: Net contract rental and profit bridges
Appendix 3 Net Contract Rental $10.9m $64.6m $63.0m $1.0m ($4.2m) $53.8m ($5.9m) As at Rent reviews Reclassification and other Disposals As at Office acquisition Pro forma 31 Mar 22 items 30 Sep 22 (110 Carlton Gore Road) 30 Sep 22 Profit before other (expense)/income and income tax $4.8m $25.3m $3.
Slide 37: Appendix 3 (cont.): NTA and investment property
Appendix 3 (cont.) Net Tangible Asset per share $0.05 $0.01 $2.28 ($0.01) ($0.10) $2.14 ($0.02) ($0.02) ($0.05) As at Operating profit Income tax Movement in cash Net change in fair Impairment of Share of profit in Dividends As at 31 Mar 22 before tax expense flow hedges, net of value of equity- acc
Slide 38: Appendix 4: Industre summarised financial information
Appendix 4: Industre summarised financial information Summarised statement of financial position ($000) Industre SPL’s interests Joint Joint Joint Joint venture operations Total venture operations Total Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 30 Sep 22 30 Sep 22 30 Sep 22 30 Sep
Slide 39: 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 six months ended 3