Spear Reit Ltd. · JSE:SEA
Spear Reit — H1 FY2019 Earnings Presentation
40 slides from Spear Reit's earnings presentation, October 2018
Slide 1: Unaudited consolidated interim results
Unaudited consolidated interim results for six months ended 31 August 2018
Slide 2: Table of Contents
Table of Contents 8. Questions & Answers 1. Welcome & Introduction 7. Outlook 2. Spear REIT at a Glance 6. Subsequent Transactions 3. Highlights 5. Portfolio Overview 4. Financial Performance Unaudited consolidated interim results for six months ended 31 August 2018 2
Slide 3: Welcome & Introduction: Mission Statement
MISSION STATEMENT “To be the leading Western Cape-focused REIT and to consistently grow our distribution per share ahead of inflation and within the top quartile of our peer group” 1. Welcome & Introduction Unaudited consolidated interim results for six months ended 31 August 2018 3
Slide 4: Spear REIT at a Glance
2. Spear REIT at a Glance Unaudited consolidated interim results for six months ended 31 August 2018 4
Slide 5: Spear REIT at a Glance
Spear REIT at a Glance • Exceeded full-year FY2018 distribution by 1.95% Active Asset • Western Cape-focused real estate investor Management • Successful tenant retention programme = High occupancy • Value creation through active asset management Portfolio Value R3.37 billion Average Escalation 8.04
Slide 6: Highlights - 2019 Interim Period
3. Highlights - 2019 Interim Period Unaudited consolidated interim results for six months ended 31 August 2018 6
Slide 7: Highlights - 2019 Interim Period
Highlights - 2019 Interim Period • Achieved interim distribution target • 7.68% asset growth in core portfolio • 14.57% growth in market capitalisation Distribution Per Share 41.73 cents 0.4% over interim forecast Tangible Net Asset Value Per Share 0.5% to R11.63 (pre-distribution) Investment Proper
Slide 8: Financial Performance
4. Financial Performance Unaudited consolidated interim results for six months ended 31 August 2018 8
Slide 9: Summary Income Statement
Summary Income Statement Group Group Group Unaudited Unaudited Audited 6 months ended 6 months ended Year ended August 2018 August 2017 February 2018 R’000 R’000 R’000 Total revenue 212 619 120 749 316 595 Consolidated Property operating and management expenses (68 284) (29 717) (87 422) Net propert
Slide 10: Distribution Reconciliation
Distribution Reconciliation Reconciliation between earnings and distributable Group Unaudited Group Unaudited Group Audited earnings 6 months ended 6 months ended Year ended August 2018 August 2017 February 2018 R’000 R’000 R’000 Earnings (profit attributable to owners of the parent) 101 010 132 971
Slide 11: Summary Balance Sheet
Summary Balance Sheet Group Group Group Unaudited Unaudited Audited 6 months ended 6 months ended Year ended August 2018 August 2017 February 2018 R’000 R’000 R’000 ASSETS Non-current assets 3 446 298 2 720 081 2 975 850 Consolidated Current assets 36 785 87 395 251 488 Statement of Total assets 3 4
Slide 12: Funding
Funding R45 m R155 m 4% R100 m Funding Maturity 13% 8% Management successfully refinanced R944 million of borrowings and agreed new terms in the interim period with funding ranging between prime less 1.24% and 1.5% R403 m R1 215 bn LTV – 36.01% 33% Total Borrowings – R1.215 billion R512 m Average Co
Slide 13: Portfolio Overview
5. Portfolio Overview Unaudited consolidated interim results for six months ended 31 August 2018 13
Slide 14: Portfolio Overview
Portfolio Overview Pure Property Investments Western Cape 98% of assets Number of properties 33 Portfolio value R3.37 billion Average property rental rate R80/m2 Average property valuation per m2 R8 957/m2 In force escalations 8.04% Total cost to income ratio (net) 22.12% Unaudited consolidated inte
Slide 15: Acquisitions & Disposals
Acquisitions & Disposals The group acquired the following properties during the period ended 31 August 2018: Transfer Acquisition value Debt funding Cash funding Vendor placing Acquisition date R’000 R’000 R’000 R’000 yield % Island Business Park, Paarden Eiland 03/08/18 24 000 - 24 000 - 9.31 Black
Slide 16: Top 5 Properties by Value
Top 5 Properties by Value Total Value Total GLA Portfolio R1 847 035 000 177 614m2 54.81% Mega Park Industrial 2 Long Street, Sable Square, 15 on Orange, Upper Eastside, Estate, Bellville South Cape Town Milnerton Cape Town Woodstock Value (Rm) 428 000 Value (Rm) 422 500 Value (Rm) 375 000 Value (Rm
Slide 17: Sectoral split by Revenue & GLA
Sectoral split by Revenue & GLA For the period ended 31 August 2018 Property revenue (Rm) R204 million GLA (m2) 376 757m2 Hospitality Residential Commercial Residential 12% 2% Retail 30% 2% Hospitality 19% 8% Industrial Commercial Retail Industrial 29% 38% 9% 51% Unaudited consolidated interim resul
Slide 18: Tenant & Vacancy Profile
Tenant & Vacancy Profile Analysis of property portfolio Analysis of property portfolio in respect of as at 31 August 2018 tenant profiles, is provided below Total Vacancy Total Number of tenants 4 227m = 1.12% 2 100% 387 (Due to aggressive letting & successful tenant retention programs) Based on GLA
Slide 19: Lease Expiry Profile
Lease Expiry Profile Lease Expiry Profile based on GLA as at 31 August 2018 100% 90% 80% 70% 60% 50% 40% 30% Average 20% 26% 10% 0% Vacant Monthly Expires Expires Expires Expires Expires 09/2018 09/2019 09/2020 09/2021 09/2022 to 08/2019 to 08/2020 to 08/2021 to 08/2022 onwards Industrial Commercial
Slide 20: Top Tenants by GLA
Top 10 Tenants by GLA - FY2019 Interim Period: 140 720m2 = 37.35% 25K/m2 20K/m2 15K/m2 10K/m2 5K/m2 0K/m2 Tanker Management MWEB Imperial Services Retirement Liquor Runners Limited Pride Cargo Multi Room Pembury Lodge Glass Distell African Consol Limited Nampak Unaudited consolidated interim results
Slide 21: Developments & Redevelopment Projects: Sable Square Phase 2
Tenant & Vacancy Developments & Profile Redevelopment Projects Organic Portfolio Growth Sable Square - Phase 2 Physical address: Cnr Bosmansdam Rd & Ratanga Rd, Milnerton Planned GLA to be added: 12 000m2 Sector: Retail & Residential Development cost: R200 000 000 Target yield: 10% Status: Target Co
Slide 22: Developments & Redevelopment Projects: 78 on Edward
65 % Developments & PR E- Redevelopment Projects LE T Organic Portfolio Growth 78 on Edward Physical address: 78 Edward Street, Tygervalley GLA added: 3 500m2 Sector: Mixed Use Development cost: R110 000 000 (Incl. Land Cost) Target yield: 9% Status: Completion in FY2019 Architect’s Impression Unaud
Slide 23: Developments & Redevelopment Projects: Marine Place
Developments & Redevelopment Projects Organic Portfolio Growth Marine Place - Paarden Eiland Physical address: Marine Drive, Paarden Eiland GLA to be developed: 52 000m2 Sector: Mixed Use Development cost: R1 400 000 000 Target yield: 10% Status: Target Commencement TBA Architect’s Impression Unaudi
Slide 24: Subsequent Transactions
6. Subsequent Transactions Unaudited consolidated interim results for six months ended 31 August 2018 24
Slide 25: Talana Close
Talana Close Physical address: 6 Talana Close, Bellville GLA added: 24 725m2 Sector: Industrial Acquisition price: R52 800 000 Acquisition yield: 9.08% WALE: 62 months Unaudited consolidated interim results for six months ended 31 August 2018 25
Slide 26: Outlook
7. Outlook Unaudited consolidated interim results for six months ended 31 August 2018 26
Slide 27: Outlook
Outlook Portfolio value R3.37 billion High Quality Real GLA of 376 757m2 Estate Portfolio Occupancy rate 98.88% Cost to income ratio net 22.12% Fully internally managed fund Active Asset Led by industry veterans with successful track record Management Proximity to assets is excellent Substantial sha
Slide 28: Questions & Answers
8. Questions & Answers Unaudited consolidated interim results for six months ended 31 August 2018 28
Slide 29: Appendix: Top Assets
Appendix: Top 10 Assets Unaudited consolidated interim results for six months ended 31 August 2018 29
Slide 30: Mega Park Industrial Estate, Bellville South
Top 10 Assets Mega Park Industrial Estate, Bellville South Physical address: Cnr Pieter Barlow and Mill Roads, Bellville, Cape Town Value (R‘000): R428 000 Sector: Industrial Zoning: Industrial GLA: 86 095m2 Wale: 53 months Tenants: Consol Glass, Tuffy Manufacturing, Imperial Group, Storage Town Una
Slide 31: 2 Long Street, Cape Town
Top 10 Assets 2 Long Street, Cape Town Physical address: 2 Long Street, Cape Town Value (R‘000): R422 500 Sector: Commercial Zoning: General Business 1 GLA: 25 085m2 Wale: 21 months Tenants: SAMSA, Sturrock Grindrod, Fairheads, Harambee Unaudited consolidated interim results for six months ended 31
Slide 32: Sable Square, Milnerton
Top 10 Assets Sable Square, Milnerton Physical address: Cnr Bosmansdam and Ratanga Roads, Milnerton Value (R‘000): R375 000 Sector: Retail Zoning: General Business 1 GLA: 30 947m2 Wale: 39 months Tenants: Pick n Pay, Spur, Clicks, China Town, Baby City Unaudited consolidated interim results for six
Slide 33: 15 on Orange, Cape Town
Top 10 Assets 15 on Orange, Cape Town Physical address: Cnr Grey Pass and Orange Street, Cape Town Value (R‘000): R313 000 Sector: Hospitality Zoning: Mixed Use GLA: 16 726m2 Wale: 111 months Tenants: Marriot Hotels International Unaudited consolidated interim results for six months ended 31 August
Slide 34: Upper Eastside, Woodstock
Top 10 Assets Upper Eastside, Woodstock Physical address: 31 Brickfield Road, Woodstock, Cape Town Value (R‘000): R308 500 Sector: Hospitality Zoning: Mixed use GLA: 18 761m2 Wale: 56 months Tenants: DoubleTree by Hilton and Conference Centre, Shanduka Black Umbrella, Aegis Media, STA Travel Unaudit
Slide 35: Mweb Head Office, Bellville
Top 10 Assets Mweb Head Office, Bellville Physical address: 100 Fairway Close, Parow Value (R‘000): R148 400 Sector: Commercial Zoning: General Business 1 GLA: 11 196m2 Wale: 19 months Tenants: Mweb Head Office Unaudited consolidated interim results for six months ended 31 August 2018 35
Slide 36: Waterhouse Place, Century City
Top 10 Assets Waterhouse Place, Century City Physical address: 1 Waterhouse Place, Century City Value (R‘000): R113 200 Sector: Commercial Zoning: Commercial GLA: 11 030m2 Wale: Under Redevelopment Unaudited consolidated interim results for six months ended 31 August 2018 36
Slide 37: Blackheath Park, Blackheath
Top 10 Assets Blackheath Park, Blackheath Cape Town Physical address: Cnr Range & Station Road, Blackheath Value (R‘000): R 115 000 Sector: Industrial GLA: 37 333m2 Wale: 17 months Tenants: Pioneer Fishing, Namaqua Wines, Bolloré Logistics Unaudited consolidated interim results for six months ended
Slide 38: Old Mutual Private Wealth, Century City
Top 10 Assets Old Mutual Private Wealth, Century City, Cape Town Physical address: No. 2 Oxbox Crescent, Century City Value (R‘000): R99 000 Sector: Commercial Acquisition yield: 9.22% GLA: 4 199m2 Wale: 12 months Unaudited consolidated interim results for six months ended 31 August 2018 38
Slide 39: Blackheath DC, Blackheath
Top 10 Assets Blackheath DC, Blackheath Physical address: Cnr Range and Anfield Road, Blackheath Value (R‘000): R89 000 Sector: Industrial Zoning: General Business 1 GLA: 22 315m2 Wale: 46 months Tenants: Liquor Runners, Elzea Snacks Unaudited consolidated interim results for six months ended 31 Aug
Slide 40: Thank You
i) SPEAR F REIT LIMITED Thank You