Spear Reit Ltd. · JSE:SEA
Spear Reit — H1 FY2020 Earnings Presentation
29 slides from Spear Reit's earnings presentation, October 2019
Slide 1: Interim Results Presentation
Interim Results Presentation for the six months ended 31 August 2019
Slide 2: Table of Contents
Table of Contents 1 2 3 Welcome Interim Highlights Interim Financial & Introduction FY2020 Performance FY2020 4 5 6 Portfolio Outlook Questions Overview Financial Results Presentation for the year ended 28 February 2019
Slide 3: Welcome & Introduction
1 Welcome & Introduction Interim Results Presentation for the six months ended 31 August 2019 1
Slide 4: Mission Statement
To be the leading Western Cape- focused REIT and to consistently Mission grow our distribution per share Statement ahead of inflation and within the top quartile of our peer group. Interim Results Presentation for the six months ended 31 August 2019 2
Slide 5: Interim Highlights FY2020
Interim 2 Highlights FY2020 Interim Results Presentation for the six months ended 31 August 2019 3
Slide 6: 2020 Interim Results - Portfolio Snapshot
Interim Highlights 2020 Interim Results - Portfolio Snapshot Assets 31 Number of R3.92bn Asset value 2.82% Asset value R126m Average R9 469/m2 Average growth property value property properties valuation Letting 8.08% 413 832m2 98.1% 29 months R87/m2/pm Average in-force GLA Occupancy WALE Average ren
Slide 7: 2020 Interim Results - Financial Performance
Interim Highlights 2020 Interim Results - Financial Performance Interim distribution 44.64 6.98% 44.64 cents 21.68% cents FY2019 interim distribution FY2019 interim Net cost to Interim distribution Income growth distribution per share Tangible net asset value (TNAV) -4.12% -3.97% R11.19 R11.64 TNAV
Slide 8: TNAV Bridge
TNAV Bridge 14 R12.12 R11.64 12 R0.43 (R0.29) (R0.41) (R0.20) (R0.01) 10 Profit for Fair value Distribution Capital raise Treasury the year adjustment paid 21 June 2019 shares Rands 8 (excluding FV acquired adjustments) 6 4 2 0 TNAV per share TNAV per share at Feb 2019 at Aug 2019 Interim Results Pr
Slide 9: Interim Financial Performance FY2020
Interim 3 Financial Performance FY2020 Interim Results Presentation for the six months ended 31 August 2019 7
Slide 10: Summary Income Statement
Summary Income Statement Consolidated and Group Unaudited six months ended Group Audited Year ended separate statement of Aug 2019 Feb 2019 R’000 R’000 comprehensive income Property revenue 250 566 426 122 for the six months ended Other income 546 8 607 31 August 2019 Total revenue 251 112 434 729 P
Slide 11: Distribution Reconciliation
Distribution Reconciliation Reconciliation between Unaudited six months earnings and distributable ended Aug 2019 earnings R’000 for the six months ended Earnings (profit attributable to owners of the parent) 28 342 31 August 2019 Adjusted for: Fair value adjustments to investment properties 60 497
Slide 12: Summary Balance Sheet
Summary Balance Sheet Consolidated and Group Audited Group Audited six months ended year ended separate statement Aug 2019 Feb 2019 R’000 R’000 of financial position ASSETS for the six months ended Non-current assets 3 988 580 3 808 427 31 August 2019 Current assets 49 158 108 291 Total assets 4 037
Slide 13: Funding
Funding LTV Average Cost of Funding Funding Maturity 38% 8.85% 16 BPS FY2020 6% FY2022 R95m FY2023 R600m 15% R223m 39% R1.53bn R1.53bn 22-month average maturity Cost Cost 8.7% 9.05% 35.8% 64.2% 24 20 FY2021 40% months Variable Fixed months R612m R547m R983m Interim Results Presentation for the six m
Slide 14: Group Gearing
Group Gearing 40% 39.58% 12 39% 10 38.48% 8 38% 38.43% 6 Gearing (%) Variance (%) 37.23% 4 37% 2 36.01% 0 36% -2 35% -4 -6 34% -8 31 Aug 2017 28 Feb 2018 31 Aug 2018 28 Feb 2019 31 Aug 2019 Group gearing Group variance In-force cost of debt for period 10% 9.51% 9.45% 9.09% 9.05% 9.05% 0,5 9% 9.23% 9
Slide 15: Portfolio Overview
4 Portfolio Overview Interim Results Presentation for the six months ended 31 August 2019 13
Slide 16: Top 5 Properties by Value
Top 5 Properties by Value Total Value R1.91bn Total GLA 179 908m2 Portfolio 48.84% Mega Park, 2 Long Street, Sable Square, Northgate Park, UES DoubleTree by Bellville Cape Town Century City Brooklyn Hilton, Woodstock Value (R’000) Value (R’000) Value (R’000) Value (R’000) Value (R’000) 446 732 428 4
Slide 17: Sectoral split by GLA, Value & Revenue
Sectoral split by GLA, Value & Revenue for the period ended 31 August 2019 Hospitality 28 347m2 7% Industrial Residential 53% 220 328m2 R1m 0.3% 0.3% Non-property R4.2m Hospitality Retail 8% 8% R19m 34 650m2 Industrial 29% R70m 413 832m2 Property split R239m by GLA Total revenue by Commercial 32% Re
Slide 18: Letting Activity
Letting Activity Spear began the period with an opening vacancy of 7 992m² and with 91 250m² expiring during the year. Management has successfully renewed and re-let 100 141m² at a positive reversion of 2.72%. The table below reflects the letting activity of the interim period: Expiries and Average
Slide 19: Tenant & Vacancy Profile
Tenant & Vacancy Profile Analysis of the property portfolio An analysis of the property portfolio in respect as at 31 August 2019 of tenant profiles is provided below Total vacancy Total Number of tenants 7 452m = 1.85% 2 100% 417 (Due to aggressive letting and successful tenant retention programmes
Slide 20: Lease Expiry by GLA
Lease Expiry by GLA Lease Expiry Profile based on GLA as at 31 August 2019 Total Total Total Total Total Total Total 2% 0% 22% 21% 13% 16% 26% 100% 90% 80% 70% 60% 50% 40% 30% 20% 20% Average 10% 0% Vacant Monthly Expiries Expiries Expiries Expiries Expiries 09/2019 09/2020 09/2021 09/2022 09/2023 –
Slide 21: Top Tenants by GLA
Top Tenants by GLA FY2019: 150 252m2 = 36.31% of Fund 25 k/m2 20 k/m2 15 k/m2 10 k/m2 Consol Liquor Distell Nampak 15 on Lindsay SG Imperial Multi Room MWEB Runners Orange Manufacturing Consumer Management Autograph Collection Interim Results Presentation for the six months ended 31 August 2019 19
Slide 22: Risk Management: Sustainability Update
Risk Management Sustainability Update Renewable Water energy continuity Assets earmarked for Phase 1 rollout 12 Water continuity investment R7 million Combined system size 4.2 MWh Capital deployed to date R2 million Renewable energy investment R49 million Water use and transport licences In process
Slide 23: Development & Redevelopment Projects: Sable Square - Phase 2
Development & Redevelopment Projects Organic Portfolio Growth Sable Square - Phase 2 Physical address: Cnr Bosmansdam and Ratanga Roads, Milnerton Planned GLA to be added: 12 000m2 Sector: Retail & Residential Development cost: R150m Target yield: 9% Status: TBC Interim Results Presentation for the
Slide 24: Development & Redevelopment Projects: 78 on Edward
Development & Redevelopment Projects Organic Portfolio Growth 78 on Edward Physical address: 78 Edward Street, Tyger Valley GLA added: 3 500m2 Sector: Mixed Use Development cost: R89m Target yield: 9% Status: Completed Interim Results Presentation for the six months ended 31 August 2019 22
Slide 25: Development & Redevelopment Projects: No. 1 Waterhouse Place
Development & Redevelopment Projects Organic Portfolio Growth No. 1 Waterhouse Place Physical address: No. 1 Waterhouse Place, Century City GLA redeveloped: 11 236m2 Sector: Commercial Redevelopment cost: R95m Target yield: 9% Status: Target completion May 2020 Interim Results Presentation for the s
Slide 26: Development & Redevelopment Projects: Marine Place - Paarden Island
Development & Redevelopment Projects Organic Portfolio Growth Marine Place - Paarden Island Physical address: Marine Drive, Paarden Island GLA to be developed: 52 000m2 Sector: Mixed Use Development cost: R1.4bn Target yield: 10% Status: Target commencement TBA Interim Results Presentation for the s
Slide 27: Outlook
5 Outlook Interim Results Presentation for the six months ended 31 August 2019 25
Slide 28: Outlook
Outlook High Quality Real Active Asset FY2020 Estate Portfolio Management Guidance Portfolio value R3.92bn Fully internally managed fund Distribution for FY2020 remains on target for a 6% – 8% growth from FY2019 distribution per share GLA of 413 832m2 Led by industry veterans with successful track r
Slide 29: Thank You & Questions?
6 Thank You & Questions? Interim Results Presentation for the six months ended 31 August 2019 27