Spear Reit Ltd. · JSE:SEA
Spear Reit — H1 FY2025 Earnings Presentation
35 slides from Spear Reit's earnings presentation, October 2024
Slide 1: Unaudited Consolidated Interim Results for the six months ended 31 August 2024
THE WESTERN CAPE REIT CREDIBLE PREDICTABLE CONSISTENT UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2024
Slide 2: Salient Details
SALIENT DETAILS 41.61cps 39.53cps 23.93% 95.08% 95.00% HY2025 HY2025 LTV Occupancy HY2025 DIPS DPS Payout ratio 2.05% 3.14% 3.01times R11.74 98.05% HY2025 HY2025 ICR TNAV HY2025 DIPS growth DPS growth Collection VIRGIN PADEL, THE ISLAND, PAARDEN EILAND NATURE OF ABBREVIATIONS bps basis points BUSINE
Slide 3: Spear REIT at a Glance
Spear REIT at a GLANCE Sectoral split by Value, Revenue & GLA R4.22bn R307m 405 709m2 42% 39% 18% 1% 43% 41% 16% 26% 62% 12% Value of properties Property revenue (excluding smoothing) Gross lettable area (m 2) 27 95% 12 9 6 91% 97% 97% Number of properties Property occupancy (%) Commercial Industria
Slide 4: Spear Segmental Analysis
Spear Segmental ANALYSIS Industrial R1 638m 252 941m2 97% R124 609 39% 12% 49% 42% 11% 47% 100% 96% 94% 36% 10% 54% Property value Gross lettable area (m 2) Property occupancy (%) Property revenue (R’000) Retail R740m 47 425m2 97% R50 667 79% 21% 54% 46% 95% 99% 80% 20% Property value Gross lettable
Slide 5: Spear Segmental Analysis Continued: Commercial
SPEAR SEGMENTAL ANALYSIS CONTINUED Commercial R1 771m 105 343m2 28% 18% 9% 21% 7% 17% 22% 13% 11% 26% 8% 2% 1% 16% Property value Gross lettable area (m 2) 91% R131 528 90% 85% 100% 94% 77% 100% 88% 22% 18% 8% 32% 5% 14% Property occupancy (%) Property revenue (R’000) CBD Tygervalley Parow Century C
Slide 6: Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Unaudited Group Unaudited Audited FINANCIAL Six months ended Six months ended Year ended August 2024 August 2023 February 2024 R'000 R'000 R'000 POSITION ASSETS Investment property (including straight-line accrual) 4 043 563 4 062 493 4 180 066 Property, plant and
Slide 7: Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of COMPREHENSIVE INCOME Unaudited Six months ended August 2024 Group Unaudited Six months ended August 2023 Audited Year ended February 2024 R'000 R'000 R'000 Property revenue Spear REIT Limited and its subsidiaries for – Contractual rental income 219 354 215 259 440
Slide 8: Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of CHANGES Group Total Non- Share Accumulated Equity attributable controlling Total capital profit reserve to parent interest equity IN EQUITY R'000 R'000 R'000 R'000 R'000 R'000 Balance as at 28 February 2023 2 102 146 475 506 16 757 2 594 409 13 112 2 607 521 Chang
Slide 9: Condensed Consolidated Statement of Cash Flows
Condensed Consolidated Group Statement of Unaudited Unaudited Audited Six months ended Six months ended Year ended CASH August 2024 August 2023 February 2024 R'000 R'000 R'000 Cash generated from operations FLOWS Profit before tax 118 400 116 694 364 663 Adjustments for: Straight-line rental income
Slide 10: Operating Segment Information
OPERATING SEGMENT INFORMATION Non- Industrial Commercial Retail property Development Total R'000 R'000 R'000 R'000 R'000 R'000 Segment revenue 124 609 131 528 50 667 116 – 306 919 Spear REIT Limited and its subsidiaries for Straight-lining of leases 4 776 (2 197) 669 – – 3 247 the six months ended 3
Slide 11: Appendix 1: SA REIT Funds from Operations per Share
APPENDIX 1 SA REIT funds from operations (SA REIT FFO) per share SA REIT BEST PRACTICE August February RECOMMENDATIONS 2024 2024 CALCULATION DISCLOSURE Profit or loss per IFRS Statement of Comprehensive Income (SOCI) attributable to the parent 117 114 362 740 Adjusted for: Accounting/specific adjust
Slide 12: Appendix 1: Dividend Declared and Dividend per Share
APPENDIX 1 – SA REIT BEST PRACTICE RECOMMENDATIONS CALCULATION DISCLOSURE CONTINUED Dividend declared and dividend per share Cents Total distributions for the period – 2025 Growth per share R'000 Interim distribution declared on 24 October 2024 (Distribution number 16) 3.14% 39.53 105 663 Final dist
Slide 13: Appendix 1: SA REIT Cost-to-Income Ratio
APPENDIX 1 – SA REIT BEST PRACTICE RECOMMENDATIONS CALCULATION DISCLOSURE CONTINUED SA REIT cost-to-income ratio August February 2024 2024 Expenses Operating expenses per IFRS SOCI (includes municipal expenses) 115 258 215 016 Administrative expenses per IFRS SOCI 17 536 35 901 Other expenses, if di
Slide 14: Appendix 1: GLA Vacancy, Cost of Debt and LTV
APPENDIX 1 – SA REIT BEST PRACTICE RECOMMENDATIONS CALCULATION DISCLOSURE CONTINUED SA REIT GLA vacancy rate August February 2024 2024 m2 m2 GLA of vacant space A 19 978 29 351 GLA of total property portfolio B 405 709 426 542 SA REIT GLA vacancy rate (%) A/B 4.92 6.88 Cost of debt August February 2
Slide 15: Selected Explanatory Notes to the Results
Selected Explanatory NOTES TO THE RESULTS 1. Earnings per share 1.1 Basic earnings per share This note provides the obligatory information in terms of Group IAS 33 Earnings Per Share and SAICA Circular 1/2023 for Unaudited Unaudited Audited Six months ended Six months ended Year ended the group and
Slide 16: Introduction
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Introduction look forward to continuing our co-operative relationship with the absorption of material increases in asset insurance and SASRIA Provincial Government and the Local Authority in Cape Town as we costs in this reporting period, top-line
Slide 17: Financial Results (continued)
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Financial results (continued) rental reversions moved from marginally negative at FY2024 to debtors outstanding of 120 days and more with very low prospect positive in HY2025 as renewal and relet objectives are achieved. of recoverability. Signific
Slide 18: Top 10 Properties by Value
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Top 10 properties by value Value including lease asset GLA Vacancy % of Valuation Property R'000 Sector m2 m2 total value R/m2 1. Mega Park, Bellville 551 000 Industrial 86 195 1 318 13.07 6 392 2. Sable Square Shopping Centre, Milnerton 478 000 Re
Slide 19: Fair Value Disclosures
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Fair value disclosures This net annual income stream is discounted and aggregated to determine an estimated net present value of the cash flow. To the sum of the discounted net annual value of the cash flow is added an amount that represents an est
Slide 20: Fair Value Disclosures (continued) and Sectoral Performance
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Fair value disclosures (continued) Sectoral performance effects of semigration continue to drive demand for quality office accommodation in addition to the growing demand for space The fair market valuations are tested for reasonableness by Industr
Slide 21: Tenant Grading and Letting Activity
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Tenant grading Number GLA GLA Number of tenants m2 % of tenants % A – Large national, large listed and government tenants 145 029 35.75 95 21 B – Smaller international and national tenants 240 125 59.19 305 67 C – Other local tenants and sole propr
Slide 22: Lease Expiry Profile
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Lease expiry profile Lease expiry profile based on GLA Total Total Total Total Total Total Total 5% 3% 19% 20% 19% 4% 30% 100% 90% 80% Industrial 70% Commercial 60% Retail 50% 40% 30% 20% 10% 18% Average 0% * Commercial – monthly tenancy Vacant Mon
Slide 23: Capital Expenditure and Redevelopment
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Capital expenditure and redevelopment • Major portfolio upkeep and capital expenditure Post the implementation of the acquisition and the recent • Share buybacks from retained income and cash reserves at disposals by Spear, Spear’s assets under own
Slide 24: Balance Sheet and Risk Management (continued)
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Balance sheet and risk management Borrowings and funding (continued) The group has zero debt due for refinance during HY2025 but an amount of R26 million was settled in an accretive manner. The current Spear’s hedging policy remains in the range of
Slide 25: Group Gearing and In-force Cost of Debt
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Group gearing Gearing ratio 45.81% 45.91% 46% 45.36% 600 44% 500 42% 400 39.58% 40% 39.05% 300 38.69% 328 200 38% 45 36.30% Gearing (%) 100 Variance (bps) 36% 10 0 34% (36) -100 31.60% 32% -200 (239) 30% -300 -400 28% -500 26% -600 24% (686) 23.93%
Slide 26: Group Net Debt Profile and Debt Expiry
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Group net debt profile 72% FY2027 TOTAL FIXED Variable Fixed debt NET DEBT debt DEBT EXPIRY 9.08% R1.01bn 10.12% R0.92bn 20-month weighted 9.43% average maturity 29% FY2026 Amount (R'000) Amount (R'000) 916 332 113 533 Weighted average Weighted ave
Slide 27: LTV Sensitivity and Sustainability
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED LTV sensitivity SA REIT LTV 60 50 Emira assets Emira short-term 40 acquisition debt GAT Phase 1 & 2 Percentage 18.34% 1.14% 0.27% 31.26% 30 23.93% (1.33%) FY2025 interim Disposal 20 dividend 10 2.60% (10.33%) Vendor placement (3.36%) 0 Property dis
Slide 28: TNAV Bridge and Tangible Net Asset Value
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED TNAV bridge Profit for the year (excl. Fair value adjustment IFRS 2 expense for fair value adjustment) and impairments future CSP 14 R11.78 R0.38 R0.06 R0.02 R11.74 R11.34 12 (R0.07) (R0.04) (R0.40) (R0.39) 10 Issue of treasury Distribution payable
Slide 29: Summary of Solar PV
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Summary of solar PV 16 2 16 23 33 59 Number of properties with Average solar penetration rate (%) % of portfolio assets with solar solar 7 365 21 25 Total: 578 7 943kWp Average total portfolio Total kWp of solar installed penetration rate (%) MANHA
Slide 30: Summary of Solar PV Continued
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Summary of solar PV continued 19 068 Total number of panels 2 8 6 2 8 6 Self-funded Roof rental Financed 109 Completed solar PV systems: 16 Total number of inverters 9 877 10 000 9 000 6 367 8 000 7 353 FY2025 7 049 Final 7 000 forecast 6 000 5 485
Slide 31: Outlook
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Water • 180 days of zero loadshedding has become a general economic Spear’s guidance for the remainder of FY2025 remains informed opportunity for South Africa and influenced by the following: Water continuity and resources management continues acro
Slide 32: Subsequent Events
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Subsequent events shareholders, provided that the South African tax resident shareholders have provided to the Central Securities Depository The directors are not aware of any events, other than those listed below, that have occurred since the end
Slide 33: Non-resident Shareholders (continued)
SELECTED EXPLANATORY NOTES TO THE RESULTS CONTINUED Non-residents shareholders (continued) b) a written undertaking to inform their CSDP, broker or the company, should the circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial owner, both in the form presc
Slide 34: Directorate and Administration
DIRECTORATE AND ADMINISTRATION Spear REIT Limited Company Secretary Sponsor (Incorporated in the Republic of South Africa) René Cheryl Stober PSG Capital Proprietary Limited (Registration number: 2015/407237/06) 1st Floor, Ou Kollege Building (JSE share code: SEA ISIN: ZAE000228995) Contact Details
Slide 35: Contact details
16th Floor, 2 Long Street, Cape Town, 8001 [email protected] www.spearprop.co.za