TR Property Investment Trust PLC · LSE:TRY
TR Property Investment Trust — Investor Presentation (July 2006)
26 slides from TR Property Investment Trust's investor presentation, July 2006
Slide 1: TR Property Investment Trust
TR PROPERTY INVESTMENT TRUST July 2006
Slide 2: Contents
Contents Background, results, performance etc. View of markets. What we are doing. 2
Slide 3: Background – TR Property
Background – TR Property Old established on shore, long only, Investment Trust Dedicated to real estate investment Total return objective A Pan European benchmark (S&P Citigroup Europe) Gross assets £825m, net assets £720m Currently 93% shares 7% property Balance sheet gearing 15% (95% see through)
Slide 4: Comments on Background
Comments on Background Objective avoids the chase for high initial income Property/shares arbitrage is an advantage Pan Europe is our area of expertise Fund has been an active re-purchaser of its equity Fund is run by surveyors Equity turnover is low (16% last year) 4
Slide 5: Strong Recent Results
Strong Recent Results (Y/E March 2006) Share price total return of 66.3% NAV total return of 56.5% Revenue earnings rose 20.7% Dividend increase of 19.3% Outperformed benchmark for the 8th year in a row 10 year share price total return now 25.3% pa 10 year dividend per share growth of 13.2% pa Sourc
Slide 6: Dividends
Dividends 4.0 Final 3.5 Interim 3.0 2.5 Five year historic growth 17.7% p.a. P e n c e P e r S h a re 2.0 Current year growth should be in line with sector average dividend growth 1.5 This is currently around 6% 1.0 0.5 0.0 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005
Slide 7: Total Return Performance: Ten Years
Total Return Performance: Ten Years 900 IPD Monthly Index 800 Benchmark - S&P Citigroup European Property Index TR Property Investment Trust NAV 700 600 500 400 300 200 100 0 Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Note: Prior to September 2001 the benchmark inde
Slide 8: Total Return Performance: Two Years
Total Return Performance: Two Years 220 IPD Monthly Index 200 Benchmark - S&P Citigroup European Property Index TR Property Investment Trust NAV 180 160 140 120 100 80 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Note: Prior to September 2001 the benchma
Slide 9: Discount to NAV - 2001 to date
Discount to NAV - 2001 to date 0 UK-DS INV.TRUSTS TOTAL MKT - DISCOUNT % (DIL) TR PROPERTY - DISCOUNT % (DIL) -5 Discount is appropriate Low dividend yield not in line with most investor’s demands -10 Discount has narrowed in line with sector average Equity assets are re-valued daily -15 Mark to mar
Slide 10: UK Peer Group
UK Peer Group Price total return % Net Assets/ Premium / 14.07.06 Mkt Cap Gross yield 1 year 3 years 5 years (discount) (GBP) TR Property IT 720m 1.8% 31.9 196.7 260.9 (8.3) Aberdeen Property UT 453m 0.3% 27.5 127.0 133.1 - UK Balanced Property IT 414m 4.6% 26.6 77.0 - 1.6 Norwich Property UT 2.84bn
Slide 11: International Peer Group
International Peer Group Top 10 European Property Share Funds % Top 10 Global Property Share Funds % 12 months to end May 2006 12 months to end May 2006 TR PROPERTY INVESTMENT TRUST 42.65 EII INTERNATIONAL PROPERTY-IINCOME (US) 38.86 ERSTE SPAR STOCK EUROPE-PROPERTY-T 34.77 HENDERSON HORIZON -GLOBAL
Slide 12: View of Markets
THAMES RIVER GAPITAL View of Markets
Slide 13: Markets
Markets Inflation scares turning into growth scares Extraordinary volatility in equities Not seen in real estate This may add to the attraction of property Property demand led by private investors ..seeking store of value with inflation protection 13
Slide 14: Opportunities
Opportunities UK REITs expected to attract improved share ratings Global insecurity seems to increase investor demand at current level Yield compression slows gradually giving way to … value growth through active management Tenant demand improves gradually Stable housing markets underpin commercial
Slide 15: Residential vs Commercial
Residential vs Commercial 450 Halifax UK House Price Index 400 IPD Monthly Index Capital Growth 350 300 250 200 150 100 50 Dec-86 Dec-92 Dec-98 Dec-04 Source: IPD Ltd (Investment Property Databank) , Halifax (to 31.05.06) 15
Slide 16: UK Property Equities
UK Property Equities End March UK Props av. 3% premium to NAV Sector down 5.0%, NAVs and NNNAVs up Av. discount now 6.5% ( forecast 16% by mid 2007) Valuations are still behind direct market pricing And development pipelines not fully appraised Solid capital structures and disciplined issuance Share
Slide 17: Europe (ex UK) Property Equities
Europe (ex UK) Property Equities Average NAV premiums down from 30% to 19% Europe (ex UK) down 7% since end March Base rate rises narrowing carry spreads Significant issuance (notably in Austria) But portfolio valuations further behind the market than in UK €3.7 billion cash bid for Colonial launche
Slide 18: What Are We Doing?
THAMES RIVER CAPITAL What Are We Doing?
Slide 19: Portfolio Spread (Gross Assets)
Portfolio Spread (Gross Assets) End March 2005 2006 Current Benchmark % % % % UK Quoted 53.8 54.0 55.5 43.6 UK Direct Property 9.4 7.3 7.1 - UK Unquoted 0.3 0.1 0.1 - Total UK 63.5 61.3 62.7 43.6 Austria Quoted 0.0 0.9 0.9 10.4 France Quoted 11.9 11.3 11.5 12.4 Germany Quoted 0.8 2.1 2.1 3.2 Netherl
Slide 20: Retaining UK Overweight
Retaining UK Overweight REIT status enhances underlying values UK stocks have good EPS growth potential And discounts are to valuations not market prices It’s a London overweight in reality London is specially attractive to global wealth … And is a market we understand and can quantify 20
Slide 21: Top Ten Holdings – End June 2006
Top Ten Holdings – End June 2006 Company % Gross Assets % Net Assets Benchmark Weight (%) Land Securities 14.2 15.4 10.6 British Land 9.0 9.9 8.3 Hammerson 6.6 7.2 4.3 Big Yellow 4.9 5.4 0.4 Slough Estates 4.8 5.3 3.6 Rodamco Europe 4.3 4.9 3.1 Unibail 3.6 4.0 5.5 Liberty International 3.3 3.9 3.5 C
Slide 22: Hunting for cash flow growth
Hunting for cash flow growth We expect another positive run in the sector in 2006 Debt raised by £10m – on b/s gearing now 15% See through gearing around 95% (benchmark 83%) Gently adding to stocks with value creation stories And earnings plays related to real estate Developers, land plays, self sto
Slide 23: Thames Central - Slough
Thames Central - Slough 64,000 sq ft town centre office building bought May 2005. Recommission completed October 2005. 25% let and 13% under offer at year-end. 38% let and 13% under offer now. Current rent £400,000 pa. Will rise to £550,000 pa post completion of deals in solicitor’s hands. Total ren
Slide 24: Stock Selection Comments
Stock Selection Comments Management is more important than assets Focus outperforms diversity Internal management outperforms external.. Common sense beats cleverness Property has few economies of scale So a good little one beats a good big one 24
Slide 25: TR Property wins Most Consistent Investment Trust of the year
2006 TR Property wins Most Consistent Investment Trust of the year, for the third consecutive year, in 2006 TR Property awarded Specialist Investment of the Year 2006 by Moneywise TR Property website ranked 2nd in FTSE 250 website rankings by SiteMorse 25
Slide 26: Important Notice
Important Notice This document is issued for information only by Thames River Capital LLP (“Thames River”) (Authorised and regulated by the Financial Services Authority (“FSA”)). Content relating to unregulated collective investment schemes is only directed at investors meeting the FSA’s Annex 5 cat
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