Ram Essential Services Property Fund · ASX:REP
Ram Essential Services Property Fund — Investor Presentation (February 2024)
26 slides from Ram Essential Services Property Fund's investor presentation, Feb 29, 2024
Slide 1: 1H24 Operating Results & Update
RAM ESSENTIAL SERVICES PROPERTY FUND 1H24 Operating Results & Update 29 February 2024 REAL ASSET MANAGEMENT I PAGE 1
Slide 2: Agenda
AGENDA 1. Overview………………………… P3-4 2. Financial Performance…………. P5-8 3. Portfolio Performance…………. P9-12 4. Capital Management…….......... P13-16 5. Outlook & Summary…………… P17-19 6. Other Information……………… P20-26 In the spirit of reconciliation, the Real Asset Management Group acknowledges the tradi
Slide 3: Overview
1. OVERVIEW REAL ASSET MANAGEMENT I PAGE 3 North West Private Hospital
Slide 4: Highlights for 1HY FY24 and Beyond
HIGHLIGHTS FOR 1HY FY24 AND BEYOND The portfolio continues to perform soundly and compares favourably to other listed real estate exposure PORTFOLIO OPERATIONS FINANCIAL CAPITAL MANAGEMENT Strong Leasing Outcomes Portfolio Continues to Perform Balance Sheet Strength Continued success in leasing with
Slide 5: Financial Performance
2. FINANCIAL PERFORMANCE REAL ASSET MANAGEMENT I PAGE 5 The Gold Coast Surgery Centre
Slide 6: Funds From Operations (FFO)
FUNDS FROM OPERATIONS (FFO) Income growth offsetting higher interest costs Funds from Operations Strong 8% leasing spreads driving property NOI HY241 HY232 (FFO net of adjustments) growth of 2.4% or comparable property NOI growth of 7.1%3 $m $m Embedded growth from inflation exposed rental escalator
Slide 7: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Strengthened balance sheet and improved interest rate hedging position Gearing of 35.7% within target range of 30% – 40%. Managed towards lower end of range post near-term capital recycling Initiated share buyback program with 1.2m shares bought in December Hedgi
Slide 8: Near Term Activities and Results in Capital Management
NEAR TERM ACTIVITIES AND RESULTS IN CAPITAL MANAGEMENT We have continued to manage the balance sheet in a predictable and sensible manner. During the period we have extended the duration of the debt facilities, increased the interest rate hedge profile, expanded the headroom, and increased the tenur
Slide 9: Portfolio Performance
3. PORTFOLIO PERFORMANCE REAL ASSET MANAGEMENT I PAGE 9 Rutherford Shopping Centre
Slide 10: Portfolio Resilience Continues to Shine
PORTFOLIO RESILIENCE CONTINUES TO SHINE Strong leasing outcomes drive income growth +8% Average Leasing Spreads in 1H FY24 98% Occupancy1 +10.4% across 8 deals NEW +2.4% +6.2% across 9 deals 2 NOI Growth +7.1% on a like-for-like basis RENEWAL Embedded growth from inflation exposed income: >90% of CP
Slide 11: Strong Portfolio Performance
STRONG PORTFOLIO PERFORMANCE Diversified portfolio generating secure and stable income Tenant Mix Income Exposure Key Portfolio Metrics 3% 31 December 23 3% 7% 14% 33% Number of Properties 32 94% 79% 45% Exposed Total Property Value $744.9m Essential to annual 49% Services1 escalators1 1% Occupancy2
Slide 12: Defensive Sector Valuations Hold as We Enter the Next Stage of the Cycle
DEFENSIVE SECTOR VALUATIONS HOLD AS WE ENTER THE NEXT STAGE OF THE CYCLE All assets externally valued within last 12 months Valuation Waterfall Three assets disposed at or above book value, affirming valuations 29.9 4.2 10.2 Market value alignment facilitates capital recycling 5.8 786.5 strategy 744
Slide 13: Capital Management
Wembley Day Surgery 4. CAPITAL MANAGEMENT REAL ASSET MANAGEMENT I PAGE 13
Slide 14: Capital Recycling
CAPITAL RECYCLING Active divestment of lower yielding ex-growth assets in the final stages of the value-add journey DISPOSALS $30m Sold at or exceeding book value The Hub, Westlake (QLD) North Lakes Convenience Centre (QLD) Windaroo Village (QLD) Up to FY24 potential divestments* ~$100m $ CAPITAL US
Slide 15: Spotlight on Healthcare Acquisitions and Development
SPOTLIGHT ON HEALTHCARE ACQUISITIONS AND DEVELOPMENT Underlying fundamentals fuel the engine of demand with opportunities to increase pipeline ECONOMIC FUNDAMENTALS UNDERPINNING HEALTHCARE REP ACTIVE HEALTHCARE PIPELINE* Ageing Population Chronic Illness Supply Constrained Per Capita Spending Mayo P
Slide 16: Outlook & Summary
5. OUTLOOK & SUMMARY REAL ASSET MANAGEMENT I PAGE 16 Coomera Square
Slide 17: FY2024 Guidance
FY2024 GUIDANCE 5.6c 1 Distribution Per Security 8% 2 Forecast Distribution Yield >90% Distribution Tax Deferred 95% – 100% Target FFO Payout Ratio 1. Guidance assumes average 3-month BBSW of 4.27%, target gearing range of 25% - 40% and assumes no unexpected delays in delivery of value-add projects.
Slide 18: Executing Strategy and Delivering Growth
EXECUTING STRATEGY AND DELIVERING GROWTH Unique exposure to attractive sectors Strong leasing outcomes with +8% average spreads on renewals and new deals Actively managed Sector leading like-for-like NOI growth of 7.1%1 mitigating higher interest costs 94% of fund income from secure essential servic
Slide 19: Other Information
6. OTHER INFORMATION REAL ASSET MANAGEMENT I PAGE 19 Coomera Square
Slide 20: FFO Reconciliation
FFO RECONCILIATION HY241 HY23 Statutory net (loss)/profit $m (12.3) 3.3 Adjusted for: Reversal of unrealised fair value (gain) on investment properties $m 14.6 6.4 Reversal of unrealised fair value (gain) on derivatives $m 2.8 0.2 Reversal of realised fair value (gain) on investment properties $m 1.
Slide 21: Income Statement
INCOME STATEMENT Revenue HY241 HY23 Rent from investment properties $m 27.0 29.0 Interest revenue $m - - Total revenue $m 27.0 29.0 Expenses Direct property expenses $m (8.9) (8.2) Fund management fees $m (2.7) (3.0) Net realised losses on revaluation of investment properties $m (1.6) - Net unrealis
Slide 22: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET HY241 HY23 Cash and cash equivalents $m 18.5 10.0 Investment properties $m 744.9 807.0 Other assets $m 14.7 17.7 Total assets $m 778.1 834.7 Borrowings $m (287.8) (278.4) Trade and other payables $m (13.7) (17.5) Total liabilities $m (301.5) (295.9) Net assets $m 476.6 538
Slide 23: Portfolio Snapshot
PORTFOLIO SNAPSHOT Essential Dec-23 Capitalisation Occupancy WALE Asset State Retail / Key Tenant Valuation ($m) Rate (% Income)2 (Yrs)1 Medical1 Medical/Healthcare Corrimal Private Healthcare Centre NSW 5.7 6.50% 93% 2.5 100% Dr Nick Marsden Dubbo Private Hospital NSW 22.6 5.25% 100% 12.8 100% Heal
Slide 24: Continued Sustainability and Reporting
CONTINUED SUSTAINABILITY AND REPORTING Benchmarking and sustainability frameworks Longer term Short term Net Zero goal pathway aligned to best practice Benchmarked portfolio against industry Expand scope to other initiatives standards including Green Star and NABERS Establishment of agreed NABERS an
Slide 25: Expansion of a Highly Experienced and Specialised Team
EXPANSION OF A HIGHLY EXPERIENCED AND SPECIALISED TEAM Scott Wehl – Founder, Executive Chairman Scott Kelly – Managing Director, Group CEO 26+ years of experience in Global Wealth Management and 30+ years of experience in Global Wealth Management and Asset Corporate Banking working for top tier glob
Slide 26: Important Information
IMPORTANT INFORMATION GENERAL ADVICE WARNING: The information contained herein does not have any regard to the specific investment objectives, financial situation or the particular needs of any person. The information in this presentation is not intended to be personal financial advice. This materia
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