Spear Reit Ltd. · JSE:SEA
Spear Reit — FY2018 Earnings Presentation
35 slides from Spear Reit's earnings presentation, August 2018
Slide 1: Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018
Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018
Slide 2: Table of Contents
Table of Contents Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 2
Slide 3: Welcome & Introduction
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 Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 Februa
Slide 4: Spear REIT at a Glance
2. Spear REIT at a Glance Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 4
Slide 5: Spear REIT at a Glance
Spear REIT at a Glance • JSE listing 11 November 2016 Active asset • Western Cape-focused real estate investor management • Successful tenant retention programme = High occupancy • Value creation through active asset management Portfolio Value R3.1 billion Average Escalation % 8.38% Rentable Area (G
Slide 6: Highlights – 2018 Financial Year
3. Highlights – 2018 Financial Year Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 6
Slide 7: Highlights – 2018 Financial Year
Highlights – 2018 Financial Year • Exceeded full year distribution forecast by 1.95% • TNAV per share growth of 15.4% • 117% asset growth in core portfolio • 68% growth in market capitalisation Distribution Per Share 78.50 cents 1.95% over revised forecast Tangible Net Asset Value Per Share 15.4% to
Slide 8: Financial Performance
4. Financial Performance Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 8
Slide 9: Summary Income Statement
Summary Income Statement Group Audited Group Audited Year ended 4 months ended Feb 18 Feb 17 R’000 R’000 Total Revenue 316 595 61 262 Property operating and management expenses (87 422) (16 294) Consolidated Net property related income 229 173 44 968 Statement of Administrative expenses (17 530) (4
Slide 10: Summary Balance Sheet
Summary Balance Sheet Group Group Audited Audited Feb 18 Feb 17 R’000 R’000 Consolidated Statement of Financial Position ASSETS Non-current assets 2 975 850 1 452 376 Current assets 251 488 41 136 TOTAL ASSETS 3 227 338 1 493 512 EQUITY AND LIABILITIES Reporting periods are not comparable Total attr
Slide 11: Funding
Funding Management successfully refinanced R691 million of Funding borrowings and agreed new Maturity terms at year end with an expiry in February 2021 at a rate of prime less 1.30% LTV – 38,48% Total Borrowings – R 1,205 billion Average Cost of Funding – 9,25% 0.40% Hedged Funding – 57,58% Provisio
Slide 12: Portfolio Overview
5. Portfolio Overview Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 12
Slide 13: Portfolio Overview
Portfolio Overview Active Asset Management Western Cape 98% of assets Number of properties 31 Portfolio value R3.1 billion Average property rental rate R91/m2 Average property valuation per m2 R9 665/m2 In force escalations 8.38% Cost to income ratio (Net) 18.51% Provisional Summarised Audited Conso
Slide 14: Acquisitions & Disposal
Acquisitions & Disposal Acquisitions: The Group acquired the following properties during the year ending 28 February 2018: Transfer Acquisition Value Debt Funding Acquisition Yield Date R'000 R'000 % 142 Edward Street, Tygervalley 1-Mar-17 41,200 23,200 9.70 Selective House, Tygervalley 14-Mar-17 13
Slide 15: Top Properties by Value
Top 5 Properties by Value Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 15
Slide 16: Sectoral Split by Revenue & GLA
Sectoral Split by Revenue & GLA Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 16
Slide 17: Lease Expiry by GLA
Lease Expiry by GLA Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 17
Slide 18: Top Tenants by GLA
Top 10 Tenants by GLA – FY 2018 : 139 000m2 = 42.86% of Fund Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 18
Slide 19: Tenant & Vacancy Profile
Tenant & Vacancy Profile Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 19
Slide 20: Risk Management
Risk Management Portfolio water requirements: 2.6m/lts per week Spear water continuity storage capacity: 1.07m/lts Water continuity investment: R 7 million Capital deployed to date: R 2 million Water Continuity Water use & transport license's In process Current boreholes: 02 Current well points 03 B
Slide 21: Risk Management cont.
Risk Management cont. Assets earmarked for Phase 1 rollout: 06 Combined system size: 2,33MWH Renewable energy investment: R24 million Renewable Energy Average payback period 4.5 years Benefits of renewable energy: Reduction of energy costs by approx. 30% Less reliance on fossil fuel generated supply
Slide 22: Developments & Redevelopment Projects
Developments & Redevelopment Projects Organic Portfolio Growth Sable Square - Phase 1 Physical address: Cnr Bosmansdam Rd & Ratanga Rd, Milnerton GLA added: 3 431m2 Sector: Mixed Use Development cost: R 50 000 000 Completion yield: 9.8% Status: Completed Provisional Summarised Audited Consolidated F
Slide 23: Developments & Redevelopment Projects
Developments & 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: R 200 000 000 Target yield: 10% Status: Target Commencement FY 2019 Archi
Slide 24: Developments & Redevelopment Projects
Developments & Redevelopment Projects Organic Portfolio Growth 78 on Edward Physical address: 78 Edward Street, Tygervalley GLA added: 3 500m2 Sector: Mixed Use Development cost: R 110 000 000 Target yield: 9% Status: Completion in FY 2019 Architect’s Impression Provisional Summarised Audited Consol
Slide 25: Developments & Redevelopment Projects
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: R 1 700 000 000 Target yield: 10% Status: Target Commencement TBA Architect’s Impression Provi
Slide 26: Subsequent Transactions
6. Subsequent Transactions Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 26
Slide 27: Island Business Park, Paarden Eiland Cape Town
Island Business Park, Paarden Eiland Cape Town Physical address: No. 8 Section Street, Paarden Eiland GLA: 2 322m2 Sector: Mixed Use Acquisition price: R24 000 000 Acquisition yield: 10% Strategic Acquisition: Part of Paarden Eiland Development Strategy Provisional Summarised Audited Consolidated Fi
Slide 28: Blackheath Park, Blackheath, Cape Town
Blackheath Park, Blackheath, Cape Town Main tenants: Pioneer Fishing , ZTE / Bollare & Namaqua Wines Physical address: Cnr Range & Station Road, Blackheath GLA: 37 333 m2 Sector: Industrial Acquisition price: R110 500 000 Acquisition yield: 10.43% WALE: 28 months Provisional Summarised Audited Conso
Slide 29: Old Mutual Private Wealth, Century City, Cape Town
Old Mutual Private Wealth, Century City, Cape Town Main tenant: Old Mutual Private Wealth, Estuaries Physical address: No.2 Oxbox Crescent, Century City GLA: 4 199m2 Sector: Commercial Acquisition price: R98 000 000 Acquisition yield: 9.22% WALE: 52 months Provisional Summarised Audited Consolidated
Slide 30: Outlook
7. Outlook Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 30
Slide 31: Outlook
Outlook Portfolio value R 3,1 billion High Quality Real GLA of 324 245m2 Estate Portfolio Occupancy rate 98,1% Cost to income ratio net 18,51% Fully internally managed fund Active Asset Led by industry veterans with successful track record Management Proximity to assets is excellent Substantial shar
Slide 32: Executive Management Announcement
8. Executive Management Announcement Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 32
Slide 33: Executive Management – Role Changes
Executive Management – Role Changes Quintin Rossi (37) Mike Flax (53) INCOMING CHIEF EXECUTIVE OFFICER EXECUTIVE DEPUTY CHAIRMAN Co-founder Of Spear Co-founder Of Spear Committees: Executive, Investment, Committees: Executive, Investment, Audit&risk & Social/Ethics Audit&risk Provisional Summarised
Slide 34: Questions & Answers
9. Questions & Answers Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018 34
Slide 35: Thank You
THANK YOU Provisional Summarised Audited Consolidated Financial Statements for the year ended 28 February 2018