Stride Property Group · NZX:SPG
Stride Property — FY2024 Earnings Presentation
37 slides from Stride Property's earnings presentation, May 28, 2024
Slide 1: Stride Property Group Annual Results FY24
Stride Property Group Annual Results for the year ended 31 March 2024 (FY24) Stride Property Group | Annual Results FY24
Slide 2: Contents
Contents 3 Overview 4 Financial overview 5 Sector update 6 Investment management business 9 Portfolio 18 Sustainability 21 FY24 consolidated financial results 24 Capital management 27 Outlook 29 Glossary 31 Appendices Capitalised and technical terms are defined in the glossary on page 30. Stride Pro
Slide 3: Overview
Overview Stride Property Group As at 31 March 2024 SPL office and town centre portfolio1 Value2 WACR WALT Occupancy3 $1.0bn 6.3% 5.9 years 96% Investment management business Total AUM External AUM Management fees6 $3.2bn $2.2bn $19.9m on a committed4,5 basis on a committed4 basis for FY24 Capital ma
Slide 4: Financial overview
Financial overview Stride Property Group Loss after income tax $(56.1)m compared to $(116.7)m loss after income tax for FY23 Distributable profit1 after current income tax $59.1m up +$1.5m / +2.6% from FY23 Distributable profit per share 10.76cps up 0.10cps / +0.9% from FY23 Assets under management
Slide 5: Sector update
Sector update Office1 Town Centres1,3 • Flight to quality continues to be a key theme with occupiers • Specialty sales4 growth of +3.2% compared to FY23. seeking to attract and retain the best talent2 Macroeconomic headwinds beginning to impact consumer discretionary spending • As an example of this
Slide 6: Investment management business
Investment management business Stride Property Group | Annual Results FY24 6 6
Slide 7: Diversified revenue sources
Diversified revenue sources Stride combines a property investment FY24 look-through revenue sources1 business (SPL) with an investment management business (SIML) 3% Increase in office weighting from 31% in FY23 to 36% in FY24 Activity and is primarily due to the acquisition of 110 Carlton Gore Road,
Slide 8: Management fee income
Management fee income FY24 management fee1 income of $19.9m, down from FY23 (FY23: $23.3m) • $16.2m recurring fees, down $(1.4)m from FY23 primarily due to lower portfolio valuations of managed products • Lower activity fees due to no performance fees and reduced transaction activity • Management co
Slide 9: Portfolio
Portfolio Stride Property Group | Annual Results FY24 9 9
Slide 10: Products
Products Stride has committed1 AUM of $3.2bn, including developments Portfolio composition by value as at 31 March 2024 Commitments1 Property categorised as 'Development and Other' $1,031m $8m $14m $1,003m $35m $17m $284m $777m $51m Town Centre $50m $972m3 $414m $705m $24m $676m Office $390m Note: N
Slide 11: FY24 highlights
Woolworths, Newtown FY24 highlights1 • Total portfolio valuation2 of $1.0bn as at 31 Mar 24 • 65 rent reviews completed over 96,000 sqm resulting in a +3.1% increase on prior rentals • Development of new Woolworths Waimakariri Junction, Kaiapoi, completed in Nov 23; 5 Green Star Design rating achiev
Slide 12: FY24 highlights
318 East Tamaki Road, Auckland FY24 highlights1 • Disposal of two properties for an aggregate sales price of $43.5m, 10% above the combined book value • Renewals completed over 45,000 sqm, generating an increase of +23.5% on prior rentals • Potential reversion to market of +18.8%2 across the portfol
Slide 13: FY24 highlights
Chartwell Shopping Centre, Hamilton FY24 highlights1 • Specialty MAT2 increased +3.4% to $230.8m against FY23 • Rent reviews generated an uplift of +5.9% on prior rentals • Total portfolio valuation3 of $414m as at 31 Mar 24, reflects a reduction in fair value of (0.4)% over the 12 months to 31 Mar
Slide 14: SPL Town Centre portfolio
SPL Town Centre portfolio FY24 highlights1 • Specialty MAT2 increased +2.9% to $130.6m against FY23 • Specialty GOC3 for the portfolio remained steady at ~11.0% as at 31 Mar 24, despite increases in insurance and council rates • Rent reviews and renewals drove a +5.8% uplift on prior rentals, primar
Slide 15: SPL Office portfolio
20 Customhouse Quay, Wellington SPL Office portfolio FY24 highlights1 • Settlement of the acquisition of the new building at 110 Carlton Gore Road, Auckland, rated 6 Green Star Design • Disposal of 22 The Terrace, Wellington, settled Jul 23 • Completion of end of trip facilities and ground floor lob
Slide 16: 34 Shortland Street, Auckland
34 Shortland Street, Auckland During FY24, refurbishment works progressed at 34 Shortland Street: • Lobby redeveloped into a modern, bright and welcoming space • End of trip facilities installed, encouraging workers to take active forms of transport • Further floor upgrades, including turnkey suites
Slide 17: Developments
Developments 34 Airpark Drive, FY24 developments Auckland During FY24 Stride has completed a number of development and upgrade projects, including: • New industrial property delivered on time and within budget for Industre, at 34 Airpark Drive, Auckland, delivering a 5.8% yield on cost (including la
Slide 18: Sustainability
Sustainability Stride Property Group | Annual Results FY24 18 18
Slide 19: Progress against targets
Progress against targets During FY23 Stride set a number of challenging climate-related targets, which have been progressed during FY24, with further work to be completed Target FY24 Achievement Reduce scope 1 and 2 emissions by 42% from 18.7% decrease from FY20 baseline year FY20 baseline year by 2
Slide 20: Transitioning to a low carbon future
Transitioning to a low carbon future Stride has progressed its understanding of climate-related risks, and has developed a transition plan which seeks to address those risks, with four pillars which reflect the key elements of Stride’s business Upgrades to existing Developments Acquisitions SIML and
Slide 21: FY24 Consolidated financial results
FY24 Consolidated financial results Stride Property Group | Annual Results FY24 21 21
Slide 22: Financial performance
Financial performance Stride Property Group (Stride) - Consolidated Change 31 Mar 24 31 Mar 23 $m $m $m % Net rental income 72.3 71.1 +1.2 +1.7 Guarantee income 2.4 0.0 +2.4 +100.0 Management fee income 19.9 23.3 (3.5) (14.8) Total corporate expenses (24.0) (23.7) (0.2) (1.0) Profit before net finan
Slide 23: Distributable profit
Distributable profit1 Change Stride Property Group (Stride) - Consolidated 31 Mar 24 31 Mar 23 $m $m $m % Loss before income tax (52.0) (109.7) +57.8 (52.6) Non-recurring, non-cash and other adjustments: - Net change in fair value of investment properties 75.8 118.5 (42.7) (36.0) - Share of loss in
Slide 24: Capital management
Capital management Stride Property Group | Annual Results FY24 24 24
Slide 25: Capital management – debt facilities
Capital management – debt facilities SPL (excl. Industre joint operation assets and debt) • SPL’s bank LVR1 was 36.7% as at 31 Mar 24, or 37.2% on a committed2 basis As at As at • When factoring in SPL’s interests in its products, committed3 gearing is Syndicated debt facilities 31 Mar 24 31 Mar 23
Slide 26: Capital management – cost of debt
Capital management – cost of debt SPL (excl. Industre joint operation assets and debt) • As at 31 Mar 24, SPL had $280m of active interest rate swaps, representing 75% of drawn debt As at As at Cost of debt 31 Mar 24 31 Mar 23 • Weighted average cost of debt at 4.22% increased by only +26 bps over F
Slide 27: Outlook
Outlook Stride Property Group | Annual Results FY24 27 27
Slide 28: Outlook
Outlook • Challenging macroeconomic conditions expected to continue during FY25, which may result in continued reduced levels of activity in the short term • However, current market conditions are expected to create new opportunities for Stride’s real estate investment management business • We are p
Slide 29: Glossary
Glossary Stride Property Group | Annual Results FY24 29 29
Slide 30: Glossary
Glossary AUM Assets under management Contract Rental Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL (or the relevant landlord) by that tenant under the terms of the relevant lease as at the relevant date, annualised for the 12-month period on the basi
Slide 31: Appendices
Appendices Stride Property Group | Annual Results FY24 31 31
Slide 32: Appendix 1: Total AUM
Appendix 1: Total AUM AUM movements over FY24 Stride’s strategy is to +$32m +$24m +$199m create a group of $3,229m $3,153m +$73m $3,225m Products in core ($130m) ($201m) commercial property $913m $1,031m $1,023m sectors which form the basis of its investment management business $786m $726m $777m Tot
Slide 33: Appendix 2: Portfolio by sector
Appendix 2: Portfolio by sector Town Centre/ Overview1 Total Office Industrial Large Format Retail Retail Shopping Centres Office and Town Centre portfolio Properties (no.) 9 6 3 Net Contract Rental ($m) 61.9 41.1 20.7 WALT (years) 5.9 6.9 3.8 Occupancy (% by area)2 96.0 94.6 97.8 Portfolio Valuatio
Slide 34: Appendix 3: SPL Office and Town Centre portfolio
Appendix 3: SPL Office and Town Centre portfolio1 As at As at SPL Overview 31 Mar 24 31 Mar 23 Location by Contract Rental Properties (no.) 9 8 Tenants (no.) 230 233 Net Lettable Area (sqm) 131,213 117,063 Wellington Net Contract Rental ($m) 61.9 51.9 36% WALT (years) 5.9 5.5 Auckland 64% Occupancy
Slide 35: Appendix 4
Appendix 4 Net Contract Rental1 $10.9m $1.5m $61.9m ($1.5m) ($0.8m) $51.9m As at Office acquisition Rent reviews Net Leasing Impact Other items As at 31 Mar 23 (110 CGR) 31 Mar 24 Profit before other expense and income tax $8.2m $53.5m ($3.0m) $50.8m ($1.5m) ($3.5m) ($0.2m) ($2.7m) FY23 Net rental i
Slide 36: Appendix 4 (cont.)
Appendix 4 (cont.) Net Tangible Asset per share $0.09 $1.98 ($0.01) ($0.01) ($0.15) ($0.04) $1.78 ($0.08) As at Operating profit before Income tax expense Movement in cash Net reduction in fair Share of loss in Dividends As at 31 Mar 23 tax flow hedges, net of tax value of investment associates paid
Slide 37: Thank you
Stride Property Group Level 12, 34 Shortland Street Thank you Auckland 1010, New Zealand PO Box 6320 Victoria Street West Auckland 1142, New Zealand P +64 9 912 2690 W strideproperty.co.nz Important Notice: The information in this presentation is an overview and does not contain all information nece