Ram Essential Services Property Fund · ASX:REP
Ram Essential Services Property Fund — UBS Australasia Conference 2023
28 slides from Ram Essential Services Property Fund's conference presentation, Nov 13, 2023
Slide 1: ASX Announcement: Investor Presentation
RAM ESSENTIAL SERVICES PROPERTY FUND (ASX CODE: REP) ASX ANNOUNCEMENT 13 November 2023 INVESTOR PRESENTATION RAM Essential Services Property Fund (ASX: REP) provides the attached material which will be delivered in a presentation at the UBS Australasia Conference later today. This announcement is au
Slide 2: RAM Essential Services Property Fund - UBS Australasia Conference
For personal use only RAM ESSENTIAL SERVICES PROPERTY FUND UBS Australasia Conference November 2023 REAL ASSET MANAGEMENT I PAGE 0
Slide 3: Agenda
AGENDA For personal use only 1. Macro Considerations 2. Fund Overview 3. Portfolio Performance 4. Financial Performance 5. Outlook & Summary REAL ASSET MANAGEMENT I PAGE 1
Slide 4: 1. Macro Considerations
MAYO PRIVATE HOSPITAL For personal use only 1. MACRO CONSIDERATIONS REAL ASSET MANAGEMENT I PAGE 2
Slide 5: Australian Growth and Consumer Spending
AUSTRALIAN GROWTH AND CONSUMER SPENDING Australian Growth is still positive at 0.4% during the June Quarter 2023, and 2.1% for the year to June Retail spending slowing in Discretionary sectors, but Essential consumption holding up RAM Investment strategies generally focus on the essential sectors to
Slide 6: Cash Rate Forecast and REIT Trends
CASH RATE FORECAST AND REIT TRENDS History suggests that REIT movements are priced in 6-9 months prior to rate drops BLOOMBERG CASH RATE FORECAST CONSENSUS 5.00% 80000 For personal use only 4.50% 70000 4.00% 60000 3.50% 50000 3.00% 2.50% 40000 2.00% 30000 1.50% 20000 1.00% 10000 0.50% 0.00% 0 Aug-16
Slide 7: Capitalising on Cash Rate Decline: A-REIT Market Opportunities
CAPITALISING ON CASH RATE DECLINE: A-REIT MARKET OPPORTUNITIES RAM is confident that tailwinds will impact the A-REIT markets as Cash Rates are forecasted to decline over the next two years A-REITs have consistently experienced an average increase of 26.42% during the past three easing cycles For pe
Slide 8: Population Trends
POPULATION TRENDS By 2032, Australia’s population is forecast to grow by 15% ▪ The additional 4.1m people estimated to boost retail spending capacity by $20.5 billion ▪ Retail space per capita will drop from 0.91sqm to 0.84sqm For personal use only Source: Colliers REAL ASSET MANAGEMENT I PAGE 6
Slide 9: Australian Real Estate: Capital Growth and Yield Trends
AUSTRALIAN REAL ESTATE: CAPITAL GROWTH AND YIELD TRENDS Capital Growth over last 12 months For personal use only Annual Change in Yields Source: MSCI REAL ASSET MANAGEMENT I PAGE 7
Slide 10: Transaction Volume Over Sectors
TRANSACTION VOLUME OVER SECTORS For personal use only Source: MSCI REAL ASSET MANAGEMENT I PAGE 8
Slide 11: Investor Activity
INVESTOR ACTIVITY Y-o-Y Change in Volumes & 5-Year Value Change For personal use only Activity Levels by Investor Type Source: MSCI REAL ASSET MANAGEMENT I PAGE 9
Slide 12: Hospitals Appear Healthy
HOSPITALS APPEAR HEALTHY Hospital volumes up three-fold year-on-year For personal use only Volumes around $700m to date, with another $500m confirmed in Q4 Actively driven by Healthco’s purchase of MPT Source: MSCI, RSA REAL ASSET MANAGEMENT I PAGE 10
Slide 13: 2. Fund Overview
MAYO PRIVATE HOSPITAL For personal use only 2. FUND OVERVIEW REAL ASSET MANAGEMENT I PAGE 11
Slide 14: REP Investment Case
REP INVESTMENT CASE Unique exposure to attractive sectors High quality, geographically diverse portfolio of Essential Retail and Healthcare assets For personal use only Defensive income profile through low vacancy and long WALE Organic growth through value add pipeline that continues to expand Uniqu
Slide 15: Highlights for FY2023 and Beyond
HIGHLIGHTS FOR FY2023 AND BEYOND The portfolio continues to perform strongly and compares favourably to other listed real estate exposure Portfolio Continued Strong Leasing Resilient Tenancy Mix Developments on Track Outcomes Occupancy stable at 98%1 due to Selective accretive projects For personal
Slide 16: Prudent and Proactive Stewards of Capital
PRUDENT AND PROACTIVE STEWARDS OF CAPITAL Active portfolio and capital management decisions to maintain consistency, stability and control. Positive leasing outcomes NOI growth helping to offset interest cost For personal use only Met FY2023 expectations Continued portfolio optimisation CONSISTENT P
Slide 17: Possible Short-Term Activity (Update)
POSSIBLE SHORT-TERM ACTIVITY (UPDATE) POTENTIAL ACTION IMPACT STATUS Portfolio funded from headroom which will produce immediate Execution of value-add schemes accretion to yield and significant enhancement to fund WALE Final stages with largest healthcare partner of Opportunity to utilise sustainab
Slide 18: Strengthening Investment Case
STRENGTHENING INVESTMENT CASE Unique investment opportunity with exposure to attractive sectors For personal use only SCARCE DEFENSIVE ASSETS SUSTAINABLE GROWTH STABLE VALUATIONS 50% Healthcare Quality tenants Stable tenants 50% Non-discretionary Retail High occupancy Strong rental growth Inflation
Slide 19: 3. Portfolio Performance
COOMERA SQUARE For personal use only 3. PORTFOLIO PERFORMANCE REAL ASSET MANAGEMENT I PAGE 17
Slide 20: Strong Portfolio Performance
STRONG PORTFOLIO PERFORMANCE Diversified portfolio generating secure and stable income Tenant Mix Income Exposure Key Portfolio Metrics 3% 30 June 23 3% 7% 13% 32% Number of Properties 35 94% 87% For personal use only 46% Exposed Total Property Value $786.5m Essential to annual 48% Services1 escalat
Slide 21: Portfolio Resilience Shining Through
PORTFOLIO RESILIENCE SHINING THROUGH Strong leasing outcomes driving underlying income growth For personal use only 98% +4.5% +7.1% Occupancy FY23 NOI Growth1 Supermarket MAT Growth +5% Average Leasing Spreads in FY23 Embedded growth from inflation exposed income: >80% of CPI-linked leases are uncap
Slide 22: Defensive Sector Valuations Holding Up
DEFENSIVE SECTOR VALUATIONS HOLDING UP Conservative valuations comfortable relative to peers Conservative Valuation Policy Consistently conservative valuation policy 9.1 17.2 81% externally valued in FY23 12.6 For personal use only Cap rates relatively conservative compared to peers 807.1 786.4 Comp
Slide 23: 4. Financial Performance
MIAMI PRIVATE HOSPITAL For personal use only 4. FINANCIAL PERFORMANCE REAL ASSET MANAGEMENT I PAGE 21
Slide 24: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Strengthened balance sheet and improved visibility Gearing of 35%1 within manageable range and Debt2 comfortably within facility covenant $38m 3.0 yrs Headroom Debt Maturity Added syndication lender and increased debt For personal use only headroom Hedging mainta
Slide 25: 5. Outlook & Summary
GOLD COAST SURGERY CENTRE For personal use only 5. OUTLOOK & SUMMARY REAL ASSET MANAGEMENT I PAGE 23
Slide 26: FY2024 Guidance
FY2024 GUIDANCE 5.6c - 5.7c 1 Distribution Per Security For personal use only 8% 2 Forecast Distribution Yield >90% Distribution tax deferred 90% – 100% Target FFO Payout Ratio 1. Gui dance assumes a verage 3-month BBSW of 4.25%, target gearing ra nge of 25% - 40% a nd assumes no unexpected delays i
Slide 27: Executing Strategy and Delivering Growth
EXECUTING STRATEGY AND DELIVERING GROWTH Unique exposure to attractive sectors Strong leasing outcomes with +5% average spread on renewals Actively managed Sector leading like-for-like NOI growth of 4.5% mitigating higher interest costs For personal use only Stable and secure rental income with 94%
Slide 28: 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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