Londonmetric Property Plc · LSE:LMP
Londonmetric Property — H1 2022 Earnings Presentation
32 slides from Londonmetric Property's earnings presentation, Nov 18, 2021
Slide 1: Half Year Results
HALF YEAR RESULTS Half Year Ended 30 September 2021 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Key Highlights
Key Highlights Sector calls, asset selection and income focus continue to deliver portfolio outperformance • Macro trends remain supportive Portfolio – Tailwinds favouring our logistics & long income strategies £3.0 billion – Favourable demand/supply delivering continued income growth March 2021: £2
Slide 4: Financial Highlights
Financial Highlights Half Year to 30 September 2021 H1 2022 dividend progression September September Change 2021 2020 +4.8% To 4.4p, 111% covered EPRA Earnings £44.2m £42.3m +4.5% Valuation gain (H1) EPRA Earnings (pps) 4.87p 4.75p +2.5% +£207m 18 bps yield compression Dividend (pps) 4.4p 4.2p +4.8%
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 30 September 30 September Change Rent collection 2021 2020 99.5% Net rental income £63.5m £61.3m 0.5% waived/outstanding Administrative costs £(8.2)m £(8.0)m EPRA cost ratio3 Net Finance costs £(12.0)m £(11.3)m 13.2% -50 bps EPRA Earnings £44.2m £42.3m +4.5% Income leakage EPRA Ear
Slide 7: Balance Sheet
Balance Sheet1 30 September 31 March Change 2021 2021 Property portfolio2 £2,970.7m £2,588.7m Cash £76.4m £54.6m Debt £(1,069.7)m £(877.0)m Fair value of derivatives £(0.3)m £(0.6)m Other net liabilities £(29.5)m £(34.4)m IFRS Net Assets £1,947.6m £1,731.3m EPRA Adjustments £0.3m £0.6m EPRA Net Tang
Slide 8: Financing
Financing Debt Metrics1 30 September 31 March PPE 2021 2021 activity Total facilities £1,147m £1,045m New facility Gross Debt £1,070m £877m £150m Loan to Value2 31.1% 32.3% Average maturity3 7.2 years 4.2 years Pro-forma LTV4 Hedging3 70% 45% 35.0% Average cost of finance3 2.5% 2.5% Marginal cost of
Slide 9: Historic Debt Metrics
Historic Debt Metrics Warrington Bedford Loan to Value Ratio Cost of Debt Debt Maturity Interest Cover Ratio (%) (%) (years) (x) 40 5 10.0 6.0 36 5.5 35 32 5.1 32 4 5.0 31 3.5 8.0 5.0 4.7 30 3.1 7.2 30 4.5 3 2.8 2.9 6.4 4.3 2.5 2.5 6.0 4.0 2 5.2 4.8 4.7 20 4.2 4.0 3.0 1 10 0 2.0 2.0 2017 2018 2019 2
Slide 10: Contracted Income Progression
Contracted Income Progression 150.0 14% growth in contracted income 11.0 140.0 5.7 130.0 6.0 4.3 (£m) 148.9 120.0 130.5 110.0 100.0 Sept 21 Disposal of PPE Development Deals Pro Contracted Thrapston Net investment lettings3 under forma rent warehouse1 activity2 offer4 1. Disposal of our Primark logi
Slide 11: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 12: Our Portfolio
Our Portfolio Aligned to structurally supported sectors Value1 NIY2 EY2 WAULT2 CVg3 TPR3 (£m) (%) (%) (Years) (%) (%) Urban, 30 September 2021 42.0% Urban 1,244 3.9 4.6 9.0 11.1 +13.4% 9.3 +11.4% Regional 570 3.9 4.5 12.8 Distribution Grocery- 74% led long income, Mega 374 3.6 3.9 14.7 6.2 +8.3% Reg
Slide 13: Distribution
Distribution Aligned to a structurally supported sector enjoying highly favourable demand/supply dynamics Urban Regional Mega Value £2,188m Up from £1,829m WAULT 10.9 years Up from 10.6 years Occupancy 99% • £52m rent (£7.40 psf) • £22m rent (£6.50 psf) • £14m rent (£5.70 psf) Mega & regional: 100%
Slide 14: Long Income
Long Income Operationally light assets let to high quality occupiers that are increasingly attractive in a yield starved environment Grocery NNN Retail Trade & DIY Value2 £685m Up from £635m WAULT 14 years Up from 11 years Occupancy 100% • £15m rent (£18.90 psf) • £12m rent (£20.70 psf) • £6m rent (
Slide 15: Investment activity
Investment activity Adding quality long let assets aligned to structurally supported sectors and strong geographies Acquisitions - £305m (YTD)1 Disposals - £168m (YTD) WAULT NIY London & SE WAULT NIY Midlands & North 18 years 4.3% 45% 10 years 5.0% 99% Long let Rising to 4.9% Strong locations Shorte
Slide 16: Portfolio Activity
Portfolio Activity 76 deals generating £3.9m pa additional income & delivering +3.0% LFL income growth Occupier contentment Rent reviews (YTD) 1 38 lettings & regears (6m) 30% • +£3.0m rent pa Market Contractual • WAULT of 12 years 25% 25% PPE: +£2.9m rent, 25 years 20% 19% 16% 15% 13% Rental revers
Slide 17: Development Activity
Development Activity Adding short cycle and de-risked development activity at attractive pricing and generating additional near term income growth Direct Developments Development commitments Urban redevelopment • Cost: £50m • Cost: £39m • Cost: £40m • Pre-let: 100%, 23 years • Pre-let: 100%, 20 year
Slide 18: Environmental Focus
Environmental Focus Low carbon approach with occupier considerations influencing our approach • Strategy supports a low carbon approach Absolute Energy Consumption1 – Operationally light portfolio, assets with low carbon intensity -88% Since 2015 – Asset management activity supporting carbon reducti
Slide 19: Urban Redevelopment
Urban Redevelopment Streatham - 19,000 sq ft Environmental credentials1 EPC B From EPC D-E at purchase CapEx Investment2 £38 psf Including new solar enabled roof New rental level £27.50 psf PoC 22% Before After Bicester - 30,000 sq ft Environmental credentials EPC A From EPC C at purchase CapEx Inve
Slide 20: Market Outlook
Market Outlook Structurally supported real estate with strong and growing income characteristics will continue to deliver • Macro environment highly supportive of the right real estate – Covid has accelerated changes to how we work, shop & socialise – Many legacy habits have been disrupted – ‘Just i
Slide 21: Appendices
LONDONMETRIC lay PROPERTY PLC Appendices
Slide 22: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Rent Average Area (Share) Surplus/(Deficit) CVg2,4 Occupancy NIY1 (years) Rent Uplifts Rent As at 30 September 2021 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.5 373.6 21.6 6.1 6.2 100.0 3.6 14.7 1
Slide 23: Income Breakdown
Income Breakdown Delivering long term reliable, repetitive & growing income Top occupiers1 Contractual Uplifts 59.8% 4.6% Primark 8.2% Fixed 3.4% Uplift, Amazon 3.4% Market 17%, 3.3% Review, DFS Sep 2021 40%, 3.5% RPI 3.3% Mar 2021 Linked, Argos 3.4% CPI 29%, 3.2% Linked, Eddie Stobart 14%, 3.3% 3.2
Slide 24: Net Zero Carbon Ambition
Net Zero Carbon Ambition #1 Operations to be #2 Developments to be #3 Buildings to be net zero by 2023 net zero by 2030 net zero by 2035 Assets where we have control & Reduce emissions from Help occupiers to lease NZC ready management will be NZC by 2023 development & offset residual buildings, offs
Slide 25: Delivering Long Term Shareholder Returns
Delivering Long Term Shareholder Returns Consistently delivering attractive compound led returns Net Rental Income Dividend Total Property Return Total Shareholder Return (£m) (pps) (rebased to 100)2 (rebased to 100)1,2 140 10.0 260 400 Dividend Share price 9.0 240 120 350 8.0 220 100 7.0 300 200 80
Slide 26: Distribution Assets
Distribution Assets Largest assets1 Occupier Annualised (by value) rent (£m) Islip 1 Primark (T2) 5.9 Dagenham 2 Eddie Stobart 4.1 Bedford 3 Argos 4.1 Croydon 4 Tesco 1.9 North East 5 & Yorkshire Warrington 5 Amazon 2.1 7 5% North West Reading 6 DHL 2.3 6% Ollerton 7 Clipper 2.0 Waltham Cross 8 Reyn
Slide 27: Total Property Returns – LondonMetric
Total Property Returns – LondonMetric 190 Urban (+84%) 180 170 Regional (+70%) 160 Mega (+57%) 150 LMP All Property (+48%) 140 130 120 MSCI All Prop (+14%)2 110 100 H1 FY19 H2 FY19 H1 FY20 H2 FY20 H1 FY21 H2 FY21 H1 FY22 1. Source: MSCI to 30 September 2021 27 2. Comparison MSCI benchmark
Slide 28: Acquisitions – H1 2022
Acquisitions – H1 2022 Sector Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B Worthing Distribution 19.0 4.8 5.2 15.0 15.0 Cardiff Distribution 11.1 5.0 5.8 9.9 9.9 Waltham Cross Distribution 43.8 3.5 4.0 23.0 23.0 Uckfield Distribution 10.3 3.7 4.2 15.2 15.2 Exeter Distribution 6.1
Slide 29: Disposals – H1 2022
Disposals – H1 2022 Value WAULT Sector Yield (LM share) (years) £m % Expiry 1B Thrapston Distribution 102.0 4.1 11.2 11.2 North Shields Long Income 6.0 7.6 4.8 4.8 Derby Long Income 6.2 5.7 15.0 15.0 Inverness Long Income 1.0 11.3 0.4 0.4 Liverpool Long Income 10.2 4.7 12.5 12.5 Wickes and Dunelm (x
Slide 30: Post Period End Investment activity
Post Period End Investment activity Acquisitions Sector Value (LM share) Yield WAULT (years) £m NIY Reversion1 Expiry 1B 700,000 sq ft logistics asset Distribution 97.0 4.0 4.6 23.2 23.2 Ipswich Distribution 38.6 4.5 5.1 20.0 20.0 Thanet Long Income 3.8 6.7 6.7 9.2 9.2 Tonbridge Long Income 5.0 4.8
Slide 31: Developments Summary
Developments Summary Incurred to date Sq PC1 BREEAM Rent/ YOC Total Prior H1 H2 FY Comment ft uplift (%) cost Years 22 22 23 000 £m £m Tyseley (Phase 2) 120 Q3 21 Excellent 1.6 6.0 27 15 12 - - Urban Logistics let to Amazon Completed 120 1.6 6.0 27 15 12 - - in period Pre Let to specialist European
Slide 32: Debt Facilities
Debt Facilities Lender Facility Maturity1 Expiry (£m) (years) Wholly-owned portfolio Unsecured RCF Syndicate 225.0 2.6 2024 (with 2x1 year options) Unsecured RCF Wells Fargo 175.0 4.6 2026 (with 2x1 year options) Private Placement 2021 Syndicate 380.0 10.7 2028-36 Private Placement 2018 Syndicate 15
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