Custodian Property Income Reit Plc · LSE:CREI
Custodian Property Income Reit — Custodian REIT — Investor Presentation (January 2015)
34 slides from Custodian Property Income Reit's investor presentation, January 2015
Slide 1: Custodian REIT Update January 2015
Custodian REIT Update January 2015 1
Slide 2: Section Page
Section Page Overview 3 Shareholders 8 Investment objectives and policy 11 Market opportunity 13 Portfolio review 18 Recent acquisitions and pipeline 23 REIT details 28 Conclusion 31 2
Slide 3: Overview
Custodian REIT PLC ay Overview
Slide 4: Highlights
Highlights REIT • £164.43 1 million REIT listed on LSE Main Market • Target distribution yield of 6.25% 2 • 5.25p year one dividend, 6.25p year two • Fully covered from income, paid quarterly • 1st & 2nd quarter dividends distributed at 1.25p per share • Third quarter distribution 1.25p per share (p
Slide 5: Fund Manager
Fund Manager Custodian Capital Limited Richard Shepherd-Cross BSc MRICS Managing Director, Custodian Capital • 12 year track record of property syndication • Acquired 89 properties in last 13 years • Authorised and regulated by the FCA • Full permission to operate as an Alternative Investment Fund M
Slide 6: Activity since IPO
Activity since IPO • £91.5m of new property acquisitions • 34 properties, 38 separate tenancies • 2 disposals amounting to £1,785,000 • Average net initial yield on acquisitions of 7.56% • All net cash from IPO and the £25 million placing in September has been invested • £31 million of debt has been
Slide 7: Funding
Funding • £20 million term debt facility drawn and invested – Lloyds Banking Group – interest only, 195 bps over 3 month libor, expiring October 2019 • Next purchases will be funded using the pre-arranged debt facility – £25 million revolving credit facility with Lloyds Banking Group • £14 million a
Slide 8: Shareholders
Custodian REIT PLC ay Shareholders
Slide 9: Shareholders
Shareholders • 2 institutional cornerstone investors – F&C Asset Management – Investec Wealth & Investment • A broad base of private investors and wealth management clients • A diverse shareholder register – 1,500 separate investors 9
Slide 10: Share price
Share price • 155.86 million shares issued • Average share price of 108.4 pence since IPO 116 Daily Open Price (pence) Entry to the FTSE All Share Index 114 2,949,237 traded NAV 112 110 108 106 Pence per share 104 Ex-dividend date 1st Ex-dividend date 2nd payment payment 102 100 98 96 94 92 90 26-Ma
Slide 11: Investment objectives and strategy
Investment objectives and strategy 11
Slide 12: Investment objectives, policy and strategy
Investment objectives, policy and strategy Objectives & Policy Strategy • Long term, secure income • Low obsolescence • Target distribution yield of 6.25% per • High residual values annum paid quarterly (5.25p year 1, • Strategic use of alternative 6.25p year 2)1 property classes • 100% cover from i
Slide 13: Market opportunity
Custodian REIT PLC ay Market opportunity 13
Slide 14: Look back at 2014
Look back at 2014 • 2014 will have been a bumper year for investment transactions forecast to top £50 billion for the first time since 2007 • Demand from all sectors of the market with a particular focus on larger lot sizes driven in part by huge inflows to open ended funds • Supply increased marked
Slide 15: Impact of 2014 on Custodian REIT
Impact of 2014 on Custodian REIT • Despite the price inflation across the market this was mainly focused on £10 million plus lots • Custodian REIT acquired 30 properties for £81.2 million reflecting a net initial yield of c.7.5% and an average price of £2.7 million per property • These acquisitions
Slide 16: 2015 Forecast
2015 Forecast • A return to steady growth in capital values • Income will make up a larger proportion of total return • Prime London to remain an important market but a greater focus on the regions • Rental growth in all sectors particularly industrial and office sectors where there is a supply side
Slide 17: Opportunity in 2015
Opportunity in 2015 • We expect that larger funds will continue to sell their smaller lots – Pipeline of institutional grade assets – We have already completed £10.3 million of transactions since 1st Jan 2015 • We expected that our experience and track record in small lot sizes would provide strong
Slide 18: Portfolio review
Custodian REIT PLC ay Portfolio review 18
Slide 19: Portfolio review
Portfolio review Diverse UK commercial property investment portfolio • Current portfolio circa £189 million • 80 assets • Nationwide portfolio • All major property sectors • 126 separate tenancies • Average unexpired lease term 7.62 years to first break • Void rate less than 1% • 7.4% gross rental y
Slide 20: Diverse portfolio with long leases
Diverse portfolio with long leases Sector split by income Regional split by income North-West Other South-East 15% 20% 21% Retail North-East Industrial Warehouse 11% 43% East Anglia 7% 7% Scotland 5% Retail Wales West Midlands East Midlands South-West 16% 17% 15% 1% 9% Office 13% 1,800,000 Lease exp
Slide 21: Secure income
Secure income Security of tenant income 10.18% by ICC credit rating 7.37% 65.06% 5.02% 12.38% 61-100 (confidence, low risk potential) 51-60 (normal, limited risk potential, normal terms) 36-50 (caution, moderate risk potential, measured exposure) 1-35 (caution, high risk potential) n/a (private comp
Slide 22: Diverse income
| Custodian Diverse income REIT PLC = Enact Properties Ltd - 4.47% + Restore? Ltd - 2.88% +» Portola Packaging Ltd - 2.53% = Revion International Corporation - 2.29% » Co-Operative Group Food Ltd - 1.91% = Magnet Ltd - 1.76% » Marshall Motor Group Ltd - 1.6% » URBN UK Ltd - 1.56% » Elma Electronics
Slide 23: Recent acquisitions and pipeline
Recent acquisitions and pipeline 23
Slide 24: Acquisitions
Acquisitions Acquisitions YTD FY15 90 9 81 80 8 Cash deployment Annual rent roll (Net yield) 70 7 60 7.47% 60 6 48 48 50 5 44 7.51% £M £M 40 4 31 7.42% 7.42% 30 7.39% 3 7.48% 20 15 2 10 8.10% 1 4 8.13% - - May Jun Jul Aug Sep Oct Nov Dec 24
Slide 25: Recent acquisitions
Recent acquisitions Location: Redditch Location: Leeds Tenant: Sapa Profiles UK Limited Tenant: Enact Properties Type: Industrial Limited Rent: £250,000 pa Type: Office Expiry: 30.04.2020 Rent: £339,000 pa Price : £3,000,000 Expiry: 25.12.2018 NIY : 7.88% Price : £3,800,000 NIY: 8.43% Location: Milt
Slide 26: Recent acquisitions
Recent acquisitions Location: Grantham Location: Torpoint, Cornwall Tenant: Laura Ashley Limited, Tenant: Sainsburys Carpetright Plc Supermarkets Limited Poundstretcher Limited Type: Retail Type: Retail Rent: £217,500pa Rent: £324,286pa Expiry: 14.12.22 Expiry: 30.05.21, 24.12.20, 11.4.20 Price : £3
Slide 27: Pipeline
Pipeline Sourcing transactions:- • We work with a network of over 100 investment agents • Nationwide coverage • The schedule below sets out the value and number of opportunities we have looked at, track, bid on and acquired: Total value Number of opportunities Property opportunities £1,840,787,000 4
Slide 28: REIT details
Custodian REIT PLC ay REIT details 28
Slide 29: Fund details
Fund details Manager • REIT management fee 0.9% per annum of NAV, reducing to 0.75% over £200m • Senior management holding of c.£4 million in the REIT Structure • Quarterly valuation by Lambert Smith Hampton • Quarterly Property Income Distributions (PIDs) Listing • LSE Main Market • Full REIT statu
Slide 30: Board of directors
Board of directors David Hunter • International property consultant specialising in property funds and companies • On the board of both listed and unlisted companies in UK and overseas Independent Chairman • Corporate advisory roles in the UK and France • Over 25 years’ experience as a high performi
Slide 31: Conclusion
Custodian REIT PLC ay Conclusion 31
Slide 32: Conclusion
Conclusion • LSE Main Market REIT – current market cap £164.43m • Offering an alternative to existing closed and open ended fund • High income return • Income is likely to be the principal driver of total return in 2015 • Forecast dividend of 5.75 pence in next 12 months and 6.25 pence thereafter •
Slide 33: Contact details
Custodian Capital Limited Richard Shepherd-Cross 1 Penman Way, Grove Park, Tel: 0116 240 8741 | Mob: 07801 225 992 Enderby, Leicester LE19 1SY rsc@custodiancapital.com 3rd Floor, 22 Park Street, Mayfair Ben Aspell London W1K 2JB Tel: 0116 240 8743 | Mob: 07983 433 507 ben.aspell@custodiancapital.com
Slide 34: Important
Important This document (“Document”), which relates to Custodian Reit Plc (“Custodian REIT”), has been issued and approved by Custodian Capital Limited (the "Company") a company authorised under the Financial Services and Markets Act 2000 and regulated by the Financial Conduct Authority in England a
Custodian REIT — Investor Presentation (January 2015) on 6ix