Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — H1 FY2017 Earnings Presentation
42 slides from Stor-age Property Reit's earnings presentation, November 2016
Slide 1: Interim Results Presentation
STOR-AGE PROPERTY REIT INTERIM RESULTS PRESENTATION SIX MONTHS ENDED 30 SEPTEMBER 2016 2017
Slide 2: Presentation Outline
PRESENTATION OUTLINE • At a glance • Highlights • Financial review • Strategy • Property review • Operations review • Sales, marketing & the brand • Outlook • Appendices › Income statement and earnings reconciliation › Schedule of properties › Pipeline of properties STOR-AGE PROPERTY REIT LIMITED 2
Slide 3: Our people, both customers & staff, are at the heart of our business
Our people, both customers & staff, are at the heart of our business … STOR-AGE PROPERTY REIT LIMITED 3
Slide 4: At a Glance
AT A GLANCE Investment case • Leading & largest self storage property fund in South Africa • Niche asset class uncorrelated to traditional drivers of property – recession-resilient sector • Business model based on global self storage REIT outperformers • Attractive forecast distribution growth in me
Slide 5: Highlights
HIGHLIGHTS Performance • Distributable earnings R55.8 million • Dividend per share 43.04 cents – 6% higher than listing forecast • Conservative gearing of 9% – of which 79% fixed • 100% + fixed from 8 November 2017 Strong trading results • Increase in occupancy of 6 900 m² y-o-y & c. 1 200 m² since
Slide 6: Portfolio and Performance – Snapshot
PORTFOLIO AND PERFORMANCE – SNAPSHOT Listed portfolio Managed portfolio Trading portfolio Number of properties 24 10 34 Portfolio value (Rm) 1 394 595 1 989 GLA (m²) 182 900 75 100 258 000 Number of tenants 12 000 + 2 500 + 14 500 + Listed portfolio Occupancy 86% Rental rate per m² R79.9 (10% increa
Slide 7: Portfolio and Performance – Snapshot (Continued)
PORTFOLIO AND PERFORMANCE – SNAPSHOT (CONTINUED) ↑ ↑ ↑ c. 7 000 m² 10% 6.1% vs. y-o-y y-o-y forecast 79,9 90% 80 45 86% 43.04 85% 75 43 83% 72.6 80% 70 41 40.55 75% 65 39 70% 60 37 Occupancy y-o-y Rental rate per m² y-o-y Distribution per share (cents) vs. forecast Prospectus Actual STOR-AGE PROPERT
Slide 8: Financial Review
FINANCIAL REVIEW STOR-AGE PROPERTY REIT LIMITED 8
Slide 9: Earnings and Distribution
EARNINGS AND DISTRIBUTION 6 months 4.5 months 30 Sep 31 Mar 2016 2016 Earnings and distribution Rm Rm Rental income 73.2 53.3 Rental underpin 2.4 1.6 • Growth in occupancy c. 6 900 m² y-o-y – closing occupancy 86% Other income 2.9 2.0 compared to 82.7% at listing date Total portfolio income 78.5 56.
Slide 10: Balance Sheet - Summarised
BALANCE SHEET - SUMMARISED 30 Sep 31 Mar 30 Sep 31 Mar 2016 2016 2016 2016 Rm Rm Rm Rm ASSETS LIABILITIES Non-current assets Non-current liabilities Investment properties 1 394 1 371 Bank debt 133 129 Share purchase scheme loans 123 120 Finance lease 3 3 Intangible assets and goodwill 82 82 Non-curr
Slide 11: Capital Structure
CAPITAL STRUCTURE • Conservative target gearing range 25% - 35% • 9% gearing at YE vs 50% LTV facility • Effective interest rate 9.39% • R508 million of undrawn facilities at September 2016 • R142 million drawn at September 2016, with net debt at R127 million • Option for Storage RSA transaction to
Slide 12: Strategy
STRATEGY STOR-AGE PROPERTY REIT LIMITED 12
Slide 13: 2020 Strategic Growth Plan
2020 STRATEGIC GROWTH PLAN • Strategic planning conducted in five year cycles • Currently in Y1 to 2020 • Plan is centred on both developing new properties & acquiring existing self storage facilities • Plan details target cities, suburbs & the ideal placement on key arterials • Plan assumes no furt
Slide 14: Strategic Planning & Demographics
STRATEGIC PLANNING & DEMOGRAPHICS HOUSEHOLD INCOME HIGH LOW POPULATION DENSITY HIGH LOW STOR-AGE PROPERTY REIT LIMITED 14
Slide 15: Property Strategy
PROPERTY STRATEGY Stor-Age intends enhancing performance & returns by: • Extracting organic growth through active revenue management, improving the unit mix &/or developing additional GLA at existing properties • Leveraging the management platform to extract value & drive cost efficiencies • Pursuin
Slide 16: Understanding our customers' needs drives everything that we do
Understanding our customers’ needs drives everything that we do … STOR-AGE PROPERTY REIT LIMITED 16
Slide 17: Property Review
PROPERTY REVIEW STOR-AGE PROPERTY REIT LIMITED 17
Slide 18: Portfolio
PORTFOLIO 41 Our portfolio comprises 41 properties (24 in the Listing Portfolio, 10 in the Managed Portfolio and 7 in the pipeline) 34 R1.989bn • TRADING PORTFOLIO: properties 34 properties 11 Pretoria R1.989bn 5 7 Johannesburg 14 500 + 258 000 m² 258 000 m² tenants 14 500 + tenants • LISTED PORTFOL
Slide 19: Portfolio Overview
PORTFOLIO OVERVIEW PROPERTIES Total number of properties 41 ‘Trading Portfolio’ consists of: ‘Listed Portfolio’ (‘Mature’ assets) 24 ‘Managed Portfolio’ 10 Secured – under construction / to be developed 7 LISTED PORTFOLIO Gross asset value R1.4 billion GLA 183 000 m² 2017 forecast distribution growt
Slide 20: Listed Portfolio
LISTED PORTFOLIO • Total properties 24 • Total property value R1.4 billion • Total GLA 183 000 m² • Developable GLA (town planning in place) 20 000 m² + • Average property size (GLA) 7 700 m² + • Total number of tenants 12 000 + • Average rental rate R79.9/m² • Portfolio occupancy 86% • Long-term ta
Slide 21: Listed Portfolio – Storage RSA Acquisition (Continued)
LISTED PORTFOLIO – STORAGE RSA ACQUISITION (CONTINUED) • Acquisition of sizeable self storage operator close to finalisation • Rare opportunity to acquire high quality self storage properties in prime locations • Acquisition consists of two separate transactions – terms substantially agreed (subject
Slide 22: Listed Portfolio – Storage RSA Acquisition (Continued)
LISTED PORTFOLIO – STORAGE RSA ACQUISITION (CONTINUED) • Salient features of ‘RSA Investments’ transaction: › 5 properties representing c. 39 500m² of GLA › 1 development opportunity in Bryanston - town planning in place › Transaction value c. R297m • Salient features of ‘Somerset West CC’ transacti
Slide 23: Listed Portfolio – Development Activity
LISTED PORTFOLIO – DEVELOPMENT ACTIVITY • Gardens & Durbanville currently undergoing expansion • Both projects funded from existing debt facilities • Forecasted to be yield neutral within first 12 months of trading & yield enhancing thereafter • Forecasted to provide immediate uplift to portfolio NA
Slide 24: Pipeline
PIPELINE • Measured approach to new developments • 17 properties = c. 124 300 m² GLA: › 10 currently trading (‘Managed Portfolio’) › Managed Portfolio dominated by high profile ‘Big Box’ Target criteria for properties in outstanding locations new developments › 1 site has town planning consent, 3 cu
Slide 25: Operations Review
OPERATIONS REVIEW STOR-AGE PROPERTY REIT LIMITED 25
Slide 26: Operations Platform
OPERATIONS PLATFORM • Highly sophisticated & scalable • Drives economies of scale & cost efficiencies • Clearly defined operating standards • Our people – key strategic focus from inception • Significant emphasis on recruiting, training, developing & managing our staff • Staff incentivised at proper
Slide 27: Highly Sophisticated Operations Platform
HIGHLY SOPHISTICATED OPERATIONS PLATFORM Outstanding Operating Web, mobile platforms locations standards & social media Contact Innovative Centre marketing Recruitment, High quality purpose Revenue training & L&D built properties management STOR-AGE PROPERTY REIT LIMITED 27
Slide 28: Revenue Management
REVENUE MANAGEMENT • Aim to achieve optimal balance between occupancy & rate • Goal = right price, for the right customer, at the right time • Dynamic pricing model • Pricing per m² based on supply & demand – location specific, stage of lease-up & timing • Powerful operating software allows for real
Slide 29: Integrated Revenue Management Strategy
INTEGRATED REVENUE MANAGEMENT STRATEGY TESTING Occupancy OPTIMISATION Pricing Promotion Market leading sector IP ANALYSES STOR-AGE PROPERTY REIT LIMITED 29
Slide 30: Our Customers
OUR CUSTOMERS GEOGRAPHIC RESPRESENTATION RESIDENTIAL / COMMERCIAL TENANT MIX BY GLA 3 4 6 23 Gauteng Residential Western Cape Commercial 27 60 Eastern Cape KwaZulu Natal 77 Free State GEOGRAPHIC FOCUS RESIDENTIAL vs COMMERCIAL Primary focus = high profile locations in Residential tenants outnumber J
Slide 31: Our Customers (Continued)
OUR CUSTOMERS (CONTINUED) AVERAGE LENGTH OF STAY REASON FOR STORING < 6 months Business needs 16 12 17 6 - 12 months Excess stuff 30 4 > 12 months Lifestyle choice 13 2 - 3 years 19 Marriage / divorce > 3 years Moving 18 42 4 23 2 Renovating Other DEMAND PROFILE SELF STORAGE Demand is driven by two
Slide 32: Sales, Marketing & the Brand
SALES, MARKETING & THE BRAND • Focus on location, visibility & quality of properties, coupled with excellent customer service & leading online platform • Positioned at quality end of market – well defined, distinctive & differentiated • Foundations of brand strategy › Big branding at properties in o
Slide 33: Digital Marketing & E-Commerce
DIGITAL MARKETING & E-COMMERCE • Embracing digital age in its entirety – enables cohesive brand experience • SEO results maintain most popular & searched terms • Continuously investing in the web / digital platform • Social media used strategically • New responsive website launching in January 2017
Slide 34: Optimising Demand
OPTIMISING DEMAND Optimised consumer cycle Internet Properties Life happens Contact Centre Desktop Tablet Laptop Phone Demand cycle STOR-AGE PROPERTY REIT LIMITED 34
Slide 35: Outlook
OUTLOOK • Focus on short & medium term strategic objectives › Driving occupancy, revenue & cash flow = earnings & dividends growth › Executing 2020 Growth Plan • Complete acquisition & integration of Storage RSA portfolio • Solid self storage sector fundamentals albeit in a challenging economic envi
Slide 36: Appendices
APPENDICES • Income statement and earnings reconciliation • Schedule of properties • Pipeline of properties STOR-AGE PROPERTY REIT LIMITED 36
Slide 37: Income Statement and Earnings Reconciliation
INCOME STATEMENT AND EARNINGS RECONCILIATION 30 Sep 31 Mar* 30 Sep 31 Mar* 2016 2016 2016 2016 Income statement R’000 R’000 R’000 R’000 Property revenue 78 526 56 900 Profit for the period 53 708 56 507 Rental income 75 573 54 907 Basic earnings 53 708 56 507 Other income 2 953 1 993 Headline earnin
Slide 38: Schedule of Properties – Listed Portfolio
SCHEDULE OF PROPERTIES – LISTED PORTFOLIO GLA Valuation Store name Address Province m² R’000 STOR-AGE GARDENS 121 Roeland Street, Gardens, Cape Town Western Cape 8 867 165 644 STOR-AGE TABLE VIEW 121 Koeberg Road, Corner of Koeberg and Blaauwberg Road, Table View, Cape Town Western Cape 10 087 111 1
Slide 39: Schedule of Properties – Managed Portfolio
SCHEDULE OF PROPERTIES – MANAGED PORTFOLIO GLA GLA (full capacity) Store name Address Province m² m² STOR-AGE CLAREMONT Cnr of Main Road & Brooke Street, Claremont, Cape Town Western Cape 7 944 7 944 STOR-AGE SOMERSET WEST Cnr Forsyth Road & De Beers Avenue, Somerset West, Cape town Western Cape 5 5
Slide 40: Pipeline of Properties
PIPELINE OF PROPERTIES STOR-AGE PROPERTY REIT LIMITED 40
Slide 41: Pipeline
PIPELINE Total committed pipeline subject to town planning consent c. 49 000 m² Anticipated GLA Site Location City Status (m²) Prominent location alongside N3 highway Under construction GILLOOLY'S JHB 8 300 in Civin Drive - scheduled to open in December 2016 Prominent location on Bram Fischer Avenue
Slide 42: Disclaimer & Confidentiality
DISCLAIMER & CONFIDENTIALITY This document is strictly confidential and is not for publication or circulation. All information contained herein is strictly confidential and proprietary and may not be copied, reproduced, communicated, transmitted or distributed, in whole or in part, to any person or
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