Arena Reit · ASX:ARF
Arena Reit — Investor Presentation (July 2024)
35 slides from Arena Reit's investor presentation, Jul 23, 2024
Slide 1: Acquisitions & Equity Raising
Arena REIT ACQUISITIONS & EQUITY RAISING NOT FOR RELEASE TO US WIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES 23 July 2024 Better Communities. Together. r Title
Slide 2: Important Notice & Disclaimer
Important Notice & Disclaimer This investor presentation (“Presentation”) has been prepared by Arena (“Arena”) comprising Arena REIT Limited (ACN 602 365 186, Arena REIT Management Limited (ACN 600 069 761 AFSL No. 465754) as responsible entity of Arena REIT No. 1 (ARSN 106 891 641) and Arena REIT N
Slide 3: Important Notice & Disclaimer
Important Notice & Disclaimer In preparing this Presentation, Arena has relied upon information provided to it by third parties. No member of Arena or any of its related bodies corporate and their respective directors, employees, officers and advisers offer any warranties that the information relied
Slide 4: Important Notice & Disclaimer
Important Notice & Disclaimer Recipients of this Presentation should also be aware that certain financial information included in this presentation are (i) “non-IFRS financial information” under ASIC Regulatory Guide 230: “Disclosing non-IFRS financial information” and (ii) “non-GAAP financial measu
Slide 5: Important Notice & Disclaimer
Important Notice & Disclaimer Past performance Investors should note that past performance, including past security price performance, of Arena cannot be relied upon as an indicator of (and provides no guidance as to) future Arena performance including future security price performance and is given
Slide 6: Contents
Contents 07 Overview & Strategic Rationale 09 ELC Operating and Development acquisitions 11 Portfolio Overview 12 ELC Operating Environment & Portfolio Update 15 Equity Raising Overview 17 FY2024 Results & Capital Management 19 Indicative Timetable Arena REIT acknowledges the traditional custodians
Slide 7: Overview
Overview Equity raising to fund recent acquisitions and increased capacity for future growth • Arena has exchanged contracts, entered heads of agreement or is in exclusive due diligence1 to acquire and develop additional social infrastructure properties with a total investment of $92 million (the “A
Slide 8: Strategic Rationale
Strategic Rationale Acquisitions consistent with disciplined strategy and accretive to earnings & NAV ✓ Well • Strategic importance to the operations of the tenant located • Strong social and macroeconomic drivers continue to support the early learning sector assets • Enhanced portfolio geographic d
Slide 9: ELC Operating acquisitions
ELC Operating acquisitions Acquired six operating ELC properties • All of the acquired operating ELC properties: o Acquired as a portfolio; o Operated under one brand owned by existing tenant partner Affinity Education Group; and o Located in NSW. 30 June 2024 portfolio 30 June 2024 Pro Forma Metric
Slide 10: ELC Development acquisitions
ELC Development acquisitions Portfolio of four new ELC development projects1 • Working with our tenants as property partners. • High-quality, purpose-built portfolio of properties all to be operated by existing tenant partner Aspire Early Learning. • Including the development project acquisitions, d
Slide 11: Portfolio Overview
Portfolio Overview Pro forma as at 30 June 2024 including acquisition of operating properties Sector diversity (by value) Geographical diversity (by value) Tenant diversity (by income) 15% 23% 8% 27% 2% 2% 33% 5% 19% 6% 17% 6% 92% 10% 11% 3% 8% 13% Goodstart Green Leaves Affinity Edge ELC Heathcare
Slide 12: ELC Operating Environment
ELC Operating Environment Strong social and macroeconomic drivers continue to support early learning sector • Rising female workforce participation continues to drive demand for early childcare education Australian Parent Workforce Participation Rate1 100% and care and long day care participation ra
Slide 13: ELC Portfolio
ELC Portfolio 15% Arena ELC portfolio – net rent to gross operator revenue1 14% Asset quality supporting portfolio strength 13% 12% 11% 10% • 99.7% portfolio occupancy as at 30 June 2024. 9% • Arena’s ELC portfolio operating data1 to 31 March 2024: 8% 7% o Average daily fee of $141.38: 6% 5% ▪ +0.62
Slide 14: Sustainability
Sustainability Investment proposition and approach drives sustainable and commercial outcomes • Sustainability has been embedded across Arena’s business strategies which best positions us to achieve positive long term commercial and community outcomes. • Sustainability outcomes delivered during FY20
Slide 15: Equity Raising Overview
Equity Raising Overview $120 million fully underwritten Institutional Placement and non-underwritten SPP to raise up to $20 million1 • Fully underwritten Institutional Placement to raise $120 million Institutional • It is intended that eligible institutional securityholders who bid for up to their ‘
Slide 16: Equity Raising Overview (continued)
Equity Raising Overview (continued) Sources & uses of funds Strong balance sheet with substantial capacity Sources of funds1 $ million Institutional 30 June 2024 As at 30 June 2024 Placement1 Pro Forma Institutional placement 120.0 ($ million) ($ million) ($ million) Cash and other assets 44.7 44.7
Slide 17: FY2024 Results Snapshot
FY2024 Results Snapshot Delivering on stated investment objectives For the year ended 30 June 2024: • Net operating profit of $62.4 million (+4.7% on FY2023) • Distributable income (Earnings) per security (EPS) of 17.65 cents (+3.2% on FY2023) • Distribution per security (DPS) of 17.4 cents (+3.6% o
Slide 18: Capital Management
Capital Management Debt maturity extended and ongoing consistency in hedging program As at 30 June 2024 Pro Forma1 Change • $500 million debt facility comprised as follows as at 30 June 2024: – $100 million expiring 31 May 2027; Borrowings $377m $352m ($25m) – $200 million expiring 31 May 2028; and
Slide 19: Indicative Timetable
Indicative Timetable Event Date Trading halt and announcement of equity raising Tuesday, 23 July 2024 Institutional Placement Institutional Placement bookbuild Tuesday, 23 July 2024 Announcement of outcome of Institutional Placement Wednesday, 24 July 2024 Trading halt lifted Wednesday, 24 July 2024
Slide 20: Conclusion & Outlook
Conclusion & Outlook Investment objective To deliver an attractive and predictable distribution to investors with earnings Inflation protected predictable income growth prospects over the medium to long term. ACQUISITIONS & EQUITY RAISING • The Acquisitions and Equity Raising are: ✓ Consistent with
Slide 21: Our Investor Facing Team
Our Investor Facing Team ROB DE VOS GARETH WINTER JUSTIN BAILEY SAM RIST CHRIS THOROGOOD Managing Director Chief Financial Officer Chief Investment Chief of Investor Relations Transaction & Officer & Sustainability Development Manager Rob has over 25 years’ experience Gareth has over 25 years’ Justi
Slide 22: Appendices
Appendices Better Communities. Together. r Title
Slide 23: Key Risks
Key Risks Investors should carefully consider the risk factors described below. If you require further information regarding the appropriateness or potential risks of investing in Arena, you should seek appropriate financial, legal, taxation and other necessary advice. All investments involve risk a
Slide 24: Key Risks
Key Risks The precise nature of these risks is uncertain as it depends on complex factors such as policy change, technology development, market forces, and the links between these factors and climatic conditions. To help mitigate the risk of localised valuation impacts on Arena, the investment prope
Slide 25: Key Risks
Key Risks (k) Property valuations Changes in the property market, especially changes in the valuation of properties and in market rents, may adversely affect Arena’s financial performance and the price of Securities (including Placement Securities). In addition, the valuations of Arena’s properties
Slide 26: Key Risks
Key Risks (p) Capital expenditure There is a risk that capital expenditure may exceed Arena’s current forecasts which could adversely impact Arena’s financial performance. Any requirement for unforeseen expenditure on the properties could impact on the performance of Arena. (q) Insurance Arena maint
Slide 27: Key Risks
Key Risks • Arena fails to lodge an announcement announcing its intention to conduct the Institutional Placement and Security Purchase Plan with ASX on or before the announcement date under the Timetable (or such later date as the Joint Lead Managers may agree in writing). • Any of the materials rel
Slide 28: Key Risks
Key Risks ▪ Arena (or any of the Group Members) being wound up or dissolved or entering into a scheme, moratorium, composition or other arrangement with, or to obtain protection from, its creditors or any class of them or an assignment for the benefit of its creditors or any class of them; o circums
Slide 29: Key Risks
Key Risks • Any of the following occurs: o a general moratorium on commercial banking activities in Australia, the United States, the United Kingdom, Singapore, Hong Kong, Japan or any Member State of the European Union is declared by the relevant central banking authority in those countries, or the
Slide 30: Key Risks
Key Risks o any other event is publicly announced in relation to any of them that could reasonably be considered to have a material effect on the reputation of Arena REIT Limited, Arena REIT Management Limited or any of their respective affiliates; or • There is an inaccurate, untrue, incomplete or
Slide 31: Key Risks
Key Risks (f) Funding Arena’s ability to raise funds on favourable terms from either debt or equity sources in the future depends on a number of factors, including, the state of debt and equity markets, the general economic and political climate and the performance, reputation and financial strength
Slide 32: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of Placement Securities of Arena in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the Placement Securities may not be offered or sold, in any country o
Slide 33: International Offer Restrictions
International Offer Restrictions Hong Kong WARNING: This document has not been, and will not be, authorized by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the “SFO”). No action has been taken in Hong Kong to
Slide 34: International Offer Restrictions
International Offer Restrictions Any offer is not made to you with a view to the Placement Securities being subsequently offered for sale to any other party in Singapore. You are advised to acquaint yourself with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.
Slide 35: Glossary
Glossary Arena Arena REIT comprising Arena REIT Limited (ACN 602 365 186), Arena REIT Management Limited (ACN 600 069 761 AFSL No. 465754) as responsible entity of Arena REIT No.1 (ARSN 106 891 641) and Arena REIT No.2 (ARSN 101 067 878) ASX Australian Securities Exchange ELC Early learning centre E