Arena Reit · ASX:ARF
Arena Reit — Investor Presentation (June 2020)
30 slides from Arena Reit's investor presentation, Jun 2, 2020
Slide 1: Arena REIT Equity Raising
ARENA REIT EQUITY RAISING NOT FOR RELEASE TO US WIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES 2 June 2020
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 Not an offer This Presentation is for information purposes only and should not be considered as a solicitation, offer or invitation for subscription, purchase or sale of Placement Securities in any jurisdiction, or to any person to whom it would not be lawful to make su
Slide 4: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER Future performance This Presentation contains certain “forward looking statements” and comments about future events, including about the plans, strategies and objectives of Arena's management, the industry and the markets in which Arena operates, Arena's expectations in
Slide 5: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER To the maximum extent permitted by law the Limited Parties disclaim all liability for any loss arising from the use of this Presentation or its contents or otherwise arising in connection with it, including, without limitation, any liability from fault or negligence, or
Slide 6: Contents
CONTENTS Overview 7 Track Record of Capital Deployment 8 Operating Environment 9 Portfolio Update 11 Equity Raising Overview 12 Capital Management 14 Indicative Timetable 15 Conclusion & Outlook 16 Corporate Directory 17 Appendices 18 Arena Portfolio Overview 19 Key Risks 20 International Offer Rest
Slide 7: Overview
OVERVIEW Equity raising to provide capacity to pursue further social infrastructure property investments • Equity raising to provide capacity to pursue further social infrastructure property investments: a fully underwritten $50 million institutional placement (“Institutional Placement”) Equity ra
Slide 8: Track Record of Capital Deployment
TRACK RECORD OF CAPITAL DEPLOYMENT Proven ability to deploy capital and generate predictable distributions with growth prospects over the medium to long term • Over the last 3 years, Arena has, on average, deployed approximately $75m per annum into developments and acquisitions • Since IPO (June 201
Slide 9: Operating Environment
OPERATING ENVIRONMENT All of Arena’s properties remain open Government response to COVID-19 • Early Childhood Education and Care Relief Package (ECECRP) — ELCs receive weekly payments equal to 50% of gross revenue as calculated over the last fortnight of February 2020 through to 28 June 2020 in lieu
Slide 10: Operating Environment Cont.
OPERATING ENVIRONMENT CONT. Arena’s properties accommodate the provision of essential services for Australian communities Childcare and healthcare operating conditions • Under the National Cabinet Mandatory Code of Conduct (“Commercial Code”), landlords are obliged to provide eligible tenants rental
Slide 11: Portfolio Update
PORTFOLIO UPDATE Development pipeline contributes to earnings growth • Forecast FY20 average contracted like-for-like rent increase of 3.4% (including impact from completed FY19 market reviews but excluding the impact of any rent relief programs)1 • Since HY20 results Arena has: — delivered two deve
Slide 12: Equity Raising Overview
EQUITY RAISING OVERVIEW $50 million fully underwritten Institutional Placement and non-underwritten SPP to raise up to $10 million1 • Fully underwritten Institutional Placement to raise $50 million • It is intended that eligible institutional securityholders who bid for up to their ‘pro-rata’ share
Slide 13: Equity Raising Overview Cont.
EQUITY RAISING OVERVIEW CONT. Sources and uses of fund Pro-forma balance sheet Institutional 31 Dec 2019 Sources of funds1 $ million As at 31 Dec 2019 Placement1 Pro Forma Institutional placement 50.0 ($ million) ($ million) ($ million) Total Sources 50.0 Cash 11.7 11.7 Receivables and other assets
Slide 14: Capital Management
CAPITAL MANAGEMENT Debt maturity extended and capacity refreshed • Syndicated borrowing facility limit increased post 31 December 2019 by $50 million to $330 million, comprised of: — $130 million expiring 31 March 2023; As at 31 Dec 2019 Pro Forma2 Change — $150 million expiring 31 March 2024; and B
Slide 15: Indicative Timetable
INDICATIVE TIMETABLE Event Date Trading halt and announcement of equity raising Tuesday 2 June 2020 Institutional Placement Institutional Placement bookbuild Tuesday 2 June 2020 Announcement of outcome of Institutional Placement Wednesday 3 June 2020 Trading halt lifted Wednesday 3 June 2020 Settlem
Slide 16: Conclusion & Outlook
CONCLUSION & OUTLOOK EQUITY RAISING • Equity raising to provide capacity to pursue further social infrastructure property investments • Existing FY20 DPS guidance of 13.9-14.0 cents1 is maintained • Pro forma 31 December 2019 gearing reduced to 17.6%2,3 O U T LOOK • H2 FY20 payout ratio has been adj
Slide 17: Corporate Directory
CORPORATE DIRECTORY Please direct enquiries to Sam Rist on samantha.rist@arena.com.au or +61 3 9093 9000 ROB DE VOS GARETH WINTER SAM RIST Managing Director Chief Financial Officer Head of Investor Relations 17 ARENA REIT JUNE 2020 EQUITY RAISING
Slide 18: Appendices
APPENDICES
Slide 19: Arena Portfolio 31 Dec 2019
ARENA PORTFOLIO 31 DEC 2019 Number of assets Valuation Passing yield WALE $m % Years ELC portfolio 223 727.9 6.37% 14.1 Healthcare portfolio 10 125.4 6.06% 13.7 Total portfolio 233 853.3 6.32% 14.1 Sector diversity (by value) Geographic diversity (by value) Tenant diversity (by income) 3% 1% 15% QLD
Slide 20: 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 21: Key Risks
KEY RISKS (f) Government policy risk and change in law Childcare and healthcare operators rely heavily on government funding which, if reduced, may adversely impact the underlying demand for these services and therefore tenants’ ability to meet lease obligations and/or their demand for these propert
Slide 22: Key Risks
KEY RISKS A number of factors affect the earnings, cash flows and valuations of commercial property developments, including construction costs, scheduled completion dates and securing tenants at estimated rental income. (m) Property liquidity Property assets are by their nature illiquid investments.
Slide 23: Key Risks
KEY RISKS (u) Underwriting Agreement Arena has entered into an underwriting agreement under which the Lead Manager will fully underwrite the Offer (“Underwriting Agreement”), subject to the terms and conditions of the underwriting agreement. If certain conditions are not satisfied or certain events
Slide 24: Key Risks
KEY RISKS • The S&P/ASX 200 Index or the S&P/ASX A-REIT Index falls by an amount that is 10% or more of the level of that index at the close of trading on the day before the date of the Underwriting Agreement. • ASIC issues or threatens to issue proceedings in relation to the Placement or commences,
Slide 25: Key Risks
KEY RISKS In addition, Arena also gives certain representations, warranties and undertaking to the Lead Manager and an indemnity to the Lead Manager and its affiliates to certain carve-outs. For details of fees payable to the Underwriter, see the Appendix 3B released to ASX on 2 June 2020. Key risks
Slide 26: Key Risks
KEY RISKS (d) Gearing Arena’s gearing level will magnify the effects of any changes in interest rates or changes in property values or performance measures. If the level of gearing increases over the term of Arena’s debt facilities, this may affect the ability of Arena to refinance its debt faciliti
Slide 27: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS This Presentation does not constitute an offer of Placement Securities of Arena in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the Placement Securities may not be offered or sold, in any count
Slide 28: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than (a) in the case of any action for rescission, 180 days after the date of the transaction that gave rise to the cause of action or (b) in the case of a
Slide 29: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS This Presentation and any other Presentation or material in connection with the offer or sale, or invitation for subscription or purchase of the Placement Securities may not be circulated or distributed, nor may the Placement Securities be offered or sold, or be made the
Slide 30: 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 I