Stride Property Group · NZX:SPG
Stride Property — FY2021 Earnings Presentation
41 slides from Stride Property's earnings presentation, May 27, 2021
Slide 1: Stride Property Group Annual Results 2021
2021 Stride Property Group Annual Results Stride Property Group Annual Results Presentation for the year ended 31 March 2021 1
Slide 2: Contents
Contents 3 Highlights 4 Execution of Strategy 10 COVID-19 Update 11 Performance, People, Products, Places 21 Sustainability 25 FY21 Results 30 Capital Management 33 Conclusion 39 Glossary Capitalised and technical terms are defined in the glossary on page 39. Stride Property Group Annual Results Pre
Slide 3: Highlights
Highlights Stride Property Group (Stride) - Consolidated Assets Under Stride’s management Distributable Profit2 Management (AUM) fee income1 Per Share (DPPS) $3.0bn $25.1m 11.58cps3 Up $0.8bn from 31 March 2020 Up $6.8m on FY20 Up 12.2% on FY20 Property Council NZ Supreme Award 771 COVID deals New S
Slide 4: Execution of Strategy
Execution of Strategy Stride Property Group Annual Results Presentation for the year ended 31 March 2021 4
Slide 5: FY21 milestones
FY21 milestones FY21 was an extraordinary year for Stride, having successfully managed the impacts of COVID-19 while also achieving significant milestones in growing its real estate investment management strategy Investment management business • New industrial Product established: Industre commenced
Slide 6: Building out the Stride platform
Building out the Stride platform Stride Property Group (Stride) - Consolidated Stride’s weighted look-through portfolio value1 Execution of strategy is delivering greater scale to Stride’s Mar-17 Mar-21 real estate investment management (REIM) platform, which is leading to increased diversification
Slide 7: SIML growth from establishment
SIML growth from establishment Stride Property Group (Stride) - Consolidated Total AUM by Product SIML’s management fee income has continued to grow Town Centre Office alongside the growth in its investment management platform Stride Investore $3,321m Diversified Industre $3,003m Fee income has prov
Slide 8: Office Acquisition Sale Street, Auckland
Office Acquisition 46 Sale Street, Auckland • Unconditional agreement to acquire 46 Sale Street, Auckland for $152m • Settlement expected to occur on 30 June 2021 • Premium grade building, constructed in 2017 • WALT1 of 7.4 years with major tenant AA Insurance comprising 46% of net income • 4.5 star
Slide 9: Growth in Office Portfolio
Growth in Office Portfolio Key portfolio highlights1 Office portfolio overview1 • High quality portfolio: over 70% portfolio weighting towards Premium and Key metrics (pro forma) 31 Mar 21 A grade properties Number of properties 11 • Robust operating metrics: portfolio WALT2 of 6.5 years and occupan
Slide 10: COVID-19 Update
COVID-19 Update Stride Property Group (Stride) Expected Expected Stride delivered a better than expected impact on impact on outcome following the financial impact of FY21 distributable distributable impact on profit at HY21 profit at FY20 COVID-19 distributable Interim Annual Impacted item profit1
Slide 11: Performance, People, Products, Places
Performance People Products Places Stride Property Group Annual Results Presentation for the year ended 31 March 2021 11
Slide 12: Performance
Performance Stride Property Group (Stride) - Consolidated Financial highlights • $49.9m net rental income from continuing operations, down from FY20 Profit after income tax from continuing operations ($50.4m), due to transfer of properties to Industre and Investore, partially • offset by acquisition
Slide 13: People
People FY21 was dominated by the impacts of COVID-19. The pandemic posed a number of challenges for the Stride team and we are proud of the way our people responded to those challenges • Despite the challenges of COVID-19, Stride undertook a review of employee benefits in order to retain and attract
Slide 14: Products
Products Since 31 March 2020, Stride’s AUM has grown from $2.2bn to $3.3bn including committed acquisitions and developments, with AUM in Stride Products increasing from $1.2bn to $2.3bn Portfolio composition by value as at 31 March 2021 1 Committed developments and acquistions $1,065m $1,113m Indus
Slide 15: Investore: $1.04bn portfolio, 9.8 years WALT
$1.04bn Countdown, Petone Portfolio value1 net valuation gain of 15.5% for 12-month period2 99.1% Portfolio Occupancy 9.8 years WALT 26.8% Loan to Value Ratio3 $230m Additional equity raised and second listed bond issued $68.5m acquisition of Countdown Petone and Waimak Junction land (including stag
Slide 16: Diversified: Queensgate Shopping Centre
Queensgate Shopping Centre $466m Portfolio value net valuation decline of 0.6% for FY21 10 months Weighted average lease extension from COVID-19 negotiations Sales performance positive MAT1 was resilient despite COVID-19 lockdowns, with MAT down 5.3%2 from FY20 Queensgate rebuild continues Cinema ta
Slide 17: Industre: $610m portfolio
48-60 Wilkinson Rd, Ellerslie $610m Portfolio value as at 31 March 2021 growth of $212m since commencement $108m of acquisitions completed in FY21 9.7 years WALT 439 Rosebank Road development commenced $10.0m acquisition of land1 adjacent to the recently purchased 48-60 Wilkinson Rd, completed post-
Slide 18: SPL Places
SPL Places As at As at SPL Overview 31 Mar 211 31 Mar 20 Properties (no.) 14 26 Excluding COVID-19 negotiations, SIML completed 201 lease transactions for SPL during FY21: Tenants (no.) 347 388 • 144 rent reviews over 38,625 sqm for a total Net Lettable Area (sqm) 135,350 259,285 annual rental of $1
Slide 19: SPL Office Portfolio
SPL Office Portfolio As at As at Office Overview 31 Mar 21 31 Mar 20 Office Highlights Properties (no.) 10 7 • Net valuation movement of +$11.9m or +2.1% for FY21 Tenants (no.) 115 66 • As a result of the three office transactions, the office portfolio Net Lettable Area (sqm) 69,614 37,670 WALT has
Slide 20: SPL Town Centre Portfolio
SPL Town Centre Portfolio As at As at Town Centre Overview 31 Mar 21 31 Mar 20 Town Centre Highlights Properties3 (no.) 4 4 • Net valuation movement of +$4.9m or +1.6% for FY21 Tenants (no.) 232 244 • Stable occupancy and WALT despite the challenges of COVID-19 Net Lettable Area (sqm) 65,736 65,356
Slide 21: Sustainability
Sustainability Stride Property Group Annual Results Presentation for the year ended 31 March 2021 21
Slide 22: Sustainability
Sustainability Stride Property Group (Stride) Governance • During FY21 Stride established a Board Sustainability Committee, chaired by Director Jacqueline Cheyne, to demonstrate its commitment to progressing its sustainability programme Achievements • SIML has implemented the New Zealand-developed B
Slide 23: 22 The Terrace Sustainable Improvements
22 The Terrace Sustainable Improvements Stride Property Group (Stride) 22 The Terrace Creating a rainwater harvesting system, which will reduce water demand refurbishment project We have taken the opportunity to incorporate sustainability initiatives as part of the seismic upgrade and refurbishment
Slide 24: Waste Management Auckland Headquarters
Waste Management Auckland Headquarters Stride Property Group (Stride) This world class Auckland headquarters built by Stride, now owned by Industre, triumphed at the 2020 Property Council New Zealand Awards The building won the following awards at the Property Council New Zealand Awards for 2020: •
Slide 25: FY21 Results
FY21 Results Stride Property Group Annual Results Presentation for the year ended 31 March 2021 25
Slide 26: Financial Performance
Financial Performance Stride Property Group (Stride) - Consolidated Re-presented Change 2021 2020 Actual Actual $m $m $m % Net rental income 49.9 50.4 (0.5) (1.0) Management fee income 25.1 18.3 +6.8 +37.1 Corporate expenses (21.1) (22.4) +1.3 +5.9 Profit before net finance expense, other income/(ex
Slide 27: Distributable Profit
Distributable Profit1 Stride Property Group (Stride) - Consolidated 2021 2020 Change Actual Actual $m $m $m % Profit before income tax (including discontinued operations) 143.2 28.7 +114.5 +399.6 Non-recurring, non-cash and other adjustments: - Net change in fair value of investment properties (43.3
Slide 28: AFFO Distributable Profit
AFFO Distributable Profit Stride Property Group (Stride) - Consolidated 2021 2020 Change Actual Actual $m $m $m % Distributable profit after current income tax 46.3 37.7 8.6 +22.8 Adjustments to funds from operations: - FY21 Maintenance capital expenditure (3.0) (5.9) +2.9 +49.0 Adjusted Funds From
Slide 29: Financial Summary
Financial Summary Stride Property Group (Stride) - Consolidated As at As at Change 31 March 2021 31 Mar 2020 $m Investment Properties1 ($m) 1,050.5 996.1 48.4 Bank debt drawn ($m) 261.0 386.2 125.2 Equity ($m) 1,017.4 698.2 319.2 Shares on issue (million) 472.8 365.4 107.4 NTA per share $2.15 $1.91
Slide 30: Capital Management
Capital Management Stride Property Group Annual Results Presentation for the year ended 31 March 2021 30
Slide 31: Capital Management – Debt Facilities
Capital Management – Debt Facilities SPL (excl. Industre properties and debt) • $230m oversubscribed capital raise completed in November 2020 to support office acquisitions As at As at Debt facilities 31 Mar 2021 31 Mar 2020 • Next debt facility maturing is $170m in August 2022 (FY23) Banking facili
Slide 32: Capital Management – Cost of Debt
Capital Management – Cost of Debt SPL (excl. Industre unincorporated joint venture assets and debt) • $120m of fixed rate hedging broken in relation to the establishment of Industre As at As at Cost of debt 31 Mar 2021 31 Mar 2020 • $155m of fixed rate hedging entered into following office acquisiti
Slide 33: Conclusion
Conclusion Stride Property Group Annual Results Presentation for the year ended 31 March 2021 33
Slide 34: Conclusion
Conclusion Stride has demonstrated its commitment to pursue growth in its investment management business over FY21, and this will continue in FY22 • SPL has grown its office portfolio during FY21 and has entered into an unconditional agreement to acquire 46 Sale Street, Auckland post-balance date •
Slide 35: Appendix 1: Portfolio by Sector
Appendix 1: Portfolio by Sector Town Centre/ Overview Total Portfolio Office1 Industrial Large Format Retail Retail Shopping Centres Office and retail portfolio2 Properties (no.) 15 11 44 Net Contract Rental3 ($m) 62.4 39.9 22.5 WALT3 (years) 5.7 6.5 4.3 Occupancy Rate (% by area) 97.7 98.8 96.5 Por
Slide 36: Appendix 2: AUM
Appendix 2: AUM $26m $3,705m $230m5 $3,321m $128m $175m4 $1,091m $1,065m $890m $75m3 $2,256m $502m $2,113m $31m1 $37m2 $502m $502m $466m $871m $641m $641m $610m $1,113m $1,113m $1,241m $1,038m External AUM as Industre Diversified Investore Pro forma external Stride office and Acquisitions and Total
Slide 37: Appendix 3: Profit before other income and tax
Appendix 3: Profit before other income and tax for continuing operations $40.4m $6.8m $1.3m $29.8m $3.4m $3.0m $6.5m ($1.0m) ($0.4m) ($0.5m) ($1.3m) ($7.1m) Year ending 31 Net rental Net rental Spreading of Covid 19 Covid 19 Covid 19 Net rental Lower net Higher Lower 31 Mar 21 Mar 20 reduction from
Slide 38: Appendix 3 (cont.): NTA and Investment Property
Appendix 3 (cont.) Net Tangible Assets per share $0.13 $0.01 ($0.02) $2.15 $0.08 $0.09 ($0.09) $0.04 $1.91 As at Equity capital raise Profit before other Net change in fair Share of profit in Income tax expense Other Dividends paid As at 31 Mar 2020 income and income value of Investment associate co
Slide 39: Glossary
Glossary Stride Property Group Annual Results Presentation for the year ended 31 March 2021 39
Slide 40: Glossary
Glossary Contract Rental Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL (or the relevant landlord) by that tenant under the terms of the relevant lease as at the relevant date, annualised for the 12-month period on the basis of the occupancy level for
Slide 41: Thank you
Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the twelve months ende