Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — Merger or Acquisition (December 2017)
15 slides from Stor-age Property Reit's merger presentation, December 2017
Slide 1: Craighall CPC Presentation
STOR-AGE PROPERTY REIT CRAIGHALL CPC PRESENTATION DECEMBER 2017
Slide 2: Presentation Outline
PRESENTATION OUTLINE • Executive summary • New developments strategy • Rationale • CPC Structure for Stor-Age › Typical transaction process › Benefits • CPC Structure – Craighall › Snapshot › The opportunity › Legal, funding and regulatory • Appendix › Related party shareholding in Stor-Age STOR-AGE
Slide 3: Executive Summary
EXECUTIVE SUMMARY • Development and acquisition of Craighall property in terms of Certificate of Practical Completion Structure (‘CPC’ Structure)* • Recent international precedent – US Self Storage REIT ‘Certificate of Occupancy’ deals • Second CPC transaction – Stor-Age to acquire Craighall develop
Slide 4: New Developments Strategy
NEW DEVELOPMENTS STRATEGY • Pre-stated strategy – ‘measured approach’ towards new development risk profile • Remain flexible and opportunistic while limiting downside risk to distributions growth in medium term • Strategic decision at listing to not grow the existing Managed Portfolio structure › St
Slide 5: Rationale
RATIONALE • Stor-Age listed in November 2015 as a highly specialised, low-risk, income paying self storage REIT • New self storage developments are 100% speculative › no pre-tenanting of space prior to opening › Lease-up periods can range from 3-5 years › Economic cost of lease-up is significant rel
Slide 6: CPC Structure for Stor-Age
CPC STRUCTURE FOR STOR-AGE STOR-AGE PROPERTY REIT LIMITED 6
Slide 7: Typical Transaction Process
TYPICAL TRANSACTION PROCESS 1. Identify, negotiate and secure rights to new development opportunity in line with 5 year growth strategy to 2020 2. Investment Committee approval 3. Town planning process (approval of development rights c. 2 years) 4. Once planning consents are obtained – identify most
Slide 8: Benefits
BENEFITS • No onerous 3rd party involvement – terms favourable to Stor-Age shareholders • 100% transparency › Purchase price and timing confirmed upfront • Independent oversight and regulation to protect interests of Stor-Age shareholders › Independent non-executive directors control process › Indep
Slide 9: CPC Structure – Craighall
CPC STRUCTURE – CRAIGHALL STOR-AGE PROPERTY REIT LIMITED 9
Slide 10: Snapshot
SNAPSHOT Salient terms › SPH to develop property on ‘cost +’ basis › Stor-Age to acquire completed development from SPH on CPC for ‘cost+7%’ › SPH to provide rental guarantee for initial 4 year lease-up period Benefits › Development and lease-up risk significantly diminished › New properties come on
Slide 11: The Opportunity
THE OPPORTUNITY • To develop and own a greenfield multi-storey self storage property in prime Craighall location • Yield-neutral on acquisition • Well-located to serve residential areas of Craighall and neighbouring Craighall Park, Hyde Park, Dunkeld and Blairgowrie › dense living spaces with establ
Slide 12: The Opportunity (continued)
THE OPPORTUNITY (CONTINUED) Development details • Developer: SPH • Purchaser: Stor-Age • GBA: 9 046 m² • GLA: 6 651 m² • Total development cost (PH I and II): R116 551 956 › CPC contract cost (PH I): R95 070 288 › Phase II cost*: R21 481 668 *Rationale for phasing: allow SPH to assume ‘major’ develo
Slide 13: Legal, Funding and Regulatory
LEGAL, FUNDING AND REGULATORY Legal structure • SPH to develop property and sell to Stor-Age on CPC (Development and Sale Agreement) • SPH to provide a rental guarantee – difference between rental income at maturity (85%) and actual rental income earned in lease-up Funding structure • Stor-Age to pa
Slide 14: Appendix – Related Party Shareholding in Stor-Age
APPENDIX – RELATED PARTY SHAREHOLDING IN STOR-AGE • Shareholding in Stor-Age Property Holdings (Pty) Ltd (‘SPH’) › GM Lucas › SCL Lucas › SJ Horton › Collectively hold an aggregate beneficial interest in SPH of 73.33% • SPH shareholding* in Stor-Age Property REIT Ltd – c. 12% • Stor-Age closing mark
Slide 15: 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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