Investore Property Ltd. · NZX:IPL
Investore Property — IPO Roadshow (June 2016)
42 slides from Investore Property's IPO roadshow presentation, June 2016
Slide 1: Investore Property Limited
Investore Property Limited June 2016 Investore Property Limited
Slide 2: Disclaimer and Important Information
Disclaimer and Important Information This presentation has been prepared by Investore Property Limited (Investore) to provide a general overview of Investore and its operations. It has been prepared solely for informational purposes and does not purport to be complete or comprehensive and does not c
Slide 3: Table of Contents
Table of Contents Executive Summary Overview of Investore Key Strengths Financial Overview Key Risks Offer Summary Appendix A: Portfolio Summary Investore Property Limited 3
Slide 4: Today's Presenters
Today’s Presenters Tim Storey Peter Alexander Jennifer Whooley Philip Littlewood Chair, SIML Chief Executive Officer, Chief Financial Officer and General Manager, Director, Investore SIML Company Secretary, SIML Investment management, SIML Investore Property Limited 4
Slide 5: Executive Summary
Executive Summary Investore Property Limited
Slide 6: Executive Summary
Executive Summary Stride Property Limited (Stride) is demerging its Large Format Retail properties to form a new listed property vehicle Investore Property Limited (Investore) Investore will comprise a portfolio of 39 Large Format Retail (the IPL Portfolio) properties located in the main urban a
Slide 7: Overview of the Offer
Overview of the Offer Key terms Description Offer size $150 - $185m Raise capital for Investore to partially fund the acquisition of 14 ‘Countdown’ branded supermarkets from SCA (the SCA Portfolio) for $267.4 million Repayment of the intercompany advance from Stride advanced to purchase the Stri
Slide 8: Overview of Investore
Overview of Investore Investore Property Limited
Slide 9: Investore at a Glance
Investore at a Glance Investore will comprise a portfolio of 39 Large Format Retail properties in the main urban areas throughout New Zealand Key metrics Properties throughout 39 New Zealand Tenants 75 Net Lettable Area (sqm) 173,503 Occupancy rate 99.7% Net Contract Rental $42.9m WALT (years) 14.8
Slide 10: Investment Philosophy and Strategy
Investment Philosophy and Strategy Large Format Retail properties have a specific, differentiating set of attributes that can provide a reliable income return to shareholders. These attributes are: Investment Philosophy – Nationally recognised retailer tenants, offering rental income stability – L
Slide 11: Capital Management
Capital Management The portfolio characteristics provide flexibility in Investore's capital structure and support leverage at a higher level than peers – the long term target LVR is approximately 48% Investore's debt facilities are subject to the following key covenants: – The LVR will not excee
Slide 12: Board and Governance
Board and Governance Investore’s constitution permits a maximum of four directors on the Board, which does not contain a majority of independent Directors The Board comprises: – An independent non-executive Chairman (who holds a casting vote in respect of resolutions of the Board) Mike Allen Kat
Slide 13: Large Format Retail Properties – Overview
Large Format Retail Properties – Overview Investore defines Large Format Retail properties as: New Zealand Commercial Property Single tenant or limited number of tenants (and generally no more than 15 specialty tenants) – The anchor tenant or tenants will typically occupy more than Office Retail I
Slide 14: Key Strengths
Key Strengths Investore Property Limited
Slide 15: Key Business Strengths of Investore
Key Business Strengths of Investore Established portfolio with quality and nationally recognised tenants, long lease terms 1 and high occupancy rates 2 National presence in the main urban areas 3 Well defined investment strategy exclusively focused on Large Format Retail properties 4 Strong financia
Slide 16: Established Portfolio
1 Established Portfolio Quality and nationally recognised tenants, long lease terms and high occupancy rates National Retailer Tenants1 Weighted Average Lease Occupancy Rate Term Countdown2 84% Foodstuffs 6% Mitre10 3% The Warehouse 3% Other 4% 14.8 years 99.7% Total Number of Tenants Net Lettable A
Slide 17: Established Portfolio (cont.)
1 Established Portfolio (cont.) Long lease terms – lease expiry profile Investore Portfolio lease expiry profile1 by Contract Rental 1 Represents the scheduled expiry for each lease, excluding any rights of renewal that may be granted under each lease, for the entire portfolio as at 30 April 2016, a
Slide 18: National Presence in the Main Urban Areas
2 National Presence in the Main Urban Areas Investore will comprise a portfolio of 39 Large Format Retail properties in the main urban areas throughout New Zealand Key Investore portfolio attributes include quality tenants, exposure to non-discretionary retail sector and a long weighted average
Slide 19: Well Defined Investment Strategy Exclusively Focused on Large Format Retail
3 Well Defined Investment Strategy Exclusively Focused on Large Format Retail Properties Invest in Large Format Retail properties that maximise distributions and total returns to shareholders over the medium to long term Actively manage the properties to increase their values and income growth p
Slide 20: Strong Financial Profile with Attractive Dividend Yield
4 Strong Financial Profile with Attractive Dividend Yield FY18 Dividend Yield1 FY17 NTA per Share2 FY18 Distributable Profit per Share3 Cash Yield 5.1 – 5.3% Gross Yield 7.6 – 8.0% $1.40 – 1.46 7.5 – 7.8¢ Value of Investment Net Contract Rental Properties4 $641.4m $42.9m Note: Investore’s financials
Slide 21: Experienced Manager (SIML) with Proven Capabilities
5 Experienced Manager (SIML) with Proven Capabilities, Resources and Expertise Peter Alexander Chief Executive Officer Philip Littlewood Jennifer Whooley Roy Stansfield Andrew Hay Steve Lewis GM Investment Chief Financial Officer GM Shopping Centres GM Commercial & Industrial National Manager Manage
Slide 22: Overview of Investore / SIML Management Agreement
Overview of Investore / SIML Management Agreement Key terms Description Management fee 0.55% of the value of investment properties up to $750m, 0.45% thereafter 10% of change in shareholder wealth above 10% TSR p.a. (2.5% per quarter) and below 15% Performance fee TSR p.a. (3.75% per quarter) wi
Slide 23: Financial Overview
Financial Overview Investore Property Limited
Slide 24: Selected Financial Information
Selected Financial Information Investore’s stable income stream is supported by 73% of its leases not being due for expiry for the next 15 years Key drivers of profitability are interest expense (29% of FY18 revenue) and management fees (9% of FY18 revenue) The Board of will target a cash divi
Slide 25: Selected Financial Information (cont.)
Selected Financial Information (cont.) Investore will manage debt and funding levels to its long term target LVR1 of approximately 48% to assist in optimising shareholder returns There are no revaluations of the investment properties assumed in the PFI FY172 FY183 NZ$000s Forecast Statutory Fore
Slide 26: Pro-forma Balance Sheet Overview
Pro-forma Balance Sheet Overview The Pro Forma Statement of Financial Position set out following shows Investore's financial position upon completion of the Offer and completion of the acquisition of the entire Investore Portfolio that is expected to be performed in the following steps: – Step 1:
Slide 27: Key Risks
Key Risks Investore Property Limited
Slide 28: Key Risks
Key Risks The risks below describe the circumstances that Investore and the Manager are aware of that exist or are likely to arise that significantly increase the risk to Investore's financial position, financial performance or stated plans – Exposure to a significant tenant – Single class of prop
Slide 29: Offer Summary
Offer Summary Investore Property Limited
Slide 30: Offer Summary
Offer Summary % ownership Number of New Offer Shares being Offered under the Offer1 100.7m – 135.0m 42.2% - 49.5% Number of Shares being Distributed to Stride Shareholders 91.1m 33.4% - 38.2% Number of Shares held by Stride after the Offer 47.4m – 54.3m 19.9% Total Number of Shares Following Complet
Slide 31: Offer Summary: Selected Metrics of the Offer
Offer Summary Selected Metrics of the Offer FY171 2HFY172 FY183 Statutory Ann. Dividend / Yield Statutory Distributable Profit per Share (cps)4 6.3 – 6.6 cents - 7.5 – 7.8 cents Dividends per Share (cps)5 6.1 – 6.4 cents 7.4 – 7.7 cents 7.3 – 7.6 cents Implied Cash Dividend Yield6 4.3 – 4.5% 5.1 – 5
Slide 32: Key Dates
Key Dates1 Key dates PDS Registered 10-Jun-2016 Stride Shareholder Offer Opening Date 20-Jun-2016 Bookbuild, Pricing and Allocation in Respect of the Institutional Offer 23-Jun-2016 Broker Firm Offer Opening Date 24-Jun-2016 Closing Date for the Broker Firm Offer and the Stride Shareholder Offer 05-
Slide 33: Overview of Variation Proposal and Restructuring
Overview of Variation Proposal and Restructuring Investore Property Limited
Slide 34: Overview of Stride's proposed restructuring
Overview of Stride’s proposed restructuring The intention of the proposed restructuring is to: – Provide greater flexibility for its investment structure and facilitate and enable growth in its real What is the purpose? estate investment management (“REIM”) business – Ensure Stride is “fit for pur
Slide 35: Overview of the Proposed Stapled Structure
Overview of the Proposed Stapled Structure Stride shareholders will receive 1 SIML share for every 1 Stride share they hold The below structure provides an illustrative example of the changes that would occur to the shareholding of a shareholder with 1,000 shares Shareholding Pre-Restructuring a
Slide 36: Practical Impacts of the Stapling Structure
What are the Practical Impacts of the Stapling Structure? Under the Restructuring, shareholders will retain existing Stride shares and receive the same number of shares in SIML and retain the same proportionate interest in the Stapled Group as they currently have in Stride Stride stakeholders wi
Slide 37: Forecast Impact on Shareholder Dividends
Forecast Impact on Shareholder Dividends The analysis below highlights Stride’s projections to materially increase its distribution to shareholders following the growth in its REIM business FY16 Cash Dividend vs. FY18 Cash Dividend (based on an illustrative holding of 1,000 shares and 33% personal
Slide 38: Appendix A: Portfolio Summary
Appendix A: Portfolio Summary Investore Property Limited
Slide 39: Investore Portfolio Metrics Breakdown
Investore Portfolio Metrics Breakdown Key Performance Stride Existing Assets SCA Portfolio Total Portfolio Indicator Number of Properties 25 14 39 Number of Tenants 27 48 75 Net Lettable Area (sqm) 113,768 59,735 173,503 Net Contract 25.2 17.7 42.9 Rental ($m) WALT (years) 14.6 15.1 14.8 Occupancy R
Slide 40: Stride Existing Assets Portfolio
Stride Existing Assets Portfolio Net Lettable Occupancy Building Age Specialty Rental Anchor Tenant Address Val. (NZ$m)1 Initial Yield2 Area (sqm) WALT (years) Rate3 (year) Leases (#)4 Foodstuffs 9 Gloucester Street, $14.8 6.2% 4,386 13.4 100.0% 2008 – (New World) Napier Foodstuffs 78 Courtenay Stre
Slide 41: Stride Existing Assets Portfolio cont.
Stride Existing Assets Portfolio cont. Net Lettable Occupancy Building Age Specialty Rental Anchor Tenant Address Val. (NZ$m)1 Initial Yield2 Area (sqm) WALT (years) Rate3 (year) Leases (#)4 47 Bay Road, Wellington $11.5 6.3% 3,490 18.8 100.0% 1996⁵ – 13-19 Queen Street, Wellington $9.6 6.8% 3,427 1
Slide 42: SCA Portfolio
SCA Portfolio Indep. Val. Net Lettable Occupancy Building Age Specialty Rental Anchor Tenant Address (NZ$m) Initial Yield1 Area (sqm) WALT (years) Rate2 (year) Leases (#)3 Cnr Fernlea Avenue and Roberts $13.0 6.9% 3,611 14.7 100.0% 2012 5 Line, Palmerston North Cnr Hanson St, John St & $23.8 6.4% 4,