Ram Essential Services Property Fund · ASX:REP
Ram Essential Services Property Fund — FY2023 Earnings Presentation
27 slides from Ram Essential Services Property Fund's earnings presentation, Aug 28, 2023
Slide 1: RAM Essential Services Property Fund FY23 Results
RAM ESSENTIAL SERVICES PROPERTY FUND FY23 Results 28 August 2023 REAL ASSET MANAGEMENT I PAGE 0
Slide 2: Agenda
AGENDA 1. Overview 2. Financial Performance 3. Portfolio Performance 4. Capital Management 5. Outlook & Summary 6. Other Information In the spirit of reconciliation, the Real Asset Management Group acknowledges the traditional custodians of country throughout Australia and their connections to land,
Slide 3: Overview
MAYO PRIVATE HOSPITAL 1. OVERVIEW REAL ASSET MANAGEMENT I PAGE 2
Slide 4: Highlights for FY2023 and Beyond
HIGHLIGHTS FOR FY2023 AND BEYOND The portfolio continues to perform strongly and compares favourably to other listed real estate exposure Portfolio Continued Strong Leasing Resilient Tenancy Mix Developments on Track Outcomes Occupancy stable at 98%1 due Selective accretive projects +5% leasing spre
Slide 5: Prudent and Proactive Stewards of Capital
PRUDENT AND PROACTIVE STEWARDS OF CAPITAL Active portfolio and capital management decisions to maintain consistency, stability and control. Positive leasing outcomes NOI growth helping to offset interest cost Met FY2023 expectations Continued portfolio optimisation CONSISTENT Proving asset values an
Slide 6: Strengthened Real Estate Team
STRENGTHENED REAL ESTATE TEAM Highly experienced and specialised team with a proven track record in developing value-add opportunities to secure superior outcomes for investors Scott Wehl – Founder, Group CEO Scott Kelly – Managing Director, CEO Australia 26+ years of of experience in Global Wealth
Slide 7: Strengthening Investment Case
STRENGTHENING INVESTMENT CASE Unique investment opportunity with exposure to attractive sectors SCARCE DEFENSIVE ASSETS SUSTAINABLE GROWTH STABLE VALUATIONS 50% Healthcare Quality tenants Stable tenants 50% Non-discretionary Retail High occupancy Strong rental growth Inflation exposed escalators Des
Slide 8: Sustainability and Reporting
SUSTAINABILITY AND REPORTING Developing sustainability frameworks to be implemented and documented across all assets Longer term Short term Net Zero goal pathway aligned to best practice Benchmarked portfolio against industry Expand scope to other initiatives standards including Green Star and NABER
Slide 9: Financial Performance
MIAMI PRIVATE HOSPITAL 2. FINANCIAL PERFORMANCE REAL ASSET MANAGEMENT I PAGE 8
Slide 10: Funds from Operations (FFO)
FUNDS FROM OPERATIONS (FFO) Operational growth absorbing higher interest costs FY222 Funds from Operations FY231 (Oct 21 – (FFO net of adjustments) Strong leasing spreads driving comparable Jun 22) property income growth of 4.5%3 $m $m Embed growth from inflation exposed rental escalators Property N
Slide 11: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Strengthened balance sheet and improved visibility Gearing of 35%1 within manageable range and Debt2 comfortably within facility covenant $38m 3.0 yrs Headroom Debt Maturity Added syndication lender and increased debt headroom Hedging maintained within policy. Co
Slide 12: Portfolio Performance
COOMERA SQUARE 3. PORTFOLIO PERFORMANCE REAL ASSET MANAGEMENT I PAGE 11
Slide 13: Strong Portfolio Performance
STRONG PORTFOLIO PERFORMANCE Diversified portfolio generating secure and stable income Tenant Mix Income Exposure Key Portfolio Metrics 3% 30 June 23 3% 7% 13% 32% Number of Properties 35 94% 87% 46% Exposed Total Property Value $786.5m Essential to annual 48% Services1 escalators1 1% Occupancy2 98%
Slide 14: Portfolio Resilience Shining Through
PORTFOLIO RESILIENCE SHINING THROUGH Strong leasing outcomes driving underlying income growth 98% +4.5% +7.1% Occupancy FY23 NOI Growth1 Supermarket MAT Growth +5% Average Leasing Spreads in FY23 Embedded growth from inflation exposed income: >80% of CPI-linked leases are uncapped NEW RENEWAL 4 supe
Slide 15: Defensive Sector Valuations Holding Up
DEFENSIVE SECTOR VALUATIONS HOLDING UP Conservative valuations comfortable relative to peers Conservative Valuation Policy Consistently conservative valuation policy 9.1 17.2 81% externally valued in FY23 12.6 Cap rates relatively conservative compared to peers 807.1 786.4 Comparable sales in both s
Slide 16: Capital Management
KEPPEL BAY PLAZA 4. CAPITAL MANAGEMENT REAL ASSET MANAGEMENT I PAGE 15
Slide 17: Capital Recycling
CAPITAL RECYCLING Active capital management to position for debt management and new acquisitions $ DISPOSALS Priorities for Uses of Capital Unconditional: Prudent Westlake Leverage Contract price of $11.46m At book value Management Settlement in October 2023 Redeploy Surplus Capital In Due Diligence
Slide 18: Spotlight on Healthcare Acquisitions and Development
SPOTLIGHT ON HEALTHCARE ACQUISITIONS AND DEVELOPMENT Underlying fundamentals continue to improve with opportunities to increase pipeline ECONOMIC FUNDAMENTALS UNDERPINNING HEALTHCARE REP ACTIVE HEALTHCARE PIPELINE Ageing Population Chronic Illness Supply Constrained Per Capita Spending Mayo Private
Slide 19: Outlook & Summary
GOLD COAST SURGERY CENTRE 5. OUTLOOK & SUMMARY REAL ASSET MANAGEMENT I PAGE 18
Slide 20: FY2024 Guidance
FY2024 GUIDANCE 5.6c - 5.7c 1 Distribution Per Security 8% 2 Forecast Distribution Yield >90% Distribution tax deferred 90% – 100% Target FFO Payout Ratio 1. Guidance assumes average 3-month BBSW of 4.25%, target gearing range of 25% - 40% and assumes no unexpected delays in delivery of value-add pr
Slide 21: Executing Strategy and Delivering Growth
EXECUTING STRATEGY AND DELIVERING GROWTH Unique exposure to attractive sectors Strong leasing outcomes with +5% average spread on renewals Actively managed Sector leading like-for-like NOI growth of 4.5% mitigating higher interest costs Stable and secure rental income with 94% of fund income from es
Slide 22: Important Information
IMPORTANT INFORMATION GENERAL ADVICE WARNING: The information contained herein does not have any regard to the specific investment objectives, financial situation or the particular needs of any person. The information in this presentation is not intended to be personal financial advice. This materia
Slide 23: Other Information
HIGHLANDS HEALTH CENTRE 6. OTHER INFORMATION REAL ASSET MANAGEMENT I PAGE 22
Slide 24: Income Statement
INCOME STATEMENT Revenue FY22 FY23 (Oct 21–Jun 22) Rent from investment properties $m 56.3 36.5 Net unrealised gains on revaluation of investment properties $m - 52.5 Net unrealised gains on derivative financial instruments $m - 6.3 Net realized gains on disposal of investment properties $m - 3.4 In
Slide 25: FFO Reconciliation
FFO RECONCILIATION FY22 FY23 (Oct–Jun 22) Net profit after tax for the period $m (16.6) 61.5 Adjusted for: Reversal of unrealised fair value (gain) on investment properties $m 35.9 (52.5) Reversal of unrealised fair value (gain) on derivatives $m 0.7 (6.3) Reversal of realised fair value (gain) on i
Slide 26: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET 30 Jun 23 30 Jun 22 Cash and equivalents $m 11.9 15.8 Investment properties $m 786.5 798.2 Other assets $m 18.4 18.3 Total assets $m 816.8 832.3 Borrowings $m 300.4 257.0 Trade and other payables $m 12.2 24.7 Total liabilities $m 312.6 281.7 Net assets $m 504.2 550.6 Stapl
Slide 27: Portfolio Snapshot
PORTFOLIO SNAPSHOT Essential Capitalisation Occupancy (% Asset State Valuation WALE (Yrs) Retail / Key Tenant Rate Income) Medical Medical/Healthcare Corrimal Private Healthcare Centre NSW 5,600,000 6.50% 93% 3.0 100% Dr Nick Marsden Dubbo Private Hospital NSW 22,509,000 5.25% 100% 13.3 100% Healthe
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