LondonMetric Property PLC · LSE:LMP
LondonMetric Property — FY2021 Earnings Presentation
35 slides from LondonMetric Property's earnings presentation, May 27, 2021
Slide 1: Full Year Results, Year Ended 31 March 2021
FULL YEAR RESULTS Year Ended 31 March 2021 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Key Highlights
Key Highlights Sector calls, asset selection and income focus continue to deliver portfolio outperformance • Structural shifts continue to shape our portfolio Urban logistics assets – Pandemic accelerated demand for logistics & grocery £1 billion – Urban logistics exposure increased to over 40%1 Up
Slide 4: Financial Highlights
Financial Highlights Full Year to 31 March 2021 March March Change FY 21 dividend cover 2021 2020 110% Net Rental Income £123.3m £115.9m +6% Allowing further progression EPRA Earnings £85.6m £74.5m +15% Q1 2022 dividend progression +4.8% From 2.1p to an expected 2.2p EPRA Earnings (pps) 9.52p 9.26p
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 Delivering long term reliable, repetitive & growing income 31 March 31 March Change Rent collection 2021 2020 98.1% Net rental income £123.3m £115.9m 1.1% asset managed 0.8% waived/outstanding Administrative costs £(15.8)m £(15.9)m Net Finance costs £(22.5)m £(26.1)m EPRA cost rati
Slide 7: Balance Sheet
Balance Sheet1 31 March 2021 31 March 2020 Change Property portfolio2 £2,588.7m £2,352.2m Cash £54.6m £86.1m Debt £(877.0)m £(974.8)m Fair value of derivatives £(0.6)m £(5.4)m Other net liabilities £(34.4)m £(26.3)m IFRS Net Assets £1,731.3m £1,431.8m EPRA Adjustments £0.6m £5.4m EPRA Net Tangible A
Slide 8: Financing
Financing Debt Metrics1 31 March 2021 31 March 2020 Post period end (Including PPE) refinancing Total facilities £1,151m £1,106m Private debt placement Gross Debt £877m £975m £380m • 11.1 years, 2.27% Headroom £338m £220m • £50m green tranche Loan to Value2 32.3% 35.9% New RCFs Average maturity3 8.2
Slide 9: Historic Debt Metrics
Historic Debt Metrics Warrington Bedford Loan to Value Ratio Cost of Debt Debt Maturity Interest Cover Ratio (%) (%) (years) (x) 40 4.0 10.0 6.0 38 35 36 5.5 3.5 3.5 8.2 32 5.0 5.0 32 8.0 5.0 3.1 4.7 30 30 2.9 4.5 3.0 2.8 6.4 4.3 2.5 6.0 5.6 4.0 5.2 4.8 4.7 20 2.0 4.0 3.0 10 1.0 2.0 2.0 2016 2017 20
Slide 10: Contracted Income Progression
Contracted Income Progression 140.0 4.8 130.0 4.6 1.0 2.2 120.0 9% growth in (£m) contracted income 110.0 135.9 131.1 124.3 126.5 100.0 123.3 90.0 80.0 March 21 PPE Investment Income from Pro Net Rent to Net investment activity developments/ Forma Contracted Rent activity1 in legals lettings in lega
Slide 11: Delivering Long Term Shareholder Returns
Delivering Long Term Shareholder Returns Consistently delivering attractive compound led returns Net Rental Income Earnings Total Property Return Total Shareholder Return (£m) (pps) (rebased to 100)2 (rebased to 100)1,2 140 10.0 260 300 Dividend 9.0 240 Share price 120 8.0 260 220 100 7.0 6.0 200 22
Slide 12: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 13: Our Portfolio
Our Portfolio Aligned to structurally supported sectors Value1 NIY2 EY2 WAULT2 CVg3,4 TPR3,4 31 March 2021 (£m) (%) (%) (Years) (%) (%) Urban, 40.5% Urban 994 4.4 5.0 7.9 +15.5 +20.1 Regional 484 4.0 4.7 13.1 +12.5 +17.3 Grocery & roadside, Distribution 10.8% Mega 352 3.8 4.0 15.2 +10.3 +14.8 72% (i
Slide 14: Distribution
Distribution Aligned to a structurally supported sector enjoying highly favourable demand/supply dynamics Urban Regional Mega • £43.3m rent (£6.90 psf) • £20.1m rent (£6.40 psf) • £14.2m rent (£5.70 psf) • 102 assets • 11 assets • 3 assets • NIY1 4.4%, EY 5.0% • NIY1 4.0%, EY 4.7% • NIY1 3.8%, EY 4.
Slide 15: Long Income
Long Income Reliable income return with capital protection Grocery & Roadside £285m TPR2:+10.6% NIY1 ➢ Non-discretionary spend NIY 4.7%, 5.4% ➢ Food stores used for online fulfilment WAULT 16.5 years Average rents: £15.60 psf ➢ Highly defensive income characteristics Contractual uplifts: 89% WAULT N
Slide 16: Acquisitions
Acquisitions Upscaling quality of portfolio to structurally supported sectors of urban logistics and long income WAULT 17 years Long let acquisitions NIY Grocery, 4.5% 22% Rising to 5.0% after 5 years EPC ‘A-C’ Acquired 85% ‘A-B’: 55% Urban, £313m Roadside, 56% (including £68m PPE) 13% Geography NNN
Slide 17: Disposals
Disposals Selling shorter let urban logistics and mature/non core long income, offices and retail WAULT 9 years 8 years to first break NNN retail, NIY Grocery, 8% 5.7% 14% Trade & Limited income growth prospects DIY, 26% Geography Disposed London/SE 28.3% £181m (including £22m PPE) Midlands 46.6% Of
Slide 18: Development Activity
Development Activity High quality developments at attractive yields Tyseley, Birmingham Bedford Link Let 48,000 sq ft Let 31,000 sq ft Unit 2 - Under Offer Let 107,000 sq ft Unit 1 – In discussions 120,000 sq ft & EV charging deck Unit 1 – 350,000 sq ft Unit 2 – 172,000 sq ft • Pre-let to Amazon • I
Slide 19: Portfolio Management Uplifts
Portfolio Management 173 deals generating £5.3m pa additional income & delivering +3.1% LFL income growth Occupier contentment Capturing reversion 101 lettings & regears 72 rent reviews • +£3.8m rent pa • +£1.5m rent pa • WAULT of 13.2 years • +10% ahead of passing1 • 9/10 score for landlord recomme
Slide 20: Outlook
LONDONMETRIC lay PROPERTY PLC OUTLOOK
Slide 21: Market Outlook
Market Outlook COVID-19 accelerating structural trends with flight to quality Polarisation in total property returns1 2021 2016 • Structural shifts & trends accelerating Spread Spread – Rapid changes in how we work, shop & socialise 3,860bps 700bps – Covid has accelerated trends that were already in
Slide 22: Looking Forward
Looking Forward Positioning the portfolio for the long term • Structural trends accelerated by the pandemic Digital disruption • Macro themes will increasingly win out • Temporary behavioural changes increasingly permanent • Demographic tsunami will increase the demand for income Demographics • Migr
Slide 23: Appendices
LONDONMETRIC lay PROPERTY PLC APPENDICES
Slide 24: Responsible Business & ESG
Responsible Business & ESG Adopting the right approach to ensure we own fit for purpose real estate and support all stakeholders Environmental Social Governance & Reporting Building improvements Energy consumption Occupiers GRESB Fallen 88% since 2015 to 1,081 MWh Scored 9/10 v other landlords, Gree
Slide 25: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Rent Average Area (Share) Surplus/(Deficit)4 CVg2,4 Occupancy NIY1 (years) Rent Uplifts Rent As at 31 March 2021 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.5 351.9 33.8 10.6 10.3 100.0 3.8 15.2 15
Slide 26: Total Property Returns – LondonMetric
Total Property Returns – LondonMetric 200 Urban (+92%) 190 180 Regional (+78%) 170 160 Mega (+60%) LMP All Property (+53%) 150 140 Long Income (+38%) 130 120 MSCI All Prop (+17%)2 110 100 H1 FY18 H2 FY18 H1 FY19 H2 FY19 H1 FY20 H2 FY20 H1 FY21 H2 FY21 1. Source: MSCI to 31 March 2021 26 2. Compariso
Slide 27: Top occupiers by income
Top occupiers by income Top 10 occupiers Delivering long term sustainable, diversified & growing income 36% 8.2% Primark 8.4% Contractual Uplifts 3.5% 57% DFS 4.4% Fixed 3.4% Uplift, Amazon 2.2% 18%, Market 3.4% Review, Argos 3.5% 43%, 3.3% Indexed Eddie Stobart 3.4% Linked, 39%, 3.2% M&S 3.8% 2.9%
Slide 28: Covid brings online growth forward by 4-5 years
Covid brings online growth forward by 4-5 years Source CBRE (January 2021 based on data from Q3 2020). Disclaimer: The information shown in this slide is being presented for information purposes only and must not be relied upon for any purpose 28 whatsoever including but not limited to any investmen
Slide 29: Distribution Assets
Distribution Assets Largest assets Occupier Annualised (by value) rent (£m) Islip 1 Primark 5.8 Dagenham 2 Eddie Stobart 4.1 10 Bedford 3 Argos 4.1 North East & 6 North West 8 Yorkshire Thrapston 4 Primark 4.3 5% 7% Croydon 5 Tesco 1.9 Warrington 6 Amazon 2.1 1 4 Reading 7 DHL 2.3 Midlands 3 Ollerto
Slide 30: Acquisitions - Distribution (FY 2021)
Acquisitions - Distribution (FY 2021) Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B Epsom 3.2 3.8 5.1 5.1 5.1 Walthamstow 10.9 3.7 4.8 8.2 8.2 Colliers Wood 2.5 4.0 5.2 14.9 14.9 Irlam 20.5 4.3 4.9 15.0 15.0 Oldbury 18.1 4.2 4.7 15.0 15.0 Alperton 7.7 4.3 4.8 14.8 9.8 Redditch 5.5
Slide 31: Acquisitions - Long Income (FY 2021)
Acquisitions - Long Income (FY 2021) Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B Rushden 2.0 4.4 4.8 25.0 25.0 Kwik Fit Portfolio (x5) – London 9.6 5.3 5.7 15.0 15.0 Waitrose Portfolio (x5) 62.0 4.4 4.8 20.0 15.0 BP/M&S Roadside Portfolio (x3) 10.8 4.7 5.2 16.0 16.0 TG Convenien
Slide 32: Disposals (FY 2021)
Disposals (FY 2021) Sector Value Yield WAULT (LM share) (years) £m % Expiry 1B Hemel Hempstead Distribution 3.5 4.0 0.7 0.7 Urban Logistics Portfolio (x6) Distribution 57.3 5.3 8.8 7.5 Edinburgh Distribution 3.4 6.5 6.0 2.5 Digbeth Distribution 2.4 6.0 0.0 0.0 Leicester (B&Q) Long Income 26.3 6.2 10
Slide 33: Post Year End Investment activity
Post Year End Investment activity Acquisitions Value (LM share) Yield WAULT (years) £m NIY Reversion1 Expiry 1B HTC Group, Croydon 5.3 4.5 6.2 4.3 4.3 Reynolds, Waltham Cross 43.8 3.5 4.0 23.0 23.0 Deralam Laminates, Dunstable 3.0 4.1 5.2 4.3 4.3 Additional land in Walthamstow 1.0 4.5 4.9 7.3 7.3 Th
Slide 34: Developments Summary
Developments Summary Incurred to date Sq ft PC1 BREEAM Rent/ YOC Total FY FY FY Comment 000 uplift (%) cost 20 21 22 £m £m Goole (funding) 232 Very Good 1.3 5.2 24 11 13 Regional distribution forward fund let to Croda Bedford (Unit 2) 172 Excellent 1.3 7.3 18 5 13 Regional distribution – under offer
Slide 35: Debt Facilities
Debt Facilities1 Lender Facility Maturity2 Expiry (£m) (years) Post year end refinancing activity Wholly-owned portfolio Unsecured RCF Syndicate 225.0 3.0 2024 (with 2x1 year options) Unsecured RCF Wells Fargo 175.0 5.0 2026 (with 2x1 year options) Private Placement 2018 Syndicate 150.0 9.7 2029-34