Londonmetric Property Plc · LSE:LMP
Londonmetric Property — Q2 2023 Earnings Presentation
30 slides from Londonmetric Property's earnings presentation, Nov 23, 2023
Slide 1: Half Year Results
Half Year Results Half Year Ended 30 September 2023 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Overview
Overview Sector calls, asset selection and income focus delivering attractive rental growth • Macro economic backdrop stabilising Logistics – Inflection point for inflation and interest rates 72% of portfolio Urban logistics: 43% – Real estate capital markets continue to recalibrate at different spe
Slide 4: Financial Highlights
Financial Highlights Half Year to 30 September 2023 Earnings Yield1 Income Statement Sept 2023 Sept 2022 Change 5.1% EPRA Earnings £53.1m £50.2m +5.8% Dividend yield: 5.3%2 Dividend cover EPRA Earnings (pps) 5.25p 5.14p +2.1% 109% Dividend (pps) 4.8p 4.6p +4.3% 2022: 112% Equivalent yield (18 months
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 30 Sept 2023 30 Sept 2022 Change Net rental income Net rental income £76.9m £72.1m +6.7% +7% +25% over 3 years Administrative costs £(8.6)m £(8.6)m - Income leakage Net Finance costs £(16.0)m £(13.6)m +17.6% 0.9% EPRA Earnings £53.1m £50.2m +5.8% Sept 22: 1.1% EPRA Earnings (pps) 5
Slide 7: Balance Sheet
Balance Sheet1 30 Sept 2023 31 March 2023 Change Property portfolio2 £3,177.0m £3,000.9m Cash £28.2m £36.5m Debt £(973.7)m £(1,030.5)m Fair value of derivatives £16.0m £11.1m Net Liabilities £(53.0)m £(50.7)m IFRS Shareholders’ Funds £2,194.5m £1,967.3m EPRA Adjustments £(16.0)m £(11.1)m EPRA Net Ta
Slide 8: Debt
Debt1 30 September 31 March Debt maturity profile 2023 2023 (£m)3 Total facilities £1,420m £1,408m 900 Gross Debt £974m £1,031m 800 Re-financing risk Hedging2 99.5% 93.2% 700 mitigated until FY27 LTV 29.5% 32.8% 600 500 Average cost 3.3% 3.4% of debt 325 400 Average maturity2 6.2 years 6.0 years 120
Slide 9: Contracted Income Progression
Contracted Income Progression Mar-23 Asset Disposals CTPT Sep-23 PPE Market Contractual Void Pro-forma Management Disposals Uplifts to Uplifts to ERV2 Mar 261 Mar 261 1. See occupier activity slide for further detail 2. Void ERV of investment portfolio 9
Slide 10: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 11: Market overview
Market overview As long term investors, we look to pick the right place to invest even in dislocated markets • Investment backdrop remains macro dominated Five year swap1 – Heightened inflation and elevated debt risk impacting liquidity 415bps Down from peak of 540bps – Inflection point for inflatio
Slide 12: Our Portfolio
Our Portfolio Aligned to structurally supported sectors, prioritisingasset selection, patience and strong conviction Value1 EY2 EY mvmt TPR3 H1 ERVg (£m) (%) (bps) (%) (%) Portfolio split as at 23 Nov 2023 30 Sept 2023 Urban 1,369 5.3 7 3.6 2.7 Urban, 43.4% Regional 590 5.5 11 3.1 1.7 Mega 314 5.5 9
Slide 13: Distribution
Distribution Aligned to a structurally supported sector enjoying favourable demand/supply dynamics Urban Regional Mega Value £2,273m FY 23: £2,185m Occupancy 99% Mega & regional: 100% WAULT 11.4 years • 126 assets • 13 assets • 3 assets FY 23: 11.7 years • £63m rent (£8.90 psf) • £28m rent (£6.90 ps
Slide 14: NNN Long Income
NNN Long Income Operationally light assets let to high quality occupiers with long and strong income characteristics Convenience NNN Retail Trade & DIY Value £744m Occupancy 100% WAULT 12 years • £15m rent (£19.50 psf) • £17m rent (£18.60 psf) • £7m rent (£8.90 psf) NIY1 • NIY1 6.2% • NIY1 5.0% • NI
Slide 15: M&A – CT Property Trust
M&A – CT Property Trust1 Contracted rent (pa) All H1 acquisitions through CTPT, no direct property acquisitions £17.7m 86% subject to market rent • £285 million2 portfolio acquired at 6.3% discount Occupancy – Highly complementary portfolio of 33 assets 97% – 86% logistics & long income3 WAULT: 7 ye
Slide 16: Occupier Market & Our Activity
Occupier Market & Our Activity The wind is at our back not in our face Like for like income growth (6m) • Structural tailwinds continue +2.9% – Logistics demand normalised after record years 66 transactions – Demand from online, convenience & onshoring Uplifts on rent reviews & regears • Our occupie
Slide 17: Actively improving portfolio quality
Actively improving portfolio quality Improving the portfolio’s amenities and sustainability GRESB rating • Asset management improving estate – Adding new amenities to portfolio 76 (2022: 64 ) Peer group average: 65 – Solar projects in H1: +0.6MWp, increased portfolio to 4.2MWp Solar PV Pipeline – 40
Slide 18: Outlook
LONDONMETRIC lay PROPERTY PLC OUTLOOK
Slide 19: Outlook
Outlook Inflection points require capital allocation to be on the right side of change • Challenging macro investment environment is settling – UK consumer remains resilient but beginning to ‘lift & coast’ – Inflation rates falling creating an inflection point for interest rates – Stable outlook wil
Slide 20: Appendices
LONDONMETRIC lay PROPERTY PLC APPENDICES
Slide 21: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Rent Average Area (Share) Surplus/(Deficit) CVg2,4 Occupancy NIY1 (years) Rent Uplifts Rent As at 30 September 2023 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.4 314.0 2.3 0.7 0.8 100.0 4.2 16.3 16
Slide 22: Income Breakdown
Income Breakdown Delivering long term ,reliable, repetitive & growing income with diversification Top 10 Occupiers WAULT Occupier diversity 25% of rent 11.3 years By income 3.8% Primark >20 yrs, 0-3 yrs, Leisure & Grocery & 4.1% 9.3% 10.9% Other, 6% Roadside, 9% 3.1% Amazon 3.4% 16-20 yrs, Business
Slide 23: Inflation captured through index linked rent reviews
Inflation captured through index linked rent reviews Warrington Our index linked reviews across our portfolio have a Percentage of inflation capture by LMP rent reviews Bedford range of collars and caps typically between 1% to 4% over a five year period: 100% 97% 93% • At 22% inflation over a five y
Slide 24: Total Property Returns (LondonMetric)
Total Property Returns1 (LondonMetric) 210.0 190.0 Urban +77.3% 170.0 Regional +61.2% 150.0 LMP All +51.2% Long +27.6% 130.0 Income Mega +20.2% 110.0 IPD2 +8.3% 90.0 FY18 FY19 FY20 FY21 FY22 FY23 H1 FY24 1. Source: MSCI, Rebased 2018 = 100. 24 2. MSCI Benchmark
Slide 25: 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)1 (rebased to 100)2 160 11.0 320 400 Dividend H1 H2 10.0 H1 H2 300 140 Share price 9.0 280 350 120 8.0
Slide 26: Net Zero Carbon Ambition
Net Zero Carbon Ambition #1 Operations to be net #2 Developments to be #3 Buildings to be zero by end 2023 net zero by 2030 net zero by 2035 Assets where we have control & Reduce emissions from Help occupiers to lease NZC ready management will be NZC by end development & offset residual buildings, o
Slide 27: Further Portfolio Data
Further Portfolio Data Top 10 assets Occupier Annualised Geography (by value) rent (£m) (All portfolio) Islip 1 Primark 6.0 Other Dagenham 2 Eddie Stobart 4.1 2% North West Bedford 3 Argos 4.1 7% North East Warrington 4 THG 4.1 & Yorkshire 4&7 Croydon 5 Tesco 3.0 4% 10 Bedford 6 Movianto 2.8 Warring
Slide 28: Disposals – H1 FY 2024
Disposals – H1 FY 2024 Name Sector Geography Value (LM share) WAULT (years) £m NIY (%) Expiry 1B DHL, Solihull Urban Logistics Midlands 20.50 4.2% 5.6 5.6 HTC, Croydon Urban Logistics London & South East 8.10 2.9% 2.3 2.3 Fenchurch Court, Oxford Urban Logistics London & South East 4.60 5.0% 4.6 1.2
Slide 29: Debt Facilities (30 September 2023)
Debt Facilities (30 September 2023) Lender Facility Drawn3 Maturity1 Debt cost4 Expiry (£m) (£m) (years) (%) Unsecured RCF (2021) Syndicate 225 125 2.6 Variable 2026 Unsecured RCF (2021) Wells Fargo 175 55 4.6 Variable 2028 Unsecured RCF (2022) Syndicate 275 50 2.1 Variable 20252 Private Placement (
Slide 30: 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 8.0 6.0 38 5.5 36 5.2 35 3.5 3.5 6.4 6.5 5.0 5.0 35 3.5 3.4 6.2 5.0 4.7 4.7 3.3 6.0 4.6 33 4.5 32 6.0 32 5.6 4.3 3.1 5.2 30 30 4.8 30 29 3.0 2.9 4.7 4.0 2.8 4.2 2.6
LondonMetric Property — Q2 2023 Earnings Presentation on 6ix