Spear Reit Ltd. · JSE:SEA
Spear Reit — FY2019 Earnings Presentation
33 slides from Spear Reit's earnings presentation, February 2019
Slide 1: Financial Results Presentation
Financial Results Presentation for the year ended 28 February 2019
Slide 2: Table of Contents
Table of Contents 1 2 3 4 5 Welcome Spear Highlights Financial Active Asset & Introduction to Date FY 2019 Performance & Capital FY 2019 Management 6 7 8 9 Portfolio Subsequent Outlook Questions Overview Transactions Financial Results Presentation for the year ended 28 February 2019
Slide 3: Welcome & Introduction
1 Welcome & Introduction Financial Results Presentation for the year ended 28 February 2019 1
Slide 4: Mission Statement
To be the leading Western Cape- focused REIT and to consistently Mission grow our distribution per share Statement ahead of inflation and within the top quartile of our peer group. Financial Results Presentation for the year ended 28 February 2019 2
Slide 5: Spear to Date
2 Spear to Date Financial Results Presentation for the year ended 28 February 2019 3
Slide 6: Spear to Date
Spear to Date Asset value: R3.81 billion Asset value: Market cap: R3.37 billion R1.98 billion Asset value: Market cap: R3.13 billion R1.82 billion Asset value: Market cap: R1.45 billion R1.58 billion Asset value: Market cap: R1.4 billion R942 million Market cap: R800 million % Growth % Growth % Grow
Slide 7: Highlights FY 2019
3 Highlights FY 2019 Financial Results Presentation for the year ended 28 February 2019 5
Slide 8: Highlights 2019 Financial Year - Portfolio Snapshot
Highlights 2019 Financial Year - Portfolio Snapshot Assets 30 Number of R3.8 bn Asset Value 21.62% Asset Value R127 m Average R9 465/m2 Average property Growth property value properties valuation Letting 8.07% 402 652 m2 98% 30 months R85 /m2/pm Average in-force GLA Occupancy WALE Average rental esc
Slide 9: Highlights 2019 Financial Year - Financial Performance
Highlights 2019 Financial Year - Financial Performance Distribution 86.42 10.09% 41.73 cents 44.69 cents 21.59% cents FY2019 Distribution FY2019 Interim FY2019 Final Net Cost to Distribution distribution distribution Income growth per share Tangible net asset value (TNAV) 4.6% R11.67 R12.12 4.7% TNA
Slide 10: Spear Total Return
Spear Total Return SEA vs SAPY Total return (TR) Annualised 150% 34% Spear (TR) 13.69% 140% -6% SAPY (TR) -2.79% 130% 120% 110% 100% 90% 80% 10-Nov-16 10-Dec-16 10-Jan-17 10-Feb-17 10-Mar-17 10-Apr-17 10-May-17 10-Jun-17 10-Jul-17 10-Aug-17 10-Sep-17 10-Oct-17 10-Nov-17 10-Dec-17 10-Jan-18 10-Feb-18
Slide 11: Financial Performance FY 2019
Financial 4 Performance FY 2019 Financial Results Presentation for the year ended 28 February 2019 9
Slide 12: Summary Income Statement
Summary Income Statement Consolidated and Group Audited Group Audited Feb-19 Feb-18 separate statement of R’000 R’000 comprehensive income Property revenue 426 122 304 055 Other income 8 607 12 540 for the year ended 28 February 2019 Total revenue 434 729 316 595 Property operating and management ex
Slide 13: Distribution Reconciliation
Distribution Reconciliation Reconciliation between R’000 Earnings (profit attributable to owners of the parent) 270 389 earnings and distributable Adjusted for: earnings Fair value adjustments to investment properties (111 702) for the year ended 28 February 2019 Straight-lining of leases adjustment
Slide 14: Summary Balance Sheet
Summary Balance Sheet Consolidated and Group Audited Group Audited Feb-19 Feb-18 separate statement R’000 R’000 of financial position ASSETS Non-current assets 3 808 427 2 975 850 for the year ended 28 February 2019 Current assets 108 291 251 488 Total assets 3 916 718 3 227 338 EQUITY AND LIABILITI
Slide 15: Funding
Funding LTV Average Cost of Funding Funding Maturity 39.58% 9.01% 24 BPS 10% 12% FY2023 FY2020 R156 m R186 m R1.522 bn R1.522 bn 25-month average maturity Cost Cost 9% 9.05% 35.43% 64.57% 44% 34% 24 26 months months Variable Fixed FY2022 FY2021 R539 m R983 m R667 m R513 m Financial Results Presentat
Slide 16: Active Asset & Capital Management
Active Asset 5 & Capital Management Financial Results Presentation for the year ended 28 February 2019 14
Slide 17: Active Asset & Capital Management - Acquisitions & Disposals
Active Asset & Capital Management - Acquisitions & Disposals Disposed Disposed 142 Bree Street Tyger Manor R150 m R75 m 3% yield 8% yield Acquired Debt settled Acquired Debt settled No. 2 Estuaries R48 m Talana Close R26 m R98 m R52.8 m 9.22% yield 9.16% yield Disposed Capital Raised FY18 Capital Ra
Slide 18: Portfolio Overview
6 Portfolio Overview Financial Results Presentation for the year ended 28 February 2019 16
Slide 19: Top 5 Properties by Value
Top 5 Properties by Value Total Value R1.92 bn Total GLA 178 073 m2 Portfolio 50.39% Mega Park, 2 Long Street, Sable Square, UES DoubleTree by Northgate Park, Bellville Cape Town Century City Hilton, Woodstock Brooklyn Value (R’000) Value (R’000) Value (R’000) Value (R’000) Value (R’000) 441 022 426
Slide 20: Sectoral split by GLA, Value & Revenue
Sectoral split by GLA, Value & Revenue for the period ended 28 February 2019 Residential Residential 2% 2% Hospitality 7% 8 000 m2 Hospitality R74 m 28 153 m2 R505 m 13% 9% 51% 25% Retail Industrial Industrial 34 648 m 2 207 354 m2 15% R956 m 402 652 m 2 R3.8 bn Property split Retail Property split
Slide 21: Letting Activity
Letting Activity Spear began the period with an opening vacancy of 6 334m² and with 91 359m² expiring during the year. Management has successfully renewed and re-let 96 560m2 at a positive reversion of 8.03%. The table below reflects the letting activity of the period: Gross Expiries and Gross expir
Slide 22: Tenant & Vacancy Profile
Tenant & Vacancy Profile Analysis of the property portfolio An analysis of the property portfolio in respect as at 28 February 2019 of tenant profiles is provided below Total vacancy Total Number of tenants 7 992 m2 = 1.98% 100% 399 (Due to aggressive letting and successful tenant retention programm
Slide 23: Lease Expiry by GLA
Lease Expiry by GLA Lease Expiry Profile based on GLA as at 28 February 2019 Total Total Total Total Total Total Total 2% 0% 13% 31% 18% 8% 28% 100% 90% 80% 70% 60% 50% 40% 30% 20% 23% Average 10% 0% Vacant Monthly * Expires Expires * Expires Expires Expires 3/2019 - 2/2020 3/2020 - 2/2021 3/2021 -
Slide 24: Top Tenants by GLA
Top Tenants by GLA FY2019: 144 347m2 = 35.85% of Fund 25 k/m2 20 k/m2 15 k/m2 10 k/m2 5 k/m2 0 k/m2 Consol Liquor Distell Nampak 15 on Lindsay Imperial Multi Room MWEB Auction Runners Orange Manufacturing Management Nation Autograph Collection Financial Results Presentation for the year ended 28 Feb
Slide 25: Risk Management - Sustainability Update
Risk Management Sustainability Update Renewable Water energy continuity Assets earmarked for Phase 1 rollout 12 Water continuity investment R7 million Combined system size 4.2 MWh Capital deployed to date R2 million Renewable energy investment R49 million Water use and transport licences In process
Slide 26: Development & Redevelopment Projects - Sable Square Phase 2
Development & Redevelopment Projects Organic Portfolio Growth Sable Square - Phase 2 Physical address: Cnr Bosmansdam and Ratanga Roads, Milnerton Planned GLA to be added: 12 000 m2 Sector: Retail & Residential Development cost: R200 m Target yield: 10% Status: Target commencement FY2019 Financial R
Slide 27: Development & Redevelopment Projects - 78 on Edward
Development & Redevelopment Projects Organic Portfolio Growth 78 on Edward Physical address: 78 Edward Street, Tyger Valley GLA added: 3 500 m2 Sector: Mixed Use Development cost: R89 m Target yield: 9% Status: Final completion Q2 FY2020 Financial Results Presentation for the year ended 28 February
Slide 28: Development & Redevelopment Projects - Marine Place
Development & Redevelopment Projects Organic Portfolio Growth Marine Place - Paarden Island Physical address: Marine Drive, Paarden Island GLA to be developed: 52 000 m2 Sector: Mixed Use Development cost: R1.4 bn Target yield: 10% Status: Target commencement TBA Financial Results Presentation for t
Slide 29: Subsequent Transactions
7 Subsequent Transactions Financial Results Presentation for the year ended 28 February 2019 27
Slide 30: Radnor Road
Radnor Road Main tenant: Super Group Consumer Physical address: 20 Radnor Road GLA: 12 880 m2 Sector: Industrial - Logistics Acquisition price: R112 m Acquisition yield: 9.10% WALE: 38 months Financial Results Presentation for the year ended 28 February 2019 28
Slide 31: Outlook
8 Outlook Financial Results Presentation for the year ended 28 February 2019 29
Slide 32: Outlook
Outlook High Quality Real Active Asset FY 2020 Estate Portfolio Management Guidance Portfolio value R 3,8 billion Fully internally managed fund Distribution for FY20 to be 6% - 8% higher than FY19 distribution per share GLA of 402 652m2 Led by industry veterans with successful track record Growth su
Slide 33: Thank You & Questions?
9 Thank You & Questions? Financial Results Presentation for the year ended 28 February 2019 31