Slide 1: HY20 Results Presentation
Abacus Property Group HY20 Results Presentation 18 February 2020
Slide 2: Abacus platform HY20 overall
Abacus platform HY20 overall WEIGHTED TOTAL PROFORMA AVERAGE FFO ASSETS GEARING CAP RATE A$3.3bn1 6.09%1,3,4 26.8%1,2 $67.3m 17.8% on FY19 20bps on FY19 270bps on FY19 3.0% on HY19 NET STATUTORY FFO EPS DPS TANGIBLE PROFIT ASSETS 10.59cps 9.45cps $3.41ps1 $82.1m 6.0% on HY19 2.2% on HY19 2.4%
Slide 3: HY20 highlights
HY20 highlights Abacus is a strong asset backed, annuity style investment house, with focus on ownership/management of Office and Self Storage assets Balance sheet transformation with 92% of investment assets deployed into key sectors Achieved over A$1 billion Self Storage exposure1 Over $500
Slide 4: Strategic priorities
Strategic priorities Abacus continues to successfully execute on its stated strategy to pursue long term value enhancing investments and realise non-core assets 201 Elizabeth Street, Sydney NSW – 32% interest acquired in a consortium with Charter Hall for $202 million1 99 Walker Street, North
Slide 5: Balance sheet allocation
Balance sheet allocation DECEMBER 20191 JUNE 2019 $3.3 billion of Total Assets2 $2.8 billion of Total Assets2 Core Non-core Core Non-core 92% 8% 87% 13% $2.8 billion $252 million $2.3 billion $334 million Office $1,520m Residential $252m Office $1,078m Residential $334m Self Storage $1,058m Self Sto
Slide 6: Portfolio composition transitions
Portfolio composition transitions Capital recycling into key focus sectors of Office and Self Storage Total Assets1 ($ billions) 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Office Self Storage Retail 2 Residential FY18 HY19 FY19 HY20 1. Includes post balance date acquisitions 2. Includes equity accounted invest
Slide 7: Financial results
Financial results
Slide 8: HY20 key financial metrics
HY20 key financial metrics Result highlights in HY20: KEY FINANCIAL METRICS HY20 HY19 FFO up 3% to $67.3 million – Commercial portfolio FFO flat at $33.5 million AIFRS statutory profit $82.1m $127.8m – Self Storage portfolio FFO up 14% to $26.9 million Established2 Self Storage portfolio of $716
Slide 9: Balance sheet – HY20
Balance sheet – HY20 NTA per security grew by 2.4% to $3.41 during HY20 Revaluations as a result of: capital raising, redeployment of KEY FINANCIAL METRICS HY20 FY19 capital into key sectors, income growth and cap rate compression Balance sheet gearing at 31 December 2019 was 16.2% NTA per sec
Slide 10: Investment portfolio – valuation
Investment portfolio – valuation Valuation uplift across the investment portfolio HY20 FY19 Excluding acquisition costs and straight-lining, the revaluation HY20 FY19 weighted weighted process for Abacus resulted in a net increase in investment Valuation Valuation property values for HY20 of app
Slide 11: HY20 Operating Performance
HY20 Operating Performance Office Self Storage Super convenience and other Retail
Slide 12: Office portfolio – snapshot
Office portfolio – snapshot OFFICE $1,520m1 91.9% 3.2% Occupancy1 LFL rental growth 3.7 years 5.62% WALE1 WACR2 $689 psm $376 psm Average CBD1,2 rent Average fringe3 rent 1. Post settlement of 99 Walker Street, North Sydney 2. North Sydney, Sydney and Melbourne 3. Fringe Sydney and Melbourne Kingsga
Slide 13: Portfolio additions – Office (201 Elizabeth Street)
Portfolio additions – Office 201 ELIZABETH STREET, SYDNEY NSW Acquired a 32% interest for $202 million1 in partnership with Charter Hall in August 20192 Acquisition reflects an equivalent market yield of 5.0% and c.$16,000 per square metre of NLA The building comprises circa 38,934sqm NLA over
Slide 14: Portfolio additions – Office (99 Walker Street)
Portfolio additions – Office 99 WALKER STREET, NORTH SYDNEY NSW Exchanged in November 2019, settled in January 2020 for $311 million1 Acquisition reflects an equivalent market yield of 5.0% and c.$16,100 per square metre of NLA Offering 21 levels of office accommodation over circa 19,295sqm of
Slide 15: Portfolio additions – transport infrastructure
Portfolio additions – transport infrastructure Recent Sydney and North Sydney acquisitions are positioned to benefit from new Metro connectivity Recent Acquisitions: T 99 Walker Street, North Sydney W L E 201 Elizabeth Street, Sydney sam M Existing Infrastructure: L Light Rail W T Heavy Rail L
Slide 16: Office portfolio – diversification metrics
Office portfolio – diversification metrics Recent transactions deliver geographic and asset class diversification, long term stability and improved quality of income Geographic diversification Asset quality HY201 HY201 SA ACT 5% Other 4% 6% VIC NSW 27% 47% B Grade A Grade 41% 53% QLD 17% 1. Post set
Slide 17: Self Storage – snapshot
Self Storage – snapshot Abacus, a long term owner of a portfolio of Self Storage locations across Australia and New Zealand SELF STORAGE $1,058m1 6.4% 1.2% Passing yield2 RevPAM growth2,3 88.6% $254 Occupancy2 RevPAM2 42 $287 Average length of stay Average rent psm2 (months)4 1. Portfolio value incl
Slide 18: Self Storage – operating performance
18 $210 $220 $230 $240 $250 $260 $270 $280 $290 0% 1% 2% 3% 4% 5% 6% 7% Sep 14 Sep-14 Dec 14 Dec-14 Mar 15 Mar-15 Jun 15 Jun-15 Rental rate psm Sep 15 Sep-15 Dec 15 Dec-15 Mar 16 Mar-16 Jun 16 Jun-16 Sep 16 Sep-16 Dec 16 Dec-16 Mar 17 Mar-17 Rent roll growth (quarter on quarter) Jun 17 Jun-17 Sep 17
Slide 19: Portfolio additions – Self Storage
Portfolio additions – Self Storage ACQUISITIONS DEVELOPMENTS Disciplined, metro acquisition strategy with a strong pipeline Developments at Brookvale and Macquarie Park completed, – 96% (by value) metro/suburban delivering c. 6,700 and 3,700sqm of premium Sydney NLA respectively $89 million of
Slide 20: Retail – super convenience and other
Retail – super convenience and other RETAIL $210m1 $210m 96.8% Abacus investment Occupancy 4.9 years 5.83% WALE WACR ASSET VALUE2 NLA KEY TENANTS STATUS ($m) (SQM) Ashfield, 207 24,945 Coles, Aldi, Core hold – Sydney NSW Woolworths, Kmart co-ownership Lutwyche, 142 24,450 Coles, Aldi, Core hold – Br
Slide 21: Non-core asset disposals
Non-core asset disposals Legacy exposure realisations Land and mortgages – equity exposure continues to be reduced – Continue to recycle capital from legacy investments – Refinanced or sold over $150 million of residential land and mortgages (including Riverlands1) – At Camellia and our remaining
Slide 22: Sustainability – embedded in how we conduct business
Sustainability – embedded in how we conduct business Actively exploring opportunities Integration of ESG across the business to drive long term and managing risks sustainable growth Solar installed Analytics to optimise 32 building Self Storage performance Improved sites System Sustainability report
Slide 23: Summary & outlook
Summary & outlook
Slide 24: Outlook
Outlook Abacus is a strong asset backed, owner and manager with a focus on the Office and Self Storage sectors Execution of our stated strategic objectives: – Increasing our investment in quality Office assets in selected markets with potential for income growth – Increasing our investment in Self
Slide 25: Abacus Property Group HY20 Data Pack
Abacus Property Group HY20 Data Pack
Slide 26: Contents
Contents Abacus Property Group Overview 27 Financial Performance 28-32 Investment Portfolio 33-38 Developments 39 Glossary 40 Important information 41 26 Abacus Property Group | HY20 Data Pack
Slide 27: About Abacus
About Abacus Abacus Property Group (ASX:ABP), is a diversified Australian REIT with an investment portfolio concentrated in the Office and Self Storage sectors. We invest capital in real estate opportunities to deliver superior long term returns and maximise securityholder value. Abacus’ key focus i
Slide 28: Segment balance sheet
Segment balance sheet PROPERTY PROPERTY OTHER HY20 FY19 ABACUS BALANCE SHEET INVESTMENT DEVELOPMENT ($m) ($m) ($m) ($m) ($m) Commercial investment properties 1,340.3 1,340.3 1,221.0 Self Storage investment properties 972.7 972.7 841.5 PP&E, equity accounted and other investments, 140.5 1.7 69.5 211.
Slide 29: Segment earnings
Segment earnings SELF PROPERTY COMMERCIAL OTHER HY20 TOTAL HY19 TOTAL STORAGE DEVELOPMENT Rental income 49.2 42.8 92.0 85.6 Finance income1 35.2 35.2 24.2 Fee income 2.8 2.8 6.1 Share of profit from equity accounted investments2, 3 2.9 0.5 2.3 5.7 8.9 Sale of inventory 8.8 6.3 15.1 15.7 Other income
Slide 30: Net tangible asset reconciliation
Net tangible asset reconciliation HY20 FY19 Consolidated Group net assets 2,235.7 1,965.4 Less Total external non-controlling interest (4.7) (4.7) Total stapled securityholders’ interest in equity 2,231.0 1,960.7 Less Intangible assets, right-of-use property assets and goodwill (35.1) (32.4) Deferre
Slide 31: Debt facilities
Debt facilities CAPITAL MANAGEMENT METRICS HY20 FY19 Total bank debt facilities $1,048m $1,048m Total bank debt drawn $568m $711m Term to maturity 4.9yrs 5.3yrs % hedged 63% 50% % hedged of total debt facilities 34% 34% Weighted average hedge maturity 2.1yrs 2.6yrs Average cost of debt – drawn 4.0%
Slide 32: Debt maturity profile as at 31 December 2019
Debt maturity profile as at 31 December 2019 ($’m) 300 Available bank facility Drawn bank debt 44.3 200 174.8 100 185.7 176.8 150.0 150.0 100.0 55.2 11.0 0 0.0 HY21 FY21 HY22 FY22 HY23 FY23 HY24 FY24 HY25 FY25 HY26 FY26 32 Abacus Property Group | HY20 Data Pack
Slide 33: Investment portfolio metrics
Investment portfolio metrics POTFOLIO METRICS SELF INVESTMENT PORTFOLIO SECTOR DIVERSIFICATION1 OFFICE OTHER TOTAL HY20 STORAGE Value1,2 ($m) Industrial and Other Retail 1,520 250 1,058 2,828 7% 1% No. of assets1 24 7 813 112 Office NLA (sqm)1,4 147,286 60,223 366,927 574,436 54% Self Storage 38% WA
Slide 34: Office lease expiry profile
Office lease expiry profile Office Portfolio1 Lease Expiry by Rent 28% 18% 17% 14% 9% 9% 5% Monthly CY20 CY21 CY22 CY23 CY24 CY25+ 1. Post settlement of 99 Walker Street, North Sydney 34 Abacus Property Group | HY20 Data Pack
Slide 35: Portfolio revaluations
Portfolio revaluations Revaluation process for Abacus resulted in a net increase in the investment properties values for HY20 of approximately $38.9 million excluding acquisition costs and straight-lining Average cap rate across the Abacus Commercial1 and Self Storage portfolios has decreased to 5.6
Slide 36: Self Storage metrics
Self Storage metrics PERFORMANCE METRICS AUS NZ HY20 FY19 PERFORMANCE METRICS HY20 HY19 Total Assets 66 15 811 701 Storage revenue 38.4 33.0 NLA (sqm) 288,931 77,996 366,927 320,901 Other revenue 4.3 3.9 Occupancy 88.6 88.5 88.62 88.52 Total revenue 42.8 36.9 Rental Rate (psm) A$286 A$288 A$2872 A$2
Slide 37: Self Storage compound growth
Self Storage compound growth Portfolio value compound growth of 17.8%1 pa since HY14 1000 100 Portfolio size ($m-lhs) Portfolio size (no. of assets-rhs) 900 90 800 80 700 70 600 60 500 50 400 40 300 30 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 37 Abac
Slide 38: Self Storage development pipeline
Self Storage development pipeline We will continue to identify additional development opportunities within our existing portfolio and strategically reinvest subject to market conditions 47,500sqm of identified net lettable area to be developed over the short to medium-term Anticipated return on inve
Slide 39: Residential developments, land and mortgages
Residential developments, land and mortgages INTEREST PRIMARY PROJECT TYPE EQUITY LOAN TOTAL RETURNS RATE SECURITY RCL Portfolio NSW1 JV/Loan $45.1m $132.3m $177.4m 1st Mortgagee 50% profit share Doonside NSW Loan - $11.1m $11.1m 1st Mortgagee 50% profit share Investment Funding Portfolio NSW Loan -
Slide 40: Glossary
Glossary TERM DEFINITION TERM DEFINITION AICD Australian Institute of Company Directors KW Kilowatt AIFRS Australian International Financial Reporting KWph Kilowatt per hour Standards BPS Basis points LFL Like for like CPS Cents per stapled security NABERS National Australian Built Environment Ratin
Slide 41: Important information
Important information The information provided in this document is general, and may not be suitable for the specific purposes of any user of this document. It is not financial advice or a recommendation to acquire Abacus Property Group securities (ASX: ABP). Abacus Property Group believes that the i