Alina Holdings Plc · LSE:ALNA
Alina — The Local Shopping REIT — IPO Roadshow (September 2007)
35 slides from Alina's IPO roadshow presentation, September 2007
Slide 1: the Local Shopping reit plc, September 2007
the Local Shopping reit plc September 2007
Slide 2: Presentation Team
Presentation Team • Age 46 (20 years experience in real estate) • Quintain Estates and Development (CEO) Mike Riley • HVB Real Estate Capital (Joint MD) Joint CEO • De Groot Collis Finance (MD) • Chesterton (Partner) • Hillier Parker Nick Gregory • Age 42 (14 years experience in real estate) Joint C
Slide 3: Introduction
Introduction Local Shopping is an overlooked sector of the property market. We believe our professional management will bring significant out performance and enhanced shareholder returns. 2
Slide 4: Our Market - Local Shopping
Our Market - Local Shopping • Local Shopping – Neighbourhood, Convenience, Top up, Traditional, Specialist – Complementary to Tesco’s, Sainsbury etc • Future trends – Ageing society, congestion charging, sustainability, Green issues, car parking • Market / Supply – £25bn – Broadly neutral supply • L
Slide 5: Offer Highlights (cont'd)
Offer Highlights (cont’d) • Accretive model – average purchase yield 7.25%(not portfolios), funding @ 6 - 6.25% • 4.75% based on issue price of 174p dividend fully covered from recurring profits by Sept 08 with a progressive policy of a min of CPI • Capital growth – Asset management opportunities •
Slide 6: Offer Highlights (cont'd)
Offer Highlights (cont’d) • Imperfect market – Yes • Higher Risk – No • Economies of scale – Finance – Costs • Internal management structure • Strong board of independent NEDs investing in IPO – Grahame Whateley (Castlemore) – Andrew Cunningham (Grainger Plc) – Nick Vetch (Big Yellow Group Plc) 5
Slide 7: Acquisition Criteria
Acquisition Criteria • Sustainable locations • Attractive Yield Accretive to • Sourced off-market FFO or EPS • Low & affordable rents (<£30 psf ZA) • Asset management opportunities • Take advantage of any distressed sellers Capital growth & • Vacant and part-vacant trading opportunities • Generally
Slide 8: LSR Key Features
LSR Key Features Competitive advantages • Agent network – local knowledge • Speed • Certainty to vendor • REIT/ Listed status – providing acquisition currency • CGT benefits • Professional management & efficient systems • Economies of scale – property management & finance • No competition at nationa
Slide 9: Finance – Debt facilities
Finance – Debt facilities Barclays Capital • Amount £69m • 60% LTV • Margin 75 bp • Term 9.5 years • 100% hedged at 4.85% HSBC • Amount £150m • Margin 60 to 75 bp • Term 8.5 yrs • Current drawings £25m • Hedging available £54m RBS • Amount £10m • 2 year loan (364 with a 12 month term out) • Margin 1
Slide 10: LSR Team
LSR Team Mike Riley Nick Gregory Joint CEO Joint CEO Chris Moulden Vickie Bill Heaney Acquisitions and Whitehouse Company Asset FD Secretary & Management Residential Investment Sarah Jelly, Andrew Robson Peter Thomas Lara Whateley Kate Schimanski Barbara Kalukiewicz lana Vassiljeva Jason Cook Laura
Slide 11: History of LSR
History of LSR • Founded by Castlemore Capital in 2005 (first acquisition April 2005) • Portfolio £223m (July 2007) • Portfolio growth – chart ignores revaluations £ Millions 250 200 150 100 50 0 Nov-05 Nov-06 Jun-05 Jul-05 Jan-06 Jun-06 Jul-06 Jan-07 Jun-07 Jul-07 Apr-05 May-05 Aug-05 Sep-05 Oct-05
Slide 12: National Agency Network
National Agency Network Acquisition Agents Managing Agents • Stiles Harold Williams • Monk and Partners • Erinaceous • Mason and Partners • Jordan's • Alder King • CBRE Southampton • Cushman and Wakefield Valuers • Mark Atkins Ass • Allsops • Charterwood • Edward Symmonds • Bidwell's • Bidwells • Ro
Slide 13: Map of property locations by urban area
10 most populous urban areas 11—25 most populous urban areas Perth Greater Kirkcaldy Glasgow 6 or more properties Broxburn Leith 3—5 properties Edinburgh Hamilton Dalkeith Wishaw 1—2 properties Kilmarknock Ayr Tyneside Belfast Teeside West Yorkshire Kingston- Greater upon-Hull Manchester Liverpool B
Slide 14: LSR Properties – Edinburgh
LSR Properties – Edinburgh Comments: • 35 properties •Majority purchased off-market •Purchase price £4.86m (7.16%) •Current value £5.68m (6.28%) • Combined rent £357k pa • Very low tenant default • All units let and only three vacancies in past 2 yrs (all re-let within 3 months) • 7 valuable A3/A5 u
Slide 15: LSR Market (cont'd): Rental and capital performance
LSR Market (cont’d) Rental and capital performance Total Return: High Yield Standard Shops vs All Standard Shops All Standard Standard Shops High Yield Standard Shops 2,100 2100 1900 1,900 1700 1,700 Index: 1981 = 100 1500 1,500 1300 1,300 Index: 1981 = 100 1100 1,100 900 900 700 700 500 500 300 300
Slide 16: Portfolio – £223m (as at 23 July 2007)
Portfolio – £223m (as at 23 July 2007) Capital Value No. of Properties Value Yield £0 – £100k 41 £3.5m 6.60% £101 – £200k 186 £28.6m 6.73% £201 – £500k 191 £59.9m 6.48% £501k – £1m 84 £60.4m 6.29% £1 – £3m 32 £51.1m 6.43% £3m + 4 £19.0m 5.73% Total 539 £222.5m 6.39% • At 28 March - £207.7m (Allsops)
Slide 17: Regional Spread by ERV
Regional Spread by ERV (as at 23 July 2007) East Anglia Yorkshire & Humberside 5% East Midlands 10% 5% Wales West Midlands 6% 8% Scotland NW 12% 9% North 6% SW 12% London & SE 27% 16
Slide 18: User Types by ERV
User Types by ERV (as at 23 July 2007) 0.88% 1.00% 0.40% 9.07% A1 – shops 0.54% 5.18% A2 – financial A3 – cafes 6.00% A4 – pubs 0.11% A5 – take aways B1 – offices 9.06% 57.83% B2 – industrial B8 – storage C3 – Residential 9.94% D2 – leisure Misc • A3/A5 – strong demand/tight planning • B1 – strong d
Slide 19: A1 Users by ERV
A1 Users by ERV (as at 23 Jul 2007) Non-A1 Misc Clothing Food Furniture/Homeware Hairdresser Beauty Charity Discount Travel Convenience Jewellery/Gifts Newsagent Electrical Off Licence Dry Cleaner Chemist Optician Florist Photos Pet Shop Footwear Stationery Sports Hardware Cards Amusements Pawnbroke
Slide 20: Tenant Grade – By ERV
Tenant Grade – By ERV (as at 23 July 2007) Government 1.6% National Multiple 20.9% Regional Multiple Individual 5.2% 53.0% Local Company 19.6% Top 5 Tenants – 3.6% of Rent Roll (£536k pa) • Thomas Cook Ltd: 1.2% of portfolio rent – 13 units • Somerfield Stores Ltd : 0.7% of portfolio rent – 1 unit •
Slide 21: Lease Expiry Profile – By ERV
Lease Expiry Profile – By ERV (as at 23 July 2007) Vacant - Deliberate 0.4% Vacant Vacant - Residential 3.6% 1.4% Rent Guarantee 1.9% 0-3 yr 27.3% 9yr+ 27.5% 3-6 yr 17.7% 6-9 yr 20.2% • Weighted average 7.2 years (with breaks 6.1 years) 20
Slide 22: Affordable Rents: Average Rents per Tenant Type
Thousands pa £0 £5 £10 £15 £20 £25 £30 £35 Amusements Discount Chemist Pet Shop Clothing Furniture/Homeware • Average rent – £11.74 psf Photos Affordable Rents A3 Average Rents per Tenant Type Optician Travel Convenience Electrical Food A2 Footwear Charity Hardware • Average rent per A Class user –
Slide 23: Asset Management – Routine
Asset Management – Routine Rent Reviews • 14% of leases on 3 yr review patterns (mirroring our leasing policy) • Average uplift at review is 14.3% • No third party applications – less cost Lettings/lease renewals • Average uplift at renewal/new lettings is 13.9% • No 1954 Landlord & Tenant Act forma
Slide 24: Asset Management – Exciting!
Asset Management – Exciting! Many properties have asset management angles • Upper parts: residential conversions, extensions and sales • Adjoining land: site assembly, developing on surplus land, buying in adjoining units • Reconfigurations: creating larger/smaller units for tenants • Positive leasi
Slide 25: Seed Portfolio – Opportunities
Seed Portfolio – Opportunities Surplus land Ransom opportunity • Parade in Uckfield – well located in improving • Open centre in Sudbury – purchase £4.0m (Mar- town 06) • Vacant unit under offer will improve reversion • Opportunities to grow rents/improve tenant mix • Upper floors (resi) to refurbis
Slide 26: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Upper parts Upper parts • Open shopping centre in Braintree • Single let shop in Goole – purchase £300k • Vacant offices above retail units (Dec 05) • Planning received for 5 flats. • Surrender of part: tenant repairs upper floor, new • Planning submitted for
Slide 27: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Upper parts Upper parts • Georgian building in a Tewkesbury conservation area • Purchased £830K (January 2007) • Let to night club, opportunity to take early • Opportunity to utilise land on existing site in St surrender Neots • Potential for conversion to res
Slide 28: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Positive leasing strategy Positive leasing strategy • Parade in Blackheath, purchase £750k (Oct 05) • 3 units in Eastbourne, purchase £385k (Jun 05) • 3 x flats refurbished & let • Tenant in financial difficulty • Corner unit surrendered and re-let to establis
Slide 29: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Positive leasing strategy Positive leasing strategy • Single unit in Greenock, purchase £360k (Jan 06) • Single A5 unit in Kirkcaldy High Street let at £28k • Former tenant paying rent £25k pa in receivership pa • Unit re-let to Celtic FC Plc for £29k pa on 5y
Slide 30: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Positive leasing strategy Positive leasing strategy • Retail unit in Barton upon Humber purchased • Single A1 unit in Leigh let at £6,500 pa May 06 for £230k (NIY 8.7%) • Tenant absconded • Private carpet retailer paying £20,500 pa. • Unit re-let in 3 months t
Slide 31: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Asset management (Multi-let Properties) Asset Management (Multi-let Properties) • Retail arcade in Bishops Stortford purchased • Local retail scheme in Newbury purchased Sept March ‘06 for £1.7m (6.5%) ’05 for £1.142m (7.3%) • ERV on purchase £27.50 ZA • 3 lea
Slide 32: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Asset management (Lease Extension) Asset Management (Rent Guarantee) ) • Cheveley Park Shopping Precinct, Durham • Multi-let parade acquired in Anderson St, Airdrie • A5 occupier wishes to sell goodwill in business • Vacant A3 unit with 1yr rent guarantee at £
Slide 33: Opportunities – Buying
Opportunities – Buying Buying vacant Buying off market • 3 retail units under Barratts development in • Corner of early 80’s office in SW1 Chelmsford • Purchase £450k (Dec 06) • Purchase £1.15m (Jul 05) • 20 year lease to established café • 1 leaseback, 2 vacant with 12m rent guarantees • We own a 9
Slide 34: Seed Portfolio – Opportunities (cont'd)
Seed Portfolio – Opportunities (cont’d) Positive Disposal strategy Positive Disposal strategy • Vacant property purchased in Havelock St, • 6 Main St, Wishaw purchased for £105k (Jan ’06) Glasgow for £300k (Oct ’06) at NIY 8.9% • Let immediately to Estate Agent for £27k pa on • Unit under offer to o
Slide 35: Contacts
Contacts LSR • Mike Riley tel: +44 (0)20 7187 4402 mike.riley@LSReit.co.uk • Nick Gregory tel: +44 (0)20 7187 4401 nick.gregory@LSReit.co.uk • Vickie Whitehouse tel: +44 (0)20 7187 4411 vickie.whitehouse@LSReit.co.uk 34
The Local Shopping REIT — IPO Roadshow (September 2007) on 6ix