Spear Reit Ltd. · JSE:SEA
Spear Reit — Investor Presentation (February 2022)
22 slides from Spear Reit's investor presentation, Feb 28, 2022
Slide 1: Pre-Close Investor Presentation and Trading Update
PRE-CLOSE INVESTOR PRESENTATION AND TRADING UPDATE YEAR ENDED 28 FEBRUARY 2022 PRESENTATION DATE: 28 FEBRUARY 2022
Slide 2: Table of Contents
TABLE OF CONTENTS I NT R OD U CTI ON A N D 1. EN V I R ON M E NTA L U P DAT E 2. S P EA R OP E R ATI ON A L U PDAT E 3. F Y 202 2 S A L I E NT D E TA I L S 4. S ECTOR A L P E R F OR M A N CE – Y T D JANUARY 2022 5. OUT LOOK 6. QUESTIONS Pre-Close Investor Presentation / Year ended 28 February 2022 2
Slide 3: Introduction and Environmental Update
INTRODUCTION AND 1. ENVIRONMENTAL UPDATE EMAIL QUESTIONS TO INFO@SPEARPROP.CO.ZA Pre-Close Investor Presentation / Year ended 28 February 2022 3
Slide 4: Strategic Highlights and Focus
1 / INTRODUCTION AND ENVIRONMENTAL UPDATE / MISSION STATEMENT AND STRATEGY STR ATE G IC HIG HLIG HTS A ND FOC US S T RAT E G I C OB J E CT I V E S AC H I E V E D Successful navigation and exit of Covid-19 operating environment HY2022 DPS increased 12.66% (85% payout ratio) Maintained income statemen
Slide 5: Spear Operational Update
SPEAR 2. OPERATION AL UPDATE Pre-Close Investor Presentation / Year ended 28 February 2022 5
Slide 6: FY2022 Operational Update
2 / SPEAR OPERATION AL U PDATE / FY2022 OPERATION AL UPDATE F Y2022 OPE RAT I ON A L U P DAT E RISK LEVE L HY2022 HIGH MEDIUM LOW REDUCING NEUTRALISED OPE RATI ON AL F OC U S A R EA NEGATIVE VACANCY RENTAL CASH LOAN TO COMMERCIAL HOSPITALITY RENTAL CREEP COLLECTION AVAILABILITY VALUE (LTV) REVERSION
Slide 7: FY2022 Salient Details
FY2022 3. SALIENT DE TAILS Y T D JA N UA RY 2022 Pre-Close Investor Presentation / Year ended 28 February 2022 7
Slide 8: Portfolio Snapshot (2022)
3 / FY2022 SALIENT DE TAILS / PORTFOLIO SN APSHOT ( Y TD JANUARY 2022) ASSE TS 32 NUMBER OF PROPERTIES R4.56BN 1.45% R141M R9 606/M2 ASSET VALUE ASSET VALUE AVERAGE AVERAGE PROPERTY GROWTH PROPERTY VALUE VALUATION (FY2021) 6.35% LE T TING AVERAGE IN-FORCE 469 646M2 93.66% 25 MONTHS R96.41/M2/PM ESCA
Slide 9: Portfolio Snapshot (2022): Distribution, TNAV and Debt
3 / FY2022 SALIENT DE TAILS / PORTFOLIO SN APSHOT ( Y TD JANUARY 2022) ON TRACK DISTRIBU TION 6% − 8% 85% − 90% 43.38% 6.56% DPS GROWTH FORECAST PAYOUT RATIO SA REIT COST-TO- SA REIT ADMIN INCOME RATIO COST-TO-INCOME RATIO TANGIB LE NE T ASSE T VALUE (TN AV ) R11.92 3.65% INCREASE R11.50 TNAV FROM F
Slide 10: Collections (as at February 2022)
3 / FY2022 SALIENT DE TAILS / COLLECTIONS (AS AT 11 FEBRUARY 2022) Year-to-date collections have been in line with management’s forecast C OLLECT I ON TO B I LLED Y T D P ER S ECTOR Billings reflect revenue after all credits and deferments including recoveries Budget set in January 2021 Tenant arrea
Slide 11: Letting Activity
3 / FY2022 SALIENT DE TAILS / LE T TING ACTIVIT Y THE TABLE BELOW REFLECTS THE LETTING ACTIVITY FOR THE PERIOD ENDED JANUARY 2022 Expiries and Gross rental Average gross Renewals / Gross new Average gross Rental vacated at expiry expiry rental New lets rental new rental reversion GLA R'000 R/m² GLA
Slide 12: Balance Sheet and Funding Update
3 / FY2022 SALIENT DE TAILS / BAL ANCE SHEE T AND FUNDING UPDATE C OV EN ANTS : Y T D JA N UARY 2022 YTD JANUARY FY2021 COVEN ANTS W E I GHTE D AV E RAGE 26 30 Agreement reached to relax strictest bank covenants for FY2021 and VA RI A BLE E X P I RY M ONTH S M ONTH S FY2022 financial periods W E I G
Slide 13: Sectoral Performance – YTD January 2022
SECTORAL PERFORM ANCE – 4. Y TD JANUARY 2022 Pre-Close Investor Presentation / Year ended 28 February 2022 13
Slide 14: Retail
4 / SECTORAL PERFORM AN CE – Y TD JANUARY 2022 / RE TAIL RETAIL (48 695M2 GLA) All retail assets are classified as convenience retail Consistent performance from convenience retail portfolio Retail portfolio occupancy: 93.58% (Q3: 94.35%) Collections have been 98% versus revenue billed for the perio
Slide 15: Commercial
4 / SECTORAL PERFORM AN CE – Y TD JANUARY 2022 / COMMERCI AL COMMERCIAL (132 674M2 GLA) All Spear’s commercial assets are located in highly attractive and established office nodes in Cape Town Letting demand notably improved since October 2021 Office portfolio occupancy: 86.45% (Q3: 85.3%) Collectio
Slide 16: Industrial
4 / SECTORAL PERFORM AN CE – Y TD JANUARY 2022 / INDUSTRI AL INDUSTRIAL (260 229M2 GLA) Spear’s industrial portfolio has been resilient during the period, with a number of new lets and relets taking place Industrial portfolio occupancy: 96.67% (Q3: 97.02%) Collections have been 96% versus revenue bi
Slide 17: Hospitality
4 / SECTORAL PERFORM AN CE Y TD JANUARY 2022 / HOSPITALIT Y HOSPITALITY (28 048M2 GLA) 15 ON ORANGE: EARNINGS CONTRIBUTION D OUBLE TREE BY HILTON, CAPE TOWN Disposed effective 1 February 2022 176-bps LTV reduction 15 ON ORANGE HOTEL, CAPE TOWN As announced on SENS on 18 March 2021, management has co
Slide 18: General Business and Portfolio Update
4 / SECTORAL PERFORM AN CE Y TD JANUARY 2022 / GENERAL BUSINESS AND PORTFOLIO UPDATE GE NE R AL B U SIN ESS A ND PORT FOL IO U PDATE Trading conditions have shown improvement across the sectors Spear is invested in Ongoing implementation of PV solar rollout and water augmentation Industrial and Reta
Slide 19: Outlook
5. OUTLOOK Pre-Close Investor Presentation / Year ended 28 February 2022 19
Slide 20: Outlook
5 / OUTLOOK OUTLOOK Business operations have continued to strengthen as management’s view of the post pandemic road ahead is optimistic and offers growth opportunities for Spear Management’s active and hands-on strategy continues to pay off Semigration to the Western Cape will directly and indirectl
Slide 21: Outlook (Continued)
5 / OUTLOOK OUTLOOK (CONTINUED) Management believes the Western Cape will lead the post- pandemic real estate recovery given the strong real estate fundamentals of the Western Cape and the increased urbanisation rate of middle to high LSM groups Spear remains well capitalised with no liquidity const
Slide 22: Thank You – Questions?
6. QU E S T ION S T H ANK YOU QU ES T I ON S ? EMAIL QUESTIONS TO INFO@SPEARPROP.CO.ZA LIVE Q&A WITH CEO AFTER PRESENTATION Pre-Close Investor Presentation / Year ended 28 February 2022 22