Real Estate Credit Investments Limited · LSE:RECI
Real Estate Credit Investments — Investor Presentation (January 2022)
33 slides from Real Estate Credit Investments's investor presentation, January 2022
Slide 1: Real Estate Credit Investments Limited Company Update January 2022
REAL ESTATE CREDIT INVESTMENTS LIMITED Company Update January 2022 w ww.recreditinvest.com Ticker: RECI LN
Slide 2: Background
Background Real Estate Credit Investments (RECI) is a closed-ended investment company which originates and invests in real estate debt secured by commercial real estate in Western Europe, focusing primarily on the United Kingdom, France and Germany. RECI is externally managed by Cheyne Capital’s rea
Slide 3: Contents
Contents Page Background 2 I nv estment Opportunity 4 Key Quarter Updates 5 Portfolio Snapshot 7 Recent Deals 13 Sectoral Analysis 15 ESG Analysis 21 Repaid Deals 25 Lev erage Review 28 Maintaining a Stable Div idend 29 Summary 31 3
Slide 4: Summary: Investment Opportunity
Summary : Investment Opportunity Attractive returns from low LTV credit exposure to UK and European commercial real estate assets • W eighted Average LTV of 62.6% as at 31 December 2021 • Predominantly large, well capitalised, and experienced institutional borrowers Quarterly dividends delivered
Slide 5: Key Quarter Updates
Key Quarter Updates • Portfolio – No defaults in the portfolio – Migration of portfolio to senior lending in keeping with the compelling opportunity set therein – 11 new deals completed (£152m of commitments) since 31 March 2021, showing strength of opportunity post the initial impact of Covid • Cas
Slide 6: Summary: Structural Strength - Positioned to Capitalise on Opportunities
Summary: Structural Strength - Positioned to Capitalise on Opportunities • Having successfully navigated through the challenges posed by the COVID-19 pandemic, RECI is well positioned to address future market uncertainty, with a strong portfolio profile and modest leverage comprising, – Senior loans
Slide 7: 31 December 2021 Snapshot
Cc fiteantats 31 December 2021 Snapshot f-heyme-
Slide 8: Current Position
Current Position • NAV at end of December 2021 was £1.515. • RECI announced an interim dividend for this financial year of 3p in December 2021. • 3 deals fully repaid in the quarter, while 4 new commitments were made in the quarter. 30-Sep-21 31-Oct-2021 30-Nov-2021 31-Dec-2021 Bilateral Loans & Bon
Slide 9: Portfolio Composition
Portfolio Composition Portfolio by Loan Type1 (Funded Fair Value) • RECI’s investment portfolio was valued at £373.0m as at 31 December 2021. Core • The bilateral loan portfolio of £295.4m comprises 35 loans, Core+ with a WA LTV of 66.5%, a WA unlevered yield of 8.9% Value Add / Transitional Bilater
Slide 10: Portfolio Composition – Bilateral Deals
Portfolio Composition – Bilateral Deals1 35 £295.4m 66.5% 10.0% 1.7 yrs Loans FV of Portfolio WA LTV WA Yield 2 WA Life • £295.4m portfolio comprising 35 loans, predominantly senior and mezzanine loans in the UK, France and Spain • Undrawn loan commitments of £170.8m as at 31 December 2021 Loan Brea
Slide 11: Portfolio Composition – Public Market Bond Portfolio
Portfolio Composition – Public Market Bond Portfolio 29 £77.6m 47.6% 11.9% 3.9 yrs WA Life Bonds Fair Value WA LTV WA Yield 1 • RECI is also invested in listed real estate bonds (mainly CMBS). By Geography • Bond investments are typically senior secured (1st lien) credits at conservative LTV collate
Slide 12: Position Analysis – Top 10 by Commitment as at 31 December 2021
Position Analysis – Top 10 by Commitment as at 31 December 2021 FV of Funded LTV LTV Investment Description Commitment Loan Type Manager Comment Amount Attach Detach Strategy Lux ury ret ail and apart ment s in super-prime Paris locat ion. Sponsor has receiv ed bids for t he asset significant ly abo
Slide 13: Recent Deals
Recent Deals Balto Palmera Sabina Purpose Built Student Deal Description Housebuilder Deal Description Deal Description Residential Accommodation (“PBSA”) Instrument Senior Loan Instrument Senior Loan Instrument Senior Loan Total RECI Total RECI Total RECI £20.6m £7.1m £22.6m Commitment Commitment C
Slide 14: Recent Deals
Recent Deals FSH Brent Cross Airport Purpose Built Student Deal Description Hotel Deal Description Deal Description Hotel Accommodation (“PBSA”) Instrument M ezzanine Loan Instrument Senior Loan Instrument Senior Loan Total RECI Total RECI Total RECI £17.6m £5.7m £20.4m Commitment Commitment Commitm
Slide 15: Portfolio Analysis
Cc fiteantats Portfolio Analysis f-heyme- 15
Slide 16: Sectoral Analysis Overview
Sectoral Analysis Overview RECI investment portfolio remains diverse and granular. Mixed Use 3%2% Hotel 4% 5% 24% Office 5% Student Accommodation 5% Housebuilder Healthcare 8% Residential 17% Leisure 12% Retail 16% Co-Living Logistics Industrial The following pages provide a detailed narrative on th
Slide 17: Sectoral Analysis – Mixed-Use
Sectoral Analysis Mixed-Use (24% of GAV*) The majority of RECI’s exposure to mixed-use assets is to value-add and development loans where the sources of value are typically from the delivery of residential units alongside office assets. Main Positions 1. A senior loan (50% LTV, comprising of an orig
Slide 18: Sectoral Analysis – Hospitality (Hotels)
Sectoral Analysis Hospitality (Hotels) This asset class is facing a long period of severely curtailed occupancy levels. The end to local lockdowns is likely to be followed by a slow resumption of international travel, leaving the sector facing weak demand for a prolonged period of time. RECI’s expos
Slide 19: Sectoral Analysis – Student Accommodation
Sectoral Analysis Student Accommodation (12% of GAV) Student sector has continued to show resilience during COVID characterised by higher levels of local students offsetting the lower levels of overseas students seen as a result of the last 24 months of disruption. Student market is expecting a retu
Slide 20: Sectoral Analysis – Housebuilders
Sectoral Analysis Housebuilders (8% of GAV) The company’s exposure to French and UK housebuilders is secured by operations of the builder, as well as the assets for UK housebuilders. Exposure is to the mid- market sector with average selling prices below £600,000 per home in the UK and under €260,00
Slide 21: ESG Analysis
Cc fiteantats ESG Analysis f-heyme- 21
Slide 22: ESG
ESG PHILOSOPHY Cheyne Capital and its Real Estate team are committed to operating its business in a progressively responsible manner, achieved through the incorporation of high standards of governance and investment stewardship. Cheyne aim for the consideration, assessment and integration of environ
Slide 23: ESG – Deal Examples
ESG – Deal Examples Earlsfield, UK The project will be a car-free development and will provide a cycle hub, promoting more cycling in the local area. The subject scheme comprises 109 units (35% of 310) affordable units that will be offered with priority to local people and key workers. The Sponsor i
Slide 24: ESG – Sustainability Next Steps
ESG Sustainability – Next Steps Specifically in respect of sustainability, this is considered as part of our investment decision making process for Real Estate funds, based upon our Sustainability Risks disclosure (https://www.cheynecapital.com/media/2267/cheyne-manco-esg-policy-may- 2021.pdf.) In r
Slide 25: Repaid Deals
Cc fiteantats Repaid Deals f-heyme- 25
Slide 26: Repaid Deals
Repaid Deals Housebuilder • A mezzanine loan (30% - 75% LTV) to an established SME housebuilder was repaid, £25.2m, in full following a successful sale of the company by the shareholders. Serviced Apartments • A senior loan (62% LTV) to a market leading institutional investors was repaid, €12.1m, in
Slide 27: Appendix
Cc fiteantats Appendix f-heyme- 27
Slide 28: Leverage Review
Leverage Review Balance Sheet / Company Recourse Leverage RECI’s current gross leverage is 30% of NAV (against a maximum permitted leverage of 40%). RECI currently utilises its recourse leverage with flexible repurchase agreements (REPO) on its liquid bonds. RECI has maintained its financing relatio
Slide 29: Continuing to deliver an attractive and stable dividend
Continuing to deliver an attractive and stable dividend RECI’s dividend policy: it is the intention of the Company to pay a stable quarterly dividend. Since 2013, this has remained at a fairly constant yield of 7% on the Company’s NAV • The Company announced its second interim dividend of 3p in Dece
Slide 30: Earnings and Dividends Reconciliation
Earnings and Dividends Reconciliation • Gross to Net reconciliation for the quarter year ended 31 December 2021 Absolute £m Per Share % Perf Annualised Int Inc Market Bonds 0.9 0.00 1.0% Int Inc Self Orig Bonds 2.4 0.01 2.80% Int Inc Self Orig Loans 4.2 0.02 4.80% Finance costs -0.4 0 -0.50% Other i
Slide 31: RECI: Summary
RECI: Summary RECI is well positioned to participate in the healthy pipeline of Cheyne investments, and to deliver on its overarching objective to provide ordinary shareholders with attractive and stable returns, primarily in the form of quarterly dividends. Focused on senior secured credit, Strong
Slide 32: Definitions
Definitions • Asset types: – Core – assets that benefit from having long term income – Core + – assets that benefit from having strong current income, but do require some measure of asset management to optimise its income profile and term – Value add / transitional – assets that require asset manage
Slide 33: Important Information
Important Information This document, w hich has been issued by Cheyne Capital Management (UK) LLP (“CCM ”), comprises the w ritten materials/slides for a presentation concerning Real Estate Credit Investments Lim ited (the “Company”). This presentation does not constitute or form part of any offer o
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