Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — H1 FY2022 Earnings Presentation
68 slides from Stor-age Property Reit's earnings presentation, November 2021
Slide 1: Interim Results Presentation
STOR-AGE PROPERTY REIT INTERIM RESULTS PRESENTATION PERIOD ENDED 30 SEPTEMBER 2021 STOR-AGE PROPERTY REIT LIMITED 1
Slide 2: Presentation Outline
PRESENTATION OUTLINE Page Introduction 4 Financial review 12 Strategy 21 Property review 24 Environmental, Social and Governance 46 Operations review 52 Outlook 60 STOR-AGE PROPERTY REIT LIMITED 2
Slide 3: Annexures
ANNEXURES Page A: Our customers 62 B: Digital marketing – quick facts 64 C: Last mile delivery hub – typical delivery cycle 65 D: Overview of UK & European self storage industry 66 STOR-AGE PROPERTY REIT LIMITED 3
Slide 4: Introduction
INTRODUCTION STOR-AGE PROPERTY REIT LIMITED 4
Slide 5: Highlights
HIGHLIGHTS Interim dividend up 8.85% to 56.60 cents per share Self storage rental income and net property operating income up 13.1% and 20.1% respectively Like-for-like self storage rental income up 11.8% (SA 11.6%; UK 23.8%) Like-for-like SA and UK average rental rate up 7.0% and 6.1% respectively
Slide 6: Snapshot
SNAPSHOT Listing date November 2015 JSE sector Speciality REITs Profile Highly specialised, low risk, income paying self storage REIT Self storage 10 publicly traded self storage REITs universe (US: 5, UK: 2, EU1: 1, Aus: 1, SA: 1) Market R6.0 billion² capitalisation Total South Africa United Kingdo
Slide 7: Investment Case
INVESTMENT CASE • Niche growth sector globally, driven by societal trends – consumerism, densification and an increasingly mobile population • Sector resilience continues to be demonstrated – despite the Covid-impacted operating environment and the Resilient sector with negative impact of the July u
Slide 8: Share Price Performance – Relative to SAPY
SHARE PRICE PERFORMANCE – RELATIVE TO SAPY Consistently outperformed the listed property index and SA REITs since listing in 2015, with ever improving liquidity 5-year performance1: positive divergence relative to SAPY, outperforming by c.187% 170 45 March 2020 Covid-19 declared a global pandemic 40
Slide 9: Share Price Performance – Relative to UK Peers
SHARE PRICE PERFORMANCE – RELATIVE TO UK PEERS Share price performance in GBP since listing in 2015 Stor-Age has a c.40% exposure to GBP assets through Storage King Stor-Age is significantly diversified and entrenched within developed markets. This geographic underpin is coupled with an attractive y
Slide 10: Price / NAV Comparison – SAPY and UK Peers
PRICE / NAV COMPARISON – SAPY AND UK PEERS Publicly traded self storage REITs trading at premiums to NAV Self storage REITs trading at premiums to NAV • Self storage businesses which operate sizable portfolios benefit from a unique operational platform overlay which is embedded ‘on top of’ the real
Slide 11: Self Storage REITs Trading at Premiums to NAV
SELF STORAGE REITS TRADING AT PREMIUMS TO NAV It is not uncommon for listed self storage companies to trade at significant premiums to NAV as set out in the table below: Company Listing details Premium to NAV¹ Safestore² Main board of the LSE⁶ 109% Big Yellow² Main board of the LSE 83% Shurgard² Eur
Slide 12: Financial Review
FINANCIAL REVIEW STOR-AGE PROPERTY REIT LIMITED 12
Slide 13: Occupancy and Tenant Profile
OCCUPANCY AND TENANT PROFILE OCCUPANCY PROFILE SA 30 Sep 21 30 Sep 20 GLA m2 Occupied m2 % occupied GLA m2 Occupied m2 % occupied Like-for-like 352 900 309 900 87.8% 350 700 302 300 86.2% Other 7 700 3 200 42.0% 15 100 13 100 86.9% Total 360 600 313 100 86.8% 365 800 315 400 86.2% 2021 excludes Wate
Slide 14: Trading Results – SA
TRADING RESULTS – SA 30 Sep 21 30 Sep 20 % change LFL Developments Total LFL Developments Total LFL Total Rm Rm Rm Rm Rm Rm Rental income Self storage 219.6 0.2 219.8 196.7 - 196.7 11.6% 11.7% Other 4.3 - 4.3 3.7 - 3.7 14.7% 14.7% Ancillary income 8.8 0.1 8.9 7.8 - 7.8 12.3% 13.5% Sundry income 0.8
Slide 15: Trading Results – UK
TRADING RESULTS – UK 30 Sep 21 30 Sep 20 % change LFL Acquisitions Total LFL Acquisitions Total LFL Total £’000 £’000 £’000 £’000 £’000 £’000 Rental income Self storage 8 357 223 8 580 6 753 - 6 753 23.8% 27.1% Other 271 - 271 252 - 252 7.5% 7.5% Ancillary income 862 8 870 674 - 674 27.9% 29.1% Sund
Slide 16: Distribution Analysis
DISTRIBUTION ANALYSIS 30 Sep 2021 30 Sep 2020 Rm Rm Net property operating income - SA 179.9 154.0 Net property operating income - UK 145.4 116.8 Rental guarentee and underpin 1.9 11.2 Management fees 3.0 1.9 Administration expenses² (41.2) (33.5) Share of JV losses (0.7) - CCIRS 8.6 14.9 Interest i
Slide 17: Balance Sheet – Summarised
BALANCE SHEET – SUMMARISED 30 Sep 31 Mar 30 Sep 31 Mar 2021 2021 2021 2021 Rm Rm Rm Rm LIABILITIES ASSETS Non-current liabilities Non-current assets Bank debt 1 445 1 347 Investment properties 7 953 7 567 ZAR 405 304 SA Freehold 4 661 4 542 GBP 1 040 1 043 SA Leasehold 110 113 Derivatives mark-to-ma
Slide 18: Capital Structure
CAPITAL STRUCTURE 30 Sep 2021 ZAR facilities GBP facilities GBP facilities Total facilities Rm £m Rm Rm Total debt facilities 1 555.0 76.7 1 559.3 3 114.3 Undrawn debt facilities 410.3 16.1 328.0 738.3 Gross debt 1 144.7 60.5 1 231.3 2 376.1 Gross debt net of cash held in debt facilities 887.0 60.5
Slide 19: Currency Hedging
CURRENCY HEDGING HEDGING OF NET INVESTMENT IN STORAGE KING 30 Sep 2021 31 Mar 2021 30 Sep 2020 £m £m £m Investment property 168.7 155.3 141.7 Leasehold liabilities (12.2) (12.6) (13.0) Net investment property 156.5 142.7 128.7 Bank debt (60.5) (56.8) (56.8) Other assets 8.4 8.0 8.2 Deferred tax (5.3
Slide 20: Currency Hedging (continued)
CURRENCY HEDGING (continued) HEDGING OF GBP EARNINGS Forward Forward Collar Average Average Period contracts rate contracts floor Cap % cover R/£ % cover R/£ R/£ FY22 75% 23.35 15% 20.94 22.36 FY23 85% 23.65 5% 21.41 22.60 FY24 75% 23.47 - - - Hedging policy based on projected forward GBP earnings 1
Slide 21: Strategy
STRATEGY STOR-AGE PROPERTY REIT LIMITED 21
Slide 22: Strategy
STRATEGY Strategic planning to 2025 • Highly strategic in planning – completed in 5-year cycles • Successful track record of executing 5-year strategies to 2015 and 2020 • Business strategy traditionally led by property strategy – now complemented by digital strategy • Multiple research projects und
Slide 23: Strategy (continued)
STRATEGY (continued) Stor-Age is a sector specialist with deep product understanding, significant emerging and first-world market experience, and boasting a successful track-record of managing self storage assets. The business benefits from outstanding real estate expertise, an excellent dual-market
Slide 24: Property Review
PROPERTY REVIEW STOR-AGE PROPERTY REIT LIMITED 24
Slide 25: Portfolio Overview
PORTFOLIO OVERVIEW 76 The portfolio comprises 54 properties in SA and 22 properties in the UK SA PORTFOLIO UK PORTFOLIO² 54¹ properties 22¹ properties R4.8bn R3.2bn 360 600m² GLA 88 500m² GLA 26 200 tenants 12 200 tenants 54 22 1. Includes 50% share of Sunningdale, Cresta (commenced trading in Octob
Slide 26: Portfolio Analysis
PORTFOLIO ANALYSIS Total number of Total property value Total number of tenants Total GLA properties R8.0bn 38 400 449 100m2 76 Value of properties Number of tenants GLA Number of properties 20% 29% 40% 32% 68% 60% 71% 80% South Africa UK STOR-AGE PROPERTY REIT LIMITED 26
Slide 27: South Africa
SOUTH AFRICA Acquisitions • Two acquisitions secured in Cape Town during the period • Silver Park Self Storage – northern suburbs › 7 700m² GLA, R60.1m, acquired in November 2021 • GreenCube Self Storage – southern suburbs › 5 500m² GLA, R48m, due diligence complete and transfer process underway Dev
Slide 28: Cresta – Completed Development
CRESTA – COMPLETED DEVELOPMENT Located prominently on the corner of Weltevreden Road and Valley Lane, the new BMW Northcliff Stor-Age Cresta sits directly opposite the open parking area to the Cresta Shopping Cresta Shopping Mall. Mall Virgin Active Cresta The property will comprise an estimated 7 4
Slide 29: South Africa – Development Pipeline
SOUTH AFRICA – DEVELOPMENT PIPELINE • Dominated by high profile big box properties in outstanding locations • Ten properties offering an estimated 59 200m² GLA at an approximate total cost of R850m • Five new properties secured › Pinelands › Paarden Eiland › Kramerville › Durban 1 (subject to due di
Slide 30: Nedbank Development JV
NEDBANK DEVELOPMENT JV Overview • Terms agreed with Nedbank Corporate and Investment Bank, acting through Nedbank Property Partners, to enter into a JV subject to the finalisation of formal contract documentation • To develop two high profile properties in the existing Stor-Age pipeline at a total c
Slide 31: Bryanston – Pipeline Development
BRYANSTON – PIPELINE DEVELOPMENT William Main Road With a prominent location at Grosvenor Crossing, the property is positioned at the Nicol Drive intersection of William Nicol Drive and Main Road in Bryanston. The property enjoys high visibility to passing traffic. The property will comprise an esti
Slide 32: Morningside – Pipeline Development
MORNINGSIDE – PIPELINE DEVELOPMENT Located prominently alongside the Wedge Shopping Centre along Rivonia Road in Kelvin Drive Morningside. The property will comprise an estimated 7 400m2 GLA on completion (on full fit-out). Summit Road Wedge Shopping Centre The property is being developed in the Ned
Slide 33: Pinelands – Pipeline Development
PINELANDS – PIPELINE DEVELOPMENT Located in Pinelands in Cape Town, the property is situated on the corner of Howard Howard Centre Drive and Gardeners Way, opposite Howard Centre. The property will comprise an estimated 7 000m2 GLA on completion (on full fit out). The Forest Drive existing building
Slide 34: Paarden Eiland – Pipeline Development
PAARDEN EILAND – PIPELINE DEVELOPMENT Located prominently in the service road to Marine Drive, the property enjoys high exposure to the busy Marine Drive which carries significant traffic volume in both Milnerton directions. Marine Drive The property will comprise an estimated 4 600m2 GLA over five
Slide 35: Kramerville – Pipeline Development
KRAMERVILLE – PIPELINE DEVELOPMENT Sandton South Road Located in Kramerville (Sandown), the property is situated on the corner of Dartfield Road and Commerce Crescent. The property benefits from having access on grade to all four levels and will comprise an Dartfield Bowling Road estimated 4 700m2 o
Slide 36: Last Mile Delivery Hubs
LAST MILE DELIVERY HUBS Partnership with Picup • Convergence of e-commerce, last mile delivery technology and prime located self storage properties • Three last mile hubs in operation – Craighall, Centurion and Kempton Park • Fourth last mile hub scheduled for roll-out H2 FY22 • Picup – provides log
Slide 37: Storage King
STORAGE KING Overview • 6th largest UK self storage brand – operating 29¹ properties throughout England, with a bias towards the South East and East • Post UK market entry in 2017 › Acquired four operators, comprising eight properties, portfolio of owned properties grown from 14 to 22¹, valued at R3
Slide 38: Chester – Portfolio Expansion
CHESTER – PORTFOLIO EXPANSION Storage King Chester is located to the east Chester Retail Park Matalan of Chester City Centre and enjoys good B&M Homestore To Chester City Centre visibility at the entrance to a Tesco Ford Supermarket. Land Rover The extension includes the development of a Storage Kin
Slide 39: Doncaster – Portfolio Expansion
DONCASTER – PORTFOLIO EXPANSION Storage King Doncaster is located 1.5km to the south east of Doncaster City Centre. To Doncaster The property enjoys good visibility on a City Centre roundabout as one approaches the local Football stadium football stadium and the Lakeside Village Storage King Outlet
Slide 40: Bedford – Portfolio Expansion
BEDFORD – PORTFOLIO EXPANSION Storage King Bedford is located to the east of Bedford City Centre and enjoys good visibility on Goldington Road which links to a large retail park with tenants such as Tesco, Waitrose, Wicks and Home Base. To Bedford City Centre The extension includes the development o
Slide 41: Moorfield Development JV
MOORFIELD DEVELOPMENT JV • Development JV entered with Moorfield in October 2020 to develop a portfolio of self storage assets focused on London and the South East • Initial portfolio value of £50 million and the potential to increase to £100 million • Key terms › Equity capital contributions in the
Slide 42: Case Study: Hounslow – New Development
CASE STUDY: HOUNSLOW – NEW DEVELOPMENT Storage King Hounslow is a greenfield development located to the west of London, inside the M25 Orbital Motorway (M25) and situated in close proximity to Heathrow Airport. The site is located on a prominent intersection on Great South-West Road (A30) and the Ca
Slide 43: Case Study: Hounslow – New Development
CASE STUDY: HOUNSLOW – NEW DEVELOPMENT Layout STOR-AGE PROPERTY REIT LIMITED 43
Slide 44: Case Study: Hounslow – New Development
CASE STUDY: HOUNSLOW – NEW DEVELOPMENT Design • The design aims to create a sensitive external appearance, taking account of the existing surrounding buildings as well as its visual prominence in relation to the Chester Park green belt to the east • The high visibility location allows for the buildi
Slide 45: Case Study: Hounslow – New Development
CASE STUDY: HOUNSLOW – NEW DEVELOPMENT Location To the M25 Safestore Cranford Heathrow To Central London Storage King Heathrow Airport Big Yellow Hounslow Hatton Cross Station Safestore Feltham Sustainability, energy and landscaping • Self storage buildings benefit from a low environmental impact wi
Slide 46: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STOR-AGE PROPERTY REIT LIMITED 46
Slide 47: ESG
ESG Strategy and framework • Revised and clearly defined ESG strategy and reporting framework adopted in FY21 • Aligns our Vision and Core Values with relevant UN Sustainable Development Goals (SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD) • Through our ESG framework we co
Slide 48: Environment – Low Impact Buildings
ENVIRONMENT – LOW IMPACT BUILDINGS For newly acquired trading properties in SA and the UK, Stor-Age aims to: • Install solar PV panels where not already installed • Install LED lighting where not already installed • Implement waste management initiatives • Install electric vehicle charging stations
Slide 49: Aviva – Sustainability-Linked Loan Facility
AVIVA – SUSTAINABILITY-LINKED LOAN FACILITY • UK debt restructuring process completed in October 2021 – first ‘green’ sustainability-linked loan facility entered into with Aviva Investors (‘Aviva’) • £21 million Term Loan, 7-year tenure, with a margin of 2.3% spread over the Treasury Gilt and an all
Slide 50: Social
SOCIAL Overview • In line with our Core Values of Excellence, Sustainability, Relevance and Integrity, Stor-Age supports a range of charities and Non-Profit Organisations (NPO’s) • Supporting our Core Value of Relevance › We aim to be relevant in the lives of our employees, tenants and in the commun
Slide 51: Social (continued)
SOCIAL (continued) Charities / NPO’s supported • Santa Shoebox Project › Annual collection and distribution of personalised gifts of essential items for underprivileged children throughout SA › Supported for ten consecutive years › Promoted the initiative on digital platforms, billboards and vehicle
Slide 52: Operations Review
OPERATIONS REVIEW STOR-AGE PROPERTY REIT LIMITED 52
Slide 53: The Platform
THE PLATFORM • Highly sophisticated and scalable dual-market platform – can be leveraged into new markets • Unique benefit relative to UK peers – cost effective SA head office infrastructure, homogenous product, same language and similar timeline Operations platform – • Vastly experienced management
Slide 54: Platform Overview
PLATFORM OVERVIEW STOR-AGE PROPERTY REIT LIMITED 54
Slide 55: Platform Driven by Data
PLATFORM DRIVEN BY DATA Optimise: • Supply/demand dynamics • Rental escalations • Unit configurations • Rental rates • Discounting Contact Centre Data Tenant Data • Quality control – ongoing call reviews • Leasing characteristics • Respond to needs Revenue • Length of stay • Improve sales with train
Slide 56: Extensive Digital Marketing Capabilities
EXTENSIVE DIGITAL MARKETING CAPABILITIES Highly skilled, specialised and scalable with significant capabilities to react to changing digital landscapes Accredited digital marketing agency Google and Facebook partners Data driven approach led by specialists Organic, paid and social media Expert SEO a
Slide 57: Demand Creation Capability
DEMAND CREATION CAPABILITY Driving conversions through audience targeting enhanced by AI machine learning Social media Google My Beta Search YouTube Business Top funnel and Zero click Differential Machine learning Life changing re-targeting advantage vs best practice events • Understanding customers
Slide 58: Digital First – Digital Marketing Platform
DIGITAL FIRST – DIGITAL MARKETING PLATFORM The opportunity • Highly skilled in-house digital marketing capability • Google and Facebook are global platforms – Stor-Age has Proven capability Deep industry to capitalise on specific audience agency status with both fast-changing knowledge for digital l
Slide 59: Digital First – Digital Marketing Platform (continued)
DIGITAL FIRST – DIGITAL MARKETING PLATFORM (continued) Key features SPANISH CASE STUDY¹ • Full service digital marketing agency, focused on the self storage sector – launched in July 2020 and quickly building a Significant performance improvements while overcoming customer base language barrier • St
Slide 60: Outlook
OUTLOOK • Stor-Age delivered an excellent operating and financial performance despite the Covid-impacted operating environment and the negative impact of the July unrest in SA • As we navigate a ‘post-Covid new normal’ we remain conscious of the risks and economic outcomes which are by no means cert
Slide 61: Annexures
ANNEXURES A. Our customers B. Digital marketing – quick facts C. Last mile delivery hub – typical delivery cycle D. Overview of UK and European self storage industry STOR-AGE STOR-AGE PROPERTY PROPERTY REITLIMITED REIT LIMITED 61
Slide 62: Our Customers
OUR CUSTOMERS Annexure A GEOGRAPHIC REPRESENTATION1 RESIDENTIAL / COMMERCIAL TENANT MIX BY GLA2 20 Gauteng Residential Western Cape Commercial 1 36 42 Eastern Cape 7 KwaZulu-Natal 4 Free State 64 United Kingdom 26 GEOGRAPHIC FOCUS RESIDENTIAL vs COMMERCIAL Primary focus = high profile locations Resi
Slide 63: Our Customers (continued)
OUR CUSTOMERS (continued) Annexure A AVERAGE LENGTH OF STAY – SA AVERAGE LENGTH OF STAY – UK < 6 Months < 6 Months 21 28 30 31 6 - 12 Months 6 - 12 Months 12 > 12 Months > 12 Months 2 - 3 Years 10 2 - 3 Years 19 13 20 16 > 3 Years > 3 Years DEMAND PROFILE – SA DEMAND PROFILE – UK Two significant use
Slide 64: Digital Marketing – Quick Facts
DIGITAL MARKETING – QUICK FACTS Annexure B 775 000 + web page visits 55.1m + ad impressions 78 700 + organic website enquiries 790 + Google campaigns R12.7m + digital marketing spend 71 400 + keyword bids daily 572 400 + unique website visitors 101 300 + conversions (received a price) Google & Faceb
Slide 65: Last Mile Delivery Hub – Typical Delivery Cycle
Annexure C LAST MILE DELIVERY (LMD) HUB – TYPICAL DELIVERY CYCLE 1. Online purchases / e-commerce 2. Fulfilment leg of the transaction 3. Mid mile vehicles • Customers make online purchases for • Distribution Centre (DC) • Mid mile vehicles collect parcels at delivery • Picking, packing and allocati
Slide 66: Overview of UK and European Self Storage Industry
Annexure D OVERVIEW OF UK AND EUROPEAN SELF STORAGE INDUSTRY UK self storage industry European self storage industry (excluding UK) 1 997 82.3% 2 931 Self storage properties, Occupancy on current Self storage properties includes 598 container lettable area operators 84.5% 63.6 million sqf Population
Slide 67: UK Self Storage Industry – Rate and Occupancy
UK SELF STORAGE INDUSTRY – RATE AND OCCUPANCY Annexure D Source: The Self Storage Association UK annual industry report, 2021 STOR-AGE PROPERTY REIT LIMITED 67
Slide 68: Disclaimer and Confidentiality
DISCLAIMER AND CONFIDENTIALITY This document does not constitute or form part of any formal proposal or offer or solicitation to sell, or offer for sale or investment, or for the issue or sale of securities. This document does not (and nor does any part of it) constitute any contract, commitment or
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