Slide 1: Assura plc results for the year ended 31 March 2020
Assura plc for the year ended 31 March 2020
Slide 2: Overview
31 March 2020 Overview Jonathan Murphy CEO
Slide 3: Our response to COVID-19
Results for the year ended 31 March 2020 assura Our people - Our top priority is the safety and wellbeing of our colleagues, partners, occupiers and their patients Our response to - Ongoing technical support and grants for home equipment COVID-19 - No team members furloughed; all able to work from h
Slide 4: Overview of year to March 2020
Results for the year ended 31 March 2020 assura Overview of year to March 2020 Robust asset values Resilience
Slide 5: Our market: highly attractive sector characteristics
Results for the year ended 31 March 2020 assura 1. Strong leases Long-term income with 21+ year leases Our market NHS backed tenant covenant and no rent-free periods Highly attractive sector Low default risk characteristics 3 yearly rent review cycle with linkage to cost of new developments 2. Stron
Slide 6: Our position
Results for the year ended 31 March 2020 Our position Our position leaves us well placed to respond to the needs of the market 1. Diversified portfolio of scale 576 assets across the UK with value of £2.1bn Resilient income with 85% of leases NHS funded WAULT of 11.7 years and 98% let £1.43bn of con
Slide 7: Financial performance
fo Results for the year ended 31 March 2020 assura Financial performance Jayne Cottam CFO
Slide 8: Financial summary
oi Results for the year ended 31 March 2020 assura Financial summary Earnings growth driven by acquisitions and developments Income statement Mar 2020 _Mar2019__ Change Net rental income (£m) 1037 95.2 9% EPRA earnings (£m) 675 63.8 6%T EPRA EPS (1p) 28 27 4% t Dividend paid during period per share
Slide 9: Portfolio growth flows through to earnings
Results for the year ended 31 March 2020 Portfolio growth flows through to earnings 6% growth in annualised rent roll £m 10 4 108 106 104 102 100 (1.2) 98 96 ou 92 90 OF Mar-19 Disposals. Development Rent reviews Acquisitions Mar-20 completions EPRA cost ratio maintained at low level % ‘including de
Slide 10: Strong track record in key metrics
Results for the year ended 31 March 2020 Strong track record in key metrics Investment property (£m) £m 2,500 2,000 CAGR: 18% 1,500 1,000 * Gf C) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Gross rental income (£m) £m 120 Mar-20 100 CAGR: 16% 80 Mar-18 Mar-19 CAGR is Compound Average Growth Rate Mar-20 assur
Slide 11: Contracted rental income
ori Results for the year ended 31 March 2020 assura £ iti . Contracted rental m Additions and asset enhancement ml Passage of time Income 1,500 Focus on extending long term cash flows 1,250 1,000 750 S00 250 TI.7 years Portfolio WAULT
Slide 12: Strong financial position
Results for the year ended 31 March 2020 Strong financial position Additional debt at attractive rates — £107m unsecured notes placed in July 2019 - 2 tranches, 10 & 15 year tenor - 2.3% average fixed rate — RCF extended to November 2024 - LTV reduces to 30% on a proforma basis following £185m equit
Slide 13: Strong pipeline
oro Results for the year ended 31 March 2020 assura Strong pipeline Pp 9 PIP I no. [Completed 19/20 [4 | Developments Continued successful conversion of pipeline into portfolio additions developments continue to build [Now| Pipeline [| Cost_| 34 | Extended pipeline | £199m HeWALsnallts Capital proje
Slide 14: Proforma rent roll demonstrates positive impact of pipeline
Results for the year ended 31 March 2020 Proforma rent roll demonstrates positive impact of pipeline Development and asset key contributor to future growth - Opportunities in development pipeline expected to flow through rent roll - Positive outlook in respect of rent reviews and asset enhancement o
Slide 15: Operational update
31 March 2020 Operational update Jonathan Murphy
Slide 16: Development pipeline
ori Results for the year ended 31 March 2020 assura Development én pipeline 380 New schemes ¢ continue Pxtended t ‘iden |; success 300 pipeline plremg rows to 199m 250 Appointed exclusive partner, awaiting NHS 200 approval Extended 150 Immediate pipeline £77m 100 Expected to be on immediate pipeline
Slide 17: Additions and disposals
Results for the year ended 31 March 2020 assura Additions and disposals 19 disposals F20m proceeds 28 acquisitions £1] Om cost - Additional disposal of 17 assets for consideration of £20m completed in May 2020
Slide 18: Growing asset enhancement activity
Results for the year ended 31 March 2020 Growing asset enhancement activity Maintaining and growing lease lengths is the priority — Momentum building through new leases, lease regears and portfolio capital asset enhancement projects - 32 lease regears completed in 2019/20 — covering £2.9m of existin
Slide 19: Prospective growth driven by developments
ori Results for the year ended 31 March 2020 assura Prospective growth Rent review settlements driven by developments 6% Rent reviews settled during year 5% — - Annualised uplifts ia \ — Average 1.8% 4% — RPI/fixed/other 2.6% [ \ - Open market 1.2% % — Linkage to cost inflation on new developments 2
Slide 20: Market overview
ori Results for the year ended 31 March 2020 assura Market overview Yield progression 8% Strong underlying demand and robust fundamentals 7% [> 6% 5% : \ A . 7 4.68% » Net Initial Yield 0% o I 9 yy aN a x NG © ab Al ® a o 4 WL% 079g yar Pwo se as was wae at wo yas yo pot . {e) —15 year Gilt —Assura
Slide 21: Social impact strategy
31 March 2020 Social impact strategy Jonathan Murphy
Slide 22: Assura Community Fund
Results for the year ended 31 March 2020 Assura Community Fund Ambition to be number 1 listed property business for social impact — As part of this ambition, we are launching the Assura Community Fund, which is set up to support charities, voluntary organisations and community groups — Supports proj
Slide 23: Social impact at the heart of our strategy
—— ori Results for the year ended 31 March 2020 assura Social impact at the our contribution heart of our strategy to society Ambition to positive' six million people by 2026 Six pledges by 2026 e e — Create the Assura Community Fund, b targeting one million people nefiting from SIX SIX its work Our
Slide 24: Conclusion
of Results for the year ended 31 March 2020 assura . Resilient and growing business Conclusion Sustainable platform for growth Strong pipeline of future opportunities Financial strength to support future NHS needs Social impact at the heart of our strategy 2h
Slide 25: Additional information
Results for the year ended 31 March 2020 ad Additional information
Slide 26: Additional information contents
ori Results for the year ended 31 March 2020 assura Additional information 1.1 Assura's position and strengths 3.1 Portfolio statistics 5.1 Open market review results 1.2 Business model & strategy 3.2 Security of tenant and lease length 5.2. Basis of rent reviews and timing 1.3 Primary care model 3.
Slide 27: Assura's position and strengths
Results for the year ended 31 March 2020 1.1 Assura's position and strengths Our market Assura More GP-led services in the community Supported by demographics Secure long-term ; Barriers to entry income streams assura Significant investment required No speculative development
Slide 28: Business model & strategy
Results for the year ended 31 March 2020 1.2 Business model & strategy Business model | designed to deliver resilient and predictable income assura Develop Providing bespoke, community-led property solutions for each of our healthcare partners 100% pre-let with no speculative development Innovation
Slide 29: The primary care model
Results for the year ended 31 March 2020 1.3 The primary care model is key to meeting growing healthcare demand in the UK care whch g recognised as critical to NHS delivery and faces growing demand "General practice is undeniably the bedrock of NHS care... so if general practice fails, the NHS fails
Slide 30: GP funding structure
ori assura Results for the year ended 31 March 2020 1.4 GP funding structure How the fundi Lease Agreement _GMS Contract mechanism wot (typically 20-25 years) (lifetime contract) ~ () —— — assura @ _________ NHS England Rental income GMS Payments (4.75-5% NIY) GP (Partnership) (inc. Premises Payment
Slide 31: Rent reimbursement mechanism
Results for the year ended 31 March 2020 1.5 Rent reimbursement mechanism Changes to the rent reimbursement mechanism are considered unlikely 1. There is significant historical precedent for this arrangement 2. A removal of rent reimbursement could impact practice funding 3. Rent payments are a smal
Slide 32: Supportive political backdrop
Results for the year ended 31 March 2020 1.6 Supportive political backdrop Assura operates in a sector benefiting from political and public support 1. Cross party support for primary care investment continues 2. 3. Government policy supportive ori assura Broad consensus on the NHS as a key enabler o
Slide 33: Risk reward spectrum
31 March 2020 10% Residential index 9% Primary Healthcare 8% Total return (per annum) Industrial 7% All Healthcare 6% Office Bonds Equities 5% All property 4% 3% Retail 2% 1% 0% 16 14 12 10 8 6 4 2 0 Risk (standard deviation)
Slide 34: Social impact strategy
Results for the year ended 31 March 2020 2.1 Social impact strategy Ambition to positively impact 6 million people by 2026 Actions that count toward our target to impact six million - Built a new sustainable development — Extended or refurbished an existing building sustainably — Improved energy eff
Slide 35: Six pledges to achieve by 2026
Results for the year ended 31 March 2020 2.2 Six pledges to achieve by 2026 sixbysix Minimising ‘ourimpact on the environment Create the Assura Community Fund, targeting one million people benefiting from its work Include community space for sessional use in all developments Develop our sustainable
Slide 36: Social impact KPIs
Results for the year ended 31 March 2020 2.3 Social impact KPIs Additional targets and KPIs beyond our pledges, plan to be reported from March 2021 From 2021/22 : contractor locality (i.e. the proportion of jobs completed by people based within 25 miles of the property) and carbon offsetting in resp
Slide 37: Portfolio statistics
Results for the year ended 31 March 2020 3.1 Portfolio statistics Number Bent AULT Total Value <£im £t5m £510m >£10m Valug £m; Herta floor (Em per per fe) f) Pee) North East 128 25.6 12.5 127,074 4765 97 226.1 102.6 138.1 3,749 Midlands 85 18.3 124 = 100,213 360.0 76 143.4 106.6 102.4 3,592 East ile
Slide 38: Security of tenant and lease length
Results for the year ended 31 March 2020 3.2 Security of tenant and lease length 64% of rent roll still contracted in 2030 $1.43Ion total contracted cash flow ori assura Rengrol Value (%) Property value by WAULT £m GPs 737 68 1,000 NHS Body 187 Vv 900 Pharmacy 87 8 800 700 Other 78 7 600 108.9 100 5
Slide 39: Contracted rental income
oi Results for the year ended 31 March 2020 assura 3.3 Contracted rental income WAULThistory £m 125 ™Contracted at Mar-20 £m 100 12.0 75 11.0 50 64% : of rent roll still contracted in 2030 43on total contracted cash flow 10.0 8.0
Slide 40: Lease lengths
Results for the year ended 31 March 2020 3.4 Lease lengths 90% Bi 62 tenants ith, lease expiry gin 2a 20 financial year ue Se still tenants or space has been re-let at March 2020 92% {e) Bi 68 tenants ‘it lease expiry falling n ane/| inancial year hat ore. till fenant ors te has een re-let at March
Slide 41: Increase of 8% in investment property
Results for the year ended 31 March 2020 3.5 Increase of 8% in investment property Growth in portfolio through acquisitions and developments £m 2,200 2,150 2,100 2,050 2,000 1,950 1,900 1,850 Mar-19 Disposals / held for sale IFRS 16 adjustment Revaluation gain Development costs Acquisitions ori assu
Slide 42: Property and net debt
ori Results for the year ended 31 March 2020 assura 3.6 property and Property and debt net de sm Mar 2929 Mar 708 2,500 Completed investment property 2,073.3 1,943.3 2.000 Investment property under construction 57.5 V7 Pharmacy lease premium / rent adjustments 2.6 9.6 1500 Head lease obligations 5.6
Slide 43: Sensitivity analysis
Results for the year ended 31 March 2020 3.7 Sensitivity analysis — A25bps movement would result in a valuation movement of approximately £112m or 4.6 pence per share - A100bps movement would result in a valuation movement of approximately £353m or 17.8 pence per share Equivalent jeld ERV per share
Slide 44: Acquisition process
Results for the year ended 31 March 2020 4.1 Acquisition process - Database provides crucial market information — Referrals, direct marketing, conferences and events key to sourcing opportunities — Flexible and engaged approach to addressing tenant requirements - Brand and reputation ori assura c. 9
Slide 45: Investment pipeline delivered and replenished
ori Results for the year ended 31 March 2020 assura 4.2 Investment pipeline Mar 2020 delivered and replenished Investment property (2m) 2,139 High quality acquisitions and lective disposals Rent roll (£m) 108.9 - £160m increase in portfolio value WAULT (years) 17 — £134m additions - 4.6% average yie
Slide 46: Development process
31 March 2020 - - - - - - - - - - - - - - - - - - - - -
Slide 47: Our typical range of medical centres
oi assura Results for the year ended 31 March 2020 4.4 Our typical range of medical centres . - Central ‘hub’ serving wide community = Medium - 1800rr?-3,000rr? Small - Serves small town or district - Upto 50,000 patients = 800m?-1,800m? - 18 consulting rooms and 6 treatment rooms - Serves neighbour
Slide 48: Conversion of opportunities to live schemes
Results for the year ended 31 March 2020 4.5 Conversion of opportunities to live schemes Immediate and extended pipelines reflect the positive impact of GPI acquisition Completed On site immedi ; ate Extended Number of schemes 4 15 18 34 Cost incurred £50m Cost to complete £31m Total cost £15m £81m
Slide 49: On site developments
ori assura Results for the year ended 31 March 2020 4.6 On site developments Increase in number of live development schemes; delivery from immediate pipeline to on site — Geographically spread across country Stourbridge AS roat Ba oN — Increasing data points for district valuers - GPl acquisition ha
Slide 50: On site development: Netherfield, East Midlands
Results for the year ended 31 March 2020 4.7 On site development Netherfield, East Midlands - Relocates Trentside Medical Group who had taken on patients from a nearby surgery closed — Ontrack for BREEAM rating of Excellent and EPC rating of A, incorporating PV panels, air-source heat pump, 2 electr
Slide 51: Capital project: Northgate Medical Centre, Wakefield
ori Results for the year ended 31 March 2020 assura 4.8 Capital project Northgate Medical Centre, Wakefield — Assura owned since 2004 — 4years remaining on lease - Current rent £175/m? / | % — Agreed extension adding 42m? (being mezzanine level consulting expected reduction nenergy rooms) and refurb
Slide 52: Lease regear: Pont Newydd Medical Centre, Porth
Results for the year ended 31 March 2020 4.9 Lease regear — Pont Newydd Medical Centre, Porth — Assura owned since 2014 - 10 years remaining on lease - Current rent £159/m?2 — Agreed lease regear, reconfiguration of existing space to add consulting room, and letting space of 120m? expansion space -
Slide 53: Developments drive rental growth
Results for the year ended 31 March 2020 4.10 Developments drive rental growth — New developments capture increased land and construction costs resulting in increased rent — Higher rental tone linked to increasing construction costs — Recent schemes support this trend with a rising trend line agains
Slide 54: Open market review results
Results for the year ended 31 March 2020 5.1 Open market review results — 1.8% annualised increase from rent reviews settled in period - 1.2% from open market rent reviews - 2.6% from RPI and fixed uplift reviews — Table shows those reviews settled in the current financial year — ERV £111.2m at 31 M
Slide 55: Basis of rent reviews and timing
Results for the year ended 31 March 2020 5.2 Basis of rent 80% reviews and timing 70% 60% 50% 40% 30% Proportion of rent roll 20% 10% 0% OMR ™ Upward/downward review basis - tenant can instigate (4%) § Upward/downward review basis - landlord only trigger (18%) ™ Upward only review basis (78%) RPI Fi
Slide 56: Financial performance history
Results for the year ended 31 March 2020 assura 6.1 Financial Performance istory Number of properties Rent roll (£m) Investment property (£m) 102.7 108.9 i979 2189 71.0 1,733 576 E sia 8S Tbs 638 1,345 321 sll 55.6 gas 0? i l | [| l 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 2015 20
Slide 57: Financial performance history
Results for the year ended 31 March 2020 6.2 Financial rformance assura istory Gross rental income (£m) 103.7 EPRA EPS (pence per share) Dividends paid (pence per share) 2.8 3.00 265 275 95.2 24 2.66 83.5 24 2.50 20s 225 na 200 185 60.2 x 50.1 1.50 1.00 0.50 0.00 2015 2016 2017 2018 2019 2020 2015 2
Slide 58: EPRA NAV
Results for the year ended 31 March 2020 ori assura 6.3 EPRA NAV EPRA NAV EPRA NAV £m Mar 2020 Mar 2019 £m £m Net assets 1,302.4 1,279.9 Diluted EPRA NAV at 31 March 2019 1,279.4 Deferred tax (0.5) (0.5) Income (EPRA earnings) 67.5 EPRA NAV 1,301.9 1,279.4 Capital (revaluations and capital 14 gains)
Slide 59: New EPRA net asset measures
Results for the year ended 31 March 2020 6.4 New EPRA net asset measures — New EPRA measures for net assets, provided for indicative purposes — Two of the measures closely align to existing NAV and NNNAV for Assura — NRVis Net Reinstatement Value (assuming entities never sell assets, representing va
Slide 60: EPRA EPS & cash flow
Results for the year ended 31 March 2020 6.5 EPRA EPS & cash flow Mar 2020 Mar 2019 Mar 2020 Mar 2019 EPRA EPS £m £m £m £m Profit for the period 78.9 78.9 Opening cash 18.3 28.7 Net cash from operations 66.3 72.9 EPRA earnings 67.5 67.5 _ Cash flows from investing activities: Weighted average number
Slide 61: Facilities and maturity profile
Results for the year ended 31 March 2020 7.1 Facilities and = Grossdebt £847m — Weighted Weighted maturity profile LTV 38% gees average Niet Facility description ixed, Maturit Effective Secured/ Outstandi id festa my interest rate et 31.Mar 2021 10 year listed . 5 exeuallyerd Fixed Dec-21 4.75% Secu
Slide 62: Covenants
ori Results for the year ended 31 March 2020 assura 7.2 Covenants conden, RCF / PPs Unsecured bond 2028 Secured bond 2021 compli Covenant Mar-20 Covenant Mar-20 Covenant Mar-20 Interest cover 21.75 4.19 2150% 397% >1.5 2.16 LTV / leverage <60% 39% <65% 38% >1.35 WAULT >7 years 12.1 years - - - NHS -
Slide 63: REIT overview & dividend calendar
Results for the year ended 31 March 2020 8.1 REIT overview & 2020/ Payment date Exdivdate Recorddate «PID. Non PID Dividend calendar 2021 5 . . . 15 Apr 2020 12Mar2020 13 Mar 2020 0.697 - — REIT status is a tax election available to listed real estate a pr ar er P companies Q2 15 Jul 2020! 11Jun 202
Slide 64: Disclaimer
oi Results for the year ended 31 March 2020 assura Disclaimer This presentation contains certain statements that are neither financial results nor other historical information. These statements are forward- looking in nature and are subject to risks and uncertainties. Actual future results may diffe