Ram Essential Services Property Fund · ASX:REP
Ram Essential Services Property Fund — Investor Presentation (February 2025)
38 slides from Ram Essential Services Property Fund's investor presentation, Feb 28, 2025
Slide 1: 1H25 Operating Results & Update
RAM ESSENTIAL SERVICES PROPERTY FUND 1H25 Operating Results & Update 28 February 2025
Slide 2: Agenda
AGENDA 1. Overview………………………………………………………………. P3-4 2. Healthcare Fundamentals……………………………..……… P5-9 3. Portfolio Performance………………………………………….. P10-14 4. Financial Performance……………………………………......... P15-18 5. Capital Recycling…………………………………….……………. P19-22 6. Value Add – The Pathway For Growth………………….. P2
Slide 3: Overview
1. OVERVIEW North West Private Hospital (TAS)
Slide 4: 1H FY25 Highlights
1H FY25 HIGHLIGHTS The portfolio continues to perform PORTFOLIO OPERATIONS FINANCIAL PERFORMANCE CAPITAL MANAGEMENT Inbuilt portfolio growth Portfolio Continues to Perform Non-Core, Ex-Growth Disposals ▪ Strong leasing outcomes with ▪ DPS Guidance reaffirmed at 5.0- $ ▪ $119m of assets divested at a
Slide 5: Healthcare Fundamentals
2. HEALTHCARE FUNDAMENTALS The Gold Coast Surgery Centre (QLD)
Slide 6: REP's Strategic Pathway to Healthcare
REP’S STRATEGIC PATHWAY TO HEALTHCARE The Fund is well positioned to further enhance the underlying portfolio as we move towards a concentrated healthcare exposure. Attractive Returns with Low Sale of further retail assets to provide further Volatility headroom for accretive acquisitions Significant
Slide 7: Depth in Deal Flow Pipeline Across Medical Uses and Formats
DEPTH IN DEAL FLOW PIPELINE ACROSS MEDICAL USES AND FORMATS Source opportunities across the risk spectrum as capital market fundamentals improve, targeting an increased range of healthcare schemes Combined pursuit of core assets Private and N4P Hospital Anchored Schemes and value-add with assets tha
Slide 8: Stabilisation in Capital Market Fundamentals
STABILISATION IN CAPITAL MARKET FUNDAMENTALS The institutionalisation of Australian healthcare real estate resulted in a tight risk premium. This has normalised with increased opportunity to acquire at relative value In house views suggest that the next 6-12 months presents an opportune time to acqu
Slide 9: Healthcare Case Study
HEALTHCARE CASE STUDY The Fund is well positioned to further enhance the underlying portfolio as we move towards a greater healthcare exposure. Late cycle strategic execution Profitable and secure operating fundamentals Backed by high quality tenant covenant Exposure to healthcare workforce Superior
Slide 10: Portfolio Performance
3. PORTFOLIO PERFORMANCE Keppel Bay Plaza (QLD)
Slide 11: Portfolio Summary
PORTFOLIO SUMMARY Diversified portfolio generating secure and stable income with increase in WALE Key Portfolio Metrics1 Tenant Mix Income Exposure 31 December 24 Number of Properties 27 Total Property Value $650.8m 97% 88% Exposed to Essential Occupancy2 97% annual Services3 Escalators3 Gross Letta
Slide 12: Diversified and Evolving Tenant Exposure
DIVERSIFIED AND EVOLVING TENANT EXPOSURE Acquisition pipeline will further diversify tenant exposure
Slide 13: Steadfast Portfolio Resilience
STEADFAST PORTFOLIO RESILIENCE Strong leasing outcomes drive income growth Comparable NOI Growth1 Leasing spreads of +3.9% average across 17 deals +3.1% continue to outpace inflation C. 60%3 net leases providing Stable Occupancy2 hedge against increase in operational expenditures 98% 98% 97% 31 Dec
Slide 14: Stabilising Valuations as We Enter the Final Stage of the Cycle
STABILISING VALUATIONS AS WE ENTER THE FINAL STAGE OF THE CYCLE 83%1 of the portfolio has been externally Medical Essential Retail Total valued within last 12 months Number of Properties2 20 7 27 Four assets2 disposed at a small discount 31 Decemeber 2024 Book to book value since June 2024 Value ($m
Slide 15: Financial Performance
4. FINANCIAL PERFORMANCE Mayo Private Hospital (NSW)
Slide 16: Funds From Operations (FFO)
FUNDS FROM OPERATIONS (FFO) Financial metrics align with strategic portfolio recycling transition Funds from Operations HY251 HY242 (FFO net of adjustments) Year-on-year comparisons are impacted by ongoing divestments, affecting like-for-like $m $m analysis. Property NOI 21.0 22.8 Net finance costs
Slide 17: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Strengthened balance sheet flexibility enabling portfolio growth Gearing1 of 35.4%2 and post disposition of Bowen Hills in midst of portfolio transition strategy Ongoing share buyback program with 18.01m shares up until 30 January 2025. Dynamic hedging position a
Slide 18: Near Term Activities and Results in Capital Management
NEAR TERM ACTIVITIES AND RESULTS IN CAPITAL MANAGEMENT Balance sheet and hedging strategy positioned to support growth December 2023 December 2024 Debt Debt $35m 2.3 yrs $115m 1.5 yrs Headroom Debt Maturity Headroom4 Debt Maturity Hedge Hedge 57% 1.5 yrs 85% 1.6 yrs Hedge Hedge Hedged Hedged2 Durati
Slide 19: Capital Recycling
5. CAPITAL RECYCLING Springfield Shopping Centre (QLD)
Slide 20: Capital Recycling Program
CAPITAL RECYCLING PROGRAM A prudent approach with sale proceeds to provide immediate access to accretive opportunities Capital Uses and Activities Prudent Leverage Management 1 Gearing to be maintained within the target range of 30-35% Share Buy-Back 2 Concluding on 31 March 2025 Priority Accretive
Slide 21: Capital Recycling Program
CAPITAL RECYCLING PROGRAM Leveraging the liquidly edge from the portfolio Disposals – Settled & Unconditional $119m settled since commencement of capital recycling programme broadly in line with book value Bowen Hills Day Surgery (QLD) Parkwood Medical Centre (QLD) Highland Medical Centre (QLD) Furt
Slide 22: Capital Recycling Program Continued
CAPITAL RECYCLING PROGRAM CONTINUED Leveraging the liquidly edge from the portfolio Acquisitions – Unconditional / Under Exclusivity $124m unconditional or in Potential Acquisition exclusive due diligence Acquiring scarce, high Cairns Surgical Centre Private Day Hospital quality growth assets (QLD)
Slide 23: Value Add – The Pathway for Growth
6. VALUE ADD – THE PATHWAY FOR GROWTH Wembley Day Surgery (WA)
Slide 24: Value-Add Initiatives
VALUE-ADD INITIATIVES Strategic and highly engaged relationships with major tenants and utilising balance sheet prudently North West Private Hospital (TAS) – Stage 1 Cardiac catheterisation lab expansion – immediately accretive ~$7m capital expenditure 100% pre-committed to major healthcare tenant 3
Slide 25: Strong Pipeline of Value Add Projects
STRONG PIPELINE OF VALUE ADD PROJECTS A key acquisition attribute Projected Capex Tenant led strategies targeting high return yield on Tenant Led cost outcomes Value Expansion and reinvestment into our key tenants such as Healthecare at Dubbo, North West and Mayo $50m+ Expansions Private Hospitals K
Slide 26: Forecast Projects to Be Delivered in the Near Term
FORECAST PROJECTS TO BE DELIVERED IN THE NEAR TERM Controlled approach to value add activities Why Healthcare Development Willets Health Precinct Mayo Private Hospital Existing tenant led Location: Mackay, QLD | Approx Value : $11m Location: Taree, NSW | Approx Value : $25m developments Yield on cos
Slide 27: Outlook & Summary
7. OUTLOOK & SUMMARY Miami Private Hospital (QLD)
Slide 28: Summary
SUMMARY A consistent track record since listing in challenging conditions Underlying Strong leasing outcomes with circa 3.9% average spreads on renewals and new deals growth Stable comparable NOI growth of 3.1%1 97%2 of Fund income from secure essential service tenants 97%3 occupancy and an increase
Slide 29: FY2025 Guidance 5.00 – 5.20c
FY2025 GUIDANCE 5.00 – 5.20c 1 8% 2 ~90% 95% – 100% In line with consensus Distribution Per Forecast Forecast Distribution Target FFO Payout Security Distribution Yield Tax Deferred Ratio 1. Guidance assumes average 3-month BBSY consensus and implementation of divestments and accretive acquisitions
Slide 30: Other Information
8. OTHER INFORMATION Swan Medical Centre (WA)
Slide 31: FFO Reconciliation
FFO RECONCILIATION HY251 HY24 Statutory net (loss)/profit $m (22.9) (12.3) Adjusted for: Reversal of unrealised fair value (gain) on investment properties $m 26.7 14.6 Reversal of unrealised fair value (gain) on derivatives $m 0.9 2.8 Reversal of realised fair value (gain) on investment properties $
Slide 32: Income Statement
INCOME STATEMENT Revenue HY251 HY24 Rent from investment properties $m 28.1 27.0 Interest revenue $m 0.1 - Total revenue $m 28.2 27.0 Expenses Direct property expenses $m (11.2) (8.9) Fund management fees $m (2.4) (2.7) Net realised losses on revaluation of investment properties $m (1.6) (1.6) Net u
Slide 33: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET HY251 HY24 Cash and cash equivalents $m 3.7 18.5 Investment properties $m 637.9 744.9 Other assets $m 12.2 14.7 Non current assets held for sale $m 25.5 - Total assets $m 679.3 778.1 Borrowings $m (252.2) (287.8) Trade and other payables $m (22.7) (13.7) Total liabilities
Slide 34: Portfolio Snapshot
PORTFOLIO SNAPSHOT Valuation WALE Essential Retail / Asset1 State 31 Dec 2024 Capitalisation Rate Occupancy (% Income) Key Tenant (Yrs)2 Medical ($m) Medical/Healthcare Corrimal Private Healthcare Centre NSW $5.8 6.50% 96% 1.6 100% Marsden Psychology Dubbo Private Hospital NSW $20.5 5.75% 100% 10.7
Slide 35: Our ESG Approach
OUR ESG APPROACH At RAM, we prioritise strong risk management in our investments, with a Strong Governance particular focus on ESG risks and disclosures. We recognise that sustainable RAM has built up a growth extends beyond environmental concerns – it also requires a comprehensive and well- commitm
Slide 36: Expansion of a Highly Experienced and Specialised Team
EXPANSION OF A HIGHLY EXPERIENCED AND SPECIALISED TEAM The combined RAM Real Estate team has extensive acquisition, development, project delivery, and asset and funds management experience. Scott Wehl Founder, Executive Chairman Matthew Strotton Executive Director, Head of Real Estate Scott Kelly Ma
Slide 37: Selected Biographies and Individual Experience
SELECTED BIOGRAPHIES AND INDIVIDUAL EXPERIENCE Matthew Strotton – Executive Director, Head of Real Estate Peter Granato – Director, Fund Manager REP Matthew has over 29 years of experience in global real estate markets across real estate Peter has over 25 years of experience as a Finance and Propert
Slide 38: Important Information
IMPORTANT INFORMATION GENERAL ADVICE WARNING: The information contained herein does not have any regard to the specific investment objectives, financial situation or the particular needs of any person. The information in this presentation is not intended to be personal financial advice. This materia
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