33 slides from Ram Essential Services Property Fund's earnings presentation, Aug 20, 2024
Slide 1: FY24 Operating Results & Update
RAM ESSENTIAL SERVICES PROPERTY FUND FY24 Operating Results & Update 20 August 2024 REAL ASSET MANAGEMENT I PAGE 1
Slide 2: Agenda
AGENDA 1. Overview………………………………………………………………. P3-4 2. Portfolio Performance………………………………………….. P5-8 3. Financial Performance……………………………………......... P9-12 4. Capital Recycling, Leasing and Value Add……………. P13-17 5. Healthcare Fundamentals…………………………………….. P18-22 6. Outlook & Summary…………………………………………….. P2
Slide 3: Overview
1. OVERVIEW North West Private Hospital (TAS) | Coomera Square (QLD)
Slide 4: Highlights for FY2024 and Beyond
HIGHLIGHTS FOR FY2024 AND BEYOND The portfolio continues to perform soundly PORTFOLIO OPERATIONS FINANCIAL GROWTH Strong Leasing Outcomes Portfolio Continues to Perform Non-Core, Ex-Growth Disposals Continued success in leasing DPS of 5.6c met guidance $84m of assets divested at a 4% with +8% leasin
Slide 5: Portfolio Performance
2. PORTFOLIO PERFORMANCE Highlands Health Centre (QLD)
Slide 6: Continued Strong Portfolio Performance
CONTINUED STRONG PORTFOLIO PERFORMANCE Diversified portfolio generating secure and stable income Key Portfolio Metrics Tenant Mix Income Exposure 30 June 24 Number of Properties 31 Total Property Value $725.7m 94% 86% Exposed Essential to annual Occupancy1 98% Services2 escalators3 Gross Lettable Ar
Slide 7: Consistent Portfolio Resilience
CONSISTENT PORTFOLIO RESILIENCE Strong leasing outcomes drive income growth NOI Growth1 Leasing spreads continue to outpace inflation +4.8% New +8% across 20 deals June 2023 Stable Occupancy2 +9% across 12 deals June 2024 99% 98% 98% Renewal +4% across 38 deals June 2023 30 June 2022 30 June 2023 30
Slide 8: Stabilising Valuations as We Enter the Final Stage of the Cycle
STABILISING VALUATIONS AS WE ENTER THE FINAL STAGE OF THE CYCLE 83% of the portfolio has been externally Medical Essential Retail Total valued within last 12 months Number of Properties1 22 9 31 Six assets disposed at a small discount to 30 June 2024 Book Value book value ($m)1 $339.50m $386.20m $72
Slide 9: Financial Performance
3. FINANCIAL PERFORMANCE Broadway Plaza (NSW) | The Banyans Health and Wellness Centre (QLD)
Slide 10: Funds From Operations (FFO)
FUNDS FROM OPERATIONS (FFO) Income growth offsetting higher cost of interest Funds from Operations Strong 8% leasing spreads driving comparable FY241 FY232 (FFO net of adjustments) property NOI growth of 4.8%3. $m $m Underlying FFO growth (excluding finance costs) at 6.4%. Property NOI 48.8 46.9 Emb
Slide 11: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Strengthened balance sheet flexibility and extended interest rate hedging position Gearing1 of 33.5%2 within target range of 30% – 35%. Initiated share buyback program with 12.27m shares up until 22 July 2024. Hedging slightly higher than the target of 50% – 75%.
Slide 12: Near Term Activities and Results in Capital Management
NEAR TERM ACTIVITIES AND RESULTS IN CAPITAL MANAGEMENT In July 2024 extended $75m hedge expiring in September 2024 to September 2026 at 3.595% 2023 2024 Debt Debt $38m 3.0 yrs $100m 2.0 yrs Headroom Debt Maturity Headroom3 Debt Maturity Hedge Hedge 55% 2.0 yrs 76% 2.0 yrs Hedge Hedge Hedged Hedged2
Slide 13: Capital Recycling, Leasing and Value Add
4. CAPITAL RECYCLING, LEASING AND VALUE ADD Wembley Day Surgery (WA)
Slide 14: Capital Recycling Program Ahead of Schedule
CAPITAL RECYCLING PROGRAM AHEAD OF SCHEDULE Leveraging the liquidly edge from the portfolio Disposals – Settled & Unconditional $84m completed with in excess $100m in due diligence and identified for possible disposal during FY25 The Hub, Westlake (QLD) North Lakes Conv. Centre (QLD) Windaroo Villag
Slide 15: Continuation of Capital Recycling Program
CONTINUATION OF CAPITAL RECYCLING PROGRAM A prudent approach with sale proceeds to provide immediate access to accretive opportunities Capital Uses and Activities Prudent Leverage Management 1 Reduce gearing to the lower end of the target range of 30-35% through repayment of debt. Share Buy-Back 2 C
Slide 16: Capital Recycling Program
CAPITAL RECYCLING PROGRAM Active acquisition of higher yielding growth assets Mix of retail and health / medical ~$100m 1 Lower yield ex-growth at the end of the value-add journey Disposals – Recycle into higher yielding accretive assets Advanced Due Diligence Reduced geographical footprint of the p
Slide 17: Accretive Leasing and Value-Add Initiatives
ACCRETIVE LEASING AND VALUE-ADD INITIATIVES Strategic and highly engaged relationships with major tenants and utilising balance sheet prudently North West Private Hospital Mowbray Marketplace Broadway Plaza (TAS) – Stage 1 (TAS) (NSW) Yield on cost cardiac New 10-year lease Major tenant expansion ca
Slide 18: Healthcare Fundamentals
5. HEALTHCARE FUNDAMENTALS Gold Coast Surgery Centre (QLD)
Slide 19: REP's Strategic Pathway: An Increased Weighting to Healthcare
REP’S STRATEGIC PATHWAY: AN INCREASED WEIGHTING TO HEALTHCARE An increased capability in healthcare and market opportunity to build a larger high-quality portfolio as the healthcare sector continues to mature Attractive Returns with Low Volatility Healthcare real estate has historically delivered st
Slide 20: An Increasing Spectrum of Deal Flow Opportunities
AN INCREASING SPECTRUM OF DEAL FLOW OPPORTUNITIES Strong prospect to build a portfolio of scale as fundamentals continue to endure with a widening of potential deal flow opportunities from traditional and emerging private Private Surgical Hospitals Private Hospital Anchored Schemes Satellite day-hos
Slide 21: Potential Acquisitions
POTENTIAL ACQUISITIONS The RAM healthcare ‘Ecosystem’ continues to generate attractive opportunities$ with high quality lease convenance. Below represents a small percentage of the current deal flow. QLD Private Hospital Location: Metro, QLD Approx Value : $50m WA Day Hospital QLD Private Hospital L
Slide 22: Transformational Opportunity to Become a Healthcare REIT
TRANSFORMATIONAL OPPORTUNITY TO BECOME A HEALTHCARE REIT REP’s continued focus on essential services by shifting to a specialised healthcare portfolio REP to refresh strategy with a concentration on the healthcare sector. Pure healthcare investment opportunities remain severely limited - less than 0
Slide 23: Outlook & Summary
6. OUTLOOK & SUMMARY Mayo Private Hospital (NSW) | Miami Private Hospital (QLD)
Slide 24: Summary
SUMMARY An exemplary track record since listing in challenging conditions Underlying Strong leasing outcomes with +8% average spreads on renewals and new deals growth Sector leading like-for-like NOI growth of 4.8%1 94% of Fund income from secure essential service tenants 98%2 occupancy and 6.8 year
Slide 25: 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 of 4.45% and implementation of divestments and accretive acquisitions a
Slide 26: Other Information
7. OTHER INFORMATION Keppel Bay Plaza (QLD)
Slide 27: FFO Reconciliation
FFO RECONCILIATION FY241 FY23 Statutory net (loss)/profit $m (24.5) (16.6) Adjusted for: Reversal of unrealised fair value (gain) on investment properties $m 34.0 35.9 Reversal of unrealised fair value (gain) on derivatives $m 3.3 0.7 Reversal of realised fair value (gain) on investment properties $
Slide 28: Income Statement
INCOME STATEMENT Revenue FY241 FY23 Rent from investment properties $m 55.7 56.3 Interest revenue $m 0.0 - Total revenue $m 55.7 56.3 Expenses Direct property expenses $m (18.3) (15.8) Fund management fees $m (5.1) (5.5) Net realised losses on revaluation of investment properties $m (3.2) - Net unre
Slide 29: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET FY241 HY23 Cash and cash equivalents $m 9.4 11.9 Investment properties $m 683.4 786.5 Other assets $m 16.4 18.4 Non current assets held for sale $m 42.3 - Total assets $m 751.5 816.8 Borrowings $m (284.5) (300.4) Trade and other payables $m (22.5) (12.2) Total liabilities
Slide 30: Portfolio Snapshot
PORTFOLIO SNAPSHOT Valuation WALE Essential Retail / Asset1 State 30 June 2024 Capitalisation Rate Occupancy (% Income) Key Tenant (Yrs)2 Medical ($m) Medical/Healthcare Corrimal Private Healthcare Centre NSW $5.7 6.50% 93% 2.1 100% Marsden Psychology Dubbo Private Hospital NSW $22.6 5.50% 100% 11.2
Slide 31: Our ESG Approach
OUR ESG APPROACH Continued sustainability and reporting Inclusive Employer Family Inclusive Workplace Testament to our RAM is certified as a Family commitment to diversity and Friendly Workplace. The inclusion, RAM has been recognition framework was named an Inclusive developed by UNICEF Employer 20
Slide 32: Expansion of a Highly Experienced and Specialised Team
EXPANSION OF A HIGHLY EXPERIENCED AND SPECIALISED TEAM Scott Wehl – Founder, Executive Chairman Scott Kelly – Managing Director, Group CEO 26+ years of experience in Global Wealth Management and 30+ years of experience in Global Wealth Management and Asset Corporate Banking working for top tier glob
Slide 33: 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