Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — FY2022 Earnings Presentation
56 slides from Stor-age Property Reit's earnings presentation, June 2022
Slide 1: Annual Results Presentation – Year Ended 31 March 2022
STOR-AGE PROPERTY REIT ANNUAL RESULTS PRESENTATION YEAR ENDED 31 MARCH 2022 STOR-AGE PROPERTY REIT LIMITED 1
Slide 2: Presentation Outline
PRESENTATION OUTLINE Page Introduction 4 Financial review 9 Property review 18 Environmental, Social and Governance 30 Operations review 34 Outlook 39 STOR-AGE PROPERTY REIT LIMITED 2
Slide 3: Annexures
ANNEXURES Page A: Investment case 41 B: Strategy 42 C: Portfolio overview 44 D: Portfolio analysis 45 E: SA pipeline developments 46 F: Our customers 49 G: Last mile delivery hubs – overview 51 H: Digital First – overview 52 I: UK and European self storage industry – overview 54 STOR-AGE PROPERTY RE
Slide 4: Introduction
INTRODUCTION STOR-AGE PROPERTY REIT LIMITED 4
Slide 5: Highlights
HIGHLIGHTS Final dividend 55.30 cents per share – distributable income per share up 7.5% Total return of 16.5%¹ Rental income and net property operating income up 15.0% and 16.7% respectively Same-store rental income up 12.3% (SA 10.0%; UK 21.2%) Same-store SA and UK average rental rate up 6.5% and
Slide 6: Snapshot
SNAPSHOT Listing date November 2015 JSE sector Speciality REITs Profile Highly specialised, low risk, income paying self storage REIT Self storage 11 publicly traded self storage REITs universe (US: 6, UK: 2, EU1: 1, Aus: 1, SA: 1) Market R7.0 billion² capitalisation Total South Africa United Kingdo
Slide 7: 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 Multi-year performance 1: Positive divergence relative to SAPY, outperforming by c.192% 170 January 2022 45 R575m equity raise, 0.92% disco
Slide 8: UK REIT Sector – Self Storage the Standout
UK REIT SECTOR – SELF STORAGE THE STANDOUT Self storage was the leading performer across all UK REIT subsectors for the 12-month period ended March 2022 Stor-Age benefits from significant and growing exposure (c.50%) to GBP assets through Storage King UK listed real estate experienced a strong recov
Slide 9: Financial Review
FINANCIAL REVIEW STOR-AGE PROPERTY REIT LIMITED 9
Slide 10: Occupancy and Tenant Profile
OCCUPANCY AND TENANT PROFILE OCCUPANCY PROFILE SA 31 March 22 31 March 21 GLA m2 Occupied m2 % occupied GLA m2 Occupied m2 % occupied Same-store 353 900 318 600 90.0% 350 900 315 900 90.0% Non same-store 30 900 20 400 65.8% 15 100 13 400 85.5% Total 384 800 339 000 88.1% 366 000 329 300 90.0% Non sa
Slide 11: Trading Results
TRADING RESULTS 31 March 22 31 March 21 % change SS Non SS Total SS Non SS Total SS Total SA (Rm): Rental income Self storage 436.8 9.7 446.5 397.0 13.5 410.5 10.0% 8.8% • SA same-store rental Other 7.9 1.6 9.5 7.2 0.6 7.8 9.7% 21.5% income growth of 10.0% Ancillary income 18.6 0.4 19.0 16.6 0.2 16.
Slide 12: Distribution Analysis
DISTRIBUTION ANALYSIS 31 March 2022 31 March 2021 Rm Rm Net property operating income - SA 363.8 329.8 Net property operating income - UK 307.3 242.1 Waterfall – loss of revenue claim 10.3 - Rental guarantee and underpin 4.5 15.5 Fee income 14.6 4.5 - Management fees (recurring) 6.2 4.3 - Developmen
Slide 13: Capital Structure
CAPITAL STRUCTURE 31 March 2022 ZAR facilities GBP facilities GBP facilities Total facilities Rm £m Rm Rm Total debt facilities 1 567.0 105.4 2 014.9 3 581.9 Undrawn debt facilities 285.0 20.5 392.0 677.0 Gross debt 1 282.0 84.9 1 622.9 2 904.9 Gross debt net of cash held in debt facilities 1 182.0
Slide 14: Property Valuations
PROPERTY VALUATIONS VALUATION BREAKDOWN Average % of Discount Exit cap Rm value per portfolio rate rate m² SA Freehold and long leasehold 5 011.5 99.3 • Valuation policy Short leasehold 32.9 0.7 SA – 50% valued externally at each Total 5 044.4 100.0 12 400 14.00% 8.45% reporting period (year end and
Slide 15: Net Asset Value per Share
NET ASSET VALUE PER SHARE 31 March 2022 31 March 2021 Rm Rm Net assets excluding NCI 6 597.0 5 618.1 Less: Goodwill and intangible assets (145.7) (147.0) Net tangible assets 6 451.3 5 471.1 Deferred tax relating to UK property revaluations 287.4 65.4 Adjusted net tangible assets 6 738.7 5 536.5 Numb
Slide 16: Balance Sheet – Summarised
BALANCE SHEET – SUMMARISED 31 March 31 March 31 March 31 March 2022 2021 2022 2021 ASSETS LIABILITIES Non-current assets Non-current liabilities Bank debt 2 599 1 347 Investment properties 9 264 7 567 ZAR 1 141 304 SA Freehold 4 929 4 542 GBP 1 458 1 043 SA Leasehold 116 113 Derivatives mark-to-mark
Slide 17: Currency Hedging
CURRENCY HEDGING HEDGING OF NET INVESTMENT IN STORAGE KING 31 March 2022 31 March 2021 £m £m Investment property 232.6 155.3 Leasehold liabilities (11.8) (12.6) Net investment property 220.8 142.7 Bank debt (77.7) (51.1) Other assets 10.5 8.0 Other liabilities (26.0) (7.7) Net investment excluding d
Slide 18: Property Review
PROPERTY REVIEW STOR-AGE PROPERTY REIT LIMITED 18
Slide 19: South Africa – Acquisitions and Developments
SOUTH AFRICA Acquisitions • Two acquisitions secured in Cape Town in FY22 › Silver Park Self Storage – 7 600m² GLA, R60.1 million, acquired in November 2021 › Green Cube Self Storage – 5 500m² GLA, R48 million, acquired in December 2021 • Rebrand and integration at both properties complete, with bot
Slide 20: South Africa – Development Pipeline
SOUTH AFRICA – DEVELOPMENT PIPELINE • Ten properties offering an estimated 60 800m² GLA at an approximate total cost of R900 million • Five new properties secured in 2021 › Pinelands › Paarden Eiland › Century City¹ › Kramerville › Johannesburg 2 (subject to planning) Anticipated Property Location C
Slide 21: Nedbank Development JV
NEDBANK DEVELOPMENT JV Overview • Entered JV with Nedbank Corporate and Investment Bank, acting through Nedbank Property Partners – FY22 • To initially develop two high profile properties in the existing Stor-Age pipeline at a total cost of approximately R200 million › Morningside – 7 400m² GLA, und
Slide 22: Morningside – Current Development
MORNINGSIDE – CURRENT DEVELOPMENT Located prominently alongside the Wedge Shopping Centre on Rivonia Road in Kelvin Drive Morningside. The property enjoys high visibility to passing traffic. Summit Road The property will comprise an estimated 7 400m2 GLA on completion (on full fit-out) Wedge Shoppin
Slide 23: Bryanston – Current Development
BRYANSTON – CURRENT DEVELOPMENT William Main Road With a prominent location alongside the Virgin Active at Grosvenor Crossing, the Nicol Drive property is positioned at the intersection of William Nicol Drive and Main Road in Bryanston. The property enjoys high visibility to passing traffic. The pro
Slide 24: Storage King
STORAGE KING Overview • 6th largest UK self storage brand – operating 37¹ properties throughout England • Post UK market entry in 2017 – acquired six operators, comprising 16 properties, portfolio of owned properties grown from 14 to 30² Portfolio expansion • Construction underway to bring online c.
Slide 25: McCarthy’s Acquisition
MCCARTHY’S ACQUISITION Salient terms Harrogate • High quality, regionally dominant four property freehold portfolio York acquired in January 2022 • Purchase consideration – £37.5 million • CLA – 130 600 sqf / 12 100m², with the potential to increase to an Wakefield estimated 203 500 sqf / 18 900m² o
Slide 26: Storagebase Acquisition
STORAGEBASE ACQUISITION Salient terms McCarthy’s portfolio acquisition • High quality, four property freehold portfolio acquired in March 2022 • Predominantly modern, bespoke, purpose-built properties – Banbury, Wednesbury, Frome and Salisbury • Purchase consideration – £59.0 million Wednesbury • Ac
Slide 27: Moorfield JV
MOORFIELD JV • JV entered with Moorfield in FY21 to assemble a portfolio of high-quality self storage assets across the UK, by developing and acquiring properties with a focus on London (its commuter towns), the South East and key regional towns and cities • Key terms › Equity capital contributions
Slide 28: Heathrow – Current Development
HEATHROW – CURRENT DEVELOPMENT To the M25 Storage King Heathrow is a greenfield development located to the west of London, inside the M25 Orbital Motorway (M25) and situated in close proximity to Heathrow Airport. Heathrow Airport To Central London The site is located on a prominent intersection on
Slide 29: Bath – Current Development
BATH – CURRENT DEVELOPMENT Bath City Centre Storage King Bath is a brownfield development (building conversion) located within the Western Lock Retail Park, which lies approximately 3.9 kilometers west of Bath City Centre on the A36 Lower Bristol Road. The property is located adjacent to a M&S Foodh
Slide 30: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STOR-AGE PROPERTY REIT LIMITED 30
Slide 31: ESG
ESG Strategy and framework • Aligns our Vision and Core Values with relevant UN Sustainable Development Goals (SDGs) and takes guidance from the Task Force on Climate-related Financial Disclosures (TCFD) • ESG framework – enables monitoring of our impact on the economy, the workplace, the social env
Slide 32: Social
SOCIAL Overview • Stor-Age remains committed to our Social and Economic Development initiatives › Utilising our resources – operational, marketing and our core self storage product › To initiate and contribute to socio-economic development projects › Benefiting previously disadvantaged groups, chari
Slide 33: Social (continued)
SOCIAL (continued) Stor-Age Business Hub • Actively supports the continued sustainability of our commercial customers’ businesses • Majority of whom are SMMEs and on which the SA economy is dependent on for sustainable job creation and economic development • In SA › 50% + of commercial customers cla
Slide 34: Operations Review
OPERATIONS REVIEW STOR-AGE PROPERTY REIT LIMITED 34
Slide 35: 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 • Vastly experienced management teams – SA and UK Ope
Slide 36: 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 Revenue • Leasing characteristics • Respond to needs • Length of stay • Improve sales with train
Slide 37: 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 38: Demand Creation Capability
DEMAND CREATION CAPABILITY Driving conversions through audience targeting enhanced by AI machine learning Social media Google My Business Beta Search YouTube Top funnel and Zero click Differential Machine learning Life changing re-targeting advantage vs best practice events • Understanding customers
Slide 39: Outlook
OUTLOOK • Stor-Age delivered an excellent operating and financial performance despite the COVID-impacted operating environment and the negative impact of the July 2021 unrest in SA • We remain conscious of risks and unpredictable economic outcomes which are outside of our control • Developed and eme
Slide 40: Annexures
ANNEXURES A. Investment case B. Strategy F. Our customers G. Last mile delivery hubs – overview C. Portfolio overview H. Digital First – overview D. Portfolio analysis I. UK and European self storage industry – overview E. SA pipeline developments STOR-AGE STOR-AGE PROPERTYREIT PROPERTY REIT LIMITED
Slide 41: Investment Case
INVESTMENT CASE Annexure A • Niche growth sector globally, driven by societal trends › Consumerism, including the increase in e-commerce Resilient sector with › Densification and an increasingly mobile population growth opportunities globally • Primary drivers of demand are life-changing events and
Slide 42: Strategy
STRATEGY Annexure B 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 p
Slide 43: Strategy (continued)
STRATEGY (continued) Annexure B 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
Slide 44: Portfolio Overview
PORTFOLIO OVERVIEW Annexure C 85 The portfolio comprises 55 properties in SA and 30 properties in the UK SA PORTFOLIO UK PORTFOLIO² 55¹ properties 30³ properties R4.9bn⁴ R5.3bn⁴ (£276 million) 384 800m² GLA⁴ 101 000m² GLA⁴ 28 300 tenants 16 500 tenants 55 30 1. Includes Sunningdale, in which Stor-Ag
Slide 45: Portfolio Analysis
PORTFOLIO ANALYSIS Annexure D Total number of Total property value¹ Total number of tenants Total GLA properties² R9.26bn 44 800 485 800m2 85 Value of properties Number of tenants GLA Number of properties 21% 37% 35% 54% 46% 63% 79% 65% South Africa UK 1. Net of leasehold obligations and excludes pr
Slide 46: SA Pipeline Development – Pinelands
SA PIPELINE DEVELOPMENT – PINELANDS Annexure E Located in Pinelands, the property is situated on the corner of Howard Drive and Howard Centre Gardener Way, opposite Howard Centre. The property will comprise an estimated 7 300m 2 GLA on completion (on full fit out). Forest Drive Two existing tenants
Slide 47: SA Pipeline Development – Paarden Eiland
SA PIPELINE DEVELOPMENT – PAARDEN EILAND Annexure E 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 700m 2
Slide 48: SA Pipeline Development – Kramerville
SA PIPELINE DEVELOPMENT – KRAMERVILLE Annexure E 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 Dartfield Bowling Road an estim
Slide 49: Our Customers
OUR CUSTOMERS Annexure F GEOGRAPHIC REPRESENTATION1 RESIDENTIAL / COMMERCIAL TENANT MIX BY GLA2 Gauteng Residential 24 Western Cape Commercial 38 34 Eastern Cape 1 KwaZulu-Natal 7 Free State 66 4 United Kingdom 26 GEOGRAPHIC FOCUS RESIDENTIAL vs COMMERCIAL Primary focus = high profile locations in J
Slide 50: Our Customers (continued)
OUR CUSTOMERS (continued) Annexure F AVERAGE LENGTH OF STAY – SA AVERAGE LENGTH OF STAY – UK < 6 Months < 6 Months 22 30 28 29 6 - 12 Months 6 - 12 Months 11 > 12 Months > 12 Months 2 - 3 Years 10 2 - 3 Years 17 16 20 17 > 3 Years > 3 Years DEMAND PROFILE – SA DEMAND PROFILE – UK Two significant use
Slide 51: Last Mile Delivery Hubs – Overview
LAST MILE DELIVERY HUBS – OVERVIEW Annexure G Partnership with Picup • Convergence of e-commerce, last mile delivery technology and prime located self storage properties • Three last mile hubs in operation – Cresta, Brooklyn and Kempton Park • Picup – provides logistics software solutions for e-comm
Slide 52: Digital First – Overview
DIGITAL FIRST – OVERVIEW Annexure H The opportunity • Highly skilled in-house digital marketing capability Proven capability Deep industry • Google and Facebook are global platforms to capitalise on specific audience fast-changing knowledge for • Opportunity to leverage ‘low-cost’ emerging market pl
Slide 53: Digital First – Digital Marketing Platform
DIGITAL FIRST – DIGITAL MARKETING PLATFORM Annexure H Key features SCOTTISH CASE STUDY¹ • Full service digital marketing agency, focused on the self storage Immediate and sustained impact on enquiry sector – launched in July 2020 generation and reduction of advertising • Stor-Age = accredited Google
Slide 54: UK and European Self Storage Industry – Overview
Annexure I UK AND EUROPEAN SELF STORAGE INDUSTRY – OVERVIEW UK self storage industry¹ European self storage industry (excluding UK)³ 2 050 83.3% 2 931 Self storage properties, Occupancy on current Self storage properties includes 621 container lettable area operators 63.6 million sqf Population 86.2
Slide 55: UK Self Storage Industry – Rate and Occupancy
UK SELF STORAGE INDUSTRY – RATE AND OCCUPANCY Annexure I Source: The Self Storage Association UK annual industry report, May 2022 STOR-AGE PROPERTY REIT LIMITED 55
Slide 56: 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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