Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — FY2021 Earnings Presentation
63 slides from Stor-age Property Reit's earnings presentation, March 2021
Slide 1: Annual Results Presentation
STOR-AGE PROPERTY REIT ANNUAL RESULTS PRESENTATION YEAR ENDED 31 MARCH 2021 STOR-AGE PROPERTY REIT LIMITED 1
Slide 2: Presentation Outline
PRESENTATION OUTLINE Page Introduction 4 Financial review 11 Strategy 21 Property review 24 Environmental, Social and Governance 42 Operations review 48 Outlook 56 STOR-AGE PROPERTY REIT LIMITED 2
Slide 3: Annexures
ANNEXURES Page A: Our customers 58 B: Digital marketing – quick facts 60 C: Overview of UK & European self storage industry 61 STOR-AGE PROPERTY REIT LIMITED 3
Slide 4: Introduction
INTRODUCTION STOR-AGE PROPERTY REIT LIMITED 4
Slide 5: Highlights
HIGHLIGHTS Final dividend 54.08 cents per share – up 4.0% on interim dividend Rental income and net property operating income up 19.3% and 20.2% respectively Like-for-like rental income up 13.1% (SA 8.6%; UK 6.3%) Like-for-like SA and UK average rental rate up 5.1% and 2.3% respectively Closing tota
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 capitalisation R5.7 billion² 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, an excellent operating performance has been delivered, inc
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 performance: positive divergence 170 relative to SAPY 45 40 150 1 35 2 Number of shares (Millions) 130 3 132 May 2020 30 R250m equit
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: Financial Review
FINANCIAL REVIEW STOR-AGE PROPERTY REIT LIMITED 11
Slide 12: Occupancy and Tenant Profile
OCCUPANCY AND TENANT PROFILE OCCUPANCY PROFILE 31 Mar 2021 31 Mar 2020 GLA m2 Occupied m2 % occupied GLA m2 Occupied m2 % occupied SA 366 000 329 300 90.0 365 400 310 400 85.0 UK 82 800 74 900 90.4 82 800 65 300 78.8 Total 448 800 404 200 90.1 448 200 375 700 83.8 TENANT PROFILE 31 Mar 2021 31 Mar 2
Slide 13: Trading Results – SA
TRADING RESULTS – SA 31 Mar 2021 31 Mar 2020 % Variance LFL Acquisitions Total LFL Acquisitions Total LFL Total Rm Rm Rm Rm Rm Rm Rental income Self storage 404.7 5.8 410.5 372.5 1.5 374.0 8.6% 9.8% Other 7.8 - 7.8 8.2 - 8.2 (5.0)% (5.0)% Ancillary income 16.4 0.4 16.8 13.2 0.1 13.3 24.2% 26.4% Sund
Slide 14: Trading Results – UK
TRADING RESULTS – UK 31 Mar 2021 31 Mar 2020 % Variance LFL Acquisitions Total LFL Acquisitions Total LFL Total £’000 £’000 £’000 £’000 £’000 £’000 Rental income Self storage 12 068 2 164 14 232 11 352 606 11 958 6.3% 19.0% Other 450 67 517 436 25 461 3.2% 12.1% Ancillary income 1 162 288 1 450 1 08
Slide 15: Distribution Analysis
DISTRIBUTION ANALYSIS 31 Mar 2021 31 Mar 2020 Rm Rm Net property operating income - SA 329.8 296.2 Net property operating income – UK1 242.1 177.8 Rental guarantee and underpin 15.5 42.9 Management fees 4.5 4.7 Administration expenses2 (73.3) (48.0) Interest income 44.4 58.3 Interest expense (107.9)
Slide 16: Balance Sheet – Summarised
BALANCE SHEET – SUMMARISED 31 Mar 31 Mar 31 Mar 31 Mar 2021 2020 2021 2020 Rm Rm Rm Rm ASSETS LIABILITIES Non-current assets Non-current liabilities Investment properties 7 567 6 736 Bank debt 1 347 2 045 SA Freehold 4 545 3 974 SA 304 800 SA Leasehold 110 114 UK 1 043 1 245 UK Freehold 2 559 2 324
Slide 17: Capital Structure
CAPITAL STRUCTURE 31 Mar 2021 ZAR facilities GBP facilities GBP facilities Total facilities Rm £m Rm Rm Total debt facilities 1 555.0 57.7 1 176.8 2 731.8 Undrawn debt facilities 419.7 0.9 18.3 438.0 Gross debt 1 135.3 56.8 1 158.5 2 293.8 Gross debt net of cash held in debt facilities 835.8 56.8 1
Slide 18: Currency Hedging
CURRENCY HEDGING HEDGING OF NET INVESTMENT IN STORAGE KING 31 Mar 2021 31 Mar 2020 GBP m GBP m Investment property 155.3 132.9 Bank debt (56.8) (56.2) Other assets 8.0 8.6 Leasehold liabilities (12.6) (13.3) Other liabilities (10.9) (7.1) Net investment 83.0 64.9 Nominal value of currency hedging in
Slide 19: Currency Hedging (continued)
CURRENCY HEDGING (continued) HEDGING OF GBP EARNINGS Six month period ending Hedging level % Forward rate R/£ Mar 21 100 R 23.02 Sep 21 85 R 23.23 Mar 22 85 R 23.48 Sep 22 80 R 24.28 Mar 23 80 R 24.29 Sep 24 50 R 23.74 Hedging policy based on projected forward GBP earnings 12 13-24 25-36 months mont
Slide 20: Covid-19 – Resilience in Crisis
COVID-19 – RESILIENCE IN CRISIS • Priority remained ensuring the safety of employees and customers • Provided PPE and immediately educated staff on / and introduced new safety protocols – including sanitisers and social distancing measures • Activated an online e-sign capability in SA and the UK for
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 74 The portfolio comprises 52 properties in SA and 22 properties in the UK SA PORTFOLIO UK PORTFOLIO² 52¹ properties 22¹ properties R4.7bn R2.9bn 366 000m² GLA 82 800m² GLA 27 300 tenants 11 100 tenants 52 22 1. Includes Sunningdale and Tyger Valley in SA (opened May 2021) and Bla
Slide 26: Portfolio Analysis
PORTFOLIO ANALYSIS Total number of Total property value Total number of tenants Total GLA properties¹ R7.6bn 38 400 448 800m2 74 Value of properties Number of tenants GLA Number of properties 18% 29% 30% 38% 62% 71% 70% 82% South Africa UK 1. Includes Sunningdale and Tyger Valley in SA (opened May 2
Slide 27: South Africa
SOUTH AFRICA Strategy • Continue to see opportunities for third party acquisitions – highly selective • Continue to develop high barrier-to-entry big box properties in outstanding locations • SA institutional funding partner to replicate Moorfield JV model for SA market – in advanced discussions to
Slide 28: Sunningdale – Completed Development
SUNNINGDALE – COMPLETED DEVELOPMENT Located prominently on the corner of Berkshire Boulevard and Whitehall Way and Table Bay Mall close to the new Table Bay Mall, the property will comprise 6 350m² of GLA (on full fit- Atlantic Beach out) with excellent visibility to commuters accessing the retail a
Slide 29: Tyger Valley – Completed Development
TYGER VALLEY – COMPLETED DEVELOPMENT Located in Cape Town’s northern suburbs, the property is situated on Durban Road with visibility to the intersection of Durban Road and the N1 highway. The property will comprise 7 100m² of GLA (on full fit-out) over six levels with the design Durbanville caterin
Slide 30: Cresta – Current Development
CRESTA – CURRENT DEVELOPMENT Located prominently on the corner of Weltevreden Road and Valley Lane, the new BMW Northcliff Stor-Age Cresta will sit directly opposite the open parking area to the Cresta Shopping Cresta Shopping Mall. Mall Virgin Active Cresta The property will comprise an estimated 7
Slide 31: Development Pipeline
DEVELOPMENT PIPELINE • Dominated by high profile big box properties in outstanding locations • Eight¹ properties offering an estimated 46 500m² GLA at an approximate cost of R685m • Three new properties secured – brownfield conversions › Pinelands › Paarden Eiland › Kramerville (subject to due dilig
Slide 32: 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 of GLA on completion (on full fit out). Forest Drive The existing buildi
Slide 33: 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 of GLA over fi
Slide 34: Last Mile Delivery Hubs – Exploring the Opportunity
LAST MILE DELIVERY HUBS – EXPLORING THE OPPORTUNITY Stor-Age partnership with Picup • Convergence of e-commerce, last mile delivery technology and prime located self storage properties • Working partnership established in 2019 (www.picup.co.za) › Craighall Last Mile Delivery Hub – initial trading re
Slide 35: Craighall Hub – Typical Delivery Cycle
CRAIGHALL HUB – TYPICAL DELIVERY CYCLE 1. Online purchases / e-commerce 2. Fulfilment leg of the transaction 3. Mid Mile vehicles • Customers make online purchases for • On the Dot¹ Distribution Centre – • Mid-mile vehicles collect parcels at delivery Olifantsfontein OTD DC and deliver to Stor-Age •
Slide 36: Storage King
STORAGE KING Overview • 6th largest UK self storage brand – operating 29¹ properties throughout England • Post UK market entry in 2017 › Acquired four operators, comprising eight properties › Portfolio of owned properties grown from 14 to 22¹, valued at R2.8bn › Moorfield Development JV established
Slide 37: Moorfield Development JV
MOORFIELD DEVELOPMENT JV • Development JV entered with Moorfield, a leading UK real estate fund manager, 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 t
Slide 38: Storage King Portfolio Additions
STORAGE KING PORTFOLIO ADDITIONS • Planning and construction underway to bring online approximately 87 000 sqf GLA across six properties • Combination of development of new buildings, installation of mezzanine structures within existing buildings and fitting-out the balance of properties • c. 10% of
Slide 39: Chester – Extension
CHESTER – EXTENSION 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 King – stand-
Slide 40: Doncaster – Extension
DONCASTER – EXTENSION Storage King Doncaster is located 1.5km to the south east of Doncaster City Centre. To Doncaster The store enjoys good visibility on a City Centre roundabout as one approaches the local Football stadium football stadium and the Lakeside Village Storage King Outlet Shopping Cent
Slide 41: Bedford – Extension
BEDFORD – EXTENSION 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 of a Wicks
Slide 42: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STOR-AGE PROPERTY REIT LIMITED 42
Slide 43: ESG Strategy
ESG STRATEGY Our ESG reporting framework aligns our Vision and Core Values with relevant UN Sustainable Development Goals (SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD). Long-term ESG reporting framework adoption Environmental Social Governance Governance Strategy Risk man
Slide 44: ESG Framework
ESG FRAMEWORK Through our ESG framework we continue to monitor our impact on the economy, the workplace, the social environment and the natural environment. Decent work and economic growth Industry, innovation and infrastructure Underpinned by: Our Vision and Core Values, UN SDGs and TCFD Job creati
Slide 45: Environmental Performance
ENVIRONMENTAL PERFORMANCE Renewable energy • Commitment to › Continue investing in energy reduction initiatives › Invest in renewable energy (solar PV) – to meet each properties requirements • Investment in renewable energy to date – c.R10 million • Investment in renewable energy planned over medium
Slide 46: 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 47: Social (continued)
SOCIAL (continued) Charities/NPO’s supported • Mustadafin Foundation › Works across the Western Cape to uplift destitute communities through education, feeding schemes, health care programs, youth interventions and skills development › Established in 1986 in response to political unrest and violence
Slide 48: Operations Review
OPERATIONS REVIEW STOR-AGE PROPERTY REIT LIMITED 48
Slide 49: 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 50: Platform Overview
PLATFORM OVERVIEW STOR-AGE PROPERTY REIT LIMITED 50
Slide 51: Platform Advantage
PLATFORM ADVANTAGE Centralisation benefits • Standardisation • Quality control • Directing online marketing efforts • Pricing optimisation • Targeted promotions • Real-time data driven decision-making • Contact Centre supports SA and UK platforms, managing phone and web enquiries, including direct o
Slide 52: 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 53: 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 54: Digital 1st – Digital Marketing Platform
DIGITAL 1ST – 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 lan
Slide 55: Digital 1st – Digital Marketing Platform (continued)
DIGITAL 1ST – DIGITAL MARKETING PLATFORM (continued) Key features • Full service digital marketing agency, focused on the self storage sector – launched in July 2020 and quickly building a customer base CENTRAL LONDON CASE STUDY¹ • Stor-Age = accredited Google and Facebook marketing partner • Servic
Slide 56: Outlook
OUTLOOK • Stor-Age delivered an excellent operating performance despite the Covid-impacted operating environment • Remain conscious of the risks and aware that unexpected headwinds may materialise • In SA, further lockdowns, delays in the vaccination rollout and the possibility of a third and fourth
Slide 57: Annexures
ANNEXURES A. Our customers B. Digital marketing – quick facts C. Overview of UK and European self storage industry STOR-AGE STOR-AGE PROPERTY PROPERTY REITLIMITED REIT LIMITED 57
Slide 58: Our Customers
OUR CUSTOMERS Annexure A GEOGRAPHIC REPRESENTATION1 RESIDENTIAL / COMMERCIAL TENANT MIX BY GLA2 19 Gauteng Residential Western Cape Commercial 2 38 41 Eastern Cape 10 KwaZulu Natal 4 Free State 62 United Kingdom 24 GEOGRAPHIC FOCUS RESIDENTIAL vs COMMERCIAL Primary focus = high profile locations Res
Slide 59: Our Customers (continued)
OUR CUSTOMERS (continued) Annexure A AVERAGE LENGTH OF STAY – SA AVERAGE LENGTH OF STAY – UK 20 < 6 Months < 6 Months 31 30 6 - 12 Months 34 6 - 12 Months 12 > 12 Months > 12 Months 2 - 3 Years 10 2 - 3 Years 21 16 12 > 3 Years 14 > 3 Years DEMAND PROFILE – SA DEMAND PROFILE – UK Two significant use
Slide 60: 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 61: Overview of UK and European Self Storage Industry
Annexure C 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 62: UK Self Storage Industry – Rate and Occupancy
UK SELF STORAGE INDUSTRY – RATE AND OCCUPANCY Annexure C Source: The Self Storage Association UK annual industry report, 2021 STOR-AGE PROPERTY REIT LIMITED 62
Slide 63: 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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