Londonmetric Property Plc · LSE:LMP
Londonmetric Property — FY2022 Earnings Presentation
38 slides from Londonmetric Property's earnings presentation, May 26, 2022
Slide 1: Full Year Results
FULL YEAR RESULTS Year Ended 31 March 2022 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Overview
Overview Sector calls, asset selection and income focus delivering portfolio outperformance • Macro trends continue to shape the portfolio Urban logistics assets – Aligned to winning sectors – logistics 74.6% | long income 22.5% £1.6bn Up 59% – Urban logistics exposure 43.9% Contracted rental income
Slide 4: Financial Highlights
Financial Highlights Full Year to 31 March 2022 March March Change FY 22 dividend cover 2022 2021 109% Net Rental Income £133.1m £123.3m +7.9% Allowing further progression EPRA Earnings £93.5m £85.6m +9.2% Valuation gain +£632m EPRA Earnings (pps) 10.04p 9.52p +5.5% -61 bps, +10% ERV LTV Dividend (p
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 31 March 31 March Change Net rental income 2022 2021 +7.9% Net rental income £133.1m £123.3m +42% over 3 years Administrative costs £(16.1)m £(15.8)m EPRA cost ratio3 Net Finance costs £(24.7)m £(22.5)m 12.5% -110 bps over last 12 months EPRA Earnings £93.5m £85.6m +9.2% Income lea
Slide 7: Balance Sheet
Balance Sheet1 31 March 2022 31 March 2021 Change Property portfolio2 £3,598.4m £2,588.7m Cash £54.3m £54.6m Debt £(1,053.7)m £(877.0)m Fair value of derivatives £0.1m £(0.6)m Other net liabilities £(39.4)m £(34.4)m IFRS Net Assets £2,559.7m £1,731.3m EPRA Adjustments £0.1m £0.6m EPRA Net Tangible A
Slide 8: Financing
Financing Debt Metrics1 31 March 2022 31 March 2021 Debt expiry profile (£m) Total facilities £1,297m £1,045m Gross Debt £1,054m £877m 1,200 50.0 191.5 Headroom £299m £225m 1,000 40.0 225.0 Average maturity2 6.5 years 4.2 years 800 Hedging2 71% 45% 1,297.0 600 Average cost of finance 2.6% 2.5% 400 7
Slide 9: Contracted Income Progression
Contracted Income Progression 150.0 4.3 2.0 5.5 3.3 140.0 6.9 (£m) 130.0 151.1 148.8 151.1 143.3 120.0 140.0 133.1 110.0 100.0 March 22 Contracted Post Year End Pro Net Rent to Development Forma Contracted Rent Rent Development2 Asset Net Divestment (ex developments) @ Mar-221 Management3 (Exchanged
Slide 10: Delivering Long Term Shareholder Returns
Delivering Long Term Shareholder Returns Consistently delivering attractive compound led returns Net Rental Income Earnings Total Property Return Total Shareholder Return (£m) (pps) (rebased to 100)2 (rebased to 100)1,2 140 11.0 320 400 Dividend 10.0 300 Share price 120 350 9.0 280 100 8.0 260 300 7
Slide 11: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 12: Our Portfolio
Our Portfolio Aligned to structurally supported sectors Value1 EY2 EY H1 CVg3 FY CVg3 FY TPR3 (£m) (%) mvmt (%) (%) (%) 31 March 22 (bps) Urban, Urban 1,577 4.1 -70 11.0 28.4 33.3 43.9% Regional 681 4.1 -51 9.3 29.6 34.0 Distribution Mega 425 3.7 -48 6.2 17.2 20.7 Grocery-led 74.6% long income, 22.5
Slide 13: Distribution
Distribution Aligned to a structurally supported sector enjoying highly favourable demand/supply dynamics Urban Regional Mega Value £2,684m Up from £1,830m Occupancy 98% Mega & regional: 100% WAULT 11.3 years • 127 assets • 13 assets • 3 assets Up from 10.6 years • £57m rent (£7.50 psf) • £27m rent
Slide 14: Long Income
Long Income Operationally light assets let to high quality occupiers with long and strong income characteristics Grocery NNN Retail Trade & DIY Value2 £809m Up from £635m WAULT 14 years Unchanged Occupancy 100% • 67 assets • 23 assets • 31 assets Unchanged • £16m rent (£18.80 psf) • £13m rent (£19.8
Slide 15: Investment Activity
Investment Activity Adding quality long let assets aligned to structurally supported sectors and strong geographies Acquisitions - £575m1 Disposals - £208m Sector Value NIY Value NIY Logistics £432m 4.1% Logistics £111m 4.1% Long Income £143m 5.5% Long Income £59m 5.9% Post Period End £43m 5.0% Reta
Slide 16: Targeted Asset Management
Targeted Asset Management Lettings and regears helping to deliver +5.4% LFL income growth 77 letting & regears +£8.5 million rent Business Services & WAULT: 16 years Trade, 35% Development lettings Grocery & FY 22 0.5m sq ft Roadside, Retail Take up 11% BREEAM Excellent Logistics, 11% (by occupier E
Slide 17: Rent Reviews
Rent Reviews 89 reviews generating +£2.0m pa income LMP Rent Reviews (FY 22) 1 89 rent reviews 25% +£2.0m rent 22% Market Contractual RPI index Made up of: 20% 17% 16% 16% Contractual 15% CPI index +12.6%1 10% 8% +£1.3m rent 5% 5% Open Market +18.7% 0% Urban Regional Mega Long Income +£0.7m rent LMP
Slide 18: Development Activity
Development Activity De-risked development activity adding high quality assets Six developments underway • Short cycle activity, six developments for delivery in FY23 855,000 sq ft 95% BREEAM Very Good • De-risked with 96% pre-let, WAULT of 20 years Total cost • £6.8m additional income, 4.5% YoC £14
Slide 19: Upgrading Our Portfolio
Upgrading Our Portfolio Improving the sustainability of our portfolio through refurbishment and green initiatives Portfolio EPC A-C rated • Strong stewards of underinvested assets, with capital and expertise 85% • Cost effective improvements through regears/accretive capex Up from 74% in year • Occu
Slide 20: Outlook
LONDONMETRIC lay PROPERTY PLC OUTLOOK
Slide 21: Logistics Market Outlook
Logistics Market Outlook Continued strong demand from occupiers and investors • Investors continue to re-allocate capital to winning sectors LondonMetric PPE Disposals – Record logistics investment 2021, Q1 22: + 19% YoY £86m | NIY 3.8% +14% ahead of book • Occupier demand remains high LondonMetric
Slide 22: Real Estate Outlook
Real Estate Outlook Structurally supported real estate with strong and growing income characteristics will continue to deliver • Macro environment supportive of the right real estate – Covid has accelerated changes to how we work, shop & socialise – Geo political events are disrupting supply of good
Slide 23: Appendices
LONDONMETRIC lay PROPERTY PLC APPENDICES
Slide 24: Amazon Warehouse Capacity
Amazon Warehouse Capacity Warrington Bedford 24
Slide 25: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Rent Average Area (Share) Surplus/(Deficit) CVg2,4 Occupancy NIY1 (years) Rent Uplifts Rent As at 31 March 2022 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.4 425.2 71.2 20.1 17.2 100.0 3.1 17.8 17.
Slide 26: Total Property Returns – LondonMetric
Total Property Returns – LondonMetric 250 Urban (+146%) 225 Regional (+127%) 200 Mega (+90%) LMP All Property (+90%) 175 150 Long Income (+51%) MSCI All Prop (+37%)2 125 100 H1 FY19 H2 FY19 H1 FY20 H2 FY20 H1 FY21 H2 FY21 H1 FY22 H2 FY22 1. Source: MSCI to 31 March 2022 26 2. Comparison MSCI benchma
Slide 27: Income Breakdown
Income Breakdown Delivering long term reliable, repetitive & growing income Top occupiers Contractual Uplifts 60.9% 4.1% Primark 8.2% Fixed 3.4% Uplift, Amazon Market 14.3%, 3.4% Review, 2.9% Mar 2022 39.1%, RPI Argos 3.4% Linked, 2.9% Mar 2021 30.2%, THG CPI 0.0% Linked, 2.8% Eddie Stobart 16.4%, 3
Slide 28: Inflation captured through contractual rent reviews
Inflation captured through contractual rent reviews Warrington Our index linked reviews have a range of collars and caps typically between 1% to 4% over a five year period: Bedford • At 16% inflation over a five year period (3% p.a.), 99% of inflation is captured under our RPI linked rent reviews (1
Slide 29: Distribution Assets
Distribution Assets Largest assets Occupier Annualised (by value) rent (£m) Islip 1 Primark 5.8 Dagenham 2 Eddie Stobart 4.1 Bedford 3 Argos 4.1 Warrington 4 THG 4.1 North East & Yorkshire Croydon 5 Tesco 1.9 4&7 4% North West 9 Bedford 6 Movianto 2.8 10% Warrington 7 Amazon 2.4 Other 1 1% Waltham C
Slide 30: Net Zero Carbon Ambition
Net Zero Carbon Ambition #1 Operations to be #2 Developments to be #3 Buildings to be net zero by 2023 net zero by 2030 net zero by 2035 Assets where we have control & Reduce emissions from Help occupiers to lease NZC ready management will be NZC by 2023 development & offset residual buildings, offs
Slide 31: Developments Summary
Developments Summary Incurred to date Sq ft PC1 BREEAM Rent/ YOC Total Prior FY FY Comment 000 uplift (%) cost Years 22 23 £m £m £m £m £m Tyseley (Phase 2) 120 Q3 21 Excellent 1.6 6.0 27 15 12 - Urban Logistics let to Amazon Bedford (Unit 1) 355 Q4 21 Excellent 2.9 7.8 37 20 17 - Pre Let to Movianto
Slide 32: Urban refurbishment/redevelopment in London
Urban refurbishment/redevelopment in London Acquiring assets in the best urban centres, adding value at yields materially above investment value Recently completed (37,000 sq ft) Underway/planned (76,000 sq ft) Brent Cross Tottenham Tottenham 18,000 sq ft 23,000 sq ft • Acquired vacant Brent Cross L
Slide 33: Acquisitions – Distribution (FY 2022)
Acquisitions – Distribution (FY 2022) Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B Worthing 19.0 4.8 5.2 15.0 15.0 Cardiff 11.1 5.0 5.8 9.9 9.9 Waltham Cross 43.8 3.5 4.0 23.0 23.0 Uckfield 10.3 3.7 4.2 15.2 15.2 Exeter 6.1 4.2 5.0 17.1 17.1 Croydon 5.2 4.5 6.2 4.3 4.3 Tottenham
Slide 34: Acquisitions – Long Income (FY 2022)
Acquisitions – Long Income (FY 2022) Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B South Ruislip 18.0 4.5% 5.0% 9.4 9.4 McDonalds (x5) portfolio 6.9 3.6% 6.7% 16.3 16.3 Truro 6.6 6.9% 6.9% 10.1 10.1 Halfords (x4) portfolio 5.8 5.5% 6.0% 15.0 10.0 Bognor 2.5 5.0% 5.3% 5.7 4.0 Thane
Slide 35: Disposals – Distribution & Long Income (FY 2022)
Disposals – Distribution & Long Income (FY 2022) Value WAULT Sector Yield (LM share) (years) £m % Expiry 1B Thrapston Distribution 102.0 4.1 11.2 11.2 Crawley Distribution 8.5 3.5 3.3 1.4 North Shields Long Income 6.0 7.6 4.8 4.8 Derby Long Income 6.2 5.7 15.0 15.0 Inverness Long Income 1.0 11.3 0.4
Slide 36: Post Period End - Investment Activity
Post Period End - Investment Activity Acquisitions Sector Value (LM share) Yield WAULT (years) £m NIY Reversion1 Expiry 1B Colliers Wood Distribution 4.1 4.3 4.3 - - Stratford Distribution 6.0 4.5 4.5 - - Hackney Distribution 2.6 4.4 5.2 20.0 20.0 Leicester Distribution 19.6 4.5 5.0 10.7 10.7 Ipswic
Slide 37: Debt Facilities
Debt Facilities Lender Facility Maturity1 Expiry (£m) (years) Wholly-owned portfolio 2024 Unsecured RCF Syndicate 225.0 2.1 (with 2x1 year options) 2026 Unsecured RCF Wells Fargo 175.0 4.1 (with 2x1 year options) Unsecured short-term Barclays 150.0 1.3 2022-23 Private Placement 2021 Syndicate 380.0
Slide 38: Historic Debt Metrics
Historic Debt Metrics Warrington Bedford Loan to Value Ratio Cost of Debt Debt Maturity Interest Cover Ratio (%) (%) (years) (x) 40 4.0 8.0 6.0 38 35 36 5.5 3.5 3.5 5.2 32 6.4 6.5 5.0 5.0 32 5.0 3.1 4.7 30 29 30 3.0 2.9 6.0 4.5 2.8 5.6 4.3 2.6 5.2 2.5 4.8 4.7 4.0 4.2 20 2.0 4.0 3.0 10 1.0 2.0 2.0 20