Spear Reit Ltd. · JSE:SEA
Spear Reit — HY2025 Earnings Presentation
42 slides from Spear Reit's earnings presentation, Oct 24, 2024
Slide 1: Consolidated Interim Presentation: Results
UNAUDITED FOR THE PERIOD ENDED 31 AUGUST 2024 CONSOLIDATED INTERIM PRESENTATION: 24 OCTOBER 2024 RESULTS CREDIBLE PREDICTABLE CONSISTENT
Slide 2: Table of Contents
Table of CONTENTS 01. INTRODUCTION AND ENVIRONMENTAL UPDATE 02. HY2025 CORPORATE PERFORMANCE 03. HY2025 SALIENT DETAILS 04. HY2025 FINANCIAL PERFORMANCE 05. PORTFOLIO OVERVIEW 06. ACQUISITIONS, DISPOSALS, DEVELOPMENTS AND PROPERTY VALUATIONS 07. ESG 08. OUTLOOK 09. GUIDANCE 10. QUESTIONS? VIRGIN PAD
Slide 3: Introduction and Environmental Update
Presenters: Quintin Rossi CEO 01 INTRODUCTION AND ENVIRONMENTAL UPDATE MEGA PARK, BELLVILLE Christiaan Barnard CFO Kim Pfaff-Karg CIO UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 3
Slide 4: HY2025 Operating Environment
01. Introduction and Environmental Update | THE MISSION HY2025 OPERATING ENVIRONMENT To be the leading Western Cape-focused REIT and to consistently grow our distribution per share and to operate within the top quartile of our peer group. • HY2025 trading conditions remain OPERATING COST PORTFOLIO R
Slide 5: HY2025 Operating Environment
01. Introduction and Environmental Update | HY2025 OPERATING ENVIRONMENT ACQUISITIVE DEVELOPMENT CAPITAL RECYCLING LTV & HEDGING SUSTAINABILITY GROWTH GROWTH • Sale of Liberty Life Building • LTV: 23.93% • 1 new and 2 site expansions • Emira asset acquisition concluded in Q1 FY2025 completed YTD • I
Slide 6: HY2025 Corporate Performance
02 HY2025 CORPORATE PERFORMANCE 27 JUNCTION ROAD, PAROW UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 6
Slide 7: Spear Total Return HY2025
02. HY2025 Corporate Performance | SPEAR TOTAL RETURN HY2025 30% 25% 22.5% R167m 19.2m 20% 21.7% Rand value traded Volume traded during period during period 15% 10% 17.2% 5% 0% -5% -10% 289.7m Gross number of -15% shares issued -20% 24 24 24 24 4 4 02 02 20 20 20 20 r2 l2 ay ar g n Ju Ap Au Ju M M S
Slide 8: HY2025 Salient Details
03 HY2025 SALIENT DETAILS BRAVO PARK, BLACKHEATH PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 8 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 8
Slide 9: Portfolio Snapshot
03. HY2025 Salient Details | PORTFOLIO SNAPSHOT 27 7.47% 98.05% ASSETS AVERAGE IN-FORCE HY2025 CASH ESCALATIONS COLLECTIONS R4.22bn 405 709m2 97% PORTFOLIO VALUE GLA INDUSTRIAL (8.92%) 95.08% 98% PORTFOLIO VALUE DECREASE * OCCUPANCY COMMERCIAL (FY2024) 26 MONTHS 95% R153.8m WALE AVG PROPERTY VALUE R
Slide 10: Financial Snapshot
03. HY2024 Salient Details | FINANCIAL SNAPSHOT 41.61 R11.74 23.93% DIPS CENTS TANGIBLE NET LTV (SA REIT) HY2025 ASSET VALUE (TNAV) 2.05% HY2025 39.53 (0.42%) 90.45% DIPS growth DPS CENTS HY2025 DECREASE FROM FIXED DEBT RATIO FY2024 95% 25 MONTHS HY2025 AVERAGE R11.79 AVG DEBT EXPIRY PAYOUT RATIO FY
Slide 11: HY2025 Financial Performance
04 HY2025 FINANCIAL PERFORMANCE NORTHGATE PARK, BROOKLYN PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 11 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 11
Slide 12: Consolidated Statement of Comprehensive Income
04. HY2025 Financial Performance | Group CONSOLIDATED STATEMENT OF Unaudited Six months ended August 2024 Unaudited Six months ended August 2023 Variance (incl. smoothing) Like-for-like (excl. smoothing) COMPREHENSIVE INCOME Property revenue R'000 R'000 % % FOR THE PERIOD ENDED 31 AUGUST 2024 – Cont
Slide 13: Reconciliation Between Earnings and Distributable Earnings
04. HY2025 Financial Performance | RECONCILIATION BETWEEN EARNINGS AND DISTRIBUTABLE EARNINGS FOR THE PERIOD ENDED 31 AUGUST 2024 SA REIT funds from operations (SA REIT FFO) per share August August Reconciliation of FFO to distributable company FFO Profit or loss per IFRS Statement of Comprehensive
Slide 14: Consolidated Statement of Financial Position
04. HY2025 Financial Performance | Group Unaudited Unaudited Audited CONSOLIDATED STATEMENT Six months ended Six months ended Year ended August 2024 August 2023 February 2024 OF FINANCIAL POSITION ASSETS R'000 R'000 R'000 AS AT 31 AUGUST 2024 Investment property (including straight-line accrual) 4 0
Slide 15: TNAV Bridge and SA REIT LTV
04. HY2025 Financial Performance | TNAV BRIDGE AND SA REIT LTV TNAV BRIDGE Profit for the year (excl. Fair value adjustment and IFRS 2 expense for fair value adjustment) impairments future CSP 14 R0.38 R0.06 R0.02 R11.74 R11.34 12 R11.78 (R0.07) (R0.04) (R0.40) (R0.39) 10 Share for cash issue Issue
Slide 16: Funding Maturity and Funders
04. HY2025 Financial Performance | FUNDING MATURITY FUNDERS 23.93% AVERAGE COST OF 9.43% GROUP NET DEBT PROFILE AS AT 31 AUGUST 2024 FUNDING 5 bps LOAN-TO-VALUE 72% FY2027 TOTAL FIXED Robust maturity profile Variable Fixed debt NET DEBT debt DEBT EXPIRY Positive refinancing momentum 9.08% R0.92bn R1
Slide 17: Balance Sheet and Funding Update
04. HY2025 Financial Performance | BALANCE SHEET AND FUNDING UPDATE AUGUST FEBRUARY COVENANTS 2024 2024 LT V 50% 23.93% 31.60% 2.00 3.01 2.28% I CR times times times 100 FAIRWAY CLOSE, PAROW UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 17
Slide 18: Portfolio Overview
05 PORTFOLIO OVERVIEW SABLE SQUARE SHOPPING CENTRE, MILNERTON PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 18 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 18
Slide 19: Sectoral Split by Value, Revenue and GLA
05. Portfolio Overview | SECTORAL SPLIT BY VALUE, REVENUE AND GLA R4.22bn R307m 405 709m2 42% 39% 18% 1% 43% 41% 16% 26% 62% 12% Value of properties Property revenue (excluding smoothing) Gross lettable area (m 2) 27 95% 12 9 6 91% 97% 97% Number of properties Property occupancy (%) Commercial Indus
Slide 20: Sectoral Split by Sector: Industrial
05. Portfolio Overview | SECTORAL SPLIT BY SECTOR Industrial R1 638m 252 941m2 97% R124 609 39% 12% 49% 42% 11% 47% 100% 96% 94% 36% 10% 54% Property value Gross lettable area (m 2) Property occupancy (%) Property revenue (R’000) Logistics Urban Logistics Manufacturing UNAUDITED CONSOLIDATED INTERIM
Slide 21: Sectoral Split by Sector: Commercial
05. Portfolio Overview | SECTORAL SPLIT BY SECTOR Commercial R1 771m 105 343m2 28% 18% 9% 21% 7% 17% 22% 13% 11% 26% 8% 2% 1% 16% Property value Gross lettable area (m 2) 91% R131 528 90% 85% 100% 94% 77% 100% 88% 22% 18% 8% 32% 5% 14% Property occupancy (%) Property revenue (R’000) CBD Tygervalley
Slide 22: Sectoral Split by Sector: Retail
05. Portfolio Overview | SECTORAL SPLIT BY SECTOR Retail R740m 47 425m2 97% R50 667 79% 21% 54% 46% 95% 99% 80% 20% Property value Gross lettable area (m 2) Property occupancy (%) Property revenue (R’000) Convenience Retail Destination Retail UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31
Slide 23: HY2025 Letting Activity
05. Portfolio Overview | HY2025 LETTING ACTIVITY The table below reflects the letting activity of the interim period: Gross rental Average Expiries and Gross rental Average gross Renewals/ at renewals/ Average gross rental cancellations at expiry expiry rental new lets New lets new rental reversion
Slide 24: Tenant and Vacancy Profile
Analysis of the property portfolio in respect of 05. Portfolio Overview | tenant profiles TENANT AND VACANCY PROFILE ANALYSIS OF THE PROPERTY PORTFOLIO 453 405 709m 2 385 730m 2 Number of tenants GLA OCCUPIED AS AT 31 AUGUST 2024 GLA: 405 709m 2 Large national and international Based on GLA tenants,
Slide 25: Operating Environment Remains Tough Amid Macroeconomic Headwinds
05. Portfolio Overview | OPERATING ENVIRONMENT REMAINS TOUGH AMID MACROECONOMIC HEADWINDS RETAIL COMMERCIAL INDUSTRIAL 47 425M2 GLA 105 343M2 GLA 252 941M2 GLA Occupancy = 96.81% Occupancy = 90.53% Occupancy = 96.64% Collections = 95% Collections = 98% Collections = 97% Reversion = 6.98% Reversion =
Slide 26: General Business and Portfolio Update
05. Portfolio Overview | GENERAL BUSINESS AND PORTFOLIO UPDATE Operating environments remain challenging but with signs of improvement GNU has been good for business all round The core portfolio is trading well with key operational milestones being achieved Office portfolio leasing momentum has been
Slide 27: Lease Expiry
05. Portfolio Overview | LEASE EXPIRY Lease expiry profile based on GLA Total Total Total Total Total Total Total 5% 3% 19% 20% 19% 4% 30% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 18% Average 0% Vacant Monthly Expiries* Expiries Expiries Expiries Expiries 09/2024 – 08/2025 09/2025 – 08/2026 09/2026
Slide 28: Acquisitions, Disposals, Developments and Property Valuations
06 ACQUISITIONS, DISPOSALS, DEVELOPMENTS AND PROPERTY VALUATIONS RADNOR ROAD, PAROW PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 28 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 28
Slide 29: Spear Investment Strategy
06. Acquisitions, Disposals, Developments and Property Valuations | SPEAR INVESTMENT STRATEGY 1. 2. ACQUISITIONS NON-CORE DISPOSALS • Exclusively invest in the Western Cape • Industrial and retail bias • Minimum asset size R100 million (unless strategic) • Quality over Quantity • Unlock embedded por
Slide 30: Development Growth
06. Acquisitions, Disposals, Developments and Property Valuations | DEVELOPMENT GROWTH INDUSTRIAL PARK: FUTURE PHASE 1 CIVILS DEVELOPMENT COMMENCEMENT GEORGE AIRPORT GTX PARK, OWNERSHIP DEVELOPABLE SECTOR: DEVELOPMENT COST: TARGET STATUS: STAKE: GLA: Industrial - Warehousing, R300m YIELD: Bulk infra
Slide 31: Development Growth (Existing Portfolio)
06. Acquisitions, Disposals, Developments and Property Valuations | DEVELOPMENT GROWTH (EXISTING PORTFOLIO) ESTIMATED DEVELOPMENT COST: R66.5 MILLION LEASE PERIOD: GLA: SECTOR: TARGET STATUS: BRAVO PARK EXTENSION, TBA 7 000m2 Industrial YIELD: Planning RANGE ROAD, BLACKHEATH 10% phase UNAUDITED CONS
Slide 32: Development Growth
06. Acquisitions, Disposals, Developments and Property Valuations | DEVELOPMENT GROWTH GLA TO BE SECTOR: DEVELOPMENT COST: TARGET STATUS: MARINE PLACE, MARINE DEVELOPED: Mixed use R1.4bn YIELD: Commencement DRIVE, PAARDEN EILAND 52 000m2 10% TBA UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED
Slide 33: Property Valuations
06. Acquisitions, Disposals, Developments and Property Valuations | PROPERTY VALUATIONS Valuation summary and assumptions August 2024 February 2024 Valuation excl land (R'000) 4 570 974 Number of properties 27 29 % of portfolio valued externally (%) N/A 65 Valuation rate (R/m²) Industrial (R/m²) 6 4
Slide 34: Acquisitions and Disposals
06. Acquisitions, Disposals, Developments and Property Valuations | ACQUISITIONS AND DISPOSALS Property sales APPROXIMATE GLA BOOK VALUE SALE PRICE NET EXIT YIELD NET DISPOSAL PROPERTY LOCATION SECTOR (M²) (R '000) (R '000) (%) EFFECTIVE DATE PROCEEDS USE Liberty Life Building Century City Commercia
Slide 35: Post Balance Sheet Activity
06. Acquisitions, Disposals, Developments and Property Valuations | POST BALANCE SHEET ACTIVITY Post implementation and Emira Portfolio acquisition 100 Fairway Close disposal 100 Fairway Close disposal Combined Portfolio VALUE: VALUE: R1.146bn R160m YIELD: Acquisition of YIELD: 10.1% 13 properties 9
Slide 36: ESG
07 ESG VIKING BUSINESS PARK, EPPING PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 36 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 36
Slide 37: Sustainability Update
07. ESG | SUSTAINABILITY UPDATE 19 068 109 Total number of Total number of panels inverters Summary of solar PV Number of Average solar properties with solar penetration rate (%) % of portfolio with solar 2 8 6 16 2 8 6 2 16 23 33 59 Self-funded Roof rental Financed Completed solar PV systems: 16 Av
Slide 38: Outlook
08 OUTLOOK 2 LONG STREET, CAPE TOWN PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 38 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 38
Slide 39: Outlook
04. Outlook | OUTLOOK The formation of the Government of National Unity and absence of loadshedding have been Spear’s ESG strategy remains focused on delivering a people, planet and profit-aligned good for business all round outcome Spear’s Western Cape-only portfolio remains well placed to benefit
Slide 40: Guidance
09 GUIDANCE SABLE SQUARE SHOPPING CENTRE, MILNERTON PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 40 UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 40
Slide 41: Prospects and Guidance
09. Guidance | Assets PROSPECTS AND GUIDANCE Given Spear’s strategy-aligned operational and financial performance in HY2025 and the available information management has at its disposal at the interim results reporting date, management's full-year guidance will be a DIPS growth of between Consistent
Slide 42: Thank You
THANK YOU Questions? Email questions to INFO@SPEARPROP.CO.ZA Live Q&A after presentation spearreitlimited Spear REIT Limited Spear REIT Limited @SpearREIT UNAUDITED CONSOLIDATED INTERIM RESULTS / PERIOD ENDED 31 AUGUST 2024 42