Slide 1: Investor Presentation Annual Results 2019
Investor Presentation Annual Results 2019 Reliable Strong Performance regionalreit.com Highly Diversified and Defensive Portfolio regionalreit.com
Slide 2: Introduction
Introduction Highlights Stephen Inglis Chief Executive Officer COVID-19: Our Preparedness Portfolio Derek McDonald Managing Director Appendix Simon Marriott Investment Director regionalreit.com Offices held at London and Scottish Property Investment Management Asset Manager to Regional REIT 1
Slide 3: Regional REIT – Who we are and how we de-risk
Regional REIT – Who we are and how we de-risk Experience Hugely experienced senior management team, managing assets over the past 30 years, including previous downturns. 2008-12 increased income across the portfolio Specialised Asset Management Team Multiple touch points with our customers • Proven
Slide 4: Financial Highlights – Defensive active asset management delivering yield
Financial Highlights – Defensive active asset management delivering yield Dividend yield c.11%* +c.2.5% Dividend declared for 2019 Quarterly dividend • FY 2019 : 8.25pps • FY 2018: 8.05pps Total EPRA accounting return • Since IPO** 43% • Annualised 9%, IRR 10% Aztec West, Bristol Portfolio increased
Slide 5: 2019 Portfolio Highlights
2019 Portfolio Highlights Proactive property asset management achieving outperformance Occupancy UK Property Locations as at 31 December 2019 • EPRA Occupancy (by ERV) was 89.4% (2018: 89.4%) Capital rate per sq. ft. of £105.42 as at 31 Dec 19 (2018: £96.64) • Office: £135.34 per sq. ft (2018: £126.
Slide 6: 2019 Portfolio Highlights
2019 Portfolio Highlights Major lettings and renewals successfully secured across the regions Century Way, Thorpe Park, Leeds New 10-year lease agreed with Marlow Kingscourt Leisure Complex, Dundee Foods Ltd for 10,550 sq. ft. at a rent of A new 10 year tenancy extension £211,600 pa agreement has be
Slide 7: COVID-19: Our Preparedness
COVID-19: Our Preparedness regionalreit.com
Slide 8: COVID-19 & Our Preparedness
COVID-19 & Our Preparedness Q1 2019 Q1 2020 Change Liquidity Update % of rent invoiced and collected* 83.1% 81.6% (150bps) Switched to monthly rents (Paid and agreed to pay) 4.8% Agreed to pay in 7 days 2.3% Total 88.7% Cash balance** £42.6m c.£69.1m +£26.5m Gross Borrowings** £340.3m £369.1m +£28.8
Slide 9: COVID-19 & Our Preparedness
COVID-19 & Our Preparedness Impact • c.41% are multinational or FTSE 350 and above companies • c.51% of tenants classified as essential services as set out in the Government guidelines Outlook & Dividend • Continue to adapt to the rapidly evolving situation, and our asset management experience throu
Slide 10: COVID-19 & Our Preparedness
COVID-19 & Our Preparedness Essential Services Breakdown by SIC Tenants as a % of gross rent 1% 3% 2% 1% 1% 3% 2% 2% 5% 2% 17% 2% 5% 5% 7% 7% 17% 7% 8% 8% 14% 8% 10% Manufacturing Public Sector 51% Financial and insurance activities (Other) Banking Electricity, gas, steam and air conditioning supply
Slide 11: Summary
Summary Managed assets in previous downturns Experience Adapting to the situation (All 904 tenants last filed accounts have been analysed) Diversification Breadth and quantum of tenant income Liquidity Defensive and ample liquidity Outlook Adapting to a rapidly evolving situation regionalreit.com 10
Slide 12: Portfolio
Portfolio regionalreit.com
Slide 13: £787.9m Property Portfolio
£787.9m Property Portfolio Sector Split (% by value) IPO – November 2015 31 December 2018 31 December 2019 5.0% 7.1% 1.4% 5.0% 11.3% 1.4% 15.5% 13.7% Office Industrial £386.1m £718.4m £787.9m Retail Other 25.3% 58.4% 76.1% 79.9% Regional Split (% by value) 3.9% 2.5% 2.7% 10.1% 8.2% 12.7% 9.7% 29.7%
Slide 14: Highly Diversified Portfolio
Highly Diversified Portfolio Diversified Tenant Base Tenants by SIC code, as a % of gross rent Professional, scientific and technical activities • Diversified income - large tenant mix with 904 tenants and 1,251 units Administrative and support 19.3% 13.0% service activities • Large spread of tenant
Slide 15: Appendix
Appendix Financial Information Property Portfolio Portfolio Activity • Disposals • Acquisition regionalreit.com Appendix
Slide 16: Financial Information
Financial Information regionalreit.com Appendix
Slide 17: Delivering on our Strategy
Delivering on our Strategy Dec 2018 Dec 2019 Change Portfolio Management Investment Property £718.4m £787.9m £69.5m Targeted and opportunistic acquisitions; disposals when asset Acquisitions before costs £73.3m £87.1m £13.8m management initiatives achieved Acquisition Net Initial Yield 8.7% 8.6% (10
Slide 18: Financial – Statement of Comprehensive Income
Financial – Statement of Comprehensive Income Year-end 2018 Year-end 2019 Change (£’000) (£’000) (£’000) Rental and property income 74,019 75,645 1,626 Property costs (19,644) (20,681) (1,037) Net rental and property income 54,375 54,964 589 Administrative & other expenses (17,586) (10,904) 6,682 Op
Slide 19: Financial – Statement of Financial Position
Financial – Statement of Financial Position Year-end 2018 Year-end 2019 Year-end 2018 Year-end 2019 Change Change (£’000) (£’000) (£’000) (£’000) Assets Non-current Assets Liabilities Current liabilities Investment properties 718,375 787,915 69,540 Right of use assets - 16,351 16,351 Bank and loan b
Slide 20: Generating Diversified Stable Income
Generating Diversified Stable Income Year ending 31 December 2018 Year ending 31 December 2019 Change* Net rental and property income £54.4m £55.0m +£0.6m Operating profit before gains/losses on property assets/other investments £36.8m £44.1m +£7.3m IFRS EPS (fully diluted) 18.1pps 6.6pps (11.5pps)
Slide 21: Financial Position Remains Strong, Flexible and Defensive
Financial Position Remains Strong, Flexible and Defensive Year ending 31 December 2018 Year ending 31 December 2019 Change Investment Property £718.4m £787.9m £69.5m NAV (fully diluted) 115.2pps 112.1pps (3.1pps) EPRA NAV (fully diluted) 115.5pps 112.7pps (2.8pps) Borrowings (incl. retail eligible b
Slide 22: Delivering Returns to Shareholders
Delivering Returns to Shareholders • EPRA : £486.3m (112.7pps fully diluted) (31 Dec’18: £430.5m, 115.5pps fully diluted) • IFRS: £483.7m (112.1pps fully diluted) (31 Dec’18: £429.5m, 115.2pps fully diluted) regionalreit.com Table may not sum due to rounding. 21
Slide 23: Debt Facilities – protectionist strategy
Debt Facilities – protectionist strategy Lender Original Facility Outstanding Debt* Maturity Date Gross Loan to Annual Interest £'000 £'000 Value** % Rate % Royal Bank of Scotland 55,000 48,584 Jun-24 39.8 2.15 Over 3mth £ LIBOR Scottish Widows Ltd. & Aviva Investors Real Estate 165,000 165,000 Dec-
Slide 24: Debt Metrics
Debt Metrics Net Loan to Value (%) Weighted Average Cost of Debt (%) Weighted Average Debt (years) 50 3.9 9 8 47.3 3.8 7.8 45 3.8 3.8 3.8 45.0 7 7.3 3.7 6.4 3.7 6 41.2 6.0 40 39.9 5.4 5 38.9 38.3 3.6 4 35 3.5 3.5 3.5 3 2.3 30 3.4 2 Half-Year Full- Year Half-Year Full- Year Half-Year Full- Year Half-
Slide 25: Property Portfolio
Property Portfolio regionalreit.com
Slide 26: Overview – Specialised platform and diverse assets
Overview – Specialised platform and diverse assets UK property locations as at 31 December 2019 Portfolio details as at 31 December 2019 Capital Valuation % by Sector Properties Values (£m) valuation (£psf) Office 116 629.7 79.9% 135.34 Industrial 18 107.7 13.7% 48.85 Retail 23 39.2 5.0% 84.19 Other
Slide 27: Diversified Income Stream
Diversified Income Stream Portfolio details at 31 December 2019 Gross % by Occupancy WAULT to Average Capital Sector Properties Valuation Sq. ft. rental ERV Yield valuation (EPRA) first break rent rate income (£m) (mil) (%) (yrs) (£m) (£psf) (£m) (£psf) Net initial Equivalent Reversionary Office 116
Slide 28: Top 15 Tenants (Share Of Rental Income)
Top 15 Tenants (Share Of Rental Income) WAULT to Annualised % of Gross Lettable area Tenant Property Sector first break gross rent rental (Sq Ft) (years) (£m) income Administrative and support service Barclays Execution Services Ltd Tay House, Glasgow 1.9 78,044 1.6 2.5% activities Bank of Scotland
Slide 29: Top 15 Investments (Market Value)
Top 15 Investments (Market Value) Lettable EPRA Annualised Market value % of gross WAULT to % of area Occupancy gross rent Property Sector Anchor tenants rental first break portfolio income (years) (£m) (Sq Ft) (%) (£m) Barclays Execution Services Ltd, University of Tay House, Glasgow Office 33.7 4.
Slide 30: Diversified Office – led portfolio focused on the UK regions
Diversified Office – led portfolio focused on the UK regions Gross property assets by value - %* WAULT - years Average Rent & Capital rate - £psf 100% 6.0 £10 £120 £9.40 £9 £105.42 90% 13.7% £8.18 15.5% 5.0 £96.64 £100 5.4 5.4 5.5 £8 80% 23.3% £82.14 70% £7 4.0 £80 60% £6 3.0 3.5 3.5 £5 £60 50% 3.4
Slide 31: Investment Property Activity – proactive strategy
Investment Property Activity – proactive strategy Investment Properties Bridge 840 31 December 2019 820 800 1.7 787.9 89.9 5.8 780 (3.5) 760 740 718.4 720 £ millions 700 680 (24.3) 660 640 CAPEX yet to be captured in the valuations 620 600 580 560 Valuations Disposals (Net of Acquisitions Gain/(loss
Slide 32: Portfolio Activity
Portfolio Activity • Disposals • Acquisition regionalreit.com Appendix
Slide 33: Disposals
Disposals regionalreit.com
Slide 34: Summary – Disposals during 2019
Summary – Disposals during 2019 Sector Split • Disposals totalled £24.3m (net of costs) 45.4% Office • Reflecting an average net initial yield of 6.8% Industrial 54.6% • 3 assets and 5 part sales in total during 2019 • Disposals achieved an average uplift against December 2018 valuation of 10.3%, Re
Slide 35: Aspect Court, Pond Hill, Sheffield
Aspect Court, Pond Hill, Sheffield Acquired May 2016 A 57,976 sq. ft. fully let city centre office property with 37 on site car parking spaces and within walking distance of Sheffield station and university campus At acquisition, the property was fully let to Sheffield Hallam University and SDL Plc
Slide 36: Tokenspire Business Park, Beverley
Tokenspire Business Park, Beverley Acquired in March 2016 as part of the Wing portfolio, a multi-let industrial property within a secure site The industrial estate extends to over 24 acres and consists of 322,211 sq. ft. of commercial space The park is situated on the A1174 and is located 10 minutes
Slide 37: Acquisition 2019
Acquisition 2019 regionalreit.com regionalreit.com
Slide 38: Summary – Acquisitions during 2019
Summary – Acquisitions during 2019 Sector Split 2.9% • Acquisitions totalled £87.1m (before costs) • Reflecting an average net initial yield of 8.6% Office Industrial • Providing a combined annualised gross rental income of c.£8.0m (as at 31 Dec 19) 97.1% • 13 assets acquired in total Regional Split
Slide 39: Norfolk House, Birmingham
Norfolk House, Birmingham Acquisition of office property for £20.0m, with a current net initial yield of 7.9%, in an off market transaction. The freehold property is in a highly commercial location in the centre of Birmingham; situated adjacent to Birmingham New Street Station, the Bullring Shopping
Slide 40: Acquisition of £25.9 million portfolio
Acquisition of £25.9 million portfolio Acquisition of a portfolio of six office assets for a total consideration of £25.9million The portfolio comprises six offices located in Birmingham, Bristol, Cardiff, Chester, Glasgow and Manchester The assets total circa 172,442 sq. ft. The portfolio is expect
Slide 41: Acquisition of £27.7 million portfolio
Acquisition of £27.7 million portfolio Acquisition of a portfolio of four office assets for a total consideration of £27.7million The portfolio comprises four multi-let offices located in Redhill, Harefield, Bristol and High Wycombe The assets total circa 131,036 sq. ft. The portfolio is expected to
Slide 42: 2 Lochside Avenue, Edinburgh
2 Lochside Avenue, Edinburgh Acquisition of a valuable office asset in one of Scotland's premier business parks for a total consideration of £10.3m The office asset comprises 43,676 sq. ft. over 3 floors, currently 100% let to John Menzies plc, an international aviation business and one of Scotland'
Slide 43: Disclaimer
Disclaimer This document (“Document”) (references to which shall be deemed to include any information which has been made or may be supplied orally in connection with this Document or in connection with any further enquiries) has been prepared by and is the sole responsibility of Toscafund Asset Man