Capital Markets Day 5 November 2019 Accelerating Growth in our Core Markets Creating the Future of Living
Welcome Duncan House – Health & Safety Fire Exits – two to the front of the building on the left and right as you leave • this room. Exits are clearly marked. In the event of an emergency please leave the building via these exits, turn • left out of the building and congregate in the seating area outside Eleanor Rosa House Safety around the building – please watch for trip hazards as you move • around the building 2
Agenda 12:30 Welcome Investment case Investor perspective: Student Roost Growth analysis: Residential for rent sector overview Business unit deep dives Growth strategy financials Summary Q & A 14:15 Tour of building – in groups 15:00 Finish 3
Investment Case 4 Duncan House, Stratford
Investment Case – Summary WJ is the UK’s leading developer and manager of residential for rent Opportunity to increase annual 3500 1000 volumes of deliveries across UK residential for rent (‘living sector’) PBSA BtR in our two core markets from beds units FY 23/24 utilising the established capital light, 2723 beds 0 units forward sale model delivered delivered in 2019 in 2019 driven by following current themes: WJ expertise – track Long term growing High barriers to entry record, sector demand from tenants create attractive specialism, customer and in turn institutional competitive insight & product investors environment development, delivery assurance 5
Investment Case – Established Track Record 17,721 Total Units Under 50,179 Total Units Developed and Management In Build 2,500 46,161 1,518 17,209 512 357 Homes for PBSA Beds BtR Units PBSA Beds BtR Units Staff Sale 135 90 60 c. £1.7bn 7 4 PBSA Developments PBSA Assets under BtR Schemes BtR Schemes Schemes for Sale Schemes Management Locations where WJ (1) and Fresh (2) have been active Market leading track record throughout the UK (1) since 1999 to date (2) since 2010 to date 6
Investment Case – Strong Performance Student Beds Completion Fresh Beds Under Management Operational Delivery 38.0k 17.7k 28.0k 8.3k Leading to 137% share price return (2) 2015 2019 2015 2019 while Revenue EBITDA (4) returning Financial Performance £56m in £387.7m £363.1m £52.9m £52.0m dividends since IPO (3) £244.2m £34.1m (1) (1) 2015A 2018A 2019E 2015A 2018A 2019E (1) 2019 figures refer to broker consensus estimates. (2) As at 1/11/2019 close (3) Group’s IPO was in March 2016 7 (4) Pre-exceptionals
Investment Case – Resourced for Success WJ structure built around four core business areas, employing c. 700 people Residential for Rent – PBSA, BtR Resi for Sale Investment Delivery Fresh Homes 357 people 18 people 292 people 36 people Value creation: Value protection: Consumer Self contained land buying, Provides assurance experience: Tenant house building secures planning & in project delivery & asset owner business forward sells to investors Working Together • Leverage experience across the business especially customer insight from Fresh • All business areas collaborate in devising the proposition & product for PBSA, BtR & Homes 8
Investment Case – Ready for Growth ‘ ‘Creating the future of living’ Progress with the secured pipeline already moving towards these increased levels of deliveries • 3-4 year rolling visibility of pipeline • WJ resourced & structured for this level of growth across the development lifecycle • Sufficient headroom to grow with supply chain, trade packages and subcontractors • Use of framework contractors to derisk growth – focus on core value add of upfront development expertise • Strong investor demand for product in the open market means BtR Fund is not essential • WJ PBSA Pipeline Delivery WJ BtR Pipeline Delivery 3500 3253 1136 1200 415 3000 2642 1000 2609 462 818 2500 782 800 448 800 2000 # units # beds 350 1610 600 1500 2609 400 782 213 1000 1928 159 200 500 1032 184 336 159 71 0 0 FY20 FY21 FY22 FY23 FY20 FY21 FY22 * Forward sold In legals to sell fwd fund Secured with planning * Assets owned by WJ and under offer to sell 9 Secured subject to planning Unsecured in legals ** ** WJ in legals to acquire the site
Investment Case – Risks to Growth Risk Mitigation Economic downturn Business model minimises exposure Rent controls & tenant protections – Govt initiatives to drive up standards BtR/PBSA part of solution to PRS/housing crisis Land availability, planning consent, Core expertise, track record, reputation, build assurance long term partners Forward sale liquidity Resi for rent structural growth & diversification strongly positioned for investor demand Managing additional work Resourced for growth with detailed plans in place 10
Investment Case – Well positioned for Growth PBSA & BtR (residential for rent) have long term structural growth characteristics WJ specialist in residential for rent – our consumer insight & delivery assurance Growing consumer & in turn institutional investor demand Institutional investor demand for our product and services High barriers to entry for non sector specialists – attractive competitive environment Strong investor demand for new, high-quality product drives demand for forward fund transactions De-risk development activity, capital light, visibility of longer-term earnings & quickly cash generative Balance sheet strength, resilience & agility Growth sectors, Growing investor demand, Market leading position WJ well placed to grow 11
Investor Perspective – Brookfield’s Student Accommodation 12 Hollis Croft, Sheffield
Nathan Goddard Chief Executive Officer Student Roost 13
Student Roost Portfolio Overview 14
Student Roost Brief History Company history and evolution Nottingham 1 / 2 2 Collegelands The Summit Brookfield completes Brookland Road Upperton Road Sheffield 3 Nottingham 3 2 acquisition of Student Queens Court Sheffield 2 Newcastle 1 St James’ House Snowdon Hall Newarke Street Eastern Boulevard Roost and the Portfolio Regents Court St James’ Point Trinity Square Apr-16 Oct-13 Dec-13 Feb-15 Oct-15 Apr-14 Sep-14 Dec-14 Sep-16 5,684 2,495 2,944 5,313 5,684 3,638 4,158 4,697 6,837 St Mungo Avenue Total beds operational, managed and under development Swanson House Oct-16 Back Office Operations Student Roost internalisation internalisation Brand and 8,949 Great Patrick Street completed completed website launch Hollis Croft Jan-19 Feb-18 Jul-17 Mar-17 Oct-18 May-18 Nov-17 20,846 20,759 14,943 13,121 Buchanan View Panmure Court The Depot Byrom Point Gibson Street Portsburgh Court Little Patrick Street John Bell House Mannequin House Calton Road Apollo Court Mealmarket Exchange Pittodrie Street The Old Fire Station Hydrogen Capital Gate The Heights Home Park Cornerhouse Nelson Street Myrtle Court Corfe House Tramways Laycock Studios Towpath Vincent Place The Railyard The Boulevard Chapel Heights St Davids I & II Lady Nicholson Court Operating assets Dobbie’s Point St Davids III (land) Merchant Studios Development assets (1) Nottingham 1, 2 and 3 refer to one asset; now named Nottingham 2 15
Student Roost at a glance Fourth largest privately-owned providers of student accommodation in the UK Portfolio Summary 54 PROPERTIES 20 1,500 Aberdeen CITIES BEDS IN DEVELOPMENT PIPELINE 19,000 Glasgow Edinburgh OPERATING BEDS Newcastle Portfolio Breakdown by Region* Durham Belfast York Sheffield 14% Glasgow 12% Liverpool Sheffield Belfast 11% Chester Nottingham Nottingham 9% Wrexham Leicester Leicester 9% Birmingham Liverpool 8% Swansea Birmingham 7% London Bath Other 31% Southampton *by bed numbers and includes developments Poole Bournemouth Operational Assets Secured Development Pipeline Location Sites Beds Location Sites Beds Location Sites Beds Delivery Date Sheffield 5 2,869 Swansea 1 722 Belfast 2 1,204 AY20/21 & AY22/23 Glasgow 6 2,390 London 1 527 Swansea 1 245 AY 20/21 Belfast 3 1,204 Bournemouth 1 454 Nottingham 3 1,960 York 1 356 Edinburgh 1 87 AY 20/21 Leicester 7 1,849 Edinburgh 3 331 Liverpool 5 1,557 Poole 1 308 Birmingham 2 1,392 Southampton 1 283 2 Aberdeen 896 Durham 1 200 Newcastle 3 936 Wrexham 1 156 16 Chester 2 736 Bath 1 104
Student Roost and Watkin Jones 3 Year Relationship 3,000 Beds delivered across 5 cities – Glasgow, Belfast, Aberdeen, Sheffield and Swansea Forward Funding and Development Partner structures Development partner for our flagship scheme Hollis Croft – delivered on time and on budget in September 2019 Current development partner in Swansea and forward funding Little Patrick Street in Belfast Additional 4,500 beds across our acquired portfolio are WJ built 100 % occupied on full tenure for 19/20 on all WJ schemes 17
Why Watkin Jones? Deliver on-time and on-budget every time – Trust. Wealth of experience – design and deliver fantastic desirable homes which support our customer satisfaction Fantastic working relationship and culture of partnership. Can-do attitude. Aligned strategies – supports our growth agenda in key regional markets . Flexible deal mindset. 18
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