DRIVING PERFORMANCE 2020 FULL YEAR RESULTS
IMPORTANT LEGAL NOTICE By attending the meeting where this presentation is made, or by reading this This presentation is not for distribution in the United States, Canada, document, you agree to be bound by the limitations set out below. Australia or Japan or in any jurisdiction where such distribution is unlawful. The information set out herein may be subject to updating, completion, Certain statements in this presentation constitute forward-looking statements. revision and amendment and such information may change materially. Any statement in this presentation that is not a statement of historical fact Urban Logistics REIT plc (the “Company”), its advisers nor any other person, including, without limitation, those regarding the Company’s future representative or employee undertakes any obligation to update any of the expectations, operations, financial performance, financial condition and information contained herein. No representation or warranty, express or business is a forward-looking statement. Such forward-looking statements implied, is or will be made by the Company, its advisers or any other person are subject to risks and uncertainties that may cause actual results to differ as to the accuracy, completeness or fairness of the information or opinions materially. These risks and uncertainties include, among other factors, contained in this presentation and any reliance you place on them will be at changing economic, financial, business or other market conditions. These your sole risk. Without prejudice to the foregoing, neither the Company, its and other factors could adversely affect the outcome and financial effects of associates, its advisers nor its representatives accept any liability whatsoever the plans and events described in this presentation. As a result you are for any loss howsoever arising, directly or indirectly, from the use of this cautioned not to place reliance on such forward-looking statements. Nothing presentation or its contents or otherwise arising in connection therewith. in this presentation should be construed as a profit forecast. This presentation is for information only. This presentation does not constitute an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it form the basis of or be relied on in connection with any contract or commitment whatsoever. It does not constitute a recommendation regarding any securities. Past performance, including the price at which the Company’s securities have been bought or sold in the past and the past yield on the Company’s securities, cannot be relied on as a guide to future performance. Nothing herein should be construed as financial legal, tax, accounting, actuarial or other specialist advice. 1
PAGE INTRODUCTION 3 HIGHLIGHTS 6 THE MARKET 11 STRATEGY 15 OUR PORTFOLIO 17 ASSET MANAGEMENT 22 SUMMARY 28 APPENDIX 31
INTRODUCTION 3
URBAN LOGISTICS REIT A BOARD WITH EXPERIENCE AND EXPERTISE 1 RICHARD MOFFITT CEO NIGEL JONATHAN RICH GRAY Former Head of UK Industrial and Logistics at Independent Independent CBRE Non-Executive Non-Executive Total of 25+ years of Logistics market experience. Chairman Director Experience includes: Nigel brings a wealth of Board Jonathan has considerable ‒ Qualified as Chartered Surveyor 1988 ‒ experience, having operated financial services experience CBRE Head of Industrial and Logistics 2010-2015 ‒ CO-Founder M3 Agency 2000-2010 across the globe in senior having worked in senior roles (specialist logistics consultancy) positions, most recently at Segro at HSBC, UBS and NCB ‒ Chairman European Logistics Real Estate Partners 2018- plc where he was Chairman for present ‒ Member Chartered Institute of Logistics and Transport 10 years CHRISTOPHER TURNER ASSET MANAGER MARK BRUCE JOHNSON ANDERSON Qualified Chartered Surveyor Non Independent Independent Non-Executive Non-Executive 25 years of experience in acquisition, performance Director Director and disposal of investments Experience includes: Co-founded Pacific Investments Bruce has considerable real ‒ Acquired, managed and with Sir John Beckwith estate, REIT and financial services traded £175 million asset portfolio experience having worked in ‒ Acquired and repositioned senior roles at Green, Lloyds, €135 million industrial portfolio in Germany HBoS and Bank of Scotland 1. On 29 May 2020, the Company announced the appointment of Heather Hancock as an Independent Non-Executive Director effective from 15 June 2020. For further information see slide 32 in the appendix. 4
URBAN LOGISTICS REIT PLC INTRODUCTION DIFFERENTIATORS - UK REIT quoted on the AIM market of the London Stock Exchange Focus on “last mile” - Income and Total Return strategy 20,000-200,000 sq.ft - Invests in mid-box logistics buildings Highest growth segment of industrial and logistics asset class up to 200,000 sq.ft. Assets located in key urban “last - Strategic locations touch”/“last mile” locations 59% Midlands and South East bias¹ - Management team with specific Area with the strongest take-up of logistics space logistics experience within the broader real estate market Strong covenants - Sector leading performance: 13.4% 92% low/low-moderate risk² p.a. average total accounting return since IPO - Single-let assets - High-quality tenants - No fashion retail 1. By property value and includes £98m of acquisitions made post 31 March 2020 2. Per Dunn & Bradstreet (Overall Business Risk) as at 29 May 2020 5
HIGHLIGHTS 6
FINANCIAL HIGHLIGHTS GROWTH IN EARNINGS AND STRONG BALANCE SHEET - Net rental income of £12.2m for the year, Adjusted earnings per share representing a year-on-year increase of 7.66p 20.7% +9.3% (2019: 7.01p) - Gross to net rental income ratio of 98.3% Dividend per share - Dividend per share of 7.60p for the year, 7.60p covered by adjusted earnings and represents a year-on-year increase of 8.6% +8.6% (2019: 7.00p) - EPRA NAV per share of 137.90p at 31 Loan to Value (“LTV”) 2 March 2020 (2019: 137.96p) reflecting the fundraise and early LTIP crystallisation 1 n/a (2019: 33.7%) - Net cash of £56.6m at the year end, following successful capital raise 2 Total Property Return 10.1% (2019: 16.1%) 1. Market capitalisation of £121.9m pre-issue vs. £245.2m as at 29 May 2020 2. Post year-end, the Company deployed £98m into asset acquisitions. As at 29 May 2020, the pro-forma LTV is c. 15% (target 30-40%) 7
FINANCIAL HIGHLIGHTS SECTOR LEADING RETURNS Adjusted earnings per share Dividend per share 7.60p 7.00p 7.82p 7.66p 6.23p 6.32p 7.01p 6.12p Mar-17 Mar-18 Mar-19 Mar-20 Mar-17 Mar-18 Mar-19 Mar-20 Total accounting return (“TAR”) ¹ Dividend CAGR since IPO 6.9% 25% 60% 50% 20% 3% 40% 5% 15% 30% Average TAR per annum since IPO 16% 10% 20% 5% 13% 13.4% 5% 10% 5% 6% 0% 0% Mar-17 Mar-18 Mar-19 Mar-20 NAV growth Dividend Cumulative 1. Cumulative return generated from IPO (share price 100.00p) 8
OPERATIONAL HIGHLIGHTS ACTIVE ASSET MANAGEMENT DURING THE YEAR ACQUISITIONS Portfolio value 2 - £20.7m of investments in the period ¹ £207.0m - Sourced off-market with a blended NIY of 6.4% - 85% (by value) located in South East and Midlands Valuation uplift ASSET MANAGEMENT £5.7m - 4 rent reviews and 3 new lettings - Average LFL income growth of 38% on rent reviews - 87% of valuation uplift in the year attributed to asset management Total cost ratio - Low EPRA vacancy rate of 2.4% at year end 18.9% - 84.4% of portfolio has an EPC rating between A-C DISPOSALS - £18.4m of asset sales, 5% ahead of NBV WAULT 2 - Average NIY at disposal of 4.9% v 7.0% at acquisition 4.9 years - Total property return of c.50% from asset sales in the period 1. Excluding development sites 2. As at 31 March 2020 9
URBAN LOGISTICS REIT DRIVING PERFORMANCE THROUGH ASSET MANAGEMENT Total property return (“TPR”) Like for like increase in portfolio value 20% 70% 60% 15% 6% 50% 6% 6% 40% 13% 10% 11% 30% 10% 6% 10% 20% 11% 5% 10% 5% 10% 4% 0% 0% Mar-17 Mar-18 Mar-19 Mar-20 Mar-17 Mar-18 Mar-19 Mar-20 Capital Income Cumulative Driven by management decisions Capital growth attributed to asset management since IPO 13% 22% 31% 30% 76% 87% 78% Average TPR per annum since IPO 69% 70% 15% Mar-17 Mar-18 Mar-19 Mar-20 Asset management Market movement 10
THE MARKET 11
URBAN LOGISTICS REIT FALL IN SUPPLY AND LOW VACANCY RATES Fall in supply¹ Vacancy rates at c.7%¹ 80,000,000 14% 13% 70,000,000 Supply by size (sq ft) 12% 60,000,000 Vacancy rate (%) 11% 50,000,000 10% 40,000,000 9% 30,000,000 8% 20,000,000 7% 6% 10,000,000 5% - 2012 2013 2014 2015 2016 2017 2018 2019 2020 4% YTD 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 20,000-50,0000 sq ft 50,000-100,000 sq ft 100,000-200,000 sq ft 20,000-50,0000 sq ft 50,000-100,000 sq ft 100,000-200,000 sq ft - Supply of warehouse space has fallen by c.40% since 2012 - Stabilised vacancy rates of c.7%, down from c.12% in 2012 - Replacement costs too high to justify meaningful development of mid-box warehouses - Supply constraints and low vacancies will continue to put upward pressure on rental values 1. Source: Savills 12
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