Capital Raise Presentation June 2017 1 Capital Raise June 2017
1. Spear REIT at a Glance Table of Contents 2. Highlights 3. Financial Performance 4 months ended 28 February 2017 4. Group Structure & Management 5. Portfolio Overview MISSION STATEMENT 6. Capital Raise Rationale “To be the leading � Western Cape-focused REIT 7. Subsequent Transactions and to consistently grow our distribution per share ahead of 8. Revised Financial Forecast inflation and within the top FY 2018-2019 quartile of our peer group.” � 9. Capital Raise – Timing & Process 10. Outlook 11. Questions 12. Appendix – Top 15 Spear Reit Assets 2 Capital Raise June 2017
Spear REIT at a Glance 3 Capital Raise June 2017
Spear REIT at a Glance Post Transfer – As at Anticipated Transfer 28 February 2017 July 2017 Portfolio Value R1.44 billion R2.64 billion Rentable Area (Gla) 172 503m 2 306 702m 2 No Of Properties 25 31 Occupancy Rate 99% 99% Average Escalation % 8% 8% Average Portfolio Rental R91/m 2 R85/m 2 Wale 46 months 51 months Gearing (Ltv) 33% 45% Average Property Value R57.8m R85.2m Average Property Valuation per m 2 R8 380/m 2 R8 615/m 2 4 Capital Raise June 2017
Highlights – 4 months to 28 February 2017 5 Capital Raise June 2017
Highlights *The above performance was measured against the PLS issued 4 months ended on 21 October 2016* 28 February 2017 DISTRIBUTION PER SHARE 23.51 cents ⬆ 16.75% over forecast TANGIBLE NET ASSET VALUE PER SHARE ⬆ 7.01% to R10.03 INVESTMENT PROPERTY ⬆ 3.79% to R1.446 billion CAPITAL RAISED R369 000 000 during period GEARING (LTV) From 42.11% to 33.09% SIGNIFICANT TRANSACTIONS R1.08 billion in new acquisitions after period end 6 Capital Raise June 2017
Financial Performance to 28 February 2017 7 Capital Raise June 2017
Summary Income Statement Group Audited 28 Feb 17 R’000 Total revenue 61 262 Property operating and management expenses (16 294) Net property-related income 44 968 Administrative expenses (4 558) Net operating pro fi t 40 410 Consolidated Fair value adjustment – Investment properties 40 553 Statement of Depreciation (4) Comprehensive Income Formation and listing cost (1 873) Share-based payment expense (3 939) for the 4-month Pro fi t from operations 75 147 period ended Net interest (16 662) 28 February 2017 Pro fi t before taxation 58 485 Taxation 6 846 Pro fi t for the year 65 331 Basic headline earnings per share (Cents) 96.65 Diluted headline earnings per share (Cents) 96.65 Distribution per share (Cents) 23.51 Interest Cover Ratio 2.58 8 Capital Raise June 2017
Summary Balance Sheet Group Audited 28 Feb 17 R’000 ASSETS Non-current assets 1 452 376 Current assets 41 136 TOTAL ASSETS 1 493 512 EQUITY AND LIABILITIES Shareholders’ interest 986 808 Non-current liabilities 478 453 Consolidated Current liabilities 28 251 Statement of TOTAL EQUITY AND LIABILITIES 1 493 512 Financial Position Number of ordinary shares in issue 98 226 952 Treasury shares (464 591) Net ordinary shares in issue 97 762 361 Gearing ratio 33.09% Net asset value per share (Cents) 1 009 Tangible net asset value per share (Cents) 1 003 9 Capital Raise June 2017
Funding at 28 February 2017 LTV Total Borrowings Hedged Funding Average Cost of Funding 33.09% R478 m 9.65% 59% Funding Maturity 10 Capital Raise June 2017
Group Structure & Management Team 11 Capital Raise June 2017
Revised Group Structure SPEAR HOLDCO Upper Eastside Retail & Commercial & Double Tree by Hilton Directly Held Subsidiary Sable Square Properties Companies Pembury Retirement Complex Burger King Strand 15 on Orange Hotel by Marriott 25 Assets No. 2 Long Street 12 Capital Raise June 2017
Board of Directors EXECUTIVE Mike Flax Quintin Rossi Christiaan Barnard CHIEF EXECUTIVE OFFICER MANAGING DIRECTOR FINANCIAL DIRECTOR NON-EXECUTIVE Abu Varachhia Jalal Allie NON-EXECUTIVE CHAIRMAN LEAD INDEPENDENT NON-EXECUTIVE DIRECTOR Brian Goldberg Name Surname INDEPENDENT TITLE NON-EXECUTIVE DIRECTOR 13 Capital Raise June 2017
Portfolio Overview 14 Capital Raise June 2017
Portfolio Overview at 28 February 2017 Active Asset Management Western Cape : 95.3% of assets Gauteng : 4.7% of assets Number of properties : 25 Portfolio Value : R1.446 billion Average property valuation per m 2 : R8 380/m 2 15 Capital Raise June 2017
Tenant Pro fi les at 28 February 2017 Proximity to Assets Tenant Pro fi le Pro fi le by Number by GLA of Tenants Vacancy Pro fi les at 28 February 2017 Total Vacancy 1 584m 2 Focused Tenant Retention Vacant area m 2 High Occupancy Rates 16 Capital Raise June 2017
Top 10 Tenants by = R65.2 m Annual Rental The below-mentioned Top 10 Tenants by rental p.a. equate to 37.8% of the total portfolio annual contractual income FY 2018, being R174.9 million (excludes any new acquisitions after the period) 17 Capital Raise June 2017
Lease Expiry Pro fi le by GLA & Revenue 18 Capital Raise June 2017
Capital Raise Rationale 19 Capital Raise June 2017
Capital Raise Rationale INVESTMENT BENEFITS OF OPPORTUNITY GROWTH INVESTMENT PIPELINE OF OVER R1bn IMPROVING INCOME – THE NET INITIAL YIELD OF EACH NEW ACQUSITION IS MANAGEMENT HAS A PROVEN ABILITY TO ACCRETIVE TO THE FUND YIELD EXECUTE ITS INVESTMENT STRATEGY IN THE CAPE MARKET BETTER LIQUIDITY IN THE SHARES, RESULTING FROM LARGER MARET CAP AND GROWTH WITH THE AIM OF ENHANCING BROADER INVESTOR UNIVERSE INVESTOR RETURN AND LIQUIDITY ECONOMIES OF SCALE 83 % INCREASE IN ASSET VALUE OF FUND IMPROVED PORTOFLIO DIVERSIFICATION 77% INCREASE IN RENTAL GLA OF FUND 20 Capital Raise June 2017
Subsequent Transactions 21 Capital Raise June 2017
Subsequent Transactions Expected Acquisition Debt Equity The Group entered into agreement transfer value funding funding to acquire the following properties date R’000 R’000 R’000 - 2 Long Street, Cape Town 1 Jul 17 389 000 210 000 179 000 - 15 on Orange, Cape Town 1 Jul 17 298 000 175 000 123 000 - Mega Park, Bellville 1 Jun 17 379 157 224 000 155 157 - Virgin Active George, George 1 Jul 17 22 000 12 000 10 000 1 088 157 621 000 467 157 Equity funding will consist of a capital raise by way of placing Spear REIT shares on the general market after Competition Commission approval is received; Approval expected May 2017 22 Capital Raise June 2017
Werksmans, Edward Street, 142 Edward Street, Tygervalley Tygervalley Main tenants: Werksmans Attorneys & Bigen Africa GLA: 2 609m 2 Sector: Commercial R41 200 000 Acquisition price: Acquisition yield: 9.70% WALE: 2 years 23 Capital Raise June 2017
78 on Edward, Edward Street, Redevelopment Tygervalley Main tenant: TBC Physical address: 78 Edward Street, Tygervalley GLA: 1 980m 2 Sector: Commercial R13 200 000 Acquisition price: Acquisition yield: 9.25% WALE: Redevelopment 24 Capital Raise June 2017
15 on Orange Hotel & Conference Facility, Cape Town Main tenant: Marriot Hotels International Physical address: 15 Orange Street, Cape Town GLA: 14 681m 2 Sector: Hospitality R298 000 000 Acquisition price: Acquisition yield: 9.55% Hotel lease tenure: 16 years 25 Capital Raise June 2017
Virgin Active, George Main tenant: Virgin Active South Africa Physical address: No. 1A Witfontein Road, George GLA: 2 500m 2 Sector: Specialised retail R22 000 000 Acquisition price: Acquisition yield: 9.22% WALE: 5 years 26 Capital Raise June 2017
No. 2 Long Street, Cape Town Main tenants: DRA Projects SA, Fairheads Benefits, SAMSA Physical address: No. 2 Long Street, Cape Town GLA: 23 671m 2 Sector: Commercial R389 000 000 Acquisition price: 9.32% Acquisition yield: WALE: 3 years R10 000 000 Planned CapEx: 27 Capital Raise June 2017
Mega Park Industrial Estate, Bellville South Main tenants: Massbuild, Consol Glass, Imperial, Tuffy Group & Storage Team Physical address: Cnr Pieter Barlow & Mill Road, Bellville South GLA: 85 748m 2 Sector: Industrial logistics, manufacturing & warehousing R375 157 000 Acquisition price: Acquisition yield: 9.30% WALE: 2 years 28 Capital Raise June 2017
Sable Square - Retail & O ffi ce Additions Addition: Retail & office space Physical address: Cnr Bosmansdam & Ratanga Road, Milnerton New GLA: 3 000m 2 Sector: Retail & Office R54 000 000 Cost of additions: Yield on additions: 9.25% Completion: December 2017 29 Capital Raise June 2017
Revised Portfolio Overview Active Asset Management Western Cape : 97% of assets Gauteng : 3% of assets Number of properties : 31 Portfolio Value : R2.64 billion Average property valuation per m 2 : R8 615/m 2 30 Capital Raise June 2017
Revised Financial Forecast FY 2018 31 Capital Raise June 2017
Recommend
More recommend
