Value and Income Trust AGM 5 July 2019 Value and Income Trust Plc, - PowerPoint PPT Presentation

Value and Income Trust AGM 5 July 2019 Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited

Agenda OLIM Property Investment Team » Value & Income Trust – Property Portfolio as at 31 March 2019 » Performance Record » Market Outlook » Highlights » Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 2

OLIM Property Investment Team OLIM Property manage over £1 billion in UK discretionary commercial property portfolios with individual mandates for pension funds, investment trusts and Oxford colleges . Matthew Oakeshott - Chairman » Joint founder of OLIM where he managed UK commercial property and equity portfolios from 1986 to 2006 and purely commercial property since then. S.G. Warburg & Co 1976, Director of Warburg Investment Management 1978. Investment Manager of Courtaulds Pension Fund 1981 to 1985. He led a management buyout of OLIM Property in 2012. Louise Cleary - Director » Qualified as a Member of the Royal Institution of Chartered Surveyors in 1996. She has over 20 years' experience of commercial property investment at Hermes Real Estate Investment Management, Land Securities and Asda Property Holdings and joined OLIM in 2009 and OLIM Property in 2012. Jo Seth-Smith – Investment Manager » Qualified as a Member of the Royal Institution of Chartered Surveyors in 2003. She has over 15 years’ of commercial property experience at Acuitus, LaSalle Investment Management and JLL and joined OLIM Property in 2017. Sarah Martin – Investment Manager » Joins OLIM Property on 8 July. She has spent the last 15 years at JLL. As a Director in the Capital Markets team, she bought and sold over £1 billion worth of property in all sectors and sizes, both portfolios and single properties, for pension funds, local authorities, property companies and other domestic and international investors. Jo West – Investment Analyst » Qualified as a member of the Royal Institution of Chartered Surveyors in 1992. She has over 20 years’ of commercial property valuation and investment experience at Donaldsons, Gooch & Wagstaff, CBRE and British Land and joined OLIM Property in 2018. Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 3

Property Portfolio as at 31 March 2019 Portfolio Capital Value £68,800,000 » Net Rental Income £4,371,936 » 26 properties – All freehold except Horsham & Fareham (long leasehold) » 28 tenancies – All leases full repairing and insuring » Rent Reviews - Five yearly or annual upward only rent reviews - 79% of total rental income is » Index-Related Weighted average unexpired lease length is 15.4 years and 15.1 years if all break options are » exercised 100% let and income-producing » Managing Agents - Workman & Partners (rent collection etc) » Solicitors - Shepherd and Wedderburn LLP » Twice yearly independent portfolio valuations by Savills (end March and end September) » Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 4

Property Portfolio as at 31 March 2019 Pubs / Restaurants Industrials Leisure Roadside • • • • 11 properties 4 properties 3 properties 2 properties • • • • £1,258,720 rent £1,174,305 rent £474,952 rent £318,202 rent • • • • WAULT 20.6 years WAULT 12.5 years WAULT 22.1 years WAULT 8.4 years Other Supermarkets Shops Summary Portfolio Value: £68,800,000 Net Rental Income as a % Portfolio Value: 6.4% No of Properties: 26 • • • 2 properties 2 properties 2 properties Indexed Income: 79% • • • £623,932 rent £226,825 rent £295,000 rent WAULT: 15.4 years • • • WAULT 14.1 years WAULT 8.4 years WAULT 6.5 years Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 5

Property Portfolio Sector Weighting % Capital Value Pubs / Restaurants - 34% 5% 6% Industrials - 25% 6% 34% Other - 15% 9% Leisure - 9% Shops - 6% 15% Roadside - 6% 25% Supermarkets - 5% Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 6

Property Portfolio by Region % Capital Value South East - 53% (10 properties) 6% 3% North - 12% (5 properties) 6% East Anglia - 11% (4 properties) 9% London - 9% (2 properties) 53% 11% South West - 6% (2 properties) Midlands - 6% (2 properties) 12% Wales - 3% (1 property) Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 7

Property Portfolio - Rental Income By Tenant % Stonegate 12% Park Resorts 10% Kier Group 9% Co-operative Food 9% Hampshire County Council 9% Adelie Foods 7% Shepherd Neame 7% Buzz Group 5% Tenpin 5% Iceland 4% Poundland 4% Greene King 3% Mitchells & Butlers 3% Toolspec 3% WH Smith 3% McDonald's 2% Prezzo 2% Caerphilly Borough Council 2% Tesco 1% Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 8

Property Portfolio - Fixed and RPI Index-Related Share of Rental Income % 90% 79% 80% 74% 70% 60% 52% 50% 39% 40% 35% 30% 20% 10% 0% 2012 2013 2017 2018 2019 Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 9

Performance Record as at 31 March 2019 VIT Total Returns (% p.a) – March 2019 14% 13% 12% 11% 11% 11% 11% Total Annualised Returns 10% 10% 10% 10% 9% 9% 9% 8% 8% 8% 8% 8% 7% 6% 6% 6% 4% 4% 3% 3% 3% 2% 2% 2% 0% 1 year 3 years 5 years 10 years 20 years 32 years VIT MSCI RPI Real Return Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 10

Comparative Yields % – End December (Except 2019 End June) 2019 * 2018 2017 2016 2014 2011 2008 2006 5.5 5.4 5.5 5.7 5.9 6.8 8.1 5.4 Property (Equivalent Yield) 0.8 1.5 1.4 1.5 2.0 2.5 3.7 4.6 Long Gilts Conventional -2.0 -1.8 -1.8 -1.8 -0.8 -0.2 0.8 1.1 Index Linked 4.1 4.5 3.6 3.5 3.4 3.5 4.5 2.9 UK Equities 3.0 3.2 4.1 2.5 2.0 4.8 0.9 4.4 R.P.I. (Annual Rate) 4.7 3.9 4.1 4.2 3.9 4.3 4.4 0.8 Yield Gaps: Property less Conventional Gilts 7.6 7.2 7.3 7.5 6.7 7.0 7.3 4.4 Less Index Linked Gilts 1.4 0.9 1.9 2.2 2.5 3.3 3.6 2.5 Less Equities Source: MSCI and ONS * All Figures End December except 2019 End June. Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 11

Comparative Yields % – End December (Except 2019 End June) 8 6 4 2 0 -2 Property (Equivalent Yield) Long Conventional Gilts Long Index Linked Gilts Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 12

Yield Gaps: Property Less Gilt Yields % 8 7 6 5 4 3 2 1 0 Property Less Long Conventional Gilt Yields Property Less Index Linked Gilt Yields Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 13

Highlights March 2018 to March 2019 Purchases – 3 new properties for £8,800,000, Net initial Yield 6.6%, WAULT 19 years, all Index- » Related Sold – 5 properties for £10,300,000, Net Initial Yield 7.3% falling to 6.0% on current rental values, » WAULT 8 years, 86% of the rents with open market rent reviews Rent Reviews – Income growth on held properties – 4% (16 rent reviews – with 14 index-related) » Index-Related Income – 74% March 2018 to 79% March 2019 » WAULT – 14.0 years March 2018 to 15.1 years March 2019 (if all tenant break options exercised) » Occupancy - 100% income producing » Annual Total Return – 8.0% (MSCI Benchmark 5.5%) » Value and Income Trust Plc, Commercial Property Portfolio March 2019, Managed by OLIM Property Limited 14