Interim results presentation

Transcription

1 MAS REAL ESTATE INC Interim results presentation February

2 MAS REAL ESTATE INC Contents 1. Strategic update Lukas Nakos Chief Executive Officer 3 2. Financial review Malcolm Levy Chief Financial Officer 6 3. Portfolio, pipeline and outlook Jonathan Knight Chief Investment Officer Closing comments Lukas Nakos Chief Executive Officer 2 16

3 FUNDING Interim distribution proposed of 6,7 million, or 2,27 euro cents per share based on the shares in issue at period end PORTFOLIO Obtained planning approval on the North Street Quarter development Like-for-like adjusted NAV Completion of Whitbread per share increased 1,28% hotels at the New Waverley development February 2016 to 118,5 euro cents ADJUSTED CORE INCOME UP BY 3,9% OVER THE PREVIOUS SIX MONTHS Further income accretive acquisitions in Germany Attractive financing rates continue to be available KAROO FUND FINAL REDEMPTION RECEIVED JANUARY 2016 Strategic update 3 TEAM North Street Quarter RELATIONSHIPS SUSTAINABILITY Included in the NEW JSE SAPY index EUROPEAN square metres ASSET MANAGER of photovoltaic farm APPOINTED at Chippenham # of staff increased to 21 NEW HEAD OFFICE REPLENISHED PIPELINE Relationships with debt providers enhanced ENVIRONMENTAL CREDIBILITY KEY TO SECURING NORTH STREET QUARTER PLANNING APPROVAL All development plans substantially exceed environmental requirements Lukas Nakos Chief Executive Officer

4 Highlights X axis - Share Price (ZAR) Y axis - 90-day Rolling Volume Traded (JSE) On track for 2016 income goals Increased current distribution to 2,27 euro cents per share Expect to grow through 2016 calendar year ,000 Now focussed on growth in 2017 and beyond Short term income growth Completion of hotels, retail units - New Waverley 100m refinancing into geared 250m accretive assets Income vs. cost of debt spread of 5%-6% in Germany ,500 Steady NAV performance despite turbulent markets Like-for-like 6 month gain of 1.28% despite acquisition costs Strong performance of investments - Karoo, Sirius ,000 4 Short term NAV growth Progress on development assets Planning approvals at NSQ and Langley Park and asset management initiatives Improved liquidity in the traded share Inclusion in the SAPY index New appointments to the team IOM head office, London, Frankfurt, Edinburgh asset managers Jul Jul Jul Jul Aug Aug Aug Sep Sep Sep Oct Oct Oct Nov Nov Nov Dec Dec Dec-15 37,500

5 H2 focus points Portfolio development 400m Acquisitions Acquire German income-generating and asset management/ development properties Asset management Lease re-gearing in UK, Germany, Switzerland 300m Siemens and new tenant extensions Braehead redevelopment negotiations Funding Asset-backed loan funding 200m Draw-down further gearing in Germany, UK Development Completion of phase 1 New Waverley, Edinburgh 100m Submit planning, Chippenham UK Acquire development site in Munich, Germany 5 Opportunistic Sirius Real Estate ( Sirius ) - now the largest direct shareholder New joint venture acquisitions and developments in Europe Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Cash / treasury Income-generating property Development property Investments Debt Equity

6 New Square - New Waverley, Edinburgh Financial review 6 Malcolm Levy Chief Financial Officer

7 Financial position Portfolio breakdown Summarised balance sheet New acquisitions Euro 000s As at 31 Dec 2015 As at 30 Jun 2015 As at 31 Dec Goodwill 28,449 29,351 26,475 Investment portfolio - Income-generating property 171, , , Capex - Development property 103,908 84,148 50,935 - Investments 50,233 79,569 75,152 - Treasury 51,054 47, ,190 Euro million Karoo redemptions Karoo redemption offsets capex/acq Other assets 6,204 5,280 2,826 Total assets 411, , ,365 Shareholder equity 348, , ,140 Non-current liabilities 22,064 22,469 37, Current liabilities 41,331 34,846 4,350 Total equity and liabilities 411, , , Adjusted NAV per share (euro )cents)* 118, Income-generating Development Investments property property Dec-14 Jun-15 Dec-15 Treasury Number of ordinary shares in issue 294, , ,603 *Net asset value per share as adjusted for deferred tax 7

8 Financial position continued 122 Adjusted NAV per share Investments Euro cents Fair value gains of 7,8 million during the period, of which 7,1 million from Karoo Fund Karoo Fund, a significant investment for some time, was fully redeemed as expected in January 2016, giving: 2,6 million in cash 64,5 million in-specie Sirius shares Stake in Sirius thereby increases to 12,1% Settlement of Attacq liability of 29,1 million to result in 21,3 million shares to be issued in coming days, increasing Attacq s holding to 48,6% June 2015 Distributions Foreign exchange loss Adjusted like-for-like 1.2 Investments FV Core income Treasury FV Structural costs Income generating FV December 2015 Treasury Currently no equities treasury portfolio due to market volatility Issued short term loan to Attacq of 18,9m for 3 months at 8,0% interest, being repaid 29 February

9 Income distribution Core income Rental income increased in the period due to the acquisition of Lehrte, German DIY unit, and full period impact of prior acquisitions Drivers of rental growth in next period will be: Completion of Whitbread hotels, earning rental from February 2016 Letting of arches and retail units at New Waverley Completion of purchase of logistics unit in Munich Acquisitions under exclusivity and pipeline Chippenham photovoltaic farm Distribution Distribution proposed of 2,27 euro cents per share This includes 4,4 million of realised profits from the Karoo Fund to the current period distribution Euro 000s Six-months ended 31 Dec 2015 Six-months ended 30 Jun 2015 Six-months ended 30 Dec 14 Rent and service charges 7,428 6,698 2,625 Porftolio related expenses (1,783) (1,547) (489) Administrative and adviser fees (2,818) (1,454) (1,715) Net operating income 2,827 3, Finance/taxation/other (487) (661) (287) Core income 2,340 3, Adjustments 4,355 3,410 3,208 Adjusted core income 6,695 6,446 3,342 Adjusted core income per share (euro cents per share) Interim distribution (euro cents per share)* Distribution income statement *Based upon the number of shares in issue at period end

10 Chippenham 1.2 Portfolio review 10 Jonathan Knight Chief Investment Officer

11 Income-generating property Portfolio WALT Existing portfolio Majority of assets performing in line with expectation Additional 290k gross income added to portfolio Contracts signed to sell Sauchiehall Street, completed post year end Gross rental yield 7,5% with a WALT of 9,3 years Annualised core income yield on current income generating property portfolio is >7,5% Portfolio loan to value (excluding treasury) is 4,6% Next tranche of gearing of 30 million fixed at <2,5% Bruchsal Chippenham (CL) Zurich Glasgow (BL) Heppenheim Gotha Donauschingen Frankenthal Gummersbach Nordhausen Parsberg Kuppenheim Herbolzheim Staufen Rottenburg-Ergenzingen Lehrte Property by Sectors/Jurisdiction Acquisitions 1. German DIY retail warehouse (Lehrte) December Conditional contract for logistics in Munich with medium term redevelopment potential 3. Secured exclusivity on 4 pipeline assets Number Industrial Logistics Mixed use Retail 4 11 United Kingdom Switzerland Germany

12 Development property Development property milestones Milestones New Waverley, Edinburgh Phase 1 New Waverley, Edinburgh Phase 2 North St Qtr, Lewes Planning þ 2016 þ 2016 Pre-let / sale þ Construction start þ Completion * *First two hotels handed over in February 2016 Langley Park, Chippenham Valuation methodology 70 Development property values New Waverley, Edinburgh Phase 1 - Independent valuation Phase 2 - Cost less impairment North St Qtr, Lewes Cost less impairment Langley Park, Chippenham Cost less impairment (held for development) Independent valuation (income-generating) Euro million NSQ New Waverley Langley Park

13 Pipeline Income-generating property pipeline 324 million with >7% core income Development property pipeline 210 million Food retail, sale & leaseback, Germany Discount food retail sale & leaseback, Germany Mixed use, South West German City 60 Mixed retail, Germany Neighbourhood shopping centre, Berlin, Germany New Waverley Phase 2, UK 120 Mixed German income portfolio UK Southcoast mixed use business Retail Park, Munich, Germany Exclusivity Germany United Kingdom Income-generating property pipeline by country ( 324 million) Development property pipeline by country ( 210 million) Deal size million Germany United Kingdom Exclusivity, Germany Germany United Kingdom 50 13

14 Macro outlook Eurozone German growth continues with a 0,3% expansion in the fourth quarter, despite the slowdown in trade, driven by central government spending and consumption Increasing consumption expected to benefit our German retail portfolio Potential for interest rates to drop below 0% now seems plausible, 10 year bund closing in on negative Switzerland Sub-zero interest rates and record low yields make it a challenging market to invest in United Kingdom Strong growth expected to continue, albeit slightly slower than predicted at the half year, on domestic demand. Will compete with USA for fastest growing economy in G7 Employment continues to beat expectations Short term volatility as Brexit referendum approaches 14

15 MAS REAL ESTATE INC Market positioning United Kingdom Germany Development and asset management of the portfolio in a strengthening economy in order to take advantage of broad based growth Focus on long leases, low risk tenants for positive real returns Acquire assets with active management opportunities in Germany Gear at historically low rates currently available to lock in high real returns Switzerland Passive approach with focus elsewhere. Will consider if we feel the asset is exceptional value Rest of Europe Actively seeking opportunities in other jurisdictions 15

16 Outlook 16 Lukas Nakos Chief Executive Officer

17 Closing comments Investor communications Initial focus on liquidity SAPY index Investor site visits Opportunities to better understand the MAS business Working to get meaningful analyst coverage on the stock in the coming months 17

18 Disclaimer This document does not constitute an offer for securities or other interests in MAS Real Estate Inc., nor does it purport to solicit offers to subscribe for securities or interests in MAS Real Estate Inc. This document does not constitute an offer for the sale of or subscription for, or the solicitation of an offer to buy and subscribe for, securities to the public as defined in the South African Companies Act, No. 71 of 2008 (as amended or otherwise) and must not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of Chapter 4 of the said Act. This document does not constitute an offer of securities to the public in the United Kingdom. This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ), (iii) high net worth entities falling within Article 49(2) of the Order and (iv) other persons to whom it may lawfully be communicated (all such persons together being referred to as relevant persons ). Any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the Prospectus Directive ) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. This document does not constitute an offer of securities for sale or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in the United States, Canada, Australia, Japan or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. In particular the shares in MAS have not been, and will not be, registered under the United States Securities Act of 1933 as amended (the Securities Act ) or qualified for sale under the laws of any state of the United States or under the applicable laws of any of Canada, Australia or Japan and, subject to certain exceptions, may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act) or to any national, resident or citizen of Canada, Australia or Japan. Neither this document nor any copy of it may be distributed directly or indirectly to any persons with addresses in the United States of America (or any of its territories or possessions), Canada, Australia or Japan, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country where such distribution may lead to a breach of any legal or regulatory requirement. MAS Real Estate Inc. disclaims any obligation or undertaking to release publicly any update, review or revise any forward looking statement contained in this document whether as a result of new information, future developments or otherwise or any change in events, conditions or circumstances on which any such statement is based. 18 INTERIM RESULTS PRESENTATION FEBRUARY 2016