Stride Property Group (NS) Annual Shareholder Meetings

Transcription

1 Stride Property Group (NS) Annual Shareholder Meetings 2018

2 Board of Directors Tim Storey Independent John Harvey Independent Michelle Tierney Independent David van Schaardenburg Independent Philip Ling Independent Michael Stiassny Independent 2 2

3 Agenda Chairman s Address Tim Storey Chief Executive s Report Philip Littlewood Shareholder Questions Formal Business of Meeting of Stride Property Limited Tim Storey Formal Business of Meeting of Stride Investment Management Limited Tim Storey General Business and Shareholder Questions 3

4 Chairman s Address Tim Storey 4

5 Strategy Vision Strategy To be the best performing listed real estate investment and management company in New Zealand Stride is developing a real estate investment management business for the long term We use our expertise to invest in and manage quality investment portfolios that attract the highest demand and deliver market-leading returns to our investors We believe that by creating value for our investors we will continue to create sustainable growth opportunities for Stride s shareholders 5

6 Strategic Pillars 6

7 Stride Property s net property value 1 increased Management fee income (including SPL fees) up $2.2m on forecast Profit after income tax, up $59.6m on forecast 2, reflecting a $47.2m fair value revaluation movement in investment properties 3 Distributable profit 4 after current income tax, up 1.9% on forecast Full year cash dividend for FY18 1. Investment property portfolio valuation increase excludes $0.8m arising from the elimination of the development fees charged by Stride Investment Management Limited (SIML) to Stride Property Limited (SPL) and includes $9.5m fair value uplift from the restructure of the Bunnings leases. The investment property portfolio excludes the valuation of NorthWest Two, which is classified as inventory in the financial statements. As at 31 March 2017, the investment property portfolio was valued at $859m. 2. On 10 June 2016, SPL issued an Explanatory Memorandum as a part of its restructuring into a stapled group. The above is a comparison of the prospective financial information in the Explanatory Memorandum to Stride Property Group s actual results for the year ended 31 March 2018 (FY18). 3. The forecast had assumed no increase in the portfolio value. 4. Distributable profit is a non-gaap financial measure adopted by Stride Property Group (Stride) to assist Stride and investors in assessing Stride s profit available for distribution. It is defined as net profit/(loss) before income tax, adjusted for non-recurring and/or non-cash items, share of profits in associates, dividends received from associates and current tax. Further information, including the calculation of distributable profit and the adjustments to net profit before income tax, is set out in note 8 of the Consolidated financial statements for the year ended 31 March

8 Appointment of new CEO Philip Littlewood Appointment of new Director Philip Ling New Development team New Corporate Services team 8

9 11 Springs Road, Auckland concept 15 Rockridge Avenue, Auckland 9

10 Portfolio composition by value 1 ~20% 2% NZX Listed Private Trust 1. Independent valuations as at 31 March

11 Board Update Refresh Programme for Boards Boards to be refreshed over next two years Two new directors expected to be appointed before 2019 shareholder meetings Corporate Governance Update Boards updated corporate governance policies and practices Adherence to best practice corporate governance principles and high ethical standards 11

12 Outlook Growth will come from:! Growing the existing business, including real estate investment management activity from existing portfolios which contain development prospects! Establishing new sector specific products, utilising the Stride Property balance sheet Dividend guidance for FY19 targeting a combined cash dividend for Stride Property Group of 12

13 Chief Executive Report Philip Littlewood 13

14 Two Businesses, One Group Stride Property Limited invests in quality New Zealand property investments: Stride Investment Management Limited manages three property portfolios: Portfolio valuation independent valuations of owned and managed properties as at 31 March Includes NorthWest Two, Auckland, which is classified as inventory in the consolidated financial statements. 14

15 Group Financial Performance and Value Profit after income tax, up $59.6m on forecast reflecting a $47.2m fair value revaluation movement in investment properties $95.3m Net tangible assets per share $1.82 Increase in net tangible assets per share from 31 March 2017 $

16 Portfolio Overview Stride Property Limited As at 31 March 18 As at 31 March 17 Properties (no.) Tenants (no.) WALT (years) Occupancy Rate (by area) 96.7% 96.8% Portfolio Valuation 1 ($m) Subsequent to balance date, occupancy increased to 98.8%, with 15 Rockridge Ave, Auckland being fully let 1. Includes NorthWest Two, Auckland, which is classified as inventory in the financial statements. 16

17 Portfolio Activity Stride Property Limited Lease expiry profile 1 by Contract Rental 2! Three Bunnings properties sold to Investore for $78.5m! 15 Rockridge Ave, Auckland completed at a yield on cost of 7.1% (including land)! 11 Springs Road, Auckland new $43m facility with 25-year lease to Waste Management! 282 lease transactions completed! Rental reviews for FY18 giving 3.1% average total uplift 1. Represents the scheduled expiry for each lease, excluding any rights of renewal that may be granted under each lease, for the entire portfolio as at 31 March 2018, as a percentage of Contract Rental. 2. Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL by that tenant under the terms of the relevant lease as at 31 March 2018, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2018, and assuming no default by the tenant. 17

18 Shopping Centre Sales Growing NorthWest Shopping Centre and NorthWest Two sales 1 increased +14.4% NorthWest specialty sales 2 increased to $8,075 per square metre +13.5% Silverdale Centre sales 3 increased +4.4% 1. Total retail sales is the annual sales on a rolling 12-month basis (excluding GST). 2. Like-for-like specialty sales only includes sales from those tenancies who have traded for the past 24 months and includes commercial services categories. 3. Sales data is not collected for all tenants at Silverdale Shopping Centre. Some tenants are not obliged to provide sales data under the terms of their lease. 18

19 Real Estate Investment Management Activity! Profit after income tax $46.2m, up $27.0m on forecast 1 reflecting a $23.7m fair value revaluation movement in investment properties 2! $100m six year bonds issued at 4.40% in April 2018! Disposed two assets for $32.6m, 11% premium to book value! 39 leasing transactions completed, reflecting an increase of +2.7% over previous rentals! Successful delivery of H&M development at Queensgate, on time and on budget! Significant development pipeline, including Queensgate rebuild! 335 leasing transactions completed 3 reflecting an increase in rentals Real estate investment management fee income ($m) 1. Values above are calculated based on the audited numbers in the financial statements for 2018 and the forecast numbers contained in the Product Disclosure Statement issued by Investore Property Limited (Investore) on 10 June 2016 and associated information published on the online register maintained by the Companies Office and the Registrar of Financial Service Providers on 10 June 2016 in connection with Investore s initial public offering. 2. The forecast had assumed no increase in the portfolio value. 3. Includes all leasing transactions at Johnsonville Shopping Centre, which is owned 50:50 by Stride Property and Diversified 19

20 Capital Management Stride Property Limited Debt covenants 31 Mar Mar 2017 Loan to Value Ratio 1 Covenant: 50% EBIT / Interest and Financing Costs Covenant: 1.75 x Weighted Average Lease Term 2 Covenant: > 3.0 years 34.1% 38.8% 3.1x 2.9x 4.9 years 4.8 years Hedging: $100m of swaps terminated post balance date, with average duration of 2.8 years and rate of 4.1%, cost $4.0m New $120m swaps entered into with average duration of 5.2 years and rate of 2.8% Bank Facility: $200m facility due FY20 and $200m facility due FY22 $92m of banking facility headroom as at 31 March 2018 Bank debt refinancing planned for FY19 1. The LVR calculation includes the value of inventory of $36.3m in the value of properties and ignores the value of the investments in the managed funds. 2. The Weighted Average Lease Term in a property or portfolio, assuming it is fully leased. This is weighted by the income applicable to each lease and a current market rental with nil term for vacant space. 20

21 Future Stride has made a strong start in its first two years of operation Over time, seeking to establish a group of sector-specific commercial property products, with Stride co-investing Over the short to medium term, Stride will look to use its balance sheet to acquire assets that may ultimately be used in the establishment of these products Execution of strategy across four P s: Performance, People, Places, Product REIM platform established, with growth prospects Seek to leverage SIML s development capability 21

22 Formal Business Tim Storey 22

23 Stride Property Limited Resolution 23

24 Stride Property Limited Resolution 1: Auditor s Remuneration That the Directors be authorised to fix the remuneration of PricewaterhouseCoopers as auditor of Stride Property Limited, for the ensuring year. 24

25 Stride Investment Management Limited Resolutions 25

26 Stride Investment Management Limited Resolution 1: Auditor s Remuneration That the Directors be authorised to fix the remuneration of PricewaterhouseCoopers as auditor of Stride Investment Management Limited, for the ensuring year. 26

27 Stride Investment Management Limited Resolution 2: Re-election of Director That John Harvey be re-elected as a Director of Stride Investment Management Limited, pursuant to clause 22.3 of Stride Investment Management Limited s constitution. 27

28 General Business and Shareholder Questions 28

29 Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the year ended 31 March Please refer to Stride Property Group s Annual Report 2018 for further information in relation to the year ended 31 March The information in this presentation does not purport to be a complete description of Stride Property Group. In making an investment decision, investors must rely on their own examination of Stride Property Group, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities. No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation, any of which may change without notice. To the maximum extent permitted by law, each of Stride Property Limited, Stride Investment Management Limited (together, the Stride Property Group) and their respective directors, officers, employees, agents and advisers disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Stride Property Group, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in, or omitted from, this presentation. This presentation is not a product disclosure statement or other disclosure document. Level 12, 34 Shortland Street Auckland 1010, New Zealand PO Box 6320, Wellesley Street Auckland 1141, New Zealand P W strideproperty.co.nz 29