HALF YEAR RESULTS TO 30 SEPTEMBER 2019 WWW.URBANLOGISTICSREIT.COM - PowerPoint PPT Presentation

HALF YEAR RESULTS TO 30 SEPTEMBER 2019 WWW.URBANLOGISTICSREIT.COM

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, Australia document, you agree to be bound by the limitations set out below. 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. Any revision and amendment and such information may change materially. Urban statement in this presentation that is not a statement of historical fact including, Logistics REIT plc (the “Company”), its advisers nor any other person, Company’s without limitation, those regarding the future expectations, representative or employee undertakes any obligation to update any of the operations, financial performance, financial condition and business is a information contained herein. No representation or warranty, express or forward-looking statement. Such forward-looking statements are subject to implied, is or will be made by the Company, its advisers or any other person as risks and uncertainties that may cause actual results to differ materially. These to the accuracy, completeness or fairness of the information or opinions risks and uncertainties include, among other factors, changing economic, contained in this presentation and any reliance you place on them will be at financial, business or other market conditions. These and other factors could your sole risk. Without prejudice to the foregoing, neither the Company, its adversely affect the outcome and financial effects of the plans and events associates, its advisers nor its representatives accept any liability whatsoever for described in this presentation. As a result you are cautioned not to place any loss howsoever arising, directly or indirectly, from the use of this presentation reliance on such forward-looking statements. Nothing in this presentation or its contents or otherwise arising in connection therewith. 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 HIGHLIGHTS 5 THE MARKET 10 STRATEGY 13 OUR PORTFOLIO 16 ASSET MANAGEMENT 21 SUMMARY 27 APPENDIX 29

INTRODUCTION 3

URBAN LOGISTICS REIT INTRODUCTION DIFFERENTIATORS • UK REIT quoted on the AIM market of the London Stock Focus on “last mile” Exchange 20,000-200,000 sq.ft • Income and Total Return strategy • Highest growth segment • Invests in mid-box logistics sites in the urban logistics Strategic locations market 73% Midlands and South • Focus on quality assets in key geographical locations East bias ¹ • • Management team with unrivalled experience in Area with the strongest industrial property market take-up of logistics space • Sector leading performance: 16.0% p.a. average total Strong covenant return since IPO 89% low/low-moderate risk ² • Single-let assets • High-quality tenants 1. By property value 2. Per Dunn & Bradstreet (delinquency risk). 4

HIGHLIGHTS 5

FINANCIAL HIGHLIGHTS ANOTHER STRONG FINANCIAL PERFORMANCE • EPRA earnings Net rental income of £5.8m for H1 2020, representing an increase of 31.3% from H1 2019 £3.4m +30.9% (H1 2019: £2.6m) • Income leakage of only 0.8% as result of 100% occupancy throughout the period Dividend per share • Dividend per share 25.0% ahead of H1 2019 3.75p +25.0% (H1 2019: 3.00p) • EPRA NAV per share up 5.2% from 31 March 2019, driven largely by like-for-like growth in our EPRA NAV per share investment portfolio of 3.8% 145.20p +5.2% from Mar 2019 • LTV of 34.1% , within our target of 35-40% Total Accounting Return 8.2% (H1 2019: 8.1%) 6

URBAN LOGISTICS REIT SECTOR LEADING RETURNS EPRA earnings Dividend per share £7.0m £5.9m 8.00p 7.00p £6.0m 6.32p 6.23p £5.0m 6.00p £3.4m £4.0m 3.75p 4.00p £2.5m £3.0m £2.0m £1.1m 2.00p £1.0m - - Mar 17 Mar 18 Mar 19 Sep 19 Mar 17 Mar 18 Mar 19 Sep 19 Total accounting return ¹ 25% 60% 56% 50% 20% 3% 40% 15% 5% 30% 10% 20% 5% 3% 13% 16% 5% 10% 5% 5% 0% 0% Mar 17 Mar 18 Mar 19 Sep 19 NAV growth Dividend Cumulative 1. Cumulative return generated from IPO (share price 100.00p) 7

OPERATIONAL HIGHLIGHTS ACTIVE ASSET MANAGEMENT DURING THE PERIOD ACQUISITIONS Portfolio value ³ • £15.2m of investments in the period ¹ • Sourced off-market with a blended NIY of 6.6% £195.0m • 80% (by value) located in South East and Midlands Valuation uplift ASSET MANAGEMENT £5.6m • 4 rent reviews and 3 new lettings ² • Average LFL income growth of 38% on rent reviews • 100% occupancy EPRA cost ratio 18.6% DISPOSALS • £18.4m of asset sales, 5% ahead of NBV WAULT • Average NIY at disposal of 4.9% v 7.0% at acquisition • Total property return of c.50% from asset sales in the period 6.1 years 1. Excluding development land 2. Includes two rent reviews settled post period end. 3. Per CBRE independent valuation at 30 September 2019 8

URBAN LOGISTICS REIT DRIVING PERFORMANCE THROUGH ASSET MANAGEMENT Like for like capital growth Total property return 14% 18% 60% 56% 12% 16% 50% 14% 10% 5% 8% 7% 12% 40% 8% 10% 6% 13% 30% 11% 10% 8% 4% 11% 6% 20% 2% 4% 9% 9% 4% 0% 7% 10% 2% Mar 17 Mar 18 Mar 19 H1 20 0% 0% Mar 17 Mar 18 Mar 19 Sep 19 Driven by management decisions H1 H2 Cumulative 100% 16% 22% 31% 30% 80% Six months to 30 Sep 19 60% Income 3% 84% 40% 78% 70% 69% 20% Capital 4% 0% Mar 17 Mar 18 Mar 19 H1 20 Total Property Return 7% Asset management Market movement 9

THE MARKET 10

URBAN LOGISTICS REIT FALL IN SUPPLY AND LOW VACANCY RATES Fall in supply ¹ Vacancy rates at c.7% ¹ • Supply of warehouse space has fallen by 30% since 2012 • Stabilised vacancy rates of c.7%, down from c.11% 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 11

URBAN LOGISTICS REIT STEADY TAKE UP AND RISING RENTS Steady levels of take up ¹ Rental growth forecast ² • Units under 100,000 sq ft account for 67% of take up in 2019 • Average rents risen by c.50% since 2012 • Market rental growth of c.3% pa forecast through to 2022 1. Source: Savills 2. Source: Savills, PMA, Realfor 12

STRATEGY 13

URBAN LOGISTICS REIT HOW WE CREATE VALUE FOR OUR SHAREHOLDERS BUY WELL ASSET MANAGEMENT PROVING VALUES 45 properties 12 rent reviews and 4.9% acquired since IPO 14 new lettings/lease average disposal yield re-gears completed since IPO on asset sold in the period 7.1% ¹ 38% average LFL income growth average purchase yield on Sales at or above book value for rent reviews settled in the period ² assets acquired since IPO 84% of valuation uplift achieved 30-70% 50% in the period through asset replacement cost total property return generated management from assets sold in the period VALUE CREATION 11.0% average EPRA NAV per share growth pa since IPO 16.0% average Total Accounting Return pa since IPO 1. The blended NIY on properties acquired in the period was 6.6%. 2. This includes two rent reviews that were settled shortly after the period end, but had effective review dates that fell within the interim period 14

URBAN LOGISTICS REIT STRUCTURAL TAILWINDS Ecommerce as % of total retail sales Structural not cyclical drivers • Ecommerce is expected to account for 30% 25% 25% 19% of total retail sales in 2019 19% 18% 20% 16% 15% • Forecast to reach 25% by 2022 13% 15% 10% • Reduced land availability for warehouse 5% space creating upward pressure on rent 0% 2015 2016 2017 2018 2019 F'cast 2022 and land values Source: Office of National Statistics, Retail Economics • Average population growth of 10% over Current lands values and average rents next 20 years in major UK conurbations Source: Oxford Economics Region £ per acre Rent per sq.ft Leeds 650,000 £6.75 Manchester 650,000 £7.25 Coventry 950,000 £6.95 Northampton 950,000 £7.25 Leicester 750,000 £6.75 Reading 2,000,000 £11.75 Source: Colliers 15

OUR PORTFOLIO 16

URBAN LOGISTICS REIT AT A GLANCE Top 10 sites* Other sites *By market value Portfolio value ¹ Valuation NIY £195.0m 6.2% No. of assets Purchase NIY 38 7.1% Area Contracted rent 2.2m sq. ft £12.2m 1. Per CBRE independent valuation at 30 September 2019. 17