Results presentation New Waverley, Edinburgh, UK Year ended 30 - - PowerPoint PPT Presentation
MAS REAL ESTATE INC Results presentation New Waverley, Edinburgh, UK Year ended 30 June 2016 1 TABLE OF CONTENTS i. Company profile ii. Strategic update iii. Recurring and potential EPS iv. Highlights of the year v. Review of the
New Waverley, Edinburgh, UK
MAS REAL ESTATE INC
i. Company profile ii. Strategic update iii. Recurring and potential EPS iv. Highlights of the year v. Review of the portfolio
i. Recent additions to the portfolio ii. Developments iii. Management accounts
Bruchsal property, Germany Munich property, Germany
MAS REAL ESTATE RESULTS PRESENTATION 2016
PROPERTY INVESTOR, DEVELOPER AND OPERATOR MAS Real Estate Inc (“MAS” or the “group”) is a commercial property investor, developer and
Euro-MTF market of the Bourse de Luxembourg. BUSINESS STRATEGY MAS’ strategy is to generate sustainable and growing distributable earnings per share by acquiring, developing and operating retail, office, industrial and hotel assets in Western Europe and more recently in Central and Eastern Europe. Where exceptional opportunities arise, the group will embark on mixed-use or residential developments with the view to either generate recurring income, such as campuses leased to universities, or capital gains. The company aims to distribute all of its distributable earnings on a semi-annual basis, with distribution of capital and
MANAGEMENT MAS is internally managed, combining investment, development and asset management skills. Developments are undertaken by teaming up with strong developers that have intimate knowledge of the local markets and by agreeing terms that lead to a strong alignment of interests. FUNDING MAS is targeting an aggregate portfolio LTV of 40% - 50%. Long-term debt funding is referred and interest rates are managed through the group’s hedging strategy. Developments are currently funded through equity and refinanced at completion. LONG-TERM INCOME FROM STRONG COVENANTS MAS has assembled a high quality portfolio of commercial property and developments across Western Europe and is currently expanding into Central and Eastern Europe in joint venture with Prime Kapital. At 30 June 2016 the portfolio had an outstanding weighted average lease term of 12.3 years, occupied by tenants with strong corporate covenants.
€m 309.1 24.5 45.5 €m 15.77 5.10 1.20 Germany UK Switzerland
€22.07
million
GEOGRAPHIC PROFILE BY RENT *
Retail Industrial/logistics Hotel
€22.07
million
SEGMENT PROFILE BY PASSING RENT *
€m 15.77 4.12 2.18 Income generating Developments Land bank
€378.13
million
SEGMENT PROFILE BY VALUE * * Includes acquisition of Edeka portfolio 2 and the Munich property, acquired post year end
MAS REAL ESTATE RESULTS PRESENTATION 2016
management and development
Income-generating Development Existing WE ü Existing WE ü New CEE ü New WE ü New CEE ü Income-generating Development Listed Investments Treasury Existing WE ü Existing WE ü WE ü
Previous investment focus Current investment focus
WE ü New WE ?
50 100 150 200 250 300 350 400 450 500
Income-generating property Development property
Euro million
2015 2016 Optimised Completed developments held for income Income-generating property refinanced & proceeds invested in further developments Previous listed investments, treasury, cash and proceeds from refinancing invested in new developments and accretive income generating property
MAS REAL ESTATE RESULTS PRESENTATION 2016
4.6 6.4 5.4 4.3 8.1 1.8 5.8 0.8 0.2 1.1 2.0
2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Passing rent 30.06.16 Acquisitions - committed Passing rent - committed Property
30.06.16 Property
committed NRI Admin plus tax Recurring EPS NRI -
Incremental finance cost to 40% LTV Recurring EPS potential
Euro cents
MAS is well positioned to go through an sustained period of earnings growth supported by the completion of its existing developments, committed and further pipeline acquisitions, recycling of capital into income-generating assets and increasing the gearing to its target LTV of 40-50%.
Theoretical EPS assuming no further equity issues, gearing at 40% LTV and full investment of assets in income-generating properties
MAS REAL ESTATE RESULTS PRESENTATION 2016
1.84 3.35 4.50 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 2014 2015 2016 Euro cents DISTRIBUTION PER SHARE 310 410.5 467.6 200 250 300 350 400 450 500 2014 2015 2016 Euro millions TOTAL ASSETS * Data extracted from management accounts 64.8 248.5 311.6 50 100 150 200 250 300 350 2014 2015 2016 Euro millions INVESTMENT PROPERTY * 1.1 40.8 76.2 10 20 30 40 50 60 70 80 90 2014 2015 2016 Thousands of shares MEDIAN DAILY SHARE VOLUME
82.1% 34.3%
103.8 121.2 115.1 95 100 105 110 115 120 125 2014 2015 2016 Euro cents ADJUSTED NAV PER SHARE Impact of Brexit/ currency 16.0 4.8 12.3 2 4 6 8 10 12 14 16 18 2014 2015 2016 Percentage LOAN TO VALUE *
MAS REAL ESTATE RESULTS PRESENTATION 2016
Edinburgh Office
16
London Office Frankfurt Office
Prime Kapital Office Isle of Man Headquarters
12 1 1
4 6 8 10 12 14 16 18 20
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037-46 pa Euro millions
Germany United Kingdom Switzerland
CONTRACTED RENT BY YEAR
MAS REAL ESTATE RESULTS PRESENTATION 2016
Total contracted rent is €248.4m
10 15 20 25 Rent received FY2015 Rent received FY2016 Passing rent 30.06.16 Munich Edeka portfolio 2 Adagio Adjusted passing rent Euro millions
EVOLUTION OF PASSING RENT
5 10 15 20 25 30 Edeka portfolio 2 Munich Bruchsal Chippenham Zurich Heppenheim park Braehead Gotha Lehrte Donaueschingen Toom portfolio Aldi portfolio Edeka portfolio 1 Whitbred and arches
Years
INCOME-GENERATING WALT
Existing Acquired post year end 12.3
MAS REAL ESTATE RESULTS PRESENTATION 2016
+63%
67.8 113.5 91.0 129.0 150.0 30.0
40.0 60.0 80.0 100.0 120.0 140.0 160.0 Income-generating Development
Euro millions
Further pipeline Exclusivity Committed
30 June 2016
MAS REAL ESTATE RESULTS PRESENTATION 2016
Optimising the group’s sources of funding is one of the group’s key strategic objectives DEBT EQUITY
acquisitions and developments
280 300 320 340 360 380 Millions
SHARES IN ISSUE
67% 28% 5%
DRAWN/COMMITTED AND NEGOTIATED DEBT BY CURRENCY
EUR GBP CHF
€185.6m
GEARING PROGRAMME FOR CURRENT ASSETS Target portfolio LTV 40% - 50% DRAWN/COMMITTED Debt - 31.08.16 €98.9 million Weighted cost of debt 2.5% Weighted average term 9.2 years NEGOTIATED Debt - 31.08.16 €86.7 million Weighted cost of debt less than 2.50%
MAS REAL ESTATE RESULTS PRESENTATION 2016
period of significant growth in earnings and distributions on the back of:
can take on the management of significant further assets
experienced partners Prime Kapital
which should deliver the optimal returns from our capital base in markets with strong growth potential
capital management
MAS REAL ESTATE RESULTS PRESENTATION 2016
New Waverley, Edinburgh, UK
MAS REAL ESTATE INC
LEHRTE PROPERTY
Acquired December 2015 Tenant OBI Contracted rent €0.76m WALT 10.6 years A stand-alone retail warehouse let on a long-term lease to OBI, the largest DIY operator in Europe, part of the Tenglemann Group. This property was acquired because of the strong income, dominant location in surrounding area, and ability to refinance at low rates.
WHITBREAD AND THE Arches
Completed March 2016 Tenant Whitbread, various Contracted rent €2.18m WALT 27.6 years The first delivery from phase I at New Waverley is the Premier Inn hotel, Hub by Premier Inn hotel, and associated retail. This development continues to progress well, with the current trading at the recently opened hotels being above expectation, which bodes well for the remainder of the phase I scheme that is being delivered later this calendar year, and phase II that is commencing.
Lehrte property, Germany Premier Inn, new Waverley
MAS REAL ESTATE RESULTS PRESENTATION 2016
EDEKA PORTFOLIOS 1 AND 2
Acquired June/August 2016 Tenant Edeka (regional operators) Rent €5.85m WALT 14.9 years Two portfolios consisting of 23 retail units let on long-term leases to the regional operator of Edeka. The Edeka Group is the largest German supermarket corporation, holding a market share of approximately 26% in Germany and operating 4,100 stores under the Edeka brand. These portfolios were acquired because of the strong income generated and ability to refinance at exceptionally low rates, as well as the key locations of the stores in the surrounding area.
MUNICH PROPERTY
Acquired August 2016 Tenant Volkswagen Rent €0.89m WALT 2.5 years An industrial property located in Munich, Germany, let to Volkswagen AG, the leading German auto manufacturer. This property was acquired for it’s strategic location, asset management opportunities, and in time, it’s potential redevelopment.
Edeka store, Germany Munich property, Germany
MAS REAL ESTATE RESULTS PRESENTATION 2016
ADAGIO
Completion December 2016 Secured tenant Adagio, with Accor and Pierre & Vacancies guarantee, plus various ERV €2.03m The Adagio and associated retail represents the completion of phase I of the New Waverley development. This hotel is set to complete at the end of this calendar year. It has frontage directly
square at the development.
PHASE II NEW WAVERLEY
Completion FY2019E Phase II comprises the office, residential and associated retail aspects that will complete the New Waverley development. Pre-letting is well underway, after which construction will begin.
Adagio, New Waverley Phase II, New Waverley
PROGRESS REPORT Construction nearing completion for December occupancy PROGRESS REPORT Planning approved – process of agreeing pre-let
MAS REAL ESTATE RESULTS PRESENTATION 2016
LANGLEY PARK
Completion FY 2018 Secured tenant Travelodge ERV €0.44m Progress continues at Langley Park, where a pre-let has been secured with Travelodge, a leading budget hotel operator, subject to planning. Planning has been submitted in the summer, and we expect an outcome before the end of this calendar year. This hotel is intended to be held for income.
CEE DEVELOPMENTS
MAS has recently expanded its target markets, in joint venture with experienced developers and investors Prime Kapital, to include central and eastern Europe (“CEE”), which with more than 100 million people and €1 trillion in GDP is a sizable growth
achieved in Western Europe “WE” over the last 15 years, whilst the transparency and liquidity of the investment market in a large part of CEE has improved greatly, a trend which is expected to continue. MAS has invested €20 million in return for a 40% equity interest in this business, and intends to invest a further €200 million by way of 7.5% preference shares over the next 4 years. A substantial pipeline has been built up in a short time-frame, and the first acquisitions of development sites has already completed. Return expectations are for income of between 8% - 10%, and an IRR in excess of 15%. PROGRESS REPORT Planning submitted PROGRESS REPORT Land acquired
MAS REAL ESTATE RESULTS PRESENTATION 2016
As at As at Euro 30-Jun-16 30-Jun-15
Investment property 311,613,772 248,538,806 Income-generating property 242,625,172 164,390,518 Development property 24,907,797 44,335,117 Land bank 44,080,803 39,813,171 Financial investments 51,614,068 82,173,737 Goodwill 25,262,818 29,351,139 Deferred taxation asset 721,292 737,015 Trade and other receivables 11,313,808 4,527,803 Other assets 241,083 15,136 Cash and cash equivalents 66,946,902 45,111,775 Total as Total assets sets 46 467,7 7,713,7 13,743 43 4 410,455,4 10,455,411 11 Shareholders’ equity Shareholders’ equity 400,844,9 400,844,952 2 3 353,140,5 3,140,598 98 Interest bearing borrowings 44,578,595 15,747,889 Financial instruments 12,543,033 35,627,918 Deferred taxation liability 1,242,741 1,143,646 Trade and other payables 8,405,586 4,795,360 Other liabilities 98,836
Total liabilities 66,868,7 66,868,791 91 5 57,314,813 7,314,813 Total shareholders’ equity and liabilities Total shareholders’ equity and liabilities 46 467,7 7,713,7 13,743 43 4 410,455,4 10,455,411 11 Actual number of ordinary shares in issue 348,625,219 291,787,889 NAV per share (euro cents) 115,0 121,0 Adjusted NAV per share (euro cents)* 115,1 121,2 *Net asset value per share as adjusted for deferred tax
AS AT 30 JUNE 2016
MAS REAL ESTATE RESULTS PRESENTATION 2016
Year ended Year ended Euro 30-Jun-16 30-Jun-15
Direct investment result Rental income 14,203,699 8,733,519 Net service charges and property operating expenses (1,989,426) (2,815,813) Service charge income and other recoveries 2,047,322 589,637 Service charges and other property operating expenses (4,036,748) (3,405,450) Net rental income 12,214,273 5,917,706 Other income 1,717,829
(3,203,472) (1,767,154) Net operating income 10,728,630 4,150,552 Net finance costs (355,990) (576,698) Finance income 433,132 4,676 Finance costs (817,928) (581,374) Interest capitalised on development property 28,806
(684,749) (371,447) Direct inves Direct investment result tment result 9,68 9,687,8 7,891 91 3,20 3,202,40 2,407 7 Indirect investment result Fair value adjustments 6,431,719 27,877,364 Investment expenses (2,202,144) (537,417) Other income 637,552
(12,913,210) 17,660,295 Deferred taxation (143,776) 272,259 Indirect inves Indirect investment result tment result (8,18 (8,189,85 9,859) 9) 45,2 45,272,50 2,501 1 IFRS net profit (direct plus indirect result) IFRS net profit (direct plus indirect result) 1,4 1,498,0 98,032 32 48,4 48,474,908 4,908
FOR THE YEAR ENDED 30 JUNE 2016
MAS REAL ESTATE RESULTS PRESENTATION 2016
Year ended Year ended Euro 30-Jun-16 30-Jun-15
Direct investment result 9,687,891 3,202,407 Other specific adjustments 1,698,750 *(81,932) Adjustment relating to shares issued during period 1,568,915 49,096 Distributable earnings 12,955,557 3,169,571 Distribution from reserves 2,750,000 6,618,272 Total distribution 15,705,557 9,787,843 Closing number of shares 348,625,219 291,787,889 Final distribution (euro cents per share) 2,23 2,20 Interim distribution (euro cents per share) 2,27 1,15 Total distribution (euro cents per share) 4,50 3,35
FOR THE YEAR ENDED 30 JUNE 2016
MAS REAL ESTATE RESULTS PRESENTATION 2016
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
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
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result of new information, future developments or otherwise or any change in events, conditions or circumstances on which any such statement is based.
MAS REAL ESTATE RESULTS PRESENTATION 2016