LondonMetric Property : Investor Presentation March 2024 Presentation

LondonMetric Investor Presentation

March 2024

www.Londonmetric.com

LondonMetric - Overview

Embracing the net lease model

• Leading NNN lease UK REIT, portfolio grown to £6.2bn with M&A	Market cap
£3.9bn

• • LXi REIT: +£3.0bn in March 24
  • CT Property: +£0.3bn in August 23
• Structural thematics shape portfolio
• • 93% in logistics, convenience, entertainment, leisure and healthcare
  • Strong exposure to assets that are mission critical to occupiers
• Exceptional income longevity & certainty of income growth
• • Sector leading WAULT of 19 years, FRI leases & 99% occupancy
  • Contractual reviews on c.80% of rent, material uplifts on market reviews

Following merger with LXi REIT

Fourth largest UK REIT by NTA (£bn)

12.0
10.0
8.0
6.0
	4.1
4.0
2.0		2.18	1.96
0.0		DLN UTG SHC BBOX HMSO GRI BYG LMP SAFE LXI GPE
SGRO LAND BLND	PF LMP

• Highly efficient & internally managed structure, well capitalised
• • Sector leading EPRA cost ratio of 7-8%1, c.45 employees
  • Internally managed, top six shareholder (management 3.4%)
  • Conservative financing, no material refinancings until FY 26

Dividend growth targeted (FY24)

+7.4% to 10.2p

9th years of progression with

accelerated earnings & dividend growth expected from LXi

1.	Target	2
2.	Combined metric as of Sep-23

Investment Strategy

Focused on emerging consumer behaviour

Logistics

Entertainment

• Leisure
  Convenience
  Healthcare

Disruptive technologies driving modern shopping habits Continued occupier and investment demand

Logistics remains our leading sector & strongest conviction call

Economic & generational shifts driving memories over material things

High barriers to entry to replicate exclusive & rare real estate

Real return driven by long leases & high exposure to indexation

Urbanisation creating busy lifestyles & need for convenience Convenience, essentials and value continue to win out Operationally light assets with long & strong income characteristics

Demographics & ageing population drives health consciousness Hospitals providing essential healthcare, reducing waiting lists Delivering fit for purpose, modern long let real estate

Online Retail by 2027

30%1

Up from 26% in 2023

Staycations

+35%4

Between 2015 and 2022

Convenience Sales Growth

+24%2

To £60 billion by 2028

UK Pensioners Growth

+28%3

From 2020 to 2045

1.	Estimate of online retail penetration in the UK; Statista.	3
2.	Estimate of growth in UK convenience channel from 2023 to 2028; IGD.
3.	National population projections; ONS.
4.	Estimate of average number of domestic holidays per person in the UK ; Statista.

Our Portfolio

Aligned to online shopping, convenience, healthcare and staycation with income longevity and growth

Structurally Aligned Portfolio		Reliable, Repetitive & Growing Income

	Entertainment &				Assets
		582				CPI
	Leisure, 21%
		Convenience,						RPI	Linked,
			17%			GAV			29%
						£6.2bn			Linked,
	Logistics				28%	Contractual
Urban,	weighting	Healthcare,			Net Initial Yield1				uplifts on
24%		41%	5.4%				81% of rent
			14%				Market
										Review,
			Other,			Contracted Rent				19%
								Fixed,
	Regional, Mega,			£347m
	7%
						24%
	11%	6%

Strong track record in capital allocation, asset recycling & active management

Continue to reposition parts of the portfolio: £0.2bn sold over last year (£1.0bn over 5 years) Emphasis on growing exposure to logistics, our strongest conviction call

Enlarged scale giving access to new opportunities of scale

WAULT

19 years

Occupancy

99%

Gross to Net income ratio

99.6%

Annual Reviews

42%

1. LXI EPRA NIY of 6.0% combined with LMP EPRA Topped-Up NIY of 4.8%

4

Top Assets and Occupiers

Top 10 assets constitute c. 20% of enlarged portfolio

Top 10 Assets - 20%		Top Six Assets	Location	Valuation

		Ramsay Rivers Hospital, Healthcare
		Alton Towers, Entertainment
		Bedford Link, Logistics
£6.2bn		Thorpe Park, Entertainment
	Primark, Islip, Logistics
GAV		Eddie Stobart, Dagenham, Logistics
		Ramsay Springfield Hospital, Healthcare
		Heide Park, Soltau, Entertainment
		Argos, Bedford, Logistics
		THG, Warrington, Logistics
Top 10 Tenants - 37%
		Ramsay Health Care UK
			10.7%
		Operations Ltd
		Merlin Attractions Operations
		Limited	10.7%
		Travelodge Hotels Limited
			6.2%
		Primark Stores Limited
			1.7%
		Amazon UK Services Ltd.
£347m			1.4%
		Q	Limited
Contracted Rent			1.3%

Europe Holdings Limited

1.3%

Argos Limited

1.2%

The HUT.com Limited

1.2%

Stobart Limited

1.2%

Ramsay Rivers

Hospital,£175-200m

	Sawbridgeworth
	Alton Towers Park,	£150-175m
	Alton
	Bedford Link,	£125-150m
	Bedford
	Primark,	£100-125m
	Islip
	Eddie Stobart,	£100-125m
	Dagenham
	Thorpe Park	£100-125m
	Egham

5

Merger with LXi REIT plc

Transformational deal creating the UK's NNN lease REIT

• Recommended all-share merger completed March 2024
• • LXi 46% of enlarged group, c.£1.8bn equity value
• Adjusted NTA to adjusted NTA1 approach
• • NTA discount of 4.0%2
• Acquired external manager for £26m3
• • Equates to c.2 years' management fee
  • Senior Management replaced

	Portfolio	Rent reviews
				Market
	Other	Logistics		Review
	10%	8%		2%
		Convenience	CPI Linked	Fixed Uplift
		34%
Entertain	12%
39% Contracted
ment	£3.0
22%		Rent
	billion
		£188m
	Leisure	Healthcare		RPI
	28%
	20%		Linked
				25%
	WAULT: 26 years	EPRA NIY: 6.0%

Rationale

1	Creation of the UK's Leading Triple Net Lease
REIT - New UK Major
2	Combined £6.2 Billion Portfolio1 in Structurally
Supported Sectors
3	Portfolio Aligned to NNN Thematic - Mission
Critical and Key Operating Assets
4	Substantial Cost and Operating Synergies
targeting EPRA cost ratio of 7-8%
5	Internally Managed with Deep Real Estate
Experience and Strong Shareholder Alignment
6	Capital Structure with Scale, Liquidity, Cheaper
Debt and staggered debt maturities
7	Platform to Access New Opportunities of Scale
8	Underscores Ambition to Grow Our Earnings
and Unlock Shareholder Value

1.	Adjusted for fair value of debt and derivatives, potential liabilities in respect of German taxation and the termination of LXi's management contract	6
2.	When applying the 0.55x exchange ratio to the LMP Rolled-Forward Unaudited EPRA NTA at 31 December 2023 of 195.4p
3.	Plus up to an additional £4m based on future performance

Merger with CT Property Trust

Opportunistic transaction adding a highly complementary portfolio

• Recommended all-share merger completed August 2023
• • CTPT 10% of enlarged group, c.£0.2bn equity value
• NTA to NTA approach
• • NTA discount of 6.3%1
• External management contracted terminated post completion

Transaction Rationale

1	Highly Complementary Portfolio, adding
materially to urban logistics portfolio
2	Attractive 21% LTV with £31m cash and low
financing costs
3	Earnings accretive through economies of
scale, cost synergies & rental growth potential

Portfolio2

Other

22%

£0.3 Logistics

billion3 56%

Convenience

22%

WAULT: 6 years

1. Based on March 2023 NTAs
2. As reported at time of merger
3. Long income assets reclassified as convenience
4. As reported at LMP HY 24 results

Rent reviews4

RPI/CPI/Fixed

Uplift 14%

Contracted

Rent

£18m

Market Review

86%

Reversionary yield: 6.5%

Activity and potential

• c.£32m non-core assets sold:
• • materially above underwrite
• 62% of logistics and convenience rent up for review by March 2026
• +23% reversion on logistics:
• • +£1.8m p.a. rent by end FY 26
• Potential near term regears on convenience assets

7

Strong Capital Structure

New facilities signed with LXi transaction allowed us to retain our unsecured debt structure on improved terms

•	£675m of facilities refinanced pre-LXi deal
As at Sep-23	Combined	LXi	LMP
•	£700m of new unsecured facilities with LXi deal	Total Facilities	£2,792m	£1,297m	£1,420m
Gross Debt	£2,052m	£1,271m	£975m
	• £140m term loan, maturing 20261
	Hedged / Capped	100%	100%	99.5%
	• £560m RCF, maturing 20282 (c. 50% drawn in March)
	LTV	31%	34%4	29.5%
•	Replaces £625m3 of LXi's secured facilities	Av. Cost of Debt	3.9%	5.3%5	3.3%
Average Maturity	6 years	5 years	6 years
	• Improved cost of debt, no key refinancing until FY26
	Interest Cover	3.8x	3.2x	4.6x
•	Significant undrawn facilities post completion	Net Debt / EBITDA6	7.2x	6.7x	7.7x

• Continued disciplined approach to capital structure
• • Benefits of increased scale should enhance access to a broader range of funding sources

Source: Company Information.

Note: Combined is pro forma for disposal of Travelodge properties, excluding impact of transaction costs.

1. Subject to a 1-year extension option, at Lenders' discretion.
2. Subject to two 1-year extension options, at Lenders' discretion.
3. £60m facility (maturing December 2026), £250m term loan (maturing January 2026); Travelodge portfolio sale subject to ALAs which will reduce committed amount of facility once sale completes, £315m term loan and RCF Facilities (maturing January 2028).

4.	As announced on 8 January 2024.	8
5.	Calculated on a like for like basis including the amortisation of prepaid finance costs.
6.	EBITDA based on FFO.

Debt Maturity Profile

The enlarged Group benefits from a smoothed and extended debt maturity profile

9

Asset Management Activity FY 24

£7m of additional income captured so far in FY24 from asset management

• +£3.6m pa rent added in H1

-	Rent reviews: +£2.2m,	+19%1
- Lettings/regears: +£1.4m,	+28% on regears
-	+43% on open market logistics reviews

• +£3.3m pa rent added so far in H2

- Rent reviews: +£2.5m, +21%1

- Lettings/regears: +£0.8m, +32% on regears

- +37% on open market logistics reviews

•	26% reversionary potential on logistics assets2	300kwp Solar PV & Battery storage at Bicester
•	Asset management improving estate
	- 2MWp solar added in FY24 across 4 assets
	- Improving EPCs & progressing Net Zero

1.	Includes all rent reviews on a 5-yearly equivalent basis	10
2.	As reported at LMP half year results