Annual Report 2016/2017 Nsr Annual Report 2016/2017 Important Information
Total Page:16
File Type:pdf, Size:1020Kb
ANNUAL REPORT 2016/2017 NSR ANNUAL REPORT REPORT NSR ANNUAL 2016/2017 IMPORTANT INFORMATION ABOUT THIS REPORT Welcome to National Storage REIT’s 2017 Annual Report which reports our performance for the financial year 1 July 2016 – 30 June 2017. The 2017 Reporting Suite includes: Annual Report – a review of FY17 performance, strategy and governance Financial Report – FY17 financial accounts and detailed financial performance Sustainability Report – outlines NSR’s approach to sustainability based on the Global Reporting Initiatives (GRI) G4 framework The 2017 Reporting Suite is available online at www.nationalstorageinvest.com.au National Storage Holdings Limited ACN 166 572 845 (“NSH” or the “Company”) National Storage Property Trust ARSN 101 227 712 (“NSPT”) together form the stapled entity National Storage REIT (“NSR” or the “Consolidated Group”) RESPONSIBLE ENTITY OF NSPT National Storage Financial Services Limited (NSFL) ACN 600 787 246 AFSL 475 228 Level 23, 71 Eagle Street, Brisbane QLD 4000 DISCLAIMER This is the Annual Report for National Storage REIT which comprises the combined assets and operations of National Storage Holdings Limited (ACN 166 572 845) (“NSH”) and the National Storage Property Trust (ARSN 101 227 712) (“NSPT”). This report has been prepared by NSH and NSFL (ACN 600 787 246 AFSL 475 228) as responsible entity for NSPT. National Storage REIT (ASX: NSR) currently has stapled securities on issue on the Australian Securities Exchange (“ASX”) each comprising one unit in NSPT and one ordinary share in NSH (“Stapled Securities”). The information contained in this report should not be taken as financial product advice and has been prepared as general information only without consideration of your particular investment objectives, financial circumstances or particular needs. This report is not an invitation, offer or recommendation (express or implied) to apply for or purchase or take any other action in respect of Stapled Securities. This report contains forward-looking statements and forecasts, including statements regarding future earnings and distributions. These forward-looking statements and forecasts are not guarantees of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of NSH and/or NSFL, and which may cause actual results or performance to differ materially from those expressed or implied by the forward-looking statements and forecasts contained in this report. No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved. Similarly, no representation is given that the assumptions upon which forward-looking statements and forecasts may be based are reasonable. These forward-looking statements and forecasts are based on information available to NSH and/or NSFL as of the date of this report. Except as required by law or regulation (including the ASX Listing Rules) each of NSH and NSFL undertake no obligation to update or revise these forward-looking statements or forecasts. Certain financial information in this report is prepared on a different basis to the Financial Report, which is prepared in accordance with Australian Accounting Standards. Any additional financial information in this report which is not included in the Financial Report was not subject to independent audit or review by Ernst & Young. TABLE OF CONTENTS TABLE OF CONTENTS 04 OUR BUSINESS 06 OUR FY17 PERFORMANCE 08 OUR STRATEGY 10 OUR PORTFOLIO 14 CHAIRMAN & MANAGING DIRECTOR’S REPORT 18 INVESTMENT PARTNERS 20 THE YEAR IN REVIEW 26 BOARD OF DIRECTORS 30 SENIOR EXECUTIVES 32 CORPORATE GOVERNANCE 34 DIRECTORS' REPORT 60 FINANCIAL STATEMENTS NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 3 OUR BUSINESS National Storage is one of Australasia’s largest self- storage providers, tailoring self-storage solutions to 40,000 residential and commercial customers at more than 115 storage centres across Australia and New Zealand. National Storage REIT is the only publicly listed fully integrated owner and operator of self-storage centres in Australasia. The National Storage offering spans self-storage, business storage, records management, climate controlled wine storage, vehicle storage, vehicle and trailer hire, packaging, insurance and other value added services. Each National Storage centre reflects our commitment to quality, convenience and service. At National Storage, you can expect secure, clean and modern premises and a wide range of packaging materials on offer, together with a team of professionals trained in the exacting task of efficient storage. OUR BUSINESS NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 5 OUR FY17 PERFORMANCE at 30 June 2017 Financial Highlights $117.5m $103.4m $45.7m Total Revenue IFRS profit Underlying Earnings1 FY16: $79.8m FY16: $44.0m FY16: $29.2m 47% 135% 57% Operational Highlights 116 622,000 65,000 Number of Centres Square Metres of Number of Storage Units Net Lettable Area FY16: 105 FY16: 542,000 FY16: 59,000 11 81,000 10% Capital Strength $1,437m 37% 4.6 Total Asset Value Gearing Weight Average Debt Tenor FY16: $900m FY16: 38% FY16: 2.0 $537m 1% 2.6years OUR FY17 PERFORMANCE 1 Underlying earnings is a non-IFRS measure (unaudited) 9.2cps 9.2cps 2 Same centre 30 June 2016 excluding New Zealand and developing centres 3 Investment properties net of finance lease Underlying Earnings Distribution per liabilities per Stapled Security1 Stapled Security FY16: 8.7cps FY16: 8.7cps 5.7% 5.7% 77.5% $212m $1,163m Like for Like Like for Like Revenue Assets Under Occupancy 2 per Available Metre Management (AUM)3 (REVPAM)2 FY16: 75.4% FY16: $202.0m FY16: $959m 2.1% 5.0% 21% $1.34 Net Tangible Assets per Stapled Security FY16: $1.14 18% NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 7 OUR STRATEGY NSR’s objective is to deliver investors a stable and growing income stream from a diversified portfolio of high quality self-storage assets and to drive income and capital growth through active asset and portfolio management. Acquisitions execute high quality acquisitions in a fragmented industry + + + Asset Portfolio, Management Development balance occupancy and rate to achieve & Centre Management organic growth and drive revenue growth focus on development in markets where leverage management platform and acquisition is challenging economies of scale to extract value maximise portfolio potential through drive cost efficiencies across the portfolio expansion of outperforming assets align with investment partners to execute development opportunities undertake portfolio recycling opportunities to maximise value OUR STRATEGY Product & Innovation explore market opportunities for revenue generation focus on digital transformation drive innovation and sustainability at a Develop multiple revenue product and portfolio level streams to maximise returns + = Portfolio, Capital Development Management & Centre Management maintain an efficient capital structure NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 9 DARWIN 1 CENTRE 116 CENTRES PERTH 19 CENTRES ADELAIDE 6 CENTRES OUR PORTFOLIO The National Storage portfolio continues to grow across Australia and New Zealand, with storage centres well located in capital cities and regional areas that exhibit drivers of storage demand. OUR PORTFOLIO NORTH QUEENSLAND 3 CENTRES SUNSHINE COAST 4 CENTRES BRISBANE GOLD COAST 19 4 CENTRES CENTRES CANBERRA SYDNEY 4 16 CENTRES WELLINGTON CENTRES 3 HAMILTON CENTRES MELBOURNE 1 23 CENTRE CENTRES GEELONG 2 CENTRES HOBART 4 CENTRES 5 CENTRES 2 CHRISTCHURCH CENTRES DUNEDIN NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 11 PORTFOLIO STATISTICS PORTFOLIO DIVERSIFICATION BY NLA PORTFOLIO DIVERSIFICATION BY VALUE 6% 10% 1% 1% 2% 23% 12% 29% 16% 6% 6% 17% 12% 28% 5% 20% 4% Queensland South Australia Queensland South Australia New South Wales Western Australia New South Wales Western Australia Australian Capital Territory Northern Territory Australian Capital Territory Tasmania Victoria New Zealand Victoria Northern Territory New Zealand NUMBER OF JUNE PORTFOLIO VALUATION PORTFOLIO BY NLA CENTRES 2017 NSR Portfolio Value $1.16 billion North Queensland 3 30,100 Weighted Average Cap Rate 7.86% Sunshine Coast 4 19,500 Gold Coast 4 22,100 PORTFOLIO COMPOSITION NUMBER OF CENTRES Brisbane 19 106,100 NSR Freehold 98 Sydney 16 85,700 NSR Leasehold 15 Canberra 4 27,800 Managed for third party owner 3 Melbourne 23 111,400 TOTAL 116 Geelong 2 8,700 Adelaide 6 35,000 Hobart 4 13,100 Perth 19 97,300 Darwin 1 6,200 Christchurch 5 17,900 Hamilton 1 5,200 Wellington 3 12,300 Dunedin 2 24,100 TOTAL 116 622,500 OUR PORTFOLIO NATIONAL STORAGE REIT ANNUAL REPORT 2016/2017 13 CHAIRMAN & MANAGING DIRECTOR’S REPORT National Storage has experienced significant growth We have achieved a strong result with 5.7% growth since listing in December 2013, with our share price in underlying earnings per stapled security to $45.7 increasing from 98 cents at IPO to over $1.50 and our million, supported by revenue growth of 47% to market capitalisation rising from $200 million to over $117.5 million. Our organic revenue growth in FY17 $750 million. At the same time our portfolio of storage has been underpinned by the delivery of combined assets has grown from an initial 28 owned storage improvement in our twin drivers of occupancy and rate properties and 62 operating business to over 100 per square metre, resulting in revenue per available owned properties and 116 operating business today. metre (REVPAM) growth of 5.0% from $202 to $212. We Our shareholders have