Radius Global Infrastructure (NASDAQ: RADI), a ground lease aggregator, owning property interests that are leased to wireless carriers and tower companies, today announced its Q1 2021 results. As of Q1 2021, Radius owned a portfolio of 5.6k sites in 19 countries, which together comprises $90.6m in annualized in-place rent.
Notably, the company’s annualized in-place rent of $90.6m has increased 49% year-over-year, from $60.8m as of Q1 2020. This is a result of both organic growth (e.g., rental escalators) and inorganic growth (i.e., acquisition of new property interests).
Radius Global Infrastructure – Q1 2021 Update
Asset Origination Activity
In Q1 2021, Radius Global Infrastructure acquired $8.0m in rent across 216 sites. Including both acquisition capital expenditures of $107.8m and origination SG&A of $9.1m, the company’s total acquisition costs were $116.9m. Therefore, Radius was able to generate a 6.9% initial yield on its origination activity for Q1 2021.
Radius’ origination SG&A expense as a multiple of rent acquired was 1.1x for Q1 2021, which is significantly below the 1.9x multiple for 2020. Indeed, this means that the company is being more efficient, spending less to acquire incremental rental streams. However, the type of lease acquired also influences the multiple, which for Q1 2021, was skewed towards tower company tenants.
As of Q1 2021, Radius Global Infrastructure’s top 20 tenants represented 85% of its annualized in-place rents. Additionally, in aggregate, the Radius tenant base comprises 58% wireless carriers and 42% tower companies.
Indeed, during Q1 2021, the company substantially increased its exposure to tower companies given that in Q4 2020, Radius’ tenant base comprised 70% wireless carriers and 30% tower companies. The likely source of this meaningful shift towards tower companies was Radius acquiring ground leases as part of American Tower’s acquisition of Telxius.
At the end of Q1 2021, the company’s annualized in-place rents were derived 62% from Europe, 24% from North America, and 14% from South America. This compares to Radius’ annualized in-place rents as of Q4 2020 being 59% from Europe, 26% from North America, and 15% from South America. Therefore, during Q1 2021, Radius increased its relative exposure to Europe and South America, and away from North America.
Overall, Radius Global Infrastructure’s ground leases have a weighted average remaining lease term of 10 years. Of these leases, a significant portion have built-in annual rental escalators of 2% to 3%.
The terms of Radius’ real property interests generally range from 30 years to 99 years. These real property interests provide the company with the right to receive the future income from tenant lease rental payments.
Overall, as of Q1 2021, the average remaining term of the company’s real property interests varied by geography as follows: i) North America at 50.2 years, ii) Europe at 58.8 years, and South America at 27.2 years.
Capital Raise – Q2 2021
In May 2021, Radius Global Infrastructure sold 14.3 million shares to institutional investors at a price of $13.95 per share. In turn, this equity capital raise generated gross proceeds of $200m and net proceeds of $190m, after fees and expenses. Additionally, in April 2021, Radius issued an incremental $75m in new debt financing.
Radius will invest proceeds from equity and debt financings into acquiring new rental streams from its pipeline of origination opportunities.