Radius Global Infrastructure (NASDAQ: RADI), a ground lease aggregator, owning property interests that are leased to wireless carriers and tower companies, today announced its Q2 2021 results, through which the company surpassed the $100m-level of annualized in-place rents.
As of Q2 2021, Radius owned a portfolio of 5.9k sites in 19 countries, which together comprise $102.4m of annualized in-place rents.
Annualized In-Place Rents – Q2 2021
The company’s annualized in-place rents of $102.4m increased 13% quarter-over-quarter, from $90.6m as of Q1 2021. This is a result of both organic growth (e.g., rental escalators) and inorganic growth (i.e., acquisition of new property interests).
Overall, in Q2 2021, Radius Global reported revenue of $25.0m, a 13% increase quarter-over-quarter, and adjusted EBITDA of $7.5m, a 16% increase quarter-over-quarter.
Radius Global Infrastructure – Q2 2021 Update
Radius Global states that it is broadening its acquisition strategy, beyond ground leases, into adjacent digital infrastructure assets with similar characteristics. Specifically, these include distributed antenna systems (DAS), and fiber connection-rich communications aggregation sites, or points-of-presence (PoPs).
For example, Radius notes that it would purchase a distributed antenna system (DAS) revenue stream, which a hospital receives. This revenue stream would be backed by 2 to 3 wireless carriers, which pay for access, on a long-term and contractual basis.
In Q2 2021, Radius Global Infrastructure acquired $9.2m in rent across 214 sites. Including both acquisition capital expenditures of $125.4m and origination SG&A of $10.9m, the company’s total acquisition costs were $136.3m. Therefore, Radius was able to generate a 6.8% initial yield on its origination activity for Q2 2021.
Acquisition Capital Expenditures – Q2 2021
Notably, Radius’ acquisition capital expenditures of $233m for the six-months ended June 30, 2021, exceeded the company’s total acquisition capital expenditures of $221m for full-year 2020.
Radius’ origination SG&A expense as a multiple of rent acquired was 1.2x for Q2 2021, which is in-line with its metric of 1.1x for Q1 2021. Importantly, this metric measures the company’s efficiency in acquiring incremental rental streams.
As of Q2 2021, Radius Global Infrastructure’s top 20 tenants represented 85% of its annualized in-place rents. Additionally, in aggregate, the Radius tenant base comprises 60% wireless carriers and 40% tower companies.
During Q2 2021, the company increased its exposure to wireless carriers given that in Q1 2021, Radius’ tenant base comprised 58% wireless carriers and 42% tower companies.
At quarter-end, the company’s annualized in-place rents, by currency, were 39% Euros, 20% British Pounds, and 18% U.S. dollars. The remaining 23% of the company’s annualized in-place rents were derived from several other currencies. Finally, Radius notes that Europe is geographically where the company is making the “strongest push” in terms of new originations.
Overall, Radius Global Infrastructure’s ground leases have a weighted average remaining lease term of ~9 years. As of June 30, 2021, the company’s weighted average escalator was 3.0% year-over-year.
The terms of Radius’ real property interests range from 30 years (i.e., Latin America) to 99 years (typical). These real property interests provide the company with the right to receive the future income from tenant lease rental payments.
Overall, as of Q2 2021, the average remaining term of the company’s real property interests vary by geography. Specifically: i) U.S. and Canada at 53.2 years, ii) Europe at 62.1 years, and iii) Latin America at 27.9 years.