Post on 24-Jul-2020
Interim Results Presentationfor the 6 months ended 31 August 2015
Proceedings
Introduction Sandile Nomvete
Highlights
Unitholder profile
Delta Africa
Financial review Greg Booyens
Investment portfolio Bronwyn Corbett
Leasing
Capex
Headwinds Sandile Nomvete
Prospects
Embassy Building, Durban
2
Introduction
Unisa House, Johannesburg
3
Introduction to Delta
Black managed REIT
Predominantly invested in office buildings in Durban and Pretoria with diversifying
investments in other sectors and Delta Africa
Secure long term sovereign underpin, with sovereign tenants occupying 60% of total GLA
Average property value of R106.8 million
Market capitalisation of R4.5 billion (Aug 2014 – R3.54 billion)
Contract commenced with new asset manager which is 100% owned by black employee
share trust
*Includes investment in Delta Africa
4
31 August 2015 28 February 2015Shares in issue 543 558 733 458 409 836
Market capitalisation R4.5 billion R4.1 billion
Share price (closing) R8.20 R8.90
NAV per share R9.62 R10.02
No. of properties 85 82
Valuation of property portfolio R9.1 billion* R8.4 billion
Average value per property R106.8 million R102.4 million
Gross lettable area 723,929 m² 703,103 m²
Sectorial profile (Building - GLA) Office - Government: 53.9% Office - Government: 52.8%
Office - Other: 36.8% Office - Other: 39.6%
Industrial: 5.5% Industrial: 5.7%
Retail: 3.8% Retail: 1.9%
Occupancy rate 91.6% 92.9%
Weighted average net rent (per m2) R 101.49 R 95.84
Weighted average escalation 7.88% 7.97%
Loan to value 46.0% 49.9%
Fixed : Floating 69% 70%
Funding costs Ave all in rate 8.09% Ave all in rate 8.10%
*Portfolio is only revalued once annually in February
Snapshot
Listing date: 02 November 2012 JSE classification: Real Estate Holdings & Development
Asset manager: Delta Property Asset Management (Pty) Ltd JSE code: DLT
Asset management fee: 0.35%
5
Management structure
JB MagwazaNon-Executive Chairman
Sandile NomveteChief Executive Officer
Bronwyn CorbettChief Investment Officer & Chief Operating Officer
Jorge Da CostaIndependent Non-ExecutiveDirector
Chairman of the InvestmentCommittee
Greg BooyensChief Financial Officer(outgoing)
Nooraya KhanLead IndependentNon-Executive Director
Chairman of the Audit, Risk and ComplianceCommittee, Nomination andRemuneration Committee
Paul SimpsonIndependent Non-ExecutiveDirector
Executive directors Non-Executive directors
Dumo MotuaIndependent Non-ExecutiveDirector
Ian MacleodIndependent Non-ExecutiveDirector
Delta Property Asset ManagementAppointed Asset Manager of Delta Property Fund. Owned by trust with BEE staff as beneficiaries, and employs asset management staff
Property Managing Agent CompaniesVarious property management companies appointment to administer day-to-day functions of the property portfolio, including JHI, Braamcor, Moolman, Broll and an internal property management division of Delta Property Asset Management
6
Highlights
Sleepy Hollow, Pietermaritzburg
Delta Towers, Durban 88 Field Street, Durban
7
Highlights
7.2% increase in interim distribution to 42.89 cents (Aug 2014 - 40.01 cents)
More than quadrupled total investment portfolio to R9.47 billion* in 34
months since listing in Nov 2012
Gearing ratio reduced from 49.9% to 46.0%
Level 2 B-BBEE rating achieved
Capital raise of R780.3 million during the period in the form of share
subscriptions
Achieved A2 (ZA) short term GCR credit rating
8
Unitholder profile
Mayor’s Walk, Pietermaritzburg
9
Unitholder profile
As at 31 Aug 2015 Units held Holding
Coronation Fund Managers 84 232 877 15.50%
Public Investment Corporation 76 388 306 14.05%
Stanlib Asset Management 70 368 154 12.95%
Sanlam Investment Management 45 282 259 8.33%
Grindrod Asset Management 41 144 741 7.57%
Kagiso Asset Management 26 927 801 4.95%
Directors 26 205 707 4.82%
Prudential Portfolio Management 19 178 721 3.53%
Investec Asset Management 17 900 244 3.29%
Subtotal 378 224 034 74.99 %
Other 135 929 923 25.01 %
Total 543 558 733 100%
10
Delta Africa
Samora House, Durban
KPMG / Hollard Building, MaputoVodacom Building, Maputo
11
Delta Africa
In line with investment strategy, rebranded Delta International to
Listed on main board of JSE and Stock Exchange of Mauritius
Delta’s shareholding of 31.78% valued at R386 million
Second distribution of US$ 4.65 cents per share declared in August 2015
Zimpeto Square transferred in September, increasing total portfolio to $220 million
Deal concluded for 50% stake in Kafubu and Kitwe Malls in Zambia
Current exposure in Mozambique and Morocco, pipeline in Mauritius, Zambia and Tanzania
Bronwyn Corbett appointed as CEOVodacom Building, Maputo
12
Financial Review
Samora House, Durban
13
Financial review
Growth in distributions of 7.20%
Cost to Income ratio well contained at 11.63%
Total acquisitions of R492.3 million completed in the period
First disposal concluded with process underway to dispose of other non-core
assets
Gearing reduced to 46.0%, and expected to decrease further by Feb 2016 with
disposals
Maintained fixed : floating ratio at 69:31 and competitive cost of debt funding of
8.09%
Shares repurchased at average price of R8.12, a 15.9% discount to NAV
14
Financial overview
31 Aug 2015 31 Aug 2014 28 Feb 2015
Distribution per share (cents) 42.89 40.01 84.071
Cost to income ratio (net) 11.4% 10.2% 10.2%
Cost to income ratio (gross) 27.3% 26.4% 26.0%
Gearing level 46.0% 48.2% 49.9%
Weighted average interest rate 8.09% 8.07% 8.10%
Average debt expiry period (years) 2.60 2.17 2.37
Average debt fix expiry period (years) 1.91 3.04 2.36
Fixed vs. floating 69 : 31 70 : 30 70 : 30
Net asset value per share (excl deferred tax) R9.62 R9.072 R10.02
Average rental/m² R101.49 R93.66 R95.84
Average escalation 7.88% 8.00% 7.97%
1 40.01 cpu for 6 months ended 31 Aug 2014 and 44.06 cpu for 6 months ended 28 Feb 20152Aug 2014 NAV per share restated from R8.67 to R9.07 to take into account the elimination of 2014 unitholders for distribution liability for comparison purposes
15
31 Aug 2015(R’000)
31 Aug 2014 (R’000)
28 Feb 2015(R’000)
Change % (Aug 2015
vs Aug 2014)
Net property income 420 484 325 590 696 300 29.15%
Rental income 578 502 442 291 940 623 30.80%
Property operating expenses (158 018) (116 701) (244 323) 35.40%
Administration expenses (excluding forex losses) (36 366) (25 213) (51 008) 44.24%
Net finance costs (180 657) (139 888) (312 415) 29.14%
Dividend received from Delta Africa 14 057 - 18 247 100%
Accrued distribution from other listed investments - - 11 905 100%
Sundry income 6 080 464 13 590 1,210.34%
Antecedent interest 9 010 13 702 3 425 (34.24%)
Taxation - 5 814 2 381 (100%)
Distributable income for the period 232 608 180 469 382 425 32.2%
Number of shares in issue 1 543 558 733 451 042 442 458 409 836
Distribution per linked unit / share (cents) 42.89 40.01 84.07 7.20%
Cost to income ratio (gross) % 27.3% 26.39% 26.0%
Cost to income ratio (net) % 11.63% 10.16% 10.16%
1Shares in issue at reporting date. Total distribution of R232,607,998 (42.89 cents per unit) will be allocated to 542 316 733 shares in issue at record date
Distributable income statement (extract)
16
Statement of financial position (extract)
31 Aug 2015 (R’000)
31 Aug 2014(R’000)
28 Feb 2015 (R’000)
Change % (Aug‘15 vs Feb’15)
Assets
Non-Current assets 9 227 782 7 701 707 8 396 823 9.90%
Investment property 8 816 434 7 180 373 8 393 900 5.03%
Fair value of property portfolio 8 633 026 7 030 190 8 213 035 5.11%
Straight line rental income accrual 183 408 150 183 180 865 1.41%
Other non-current assets 411 348 521 334 2 923 13,973%
Current assets 456 639 197 197 345 919 32.01%
Non-current assets held for sale 265 630 - 26 500 902.38%
Assets associated with disposal group held for sale - - 2 110 030 (100%)
Total assets 9 950 051 7 898 904 10 879 272 (8.54%)
Equity and liabilities
Total Equity 5 231 003 1 522 954 5 074 171 3.09%
Equity 5 231 003 1 522 954 4 620 981 13.20%
Non-controlling interests - - 453 190 (100%)
Liabilities 4 719 048 6 375 950 4 632 758 1.86%
Non-current liabilities 3 697 715 5 463 129 3 673 309 0.66%
Current liabilities 1 021 333 912 821 959 449 6.45%
Liabilities associated with disposal group held for sale - - 1 172 343 (100%)
Total equity and liabilities 9 950 051 7 898 904 10 879 272 (8.54%)
17
Debt summary
As at 31 Aug 2015
Type R'm 1 Weighted Ave. Rate
Revolving / Liquidity Bank Facilities 637 8.03%
Floating Bank Facilities 1,478 7.79%
Fixed Bank Facilities 1,676 8.29%
Total Bank Facilities 3,791 8.05%
DMTN Programme 738 7.85%
Total Drawn Facilities 4,529 8.02%
Accrued Interest 43 N/A
TOTAL 4,573
Swap Contracts 2 1,222 7.68%
Cross Currency Swaps 225 LIBOR + 2.89%
Fixed : Floating & Total WACC 69 : 31 8.09%1
Reflects balances of facilities and excludes accrued interest at 31 Aug 20152
R362m of the Swap Contracts relates to the DMTN programme, whilst the remainder relates to bank facilities.
18
Debt maturity profile
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
28-Feb-16
28-Feb-17
28-Feb-18
28-Feb-19
28-Feb-20
28-Feb-21
28-Feb-22
R’ millions
DMTN Programme Fixed Bank Facilities
Floating Bank Facilities Revolving / Liquidity Bank Facilities
Swap Contracts
19
Portfolio growth analysis
R’bn LTV %
Comparison of market cap, investment portfolio value and LTV
1,35
1,39
3,00 3,39 3,54
4,08 4,46
2,10 2,12
4,80
6,97 7,18
8,90
9,47
40,0% 38,7%
41,0%47,5%
48,2%
49,9%
46,0%
30%
40%
50%
60%
70%
80%
-
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
10,00
Nov-12 (Listing) Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15
Market cap Investment portfolio LTV %
20
Investment portfolio
Block G, DTI Campus, Pretoria
21
Portfolio breakdown
Property portfolio by sector (building)*
Office -Government
Office -Other
Industrial Retail Total
Number of properties 50 29 2 4 85
Gross lettable area (m2) 389 948 266 606 39 955 27 420 723 929
Vacancy (%) 5.9% 8.9% 31.6% 5.4% 8.4%
Value R 5.41 billion R 3.00 billion R 0.14 billion R 0.53 billion R 9.08 billion
Average rental (R/m2) 113.86 89.45 37.21 106.88 101.49
Average escalation (%) 8.1% 7.5% 5.8% 7.5% 7.9%
Weighted ave. lease expiry (by revenue) 2.69 years 2.21 years 1.95 years 6.09 years 2.67 years
Cost to income ratio (net) 9.57% 34.67% 7.10% 16.94% 11.63%
Cost to income ratio (gross) 22.86% 15.37% 20.15% 36.56% 27.31%
*Sectors of buildings are determined by the classification of majority of tenants within the building
22
Property portfolio analysis
SECTORAL PROFILE: GLA*
54%
37%
6%
4%
Office - Government (53.9%)Office - Other (36.8%)Industrial (5.5%)Retail (3.8%)
41,1%
34%
6%5%
5%4%3%1%
0,8%
Gauteng (41.1%) Kwazulu-Natal (33.9%)
Limpopo (6.2%) Northern Cape (5.4%)
Western Cape (4.6%) Mpumalanga (3.6%)
Eastern Cape (3.3%) Free State (1.0%)
North West (0.8%)
24%
76%
A (24,1%) B (75,9%)
30%
70%
A (31,4%) B (68,6%)
GEOGRAPHIC PROFILE: GLA OFFICE BUILDING GRADE: GLA
SECTORAL PROFILE: RENTAL* GEOGRAPHIC PROFILE: RENTAL OFFICE BUILDING GRADE: RENTAL
40%
27%
12% 6%5%
4%
4%1%
0,7%
Gauteng (39.8%) Kwazulu-Natal (27.4%)
Limpopo (12.0%) Northern Cape (6.1%)
Western Cape (4.9%) Eastern Cape (4.1%)
Mpumalanga (3.9%) Free State (1.1%)
North West (0.7%)
63%
31%
4%
2%
Office - Government (63.3%)Office - Other (30.9%)Retail (4.2%)Industrial (1.6%)
* Based on building classifications
23
Delta’s performance per IPD1
Delta PortfolioListed Fund Benchmark2 Percentile
All Fund Benchmark3 Percentile
Total Return (%) 17.9 13.9 0 12.8 6
Income Return (%) 9.3 9.0 44 8.4 31
Capital Growth (%) 7.9 4.6 11 4.1 19
Basic Rental Growth (%) 6.1 7.0 38 6.6 40
Capital Value per sqm 11 971 10 802 33 12 536 44
Basic Rental Yield (%) 8.9 9.4 78 9.0 63
Net Income Yield (%) 8.5 8.6 N/A 8.1 N/A
Vacant Floor space (%) 7.5 5.1 100 5.2 81
1 Measured annually in December
2Listed Fund Benchmark is constituted by the ten listed property funds that are IPD Measured Funds
3All Fund Benchmark is constituted by the 18 property owners that are IPD Measured Funds
24
Pipeline
Orthotouch Portfolio Chambers of Change Barrack House
Description 15 government tenanted offices Redevelopment of 4 inner city offices Multi-story office building
Location Bloemfontein, Welkom, Nelspruit Johannesburg CBD Cape Town CBD
Lease ExpiryVarious from month-to-month to 24
months4 year head lease 5 years
Anchor Tenant National & Provincial DPW Propertuity Development (Pty) Ltd Department of Home Affairs
GLA 84,405 m2 5,200 m2 4,350 m2
Purchase Price R507,000,000 R79,985,000 R60,500,000
Acquisition Yield 11.5% 11% 10.6%
Status Expected transfer in November 2015 Expected transfer in December 2015 Expected transfer in November 2015
Delta to continue to focus on sovereign underpin.
Acquisition of 15 properties from Orthotouch Limited (as announced on SENS 02 June 2015)
is expected to transfer by the end of November 2015.
25
Disposals
Management has embarked on a disposal programme
Rationale is that certain assets are viewed as non-core, or that the capital from the core assets (where
strong offers have been received) can be better deployed in higher yielding assets
Proceeds will primarily be used to reduce gearing levels
1 disposal concluded, 3 in progress, 15 properties on market with total asking price of R1.25 billion
Richmond Forum Block G - DTI Campus 7 Bell Street Yarona Shopping Centre
Location Auckland Park - JHB Pretoria Nelspruit Tembisa - Midrand
Description Multi-tenanted office Multi-tenanted office Office and workshop Open-air neighbourhood centre
Selling Price R22,500,000 R225,800,000 R5,087,000 R80,000,000
GLA 3,968 m2 7,992 m2 590 m2 5,979 m2
Disposal Yield 6.8% 7.5% N/A, vacant 9.07%
Status TransferredExpected transfer before
February 2016Expected transfer in
November 2015Expected transfer in
November 2015
26
Leasing
Mayor’s Walk, PietermaritzburgThe Marine, Durban
Hallmark Building, Pretoria
27
Leasing
Total leases concluded since 1 March 2015
No of Leases Total AreaWeighted Ave.
Rate / m2
Weighted Ave. Escalation
Renewals 75 24,666 m2 (3.4%1) R 99.32 8.12%2
Historic exit rentals R92.62
New Deals 45 6,566 m2 (1%1) R 97.97 7.01%
Top 3 deals by area
Property Tenant Type Total Area Term Rate / m2 Escalation
Delta Towers Ithala Soc Limited Renewal 3,021 m2 36 months R60.00 8.00%
Protea Coin PTA Fidelity Security Services Renewal 1,914 m2 36 months R37.61 7.50%
The Marine Sasol Solvents Renewal 1,339 m2 60 months R65.00 8.00%
1% of total fund GLA as at 31 August 2015 - 723,929 m2
2Excludes short term renewals of 12 months or less that are not subject to escalation. If these leases are included, the weighted average escalation is 4.85%
28
Capex
CMH Redevelopment, Durban
29
Property
(All figures in Rands)
CMHDealership
88 FieldCommission
HouseEmbassy Building
The Forum Total
Approved budget 156,000,000 85,000,000 28,250,000# 21,843,000 - 291,093,000
Spent in FY2015 37,976,214 - - - - 37,976,214
Spent in H1 2016 93,541,892 34,847,997 - - - 128,389,889
Budget for H2 2016 24,481,894 23,580,254 18,185,050 16,917,584 - 83,164,782
Budget for FY2017 - 26,571,749 10,039,286 4,925,416 30,000,000* 71,536,421
Description
Development of new dealership showroom and parking facilityOpening 1 November 2015
Internal refurbishment of tenanted floors for DPW
Internal refurbishment
# budget reduced in line with tenant driven project
Façade Upgrade Façade Upgrade
* pending approval
Significant Capex projects
30
Headwinds
Capital Towers, Pietermaritzburg
31
Risks / Challenges Mitigants
Treasury Directive - 3 year, 5.5% escalation Market seeing renewals at 7.5% Level 2 B-BBEE status allows the ability to renew
leases Discussions on 10 - 20 year lease terms
Interest rate environment Liquidity in Debt Capital Markets Gearing Foreign currency movements
Fixed rate instruments Optimal use of assets as collateral through flexible
security structures Multibanked Potential disposals Capital raise completed New acquisitions include large equity component Cross currency swaps
Government renewals below historic rental Renewals achieved at market or escalated rentals
Municipal Rates Continued management Adequate forecasts of escalations
Headwinds
32
Prospects
NPA Building, Cape Town
33
Potential upside in DLT
cpu R billion
Historic share price, NAV and distribution per share
23,69
32,51
40,18
72,69
40,01
44,05
84,06
42,89
47,89
90,78
8,067,89 7,96
8,87 8,87 8,67
10,05
10,05
9,62
8,32 8,40 8,30
7,90 7,90 7,85
8,90
8,90
8,20
9,08 9,08
9,62 9,62
6
7
8
9
10
11
12
20,00
30,00
40,00
50,00
60,00
70,00
80,00
90,00
Nov-12(Listing)
FY2013 HY Aug-14 HY Feb-15 FY2014 HY Aug-14 HY Feb-15 FY2015 HY Aug-15 HY Feb-16(Target)
FY Feb-16(Target)
Distribution NAV Share Price
15.6%
8%
34
Positioning against peers
Information from Catalyst Fund Managers September 2015 monthly report and BloombergSector weighted index excludes Attacq, Pivotal, Resilient and Nepi
Historic yield comparison and weight in SAPY index
12,1%11,4%
10,6%
9,7%
8,2% 8,0% 7,9% 7,8% 7,8% 7,7% 7,6%7,0% 6,9%
Sector Weighted Average - 5,8%
1.3%
1.5%
N/A
N/A1.3% 3.5% 2.5% 1.4% 1.1% 3.2%
15.2% 20.1%
N/A% Weight in SAPY index
35
DLT vs R186 Long term bond
6,5%
7,0%
7,5%
8,0%
8,5%
9,0%
9,5%
10,0%
10,5%
11,0%
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15
DLT Yield R 186 Yield
36
Replacement of CFO
Disposal of non-core assets
Strengthening of balance sheet
• Reduce gearing
• Improve credit rating
“Inward” focused asset management of existing portfolio
• Deployment of CAPEX improve quality and lower costs
• Improving cost to income ratio through streamlined and efficient property management
Inner city focus
• Partnerships with developers, tenants, property owners and government to improve and maintain attractive and safe nodes
Continued focus on Sovereign Underpin
• Further parastatal exposure
International diversification
Priorities going forward
Short term
Long term
37
Q & A
38
Annexure 1 - Directors of Delta Property Fund
Sandile Hopeson Nomvete – Chief Executive Officer
Exec Dep. & Prop Dev. Prog. (Wits & UCT Business Schools)
He co-founded Motseng Investment Holdings which eventually became the empowerment partner to Marriot Property Group. A series of mergers and acquisitions within the sector provided the opportunity for Motseng to become the largest 100% black-owned property management company in South Africa.
Sandile serves as a director on a number of other listed entities, including KAP Limited. He has nearly a decade and a half of experience in executive and non executive positions.
Sandile is a graduate of the Property Development Programme from the University of Cape town Graduate School of Business, and holds an Executive Development Programme and Finance for non-financial managers Diploma from the University of Witwatersrand Graduate School of Business.
Bronwyn Anne Corbett – Chief Investment Officer / Chief Operating Officer
BCom (Acc) (Univ. of Natal, PMB), CA(SA)
She has over ten years experience in the property sector with a specific focus on property ownership. Prior to joining Motseng in April 2009 as the Chief Financial Officer, Bronwyn was the Financial Director and joint founder of Universal Retail Construction Company and also the Financial and Operations Director for Universal Property Professionals, a development and property ownership company with a portfolio in excess of R12 billion.
When joining Motseng in April 2009 Bronwyn was integral in the establishment of Tuffsan 89 Investment Holdings (now Delta Property Fund) and built the property portfolio to R2.6 billion which ultimately led to the listing of Delta Property Fund on the JSE. Bronwyn has the ability to secure essential finance and seller relationships which has been paramount to the success of Delta Property Fund.
She holds a Bachelor of Commerce in Accounting from the University of Natal and is a member of the Institute of Chartered Accountants. Bronwyn is also a registered auditor.
Greg Booyens – Chief Financial Officer (outgoing)
Bcom, Diploma in Advanced Banking, Certificate in Business Project Management (UNISA, RAU & Wits)
Greg has spent over 10 years in the finance industry and was appointed as CFO on 01 July 2015 having previously held a senior financial role at Delta’s Asset Manager. Greg completed his articles at PKF South Africa and in 2004 joined UBS (London) as a financial accountant in their fixed income division. Thereafter, Greg spent time at Barclays Plc in their treasury before joining Evolution Group Plc in 2006 where he spent six years in their finance department. He returned to South Africa in 2011. He holds a BCom (Honours) degree in Accounting from the University of Port Elizabeth. Greg is a qualified Chartered Accountant.
39
Directors of Delta Property Fund (cont.)
Johannes Bhekumuzi Magwaza – Non-Executive Chairman
BA, MA (UK)
JB has many years’ experience as a board representative for various JSE listed and non-listed entities including chairmanships at Tongaat Hullet Limited, PamodziInvestment Holdings Proprietary Limited, Motseng, Mutual & Federal Limited and Nkunzi Investment Holdings Proprietary Limited.
He was the founder chairman of the National Economic Initiative and served on the executive committee of the Urban Foundation and the Development Bank of Southern Africa. JB has been the recipient of numerous provincial, national and international prestigious awards and brings a wealth of fiduciary experience to the board of Delta.
Since retiring in 2003, he has become an active non-executive director of a number of black-owned and controlled companies in which he has helped form and lead consortiums, managed conflict and dispute resolutions, implemented governance disciplines, developed strategies and imparted valuable management skills.
Ian Mcloed– Independent Non-Executive Director
Bcom (Hon) Real Estate Investment, Valuation and Development (UNISA)
Ian has 41 years of experience with financial institutions, including Standard Bank and Nedbank, with specific focus on Real Estate Credit Risk. He has extensive knowledge of Real Estate's key role players, business sectors and geographic nodes. Ian’s experience includes the managing of portfolios during changing economic cycles and particularly managing problematic properties in economic downturns.
Dumo Motua – Independent Non-Executive Director
Bcom, Diploma in Advanced Banking, Certificate in Business Project Management (UNISA, RAU & Wits)
Dumo has a wide experience gained from different environments and institutions, spanning the banking, regulatory and supervisory environment, credit risk
rating and policy formulation at government level. Having started her career in banking, focusing on financial analysis and development finance through the
Development Bank of Southern Africa, Dumo moved to the South African Reserve Bank to gain an understanding of the environment within which banks operate.
In 2011 Dumo launched a financial risk management consultancy, Aphiwa Risk Consultants (Pty) Ltd, focusing on the financial inclusion of the small micro enterprises into the formal sector through access to finance. Her projects include advising on strategy formulation for penetrating the informal market.
40
Directors of Delta Property Fund (cont.)
Nooraya Khan – Independent Non-Executive Director
CA (SA)
Nooraya is a Chartered Accountant and a highly – experienced and successful private equity transactor.
She has vast experience in negotiating, implementing and managing private equity and black economic empowerment transactions across South Africa which was obtained during a combined thirteen-year tenure at Rand Merchant Bank (a division of FirstRand Bank Limited) and the Industrial Development Corporation (IndustrialDevelopment Corporation).
Nooraya also gained exposure to project finance transactions and risk management as a manager in the Project Finance and Risk Management divisions of the Industrial Development Corporation, and as a member of the CIBC credit committee of FirstRand Limited.
Jose Jorge Goncalves Da Costa – Independent Non-Executive Director
Jorge has been in the property industry for the past 30 years and is a founding director of Improvon Property Group, developers of prime industrial properties across South Africa and is a past director of Property Fund Managers Limited, the management company of Capital Property Fund and Resilient Property Income Fund.
Directorships include Capital Property Fund, Improvon Properties Proprietary Limited and various non-listed entities.
Paul David Simpson – Independent Non-Executive Director
Royal Institute of British Architects Part 1
Paul has a wealth of experience and a comprehensive track record of delivering sustainable, profitable growth in the retail and property sector. Paul has had close involvement in providing architectural input on three hundred new shopping centres across South Africa, Africa and the Middle East, working with top developers. Paul’s experience ranges from major tenant input through to mall plan design of large regional centres such as Clearwater Mall, Maponya Mall and Irene Mall.
He has served as the construction director of Group Five Building Proprietary Limited in the Western Cape, prior to which he held roles as contracts’ manager at EBC Group plc in the United Kingdom and Mark Amy Limited in Jersey. He subsequently spent nearly two decades at Woolworths Proprietary Limited, heading up the real estate division.
Being a former president of the South African Council of Shopping Centres, founding director of the Green Building Council of South Africa and a member of the Commercial Board of the Bureau for Economic Research, Paul brings a vast amount of expertise to the board.
41
Annexure 2 – Top 10 Properties (by value)
Forum Building Liberty Towers Hallmark Building Delta Towers
Location Pretoria Location Durban Location Pretoria Location Durban
SectorOffice -
GovernmentSector
Office -Other
SectorOffice -
GovernmentSector
Office -Other
GLA 41,003 m2 GLA 40,465 m2 GLA 26,255 m2 GLA 40,694 m2
Vacancy Nil Vacancy 2.66% Vacancy Nil Vacancy 27.57%
Valuation R600 mil Valuation R390 mil Valuation R389 mil Valuation R350 mil
42
Top 10 Properties (cont.)
Hensa Towers Manaka Heights Phomoko Towers The Marine
Location Polokwane Location Pretoria Location Polokwane Location Durban
SectorOffice -
GovernmentSector
Office -Government
SectorOffice -
GovernmentSector
Office -Other
GLA 13,675 m2 GLA 19,122 m2 GLA 13,058 m2 GLA 24,384 m2
Vacancy Nil Vacancy 1.78% Vacancy Nil Vacancy 21.21%
Valuation R341,5 mil Valuation R272 mil Valuation R259,3 mil Valuation R250 mil
43
Top 10 Properties (cont.)
Embassy Building Beacon Hill
Location Durban LocationKing Williams
Town
SectorOffice -
GovernmentSector
Office -Government
GLA 31,129 m2 GLA 13,648 m2
Vacancy 20.81% Vacancy 0%
Valuation R236 mil Valuation R228 mil
44
Annexure 3 - Property operating expenses
109 827
17 481
10 842 5 639
3 821
3 492
2 657
1 071
1 066
1 027
672
302
96
24
BREAKDOWN OF PROPERTY OPERATING EXPENSES(R'000s)
Municipal expenses (69.5%)
Service contracts (11%)
Property management fees (7%)
Repairs and maintenance (3.5%)
Staff costs - onsite (2.4%)
Rental paid - parking rental (2.2%)
Insurance (1.7%)
Consumables (0.7%)
Other property expenses (0.7%)
Letting commissions (0.6%)
Provision for doubtful debts (0.42%)
Marketing (0.2%)
Security expenses (0.06%)
Sundry & admin expenses (0.02%)
45
Annexure 4 - Admin expenses
15 893
7 408
3 701 1 903
1 610
1 344
860
849
742
704
459
544
208
141
BREAKDOWN OF ADMIN EXPENSES(R'000s)
Asset Management fees (43.7%)
Directors fees (20.4%)
Professional fees (10.2%)
Rental paid (5.2%)
Corporate social responsibility (4.4%)
Depreciation (3.7%)
Bank charges (2.4%)
Travel and entertainment (2.3%)
Reporting and announcements (2.0%)
Audit fees (1.9%)
Insurance (1.3%)
Administration & sundry expenses (1.5%)
Compliance and regulatory (0.6%)
Market data (0.4%)
46
29,4%
28,1%
0,4%
14,8%17,8%
8,0%1,5%
BREAKDOWN OF TENANT TYPE(By Revenue)
Provincial Government (29.4%)
National Government (28.1%)
Local Government (0.4%)
State-Owned Enterprise (14.8%)
General Office (17.8%)
Retail (8.0%)
Industrial (1.5%)
Total sovereign (72.7%)
Annexure 5 - Detailed tenant analysis
47