ANNUAL RESULTS - dipula.co.za · 8/31/2017 · Real Estate Investment and Services: Diversified...
Transcript of ANNUAL RESULTS - dipula.co.za · 8/31/2017 · Real Estate Investment and Services: Diversified...
1 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ANNUAL RESULTS
FOR THE YEAR ENDED 31 AUGUST 2017
2 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
AGENDA
01
02
03
04
BUSINESS OVERVIEW
FINANCIAL OVERVIEW
LOOKING AHEAD
QUESTIONS & ANSWERS
3 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
JSE sectorReal Estate Investment and Services: Diversified REITS
Date listed 17 August 2011
Closing price (31 Aug 2017) DIA R9.95 | DIB R10.25
Market capitalisation (31 Aug 2017) R4.4 billion
Asset manager Dipula Asset Management Trust
Lead property managers Broll | DPM | McCormick | Moolman Group
Shareholding A & B shares (different risk appetites)
Credit rating BBB (ZA) long term, A3 (ZA) short term
DIPULA AT A GLANCE
South African focused well DIVERSIFIED REIT that invests in retail, office and industrial property. Dipula is managed by an external MANCO
and management holds a sizable stake in the fund, thus ensuring goal alignment with all shareholders.
4 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
DIPULA AT A GLANCE
Retail
Office
Industrial
Western Cape
Northern Cape
Limpopo
KwaZulu-Natal
Gauteng
Free State
Eastern Cape
North West
Mpumalanga
16 3
4 2
6
4 2 1
5 1
1 2
2
6
68 27 24
7
6
119
19
66
2
3
6
Sectoral split by province (174 properties)
112
31
31
BUSINESS OVERVIEW IZAK PETERSEN (CEO)
TRADING ENVIRONMENTHIGHLIGHTS STRATEGY PORTFOLIO
01
6 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
R428m
Distributable
earnings
Up 11,3%
HIGHLIGHTS
Up 5,8%
Combined dividends
per share
R1.5 bn
In progress
Acquisitions
R335m
Non-core disposals
28
including post year end
R265m
Planned revamps
90%
Interest rate
hedging of
BUSINESS OVERVIEW IZAK PETERSEN (CEO)
TRADING ENVIRONMENT STRATEGY PORTFOLIOHIGHLIGHTS
01
8 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ECONOMIC FUNDAMENTALS
HISTORIC - SOUTH AFRICAN GDP GROWTH RATE
Indicator 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Economic activity
Real GDP (YoY%) 3.0 3.3 2.2 2.5 1.7 1.4 0.3 0.7 1.2 1.5
CPI (YoY%) 4.3 5.0 5.6 5.8 6.1 4.6 6.3 5.3 5.1 5.4
Unemployment (%) 24.9 24.9 25.0 24.7 25.1 25.4 26.7 27.5 27.9 28.0
External balance
Current Acct. (% of GDP) -1.5 -2.2 -5.1 -5.9 -5.3 -4.4 -3.3 -2.6 -3.2 -3.4
Fiscal balance
Budget (% of GDP)* -5.3 -4.2 -5.2 -4.9 -4.7 -3.8 -4.1
Interest rates
Central bank rate (%) 5.50 5.50 5.00 5.00 5.75 6.25 7.00 6.65 6.35
3-Month rate (%) 5.55 5.60 5.13 5.22 6.13 6.63 7.36 6.89 6.59
2006 2008 2010 2012 2014 2016 2018
8%
4%
0%
-4%
-8%
Source: Statistics SA, Bloomberg * Fiscal year
FORECASTSOUTH AFRICAN ECONOMY - ACTUALS
9 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ECONOMIC FUNDAMENTALS (CONTINUED)
SA GDP PER CAPITA HISTORIC GROWTH RATE (US$)
1969 1980 1991 2002 2013
6 500
6 000
5 500
5 000
4 500
8 000
7 500
7 000
4500
5000
5500
6000
6500
7000
7500
8000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
SA GDP PER CAPITA FORECAST GROWTH RATE (US$)
Source: Statistics SA
10 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
RETAIL FUNDAMENTALS
IPD TRADING DENSITY INDEX, CURRENT PRICE TERMS (YoY)
2006 2008 2010 2012 2014 2016 2018
Source: MSCI Real estate, Statistics SA
12%
10%
8%
6%
4%
2%
0%
10.3%
-1.2%
0.3%
-4%
-6%
-8%
-2%
Historic - SA GDP growth rate
Annualised trading density growth
11 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
6.1%
3.8%
3.1%
2.2%
4.1%
0% 2% 4% 6% 8%
Neighbourhood
Community
Small regional
Regional
Super regional
RETAIL VACANCY RATE PER SEGMENT
Source: MSCI Real estate
NeighbourhoodCommunitySmall regionalRegionalSuper regional
2
1
0
-1
-2
-3
-4
2015 2016 2016 2017
-5
1,833
0,195
-2,235
-2,555
-4,484
VACANCY CHANGE RATE SINCE MID 2015 CURRENT VACANCY RATE - JUNE 2017
12 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
20%
12.6%11.7%
10.6%
6.8% 6.5%
0%
5%
10%
15%
City of Joburg eThekwini Municipality City of Tshwane City of Cape Town Nelson Mandela BayMunicipality
OFFICE FUNDAMENTALS
VACANCY RATE - AS AT SEPTEMBER 2017
20%
10%
1993
2.7%
10%
1998 2003 2008 2013 2018
11.2%5.5%
0%
Vacancy rate
Asking rental growth
Source: SAPOA office vacancy survey
LONG TERM TREND
13 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
OFFICE DEVELOPMENT ACTIVITY - BY NODE - SEPTEMBER 2017
2.4%
2.4%
2.6%
2.7%
3.4%
3.5%
5.9%
14.7%
16.3%
37.1%
0% 5% 10% 15% 20% 25% 30% 35% 40%
All other nodes
Lynnwood / Menlo Park /Persequor Park / Hazelwood
Epsom Downs
Century City
Centurion CBD
Midrand
Cape Town
Umhlanga / La Lucia
Rosebank
Waterfall
Sandton
% of total development GLA
3,5% 5,0%
Source: MSCI Real estate
14 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
3.6%4.3%
4.8%4.1% 4.1%
2.9%
4.1% 3.9%
3.1%
2.3%2.0%
2.7%2.2%
2.6%
3.7%
4.9%
3.5%
0%
1%
2%
3%
4%
5%
6%
Jun2009
Dec2009
Jun2010
Dec2010
Jun2011
Dec2011
Jun2012
Dec2012
Jun2013
Dec2013
Jun2014
Dec2014
Jun2015
Dec2015
Jun2016
Dec2016
Jun2017
INDUSTRIAL FUNDAMENTALSINDUSTRIAL VACANCY RATE
INDUSTRIAL BASE RENTAL GROWTH - ANNUAL % GROWTH Y/Y
14%
12%
10%
8%
6%
4%
Jan
2010
Jan
2011
Jan
2012
Jan
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jun
2017
13.9%
2.9%
Source: MSCI Real estate
15 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
5.8%
4.3%
2.7%
3.7%3.3%
0%
1%
2%
3%
4%
5%
6%
7%
0 - 2 500m² 2 500m² - 5 000m² 5 000m² - 10 000m² 10 000m² - 25 000m² >25 000m²
INDUSTRIAL VACANCY RATE BY BOX SIZE - AS AT JUNE 2017ALL INDUSTRIAL
BASE RENTAL GROWTH BY BOX SIZE - AS AT JUNE 2017
4.2% 3.9%2.9%
7.4%
3.5%
8.7%
3.2%
5.0%
2.1%
0%
2%
4%
6%
8%
10%
June 2017
All industrial 2 500m² - 5 000m² 5 000m² - 10 000m² 10 000m² - 25 000m² >25 000m²
June 2017 June 2016 June 2017 June 2016 June 2017 June 2016 June 2017 June 2016
Source: MSCI Real estate
BUSINESS OVERVIEW IZAK PETERSEN (CEO)
STRATEGYTRADING ENVIRONMENT PORTFOLIOHIGHLIGHTS
01
17 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
STRATEGY
Office
• Offices in well serviced
preferred nodes
• A-grade or higher
• Long WALE’s
• Preferably multi-tenanted
• Sell or convert lower
grade offices
Residential
• Affordable rentals
• Family oriented
• Conversion of
existing stock
• Good amenities
SECONDARY SECONDARY
Sell strip centres & stand-alone retail
(<5 000m²)
Optimal size and tenant mix a key to
success
Approach rural retail with caution
› Focus on quality tenants
› Improve existing stock • Retail:
Community & Neighbourhood
Centres (5 000m² - 25 000m²)
CORE FOCUS
• Industrial:
Multi-use industrial parks & stand-
alone (2 500m² - 25 000m²)
18 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
SURVIVAL TOOLKIT FOR A SLOW ECONOMY
› Avoid the ostrich effect
› Focus on building a solid core through selective buying, strategic disposals
and revamps
› Focus on the tenant experience
› Tactical leasing
› Maintain a sense of urgency & initiative
› Retain our talented people
› Focus on long term value creation for investors
BUSINESS OVERVIEW IZAK PETERSEN (CEO)
TRADING ENVIRONMENT STRATEGYHIGHLIGHTS PORTFOLIO
01
20 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
59%
16%
25%
Retail
Office
Industrial
OUR PORTFOLIO AT 31 AUGUST 2017
Geographic split by GLA Sectoral split by GLA
757 363m²
Total
GLA
R40m
Average
property value
R6.9 bn
Average value
per m² by GLA
4 353m²
Average
property size
R9 106174 properties
7,7%
Average
escalation
Portfolio
value
60%13%
10%
6%
3%3%
2%2%1%Gauteng
Limpopo
Eastern Cape
KwaZulu-Natal
North West
Free State
Mpumalanga
Western Cape
Northern Cape
21 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
Property Rent/turnover SAPOA average Trading density YoY trading
density growth
Nquthu Plaza 4,3% 5,6% 2 419 3,0%
Seshego Circle 3,5% 5,6% 3 062 1,6%
Phangami Mall 3,0% 5,4% 3 613 -1,0%
Gillwell Mall 8,0% 7,3% 1 242 14,0%
Gezina Galleries 5,1% 5,6% 2 057 16,0%
Bochum Plaza 3,0% 5,6% 3 017 9,0%
Kopanong Kudube Centre 5,0% 5,4% 2 610 -4,0%
Ziyabuya Centre 5,0% 5,6% 1 826 1,0%
Hammanskraal Centre 4,0% 5,4% 1 436 7,0%
Woodmead Super Value Mart 3,0% 5,4% 2 718 7,0%
Eyethu Orange Farm Mall 5,8% 7,3% 2 388 14,0%
Tower Mall* 2,9% 5,6% 2 832 9,0%
RETAIL TRADING UPDATE
MAJOR RETAIL PROPERTIES TRADING STATS
* Only anchor tenant
22 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
31
71 92
54 46
142 7
10
8
5
14
- 2 4 6 8 10 12 14 16
-
50
100
150
200
250
Total portfolio
63
180 160
88 72
182
14 16
10
7
16
-3
-
3
6
9
12
15
18
-
50
100
150
200
250
LEASE EXPIRY PROFILE
Average monthly gross income
Vacant
Expiring before 31 Aug 2018
Expiring before 31 Aug 2019
Expiring before 31 Aug 2020
Expiring before 31 Aug 2021
Expiring after 31 Aug 2021
GLA (000m²) Rm
GLA (000m²) Rm GLA (000m²) RmGLA (000m²) Rm
Retail Office Industrial
22 28 40 15 6 7
2.3
4.2
1.5
0.7 0.6
-1
-
1
2
3
4
5
-
50
100
150
200
250
10
81
28 18 20 33
3.9
1.30.7
1.6 1.4
-2
-
2
4
6
-
50
100
150
200
250
23 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
Retail Office Industrial Total
Number of leases 137 30 17 184
Value of leases 109 795 560 45 737 902 53 794 314 209 327 776
Weighted average gross rental (R/m²) 66,41 107,04 39,47 69,65
Total GLA let (m²) 32 379 10 343 12 661 55 384
Weighted average escalations 8,9% 8,1% 8,2% 8,6%
LEASE ACTIVITY - 1 Sep 2016 to 31 Aug 2017
New leases
Retail Office Industrial Total
Number of leases 199 34 26 259
Value of leases 329 023 800 86 685 181 51 534 566 467 243 547
Average gross rental expiry (R/m²) 94,78 113,09 48,39 91,20
Average gross rental new (R/m²) 99,71 118,12 49,75 95,41
Total GLA renewed (m²) 69 231 51 827 32 263 153 322
Weighted average escalations 7,3% 8,0% 7,6% 7,4%
Average increase in renewal rate 5,2% 4,4% 2,8% 4,6%
Renewals
24 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
LEASE ACTIVITY (CONTINUED)
Renewals
New leases
› Overall 80%
› Retail 79%
› Offices 83%
› Industrial 79%
Tenant retention rate
75%
16%
9%
58%19%
23%
77%
13%
10%
45%
34%
21%
Total new GLA let: 55 384m²Number of new leases: 184
Number of leases renewed: 259 Total GLA renewed: 153 322m²
25 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
VACANCIES
Retail 7.1%
Office 18.7%
Industrial 5.4%
(31 Aug 2016: 8.5%)
(31 Aug 2016: 12.8%)
(31 Aug 2016: 5.9%)
Vacancies 8.5% (31 Aug 2016: 8.5%)
26 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
WEIGHTED AVERAGE ESCALATIONS & RENTALS
Gross rentals (R/m²)
Retail Office Industrial Portfolio
By income 122.73 117.52 55.02 111.90
By GLA 106.71 109.22 50.37 92.12
Escalations
Retail Office Industrial Portfolio
By income 7.3% 8.8% 7.8% 7.6%
By GLA 7.4% 8.9% 7.9% 7.7%
27 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
28 properties for
Total of
R335m
DISPOSALS
10%
Average yield
50 472m²
Total GLA sold
1 803m²
Average size
R12m
Average value Capital recycled into
redevelopments and
payment of debt
28 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
Industrial
REDEVELOPMENTS & REVAMPS
Retail Office
Property Description
Capex
amount
(Rm)
Units /
GLA
Anticipated
completion
Nemisa Existing office re-development 50 5 042 Completed
Various Retail redevelopment / revamp 128 91 504 2018
Various Residential conversions 116 646 2018
Range Road Industrial addition 21 12 905 2018
Total 315
Residential
29 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITIONS
Acquisition price R1,5 bn
Blended yield 11,4%
Price per m² 5 784
WALE 4.5
Total bulk acquired 35 093
GEOGRAPHIC SPLIT
BY GLA
46%
42%
12%18%
27%55%
OVERALL SUMMARY ACQUISITION VALUEACQUISITION GLA
R14 605
R13 558
R3 995
AVERAGE PRICE
PER m²
GEOGRAPHIC SPLIT
BY VALUE*
53%
20%
6%3%
18%
Western Cape
North West
GautengKwaZulu-Natal
Other
72%
8%
4%
12%4%
Gauteng
Western Cape
North West
KwaZulu-Natal
Other
* The geographic split by income is similar to the split by value
30 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: CHILLI LANE
Sunninghill - Gauteng
Retail sector
Purchase price (Rm) 281
GLA (m²) 13 391
Weighted average net rental
per m² (R)164,41
Cost per m² 20 967
Anchor tenants
Average lease period 4 years
Trading density (R / m² / month) 3 933
Woolworths, PnP
31 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: CHILLI ON TOP
Sunninghill - Gauteng
Retail sector
Purchase price (Rm) 87
GLA (m²) 5 042
Weighted average net rental per
m² (R)146,08
Cost per m² 17 199
Anchor tenants
Average lease period 6 years
Trading density (R / m² / month) 4 414
Food Lovers, DisChem
32 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: HARDING CORNER (50%)
Harding - Southern KwaZulu-Natal
Retail sector
Purchase price (Rm) 55
GLA (m²) 9 105
Weighted average net rental per
m² (R)103
Cost per m² 12 081
Anchor tenants
Average lease period 4 years
Trading density (R / m² / month) 2 508*
Shoprite
* Only anchor tenants
33 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: FIRESTATION ROSEBANK
Rosebank - Gauteng
Office sector
Purchase price (Rm) 122
GLA (m²) 4 272
Weighted average net rental
per m² (R)210,00
Cost per m² 28 490
34 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: AVANTI
Durbanville - Western Cape
Office sector
Purchase price (Rm) 172
GLA (m²) 8 369
Weighted average net rental
per m² (R)156,22
Cost per m² 20 569
Average lease period 3 years
35 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: CARNATION PLACE
Constantia Kloof - Gauteng
Office sector
Purchase price (Rm) 101
GLA (m²) 4 440
Weighted average net rental
per m² (R)183,77
Cost per m² 22 801
Average lease period 4 years
36 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: 55 HYDE PARK
Hyde Park - Gauteng
Office sector
Purchase price (Rm) 39
GLA (m²) 2 167
Weighted average net rental
per m² (R)118,00
Cost per m² 17 943
Average lease period 5 years
37 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: DETNET
Modderfontein - Gauteng
Office sector
Purchase price (Rm) 23
GLA (m²) 913
Weighted average net rental
per m² (R)171,43
Cost per m² 25 192
Average lease period 4 years
38 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
ACQUISITION: VALLEY VIEW OFFICE PARK
Constantia Kloof - Gauteng
Office sector
Purchase price (Rm) 100
GLA (m²) 6 793
Weighted average net rental
per m² (R)87,35
Cost per m² 16 070
Average lease period 4 years
39 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
FUTURE DEVELOPMENTS: HATFIELD 1 & 2
Hatfield - Gauteng
Mixed-use
Purchase price (Rm) 58
Bulk (m²) 16 093
FINANCIAL REVIEW RIDWAAN ASMAL (CFO)02
41 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
FINANCIAL HIGHLIGHTS
Distribution growth
per share
80,7%
Property operating
margin (net)
R134m
Acquired remaining
20% of Moolman portfolio
R10,13
Net asset value
per share
38,9%
Loan to value
Combined 5.8%
DIA 5.0%
DIB 6.7%
R1,0 bn
Debt refinanced
42 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
DISTRIBUTION GROWTH
cps
79.37 83.34 87.50 91.88
96.47 101.30
60.82 66.64
73.34 80.30
89.49 95.50
140.19 149.98
160.84
172.18
185.97
196.80
0
50
100
150
200
250
Aug 2012 Aug 2013 Aug 2014 Aug 2015 Aug 2016 Aug 2017
A- share B- share Total
5.0%
9.6%
7.0%
5.0%
10.0%
7.2%
5.0%
9.5%
7.1%
5.0%11.5%
8.0%
5.0%6.7%
5.8%
43 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
COMBINED MARKET PRICE TO NAVcents
1065 1069 1035
1172 1142
995
1000
650750 790
1114
900
1025
1050
500
800
1 100
1 400
Aug 2012 Aug 2013 Aug 2014 Aug 2015 Aug 2016 Aug 2017 Current
DIA DIB
cents
17151819
1825
22862042 2020 2050
14161570 1630
1868
2092 2026 2026
21%
16%
12%
22%
-2%0% 1%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
500
1000
1500
2000
2500
Aug 2012 Aug 2013 Aug 2014 Aug 2015 Aug 2016 Aug 2017 Current*
Market price NAV Premium / Discount
44 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
SHARE PRICE APPRECIATION (CENTS)
200
400
600
800
1000
1200
1400
1600
Aug
-11
Oct-
11
De
c-1
1
Fe
b-1
2
Apr-
12
Ju
n-1
2
Aug
-12
Oct-
12
Dec-1
2
Fe
b-1
3
Apr-
13
Ju
n-1
3
Aug
-13
Oct-
13
Dec-1
3
Fe
b-1
4
Apr-
14
Ju
n-1
4
Aug
-14
Oct-
14
Dec-1
4
Fe
b-1
5
Apr-
15
Ju
n-1
5
Aug
-15
Oct-
15
Dec-1
5
Fe
b-1
6
Apr-
16
Ju
n-1
6
Aug
-16
Oct-
16
Dec-1
6
Fe
b-1
7
Apr-
17
Ju
n-1
7
Aug
-17
Oct-
17
Dec-1
7
DIA DIB
45 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
STATEMENT OF COMPREHENSIVE INCOME (EXTRACTS)
31 Aug 2017
R 000
31 Aug 2016
R 000 Variance
Revenue 1 052 517 1 023 475 2,8%
Property expenses (353 463) (349 646) 1,1%
Net property income 699 054 673 829 3,7%
Administration and corporate costs (31 887) (32 013) (0,4%)
Net operating profit 667 167 641 816 3,9%
Net finance cost (243 632) (242 002) 0,7%
Antecedent dividend 10 991 2 492 341,1%
Non-controlling interests (6 367) (17 670) (64,0%)
Distribution 428 159 384 636 11,3%
Distribution per A-share 101,29784 96,47414 5,0%
Distribution per B-share 95,49834 89.49361 6,7%
Combined distribution 196,79618 185.96775 5,8%
Gross property cost to income ratio 34% 34%
Net property cost to income ratio 19% 17%
Total cost to income ratio 23% 21%
46 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
70%
16%
14%
70%
18%
12%
70%
16%
14%
SECTORAL PERFORMANCE (Aug 2017 v. 2016)
Net property incomeProperty expensesRevenue
70%
17%
13%
73%
17%
10%
69%
17%
14%
Aug 2016
Aug 2017
47 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
STATEMENT OF FINANCIAL POSITION (EXTRACTS)
31 Aug 17
(R 000's)
31 Aug 16
(R 000's)
Variance
(%)
Non-current assets 6 989 754 7 017 087 (0,4%)
Current assets 374 260 206 704 81%
Vendor on sale of property 89 936 - 100%
Cash and cash equivalents 130 226 58 732 122%
Other 154 098 147 972 4%
Non-current assets held for sale 42 942 93 850 (54%)
Total assets 7 406 956 7 317 641 1%
Interest-bearing liabilities 2 822 065 2 886 664 (2%)
Derivative liability 35 082 - 100%
Other liabilities 125 336 105 373 19%
Total liabilities 2 982 483 2 992 037 (0,3%)
Net assets 4 424 473 4 325 604 2%
Loan to Value (LTV) 38,9 40,1%
48 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
130
(67)
239
(134)
112
(111)
(413)
(245)
691
59
(1 500)(1 000) (500) 0 500 1 000
59
845
286
128
61
(1 283)
(376)
(242)
577
63
(1 500)(1 000) (500) 0 500 1 000
CASH FLOW - Rm
Opening balance
Cash generated from operations
Net finance cost
Distribution paid
Acquisitions and capex
Equity raised
Closing balance
Disposals
Debt funding raised
Non-controlling interest
31 Aug 2017 31 Aug 2016
49 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
DEBT PROFILE
18.6%
31.8%
24.8%
18.1%
6.7%
11.0%
38.3%
25.2%
11.7%
3.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Debt expiry Hedge expiry
› 90% of debt hedged for average 2.2 years (61% at 31 Aug 2016)
› Weighted average cost of debt 9.17%
› Weighted average length of facilities 2.7 years
LOOKING AHEAD IZAK PETERSEN (CEO)03
51 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
LOOKING AHEAD – 2018 PRIORITIES
› Challenging year expected
› Finalise acquisitions
› Increase number of in-house managed properties
› Implement Manco internalisation
› Guidance 5% - 5.5%
QUESTIONS & ANSWERS04
ANNEXURES05
54 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
67%
15%
18%
A B C
70%
12%
18%
TENANT PROFILE
By GLA By rental income
Shoprite Group 9%
Department of Public Works 7%
Pick 'n Pay Group 5%
Pepkor Group 3%
Local Government 3%
Masscash 3%
Cashbuild 2%
Edcon Group 2%
Spar Group 2%
Electro Inductor Industries 2%
Top 10 tenants by let GLA
55 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
10%
90%
Single tenanted
Multi tenanted
60%
40%
Single tenanted
Multi tenanted
37%
63%
Single tenanted
Multi tenanted
BUILDING AND TENANT PROFILE
74%
19%
7%Urban
Small Town
Rural
46%54%
0%
A Grade
B Grade
C Grade
Retail by GLA
Office grading Retail GLASpace exposure
25%
75%
Single
Multi
*
* Including urban townships
Office by GLA Industrial by GLA
56 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
TOP TEN PROPERTIES
29.2% of total portfolio by value
Building Name Region
Aug 2017
GLA m²
Value as at
31 August 2017
Rm
1 Gillwell Taxi Retail Park Eastern Cape 22 090 310,8
2 SAPS VIP Gauteng 21 478 300,0
3 Umzimkhulu Mall KwaZulu-Natal 15 741 216,1
4 Nquthu Plaza KwaZulu-Natal 14 912 195,8
5 Gezina Galleries Gauteng 16 670 188,3
6 Kopanong Kudube Shopping Centre Gauteng 10 755 176,6
7 Corporate Park II Limpopo 28 058 171,6
8 Bochum Plaza Limpopo 12 081 166,2
9 Tower Mall North West 15 436 156,3
10 Seshego (50% share) Limpopo 15 168 133,4
Total top ten properties 172 388 2 015,1
Retail Office Industrial
57 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
TOP TEN RETAIL PROPERTIES
38.5% of retail portfolio by value
Building Name Region
Aug 2017
GLA m²
Value as at
31 August 2017
Rm
1 Gillwell Taxi Retail Park Eastern Cape 22 090 310,8
2 Umzimkhulu Mall KwaZulu-Natal 15 741 216,1
3 Nquthu Plaza KwaZulu-Natal 14 912 195,8
4 Gezina Galleries Gauteng 16 670 188,3
5 Kopanong Kudube Shopping Centre Gauteng 10 755 176,6
6 Bochum Plaza Limpopo 12 081 166,2
7 Tower Mall North West 15 436 156,3
8 Seshego (50% share) Limpopo 15 168 133,4
9 EOFM Gauteng 7 448 129,5
10 Woodmead Super Value Mall Gauteng 7 169 127,5
Total top ten retail properties 137 469 1 800,5
58 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
TOP TEN OFFICE PROPERTIES
70% of office portfolio by value
Building Name Region
Aug 2017
GLA m²
Value as at
31 August 2017
Rm
1 SAPS VIP Gauteng 21 478 300,0
2 SAPS IJS Gauteng 7 874 112,2
3 Nemisa Office Building Gauteng 4 762 80,0
4 Boardwalk Place Gauteng 6 455 79,9
5 Steve Biko Corner Gauteng 5 048 71,9
6 50 Hamiton Street Gauteng 4 500 52,3
7 Finance House Gauteng 8 451 44,5
8 Sanburn Building Gauteng 6 757 41,6
9 Montrose Place Gauteng 3 922 37,0
10 Bruma Boulevard Gauteng 4 623 36,1
Total top ten office properties 73 870 855,5
59 ANNUAL RESULTS – FOR THE YEAR ENDED 31 AUGUST 2017
TOP TEN INDUSTRIAL PROPERTIES
69.5% of industrial portfolio by value
Building Name Region
Aug 2017
GLA m²
Value as at
31 August 2017
Rm
1 Corporate Park II Limpopo 28 058 171,6
2 New Brighton Eastern Cape 23 099 130,0
3 Renaissance Park Gauteng 10 680 79,0
4 Sterkolite Building Gauteng 12 782 78,1
5 Range Road Blackheath Western Cape 10 980 60,0
6 Tedstone Park Gauteng 6 940 42,6
7 Vana Road Gauteng 8 195 38,0
8 SIFON Park Gauteng 9 300 37,2
9 Bernie Street Gauteng 6 342 30,0
10 Jasco Building Gauteng 5 014 29,2
Total top ten industrial properties 121 390 695,7