Vukile Property Fund · 2017-06-15 · Retail continues to be the most attractive sector but...

Vukile Property FundDebt Capital Markets Roadshow March 2017

2

A quality Retail PortfolioThe pretty picture in numbers

Retail Property Overview• Tenant & Lease Profile• Rental Affordability Metrics• Centre Trading Metrics

Debt & Funding Overview• Treasury Debt & FX Policies• Analysis of Group Debt

Strategic Direction• Transformation into a Retail REIT• Strong Operational Focus• Diversifying Internationally

DMTN programme• Secured Portfolio• Peer Comparisons• Proposed Amendments

High Quality Low Risk

Retail REIT

Strategic Direction

3

Transformation into a Retail REIT

Total Direct Portfolio

R13.0 Bn

Total Indirect

Portfolio

R2.3 billion

R1.2 Bn other direct assets (9% of direct property portfolio)R200 Mn

(1.3% portfolio)

Total Assets Under Management: R15.3 Bn (85% direct property assets, 15% indirect property assets)

R11.8 Bn direct Retail assets91% of direct property portfolio

R740 Mn(4.8% of portfolio)

Castellana Properties

Socimi (Spain)

R460 Mn(3% of porfolio)

R870 Mn(5.7% of portfolio)

▪ Grow and improve the quality of the fund

▪ Transformation of the fund to become a specialist retail fund

▪ Conservative balance sheet management

▪ Consistent delivery of earnings growth and capital return to shareholders

4

Achieving our Strategic GoalsDelivering on our promises

▪ Market Cap growth from R5.0 billion in 2011 to R13.1 billion currently

▪ GAV growth from R5.4 billion in 2011 to R15.3 billion currently

▪ Average value per property from R45 million in 2011 to R191 million currently

▪ Conclusion of Gemgrow transaction

▪ Sovereign portfolio sale

▪ Retail developments coming on stream

▪ Keep gearing around 30% and maintain hedging at a minimum of 75%

▪ Pay down debt through asset sales of non-core properties

▪ Current gearing (net of cash) below 20% provides scope for further international expansion

▪ 12 year unbroken track record of dividend growth

▪ 21% CAGR since listing

Consistently repositioning and proactively enhancing our portfolio

Strong operational focus on Asset Management

5

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Total Portfolio Market Value per m²

Property Sold Stable Portfolio Acquisitions since 2005 Average

R2 949/m² R5 817/m² R13 650/m²

R3.1 Bn R5.4 Bn R15.3 Bn

52%

48%

Retail Commercial

53%

47%

Retail Commercial

R61 Mn / prop R45 Mn / prop R191 Mn / prop

GAV

Value/m²

Ave value/prop

91%

9%

Retail Other

6

A platform for growth - Building on an exceptional core retail portfolio

Key Strategic Direction

➢ Focus on defensive retail sector in-line with our high-quality low risk portfolio

➢ Evaluating expansion opportunities in existing portfolio to ensure dominance

➢ Looking for accretive acquisitions, developments and corporate opportunities

➢ Continue to invest in our systems and team to add value through our data-driven asset management approach

Continued South African retail asset strategy

Strong core provides springboard for international expansion

➢ Exploring developed markets – Western Europe & United Kingdom

➢ Looking to invest with partners into a holistic property strategy not just into a property portfolio

➢ Currently in advanced discussions

Conservative balance sheet management

➢ Disciplined and conservative financial management – with a gearing ratio of 20.6% and R1.5 Bn of available facilities and cash

➢ Prudent interest rate and foreign exchange hedging policy – 101% of interest bearing debt hedged with a 3.4 year maturity profile

➢ Diversified debt and swap book across all large South African banks

➢ Well established track record of raising equity

7

A pathway to growth while diversifying risk away from South Africa economic challenges

International Expansion

➢ Challenging property sector fundamentals in South Africa

➢ Retail continues to be the most attractive sector but limited stock results in upward price pressure

➢ Benefits of our target international jurisdictions

➢ Attractive property and macro environment with solid growth metrics

➢ Offers diversity away from emerging market risk and exposure to global tenant profiles

➢ Current all-time low interest rate environment in developed markets creates attractive margins to property yields

Why invest internationally

International investment strategy

➢ Will consider investments in developed markets across all sectors

International partner with local real estate expertise to offer:

Vukilesupports partners through its core competencies:

➢ Deep local expertise and knowledge

➢ Access to deal-flow pipeline, with a proven and sustainable

strategy and growth potential

➢ Complimentary vision, values and investment profile to Vukile

➢ Alignment of interests through co-investment alongside Vukile

➢ Entrepreneurial approach to deal making

➢ Disciplined and conservative financial management

➢ REIT expertise and good corporate governance

➢ Strong focus on data-driven asset management

8







Retail REIT

High Quality Retail Assets

* Vukile estimate.

9

East Rand Mall Pine Crest Phoenix Plaza Gugulethu SquareDobsonville

Shopping Centre

GAV R1 258 Mn R778 Mn R761 Mn R437 Mn R413 Mn

Region Gauteng KwaZulu-Natal KwaZulu-Natal Western Cape Gauteng

Gross Lettable Area 69 082m² 40 087m² 24 351m² 25 322m² 23 236m²

Monthly Rental R248/m² R154/m² R243/m² R144/m² R133/m²

National Tenant exposure 87% 93% 80% 90% 87%

Vukile Ownership 50% 100% 100% 100% 100%

Footfall (2016) 11.4 Mn 11.1 Mn 9.4 Mn 10.5 Mn * 10.0 Mn

Nonesi Mall Moruleng Mall Randburg SquareOshakati Shopping

CentreDurban Workshop

GAV R397 Mn R378 Mn R378 Mn R358 Mn R350 Mn

Region Eastern Cape Northwest Gauteng Namibia KwaZulu-Natal





Footfall (2016) 7.0 Mn * 3.5 Mn 7.2 Mn Open Mall 13.1 Mn

High Quality Retail Assets

* Vukile estimate.

10

Geographic Profile - by Market Value

11

Top 10 assets make up c.50% of the retail portfolio

Retail Portfolio Composition

Retail91%

Other9%

Sectoral Profile - by Market Value

Top 10 Properties

47% of Retail Value

By Market Value

34% Gauteng

24% KwaZulu-Natal

7% Western Cape

8% Limpopo

8% Namibia

7% Northwest

6% Free State

5% Mpumalanga

3% Eastern Cape

* Market Values based on September 2016 Valuations. Other data per February 2017 Database for the Retail Portfolio (including Thavhani Mall, Springs Mall, 100% Pine Crest).

12

Low risk with c.80% national tenants

Retail Tenant Exposure

Nationals78%

Other22%

Tenant Profile - by Contractual Rent

Top 10 Tenants

46% of Retail Rent

* Data per February 2017 Database for the Retail Portfolio (including 100% Pine Crest, excluding Thavhani Mall, Springs Mall).

Diversified across

1038 tenants

8.0%

6.2%

5.9%

5.0%

4.7%

4.2%

3.4%

3.3%

3.2%

2.4%

Steinhoff

Shoprite

Edcon

Foschini

Pick n Pay Stores

Spar

Mr Price

Truworths

Massmart

First Rand Group

Top 10 Tenants by Rent

3.0% Pep Stores

2.4% Ackermans

2.5% Jet

1.9% Edgars

0

26 2517

10

22

26

51

69

78

100

Vacant Mar-18 Mar-19 Mar-20 Mar-21 Beyond Mar-21

% of Contractual Rent Cumulative

13

49% of contractual rent expiring in 2020 and beyond (WALE 3.5 years)

Retail Tenant Expiry Profile

* Data per February 2017 Database for the Retail Portfolio (including 100% Pine Crest, excluding Thavhani Mall, Springs Mall, development vacancy).

14

Consistently low vacancy rate with industry leading effort rate

Retail Tenant Affordability

3.30%

3.90%

3.30% 3.30%3.50%

3.80%

2012 2013 2014 2015 2016 2017

Retail Vacancy Profile

* Data per February 2017 Database for the Retail Portfolio (including 100% Pine Crest, excluding Thavhani Mall, Springs Mall). Historic data per Company Annual Results.

77.79 86.86

102.56 108.14

116.11 123.99

2012 2013 2014 2015 2016 2017

Retail Average Base Rentals

9.7%

8.2%7.5% 7.3%

6.6%5.7% 5.5%

4.8% 4.7% 4.6%

6.6%

East

Ran

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all

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Pin

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wn

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all

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i Sh

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e

Sow

eto

Do

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nvi

lleSh

op

pin

g C

entr

e

Gu

gule

thu

Sq

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e

Vu

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Ave

rage

Effort Rate (Rent-to-Sales Ratio)

4.6%

11.6%

7.8%

10.8%

12.3%

6.7%

8.1% 8.0% 7.8% 7.6% 7.5% 7.3%

2012 2013 2014 2015 2016 2017

Retail Rent Reversions and Contractual Escalations

Rent Reversion Contractual Escalations

38,051

34,331

32,503

29,443 29,109 28,840 28,305 27,022

23,216

14,751

27,650

Durban PhoenixPlaza

GugulethuSquare

DurbanWorkshop

SowetoDobsonville

Shopping Centre

OshakatiShopping Centre

Pine Crest Centre East Rand Mall QueenstownNonesi Mall

Moruleng Mall Randburg Square Vukile TotalRetail Portfolio

Annualised Trading Density Trading density year on year growth

15

Retail Portfolio Trading Statistics High trading density with solid growth

9%

14%

3%

4%2% 5% 3%

4%

-2%

N/A

N/A

* Data per December 2016 Retail Reports.

16







Retail REIT

17

Conservative debt management

Debt Overview

* 93% when development loans and Corporate Paper are included. All data per Vukile February 2017 Database.

MaturitiesNo more than 25% of total interest bearing debt to

mature within any one financial yearAchieved and constantly managed

Hedging strategy 75% of interest bearing debt to be hedged 101% *

Target bank versus debt capital market funding ratio Diversified sources of funding37% DMTN debt63% bank debt

Multi-banked approachHold various facilities with multiple banks and

lendersCurrently 5 lenders + DMTN programme

POLICY ACTUAL

LTV policy Internal Management: Maximum LTV level of 40%DMTN LTV 22.8%

Corporate LTV 31.5%

Gearing ratio - Interest bearing debt/total assets 20.6%

LTV stress level marginDMTN : Movement in property valuation from R3.6 Bn to R2.1 Bn, or a reduction of R1.5 Bn (43%)Banks : Movement in property valuation from R8.6 Bn to R4.8 Bn, or a reduction of R3.8 Bn (44%)

Policy relates to LTV level

18

Conservative debt management

Debt Overview (continued)

* GCR February 2017. All data per Vukile February 2017 Database.

Group interest cover ratio Maintain > 2.0:1 times cover Actual 3.73:1 times

ICR stress level Margin Movement in net rental income from R1.243 Bn to R715 Mn, or a reduction R528 Mn (42%)

Total cost of financeMinimise while maintaining hedging and LTV

polocy8.31%

Fixed rate (swap) maturity profileEndeavour to allocate fixed rate debt to mature

between 3 years and 5 years3.4 years

POLICY ACTUAL

Commercial Paper undertakingFully backed by the committed revolving credit

facilitiesAchieved

Rating *Maintain “A” rating for Company and

“AA” in respect of secured notes

Long term rating A (Rating outlook Positive) and Short term rating A1AA+ Secured rating

19

Continuing to maintain a conservative balance sheet

Foreign Exchange Hedging Policies

Prudent approach Minimise adverse foreign exchange fluctuations on Vukile’s earnings, assets and liabilities

Reduce currency risk Acquisition of foreign assets to be funded with foreign loans in same currency

Currency hedging strategy Between 50% and 100% of foreign dividends to be hedged by way of forward currency swaps

Interest rate hedging on foreign debt 75% of interest on foreign loans raised to finance offshore acquisitions to be hedged

POLICY

20

Well hedged with low risk expiry profile

Analysis of Group Debt

2017 2018 2019 2020 2021 2022 2023 2024 Total

Loan Profile R'000 140,000 1,150,330 1,064,874 707,317 520,941 90,302 - 150,000 3,823,764

Swap Profile R'000 50,000 181,667 847,531 261,060 1,033,576 836,726 401,000 - 3,611,560

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Loan and Swap Expiry Profile

170 210 217

820

3,824

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

UnsecuredUnlisted

CorporateBonds

UnsecuredListed

CorporateBonds

UnsecuredListed

CommercialPaper

SecuredListed

CorporateBonds

Secured BankDebt

Total

Analysis of Group Debt

Total ABSA Nedbank Standard Bank RMB Sanlam Capital Markets

17%

33%

25%

19%

7%

R'm

2,407

* Data per Vukile February 2017 Database.

21







Retail REIT

22

Quality Secured Portfolio

Overview Secured Property Portfolio

Number of properties

Average value per property

GLA

Total Secured Portfolio

National Tenant Exposure

19

R4 175 Mn

309 466m²

R220 Mn

70%

Top 5 Properties percentage of Secured Portfolio (by Market Value) 66%

Current LTV of Secured Portfolio 22.8%

Current Vacancy Level 4.4%

* Data per February 2017 Database for the Secured Portfolio (including 100% Pine Crest).

23

Alignment with Industry

Comparative DMTN programmes

Issuer Vukile Growthpoint Redefine Fortress Hyprop Resilient Emira

Cre

dit

rat

ing

Short-term A1(ZA) P-1.za P-1.za P-1.za P-1.za A1+(ZA) A1(ZA)

Long-term A(ZA) Aaa.za Aa2.za Aa3.za Aa3.za A+(ZA) A(ZA)

Secured AA+(ZA) - - - - - AA(ZA)

Programme size R5 Bn R20 Bn R10 Bn R10 Bn R5 Bn R6 Bn R5 Bn

Group LTV threshold 45% N/A 50% 50% 55% 50% 35%

Group LTV31.5% 33.7% 39.5% 25.2% 30.8% 23.7% 37.8%

Secured portfolio LTV threshold 40% N/A 30% N/A 35% N/A 40%

Secured portfolio LTV 22.8% 30.5% 33.9% - 20.8% - 37.8%

Cross default level R75 Mn R100 Mn R100 Mn R100 Mn (2%) # R250 Mn (2%) # R360 Mn (2.5%) # R75 Mn

Listed CP R217 Mn R352 Mn R869 Mn R250 Mn - R300 Mn R254 Mn

Listed Unsecured BondsListed Secured Bonds

R210 Mn *R820 Mn

R5 524 Mn R3 214 Mn R1 331 Mn R2 300 Mn R2 733 Mn R971 Mn

Total listed debt R1 247 Mn * R5 876 Mn R4 083 Mn R1 581 Mn R2 300 Mn R3 033 Mn R1 041 Mn

* Excludes unlisted unsecured bond of R170 Mn# Percentage of total assets

Vukile data per February 2017 Database.

24

To align with Industry – while maintaining same low risk profile without unnecessary restrictions

Proposed Amendments to Vukile DMTN Programme

Group LTV Definition

CURRENT PROPOSED AMENDMENT

Loan to Valuation Ratio means at any time, in respect of the Notes, the ratio as expressed as follows:

Loan to Valuation Ratio = L divided by V

Where:

L = means any secured or unsecured indebtedness of the Vukile Group (whether principal, premium, interest or other amounts) for or in respect of (i) monies borrowed, or (ii) liabilities under any acceptance or acceptance credit, or (iii) any bonds, notes, debentures, loan stock or other debt securities, or (iv) any guarantees or indemnities given, whether present or future, actual or contingent; and

V = the amount of the most recent Open Market Valuation of all the Properties in the Vukile Group Property Portfolio;

Group LTV threshold 45% 50%

Secured Portfolio LTV threshold 40% 45%

Secured Portfolio LTV Definition No Change

Loan to Valuation Ratio means at any time, in respect of the Notes, the ratio as expressed as follows:

Loan to Valuation Ratio = L divided by V

Where:

L = means any secured or unsecured indebtedness of the Vukile Group (whether principal, premium, interest or other amounts) for or in respect of (i) monies borrowed, or (ii) liabilities under any acceptance or acceptance credit, or (iii) any bonds, notes, debentures, loan stock or other debt securities, or (iv) any guarantees or indemnities given, whether present or future, actual or contingent; and

V = sum of the (i) consolidated Property Portfolio Valuation Amount adjusted for minorities, (ii) the market value of equity accounted investments, (iii) the market value of loan receivables, and (iv) cash and cash equivalents;

Questions

26

Contact Details

Name Designation Email Contact Numbers

Vukile Property Fund

Laurence Rapp Chief Executive Officer [email protected] (011) 288 1002

(083) 266 3011

Mike Potts Chief Financial Officer [email protected] (011) 288 1003

(083) 357 1111

Maurice Shapiro Senior Manager: Treasury & Investments [email protected] (011) 288 1001

(083) 577 6184

Rand Merchant Bank

Delia Patterson Distribution [email protected] (011) 282 4162

(083) 676 9595

Leigh Cunningham-Scott Origination [email protected] (011) 282 8559

(084) 569 6611

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Appendix A - Corporate Overview

▪ Conservative debt management▪ Low LTV▪ Prudent interest rate and forex hedging

strategy▪ Well established capital raising track

record

▪ Multi-variate Data-driven approach

▪ Dominant retail centre focus▪ Strong relationships with

key national tenants▪ Strong track record of

increasing trading densities, income and values

▪ Focus on non-GLA income generation

▪ Operating and utility cost containment

▪ First REIT listed on JSE and NSX▪ Fully compliant with King III code▪ Highly respected independent non-executive directors▪ South Africa highly ranked for securities regulation,

transparency and auditing

Vukile – core competencies

28

Three integrated pillars of REIT excellence

Active Asset Management of

Portfolio

Strong Corporate Governance

Capital Market expertise and

strong Financial Management

Corporate Governance

29

• Listed on the JSE• Board complies with King III

Code of Governance Principles• Governed by SA REIT

regulations

• Full board of independent non-executive directors

• Subcommittees: Audit & Risk, Property & Investment and Social ethics & HR

• Continuous monitoring of Board performance

• Internal auditors: Deloitte SA• External Auditors: Grant

Thornton SA• 5 year auditor rotation policy

• Organisation for Economic Development Guidance (OEDG)

• UN Global Compact Code • SA REIT Best Practice

Recommendations • Risk Management policy

Regulatory Compliance Strong Governance Financial Controls Sustainability

Governance Pillars

Category Global Ranking

Protection of minority Interests 1

Strength of auditing and reporting standards 1

Financing through local equity market 1

Soundness of banks 2

Financial services meeting business needs 2

Efficacy of corporate boards 3

Regulation of securities exchanges 3

Vukile Governance Structure South African Global Competitiveness Rankings

Source: WEF Global Competitiveness Report 2016-2017

Key to success & sustainiability

Executive team

Laurence RappCEO

Laurence has been the driving force behind Vukile’s transformation and growth since his appointment in 2011. Prior to joining Vukile,Laurence was a director of Standard Bank and head of the insurance and asset management division and his experience spans theareas of investment banking, private equity, retail banking and insurance and asset management. He currently serves as thechairman of SA REIT, an industry body driving listed property interests, as well as non-executive director of Atlantic Leaf PropertiesLimited.

Michael PottsFinancial Director

Michael is a founding director of Vukile and, prior to joining Vukile, was an independent adviser to the Bridge Capital Group onproperty transactions, property portfolio assembly, financial structuring and capital raising. Prior to that, he was managing andfinancial director of the South African group that forms part of the UK-based Hanover Acceptances Group and a non-executivedirector of Hanover Acceptances Limited and Outspan International.

Hermina (Ina) LopionExecutive Director: Asset Management

Ina has 24 years’ property experience and six years’ life insurance experience within the Sanlam Group. She is responsible for theasset management of the Vukile property portfolio. Ina is also a director of the South African Council of Shopping Centres (SACSC).

Sedise MosenekeExecutive Director

Sedise is responsible for Vukile’s for jointly driving Vukile’s overall portfolio growth and transformation objectives. He was chiefexecutive of Encha Properties from 2004 up until Vukile’s acquisition of a portfolio of government tenanted properties from Encha in2013. He is a past president of the South African Property Owners Association (SAPOA) and is the non executive chairman of EnchaProperty Services. He is a member of the South African Institute of Black Property Practitioners (SAIBPP).

Johann NeethlingDirector: Corporate Services/Group Company Secretary

Johann has 15 years' experience in the areas of assurance, general and corporate finance, governance and company secretariat. Hejoined Vukile in August 2010, after holding various positions within the property division of Sanlam, where he spent 7 years. Heserves as a director and senior vice-president of Chartered Secretaries Southern Africa.

Rob HawtonExecutive: Finance

Rob joined Vukile in May 2015 and held the position of Financial Director of Synergy Income Fund and was instrumental in itsrepositioning into Gemgro Properties. Prior to joining Vukile, Rob was previously the Head: Finance and Support for the Real EstateInvestment Division within the Corporate and Investment Bank of the Standard Bank Group, where he spent 8 years. Prior to that, heheld various finance positions within Investec Bank, Barclays Africa, Tourvest Retail Travel and Credit Suisse (London). Rob holds aB.Com and B.Com (Hons) degrees in accounting and a Master’s degree in Financial Management from the University of Johannesburgand is a Chartered Accountant. He completed his articles with PricewaterhouseCoopers.

Itumeleng MothibeliExecutive: Asset Management

Itumeleng’s real estate experience spans investment appraisal, retail developments and asset management both in the unlisted andlisted real estate environments over the past 10 years. He was previously part of the Old Mutual Property Unlisted Fund and later theSA Corporate Real Estate Fund management teams prior to joining Vukile in August 2012. He is a member of South African Instituteof Black Property Practitioners (SAIBPP), sits on the Gauteng Chapter Committee of the SACSC as well as on the SAPOA AwardsCommittee. 30

Strong blend of property and financial skills

Non-executive directors

Anton Botha• Non-executive director of the JSE Limited (Johannesburg Securities Exchange)• Non-executive director African Rainbow Minerals• Non-executive director Sanlam Limited (one of South Africa's largest life insurers)

Steve Booysen

• Former group chief executive of Absa Group Limited (Top 4 South African Retail Bank)• Non-executive director and chairman of the audit committee of Steinhoff International Holdings Limited (Multi-billion Euro South African-

based international retail holding company listed in Johannesburg and Frankfurt)• Non-executive director Clover Industries, JD Group Limited and Senwes Limited

Renosi Mokate

• Former executive director of the World Bank• Former deputy governor of the South African Reserve Bank.• Renosi currently serves on the board of Bidvest Bank• Chairman of the Government Employees Pension Fund (GEPF)

Peter Moyanga• Peter held a senior management position with McDonald’s Corporation for 10 years• He is the largest owner-operator franchisee of McDonald's restaurants in South Africa• He is the Vice Chairman of Reach For a Dream NPO

Nigel Payne

• Former partner at KPMG• Former Head of Internal Audit at Transnet (South Africa's largest rail, port and pipeline company) • Serves as a member of the King Committee on Corporate Governance• Chairman of Mr Price Group Limited, a leading, multi-billion Euro South African fashion retailer• Serves on the boards of Bidvest Group Limited (a listed South African conglomerate that owns over 300 companies), JSE Limited and BSi Steel

Group Limited • Chairman of Bidvest Bank

Hatla Ntene

• Executive chairman of Mvua Property Partners, a commercial property investment firm• Non-executive director of AECOM South Africa • Non-executive director of Calgro M3 (One of the leading residential development companies in South Africa)• Non-executive director of the Don Hotel Group

Mervyn Serebro

• Former chief executive officer of Vusani Property Investments• Former managing director of OK Bazaars Group (taken over by Shoprite Holdings which is Africa's largest food retailer and employs over 136

000 people)• He is also Chairman of the Reach For a Dream NPO.

31

32

Appendix B – Company Property Overview


33

Top 10 assets make up c.40% of the total portfolio

Company Portfolio Composition

Geographic Profile - by GLA

* Market Values based on September 2016 Valuations. Other data per February 2017 Database for the Total Portfolio (including Thavhani Mall, Springs Mall, 100% Pine Crest, excluding Louis Leipoldt).


Top 10 Properties

42% of Total Value

Sectoral Profile - by GLA

Top 10 Properties

30% of Total GLA

By Market Value By GLA

91% Retail 85%

4% Offices 6%

3% Industrial 8%

1% Motor Related 1%

1% Residential 0%

0.1% Vacant Land 0%


39% Gauteng 42%

22% KwaZulu-Natal 17%

7% Western Cape 6%

7% Limpopo 7%

7% Namibia 7%

6% Northwest 7%

5% Free State 6%

4% Mpumalanga 5%

3% Eastern Cape 3%

34


Company Tenant Exposure

Nationals76%

Other24%


Top 10 Tenants

42% of Total Rent

Nationals76%

Other24%

Tenant Profile - by GLA

Top 10 Tenants

46% of Total GLA

* Data per February 2017 Database for the Total Portfolio (including 100% Pine Crest, excluding Thavhani Mall, Springs Mall, Louis Leipoldt).

Diversified across

1390 tenants

Diversified across

1390 tenants

7.3%

5.6%

5.4%

4.6%

4.3%

3.8%

3.1%

3.0%

3.0%

2.2%

Steinhoff

Shoprite

Edcon

Foschini

Pick n Pay Stores

Spar

Mr Price

Truworths

Massmart

First Rand Group

Top 10 Tenants by Rent2.7% Pep Stores

2.2% Ackermans

2.3% Jet

1.8% Edgars

8.6%

6.4%

6.2%

5.9%

5.1%

3.9%

3.2%

2.6%

2.1%

1.8%

Shoprite

Pick n Pay Stores

Steinhoff

Edcon

Spar

Massmart

Foschini

Mr Price

Truworths

ADT Security

Top 10 Tenants by GLA

2.2% Pep Stores

1.9% Ackermans

2.6% Jet

2.3% Edgars

027 24

17 10230

51

68

78

100


% of Contractual Rent

35

49% of contractual rent expiring in 2020 and beyond

Company Tenant Expiry Profile

* Data per February 2017 Database for the Total Portfolio (including 100% Pine Crest, excluding Thavhani Mall, Springs Mall, development vacancy).

GLA / Rent Cumulative

4.424 21

14 828

30

51

6472

100


% of GLA

WALE 3.5 years

36

Appendix C – Secured Portfolio Overview

Secured Transaction Structure

Noteholders

Vukile Property Fund Limited

Vukile Security SPV Trust No1Group 1 Notes

Vukile Security Company No.1 “Guarantee SPV”

Permitted Creditors (ABSA)

Vukile Security Company No.1 Owner Trust

Issue of Secured Bonds to raise funding to prepay VIPS

Indemnity, Mortgage bond security cession

Guarantee

Guarantee

Guarantee Indemnity

100%

• The Secured Notes are secured through a guarantee from the Vukile Security SPV Trust No.1

• The mortgage bonds are housed in the Guarantee SPV, which provides guarantees to the Permitted Creditors and Vukile Security SPV Trust No.1

37

Pine Crest Phoenix Plaza Gugulethu SquareDobsonville

Shopping CentreRandburg Square


Region KwaZulu-Natal KwaZulu-Natal Western Cape Gauteng Gauteng





Footfall (2016) 11.1 Mn 9.4 Mn 10.5 Mn * 10.0 Mn 7.2 Mn

Secured Portfolio Largest 5 Assets

* Vukile estimate.

38

Secured Portfolio Assets

* Market Values based on September 2016 Valuations. Vacancy excludes Development Vacancy. 39

Total Secured Portfolio Bloemfontein PlazaUlundi King

Senzangakona

Emalahleni Highland

Mews

Elim Hubyeni Shopping

Centre

GAV R4 175 Mn R315 Mn R251 Mn R221 Mn R116 Mn

Region South Africa Free State KwaZulu-Natal Mpumalanga Limpopo




Vacancy 4% 4% 3% 9% 2%

Midrand Allandale

Industrial Park

Randburg Square

ApartmentsMidrand Sanitary City

Makhado Nzhelele

Valley Shopping CentreCenturion Samrand N1


Region Gauteng Gauteng Gauteng Limpopo Gauteng

Gross Lettable Area 21 344m² 6 342m² 5 308m² 11 413m²

Monthly Rental R54/m² R5 200/Unit R61/m² R102/m² R49/m²

National Tenant exposure 2% 100% 89% 25%

Vacancy 6% 0% 0% 1% 5%

Pinetown Richmond

Industrial Park

Mbombela Truworths

Centre

Sandton Linbro Galaxy

Drive Showroom

Kempton Park Spartan

Warehouse

Pretoria Hatfield 1166

Francis Baard Street

GAV R47 Mn R44 Mn R25 Mn R24Mn R15 Mn

Region KwaZulu-Natal Mpumalanga Gauteng Gauteng Gauteng




Vacancy 33% 0% 0% 0% 33%


40

Top 5 assets make up c.65% of the secured portfolio

Secured Portfolio Composition

Geographic Profile - by GLA

* Market Values based on September 2016 Valuations. Other data per February 2017 Database for the Secured Portfolio (including 100% Pine Crest).


Top 5 Properties 66%

of SecuredValue

Sectoral Profile - by GLA

Top 5Properties 50%

of Secured GLA


90% Retail 81%

0% Offices 1%

7% Industrial 17%

1% Motor Related 1%

2% Residential 0%


28% Gauteng 37%

44% KwaZulu-Natal 31%

10% Western Cape 8%

4% Limpopo 6%

0% Namibia 0%

0% Northwest 0%

8% Free State 12%

6% Mpumalanga 6%

0% Eastern Cape 0%

41


Secured Portfolio Tenant Exposure

Nationals74%

Other26%


Top 10 Tenants

43% of SecuredRent

Nationals70%

Other30%

Tenant Profile - by GLA

Top 10 Tenants

44% of SecuredGLA

* Data per February 2017 Database for the Secured Portfolio (including 100% Pine Crest).

Diversified across

632 tenants

Diversified across

632 tenants

8.1%

6.3%

4.8%

4.7%

3.9%

3.9%

3.2%

3.2%

2.4%

2.3%

Steinhoff

Foschini

Edcon

Shoprite

Mr Price

Truworths

First Rand Group

Spar

Absa Bank

Massmart

Top 10 Tenants by Rent3.0% Pep Stores

2.5% Ackermans

3.0% Jet

7.8%

6.9%

5.1%

4.8%

4.5%

3.5%

3.3%

3.2%

2.8%

2.4%

Shoprite

Steinhoff

Edcon

Foschini

Spar

Massmart

Bon Hotel

Mr Price

Truworths

Pick n Pay Stores

Top 10 Tenants by GLA

2.4% Pep Stores

2.4% Ackermans3.4% Jet

3.9% Checkers

3.0% OK

0

3621 18 8 17

36

56

7583

100


% of Contractual Rent

42

44% of contractual rent expiring in 2020 and beyond

Secured Portfolio Tenant Expiry Profile

* Data per February 2017 Database for the Secured Portfolio (including 100% Pine Crest, excluding development vacancy).

GLA / Rent Cumulative

4.4

33 19 14 7

21

39

58

72 79

100


% of GLA

WALE 3.0 years

43

Contact Details

Name Designation Email Contact Numbers

Vukile Property Fund

Laurence Rapp Chief Executive Officer [email protected] (011) 288 1002

(083) 266 3011

Mike Potts Chief Financial Officer [email protected] (011) 288 1003

(083) 357 1111

Maurice Shapiro Senior Manager: Treasury & Investments [email protected] (011) 288 1001

(083) 577 6184

Rand Merchant Bank

Delia Patterson Distribution [email protected] (011) 282 4162

(083) 676 9595

Leigh Cunningham-Scott Origination [email protected] (011) 282 8559

(084) 569 6611

Vukile Property Fund · 2017-06-15 · Retail continues to be the most attractive sector but...

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