interim results presentation - december 2016 · 18 suni avenue corporate park logistics 5 640 7 575...

INTERIM RESULTS PRESENTATION - DECEMBER 2016

22 ON SLOANE

HIGHLIGHTS

Market capitalisation R53.9 billion

Dividend (FFA) 5.0%

Dividend (FFB) 25.12%

NAV (FFA) R16.32

NAV (FFB) R24.73

Vacancies 6.0%

Average cost of debt 8.92%

Interest rate hedging 93.5%

STATE OF THE MARKET

Logistics demand

Retail trade

Offices

Rand hedges

Interest rates

FINANCIAL PERFORMANCE

Dec 2016 Jun 2016 Dec 2015 Jun 2015

Dividend per A share (cents) 67.96 64.45 64.72 61.38

Dividend per B share (cents) 78.59 74.69 62.81 39.20

Shares in issue at period end

- A 1 172 508 991 1 119 708 334 1 091 747 728 466 251 105

- B 1 067 026 847 1 014 226 190 986 265 584 466 251 105

Shares used for dividend per share calculation

- A 1 165 408 991 1 112 608 334 1 112 608 334 466 251 105

- B 1 067 026 847 1 014 226 190 1 014 226 190 466 251 105

A shares held in treasury 7 100 000 7 100 000 7 100 000 -

Fair value information

NAV Fortress A R16.32 R15.62 R16.61 R15.72

NAV Fortress B R24.73 R25.73 R24.14 R16.21

Loan-to-value ratio* 25.2% 23.8% 25.3% 27.3%

* The loan-to-value ratio is calculated by dividing interest-bearing borrowings adjusted for cash on hand by the total of investments in property, listed securities and loans advanced.

Information based on proportionate consolidation, accounting for Greenbay and Rockcastle at fair value and the Hammerson equity derivative position on a gross basis.

FACILITY EXPIRY

6 000

5 000

4 000

3 000

2 000

1 000

0Jun 2017 Jun 2018 Jun 2019 Jun 2020 Jun 2021 Jun 2022 Jun 2023

Faci

lity

expi

ry (R

’m)

1.28%

1.64%

1.65%

1.71%

1.79%

1.91%

1.70%

1.67%

Average margin over Jibar

The all-in weighted average cost of funding

was 8.92% at December 2016

1.75% 1.99%

Jun 2024 Jun 2027

INTEREST RATE DERIVATIVES

0

300

600

900

1200

1500

Jun 2018 Jun 2019 Jun 2020 Jun 2021 Jun 2022 Jun 2023 Jun 2024 Jun 2025

1 500

1 200

900

600

300

0

Swaps Caps

Swaps and caps: Total R5 950 million. Average hedge term:

4.1 years.

(R’m

)

FUNDING

RMB:

Standard Bank:

Libfin:

ABSA:

Nedbank:

Sanlam:

DMTN 3 years:

DMTN 2 years:

DMTN 1 year:

DMTN 6 months:

Dec 2016

R5 628m

R7 479m

R600m

R300m

R740m

R500m

R1 008m

R122m

R200m

R250m

DIRECT vs INDIRECT ASSETS

Direct:

ROC:

NEP:

RES:

HMN:

GRP:

Information shown on a fair value/proportionately consolidated basis.

49.9%

21.1%

16.0%

7.8%

2.2%

3.0%

Dec 2016

SECTORAL SPLIT BY PROPERTY VALUE

Logistics:

Retail:

Offices:

Industrial:

Other:

35.7%

34.1%

15.9%

12.7%

1.6%Dec 2016

EQUITY INVESTMENTS AT FAIR VALUE

Investment No of sharesFair valueDec 2016

(R’000)

Greenbay (GRP) 1 069 101 000(R1.59)

1 699 871

Hammerson (HMN) 13 300 405(R96.07)

1 277 770

Nepi (NEP) 57 876 000(R159.00)

9 202 284

Resilient (RES) 39 455 000(R114.41)

4 514 047

Rockcastle (ROC) 350 490 000(R34.50)

12 091 905

28 785 877

LOGISTICS - DEVELOPMENTS COMMENCED

Property name % Owned GLA (100%)Development cost (100%)

Estimated yield

Completion date

C. Steinweg Bridge* 51% 30 000m2 R160m 10.3% Oct 2017

Louwlardia Logistics Park 100% 23 711m2 R128m 9.5% Feb 2017

Westlake One 100% 20 000m2 R110m 9.3% Mar 2017

Union Park 100% 13 300m2 R109m 9.3% Sep 2017

Montague Business Park# 25% 4 894m2 R12m 8.6% Sep 2017

R519m

* 15-year lease to C Steinweg Bridge Group and sale of 49% share in the development to the tenant.# 5-year lease to Geberit Southern Africa.

LOGISTICS - DEVELOPMENT PIPELINE

Property name GLA

(100%)Development cost

(100%)Estimated

yieldCommencement

date

Clairwood Logistics Park 358 000m² R2 680m 8.3% Apr 2017

R21 Logistics Park (65.0%)^ 500 000m² R2 500m 9.5% Apr 2017

Cornubia Logistics Park (50.1%)*  120 000m² R722m 9.0% Jul 2017

Linbro Park East Logistics^ 100 000m² R550m 9.5% #

Louwlardia Logistics Park 70 000m² R378m 9.5% Apr 2017

Montague Business Park (25.0%) 55 000m² R315m 8.5% #

Rivergate Cape Town 30 000m² R170m 8.5% #

Linbro Logistics (50.0%) 23 000m² R125m 9.5% Jun 2017

Westlake Logistics Two 20 000m² R110m 9.3% Jun 2017

R7 550m

* Transferred.# Subject to pre-leasing.^ Transfer subject to regulatory approval.

RETAIL PROJECTS

Name GLA (100%)Estimated construction cost

(100%)Completion date

Estimated yield

White River Phase 1 (50.0%) 12 000m² R130m Jun 2018 8.0%

Weskus 6 500m² R65m Nov 2017 8.0%

Jeffreys Bay Centre - R50m Nov 2017 6.0%

R245m

WHITE RIVER

WHITE RIVER

LEBOWAKGOMO CENTRE

LEPHALALE CROSSING

LEPHALALE CROSSING

RETAIL - FUTURE DEVELOPMENTS AND EXTENSIONS

Name GLA (100%)Estimated

commencement date

Evaton Mall – Phase 2 15 000m² Feb 2018

Sterkspruit Plaza 3 000m² Jul 2017

Vryheid Plaza – Phase 2 2 000m² Jun 2017

PROPERTY DISPOSALS

Property name SectorBook value

R’000Net proceeds

R’000Exit yield Transfer date

Makhaza Shopping Centre Retail 110 400 115 681 8.8% Dec 2016

40 Brakfontein Century Park Logistics 88 300 90 000 * #

Van Riebeeck Mall Retail 77 497 74 000 9.3% ##

11 Naivasha Road Office 68 000 70 938 9.5% Nov 2016

7 Wilcox Road Prospecton Logistics 52 400 53 500 9.2% Nov 2016

Homeworld Centre Retail 47 000 50 500 9.1% Nov 2016

7 Old Pretoria Road Nelspruit Industrial 54 900 50 000 11.7% Dec 2016

Citrus Street Logistics 30 900 30 600 9.2% Nov 2016

Cranberry Street Logistics 28 700 28 800 9.2% Nov 2016

Albert Amon Road Meadowdale Industrial 26 000 27 500 8.8% #

Bofors Circle Park Epping Logistics 18 600 21 500 8.3% ##

93 Goodwood Road Pinetown Logistics 20 600 20 800 9.1% Dec 2016

Absa Towers Vanderbijlpark Office 15 000 13 000 14.0% ##

18 Suni Avenue Corporate Park Logistics 5 640 7 575 * Nov 2016

3 Arbeid Street Industrial 6 400 6 500 * ##

9 Linbro Village Linbro Park Industrial 4 300 4 400 9.0% Dec 2016

TOTAL 654 637 665 294

* Vacant.# Held for sale at 31 December 2016 and transferred after reporting period.## Held for sale at 31 December 2016. Transfer pending.

PROPERTY PORTFOLIO - PERFORMANCE

Arrears

Operating expenses

Vacancies

Renewals and letting

VACANCIES DECEMBER 2016

Total Logistics Retail Offices Industrial Other

18

15

12

9

6

3

0

6.0%5.0%

15.7%

6.2%

10.7%

3.7%

Perc

enta

ge (%

)

LEASE EXPIRY PROFILE

Year Based on contractual rental revenue

Jun 2017 15.0%

Jun 2018 19.5%

Jun 2019 20.9%

Jun 2020 13.7%

Jun 2021 10.9%

> Jun 2021 20.0%

CHALLENGES FOR 2017

Political uncertainty

Low growth environment

Rating downgrade

OUTLOOK

Logistics developments

Acquisitions

Foreign currency investments

Dividend growth

QUESTIONS AND ANSWERS

CHECKERS MAYVILLE