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Results presentation – FY2014 interims September 2013.

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Presentation on theme: "Results presentation – FY2014 interims September 2013."— Presentation transcript:

1 Results presentation – FY2014 interims September 2013

2 Overview Acquisitions Financial review Operational review Appendix

3 3 Highlights Interim distribution of 50.46 cpu – 7.7% increase on prior year R1.6 billion of concluded and announced acquisitions Capital structure converted to all-equity and REIT status obtained – effective 1 April 2013 Gearing remains low at 10.1% but will increase to 31.0% post announced acquisitions R500m term debt facility put in place – evergreen structure with syndicate of banks Strong underlying property fundamentals – vacancy low at 2.8% 32 800 m 2 of industrial space let and a further 28 000m 2 committed

4 4 Number of Properties52 Market CapitalisationR5.0 billion Asset ValueR4.4 billion GLA590,658 m 2 Vacancies2.8% Gearing10.1% NAV per UnitR13.02 Unit PriceR15.65 Premium to NAV20.2% Fund snapshot at 30 September 2013

5 5 Comparative forward yields analysis Source: I Net Bridge as at 15 November 2013

6 6 Forward yield vs. price / NAV

7 Overview Acquisitions Financial review Operational review Appendix

8 8 Asset growth

9 9 Acquisition summary Property nameSectorGLA (m 2 )Cost (R’m)Transfer date SA LadderIndustrial25 00075April 2013 5 Bond StreetOffice5 870118May 2013 Minolta BellvilleOffice2 16625May 2013 Minolta HighveldIndustrial2 95536May 2013 Total completed acquisitions35 991254 Big box retail portfolioRetail38 475207October 2013 Bigen AfricaOffice5 545125October 2013 Martin & MartinIndustrial19 97289December 2013 KhayelitshaRetail2 91132February 2014 RPP PortfolioOffice / Industrial35 206572March 2014 Nicol MainOffice11 863298Various - 2014 Total announced acquisitions113 9721 323 Investment in Investec Australia Property FundListed Fund236October 2013 Total149 9631 813

10 10 Disposal summary Property nameSectorGLA (m 2 )Cost (R’m)Transfer date MonsantoIndustrial9 81928.6April 2013 SABB MayvilleIndustrial4 00312.0September 2013 Total disposals13 82240.6 Total profit on disposal of R10.3m No CGT under new REIT legislation – effective 1 April 2013

11 Overview Acquisitions Financial review Operational review Appendix

12 12 Simplified income statement Sep 13 R’m Sep 12 R’m +/- % Net Property Income (excl. straight lining)189.0101.985.5% Operating expenses(2.9)(1.7)(42.8%) Asset Management Fee(12.6)(6.6)(47.6%) Net finance costs(13.4)(14.0)4.3% Taxation0.0(0.0)0.0% Distributable profit160.179.6101.0% Distribution per unit (cents)50.4646.837.7% Distribution equates to net property income less operating expenses and funding costs Performance underpinned by 7.1% growth in base portfolio net income

13 13 Distribution reconciliation Sep 13Sep 12 Net property income 210.0 117.1 Less: straight-line rental revenue adjustment (21.0) (15.2) Other operating costs (15.5) (8.3) Finance costs (18.5) (20.0) Finance income 5.1 6.1 Taxation (excluding capital gains tax and deferred tax) 0.0 (0.0) Distributable earnings 160.1 79.6 Shares in issue (m)317.22170.0 Distribution per share50.4646.83

14 14 Key ratios Sep 13Sep 12 Income statement Net cost to income ratio21.8%16.5% Gross cost to income ratio34.0%24.7% Arrears % of total collectibles0.4%0.2% Balance sheet Gearing10.1%19.5% NAV per share (cents)1,301.61,085.8 Shares in issue317 220 000170 000 000

15 15 Cash flow extracts Sep 13 R’m Sep 12 R’m Cash generated from operations197.589.4 Net finance costs paid(14.0)(4.3) Distributions paid to unitholders(164.2)(83.8) Net cash flow from operating activities19.21.3 Net cash flow from investing activities(221.5)(229.4) Net cash flow from financing activities(0.5)319.0 Net increase / (decrease) in cash(202.7)90.9 Cash at the beginning of the year398.74.6 Cash at the end of the period196.095.5 Underlying business strongly cash generative, with arrears tightly controlled Investing activities include R50.4m inflow from disposal of 2 properties and capex of R14.0m Cash at period end used to partly fund announced acquisitions

16 16 Balance sheet Low gearing – 10.7% Significant headroom to pursue attractive acquisitions, quickly New SPV structure in place to access term debt market Syndicate of banks include Nedbank, Standard Bank and Investec Initial R500m tranche Hedging policy remains conservative in volatile interest rate environment At least 75% of debt is hedged 91% of committed hedges are hedging 5 year interest rate risk All-in cost of funding of 8.3% Reliance on long-term vs. short term funding

17 17 Debt maturity profile R million Weighted average debt expiry – 3.4 years No refinancing until April 2016

18 18 Funding profile Debt at 30 September 2013ExpiryRateAmount (R'm) DMTN - Tranche 1April 2015JIBAR + 140 bp134 DMTN - Tranche 2April 2016JIBAR + 155 bp40 DMTN - Tranche 3April 2017JIBAR + 165 bp50 DMTN - Tranche 6April 2017Fixed @ 8.8%226 Total DMTN 450 Facilities available Investec bridge facility12 months noticeJIBAR + 225 bp500 Standard bank term debt facilityOctober 2016JIBAR + 155 bp250 Nedbank term debt facilityOctober 2018JIBAR + 170 bp250 DMTN Programmen/avarious 3,000 Total facilities 4,000 Drawn down at 30 September 2013 450 Drawn down post 30 September 2013 to fund acquisitions 480 Available facilities 3,070

19 Overview Acquisitions Financial review Operational review Appendix

20 20 Portfolio map

21 21 Leasing activity ¹ Net GLA (total acquired less vacant space taken on). ² New leases account for 31 505 m2 of industrial and 2 188 m2 of retail space OfficeIndustrialRetailTotal Area (m²) Tenanted at 31 March 2013 85,243 285,878 180,415 551,536 Sold (13,822) Acquired¹ 8,036 27,955 35,991 Expiries and cancellations (32,826)(2,818)(35,644) New leases/renewals² 32,801 3,544 36,344 Tenanted at 30 September 2013 93,279 299,986 181,111 574,405 Expiry rent (R/(m²) New rent (R/(m²) Average escalation GLA Expiries and cancellations GLA New leases/renewals Office Industrial37.6536.489.1% 32,826 32,801 Retail134.65129.528.1% 2,818 3,544 Total45.3245.558.5% 35,644 36,344 32 800 m2 industrial space let Strong escalations achieved Reversions on anomalous short- term lets (14%), but +30% positive reversions achieved on remainder

22 22 Vacancies (% GLA) GLA (m 2 )

23 23 Forward lease expiry profile

24 24 Portfolio composition Revenue March 2013 September 2013 GLAAsset Value Offices Industrial Retail

25 25 Geographic spread Geographic spreadby GLAGeographic spreadby revenue

26 26 Tenant spread Single vs Multi-Tenanted by RevenueTenant profile (based on Revenue)

27 Overview Acquisitions Financial review Operational review Appendix

28 28 Completed acquisitions SA Ladder5 Bond Street Physical address 32 Potgieter Street, Alrode GLA 25,000 Tenancy Single WALE (by GLA) 10.2 Cost of acquisition R75.0m Major tenants SA Ladder Physical address 5 Bond Street, Midrand GLA 5,870 Tenancy Single WALE (by GLA) 9.6 Cost of acquisition R118.4m Major tenants Investec

29 29 Completed acquisitions Minolta BellvilleMinolta Highveld Physical address 4 Mike Pienaar Boulevard, Bellville, Cape Town GLA 2,166 Tenancy Single WALE (by GLA) 3.5 Cost of acquisition R24.6m Major tenants Minolta Physical address 14A Esdoring Nook, Techno Park, Highveld, Pretoria GLA 2,955 Tenancy Single WALE (by GLA) 8.5 Cost of acquisition R36.2m Major tenants Minolta

30 30 Announced acquisitions Cash & Carry SilverlakesZenth East Rand Physical address Bendeman Boulevard, Silverlakes, Pretoria GLA 12,492 Tenancy Multi WALE (by GLA) 6.7 years Cost of acquisition R76.2m Major tenants Devland Cash & Carry Physical address Cnr North Rand and Herman Pieters Road, Boksburg GLA 14,144 Tenancy Single WALE (by GLA) 8.7 years Cost of acquisition R78.0m Major tenants Zenth Cash & Carry

31 31 Announced acquisitions Bigen AfricaMartin & Martin Physical address 1617 Allan Cormack Street, Pretoria GLA 5,545 Tenancy Single WALE (by GLA) 10 years Cost of acquisition R125.1m Major tenants Bigen Physical address 9 Quality Street, Isando, Johannesburg GLA 19,972 Tenancy Single WALE (by GLA) 10 years Cost of acquisition R88.5m Major tenants Martin & Martin

32 32 Announced acquisitions KhayelitshaThe Braes Physical address Sulani Drive, Khayelitsha, Cape Town GLA 2,911 Tenancy Multi WALE (by GLA) 4.5 years Cost of acquisition R31.9m Major tenants Pick ‘n Pay Physical address Cnr William Nicol & Bryanston Drive, Bryanston GLA 4,372 Tenancy Multi WALE (by GLA) 1.9 years Cost of acquisition R88.2m Major tenants Econet Wireless, Stratford Properties

33 33 Announced acquisitions Wellness CentreGreenhill Village Physical address Cnr Culross & Main Road, Bryanston GLA 1,444 Tenancy Multi WALE (by GLA) 1.7 years Cost of acquisition R29.2m Major tenants Reonet Utilities Physical address Lynwood Road, Lynwood, Pretoria GLA 4,591 Tenancy Multi WALE (by GLA) 2.5 years Cost of acquisition R95.9m Major tenants Online Intelligence & ACT Audit Solutions

34 34 Announced acquisitions DancloveVinebridge Physical address 200 Constantia Drive, Constantia Kloof, Roodepoort GLA 8,011 Tenancy Single WALE (by GLA) 5.4 years Cost of acquisition R142.0m Major tenants Clover Physical address 99 Jip de Jager Drive, Tyger Valley, Cape Town GLA 2,297 Tenancy Multi WALE (by GLA) 1.8 years Cost of acquisition R38.8m Major tenants Pepkor, Reckitt Benckiser SA

35 35 Announced acquisitions Barinors VineyardsLinbro Park Physical address 99 Jip de Jager Drive, Tyger Valley, Cape Town GLA 4,941 Tenancy Multi WALE (by GLA) 1.9 years Cost of acquisition R96.3m Major tenants Pioneer Foods, NHBRC Physical address 10 Starfield Drive, Frankenwald, Gauteng GLA 3,246 Tenancy Multi WALE (by GLA) 1.7 years Cost of acquisition R30.2m Major tenants Tirhani Auctioneers

36 36 Announced acquisitions BeechwoodNicol Main Physical address 33 Bearing Crescent, Silverton, Pretoria GLA 5,677 Tenancy Single WALE (by GLA) 5 years Cost of acquisition R50.8m Major tenants Silver Star Auto Body Repairs Physical address 6 Bruton Road, Bryanston, Johannesburg GLA 11,863 Tenancy Multi WALE (by GLA) 5.1 years Cost of acquisition R298.4m Major tenants YUM, Continental Outdoor Media

37 37 Disclaimer The information contained herein is for information purposes only and readers should not rely on such information as advice in relation to a specific issue without taking financial, banking, investment or professional advice. Although information has been obtained from sources believed to be reliable, Investec Property Fund Limited (Reg. No.2008/011366/06) and or any affiliates (collectively “Investec Property”), do not warrant its completeness or accuracy. Opinions and estimates represent Investec’s view at the time of going to print and are subject to change without notice. Past performance is not indicative of future returns. The information contained herein does not constitute an offer or solicitation of investment, banking or financial services by Investec Property. Neither Investec Property nor Investec Bank Limited shall be held liable in respect of any claim, damages or loss of whatever nature arising in connection with such information. Investec Property accepts no liability for any loss or damage of whatsoever nature including but not limited to loss of profits, goodwill or any type of financial or other pecuniary or direct or special indirect or consequential loss however arising, whether in negligence or for breach of contract or other duty as a result of use of or reliance on the information contained in this document whether authorised or not. This document/publication may not be reproduced in whole or in part or copies distributed without the prior written consent of Investec Property.

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