Redefine Properties Limited · JSE:RDF
Redefine Properties — FY2009 Earnings Presentation
45 slides from Redefine Properties's earnings presentation, 2009
Slide 1: Annual Results 2009
ANNUAL RESULTS 2009 > RepDerine PROPERTIES
Slide 2: The Making Of Redefine
THE MAKING OF > RepDerine PROPERTIES
Slide 3: Our History
OUR HISTORY 1999: Redefine was founded 2000: Listed on the JSE with total assets of R1,1-billion Market capitalisation of R400-million Asset composition 50% direct property, 50% listed securities, including Hyprop 2002: Increased stake in Hyprop to 18% 2003: Acquired 53% of Prima Property Trust 2006
Slide 4: The Merger
THE MERGER • ApexHi and Madison unitholders received: – 202 Redefine units for every 100 ApexHi A units – 246,8 Redefine units for every 100 ApexHi B units – 104 Redefine units for every 100 ApexHi C units – 90 Redefine units for every 100 Madison units • Resulted in an increase in the number of lin
Slide 5: Merger Rationale and Benefits
MERGER RATIONALE AND BENEFITS • Acquisition of R12,7-billion property portfolio from ApexHi (including Ambit) – rationalisation – economies of scale • Acquisition of Madison internalised the asset management function in accordance with international best practice • Enhance earnings • Attract greater
Slide 6: Redefine at a Glance
REDEFINE AT A GLANCE Property portfolio Number of properties: 403 Gross lettable area: 3,6-million m2 Valuation/m2: R5 000/m2 Total gross monthly rental: R193-million Value of properties: R18,2-billion Listed securities: R2,8-billion Other assets: R5,0-billion Total assets: R26,0-billion Borrowings:
Slide 7: Board of Directors
BOARD OF DIRECTORS Executive Directors Non-executive directors • Wolf Cesman (Joint CEO) • Dines Gihwala (Chairman) • Marc Wainer (Joint CEO) • Greg Heron • Brian Azizollahoff • Monica Khumalo • Janys Finn • Gerald Leissner • Mike Flax • Harish Mehta • David Rice • Bernard Nackan • Di Perton
Slide 8: Review of 2009 Results
‘ ~ ’ REVIEW OF 2009 RESULTS Sled > ReDeFIne PROPERTIES
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS • Distribution of 11,75 cents per linked unit for two months ended 31 August • Total distribution of 56,55 cents per linked unit for the year • Outperformed total returns of SA Listed Property Sector (SAPY) and All Share Index (ALSI) Redefine 13,9% SAPY 12,7% ALSI -6,8% • Total
Slide 10: Abridged Income Statement
ABRIDGED INCOME STATEMENT 2009 2008 Rm Rm Gross revenue 1 103 899 Property portfolio: 67% (2008:60%) 742 539 Listed securities: 28% (2008: 37%) 308 332 Property trading: 4% (2008: 3%) 39 24 Fee income: 1% (2008: 0%) 14 4 Property expenses (130) (106) Administration expenses (93) (60) Loss from assoc
Slide 11: Distributions
DISTRIBUTIONS Cents per Period linked unit Distribution 1 3 months to end Nov 2008 13,00 Distribution 2 3 months to end Feb 2009 13,80 Distribution 3 4 months to end Jun 2009 18,00 Distribution 4 2 months to end Aug 2009 11,75 Total 2009 56,55 Total 2008 56,63
Slide 12: Abridged Balance Sheet
ABRIDGED BALANCE SHEET 2009 2008 Rm Rm Direct and listed assets 21 229 10 124 Property portfolio: 87% 18 422 6 112 (2008: 60%)* Listed securities: 13% 2 807 4 012 (2008: 40%) Total assets 25 943 10 717 Capital and reserves 13 200 4 404 Interest-bearing liabilities 5 480 3 572 Gearing as % of value o
Slide 13: Top 20 Properties by Value (1-10)
TOP 20 PROPERTIES BY VALUE (1-10) Latest GLA valuation Valuation 2 2 Name Location Type m R000 R/m 1 Golden Walk Germiston Retail 45 014 610 000 13 551 2 Standard Bank Centre Cape Town Office 59 705 431 000 7 219 3 Park Meadows Bedfordview Retail 24 686 393 000 15 920 4 Cleary Park Port Elizabeth Re
Slide 14: Top 20 Properties by Value (11-20)
TOP 20 PROPERTIES BY VALUE (11-20) Latest GLA valuation Valuation 2 2 Name Location Type m R000 R/m 11 Maynard Mall Cape Town Retail 24 271 205 000 8 446 12 Trust Bank Johannesburg Office 27 930 195 000 6 982 13 Wingfield Park Jet Park Industrial 55 927 184 000 3 290 14 Pepkor Warehouse Isando Indus
Slide 15: Listed Securities Portfolio
LISTED SECURITIES PORTFOLIO Fund Number Total units % of Value Property fund type of units in issue % held portfolio R000 Hyprop PLS 55 323 970 166 113 169 33,3 83,5 2 345 183 Sycom PUT 6 530 673 205 107 471 3,2 4,2 117 552 CIREF PLC Other 21 069 405 73 324 751 28,7 4,6 129 777 Wichford PLC Other 14
Slide 16: Top 20 Tenants
TOP 20 TENANTS % of gross % of gross Tenant rental Tenant rental 1 Government 18 11 JDG Trading 1 2 Absa Bank 3 12 DHL 1 3 Edcon 3 13 Alexander Forbes 1 4 Standard Bank 3 14 Mr Price 1 5 Shoprite Checkers 3 15 Vodacom 1 6 Pepkor 2 16 Ellerine Furnishers 1 7 Pick 'n Pay 2 17 Foschini 1 8 Premier Food
Slide 17: Property Portfolio
PROPERTY PORTFOLIO 29% Single tenanted properties Multi tenanted properties 71% Gross lettable area Number Number of of Office Retail Industrial Total properties % Leases m2 m2 m2 m2 % Single tenanted 117 29 117 329 243 150 918 470 526 950 687 26 Multi tenanted 286 71 4 587 1 089 487 1 092 198 474 6
Slide 18: Sectoral Spread
SECTORAL SPREAD 12% 39% 45% 26% Office Retail Industrial 43% 35% Gross lettable area Gross monthly rental Average rate m² % R000 % R/m² Office 1 418 730 39 81 440 45 64,35 Retail 1 243 116 35 78 204 43 67,60 Industrial 945 204 26 22 775 12 25,96 Total 3 607 050 100 182 419 100 55,29
Slide 19: Geographical Spread
GEOGRAPHICAL SPREAD 3%1%1% 1%1% 3% 55% 3%3% 3% 3% 54% Gauteng 4% 4% Western Cape KwaZulu-Natal 14% 14% Mpumalanga North West Eastern Cape Limpopo Free State 16% 17% Northern Cape Lettable area Gross monthly rental
Slide 20: Tenant Profile by Let Area
TENANT PROFILE BY LET AREA 21% 33% 56% 32% 48% A-grade 9% B-grade C-grade 70% 11% 20% Office Retail Industrial m2 % m2 % m2 % A-grade 884 816 70 644 714 56 420 302 48 B-grade 117 678 9 129 368 11 174 435 20 C-grade 263 010 21 382 752 33 282 430 32 1 265 504 100 1 156 834 100 877 167 100
Slide 21: Tenant Profile by Monthly Rental
TENANT PROFILE BY MONTHLY RENTAL 18% 41% 33% 46% A-grade 11% B-grade C-grade 71% 50% 21% 9% Office Retail Industrial R000 % R000 % R000 % A-grade 57 454 71 38 411 50 10 481 46 B-grade 9 305 11 7 910 9 4 781 21 C-grade 14 681 18 31 883 41 7 513 33 81 440 100 78 204 100 22 775 100
Slide 22: Vacancies per Sector
VACANCIES PER SECTOR Lettable area Vacancy m2 m2 % Office 1 418 730 153 226 10,8 Retail 1 243 116 86 282 6,9 Industrial 945 204 68 037 7,2 3 607 050 307 545 8,5
Slide 23: Lease Expiry Profile
LEASE EXPIRY PROFILE 600 000 500 000 400 000 Office 300 000 Retail 200 000 Industrial 100 000 0 2010 2011 2012 2013 Beyond Office Retail Industrial Total Year to 31 August m2 % m2 % m2 % m2 % 2010 511 605 40 286 041 25 185 180 21 982 826 30 2011 237 056 19 217 587 19 141 100 16 595 743 18 2012 158 5
Slide 24: Borrowings
BORROWINGS R000 Fixed 4 649 Floating 651 Borrowings in JVs 160 Total 5 460 Borrowings as % of value of 26% properties and listed securities • Weighted average cost of borrowings 9,33% • 87,7% of debt is fixed • Average length of fixes 6 years
Slide 25: Unitholder Profile
UNITHOLDER PROFILE Beneficial unitholders holding in excess of 5% Number of units % Old Mutual 241 690 440 9,10 Investec 149 875 251 5,65 Stanlib 145 996 728 5,50 Total 537 562 419 20,25
Slide 26: Redefine Closing Prices
REDEFINE CLOSING PRICES 750 High: 741c Close: 729c 700 Open: 665c 650 600 550 Low: 531c 500 Sep 08 Oct 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09
Slide 27: Redefine vs PLS Index
REDEFINE VS PLS INDEX 110 105 100 95 Redefine 90 PLS Index 85 80 75 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09
Slide 28: Redefine vs SAPY
REDEFINE VS SAPY 110 105 100 95 Redefine 90 SAPY 85 80 75 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09
Slide 29: Redefine vs ALSI
REDEFINE VS ALSI 110 105 100 95 90 85 Redefine ALSI 80 75 70 65 60 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09
Slide 30: Liquidity
LIQUIDITY Volume Value traded Month Volume R000 % Sep 08 - Nov 08 82 765 584 489 830 9 Dec 08 - Feb 09 103 614 245 664 230 12 Mar 09 - May 09 120 473 163 798 606 13 Jun 09 - Jul 09 77 188 761 512 819 8 August 09 333 771 498 2 419 343 13 Total 717 813 251 4 884 828 Weighted average number of units tr
Slide 31: Fitch Rating
FITCH RATING • Redefine is one of the few listed South African property companies with a credit rating from an international rating company, Fitch. • Subsequent to the merger, Fitch has reviewed and affirmed Redefine’s: – National Long-term secured debt rating of ‘A(zaf)’ – National Long-term unsecu
Slide 32: Indices
INDICES • Global Property Research (GPR) 250 Index – Largest South African listed property company on the index • Mid Cap segment of the MSCI Global Standard Index – Upgraded from Morgan Stanley’s MSCI Global Small Cap Index In terms of the rules, entry into the ALSI40 Index can only take place once
Slide 33: Strategy
STRATEGY > ReDeFIne PROPERTIES
Slide 34: Strategy
STRATEGY • Grow income • Control expenditure • Maintain quality of properties • Manage debt • Strategic input at Hyprop, CIREF PLC and Wichford PLC • Yield enhancing acquisitions • Streamline portfolio by disposing of non performing assets • Acquire quality income enhancing properties • Investments
Slide 35: Strategy continued
STRATEGY continued… • Formally change name from Redefine Income Fund to Redefine Properties • Transfer all properties from subsidiary companies to Redefine Properties • Management and staff to create and adopt Redefine Properties culture and values • Introduce key employee share incentive scheme • R
Slide 36: Challenges
CHALLENGES • Global financial crisis • Corporate failures • Consumer spending contraction • Access to bank funding and increased bank margins • Containment of soaring energy costs • Currency volatility
Slide 37: Distribution Outlook
DISTRIBUTION OUTLOOK • Barring unforeseen circumstances, total distribution for the year ending 31 August 2010 will be: Between 68 cents per unit and 71 cents per unit, an increase of between 20% and 25% on the total distribution for 2009.
Slide 38: Thanks
THANKS • The Merger – Java Capital – corporate advisors – All other professionals and advisors • Directors of Redefine, ApexHi and Madison – who retired during the year • Janys Finn (FD), the accounting team, PKF Auditors and Broll accounting who worked tirelessly to produce a complicated set of fin
Slide 39: Forthcoming Attractions
FORTHCOMING ATTRACTIONS “3 “A > ReDeFIne PROPERTIES
Slide 40: Redefine International
REDEFINE INTERNATIONAL Redefine Properties 50-55% CIREF PLC (AIM listed) Inward Redefine to become Listing International Redefine International JSE Listed (LSE Listed) 75-80% 22% Redefine Direct Wichford Other International properties PLC Manco 100% Wichford Manco
Slide 41: Redefine International: CIREF PLC
REDEFINE INTERNATIONAL • CIREF PLC
Slide 42: Redefine International: Wichford PLC
REDEFINE INTERNATIONAL • Wichford PLC
Slide 43: Redefine International: Watch This Space
REDEFINE INTERNATIONAL WATCH THIS SPACE
Slide 44: The End
THE END > ReDeFIne PROPERTIES
Slide 45: Or Is It Just the Beginning?
OR IS IT JUST THE BEGINNING? “3 A > ReDeFIne PROPERTIES