Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — FY2020 Earnings Presentation
156 slides from Vukile Property Fund's earnings presentation, Jun 30, 2020
Slide 1: FY2020 Annual Results Presentation
FY2020 ANNUAL RESULTS PRESENTATION 30 June 2020
Slide 2: Agenda
RESULTS PRESENTATION AGENDA INTRODUCTION AND COVID-19 RESPONSE Laurence Rapp FINANCIAL PERFORMANCE, DEBT AND TREASURY Laurence Cohen SOUTHERN AFRICAN RETAIL PORTFOLIO OVERVIEW AND TRADING UPDATE Itumeleng Mothibeli CASTELLANA PROPERTIES OVERVIEW AND TRADING UPDATE Alfonso Brunet STRATEGIC PLANS AND
Slide 3: Introduction and COVID-19 Response
INTRODUCTION AND COVID-19 RESPONSE Laurence Rapp
Slide 4: Profile: Who We Are
INTRODUCTION / RESULTS PRESENTATION PROFILE WHO WE ARE • High quality, low risk, Retail REIT operating in Southern Africa and Spain • Significant geographic diversification വ 52% of assets located in Spain with 43% of profits generated from Castellana • Strong operational focus with a core competenc
Slide 5: Group Overview – Consolidated Property Assets of R37.8bn
INTRODUCTION / RESULTS PRESENTATION GROUP OVERVIEW – CONSOLIDATED PROPERTY ASSETS OF R37.8BN WELL DIVERSIFIED EXPOSURE ACROSS MACRO ECONOMIC DRIVERS Spain Southern Africa United Kingdom R19.8bn R16.6bn R1.5bn 52% of assets 44% of assets 4% of assets Direct property portfolio R16bn Fairvest R338m To
Slide 6: Highlights
INTRODUCTION / RESULTS PRESENTATION HIGHLIGHTS SOLID OPERATING PLATFORM PROVIDES THE BASE OFF WHICH TO TACKLE THE COVID-19 CRISIS • 3.2% increase in distributable earnings per share • Impressive retail performance in Spain വ Castellana dividend growth of 9.6% വ Vacancies contained at 1.8% വ Increase
Slide 7: COVID-19 Response
INTRODUCTION / RESULTS PRESENTATION COVID-19 RESPONSE OVERARCHING PERSPECTIVES AND APPROACH • The COVID-19 pandemic has created a global humanitarian crisis • Places the health and safety of our stakeholders as our number one priority വ Appointed leading virologist Professor Barry Schoub as a Specia
Slide 8: Changes in the Retail Landscape
INTRODUCTION / RESULTS PRESENTATION COVID-19 RESPONSE CHANGES IN THE RETAIL LANDSCAPE • Much has been written about the retail apocalypse even before the COVID-19 crisis വ Lockdowns and ensuing recessions have heightened the doomsday predictions about the end of shopping malls and retail as we know
Slide 9: Stepping Off the Treadmill
INTRODUCTION / RESULTS PRESENTATION COVID-19 RESPONSE STEPPING OFF THE TREADMILL • In the words of Winston Churchill, ‘NEVER WASTE A GOOD CRISIS’ • Opportunity to critically evaluate our industry and business model • There has been an unhealthy focus on short termism and growth in dividends വ Led to
Slide 10: Financial Performance, Debt and Treasury
FINANCIAL PERFORMANCE, DEBT AND TREASURY Laurence Cohen
Slide 11: Distributable Earnings
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION DISTRIBUTABLE EARNINGS (RM) 16 YEAR TREND OF GROWTH IN DISTRIBUTABLE EARNINGS 1 791 1 690 1 307 1 118 996 774 694 556 439 408 323 290 265 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 11
Slide 12: Distributable Earnings Bridge
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION DISTRIBUTABLE EARNINGS BRIDGE (RM) SIGNIFICANT GROWTH IN DISTRIBUTABLE EARNINGS FROM SPANISH PORTFOLIO 232 ( 33 ) +3.2% ( 39 ) ( 22 ) 107 (per share) ( 124 ) (2) 1 690 1 791 31 March 2019 Net property Income from Income from Corporate c
Slide 13: Cash Flow Bridge
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION CASH FLOW BRIDGE – (RM) DIVIDENDS PAID COMFORTABLY COVERED BY CASH GENERATED FROM OPERATIONS 279 101 696 2 655 2 418 ( 2 488 ) ( 1 867 ) ( 1 047 ) 1 559 1 136 ( 325 ) Balance at 1 Cash generated Borrowings and Issue of shares Dividends
Slide 14: Property Valuations
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION PROPERTY VALUATIONS CONSISTENT APPLICATION OF VALUATION METHODOLOGY • R15.6bn as at 31 March 2020 • -2.2% from 31 March 2019 SOUTHERN • 100% of portfolio valued internally every six months AFRICAN • 50% of portfolio valued externally ev
Slide 15: NAV Bridge
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION NAV BRIDGE NAV PER SHARE OF R18.34 1.11 2.58 2.93 ( 2.73 ) ( 1.14 ) ( 1.91 ) Includes No ( 1.35 ) ( 0.54 ) acquisition of corresponding ( 0.86 ) Puerta Europa increase in (Spain) and SA and Spain Atlantic Leaf, assets Mdantsane Fairvest
Slide 16: Composition of Group Balance Sheet
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION COMPOSITION OF GROUP BALANCE SHEET MATCHING DEBT WITH PROPERTY ASSETS - BY GEOGRAPHY AND CURRENCY NON-RECOURSE TO VUKILE Castellana Vukile Company EUR asset (20.7bn) to debt Total Company asset (R27.7bn) (R9.7bn) Ratio 2.1x to debt (R8.
Slide 17: Segmental Loan-to-Value and Interest Cover Ratios
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION SEGMENTAL LOAN-TO-VALUE AND INTEREST COVER RATIOS COMFORTABLE HEADROOM ACROSS ALL METRICS FOR BOTH VUKILE AND CASTELLANA • Strong cash flow compared with net interest cost with group interest cover ratio of 5.8 times • Stress testing in
Slide 18: Key Debt and Hedging Metrics
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION KEY DEBT AND HEDGING METRICS STRONG LIQUIDITY POSITION • Undrawn facilities of R1.1bn (Vukile R553m and Castellana €29m) • Subsequent to year-end, agreements concluded to increase undrawn facilities to R1.6bn (LTV neutral) Internal poli
Slide 19: Group Loan-to-Value Bridge
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION GROUP LOAN-TO-VALUE BRIDGE 2.5% OF LTV INCREASE DUE TO CURRENCY MOVEMENTS c. 19% devaluation of ZAR against EUR and GBP El Corte Ingles & Puerta Downward Europa transactions and revaluation of acquisition of Westbrook direct underwriter
Slide 20: Group Loan-to-Value Sensitivity Analysis
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION GROUP LOAN-TO-VALUE SENSITIVITY ANALYSIS POTENTIAL LEVERS TO REDUCE LOAN-TO-VALUE LOAN-TO-VALUE FORECAST TO REDUCE TO SENSITIVITY ANALYSIS Retain 43.9% POST SALE OF ATLANTIC LEAF earnings to repay debt (R1.0bn) €100m Share price and Cur
Slide 21: Analysis of Group Loan Expiry Profile
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION ANALYSIS OF GROUP LOAN EXPIRY PROFILE LOW RISK EXPIRY PROFILE • 77% of all debt expiring in FY2021 extended • No maturity risk in respect of corporate bonds in FY2021 and FY2022 • Sufficient undrawn facilities to repay DCM maturities in
Slide 22: Debt Expiring in FY2021
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION DEBT EXPIRING IN FY2021 77% OF ALL DEBT EXPIRING IN FY2021 HAS BEEN REFINANCED Maturity Date Amount Drawn Comments '000 Nedbank ZAR term loan 7 April 2020 R100 000 Repaid Absa ZAR term loan 30 Jun 2020 R100 000 Extended for 3 years Corp
Slide 23: Cross Currency Interest Rate Swap Exposure
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION CROSS CURRENCY INTEREST RATE SWAP EXPOSURE LIMITED USE OF CROSS CURRENCY INTEREST RATE SWAPS • Cross Currency Interest Rate Swaps (“CCIRS”) have the ability to both hedge foreign exchange fluctuations on Vukile’s earnings and asset expo
Slide 24: Debt and Balance Sheet Strategy
FINANCIAL PERFORMANCE, DEBT AND TREASURY / RESULTS PRESENTATION DEBT AND BALANCE SHEET STRATEGY A PROACTIVE APPROACH TO MANAGING RISK • Used the crisis as an opportunity to re-evaluate the balance sheet and capital structure • Engaged extensively with all of our funders • Increased the quantum of un
Slide 25: Southern African Retail Portfolio Overview and Trading Update
SOUTHERN AFRICAN RETAIL PORTFOLIO OVERVIEW AND TRADING UPDATE Itumeleng Mothibeli
Slide 26: Toughest Operational Environment in a Decade: Pre-COVID-19
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION TOUGHEST OPERATIONAL ENVIRONMENT IN A DECADE: PRE- COVID-19 • Low business and consumer confidence • Employment growth was (0.3%) as at Dec 2019 • Muted real wage growth of 0.4% as at Q42019 THE MACRO • Entered technical recession at the
Slide 27: Direct Southern African Retail Portfolio
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION DIRECT SOUTHERN AFRICAN RETAIL PORTFOLIO KEY RETAIL PORTFOLIO METRICS Like-for-like net Vacancies Reversions Base Contractual PERFORMANCE income growth • 2.9% GLA rentals escalations OVERVIEW 6.0% • 2.9% Rent +1.1% R141.43/m² 6.9% Rent-t
Slide 28: Tenant Exposure
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION TENANT EXPOSURE WELL DIVERSIFIED BLUE CHIP TENANT MIX 32% OF RENT FROM ESSENTIAL SERVICES 56% OF RENT FROM TOP 20 TENANTS Pepkor - 8% Grocery/ Supermarket - 18% Pick n Pay - 6% Shoprite - 6% Banking - 8% Foschini - 5% Pharmacies - 3% Mr
Slide 29: Portfolio Composition
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION PORTFOLIO COMPOSITION 81% OF PORTFOLIO IN DEFENSIVE RURAL, TOWNSHIP AND VALUE CENTRE ASSETS Township & Rural Value centres Urban Commuter Value R6.3b R4.0b R1.6b R2.7b Number of properties 16 16 4 10 1 3 1 1% 4% 1% GLA 364 615m² 259 273m
Slide 30: COVID-19 Update
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE ENSURING THE SAFETY AND WELLBEING OF OUR TENANTS AND CUSTOMERS RISK ASSESSMENT FRAMEWORK • Integrated framework to manage and mitigate the effects of COVID-19 • Input from Professor Barry Schoub, Vukile’s service provider
Slide 31: COVID-19 Update: Reopening Strategy
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE REOPENING STRATEGY 31
Slide 32: COVID-19 Update: Tenant Relief and Relationship Management
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE TENANT RELIEF AND RELATIONSHIP MANAGEMENT LEADERSHIP PROCESS • Responsible corporate leadership • Part of the Property Industry Group to facilitate discussions with tenants and offer • Co-operative approach solutions for
Slide 33: COVID-19 Update: Tenant Relief and Collections
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE TENANT RELIEF AND COLLECTIONS Exposure Quantum of relief Collections % of % of annual annual April May June billing * R’m billing * 2020 2020 2020 # Total 100 108 5.0 72% 73% 65% • Essential services 35 5 0.7 86% 90% 79%
Slide 34: COVID-19 Update: Turnover and Footfall
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE TURNOVER AND FOOTFALL APRIL 2020 MAY 2020 The turnover of the essential services The turnover of the Major National tenants tenants increased by 8% in township, increased by 10% in township, commuter, commuter, rural and
Slide 35: Trading Densities – Total Retail Portfolio
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE TRADING DENSITIES – TENANTS TRADING DURING LOCKDOWN TOTAL RETAIL PORTFOLIO 120% 128% 108% 119% 109% 105% 112% 112% 108% 106% 110% 108% 104% 92% 100% 99% 85% 34% Essential Grocery/ Supermarket Food Speciality Pharmacies No
Slide 36: Trading Densities – Township, Commuter and Rural
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION COVID-19 UPDATE TRADING DENSITIES – TENANTS TRADING DURING LOCKDOWN TOWNSHIP AND COMMUTER RURAL 106% 104% 101% 126% 121% 123% 106% 110% 115% 110% 120% 111% 109% 98% 119% 104% 119% 109% 102% 101% 93% 102% 93% 91% 102% 116% 98% 113% 83% 96
Slide 37: Footfall – Total, Rural and Urban
1/Mar 1/Mar 6/Mar 6/Mar TOTAL RURAL 11/Mar 11/Mar 93% 97% 16/Mar 16/Mar Pre lockdown Pre lockdown 21/Mar 21/Mar 26/Mar 26/Mar 31/Mar 31/Mar COVID-19 UPDATE 5/Apr 5/Apr 10/Apr 10/Apr 43% 32% 15/Apr 15/Apr Level 5 lockdown Level 5 lockdown 20/Apr 20/Apr 2019 2019 25/Apr 25/Apr 30/Apr 30/Apr 5/May 5/Ma
Slide 38: Innovation for Future Fitness
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION INNOVATION FOR FUTURE FITNESS CREATION OF AN INTEGRATED CUSTOMER CENTRIC ASSET MANAGEMENT PLATFORM Concluded 31% investment in geolocation proptech business • Provide operational insights on geographical shopper behaviour patterns • Appl
Slide 39: Short-Term Focus Areas
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION SHORT-TERM FOCUS AREAS CONTINUED TIGHT OPERATIONAL FOCUS • Strengthen relationships coming out of COVID-19 with internalised full strength leasing team TENANT • Execute a focused renewal strategy in the next six months without changing k
Slide 40: CSI Lockdown Relief
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION CSI LOCKDOWN RELIEF R5M COMMITTED TO MAKING A DIFFERENCE IN OUR COMMUNITIES 40
Slide 41: United We Shall Stand Campaign
SOUTH AFRICAN RETAIL PORTFOLIO OVERVIEW / RESULTS PRESENTATION UNITED WE SHALL STAND CAMPAIGN APPROACH The #UWSS campaign is centred around the feeling of togetherness, and helping our fellow South Africans to prosper again after the lockdown. Focusing on keeping our shoppers safe, the needs within
Slide 42: Castellana Properties Overview and Trading Update
CASTELLANA PROPERTIES OVERVIEW AND TRADING UPDATE Alfonso Brunet
Slide 43: Direct Spanish Portfolio
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION DIRECT SPANISH PORTFOLIO KEY PORTFOLIO METRICS Portfolio Value Total number GLA Retail by value KEY FACTS of assets €1 003b (-2.38%) (i) 18 373 419m² 96.7%(ii) Average asset value Average Average exit Total number of VALUATIONS discount rate capi
Slide 44: COVID-19 in Spain
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION COVID-19 IN SPAIN BACK TO “NEW” NORMALITY Galicia Basque Country • Cases: 13,708 • Cases: 9,174 • Deaths: 1,555 • Deaths: 619 Cataluña Total Cases (1): • Cases:60,645 • Deaths: 5,666 246k Active cases: Castilla León 68k • Cases: 19,499 • Deaths:
Slide 45: Spanish and European Response to Protect the Economy
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION ROBUST RESPONSE TO PROTECT AND STIMULATE THE ECONOMY BY SPANISH AND EUROPEAN AUTHORITIES SPANISH GOVERNMENT RESPONSE EUROPEAN RESPONSE HEALTH ECONOMIC & LABOR TAX ECB (EUROZONE) EUROPEAN UNION • State of Alarm and national • €100bn Package of Gov
Slide 46: Asymmetric De-escalation
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION ASYMMETRIC DE-ESCALATION A GEOGRAPHICALLY DIVERSIFIED PORTFOLIO ALLOWED CASTELLANA PROPERTIES TO OPEN 12 OUT OF 16 CENTRES BY MAY 25TH 2nd MAY 11th MAY 25th MAY 8th JUNE 22nd JUNE 2020 2020 2020 2020 2020 “New Phase 0 Phase 1 Phase 2 Phase 3 Norm
Slide 47: Impact on Spanish Economy
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION IMPACT ON SPANISH ECONOMY SHARP CONTRACTION IN LINE WITH REST OF EUROPE WITH STRONG REBOUND EXPECTED IN 2021 • Spain’s GDP is forecast to contract by up to 9.7% in 2020. Market consensus points to a strong rebound of the Spanish economy in 2021 •
Slide 48: Retail Tenant Exposure
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION RETAIL TENANT EXPOSURE 93% INTERNATIONAL AND NATIONAL TENANT PROFILE PROVIDING PROTECTION AGAINST THE EFFECTS OF THE PANDEMIC TOP 10 TENANT GROUPS BY RENT TENANT GROUP PROFILE - BY CONTRACTUAL RENT INDITEX 11.2% Local tenants ZARA 3.7% BERSHKA 1.
Slide 49: COVID-19 Response Action Plan
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION COVID-19 RESPONSE ACTION PLAN HIGHLIGHTS OVER PAST 3 MONTHS – APRIL TO JUNE 2020 • Extensive scenario modelling undertaken to understand the impacts of the business over the next 12 – 24 months confirmed the business to be well capitalised and st
Slide 50: Collections
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION COLLECTIONS JANUARY TO JUNE 2020 • All service charge recoveries have been fully invoiced and mostly collected for April, May and June 2020 • Since reopening, invoicing has increased with collections holding stable • May invoiced amount excludes
Slide 51: Footfall – Performance in 2020
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION FOOTFALL – PERFORMANCE IN 2020 PORTFOLIO SHOWING GOOD RECOVERY POST COVID-19 CASTELLANA PROPERTIES PORTFOLIO FOOTFALL JAN-JUN 2020 (1) TOTAL RETAIL TRAFFIC INDEX PERFORMACE SINCE THE REOPENING (2) Week 1 Week 2 Week 3 JAN FEB MAR APR MAY JUN (4)
Slide 52: Retailer Soundings
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION RETAILER SOUNDINGS SALES COULD DROP UP TO C. 35% FOR THE FULL YEAR 2020 BUT EXPECTED TO RECOVER EARLY 2021 • Feedback from tenants reflects a gradual recovery of sales towards SALES (REAL VS. BUDGET) - END OF YEAR 2020 RENT BY TENANT CATEGORY (%)
Slide 53: Reopening Strategy: 3 Main Objectives
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REOPENING STRATEGY CASTELLANA PROPERTIES IMPLEMENTED MORE THAN 200 HEALTH AND HYGIENE MEASURES IN EACH SHOPPING CENTRE TO KEEP STAFF AND CUSTOMERS SAFE 3 MAIN OBJECTIVES Vehicle accesses SC Management Measures are Reception Desk & Parking office
Slide 54: Reopening Strategy: 360º
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REOPENING STRATEGY 360º REOPENING STRATEGY FOR A SAFE AND WARM WELCOME TO OUR RETAILERS AND CUSTOMERS INDOOR GIFTS TO SOCIAL MEDIA SIGNAGE CUSTOMERS • During this time, the • The mall provides • We have delivered Centres been securing customers a
Slide 55: Reopening Strategy: Customer Welcome
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REOPENING STRATEGY GREAT WELCOME BY CUSTOMERS, COMPLEMENTING THE MEASURES IMPLEMENTED AND EAGERLY WANTING TO RETURN TO THEIR CENTRES Finally, Los Arcos, my gosh. I know you Thanks to you for remember us, we’ve Finally open!!! I went this afternoo
Slide 56: Loan to Value (LTV) Scenario Stress Test
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION LOAN TO VALUE (LTV) SCENARIO STRESS TEST • Castellana (in conversations with various market role-players) expects a maximum increase in valuation discount rates of 25-50 basis points in the short to medium term • In order to stress-test the balan
Slide 57: Real Estate Market in Spain
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REAL ESTATE MARKET IN SPAIN YIELDS ALREADY CLOSE TO HISTORIC HIGHS YIELD SPREADS AT HISTORICALLY ATTRACTIVE LEVELS ATTRACTIVE RELATIVE PRICING VERSUS OTHER CORE REAL ESTATE SECTORS • Significant spread of 590bps between shopping centre yields and
Slide 58: Real Estate Market Spain: Occupancy Cost Ratios
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REAL ESTATE MARKET SPAIN SPANISH OCR SIGNIFICANTLY BELOW EUROPEAN AVERAGES 19.0% 17.3% 17.1% 18.0% 17.0% 15.8% 15.8% 15.7% 15.6% 15.5% 15.5% 15.5% 15.4% 15.4% Spanish Shopping Centre Occupancy 15.2% Cost Ratios were well below the 16.0% rest of E
Slide 59: Real Estate Market Spain: Rents
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION REAL ESTATE MARKET SPAIN RENTS REMAIN BELOW PRE-FINANCIAL CRISIS LEVELS RETAIL RENTAL VALUE GROWTH INDEX, REBASED TO 100 Spanish rental levels are still well Spain’s below pre-crisis levels Pre-Financial Crisis rent levels Castellana Properties p
Slide 60: Key Focus Areas Going Forward
CASTELLANA PROPERTIES OVERVIEW / RESULTS PRESENTATION KEY FOCUS AREAS GOING FORWARD • Business management – keep focusing closely on Castellana’s income and balance sheet stability • Tenant Relationships - continuing to nurture our tenants to build a different relationship OPERATIONAL - to become a
Slide 61: Strategic Plans and Prospects
STRATEGIC PLANS AND PROSPECTS Laurence Rapp
Slide 62: Update on Transactions and Strategic Investments
STRATEGIC PLANS AND PROSPECTS / RESULTS PRESENTATION UPDATE ON TRANSACTIONS AND STRATEGIC INVESTMENTS POTENTIAL SALE OF ATLANIC LEAF PROPERTIES • Proposed transaction for the delisting of ALP by way of a scheme of arrangement announced on 25 May 2020 • In line with strategic intent to exit ALP, Vuki
Slide 63: Strategic Focus Areas
STRATEGIC PLANS AND PROSPECTS / RESULTS PRESENTATION STRATEGIC FOCUS AREAS • Continued drive to embed a singular culture within Vukile and Castellana OUR • Ongoing investment in health and wellness programmes for the team covering both physical and mental wellbeing PEOPLE • Very pleasing results fro
Slide 64: Prospects
STRATEGIC PLANS AND PROSPECTS / RESULTS PRESENTATION PROSPECTS WELL POSITIONED FOR LONG TERM SUSTAINABILITY • The Vukile business remains in very good shape operationally, financially and strategically and is well positioned for long term sustainability വ the macro-economic benefits of diversificati
Slide 65: Acknowledgements
STRATEGIC PLANS AND PROSPECTS / RESULTS PRESENTATION ACKNOWLEDGEMENTS • Board • Property managers • Service providers • Brokers and developers • Tenants • Investors • Funders • Colleagues 65
Slide 66: Q&A
APPENDICES 2020 / RESULTS PRESENTATION Q&A
Slide 67: Appendix A: Southern African Portfolio
APPENDIX A Southern African Portfolio
Slide 68: Portfolio Composition
VUKILE PROPERTY FUND REAL ESTATE. REAL GROWTH. PORTFOLIO COMPOSITION
Slide 69: Southern Africa Retail Footprint
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICA RETAIL FOOTPRINT RETAIL PORTFOLIO PROFILE (TOP 15 PROPERTIES 59% OF PORTFOLIO BY VALUE) 14 12 1 East Rand Mall 9 Nonesi Mall 7% 10 Meadowdale Mall 6% 1 2 Pine Crest 6 5 10 1 13 38% 3% 11 15 3 Phoenix Plaza Bloemfontein Plaza 4% 12 4 Maluti Cresc
Slide 70: High Quality Retail Assets
APPENDICES 2020 / RESULTS PRESENTATION HIGH QUALITY RETAIL ASSETS TOP 15 ASSETS EAST RAND MALL PINE CREST PHOENIX PLAZA MALUTI CRESCENT DOBSONVILLE MALL GAV R1 358m R1 108m R 889m R 714m R 565m Region Gauteng KwaZulu-Natal KwaZulu-Natal Free State Gauteng Gross Lettable Area 68 372m² 43 354m² 24 231
Slide 71: High Quality Retail Assets (cont.)
APPENDICES 2020 / RESULTS PRESENTATION HIGH QUALITY RETAIL ASSETS TOP 15 ASSETS (CONT.) KOLONNADE RETAIL GUGULETHU SQUARE MDANTSANE CITY NONESI MALL MEADOWDALE MALL PARK GAV R 564m R 538m R 510m R 480m R 442m Region Gauteng Western Cape Eastern Cape Eastern Cape Gauteng Gross Lettable Area 39 665m²
Slide 72: High Quality Retail Assets (cont.)
APPENDICES 2020 / RESULTS PRESENTATION HIGH QUALITY RETAIL ASSETS TOP 15 ASSETS (CONT.) DAVEYTON OSHAKATI SHOPPING BLOEMFONTEIN PLAZA THAVHANI MALL MORULENG MALL SHOPPING CENTRE CENTRE GAV R 438m R 436m R 423m R 408m R 392m Region Free State Limpopo Gauteng Namibia North West Gross Lettable Area 43
Slide 73: Retail Tenant Exposure
APPENDICES 2020 / RESULTS PRESENTATION RETAIL TENANT EXPOSURE DIRECT SOUTHERN AFRICAN RETAIL PORTFOLIO TENANT PROFILE - BY CONTRACTUAL RENT TOP 10 TENANTS - BY CONTRACTUAL RENT Largest brand exposure 8.3 2.5 2.5 Other 6.3 4.4 20% 0.3 5.8 4.3 0.5 4.9 0.9 Top 10 0.8 tenants 4.0 2.2 43% 0.3 3.4 of Reta
Slide 74: Retail Category Exposure
APPENDICES 2020 / RESULTS PRESENTATION RETAIL CATEGORY EXPOSURE WELL DIVERSIFIED MIX OF TENANT CATEGORIES CATEGORY PROFILE BY RENT CATEGORY PROFILE BY GLA 30% Fashion 25% 13% Grocery/ Supermarket 22% 8% Banking 4% 7% Food 5% 6% Home Furnishings/ Art/ Décor 7% 4% Department Stores 7% 3% Health & Beau
Slide 75: Tenant Profile Across Sectors
APPENDICES 2020 / RESULTS PRESENTATION TENANT PROFILE ACROSS SECTORS DEFENSIVE RURAL, TOWNSHIP AND VALUE CENTRE PORTFOLIO KEY TO SUSTAINABLE ROBUST PERFORMANCE TOWNSHIP AND COMMUTER RURAL Essential services 34% Grocery/ Supermarket - 16% Essential services 38% Grocery/ Supermarket - 24% Banking - 10
Slide 76: FY2020 Retail Portfolio Performance Metrics
FY2020 RETAIL PORTFOLIO PERFORMANCE METRICS Southern African Portfolio
Slide 77: Retail Portfolio Trading Statistics for Top Properties
APPENDICES 2020 / RESULTS PRESENTATION RETAIL PORTFOLIO TRADING STATISTICS FOR TOP 15 PROPERTIES CONTINUING TO PROVIDE VERY PROFITABLE CENTRES FOR OUR TENANTS Trading density growth including asset Trading density growth like-for-like management intervention 5.7% 6.0% 6.1% 10.4% 7.5% 9.9% 9.1% 1.0%
Slide 78: Rent-to-Sales Ratio by Top Properties
APPENDICES 2020 / RESULTS PRESENTATION RENT-TO-SALES RATIO BY TOP 15 PROPERTIES CONTINUING TO PROVIDE VERY PROFITABLE CENTRES FOR OUR TENANTS 10.6% 8.0% 7.4% 7.2% 7.0% 6.6% 6.4% 6.0% 5.4% 5.2% 5.1% 5.0% 4.9% 4.8% 4.7% 4.2% East Rand Mall Phoenix Plaza Pine Crest Bloemfontein Oshakati Thavhani Mall M
Slide 79: Retail Category Performance
APPENDICES 2020 / RESULTS PRESENTATION RETAIL CATEGORY PERFORMANCE INCREASED EXPOSURE TO STRONG PERFORMING HEALTH AND BEAUTY AND SECOND TIER FASHION TENANTS DECREASED EXPOSURE TO CHALLENGED DEPARTMENT STORES, RESTAURANTS AND MEDICAL Bottle Stores R60 000/m² Grocery/ 7.7% Food 2.5% Supermarket Cell P
Slide 80: Tenant Affordability
APPENDICES 2020 / RESULTS PRESENTATION TENANT AFFORDABILITY RENT TO SALES HOLDING STEADY ACROSS THE PORTFOLIO THROUGH TOUGH MARKET CONDITIONS OVER THE PAST 3 YEARS Average annual rent-to-sales ratio 11.3% 9.8% 8.7% 8.7% 8.4% 8.2% 6.0% 6.0% 6.0% 5.8% 5.7% 5.7% 5.6% 5.3% 5.1% 5.1% 5.0% 5.0% 4.1% 4.1%
Slide 81: Tenant Affordability: Consistently Strong Metrics
APPENDICES 2020 / RESULTS PRESENTATION TENANT AFFORDABILITY CONSISTENTLY STRONG METRICS RETAIL VACANCY PROFILE BY GLA RETAIL AVERAGE BASE RENTALS (EXCL. RECOVERIES) 141.43 134.78 130.44 3.9% 3.8% 122.88 3.5% 114.61 3.3% 108.14 3.0% 2.9% 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 RET
Slide 82: Trading Density Growth
APPENDICES 2020 / RESULTS PRESENTATION TRADING DENSITY GROWTH SUSTAINED TRADING DENSITY GROWTH AT COMPETITIVE OCCUPANCY COSTS Rent-to-sales Rent-to-sales Rent-to-sales Rent-to-sales Rent-to-sales 5.6% 5.8% 5.8% 5.3% 5.3% 5.3% 5.0% 5.0% 5.6% 8.0% 8.1% 7.8% 6.0% 6.0% 6.0% 6.1% 4.9% Trading density gro
Slide 83: Tenant Category, Affordability and Performance
APPENDICES 2020 / RESULTS PRESENTATION TENANT CATEGORY, AFFORDABILITY AND PERFORMANCE CAPACITY FOR GROWTH REMAINS Average annual rent-to-sales ratio 12.3% 12.0% 10.4% 10.2% 10.1% 10.1% 10.1% 10.0% 9.8% 9.6% 9.3% 9.1% 9.0% 9.0% 8.8% 8.5% 8.5% 8.2% 8.0% 8.0% 7.9% 7.8% 7.6% 6.9% 5.8% 5.6% 5.4% 5.2% 5.1
Slide 84: Retail Tenant Expiry Profile
APPENDICES 2020 / RESULTS PRESENTATION RETAIL TENANT EXPIRY PROFILE 37% OF CONTRACTUAL RENT EXPIRING IN FY2024 AND BEYOND (WALE 3.7 YEARS) % of Contractual Rent Cumulative 100 80 63 46 24 22 17 17 20 March 2021 March 2022 March 2023 March 2024 Beyond March 2024 For the 12 months ended 31 March 2020
Slide 85: Retail Vacancies
APPENDICES 2020 / RESULTS PRESENTATION RETAIL VACANCIES 34 PROPERTIES FULLY LET OR WITH VACANCIES LOWER THAN 1 000M² Fully Let Ga-Kgapane Modjadji Plaza Giyani Plaza Makhado Nzhelele Valley Shopping Centre Mbombela Truworths Centre Phuthaditjhaba Maluti Crescent Piet Retief Shopping Centre Pretoria
Slide 86: Weighted Average Base Rentals R/m²
APPENDICES 2020 / RESULTS PRESENTATION WEIGHTED AVERAGE BASE RENTALS R/m² (EXCLUDING RECOVERIES) SOUTHERN AFRICAN RETAIL PORTFOLIO Durban Phoenix Plaza Boksburg East Rand Mall Durban Workshop Mbombela Truworths Centre Pinetown Pine Crest Daveyton Shopping Centre Windhoek 269 Independence Avenue Thoh
Slide 87: Ratio of Net Cost to Property Revenue – Retail Portfolio
APPENDICES 2020 / RESULTS PRESENTATION RATIO OF NET COST TO PROPERTY REVENUE – RETAIL PORTFOLIO GOOD PROGRESS IN COST CONTAINMENT 20.1 19.3 18.5 18.1 17.7 16.9 15.5 15.1 15.5 15.8 16.9 16.0 15.7 16.1 2014 2015 2016 2017 2018 2019 2020 All expenses All expenses excluding rates & taxes and electricity
Slide 88: Asset Management Initiatives
ASSET MANAGEMENT INITIATIVES Southern African Portfolio
Slide 89: Acquisitions and Sales
APPENDICES 2020 / RESULTS PRESENTATION ACQUISITIONS AND SALES TRANSFERRED DURING THE YEAR Property acquired Location Sector Price R'm Date of transfer Mdantsane City Shopping Mdantsane, Eastern Cape Retail 516.5 Nov-19 Centre Property sold Location Sector Price R'm Date of transfer Sandton Linbro Ga
Slide 90: Customer Centricity and Insights
APPENDICES 2020 / RESULTS PRESENTATION CUSTOMER CENTRICITY AND INSIGHTS DEVELOPING CORE COMPETENCE IN CUSTOMER CENTRICITY TO DRIVE BETTER LEASING DECISIONS AND TENANT MIX OUT OF-MALL 3 primary pillars of customer insights journey CUSTOMISED SHOPPER INTERACTION • In-Mall Demographics & Household വ Un
Slide 91: Alternative Income Management
APPENDICES 2020 / RESULTS PRESENTATION ALTERNATIVE INCOME MANAGEMENT SIGNIFICANT MILESTONES ACHIEVED WITH PLATFORM NOW IN PLACE Fibre to the business project – tenants currently signing up for FTTB Services and Centre Management Offices – sign up to take place shortly Wi-Fi installed at 5 properties
Slide 92: Energy and Water Management
APPENDICES 2020 / RESULTS PRESENTATION ENERGY AND WATER MANAGEMENT ACHIEVEMENTS Impact on cost-to-income ratio • Electricity contributes 42% to total expenses • 5% of the portfolio’s electricity is generated by renewable resources, curbing our largest expense item by 100bps positive impact on the ne
Slide 93: Operational Highlights FY20: Effective Capital Allocation
APPENDICES 2020 / RESULTS PRESENTATION OPERATIONAL HIGHLIGHTS FY20 EFFECTIVE CAPITAL ALLOCATION Fully executed on operational capex programme • R93m spent on 396 projects • Capex program focus primarily on - HVAC, OHS act, fire detection and prevention, replacement of escalators, lifts and shopfront
Slide 94: Valuation Methodology
APPENDICES 2020 / RESULTS PRESENTATION VALUATION METHODOLOGY SOUTHERN AFRICAN PROPERTY PORTFOLIO Valuations are based on multiple assumptions which involve some subjectivity. The key is consistency in applying the same SCIENCE VS. ART methodology over time. We’ve applied consistent views and methodo
Slide 95: FY2020 Total Portfolio Performance Metrics
FY2020 TOTAL PORTFOLIO PERFORMANCE METRICS Southern African Portfolio
Slide 96: Southern African Total Portfolio Composition
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO COMPOSITION TOP 15 ASSETS MAKE UP 59% OF THE TOTAL PORTFOLIO SECTORAL PROFILE - BY VALUE SECTORAL PROFILE - BY GLA Top 15 By Value By GLA Top 15 Properties Properties 93% Retail 88% 59% 3% Industrial 7% 45% of Total Value 2% Off
Slide 97: Southern African Total Portfolio Tenant Exposure
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO TENANT EXPOSURE LOW RISK WITH 77% NATIONAL TENANTS TENANT PROFILE - BY CONTRACTUAL RENT TENANT PROFILE - BY OCCUPIED GLA Other Other 23% 23% Top 10 Diversified across Top 10 Tenants 1 249 tenants Tenants 40% 46% of Total Rent Na
Slide 98: Total Portfolio Tenant Expiry Profile
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO TENANT EXPIRY PROFILE 37% OF CONTRACTUAL RENT EXPIRING IN FY2024 AND BEYOND (WALE 3.6 YEARS) % OF CONTRACTUAL RENT % of Contractual Rent Cumulative 100 80 63 46 25 21 17 17 20 March 2021 March 2022 March 2023 March 2024 Beyond M
Slide 99: Total Portfolio Vacancy Profile
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO VACANCY PROFILE VACANCY REDUCED TO 3.1% OF CONTRACTUAL RENT 19.6 10.9 6.9 5.6 3.0 2.9 2.9 3.6 3.1 Retail Industrial Offices Residential * Total M Mar-19 M Mar-20 21.0 8.7 5.7 3.5 4.3 3.9 3.4 3.0 2.9 Retail Industrial Offices Res
Slide 100: Total Portfolio Lease Renewals
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO LEASE RENEWALS POSITIVE REVERSIONS 7.8 8.0 Of 345 retail leases renewed, 73% were positive, 10% flat and 17% were negative 1.6 1.1 Retail Industrial Offices Motor Average Related * * No motor related leases concluded during the
Slide 101: Contracted Rental Escalation Profile
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO CONTRACTED RENTAL ESCALATION PROFILE RENTAL ESCALATIONS STILL AHEAD OF INFLATION 7.9 7.6 7.8 7.6 7.8 7.0 6.9 6.9 7.0 7.0 7.0 7.0 6.9 7.0 Retail Industrial Offices Motor Related Total Mar-19 Mar-20 Recent New Leases and Renewals
Slide 102: Weighted Average Base Rentals – R/m²
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO WEIGHTED AVERAGE BASE RENTALS – R/m² EXCLUDING RECOVERIES 171.87 141.43 142.94 134.98 131.68 127.54 134.78 106.52 95.32 61.41 57.83 Retail (i) Industrial Offices (ii) Motor Related (iii) Residential (iv) Total Mar-19 Mar-20 (i)
Slide 103: Growth in Net Profit from Southern African Property Operations
APPENDICES 2020 / RESULTS PRESENTATION GROWTH IN NET PROFIT FROM SOUTHERN AFRICAN PROPERTY OPERATIONS LIKE-FOR-LIKE GROWTH OF 5.9% 7.5% 6.8% 6.5% 5.8% 5.9% 3.4% 2015 2016 2017 2018 2019 2020 Note: Historic data per Company Annual Results. 103
Slide 104: Ratio of Cost to Property Revenue
APPENDICES 2020 / RESULTS PRESENTATION SOUTHERN AFRICAN TOTAL PORTFOLIO – RATIO OF COST TO PROPERTY REVENUE NET COST TO PROPERTY REVENUE CONTAINING COST RATIOS 19.4 16.9 18.0 17.9 17.7 16.4 16.2 15.4 15.4 15.2 16.1 15.0 Average 16.9 15.5 15.3 Average 16.0 2014 2015 2016 2017 2018 2019 2020 All expen
Slide 105: Appendix B: Spanish Portfolio
APPENDIX B Spanish Portfolio
Slide 106: Portfolio Overview
VUKILE PROPERTY FUND REAL ESTATE. REAL GROWTH. PROPERTIES
Slide 107: Our Portfolio
APPENDICES 2020 / RESULTS PRESENTATION OUR PORTFOLIO WELL DIVERSIFIED ACROSS SPAIN 9 3% 5 9% 1 El Faro 10 Marismas de Polvorín 2 Bahía Sur 11 Alcobendas Building 11 8 3 Los Arcos 12 La Heredad 7% 17 16 20% 4 Granaita 13 La Serena 12 10% 5 Vallsur 14 Pinatar Park 1 13 6 Habaneras 15 Motril Retail Par
Slide 108: Spanish Portfolio Overview: Top Assets
APPENDICES 2020 / RESULTS PRESENTATION SPANISH PORTFOLIO OVERVIEW TOP 10 ASSETS EL FARO BAHÍA SUR LOS ARCOS GRANAITA (I) VALLSUR GAV €162.0m €140.7m €135.8m €111.1m €91.4m Province Badajoz Cádiz Seville Granada Valladolid Catchment Area (Inhabitants) 517,491 674,250 1,499,884 628,002 477,746 Gross L
Slide 109: Spanish Portfolio Overview: Top Assets
APPENDICES 2020 / RESULTS PRESENTATION SPANISH PORTFOLIO OVERVIEW TOP 10 ASSETS HABANERAS PUERTA EUROPA PARQUE OESTE (I) PARQUE PRINCIPADO MARISMAS DEL POLVORÍN GAV €88.9m €62.9m €50.2m €33.1m €27.3m Province Alicante Cádiz Madrid Oviedo Huelva Catchment Area (Inhabitants) 531,670 311,110 5,856,325
Slide 110: Tenant Mix
APPENDICES 2020 / RESULTS PRESENTATION TENANT MIX HIGHLY DIVERSIFIED RETAIL MIX LEADING TO SUSTAINABLE, HIGH QUALITY AND LOW RISK INCOME STREAMS Assets GLA WALE (i) Occupancy 16 356 675m2 13.6 years 98.2% CATEGORY PROFILE BY RENT TOP 10 TENANTS BY RENT 31ST MARCH 2020 31ST MARCH 2020 Fashion & Acces
Slide 111: Spanish Total Portfolio Composition
APPENDICES 2020 / RESULTS PRESENTATION SPANISH TOTAL PORTFOLIO COMPOSITION SECTORAL PROFILE - BY VALUE SECTORAL PROFILE - BY GLA Development Offices Offices potential 3% Development 5% 1% potential 0% Retail Parks 29% Top 10 Top 10 Retail Parks properties properties 42% 81% 89% Shopping Shopping Cen
Slide 112: FY2020 Operational Review
ILE PROPERTY FUND REAL ESTATE. REAL GROWTH. ce PROPERTIES
Slide 113: Footfall & Sales
APPENDICES 2020 / RESULTS PRESENTATION FOOTFALL & SALES CASTELLANA OUTPERFORMED BENCHMARKS IN 2019 FOOTFALL • Strong positive trend across the portfolio (+ 3.9% YTD 2019) FOOTFALL JAN – DEC 2019 (1) SALES JAN – DEC 2019 (2) vs national index (- 1.9%) 4% • Excluding Los Arcos and Bahía Sur, due to th
Slide 114: Leasing Activity
APPENDICES 2020 / RESULTS PRESENTATION LEASING ACTIVITY COMMERCIAL PERFORMANCE FY2020 MAIN BUSINESS KPI´S DURING FY2020 OCCUPANCY ALMOST FULLY LET 165 €12.2m 31ST MARCH 2020 98.30% OPERATION SIGNED NEW RENT SIGNED 31ST MARCH 2019 97.86% 64 101 €4.71m €7.51m RENT ARREARS REMAINS LOW RENEWALS NEW CONT
Slide 115: Spanish Vacancy Profile
APPENDICES 2020 / RESULTS PRESENTATION SPANISH VACANCY PROFILE PORTFOLIO VACANCY OF 1.7% OF GLA Shopping Centres Vallsur (35 212m²) 3.9% 3.1% El Faro (35 623m²) 3.2% 1.4% Puerta Europa (29 732m²) 3.1% Bahía Sur (17 483m²) 3.0% 2.3% Los Arcos (16 227m²) 1.2% 4.3% Habaneras (24 166m²) 1.0% 2.0% Retail
Slide 116: Retail Lease Expiry Profile (Rent)
APPENDICES 2020 / RESULTS PRESENTATION RETAIL LEASE EXPIRY PROFILE 47% OF CONTRACTUAL RENT EXPIRING IN FY2030 AND BEYOND (WALE 10.6 YEARS TO EXPIRY AND 2.5 YEARS TO BREAK) EXPIRY PROFILE (% RENT) 100 44 49 53 56 38 43 35 19 25 8 12 10 8 7 6 6 4 3 5 4 3 Mar/21 Mar/22 Mar/23 Mar/24 Mar/25 Mar/26 Mar/2
Slide 117: Retail Lease Expiry Profile (GLA)
APPENDICES 2020 / RESULTS PRESENTATION RETAIL LEASE EXPIRY PROFILE 65% OF CONTRACTUAL GLA EXPIRING IN FY2030 AND BEYOND (WALE 13.6 YEARS TO EXPIRY AND 2.8 YEARS TO BREAK) EXPIRY PROFILE (% GLA) 100 61 32 35 39 21 23 26 7 9 11 14 2 5 3 7 3 6 3 4 2 2 2 2 Vacant Mar/21 Mar/22 Mar/23 Mar/24 Mar/25 Mar/2
Slide 118: GAV Bridge and Breakdown
APPENDICES 2020 / RESULTS PRESENTATION GAV BRIDGE AND BREAKDOWN Strong portfolio revaluation of €7.6m in 6 months from 31st March 2019 to 30 September 2019 Portfolio Gross Asset Value over €1bn with investments of c. €110m during FY2020 LfL Acquisitions GROWTH GROWTH +0.32% +7.58% €m 110.3 1 003.5 9
Slide 119: GRI Bridge and Breakdown
APPENDICES 2020 / RESULTS PRESENTATION GRI BRIDGE AND BREAKDOWN Life-for-Like Growth of 2.78% Potential Portfolio GRI Annualised is above €66m SHOPPING CENTRES €45.5m 68.5% RETAIL PARKS +2.75% LfL GROWTH(2) RETAIL PARKS €18.9m 28.4% OFFICES +3.00% +2.78% OFFICES €2.0m 3.1% €m 66.4 3.2 55.9 17.9 34.3
Slide 120: EPRA Best Practices
APPENDICES 2020 / RESULTS PRESENTATION EPRA BEST PRACTICES CASTELLANA WELL POSITIONED RELATIVE TO PEERS CASTELLANA PEER AVERAGE NET INITIAL YIELD TOPPED UP NIY NET INITIAL YIELD TOPPED UP NIY EPRA YIELDS 5.74% 6.03% 5.22% 5.38% EPRA VACANCY RATE 1.20% 3.68% EPRA COST RATIO 16.03% 16.44% Note: All Ca
Slide 121: Growth Drivers and Asset Management Initiatives
GROWTH DRIVERS AND ASSET MANAGEMENT INITIATIVES
Slide 122: Growth Drivers: Customer Centricity
APPENDICES 2020 / RESULTS PRESENTATION GROWTH DRIVERS CUSTOMER CENTRICITY CUSTOMER CENTRICITY CUSTOMER ANALYTICS THE CUSTOMER EXPERIENCE PROCESS KNOWING OUR CUSTOMERS BETTER WITH A ENCOMPASSES EVERY TOUCHPOINT BOTTOM UP APPROACH TO CUSTOMER ALONG THE WAY ENGAGEMENT EXCITEMENT AND IN MALL TENANT MIX
Slide 123: Main Growth Drivers FY2020
APPENDICES 2020 / RESULTS PRESENTATION MAIN GROWTH DRIVERS FY2020 INTRODUCING DEALZ BRAND INTO THE F&B AREA DELIVERED IN HABANERAS UPGRADING COMMERCIAL MIX IN PORTFOLIO PUERTA EUROPA Opening Dealz Brand in La Serena Retail Park New access to F&B area Primor unit is the first in the whole of Gibralta
Slide 124: New Acquisition – Puerta Europa
APPENDICES 2020 / RESULTS PRESENTATION NEW ACQUISITION – PUERTA EUROPA DOMINANT SHOPPING CENTRE IN ALGECIRAS OFFERING STABLE AND GROWING NOI • Dominant centre in port city of Algeciras with under-market rentals and above average sales performance offers attractive NOI growth profile • Footfall incre
Slide 125: Additional Acquisitions
APPENDICES 2020 / RESULTS PRESENTATION ADDITIONAL ACQUISITIONS STRATEGIC ACQUISITIONS TO ENHANCE EXISTING ASSETS PINATAR PARK PHASE II – MURCIA Accretive acquisition of Phase 2 at Pinatar Park to further strengthen the tenant mix Acquisition Date: 18/06/2019 Price (1) : €3.59m GLA: 2 624m² ECI UNITS
Slide 126: Repositioning Project: Bahia Sur
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT BAHIA SUR 1 / 2 MAY 2020 JUL 2020 DEC 2020 Inditex units Indoor Yelmo Cines ready to redesign opening deliver finished Q1 Q2 Q3 Q4 JUN 2020 SEPT 2020 Reconfiguration Yelmo unit Zara, Lefties, units in ECI’s area ready to KIko openings high
Slide 127: Repositioning Project: Bahia Sur Layout
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT BAHIA SUR 2 / 2 CURRENT LAY OUT FUTURE LAY OUT (1) ACQUISITION OF EL CORTE INGLES UNIT TO REINFORCE THE DOMINANCE OF THE CENTRE, BRINGING NEW AND EXCITING TENANTS TO THE CADIZ REGION Unit signed Unit committed. Advanced negotiations Unit u
Slide 128: Repositioning Project: Los Arcos
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT LOS ARCOS 1 / 2 MAY 2020 JUL 2020 SEPT-NOV 2020 Complete Mercadona’s Other unit’s reconfiguration opening opening Hipercor’s units Q1 Q2 Q3 Q4 Q2 – Q3 Relocation some units located in central mall Works inside the mall have been progressin
Slide 129: Repositioning Project: Los Arcos Layout
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT LOS ARCOS 2 / 2 CURRENT LAY OUT FUTURE LAY OUT (1) ACQUISITION OF HIPERCOR UNIT ENABLING IMPROVED TENANT MIX ALONG WITH STREET LEVEL RECONFIGURATION Unit signed Unit committed. Advanced negotiations Unit under negotiations RETURN METRICS A
Slide 130: Repositioning Project: El Faro
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT EL FARO 1 / 2 JUN 2020 SEPT-OCT 2020 DEC 2019 Castellana works Yelmo Opening Yelmo unit finished and units - delivered ready to deliver Other unit’s opening Q1 Q2 Q3 Q4 Hard push in the project in the last 6M (+25% GLA signed and committed
Slide 131: Repositioning Project: El Faro Layout
APPENDICES 2020 / RESULTS PRESENTATION REPOSITIONING PROJECT FUTURE LAY OUT (1) EL FARO 2 / 2 UNLOCKING VALUE BY TRANSFORMING FORMER DIY BOX INTO ATTRACTIVE F&B PLAZA Unit signed Unit committed. Advanced negotiations Unit under negotiations RETURN METRICS Capex Budget €4.5m Additional NOI created €0
Slide 132: Spanish Economic Fundamentals
SPANISH ECONOMIC FUNDAMENTALS
Slide 133: Impact on Spanish Economy: GDP and Bond Yields
APPENDICES 2020 / RESULTS PRESENTATION IMPACT ON SPANISH ECONOMY STRONG REBOUND EXPECTED IN 2021 WITH DEBT COSTS LOWER FOR LONGER GDP AND GOVERNMENT DEBT AS % OF GDP 10Y GOVERNMENT BONDS (YIELD) • Spain’s GDP is forecast to contract up to 9.7% in 2020. Market consensus points to a strong rebound of
Slide 134: Impact on Spanish Economy: Unemployment
APPENDICES 2020 / RESULTS PRESENTATION IMPACT ON SPANISH ECONOMY UNEMPLOYMENT STILL BELOW 2012 PEAK INFLATION RATE (CPI) UNEMPLOYMENT (1) IN SPAIN BY ECONOMIC SECTOR • Pre-COVID-19 unemployment currently sitting at 14% but expected to rise up to 20% by year-end • Still well below the peak of 26% rea
Slide 135: Impact on Spanish Economy: Stimulus Effect
APPENDICES 2020 / RESULTS PRESENTATION IMPACT ON SPANISH ECONOMY EFFECT OF STIMULUS PACKAGES ON THE RECOVERY EXPECTED IN COMING MONTHS CONSUMER CONFIDENCE BUSINESS CONFIDENCE • Robust and coordinated response to protect and stimulate the economy by Spanish and European authorities should contribute
Slide 136: Appendix C: Financial Results Overview
APPENDIX C Financial Results Overview
Slide 137: Simplified Income Statement
APPENDICES 2020 / RESULTS PRESENTATION SIMPLIFIED INCOME STATEMENT Mar-20 Mar-19 Variance Rm Rm % Revenue 3 446 2 806 22.8 SA 2 137 1 927 9.8 Spain 1 310 880 32.9 Property Expenses (1 129) (932) 17.5 Net property income 2 317 1 874 19.1 SA 1 330 1 206 9.3 Spain 987 669 32.3 Corporate administration
Slide 138: Reconciliation to Distributable Earnings per Share
APPENDICES 2020 / RESULTS PRESENTATION RECONCILIATION TO DISTRIBUTABLE EARNINGS PER SHARE Mar-20 Mar-19 Variance Rm Rm % Attributable to Vukile shareholders 1 802 1443 19.9 Non-IFRS adjustments: Accrued dividends (Listed investments) (19) 122 Non-cash impact of IFRS 16 (Leases) 6 - Antecedent divide
Slide 139: Geographical Segment Analysis
APPENDICES 2020 / RESULTS PRESENTATION GEOGRAPHICAL SEGMENT ANALYSIS SPAIN INCREASED ITS CONTRIBUTION TO 43% OF NET PROPERTY INCOME 12 MONTHS TO MARCH 2019 12 MONTHS TO MARCH 2020 REVENUE 31% REVENUE 38% 62% 69% NET PROPERTY INCOME NET PROPERTY INCOME 36% 43% 57% 64% Southern Africa Spain 139
Slide 140: Appendix C: Treasury – Liquidity Overview
APPENDIX C Treasury - liquidity overview: വ Loan repayment and hedging expiry profiles വ Undrawn facilities
Slide 141: Analysis of Group Loan Repayment and Hedging Expiry Profile
APPENDICES 2020 / RESULTS PRESENTATION ANALYSIS OF GROUP LOAN REPAYMENT AND HEDGING EXPIRY PROFILE WELL HEDGED WITH LOW RISK EXPIRY PROFILE GROUP LOAN AND HEDGING (SWAP & FIXED DEBT) EXPIRY PROFILE 65.6% R1.1bn of available 33.8% undrawn bank facilities 20.5% 81% of interest bearing debt 15.0% hedge
Slide 142: Southern African Loan Repayment and Swap Expiry Profile
APPENDICES 2020 / RESULTS PRESENTATION ANALYSIS OF SOUTHERN AFRICAN LOAN REPAYMENT AND SWAP EXPIRY PROFILE WELL HEDGED WITH LOW RISK EXPIRY PROFILE SOUTHERN AFRICAN LOAN AND HEDGING (SWAP & FIXED DEBT) EXPIRY PROFILE 32.9% 40.7% 24.8% 22.6% 21.8% 71% of interest bearing debt hedged 11.5% 8.2% 9.7% 6
Slide 143: Spanish Loan Repayment and Swap Expiry Profile
APPENDICES 2020 / RESULTS PRESENTATION ANALYSIS OF SPANISH LOAN REPAYMENT AND SWAP EXPIRY PROFILE LOW REFINANCE RISK OVER THE NEXT SIX YEARS SPANISH LOAN AND HEDGING (SWAP & FIXED DEBT) EXPIRY PROFILE 81.6% 64.4% 90% of interest bearing debt hedged Fixed rate (swap & fixed debt) maturity profile 3.2
Slide 144: Undrawn Facilities
APPENDICES 2020 / RESULTS PRESENTATION UNDRAWN FACILITIES UNDRAWN BANK FACILITIES OF R1.1BN Facility amount Amount drawn Undrawn '000 '000 '000 ABSA multicurrency revolving credit facility (ZAR portion) R230 980 R0 R230 980 ABSA multicurrency revolving credit facility (EUR portion) €31 424 €31 424 €
Slide 145: Appendix C: Debt Capital Market Overview
APPENDIX C Debt Capital Market overview: വ DMTN secured portfolio വ Unencumbered assets വ Corporate bond issuances
Slide 146: Overview of Unencumbered Assets
APPENDICES 2020 / RESULTS PRESENTATION OVERVIEW OF UNENCUMBERED ASSETS QUALITY UNENCUMBERED ASSETS • Total unencumbered assets R9 174m • 47% of income from top 10 tenants • Unencumbered direct property R4 177m • WALE of 3.0 years • Unencumbered listed shares R4 997m • Retail tenant retention 91% (Ca
Slide 147: Corporate Bond Issuances
APPENDICES 2020 / RESULTS PRESENTATION CORPORATE BOND ISSUANCES BALANCE OF SECURED AND UNSECURED DEBT Corporate Bonds Security Amount Reference Rate Margin Maturity Date Initial Term VKE07 Secured R200m 3M JIBAR 1.65% 08/06/2020 5.1 years VKE09 Secured R378m 3M JIBAR 1.64% 08/07/2020 3.2 years VKE10
Slide 148: Appendix C: Currency Overview
APPENDIX C Currency overview: വ Net exposure by currency വ LTV currency sensitivity വ EUR hedging
Slide 149: Consolidated Net Exposure by Currency
APPENDICES 2020 / RESULTS PRESENTATION CONSOLIDATED NET EXPOSURE BY CURRENCY AS AT 31 MARCH 2020 ZAR Exposure EUR Exposure GBP Exposure Group R’m €’m £’m R’m Vukile property value R15 699 R15 699 Gemgrow & Fairvest equity value R584 R584 Atlantic Leaf equity value £47 R1 047 Castellana property valu
Slide 150: Forecast LTV Sensitivity to Foreign Exchange Movements
APPENDICES 2020 / RESULTS PRESENTATION FORECAST LTV SENSITIVITY TO FOREIGN EXCHANGE MOVEMENTS AS AT 31 MARCH 2020 • As the ZAR spot rate strengthens to EUR and GBP, a 10% strengthening to 17.73 and 19.94, is a 1.35% decrease in the Group LTV GBPZAR Exchange Rate -25% -20% -15% -10% -5% -1% 0% 1% 5%
Slide 151: EUR Foreign Exchange Hedging
APPENDICES 2020 / RESULTS PRESENTATION EUR FOREIGN EXCHANGE HEDGING MAINTAINING SUSTAINABLE PREDICTABLE INCOME WHILE REDUCING CURRENCY VOLATILITY €'000 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Fixed EUR/ZAR rate 18.1143 18.4598 19.2738 20.1694 20.9673 21.8077 22.6975 23.
Slide 152: Appendix C: Key Debt Metrics Overview
APPENDIX C Key Debt Metrics Overview: വ “See-through” LTV വ LTV Valuation Sensitivity വ Cost of Funding വ Notes to Slides
Slide 153: See-Through Loan-to-Value Ratio
APPENDICES 2020 / RESULTS PRESENTATION “SEE-THROUGH” LOAN-TO-VALUE RATIO Interest bearing debt Property assets Cash LTV Shareholding R'000 R'000 R'000 Vukile Company, MICC and 100% of Clidet No. 1011 R8 793 599 R15 699 320 R454 986 53.11% 100.0% Castellana R9 727 908 R19 767 649 R958 903 44.36% 82.5
Slide 154: Forecast LTV Sensitivity to Valuations
APPENDICES 2020 / RESULTS PRESENTATION FORECAST LTV SENSITIVITY TO VALUATIONS AS AT 31 MARCH 2020 Valuation Movement South Africa -10.0% -7.5% -5.0% -2.5% -1.0% 0% 1.0% 2.5% 5.0% 7.5% 10.0% -7.5% 50.3% 49.7% 49.1% 48.6% 48.2% 48.0% 47.8% 47.5% 47.0% 46.5% 46.0% -5.0% 49.5% 49.0% 48.4% 47.9% 47.6% 47
Slide 155: Cost of Funding
APPENDICES 2020 / RESULTS PRESENTATION COST OF FUNDING REDUCTION IN GROUP COST OF FINANCE DUE TO FUNDING MIX GROUP DEBT BY CURRENCY 9.21% 9.26% 2.70% 2.53% 3.45% 3.56% 4.53% 3.95% R18.522bn R14.754bn R13.230bn R9.462bn R3.450bn R3.226bn R0.542bn R0.318bn ZAR EUR GBP Total Debt as at Mar-19 Debt as a
Slide 156: Notes to Treasury Management Slides
APPENDICES 2020 / RESULTS PRESENTATION NOTES TO TREASURY MANAGEMENT SLIDES ALIGNED WITH INDUSTRY BEST STANDARDS (i) Loan-to-Value ratio calculated as a ratio of nominal interest-bearing debt less cash and cash equivalents (excluding tenant deposits & restricted cash) divided by the sum of (i) the am