Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2012 Earnings Presentation
20 slides from Hyprop Investments's earnings presentation, March 2013
Slide 1: Audited annual results 31 December 2012
Audited annual results 31 December 2012 Agenda OVERVIEW FINANCIAL RESULTS OPERATIONAL PERFORMANCE DEVELOPMENTS PROSPECTS 2 1
Slide 2: History of Hyprop
OVERVIEW 3 History of Hyprop Celebrating 25 years Listed on 24 February 1988 Initial portfolio of 4 buildings Total value: R94 m One building still in portfolio Hyde Park Corner Listing price R5 per combined unit First year distribution 44.9 cents 4 2
Slide 3: Investment profile; Highlights – Financial
Investment profile Premium quality shopping centres Total property assets Distinguished by quality, size and Shopping centres location (R17.8bn) Diverse tenant base Flagship national stores 85% Preferred shopping destinations Experienced internal management 11% Robust financial position Syco
Slide 4: Highlights – Strategic achievements and Operational
Highlights - Strategic achievements 31 December 2012 Disposal of non-core assets - R524 million Rosebank Mall redevelopment commenced in September 2012 Successfully launched investment in other African countries Established R5 billion DCM programme - issued R1 billion Improved corporate governance c
Slide 5: Distributions and Track record
Distributions Cents per unit 500 2nd Half Full Year % growth 6.8% 400 7.3% 8.8% 409 6.5% 383 14.1% 357 300 328 308 10.4% 4.5% 200 5.7% 9.6% 12.9% 202 211 183 158 167 100 0 2008 2009 2010 2011 2012 9 Track record Rbn LTV % 20 60% Investment property 18.7 17.4 17.7 Market cap LTV % 15 45% 12.9 10 9.4
Slide 6: Financial results
FINANCIAL RESULTS 11 Financial highlights Strong like-for-like income growth Effective cost control Continued improvement in tenant arrears 12 6
Slide 7: Income statement extracts; Net income
Income statement ‒ extracts 31 Dec 2012 31 Dec 2011 (Rm) (Rm) Revenue 2 168 1 483 Investment property 2 016 1 351 49% Listed property 152 132 15% Property expenses (714) (512) 39% Net property income 1 454 971 50% Other operating expenses (53) (34) Operating income 1 401 937 Net interest (405) (208)
Slide 8: Revenue spread; Balance sheet extracts
Revenue spread Municipal cost recovery 22% 58% Operating cost recovery 8% Retail rental 5% 3% Customer parking Storerooms and other 2% Office rental 1% Monthly parking 1% Turnover rental 15 Balance sheet ‒ extracts 31 Dec 2012 31 Dec 2011 (Rm) (Rm) Investment property 18 716 17 394 7.6% Listed prope
Slide 9: Valuations; Borrowings
Valuations Size Hyprop share Value Average (m2) (Rm) (R/m2) yield Super regional 157 447 5 200 41 284 6.8% Large regional 329 736 7 975 25 942 7.3% Regional 36 894 1 420 38 489 7.0% Value centres 155 573 2 175 14 289 8.1% Shopping centres 679 650 16 770 27 510 7.2% Stand-alone offices 51 243 710 13
Slide 10: DCM programme; Disposals
Debt capital market (DCM) programme 31 December 2012 Size of programme R5 bn Issued to date R1 bn % of total debt 20% Moody’s rating A3.za / P-2.za 19 Disposals Valuation at Proceeds 31 Dec 2011 Effective (Rm) (Rm) date Vunani 105.0 99.0 March 2012 Acucap 108.5 97.0 July 2012 50% interest in Southco
Slide 11: Direct property portfolio
OPERATIONAL PERFORMANCE 21 Direct property portfolio Rentable area Value (m2) (Rm) Canal Walk 157 447 5 200 Super regional 157 447 5 200 28% Clearwater Mall 85 174 2 945 The Glen 74 624 1 751 Woodlands Boulevard 70 319 1 770 CapeGate Precinct 99 619 1 509 Large regional 329 736 7 975 43% Hyde Park 3
Slide 12: Leasing; Lease activity
Leasing Continued strong demand at regional malls Strong performance from international shops National and international retailers pushing for larger/flagship stores 23 Lease activity Contractual Area Rental growth escalation Retail (m²) (%) (%) New lettings 34 134 3.5% 8.9% Renewals 61 161 4.4% 8.4
Slide 13: Vacancies; Lease expiry
Vacancies Retail Offices Total % Area (m²) % Area (m²) % Area (m²) At 31 Dec 2011 3.0% 19 912 12.2% 9 220 3.9% 29 132 At 31 Dec 2012* 1.7% 11 355 9.1% 6 923 2.5% 18 278 Reduction (8 557) (2 297) (10 854) * Excludes Rosebank Mall and adjusted for disposals (Southcoast Mall) Highest vacancy risk in th
Slide 14: Trading density; Gross rent to turnover
Trading density Per month (R/m²) 3 500 5% Average portfolio growth: +7% (2011: +5%) 3 000 3 173 8% 14% 9% 2 500 2 703 2 694 2 519 5% 4% 3% 10% 12% 2 249 2 000 2 089 2 068 2 019 2 006 3% 1 500 1 605 11% 1 385 9% 1 000 1 176 500 - Hyde Park Canal Walk Clearwater The Glen Willowbridge Somerset CapeGate
Slide 15: Redevelopment: Rosebank Mall
DEVELOPMENTS 29 Redevelopment Rosebank Mall Construction work started in Sep 2012 with final completion in Sep 2014 Total size approximately 62 000m² Over 90% of lettable area committed Capital cost R920 million with first year yield of 7% 30 15
Slide 16: Other developments; Investment into Africa
Other developments Major tenant enlargements completed in 2012 - R17 m Clearwater Edgars & Jet Woodlands Spur Canal Walk Clicks, Mr Price Sport, Cotton-On Acquisition of additional bulk - R25 m CapeGate 14 000m² Approved for 2013 - R91 m The Glen Expansion of Edgars and Foschini Canal Walk Expansion
Slide 17: Prospects: Looking ahead
PROSPECTS 33 Looking ahead Strategy Invest in dominant shopping centres - local and elsewhere in Africa Focus Expand existing centres to meet tenant demand Grow assets through acquisitions Further exit from non-core assets Utilise DCM funding Conversion to a REIT Implement staff share incentive sche
Slide 18: Distribution growth; Questions & Answers
Distribution growth Forecast 5% - 7% Risk Impact of Rosebank Mall redevelopment Slowdown in consumer spend Rising utility costs Opportunity Strong demand from retailers (national and international) Low interest rates Sustainable income growth 35 QUESTIONS & ANSWERS 36 18
Slide 19: Top properties by value
APPENDICES 37 Top 8 properties by value Canal Walk Clearwater Woodlands The Glen (80% undivided share) Mall Boulevard (75% undivided share) Region Cape Town Region Johannesburg Region Pretoria Region Johannesburg Valuation (Rm) 5 200 Valuation (Rm) 2 945 Valuation (Rm) 1 770 Valuation (Rm) 1 751 Tot
Slide 20: Top properties by value (cntd.)
Top 8 properties by value – (cntd.) CapeGate Precinct Hyde Park Atterbury Value Mart Rosebank Mall Region Cape Town Region Johannesburg Region Pretoria Region Johannesburg Valuation (Rm) 1 509 Valuation (Rm) 1 420 Valuation (Rm) 952 Valuation (Rm) 990 Total GLA (m²) 99 619 Total GLA (m²) 36 894 Tota