Slide 1: Interim results presentation
Interim results presentation Six month period ending 31 March 2017
Slide 2: Gemgrow’s proud heritage
Gemgrow’s proud heritage ApexHi Arrowhead Gemgrow 2003 – 2009 2011 – 2016 2017 and beyond Gerald Leissner (CEO) Gerald Leissner (CEO) Mark Kaplan (CEO) Mark Kaplan (COO) Alon Kirkel (COO) Imraan Suleman (CFO) Junaid Limalia (CFO) 01
Slide 3: Gemgrow group structure
Gemgrow group structure Arrowhead Gemgrow Vukile 55% 27% 100% Cumulative 02
Slide 4: Major shareholders (A shareholders)
Major shareholders A SHAREHOLDERS (MARCH 2017) Rank Fund manager % 1 Coronation Fund Managers 62,7 2 Vukile Property Fund Limited 9,9 3 Visio Capital Management 9,7 4 Old Mutual Investment Group 7,4 5 Namibia Asset Management 2,5 03
Slide 5: Major shareholders (B shareholders)
Major shareholders B SHAREHOLDERS (MARCH 2017) Rank Fund manager % 1 Vukile Property Fund Limited 29,5 2 Coronation Fund Managers 1,8 3 Prescient Invesment Managers 0,3 4 Catalyst Fund Managers 0,2 5 Eskom Pensions and Provident Invesment Management 0,04 04
Slide 6: Management and Board
Management and Board Executive Non-executive Mark Kaplan (CEO) Gregory Kinross (Chairman) Alon Kirkel (COO) Clifford Abrams Junaid Limalia (CFO) Ayesha Rehman Arnold Basserabie 05
Slide 7: Gemgrow strategy
Gemgrow strategy ›› Quarterly distributions ›› Sustainable yield-enhancing acquisitions ›› Diversify risk ›› Buy properties from R20m ›› South African focused ›› Maintain low gearing 06
Slide 8: Competitive advantage
Competitive advantage ›› Niche market for acquisitions ›› Low LTV of 23% ›› Cash cover of 6x on A shares ›› Arrowhead strategic and operational support and guidance ›› Dual class A and B structure 07
Slide 9: Risk management
Risk management ›› No single tenant material exposure to income ›› Diversified by sector, geographical location and grading ›› Low gearing and fixed borrowings ›› Realistic forecasting ›› Sound corporate governance 08
Slide 10: Company capital structure
Company CAPITAL STRUCTURE R4,3bn in assets R3,3bn A share B share R47m in issue market cap R400m in issue Preferential dividend Enhanced when growth exceeds 5% Dual class 6x cash cover ratio Growth capped at 5% Benefit from acquisitions share structure 09
Slide 11: Six months actuals versus six months circular (unaudited)
Six months actuals versus six months circular (unaudited) R’000 Actuals six months ended 31 March 2017 Circular six months ended 31 March 2017 Revenue (excluding straight line rental income) 335 950 343 697 Contractual rental 262 182 262 094 Municipal recoveries 73 768 81 603 Property expenses (127
Slide 12: Company debt funding
Company DEBT FUNDING ›› R974m in debt ›› LTV of 22,6% ›› 66,4% of debt fixed ›› Effective interest rate of 9,39% ›› Refinancing of all 2017 expiries on track Debt expiry 2017 R575m 2018 R201m 2019 R198m Total R974m 11
Slide 13: Internalised asset management
Internalised asset management ›› Extract maximum value from core portfolio ›› Micromanage ›› Reduce vacancies ›› Ensure lease expiries, re-letting and renewals are managed with efficiency ›› Cost centres tightly managed ›› Aggressive letting strategies 12
Slide 14: Property portfolio overview
Property portfolio overview 129 R4,3bn 692 511m2 7,65% properties in all diversifed total GLA vacancy nine provinces in SA portfolio value 13
Slide 15: Property portfolio overview continued
Property portfolio overview CONTINUED By GLA By property value 14% Retail 15% Retail 37% Office 54% Office 49% Industrial 31% Industrial 14
Slide 16: Letting and vacancies
Letting and vacancies AS AT 31 MARCH 2017 MARCH 2017 Sector Total (m2) Let (m2) Let (%) Vacant (m2) Vacant (%) Retail 96 433 90 864 94 5 569 5,78 Office 253 793 227 465 90 26 328 10,37 Industrial 342 285 321 218 94 21 067 6,16 Total 692 511 639 547 92 52 964 7,65 Marginal improvement on vacancies of
Slide 17: Average gross rental per sector
Average gross rental per sector Retail R78/m2 Office R104/m2 Industrial R42/m2 16
Slide 18: Renewals and expiries
Renewals and expiries SIX MONTHS ENDED 31 MARCH 2017 ›› 70% of all leases expired ›› Contractual lease escalations: were renewed Retail: 8,2% ›› 57% of the balance was re-tenanted Office: 8,1% Industrial: 8,4% ›› Lease renewal step up escalations: Retail: 7% Office: 4% Industrial: -1% 17
Slide 19: Lease expiry profile
Lease expiry profile AS AT 31 MARCH 2017 Average lease expiry profile of four years as at 31 March 2017. Lease expiry by GLA and income (%) 28 GLA 26 24 Income 22 18 15 15 14 12 12 8 3 3 0 Vacant Monthly 2017 2018 2019 2020 > 2020 18
Slide 20: Acquisitions
Acquisitions ›› Evaluated deals in excess of R4bn ›› Only buy properties that yield above – made offers on more than R2bn cost of funding to ensure dividend of properties growth to shareholders ›› Concluded retail portfolio of R330m ›› Political uncertainty provides in Louis Trichardt at 12% net yie
Slide 21: Gemgrow prospects
Gemgrow prospects 30 SEPTEMBER 2017 ›› Double portfolio in three years ›› Forecast on track as per circular ›› Forecast excludes letting of vacant space and acquisitions ›› R477m acquisitions concluded at 11,85% yield 20
Slide 22: Thank you
Gemgrow Properties Ltd Thank you Registration number: 2007/032604/06 JSE Share code: GPA ISIN: ZAE0000223269 Directors Registered Office Transfer Secretaries Company Secretary Mark Kaplan (CEO) Gemgrow Properties Limited Link Market Services South Neville Toerien (BA LLB) Junaid Limalia (CFO) 2nd Fl