Emira Property Fund Ltd. · JSE:EMI
Emira Property Fund — FY2018 Earnings Presentation
87 slides from Emira Property Fund's earnings presentation, June 2018
Slide 1: Results for the Year Ended 30 June 2018
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2018
Slide 2: Emira Property Fund
EMIRA PROPERTY FUND
Slide 3: Agenda
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 2 AGENDA OVERVIEW FINANCIALS PORTFOLIO INVESTMENT › Key metrics › Distribution › Direct SA portfolio › Capex and disposals › 5-year track record statement performance › Residential › Balance sheet › Enyuka › Funding › Rebalancing › Offshore OU
Slide 4: Geoff Jennett, CEO
GEOFF JENNETT CEO EMIRA PROPERTY FUND
Slide 5: Key Metrics at June 2018
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 4 KEY METRICS AT JUNE 2018 DISTRIBUTIONS NAV PER SHARE VACANCIES TENANT PER SHARE +1.3% 3.4% RETENTION +2.53% to 1 758 85% ACQUISITIONS DISPOSALS CAPEX PROJECTS LTV USD32m R531m R376m 37.9%
Slide 6: 5-Year Track Record
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 5 5-YEAR TRACK RECORD 2 000 150 1 800 145 1 600 1 758 1 400 1 698 1 751 1 735 1 735 747 140 1 200 1 470 1 511 1 386 1 434 135 1 358 1 000 130 800 125 600 120 400 200 115 0 110 JUN 14 JUN 15 JUN 16 JUN 17 JUN 18 NAV (LHS) SHARE PRICE (LHS) DIST
Slide 7: Greg Booyens, CFO
GREG BOOYENS CF 0 EMIRA PROPERTY FUND
Slide 8: Distribution Statement
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 7 DISTRIBUTION STATEMENT R’000 JUN 17 JUN 18 % CH Revenue 1 691 377 1 748 876 3.4 Property expenses (640 297) (643 081) 0.4 Net direct property income 1 051 080 1 105 795 5.2 Gross property expenses to revenue ratio (%) 37.9 36.8 Net property
Slide 9: Distribution Statement continued
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 8 DISTRIBUTION STATEMENT continued R’000 JUN 17 JUN 18 % CH Net operating income b/f 962 224 1 003 286 4.3 Income from investments Enyuka 68 031 74 196 9.1 Growthpoint Australia (GOZ) 58 516 55 035 (5.9) USA – 20 036 >100.0 Net interest cost (
Slide 10: Distribution per Share (cents)
120 130 140 150 160 170 Jun 17 143.18 Treasury (3.9) shares (7.6) Antecedent (3.7) interest Property (11.1) income - Sold Property 8.8 18.3 income - Held Property income - 1.6 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 Development DISTRIBUTION PER SHARE (cents) GOZ income (0.7) Enyuka
Slide 11: Balance Sheet
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 10 BALANCE SHEET R’000 JUN 17 JUN 18 % CH Investment properties 12 559 12 536 (0.2) Investments Enyuka 618 648 4.9 GOZ 901 956 6.1 USA – 458 >100.0 Other assets 532 573 7.7 Total assets 14 610 15 171 3.8 Interest-bearing debt 5 272 5 670 7.5 O
Slide 12: 1.3% Increase in NAV per Share
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 11 NET ASSET VALUE PER SHARE (cents) 1 800 7 6 2 1 758 1 734 27 (8) (2) 76 1 700 74 (8) 1 682 1 660 1 600 1 500 Jun 17 Change in # of Revaluation of Revaluation of Revaluation of Foreign Revaluation of Change in Jun 18 shares properties GOZ En
Slide 13: Debt Funding Mix (Rm)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 12 DEBT FUNDING MIX (Rm) 700 CAPITAL AVAILABLE FACILITY CAPITAL BALANCE 600 500 400 300 200 100 - AUG SEP SEP OCT NOV MAR MAR MAR MAY JUN SEP SEP SEP NOV NOV MAR JUN SEP NOV MAR MAY MAY SEP JUN JUN JUN 18 18 18 18 18 19 19 19 19 19 19 19 19 19
Slide 14: Interest-Rate Hedging Profile
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 13 INTEREST-RATE HEDGING PROFILE (Rm) 1 200 1 000 800 600 400 200 - DEC 18 JUN 19 DEC 19 JUN 20 DEC 20 JUN 21 DEC 21 JUN 22 DEC 22 JUN 23 JUN 24 DEC 24 Weighted average Weighted average Hedged debt duration to expiry all in interest rate 93.3%
Slide 15: Ulana van Biljon, COO
ULANA VAN BILJON C00 EMIRA PROPERTY FUND
Slide 16: Directly Held Property Portfolio Summary
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 15 DIRECTLY HELD PROPERTY PORTFOLIO SUMMARY NUMBER OF PROPERTIES 200 150 161 149 146 145 100 141 144 135 104 50 0 2011 2012 2013 2014 2015 2016 2017 2018 NUMBER OF PROPERTIES PER SECTOR – 2017 VS 2018 60 40 52 44 44 39 20 22 21 17 0 0 OFFICE U
Slide 17: Directly Held Property Portfolio Summary
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 16 DIRECTLY HELD PROPERTY PORTFOLIO SUMMARY 2017 VALUE SPLIT PER SECTOR (%) R12.9bn 2018 VALUE SPLIT PER SECTOR (%) R12.5bn (incl. The Bolton) 1 15 15 5 41 OFFICES 41 URBAN RETAIL RURAL RETAIL INDUSTRIAL 39 43 RESIDENTIAL 2017 GLA SPLIT PER SE
Slide 18: Directly Held Property Portfolio Summary
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 17 DIRECTLY HELD PROPERTY PORTFOLIO SUMMARY AVERAGE VALUE PER m² +7% R/m² +9.1% 20 000 14 818 16 187 15 570 16 392 15 000 11 433 12 474 10 000 7 778 5 271 5 464 5 000 0 0 OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL 2017 2018 AVERAGE VALU
Slide 19: Office Sector Exposure – Quality Improvement
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 18 OFFICE SECTOR EXPOSURE – QUALITY IMPROVEMENT NUMBER OF PROPERTIES AVERAGE VALUE PER PROPERTY (Rm) 44 52 2011 2018 73 117 GRADE OF OFFICE PORTFOLIO (%) 2011 GRADE OF OFFICE PORTFOLIO (%) 2018 2 12 P-GRADE A-GRADE 37 B-GRADE 38 C-GRADE 61 50
Slide 20: Vacancy Profile by GLA (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 19 VACANCY PROFILE BY GLA (%) 18% 16% 14% 12.5% 12% 10.5% 10% 8% 7.1% 5.3% 5.7% 6% 2.7% 3.1% 3.4% 4% 2.0% 2.4% 1.7% 2% 1.3% 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL (SAPOA 11.1%) (SAPOA 4.1%) (SAPOA 3.3%) June 2018 March 2018 December 2017 JUN
Slide 21: Tenant Retention
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 20 TENANT RETENTION (%) 100% 80% 85% 84% 60% 77% 72% 75% 77% 74% 75% 68% 40% 20% 0% GROSS RENTALS m² NO. OF LEASES JUN 16 JUN 17 JUN 18 Expiries of 206 801m² equals 567 leases or R22.7m gross rentals per month
Slide 22: Major Lease Expiries by Gross Rental: FY18
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 21 10 MAJOR LEASE EXPIRIES BY GROSS RENTAL: FY18 PROPERTY TENANT LEASE END GLA (m²) STATUS 12 Baker Street/ Vacated Sasol Aug 17 10 239 2 Sturdee Avenue (Residential Conversion – The Bolton) Trans Caledon Tuinhof Dec 17 3 757 Renewed – 1 year
Slide 23: Lease Expiry Profile by GLA (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 22 LEASE EXPIRY PROFILE BY GLA (%) 40% Hundreds 34.8 35% 30.5 31.2 30% 27.1 25.4 25% 21.2 20.4 21.1 20.4 20% 16.7 16.5 15.7 15% 10% 5.3 5.7 5% 3.4 0.9 0.3 .08 1.0 1.2 0.5 0% VACANCY VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/6/18
Slide 24: Reversions – Total (Gross Rentals)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 23 REVERSIONS – TOTAL (GROSS RENTALS) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL (DECREASE) % Office 73 727 136.55 132.46 -3.0 Urban retail 42 657 146.20 144.17 -1.4 Industrial 99 921 56.32 56.04 -0.5 Total Jun 18 216 305 1
Slide 25: Year-on-Year Like-for-Like Growth in Net Income
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 24 YEAR-ON-YEAR LIKE-FOR-LIKE GROWTH IN NET INCOME (static portfolio) 12% 10.6% 10% 7.8% 8.3% 8.2% 8% 7.5% 6.6% 6% 4.4% 4% 2.8% 2% 0% -2% -0.5% GROSS INCOME EXPENSES NET INCOME JUN 16 JUN 17 JUN 18 GROSS INCOME EXPENSES Filling of vacancies We
Slide 26: Retail Trading Statistics
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 25 RETAIL TRADING STATISTICS TRADING DENSITY GROWTH SPEND PER HEAD GROWTH FOOT COUNT GROWTH +2.2% +2.0% -0.2%
Slide 27: Major Lease Expiries by Gross Rental: FY19
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 26 10 MAJOR LEASE EXPIRIES BY GROSS RENTAL: FY19 PROPERTY TENANT LEASE END GLA (m²) STATUS RTT Acsa Park RTT Group Dec 18 46 673 Renewed – 2 years Expecting to renew – Tuinhof Trans Caledon Tunnel Dec 18 3 757 3 years Expecting to renew – Corp
Slide 28: Carbon Footprint – Science-Based Target
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 27 CARBON FOOTPRINT – SCIENCE-BASED TARGET › Emira has become the first African and South African company to have their carbon emission reduction targets validated by the Science Based Targets initiative (SBTi). › These targets are in line wit
Slide 29: In Conclusion
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 28 IN CONCLUSION Solid portfolio results despite local property fundamentals under pressure
Slide 30: Emira Property Fund
EMIRA PROPERTY FUND
Slide 31: Knightsbridge – P Grade, Bryanston
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 31 KNIGHTSBRIDGE – P GRADE BRYANSTON PROJECT COST COMPLETION GLA 15 481m2 R466m Aug 2018 › Vacancy GLA 540m2 › Balance only if majority pre-let › Potential GLA 31 584m2 and investment return
Slide 32: Rosebank Residential to Rent
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 33 ROSEBANK RESIDENTIAL TO RENT › 280 units, focus on LSM 7 – 8 › On track for Jan 19 handover › Interim letting begun › 75% co-ownership with Feenstra › Total value expected >R200m › Yield >10.5%
Slide 33: Capex Projects in Progress
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 35 CAPEX PROJECTS IN PROGRESS SPEND TO DATE (Rm) VALUE (Rm) COMPLETION Knightsbridge – Phase 2 107.9 122.9 Aug 18 The Bolton (12 Baker Street + 2 Sturdee Avenue) 154.1 201.7 Jan 19 Total 262.0 324.6 Yield on completion of Yield on a further si
Slide 34: Enyuka
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 36 ENYUKA 15 original assets 7 new assets On track for >R1.2bn R640m acquired R431m assets target
Slide 35: Enyuka – Lower LSM Retail
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 37 ENYUKA – LOWER LSM RETAIL › Vacancy 5.0% › LFL growth 7.3% › WALE 2.7 years
Slide 36: Disposals: FY18
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 38 DISPOSALS: FY18 7 Office Total sales price Forward yield 5 Industrial R530.6m 8.3% 1 Retail Premium 14.8%
Slide 37: Other Disposals
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 39 OTHER DISPOSALS › Sale of 2.5m GOZ shares at AUD3.60 (ave cost AUD1.97) › Held for sale R1.9bn » 25 office assets » R1.8bn » Planned portfolio sale
Slide 38: Rebalancing (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 40 REBALANCING (%) JUN 17 JUN 18 GOZ 6.4 GOZ 6.6 10% US 0 US 3.1 OFFICE 38.7 OFFICE 35.7 URBAN RETAIL 36.3 URBAN RETAIL 36.3 INDUSTRIAL 13.4 INDUSTRIAL 13.1 86% RESIDENTIAL 0.6 RESIDENTIAL 1.1 LAND 0.3 LAND 0.3 RURAL RETAIL (ENYUKA) 4.4 RURAL
Slide 39: Emira Launches USA Investment Strategy
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 41 OFFSHORE EMIRA LAUNCHES USA INVESTMENT STRATEGY
Slide 40: Offshore Investment
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 42 OFFSHORE INVESTMENT FY17 FY18 FY19 Pre USA Post USA Diversification of assets 0.6% DPS improvement Better ZAR returns, and tenant income in FY18 locked-in growth rates
Slide 41: USA – Macro
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 43 USA – MACRO Economic Growth to Accelerate US Retail Vacancy vs Construction GDP Growth Consumer Confidence Completions Vacancy Rate Completions (Sq. Ft. Millions) Consumer Confidence Index Quarterly Growth Rate Vacancy Rate USA – largest ec
Slide 42: USA – Consumer Environment
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 44 USA – CONSUMER ENVIRONMENT Retail Sales Benefiting from Tight Job Market E-Commerce only a part of Total Retail Sales Y-o-Y Core Retail Unemployment Rate E-Commerce Sales Rest of Core Retail Sales Sales Growth Total Sales (Billions) Rate St
Slide 43: Grocery Anchored Dominant Power Centres
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 45 GROCERY ANCHORED DOMINANT POWER CENTRES
Slide 44: Creditworthy, Value Orientated Tenant Line-ups
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 46 CREDITWORTHY, VALUE ORIENTATED TENANT LINE-UPS
Slide 45: Emira Co-Investment Model
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 47 EMIRA CO-INVESTMENT MODEL Rainier Group Dallas, Texas-based Further of companies partner/investor >USD1bn of assets Stark Enterprises under management
Slide 46: US Geographical Exposure
EMIRA PROPERTY FUND RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2017 48 US GEOGRAPHICAL EXPOSURE US States currently invested in PA OH US States with IN identified pipeline Future US states GA TX FL CURRENTLY HELD PIPELINE BELDEN PARK CROSSING, OHIO 1 ASSET IN OHIO 32 EAST, OHIO 1 ASSET IN PENNSYLVANI
Slide 47: US Portfolio at a Glance
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 49 US PORTFOLIO AT A GLANCE Number of Property Average value Total equity properties portfolio value per ft² investment 4 USD199.5m USD158.68/ft2 USD32.3m
Slide 48: US Portfolio at a Glance
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 50 US PORTFOLIO AT A GLANCE Vacancy Average rent Weighted average GLA by GLA per ft² lease expiry 1 257 531 ft2 4.01% USD13.40 p.a. 4.94 years
Slide 49: Stony Creek – Noblesville, Indiana
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 51 STONY CREEK – NOBLESVILLE, INDIANA (28 MAR 2018) Purchase Emira Cash-on-cash price GLA Occupancy investment return USD32.8m (100%) 204 811 ft2 98.1% USD6.5m USD 11.74% (49.4% equity stake) Yield Site extent WALE 8.6% 1 400 454 ft2 3.81 year
Slide 50: FY18 Strategic Plans
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 53 FY18 STRATEGIC PLANS › Rebalancing » reduce offices ✓ » increase offshore ✓ » start residential ✓ › Metrics » reduce vacancies ✓ » return to positive growth ✓
Slide 51: FY19 Outlook
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 54 FY19 OUTLOOK › Solid progress › Underpin of quality assets and strong team › Outlook for FY19 » Expect DPS growth of greater than the positive growth for FY18 » Subject to macro events and forecasts
Slide 52: Thank You
EMIRA PROPERTY FUND THANK YOU
Slide 53: Annexures
EMIRA PROPERTY FUND ANNEXURES
Slide 54: Debt Mix Analysis
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 57 DEBT MIX ANALYSIS CURRENCY ZAR AUD USD TOTAL Income producing assets 13 257 956 458 14 671 Total facilities (Rm) 6 239 6 239 Reclassified as foreign debt through CCIRS (Rm) (1 332) 889 443 – Adjusted total facilities (Rm) 4 907 889 443 6 23
Slide 55: Debt Covenants
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 58 DEBT COVENANTS TRANSACTION TRANSACTION TRANSACTION CORPORATE CORPORATE CORPORATE CORPORATE VALUE OF FACILITY FACILITY LTV LTV LTV LTV LTV ICR ICR PROPERTIES AVAILABLE DRAWN COVENANT ACTUAL ACTUAL COVENANT ACTUAL* COVENANT ACTUAL (DRAWN) (AV
Slide 56: Foreign Income: Weighted Average Hedged Rate
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 59 FOREIGN INCOME: WEIGHTED AVERAGE HEDGED RATE PER REPORTING PERIOD Forward rate against ZAR: GOZ USA AUD USD Dec 18 R10.83 R13.12 Jun 19 R11.09 R13.46 Dec 19 R11.31 R13.83 Jun 20 R11.60 R14.28 Dec 20 R11.07 R14.64 Jun 21 R11.56 R14.95 Dec 21
Slide 57: Cost-to-Income Ratio (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 60 COST-TO-INCOME RATIO (%) 40% 35% 37.2% 36.8% 35.3% 30% 25% 20% 15% 15.7% 15.3% 15.5% 10% 5% 0% GROSS NET JUN 16 JUN 17 JUN 18 * June 2017 includes the consolidation of Enyuka.
Slide 58: Property Expense Analysis (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 61 PROPERTY EXPENSE ANALYSIS (%) MUNICIPAL CHARGES 70 67 SECURITY EXPENSES 8 8 SERVICE CONTRACTS 6 6 RENT AND LEVIES PAID 4 4 MAINTENANCE 4 4 BAD DEBTS 3 3 LEASING EXPENSES 2 5 STAFF EXPENSES 1 1 MARKETING EXPENSES 1 0 CONSUMABLES 1 1 ADMINIST
Slide 59: Valuation Parameters
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 62 VALUATION PARAMETERS JUN 2017 JUN 2018 Direct property portfolio Valuation (Rm) # 13 256 12 536 % of the portfolio valued externally * 31 33 Average value per property (Rm) ## 98 118 Average discount rate (%) ** 15.1 14.3 Average exit capit
Slide 60: Geographic Spread by No. of Buildings
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 63 GEOGRAPHIC SPREAD BY NO. OF BUILDINGS: 2017 vs 2018 60 50 50 44 40 31 30 22 23 20 20 17 16 10 6 3 3 2 0 1 0 JOHANNESBURG PRETORIA WESTERN CAPE EASTERN CAPE KWAZULU-NATAL BLOEMFONTEIN MPUMALANGA JUN 17 JUN 18
Slide 61: Geographic Spread by Value
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 64 GEOGRAPHIC SPREAD BY VALUE GEOGRAPHICAL SPREAD BY VALUE (%) 2017 GEOGRAPHICAL SPREAD BY VALUE (%) 2018 22 21 2 JOHANNESBURG 8 11 29 PRETORIA 33 13 WESTERN CAPE 13 EASTERN CAPE KWAZULU-NATAL BLOEMFONTEIN MPUMALANGA 43 41 GEOGRAPHICAL SPREAD
Slide 62: Focus on A- and P-Grade Properties
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 65 OFFICE SECTOR EXPOSURE (%) 35 40 30 35 37 25 30 30 25 20 2011 20 15 2018 15 10 17 10 5 5 5 0 0 2011 2018 2011 2018 B-GRADE % OF TOTAL A- AND P-GRADE % OF TOTAL EMIRA PORFOLIO EMIRA PORTFOLIO FOCUS ON A- AND P-GRADE PROPERTIES
Slide 63: Vacancy Profile by Sector and Grade by GLA
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 66 VACANCY PROFILE BY SECTOR AND GRADE BY GLA (%) 16% Hundreds 15.0 14% 12.8 12.4 12% 10% 8.6 8% 7.7 6.7 6% 5.7 5.3 4% 3.4 3.1 2.7 2.4 2.0 2% 1.7 1.3 0% PRIME + OFFICE A OFFICE B URBAN RETAIL INDUSTRIAL TOTAL JUN 16 JUN 17 JUN 18
Slide 64: Value of the Vacancy by Gross Rental
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 67 VALUE OF THE VACANCY BY GROSS RENTAL (%) 12% Hundreds 11.2 10% 9.3 8% 6.0 6.1 6% 5.3 4% 3.1 3.3 2.5 2.0 2% 1.5 1.6 1.4 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 16 JUN 17 JUN 18
Slide 65: Vacancy by Sector by Gross Rental and Grade
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 68 VACANCY BY SECTOR BY GROSS RENTAL AND GRADE (%) 18% 16% 14% 12.2 12.2 12% 10.9 10% 7.9 8% 6.8 6.1 6% 5.3 4% 3.1 3.3 2.5 1.9 2.0 2% 1.5 1.6 1.4 0% PRIME + OFFICE A OFFICE B URBAN RETAIL INDUSTRIAL TOTAL JUN 16 JUN 17 JUN 18
Slide 66: Major Lease Expiries by GLA: FY18
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 69 10 MAJOR LEASE EXPIRIES BY GLA: FY18 PROPERTY TENANT LEASE END GLA (M²) STATUS RTT Continental RTT Group Dec 17 12 921 Renewed – 3 years 12 Baker Street/ Vacated (Residential Sasol Aug 17 10 239 conversion – The Bolton) 2 Sturdee Avenue Cam
Slide 67: Lease Expiry Profile – Offices by GLA
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 70 LEASE EXPIRY PROFILE – OFFICES BY GLA (%) 35% Hundreds 30.3 30% 27.8 26.9 24.9 25% 23.6 22.8 22.6 21.9 20% 18.4 16.9 16.4 14.8 15% 12.5 10.5 10% 7.1 5% 1.4 0.3 0.4 0.5 0.0 0.0 0% VACANCY VACATED EXPIRIES YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/6/1
Slide 68: Lease Expiry Profile – Urban Retail by GLA
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 71 LEASE EXPIRY PROFILE – URBAN RETAIL BY GLA (%) 60% Hundreds 51.5 52.6 49.3 50% 40% 30% 20% 16.3 15.9 15.6 15.7 15.1 12.8 13.6 13.3 13.3 10% 2.7 3.1 2.0 1.8 1.9 1.7 0.2 0.4 1.1 0% VACANCY VACATED EXPIRIES YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/6/1
Slide 69: Lease Expiry Profile – Industrial by GLA
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 72 LEASE EXPIRY PROFILE – INDUSTRIAL BY GLA (%) 45% Hundreds 39.6 40% 35% 32.5 32.1 30.5 30% 26.4 24.5 25% 21.7 20% 19.0 18.9 17.2 15.4 14.5 15% 10% 5% 2.4 1.7 1.3 0.5 0.4 1.0 0.2 0.0 0.0 0% VACANCY VACATED EXPIRIES YEAR 1 YEAR 2 YEAR 3 YEAR 4
Slide 70: Reversions Renewals (Gross Rentals)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 73 REVERSIONS RENEWALS (GROSS RENTALS) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL DECREASE % Office 58 944 139.70 134.17 -4.0 Urban retail 37 899 144.70 142.27 -1.7 Industrial 66 652 59.00 59.32 0.5 Total Jun 18 163 495 108
Slide 71: Reversions New Leases (Gross Rentals)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 74 REVERSIONS NEW LEASES (GROSS RENTALS) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL DECREASE % Office 14 783 124.03 125.62 1.3 Urban retail 4 061 149.12 154.75 3.8 Industrial 33 269 50.95 79.26 -1.4 Total Jun 18 52 113 80.3
Slide 72: Properties Excluded from Like-for-Like
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 75 PROPERTIES EXCLUDED FROM LIKE-FOR-LIKE The following are excluded from FY18 numbers: Purchases › 1 West land, Discovery land, Quagga land Disposals › Brandwag & Kosmos flats, 1289 Heuwel Avenue, 284 Oak Avenue, Southern Life Plaza, Cochrane
Slide 73: Year-on-Year Like-for-Like Growth in Net Income by Sector
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 76 YEAR-ON-YEAR LIKE-FOR-LIKE GROWTH IN NET INCOME (static portfolio) (%) 26% 21.9% 22% 18% 13.9% 14% 10.6% 9.8% 10% 8.5% 8.1% 7.8% 8.2% 7.5% 5.3% 6% 2% 0.3% -2% -0.7% -6% -10% OFFICES URBAN RETAIL INDUSTRIAL TOTAL GROSS INCOME EXPENSES NET IN
Slide 74: Leases Concluded: Emira Portfolio FY18
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 77 LEASES CONCLUDED: EMIRA PORTFOLIO FY18 NEW RENEWAL TOTAL Number of leases 224 341 565 Total m² 81 137 163 210 244 346 Average duration (years) 3.2 2.6 2.8 Leave value (Rm) 466.0 725.1 1 191.1 The weighted average duration for the total port
Slide 75: Escalations (%)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 78 ESCALATIONS (%) 8.4% Hundreds 8.2 8.2% 8.1 8.0% 7.9 7.8 7.8% 7.7 7.7 7.6 7.6 7.6% 7.5 7.5 7.5 7.4% 7.3 7.2% 7.0% 6.8% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 16 JUN 17 JUN 18
Slide 76: Emira Net Rentals
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 79 EMIRA NET RENTALS (excl. parking stores and vacancies) NO. OF OCCUPIED AVG. NET RENTAL SECTOR BUILDINGS GLA (m²) (R/m²) Office: P-Grade 5 53 357 169.72 Office: A-Grade 29 165 792 130.22 Office: B-Grade 10 59 305 106.06 Urban retail 21 315 7
Slide 77: Major Lease Expiries by GLA: FY19
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 80 10 MAJOR LEASE EXPIRIES BY GLA: FY19 PROPERTY TENANT LEASE END GLA (m²) STATUS RTT Acsa Park RTT Group Dec 18 46 673 Renewed – 3 years Defy Defy Sep 18 9 729 Expecting to vacate Trellidor Trellidor Sep 18 7 794 Renewed – 3 years 14-16 Bosto
Slide 78: Tenant Grading
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 81 TENANT GRADING TOTAL PORTFOLIO (%) PER SECTOR (%) 80% 71 Hundreds 19 70% 59 60% 53 52 50% 40% A B C 27 28 30% 22 59 21 17 19 22 19 20% 12 10% 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL GRADING “A” Large national tenants, large listed tenants,
Slide 79: Tenant Exposure by GLA
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 82 TENANT EXPOSURE BY GLA TOP 10 TENANTS OF THE TOTAL PORTFOLIO (%) TENANT EXPOSURE – TOP TEN TENANTS (%) RTT GROUP 6.0 PICK N PAY 4.7 MASSMART 2.7 SHOPRITE CHECKERS 1.8 77 23 WOOLWORTHS 1.4 DEVLAND 1.4 STAR 1.3 LITTLE GREEN BEVERAGES 1.2 DEPT
Slide 80: Tenant Exposure by Gross Rental
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 83 TENANT EXPOSURE BY GROSS RENTAL TOP 10 TENANTS OF THE TOTAL PORTFOLIO (%) TENANT EXPOSURE – TOP 10 TENANTS (%) MASSMART 3.7 PICK N PAY 3.4 RTT GROUP 3.2 STAR 2.1 79 KING PRICE INSURANCE 1.8 21 SA LOCAL GOVERNMENT 1.5 SHOPRITE CHECKERS 1.4 E
Slide 81: Potential New Capex Projects – Not Committed
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 84 POTENTIAL NEW CAPEX PROJECTS – NOT COMMITTED MAJOR PROJECTS VALUE CONSTRUCTION BEING CONSIDERED TYPE m² (R) TIME 1 West – additional parking Parking space/future mixed use n/a 950 000 2 months Menlyn Corporate Park Office (Atrium) n/a 9 200
Slide 82: Sustainability Planning
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 85 SUSTAINABILITY PLANNING CLEAN ENERGY PRODUCTION WATER EFFICIENCY CARBON FOOTPRINT REPORTING › The portfolio has three complete solar PV › Water harvesting continues to be the focus › We are the first company in Africa to set farm projects:
Slide 83: Disposals
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 86 DISPOSALS SALE GLA BOOK VALUE PRICE EXIT YIELD EFFECTIVE PROPERTY LOCATION SECTOR (m2) (Rm) (Rm) (%) DATE Convention House Durban Office 6 249 45.0 44.0 11.7 Oct 17 4 Kikuyu Road Johannesburg Office 4 608 27.2 28.0 6.9 Oct 17 Harbour Place
Slide 84: Top Ten Properties by Value
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 87 TOP TEN PROPERTIES BY VALUE PROPERTY NODE CLASSIFICATION GLA (m2) MAJOR TENANTS Wonderpark Pretoria Regional 90 916 Pick n Pay (12 867m²), Game (5 292m²), Checkers (4 893m²), Shopping Centre North Shopping centre Woolworths (4 642m²), Edgar
Slide 85: Enyuka
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 88 ENYUKA JUN 17 JUN 18 Number of properties 17 22 Property portfolio value R696m R1 071m Average value per m² R7 775 R8 891 Average value per property R41m R49m LTV (excluding shareholder loans) 8.0% 33.5% Vacancy profile by GLA 3.6% 5.0% Ten
Slide 86: US Portfolio
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 89 US PORTFOLIO PROPERTY Belden 32 East Moore Plaza Stony Creek Total Park Crossing ACQUISITION DATE 17 Oct 2017 19 Jan 2018 18 Jan 2018 28 Mar 2018 – LOCATION North Canton, Cincinnati, Ohio Corpus Christi, Noblesville, – Ohio Texas Indiana PU
Slide 87: Forward-Looking Statements
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2018 90 FORWARD-LOOKING STATEMENTS This results presentation contains certain forward-looking statements relating to the financial performance and position of the Group. All forward-looking statements are solely based on the views and consideration