Redefine Properties Limited · JSE:RDF
Redefine Properties — FY2010 Earnings Presentation
44 slides from Redefine Properties's earnings presentation, October 2010
Slide 1: Annual results for the year ended 31 August 2010
Annual results For the year ended 31 August 2010 We have all the ingredients
Slide 2: > RepDerine
> RepDerine PROPERTIE S
Slide 3: Integration, renaming and restructuring
Integration, renaming and restructuring • Merger of Redefine, ApexHi and Madison (July 2009) completed • Company name changed from Redefine Income Fund Limited to Redefine Properties Limited • Process commenced to transfer 397 properties held in Outward Investments, Spearhead, ApexHi and Ambit to th
Slide 4: Before restructuring
Before restructuring Redefine Properties Income FundLimited Redefine Hyprop ApexHi Ciref Spearhead Madison Property Wichford Properties Investments Properties Property Fund Managers Holdings Holdings Ambit Properties Madison Hyprop Portion 68 Portion 65 Terminus Property Fund Management Rivonia Ext
Slide 5: After restructuring
After restructuring Redefine Properties Income FundLimited Redefine Hyprop ApexHi RI Spearhead Madison Property Wichford Properties Investments Properties Ltd Property Fund Managers Holdings Holdings Ambit RI Properties plc Madison Hyprop Portion 68 Portion 65 Terminus Property Fund Management Rivon
Slide 6: Redefine International plc (formerly Ciref Plc)
Redefine International plc (formerly Ciref Plc) • Between December 2009 and January 2010, Redefine increased its holding in Redefine International plc (RI plc) from 28.73% to 70.7% • On 10 August, Redefine disposed of entire holding in RI plc to Redefine Properties International Limited (RI Ltd) for
Slide 7: Hyprop transaction
Hyprop transaction Increased stake in Hyprop from 33.3% to 45.2% at 31 August 2010 • Acquired additional 19.7 million Hyprop units from Coronation Asset Management at R50 per unit – Triggered mandatory offer to remaining Hyprop unitholders at R50 per unit – Additional 926 593 units were acquired, in
Slide 8: In-house property management
In-house property management • Internalised property management – Streamline business processes • Increase service delivery – Direct control over operational management as owner and landlord – Considerable savings in the medium term • Certain upfront ‘set up’ costs have been expensed • Currently, mo
Slide 9: Resources
Resources • People – Pieter Strydom appointed to head property management division – Aaron Suckerman appointed to head the property management finance division – Redefine obliged (s197 Labour Relations Act) to take over 230 Broll staff employed exclusively for the Redefine portfolio (likely to retai
Slide 10: Acquisitions
Acquisitions Purchase Initial GLA price yield Price Property Location Sector m² R000 % R/m² Cornerstone House Crown Mines Office 11 919 182 000 13.1 15 270 82 Maude Street Sandton Office 8 821 127 000 9.0 14 397 45 Pritchard Street Johannesburg Retail 16 867 105 000 10.9 6 225 Linpac Cape Town Indus
Slide 11: 82 Maude Street
82 Maude Street
Slide 12: Cornerstone House
»> Cornerstone House
Slide 13: Disposals
Disposals Number of properties 11 GLA 72 869m² Purchase price R186.8 million Selling price R230.3 million Surplus on purchase price R43.3 million Average yield 5.7%
Slide 14: Disposals
Disposals Premquip Roeland Park 245 Voortrekker
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> RepDerine PROPERTIE S
Slide 16: Property portfolio statistics
Property portfolio statistics Number of GLA % % properties m² Retail 149 38 1 134 844 31 Office 150 38 1 313 899 36 Industrial 86 21 1 070 821 29 Parking garages 1 0 n/a Undivided shares in retail 3 1 55 707 2 Non current assets held for sale 8 2 73 142 2 Total 397 100 3 648 414 100
Slide 17: Number of properties
Number of properties Gross lettable area Number of Office Retail Industrial Total Tenants properties % m² m² m² m² % Single 121 29 253 823 159 345 573 618 986 786 27 Multi 276 71 1 111 901 1 039 103 510 624 2 661 628 73 Total 397 100 1 365 724 1 198 448 1 084 242 3 648 414 100 29% Single tenanted pr
Slide 18: Sectoral spread
Sectoral spread Gross lettable area Gross monthly rental Average rate* m² % R000 % R/m² Office 1 365 724 37 95 888 47 81.06 Retail 1 198 448 33 75 829 38 68.31 Industrial 1 084 242 30 30 079 15 30.85 Total 3 648 414 100 201 796 100 61.75 15% 37% 47% 30% Office Retail Industrial 38% 33% * Calculated
Slide 19: Geographical spread
Geographical spread 3%1% 0% 2%2%0% 3% 57% 3% 3% 57% Gauteng 3% 3% 4% Western Cape 14% KwaZulu-Natal 12% Mpumalanga North West Eastern Cape Limpopo Free State 16% 17% Northern Cape Gross lettable area Gross monthly rental
Slide 20: Sector vacancy
Sector vacancy Current 2010 2009 GLA Vacant area % m² m² % % Office 12.9 1 365 724 180 234 13.2 10.2 Retail 5.5 1 198 448 88 349 7.4 8.3 Industrial 8.8 1 084 242 109 227 10.1 6.5 Total 9.3 3 648 414 377 810 10.4 8.5
Slide 21: Letting activity
Letting activity GLA Vacant area m² m² % Portfolio at 1 September 2009 3 610 050 307 199 8.5 Adjustments to lettable area 49 822 8 255 Acquisitions 61 411 Disposals (72 869) (35 200) Adjusted portfolio 3 648 414 280 254 Increase in vacancy 97 556 Leases expired 1 203 174 Renewals and new lettings (1
Slide 22: Lease expiry profile
Lease expiry profile Office Retail Industrial Total Year to 31 Aug m2 % m2 % m2 % m2 % Monthly 140 356 12 36 072 3 24 379 2 200 807 6 2011 230 371 19 154 363 14 182 153 19 566 887 17 2012 211 127 18 211 939 19 188 234 19 611 300 19 2013 230 213 19 216 311 20 253 468 26 699 992 21 Beyond 373 423 32 4
Slide 23: Arrears
Arrears At 31 Oct 2010 At 31 Aug 2010 At 31 Aug 2009 Arrear rental R31.0 million R39.7-million R36.2-million % of collectables 12.9 14.0 13.7
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> Reperine PROPERTIES
Slide 25: Listed securities portfolio
Listed securities portfolio 2010 2009 Unit Unit Property Units % price Value % price Value fund held held R R000 held R R000 Hyprop 75 937 121 45.7 53.88 3 959 361 33.3 44.00 2 345 183 Ciref - - - - 28.7 6.16 129 777 RI Ltd 304 706 406 77.0 5.69 958 104 - - - Oryx 14 554 269 26.4 10.50 144 851 26.4
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Slide 27: Borrowings (foreign holdings treated as investments)
Borrowings (foreign holdings treated as investments) 2010 2009 R000 R000 Fixed 4 690 4 669 Floating 3 463 651 Borrowings in JVs 252 160 Total 8 405 5 480 Borrowings as % of value of properties and listed securities 35% 26% Weighted average cost of borrowings 9.25% 9.33% % of debt fixed 56%* 87.7% Av
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> Reperine PROPERTIES
Slide 29: Financial highlights
Financial highlights • 17.6% increase in distributions to 66.5 cents per linked unit • Tangible assets R30 billion • Market capitalisation R21.2 billion • Gross revenue from property portfolio 84% (2009:67%) • Property expenses contained at 21% of gross revenue • Total return of 18.7% (2009:13.8%) •
Slide 30: Distributable income statement extract
Distributable income statement extract 2010 2009 R000 R000 Gross revenue 2 970 1 103 Property portfolio 2 491 742 Listed securities 266 308 Property trading 20 39 Fee income 193 14 Property expenses (526) (130) Administration expenses (136) (93) Profit/(loss) from associates 25 (4) Operating profit
Slide 31: Distributions
Distributions Cents per linked Period unit Distribution 1 3 months to end Nov 2009 16.75 Distribution 2 3 months to end Feb 2010 16.75 Distribution 3 3 months to end May 2010 16.00 Distribution 4 3 months to end Aug 2010 17.00 Total 2010 66.50 17.6% Total 2009 56.55
Slide 32: Distribution analysis
Distribution analysis Distributable % of total Distribution income distributable Cents R000 income per unit Net property income (excluding straight-line rental accrual) 1 875 841 70.20 Listed security portfolio 290 697 10.90 Recurring fee income 42 825 1.60 Recurring net income 2 209 363 95 82.70 Ad
Slide 33: Balance sheet extract (foreign holdings treated as investments)
Balance sheet extract (foreign holdings treated as investments) 2010 2009 R000 R000 Direct and listed assets 24 199 20 908 Property portfolio: 81% (2009: 87%) 18 997 18 101 Listed securities: 19% (2009: 13%) 5 202 2 807 Total assets 30 143 25 943 Capital and reserves 14 069 13 200 Interest-bearing l
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> Reperine PROPERTIES
Slide 35: Unitholder profile
Unitholder profile Number of units % Stanlib 190 526 054 7.08 Old Mutual 183 159 095 6.81 Investec 149 706 656 5.56 Government Employees Pension Fund 137 751 394 5.12 Total 661 143 199 24.58
Slide 36: Redefine closing prices
Redefine closing prices High Close 800 802c 799c 780 760 Open 729c 740 720 Low 700 Se Oc N De Ja Fe M Ap M Ju 703c Jul Au p t ov c n b ar r ay n 10 g 09 09 09 09 10 10 10 10 10 10 10
Slide 37: Total return
Total return 2010 2009 Cents Cents per unit per unit Opening price 1 September 2009 729.0 665.00 Closing price 31 August 2010 799.0 729.00 Increase in price 70.0 39.00 Total distribution to 31 August 2010 66.5 56.55 Total return 136.5 95.55 Total return (%) 18.7 13.8
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> Reperine PROPERTIES
Slide 39: Strategy
Strategy • Continue to improve the quality of the portfolio – Diluting in the short term – Reposition for medium to long term growth • Continue offshore investment strategy – take advantage of the strong rand • Improve the cost of debt • Implement programmes to become the landlord of choice – Comple
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> Reperine PROPERTIES
Slide 41: Prospects
Prospects Bitter Sweet • Difficult trading conditions • Hyprop potential • Rental collection • Core portfolio • Tenant failure • Potential acquisitions • Rates / electricity tariffs • Potential fee income • Upper Eastside Hotel • Costs of setting up property management division • Escalations under p
Slide 42: Prospects
Prospects • 2011 likely to be Redefine’s trough year • Of 66.5 cents per unit, core income of 61.5 cents anticipated to grow by approximately 5% • Lumpy income? • Depending on the level of non recurring income earned, we anticipate moderate growth
Slide 43: > Reperine
> Reperine PROPERTIES
Slide 44: > Reperine
> Reperine PROPERTIES