Delta Property Fund Limited · JSE:DLT
Delta Property Fund — H1 2015 Earnings Presentation
31 slides from Delta Property Fund's earnings presentation, October 2014
Slide 1: Delta Property Fund Interim Results for the period ended 31 August 2014
a. ava. DELTA DELTA PROPERTY FUND INTERIM R ESULIS for the period ended 31 August 2014
Slide 2: Proceedings
Proceedings • Introduction Sandile Nomvete • Highlights • Unitholder profile • Financial review Bronwyn Corbett • Consolidated property portfolio • Leasing Trevor Matthews • Capex • Challenges Sandile Nomvete • Prospects 2 88 Field Street, Durban
Slide 3: Introduction
Introduction Liberty Towers, Durban
Slide 4: Introduction to Delta
Introduction to Delta • Black managed REIT • Total property portfolio of R7.2 billion • Maintained Level 2 BEE property charter rating • Secure long term sovereign underpin at an average value per property of R92.1 million • Representation in all 9 provinces • Ratio of government to non-government (
Slide 5: Highlights
Highlights NPA, Western Cape
Slide 6: Highlights for the months under review
Highlights for the 6 months under review • Distribution of 40.01 cents (2013: 32.51 cents) : 23.1% (Aug 2013) • Market capitalisation R3.54 billion (Feb 2014 – R3.39 billion) • R501 million yield enhancing Dollar investment (Delta International) • Portfolio occupancy of 95.3% (2013 – 94.7%) • On tra
Slide 7: Unitholder profile
Unitholder profile As at 31 August 2014 Units held Holding Coronation Fund Managers 93 194 811 20.66% Stanlib Asset Management 80 165 432 17.77% Public Investment Corporation 65 342 494 14.49% Directors and management 39 003 134 8.65% Sanlam Investment Management 24 637 623 5.46% Subtotal 302 343 49
Slide 8: Financial review
Financial review Presidia, Gauteng
Slide 9: Financial Highlights
Financial Highlights • Achieved budgeted distribution • DMTN › Issued R340 million in commercial paper › Average rate achieved on new CP - 6.78% • Renegotiated funding margins • Weighted average cost of funding 8.07% • 70% fixed debt • NAV per linked unit R8.67 • Strategic disposal of Ascension A an
Slide 10: Financial Overview
Financial Overview 31 August 28 February 2014 2014 Distribution per linked unit 40.01 *72.69 Cost to income ratio 26.4% 25.5% Gearing level 48.2% 47.1% Weighted average interest rate 8.07% 7.5% Fixed vs. floating 70 : 30 32 : 68 Average debt fixed period (years) 3.04 3.00 Net asset value per linked
Slide 11: Distributable Income Statement
Distributable Income Statement 31 August 31 August R’000 2014 2013 Net property income 325 590 167 734 Rental income 442 291 218 950 Property operating expenses (116 701) (51 216) Administration expenses (25 213) (15 813) Net finance costs (126 186) (34 024) Share of profit in associate 4 180 - Sund
Slide 12: Group Debt Summary
Group Debt Summary As at 31 Aug 2014 Weighted Ave. Type R'm 1 Interest Rate Revolving Bank Facilities 444 7.85% Floating Bank Facilities 689 7.24% Fixed Bank Facilities 1 672 8.31% DMTN Programme 872 7.13% Total Drawn Facilities 3 677 7.77% Accrued Interest 24 N/A TOTAL 3 702 Swap Contracts 2 872 9.
Slide 13: Group debt maturity profile
Group debt maturity profile 28-Feb-15 28-Feb-16 28-Feb-17 28-Feb-18 28-Feb-19 28-Feb-20 0 50 100 150 200 250 300 350 400 450 500 550 600 650 R’ million DMTN Programme Fixed Bank Facilities Floating Bank Facilities Revolving Bank Facilities Swap Contracts 13
Slide 14: Consolidated property portfolio
Consolidated property portfolio Samora House, Durban
Slide 15: Delta at a glance
Delta at a glance 31 August 2014 31 August 2013 Market capitalisation R3.54 billion R3.0 billion No of properties 78 49 Valuation of portfolio R7.18 billion R4.80 billion Average value per property R92.1 million R98.8 million Gross lettable area 631 898 m² 477 680 m² Sectorial profile Office: 87% Of
Slide 16: Consolidated property portfolio analysis
Consolidated property portfolio analysis SECTORAL PROFILE: GLA GEOGRAPHIC PROFILE: GLA BUILDING GRADE: GLA 7% 31% 6% 7% 79% 5% 28% 4% 8% 4% 1% 0.3% 44% 21% 54% Office: government (54%) Gauteng (44,4%) Kwazulu-Natal (27,9%) Office: other (31%) Limpopo (6,9%) Northern Cape (6,2%) Western Cape (5,3%) M
Slide 17: Consolidated property portfolio analysis: lease expiry rental
Consolidated property portfolio analysis Lease expiry profile: rental Incremental rental income % Cumulative rental income 100 50 100 90 77.61 40 80 64.45 70 30 60 46.34 50 20 40 19.87 30 10 20 10 6.80 13.07 26.47 18.11 13.16 22.39 0 0 28 Feb 15 29 Feb 16 28 Feb 17 28 Feb 18 28 Feb 19 Beyond 2019 In
Slide 18: Consolidated property portfolio analysis: lease expiry GLA
Consolidated property portfolio analysis Lease expiry profile: GLA Incremental GLA % Cumulative GLA 100 50 100 90 40 75.75 80 65.10 70 30 60 45.83 50 20 40 23.33 30 10 11.06 20 10 4.70 6.36 12.27 22.50 19.27 10.65 24.25 0 0 Vacant 28 Feb 15 29 Feb 16 28 Feb 17 28 Feb 18 28 Feb 19 Beyond 2019 Increme
Slide 19: Weighted average rental escalation
Consolidated property portfolio analysis Weighted average rental escalation Rental escalation % 10 9 7.96 8 7 6 8.52 8.04 7.81 7.55 5 Industrial Office: government Office: other Retail Average 19
Slide 20: Weighted average rental
Consolidated property portfolio analysis Weighted average rental Rental (R/m²) 120 100 93.66 80 60 40 20 32.07 108.67 85.94 85.78 0 Industrial Office: government Office: other Retail Overall 20
Slide 21: Leasing
Leasing Hallmark, Gauteng
Slide 22: Leasing
Leasing • Portfolio vacancy at 31 August 2014 - 4.7% (GLA) • Number of properties - 78 • Lease renewals completed between 01/03/2014 and 31/08/2014 - 41 521m² (6.5%) • Lease expiry (GLA) > 28/02/2017 - 54.2% • Lease expiry (rental) > 28/02/2017 - 53.7% • Cell C enquiry for 4 000 m² - negotiations in
Slide 23: Leases Concluded
Leases Concluded Term GLA Historic rate / m² New rate / m² DPW (SAPS) – Manaka House 3 years 1 257 89.24 103.90 DPW (State Attorney) – Umtata* 3 years 540 105.88 90.00 DPW (NPA) - Umtata 3 years 2 540 105.88 90.00 DPW ( Environmental 3 years 152 105.88 90.00 Department) - Umtata SAFCOR Freight – Lib
Slide 24: Capex
Capex Block G, Gauteng
Slide 25: Capex projects in progress
Capex projects in progress SARS RANDBURG : Extra parking: R14.16 Million CMH : Parking Facility Development – R141.787 Million Salient features UPGRADED • Building area: 10 974 m² • Location: Durban CBD • Anchor tenant: CMH boardroom Salient features • Building area: 8 496m² • Location: Randburg • A
Slide 26: Capex projects in progress
Capex projects in progress SARS BELLVILLE, CAPE TOWN NPA – 115 BUITENGRACHT STREET, CAPE TOWN R3 Million R28 Million Salient features • Building area: 10 552 m² • Location: Cape Town CBD • Tenant: Dept. of Justice (NPA) • Current gross rental: R120.96/m² • Lease expiry: 31/03/2023 boardroom Renovati
Slide 27: Capex projects in progress
Capex projects in progress 88 FIELD STREET, DURBAN EMBASSY BUILDING, DURBAN CBD R40 Million R14.5 Million Salient features • Building area: 21 092m² • Location: Durban CBD • Tenants: Multi-tenanted with small retail • Anchor tenant: NPA & Dept. of Water Affairs • Current gross rental: R90/m² boardro
Slide 28: Challenges & Prospects
Challenges & Prospects PWC, Polokwane
Slide 29: Challenges
Challenges Risks / Challenges Mitigants Treasury Directive Delta Level 2BEE status allows the 3 year, 5.5% escalation ability to still renew leases Short term measure to “clean” up PMTE (Property Management Trading External MANCO will become prevalent Entity) in the future Interest Rate Actual fixed
Slide 30: Prospects
Prospects • International roadshow to increase liquidity • Significant distribution growth • Distribution enhancing dollar returns • Delta International • Leverage on BEE status (Parastatal / BEE sensitive tenants) – substantial pipeline • Diversification through future focused specialist investment
Slide 31: Q&A
PROPERTY FUND | Q&A == Annual results