Slide 1: Provisional Summarised Consolidated Annual Financial Statements
20 23 PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2023 PRESENTATION: 22 MAY 2022
Slide 2: Table of Contents
Contents Table of Contents 01. INTRODUCTION AND ENVIRONMENTAL UPDATE FY2023 CORPORATE PERFORMANCE 02. AND SHARE REPURCHASE UPDATE 03. FY2023 SALIENT DETAILS 04. FY2023 FINANCIAL PERFORMANCE 05. PORTFOLIO OVERVIEW 06. ACQUISITIONS, DEVELOPMENTS, DISPOSAL AND VALUATIONS 07. ESG 08. OUTLOOK 09. GUIDANC
Slide 3: Introduction and Environmental Update
01 Introduction and Environmental Update PRESENTERS: Quintin Rossi Christiaan Barnard Kim Pfaff-Karg CEO CFO CIO PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 3
Slide 4: Environmental Update
01. Introduction and Environmental Update Environmental Update The Mission To be the leading Western Cape-focused REIT and to consistently grow our distribution per share ahead of inflation FY2023 Operating environment – Light in the darkness and to operarate within the top quartile of our peer grou
Slide 5: Spear Operational Update
01. Introduction and Environmental Update Spear Operational Update FY2023 Operational update FY2023 Operational focus area Current status Commercial Commercial vacancy exposure mitigation Uptick in letting enquiries continues Vacancy creep mitigation Vacancy Increase in portfolio letting activity =
Slide 6: FY2023 Corporate Performance and Share Repurchase Update
02 FY2023 Corporate Performance and Share Repurchase Update PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 6
Slide 7: Spear Total Return FY2023
02. FY2023 Corporate Performance and Share Repurchase Update Spear Total Return FY2023 244.8m 53.9m 120 115 Share performance based to 100 110 111% GROSS NUMBER VOLUME TRADED 107% 105 OF SHARES DURING PERIOD 102% ISSUED 100 95 95% 90 22% R413m 85 80 75 RATIO OF VOLUME RAND VALUE TRADED TO TRADED DUR
Slide 8: Share Repurchase Programme
02. FY2023 Corporate Performance and Share Repurchase Update Share Repurchase Programme FY2024 YTD repurchases2 FY2023 purchases1 1 286 062 20.1m 8.20% 20 20 067 234 9 224 592 18 (857 933) 18 781 172 TREASURY OF TOTAL FY2023 SHARES SHARES 16 CSP issue 14 12 ±50% 1 CPS Shares ('000 000) 10 10 414 513
Slide 9: FY2023 Salient Details
03 FY2023 Salient Details PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 9
Slide 10: Portfolio Snapshot
03. FY2023 Salient Details Portfolio Snapshot 28 ASSETS NUMBER OF PROPERTIES R4.22BN (-5.85%) R148.7M R10 162/M2 PORTFOLIO PORTFOLIO AVERAGE AVERAGE PROPERTY VALUE VALUE DECREASE PROPERTY VALUE VALUATION (FY2022)* 7.4% LETTING AVERAGE IN-FORCE ESCALATIONS 409 868M2 92.18% 27 MONTHS R98.17/M2/PM GLA
Slide 11: Financial Snapshot
03. FY2023 Salient Details Financial Snapshot 82.14 DISTRIBUTION 38.84 CENTS DIPS CENTS 75.97 92.45% 43.45% 6.50% FINAL DPS FY2023 DPS CENTS FY2023 AVERAGE SA REIT COST-TO- SA REIT ADMIN FY2023 PAYOUT RATIO INCOME RATIO COST-TO-INCOME R11.47 TANGIBLE NET ASSET VALUE (TNAV) 11.31% 1.50% INCREASE R11.
Slide 12: Total Collections
03. FY2023 Salient Details Total Collections (as at 5 April 2023) 99% 96% R574 388 R566 413 98.61% BILLED (R'000) COLLECTED (R'000) COLLECTED TO BILLED FY2023 collected vs billed per Collections include billings for February 2023 sector Collections have been in line with management’s forecast 100% 9
Slide 13: FY2023 Financial Performance
04 FY2023 Financial Performance PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 13
Slide 14: Consolidated Statement of Comprehensive Income
04. FY2023 Financial Performance Consolidated Statement of Comprehensive Income AUDITED GROUP AUDITED YEAR ENDED YEAR ENDED for the year ended 28 February 2023 FEBRUARY 2023 FEBRUARY 2022 R’000 R’000 Spear REIT Limited Group Contractual rental income Tenant recoveries 427 085 146 002 413 574 140 754
Slide 15: Reconciliation Between Earnings and Distributable Earnings
04. FY2023 Financial Performance FY2023 Reconciliation Between Earnings and Distributable Earnings for the year ended 28 February 2023 YEAR ENDED FEBRUARY 2023 Reconciliation of FFO to SA REIT FUNDS FROM OPERATIONS (SA REIT FFO) PER SHARE R’000 distributable company FFO Profit or loss per IFRS State
Slide 16: Consolidated Statement of Financial Position
04. FY2023 Financial Performance Consolidated Statement of Financial Position YEAR ENDED GROUP YEAR ENDED FEBRUARY 2023 FEBRUARY 2022 as at 28 February 2023 R’000 R’000 ASSETS Non-current assets 3 795 087 4 413 384 Current assets 461 621 117 089 Spear REIT Limited Group TOTAL ASSETS 4 256 708 4 530
Slide 17: TNAV Bridge
04. FY2023 Financial Performance TNAV Bridge Profit for the year (excl. fair value Acquisition IFRS 2 14 adjustment) of Treasury expense for R0.82 shares future CSP R11.47 12 R11.30 R0.12 R0.03 R11.08 (R0.74) (R0.01) (R0.05) (R0.39) 10 Distributions Fair value Issue of paid adjustment Treasury FY202
Slide 18: Funding Maturity
04. FY2023 Financial Performance Funding Maturity 36.30% 8.60% FUNDERS AVERAGE COST OF 134 bps FUNDING Group net debt profile as at 28 February 2023 LOAN-TO-VALUE FORWARD-LOOKING HEDGE PROFILE 70% 66.95% 48% FY2026 60% 53.61% 50.71% 50.63% 14% Debt expiry 50% 45.51% Total net debt Fixed debt Variabl
Slide 19: Balance Sheet and Funding Update
04. FY2023 Financial Performance Balance Sheet and Funding Update R270M SUSTAINABILITY- LINKED BOND R230M LIQUIDITY IMPROVED AVAILABILITY COVENANTS FEBRUARY 2023 MARGIN R455M 36.30% R299M LTV 50% DEBT DEBT REFINANCED SETTLED 2.00 2.51 ICR TIMES TIMES SABLE SQUARE SHOPPING CENTRE, MILNERTON PROVISION
Slide 20: Balance Sheet and Funding Update: SA REIT LTV
04. FY2023 Financial Performance Balance Sheet and Funding Update SA REIT LTV 50 1.99% 2.68% FY2023 final 45 The Island dividend 40 acquisition 0.34% 0.13% 36.30% GAT Phase 1 GAT Phase 2 36.16% 35 (-5.28%) 30 Percentage Liberty Life Building 25 disposal 20 15 10 05 0 SA REIT LTV 12 at Feb 2023 month
Slide 21: Portfolio Overview
05 Portfolio Overview PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 21
Slide 22: Top 5 Properties by Value
05. Portfolio Overview R2.1BN 177 824M2 43.39% Top 5 Properties by Value TOTAL VALUE TOTAL GLA PORTFOLIO GLA Sable Square Mega Park Shopping Centre 2 Long Street Liberty Life Building Northgate Park BELLVILLE MILNERTON CAPE TOWN CENTURY CITY BROOKLYN VALUE INCL. LEASE ASSET (R’000) VALUE INCL. LEASE
Slide 23: Sectoral Split by Value, Revenue and GLA
05. Portfolio Overview Sectoral Split by Value, Revenue and GLA 32% 17% 9 16% 32% 6 R4.22bn 28 R574m 5% 1% 47% 50% 13 Value of properties Number of properties Property revenue (excluding smoothing) 96% 84% 56% 92% 409 868m 2 12% 96% 32% Property occupancy (%) Gross lettable area (m2) COMMERCIAL INDU
Slide 24: Sectoral Split: Industrial
05. Portfolio Overview Sectoral Split by Sector Industrial 45% R1 329m 55% 46% 229 538m 2 54% 100% 96% 93% 44% R183 742 56% Property value Gross lettable area (m2) Property occupancy (%) Property revenue (R'000) LOGISTICS MANUFACTURING PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Slide 25: Sectoral Split: Commercial
05. Portfolio Overview Sectoral Split by Sector Commercial 7% 9% 100% 35% 92% 11% 35% 36% 17% R2 127m 131 379m 84% 17% 2 R270 986 18% 87% 60% 5% 7% 3% 22% 20% 77% 12% 76% 20% 12% 14% Property value Gross lettable area (m2) Property occupancy (%) Property revenue (R'000) CBD TYGER VALLEY PAROW CENTUR
Slide 26: Sectoral Split: Retail
05. Portfolio Overview Sectoral Split by Sector Retail 80% R708m 20% 60% 48 951m 2 40% 95% 96% 96% 82% R91 299 18% Property value Gross lettable area (m2) Property occupancy (%) Property revenue (R'000) CONVENIENCE RETAIL DESTINATION RETAIL PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEM
Slide 27: FY2023 Letting Activity
05. Portfolio Overview FY2023 Letting Activity Gross rental at Expiries and Gross rental Average gross Renewals/ renewals/ Average gross Average rental cancellations at expiry expiry rental New lets New lets new rental reversion GLAm² R'000 R/m² GLAm² R'000 R/m² % Commercial 31 926 4 822 151 27 820
Slide 28: Tenant and Vacancy Profile
05. Portfolio Overview Tenant and Vacancy Profile Analysis of the property portfolio in respect of Analysis of the property portfolio as at 28 February 2023 NUMBER OF tenant profiles TENANTS GLA: 409 868m 2 420 GLA 409 868m 2 377 835 m 2 OCCUPIED TOTAL VACANCY: 32 034M =7.82% 2 Large national Nation
Slide 29: Sectoral Performance - FY2023
05. Portfolio Overview Sectoral Performance - FY2023 Operating environment remains tough amid macroeconomic headwinds RETAIL 48 951M2 GLA COMMERCIAL 131 379M2 GLA INDUSTRIAL 229 538M2 GLA Trading has been consistent with positive tenant Letting activity improving across office Robust performance, we
Slide 30: Sectoral Performance - FY2023
05. Portfolio Overview Sectoral Performance - FY2023 HOSPITALITY GENERAL BUSINESS AND PORTFOLIO UPDATE 15 on Orange delivering 100% fixed net income to Spear to end-January 2023 Operating environment remains challenging Disposal effective date: 2 February 2023 Industrial and Retail portfolio trading
Slide 31: Lease Expiry by GLA
05. Portfolio Overview Lease Expiry by GLA Lease expiry profile based on GLA Total Total Total Total Total Total Total 100% 8% 2% 28% 12% 14% 9% 27% 90% 80% 70% 60% 50% 40% 30% 18% 20% 10% Average 0% Vacant Monthly Expiries Expiries Expiries Expiries Expiries 03/2023 – 03/2024 – 03/2025 – 03/2026 –
Slide 32: Acquisitions, Disposals, Developments and Property Valuations
06 Acquisitions, Disposals, Developments and Property Valuations PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 32
Slide 33: Spear Investment Strategy
06. Acquisitions, Disposals, Developments and Property Valuations Spear Investment Strategy 1. 2. ACQUISITIONS NON-CORE DISPOSALS • Exclusively invest in the Western Cape • Industrial and Retail bias • Minimum asset size R100 million (unless strategic) • Quality over Quantity • Unlock embedded portf
Slide 34: Acquisitions: 27 Junction
06. Acquisitions, Disposals, Developments and Property Valuations Acquisitions: Acquisitive Growth 27 Junction ACQUISITION COST: R65 million PHYSICAL ADDRESS: 27 Junction Road, Parow WALE: 129 months TENANCY: Pepkor Limited GLA: 14 000m2 SECTOR: Industrial ACQUISITION YIELD: 9.78% STATUS: Transferre
Slide 35: Acquisitions: The Island
06. Acquisitions, Disposals, Developments and Property Valuations Acquisitions: Acquisitive Growth The Island ACQUISITION COST: R185 million PHYSICAL ADDRESS: 9 Milner Road, Paarden Eiland WALE: 27 months GLA: 21 774m2 SECTOR: Industrial/ Urban Logistics ACQUISITION YIELD: 9.75% STATUS: Transferred
Slide 36: Non-core Disposals: Portfolio Rebalancing
06. Acquisitions, Disposals, Developments and Property Valuations Non-core Disposals: Portfolio Rebalancing GLA BOOK VALUE SALE PRICE EFFECTIVE PROPERTY LOCATION SECTOR (M²) (R '000) (R '000) DATE USE OF DISPOSAL PROCEEDS FY2023 6 Talana Road Parow, Cape Town Industrial 6 600 66 000 71 400 8 Apr 22
Slide 37: Portfolio Segmentation Post Liberty Life Disposal & The Island Acquisition
06. Acquisitions, Disposals, Developments and Property Valuations Portfolio Segmentation Post Liberty Life Disposal & The Island Acquisition 37% 18% 40% 18% 61% R3.98bn 1% R506m 410 697m2 12% 42% 43% 28% Value of properties Property revenue (excluding smoothing) Gross lettable area (m2) COMMERCIAL I
Slide 38: Strategic Redevelopment: Bravo Park
06. Acquisitions, Disposals, Developments and Property Valuations Strategic Redevelopment Bravo Park REDEVELOPMENT COST: R74 million PHYSICAL ADDRESS: Range Road, Blackheath LEASE PERIOD: 10 years (On redeveloped GLA) GLA REDEVELOPED: 16 000m2 of 38 000m2 SECTOR: Industrial YIELD: 9.81% STATUS: Rede
Slide 39: Development Growth: George Aerotropolis
06. Acquisitions, Disposals, Developments and Property Valuations Development Growth George Aerotropolis PHYSICAL ADDRESS: INDUSTRIAL PARK: R404 Airport Road, Rezoning approved George OWNERSHIP STAKE: 75.6% DEVELOPABLE GLA: ± 35 000m2 SECTOR: Industrial — warehousing, cold storage and urban logistic
Slide 40: Development Growth: Marine Place
06. Acquisitions, Disposals, Developments and Property Valuations Development Growth Marine Place PHYSICAL ADDRESS: Marine Drive, Paarden Eiland GLA TO BE DEVELOPED: 52 000m2 SECTOR: Mixed use DEVELOPMENT COST: R1.4bn TARGET YIELD: 10% STATUS: Commencement TBA PROVISIONAL SUMMARISED CONSOLIDATED ANN
Slide 41: Property Valuations
06. Acquisitions, Disposals, Developments and Property Valuations Property Valuations Valuation summary and assumptions February 2023 February 2022 Valuation (R'000) 4 220 000 4 240 000 Number of properties 28 31 % of portfolio valued externally (%) 48 42 Valuation rate Industrial (R/m²) 5 792 4 897
Slide 42: ESG
07 ESG PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 42
Slide 43: Sustainability Update: Solar PV
18 935 108 07. ESG Sustainability Update AMOUNT OF SOLAR AMOUNT OF Summary of solar PV PANELS ACROSS INVERTERS ACROSS PORTFOLIO PORTFOLIO Number of properties with solar Self-funded 1 1 total 15 1 1 -1 2 16 total future Completed 1 | Upcoming 0 Current 15 | Future 1 | Acquisition 1 | Disposal -1 | S
Slide 44: Sustainability Update
07. ESG Sustainability Update Sustainability-linked loans Socio-economic upliftment BEE - Equity strategy Value: R230 million Non-profits & NGOs • Provide corporate guarantees for Spear equity loans Term: 3 Years • New guarantees in FY2023 Rate: 3-month JIBAR + 1.79% • Total R52.5 million Reducing 3
Slide 45: Outlook
08 Outlook PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 45
Slide 46: Outlook
08. OUTLOOK Outlook Macro-economic headwinds remain a major concern together with an unacceptably high unemployment rate in South Africa, despite the resilience of the Western Cape The trading environment will remain challenging on all fronts over the short to medium term with limited economic growt
Slide 47: Outlook (continued)
08. OUTLOOK Outlook (continued) Management remains optimistic that by the year ending 2024 the City of Cape Town’s 500MW of dispatchable power is operational and protecting City of Cape Town clients from stage 1 to stage 4 loadshedding Spear’s ESG strategy will continue to deliver people, planet and
Slide 48: Guidance
09 Guidance PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 48
Slide 49: Guidance
09. Guidance Guidance Assets The macroeconomic climate remains challenging as the longer-term impact of loadshedding has not yet been fully felt by South African business Consistent The negative impact of cost creep across the board will place further pressure on business margins, cost of occupancie
Slide 50: Questions?
10 Questions? Email questions to INFO@SPEARPROP.CO.ZA Live Q&A after presentation spearreitlimited Spear REIT Limited Spear REIT Limited @SpearREIT PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS / YEAR ENDED 28 FEBRUARY 2023 50