Hyprop Investments Limited · JSE:HYP

Hyprop Investments — Debt Investor Presentation (May 2019)

33 slides from Hyprop Investments's debt investor presentation, May 2019

  1. Slide 1: Roadshow May 2019

    INVESTMENTS LIMITED CapeGate, Brackenfell, Cape Town INVESTMENTS LIMITED Roadshow May 2019

  2. Slide 2: Contact Details

    Contact Details INVESTMENTS LIMITED Hyprop Investments Limited Name Position Contact Morne@hyprop.co.za Morne Wilken Chief Executive Officer 011 447 0090 Brett@hyprop.co.za Brett Till Chief Financial Officer 011 447 0090 Mari@hyprop.co.za Mari Hattingh Financial Manager 011 447 0090 Standard Bank De

  3. Slide 3: Agenda

    Agenda INVESTMENTS LIMITED Hyprop at a glance – Pg. 4 Financial performance – Pg.10 Funding matters – Pg. 12 Outlook & focus – Pg. 20 Questions & answers – Pg. 22 Appendices – Pg. 23 3

  4. Slide 4: Hyprop at a glance

    INVESTMENTS LIMITED Hyprop at a glance Canal Walk, Cape Town 4

  5. Slide 5: Group overview

    Group overview INVESTMENTS LIMITED Hyprop Investments Limited Europe South Africa Hystead Limited 60% owned (established in the UK) Clearwater Mall Somerset Mall Delta City Belgrade Delta City Podgorica (Serbia) (Montenegro) 100% 100% Hyde Park Corner Rosebank Mall Owned Owned Skopje City Mall The M

  6. Slide 6: Stratco

    Stratco INVESTMENTS LIMITED • CEO of MAS REI (2018) • CFO of Mentor Africa Limited • Executive Director at Blend (2007 ‒ 2017) Property Group • CEO of Attacq Limited (2011 – 2017) • Group CFO of Rebhold / • Manager: Strategic Mvelaphanda Group Investments at Royal Bafokeng • COO of Attacq limited (1

  7. Slide 7: Focus areas, highs, lows & challenges

    Focus areas, highs, lows & challenges INVESTMENTS LIMITED Focus Areas South South-Eastern Sub-Saharan Africa Europe Africa Highs • Distributable income from SA up 9% (yoy to Dec 2018) • R750m new bonds issued at a weighted average margin of 1.62% • Distributable income from Europe up 17% (yoy to Dec

  8. Slide 8: Edcon exposure – December 2018

    Edcon exposure ‒ 31 December 2018 South Africa INVESTMENTS LIMITED % of gross income Exposure per property 2,5% 2,3% 2,1% 2,1% 7,6% % of gross income % of GLA 2,0% 1,5% 1,5% 1,5% 1,3% 1,2% Edcon 1,0% 0,9% 0,8% 0,7% 0,6% 0,7% Other tenants 0,4% 0,4% 0,5% 0,2% 0,1% 0,1% 0,1% 92,4% 0,0% Canal Clearwate

  9. Slide 9: Sustainability

    Sustainability South Africa 2018 2017 INVESTMENTS LIMITED GRESB benchmark 61% 42% CDP carbon score reduced B+ A- CDP water First Hyprop submission Clearwater Mall now generates 15% of total energy from solar power Savings during the past 6 months 24.5% 5.4% 83% Water saving Electricity Waste recycli

  10. Slide 10: Financial performance

    INVESTMENTS LIMITED Financial performance CapeGate, Brackenfell, Cape Town 10

  11. Slide 11: Key group performance metrics

    Key group performance metrics INVESTMENTS LIMITED Distributable earnings - Rm Distribution – cps Loan-to-value - % 600 40 1000 5.0% 5.6% 2.5% 6.6% 30 900 400 31,2 32,8 6.4% 800 376,3 385,6 383,8 20 985 330,6 20,0 21,2 700 933 200 10 600 500 0 0 31 Dec 2017 31 Dec 2018 Dec 2017 Dec 2018 30 June 2018

  12. Slide 12: Funding matters

    INVESTMENTS LIMITED Funding matters Rosebank Mall, Johannesburg, Gauteng 12

  13. Slide 13: Bank & DCM debt profile

    Bank & DCM debt profile INVESTMENTS LIMITED On balance sheet by lender On balance sheet sources of funding Dec 2018 (Total R8.4bn) Dec 2018 (Total R8.4bn) DCM funding ZAR bank facilities 34% 5% 4% Investec 5% OMSFIN USD bank facilities 61% Standard Bank 3% RMB 34% 54% ZAR DCM facilities Group Group

  14. Slide 14: Total debt maturity – December 2018

    Total debt maturity – 31 December 2018 Rand equivalent – includes guaranteed debt in Hystead and 100% of Ikeja INVESTMENTS LIMITED Total debt (Rm) 3500 3 019 3000 2 821 2 699 2500 2000 1 796 1500 1000 824 863 650 400 452 500 246 317 250 348 0 Q1: Q2: Q3: Q4: Q1: Q2: Q3: Q4: Q1: Q2: Q3: Q4: Q1: Q2: Q

  15. Slide 15: Total debt maturity – March 2019

    Total debt maturity – 31 March 2019 (After refinancing and proposed utilisation of new bond issues) INVESTMENTS LIMITED Rand equivalent – includes guaranteed debt in Hystead and 100% of Ikeja Total debt (Rm) 3500 3 019 3000 2 821 2 687 2 687 2500 2000 Refinanced 1 438 1500 1 074 1000 824 863 650 Ref

  16. Slide 16: Key credit metrics

    Key credit metrics INVESTMENTS LIMITED 31-Dec-18 30-Jun-18 30-Jun-17 Hyprop Hyprop Hyprop Hyprop Group (including Hyprop Group (including Hyprop Group (including Amounts in R’000 Hystead at 100%) Hystead at 100%) Hystead at 100%) Income statement ratios: EBITDA (including interest income) 1 357 447

  17. Slide 17: LTV calculations

    LTV calculations Comparison between Hyprop and Moody’s methodologies INVESTMENTS LIMITED Dec 2018 (R ‘000) Jun 2018 (R ‘000) Per Moody’s Hyprop Per Moody’s Hyprop Balance Sheet methodology methodology Balance Sheet methodology methodology Dec 2018 Dec 2018 Dec 2018 Jun 2018 Jun 2018 Jun 2018 Hyprop

  18. Slide 18: Bonds outstanding

    Bonds outstanding INVESTMENTS LIMITED Bond Code Issue Date Maturity Size(ZAR’m) Benchmark Spread Initial Tenor HILB05 11-Jul-16 11-Jul-19 358 Jibar 169 3 HILB04 01-Nov-13 01-Nov-19 450 Jibar 154 6 HILB06 11-Jul-16 11-Jul-20 425 Jibar 179 4 HILB07 11-Jul-16 11-Jul-21 317 Jibar 190 5 HILB10 17-Sep-18

  19. Slide 19: Rating agency overview

    Rating agency overview INVESTMENTS LIMITED Moody’s Rating class Rating scale Rating Rating outlook Long Term International Ba1 Long term National Aa3.za Negative Short term National P1.za Rating Action - 13 February 2019 Positives Points to watch (1) High quality and well positioned retail portfolio

  20. Slide 20: Outlook & focus

    INVESTMENTS LIMITED Outlook & focus Woodlands, Pretorius Park, Pretoria East 20

  21. Slide 21: Outlook & focus

    Outlook & focus INVESTMENTS LIMITED Hyprop • Strategy • Recycle capital to support growth • Review debt position • Cash-backed distributions • Restore Moody’s investment grade • Long-term investment decisions South Africa South-Eastern Europe Sub-Saharan Africa (Excl. SA) • Reposition malls • Streng

  22. Slide 22: Questions & answers

    INVESTMENTS LIMITED Questions & answers Hyde Park Corner, Johannesburg 22

  23. Slide 23: Appendices

    INVESTMENTS LIMITED Appendices Clearwater mall, Johannesburg 23

  24. Slide 24: Investment profile – December 2018

    Investment profile – 31 December 2018 INVESTMENTS LIMITED SA shopping centres Core South African portfolio SA value centres R29.7bn = 73% SA standalone offices 1% Cap rates: 6.3% – 8.8% 68% 4% 8% Sub-Saharan Africa (excl. SA) Hyprop share R3.4bn Total portfolio Cap rates: 7.8% – 9.0% R41bn 19% South

  25. Slide 25: Distribution growth

    Distribution growth INVESTMENTS LIMITED Cents per share 900 8.8% 800 12.1% 757 695 700 600 500 8.3% 9.3% 2.5% 16.6% 8.0% 376 380 386 400 347 348 13.1% 300 89.3% 200 5.6% 100 0 H1 2017 H2 2017 FY 2017 H1 2018 H2 2018 FY 2018 H1 2019 South Africa Sub-Saharan Africa South-Eastern Europe 25

  26. Slide 26: Distributable earnings

    Distributable earnings Dec 2018 % Dec 2017 June 2018 INVESTMENTS LIMITED R000 Change R000 R000 Revenue 1 631 673 6 1 539 370 3 113 712 Property expenses (587 669) 13 (521 113) (1 049 892) Net property income 1 044 004 3 1 018 257 2 063 820 Other operating expenses (20 649) (27) (28 295) (55 778) Ope

  27. Slide 27: South Africa

    Gauteng region Property locations as per the next slide of all the SA assets H Y D E P A R K C O R N E R Western Cape region <1% 14% South Africa 86% Contribution to DPS CapeGate, Brackenfell, Cape Town 27

  28. Slide 28: Operations – South Africa

    Operations South Africa – 31 December 2018 INVESTMENTS LIMITED New lettings & renewals Retail vacancy % of Rentable Rental Contractual 2,0% total area growth escalation 1,5% 1,4% Leasing portfolio (m²) (%) (%) 1,2% 1,1% 1,0% 0,9% 0,8% 0,9% Retail 7.4 49 010 -1.8 7.3 0,5% 0,0% Dec-13 Dec-14 Dec-15 De

  29. Slide 29: South-Eastern Europe

    INVESTMENTS LIMITED Croatia Serbia Bulgaria Montenegro Macedonia 14% South-Eastern Europe 86% Contribution to DPS The Mall, Sofia, Bulgaria 29

  30. Slide 30: Operations – South-Eastern Europe

    Operations South-Eastern Europe – 31 December 2018 INVESTMENTS LIMITED Vacancy - portfolio Lease expiry profile 0,4% 30% 28% 0,3% 25% 0,3% 0,3% 19% 20% 0,2% 0,2% 13% 14% 14% 15% 12% 0,1% 0,0% 10% 0,0% 0,0% 0,0% 5% Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 0% 2019 2020 2021 2022 2023 2024+ New lettin

  31. Slide 31: Sub-Saharan Africa

    Ghana Nigeria Zambia <1% 14% Sub-Saharan Africa 86% Contribution to DPS Manda Hill, Lusaka, Zambia 31

  32. Slide 32: Operations – Sub-Saharan Africa

    Operations Sub-Saharan Africa – 31 December 2018 INVESTMENTS LIMITED Average monthly foot count / m² Vacancy as % of GLA 40 5% 4% 25% 3% 2% 1.3% 30 20% 4.9% 1% 33 32 0% 7.9% 31 31 29 29 27 28 15% 0.5% 20 15,6% 1.9% 22 22 10% 14,0% 12,7% 17 16 10,7% 11,3% 1.6% 10 5% 3,4% 7,2% 3,1% 5,8% 6,3% 5,3% 1,5%

  33. Slide 33: Disclaimer

    Disclaimer Forward-looking statements INVESTMENTS LIMITED • This document contains forward-looking statements that, unless otherwise indicated, reflect the group’s expectations as at 1 March 2019 • Actual results may differ materially from the group’s expectations if known and unknown risks or uncer

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