Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — H1 2019 Earnings Presentation
109 slides from Vukile Property Fund's earnings presentation, November 2018
Slide 1: Interim Results Presentation
Interim Results Presentation for the six months ending 30 September 2018 www.vukile.co.za
Slide 2: Agenda
AGENDA 1 Introduction Laurence Rapp 2 Southern African Retail Portfolio Overview Ina Lopion 3 Spanish Portfolio Overview Alfonso Brunet 4 Financial Performance & Treasury Management Mike Potts 5 Vukile Academy Sedise Moseneke 6 Strategic Plans & Prospects Laurence Rapp 7 Q&A 8 Appendices Group Inter
Slide 3: Introduction
Introduction Laurence Rapp www.vukile.co.za 3
Slide 4: Profile: Who we are
Profile Who we are INTRODUCTION High quality, low risk, Retail REIT in South Africa with growing international exposure in Spain Strong operational focus with a core competence in active asset management OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Aim for simplicity and transparency Clarity o
Slide 5: Highlights: six months under review
Highlights Six months under review 7.5% increase in dividends in line with guidance to 78.1 cents per share INTRODUCTION Gathering significant momentum in Spain ▪ Investment properties increased to c.€900 million from €308 million following the acquisition of 5 dominant shopping centres OVERVIEW
Slide 6: Group Overview - Total property assets of R32.3bn
Group Overview - Total property assets of R32.3bn Well diversified exposure across macro economic drivers INTRODUCTION United Kingdom 4% R1.3bn OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN OVERVIEW PORTFOLIO SPANISH Spain Southern 46% 50% MANAGEMENT & TREASURY PERFORMANCE FINANCIAL R14.8bn Africa R16.
Slide 7: Clarity of vision and strategic intent
Clarity of vision and strategic intent Focus on capital allocation and strategic consistency INTRODUCTION Southern Africa Spain OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Continued focus on defensive retail sector in line with our Castellana – Morzal deal complete with Morzal now a 100% high-qua
Slide 8: Southern African Retail Portfolio Overview
Southern African Retail Portfolio Overview Ina Lopion www.vukile.co.za 8
Slide 9: Key retail portfolio metrics
Key retail portfolio metrics Direct Southern African Retail Portfolio INTRODUCTION Value R13.3bn (91% of direct Southern African WALE increased to 4.0 years portfolio) Tenant Retention 87% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 45 Properties Average base rentals R132.66/m²/month GLA
Slide 10: Retail tenant exposure
Retail tenant exposure Low risk with c.80% national tenants Tenant profile - by contractual rent Top 10 tenants by rent INTRODUCTION 2.7% Pep Stores Other OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Pepkor 8.4% 2.7% Ackermans 21% Diversified across Shoprite 5.9% 929 tenants Pick n Pay 5.1% OVERVIEW P
Slide 11: Edcon exposure
Edcon exposure Actively managed Retail Rental exposure reduced from 5.7% to 4.7% Area reduced by c. 5,000m² INTRODUCTION Of the c. 5 000m² vacated by Edcon, 65% has OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN been let at an average rate of R129/m² relative 3.2% to the Edcon rental average of R84/m²
Slide 12: Rent-to-sales ratio for Top properties
Rent-to-sales ratio for Top 15 properties Ahead of industry benchmarks INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 10.2% OVERVIEW PORTFOLIO SPANISH 8.2% 7.6% 7.0% 6.5% 6.5% MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 6.0% 5.9% 5.5% 5.4% 5.2% 4.8% 4.8% 4.8% 4.5% 3.8% ACADEMY VUKILE PROSPE
Slide 13: Retail portfolio trading statistics for Top properties
Retail portfolio trading statistics for Top 15 properties High trading density with solid growth ahead of market comparable of 0.2%~ INTRODUCTION Annualised trading density R/m² Trading density like-for-like growth 3.3% 5.2% (3.1%) 3.6% * 5.0% (1.0%) 9.1% (3.3%) * 5.4% 1.0% 2.8% 4.3% 0.8% 1.0% OVERV
Slide 14: Retail insights
Retail insights Portfolio diversification geared for sustained growth INTRODUCTION Segment Focus Rural and township and centres that account for 54% of the portfolio showed a year on year trading density growth of 2.6% relative to SAPOA OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN average of 0.2%
Slide 15: Retail densities
Retail densities Township and Rural centres outperforming Urban centres Urban (46%) Rural (28%) Township (26%) INTRODUCTION R24 496/m² R28 380/m² R38 014/m² 0.8% decline 3.1% growth 2.1% growth 7.1% rent/sales 5.3% rent/sales 5.0% rent/sales OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Groceries & Foo
Slide 16: A high quality low risk retail portfolio
A high quality low risk retail portfolio Interrelationship of key retail metrics INTRODUCTION Regional Tenant Dominance Profile Dominant in primary OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN catchment area 82% national tenants An estimated 127 million customer 49% of leases expiring in 2022
Slide 17: Recent acquisitions - Kolonnade Retail Park
Recent acquisitions - Kolonnade Retail Park Small Regional Shopping Centre of 39 450m² acquired in November 2018 INTRODUCTION Purchase price of R470.6 million Expected to be yield neutral in year 1 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Purchase price settled through issue of shares to ven
Slide 18: Extension and upgrade: Pine Crest
Extension and upgrade Pine Crest Shopping Centre, Pinetown, KZN INTRODUCTION Upgrading the existing centre, which has an average monthly footfall of 940 000 customers, and expanding the total GLA from 40 086m² to 45 190m² A new entrance off the very busy Kings Road serving a new mall, an upgrade
Slide 19: Redevelopment in progress: Maluti Crescent
Redevelopment in progress Maluti Crescent, Phuthaditjhaba INTRODUCTION Modern, enclosed state of the art centre that will dominate a very strong catchment area Pick n Pay has signed as the second food anchor which will, together with the existing Super Spar, greatly enhance the food offering OVE
Slide 20: Energy and Sustainability
Energy and Sustainability Positive returns from sustainable energy Achievements for 2019FY: Targets and strategy for 2020FY: INTRODUCTION Total installed PV capacity to date: 3.618 MWp Energy savings of a further 1.6 Million kWh OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN – Annual savings of 5.9
Slide 21: Alternative Income Management
Alternative Income Management Gathering momentum INTRODUCTION 27 Malls have live Fibre to the business connections, remainder of 35 Malls to be completed by mid December 2018 2 Malls have been earmarked for Wi-Fi and Shopper App Proof of Concept OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Free
Slide 22: Spanish Portfolio Overview
Spanish Portfolio Overview Alfonso Brunet www.vukile.co.za 22
Slide 23: Operational Highlights
Operational Highlights Growing retail Socimi in Spain INTRODUCTION Portfolio delivering solid growth in GAV ▪ Like for like growth of c.9% in GAV relative to acquisition price OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Active asset management is bearing results across the portfolio ▪ AM team act
Slide 24: Key portfolio metrics
Key portfolio metrics A low-risk defensive portfolio as a platform for future growth INTRODUCTION Value €898.0mn (97% Retail) 1.8% Vacant 19 Properties 93% of retail space let to national tenants OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GLA 318 622m² 30% of income from top 10 tenants O
Slide 25: Update on Spanish economy and political environment
Update on Spanish economy and political environment Spanish economy has stable outlook Indicator Forecast 2018 Forecast 2019 Spain GDP Growth 2.70% 2.30% INTRODUCTION EU GDP Growth 2.00% 1.90% Household Consumption 2.30% 1.90% CPI 1.70% 1.60% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Unemployment 1
Slide 26: Asset Management interventions
Asset Management interventions Additional €1.2m added to Net Operating Income INTRODUCTION Asset Project GLA signed Additional Annualised % Increase in (m²) NOI (€) base rentals Parque Oeste Alcorcón Split Worten box and introduce new tenant 843 43 278 6.55% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICA
Slide 27: Asset Management interventions: New Ikea unit
FINANCIAL 27 SOUTHERN AFRICAN SPANISH PERFORMANCE STRATEGIC RETAIL PORTFOLIO PORTFOLIO & TREASURY VUKILE PLANS & INTRODUCTION OVERVIEW OVERVIEW MANAGEMENT ACADEMY PROSPECTS Q&A APPENDICES www.vukile.co.za Asset Management interventions New Ikea unit – Habaneras Shopping Centre Group Interim results
Slide 28: Asset Management interventions: New Espacio Casa unit
FINANCIAL 28 SOUTHERN AFRICAN SPANISH PERFORMANCE STRATEGIC RETAIL PORTFOLIO PORTFOLIO & TREASURY VUKILE PLANS & INTRODUCTION OVERVIEW OVERVIEW MANAGEMENT ACADEMY PROSPECTS Q&A APPENDICES www.vukile.co.za Asset Management interventions New Espacio Casa unit – Parque Oeste Alcorcon Group Interim resu
Slide 29: Spanish vacancy profile
Spanish vacancy profile 11 Properties acquired in June 2017 now fully let Vacant Area Mar-18 Vacant Area Sep-18 Portfolio INTRODUCTION Vacancy 1.8% of Shopping Centres New OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GLA El Faro (2.4%) Habaneras (4.2%) OVERVIEW PORTFOLIO SPANISH Los Arcos (5.7%) Valls
Slide 30: Redevelopment project: Kinepolis Leisure Centre
Redevelopment project Kinepolis Leisure Centre INTRODUCTION Upgrade of interior with improved finishes and increased natural light with new acoustic ceiling installed Customized high-visibility children´s playground almost complete OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN which will attract fa
Slide 31: Portfolio Value
Portfolio Value Significant like-for-like value growth in acquisitions over time External % Increase on External % Increase on External % Increase on INTRODUCTION Acquisition Valuation Dec acquisition Valuation Mar acquisition Valuation acquisition Transaction Price (€)* 2017(€) price 18 (€) price S
Slide 32: Acquisition: Habaneras Shopping Centre
Acquisition Habaneras Shopping Centre INTRODUCTION Castellana finalised the acquisition of Habaneras Shopping Centre, located in Torrevieja, Alicante, Spain, in May 2018 The centre is a 24,158m² open-air shopping centre comprising of OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 70 tenants Anchor
Slide 33: Acquisition: El Faro, Badajoz
Acquisition El Faro, Badajoz INTRODUCTION El Faro Shopping Centre is located in Badajoz, in the east of Spain, less than 5 km from the Portugal border The centre is 66 422m² of which 43 423m² was acquired, comprising 110 tenants OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Anchor tenants include
Slide 34: Acquisition: Bahia Sur, Bahia de Cadiz
Acquisition Bahia Sur, Bahia de Cadiz INTRODUCTION Bahia Sur Shopping Centre is located in San Fernando, Bahia de Cadiz, adjacent to San Fernando train station, accessible from Madrid (4hrs) The centre is 56 500m² of which 24 760m² was acquired, OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN compris
Slide 35: Acquisition: Los Arcos, Seville
Acquisition Los Arcos, Seville INTRODUCTION Los Arcos Shopping Centre is located in eastern side of Seville, Andalusia. Seville is the 4th largest city in Spain and a major tourist hub OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (3.5 million visitors annually) The centre is 43 500m² of which 17
Slide 36: Acquisition: Vallsur, Valladolid
Acquisition Vallsur, Valladolid INTRODUCTION Vallsur Shopping Centre is located in the centre of Valladolid. Valladolid is the capital of the Castilla Leon region and is accessible by high speed train from Madrid (1 hour) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN The centre is 35 769m² in tot
Slide 37: Portfolio Metrics: Pre and post Acquisitions
Portfolio Metrics Pre and post Acquisitions INTRODUCTION Pro-forma consolidated 31 March 2018 tenant mix by rent Portfolio as at Portfolio as at 3% 2% 1% 1% 31 Mar 2018 30 Sep 2018 5% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 19% Gross Asset Value €308m €898m 7% Gross Lettable Area 172 974m² 318 62
Slide 38: Upcoming Operational Plans
Upcoming Operational Plans Driving value through hands-on asset management INTRODUCTION Asset Management Focus Areas ▪ Retail Parks: Additional unit split projects and enhancing non-GLA income OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN ▪ Granaita: Completion of integration works and relaunch of re
Slide 39: Financial Performance
Financial Performance Mike Potts www.vukile.co.za 39
Slide 40: Distribution history
Distribution history Continuing 15 year trend of unbroken growth in dividends Cents per share INTRODUCTION Interim Final Normalised total Non-recurring 7.5% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 168.82 156.75 146.3 136.8 OVERVIEW PORTFOLIO SPANISH 126.5 120.4 111.4 107.9 MANAGEMENT & TREASURY P
Slide 41: Extract from income statement – Segmental report
Extract from income statement – Segmental report R714mn distributable income for H1 FY2019 INTRODUCTION Sep-18 Sep-17 Variance R'000 R'000 % Property Revenue 1 030 393 728 594 41.4 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Property Expenses (216 850) (125 730) (72.5) Net profit from property operat
Slide 42: Extract from income statement – Segmental report (continued)
Extract from income statement – Segmental report R714mn distributable income for H1 FY2019 INTRODUCTION Sep-18 Sep-17 Variance R'000 R'000 % OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Attributable to Vukile Group 642 655 555 938 15.6 Non-IFRS related adjustments: OVERVIEW PORTFOLIO SPANISH Shares is
Slide 43: Segmental income statement
Segmental income statement Spain increasing its contribution to 29% of property profits Operating segment analysis for the six months ended 30 September 2018 INTRODUCTION Total Total Total Total OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Retail Other Southern United Retail Other Spain Group R'000 R'
Slide 44: Group net cash flow
Group net cash flow – (R’mn) Deployment of R9.1bn in growing the property portfolio, mainly in Spain INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 1 784 OVERVIEW PORTFOLIO SPANISH 1 697 ( 5 107 ) MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 913 168 51 159 ACADEMY VUKILE ( 9 058 ) 1 094 ( 75
Slide 45: Group balance sheet
Group balance sheet – (R’mn) Assets and liabilities at 30 September 2018 INTRODUCTION Sep-18 Sep-17 27 296 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN OVERVIEW PORTFOLIO SPANISH 16 436 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 12 258 ACADEMY VUKILE 5 264 3 457 3 228 2 152 PROSPECTS PLANS & STRATEGI
Slide 46: NAV Bridge
NAV Bridge – (Cents) Increase in NAV to 2027 cps INTRODUCTION 234 29 33 968 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (774) OVERVIEW PORTFOLIO SPANISH (237) (208) (28) MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 2 010 2 027 ACADEMY VUKILE PROSPECTS PLANS & STRATEGIC Q&A Opening NAV Increase in Incr
Slide 47: Treasury Management
Treasury Management Mike Potts www.vukile.co.za 47
Slide 48: Key debt and foreign exchange metrics
Key debt and foreign exchange metrics Good progress in reducing LTV post Spanish deal INTRODUCTION Reduced Group cost of funding to 4.74% (South Africa 9.08%) Solid balance sheet with a loan to value ratio of 39.7% (i) and gearing ratio of 38.0% (ii) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 49: Cost of funding
Cost of funding Reduction in Group cost of finance due to funding mix Group Debt by Currency INTRODUCTION 9.24% 9.08% 9.23% 2.28% 2.85% 2.72% 3.34% 3.47% 3.49% 5.74% 4.74% 4.52% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN R13.20bn R9.450bn OVERVIEW PORTFOLIO SPANISH R7.071bn MANAGEMENT & TREASURY PER
Slide 50: Segmental loan-to-value and interest cover ratios
Segmental loan-to-value and interest cover ratios Low risk conservative balance sheet INTRODUCTION Southern Africa Spain Group Internal Policy R'000 €'000 R'000 at Group level Loan-to-value ratio (net of cash and cash equivalents) (i) 33.2% 47.19% 39.7% 35% - 40% OVERVIEW RETAIL PORTFOLIO SOUTHERN A
Slide 51: Analysis of Group loan repayment and hedging expiry profile
Analysis of Group loan repayment and hedging expiry profile Well hedged with low risk expiry profile Group loan and hedging (swap & fixed debt) expiry profile INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (xi) 37.1% 41.1% Internal Policy (xi) No more than 25% of total interest bearing debt
Slide 52: Strategy to reduce LTV ratio
Strategy to reduce LTV ratio Prudent balance sheet management INTRODUCTION Intention to reduce the Group LTV to the 35% targeted level within 12-18 months Good progress in already reducing the Group LTV ratio to 39.7% (i) since acquisition of the new portfolio OVERVIEW RETAIL PORTFOLIO SOUTHERN
Slide 53: Vukile Academy
Vukile Academy Sedise Moseneke www.vukile.co.za 53
Slide 54: Vukile Academy: Real Change For A Real World
Vukile Academy Real Change For A Real World INTRODUCTION The Academy is a unique, two-tiered programme aimed at: ▪ Funding top black students and offering a year long internship programme to graduates OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN ▪ Assisting black property entrepreneurs to realise th
Slide 55: Vukile Community Participation and Liaison Programme
Vukile Community Participation and Liaison Programme Engaging our Communities INTRODUCTION Our community liaison and participation programme aims at creating sustainable and mutually beneficial platforms of engagement between Vukile and its communities OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 56: Property Sector Charter Scorecard
Property Sector Charter Scorecard Embracing an ever changing landscape INTRODUCTION Vukile’s commitment to transformation in the sector, remains a key strategic pillar The 2019 FY was characterised by an alignment strategy to the amended codes and going OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 57: Strategic Plans & Prospects
Strategic Plans & Prospects Laurence Rapp www.vukile.co.za 57
Slide 58: Southern Africa strategy
Southern Africa Internally focussed strategy to drive operational performance INTRODUCTION Anticipate another challenging period ahead for the local economy Portfolio is defensively positioned with 91% retail exposure with a specific focus on LSMs 1-7 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 59: Spanish strategy
Spanish strategy Building off a solid foundation INTRODUCTION Spanish retail and economic fundamentals remain positive Approach is to “replicate not integrate”, implant Vukile DNA into Castellana Remain focused on the retail sector including retail parks and shopping centres OVERVIEW RETAIL PO
Slide 60: Balance Sheet Management
Balance Sheet Management Key management focus to reduce LTV INTRODUCTION Remain intent on reducing current LTV of 39.1% to around 35% over the next 12 – 18 months Exploring a number of levers to achieve that goal OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Acquisitions for paper: ▪ Kolonnade de
Slide 61: Prospects FY2019
Prospects FY2019 INTRODUCTION Seemingly no respite for the local economy and tough trading conditions expected to persist Well positioned in Southern Africa to weather the storm with a more growth driven mindset in Spain OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Continued internal focus on dr
Slide 62: Acknowledgements
Acknowledgements INTRODUCTION Board OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Property managers Service providers OVERVIEW PORTFOLIO SPANISH Brokers and developers MANAGEMENT & TREASURY PERFORMANCE FINANCIAL Tenants Investors ACADEMY VUKILE Funders PROSPECTS PLANS & STRATEGIC Collea
Slide 63: Q&A
— VUKILE PROPERTY FUND REAL ESTATE. REAL GROWTH. www.vukile.co.za 63
Slide 64: Southern African portfolio: Appendix A
FINANCIAL 64 SOUTHERN AFRICAN SPANISH PERFORMANCE STRATEGIC RETAIL PORTFOLIO PORTFOLIO & TREASURY VUKILE PLANS & INTRODUCTION OVERVIEW OVERVIEW MANAGEMENT ACADEMY PROSPECTS Q&A APPENDICES www.vukile.co.za Southern African portfolio Appendix A
Slide 65: Our Southern Africa retail footprint
Our Southern Africa retail footprint Retail portfolio profile (Top 15 properties 64% of portfolio by value) INTRODUCTION 7 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 13 8% 1 OVERVIEW PORTFOLIO SPANISH 8% 8 12 14 35% 9 15 4% 5 1 East Rand Mall 9 Meadowdale Mall MANAGEMENT & TREASURY PERFORMANCE FINAN
Slide 66: High quality retail assets: Top assets
High quality retail assets Top 15 assets INTRODUCTION East Rand Mall Phoenix Plaza Pine Crest Gugulethu Square Dobsonville Mall OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R1 397m R926m R897m R572m R556m OVERVIEW PORTFOLIO SPANISH Region Gauteng KwaZulu-Natal KwaZulu-Natal Western Cape Gauteng MA
Slide 67: High quality retail assets: Top assets (cont.)
High quality retail assets Top 15 assets (cont.) Oshakati Shopping Daveyton Shopping INTRODUCTION Nonesi Mall Centre Meadowdale Mall Bloemfontein Plaza Centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R478m R433m R421m R414m R413m OVERVIEW PORTFOLIO SPANISH Region Eastern Cape Namibia Gauteng G
Slide 68: High quality retail assets: Top assets (cont.)
High quality retail assets Top 15 assets (cont.) INTRODUCTION Maluti Crescent Randburg Square Thavhani Mall Moruleng Mall Hillfox Power Centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R409m R407m R406m R370m R341m OVERVIEW PORTFOLIO SPANISH Region Free State Gauteng Limpopo North West Gauteng
Slide 69: Retail tenant exposure: Well diversified tenant mix
Retail tenant exposure Well diversified tenant mix Category profile by Rent Category profile by GLA INTRODUCTION 30% Fashion 25% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 13% Grocery/ Supermarket 21% 8% Banking 5% 7% Food 5% OVERVIEW PORTFOLIO SPANISH 5% Home Furnishings 7% Department Stores MANAGE
Slide 70: Retail tenant expiry profile
Retail tenant expiry profile 49% of contractual rent expiring in 2022 and beyond (WALE 4.0 years) INTRODUCTION % of Contractual Rent Cumulative 100 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 66 OVERVIEW PORTFOLIO SPANISH 51 34 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 15 34 19 17 15 ACADEMY VUKILE
Slide 71: Retail vacancies
Retail vacancies 29 Properties Fully let / Vacancies lower than 1 000m² Fully Let Soweto Dobsonville Mall Rustenburg Edgars Building Queenstown Nonesi Mall INTRODUCTION Ondangwa Shoprite Centre Mbombela Truworths Centre Giyani Plaza Germiston Meadowdale Mall Ga-Kgapane Modjadji Plaza Vacancy lower t
Slide 72: Retail tenant affordability
Retail tenant affordability Consistently strong metrics Retail Vacancy Profile by Rent Retail Average Base Rentals (excl. Recoveries) INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 132.66 130.44 4.0% 122.88 114.61 3.6% 108.14 3.4% 3.4% 3.3% 3.3% 102.56 OVERVIEW PORTFOLIO SPANISH MANAGEMENT
Slide 73: Ratio of net cost to property revenue – Retail portfolio
Ratio of net cost to property revenue – Retail portfolio Improvement in cost ratios INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Average 19.4 OVERVIEW PORTFOLIO SPANISH Average 17.9 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 24.6 21.2 20.3 19.6 19.6 18.8 18.6 17.7 17.2 17.2 17.0 17.0 16.
Slide 74: Southern African total portfolio composition
Southern African total portfolio composition Top 15 assets make up c.58% of the total portfolio Sectoral Profile - by Value Sectoral Profile - by GLA INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Top 15 Top 15 By Value By GLA Properties Properties 91% Retail 86% 58% 3% Industrial 8% 47% OV
Slide 75: Southern African total portfolio tenant exposure
Southern African total portfolio tenant exposure Low risk with 77% national tenants Top 10 Tenants by Contractual Rent Top 10 Tenants by occupied GLA INTRODUCTION Other Other 23% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 24% Diversified across Top 10 Diversified across Top 10 1 213 tenants Tenants
Slide 76: Southern African total portfolio tenant expiry profile
Southern African total portfolio tenant expiry profile 49% of contractual rent expiring in 2022 and beyond (WALE 3.9 years) % of Contractual Rent INTRODUCTION % of Contractual Rent Cumulative 100 66 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 51 34 34 15 15 19 17 OVERVIEW PORTFOLIO SPANISH Mar-19 Mar
Slide 77: Southern African total portfolio vacancy profile
Southern African total portfolio vacancy profile Vacancy contained at 3.9% of contractual rent 19.5 INTRODUCTION Vacancy 10.3 3.9% of OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 6.0 Rent 3.9 3.7 3.4 3.4 2.1 OVERVIEW PORTFOLIO SPANISH Retail Industrial Offices Total MANAGEMENT & TREASURY PERFORMANCE F
Slide 78: Individual properties vacancy profile
Individual properties vacancy profile (% of GLA) Vacancy > 1 000m2 Vacant Area Mar-18 Vacant Area Sep-18 INTRODUCTION Randburg Square (8%) Retail Roodepoort Hillfox Power Centre (8%) Vereeniging Bedworth Centre (5%) Letlhabile Mall (12%) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Mbombela Shoprite C
Slide 79: Southern African total portfolio lease renewals
Southern African total portfolio lease renewals Positive reversions INTRODUCTION Lease renewals OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 4.7 percentage escalation 4.3 4.1 on expiry rentals OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCIAL ACADEMY VUKILE PROSPECTS PLANS & STRAT
Slide 80: Contracted rental escalation profile
Southern African total portfolio contracted rental escalation profile Rental escalations still ahead of inflation INTRODUCTION 7.9 7.9 7.8 7.2 7.1 7.1 7.1 Escalation 7.0 7.0 7.0 7.0 7.0 7.0 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Percentage OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORM
Slide 81: Weighted average base rentals – R/m2
Southern African total portfolio weighted average base rentals – R/m2 Excluding recoveries INTRODUCTION 1.7% 2.8% 2.1% 4.4% 1.8% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 134.24 132.66 130.44 128.64 124.99 122.77 OVERVIEW PORTFOLIO SPANISH 97.77 95.74 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL ACA
Slide 82: Weighted average base rentals: Retail portfolio
Weighted average base rentals R/m2 (excluding recoveries) Southern African Retail portfolio Boksburg East Rand Mall INTRODUCTION Durban Phoenix Plaza Durban Workshop Windhoek 269 Independence Avenue Springs Mall Mbombela Truworths Centre Pinetown Pine Crest OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 83: Weighted average base rentals: Other portfolio
Weighted average base rentals R/m2 (excluding recoveries) Southern African Other portfolio INTRODUCTION Jhb Houghton Estate Oxford Terrace Cape Town Bellville Barons OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Jhb Houghton 1 West Street Sandton Bryanston Ascot Offices Midrand Ulwazi Building OVERVIEW
Slide 84: Growth in net profit from Southern African property operations
Growth in net profit from Southern African property operations Like-for-like growth of 5.1% INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 7.5% 6.8% 6.8% 6.5% 5.8% OVERVIEW PORTFOLIO SPANISH 5.1% MANAGEMENT & TREASURY PERFORMANCE FINANCIAL ACADEMY VUKILE PROSPECTS PLANS & STRATEGIC Q&A 2014
Slide 85: Ratio of cost to property revenue
Southern African total portfolio - ratio of cost to property revenue Containing cost ratios Net cost to property revenue INTRODUCTION Average 18.4 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Average 17.2 22.2 20.2 18.7 18.7 18.1 17.8 17.7 17.3 16.8 16.6 16.6 16.3 16.2 16.1 OVERVIEW PORTFOLIO SPANISH
Slide 86: Appendix B: Spanish Portfolio
Appendix B Spanish Portfolio www.vukile.co.za 86
Slide 87: Spanish portfolio footprint
Spanish portfolio footprint Spain portfolio profile INTRODUCTION Property rank 9 by value 4% Geographic profile % by value OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 1 10 El Faro Marismas del Polvorín 4 11% 2 11 Bahía Sur Edificio Alcobendas OVERVIEW PORTFOLIO SPANISH 11 3 Los Arcos 12 Mérida 7 4 Va
Slide 88: Spanish portfolio overview: Top assets
Spanish portfolio overview Top 10 assets INTRODUCTION El Faro Bahía Sur Los Arcos Vallsur Habaneras OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV €161.5m €119.5m €114.3m €96.4m €85.2m OVERVIEW PORTFOLIO SPANISH Province Badajoz Cadiz Seville Valladolid Alicante MANAGEMENT & TREASURY PERFORMANCE FIN
Slide 89: Spanish portfolio overview: Top assets
Spanish portfolio overview Top 10 assets Centro Comercial Parque Oeste de INTRODUCTION Kinépolis Retail Park Parque Principado Marismas del Polvorín Alameda Alcorcón OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV €59.8m €52.7m €34.1m €32.8m €29.1m OVERVIEW PORTFOLIO SPANISH Province Granada Madrid G
Slide 90: Retail tenant exposure
Retail tenant exposure Well diversified tenant mix Category profile by Rent 31 March 2018 30 September 2018 INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 19% Electronics 7% 12% DIY 4% OVERVIEW PORTFOLIO SPANISH 13% Sports goods 7% 10% Supermarkets 6% MANAGEMENT & TREASURY PERFORMANCE FINAN
Slide 91: Retail lease expiry profile
Retail lease expiry profile 46% of contractual rent expiring in 2028 and beyond (WALE 15 years to expiry and 4.5 years to break) INTRODUCTION Expiry Profile (% Rent) % of Contractual Rent Cumulative 100% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 54% 46% 46% 39% 42% 34% OVERVIEW PORTFOLIO SPANISH 28
Slide 92: Retail tenant exposure
Retail tenant exposure Low risk with c.90% national and international tenants Tenant profile - by contractual rent Top 10 tenants by rent INTRODUCTION Other OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 4.5% 10% 4.2% 3.6% OVERVIEW PORTFOLIO SPANISH Top 10 3.1% tenants MANAGEMENT & TREASURY PERFORMANCE
Slide 93: Spanish total portfolio composition
Spanish total portfolio composition Sectoral Profile - by Value Sectoral Profile - by GLA INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Top 10 Top 10 Properties By Value By GLA Properties 87% 66% 31% Shopping Centre Retail Park 48% 47% 76% OVERVIEW PORTFOLIO SPANISH of Total of Total 3% Of
Slide 94: Spanish weighted average base rentals
Spanish weighted average base rentals - €/m² Improved average base rentals post acquisitions INTRODUCTION Mar-18 Sep-18 Shopping Centres Los Arcos Bahía Sur 11% 0% 3% 51% Habaneras Weighted average OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN El Faro €19.20/m² 19.65 Vallsur Kinépolis Leisure Centre Re
Slide 95: Appendix C: Financial Results Overview
Appendix C Financial Results Overview www.vukile.co.za Group Interim results for the six months ending 30 September 2018 www.vukile.co.za 95
Slide 96: Group net income analysis
Group net income analysis Distributable income of R714mn for H1 FY2019 INTRODUCTION Income R1 244.7 million R’000 % Rental income 821 269 66.0 Municipal and rates recoveries 209 124 16.8 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Investment and other income 93 451 7.5 Net cash flow from cross-curren
Slide 97: Debt and foreign exchange policy
Debt and foreign exchange policy A prudent approach to managing risk INTRODUCTION Internal management policy of a maximum loan to value ratio of 40% with 35% targeted level Minimum of 75% of interest bearing debt to be hedged with a minimum 3 year fixed rate OVERVIEW RETAIL PORTFOLIO SOUTHERN AF
Slide 98: Sources of funding
Sources of funding R13.2bn of Vukile Group debt from diversified sources of funding Analysis of Group Debt by Currency INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (iv) (v) 4% (iv) 10% OVERVIEW PORTFOLIO SPANISH Foreign Spanish funders (EUR) (vi) MANAGEMENT & TREASURY PERFORMANCE FINANCIA
Slide 99: Southern African loan repayment and swap expiry profile
Analysis of Southern African loan repayment and swap expiry profile Well hedged with low risk expiry profile Southern African loan and hedging (swap & fixed debt) expiry profile INTRODUCTION 33.2% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 23.9% 23.7% 18.9% 22.7% OVERVIEW PORTFOLIO SPANISH 11.8% MAN
Slide 100: Spanish loan repayment and swap expiry profile
Analysis of Spanish loan repayment and swap expiry profile Low refinance risk over the next six years Spanish loan and hedging (swap & fixed debt) expiry profile INTRODUCTION (xi) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 67.2% 67.2% OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINA
Slide 101: Undrawn facilities
Undrawn facilities c.R1.5bn of available bank facilities INTRODUCTION Facility Amount Amount Drawn Facility Undrawn R'000 R'000 R'000 ABSA Multicurrency Revolving Credit Facility R850 000 R300 733 R549 267 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Investec Access Facility R100 000 R38 083 R61 917 I
Slide 102: GBP foreign exchange hedging
GBP foreign exchange hedging Maintaining sustainable predictable income while reducing currency volatility INTRODUCTION £'000 Nov-18 May-19 Nov-19 May-20 Nov-20 Net GBP dividends forecast (xv) £2 595 £2 434 £2 322 £2 378 £2 434 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN FEC hedge (£1 981) (£2 035) (
Slide 103: EUR foreign exchange hedging
EUR foreign exchange hedging Maintaining sustainable predictable income while reducing currency volatility INTRODUCTION €'000 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Net EUR dividends forecast (xvii) €4 294 €6 853 €6 986 €7 149 €7 115 €7 283 €8 762 €8 933 €10 134 €10 30
Slide 104: Cross Currency Interest Rate Swap Exposure
Cross Currency Interest Rate Swap Exposure Prudent currency management INTRODUCTION EUR Nominal ZAR Nominal EURZAR Initial EUR Fixed Rate ZAR Average Maturity €'000 R'000 Rate over Term Rate over Term Nedbank CCIRS June 2018 (€93.2mn) €93 200 R1 346 240 14.4446 1.90% 8.81% 14/06/2021 OVERVIEW RETAIL
Slide 105: Overview of DMTN Secured Property Portfolio
Overview of DMTN Secured Property Portfolio (Group 1 Notes) Quality Secured Portfolio INTRODUCTION Property Value R2 590mn 44% of income from top 10 tenants OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 6 Properties 72% of space let to national tenants GLA 153 500m² WALE of 4.4 years OVERVI
Slide 106: Overview of Unsecured Assets
Overview of Unsecured Assets Quality Unsecured Assets INTRODUCTION Total Unsecured Assets R4 200mn 3.7% Vacant (forecast to increase to R7 233mn) (xix) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 47% of income from top 10 tenants Property value R3 419mn 72% of space let to national tenants
Slide 107: Corporate Bond and Commercial Paper Issuances
Corporate Bond and Commercial Paper Issuances Balance of secured and unsecured debt Corporate Bonds Security Amount Reference Rate Margin Maturity Date Initial Term INTRODUCTION VKE07 Secured R200mn 3M JIBAR 1.65% 08/06/2020 5.1 years VKE08 Unsecured R110mn 3M JIBAR 1.80% 29/03/2019 3.0 years OVERVI
Slide 108: Notes to Treasury Management Slides
Notes to Treasury Management Slides Aligned with industry best standards INTRODUCTION (i) Loan-to-Value ratio calculated as a ratio of actual interest-bearing debt owing less cash and cash equivalents (excluding tenant deposits & restricted cash) divided by the sum of (i) the amount of the most rece
Slide 109: Notes to Treasury Management Slides (continued)
Notes to Treasury Management Slides (continued) Aligned with industry best standards INTRODUCTION (xv) Net forecast dividend after deducting interest costs on Vukile GBP debt. Forecast dividends are an estimate and will differ from actual dividends because of normal differences between forecasting a