Burstone Group Limited · JSE:BTN
Burstone — Investec Property Fund — H1 FY2014 Earnings Presentation
37 slides from Burstone's earnings presentation, September 2013
Slide 1: Results presentation – FY2014 interims
Results presentation – FY2014 interims September 2013
Slide 2: Overview
Overview Acquisitions Financial review Operational review Appendix
Slide 3: Highlights
Highlights • Interim distribution of 50.46 cpu – 7.7% increase on prior year • R1.6 billion of concluded and announced acquisitions • Capital structure converted to all-equity and REIT status obtained – effective 1 April 2013 • Gearing remains low at 10.1% but will increase to 31.0% post announced a
Slide 4: Fund snapshot at September 2013
Fund snapshot at 30 September 2013 Number of Properties 52 Market Capitalisation R5.0 billion Asset Value R4.4 billion GLA 590,658 m2 Vacancies 2.8% Gearing 10.1% NAV per Unit R13.02 Unit Price R15.65 Premium to NAV 20.2% 4
Slide 5: Comparative forward yields analysis
Fortress B 5.1% Resilient 5.8% Hyprop 6.5% Hospitality B 6.8% Growthpoint 6.9% Capital 7.6% Investec 7.8% Redefine 7.8% Fountainhead 8.0% Acucap 8.0% Sycom 8.1% Source: I Net Bridge as at 15 November 2013 Octodec 8.3% Premium 8.3% Vukile 8.4% Rebosis 8.5% Fortress A 8.6% SA Corporate 8.7% Dipula A 8
Slide 6: Forward yield vs. price / NAV
Forward yield vs. price / NAV 13.0% 12.0% Vividend 11.0% Synergy B 12-month rolling forward yield (%) 10.0% Tower Dipula B Arrowhead A Ascension A Annuity Emira Hospitality A Synergy A Vunani Arrowhead B 9.0% SA Corporate Ascension B Fortress A Dipula A Premium Rebosis Vukile Acucap 8.0% Octodec Syc
Slide 7: Acquisitions
Overview Acquisitions Financial review Operational review Appendix
Slide 8: Asset growth
Asset growth R5.7 bn 70 properties R4.2 bn 50 properties Assets Acquired R2.3 bn 33 properties Announced acquisitions R2.1 bn 31 properties Mar-12 Sep-12 Mar-13 Today 8
Slide 9: Acquisition summary
Acquisition summary Property name Sector GLA (m2) Cost (R’m) Transfer date SA Ladder Industrial 25 000 75 April 2013 5 Bond Street Office 5 870 118 May 2013 Minolta Bellville Office 2 166 25 May 2013 Minolta Highveld Industrial 2 955 36 May 2013 Total completed acquisitions 35 991 254 Big box retail
Slide 10: Disposal summary
Disposal summary Property name Sector GLA (m2) Cost (R’m) Transfer date Monsanto Industrial 9 819 28.6 April 2013 SABB Mayville Industrial 4 003 12.0 September 2013 Total disposals 13 822 40.6 • Total profit on disposal of R10.3m • No CGT under new REIT legislation – effective 1 April 2013 10
Slide 11: Financial review
Overview Acquisitions Financial review Operational review Appendix
Slide 12: Simplified income statement
Simplified income statement Sep 13 Sep 12 +/- R’m R’m % Net Property Income (excl. straight lining) 189.0 101.9 85.5% Operating expenses (2.9) (1.7) (42.8%) Asset Management Fee (12.6) (6.6) (47.6%) Net finance costs (13.4) (14.0) 4.3% Taxation 0.0 (0.0) 0.0% Distributable profit 160.1 79.6 101.0% D
Slide 13: Distribution reconciliation
Distribution reconciliation Sep 13 Sep 12 Net property income 210.0 117.1 Less: straight-line rental revenue adjustment (21.0) (15.2) Other operating costs (15.5) (8.3) Finance costs (18.5) (20.0) Finance income 5.1 6.1 Taxation (excluding capital gains tax and deferred tax) 0.0 (0.0) Distributable
Slide 14: Key ratios
Key ratios Sep 13 Sep 12 Income statement • Net cost to income ratio 21.8% 16.5% • Gross cost to income ratio 34.0% 24.7% • Arrears % of total collectibles 0.4% 0.2% Balance sheet • Gearing 10.1% 19.5% • NAV per share (cents) 1,301.6 1,085.8 • Shares in issue 317 220 000 170 000 000 14
Slide 15: Cash flow extracts
Cash flow extracts Sep 13 Sep 12 R’m R’m Cash generated from operations 197.5 89.4 Net finance costs paid (14.0) (4.3) Distributions paid to unitholders (164.2) (83.8) Net cash flow from operating activities 19.2 1.3 Net cash flow from investing activities (221.5) (229.4) Net cash flow from financin
Slide 16: Balance sheet
Balance sheet Low gearing – • Significant New SPV • Syndicate of 10.7% headroom to structure in place banks include pursue to access term Nedbank, attractive debt market Standard Bank acquisitions, and Investec quickly • Initial R500m tranche Hedging policy • At least 75% of All-in cost of • Relianc
Slide 17: Debt maturity profile
Debt maturity profile • R million DMTN 250 Bank debt - post period end 276 250 134 40 FY16 FY17 FY18 FY19 • Weighted average debt expiry – 3.4 years • No refinancing until April 2016 17
Slide 18: Funding profile
Funding profile Debt at 30 September 2013 Expiry Rate Amount (R'm) DMTN - Tranche 1 April 2015 JIBAR + 140 bp 134 DMTN - Tranche 2 April 2016 JIBAR + 155 bp 40 DMTN - Tranche 3 April 2017 JIBAR + 165 bp 50 DMTN - Tranche 6 April 2017 Fixed @ 8.8% 226 Total DMTN 450 Facilities available Investec brid
Slide 19: Operational review
Overview Acquisitions Financial review Operational review Appendix
Slide 20: Portfolio map
Portfolio map of a x3 ffi Limpopo Mpumalanga North West x1 af Northern Cape x1 4 oA Free State KwaZulu-Natal =8é Eastern Cape x8 aff 4 Oho x3 bedihiad Industrial
Slide 21: Leasing activity
Leasing activity Office Industrial Retail Total • 32 800 m2 industrial Area (m²) Area (m²) Area (m²) Area (m²) space let Tenanted at 31 March 2013 85,243 285,878 180,415 551,536 • Strong escalations achieved Sold (13,822) (13,822) • Reversions on Acquired¹ 8,036 27,955 35,991 anomalous short- Expiri
Slide 22: Vacancies (% GLA)
Vacancies (% GLA) • GLA (m2) 7.3% 6.8% 31 March 2013 30 September 2013 2.9% 2.8% 2.5% 2.1% 1.8% 1.8% Office Industrial Retail Total 22
Slide 23: Forward lease expiry profile
Forward lease expiry profile 42.3% 35.8% Revenue 19.6% GLA 15.2% 14.3% 12.3% 11.7% 12.0% 11.3% 10.5% 7.4% 7.5% 2014 2015 2016 2017 2018 April 2018 Onwards 23
Slide 24: Portfolio composition
Portfolio composition Revenue GLA Asset Value 23% 33% 16% 33% 43% 42% March 2013 51% 35% 24% 46% 27% 17% 40% 37% 31% September 2013 27% 52% 23% Offices Industrial Retail 24
Slide 25: Geographic spread
Geographic spread Geographic spread by GLA Geographic spread by revenue 2% 2% 1% 2% 14% 12% 1% 6% 3% 4% 6% 1% 5% 67% 73% Eastern Cape Free State Gauteng Eastern Cape Free State Gauteng KZN Limpopo Mpumalanga KZN Limpopo Mpumalanga Northern Cape North West Western Cape Northern Cape North West Wester
Slide 26: Tenant spread
Tenant spread Single vs Multi-Tenanted by Revenue Tenant profile (based on Revenue) 15% 46% 15% 54% 70% Single-tenanted Multi-tenanted A B C 26
Slide 27: Appendix
Overview Acquisitions Financial review Operational review Appendix
Slide 28: Completed acquisitions
Completed acquisitions SA Ladder 5 Bond Street Physical address 32 Potgieter Street, Alrode Physical address 5 Bond Street, Midrand GLA 25,000 GLA 5,870 Tenancy Single Tenancy Single WALE (by GLA) 10.2 WALE (by GLA) 9.6 Cost of acquisition R75.0m Cost of acquisition R118.4m Major tenants SA Ladder M
Slide 29: Completed acquisitions
Completed acquisitions Minolta Bellville Minolta Highveld Physical address 4 Mike Pienaar Boulevard, Bellville, Physical address 14A Esdoring Nook, Techno Park, Cape Town Highveld, Pretoria GLA 2,166 GLA 2,955 Tenancy Single Tenancy Single WALE (by GLA) 3.5 WALE (by GLA) 8.5 Cost of acquisition R24.
Slide 30: Announced acquisitions
Announced acquisitions Cash & Carry Silverlakes Zenth East Rand Physical address Bendeman Boulevard, Silverlakes, Physical address Cnr North Rand and Herman Pieters Pretoria Road, Boksburg GLA 12,492 GLA 14,144 Tenancy Multi Tenancy Single WALE (by GLA) 6.7 years WALE (by GLA) 8.7 years Cost of acqu
Slide 31: Announced acquisitions
Announced acquisitions Bigen Africa Martin & Martin Physical address 1617 Allan Cormack Street, Pretoria Physical address 9 Quality Street, Isando, Johannesburg GLA 5,545 GLA 19,972 Tenancy Single Tenancy Single WALE (by GLA) 10 years WALE (by GLA) 10 years Cost of acquisition R125.1m Cost of acquis
Slide 32: Announced acquisitions
Announced acquisitions Khayelitsha The Braes Physical address Sulani Drive, Khayelitsha, Cape Town Physical address Cnr William Nicol & Bryanston Drive, GLA 2,911 Bryanston GLA 4,372 Tenancy Multi Tenancy Multi WALE (by GLA) 4.5 years WALE (by GLA) 1.9 years Cost of acquisition R31.9m Major tenants
Slide 33: Announced acquisitions
Announced acquisitions Wellness Centre Greenhill Village Physical address Cnr Culross & Main Road, Bryanston Physical address Lynwood Road, Lynwood, Pretoria GLA 1,444 GLA 4,591 Tenancy Multi Tenancy Multi WALE (by GLA) 1.7 years WALE (by GLA) 2.5 years Cost of acquisition R29.2m Cost of acquisition
Slide 34: Announced acquisitions
Announced acquisitions Danclove Vinebridge Physical address 200 Constantia Drive, Constantia Physical address 99 Jip de Jager Drive, Tyger Valley, Kloof, Roodepoort Cape Town GLA 8,011 GLA 2,297 Tenancy Single Tenancy Multi WALE (by GLA) 5.4 years WALE (by GLA) 1.8 years Cost of acquisition R142.0m
Slide 35: Announced acquisitions
Announced acquisitions Barinors Vineyards Linbro Park Physical address 99 Jip de Jager Drive, Tyger Valley, Physical address 10 Starfield Drive, Frankenwald, Cape Town Gauteng GLA 4,941 GLA 3,246 Tenancy Multi Tenancy Multi WALE (by GLA) 1.9 years WALE (by GLA) 1.7 years Cost of acquisition R96.3m C
Slide 36: Announced acquisitions
Announced acquisitions Beechwood Nicol Main Physical address 33 Bearing Crescent, Silverton, Physical address 6 Bruton Road, Bryanston, Pretoria Johannesburg GLA 5,677 GLA 11,863 Tenancy Single Tenancy Multi WALE (by GLA) 5 years WALE (by GLA) 5.1 years Cost of acquisition R50.8m Cost of acquisition
Slide 37: Disclaimer
Disclaimer The information contained herein is for information purposes only and readers should not rely on such information as advice in relation to a specific issue without taking financial, banking, investment or professional advice. Although information has been obtained from sources believed to
Investec Property Fund — H1 FY2014 Earnings Presentation on 6ix