Delta Property Fund Limited · JSE:DLT
Delta Property Fund — FY2014 Earnings Presentation
30 slides from Delta Property Fund's earnings presentation, Feb 28, 2014
Slide 1: Delta Property Fund Annual Results
PROPERTY FUND DELTA PROPERTY FUND ANNUAL rR EOULTS for the year ending 28 February 2014
Slide 2: Proceedings
Proceedings • Introduction Sandile Nomvete • Highlights • Unitholder profile • Financial review Bronwyn Corbett • Consolidated property portfolio • Post year end acquisitions • Capex • Challenges / Prospects Sandile Nomvete 2
Slide 3: Introduction
Introduction
Slide 4: Introduction to Delta
Introduction to Delta • Black managed REIT • Level 2 BEE property charter rating • Defensive portfolio at an average value per property of R90.5 million • Representation in all 9 provinces • Ratio of government to non-government (GLA) = 56:44 (2013 – 69:31) • Secure long term sovereign underpin comm
Slide 5: Highlights
Highlights ,
Slide 6: Highlights for the year under review
Highlights for the year under review • Distribution of 40.18 cents (annual 72.69 cents) per linked unit above guideline • Total investment property of R7 billion (2013 – R2.12 billion) • Portfolio occupancy of 95.4% • Leases renewed for 156 263m² (25% of portfolio) • Double digit distribution growth
Slide 7: Unitholder profile
Unitholder profile As at 28 February 2014 Units held Holding Coronation Fund Managers 87 980 105 20.48% Stanlib Asset Management 78 961 689 18.38% Public Investment Corporation 67 342 494 15.68% Directors and management 39 930 588 9.30% Grindrod 20 707 432 4.82% Subtotal 294 922 308 68.66% Other 134
Slide 8: Financial review
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Slide 9: Financial Highlights
Financial Highlights • 23.6% increase in distribution (on 6 months ended 31/08/2013) • DCM › Rolled R190 million 3 month commercial paper › Secured R362 million 3 year corporate bond › Average rate - 6.68% • Multibanked (Nedbank, Standard Bank, Sanlam) • Weighted average cost of funding 7.50% • 52.2
Slide 10: Financial overview
Financial overview 28 February 28 February 2014 2013 Distribution per linked unit 72.69 23.69 Cost to income ratio *25.5% 23.6% Gearing level 47.5% 40.9% Weighted average interest rate 7.5% 8.9% Fixed vs. floating 32 : 68 82 : 18 Average debt fixed period (years) 3.0 2.80 Fixed rate debt maturity %
Slide 11: Distributable Income Statement
Distributable Income Statement 28 February 28 February R’000 2014 2013 Net property income 442 689 89 314 Rental income 594 209 116 867 Property operating expenses* (151 520) (27 553) Administration expenses* (48 090) (6 703) Net finance costs (109 925) (49 610) Sundry income 12 300 10 Net pre-acqui
Slide 12: Group Debt Summary
Group Debt Summary As at 28 Feb 2014 Post Year-End Type R'm Weighted Ave. R'm Weighted Ave. Interest Rate Interest Rate Revolving Facilities 489 7,60% 489 7,60% Floating Facilities 1 470 7,64% 693 7,76% Fixed Facilities 1 150 7,78% 1 894 8,45% DCM Programme 552 6,68% 552 6,68% TOTAL 3 661 7,53% 3 62
Slide 13: Group debt maturity profile
Group debt maturity profile Maturity date 28-Feb-15 28-Feb-16 28-Feb-17 28-Feb-18 28-Feb-19 0 50 100 150 200 250 300 350 400 450 500 550 600 650 R’ million DCM Programme Fixed Facilities Floating Facilities Revolving Facilities 13
Slide 14: Consolidated property portfolio
Consolidated property portfolio
Slide 15: Delta at a glance
Delta at a glance 28 February 2014 28 February 2013 Market capitalisation R3.39 billion R1.39 billion No of properties 77 20 Valuation of portfolio R6.97 billion R2.12 billion Average value per property R90.5 million R106 million Gross lettable area 621 442 sqm 203 261 sqm Sectorial profile Office:
Slide 16: Consolidated property portfolio analysis
Consolidated property portfolio analysis SECTORAL PROFILE: GLA GEOGRAPHIC PROFILE: GLA BUILDING GRADE: GLA 6% 4% 28% 79% 7% 5% 26% 7% 9% 1% 5% 0% 46% 21% 56% Office: government (56%) Gauteng (46%) KwaZulu Natal (26%) Office: other (28%) Northern Cape (6%) Eastern Cape (4%) Western Cape (5%) Limpopo
Slide 17: Post Year end Acquisitions
Post Year end Acquisitions Tembisa MegaMart 17
Slide 18: Acquisition
Acquisition Property Name: Thembisa OMC Durban The Marine Servamus MegaMart Sector: Retail Office Office Office Area (m²): 14 096 44 668 24 517 13 716 Location: Thembisa, Durban, Kwa- Durban, Kwa- Durban, Kwa- Gauteng Zulu Natal Zulu Natal Zulu Natal Anchor Tenants: Pick ‘n Pay, Pep, Telkom, Ithala,
Slide 19: Leasing
Leasing • Portfolio vacancy at 28 February 2014 of 4.6% (GLA) • 77 Properties (2013 – 20 properties) • Lease renewals = 156 263m² (25.15% of portfolio) • Lease expiry (GLA) > 28/02/2017: 46.2% • Lease expiry (rental) > 28/02/2017: 46.9% • Average base rentals increased by 8.2% • Average rental escal
Slide 20: Consolidated property portfolio analysis: lease expiry rental
Consolidated property portfolio analysis Lease expiry profile: rental Incremental rental income % Cumulative rental income 50 100 100 90 80.0 40 80 66.9 70 30 53.0 60 50 20 40 30.1 30 10 20 10 17.6 12.5 22.9 13.9 13.1 20.0 0 0 28 Feb 15 29 Feb 16 28 Feb 17 28 Feb 18 28 Feb 19 Beyond 2019 Incremental
Slide 21: Consolidated property portfolio analysis: lease expiry GLA
Consolidated property portfolio analysis Lease expiry profile: GLA Incremental GLA % Cumulative GLA 50 100 100 90 40 78.6 80 67.9 70 30 53.7 60 50 20 21.6 33.6 40 30 10 20 10 4.6 17.0 12.0 20.1 14.2 10.7 21.4 0 0 Vacant 28 Feb 15 29 Feb 16 28 Feb 17 28 Feb 18 28 Feb 19 Beyond 2019 Incremental GLA Cu
Slide 22: Weighted average rental escalation
Consolidated property portfolio analysis Weighted average rental escalation Rental escalation % 10 9 7.99 8 7 6 8.52 8.43 7.00 7.45 5 Industrial Office: government Office: other Retail Sectoral Average 22
Slide 23: Weighted average rental
Consolidated property portfolio analysis Weighted average rental Rental (R/sqm) 120 100 90.47 80 60 40 20 28.78 104.72 84.45 80.81 0 Industrial Office: government Office: other Retail Sectoral Overall 23
Slide 24: Capex
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Slide 25: Capex projects in progress
Capex projects in progress UPDATE ON FORUM BUILDING: renovation project: offices, SARS RANDBURG : extra parking: R14,16 million meeting rooms, new lifts, kitchens, ablutions and parking (approved & committed) (Prior year TI) UPGRADED boardroom Salient features Salient features • Building area: 8 496
Slide 26: Capex projects in progress
Capex projects in progress CMH : Parking Facility Development – R152,633 million LIBERTY TOWERS : Massmart – additional floor – (still to be approved) R39 million (still to be approved) Salient features • Building area: 10 974 m2 • Location: Durban CBD • Anchor tenant: CMH Refurbishment • Dev. cost:
Slide 27: Challenges & Prospects
Challenges & Prospects
Slide 28: Challenges
Challenges Risks / Challenges Mitigants Treasury Directive Level 2 contributor 3 year, 5.5% escalation Short term measure to “clean” up External MANCO will become prevalent in the future Interest Rate Actual fixed rate instruments Market Debt capital market Multibanked Bond yields & liquidity Double
Slide 29: Prospects
Prospects • Merger prospects - 7th largest property fund • Improved DCM rating due to size • Double digit distribution growth • Africa strategy - investment • Yield enhancing pipeline • Leverage on BEE status (Parastatel / BEE sensitive tenants) 29
Slide 30: Q&A
PROPERTY FUND | Q&A == Annual results