Slide 1: Annual Results for the year ended 31 March 2020
ANNUAL RESULTS for the year ended 31 March 2020
Slide 2: Contents
CONTENTS INTRODUCTION 2 STRATEGY UPDATE 4 KEY PRIORITIES 8 COVID-19 10 STRENGTHEN BALANCE SHEET 14 AT A GLANCE 19 FINANCIAL RESULTS 21 KEY INDICATORS 25 CAPITAL AND TREASURY MANAGEMENT 29 FOURWAYS MALL 32 PORTFOLIO UPDATE 37 EUROPEAN RETAIL 40 CORPORATE GOVERNANCE AND ORTHOTOUCH 43 SUMMARY 45 ACCELE
Slide 3: Introduction
Be cea INTRODUCTION
Slide 4: Introduction
INTRODUCTION • SA economy was already on downward trajectory pre COVID-19 • COVID-19 has accelerated this trajectory as well as change in: – how we work – how we socially interact – how our tenants and their customers will do business • Extensive additional scenario planning and modelling undertaken
Slide 5: Strategy Update
STRATEGY UPDATE 4
Slide 6: Strategic Shift Towards a Nodal Strategy
STRATEGIC SHIFT TOWARDS A NODAL STRATEGY STRATEGY STATEMENT Building cities of the future, by focusing on property fundamentals within specifically identified nodes. Accelerate’s portfolio strategy has historically been driven by retail bias, underpinned by a targeted revenue spit of 70-15-15 betwee
Slide 7: Key Identified Strategic Nodes
KEY IDENTIFIED STRATEGIC NODES OUR APPROACH THE NODES WE CURRENTLY CHOOSE TO PARTICIPATE IN, IN SOUTH AFRICA ARE: Our approach to sustainable business includes Fourways, Gauteng selecting the locations of our properties based Lies on northern outskirts of Johannesburg along key transport routes clos
Slide 8: Our Offshore Strategy
OUR OFFSHORE STRATEGY A proven resilient strategy in any economic climate Accelerate Property Fund Europe (APFE) was established in 2016 to acquire or develop commercial real estate in Central and Eastern Europe. The offshore strategy to target commercial real estate is underpinned by: • Single-tena
Slide 9: Key Priorities
KEY PRIORITIES 8
Slide 10: Key Priorities
KEY PRIORITIES RESPONDING TO COVID-19 • Strategic capex spend • Supporting our tenants • Tenant retention • Safety of tenants, shoppers and our people GREEN INITIATIVES • Focused marketing • Major solar investment • Ensure liquidity • Water savings • Strengthening balance sheet • Reducing carbon foo
Slide 11: COVID-19
COVID-19 10
Slide 12: Tenant Assistance and Financial Impact
TENANT ASSISTANCE AND FINANCIAL IMPACT The fund is and has been in ongoing negotiations with tenants in order to not only assist our tenants during this difficult time, but also to ensure the long-term sustainability of the fund as well as our tenants. The process followed is as follows: • The Prope
Slide 13: COVID-19 Safety Action
COVID-19 SAFETY ACTION Accelerate is committed to providing a safe and hygienic environment for our shoppers, tenants and employees. The fund has implemented safety measures in line with the Adjusted Risk Management Schedule as set out by government, including: • Increased frequency of daily sanitis
Slide 14: COVID-19 Safety Action Continued
COVID-19 SAFETY ACTION CONTINUED ACCELERATE PROPERTY FUND ANNUAL RESULTS 2020 13
Slide 15: Strengthen Balance Sheet
STRENGTHEN BALANCE SHEET 14
Slide 16: Property Sales to Date
PROPERTY SALES TO DATE The following properties were sold by the fund since the commencement of the balance sheet optimisation process FY2019: Property Sector Sales price Value held in APF books % discount Eshowe Mall Retail 60 000 000 56 473 667 Highway Gardens Office 27 000 000 27 000 000 Traigle
Slide 17: LTV and ICR Build Up – Current Valuations and Rental Levels
LTV AND ICR BUILD UP – CURRENT VALUATIONS AND RENTAL LEVELS LTV at 31 March 2020 Post (based on disposal of Post potential Post potential LTV effect of current current Sept 2020 March 2021 potential sale contractual sales Portfolio 2 Portfolio 3 distribution distribution of offshore rental levels) p
Slide 18: Breakdown of Held for Sale Assets, Sale 2 and Sale 3 Assets
BREAKDOWN OF CURRENT HELD FOR SALE ASSETS, SALE 2 AND SALE 3 ASSETS ASSETS HELD FOR SALE AT 31 MARCH 2020: Property name Sales price Status 73 Hertzog 158 135 356 Sales agreement finalised – Transfer delayed due to COVID-19 Cherry Lane 105 246 030 Offer received – In DD Edcon Warehouse 92 000 000 Gu
Slide 19: Portfolio Transformation Since Listing
PORTFOLIO TRANSFORMATION SINCE LISTING Value of Number % of core core assets of core properties Rbn properties by value At listing 4,5 20 81,5 31 March 2020 12,1 35 94,0 THE PORTFOLIO IS UNDERPINNED BY QUALITY ASSETS, INCLUDING: • 50% Fourways Mall (super-regional retail) • Cedar Square (regional re
Slide 20: At a Glance
AT A GLANCE 19
Slide 21: Snapshot as at 31 March 2020
SNAPSHOT AS AT 31 MARCH 2020 Property portfolio Asset value: R12,6 billion A - Large national 56,8% Tenant profile B - National listed/franchises 20,8% (% of revenue) Fourways*** 175 451 m² C - Other 22,4% Charles Crescent – Sandton 47 692 m² Strategic nodes Foreshore – Cape Town 52 152 m² Tenant re
Slide 22: Financial Results
FINANCIAL RESULTS 21
Slide 23: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 March 2020 31 March 2019 HIGH-LEVEL OVERVIEW OF POSITION (R’000) (R’000) • Investment property movement due to: ASSETS Non-current assets 12 373 281 12 205 878 – Disposal of non-core assets Investment property 12 231 279 12 203 592 – Capex spend Right-
Slide 24: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 31 March 2020 31 March 2019 HIGH-LEVEL OVERVIEW OF PERFORMANCE (R’000) (R’000) • Revenue movement due to: Revenue, excl. straight-line rental revenue adjustment 1 054 228 1 190 524 – Sale of non-core assets during the period Straight-line rental revenue
Slide 25: Distribution Build-Up
DISTRIBUTION BUILD-UP Actual Actual 31 March 2020 31 March 2019 (R’000) (R’000) DISTRIBUTION ANALYSIS Distributable earnings 285 497 475 734 Less: interim distribution 151 275 254 352 Less: capital retention 134 222 - Final distribution - 221 382 SHARES QUALIFYING FOR DISTRIBUTION Number of shares a
Slide 26: Key Indicators
KEY INDICATORS 25
Slide 27: Key Indicators
KEY INDICATORS 31 March 31 March Key ratios 2020 2019 Interest cover ratio 2,1 2,3 LTV* 45,5% 39,0% Net asset value (Rbn) 6,8 8,0 Senior secured rating A (za) AA- (za) Senior unsecured rating BBB (za) BBB+ (za) 31 March 31 March Key indicator summary 2020 2019 Portfolio value (Rbn) 12,6 12,7 GLA (m²
Slide 28: Lease Expiry Profile, Escalations and Debtors Ageing
LEASE EXPIRY PROFILE, ESCALATIONS AND DEBTORS AGEING LEASE EXPIRY PROFILE BY GROSS RENTAL CONTRACTUAL ESCALATIONS > Mar 24 31 March 2020 31 March 2019 Sectoral type (%) (%) Mar 24 Industrial 7,3 7,3 Mar 23 Office 7,7 7,6 Retail 7,6 7,3 Mar 22 SA portfolio 7,6 7,4 Mar 21 European retail 0,0 0,0 0,0%
Slide 29: Vacancy Profile
VACANCY PROFILE VACANCIES AS AT 31 MARCH 2020# (M²) The office vacancy relates to B-grade properties and office space attached to neighbourhood centres Sectoral type 31 March 2020 31 March 2019 Industrial 8,6% 2,5% APF’S OFFICE SPLIT BY REVENUE (%) Office* 25,05% 21,17% A Retail 10,0% 6,25% B B to b
Slide 30: Capital and Treasury Management
CAPITAL AND TREASURY MANAGEMENT 29
Slide 31: Long-Term Debt
LONG-TERM DEBT LONG-TERM DEBT FUNDING MATURITY PROFILE (RM) 31 Mar 2020 31 Mar 2019 May 20 Long-term Jul 20 debt allocation (Rm) (%) (Rm) (%) Aug 20 Sep 20 Debt capital markets 1 785 29,6 1 785 33,2 Oct 20 Feb 21 Bank funding 4 239 70,4 3 590 66,8 Jul 21 Oct 21 Total 6 024 100,0 5 375 100,0 Dec 21 A
Slide 32: Re-financing Completed Post Year End
RE-FINANCING COMPLETED POST YEAR END The following current debt facilities at 31 March 2020 have been refinanced post pear end. Funder Nominal amount (R’000) Term Margin – linked to 3-month JIBAR RMB Facility P 129 328 1 year 235 bps RMB Facility R 48 000 1 year 235 bps RMB Facility X 32 500 6 month
Slide 33: Fourways Mall
FOURWAYS MALL 32
Slide 34: Tenant Mix and Vacancies
TENANT MIX AND VACANCIES BALANCED TENANT MIX TRADING • World class shopping centre Category % of GLA • Easy access via secured undercover parking Apparel 30% • Decent trading trajectory from opening peaking in November (black Friday sales) and December (Christmas sales) Electronics 3,5% • Very densi
Slide 35: Kidzania and Other Entertainment Offerings
KIDZANIA AND OTHER ENTERTAINMENT OFFERINGS KIDZANIA • Construction to re-commence end of August 2020 with a 6 month completion period • Full belief in the unique educational entertainment offering provided by the concept for children BOUNCE • Under current regulations will only open under level 1 •
Slide 36: Resilience During COVID-19 and Beyond
A RESILIENCE DURING COVID-19 AND BEYOND GREATER RETENTION OF CATCHMENT AREA SHOPPERS AND TENANTS • More shoppers working from home and travelling shorter • Extensive safety measures put in place distances due to COVID-19 • Deep cleanse of malls at night • The new Fourways Mall now matching offering
Slide 37: The Fourways Mall Equalisation
THE FOURWAYS MALL EQUALISATION THE FOURWAYS MALL DEVELOPMENT EQUALISATION WAS CONCLUDED ON 29 NOVEMBER 2019 • Forward revenue of R602,5 million (net) • Accelerate portion before equalisation 37,9% • Additional percentage purchased to own the mall 50/50: 12,1% • Cap rate: 8% • Application of the equa
Slide 38: Portfolio Update
PORTFOLIO UPDATE 37
Slide 39: Cedar Square and Eden Meander
CEDAR SQUARE AND EDEN MEANDER CEDAR SQUARE EDEN MEANDER TURNOVERS TURNOVERS • Turnover figures up 5,2% FY2020 vs FY2019 • Turnover figures up 13,9% FY2020 vs FY2019 • Christmas trade November 2019 to January 2020 flat • Christmas trade November 2019 to January 2020 up 26,4% vs prior year vs prior ye
Slide 40: Edcon
EDCON EDCON EXPOSURE AND TRADING • APF’s exposure to Edcon is limited to Jet and Edgars in Fourways Mall and Edgars Polokwane • The exposure is 1,2% of revenue (6,3% by GLA) for Fourways Mall and 1,6% by revenue (2,0 % by GLA) for APF as a whole • JET to be sold to Truworths group • Edcon Fourways M
Slide 41: European Retail
Nees 4 WSs EUROPEAN RETAIL Te
Slide 42: OBI Performance
OBI PERFORMANCE Tenant turnover growth Fair value at Fair value at year on year Portfolio Remaining GLA 31 March 2020 31 March 2019 31 Dec 2019 by rental income lease term Buildings (m²) (€’000) (€’000) (%) (%) (years) AUSTRIA Wien 3 16 356 43 691 000 42 940 000 9,5 40 6,58 Mauthausen 5 146 6 799 00
Slide 43: Resilient During and After COVID-19
RESILIENT DURING AND AFTER COVID-19 • Portfolio independently valued annually by CBRE, value confirmed in June 2020 as € 92 528 000 at a yield of 6,2% • Increased return due to devaluation of the Rand (cross currency swap limited to € 21 000 000) • OBI paid 50% of rental during the lockdown period (
Slide 44: Corporate Governance and Orthotouch
CORPORATE GOVERNANCE AND ORTHOTOUCH 43
Slide 45: Corporate Governance and Orthotouch
CORPORATE GOVERNANCE AND ORTHOTOUCH CORPORATE GOVERNANCE • Composition of the board enhanced with the addition of 3 new directors • George Cavaleros CA (SA) – Retired audit partner with 30 years experience at Deloitte & Touche. Member of the CFA institute, Institute of Internal Auditors and the SA I
Slide 46: Summary
SUMMARY 45
Slide 47: Summary of Key Takeaways and Outlook
SUMMARY OF KEY TAKEAWAYS AND OUTLOOK STRATEGIC SHIFT • Effective hedging • Focusing on right nodes • Short to medium term retention of distributions • Property fundamentals OUTLOOK COVID-19 RESPONSE • Based on the current market conditions and the impact it has on the business, it may be unlikely th
Slide 48: Annexure 1: Property Portfolio Summary
ANNEXURE 1 PROPERTY PORTFOLIO SUMMARY 47
Slide 49: Sector and Geographic Summary
SECTOR AND GEOGRAPHIC SUMMARY SECTOR PROFILE BY REVENUE (%) SECTOR PROFILE BY GLA (%) European retail European retail Retail Retail Industrial 10,2 Industrial 12,4 Office 5,9 Office 16,4 22,3 24,4 61,6 46,8 GEOGRAPHIC PROFILE BY REVENUE (%) GEOGRAPHIC PROFILE BY GLA (%) South Africa South Africa Aus
Slide 50: Tenant Profile
TENANT PROFILE TENANT PROFILE BY REVENUE (%) SINGLE VS MULTI-TENANTED BY GLA (%) A Single B Multi C 22,4 20,8 65 35 56,8 A: Large national tenants, large listed tenants and major franchises, including Absa Bank, Capitec Bank, Dis-Chem, Edcon, FNB, Foschini, Jet Stores, KPMG, Massmart, Medscheme, Ned
Slide 51: Annexure 2: Our Fourways Exposure
ANNEXURE 2 OUR FOURWAYS EXPOSURE 50
Slide 52: Our Fourways Footprint
OUR FOURWAYS FOOTPRINT Number Property 1 Fourways Mall 2 Leroy Merlin (not owned by APF) 3 Cedar and BMW bulk 4 Cedar Square Shopping Centre 5 BMW Fourways 6 Valleyview Centre 11 7 The Buzz Shopping Centre 8 The Buzz bulk 9 Waterford 6 2 10 FORD Fourways 4 3 1 11 The Leaping Frog 5 8 7 10 9 ACCELERA
Slide 53: Annexure 3: Our Leadership
ANNEXURE 3 OUR LEADERSHIP 52
Slide 54: Our Leadership
OUR LEADERSHIP OUR BOARD OF DIRECTORS With a wealth of diverse experience in property, business and governance, our Board of Directors embrace excellence in corporate governance as the cornerstone of value creation. Executive Directors Mr Dimitri Kyriakides (65) SET TG Chief Financial Officer (CFO)
Slide 55: Our Leadership Continued
OUR LEADERSHIP CONTINUED Non-Executive Directors Mr Timothy J Fearnhead (71) N R Independent Director and Chairman Appointed: 1 June 2013 Ms Kolosa Madikizela (40) AR SET Qualifications: CTA • CA(SA) • AdvDip Independent Director (Banking) Appointed: 1 June 2013 Expertise: Audit, banking, corporate
Slide 56: Our Leadership Continued
OUR LEADERSHIP CONTINUED Non-Executive Directors Mr Abel M Mawela (58) AR SET Independent Director Associate Prof. François M Viruly (60) I R Appointed: 1 May 2019 Independent Director Qualifications: MBA • BCom (Hons) Appointed: 1 April 2014 Expertise: Finance, audit, corporate Qualifications: BA •
Slide 57: Our Leadership Continued
OUR LEADERSHIP CONTINUED BOARD DEMOGRAPHICS AGE (YEARS) INDEPENDENCE (%) SECTOR EXPERIENCE (%) TENURE (YEARS) ACCELERATE PROPERTY FUND ANNUAL RESULTS 2020 56
Slide 58: Annexure 4: Orthotouch Properties
ANNEXURE 4 ORTHOTOUCH PROPERTIES 57
Slide 59: Orthotouch Properties
ORTHOTOUCH PROPERTIES ACCELERATE PROPERTY FUND Properties sold to date: Independent Consideration Fair value per Fair Value Fair value per Valuation for Consideration paid for as Accelerate Movement from Accelerate Properties bought at listing from listing – paid for up front deferred Total paid by
Slide 60: Thank You
THANK YOU INVESTOR RELATIONS Articulate Capital Partners: Morne Reinders Tel: 082 480 4541 Email: morne@articulatepartners.com ACCELERATE PROPERTY FUND ANNUAL RESULTS 2020 59
Slide 61: Disclaimer
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Slide 62: www.acceleratepf.co.za
www.acceleratepf.co.za