Redefine Properties Limited · JSE:RDF
Redefine Properties — Corporate Update (August 2023)
28 slides from Redefine Properties's corporate update, August 2023
Slide 1: Redefine pre-close update for the year ending 31 August 2023
1 Redefine pre-close update for the year ending 31 August 2023
Slide 2: Our Conversation
OUR CONVERSATION Strategic overview 1 Andrew Konig Property asset platform 2 Leon Kok & Andrew Konig Financial insights 3 Ntobeko Nyawo Centurion Mall, Gauteng, South Africa Redefine pre-close update for the year ending 31 August 2023
Slide 3: Strategic Overview: What got us here won't get us there
STRATEGIC OVERVIEW What got us here won’t get us there 3 Redefine pre-close update for the year ending 31 August 2023 155 West Street, Gauteng, South Africa
Slide 4: Our operating context
Our operating context Commercial real estate fundamentals are beginning to build a positive momentum STRATEGIC OVERVIEW Government and organised business’s plan to remove obstacles to Public service inefficiency has created constructive capital inclusive economic growth and job creation through thre
Slide 5: What keeps us awake at night
What keeps us awake at night Overlapping aftershocks of the pandemic, elevated inflation, an energy crisis and higher funding costs Our integrated approach to ERM fosters strategic resilience as we continue to pursue growth STRATEGIC OVERVIEW An 18-month strategic risk assessment and deliver sustain
Slide 6: Responding to market dynamics
Responding to market dynamics Our strategic priorities guide our decision-making and execution to ensure sustained value creation Market dynamics Strategic priorities STRATEGIC OVERVIEW Invest ▪ Value threatened by low growth and rising interest rates ▪ Preserve value through organic growth and asse
Slide 7: Recap of our strategy in action
Recap of our strategy in action We have done what we said we would do Market dynamics STRATEGIC OVERVIEW Invest strategically ▪ Restored EPP to cash generating ▪ Restructured the ownership of the ▪ Stabilised asset values investment proposition government-tenanted office portfolio Optimise capital ▪
Slide 8: Looking ahead
Looking ahead There is cause for optimism that the property cycle has bottomed and that 2024 will be the turning point STRATEGIC OVERVIEW ▪ The business has been stabilised ▪ There is moderate improvement in all operational metrics ▪ Navigating the effectiveness of: 1 The structural energy transitio
Slide 9: Property Asset Platform: South Africa
PROPERTY ASSET PLATFORM SOUTH AFRICA Creating smart and sustainable spaces 9 Redefine pre-close update for the year ending 31 August 2023 Alice Lane, Gauteng, South Africa
Slide 10: South Africa portfolio overview
South Africa portfolio overview South Africa PROPERTY ASSET PLATFORM Improved operating metrics will position us to generate organic growth Trading statistics – 31 May 2023 Sector split by valuation Portfolio vacancy Q3 FY23 HY23 FY22 5.8% (total) 7.1% (total) 1% 100% 3.8% 4.1% Occupancy (%) 92.9 92
Slide 11: South Africa – sustainability in action
South Africa – sustainability in action South Africa PROPERTY ASSET PLATFORM Embedding sustainability is an integral part of our business operations Sustainability initiatives Retail Office Industrial Renewable Solar PV projects completed 33 403 kWp 3 836 kWp 2 914 kWp energy and commissioned Instal
Slide 12: South Africa retail portfolio
South Africa retail portfolio South Africa PROPERTY ASSET PLATFORM Operating metrics continue to improve despite load shedding and related cost headwinds Priorities Trading statistics – 31 May 2023 ▪ Tenant retention, WAULT and vacancy reduction continues to be a key Q3 FY23 HY23 FY22 priority for m
Slide 13: South Africa office portfolio
South Africa office portfolio South Africa PROPERTY ASSET PLATFORM Demand for P & A grade office space in sought-after locations strengthens Priorities Trading statistics – 31 May 2023 ▪ Providing solutions for smaller tenant’s energy efficiency and security Q3 FY23 HY23 FY22 battery and back-up Vac
Slide 14: South Africa industrial portfolio
South Africa industrial portfolio South Africa PROPERTY ASSET PLATFORM Continues to be defensive and performing well in a competitive landscape Priorities Trading statistics – 31 May 2023 ▪ Continue to investigate and implement electricity and water security Q3 FY23 HY23 FY22 interventions at select
Slide 15: Poland
PROPERTY ASSET PLATFORM POLAND Exposure to Polish retail and logistics provides stability 15 Redefine pre-close update for the year ending 31 August 2023 Bielsko-Biała Phase II, Bielsko-Biała, Poland
Slide 16: EPP Poland
EPP Poland PROPERTY ASSET PLATFORM Recovery of the shopping centres is on track on the back of inflation and high interest rates Overview ESG ▪ Healthy retail market fundamentals are reflected in the very positive retail sales forecast for the next ▪ Energy efficiency audits are being carried out to
Slide 17: EPP core portfolio overview
EPP core portfolio overview Poland PROPERTY ASSET PLATFORM Continues to be defensive and performing well in a competitive landscape Priorities for EPP EPP core portfolio trading stats – 31 May 2023 ▪ The takeover of M1 Group property management and leasing operations Q3 FY23 HY23 FY22** from April 2
Slide 18: EPP JV portfolio overview
EPP JV portfolio overview Poland PROPERTY ASSET PLATFORM Solid operating metrics despite challenging market EPP JV portfolio trading stats – 31 May 2023 M1 JV Community JV Galeria Młociny JV Henderson JV EPP % shareholding 50% 53.1% 70% 30% Vacancy (%) 2.2 3.9 3.2 13.8** GLA renewed (%) 4.1 8.5 13.0
Slide 19: ELI Poland
ELI Poland PROPERTY ASSET PLATFORM Maximising investor returns through strategic portfolio management and development Overview ESG ▪ Valuations have remained firm due to indexation and market rental growth offsetting the negative ▪ To manage supply chain risks and reduce impact of higher yields oper
Slide 20: ELI core portfolio overview
ELI core portfolio overview Poland PROPERTY ASSET PLATFORM Continued expansion where near-shoring, cost of operation and good infrastructure is driving demand Priorities for ELI ELI portfolio trading stats – 31 May 2023 ▪ Reduce current vacancies in the active portfolio Q3 FY23 HY23 FY22 Vacancy (%)
Slide 21: Self-storage investments
Self-storage investments Poland PROPERTY ASSET PLATFORM Unlocking the demand of self-storage in urbanised markets Overview ESG ▪ Polish self-storage market still in its infancy and fragmented ▪ Secure attractive locations for self-storage developments in major cities and invest equity ▪ Poland has s
Slide 22: Financial Insights: Stabilising the medium-term growth prospects
FINANCIAL INSIGHTS Stabilising the medium-term growth prospects 22 Redefine pre-close update for the year ending 31 August 2023 The Towers, Western Cape, South Africa
Slide 23: Medium-term Group earnings profile
Medium-term Group earnings profile Focus on stabilising margins and improving earnings quality Group net operating profit margin* Distributable income per share sensitivity analysis FINANCIAL INSIGHTS 79% 78% 78% 73% 65% Offshore EUR rate by 0.5% 0,4 Poland rent indexation by 1% 0,4 2021 2022 2023 S
Slide 24: Balance sheet management
Balance sheet management Sound risk management anchors value creation Biannual, independently performed property valuations are Shifting focus to sustainable growth of the simplified FINANCIAL INSIGHTS in progress for full-year valuations are expected to property asset platform remain largely stable
Slide 25: Debt maturity profile and available facilities
Debt maturity profile and available facilities Healthy liquidity profile with sufficient headroom for growth Debt maturity profile All debt maturing in FY23 has been refinanced or repaid ▪ R3.5 billion of the debt which was maturing during Q4 FY23 related to the FINANCIAL INSIGHTS 14 33% refinancing
Slide 26: SA REIT LTV
SA REIT LTV LTV marginally outside the medium-term target range due to Rand weakness REIT BPR LTV LTV sensitivity analysis and impact LTV impact Investment property valuations FINANCIAL INSIGHTS 2.8% 42.3% 0.2% 41.5% SA property values increase/decrease by 1% (R0.6bn) 0.3% 40.2% EPP property values
Slide 27: Trading update for 2023
Trading update for 2023 Stable operating metrics in an elevated interest rate environment FY23 DIPS to be in line with guidance of between 48 Healthy group liquidity position supported by strong cash FINANCIAL INSIGHTS cents and 52 cents flow generation and new green bond issuance Signs of global in
Slide 28: Disclaimer
DISCLAIMER This presentation may include forward-looking statements which statements are not based on historical information, but rather premised on certain assumptions, risks, estimates and/or uncertainties (“risks and uncertainties”), which are taken into consideration as at date of this presentat