Slide 1: Final results for year ended 30 September 2023
Final results for year ended 30 September 2023
Slide 2: Agenda
Agenda Business overview Fairvest portfolio Office portfolio Industrial portfolio Retail portfolio Financial update Prospects for 2024 Q&A
Slide 3: Business overview
Business overview Darren Wilder CEO
Slide 4: Strategic focus areas
Strategic focus areas Recycle out of industrial Continue to build a Acquisitions only and office platform to produce at the right price assets into retail sustainable growth Financial focus areas ▪ Disciplined, conservative financial management ▪ Strategic capital allocation ▪ Continue to target a f
Slide 5: Key operational metrics
Key operational metrics ▪ To maintain collectable arrears below 2% of gross income ▪ Weighted average growth on lease expiry between 2% to 6% ▪ Target a weighted average lease term remains above 36 months ▪ Determined focus on leasing of vacant space – strong leasing team ▪ Strong focus on tenant re
Slide 6: Fairvest at a glance
Fairvest at a glance Diverse portfolio of Market Cap 1 126 191 m2 R12.0bn R5.7bn of GLA Retail Office Industrial Sectoral split by revenue 68.2% 20.7% 11.1% Sectoral by GLA 48.6% 25.9% 25.5% Investments Gearing at 5.0% in Dipula 33.3% Fairvest Final results for year ended 30 September 2023 6
Slide 7: 2023 highlights
2023 highlights 132.53 cps distribution 41.29 cps distribution 100% per A share per B share Pay-out ratio Overall tenant retention Average value Vacancy of 4.5% 86.5% per property (Sep’22 – 5.9%) (Sep’22 – 87.4%) R89.6 million Positive rental NAV per share Indluplace disposal reversions of Per A sha
Slide 8: Back up power, solar and water management update
Back up power, solar and water management update ▪ Total diesel cost for the period of R15.5 million of which 86.6% has been recovered from tenants. ▪ Total of 58 Fairvest owned generators installed with 14.2 MVA of capacity. ▪ 3 generators due for installation. ▪ 146 generators installed by tenants
Slide 9: Disposals
Disposals Sales transferred Class Date Sales value Book value (Discount)/ Premium to Average Asset GLA (m²) transferred (R'm) (R'm) book value % yield % Before 30 September 2023 SARS Durban Office 12 Jan 23 230.0 220.0 4.5% 11.5% 23 105 79 Hans van Rensburg Office 08 Mar 23 4.0 3.9 1.7% 16.3% 875 71
Slide 10: Fairvest portfolio
Fairvest portfolio Darren Wilder CEO
Slide 11: Fairvest portfolio highlights
Fairvest portfolio highlights Tenant retention 1 126 191 m² 86.5% 134 assets of GLA (Sep’22 – 87.4%) Vacancy at Reversions positive at Capex 4.5% 2.8% Expenditure of R190.3m (Sep’22 – 5.9%) (Sep’22 – -6.4%) 1.6% of value spend Average gross Weighted average WALE rental per m2 built in escalation 29.
Slide 12: Vacancy % / Portfolio composition
PORTFOLIO COMPOSITION 100% Retail Office Industrial Avg Avg Avg 90% property property property Total Vacancy value Value % of value Value % of value Value % of value 4.9% of the total Band # (R'm) (R'm) Total # (R'm) (R'm) Total # (R'm) (R'm) Total (R'm) 80% portfolio vacancy GLA 0% - 4% 54 126 6 79
Slide 13: Portfolio leasing activity
Portfolio leasing activity New deals Sep ’23 Sep ‘22 Fairvest Lease expiry profile by GLA Number of leases 426 404 300 000 23.6% Total GLA m2 102 145 76 472 250 000 20.5% 19.3% 17.3% Average gross rental achieved (R/m2) 99.17 103.24 200 000 150 000 Weighted average escalations 7.1% 6.9% 100 000 7.2%
Slide 14: Regional & sectoral split
REGIONAL & SECTORAL SPLIT Total GLA per region Total revenue per region 52% Gauteng 35% 13% Western Cape 21% 9% KwaZulu-Natal 11% 8% Eastern Cape 10% 7% Limpopo 7% 4% North West 6% 3% Free State 5% 3% Northern Cape 4% 1% Mpumalanga 1% Total GLA per sector Total revenue per sector 49% Retail 68% 26%
Slide 15: Office portfolio
Office portfolio Riaz Kader COO
Slide 16: Office portfolio highlights
Office portfolio highlights Tenant retention 291 146 m² 86.4% 34 assets of GLA (Sep’22 – 85.0%) Vacancy at % of total portfolio Capex 9.7% GLA – 25.9% Expenditure of R95.0m (Sep’22 – 13.6%) Value – 20.0% 4.0% of value spend Average gross Weighted average WALE rental per m2 built in escalation 24.9 m
Slide 17: Office leasing activity
Office leasing activity New deals Sep ’23 Sep ‘22 Fairvest Lease expiry profile by GLA Number of leases 108 101 70 000 21.3% 19.7% 60 000 Total GLA m2 37 003 17 249 17.0% 50 000 15.8% Average gross rental achieved (R/m2) 93.18 81.36 13.0% 40 000 Weighted average escalations 7.2% 7.4% 9.7% 30 000 WAL
Slide 18: Office renewals
Office renewals Significant lease renewals over the past 12 months Building Name Lettable Area Urban Brew 5 670 Sandton Sunninghill Place 4 845 Sanlynn 3 432 Urban Brew 2 578 Sandton Sunninghill Place 1 923 Bridge On Bond 1 420 127 Bethlehem Street 1 261 The District 1 167 St Andrews Office Park 1 0
Slide 19: Office new deals
Office new deals Significant lease new deals over the past 12 months Building Name Lettable Area 2Twenty Madiba 2 806 Media Shop 2 522 Jhb Rosebank 158 Offices 1 954 Lakeview Terrace 1 677 The District 1 534 Bridge On Bond 1 061 Bridge On Bond 1 043 Sandton Sunninghill Place 891 Tijger Park 871 Sanl
Slide 20: Office strategic objectives
Office strategic objectives ▪ Successful “retailing” of space by implementing flexible office solutions, storage solutions and FairSpec`ing thus creating ready to move in opportunities ▪ Continued value extraction on every asset to maximize returns of potential disposals of non-core buildings ▪ Main
Slide 21: Industrial portfolio
Industrial portfolio Riaz Kader COO
Slide 22: Industrial portfolio highlights
Industrial portfolio highlights Tenant retention 287 363 m² 84.3% 26 assets of GLA (Sep’22 – 88.6%) Vacancy at % of total portfolio Capex 0.95% GLA – 25.5% Expenditure of R12.5m (Sep’22 – 1.0%) Value – 10.7% 1.0% of value spend Average gross Weighted average WALE rental per m2 built in escalation 24
Slide 23: Industrial leasing activity
Industrial leasing activity Fairvest Lease expiry profile by GLA New deals Sep ’23 Sep ‘22 120 000 38.2% Number of leases 66 56 100 000 Total GLA m2 31 822 23 245 80 000 Average gross rental achieved (R/m2) 49.88 39.53 60 000 18.9% 18.9% 13.8% Weighted average escalations 7.6% 7.0% 40 000 6.3% WALE
Slide 24: Industrial strategic objectives
Industrial strategic objectives ▪ Increase tenant retention to above 90% ▪ Maintain core portfolio growth ▪ Improve back up power supply % across the portfolio ▪ Constant engagement with CID / Council to maintain the sustainability of the assets ▪ Maintain vacancy at 1% or below ▪ Focus on non-core
Slide 25: Retail portfolio
Retail portfolio Riaz Kader COO
Slide 26: Retail portfolio highlights
Retail portfolio highlights Tenant retention 547 682m² 88.1% 74 assets of GLA (Sep’22 – 88.0%) Vacancy at % of total portfolio Capex 3.7% GLA – 48.6% Expenditure of R82.7m (Sep’22 – 4.3%) Value – 69.3% 1.0% of value spend Average gross Weighted average WALE rental per m2 built in escalation 33.8 mon
Slide 27: Retail leasing activity
Retail leasing activity New deals Sep ’23 Sep ‘22 Fairvest Lease expiry profile by GLA Number of leases 252 247 140 000 21.7% 20.8% 120 000 19.9% Total GLA m2 33 320 35 979 100 000 17.1% Average gross rental achieved (R/m2) 152.90 154.89 80 000 10.5% Weighted average escalations 6.5% 6.8% 60 000 40
Slide 28: Retail top 10 tenant exposure by GLA and revenue
Retail top 10 tenant exposure by GLA and revenue By revenue & GLA Total 37.2% 9.3% 7.9% 6.5% 3.5% 2.7% 3.0% 1.8% 0.9% 0.8% 0.8% 69 087 54 856 43 452 18 682 18 107 14 296 9 652 7 044 5 632 4 669 GLA m² Monthly revenue (% of total retail revenue) Fairvest Final results for year ended 30 September 2023
Slide 29: Retail new deals and renewals
Retail new deals and renewals Significant lease renewals over the past 12 months 6 267 m2 6 127 m2 5 944 m2 4 575 m2 3 950 m2 3 653 m2 2 276 m2 2 258 m2 GLA Significant lease new deals over the past 12 months 3 095 m2 1 325 m2 1 220 m2 1 170 m2 1 102 m2 GLA Fairvest Final results for year ended 30 S
Slide 30: Annualised Trading Density (R/m2)
Annualised Trading Density (R/m2) 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 Building 1 9.4% Building 2 -13.1% Building 3 -4.5% Building 4 -2.5% Building 5 -2.8% Building 6 0.8% Building 7 5.0% Trading densities Building 8 0.5% Fairvest Final results for year ended 30 September
Slide 31: Trading densities per segment
Trading densities per segment Year on year growth 45 000.00 40 000.00 Trading Density (R/m2) 35 000.00 30 000.00 25 000.00 20 000.00 2021 2022 2023 Year Community Neighbourhood Small Regional All Fairvest Final results for year ended 30 September 2023 31
Slide 32: Rent to sales ratio
Percentage 10% 12% 14% 0% 4% 6% 8% 2% Building 1 -0.2% Building 2 1.8% Building 3 0.7% Building 4 0.4% Building 5 0.6% Building 6 0.1% Building 7 -0.2% Building 8 0.2% Fairvest Final results for year ended 30 September 2023 Rent to sales ratio Building 9 -0.0% Building 10 -0.3% Building 11 -0.3% Bui
Slide 33: Retail strategic objectives
Retail strategic objectives ▪ Continued management of expense optimization through supplier engagement ▪ Exploring yield enhancing opportunities ▪ Approx 41% of portfolio by number, has renewable energy capacity ▪ Increasing our utility independence across the country on electricity and water ▪ Nati
Slide 34: Financial update
Financial update Jacques Kriel CFO
Slide 35: Distributable income analysis
Distributable income analysis 12 months 12 months ended ended 30 September 30 September 2023 2022*# R’000 Unaudited Revenue (excluding straight-line rental income) 1 923 237 1 886 063 Sundry income 4 942 25 873 Property expenses (794 843) (786 996) Administration and corporate costs (100 549) (104 3
Slide 36: Condensed consolidated statement of financial position
Condensed consolidated statement of financial position Audited at Audited at R’000 30 September 2023 30 September 2022 Assets Investment property 12 004 066 12 100 924 Financial assets 199 054 196 816 Trade and other receivables 185 579 175 148 Loans receivable and amounts owing by non-controlling i
Slide 37: NAV Bridge per B share
NAV Bridge per B share (1) As at NAV Accretive Change in Impact of As at Profit for Dividends Other 30 September share-buy value of A Indluplace 30 September the period paid movements 2022 backs Share NAV disposal 2023 Increase Decrease Total Fairvest Final results for year ended 30 September 2023 3
Slide 38: Arrears and bad debts
Arrears and bad debts Total Total Total net % of revenue on an R’000 arrears provision arrears annualised basis Retail 54 103 26 842 27 261 1.9% Office 51 622 34 928 16 694 3.3% Industrial 17 821 9 859 7 962 3.1% 123 546 71 629 51 917 2.3% Fairvest Final results for year ended 30 September 2023 38
Slide 39: Property portfolio valuations
Property portfolio valuations Like-for- Value 2023 2023 like Rate per R’million Discount Rates Exit Cap Rate (decrease)/ m2 (R/m2) increase Office 2 403 14.7% 10.5% (3.1%) 8 253 Retail 8 312 14.1% 9.9% 3.5% 15 177 Industrial 1 289 14.5% 10.3% 2.8% 4 487 Total 12 004 14.3% 10.1% 2.0% 10 659 Fairvest
Slide 40: Capital expenditure
Capital expenditure Capital expenditure Property Value % of Value R’000 R’000 Spend Total 190 265 12 004 066 1.6% Retail 82 740 8 311 910 1.0% Industrial 12 549 1 289 313 1.0% Office 94 976 2 402 843 4.0% Fairvest Final results for year ended 30 September 2023 40
Slide 41: Debt and maturity hedge profile
Debt and maturity hedge profile 2000 1 781 1800 1600 1400 1200 1 055 Millions 1 000 1000 936 894 833 800 600 430 400 200 - 0 Expiring in the next Expiring in the next Expiring in the next Expiring in the next 12 months 24 months 36 months 48 months Debt Swaps Fairvest Final results for year ended 30
Slide 42: Debt facilities
Debt facilities 30 September 30 September 2023 2022 Loan to value (SA REIT BP) % 33.3% 38.1% % of debt fixed % 64.8% 65.6% Weighted average cost of funding % 9.74% 8.97% Interest cover Times 2.5 2.5 WA maturity of debt Months 26 18 WA maturity of swaps Months 20 13 Total Debt R’m 4 210.8 4 764.6 Tot
Slide 43: Prospects for 2024
Prospects for 2024 Darren Wilder CEO
Slide 44: Prospects
Prospects ▪ Differentiate ourselves by performance not size ▪ Guidance 2024 – Distributable earnings per B share of between 41.50 – 42.50 cents per share ▪ Maintain 100% pay-out ratio ▪ Simplify the business ▪ Maintain LTV at below 35% ▪ Conservative balance sheet ▪ Acquisitions only at the right pr
Slide 45: Thank you
THANK YOU
Slide 46: Q&A
Q&A