Delta Property Fund Limited · JSE:DLT
Delta Property Fund — Non-Deal Roadshow (March 2015)
36 slides from Delta Property Fund's roadshow presentation, March 2015
Slide 1: Delta Property Fund Capital Raising Roadshow March 2015
Delta Property Fund Capital Raising Roadshow March 2015 1
Slide 2: Disclaimer
Disclaimer This document has been prepared and issued by and is the sole responsibility of the management of Delta Property Fund Limited (the “Company”) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part,
Slide 3: Proceedings
Proceedings • Introduction to Delta • Highlights • Consolidated property portfolio • Financial performance & position • Forward-looking strategy • Investment opportunity • Q&A 88 Field Street, Durban
Slide 4: Introduction to Delta
Introduction to Delta Liberty Towers, Durban 4
Slide 5: Snapshot
Snapshot Listing date: 02 November 2012 JSE classification: Real Estate Holdings & Development Asset manager: MPI Property Asset Management (Pty) Ltd JSE code: DLT Asset management fee: 0.35% 31 August 2014 28 February 2015 Linked units / shares in issue 451 042 442 458 409 836 Market capitalisation
Slide 6: Fund fundamentals
Fund fundamentals Quality portfolio of properties Affinity for government & parastatal assets High growth strategy International growth and diversification Strong support from market analysts Well positioned relative to its peers Experienced management team 6
Slide 7: Quality portfolio of properties
Quality portfolio of properties • Access to a quality property portfolio • Secure long term sovereign underpin at an average value per property of R101 million • Secure income streams underpinned by long-term government leases, low vacancies and strong anchor tenants • Anchor tenants in newly acquir
Slide 8: Affinity for government & parastatal assets
Affinity for government & parastatal assets • Strong ability to identify and acquire government- tenanted properties, and secure long-term leases • Level 2 B-BBEE contributor which helps to attract empowerment-sensitive tenants and Parastatals which represent a strong pipeline • Ratio of government
Slide 9: Delta’s high growth strategy
Delta’s high growth strategy • Delta has a high growth strategy and aims to capitalise on opportunities for growth by continuing to develop its niche position as a 100% black-managed property fund by identifying and securing Government-tenanted properties • In the two years following the listing on
Slide 10: International growth and diversification
International growth and diversification • Significant stake in Delta International, the first outright Africa property listing on JSE • Unique exposure to retail and office sector growth on the African continent • Provides a Rand hedge and diversification Anadarko Building, Maputo Current presence
Slide 11: Strong support from market analysts
Strong support from market analysts • Consensus is that Delta’s share price remains undervalued with strong growth in distributable earnings “…we find the current discount to peers unjustified. We see the disposal of non-government buildings (which is both quality enhancing and favourable for the de
Slide 12: Well positioned relative to its peers
Well positioned relative to its peers • Delta is currently well positioned relative to its peers Source: Avior Capital Markets equity research report 04 February 2015 Historic Yield (%) 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 9.2% 8.9% 8.3% 7.7% 6.9% 6.9% 6.8% 6.7% 6.1% 6.0% 5.8% 5.0% 5.8% Forecast Yield (%
Slide 13: Experienced management team
Experienced management team Executive Non-Executive Sandile Nomvete Bronwyn Corbett JB Magwaza Jorge Da Costa Nooraya Khan CEO CFO/COO Non-Executive Independent Lead Independent Chairman Non-Executive Non-Executive Director Director Chairman of the Audit, Chairman of the Risk and Compliance Investme
Slide 14: Directors of Delta Property Fund
Directors of Delta Property Fund Johannes Bhekumuzi Magwaza – Non-Executive Chairman BA, MA (UK) JB has many years’ experience as a board representative for various JSE listed and non-listed entities including chairmanships at Tongaat Hullet Limited, Pamodzi Investment Holdings Proprietary Limited,
Slide 15: Directors of Delta Property Fund (cont.)
Directors of Delta Property Fund (cont.) Nooraya Khan – Independent Non-Executive Director CA (SA) Nooraya is a Chartered Accountant and a highly – experienced and successful private equity transactor. She has vast experience in negotiating, implementing and managing private equity and black economi
Slide 16: Directors of Delta Property Fund (cont.)
Directors of Delta Property Fund (cont.) Dumo Motua – Independent Non-Executive Director Bcom, Diploma in Advanced Banking, Certificate in Business Project Management (UNISA, RAU & Wits) Dumo has a wide experience gained from different environments and institutions, spanning the banking, regulatory
Slide 17: Highlights
Highlights NPA, Cape Town a ona nzead \
Slide 18: Highlights from the past 6 months
Highlights from the past 6 months • Increased H1 distribution by 23.1% of from 32.51 cents to 40.01 cents (Aug 2014) • Current market capitalisation R4.07 billion (Aug 2014 – R3.54 billion) • R501 million yield enhancing Dollar investment (Delta International) • Portfolio occupancy of 95.3% as at Au
Slide 19: Consolidated property portfolio
Consolidated property portfolio Samora House, Durban 19
Slide 20: Property portfolio analysis (as at 31 August 2014)
Property portfolio analysis (as at 31 August 2014) SECTORAL PROFILE: GLA GEOGRAPHIC PROFILE: GLA BUILDING GRADE: GLA 7% 31% 6% 7% 79% 28% 5% 4% 8% 4% 1% 0.3% 44% 21% 54% Office: government (54%) Gauteng (44,4%) Kwazulu-Natal (27,9%) Office: other (31%) Limpopo (6,9%) Northern Cape (6,2%) Retail (6,9
Slide 21: Lease expiry profile
Lease expiry profile As at 31 August 2014 30% 26.5% 24.2% 25% 22.5% 22.4% 19.3% 20% 18.1% 15% 13.1% 13.2% 12.3% 10.7% 10% 6.8% 6.4% 4.7% 5% 0.0% 0% Vacant 28 Feb 15 29 Feb 16 28 Feb 17 28 Feb 18 28 Feb 19 Beyond 2019 Rental GLA 21
Slide 22: Delta portfolio – geographical distribution
Delta portfolio – geographical distribution As at 28 February 2015 North West Limpopo Main Node: Klerksdorp Main Node: Polokwane No. of Properties: 2 No. of Properties: 7 Mpumalanga The Northern Cape Main Node: Nelspruit Main Node: Kimberley No. of Properties: 12 No. of Properties: 8 Gauteng Main No
Slide 23: Top 10 Properties (as at 31 August 2014)
Top 10 Properties (as at 31 August 2014) By valuation By GLA Property Valuation (R’m) Property GLA (m2) Forum Building 503.6 OMC Durban 41 145 Liberty Towers 360.5 Forum Building 41 003 Hallmark Building 340.0 Liberty Towers 39 735 Hensa Towers 312.9 Embassy House 32 365 OMC Durban * 291.0 Top Trail
Slide 24: Financial performance & position
Financial performance & position Presidia, Pretoria 24
Slide 25: Financial overview
Financial overview 31 August 28 February 2014 2014 Distribution per linked unit 40.01 72.69* Cost to income ratio 26.4% 25.5% Gearing level 48.2% 47.1% Weighted average interest rate 8.07% 7.5% Fixed vs. floating 70 : 30 32 : 68 Average debt fixed period (years) 3.04 3.00 Net asset value per linked
Slide 26: Group debt summary (as at 31 August 2014)
Group debt summary (as at 31 August 2014) As at 31 Aug 2014 Weighted Ave. Type R'm 1 Interest Rate Revolving Bank Facilities 444 7.85% Floating Bank Facilities 689 7.24% Fixed Bank Facilities 1 672 8.31% DMTN Programme 872 7.13% Total Drawn Facilities 3 677 7.77% Accrued Interest 24 N/A TOTAL 3 702
Slide 27: Group maturity profile (as at 31 August 2014)
Group maturity profile (as at 31 August 2014) 28-Feb-15 28-Feb-16 28-Feb-17 28-Feb-18 28-Feb-19 28-Feb-20 0 50 100 150 200 250 300 350 400 450 500 550 600 650 R’ million DMTN Programme Fixed Bank Facilities Floating Bank Facilities Revolving Bank Facilities Swap Contracts 27
Slide 28: Target debt profile
Target debt profile • Delta intends utilising part of the capital raised to pay down short-term facilities and has a target gearing level of < 45% in the short term and < 40% in the long term (February 2016 and beyond). • Target debt expiry profile: 28-Feb-15 2016-02-29 (1 Year) 28-Feb-17 (2 year) 2
Slide 29: Forward looking strategy
Forward looking strategy Hallmark, Gauteng 29
Slide 30: High-level strategy
High-level strategy Delta’s overall strategy is based on the following fundamentals: Underlying Assets Asset & Property Management Allocation of Capital › Maintaining a core portfolio › Leverage off BEE credentials; › Utilise debt and other underpinned by long term management expertise; and our fund
Slide 31: Diversification & expansion plans
Diversification & expansion plans • Whilst maintaining the core sovereign underpin to the fund, Delta is looking at building on its diversification strategy through Delta International and other initiatives in various stages of implementation. • Management are comfortable with exposure to sovereign
Slide 32: Risks & Challenges
Risks & Challenges Risks / Challenges Mitigants Treasury Directive Delta Level 2B-BBEE status allows the ability to 3 year, 5.5% escalation renew leases Short term measure to “clean up” External MANCO PMTE (Property Management Trading Entity) will become prevalent in the future Interest Rate Actual
Slide 33: Investment opportunity
Investment opportunity PWC, Polokwane 33
Slide 34: Key selling points
Key selling points Positive asset management activities to drive NAV growth › Letting of vacancies › Renegotiation of leases at favourable rates › Planned CAPEX projects › Leveraging escalations of current portfolio of > 7% Yield enhancing acquisitions to increase distributions › Pipeline of governm
Slide 35: Indicative terms of issue of shares
Indicative terms of issue of shares Issuer Delta Property Fund Limited Share Price – 30 day VWAP R 9.19 as at 11 Mar 2015 NAV per share Circa R9.50 as at 28 Feb 2015 (pre-distribution) Offer structure Issue of shares through private placement No. of shares offered 32 500 000 – 43 500 000 Offer size
Slide 36: Q&A
Q&A 36