Emira Property Fund Ltd. · JSE:EMI
Emira Property Fund — FY2019 Earnings Presentation
110 slides from Emira Property Fund's earnings presentation, August 2019
Slide 1: Results for the year ended 30 June 2019
RESULTS FOR THE YEAR ENDED 30 JUNE 2019 EMIRA PROPERTY FUND
Slide 2: Agenda
Agenda CONVERSATIONS FINANCIALS PORTFOLIO INVESTMENTS › Overview › Distribution › Direct › Residential statement › Sector › Enyuka › Balance sheet analysis › Recycling › US › Rebalancing OUTLOOK EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 1
Slide 3: Overview
OVERVIEW GEOFF JENNETT CEO EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 2
Slide 4: Key metrics at 30 June 2019
Key metrics at 30 June 2019 TENANT DPS NAV VACANCIES RETENTION +3.1% 1 791c 3.6% 80% ACQUISITIONS DISPOSALS REBALANCING US Offices LTV Office +USD41m R1.8bn 36.1% <25% Transcend Other ICR Offshore 34.9% R120m 2.9x 13% GOZ Residential AUD28m 5% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2
Slide 5: Pillars of business
3 Pillars of business Local direct property Indirect local Offshore › Enyuka › GOZ › Transcend › US EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 4
Slide 6: 5-year track record
5-year track record 2 000 155 1 751 1 698 1 735 1 735 1 747 1 791 1 800 150 1 600 1 434 1 358 1 386 1 380 1 400 145 1 200 1 000 140 800 135 600 400 130 200 0 125 JUN 15 JUN 16 JUN 17 JUN 18 JUN 19 NAV (LHS) SHARE PRICE (LHS) DISTRIBUTION (RHS) Compound annual 12-month share price Total 12-month retu
Slide 7: Financials
FINANCIALS GREG BOOYENS CFO EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 6
Slide 8: Distribution statement
Distribution statement R’000 JUN 18 JUN 19 % CH Direct portfolio Revenue 1 748 876 1 698 802 (2.9) Property expenses (643 081) (639 018) (0.6) Net property income 1 105 795 1 059 784 (4.2) Property expenses to revenue ratio (Gross) 36.8% 37.6% Indirect local portfolio Enyuka 74 196 77 486 4.4 Transc
Slide 9: Year-on-year like-for-like growth net property income
Year-on-year like-for-like growth net property income (static portfolio) 12% 9.9 10% 8.2 7.8 7.5 8% 6% 5.7 4% 3.1 2% 0% REVENUE PROPERTY EXPENSES NET PROPERTY INCOME JUN 18 JUN 19 Revenue: Property expenses: Contractual escalations In line with expectation, taking into consideration increase in elec
Slide 10: Distribution statement continued
Distribution statement continued R’000 JUN 18 JUN 19 % CH Operating income b/f 1 255 062 1 293 366 3.1 Corporate Admin expenses (102 509) (123 250) 20.2 Net interest cost (385 277) (384 210) (0.3) Other income – 5 084 >100.0 Distribution payable 767 276 790 990 3.1 Number of shares issue 522 667 247
Slide 11: Distribution per share (cents)
Distribution per share (cents) 180 (8.8) 8.6 8.0 (4.5) 1.0 0.2 170 151.34 (8.8) 16 (4.5) 1.5 0.2 5.3 160 8.3 146.80 1.0 (1.4) (0.2) 2.5 150 4.8 (3.3) (3.5) (1.2) 1.3 (0.3) 1.0 4.9 140 130 Sold properties (14.7) 120 Transcend Transcend interest Completed Enyuka USA USA Head office Raising fee USD int
Slide 12: Balance sheet
Balance sheet R’000 JUN 18 JUN 19 % CH Investment properties 12 536 10 942 (12.7) Indirect investments Enyuka 648 681 5.2 Transcend } Indirect local – 574 >100.0 GOZ 956 760 (20.5) USA } Indirect offshore 458 1 065 132.5 Other assets 573 783 36.7 Total assets 15 171 14 805 (2.4) Interest-bearing deb
Slide 13: Debt funding mix
Debt funding mix (Rm) 450 400 350 300 250 R'm 200 150 100 50 - Sep Sep Oct Nov Nov Nov Jan Mar Mar Jun Sep Nov Mar May May Jul Sep Dec Jul Jul Sep Jun Jun Jun Sep Sep Dec Apr Jul Dec 19 19 19 19 19 19 20 20 20 20 20 20 21 21 21 21 21 21 22 22 22 23 23 23 23 23 23 24 24 25 FACILITY CAPITAL BALANCE CA
Slide 14: Interest rate swap profile
Interest rate swap profile 1 200 1 000 800 600 400 200 - DEC 20 JUN 21 DEC 21 JUN 22 DEC 22 JUN 23 DEC 23 JUN 24 DEC 24 Hedged Weighted average Weighted average debt duration to expiry all in interest rate 91.2% 3.0 years 7.6% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 24
Slide 15: Net asset value per share
Net asset value per share (cents) 1 850 28 2 1 800 (3) 2 1 791 25 5 (9) (8) (6) 1 758 6 1 750 (9) 78 76 1 700 1 713 1 682 1 650 1.8% increase in NAV per share EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 27
Slide 16: Directly held SA portfolio performance
DIRECTLY HELD SA PORTFOLIO PERFORMANCE ULANA VAN BILJON COO EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 28
Slide 17: Key portfolio metrics
Key portfolio metrics (continue) Properties Vacancies Tenant retention Rent reversions 80 GLA 3.6% 80% by gross rental -1.2% total fund Portfolio value 81% by GLA R10.9bn Average property value R135m Average value per m² R13k Lease expiry profile Retail trading stats Edcon The market Year 1 20.0% +1
Slide 18: Sectorial spread by number of properties and value
Sectorial spread by number of properties and value (%) NUMBER OF PROPERTIES – 2018 NUMBER OF PROPERTIES – 2019 0 1 21 39 44 OFFICE URBAN RETAIL 38 INDUSTRIAL RESIDENTIAL 20 21 2018 VALUE SPLIT PER SECTOR (%) R12.5bn 2019 VALUE SPLIT PER SECTOR (%) R10.9bn (Incl. The Bolton) (Incl. The Bolton) 2 15 1
Slide 19: Vacancy per sector
Vacancy per sector (%) 16% 14% 12.5 12% 10% 8% 7.1 6% 5.3 5.7 4.1 3.4 3.6 4% 3.1 2.0 2.3 1.7 2% 1.3 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL (SAPOA 11.3%) (SAPOA 4.2%) (SAPOA 3.6%) Jun 2019 Mar 2019 Dec 2018 JUN 17 JUN 18 JUN 19 Reasons for reduction Largest vacancy › Corobay Corner › Denver Warehous
Slide 20: Denver warehouse (before)
Denver warehouse (before) EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 33
Slide 21: Denver warehouse (after)
Denver warehouse (after) EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 34
Slide 22: Major lease expiries by gross rental: FY19
10 Major lease expiries by gross rental: FY19 PROPERTY TENANT LEASE END GLA (m²) STATUS RTT ACSA Park RTT Group Dec 18 46 673 Renewed – 6 years Trellidor Trellidor Sep 18 7 794 Renewed – 3 years 14-16 Boston Circle Bidvest Data Jun 19 7 533 Renewed – 3 years 1059 Francis Baard SABC Aug 18 2 925 Rene
Slide 23: Reversions – total (gross rentals)
Reversions – total (gross rentals) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL (DECREASE) % Office 26 419 142.98 147.16 2.9 Urban retail 47 515 159.44 156.82 -1.6 Industrial 143 346 59.91 58.54 -2.3 Total Jun 19 217 280 91.61 90.49 -1.2 Total Jun 18 216 305 102.32 99.46 -2.8 Total
Slide 24: Investments
INVESTMENTS GEOFF JENNETT CEO EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 42
Slide 25: Investments
Investments Residential Enyuka › Transcend › 22 properties » Current position › R1.15bn value › The Bolton › Pipeline of assets » Current position Recycling disposals US › Office disposals › 9 properties › Other › Equity investments US$75.9m › GOZ › Vacancy GLA 3.6% › Effects › WALE 5.4 years EMIRA
Slide 26: Transcend – residential
Transcend – residential › 34.9% stake › Portfolio of 23 properties › IHS managed › Cost R294m › 4 767 units › Board seat › Mezz loan R143m › 5% vacancy EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 44
Slide 27: Rosebank residential to rent (The Bolton)
Rosebank residential to rent (The Bolton) › 282 units, focus on LSM 7 – 8 › Completed end of May 2019 › 76% of units occupied › 75% co-ownership with Feenstra › Value R220m › Yield 9.9% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 45
Slide 28: Enyuka – lower LSM retail
Enyuka – lower LSM retail Vacancy Tenant retention WALE 3.4% 83% 2.9 years Rent reversions +2.1% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 47
Slide 29: Recycling
Recycling Office disposal Other disposals Held for sale R1.8bn (25 assets) Cresta R96m 1059 Francis Baard 24/25 transferred 23 Intersite R25m Epsom Downs Shopping Centre EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 49
Slide 30: US economy
US economy 12% US REAL GDP GROWTH Y-O-Y % US UNEMPLOYMENT RATE % 10% 8% 6% 4% 2% 0% -2% -4% -6% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sources: United States Bureau of Labor Statistics. United States Bureau of Economic Analysis. EMIRA PROPERTY FUND RESULTS FO
Slide 31: US co-investment strategy
US co-investment strategy 45% – 49% Class A+ co-investment retail power with US partners centres targeted grocery anchored Top quartile ±65% asset in secondary in-country non-recourse and tertiary markets 10-year interest-only funding EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 52
Slide 32: US geographic exposure
US geographic exposure Ohio Indiana Missouri Oklahoma Alabama Dallas Texas Key: Florida States with owned assets Owned asset location Pipeline asset location Rainier / Continuum HQ EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 53
Slide 33: San Antonio Crossing – San Antonio, Texas
San Antonio Crossing – San Antonio, Texas 24 Feb 2019 Purchase Emira Equity price GLA Occupancy investment cash yield USD20.48m 146 321ft² 99.26% USD4.16m USD 12.87% 49.50% equity stake Yield Site extent WALE 9.50% 714 903ft² 7.2 years EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 54
Slide 34: Wheatland Towne Center – Dallas, Texas
Wheatland Towne Center – Dallas, Texas 29 Mar 2019 Purchase Emira Equity price GLA Occupancy investment cash yield USD32.2m 206 874ft² 96.98% USD6.3m USD 12.56% 49.60% equity stake Yield Site extent WALE 8.67% 1 089 000ft² 3.92 years EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 56
Slide 35: University Town Center – Norman, Oklahoma
University Town Center – Norman, Oklahoma 24 Jun 2019 Purchase Emira Equity price GLA Occupancy investment cash yield USD63.0m 348 877ft² 97.97% USD12.4m USD 10.82% 49.64% equity stake Yield Site extent WALE 8.06% 907 353ft² 4.32 years EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 58
Slide 36: Rebalancing (%) – total assets
Rebalancing (%) – total assets JUN 18 JUN 19 GOZ 6.5 5.4 9.6% 13.0% US 3.1 7.6 OFFICE 35.3 24.5 URBAN RETAIL 36.2 37.6 INDUSTRIAL 13.1 86.0% 13.8 82.1% RESIDENTIAL 1.1 5.7 LAND 0.3 0.5 RURAL RETAIL (ENYUKA) 4.4 4.4% 4.9 4.9% Offshore expansion in US Reduction in offices Expanded residential EMIRA PR
Slide 37: Outlook
Outlook › Solid operations, › Positive growth in DPS › Continue healthy balance sheet » Residential » US » Emira way EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 61
Slide 38: Thank you
THANK YOU EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 62
Slide 39: Annexures: Operations
ANNEXURES OPERATIONS EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 63
Slide 40: Number of properties
Number of properties 180 161 160 149 146 141 145 144 135 140 120 104 100 80 80 60 40 20 0 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 JUN 16 JUN 17 JUN 18 JUN 19 NUMBER OF PROPERTIES PER SECTOR – 2018 VS 2019 50 44 39 38 40 30 21 21 20 20 10 0 1 0 OFFICE URBAN RETAIL INDUSTRIAL RESIDENTIAL 2018 2019 EMIRA PR
Slide 41: Geographic spread by no. of buildings: 2018 vs 2019
Geographic spread by no. of buildings: 2018 vs 2019 50 45 44 40 38 35 30 25 23 20 17 17 16 15 12 11 10 5 3 1 1 1 0 JOHANNESBURG PRETORIA WESTERN CAPE KWAZULU-NATAL BLOEMFONTEIN MPUMALANGA JUN 18 JUN 19 Including The Bolton EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 65
Slide 42: Sectorial spread by value and GLA
Sectorial spread by value(%) and GLA (%) 2018 VALUE SPLIT PER SECTOR (%) R12.5bn 2019 VALUE SPLIT PER SECTOR (%) R10.9bn (Incl. The Bolton) (Incl. The Bolton) 15 18 1 2 32 41 OFFICE URBAN RETAIL INDUSTRIAL RESIDENTIAL 43 48 2018 GLA SPLIT PER SECTOR (%) 0.9m m² 2019 GLA SPLIT PER SECTOR (%) 0.8m m²
Slide 43: Geographic spread by value and GLA
Geographic spread by value (%) and GLA (%) GEOGRAPHICAL SPREAD BY VALUE (%) 2018 GEOGRAPHICAL SPREAD BY VALUE (%) 2019 (Incl. The Bolton) (Incl. The Bolton) 2 2 8 8 1 1 13 33 JOHANNESBURG 35 16 PRETORIA WESTERN CAPE KWAZULU-NATAL BLOEMFONTEIN MPUMALANGA 43 38 GEOGRAPHICAL SPREAD BY GLA (%) 2018 GEOG
Slide 44: Average value per m² and sector
Average value per m² and sector AVERAGE VALUE PER m² R/m² +7% 25 000 +28.0% +7% +3.8% 20 000 20 722 15 000 16 187 16 392 16 831 10 000 12 474 12 953 5 000 5 464 5 643 0 OFFICE URBAN RETAIL INDUSTRIAL TOTAL 2018 2019 AVERAGE VALUE PER PROPERTY Rm 300 +7% +7% 250 +40.2% +14.4% 251 264 200 150 164 100
Slide 45: Office sector exposure – quality improvement
Office sector exposure – quality improvement NUMBER OF PROPERTIES AVERAGE VALUE PER PROPERTY (Rm) 21 52 2011 2019 73 164 GRADE OF OFFICE PORTFOLIO BY VALUE (%) 2011 GRADE OF OFFICE PORTFOLIO BY VALUE (%) 2019 2 5 37 P-Grade A-Grade 50 B-Grade 45 61 C-Grade EMIRA PROPERTY FUND RESULTS FOR THE YEAR EN
Slide 46: Focus on A- and P-grade properties
Office sector exposure of total portfolio – by value (%) 35 35 30 30 30 30 25 25 20 20 17 15 15 10 10 5 2 5 0 0 2011 2019 2011 2019 B-grade % A- and P-grade % Focus on A- and P-grade properties EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 70
Slide 47: Vacancy profile by GLA
Vacancy profile by GLA (%) 16% 14% 12.5 12% 10% 8% 7.1 6% 5.3 5.7 4.1 3.4 3.6 4% 3.1 2.0 2.3 1.7 2% 1.3 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL (SAPOA 11.3%) (SAPOA 4.2%) (SAPOA 3.6%) Jun 2019 Mar 2019 Dec 2018 JUN 17 JUN 18 JUN 19 Reasons Largest Office Largest Urban Retail Largest Industrial for r
Slide 48: Vacancy profile per sector and grade
Vacancy profile per sector and grade – by GLA (%) 14% Hundreds 12.8 12.4 12.0 12% 10% 8.6 8% 6.7 6% 5.7 4.6 4.1 4% 3.4 3.6 3.1 2.3 2.0 2% 1.7 1.3 0% PRIME + OFFICE A OFFICE B * URBAN RETAIL INDUSTRIAL TOTAL JUN 17 JUN 18 JUN 19 * Only 2 buildings. EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JU
Slide 49: Vacancy loss by gross rental
Vacancy loss by gross rental (%) 12% Hundreds 11.2 10% 8% 6.0 6.1 6% 4.3 4% 3.1 3.2 3.3 3.0 2.1 2% 1.5 1.6 1.4 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 17 JUN 18 JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 73
Slide 50: Vacancy loss by sector and grade
Vacancy loss by sector and grade – by gross rental (%) 14% 12.2 12% 11.5 10.9 10% 8% 6.8 6.1 6% 3.8 4% 3.3 3.1 3.2 3.0 1.9 2.1 2% 1.5 1.6 1.4 0% PRIME + OFFICE A OFFICE B URBAN RETAIL INDUSTRIAL TOTAL JUN 17 JUN 18 JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 74
Slide 51: Major lease expiries by gross rental: FY19
10 Major lease expiries by gross rental: FY19 PROPERTY TENANT LEASE END GLA (m²) STATUS RTT ACSA Park RTT Group Dec 18 46 673 Renewed – 6 years Trellidor Trellidor Sep 18 7 794 Renewed – 3 years 14-16 Boston Circle Bidvest Data Jun 19 7 533 Renewed – 3 years 1059 Francis Baard SABC Aug 18 2 925 Rene
Slide 52: Major lease expiries by GLA: FY19
10 Major lease expiries by GLA: FY19 PROPERTY TENANT LEASE END GLA (m²) STATUS RTT ACSA Park RTT Group Dec 18 46 673 Renewed – 6 years Denver Warehouse Defy Appliances Sep 18 9 729 Tenant vacated Trellidor Trellidor Sep 18 7 794 Renewed – 3 years 14-16 Boston Circle Bidvest Data Jun 19 7 533 Renewed
Slide 53: Tenant retention
Tenant retention (%) 100% 85 80 84 81 72 77 74 75 80% 70 60% 40% 20% 0% GROSS RENTALS m² NO. OF LEASES JUN 17 JUN 18 JUN 19 Expiries of 224 385m2 equals 335 leases or R21.4m gross rentals per month EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 77
Slide 54: Lease expiry profile by gross rental
Lease expiry profile by gross rental (%) 40% Hundreds 37.1 35% 34.1 32.6 30% 26.3 24.8 24.7 24.3 25% 20.9 20.0 20% 17.4 16.7 16.3 15% 10% 5% 0.6 0.6 1.1 0.7 1.3 0.5 0% VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/06/19) OVER (FY20) (FY21) (FY22) (FY23+) JUN 17 JUN 18 JUN 19 EMIRA PROPERT
Slide 55: Lease expiry profile – offices
Lease expiry profile – offices by gross rental (%) 35% Hundreds 32.1 31.6 29.8 30% 27.8 27.5 27.1 26.1 25% 24.2 21.6 20.0 20% 16.3 15% 14.4 10% 5% 0.3 0.4 0.5 0.0 0.0 0.3 0% VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/06/19) OVER (FY20) (FY21) (FY22) (FY23+) JUN 17 JUN 18 JUN 19 EMIRA P
Slide 56: Lease expiry profile – urban retail
Lease expiry profile – urban retail by gross rental (%) 50% Hundreds 45.4 45.6 45% 42.7 40% 35% 30% 25% 20.2 20% 18.3 17.5 17.8 18.0 18.4 18.4 15.9 15% 13.7 10% 5% 2.5 2.3 1.6 0.5 0.7 0.5 0% VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/06/19) OVER (FY20) (FY21) (FY22) (FY23+) JUN 17 JUN
Slide 57: Lease expiry profile – industrial
Lease expiry profile – industrial by gross rental (%) 45% Hundreds 41.8 42.1 40% 35% 29.3 30% 26.8 27.3 25.2 25% 23.7 20% 18.7 19.0 16.0 14.7 15% 13.2 10% 5% 0.7 0.8 0.7 0.0 0.0 0.0 0% VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/06/19) OVER (FY20) (FY21) (FY22) (FY23+) JUN 17 JUN 18 JUN
Slide 58: Reversions – total (gross rentals)
Reversions – total (gross rentals) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL (DECREASE) % Office 26 419 142.98 147.16 2.9 Urban retail 47 515 159.44 156.82 -1.6 Industrial 143 346 59.91 58.54 -2.3 Total Jun 19 217 280 91.61 90.49 -1.2 Total Jun 18 216 305 102.32 99.46 -2.8 Total
Slide 59: Reversions renewals (gross rentals)
Reversions renewals (gross rentals) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL DECREASE % Office 21 764 144.88 150.42 3.8 Urban retail 41 502 160.61 159.02 -1.0 Industrial 127 160 60.48 58.85 -2.7 Total Jun 19 190 426 91.74 90.87 -1.0 Total Jun 18 163 495 108.79 105.53 -3.0 Total
Slide 60: Reversions new leases (gross rentals)
Reversions new leases (gross rentals) AVG. AVG. NEW INCREASE/ SECTOR AREA EXPIRY RENTAL LEASE RENTAL DECREASE % Office 3 559 130.67 126.18 -3.4 Urban retail 6 013 151.51 141.71 -6.5 Industrial 16 186 55.49 56.17 1.2 Total Jun 19 25 758 88.36 85.29 -3.5 Total Jun 18 52 113 80.39 79.26 -1.4 Total Jun
Slide 61: Properties excluded from like-for-like
Properties excluded from like-for-like The following are excluded from FY19 numbers: Purchases › 1 West land, Quagga land Disposals › Convention House, 4 Kikuyu, Harbour Place, Assegaai Place-Kraaifontein, 1 Kikuyu, Riverworld Park, Brooklyn Office Park, The Pinnacle, Linksfield Road, Umgeni Road A-
Slide 62: Leases concluded: Emira portfolio FY19
Leases concluded: Emira portfolio FY19 NEW RENEWAL TOTAL Number of leases 173 278 451 Total m² 57 796 190 094 247 890 Average duration (years) 3.0 2.5 2.7 Lease value (Rm) 281.6 813.5 1 095.1 The weighted average lease expiry for the total portfolio is 3.0 years (3.0 years Dec 18 and Jun 18). EMIRA
Slide 63: Escalations (%)
Escalations (%) 8.2% Hundreds 8.1 8.0% 7.9 7.9 7.8% 7.7 7.7 7.6 7.6% 7.5 7.5 7.5 7.5 7.4% 7.3 7.2 7.2% 7.0% 6.8% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 17 JUN 18 JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 87
Slide 64: Emira net rentals
Emira net rentals (excl. vacancies, parking, store-rooms, kiosks, ATMs) NO. OF OCCUPIED AVG. NET RENTAL SECTOR BUILDINGS GLA (m²) (R/m²) Office: P-Grade 4 61 554 174.24 Office: A-Grade 15 80 578 151.30 Office: B-Grade 2 12 793 115.58 Urban retail 20 296 597 140.70 Industrial 37 321 404 56.58 Total J
Slide 65: Retail trading statistics
Retail trading statistics Trading density growth Foot count growth Spend per head growth +1.0% -2.5% -1.0% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 89
Slide 66: Major lease expiries by GLA: FY20
10 Major lease expiries by GLA: FY20 PROPERTY TENANT LEASE END GLA (m²) STATUS Little Green Isando (20 Anvil Road) Sep 19 12 250 Renewed – 3 years Beverages Epping Warehouse Transpaco Aug 19 5 480 Tenant vacating (WGA) Finalising lease terms – Steiner Services Bidvest May 20 4 804 3 years Morgan Cre
Slide 67: Tenant grading – by GLA
Tenant grading – by GLA (%) TOTAL PORTFOLIO (%) PER SECTOR (%) 80% 71 Hundreds 19 70% 60% 54 53 50% A B C 60 40% 30% 25 27 21 21 17 20 20% 12 10% 0% OFFICE URBAN RETAIL INDUSTRIAL Grading “A” Large national tenants, large listed tenants, government and major franchises “B” National tenants, listed t
Slide 68: Tenant exposure by GLA
Tenant exposure by GLA TOP 10 TENANTS OF THE TOTAL PORTFOLIO (%) TENANT EXPOSURE – TOP TEN TENANTS (%) RTT GROUP 7.5 PICK N PAY 5.9 29 MASSMART 3.4 SHOPRITE CHECKERS 2.2 PEPKOR 2 WOOLWORTHS 1.8 71 DEVLAND 1.7 BIDVEST GROUP 1.6 LITTLE GREEN BEVERAGES 1.5 KING PRICE INSURANCE 1.3 TOP 10 TENANTS OTHER
Slide 69: Tenant exposure by gross rental
Tenant exposure by gross rental TOP 10 TENANTS OF THE TOTAL PORTFOLIO (%) TENANT EXPOSURE – TOP TEN TENANTS (%) MASSMART 4.6 PICK N PAY 4.2 25 RTT GROUP 3.6 PEPKOR 2.6 KING PRICE INSURANCE 2.4 SA LOCAL GOVERNMENT 1.9 SHOPRITE CHECKERS 1.7 75 EDCON 1.4 WOOLWORTHS 1.3 MR PRICE GROUP 1.2 TOP 10 TENANTS
Slide 70: Directly held SA property portfolio – Edcon exposure
Directly held SA property portfolio – Edcon exposure › 1.4% of gross rental* › 1.1% of total GLA › 9 leases »3 CNA leases » 5 Jet leases » 1 Edgars lease * Enyuka effect not included. EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 94
Slide 71: Top potential new capex projects (not committed)
Top 4 potential new capex projects (not committed) MAJOR PROJECTS VALUE CONSTRUCTION BEING CONSIDERED TYPE m² (Rm) TIME Quagga extension Urban retail 5 042 140 14 months Highway Business Park Industrial 6 500 54 9 months Randjiespark Industrial 5 551 40 10 months Tramshed common area refurb Urban re
Slide 72: Sustainability planning
Sustainability planning WATER CLEAN ENERGY CARBON FOOTPRINT EFFICIENCY PRODUCTION REPORTING › Water harvesting continues › A further 3 PV farms were built › In line with our set Science to be the focus of our water in FY19: Based Targets, an 8.15% conservation initiatives » Wonderpark reduction in c
Slide 73: Top ten properties by value
Top ten properties by value PROPERTY NODE CLASSIFICATION GLA (m2) MAJOR TENANTS Wonderpark Pretoria Regional 90 916 Pick n Pay (12 867m²), Game (5 292m²),Checkers (4 709m²), Shopping Centre North Shopping centre Woolworths (4 642m²), Edgars (3 998m²), Virgin Active (3 508m²), Truworths (1 987m²) Men
Slide 74: Enyuka
Enyuka JUN 18 JUN 19 Number of properties 22 22 Property portfolio value R107bn R115bn Average value per m² R8 891 R9 483 Average value per property R49m R52m LTV (excluding shareholder loans) 33.5% 32.3% Vacancy profile by GLA 5.0% 3.4% Tenant retention % of GLA 71% 86% % of number of leases 63% 71
Slide 75: Annexures: Financials
ANNEXURES FINANCIALS EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 99
Slide 76: Cost-to-income ratio (%)
Cost-to-income ratio (%) 40% 37.2 36.8 37.6 35% 30% 25% 20% 18.2 15.3 15.5 15% 10% 5% 0% GROSS NET JUN 17 JUN 18 JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 100
Slide 77: Property expense analysis (%)
Property expense analysis (%) MUNICIPAL CHARGES 67 69 SECURITY EXPENSES 8 8 SERVICE CONTRACTS 6 6 RENT AND LEVIES PAID 4 4 MAINTENANCE 4 4 BAD DEBTS 3 3 LEASING EXPENSES 5 3 STAFF EXPENSES 1 1 MARKETING EXPENSES 0 1 CONSUMABLES 1 1 ADMINISTRATION EXPENSES 2 0 JUN 18 JUN 19 EMIRA PROPERTY FUND RESULT
Slide 78: Foreign income: weighted average hedged rate
Foreign income: Weighted average hedged rate per reporting period GOZ USA Forward rate against ZAR: AUD USD Dec 19 R11.34 R14.50 Jun 20 R11.64 R14.85 Dec 20 R11.33 R15.24 Jun 21 R11.85 R15.54 Dec 21 – R16.04 Jun 22 – R16.50 Dec 22 – R17.19 Jun 23 – R17.76 Dec 23 – R18.39 EMIRA PROPERTY FUND RESULTS
Slide 79: Valuation parameters
Valuation parameters JUN 2018 JUN 2019 Direct property portfolio Valuation (Rm) * 12 536 10 942 % of the portfolio valued externally 33% 31% Average value per property (Rm) ** 118 136 Average discount rate (%) *** 14.3 14.1 Average exit capitalisation rate (%) *** 9.1 9.0 Number of properties 104 80
Slide 80: Debt mix analysis
Debt mix analysis CURRENCY ZAR AUD USD TOTAL Income producing assets 12 656 760 1 068 14 484 Total facilities (Rm) 5 879 ^ 5 879 ^ Reclassified as foreign debt through IRS (Rm) (1 651) 737 914 – Adjusted total facilities (Rm) 4 227 737 914 5 879 Drawn facilities including accrued interest (net of ca
Slide 81: Debt covenants: Emira
Debt covenants: Emira Facility Value of Debt Debt Transaction Transaction Transaction Transaction Transaction Transaction Corporate Corporate Corporate Corporate properties facilities: facilities: LTV: LTV: LTV: LTV: LTV: LTV: LTV: LTV: Actual ICR: ICR: Available Drawn Covenant Actual Actual Covenan
Slide 82: Debt facilities by source
Debt facilities by source DRAWN DEBT BY FUNDER (%) AVAILABLE DEBT BY FUNDER (%) 4 13 3 3 12 12 11 0 8 NEDBANK 9 STANDARD BANK DMTN (UNSECURED) 19 DMTN (SECURED) RMB 22 ABSA INVESTEC 34 SANLAM 30 10 9 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 106
Slide 83: Loan to value calculation: Emira Group
Loan to value calculation: Emira Group Net Income producing interest-bearing assets debt LTV Rm Rm % As reported 14 478 5 226 36.1 Adjustment: Cross-currency interest-rate swaps (CCIRS) 39 Adjusted position including CCIRS 14 478 5 265 36.3 Adjustment: Balance of derivative contracts 65 Adjusted pos
Slide 84: Interest cover ratio calculation: Emira Group
Interest cover ratio calculation: Emira Group Measure 1 Measure 2* R'000 R'000 Profit before finance costs 1 288 351 1 288 351 Exclude: Allowance for future rental escalations 11 840 11 840 Amortisation of lease costs 1 752 1 752 Transaction and advisory fees 855 855 Impairments 41 042 41 042 Deprec
Slide 85: Segmental loan-to-value and interest cover ratios
Segmental loan-to-value and interest cover ratios Indirect investments (equity accounted) Emira Group USA Enyuka Transcend Accounting treatment n/a Equity Equity Equity accounted accounted accounted Equity held (%) n/a n/a 49.9 34.9 Loan-to-value ratio (%) 36.8 # 68.0 34.0 47.6 Loan-to-value ratio c
Slide 86: Cross currency interest rate swap exposure
Cross currency interest rate swap exposure Weighted Initial Interest Interest average Foreign IRS vs Nominal Nominal* exchange rate Y rate ZAR duration assets Foreign CCY'000 ZAR'000 rate (fixed) (floating) to expiry CCY'000 assets AUD (Growthpoint Australia) 74 500 778 685 10.45 2.1% 3m JIBAR 2.0 7
Slide 87: DMTN: Programme terms
DMTN: Programme terms Issuer Emira Property Fund Limited National scale ratings Short-term unsecured A1 (ZA) (stable outlook) (Global Credit Rating Co, Long-term unsecured A (ZA) (stable outlook) “GCR”) Long-term secured AA (ZA) (negative outlook) Programme size ZAR5 billion (ZAR3,965 million outsta
Slide 88: DMTN: Treasury guidelines
DMTN: Treasury guidelines Topic Guidelines Achieved Maturities Staggered maturity dates with ideally no more than 1/3 of total ✓ interest-bearing debt maturing within any one financial year and a minimum of 1.5 years weighted average duration to expiry Hedging strategy 80% – 100% of total long-term
Slide 89: DMTN: Security arrangements
DMTN: Security arrangements Counter Indemnity Debt Guarantee Counter Indemnity Agreement Mortgage Bond SPV Guarantee Agreement DEBT ISSUER GUARANTOR TRUSTEE Acting on behalf Emira Freestone of Group 1 Property Fund Mortgage Bond Noteholders (including its SPV Series 1 subsidiaries) (RF) Security pro
Slide 90: DMTN: Secured property portfolio (Loan to value)
DMTN: Secured property portfolio (Loan to value) Current position R’000 Value of secured portfolio 1 014 350 Notes in issue Existing – EPF007 70 000 – EPF016 130 000 – EPF017 200 000 – EPF018 100 000 470 000 LTV – actual 37.5% LTV – covenant 40.0% EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JU
Slide 91: DMTN: Secured property portfolio
DMTN: Secured property portfolio Offices Industrial › Albury Park › 14-16 Boston Circle › Hamilton House › Greenfields › Lone Creek › HBP Industrial Units › Industrial Village Rustivia Urban retail › Isando (20 Anvil Road) › Ben Fleur Shopping Centre › Johnson & Johnson › Springfield Retail Centre ›
Slide 92: DMTN: Secured property portfolio
DMTN: Secured property portfolio NUMBER OF PROPERTIES PER SECTOR 18 17 16 14 12 10 10 8 6 4 4 3 2 0 OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 116
Slide 93: DMTN: Secured property portfolio
DMTN: Secured property portfolio 2019 VALUE SPLIT PER SECTOR (%) R1.3bn 2019 GEOGRAPHICAL SPREAD BY VALUE (%) 19 11 34 JOHANNESBURG PRETORIA 42 OFFICES 25 WESTERN CAPE URBAN RETAIL KWAZULU-NATAL INDUSTRIAL MPUMALANGA 47 8 14 2019 GLA SPLIT PER SECTOR (%) 2019 GEOGRAPHICAL SPREAD BY GLA (%) 11 7 JOHA
Slide 94: DMTN: Secured property portfolio
DMTN: Secured property portfolio AVERAGE VALUE PER m² R/m² 20 000 14 938 15 000 13 060 10 000 8 498 4 948 5 000 0 OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 19 AVERAGE VALUE PER PROPERTY Rm 200 156 150 100 85 79 46 50 0 OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YE
Slide 95: DMTN: Secured property portfolio
DMTN: Secured property portfolio VACANCY PROFILE BY GLA 10% 8.3 5% 2.9 1.9 2.5 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 19 ESCALATIONS 10% 8.6 8.4 8.1 8% 7.2 6% 4% 2% 0% OFFICE URBAN RETAIL INDUSTRIAL TOTAL JUN 19 EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 119
Slide 96: DMTN: Secured property portfolio
DMTN: Secured property portfolio LEASE EXPIRY PROFILE BY GROSS RENTAL (%) 40% 36.4 Hundreds 35% 30% 25% 23.7 21.2 20% 15.9 15% 10% 5% 1.5 1.3 0% VACATED EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4+ (30/06/19) OVER (FY20) (FY21) (FY22) (FY23+) JUN 19 Property Tenant Lease end GLA (m²) Status Isando L
Slide 97: DMTN: Top tenants per property by gross rental
DMTN: Secured property portfolio (Top tenants per property by gross rental) 14-16 Boston Circle Bidvest Data Albury Park Network Space, Aegis Media Central Services, Scarab IT Solutions, Bouwers Intellectual Property Attorney, Apex Audio Visual Productions, Faurie Nell Incorporated, Charl Cilliers I
Slide 98: Annexures: US Offshore + Disposals
ANNEXURES US OFFSHORE + DISPOSALS EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 122
Slide 99: US Portfolio
US Portfolio BELDEN PARK STONY CREEK WOODLANDS PROPERTY CROSSING 32 EAST MOORE PLAZA MARKETPLACE SQUARE ACQUISITION DATE 17 Oct 17 19 Jan 18 18 Jan 18 28 Mar 18 26 Oct 18 PURCHASE PRICE (USD) 67 000 000 29 100 000 70 646 000 32 800 000 64 000 000 EMIRA INVESTMENT (USD) 8 400 000 4 250 000 13 240 510
Slide 100: US Portfolio
US Portfolio TRUMAN’S SAN ANTONIO WHEATLAND UNIVERSITY PROPERTY MARKETPLACE CROSSING TOWNE CENTER TOWN CENTER TOTAL ACQUISITION DATE 24 Dec 18 24 Feb 19 29 Mar 19 24 Jun 19 PURCHASE PRICE (USD) 30 650 000 20 480 000 32 200 000 63 000 000 409 876 000 EMIRA INVESTMENT (USD) 6 050 000 4 158 000 6 300 0
Slide 101: US Portfolio
US Portfolio BELDEN PARK STONY CREEK WOODLANDS PROPERTY CROSSING 32 EAST MOORE PLAZA MARKETPLACE SQUARE LOCATION Tampa, North Canton, Ohio Cincinnati, Ohio Corpus Christi, Texas Noblesville, Indiana Florida GLA (SF) 484 360 188 912 379 448 204 814 314 699 VACANCY % BY GLA 3.26% 3.18% 7.96% 2.66% 4.7
Slide 102: US Portfolio
US Portfolio TRUMAN’S SAN ANTONIO WHEATLAND UNIVERSITY PROPERTY MARKETPLACE CROSSING TOWNE CENTER TOWN CENTER TOTAL LOCATION Grandview, San Antonio, Dallas, Texas Norman, Oklahoma Missouri Texas GLA (SF) 308 209 146 321 206 874 348 877 2 582 514 VACANCY % BY GLA 1.46% 0.74% 3.32% 2.03% 3.56% AVE ANN
Slide 103: US Portfolio – leasing
US Portfolio – leasing AVG. AVG NEW AVG INCREASE/ AREA EXPIRY RENTAL LEASE RENTAL DURATION DECREASE 2 2 2 NO. (FT ) (USD/FT P.A) (USD/FT P.A) (YEARS) (%) REVERSIONS Renewals 8 39 308 21.24 21.53 6.49 1.4 New leases (with reversions)* 3 8 479 31.43 32.40 5.00 3.1 TOTAL – REVERSIONS 11 47 787 23.05 23
Slide 104: US Portfolio – lease expiry profile by GLA
US Portfolio – Lease expiry profile by GLA (%) JUN 19 60% Hundreds 53.68 50% 40% 30% 20% 17.31 11.65 10% 7.81 5.85 3.56 0.16 0% VACANCY EXPIRIES ROLLED YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5+ (30/6/19) OVER (FY20) (FY21) (FY22) (FY23) (FY24+) EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 1
Slide 105: GOZ disposals
GOZ disposals › 7.4m units disposed at average AUD4.11 › Ave cost AUD1.97 › Balance of 18.6m shares held EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED 30 JUNE 2019 129
Slide 106: US co-investment strategy
US co-investment strategy › Dallas, Texas based › 18 professional staff › 4 principals › Over 100 years collective experience › USD1.2bn of assets under management › USD2bn in commercial real estate investments closed › Unanimous decision making between Emira and Rainier EMIRA PROPERTY FUND RESULTS
Slide 107: Disposals
Disposals GLA BOOK VALUE SALE PRICE EXIT YIELD EFFECTIVE PROPERTY LOCATION SECTOR (m²) (Rm) (Rm) (%) DATE Corporate Park 66 Pretoria Office 13 344 167 051 300 167 051 300 9.99 04 Jan 19 Discovery Park PTA Pretoria Office 3 863 47 826 200 47 826 200 11.9 04 Jan 19 Highgrove Office Park Pretoria Offic
Slide 108: Disposals
Disposals GLA BOOK VALUE SALE PRICE EXIT YIELD EFFECTIVE PROPERTY LOCATION SECTOR (m²) (Rm) (Rm) (%) DATE Corobay Corner Pretoria Office 13 865 232 067 700 232 067 700 9.21 26 Feb 19 Derby Downs Durban Office 2 139 20 764 400 20 764 400 13.96 26 Feb 19 Omni Centrum Bloemfontein Office 5 447 25 870 4
Slide 109: Disposals
Disposals GLA BOOK VALUE SALE PRICE EXIT YIELD EFFECTIVE PROPERTY LOCATION SECTOR (m²) (Rm) (Rm) (%) DATE Tuinhof Pretoria Office 8 816 138 159 850 138 159 850 9.38 30 Apr 19 Cresta Corner Johannesburg Retail 9 748 106 900 000 96 000 000 11.80 24 May 19 Umgeni Road B – Durban Industrial 6 021 23 300
Slide 110: Forward-looking statements
Forward-looking statements This results presentation contains certain forward-looking statements relating to the financial performance and position of the Group. All forward-looking statements are solely based on the views and considerations of the directors. While these forward-looking statements r