Slide 1: Interim results presentation
Interim results presentation for the six months ended 31 March 2018 A
Slide 2: Company capital structure
Company CAPITAL STRUCTURE R5bn in assets A share R3,3bn 47m in issue B share market cap Preferential dividend 405m in issue Enhanced when 7 times cash cover growth exceeds 5% Dual class Steady growth at lower of 5% or CPI Benefits from acquisitions share structure B share trading at: 17% discount to
Slide 3: Who we are – affirming our mandate
Who we are – affirming our mandate ›› High-growth, high-yield income fund ›› South African focused ›› Highly acquisitive ›› Buy properties above R20m ›› Diversified portfolio of 139 properties across all nine provinces and asset classes 02
Slide 4: Why Gemgrow – our investment case
Why Gemgrow – our investment case High-yield and Growth through high-income acquisition Dual-class asset growth strategy A and B share structure De-risked balance Pure property play sheet – 29% LTV, 97% – using tried debt hedged, 3,8 years and tested weighted average business model debt expiry profi
Slide 5: Our highlights
Our highlights ›› Dividend on A share of 52,18 cents and dividend on B share of 38,52 cents in line with guidance for interim period ›› 7x cash cover on A shares ›› Strong balance sheet – low LTV of 29%, 97% debt hedged ›› Debt expiry profile improved to 3,8 years (2017: 1 year) ›› R549m of acquisit
Slide 6: How we do it
How we do it ›› Internalised asset management ›› Maximum value from core portfolio ›› Hands on asset management ›› Reduce vacancies ›› Ensure lease expiries, re-letting and renewals are managed with efficiency ›› Cost centres tightly managed ›› Aggressive letting strategies ›› Increase staff capacit
Slide 7: Where we are improving
Where we are improving Strategic disposals Unlocking income on vacant space Further capital Unlocking Upside income allocation non-GLA from acquisition improvements income – solar vacancies considerations 06
Slide 8: How we manage risk
How we manage risk Limited single tenant risk enant spread 1 240 leases across our portfolio, diversified geographically T and by asset class De-risked debt funding on the balance sheet Sound corporate governance 07
Slide 9: Property portfolio overview
Property portfolio overview 139 R5bn 759 964m2 9% properties in all diversified total GLA vacancy nine provinces in SA portfolio value 08
Slide 10: Portfolio spread by value (%)
Portfolio spread by value (%) 11 Provinces 1 56 2 Gauteng 56 Eastern Cape 4 Western Cape 13 1 10 Limpopo 11 2 Mpumalanga 2 Free State 1 KwaZulu-Natal 10 Northern Cape 2 North West 1 4 13 09
Slide 11: Property portfolio overview
Property portfolio overview By GLA (%) By revenue (%) 22 Retail 27 Retail 33 Office 46 Office 45 Industrial 27 Industrial 10
Slide 12: Average gross rental per sector
Average gross rental per sector AS AT 31 MARCH 2018 Providing value for tenants with attractive rental rates Retail R104/m2 Office R118/m2 Industrial R48/m2 11
Slide 13: Renewals and expiries
Renewals and expiries AS AT 31 MARCH 2018 ›› 72% of all lease expiries were renewed ›› Contractual lease escalations (%) ›› 23% of the balance was re-tenanted Retail: 8,0 Office: 8,3 ›› 79% tenant retention or re-let Industrial: 8,1 ›› Lease renewal step up escalations (%) Portfolio: 4 Retail: 2 Off
Slide 14: Combined lease expiry profile by revenue
380 410 Retail 1 174 466 Office Industrial 675 625 Monthly: 5% 959 956 2 874 945 2018: 12% 1 898 693 AS AT 31 MARCH 2018 2 980 563 7 449 650 2019: 34% 5 858 673 2 521 137 2020: 18% 2 921 865 3 073 482 2 990 979 3 701 599 2021: 16% 991 245 3 449 766 3 195 572 >2021: 15% 637 203 Combined lease expiry
Slide 15: Combined lease expiry profile by GLA
Combined lease expiry profile by GLA AS AT 31 MARCH 2018 131 016 Retail Office Industrial 80 041 46 970 45 875 74 426 36 036 34 807 34 100 35 165 30 793 31 101 29 161 25 923 21 887 20 891 21 218 19 320 12 246 15 116 10 298 4 142 Vacancy: 9% Monthly: 5% 2018: 11% 2019: 30% 2020: 19% 2021: 12% >2021:
Slide 16: Letting and vacancies
Letting and vacancies AS AT 31 MARCH 2018 MARCH 2018 Sector Total (m2) Let (m2) Let (%) Vacant (m2) Vacant (%) Retail 166 923 151 806 91 15 117 9 Office 253 208 219 107 87 34 101 13 Industrial 339 832 320 512 94 19 320 6 Total 759 963 691 425 91 68 538 9 15
Slide 17: Positive impact
Positive impact S unwood Office Park – reduced 2 329m2 B edford Corporate Park – renovation vacancy to 1 094m2 * and turnaround R oodepoort Robertville – reduced 3 53 Rivonia medical suites – 7 000m2 vacancy to 700m2 * converted to medical suites – Fujifilm vacated 3 000m2 pocket D isposed of Town T
Slide 18: How we structured our debt
How we structured our debt AS AT 31 MARCH 2018 77% ›› Weighted average debt expiry profile: R1 124m 3,8 years (2017: 1 year) ›› Effective interest rate: 9,39% (2017: 9,39%) ›› Debt hedged: 97,4% (2017: 66,4%) ›› Loan to value: 29,1% (2017: 22,6%) 14% 9% R201m R139m 2018 2019 2022 17
Slide 19: Our financial performance
Our financial performance CONDENSED CONSOLIDATED FINANCIAL RESULTS Unaudited six months ended 31 March R’000 2018 2017 Revenue (excluding straight line rental income) 360 652 314 907 Property expenses (133 026) (125 209) Administration and corporate costs (5 115) (5 939) Finance charges (53 457) (46
Slide 20: Our financial position
Our financial position Unaudited at 31 March R’000/unaudited 2018 2017 Assets Non-current assets 5 334 028 4 665 294 Investment property 5 022 635 4 339 685 Other non current assets 311 393 325 609 Current assets 143 353 159 602 Total assets 5 477 381 4 824 896 Equity and liabilities Shareholders in
Slide 21: Where to next
Where to next Well positioned to meet guidance Strong balance sheet and headroom for growth Pipeline of acquisitions 20
Slide 22: Thank you
Gemgrow Properties Ltd Thank you Registration number: 2007/032604/06 JSE Share code: GPA ISIN: ZAE0000223269 GPB ISIN: ZAE0000223227 Directors Registered Office Transfer Secretaries Company Secretary Mark Kaplan (CEO) Gemgrow Properties Limited Link Market Services South Gillian Prestwich Junaid Lim