Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2009 Earnings Presentation
39 slides from Hyprop Investments's earnings presentation, March 2010
Slide 1: Audited Results for the year ended 31 December 2009
evolve to meet new lifestyles Audited Results for the year ended 31 December 2009
Slide 2: Agenda
Agenda CEO Introduction Financial Review Operational Performance Shopping Centre Review Developments Investment Performance Prospects 2
Slide 3: Snapshot
Snapshot Premium regional and super regional shopping centres Sustainable lease profile Active property management by experienced in-house team Property assets R10.5 billion ― 6 Shopping centres across 3 provinces - 80% of revenue ― Retail space 378 482m² / Office space 22 221m² ― Expansion programm
Slide 4: Highlights ― Operational
Highlights ― Operational Like-for-like net income growth 12.0% Rental growth on renewals 10.6% Maintained high occupancy levels 95.7% Average escalation 8.7% - renewals and new lettings Continued demand for retail space 4
Slide 5: Highlights ― Financial
Highlights ― Financial Cents pcu 400 Distribution growth 300 328 308 270 Average growth per annum 200 225 190 2005 – 2009 15.1% 100 0 2005 2006 2007 2008 2009 Distribution 328 cents 6.5% Property assets R10.5 billion 12.5% NAV R53.16 pcu 7.4% (excl. deferred taxation) Gearing 13% Strong Balance Shee
Slide 6: Financial Review
FINANCIAL REVIEW evolve to meet new lifestyles 6
Slide 7: Income Statement ― extracts
Income Statement ― extracts 31 Dec 2009 31 Dec 2008 Rm Rm Revenue 910 765 19% Investment property 790 658 20% Sycom 120 107 12% Property expenses (259) (205) 26% Net property income 651 560 16% Other operating expenses (48) (41) 16% Operating income 603 519 16% Net interest (71) (17) Net operating i
Slide 8: Net income ― Investment Property
Net income* ― Investment Property Rm 300 31 Dec 31 Dec % 18% 2008 2009 Change 250 244 Net income* 417 466 12% 200 207 150 100 12% 15% 8% 80 75 50 71 65 66 61 8% 13 14 0 Canal Walk Hyde Park The Glen The Mall of Southcoast Rosebank Mall * Like-for-like 8
Slide 9: Balance Sheet ― extracts
Balance Sheet ― extracts 31 Dec 2009 31 Dec 2008 Rm Rm Investment property 8 880 7 717 15% Sycom 1 454 1 421 2% VPIF 169 179 Other assets 305 171 Total assets 10 808 9 488 14% Combined unitholders funds 7 340 6 904 6% Long-term loans 1 550 900 Gearing 13% 8.9% Net Asset Value (R) 44.29 41.56 7% Net
Slide 10: Valuations
Valuations Total value per Hyprop rentable Value % Size share area change Property Owned (m²) (Rm) (R/m²) % Canal Walk 80 150 394 4 040 33 578 16 The Glen 75.5 74 583 1 439 25 676 22 Hyde Park 100 36 894 1 250 33 881 3 The Mall of Rosebank 100 37 009 905 24 454 3 Stoneridge 90 50 241 426 9 415 -8 So
Slide 11: Borrowings
Borrowings 31 Dec 2009 31 Dec 2008 Net borrowings R1 372m R834m Average interest rate 9.48% 9.54% Gearing 13% 8.9% Debt at fixed rates 97% 100% Length of fixes 2-5 years 3-5 years Debt at fixed rates reduced to 84% in January 2010 11
Slide 12: Debt repayment profile
Debt repayment profile 31 Dec 2010 R450m 31 Dec 2011 R450m 30 Nov 2013 R450m 31 Aug 2014 R200m R1 550m 12
Slide 13: Operational Performance
OPERATIONAL PERFORMANCE evolve to meet new lifestyles 13
Slide 14: Investments by income
Investments by income The Mall of Rosebank Hyde Park Southcoast Mall The Glen 10% 2% 13% Stoneridge 12% 5% Hotels 2% 4% Offices 13% Sycom 37% 1% Canal Walk VPIF 14
Slide 15: Revenue spread
Revenue spread Office income Operating cost recovery 4% 14% Customer parking 5% Monthly parking 1% 17% Municipal cost recovery 57% 1% 1% Turnover rent Retail income Storerooms and other 15
Slide 16: Vacancies
Vacancies Stoneridge (11 399m²) Canal Walk (3 013m²) 17% The Mall of Rosebank (612m²) 3% 63% 3% The Glen (521m²) 5% Hyde Park (300m²) 8% Southcoast Mall (1 373m²) 1% 1% Mall offices (163m²) The Grace (269m²) Total vacancies increased to 4.5% (Dec 08: 3.3%) Total m² vacant: 18 210 m² Vacancies excl.
Slide 17: New leases
New leases Concluded in the period 1 Jan to 31 Dec 2009 New Total Renewal leases Number of new leases 326 154 172 Contractual value of leases (Rm) 483 312 171 Lettable area (m²) 75 767 20 724 55 044 Average growth 10.6% 2.0% Average escalation 9.4% 8.4% 17
Slide 18: Hyprop lease renewal schedule
Hyprop lease renewal schedule % ,60 Canal Walk The Glen ,50 Hyde Park The Mall of Rosebank 44 ,40 Stoneridge 42 Southcoast 37 36 34 34 ,30 32 32 30 26 ,20 20 19 20 17 16 18 ,10 12 11 13 11 10 7 8 7 8 7 6 0 2 4 ,0 2010 2011 2012 2013 2014 18
Slide 19: Lease exposure
Lease exposure Top 10 retailers as a % of GLA 0 1 2 3 4 5 6 7 8 9% Edcon Pick 'n Pay Massmart Woolworths Foschini Shoprite Checkers Mr Price Group NuMetro Truworths Stuttafords 19
Slide 20: Trading performance
Trading performance Jan – Dec 2009 Retail turnover 3% Shopper flow Consistent with 2008 Spend per head R124 3% % Net rental/ 8% Retail turnover Tenant arrears – 2.6% (2008: 1.5%) % of total revenue 20
Slide 21: Shopping Centre Review
SHOPPING CENTRE REVIEW evolve to meet new lifestyles 21
Slide 22: Canal Walk
Canal Walk Market valuation R5.05 billion Turnover +3% GLA 150 394m² Shopper flow -2% Vacancy 2% Spend per head R164 6 new retail units opened for trade (Boulevard Shopping) Food court and La Piazza upgraded Focus for 2010 Focus on renewals - rental uplift/mix enhancements Tenant interventions - res
Slide 23: The Glen
The Glen Market valuation R1.9 billion Turnover +6% GLA 74 583m² Shopper flow +10% Vacancy 0.7% Spend per head R103 Retail extension completed and opened for trade Super regional management team Focus for 2010 Tenant mix enhancements Upgrade of existing stores (Woolworths) Strategic marketing (turno
Slide 24: Hyde Park
Hyde Park Market valuation R1.25 billion Turnover +3% GLA 36 894m² Shopper flow -7% Vacancy 2.3% Spend per head R165 Southern Sun Hotel opened September 2009 Focus for 2010 Mall refurbishment Tenant mix enhancements Store upgrades Strategic marketing (increased competition; VIP customer experience)
Slide 25: The Mall of Rosebank
The Mall of Rosebank Market valuation R905 million Consistent Turnover with 2008 GLA 37 009m² Shopper flow -4% Vacancy 1.7% Spend per head R59 Planet Fitness opened Focus for 2010 Co-ordinate precinct marketing strategy Leasing strategy (tenant mix; short-term vacancies) Mall refurbishment and exten
Slide 26: Stoneridge
Stoneridge Market valuation R473 million Turnover N/A GLA 50 241m² Shopper flow N/A Vacancy 22.7% Spend per head N/A Focus for 2010 Leasing strategy: ― Tenant mix; ― Underperforming tenants (concessions; downsizing; relocation; termination) ― Vacancies and replacements Retail consultant to assist in
Slide 27: Southcoast Mall
Southcoast Mall Market valuation R282 million Turnover +7% GLA 29 361m² Shopper flow +5% Vacancy 4.7% Spend per head R104 Engen garage completed Focus for 2010 Positioning relative to Shelly Centre Strategic marketing Focus on tenant mix ― Possible extension ― Reconfiguration of space ― Fast foods –
Slide 28: Developments
DEVELOPMENTS evolve to meet new lifestyles 28
Slide 29: Completed projects
Completed projects Canal The Southern Sun Rm Walk Glen Hyde Park Size 15 521m² 19 063m² 132 rooms Anticipated yield (%) 8.2 10.2 5.5 Completion date Jul 09 Nov 09 Sep 09 Canal Walk extensions 100% let The Glen extensions 100% let Southern Sun Hyde Park occupancy forecast reduced Capital cost of thre
Slide 30: Investment Performance
INVESTMENT PERFORMANCE evolve to meet new lifestyles 30
Slide 31: Distribution growth
Distribution growth Cents pcu 350 Distributions 300 328 308 250 270 200 225 190 150 163 126 130 140 100 108 117 50 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 12% average growth over the last 10 years 16 years of consecutive growth 31
Slide 32: Unit price growth
Unit price growth Combined unit price 60 Combined Unit Price over 10 years 50 4.5 4.6 40 4.2 3.9 30 3.0 20 2.0 10 1.4 1.0 1.0 1.2 0.8 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 21% average growth over the last 10 years 32
Slide 33: Unit performance against indices
Unit performance against indices Outperformed peer group 350 +9%* Hyprop 300 ALSI +29%* 250 PLS +3%* 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 * Increase for 2009 33
Slide 34: Unitholder profile
Unitholder profile Redefine Properties 3.3% Other 4.6% 0.8% 0.6% 0.7% Stanlib Funds Old Mutual Funds Standard Bank 34
Slide 35: Prospects
PROSPECTS evolve to meet new lifestyles 35
Slide 36: Hyprop strengths
Hyprop strengths Strong Balance Sheet and low gearing Quality assets Superior retail offering with sustainable lease profile Redefine consultancy agreement Hands-on management with specialist knowledge Executive team bolstered ― Steve Riley (Developments) ― Mark Ruffley (Leasing) 36
Slide 37: Future opportunities
Future opportunities Acquisitions VPIF disposal Sycom units 37
Slide 38: Prospects
Prospects Impact lower: Impact higher: Benefits of expansions at Cautious outlook on income growth Canal Walk and The Glen Savings on Asset Electricity increases Management fees Vacancies and collections at Stoneridge Renewals at Southcoast Mall Hotel occupancy Increased net interest cost Distributi
Slide 39: Questions & Answers
evolve to meet new lifestyles QUESTIONS & ANSWERS 39