Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2010 Earnings Presentation
19 slides from Hyprop Investments's earnings presentation, March 2011
Slide 1: Audited results for the year ended 31 December 2010
evolve TO MEET NEW LIFESTYLES AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010 Agenda Financial Review Operational Review Developments Investment Performance Attfund Retail Transaction Prospects 02 1
Slide 2: Snapshot and Highlights
Snapshot Premium regional and super regional shopping centres Sustainable lease profile Active property management by experienced in-house team Property assets R11.2 billion ― 6 Shopping centres across 3 provinces - 78% of revenue ― Retail space 378 482m² / Office space 22 221m² ― 35% interest in Sy
Slide 3: Income Statement – extracts
eexcellence FINANCIAL REVIEW 05 Income Statement ― extracts 31 Dec 2010 31 Dec 2009 Rm Rm Revenue 1 105 910 21% Investment property 985 790 25% Sycom 120 120 Property expenses -372 -259 44% Net property income 733 651 13% Other operating expenses -35 -48 -27% Operating income 698 603 16% Net interes
Slide 4: Net income – Investment Property; Balance Sheet – extracts
Net income ― Investment Property Rm 350 31 Dec 31 Dec % 2009 2010 Change 300 13% Net R489m R531m 8.8% 276 income* 250 244 200 150 37% 10% 100 -2% 103 88 80 75 50 66 65 20% -4% 23 28 14 0 13 Canal Walk Hyde Park The Glen The Mall of Stoneridge Southcoast Rosebank Mall * Like-for-like 07 Balance Sheet
Slide 5: Valuations and Borrowings
Valuations Total value Value per change Hyprop rentable from % Size share area Dec 09 Property Owned (m²) (Rm) (R/m²) % Canal Walk 80 150 394 4 556 37 867 13% The Glen 75 74 583 1 535 27 392 7% Hyde Park 100 36 894 1 277 34 613 2% The Mall of Rosebank 100 37 009 918 24 805 1% Stoneridge 90 50 241 40
Slide 6: Investments by income
v value OPERATIONAL PERFORMANCE 11 Investments by income The Mall of Rosebank Hyde Park Stoneridge Southcoast The Glen 12% 10% Mall 4% 2% 15% Offices 4% 6% Hotels 11% 35% Sycom 1% Canal Walk VPIF 12 6
Slide 7: Revenue spread and Vacancies
Revenue spread Office rental Operating cost recovery Customer parking 4% 12% 6% Monthly parking 1% 20% Municipal cost recovery 54% 1% 2% Turnover rent Retail rental Storerooms and other 13 Vacancies Canal Walk (1 602m²) The Grace (269m²) Hyde Park (833m²) Southcoast Mall 2% (1 777m²) 10% The Glen (4
Slide 8: New leases and lease renewal schedule
New leases Concluded in the period 1 Jan to 31 Dec 2010 New Total Renewals leases Number of new leases 364 226 138 Contractual value of leases (Rm) 989 778 211 Lettable area (m²) 87 987 63 815 24 172 Average growth 9.3% 2.0% Average escalation 8.3% 9.1% 15 Hyprop lease renewal schedule % 70 Canal Wa
Slide 9: Lease exposure and Trading performance
Lease exposure Top 10 retailers as a % of GLA 0 1 2 3 4 5 6 7 8% Edcon 7 Pick 'n Pay 6 Massmart 5 Woolworths 5 Foschini 4 Shoprite Checkers 4 Mr Price Group 4 Avusa 3 Truworths 2 Stuttafords 2 17 Trading performance Retail turnover growth Shopper flow Spend per head % Change % Change Rand 60 15 200
Slide 10: Hyde Park refurbishment
o open DEVELOPMENTS 19 Hyde Park refurbishment Refurbishment completed Nov 2010, key components: Escalator replacement Skylight & ceilings upgraded Parkades refurbished Parking & security offices, concierge desk New energy-efficient lighting Project completed within budget New hotel access road dela
Slide 11: Rosebank precinct redevelopment
Rosebank precinct redevelopment Final planning stages Complete refurbishment of existing centre Extension of retail across Bath Ave, total retail GLA potentially 68 000m² Excellent response from existing & potential new entrant retailers Integrated office development opportunities on Rosebank Garden
Slide 12: Distribution growth and Unit price growth
Distribution growth Cents pcu 400 Distributions 350 357 328 300 308 250 270 225 200 190 150 163 140 126 130 100 117 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 12% average growth over the last 10 years 17 years of consecutive growth 23 Unit price growth Combined unit price 70 Combine
Slide 13: Unit performance and Unitholder profile
Unit performance against indices Outperformed peer group 450 +24%* Hyprop 400 ALSI +16%* 350 PLS 300 +21%* 250 200 150 100 50 2003 2004 2005 2006 2007 2008 2009 2010 * Increase for 2010 25 Unitholder profile Redefine Properties Other 37.6% 45.7% 5.3% 5.7% 5.8% Standard Bank Old Mutual Funds Stanlib
Slide 14: Prospects
vvariable PROSPECTS 27 Prospects Impact lower: Impact higher: Hotels Strengthening retail market Sycom Redefine fees The Mall of Rosebank Attfund Retail transaction Southcoast Mall 28 14
Slide 15: Attfund Retail overview
e empower ATTFUND RETAIL TRANSACTION 29 Attfund Retail overview Properties include: Clearwater Woodlands Capegate Centurion Shopping Centre Boulevard Precinct (25% undivided share) Garden Route Mall Willowbridge Atterbury Somerset (20% indirect share) Value Mart Value Mart Lakefield Glenfield Glenwo
Slide 16: Rationale & benefits
Rationale & benefits Unique acquisition opportunity: ― Large, well-managed, retail-focused portfolio ― Compatible with Hyprop’s portfolio Enlarged property fund: ― 22 properties ― Total assets R20bn ― Market cap R15bn Younger Attfund Retail portfolio offers medium- to long-term growth opportunities
Slide 17: Transaction terms
Transaction terms Hyprop acquires Attfund Retail on the effective date being 1st of month following fulfilment of conditions precedent Total effective consideration R8.986bn 112m Hyprop units @ R54pcu R6.048bn Debt to be assumed by Hyprop R2.938bn Hyprop will assume R2.9bn of Attfund debt (fix at le
Slide 18: Distribution impact and NAV impact
Distribution impact Enhances distributions in first full year of operation Subsequent earnings growth enhanced by higher gearing Should Hyprop repurchase any placement units ito its underwriting commitment, higher gearing would result in: ‒ Short-term earnings dilution ‒ Earnings growth enhanced goi
Slide 19: Management; Questions & Answers
Management Board and management strengthened Board Appointments: ― Louis Norval ― Louis van der Watt Mareli Vorster (Operations Director: Parkdev Asset Managers) appointed (6-12 months) to assist with integration and delivery of 2011 Attfund Retail results Attfund Retail centre management & corporat