Grit Real Estate Income Group Limited · LSE:GR1T
Grit Real Estate Income — Mara Delta Property Holdings — FY2016 Earnings Presentation
52 slides from Grit Real Estate Income's earnings presentation, Jun 30, 2016
Slide 1: Annual Results Presentation
Annual Results Presentation FOR THE YEAR ENDED 30 JUNE 2016
Slide 2: Proceedings
Proceedings Barclays House, 1. Introduction 3-6 Mauritius 2. Highlights 7-8 3. The Journey to Date 9-15 4. Financial Review 16-22 5. Looking Ahead 23-32 6. Annexure A: Existing Property Portfolio 33-37 7. Annexure B: Pipeline 38-40 8. Annexure C: Corporate Structure 41-43 9. Annexure D: Investment S
Slide 3: Introduction
Moafa INTRODUCTION
Slide 4: Introduction to Mara Delta
Introduction to Mara Delta First African income fund focused on real estate in Africa (excluding South Africa) 1 listed on the Stock Exchange of Mauritius and the Johannesburg Stock Exchange 2 Diverse asset portfolio located in African countries with solid fundamentals Compelling total returns under
Slide 5: The Mara Delta Team Presenting Today
The Mara Delta Team Presenting Today Bronwyn Anne Corbett Chief Executive Officer BCom (Acc) (Univ. of Natal, PMB), CA(SA) Bronwyn has significant corporate finance and deal making experience. She played an instrumental role in the JSE listing of Delta Property Fund Limited in 2012 where she held
Slide 6: Mara Delta at a Glance
Mara Delta at a Glance Company Snapshot Geographic Presence Market Capitalisation US$174 million1 Total Property Value US$359.1 million2* Number of Properties / GLA (m2) 12 / 122 575m2* Property Location Morocco, Mozambique, Zambia, Mauritius, Kenya Target New Jurisdictions Botswana, Tanzania, Ugand
Slide 7: Highlights
Moafa HIGHLIGHTS
Slide 8: Highlights (for the year ended June 2016)
Highlights (for the year ended 30 June 2016) 4.1% INCREASED COST OF DEBT 40.0% INCREASE DPS DOWN 0.72% IN PROPERTY US$11.75 cps1 6.22% US$294.5m2 2015: US$11.28 cps 2015: 6.94% 2015: US$210.4m US$44.7m % OF A-GRADE OCCUPANCY CAPITAL RAISED TENANTS RATE 26.4m shares 90% 93%4 issued at a 2.3% premium
Slide 9: The Journey to Date
Moafa THE JOURNEY TO DATE
Slide 10: Mara Delta Timeline
Mara Delta Timeline 14 July 2014 24 July 2014 31 March 2015 28 April 2015 30 June 2015 October 2015 December 2015 May 2016 September 2016 Acquired Acquisition of Acquired Kafubu Anadarko Acquisition of Hollard/KPMG Acquisition of Expected transfer Debut on Acquisition of Mall and Building as its 1st
Slide 11: Diversified Portfolio Overview
Diversified Portfolio Overview (Post Current Acquisitions) Modern retail and office assets with attractive tenant mix located in African countries with strong fundamentals Portfolio Metrics(1) Corporate Light Regional Diversification (GAV) Retail Office Total Accomm. Industrial 4% 2% Number of 6 4
Slide 12: Asset Overview
Asset Overview (Post Current Acquisitions) Stake Pro-rata Valuation Pro-rata Properties Sector Country City Anchor Tenants (%) (US$m) GLA (m2) Anadarko Building Office Mozambique Maputo Anadarko Petroleum 100 41.6 7 805 KPMG / Hollard Office Mozambique Maputo KPMG, Hollard & BP 100 18.6 4 945 Buildi
Slide 13: High Quality Tenant Base
High Quality Tenant Base Mara Delta currently has a quality tenant base with a weighted average lease term of 5.5 years Anchor Tenants Tenancy Grading A+ (Global Corporates) 10% 45% A (National or African 45% Continent Corporate) B (Local Tenancy) Weighted Average Occupancy Rate / Lease Term 93% 9
Slide 14: Strong Financial Performance
Strong Financial Performance Strong improvement in key financial metrics with solid 12M 2016 performance Key Metric 12M 2016 12M 2015 Change Net Property Income Distributable Income Net Property In US$m In US$m 17.1 10.4 +64% Income (US$m) 17.1 EBIT 10.6 16.9 4.4 +284% (US$m) 10.4 6.4 Distributabl
Slide 15: Shareholder Base
Shareholder Base As at 30 June 2016 Units held Holding Government Employees Pension Fund 28 447 874 28.4% Delta Property Fund Limited 23 866 776 23.9% Pivotal Global 12 542 094 12.5% Management 6 910 137 6.9% Stanlib 6 254 681 6.3% Anchor Capital 4 887 498 4.9% Liberty Life 2 842 992 2.8% Grindrod 2
Slide 16: Financial Review
Moafa FINANCIAL REVIEW
Slide 17: Financial Overview
Financial Overview 12 months to 12 months to 30 Jun 2016 30 Jun 2015 Dividend per share (US$ cents) 11.75 11.28 Cost to income ratio 25.7% 25.0% Property LTV 48.9% 45.2% NAV per share (US$ cents) 163.27* 168.91 Weighted average rental/m² US$23.20 US$27.00 Weighted average rental escalation 3.8% 3.4%
Slide 18: Distributable Income Statement
Distributable Income Statement Unaudited Audited 12 months to 12 months to 30 Jun 2016 30 Jun 2015 US$ ’000 US$ ’000 Net property income 17 097 10 440 Rental income 23 012 13 918 Property operating expenses (5 915) (3 478) Other income and income from associates 4 166 384 Administrative expenses (3
Slide 19: Quality of Income
Quality of Income REALISED FOREX GAIN US$3.4 million CONCESSIONS PROVIDED TO ANFA TENANTS US$1.4 million WRITE OFF OF DISPUTED INVOICING (PRE-ACQUISITION OF ANFA) US$0.7 million ADDITIONAL PROVISION FOR BAD DEBTS US$0.8 million 19
Slide 20: Statement of Financial Position
Statement of Financial Position Unaudited Audited 30 June 2016 30 June 2015 US$ ‘000 US$ ‘000 Assets Non-Current assets 307 956 210 698 Investment property/associates 294 491 210 391 Other non-current assets 13 465 307 Current assets 35 873 25 343 Cash 17 772 6 565 Other current assets 18 101 18 778
Slide 21: Debt Summary
Debt Summary Debt Expiry Profile – USD ‘000 Debt Currency Exposure 70 000 MZN; 2% EUR; 22% 59 619 60 000 USD; 50 000 76% 40 000 38 000 30 000 WACD 19 000 20 000 Weighted Average Cost of Debt 20 000 14 548 8,50% 10 451 8,00% 10 000 7,50% 7,00% WACD 6,50% - Current Immediate Dec 2016 Mar 2018 Jul 2018
Slide 22: Debt Summary (Continued)
Debt Summary (Continued) Debt Composition Debt Exposure by Lender – 30 June 2016 Vendor finance; 11.8% Property Fixed Barclays Bank Interest – 63.6% Bank Unico of Mauritius; 4.9% Mozambique; 1.7% Revolver Standard Bank 12% Term Debt Mozambique; Investec South 81% 6.5% Africa; 32.0% Bridge Afrasia, 1
Slide 23: Looking Ahead
Moafa LOOKING AHEAD
Slide 24: Large Market Opportunity in Africa
Large Market Opportunity in Africa Africa offers high investment return potential supported by attractive macro growth prospects and impressive population growth 1 Attractive Macro Growth Prospect GDP CAGR 2015 - 2020E Current GDP 1,087 272 36 22 64 33 74 142 138 (US$bn) 7.8% 8.0% 6.7% 7.0% 5.1% 5
Slide 25: Large Market Opportunity in Africa (Continued)
Large Market Opportunity in Africa (Continued) Meaningful improvement in infrastructure as well as increasing levels of FDI and PE investments into Africa suggests an opportunity for foreign investors, with Africa still presenting a number of attractive investment opportunities 1 Closing the gap i
Slide 26: Risk Mitigation
Risk Mitigation The Fund continues to mitigate the high levels of perceived risk associated with African Real-Estate through the following measures: Currency Risk Prioritization of assets with USD or USD-denominated leases Prioritization of long-term leases with blue chip multinational Tenancy Ris
Slide 27: Mara Delta Growth Platform
Mara Delta Growth Platform High quality property management and development platform with deep market know-how Core Experienced Management Team & Corporate Governance Structure Board Risk Committee Audit Committee Investment Committee Remuneration Committee CEO Bronwyn Corbett CIO Head of Developm
Slide 28: Case Study: Anadarko Building
Case Study: Anadarko Building (incl. Phase II) An asset that fully encapsulates and speaks to Mara Delta’s positioning and investment strategy is the Anadarko Building – a flagship A+ Grade office building in Maputo Transaction Highlights Acquired in July 2014 for US$32.5 million, the property is
Slide 29: Attractive Yield Accretive Pipeline
Attractive Yield Accretive Pipeline* Targeted Target Price Pro-rata GLA No. Country Sector City Stake (US$m) (m2) (%) 1 Mozambique Office Maputo 100 8.8 2 580 2 Mozambique Retail Tete 100 27.2 11 571 3 Mozambique Office Maputo 100 15.1 3 234 Light 4 Kenya Nairobi 100 19.6 13 560 Industrial 5 Mauriti
Slide 30: Post-Pipeline Portfolio Overview
Post-Pipeline Portfolio Overview Further geographical and sectoral diversification, with a larger proportion of A+ grade tenants Jurisdictions split (by asset value) Tenancy grade split (by GLA) 5% 2% A+ (Global Mozambique Corporates) 12% 15% Morocco 40% Mauritius A (National or 54% African Contin
Slide 31: Prospects
Prospects DISTRIBUTION TOTAL COST ACCESS TO GROWTH (US$) RETURN OF DEBT PIPELINE 2% - 4% 12% 5.66% US$163.9m FORECAST Long term leases & FORECAST (REDUCED FURTHER) A Grade counterparties (Dividend Return - 6.7%) WINGS/ PIVOTAL RISK COMPETITIVE NIGERIA EXIT EXIT MITIGANT ADVANTAGE Multi-banked Ah
Slide 32: Thank You
Moafa THANK YOU
Slide 33: Annexure A: Existing Property Portfolio
ANNEXURE A: EXISTING PROPERTY PORTFOLIO
Slide 34: Geographic Spread
Geographic Spread Kenya (3) Population (million) 43.2 Morocco (1) GDP (USDbn, 2015) 60.9 1 Population (million) 33.0 Real GDP growth rate (2016 ave forecast) 6% GDP (USDbn, 2015) 110 GDP / Capita (USD, 2015) 1 331 Real GDP growth rate (2016 ave forecast) 1.8% CPI (2016 ave forecast) 5.4% GDP / Capit
Slide 35: Property Portfolio
Property Portfolio Anadarko Building KPMG/Hollard Building Vodacom Building Maputo, Maputo, Maputo, Location: Location: Location: Mozambique Mozambique Mozambique Anchor Anadarko Anchor KPMG, Hollard & Anchor Vodacom tenant: Petroleum tenant: BP tenant: Sector: Office Sector: Office Sector: Office L
Slide 36: Property Portfolio (Continued)
Property Portfolio (Continued) Kafubu Mall (50% ownership) Mukuba Mall (50% ownership) Location: Ndola, Zambia Location: Kitwe, Zambia Anchor Anchor Shoprite, Game, Shoprite tenant: tenant: Pick n Pay Sector: Retail Sector: Retail Land title: Leasehold Land title Freehold GLA: 12 141m2 GLA: 28 229m2
Slide 37: Properties under transfer
Properties under transfer Cosmopolitan Mall VDE Compound Location: Lusaka, Zambia Location: Tete, Mozambique Anchor tenant: Shoprite, Game Anchor tenant: Vale and Barloworld Sector: Retail Sector: Corporate Residential Land title: Leasehold Land title: Leasehold 83 x 3 bed villas GLA: 25 900m2 No of
Slide 38: Annexure B: Pipeline
Moafa ANNEXURE B: PIPELINE
Slide 39: Pipeline properties
Pipeline properties MOZAMBIQUE OFFICE* MAURITIUS HOSPITALITY* KENYA LIGHT INDUSTRIAL* UGANDA OFFICE* Location: Maputo, Mozambique Location: Bel Ombre, Mauritius Location: Nairobi, Kenya Location: Kampala, Uganda Sector: Office Sector: Hospitality (4 star) Sector: Light Industrial Sector: Office Land
Slide 40: Pipeline properties (Continued)
Pipeline properties (Continued) MOZAMBIQUE OFFICE* MOZAMBIQUE RETAIL* MAURITIUS HOSPITALITY* Mauritius (3 assets + Location: Maputo, Mozambique Location: Tete, Mozambique Location: 1 land parcel) Hospitality Sector: Office Sector: Retail (new build) Sector: (4 star/4 star+) Land title: Leasehold Lan
Slide 41: Annexure C: Corporate Structure
ANNEXURE C: CORPORATE STRUCTURE
Slide 42: Corporate Structure
Corporate Structure Assets funded by Equity (50%) and Investors Debt (50%) 50% of asset acquisition (plus costs) funded Each property is held in an “in- by shareholders country” PropCo, which has its own intermediary HoldCo (based Mara Delta Property in either Mauritius or Dubai) Holdings (“List
Slide 43: Governance
Governance Dual primary listing on the SEM and JSE Compliance with the Code of Corporate Governance of Mauritius and King III Code of Governance Independent Non-Executive Chairperson Majority Non-Executive Directors appointed to the Board Independent Board Sub-Committees: Investment Comm
Slide 44: Annexure D: Investment Strategy & Criteria
ANNEXURE D: INVESTMENT STRATEGY & CRITERIA
Slide 45: Investment Strategy
Investment Strategy Investment Strategy Leverage on existing knowledge base and experience in Mozambique, Morocco, Zambia, Mauritius and Kenya Grow portfolio based on quality USD based leases and strong counterparties Focus on countries with existing/pending REIT structures Develop and maint
Slide 46: Investment Criteria
Investment Criteria The Fund considers key criteria such as: ability to conduct business in hard currency, repatriation of funds, political risk, currency risk, land tenure and debt raising ability in the first instance before proceeding further with any investment opportunity Investment opportu
Slide 47: Annexure E: Management Team
Moafa ANNEXURE E: MANAGEMENT TEAM
Slide 48: Executive Team
Executive Team Bronwyn Anne Corbett Bronwyn is the Chief Executive Officer of Mara Delta Property Holdings, the largest pan African focused real estate fund listed on Chief Executive Officer the Johannesburg Stock Exchange and in Mauritius. Corbett has significant corporate finance and deal making e
Slide 49: Management Team
Management Team INVESTMENT MANAGEMENT Mike Sewell Mike is a charted management accountant with over eight years’ international experience in real estate, having worked on a cross Head of Acquisitions section of deal structures, asset sectors and jurisdictions. His previous position as Fund Finance M
Slide 50: Management Team (Continued)
Management Team (Continued) FINANCE Jaco van Zyl Jaco holds a BCom Degree from the North-West University, a BCompt Honours Degree from the University of South Africa and he is a Group Finance Manager: Mauritius qualified Chartered Accountant. After completing articles he’s moved to Federal Airlines
Slide 51: Management Team (Continued)
Management Team (Continued) OPERATIONS Trevor Matthews Trevor has over 30 years industry experience beginning his career in 1979 as a property assistant, a position he held for six years, in Senior Operations Asset Manager which he established the building blocks to a long and successful career in t
Slide 52: Disclaimer
Disclaimer For professional advisers or Qualified Institutional Buyers only. This material is not suitable for retail clients. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may
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