Fairvest Limited Class A · JSE:FTA
Fairvest Limited Class A — Gemgrow Properties — H1 2019 Earnings Presentation
21 slides from Fairvest Limited Class A's earnings presentation, Mar 31, 2019
Slide 1: Results Presentation for the six months ended 31 March 2019
Results Presentation for the six months ended 31 March 2019
Slide 2: Our Highlights
OUR HIGHLIGHTS 54,54 cents R761m R425m dividend per A share of property acquisitions disposals of non-core concluded assets in the current 35,31 cents year of which R98m transferred during the dividend per B share 6-month period ending 31 March 2019 32% Vacancies Proposed loan 2019: 9,0% merger to v
Slide 3: Company Capital Structure
COMPANY CAPITAL STRUCTURE R5,6bn A SHARE B SHARE in assets 63m in issue 408m in issue Preferential dividend Enhanced when R2,9bn 5 times cash cover growth exceeds 5% market cap Growth capped at 5% Dual class share structure B share trading at 31% discount to NAV 02
Slide 4: Gemgrow at a Glance
GEMGROW AT A GLANCE 163 815 412m2 properties total GLA R5,6bn Diversified portfolio value across the country 03
Slide 5: Strategy
STRATEGY 1 Focusing only on South Africa 2 Diversified by retail, office and industrial 3 Pure property play, no listed holdings 4 Own assets with high tenant demand 5 Sustainable income streams 6 Working towards service-driven offering 04
Slide 6: Merger with Arrowhead
MERGER WITH ARROWHEAD → Scale → Reduced reporting time → Liquidity and costs → Focus on pure property → 11x cash cover → Retaining dual A and B → R11bn in physical property share structure → Possible SAPY inclusion → R16bn in assets → Expect to implement before year-end 05
Slide 7: Innovation
INNOVATION → Relationship manager → Focus division → High performance supplementing culture renewals, new deals and arrears → Forecasting technology → Increased resources 06
Slide 8: Property Portfolio Overview as at 31 March 2019
PROPERTY PORTFOLIO OVERVIEW AS AT 31 MARCH 2019 SECTORAL PROFILE BY m² (%) SECTORAL PROFILE BY REVENUE (%) 28 25 36 43 29 39 28 Retail 36 Retail 29 Office 39 Office 43 Industrial 25 Industrial 07
Slide 9: Portfolio Spread by Revenue (%) provinces
PORTFOLIO SPREAD BY REVENUE (%) 24 provinces 47 1 47 Gauteng <1 <1 Free State <1 North West 1 Mpumalanga <1 9 24 Limpopo 4 Eastern Cape 2 9 KwaZulu-Natal 11 Western Cape 2 Northern Cape 4 11 08
Slide 10: Renewals and Expiries as at March 2019
RENEWALS AND EXPIRIES AS AT 31 MARCH 2019 67% ONTRACTUAL LEASE C EASE RENEWAL STEP L of all lease expiries ESCALATIONS (%) UP ESCALATIONS (%) were retained Portfolio: -2 Retail: 7,5 Retail: -4 30% Office: 7,8 Office: -3 of the balance Industrial: 7,9 Industrial: 1 was re-tenanted 77% NEW DEALS IN RE
Slide 11: Renewals 2020: Our lease expiry profile for 2020
RENEWALS 2020 Our lease expiry profile for 2020 LEASES GLA REVENUE Description Number % m2 % Rand % Retail 151 38 47 946 26 4 259 263 34 Office 130 33 37 629 21 3 988 699 32 Industrial 114 29 95 506 53 4 211 149 34 Total 395 100 181 081 100 12 459 112 100 This represents 22% of the portfolio in term
Slide 12: Average Gross Rental per Sector
AVERAGE GROSS RENTAL PER SECTOR AS AT 31 MARCH 2019 providing value for tenants with attractive rental rates R101/m2 R123/m2 R46/m2 Retail Office Industrial 11
Slide 13: Letting and Vacancies as at 31 March 2019
LETTING AND VACANCIES AS AT 31 MARCH 2019 MARCH 2019 Sector Total (m2) Let (m2) Let (%) Vacant (m2) Vacant (%) Retail 231 638 216 368 93,4 15 270 6,6 Office 232 171 199 530 85,9 32 641 14,1 Industrial 351 603 326 250 92,8 25 353 7,2 Total 815 412 742 148 91,0 73 264 9,0 12
Slide 14: Combined Lease Expiry Profile by GLA
COMBINED LEASE EXPIRY PROFILE BY GLA (m2) AS AT 31 MARCH 2019 95 506 100 000 73 648 80 000 56 649 54 584 51 860 47 946 45 861 60 000 45 415 40 020 39 185 37 629 34 513 32 641 29 776 26 920 40 000 25 353 21 024 18 007 16 816 15 270 20 000 6 716 Vacancy: 9% Monthly: 6% 2019: 14% 2020: 22% 2021: 19% 20
Slide 15: Combined Lease Expiry Profile by Revenue
COMBINED LEASE EXPIRY PROFILE BY REVENUE (R) AS AT 31 MARCH 2019 5 125 522 4 893 619 6 000 000 4 467 260 4 355 791 4 259 263 4 211 149 3 988 698 5 000 000 3 543 499 3 075 684 2 868 852 4 000 000 2 719 268 2 605 099 2 610 039 2 299 150 2 090 621 3 000 000 1 286 010 2 000 000 699 574 732 217 1 000 000
Slide 16: Disposal Summary 2019
DISPOSAL SUMMARY 2019 Description Rm % Retail 83 20 Office 305 71 Industrial 37 9 Total 425 100 Split Transferred 6 March 2019 98 23 Yet to transfer 327 77 1. LTV will drop to 28% once R327m transfers and proceeds are used to settle debt 2. Furthermore, negotiating a further tranche of R150m of disp
Slide 17: Condensed Consolidated Financial Results for the Six Months Ended 31 March 2019
CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2019 R’000 2019 2018 Revenue (excluding straight line rental income) 424 831 360 652 Property expenses (162 977) (133 026) Administration and corporate costs (11 312) (5 115) Finance charges (91 746) (53 457) Finance income 1
Slide 18: Our Financial Position
OUR FINANCIAL POSITION Unaudited at 31 March R’000/unaudited 2019 2018 Assets Non-current assets 5 753 886 5 334 028 Investment property 5 583 927 5 022 635 Other non-current assets 169 959 311 393 Current assets 330 030 143 353 Total assets 6 083 916 5 477 381 Equity and liabilities Shareholders in
Slide 19: How We Structured Our Debt
HOW WE STRUCTURED OUR DEBT Weighted average debt expiry profile: 3,8 years 57% ffective interest rate: E 10,0% Debt hedged: 77% Loan to value: 32% 36% 7% R139m R1 131m R731m 2019 2022 2023 18
Slide 20: Prospects
PROSPECTS Arrowhead/Gemgrow merger Well positioned to meet guidance Strong balance sheet isposals of R500m including 2018 – working towards D disposing of a further R500m 19
Slide 21: 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