Hyprop Investments Limited · JSE:HYP
Hyprop Investments — H1 2024 Earnings Presentation
67 slides from Hyprop Investments's earnings presentation, March 2024
Slide 1: Interim Results presentation
cc Interim Results presentation for the six months ended 31 Dec 2023
Slide 2: Agenda
2 Agenda Headlines and South Africa Eastern Europe Sub-Saharan Africa Financial In Closing Key Metrics Results
Slide 3: Headlines
Headlines 3 Creating spaces and connecting people Group South Africa Eastern Europe Sub-Saharan Africa Non-Tangible Assets • Distributable income decreased • Independent valuation on the • Independent valuation on the • Guaranteed $3 million interest • Somerset Mall successfully ran by 8.3% to R668
Slide 4: Key metrics
Key metrics 4 Group Distributable income (cps)/(R’m) 250 7.0 10.5 Effect of additional shares 200 37.4 0.9 Effect of realised forex loss in SSA 67.9 150 13.5% 60.4 Higher interest rates 231.0 13.4% 100 203.4 EE 156.9 146.0 128.3 176.1 118.0 SA 50 (2.3) 10.0 7.3 Africa 0 December 2021 December 2022 D
Slide 5: Key metrics
Key metrics 5 Group Interest cover ratio (ICR) IFRS ICR Cash ICR Loan to value ratio % Hyprop LTV SA REIT LTV 37.5% 37.4% 37.6% 3.2 37.2% 2.9 2.8 2.8 2.3 2.2 36.3% 36.1% December 2022 June 2023 December 2023 December 2022 June 2023 December 2023
Slide 6: South Africa
South Africa Investment property 62% Distributable income 67% Total GLA 71% CapeGate, Cape Town
Slide 7: SA operations – rolling 6 months
SA operations – rolling 6 months 7 Historic statistics updated for most recent available information Turnover (R’m) Effort ratio – portfolio (%) 14 000 5.6% 5.3% 12% 0.6% 15.8% 12 000 1.4% 11.2% 10% 1.2% 12.3% 0.3% 0.2% 10 000 8% 8 000 6% 6 000 4% 4 000 2 000 9 500 10 562 12 229 12 920 12 899 2% 11.
Slide 8: SA operations – rolling 6 months
SA operations – rolling 6 months 8 Historic statistics updated for most recent available information Average monthly foot count (m) Spend per head (R/person) 7.0 320 5.8% 5.0% 9.2% 0.1% 0.3% 300 6.5 6.1% 5.8% 280 10.5% 6.0 5.1% 260 20.7% 240 5.5 220 5.9 6.2 6.6 7.0 7.0 266.9 282.3 308.2 307.8 308.0
Slide 9: SA operations – 5 year trends
SA operations – 5 year trends 9 Turnover (m) Rental income (m) 27 000 2 500 25 000 1.2% 18.7% 16.3% 16.3% 7.5% 2.8% 5.1% 5.7% 0.4% 3.0% 2 300 23 000 2 100 21 000 1 900 19 000 17 000 1 700 15 000 1 500 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (12 months ending December) (12 months ending Dec
Slide 10: SA leasing activity – year-to-date
SA leasing activity – year-to-date 10 Reversions (by GLA) Positive Flat Negative 70% Retail Office Total 59% Renewal Reversion Rate* (2.3%) (4.7%) (2.4%) 60% (weighted average) * Relates to 7.5% of Portfolio GLA 50% 38% 40% 38% New Deal Reversion Rate^ 23.8% 49.3% 27.5% 40% 36% (weighted average) 31
Slide 11: SA leasing activity
SA leasing activity 11 Leasing workload FY2024 (m2) 188 960 155 313 105 316 Expiries 57 067 Expiries 22 740 Vacancies 22 625 Vacancies 75 506 Under negotiation 61 019 Under negotiation
Slide 12: SA new tenants
SA new tenants 12 Canal Walk Canal Walk Canal Walk Somerset Mall Somerset Mall The Glen The Glen Hyde Park Corner Hyde Park Corner Somerset Mall Woodlands Woodlands Woodlands CapeGate CapeGate Clearwater Mall Clearwater Mall Rosebank Mall Rosebank Mall Rosebank Mall
Slide 13: Eastern Europe
Eastern Europe Investment property 32% Distributable income 34% Total GLA 22% City Center one East, Zagreb
Slide 14: Macroeconomic and retail environment
Macroeconomic and retail environment 14 Real GDP growth (%) 2024 2025 2026 2027 2028 CPI (%) 2024 2025 2026 2027 2028 5 5 4 4 3 3 2 2 1 1 0 0 Bulgaria Croatia North Macedonia Europe Euro area Bulgaria Croatia North Macedonia Europe Euro area Unemployment Rate (%) 2024 2025 2026 2027 2028 Total shopp
Slide 15: EE operations – rolling 6 months
EE operations – rolling 6 months 15 Historic statistics updated for most recent available information Turnover (€’m) Effort ratio – portfolio (%) 350 12.5% 11.9% 16% 300 14.1% 16.1% 12% 0.5% 250 19.8% 0.5% 0.9% 0.3% 0.3% 200 8% 150 100 4% 50 208 241 275 310 309 10.6% 10.0% 9.2% 8.8% 8.9% 0 0% Dec 20
Slide 16: EE operations – rolling 6 months
EE operations – rolling 6 months 16 Historic statistics updated for most recent available information Average foot count (m) Spend per head (€/person) 3 10.2% 10.7% 22 16.1% 2.1% 1.1% 3.0% 1.7% 14.7% 20 12.8% 2 30.1% 18 16 1 14 12 1.8 2.0 2.3 2.4 2.4 19.6 20.1 19.8 21.8 21.7 0 10 Dec 2020 Dec 2021 D
Slide 17: EE operations – 5 year trends
EE operations – 5 year trends 17 Turnover (€m) Rental income (€m) 700 80 4.6% 24.7% 22.8% 13.6% 14.9% 2.9% 27.2% 22.7% 13.9% 10.5% 600 60 500 40 400 20 300 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (12 months ending December) (12 months ending December) Indexation - All tenants excl. pure
Slide 18: EE leasing activity – year-to-date
EE leasing activity – year-to-date 18 Reversions (by GLA) Positive Flat Negative Retail 70% 62% 61% Renewal Reversion Rate* 0.6% (weighted average) 60% * Relates to 10.6% of Portfolio GLA 50% 50% New Deal Reversion Rate^ 2.9% 40% (weighted average) 33% ^ Relates to 2.8% of Portfolio GLA 30% 26% 24%
Slide 19: EE leasing activity
EE leasing activity 19 Leasing workload FY2024 (m2) 1 390 27 925 27 368 Expiries 4 075 511 Vacancies 3 564 Under negotiation 557 Vacancies Workload Early Replacement GLA Added Renewals New Workload 1 July 2023 renewals Tenants Changes Vacancies complete lettings 31 December 2023
Slide 20: EE new tenants
EE new tenants 20 Skopje City Mall Skopje City Mall Skopje City Mall Skopje City Mall Skopje City Mall City Center one West City Center one West The Mall, Sofia The Mall, Sofia The Mall, Sofia City Center one West City Center one West The Mall, Sofia The Mall, Sofia The Mall, Sofia
Slide 21: Sub-Saharan Africa
Sub-Saharan Africa Investment property 6% Distributable income -1% Total GLA 7% West Hills Mall, Accra
Slide 22: Macroeconomics
Macroeconomics 22 Sub-Saharan Africa Cedi/USD Nigeria Inflation 12 35 30 10 25 8 20 6 15 4 10 2 5 0 0 2016 2017 2018 2019 2020 2021 2022 2023 Dec Feb 2016 2017 2018 2019 2020 2021 2022 2023 Dec Jan (June) 2023 2024 (June) 2023 2024 Naira/USD 3 Month Funding Rate 1 700 10.0% 1 500 1 300 1 100 900 1.0
Slide 23: SSA trading overview – rolling 6 months
SSA trading overview – rolling 6 months 23 Turnover ($’m) Turnover (Cedi’m) 60 500 12.1% 33.1% 2.1% 0.3% 50 10.1% 400 26.5% 1.6% 16.6% 40 4.2% 300 4.9% 30 200 20 100 10 45 51 37 36 36 265 309 412 421 422 0 0 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Jan 2024 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Jan 2024 (6
Slide 24: SSA trading overview – rolling 6 months
SSA trading overview – rolling 6 months 24 Spend per head ($/person) Spend per head (Cedi/person) 6 50 7.6% 3.4% 5.3% 1.1% 38.3% 5 40 23.6% 0.9% 2.0% 11.2% 2.8% 4 30 3 20 2 1 5.2 5.1 3.9 4.0 3.9 10 30.5 31.3 43.3 46.6 45.7 0 0 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Jan 2024 Dec 2020 Dec 2021 Dec 2022 D
Slide 25: Operational performance metrics
Operational performance metrics 25 Sub-Saharan Africa – ex-Game vacancy 26% 11% 63% Trading Signed lease Under negotiation
Slide 26: Disposals and interventions
26 Disposals and interventions Salient points • Managing fallout from economic deterioration in Ghana and Nigeria • Good progress in filling ex-Game space in Ghana • Converted the equivalent of $7.5m from naira into USD in FY24 ($8.7m in FY23) – used to pay down debt Sales process Ikeja City Mall (N
Slide 27: Financial results
Financial results The Mall, Sofia
Slide 28: Distributable income
Distributable income 28 Change in distributable income (R’m) Increase Decrease Europe (R13.8m) 133.8 South Africa (R11.5m) 63.0 (44.5) 728.4 Sub-Saharan Africa (R34.8m) (43.9) (30.6) (92.3) 11.1 (10.8) (13.9) (10.9) 7.6 668.3 (25.5) (3.2) December Income Operating Net Income Operating Net Taxation I
Slide 29: Borrowings profile
Borrowings profile 29 Debt exposure by currency (R’m) ZAR EUR USD Borrowings by lender Standard Bank Group LTV 37.4% LTV 36.3% Nedbank 16 000 (4) (14) 15 809 20.1% 17.1% 15 220 RMB 0% (0.8%) 1 588 1 602 2 257 3.6% ABSA 14 000 13.5% 7 201 Erste Bank 7 300 (30.9%) 10.0% DSK/OTP Bank (2 352) 12 000 13.
Slide 30: Change in LTV and sensitivity
Change in LTV and sensitivity 30 Movement in LTV from 30 June 2023 to 31 December 2023 (%) Increase Decrease Forward-looking LTV (%) 40 39 1.5 38 0.3 0.3 37.4 0.8 0.2 2.7 37 36.3 0.3 36 (1.8) 37.4 37.5 35 (0.5) (2.6) 34 33 32 31 30 LTV at FV of SA Capital FV of SSA FV of Dividend Profit for Increase
Slide 31: Group borrowings maturity profile
Group borrowings maturity profile 31 Rand equivalent (R’m) 3 500 3 000 2 874 2 500 2 000 850 500 410 250 1 500 1 054 1 025 1 526 1 000 1 117 500 200 760 500 502 500 549 498 500 482 500 545 410 348 410 425 - 240 ZAR debt USD debt EUR guaranteed debt EUR in-country debt RCF Liquidity (R’m) Unencumbere
Slide 32: Interest rate hedges
Interest rate hedges 32 Rand equivalents (R’m) Hedge maturity profile ZAR hedges USD hedges EUR hedges Forward starting ZAR Forward starting EUR 2 500 ZAR hedges replaced with forward-starting ZAR hedges 2 000 1 568 EUR hedges replaced 400 513 1 750 with forward-starting 1 500 EUR hedges 1 641 1 025
Slide 33: Interest rate profile
Interest rate profile 33 Interest rate exposure hedged (%) Average tenure at 31 December 2023 Interest cover ratio 120 2.93 106% Rand 102% 1.36 100 89% 83% 85% 82% 84% 80 75% 4.35 571m 2.3 Euro 2.23 times 60 766m 40 1.17 US Dollar 20 1.17 0 1 2 3 4 5 0 Years Total ZAR EUR USD 30 June 2023 31 Decembe
Slide 34: In closing
In closing Hyde Park Corner, Johannesburg
Slide 35: Our impact
35 Our impact Environment • The second phase of the Gauteng solar PV at Woodlands, Rosebank Mall and Clearwater was completed. New solar PV projects at the Glen and CapeGate have been approved • New solar PV feasibility studies at Canal Walk and Somerset Mall are underway • Successful integration of
Slide 36: Table Bay Mall acquisition
36 Table Bay Mall acquisition Key stats – December 2022 vs 2023 • Total Turnover by 16.15% - R265 396 731 total for the month • Trading density by 12.6% - R4179 for the month • Vehicle count by 5% - 267 244 cars • Spend per head by 14.5% - R420 • Foot count by 1.4%, 631 593 visitors • Vacancy level
Slide 37: Table Bay Mall acquisition
37 Table Bay Mall acquisition Quick wins • Installation of generators to enable uninterrupted trading during loadshedding – expected to be completed by FY2024 • Complete the solar project currently underway – expected to be completed in June this year • Revise trading hours to increase tenants’ turn
Slide 38: Purpose and priorities
Purpose and priorities 39 How we do it Purpose Owning and managing dominant retail centres Creating spaces and connecting people in mixed-use precincts in key economic nodes in South Africa and Eastern Europe Group South Africa Eastern Europe Sub-Saharan Africa Non-Tangible Assets Mitigate the follo
Slide 39: Q&A
Q&A Accra Mall, Accra
Slide 40: Annexures
Annexures Skopje City Mall, Skopje
Slide 41: SA properties
SA properties 41 Portfolio summary Canal Walk Clearwater The Glen Woodlands Boulevard CapeGate % Ownership 80% 100% 75.15% 100% 100% GLA 156 984 86 311 78 657 73 432 64 783 Vacancy levels Retail 0.5% 0.8% 2.9% 1.0% 0.6% Offices 27.0% Total foot count (6 months) *9.9m 4.7m 5.5m *4.2m *5.0m *Additiona
Slide 42: SA properties
SA properties 42 Portfolio summary Somerset Mall Rosebank Precinct Hyde Park Corner % Ownership 100% 100% 100% GLA 70 210 91 049 38 430 Vacancy levels 0% Retail 2.9% Retail 5.3% Offices 29.5% Office 46.3% Total foot count (6 months) 4.8m 6.0m 1.8m
Slide 43: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA 43 South Africa at 31 December 2023 % of total GLA June 2023 December 2023 10% 8.0% 8.0% 8% 7.5% 7.5% 7.0% 6.8% 6.0% 6.0% 6% 5.1% 5.1% 4.6% 3.9% 4.0% 4.1% 3.7% 3.8% 4% 2.3% 2.3% 2.2% 2.2% 2% 0% Woolworths Pick 'n Pay LTD Foschini Group Retailability Mass Mart Group Shopri
Slide 44: Trading performance
Trading performance 44 South African portfolio % of reported Trading density Primary category growth Total GLA turnover Department Stores: Clicks, Dis-Chem, Edgars, Game, Woolworths 2.3% 24.7% 24.7% Apparel: Mr Price, Foschini, Truworths 7.6% 19.6% 20.1% Food: Checkers, Pick 'n Pay, Liqour Stores, F
Slide 45: SA leasing activity
SA leasing activity 45 New lettings and renewals Renewal Weighted Rental reversion as Average of retention Rentable average % of average Contractual lease period rate by nr. of Gross lettable % of Total Leasing area (m2) reversion monthly rental escalation rate (year) Tenants area (m²) renewal workl
Slide 46: SA operations – 6 months average ending 31 December 2023
SA operations – 6 months average ending 31 December 2023 46 Historic statistics updated for most recent available information Tenant turnover (R’m) Effort ratio (%) 20% 4 500 6.6% Millions 4 000 4 135 16% 3 500 3 000 12% 2 500 0.4% 0.6% 0.3% 0.3% 0.3% 0.1% 2 000 0.8% 5.8% 8% 0.3% 0.4% 9.4% 8.8% 8.9%
Slide 47: SA operations
SA operations 47 Cost to income (%) Receivables and collections (R’m) – 100% of properties 46.0 46.6 1 773 45 0,5 Changes in expected 2,9 3,3 1,7 1,6 credit losses 40 2,1 2,3 3,9 3,6 Management and 35 other costs 4,9 5,0 30 Maintenance 25 Depreciation and 20 amortisation 15 30,5 30,3 Salaries and st
Slide 48: SA valuations bridge (R'm)
SA valuations bridge (R’m) 48 1.5% 344 9.0% 5.1% 178 23 376 4.5% 0.2% 0.2% 0.0% 85 0.0% 0.8% 72 7 23 032 14 1 (1) (12) June 2023 Canal Walk Clearwater The Glen Somerset Mall Woodlands Rosebank Hyde Park CapeGate December 2023 Boulevard Precinct Corner Increase Decrease Rosebank Precinct: Rosebank Ma
Slide 49: SA current projects
SA current projects 49 Mall Project Completion date Cost/Budget Yield Status Defensive Somerset Mall New Checkers Fresh-X November 2023 R96 100 000 Trading capex Canal Walk Freedom Adventure Park Updated to R16 000 000 17.1% Complete December 2023 (March 2024) Woodlands Boulevard 3 drive-thru’s Augu
Slide 50: EE properties
EE properties 50 Portfolio summary Skopje City Mall The Mall City Center one East City Center one West Skopje, North Macedonia Sofia, Bulgaria Zagreb, Croatia Zagreb, Croatia % Ownership 100% 100% 100% 100% GLA 36 803 61 576 47 260 42 282 Vacancy levels 0.0% 0.8% 0.0% 0.0% Total foot count (6 months
Slide 51: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA 51 Eastern Europe at 31 December 2023 % of total GLA June 2023 December 2023 10% 8% 7.2% 7.2% 7.1% 7.1% 6% 5.7% 5.7% 4.0% 3.7% 3.7% 4% 3.5% 2.9% 2.9% 2.4% 2.4% 2.3% 2.3% 2.0% 2.0% 1.7% 1.7% 2% 0% Interspar Inditex Peek & LPP H&M Cineplexx C&A Müller Arena New Yorker Clopp
Slide 52: EE operations – 6 months average ending 31 December 2023
EE operations – 6 months average ending 31 December 2023 52 Historic statistics updated for most recent available information Turnover (€’m) Effort ratio (%) 120 18% 100 14.6% 15.7% 16% 14% 80 9.6% 12% 0.1% 60 6.8% 10% 0.3% 40 0.4% 0.5% 8% 20 96 96 63 54 6% 7.9% 8.0% 11.1% 9.3% 0 4% City Center City
Slide 53: Trading performance
Trading performance 53 Eastern Europe portfolio % of reported Trading density Total Primary category growth turnover GLA Apparel: Peek & Cloppenburg, H&M, Zara, C&A 8.8% 35.8% 45.7% Shoes: Mat Star, Humanic, Deichmann, CCC 10.8% 11.0% 12.8% Sporting/Outdoor Goods & Wear: Sport Vision , Hervis, Sport
Slide 54: EE leasing activity
EE leasing activity 54 New lettings and renewals Weighted Rental reversion Rentable average as % of average Average Average lease Gross lettable % of total Leasing area (m2) reversion monthly rental indexation duration (years) area (m2) portfolio Retail 25 240 1.1% 0.7% 2.9% 5.0 100.0% New leases co
Slide 55: EE operations
EE operations 55 Receivables and collections (€’m) Cost to income (%) 45% 39.7% 40% 37.7% 9% 7% 35% Management and 30% 2% 3% other costs 5% 3% Maintenance 25% 2% 2% Depreciation and 7% 4% amortisation 20% 19% Salaries and staff-related 15% expenses 15% Contractual services 10% Utilities (100%) 5% 0%
Slide 56: Europe valuations bridge (€m)
Europe valuations bridge (€m) 56 Europe valuations* bridge (€’m) 2.0% 11.7 600.0 4.8% 3.3% 2.2% 6.2% 590.0 9.7 586.4 4.4 580.0 3.4 574.7 (5.8) 570.0 560.0 550.0 June 2023 Skopje City Mall The Mall, Sofia City Center one City Center one December 2023 East, Zagreb West, Zagreb * Valuations per indepen
Slide 57: EE current projects
EE current projects 57 Mall Project Completion date Cost/Budget Yield Status Complete Skopje City Mall H&M projects March 2024 €2 700 000 Defensive spend (March 2024) The Mall, Sofia LED lighting January 2024 €250 000 17% Complete City Center one West Food court expansion June 2024 €454 000 3.1% Und
Slide 58: SSA properties
SSA properties 58 Portfolio summary Ikeja City Mall Accra Mall West Hills Mall Kumasi City Mall % Ownership 75.0% 47.0%* 58.8%* 98.0%* GLA 22 223 21 311 28 272 18 534 Vacancy levels 0% 1.3% 31.9% 32.7% Total foot count (6 months) 3.0m 2.9m 2.2m 3.9m * AttAfrica's share in these assets. Hyprop has a
Slide 59: SSA operations – 6 months average ending 31 December 2023
SSA operations – 6 months average ending 31 December 2023 59 Historic statistics updated for most recent available information Turnover ($m) Turnover (Cedi ‘m) 30 400 25 2.1% 300 20 9.3% 15 200 10 8.5% 15.3% 100 2.9% 10.1% 5 21 8 7 246 91 84 0 0 Accra Mall West Hills Mall Kumasi City Mall Accra Mall
Slide 60: Cash generated from operations to distributable income
Cash generated from operations to distributable income 60 Unaudited 31 December 2023 Unaudited 31 December 2022 Audited 30 June 2023 SA EE SSA Group SA EE SSA Group SA EE SSA Group R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Cash generated from operations 725 864 461 791
Slide 61: Interest rate profile
Interest rate profile 61 ZAR (%) EUR (%) 11 7 10 6 8.9% 8.9% 5 5.0% 9 8.4% 3.9% 4 8 8.5% 3.2% 8.4% 3 4.0% 3.6% 7 2 7.2% 1 2.0% 6 0 5 -1 4 -2 January December March December 2022 2023 2022 2023 ZAR all-in hedged rate 3m Jibar ZAR floating rate + margin EUR all-in hedged rate 3m Euribor EUR floating r
Slide 62: Treasury metrics
Treasury metrics 62 31 December 2023 30 June 2023 SA REIT Hyprop SA REIT Hyprop LTV calculations Hyprop total assets 39 925 074 39 925 074 39 870 697 39 870 697 Less: Goodwill and intangible assets (71) (71) (59) (1 175) Cash and cash equivalents (1 559 654) (1 559 654) (1 201 103) (1 201 103) Deriv
Slide 63: Debt maturity profile – as at December 2023
Debt maturity profile – as at December 2023 63 South African borrowings (ZAR’m) ZAR debt RCF Dec 2023 Jun 2023 Dec 2022 3000 Property value (Rbn) 23.4 23.0 22.7 850 LTV 26.4% 25.5% 27.4% 2000 760 500 Weighted average cost of debt 1 117 250 8.9% 8.9% 8.4% 1000 549 200 (incl. hedges) 500 348 502 500 4
Slide 64: Investment property and capital expenditure
Investment property and capital expenditure 64 31 December 2023 31 December 2022 30 June 2023 South Africa R25.7bn (59%) R25.0bn (61%) R25.3bn (59%) Hyprop effective interest R23.4bn (62%) R22.7bn (64%) R23.0bn (62%) Exit cap rate range 6.8% - 9.3% 6.8% - 10.0% 6.8% - 9.3% Hyprop’s effective interes
Slide 65: Equity bridge
Equity bridge 65 Hyprop Group (R’m) 580 237 22 700 (302) (1) (117) (207) (22) 498 9 22 301 (1 073) NAV Net Property Derivative Impairments FCTR Non-controlling Tax Distribution DRIP Other NAV June 2023 operating revaluation Fair value interest December 2023 income adjustments
Slide 66: Disclaimer
Disclaimer 66 Forward looking statements This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements beliefs or opinions including statements with respect to the company’s business financial condition and results of operations.
Slide 67: Investor Relations
cc Investor Relations Boitumelo Nkambule - [email protected]