Hyprop Investments Limited · JSE:HYP

Hyprop Investments — FY2016 Earnings Presentation

28 slides from Hyprop Investments's earnings presentation, 2016

  1. Slide 1: Summarised Consolidated Results: Strategic & Operational Overview

    SUMMARISED CONSOLIDATED RESULTS For the year ended 30 June 2016 STRATEGIC & OPERATIONAL OVERVIEW Canal Walk (Cape Town, Western Cape) 1

  2. Slide 2: Strategy & Overview; Corporate Highlights

    STRATEGY & OVERVIEW South African REIT Focused on emerging markets (South Africa, sub-Saharan Africa and South-Eastern Europe) Ownership of shopping centres, distinguished by:  Quality, dominance and location  Middle-to-higher income consumers  Mix of flagship national and international retailers

  3. Slide 3: Financial Highlights; Distribution Growth

    FINANCIAL HIGHLIGHTS June 2016 June 2015 % Change Distribution (cents) 619,9 543,0 14,2 Market capitalisation (Rbn) 31,6 29,4 7,3 Total assets (Rbn) 33,8 28,9 17,3 Loan to value (%) 30,8 22,9 34,5 NAV (R per share) 94,50 89,04 6,1 Total expense to income ratio (%) 36,0 36,0 - 5 DISTRIBUTION GROWTH C

  4. Slide 4: Share Price Performance; Investment Profile

    SHARE PRICE PERFORMANCE JULY 2015 TO 23 Aug 2016 SA Listed Property Hyprop Inv Ltd Post year-end 120 100 80 June June 2016 2015 60 % shares traded 71,8% 73,0% % offshore shareholders 26,3% 25,0% 40 20 Q1: 52,3 million* Q2: 46,0 million* Q3: 46,0 million* Q4: 30,4 million* 0 Jul Aug Sep Oct Nov Dec J

  5. Slide 5: South African Portfolio Operating Performance

    OPERATING PERFORMANCE Rosebank Mall (Johannesburg, Gauteng) SOUTH AFRICAN PORTFOLIO OPERATING PERFORMANCE Maintaining good rental growth and escalations Low vacancy Arrears improved to 0,5% (2015:0,6%) Renewals successfully completed Trading density growth slowing Edcon Canal Walk (Cape Town, Wester

  6. Slide 6: Leasing Terms; Leasing Activity

    LEASING TERMS 12% Rental growth Contractual escalation 10% 8,3% 8,2% 8,2% 8,1% 8% 7,4% 7,6% 7,3% 6,3% 6% 4% 2% 0% 2013 2014 2015 2016 11 LEASING ACTIVITY % of total Rentable area Rental growth Contractual Leasing portfolio (m²) (%) escalation (%) No. of leases Retail 19,3 137 568 7,4 8,0 504 Offices

  7. Slide 7: Lease Expiry Profile; Vacancies

    LEASE EXPIRY PROFILE 2016 / 2017 Total Expiring % Rentable rentable area area area of Retail (m²) (m²) centre The Glen 79 704 19,651 25 Canal Walk 148 449 18 179 12 Cape Gate Mall 63 783 13 638 21 Atterbury Value Centre 47 785 12 629 26 Somerset Mall 69 048 9 981 14 Willowbridge 40 341 9 094 23 Hyde

  8. Slide 8: Trading Overview; Developments

    TRADING OVERVIEW Rent ratio Trading density growth (rental as % of turnover) 10% 10% 8% 7,4% 8% 7,3% 7,0% 6,9% 6,9% 7,1% 6,8% 6% 6% 5,2% 4% 4% 2% 2% 0% 0% Jun 2013 Jun 2014 Jun 2015 Jun 2016 Jun 2013 Jun 2014 Jun 2015 Jun 2016 15 DEVELOPMENTS Extensions and developments completed:  Somerset Mall –

  9. Slide 9: Investment in Sub-Saharan Africa: Market Conditions

    INVESTMENT IN SUB-SAHARAN AFRICA (excluding SA) Ikeja City Mall (Lagos, Nigeria) West Hills Mall, Accra, Ghana MARKET CONDITIONS Negatives  Weakening of local currencies  USD liquidity and availability  Lower economic growth in 2016 Positives  Defensive portfolio - able to withstand headwinds 

  10. Slide 10: Currencies; Income Producing Properties

    CURRENCIES EXCHANGE RATE VOLATILITY Indexed Ghana Nigeria Zambia RSA 2,5 2,0 1,5 1,0 0,5 0,0 Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 2013 2014 2015 2016 19 INCOME PRODUCING PROPERTIES INVESTMENT IN SUB-SAHARAN AFRICA (EXCL. SA) Hyprop Rentable Vacancy % Foot count Centre City & country % sha

  11. Slide 11: Developments

    DEVELOPMENTS Achimota Retail Centre Accra Mall Kumasi City Mall (Accra, Ghana) (Accra, Ghana) (Kumasi, Ghana)  Redevelopment of food court and 1 000m² extension  Under construction  Opened in October 2015  Cost USD 9,5m - Opening April 2017  Completed in April 2016 21 INVESTMENT IN SOUTH- EASTE

  12. Slide 12: Strategy & Structure; Focus on Emerging Markets

    STRATEGY & STRUCTURE Strategy  To acquire or develop high-quality shopping malls  Size of EUR 1bn within 5-years (currently EUR 203m)  Will partner with strong local developers/owners – signed letters of intent  Attractive income yields  Low cost of bank funding Company structure  Hystead esta

  13. Slide 13: Income Producing Properties

    INCOME PRODUCING PROPERTIES Hyprop Rentable Vacancy % Foot count Centre City & country % share area m² Rentable area / m² Delta City Belgrade, Serbia 60 29 876 0 28 Delta City Podgorica, Montenegro 60 23 729 0 19 Potential expansions: Belgrade (Serbia) Podgorica (Montenegro)  Internal changes to im

  14. Slide 14: Net Income; Drivers of Growth

    NET INCOME DRIVERS OF GROWTH Rbn 30 Jun 2015 30 Jun 2016 2,5 10,8% 12,6% 8,7% 1,932 1,964 2,0 7,3% 1,848 1,701 1,743 1,743 14,2% 1,665 1,551 1,506 1,5 1,320 1,0 0,5 0,0 Investment property Add Rosebank Mall Add sub-Saharan Africa Add South-Eastern Net interest and other income (excl. SA) Europe 27 N

  15. Slide 15: Distributable Earnings Statement; Reconciliation to Dividend

    DISTRIBUTABLE EARNINGS STATEMENT 30 June 2016 30 June 2015 % (R’000) (R’000) Change South African property portfolio 1 848 151 1 752 187 5,5 Investments in sub-Saharan Africa 83 654 42 368 97,4 (excl. SA) Investments in South-Eastern Europe 31 944 - Word4Word Marketing 1 000 4 243 Fund management ex

  16. Slide 16: Balance Sheet Extracts; Property Valuations

    BALANCE SHEET EXTRACTS 30 Jun 2016 30 Jun 2015 % Change (Rm) (Rm) Hyprop’s share Investment property (South Africa) 26 502 25 003 6,0% Investments in sub-Saharan Africa 5 061 2 339 116,4% (excluding South Africa) Held for sale 1 244 1 235 Other assets 427 279 Minority share 615 Total assets 33 849 2

  17. Slide 17: Debt Management; Sources of Funding

    DEBT MANAGEMENT 30 June 2016 30 June 2015 (Rm) (Rm) Bank debt 9 344 4 520  South Africa 2 992 2 327  USD (Rand equivalent) 4 842 2 193  EUR (Rand equivalent) 1 510 Debt capital market funding 1 640 2 172  Corporate bonds 1 200 1 800  Commercial paper 440 372 Cash and cash equivalents (239) (138

  18. Slide 18: Debt at Fixed Rates; Debt Maturities

    DEBT AT FIXED RATES 30 Jun 2016 30 Jun 2015 (%) (%) South African debt 89,6 96,7 USD debt 72,4 89,9 35 DEBT MATURITIES* 30 Jun 2016 30 Jun 2015 (years) (years) Fixed rates and swaps  South African debt 4,9 5,6  USD debt 3,7 4,1 Facilities  South African debt 2,4 2,8  USD debt 3,6 4,2 * Excludes

  19. Slide 19: Cost of Funding

    COST OF FUNDING 30 Jun 2016 30 Jun 2015 (%) (%) South African debt 8,9 8,4 USD debt 4,6 4,4 EUR debt 1,7 - 37 PROSPECTS Delta City (Belgrade, Serbia) 19

  20. Slide 20: Outlook & Focus: South Africa and Sub-Saharan Africa

    OUTLOOK & FOCUS SOUTH AFRICA OUTLOOK  Low economic growth over medium term  Interest rate – further possible increases  Credit rating – possible downgrade FOCUS  Improve tenant mix  Maintain strong operational performance  Refurbishments and extensions  Disposal of non-core assets Clearwater

  21. Slide 21: Outlook & Focus: South-Eastern Europe; Prospects

    OUTLOOK & FOCUS SOUTH-EASTERN EUROPE OUTLOOK  Good investment opportunities  Strong economic growth  International brands entering the market – supports income growth FOCUS  Unlock expansion opportunities  More acquisitions  Potential development opportunities Delta City (Belgrade, Serbia) 41

  22. Slide 22: Appendices: Company Structure - South African Portfolio

    APPENDICES Canal Walk (Cape Town, Western Cape) COMPANY STRUCTURE SOUTH AFRICAN PORTFOLIO Clearwater Mall Somerset Mall Hyde Park Corner Rosebank Mall Woodlands Boulevard CapeGate 100% owned Offices Atterbury Value Mart Cradock Heights SOUTH AFRICA Canal Walk (80%) The Glen (75,15%) Co-owned Offices

  23. Slide 23: Company Structure: Sub-Saharan Africa and South-Eastern Europe

    COMPANY STRUCTURE SUB–SAHARA AFRICAN PORTFOLIO Hyprop Investments Mauritius 37,5% 50% 75% AttAfrica 50% Manda Hill Ikeja City Mall SUB- (Mauritius) (Zambia) (Nigeria) SAHARAN 100% owned AFRICA 47% 45% 75% 75% West Hills Achimota Retail Kumasi City Accra Mall Mall Centre Mall (Ghana) (Ghana) (Ghana)

  24. Slide 24: Track Record; Debt Maturity Profile

    TRACK RECORD Rbn LTV % 36 60% Investment property 33,4 32 29,4 31,6 Market cap 28,6 28 26,4 45% 24 LTV % 20,2 19,3 20 18,7 17,7 19,0 17,4 26,2% 30% 16 30,8% 12,9 26,6% 12 23,1% 22,9% 23,1% 8 15% 4 0 0% Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016 47 DEBT MATURITY PROFILE FIXED RATES AND SWA

  25. Slide 25: Debt Maturity Profile; Gross Rent to Turnover

    DEBT MATURITY PROFILE BANK FACILITIES AND DCM Rm Average maturity: 1 800  South African debt 2,4 years  USD debt 3,6 years 1 600 1 400 Bank facilities 1 200 Bonds / Commercial paper 1 000 USD Funding 800 600 400 200 - June 17 June 18 June 19 June 20 June 21 June 22 June 23 June 24 49 % GROSS RENT

  26. Slide 26: Trading Density; Revenue Spread

    TRADING DENSITY Per month (R/m²) 5 000 4 500 4% Average portfolio growth: +5,2% (2015: +7,4%) 4 000 4 168 7% 3 500 9% 3 356 3 239 2% 5% 3 000 18% 9% 3% 2 891 2 807 5% 9% 2 500 2 666 2 568 2 541 7% 2 423 2 400 2 000 2 059 1 500 1 000 500 0 Hyde Park Canal Somerset Clearwater Willowbridge Rosebank Som

  27. Slide 27: Top SA Properties

    TOP 8 SA PROPERTIES Canal Walk Clearwater Woodlands (80% undivided share) Mall Rosebank Mall Boulevard Region Cape Town Region Johannesburg Region Pretoria Region Pretoria Total rentable Total rentable Total rentable Total rentable 158 632 86 867 62 413 71 642 area (m²) area (m²) area (m²) area (m²)

  28. Slide 28: Disclaimer

    DISCLAIMER FORWARD-LOOKING STATEMENTS  This document contains forward-looking statements that, unless otherwise indicated, reflect the group’s expectations as at 30 June 2016  Actual results may differ materially from the group’s expectations if known and unknown risks or uncertainties affect its

Hyprop Investments — FY2016 Earnings Presentation on 6ix