Redefine Properties Limited · JSE:RDF
Redefine Properties — H1 2010 Earnings Presentation
41 slides from Redefine Properties's earnings presentation, April 2010
Slide 1: Interim Results
INTERIM RESULTS For the 6 months ended 28 February 2010
Slide 2: Snapshot
SNAPSHOT Name: Redefine Properties Limited Share code: RDF JSE sector: Financial Services - Real Estate At 28 Feb 2010 Current Market capitalisation: R20,1-billion R21,3-billion Units in issue: 2 654 538 299 2 680 172 102 Closing price per linked unit: R7.58 R7.92 Net asset value per linked unit: R7
Slide 3: Review of Activities
D> REVIEW OF ACTIVITIES
Slide 4: Name Change
NAME CHANGE • Redefine Properties Limited – Approved at AGM – Effective 1 March 2010 – Better describes the business – Income growth remains the focus
Slide 5: Restructuring
RESTRUCTURING • All properties are being transferred from subsidiary companies to the listed entity, Redefine Properties Limited • Improve and simplify administration and accounting • Strengthen unified company culture and brand
Slide 6: Before Restructuring
BEFORE RESTRUCTURING Redefine Income Fund Redefine Hyprop ApexHi Ciref Spearhead Madison Property Wichford Properties Investments Properties Property Fund Managers Holdings Holdings Ambit Properties Madison Hyprop Portion 68 Portion 65 Terminus Property Fund Management Rivonia Ext 3 Rivonia Ext 3 Kl
Slide 7: After Restructuring
AFTER RESTRUCTURING Redefine Properties Hyprop Ciref Corovest Fund Investments Managers
Slide 8: Security for Debt
SECURITY FOR DEBT • Agreements concluded with banks in terms of which excess collateral security has been released • Ensures appropriate loan to value ratios • Enables released assets to be utilised as security for new debt
Slide 9: Issue of Linked Units
ISSUE OF LINKED UNITS • Redefine linked units are an attractive “currency” • Linked units issued at yields lower than the acquisition yields of the properties • Increase in number of linked units in issue: – Increases market capitalisation – Redefine closer to entering Alsi 40 • Subsequent to 28 Feb
Slide 10: Property Transactions
PROPERTY TRANSACTIONS Average Number of GLA Price yield properties m² R000 % Acquired and transferred 2 40 671 205 001 10.8 Disposals 5 35 285 81 325 5.2
Slide 11: Acquisitions
ACQUISITIONS Purchase GLA price Initial yield Property Sector m² R000 % 45 Pritchard Street Retail 16 867 105 000 10.9 Linpac Industrial 23 804 100 001 10.6 40 671 205 001
Slide 12: Disposals
DISPOSALS Selling Valuation at GLA price 31 Aug 2009 Yield Property Sector m² R000 R000 % Mutual Building Office 12 640 33 000 33 000 9.1 Meditech-Hemco Industrial 8 843 19 425 18 157 n/a Premquip Industrial 10 111 17 300 20 800 n/a Cassey’s Auto Benoni Retail 3 091 8 500 8 570 11.0 32 Intersite Roa
Slide 13: Listed and Unlisted Securities
LISTED AND UNLISTED SECURITIES • Ciref Plc – Increased holding from 29% to 71% • Purchase of 102 million shares at an aggregate cost of R636-million • Exchanged 11% holding in Wichford valued at R249-million for 45 million Ciref shares • Corovest Fund Managers – Increased holding from 34% to 76% – C
Slide 14: Details of Underlying Assets
DETAILS OF UNDERLYING ASSETS
Slide 15: Property Portfolio at a Glance
PROPERTY PORTFOLIO AT A GLANCE South African Properties Number: 400 Gross lettable area: 3,6-million m² Valuation/m2: R5 250 Total gross monthly rental: R193-million Value: R18,9-billion
Slide 16: Property Portfolio
PROPERTY PORTFOLIO 29% Single tenanted properties Multi tenanted properties 71% Gross lettable area % Number of Office Retail Industrial Total properties m² m² m² m² % Single tenanted 115 29 328 463 146 627 498 592 973 682 27 Multi tenanted 285 71 1 083 420 1 110 952 476 749 2 671 121 73 Total 400 1
Slide 17: Sectoral Spread
SECTORAL SPREAD 13% 39% 44% 27% Office Retail Industrial 43% 34% Gross lettable area Gross monthly rental Average rate* m² % R000 % R/m² Office 1 411 883 39 84 949 44 68.34 Retail 1 257 579 34 82 920 43 70.12 Industrial 975 341 27 25 325 13 28.41 Total 3 644 803 100 193 194 100 58.24 * Calculated ba
Slide 18: Geographical Spread
GEOGRAPHICAL SPREAD 3%1%1% 1%1% 3% 55% 3%3% 3% 3% 55% Gauteng 4% 4% Western Cape KwaZulu-Natal 14% 13% Mpumalanga North West Eastern Cape Limpopo Free State 16% 17% Northern Cape Lettable area Gross monthly rental
Slide 19: Vacancies per Sector
VACANCIES PER SECTOR Lettable area Vacancy m² m² % Office 1 411 883 168 843 12.0 Retail 1 257 579 74 982 6.0 Industrial 975 341 83 819 8.6 3 644 803 327 644 9.0
Slide 20: Lease Expiry Profile
LEASE EXPIRY PROFILE 1 000 000 900 000 800 000 700 000 Total 600 000 500 000 Office 400 000 Retail 300 000 200 000 Industrial 100 000 0 Mar - Aug 2010 2011 2012 2013 Beyond Office Retail Industrial Total Year to 31 August m² % m² % m² % m² % Mar 2010 - 371 038 30 155 462 13 104 466 12 630 966 19 201
Slide 21: Arrears
ARREARS At 28 Feb 2010 At 31 Aug 2009 Arrear rental R24,3-million R36,2-million % of collectables 8,7 13,7
Slide 22: Letting Activity
LETTING ACTIVITY Lettable area Vacant m² area m² Portfolio at 1 Sep 2009 3 624 256 307 545 9% Adjustments to lettable area 15 161 8 255 Acquisitions 40 671 0 Disposals (35 285) (16 509) Adjusted portfolio 3 644 803 299 291 Increase in vacancy 28 354 Leases expired 634 091 Renewals & new lettings (60
Slide 23: Listed Securities Portfolio
LISTED SECURITIES PORTFOLIO Value at Current 28 Feb Property Fund Number % % of value 2010 fund type of units held portfolio R 000 R000 Hyprop PLS 55 323 970 33.3 68.33 2 890 677 2 765 645 Sycom PUT 6 530 673 3.2 3.21 135 838 133 226 Oryx PLS 14 554 269 26.4 3.26 138 120 138 411 Ciref Plc* Co 168 50
Slide 24: Borrowings
BORROWINGS 28 Feb 2010 31 Aug 2009 R000 R000 Fixed 3 665 4 649 Floating 2 227 653 Borrowings in JVs 232 159 Total 6 124* 5 461 Borrowings as % of value of 27% 26% properties and listed securities * Excluding Ciref and Corovest borrowings, which are ring-fenced • Weighted average cost of borrowings 9
Slide 25: Interim Results
“” = 5 a uu oO = oO 1 - =
Slide 26: Results Include…
RESULTS INCLUDE… • First set of results for a 6 month period for the merged Redefine, ApexHi and Madison • Ciref consolidated for 1 month • Corovest Fund Managers consolidated for 5 months
Slide 27: Financial Highlights
FINANCIAL HIGHLIGHTS • Total distribution of 33.50 cents per linked unit for the 6 months ended 28 February 2010 Cents per Period linked unit 3 months ended 30 Nov 2009 16.75 3 months ended 28 Feb 2010 16.75 6 months ended 28 Feb 2010 33.50 • Total tangible assets R27,3-billion • Market capitalisati
Slide 28: Abridged Income Statement
ABRIDGED INCOME STATEMENT 2010 Rm Gross revenue 1 442 Property portfolio: 82% 1 185 Listed securities: 9% 122 Fee income: 8% 117 Trading: 1% 18 Property expenses (277) Administration expenses (55) Non-controlling interest and profit from associates 2 Operating profit 1 112 Net finance charges (235)
Slide 29: Abridged Balance Sheet
ABRIDGED BALANCE SHEET Ciref/ Redefine Corovest Group Rm Rm Rm Direct and listed assets 23 026 2 736 24 743 Property portfolio*: 18 970 2 226 21 196 Listed securities: 4 056# 510 3 547^ Total assets 32 094 Capital and reserves 14 763 Interest-bearing liabilities 6 124 2 701 8 825 Gearing as % of val
Slide 30: Unit Performance
D> UNIT PERFORMANCE
Slide 31: Unitholder Profile
UNITHOLDER PROFILE • Increased interest from a wider group of investors such as tracker funds and international investors • International investment increased from 0,5% pre merger to 7,5% currently Holders of 5% or more of the total number of linked units in issue Number of linked % of issued units
Slide 32: Redefine Closing Prices
REDEFINE CLOSING PRICES 810 High: 802c 800 790 780 770 At 28 Feb: 758c 760 750 740 730 720 710 700 690 Low: 692c 680 01 Sep 09 01 Oct 09 31 Oct 09 30 Nov 09 30 Dec 09 29 Jan 10 28 Feb 10 30 Mar 10
Slide 33: Indices and Ratings
INDICES AND RATINGS • Global Property Research (GPR) 250 Index – Largest South African listed property company on the index • Mid Cap segment of the MSCI Global Standard Index – Upgraded from Morgan Stanley’s MSCI Global Small Cap Index • In terms of the rules, automatic entry into the ALSI40 Index
Slide 34: Strategy
D> STRATEGY
Slide 35: Hyprop
HYPROP • Agreement signed with Coronation Asset Management to purchase 19,7 million units in Hyprop at R50 per unit • Increase stake from 33% to 45.2% • Subject to Redefine unitholder and Competition Authorities approval • On implementation, the deal triggers a mandatory offer to Hyprop unitholders
Slide 36: Effects of the Hyprop Deal
EFFECTS OF THE HYPROP DEAL • Unique opportunity to secure extremely attractive assets – Redefine is familiar with the portfolio – Improve the quality of the Redefine portfolio • 100% of the units in Hyprop not owned by Redefine represents 20% of Redefine’s total assets • Minor dilution in Redefine’s
Slide 37: Ciref
CIREF • Proposed inward listing not approved by South African Reserve Bank (SARB) as Treasury is reviewing policy on inward listings
Slide 38: Property Management
PROPERTY MANAGEMENT • Decision to internalise property management – Effective from the date of termination of the Broll agreement (November 2010) – Savings of about R30-million expected in 2011 • Management – Pieter Strydom appointed as general manager – Aaron Suckerman appointed as financial manage
Slide 39: Other Focus Areas
OTHER FOCUS AREAS • Refine the property portfolio – Evaluate every property – Disposals where appropriate – Consider earnings enhancing acquisitions • Joint ventures – Assess current joint ventures and plan exit strategy • Mergence / Dipula – Assess and improve BEE status • Distribution policy – Obt
Slide 40: Prospects
PROSPECTS • The forecast distributions per linked unit for the six months ending 31 August 2010 have been based on: – distributable earnings for the six months ended 28 February 2010 – allowance for contractual growth in income, reduced to take account of the failure of Queensgate as a tenant – lowe
Slide 41: Questions
wy Lu - ~ WM jae Oo a jae 4 QUESTIONS