Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — FY2018 Earnings Presentation
96 slides from Vukile Property Fund's earnings presentation, March 2018
Slide 1: Annual Results Presentation
Annual Results Presentation for the year ended 31 March 2018 www.vukile.co.za
Slide 2: Agenda
AGENDA Introduction 1 Laurence Rapp 2 Southern African Retail Portfolio Overview Ina Lopion 3 Spanish Portfolio Overview Alfonso Brunet 4 Financial Performance & Treasury Management Mike Potts 5 Management & Board Changes Laurence Rapp 6 Strategic Plans & Prospects Laurence Rapp 7 Q&A 8 Appendices 2
Slide 3: Introduction
Introduction Laurence Rapp www.vukile.co.za 3
Slide 4: Profile: Who we are
Profile Who we are INTRODUCTION High quality, low risk, Retail REIT in South Africa with growing international exposure in Spain Strong operational focus with a core competence in active asset management OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Aim for simplicity and transparency Clarity o
Slide 5: Highlights: FY2018 in review
Highlights FY2018 in review INTRODUCTION DPS growth of 7.7% to 168.82cps in line with guidance Strong operational performance in Southern Africa OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN − Operating metrics remain solid in poor trading environment − Like-for-like net income growth of 6.5% with
Slide 6: Group Overview – Total property related assets of R21.6bn
Group Overview – Total property related assets of R21.6bn Focused Retail REIT in South Africa with growing Spanish retail exposure INTRODUCTION United Kingdom 5% R1.2bn(iii) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 21% OVERVIEW PORTFOLIO SPANISH Spain R4.5bn(ii) MANAGEMENT & TREASURY PERFORMANCE F
Slide 7: Strategic direction
Strategic direction Focus on capital allocation and strategic consistency INTRODUCTION Southern Africa Balance International sheet management OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Continued focus on defensive retail Focus will be on Spain to drive home Disciplined and conservative financi
Slide 8: Southern African Retail Portfolio Overview
Southern African Retail Portfolio Overview Ina Lopion www.vukile.co.za 8
Slide 9: Key portfolio metrics
Key portfolio metrics Direct Southern African Retail Portfolio INTRODUCTION Value R13.2bn (91% of direct Southern African portfolio) 46% of income from top 10 tenants 46 Properties WALE of 3.7 years OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GLA 810 398m² Average base rentals R130.44/m²/
Slide 10: Creating a high quality low risk retail portfolio
Creating a high quality low risk retail portfolio Interrelationship of key retail metrics INTRODUCTION Regional Tenant Dominance Profile OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Demographics National Tenant Footfall Exposure Location Lease Expiry Profile Vacancy Profile OVERVIEW PORTFO
Slide 11: Retail tenant exposure
Retail tenant exposure Low risk with c.80% national tenants Tenant profile - by contractual rent Top 10 tenants by rent INTRODUCTION Other 2.7% Pep Stores OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Star 8.3% 2.5% Ackermans 21% Diversified across Shoprite 5.8% 990 tenants Edcon 5.7% 3.2% Jet OVERVIEW
Slide 12: Edcon exposure
Edcon exposure Support Edcon in their restructuring Continue to critically assess our exposure to Edcon and manage appropriately over time INTRODUCTION Exposure to Edcon based on GLA Action plan OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN We have been in discussions with Edcon to restructure 0.7%
Slide 13: Retail tenant expiry profile
Retail tenant expiry profile 37% of contractual rent expiring in 2022 and beyond (WALE 3.7 years) INTRODUCTION % of Contractual Rent Cumulative 100 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 75 63 OVERVIEW PORTFOLIO SPANISH 47 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 29 18 25 16 12 BOARD CHANGES
Slide 14: Retail tenant affordability
Retail tenant affordability Consistently strong metrics Retail Vacancy Profile by Rent Retail Average Base Rentals (excl. Recoveries) INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 130.44 4.0% 122.88 3.9% 114.61 3.6% 108.14 3.4% 3.3% 3.3% 102.56 86.86 OVERVIEW PORTFOLIO SPANISH MANAGEMENT &
Slide 15: Rent-to-sales ratio by Top 15 properties
East Rand Mall 10.0% Phoenix Plaza 7.7% Randburg Square 7.5% Gugulethu Square 7.1% Group Results for the year ending 31 March 2018 Thavhani Mall 7.0% Ahead of industry benchmarks Bloemfontein Plaza 6.5% Pine Crest 6.4% Moruleng Mall 5.7% Maluti Crescent 5.5% Rent-to-sales ratio by Top 15 properties
Slide 16: Retail portfolio trading statistics by Top properties
Retail portfolio trading statistics by Top 15 properties High trading density with solid growth ahead of market comparables INTRODUCTION Annualised trading density Trading density like-for-like growth 2.1% 2.4% (0.6%) 7.7% 0.6% 0.1% 9.5% 0.9% 9.5% 6.2% * 0.2% 8.9% 10.3% 2.0% 2.2% OVERVIEW RETAIL POR
Slide 17: Retail insights
Retail insights Segmental allocation adding to defensive nature of portfolio INTRODUCTION Segment Focus Tenants Focus Most of retail exposure (66%) remains in buoyant Small Regional and Majority of our category exposure remains in the inelastic grocery sector OVERVIEW RETAIL PORTFOLIO SOUTHERN A
Slide 18: Retail portfolio trading statistics by category
Retail portfolio trading statistics by category Strong trading densities in core categories INTRODUCTION Bottle Stores 13.4% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Trading Density like-for-like Growth Health & Beauty 7.7% Home Furnishings/ Art/ Sporting/ Outdoor Goods & Wear Food 5.0% OVERVIEW P
Slide 19: Creating a high quality low risk retail portfolio
Creating a high quality low risk retail portfolio Interrelationship of key retail metrics INTRODUCTION Regional Tenant Dominance Profile Dominant in primary 82% national tenants OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN catchment area 37% of leases expiring in In excess of 130 million 2022
Slide 20: Asset Management
Asset Management Ina Lopion www.vukile.co.za 20
Slide 21: Ratio of net cost to property revenue – Retail portfolio
Ratio of net cost to property revenue – Retail portfolio Improvement in cost ratios INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Average 20.3 Average 19.1 OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 25.6 21.7 21.5 20.7 20.5 20.2 19.4 18.9 18.2 18.2 18.1 18.1 16.
Slide 22: Extension and upgrade: Pinecrest Shopping Centre
Extension and upgrade Pinecrest Shopping Centre, Pinetown, KZN INTRODUCTION Upgrading the existing centre and expanding the total GLA from 40 087m² to 45 190m² A new mall, upgraded food court and an improved tenant OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN mix is being added to the centre New
Slide 23: Redevelopment in progress: Maluti Crescent
Redevelopment in progress Maluti Crescent, Phuthaditjhaba INTRODUCTION Redevelopment to cater to nationals with exceptional trading densities of greater than R40 000/m² per annum who wish to expand their footprints OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Centre will be the largest enclosed ma
Slide 24: Recent acquisitions – Thavhani Mall and Springs Mall
Recent acquisitions – Thavhani Mall and Springs Mall Satisfied with initial trading and looking forward to stronger growth Thohoyandou Thavhani Mall INTRODUCTION Springs Mall Regional Shopping Centre of c.53 500m² opened August 2017 Small Regional Shopping Centre of c.49 000m² opened March 2017 Th
Slide 25: Energy management
Energy management Achievements FY2018 INTRODUCTION 3.59mn kWh sustainable electricity savings R5.6mn saved through billing & metering OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN optimisation Total installed PV capacity of 1.759 MW 114 smart water meters installed OVERVIEW PORTFOLIO SPANISH
Slide 26: Alternative Income Management
Alternative Income Management Starting to gather momentum INTRODUCTION 41 new contracts concluded to deliver in-mall and out-mall advertising income Court space income to increase with new agreement with Compass Communications OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (promotions division of Sm
Slide 27: Spanish Portfolio Overview
Spanish Portfolio Overview Alfonso Brunet www.vukile.co.za 27
Slide 28: Update on Spanish economy and political environment
Update on Spanish economy and political environment Spanish economy continues to outperform the Eurozone INTRODUCTION Indicator 2017 Forecast 2018 Forecast 2019 Spain GDP growth 3.1% 2.7% 2.4% EU GDP Growth 2.4% 2.3% 2.0% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Home Consumption 2.4% 2.3% 2.0% CPI
Slide 29: Spanish retail sector update
Spanish retail sector update Strong fundamentals in line with recovering economy INTRODUCTION Retail sales annual growth +1.9% (Mar 18) Consumer confidence index 107.2 pts (Jan 18) − Current Situation + 4.6 points YoY OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN − Expected situation +3.5 points Yo
Slide 30: Castellana key milestones
Castellana key milestones Significant progress in past twelve months INTRODUCTION Castellana currently in a building phase – portfolio has grown to €308mn by 31 March 2018 Acquired 13 assets in 2017 for c.€260mn OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN - 11 retail parks acquired in July 2017 f
Slide 31: Key portfolio metrics
Key portfolio metrics A low-risk defensive portfolio as a platform for future growth INTRODUCTION 92% Retail by market value Average asset value of €23.7mn OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN External portfolio value of €308mn with 94% of income derived from national tenants organic g
Slide 32: Retail tenant exposure
Retail tenant exposure Low risk with c.94% national and international tenants Tenant profile - by contractual rent Top 10 tenants by rent INTRODUCTION Other OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 11% 6% 10% 7% OVERVIEW PORTFOLIO SPANISH 6% MANAGEMENT & TREASURY PERFORMANCE FINANCIAL Top 10 6% Te
Slide 33: Retail tenant exposure: well diversified tenant mix
Retail tenant exposure Well diversified tenant mix INTRODUCTION Category profile by GLA Category profile by Rent 3% 2% Electronics 2% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 4% 16% 1% 3% DIY 5% 19% 4% 0% 1% Sports goods 5% 7% Supermarkets OVERVIEW PORTFOLIO SPANISH Household equipment 7% 7% 15% F
Slide 34: Lease expiry profile
Lease expiry profile 86% of contractual rent expiring in 2028 and beyond (WALE 18.6 years to expiry and 5.0 years to break) INTRODUCTION Expiry profile (% Rent) % of Contractual Rent Cumulative 100% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 86% OVERVIEW PORTFOLIO SPANISH 15% 4% 4% 5% 5% 5% 7% 0% 2%
Slide 35: Active Asset Management
Active Asset Management Identifying value add opportunities INTRODUCTION The Castellana management team on the ground and adding value to the assets − Head of Asset Management – Julio Garcia joined in December 2017 − Starting to build further in-house capacity in finance and asset management OVERV
Slide 36: Redevelopment in progress: Kinepolis Leisure Centre
Redevelopment in progress Kinepolis Leisure Centre, Granada INTRODUCTION Improve the look and feel of the centre by upgrading the external facades and internal finishes Increase natural light by increasing shopfronts, opening up OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN of the facade and insert
Slide 37: Redevelopment in progress: Kinepolis Leisure Centre
FINANCIAL 37 SOUTHERN AFRICAN SPANISH PERFORMANCE STRATEGIC RETAIL PORTFOLIO PORTFOLIO & TREASURY MANAGEMENT & PLANS & INTRODUCTION OVERVIEW OVERVIEW MANAGEMENT BOARD CHANGES PROSPECTS Q&A APPENDICES After Redevelopment in progress Kinepolis Leisure Centre, Granada Group Results for the year ending
Slide 38: Acquisition post year end: Habaneras Shopping Centre
Acquisition post year end Habaneras Shopping Centre, Torrevieja INTRODUCTION Castellana has finalised the acquisition of Habaneras Shopping Centre, located in Torrevieja, Alicante, Spain The centre is a 24 158m² open-air shopping centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN comprising of 70
Slide 39: Financial Performance
Financial Performance Mike Potts www.vukile.co.za 39
Slide 40: Distribution history
Distribution history Continuing 14 year trend of unbroken growth in distributions Cents per share INTRODUCTION Interim Final Normalised total Non-recurring 7.7% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 168.82 156.75 146.3 136.8 OVERVIEW PORTFOLIO SPANISH 126.5 120.4 111.4 107.9 MANAGEMENT & TREASU
Slide 41: Simplified income statement
Simplified income statement R1.3bn distributable income for FY2018 INTRODUCTION Mar-18 Mar-17 Variance R'000 R'000 % Property Revenue 2 014 966 1 964 202 2.6 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Property Expenses (705 891) (717 970) 1.7 Net profit from property operations 1 309 075 1 246 232 5
Slide 42: Reconciliation to distributable income
Reconciliation to distributable income R1.3bn distributable income for FY2018 INTRODUCTION Mar-18 Mar-17 Variance R'000 R'000 % Attributable to Vukile Group 1 208 312 1 040 174 16.2 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Adjustments on consolidation 0 1 552 (100.0) Non-IFRS related adjustments O
Slide 43: Segmental income statement
Segmental income statement Spain increasing its contribution to 13% of property profits Operating segment analysis for the twelve months ended 31 March 2018 INTRODUCTION Total OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Southern Total United Total Total Retail Other Africa Kingdom Retail Other Spain
Slide 44: Group net cash flow
Group net cash flow – (R’mn) Deployment of R4.8bn in growing the property portfolio, mainly in Spain INTRODUCTION 3 095 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN OVERVIEW PORTFOLIO SPANISH 1 557 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 1 334 (4 766) BOARD CHANGES MANAGEMENT & 323 175 87 (1 180)
Slide 45: Group balance sheet
Group balance sheet – (R’mn) Assets and liabilities at 31 March 2018 INTRODUCTION 18 821 Mar-18 Mar-17 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 13 220 OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 5 485 BOARD CHANGES MANAGEMENT & 3 207 2 965 2 631 1 991 1 288 1 590 1 367 P
Slide 46: NAV Bridge
NAV Bridge – (Cents) NAV growth of 7.6% to 2010cps INTRODUCTION 713 (1) (8) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN (37) (79) (197) 72 (321) OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 2 010 1 868 BOARD CHANGES MANAGEMENT & PROSPECTS PLANS & STRATEGIC Q&A Opening NAV In
Slide 47: Treasury Management
Treasury Management Mike Potts www.vukile.co.za 47
Slide 48: Key debt and foreign exchange metrics
Key debt and foreign exchange metrics Well hedged and prudent balance sheet INTRODUCTION Reduced Group cost of funding to 5.74% (South Africa 9.24%) Strong balance sheet with a loan to value ratio of 28.2% (i), gearing ratio of 29.6% (ii) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN and “see-throu
Slide 49: Sources of funding
Sources of funding R7.1bn of Vukile Group debt from diversified sources of funding Spanish balance sheet (v) Southern African balance sheet INTRODUCTION R2.128bn OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 8% Banco Popular R1.749bn R1.613bn 4% RMB OVERVIEW PORTFOLIO SPANISH 52% 34% Caixabank 30% Unse
Slide 50: Cost of funding
Cost of funding Reduction in Group cost of finance due to funding mix Group Debt by Currency INTRODUCTION 9.16% 9.24% 9.37% 2.15% 2.28% 2.35% 3.76% 3.34% 3.49% 7.90% 5.74% 5.20% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN R7.071bn OVERVIEW PORTFOLIO SPANISH R4.026bn R3.740bn MANAGEMENT & TREASURY PER
Slide 51: Analysis of Group loan repayment and swap expiry profile
Analysis of Group loan repayment and swap expiry profile Well hedged with low risk expiry profile Group loan and swap expiry profile INTRODUCTION 27.3% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Internal Policy 22.7% No more than 19.5% 20.9% 25% of total 18.6% 18.0% interest bearing 17.7% OVERVIEW P
Slide 52: Management and Board Changes
Management and Board Changes Laurence Rapp www.vukile.co.za 52
Slide 53: Board changes
Board changes A fully independent board of high calibre, experienced non-executive directors INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Anton Botha Nigel Payne Renosi Mokate Babalwa Ngonyama OVERVIEW PORTFOLIO SPANISH Set to retire at AGM in August 2018 Chairman elect Appointed as
Slide 54: Management changes
Management changes Well prepared for upcoming executive management changes INTRODUCTION Mike Potts due to retire at the end of March 2019 − Succession planning been in place for some time and finance team strengthened OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN − Rob Hawton has been mentored by Mik
Slide 55: Proposed new structure
Proposed new structure Ensuring focus in our core businesses through strategy and structure INTRODUCTION Group Level OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN OVERVIEW PORTFOLIO SPANISH Southern Laurence Rapp Chief Executive Officer Spain Africa Mike Potts MANAGEMENT & TREASURY PERFORMANCE FINANCIA
Slide 56: Vukile Development and Transformation Academy (VDTA)
Vukile Development and Transformation Academy (VDTA) Raising the bar on transformation INTRODUCTION Demonstrate Vukile’s unwavering commitment and dedication towards a meaningful, impactful and measurable transformation of our communities and the property sector in South Africa OVERVIEW RETAIL POR
Slide 57: Strategic Direction
Strategic Direction Laurence Rapp www.vukile.co.za 57
Slide 58: Southern Africa: Continued focus on retail
Southern Africa Continued focus on retail INTRODUCTION Encouraged by improving political and economic environment leading to an uptick in consumer confidence but no tangible evidence yet on the ground OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Portfolio is defensively positioned with 91% of dire
Slide 59: Spanish strategy
Spanish strategy Moving to the next stage INTRODUCTION Spanish retail and economic fundamentals remain positive Castellana management team now on board and growing operational capacity OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Approach is to “replicate not integrate”, implant Vukile DNA into
Slide 60: Listing of Castellana
Listing of Castellana Capital raising strategy INTRODUCTION Castellana to list on the MAB by August 2018 Listing driven to comply with Spanish tax laws for REITs (SOCIMIs) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Introductory listing with no broad market capital raise to take place Shareho
Slide 61: Equity investments
Equity investments Focus on capital allocation and strategic consistency INTRODUCTION Fairvest Atlantic Leaf Properties Gemgrow OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Continues to deliver above Portfolio performing in line with Non-core asset and would look to expectations expectations but
Slide 62: Prospects FY2019
Prospects FY2019 INTRODUCTION Anticipate another challenging year in South Africa largely in line with operating conditions of last year Well positioned for future growth with tight, focussed strategy on retail assets in South Africa and Spain OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Continu
Slide 63: Acknowledgements
FINANCIAL 63 SOUTHERN AFRICAN SPANISH PERFORMANCE STRATEGIC RETAIL PORTFOLIO PORTFOLIO & TREASURY MANAGEMENT & PLANS & INTRODUCTION OVERVIEW OVERVIEW MANAGEMENT BOARD CHANGES PROSPECTS Q&A APPENDICES Brokers and developers Property managers Service providers Colleagues Investors Funders Tenants Boar
Slide 64: Q&A
PROPERTY — ILE FUND REAL ESTATE. REAL GROWTH. www.vukile.co.za 64
Slide 65: Appendix A: Southern African portfolio
Appendix A Southern African portfolio www.vukile.co.za 65
Slide 66: Our retail footprint
Our retail footprint Retail portfolio profile (Top 15 properties 63% of portfolio) INTRODUCTION 7 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 13 7% 1 OVERVIEW PORTFOLIO SPANISH 8% 9 12 10 38% 11 4% 5 1 East Rand Mall 9 Daveyton Shopping Centre MANAGEMENT & TREASURY PERFORMANCE FINANCIAL 5% 2 10 Morul
Slide 67: High quality retail assets: Top assets
High quality retail assets Top 15 assets INTRODUCTION East Rand Mall Pine Crest Phoenix Plaza Gugulethu Square Dobsonville Mall OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R1 389mn R914mn R914mn R544mn R513mn OVERVIEW PORTFOLIO SPANISH Region Gauteng KwaZulu-Natal KwaZulu-Natal Western Cape Gaute
Slide 68: High quality retail assets: Top assets (cont.)
High quality retail assets Top 15 assets (cont.) Oshakati Shopping Daveyton Shopping INTRODUCTION Nonesi Mall Maluti Crescent Moruleng Mall Centre Centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R472mn R465mn R412mn R409mn R401mn OVERVIEW PORTFOLIO SPANISH Region Eastern Cape Namibia Free Stat
Slide 69: High quality retail assets: Top assets (cont.)
High quality retail assets Top 15 assets (cont.) Atlantis City Shopping INTRODUCTION Meadowdale Mall Randburg Square Thavhani Mall Bloemfontein Plaza Centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV R399mn R397mn R396mn R341mn R331mn OVERVIEW PORTFOLIO SPANISH Region Gauteng Gauteng Limpopo Fre
Slide 70: Southern African total portfolio composition
Southern African total portfolio composition Top 15 assets make up c.57% of the total portfolio Sectoral Profile - by Value Sectoral Profile - by GLA INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Top 15 By Market Top 15 Properties Value By GLA Properties 57% 91% 4% Retail Industrial 86% 8%
Slide 71: Southern African tenant exposure
Southern African tenant exposure Low risk with 76% national tenants Top 10 Tenants by Contractual Rent Top 10 Tenants by occupied GLA INTRODUCTION Other Other 24% 23% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Diversified across Top 10 Diversified across Top 10 1 289 tenants Tenants 1 289 tenants Te
Slide 72: Southern African tenant expiry profile
Southern African tenant expiry profile 38% of contractual rent expiring in 2022 and beyond (WALE 3.7 years) % of Contractual Rent INTRODUCTION % of Contractual Rent Cumulative 100 73 62 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 47 27 29 18 15 11 OVERVIEW PORTFOLIO SPANISH Mar-19 Mar-20 Mar-21 Mar-2
Slide 73: Southern African vacancy profile
Southern African vacancy profile Vacancy improving to 3.7% of contractual rent INTRODUCTION 12.6 10.3 7.2 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 6.0 Vacancy 4.2 3.7 3.6 3.4 3.7% of Rent OVERVIEW PORTFOLIO SPANISH Retail Industrial Offices Total MANAGEMENT & TREASURY PERFORMANCE FINANCIAL Mar-17
Slide 74: Individual properties vacancy profile
Individual properties vacancy profile (% of GLA) Vacancy > 1 000m2 Vacant Area Mar-17 Vacant Area Mar-18 INTRODUCTION Randburg Square (9%) Retail Roodepoort Hillfox Power Centre (9%) Vereeniging Bedworth Centre (8%) OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Letlhabile Mall (12%) Mbombela Shoprite C
Slide 75: Southern African lease renewals
Southern African lease renewals Positive retail reversions INTRODUCTION 7.3 Lease OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN renewals percentage 5.2 5.1 escalation OVERVIEW PORTFOLIO SPANISH on expiry rentals MANAGEMENT & TREASURY PERFORMANCE FINANCIAL BOARD CHANGES MANAGEMENT & PROSPECTS PLANS & ST
Slide 76: Southern African contracted rental escalation profile
Southern African contracted rental escalation profile Rental escalations still ahead of inflation INTRODUCTION 8.7 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 8.0 7.9 Escalation 7.4 7.4 7.4 7.3 7.2 7.2 7.1 7.0 7.0 7.0 7.0 Percentage OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCI
Slide 77: Southern African weighted average base rentals
Southern African weighted average base rentals– R/m2 Excluding recoveries INTRODUCTION 6.2% 4.7% 6.1% (5.0%) 6.4% OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 135.46 130.44 128.64 122.88 122.77 115.42 OVERVIEW PORTFOLIO SPANISH 95.74 90.25 MANAGEMENT & TREASURY PERFORMANCE FINANCIAL BOARD CHANGES MANA
Slide 78: Weighted average base rentals: Retail portfolio
Weighted average base rentals R/m2 (excluding recoveries) Southern African Retail portfolio Boksburg East Rand Mall INTRODUCTION Durban Phoenix Plaza Durban Workshop Windhoek 269 Independence Avenue Mbombela Truworths Centre Pinetown Pine Crest Springs Mall OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN
Slide 79: Weighted average base rentals: Other portfolio
Weighted average base rentals R/m2 (excluding recoveries) Southern African Other portfolio INTRODUCTION Jhb Houghton 1 West Street Jhb Houghton Estate Oxford Terrace OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Cape Town Bellville Barons Sandton Bryanston Ascot Offices Sandton Sunninghill Sunhill Park
Slide 80: Growth in net profit from Southern African property operations
Growth in net profit from Southern African property operations Like-for-like growth of 6.5% INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 7.5% 7.0% 6.8% 6.8% 6.5% 5.8% OVERVIEW PORTFOLIO SPANISH MANAGEMENT & TREASURY PERFORMANCE FINANCIAL BOARD CHANGES MANAGEMENT & PROSPECTS PLANS & STRATE
Slide 81: Southern African portfolio - ratio of cost to property revenue
Southern African portfolio - ratio of cost to property revenue Containing cost ratios Net cost to property revenue INTRODUCTION Average 18.9 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Average 17.9 22.9 20.6 19.9 19.2 19.0 18.7 18.2 18.0 17.2 17.1 17.0 16.7 16.1 16.0 OVERVIEW PORTFOLIO SPANISH 2012 2
Slide 82: Disposals
Disposals Transferred during FY2018 INTRODUCTION Sales price Yield Dates of sale R’000 % Pretoria Lynnwood Erf 493 (vacant land) 2 900 2 August 2017 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Sandton Rivonia Tuscany Place Section 6 4 970 11.2 24 October 2017 Sandton Rivonia Tuscany Place Section 7 7
Slide 83: Appendix B: Spanish Portfolio
Appendix B Spanish Portfolio www.vukile.co.za 83
Slide 84: Spanish portfolio footprint
Spanish portfolio footprint Spain portfolio profile INTRODUCTION Property rank by market value 4 Geographic profile 11% % by market value OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN OVERVIEW PORTFOLIO SPANISH 23% 1 Alameda Retail Park 8 La Serena (ii) 2 12 6 2 Parque Oeste (i) 9 Pinatar MANAGEMENT &
Slide 85: Average base rentals and vacancy profile by Top properties
Average base rentals and vacancy profile by Top 10 properties Monthly rent (€)/m2 and Vacancy (%) Average base rentals(€/m2) Vacancy profile by GLA(%) INTRODUCTION 35.00 15.58 31.12 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 30.00 25.00 10.71 10.26 9.44 9.52 20.00 7.69 7.48 OVERVIEW PORTFOLIO SPANIS
Slide 86: Spain portfolio overview: Top assets
Spain portfolio overview Top 10 assets Kinepolis Retail Park INTRODUCTION Alameda Retail Park Parque Oeste Parque Principado Marismas Del Polvorin and Leisure Centre OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Value €55.3mn €49.4mn €45.6mn €32.6mn €28.8mn OVERVIEW PORTFOLIO SPANISH Province Granada M
Slide 87: Spain portfolio overview: Top assets
Spain portfolio overview Top 10 assets INTRODUCTION Konecta Madrid La Heredad La Serena(i) Pinatar Park Mejostilla OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN GAV €20.1mn €19.2mn €15.4mn €11.6mn €6.4mn OVERVIEW PORTFOLIO SPANISH Province Madrid Badajoz Badajoz Murcia Caceres MANAGEMENT & TREASURY PER
Slide 88: Appendix C: Financial Results Overview
Appendix C Financial Results Overview www.vukile.co.za 88
Slide 89: Group net income analysis
Group net income analysis R1.3bn distributable income for FY2018 INTRODUCTION Income R2 433.7 million R’000 % Rental income 1 601 837 65.8 Municipal and rates recoveries 413 129 17.0 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Interest and other income 185 366 7.3 Dividends from listed securities 137
Slide 90: Analysis of Southern African loan repayment and swap expiry profile
Analysis of Southern African loan repayment and swap expiry profile Well hedged with low risk expiry profile Southern African Loan and Swap Expiry Profile INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 27.9% 30.8% 26.6% 26.0% 20.4% OVERVIEW PORTFOLIO SPANISH 21.2% MANAGEMENT & TREASURY PERF
Slide 91: Analysis of Spanish loan repayment and swap expiry profile
Analysis of Spanish loan repayment and swap expiry profile Debt restructured as part of Alameda & Pinatar acquisition Castellana’s Spanish Loan and Swap Expiry Profile INTRODUCTION OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN 44.4% 44.4% OVERVIEW PORTFOLIO SPANISH 30.1% 30.1% 25.4% 25.4% MANAGEMENT &
Slide 92: Valuation methodology
Valuation methodology Southern African property portfolio Directors’ valuations used in financial statements calculated as follows INTRODUCTION Discounted Cash Flow Method OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN Hold Period Multi tenanted properties 4 years then cap year 5 net income Sing
Slide 93: Segmental loan-to-value and interest cover ratios
Segmental loan-to-value and interest cover ratios Low risk conservative balance sheet INTRODUCTION Southern Africa Spain Group Internal Policy R'000 €'000 R'000 at Group level Loan-to-value ratio (net of cash and cash equivalents) (i) 24.6% 42.2% 28.2% 35% - 40% OVERVIEW RETAIL PORTFOLIO SOUTHERN AF
Slide 94: GBP foreign exchange hedging
GBP foreign exchange hedging Maintaining sustainable predictable income while reducing currency volatility INTRODUCTION £'000 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 Net GBP dividends forecast (xi) £2 562 £2 641 £2 713 £2 661 £2 727 £2 760 OVERVIEW RETAIL PORTFOLIO SOUTHERN AFRICAN FEC hedge (£1 9
Slide 95: EUR foreign exchange hedging
EUR foreign exchange hedging Maintaining sustainable predictable income while reducing currency volatility INTRODUCTION €'000 Jun-18 (xiii) Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Net EUR dividends forecast (xiv) €1 295 €3 009 €3 166 €3 219 €3 322 €3 396 €3 461 OVERVIEW RETAIL PORTFOLIO SOUTHERN A
Slide 96: Notes to Treasury Management Slides
Notes to Treasury Management Slides Aligned with industry best standards INTRODUCTION (i) Loan-to-Value ratio calculated as a ratio of interest bearing debt less Cash and cash equivalents (excluding tenant deposits) divided by the sum of (i) the amount of the most recent Director’s Valuation of all