Hyprop Investments Limited · JSE:HYP

Hyprop Investments — H1 2016 Earnings Presentation

26 slides from Hyprop Investments's earnings presentation, February 2016

  1. Slide 1: Interim Results: Strategic & Operational Overview

    INTERIM RESULTS Six months to 31 December 2015 STRATEGIC & OPERATIONAL OVERVIEW Woodlands Boulevard (Pretoria, Gauteng) 1

  2. Slide 2: Strategic & Operational Overview / Financial Highlights

    STRATEGIC & OPERATIONAL OVERVIEW South African REIT Focused on emerging markets Ownership of shopping centres Distinguished by:  Quality, dominance and location  Middle-to-higher income consumers  Mix of flagship national and international retailers  Preferred shopping destination in high-densit

  3. Slide 3: Distribution Growth / Company Structure

    DISTRIBUTION GROWTH Cents per share 700 15,0% 600 11,3% 543 6,0% 472 500 424 400 13,4% 13,7% 16,3% 9,5% 13,1% 297,8 300 4,5% 7,5% 262,7 280,3 231 241 211 213 200 100 0 2013 2014 2015 2016 1st Half 2nd Half Total % growth 5 COMPANY STRUCTURE SOUTH AFRICAN PORTFOLIO Clearwater Mall Somerset Mall Hyde

  4. Slide 4: Company Structure: Sub-Saharan Africa and CEE Portfolios

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

  5. Slide 5: Investment Profile

    INVESTMENT PROFILE Investments Distributable income Held for sale R1,2bn Held for sale R55,5m Sub-Saharan Africa Sub-Saharan Africa (excluding SA) (excluding SA) R4,1bn R35,2m 4% 6% 4% 13% 83% 90% Core South African Core CoreSouth SouthAfrican African portfolio portfolio portfolio R26,1 bn R859m R1,

  6. Slide 6: South African Portfolio Operating Performance

    OPERATING PERFORMANCE Rosebank Mall (Johannesburg, Gauteng) SOUTH AFRICAN PORTFOLIO OPERATING PERFORMANCE Lower cost to income ratio Maintaining good rental growth and escalations Lower vacancy Arrears remain flat Renewals on track Impact of Platinum Group Canal Walk (Western Cape) and Clearwater Ma

  7. Slide 7: Leasing Activity / Leasing Terms

    LEASING ACTIVITY Rental Contractual % of growth escalation No. of Leasing portfolio Area (m²) (%) (%) leases Retail 11,3 80 349 9,2 8,0 269 Offices 9,4 7 133 3,5 8,4 25 Total 11,2 87 482 9,0 8,0 294 Lease renewal process Leases still outstanding 61 103 41% Leases completed 87 482 59% Total 148 585 1

  8. Slide 8: Vacancies / Trading Overview

    VACANCIES 31 Dec 2015 31 Jun 2015 31 Dec 2014 (%) (%) (%) Retail 0,9 1,3 1,4 Offices 7,2 8,3 6,6 Total 1,5 2,0 1,8 Canal Walk (Western Cape) and Rosebank Mall (Gauteng) 15 TRADING OVERVIEW 12% Trading density growth 10% Rent ratio (rental as % of turnover) 8% 7,4% 7,1% 7,0% 7,0% 6,9% 6,7% 6% 5,5% 5,

  9. Slide 9: Developments

    DEVELOPMENTS Extensions and tenant refurbishments: Completed:  Woolworths extension at Somerset Mall R59m R141 m  H&M Clearwater R37m Under planning:  Canal Walk R45m  Atterbury Value Mart R26m R87m  Somerset Mall R16m 17 INVESTMENT IN SUB-SAHARAN AFRICA (excluding SA) Ikeja City Mall (Lagos, N

  10. Slide 10: Market Conditions / Ikeja City Mall Acquisition

    MARKET CONDITIONS Negatives  Weakening of local currencies  USD liquidity and availability  Electricity supply problems Positives  Located in key cities - economic growth higher than country average  Portfolio reaching critical mass  Defensive portfolio - able to withstand headwinds  Slowdown

  11. Slide 11: Income Producing Properties

    INCOME PRODUCING PROPERTIES Investment in Sub-Saharan Africa (excluding SA) Hyprop Value GLA Value Centre City & Country share (%) (USD 000) (m²) /m² Accra Mall Accra, Ghana 17,6 101 400 21 230 4 776 West Hills Mall Accra, Ghana 16,8 89 200 27 558 3 237 Achimota Accra, Ghana 28,1 53 000 14 662 3 615

  12. Slide 12: Developments

    DEVELOPMENTS Developments: Achimota Mall (Accra, Ghana): opened in October 2015 Accra Mall (Accra, Ghana): Redevelopment of food court and 1 000m² extension, cost USD 9,5m, completion April 2016 Kumasi City Mall (Kumasi, Ghana): Under construction - Opening April 2017 Under planning: Future 14 000m²

  13. Slide 13: Overview / Income Producing Properties

    OVERVIEW Strategy  To acquire or develop high-quality shopping malls  Size of EUR 1 billion within 5-years  Will partner with strong local developers/owners  Attractive income yields  Low cost of bank funding Company structure  Hystead established in the UK  60% shareholding  Secured EUR fun

  14. Slide 14: Income Producing Properties: Delta Centre Podgorica

    INCOME PRODUCING PROPERTIES DELTA CENTRE, PODGORICA (MONTENEGRO) Acquisition cost EUR 75 m Yield 8,6% Average rental EUR 22/m² GLA 23 400m² Number of stores 80 Foot count/m² 17 Tenants  Indetex Group  New Yorker  International fashion brands 27 FINANCIAL RESULTS Hyde Park Corner (Johannesburg, Ga

  15. Slide 15: Net Income

    NET INCOME YEAR-ON-YEAR CHANGE R 000 800 000 25 812 750 000 14 302 22 075 59 123 (34 342) (2 320) 700 000 650 000 723 282 600 000 638 633 550 000 500 000 31 Dec Existing Rosebank Sub-Saharan Net Properties Other 31 Dec 2014 portfolio Mall Africa interest sold 2015 (Excl. SA) 29 NET INCOME DRIVERS OF

  16. Slide 16: Balance Sheet / Property Valuations

    BALANCE SHEET EXTRACTS 31 Dec 2015 30 Jun 2015 (Rm) (Rm) % Change Hyprop’s share Investment property (South Africa) 26 062 25 003 4,2 Investments in sub-Saharan Africa 5 136 2 339 119,6 (excl. SA) Held for sale 1 271 1 235 Other assets 570 279 Minority share 629 Total assets 33 668 28 856 16,7 Hypro

  17. Slide 17: Debt Management / Sources of Funding

    DEBT MANAGEMENT 31 Dec 2015 30 Jun 2015 (Rm) (Rm) Bank debt 7 858 4 520  South Africa 2 967 2 327  USD (Rand equivalent) 4 891 2 193 Debt capital market funding 1 610 2 172  Corporate bonds 1 200 1 800  Commercial paper 410 372 Cash and cash equivalents (207) (138) Net borrowings 9 261 6 554 Loa

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

    DEBT AT FIXED RATES 31 Dec 2015 30 Jun 2015 (%) (%) Total debt 85,7 94,5  South African debt 90,5 96,7  USD debt (Rand equivalent) 77,0 89,9 35 DEBT MATURITIES 31 Dec 2015 30 Jun 2015 (years) (years) Total debt – Fixed rates and swaps 4,6 5,2  South African debt 5,1 5,6  USD debt (Rand equivalen

  19. Slide 19: Cost of Funding

    COST OF FUNDING 31 Dec 2015 30 Jun 2015 (%) (%) Total debt 6,6 7,1  South African debt 8,6 8,4  USD debt (Rand equivalent) 4,6 4,4 37 PROSPECTS Canal Walk (Cape Town, Western Cape) 19

  20. Slide 20: Global Economic Outlook

    GLOBAL ECONOMIC OUTLOOK 2015 2016* 2017* Economic growth (%) (%) (%) World 3,1 3,4 3,6 South Africa 1,3 0,7 1,8 Sub-Saharan Africa 3,5 4,0 4,7 Emerging Europe 2,8 3,4 3,1 * Forecast Source: IMF 39 GLOBAL ECONOMIC OUTLOOK (continued) Moody’s 2015 2016* Economic growth per country (%) (%) Outlook Rati

  21. Slide 21: Prospects

    PROSPECTS Higher dividend growth compared to previous guidance Mainly due to income from new acquisitions FY 2016: Dividend growth of 13% to 15% Rosebank Mall (Gauteng) Canal Walk (Western Cape) Clearwater Mall (Gauteng) 41 APPENDICES Rosebank Mall (Johannesburg, Gauteng) 21

  22. Slide 22: Track Record / Revenue Spread

    TRACK RECORD Rbn LTV % 36 60% Investment property 32,5 32 Market cap 28,6 29,4 28 26,4 45% 25,1 24 LTV % 20,2 19,3 20 18,7 17,7 19,0 17,4 30% 16 12,9 28,5% 12 9,4 9,5 23,1% 22,9% 26,6% 23,1% 26,2% 8 15% 12,6% 4 0 0% 2010 2011 2012 2013 2014 Jun 2015 Dec 2015 43 REVENUE SPREAD SA INVESTMENT PROPERTY

  23. Slide 23: Debt Maturity Profile

    DEBT MATURITY PROFILE BANK FACILITIES AND DCM Rm Average maturity: 2 000  Total debt 3,4 years  South African debt 2,9 years 1 800  USD debt 4,0 years 1 600 1 400 Bank facilities 1 200 Bonds / Commercial paper 1 000 USD Funding 800 600 400 200 - June June June June June June June June June 16 17

  24. Slide 24: % Gross Rent to Turnover / Trading Density

    % GROSS RENT TO TURNOVER Deterioration % Gross rent to turnover Improvement 10,0% 1% 9,0% 9% 5% 3% Portfolio average: +7,0% 8,8% 8,8% 8,7% 8,7% 8,0% 5% 98% 7,8% 7,6% 2% 1% 7,0% 6,9% 1% 6,8% 6,0% 6,4% 0% 5,0% 5,3% 1% 4,0% 4,4% 3,0% 2,0% 1,0% 0,0% Canal The Glen Hyde Park Atterbury Clearwater Rosebank

  25. Slide 25: Top 8 SA Properties by Value

    TOP 8 SA PROPERTIES BY VALUE Canal Walk Clearwater Woodlands (80% undivided share) Mall Rosebank Mall* Boulevard Region Cape Town Region Johannesburg Region Johannesburg Region Pretoria Valuation (Rm) 7 020 000 Valuation (Rm) 4 090 000 Valuation (Rm) 2 967 000 Valuation (Rm) 2 339 800 Total rentable

  26. Slide 26: Disclaimer

    DISCLAIMER FORWARD-LOOKING STATEMENTS  This document contains forward-looking statements that, unless otherwise indicated, reflect the group’s expectations as at 30 June 2015  Actual results may differ materially from the group’s expectations if known and unknown risks or uncertainties affect its

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