Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2023 Earnings Presentation
66 slides from Hyprop Investments's earnings presentation, September 2023
Slide 1: Annual Results presentation
Annual Results presentation year ended 30 June 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 up • Independent valuation on • Independent valuation on • Ikeja City Mall remains • Internalised physical district 24% to R1.451 billion the SA portfolio
Slide 4: Key metrics
Key metrics 4 Group Distributable income (Cps)/(R’m) 18% 500 *405.3 400 *127.3 12.6 Europe additional income 300 29.5 Effect of realised forex loss in SSA *19.4 7.4 Effect of additional shares 200 342.5 297.8 SA interest re Europe and interest rate increases 100 SA and Africa 354.5 312.9 *258.6 0 20
Slide 5: Key metrics
Key metrics 5 Group Interest cover ratio (ICR) IFRS ICR Cash ICR Loan to value % Fully consolidated SA REIT LTV 3.2 2.8 3.8 2.8 36.4% 36.3% 36.9% 36.1% 2022 2023 2022 2023 2022 2023 2022 2023 June June
Slide 6: South Africa
South Africa Investment property 62% Distributable income 62% Total GLA 71% Rosebank Mall, Gauteng
Slide 7: SA operations – rolling 12 months
SA operations – rolling 12 months 7 Historic statistics updated for most recent available information Turnover (R’m) Effort ratio – portfolio (%) 12.8% 11.1% 12.0% 25 000 13.9% 1.8% 1.6% 0.0% 20 000 12.0% 15 000 10.0% 1.5% 10 000 0.9% 0.8% 5 000 18 073 18 397 20 954 23 637 23 743 11.1% 11.0% 9.6% 8.
Slide 8: SA operations – rolling 12 months
SA operations – rolling 12 months 8 Historic statistics updated for most recent available information Average monthly foot count (m) Spend per head 7.0 320 5.2% 4.6% 7.2% 6.3% 13.4% 300 6.5 6.4% 7.0% 280 11.6% 6.0 260 8.8% 1.7% 240 5.5 220 6.2 5.7 6.1 6.4 6.5 241 269 286 307 306 5.0 200 2020 2021 20
Slide 9: SA operations – 5 year trends
SA operations – 5 year trends 9 Turnover (m) Rental income (m) 27 000 2 500 25 000 12.0% 1.8% 13.9% 12.8% 11.9% 4.8% 4.3% 4.1% 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 June) (12 months ending June) * 100% Hyp
Slide 10: SA leasing activity – year-to-date
SA leasing activity – year-to-date 10 Reversions Positive Flat Negative 70% Retail Office Total Renewal Reversion Rate* -9.7% -6.3% -9.3% 60% (weighted average) * Relates to 12.0% of Portfolio GLA 50% New Deal Reversion Rate^ -4.7% -9.3% -8.4% 40% (weighted average) ^ Relates to 4.6% of Portfolio GL
Slide 11: SA leasing activity
SA leasing activity 11 Leasing workload FY2023 (m2) 250 000 200 000 9 646 1 282 8 668 (1 233) 170 265 5 610 150 000 108 546 Expiries (79 057) 100 000 83 645 (31 536) 22 626 Vacancies 50 000 25 714 Vacancies 61 019 Under negotiation 36 005 Under negotiation 0 Workload Early Early Non Expirying GLA Ad
Slide 12: SA Tenants
SA Tenants 12 Canal Walk Canal Walk Canal Walk Somerset Mall Somerset Mall Rosebank Mall The Glen The Glen Hyde Park Corner Hyde Park Corner Rosebank Mall Rosebank Mall Woodlands Woodlands CapeGate CapeGate Clearwater Mall Clearwater Mall
Slide 13: Eastern Europe
Eastern Europe Investment property 31% Distributable income 36% Total GLA 22% City Center one East, Zagreb
Slide 14: Macroeconomic and retail environment
Macroeconomic and retail environment 14 Real GDP growth (%) CPI (%) 7 25 6 20 5 15 4 10 3 5 2 1 -5 Bulgaria Croatia North Eurozone European Union Europe Bulgaria Croatia North Eurozone European Union Europe Macedonia plus UK Macedonia plus UK 2022 2023 2024 2025 2026 2022 2023 2024 2025 2026 Unemplo
Slide 15: EE operations – rolling 12 months
EE operations – rolling 12 months 15 Historic statistics updated for most recent available information Turnover (€’m) Effort ratio – portfolio (%) 600 15.9% 16.3% 16% 500 14.5% 11.3% 0.7% 12% 0.1% 0.1% 0.3% 400 1.0% 1.0% 300 8% 200 4% 100 409 406 465 539 543 10.7% 10.8% 10.5% 9.5% 9.5% 0 0% 2020 202
Slide 16: EE operations – rolling 12 months
EE operations – rolling 12 months 16 Historic statistics updated for most recent available information Average foot count (m) Spend per head (€/person) 3 22 14.3% 14.2% 2.5% 1.4% 1.8% 20 12.0% 16.6% 11.8% 2 11.4% 18 6.3% 16 1 14 12 2.0 1.8 2.0 2.3 2.3 16.9 18.9 19.4 19.7 19.8 0 10 2020 2021 2022 202
Slide 17: EE operations – 5 year trends
EE operations – 5 year trends 17 Turnover (€m) Rental income (€m) 600 55 11.3% 0.7% 14.5% 15.9% 13% 3% 20% 10% 50 500 45 40 400 35 300 30 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (12 months ending June) (12 months ending June) Indexation - All tenants excl. pure turnover rent (%) Turnover r
Slide 18: EE leasing activity – year-to-date
EE leasing activity – year-to-date 18 Reversions Positive Flat Negative 70% Retail Renewal Reversion Rate* 10.2% 60% (weighted average) * Relates to 17.1% of Portfolio GLA 50% New Deal Reversion Rate^ 23.4% 40% (weighted average) ^ Relates to 4.3% of Portfolio GLA 30% Overall Reversion Rate# 12.9% 2
Slide 19: EE leasing activity
EE leasing activity 19 Leasing workload FY2023 (m2) 50 000 4 330 260 45 000 ( 842) 21 501 40 000 35 000 30 000 25 000 20 000 19 009 (24 724) 15 000 12 261 (7 273) 557 Vacancies 10 000 16 768 Expiries 5 000 11 704 Under negotiation 1 398 Vacancies 0 843 Under negotiation Workload Early Replacement GL
Slide 20: EE Tenants
EE Tenants 20 Skopje City Mall Skopje City Mall Skopje City Mall The Mall, Sofia City Center one West City Center one West The Mall, Sofia The Mall, Sofia City Center one East City Center one East The Mall, Sofia The Mall, Sofia
Slide 21: Sub-Saharan Africa
Sub-Saharan Africa Investment property 7% Distributable income 2% Total GLA 7% Kumasi City Mall, Ghana
Slide 22: Macroeconomics
Macroeconomics 22 Sub-Saharan Africa Cedi/USD Cedi rental 12 800 700 10 600 8 500 6 400 300 4 200 2 100 0 0 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Naira/USD 3 Month Funding Rate 800 10.0% 700 600 500 400 1.0% 300 200 100 0 0.1%
Slide 23: SSA trading overview – rolling 12 months
SSA trading overview – rolling 12 months 23 Turnover ($’m) Turnover (Cedi’m) 100 16.9% 3.3% 3.1% 850 29.2% 29.1% 800 80 25.1% 25.1% 750 700 60 650 10.7% 600 7.7% 40 550 7.8% 20 500 91 94 91 68 67 450 508 548 606 783 792 0 400 2020 2021 2022 2023 July 2020 2021 2022 2023 July 2023 2023 June June Trad
Slide 24: SSA trading overview – rolling 12 months
SSA trading overview – rolling 12 months 24 Spend per head ($/person) Spend per head (Cedi/person) 6 7.9% 50 35.1% 35.2% 9.8% 9.5% 5 40 21.6% 21.5% 12.5% 3.4% 4 0.1% 30 3 20 2 1 10 5.0 5.4 4.9 3.9 3.8 28.3 31.9 32.9 44.5 45.4 0 0 2020 2021 2022 2023 July 2020 2021 2022 2023 July 2023 2023 June June
Slide 25: Disposals and interventions
25 Disposals and interventions Salient points • Managing fallout from economic deterioration in Ghana and Nigeria • Managing Game’s exit in Ghana and finding replacement tenants • Converted $8.7m Niara into USD – used to pay down debt • No US$ liquidity in Nigeria after exchange control relaxation i
Slide 26: Financial results
Financial results Somerset Mall, Western Cape (Cinema Connect artistic impression)
Slide 27: Distributable income
Distributable income 27 Change in distributable income (R’m) Increase Decrease 1 750 Sub-Saharan Africa (R43m) 1 650 52 1 550 424 (8) 1 451 South Africa (R101m) 32 1 450 (59) 58 (60) 1 350 130 1 250 1 171 (120) (15) 1 150 1 050 (149) (5) 950 850 June 2022 Income Covid-19 Operating Other Net interest
Slide 28: Cash flows
Cash flows 28 For the year ended 30 June 2023 30 June 2023 30 June 2022 R’000 R’000 Net cash flows from operating activities 303 553 357 172 Cash generated from operations 2 437 584 1 837 635 Interest received 51 781 74 093 Interest paid (881 765) (481 336) Taxation paid (154 227) (38 531) Cash flow
Slide 29: Borrowings profile
Borrowings profile 29 Borrowings by lender Debt exposure by currency (R’m) Standard Bank Group ZAR EUR 12.2% USD 21.0% Nedbank 9.8% RMB 20000 3.9% Erste Bank/Raiffeisenlandesbank LTV LTV DSK/OTP Bank 36.3% 10.5% 36.4% 22.6% Komercijalna Bank 19.2% 15 220 14 488 (and syndicate banks) 15000 (85) 272 2
Slide 30: Change in LTV and sensitivity
Change in LTV and sensitivity 30 Movement in fully consolidated LTV from 30 June 2022 to 30 June 2023 (%) Increase Decrease 42 40 2.6 38 1.2 36.4 (1.3) 1.2 36.3 36 0.4 (0.3) (0.2) 34 (3.8) 32 LTV at Fair Value of Fair Value of Change in Dividend DRIP Profit for the Increase in Other LTV at 30 June 2
Slide 31: Group borrowings maturity profile
Group borrowings maturity profile 31 Rand equivalent (R’m) ZAR debt USD debt EUR guaranteed debt EUR in-country debt RCF 3500 3000 2 934 2500 410 2000 1 112 850 500 250 1500 1 026 1 537 1 425 1000 1 117 500 847 500 200 760 502 500 548 482 579 410 410 0 240 Q3: Q4: Q1: Q3: Q4: Q1: Q3: Q4: Q1: Q2: Q3:
Slide 32: Interest rate profile
Interest rate profile 32 Interest rate exposure hedged (%) Average tenure at 30 June 2023 Interest cover ratio 120 2.59 Rand 1.51 100 102% 908m 80 89% 4.21 83% 80% 2.8 77% Euro 73% 75% times 60 2.19 1 605m 40 1.67 US Dollar 20 1.67 0 0 1 2 3 4 5 Total ZAR EUR USD Years Cash operating profit 30 June
Slide 33: Interest rate hedges
Interest rate hedges 33 Rand equivalents (R’m) Hedge maturity profile ZAR USD EUR 3 000 2 500 1 600 2 000 1 750 1 652 1 500 1 135 1 000 821 500 616 500 500 550 500 500 300 400 250 410 0 2023 2023 2024 2024 2024 2024 2025 2025 2025 2025 2026 2026 2026 2026 2027 2027 2027 2027 2028 2028 2029 2030 2029
Slide 34: In closing
In closing Canal Walk, Western Cape
Slide 35: Our impact
Our impact 35 Environment • Gauteng’s solar PV second phase project is complete at Woodlands Boulevard and Rosebank Mall. Clearwater Mall’s fourth phase is underway • New solar PV feasibility studies at The Glen (further 3 854 kWp) and CapeGate (5 532 kWp) complete, Canal Walk and Somerset Mall’s fe
Slide 36: Looking ahead
Looking ahead 36 Creating spaces and connecting people Group South Africa Eastern Europe Sub-Saharan Africa Non-Tangible Assets • Final dividend of 299.3 cents • Complete The Mall Offices • Skopje City Mall to open an • Reduce in–country debt in • Somerset Mall running a pilot per share – 75% vs 62%
Slide 37: Q&A
Q&A Skopje City Mall, Skopje North Macedonia
Slide 38: Annexures
Annexures Clearwater Mall, Gauteng
Slide 39: South African properties
South African properties 39 Portfolio summary Canal Walk and Canal Walk Offices Clearwater The Glen Woodlands Boulevard CapeGate % Ownership 80% 100% 75.15% 100% 100% GLA 157 013 86 281 78 757 72 384 64 029 Vacancy levels Retail 0.7% 1.2% 2.7% 1.0% 0.7% Offices 31.6% Total foot count (12 months) 18.
Slide 40: South African properties
South African properties 40 Portfolio summary Somerset Mall Rosebank Precinct Hyde Park Corner and Offices % Ownership 100% 100% 100% GLA 70 216 91 051 38 427 Vacancy levels 0% Retail 1.5% Retail 3.6% Offices 30.5% Office 44.2% Total foot count (12 months) 9.2m 11.0m 3.5m
Slide 41: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA 41 South Africa at 30 June 2023 % of total GLA June 2022 June 2023 10% 8.0% 8.0% 8% 7.4% 7.5% 7.0% 5.9% 6.0% 6.0% 6% 5.1% 5.1% 3.8% 4.0% 3.8% 3.9% 3.7% 3.7% 4% 2.7% 2.3% 2.1% 1.9% 2% 0% Woolworths Pick 'n Pa y LTD Foschini Group Retailability Massmart Group Pepkor Holding
Slide 42: Trading performance
Trading performance 42 South African portfolio % of reported Trading density Total Primary category growth turnover GLA Department Stores: Clicks, Dis-Chem, Edgars, Game, Woolworths 6.5% 25.8% 25.0% Apparel: Mr Price, Foschini, Truworths 13.7% 18.9% 20.7% Food: Checkers, Pick 'n Pay, Liqour Stores,
Slide 43: Leasing activity
Leasing activity 43 South Africa New lettings and renewals Renewal Rental reversion as Average of retention Rentable Reversion % of average Contractual lease period rate by no. Gross lettable % of Total Leasing area (m2) rate monthly rental escalation rate (Year) of tenants area (m²) renewal workloa
Slide 44: SA operations – 12 months average ending 30 June 2023
SA operations – 12 months average ending 30 June 2023 44 Historic statistics updated for most recent available information Tenant turnover (R’m) Effort ratio (%) 20.1% 20% 8 000 Millions 7 000 16% 6 000 5 000 12% 0.4% 0.4% 0.7% 4 000 1.5% 0.7% 0.7% 0.1% 4.5% 9.2% 1.5% 3 000 8% 21.1% 13.9% 5.1% 8.4%
Slide 45: Operations
Operations 45 South Africa Receivables and collections (R’m) – 100% of properties Cost to income (%) 46.0 44.4 0.4 45.0 2.9 1.7 3500 3 347 2.3 1.8 Changes in expected 40.0 2.1 3000 1.9 credit losses 3.9 3.8 35.0 Management and 4.9 2500 5.1 other expenses 30.0 Maintenance 2000 25.0 Depreciation and 1
Slide 46: SA valuations bridge (R'm)
SA valuations bridge (R’m) 46 7.8% 370 23 500 0% 8% 2% 4% 4% 2% 1% 4% 41 13 58 23 032 117 23 000 256 (89) 22 662 14 (40) 22 500 22 000 21 500 21 000 June 2022 Canal Walk Clearwater The Glen Somerset Mall Woodlands Rosebank Hyde Park CapeGate June 2023 Boulevard Precinct Corner Increase Decrease Rose
Slide 47: Impact of loadshedding
Impact of loadshedding 47 July 2022 – June 2023 July and August 2023 Total cost of loadshedding 103 800 243 12 075 886 Generator cost recoveries 79 803 062 10 580 192 Net cost 23 997 181 1 495 694 Recovery ratio 77% 88%
Slide 48: SA Current projects
SA Current projects 48 Mall Project Completion date Cost/Budget Yield Status The Glen KFC drive-through September 2022 R4 850 000 14.3% Complete Clearwater Mall Piazza upgrade September 2022 R9 400 000 - Complete Somerset Mall New Checkers FreshX November 2023 R91 600 000 - Underway Updated to Canal
Slide 49: Eastern European properties
Eastern European properties 49 Portfolio summary Skopje City Mall The Mall City Center one East City Center one West Skopje, Macedonia Sofia, Bulgaria Zagreb, Croatia Zagreb, Croatia % Ownership 100% 100% 100% 100% GLA 36 781 61 574 47 260 42 282 Vacancy levels 0.0% 0.9% 0.0% 0.0%
Slide 50: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA 50 Eastern Europe at 30 June 2023 % of total GLA June 2022 June 2023 10% 8.0% 8% 7.0% 7.0% 6.9% 6% 5.5% 5.5% 4% 3.6% 3.6% 3.4% 3.0% 2.8% 2.8% 2.3% 2.3% 2.2% 2.2% 2.0% 2.0% 2% 1.6% 1.6% 0% Interspar Inditex Peek & H&M LPP Cineplexx C&A Müller Arena Technopolis Cloppenburg
Slide 51: EE operations – 12 months average ending 30 June 2023
EE operations – 12 months average ending 30 June 2023 51 Historic statistics updated for most recent available information Turnover (€’m) Effort ratio (%) 200 18% 180 17.1% 15.9% 16% 160 140 14% 23.5% 2.2% 120 6.8% 12% 100 1.0% 80 10% 0.7% 0.7% 60 8% 40 20 167 166 109 97 6% 8.5% 8.8% 12.0% 9.7% 0 4%
Slide 52: Trading performance
Trading performance 52 Eastern Europe portfolio % of reported Trading density Total Primary category growth turnover GLA Apparel: Peek & Cloppenburg, H&M, Zara, C&A 12.9% 37.5% 46.7% Food: Raffy Restaurant, Interspar, Billa, Ramstore 21.0% 11.5% 12.8% Shoes : Mat Star, Humanic, Deichmann, CCC 12.9%
Slide 53: Leasing activity
Leasing activity 53 Eastern Europe New lettings and renewals Rental reversion Rentable as % of average Average Average lease Gross lettable % of total Leasing area (m2) Reversion rate monthly rental indexation duration (years) area (m2) portfolio Retail 40 100 4.5% 26.5% 9.5% 4.4 21.3% New leases co
Slide 54: Operations
Operations 54 Eastern Europe – receivables and collections Receivables and collections (€’m) 100 90.5 90 (1.2) 80 70 60 50 40 30 20 (100%) 10 1.2 (89.7) 0.8 0 Net receivables Invoiced COVID 19 Collected Net receivables b/fwd relief & discounts c/fwd Arrears – June 2022: €1.2 million June 2023: €0.8
Slide 55: Europe valuations bridge (€m)
Europe valuations bridge (€m) 55 0.2% 1.1 580 1.0% 0.7% 1.9% 0.3% 0.4 574.7 575 2.8 573.6 (0.9) 570 (1.2) 565 560 555 550 June 2022 Skopje City Mall The Mall, Sofia City Center one East City Center one West June 2023 Zagreb Zagreb Increase Decrease
Slide 56: EE Current projects
EE Current projects 56 Mall Project Completion date Cost/Budget Yield Status The Mall, Sofia Bathroom upgrade (phase 1) Q2 2023 €773 000 - Complete The Mall, Sofia Bathroom upgrade (phase 2) Q3 2023 €700 000 - Complete Defensive Skopje City Mall New H&M Store March 2024 €2 700 000 Underway spend
Slide 57: Sub-Saharan Africa properties
Sub-Saharan Africa properties 57 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% 0.3% 32.4% 32.2% Total foot count (12 months) 5.4m 5.6m 4.7m 7.3m * AttAfrica's share in these asset
Slide 58: SSA operations – 12 months average ending 30 June 2023
SSA operations – 12 months average ending 30 June 2023 58 Historic statistics updated for most recent available information Turnover ($m) Turnover (Cedi ‘m) 80 500 39.9% 400 60 300 19.1% 40 200 16.1% 19.7% 20 31.7% 31.3% 100 38 15 15 438 176 170 0 0 Accra Mall West Hills Mall Kumasi City Mall Accra
Slide 59: Segmental performance
Segmental performance 59 South Africa Eastern Europe Sub-Saharan Africa 30 June 2023 30 June 2022 30 June 2023 30 June 2022 30 June 2023 30 June 2022 R’000 R’000 R’000 R’000 R’000 R’000 Revenue 2 738 924 2 597 851 1 338 653 285 337 296 363 237 575 Lease revenue 1 866 626 1 830 134 1 167 201 233 448
Slide 60: Reconciliation of cash generated from operations to distributable income
Reconciliation of cash generated from operations to 60 distributable income 30 June 2023 30 June 2022 South Africa Eastern Europe Sub-Saharan Africa Group South Africa Eastern Europe Sub-Saharan Africa Group R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Cash generated from operations 1 465 056 819
Slide 61: Debt metrics
Debt metrics 61 30 June 2023 30 June 2022 Fully Fully consolidated SA REIT consolidated SA REIT LTV LTV LTV LTV Loan to Value ratio Hyprop total assets 39 870 697 39 870 697 37 276 317 37 276 317 Less: Goodwill and intangible assets (1 175) (59) (1 141) (54) Cash and cash equivalents (1 201 103) (1
Slide 62: Borrowings maturity profile
Borrowings maturity profile 62 As at June 2023 June 2023 June 2022 South African borrowings (ZAR’m) Term RCF Property value (Rbn) 23.0 22.7 LTV 25.5% 26.1% 2000 1 425 Weighted average cost of funding 850 8.9% 7.6% 1 117 (incl. hedges) 1000 250 200 Weighted average loan tenor 2.59 2.0 847 240 760 Pro
Slide 63: Investment property and capital expenditure
Investment property and capital expenditure 63 30 June 2023 30 June 2022 30 June 2021 South Africa R25.3bn (59%) R25.0bn (63%) R25.4bn (59%) Hyprop effective interest R23.0bn (62%) R22.7bn (65%) R23.2bn (70%) Hyprop’s effective interest Exit cap rate range 6.8% - 9.3% 6.8% - 10.0% 6.8% - 9.3% Weight
Slide 64: Equity bridge
Equity bridge 64 Hyprop Group (R’m) Increase Decrease 24 000 23 500 862 36 23 000 (72) 497 10 22 699 22 500 434 56 1 078 (12) 22 000 (1 004) 21 500 21 000 20 814 20 500 20 000 19 500 19 000 18 500 NAV June Net operating Property Other fair Impairments FCTR Non-controlling Tax Distribution Share Othe
Slide 65: Disclaimer
Disclaimer 65 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 66: Investor Relations
Investor Relations Boitumelo Nkambule - [email protected]