Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2021 Earnings Presentation
61 slides from Hyprop Investments's earnings presentation, September 2021
Slide 1: Audited Annual Results year ended 30 June 2021
Audited Annual Results year ended 30 June 2021
Slide 2: Agenda
Agenda Headlines and South Africa Eastern Europe Sub-Saharan Africa Financial results In closing Key Metrics 2
Slide 3: Headlines
Headlines Positive progress implementing strategy Group South Africa Eastern Europe Sub-Saharan Africa Non-Tangible Assets • Distributable income of • Property valuation decreased • Property valuation decreased • Property valuation reduced by • SOKO pilot opened at 336.5 cents per share by R1.6 bill
Slide 4: Key metrics
Key metrics Group Change in distributable income (R’m) 1 400 94 1 300 1 200 1 258 (160) 1 100 (32) (22) Net of Edcon 48 3% increase 1 000 in 2020 (6) year-on-year (119) 1 035 (26) 900 800 700 June 2020 SA Covid-19 Rental SA operating SA ECL’s Hystead Effect of USD Saving on Other June 2021 loss of r
Slide 5: Key metrics
Key metrics Group Interest cover ratio (ICR) Loan to value % 3.82 3.47 3.03 2.95 3.04 41.4% 37.2% 26.4% 22.8% June 2020 June 2021 June 2020 June 2021 (12 months) (12 months) IFRS ICR CASH ICR Hyprop SA REIT LTV Hard currency equity debt variance (R’m) IFRS NAV per share (R) 400 362.0 362.0 300 76.09
Slide 6: South Africa
The Glen, Johannesburg South Africa 100.6% 78% 59% Investment property Distributable income Total GLA South Africa Eastern Europe Sub-Saharan Africa 6
Slide 7: Trading overview
Trading overview South Africa Monthly Footcount (millions) and spend per head (R / person) Trading density (R / m2) 12 300 5 000 7.2% 10 250 4 000 5.7% 20.2% 6.3% 8 200 3 000 13.0% 9.0% 9.9% 0.6% 16.1% 4.5% 16.3% 45.5% 6 150 2 000 4 100 2 50 1 000 0 - 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Ju
Slide 8: Leasing activity
Leasing activity South Africa Retail vacancy Lease expiry profile 4% FY 2025+ 24.6% 3% 2.4% 2024/2025 21.5% 2.4% 1.9% 2023/2024 14.0% 2% 1.7% 1.6% 2022/2023 17.4% 2021/2022 11.7% 1% 0.7% 0.8% Current 6.8% Vacancy 4.0% 0% Jun 2016 Jun 2017 Jun 2018 Jun 2019 Feb 2020 Jun 2020 Jun 2021 0.0% 5.0% 10.0%
Slide 9: Repositioning with the times
Repositioning with the times SOKO Dynamic, real-time online system Changing the face of retail theStorage Opened 1 July 2021 277 units ranging in size from 1m² to 39m² Average cost per unit is R1 300/month Average rate is R145/m² Pargo Parkupp Tenant Mix Golden Thread Mixed-Use Elements SOKO Distric
Slide 10: Tenants South Africa
Tenants South Africa The Glen Canal Walk Canal Walk Canal Walk Canal Walk, Somerset Mall Woodlands, Woodlands Somerset Mall, Somerset Mall Woodlands Woodlands, Rosebank, Rosebank Mall Woodlands, Hyde Park Corner CapeGate Hyde Park Corner 10
Slide 11: Eastern Europe
The Mall, Sofia Eastern Europe 30% 17% 1.8% Investment property Distributable income Total GLA South Africa Eastern Europe Sub-Saharan Africa 11
Slide 12: Lockdown and vaccinations
Lockdown and vaccinations Number of days malls were closed due to hard lockdown since pandemic started up to July 2021 Bulgaria Montenegro Serbia North Macedonia Croatia 183 days 98 days 77 days 69 days 57 days Total population vaccinated as at 31 July 2021: Serbia Croatia Montenegro North Macedonia
Slide 13: Trading overview
Trading overview Eastern Europe Monthly Foot Count (millions) and spend per head (€ / person) Trading density (€ / m2) 6 20 400 22.3% 350 5 26.3% 9.4% 15 300 13.1% 7.9% 7.2% 66.2% 4 16.6% 16.1% 1.6% 39.1% 250 9.6% 3 10 200 150 2 5 100 1 50 0 - 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Au
Slide 14: Europe valuations bridge (€'m)
Europe valuations bridge (€’m) 4.8% (39) 900.0 850.0 804 0.3% 1.6% 800.0 0.3% 1.1% (2) (14) 0.7% 0.8% (3) 765 (9) (5) (6) 750.0 700.0 650.0 600.0 19 * Cit y Cit y Ma ll So fia ast st We eb 20 21 20 lta rica lta rade e E reb er e D dgo e D elg Cit y all, n O a g n e gr Jun e mb pje eM ter - Z r O - Z
Slide 15: Tenants Eastern Europe
Tenants Eastern Europe Delta City Podgorica Delta City Podgorica Delta City Podgorica The Mall, Sofia The Mall, Sofia The Mall, Sofia City Center One East City Center One West Skopje City Mall Skopje City Mall Skopje City Mall Skopje City Mall 15
Slide 16: Sub-Saharan Africa
West Hills Mall, Ghana Sub-Saharan Africa 11% -2.5% 5% Investment property Distributable income Total GLA South Africa Eastern Europe Sub-Saharan Africa 16
Slide 17: Trading overview
Trading overview Sub-Saharan Africa Average Monthly foot count (millions) Spend per head ($ / person) 4 10.0 8.0 3 0.1% 6.0 8.5% 7.9% 10.0% 2.4% 9.8% 2 2.26 5.59 5.44 2.04 1.99 4.0 5.05 1 2.0 0 0.0 2019 2020 2021 2019 2020 2021 Including Ikeja June Excluding Ikeja June Trading density ($ / m2 / mont
Slide 18: Disposals and interventions
Disposals and interventions Update since June 2020 • No US$ liquidity in Nigeria through official channels • All bank covenants met • Changed asset management and property management structures: • Appointed local assistant asset manager in Ghana Investment property exposure ($’m) • Moved key SA asse
Slide 19: Financial results
Starbucks, Woodlands, South Africa Financial results 19
Slide 20: Distributable income
Distributable income Change in distributable income (R’m) 1 400 94 1 300 1 200 1 258 (160) (32) 1 100 Net of Edcon (22) in 2020 48 3% increase 1 000 year-on-year (6) 1 035 (119) (26) 900 800 700 June 2020 SA Covid-19 Rental SA operating SA ECL’s Hystead Effect of USD Saving on Other June 2021 loss o
Slide 21: Reconciliation of cash generated from operations to distributable income
Reconciliation of cash generated from operations to distributable income 30 June 2021 30 June 2020 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 1 599 205 (607)
Slide 22: Hyprop debt exposure by currency (R'm)
Hyprop debt exposure by currency (R’m) Debt exposure by currency (R’m) Total bank borrowings at year-end (R’m) 16000 25000 LTV 41.4% 22 871 13 970 57.2% 14000 3 190 LTV 37.2% 20 397 7.9% 11 991 19 598 20000 3 351 12 285 724 12000 11.4% 1 167 12 737 12 662 10000 15000 8000 5 425 6 120 10000 6000 38.3
Slide 23: Change in LTV and sensitivity
Change in LTV and sensitivity Movement in Hyprop LTV from June 2020 to June 2021 (%) Forward looking Hyprop LTV (%) 45.0% 40.0% 40.0% 41.4% 1.8% 37.2% (1.9%) 35.0% (1.8%) (2.3%) (2.3%) 35.0% 37.2% 30.0% 30.0% (5.0%) (2.1%) 27.1% R1bn R941m R1.5bn R807m 25.0% R1 058m R2 776m R1 153m 25.0% 30 June Deb
Slide 24: Debt maturity profile
Debt maturity profile Rand equivalent (R’m) 3500 3000 3 196 500 1 569 2 793 2 890 2500 2000 1500 200 852 500 1 425 1 404 1000 821 950 959 500 100 650 673 317 450 452 348 0 Q3: Q4: Q1: Q2: Q3: Q4: Q1: Q2: Q3: Q4: Q1: Q2: Q1: Q3: Q4: Q4: Q3: 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024
Slide 25: In closing
Outside Terraces Skopje City Mall, North Macedonia In closing 25
Slide 26: Purpose and priorities
Purpose and priorities Purpose How we do it We create safe environments and By owning and managing dominant retail opportunities for people to connect centres in mixed-use precincts in key economic and have authentic and meaningful nodes in South Africa and Eastern Europe experiences Group South Afr
Slide 27: Questions and answers
Hyde Park Corner, Johannesburg, South Africa Questions and answers 27
Slide 28: Annexures
Rosebank Mall, Johannesburg, South Africa Annexures 28
Slide 29: South African properties
South African properties Portfolio Canal Walk and summary Canal Walk Offices Clearwater The Glen Woodlands CapeGate % Ownership 80% 100% 75.15% 100% 100% GLA 157 129 87 044 80 118 72 451 64 238 Vacancy levels 2.3% Canal Walk 1.5% 5.3% 1.4% 1.3% 27.4% Canal Walk Offices Total foot count (12 months) 1
Slide 30: South African properties
South African properties Portfolio Hyde Park Corner summary Somerset Mall Rosebank Precinct and offices % Ownership 100% 100% 100% GLA 68 848 91 046 38 828 Vacancy levels 0.1% 4.8% Rosebank Mall 5.5% Hyde Park Retail 17.9% Rosebank Offices 35.1% Hyde Park Office Total foot count (12 months) 8.3m 8.0
Slide 31: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA South Africa – at 30 June 2021 % of Total GLA 10% 8% 7.5% 7.5% 6% 7.0% 7.0% 7.0% 5.7% 5.5% 5.6% 4% 4.8% 3.9% 3.7% 4.0% 3.4% 3.6% 2% 3.0% 2.5% 2.5% 2.4% 2.1% 0.2% 0% Woolworths Pick ‘n pay Mass Mart Foschini Retailability Mr Price Pepkor Shoprite Nu Metro Truworths Group G
Slide 32: Operations
Operations South Africa – 12 months Historic statistics updated for most recent available information Trading density (R / m2 / month) Rent ratio – portfolio (%) 5 000 10.0% 4 000 9.8% 0.2% 0.6% 4.1% 2.5% 3 000 9.6% 0.1% 2 957 0.3% 9.6% 2 000 2 836 2 764 9.4% 9.5% 9.4% 1 000 9.2% 0 9.0% 2019 2020 20
Slide 33: Operations
Operations South Africa - 12 months ending 30 June 2021 Historic statistics updated for most recent available information Turnover (R’m) 20% Effort ratio (%) 7 000 16% 6 000 0.6% 0.1% 0.2% 5 000 0.1% 1.4% 12% 0.3% 0.0% 0.4% 4 000 0.7% 3 000 4.9% 3.1% 8% 0.1% 9.1% 2.5% 2 000 5.6% 3.6% 4% 1 000 0 0% C
Slide 34: Current projects
Current projects Woodlands, Project Completion date Cost/Budget Yield Status Pretoria • Checkers FreshX and STAX May 2021 R51 million 14.9% Complete Somerset Mall, Project Completion date Cost/Budget Yield Status Cape Town • Ceiling upgrade December 2021 R78 million n/a On track 6 Malls Project Comp
Slide 35: Centres with the future in mind
Centres with the future in mind Solar • 17 092 solar panels installed • 10 629 595 kWh hours generated • 5.44 % annual kWh saving • Eskom savings - 22 077 kl water saved Solar - 8 701 tons of coal saved The Glen • 16 023 annual CO2 emissions avoided resulting in - 96 021 trees saved 47 Propelair toi
Slide 36: Repositioning with the times
Repositioning with the times Tenant refurbishments/relocation Tasha’s LeParc (HPC) Dis-Chem, Woolworths, Game, Miladys (the Glen), Foschini, Sportscene, Tread + Miller, Superga, Diesel, Fabiani, @home (Canal Walk) Computer Mania Mega (Clearwater) Kingsley Heath (Somerset) Sorbet, Vets Mart (Woodland
Slide 37: Trading performance
Trading performance South African portfolio % of reported Trading density Primary category growth Total GLA turnover Department Stores: Clicks, Dis-Chem, Edgars, Game, Woolworths (2.9%) 26.1% 23.8% Apparel (0.4%) 18.3% 21.1% Food (0.9%) 13.3% 12.0% Speciality 1.2% 6.2% 7.9% Home Furnishings/Art/Anti
Slide 38: SA valuations bridge (R'm)
SA valuations bridge (R’m) 5.9% (1 461) 25 000 24 666 3% 8% 24 500 (208) 4% 10% 24 000 (250) 9% (130) 16% 2% (190) (157) 40 6% 8% 23 500 23 205 (276) (65) 23 000 (225) 22 500 22 000 20 lk r ll ds n er ate ury t 21 20 Wa ate Ma n Gle rn inc 20 e l arw t dla e Co pe G terb rec e Jun na rse oo Th k Ca
Slide 39: Eastern European properties
Eastern European properties Portfolio Delta City Delta City Skopje City Mall The Mall City Center One East City Center One West summary Belgrade, Serbia Podgorica, Skopje, Sofia, Bulgaria Zagreb, Croatia Zagreb, Croatia Montenegro North Macedonia % Ownership 60% 60% 60% 60% 60% 60% GLA 29 767 23 650
Slide 40: Top 10 tenant groups by GLA
Top 10 tenant groups by GLA Eastern Europe – at 30 June 2021 % of Total GLA 10% 9.7% 8% 9.1% 6% 5.5% 5.5% 4% 4.3% 4.3% 4.1% 4.1% 3.8% 3.8% 2% 2.9% 2.5% 2.5% 2.4% 2.1% 2.0% 2.0% 2.0% 1.8% 1.8% 0% Inditex Interspar Peek & Cineplexx H&M C&A Fashion Sportina Group New Yorker Müller Cloppenburg Company D
Slide 41: Operations
Operations Eastern Europe – 12 months Historic statistics updated for most recent available information Trading density (€ / m2 / month) Effort ratio – portfolio (%) 400 16% 12% 0.2% 0.1% 0.3% 300 3.9% 11.1% 8.0% 10.9% 10.8% 7.6% 8% 257 200 237 219 4% 100 0% 2019 2020 2021 2019 2020 2021 June June A
Slide 42: Operations
Operations Eastern Europe - 12 months ending 30 June 2021 Historic statistics updated for most recent available information Turnover (€’m) Effort ratio (%) 170 18% 0.1% 16% 0.6% 130 0.7% 14% 1.3% 18.6% 0.9% 12% 90 11.7% 0.1% 0.4% 0.3% 23.0% 10% 15.9% 8% 50 6% 10 4% City Centre City Centre Skopje Cit
Slide 43: Leasing activity
Leasing activity Eastern Europe Retail vacancy Lease expiry profile 2% FY 2025+ 50% 1.0% 2024/2025 20% 1% 2023/2024 14% 0.5% 0.3% 0.3% 2022/2023 14% 0.2% 2021/2022 2% 0% Jun 2017 Jun 2018 Jun 2019 Jun 2020 Jun 2021 0% 10% 20% 30% 40% 50% 60% New lettings and renewals Rental reversion Average lease %
Slide 44: Current and future projects
Current and future projects Future Mall Project Completion date Cost/Budget Yield Status Delta City Podgorica • Mall extension and constructing TBC TBC TBC Await Montenegro additional parking approval of (approximately 9 800m² GLA) the development rights City Center One East and • Mall extension and
Slide 45: Macroeconomic and retail environment
Macroeconomic and retail environment Real GDP - % change y/y CPI - % change y/y 100 4 - 100 3 - 200 - 300 2 - 400 - 500 - 600 1 - 700 - 800 Bulgaria Croatia Montenegro North Serbia Eurozone Europe Bulgaria Croatia Montenegro North Serbia Europe Eurozone European Macedonia Macedonia Union plus UK 202
Slide 46: Hystead Group
Hystead Group Pro-forma financial information Financial Position Profit and Loss 30 June 2021 30 June 2020 30 June 2021 30 June 2020 30 June 2021 30 June 2020 30 June 2021 30 June 2020 €’000 €’000 R’000 R’000 €’000 €’000 R’000 R’000 Revenue 83 340 77 368 1 532 068 1 339 717 Non-current assets 775 84
Slide 47: Lockdown and restrictions
Lockdown and restrictions Wearing of masks compulsory at all malls Second hard lockdown from 28 November 2020 up to 31 January 2021 – only essential stores allowed to trade (starting from 1 February the food court could operate for take-aways only without any seating areas allowed in the food court)
Slide 48: Lockdown and restrictions
Lockdown and restrictions Wearing of masks compulsory at all malls All restaurants, cafes and cinemas & casinos had to close for 2 weeks in February and could partially re-open from 15 February with delivery and pickups only with no seating allowed. As from 1 March 2021 restaurants may open for trad
Slide 49: Sub-Saharan Africa properties
Sub-Saharan Africa properties Portfolio summary Ikeja City Mall Accra Mall West Hills Mall Kumasi City Mall % Ownership 75.0% 23.5% 29.4% 49.0% GLA 22 223 21 311 28 272 18 534 Vacancy levels 0% 5.5% 29.3% 8.2% Total foot count (12 months) 6.7m 5.6m 4.3m 7.3m 49
Slide 50: Operations
Operations Sub-Saharan Africa – 12 months Historic statistics updated for most recent available information Trading density (Cedi / m2) Trading density (Cedi / m2 / month) 2 000 12.1% 1600 1400 15.4% 1 500 8.3% 30.6% 16.3% 23.0% 62.7% 21.1% 1200 11.0% 2.1% 10.2% 19.3% 23.9% 9.8% 1 252 0.7% 1000 1 00
Slide 51: Operations
Operations Sub-Saharan Africa – 12 months Historic statistics updated for most recent available information Spend per head (Cedi / m2 / Person) Monthly Footcount (millions) 35 3.5 12.5% 3.0 30 0.1% 31.86 2.7% 2.5 28.28 28.32 2.0 25 1.5 1.0 20 0.5 15 0.0 2019 2020 2021 Jul Aug Sep Oct Nov Dec Jan Feb
Slide 52: Operations
Operations Sub-Saharan Africa – 12 months ending 30 June 2021 Historic statistics updated for most recent available information Turnover ($m) Turnover (Cedi ‘m) 80 400 60 300 2.7% 1.9% 40 200 18.5% 9.2% 16.1% 3.5% 20 100 0 0 Accra Mall West Hills Mall Kumasi City Mall Accra Mall West Hills Mall Kuma
Slide 53: Currency and interest rate analysis
Currency and interest rate analysis Sub-Saharan Africa Cedi rental – June 2012 to June 2021 Cedi / USD 400 7.0 350 6.0 300 5.0 250 4.0 200 3.0 150 100 2.0 50 1.0 - - Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 J
Slide 54: Segmental performance
Segmental performance South Africa Eastern Europe Sub-Saharan Africa 30 June 2021 30 June 2020 30 June 2021 30 June 2020 30 June 2021 30 June 2020 R’000 R’000 R’000 R’000 R’000 R’000 Revenue 2 559 028 2 890 220 - - 222 311 212 122 Contractual and other revenue 2 822 113 3 006 718 - - 233 137 242 452
Slide 55: LTV calculations
LTV calculations 30 June 2021 (R’000) 30 June 2020 (R’000) HYPROP LTV SA REIT LTV HYPROP LTV SA REIT LTV Hyprop total asset 26 878 086 26 878 086 28 959 703 28 959 703 Less: Goodwill and intangible assets (20 133) (20 133) Financial asset (297 235) (532 972) Cash and cash equivalents (941 250) (941
Slide 56: Bank and DCM debt profile
Bank and DCM debt profile As at 30 June 2021 36.7% Standard Bank Group On balance sheet debt On balance sheet 39.9% ZAR bank facilities 46.9% RMB 46.9% by lender by currency USD bank facilities Nedbank ZAR DCM DCM 13.2% 13.2% 3.2% 23.6% 20.1% 25.3% Group Standard Bank Group Group ZAR bank facilities
Slide 57: Debt maturity profile
Debt maturity profile as at 30 June 2021 South African Debt (ZAR’m) June 2021 June 2020 2000 Property value (Rbn) 23.2bn 24.40bn 1500 500 925 LTV 20.4% 17.6% 1000 200 950 Weighted average cost of debt (incl. hedges) 7.8% 9.0% 400 450 452 959 Weighted average loan tenor (years) 1.8 2.5 500 317 500 34
Slide 58: Investment property and capital expenditure
Investment property and capital expenditure 30 June 2021 30 June 2020 South Africa R25.4bn (59%) R27.0bn (56%) Hyprop share R23.2bn R24.7bn 11% Exit cap rate range 6.8% - 9.3% 6.8% - 9.0% Weighted average exit cap rate 7.4% 7.4% Implied forward yield 7.6% 7.6% South Africa Eastern Europe R13.0bn (30
Slide 59: Equity bridge
Equity bridge Hyprop Group (R’m) 21 000 20 500 909 20 000 19 500 19 346 1 133 9 19 357 19 000 179 25 18 500 (1 587) (102) (236) (154) (165) 18 000 17 500 17 000 NAV Net Property Revaluation Other Non-controlling Tax FCTR Distributions Share issue Other NAV June 2020 income revaluation of Hystead imp
Slide 60: Disclaimer
• This document contains forward looking statements that, unless otherwise indicated, reflect the Group’s expectations as at 30 June 2021. Disclaimer • Actual results may differ materially from the Group’s expectations if known and unknown risks or uncertainties affect its business, or if estimates
Slide 61: Investor Relations
Investor Relations Lizelle du Toit +27 82 465 1244 / [email protected]