Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — H1 2023 Earnings Presentation
25 slides from Vukile Property Fund's earnings presentation, September 2022
Slide 1: FY2023 Interim Period Pre-Close Presentation
FY2023 INTERIM PERIOD PRE-CLOSE PRESENTATION September 2022 (Some photographs used in this presentation may have been taken prior to the COVID-19 pandemic and resultant health and safety requirements)
Slide 2: Agenda
AGENDA 1 INTRODUCTION Laurence Rapp 2 SOUTH AFRICAN PORTFOLIO Itumeleng Mothibeli 3 CASTELLANA PROPERTIES PORTFOLIO Alfonso Brunet 4 FINANCE AND TREASURY Laurence Cohen 5 GUIDANCE Laurence Rapp Q&A 2
Slide 3: Introduction
1 INTRODUCTION Laurence Rapp 3
Slide 4: Introduction
1 INTRODUCTION Continued strong performance in South Africa with further improvement in all metrics relative to pre- COVID as well as FY22 performance Castellana continues to deliver market-leading performance across all key operating measures Balance sheet remains strong with a defensive position g
Slide 5: South African Portfolio
2 SOUTH AFRICAN PORTFOLIO Itumeleng Mothibeli 5
Slide 6: Retail Portfolio Performance and Trading Environment
RETAIL PORTFOLIO PERFORMANCE AND TRADING ENVIRONMENT CONTINUED STRONG OPERATING METRICS AUG MAR SEP AUG MAR SEP Portfolio trading metrics showing continued improvement when compared to 2022 2022 2021 2022 2022 2021 pre-Covid environment as well as FY22 Portfolio efficiency measures of trading statis
Slide 7: Strong Leasing Activity Across All Segments
RETAIL PORTFOLIO PERFORMANCE AND TRADING ENVIRONMENT STRONG LEASING ACTIVITY ACROSS ALL SEGMENTS VACANCIES Vacancies reduced by c. 4 300m² from 2.6% to 2.3% - lowest since listing in 2004 Reduced vacancies in Commuter (4.7% to 3.4%) and Urban (2.9% to 2.1%) segments Sporting and athleisure expanded
Slide 8: Improved Footfall and Sales
RETAIL PORTFOLIO PERFORMANCE AND TRADING ENVIRONMENT IMPROVED FOOTFALL AND SALES Sales continue to show growth when compared to previous period All four months to July were ahead in overall sales Sales 108.4% Average growth across the portfolio up by 8.4% Footfall Groceries (116%), Fashion (126%) 11
Slide 9: Strong Performance Across Categories
RETAIL PORTFOLIO PERFORMANCE AND TRADING ENVIRONMENT STRONG PERFORMANCE ACROSS CATEGORIES TRADING DENSITIES AND ANNUAL TURNOVER GROWING AT 7.3% Bottle Stores Fashion and grocery categories (44% of GLA), Density 29.7% Turnover 35.6% delivered improved trading density growth of Restaurants & 7.7% (FY2
Slide 10: Utility Management
UTILITY MANAGEMENT CONTINUE TO ACTIVELY MANAGE UTILITY SUPPLY RISKS Utility supply a significant challenge across the portfolio Had 69 days of loadshedding as per 19 September, with the greatest severity in GwH shed in the past 5 years Diesel budget for FY23 depleted in first 4 months of the financi
Slide 11: Disposals Update
DISPOSALS UPDATE Sales Sector price Yield [R’m] Total 279.4 10.5% Monsterlus Moratiwa Crossing (94.50%) Retail 165.0 10.0% Transferred 19 September 2022 Transferred Mbombela Truworths Retail 23.4 11.5% Transferred 18 May 2022 Midrand Allandale Industrial Park Industrial 91.0 11.3% Transferred 22 Sep
Slide 12: Acquisitions Update
ACQUISITIONS UPDATE PROPOSED ACQUISITION OF TWO STRONG RETAIL SHOPPING CENTRES IN SOUTH AFRICA ∕ Pan Africa Shopping Centre located in Alexandra, Johannesburg ∕ Entered into formal agreements with Pan Africa Development Company on 28 July 2022 ∕ Purchase price agreed of c.R421 million for phase 1 an
Slide 13: Castellana Properties Portfolio
3 CASTELLANA PROPERTIES PORTFOLIO Alfonso Brunet 13
Slide 14: Footfall and Sales Index
FOOTFALL AND SALES INDEX OUR ACTIVE ASSET MANAGEMENT INITIATIVES ARE REFLECTED IN THE ∕ Footfall: during the 1st half of the year has varied by asset, but POSITIVE PERFORMANCE VS THE BENCHMARK remained close to or above 2019. Portfolio is at 96.6% YTD (Year To Date) in August 2022 versus August 2019
Slide 15: Sales Detail
SALES DETAIL SALES YTD AUG’22 VS YTD AUG’19 ∕ Total YTD AUG’22 portfolio variation vs YTD AUG’19: +11.1% 80.0% ∕ DIY (Leroy Merlin and Bricomart) and Pets (Kiwoko and Tienda 69.9% Animal) account for 27% of total sales (YTD AUG’22) 60.0% 59.8% ∕ More than 50% of the retail categories are performing
Slide 16: Operating Activity
OPERATING ACTIVITY OCCUPANCY RATE 98.4% (2) KEEPING UP THE PACE IN CLOSING NEW AGREEMENTS AND RENEWALS KEY KPI´S YTD 31st August 2022 96 €4.1m OCCUPANCY 31 AUGUST LEASES SIGNED NEW RENT SIGNED 2022 98.4% 31 AUGUST 2021 97.1% 48 48 €2.3m €1.8m RENEWALS NEW CONTRACTS RENEWALS NEW CONTRACTS RENT ARREAR
Slide 17: CPI Indexation Environment
CPI INDEXATION ENVIRONMENT ALL CASTELLANA LEASES ARE INDEXED TO CPI YOY VARIATION IN ∕ CPI in Spain is currently at its highest level seen since 1984 EVERY ANNIVERSARY OF THE LEASE ∕ As per Castellana´s existing lease agreements, the landlord is entitled to increase rental by CPI for close to 100% o
Slide 18: Trading Environment
TRADING ENVIRONMENT ∕ The Castellana portfolio continues to exhibit a strong trading performance, with high occupancy, minimal arrears, demand for space from retailers and robust footfall and sales across all assets ∕ Leading brands remain eager to expand despite anticipated slowdown. Large retailer
Slide 19: Investment in Lar España
INVESTMENT IN LAR ESPAÑA ∕ Lar España continues to perform well as a financial investment ∕ Key property metrics reported by the company in H1 2022 point to a strong recovery in trading similar to what we see in our own portfolio ∕ We strongly believe the current share price does not reflect the str
Slide 20: Castellana Properties Recognition
CASTELLANA PROPERTIES RECOGNITION ∕ Castellana Properties consolidates its leading market position at Europe’s most prestigious real estate awards ∕ The company obtained the top award in both the category recognising accuracy and transparency in financial reporting (BPR) and in the sustainability be
Slide 21: Financial and Treasury
4 FINANCIAL AND TREASURY Laurence Cohen 21
Slide 22: Debt and Treasury Update
DEBT AND TREASURY UPDATE STRONG BALANCE SHEET METRICS RECOGNISED BY DEBT CAPITAL MARKET AND CREDIT RATING UPGRADE ∕ Balance sheet metrics largely in line with 31 March 2022: ∕ Group LTV anticipated to be c.44% and Group ICR at c.3 times ∕ 87% of Group and 76% of South African interest-bearing debt h
Slide 23: Guidance
GUIDANCE Laurence Rapp _— VUKILE PROPERTY FUND REAL ESTATE. REAL GROWTH.
Slide 24: Update to Guidance
UPDATE TO GUIDANCE ∕ At FY22 results we guided: ∕ an FFO growth of between 5% to 7% to 143.1 to 145.8 cps ∕ Dividend growth of 5% to 7% to 111 cps – 113 cps ∕ Dividend pay-out ratio c.77% with no tax leakage ∕ We are very encouraged by our strong H1 trading performance but equally remain concerned a
Slide 25: Questions Answers
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