Redefine Properties Limited · JSE:RDF
Redefine Properties — H1 2012 Earnings Presentation
58 slides from Redefine Properties's earnings presentation, April 2012
Slide 1: Interim results for the six months ended 29 February 2012
Interim results For the six months ended 29 February 2012 INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 1
Slide 2: Agenda
AGENDA Company Overview and Strategy Financial results Property portfolio Redefine International Prospects COMPANY OVERVIEW Marc Wainer (CEO) AND STRATEGY FINANCIAL RESULTS Andrew Konig (FD) PROPERTY PORTFOLIO David Rice (COO) REDEFINE INTERNATIONAL Marc Wainer (CEO) PROSPECTS Marc Wainer (CEO) 2
Slide 3: Company Overview and Strategy
COMPANY OVERVIEW AND STRATEGY Marc Wainer (CEO) INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 3
Slide 4: Profile
PROFILE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Redefine Properties Limited is a listed property loan stock company with a diverse range of property assets exceeding R37 billion Company name : Redefine Properties Limited Share code : RDF Bo
Slide 5: Second largest in the sector
SECOND LARGEST IN THE SECTOR Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Market Cap Portfolio Value Forward Top 10 Index Counters (R’m) (R’m) Yield 35,559 50,192 7.1% 22,140 37,296 8.1% 14,656 17,948 7.8% 13,918 19,810 7.1% 10,801 11,996 6.8% 8
Slide 6: Corporate structure
CORPORATE STRUCTURE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Redefine Properties Limited 100% 55% 76% Listed Securities Redefine Properties Redefine Direct Property Hyprop 31% International International Fund Portfolio Oryx 26% Limited Manag
Slide 7: Investments
INVESTMENTS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects ▲ Total assets under management valued at R37,3 billion: 5% ► Direct property portfolio of R19,8 billion 30% ► Listed property securities of R4,7 billion 53% ► Geographic diversification w
Slide 8: Strategy and objectives for first six months
STRATEGY AND OBJECTIVES FOR FIRST SIX MONTHS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Commenced In progress Complete Secure long term growth and capital appreciation prospects -Continuous improvement in the quality of core property portfolio
Slide 9: Fountainhead acquisition ticks all the boxes – a catalyst for a re-rating
FOUNTAINHEAD ACQUISITION TICKS ALL THE BOXES – A CATALYST FOR A RE-RATING Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Strategic Objective Outcome of the FPT transaction Secure long term growth and capital appreciation • The rationalisation of R
Slide 10: Improving the quality of the portfolio: Gauteng – Pepkor
IMPROVING THE QUALITY OF THE PORTFOLIO: GAUTENG Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Pepkor Distribution Warehouse phase 2 Before After “One of the biggest developments that we have been involved in, with the least hiccups” – Marius Bark
Slide 11: Improving the quality of the portfolio: Gauteng – Scania Aeroton
IMPROVING THE QUALITY OF THE PORTFOLIO: GAUTENG Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Scania Aeroton Before After 11
Slide 12: Improving the quality of the portfolio: Park Meadows
IMPROVING THE QUALITY OF THE PORTFOLIO: GAUTENG Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Park Meadows - The Food Lover’s Market Before After “We thank all Redefine staff for their complete participation with us in bringing this excellent sit
Slide 13: Improving the quality of the portfolio: Grayston
IMPROVING THE QUALITY OF THE PORTFOLIO: GAUTENG Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 90 Grayston Before After 13
Slide 14: Improving the quality of the portfolio: Rivonia
IMPROVING THE QUALITY OF THE PORTFOLIO: GAUTENG Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 90 Rivonia Before After 14
Slide 15: Improving the quality of the portfolio: Essex Gardens
IMPROVING THE QUALITY OF THE PORTFOLIO: KZN Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Essex Gardens Before After 15
Slide 16: Improving the quality of the portfolio: Maynard Mall
IMPROVING THE QUALITY OF THE PORTFOLIO: WESTERN CAPE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Maynard Mall Before After 16
Slide 17: Improving the quality of the portfolio: Shoprite Parow
IMPROVING THE QUALITY OF THE PORTFOLIO: WESTERN CAPE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Shoprite Parow Before After 17
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS Andrew Konig (FD) INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 18
Slide 19: 2012 Financial highlights
2012 FINANCIAL HIGHLIGHTS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects ▲ Half year distribution of 31.5 cents per unit ► Core income up 6.6% on prior period on a comparable recurring income basis ▲ Total tangible assets of R40 billion ▲ Market c
Slide 20: Distributions
DISTRIBUTIONS FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Distributable Income Per linked unit (R’m) Cents H1 2011 actual 832 31.0 Less: 2011 non-recurring (1) (0.1) Less: 2011 Arrowhead contribution (53) (
Slide 21: Distributable income statement extract
DISTRIBUTABLE INCOME STATEMENT EXTRACT FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 2012 2011 Change (R’m) (R‟m) % Net operating income from investment properties 934 954 (2.0) Listed securities portfolio 18
Slide 22: Analysis of income from investment properties
ANALYSIS OF INCOME FROM INVESTMENT PROPERTIES FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 2012 2011 Change (R’m) (R‟m) % Core property revenue 1 055 983 7.3 Core property costs (253) (245) 3.3 Property inco
Slide 23: Core property trading performance
CORE PROPERTY TRADING PERFORMANCE FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects To highlight the causes of the year-on-year margin increase, every R100 of property revenue converts into property income as fol
Slide 24: Core property expenditure analysis
CORE PROPERTY EXPENDITURE ANALYSIS FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects The local property cost push on the prior year can be summarised as follows: 2012 2011 Change (R’m) (R‟m) % Municipal charges n
Slide 25: Balance sheet extract
BALANCE SHEET EXTRACT AT 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Local International 29 February 2012 31 August 2011 (R’m) (R’m) (R’m) (R‟m) Direct and listed assets 24 678 12 591 37 269 37 364 Property portfolio* 19 752 11
Slide 26: Listed securities
LISTED SECURITIES AT 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 29 February 2012 31 August 2011 Value Interest held Value Interest held (R’m) (%) (R‟m) (%) Listed securities Hyprop 4 183 31.2 4 122 31.2 Oryx 183 26.4 156 26.4
Slide 27: Funding
FUNDING AT 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 29 February 2012 31 August 2011 (R’m) (R‟m) Fixed 5 940 5 440 Floating 2 352 1 873 Borrowings in JVs 80 75 Local debt (average term 32 months) 8 372 7 388 Non-recourse inte
Slide 28: Abridged group cashflow
ABRIDGED GROUP CASHFLOW FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Local International 29 February 2012 31 August 2011 (R’m) (R’m) (R’m) (R‟m) Opening cash 18 642 660 607 Generated by operations 1 158 239
Slide 29: Unitholder profile
UNITHOLDER PROFILE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Top 10 beneficial shareholders Number of units % STANLIB 164 832 613 6.1 Government Employees Pension Fund 151 812 016 5.6 Old Mutual 151 612 528 5.6 Investec 123 947 446 4.6 Invest
Slide 30: Liquidity
LIQUIDITY Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 12.9% 7.1% Strategic holders Free Float Below 200 000 units 80.0% 30
Slide 31: Country classification
COUNTRY CLASSIFICATION Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Beneficial shareholders South Africa USA Singapore USA 6.0% UAE Namibia China Switzerland UK Ireland Canada Luxembourg Swaziland Netherlands Israel Australia Germany Channel Isl
Slide 32: Redefine closing prices and volumes traded
REDEFINE CLOSING PRICES AND VOLUMES TRADED Company Overview and Strategy Financial results Property portfolio Redefine International Prospects 840 25000000 820 20000000 800 780 15000000 760 10000000 740 720 5000000 700 680 0 2011/09/01 2011/10/01 2011/11/01 2011/12/01 2012/01/01 2012/02/01 Volumes C
Slide 33: Total return
TOTAL RETURN FOR THE PERIOD ENDED 29 FEBRUARY 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Cents per unit Opening price 1 March 2011 735.0 Closing prices 29 February 2012 820.1 - Redefine 785.0 - Arrowhead A + B * 35.1 Increase in prices 85
Slide 34: Property Portfolio
PROPERTY PORTFOLIO David Rice (COO) INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 34
Slide 35: South African property portfolio
SOUTH AFRICAN PROPERTY PORTFOLIO Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Description Office Retail Industrial Total Asset value (R‟b) † 9.4 6.8 2.7 18.9 Valuation per m² excluding undeveloped bulk 8 338 7 453 2 827 6 324 Average property va
Slide 36: Top 10 properties by value
TOP 10 PROPERTIES BY VALUE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Standard Bank Sammy Marks Property Name Golden Walk 155 West Street Thibault Square Centre Shopping Centre Sub-region name Germiston Sandton Cape Town CBD Pretoria CBD Cape
Slide 37: Top 10 properties by value
TOP 10 PROPERTIES BY VALUE Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Cleary Park Property Name Convention Tower Commerce Square Park Meadows Poyntons Shopping Centre Cape Town, Sub-region Name Eastern Cape Sandton Kensington Pretoria CBD Fore
Slide 38: Multi and single tenanted properties
MULTI AND SINGLE TENANTED PROPERTIES Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Number of Value % of property GLA m2 properties R'000 count Multi tenanted properties 167 2 086 689 13 276 370 Office 71 828 162 5 887 702 29 Retail 72 778 540 6 1
Slide 39: Portfolio sectoral spread
PORTFOLIO SECTORAL SPREAD Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Value Number of GLA GLA (R‟000) properties (m2) (%) Office 9 351 279 101 1 121 530 37 Retail 6 895 040 89 925 161 31 Industrial 2 659 701 53 944 855 32 Total 18 906 020 243 2
Slide 40: Portfolio geographical spread
PORTFOLIO GEOGRAPHICAL SPREAD Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Value Number of GLA GLA (R‟000) properties (m2) (%) Gauteng 11 842 946 144 1 807 581 60 Western Cape 3 544 272 35 488 211 16 KwaZulu-Natal 1 526 145 38 350 784 12 Other 1
Slide 41: Sector vacancy by region
SECTOR VACANCY BY REGION Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Office Retail Industrial Total Province (m2) (m2) (m2) (m2) Western & Eastern Cape 9 513 7 095 3 385 19 993 Gauteng 52 381 25 978 62 357 140 716 KwaZulu-Natal 13 795 2 810 194
Slide 42: Gross lettable area and vacancy movement
GROSS LETTABLE AREA AND VACANCY MOVEMENT Company Overview and Strategy Financial results Property portfolio Redefine International Prospects GLA Vacant area Vacancy Office Retail Industrial (m²) (m²) (%) As at 31 Aug 2011 1 329 263 1 064 191 1 125 318 3 518 772 296 188 8.4 Unlettable buildings “ (55
Slide 43: Letting activity for 6 months
LETTING ACTIVITY FOR 6 MONTHS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Ave Portfolio Rental Renewals * New Leases Vacates R/m² Area Ave expiry Ave rental Renewal Area Ave rental Area Loss of Area Ave renewed rental achieved growth let achiev
Slide 44: Major leases under negotiation
MAJOR LEASES UNDER NEGOTIATION Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Lease/ Occupied area Expiry gross rental Property Name Sector Region Lessee expiry date (m2) (R) 21 Wrench Road Industrial Gauteng Unitrans Supply Chain Solutions 2012/0
Slide 45: Major lease renewals
MAJOR LEASE RENEWALS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Lease expiry Occupied area Expired rental Renewed rental Property Name Sector Region Lessee date (m2) (R) (R) Poyntons Office Gauteng The Government of SA Monthly 24 627 1 486 346
Slide 46: Lease expiry profile by let area
LEASE EXPIRY PROFILE BY LET AREA Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Office Retail Industrial Total (m2) (m2) (m2) (m2) Monthly 113 268 9 807 35 936 159 011 2012 61 311 77 215 52 272 190 798 2013 280 313 199 459 283 376 763 148 2014 135
Slide 47: Acquisitions
ACQUISITIONS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects GLA Purchase price Initial yield Price Property Location Sector (m²) (R‟m) % R/m² 155 West Street (Discovery) Sandton Office 24 501 510 8.0 21 041 GM-Coega Eastern Cape Industrial 38 000
Slide 48: Acquisitions post Feb 2012
ACQUISITIONS POST FEB 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Property Province Sector Date / Expected of GLA Purchase Yield Purchase Transfer (m2) Price (%) Price (R’m) (R/m2) Cadbury South Africa (Pty) Ltd Gauteng Industrial 29-Mar-1
Slide 49: Disposals
DISPOSALS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Office Retail Industrial Total Number of properties 34 46 24 104 Gross lettable area $ 167 719 178 390 140 205 486 314 Vacancy (m²) 31 198 24 697 10 328 66 223 Selling price (R‟m) 826 810 34
Slide 50: Disposals post Feb 2012
DISPOSALS POST FEB 2012 Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Date / Expected of GLA Selling Price Yield Selling Price Property Province Sector Transfer (m2) (R’m) (%) (R/m2) Shoprite Eloff Street Gauteng Office/Retail 12-Apr-12 34 224 36
Slide 51: Current developments
CURRENT DEVELOPMENTS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Projected Initial Projected total cost Yield Completion Property Location Description (R‟m) (%) Date Gauteng Pepkor Phase 2 Gauteng Additional 66,475m2 305 9 Apr 2012 Scania Aerot
Slide 52: Future developments
FUTURE DEVELOPMENTS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Projected Projected Property Location Description total cost (R‟m) completion date 90 Rivonia Rd, Sandown Gauteng New Build 32,000m2 700 Dec 2014 Sturdee Ave, Rosebank Gauteng New
Slide 53: Completed developments
COMPLETED DEVELOPMENTS Company Overview and Strategy Financial results Property portfolio Redefine International Prospects Initial Total cost Yield Completion Property Location Description (R‟m) (%) Date Gauteng Park Meadows Gauteng Food Lovers Market and Mall Upgrade 32 7 Apr 2012 64 Mimetes Rd Gau
Slide 54: Redefine International
REDEFINE INTERNATIONAL Marc Wainer (CEO) INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 54
Slide 55: Redefine Properties International
REDEFINE PROPERTIES INTERNATIONAL Company Overview and Strategy Financial results Property portfolio Redefine International Prospects ▲ Strong performance from Cromwell and the Hotel portfolio, justifying the Group‟s diversification strategy ▲ Secure cash flows delivered from the UK Stable Income an
Slide 56: Prospects
PROSPECTS Marc Wainer (CEO) GROUP INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 56
Slide 57: Prospects: Redefine's distribution
PROSPECTS REDEFINE‟S DISTRIBUTION Company Overview and Strategy Financial results Property portfolio Redefine International Prospects ▲ Strict focus on cost containment and sweating the assets ▲ Core property portfolio is anticipated to continue to achieve growth ▲ Full year distribution expected to
Slide 58: Questions?
QUESTIONS? INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2012 58