Hyprop Investments Limited · JSE:HYP
Hyprop Investments — FY2017 Earnings Presentation
28 slides from Hyprop Investments's earnings presentation, 2017
Slide 1: Summarised Consolidated Results for the Year Ended 30 June 2017
SUMMARISED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2017 STRATEGIC & OPERATIONAL OVERVIEW Hyde Park Corner (Gauteng) 2 1
Slide 2: Strategy and Financial highlights
Strategy Invested in South-Africa, sub-Saharan Africa and South-Eastern Europe Ownership in dominant shopping centres distinguished by quality and location Preferred shopping destination in high-density metropolitan areas or key cities Balanced tenant mix attractive to customers Continuously focus o
Slide 3: Distribution growth and Disposals
Distribution growth Cents per share 800 12,1% 14,2% 695 700 15,0% 620 600 543 500 14,9% 16,6% 8,0% 13,4% 400 13,7% 16,3% 347 348 322 280 298 300 263 200 100 0 2015 2016 2017 1st Half 2nd Half Total % growth 5 Disposals Sale of non-core assets Retail Price (Rm) Size (m²) Transfer date Somerset Value
Slide 4: South African property locations
OPERATING PERFORMANCE Rosebank Mall (Gauteng) 7 South African property locations Gauteng region Super regional mall Canal Walk (80%) Large regional malls CapeGate H Y D E P A R K Clearwater Rosebank Mall C O R N E R Somerset Mall The Glen (75,15%) Woodlands Western Cape region Regional mall Hyde Par
Slide 5: Performance and market conditions; Leasing activity
Performance and market conditions Retaining good rental growth in retail Retaining good escalations Rental arears remain low Vacancies still within market average Further slowdown in trading densities New retail trends Edcon H&M Canal Walk (Western Cape) 9 Leasing activity 30 June 2017 % of total Re
Slide 6: Lease expiry profile and Vacancies
Lease expiry profile 2017 / 2018 2018 / 2019 Expiring area % Rentable area Expiring area % Rentable area Retail (m²) of centre (m²) of centre Canal Walk 19 510 13 18 954 13 Somerset Mall 17 021 25 19 685 29 CapeGate 14 972 23 3 399 5 The Glen 12 582 17 5 659 8 Atterbury Value Centre 6 895 14 9 355 1
Slide 7: Trading performance
Comparison to IPD Trading Density Index March 2017 Trading density growth Rent to turnover ratio Hyprop IPD Hyprop IPD Super Regional 1,9% (4,6%) 9,3% 10,4% Canal Walk Regional Clearwater, Rosebank 2,3% 2,3% 7,9% 8,7% Mall, Somerset Mall, CapeGate, Woodlands, Hyde Park Corner Small Regional 9,7% 4,1
Slide 8: Sub-Saharan Africa property locations
INVESTMENT IN SUB-SAHARAN AFRICA (excluding SA) Kumasi City Mall (Accra, Ghana) 15 Sub-Saharan Africa property locations Hyprop ownership Accra, Ghana West Hills Mall 16,8% Accra Mall 17,6% Achimota Retail Centre 28,1% Nigeria Ghana Kumasi, Ghana Kumasi City Mall 28,1% Lagos, Nigeria Ikeja
Slide 9: Performance and market conditions; Income producing properties
Performance and market conditions Sub-Saharan Africa Improved macro economic conditions Zambia: stronger currency, improved copper prices and good rainfall Ghana: benefitted from recovery in commodities and industry Manda Hill Shopping Centre Nigeria: stronger oil prices and improved USD (Lusaka, Za
Slide 10: South-Eastern Europe property locations
INVESTMENT IN SOUTH- EASTERN EUROPE The Mall (Sofia, Bulgaria) 19 South-Eastern Europe Property locations Rentable Hyprop ownership (60%) area m² Macedonia, Skopje Skopje City Mall 37 479 Serbia Serbia, Belgrade Delta City Belgrade 29 879 Bulgaria Montenegro Montenegro, Podgorica Delta City Be
Slide 11: Performance and market conditions; Acquisition of The Mall
Performance and market conditions South-Eastern Europe Trading conditions and consumer spend positive Net income exceeded budget in first year No vacancies in portfolio Average trading density growth of 6% Average foot count growth of 6% Skopje City Mall (Macedonia) 21 Acquisition The Mall in Sofia
Slide 12: South-Eastern Europe strategy
South-Eastern Europe Strategy Potential expansion opportunities Internally managed: 80 people employed at regional and centre management Asset manager operational from August 2017 To expand management team further Working towards a listing to position for growth The Mall - Sofia (Bulgaria) 23 DEVELO
Slide 13: Rosebank Mall extension and Canal Walk
Rosebank Mall extension Extension of Rosebank Mall by 4 344m² rentable area Budget: R127 million Overall completion: April 2018 New tenants: H&M 2 814m² Sportmans Warehouse 1 092m² Ackermans 1 012m² Various line shops 25 Canal Walk La Piazza project Enclosure of the La Piazza open-air court adding 2
Slide 14: The Glen redevelopment; Hyprop sustainability
The Glen foodcourt redevelopment Enclosure of foodcourt to create contemporary retail / leisure offering: 1 069m² additional rentable area Budget: R90,9 million Overall completion: April 2018 New tenants: PEP 500m² Mugg & Bean 338m² Ocean Basket 307m² Toys R Us 874m² Exclusive Books 201m² Various li
Slide 15: Sustainability (continued); The Rosebank node
HYPROP sustainability (continued) Roof paint projects Undertaken at Woodlands and Atterbury Value Mart Reduction in solar heat gain, 30% less reliance on air-conditioning Water attenuation The Glen: attenuation of ground and storm-water for use in toilets and urinals CapeGate: options are being expl
Slide 16: The Somerset Mall node
The Somerset Mall node Developments in process: Paardevlei: Residential, offices, retail (approx. 100 000m²) Planned development: Expansion of Somerset Mall, 37 000m² City of Cape Town; Phase-1, 100-hectare semi-low cost housing (20-year development) Phase-2 to follow 31 FINANCIAL RESULTS Some
Slide 17: Distributable earnings; Reconciliation to dividend declared
Distributable earnings 30 Jun 2017 30 Jun 2016 % (R’000) (R’000) Change South African property portfolio 1 916 927 1 848 151 3,7% - Continuing operations 1 880 595 1 773 186 6,1% - Properties sold 36 332 74 965 (51,5%) Investments in sub-Saharan Africa (excl. SA) 56 972 83 654 (31,9%) Investments in
Slide 18: See-through Balance Sheet; Investment profile
See-through Balance Sheet 30 Jun 2017 30 Jun 2016 % Change (Rm) (Rm) Hyprop’s share Investment property (South Africa) 27 860 26 502 5,1% Investments in sub-Saharan Africa 4 482 5 061 (11,4%) (excluding South Africa) South-Eastern Europe 2 681 2 029 32,2% Held-for-sale 427 1 244 Other assets (includ
Slide 19: Property valuations
Property valuations South African portfolio Rentable Hyprop % change area share (from Value Cap rate Category (m²) (Rm) Jun 2016) (R/m2) (%) Shopping centres 644 196 26 491 4,8% 45 181 6,3 – 7,0 Value centres* 66 395 1 473 11,5% 22 186 7,8 Stand-alone offices 20 328 311 7,5% 15 289 8,3 Total 730 918
Slide 20: Property valuations; Debt management
Property valuations South-Eastern Europe 30 June 2017 30 June 2016 EUR million EUR million Total value 300 206 Hyprop share 180 124 Rentable Cap rate area (m²) Value / m² (%) 91 076 EUR 3 293 8,25 – 9,25 39 Effective Debt management 30 Jun 2017 30 Jun 2016 (Rm) (Rm) South African debt 4 114 4 632
Slide 21: Sources of funding; Debt maturities
Sources of funding R million 1 814 16% 30 Jun 2017 Bank facilities (SA) 30 Jun 2016 2 992 27% % of total debt 2 300 21% DCM funding (SA) 1 640 15% USD debt 4 391 39% (Rand equivalent) 4 842 44% EUR debt 2 673 24% (Rand equivalent) 1 510 14% 0 1000 2000 3000 4000 5000 41 Debt maturities 30 Jun 2017 3
Slide 22: Debt at fixed rates; Low average cost of funding
Debt at fixed rates* 30 Jun 2017 30 Jun 2016 (%) (%) South African debt 100,9 89,6 USD debt 70,4 72,4 * EUR debt not fixed 43 Low average cost of funding 30 Jun 2017 30 Jun 2016 (%) (%) Weighted average cost of funding 5,7 6,0 South African debt 8,9 8,9 USD debt 4,7 4,6 EUR debt 2,2 1,7 44
Slide 23: Outlook & focus
OUTLOOK & FOCUS Canal Walk (Western Cape) 45 Outlook & focus South Africa Adapt to market changes and attract quality tenants Complete refurbishments and extensions Disposal of non-core asset Sub-Saharan Africa More involved on an operational level Simplify corporate structures Improve income and ca
Slide 24: Company structure
APPENDICES Delta City (Belgrade, Serbia) 47 Company structure South African portfolio Clearwater Mall Somerset Mall Hyde Park Corner Rosebank Mall Woodlands Boulevard CapeGate 100% owned Offices Atterbury Value Mart Cradock Heights SOUTH AFRICA Canal Walk (80%) The Glen (75,15%) Co-owned Offices: La
Slide 25: Company structure: Sub-Saharan Africa and South-Eastern Europe
Company structure Sub–Sahara African portfolio Hyprop Investments Mauritius 37,5% 50% 75% AttAfrica 50% Manda Hill Ikeja City Mall SUB- SAHARAN (Mauritius) (Zambia) (Nigeria) 100% owned AFRICA 47% 45% 75% 75% West Hills Achimota Retail Kumasi City Accra Mall Mall Centre Mall (Ghana) (Ghana) (Ghana)
Slide 26: Credible track record; % Gross rent to turnover
Credible track record Rbn LTV % 36 60% Investment property 33,4 33,3 32 31,6 Market cap 28,6 29,4 29,0 28 26,4 LTV % 45% 24 20,2 19,3 20 18,7 17,7 19,0 17,4 26,2% 30% 16 30,8% 12,9 28,9% 26,6% 12 23,1% 22,9% 23,1% 8 15% 4 0 0% Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016 Jun 2017 51 % Gross
Slide 27: Trading density; Top 8 SA properties
Trading density Per month (R/m²) 5 000 4 500 1% Average portfolio growth: +1,4% (2016: +5,0%) 4 000 4 124 2% 3 500 1% 3 454 3 302 5% 1% 3 000 1% 2 928 2 912 6% 1% 2 500 2 692 5% 2 582 2 571 6% 2 277 2 194 2 000 1 500 1 000 500 0 Hyde Park Canal Walk Somerset Mall Willow Bridge Clearwater Mall Roseba
Slide 28: Top 8 SA properties (cont.); Disclaimer
Top 8 SA properties (cont.) The Glen Somerset Mall (75,15% undivided share) Hyde Park Corner CapeGate Region Cape Town Region Johannesburg Region Johannesburg Region Cape Town Total rentable Total rentable Total rentable Total rentable 69 035 74 769 39 093 63 767 area (m²) area (m²) area (m²) area (