ANNUAL RESULTS PRESENTATION - Growthpoint Documents/FY17 Results Presentati… · ANNUAL RESULTS...
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ANNUAL RESULTS PRESENTATIONFOR THE YEAR ENDED 30 JUNE 2017
2
AGENDA
01 Milestones & Highlights
02 Financial Results
03 Capital Management
04 Portfolio Update
05 Property Investment & Development
06 Conclusion
07 Annexures
South Africa
V&A Waterfront
GOZ
Globalworth
Oxford Corner, Rosebank
MILESTONES & HIGHLIGHTS
M1 Place, Eastgate, Sandton
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MILESTONES
South Africa
▪ Gross monthly billings in excess of R1bn
▪ Sale of Harrowdene to Huawei for R846m
▪ First Trading Profit and Development Fee
income earned
▪ 1 399 222m² of space let in FY17
V&A Waterfront
▪ Completion of Silo
Precinct scheduled for
September when the
Zeitz MOCAA and
Radisson Red Hotel opens
▪ Good progress implementing strategic
initiatives, including Internationalisation,
Funds Management and Trading and
Development
5
Australia
▪ Successful acquisition of AUD440.3m GPT Metro Office Fund (GMF)
▪ Significant portfolio reweighting through AUD480m office asset
purchases and AUD166m strategic industrial asset sales:
- Office 66% vs. 56% at FY16
- Geographically to New South Wales 26% from 20% at FY16
Funds management
▪ R2.3bn Healthcare Fund established with 5
assets
▪ Capital raise to third parties scheduled for
HY18
▪ Further acquisitions and developments in the
pipeline
Eastern Europe
▪ Successful EUR186.4m
acquisition of 26.9% of
Globalworth Real Estate
Investments (GWI)
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Delivering on our strategic initiatives
in line with our vision:
To be a
leading international property company providing space to thrive
Open JV (50/50)
▪ Strategic venture aligning ourselves
with the co-working, flexible office trend
▪ Anticipated rollout of 8 locations in
3 years, with 138 West Street Sandton
just opened
▪ Open will operate the sites and GRT will
provide the funding
▪ Incubator for thriving businesses and
tomorrows office users
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PERFORMANCE
HIGHLIGHTS
195.8 cents
▪ 6.5% growth in total FY17 dividend per share
▪ Final dividend of 100.8c up 6.9% compared to FY16
final dividend of 94.3c
R5.6bn
▪ Total distributable income
▪ 10.4% growth FY16 to FY17
R122.3bn
▪ Group property assets
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35.0% Group LTV
▪ Gearing remains below 40%
▪ Increased from 33.7% at FY16
27.1%
▪ RSA total expense
to income ratio
▪ Expenses under control
Total RSA arrears – R60.4m
▪ Well contained
▪ 6.5% of collectables
▪ R13.2m bad debt write
off (I/S)
Vacancies – 4.4%
▪ RSA vacancies improved from
5.7% at FY16
▪ Strong focus on tenant retention
and leasing
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COMPANY
HIGHLIGHTS
▪ Largest South African primary listed REIT
▪ 21st largest company in the FTSE/JSE Top 40 Index
▪ Gross market capitalisation R70.7bn
▪ Liquid and tradeable:
- R3.8bn average value of shares traded per month
▪ 8th year inclusion in FTSE/JSE Responsible Index
▪ 1st year inclusion in the FTSE4Good Emerging Index
▪ Top 10 constituent of FTSE EPRA/NAREIT Emerging Index
Investment proposition
▪ Sustainable quality of earnings
▪ 14 year track record of uninterrupted
dividend growth
▪ Underpinned by high-quality physical
property assets
▪ Diversified across international geographies
and sectors
▪ Dynamic and proven management track record
▪ Best practice corporate governance
▪ Transparent reporting
▪ Level 3 BEE contributor
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72.7 78.5 84.4 89.5 95.0
44.576.382.8
44.5
94.3100.8
FY13 FY14 FY15 FY16 FY17
Interim dividend Special dividend Final dividend
GROWTH IN DIVIDEND PER SHARE (cents)
183.8
149.0161.3
173.4
195.8
Growth
6.5%8.3% 7.5% 6.0% 6.5%
The Place, Sandhurst, Sandton
11
0
500
1 000
1 500
2 000
2 500
3 000
0
15
30
45
60
75
90
105
120
135
FY11 FY12 FY13 FY14 FY15 FY16 FY17
GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION
Rbn cents
3 000
2 500
2 000
1 500
1 000
500
0
2 510c2 448c
Tangible assets (Rbn) Market cap (Rbn) Share price (cents) NTAV per share (cents)
12
4%
5%
6%
7%
8%
9%
10%
11%
2012/01/12 2012/07/12 2013/01/12 2013/07/12 2014/01/12 2014/07/12 2015/01/12 2015/07/12 2016/01/12 2016/07/12 2017/01/12
Long Bond GRT Forward Yield
8.80%
LONG BOND YIELD VS. GRT FORWARD YIELD
Jun
2011
Dec
2011
Jun
2012
Dec
2012
Jun
2013
Dec
2013
Jun
2014
Dec
2014
Jun
2015
Dec
2015
Jun
2016
Dec
2016
8.18%
Greencourt “A” & “B”, Bucharest, RomaniaJun
2017
FINANCIAL RESULTS
Waterway House, V&A Waterfront
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FY17Rm
FY16Rm
INCREASE/ (DECREASE)
Gross property income 10 716 9 764 9.8%
RSA(1) 8 079 7 589 6.5%
GOZ 2 637 2 175 21.2%
Property expenses (2 245) (2 126) 5.6%
RSA (1 901) (1 864) 2.0%
GOZ (344) (262) 31.3%
Net property income 8 471 7 638 10.9%
Other operating expenses (416) (308) 35.1%
RSA (289) (204) 41.7%
GOZ (127) (104) 22.1%
Net property income after operating expenses 8 055 7 330 9.9%
Finance costs (2 510) (2 466) 1.8%
RSA (1 944) (1 989) (2.3%)
GOZ (566) (477) 18.7%
Finance income 789 760 3.8%
Investment income from V&A Waterfront 479 429 11.7%
Investment income from GWI 78 - 100%
Other finance income(2) 232 331 (29.9%)
Adjustment for NCI, foreign exchange profit /(loss) and normal taxation (734) (552) 33.0%
Distributable income 5 600 5 072 10.4%
Dividend for the period 5 600 5 072 10.4%
CONSOLIDATED DISTRIBUTION CALCULATION
1. Trading Profits and Development Fees of R91m included in revenue.
2. Includes R52m (FY16: R39m) dividends received on treasury shares held, R45m (FY16: R31m) antecedent dividend, R0m (FY16: R22m) distribution from Stenham and R45m (FY16: R50m) interest on V&A Waterfront
development funding.
* Average exchange rate at R10.26/AUD (FY16: R10.57/AUD) for GOZ.
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INCOME
STATEMENT
Distributable income growth of 10.4%
▪ Steady contribution from South Africa
▪ First inclusion of Trading Profit and Development Fee income
▪ Solid contribution from the V&A, growth has slowed down as the
base has grown
▪ Stable contribution from GOZ due to additional investment of 48.8m
shares but earnings impacted negatively due to the higher expected
(9.7%) and actual withholding tax rates (9.7% at HY17 vs. 6.9% at
HY16 & 6.5% at FY16 ) and the stronger ZAR (R10.26/AUD1 average
vs. FY16 at R10.57/AUD1)
▪ First dividend contribution from GWI of EUR0.22 cps
▪ Net property income from GOZ
increased 19.9% mainly as a result
of the acquisition of GMF
▪ RSA net property income
under pressure
▪ Costing more to keep
and attract tenants in a fiercely
competitive and weak market
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Property
Expense Ratio
Operating
Expense Ratio
Total
Expense Ratio
South Africa 23.5% 3.6% 27.1%
V&A Waterfront 28.1% 3.3% 31.4%
GOZ 13.0% 4.8% 17.8%
Expenses remain under control
▪ 11.7% increase in investment
income received from the
V&A driven mainly by hotel
occupancies combined with
the conversion of
development activity into
income producing assets
▪ SA property expenses under control
▪ Operating expenses increased as a result of less development fees
earned in the current period and the reallocation of expenses
▪ V&A Waterfront and GOZ expense ratios up slightly due to increased
office weightings
▪ Reduction in finance costs for RSA
due to increase in use of CCIRS
▪ Increase in finance costs for GOZ
due to acquisition of GMF
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FY17
Rm
FY16
Rm
INCREASE/
(DECREASE)
Property portfolio(1) 109 442 104 690 4.5%
RSA 76 906 73 752 4.3%
GOZ(2) 32 536 30 938 5.2%
50% Investment in V&A Waterfront 7 110 6 616 7.5%
26.9% Investment in Globalworth 2 769 - 100%
Other property-related investments 226 440 (48.6%)
Nominal borrowings(3) 42 428 38 413 10.5%
RSA(4) 29 288 24 653 18.8%
GOZ(2) 13 076 13 760 (5.0%)
Shareholders interest 72 045 68 295 5.5%
CONSOLIDATED BALANCE SHEET (EXTRACTS)
1. Includes R1 241m (FY16: R1 938m) of properties classified as held for sale.
2. Closing exchange rate R10.04/AUD (FY16: R11.04/AUD).
3. Excludes fair value adjustments.
4. The total value for FY17 excludes the deferred payment of R85m (FY16: R165m) on the Samrand land purchased. The outstanding payment is due in September 2017.
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▪ 4.5% or R4.7bn increase in property values
(RSA and GOZ)
▪ R5bn for the acquisition of GMF in GOZ
▪ R1.5bn of assets acquired for the
Healthcare Fund
▪ 18.8% increase in borrowings in RSA which
was used to fund the GWI acquisition,
acquisition of assets for the Healthcare
Fund and further investment into the
V&A Waterfront and GOZ
▪ 4.6% increase in borrowings in AUD for
GOZ as a result of the GMF acquisition
which, after the foreign exchange gain
of R1.4bn, results in a 5.0% decrease in
borrowings in Rands
▪ NAV up 1.7% to
2 518 cents per
share from FY16
BALANCE
SHEET
19
2 861
3 8494 087
368
429479
658
772865
91
345
22
78
FY15 FY16 FY17
RSA V&A Waterfront GOZ Trading & Development Listed Investments
CONTRIBUTION TO DISTRIBUTABLE INCOME
Growth
10.4%R5 600m
15.4%
8.6%
73.0%
R5 072m
15.2%
8.5%
75.9%
R4 232m
15.5%
8.7%
67.6%
0.4%
8.2%
Anslow, Bryanston, Sandton
1. Listed Investments for FY17 consist of investment in GWI, FY16 consists of investment in Stenham.
1.6%
(1)
1.4%
CAPITAL MANAGEMENT
1 Charles Street, Paramatta, NSW, Australia
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RSA
CAPITAL
MANAGEMENT
Total debt R29.3bn
▪ Unsecured debt increased by R4.5bn, of which R3.5bn is
corporate bonds
▪ 17 new bond issues, publicly and privately placed, listed and
unlisted, at margins between 140 to 185 basis points with terms
of 3 to 7 years
▪ Demand in bond market exacerbated by demand for HQLA bonds
by banks
▪ EUR100m loans for GWI investment
▪ Unencumbered assets (properties & investments) R44.2bn
▪ Weighted average cost of debt decreased to 9.2% excluding
CCIRS and EUR debt
▪ Funded from:
- R2.5bn equity DRIP proceeds
- R4.6bn net new borrowings
- R2.0bn property disposals
Investment activities
▪ 85.6% of the liabilities are at
fixed interest rates for an
average term of 3.9 years
Interest rate risk
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AUD & EUR cross currency
interest rate swaps (CCIRS)
▪ Total AUD700m representing 76% of
historical cost and 52% of market
value of GOZ
▪ Total EUR86.4m together with the
direct EUR loans representing 100% of
the historical cost of GWI
Credit rating
▪ Our rating is capped at the
sovereign rating due to our
operational concentration in SA
▪ Moody’s National Scale rating
AAA.za & Global Scale rating is
Baa3
▪ Negative outlook due to negative
outlook on sovereign rating
Group LTV – 35.0% vs 33.7% at FY16
▪ Increased due to funding of investment activities mainly by way of debt in both RSA and GOZ
▪ RSA LTV – 33.4% vs. 30.5% at FY16
- Further investment in GOZ
- Acquisition of assets for the Healthcare Fund
- GWI investment
▪ GOZ LTV – 39.4% vs. 42.0% at FY16
- GMF transaction initially increased the LTV which has subsequently been decreased through asset sales
▪ Group Interest Cover Ratio increased to 3.5x from 3.3x
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FY17 FY16
Unutilised committed facilities (Rbn) 4.5 5.9
Weighted average term of liabilities (years) 3.0 3.0
Weighted average term of fixed interest rate profile (years) (Incl. AUD & EUR CCIRS and IRS) 3.9 3.4
Weighted average interest rate (%) 9.2 9.3
Weighted average interest rate (%) (Incl. AUD & EUR CCIRS and EUR debt) 7.4 8.5
% debt at fixed interest rate 85.6 86.6
Unencumbered assets (incl. V&A Waterfront and listed investments) (Rbn) 44.2 37.2
Unsecured debt (Rbn) 12.5 8.1
Exchange rate risk
▪ ZAR has been relatively strong to the AUD and EUR for the majority of FY17
▪ Only 29% of GOZ dividends were hedged for FY18 at 30 June 2017,
subsequently taken advantage of the ZAR weakness and 64% now hedgedRSA facilities
PORTFOLIO UPDATE
Discovery, Sandhurst, Sandton
25
NET PROPERTY INCOME
CONSOLIDATED NET PROPERTY INCOME OVERVIEW
RSA68.0%
5.7%
25.3%GOZ
V&A
Waterfront
GWI
1.0% 26.3%Offshore
Greenfield Industrial Park, Cape Town
1. Includes 100% of RSA, 100% of GOZ, 50%of the V&A Waterfront and 26.9% of GWI.
(1)
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PROPERTY PORTFOLIO (by value)
CONSOLIDATED PORTFOLIO VALUE OVERVIEW
RSA62.9%
7.1%
26.6%GOZ
V&A
Waterfront
3.4%
GWI 30.0%Offshore
Eastgate, Sandton
1. Includes 100% of RSA, 100% of GOZ, 50%of the V&A Waterfront and 26.9% of GWI.
(1)
PORTFOLIO UPDATE
SOUTH AFRICA
Key West, Krugersdorp
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SOUTH AFRICA
Retail
▪ NPI still showing growth based on the successful renewal of
existing leases
▪ Renewal success rates deteriorated and renewal growth remains under
pressure, both as a result of new competition, which continues to
cannibalise trading densities in a weak macro economic environment,
with a very constrained consumer
▪ Most of our top 16 shopping centres have faced or will face competition
▪ 1.3% portfolio average trading density growth, weighted by GLA
▪ Vacancies are ticking up as tenants consolidate and reduce space. We
expect vacancies to peak in HY18 and settle thereafter at current levels
▪ 2.1% core vacancy vs. 2.0% FY16
▪ International retailers are not a natural “plug in”
▪ Arrears as a % of collectables improved slightly from 9.7% to 9.3%
▪ We need to keep our centres relevant and as part of our ongoing
strategy to improve our offering, we are giving Lakeside and Festival
Mall a facelift and we are reconfiguring the food courts at Kolonnade
and Waterfall Mall
▪ Long term strategy to consolidate and hold larger centres in the major
urban areas
FY17
Net property income (Rm) 2 307
Vacancy (%) 3.6
In force leases
Average gross rental (per m²/month) (R) 176
Average in force escalations (%) 7.2
Weighted average lease period (years) 3.3
Renewals
Total letting success rate (%) 81.4
Renewal success rate (%) 80.9
Weighted average renewal growth (%) 3.2
Weighted average future escalations on
renewals (%)7.3
Arrears
Arrears (Rm) 35.2
Provision for bad debts (Rm) 12.5
Bad Debts (I/S) (Rm) 5.0
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FY17
Net property income (Rm) 2 813
Vacancy (%) 6.8
In force leases
Average gross rental (per m²/month) (R) 155
Average in force escalations (%) 8.1 −
Weighted average lease period (years) 3.8
Renewals
Total letting success rate (%) 77.4
Renewal success rate (%) 61.4 −
Weighted average renewal growth (%) (1.8)
Weighted average future escalations on
renewals (%)8.2 −
Arrears
Arrears (Rm) 12.8
Provision for bad debts (Rm) 5.2
Bad Debts (I/S) (Rm) 3.5
Office
▪ Economic drivers are indicative of a sector under pressure
▪ Supply generally continues to exceed demand with consolidation
remaining a key theme
▪ Higher incentives and lower rental levels still the order of the day
to attract and retain tenants
▪ Renewal growth rates still negative but improved from -3.5%
▪ Growthpoint vacancies are well contained and are below the MSCI
office benchmark which is testament to our quality portfolio and
staff efforts
▪ Arrears as a % of collectables improved slightly from 3.7% to 3.3%
▪ Demand is for new P grade green buildings
▪ 76 Office buildings valued at R13bn green star rated by the Green
Building Council of South Africa (GBCSA)
▪ Discovery completion in sight with income positively impacting the
second half of FY18
▪ Earthworks at 144 Oxford Road in Rosebank commenced
▪ Asset management strategy is very important; need to buy correctly,
do the right developments and dispose of non-core properties
30
FY17
Net property income (Rm) 1 058
Vacancy (%) 3.1
In force leases
Average gross rental (per m²/month) (R) 50.0
Average in force escalations (%) 8.3
Weighted average lease period (years) 3.1 −
Renewals
Total letting success rate (%) 91.5
Renewal success rate (%) 78.5
Weighted average renewal growth (%) 2.3
Weighted average future escalations on
renewals (%)8.1
Arrears
Arrears (Rm) 12.4
Provision for bad debts (B/S) (Rm) 8.4
Bad Debts (I/S) (Rm) 4.7
Industrial
▪ The industrial asset class has come into its own, it has performed well
and is proving to be resilient and in favour, albeit that it is costing us to
attract and retain tenants
▪ Users are getting more sophisticated which is creating demand for
modern logistics facilities which is feeding the development pipeline
and the emergence of the asset class
▪ The renewal success rate is much improved from 63.5% to 78.5% with
growth in rentals on renewal from 0.5% to 2.3%
▪ Vacancies are significantly improved from 6.0% with the Paul Smit
Anderbolt property being the only large vacancy remaining
▪ The portfolio is diverse with an emphasis on warehousing and
distribution and a reduction in the manufacturing component
▪ Emergence of online retail in SA is real with many tenants playing in
this space
▪ Durban and Cape Town, with their access to the ports and limited
supply of land, are performing well with vacancies virtually non
existent and with real demand and growth
▪ Owning land is critical and we continue to “convert the dirt” with the
majority of developments pre-let
▪ The environment will, no doubt, get tougher but the portfolio is well
positioned with conservative rentals and values and as such we expect
to continue to extract value
▪ Arrears as a % of collectables improved slightly from 6.8% to 6.5%
31
Sustainability focus across all 3 sectors
▪ Total of 234 kilolitres of water saved in FY17
▪ 8 338.7 kWp installed solar capacity
▪ Via our innovative Green Leases we have shared more than R40m
in utilities cost savings, 50/50 with our clients since August 2013
▪ Greenovate Awards launched in 2015 which introduces university
students to green building thinking and recognises excellence
in application
▪ In the process of submitting our commitment to Scientific Based
Targets for carbon emissions
▪ Continued focus on waste data gathering and piloting of a waste
to compost project
32
FY17
Rm
FY16(1)
Rm
INCREASE/
DECREASE
Gross property revenue 8 079 7 589 6.5%
Retail 3 099 2 953 4.9%
Office 3 632 3 362 8.0%
Industrial 1 348 1 274 5.8%
Property expenses (1 901) (1 864) 2.0%
Retail (792) (814) (2.7%)
Office (819) (790) 3.7%
Industrial (290) (260) 11.5%
Net property income 6 178 5 725 7.9%
Adjustments (1 143) (897)
Acquisitions and developments (662) (431)
Trading Profit and Development Fees (91) -
Disposals (126) (211)
Investec rent (264) (255)
Adjusted “like-for-like” net property income 5 035 4 828 4.3%
Retail 1 937 1 810 7.0%
Office 2 174 2 112 2.9%
Industrial 924 906 2.0%
NET PROPERTY INCOME ANALYSIS
1. From 1 July 2016, Growthpoint Business Park was reclassified from an office building to an industrial building. The comparatives have been restated to reflect this adjustment.
PORTFOLIO UPDATE
V&A WATERFRONT
V&A Waterfront, Cape Town
34
V&A
WATERFRONT
Highlights
Silo & Canal Districts
▪ c. 100 000m² of mixed use space committed and let in
Silo District
▪ P grade office offering includes blue chip tenants such as
PwC, EY, Werksmans and British American Tobacco
▪ The Silo Hotel above the museum opened on time
▪ No 3 Silo residential units sold at an average price ofR83 000/m² with one penthouse remaining of the 79 units
Marine
▪ Cruise terminal improved passenger processing with the
turnaround of 68 000 passengers and 41 vessels
Workshop17
▪ Continued expansion of Workshop17 with 350 members and
85 businesses
Sustainability
▪ Leading in the sustainability space:
- 6 Star green rating for No 5 Silo building
- 16% of total energy consumption (kWh) saved since 2008
- Solar panels generated 1.58 MWh energy in 2016
- 25% reduction in water consumption since 2010
- 42% of total waste collected in 2016 was diverted from landfill
- First district cooling plant in South Africa utilising sea water
35
Property fundamentals
▪ Strong demand for office and retail space continues
▪ Vacancies across sectors remain very low
- Office 0.8%
- Retail 0.0%
- Residential 8.0%
▪ Tenants electing to stay at the V&A - growth in tenant
retention from 82.3% FY16 with strong renewal growth
▪ Stabilised residential portfolio of 259 units
▪ Footfall of 24m visitors
▪ Retail sales growth of 3% and trading density growth of 2%,
both coming off a high base, with international tourists up
35% year on year, but with a reduction in spending power
impacted by a stronger rand
▪ The V&A hotels trade on average 63% higher in revenue per
available room than the Cape Town city hotels across the
3 star to 5 star market
FY17
Net property income 522
Vacancy (%) 0.8
In force leases
Average gross rental (per m²/month) (R) 231.1
Average in force escalations (%) 8.0 −
Weighted average lease period (years) 8.0 −
Renewals
Total letting success rate (%) 98.3
Renewal success rate (%) 98.2
Weighted average renewal growth (%) 7.9
Weighted average future escalations on
renewals (%)7.9
Arrears
Arrears (Rm) 35.5
Provision for bad debts (B/S) (Rm) 5.6
Bad Debts (I/S) (Rm) 2.7
36
Development activity
Silo Precinct
▪ Zeitz MOCAA officially opening 22 September 2017
▪ 250 room Radisson Red hotel opens in September 2017
Canal Precinct
▪ c. 120 000 m² Canal District development includes:
- The Battery Park, 1 200 bay parkade with 3 acres of public
green space with expected completion early 2018
- Dock Road Junction with smaller office and retail pockets
creating strong leisure and street culture due for completion
in 2018
- c. 90 000 m² earmarked for further office, residential for sale
and to let, as well as other uses
Cruise terminal
▪ The second phase of the cruise terminal development
includes extended office & retail space
Masterplan update
▪ The Granger Bay District masterplan submitted to
The City for approval includes application for land
reclamation and further enhancement of the protection
of the coast
▪ Awaiting the City adjudication on the Foreshore
Freeway Project
PORTFOLIO UPDATE
GOZ
5 Murray Rose Ave, Sydney Olympic Park, NSW, Australia
38
GOZ
▪ A year of growth in assets, profit and
shareholder returns
▪ 4.9% increase in dividend per share to 21.5 cps
▪ 6.3% total shareholder return vs. -5.6%
S&P/ASX 300 A-REIT index
▪ 10.3% increase in net tangible asset per share
to AUD2.88
Property fundamentals
▪ Further cap rate compression driven by
limited supply, strong demand and low
interest rates, all coupled with global money
seeking investment opportunities in the
direct property market
▪ Significant disparity in economic outcomes by
State - growth centred on Australia's Eastern
seaboard (89% of GOZ portfolio)
▪ 94 921m² of space let (c. 9% of portfolio)
▪ 99% occupancy with low upcoming lease
expiries
Shareholder Return
39
Capital management
▪ Gearing reduced to 39.0% from 43.1% at FY16 following
strategic asset sales
▪ Good access to funding remains: AUD208m raised in March
2017 via the US Private Placement (USPP) market. The
issue was more than 4x oversubscribed with an average
interest rate of 5.34% and a tenor of 10.8 years, extending
GOZ’s debt maturity profile to 5 years
▪ All in cost of debt slightly higher at 4.3%
vs. 4.1% at FY16
▪ 75% of debt fixed vs. 65% at FY16 with a weighted average
fixed debt maturity of 6.4 years
▪ AUD1.3bn drawn debt
▪ AUD245.7m new equity issued
- AUD139.8 (GMF acquisition)
- AUD105.9 (DRIP)Guidance
▪ Guidance for FY18 dividend growth of
2.3% to 22.0 cps
PORTFOLIO UPDATE
GLOBALWORTH
Globalworth Tower, Bucharest, Romania
41
Transaction
▪ Acquired 24.3m shares for EUR186.4m
▪ Funded by EUR100m loans and EUR86.4m CCIRS
▪ 4.2 years weighted average term of debt
▪ EUR base interest rates are fixed for a weighted average
term of 9.9 years
▪ Transaction funded at a weighted average interest rate
of 2.62%
▪ Initial acquisition yield of 6% expected to grow significantly
over the next 3 - 5 years based on the following:
- Filling of vacancies, from 20% on acquisition, to 8% where
they are expected to stabilise
- Accretive c. EUR100m development pipeline at yields of
7% to 9%
- Refinancing of c. EUR400m of existing debt, through
EUR550m Eurobond, from 5% to 3% with a BB+ rating from
S&P and Ba2 rating from Moody’s
- Capital injection and surplus debt proceeds to fund
acquisitions of stabilised assets at yields of 7% to 8% in
Romania and the broader CEE region
GWI
42
Portfolio Activity
▪ Completed 3 acquisitions
- 57 000m² development property for Groupe Renault
Romania headquarters
- 16 300m² Building C Green Court let to global
corporates including General Motors, ABB
and Merck
- 68 000m² Dacia (Renault Group) Distribution facility
▪ Concluded significant leasing with global corporates
▪ New developments are on track and management has
been able to secure pre-leases
Surpassed Growthpoint’s due diligence
expectations and delivered on distribution guidance
▪ Delivered EUR0.22 dividend per share
▪ EUR0.22 dividend per share expected for HY18
PROPERTY INVESTMENT & DEVELOPMENT
Brooklyn Mall, Brooklyn, Pretoria
44
PROPERTY INVESTMENT
& DEVELOPMENT
Disposals
South Africa R1.9bn
V&A Waterfront (50%) -
GOZ R5.0bn
Acquisitions
South Africa R2.0bn
V&A Waterfront (50%) R113.0m
GOZ R1.7bn
Development & capex
South Africa R2.1bn
V&A Waterfront (50%) R557m
GOZ R473m
Trading Profits &
Development FeesR91m
Commitments
South Africa R3.1bn
V&A Waterfront (50%) R220m
GOZ R151m
CONCLUSION
Deloitte, La Lucia Ridge, Durban
46
PROSPECTS
South Africa
▪ Weakening property fundamentals
▪ Economic growth prospects insufficient to repair
lacklustre property fundamentals
▪ Potential debt downgrade
▪ Impact of competition in the retail portfolio
▪ Continued pressure on the office portfolio
▪ Increased cost of retaining tenants and attracting
new ones
▪ Continue to look for opportunities to grow internationally
▪ Capital raise for Africa Fund has yielded mixed results
with the first close targeted for Q4 2017
▪ Capital raise for the Healthcare Fund to commence
Q4 2017 with institutional investment expected H1 2018
▪ Exploring the optimum mechanism to dispose c. 5%
of the RSA portfolio
V&A Waterfront
▪ Healthy and strong core market supplemented by
tourism; as such we expect good growth and
demand with retail tempered by a strong ZAR
▪ c. 120 000m² bulk remaining with a good
development pipeline and exploring ways to acquire
additional bulk
47
GOZ
▪ Continue to pursue opportunities for growth in the
office segment in Sydney and Melbourne as a result of
declining vacancies, growing population, significant
infrastructure spending and Gross State GDP growth in
NSW and Victoria
▪ Deterioration in Western Australia property
fundamentals is creating opportunities
▪ Offshore demand is creating opportunities for further
asset sales
▪ Considering further M&A opportunities
▪ Taking advantage of development opportunities
▪ Dividend withholding tax expected to be higher
▪ Recent ZAR weakness will be beneficial should it persist
GWI
▪ Romania is performing well with the highest
European GDP growth rate, which is expected to
grow at +6% for 2017
▪ Strong demand from global corporates for
office space
▪ EU funding of EUR43bn approved for 2014-2020 and
expected to flow into the country
▪ Romanian cap rates higher than other prime markets
in CEE but expect further cap rate compression as
the property market continues to evolve
▪ Exploring opportunities in the CEE region for both
office and industrial asset acquisitions
48
▪ Dividend growth for FY18
should be similar to that
achieved for FY17
Dividend guidance
THANK YOU
Hilltop Industrial Park, Elandsfontein
ANNEXURES
Growthpoint Industrial Estate, Meadowdale, Germiston
51
ANNEXURE CONTENTS
02
03
04
05
06
07
08
01 Portfolio overview
Property investment activities
Expense to income ratios (IFRS)
Expense to income ratios (gross)
RSA diversified borrowings – nominal value
Loan to value and interest cover ratios
Loan exposure per financier RSA
Debt expiry profile per financier RSA
Fixed interest rate expiry profile RSA
Wealth created and distributed to stakeholders
Shares issued and beneficial shareholders holding > 2% at FY17
Key performance indicators RSA
Portfolio overview RSA (excl. V&A)
Split of RSA property portfolio
Acquisitions RSA
10
11
12
13
14
15
09
16 Disposals RSA
52
ANNEXURE CONTENTS
17
18
19
20
21
22
23
25
26
27
28
29
30
31
24
Developments & capital expenditure RSA
Commitments RSA
Non-current assets held for sale RSA
Retail overview RSA
Office overview RSA
Industrial overview RSA
GLA & vacancy reconciliation RSA
V&A Waterfront portfolio overview (50%)
Split of V&A Waterfront property portfolio
Developments & commitments V&A Waterfront (50%)
Net property & distributable income analysis V&A Waterfront
(50%)
V&A Waterfront overview
GLA & vacancy reconciliation V&A Waterfront (50%)
Key performance indicators V&A Waterfront
Key performance indicators GOZ
32 GOZ portfolio overview
53
ANNEXURE CONTENTS
33
34
35
36
37
38
Split of GOZ property portfolio
Acquisitions & disposals GOZ
Developments, commitments & non-current assets held for sale GOZ
Net property income analysis GOZ
GOZ overview
GLA & vacancy reconciliation GOZ
54
RETAIL OFFICE INDUSTRIAL RSA TOTAL GOZ (1) (3) V&A (1)
Number of properties 56 182 233 471 57 1
GLA (m²) 1 405 021 1 750 606 2 266 957 5 422 584 1 053 148 223 016
Vacancy (m²) 50 246 119 334 70 954 240 534 7 888 1 734
Vacancy (%) 3.6 6.8 3.1 4.4 1.3 0.8
Valuation (Rm) 29 588 34 732 12 586 76 906 32 536 8 705
Value per m² (excl. bulk) 21 036 18 454 5 068 13 529 30 894 36 810
Average gross rental (per m²/month) (R) 176 155 50 117 AUD237 (2) 231
Avrage annualised yield (%) 7.6 8.4 8.7 7.9 6.9 7.8
Average in force escalations (%) 7.2 8.1 8.3 7.8 3.3 8.0
Weighted average lease period (years) 3.3 3.8 3.1 3.6 6.1 8.0
Renewal success rate (%) 80.9 61.4 78.5 73.6 81.4 98.2
Weighted average renewal lease period (years) 4.3 3.4 2.9 3.3 3.3 3.0
Weighted average renewal growth (%) 3.2 (1.8) 2.3 1.0 (7.7) 7.9
Weighted average future escalations on
renewals (%)7.3 8.2 8.1 7.8 3.3 7.9
Total letting success rate (%) 81.4 77.4 91.5 85.3 85.2 98.3
ANNEXURE 01:PORTFOLIO OVERVIEW
1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.
2. Based on net rental per annum.
3. Measurements and ratios are based on income and not GLA (when compared to RSA).
55
ANNEXURESRETAIL
Rm
OFFICE
Rm
INDUSTRIAL
Rm
RSA TOTAL
Rm
GOZ(1)
Rm
TOTAL
Rm
V&A(1)
Rm
Opening balance – 1 July 2016(²) 29 210 32 655 11 887 73 752 30 938 104 690 7 766
Purchase price of acquisitions 15,34 - 1 756 116 1 872 5 047 6 919 -
Selling price of disposals 16,34 (607) (1 131) (223) (1 961) (1 730) (3 691) (113) (3)
Developments and capex 17,27,35 504 1 160 473 2 137 473 2 610 557
Fair value adjustment 481 292 333 1 106 848 1 954 495
Foreign currency translation - - - - (3 040) (3 040) -
Total 29 588 34 732 12 586 76 906 32 536 109 442 8 705
Long-term property assets 29 415 34 732 12 557 76 704 31 497 108 201 8 705
Classified as held for sale 19,35 173 - 29 202 1 039 1 241 -
Commitments 18,27,35 962 1 905 195 3 063 151 3 213 220
ANNEXURE 02:PROPERTY INVESTMENT ACTIVITIES
1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.
2. From 1 July 2016, Growthpoint Business Park was reclassified from an office building to an industrial building. The comparatives have been restated to reflect this adjustment.
3. Disposal relates to the sale of 50% of the portion of Waterway House that is occupied by BAT, to Atterbury.
56
24.0% 24.5% 23.5%
3.8% 2.7% 3.6%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
11.6% 12.0% 13.0%
4.4% 4.8%4.8%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
SOUTH AFRICA GOZ
27.8% 27.7% 28.1%
2.9% 3.1% 3.3%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
V&A WATERFRONT
ANNEXURE 03: EXPENSE TO INCOME RATIOS (IFRS)
27.2%27.8% 27.1% 30.8%30.7% 31.4% 16.8%16.0% 17.8%
57
35.0% 36.2% 35.0%
3.2% 2.3%3.0%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
12.6% 13.0% 13.9%
4.3% 4.7%4.8%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
SOUTH AFRICA GOZ
33.2% 34.0% 35.6%
2.7%2.9%
3.0%
FY15 FY16 FY17
Operating Expense Ratio Property Expense Ratio
V&A WATERFRONT
ANNEXURE 04: EXPENSE TO INCOME RATIOS (GROSS)*
* This ratio is presented where expense recoveries have been reclassified as revenue as per SA Reit Association Best Practice guidance.
38.5%38.2% 38.0% 36.9%35.9% 38.5% 17.7%16.9% 18.7%
58
15 852 14 880 15 276
2 0531 803 1 540
4 4804 286
5 248
2 6593 284
6 824400
400
400
FY15 FY16 FY17
Secured bank debt Secured institutional financier Unsecured bank debt and institutional financier Corporate bonds Commercial paper
(1)
ANNEXURE 05:RSA DIVERSIFIED BORROWINGS — NOMINAL VALUE
Debt capital market 14.9%
Traditional bank debt
85.1%
Unsecured32.3%
Secured67.7%
Debt capital market 12.0%
Traditional bank debt
88.0%
Unsecured29.6%
Secured70.4%
Debt capital market 24.7%
Traditional bank debt
75.3%
Unsecured42.6%
Secured57.4%
R24 653mR25 444m R29 288m
(1)
1. The total value excludes the deferred payments of R85m (FY16: R165m) on the Samrand land purchased. The outstanding payment is due in Sept 2017.
59
32.1%30.5%
33.4%
0
1
2
3
4
5
6
7
0%
10%
20%
30%
40%
FY15 FY16 FY17
LTV Interest cover ratio (incl V&A)
33.2% 33.7% 35.0%
0
1
2
3
4
5
6
7
0%
10%
20%
30%
40%
FY15 FY16 FY17
LTV Interest cover ratio
SOUTH AFRICA GROUP
36.8%
42.0%39.4%
0
1
2
3
4
5
6
7
0%
10%
20%
30%
40%
FY15 FY16 FY17
LTV Interest cover ratio
GOZ(2)
ANNEXURE 06:LOAN TO VALUE AND INTEREST COVER RATIOS
3.2x3.4x 3.8x3.7x 3.3x3.4x3.9x 3.5x3.4x
1. Nominal value of interest-bearing borrowings (net of cash), divided by the fair value of property assets, including investment property held for sale. For RSA and group the 50% equity investment in V&A Waterfront and
other equity-accounted and listed investments were included in the fair value of property assets.
2. Calculated in Rands.
(1) (1)(1)
60
ANNEXURE 07:LOAN EXPOSURE PER FINANCIER RSA
21%
25%
22%
17%
5%
5%
2%2%
1%
RMB
Standard Bank
OMSFIN
LibFin
Investec
ABSA
China Construction BankJSE (Corporate Bonds)
Nedbank
61
0%
5%
10%
15%
20%
25%
FY18 FY19 FY20 FY21 FY22 FY23 FY24
ABSA China Construction Investec JSE (Corporate Bonds) LibFin Nedbank Omsfin RMB Standard Bank
ANNEXURE 08: DEBT EXPIRY PROFILE PER FINANCIER RSA
15% 18% 23% 16% 16% 3% 9%
62
0%
5%
10%
15%
20%
25%
Floating FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29
ANNEXURE 09: FIXED INTEREST RATE EXPIRY PROFILE RSA
14% 9% 11% 17% 3% 6% 3% 0% 3%9% 21% 2%2%
63
463 625 669
4 2325 072
5 600
329
450 471
2 215
2 710
2 922747
941
1 016
74
418
164
0
1 500
3 000
4 500
6 000
7 500
9 000
10 500
12 000
FY15 FY16 FY17
Employees Shareholders Minority interest holders Providers of debt Governments - direct taxes Reinvested in the group
ANNEXURE 10: WEALTH CREATED & DISTRIBUTED TO STAKEHOLDERS*
R10 216mR8 060m R10 842mRm
* Wealth created based on a look-through principle and therefore includes RSA, GOZ and V&A Waterfront.
9.3%
27.5%
4.1%
52.5%
5.7%
0.9%
9.2%
26.5%
4.4%
49.7%
6.1%
4.1% 9.4%
27.0%
4.3%
51.6%
6.2%
1.5%
64
SHARES
Opening balance 1 July 2016 2 786 093 366
Dividend reinvestment (September 2016) 44 023 040
Dividend reinvestment (March 2017) 58 346 176
Closing balance 30 June 2017 2 888 462 582
Treasury shares held for staff share scheme (27 759 987)
Shares in issue (net of treasury shares) 2 860 702 595
% HOLDING SHARES HELD
Government Employees Pension Fund 13.3 384 361 494
Stanlib Asset Management Ltd 6.1 176 177 821
Southern Palace Properties Pty Ltd 5.6 160 942 921
Investec Asset Management (Pty) Ltd 5.1 147 899 510
Old Mutual Group 4.3 123 103 328
Prudential Portfolio Managers 4.0 116 699 191
The Vanguard Group 3.8 108 984 712
Sesfikile Capital 2.8 81 885 120
Coronation Fund Managers Ltd 2.7 78 417 247
BEE Consortium 2.7 77 666 667
Momentum Asset Management 2.6 75 906 033
Sanlam Investment Management 2.6 74 222 230
Meago Asset Managers 2.6 73 825 229
Blackrock Institutional Trust Company 2.0 58 985 663
Total shareholders holding >2% 60.2 1 739 077 166
Other 39.8 1 149 385 416
Total 100.0 2 888 462 582
Foreign shareholding: 28% of institutional ownership and 22% of total shares
issued
ANNEXURE 11: SHARES ISSUED & BENEFICIAL SHAREHOLDERS HOLDING >2% AT FY17
65
FY17 FY16
Vacancies (%) 4.4 5.7
Total arrears (Rm) 60.4 64.3
Provision for bad debts (B/S) (Rm) 26.1 29.8
Bad debts (I/S) (Rm) 13.2 15.9
Average in force escalations (%) 7.8 7.8
Renewal success rate (%) 73.6 68.7
Total letting success rate (%) 85.3 82.4
Weighted average renewal growth (%) 1.0 1.1
Weighted average future escalations on
renewals (%)7.8 7.8
Number of employees 630 657
Net property income per employee (R) 9 806 349 8 713 851
ANNEXURE 12:KEY PERFORMANCE INDICATORS RSA
The Towers, Sandton
66
FY15 FY16 FY17
Retail Office Industrial
19.9%
47.3%
32.8%
17.2%
45.5%
37.3%
16.6%
46.0%
37.4%
FY15 FY16 FY17
Retail Office Industrial
14.6%
46.0%
39.4%
16.4%
45.2%
38.4%
15.3%
45.1%
39.6%
NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE
FY15 FY16 FY17
Retail Office Industrial
48.6%
39.1%
49.5%
38.6%
11.9%
48.6%
39.0%
12.4%
NUMBER OF PROPERTIES
ANNEXURE 13: PORTFOLIO OVERVIEW RSA (EXCL.V&A)
R4 479m R5 725m R6 178m 471 467 471 R71 550m R73 752m R76 906m
12.3%
67
ANNEXURE 14: SPLIT OF RSA PROPERTY PORTFOLIO
45%
39%
16%
VALUE VALUEGLA GLA
32%
26%
42%
54%
22%
10%
7%4%
2% 1%
58%21%
11%
5%3%
1% 1%
Office Retail IndustrialGreater JHB Western Cape Kwazulu-Natal
Pretoria Eastern Cape North West Other
68
SECTOR DATE
PURCHASE PRICE
Rm YIELD
Acquisitions
Gateway Private Hospital, Umhlanga Ridge, Durban Healthcare Fund(1) November 2016 559.2 9.5%
Hillcrest Private Hospital, Assagay, Durban Healthcare Fund(1) November 2016 550.4 9.5%
Louis Leipoldt Hospital, Bellville, Cape Town Healthcare Fund(1) February 2017 385.5 8.3%
Site B, Foreshore, Cape Town Office March 2017 88.7 Land
Remaining 50% of 144 Oxford Road, Rosebank Office March 2017 69.7 Land
Ncondo Place, Umhlanga Ridge, Durban Office March 2017 44.2 Land
Draper on Main, Claremont, Cape Town Office August 2016 25.8 9.1%
31 Impala Road, Chislehurston, Sandton Office December 2016 20.3 5.5%
29 Richefont, Umhlanga Ridge, Durban Office September 2016 12.5 Land
28 Sacks Circle, Bellville, Cape Town Industrial May 2017 104.2 9.6%
Remaining 30% of Wadeville, Germiston Industrial July 2016 12.2 Land
Total 1 872.7
ANNEXURE 15: ACQUISITIONS RSA
1. Properties acquired for Healthcare Fund and currently included in the office portfolio.
69
SECTOR DATE
SELLING PRICE
Rm
PROFIT/(LOSS)
ON COST
Rm
PROFIT/(LOSS)
ON BOOK VALUE
Rm YIELD
Disposals
Picbel Parkade, CBD, Cape Town Retail March 2017 271.3 160.4 (0.4) 10.1%
Vaal Mall - 11.19%, Vanderbijlpark Retail April 2017 197.6 (1.0) (0.5) 7.4%
Grayston Shopping Centre, Kramerville, Sandton Retail May 2017 138.0 47.6 9.5 7.9%
Harrowdene Office Park, Woodmead, Johannesburg Office March 2017 845.9 21.4 (27.7) 2.7%
16 Fricker Road, Illovo, Sandton Office May 2017 71.9 1.2 8.4 3.3%
61 Central, Houghton, Johannesburg Office February 2017 64.5 35.2 5.2 7.3%
Thebe House, Rosebank, Johannesburg Office June 2017 52.0 39.4 1.6 10.3%
Bremerton Office Park, Newton Park, Port Elizabeth Office December 2016 51.0 (4.6) (3.0) 9.8%
295 Florida Road, Morningside, Durban Office November 2016 34.5 13.1 4.4 8.4%
Woodstock, Woodstock, Cape Town Office October 2016 10.7 2.1 2.9 9.0%
Redwood, Roodekop, Alberton Industrial December 2016 78.5 41.8 20.9 7.3%
Kya Sands, Kya Sands, Randburg Industrial April 2017 45.8 11.9 (0.3) 9.4%
Laser Isipingo, Isipingo, Durban Industrial November 2016 44.0 24.1 2.4 9.5%
Osram, Randjiespark, Midrand Industrial August 2016 28.0 9.7 4.2 10.0%
Metro Cash & Carry Krugersdorp, Krugersdorp Industrial December 2016 12.4 (1.7) (0.2) 5.3%
Snowy Owl, Arcadia, Pretoria Industrial January 2017 7.6 (3.1) - 11.4%
Erf 321 Wadeville, Wadeville, Germiston Industrial March2017 3.7 1.8 1.6 10.7%
Portland, Wadeville, Germiston Industrial June 2017 2.8 1.8 0.1 8.5%
Total 1 960.2 401.1 29.1
ANNEXURE 16: DISPOSALS RSA
70
SECTOR
ESTIMATED COMPLETION
DATE
FY17
Rm
Developments and Capital Expenditure(1)
Greenacres, Greenacres, Port Elizabeth Retail July 2017 140.5
Vaal Mall (66.6%), Vanderbijlpark, Johannesburg Retail December 2016 90.0
Hillcrest Corner (50%), Hillcrest, Durban Retail June 2017 49.4
KeyWest Shopping Centre, Krugersdorp, Johannesburg Retail November 2016 30.3
Other, below R30m Retail 193.8
Total Retail 504.0
Discovery Head Office (55%), Sandhurst, Sandton Office November 2017 669.2
Lakeside 1, Centurion, Pretoria Office April 2019 46.8
Anslow Phase 2, Bryanston, Sandton Office July 2016 39.7
Other, below R30m Office 404.3
Total Office 1 160.0
Samrand Development, Midrand Industrial July 2017 75.5
M1 Place, Eastgate, Sandton Industrial November 2016 61.5
Growthpoint Industrial Estate, Erf 307, Meadowdale, Germiston Industrial Dec 2016 48.6
Saligna, Boksburg Industrial July 2017 45.6
Montague Business Park (25%), Montague Gardens, Cape Town Industrial 39.0
Other, below R30m Industrial 202.8
Total Industrial 473.0
Total 2 137.0
Development Expenditure 1 451.0
Capital Expenditure 686.0
ANNEXURE 17: DEVELOPMENTS & CAPITAL EXPENDITURE RSA
1. The average yield for developments is 8.0% - 9.0% on a fully let basis.
71
Commitments SECTOR
ESTIMATED
COMPLETION DATE
FY17
Rm
Developments(1) 2 051.0
River Square Shopping Centre, Three Rivers, Vereeniging Retail November 2017 46.9
144 Oxford Road, Rosebank Office October 2019 647.1
Exxaro Head Office and AECOM, Centurion Office May 2019 488.6
Discovery Head Office (55%), Sandhurst, Sandton Office April 2018 399.0
Draper on Main, Cape Town Office March 2019 119.2
Boulevard, Umhlanga Ridge, Umhlanga Rocks, Durban Office April 2018 76.4
32 on Kloof, Cape Town Office June 2018 45.1
Bakers Transport, Samrand, Midrand Industrial February 2018 77.5
Fast & Furious, Growthpoint Industrial Estate, Meadowdale, Germiston Industrial January 2018 56.4
Other below R30,0m Various Various 94.8
Acquisitions 1 011.6
Remaining 58% of N1 City Mall Goodwood, Cape Town Retail November 2017 881.6
Exxaro Corporate Centre & Vacant land, Pretoria (2) Office 130.0
Total 3 062.6
ANNEXURE 18: COMMITMENTS RSA
1. The average yield for developments is 8.0% - 9.0% on a fully let basis.
2. Property acquired for Trading and Development purposes. The transaction is subject to Competition Commission approval and as such estimated completion date is unknown.
72
SECTOR
FY17
Rm
Properties Held For Sale
OK Empangeni, Empangeni, Durban Retail 172.5
Whitworth, Heriotdale ext 8, Johannesburg Industrial 16.0
Greenhills Centre, Elandsfontein, Germiston Industrial 13.4
Total RSA 201.9
ANNEXURE 19: NON-CURRENT ASSETS HELD FOR SALE RSA
73
TOP 10 PROPERTIES BY VALUE
FAIR VALUE
Rm
GLA
m²
Brooklyn Mall and Design Square (75%), Brooklyn, Pretoria 2 247 55 968
Festival Mall, Kempton Park, Johannesburg 1 610 83 387
Geenacres, Greenacres, Port Elizabeth 1 514 46 968
Waterfall Mall, Rustenburg 1 490 49 234
Lakeside Mall, Benoni, Johannesburg 1 447 65 364
Vaal Mall (66.6%), Vanderbijlpark, Johannesburg 1 272 44 172
La Lucia Mall, La Lucia, Durban 1 247 37 296
Kolonnade (50%), Montana Park, Pretoria 1 184 38 100
Bayside Mall, Table View, Cape Town 1 125 45 216
The Constantia Village, Constantia, Cape Town 1 088 20 391
Sub Total 14 224 486 096
Balance of the sector 15 364 918 925
Total for the sector 29 588 1 405 021
TOP 10 TENANTS
GLA(1)
m²
Edcon Holdings Ltd 124 097
The Foschini Group Ltd 57 321
Shoprite Holdings Ltd 139 060
Pepkor Holdings Ltd 56 896
Pick n Pay Stores Ltd 118 256
Mr Price Group Ltd 55 780
Truworths International Ltd 32 688
Massmart Holdings Ltd 66 589
Woolworths Holdings Ltd 87 127
Clicks Group Ltd 28 140
Sub Total 765 954
Balance of the sector 588 821
Total for the sector (excluding vacancies) 1 354 775
14.1
10.1
16.5
18.9
18.2
14.4
4.2
3.6
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
9.2
10.2
17.2
18.8
21.2
17.1
3.5
2.8
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
LEASE EXPIRY (% OF GLA) LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)
ANNEXURE 20: RETAIL OVERVIEW RSA
1. Ranked in terms of gross monthly rental.
74
TOP 10 PROPERTIES BY VALUE
FAIR VALUE
Rm
GLA
m²
Investec, 100 Grayston Drive, Sandton, Johannesburg 2 204 70 945
The Woodlands, Woodmead, Johannesburg 1 707 124 122
Constantia Office Park, Roodepoort, Johannesburg 1 075 72 834
Inanda Greens, Wierda Valley, Sandton, Johannesburg 971 40 774
The Place, Sandton, Johannesburg 954 34 682
MontClare Place, Claremont, Cape Town 629 29 645
Inyanda 1,3 and 4, Parktown North, Johannesburg 487 23 196
Country Club Estate, Woodmead, Johannesburg 486 33 142
Golf Park, Bellville, Cape Town 460 28 263
The Towers (50%), Sandton, Johannesburg 443 12 913
Sub Total 9 416 470 516
Balance of the sector 25 316 1 280 090
Total for the sector 34 732 1 750 606
TOP 10 TENANTS
GLA(1)
m²
Investec Bank Ltd 83 781
Deloitte (South Africa) 46 145
Absa Bank Ltd 25 509
Transnet 33 066
Business Connexion (Pty) Ltd 34 454
Anglogold Ashanti Ltd 19 381
EOH Holdings Ltd 33 660
Firstrand Bank Ltd 17 372
Edward Nathan Sonnenbergs Inc 14 889
Nestle South Africa (Pty) Ltd 11 986
Sub Total 320 243
Balance of the sector 1 311 029
Total for the sector (excluding vacancies) 1 631 272
18.8
9.4
12.5
15.8
17.2
17.2
2.3
6.8
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
24.2
8.5
11.9
16.0
16.4
14.8
2.9
5.3
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
LEASE EXPIRY (% OF GLA) LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)
ANNEXURE 21: OFFICE OVERVIEW RSA
1. Ranked in terms of gross monthly rental.
75
TOP 10 PROPERTIES BY VALUE
FAIR VALUE
Rm
GLA
m²
Growthpoint Business Park, Midrand 644 68 685
Montague Business Park (25%), Montague Gardens, Cape Town 345 30 885
Hilltop Industrial Estate, Elandsfontein, Johannesburg 333 76 283
Isobar, Isando, Kempton Park, Johannesburg 222 47 195
Central Park, Cape Town, Elsiesrivier, Cape Town 205 49 135
Adcock Ingram, Midrand 202 21 536
Omni Park, Aeroton, Johannesburg 190 41 331
Rivonia Crossing 2, Sunninghill, Sandton 187 19 778
N1 Business Park (20%), Midrand 172 21 567
Greenfield Industrial Park, Airport Industrial, Cape Town 160 21 815
Sub Total 2 660 398 210
Balance of the sector 9 926 1 868 747
Total for the sector 12 586 2 266 957
TOP 10 TENANTS
GLA(1)
m²
The Bidvest Group Ltd 58 590
Adcock Ingram Holdings Ltd 27 280
Scania SA (Pty) Ltd 23 513
Consolidated Steel Industries (Pty) Ltd 55 640
Allied Electronic Corporation Ltd 30 413
Distell Ltd 45 636
Pioneer Foods Ltd 20 122
Barloworld Ltd 18 516
Continuity SA (Pty) Ltd 11 407
DCD Group (Pty) Ltd 77 239
Sub Total 368 356
Balance of the sector 1 827 647
Total for the sector (excluding vacancies) 2 196 003
12.9
12.5
8.1
16.8
22.9
19.1
4.6
3.1
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
12.8
12.1
9.7
15.1
24.2
19.5
3.8
2.8
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Monthly
Vacant
LEASE EXPIRY (% OF GLA) LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)
ANNEXURE 22: INDUSTRIAL OVERVIEW RSA
1. Ranked in terms of gross monthly rental.
76
TOTAL GLA
m²
VACANT AREA
m²
VACANCY
%
Balance as at 1 July 2016 5 471 050 311 559 5.7
GLA adjustments (61 235) (59 776)
Disposals (109 364) (2 111)
Acquisitions 80 387 495
Developments and extensions 44 168 42 294
Leases expired in the period (1) 1 173 913
Renewals of expired leases (2) (864 234)
New letting of vacant space (534 988)
Leases terminated 173 826
Balance as at 30 June 2017 5 425 006 240 978 4.4
ANNEXURE 23: GLA & VACANCY RECONCILIATION RSA
1. 21.5% of opening balance GLA expired during the half year under review compared to 22.6% for FY16.
2. Retention of 73.6% compared to 68.7% for FY16.
77
V&A Waterfront, Cape Town
FY17 FY16
Vacancies (%) 0.8 1.4
Total arrears (Rm) 35.5 28.1
Provision for bad debts (B/S) (Rm) 5.6 8.6
Bad debts (I/S) (Rm) 2.7 1.4
Average in force escalations (%) 8.0 8.0
Renewal success rate (%) 98.2 82.3
Total letting success rate (%) 98.3 90.3
Weighted average renewal growth (%) 7.9 6.0
Weighted average future escalations on renewals (%) 7.9 8.0
Number of employees (100%) 188 186
Net property income per employee (R) 5 553 191 4 967 742
ANNEXURE 24:KEY PERFORMANCE INDICATORS V&A WATERFRONT (50%)
78
51.3%54.1%
21.6%
18.6%9.5%
8.9%17.6%
18.4%
FY15 FY16 FY17
Retail Office Fishing & Industrial Hotel & Residential
49.6%
53.9%52.6% 50.5%
20.9%
23.8%24.5%
6.1%
5.8%
6.8%
11.6%
11.4%
12.5%
7.5%
6.4%
5.7%
FY15 FY16 FY17
Retail Office Fishing & Industrial Hotel & Residential Bulk
NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE
ANNEXURE 25: V&A WATERFRONT PORTFOLIO OVERVIEW (50%)
R462mR399m R522m R6 761m R8 705mR7 766m
21.8%
9.6%
19.0%
79
ANNEXURE 26: SPLIT OF V&A WATERFRONT PROPERTY PORTFOLIO
51%
24%
7%
12%
6%
50%
22%
9%
19%22%
28%26%
24%
94%
6%
PROPERTY PORTFOLIO
BY VALUE
DEVELOPED VS.
UNDEVELOPED BY VALUE
PROPERTY PORTFOLIO
BY GLA
NET PROPERTY
INCOME
Developed UndevelopedRetail Office Fishing & Industrial Hotel & Residential Bulk
80
SECTOR
ESTIMATED COMPLETION
DATE
FY17
Rm
Developments and capital expenditure (1)
Waterway House (EY & Ferrari) Office & Retail May 2017 159.6
Grain Silo - Zeitz MOCAA and The Silo Hotel Museum & Hotel September 2017 84.6
Battery Park Parkade April 2018 52.9
No 6 Silo - Radisson Red Hotel Hotel September 2017 117.6
Other below R30m Various Various 142.9
Total 557.6
Commitments
Battery Park Parking April 2018 90.6
Dock Road Junction Office September 2018 37.1
Other below R30m Various Various 92.6
Total 220.3
ANNEXURE 27: DEVELOPMENTS & COMMITMENTS V&A WATERFRONT (50%)
1. The average yield for developments is 7.0% - 9.0% on a fully let basis.
81
FY17
Rm
FY16
Rm
INCREASE/
(DECREASE)
Gross property revenue 726 639 13.6%
Property expenses (204) (177) 15.3%
Net property income 522 462 13.0%
Other operating expenses (24) (20) 20.0%
Net finance costs (18) (11) 63.6%
Other non-distributable amounts (1) (2) (50.0%)
Distributable income 479 429 11.7%
Adjustments (19) -
Silo No 5 – PwC & Werksmans (11) -
Waterway House – EY & Ferrari (8) -
Adjusted “like-for-like” distributable income 460 429 7.3%
ANNEXURE 28: NET PROPERTY & DISTRIBUTABLE INCOME ANALYSIS V&A WATERFRONT (50%)
82
TOP 10 TENANTS (100%)
GLA(1)
m²
Allan Gray (Pty) Ltd 18 520
Nedbank Group Ltd 25 432
Legacy Hotels 16 226
Edcon Holdings Ltd 7 518
Tourvest Holdings Ltd 3 052
Sun International Hotels 17 100
Newmark Hotels 7 564
Woolworths Holdings Ltd 7 682
The Foschini Group Ltd 3 014
National Department of Public Works 17 324
Subtotal 123 432
Balance of V&A 319 132
Total for V&A Waterfront (excluding vacancies) (100%) 442 564
53
11
5
8
10
13
0
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Vacant
LEASE EXPIRY (% OF GLA)
ANNEXURE 29: V&A WATERFRONT OVERVIEW
33
11
6
11
18
21
0
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
Vacant
LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)
1. Ranked in terms of gross monthly rental.
83
TOTAL GLA
m2
VACANT AREA
m2
VACANCY
%
Balance as at 1 July 2016 206 838 2 993 1.4%
GLA adjustments - -
Developments and extensions 16 178 15 701
Leases expired in the period (1) 81 187
Renewals of expired leases (2) (79 735)
New letting of vacant space (18 694)
Leases terminated 282
Balance as at 30 June 2017 223 016 1 734 0.8%
ANNEXURE 30: GLA & VACANCY RECONCILIATION V&A WATERFRONT (50%)
1. 39.3% of opening balance GLA expired during the year under review compared to 10.1% for FY16.
2. Retention of 98.2% compared to 82.3% for FY16.
84
FY17 FY16
Vacancies (%) (1) 1.3 1.0
Total arrears (Rm) 3.4 4.7
Provision for bad debts (B/S) (Rm) - -
Renewal success rate (%) 81.4 96.0
Total letting success rate (%) 85.2 93.3
Weighted average renewal growth (%) (7.7) (0.5)
Weighted average future escalations on renewals (%) (2) 3.3 4.0
Number of employees 23 17
Net property income per employee (R) 99 695 652 112 529 412
ANNEXURE 31:KEY PERFORMANCE INDICATORS GOZ
1. Measurements and ratios are based on income and not GLA (when compared to RSA).
2. Weighted average escalation on entire portfolio WARR 3.3%.
Green Square Close, Fortitude Valley, QLD, Australia
85
50.6%48.5%
61.3%
49.4%
51.5%
38.7%
9.55
10.57
10.26
9
9.2
9.4
9.6
9.8
10
10.2
10.4
10.6
10.8
0.00
500.00
1000.00
1500.00
2000.00
2500.00
FY15 FY16 FY17
Office Industrial average exchange rate
1720
26
36
3831
FY15 FY16 FY17
NET PROPERTY INCOME NUMBER OF PROPERTIES
50.2%
55.9%
66.0%
49.8%
44.1%
34.0%
9.4
11.04
10.04
8.5
9
9.5
10
10.5
11
11.5
0.00
500 0.00
100 00.0 0
150 00.0 0
200 00.0 0
250 00.0 0
300 00.0 0
350 00.0 0
FY15 FY16 FY17
Office Industrial closing exchange rate
PROPERTY PORTFOLIO VALUE
ANNEXURE 32:GOZ PORTFOLIO OVERVIEW
R1 913mR1 631m R2 293m 5853 57R30 938mR22 024m R32 536m
NUMBER OF PROPERTIES
AUD ZAR AUD ZAR
Office Industrial Office Industrial Office Industrial
86
ANNEXURE 33:SPLIT OF GOZ PROPERTY PORTFOLIO
66%
34%29%
28%
26%
6%
5%5%
1%
28%
72%
45%
18%
14%
12%
8%2%
1%
VALUE (AUD) VALUEGLA GLA
Office IndustrialVictoria Queensland New South Wales South Australia
ACT Western Australia Tasmania
87
SECTOR DATE
FY17
Rm
FY17
AUDm
Acquisitions
15 Green Square Close, Fortitude Valley, Queensland Office October 2016 1 452.2 138.2
3 Murray Rose Avenue, Sydney Olympic Park, New South Wales Office October 2016 1 042.6 99.1
5 Murray Rose Avenue, Sydney Olympic Park, New South Wales Office October 2016 1 034.3 98.4
Vantage, 109 Burwood Road, Hawthorn, Victoria Office October 2016 852.5 81.3
Quad 3, 102 Bennelong Parkway, Sydney Olympic Park, New South Wales Office October 2016 335.1 31.9
Quad 2, 6 Parkview Drive, Sydney Olympic Park, New South Wales Office October 2016 330.2 31.4
Total 5 046.9 480.3
ANNEXURE 34:ACQUISITIONS & DISPOSALS GOZ
Disposals
28 Bilston Drive, Wodonga, Victoria Industrial December 2016 722.4 69.2
99 and 101-103 William Angliss Drive, Laverton North, Victoria Industrial December 2016 289.3 27.7
213-215 Robinsons Road, Ravenhall, Victoria Industrial December 2016 281.3 27.0
365 Fitzgerald Road, Derrimut, Victoria Industrial December 2016 186.2 17.8
670 Mcarthur Avenue, Pinkenba, Queensland Industrial September 2016 107.3 9.9
29 Business Street, Yatala, Queensland Industrial March 2017 96.2 10.3
10 Gassman Drive, Yatala, Queensland Industrial June 2017 47.2 4.5
Total 1 729.9 166.4
88
SECTOR
ESTMATAED
COMPLETION DATE
FY17
Rm
FY17
AUDm
Developments and Capital Expenditure
Building C, 211 Wellington Road, Mulgrave, Victoria Office October 2016 318.0 29.5
Other Various 155.0 17.5
Total 473.0 47.0
ANNEXURE 35: DEVELOPMENTS, COMMITMENTS & NON-CURRENT ASSETS HELD FOR SALE GOZ
Commitments
1 Charles Street, Paramatta, New South Wales Office June 2019 60.2 6.0
Other Various 90.3 9.0
Total 150.5 15.0
Non-Current Assets Held For Sale
1231-1241 Sandgate Road, Nundah, Queensland Office 1 038.6 103.5
Total 1 038.6 103.5
89
FY17
AUDm
FY16
AUDm
Increase /
(Decrease)
Gross property revenue 261.4 208.6 25.3%
Property expenses (38.1) (27.5) 38.5%
Net property income 223.3 181.1 23.3%
Adjustments (65.7) (25.5)
Acquisitions and developments (59.5) (12.2)
Disposals (6.2) (13.3)
Adjusted “like-for-like” net property income 157.6 155.6 1.3%
Office 84.9 82.6 2.8%
Industrial 72.7 73.0 (0.4%)
ANNEXURE 36:NET PROPERTY INCOME ANALYSIS GOZ
90
TOP 10 PROPERTIES BY VALUE
FAIR
VALUE
Rm
GLA
m²
1 Charles Street, Parramatta, NSW Office 3 046 32 356
70 Distribution Street, Larapinta, QLD Industrial 2 057 76 109
75 Dorcas Street, South Melbourne, VIC Office 1 806 23 811
20 Colquhoun Road, Perth Airport, WA Industrial 1 533 80 374
Optus Centre, 15 Green Square Close, QLD Office 1 385 16 442
333 Ann Street, Brisbane, QLD Office 1 162 16 369
Building C, 219 - 247 Pacific Highway, Artarmon, NSW Office 1 151 14 496
1231-1241 Sandgate Road, Nundah, QLD Office 1 039 12 980
3 Murray Rose Avenue, Sydney Olympic Park, NSW Office 973 13 423
5 Murray Rose Avenue, Sydney Olympic Park, NSW Office 973 12 386
Sub Total 15 125 298 746
Balance of GOZ 17 411 754 402
TOTAL FOR GOZ 32 536 1 053 148
TOP 10 TENANTS
GLA(1)
m²
Woolworths 350 185
NSW Police Department 32 356
Commonwealth of Australia 24 370
Linfox 58 077
GE Capital Finance Australasia(²) 15 957
Samsung Electronics 13 423
Lion 12 317
Energex 8 754
Australia and New Zealand Banking Group 13 744
Jacobs Group 8 207
Sub Total 537 390
Balance of GOZ 507 870
TOTAL FOR GOZ (excluding vacancies) 1 045 260
54
21
6
11
3
4
1
FY23 and beyond
By FY22
By FY21
By FY20
By FY19
By FY18
VacantLEASE EXPIRY (% OF INCOME)
ANNEXURE 37:GOZ OVERVIEW
1. Ranked in terms of gross monthly rental.
2. Leases to Country Road/ David Jones, with a weighted average lease term commencement of 14.5 years, will replace the existing lease to GE Capital Finance Australasia upon the lease expiry.
91
TOTAL GLA
m2
VACANCY(1)
%
Balance as at 1 July 2016 1 109 545 1.0
GLA adjustments (477)
Disposals (120 963)
Acquisitions, developments and extensions 65 043
Balance as at 30 June 2017 1 053 148 1.3
ANNEXURE 38:GLA & VACANCY RECONCILIATION GOZ
1. Vacancy ratio is based on income and not GLA (when compared to RSA).
THANK YOU
Illovo, Umhlanga Ridge, Durban