ESG at Growthpoint Werner van Antwerpen and Natalie van der Bijl
Introduction to Growthpoint Business Model INVEST EARN RENTAL Make strategic investments, through acquisition and Earn sustainable rental income by providing quality development, that improve the overall quality of the accommodation to a large and diverse base of financially portfolio and ensure long-term capital appreciation sound tenants that are secured by long-term efficiency FINANCE MANAGE Access all available sources of funding to minimise cost Manage the assets and invest the capital necessary to of capital while maintaining appropriate gearing levels ensure the properties are well-maintained and that they operate at optimum efficiency OWN DISTRIBUTE EARNINGS Own well located investments comprising a quality Grow income to distribute dividends bi-annually portfolio of office, industrial and retail properties to shareholders
Introduction to Growthpoint 29 th #1 700 STAFF largest South African REIT largest company on the JSE – market internally managed company capitalisation R71,7 bn 5 YEARS 50% 65% ownership in Growthpoint Australia inclusion in JSE SRI Index ownership in V&A Waterfront 4 th YEAR 2 nd YEAR 1 st YEAR participating in GRESB included in the DJSI participating in CDP V&A RETAIL OFFICE INDUSTRIAL AUSTRALIA TOTAL WATERFRONT R28,2 bn R33,0 bn R10,4 bn R22,0 bn R100,4bn* R6,8 bn 58 properties 184 properties 229 properties 53 properties 525 properties *Includes 100% of GOZ and 50% of V&A; excludes Stor-Age
Highlights 173,4 CENTS R18,6 bn Value of Acucap and Sycom properties acquired 7.5% GROWTH distribution per share R2,6 bn NEW EQUITY RAISED VIA DRIP 14.0 TOTAL RETURN 7.0 % income yield 54.6% 7.0% capital growth Shareholder participation 31.9% TOTAL RETURN TO GRT R607 m ADDITIONAL INVESTMENT IN GOZ - GOZ R5,9 bn total cost R10,9 bn market value 11.7% income yield 20.2% capital growth R4,2 bn R4,2 bn acquisition and development pipeline Annual distribution income
Growthpoint, an investment opportunity Top ten constituent of the FTSE EPRA NAREIT Included in the JSE Top 40 Index emerging Index Consistent record of growth and Underpinned by high-quality, physical property assets, creating value for investors diversified across sectors (Retail, Office and Industrial ) Consistent record of growth and creating value for Proven management track record investors with 7.4% compound average annual growth in distributions over the past 5 years Sustainable quality of earnings that can be projected with a high degree of accuracy
Growthpoint’s journey 2010 2015 R36 bn In property assets R100 bn R24 bn Market cap R72 bn Distribution per 121,2 cents 173,4 cents share 1 552 cents Share price 2 646 cents 1 365 cents NTAV per share 2 328 cents 431 Properties* 525 Staff 700 452 • Moody upgrade Baa2 • First issue of short-term commercial paper • Successful integration of Acucap and Sycom • 3 rd year most empowered property company • Winner of IAS Excellence in financial reporting on JSE and communications • Only 2 properties acquired for R152 m • Rebranded space to thrive • 49 properties acquired for R20 bn
Environmental Founding member of GBCSA Member of SAPOA Continued involvement in with the organisation Working with partners on industry specific issues Participant on various disclosure Member of NBI platforms Project partners and contributing to the energy discussion DJSRI, CDP, GRESB, JSE SRI
Environmental – Focus Areas Value Creation Through Sustainability Value Creation Strategic Levers Strategic Utilities Consumption Renewable Sustainable Management Efficiency (Energy mix) Development • • • Incorporating Making sure our new • Making sure we bill our • Educating and Reducing operational renewable energy and existing buildings tenants accurately. mitigating risks for cost for our tenants. strategies in our adhere to the quality our clients from an buildings. standards set out by environmental the GBCSA. sustainability perspective. SOLAR Some Key Interventions
Environmental – Electricity Price Increase Electricity cost/m2 for a large commercial tenant in Johannesburg *Data supplied by Remote Metering Solutions (RMS)
Environmental – Energy Benchmark Office Buildings Water or Electricity data for 12 Months GLA Vacancy IMPROVING EFFICIENCY IN ALL OUR BUILDINGS TO BE AT LEAST ON PAR EWP Rating Occupational Hours Illustrative ENERGY = 5 CARBON 10 0 10 5 NEUTRAL Where the building is Number of people in WATER = 3 located in South 5 BENCHMARK the building Africa 10 0 5 0 POOR Number of computers
Environmental – Energy Benchmark Office Buildings ENERGY (END JUN 2015) ENERGY (END DEC 2013) 10 10 9 9 8 8 GOOD GOOD 7 7 Energy Rating Energy Rating 6 6 5 5 4 4 POOR POOR 3 CPT 3 CPT 2 JHB & PTA 2 JHB & PTA DBN 1 1 DBN 0 0 0 20000 40000 60000 80000 0 20000 40000 60000 80000 Gross Lettable Area (GLA m 2 ) Gross Lettable Area (GLA m 2 ) Average Energy rating = 6.01 Average Energy rating = 6.55 *Excluding Tiber, Equity and Acucap
Environmental – Energy Benchmark Office Buildings ENERGY (END JUN 2015) ENERGY (END DEC 2013) 10 10 9 9 8 8 GOOD GOOD 7 7 Energy Rating Energy Rating 6 6 5 5 4 4 POOR POOR CPT 3 3 CPT JHB & PTA 2 2 JHB & PTA DBN 1 1 DBN EQUITY & TIBER 0 0 0 20000 40000 60000 80000 0 20000 40000 60000 80000 Gross Lettable Area (GLA m 2 ) Gross Lettable Area (GLA m 2 ) Average Energy rating = 6.01 Average Energy rating = 6.00 *Excluding Acucap
Environmental – Solar Installations Lincoln on the Lake – Waterfall Mall – Rustenburg North Gate Mall - JHB Durban 44kWp 574kWp 1.16MWp APPROVED Infotech – Pretoria Over 70 buildings Airport Industria - CPT 96kWp 291kWp identified and 12 currently under investigation APPROVED
Environmental – What is a Green Building? THE GBCSA RATING TOOLS CONSIST OF NINE CATEGORIES Each category consist of several sub sections Focus areas within the rating will be building specific • Management Environmental Weightings • Indoor Environment Category Scores Quality Single Score • Energy • Transport Rating • Water • Materials • Land use & Ecology • Emissions • Innovation
Some of our Successes to Date 23 Green Star rated buildings
Environmental – Our Rated Buildings Kirstenhof Building – 5 Green Star Company No. of ratings Existing Building Growthpoint Properties Limited 23 100 th Green Star Rated building in Redefine Properties 10 South Africa Melrose Arch Investment Holdings 6 V & A Waterfront Holdings 5 Attacq LTD 4 FNB First Rand 4 Nedcor Properties Ltd 4 Rabie Property Group 4 Zenprop Property Holdings 4 *GBCSA – Rated buildings as of June 2015
Environmental In association with
Governance Tax Act 25bb Listed in 1987 Working with National Treasury Independent governance journey since 2007 Adherence to regulation and best practice Policies JSE Listing Requirements applicable to REITs Continual assessment and development SA REIT Previously Property Loan Stock Association Driver of legislative dispensation for SA REITs
Social Aligned with the core business Spent just short of R15m in the FY15 Entrepreneurship Property Point Education Growsmart Bursary programmes Infrastructure Various projects Solar projcect Rental subsidies Currently 5 beneficiaries Staff engagement HALO G 2
Social Policies Transformation Level 3 BBBEE Rating Ccontinual assessment and development Health and Safety Employee Development and Training Internal focus and work closely with external partners Excess of R6 million spent on staff Adherence to regulation and best practice Employee Wellness Ongoing support to staff Adhere and implements best practices where applicable
SOME OF OUR SUCCESSES TO DATE Overall winner of the 2015 IPD Direct Property Investment Award 2014 2014 Overall Green Award for No. 1 Silo, V&A Waterfront Included in the JSE SRI Index 2014 LUX 2014 Project of the Year award for the low-energy OVER ALL WINNER – 2013 FINANCIAL lighting installation program Awarded top performing YEAR Property fund over 3 years to European Community Support December 2013 Finalist for The Eco-Logic Award for Growsmart Awards 2014 - Energy Reduction The Eco-Logic Awards 2014 - Certificate of merit for the category Recycling BEST REPORTING AND COMMUNICATION AWARD, SECTOR WINNER, PROPERTY World Economic Forum FOR THE 2014 FINANCIAL Global Growth Company Participant in CDP since 2011 2014 2014
Thank You
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