Proceedings Introduction Sandile Nomvete Highlights - PowerPoint PPT Presentation

Proceedings  Introduction Sandile Nomvete  Highlights  Unitholder profile  Financial review Bronwyn Corbett  Investment portfolio  Leasing  Capex  Challenges Sandile Nomvete  Prospects Delta Towers, Durban

Introduction Capital Towers, Pietermaritzburg 3

Introduction to Delta  Black managed REIT 23.6% growth in total investment portfolio to R8.9 billion * (Feb 2014 - R7.2 billion)   Predominantly invested in office buildings in Durban and Pretoria with diversifying investments in other sectors and Africa-focused Delta International  Level 2 BEE property charter rating  Secure long term sovereign underpin  Average property value of R102 million  Ratio of government to non-government (GLA) = 50:50 (Feb 2014 – 56:44)  Maintained A2 (ZA) short term GCR credit rating * Includes investment in Delta International 4

Snapshot Listing date: 02 November 2012 JSE classification: Real Estate Holdings & Development Asset manager: MPI Property Asset Management (Pty) Ltd JSE code: DLT Asset management fee: 0.35% 31 August 2014 28 February 2015 Linked units / shares in issue 451 042 442 458 409 836 Market capitalisation R3.69 billion R4.08 billion Share price (closing) R8.19 R8.90 NAV per share R9.28 * R10.02 No of properties 78 82 Valuation of portfolio R7.18 billion R8.4 billion Average value per property R92.1 million R102 million Gross lettable area 631 898 m² 703,103 m² Sectorial profile (Building) Office: 87% Office: 92.4% Retail: 4% Retail: 1.9% Industrial: 9% Industrial: 5.7% Tenant profile (GLA) Office - Government: 54% Office - Government: 50.1% Office - Non Gov: 31% Office - Non Gov: 39.3% Retail: 7% Retail: 4.9% Industrial: 8% Industrial: 5.7% Occupancy rate 95.3% 92.9% Weighted average net rent (per m 2 ) R 93.66 R 95.84 Weighted average escalation 7.96% 7.97% Loan to value 48.2% 49.9% Fixed : Floating 70% 70% Funding costs Ave all in rate 8.07% Ave all in rate 8.10% * Feb 2014 NAV per share restated from R8.87 to R9.28 to take into account the elimination of 2014 unitholders for distribution liability for comparison purposes 5

Management team Executive Non-Executive Sandile Nomvete JB Magwaza Jorge Da Costa Bronwyn Corbett Nooraya Khan CEO Non-Executive Independent CFO/COO Lead Independent Chairman Non-Executive Non-Executive Director Director Chairman of the Audit, Chairman of the Risk and Compliance Investment Committee, Committee Nomination and Remuneration Committee MPI Property Asset Greg Booyens Trevor Mathews Management CFO MPI Senior Property Asset Operational Other asset & property Management Asset Manager management staff Paul Simpson Dumo Motua Ian Macleod Independent Independent Independent Non-Executive Non-Executive Non-Executive Director Director Director 6

Highlights Sleepy Hollow, Pietermaritzburg 7

Highlights  Growth in full year distribution 15.7% to 84.07 cents (Feb 2014 - 72.69 cents)  Market capitalisation at Feb 2015 R4.08 billion (Feb 2014 – R3.39 billion)  NAV per share of R10.02 (Feb 2014 - R9.28 * ) growth 8%  R1 billion revenue milestone achieved  Maiden US$ distribution received from Delta International  Post year end successful oversubscribed capital raise and vendor placement of R688 million  Proposed new asset manager on more favourable contractual terms * Feb 2014 NAV per share restated from R8.87 to R9.28 to take into account the elimination of 2014 unitholders for distribution liability for comparison purposes 8

Unitholder Profile Mayor’s Walk, Pietermaritzburg 9

Unitholder profile As at 28 Feb 2015 Units held Holding Coronation Fund Managers 84 648 531 18.47% Stanlib Asset Management 68 366 413 14.92% Public Investment Corporation 67 070 701 14.63% Sanlam Investment Management 37 591 687 8.20% Grindrod Asset Management 31 061 061 6.78% Directors 25 646 826 5.60% Subtotal 314 385 219 68.59% Other 144 024 617 31.41% Total 458 409 836 100%

Financial review Block G, DTI Campus, Pretoria 11

Financial review  Debt • Diversified sources of funding • Net inflows of R138 million raised through debt capital markets at average rate of 6.84% • Maintained fixed debt at same levels as August 2014 at 70% • Surplus funds invested on access facility at 8.5%  Temporary consolidation of Delta International  Post year end • Strengthened balance sheet through capital raise and vendor placement of R688 million, with LTV decreasing from 49.9% at year end to 46.72% • First disposal of non-core asset • Introduction of dividend re-investment programme • Targeted distribution growth of 8% 12

Financial overview 28 Feb 2015 28 Feb 2014 84.07 1 72.69 2 Distribution per linked share / unit (cents) Cost to income ratio (gross) 26.0% 25.5% Cost to income ratio (net) 10.16% 10.77% Gearing level 49.9% 47.5% Weighted average interest rate 8.10% 7.5% Fixed vs. floating 70 : 30 32 : 68 Average debt fixed period (years) 2.36 3.00 R9.28 3 Net asset value per linked unit (excl deferred tax) R10.02 Average rental/m ² R95.84 R90.47 Average escalation 7.97% 7.99% 1 40.01 cpu for 6 months ended 31 Aug 2014 and 44.06 cpu for 6 months ended 28 Feb 2015 2 32.51 cpu for 6 months ended 31 Aug 2013 and 40.18 cpu for 6 months ended 28 Feb 2014 3 Feb 2014 NAV per share restated from R8.87 to R9.28 to take into account the elimination of 2014 unitholders for distribution liability for comparison purposes 13

Distributable Income Statement (extract) 28 Feb 2015 28 Feb 2014 Change % (R’000) (R’000) Net property income 696 300 442 689 57.3% Rental income 940 623 594 209 58.3% Property operating expenses (244 323) (151 520) (61.2%) Administration expenses (excluding forex losses) (51 008) (48 090) (6.1%) Net finance costs (312 415) (109 925) (184.2%) Dividend received from foreign subsidiary 18 247 - 100% Sundry income 13 590 13 348 1.8% Antecedent interest 3 425 - 100% Accrued distribution from listed investments 11 905 - 100% Taxation 2 381 (5 771) 141.3% Retained profit not distributed - (2 935) 100% Distributable income for the period 382 425 289 316 32.2% 458 409 836 1 Number of linked units / shares in issue 429 510 825 6.7% Distribution per linked unit / share (cents) 84.07 72.69 15.6% Cost to income ratio (gross) % 26.0% 25.5% 1.5% Cost to income ratio (net) % 10.16% 10.77% 5.7% 1 Shares in issue at reporting date. Total distribution of R238,245,532 (44.06 cents per unit, incl. antecedent interest) will be allocated to 540 785 974 shares in issue at record date 14

Statement of financial position (extract) 28 Feb 2015 28 Feb 2014 ( R’000) (R’000) Assets Non-Current assets 8 396 823 7 307 495 Investment property 8 393 900 6 965 730 Fair value of property portfolio 8 213 035 6 853 449 Straight line rental income accrual 180 865 112 281 Other non-current assets 2 923 341 765 Current assets 345 919 230 878 Assets classified as held for sale 2 110 030 - Non-current assets held for sale and assets of disposal group 26 500 - Total assets 10 879 272 7 538 373 Equity and liabilities Total Equity 5 074 171 1 241 855 Equity 4 620 981 1 241 855 Non-controlling interests 453 190 - Liabilities 4 632 758 6 296 518 Non-current liabilities 3 673 309 5 551 334 Current liabilities 959 449 745 184 Liabilities associated with disposal group held for sale 1 172 343 - Total equity and liabilities 10 879 272 7 538 373

Delta debt summary As at 28 Feb 2015 Type R'm 1 Weighted Ave. Rate Revolving / Liquidity Bank Facilities 1,042 7.92% Floating Bank Facilities 1,064 7.48% Fixed Bank Facilities 1,676 8.29% Total Bank Facilities 3,782 7.99% DMTN Programme 690 7.55% Total Drawn Facilities 4,472 7.90% Accrued Interest 39 N/A TOTAL 4,511 Swap Contracts 2 1,347 7.27% Fixed : Floating & Total WACC 70 : 30 8.10% 1 Reflects balances of facilities and excludes accrued interest at 28 Feb 2015 2 R362m of the Swap Contracts relates to the DMTN programme, whilst the remainder relates to bank facilities 16

Debt maturity profile 28-Feb-16 28-Feb-17 28-Feb-18 28-Feb-19 28-Feb-20 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 R’ million DMTN Programme Fixed Bank Facilities Floating Bank Facilities Revolving / Liquidity Bank Facilities Swap Contracts 17

Capital raise  Delta’s capital raise was oversubscribed, with Delta accepting R503 million at R8.90 , of which c.R370 million came from new investors  Further demand for Delta stock allowed Delta to place an additional R185 million at R8.90 through a vendor placement  Proceeds to be used for the repayment of debt, CAPEX and capital allowing Delta to complete acquisitions 28 February 2015 Post Capital Raise - May 2015 Linked units / shares in issue 458 409 836 540 785 974 R4.98 billion 1 Market capitalisation R4.08 billion R9.20 1 Share price (closing) R8.90 No of properties 82 85 Valuation of portfolio R8.4 billion R8.91 billion Average value per property R102 million R104,8 million Gross lettable area 703,103 m² c. 731,963 m² Loan to value 49.9% c. 46.72% Fixed : Floating 70% 71% Funding costs Ave all in rate 8.10% Ave all in rate circa 7.98% 1 Based on closing share price as at Thursday, 21 May 2015 18