SA Corporate December 2018 Results Presentation March 2019 INDUSTRIAL | RETAIL | OFFICE | RESIDENTIAL | REST OF AFRICA
Agenda Highlights Rory Mackey • Financial Performance Antoinette Basson • Portfolio Review Rory Mackey • Unlocking Value in the Retail Portfolio Rory Mackey • Improving the Industrial Portfolio & Reducing • Commercial Exposure Rory Mackey Building the Afhco Business Rory Mackey • Strategy & Prospects Rory Mackey • Acknowledgements Rory Mackey • Questions Team • 2
HIGHLIGHTS RORY MACKEY 3
High Level Review Distribution Themes • Full year distribution 6.0% lower than 2017 • Total NPI growth of 4.3%; LFL increased by 1.0% • Afhco portfolio NPI growth of 25.4% underpinned by a LFL NPI growth of 5.9% and greater contributions from acquisitions and developments • Retail portfolio LFL NPI growth of 2.9%; retentions of 87.1; positive reversions of 1.8% (excluding a national retailer’s negative reversion at East Point) and weighted average escalations of 7.6% • Industrial portfolio LFL NPI retracted by 2.7% Investment Strategy • Executed acquisitions and pipeline totalling R1.06bn • Executed & contracted disposals of R817m • Committed developments to be completed in 2019 and 2020 with a total project cost of R637m Capital Structure • LTV of 34.6% • 73.1% of debt fixed through a combination of fixed rate debt and interest rate swaps for a period of 2.5 years 4
FINANCIAL PERFORMANCE ANTOINETTE BASSON 5
Distribution History (CPS*) GROWTH (%) 45.00 12.0% 40.00 10.0% 35.00 21.58 22.54 20.52 8.0% 19.91 30.00 6.0% 10.8% 18.02 9.0% 8.7% 8.6% 16.47 25.00 4.0% 4.4% 20.00 2.0% 15.00 0.0% 16.28 17.68 19.66 21.44 22.38 21.70 10.00 -2.0% -6.0% 5.00 -4.0% - -6.0% 2013 2014 2015 2016 2017 2018 -8.0% 2013 2014 2015 2016 2017 2018 Interim Final * Cents per share 6
Distribution at a Glance Dec 2018 Dec 2017 % Rm Rm Variance Net Property Income - Like for Like 945.168 936.192 1.0 Net Property Income - Developments 296.675 277.661 6.8 Net Property Income - Acquisitions 132.330 67.805 95.2 Net Property Income - Buildings sold 55.168 88.858 (37.9) Net Property Income 1,429.341 1,370.516 4.3 Investment in Joint Ventures 61.668 58.960 4.6 Distribution related income - 11.631 (100.0) Net finance costs (391.958) (308.443) (27.1) Dividends from investments in listed shares 13.954 23.783 (41.3) Distribution related expenses (44.789) (45.766) 2.1 Antecedent distribution - 26.029 (100.0) Distributable earnings 1,068.216 1,136.710 (6.0) 7
Investment Properties Growth Analysis Portfolio growth underpinned by acquisitions, development expenditure and upward revaluation 19,500 19,000 1,271 18,500 ( 677 ) 18,000 17,801 ( 68 ) 17,500 442 16,833 17,000 16,500 16,000 15,500 Investment Acquisitions Improvements / Disposals Fair value Investment Properties Development adjustment Properties December 2017 costs December 2018 8
Growth in Assets and Market Capitalisation R’bn cents 25.0 600 500 20.0 400 15.0 300 10.0 200 5.0 100 0.0 0 2012 2013 2014 2015 2016 2017 2018 Total Assets (Rbn) Market Cap (Rbn) NAV per share (cents) Share Price (cents) 9
Net Asset Value 0.8 525.0 42.2 500.0 (0.1) (1.4) (3.2) 475.0 (44.2) 450.0 508.2 425.0 514.1 400.0 375.0 350.0 325.0 300.0 Opening NAV Revaluation Net exposure Other Non- NCI Distributions Distributable Closing NAV 1 January of to Zambian distributable paid earnings 30 June 2018 2018 Investment JV income December June 2018 Properties, statement 2017 Shares and items Interest Rate Swaps 10
Capital Structure Sources of Capital Debt finance sources are diversified between banks and institutional borrowings. 1.0% 2.8% 2.8% Absa Standard Bank 12.0% Investec 10.7% Syndicated Nedbank Loans State Bank of India 29.3% Institutional and DFI Debts 3.1% Equity 67.1% Standard Bank - Calgro JV 0.5% Equity Standard Bank - Calgro JV Institutional and DFI Debts Syndicated Loans 11
Group Debt Structure – at 31 Dec 2018 (excl. fixes) WAR of 8.4%, WAM of 1.7% and weighted average tenor of 1.8 years, 2.5 years excluding 2019 expiring debt 425 Revolving Credit, 8.65% Feb 2019 325 Term Loan, 8.72% 200 Feb 2019 - 270 Term Loan, 8.67% Feb 2019 - 30 Term Loan, 8.67% Feb 2019 - - Revolving Credit, 8.60% Mar 2019 200 - - Revolving Credit, 8.72% Nov 2019 300 Term Loan (Syndication), 8.95% 848 Dec 2019 - 500 Term Loan (Syndication), 8.85% Jan 2020 - Term Loan (Syndication) , 8.93% 950 Jun 2020 - Term Loan (US$), 4.39% 387 Nov 2020 - Term Loan (Syndication) , 8.97% 500 Dec 2020 - 500 Term Loan (Syndication), 9.10% Dec 2021 - 550 Term Loan (Syndication), 9.00% Dec 2021 - - 132 Cross Currency (ZAR), -9.16% Sep 2022 - Cross Currency (US$), 3.98% 143 Sep 2022 - 120 # Term Loan, 9.50% Nov 2022 - Term Loan (Syndication), 9.16% 1,000 Dec 2022 - Cross Currency (ZAR), -9.03% - 120 Jan 2023 - 143 Cross Currency (US$), 4.36% Jan 2023 - 94 Apr 2024 - * Amortising, 6.88% - 200 400 600 800 1,000 1,200 Amount Drawn (Rm) Amount Available (Rm) * AFD Fixed rate debt # SA Corporate’s 51% portion of Afhco Consortium Joint Initiative funding 12
Group Debt Structure – at 31 Dec 2018 (incl. fixes) Maturity and interest rate profile of interest-bearing debt – WAR inclusive of fixes of 8.6%. Current LTV 34.6% 425 Revolving Credit, 8.89% Feb 2019 325 200 Term Loan , 8.95% Feb 2019 - 270 Term Loan, 8.90% Feb 2019 - 30 Term Loan, 8.90% Feb 2019 - - Revolving credit, 8.84% Mar 2019 200 - Revolving credit, 8.96% Nov 2019 300 Term Loan (Syndication), 9.19% 848 Dec 2019 - 500 Term Loan (Syndication), 9.09% Jan 2020 - Term Loan (Syndication), 9.17% 950 Jun 2020 - Term Loan (US$), 3.59% 387 Nov 2020 - 500 Term Loan (Syndicaion), 9.21% Dec 2020 - 500 Term Loan (Syndication), 9.34% Dec 2021 - 550 Term Loan (Syndication), 9.24% Dec 2021 - - 132 Cross Currency (ZAR), -9.40% Sep 2022 - 143 Cross Currency (US$), 3.98% Sep 2022 - 120 # Term Loan, 9.74% Nov 2022 - Term Loan (Syndication), 9.40% 1,000 Dec 2022 - - 120 Cross Currency (ZAR), -9.26% Jan 2023 - Cross Currency (US$), 4.36% 143 Jan 2023 - 94 * Amortising, 6.88% Apr 2024 - - 200 400 600 800 1,000 1,200 Amount Drawn (Rm) Amount Available (Rm) * AFD Fixed rate debt # SA Corporate’s 51% portion of Afhco Consortium Joint Initiative funding 13
Group Interest Rate Swap Profile – 31 Dec 2018 Rate of 6.88% (weighted swap margin 0.24%) and weighted average tenor of 2.5 years. 72.9% of variable rate debt hedged by interest rate swaps. 73.1% of debt drawn is fixed (incl fixed rate debt) 540 7.86% 2023 1,234 7.45% 2022 800 7.62% 2021 1,492 5.75% * 2020 240 6.35% 2019 Swap amount (Rm), weighted average rate * Includes $27m swap at 1.79% (based on US LIBOR) 14
15 (2,000) (1,500) (1,000) 1,000 1,500 2,000 (500) 500 - Rm Balance 31 December 2017 275 Cash generated from operations net 1,024 of finance cost and taxation (1,119) Group Net Cash Flow Distributions paid Acquisitions and Improvements to (1,719) Investment Properties and Property, Plant and Equipment Disposal of investment properties 669 Other financial assets 48 Loans to developers 173 Investments in Joint Ventures 44 Letting commissions and tenant (17) installations Treasury buy back of shares (2) NCI shareholder loan 162 Net movement on local borrowings 686 Repayment of foreign borrowings (17) Balance 31 December 2018 207
PORTFOLIO REVIEW RORY MACKEY 16
Overview – Sectoral Analysis (excl. Rest of Africa JV) 2% Sectoral Profile (% of GLA) SA Corporate excluding Industrial 2% Zambian JV 25% 23% 191 Properties • Retail Total GLA 1,517,885m 2 • Dec Total Portfolio R17.0bn Dec Commercial • (Dec-17: R16.4bn) 2017 48% 2018 4% Excludes development 4% 45% • AFHCO bulk comprising of 9 properties and valued at R0.4bn. Storage 24% 23% Zambian JV 1% Sectoral Profile (% of Market Value) 1% 3 Properties • 21% 23% Industrial GLA 62,269m 2 28% 29% • Portfolio Value R1.0bn • Retail (Dec-17: R875.0m) Dec 6% Dec Commercial 2017 Like for Like Portfolio: 5% 2018 Weighted Average AFHCO • discount rate 15.3% Weighted average Storage • capitalisation rate 9.6% 43% 43% 18,047 19,679 19,967 16,532 15,798 15,917 Market Value per m² 11,208 10,559 10,565 10,511 10,643 9,606 6,922 6,231 6,453 20,000 3,304 2,403 10,000 - - Industrial Retail Commercial Storage AFHCO Average December 2016 December 2017 December 2018 17
Like for like NPI growth 2018 Portfolio Growth Retail 2.9% Commercial 1.7% Industrial -2.7% Afhco 5.9% SA Portfolio Total 1.0% 18
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