SA Corporate June 2017 Interim Results Presentation August 2017 - PowerPoint PPT Presentation

SA Corporate June 2017 Interim Results Presentation August 2017

Agenda Highlights Rory Mackey • Financial Performance Antoinette Basson • South African Portfolio Review Rory Mackey • Unlocking Value in the Retail Portfolio Rory Mackey • Re-Inventing C&I Rory Mackey • Zambian Portfolio Performance Rory Mackey • Building the Afhco Business Rory Mackey • Storage Genie Rory Mackey • Strategy & Prospects Rory Mackey • Acknowledgments Rory Mackey • Questions Team • 2

HIGHLIGHTS RORY MACKEY 3

High Level Review • Distribution Themes • Anticipated weaker H1 vs 2017 FY together with challenging economic conditions • H1 2017 distribution growth of 4.4% higher than June 2016 • NPI growth of 13.8%; LFL increasing by 4.1%; acquisitions contributed 8.3% • Industrial portfolio - strong retentions (82.1%); low vacancies (1.6%); LFL NPI growth of 4.0% • Retail portfolio NPI growth of 19.7%; LFL increasing by 6.0%; strong retentions of 92.0%; positive reversions of 6.6% and escalations of 7.6% • Decisive interventions in the Afhco portfolio to address challenges in the Joburg inner-city residential portfolio to position for future sustainable growth; Afhco LFL NPI growth of 4.2% • Commercial LFL NPI declined by 0.5%; reduction in exposure decreased vacancies to 6.7% • Investment Strategy • Executed acquisitions and pipeline increased to R3.2bn • Executed & contracted disposals of R746m; R312m in addition to those reported at end February 17 • Developments in progress outstanding expenditure of R813m in completing retail, industrial and residential redevelopments • Capital Structure • Equity issuance of R600m • Debt well hedged at 81.0% with expiring swaps renegotiated to improve tenors 4

FINANCIAL PERFORMANCE ANTOINETTE BASSON 5

Distribution History 45.00 43.02 39.57 40.00 35.70 32.75 35.00 30.15 30.00 21.58 19.91 25.00 18.02 16.47 14.98 20.00 15.00 10.00 15.17 16.28 17.68 5.00 19.66 21.44 22.38 - 2012 2013 2014 2015 2016 2017 Interim Final 6

Distribution Growth 25.0% 20.0% 10.5% 15.0% 9.4% 8.4% 9.9% 10.0% 3.5% 11.2% 9.1% 8.6% 5.0% 7.3% 5.7% 4.4% 0.0% 2012 2013 2014 2015 2016 2017 Interim Final 7

Distribution at a Glance Jun 2017 Jun 2016 % Rm Rm Variance Net Property Income - Like for Like 439.07 421.59 4.1 Net Property Income - Developments 164.24 124.19 32.2 Net Property Income - Acquisitions 58.45 9.14 539.5 PY lease Net Property Income - Buildings sold/held for sale 12.19 37.13 (67.2) cancellation Net Property Income set-off 673.95 592.05 13.8 against Investment in Joint Venture transactional 30.73 31.77 (3.3) income Distribution related income 10.67 - 100.0 Net finance costs (153.25) (109.72) 39.7 Dividends from fixed property companies 0.37 - 100.0 Distribution related expenses (21.45) (23.61) (9.1) Distributable earnings 541.02 490.49 10.3 Distribution per share (cents) 22.38 21.44 4.4 8

Investment Properties Growth Analysis Portfolio growth underpinned by acquisitions, development expenditure and upward revaluation 16,400 16,200 16,000 237 15,800 15,625 332 (450) 371 15,600 15,400 113 15,200 15,022 15,000 14,800 14,600 14,400 Investment Acquisitions and Acquisitions Improvements / Disposals Fair value Investment Properties improvements development costs adjustment Properties June December 2016 through business 2017 combination 9

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 Jun 2013 Jun 2014 Jun 2015 Jun 2016 Jun 2017 Total Assets (Rbn) Market Cap (Rbn) NAV per share (cents) Share Price (cents) 10

Net Asset Value 11.45 550 0.19 22.38 525 (0.74) (0.08) 500 (21.58) 475 499.28 450 510.90 425 400 375 350 325 300 Opening NAV Distributable Revaluation of Net exposure Net Other Non- Distributions Closing NAV 1 January earnings for Investment to Zambian JV repurchase of distributable paid to 30 June 2017 2017 the period Properties, treasury income shareholders Shares and shares statement Interest Rate items Swaps 11

Capital Structure Sources of Capital Debt finance sources are diversified between banks and institutional borrowings. 3.1% 3.3% 1.1% 3.2% Absa 9.4% Nedbank Syndicated Loans Standard Bank 20.1% State Bank of India Investec Bank Revolvers 0.9% Institutional and DFI Debts 3.6% Bank Term Debts 4.8% Equity 70.6% Equity Bank Term Debts Institutional and DFI Debts Bank Revolvers Syndicated Loans 12

Group Debt Structure – at 30 June 2017 (excl. fixes) Maturity and interest rate profile of interest-bearing debt WAR of 8.5%, weighted average tenor of 2.2 years, and WAM of 1.7%. Loan type: * 6.88% Amortising Apr 2024 121 - 9.17% Term Loan (Syndication) Dec 2021 550 - 2.97% Term Loan (US$) Nov 2020 353 - 9.10% Term Loan (Syndication) Jun 2020 950 - 9.12% Term Loan (Syndication) Dec 2019 848 - 8.79% Revolving credit Mar 2019 159 41 8.78% Term Loan Jan 2019 500 - 8.72% Revolving credit Nov 2018 - 300 8.99% Term Loan Sep 2018 30 - 8.99% Term Loan Sep 2018 270 - 9.04% Term Loan Aug 2018 200 - # 8.82% Term Loan (Syndication) Dec 2017 1,152 - 0 200 400 600 800 1,000 1,200 Amount Drawn Available * - AFD Fixed Rate Debt # - Maturing Q4 2017 13

Group Debt Structure – at 30 June 2017 (incl. fixes) Maturity and interest rate profile of interest-bearing debt – WAR inclusive of fixes of 8.5%. Current LTV 31.1% Loan type: 6.88% Amortising Apr 2024 121 - 9.15% Term Loan (Syndication) Dec 2021 550 - 3.59% Term Loan (US$) Nov 2020 353 - 9.08% Term Loan (Syndication) Jun 2020 950 - 9.10% Term Loan (Syndication) Dec 2019 848 - 8.77% Revolving credit Mar 2019 159 41 8.76% Term Loan Jan 2019 500 - 8.70% Revolving credit Nov 2018 - 300 8.97% Term Loan Sep 2018 30 - 8.97% Term Loan Sep 2018 270 - 9.02% Term Loan Aug 2018 200 - 8.80% Term Loan (Syndication) Dec 2017 1,152 - 0 200 400 600 800 1,000 1,200 Amount Drawn Available 14

Group Swap Profile – 30 June 2017 Tenor and interest rate swaps profile – weighted average tenor – 3.3 years and rate of 6.8% (weighted swap margin -0.025%). 81.0% of variable rate debt hedged by swaps. 81.5% of effective debt fixed (incl fixed rate debt) 2023 8.45% 240 7.45% 2022 1,234 2021 650 7.60% 2020 753 4.72% * 6.35% 2019 240 2018 705 7.27% 2017 240 5.89% - 500 1,000 1,500 Swap amount * Includes $27m swap at 1.79% (based on US LIBOR) 15

16 (1,000) 1,000 (500) 500 Rm - 191 Balance 31 December 2016 643 Cash generated from operations Group Net Cash Flow (178) Net finance costs Net Acquisition of Property, Plant and (3) Equipment Acquisitions and Improvements to (721) Investment Property (16) Investment in Joint Venture Prepayments/Advances to developers (225) and movements in other financial assets Letting commissions and tenant (11) installations 452 Disposal of investment properties (522) Distributions paid Repurchase/Vesting of treasury shares (2) Interest bearing borrowings - foreign (9) 559 Interest bearing borrowings - local 158 Balance 30 June 2017

Trading Volumes and Liquidity SAC: closing price v monthly volume traded Value traded as % of market capital 580 120,000,000 90% 570 80% 100,000,000 560 70% EMI 550 80,000,000 FFA GRT 60% RDF 540 HYP 60,000,000 50% 530 FFB 40% 520 40,000,000 SAC VKE 510 30% RES 20,000,000 500 20% IPF 490 - Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 10% 0% Volume Traded Closing Price ( c ) - 20,000 40,000 60,000 80,000 100,000 17

SOUTH AFRICAN PORTFOLIO REVIEW RORY MACKEY 18

Overview – Sectoral Analysis (excl. Rest of Africa JV) Sectoral Profile (% of GLA) 20% 13% 5% 55% Industrial 4% June Retail June SA Corporate excluding 51% 2017 Zambian JV 2016 Commercial 188 Properties • AFHCO 27% Total GLA 1,455,239m 2 • 25% Total Portfolio R15.6bn • (Dec-16: R15.0bn) Sectoral Profile (% of Market Value) 15% 19% Zambian JV 34% 30% 3 Properties • GLA 57,649m 2 Industrial 8% • Portfolio Value R856.8m • 7% Retail June (Dec-16: R860.8m) June 2016 Commercial 2017 Traditional standing AFHCO Portfolio: Weighted Average • discount rate 15.0% 44% 43% Weighted average • capitalisation rate 9.0% 18,699 18,047 16,803 Market Value per m² 15,798 15,294 14,890 11,554 10,559 10,511 10,260 9,690 9,260 6,379 20,000 5,989 6,231 10,000 - Industrial Retail Commercial AFHCO Average June 2016 December 2016 June 2017 19

Property Portfolio Acquisitions, Disposals and Developments 3,000 12.00% 2,500 10.00% 2,000 8.00% 1,500 6.00% 10.4% 10.7% 9.5% 8.8% 9.1% 8.1% 1,000 4.00% 500 2.00% 2,147 507 2,711 459 287 - 0.00% Committed Acquisitions Contracted Disposals Contracted and Group WACC Developments Acquisitions unconditional disposals Cost / Carrying Value (Rm) Selling Price (Rm) Yield forecast 1st 12 months Exit yield on sales price 20