YEAR END RESULTS 31 August 2013 An improving and expanding portgolio with infmatjon beatjng income growth Izak Petersen Chief Executjve Offjcer Brigitue De Bruyn Financial Director
agenda Overview Izak Petersen Property Portgolio Izak Petersen Financial Results Brigitue De Bruyn Investor Profjle and Share Performance Izak Petersen Prospects Izak Petersen Annexures 1-4 Year End Results 31 August 2013 | 1
build 1 OVERVIEW PROFILE • A REIT that has been listed since 2011 • 176 propertjes valued at R3.75bn with a total GLA of 550 656m² • A geographically and sectorally well diversifjed portgolio • 74% of portgolio by rentable area is located in Gauteng • Portgolio weighted towards retail at 54% by rental income and 53% by rentable area • One of the highest BEE ratjngs in the sector • A and B unit structure accommodates difgerent risk appetjtes STRATEGIC INTENT/GOALS • To build a diversifjed and resilient portgolio whilst preserving and delivering sustainable income growth • To increase the portgolio to R10bn in the next 3-5 years • Short to medium term goals include - Contjnue to acquire portgolio improving assets whilst disposing of underperforming non-core assets - To do strategic portgolio enhancing revamps & redevelopments - Diversify sources of debt fjnance and reduce our overall funding rate - Improve tradability & liquidity of units and get into the index - Lengthen our lease expiry profjle - Improve and retain the quality of our tenants - Improve property management processes and systems - Improve the energy effjciency of our buildings - Contjnue to keep a close watch on expenses without compromising the quality of the portgolio 2 | Year End Results 31 August 2013
build OVERVIEW INVESTMENT PROPOSITION • Stable management team • Distributjon growth history • Rapidly improving portgolio • Diversifjed portgolio • Size presents opportunity for rapid growth • Relatjve to sector, units are trading at forward yields that indicate potentjal capital appreciatjon • Low asset management fees at 30bps HIGHLIGHTS FOR 2013 • We are a REIT as from 1 September 2013 • Portgolio growth of 54% from R2.4bn to R3.75bn was driven by capital appreciatjon (8.3%) and acquisitjons (R1.1bn) • Vacancies are under control, reducing by 13% to 9.1% from 10.4%, a reductjon of 24% in industrial vacancies and 15% in retail vacancies whilst offjces remained unchanged at 15% as a result of tough market conditjons in the sector • Infmatjon beatjng distributjon growth of 7% combined, compared to Dipula’s guidance of 6.5% to 7.5% during the interim period • Market capitalisatjon grew from R1.8bn to R2.8bn • Robust balance sheet with a successful equity capital raising for a total sum of R650m and new debt facilitjes of R430m • We started making a difgerence in the communitjes we operate in through funding the Orange Farm Community Trust (OFCT) Year End Results 31 August 2013 | 3
growth PROPERTY PORTFOLIO build
growth 2 PROPERTY PORTFOLIO EXCELLENT GEOGRAPHIC SPREAD by Rentable area by Rental Income 0% 2% 2% 2% 2% 0% 4% 4% 4% 3% 3% 4% Eastern Cape 5% 6% Free State 5% 8% Gauteng Kwa Zulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape 72% 74% INVESTED IN THREE SECTORS by Rentable area by Rental Income 14% 23% Industrial Office Retail Industrial 54% 53% Office Retail 32% 24% Year End Results 31 August 2013 | 7
growth PROPERTY PORTFOLIO PORTFOLIO INCREASE THROUGH ACQUISITIONS AND CAPITAL GROWTH Sector Value of Portgolio 2013 Acquisitjons 2013 Sales Value at Change in Portgolio 31 August 2012 Cost 31 August 2013 Value % Industrial 364 739 000 78 000 000 -11 320 000 449 625 000 23.3% Offjce 631 224 000 469 000 000 -2 600 000 1 153 905 000 82.8% Retail 1 449 868 000 601 197 000 -13 925 000 2 149 714 000 48.3% Grand Total 2 445 831 000 1 148 197 000 -27 845 000 3 753 244 000 53.5% Sector GLA at 31 2013 Adjustments 2013 Sales GLA GLA at 31 Change in August 2012 Acquisitjons August 2013 Portgolio GLA GLA% Industrial 120 077 12 782 11 -4 695 128 175 7% Offjce 97 524 37 671 200 -2 794 132 601 36% Retail 243 557 59 670 -1 699 -11 648 289 880 19% Grand Total 461 158 110 123 -1 488 -19 137 550 656 19% 8 | Year End Results 31 August 2013
growth PROPERTY PORTFOLIO A GROWING IMPROVING PORTFOLIO Per prospectus - August Acquisitjons Disposals Post implementatjon of 2011 (actual) the aquisitjons (antjcipated) Number of propertjes 175 23 17 181 Total GLA (m2) 436 629 244 463 25 908 655 184 Total value (R’000) 2 109 000 2 204 177 59 146 4 254 031 Average property size (m2) 2 495 10 629 1 524 3 620 Average property value 12 051 95 834 3 479 23 503 (R’000) Average value per m2 R4 830 R9 016 R2 283 R6 493 REFURBISHMENTS, EXTENSIONS AND REDEVELOPMENTS Property Sector Locatjon GLA Refurbishment/ Value (R) Yield Status (m2) Extension/ Redevelopment Refurbishment/ Kopanong Retail Tembisa, Gauteng 4 024 5 000 000,00 9,40% WIP Extension Ivory Park, Refurbishment/ Score Ivory Park Retail 1 504 4 000 000,00 9,50% WIP Gauteng Extension 6 Old Pretoria Main Midrand, Retail 5 760 Redevelopment 23 000 000,00 9,00% Conceptual Road Gauteng Belle Ombre Retail Pretoria, Gauteng 7 838 Refurbishment 16 000 000,00 10,00% Conceptual Bochum, Bochum Plaza Retail 11 557 Extension 4 000 000,00 10,20% Completed Limpopo Range Road Kuilsriver, Extension/ Industrial 10 979 25 000 000,00 9,00% WIP Blackheath Western Cape Refurbishment Crownwood Corner Ormonde, Redevelopment/ Offjce 7 273 20 000 000,00 9,00% Conceptual (formerly Metcash) Gauteng Refurbishment Total 97 000 000.00 9.26% Year End Results 31 August 2013 | 9
growth PROPERTY PORTFOLIO GOOD QUALITY INCOME WITH A & B GRADE TENANTS OCCUPYING 85% OF TOTAL GLA Tenant Profjle Industrial Offjce Retail Total GLA % of Total GLA % of Total by GLA Tenants A Grade 49 868 89 148 181 581 320 597 66% 34,70% B Grade 52 793 15 092 22 586 90 470 19% 20,70% C Grade 14 007 5 900 53 106 73 013 15% 44,60% 484 080 100% 100,00% • Based on occupied space Tenant Profjle Industrial Offjce Retail Total Income % of Total % of Total by Rental Income Tenants Income A Grade 2 103 633 7 501 318 12 202 249 21 807 200 69% 34,70% B Grade 1 567 164 1 085 992 1 866 350 4 519 505 14% 20,70% C Grade 483 857 364 295 4 355 602 5 203 754 17% 44,60% 31 530 459 100% 100,00% • Based on projected income ABOVE INFLATION PORTFOLIO ESCALATIONS Weighted Average Lease Escalatjons Retail Industrial Offjces Total By Income 7,73% 7,54% 8,35% 7,88% By GLA 7,48% 7,33% 7,57% 7,46% Weighted Average Gross Rental m² Retail Industrial Offjces Total By Income 83,68 39,43 100,84 83,15 By GLA 73,97 37,12 85,77 67,77 10 | Year End Results 31 August 2013
growth PROPERTY PORTFOLIO REDUCING VACANCIES UNDER CONTROL 31 August 2013 31 August 2012 7% 9% Retail 15% 15% Industrial Industrial fices Offices 8% 11% • 31 August 2013 : Overall vacancy 9.1% • 31 August 2012 : Overall vacancy 10.4% 76% RETENTION RATE WITH A 10.1% RENTAL INCREASE ON RENEWALS New deals Retail Industrial Offjces Total Number of leases 61 21 20 102 Value of leases (R) 44 713 479 35 830 833 5 474 162 86 018 474 Weighted average gross rental (R m²) 64,4 32,61 74,05 45,57 Total GLA let (m²) 12 231 23 101 2 416 37 748 Weighted average escalatjon 8,70% 8,20% 6,40% 8,50% Renewals Retail Industrial Offjces Total Number of leases 73 10 33 116 Value of leases 89 269 503 13 053 723 45 766 304 148 089 530 Average gross rental expiry (R m²) 65,79 35,73 65,73 59,38 Average gross rental new (R m²) 72,63 37,75 73,12 65,38 Total GLA let (m²) 28 877 13 896 22 546 65 319 Weighted average escalatjon 8,50% 9,20% 9,30% 8,30% Average increase in renewal rate 10,40% 5,70% 11,20% 10,10% • Overall retentjon rate 76% with the bulk of the vacatjng tenants replaced as evidenced in the drop in vacancies. Year End Results 31 August 2013 | 11
growth PROPERTY PORTFOLIO LEASE EXPIRY PROFILE BY RENTABLE AREA 160 000 140 000 120 000 100 000 80 000 Retail 60 000 Industrial 40 000 Offices 20 000 Total - - y d 5 6 7 1 4 c e 1 1 1 1 3 n l - - - - l g g g a a g d 7 c b u u u u n a h A A A A 1 o V 0 t - - - - o y 1 1 1 1 2 e M 3 3 3 3 - B g u A LEASE EXPIRY PROFILE BY GROSS RENTAL INCOME 12 000 000 10 000 000 8 000 000 Retail 6 000 000 Industrial Offices 4 000 000 Total 2 000 000 - 4 5 6 7 1 1 1 1 1 3 - - - - g g g g 7 d u u u u n 1 A A A A 0 o - - - - 2 y 1 1 1 1 - e 3 3 3 3 g B u A 12 | Year End Results 31 August 2013
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