Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
1
1 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
INTERIM RESULTSFOR SIX MONTHS ENDED 28 FEBRUARY 2017
2 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
AGENDA
BUSINESS & PORTFOLIO OVERVIEW
FINANCIAL OVERVIEW
LOOKING AHEAD
01
02
03
QUESTIONS & ANSWERS04
2
3 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
JSE sectorReal Estate Investment and Services: Diversified REITS
Date listed 17 August 2011
Closing price (28 Feb 2017) DIA R10.50 | DIB R11.95
Market capitalisation (28 Feb 2017) R4.7 billion
Asset manager Dipula Asset Management Trust
Lead property managers Broll | DPM | McCormick | Moolman Group
Shareholding A & B shares (different risk appetites)
Credit rating BBB (ZA) long term, A3 (ZA) short term
B-BBEE Level 2
DIPULA AT A GLANCE
South African focused well DIVERSIFIED REIT that invests in retail, office and industrial property. Dipula is managed by an external MANCO
and management holds a sizable stake in the fund, thus ensuring goal alignment with all shareholders.
4 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
DIPULA AT A GLANCE
Retail
Office
Industrial
Western Cape
Northern Cape
Limpopo
KwaZulu-Natal
Gauteng
Free State
Eastern Cape
North West
Mpumalanga
21 4
5 2
6
4 2 1
6 1
1 2
6
11 1
69 27 24
7
7
120
25
712
6
3
6
Sectoral split by province (193 properties)
129
32
32
3
BUSINESS AND
PORTFOLIO OVERVIEW01IZAK PETERSEN (CEO)
TRADING ENVIRONMENTHIGHLIGHTS STRATEGY PORTFOLIO
6 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
R400m
Non-core disposals
28
including post period
R500m
Acquisitions
R200m
Capital raised
to date
R194m
Distributable
earnings
Up 9.5%
Up 6,3%
Combined dividends
per share
HIGHLIGHTS
80%
Interest rate hedging
in excess of
In progress
R200mRevamps
4
BUSINESS AND
PORTFOLIO OVERVIEW 01IZAK PETERSEN (CEO)
TRADING ENVIRONMENT STRATEGY PORTFOLIOHIGHLIGHTS
8 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
TRADING ENVIRONMENT
› Continued pressure on tenants on the back of weak economic fundamentals
› Increasing funding costs will result in lower distribution growth and muted
acquisition activity
› Political environment not conducive to business confidence
› Violent service delivery protests destructive
› Unrealistic municipal valuations leading to higher cost of occupancy
› Electricity costs moderating while other municipal costs are accelerating
but service delivery remains weak
› Slowing speed of renewals - particularly government
› Tenants require less space, more flexibility and are spoilt for choice
in the office sector
› Mini industrial parks have a high turnover of tenants
› Retailers still looking to expand but are resisting higher rentals
5
BUSINESS AND
PORTFOLIO OVERVIEW 01IZAK PETERSEN (CEO)
STRATEGYTRADING ENVIRONMENT PORTFOLIOHIGHLIGHTS
10 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
STRATEGY
› Maintaining a diversified portfolio with a retail bias
› Building blocks for residential entry in place
› JV for greenfield and brownfield high value retail opportunities well on track
› Refurbish assets and improve yields through high yielding solar projects
› Pursue sensible corporate action and selective acquisitions
› Rebalance portfolio through strategic disposals
› Conservative management of balance sheet through interest rate hedging
and diversified debt tenure and sources
6
BUSINESS AND
PORTFOLIO OVERVIEWIZAK PETERSEN (CEO)
01
TRADING ENVIRONMENT STRATEGYHIGHLIGHTS PORTFOLIO
12 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
58%
14%
9%
6%
4%
3%2%2%2% Gauteng
Limpopo
Eastern Cape
KwaZulu-Natal
North West
Free State
Mpumalanga
Western Cape
Northern Cape
OUR PORTFOLIO AT 28 FEBRUARY 2017
Geographic split by GLA Sectoral split by GLA
789 753m²
Total
GLA
R36m
Average
property value
R7bn
Average value
per m² by GLA
4 092m²
Average
property size
R8 842193 properties
7,8%
Average
escalation
Portfolio
value
61%
15%
24%
Retail
Office
Industrial
7
13 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
LEASE EXPIRY PROFILE
Average monthly gross income
Vacant
Expiring before 31 Aug 2017
Expiring before 31 Aug 2018
Expiring before 31 Aug 2019
Expiring before 31 Aug 2020
Expiring after 31 Aug 2020
Total portfolio
GLA (000m²) Rm
GLA (000m²) Rm GLA (000m²) RmGLA (000m²) Rm
72
195
124 125
60
205
15,7
10,612,2
6,8
18,0
0
3
6
9
12
15
18
21
-
50
100
150
200
250
300
37 67
72 94
42
158
6,27,8
10,5
5,9
14,7
0
4
8
12
16
-
50
100
150
200
250
Retail Office Industrial
18
64
10 7 10 8
6,7
0,80,5 0,6 0,9
-2
0
2
4
6
8
-
50
100
150
200
250
17
64 42
24 8
39
2,8
2,01,2
0,3
2,3
-2
0
2
4
-
50
100
150
200
250
14 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
Retail Office Industrial Total
Number of leases 80 11 3 94
Value of leases 71 563 616 5 031 356 3 226 224 79 821 196
Weighted average gross rental (R/m²) 98.02 96.06 35.78 95.42
Total GLA let (m²) 13 227 1 131 2 006 16 364
Weighted average escalations 8.6% 9.7% 8.0% 8.6%
LEASE ACTIVITY - 1 Sep 2016 to 28 Feb 2017
New leases
Retail Office Industrial Total
Number of leases 85 12 9 106
Value of leases 150 313 727 13 308 898 15 930 185 179 552 810
Average gross rental expiry (R/m²) 104.72 66.07 49.39 83.83
Average gross rental new (R/m²) 103.64 85.39 53.69 88.65
Total GLA renewed (m²) 26 573 11 177 10 353 48 102
Weighted average escalations 7.3% 7.4% 6.8% 7.2%
Average increase in renewal rate -1.0% 29.3% 8.7% 5.7%
Renewals
8
15 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
LEASE ACTIVITY (CONTINUED)
Renewals
New leases
› Overall 89%
› Retail 84%
› Offices 97%
› Industrial 81%
Tenant retention rate
85%
12%3%
81%
7%
12%
80%
11%
9%
55%
23%
22%
Total new GLA let: 16 364m²Number of new leases: 94
Number of leases renewed: 106 Total GLA renewed: 48 102m²
16 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
VACANCIES
Retail 7.9%
Office 15.1%
Industrial 8.8%
(29 Feb 2016: 7.6%)
(29 Feb 2016: 11.7%)
(29 Feb 2016: 11.5%)
Vacancies 9.2% (29 Feb 2016: 9.2%)
9
17 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
WEIGHTED AVERAGE ESCALATIONS & RENTALS
Gross rentals (R/m²)
Retail Office Industrial Portfolio
By income 115.17 115.62 55.04 106.76
By GLA 104.16 105.42 51.12 91.07
Escalations
Retail Office Industrial Portfolio
By income 7.6% 8.9% 7.8% 7.8%
By GLA 7.5% 8.9% 7.9% 7.8%
18 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
67%
20%
14%
A grade B grade C grade
71%
15%
14%
TENANT PROFILE
By GLA By rental income
Shoprite Group 8%
Department of Public Works 7%
Pepkor Group 3%
Mass Stores 3%
Pick 'n Pay Group 3%
General Motors South Africa 2%
Edcon Group 2%
Cashbuild 2%
Spar Group 2%
Standard Bank 2%
Top 10 tenants by GLA
10
19 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
TOP TEN PROPERTIES
31% of total portfolio by value
Building Name Region
Feb 2017
GLA
Value as at
31 August 2016
Rm
1 Eyethu Orange Farm Mall * Gauteng 24 813 392,0
2 Gillwell Taxi Retail Park Eastern Cape 22 090 305,8
3 SAPS VIP Gauteng 21 478 290,0
4 Umzimkhulu Mall KwaZulu-Natal 15 740 207,0
5 Nquthu KwaZulu-Natal 14 912 184,8
6 Gezina Galleries Gauteng 16 669 175,0
7 Corporate Park II Polokwane Limpopo 28 058 169,5
8 Bochum Plaza Limpopo 12 081 164,0
9 Kopanong Kudube Shopping Centre Gauteng 10 755 157,0
10 Tower Mall North West 15 436 153,6
182 031 2 198,7
Retail Office Industrial
* Dipula owns 30%
20 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
TOP TEN RETAIL PROPERTIES
42% of retail portfolio by value
Building Name Region
Feb 2017
GLA
Value as at
31 August 2016
Rm
1 Eyethu Orange Farm Mall * Gauteng 24 813 392,0
2 Gillwell Taxi Retail Park Eastern Cape 22 090 305,8
3 Umzimkhulu Mall KwaZulu-Natal 15 740 207,0
4 Nquthu KwaZulu-Natal 14 912 184,8
5 Gezina Galleries Gauteng 16 669 175,0
6 Bochum Plaza Limpopo 12 081 164,0
7 Kopanong Kudube Shopping Centre Gauteng 10 755 157,0
8 Tower Mall North West 15 436 153,6
9 Ziyabuya Shopping Centre Eastern Cape 14 578 125,3
10 Hammanskraal Shopping Centre Gauteng 11 286 123,6
158 360 1 988,1
* Dipula owns 30%
11
21 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
TOP TEN OFFICE PROPERTIES
69% of office portfolio by value
Building Name Region
Feb 2017
GLA
Value as at
31 August 2016
Rm
1 SAPS VIP Gauteng 21 478 290,0
2 SAPS IJS Gauteng 7 874 124,7
3 Steve Biko Corner Gauteng 5 048 91,3
4 Boardwalk Place Midrand Gauteng 6 455 78,6
5 50 Hamilton Street Gauteng 4 500 59,2
6 Nemisa Office Building Gauteng 3 600 52,1
7 Finance House Gauteng 8 451 48,4
8 Sanburn Building Benoni Gauteng 6 757 37,8
9 Byron Place Gauteng 3 272 36,2
10 Bruma Boulevard Gauteng 4 623 36,0
72 058 854,3
22 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
TOP TEN INDUSTRIAL PROPERTIES
71% of industrial portfolio by value
Building Name Region
Feb 2017
GLA
Value as at
31 August 2016
Rm
1 Corporate Park II Polokwane Limpopo 28 058 169,5
2 New Brighton PE Eastern Cape 23 099 151,3
3 Sterkolite Building Gauteng 12 782 81,5
4 Renaissance Park Gauteng 10 680 78,5
5 Range Road Blackheath Western Cape 10 980 52,6
6 Tedstone Park Wadeville Gauteng 6 940 40,0
7 Vana Road Gauteng 8 195 36,0
8 SIFON Park Gauteng 9 300 34,0
9 Bernie Street Gauteng 6 342 30,8
10 14 Mandy Road Gauteng 7 115 25,8
123 491 700,0
12
23 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
ACQUISITIONS
› Total of R500m
› Yields ranging between 9% to 10.5%
› Value adding opportunities
› Predominantly retail
› 5 assets with GLA of 33 689m² + 20% Moolman JV buyout
› Average size 6 732m² per property
› Average value R73m (excl. Moolman JV properties)
› New Moolman JV at an advanced stage
› Expecting to commence first residential JV in next 6 to 12 months
24 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
DISPOSALS
› Total of 28 properties, mainly in remote locations
› Average yield 10%
› Total GLA sold 49 819m² with 7 000m² vacant
› Average size 1 779m²
› Average value R14.2m
› Capital recycled into redevelopments and strategic land purchases
› Disposals to improve management efficiency
13
25 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
REDEVELOPMENTS & REVAMPS
Retail Office Industrial
Property Description
Property
type
Capex
amount
(Rm)
Original
GLA
New GLA /
units
Anticipated
completion
Capex to
28 Feb 2017
(Rm)
Outstanding
capex
(Rm)
Completion 2017 / 2018
Nemisa Existing office re-development Office 54,0 3 600 5 042 June 2017 12,0 42,0
HammanskraalAdditional parking and general
centre upliftmentRetail 13,0 11 286 11 286 Nov 2017 - 13,0
Pimville SquareAdditional Cashbuild and general
upgradeRetail 4,0 4 291 5 591 Nov 2017 - 4,0
Palm Court Upgrade Retail 14,0 6 307 6 307 Nov 2017 - 14,0
MeadowpointAdditional Cashbuild & PnP
extension and upgrade.Retail 26,4 4 559 5 919 Apr 2018 - 26,4
Gezina GalleriesAdditional retail added and general
upgradeRetail 18,1 16 670 18 435 Sep 2018 - 18,0
Proteapoint Retail Extension and upgrade Retail 40,2 3 866 7 079 Nov 2018 - 40,2
Proteapoint
ResidentialDevelopment of 111 residential units Residential 43,1
-111 May 2019 - 43,1
212,8 200,8
Residential
FINANCIAL REVIEW02RIDWAAN ASMAL (CFO)
14
27 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
› Revenue (excl. straight-line) 7.1%
› Distributable earnings 9.5%
› Total assets 5.1%
› Total liabilities (0.9%)
FINANCIAL HIGHLIGHTS
28 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
KEY GROWTH INDICATORS
Distribution growth per share
Combined 6.3%
DIA 5.0%
DIB 7.9%
Net asset value per share
7.0%
15
29 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
DISTRIBUTION GROWTH
cps
41,67 43,75
45,94 48,24
50,65
29,80 32,34
35,35 38,78
41,84
71,47
76,09
81,29
87,02
92,49
0
10
20
30
40
50
60
70
80
90
100
Feb 2013 Feb 2014 Feb 2015 Feb 2016 Feb 2017
A-share B-share Total
5.0%
8.5%
6.5%
5.0%
9.3%
6.8%
5.0%
9.7%
7.0%
5.0%
7.9%
6.3%
30 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
COMBINED MARKET PRICE TO NAVcents
2009
1690
2170
1792
2245
14381584 1666 1882
2014
39,7%
6,7%
30,3%
-4,8%
11,5%
-80%
-60%
-40%
-20%
0%
20%
40%
0
500
1000
1500
2000
2500
3000
Feb 13 Feb 14 Feb 15 Feb 16 Feb 17
Market price NAV Premium/(discount) to NAV
1059970
11201002
1050
950
720
1050
790
1195
500
800
1 100
1 400
Feb 13 Feb 14 Feb 15 Feb 16 Feb 17
DIA DIB
cents
16
31 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
STATEMENT OF COMPREHENSIVE INCOME (EXTRACTS)
28 Feb 2017
R 000
29 Feb 2016
R 000
Variance
(%)
Revenue 526 620 491 838 7,1%
Property expenses (184 434) (175 762) 4,9%
Net property income 342 186 316 076 8,3%
Administration and corporate costs (17 559) (17 766) (1,2%)
Net operating profit 324 627 298 310 8,8%
Net finance cost (125 713) (114 413) 9,9%
Antecedent dividend 1 642 1 113 47,5%
Non-controlling interests (6 366) (7 692) (17,2%)
Distribution 194 190 177 318 9,5%
Distribution per A-share 50,64892 48,23707 5,0%
Distribution per B-share 41,83993 38,78144 7,9%
Combined distribution 92,48885 87,01851 6,3%
Gross property cost to income ratio 35,0% 35,7%
Net property cost to income ratio 18,0% 19,3%
Total cost to income ratio 22,2% 23,8%
32 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
SECTORAL PERFORMANCE (2017 v. 2016)
Net property incomeProperty expensesRevenue
71%
16%
13%
72%
17%
11%
70%
15%
15%
70%
17%
13% 71%
17%
12%69% 17%
14%
Feb 2016
Feb 2017
17
33 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
STATEMENT OF FINANCIAL POSITION (EXTRACTS)
28 Feb 2017
(R 000's)
29 Feb 2016
(R 000's)
Variance
(%)
Non-current assets 6 742 881 6 779 046 (1%)
Current assets 275 398 192 896 43%
Non-current assets held for sale 336 722 27 716 1 115%
Total assets 7 355 001 6 999 658 5%
Interest-bearing liabilities 2 861 162 2 885 186 (1%)
Other liabilities 137 047 141 621 (3%)
Total liabilities excluding debentures 2 998 209 3 026 807 (1%)
Net assets 4 356 792 3 972 851 10%
Loan to Value (LTV) 39,20% 42,00%
Net asset value per A-share R 10,07 R 9,41 7%
Net asset value per B-share R 10,07 R 9,41 7%
34 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
51
844
234
128
61
(1 251)
(184)
(114)
270
63
(2 000) (1 000) 0 1 000
105
(26)
59
(8)
71
(50)
(205)
(126)
330
59
(400) (200) 0 200 400
CASH FLOW - Rm
Opening balance
Cash generated from operations
Net finance cost
Distribution paid
Acquisitions and capex
Equity raised
Closing balance
Disposals
Debt funding (repaid) / raised
Non-controlling interest
28 Feb 2017 29 Feb 2016
(1 000)(2 000)
18
35 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
DEBT PROFILE
4,1%
43,9%
27,1%
13,5%11,4%
4,1%
29,9%
15,6%
20,9%
0%0%
10%
20%
30%
40%
50%
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Debt expiry Hedge expiry
› 70.6% of debt hedged (48% at 29 Feb 2016, 82.1% at 30 Apr 2017)
› R1,3bn debt maturing FY2018 (advanced stages of refinance)
› Weighted average cost of debt 9.06%
› Average length of facilities and hedges 2 years
LOOKING AHEAD03 IZAK PETERSEN (CEO)
19
37 INTERIM RESULTS – SIX MONTHS TO 28 FEBRUARY 2017
LOOKING AHEAD – 2017 PRIORITIES
› Complete 4 of the 8 planned revamps by Dec 2017
› Continue to focus on vacancies, tenant retention, arrears and renewals
› Complete solar projects at Nemisa and Tower Mall
› Implement Manco internalisation and launch long-term incentive scheme
› Refinance debt facilities expiring in 2017 / 2018
› Guidance 5% - 6.5%
QUESTIONS & ANSWERS04