2 AGENDA Introduction and Highlights Financial Review Operational Overview RSA GOZ V&A Acquisitions, Disposals, Developments and Commitments Sustainability and CSI Prospects Annexures
4 INTRODUCTION TO GROWTHPOINT The largest listed property company on the JSE with property assets valued at R53,1 billion including 100% of Growthpoint Properties Australia (“GOZ”) and 50% of the V&A Waterfront in Cape Town Market capitalisation of R40,1 billion at 30 June 2012 (R23.00 per linked unit) Diversified property portfolio comprising 403 properties in RSA, 41 properties in Australia which is 64.5% owned and a 50% interest in the properties of the V&A Waterfront V&A Office Retail Industrial Australia Waterfront Industrial Office R13,1 billion R13,1 billion R14,6 billion R7,3 billion R5,0 billion AUD 1,57 billion Fully integrated internally managed property company employing 457 staff
5 HIGHLIGHTS FOR THE YEAR UNDER REVIEW 33.2% Return to investors for the Income yield Capital growth 7.6% 25.6% year 139,0 cents 6.1% growth Distribution per linked unit Repayment of CMBS Notes R2,0 billion New equity raised via placement R1,8 billion GOZ acquires office properties and AUD 346,2 million developments totalling Total cost Market value R1,5 billion additional investment in Jun 2012 Jun 2012 Growthpoint Properties Australia R3,1 billion R4,3 billion
6 HIGHLIGHTS FOR THE YEAR UNDER REVIEW 37.1% Return on R3,1 billion Income yield Capital growth 11.7% 25.4% Australian investment for the year New equity raised via Distribution Re- Investment Plan (supported by 42.0% R959,9 million of unit holders on average) Jun 2012 Jun 2011 Vacancies 4.0% 5.0% Formalisation of sector-specific development parameters with a R1,6 billion current development pipeline of Increase in unsecured debt to 39.0% R1,5 billion of total RSA borrowings by increasing corporate bond program by Jun 2012 Jun 2011 Growthpoint’s foreign unitholding 15.3% 11.8%
7 HIGHLIGHTS FOR THE YEAR UNDER REVIEW Inclusion in JSE – Socially Responsible Investment Index (SRI) Level 4 Honeycomb BEE rating Best reporting and communication in Investment Analysts’ Award financial services sector
8 GROWTH IN DISTRIBUTION PER LINKED UNIT Final distribution Interim distribution Cents 150 139,0 131,0 121,2 114,6 120 106,5 71,2 67,1 90 62,1 58,3 55,4 60 67,8 63,9 30 59,1 56,3 51,1 0 FY2008 FY2009 FY2010 FY2011 FY2012
9 GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION Tangible assets (R’bn) Market cap (R’bn) R’bn Cents Unit price (cents) NTAV per unit (cents) 60 2400 50 2000 40 1600 30 1200 20 800 10 400 0 0
11 SIMPLIFIED CONSOLIDATED INCOME STATEMENT Jun 2012 Jun 2011 R’ million R’ million Increase Gross property revenue 5 107 4 410 15.8% RSA 4 096 3 803 7.7% GOZ 1 011 607 66.6% Property expenses (1 102) (1 001) 10.1% RSA (997) (948) 5.2% GOZ (105) (53) 98.1% Net property income 4 005 3 409 17.5% Other operating expenses (176) (135) 30.4% Net property income after operating expenses 3 829 3 274 17.0% Finance costs (1 677) (1 237) 35.6% RSA (1 276) (950) 34.3% GOZ (401) (287) 39.7% Finance income 425 107 297.2% Investment income from V&A – distributable 369 18 1950.0% Investment income from V&A – non-distributable (76) - 100.0% Other finance income 132 89 48.3% Adjustment for NCI, foreign exchange & taxation (excl CGT & deferred tax) (182) (72) 152.8% Profit before debenture interest 2 395 2 072 15.6% Distribution for the year 2 395 2 072 15.6% Note: Average exchange rate at R8.01 /AUD (Jun 2011: R6.91/AUD) for GOZ 50% interest in V&A Waterfront included for full year in Jun 2012 (Jun 2011: 23 days)
12 12 EXPENSE TO INCOME RATIOS RSA V&A Operating expense ratio (%) Operating expense ratio (%) Property expense ratio (%) Property expense ratio (%) 35% 35% 32.1% 30% 30% 6.1% 27.6% 27.4% 26.7% 2.7% 3.1% 25% 2.2% 25% 20% 20% 15% 15% 26.0% 24.9% 24.3% 24.5% 10% 10% 5% 5% GOZ 0% 0% Jun 2012 Jun 2011 Jun 2010 Jun 2012 Operating expense ratio (%) Property expense ratio (%) 18% 16.7% 16% 15.1% 14.3% 14% 5.3% 4.7% 12% 5.6% 10% 8% 6% 11.4% 10.4% 8.7% 4% 2% 0% Jun 2012 Jun 2011 Jun 2010
13 CONSOLIDATED BALANCE SHEET (EXTRACTS) Jun 2012 Jun 2011 Increase/ R’ million R’ million (decrease) Property portfolio * 48 106 40 919 17.6% RSA 34 988 32 495 7.7% GOZ 13 118 8 424 55.7% 50% Investment in V&A Waterfront 4 912 4 950 (0.8%) Borrowings ** 19 731 19 093 3.3% RSA 13 613 14 249 (4.5%) GOZ 6 118 4 844 26.3% Linked unitholders ’ interest (NAV) 28 543 24 884 14.7% RSA 27 653 24 325 13.7% GOZ 890 559 59.2% * Includes R515m of properties reclassified as held for sale (Jun 2011 – R539m) ** Excludes fair value adjustments Note: Closing exchange rate at 30 Jun 2012 R8.35/AUD (Jun 2011 – R7.24/AUD)
14 PROPERTY PORTFOLIO RSA GOZ Total V&A Jun 2012 Jun 2012 Jun 2012 Jun 2012 Annexures R’ million R’ million R’ million R’ million Balance at 1 Jul 2011 32 495 8 424 40 919 4 783 Acquisitions 3 & 19 575 2 283 2 858 - Disposals 4 & 19 (644) (43) (687) - Foreign exchange translation - 1 349 1 349 - Developments and capital expenditure 883 831 1 714 128 Sub-total 33 309 12 844 46 153 4 911 Fair value adjustment* 1 679 274 1 953 39 Balance at 30 Jun 2012 34 988 13 118 48 106 4 950 Long-term property assets 34 473 13 118 47 591 4 950 Properties held for sale 5 515 - 515 - * Fair value adjustment represents 4.2% of investment property portfolio (excl V&A Waterfront)
BORROWINGS – LOAN TO NET ASSET VALUE & NET 15 VALUE & INTEREST COVER RATIO TANGIBLE ASSET VALUE RSA LTV (incl V&A) * % times Interest cover ratio (incl V&A) NAV (Per linked unit consolidated) Cents 50% 8 NTAV (Per linked unit consolidated) 45% 7 40% 1800 6 37.9% 35% 1638 5 1563 30% 33.9% 1600 29.9% 25% 4 1444 20% 3 1400 15% 2 3.5 10% 3.2 3.1 1200 1 5% 0% 0 1000 Jun 2012 Jun 2011 Jun 2010 800 1601 GOZ 1499 1365 600 LTV * % times 400 Interest cover ratio 60% 8 200 55.4% 7 50% 53.9% 6 0 40% 44.4% 5 Jun 2012 Jun 2011 Jun 2010 30% 4 3 20% * Based on nominal value of interest bearing borrowings and net of 2 cash balances 10% 2.2 1 1.9 1.7 0% 0 Jun 2012 Jun 2011 Jun 2010
16 BORROWINGS Jun 2012 % of total Jun 2011 % of total R’ million RSA debt R’ million RSA debt RSA Secured debt: 8 303 61.0% 11 249 78.9% Bank debt 6 853 50.3% 8 080 56.7% Institutional financier 1 450 10.7% 1 200 8.4% CMBS - - 1 969 13.8% Unsecured debt: 5 310 39.0% 3 000 21.1% Bank debt 2 000 14.7% 2 000 14.1% Corporate bonds 2 510 18.4% 1 000 7.0% Commercial paper 800 5.9% - - Total RSA debt 13 613 100.0% 14 249 100.0% GOZ Secured debt: Bank debt 6 118* 4 844* Consolidated debt 19 731 19 093 Note: Refer to Annexure 15 for a breakdown of debt * Includes a cumulative foreign exchange difference of R1,1 billion (30 Jun 2011: R379,0 million)
17 BORROWINGS (CONT’D) R750,0 million bond issue (GRT05) in Jan 2012 utilised for additional investment in GOZ Total DRIP of R959,9 million utilised for acquisitions, capital expenditure and reduction of debt RSA: 83.1% (2011: 77.7%) of interest rates fixed for a weighted average of 4.9 years (2011: 5.3 years) Unutilised committed facilities (RSA) available of R2,1 billion Growthpoint currently enjoys the following Moody’s ratings, with a stable outlook: Global long-term Baa3 Global short-term P-3 National long-term A-2.za National short-term P-2.za Subsequent to 30 Jun 2012 : R400 million commercial paper issue rolled and downscaled to R300,0 million at JIBAR + 21 basis points R400 million commercial paper issued rolled and upscaled to R500,0 million at JIBAR + 21 basis points
19 19 OPERATIONAL OVERVIEW RSA The Place, 1 Sandton Drive, Sandton
20 SIMPLIFIED INCOME STATEMENT (EXTRACTS) RSA Jun 2012 Jun 2011 R’ million R’ million Increase Gross property revenue 4 096 3 803 7.7% Retail 1 441 1 374 4.9% Office 1 712 1 555 10.1% Industrial 943 874 7.9% Property expenses (997) (948) 5.2% Retail (401) (390) 2.8% Office (390) (367) 6.3% Industrial (206) (191) 7.9% Net property income 3 099 2 855 8.5% Other operating expenses (128) (101) 26.7% Net property income after operating expenses 2 971 2 754 7.9% Finance costs (1 276) (950) 34.3% Finance income 416 101 311.9% Investment income from V&A 369 18 1950.0% Investment income from V&A – non-distributable (76) - 100.0% Other finance income 123 83 48.2% Taxation (excl CGT and deferred tax) 2 (1) 300.0% Profit before debenture interest 2 113 1 904 11.0% Note: 50% interest in V&A Waterfront included for full year in Jun 2012 (Jun 2011: 23 days)
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