JCCI PRESENTATION Tuesday 26 July 2016 The Place, Sandton AGENDA - - PowerPoint PPT Presentation

JCCI PRESENTATION

Tuesday 26 July 2016

The Place, Sandton

AGENDA

 SA Listed Property  SA Economic Review  Growthpoint Overview

Meadowbrook Estate, Germiston

SOUTH AFRICAN LISTED REAL ESTATE

Willowbridge, Cape Town

4

SIZE OF THE SECTOR

SAPY Market Cap (R bil) Monthly Value of SAPY Shares Traded (R bil)

36 53 71 100 95 103 129 144 198 226 321 419 447

100 200 300 400 500

• 5

10 15 20 25

Source: INET-BFA

5

SIZE OF THE SECTOR

R363 billion R137 billion R108 billion R65 billion

REITs (JSE primary) Non-REITs (JSE primary) REITs (JSE secondary) Non-Reits (JSE secondary)

SAPY Listed Property Index JSE Real Estate Sector

72 56 52 51 36 32 32 18 14 12 12 10 8 7 7 7 6 5 5 5

10 20 30 40 50 60 70

Market Cap (R billions) REITs Non-REITs

Source: INET-BFA

6

LISTED PROPERTY BY ASSET CLASS

SOUTH AFRICA DEVELOPED EUROPE NORTH AMERICA

Retail, 51% Office, 27% Industrial 15% Hotels, 2% Resi, 3% Other, 2% Diversif, 34% Retail, 26% Office, 10% Resi, 21% Health, 1% Industrial 6% Other, 1% Diversif, 11% Retail, 28% Office, 11% Resi, 16% Health, 13% Industrial 5% Resorts, 5% Storage, 7% Other, 3%

• Retail, office and industrial assets make up 93% of the SA listed property market
• In North America and Developed Europe there is more diversification among other property sectors

Source: EPRA

7

SAPY VS GLOBAL PROPERTY

• 80%
• 60%
• 40%
• 20%

0% 20% 40% 60% 80% 100% SAPY EPRA NAREIT Global (ex-US) A-REIT

The Oval, Cape Town

Source: INET-BFA

8

SAPY OFFSHORE INVESTMENTS

South Africa, 62.2% Eastern Europe, 18.4% Europe, 1.3% UK, 5.1% Australia, 4.6% USA, 6.9% Africa, 1.5%

SAPY (% of assets offshore)

51-65 Lenore Drive, Erskine Park, NSW

Source: Avior

9

INCREASED SAPY OFFSHORE EXPOSURE AT A COST

GRT share price volatility relative to SAPY GRT share price volatility relative to ALSI

0.80 0.90 1.00 1.10 1.20 1.30 1.40

β (beta coefficient) (rolling 24 months) of GRT relative to SAPY

• 0.80
• 0.60
• 0.40
• 0.20

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

β (beta coefficient) (rolling 24 months) of GRT relative to ALSI

Source: INET-BFA, Growthpoint Research

SA ECONOMIC REVIEW

Constantia Village, Cape Town

11

SOUTH AFRICAN ECONOMIC FUNDAMENTALS

FNB/BER CONSUMER CONFIDENCE UNEMPLOYMENT RATE SACCI BUSINESS CONFIDENCE

• 11
• 20
• 10

10 20

27%

20% 25% 30%

79.3

70 80 90 100 110

Source: SACCI, BER, Stats SA

12

SOUTH AFRICAN PROPERTY FUNDAMENTALS

RENTAL GROWTH (%) OPERATING COSTS (% OF RENT) VACANCY RATES (%)

2 4 6 8 10 12 14 16

Retail Industrial Office

25 30 35 40 45 50

Retail Industrial Office

2 4 6 8 10 12 14

Retail Industrial Office

Source: MSCI - IPD

13

SOUTH AFRICAN CAPITAL MARKETS

RISING EQUITY YIELDS FLAT EQUITY PRICES

• 10%

10% 30% 50% 70% 90% Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

SAPY SAPY (excl. offshore)

5% 6% 7% 8% 9% 10%

Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

RSA 10YR Bond (%) GRT Dividend Yield (forward) (%) 5 6 7 8 9 10 11 5-year swap 10-year bond

RISING INTEREST RATES

Source: INET BFA

GROWTHPOINT OVERVIEW

V&A Waterfront, Cape Town

15 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

INTRODUCTION TO GROWTHPOINT

* Includes 100% of GOZ and 50% of V&A Waterfront.

R28,9bn 58 properties 1.4m m² R33,5bn 185 properties 1.8m m² R11,2bn 230 properties 2.2m m² R29,4bn 57 properties 1.1m m² R7,0bn 1 property 0.2m m² R110,0bn*

531 properties 6.7m m²

Retail Office Industrial Australia V&A Waterfront TOTAL

16 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

Largest company

• n the JSE

INTRODUCTION TO GROWTHPOINT

Internally managed company Ownership in Growthpoint Australia South African, primary listed REIT Inclusion in FTSE/JSE Responsible Investment Index* Ownership in V&A Waterfront

*

Previously JSE SRI Index.

32nd 673

STAFF

65% #1 7th

YEAR

50%

R63,5bn

Market capitalisation

17 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

GROWTH IN DIVIDEND PER SHARE (CENTS)

FY12 FY13 FY14 FY15 FY16 Interim dividend Special dividend Final dividend GROWTH

7.2%

GROWTH

8.3%

GROWTH

7.5%

GROWTH

6.0%

7.2% 7.2% 8.5% 8.0% 7.5% 7.5%

Freestone, Sandton

139,0 161,3 149,0 173,4

71,2 82,8 76,3 44,5 67,8 78,5 72,7 84,4 44,5 6.0% 89,5

18 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

CONTRIBUTION TO DISTRIBUTABLE INCOME

157 172 198 232 334 361 170 10

HY14 HY15 HY16 RSA V&A Waterfront GOZ Listed Investments GROWTH

29.4%

GROWTH

24.3%

Nestlé, Cape Town

1 131 1 291

R1 520m R1 967m R2 444m

1 875 10.3% 74.4% 15.3% 8.8% 65.6% 17.0% 8.6% 8.1% 76.7% 14.8% 0.4%

19 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

8 855 15 852 15 781 1 450 2 053 1 803 3 081 4 480 4 115 3 409 2 659 2 659 393 400 400

HY15 FY15 HY16

Secured bank debt Secured institutional financier Unsecured bank debt and institutional financier Corporate bonds Commercial paper

(1)

RSA DIVERSIFIED BORROWINGS — NOMINAL VALUE

Debt capital market 12.0%

R25 444m R17 188m R24 758m

Traditional bank debt 88.0% Unsecured 29.6% Secured 70.4% Debt capital market 22.1% Traditional bank debt 77.9% Unsecured 40.0% Secured 60.0% Debt capital market 12.4% Traditional bank debt 87.6% Unsecured 29.0% Secured 71.0%

• 1. The total value for HY16 excludes the deferred payments of R158m on the Samrand land purchased. The two outstanding payments are due Sept 2016 and Sept 2017.

20 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

CONSOLIDATED PORTFOLIO OVERVIEW

NET PROPERTY INCOME PROPERTY PORTFOLIO (by value)

RSA 73.4% V&A Waterfront 5.4% GOZ 21.2% RSA 66.9% V&A Waterfront 6.4% GOZ 26.7%

The Oval, Cape Town

21 Introduction & Highlights Financial Review Capital Management Portfolio Update Conclusion

PROPERTY OVERVIEW Retail Office Industrial Australia V&A Waterfront Africa

PROSPECTS…

THANK YOU

Inanda Greens, Sandton