RESULTS PRESENTATION for the year ended 28 February 2019 P RO P E - - PowerPoint PPT Presentation
RESULTS PRESENTATION for the year ended 28 February 2019 P RO P E RT Y F U N D www.deltafund.co.za AGENDA P RO P E RT Y F U N D 01 Introduction and Business Update 02 Financial Review 03 Portfolio Review 04 Conclusion 05 Questions
www.deltafund.co.za
P RO P E RT Y F U N D
for the year ended 28 February 2019
01 02 03 04 05 06
Introduction and Business Update
P RO P E RT Y F U N D
Financial Review Portfolio Review Conclusion Questions & Answers Annexures
www.deltafund.co.za P RO P E RT Y F U N D
INTRODUCTION AND BUSINESS UPDATE
Sandile Nomvete
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
4
B-BBEE
Highly empowered fund
Rating on new sector codes
Market capitalisation of
as at 28 February 2019
Dominant in
Average property value of
(Feb 2018 : R109.6m)
Assets under management of
By 100% black-owned asset manager
Sovereign underpinned JSE listed REIT
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
5
Delta experienced its toughest and most challenging year since its listing. Slow pace of lease renewals from DPW, increased vacancies and higher cost of debt resulted in distributable earnings declining. The board and management subsequently decided to retain 25% of earnings to facilitate capital expenditure and working capital in the business, resulting in distribution of 55.39 cents per share being declared.
Leasing Progress
Robust engagement and negotiations held during FY2019 Significant progress in renewals underway in FY2020 New leasing
Vacancies
Tough economic environment with many funds impacted by higher vacancies Bloemfontein provincial leases continue to impact vacancies with tenants moving to alternate premises Sunninghill still challenging, however, significant progress seen in the market recently
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 6
Debt Funding
Low WALE and non-conclusion of DPW renewals significantly impacted our ability to renew expiring facilities for longer
periods
Our long-standing banking partners approved extensions, however, at higher interest costs and associated fees due to
increased risk
Disposals
Our market is limited due to our assets that are configured to sovereign tenants BEE opportunities to acquire and secure long-term leases prevalent in the market but access to funding seen as barrier Improvement in economic environment and increased lending by banks post elections should provide traction on
disposals
BUSINESS UPDATE cont…
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Shaneel Maharaj
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
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Loan to value of
(Feb 2018 : 41.3%)
Fixed debt of
(Feb 2018 : 85.4%)
Property
(Feb 2018 : 73.5%)
Interest cover ratio
(Feb 2018 : 2.4)
Extended facilities totalling
(Feb 2018 : R941 million)
Debtors outstanding at
(Feb 2018 : 18.5 days)
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 9
2019 2018 2017 2016 2015
Revenue (R’000) 1 547 365 1 564 053 1 617 344 1 247 582 1 009 207 Net property income (R’000) 1 037 786 1 149 885 1 153 341 925 531 764 884 Finance costs (R’000) 537 281 482 179 470 580 412 713 316 380 Cost to income ratio - gross method 32.2% 26.5% 28.8% 26.4% 26.0% Cost to income ratio - net method 18.3% 12.1% 12.4% 12.2% 10.2% Investment property (R’000) 11 350 331 11 507 600 11 381 421 10 095 181 8 420 400 Investment in listed securities (R’000) 461 822 381 868 429 588 472 546 502 986 Borrowings (R’000) 5 258 471 4 952 690 5 099 227 5 094 310 4 508 565 Loan to value (LTV) 45.1% 41.3% 41.5% 47.2% 49.9% Weighted average interest rate 10.2% 9.2% 9.2% 8.8% 8.1% Average debt expiry period (years) 0.8 1.5 1.9 2.3 2.4 Average debt fix expiry period (years) 2.1 1.5 2.2 2.1 2.4 Fixed: floating debt (excluding revolvers) 59.8% 85.4% 85.1% 83.5% 78.0% Net asset value per share (exclusive of deferred tax) R9.30 R10.06 R9.91 R10.61 R10.02
FIVE YEAR REVIEW
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 10
Feb 2019 Feb 2018
Net property income (excl. straight line accrual) 1 072 090 1 147 865 Administration expenses (79 727) (53 329) Net finance costs (511 249) (462 483) Dividend income - GRIT 39 187 35 666 Other income 6 356 20 287 Antecedent interest 569 257 Prior year retained earnings distributed
Distributable income for the period 527 226 691 641 Number of shares in issue 714 229 718 711 844 486 Full year distributable earnings per share (cents) 73.84 97.24 Distribution per share declared for the year (cents) 55.39 97.24
DISTRIBUTABLE INCOME STATEMENT
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 11
HISTORIC DISTRIBUTION PER SHARE (CENTS/SHARE)
23,7 32,5 40,2 72,7 40,0 44,1 84,1 42,9 47,9 90,8 45,9 51,3 97,24 46,4 50,8 97,24 39,4 16,0 55,39
FY2013 H1 Aug- 13 H2 Feb- 14 FY2014 H1 Aug- 14 H2 Feb- 15 FY2015 H1 Aug- 15 H2 Feb- 16 FY2016 H1 Aug- 16 H2 Feb- 17 FY2017 H1 Aug- 17 H2 Feb- 18 FY2018 H1 Aug- 18 H2 Feb- 19 FY2019 H1 – Interim H2 – Final Total – Full year
ANALYSIS OF DISTRIBUTIONS DECLARED
15.6% 9.6% 7.2% 23.1% 8.7% 7.1% 8.0% 1.0% (1.0)% (15.1)% (68.5)% (43,0)% 7.1% 7.1% 0%
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 12 691 641 6 466 5 196 3 521 312 (3 378) (13 931) (19 953) (36 642) (48 767) (57 240) 527 224
H2 Feb 2018 Net property income Admin expenses Dividend income (Grit) Antecedent dividend Prior year retained earnings distributed Other income Vacancies Disposals Net finance costs Provisions raised H2 Feb 2019
DISTRIBUTABLE EARNINGS BRIDGE
R’000
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 13
Description Amount (R’000) %
Net property income (NPI) Feb 2018 1 147 865 Increased NPI from base portfolio held at 28 Feb 2018 (36 353) (3.2)% NPI attributable to disposals and non-core assets FY18 (39 422) (3.4)% NPI Feb 2019 (excl. straight line accrual) 1 072 090 (6.6)% Increased NPI from base portfolio held at 28 Feb 2018 (36 353) NPI attributable to Disposals and non-core assets FY19 690 Like-for-like increase in NPI Feb 2019 (35 663) (3.1)%
LIKE-FOR-LIKE NET PROPERTY INCOME ANALYSIS
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 14
R’000 Feb 2019 Feb 2018 Change % ASSETS Non-Current assets 10 377 347 10 919 425 (4.96%) Investment property 9 913 811 10 535 000 (5,96%) Fair value of property portfolio 9 755 209 10 342 418 (5.68%) Straight line rental income accrual 158 602 192 582 (17.64%) Investment in other assets 461 822 381 868 20.94% Other non-current assets 1 714 2 557 (32.97%) Current assets 453 205 543 256 (16.58%) Non-current assets held-for-sale 1 436 520 972 600 47.70%) Total assets 12 267 072 12 435 281 (1.35%) EQUITY AND LIABILITIES Total equity 6 641 445 7 158 592 (7.22%) Liabilities 5 625 627 5 276 689 6.61% Non-current liabilities 1 470 696 2 720 230 (45.93%) Current liabilities 4 154 931 2 556 459 62.53% Total equity and liabilities 12 267 072 12 435 281 (1.35%)
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
Rands
NAV BRIDGE
10,06 0.62 0.11 0.02
9.30
28 Feb 2018 Contribution from operations Fair value of listed investments Dividend reinvestment Dividend paid Fair value of investment property Deferred consideration settled Fair value of financial instruments & forex losses Debt facilities raised Disposals FCTR recognised in profit and loss 28 Feb 2019
15
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 16
As at 28 February 2019 Facility Type R’ m Weighted Ave. Rate Floating bank facilities 4 339 11.0% Fixed bank facilities 212 9.5% Revolving bank facilities 706 9.7% Total borrowings, net of accrued interest 5 257 10.2% Accrued interest 17 Debt Structuring fees (16) TOTAL 5 258 Total fixed bank facilities 212 9.5% Interest rate swap contracts 2 020 7.9% Cross currency swaps 139 Libor + 2.9% Total fixed 2 371 Fixed % (excluding revolvers) 59.8% 10.2%
DEBT SUMMARY
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 17
Extended R2.1billion in expiring debt facilities during the year 59.8% (2018: 85.4%) of borrowings are fixed for an average period of 0.8 years (2018: 1.5) using a
combination of interest rate swaps, cross currency swaps and fixed facilities. The deterioration in fix % was due to fixed facilities being converted into floating facilities when extended
The weighted average cost of debt increased to 10.2% (2018: 9.2%) primarily due to higher interest rates
Loan to value ratio increased to 45.1% (2018: 41.3%),impacted by the negative fair value adjustment on
investment properties of R227 million coupled with increased borrowings. We expect an improvement in the LTV once leases are concluded and the portfolio is revalued
Interest cover ratio at 2.1 (2018: 2.4), impacted by higher interest costs and vacancies
DEBT COMMENTARY
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Otis Tshabalala
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
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A distinct focus on sovereign tenants
Total lease renewals in a challenging environment
(Feb 2019 : 46 833m2)
Total new leases concluded
Bulk lease renewal proposal to DPW (PMTE)
Capital expenditure
Vacancies
14.4% including assets held for sale (SAPOA average 11.0%) Renewed 88 185m2 (37 leases) post Feb 19
Gross lettable area (GLA) (Feb 2018 : R185.4 million Retail and office other
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
BUILDINGS REPRESENTED BY PROVINCE REPRESENTATIVE TENANTS
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REPRESENTATION BY PROVINCE AND MAJOR TENANTS
North West Limpopo Mpumalanga Gauteng KwaZulu Natal Free State Eastern Cape Northern Cape Western Cape
No of Buildings GLA (m2)
Gauteng 35 402 382 KwaZulu-Natal 17 278 264 Free State 17 85 980 Mpumalanga 11 30 251 Limpopo 7 44 885 Northern Cape 7 37 275 Western Cape 5 41 889 Eastern Cape 3 23 717 North West 2 5 780
Total 104 950 422
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 21
Office - Sovereign 1 Office - Other Industrial Retail Total
Number of properties 81 16 4 3 104 Gross lettable area (m2) by building type 4 693 737 192 711 40 258 23716 950 422 Vacancy (%) 10.9% 24.3% 33.1% 5.7% 14.4% Value R8.8bn R2.1bn R0.2bn R0.3bn R11.4bn Average rental (R/m2) 2 128.43 87.6 60.3 127.5 119.5 Weighted ave. escalation (%) 2 6.5% 6.5% 7.4% 7.3% 6.6% Weighted ave. lease expiry (by revenue) - by building type 3 2.1 years 1.8 years 0.7 years 5.2 years 2.1 years Weighted ave. lease expiry (by revenue) - tenant specific 2 2.1 years 1.7 years 0.7 years 2.8 years 2.1 years Cost to income ratio (net) 12.7% 25.1% 7.1% 30.8% 18.3% Cost to income ratio (gross) 24.4% 42.1% 29.7% 39.9% 32.2%
1 Multi tenant buildings are classified according to majority tenant type. Office – Other buildings therefore contain a minority element of sovereign tenants 2 This classification looks specifically at the tenant type within each building 3 Renewals in effect. Sovereign rentals & portfolio weighted average leaves expiry at year end were respectively R128.2 and 1.2 years 4 The GLA is classified by the majority of the tenants in the buildings and includes vacancy. Sovereign tenanted GLA is 598 661 m2 with total tenanted GLA of 813 436 m2
PORTFOLIO BREAKDOWN
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
TENANT PROFILE BY GLA
73,6% 16,2% 6,9% 3,3% 38,7% 15,7% 12,4% 6,8%
Office - Sovereign Office - Other Retail Industrial
Excludes vacancies. Total occupied GLA = 813 426m2
TENANT PROFILE BY RENTAL
79,0% 11,9% 7,4% 1,7% 38,6% 21,3% 11,9% 7,2% 11,9% 7,4% 1,7%
National Government Provincial Government Local Government State-Owned Enterprise
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DETAILED TENANT BREAKDOWN
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
UPDATE ON DPW
23
New cabinet trimmed from 36 to 28 ministers
DPW has been expanded to include Infrastructure & Development and is now known as
the Department of Public Works & Infrastructure Development
Minister De Lille appointed as Minister of Public Works & Infrastructure Development
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
UPDATE ON DPW cont…
24
Impact on Delta
We believe there will be minimal impact on space requirement from the
departments that have been merged
given that
Labour being renamed Department of Labour & Employment
We believe with Minister De Lille at the helm, there will be an impetus to
transacting with DPW
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
DPW LEASING UPDATE
25
Since the interim period, DPW has implemented Supply Chain Management (SCM)
Circular 48 which governs the terms with which DPW transacts with landlords:
The bulk lease renewal process is currently in its final stages Delta currently qualifies for a maximum of 5 years with DPW Delta has managed to secure a mixed bag of 3 to 5 year terms on the leases signed There are ongoing discussions regarding the maximum tenures for REITS
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
DPW LEASING UPDATE cont…
26
At present the final tenure is largely driven by the the user departments’ requirements Where the user department requires a short-term lease, for reasons such as the
individual space requirements not meeting their needs, DPW is compelled to comply with the user’s request
Where the user department requests a longer lease term than 5 years, DPW has
proposed an additional 4 year 11 month term as an option to meet the user’s request.
view it as a 5 year lease
Where the user department has not reverted back to DPW with its requirements
Circular 48
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 27
Bulk renewal progress
UPDATE ON SOVEREIGN TENANTS
Status Number
GLA Lease agreements concluded and signed 37 88 185 m² Under negotiation 22 139 365m² TOTAL 59 227 550 m²
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 28
Major leases concluded
LEASING UPDATE
151 018m2 were renewed of which 46 833m2 to the value of R113 million were renewed as at Feb 2019 The most notable renewals are:
Building Tenant GLA
In 2 Fruit Building In 2 Food 11 177 m² Unisa House UNISA 9 068 m² 101 De Korte MMI 6 610 m² 5 Simba Road ESKOM 5 253 m² Auditor General Auditor General of SA 2 130 m² Domus National Heritage Council SA 1 127 m² Du Toitspan
1 090 m² Total 36 455 m²
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RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 29
Several new leases were concluded measuring 12 537m2 to the value of R71.6 million The most notable new deals are:
Tenant Retention
Tenant retention remains a significant focus for Delta
LEASING UPDATE cont….
29
Building Tenant GLA
Liberty Towers Mr Price 3 833 m² 5 Walnut Merchants SA 1 524 m² TOTAL 5 357 m²
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
GLA - BY BUILDING
Gauteng (42.3%) KwaZulu-Natal (29.3%) Free State (9.1%) Limpopo (4.7%) Western Cape (4.4%) Northern Cape (3.9%) Mpumalanga (3.2%) Eastern Cape (2.5%) North West (0.6%)
RENTAL - BY BUILDING
Gauteng (44.7%) KwaZulu-Natal (24.4%) Limpopo (9.3%) Free State (6.3%) Western Cape (5.5%) Northern Cape (3.7%) Eastern Cape (3.1%) Mpumalanga (2.8%) North West (0.5%) 30
GEOGRAPHICAL AND GRADE SPLIT
OFFICE GRADE - BY GLA
A (15.5%) B (84.2%) C (0.3%)
OFFICE GRADE - BY RENTAL
A (21.4%) B (78.5%) C (0.1%)
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 31
The portfolio including non-current assets held for sale decreased by 1.96% to R10.4 billion Marginal decrease in value, in the context of an incredibly difficult trading year not only for Delta but for most listed
REITs in general
Reversions in light of recent renewals with DPW Average cap rates of between 10% to 12% and the average portfolio value of R11 942 per m2 Valuers factored prevailing market conditions, rentals and tenures into their valuations We intend to revalue the portfolio once all bulk renewals are completed
VALUATIONS
Number of Properties Value Feb 2019 Pre Valuation Value Feb 2019 Post Valuation Growth/(Loss) Percentage 104 properties R11 577 330 103 R11 350 330 000 (R227 000 103) (1.96%) 94 properties* R10 608 346 640 R10 397 230 000 (R211 116 640) (1.99%)
*Post transfer of 10 Bloemfontein properties to non-current assets held for sale
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 32
During the 2019 financial year, Delta sold one building, 12 New Street, for a total of R15.8 million. Subsequently Top Trailers site 1
transferred post year end, for R45 million
As at Feb 2019, Delta had approximately R1.4 billion on the disposal list at book value, of which 4 assets were concluded for
R311.8 million An additional 10 buildings from the Bloemfontein portfolio to the value of R483.4m were added onto the disposal list
DISPOSAL OF NON-CURRENT ASSETS
Property Building Classification Location GLA (m2) Sales price (R) Expected transfer Date Top Trailers site 1 Industrial Wadeville, Johannesburg 15 741 45 000 000 9-May-19 Broadcast House Office - Sovereign Mthatha, Eastern Cape 4 934 33 000 000 End June 2019 Protea Coin Cape Town Office - Other Saxenberg Park, Cape Town 5 700 10 000 000 End July 2019 Block G Office - Sovereign Pretoria CBD 7 991 230 000 000 End August 2019 Sale agreements concluded 34 366 318 000 000 6 other non-current assets held for sale 53 396 635 100 000 10 other non-current assets transferred from Investment Property Office - Sovereign Bloemfontein Portfolio 59 427 483 420 000 TOTAL NON-CURRENT ASSETS HELD FOR SALE 147 189 1 436 520 000 Property Building Classification Location GLA (m2) Sales price (R) Transfer Date 12 New Street Office - Sovereign Johannesburg CBD 2 368 15 750 000 27-Nov-18 Transferred FY2019 2 368 15 750 000
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 33
Property Commission House Embassy Building Beacon Hill Poyntons Fire Project 17 Harrison Street
Approved budget 16 000 000 28 000 000 40 000 000 32 500 000 4 500 000 Remaining budget Completed Completed 26 065 031 5 666 507 Completed Description Tenant installation to all floors for new tenant secured Façade Upgrade, Lifts and Tenant
dependant Internal refurbishment of tenant space Turnkey contractor appointed Creating fire lobbies, sprinklers, hydrant system and smoke detection compliance Tenant installation and replacement of escalators
CAPEX | EXISTING PORTFOLIO
Budget Tenant Installation FY2020 FY 2020 FY 2021 FY 2022 Total Capex
Bulk Renewals 70 000 000 98 300 000 117 500 000 68 800 000 354 600 000 Balance of properties 95 000 000 113 000 000 77 900 000 284 900 000 Total Portfolio 70 000 000 193 300 000 230 500 000 146 700 000 639 500 000
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 34
Delta Property Fund is investigating the implementation of a Solar PV solution
This would reduce Delta’s carbon footprint There is renewed focus on environmentally conscious landlords by tenants and investors
Benefits to Delta would include
Generation of carbon credits due to reduced footprint Generating non GLA rental which will in turn result in increased valuation of the property Long-term leases which may positively impact the WALE Opportunity to better manage unforseen percentage increases in the cost of power which
will affect property net income
A pilot project for the installation of the Solar PV systems is being considered on 3 properties
SUSTAINABILITY & GREENING INITIATIVES
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Sandile Nomvete
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 36
The conclusion of South Africa’s sixth democratic election is expected to provide much needed political stability and improved business confidence within the economy. This transition is expected to materialise within twelve months, whereby we envisage positive capital inflow and further stability to interest rates
FY 2020 is going to be one of Delta’s most exciting and busiest years:
Delta’s board and management remain committed to its sovereign strategy
CONCLUSION
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Questions & Answers
01
Government Precinct Pretoria
P RO P E RT Y F U N D
02
Top 10 properties by value
03
Lease Expiry Profile
04
Sectorial Split
05
GLA and vacancy reconciliation
06
Leasing Outlook
07
Growth / Reversion
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 39
GOVERNMENT PRECINCT | PRETORIA
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
Forum Building
Location Pretoria Sector* Office - Sovereign GLA 41 003 m2 Valuation R673 mil
Hallmark Building
Location Pretoria Sector* Office - Sovereign GLA 26 255 m2 Valuation R410 mil
Poyntons
Location Pretoria Sector* Office - Sovereign GLA 73 396 m2 Valuation R576 mil
Liberty Towers
Location Durban Sector* Office - Other GLA 40 080 m2 Valuation R426 mil
Delta Towers
Location Durban Sector* Office - Other GLA 41 677 m2 Valuation R405 mil
40
* Building sector determined by majority occupation of a tenant type. Some buildings have different types in occupation
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
Embassy Building
Location Durban Sector* Office - Sovereign GLA 32 829 m2 Valuation R338 mil
The Marine
Location Durban Sector* Office - Other GLA 24 655 m2 Valuation R260 mil
Hensa Towers
Location Polokwane Sector* Office - Sovereign GLA 13 675 m2 Valuation R303 mil
Isivuno House
Location Pretoria Sector* Office - Sovereign GLA 23 694 m2 Valuation R373 mil
NPA Building
Location Cape Town Sector* Office - Sovereign GLA 10 552 m2 Valuation R249 mil
41
* Building sector determined by majority occupation of a tenant type. Some buildings have different tenant types in occupation
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
TOTAL PORTFOLIO - BY GLA
14,4% 34,0% 15,7% 19,4% 8,3% 2,4% 3,0% 2,8% Vacant (14.4%) Month to Month (34.0%) 29 Feb 20 (15.7%) 28 Feb 21 (19.4%) 29 Feb 22 (8.3%) 28 Feb 23 (2.4%) 29 Feb 24 (3.0%) Beyond 28 Feb 2024 (2.8%)
TOTAL PORTFOLIO - BY RENTAL
38,6% 17,8% 22,9% 9,8% 2,1% 6,3% 2,5% Month to Month (38.6%) 29 Feb 20 (17.8%) 28 Feb 21 (22.9%) 28 Feb 22 (9.8%) 28 Feb 23 (2.1%) 29 Feb 24 (6.3%) Beyond 29 Feb 2024 (2.5%) 42
LEASE EXPIRY PROFILE AT 28 FEBRUARY 2019
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 73,0% 20,3% 2,5% 4,2% Office - Sovereign (73.0%) Office - Other (20.3%) Retail (2.5%) Industrial (4.2%)
GLA - BY TENANT*
73,6% 16,2% 6,9% 3,3% Office - Sovereign (73.6%) Office - Other (16.2%) Retail (6.9%) Industrial (3.3%) 43
SECTORAL SPLIT
RENTAL - BY BUILDING
81,3% 14,9% 2,1%1,7% Office - Sovereign (81.3%) Office - Other (14.9%) Retail (2.1%) Industrial (1.7%)
RENTAL - BY TENANT
79,0% 11,9% 7,4% 1,7% Office - Sovereign (79.0%) Office - Other(11.9%) Retail (7.4%) Industrial (1.7%)
* Excludes vacancies. Analysis focuses on what category the specific tenant falls into, rather than the category of the buildingGLA - BY BUILDING
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 44
Properties (No.) Total GLA (m2) Vacant GLA (m2) Vacancy (%) As at 28 February 2018 105 952 428 112 225 11.8% Disposals 1 (2 368)
New letting of vacant space
Adjustments
508 As at 28 February 2019 104 950 422 136 986 14.4%
GLA AND VACANCY RECONCILIATION
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 45
Anticipated budgeted sovereign renewals
Sector No of Leases Total Area W.A. Expiry Rate / m2 * W.A. Proposed Rate / m2 * Escalation / (Reversion) Leases on month-to-month or expiring by 31 August 2019 National government 49 198 559 109.87 100.74 (8.31%) Provincial government 12 53 767 169.38 124.23 (26.65%) Local government 4 38 650 144.76 103.31 (28.64%) State-owned enterprise 15 36 752 110.96 107.62 (3.01%) TOTAL 80 327 728 123.87 105.67 (14.69%)
LEASING | OUTLOOK
* All rentals quoted are gross rentals
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019 46
Total leases concluded 1 March 2018 – 28 February 2019
No of Leases Total Area (m2) W.A Term (months) W.A. Expiry Rate (R / m2)* W.A. Achieved Rate (R / m2)* Growth / (Reversion) W.A. Esc. achieved Renewed leases 50 46 833 19.12 112.22 107.93 (3.82%) 7.04%
GROWTH / REVERSION
*All rentals quoted are gross rentals
Renewals by Sector
Sector No of Leases Total Area W.A. Term (months) W.A. Expiry Rate / m2* W.A. Achieved Rate / m2* Escalation / (Reversion) W.A. Esc. Achieved National Government 1 1 090 36.00 100.26 112.36 12.07% 6.00% State-owned enterprise 3 7 603 23.72 148.25 115.82 (21.87%) 6.32% Industrial 4 11 177 6.00 77.17 83.34 8.00 0.00% Office – other 21 23 593 20.05 105.90 103.84 (1.95%) 6.76% Retail 21 3 370 40.48 191.42 196.78 2.80% 7.91% Total 50 46 833 19.12 112.22 107.93 (3.82%) 7.04%
RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
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RESULTS PRESENTATION FOR THE YEAR ENDED 28 FEBRUARY 2019
48