SA Corporate 2018 H1 Pre-close Presentation 29 June 2018 INDUSTRIAL | RETAIL | OFFICE | RESIDENTIAL | REST OF AFRICA
Agenda • Traditional Portfolio Performance • Afhco Portfolio Performance • Afhco Suburban Residential Update • Zambian JV Update • Disposal of Properties • Menlyn East End Development Transaction • Questions & Answers Disclaimer: Information in this presentation has not been reviewed or reported on by SA Corporate Real Estate Limited’s auditors 2
Traditional Portfolio Performance Anticipated Vacancy Vacancy Sector Vacancy 30 Jun Comments 30 Jun 2017 31 Dec 2017 2018 Continued strong performance, resulting in vacancies Industrial 1.6% 1.5% 1.2% below industry average. Vacancy reduction at GreenPark Corner as a result of Office 6.7% 6.4% 5.3% aggressive campaigns. Demand in the convenience retail asset class continues Retail 3.9% 3.1% 3.5% to perform. Anticipated Retention Rate Retention Rate Sector Retention Rate Comments 30 Jun 2017 31 Dec 2017 30 June 2018 Continued strong tenant retention. 20.5% expiring in Industrial 82.1% 83.9% 75.4% 2018. Office 79.3% 58.4% 83.5% 13.4% expiring in 2018. Redeveloped and refurbished centres continue to Retail 92.0% 79.9% 85.9% contribute to strong retentions Anticipated Renewal Reversion Renewal Reversion Renewal Sector Comments 30 Jun 2017 31 Dec 2017 Reversion 30 Jun 2018 Continued trend of negative renewal reversions in the Industrial 0.4% -2.4% -3.4% industrial sector, which will be further negatively impacted in H2. Mainly attributable to a tenant retention strategy at Office -10.5% -12.3% -16.1% GreenPark Corner. Big box users and national rentals reset to market, to Retail 6.6% 5.5% 2.7% retain occupancy. 3
Afhco Portfolio Performance Anticipated Vacancy Vacancy Sector Vacancy 30 Comments 30 Jun 2017 31 Dec 2017 Jun 2018 7.3% 9.9% Includes Calgro M3 units in tenanting phase Residential 8.9% 5.7% 5.5% Excluding development units in tenanting phase (excluding 2 Fashion Precinct buildings = 4.9%) Retail 1.4% 2.1% 4.2% 2018 H1 Anticipated Average Residential rental increase 4% Anticipated Anticipated Anticipated Renewal Sector Escalation Retention Rate Comments Reversion 30 Jun 2018 30 Jun 2018 30-Jun-18 Reflects continued demand for and growth Retail 8.9% 64% 7.9% of inner-city retail 4
Afhco Suburban Residential Update 30 June 2018 31 Dec 2018 2019 31 Dec 2017 Units Acquired / to be Acquired in Period 1 603 456 953 1 604 Total Units 1 888 2 344 3 296 4 900 Reduced future exposure to Centurion West & Midrand to mitigate concern with competitor oversupply 5
Zambian JV Update • Vacancy anticipated 30 June 18 = 3.6% • East Park Mall = 160 m 2 • Jacaranda mall = 964 m 2 Acacia Office park = 1 078m 2 (0% vacancy as of 1 July 2018) • • Lease Escalations anticipated 30 June 18 (US$) = 3.1 % • Renewal Reversions anticipated 30 June 18 (US$) = Flat to 5% • Extension of East Park Mall 15 150 m2 under development with • promising leasing prospects SA Corporate has the option to • acquire a 50% interest in development at 9% USD yield adjusted for any movement in the 5 year USD Swap Rate 6
Disposal of Properties Continued strategy of divesting from poor quality commercial and industrial • properties with re-tenanting risk: 13 properties are in various stages of divestment: • Status No. of Properties Sale Consideration Exit Yield Total 13 R629.4 million 8.6% Transferred 3 R108.8 million 8.4% R439.6 million Unconditional 8 8.8% R81.0 million Conditional 2 8.1% 7
Menlyn East End Development Transaction 1500 apartment high quality, high rise pipeline from end 2020 to end 2025 in the • M&T Development joint venture to be developed adjacent to Menlyn Maine Afhco’s 60% share of the investment valued at circa R1,5 billion, forecast to • initially annually yield circa 10% More details of the transaction to be provided at the interim results presentation • 8
Prospects Tracking previous guidance of flat distribution growth for 2018 • H1 weak and H2 stronger with a spread of circa 5% between the two • Real distribution growth envisaged in 2019 • 9
Q & A 10
Recommend
More recommend
