Specialist Banking | Asset Management | Wealth & Investment
SOUTH AFRICA
RESULTS
PRESENTATIONFOR THE YEAR ENDED
31 MARCH 2019
2
1. Year in review
2. Core strategy
3. Financial review
4. SA property portfolio and investments
5. Foreign investments
6. Pan-European light industrial platform
7. Balance sheet management
8. Capital allocation
9. Projects
10. Capital expenditure and sustainability
11. Looking forward
12. Annexures
Contents
YEAR IN REVIEW
4
• Macro-economic environment remains challenging - expectation of further deterioration into FY2020
• Edcon rental concession agreed – no impact on FY2019 but will impact FY2020 dividend growth by
1%
• Agreed share repurchase by Ingenuity of their shares for R124m, subject to ING shareholder
approval
› will deliver a 29% profit and provides clarity to shareholders
• R0.5 billion of South African property sold during the year and R0.6 billion earmarked
to be recycled to reduce leverage or support European expansion activity
• Completed R3.7bn bank refinancing, refinancing all bank debt maturing within the next two years
and opportunistically refinancing some longer-term debt on more attractive terms
• Management changes – Joint CEO’s and new CFO
• Initial investment into Pan-European Logistics platform in May 2018 - €150m capital commitment
› €83.7m deployed to date to acquire a 42.9% interest in a portfolio of 25 logistics properties
with gross asset value of €515.8m
• Entered into agreement to invest up to €64.5m into Pan European light industrial platform
› initial portfolio of 21 properties of which 4 assets acquired to date and 17 identified
› complements existing European logistics strategy, provides further offshore exposure and
delivers earnings accretion for shareholders
• Potential sell down of 10% of IAPF announced post year end
› c.10% interest remaining if all units placed
Year in review
FY19 key events
4
5
• Complementary skills make for a stronger management team, particularly in the current tough operating
environment
• Property fundamentalist and finance specialist coming together – opportunity to exploit synergies
• Mutual trust, respect and discipline amongst leadership team within a culture of collaboration
• Supported by experienced board of directors comprised of both property and financial / business skills
Darryl Mayers (54), Joint-CEO
• South African portfolio
• Development projects
• Marketing and client
experience
New executive leadership teamMore than the sum of the parts
5
Custodians of the team’s culture and values
"Though younger and potentially less
experienced than management teams
of the more established REITS, the
team is solid and introduces new blood,
ideas and energy to the company"
"Though the management is new and
untested, the greater team and board
provide a solid underpin to the strategy
and operations of the company"
Blend of experience to manage
and grow business in complex
and challenging environment…Andrew Wooler (37), Joint-CEO
• Previous CFO
• Offshore investments
• Capital allocation
• M&A activity
Jenna Sprenger (33), CFO
• Finance
• Treasury
• Balance sheet management
61. Excluding 3.1cps IAPF once off rights offer dividend
2. Including strategic development vacancy 3.0% (Mar 2018: 4.8%)
Highlights – FY2019Good performance in challenging environment
6
5.1%normalised full year
distribution growth
0.8%like-for-like net property
income growth
2.8 yearsWeighted Average
Lease Expiry (WALE)
142.3 cents per share
(Mar 2018: 135.4 cps)¹ (Mar 2018: 5.7%) (Mar 2018: 3.3 years)4.8% growth
18.8%net cost to income ratio
94.2%of space expired
in the period renewed
or re-let
73.5 cents per share
(Mar 2018: 70.2 cps)
(Mar 2018: 16.8%) (Mar 2018: 73.0%)
16.4% p.a.total return to
shareholders
since listing
2.4%vacancy²
(Mar 2018: 4.0%)
H2 distribution
7
Highlights – FY2019Performance underpinned by offshore investments
7
7.9%all-in cost of funding
decreased
84.0%interest rate exposure
hedged
3.9%increase in net asset value
driven by performance of
offshore investments
(Mar 2018: 8.6%)
Swap expiry extended
to 3.4 years
35.9% gearing
Focused strategy
to bring below 35% 84.8% South Africa
(Mar 2018: 32.6%)
EUR 26.0%total return
from PEL portfolio
Balance sheet composition
15.2% Offshore
11.6% income yield
14.4% capital uplift
CORE STRATEGY
9
What’s our PURPOSE?
What’s our MISSION?
To be recognised as
South Africa’s
leading REIT…
Purpose and missionTo be recognised as South Africa’s leading REIT…
9
Who are we?
• IPF is a very strong brand
with an excellent reputation,
a legacy to preserve and an
exciting future to craft
• Property purists – team with
extensive property skills
and experience
Combining the physical
with the sensory
• Deep-rooted understanding and
hands-on skills of how to unlock
the potential of space
• Client centric approach – how IPF
operates in this space is not easily
replicated, and it is a key differentiator
Client experience is everything
Size counts… BUT
1. For the right assets
2. Premised on the fact that bigger isn't better, BETTER is BETTER!
10
Strategic pillarsBusiness underpinned by core philosophy Deliver sustainable long-term returns by…
…ensuring
best of breed assets
…focusing on
client experience
as a key differentiator
…unlocking
the potential of space
Revenue security
and growth
Client service
excellence
Value add asset
management and
capital allocation
Cost efficiency
and system
optimisation
• Early engagement
• Solutions based
• Proactive asset
management
• Delivering an out of the
ordinary experience
• Differentiating IPF in a
commoditized
environment
• Understanding of and
delivering on client needs
• Best of breed assets
• Positioning the portfolio
for growth
• Active capital recycling
• Proactive balance sheet
management
• Diversified investment
base
• Maximise returns on a
long-term risk-adjusted
basis
• Speed and agility
• Margin preservation
• Controllable costs tightly
managed
11
Operational strategyAdhered to stated strategy in accomplishing FY2019 achievements…
01Property
purists
• Focus on the basics
• Passionate team with extensive
property skills and experience
02Focus on long-term
value creation
• Always underpinned by property
fundamentals
• Focus on quality
03People
on the ground
• Invest where we have local
expertise, whether locally or
offshore
04Remain
opportunistic
• Culture of entrepreneurship and
agility
05Strategic offshore
platforms
• Provide optionality
• Build platforms where we have access
• Look to exert control over time
06M&A and balance
sheet management
• Conservative approach in volatile
economic environment
• Adds value to property operations
• Enables us to be opportunistic
07Disciplined approach to capital
allocation and asset recycling
• Across platforms and individual assets
• Property matrix
11
12
Balance sheet constructBalance sheet remains diversified across SA & developed markets (85% SA focused)
March 2019
Rm % of total
Pro forma
for Q1 FY20
acquisitions
and disposals¹
(% of total)
Pro forma
for full
deployment
into
Pan-European
strategy²
(% of total)
SA Investment property 17 284 82.7 83.2 77.1
Ingenuity 133 0.6 - -
Izandla 306 1.5 1.5 1.4
South African assets 17 723 84.8 84.7 78.5
Investec Australia Property
Fund1 272 6.1 3.3 3.1
Investec Argo UK 223 1.1 1.1 1.0
PEL portfolio 1 686 8.0 10.2 12.8
Pan-European light
industrial portfolio- - 0.8 4.6
Offshore assets 3 180 15.2 15.3 21.5
Total Investments 20 903 100 100 100
1. Includes pro form adjustments for (a) disposal of Ingenuity (b) sell down of c.45m shares in IAPF at low end of offer range at offer price of A$1.30 (c) assumed further €26.7m investment into Pan-European Logistics platform
to fund identified pipeline (refer to slide 31) and (d) €10.2m investment in Pan-European light industrial platform as announced on SENS on 3 May 2019
2. Includes full deployment of a further (a) €47.4m into Logistics platform and (b) €54.3m into light industrial platform to satisfy full commitments of €150m and €64.5m respectively
FINANCIAL REVIEW
14
Distribution statement5.1% normalised full year DPS growth (2.7% total DPS growth)
14
Mar 2019
Rm
Mar 2018
Rm
±
%
Net property income (excl. straight lining) 1 471.9 1 507.2 (2.3)⁵
Base net property income (‘NPI’) 1 352.1 1 341.2 0.8
Acquisitions and disposals 119.8 166.0 (27.8)
Income from investments¹ 278.7 137.7 102.4
Notional cost of Ingenuity funding 8.8 7.6 (15.7)
Other operating expenses² (95.6) (72.6) (31.7)
Net finance costs (600.1) (570.6) (5.2)
Izandla JPIK interest not received³ (10.5) (0.8) (1 208.1)
Antecedent dividend 1.6 2.9 (46.4)
Taxation (net of deferred tax) ⁴ (6.8) (7.0) 2.9
Net distribution income 1047.9 1 004.4 4.3
Number of shares 736.3 731.4 0.7
Final dividend per share (cents) 73.5 70.2 4.7
Interim dividend per share (cents) 68.8 68.4 0.6
Total dividend per share (cents) 142.3 138.5 2.7
IAPF once-off rights offer dividend (cents) - (3.10) (100.0)
Core dividend per share (cents) 142.3 135.4 5.1
1. Includes income from new investments into PEL portfolio (R124.7m) and Izandla (R34.7m)
2. Other operating expenses comprise Fund expenses and the management fee. The increase is due to the management fee as enterprise value increased
and the Zenprop discount reduced
3. Prior year included only one month of interest (Izandla transaction took place in Feb 2018)
4. Tax included in the distribution recon relates to withholding tax on the IAPF dividend
5. NPI decreased as a result of the sale of properties to Izandla at the end of the prior year, as well as the sale of four properties in the current year
15
Dividend bridgePEL platform – key contributor to growth
982
1,048
125 11
326
(46)
(30)(23)
FY18normaliseddistribution
PELplatformrevenue
Base NPIgrowth
Acquisitionsand disposals
NPI
IAPF Net financecosts
Operatingcosts
Other¹ FY19distribution
Rm
1Includes Izandla revenue, UK Fund, antecedent dividend, Ingenuity and taxation
16
Summarised income statementSignificant fair value gains achieved on investments
16
Mar 2019
Rm
Mar 2018
Rm
±
%
Net property income
(incl. straight line adjustment)1 503.9 1 559.9 (3.6)
Other operating expenses¹ (95.6) (72.6) (31.7)
Fair value adjustments 356.8 233.4 57.0
Mark-to-market – derivatives² (53.7) (12.6) (326.1)
Foreign exchange translation (39.5) 7.1 (654.3)
Mark-to-market – investment property³ (15.5) 475.9 (103.3)
Mark-to-market – investments⁴ 226.2 (239.7) 194.4
Mark-to-market – PEL portfolio⁵ 259.2 - 100.0
(Loss) / profit on sale of investment property (19.9) 2.7 (836.9)
Net finance costs (600.1) (570.6) (5.2)
Income from investments 276.2 107.5 157.0
Taxation6 (15.2) (9.9) (53.8)
Accounting profit after tax 1 426.0 1 247.7 14.3
1. Increased due to increase in management fees linked to Zenprop ratchet
2. The negative mark-to-market on derivatives is driven by the weakness of the Rand on cross currency swaps
3. Downward revaluation during the year of R16m due to current environment
4. Mark-to-market in investments comprises an increase in IAPF of R220m, Ingenuity of R16m and an impairment of Izandla investment of R30m
5. As a result of property revaluations on the underlying portfolio of 12.5%
6. Taxation is made up of IAPF withholding tax of R6.8m and deferred tax raised on the fair value gain through profit and loss on Ingenuity and the U.K. investment
17
Summarised balance sheetGrowth in asset value driven by offshore investment
17
Mar 2019
Rm
Mar 2018
Rm %
Property related investments 20 903.4 19 164.1 9.1
South Africa1 17 284.2 17 598.9 (1.8)
IAPF2 1 271.9 1 051.5 21.0
UK 222.5 191.8 16.0
Europe3 1 685.8 - 100.0
Ingenuity4 133.0 114.6 16.1
Izandla5 306.0 207.2 47.6
Other assets 383.7 281.5 36.3
Cash 382.9 507.3 (24.5)
Total assets 21 670.0 19 952.9 8.6
Shareholders interest 13 131.1 12 643.8 3.9
Long term borrowings6 7 945.2 6 756.7 (17.6)
Total funding 21 076.3 19 400.5 (8.6)
Other liabilities 593.7 552.0 7.6
Total equity and liabilities 21 670.0 19 952.5 (8.6)
Net asset value per share (cents) 1 783.4 1 728.7 3.2
1. SA property portfolio has reduced due to the sale of four properties and downward revaluation, offset by capital expenditure
2. IAPF increase due to the share price moving from R10.50 to R12.70
3. Investment into PEL platform and revaluation
4. Movement in ingenuity share price from R0.99 in FY18 to R1.15 in FY19
5. Further investment to support Sasol development
6. Borrowings increased to fund European investment activity
18
12,644
13,131
81
195
22017 16 (42)
12,000
12,500
13,000
13,500
Opening NAV Share issue PELfair value
adjustment
IAPFfair value
adjustment
Ingenuityfair value
adjustment
Propertyfair value
adjustment
Other¹ Closing NAV²
1 Property fair value adjustments includes the straight-line rental adjustment of R31.9m and negative revaluation of R15.4m2 Includes FX gains on investments (+R42.0m), MTM on derivatives (-R53.7m) and Izandla impairment (-R30.0m)
Net asset value bridgeNAV growth of 3.9%
R’0
00
SA PROPERTY PORTFOLIO
AND INVESTMENTS
20
SA property portfolio0.8% base NPI growth reflects challenging environment
20
Property portfolio
• Despite an extremely challenging and weak local economic and operating environment, the base
property portfolio delivered NPI growth of 0.8%
› Driven by positive escalations but offset by void periods, negative rental reversions and increased costs
• Decrease in NPI of 2.3% due to disposals to Izandla at the end of FY2018 and the disposals of four
buildings in the current year
• Key drivers of the lower base net property income and the increased cost to income ratio were:
› 2.6% core rental growth which is lower than contractual escalations due to increased void periods and lower
and negative rental reversions
› An increase in variable costs of 33.5% due to higher letting commissions and tenant installations
› Fixed costs increased below inflation at 3.4%
› Gross utility costs increased by 4.9% while gross recoveries increased 8.3%
› Gross rates expense increased by 25.8% as a result of significant municipal revaluations in the office
portfolio, while rates recoveries only increased by 16.2% due to leakage from void periods
Mar 2019
Rm
Mar 2018
Rm
±
%
Gross income 1 674.7 1 618.9 3.4
Net expense (322.6) (277.7) (16.2)
Base net property income 1 352.1 1 341.2 0.8
Acquisitions and disposals 119.8 166.0 (27.8)
Net property income
(excl. straight lining)1 471.9 1 507.2 (2.3)
Net cost to income ratio 18.8% 16.8% (11.8)
Arrears % collectibles¹ 1.4% 1.1% (27.3)
2019 2018
No. of properties 102 106
GLA (m²) 1 197 921 1 240 851
Vacancy 2.4% 4.0%
WALE (years) 2.8 3.3
In-force escalation 7.6% 7.6%
Average gross rental incl. parking (R/m²) 123.0 117.8
Property asset value R17.3bn R17.6bn
1 Including legal tenants – 2.9% (Mar 2018: 3.1%)
21
RetailRobust and defensive portfolio
Mar 2019
Rm
Mar 2018
Rm
±
%
Gross income 654.5 618.1 5.9
Net expense (124.0) (115.9) (7.0)
Base net property income 530.5 502.2 5.6
Disposals 41.7 54.2 (23.0)
Net property income 572.2 556.4 2.8
Net cost to income ratio 18.5% 18.2% (1.6)
Arrears % collectibles¹ 1.6% 2.1% 23.8
21
Retail2019 2018
No. of properties 33 34
GLA (m²) 417 177 414 911
Vacancy 1.0% 1.2%
WALE (years) 2.9 3.0
In-force escalation 7.3% 7.3%
Average gross rental incl. parking (R/m²) 140.1 133.9
Asset value R7.3bn R7.0bn
• Strongest performer in SA portfolio despite lack of economic growth
› Due to focused strategy of maintaining significant proportion of national clients (currently 81%) to
ensure trade through periods of subdued consumer spending
• Turnover growth of 2.7% on total portfolio (4.1% excl. Design Quarter and Balfour Mall)
• Trading density growth of 2.5% (4.5% excl. Design Quarter and Balfour Mall)
• Base NPI growth of 5.6% driven by positive escalations
• Net cost to income ratio increased marginally due to:
› 5.3% core rental growth which is lower than contractual escalations due to lower rental reversions
› Fixed costs well managed – reduced by 1.1%
› An increase in variable costs of 16.4% driven by letting commissions and tenant installation incentives
› Gross utility costs increased by 5.1% and gross recoveries improved by 8.9% with benefit driven by
the solar roll out
› Gross rates expense increased by 19.8% with recoveries increasing by the same rate
1 Including legal tenants – 2.8% (Mar 2018: 3.8%)
22
RetailEdcon restructure
22
• All term sheets have been signed and Competition Commission approval granted to Edcon on 30 April
to proceed with the restructuring
• IPF elected the rental concession option
• A summary of the final terms agreed are as follows:
› Rent reduced by 40.9% over the next 2 years
› CNA and Edgars Active are to be excluded
› Full operating costs and utilities will be paid
› At the end of the 2 years rentals revert to contractual rental
• Landlords effectively receive 6.6% equity in the restructured Edcon Group (pro rata to the level of rent foregone over the 2 years)
(Through the negotiations with the UIF (PIC) this was proposed to reduce to 5.7% and has not materialised)
• Edcon is a tenant across 10 of the Fund’s retail properties, with a GLA exposure of approximately 27 500m² representing less
than 2% of the Fund’s total revenue
• Reduction in rental income will amount to R9.8m p.a. from FY2020
• c.1% impact on distribution growth in FY2020
• IPF currently in negotiations to be able to take back space and re-let to other tenants on IPF’s terms
23
OfficeSupply continues to exceed demand
Mar 2019
Rm
Mar 2018
Rm
±
%
Gross income 680.3 663.0 2.6
Net expense (142.7) (110.9) (28.7)
Base net property income 537.7 552.1 (2.6)
Acquisitions and disposals 0.9 28.1 (96.7)
Net property income 538.6 580.2 (7.2)
Net cost to income ratio 21.4% 17.0% (25.7)
Arrears % collectibles¹ 1.5% 0.4% (275.0)
Office2019 2018
No. of properties 31 32
GLA (m²) 249 243 251 678
Vacancy 7.3% 5.4%
WALE (years) 2.8 3.3
In-force escalation 8.0% 8.0%
Average gross rental incl. parking (R/m²) 228.2 222.7
Asset value R6.3bn R6.5bn
231 Including legal tenants – 2.7% (Mar 2018: 1.1%)
• High quality and well-located properties
• Sandton properties are defensive with a WALE of 3.5 years and expiries of only
4 434m² in FY2020 (renewal already concluded)
• Negative base NPI growth of 2.6%
› Downward pressure on rentals with longer void periods and increased incentive costs for
landlords to secure clients
• Net cost to income ratio significantly increased due to:
› 1.2% core rental growth which is lower than contractual escalations due to void periods,
negative reversions and increased vacancy
› Fixed expenses well controlled - growth below inflation at 4.5%
› Variable costs up 56.1% driven by costs of leasing (i.e. commissions, tenant installations)
› Gross utility costs increased by 5.3% with recoveries increasing 6.3% due to backbilling
› Gross rates expenses increased by 35.3% driven by municipal revaluations with
recoveries up only 25.7% due to void periods
24
Mar 2019
Rm
Mar 2018
Rm
±
%
Gross income 339.9 337.8 0.6
Net expense (55.9) (51.0) (9.7)
Base net property income 284.0 286.8 (1.0)
Acquisitions and disposals 77.1 83.7 (7.8)
Net property income 361.1 370.5 (2.6)
Net cost to income ratio 15.1% 14.0% (8.0)
Arrears % collectibles¹ 4.4% 3.6% (22.2)
Industrial2019 2018
No. of properties 38 40
GLA (m²) 531 501 574 262
Vacancy 1.2% 5.7%
WALE (years) 2.9 3.7
In-force escalation 7.7% 7.9%
Average gross rental incl. parking (R/m²) 60.3 60.2
Asset value R3.7bn R4.1bn
• Quality assets in strategically located nodes
• Negative base NPI growth of 1.0% due to void periods and negative reversions
• The cost to income ratio deteriorated due to:
› 0.4% core rental growth which is lower than contractual escalations due to weak tenant
demand environment resulting in longer void periods and negative rental reversions
› Fixed costs increased by 34.3% due to higher security and property management fees
› Variable costs reduced 12.6% due to lower bad debt provisions
› Gross utility costs increased by 3.8% while recoveries improved by 9.6% due to higher
electricity recoveries
› Gross rates expense increased by 22.3% while recoveries only grew by 5.3% due to void
periods
24
IndustrialLack of tenant demand driven by macro-economic factors
1 Including legal tenants – 4.6% (Mar 2018: 5.0%)
25
• Proactive asset management resulted in a decrease in vacancy from 4.0% in March 2018 to 2.4% in the current year
• 33% of space that expires during FY20 already let
1. Negative reversion driven by the current letting environment and new letting concluded at properties purchased above market rentals (for which top slice price adjustments were made at acquisition with the benefit of higher initial yields)
2. Long term leases where expiring rentals had escalated above current market, renewed at market
3. Reversion subdued due to renewals with two national tenants where 5- and 7-year leases were concluded. Excluding these renewals, the balance of letting activity reflected growth of 5.3%
4. Low retention due to two clients not renewing 8 549m2 and 21 441m2 spaces respectively. The first was acquired by a large multi-national with multiple facilities and the operations were consolidated and the second, due to consolidated
business operations and reduced space. Both spaces have however been re-let
Letting activity94.2% of expired space let or renewed in the current year – testament to the quality of the assets
Expiries &
cancellations
GLA
Renewals
& new lets
GLA
Letting %
concluded
Gross
expiry
rental
(R/m2)
Gross new
rental
(R/m2)
Rental
reversion
(%)
Average
escalation
(%)
WALE
(years)
Incentive
(% lease
value)
Retention
(%)
Office 52 914 45 674 86.3 193 166 (13.9)¹ 7.9 5.0 4.5 68.2
Industrial 116 314 110 983 95.4 61 57 (6.4)² 7.9 1.9 1.2 47.24
Retail 58 280 57 619 98.9 155 159 2.6³ 7.1 4.8 1.1 91.3
Subtotal 227 508 214 276 94.2 115 107 (6.9) 7.7 3.3 1.9 62.9
Opening vacancy 59 902 38 440 64.2 n/a 67 n/a 7.0 5.6 0.8 n/a
Total 287 410 252 716 88.0 115 102 (6.9) 7.6 3.7 1.7 62.9
26
Letting activity – FY202033% of space that expires during the coming year already let
26
Sector Expiries (m²)
Average
gross rental
on expiries
(R/m²)¹
Already let
(m²)
Already let
(%)
Rental
reversion
(%)
Retail 61 322 158.3 16 322 26.6² (9.1)
Office 33 359 233.9 9 737 29.0³ (10.4)
Industrial 151 016 69.3 55 089 36.5⁴ (7.1)
Total 272 362 107.0 98 837 33.0 (7.9)
1. Includes parking income
2. A further 34% of space currently under offer or in advanced stages of negotiation
3. A further 28% of space currently under offer or in advanced stages of negotiation
4. A further 18% of space currently under offer or in advanced stages of negotiation
Key leasing activityGLA (m²)
Office
Nicol Main (Bryanston) 5 334
4 Sandown Valley (opening vacancy) 6 500
Firs (retail + office) 5 500
17 334
Industrial
Alrode Multipark (Alberton) 28 503
Consol (Germiston) 20 331
GE (Midrand) 11 180
Lerwick Road (Durban) 14 903
74 917
Retail
Musina Mall (Limpopo) 3 154
Balfour Mall (Highlands North) 6 290
Toyota dealership (Menlyn) 6 785
Kriel Mall (Kriel) 2 189
18 418
27
Full year
Carrying
amount
31 March
2018
(Rm)
Revaluation
and straight
lining
(Rm)
Other capital
movements
(Rm)
Directors’
valuation
31 March
2019
(Rm)
Total
change
(%)
Revaluation
and straight
lining
(%)
Forward
yield
(%)
Prior year
yield
(%)
Office 6 362.7 (183.9) 35.8 6 214.6 (2.3) (3.0) 9.4 9.1
Industrial 3 287.6 15.0 24.4 3 327.0 1.2 0.5 9.5 9.0
Retail 6 584.3 188.7 112.0 6 885.1 4.6 2.7 8.4 8.2
Total base 16 234.6 19.9 172.2 16 426.7 1.2 0.1 9.0 8.7
Acquisitions 261.4 12.3 0.1 273.8 4.8 4.5 8.8 0.0
Held for sale 1 102.9 (41.1) (478.1) 583.7 (47.1) (7.0) 8.8 8.8
Total portfolio 17 598.9 (8.9) (305.8) 17 284.2 (1.8) 0.1 9.0 8.7
Property valuationsRealistic forward yield of 9.0%
27
• 49% of the portfolio (50 properties) was externally valued by two independent valuers
• Cap rates have been pushed outwards slightly in the current year
• Net property income assumptions used were realistic and reflected weaker environment
• Acquisitions refer to 3 buildings purchased in the prior year which will be moved into the base portfolio in FY2020 once they have a full 12-
month comparative
28
Izandla
SA investments
Sale of Ingenuity shares• On 17 April 2019 the Fund announced that
Ingenuity would repurchase all the ING
shares held by IPF at R1.08 per share
• The selling price is a 29% premium to the
purchase price
• The sale is part of IPF’s focused strategy
to recycle capital into assets where the net
proceeds can be used to generate
superior returns
• R115m invested during FY19 by way of a shareholder’s loan
› To support acquisition of a property in Hatfield and development
of logistics facility for Sasol on the back of a 15-year lease
• Izandla looking to raise equity for identified pipeline
› IPF will look to convert mezzanine debt to equity at that point, if
possible
Key portfolio metrics
Portfolio Mar 2019 Mar 2018
Total value of property R740.1m R522.5m
Value of investment R306.0m R207.2m
Equity R33.2m R18.3m
Loans R272.8m R188.9m
WALE (years) 3.1 3.2
Vacancy 1.8% 10.3%
Number of properties 15 13
Key portfolio metrics
Portfolio Mar 2019 Mar 2018
Value of investment R133.0m R115.8m
Average cost of acquisition per share R0.84 R0.84
Average cost (notional costs capitalised) R0.99 R0.95
Last reported NAV per share R1.45 R1.32
Ingenuity
28
29
Focus on the SA portfolio
• Local expertise to navigate
current environment
• Continued focus on property
fundamentals ahead of anything
else
• Single-minded focus on the
client experience
• Proactive asset management
FY20 prioritiesThe South African market is our strategic priority
29
What can you expect from IPF in FY20?
• Anticipating and mitigating leasing risk through
early lease renewals and higher tenant retention
• Guerilla tactics – rolling up sleeves to source
and secure
• Every property assessed to ensure it remains
relevant and competitive
• Improve properties where necessary in order to
compete and outperform
• Invest in customer relationship management
and create an out of the ordinary experience for
tenants
• Capital expenditure and timing thereof –
identifying risks and opportunities early
• Offshore provides optionality – continued
deployment into Pan-European strategies
Building activity
• Design Quarter
• Balfour Mall
• Other
FOREIGN INVESTMENTS
3131
Seed portfolio
• IPF acquired a 42.9% interest in a Pan-European logistics platform and committed to
investing up to €150m into the platform over the next four years
› Total consortium commitment of €350 million
• Seed portfolio of 20 logistics properties acquired in May 2018 with asset value of €423m
› IPF initial equity contribution of €65.8m (plus transaction costs)
› Unlevered net initial yield of 6.0% and initial investment yield of ±10.5%
Pan-European logistics portfolioTransaction recap
Looking ahead: Q1 2020 pipeline
Property Date Country
GLA
(m²)
IPF equity
investment
(€'m)
Property value
(€'m)
Schiphol April 2019 Netherlands 17 557 2.1 23.2
Bergen April 2019 Netherlands 20 957 3.1 16.7
Venlo April 2019 Netherlands 25 704 3.2 18.1
Marseille April 2019 France 65 354 9.2 51.6
VRE May 2019¹ Poland 51 595 5.3 30.0
Warsaw May 2019¹ Poland 11 109 1.3 7.3
Tiel May 2019¹ Netherlands 9 900 1.2 7.1
Hanover May 2019¹ Germany 24 551 1.3 13.4
Acquisitions and commitments post year end 26.7 167.4
Funding
• As at 31 March 2019, 53% of investment value was
hedged by cross currency swaps and Euro-denominated
loans
› Weighted average debt and swap expiry of 2.8 years,
which was extended post year end
• 100% of contracted distributions over a five-year period
hedged at a range of between R16.07 and R23.2
Subsequent acquisitions
• IPF invested a further
€16.5m to support the
acquisition of four additional
properties across the
Netherlands and Germany
during H2 2019 (with one
French asset sold)
› Acquisitions are
expected to deliver
similar investment return
to seed portfolio
1. Anticipated date of transfer
32
Performance
Key portfolio metrics
Pan-European logistics portfolioStrong performance driven by leasing activity
Deal case 10.5% (uplift as a result of
stronger leasing activity, better rentals,
shorter void periods, quicker leasing of
vacant space, efficient cost
management and lower incentives)
Further supports investment rationale
As a result of external revaluations of
like-for-like properties by 12.5%
11.6%EUR income return
(11.9% ZAR return)
14.4%EUR capital uplift
on initial investment
(16.3% ZAR)
Metrics Mar 2019 At acquisition
Income return p.a. (€) 11.6% 10.5%
WALE (years) 4.5 3.2
Vacancy 5.1% 10.1%
Number of properties 25 22
CommitmentsEuropean logistics portfolio IPF equity investment
Total commitment €150.0m
Already deployed (€75.9m)
To be deployed in Q1 FY202 (€26.7m)
Remaining commitment €47.4m
Gross asset
value (€m)
Investment
(€m)
Investment
(Rm)
Total (at acquisition, excluding costs) 431.7 65.8 1 069.7
Additions¹ 51.8 10.1 163.8
Total equity investment 483.5 75.9 1 233.6
Bridge equity - 9.0 146.9
Disposals (23.5) - -
Revaluation 55.8 12.5 203.2
Interest accrual and fees - 6.3³ 102.1
Total 31 Mar 2019 515.8 103.8 1 685.8
1. Acquisition of 5 properties
2. Acquisition of further 8 logistics
properties as set out on slide 31
3. Comprises accrual for distributions
earned but not received and other
transaction costs
32
33
Pan-European logistics portfolioGeographical overview
33
Gross asset
value (€m) No. properties Vacancy
WAULT
(years)
GLA
('000m2)
France 132.1 10 4.5% 5.2 226
Germany 200.9 7 3.3% 5.0 207
Italy 44.9 1 15.8% 2.6 303
Netherlands 48.4 3 11.5% 3.0 92
Poland 53.9 3 - 4.4 102
Spain 35.6 1 - 5.6 83
Total 515.8 25 5.1% 4.5 1 012
34
Key portfolio metrics
IAPF 31 Mar 2019 31 Mar 2018
Total value of property AUD1 063m AUD987m
Value of investment R1.3bn R1.1bn
Distribution return p.a. 8.0% 8.0%
WALE (years) 4.7 5.2
Vacancy 0.6% 1.5%
Number of properties 27 27
ASX-listing
• IAPF is pursuing a primary listing on the ASX and is seeking
to raise approximately AUD100m
• Indicative offer price range of AUD 1.30 to AUD 1.35
• IPF has agreed to make will make available 45m shares to:
› Satisfy oversubscriptions under the primary offer
› Increase liquidity of IAPF
› Increase the quantum of the offer to improve the likelihood
of attracting more significant retail and institutional appetite
• If offer is not oversubscribed >AUD100m, then IPF’s units will
not be placed
• Proceeds will allow IPF to further de-lever balance sheet
and/or efficiently recycle capital
• IAPF remains a key investment and IPF will retain 10% interest
if all units placed
• Offer opened 13 May 2019, bookbuild to be conducted
20-21 May and ASX trading to commence 28 May 2019
IAPFThe Fund’s investment saw a substantial increase in value in the current year
from R10.50 per share at March 2018 to R12.70 at March 2019
34
+1.2%post WHT growth in DPS
(AUD)
+4.0%growth in ZAR
35
• Asset management activities
• Re-gearing of the Sainsbury’s,
Swansea lease to 30 years
• Sale of the Sainsbury’s, Worcester
property at a 14.7% premium to book
value
• Upward rental reversions of 22%
across 1,282m² of industrial space
renewed or re-let
NAV growth as a result of:
Investec Argo UKWell managed and positioned
for growth
Key portfolio metrics
UK portfolio Mar 2019 Mar 2018
Total value of property £233.8m £233.8m
Value of investment R222.5m R191.8m
Income return p.a. 5.4%1 7.2%
WALE (years) 11.7 10.5
Vacancy 2.2%2 1.6%
Number of properties 11 11
• Total investment of
£11.7m
• Funded though a
combination of existing
ZAR facilities and cross
current swaps at all-in
rate of 2.36%
• 100% of the income
hedged for a period
of 5 years
35
1 The lower return is due to the dilutionary effect of Edmonton
which was acquired with development vacancies
2 Including development vacancies at Edmonton of 14.2%.
Vacancy at 30 June 2019 is expected to be c.4%
PAN-EUROPEAN LIGHT
INDUSTRIAL PLATFORM
37
• Initial 25% interest in an unlisted portfolio and pipeline of light industrial properties located
across France, Germany and Netherlands
› 4 assets acquired to date and 17 assets identified and in final stages of negotiation
› envisaged portfolio will comprise 21 properties with gross asset value of €116m
• Initial equity investment of €10.2m excluding costs (and €10.9m including costs)
• IPF commitment of €64.5m on a ratcheted equity participation basis with total consortium
commitment of €150m
› IPF interest increases to 42.9% post full-deployment
• To be funded through a combination of existing ZAR debt facilities (40%) and either Euro
debt facilities or cross currency swaps (60%)
• Expected to generate unlevered initial asset yield of 7.2% and grow to fully let ERV yield
of 8.2%
• Euro-denominated investment return of 9.6% once leveraged and is accretive to earnings
Pan-European light industrial investmentHighlights
37
France 59 9
Germany 31 6
Netherlands 26 6
1
2
3
38
Pan-European light industrial portfolioInvestment rationale
• Complementary to existing Pan-European logistics platform
• Strategy is well suited to the current macro environment and
benefits from growth of e-commerce across Europe and its
impact on last mile logistics
• Small storage units in urban infill locations playing an
increasingly important role in sophisticated supply chains
• Continued partnership with UREP – ability to unlock value
through intensive asset management initiatives
• Scarcity of available land due to increasing urbanisation which
has seen industrial infill locations in cities redeveloped for
higher value residential or office / retail use
• Acquisition prices at below replacement cost
• Comparatively limited obsolescence across the small storage
unit market with quality of location vs. specification of the
building that drives rental growth
• Evidence of rental growth in the major Western European
cities after a decade of static rentals
38
39
Logistics vs. light industrialKey characteristics
39
Geography Micro-location Asset quality Use Size Occupier demand Pricing
• Primary targets are
Germany, Benelux and
France with the
possibility of Spain,
Poland and Italy
• Focus on the Northern
corridor of Western
Europe, with liquid and
transparent property
markets
• Assets within
close proximity
to cities with high
concentrations
of industry and
consumers, as
well as limited
land availability
• Quality assets and
strong property
fundamentals –
• Below 20 years of age
which provides
maximum occupational
flexibility for storage,
distribution and general
warehousing and
expansion potential
• Units that are used for
storage, distribution
and general
warehousing
• Intention is to avoid
production facilities
due to the inherent
restriction of re-lettings
and associated
removal costs
• Premised on a similar
macroeconomic theme
to Logistics platform,
but targeted asset size
between €5-€10m
• Building size typically
less than 10 000m²
(vs. Logistics platform
targets larger unit sizes)
• Target both vacancy and cash
generating assets that offer
potential for current cash-on-cash
yields with the benefit of leasing
up any vacancy in areas where
occupier demand is high and
vacancy low
• Aggregate diverse range of tenants
ranging from large national tenants
though to small & SME companies
• Pricing that
reflects a
discount to
replacement
cost and/or
offers active
asset
management
opportunities
Light industrial platform strategy
• 10m+ eaves height
• 5-10% office element
• Unit size > 10 000 sqm
• Generally single-let to strong
tenant covenants
• Long leases (>5 years)
• More susceptible to functional
obsolescence
• Lot sizes >€30 million
• Plentiful site supply and
easier development finance
• Minimal / passive
management required
• 6m+ eaves height
• 10-15% office element
• Unit size < 10 000 sqm
• Multi-let to mixed tenant
covenants, usually SMEs
• Short leases (<5 years)
• Low depreciation, minimal capex
• Lot sizes <€30 million (€5-€15m)
• Limited supply / new build
available due to lack of financing
• Intensive asset management,
requires specialist management
skills
Logistics Light industrial
Specialist
logistics
properties
(trans-shipment)
E-commerce
(fulfilment and
cross dock)
>10 000 sqm
contract logistics
<10 000 sqm
(forwarding
and storage)
Light
manufacturing
properties
Converted
properties
Purpose build Purpose buildGeneric
BALANCE SHEET
MANAGEMENT
41
1. Metrics include post year end debt and swap movements
2. Extended due to debt refinancing
3. Hedged percentage includes all interest rate swaps and cross currency swaps over total debt
4. Gearing shown net of cash
5. Secured assets as a percentage of total investments
6. Secured debt as a percentage of total debt facilities
Balance sheet metricsBalance sheet well-positioned
31 Mar 20191 31 Mar 2018 +/-
Average all-in cost of funding (%) 7.9 8.6 (0.7)
Debt maturity (years)2 3.5 2.7 0.8
Swap maturity (years) 3.4 3.8 (0.4)
Hedged position (%)3 84 84 0.0
Gearing (%)4 35.9 32.6 3.3
Encumbrance ratio (%)5 26.9 33.5 (6.6)
Secured debt (%)6 33.7 34.6 (0.9)
• R3.7bn bank refinancing completed during the year which significantly reduced
refinance risk. R0.7m bank debt repaid subsequent to year end. See below
table for impact on metrics:
• Targeted gearing below 35% aimed to be achieved through capital recycling
where necessary
› Gearing anticipated to remain at conservative levels post full deployment
into Pan-European strategies as a result of active capital recycling strategy
› Look-through gearing is satisfactory at 43% with no guarantees into any
entities which are not wholly-owned by the Fund
• The Fund maintained strong credit metrics and its corporate rating was
upgraded to A+(ZA) from A(ZA) in August 2018
• Over R1bn swap book restructured subsequent to year end – extended the
swap expiry by 8 months at no cost
• R1.1bn of committed facilities
Post-refinancing Pre-refinancing
Debt maturity (years) 3.5 2.7
Margin (%) 1.67 1.64
Encumbrance ratio (%) 26.9 33.5
• Fundamental focus area for the Fund
• Diversified funding portfolio with banks and capital markets and early
engagement with lenders
• Weighted average cost of funding reduced to 7.9% as a result of Euro debt
introduced to fund the PEL investment
42
3.5 3.4
3.0
2.7
3.83.6
0
1
2
3
4
5
Debt Swaps¹ Cross currencyswaps
31 Mar 2019 31 Mar 2018
Balance sheet strategyFundamental focus
1. Metrics include post year end debt and swap movements
28%
8%
6%45%
13%
HQLA Bank
Commercial Paper DMTN
Foreign
Sources of funding (%)Weighted expiry profile (years)1 1
42
43
Balance sheet strategyLooking forward
43
Note: Based on utilised debt facilities
1. Includes bonds expiring of R650m – commitment to early refinance R250m with Nedbank thus limited refinance risk; bonds of R400m due in March 2020. R452m commercial paper rolled
in May 2019; will continue to roll if appetite in the market. May 2019 roll demonstrates demand we have seen historically for IPF commercial paper. IPF has sufficient committed facilities in
the event they choose not to roll
2. Bank facilities of R300m (R160m drawn) expire December 2020. Will begin negotiations shortly – further covered by committed facilities
3. Bonds amounting to R590m expire in December 2020. Have ample backstop facilities in place should we be unable to refinance closer to expiry
2%
11%
20%
27% 26%
14%
0%
15%
10%12% 13%
26%
18%
6%
0%
10%
20%
30%
FY20 FY21 FY22 FY23 FY24 FY25 FY26
Total swaps Total debt
Debt swap expiry (%)
0%2%
6%
11%
2%0% 0%0% 0% 0% 0%
14% 14%
0%
15%
8%6%
2%
9%
5% 6%
0%
5%
10%
15%
20%
FY20 FY21 FY22 FY23 FY24 FY25 FY26
Bank HQLA DMTN
Debt expiry (%)
¹
²
³
CAPITAL ALLOCATION
45
Capital recycling
45
Rm Mar 2019
Deployment funded by:
Proceeds from SA property disposals 500.5
Equity raised 81.1
Debt raised 1 108.4
1 690.0
Deployment into:
PEL platform (1 380.9)
Izandla (115.6)
UK Fund (11.5)
SA property portfolio projects and capital expenditure (182.0)
(1 690.0)
• Disposed of four properties in the current
year valued at R500.5m
› Blended yield of 7.1%
• Proceeds redeployed into the PEL platform
generating income return of 11.9% in ZAR
(11.6% in EUR)
• 12 properties earmarked for sale with a
book value of R0.6bn
• Proceeds of c.R0.5bn to be received from
sell down of IAPF units and R124m to be
received from sale of Ingenuity units
• Proceeds anticipated to be recycled into
Pan-European strategies and / or to further
manage gearing
46
Capital recyclingProperty matrix
46
Move to high-growth quadrant
through active asset management
• Balfour Mall
• Design Quarter
• The Firs
Ideal state
• 2929
• Nicol on Main
• Zevenwacht
• Dihlabeng
Exit properties
• e.g. tail on acquired portfolios (very limited)
• Scientific
• Beechwood House
Sell properties at best price
• Bigen
HighLow
Weak
Strong
Growth profile
Pro
pe
rty fu
nd
am
en
tals
9PROJECTS
48
25 462m² specialised retail centre
Challenges
• Not convenient in terms of access
• Mall aesthetics
• Deep retail space
ProjectsDesign Quarter
Planned upgrade and centre
refurbishment
• Negotiations with Checkers for
a 2 500m² concept store
• Consideration of a second anchor
(pharmacy)
• Entire internal refurbishment
• Vertical integration between
convenience store and other retail,
with parking area and access points
• Town planning application lodged
with council for a ‘left in access’ off
William Nicol for traffic coming from
the Fourways area
48
Design QuarterDesign Quarter offers a unique destination
for decor and design and a host of world
class restaurants on the piazzaDesign Quarter is a well-known mall located
in the Bryanston / Fourways precinct.
It offers a great alternative to Nicolway Mall
and to the offices in the area.
Satisfied with positioning.
49
• Since 2012 Balfour Mall has undergone a major shift in target market
• Currently attracts residents in immediate surrounding areas, with commuters
accessing the mall from Alexandra to Hillbrow and as far as Lombardy East
• Target market not fully accessed due to delays in the Rea Vaya system and
lack of certain amenities and activities in the mall
• In response to changing consumer needs, Balfour Mall management
embarked on creating a vision which addresses customer needs, focusing
on three pillars:
ProjectsBalfour Mall
49
Balfour Mall
Retail offering
National anchors
Food and entertainment
Reconfiguration
of banking mall
Mixed use precinct
Retail epicentre
Residential
Social amenities
Masterplan
Improve connectivity
to Louis Botha
Creation of precinct: partner
with City of Joburg (COJ)
Balfour Mall as a town
centre
Retail offering
• Optimise tenant mix by attracting national
tenants that will offer convenience, attract
commuters and increase dwell time
Mixed use precinct
• Offering ability to ‘live, socialise and play’ in
a safe and secure environment while
providing a solution for middle-income
earners to live and work within a close
proximity
Masterplan
• Partner with COJ to create a master design
that integrates transport links and the
broader precinct encompassing broader
social inclusion as identified by COJ
50
ProjectsBalfour Mall precinct
Highlands Mall
• The Fund has purchased the Highlands
Mall, a strategically located strip mall on
the corner of Louis Botha Avenue and
Athol Street in Highlands North
• The acquisition provides an opportunity
for the Fund to significantly strengthen
the Balfour Mall precinct
• Intention is to create a space in which the
target market is able to ‘live, socialise
and play’ in a safe and secure
environment, while providing a solution
for middle income earners to live and
work within close proximity
50
10CAPITAL EXPENDITURE AND
SUSTAINABILITY
52
• R182.0m spend on capital projects, refurbishments and maintenance capex during the year
› Includes R46.1m on sustainability projects that generated average return of 14%
› Project spend included R74.7m on Fleurdal Mall extension, Design Quarter refurbishment and Firs refresh
› Includes an amount of R48.9m attributable to general capex spend
• R90m sustainability budget for FY20 – ±90% earmarked for projects generating 13-15% returns
Capital expenditure and sustainabilityR90.8m earmarked spend for FY2020,
of which R79.1m is return generating
Rooftop Solar PV
• Structural assessment
of Design Quarter
• Awaiting Eskom approval
for Nicol Grove
• Identified 10 additional
buildings for Solar PV -
commitment of R70m
Energy efficiency
(ROI)
• Request for proposals
sent out for 9 properties
- commitment of ±R7.5m
Risk mitigation
• Investigate installation
of aerators to reduce flow
rate on basin taps thereby
reducing water usage
• Partnership with Don’t Waste
to develop an integrated
waste management
and recycling strategy -
currently implemented at 8
sites
• Audit of waste contractors on
all properties to identify
opportunities to decrease
waste going to landfill
• Futureproofing buildings
through diversion to avoid
potential landfill penalties
Green Building
Council of
South Africa
• Existing Building
Performance rating:
› 2929 on Nicol & Nicol Main
Office Park - 4 Star Green
Star EBP Rating
• Identified 7 additional
buildings - commitment of
±R2.4m
11LOOKING
FORWARD
54
Challenges
• South African portfolio to deliver base NPI growth similar to FY19
during the forthcoming year
› Short term outlook in South Africa remains challenging
› Edcon restructure has impacted the guidance for FY2020 by
1%
54
Drivers of growth
• Pan-European strategy expected to
provide earnings accretion
› supported by accretive Pan-European
light industrial investment
› successful execution of leasing and
asset management strategy
• Potential for further earnings
enhancement through:
› efficient capital recycling
› partial sale of IAPF (marginally offset
by impact of change in IAPF’s
distribution policy on remaining stake)
• Upper end of guidance range dependent
on extent of capital deployed into
European pipeline during FY2020
GuidanceExpected FY2020 DPS growth of between 3% and 5%
55
• Good FY2019 performance in a difficult
environment
• FY2020 will be very challenging in the
local market
• Continue to invest in offshore strategy
– key driver of FY2020 growth
• Conservative balance sheet and active
treasury management remains a
fundamental focus area
• Well-positioned to withstand difficult
trading environment and to achieve long-
term growth
• Well-placed to take advantage of market
dynamics
Conclusion
55
12ANNEXURES
57
IPF track recordIPF share price performance vs. peers since listing
80%
100%
120%
140%
160%
180%
200%
220%
Ap
r 1
1
Ju
n 1
1
Au
g 1
1
Oct 11
De
c 1
1
Feb
12
Ap
r 1
2
Ju
n 1
2
Au
g 1
2
Oct 1
2
De
c 1
2
Feb
13
Ap
r 1
3
Jun 1
3
Au
g 1
3
Oct 1
3
De
c 1
3
Feb 1
4
Ap
r 1
4
Ju
n 1
4
Au
g 1
4
Oct 1
4
De
c 1
4
Feb
15
Ap
r 1
5
Ju
n 1
5
Au
g 1
5
Oct 1
5
De
c 1
5
Feb
16
Ap
r 1
6
Ju
n 1
6
Au
g 1
6
Oct 1
6
De
c 1
6
Feb
17
Ap
r 1
7
Ju
n 1
7
Au
g 1
7
Oct 1
7
De
c 1
7
Feb
18
Ap
r 1
8
Ju
n 1
8
Aug 1
8
Oct 1
8
De
c 1
8
Feb
19
Ap
r 1
9
Investec (92%) Vukile (46%) Emira (5%) Growthpoint (42%) Redefine (40%) SA Corporate (5%)
58
Sector forward yieldsIPF well-rated against peer group
Source: Bloomberg as at 10 May 2019
Notes:
1. Yields are based on rolling 12-month distributions on clean prices
2. Numbers in brackets represent fund gearing
6.1
% 7.1
%
7.4
%
8.2
%
8.4
%
8.8
%
9.4
%
9.5
%
9.7
%
9.7
%
9.7
%
10.4
%
10.5
%
10.9
%
11.1
%
11.2
%
11.6
%
11.7
%
11.9
%
11.9
%
12.2
%
12.4
%
13.5
%
13.7
%
14.6
%
15.1
%
15.2
%
15.7
%
15.9
%
16.6
%
16.7
%
17.9
%
22.2
%
0%
5%
10%
15%
20%
25%
Attacq (
36%
)
IAP
F (
38%
)
Equites (
27
%)
Fort
ress A
(3
2%
)
Lib
ert
y 2
Degre
es (
16%
)
Sto
r-A
ge (
28%
)
Gro
wth
poin
t (3
5%
)
Exe
mpla
r (2
0%
)
Vukile
(3
9%
)
Inve
ste
c
(36%
)
Re
sili
ent
(26%
)
Spea
r (3
6%
)
Dip
ula
A (
41
%)
Em
ira
(41%
)
Re
define
(4
2%
)
Octo
de
c (
37%
)
Ho
sp
ita
lity (
16%
)
Hypro
p (
22%
)
Fair
ve
st
(27%
)
SA
Corp
ora
te (
35%
)
Gem
gro
w A
(27
%)
Tra
nscend
(43%
)
Gem
gro
w B
(27
%)
Indlu
pla
ce (
30%
)
Dip
ula
B (
41
%)
Safa
ri (
13%
)
Re
bosis
A (
52%
)
Fort
ress B
(3
2%
)
Accele
rate
(42%
)
Texto
n (
40%
)
To
we
r (3
9%
)
Arr
ow
hea
d (
38
%)
De
lta
(4
1%
)
Forward yield on clean price Sector Weighted Average (10.8%)
59
Price/NAVInvestec relative to peers
Source: Bloomberg as at 10 May 2019
1.2
1
1.1
8
1.1
1
1.0
9
1.0
4
1.0
3
1.0
2
1.0
2
0.9
6
0.9
3
0.9
0
0.9
0
0.8
9
0.8
5
0.8
5
0.8
3
0.7
5
0.7
4
0.7
1
0.7
0
0.6
9
0.6
8
0.6
6
0.6
3
0.6
2
0.6
0
0.6
0
0.5
6
0.5
4
0.5
2
0.4
6
0.4
3
0.2
6
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
Equites
Sto
r-A
ge
Fort
ress A
Dip
ula
A
Gem
gro
w A
Vukile
IAP
F
Exe
mpla
r
Gro
wth
poin
t
Re
define
Tow
er
Inve
ste
c
Fair
ve
st
Spea
r
Re
bosis
A
Em
ira
Fort
ress B
Lib
ert
y 2
Degre
es
SA
Corp
ora
te
Dip
ula
B
Gem
gro
w B
Hypro
p
Octo
de
c
Indlu
pla
ce
Safa
ri
Tra
nscend
Attacq
Ho
sp
ita
lity
Re
sili
ent
Arr
ow
hea
d
Accele
rate
Texto
n
De
lta
60
Portfolio composition
39%
41%
20%
Retail
Office
Industrial
Sectoral spread by revenue
42%
36%
22%
Retail
Office
Industrial
Sectoral spread by asset value
60
61
Sectoral composition
77%
13%
7% 3%
Shopping centres
Retail Warehouse
Motor dealership
High street
Retail
36%
64%
Single
Multi
Office
61
10%
5%
17%
19%
49%
High tech industrial Standard units
Warehouses Manufacturing
Logistics
Industrial
62
8%9%
6%
10% 10%
6% 5%
8%
6%
10%
7%
3%
1%
5% 6%
21%
17%
15%
21%
26%
0%
10%
20%
30%
2020 2021 2022 2023 April 2023 Onwards
Retail Office Industrial Portfolio
Lease expiry (by revenue)33% of FY2020 expiries already let
63
• Density above R2,100/m² at all centers, with the exception
of Design Quarter and Balfour Mall
• Trading density growth of 2.5% including Design Quarter
and Balfour Mall (4.5% excluding)
RetailTrading performance
• Positive growth in a tough environment, with only Balfour
Mall showing negative growth - trade expected to improve
with Rea Vaya and precinct development plan
• Design Quarter showing positive growth and improved
trading numbers
• Long term growth expected to be in line with long term
wage growth (4%-4.5%)
• Centers are proving to be robust in a difficult market,
with vacancy rates near industry lows at 1%
7.2% 7.0%5.0% 4.8%
2.1% 1.8% 1.1%
(9.8%)
Dihlabeng Kriel Fleurdal DesignQuarter
Newcastle Zevenwacht Nonkqubela Balfour
63
Retail - annual turnover growth (%)
5.6% 5.7% 5.9% 5.7% 5.8% 5.7% 5.8% 5.8%5.0% 5.1% 4.8%
4.1%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Like-for-like turnover excluding Design Quarter and Balfour Mall (%)
1,650
2,400
1,7902,120 2,260
3,130
2,1802,430 2,330 2,340
Balfour BoitekongMall
DesignQuarter
Dihlabeng Fleurdal Great NorthRoad Plaza
Kriel Musina Newcastle Zevenwacht
Trading density by centre (R/m²)
2018 2019
64
Top 10 tenants
Tenant name %
Investec 4.1
Cliffe Dekker Hofmeyr 3.6
Woolworths 2.2
Innovation 1.7
Fluxmans Attorneys 1.4
Nedbank Group 1.4
Samsung Electronics 1.2
Clover 1.0
Mentoprox 1.0
Bigen Africa 0.9
Tenant name %
Altron Ltd 1.6
Kevro Trading 1.3
RTT Group 1.1
General Electric 1.1
CWT-ASI 1.0
Adcock Ingram Healthcare 0.9
Discovery Health 0.8
Tiger Brands 0.8
Martin & Martin 0.7
SA Ladder 0.7
Tenant name %
Massmart 4.4
Shoprite Checkers Group 2.6
Edcon Group 1.8
Bidvest 1.6
Mr Price Group 1.3
Foschini Group 1.1
Pick 'n Pay Group 1.1
Pepkor Group 0.9
Woolworths 0.9
Zenith Park Trading 0.6
OfficeGross revenue
% of total portfolio
IndustrialGross revenue
% of total portfolio
RetailGross revenue
% of total portfolio
Specialist Banking | Asset Management | Wealth & Investment
SOUTH AFRICA
RESULTS
PRESENTATION
Disclaimer
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