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Results presentation
For the period ended
30 September 2018
Contents
1. Highlights and key events
2. Portfolio review
3. Investments
4. Financial review
5. Balance sheet management
6. Projects
7. Conclusion and guidance
8. Annexures
Highlights and key events
Highlights – FY19 H1Performance underpinned by offshore investments
5.4%Normalised distribution growth
68.81
Cents per share
1 Including strategic development vacancy 3.8% (Mar 2018:4.8%)2 Annualised
(Mar 18: 65.27%)
86.3%South Africa
6.0%Australia
1.1%
UK
6.6%Europe
The
Balance sheet composition
1
Vacancy1
.1%
(Mar 2018: 4.0%)
25.1%
11.2% income yield 13.9% capital uplift
Total return from Pan-European logistics portfolio in Europe91
.0%Of space expiring in the period renewed or re-let
Increase in NAV
.9%
EUR.7%
Like-for-like net property income growth
(Mar 2018: 5.7%)
2
4
1
Strategic pillarsAchieved progress, however there remains room for improvement
• Low vacancies (decreased from 4.0% to 3.1%, excluding development vacancies)
• Investment ahead of time to secure revenue stream
• Innovative solutions tailored to client needs
• IPF differentiator
• Client engagement strategy and formal client feedback strategy to ensure
• Client needs are timeously addressed
• Service delivery remains relevant
• The feedback programme and scoring mechanism provide objectives that are:
• Measurable & Actionable
• Ongoing improvement
• Relevant efficient core offering
• Differentiated level of service
• Efficient capital allocation
• Maximise long term risk adjusted returns
• Increase offshore exposure to 20% remains a core objective
• Allocate up to 10% into ‘broken core’, value add transactions and specialised assets
• Focus on cost – primary focus in current environment
• Largely remain below inflation
• Will commit to spend for benefit of client service and/ or to enhance the safety and security of the Fund’s offering
• Increase in variable expenses due to increased level of incentives offered to clients in this competitive environment
Revenue security and growth 2
3 4
Client service excellence
Value add asset management and capital allocation
Cost efficiency and system optimisation
5
1
Progress on strategic pillarsAchieved progress, however there remains room for improvement
Revenue security and growth
Leases expiring after 5 years (Mar 2018: 45%)
44%Vacancy23.1%
(Mar 2018: 4.0%)
2 Client service excellence
91.0%
Of space expiring in the period renewed or re-let
1
1 65.0% of space expiring in FY19 already let2 Including strategic development vacancy 3.8% (Mar 2018: 4.8%)
68.3%
Retention ratio for the period
(Mar 2018: 48.0%)
Not reflective of clientrelationships or property offering but rather driven by business consolidation, downsizing, and some clients moving to ‘owner occupied’ premises
Formal feedback programme in place that provides measurable and actionable objectives
6
Progress on strategic pillarsAchieved progress, however there remains room for improvement
3 4Value add asset management and capital allocation
Cost efficiency and system optimisation
13.7%Offshore exposure
(Mar 2018: 11.7%)
25.1%Total return from Pan-European logistics portfolio in Euro (ZAR 26.3%)
R1.6bnAssets earmarked for sale at an average yield of 8.4%
6.2%Increase in fixed cost base
Expenses increased due to increase in rates, tenant installations, letting commissions, legal expenses and repairs and maintenance
Willing to spend more in areas that benefit client service and/or enhance the safety and security of offering
Full review of contractual procurement spend being undertaken across all service providers to maximisebuying power
1 Annualised
1
7
Portfolio review
Actual Actual
30 Sep 2018 31 Mar 2018
R'm % R’m %
SA Investment property 17 633 84.4 17 599 91.8
Ingenuity 116 0.6 115 0.6
Izandla 278 1.3 206 1.1
South African assets 18 027 86.3 17 920 93.5
Investec Australia Property Fund 1 252 6.0 1 052 5.5
Investec Argo UK 223 1.1 192 1.0
European logistics portfolio 1 379 6.6 - -
Offshore assets 2 854 13.7 1 244 6.5
Total investments 20 881 100.0 19 164 100.0
Balance sheet constructDiversified balance sheet across SA & developed markets
9
1 Includes income received and accrued from IAPF (R53.0m), UK Fund (R5.7m), Pan-European logistics portfolio (R61.8m) and Izandla (R8.5m). Increase year-on-year is as a result of European logistics portfolio2 Other operating expenses comprise of fund expenses and the management fee3 Tax included in the distribution recon relates to withholding tax on IAPF dividend4 Net property declined as a result of the sale of properties. Base net property income increased by 1.7%
Actual Actual30 Sep 2018 30 Sep 2017 +/-
R'm R'm %Net property income (excluding straight lining) 720.7 741.4 (2.8) 4
Base net property income 685.1 673.9 1.7Acquisitions and disposals 35.6 67.5 (47.3)Income from Investments1 129.0 79.1 63.1Notional cost of Ingenuity funding 4.4 3.4 29.4Other operating expenses2 (46.1) (37.5) 22.9Net finance costs (300.3) (292.2) 2.8Antecedent dividend 1.6 - -Taxation (net of deferred tax)3 (2.7) (3.2) (15.6)Net distributable income 506.6 491.0 3.2Number of shares 736 290 993 718 150 167 2.5Interim dividend per share (cents) 68.81 68.37 0.6IAPF once off rights offer dividend (cents) - (3.10) -Core dividend per share (cents) 68.81 65.27 5.4
Summarised distribution statement5.4% normalised distribution growth
10
506,615
8,160 8,596
32,584 61,810
11,862 8,519 1,608 1,553 970 737 155
468,741
450,000
470,000
490,000
510,000
530,000
550,000
570,000
1
Dividend bridge5.4% normalised distribution growth
1Excluding one off IAPF antecedent of R22.2m in HY18 11
Portfolio overview
Despite an extremely challenging operating environment the base property portfolio delivered net property income (‘NPI’) growth of 1.7%
The growth in NPI was driven by positive escalations, offset by void periods, lower rental reversions, increased vacancies and increases expenses.
Cost to income ratio has deteriorated from 16.6% to 19.3% as a result of:1. 3.4% core rental growth which is lower than contractual
escalations due to void periods and lower rental reversions; 2. An increase in gross recoveries of 14.1%³ caused by the
increase in rates costs following revised municipal valuations; and
3. An increase in gross costs of 16.7% driven by the above-mentioned increase in rates as well as increased costs of letting
Despite the challenging environment vacancy has decreased since last reported from 4.0% down to 3.1%1
1 3.8% including strategic development vacancy (31 Mar 2018: 4.8%)2 31 March 2018 and includes all legal debtors3 Including rates recoveries included in gross income4 I1.1% excluding legal debtors
30 September 2018
30 September 2017
+/-%
Rm Rm
Gross income 853.1 810.6 5.2%
Gross expense (327.7) (280.7) 16.7%
Gross recoveries 159.7 144.0 10.9%
Net expense (168.0) (136.7) 22.9%
Base net property income 685.1 673.9 1.7%
Acquisitions 10.9 8.1 (34.6)%
Disposals 24.7 59.4 (58.4)%
Net Property Income 720.7 741.4 (2.8)%
+/-Absolute
Net cost to income ratio 19.3% 16.6% 2.7%
Arrears % collectibles 3.1%⁴ 3.1%2 0.0%
Average escalations % 7.6% 7.6%2 0.0%
WALE (years) 3.3 3.32 0.0
Vacancy %1 3.1% 4.0%2 1.0%
12
Office
— Challenging environment - over supply and subdued demand for space
— Contractual rental growth of 4.7% due to an increase in vacancy to 6.5% (from 5.7%) and lower reversions
— Gross income growth of 6.9% as a result of higher rates and operating cost recoveries (which are a matched by the higher expense)
— Net expenses up 44.0% due to increase in rates, tenant installations, letting commissions, legal expenses and repairs and maintenance.
— Office net cost to income ratio has increased from 14.2% to 21.2% as a result of increase in vacancies, low reversions and non recoverable expenses linked to leasing.
— Overall Base NPI growth at 0.2%
— Vacancies are expected to increase marginally by year-end
30 September 2018
30 September 2017
+/-%
Rm Rm
Gross income 344.1 321.8 6.9%
Gross expense (116.1) (88.9) 30.6%
Gross recoveries 44.7 39.3 13.7%
Net expense (71.4) (49.6) 44.0%
Base net property income 272.7 272.2 0.2%
Acquisitions 1.1 0.4 100.0%
Disposals (1.3) 16.8 (107.7)%
Net Property Income 272.5 289.4 (4.9)%
+/-Absolute
Net cost to income ratio 21.2% 14.2% 7.0%
Arrears % collectibles 1.6% 1.1%2 0.5%
Average escalations %1 8.1% 8.0%2 0.1%
WALE (years) 3.1 3.32 (0.2)
Vacancy % 6.5 5.42 (1.1)
1 The average escalation increased as IPF is able to negotiate higher escalations due to lower reversions2 31 March 2018
13
Industrial
30 September 2018
30 September 2017
+/-%
Rm Rm
Gross income 166.1 167.2 (0.7)%
Gross expense (58.1) (51.9) 11.9%
Gross recoveries 27.5 25.5 7.8%
Net expense (30.6) (26.4) 15.9%
Base net property income 135.5 140.8 (3.8)%
Acquisitions 9.8 7.7 27.3%
Disposals 23.3 33.1 (29.6)%
Net Property Income 168.6 181.6 (7.2)%
+/-Absolute
Net cost to income ratio 17.0% 14.2% 2.8%
Arrears % collectibles 5.7% 5.0%1 0.7%
Average escalations % 7.9% 7.9%1 0.0%
WALE (years) 3.5 3.71 (0.2)
Vacancy % 3.4% 5.7%1 2.3%
— The industrial sector is experiencing weak tenant demand as businesses struggle to run profitable operations
— Contractual rental growth of negative 1.3% due to an increase in void periods and lower reversions
— Gross income negative growth of (0.7)% due to voids skewed by higher rates recoveries (which are a matched by the higher expense)
— Net expenses up 15.9% due to increase in rates, tenant installations, letting commissions and repairs and maintenance
— Industrial net cost to income ratio has increased from 14.2% to 17.0% as a result of increase in vacancies and net expenses
— Overall Base NPI growth at negative (3.8)%
— Vacancies are expected to decrease by year end
1 31 March 2018 14
Retail
30 September 2018
30 September 2017
+/-%
Rm Rm
Gross income 342.9 321.6 6.6%
Gross expense (153.5) (139.9) 9.7%
Gross recoveries 86.0 79.2 8.6%
Net expense (67.5) (60.7) 11.2%
Base net property income 275.4 260.9 5.6%
Acquisitions - - 0.0%
Disposals 2.7 9.5 (71.6)%
Net Property Income 278.1 270.4 2.8%
+/-Absolute
Net cost to income ratio 19.1% 18.9% 0.2%
Arrears % collectibles 3.5% 3.8%1 (0.3)%
Average escalations % 7.1% 7.3%1 (0.2)%
WALE (years) 3.2 3.01 0.2
Vacancy %2 0.8% 3.3%1 2.5%
— The retail sector to date has proved its resilience in a challenging market
— Contractual rental growth of 5.9% due to low vacancies and positive reversions
— Gross income growth of 6.6% due to escalations and increased rates; offset by voice by an increase in vacancies
— Net expenses up 11.2% due to increase in rates, offset by bad debts recovered as well as increased tenant installations and commissions
— Retail net cost to income ratio has increased from 18.9% to 19.1% due to an abnormal accrual reversed in the current year
— Overall Base NPI growth at 5.6%
— Vacancies are expected to remain at these levels at year end
1 31 March 20182 Including strategic development vacancy 2.8% (Mar 2018: 3.3%)
15
Trading densities and foot count— Trading densities and foot count flat; however turnovers continue to grow; evidence of IPF Mall’s appeal— Challenge to incentive shoppers to choose IPF malls over other options with higher transport costs
1,670
2,320
1,810 2,080 2,200
3,140
2,160 2,300 2,290 2,290
- 500
1,000 1,500 2,000 2,500 3,000 3,500
Like-for-like turnover growth on a rolling 12-month basis1 Trading density by centre
RetailTrading performance
Edcon Potential loss — Discussions with management are ongoing – 27 579m² GLA (R37.0m total revenue) – less than 2% of total revenue
2.3%2.5%
3.1% 3.2% 3.3%3.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18
1Excluding Musina Mall, not comparable on a like-for-like basis due to extension however centre is trading well 16
Expiries & cancellations
Renewals & new lets
Gross expiry rental
Gross new rental
Rental reversion
Average escalation WALE Retention
YTD GLA GLA R/m2 R/m2 % % Years %
Office 26 339 22 696 183.9 154.8 (15.8)1 7.4 4.6 77.6
Industrial 49 831 43 755 50.7 48.0 (5.2) 2 8.0 2.0 40.04
Retail 48 290 47 122 157.1 157.1 0.03 6.9 4.7 92.5
Sub-total 124 460 113 573 121.4 114.6 (5.6) 7.4 3.8 68.3
1 Negative reversion driven by the current letting environment 2 Long term leases where expiry rentals had escalated above current market, renewed at market3 Reversion subdued due to negative reversion of 20% on a 9 298m² retail warehouse4 Low retention due to 2 clients not renewing 8 549m² and 21 441m² 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
17
Letting activity H191% of space that became available in FY19 H1 was let
Carrying amount 31 Mar 2018
Revaluation & Straight lining
Other Capital Movements1
Directors Valuation30 Sep 2018
Total ChangeRevaluation & Straight lining
Forward Yield2 31 Mar 2018 yield
R'm R'm R'm R'm % % % %
Office 6 362.7 (56.6) 8.0 6 314.2 (0.8) 0.6 9.29.0
Industrial 3 352.7 (19.4) 15.3 3 548.6 (0.1) (0.6) 9.39.0
Retail 7 003.6 40.9 58.0 7 102.5 1.4 (0.8) 8.48.5
Total Base 16 719.1 (35.1) 81.3 16 765.3 0.3 (0.2) 8.9 8.8
Total Acquisitions 261.4 2.2 0.1 263.7 - - 8.9 9.5
Held For Sale 618.4 4.8 (18.8) 604.4 - - 7.5 7.4
Total Portfolio 17 598.9 (30.3) 64.8 17 633.4 0.2 (0.2) 8.7 8.9
1 Other capital movements comprises of disposals, capex and projects2 Premised on 100% let adjusted for structural vacancies3 Properties held for sale include Brandhouse (R464.5m), Beechwoord House (R37m), Scientific Building (R35m), Capital Motors (R23m), Commerce Corner (R23m), International SOS (R15m) and Boxer Cofimvaba (R6.9m)
Property valuationsConservative valuations at a yield of 8.7%
18
5% 5% 6% 7%
14%
2%
5%3%
1%
12%
1%
8% 8%
5%
18%
8%
18% 17%
13%
44%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2019 2020 2021 2022 April 2022 Onwards
Office Industrial Retail Portfolio
215 053m2 expiring in FY19 of which 65% has already been let
Lease expiry – By revenue
19
Investments
European logistics portfolioPerformance
Investment• Completed the initial investment of €71.9m• Funded though a combination of existing ZAR facilities
and a €40 million secured term loan at all in rate of 1.98%
• 100% of the income hedged for a period of 5 years
Performance
11.2% income
return (11.6% ZAR)
Deal case 10.5% (uplift as a result of stronger leasing activity)
13.9% capital uplift
on initial investment (14.7% ZAR)
As a result of external revaluations of properties by 7.4%
Future investments― Further €7m will be deployed during FY2019 - acquisition of
two further logistics properties― Returns in line with those of the initial transaction
Key portfolio metrics
European logistics portfolio 30 Sep 2018
Total value of property (million) €463.9m
Value of investment R1.4bn
Income return p.a. 10.5%
WALE (years) 3.2
Vacancy 10.1%1
Number of properties 22
1 Reflects a 2 month rolling lease in Maasvlakte as vacant (in negotiations to renew) as well as a unit in Le Havre covered by a rental guarantee. Excluding these – vacancy 7.0% 21
Performance
4.0% growth on net
returns, post funding
Including FX uplift- 0% growth in AUD
19% capital uplift
during the period
Discount to NAV closing as IAPF move towards an ASX listing
Key portfolio metrics
IAPF30 Sep
201831 Mar
2018
Total value of property (million) AUD1.0bn AUD987m
Value of investment R1.3bn R1.0bn
Distribution return p.a. (AUD) 8.2% 8.0%
WALE (years) 5.1 5.2
Vacancy 1.0% 1.5%
Number of properties 27 27
IAPFQuality asset base
22
Investment• Capital continues to chase investment product in the UK maintaining
pricing at record levels• Interest rates are predicted to rise (albeit slowly from a low base) - little
impact on investment pricing• Industrial - hotly contested in main stream investment market.
Institutional appetite insatiable for well located logistics or multi let assets particularly in London and the South East. Investors appear to have grown more used to the political risks posed by Brexit, although this story still has a long way to play out
Key portfolio metricsUK Market• Extremely difficult to price due to Brexit
uncertainty
Deployed £681k during the year
UK Fund30 Sep
201831 Mar
2018
Total value of property (million) £233.8 £233.8
Value of investment R223m R192m
Distribution return p.a. 5.9% 7.2%
WALE (years) 10.5 10.5
Vacancy 2.3%1 1.6%
Number of properties 12 11
1 Including strategic refurbishment vacancy 9.9% (Mar 2018: 1.6%)
Investec Argo UKRemains a strategic investment – only R11m deployed YTD
23
Attractive investment underpinned by quality Western Cape property
- Total investment of R115.8m
- No additional shares purchased
- Average cost of acquisition: R0.84cps
- Average cost of acquisition if notional cost of funding is capitalised: R0.95cps
- Last reported AV R1.32cps at 28 February 2018
Ingenuity
Further investment of R71m
- R71m further investment - Glyn street acquisition and Sasol development
- Interest on the mezzanine loans - only included in distributable income to the extent serviced
- R6m interest not serviced for FY19 H1
Izandla
SA InvestmentsIngenuity and Izandla
Izandla30 Sep
201831 Mar
2018
Total value of property (million) R652.3m R522.5m
Value of investment R0.3bn R0.2bn
WALE (years) 3.2 3.2
Vacancy 6.2% 10.3%
Number of properties 15 13
24
Financial Review
Summarised income statement
Actual Actual
30 Sep 2018 30 Sep 2017 +/-
R'm R'm Rm
Net property income (including straight-line adjustment) 744.3 757.9 (13.6)
Other operating expenses (46.1) (37.5) (8.6)
Fair value adjustments 367.2 0.9 366.3
Mark to market – derivatives 10.5 (118.0) 128.5
Foreign exchange translation– foreign loans (42.5) 8.4 (50.9)
Mark to market - investment property (51.7) 90.4 (142.1)
Mark to market – investments 220.4 15.2 205.2
Mark to market – European logistics portfolio 235.5 - 235.5
(Loss)/profit on sale of investment property (5.0) 4.9 (9.9)
Net finance costs (300.2) (292.2) (8.0)
Income from investments 133.0 50.0 83.0
Taxation (7.2) (5.5) (1.7)
Accounting profit after tax 891.0 473.6 417.4
26
Summarised balance sheet
Actual Actual30 Sep 2018 31 Mar 2018 +/- +/-
R'm R'm R'm %Property related investments 20 881 19 164 1 717 9.0
South Africa – Property1 17 633 17 599 34 0.2IAPF2 1 251 1 052 199 18.9UK 223 192 31 16.1Europe 1 379 - 1379 -Ingenuity 116 115 1 0.9Izandla3 279 206 73 35.4
Other assets 394 282 112 39.7Cash4 180 507 (327) (64.5)Total assets 21 455 19 953 1 500 7.5Shareholders interest 13 103 12 644 457 3.6Long term borrowings5 7 771 6 757 1 014 (15.0)Total funding 20 874 19 401 1 471 7.6Other liabilities 581 552 29 5.3Total equity and liabilities 21 455 19 953 1 500 7.5Net asset value per share (cents) 1 780 1 729 50 2.9
1 IPF sold R26m SA properties, spent R89m on capital projects and R28m of revaluation adjustment (including straight-lining)2 IAPF had a MTM movement of R201m driven by the higher share price 3 R71m further investment into Izandla for the Glyn street acquisition and Sasol development 4 Cash was raised in the previous financial year to part fund the acquisition of the European logistics portfolio 5 Long term borrowings increased as a result of the European logistics portfolio acquisition
27
13,103
1,342
26
1,144 157 78
201 31 37 25 71
73 10
12,644
1 The working capital increased mainly as a result of increased tenant installations and commission2 MTM on derivatives
21
Net asset value bridgeNAV per share growth of 2.9%
28
Balance sheet management
R3.0bnDebt imminently refinanced
Blended rate 1.75bps above 3-month JIBARAverage tenor 4.7 years
36.3%Gearing
Driven by investment into European logistics portfolio (Mar 18: 32.6%)
1
8.0% all in cost
of funding (Mar 18: 8.6%)
83% hedged
(Mar 18: 84%)
R81.1mEquity raised
At R16.60 per share
1 Gearing shown net of cash
Highlights – FY19 H1
30
30 Sep 20181 31 Mar 2018
Average all in cost of funding 8.0% 8.6%
Average debt margin - ZAR 1.65% 1.64%
Average swap rate – ZAR 7.57% 7.56%
Average all in fixed rate – AUD 4.71% 4.71%
Average all in fixed rate – GBP 2.36% 2.32%
Average all in fixed rate - EUR 1.98% n/a
Debt maturity (years)2 3.7 2.7
Swap maturity (years) 3.3 3.8
Hedge percentage3 83% 84%
Gearing %4 36.3% 32.6%
Encumbrance ratio5 38.4% 33.5%
% debt unsecured6 59.4% 65.4%
1 All metrics are post refinance2 Based on drawn debt and shown post the refinance of R3.0bn bank debt3 Hedged percentage includes all interest rate swaps and cross currency swaps over total debt4 Gearing shown net of cash5 Secured assets as a percentage of total investments6 Secured debt as a percentage of total debt facilities
30 Sep 2018 31 Mar 2018
% CCS of AUD investment 43.7% 51%
% CCS of GBP investment 36.4% 50%% EUR debt of European logistics portfolio 54.8% n/a
Balance sheet metricsBalance sheet well positioned
31
Balance sheet metrics
Debt Swap Expiry (post refinance) Weighted expiry profile (years)
3.7
3.3
2.9 2.7
3.8 3.6
Debt Swaps Cross currencyswaps
30 Sep 2018 30 Mar 2018
8%
14%
10%
20%
15% 15%14%
3%2%
6%
23% 24%25%
17%
3%
0%
Total debt Total swaps
32
Bank/ HQLA/ DMTN expirySources of funding
Balance sheet metrics
1
1 HQLA - High-quality liquid assets
31%
5%
34%
23%
7%
DMTN Commercial paper
Bank debt HQLA
Foreign debt (euro denominated)
0%
7%
3%
16%
12%
0% 0%
2%
0% 0% 0% 0% 0%
12%11%
0%
4%
7%7%
4%3% 3%
4%
0%
5%
0% 0% 0% 0% 0% 0% 0%
FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26
Bank HQLA DMTN Commercial Paper
33
Early debt refinanceR3.0bn of bank debt imminently refinanced to limit liquidity and pricing risk
R3.0bn of bank debt that was due to mature in next 2 years has been imminently refinanced
The refinance improves:― weighted average debt expiry to 3.7 years ― marginal cost to IPF― marginal security impact― and increased level of flexibility driven by increased revolver facilities negotiated― R1.3bn refinanced effective 9 November 2018 – remainder of R1.7bn by 16 November 2018
Debt package Post re-finance Existing
Weighted average margin (%) 1.75 1.69
Weighted average expiry (years) 4.67 1.28
Secured debt (% total debt) 38% 36%
Level of revolvers (Rm) 930 660
― Equates to 33% of total debt book and 66% of total bank exposure
34
Projects
Refurbishment of centre, improving vertical communication, growing the lifestyle and convenience offering and improving shopper experience
• Final design and feasibility in process
Improving patron’s experience with a new contemporary and fresh look
and feel
• Date of completion: Mid December 2018• Total spend – R29.5• New entrance off Birman Avenue• Defensive spend required due to
significant increased competition• Current retail vacancy 810m² (20%)• Profile new entrances• Refresh piazza environment• Refurbish interior and tenant signage• Link piazza restaurant into office foyer
Maintaining the malls position by closing out the potential for
competing developments in its catchment area
• Date of completion: End July 2019• Total spend – R103.7m• New 3 000m² Woolworths• New 1 500m² Dischem• New 440m² Mr Price Sport• Relocation of existing tenants to make
way for the extension• Additional 200m² line shops• New 630m² line shops• New entrance off Birman Avenue
Design Quarter The Firs Fleurdal
Redevelopments and projectsMilestones achieved in period
36
SustainabilityMilestones achieved in period
Rooftop Solar PV Budgeted yield for the period %
Actual Yield
Fleurdal Mall (940kW) 8.9% 12.1%
Musina Mall (1400kW) 11.0% 13.3%
Rooftop Solar PVSolar RFP completed - 6 MW’s Project has commenced across 9 sites (Total capex of R58.5m – expected yield of 12.6%)
Risk Mitigation
Water Leak Management - AquaTripinstalled at Barinors Vineyard, Vinebridgeand Zevenwacht. Next phase being finalised.
Green Building Council of South Africa
Energy Efficiency (ROI)
― Lighting upgrade completed at The Firs. Measured savings achieved is greater than 50%
— 2929 on Nicol received a 4 star Green Star Existing Building Performance Rating
— Nicol Main Office Park - 90% of the preparation towards submission completed
— The Firs - 70% of the preparation towards submission completed — 4 Sandown Valley Crescent – on hold
37
Conclusion
Guidance
— Strong FY19 H1 performance considering the challenging operating environment
— 13.7% asset base offshore
— Continued focus on four strategic pillars, but key focus is leasing
— Revenue security and growth
— Client services excellence
— Value add asset management and capital allocation
— Cost efficiency and system optimisation
— Europe is a key driver for us in the next 12 months
— SA remains under pressure
— Focus on:
— M&A activity
— De-leveraging the balance sheet
— Guidance for FY19 - 5.0% to 5.5%
— Good luck to the new management team
— Thank you to all for your support over last 3.5 years
— Investors
— Property team
— Board
— Clients
— Service providers
— Partners
— Banks and debt providers
— Shareholders
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Annexures
Annexures
1. IPF performance versus peers since listing2. Fund snapshot3. Vacancy Reconciliation – YTD4. Portfolio compositions5. Top 10 tenants
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50%
70%
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110%
130%
150%
170%
190%
210%
Ap
r-1
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Jul-1
1
Oct
-11
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12
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2
Jul-1
2
Oct
-12
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13
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Jul-1
3
Oct
-13
Jan-
14
Ap
r-1
4
Jul-1
4
Oct
-14
Jan-
15
Ap
r-1
5
Jul-1
5
Oct
-15
Jan-
16
Ap
r-1
6
Jul-1
6
Oct
-16
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Ap
r-1
7
Jul-1
7
Oct
-17
Jan-
18
Ap
r-1
8
Jul-1
8
Oct
-18
Investec (160%) Vukile (143%) Emira (114%)
SA Corporate (119%) Growthpoint (134%) Redefine (136%)
Annexure 1IPF performance versus peers since listing
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IAPF R1.3bn
Europe R1.4bn
UK Fund R0.2bn
Izandla R0.3bn
Ingenuity R0.1bn
Market Capitalisation R12.4bn
Share price R15.00
30 VWAP R14.93
Gearing 36.3%
NAV R17.79
Property & investment value R20.8bn
INVESTMENTS
No. of properties 104
GLA (m2) 1 243 331
Vacancy 3.1%
WALE (years) 3.3
In-force escalation 7.6%
Property asset value R17.6bn
PROPERTY PORTFOLIO
No. of properties 32
GLA (m2) 251 722
Vacancy 3.8%
WALE (years) 3.1
In-force escalation 8.1%
Asset value R6.4bn
OFFICE
No. of properties 39
GLA (m2) 573 404
Vacancy 3.4%
WALE (years) 3.5
In-force escalation 7.9%
Asset value R4.1bn
INDUSTRIAL
No. of properties 33
GLA (m2) 418 205
Vacancy 2.8%
WALE (years) 3.2
In-force escalation 7.1%
Asset value R7.1bn
RETAIL
Annexure 2Fund snapshot
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902m2
OPENING VACANCY OF 4.0%
59
010m2
STILL TO BE LET FOR HY19
47(67 254)m²
NEW LETS
(85 018)m2
RENEWALS
NEW LETS
NEW LETS
124 460m2
EXPIRIES & CANCELLATIONS
NEW LETS
12 494m2
MONTH ON MONTH LEASES
NEW LETS
2 426m2
GLA ADJUSTMENTS
Annexure 3Vacancy Reconciliation – YTD
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SA geographical spread -Revenue (%)
Gauteng -63% KZN -13%
Western Cape -10% Free State -6%
Limpopo -3% Other -5%
Total geographical spread- Total investments (%)
Australia-6% Europe-7%
U.K-1% South Africa-86%
Sectoral spread- Asset Value(%)
Office -37% Industrial -21%
Retail - 42%
Annexure 4Portfolio compositions
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Click to edit Master title style
Tenant Name Gross revenue % of total portfolio
Gross revenue % of total portfolio
Gross revenue % of total portfolio
Tenant Name Tenant Name
OFFICE INDUSTRIAL RETAIL
Massmart 4.3%
Shoprite Checkers Group
2.6%
Edcon Group 1.9%
Foschini Group 1.6%
Bidvest 1.5%
Mr Price Group 1.2%
Pepkor Group 1.0%
Pick 'n Pay Group 1.0%
Woolworths 0.9%
Spar Group 0.9%
Investec 3.6%
Cliffe Dekker Hofmeyr 3.3%
Woolworths 2.1%
Innovation 1.6%
Nedbank Group 1.4%
Fluxmans Attorneys 1.3%
Samsung Electronics Co. Ltd
1.2%
Clover 1.0%
Mentoprox (Pty) Ltd 0.9%
Standard Chartered PLC 0.8%
Pepsi Co Group 1.8%
Hengtong (Aberdare) 1.5%
Kevro Trading (Pty) Ltd 1.2%
Imperial Group Ltd 1.2%
RT Group (Pty) Ltd 1.1%
General Electric Ltd 1.0%
CWT-ASI Aquarius Shipping International (Pty) Ltd
0.9%
Goldfields Logistcs 0.9%
Adcock Ingram Healthcare
0.8%
Sumitomo Rubber South Africa (Pty) Ltd
0.8%
Annexure 5Top 10 tenants
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Disclaimer
The information contained herein is for information purposes only and readers should not rely on such information as advice in relation to a specific issue without taking financial, banking, investment or professional advice. Although information has been obtained from sources believed to be reliable, Investec Property Fund Limited (Reg. No.2008/011366/06) and or any affiliates (collectively “Investec Property”), do not warrant its completeness or accuracy. Opinions and estimates represent Investec’s view at the time of going to print and are subject to change without notice.
Past performance is not indicative of future returns. The information contained herein does not constitute an offer or solicitation of investment, banking or financial services by Investec Property. Neither Investec Property nor Investec Bank Limited shall be held liable in respect of any claim, damages or loss of whatever nature arising in connection with such information. Investec Property accepts no liability for any loss or damage of whatsoever nature including but not limited to loss of profits, goodwill or any type of financial or other pecuniary or direct or special indirect or consequential loss however arising, whether in negligence or for breach of contract or other duty as a result of use of or reliance on the information contained in this document whether authorised or not.
This document/publication may not be reproduced in whole or in part or copies distributed without the prior written consent of Investec Property.
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