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Resilient Property Income Fund Limited HY to 31 Dec 2013 financial results presentation

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Resilient Property Income Fund Limited HY to 31 Dec 2013 financial results presentation

Resilient Property Income Fund Limited HY to 31 Dec 2013 financial results presentation

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  • 1. Interim results presentation December 2013
  • 2. Financial performance Jun 2012 Distribution per unit Units in issue Dec 2012 Jun 2013 Dec 2013 120.74 cents 134.93 cents 136.23 cents 159.59 cents 280 536 070 285 744 070 289 544 070 293 339 070 R30.55 R34.51 R41.75 R44.36 28.3% 26.6% 26.5% 34.0% Property operations Net asset value* Interest-bearing debt to asset ratio** * NAV includes total equity attributable to equity holders and linked debentures. ** Interest-bearing debt to asset ratio is calculated by dividing total interest-bearing borrowings by total assets. Eagle’s Eye Investments (Pty) Ltd was deconsolidated in June 2013. 2
  • 3. Recalculated NAV Dec 2013 R’000 Total equity attributable to equity holders Linked debentures NAV R per unit 11 603 926 1 408 028 13 011 954 44.36  Nepi 331 802 1.13  Other 81 644 0.28 13 425 400 45.77 Deferred tax on balance sheet Proceeds - PFM 700 000 Base cost - PFM (26 422) Estimation of NAV 14 098 978 2.30 48.07* * June 2013: R45,68 3
  • 4. BBBEE  Three schemes 1. Amber Peek ‒ Gauteng group ‒ Thohoyandou group ‒ Resilient Education Trust 26% 26% 48% 2. Eagle’s Eye ‒ ‒ ‒ ‒ Gauteng group Polokwane group Mthatha group Resilient Education Trust 25% 25% 25% 25% 3. Resilient Education Trust  No claw-backs / investment banks 4
  • 5. Earnings drivers  Property performance ‒ Contractual rent escalations 7.3% ‒ Sales growth 8.1% ‒ Turnover rentals R21,2m (budget R12,8m)  Performance of listed equities ‒ Foreign ‒ South African  Gearing effect  Interest rate hedges 5
  • 6. Property performance  Retailers ‒ Performance of retailers ‒ International retailers ‒ Lack of suitable lettable area ‒ Decision-making ‒ Cancellation/domino clauses  Arrears and bad debts  Vacancies 2.7%  Operating expenses ‒ Rates & taxes 6
  • 7. Cost of finance 10.00% 9.75% 9.50% 9.25% 9.00% 8.75% 8.50% 8.25% 8.00% 7.75% 7.50% 7.25% 7.00% 6.75% 6.50% 6.25% 6.00% 5.75% 5.50% 5.25% 5.00% Jan 11 Apr 11 Jul 11 8 000 000 000 7 000 000 000 6 000 000 000 5 000 000 000 4 000 000 000 3 000 000 000 2 000 000 000 1 000 000 000 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Average interest Prime per Standard Bank 3m Jibar - Drawdown 7
  • 8. South African swap rates 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 7-year swap 5-year swap 8
  • 9. Interest rate hedges R 1 400 000 000 Swaps and caps: Total R6.0 billion Average value weighted expiry 4.40 years (based on 31 Dec 2013) 1 200 000 000 1 000 000 000 800 000 000 600 000 000 400 000 000 200 000 000 - Jun 2015 Jun 2016 Jun 2017 Jun 2018 Jun 2019 Jun 2020 Jun 2021 Jun 2022 Swaps Caps 9
  • 10. Facilities Jun 2013 Dec 2013 DMTN-5 year DMTN-3 year DMTN-1 year Commercial paper DMTN-5 year Standard DMTN-3 year Bank R484m R740m R270m R500m R490m R1640m R1 850m R300m R483m DMTN-1 year R1 911m Nedbank Commercial paper Standard Bank R484m R490m R1 850m R2 736m Nedbank RMB RMB 10
  • 11. Facility expiry R’m 3 000 2 500 2 000 1 500 1 000 500 0 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Jun 20 11
  • 12. Direct vs indirect property Jun 2013 Dec 2013 Direct 4.9% 3.2% 8.6% CPL NEP 9.9% 73.4% FFA 7.6% 4.2% 1.2% 10.4% 7.7% 68.9% FFB ROC 12
  • 13. Equity investments Jun 2013 Dec 2013 Investment No. of units/shares Fair value (R’000) No. of units/shares Fair value (R’000) Capital 153 850 000 1 636 964 139 350 000 1 484 077 Fortress A - - 15 123 259 222 311 Fortress B 63 000 000 535 500 88 469 463 809 496 Nepi 21 220 000 1 421 527 24 750 000 2 004 750 Rockcastle 60 775 000 817 423 106 238 060 1 487 333 TOTAL (R10.64) (R8.50) (R66.99) (R13.45) 4 411 414 (R10.65) (R14.70) (R9.15) (R81.00) (R14.00) 6 007 967 13
  • 14. Acquisitions and completed developments Acquisitions  Additional 65% of The Galleria and Arbour Crossing and sale of vacant land Completed developments  Secunda Mall  The Grove  Village Mall Kathu  Jabulani Mall  Northam Plaza  Rivonia Village 14
  • 15. The Galleria 15
  • 16. The Galleria 16
  • 17. The Galleria 17
  • 18. The Galleria 18
  • 19. Secunda Mall 19
  • 20. Secunda Mall 20
  • 21. Secunda Mall 21
  • 22. Secunda Mall 22
  • 23. Secunda Mall 23
  • 24. Secunda Mall 24
  • 25. The Grove 25
  • 26. The Grove 26
  • 27. The Grove 27
  • 28. The Grove 28
  • 29. Village Mall Kathu 29
  • 30. Village Mall Kathu 30
  • 31. Village Mall Kathu 31
  • 32. Construction challenges  Quality of work  Building cost inflation  Militancy by interest groups  Labour instability 32
  • 33. Property developments – in progress Property name Circus Triangle Mthatha (phase 2 &3) RES % GLA (100%) Cost (RES %) Construction period Yield 100% 8 753m² R170m Jul 13 – Oct 14 8.00% Soshanguve Crossing 55% 34 000m² R259m Nov 12 – May 14 8.00% Tzaneen Lifestyle Centre 45% 36 000m² R293m Jun 14 – Nov 15 8.00% Mvusuludzo Mall Thohoyandou 100% 2 500m² R48m Mar 14 – Jun 15 10.00% Murchison Mall 100% 1 340m² R65m Jul 14 – Oct 15 6.00% 33
  • 34. Tzaneen Lifestyle Centre 34
  • 35. Tzaneen Lifestyle Centre 35
  • 36. Tzaneen Lifestyle Centre 36
  • 37. Property developments – pipeline RES % GLA (100%) Estimated cost (RES %) Estimated construction period Yield Checkers Burgersfort 100% 6 500m² R100m Feb 15 – Nov 15 8.00% The Grove 100% 15 000m² R270m Feb 15 – Aug 16 8.00% I’langa Mall 70% 16 000m² R205m Jul 14 – Nov 15 6.00% Boardwalk Shopping Centre 100% 10 000m² R200m Sep 14 – Mar 16 7.00% Limpopo Mall 100% 7 000m² R140m Jun 14 – Nov 15 8.00% 60% 15 000m² R145m Mar 15 – Mar 16 8.00% Property name Mall of the North 37
  • 38. African investment initiatives  Four target countries including Nigeria & Zambia  New developments preferred  Local equity partners  No structured yields  Minimum US$ yields ‒ Resilient development: 10% ‒ Separate developer - no development risk: 9.5%  Impact of new developments  50% local currency borrowings 38
  • 39. Resilient Africa  JV with Standard Bank & Shoprite Checkers  Increase in capital commitment to R1 billion  Construction at Owerri commenced  Six additional sites in process with commencement of construction of two developments by December 2014 39
  • 40. Delta Mall - Delta State, Nigeria 40
  • 41. Delta Mall - Delta State, Nigeria 41
  • 42. Delta Mall - Delta State, Nigeria 42
  • 43. Delta Mall - Delta State, Nigeria 43
  • 44. Owerri - Imo State, Nigeria 44
  • 45. Owerri - Imo State, Nigeria 45
  • 46. Owerri - Imo State, Nigeria 46
  • 47. Owerri - Imo State, Nigeria 47
  • 48. Owerri - Imo State, Nigeria 48
  • 49. Projects for the year  Capitalisation of debentures post scheme of arrangement  Internalisation of PFM  Increase offshore holdings  Increase entertainment and food offerings  Reduce loans receivable ‒ CPL staff loans ‒ BBBEE loans ‒ Development partner loans  Regional mall opportunities 49
  • 50. Prospects Growth in distributions  Retail sales  Acquisitions  Currency fluctuations  Interest rate changes 50
  • 51. Questions & Answers 51