Vividend Income Fund Ltd HY 2013 presentation

327 views

Published on

Vividend Income Fund Ltd HY 2013 presentation

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
327
On SlideShare
0
From Embeds
0
Number of Embeds
29
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Vividend Income Fund Ltd HY 2013 presentation

  1. 1. Interim Results Presentation For the six month period ended 28 February 2013 1
  2. 2. Vividend Income Fund • • • • • Overview Highlights Operations Finances Strategy › Acquisitions › Disposals › Maintenance › Redevelopment • Prospects › Property Portfolio › General • Dilution per DPU from 1 March 2013 • Annexures › Analysis of Portfolio 2
  3. 3. Overview • Property Portfolio: › Total value – R1,536million - Retail value - R716million (47%) - Commercial value - R820million (53%) › Total GLA – 204 336 m2 - Retail GLA - 116,719 m2 (57%) - Commercial GLA – 87 617 m2 (43%) • Enterprise Value – R1,573million › Market capitalisation – R1,031million (66%) › Debt – R542.1million (34%) • Loan to Value (LTV) - 34.4% • Linked Units: › Market price – R5.40 › NTAV – R5.11 3
  4. 4. Highlights • Growth in DPU to 27c › 10.2% growth relative to comparable six month period › 3.9% growth relative to prior six month period • Annualised distribution yield of 9.5% • 94.5% occupancy rate • Growth in Property Portfolio › Sasol Oil and Sasol Gas (both A Type, low default risk, tenants) › Cost - R155.1million › GLA - 15,912m2 › Acquisition yield, post leverage effect – 10.52% • Net Tangible Asset Value per Linked Unit increased to R5.11 • Loan to Value (LTV) within target range (35% - 40%) 4
  5. 5. Financial Overview • Drop in the ‘property expense ratio’ to 19% (versus 28.2% at 31 August 2012) › Inclusion of Sasol Oil and Sasol Gas › Cost saving initiatives › Deceleration of repairs and maintenance expenditure • Drop in the ‘other operating expense ratio’ to 8% › Administration efficiencies • Arrears maintained at budgeted levels › Meltz • Cash generation maintained at budgeted levels • Positive impact on finance costs from 50bp drop in Prime Rate (from 19 July 2012) • Positive revaluation of property portfolio to R1,536million • Positive unwind of mark-to-market applicable to interest rate swaps › Current blended rate – 7.66% (70% fixed) 5
  6. 6. Operational Overview • Weighted average lease duration maintained at 2.5yrs › 48.2% of leases expire after 31 August 2015 › 4.4% of leases are on a MTM duration • Weighted average lease escalation maintained at 7.5% › Retail – 7.9% › Commercial – 7.2% • Weighted average GR* per m2 increased to R86.22 › Retail - R63.07 per m2 › Commercial – R116.09 per m2 • Vacancies increased to 5.5% (versus 2.4% at 31 August 2012) › Retail – 3.9% › Commercial – 1.6% • 76% re-let ratio in respect of expiring GLA • A type, low default risk, tenants maintained above 70% (72%) * GR = Gross Rental, which consist of a) basic rental b) operating cost recoveries 6
  7. 7. Strategy • Acquisitions: › Focus on sustainability and longevity › Value identified down the yield curve › Access Park › Pipeline dynamics • Disposals › Minor disposals being considered • Maintenance › Reduction of tenancy costs › Reduction in common area costs • Redevelopment › Pre-emptively focused on tenant retention and lease longevity › Introduction of digital utility management system 7
  8. 8. Prospects – Property Portfolio • Positive › Below-market Gross Rental offerings › Vacant GLA offers realistic upside potential to Net Income › High percentage of low risk tenants › Favourable lease expiry profile • Negative › Aggressive leasing commissions › Defensive redevelopment › Proactive expenditure on cost saving initiatives › Return deficient tenant retention costs › Increased tenancy costs associated with Rates and electricity escalations › Lower turnover rentals associated with non-credit retailers 8
  9. 9. Prospects - General • Approval of Access Park Acquisition – 23 April 2013 • Claw-back Offer finalisation – 23 April 2013 • Claw-back and Rights Offer Circular available to Unitholders – 3 May 2013 • Introduction of Access Park Property into the Property Portfolio - May 2013 • Rights Offer finalisation – 3 June 2013 • Conversion to a SA REIT – with effect from1 September 2013 • Acquisition Pipeline • Funding options › Debt Capital Markets › Vendor Offers › Vendor Placements • Alignment of LTV to target range (dependant on success of Rights Offer) 9
  10. 10. Dilution in DPU from 1 March 2013 • Dilution as a result of: › Access Park Acquisition › Claw-back Offer and Rights Offer › Defensive repairs and maintenance › Pre-emptive tenant retention costs • Two forecasts to be presented: › Full take-up of Rights Offer (100% or R539m) - Resultant LTV – 26% - DPU – 2013 – 49.5c - DPU – 2014 – 50.0c › Partial take-up of Rights Offer (54.1% or R291m) - Take-up limited to Irrevocable Commitments received - Resultant LTV – 38% - DPU – 2013 – 50.60c - DPU 2014 – 51.60c 10
  11. 11. Thank you Questions 11
  12. 12. Appendix 1 Portfolio Analysis 12
  13. 13. Financial Review- Geographical spread Building code GLA Book Value R'000 13,264 74,841 3,683 22,530 Gauteng 90,018 717,750 KwaZulu Natal 38,954 328,660 Mpumalanga 10,497 66,980 Western Cape 47,920 325,247 204,336 1,536,008 Eastern Cape Free State Total 2% GLA Book Value 5% 7% 5% Gauteng 4% Western Cape 44% 19% Natal Eastern Cape 21% 47% Mpumalanga Free State 23% 21% 13
  14. 14. Financial Review- Single vs. Multi Tenant Number of Properties Book Value GLA Book Value/ GLA Multi 14 1,053,978 149,593 7,046 Single 7 482,030 54,743 8,805 Total 21 1,536,008 204,336 7,517 Type GLA Book Value 27% 31% Multi Single 73% 69% 14
  15. 15. Financial Review- Sector Analysis Book Value R’000 12 Commerical Total Vacant GLA GR* per m² 715,599 116,719 6,130 7,915 63,07 820,409 87,617 9,364 3,244 116,09 21 Retail GLA Book Value/ GLA 9 Sector Number of properties 1,536,008 204,336 7,517 11,159 86,22 Vacancies Book Value GLA 29% 43% 47% 57% 53% 71% Retail Commercial 15 * GR = Gross Rentals, which consist of a) basic rental b) operating cost recoveries
  16. 16. Financial Review- Lease Expiry Profile by GLA Sector Vacant MTM Aug 13 Aug 14 Aug 15 Aug 16 >Aug 16 TOTAL Retail 7,915 4,274 4,826 20,224 25,659 25,853 27,968 116,719 Commercial 3,244 4,635 11,165 12,615 11,309 42,226 2,423 87,617 11,159 8,909 15,991 32,839 36,968 68,079 30,391 204,336 6% 4% 8% 16% 18% 33% 15% 100% Total Lease Expiry Profile 6% 4% 8% 15% Month to month Expires by Aug 13 16% Expires by Aug 14 Expires by Aug 15 Expires by Aug 16 Expires after Aug 16 33% 18% Vacant 16
  17. 17. Financial Review- Tenant Risk Review by GLA Building A Tenants B Tenants C Tenants Vacant Total Retail 78,654 4,135 26,015 7,915 116,719 Commercial 68,774 2,506 13,093 3,244 87,617 147,428 6,641 39,108 11,159 204,336 Total A. Low default risk B. Medium default risk C. High default risk 17
  18. 18. Interim Results Presentation For the six month period ended 28 February 2013 18

×