october 2012 - dipula income fund roadshow presentation... · 2012-11-01 · prospects 7 │ fy...
TRANSCRIPT
INVESTOR PRESENTATION
October 2012
DISCLAIMER This document has been prepared and issued by and is the sole responsibility of the management of Dipula Income Fund Limited (the “Company” or “Dipula”) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, to any other person. The contents of this presentation are to be kept confidential.
Neither this document nor the fact of its distribution should be regarded as a recommendation regarding the securities of the Company or an investment therein. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities.
This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the Directors’ beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.
This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. This information is still in draft form and has not been legally verified. The financial information included herein is in draft form and unaudited. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.
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INDEX
Key investment highlights
Management investment
Share price performance
Prospects
Proposed offer
Acquisitions summary
Debt structure
Property portfolio
New property profiles
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KEY INVESTMENT HIGHLIGHTS
│ Listed on the JSE on 17 August 2011 with an initial portfolio of R2.1 billion
│ 2012 distributions in line with forecasts
│ R1.38 billion of yield and portfolio enhancing post listing acquisitions
│ Excellent BEE credentials through black-owned asset manager and significant management shareholding
│ Geographically and sectorally diversified and defensive property portfolio with retail bias
│ Located in 9 provinces with majority of the portfolio located in the economic hub of Gauteng
│ Property management outsourced to Broll, JHI and McCormick
│ A and B units accommodate different risk and reward profiles
│ More growth opportunities presented by BEE status
│ Low asset management fees at 0.3%
│ Low average rentals with room for growth
│ Above inflation escalations
│ Some vacancy upside potential
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MANAGEMENT INVESTMENT
5
│ Redefine Properties Limited disposed of 50 million Dipula B linked units to a trust controlled by Dipula
management
│ Funded by significant equity contribution from management as well as third party debt
│ Increased management’s effective shareholding in Dipula to approximately 25%
│ Strongly aligns management’s interest with that of other Dipula unitholders
SHARE PRICE PERFORMANCE
6
-
200
400
600
800
1 000
1 200
Cents
DIPULA-A
DIPULA-B
PROSPECTS
7
│ FY 2013 anticipated growth in distributions of between 7% and 9%*:
A unit secured preferential growth of 5%
B unit anticipated growth in distributions of between 9.7% and 14.3%
│ These forecasts do not include the impact of the acquisitions (other than Bochum and Blouberg
Plaza and Nquthu Plaza), which acquisitions are anticipated to be income enhancing
│ Other opportunities include:
pipeline of developments with development partners
currently assessing various acquisitions in all three sectors
opportunity to become more cost efficient
revamp and upgrade opportunities to further improve the portfolio
sell underperforming assets
* - The information on which these projections have been based has not been reviewed or reported on by the company’s auditors
PROPOSED OFFER
│ Issuer Dipula Income Fund Limited
│ Offer size Offer to raise between R450 million and R650 million
│ Offer structure Primary issue
│ Bookrunners Java Capital
│ Indicative timing Firm commitments by 16:00: Monday, 5 November 2012
Listing of new linked units: Monday, 12 November 2012
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ACQUISITIONS SUMMARY
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Post listing acquisitions Sector Location GLA (M2) Purchase price Status Acquisition yield
Bochum and Blouberg Plaza Retail Bochum, Limpopo 12 529 117 207 584 Lodged 9.5%
Nquthu Plaza Retail Nquthu, Kwa-Zulu Natal 14 972 136 701 303 Transferred 9.5%
Plaza Shopping Centre Retail Phuthaditjhaba, Free State 25 720 179 500 000 Transfer expected 9.8%
Randfontein Shopping Centre Retail Randfontein, Gauteng 5 935 46 200 000 Transfer expected 9.8%
Bushbuckridge Shopping Centre Retail Bushbuckridge, Mpumalanga 16 203 104 180 000 Transfer expected 9.8%
Absa Home Loans Office Pretoria, Gauteng 5 048 82 600 000 Transfer expected 10.0%
SAPS VIP Office Pretoria, Gauteng 21 478 229 860 000 Transfer expected 10.0%
SAPS IJS Office Pretoria, Gauteng 7 699 118 540 000 Transfer expected 10.0%
Byron Place Office Pretoria, Gauteng 3 270 38 000 000 Transfer expected 10.0%
Sterkolite building Industrial Rosslyn, Gauteng 12 782 78 000 000 Transfer expected 13.0%
Orange Farm Retail Orange Farm, Gauteng 5 600 42 000 000 Transfer expected 9.25%
Tower Mall Retail Jouberton, North West Province 15 283 152 713 025 Currently under development 9.85%
Melki Portfolio Retail Kwa-Zulu Natal 6 900 57 000 000 Transfer expected 10.0%
Total 153 419 1 382 501 912 10.0%*
* - Weighted average acquisition yield
DEBT STRUCTURE
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Per 2011 Annual report –
August 2011
(actual)
Post implementation of the
acquisitions
(anticipated)
Long-term borrowings (millions) R759.5m R1.2bn – R1.5bn
Average interest rate 8.59% Approximately 8.5%
Gearing 36% 36% to 42%
Level of debt at fixed rates 80% 80%
Length of fixes 4-5 years 3-5 years
Dipula will continue to conservatively manage interest rates and is currently investigating the debt
capital market (bonds and commercial paper) for cheaper debt.
PROPERTY PORTFOLIO
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Impact of the acquisitions on average property size and value
Per prospectus –
August 2011
(actual)
Acquisitions
Post implementation
of the acquisitions
(anticipated)*
Number of properties 175 14 189
Total GLA (m2) 436 626 153 419 590 045
Total value R2.109 billion R1.383 billion R3.492 billion
Average property size (m2) 2 495 10 959 3 121
Average property value R12.049 million R98.750 million R18.391 million
* - pre disposals
PROPERTY PORTFOLIO
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Impact of the acquisitions on geographic spread
Per prospectus – August 2011
(actual)
Post implementation of the acquisitions
(anticipated)
75%
5%
5%
5% 3% 2% 2% 2% 1% Gauteng
Free State
Kwa-Zulu Natal
Mpumalanga
Western Cape
Eastern Cape
Limpopo
North West
Northern Cape
66% 8%
7%
6% 2% 2%
4% 4% 1% Gauteng
Free State
Kwa-Zulu Natal
Mpumalanga
Western Cape
Eastern Cape
Limpopo
North West
Northern Cape
PROPERTY PORTFOLIO
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Impact of the acquisitions on sectoral profile
Per prospectus – August 2011
(actual)
Post implementation of the acquisitions
(anticipated)
50%
27%
23%
Retail
Industrial
Offices55%
22%
23%
Retail
Industrial
Offices
NEW PROPERTY PROFILES
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Bochum and Blouberg Plaza
Region: Bochum, Limpopo
Sector: Retail
Anchors: Boxer and Cashbuild
Cost: R 117 207 584
GLA (m2): 12 529
Vacancy %: 0%
Weighted average rental per m2: R82.15
Weighted average lease escalation: 8%
Cost per m2: R9 355
Weighted average remaining lease period: 3 years
NEW PROPERTY PROFILES
15
Nquthu Plaza
Region: Nquthu, Kwa-Zulu Natal
Sector: Retail
Anchors: Shoprite and Cashbuild
Cost: R 136 701 303
GLA (m2): 14 972
Vacancy %: 1.9%
Weighted average rental per m2: R77.73
Weighted average lease escalation: 7.5%
Cost per m2: R9 130
Weighted average remaining lease period: 4.3 years
NEW PROPERTY PROFILES
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The Plaza Shopping Centre
Region: Phuthaditjhaba, Free State
Sector: Retail
Anchors: Shoprite-Checkers, Pick n
Pay and Bi-Bi Cash and Carry
Value: R 179 500 000
GLA (m2): 25 720
Vacancy %: 1%
Weighted average rental per m2: R74.35
Weighted average lease escalation: 8.1%
Cost per m2: R6 979
Weighted average remaining lease period: 3.2 years
NEW PROPERTY PROFILES
17
Randfontein Shopping Centre
Region: Randfontein, Gauteng
Sector: Retail
Anchors: Shoprite-Checkers
Value: R 46 200 000
GLA (m2): 5 935
Vacancy %: 8%
Weighted average rental per m2: R79.00
Weighted average lease escalation: 7.4%
Cost per m2: R7 784
Weighted average remaining lease period: 4 years
NEW PROPERTY PROFILES
18
Bushbuckridge Shopping Centre
Region: Bushbuckridge,
Mpumalanga
Sector: Retail
Anchors: Shoprite-Checkers &
Cashbuild
Cost: R 104 180 000
GLA (m2): 16 203
Vacancy %: 0%
Weighted average rental per m2: R62.80
Weighted average lease escalation: 8.8%
Cost per m2: R6 430
Weighted average remaining lease period: 3.2 years
NEW PROPERTY PROFILES
19
ABSA Home Loans
Region: Arcadia, Pretoria
Sector: Office
Anchors: ABSA
Cost: R 82 600 000
GLA (m2): 5 048
Vacancy %: 0%
Weighted average rental per m2: R121.50
Weighted average lease escalation: 8.5%
Cost per m2: R16 363
Weighted average remaining lease period: 5 years
NEW PROPERTY PROFILES
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SAPS VIP
Region: Sunnyside, Pretoria
Sector: Office
Anchors: Department of Public
Works
Cost: R 229 860 000
GLA (m2): 21 478
Vacancy %: 0%
Weighted average rental per m2: R91.00
Weighted average lease escalation: 9%
Cost per m2: R10 702
Weighted average remaining lease period: 2.5 years
NEW PROPERTY PROFILES
21
SAPS IJS
Region: Erasmuskloof, Pretoria
Sector: Office
Anchors: Department of Public
Works
Cost: R 118 540 000
GLA (m2): 7 699
Vacancy %: 0%
Weighted average rental per m2: R116.40
Weighted average lease escalation: 9%
Cost per m2: R15 397
Weighted average remaining lease period: 2 years
NEW PROPERTY PROFILES
22
Byron Place
Region: Pretoria, Gauteng
Sector: Office
Anchors: DPW
Cost: R 38 000 000
GLA (m2): 3 270
Vacancy %: 0%
Weighted average rental per m2: R84.94
Weighted average lease escalation: 8.5%
Cost per m2: R11 621
Weighted average remaining lease period: 7.4 years
NEW PROPERTY PROFILES
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Sterkolite Building
Region: Rosslyn, Gauteng
Sector: Specialised
Anchors: DPW
Cost: R 78 000 000
GLA (m2): 12 782
Vacancy %: 0%
Weighted average rental per m2: R62.70
Weighted average lease escalation: 8%
Cost per m2: R6 102
Weighted average remaining lease
period:
8 years
NEW PROPERTY PROFILES
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Orange Farm Phase 1 Region: Gauteng
Sector: Retail
Anchors: Cashbuild and Boxer
Cost: R 42 000 000
GLA (m2): 5 600
Vacancy %: 0%
Weighted average rental per m2: R62
Weighted average lease
escalation:
7% (year 1 flat for
Boxer and structured
finance deal from
Cashbuild, op costs
esc @ 8%)
Cost per m2: R7500
Weighted average remaining lease
period:
12 years
NEW PROPERTY PROFILES
25
Tower Mall
Region: Jouberton, North West
Province
Sector: Retail
Anchors: Shoprite and Cashbuild
Cost: R 152 713 025
GLA (m2): 15 283
Vacancy %: 0%
Weighted average rental per m2: R98.69
Weighted average lease escalation: 7%
Cost per m2: R9 992
Weighted average remaining lease
period:
5 years
NEW PROPERTY PROFILES
26
Melki Portfolio
Region: KZN
Sector: Retail
Anchors: Pick n Pay
Cost: R57 000 000
GLA (m2): 6 900
Vacancy %: 0.5%
Weighted average rental per m2: R83.96
Weighted average lease escalation: 6.7%
Cost per m2: R8 261
Weighted average remaining lease period: 5.3 years